City of Aurora, Colorado v. Bechtel Corp., 77-1858

Decision Date29 May 1979
Docket NumberNo. 77-1858,77-1858
Citation599 F.2d 382
PartiesCITY OF AURORA, COLORADO, and the City of Colorado Springs, Colorado, Plaintiffs-Appellants, v. BECHTEL CORPORATION, Defendant-Appellee.
CourtU.S. Court of Appeals — Tenth Circuit

Louis Johnson of Horn, Anderson & Johnson, Colorado Springs, Colo. (Leland M. Coulter, City Atty. and Louise L. Edmonds, Asst. City Atty., Aurora, Colo., on the brief), for plaintiffs-appellants.

Charles H. Haines, Jr., Denver, Colo. (Gary L. Holdeman, Denver, Colo., on the brief), of Grant, McHendrie, Haines & Crouse, Denver, Colo., for defendant-appellee.

Before McWILLIAMS, BARRETT, Circuit Judges, and MILLER, Judge, United States Court of Customs and Patent Appeals. *

BARRETT, Circuit Judge.

The Cities of Aurora and Colorado Springs, Colorado (Cities) appeal a grant of summary judgment in favor of Bechtel Corporation (Bechtel) based upon the bar of the statute of limitations. Jurisdiction vests by reason of diversity.

In the early 1950s, growth along the front range of the Colorado Rockies began to increase at a significant rate. As the population grew, the need for water also increased. This influx of population resulted in the formulation of various water diversion projects whereby water could be transported from the western slope of the Continental Divide of the Rocky Mountains to the more populated front range area. One such project was known as the Homestake Project.

The Homestake Project consisted of a series of watershed facilities which could collect water on the upper reaches of the Homestake Creek for storage in a reservoir located near Leadville, Colorado, at an altitude of approximately 10,000 feet. The water from this reservoir would then be transported through the Homestake Tunnel from the western slope of the Continental Divide to the eastern slope where it would be eventually stored in reservoirs located near the Cities of Aurora and Colorado Springs.

Initial ground work, in the form of geological studies, for the project began in the mid-1950s. A general adjudication of the water rights for the project was completed in 1961. See: Metropolitan Suburban Water Users Association v. Colorado River Water Conservation District, 148 Colo. 173, 365 P.2d 273 (1961). Following this adjudication, the Cities acquired the interests of others and entered into an agreement with a view toward sharing the water and the costs of construction and operation of the project.

In July of 1962, the Cities entered into a contract with Bechtel whereby Bechtel agreed to provide design engineering services and construction supervision for the project. Following Bechtel's preparation of the plans and specifications, a contract for construction of the Homestake Tunnel was let by the Cities to Smith-Quad Construction, a joint venture.

Actual construction of the tunnel began in September of 1963, with final completion in September of 1966. Water began flowing through the tunnel in 1967.

The tunnel itself is approximately five and one-half miles in length and is substantially unlined. The upstream portal of the tunnel is located at an elevation of approximately 10,040 feet, some 220 feet below the high water line of the Homestake Reservoir. The downstream portal of the tunnel lies at an elevation of 9,936 feet at the Lake Fork of the Arkansas River just slightly upstream from Turquoise Lake. Flow of water through the tunnel is regulated by means of a series of slide gates and dispersion valves. Normally, when water is flowing through the tunnel, a cone dispersion valve, located at the downstream portal, is used to regulate the quantity of water being discharged. When water is not being transported to reservoirs on the eastern slope, both a hydraulic slide gate, located at the intake portal, and a butterfly valve, located at the downstream portal, are closed. In the event that it is necessary to gain access to the tunnel for inspection or repair work, the butterfly valve is opened, while leaving the slide gate closed, so that water can drain from the tunnel. Once the water is drained, it is possible to gain access to the tunnel through a 24 inch manhole located immediately upstream from the cone dispersion valve.

In February, 1974, the superintendent of the Homestake Project was instructed to increase the flow of water through the tunnel from 50 cubic feet per second (cfs) to approximately 153 cfs. On February 22, 1974, the cone dispersion valve was opened to its maximum but a flow of only 80 cfs was obtained. The actual capacity of the tunnel, under normal conditions, is approximately 600 cfs.

Between February and June of 1974, various attempts were made to determine whether the flow reduction resulted from a malfunction of the hydraulic system at the intake slide gate, similar to one which occurred in 1968. Unfortunately, severe winter weather conditions and the need to drain the Homestake Reservoir for the expected spring run-off hindered inspection of the tunnel. Finally, on June 5th and 6th, 1974, the Cities were able to conduct tests on the hydraulic slide gate. The "(u)pstream gate was operated over (a) full range to assure that the gate was not the cause of the fluctuation. Tests pointed almost conclusively to a cave-in, as (the) gate appeared to be operating normally." (R., Vol. I, p. 81.) Preparations were made to enter the tunnel through the inspection manhole, located at the downstream portal, in order to determine the existence of blockages within the tunnel.

On June 18, 1974, a cave-in was observed approximately 10,100 feet inside the tunnel. It was determined, however, that this blockage was not of a sufficient magnitude to cause a reduction in flow to 80 cfs. Eventually, six other tunnel blockages were observed, one of which, discovered October 6, 1974, completely blocked the tunnel.

On June 29, 1976, the Cities filed suit against Bechtel alleging negligence and breach of implied warranties in the design, engineering and supervision of the project. The first claim for relief, based upon breach of implied warranties, was dismissed for failure to state a claim on which relief could be granted. Bechtel then moved for summary judgment on the remaining claim for relief contending that it was barred by the statute of limitations. Following the pleadings, depositions and memorandums of the parties, and after hearing argument on the matter, the district court granted Bechtel's motion for summary judgment holding that the two-year statute of limitations contained in 13-80-127(1), C.R.S.1973 1 applied and that the claim for relief arose on June 18, 1974 when there was "an Awareness of the existence of damage and the possibility that negligence (was) involved." (Emphasis supplied.) (R., Vol. I, p. 149.) A timely notice of appeal was filed on behalf of the Cities.

Following the district court's grant of summary judgment and the Cities' filing of their notice of appeal, the Supreme Court of Colorado handed down two opinions which held, in essence, that the special two-year statute of limitations found in 13-80-127(1), C.R.S.1973, on which the district court relied, Does not apply to claims for damages for deficiencies in the structure itself. See: Duncan v. Schuster-Graham Homes, Inc., 578 P.2d 637 (Colo.1978); Tamblyn v. Mickey & Fox, Inc., 578 P.2d 641 (Colo.1978). In so holding, the Supreme Court stated that an action for damages for deficiencies in a structure is covered by the general six-year statute of limitations found in 13-80-110, C.R.S.1973. 2

In both Duncan and Tamblyn, the plaintiffs filed their complaints within six years of the date they purchased their homes. Thus, the court was not faced with, and did not decide, the question of when a cause of action accrues for purposes of 13-80-110, C.R.S.1973. In the instant case, however, construction of the Homestake Tunnel was completed on September 30, 1966 and the Cities began using it to transport water in the Spring of 1967. Inasmuch as the complaint was not filed until June 29, 1976, more than six years from the date the Cities began using the tunnel, the question presented is: When does an action predicated upon engineering malpractice accrue for purposes of the six-year statute of limitations found in 13-80-110, C.R.S.1973?

I.

We have not found, and the parties have not presented us with, any controlling Colorado law on the subject. Neither Duncan nor Tamblyn discuss the issue. We are, therefore, faced with a situation where we must attempt to construe the law of the State of Colorado in the manner in which the Supreme Court of Colorado would, if faced with the same facts and issue. See: Burgert v. Tietjens, 499 F.2d 1 (10th Cir. 1974); Symons v. Mueller Company, 493 F.2d 972 (10th Cir. 1974); Cottonwood Mall Shopping Center, Inc. v. Utah Power & Light Company, 440 F.2d 36 (10th Cir. 1971), Cert. denied, 404 U.S. 857, 92 S.Ct. 107, 30 L.Ed.2d 99 (1971). In so doing, we may look to all resources, including decisions of other states, as well as Colorado and federal decisions, and to the general weight and trend of authority. In re Birdseye, 548 F.2d 321 (10th Cir. 1977); Julander v. Ford Motor Company, 488 F.2d 839 (10th Cir. 1973); Cottonwood Mall Shopping Center, Inc. v. Utah Power & Light Company, supra. Dicta or holdings in analogous state court decisions, while not authoritative expressions of the law of Colorado, are persuasive and entitled to consideration by this court. Estate of Goldstein v. CIR, 479 F.2d 813 (10th Cir. 1973). Of course, the views of the federal district judge in a diversity case, who is a resident of the state where the controversy arose, interpretive of a state's laws carry extraordinary force on appeal where there are no controlling state decisions providing clear precedent. Rasmussen Drilling v. Kerr-McGee Nuclear Corporation, 571 F.2d 1144 (10th Cir. 1978), cert. denied, 439 U.S. 862, 99 S.Ct. 183, 58 L.Ed.2d 171 (1978).

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