United Water & Sanitation Dist. v. Geo-Con, Inc.

• Decision Date: 21 September 2020
• Docket Number: Civil Action No. 18-cv-03241-PAB-SKC
• Citation: 488 F.Supp.3d 1052
• Parties: UNITED WATER AND SANITATION DISTRICT, Plaintiff, v. GEO-CON, INC., Defendant.
• Court: U.S. District Court — District of Colorado

488 F.Supp.3d 1052

UNITED WATER AND SANITATION DISTRICT, Plaintiff,

v.GEO-CON, INC., Defendant.

Civil Action No. 18-cv-03241-PAB-SKC

United States District Court, D. Colorado.

Signed September 21, 2020

Justin T. Winquist, Lars Henrik Fuller, Laurin D. Quiat, Baker & Hostetler, LLP, Denver, CO, for Plaintiff.

Jerome M. Joseph, Shae Ashley Steven, Vincent Joseph Wegher, Allen & Curry, P.C., Denver, CO, for Defendant.

ORDER

PHILIP A. BRIMMER, Chief United States District Judge

This matter is before the Court on defendant Geo-Con, Inc.’s [Re-filed] Motion to Dismiss Complaint [Docket No. 79]. The Court has jurisdiction pursuant to 28 U.S.C. § 1332.

I. BACKGROUND

This case arises out of the construction of a "slurry wall" for a water impoundment in Adams County, Colorado. A slurry wall is "a civil engineering technique used to build concrete walls in areas of soft earth close to open water, or with a high groundwater table." Docket No. 3 at 5, ¶ 7. Because slurry walls can act as a water barrier, they are used in the construction of water reservoirs. Id. , ¶¶ 8-9. A slurry wall must be "key[ed]" or "tie[d]" into the bedrock in order to be an effective water barrier. Id. , ¶ 8. Accordingly, a slurry wall that will be used as a water barrier must be designed and constructed deep enough to key into the bedrock. Id.

On or about December 11, 2002, Silver Peaks Metropolitan District No. 1, an entity that owned Brannan Pit #28 (the "pit") in Adams County, entered into a contract with defendant Geo-Con, Inc. to construct a slurry wall at the pit Id. , ¶ 9. The purpose of the slurry wall was to create a water reservoir at the pit. Id. The slurry wall contract initially included certain specifications for how deep the slurry wall would need to be constructed to properly key into the pit's bedrock. Id. , ¶ 10. During construction, the parties realized that a deeper slurry wall would be required. Id. at 6, ¶ 11. The parties executed change orders to the contract to add "extra key depth" to the slurry wall. Id. , ¶ 13. "Sometime thereafter," Geo-Con "ostensibly" completed the slurry wall to contract specifications, including the deeper key depth. Id. at 6, ¶ 14.

Silver Peaks subsequently assigned its interests in, among other things, the slurry wall project to plaintiff United Water and Sanitation District. Id. , ¶ 15. In mid-2017, United Water discovered that the slurry wall was leaking. Id. , ¶ 16. On or about November 1, 2017, United Water received an engineering report indicating that the slurry wall had been incompletely constructed. Id. , ¶ 18. United Water's investigation revealed that the slurry wall was inadequately keyed into bedrock in certain places. Id. at 7, ¶ 20.

On November 14, 2018, United Water filed this lawsuit against Geo-Con and Geo-Solutions, Inc. in the District Court for Adams County, Colorado. Docket No. 3 at 10. Geo-Solutions, Inc. subsequently removed the case to this Court. Docket No. 1.¹ United Water alleges that Geo-Con failed to complete construction of the slurry wall as called for in the contract. Docket No. 3 at 7, ¶ 20. United Water further alleges that Geo-Con's failure to key the slurry wall into bedrock means that the slurry wall project "never reached substantial completion." Id. , ¶ 27. United Water brings claims for relief against Geo-Con for (1) breach of contract, (2) promissory estoppel, and (3) unjust enrichment. Id. at 8-10, ¶¶ 32-53.

On October 3, 2019, Geo-Con filed this motion to dismiss. Docket No. 79. Geo-Con argues that United Water's claims are barred by Colorado's statute of repose. Id. at 12-13. Geo-Con also argues that the promissory estoppel and unjust enrichment claims fail because the subject matter of those claims is covered by the slurry wall contract. Id. at 13-15. United Water filed a response, Docket No. 86, and Geo-Con filed a reply. Docket No. 88.

II. LEGAL STANDARD

To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint must allege enough factual matter that, taken as true, makes the plaintiff's "claim to relief ... plausible on its face." Khalik v. United Air Lines , 671 F.3d 1188, 1190 (10th Cir. 2012) (citing Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged–but it has not shown–that the pleader is entitled to relief." Ashcroft v. Iqbal , 556 U.S. 662, 679, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal quotation marks and alteration marks omitted); see also Khalik , 671 F.3d at 1190 ("A plaintiff must nudge [his] claims across the line from conceivable to plausible in order to survive a motion to dismiss." (quoting Twombly , 550 U.S. at 570, 127 S.Ct. 1955 )). If a complaint's allegations are "so general that they encompass a wide swath of conduct, much of it innocent," then plaintiff has not stated a plausible claim. Khalik , 671 F.3d at 1191 (quotations omitted). Thus, even though modern rules of pleading are somewhat forgiving, "a complaint still must contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory." Bryson v. Gonzales , 534 F.3d 1282, 1286 (10th Cir. 2008) (alteration marks omitted).

III. ANALYSIS

A. Statute of Repose

Geo-Con moves to dismiss all of United Water's claims as barred by the statute of repose in the Colorado Construction Defect Action Reform Act ("CDARA"), Colo. Rev. Stat. § 13-80-104(1)(a). Docket No. 79 at 12-13.

"A statute of repose ... puts an outer limit on the right to bring a civil action," which is measured "from the date of the last culpable act or omission of the defendant." CTS Corp. v. Waldburger , 573 U.S. 1, 8, 134 S.Ct. 2175, 189 L.Ed.2d 62 (2014). In this way, statutes of repose differ from statutes of limitations, which are based on the date when the claim accrued. Id. at 7, 134 S.Ct. 2175. "Statutes of repose effect a legislative judgment that a defendant should be free from liability after the legislatively determined period of time." Id. at 9, 134 S.Ct. 2175 (quotation omitted).

CDARA applies to "all actions against any architect, contractor, builder or builder vendor, engineer, or inspector performing or furnishing the design, planning, supervision, inspection, construction, or observation of construction of any improvement to real property." Colo. Rev. Stat. § 13-80-104(1)(a). CDARA contains both a statute of limitations and a statute of repose. The statute of limitations requires any action to be brought "within the time provided in [§ 13-80-102]" – generally speaking, two years – "after the claim for relief arises." Id. A claim "arises" when a 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." Id. § 13-80-104(1)(b)(I). This is paired with a statute of repose, which states that "in no case shall such an action be brought more than six years after the substantial completion of the improvement to the real property." Id. § 13-80-104(1)(a) ; see, e.g. , Bush v. Roche Constructors, Inc. , 817 P.2d 608, 610 (Colo. App. 1991) (describing this portion of CDARA as "the six-year statute of repose for actions against contractors"). If six years have passed from "substantial completion"² of an improvement to real property, any claim that "arises" after that date relating to that improvement is barred under the statute of repose.

"A statute of limitations defense may be appropriately resolved on a Rule 12(b) motion when the dates given in the complaint make clear that the right sued upon has been extinguished." Sierra Club v. Oklahoma Gas & Elec. Co. , 816 F.3d 666, 671 (10th Cir. 2016) (internal quotation marks and alteration marks omitted). The complaint alleges that Geo-Con and United Water's predecessor-in-interest, Silver Peaks, entered into the contract to build the slurry wall on December 11, 2002, about ten years before the statute of repose deadline. See Docket No. 3 at 5, ¶ 9. However, the complaint is vague about when Geo-Con stopped work on the slurry wall and when Silver Peaks and/or United Water was able to begin utilizing the pit as a water reservoir. See Docket No. 3 at 6, ¶ 14 (alleging that Geo-Con "ostensibly completed" the slurry wall project "[s]ometime" after the contract, including change orders, was executed). Thus, the dates given in the complaint do not "make clear" that the statute of repose extinguishes United Water's right to bring this case. See Sierra Club , 816 F.3d at 671.

Geo-Con asks the Court to take judicial notice of certain facts, which it contends are proved by documents attached to the motion to dismiss. See Docket No. 79 at 2-7. On a motion to dismiss, courts may consider "a document central to the plaintiff's claim and referred to in the complaint ... where the document's authenticity is not in dispute." Utah Gospel Mission v. Salt Lake City Corp. , 425 F.3d 1249, 1253-54 (10th Cir. 2005). Courts may also consider "matters of which a court may take judicial notice." Tellabs, Inc. v. Makor Issues & Rights, Ltd. , 551 U.S. 308, 322, 127 S.Ct. 2499, 168 L.Ed.2d 179 (2007). These include "adjudicative facts," which are those facts "not subject to reasonable dispute" because they are either "generally known within the trial court's territorial jurisdiction" or "can be accurately and readily determined from sources whose accuracy cannot be reasonably questioned." Fed. R. Evid. 201(b). However, the Court has "broad discretion in determining whether or not to accept materials beyond the pleadings." Lowe v. Town of Fairland, Okla. , 143 F.3d 1378, 1381 (10th Cir. 1998). And, when a court takes judicial notice of documents, it may do so only to "show their contents, not to prove the truth of the matters asserted therein." Tal v. Hogan , 453 F.3d 1244, 1264...