Colorado Court of Appeal Upholds Subcontractor's Compensation for
Delays By Others
The Colorado Court of Appeal's decision in Tricon Kent Co. v.
Lafarge North America, Inc. et al. (Colo. App. 2008), upheld
a subcontractors' right to be compensated for costly project delays
caused by others. The court determined that while "no damage
for delay" clauses are enforceable in Colorado, the "active
interference" doctrine is a valid and recognized exception
to the enforceability of such clauses.
The case stems from a 2003-2004 highway construction project supervised
by the Colorado Department of Transportation (CDOT) in which Lafarge
was the general contractor. In March 2004, Tricon and Lafarge entered
into a subcontract that included a "no damages for delay"
It provided that, "in the event the subcontractor's performance
of this subcontract is delayed or interfered with by acts of the
owner, contractor or other subcontractors, he may request an extension
of time for the performance of same, as herein provided, but shall
not be entitled to any increase in the subcontract price or to damages
or additional compensation as a consequence of such delays or interference,
except to the extent that the prime contract entitled the contractor
to compensation for such delays and then only to the extent of any
amounts that the contractor may, on behalf of the subcontractor,
recover from the owner for such delays."
Under CDOT's phasing plan, another subcontractor had to complete
its work before Tricon could proceed. However, correspondence from
Lafarge indicated that Tricon had been directed by the Lafarge to
proceed as scheduled as well threatened to seek liquidated damages
if Tricon did not do so.
In December 2004, Tricon sought additional compensation from Lafarge
based on the delays, which was denied. Moreover, at the end of the
project, CDOT assessed Lafarge 27 days of liquidated damages for
the entire project, and Lafarge passed on to Tricon the liquidated
damages for three of the 27 days. Tricon denied responsibility for
During court proceedings, Tricon argued that the "active interference"
exception to the "no damage for delay" clause applied
since Lafarge knew of the delay and the consequences such a delay
would mean to Tricon's progress. Lafarge countered that the "no
damage for delay" clause precluded the company from paying
any delay damages to Tricon and that any exception to the clause
had to be based on delays caused in bad faith, which Lafarge denied.
The trial jury returned a verdict in favor of Tricon and awarded
it $29,276 on the contract balance and $144,600 for additional compensation.
The Colorado Court of Appeals upheld this decision.
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