Builders OKs $39 million to end suit

By Christine Tatum
Denver Post Staff Writer

Texas-based homebuilder D.R. Horton has agreed to pay owners of a condominium complex in Superior $39.5 million, the largest settlement of a residential construction-defects lawsuit in Colorado history, said Scott Sullan , a Denver lawyer who represented the homeowners.

Owners of the 246-unit Summit at Rock Creek complex filed suit in 2003, two months before the enactment of a state law that limits the damages homeowners may collect for construction defects.

Current law allows property owners to recover the value of their property, the cost of replacement or the cost of repair – whichever is less. The law also imposes a $250,000 cap for pain and suffering and a $250,000 cap for fraud.

“More homeowners have to understand that the current law continues to be a problem because it protects builders from paying for the consequences of shoddy construction,” Sullan said.

Sullan, who took the case on contingency, will collect some portion of the $39.5 million settlement to cover his fees and costs.

Lawyers for D.R. Horton declined to comment Wednesday.

“We don’t think it’s appropriate to discuss this settlement because of ongoing litigation,” said David McLain of Higgins, Hopkins, McLain and Roswell.

The company has filed suit against more than 30 subcontractors who constructed the complex. Some of those subcontractors have in turn filed suit against more than a dozen companies that also worked on the site.

The 43-building complex, built between 1999 and 2002, is plagued with problems, including cracked foundations and walls and poor land drainage. Building inspectors hired by homeowners removed the trim from 1,800 windows and found gaps in siding that allowed extensive water leaks, Sullan said.

“We saw something wrong with just about everything but the kitchen sink - but only because we didn't look that hard at the kitchen sink,” he said.

The chain of litigants illustrates how difficult it can be for homeowners to hold builders accountable for defective work, Sullan said.

“Basically a lot of builders today are briefcase builders that amount to a marketing, sales and financing shop,” he said.“They don’t have enough people on board who actually hammer nails or install drywall. They take care of those tasks by subcontracting everything out.”

Sullan last year campaigned for a ballot initiative that would have lifted limits on the damages that property owners could seek against builders. The measure failed.

The building industry opposed Amendment 34, claiming it would lead to higher insurance premiums for the industry, hurt small builders and raise home prices for consumers.

In April, Sullan won a $12 million construction-defects settlement on behalf of owners of The River Terraces, a 104-unit complex in Glenwood Springs.