2014 COA 10
Colo. Ct. App.2014Background
- Taylor Morrison developed Homestead Hills subdivision and contracted Terracon for geotechnical services and construction materials testing.
- Taylor engaged Bemas for site grading, including overlot and subexcavation work.
- After homes were built, homeowners reported drywall cracks; Taylor investigated and paid to remedy defect-related conditions.
- Taylor sued Terracon and Bemas for breach of contract and negligence to recover investigation and repair costs.
- Taylor unsuccessfully moved to amend to add gross negligence and misrepresentation theories; trial court denied, and Terracon deposited $550,000 to limit liability, resulting in dismissal of Taylor's claims against Terracon.
- Trial against Bemas proceeded; dispute centered on Bemas's liability for Terracon's alleged testing deficiencies; jury sided with Bemas.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| HPA retroactivity on limitation clauses | Taylor asserts HPA invalidates limitation clauses | Terracon argues HPA is not retroactive and may be unconstitutional | Retroactive application would be unconstitutional |
| HPA applicability to commercial entities | Taylor contends HPA protects homeowners regardless of party type | Terracon argues HPA targets residential owners; not necessary for this case | Court does not decide on broad applicability; retroactivity issue controls |
| Willful and wanton conduct evidence to defeat limitation | Taylor should be allowed to introduce willful/wanton evidence to overcome limits | Terracon argues no such evidence is permitted without amending complaint | Remanded to determine if such evidence may be introduced; not decided here |
| New trial scope for Terracon vs Bemas | If new trial against Terracon is required, Taylor seeks relief against Bemas as well | No automatic new trial against Bemas when Terracon retried | Bemas's verdict affirmed; separate retrial considerations allowed on remand |
Key Cases Cited
- City of Golden v. Parker, 138 P.3d 293 (Colo.2006) (vested rights and prospective retroactivity considerations)
- Rhino Fund, LLLP v. Hutchins, 215 P.3d 1186 (Colo.App.2008) (exculpatory provisions generally enforceable between sophisticated parties; exceptions for willful conduct)
- 1745 Wazee LLC v. Castle Builders Inc., 89 P.3d 422 (Colo.App.2003) (arm's length bargaining supports enforcement of limitation clauses)
- Pollock v. Highlands Ranch Cmty. Ass'n, 140 P.3d 351 (Colo.App.2006) (statute altering validity of waivers can be substantive)
- Premier Members Fed. Credit Union v. Block, 312 P.3d 276 (Colo.App.2013) (ground for affirming trial ruling on alternative supported grounds)
- Abromeit v. Denver Career Serv. Bd., 140 P.3d 51 (Colo.App.2005) (retrospective effects and vested rights analysis)
- Trione v. Mike Wallen Standard, Inc., 902 P.2d 454 (Colo.App.1995) (interwoven claims and potential jury confusion; retrial considerations)
- Core-Mark Midcontinent, Inc. v. Sonitrol Corp., 300 P.3d 963 (Colo.App.2012) (limitations on liability do not apply to willful conduct; allocation issues in tort vs contract)
- City of Golden v. Parker, 138 P.3d 285 (Colo.2006) (vested rights analysis and prospective application)