By: William C. Groh, III

In many, if not most situations, Colo. Rev. Stat. Ann. § 13-80-101(a) will govern the statute of limitation for a breach of contract action.  C.R.S. § 13-80-101(a) provides a period of three years after accrual for “[a]ll contract actions, including personal contracts and actions under the “Uniform Commercial Code”, except as otherwise provided in section 13-80-103.5”.

So what is C.R.S. § 13-80-103.5?

This statute provides for a six year period after accrual for the collection of certain kinds of debts, some of which can arise as a result of a contract.  These can include “liquidated debt,” unpaid rent, funds owed for bad checks (with some exceptions), and certain actions by the public employees' retirement association for unpaid contributions.  C.R.S. § 13-80-103.5 also covers actions for the following items:

[1] an unliquidated, determinable amount of money due to the person bringing the action,

[2] all actions for the enforcement of rights set forth in any instrument securing the payment of or evidencing any debt, and

[3] all actions to recover the possession of personal property encumbered under any instrument securing any debt; except that actions to recover pursuant to section 38-35-124.5(3), C.R.S.[relating to errors in written payoff statements in connection with settlement of real estate transactions], shall be commenced within one year.

If a contract action involves a “liquidated debt” or an “unliquidated, determinable amount of money,” the limitation period is six years, not three. But what kind of debt is that?  First, a sum is likely “liquidated” if 1) the contract sets forth the amount owed, or 2) if you can determine the sum owed with a simple computation using extrinsic evidence.  The Colorado Supreme Court acknowledged a debt owed for medical services was “liquidated” because it involved itemizing services provided based on pre-determined rates, even though there was no written agreement specifically setting forth the total amount owed.  Portercare Adventist Health Sys. v. Lego, 286 P.3d 525, 529 (2012).

Other similar examples may include unpaid work orders for based on pre-determined rates, amounts owed on promissory notes, unpaid amounts for goods provided based on predetermined prices, and unpaid wages based on previously fixed hourly rates.  Notably, the Portercare court did not define the term “unliquidated, determinable amount of money,” which suggests other kinds of debts for amounts which are unknown but can be exactly determined may also fall under the statute.  These could potentially include actions for unknown amounts where the contract sets forth a specifically agreed method of valuation of the amount owed, but Colorado courts have yet to specifically address this issue.

Finally, remember the statute of limitations for breach of contracts runs from the date of accrual.  In Colorado, this generally means the date you either learned of the breach or reasonably should have learned of it through reasonable due diligence, whichever is earlier.  Just like determining which statute of limitation may apply to your case, navigating the accrual date under these circumstances can be tricky.  For further questions, please contact the breach of contract attorneys at Thomas P. Howard for a free consultation.