Construction Law in Colorado

Loss-of-Bonding-Capacity Claims Are Back in Colorado

Denny Construction v. Denver (Colo. 2009)

Reversing a Court of Appeals opinion, the Colorado Supreme Court holds that impaired bonding capacity claims are not speculative as a matter of law.  Instead, like all claims for lost profits, they must be established with reasonable certainty.  Far from finding such a claim speculative as a matter of law as the Court of Appeals did, the Colorado Supreme Court lends support for such a claim:

"At bottom, then, a reduction in bonding capacity indicates a reduction in responsibility, which, in turn, will impair a contractor’s ability to obtain public works contracts. This is not speculation; on the contrary, it is the intended function of the bonding system."

Subcontractor not required to perform its paving work at midnight using teaspoons

New Design Construction Company, Inc. v. Hamon Contractors, Inc. (Colo. App. 2008)

The Court of Appeals holds that the duty of good faith and fair dealing applies to a prime contractor's right to schedule and sequence the work.  Additionally, the Court holds that a subcontractor not suing CDOT directly is not required to exhaust the CDOT administrative remedies prior to maintaining a suit against the prime contractor.  Finally, the Court addresses when penalty interest under Colorado's prompt pay act applies and begins accruing.

Colorado adopts the "active interference" exception to no-damages-for-delay clauses

Tricon Kent Co. v. Lafarge North America, Inc. (Colo. App. 2008)

The Colorado Court of Appeals holds that no-damage-for-delay clauses are enforceable in Colorado, but that the "active interference" doctrine is a recognized exception to the enforceability of such clauses.

Court Of Appeals Gives Lengthy Analysis Of Changed-Conditions Claims

URS Group, Inc. v. Tetra Tech FW, Inc. (Colo. App. 2008)

The Colorado Court of Appeals addresses in detail the elements of, and defenses against, a Type-I differing site conditions claim.

Lost Bonding-Capacity Claims Are Too Speculative (REVERSED)

Denny Construction v. Denver (Colo. App. 2007)

The Colorado Court of Appeals held that, as a matter of law, lost bonding-capacity claims are too speculative.

UPDATE: On 11/26/2007, the Colorado Supreme Court grated cert. on the following issue: "Whether Colorado law prohibits lost profits arising out of the loss of bonding capacity as a matter of law." (07SC236)

UPDATE:  On 1/12/2009, the Colorado Supreme Court reversed the Court of Appeals, holding that impaired bonding capacity claims are not speculative as a matter of law.  Instead, like all claims for lost profits, they must be established with reasonable certainty.  See here.

Quantum Meruit Claim Allowed For What Is Typically A Change Order Issue

Specialized Grading v. Goodland (Colo. App. 2007)

The Court of Appeals holds that a subcontractor can maintain a quantum meruit claim against the general contractor for alleged extras caused by the general's failure to dewater, despite the fact that the parties have a written contract. The general rule is that a quasi-contract claim cannot lie where the parties have an express contract. But this rule does not apply if the conduct complained of is subsequent to, and not covered by, the express terms of the contract.

Lost Bonding-Capacity Claims Are Too Speculative (on cert.)

Denny Construction v. Denver (Colo. App. 2007)

The Colorado Court of Appeals held that, as a matter of law, lost bonding-capacity claims are too speculative. I've highlighted the relevant text.

The Court also addressed various provisions in a typical contract that give the owner discretion (like granting extensions), and how exercising that discretion can result in a claim for breach of the duty of good faith and fair dealing.

Read slip opinion

Remititur Not Proper Vehicle To Strike Previously-Undisclosed Lost Profits Claim

Belfor USA v. Rocky Mtn. Caulking (Colo. App. 2006)

Decided August 10, 2006, the Court of Appeals reverses the trial court's remititur, basically allowing the claimaint to seek lost profits at the last minute. Belfor had hired Rocky Mountain to install caulking and waterproof coatings on 161 exterior decks of an apartment complex for a lump sum of $184,831. Rocky Mountain partially completed the work, and Belfor paid Rocky Mountain only $65,380. The parties then went to court, both alleging that the other had breached the contract.