Wednesday, February 19, 2020

Colorado House Bill 20-1290 – Restriction on the Use of Failure to Cooperate Defense in First-Party


On February 7th, Representative Garnett, with Senator Fenberg as the Senate sponsor, introduced HB 20-1290, concerning the ability of an insurer to use a failure-to-cooperate defense in an action in which the insured has made a claim for insurance coverage.

If the bill were to pass, in order to plead or prove a failure-to-cooperate defense in any action concerning first-party insurance benefits, the following conditions must be met:

  1. The carrier has submitted a written request for information the carrier seeks to the insured or the insured’s representative, by certified mail;
  2. The written request provides the insured 60 days to respond;
  3. The information sought would be discoverable in litigation;
  4. The written request provides citations to the specific policy language entitling the carrier to the information requested.  A general statement of a duty to cooperate would be deemed insufficient.
  5. The insured’s failure to cooperate had made the carrier’s performance under the policy impossible;
  6. The carrier has given the insured an opportunity to cure, which must:

    • Include the furnishing of written notice to the insured of the alleged failure to cooperate, describing with particularity the alleged failure, within 30 days of the alleged failure; and
    • Allow the insured 60 days after receipt of the written notice to cure the alleged failure to cooperate.

House Bill 1290 also states that the existence of a duty to cooperate in a policy does not relieve an insurer of its duty to investigate or to comply with C.R.S. § 10-3-1104.  Finally, the Bill states that any language in a first-party insurance policy that conflicts with the Bill’s language is void as against public Policy.  If enacted, the new law would apply to any litigation that occurs on or after the applicable effective date of this act, estimated to be August 5, 2020, if the Legislative adjournment sine die is on May 6, 2020.  HB 20-1290 has been assigned to the House Judiciary Committee and but is not yet scheduled for its first hearing in committee.



For additional information about House Bill 20-1290 or the Colorado legislative session, you can reach Dave McLain at (303) 987-9813 or by e-mail at mclain@hhmrlaw.com.
  

HB 20-1046 - Private Retainage Reform - Postponed Indefinetely

On Tuesday, February 18th, the Colorado House Business Affairs & Labor Committee voted 10-0 to postpone indefinetely House Bill 1046.  If it had been enacted, HB 1046 would have required, for all for all construction contracts of at least $150,000:

  • A property owner to make partial payments to the contractor of any amount due under the contract at the end of each calendar month or as soon as practicable after the end of the month;
  • A property owner to pay the contractor at least 95% of the value of satisfactorily completed work;
  • A property owner to pay the withheld percentage within 60 days after the contract is completed satisfactorily;
  • A contractor to pay a subcontractor for work performed under a subcontract within 30 calendar days after receiving payment for the work, not including a withheld percentage not to exceed 5%;
  • A subcontractor to pay any supplier, subcontractor, or laborer who provided goods, materials, labor, or equipment to the subcontractor within 30 calendar days after receiving payment under the subcontract; and
  • A subcontractor to submit to the contractor a list of the suppliers, sub-subcontractors, and laborers who provided goods, materials, labor, or equipment to the subcontractor for the work.

The bill did not apply to contracts with public entities or to a contract concerning one multi-family dwelling of no more than 4 units or one single-family dwelling. A person who failed to make a required payment would have been required to pay 1.5% interest per month until the debt is fully paid. In a lawsuit to enforce the bill, the prevailing party iswould have been awarded attorney fees and costs. 

In response to the indefinite postponement of the Bill, the Colorado Contractors Coalition put out a announcement reading:




The Colorado Contractors Coalition | CCC announce that they will table efforts to pass HB20 1046, Private Retainage Reform stating that most of the 2020 objectives have been achieved and a path forward post the current Colorado legislative session is underway. 

 Tuesday, February 18, 2020, the House Business Affairs Committee heard a motion from Representative Valdez, primary sponsor, to postpone indefinitely the bill. Representative Kraft-Tharp, Chair thanked him for his work and that she spoke to all parties involved who have agreed to work together in the interim for a solution to this very real problem.
 

CCC and their lobby team Valdez Public Affairs are pleased with the response to HB20 1046 with much of the Colorado construction industry in support of the legislation. The work prior to the 2021 Colorado General Assembly will focus on the banking and construction development community. 

Scott Deering, ASAC Legislative Chair and CCC Vice Chair | Absolute Caulking & Waterproofing, Inc., commented “Though we hoped to celebrate the passage of HB20-1046 this year, we know that rarely is a bill passed the first year it is introduced. We accomplished a great deal this session including unprecedented industry support for this effort. Members of the CO legislature and stakeholders have committed to continue to work with us on this very important issue. Our goal remains to allow subcontractors to be able to invest their earned capital into their businesses.” 

CCC is fully engaged in partnership with Valdez Public Affairs as we advocate for the membership of the Coalition on several issues before the 2020 Colorado General Assembly. Rob Willis, CCC Chair | BT Construction stated, “We have a full agenda that will take us through adjournment May 6. We will be working on private retainage reform in the interim and focus on candidates and campaigns leading up to the 2020 General Election November 3.” 

CCC established in 2017 to influence state and local policy makers to support public policy that provides for the improvement and betterment of the subcontractor business community. Members are American Subcontractors Association Colorado, Associated Wall and Ceiling Industries, Colorado Roofing Association, National Utility Contractors Association Colorado and Rocky Mountain Steel Construction Association.


For additional information regarding the 2020 Colorado Legislative Session or construction law in Colorado, you can reach David McLain at (303) 987-9813 or by e-mail at mclain@hhmrlaw.com.


Monday, February 17, 2020

The Attack on Colorado’s Construction Industry Continues at the State Legislature


Here is a rundown of the latest goings on at the Colorado State Capitol:

SB 20-138 - Concerning increased consumer protection for homeowners seeking relief for construction defects.

As previously discussed, if enacted, Senate Bill 20-138 would:

  1. Extend Colorado’s statute of repose for construction defects from 6+2 years to 10+2 years;
  2. Require tolling of the statute of repose until the claimant discovers not only the physical manifestation of a construction defect, but also its cause; and
  3. Permit statutory and equitable tolling of the statute of repose.

The Senate Judiciary Committee passed SB 138 out of committee unamended, on a 3-2 party-line vote, on February 12, 2020, sending the Bill to the Senate Floor, where it is scheduled for Second Reading on February 18, 2020.

It does not yet appear that there is a sponsor for this Bill in the House.  If you haven’t already done so, it is imperative that you contact your State Senator to ask him or her to oppose SB 20-138.  You can find the contact for your Senator here.

SB 20-093 - Concerning protections related to mandatory agreement provisions, and, in connection therewith, enacting the "Consumer and Employee Dispute Resolution Fairness Act."

As previously reported, for certain consumer and employment arbitrations, the Bill:

  • Prohibits the waiver of standards for and challenges for evident partiality prior to a claim being filed and requires any waiver of such provisions after the claim is filed to be in writing;
  • Provides that the right of a party to challenge an arbitrator based on evident partiality is waived if not raised within a reasonable time of learning of the information leading to the challenge but that such right is not waived if caused by the opposing party;
  • Establishes ethical standards for arbitrators; and
  • Requires specified public disclosures by arbitration services providers but includes protections for certain confidential information.


The Bill also requires an individual arbitrator for certain consumer and employment arbitrations to make additional disclosures of information that might affect the arbitrator’s impartiality.
The Bill specifies how attorney fees and other reasonable expenses are to be awarded if a court vacates an award because of an arbitrator’s evident partiality or failure to make required disclosures and clarifies when appeals of orders may be made in consumer and employee arbitrations.

The Bill also provides that for a standard form contract involving a consumer or employee:

  • Specified terms are unenforceable as against public policy;
  • Including an unenforceable term constitutes a deceptive trade practice under the "Colorado Consumer Protection Act"; and
  • How certain cost-shifting provisions are to be interpreted.


The Senate Judiciary Committee Passed SB 93 out of committee, with amendments, on a 3-2 party-line vote on January 29th and the Senate Passed the Bill on Second Reading, again with amendments, on February 6th.  SB 93 now remains on the Senate Calendar for Third Reading.  You can find the most recent version of the Bill here.  Of all of the amendments made to the Bill in Committee or on the Senate Floor during Second Reading, only one seems to be aimed at alleviating the construction industry’s concerns with the Bill.  On Second Reading, Senator Foote offered Amendment No. L.010, which added a legislative declaration, reading: “The general assembly declares that nothing in this act is intended to approve, disapprove, modify, or overrule Vallagio at Inverness Residential Condo. Ass’n v. Metro Homes, Inc., 2017 CO 69, 395 P.3d 788.”  While this is nice, it does not do enough to remove the chilling effect on arbitration that the Bill will have.     

If you haven’t already done so, it is imperative that you contact your State Senator to ask him or her to oppose SB 20-138.  You can find the contact for your Senator here.

HB 20-1046 - Concerning payments in construction contracts governing improvements to private real property.

As a refresher, for all construction contracts of at least $150,000, the HB 20-1046 would require:

  • A property owner to make partial payments to the contractor of any amount due under the contract at the end of each calendar month or as soon as practicable after the end of the month;
  • A property owner to pay the contractor at least 95% of the value of satisfactorily completed work;
  • A property owner to pay the withheld percentage within 60 days after the contract is completed satisfactorily;
  • A contractor to pay a subcontractor for work performed under a subcontract within 30 calendar days after receiving payment for the work, not including a withheld percentage not to exceed 5%;
  • A subcontractor to pay any supplier, subcontractor, or laborer who provided goods, materials, labor, or equipment to the subcontractor within 30 calendar days after receiving payment under the subcontract; and
  • A subcontractor to submit to the contractor a list of the suppliers, sub-subcontractors, and laborers who provided goods, materials, labor, or equipment to the subcontractor for the work.


The bill does not apply to contracts with public entities or to a contract concerning one multi-family dwelling of no more than 4 units or one single-family dwelling. A person who fails to make a required payment must pay 1.5% interest per month until the debt is fully paid. In a lawsuit to enforce the bill, the prevailing party is awarded attorney fees and costs.

House Bill 1046 is currently on the Calendar for the House Business Affairs & Labor Committee on February 18th, for action only.

HB 20-1155 - Concerning requirements that builders of new residences offer buyers options to accommodate higher efficiency devices.

Finally, as previously discussed, current law requires a home builder to offer to a buyer of a new home one of the following:

  • A solar panel system or a solar thermal system;
  • To prewire or preplumb the home for these systems; or
  • A chase or conduit to wire or plumb the home for these systems in the future.


Section 1 of the House Bill 1155 changes this to require that the home builder offer each of these options.

Section 2 requires a home builder to offer one of the following options to a buyer of a newly constructed residence:

  • An electric vehicle charging system;
  • Upgrades of wiring to accommodate future installation of an electric vehicle charging system; or
  • A 208- to 240-volt alternating current plug-in located in a place accessible to a motor vehicle parking area.


Section 2 also requires the home builder to offer electric heating options. These requirements apply to both traditional detached, single-family homes and buildings that contain owner-occupied condominium units.

The House Committee on Energy & Environment passed HB 1155 out of committee, as amended, on an 8-1 vote, on February 13, 2020, sending the Bill to the House Floor, where it is scheduled for Second Reading on February 19, 2020.

For additional information about the Colorado legislative session or construction litigation in Colorado, you can reach Dave McLain at (303) 987-9813 or by e-mail at mclain@hhmrlaw.com


Wednesday, February 12, 2020

Denver Metro Area Mayors Urge No Vote on SB 93 as Written.



NEWS RELEASE

February 12, 2020


METRO AREA MAYORS URGE NO VOTE ON SB 93 AS WRITTEN
Hancock: “Now is not the time to shift Colorado into reverse and undo the great work this General Assembly has done to promote attainable housing.”

Denver, CO – Today, Denver area mayors joined the chorus of business organizations, housing advocates and community leaders opposing SB20-093. Denver Mayor Michael Hancock, Lone Tree Mayor Jackie Millet, Lakewood Mayor Adam Paul, Arvada Mayor Marc Williams and Westminster Mayor Herb Atchison urged members of the Colorado Senate to vote “NO” on SB20-093 and stand on the side of attainable housing.

The mayors praised the General Assembly for their work on reforming construction defects just 3 short years ago. From 2018 to 2019 alone, Metro area annual condo starts rose 34%.  Additionally, there are 2,782 condo units currently under construction and 109 future projects, totaling almost 17,000 units in the pipeline and representing opportunity for thousands of Coloradans.

According to Mayor Hancock, SB20-093 will reverse the most positive impacts of HB-1279 and the Vallagio decision, which paved the way for a quintupling of condo construction since 2017. “More than ever, we must provide attainable housing options to our residents. We can’t shift Colorado into reverse and undo the great work this General Assembly has done to promote attainable housing.”

“Colorado simply can’t afford to endanger the recovery that our housing stock has seen and compromise attainable and entry-level workforce housing or the opportunity for our seniors to age in place in a home they can own,” continued Lakewood Mayor Adam Paul on behalf of the Colorado Municipal League.


Arvada Mayor Marc Williams continued, “More broadly, SB20-093 is going to make arbitration more difficult and more expensive for the very consumers the bill seeks to help, all while introducing an extraordinary number of unintended consequences that are likely to stifle our economy.”

 “Without a doubt, this bill will drive up housing costs for consumers and we simply can’t do that to our citizens. We cannot be complicit in destroying the American Dream – Colorado is better than that,” said Westminster Mayor Herb Atchison.

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The Homeownership Opportunity Alliance is a bipartisan, statewide Coalition of Coloradans working to open the doors to attainable homeownership.

Homeownership Opportunity Alliance Coalition


American Council of Engineering Companies of Colorado
American Institute of Architects – Colorado Chapter
American Subcontractors Association
Apartment Association of Metro Denver
Associated Builders and Contractors, Rocky Mountain
Associated General Contractors
Building Jobs 4 Colorado
Colorado Apartment Association
Colorado Association of Home Builders
Colorado Association of Mechanical and Plumbing Contractors
Colorado Association of Plumbing-Heating-Cooling Contractors
Colorado Association of REALTORS®
Colorado Bankers Association
Colorado BUILDS
Colorado Business Roundtable
Colorado Civil Justice League
Colorado Chamber
Colorado Competitive Council
Colorado Concern
Colorado Contractors Association
Colorado Mortgage Lenders Association
Colorado Municipal League
Colorado Springs Business Alliance
Denver Metro Chamber of Commerce
Denver South Economic Development Partnership
Douglas County Business Alliance
Douglas County Commissioners
Downtown Denver Partnership
Economic Development Council of Colorado
Habitat for Humanity
Heating, Air-Conditioning, Refrigeration Professionals
Hispanic Chamber of Commerce of Metro Denver
Hispanic Contractors of Colorado
Home Builders Association of Metro Denver
Housing and Building Association of Colorado Springs
Housing Colorado
Independent Bankers of Colorado
Independent Electrical Contractors
Metro Denver Economic Development Corporation
NAIOP Colorado
National Electrical Contractors
NFIB—Colorado
Sheet Metal and Air Conditioning Contractors
Urban Land Conservancy

                       

Disclaimer

The information contained in this blog is provided for informational purposes only. It is not legal advice and should not be construed as providing legal advice on any subject matter.