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- June 12, 2017
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In what the experts are calling a pivotal win for the building industry, homeowners and insurers alike, the Colorado Supreme Court issued a ruling last week in favor of Palumbo Lawyers’ client Metropolitan Homes in the case Vallagio at Inverness Residential Condominium Association, Inc. v. Metropolitan Homes, et al. (217 CO 69). Diane Palumbo, managing partner of Palumbo Lawyers, the firm that handled the case through the appeal said, “the road is now opening up for Coloradans to see more affordable new housing and reduction in delays in financing and resales which have been hampered by litigation disputes. We hope this decision will resonate across the nation. Prohibiting Associations from changing the risks after the fact is a win for all involved.” Marisa Ala argued Metropolitan’s case to the Supreme Court citing long-standing Colorado public policy which favors arbitration. Mary Ritchie, the Palumbo Lawyers attorney who authored the prevailing arguments said “Metropolitan Homes has always been committed to building quality homes and this decision will enhance Metropolitan’s ability to resolve homeowner’s concerns even more effectively than before.”
The court’s ruling in favor of Metropolitan Homes upholds the validity of its Homeowner’s Association declaration which included a mandatory arbitration provision for construction defect claims. While this ruling is favorable for Colorado developers, the case has also been closely watched by lawmakers and the public because of the near shut-down of multi-family home construction in Colorado in recent years. Financial Institutions, Mortgage companies and industry carriers have had concerns with skyrocketing costs. Colorado’s housing resale industry, another affected group, has also been very interested in the Case as home resales have also slowed due to the lengthy litigation process. Marisa Ala argued that arbitration provides a more expeditious and economical forum for resolution of disputes allowing home builders to focus on addressing homeowner concerns rather than costly and protracted litigation.
Ms. Ritchie also noted that “the decision aligns with strong Colorado public policy favoring arbitration and recent legislation requiring more informed decisions concerning construction defect lawsuits – it is a solid victory for affordable housing and aligns with efforts by Denver Mayor Michael Hancock, Lakewood Mayor Adam Paul, and other community leaders.” In reality, Colorado has long favored arbitration and it has been the policy of the state to foster and encourage the use of arbitration as a method of dispute resolution. Arbitration does not abuse citizens basic legal rights or allow builders to “steamroll homeowners and shirk responsibility,” said Ms. Palumbo. “Most arbiters are retired judges, or well respected and experienced attorneys who have significant expertise in construction defect law and strong ethics. It is unfair and inappropriate to malign arbitration; it is a legitimate and valuable form of dispute resolution.”
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