Court Opinion

ID: 4093664
Source: CourtListenerOpinion
Date Created: 2016-10-28 17:05:37.505583+00
Date Added: 2024-06-11T14:36:46.881005
License: Public Domain

COLORADO COURT OF APPEALS                                       2016COA158

Court of Appeals No. 15CA1959
Garfield County District Court No. 13CV30033
Honorable Gail H. Nichols, Judge

Sopris Lodging, LLC, a Colorado limited liability company, assignee of the
claims of TDC/BEI Joint Venture, LLC, a Colorado limited liability company;
Charles R. Lakin, an individual; and Tyler Casebier, an individual,

Third-Party Plaintiffs-Appellants,

v.

Schofield Excavation, Inc., a Colorado corporation; and Colorado Engineering
Contractors, Inc., a Colorado corporation,

Third-Party Defendants-Appellees.

                            JUDGMENT AFFIRMED

                                  Division VI
                         Opinion by JUDGE RICHMAN
                         Bernard and Fox, JJ., concur

                         Announced October 20, 2016

Wolf Slatkin & Madison, P.C., Albert B. Wolf, Jonathan L. Madison, Denver,
Colorado, for Third-Party Plaintiffs-Appellants

Markusson, Green & Jarvis, H. Keith Jarvis, Daniel R. Coombe, Anne K.
McMichael, Denver, Colorado, for Third-Party Defendant-Appellee Schofield
Excavation, Inc.

Stuart D. Morse & Associates, LLC, Stuart D. Morse, Matthew J. Bayma,
Greenwood Village, Colorado, for Third-Party Defendant-Appellee Colorado
Engineering Contractors, Inc.
¶1    In this construction defect case, Sopris Lodging, LLC, assignee

 of the claims of third-party plaintiffs TDC/BEI Joint Venture, LLC

 (TDC), Charles R. Lakin, and Tyler Casebier, appeals the district

 court’s entry of summary judgment in favor of third-party

 defendants, Schofield Excavation, Inc. (Schofield), and Colorado

 Engineering Contractors, Inc. (CEC). Because we conclude that the

 third-party claims at issue are time barred, we affirm.

                          I.    Background

¶2    TDC was the general contractor for the construction of a hotel

 owned by Sopris Lodging. On March 11, 2011, Sopris Lodging sent

 TDC a notice of claim regarding alleged construction defects at the

 hotel. On May 24, 2013, Sopris Lodging filed a complaint in district

 court asserting construction defect claims against one of the

 subcontractors of the hotel, and against the TDC’s individual

 principals, Lakin and Casebier, who had guaranteed TDC’s

 performance. On the same date, however, Sopris Lodging and TDC

 entered into an agreement to toll the statute of limitations for Sopris

                                   1
 Lodging’s claims against TDC. Sopris Lodging later amended its

 complaint in August of 2013 to add claims against TDC.1

¶3    In 2014, while those claims were pending, TDC filed third-

 party claims against several subcontractors, including Schofield

 and CEC, for breach of contract, negligence, contribution, and

 indemnification. CEC and Schofield moved for summary judgment,

 asserting that TDC’s third-party claims were barred by the two-year

 statute of limitations set forth in section 13-80-102, C.R.S. 2016,

 and made applicable to TDC’s claims through section

 13-80-104(1)(a), C.R.S. 2016. CEC and Schofield argued that those

 claims accrued on or before March 11, 2011, when Sopris Lodging

 sent the notice of claim to TDC. Because TDC did not file its third-

 party claims until 2014, CEC and Schofield asserted that the claims

 were time barred.

¶4    In its response, TDC did not dispute the date of accrual.

 However, it asserted that section 13-80-104(1)(b)(II) tolled the

 statute of limitations for a defendant’s third-party claims until

 1 Hereinafter, we refer to TDC and its principals collectively as
 “TDC.”

                                    2
 ninety days after a settlement or final judgment on the plaintiffs’

 claims against the defendant.

¶5    After briefing, the district court entered a detailed written

 order ruling that the third-party claims were time barred. Relying

 on CLPF-Parkridge One, L.P. v. Harwell Investments, Inc., 105 P.3d
658 (Colo. 2005), the court concluded that section 13-80-

 104(1)(b)(II) did not apply to TDC’s third-party claims and that

 those claims were barred by the limitations period in section

 13-80-104(1)(a). Accordingly, the court entered summary judgment

 in favor of CEC and Schofield.

¶6    Thereafter, Sopris Lodging and TDC reached a settlement

 agreement. TDC assigned its third-party claims to Sopris Lodging,

 and Sopris Lodging, standing in the shoes of TDC, filed this appeal.

                             II.      Discussion

¶7    Sopris Lodging contends that the court misapplied section

 13-80-104 in ruling that the third-party claims of TDC were time

 barred. We disagree.

                        A.         Standard of Review

¶8    We review a trial court’s order on a summary judgment motion

 de novo. Gibbons v. Ludlow, 2013 CO 49, ¶ 11. Summary

                                         3
  judgment is appropriate when the pleadings and supporting

  documents establish that there is no genuine issue as to any

  material fact and that the moving party is entitled to judgment as a

  matter of law. Id.

¶9     Statutory interpretation is a question of law that we review de

  novo. Klinger v. Adams Cty. Sch. Dist. No. 50, 130 P.3d 1027, 1031

  (Colo. 2006). Our task is to give effect to the intent of the General

  Assembly. Id. To do so, we look first to the language of the statute.

  Id. We construe words and phrases according to their commonly

  accepted and understood meanings. A.S. v. People, 2013 CO 63,

  ¶ 10. Where the language is clear and unambiguous, we do not

  resort to other rules of statutory construction. Klinger, 130 P.3d at

  1031.

                           B.   Applicable Law

¶ 10   Section 13-80-104(1)(a) provides that the two-year statute of

  limitations set forth in section 13-80-102(1) applies to construction

  defect claims:

             Notwithstanding any statutory provision to the
             contrary, all actions against any architect,
             contractor, builder or builder vendor, engineer,
             or inspector performing or furnishing the
             design, planning, supervision, inspection,

                                     4
            construction, or observation of construction of
            any improvement to real property shall be
            brought within the time provided in section
            13-80-102 after the claim for relief arises, and
            not thereafter, but in no case shall such an
            action be brought more than six years after the
            substantial completion of the improvement to
            the real property, except as provided in
            subsection (2) of this section.

¶ 11   Section 13-80-104(1)(b) provides:

            (I) Except as otherwise provided in
            subparagraph (II) of this paragraph (b), a claim
            for relief arises under this section at the time
            the claimant or the claimant’s predecessor in
            interest discovers or in the exercise of
            reasonable diligence should have discovered
            the physical manifestations of a defect in the
            improvement which ultimately causes the
            injury.

            (II) Notwithstanding the provisions of
            paragraph (a) of this subsection (1), all claims,
            including, but not limited to indemnity or
            contribution, by a claimant against a person
            who is or may be liable to the claimant for all
            or part of the claimant’s liability to a third
            person:

            (A) Arise at the time the third person’s claim
            against the claimant is settled or at the time
            final judgment is entered on the third person’s
            claim against the claimant, whichever comes
            first; and

            (B) Shall be brought within ninety days after
            the claims arise, and not thereafter.

                                    5
¶ 12   In CLPF-Parkridge One, the supreme court held that section

  13-80-104(1)(b)(II) does not bar a defendant contractor from

  asserting third-party claims for indemnity or contribution against

  subcontractors before the resolution of the underlying construction

  defect claims. 105 P.3d at 663-65. The court concluded that

  section 13-80-104(1)(b)(II) is not a ripeness provision but instead

  “toll[s] the otherwise applicable statute of limitations in order to

  allow indemnity or contribution claims to be brought in a separate

  lawsuit . . . within ninety days after settlement of or judgment in

  the construction defect lawsuit.” Id. at 665. Thus, a defendant in a

  construction defect lawsuit may either (1) bring appropriate

  cross-claims or third-party claims in the same lawsuit or (2) wait to

  file a separate suit within the ninety-day period after a settlement or

  judgment in the construction defect lawsuit in accordance with

  section 13-80-104(1)(b)(II). Id. at 664-65.

                               C.   Analysis

¶ 13   Relying on CLPF-Parkridge One, Sopris Lodging asserts that

  section 13-80-104(1)(b)(II) tolled the statute of limitations for the

  third-party claims that TDC asserted against subcontractors in this

  case. We disagree.

                                     6
¶ 14   As set forth in CLPF-Parkridge One, section 13-80-104(1)(b)(II)

  gives a contractor the option to bring indemnity or contribution

  claims against subcontractors in a separate lawsuit after the

  underlying claims are resolved, and it tolls the statute of limitations

  for such claims. Here, however, TDC did not wait to file claims

  against subcontractors in a separate lawsuit. It chose instead to

  assert third-party claims in the original construction defect

  litigation. Thus, we conclude that section 13-80-104(1)(b)(II) does

  not apply to TDC’s third-party claims.

¶ 15   CLPF-Parkridge One did not address the statute of limitations

  applicable to third-party claims brought in the original construction

  defect lawsuit. Nonetheless, we conclude that those claims are

  subject to the two-year statute of limitations in section

  13-80-104(1)(a) and the accrual provision in section

  13-80-104(1)(b)(I).

¶ 16   Section 13-80-104(1)(a) provides that all construction defect

  actions must be brought within two years (the time provided in

  section 13-80-102) after “the claim for relief arises.” See also

  § 13-80-104(1)(c) (such actions include actions for indemnity and

  contribution). Section 13-80-104(1)(b)(I) states that, except as

                                     7
  otherwise provided in section 13-80-104(1)(b)(II), a claim for relief

  “arises” when the claimant discovers or should have discovered the

  physical manifestations of the defect. Thus, the only exception to

  the generally applicable accrual provision is for claims against third

  parties filed in a separate lawsuit in accordance with section

  13-80-104(1)(b)(II). See CLPF-Parkridge One, 105 P.3d at 663-65.

  Because that exception is inapplicable here, TDC was required to

  comply with sections 13-80-104(1)(a) and 13-80-104(1)(b)(I) in filing

  its third-party claims.

¶ 17   Our interpretation is supported by Nelson, Haley, Patterson &

  Quirk, Inc. v. Garney Companies, Inc., which concluded that the

  accrual language currently found in section 13-80-104(1)(b)(I)

  required indemnity claims to be brought within the same period of

  time as the underlying construction defect claims. 781 P.2d 153,

  155 (Colo. App. 1989). That case was decided before the General

  Assembly amended the statute in 2001 to add section

  13-80-104(1)(b)(II) to permit the filing of contribution and indemnity

  claims within ninety days after the entry of a settlement or

  judgment. However, as explained above, TDC did not pursue its

  third-party claims in accordance with section 13-80-104(1)(b)(II).

                                     8
  Therefore, like the division in Nelson, we conclude that TDC’s third-

  party claims were governed by the same limitation period and

  accrual provisions applicable to the underlying construction defect

  claims.

¶ 18   It is undisputed that TDC received notice of the alleged defects

  on March 11, 2011, when Sopris Lodging sent TDC a notice of

  claim. Under section 13-80-104(1)(b)(I), the claims accrued and the

  two-year limitations period began to run on that date. Apart from

  section 13-80-104(1)(b)(II), which we have deemed inapplicable,

  Sopris Lodging does not contend that any other tolling provision

  applied to TDC’s claims. Therefore, the limitations period expired

  with respect to those claims on March 11, 2013. Because TDC did

  not file its third-party claims until 2014, the claims were time

  barred.

¶ 19   We acknowledge that this analysis leads us to the somewhat

  anomalous conclusion that the statute of limitations applicable to

  TDC’s third-party claims could have expired before Sopris Lodging

  filed the underlying construction defect claims against TDC.2

  2 However, in this case the statute of limitations may have been
  tolled with respect to Sopris Lodging’s underlying claims against

                                    9
Nevertheless, TDC had several options available to preserve its

third-party claims against subcontractors. When TDC received

Sopris Lodging’s notice of claim, it could have sent its own notices

to subcontractors, thereby tolling the statute of limitations during

the notice of claims process pursuant to section 13-20-805, C.R.S.

2016. See Shaw Constr., LLC v. United Builder Servs., Inc., 2012
COA 24, ¶ 28. It also could have sought a tolling agreement with

those subcontractors. Alternatively, TDC could have waited to file

indemnity or contribution claims against subcontractors until after

Sopris Lodging’s underlying claims against it were resolved, in

accordance with section 13-80-104(1)(b)(II).3 TDC did not pursue

any of these options.

TDC for some time during the notice of claim process pursuant to
section 13-20-805, C.R.S. 2016, and possibly pursuant to the
tolling agreement between those parties. Although TDC filed a
motion seeking to dismiss Sopris Lodging’s claims pursuant to the
statute of limitations, the motion was not ruled upon by the district
court.
3 As the district court noted in its order, this option carries the risk

that the claims will be barred by the six-year statute of repose in
section 13-80-104(1)(a), C.R.S. 2016, if the underlying claims are
not resolved within that time. See Thermo Dev., Inc. v. Cent.
Masonry Corp., 195 P.3d 1166, 1168 (Colo. App. 2008) (concluding
that section 13-80-104(1)(b)(II) does not act as a tolling provision for
the six-year statute of repose). However, we are not persuaded that

                                  10
¶ 20   Therefore, for the reasons set forth above, we conclude that

  TDC’s third-party claims were time barred. In reaching this

  conclusion, we apply the express language of the statutes, and the

  interpretation of the statutes as explained in CLPF-Parkridge One.

  It is not our role to rewrite the statutes, as that is the function of

  the General Assembly.

              III.     Sopris Lodging’s Separate Lawsuit

¶ 21   After Sopris Lodging settled its claims against TDC, Sopris

  Lodging, as TDC’s assignee, brought indemnity and contribution

  claims against CEC and Schofield in a separate lawsuit purportedly

  under section 13-80-104(1)(b)(II). CEC and Schofield request that

  we dismiss the complaint in that case and rule that Sopris

  Lodging’s claims are barred by the doctrine of claim preclusion.

  However, those claims are the subject of a separate case and are

  not before us in this appeal. With exceptions not applicable here,

  our jurisdiction is limited to appeals from final judgments, see

  § 13-4-102(1), C.R.S. 2016, and no appeal of a final judgment in

  that case is before us. Accordingly, we do not address those claims.

  the potential effect of the statute of repose should alter our analysis
  of the applicable statute of limitation.

                                     11
                        IV.     Attorney Fees

¶ 22   We also reject CEC’s request for an award of appellate attorney

  fees. C.A.R. 39.1 requires a party requesting attorney fees to state

  the legal basis that justifies an award of fees. CEC asserts that

  Sopris Lodging was “on notice that its separate claims were futile

  and this appeal would be unsuccessful.” To the extent that this

  argument refers to the grounds for an award of fees stated in

  section 13-17-102(4), C.R.S. 2016, and C.A.R. 38, we do not deem

  the appeal frivolous, groundless, or vexatious under those

  provisions. See Mission Denver Co. v. Pierson, 674 P.2d 363, 366

  (Colo. 1984) (an appeal is not frivolous merely because it is

  ultimately unsuccessful).

                          V.       Conclusion

¶ 23   The judgment is affirmed.

       JUDGE BERNARD and JUDGE FOX concur.

                                    12