COLORADO COURT OF APPEALS 2017COA31
Court of Appeals No. 16CA0101 City and County of Broomfield District Court No. 14CV30139 Honorable C. Scott Crabtree, Judge
Broomfield Senior Living Owner, LLC, a Delaware limited liability company; and Sunrise Development, Inc., LLC, a Virginia corporation,
Plaintiffs-Appellants,
v.
R.G. Brinkmann Company, d/b/a Brinkmann Constructors, a Missouri corporation,
Defendant-Appellee.
JUDGMENT REVERSED AND CASE REMANDED WITH DIRECTIONS
Division V Opinion by JUDGE FREYRE Ashby, J., concurs Davidson*, J., specially concurs
Announced March 9, 2017
Fox Rothschild LLP, Patrick J. Casey, Spencer L. Sears, Risa B. Brown, Denver, Colorado, for Plaintiffs-Appellants
Markusson, Green, and Jarvis, Gregg S. Rich, Daniel R. Coombe, Wyatt M. Cox, Denver, Colorado, for Defendant-Appellee
*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.S. 2016. ¶1 In this construction defect case involving a senior assisted and
independent living facility (senior facility), we must decide whether
the parties’ contract or relevant Colorado statutes govern the
accrual of defect claims. To do so, we must decide a matter of first
impression — whether a senior facility constitutes “residential
property” that is protected by a provision of the Construction Defect
Action Reform Act (CDARA) entitled the “Homeowner Protection Act
of 2007” (HPA).1 The HPA renders a contract’s limitation or waiver
of CDARA’s rights and remedies void as against public policy in
cases involving claims arising from residential property.
¶2 Plaintiffs, Broomfield Senior Living Owner, LLC and Sunrise
Development, Inc., LLC (collectively Broomfield), appeal the trial
court’s order granting summary judgment for defendant, R.G.
Brinkmann Company d/b/a Brinkmann Constructors (Brinkmann).
Broomfield brought claims against Brinkmann for breach of
contract, negligence, negligence per se, negligent
1 The title “Homeowner Protection Act of 2007” does not appear anywhere in the current statutes; however, the text of the session law enacting the HPA included a short title that indicated “[t]his act shall be known and may be cited as the ‘Homeowner Protection Act of 2007.’” Ch. 164, sec. 1, 2007 Colo. Sess. Laws 610.
1 misrepresentation,2 and breach of express warranties. Brinkmann
raised both contractual limitations and statutory limitations
defenses to all of Broomfield’s claims. Because we conclude that
the term “residential property” in the HPA unambiguously includes
senior facilities, we find the contract’s accrual provisions void as
against public policy. Therefore, the relevant statutory accrual
provisions apply here. We further conclude that genuine issues of
material fact remain regarding (1) when the defects were discovered
and any claims accrued; (2) whether Brinkmann engaged in
impermissible design services outside of the contract; (3) whether
Brinkmann was given an adequate opportunity to correct the
defects; and (4) whether the defects alleged are latent or patent.
Accordingly, we reverse and remand for further proceedings.
I. Background
¶3 In 2007, Sunrise Development and a former owner entered
into an American Institute of Architects Standard Form of
Agreement contract (the contract) for the construction of a senior
2The trial court did not address this claim and neither did the parties in their briefs. Therefore, we do not consider it.
2 living community (the building) in Broomfield, Colorado.3 The
contract contains a general warranty provision, § 3.5, which
guarantees that the materials and equipment used will “be of good
quality” and that the work will be “free from defects not inherent in
the quality required or permitted, and that the work will conform to
the requirements of the Contract Documents.” In addition to the
general warranty provision, the contract includes an additional
warranty (§ 12.2.2) for latent defects discovered after the date of
final completion. See infra Appendix 1. In relevant part, this
additional warranty extends the warranty period by one year
following discovery of the latent defect. It requires the owner to
promptly notify the contractor of any defect and provides that an
owner who fails to provide prompt notice of a defect waives the right
to require its correction or to make a claim for breach of warranty.
3 Broomfield Senior Living is the current owner of the building and assumed ownership through a transfer of title from the original owner. The parties agree that specific contract language (§ 13.2.1), giving successive owners rights and obligations under the contract, gives Broomfield standing to bring a breach of contract claim, despite its status as a subsequent owner. Therefore, our breach of contract analysis is limited to subsequent owners who have contractual standing.
3 A contractor’s failure to correct the defect in a reasonable period of
time permits the owner to make the correction.
¶4 The contract also includes a clause (§ 13.7) limiting
Brinkmann’s liability in the event the work was defective. See infra
Appendix 2. This clause contains three separate accrual provisions.
It provides that claims arising from acts or failures to act (1)
occurring before substantial completion accrue no later than the
date of substantial completion; (2) occurring between substantial
completion and final payment certificate accrue no later than the
final payment certificate issuance date; and (3) occurring after final
payment accrue no later than the time provided in the warranty
(§ 3.5) or the additional warranty (§ 12.2), whichever is later.
¶5 A certificate of substantial completion was issued on March
16, 2009. The project was completed on May 15, 2009, when a
certificate of occupancy was issued. At that time, neither
Broomfield nor Brinkmann noted any defects in the construction of
the building.
¶6 In the fall of 2012, Broomfield discovered sewer flies and hired
a general contractor to investigate their cause. The contractor
determined that the sewer flies resulted from broken sewer pipes.
4 Because the pipes were located beneath concrete slabs, they could
not be readily accessed or repaired. Thus, on November 27, 2012,
Broomfield began excavation beneath the building to inspect and
repair the broken pipes. The contractor eventually advised
Broomfield that the breaks resulted from soil expansion and
recommended further investigation of other potential pipe breaks.
¶7 On April 26, 2013, Broomfield hired SBSA, Inc. (SBSA) to
conduct this further investigation. SBSA began its investigation on
May 3, 2013, and continued investigating through March 2015.
During that two-year period, SBSA identified numerous building
defects that it attributed to improper construction. See infra
Appendix 3.
¶8 On November 21, 2013, SBSA issued a notice of latent defects
to Broomfield identifying the defects discovered. On January 28,
2014, Broomfield issued a notice of claim informing Brinkmann of
the latent defects. On March 13, 2014, Brinkmann conducted a
site visit. In a letter dated May 12, 2014, Brinkmann rejected the
notice of claim, stating that the “primary problem affecting this site
is the soils.” It noted that the building itself had not moved and
credited the proper design and construction of the void space to this
5 non-movement. After comparing the list of defects provided by
Broomfield to the construction documents, Brinkmann concluded
that it had performed its work in accordance with the documents,
that there was no defective construction, and that there was no
“work requiring repair.”
¶9 On July 21, 2014, Broomfield filed its complaint against
Brinkmann. Brinkmann responded with a motion for summary
judgment arguing that there were no issues of material fact because
the statute of limitations — as established by the terms of the
contract — had run. The trial court granted Brinkmann’s motion
for summary judgment, reasoning that because all claims accrued
under the contract at final completion (May 15, 2009), the two-year
statute of limitations applicable to civil claims under § 13-80-
102(1)(a), C.R.S. 2016, expired on May 15, 2011, three years before
Broomfield filed its complaint. As to latent defects, the court
concluded that Broomfield had waived its right to assert claims for
repairs under the contract by failing to give Brinkmann prompt
notice of the defects or an adequate time to repair them before
performing the repair work itself.
II. Analysis
6 ¶ 10 Broomfield contends the trial court erred in granting summary
judgment and applying the accrual provisions of the contract rather
than CDARA’s accrual provision in § 13-80-104(1)(b)(I), C.R.S.
2016. It reasons that the contractual limitations contained in
section 13.7.1.1 of the contract are void as against public policy
under the plain language of the HPA. Brinkmann responds that the
contract modification was permissible and that all claims accrued
on March 16, 2009, at substantial completion or at the latest on
May 15, 2009, at final completion. While Brinkmann does not
dispute that Broomfield is the property owner, it argues that the
term “residential property” in the HPA is ambiguous and that the
legislative history demonstrates that Broomfield is not the type of
“residential property owner” the HPA was intended to protect
because it is a commercial entity.
A. Standard of Review
¶ 11 We review a trial court’s order granting summary judgment de
novo. Lewis v. Taylor, 2016 CO 48, ¶ 13; W. Elk Ranch, L.L.C. v.
United States, 65 P.3d 479, 481 (Colo. 2002). Summary judgment
is a drastic remedy and is appropriate only when the pleadings and
the supporting documentation show that no genuine issue of
7 material fact exists and that the moving party is entitled to
judgment as a matter of law. W. Elk Ranch, L.L.C., 65 P.3d at 481.
In determining whether a genuine issue of material fact exists, we
look at the “the pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits.” C.R.C.P. 56(c).
Like the trial court, we may not assess witness credibility and the
weight of evidence when determining a motion for summary
judgment. Anderson v. Vail Corp., 251 P.3d 1125, 1127 (Colo. App.
2010). “The nonmoving party is entitled to the benefit of all
favorable inferences from the undisputed facts, and all doubts as to
the existence of a triable issue of fact must be resolved against the
moving party.” W. Elk Ranch, L.L.C., 65 P.3d at 481. A “material
fact” is one that will affect the outcome of the case or claim.
Thompson v. Md. Cas. Co., 84 P.3d 496, 501 (Colo. 2004).
¶ 12 Additionally, both contractual interpretation and statutory
interpretation present questions of law that we review de novo.
Lewis, ¶ 14 (statutory interpretation reviewed de novo); Union Ins.
Co. v. Houtz, 883 P.2d 1057, 1061 (Colo. 1994) (interpretation of
contracts reviewed de novo); Douglas v. City & Cty. of Denver, 203
8 P.3d 615, 618 (Colo. App. 2008) (statutory interpretation reviewed
de novo).
B. Accrual Dates Comparison
¶ 13 Under sections 13.7.1 and 13.7.2 of the contract, all of
Brinkmann’s “acts or failures to act” accrued at the earliest at
substantial completion (March 16, 2009) and at the latest at final
completion (May 15, 2009). Thus, under § 13-80-102(1), the
contractual limitations period expired on either March 16, 2011, or
May 15, 2011, irrespective of when the acts or failures to act were
discovered.
¶ 14 In contrast, CDARA links the accrual of construction defect
claims to their discovery. Under § 13-80-104(1)(b)(I), Brinkmann’s
acts or failures to act accrued on the date that the “physical
manifestations of a defect” were discovered or in the exercise of
reasonable diligence should have been discovered. It is undisputed
that the first physical manifestations of a defect in the building
were the sewer flies that appeared sometime in the fall of 2012.
Thus, under CDARA, the claims accrued in the fall of 2012, and
under § 13-80-102(1), the statute of limitations expired in the fall of
2014. Additionally, § 13-80-104(1)(a) contains a statute of repose
9 which expires six years “after the substantial completion of the
improvement to the real property,” unless it is extended two years
because the underlying cause of action arose “during the fifth or
sixth year after substantial completion of the improvement to real
property.” See also In Re Goodman v. Heritage Builders, 2017CO 13
¶¶ 8,11. Key to both the limitations period and the repose period is
the claim accrual date.
C. Homeowner Protection Act
¶ 15 The HPA represents that portion of CDARA that is intended to
preserve adequate rights and remedies for residential property
owners who bring construction defect actions. § 13-20-802, C.R.S.
2016. It provides in relevant part:
In order to preserve Colorado residential property owners’ legal rights and remedies, in any civil action or arbitration proceeding described in section 13-20-802.5(1), any express waiver of, or limitation on, the legal rights, remedies, or damages provided by the “Construction Defect Action Reform Act” . . . or on the ability to enforce such legal rights, remedies, or damages within the time provided by applicable statutes of limitation or repose are void as against public policy.
§ 13-20-806(7)(a), C.R.S. 2016.
10 ¶ 16 Thus, if Broomfield is a “residential property owner,” then
section 13.7 of the contract — which shortens the period in which
claims accrue by eliminating the time for discovery of the defect
provided in § 13-80-104(1)(b)(I) — constitutes a limitation on the
ability to enforce rights, remedies, and damages under CDARA and
is void as against public policy under the HPA.
¶ 17 To determine whether Broomfield is a “residential property
owner” we employ the tenets of statutory construction. In
interpreting a statute, our primary objective is to ascertain and give
effect to the intent of the legislature. Specialty Rests. Corp. v.
Nelson, 231 P.3d 393, 397 (Colo. 2010). We look first to the
statutory language, giving words and phrases their plain and
ordinary meanings. Doubleday v. People, 2016 CO 3, ¶ 19. We
read words and phrases in context and construe them according to
the rules of grammar and common usage. Id.; Gagne v. Gagne,
2014 COA 127, ¶ 25. In doing so, we read the statutory scheme as
a whole, and we give consistent, harmonious, and sensible effect to
all of its parts. Doubleday, ¶ 19. “If the statutory language is clear,
we interpret the statute according to its plain and ordinary
meaning,” Nelson, 231 P.3d at 397, and we need not conduct any
11 further statutory analysis. Gagne, ¶ 27. If, however, the words are
ambiguous or unclear such that they “do not inexorably lead to a
single result,” we may employ other interpretive aids, including
consideration of the legislative history or the title of the statute, to
determine the object sought to be attained by the statute and the
consequences of a particular construction. State v. Nieto, 993 P.2d
493, 501 (Colo. 2000); see also Concerned Parents of Pueblo, Inc. v.
Gilmore, 47 P.3d 311, 313 (Colo. 2002) (stating that if the language
is ambiguous we can look to the title of the statute to determine the
General Assembly’s intent).
¶ 18 We begin with the plain language of § 13-20-806(7)(a) and note
that it applies only to “claimants asserting claims arising out of
residential property.” § 13-20-806(7)(c). Because the statute does
not define “residential property,”4 we consider its common usage.
Griego v. People, 19 P.3d 1, 9 (Colo. 2001) (“We consult definitions
contained in recognized dictionaries to determine the ordinary
meaning of words.”).
4 Neither party contests that Broomfield owns the property in question, so the focus of our inquiry is whether the building is a “residential property” for purposes of the HPA.
12 ¶ 19 “Residential” plainly means using or designed for use as a
residence. See Webster’s Third New International Dictionary 1931
(2002) (defining residential as “used, serving, or designed as a
residence or for occupation by residents”). “Residence,” in turn,
plainly means a structure where people live. See Black’s Law
Dictionary 1502 (10th ed. 2014) (defining residence as “[t]he place
where one actually lives,” a “dwelling,” and a “house or other fixed
abode”); see also The American Heritage Dictionary of the English
Language 1483 (4th ed. 2000) (defining residential as “[o]f, relating
to, or having residence,” or “[o]f, suitable for, or limited to
residences,” and defining residence as “[t]he place in which one
lives; a dwelling,” or “[t]he act or a period of residing in a place”).
¶ 20 Additionally, although CDARA does not define “residential
property,” it defines “commercial property” as “property that is
zoned to permit commercial, industrial, or office types of use.”
§ 13-20-802.5(4), C.R.S. 2016. We glean from this definition that
the legislature considers a property’s zoning relevant to its intended
purpose. Anderson v. Longmont Toyota, Inc., 102 P.3d 323, 327
(Colo. 2004) (“[W]e read the statute as a whole and, if possible,
construe its terms harmoniously . . . .”). Here, it is undisputed that
13 the building project was part of the fourth amendment to the
MidCities Planned Unit Development (P.U.D.) Plan and Preliminary
Plat and that the building was specifically designed for multi-family
residential use, including senior assisted and independent living
residences. Moreover, the seventh amendment to the MidCities
P.U.D. confirmed that the property was zoned for residential uses
only, including senior housing.
¶ 21 Further, in the context of property tax law, the legislature and
the Colorado Constitution define “residential real property” as all
residential dwelling units and the land they are situated upon,
excluding hotels and motels. § 39-1-102(14.5), C.R.S. 2016; see
also Colo. Const. art. X, § 3(1)(b). Indeed, this court has
consistently interpreted “residential” to mean for the purposes of
living or dwelling. Houston v. Wilson Mesa Ranch Homeowners
Ass’n, 2015 COA 113, ¶ 16; see also Jensen v. City & Cty. of
Denver, 806 P.2d 381, 385 (Colo. 1991) (“Apartments and
boarding/rooming houses used on a long term basis . . . properly
are included within the definition of residential property.”); Double D
Manor, Inc. v. Evergreen Meadows Homeowners’ Ass’n, 773 P.2d
14 1046, 1051 (Colo. 1989) (facility caring for disabled children is
considered residential property).
¶ 22 We conclude, therefore, from the consistent dictionary
definitions, the building’s zoning, other statutory definitions, and
decisions from this court, that the term “residential” is
unambiguous and means an improvement on a parcel that is used
as a dwelling or for living purposes. In reaching this conclusion, we
necessarily reject Brinkmann’s argument that the legislature’s
failure to define “residential property” renders that term ambiguous.
See Wisdom Works Counseling Servs., P.C. v. Colo. Dep’t of Corr.,
2015 COA 118, ¶ 38 (“But legislative failure to define a statutory
term does not necessarily make the statute ambiguous. This is
especially true where . . . the undefined term has a commonly
understood meaning.”) (citation omitted); Dillabaugh v. Ellerton, 259
P.3d 550, 552 (Colo. App. 2011) (stating that absence of statutory
definition does not create ambiguity if court can discern term’s
ordinary and common meaning).
¶ 23 Moreover, we are not persuaded by Brinkmann’s argument
that Phillips v. Monarch Recreation Corp., 668 P.2d 982 (Colo. App.
1983), or public policy requires a different result. To the contrary,
15 Phillips reinforces our conclusion that “[s]tatutory provisions may
not be modified by private agreement if doing so would violate the
public policy expressed in the statute.” Id. at 987.
¶ 24 Here, the building is used to house senior residents. Neither
Brinkmann nor the plaintiffs contest that the senior residents live
in the building or use it for any purpose other than ordinary living.
Instead, all parties agree that the building is used as a home for
senior residents. Moreover, the term “residential” in § 13-20-806(7)
is used to describe the property owned, not to limit its applicability
to any specific type of owner, whether an entity or a natural person.
¶ 25 Finally, we are not persuaded that Broomfield’s receipt of
rental income from the senior residents makes the building
“commercial property” because the “receipt of income does not
transform residential use of property into commercial use.”
Houston, ¶ 24. Accordingly, we conclude that the senior facility is
“residential property,” that Broomfield is a “residential property
owner,” and that the HPA applies.5
5 While we use “Broomfield” throughout this opinion to refer collectively to both Sunrise Development, and Broomfield, here we refer only to Broomfield in concluding that the HPA applies to it as a residential property owner. Sunrise Development conceded in the
16 III. Application
¶ 26 Because the HPA applies, the limitation on the accrual of
claims contained in section 13.7 of the contract is void as a matter
of public policy, and the relevant statutory accrual of claims periods
apply. A claim in a civil action accrues “on the date both the injury
and its cause are known or should have been known by the exercise
of reasonable diligence.” § 13-80-108(1), C.R.S. 2016 (emphasis
added); see also Morrison v. Goff, 91 P.3d 1050, 1053 (Colo. 2004)
(applying § 13-80-108(1) to negligence claims). In contrast, under
CDARA, claims for construction defects generally accrue on the date
“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.” § 13-80-104(1)(b)(I) (emphasis
added). Accrual under CDARA, therefore, depends on the discovery
of the manifestation of the defect and not its cause. See United Fire
Grp. ex rel. Metamorphosis Salon v. Powers Elec., Inc., 240 P.3d 569,
573 (Colo. App. 2010) (holding that the building fire itself, not the
trial court that it was not a residential property owner and that the HPA did not apply to it. We do not find otherwise.
17 discovery of the cause of the building fire — defective construction
— began the running of the statute of limitations). Once a CDARA
claim accrues, any action must be brought within two years under §
13-80-102(1). See § 13-80-104(1)(a).
¶ 27 However, CDARA does not govern all claims brought against
construction professionals. Indeed, the accrual language of § 13-
80-104(1)(b) “was never intended to limit claims for breach of
warranties to repair and replace.” Hersh Cos. v. Highline Vill.
Assocs., 30 P.3d 221, 225 (Colo. 2001). Instead, breach of warranty
claims accrue when the breach is discovered or in the exercise of
reasonable diligence should have been discovered under § 13-80-
108(6). Once a breach of warranty claim accrues, any action must
be brought within three years under § 13-80-101, C.R.S. 2016.
Hersh Cos., 30 P.3d at 225
¶ 28 Moreover, the scope of CDARA is limited to actions seeking the
recovery of damages for “‘[a]ny deficiency in the design, planning,
supervision, inspection, construction, or observation of
construction of any improvement to real property,’ or injury to
property or person caused by such deficiency.” Id. (quoting § 13-
80-104(1)(c)(I)-(III)). Thus, whether Broomfield’s breach of contract
18 claim falls within CDARA and accrues upon the discovery of the
physical manifestation of a defect under § 13-80-104(1)(b)(I) or
outside of CDARA and accrues upon the discovery of the defect
itself under § 13-80-108(6) depends on the nature of the allegations
in the complaint. See Hersh Cos., 30 P.3d at 224-25; see also § 13-
80-108(6) (“A cause of action for breach of any express or implied
contract, agreement, warranty, or trust shall be considered to
accrue on the date the breach is discovered or should have been
discovered by the exercise of reasonable diligence.”).
A. Breach of Contract
¶ 29 Broomfield’s amended complaint alleged that Brinkmann
failed “to perform the services for the Residential Project that were
the subject of the agreements.” Assuming, without deciding, that
the more restrictive accrual period of CDARA applies, we conclude
that Broomfield’s breach of contract claim accrued upon the
“physical manifestation of a defect.” The parties agree that the first
manifestation of a defect was the sewer flies that appeared in the fall
of 2012. Because Broomfield filed this action in July 2014 (summer
of 2014), we conclude it was timely under § 13-80-104(1)(a) and
19 section 13-80-102(1) and reverse the judgment entered on this
claim.
B. Breach of Warranty
¶ 30 Section 12.2.2 of the contract sets forth Brinkmann’s
obligations in addition to the general warranty and covers both
patent defects and latent defects6 that were not active or apparent
by reasonable inspection before the end of the warranty period.7 As
relevant here, the contract requires the owner to provide the
contractor with written notice of any non-compliant work “promptly
after discovery of the non-compliant condition.” The contract then
expands any applicable period by one year from the date the defect
is discovered to correct the non-compliant condition. Finally,
during this extended applicable period, the owner must give the
contractor the opportunity to make the correction, and the owner’s
failure to do so waives its rights to require correction of the work
and to make a claim for breach of warranty.
6 Because Broomfield alleged that all defects were latent in its complaint, we address only that portion of the contract. 7 Though not at issue we note that § 13-80-104(1)(a), C.R.S. 2016,
would preclude any claims for latent defects discovered more than six years after substantial completion of the property improvement.
20 ¶ 31 Broomfield contends the trial court erred in precluding its
breach of warranty claim based on its failure to give Brinkmann an
opportunity to correct the alleged defects. It argues that the record
and all reasonable inferences from the record do not support the
court’s finding that all repair work was completed before
Brinkmann had an opportunity to correct the alleged defects and
that genuine issues of material fact concerning notice and repair
work remain. Brinkmann responds that it was not obligated to
repair and correct latent defects unless Broomfield provided
adequate notice of them. It reasons that because Broomfield did
not provide adequate notice of the defects before making its own
repairs, the trial court properly granted summary judgment. We
conclude that genuine issues of material fact remain concerning
whether Brinkmann was promptly notified of the latent defects and
was given an opportunity to correct any defective work and, thus,
that summary judgment was improper.
¶ 32 “The question of the existence of a warranty and whether that
warranty was breached is ordinarily one for the trier of fact.” Stroh
v. Am. Recreation & Mobile Home Corp. of Colo., 35 Colo. App. 196,
201, 530 P.2d 989, 993 (1975). As previously discussed, claims for
21 breach of warranty accrue upon the discovery of the defect under
§ 13-80-108(6). However, once accrued, these claims expire after
three years, under the statute of limitations period set forth in
section 13-80-101. Hersh Cos., 30 P.3d at 225-26.
¶ 33 In this case, the parties presented conflicting evidence about
whether the warranty was breached. Relying on the facts contained
in the sworn affidavit of Edward L. Fronapfel (Fronapfel affidavit),
the owner of SBSA, Broomfield argues that the latent defects were
not discovered until SBSA began excavating the site on May 3,
2013, and issued its notice of latent defects to Broomfield on
November 21, 2013. It asserts that its January 2014 notice to
Brinkmann to correct the defects was timely under the contract and
provided sufficient opportunity for Brinkmann to correct them.
¶ 34 On the other hand, Brinkmann argues that the warranty could
not have been breached because it was not given a reasonable
opportunity to correct the defects. In support, Brinkmann relies on
deposition testimony and on invoices issued to Broomfield by the
architecture and engineering firm Gobbell Hays Partners, Inc.
(GHP), indicating that some repair work occurred.
22 ¶ 35 Our independent review of these invoices confirms that GHP
performed some repair work; however, they do not specify the type
of repair work done, or indicate whether such repairs related to the
latent defects alleged. Indeed, we note that Brinkmann’s May 12,
2014, letter, attributing the latent defects to soils expansion and
declining to conduct repairs, does not state that any repairs had
been completed before its March 2014 site visit. Because the date
on which each defect was discovered is disputed, and because
whether and on what dates any repairs were completed is disputed,
we conclude, viewing the facts and reasonable inferences in the
light most favorable to Broomfield, that factual disputes remain
concerning whether Brinkmann received prompt notice of the
defects under the contract and whether it had an opportunity to
correct its work. Accordingly, we reverse summary judgment on the
breach of warranty claim.
C. Negligence and Negligence Per Se
¶ 36 Broomfield contends that the trial court erred in concluding
that the negligence claims were time barred by the contract and §
13-80-102(1) and that it failed to establish that Brinkmann
performed design services. Brinkmann responds that summary
23 judgment was appropriate because the evidence offered by
Broomfield does not specifically link Brinkmann to the design
changes. Because we conclude these claims are not time barred,
and because the parties offered conflicting design services evidence,
we reverse the trial court’s summary judgment on them.
¶ 37 We first address the time-bar issue and note that the trial
court concluded, from the descriptions in the complaint, that the
twenty-seven defects alleged were “open and obvious” conditions of
the project — patent defects — and that the corresponding claims
accrued, under the contract, at the latest on May 15, 2009. Thus,
it reasoned the two-year statute of limitations under § 13-80-102(1)
ran on May 15, 2011, and barred the negligence claims.
¶ 38 Because we have concluded that the HPA applies, any
negligence claims accrued in the fall of 2012 when the sewer flies
were discovered. Broomfield’s July 2014 complaint, therefore, was
not time barred under § 13-80-102(1). Moreover, for the reasons
set forth in Part IV, infra, we conclude that genuine issues of
material fact remain concerning whether the alleged defects were
patent or latent.
24 ¶ 39 Broomfield contends that Brinkmann was negligent in making
certain plumbing decisions when constructing the building and that
it unilaterally modified the design of the pipes beneath the building
in violation of the contract. In support, Broomfield relies on the
Fronapfel affidavit, which states that revisions to the design
drawings, including revisions to the plumbing, were made during
construction.
¶ 40 In contrast, Brinkmann asserts that it never engaged in design
activities. It relies on deposition testimony that the changes
described were to the “means and methods” of construction and not
to the design. Our review of this deposition excerpt reveals that the
change was a request to “shortcut the design,” and that Brinkmann
should have “withdrawn the request to deviate.” Viewing this
evidence in the light most favorable to Broomfield, as we must, we
conclude it creates a question of disputed fact about whether
Brinkmann engaged in extra-contractual design services and, if so,
whether Brinkmann was negligent. Fin. Assocs., Ltd. v. G.E.
Johnson Constr. Co., 723 P.2d 135, 138 (Colo. 1986) (“An issue of
fact may arise from the existence of conflicting permissible
inferences from evidence accepted as true.”). Accordingly, we
25 reverse summary judgment on the negligence and negligence per se
claims.
IV. Patent and Latent Defects
¶ 41 Because we conclude that the statutory accrual provisions
apply, the date of a defect’s discovery necessarily controls the date
the statute of limitations begins to run. Morrison, 91 P.3d at 1053
(stating that a limitations period begins to run upon accrual absent
tolling, which will delay the start of the limitations period). “The
point of accrual is usually a question of fact, but if the undisputed
facts clearly show when a plaintiff discovered or should have
discovered the damage or conduct, the issue may be decided as a
matter of law.” Gognat v. Ellsworth, 224 P.3d 1039, 1045 (Colo.
App. 2009) (quoting Murry v. GuideOne Specialty Mut. Ins. Co., 194
P.3d 489, 491 (Colo. App. 2008)), aff’d, 259 P.3d 497 (Colo. 2011).
“The critical inquiry of when an action accrues is knowledge of the
facts essential to the cause of action, not knowledge of the legal
theory upon which the action may be brought.” Id. (quoting Olson
v. State Farm Mut. Auto. Ins. Co., 174 P.3d 849, 854 (Colo. App.
2007)). Therefore, we must address Broomfield’s contention that
the record shows disputed issues of material fact as to whether the
26 defects are patent or latent. It contends that the Fronapfel affidavit
alone demonstrates facts that could support a finding that all of the
defects were latent. Brinkmann counters that because the word
“external” appears in many of the defects’ descriptions, the trial
court properly concluded that the majority of the defects were
patent.
¶ 42 In its written order, the trial court listed a portion of the
defects contained in the notice of claim and concluded that the
“vast majority” of the partial list of defects were readily observable.
It did not base this conclusion on any evidence in the record, but
instead on its own interpretation of the descriptions. In doing so,
the trial court mistakenly disregarded the Fronapfel affidavit, which
described different phases of excavation that revealed different
construction defects over a lengthy period of time. Moreover, the
trial court did not state which alleged defects were latent and which
were patent, leaving questions of fact unresolved.
¶ 43 Considering the evidence in the light most favorable to
Broomfield, a genuine issue of fact remains concerning whether the
alleged defects are patent or latent. And, it is the province of the
fact finder to make this determination. See Park Rise Homeowners
27 Ass’n v. Res. Constr. Co., 155 P.3d 427, 431 (Colo. App. 2006)
(“Applying the test of whether such defects were discoverable
through reasonable inspection by a home buyer to the eighteen
defect categories used by the HOA’s damages expert, several of
which were broken down into subcategories, the jury could, based
on its common knowledge and with a proper instruction, have
determined which defects were latent.”). Therefore, on remand, the
trier of fact should weigh the evidence and determine which defects
were patent and which were latent.
V. Conclusion
¶ 44 The judgment is reversed and the case is remanded for further
proceedings consistent with this opinion.
JUDGE ASHBY concurs.
JUDGE DAVIDSON specially concurs.
28 JUDGE DAVIDSON, specially concurring.
¶ 45 I agree with the result reached by the majority in Parts II.A,
II.B, III, IV, and V. I specially concur as to Part II.C, concerning the
interpretation of the Homeowner Protection Act of 2007 (HPA),
§§ 13-20-806(7), -807, C.R.S. 2016.
¶ 46 The HPA prohibits as against public policy certain contractual
limitations on the ability to enforce rights, remedies, and damages
in construction defect lawsuits. It was enacted “to preserve
Colorado residential property owners’ legal rights and remedies,”
and it applies to “claimants asserting claims arising out of
residential property.” § 13-20-806, C.R.S. 2016. If applicable, it
voids the limitations provisions at issue here.
¶ 47 I don’t dispute the majority’s plain language understanding of
“residential property,” as used in the HPA, to include the Broomfield
senior facility. I find ambiguity, however, from the use of the term
“homeowner” in the HPA’s title but “residential property owner” in
its text. Thus, unlike the majority, I find it difficult to discern solely
from plain language a clear and unambiguous legislative intent to
include commercial entities such as Broomfield in the scope of the
protections of the HPA.
29 ¶ 48 The word “homeowner,” as referred to in the short title of the
HPA, most commonly indicates people who own the home in which
they reside. See The American Heritage Dictionary of the English
Language 840 (2000) (a homeowner is a person who owns the house
in which he or she lives); see also Webster’s Third New International
Dictionary 1082 (2002) (a home is a house occupied by a family).
Because nothing in the HPA requires a different understanding,
“residential property owner,” as used in the statute’s text, could be
read simply as a synonym of “homeowner.” See Frazier v. People,
90 P.3d 807, 811 (Colo. 2004) (“Although the title of a statute is not
dispositive of legislative intent, it is a useful aid in construing a
statute.”).
¶ 49 However, the term “residential property owner,” standing
alone, can be read more broadly to include anyone who owns
residential property, regardless of the type of owner or how the
property is used. See Houston v. Wilson Mesa Ranch Homeowners
Ass’n, 2015 COA 113, ¶ 17 (the particular use of residential
property may render the term ambiguous). Also, although used but
undefined in the HPA, the term “claimant” is expansively described
in other portions of the Construction Defect Action Reform Act
30 (CDARA) as any person who brings a claim. See § 13-20-802(5),
C.R.S. 2016.
¶ 50 With that uncertainty, and because Broomfield, the property
owner in this case, is a sophisticated commercial entity (and the
developer and the property owner are related business entities), I
hesitate to conclude, from the plain language alone, that the
legislature intended the protective scope of the HPA to extend to
Broomfield.
¶ 51 Certainly, the focus of the protections of the HPA is the
individual homeowner. See Taylor Morrison of Colo., Inc. v. Bemas
Constr., Inc., 2014 COA 10, ¶ 30; see also Shaw v. Baesemann, 773
P.2d 609, 611 (Colo. App. 1988) (legislative intent can be gleaned
from the problem addressed by the legislation).
¶ 52 In contrast with commercial entities that build and sell homes,
Colorado has recognized the policy need to protect the more
unsophisticated, less knowledgeable individuals who buy them.
See Cosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041, 1045 (Colo.
1983). Similarly, Colorado courts have voided contractual liability
waiver clauses as against public policy when there has been
demonstrably unequal bargaining power between the parties. See
31 Boles v. Sun Ergoline, Inc., 223 P.3d 724, 728 (Colo. 2010) (voiding a
waiver as against public policy when one party had substantially
more bargaining power); see also Huizar v. Allstate Ins. Co., 952
P.2d 342, 344 (Colo. 1998) (recognizing the policy need to protect
individuals with disparity in bargaining power in the insurance
context); Heil Valley Ranch, Inc. v. Simkin, 784 P.2d 781, 784 (Colo.
1989) (Exculpatory agreements are void when one party is “at such
obvious disadvantage in bargaining power that the effect of the
contract is to put him at the mercy of the other’s negligence.”)
(citation omitted); Estate of Harry v. Hawkeye-Sec. Ins. Co., 972
P.2d 279, 281 (Colo. App. 1998) (Parties to an insurance contract
“cannot contractually abrogate statutory requirements reflecting the
public policy of the state.”); cf. Chadwick v. Colt Ross Outfitters, Inc.,
100 P.3d 465, 469 (Colo. 2004) (upholding a waiver between a
commercial entity and an individual where the individual was
“competent and educated”).
¶ 53 Based on this authority, I understand the HPA as a
codification of the policy principles underlying these cases.
Specifically, as it concerns the parties to a purchase and sale of
residential property, contractual waiver clauses are void as against
32 public policy because of the imbalance of knowledge, sophistication,
and bargaining power between them. See People v. Zapotocky, 869
P.2d 1234, 1240 (Colo. 1994) (noting assumption of legislative
awareness of prior decisional law on the subject under
consideration).
¶ 54 Conversely, I find little authority upon which to imply
legislative intent, as a matter of public policy, to extend such
statutory protections to, or abrogate contractual rights between,
knowledgeable and sophisticated commercial entities with equal
bargaining power. Indeed, the opposite is true. See BRW, Inc. v.
Dufficy & Sons, Inc., 99 P.3d 66, 72 (Colo. 2004) (noting the trend in
Colorado and elsewhere to protect the ability of the parties to
negotiate the allocation of risk and reward that is associated with a
construction project); Rhino Fund, LLLP v. Hutchins, 215 P.3d 1186,
1191 (Colo. App. 2008) (Colorado courts will uphold an exculpatory
provision in a contract between two “business entities that have
negotiated their agreement at arm’s length.”). “Until fully and
solemnly convinced that an existent public policy is clearly revealed,
a court is not warranted in applying that principle to void a
contract.” Superior Oil Co. v. W. Slope Gas Co., 549 F. Supp. 463,
33 468 (D. Colo. 1982), aff’d, 758 F.2d 500 (10th Cir. 1985); see also
Stanley v. Creighton Co., 911 P.2d 705, 708 (Colo. App. 1996) (“[A]
public policy that protects tenants from a waiver clause is more
compelling here, under a form residential lease, than it would be
under a commercial lease.”).
¶ 55 In addition, to the extent the statutory abrogation of certain
contractual rights between sellers and purchasers of homes as
against public policy is in derogation of the common law freedom to
contract, I would think that the class of persons intended to benefit
from the HPA’s protections (viz., “residential property owners”)
should be construed narrowly — that is, to exclude commercial
entities such as Broomfield. See § 2-4-211, C.R.S. 2016; Van
Waters & Rogers, Inc. v. Keelan, 840 P.2d 1070, 1076 (Colo. 1992)
(“[S]tatutes in derogation of the common law must be strictly
construed, so that if the legislature wishes to abrogate rights that
would otherwise be available under the common law, it must
manifest its intent either expressly or by clear implication.”).
¶ 56 In this context, I cannot conclude simply from the plain
meaning of “residential property owner” that the legislature
intended to extend the protections of the HPA to a sophisticated,
34 commercial entity, such as Broomfield. Thus, I find examination of
the legislative history of the HPA to be appropriate and, here,
instructive.
¶ 57 The hearings in both the House and Senate confirm that the
overwhelming impetus for the bill was the plight of the individual
homeowner — the problem was that homeowners were being forced
to waive important rights in order to enter into a contract to buy a
house. See, e.g., Hearings on H.B. 07-1338 before the Senate Bus.,
Labor & Tech. Comm., 66th Gen. Assemb., 1st Sess. (Apr. 3, 2007)
(statement of Sen. Viega) (“You either sign a contract as is or you
don’t buy a house.”).
¶ 58 However, the full discussions in both the House and Senate
hearings show that while the effect of the proposed legislation was
subject to heated debate, so long as it involved a contract for the
sale of “residential property,” the type or status of the purchaser to
be protected in that transaction was not.
¶ 59 Notably, the testimony, pro and con, included lengthy
discussion of the impact of the proposed bill on the development
and sale of numerous types of mixed-use or multi-use properties,
including affordable housing projects and senior living facilities
35 such as at issue here. Although these types of purchasers typically
are not situated like vulnerable homeowners “buying and
purchasing the single largest investment in their lives,” Hearings on
H.B. 07-1338 before the Senate Bus., Labor & Tech. Comm., 66th
Gen. Assemb., 1st Sess. (Apr. 3, 2007) (statement of Sen. Viega),
the absence of any voiced concern as to the nature, status, or scope
of protected homeowners was striking. To the contrary, it was
assumed as a given in the discussions that a purchaser of
“residential property” included not just an individual homeowner,
but also the (more sophisticated and far less vulnerable) purchaser
of mixed-use and multi-family properties.
¶ 60 Moreover, I note that there was no dissent to testimony that
certain provisions of form American Institute of Architects
residential purchase and sale contracts, such as those at issue
here, would be void as against public policy under the proposed
legislation. Again, there was no discussion or debate limiting the
type or nature of individual or entity benefiting from this protection
on the purchaser side of the transaction.
¶ 61 Importantly, then, the hearings put the legislature on notice
that as it concerned a contract to purchase residential property, the
36 protections of the proposed bill extended significantly beyond the
individual home buyer. Yet, the General Assembly did not adjust or
change any language in response.
¶ 62 Therefore, like the majority, I conclude that the legislature
intended the HPA to void the limitations waiver in the contract here,
regardless of the fact that the homeowner is a sophisticated
commercial entity. But, unlike the majority, I determine this
legislative intent not only from the statutory language, but also
from examination of its legislative history. See Farmers Ins. Exch. v.
Bill Boom, Inc., 961 P.2d 465, 469-70 (Colo. 1998) (stating that if
statutory meaning is unclear, it is appropriate to seek the intent of
the legislature by examining the legislative history as well as the
social context in which the underlying bill was passed).
37 APPENDIX 1 12.2.2 AFTER FINAL COMPLETION
In addition to the Contractor’s obligation under Paragraph 3.5,
upon receipt of written notice from the Owner, the Contractor shall
promptly correct any Work that is found, within the applicable
period, not to be in compliance with the requirements of the
Contract Documents. Except for latent defects, the applicable
period shall be a period of one year after the date of Final
Completion of the Work or for a period of one year after the date of
completion of any corrective work, whichever is longer, or by terms
of an applicable special warranty required by the Contract
Documents. If any latent defect or deficiency which was not active
or apparent by reasonable inspection during the course of
construction or before Final Completion or before the end of the
warranty period is discovered, then the applicable period shall be
extended by one year after the discovery of such latent defect. The
contractor shall correct all non-compliant Work promptly unless the
Owner has previously given the Contractor an express written
acceptance of such condition. The Owner shall give such notice to
correct non-compliant Work promptly after discovery of the non- compliant condition. During the applicable period for correction of
the work, if the Owner fails to notify the Contractor and give the
Contractor an opportunity to make the correction, the Owner
waives the rights to require correction by the Contractor and to
make a claim for breach of warranty. If the contractor fails to
correct nonconforming Work within a reasonable time during that
period after receipt of notice from the Owner or Architect, the
Owner may correct it in accordance with Paragraph 2.4. APPENDIX 2 13.7 COMMENCEMENT OF STATUTORY LIMITATION
PERIOD
.1 Before Substantial Completion. As to acts or failures to act
occurring prior to the relevant date of substantial Completion, any
applicable statute of limitations shall commence to run and any
alleged cause of action shall be deemed to have accrued in any and
all events not later than such date of Substantial Completion;
.2 Between Substantial Completion and Final Certificate for
Payment. As to acts or failures to act occurring subsequent to the
relevant date of Substantial Completion and prior to the issuance of
the final Certificate for Payment, any applicable statute of
limitations shall commence and run and any alleged cause of action
shall be deemed to have accrued in any and all events not later
than the date of issuance of the final Certificate for Payment and
.3 After Final Certificate for Payment. As to acts or failures to
act occurring after the relevant date of issuance of the final
Certificate for Payment, any applicable statute of limitations shall
commence to run and any alleged cause of action shall be deemed
to have accrued in any and all events not later than the date of any
act or failure to act by the Contractor pursuant to any Warranty provided under Paragraph 3.5, the date of any correction of the
Work or failure to correct the Work by the Contractor under
paragraph 12.2 or the date of actual commission of any other act or
failure to perform any duty or obligation by the Contractor or
Owner, whichever occurs last. APPENDIX 3 Defects Identified by SBSA:
(a) GEOTECHNICAL (i) Insufficient Design of Void Space (ii) Differential Movement of Foundation (b) FOUNDATION SYSTEM (i) Non-Compliant Construction of Void Space below Structural Slab-On-Void and Grade Beams (c) GRADING AND DRAINAGE (i) Non-Compliant Slope to Drain from Foundation (ii) Non-Compliant Exterior Drains (iii) Non-Compliant Drainage of West Courtyard (iv) Non-Compliant Clearance to Grade (v) No Perimeter Drain Provided for AL Wing (vi) Non-Compliant Perimeter Drain for IL Wing (vii) Non-Compliant Irrigation Near Building (d) CONCRETE FLATWORK (i) Differential Movement of Flatwork (ii) Non-Compliant Isolation (e) STREETS AND ROADWAYS (i) Differential Movement of Driveways and Roadways (f) FAÇADE (EXTERIOR CLADDING AND SEALANTS) TYPE 1 – LAP SIDING AND TRIM (i) Non-Compliant Clearance to Grade (ii) Non-Compliant Clearance to Hard Surfaces (iii) Non-Compliant Joint Provisions at Dissimilar Materials (g) FAÇADE (EXTERIOR CLADDING AND SEALANTS) TYPE 2 ·STONE VENEER (i) Non-Compliant Clearance to Grade (ii) Non-Compliant Clearance to Bard Surfaces (iii) Non-Compliant Joint Provisions at Dissimilar Materials (h) MOISTURE MANAGEMENT SYSTEM (BARRIERS, FLASHINGS, DRAINAGE, ETC.) (i)Obstructed Weep Mechanism at Horizontal Terminations (i) FENESTRATIONS (WINDOWS. DOORS, CURTAIN WALLS, ETC.) (i) The windows must be integrally tied into the Weather Resistive Barrier and related moisture management materials to perform properly. (j) ROOFING SYSTEM TYPE 1 - ASPHALT SHINGLES (i) Non-Compliant Diverter Flashings (ii) Non-Compliant Downspout Extension (iii) Non-Compliant Discharge of Emergency Overflow Drains (k) ELEVATED DECKS, BALCONIES, OR WALKWAYS (i) Non-Compliant Waterproofing at Exterior Decks (ii) Non-Compliant Waterproofing of West Courtyard (l) MECHANICAL, ELECTRICAL, PLUMBING (i) Clearance for Under-Slab Piping Not Provided (ii) Non-Compliant Penetrations at Grade-Beams (iii) Non-ventilated or Conditioned Spaces below the Foundation Slab (iv) Improper Isolation of Mechanical and Electrical Systems