Boulder law firm successfully argues Colorado Supreme Court case

BOULDER — The Colorado Supreme Court recently ruled in favor of a Berg Hill Greenleaf Ruscitti LLP client, Ralph L. Wadsworth Construction Co. LLC.

In Ralph L. Wadsworth Construction Company, LLC v. Regional Rail Partners, justices unanimously reversed an appeals court ruling, a move BHGR said has “significant implications for contractors, subcontractors, and material suppliers throughout the state.”

The initial lawsuit “arose from Wadsworth’s work as a subcontractor on the Regional Transportation District’s North Metro Rail Line project connecting Thornton and Denver’s Union Station — a public works project valued at over $343 million. After experiencing significant project delays and disruptions, Wadsworth filed a verified statement of claim with RTD under the Public Works Act seeking approximately $12.8 million in unpaid costs, including delay and disruption damages calculated by a retained expert,” BHGR said in a news release. “The general contractor challenged the claim as excessive and argued that Wadsworth had forfeited all rights to recovery under the Act. Following a 10-day bench trial, the trial court found in Wadsworth’s favor and awarded over $5.6 million in damages and unpaid construction funds. The Court of Appeals reversed, concluding that Wadsworth’s claim was excessive as a matter of law and that Wadsworth had forfeited its right to recovery under any legal theory.”

In its ruling Monday, the Colorado Supreme Court wrote that it “now concludes that disputed or unliquidated amounts may lawfully be included in a verified statement of claim, provided that the amounts otherwise fall within the statutory constraints of the Public Works Act. Further, on the facts presented here, the court concludes the trial court did not err in finding that Wadsworth’s verified statement of claim was not excessive. Finally, the court concludes that a claimant who files an excessive claim forfeits only the statutory rights and remedies created by the Public Works Act and not all rights and remedies otherwise available at law.”

BHGR partners Giovanni Ruscitti, Jack Storti and Lawrence Myers represented Wadsworth in the initial trial that resulted in a judgment in Wadsworth’s favor. Partner Rudy Verner later joined that trio to represent Wadsworth before the Colorado Supreme Court.

BHGR said that the decision has ramifications that include:

“For subcontractors on public projects, the decision confirms that a verified statement of claim is a broad protective remedy. Subcontractors may include good-faith claims for delay damages, disruption costs, and other disputed amounts without fear that doing so will render the claim excessive, as long as those amounts relate to labor, materials, or other supplies used in the prosecution of the work and the claimant has a reasonable basis for believing the amounts are due.

“For general contractors and project owners, the decision clarifies that the excessive-claim penalty is a targeted deterrent against bad-faith filings, not a trap that strips a claimant of all legal recourse. This should encourage resolution of disputes on the merits rather than through procedural forfeiture arguments.

“For private construction projects, the Court’s analysis reinforces longstanding precedent under the Mechanics’ Lien Act that an excessive lien results only in forfeiture of lien rights, not all legal remedies. The Court’s discussion of the parallel structure between the two statutes provides additional authority for contractors and subcontractors defending against excessive lien challenges on private projects.”

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