Colorado: Statute of Repose in multi-phase construction disputes clarified by Court of Appeals

Chad Johnson, an attorney at Colorado construction law firm HHMR, wrote an excellent analysis of a case recently heard by the Colorado Court of Appeals. In Shaw Construction, LLC v. United Builders Services, Inc., the HOA sued general contractor Shaw for construction defects. Subcontractor defendants filed a motion for summary judgment claiming the statute of repose had expired. The key factor in determining the date triggering the statute of repose is the Certificate of Occupancy (CO).

The court noted that “[o]ne quality of an improvement is permanence.” Anderson v. M.W. Kellogg Co., 766 P.2d 637, 641 (Colo. 1988). This is true, “even if the improvement can be removed.” Enright v. City of Colo. Springs, 716 P.2d 148, 150 (Colo. App. 1985). The Court also analyzed the “improvement” language from the statute of repose to be read that “a construction professional could be involved in only one component of a larger product, which would be the focus of ‘substantial completion.’” Id. at *9. Finally, the court held, at least in this case, that “substantial completion” had occurred when the last building received a CO. Id. Combined with the court’s previous discussion of CDARA intent, this portion of the opinion indicates the court would have held the statute of repose trigger is the last CO date, or the CO date for certain buildings/phases, if it had been appropriate to make such a distinction.