City & Cty. of Denver v. Bd. of Cty. Comm'r of Adams Cty.

• Docket Number: Supreme Court Case No. 22SC250
• Decision Date: 05 March 2024
• Citation: 543 P.3d 371,2024 CO 5
• Parties: CITY AND COUNTY OF DENVER, Petitioner, v. BOARD OF COUNTY COMMISSIONERS OF ADAMS COUNTY, City of Aurora, City of Brighton, and City of Thornton, Respondents.
• Court: Colorado Supreme Court

543 P.3d 371

2024 CO 5

CITY AND COUNTY OF DENVER, Petitioner,

v.BOARD OF COUNTY COMMISSIONERS OF ADAMS COUNTY, City of Aurora, City of Brighton, and City of Thornton, Respondents.

Supreme Court Case No. 22SC250

Supreme Court of Colorado.

January 29, 2024

Rehearing Denied March 5, 2024

Certiorari to the Colorado Court of Appeals, Court of AppealsCase No. 20CA1778

Attorneys for Petitioner: Wheeler Trigg O’Donnell LLP, Frederick R. Yarger, Meghan Frei Berglind, Denver, Colorado, Kaplan Kirsch & Rockwell LLP, W. Eric Pilsk, Samantha R. Caravello, Denver, Colorado

Attorneys for Respondents: Jachimiak Peterson Kummer, LLC, Mark R. Davis, Taylor A. Clapp, Lakewood, Colorado

Attorneys for Amici Curiae Chamber of Commerce of the United States of America and Colorado Chamber of Commerce: Arnold & Porter Kaye Scholar LLP, Robert Reeves Anderson, Brian M. Williams, Elizabeth M. Stonehill, Denver, Colorado

Attorney for Amici Curiae Colorado Defense Lawyers Association and Colorado Civil Justice League: Lewis Roca Rothgerber Christie LLP, Kendra N. Beckwith, Elizabeth Michaels, Denver, Colorado

En Banc

JUSTICE SAMOURdelivered the Opinion of the Court, in which CHIEF JUSTICE BOATRIGHT, JUSTICE MÁRQUEZ, JUSTICE HOOD, JUSTICE GABRIEL, and JUSTICE HART joined.

JUSTICE SAMOURdelivered the Opinion of the Court.

¶1"Once more unto the breach, dear friends, once more."William Shakespeare, King Henry the Fifth, Act 3, Sc. 1, 1.1(1600).For a Shakespearean hero, these words were a rallying cry as he propelled his troops into yet another foray with an old rival.For us, these words are a summons to settle a decades-long dispute between two Colorado jurisdictions that find themselves in merry-go-round litigation.Rather than a breach in the fortifications, however, we confront a breach of contract.We must decide whether, under Colorado law, Adams County("Adams") could bring a breach-of-contract claim against the City and County of Denver("Denver") in 2018, even though Adams learned, more than twenty years earlier, of Denver’s breach.And so, unto the breach we plunge.

¶2 There is little factual disagreement between the parties.Both agree that they entered into the 1988 Intergovernmental Agreement ("IGA"), which required Denver to install a noise-monitoring system and to use it to calculate noise levels surrounding the soon-to-open Denver International Airport ("DIA").Both agree that, in contravention of its contractual mandate, Denver instead installed a noise-modeling system, which it has used to report noise data ever since DIA opened.And, importantly, both agree that Adams knew, no later than 1995, that Denver was using a modeling system (and not a monitoring system).Where Adams and Denver part ways is on the legal question at the heart of this breach-of-contract case: Under the applicable three-year statute of limitations, when should Adams have brought this action?More pointedly: Did Adams push off from the gate too late, missing the takeoff window within which to bring its claim?

¶3 Of course, plaintiffs must bring a claim within the governing limitations period or else relinquish it.But a claim cannot reach its expiration date if the statute-of-limitations clock never starts ticking in the first place.That clock begins to tick on the date a claim accrues.Thus, the dispositive question here is a narrow one: When did Adams’ breach-of-contract claim accrue?

¶4 Not surprisingly, the parties advance opposing accrual theories.Denver contends that the claim accrued no later than 1995, as Adams was aware by that time that Denver had installed a modeling system (instead of a monitoring system) and was using it to calculate and report noise data.Adams, by contrast, asks us to embrace the court of appeals’ determination that the claim accrued in 2014, when Adams learned that Denver’s modeling system was underreporting noise data.¹Bd. of Cnty. Comm’rs v. City & Cnty. of Denver, 2022 COA 30, ¶ 23, 511 P.3d 692, 701("Bd. of Cnty. Comm’rs II").It was only then, the court of appeals reasoned, that Adams "became aware it suffered damages" and had " ‘certainty of harm and incentive to sue.’ "Id. at ¶¶ 21, 23, 511 P.3d at 700–01(quotingBennett Bear Creek Farm Water & Sanitation Dist. v. City & Cnty. of Denver, 907 P.2d 648, 654(Colo. App.1995), aff’d in part and rev’d in part,928 P.2d 1254(Cold.1996)).

¶5We conclude that the court of appeals erred by minting and applying a damages-based accrual rule.The court of appeals’ holding is inconsistent with the plain and ordinary meaning of the language of Colorado’s accrual statute, see§ 13-80-108(6), C.R.S.(2023), the relevant case law, and the public policy considerations that underpin statutes of limitations.To the extent the court of appeals leaned on the "certainty of harm and incentive to sue" language from Bennett Bear Creek, today we clarify that this part of Bennett Bear Creek was mere dictum.In any event, that opinion is not binding on us.

¶6 Because Colorado law dictates that a breach-of-contract claim accrues at the time the breach "is discovered or should have been discovered by the exercise of reasonable diligence,"§ 13-80-108(6), and because Adams learned no later than 1995 that Denver breached the IGA by using a modeling system rather than a monitoring system, Adams’ claim against Denver is barred by the applicable three-year statute of limitations.Therefore, we reverse the judgment of the court of appeals and dismiss Adams’ complaint.

I.Facts and Procedural History

¶7 After several years of intense negotiations in the 1980s, Denver and Adams agreed that Denver could annex fifty-five square miles of land located in Adams County to build DIA.The parties' eventually executed the IGA which, as relevant here, conditioned the annexation on strict airport noise restrictions.

¶8 Article V of the IGA governs "Noise Control and Mitigation."This provision sets Noise Exposure Performance Standards ("NEPS") at several locations surrounding the airport, known as "NEPS points."One of the noise level benchmarks is the "Leq(24)," which represents twenty-four-hour noise averages at given NEPS points.

¶9 To track NEPS compliance, the IGA imposes two pertinent duties on Denver.The first, under Section 5.4, is a one-time obligation to "install and operate a noise monitoring system capable of recording noise levels sufficient to calculate … Leq(24) values for the purpose of monitoring and enforcing the NEPS."The second, under Section 5.4.3, is a recurring obligation to "calculate’ on an annual basis … the actual Leq(24) values … in order to determine compliance … with the NEPS."

¶10 The IGA specifies maximum noise exposure levels.If the Leq(24) value exceeds the limit at any of the NEPS points by more than two decibels, the IGA considers the exceedance a "Class II" violation.The IGA allows Denver to "cure" such violations within a given period.If Denver fails to do so, Adams can sue for liquidated damages of $500,000 per violation.

¶11 At the time of the IGA’s signing in 1988, there was no noise-monitoring system in existence capable of satisfying the requirements of the IGA, Therefore, Denver hired an environmental and transportation consulting firm to develop a compliant system.However, in 1991, Denver rejected that firm’s initial proposal and informed Adams that it would not install the microphone-based noise monitoring system required by the IGA.Denver subsequently, developed a noise-modeling system instead.The modeling system, referred to as "ARTSMAP," uses flight paths and other real-world data to forecast noise levels from flights into and out of DIA.However, ARTSMAP lacks the ability to directly record and measure actual noise levels at NEPS points.

¶12 In 1992, Adams filed a lawsuit objecting to Denver’s use of ARTSMAP and seeking to compel installation of a noise-monitoring system.Soon thereafter, Denver learned of a company that could develop a noise-monitoring system capable of distinguishing between aircraft and non-aircraft noise.Since it could install and operate such a system, Denver argued the lawsuit was moot.The district court agreed and dismissed Adams’ complaint in 1993 without prejudice.Then, in 1995, the year DIA opened, Denver installed the IGA-compliant noise-monitoring system referred to as "ANOMS."

¶13 From the beginning, though, Denver exclusively used ARTSMAP to calculate and report NEPS values.While it also published data from ANOMS, Denver never used the monitoring system to calculate and enforce NEPS.

¶14 In 1996, after the first year of the airport’s operations, Denver submitted the first annual report required by the IGA.The report included NEPS-compliance calculations for 1995-1996 using only the ARTSMAP system.In a separate table, the report compared raw data from ARTSMAP and ANOMS.The report, however, did not use ANOMS data to document NEPS exceedances; nor did it show ANOMS readings from the NEPS points.Denver provided similar tables in its two subsequent annual reports, which continued to reflect discrepancies—albeit minor ones—between the raw data churned out by ARTSMAP and ANOMS.According to the first three annual reports, the systems seemed to be moving toward consistency.

¶15 In 1998, Adams brought a second lawsuit against Denver.This time, Adams sought liquidated damages for uncured Class II NEPS violations and an order requiring Denver to achieve NEPS compliance.(Recall that the first lawsuit, which was brought in 1992, was over Denver’s failure to use a noise-monitoring system.)Adams relied exclusively on ARTSMAP values from the annual reports to identify violations and calculate damages.And Adams did not challenge Denver’s installation and use of ARTSMAP in that action, even though that conduct violated the IGA’s provision requiring that a monitoring system be used for NEPS enforcement.

¶16 Adams’ 1998 lawsuit proceeded to trial in 1999.Notably, during the trial, Adams’ attorney stated that Adams "a...