Statute of Limitations & Constructio Defect Reform Act
Statute of Limitations and the Construction Defect Action Reform Act
This morning, the Colorado Supreme Court issued its oppinion in Smith v. Executive Custom Homes, Inc., 2009SC223, holding that personal injury claims under Colorado's Construction Defect Action Reform Act ("CDARA" or "the Act") accrue for purposes of the Act's two-year statute of limitations at the time the claimant first discovers, or in the exercise of reasonable diligence should have discovered, the construction defect.
In Smith, a homeowner discovered ice accumulating on his sidewalk near the entrance to his home. The home builder agreed to conduct certain repairs to the home's gutters. It is unknown whether the repairs actually took place. The following winter, the homeowner slipped on ice which had accumulated in the same location as the prior year. Nearly two years after the accident, and almost three years after the defect in the gutter system was initially discovered, the homeowner brought suit against the home builder alleging damages for personal injuries arising from the alleged defect in the gutter system.
The trial court dismissed the complaint as time-barred. The Court of Appeals agreed that the home owner's cause of action accrued at the as of the date that the homeowner discovered the ice accumulation; however, it held that the statute of limitations was equitably tolled under the "repair doctrine."
The Colorado Supreme Court reversed the Court of Appeals. The Supreme Court strictly construed the accrual standard set forth in the CDARA which provides that a claim accrues "at the time the claimant . . . 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." C.R.S. sec. 13-80-104(b)(I). In light of this unambiguous statutory language, the Court refused to apply the doctrine of equitable tolling.
In a footnote, the Court gave itself some wiggle-room for softening this rule in the right circumstances. Specifically, the Court hinted that a claim could accrue as of the date of the injury if the injury was not a foreseeable consequence of the construction defect. However, in this case, the Court noted that the danger of slipping on ice is a clearly foreseeable result of discovering an accumulation of ice.