YACHT CLUB II HOME. ASSOC. v. AC EXCAVAT.

• Decision Date: 20 November 2003
• Docket Number: No. 02CA0645.,02CA0645.
• Citation: 94 P.3d 1177
• Parties: YACHT CLUB II HOMEOWNERS ASSOCIATION, INC., Plaintiff-Appellant, v. A.C. EXCAVATING; Brady Son Bonded Roof Co.; Dirt-N-All Excavating; NDF Company; Formex Concrete Forming, Inc.; Frank's Finish Grading, Inc.; Hesterly Holland Construction, LLC; K.J. Woodworks, Ltd.; Rocky Mountain Flatwork, Inc.; Stevens Excavating, Inc.; Watren Concrete Forming, Inc.; and Yeager Concrete Corporation, Defendants-Appellees.
• Court: Colorado Court of Appeals

94 P.3d 1177

YACHT CLUB II HOMEOWNERS ASSOCIATION, INC., Plaintiff-Appellant, v. A.C. EXCAVATING; Brady Son Bonded Roof Co.; Dirt-N-All Excavating; NDF Company; Formex Concrete Forming, Inc.; Frank's Finish Grading, Inc.; Hesterly Holland Construction, LLC; K.J. Woodworks, Ltd.; Rocky Mountain Flatwork, Inc.; Stevens Excavating, Inc.; Watren Concrete Forming, Inc.; and Yeager Concrete Corporation, Defendants-Appellees.

No. 02CA0645.

Colorado Court of Appeals, Div. III.

November 20, 2003.

Certiorari Granted July 26, 2004.

Holland & Hart, LLP, Joseph W. Halpern, Teresa D. Locke, Denver, Colorado; McKenzie Rhody & Hearn, LLC, T. Cass McKenzie, Michael A. Hearn, Andrew M. Karr, Denver, Colorado, for Plaintiff-Appellant.

Messner & Reeves, LLC, John K. Shunk, Denver, Colorado, for Defendant-Appellee A.C. Excavating.

Harris Karstaedt Jamison & Powers, A. Peter Gregory, James G. Gaspich, Englewood, Colorado, for Defendants-Appellees Brady & Son Bonded Roof Co., Formex Concrete Forming, Inc., Frank's Finish Grading, Inc., Hesterly Holland Construction, LLC, and Watren Concrete Forming, Inc.

Markusson, Green & Jarvis, P.C., H. Keith Jarvis, David B. Bush, Denver, Colorado, for Defendant-Appellee Dirt-N-All Excavating.

Burg Simpson Eldredge Hersh & Jardine, P.C., Peter W. Burg, Kathy Hix, David K. Teselle, Englewood, Colorado, for Defendant-Appellee NDF Company.

Ray Lego & Associates, Janet S. Bouffard, Greenwood Village, Colorado, for Defendants-Appellees KJ Woodworks, Ltd. and Rocky Mountain Flatwork, Inc.

Fowler, Schimberg & Flanagan, P.C., Daniel M. Fowler, Steven W. Fox, Denver, Colorado, for Defendant-Appellee Stevens Excavating, Inc.

Hall & Evans, LLC, Bruce A. Menk, Denver, Colorado, for Defendant-Appellee Yeager Concrete Corporation.

Opinion by Judge DAILEY.

In this construction defects case, plaintiff, Yacht Club II Homeowners Association, Inc. (HOA), appeals the judgment entered in favor of defendants, A.C. Excavating; Brady & Sons Bonded Roof Co.; Dirt-N-All Excavating; NDF Company; Formex Concrete Forming, Inc.; Frank's Finish Grading, Inc.; Hesterly Holland Construction, LLC; K.J. Woodworks, Ltd.; Rocky Mountain Flatwork, Inc.; Stevens Excavating, Inc.; Watren Concrete Forming, Inc.; and Yeager Concrete Corporation (collectively, subcontractors). We reverse and remand for further proceedings.

The issues on appeal concern the HOA's right to pursue claims of negligence against subcontractors for the following problems encountered in the individual units and common areas of a townhome development: heaving basement floors, cracking concrete foundations and slabs, reverse sloping driveways, leaking windows and doors, slanted floors, damaged drywall, standing water in garages, movement of framing, water penetration of the roofs and underlying structures, water staining, wet insulation, decaying floor sheathing, and deteriorating external trim. Attributing these problems to various architectural, grading, drainage, structural, and concrete flatwork defects, as well as to improper installation of windows, doors, roof trusses, and shingles, the HOA instituted the present action against (1) the developer and general contractor for breach of implied warranty, breach of express warranty, violation of the Colorado Consumer Protection Act, and negligence; and (2) subcontractors for negligence.

The HOA settled with the developer, general contractor, and other subcontractors not parties to this appeal. As pertinent to the remaining subcontractors, the trial court granted a motion for partial summary judgment against the HOA, on the ground that it lacked standing to assert claims for damages to individually owned units. When the HOA requested reconsideration or, in the alternative, leave to amend to add individual unit owners as plaintiffs, the trial court denied the request as moot. The court relied on its interim partial summary judgment ruling that barred the HOA's negligence claims, even in relation to common areas, based on the economic loss rule, because the HOA was a third-party beneficiary of subcontractors' warranties to the general contractor.

Because negligence was the only claim the HOA alleged against the subcontractors, the trial court entered judgment in favor of the subcontractors.

I.

The HOA contends that the trial court erred in concluding that it lacked standing to pursue claims for construction defects damage to individual townhome units. We agree.

Although the trial court determined that its standing ruling had become moot in light of its economic loss ruling, we choose to address the standing issue because of its jurisdictional nature. See Ajay Sports, Inc. v. Casazza, 1 P.3d 267, 272 (Colo.App.2000).

In Villa Sierra Condominium Ass'n v. Field Corp., 787 P.2d 661, 667 (Colo.App.1990), a division of this court indicated that a condominium association lacked standing to assert claims on behalf of condominium unit owners against a builder-vendor for damages to individual units caused by construction defects.

In 1991, the General Assembly enacted the Colorado Common Interest Ownership Act (CCIOA), § 38-33.3-101, et seq., C.R.S.2003. Under the CCIOA, a unit owners association is empowered, "subject to the provisions of [its] declaration," to "[i]nstitute, defend, or intervene in litigation or administrative proceedings in its own name on behalf of itself or two or more unit owners on matters affecting the common interest community." Section 38-33.3-302(1)(d), C.R.S.2003.

Here, the trial court determined that the HOA lacked standing to pursue damage claims on behalf of individual unit owners under Villa Sierra. Further, the court determined that the HOA could not assert standing under the CCIOA because the HOA's declaration excluded individual units from the common interest community.

On appeal, the subcontractors concede that the court erred in its construction of the HOA's declaration. Nonetheless, they contend that the CCIOA does not confer standing upon the HOA to raise damage claims related to individual units. Claims of that nature are not, they argue, "matters affecting the common interest community." In support of this argument, they direct our attention to differences in the association's and the unit owners' rights and obligations with respect to the "common elements" of, and the individual units in, a common interest community, as set out in § 38-33.3-307(1), C.R.S.2003 (except as otherwise provided in the declaration or by statute, "the association is responsible for maintenance, repair, and replacement of the common elements, and each unit owner is responsible for maintenance, repair, and replacement of such owner's unit"). We are not persuaded.

The interpretation of a statute is a question of law. See Ryals v. St. Mary-Corwin Reg'l Med. Ctr., 10 P.3d 654, 659 (Colo.2000). Our task in interpreting a statute is to give effect to legislative intent. Preston v. Dupont, 35 P.3d 433, 437 (Colo.2001).

We presume that, in enacting a statute, the legislature was aware of prior decisional law, Colorado Springs Disposal v. Indus. Claim Appeals Office, 58 P.3d 1061, 1063 (Colo.App.2002), and we accept the intent of the drafters of a uniform act as the General Assembly's intent when it adopts a uniform act. See Copper Mountain, Inc. v. Poma of Am., Inc., 890 P.2d 100, 106 (Colo.1995).

We construe words and phrases that have acquired a technical or particular meaning, whether by legislative definition or otherwise, accordingly. See § 2-4-101, C.R.S.2003; Pierson v. Black Canyon Aggregates, Inc., 48 P.3d 1215, 1219 (Colo.2002).

If the meaning of a statute is clear and unambiguous, we apply the statute as written. See Slack v. Farmers Ins. Exchange, 5 P.3d 280, 284 (Colo.2000).

Here, the General Assembly enacted the CCIOA in 1991, following the division's decision in Villa Sierra. Section 38-33.3-302(1)(d) was patterned after the Uniform Common Interest Ownership Act (UCIOA), § 3-102(d) (1982), whose purpose was to make "clear that the association can sue or defend suits even though the suit may involve only units as to which the association itself has no ownership interest." UCIOA § 3-102 cmt. 3, at 96; see Jerry C.M. Orten et al., The Colorado Common Interest Ownership Act, 21 Colo. Law. 645, 653 (Apr.1992)(§ 38-33.3-302(1)(d) "follows the national trend acknowledging the representative capacity of the association and ends substantial difficulty on the standing issue in Colorado[,] ... enabl[ing] the association to represent more effectively its owners in such matters as construction defects, ... avoid [ing] the necessity of assignment of claims, powers of attorney or class actions in many circumstances, [and] thereby simplifying and making more practical the prompt action in the association's and owners' common interests").

By its terms, the plain language of § 38-33.3-302(1)(d) permits an association to bring an action not only on its own behalf but also on behalf of "two or more unit owners." The only limitation on an action on behalf of unit owners is that the matter be one "affecting the common interest community."

Under the CCIOA, individual units are a part of the "common interest community." See § 38-33.3-103(30), C.R.S.2003 (defining "unit" as "a physical portion of the common interest community which is designated for separate ownership or occupancy and the boundaries of which are described in or determined from the declaration").

Recognizing the underlying purpose of § 38-33.3-302(1)(d), giving the phrase "common interest community" the meaning ascribed to it by the CCIOA, and realizing that an exception should not be read into a statute that its plain language does not suggest, warrant, or mandate, see Town of Telluride v. Lot Thirty-Four Venture, L.L.C., 3 P.3d 30, 35 (Colo.2000), we conclude that § 38-33.3-302(1)(d) confers standing upon associations to pursue damage claims on behalf of two or more unit owners with respect to matters affecting their...