HHMR Meets with the Construction Defect Claim Manager Association regarding Colorado HB 10-1394

On June 10, 2010, I had the privilege of speaking to members of the Construction Defect Claim Managers Association (“CDCMA”) in Irvine, California.

The CDCMA’s purpose is to foster communication and trust amongst its membership and to permit continuing education, leading to effective and efficient claims handling methods and mechanisms for the benefit of insureds, insurers, claimants, attorneys, the legislature, the judiciary and all of those who are involved in construction defect claims handling and litigation. The members that make up the CDCMA include leading insurance companies that underwrite insurance for construction professionals in Colorado and across the country.

The topic of discussion for the June 10th meeting was Colorado’s recently enacted House Bill 10-1394, regarding  insurance carriers' duties to defend construction professionals in relation to construction defect claims and the invalidation of certain types of prior work exclusions. I was joined at the meeting by Robert Ferm and Cathleen Heintz of Hall & Evans, LLC. Together we discussed the recent Colorado case law and legislative process that led to the creation and enactment of House Bill 10-1394. Additionally, we addressed the concerns of the insurance companies regarding the impact of this bill.

While the legislation is new and will certainly be subject to interpretation by the courts, much of the language causing concern within the insurance community was derived from existing Colorado case law and is simply a return to the status quo prior to the holdings in General Security Indemnity Company of Arizona v. Mountain States Mutual Casualty Company, 205 P.3d 529 (Colo. App. 2009) and Greystone Const., Inc. v. National Fire & Marine Ins. Co., 649 F.Supp. 2d 1213 (D. Colo. 2009).

For additional information regarding Colorado construction litigation, please contact David M. McLain at (303) 987-9813 or by e-mail at mclain@hhmrlaw.com.