Brown v. Smith, 23CA1037 & 23CA1038

The case arises from a breach of contract dispute following an asbestos-containing materials (ACM) spill during demolition at Denver Water’s Hillcrest reservoir in Denver, Colorado.
Brown & Caldwell (B.C.), contractor for Denver Water, hired Smith Environmental & Engineering (Smith) as a subcontractor to prepare a hazardous materials report (the Smith Report) to identify ACM locations.
The Smith Report failed to identify a continuous strip of transite (ACM panels) along the southwest wall, leading to the accidental disturbance of ACM during demolition, causing costs and delays due to necessary asbestos remediation.
Denver Water sued B.C. for breach of contract; B.C. then filed third-party claims against Smith for breach of subcontract, indemnification, and duty to defend.
The district court issued key pretrial rulings: Smith had a duty to defend B.C., the Smith Report’s inaccuracies breached both B.C.’s and Smith’s contractual obligations, and Smith had to indemnify B.C. for damages linked to the report.
The jury awarded Denver Water $1,257,926.67 from B.C. and B.C. $999,352.86 from Smith; both B.C. and Smith challenged aspects of this outcome post-trial and on appeal.

Issue	Plaintiff’s Argument	Defendant’s Argument	Held
Duty to Defend	Smith’s duty to defend B.C. was triggered by Denver Water’s claims implicating Smith’s work under the subcontract.	Smith argued duty to defend wasn’t triggered until judicial finding of breach/liability.	Duty to defend triggered by underlying allegations; no prior judicial finding needed.
Indemnification	Smith’s indemnity owed to B.C. followed automatically from breach based on subcontract incorporating prime agreement duties.	Indemnity not applicable without judicial finding of breach; causation not established in summary judgment.	Smith’s indemnity duty triggered by breach; summary judgment findings on breach applied to Smith.
Exclusion of Causation Evidence	Objected to Smith’s evidence about ACM warnings in the report as inconsistent with prior breaches found.	Sought to introduce evidence rebutting causation (that report did warn of ACM at spill location).	Error to exclude, but harmless—Smith had opportunity to argue causation.
Amended Damages Judgment	Sought damages from Smith matching all damages awarded by jury to Denver Water against B.C.	Opposed, arguing some damages were for B.C.’s non-Smith-related breaches.	No error in jury’s differentiated damage awards; B.C. not entitled to all damages.

Boulder Plaza Residential, LLC v. Summit Flooring, LLC, 198 P.3d 1217 (Colo. App. 2008) (standards for contract construction)
Eastern Ridge of Fort Collins, LLC v. Larimer & Weld Irrigation Co., 109 P.3d 969 (Colo. 2005) (how to interpret and harmonize contract provisions)
City of Aurora v. Dep't of Revenue, 2023 COA 17 (Colo. App. 2023) (appellate court may affirm on any basis supported by the record)
Gibbons v. Ludlow, 2013 CO 49 (Colo. 2013) (summary judgment standards)
University of Denver v. Doe, 2024 CO 27 (Colo. 2024) (elements of breach of contract claim)