30 Taylor Morrison of Colorado, Inc. v. Terracon Consultants, Inc
2017 COA 64
| Colo. Ct. App. | 2017Background
- Taylor Morrison contracted Terracon for geotechnical services for a subdivision; the parties’ contract contained a $550,000 aggregate limitation on Terracon’s liability.
- Homeowners later reported drywall cracking; Taylor sued Terracon and several other contractors.
- Terracon deposited $550,000 into the court registry and was dismissed; Taylor proceeded against others, settled some claims for $592,500, and obtained a large jury verdict ($9,586,056) against Terracon on remand after retrial.
- The trial court reduced the jury verdict to $550,000 under the contractual cap, then subtracted the $592,500 settlements (setoff), yielding a $0 final judgment; the court also held the $550,000 cap included statutory costs and prejudgment interest but not postjudgment interest.
- Taylor appealed the calculation of damages and other rulings; Terracon cross-appealed seeking costs under Colorado’s settlement statute.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Order of applying setoff and contractual cap | Setoff should be applied to the jury verdict first, then cap applied to the remainder | Cap should be applied first to the jury verdict, then setoff deducted from capped amount | Court held setoff must be applied first to the jury verdict, then apply contractual limitation (cap) to that reduced amount; remand for entry of $550,000 judgment for Taylor |
| Whether the contractual $550,000 Limitation includes statutory costs | Limitation is silent on statutory costs and thus should not include them | Limitation’s “any and all … expenses (including attorney and expert fees)” includes statutory costs | Court held the Limitation includes statutory costs and affirmed denial of costs to Taylor |
| Whether the Limitation covers prejudgment and postjudgment interest | Limitation should not cap interest; Taylor sought prejudgment and postjudgment interest outside cap | Limitation covers prejudgment interest as a form of damages but not postjudgment interest | Court held Limitation includes prejudgment interest (as damages) but does not include postjudgment interest; remanded to calculate postjudgment interest on $550,000 |
| Admissibility of expert testimony labeling conduct “willful and wanton” | Experts may characterize conduct as willful and wanton to defeat the Limitation | Expert testimony cannot state legal conclusions (willful/wanton) — that is for the jury | Court affirmed exclusion of experts’ characterizations as legal conclusions; experts could testify to facts and engineering opinions but not opine on whether legal standard of willful/wanton was met |
| Whether Terracon’s deposit or e-mail constituted an offer under §13-17-202 to recover costs | Deposit and e-mail constituted settlement offers entitling Terracon to costs | Deposit was a legal deposit and e-mail included non-monetary, scope-expanding conditions so did not comply with statute | Court held neither the registry deposit nor the e-mail qualified as a statutorily-compliant offer; affirmed denial of costs to Terracon |
Key Cases Cited
- Tyler v. District Court, 613 P.2d 899 (Colo. 1980) (jury verdict should be given effect when possible)
- Lexton-Ancira Real Estate Fund, 1972 v. Heller, 826 P.2d 819 (Colo. 1992) (prohibition on double recovery)
- Quist v. Specialties Supply Co., Inc., 12 P.3d 863 (Colo. App.) (preventing double recovery by setoff)
- Andrews v. Picard, 199 P.3d 6 (Colo. App.) (setoff principles in damages context)
- Lira v. Davis, 832 P.2d 240 (Colo. 1992) (distinction between jury-assessed damages and reduced awarded damages under a specific exemplary-damages statute; court declined to extend Lira to contractual cap/setoff context)