construction defect action reform act crs § 13-20-801 et. seq

CONSTRUCTION LAW GROUP at Lee & Assocaites

Construction Defect Action Reform Act CRS § 13-20-

801 et. seq.

Panacea or Pain?


Purpose of CDARA

Streamline Construction Defect LitigationRespond to multi-party lawsuits over “technical” code violationsLimit shotgun lawsuits


Definitions

Construction Professional – Architect, Engineer, Contractor, Subcontractor, Developer, Builder, Builder Vendor, or inspector.Action – civil action or arbitration for damages loss to or loss of use.


Notice Requirements

In Writing List of DefectsPersonal Service or Certified Mail90 Days Pre-suit for Commercial75 Days Pre-suit for residential


Inspections

“Reasonable” access within 30 daysScope of inspection If defect list is amended, a new inspection is allowed.


Post-Inspection Action

Offer to Make RepairsOffer a “sum certain” for settlement


Response

Description of InspectionFindingsScope of Required Remedial WorkSchedule for Work


Post-Offer Options

Accept or Reject within 15 daysIf rejected, claimant may sue If Accepted: Payment as per terms of offer or Repairs must be as per offer including

schedule


Results of Non-Compliance by Plaintiff

Non-JurisdictionalSuit may be stayed pending compliance


Result of Failure to Respond By Construction Professional

Potential for treble damages under CCPA


Result of Failure to Comply with Offer

Exposure to treble damages under CCPA


Failure to Comply with Offer

Claimant may sue on the offer orClaimant may sue on the original defect


Defenses for Construction Professional

Claimant’s Failure to Cooperate


Limitation on Claims

If a negligence action is based on code violation actual damage is required.“Other” tort claims not limitedContract claims not limitedWarranty claims not limitedStatutory violation (except building code) not limited


Limitation of Damages

Limited to “actual” damages, unless: Claimant proves CCPA violation and

The monetary offer is less than 85% of recovery or

The reasonable cost of repair as offered is less than 85% of the amount awarded.


Noneconomic Damages

Noneconomic damages and derivative noneconomic damages limited to $250,000.00 See 13-21-102.5(2)(a) and 13-21-102.5(2)(b)


Definition of Damages

Damages – The Lesser of (1) Fair market value without the defect (2) Replacement cost or (3) Reasonable cost to repair.


Unresolved Issues

Punitive Damages – Does the failure to include them in the definition of damages mean they are not available?Actual Damages – Are damages limited to only those categories in the definition?


Unresolved Issues

Economic and Non-Economic Damages – Are damages for annoyance, aggravation, inconvenience, etc. recoverable as “personal injury” subject to the $250,000 cap? How many “increments” of $250,000 can be awarded in the same lawsuit?


Constitutional Questions

Is the differing treatment of residential and commercial properties a violation of equal protection?Is the treatment of construction professionals differently from all others a violation of equal protection?Does the inspection requirement violate an owner's due process rights?


CONSTRUCTION LAW GROUP AT LEE & ASSOCIATES, LLC

construction defect action reform act crs § 13-20-801 et. seq

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