The information contained in this blog is provided for informational purposes only. It is not legal advice and should not be construed as providing legal advice on any subject matter
Today, in Tarco, Inc. v. Conifer Metropolitan District, 213 COA 60, a division of the Colorado Court of Appeals held that a general contractor's failure to provide the bond required by C.R.S. § 38-26-106 on a public works project does not necessarily bar the general contractor from brining a claim against the owner for payment. Still, failing to obtain the requisite bond is risky.
In Byerly v. Bank of Colorado, et al., 2013 COA 35, a division of the Colorado Court of Appeals held that the value of a general contractor's mechanic's lien is always limited to the contract price, even where the owner has not filed the contract with the clerk and recorder's office. Thus, the language in C.R.S. § 38-22-101(3) providing that "such persons shall have a lien for the value thereof" when the contract is not filed applies only to subcontractors and material suppliers. As such, the general contractor's mecanics' lien recorded for the "value" of the general contractor's work instead of the amount allowed under its contract was excessive.
Reversing a Court of Appeals' decision, the Supreme Court of Colorado has held that capital infusions by an LLC's manager to keep the LLC afloat are not trust funds, even when the sole purpose of the LLC is to develop a single project. Furthermore, the Court reiterated that there is nothing wrong with a contractor having only a single bank account.
Before a potential developer purchases property for a new project, it needs to secure financing. Before the lender will agree to finance the project, it wants to be satisfied that the project has or will be granted the requisite entitlements. And before the requisite entitlements can be obtained, preliminary design work must be performed. As a result, design professionals often perform site planning and other design work before the developer even purchases the real property. A somewhat-similar scenario happened in Oz Architecture of Denver, Inc. v. V3 Companies of Colorado, Ltd. (Colo. App. April 19, 2012) (not published pursuant to C.A.R. 35(f)).
In Ferguson Enterprises, Inc. v. Keybuild Solutions, Inc. et al., (Colo. App. Dec. 22, 2011), the Court of Appeals had to address the priorities when mechanics' liens and multiple deed-of-trust foreclosures collide. While reaffirming and compiling several previously-established propositions of law in this area, the Court also addressed some novel issues.
