The time within which suit (or sometimes arbitration proceedings) must be commenced is limited to certain periods of time, usually by statute. Thus, one having a claim must commence legal action within the time fixed or risk having his case thrown out.
The policy behind these time limitations is an effort to avoid litigation of stale claims where the party sued may be unable to properly defend against claims because of the unavailability of witnesses, the loss or destruction of exhibits or simply the frailty of memories. Time limitations usually depend upon the nature of the claim. Under various statutes of limitations, the times within which actions must be instituted generally range from six months to six years.
In certain actions against architects, contractors, engineers and inspectors, Colorado and other states have special statutes of limitations. For example, under the Colorado statute, some cases against contractors and the named professional may be barred unless commenced within two years after the claim for relief arises but not more than ten years after substantial completion of the construction. If the injury occurs during the tenth year after substantial completion, an additional one-year time period is allowed.
Two Colorado Supreme Court cases 2 decided in 1978 limited the applicability of that statute to claims other than those for damages for deficiencies in the construction itself. Those cases ruled that the shorter two-year limitation period did not apply to actions brought by parties who had contracted with the builders or designated professionals. Instead, they held that the longer six-year statute would apply to cases in which owners sought damages for design or construction deficiencies.
Under those decisions, only suits by strangers to the construction project itself are governed by the two-year limitation. The distinction is between owners (consumers) and third-parties.
1 Update note: Since this column was originally published, the Colorado legislature has amended the limitation provision to provide that a suit may not be brought more than six years after substantial completion of the improvement to the real property. If the cause of action arises in the fifth or sixth year after substantial completion, then suit must be brought within two years after the cause of action arises. § 13-80-104, C.R.S.
2 Tamblyn v. Mickey & Fox, Inc., 195 Colo. 354, 578 P.2d 641 (1978); Duncan v. Schuster Graham Homes, Inc., 194 Colo. 441, 548 P.2d 637 (1978)
For example, a passerby injured by falling bricks from the building would have to sue within two years following the date of the mishap (one year if the bricks fell on his head during the tenth year). On the other hand, the owner who contracted for the construction, design or inspection services would have six years within which to sue following discovery of the faulty construction or professional services.
The bottom line is that contractors, architects, engineers and inspectors may be home free from suits against them by those with whom they contracted for construction or professional services in six years following the time when any faulty work was discovered but need only sweat for two years after someone else or someone else's property is damaged because of their faulty work. Suits by those "someones else" are barred following the eleventh year from substantial completion of the work involved.
This somewhat confusing result stems from the Colorado Supreme Court's interpretation of the language used by the legislature in this particular statute of limitations. That process involves the court's at tempting to determine what the legislature meant. If, however, the Colorado General Assembly did not intend that result, it has the power to amend the statute. 3
The interest of the construction community would probably best be served by a uniform statute of limitations applicable to all types of cases fixing reasonable times after discovery of deficiency or occurrences of injuries within which suit may be instituted.
The concept of adding a ten-year final limitation from the substantial completion date is valid for a number of reasons, including
(1) the likelihood that any deficiency for which a member of the construction team may have been responsible should become apparent within ten years, and
(2) contractors, architects, engineers and inspectors should not be required to store the great volume of correspondence, plans and other bulk associated with construction work for a longer period of time.
As a practical footnote to these observations, it may be well for the contractors and design professionals involved to review their insurance coverages to determine the extent they may be protected against claims
3 Editor's note: Since this column was originally published, the Colorado legislature has overruled the court decisions which made that distinction. Section 13-80-127, C.R.S., as amended.
E-53 for those periods during which they may be exposed to lawsuits. Some insurance, particularly the professional liability type, is on a "claims made" basis which means that the insured is protected by insurance in effect at the time a claim is made or suit commenced rather than at the time his services were rendered. In this instance, the duration during which the professional may wish to continue insurance coverage may need to be extended-even beyond retirement or the discontinuation of professional practice.