Colorado Court of Appeals holds that statute of repose and limitation does not begin to run until a contractor finishes repair efforts

In Sierra Pacific Industries, Inc. v. Bradbury, ___ P. 3d ___, 2016 WL 4699116 (2016), Sierra Pacific had settled with the homeowners’ association and the general contractor with regard to water intrusion at a condominium building. Sierra Pacific then brought suit against its subcontractor Jason Bradbury.

Bradbury moved for summary judgment arguing that the six-year statute of repose had expired – therefore the claims were too late. The undisputed facts relevant to the motion were:

• On June 11, 2004, the City and County of Denver issued a certificate of occupancy for all units.
• At the HOA’s direction, the general contractor and Sierra Pacific attended to the reported leaks and water damage between 2004 and 2011, including two substantial retrofit repairs in January 2005 and March 2011;
• Bradbury participated in some repair efforts in 2004, but none thereafter.

Applying those facts to the statute of repose, the Sierra Pacific court ultimately held that Sierra Pacific’s claims were barred by the statute of repose.

The court recognized that statute of repose commences upon “substantial completion of the improvement to the real property.” However, the court explained that “substantial completion of the improvement to the real property” is not necessarily the date of a certificate of occupancy, but instead the court concluded “that a subcontractor has substantially completed its role in the improvement at issue when it finishes working on the improvement.”

Applying the court’s interpretation of the statute of repose, the court ultimately concluded that because Bradbury finished its repair work on the windows and doors in 2004, the the statute of repose commenced, at the latest, in 2004.

This decision makes sense in the context of the law and social policy. It allows homeowners to hold off of suing contractors if the contractor is still willing to make reasonable repairs. That is obviously beneficial to homeowners and contractors, who will be involved in fewer lawsuits in situations where good contractors are willing to make reasonable repairs to their work.

Under Sierra Pacific, Homeowners, HOAs, and other property owners are now clearly afforded their full statute of limitations and repose to determine if a contractor’s’ repairs are successful before taking next steps.

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