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Construction Defect Action Reform Act CRS § 13-20-801 et. seq.

Construction Defect Action Reform Act CRS § 13-20-801 et. seq. . Panacea or Pain?. Purpose of CDARA . Streamline Construction Defect Litigation Respond to multi-party lawsuits over “technical” code violations Limit shotgun lawsuits. Definitions.

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Construction Defect Action Reform Act CRS § 13-20-801 et. seq.

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  1. Construction Defect Action Reform Act CRS § 13-20-801 et. seq. Panacea or Pain? CONSTRUCTION LAW GROUP at Lee & Assocaites

  2. Purpose of CDARA • Streamline Construction Defect Litigation • Respond to multi-party lawsuits over “technical” code violations • Limit shotgun lawsuits CONSTRUCTION LAW GROUP at Lee & Assocaites

  3. Definitions • Construction Professional – Architect, Engineer, Contractor, Subcontractor, Developer, Builder, Builder Vendor, or inspector. • Action – civil action or arbitration for damages loss to or loss of use. CONSTRUCTION LAW GROUP at Lee & Assocaites

  4. Notice Requirements • In Writing List of Defects • Personal Service or Certified Mail • 90 Days Pre-suit for Commercial • 75 Days Pre-suit for residential CONSTRUCTION LAW GROUP at Lee & Assocaites

  5. Inspections • “Reasonable” access within 30 days • Scope of inspection • If defect list is amended, a new inspection is allowed. CONSTRUCTION LAW GROUP at Lee & Assocaites

  6. Post-Inspection Action • Offer to Make Repairs • Offer a “sum certain” for settlement CONSTRUCTION LAW GROUP at Lee & Assocaites

  7. Response • Description of Inspection • Findings • Scope of Required Remedial Work • Schedule for Work CONSTRUCTION LAW GROUP at Lee & Assocaites

  8. Post-Offer Options • Accept or Reject within 15 days • If rejected, claimant may sue • If Accepted: • Payment as per terms of offer or • Repairs must be as per offer including schedule CONSTRUCTION LAW GROUP at Lee & Assocaites

  9. Results of Non-Compliance by Plaintiff • Non-Jurisdictional • Suit may be stayed pending compliance CONSTRUCTION LAW GROUP at Lee & Assocaites

  10. Result of Failure to Respond By Construction Professional • Potential for treble damages under CCPA CONSTRUCTION LAW GROUP at Lee & Assocaites

  11. Result of Failure to Comply with Offer • Exposure to treble damages under CCPA CONSTRUCTION LAW GROUP at Lee & Assocaites

  12. Failure to Comply with Offer • Claimant may sue on the offer or • Claimant may sue on the original defect CONSTRUCTION LAW GROUP at Lee & Assocaites

  13. Defenses for Construction Professional • Claimant’s Failure to Cooperate CONSTRUCTION LAW GROUP at Lee & Assocaites

  14. Limitation on Claims • If a negligence action is based on code violation actual damage is required. • “Other” tort claims not limited • Contract claims not limited • Warranty claims not limited • Statutory violation (except building code) not limited CONSTRUCTION LAW GROUP at Lee & Assocaites

  15. Limitation of Damages • Limited to “actual” damages, unless: • Claimant proves CCPA violation and • The monetary offer is less than 85% of recovery or • The reasonable cost of repair as offered is less than 85% of the amount awarded. CONSTRUCTION LAW GROUP at Lee & Assocaites

  16. Noneconomic Damages • Noneconomic damages and derivative noneconomic damages limited to $250,000.00 See 13-21-102.5(2)(a) and 13-21-102.5(2)(b) CONSTRUCTION LAW GROUP at Lee & Assocaites

  17. Definition of Damages • Damages – The Lesser of (1) Fair market value without the defect (2) Replacement cost or (3) Reasonable cost to repair. CONSTRUCTION LAW GROUP at Lee & Assocaites

  18. Unresolved Issues • Punitive Damages – Does the failure to include them in the definition of damages mean they are not available? • Actual Damages – Are damages limited to only those categories in the definition? CONSTRUCTION LAW GROUP at Lee & Assocaites

  19. Unresolved Issues • Economic and Non-Economic Damages – Are damages for annoyance, aggravation, inconvenience, etc. recoverable as “personal injury” subject to the $250,000 cap? • How many “increments” of $250,000 can be awarded in the same lawsuit? CONSTRUCTION LAW GROUP at Lee & Assocaites

  20. Constitutional Questions • Is the differing treatment of residential and commercial properties a violation of equal protection? • Is the treatment of construction professionals differently from all others a violation of equal protection? • Does the inspection requirement violate an owner's due process rights? CONSTRUCTION LAW GROUP at Lee & Assocaites

  21. CONSTRUCTION LAW GROUP AT LEE & ASSOCIATES, LLC CONSTRUCTION LAW GROUP at Lee & Assocaites

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