The new law contains favorable caps on damages, including limiting a plaintiff’s recovery to actual damages, capping non-economic damages at $250,000 and implicitly removing the option to sue for punitive damages. The bill also limits damages in a construction defect action to $250,000; the tripling of actual damages was previously allowed. Attorneys’ fees are included in that amount.
Rob Nanfelt, government affairs director for the Colorado Association of Home Builders, said the reforms have made insurers “very interested” in returning to the market. He is hopeful that surplus insurers will return to Colorado in three to six months, and that major carriers will follow within a year.
Colorado’s bill contains some of the strongest construction litigation language passed to date, and that has spurred its opponents to file an initiative for a voter recall on the 2004 ballot. Nanfelt’s association is working vigorously to keep the law in place.
In addition to Colorado, six other states — Idaho, Indiana, Kansas, Kentucky, Montana and West Virginia — have passed notice and opportunity to repair bills in 2003.
A bill in Florida awaits Gov. Jeb Bush’s signature, and a number of other states are still considering legislation. Arizona, California, Nevada and Washington already have laws in place.
For more information on the notice and opportunity to repair process, talk to your state lobbyist or e-mail NAHB’s Marie Zenner or call her at 800-368-5242 x8279.
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