ORDER REGARDING THIRD PARTY DEFENDANT PATE CONSTRUCTION CO. INC. S AMENDED MOTION FOR SUMMARY JUDGMENT
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1 DISTRICT COURT, EL PASO COUNTY, COLORADO Post Office Box 2980 Colorado Springs, CO (719) Plaintiff: FALCON RIDGE AT SPRINGS RANCH HOMEOWNERS ASSOCIATION, INC., a Colorado nonprofit corporation, V. Defendants: MDC HOLDINGS, INC. D/B/A RICHMOND AMERICAN HOMES, a Delaware corporation; RICHMOND AMERICAN HOMES OF COLORADO, INC., a Delaware corporation; FALCON RIDGE PARTNERS, LLC, a Colorado limited liability company; ZEPHYR REAL ESTATE, LLC D/B/A ZEPHYR REAL ESTATE COMPANY, a Colorado limited liability company; COLORADO COMMERCIAL BUILDERS, INC., a Colorado corporation; CHALLENGER HOMES, INC., a Colorado corporation; CHARLES J. SCHONINGER, an individual; JAY E. PIPER, an individual; DALE BEGGS, an individual; STEVEN BARR, an individual; BRAD D. LARSON, an individual; FRANK TITONI, an individual, Third Party Defendants: ROCKY MOUNTAIN MATERIALS AND ASPHALT, INC., a Colorado corporation; WILLIAM RALSTON SKEELE, JR., individually; SKEELE CONSTRUCTION, 144 CONSTRUCTION CORPORATION, a delinquent Colorado corporation; CARLOS GONZALEZ, individually; CM CONSTRUCTION; UNDERGROUND PLACEMENT SERVICES CORPORATION, a Dissolved Colorado corporation; DWIRE EARTHMOVING & EXCAVATING, a Colorado limited liability company; IDEAL CONCRETE, INC., a Colorado corporation; LAFARGE WEST, INC., a Delaware corporation; MCNELLY CONSTRUCTION CO., INC., a Colorado corporation; and PATE CONSTRUCTION CO., INC., a Colorado corporation. EFILED Document CO El Paso County District Court 4th JD Filing Date: Dec :35PM MST Filing ID: Review Clerk: Elizabeth A Cooper tcourt USE ONLYt Case No. 11CV5726 Division: 9 Courtroom: s503 ORDER REGARDING THIRD PARTY DEFENDANT PATE CONSTRUCTION CO. INC. S AMENDED MOTION FOR SUMMARY JUDGMENT This matter comes before the Court on Third Party Defendant Pate Construction Co. Inc. s Amended Motion for Summary Judgment as to all Claims of Third Party Plaintiff Falcon Ridge Partners ( Motion ). The Court has reviewed the Motion and the associated Response and Reply. The Court enters the following Order to resolve the issues raised in the Motion. 1
2 1. This is an action arising out of the construction of a residential development. The Plaintiff is the homeowner s association responsible for the maintenance of the common area, drainage improvements and landscaping located within the subdivision. The Plaintiff sued a number of Defendants that allegedly had some involvement in the development and the construction of the related improvements. 2. One of the Defendants sued by the Plaintiff was Falcon Ridge Partners, LLC. ( FRP). FRP was the general contractor on the project. The Plaintiff alleged FRP was liable for the allegedly defective improvements. In response to the suit, FRP denied any of the work was defective. In the alternative, FRP alleged that if any of the work was defective, such defects were caused by one or more of its subcontractors who worked on the project. In accordance with its alternative theory, on March 23, 2012, FRP filed third party claims for negligence and breach of contract against a number of its subcontractors. 3. One of the subcontracts named by FRP as a Third Party Defendant was Pate Construction Co., Inc. ( Pate ). Pate had contracted with FRP to perform certain pipe and earth work at the project. In its Third Party Complaint, FRP asserts, in a generalized pleading, that the work performed by Pate was in violation of the terms of the contract and the applicable standards of care. The Third Party Complaint does not specify any particular work performed by Pate that FRP contends was defective. 4. In an effort to assess the legal and factual basis of the third party claims asserted against it, Pate submitted interrogatories to FRP. FRP filed its answers to those interrogatories on September 5, Therein, FRP made the following representations, among others: (1) it did not have sufficient information to state whether there was any breach of the contract by Pate; (2) it had not consulted with any person to identify any allegedly defective work performed by Pate; (3) it could not identify any loss or damage resulting from the work performed by Pate: (4) it could not identify any defective or unsatisfactory condition which existed on the project which it attributed to the action or inaction of Pate. See FRP s Answers to Interrogatories, attached to Motion as Exhibit C. 2
3 5. By Order of this Court dated July 13, 2012, FRP was obligated to file any expert disclosures in support of its third party claims on or before October 31, FRP elected not to file any expert disclosures pertaining to its claims against Pate. 6. In view of these circumstances, Pate filed a motion for summary judgment. Relying upon FRP s interrogatory answers and the absence of expert testimony, Pate asserts FRP has failed to provide any facts or evidence that would support the conclusion that Pate breached its contractual obligations or committed negligence. Accordingly, it requests the entry of summary judgment in its favor with respect to both the negligence and breach of contract claims asserted against it. 7. Contemporaneous with the filing of its Response to the Motion, FRP filed its Supplemental Answer to Pate Construction Co. s First Set of Interrogatories ( Supplemental Answer). See Exhibit C to Response. The Supplemental Answer, however, was not signed by a representative of FRP. Instead, it was signed solely by FRP s counsel. 8. In the Supplemental Answer, FRP s counsel attempts to provide a factual basis for the claims asserted against Pate. It does so by referring to various expert reports that had been prepared and disclosed by the Plaintiff in support of its claims against the Defendants. None of these reports refer to Pate, none of them describe the work performed by Pate, and none of them identify any work performed by Pate that was defective. 9. The Plaintiff has settled all of its claims asserted in this case. Thus, the only claims that remain for trial are the third party claims, including FRP s claim against Pate. 10. The purpose of summary judgment is to permit the parties to pierce the formal allegations of the pleadings and save the time and expense connected with a trial when, as a matter of law based on undisputed facts, one party could not prevail. Peterson v. Halsted, 829 P.2d 373 (Colo. 1992). A court may grant summary judgment when the pleadings and supporting documents clearly demonstrate that no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. C.R.C.P. 56(c); Thompson v. Maryland Cas. Co., 84 P.3d 496, 501 (Colo. 2004). For 3
4 summary judgment purposes, a material fact is one that will affect the outcome of the case or claim. Sender v. Powell, 902 P.2d 947, 950 (Colo. App. 1995). Once the movant makes a preliminary showing of the absence of disputed facts, the burden shifts, and unless the opposing party demonstrates true factual controversy as to a material issue, summary judgment is proper. Heller v. First Nat l Bank, 657 P.2d 992 (Colo. App. 1982). 11. As a predicate matter, the Court concludes Pate has met its preliminary burden of demonstrating the absence of disputed facts on the claims asserted against it. In response to specific inquiry from Pate, FRP s initial interrogatory answers fail to articulate any facts that would support the conclusion that Pate breached its contract or acted negligently. In view of Pate s demonstration, the burden shifted to FRP to provide admissible evidence to support its claims, or at least demonstrate the existence of disputed facts relevant to those claims. 12. FRP first attempts to satisfy its burden by submitting the Supplemental Answer signed by its counsel but not signed by a representative of FRP. The Court concludes the unsigned Supplemental Answer is contrary to the Colorado Rules of Civil Procedure. See C.R.C.P. 30(b)(1),(2) (each interrogatory shall be answered separately and fully under oath and the answers are to be signed by the person making them, and the objections are to be signed by the attorney making them ). In addition to being contrary to the mandate of C.R.C.P. 30, the Court concludes the unsigned Supplemental Answer is not competent evidence that may be relied upon to meet the Plaintiff s burden under C.R.C.P. 56. C.R.C.P. 56(e) ( opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein ). At best, the unsworn Supplemental Answer is mere argument of counsel which is not sufficient to create an issue of disputed fact. People in re J.M.A., 803 P.2d 187, 193 (Colo. 1990) (arguments of counsel are not sufficient to raise an issue of disputed fact). 13. Even if the Court were to consider the substance of the Supplemental Answer, the Court would conclude it is not sufficient to create an issue of disputed fact. The 4
5 Supplemental Answer simply refers to and incorporates expert reports filed by the Plaintiff. In the first instance, these unsigned expert reports are not admissible evidence and are therefore not adequate to create an issue of disputed fact. See, e.g., McDaniels v. Laub, 186 P.3d 86, 87 (Colo. App. 2008) ( [u]nsworn expert witness reports are not admissible to support or oppose a motion for summary judgment ); Sofford v. Schindler Elevator Corp., 954 P.2d 1459, (D. Colo. 1997) (unsworn expert reports are not competent evidence that may be considered in resolving a motion for summary judgment) citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158 n.17 (1970). 14. Moreover, as previously noted, the Plaintiff s expert reports do not refer to Pate, do not describe the work performed by Pate, and do not identify any work performed by Pate that was defective. FRP asks the Court to ignore these omissions and conclude the expert reports are sufficient to create an issue of disputed fact simply because they refer to inadequate soil compaction and settling pavement in the vicinity of some trench backfill areas. Since Pate performed some of the trench work on the project, FRP s argument continues, the reports are sufficient to create an issue of disputed fact with respect to whether Pate s work was defective. The Court finds FRP s argument unpersuasive. The reports do not provide a sufficient factual basis by which a reasonable fact finder could conclude the allegedly defective work was performed by Pate. Thus, even if the unsworn expert reports were admissible, the Court concludes they are not sufficient to create an issue of disputed fact with respect to the claims asserted against Pate. 15. The Court is cognizant of the fact that FRP s claims were alternative in nature. As previously noted, FRP denied liability for the defects and attendant damages claimed by the Plaintiff. FRP s claims against Pate were premised upon FRP being held liable to the Plaintiff. The Court is also cognizant of the fact that if, prior to the resolution of the Plaintiff s claims, FRP was to identify allegedly defective work performed by Pate it would be providing an evidentiary basis for the Plaintiff s claims against FRP. While this circumstance may pose a difficult choice for FRP, it is a quandary of FRP s making. 5
6 16. Under the Construction Defect Action Reform Act ( CDARA ), a general contractor who is sued is not required to bring in as third party defendants all subcontractors who theoretically may be liable on a claim of indemnity if the property owner prevails on a claim against the general contractor. See C.R.S (II) ( all claims, including, but not limited to indemnity or contribution, by a claimant against a person who is or may be held liable to the claimant for all or part of a claimant s liability to a third person [a]rise at the time the third persons claim, against the claimant is settled or at the time final judgment is entered on the third person s claim against the claimant. [and] [s]hall be brought within 90 days after the claims arise ). Indeed, one of the central purposes of CDARA was to avoid placing a contractor in the quandary of asserting a multitude of indemnity claims against subcontractors who may or may not be ultimately responsible for any liability ultimately imposed upon the general contractor pursuant to the plaintiff s claims. The statute was not intended to work solely for the benefit of the general contractor. See generally CLPF Parkridge One, L.P. v. Arwell Investments, Inc., 105 P.3d 658 (Colo. 2005). It was also intended to protect a subcontractor from being drug into litigation for which there may not be a factual basis for any indemnity claim against it. As the Supreme Court noted in CLPF: A principle purpose of [CDARA] was to require identification of the alleged defect and pinpoint who is responsible for it. It's going to end shot gun lawsuits and limit who can be involved [to] the people that are responsible for the defect so that [o]nly the subcontractors that are responsible for the defects will be entered into the action. Id. at 664 (quoting statements made by legislators during the hearings leading to the adoption of CDARA). 17. To accomplish this purpose, CDARA gives the general contractor a choice. It may assert third party claims against subcontractors in the primary litigation. If it brings such claims, the general contractor must articulate a legal and factual basis for them. Alternatively, the general contractor may await the outcome of the primary litigation and 6
7 thereafter bring separate claims in a new action against the subcontractors responsible for the work for which the general contractor was held liable. 18. What a general contract may not do, however, is what FRP has done here; that is, file suit against a subcontractor in the primary litigation but fail to offer any admissible evidence that would support a claim against the named subcontractor. A general contractor who elects to pursue such a course is susceptible to a motion for summary judgment. And so it is here. 19. For the reasons set forth above, the Court concludes the third party claims asserted by FRP against Pate fail as a matter of fact and law. Accordingly, summary judgment is hereby entered in favor of Pate and against FRP on all third party claims asserted by FRP against Pate. Done and ordered this 12 th day of December, BY THE COURT: Timothy J. Schutz DISTRICT COURT JUDGE 7
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