Sierra Pacific Industries, Inc. v. Bradbury , 409 P.3d 551 ( 2016 )

COLORADO COURT OF APPEALS 2016COA132
Court of Appeals No. 15CA1652
City and County of Denver District Court No. 14CV34003
Honorable John W. Madden IV, Judge
Sierra Pacific Industries, Inc., a California corporation,
Plaintiff-Appellant,
v.
Jason Bradbury, d/b/a Bradbury Construction, Inc., a Colorado corporation,
Defendant-Appellee.
JUDGMENT AFFIRMED
Division I
Opinion by JUDGE DAILEY
Taubman and Freyre, JJ., concur
Announced September 8, 2016
Perkins Coie, LLP, L. Norton Cutler, Daniel Graham, Denver, Colorado; Lehr,
Lemmon, Kirwin & Francis, LLP, Mark Kirwin, Ventura, California, for Plaintiff-
Appellant
The Hustead Law Firm, P.C., Patrick Q. Hustead, Ryan A. Williams, Denver,
Colorado, for Defendant-Appellee
¶1 In this construction defect dispute, plaintiff, Sierra Pacific
Industries, Inc. (Sierra Pacific), appeals the district court’s entry of
summary judgment in favor of defendant, Jason Bradbury, d/b/a
Bradbury Construction, Inc. (Bradbury). We affirm.
I. Background
¶2 Sierra Pacific was hired by a contractor, the Weitz Company I,
Inc. (Weitz), to supply windows and doors for the construction of
condominiums for the Ajax Lofts Condominium Association, Inc.
(Ajax). Sierra Pacific, in turn, hired Bradbury to install the windows
and doors; Bradbury began and completed its work in 2002.
¶3 On June 11, 2004, the City and County of Denver issued a
certificate of occupancy for all units. Subsequently, however, the
condominiums’ residents began complaining to Ajax about water
infiltration. At Ajax’s direction, Weitz 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.
¶4 In November 2011, Ajax filed suit against Weitz for the alleged
defective construction. Weitz, in turn, filed suit against Sierra
1
Pacific for damages, costs, and expenses related to Ajax’s claims.
Following the district court’s consolidation of the two cases
(hereinafter, the underlying case), Ajax, Weitz, and Sierra Pacific
reached a settlement on July 31, 2014.
¶5 On October 20, 2014, Sierra Pacific filed the present
indemnification action against Bradbury to recover losses incurred
in the settlement and damages for related contractual breaches.
Bradbury filed a motion for summary judgment under C.R.C.P.
56(b), asserting that Sierra Pacific’s claims, brought nearly ten
years after Bradbury ceased repair efforts on the project, were time
barred by the six-year statute of repose in Colorado’s Construction
Defect Action Reform Act (CDARA), § 13-80-104, C.R.S. 2015.
¶6 Sierra Pacific responded that its claims were not barred by the
statute of repose because (1) under section 13-80-104(1)(b)(II), its
claims against Bradbury did not “arise” until after the underlying
case was settled in 2014, after which Sierra Pacific had ninety days
to file its complaint (which it did); and (2) even if the statute of
repose was not tolled by the settlement, the period of repose did not
commence until 2011, when the improvements to the property in
2
connection with Bradbury’s defective work were substantially
completed.
¶7 Bradbury replied that (1) there is no settlement exception to
the statute of repose; and (2) the statute of repose commenced, at
the latest, upon its completion of work in 2004.
¶8 The district court concluded that
 both the 2005 and 2011 repairs constituted
“improvement[s] to the real property,” § 13-80-104(1);
 “[s]ince Bradbury conducted repairs in 2004, [it] may
have contributed to the 2005 retrofit,” but the 2011
retrofit constituted a “separate effort”;
 “[t]herefore, the effective date of substantial completion in
regard[] to Bradbury’s work is January 2005”;
 to toll the statute of repose that commenced in January
2005, Sierra Pacific would have had to notify Bradbury of
its claims within the requisite six-year period;
 “[i]t is undisputed that Bradbury did not have notice of
[Sierra Pacific’s] claims within the requisite time period”;
and
3
 consequently, Sierra Pacific’s claims against Bradbury
are barred by the six-year statute of repose.
¶9 Accordingly, the district court granted Bradbury’s motion for
summary judgment.
II. Analysis
¶ 10 Sierra Pacific contends that the district court erred in finding
that its claims were barred by the six-year statute of repose. We
disagree.
¶ 11 We review de novo a district court’s order granting summary
judgment. Mountain States Adjustment v. Cooke, 2016 COA 80,
¶ 11. Summary judgment is proper when there is no genuine issue
as to any material fact and the moving party is entitled to judgment
as a matter of law. Geiger v. Am. Standard Ins. Co. of Wis., 192 P.3d
480, 482 (Colo. App. 2008).
¶ 12 A district court’s ruling may be affirmed based on any grounds
that are supported by the record. Rush Creek Sols., Inc. v. Ute
Mountain Ute Tribe, 107 P.3d 402, 406 (Colo. App. 2004).
4
A. The Statute of Repose Was Not Tolled
Until the Settlement in the Underlying Case
¶ 13 A statute of limitations creates a time limit for a plaintiff to file
suit in a civil case and is based on when a claim accrued; in
contrast, a statute of repose bars any suit filed after a specific time,
thereby acting as a “‘cutoff’ or absolute bar on a defendant’s
liability, and it reflects a legislative judgment that a defendant
should be free from liability after the legislatively prescribed period
of time.” Lewis v. Taylor, 2016 CO 48, ¶ 43 (Gabriel, J., dissenting)
(citing CTS Corp. v. Waldburger, 573 U.S. ___, ___, 134 S. Ct. 2175,
2183 (2014)); see also Gleason v. Becker-Johnson Assocs., Inc., 916
P.2d 662, 664 (Colo. App. 1996) (“Unlike a statute of limitations, a
statute of repose imposes an absolute bar to bringing suit after a
set period of time, regardless of whether the claim has accrued or
an injury has resulted. Thus, even though a statute of limitations
may not bar an action, a statute of repose operates independently.”)
(citation omitted).1
1 “The chief difference between a statute of repose and a statute of
limitation is that [the statute of repose] is not subject to any
‘discovery’ rule, but instead terminates any party’s right to bring an
action at a date certain. . . . It is thus possible in a given action
that the statute of repose will bar a claim even before it accrues.”
5
¶ 14 “Section 13-80-104 . . . contains both a statute of limitations
and a statute of repose that are applicable to suits against
architects, contractors, builders or builder vendors, engineers,
inspectors, and others involved in real property construction or
improvements.” Thermo Dev., Inc. v. Cent. Masonry Corp., 195 P.3d
1166, 1167 (Colo. App. 2008). Section 13-80-104(1)(a) incorporates
the two-year statute of limitations contained in section 13-80-
102(1), C.R.S. 2015; and, subsections (1)(a) and (2) of section 13-
80-104 provide a statute of repose which expires six years “after the
substantial completion of the improvement to the real property,”
unless it is extended two years because the underlying cause of
action arose “during the fifth or sixth year after substantial
completion of the improvement to real property.”2
¶ 15 Sierra Pacific asserts that, under section 13-80-104(1)(b), it
was allowed to file claims against Bradbury within ninety days of
Stephen A. Hess, 5A Colo. Prac., Handbook on Civil Litigation
§ 1:13 (2015 ed.).
2 The text of section 13-80-104(1)(a) and (2), C.R.S. 2015, is set
forth in Appendix A to this opinion.
6
settling the underlying case, notwithstanding the statute of repose.3
But in Thermo, a division of this court rejected an identical
argument; the division held that section 13-80-104(1)(b)’s
settlement tolling provision applied only to the statute of limitations
and not to the statute of repose. 195 P.3d at 1170.
¶ 16 Sierra Pacific posits that the Thermo division erroneously
based its decision on “incomplete readings” of the statute and its
legislative history. A review of the Thermo decision, however,
discloses that it was based on an extensive analysis of the pertinent
statutory language, legislative history, and policies underlying
CDARA. We perceive no reason to depart from the division’s
holding in Thermo.4
3 The text of section 13-80-104(1)(b) is also set forth in Appendix A.
4 Sierra Pacific posits that, although all of the speakers at the
legislative hearings for section 13-80-104(1)(b) referenced only the
statute of limitations, they must have meant, instead, both the
statute of limitations and the statute of repose. Sierra Pacific
premises its assertion on one speaker’s mistaken statement that the
statute of limitations was six years, when, in reality, it was two
years and a six-year period applied to the statute of repose. In our
view, this isolated numerical mistake does not taint the effect of
either his testimony or the testimony of the others that followed him
— that is, that section 13-80-104(1)(b)’s tolling clause applied only
to the statute of limitations. Hearings on H.B. 01-1166 before the
House Business and Labor Comm., 63d Gen. Assemb., 1st Reg.
7
¶ 17 Consequently, we conclude that the settlement in the
underlying case did not impact the application of the statute of
repose with respect to Bradbury.
B. There Was No Genuine Issue of Material Fact Regarding
the Expiration of the Statute of Repose
¶ 18 We next consider and reject Sierra Pacific’s contention that
summary judgment was inappropriate because there remains a
genuine dispute of material fact as to when the statute of repose
expired. Because of the manner in which we interpret the statute of
repose provision and apply the “repair doctrine” to uncontested
facts, we are able to determine, as a matter of law, when the statute
of repose commenced and expired. See, e.g., Woodmoor
Improvement Ass’n v. Prop. Tax Adm’r, 895 P.2d 1087, 1090 (Colo.
App. 1994) (“Analysis of a statute of repose does not reach the issue
of accrual of any cause of action. Unlike a statute of limitations
that begins running upon accrual of the claim, a period contained
in a statute of repose begins when a specific event occurs,
Sess. (Mar. 6, 2001); House floor Debate on H.B. 01-1166 before the
House Business and Labor Comm., 63d Gen. Assemb., 1st Reg.
Sess. (Mar. 12, 2001); Hearings on H.B. 1166 before the Senate
Business Affairs and Labor Comm., 63d Gen. Assemb., 1st Reg.
Sess. (Mar. 21, 2001).
8
regardless of whether a cause of action has accrued or whether any
injury has resulted.”).
¶ 19 Section 13-80-104(1)(a) states, as relevant here, that “in no
case shall such an action be brought more than six years after the
substantial completion of the improvement to the real property.”
The statute of repose commences in this context, then, upon
“substantial completion of the improvement to the real property.”
¶ 20 The parties agree that, for purposes of applying the statute of
repose, “an improvement may be [to] a discrete component of an
entire project.” Shaw Constr., LLC v. United Builder Servs., Inc.,
2012 COA 24, ¶ 38. They disagree, however, about when
“substantial completion of the improvement” occurred here. Sierra
Pacific contends that it did not occur before 2011 because, as of
that time, repairs “related to and connected with” Bradbury’s
“improper installation work and flawed repair work” were still being
made. In contrast, Bradbury contends that it could have occurred
in 2002, when Bradbury initially finished its work, but in any event
9
no later than 2004, when it last made repairs. For the following
reasons, we agree with Bradbury.5
¶ 21 Our prior decisions have recognized that, depending upon the
circumstances, “substantial completion” of a project can occur by
the time mechanics’ liens could be filed “after the completion of the
building, structure, or other improvement,” May Dep’t Stores Co. v.
Univ. Hills, Inc., 789 P.2d 434, 439 (Colo. App. 1989) (citation
omitted), or, in the case of subcontractors working on the last
building in a condominium complex, when a certificate of
occupancy was issued, Shaw, ¶¶ 47-50.
¶ 22 But as the division in Shaw pointed out,
CDARA does not define “substantial
completion.” In 1986, an amendment removed
the prior definition, “the degree of completion
of an improvement to real property at which
the owner can conveniently utilize the
improvement for the purpose it was intended.”
§ 13-80-127, C.R.S. 1973; Ch. 114, sec. 1,
§ 13-80-104, 1986 Colo. Sess. Laws 697
(repealing former § 13-80-127). The legislative
history does not explain the reason for this
deletion.
Id. at ¶ 15.
5 In doing so, we necessarily reject the district court’s conclusion
that the statute of repose commenced in 2005.
10
¶ 23 Determining how the phrase “substantial completion” should
be applied involves a question of statutory interpretation, which we
review de novo. See Trappers Lake Lodge & Resort, LLC v. Colo.
Dep’t of Revenue, 179 P.3d 198, 199 (Colo. App. 2007).
¶ 24 When construing a statute, a court must not only ascertain
and give effect to the intent of the General Assembly but also refrain
from rendering a judgment that is inconsistent with that intent. Id.
To determine legislative intent, we look first to the language of the
statute. Id. If the statute’s words are clear and unambiguous in
import, we apply them as written. Id. If, however, the words are
ambiguous or unclear, such that they “do not inexorably lead to a
single result,” we may consider, among other things, the object
sought to be attained and the consequences of a particular
construction. Id. at 199-200 (quoting State v. Nieto, 993 P.2d 493,
501 (Colo. 2000)). Ultimately, we must construe a statute to further
the legislative intent represented by the entire statutory scheme.
Id. at 200.
¶ 25 The words of section 13-80-104(1)(a) do not provide a clear
answer to the issue presented here; consequently, we must turn
elsewhere, such as to the object of the statute and the
11
consequences of alternative constructions, to discern legislative
intent.
¶ 26 The purpose of section 13-80-104(1)(a) is to relieve those
involved in the construction business of the prospect of potentially
indefinite liability for their acts or omissions. See generally Edward
H. Tricker, Erin L. Ebeler & Christopher R. Kortum, Applicability of
Statutes of Repose to Indemnity and Contribution Claims and 50
State Survey, 7 J. Am. C. Construction Law. 5 (Jan. 2013) (“[T]he
purpose of a construction statute of repose is to prevent potentially
limitless and perpetual liability. The nature of construction and
construction claims makes statutes of repose especially appropriate
in the context of construction.”); see also Gleason, 916 P.2d at 664
(“[T]he limitation of actions under § 13-80-104(1)(a) is in derogation
of the common law because, prior to the enactment of statutes of
limitations relating to construction, builders and contractors were
subject to potentially indefinite liability.”); Monson v. Paramount
Homes, Inc., 515 S.E.2d 445, 449 (N.C. Ct. App. 1999) (noting that
the purpose of a statute of repose, in a construction defect statute,
is to prevent defendants from being subjected to “potential open-
ended liability for an indefinite period of time”); Barnes v. J.W.
12
Bateson Co., 755 S.W.2d 518, 521 (Tex. App. 1988) (acknowledging
that the statute of repose protects construction professionals within
its purview from indefinite potential liability).
¶ 27 In Gordon v. Western Steel Co., 950 S.W.2d 743 (Tex. App.
1997), the Texas Court of Appeals construed a provision
substantially similar, in relevant part, to section 13-80-104.6 The
court concluded that statute’s purpose was best served by
commencing the period of repose when a party completed its own
work with respect to a project:
[W]here different subcontractors were
responsible for the construction of different
parts of a larger project, the statute of repose
should be applied to each of those individual
subcontractors when they have completed
their respective improvements. . . .
In most scenarios, the various improvements
contained within a larger project will not
stretch beyond several years, and the general
contractors or beneficiaries ordinarily have
opportunities to supervise or disapprove of the
6 See Tex. Civ. Prac. & Rem. Code Ann. § 16.009(a) (West 2015) (“A
claimant must bring suit for damages for a claim listed in
Subsection (b) against a person who constructs or repairs an
improvement to real property not later than 10 years after the
substantial completion of the improvement in an action arising out
of a defective or unsafe condition of the real property or a deficiency
in the construction or repair of the improvement.”).
13
work along the way. Secondly, it is not overly
burdensome to decipher when respective
contractors substantially complete their
improvements (e.g. when they submit their
final bills and/or walk away from the
project). . . . The legislature has . . .
announced that persons in the construction
business should not be liable for an
improvement more than ten years after they
have completed their contracted-for work and
walked away. An alternate construction would
undermine the purpose of the statute. Besides
the “potentially limitless liability” a
subcontractor might face in such a scenario,
the supreme court has noted other difficulties
created by allowing suit beyond ten years of
substantial completion. See Trinity River Auth.
v. URS Consultants, Inc., 889 S.W.2d 259, 264
(Tex. 1994) (noting evidentiary difficulty of
defending suit years after completion of an
improvement because of faded memories, as
well as increased possibilities of third-party
neglect, abuse, poor maintenance,
mishandling, improper modification, and/or
unskilled repair).
. . . Starting the statute of repose when each
subcontractor finishes its improvement
conforms with the legislative intent of
preventing indefinite liability for those who
construct or repair improvements to real
property.
Id. at 748-49.
¶ 28 Persuaded by this rationale, we conclude that a subcontractor
has substantially completed its role in the improvement at issue
14
when it finishes working on the improvement. In this case, there is
no factual dispute as to when that occurred: Bradbury finished its
work on the windows and doors initially in 2002, and ultimately in
2004. Thus, the statute of repose commenced, at the latest, in
2004.
¶ 29 Sierra Pacific asserts that the statute of repose was tolled,
however, while others worked to repair Bradbury’s “improper
installation work and flawed repair work.”
¶ 30 In Smith v. Executive Custom Homes, Inc., 230 P.3d 1186 (Colo.
2010), the supreme court held that “equitable tolling under the
repair doctrine would be inconsistent with the CDARA” “because
the General Assembly has already taken into account the need for
extra time to complete repairs by allowing for statutory tolling while
such repairs are made pursuant to the notice of claim procedure.”
Id. at 1192. “The [statutory] repair doctrine,” the court said, “tolls a
limitations period while a construction professional undertakes
repair efforts intended to remedy the defect,” and “[t]olling
continues until the date that the construction professional
abandons its repair efforts, provided that the homeowner
reasonably relied on the promises to repair and, as a result, did not
15
institute a legal action against the construction professional.” Id. at
1191.7
¶ 31 Sierra Pacific’s attempt to toll the statute of repose based on
its own efforts or promises, not Bradbury’s, is unavailing under
Smith. Accord A & B Painting & Drywall, Inc. v. Superior Court, 30
Cal. Rptr. 2d 418, 420 (Cal. Ct. App. 1994) (“Repair by third parties
does not involve reliance upon the defendant in any way and
furnishes no basis for tolling.”); cf. Ocean Winds Corp. of Johns
Island v. Lane, 556 S.E.2d 377, 380 (S.C. 2001) (“The legislature
could not have intended that the date upon which a subcontractor
. . . becomes free from liability with regard to a particular job hinges
upon the diligence of the general contractor and/or developer in
completing construction. To so hold would subject the
subcontractor to ‘the economic and emotional burdens of litigation
and liability for an indefinite period of time.’”) (citation omitted).
¶ 32 Again, there is no material issue of fact as to when Bradbury
substantially completed its work on the improvement: that occurred
7In Smith, the supreme court said that the statutory “repair”
doctrine applies to the statutes of limitations and repose located in
section 13-80-104. Smith v. Exec. Custom Homes, Inc., 230 P.3d
1186, 1192 (Colo. 2010).
16
in 2002. Nor is there any issue of material fact as to the length of
time the statute of repose could have been tolled, as to Bradbury,
pursuant to the repair doctrine: that was until 2004. Even
commencing anew the six-year period of repose in 2004, that period
would have expired long before Bradbury received notice of Sierra
Pacific’s claims in 2014.
¶ 33 Because, under the applicable statute of repose, Sierra
Pacific’s claims against Bradbury are time barred, the district court
properly granted Bradbury’s motion for summary judgment.
III. Conclusion
¶ 34 The judgment is affirmed.
¶ 35 JUDGE TAUBMAN and JUDGE FREYRE concur.
17
APPENDIX A
Section 13-80-104, C.R.S. 2015, provides:
(1)(a) Notwithstanding any statutory provision
to the contrary, all actions against any
architect, contractor, builder or builder
vendor, engineer, or inspector performing or
furnishing the design, planning, supervision,
inspection, construction, or observation of
construction of any improvement to real
property shall be brought within the time
provided in section 13-80-102 after the claim
for relief arises, and not thereafter, but in no
case shall such an action be brought more
than six years after the substantial completion
of the improvement to the real property, except
as provided in subsection (2) of this section.
(b)(I) Except as otherwise provided in
subparagraph (II) of this paragraph (b), a claim
for relief arises under this section at the time
the claimant or the claimant’s predecessor in
interest discovers or in the exercise of
reasonable diligence should have discovered
the physical manifestations of a defect in the
improvement which ultimately causes the
injury.
(II) Notwithstanding the provisions of
paragraph (a) of this subsection (1), all claims,
including, but not limited to indemnity or
contribution, by a claimant against a person
who is or may be liable to the claimant for all
or part of the claimant’s liability to a third
person:
(A) Arise at the time the third person’s claim
against the claimant is settled or at the time
18
final judgment is entered on the third person’s
claim against the claimant, whichever comes
first; and
(B) Shall be brought within ninety days after
the claims arise, and not thereafter.
....
(2) In case any such cause of action arises
during the fifth or sixth year after substantial
completion of the improvement to real
property, said action shall be brought within
two years after the date upon which said cause
of action arises.
19