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CLPF-Parkridge One1/31/2005
of third-party subcontractors alleged to be responsible for the complained of defects.
[It would] allow the court's discretion that as time goes on, if the defects are warranted that other subcontractors can be allowed into the action. And that, uh that just means that as things go on, they find more damage, or they find more defects that the [inaudible] will be allowed to be entered into the action.
Id. (emphasis added).
Representative Stengel called section 13-80-104(1)(b)(II) a "tolling provision." Id. at 3. The Senate co-sponsor agreed, referring to it as a "deferral" provision:
It has a deferral of the statute of limitations on third party claims. Now it provides that the statute of limitations as it applies to builders is not triggered as to third party claims until court judgment is entered and settlement is reached.
Transcript of Construction Defect Action Reform Act Hearings on House Bill 01-1166 Before the Senate Business Affairs and Labor Committee, 63rd General Assembly, First Sess. (March 21, 2001) at 39 (statement of Senator Fitz-Gerald).
Representing Farmers Insurance, Mike Benschneider testified that this provision would provide a safety valve to avoid the prior practice of needlessly adding claims and parties to the construction defect litigation. The general contractor could either bring an appropriate cross-claim or third-party claim in the construction defect litigation, or wait to file a separate suit within the allowed brief ninety-day window following settlement or judgment.
Basically what that means is that the general contractor will have 90 days after the settlement on the claim [inaudible] when the claim goes to trial to bring in whatever subcontractors are necessary. That is 13-80-104 on 1166. What happens now is a claim is filed, or a lawsuit is filed by the plaintiff against the general, they typically don't have, they either don't have time because we're running up against the problems with the statute, or a nonspecific allegation or pleading, uh and really the general contractor insurer has no choice but to bring in every subcontractor . . . . What this provision, the tolling provision will allow it will allow the general contractor time to sort out who truly should be brought into the lawsuit and who can be brought out, or left out.
Transcript of Hearings at 13 (emphasis added).
Therefore, the General Assembly intended to (1) require construction defect plaintiffs to identify the defect, and (2) allow indemnity and contribution claims to be brought by defendants against other parties responsible for the defect, either in the construction defect litigation or a separate lawsuit. If a separate lawsuit, it must be commenced within a narrow ninety-day period after settlement or judgment in the construction defect lawsuit.
We conclude that section 13-80-104(1)(b)(II) is a statute of limitation tolling provision, not a ripeness provision. The legislature intended to alleviate adding a multitude of potentially responsible parties by general contractors trying to protect themselves from an expiring statute of limitations; accordingly, it tolled the otherwise applicable statute of limitations in order to allow indemnity or contribution claims to be brought in a separate lawsuit, but within ninety days after settlement of or judgment in the construction defect lawsuit. This would allow, but not require, a separate proceeding to follow on the heels of the settlement or judgment in the construction defect litigation.
We conclude that the trial court based its order dismissing Harwell's cross-claim on an erroneous interpretation of the statute. The
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