Homeowners urge Legislature to restore negligence remedy after 2023 Applebee ruling; architects and engineers warn of insurance and housing impacts

Sponsors and witnesses split the committee hearing on Senate Bill 185 along predictable lines: homeowners and some builders urged the committee to restore what they described as decades of Colorado law allowing an original home purchaser to sue construction professionals in negligence; design professionals and their trade groups said the bill would overturn long-standing rules, disrupt contract risk allocation and worsen insurance and housing affordability problems.

What the bill would do: Sponsors said SB185 would make explicit that construction professionals — including subcontractors, architects and engineers — owe an independent duty of care to homeowners that gives rise to negligence claims whether the buyer is the first purchaser or a subsequent purchaser. Sponsors framed the measure as restoring earlier case-law and legislative intent after an appellate decision in 2023 (Applebee) has been used to limit negligence claims by original purchasers.

Homeowner testimony: Multiple homeowners described long, costly defect fights they said would have been harder to resolve under Applebee. Catherine (Kip) Brown Hoekstra and Janine Musser testified that they faced significant foundation, drainage and construction defects after purchasing new homes; both said corporate or small builders resisted repair and that limiting original purchasers to contract claims would have left them with little or no recovery. Brown Hoekstra said a settlement in her case covered only about half the costs a forensic engineer estimated were needed to fix defects.

Support from some builders and plaintiff attorneys: David McLean, a construction attorney representing builders and the Colorado Association of Home Builders (CAHB), supported the bill, saying it “reaffirms that all construction professionals… owe a duty to construct homes in a reasonable and nondefective manner” and that the bill does not abolish the economic-loss rule but prevents misapplication that bars negligence claims where an independent duty exists.

Opposition from design professions: Representatives of the American Council of Engineering Companies (Brandt Lohnert), Olson (Nate McCargill), the American Institute of Architects Colorado (Nicholas Remus) and other engineers and architects testified in opposition. They warned that SB185 would negate negotiated contract terms that allocate risk, increase litigation and invoices, and push smaller firms out of the market. Witnesses said many design firms base fees and participation on limited, negotiated liability; examples in testimony included small professional fees for certain work ($11,000 cited for structural work across eight townhomes) and common limits of liability for design contracts.

Legal background and contention: Witnesses discussed a multi-decade chain of Colorado cases: Cosmopolitan Homes (1983) recognized duties in some contexts; Mid Valley Real Estate Solutions (Colorado Supreme Court, 2015) clarified aspects of the economic-loss rule; and the more recent Applebee appellate decision (2023) has been cited to limit negligence claims by original purchasers. Supporters of SB185 said Applebee has been relied on in unpublished trial-court settings and that the Legislature should clarify policy that construction professionals are responsible for their negligence to homeowners of new homes. Opponents argued Applebee reflects settled balancing between contract and tort remedies and that the bill would undercut contractual risk allocation and insurance markets.

Insurance and practical issues: Engineers and architects said design firms often carry professional‑liability policies (typical limits cited in testimony: $1 million to $4 million) and negotiate limits of liability in their contracts; they said expanded exposure could lead firms to decline residential work, raise fees or reorganize business entities to limit exposure. Defense witnesses described certificate-of-review/certificate-of-merit requirements and argued those procedural protections already curb shotgun claims against design professionals.

Questions and process concerns raised by lawmakers: Representatives pressed witnesses on how often designers are involved in single-family or production construction, how limits of liability are set in practice, and what happens when a builder lacks assets or the contractor declares bankruptcy. Some witnesses said those examples are rare but acknowledged complicated outcomes when a builder is undercapitalized or the developer divests assets after sale. Several witnesses suggested that narrow, targeted legislative fixes (for example, insurance or disclosure requirements) might address specific problems better than a broad rewrite of tort law.

Status: The hearing included extensive testimony from both sides and factual accounts from homeowners; the committee heard the bill and multiple witnesses but did not record a final committee vote on SB185 during the session transcript provided.