Summary of the Case
On July 24, 2014, the Colorado Court of Appeals ruled in the matter of Minturn v. Definitive Renovations, upholding the trial court’s entry of Summary Judgment in favor of Wood, Smith, Henning & Berman’s client, Definitive Renovations.
The matter arose out of a home renovation. Definitive Renovations was the general contractor for the construction project. Plaintiffs alleged that there were construction defects in the stucco work at the home. Although Plaintiffs were aware of the defects as early as March 19, 2009, they did not file suit against Definitive Renovations until March 23, 2012. Colorado’s Construction Defect Action Reform Act (“CDARA”) contains a two year statute of limitations, triggered off of manifestation of the defect.
Plaintiffs alleged that the two year statute of limitations was equitably tolled during, and/or Definitive Renovations was equitably estopped from asserting the statute of limitations defense because of, pre-litigation settlement discussions that occurred directly between Plaintiffs and Definitive Renovations’ insurance carrier. The trial court rejected Plaintiffs’ equitable tolling and equitable estoppel arguments and ruled that the case was not timely filed against Definitive Renovations. The Colorado Court of Appeal affirmed that ruling.
Why This Case Is Important
While the facts of this case clearly established that the pre-litigation settlement discussions did not “lull Plaintiffs into a false sense of security” about whether they needed file suit, this decision makes it clear that that could happen given the right circumstances and such actions would equitably estop someone from asserting an otherwise valid statute of limitations defense. This case provides very sound guidance about how to avoid the equitable estoppel argument in pre-litigation negotiations – specifically clearly communicating that no admission of liability is being made by the settlement offer and no promise of compensation should be inferred by the offer.
If you have any questions about this case or any other questions about Colorado law, please do not hesitate to contact Wood, Smith, Henning & Berman’s Colorado office.
