Court Opinion

ID: 4587816
Source: CourtListenerOpinion
Date Created: 2020-11-19 17:02:10.149101+00
Date Added: 2024-06-11T08:47:57.706604
License: Public Domain

The summaries of the Colorado Court of Appeals published opinions
  constitute no part of the opinion of the division but have been prepared by
  the division for the convenience of the reader. The summaries may not be
    cited or relied upon as they are not the official language of the division.
  Any discrepancy between the language in the summary and in the opinion
           should be resolved in favor of the language in the opinion.

                                                                 SUMMARY
                                                          November 19, 2020

                               2020COA165

No. 19CA1635, Brooktree Village Homeowners Ass’n, Inc. v
Brooktree Village, LLC — Construction Law — Breach of
Implied Warranty; Real Property — Common Interest
Communities — Powers of Unit Owners’ Association —
Litigation or Administrative Proceedings — Standing

     A division of the court of appeals holds that a homeowner’s

association has standing to assert, on behalf of its members,

implied warranty claims arising from construction defects in the

common interest community’s common areas without first

obtaining assignments of claims from the homeowners. In addition,

the division considers for the first time in Colorado whether a

homeowner’s association may assert such implied warranty claims

against a successor developer and builder, even though the

homeowner’s association did not acquire the common areas from

the successor developer, the successor developer and builder never
owned the common areas, and fewer than all of the homeowner’s

association’s members directly purchased their townhomes from

the successor developer. The division concludes that a

homeowner’s association may assert such claims.
COLORADO COURT OF APPEALS                                      2020COA165

Court of Appeals No. 19CA1635
El Paso County District Court No. 17CV31301
Honorable Timothy Schutz, Judge

Brooktree Village Homeowners Association, Inc., a Colorado non-profit
corporation,

Plaintiff-Appellee,

v.

Brooktree Village, LLC, a Colorado limited liability company, and Rivers
Development, Inc., a Colorado corporation,

Defendants-Appellants.

                            JUDGMENT AFFIRMED

                                 Division VII
                         Opinion by JUDGE LIPINSKY
                         Navarro and Tow, JJ., concur

                         Announced November 19, 2020

Kerrane Storz, P.C., Heidi E. Storz, Michael J. Lowder, Rebekah B. Watada,
Broomfield, Colorado, for Plaintiff-Appellee

Lorber, Greenfield & Polito, LLP, Thomas F. Olsen, Louis W. Horowitz, Denver,
Colorado, for Defendants-Appellants
¶1    The Brooktree Village Townhomes (the development) had more

 than its share of troubles. Its original owner, Combest

 Construction, sought protection under the Bankruptcy Code after it

 had completed and sold several townhomes to residential

 purchasers, but before it could complete construction at the

 development. After Combest’s lender took possession of the

 development, the lender conveyed the common areas to Brooktree

 Village Homeowners Association, Inc. (Association), the

 development’s homeowner’s association, which Combest had

 formed.

¶2    A second developer, Brooktree Village, LLC (Developer), later

 acquired the remaining undeveloped portions of the development,

 other than the common areas. A construction company affiliated

 with Developer, Rivers Development, Inc. (Builder), completed

 construction of the development. Developer sold all the newly

 constructed townhomes to individual homeowners.

¶3    After discovering construction defects throughout the

 development, Association sued Developer and Builder, asserting

 that portions of Builder’s construction work were defective.

 Association sought damages for the cost of repairing the

                                   1
 construction defects in the common areas, as well as the cost of

 repairing the damage in one of the townhomes caused by

 construction defects in the common areas.

¶4    Association asserted the claims on behalf of itself and its

 member homeowners, pursuant to section 38-33.3-302(1)(d), C.R.S.

 2020, under theories of breach of implied warranty, negligence, and

 negligence per se.

¶5    At the conclusion of an eight-day trial, a jury found Developer

 and Builder liable for breach of implied warranty and negligence

 and awarded Association $1,850,000 in damages. (The trial court

 combined Association’s negligence and negligence per se claims.)

¶6    The jury also found that Association was responsible for ten

 percent of the damages under a comparative negligence theory. But

 the jury verdict form did not break down Association’s damages

 between its breach of implied warranty and negligence claims. The

 trial court awarded the entire $1,850,000 to Association on the

 breach of implied warranty claim, reasoning that comparative

 negligence does not apply to breach of implied warranty claims.

¶7    On appeal, Developer and Builder argue that the trial court

 erred in entering the judgment against them. Among other

                                   2
 arguments, Developer and Builder raise an issue of first impression

 in Colorado — whether Association had the right to assert implied

 warranty claims against them even though Association had not

 acquired the common areas from Developer, Developer never owned

 the common areas, and a majority of Association’s members had

 not purchased their townhomes from Developer.

¶8    We hold that Association had standing to assert the implied

 warranty claims. Although we also hold that the trial court erred in

 admitting evidence regarding damage in one of the townhomes, we

 conclude that the error was harmless. Therefore, we affirm the

 judgment.

                          I.   Background

¶9    The development is a residential common interest community

 as that term is defined in the Colorado Common Interest Ownership

 Act (CCIOA). See § 38-33.3-103(8), C.R.S. 2020. Combest

 established Association under the CCIOA. The members of

 Association are the owners of the townhomes at the development.

 Association owns and manages the common areas of the

 development for the use and benefit of its members pursuant to the

                                  3
  Declaration of Covenants, Conditions, Restrictions, and Easements

  of Brooktree Village Townhomes (the Declaration).

¶ 10   According to the Declaration, the development was to consist

  of fourteen buildings housing fifty-two townhomes. Before going

  out of business, Combest completed the grading at the development

  site. Combest, however, only constructed two of the buildings,

  consisting of seven townhomes, and approximately half of the

  roadways. Combest sold those seven townhomes to residential

  purchasers in 2007 and 2008.

¶ 11   After Combest filed for bankruptcy protection, Combest’s

  lender took possession of the development and conveyed the

  common areas to Association. The undeveloped areas of the

  development remained untouched until 2012, when Developer

  acquired the entirety of the development other than the common

  areas and the seven townhomes that Combest had built and sold.

¶ 12   Builder resumed construction at the development, following

  Combest’s original construction plans and the scope of the

  development described in the Declaration. Builder formed

  Developer to market and sell the townhomes that Builder built.

  Developer contracted with Builder to construct the remaining twelve

                                   4
  buildings, finish the roadways, and complete the remaining work at

  the common areas of the development. Those twelve buildings

  consisted of forty-five townhomes.

¶ 13   By 2015, Builder completed construction at the development.

  Developer sold the forty-five townhomes to residential purchasers in

  2012 and 2013.

¶ 14   As early as 2012, owners of the newly constructed townhomes

  began reporting construction defects to Builder. Within the

  one-year warranty period specified in their purchase agreements

  with Developer and Builder, several townhome owners presented

  Builder with claims for repairs caused by those construction

  defects.

¶ 15   Association served Developer and Builder with a notice of

  claim pursuant to section 13-20-803.5, C.R.S. 2020, on behalf of its

  members and itself in February 2017. After it was unable to resolve

  its dispute with Developer and Builder regarding the construction

  defects described in the notice of claim, Association filed suit “on

  behalf of itself and on behalf of its members” in May 2017.

¶ 16   The construction defects described in Association’s complaint

  primarily consisted of improper site grading and drainage across

                                     5
  the development, which, according to Association, caused water

  accumulation and intrusion, concrete flatwork settling and

  cracking, and heaving and movement of concrete basement slabs,

  among other problems. Association sought damages in the amount

  of the cost of repairing the construction defects in the common

  areas. In addition, Association sought damages to repair the

  damage to one townhome — that of owner Halley Rumfelt —

  attributable to construction defects in the common areas.

¶ 17   As noted above, at the conclusion of trial, the jury awarded

  $1,850,000 in damages against Developer and Builder on

  Association’s implied warranty and negligence claims.

¶ 18   On appeal, Developer and Builder allege six errors by the trial

  court:

¶ 19   First, allowing Association to pursue claims for breach of

  implied warranty against Developer and Builder and, relatedly,

  providing jury instructions and a verdict form that misstated the

  law of breach of implied warranty and did not allow the jury to

  determine the threshold question of whether Association could

  assert implied warranty claims even though not all of its members

  had implied warranties from Developer and Builder.

                                   6
¶ 20   Second, not reducing the jury’s damage award by the

  percentage of Association’s comparative negligence.

¶ 21   Third, declining to instruct the jury on the statute of repose

  and statute of limitations.

¶ 22   Fourth, declining to allow evidence or jury instructions on

  whether Association could assert claims on behalf of individual

  townhome owners without first obtaining assignments of claims

  from them.

¶ 23   Fifth, allowing Association to introduce “salacious” and

  irrelevant evidence.

¶ 24   Sixth, allowing testimony referring to nonparties.

                                II.   Analysis

                         A.      Implied Warranty

¶ 25   Developer and Builder contend that the trial court erred by

  allowing Association to pursue implied warranty claims against

  them on behalf of the members of Association. Developer and

  Builder relatedly contend that the court erred by giving jury

  instructions and a verdict form that did not correctly state the law

  of implied warranty. We are not persuaded.

                                      7
   1.    Association’s Standing to Assert Implied Warranty Claims on
                            Behalf of Its Members

¶ 26    Developer and Builder assert that the trial court erred by

  allowing Association to pursue implied warranty claims against

  them for construction defects in the common areas because (1)

  Builder did not sell any of the townhomes at the development and

  (2) neither Developer nor Builder ever owned the common areas and

  fewer than half of Association’s members purchased townhomes

  from Developer. Developer and Builder further argue that, at most,

  any damage award to Association must be reduced by multiplying

  the amount of the award by the percentage of townhome owners in

  the development who purchased their townhomes directly from

  Developer (the direct purchasers).

¶ 27    Whether Association may bring implied warranty claims for

  defects in the common areas on behalf of its members is a question

  of law that we review de novo. Klingsheim v. Cordell, 2016 CO 18,

  ¶ 14, 379 P.3d 270, 272; see Forest City Stapleton Inc. v. Rogers,

  2017 CO 17, ¶¶ 6, 15-16, 393 P.3d 487, 492.

¶ 28    Colorado law reads an implied warranty of workmanlike

  construction and fitness for habitability into “agreements between

                                    8
  builder-vendors and purchasers for the sale of newly constructed

  buildings . . . .” Carpenter v. Donohoe, 154 Colo. 78, 83-84, 388
P.2d 399, 402 (1964). The implied warranty “arises from the

  contractual relation” between an entity that constructs and sells a

  newly constructed building and the purchaser. Cosmopolitan

  Homes, Inc. v. Weller, 663 P.2d 1041, 1045 (Colo. 1983). “Proof of a

  defect due to improper construction, design, or preparation is

  sufficient to establish liability in the builder-vendor” under an

  implied warranty theory. Id.

¶ 29   Because only persons in privity of contract with a builder or

  seller have implied warranties, the class of purchasers entitled to

  the protection of an implied warranty is limited to first purchasers.
Id. Subsequent purchasers are not in privity with the builder or

  seller and, for this reason, cannot assert implied warranty claims.

  H.B. Bolas Enters., Inc. v. Zarlengo, 156 Colo. 530, 535, 400 P.2d
447, 450 (1965).

¶ 30   Acting on behalf of its members and itself, Association sued

  Developer, as the vendor that sold townhomes at the development

  starting in 2012, and Builder, as the entity that constructed

  townhomes and common areas at the development during that

                                     9
  time. See Utz v. Moss, 31 Colo. App. 475, 478, 503 P.2d 365, 367

  (1972).

       a.      The Direct Purchasers Received Implied Warranties from
                                      Builder

¶ 31        Developer and Builder contend that Builder cannot be held

  liable for breach of implied warranty, even to the direct purchasers

  whose townhomes Builder constructed, because the direct

  purchasers bought their townhomes from Developer and not from

  Builder. Thus, Developer and Builder argue, there is no contractual

  privity between the direct purchasers and Builder. And, as noted

  above, only persons in privity with a builder or seller can assert

  implied warranty claims against them.

¶ 32        First, we are not persuaded there is no privity between the

  direct purchasers and Builder. Both Developer and Builder signed

  the direct purchasers’ purchase agreements. In those agreements,

  Developer and Builder provided an express warranty and

  “Disclosures and Releases” to the direct purchasers.

¶ 33        Second, even if Builder had not been a party to the direct

  purchasers’ purchase agreements, Builder constructed their

  townhomes. “[T]he absence or presence of privity of contract, in the

                                        10
  technical meaning of that term, is not dispositive of all cases.” Id.

  at 478, 503 P.2d at 367. The purpose of the privity requirement is

  to protect vendors from claims by “buyers who are not within the

  class of those reasonably intended to be protected when the product

  was offered for sale.” Id. Where a builder “knows, or should know,

  that the intended purchaser and first occupant will not be [a] realty

  company, but rather the initial home owner, the implied warranty of

  workmanlike construction extends to that first purchaser.” Id.

¶ 34   Here, Builder knew the townhomes it constructed at the

  development would be sold to individual owners. Builder created

  Developer primarily to market and sell the townhomes that Builder

  constructed at the development.

¶ 35   The relationship between Developer and Builder underscores

  why Builder can be held liable under an implied warranty theory.

  To allow Builder to shirk its responsibilities under implied

  warranties simply because an intermediary (here, an affiliate of

  Builder) conveyed the homes to the direct purchasers would be

  illogical, would be contrary to Utz, and could leave the direct

  purchasers without a remedy against the entity responsible for the

  defective construction.

                                    11
¶ 36   Granted, even if they could not assert implied warranty claims

  against Builder, the direct purchasers could assert negligence

  claims against Builder. But claims for negligent construction are

  more difficult to prove than implied warranty claims. Negligence

  claims “require[] that a builder or contractor be held to a standard

  of reasonable care in the conduct of its duties to the foreseeable

  users of the property.” Cosmopolitan Homes, 663 P.2d at 1045. A

  plaintiff in a negligence case involving construction defects “must

  establish defects in workmanship, supervision, or design as a

  responsibility of the individual defendant. Proof of defect alone is

  not enough to establish the claim. Foreseeability limits the scope of

  the duty, and the passage of time following construction makes

  causation difficult to prove.” Id.

¶ 37   In contrast, the warranty of habitability “has been likened to

  strict liability for construction defects, and proof of a defect due to

  improper construction, design, or preparations is sufficient to

  establish liability in the builder-vendor.” Wall v. Foster Petroleum

  Corp., 791 P.2d 1148, 1150 (Colo. App. 1989).

¶ 38   For these reasons, Builder provided implied warranties to the

  direct purchasers.

                                       12
   b.   Association Has Standing to Pursue Implied Warranty Claims
         for Construction Defects in the Common Areas Even Though
        Neither Developer Nor Builder Ever Owned the Common Areas
          and Not All Members of Association Purchased Townhomes
                               from Developer

¶ 39    The facts in this case are more complex than those in a typical

  construction defects case. In many construction defects cases, the

  developer of the common interest community directly conveyed the

  individual units to the original owners and directly conveyed the

  common areas to the homeowner’s association. See Amy Brimah &

  Suzanne Leff, Common Interest Conundrums 2,

  https://perma.cc/D3DG-EX5Q. In these cases, the developer is in

  privity with the individual purchasers and the homeowner’s

  association. See Heritage Vill. Owners Ass’n, Inc. v. Golden Heritage

  Invs., 89 P.3d 513, 514 (Colo. App. 2004).

¶ 40    Here, the original developer sought bankruptcy protection, its

  lender took possession of the development, and the lender conveyed

  the common areas to Association. Although Builder completed

  construction at the development, neither it nor Developer ever

  owned the common areas. Additionally, at the time of Association’s

  lawsuit, only twenty-three of the fifty-two townhome owners in the

  development were direct purchasers; the remaining twenty-nine

                                   13
  owners acquired their townhomes from Combest or previous

  townhome owners.

¶ 41   We agree with Developer and Builder that they are not in

  privity with Association and, thus, Association did not receive

  implied warranties from them. We also agree with Developer and

  Builder that they are not in privity with the twenty-nine townhome

  owners who were not direct purchasers and who, therefore, did not

  receive implied warranties from them.

¶ 42   But the twenty-three direct purchasers bought their

  townhomes, which Builder constructed, directly from Developer.

  Moreover, both Developer and Builder are parties to the direct

  purchasers’ purchase agreements. The direct purchasers are thus

  in privity with, and obtained implied warranties of workmanship

  and habitability from, Developer and Builder. See Cosmopolitan

  Homes, 663 P.2d at 1045.

¶ 43   In addition, the direct purchasers, like all of Association’s

  members, not only own their individual townhomes, but, as

  documented in their deeds, have easement rights to use the

  common areas. Consequently, a construction defect located

                                    14
  anywhere in the common areas affects the rights of every owner in

  the development, including the direct purchasers.

¶ 44   Under the CCIOA, a homeowner’s association has standing to

  “[i]nstitute, defend, or intervene in litigation or administrative

  proceedings in its own name on behalf of itself or two or more unit

  owners on matters affecting the common interest community.”

  § 38-33.3-302(1)(d). Thus, a homeowner’s association has standing

  to bring breach of implied warranty claims on behalf of itself and its

  members to obtain redress for construction defects in the common

  areas of the community. Heritage Vill., 89 P.3d at 515. (Although

  Heritage Village specifically addressed claims for construction

  defects impacting “windows, decks, and floor slabs” of individual

  units, it also said that the homeowner’s association had standing to

  assert claims for construction defects in the common areas on

  behalf of the homeowners. See id. at 514-15. Even if that language

  is dictum, it is a correct statement of the law and we apply it here.)

¶ 45   In addition, because “[u]nder the CCIOA, individual units are a

  part of the ‘common interest community,’” a homeowner’s

  association may bring a claim for breach of implied warranty to

  redress construction defects in individual units. Yacht Club II

                                     15
  Homeowners Ass’n, Inc. v. A.C. Excavating, 94 P.3d 1177, 1180

  (Colo. App. 2003). This is especially true where, as here, the

  damage in an individual unit is attributable to defectively

  constructed common areas.

¶ 46    For these reasons, the lack of privity between Association and

  Developer and Builder does not bar Association’s implied warranty

  claims. Under section 38-33.3-302(1)(d), Association may assert

  implied warranty claims for construction defects in the common

  areas, regardless of whether the resulting damage appeared in the

  common areas or an individual townhome, based on the direct

  purchasers’ implied warranty rights and rights to use the common

  areas. See Heritage Vill., 89 P.3d at 515.

       c.   Association May Recover Damages for Repair of All the
            Construction Defects in the Common Areas for Which
                   Developer and Builder Are Responsible

¶ 47    Developer and Builder argue that, at most, Association can

  recover damages for repairing that percentage of the defectively

  constructed common areas representing the percentage of total

  townhomes at the development owned by the direct purchasers.

  But it would be unreasonable to discount the damages awardable

  for the construction defects in the common areas by the percentage

                                    16
  of townhomes not owned by direct purchasers. Such an

  apportionment would mean that Association could only recover

  damages for remediation of twenty-three fifty-seconds

  (approximately forty-four percent) of the construction defects in the

  common areas.

¶ 48   Repair of less than half of the construction defects in the

  common areas would not provide the direct purchasers (or the other

  townhome owners for that matter) with a meaningful remedy and

  would allow Developer and Builder to shirk their responsibility for

  remediating all the construction defects in the common areas for

  which they are responsible. For these reasons, a remedy resulting

  in repair of only a fraction of the defects in the common areas would

  be inadequate. But this would be the result if we accepted

  Developer and Builder’s argument that Association cannot assert

  implied warranty claims to recover the cost of remediating all the

  construction defects in the common areas.

¶ 49   Thus, we hold that, under the CCIOA, a homeowner’s

  association may recover from a successor developer or builder the

  entire cost of remediating construction defects in common areas

  where (1) the defects are attributable to the successor developer or

                                   17
  builder; (2) two or more of the association’s members purchased

  their homes directly from the successor developer or builder; and

  (3) those members have rights to use the common areas — even if

  the successor developer or builder never owned the common areas.

                2.   Jury Instructions and Verdict Form

¶ 50   Developer and Builder contend that the trial court’s jury

  instructions and verdict form “skipped over an essential element of

  the cause of action . . . [ — ] whether [an implied] warranty existed

  in the first place.” We are not persuaded.

¶ 51   A trial court has a duty to correctly instruct the jury on

  matters of law. Bedor v. Johnson, 2013 CO 4, ¶ 8, 292 P.3d 924,

  926. “To determine whether the trial court has performed this duty,

  we first review de novo the jury instruction at issue to assess

  whether the instruction correctly states the law.” Id. A court

  commits error by giving an incorrect instruction “unless the error is

  cured by the instructions as a whole.” Waneka v. Clyncke, 134
P.3d 492, 494 (Colo. App. 2005), aff’d, 157 P.3d 1072 (Colo. 2007).

¶ 52   If the instruction is correct, we review the court’s decision to

  give a jury instruction for an abuse of discretion. Bedor, ¶ 8, 292
P.3d at 926. While pattern jury instructions are not law, they do

                                    18
  “carry weight and should be considered by a trial court.” People v.

  Garcia, 2012 COA 79, ¶ 50, 296 P.3d 285, 292. We review a

  preserved objection to an erroneous jury instruction for harmless

  error. Waneka, 134 P.3d at 494.

¶ 53   The trial court modeled its breach of implied warranty jury

  instructions on the pattern jury instructions. The breach of implied

  warranty jury instructions in this case specifically stated that, to

  find Developer or Builder liable for breach of implied warranty, the

  jury must find that (1) they “entered into a contract with

  [Association’s] members to construct a residence and related

  common area improvements which it sold to [Association’s]

  members”; (2) Developer or Builder “gave possession of the

  residence and related common areas to [Association’s] members”;

  and (3) the residence or common areas did not comply with the

  warranties implied by law.

¶ 54   Developer and Builder are correct that the questions on the

  verdict form regarding their liability on Association’s implied

  warranty claim asked whether they “breached any of the implied

  warranties,” but did not first ask whether such an implied warranty

  existed. However, in the absence of evidence of jury bias, we may

                                    19
  presume that the jury understood and heeded the trial court’s

  instructions. Vaccaro v. Am. Fam. Ins. Grp., 2012 COA 9M, ¶ 29,

  275 P.3d 750, 758 (citing People v. Ibarra, 849 P.2d 33, 39 (Colo.

  1993)). Logically, the jury could not have answered “yes” to the

  questions unless it also found that Developer or Builder owed

  duties under implied warranties. For this reason, we must assume

  that, in answering “yes” to these questions, the jury first found the

  existence of a contract and, thus, implied warranties.

  B.    The Trial Court Did Not Err by Entering Judgment for the Full
                      Amount of Association’s Damages

¶ 55   Developer and Builder contend that the trial court erred by not

  reducing the jury’s damage award by ten percent to reflect

  Association’s comparative negligence. We disagree.

¶ 56   “The amount of damages to which a plaintiff is entitled is a

  matter within the sole province of the jury.” Nichols v. Burlington N.

  & Santa Fe Ry. Co., 148 P.3d 212, 217 (Colo. App. 2006). Thus,

  “[w]hen possible, trial courts must give effect to a jury’s verdict.” Id.

  While, pursuant to section 13-21-111(1), C.R.S. 2020, damages

  awarded for negligence “shall be diminished in proportion to the

  amount of negligence attributable to the person” who recovers, such

                                     20
  a diminution does not apply to claims for breach of implied

  warranty.

¶ 57   As noted above in Part I.A.1.a, implied warranty claims are

  “likened to strict liability for construction defects . . . .” Wall, 791
P.2d at 1150. That is, “proof of a defect due to improper

  construction, design, or preparations is sufficient to establish

  liability” on the part of a builder-vendor and, for this reason, the

  concept of comparative fault is foreign to claims for implied

  warranty. Hildebrand v. New Vista Homes II, LLC, 252 P.3d 1159,

  1169 (Colo. App. 2010) (quoting Wall, 791 P.2d at 1150); cf.

  Guardian Title Co. v. Mitchell, 2002 UT 63, ¶ 2, 54 P.3d 130, 131

  (“[T]he tort principle[] of comparative negligence . . . do[es] not apply

  to contract actions.”).

¶ 58   In entering judgment for Association, the trial court stated

  that “the judgment on the negligence claim will be reduced by ten

  percent, the percentage of negligence attributable to the plaintiffs.”

  But, on the breach of warranty claim, “the amount of judgment will

  be for the full amount of the damage award . . . .” Because

  Association was entitled to “the full amount of the damage award”

  on the breach of implied warranty claim, the court entered

                                      21
  judgment in favor of Association in the amount of $1,850,000, with

  no reduction for comparative negligence.

¶ 59    We discern no error in the amount of the judgment. If

  Association had prevailed only on its negligence claim, but not on

  its implied warranty claim, the judgment would have needed to

  reflect the ten percent reduction for Association’s comparative

  negligence. However, because the jury also found that Association

  prevailed on its breach of implied warranty claim — to which

  comparative fault does not apply — Association is entitled to a

  judgment in the full amount the jury awarded.

   C.    The Trial Court Did Not Err by Refusing to Instruct the Jury
            on the Statute of Repose or the Statute of Limitations

¶ 60    Developer and Builder contend that the trial court erred by

  refusing to instruct the jury on the statute of repose, which, they

  argue, barred Association’s claims for construction defects in the

  roadways that Combest built. In addition, Developer and Builder

  contend that the court should have given the jury a similar

  instruction on the statute of limitations for Association’s claim for

  damage to those roadways allegedly caused when Builder drove

  construction equipment over them. We disagree with Developer and

                                    22
  Builder’s contention that the trial court should have provided jury

  instructions on the statute of repose and the statute of limitations.

¶ 61   A trial court has a duty to correctly instruct the jury on the

  law. Schuessler v. Wolter, 2012 COA 86, ¶ 9, 310 P.3d 151, 158.

  We review “for abuse of discretion a trial court’s decision not to give

  a particular jury instruction. A trial court necessarily abuses its

  discretion if it bases its ruling on an erroneous view of the law or a

  clearly erroneous assessment of the evidence.” Id. at ¶ 10, 310 P.3d

  at 158. “[A] judgment will not be reversed for refusal to give

  requested instructions where there was not resulting substantial,

  prejudicial error.” Id. at ¶ 11, 310 P.3d at 158.

       1.   Association Conceded that Its Original Claims Did Not
            Encompass the Roadways that Combest Constructed

¶ 62   Although Developer and Builder tendered jury instructions on

  the statute of repose and the statute of limitations, those

  instructions addressed a nonissue. At that time, Association had

  not pleaded any claim relating to the roadways that Combest

  constructed.

¶ 63   As discussed above in Part I, Combest constructed

  approximately half of the roadways in the development between

                                    23
  2007 and 2008. Builder, under the direction of Developer,

  constructed the remaining roadways beginning in 2012.

¶ 64   In its complaint, Association asserted claims for negligence

  and breach of implied warranty regarding Builder’s construction of

  the development, including the roadways within the development.

  The complaint did not distinguish between the roadways that

  Combest constructed and those that Builder constructed.

¶ 65   But, at trial, Association conceded that any claim for defective

  construction of a pre-2009 roadway was “barred by the statute of

  repose.” (A statute of repose “limits the right to bring a claim to a

  specific time period that begins to run not when the claim accrues,

  but when the defendant’s last culpable act or omission takes place.”

  Lewis v. Taylor, 2016 CO 48, ¶ 22, 375 P.3d 1205, 1209.)

  Following that concession, Association advised the trial court that,

  after the close of evidence, it planned to move “to amend the

  Complaint to conform to the evidence based on the testimony we

  received here about the construction traffic damaging [the roadways

  that Combest constructed].” Thus, at that point of the trial, the

  parties and the court knew that none of the claims in the case

  involved a roadway that Combest constructed.

                                    24
¶ 66   For reasons we cannot determine from the record, however,

  Association never followed up on its representation that, later in the

  trial, it would move for leave to assert claims for damage to the

  roadways that Combest constructed. No party has pointed to, and

  we cannot find, any evidence in the record indicating that

  Association ever filed such a motion, much less that the trial court

  granted one. Thus, Association’s claims, as modified by its

  concession, did not encompass damage to the roadways that

  Combest constructed.

¶ 67   Moreover, on the seventh day of trial, Association informed the

  trial court that it was no longer alleging that any of the roadways

  were “defectively installed.” Instead, Association announced that its

  claims concerning the roadways were limited to allegations that

  Builder damaged the roadways by driving “construction traffic” over

  them. Association did not specify whether its generic reference to

  “roadways” included roadways that Combest constructed, however.

¶ 68   But we find no indication in the record that Association’s

  claims were ever amended to include a claim for damage caused

  when Builder drove construction vehicles over roadways that

  Combest built. (Although, in its supplemental trial brief,

                                    25
  Association sought to assert a new theory of liability, based on

  Developer’s and Builder’s status as special declarants with

  maintenance responsibilities, the brief does not mention damage to

  any roadways that Combest constructed.)

¶ 69   In light of these facts, when Developer and Builder tendered

  their proposed jury instructions on the statute of repose and the

  statute of limitations, the case did not include any claim concerning

  roadways that Combest constructed. Because Developer and

  Builder’s statute of repose and statute of limitations instructions

  related at most to claims that were hypothetical at the time

  Developer and Builder tendered them, the court did not abuse its

  discretion by declining to provide the instructions.

¶ 70   But the statute of limitations analysis does not end here

  because Developer and Builder appear to argue that, regardless of

  the claims properly in the case, the trial court erred by allowing

  Association to present evidence that Builder’s construction vehicles

  damaged roadways at the development. We turn to this issue next.

                                    26
       2.      Developer and Builder Did Not Preserve Their Arguments
              Regarding Association’s Evidence or Argument Concerning
                   Construction Vehicle Damage to the Roadways

¶ 71        Although the “construction traffic” claim was never properly in

  the case, Developer and Builder contend that the trial court erred

  by allowing Association to introduce evidence that Builder’s

  construction vehicles damaged roadways at the development and to

  refer to such damage in closing argument. Even though the trial

  court admitted evidence concerning roadway damage, Developer

  and Builder failed to contemporaneously object to the admission of

  such evidence and to the references to such road damage in the

  closing argument of Association’s counsel. Thus, this issue was not

  preserved for appeal and we do not consider it. See Antolovich v.

  Brown Grp. Retail, Inc., 183 P.3d 582, 600 (Colo. App. 2007) (“If a

  party makes no contemporaneous objection to the introduction of

  evidence, we will not review the alleged error on appeal.”).

   D.        Because an Assignment of Claims Is Not Required Under the
               CCIOA, the Trial Court Did Not Err by Refusing to Allow
                Testimony, Argument, or Jury Instructions Regarding
                                   Assignments

¶ 72        Developer and Builder assert that the trial court erred by

  allowing Association to assert claims for construction defects

                                        27
  affecting individual townhomes in the absence of assignments of

  such claims from the owners of those townhomes. (Recall that, as

  noted above in Part I, Association sought damages on behalf of itself

  and its members for construction defects that manifested in the

  common areas and in Ms. Rumfelt’s townhome.) We disagree.

¶ 73   Association owns and is responsible for maintaining the

  common areas of the development. In contrast, each townhome

  owner owns, and is responsible for maintaining, his or her

  townhome. Because Association owns the common areas, but not

  the townhomes, Developer and Builder argued at trial that, while

  the owners would have standing to pursue construction defect

  claims for damage in their own townhomes, it is unclear under

  Yacht Club II whether Association has standing to bring such claims

  on behalf of the owners without having obtained assignments of

  claims from the owners.

¶ 74   The trial court rejected this argument. The court first noted

  that Association was not claiming damage in individual townhomes

  unrelated to construction defects in the common areas. Rather,

  Association alleged that the damage in the Rumfelt townhome was a

  “manifestation” of grading and drainage defects in the common

                                   28
  areas. Second, the court said that, in Yacht Club II, the division

  acknowledged that the purpose of section 38-33.3-302(1)(d) was to

  “enabl[e] Association to represent more effectively its owners in

  such matters as construction defects, avoiding the necessity of

  assignment of claims . . . .” Finding no language in

  section 38-33.3-302(1)(d) requiring an assignment of such claims as

  a condition precedent for Association’s assertion of its implied

  warranty claims, the court concluded that it “should not graft such

  a requirement into the statutory language.”

¶ 75   We agree with the trial court’s reasoning. To the extent

  Association presented evidence of damage impacting individual

  townhomes, Yacht Club II is clear: “[S]ection 38-33.3-302(1)(d)

  confers standing upon associations to pursue damage claims on

  behalf of two or more unit owners with respect to matters affecting

  their individual units.” Yacht Club II, 94 P.3d at 1180. The only

  limitation on such an action is that “the matter be one ‘affecting the

  common interest community.’” Id. And, “[u]nder the CCIOA,

  individual units are a part of the ‘common interest community.’”

  Id.; see also Heritage Vill., 89 P.3d at 515 (holding that the CCIOA

  and Yacht Club II “make clear that the Association has standing to

                                    29
  assert claims of individual unit owners”). But even if individual

  units were not considered part of the “common interest community”

  under the CCIOA, here, the damage in the Rumfelt townhome arose

  from construction defects in the common areas.

¶ 76   Although the division in Yacht Club II did not consider whether

  a homeowner’s association has standing to assert a claim on behalf

  of its members for damages resulting from construction defects in

  common areas, the reasoning of Yacht Club II applies to cases

  involving such damages. If a homeowner’s association may recover

  damages to repair construction defects in individual units, because

  those units are part of the “common interest community,” then the

  association has an even stronger argument for recovery of damages

  for repair of construction defects in the common areas within the

  common interest community that its members have the right to

  enjoy. See Heritage Vill., 89 P.3d at 514-15 (holding that a

  homeowner’s association has standing to assert claims on behalf of

  its members for construction defects involving windows, decks, and

  floor slabs at individual units because they are part of the “common

  interest community”).

                                   30
¶ 77   Moreover, Developer and Builder do not provide any authority

  holding that a homeowner’s association lacks standing to assert, on

  behalf of its members, claims relating to construction defects in the

  common areas absent assignments of claims from its members.

¶ 78   The trial court’s reasoning finds additional support in

  decisions from other states. See Lakeview Reserve Homeowners v.

  Maronda Homes, Inc., 48 So. 3d 902 (Fla. Dist. Ct. App. 2010), aff’d,

  127 So. 3d 1258 (Fla. 2013); Briarcliffe W. Townhouse Owners Ass’n

  v. Wiseman Constr. Co., 454 N.E.2d 363 (Ill. App. Ct. 1983).

¶ 79   As here, the homeowners in Briarcliffe were members of a

  homeowner’s association and parties to the development’s

  declaration. 454 N.E.2d at 365. The declaration stated, among

  other terms, that the association would manage the common areas

  for the benefit of the homeowners, who had an easement to use the

  common areas within the common interest community. Id. at

  364-65.

¶ 80   In analyzing the right of the association to sue the developer

  for construction defects in the common areas on behalf of its

  members, the Illinois court noted

                                   31
            We perceive no real distinction between the
            buildings and the common land in the
            application of the public policy protecting a
            purchaser of a new or reasonably new home
            from latent defects in the building or the
            required amenities since the purchaser in a
            substantial degree must rely in either case on
            the expertise of the building-vendor creating
            the defect.
Id. at 365. The court explained that the “entire scheme of

  marketing the townhouses” included the assurance that the

  common areas would be deeded to the association so that the

  owners could enjoy “the common areas in connection with their

  homes.” Id. at 366.

¶ 81   In light of this analysis, the court rejected the developer’s

  argument that the association lacked standing because it was

  “neither a vendee nor subsequent vendee” and, thus, could not

  assert claims for breach of the implied warranty of habitability as to

  the common areas. Id. As the court reasoned, the developer’s

  attempt to distinguish ownership of residential buildings and

  ownership of common areas would undercut the public policy of

  protecting “purchasers of new houses upon discovery of latent

  defects, by requiring that such defects be cured by the builder or

  developer who had created them.” Id.

                                    32
¶ 82   Thus, the Illinois court concluded that the association had

  “stated under general common law principles representational

  standing to assert the rights of its individual members since it has

  alleged an immediate, direct and substantial injury to any one of

  them.” Id. at 367. Significantly, Briarcliffe makes no mention of the

  need for assignments before a homeowner’s association can file suit

  on behalf of its members for construction defects in common areas.

¶ 83   The Florida District Court of Appeals also ruled in favor of the

  homeowner’s association under similar facts. In Lakeview Reserve,

  the court held that a homeowner’s association had standing to

  assert a claim for breach of the implied warranties of fitness and

  merchantability against a builder/developer for defects in

  “roadways, drainage systems, retention ponds and underground

  pipes” in the subdivision. Lakeview Reserve, 48 So. 3d at 903-04.

  The court rejected the developer’s argument that the implied

  warranties did not apply to those common areas because they did

  not “immediately support the residences.” Id.

¶ 84   The court reasoned that services that make a home habitable,

  such as roads, drainage systems, retention ponds, and

  underground pipes, are the types of improvements for which a

                                   33
  developer provides an implied warranty of fitness for a particular

  purpose because they “immediately support the residence in the

  form of essential services.” Id. at 908-09. Like Briarcliffe, the

  Lakeview Reserve decision made no mention of an assignment

  requirement.

¶ 85   Developer and Builder contend that allowing Association to

  assert implied warranty claims without assignments from the

  townhome owners places them “in the precarious position of having

  two parties who allegedly have standing to pursue them” for the

  same defects. But simply because two parties have standing to

  bring the same claim does not mean those parties may recover the

  same damages in successive litigation.

¶ 86   The doctrine of claim preclusion “preclude[s] the relitigation of

  matters that have already been decided as well as matters that

  could have been raised in a prior proceeding but were not.” Argus

  Real Estate, Inc. v. E-470 Pub. Highway Auth., 109 P.3d 604, 608-09

  (Colo. 2005). “For a claim in a second judicial proceeding to be

  precluded by a previous judgment, there must exist: (1) finality of

  the first judgment, (2) identity of subject matter, (3) identity of

  claims for relief, and (4) identity or privity between parties to the

                                     34
  actions.” Id. For purposes of claim preclusion, “‘[p]rivity’ means

  that a nonparty is related to a case in such a way that he or she

  should be regarded as a party.” Strekal v. Espe, 114 P.3d 67, 69

  (Colo. App. 2004). Under these principles, if Association, acting on

  behalf of the townhome owners, pursued a claim for damages

  arising from construction defects, the townhome owners would be

  precluded from later bringing a claim to recover the same damages.

¶ 87    For the above reasons, Association was not required to obtain

  assignments of claims from its members before it could assert

  claims for construction defects in the common areas. See Heritage

  Vill., 89 P.3d at 515.

   E.   The Trial Court Did Not Reversibly Err by Admitting Evidence
           Regarding Damage in Townhomes at the Development

¶ 88    Developer and Builder assert that the trial court erred by

  admitting evidence that Association had not properly disclosed

  before the trial, testimony by witnesses whom Association had not

  properly designated, and Association’s evidence supporting an

  allegedly new theory of liability. We agree that the trial court erred

  by allowing testimony regarding damage in a townhome that was

  not part of the damages that Association sought to recover, hold

                                    35
  that such error was harmless, and disagree with Developer and

  Builder’s remaining contentions regarding the challenged evidence.

¶ 89   The evidence at trial included testimony from townhome

  owners about interior damage in their townhomes, including

  damage that was not reflected in Association’s damage calculations.

  Developer and Builder contend that such evidence and the related

  argument by Association’s counsel in closing argument were

  “salacious” and irrelevant and caused unfair prejudice to Developer

  and Builder.

¶ 90   “Trial courts have considerable discretion to decide evidentiary

  issues, so we review such decisions for an abuse of discretion.”

  Murray v. Just In Case Business Lighthouse, LLC, 2016 CO 47M,

  ¶ 16, 374 P.3d 443, 450. We review erroneous evidentiary rulings

  in civil cases for harmless error. C.R.C.P. 61; Bernache v. Brown,

  2020 COA 106, ¶ 26, 471 P.3d 1234, 1240.

                   1.   Evidence Not Timely Disclosed

¶ 91   C.R.C.P. 16(f)(2)(B) states that parties must identify and

  exchange their lists of trial exhibits at least forty-two days before

  trial. C.R.C.P. 16(f)(2)(B). “Where a party fails to make pretrial

  disclosures, a trial court may impose appropriate sanctions,”

                                     36
  including the preclusion of evidence. Mullins v. Med. Lien Mgmt.,

  Inc., 2013 COA 134, ¶ 37, 411 P.3d 798, 805.

¶ 92   “[T]he sanction of evidence or witness preclusion is

  inappropriate if the lateness of the disclosure is harmless to the

  other party.” Todd v. Bear Valley Vill. Apartments, 980 P.2d 973,

  979 (Colo. 1999). In determining whether a late disclosure is

  harmless, “the question is whether the failure to disclose the

  evidence in a timely fashion will prejudice the opposing party by

  denying that party an adequate opportunity to defend against the

  evidence.” Id.

¶ 93   Developer and Builder first point to Association’s late

  disclosure of photographs of the interior of three townhomes, one

  owned by Ms. Rumfelt and two others with different owners. The

  trial court admitted the interior photos of Ms. Rumfelt’s townhome,

  but not the photographs of the other townhomes. As noted above in

  Part I, Association argued that the damage in the Rumfelt

  townhome resulted from Builder’s defective construction of the

  common areas and included the cost of repairing such damage in

  its overall damage calculations. Association’s expert’s report on the

  cost of repairing the construction defects for which Association

                                    37
  sought damages included the cost of repairing damage in Ms.

  Rumfelt’s townhome.

¶ 94   The late disclosure of the photographs of the interior of Ms.

  Rumfelt’s townhome did not deprive Developer and Builder of the

  opportunity to defend against claims involving that townhome.

  Association timely disclosed its intention to seek damages for

  construction defects in the Rumfelt townhome. Developer and

  Builder do not explain how the untimely disclosure of the

  photographs of Ms. Rumfelt’s townhome prejudiced them, given

  Association’s timely disclosure that it was seeking to recover the

  cost of repairs to that townhome. And because the trial court did

  not admit the photographs of townhomes other than that of Ms.

  Rumfelt, we need not consider Developer and Builder’s arguments

  regarding photographs of those townhomes.

               2.    Witness Testimony Not Properly Disclosed

          a.        Testimony Regarding Townhomes Not at Issue

¶ 95   Developer and Builder assert that the trial court erred by

  allowing the jury to hear the testimony of townhome owners besides

  Ms. Rumfelt, even though Association did not seek to recover the

  cost of repairing the damage in those individuals’ townhomes. We

                                     38
  agree regarding the testimony of townhome owner Judith Copeland

  but hold that the admission of her testimony was harmless.

¶ 96   When reviewing the trial court’s determinations of relevance,

  admissibility, probative value, and prejudicial effect of evidence, “we

  afford the evidence its maximum probative weight and its minimum

  prejudice” and review only for an abuse of discretion. Settle v.

  Basinger, 2013 COA 18, ¶ 64, 411 P.3d 717, 728.

¶ 97   As noted above, Association sought damages for alleged

  construction defects in only one townhome — that owned by Ms.

  Rumfelt. But, before trial, Association announced its intention to

  call as witnesses the owners of other townhomes, including Alice

  Ulam, Debra Drew, and Ms. Copeland (collectively the other owners)

  — to describe damage in their respective townhomes. In its initial

  disclosures, Association generically identified “all current or former

  owners” as persons with information about construction defects in

  the development and attached a list of all the then-owners of

  townhomes. Association did not identify the other owners it

  intended to call to the witness stand until the day before trial,

  although it had identified Ms. Copeland’s husband as a possible

  witness two weeks earlier.

                                    39
¶ 98   Because the trial court did not allow Ms. Drew to testify due to

  Association’s failure to disclose her in a timely manner, we need not

  address Developer and Builder’s arguments regarding Ms. Drew. In

  addition, although Association disclosed Ms. Ulam as a witness the

  day before trial, Developer and Builder did not contemporaneously

  object to her testimony and, thus, Developer and Builder did not

  preserve their objection to that testimony. See Antolovich, 183 P.3d

  at 600.

¶ 99   Thus, we focus on Ms. Copeland’s testimony. The trial court

  allowed Ms. Copeland to testify based on Association’s assertion

  that she would address damage in her townhome that was a

  “manifestation[]” of the defects affecting the entire community. The

  court held that testimony about damage in individual townhomes

  resulting from construction defects in the common areas was

  relevant “in determining whether or not there is damage and what

  those damages are . . . .” The court conceded that this testimony

  “is perhaps more direct and a bit more personal” than the expert

  testimony, “but it is certainly not calculated to inflame the jury . . .

  [it] is testimony that puts a human element to the injuries that the

  plaintiff is claiming.”

                                     40
¶ 100   The court took steps to ensure that the jury understood that

  the testimony about damage in individual townhomes did not

  expand the scope of the damages that Association indicated it was

  seeking to recover. For example, when Association sought to

  introduce evidence of damage in a townhome other than that of Ms.

  Rumfelt, the court explained to the jury that the damage in that

  townhome “won’t be part of any damage award” and that any award

  to Association “will be limited . . . to what’s listed in the cost of

  repairs.” As noted above, the cost of repairs did not include the

  cost of repairing damage in any individual townhome other than

  Ms. Rumfelt’s townhome.

¶ 101   We agree with Developer and Builder that Ms. Copeland’s

  testimony was irrelevant because the damage she described was not

  part of the damages Association sought to recover. The evidence of

  the damage in the Copeland townhome did not make Association’s

  calculation of the cost of repairing the defects in the common areas

  and Ms. Rumfelt’s townhome more or less accurate. See CRE 401;

  Radcliff Props. Ltd. P’ship, L.L.L.P. v. City of Sheridan, 2012 COA 82,

  ¶¶ 36-37, 296 P.3d 310, 317 (holding that trial court did not err in

                                      41
  declining to admit photographs that did not go to a disputed issue

  at trial).

¶ 102   We conclude, however, that the admission of Ms. Copeland’s

  testimony about the damage in her townhome was harmless

  because it did not affect the substantial rights of Developer and

  Builder. See Bernache, ¶ 26, 471 P.3d at 1240. The trial court

  instructed the jury that its award of damages must be based on and

  limited to the damages that Association sought from Developer and

  Builder. On appeal, “[w]e must presume the jury understood and

  followed these instructions.” Harris Grp., Inc. v. Robinson, 209 P.3d
1188, 1202 (Colo. App. 2009). Because Developer and Builder do

  not point us to evidence that the jury awarded damages for the cost

  of repairing Ms. Copeland’s townhome, we presume that the jury

  followed the trial court’s instruction.

¶ 103   Developer and Builder contend that the trial court further

  erred by allowing Association, the day before trial, to substitute Ms.

  Copeland for her husband, whose name appeared on Association’s

  initial witness list. Two weeks after it disclosed Mr. Copeland as a

  witness, Association informed Developer and Builder that Ms.

  Copeland would be providing the same testimony for which

                                     42
  Association had designated her husband — testimony about

  damage in their jointly owned townhome.

¶ 104   Developer and Builder do not explain how the substitution of

  Ms. Copeland for Mr. Copeland prejudiced them. They do not argue

  that they would have cross-examined Mr. Copeland any differently

  from their actual cross-examination of Ms. Copeland, or that they

  deposed Mr. Copeland and were prejudiced by allowing Ms.

  Copeland — whom they had not deposed — to testify in his place.

¶ 105   For these reasons, we agree with the trial court that Developer

  and Builder were not prejudiced through the substitution of Ms.

  Copeland for her husband. Thus, the trial court did not abuse its

  discretion by allowing the substitution of Ms. Copeland for her

  husband.

         b.   The References to Owners of Other Townhomes in
                      Association’s Opening Statement

¶ 106   Developer and Builder contend that Association’s counsel’s

  references in his opening statement to the anticipated testimony of

  Ms. Copeland and Ms. Drew prejudiced them because Association

  did not timely disclose the alleged damage in their townhomes or

  the cost of repairing such damage.

                                    43
¶ 107   The purpose of opening statements is “to inform the fact finder

  of the evidence which may be offered to support the claims of the

  parties.” Melton ex rel. Melton v. Larrabee, 832 P.2d 1069, 1071

  (Colo. 1992). They are usually an “outline[] of anticipated proof,”

  but are not a recitation of the facts themselves. Id. In considering

  whether remarks in an opening statement are prejudicial, the trial

  judge “is in a pre-eminent position to determine the potential effects

  of the allegedly prejudicial statements on the jurors and thus his

  judgment will only be overturned upon an abuse of discretion.”

  People v. Jacobs, 179 Colo. 182, 187, 499 P.2d 615, 618 (1972).

¶ 108   Here, the trial court instructed the jury, at the outset of trial

  and before its deliberations, that opening statements are not

  evidence and that it could only consider the evidence presented at

  trial. If the court gives an instruction regarding an opening

  statement, “[a]bsent a contrary showing, it is presumed that the

  jury understood the instruction[] and heeded [it].” Id.

¶ 109   Further, although Association’s counsel referenced Ms.

  Copeland’s and Ms. Drew’s testimony in its opening statement, the

  trial court allowed Ms. Copeland, but not Ms. Drew, to testify at

  trial. As discussed above in Part II.E.2.a, we hold that the court did

                                     44
  not reversibly err in admitting Ms. Copeland’s testimony because

  the admission of her testimony was harmless. And because the

  court did not allow Association to call Ms. Drew to the witness

  stand, we assume that the jury understood and followed the trial

  court’s instruction that it could not consider as evidence the

  reference to Ms. Drew in Association’s opening statement. For

  these reasons, the trial court did not abuse its discretion by not

  striking Association’s counsel’s references to Ms. Copeland’s and

  Ms. Drew’s testimony in Association’s opening statement.

                 3.   The Alleged New Theory of Liability

¶ 110   Finally, Developer and Builder allege that the trial court erred

  by allowing Association to “pivot to a new undisclosed theory of

  liability” during trial. We disagree.

¶ 111   As discussed above in Part II.C.1, counsel for Association

  informed the court during the trial, outside the presence of the jury,

  that it intended to move to amend its complaint to add a claim

  regarding the alleged damage that Builder caused to the roadways

  that Combest constructed by driving construction vehicles over

  them. While Developer and Builder are correct that Association did

  not plead this theory in its complaint, there is no indication in the

                                     45
  record that Association ever moved to add a claim regarding

  damage to the roadways that Combest constructed, much less that

  the trial court granted Association leave to plead such a claim.

  More significantly, as discussed above in Part II.C.2, Association did

  not present any evidence of damage to those specific roadways. The

  jury never heard evidence that Builder damaged a roadway that

  Combest had constructed, only that use of heavy equipment can

  damage roadways generally.

¶ 112   Further, Developer and Builder did not contemporaneously

  object to the testimony of Association’s witnesses concerning

  roadway damage or the comments about roadway damage in the

  closing argument of Association’s counsel. Thus, even if

  Association presented evidence that Builder had specifically

  damaged a roadway that Combest had constructed, Developer and

  Builder did not preserve the argument for appeal.

  F.    The Trial Court Did Not Err by Allowing Testimony Referencing
                                 Nonparties

¶ 113   Developer and Builder contend that the trial court erred by

  allowing evidence and argument referencing two nonparties —

  Challenger Homes and Brian Bahr — and that such evidence and

                                   46
  argument suggested that Developer and Builder had greater

  financial resources than they actually possessed. Developer and

  Builder seem to say that Association subtly provided the jurors with

  the message that Challenger and Bahr had “deep pockets,” were

  linked to Developer and Builder, and could easily pay a substantial

  damage award. Because we cannot find any reference to

  Challenger’s and Bahr’s financial status in the record, we are not

  persuaded.

¶ 114   While Developer and Builder are correct that statements

  “go[ing] outside of the record to appeal to passion and prejudice . . .

  regarding a defendant’s ability to pay can be sufficient to warrant

  granting a new trial,” we agree with the trial court that Association

  made no such statements here. See Salazar v. Am. Sterilizer Co., 5
P.3d 357, 369 (Colo. App. 2000).

¶ 115   The references to Challenger and Bahr at trial included the

  following:

              Ms. Copeland’s statement that Challenger was the entity

               to which she made warranty claims and that made

               repairs at the development after Builder went out of

               business;

                                     47
   Ms. Ulam’s testimony that Developer initially identified

    itself to her as “an offshoot” of Challenger;

   testimony from Rich Vorwaller, a former employee of

    Developer and a witness for Association, who said that he

    worked for Challenger, he had reported to Bahr when he

    worked for Developer, and Bahr was president of Builder

    and an owner of Challenger and Developer;

   Ms. Rumfelt’s testimony that, upon purchasing her

    townhome, she understood that Challenger was the

    builder, she communicated with Challenger during the

    construction of her townhome, and Challenger performed

    warranty repairs at her townhome;

   testimony from Tom Streelman, a townhome owner, who

    said that Challenger’s name appeared on an exhibit he

    was reviewing, but that someone had crossed out the

    name;

   statements by Association’s counsel in closing argument

    that reminded the jury of the testimony of townhome

    owners regarding the entity to which they had made

    warranty claims and that the jury should not speculate

                            48
             about what “Rivers and Brooktree and Challenger or

             whoever else, were doing with that land”;

            testimony of Association’s expert witness Edward

             Fronapfel that an exhibit contained the signature of Bahr

             in his capacity as president of Builder; and

            testimony of Steven Vasas, a former employee of Builder

             and a witness for Association, that an exhibit identified

             Bahr as president of Builder.

¶ 116   Notably, Association did not introduce any evidence regarding

  Challenger’s or Bahr’s finances, financial status, or ability to pay a

  judgment. And none of the references noted above “go[es] outside of

  the record” or appeals to passion or prejudice. See Salazar, 5 P.3d

  at 369. These statements do not suggest that the jury should base

  its verdict on Developer’s or Builder’s relationship to Challenger or

  to Bahr. Thus, the trial court did not abuse its discretion in

  admitting the evidence and allowing the arguments regarding

  Challenger and Bahr.

                             III.   Conclusion

¶ 117   The judgment is affirmed.

        JUDGE NAVARRO and JUDGE TOW concur.

                                     49