Terrace residents feared Rippy bill
GSPI News Editor
GLENWOOD SPRINGS – Homeowners at the Terrace Condominiums hurried to file a lawsuit over defects with their properties before a contractor liability limits bill sponsored by their own state representative could be signed into law.
The Terrace Condominiums Homeowners Association filed the lawsuit against developer Jay Harkins and others associated with the project April 17. House Bill 1161, carried by state Rep. Gregg Rippy, R-Glenwood Springs, was signed by Gov. Bill Owens late last week.
The association says soil and foundation problems have produced settling that has cracked walls and concrete floors, and set askew doors and windows in at least three multi-family units of the 12 in the project.
Rippy’s bill restricts damage awards permissible in lawsuits against homebuilders. Terrace homeowners and their attorneys say they feared being subject to these limitations as they seek resolution to the problems with their homes. But Rippy’s bill won’t apply to the homeowners because they already have filed their suit.
“That bill was the driving force in this. That was a big concern of ours,” said Nancy Dever, an association member.
“My understanding is that’s why they filed suit,” said Rippy.
The association’s attorney, Scott Sullan of Greenwood Village, called Rippy’s bill “very anti-consumer,” and said it would limit recoverable damages “in significant ways.”
“What Rep. Rippy is doing is basically stripping away certain aspects of the damages that homeowners can and should be able to collect when they experience these types of construction defects in their homes,” Sullan said. “What Rep. Rippy is doing is not good for his constituents in this town; it only is good for his friends in the building industry.”
Sullan’s practice concentrates in representing homeowners and homeowner associations in suits against builders, and he was one of the most outspoken opponents of HB 1161.
Bill aimed at
lowering housing costs
Rippy said he hopes to meet with Terrace homeowners and explain the bill to them.
“I think there’s been some misconception of what 1161 does. There’s been the hype that it takes away consumers rights, and I think that’s very far from the truth,” he said.
Rippy has said the bill ultimately benefits homeowners by limiting outlandish awards that drive up the cost of contractor liability insurance and thus, the cost of housing.
He said state Attorney General Ken Salazar, who originally raised concerns about HB 1161’s impacts on consumer protections, now supports it, saying he believes it deals fairly with homeowners and builders. Salazar suggested changes to the measure; some were included in the final bill.
One goal of 1161 was to limit so-called “treble,” or triple, damage awards in lawsuits against homebuilders. The Terrace homeowners are seeking treble damages in their suit.
HB 1161 preserves the ability to seek treble damages, but caps them at $250,000, as Salazar recommended.
But Sullan said the bill still retained “onerous provisions.”
Those include eliminating the ability to recover certain types of non-economic damages resulting from building defects, and the right to seek payment for damages that engineers say will happen in the future, but haven’t happened yet.
He said non-economic impacts such as emotional distress and loss of enjoyment of a home deserve some compensation.
“There’s a damage there you need to consider,” he said.
Coverage for future damages
Sullan and Terrace homeowners worried about seeking compensation for anticipated future damages. Sullan said he thinks all the buildings are on the wrong foundation system, and the damage being experienced at some units is likely to spread to others.
“You literally have to sit and wait for the damage to occur” under Rippy’s bill, said Sullan.
Dever said she has yet to see problems in her unit.
“I’m just kind of keeping my fingers crossed that nothing will happen,” she said.
Rippy said the question of future damages is a fundamental matter of debate regarding his bill. He believes it is better for homeowners to seek actual damages rather than ones that may never happen.
“What we’ve seen in the court system is a huge exaggeration and expansion of what are probable damages,” he said.
Homeowners “have recovered some pretty outlandish probable damages,” he said.
Just looking for a fix
to the problems
Sullan doesn’t buy Rippy’s argument that high damage awards drive up insurance rates, and blames them on insurers’ attempts to recover losses from bad investments in stocks and real estate. Previous legislation aimed at the difficulty in getting insurance for homebuilders resulted in no drops in rates, he said.
“The only purpose is to protect bad builders,” he said of Rippy’s bill.
Rippy counters that his bill sets up a process for builders to remedy a problem before homeowners seek a court solution.
“A number of times they just file lawsuits,” Rippy said.
Dever said Terrace homeowners tried to get Harkins to fix the problems, but he never delivered.
“It didn’t appear that Mr. Harkins was willing to really step forward. A lot of things have been said that have never happened, so I think there’s little bit of a lack of trust there, Dever said.
She said she knows some people may be “sue-crazy,” and homebuilders may need some protection, but she’s not sure Rippy’s bill is the answer.
“I believe the impetus for the bill was kind of the treble damages, and maybe the unreasonable suits that people bring forward. But I do think contractors need to be responsible for what they do,” she said. “And I don’t know what’s right.”
Just because the Terrace suit seeks treble damages doesn’t mean they will be awarded, she said.
“I don’t think any of our interest is to do more than fix the buildings. It isn’t to try to get every dime you can get from somebody. But we want things fixed correctly, whatever it takes to do it,” she said. “A lot of people stand to lose a lot, and I don’t think that’s very responsible.”
Contact Dennis Webb: 945-8515, ext. 516
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