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Appeals Court Overturns Ruling Against Homeowners Association

By Burg Simpson

Ruling Against Homeowners Association - Denver Construction Defect Attorneys - Burg Simpson

January 29, 2018   Colorado Blog, Colorado Construction Defects

The non-delegable duty doctrine is simple enough: when one person, say a homebuilder, renders services which it should recognize as necessary for the protection of third persons, say ensuring construction is done in a good and workmanlike manner and in accordance with all applicable plans, specifications, and building codes for home buyers, the builder cannot escape responsibility by blaming others, say subcontractors, it hired to perform the construction.

Metropolitan Homes Inc. discovered this the hard way in late 2017 when the Colorado Court of Appeals ruled unanimously against the general contractor in 9300 E. Florida Ave. v. Metropolitan Homes, a construction defect appeal Burg Simpson Colorado attorney Leslie A. Tuft argued successfully.  Although Colorado has long recognized non-delegable duties, the 9300 E. Florida decision marks the first time Colorado’s appellate courts have addressed the application of non-delegable duty principles in the home construction context.

9300 E. Florida also confirms that construction defects litigation can be a particularly complex area of law no homeowner should undertake without the guidance of an experienced construction defect law firm.

The Troubled History of 9300 E. Florida Ave.

In August 2006, after the economic downturn crippled its original developer, the 9300 E. Florida Ave. condominium project landed in the care of a receiver. While construction had been completed on some units, many others were left unfinished or not even begun. The court at the time ordered the receiver to “‘take physical possession of, manage, operate, complete construction of, improve and protect’ the project.”  The receiver hired Metropolitan Homes, which was charged with not only finishing development of the project, but also correcting any existing defects.

Unfortunately, construction defects were eventually discovered by the homeowners association, 9300 E. Florida Ave. Homeowners Association, which eventually had to file a construction defect lawsuit against Metropolitan and others.  The Association resolved its claims against all parties except Metropolitan, which maintained that it bore no responsibility for the defects.

According to the Court of Appeals, the trial court agreed with Metropolitan, dismissing the Association’s claims because “Metropolitan never agreed to build the remainder of the project, but only agreed to assist the receiver by assuming a ‘supervisory’ role. Regarding the [Association’s] negligence and negligent repair claims, the trial court decided that Metropolitan did not owe the HOA a non-delegable duty of care to construct the project non-negligently…because it never agreed to build the project.”  The trial court also ruled that the HOA couldn’t prove Metropolitan was responsible for any construction defects of its own.

Colorado Court of Appeals Steps In

On appeal, the Association argued that Metropolitan owed a duty to ensure that the project was constructed non-negligently, and that “Metropolitan assumed a non-delegable duty to ensure the project’s non-negligent construction by certifying that parts of the project were built in accordance with the building code.” The Association further maintained that Metropolitan was vicariously liable for the negligence of the contractors it hired.

The Court of Appeals agreed with Association, concluding that “when ‘a general contractor agrees with the owner of property to perform a specific task, he may not, by hiring an independent contractor to perform that task, escape liability . . . for damages sustained by the owner which result from the negligence of the independent contractor.”  And, “Because this duty [to ensure that the project was constructed non-negligently] is non-delegable, Metropolitan is responsible for its own negligence (if any), including its supervision of its allegedly-negligent subcontractors.”

What Does This Mean For Colorado Homeowners And Homeowners Associations?

The 9300 E. Florida Ave. decision officially extends the non-delegable duty principle to residential construction, preventing builders and developers from shirking their responsibility by simply outsourcing construction work to someone else. In other words, residential builders and developers can’t wash their hands of a project because they put someone else in charge of the actual construction.

If you or your homeowners association has struggled to get a developer or builder to work with them on correcting construction defects, don’t wait to get professional help. Reach out to the Colorado construction defect lawyers at Burg Simpson Colorado by calling 303-792-5595 or fill out our Free Case Evaluation form right now.

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