Forest City Stapleton Inc. v. Rogers, 2017 CO 23

Forest City developed and subdivided the former Stapleton Airport into lots and sold a vacant lot to a professional builder, Infinity; Infinity built and sold the completed house (with a basement) to Tad Rogers.
After moving in Rogers experienced excessive groundwater and calcite buildup that made the basement uninhabitable; he sued Forest City alleging, inter alia, breach of the implied warranty of suitability, nuisance, and negligent misrepresentation.
A jury found for Rogers on the implied warranty claim; the court of appeals held an implied warranty of suitability can exist between a developer and a later home buyer and remanded for a new trial due to instructional defects.
The Colorado Supreme Court granted certiorari to decide whether privity of contract is required for a home buyer to sue a developer for breach of the implied warranty of suitability.
The Supreme Court held that the implied warranty of suitability is a contract-based warranty and therefore enforceable only by parties in contractual privity (absent third-party-beneficiary issues not raised here); Rogers lacked privity with Forest City and so cannot pursue that claim against Forest City.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether privity of contract is required to sue a developer for breach of the implied warranty of suitability	Rogers: a buyer of a finished home can enforce an implied warranty of suitability against the developer even though the developer sold the lot to a builder	Forest City: implied warranty of suitability is a contractual claim and requires privity; Rogers contracted with Infinity, not Forest City	Held: Privity is required; Rogers not in privity with Forest City, so claim fails
Whether a warranty can be implied by developer conduct or via third-party-beneficiary principles	Rogers: jury found a warranty implied by conduct; he may enforce that warranty	Forest City: issue of privity still bars recovery; third-party-beneficiary theory not argued below and not decided	Held: Court declined to decide third-party-beneficiary or implied-by-conduct theories because privity requirement was dispositive

Duncan v. Schuster-Graham Homes, Inc., 578 P.2d 637 (Colo. 1978) (recognizing implied warranty of habitability in construction context)
Cosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041 (Colo. 1983) (treating implied warranty of habitability as contractual and limiting remedies to contract principles)
Rusch v. Lincoln-Devore Testing Lab., Inc., 698 P.2d 832 (Colo. App. 1984) (formulating elements of implied warranty of suitability where developer improved and sold land for residential use)
Carpenter v. Donohoe, 388 P.2d 399 (Colo. 1964) (damages for breach of implied warranties involve contractual relations)
H. B. Bolas Enters., Inc. v. Zarlengo, 400 P.2d 447 (Colo. 1965) (privity required for implied warranty of habitability claims)
Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256 (Colo. 2000) (discussing economic loss rule and boundary between contract and tort)