Opponents of the controversial Homeowner Protection Act now have overplayed their hand so badly that their fears of frivolous lawsuits and higher housing costs will likely be tested in the marketplace.
Trial lawyers and homebuilders have been fighting in the state legislature for years about the best way to resolve legal disputes over residential construction defects. The lawyers say homeowners don't have a strong enough "lemon law." Homebuilders complain that fee-happy barristers would rather take them to court than get a defect corrected. If there's anything worse than a sore loser, it's a sore winner, and this long-running catfight has both.
"Greed vs. greed," concludes state Rep. Alice Borodkin, D-Denver, whose constituents were subjected to slew of slimy automated phone calls earlier this month. Borodkin and Capitol office mate Rep. Nancy Todd, D-Aurora, figure they got more than 30 calls from voters demanding to know why they were supporting a bill that would raise their property taxes.
"Callers said they'd supported me before, but never again," Todd recalled Friday. " 'Are they mad about my sex ed bill?' I asked my aide."
Todd asked the aide to "get to the bottom of this." A couple of days later, she was told it was some sort of home builders' bill, only no such bill had been introduced - yet.
Todd and Borodkin decided to call Colorado Concern, a pro-business lobby that often fronts for builders. Executive Director William Mutch told them, as well as our legislative reporter Lynn Bartels, that the calls were paid for by Rick Sapkin, managing partner of Edgemark LLC and current chairman of Colorado Concern. But Sapkin was acting as an individual and not as the group's chairman, Mutch told Bartels. That's an important distinction for Mutch to make. If Colorado Concern, which has registered lobbyists, ends up being connected to the calls, an ethics probe could be in the offing.
"I'd rather just stay on what Lynn already wrote," Mutch told me Thursday when I asked him about the "robo-calls."
Sapkin is somewhere on spring break this week, and I hope he had a great time because he'll likely have some splanin' to do upon his return.
"I want to hear from him face to face," Todd said. " I don't like the approach that was used with my constituents, who were lied to. It's not ethical behavior, and I want an apology."
Rep. Debbie Stafford, R-Aurora, said Monday she was subjected to "the most heavy-handed lobbying" she's experienced in seven years as a result of her support of the bill. "I'm enraged beyond measure," she told Bartels. "I won't be blackmailed."
Think back six weeks ago when Gov. Bill Ritter vetoed a contentious pro-union bill that everyone thought he would sign. "I agree with it in substance," he said, but added that he deplored the "overheated partisan rhetoric," which prompted his veto. "The message is this, that we're going to do this differently," Ritter said.
It seems some folks didn't get the message.
A little history on why we're dealing with the Homeowners Protection Act. In 2003, Gov. Bill Owens signed into law House Bill 1161, which required homeowners to give builders an opportunity to fix a problem before any lawsuit can be filed. Some trial lawyers got very upset at the potential loss of earnings. Two days after the bill was signed they began gathering signatures to put Amendment 34 on the November 2004 ballot. They never gave the new law a chance to work before they set out to destroy it. Amendment 34 would have written into the state constitution language that forever made it easier to sue than repair. Voters rejected it. An attorney the other day characterized this group of trial lawyers as "whack-a-moles" - they keep popping back up. In other words, sore losers.
Were home builders content with two victories in two years? Not some of them, apparently. They began inserting non-negotiable warranty clauses into closing documents, allowing them to wiggle out of correcting home defects. These were slipped into the mountain of documents a buyer signs at a closing. In other words, sore winners. Greed vs. greed.
Along came the Homeowners Protection Act this legislative session. It would prevent the warranties that strip away a buyer's right to have construction defects repaired. But some opponents think it does more, that it gives trial lawyers too much of an opening for frivolous lawsuits and will drive up the cost of housing.
I asked Mutch of Colorado Concern about the sleazy new warranties. "There are some issues that were brought to our attention," he said. "We agree, let's fix them. But we think this bill goes beyond that and opens some things back up. All we're trying to do is let (H.B.) 1161 work."
Bob Moody, executive director of legislative affairs for the National Association of Office Industrial Properties, agrees with Mutch on that point. Moody represents developers of mixed-use properties that blend residential with restaurants and bars - the sort of New Urbanism projects we are seeing more frequently, such as those at light-rail stops. Home buyers in these projects sign waivers that they will not sue over such things as bar or traffic noise or restaurant odors.
The new legislation would disallow such common-sense waivers, Moody said Friday. "This bill is an anchor around our necks. We're going to kill the golden goose. We've had lawyers look at this, and they are consistently telling us this bill will take us back to the days of huge settlements that affect everyone else's costs. We're being told the insurance costs per unit for a developer would double or triple if they couldn't get waivers."
Moody is hopeful of a compromise on the bill as it moves to the state Senate, having passed successfully through the House on Thursday. "If the bill only does what proponents say they want it to do - protect peoples' rights - it's fair to say we can live with that. But our lawyers tell us that the bill in its current form has the potential for doing much more than that."
It's also fair to say that Moody will push hard for further negotiation: "I always tell my people that if we're not at the table, we're on the menu."
Business editor Rob Reuteman can be reached at 303-954-5177 or