The Colorado Supreme Court last week delivered an opinion that is likely to be the final move in the long-running efforts at construction defect litigation reform that also included the passage of a legislative bill this year, as well.
The opinion in Vallagio at Inverness Residential Condo Association v. Metropolitan Homes upheld a Colorado Court of Appeals ruling that protects developers’ ability to keep arbitration clauses in common interest communities’ declarations. The arbitration issue was a key component of construction defects reform efforts and was also the subject of a failed legislative bill this year.
The opinion, penned by Justice Richard Gabriel, addresses the issue of whether the Colorado Common Interest Ownership Act permits a developer to retain their right to consent to amendments to declarations that would remove arbitration clauses and whether the Colorado Consumer Protection Act precludes arbitration of claims asserted under the CCIOA.
The case has been widely anticipated as a key component of construction defect reform. The case was argued in March, and even prior to arguments, many watching the issue identified it as a significant component of construction defect litigation reform. Depsite having a bill in the legislature that dealt with a similar subject, the appellate case was seen as an important last resort if the bill failed — which it did.