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Limitations of Liability

Often, a lot of construction professionals have their hands on a given project. As a result, claimants often name everyone involved as a defendant and let them sort out who is responsible. By statute, each party should be limited to its "pro rata liability." But sometimes it is not that simple. 

What is Pro Rata Liability? 

C.R.S. 13-21-111.5 provides: "In an action brought as a result of a death or an injury to person or property, no defendant shall be liable for an amount greater than represented by the degree or percentage of the negligence or fault attributable to such defendant that produced the claimed injury, death, damage, or loss." In a construction defect claim, this means each construction professional is liable only for those damages caused by their respective negligence. This statute is in direct opposition to the common law concept of "joint and several liability," where every tortfeasor is fully liable for all damages caused by the combined negligence of everyone involved. The pro rata liability statute ensures that contractors will not normally be held liable for the negligence of others.

What is the Exception to Pro Rata Liability?

But not so fast. At the end of the language quoted above is the following caveat, "...except as provided in subsection (4) of this section." Subsection (4) provides: "Joint liability shall be imposed on two or more persons who consciously conspire and deliberately pursue a common plan or design to commit a tortious act." In order to prove such a conspiracy, the claimant would have to prove that the defendants came to a "meeting of the minds" on an "object to be accomplished or a course of action to be followed" and the performance of one or more unlawful acts causing damage. An express agreement is not required, but there must be a tacit understanding. 

This exception rears its ugly head most often where there are collectability difficulties due to insolvent contractors or insufficient insurance. In those situations, claimants seek to impose disproportionate liability on the solvent/insured defendant in an attempt to avoid a recovery shortfall. Those attempts often lead to somewhat desperate attempts to prove conspiracies, expanding the scope and cost of litigation.

If the claimant can prove such a conscious conspiracy, each construction professional would have contribution claims against his fellow defendants acting in concert, but only for that defendant's pro rata share of fault.

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