HERSH COMPANIES v. HIGHLINE VILLAGE ASSOC., No. 00SC74.

• Decision Date: 02 July 2001
• Docket Number: No. 00SC74.
• Citation: 30 P.3d 221
• Parties: HERSH COMPANIES INCORPORATED, a Florida corporation, f/k/a Hersh National Painting Co., Petitioner/Cross-Respondent, v. HIGHLINE VILLAGE ASSOCIATES, a California limited partnership; and Greensview Associates, a California limited partnership, Respondents/Cross-Petitioners.
• Court: Colorado Supreme Court

30 P.3d 221

HERSH COMPANIES INCORPORATED, a Florida corporation, f/k/a Hersh National Painting Co., Petitioner/Cross-Respondent, v. HIGHLINE VILLAGE ASSOCIATES, a California limited partnership; and Greensview Associates, a California limited partnership, Respondents/Cross-Petitioners.

No. 00SC74.

Supreme Court of Colorado, En Banc.

July 2, 2001.

Rehearing Denied September 9, 2001.

Faegre & Benson LLP, J. David Arkell, Jessica F. Toll, Denver, CO, Attorneys for Petitioner/Cross-Respondent.

Silver & DeBoskey P.C., Joe L. Silver, Martin D. Beier, Denver, CO, Attorneys for Respondents/Cross-Petitioners.

Justice COATS delivered the Opinion of the Court.

Hersh Companies Inc., the defendant in the underlying action, sought review of the court of appeals' decision in Highline Village Associates v. Hersh Cos. Inc., 996 P.2d 250 (Colo.App.1999), by writ of certiorari. The court of appeals reversed the summary judgment order entered by the trial court, which concluded that the plaintiffs' breach of warranty and breach of contract claims arising out of an allegedly defective paint job were governed by the statute of limitations for actions against contractors, § 13-80-104, 5 C.R.S. (2000), and that the period for commencing such actions had expired. The court of appeals agreed that all of the claims were governed by section 13-80-104 but reversed and remanded for a determination whether the limitations period had been tolled by operation of the "repair doctrine" while Hersh attempted to repair the allegedly defective work. Because the repair doctrine does not apply to either the contract or warranty claims, but the warranty claims were actually governed by a different limitations period and were not yet barred, the judgment of the court of appeals is reversed in part, and affirmed in part.

I.

The plaintiffs in the underlying action, Highline Village Associates and Greensview Associates, entered into separate contracts with Hersh Companies Inc. in March 1992 to repaint the exteriors of their respective apartment complexes. Both painting contracts guaranteed Hersh's work against defects in material and workmanship for five years.¹

Hersh began work on both projects in June 1992, completed the work in August 1992, and received final payment in September 1992. The plaintiffs first expressed dissatisfaction with the work in January 1993 after noticing that paint was beginning to peel in certain areas. Hersh repainted the areas complained of on various occasions while maintaining that it was not responsible for the peeling problem. On September 13, 1995, the plaintiffs notified Hersh of additional paint failures and again requested repairs pursuant to the contractual guarantees. On this occasion, however, Hersh refused to perform any further work on the basis that the peeling problem was not caused by paint or services provided by Hersh.

On October 23, 1996, the plaintiffs filed their complaint against Hersh for breach of contract and breach of express warranties.² Hersh moved for summary judgment on the ground that all of the plaintiffs' claims were governed by section 13-80-104, the statute of limitations applicable to construction contracts, under which a claim arises at the time the claimant discovers or in the exercise of reasonable care should have discovered the physical manifestations of the defect causing injury, and is barred if not commenced within two years of its accrual. Because the plaintiffs' claims had accrued at least by January 1993, at which time plaintiffs first expressed dissatisfaction with the work, Hersh contended that the claims were barred by the statute of limitations when brought in October 1996. The district court agreed, granting summary judgment in favor of Hersh as to both the breach of contract and breach of warranty claims.

The court of appeals reversed, agreeing that section 13-80-104 was the governing statute of limitations but finding genuine issues of material fact concerning whether the statute of limitations period should have been tolled under the "repair doctrine." Citing cases from other jurisdictions, including the federal district of Colorado, the court of appeals described the doctrine with approval as an equitable tolling of the statute of limitations triggered by a contractor's undertaking repair efforts with an express or implied representation that those efforts will remedy the defect. In light of its approval of the repair doctrine, the court of appeals remanded the case for findings bearing upon whether Hersh expressly or impliedly represented that its repair efforts would remedy the defect, and whether the plaintiffs reasonably relied upon those representations in deciding not to institute legal action within the time period dictated by the statute of limitations. Hersh's petition for certiorari followed.³

II.

Well-settled rules of statutory construction aid in the determination of which statute of limitations governs a given matter. As with other statutes, statutes of limitations must be construed so as to ascertain and effectuate the intent of the General Assembly. Homestake Enters., Inc. v. Oliver, 817 P.2d 979, 981-82 (Colo.1991). Statutes of limitations serve to promote justice, discourage unnecessary delay, and forestall the pursuit of stale claims. Dean Witter Reynolds, Inc. v. Hartman, 911 P.2d 1094, 1096 (Colo. 1996). When more than one statute of limitations could apply to a particular action, the most specific statute controls over more general, catch-all statutes of limitations. City & County of Denver v. Gonzales, 17 P.3d 137, 140 (Colo.2001) (employing various rules of statutory construction to determine which of two applicable statutes of limitations governed); Persichini v. Brad Ragan, Inc., 735 P.2d 168, 172-73 (Colo.1987). In determining whether a claim falls within the purview of a particular statute of limitations, consideration should be given to "the nature of the right sued upon and not necessarily the particular form of action or the precise character of the relief requested." Id. at 172.

In general, breach of contract or warranty actions must be filed within the limitations period set forth at section 13-80-101, 5 C.R.S. (2000), which provides in relevant part:

(1) The following civil actions, regardless of the theory upon which suit is brought, or against whom suit is brought, shall be commenced within three years after the cause of action accrues, and not thereafter:

(a) All contract actions, including personal contracts and actions under the "Uniform Commercial Code". . . .

Claims for breach of contract or warranty accrue upon discovery of the breach or on the date when, in the exercise of reasonable diligence, the breach should have been discovered. § 13-80-108(6); see also Goeddel v. Aircraft Fin., Inc., 152 Colo. 419, 424, 382 P.2d 812, 815 (1963)

("[A] claim for relief in actions arising out of non-performance of contract obligations accrues at the time of the failure to do the thing required to be done under the contract.").

With regard specifically to claims concerning any deficiency in design, planning, supervision, inspection, construction, or observation of construction of any improvement to real property, section 13-80-104 (the "contractors' statute"), provides a separate limitations period and accrual formula:

Limitation of actions against architects, contractors, builders or builder vendors, engineers, inspectors and others. (1)(a) Notwithstanding any statutory provision to the contrary, 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 shall be brought within the time provided in section 13-80-102 after the claim for relief arises, and not thereafter, but in no case shall such an action be brought more than six years after the substantial completion of the improvement to the real property, except as provided in subsection (2) of this section.

(b) A claim for relief arises under this section at the time the claimant or the claimant's predecessor in interest 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.

(c) Such actions shall include any and all actions in tort, contract, indemnity, or contribution, or other actions for the recovery of damages for:

(I) Any deficiency in the design, planning, supervision, inspection, construction, or observation of construction of any improvement to real property; or (II) Injury to real or personal property caused by any such deficiency; or (III) Injury to or wrongful death of a person caused by any such deficiency.

In this case, the plaintiffs' complaint set forth claims for breach of contract, alleging among other things that Hersh failed to properly prime the wood for painting, and for breach of the express warranties, which guaranteed that the work would be free from defect for five years and that Hersh would repair or replace any such work that became defective during the term of the guarantee. The court of appeals held that all claims were governed by the contractors' statute and accrued upon the first manifestation of the physical defect — the peeling paint — which it concluded had occurred in January 1993. However, the plain language of section 13-80-104 purports only to limit certain types of actions against the persons protected by the statute. § 13-80-104(2)(b); Homestake Enters., 817 P.2d at 983.

Although Hersh may fall within the class of defendants protected by the contractors' statute⁴ — contractors engaged in the design, planning, supervision, inspection, construction, or observation of construction of any improvement to real property — not all of the claims against Hersh are properly characterized as actions to which the statute applies....