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Senate panel approves bill to restore homebuyer negligence claims after Appleby ruling
Summary
The Senate Judiciary Committee voted 4-3 to advance Senate Bill 185, which would confirm that construction professionals owe an independent duty of care to original homebuyers — reversing the effect of a recent appellate decision known as Appleby that limited such claims and complicated insurance coverage for builders and designers.
Senate Judiciary Committee members on Monday advanced Senate Bill 185, a proposal aimed at restoring homeowners’ ability to bring negligence claims against builders and other construction professionals. The committee passed the bill, as amended, by a 4-3 vote.
Supporters said the measure responds to an appellate opinion, Appleby, that they say has disrupted long-standing Colorado practice by restricting negligence claims by original homebuyers and leaving builders and some contractors without insurance coverage for those claims. "Senate Bill 185 essentially confirms the status quo. It protects homeowners. It protects home builders by confirming that home builders owe original homeowners a duty to construct homes with reasonable care," attorney Shane Fleener told the committee.
The bill would clarify that the economic loss rule does not bar negligence claims by initial purchasers of new homes and would preserve affirmative defenses and indemnity pathways available in tort actions, sponsors said. "The bill confirms these affirmative defenses are still available to construction professionals," sponsor Senator Rodriguez said during the hearing.
Engineers, architects and trade groups urged caution or opposed the bill, arguing it would raise liability and insurance costs and reduce the number of firms willing to take residential projects. "As engineers, we already carry liability for our design. If this passes, buyers of new homes could sue us directly, bypassing these agreements," said Robbie Gammon, principal at Veil and Day Engineers and Builders. Nicholas Remus, an architect with the Colorado chapter of the American Institute of Architects, said the bill "would drag architects and engineers unfairly into more lawsuits" and increase fees.
Industry witnesses warned the change could push up project costs and reduce supply. An executive from an engineering firm said fees for residential projects are often small — "around a third of 1% of the total project cost" — and that exposing designers to unlimited liability could drive firms out of the market.
Proponents, including defense counsel for home builders, argued the bill restores settled Colorado Supreme Court precedent recognizing an independent duty of care in residential construction and cited statutes the legislature adopted in the 2000s to keep parties responsible for their own negligence. "We hold that the economic loss rule has no application to the present case because subcontractors owe homeowners a duty of care independent of any contractual obligations," David McLean, a defense attorney, quoted from prior Colorado cases in urging support.
The committee adopted an L2 amendment offered by sponsors to revise wording after negotiations with stakeholders, then voted to advance the bill to the full Senate.
The measure drew repeated testimony that Appleby is an unpublished Court of Appeals opinion being cited in arbitration and litigation and that courts nationwide are wrestling with how to apply the economic loss rule after recent decisions. Lawmakers and witnesses differed on whether the change would ultimately raise housing costs or restore predictability to insurance markets.
If the bill clears the Senate it would return the question to statute and legislative policy rather than leave it governed by an unpublished appellate ruling.
Votes at a glance: Senate Bill 185 — amendment L2 adopted; bill advanced as amended (vote: 4 yes, 3 no).
