Colorado § 13-80-109 - Limitations apply to noncompulsory counterclaims and setoffs.

§ 13-80-109. Limitations apply to noncompulsory counterclaims and setoffs.

Except for causes of action arising out of the transaction or occurrence which is the subject matter of the opposing party's claim, the limitation provisions of this article shall apply to the case of any debt, contract, obligation, injury, or liability alleged by a defending party as a counterclaim or setoff. A counterclaim or setoff arising out of the transaction or occurrence which is the subject matter of the opposing party's claim shall be commenced within one year after service of the complaint by the opposing party and not thereafter.

Source: L. 86: Entire article R&RE, p. 700, § 1, effective July 1.

Editor's note: This section is similar to former § 13-80-112 as it existed prior to 1986.

ANNOTATION

The language of this provision makes it clear that its purpose is to allow a party against whom a claim has initially been asserted to plead a stale claim only in response to the claim asserted against that party and only if it arises out of the same transaction or occurrence, or the same series thereof. Duell v. United Bank of Pueblo, N.A., 892 P.2d 336 (Colo. App. 1994); Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138 (10th Cir. 2000).

Under Colorado law, the filing of a complaint does toll the statute of limitations on counterclaims arising out of the same transaction or occurrence. The amount of time a defendant has to file such a counterclaim is measured with reference to the plaintiff's complaint, giving the defendant one year, but no more, to file the counterclaim. Full Draw Prods. v. Easton Sports, Inc., 85 F. Supp. 2d 1001 (D. Colo. 2000).

This section provides that the limitation provisions of this article shall apply to any debt or contract alleged by way of setoff. Bernklau v. Stevens, 150 Colo. 187, 371 P.2d 765 (1962) (decided under former § 13-80-112).

Counterclaims for damages arising from transaction that was the subject of an action to stay arbitration were compulsory and revived under this section. E-21 Eng'g v. Steve Stock & Assocs., 252 P.3d 36 (Colo. App. 2010).

Under this section, a plaintiff cannot revive time-barred claims simply by re-pleading them as counterclaims to a defendant's compulsory counterclaim. Duell v. United Bank of Pueblo, N.A., 892 P.2d 336 (Colo. App. 1994).

This section does not apply in declaratory judgment actions for nonliability on limitations grounds. The suggestion that a plaintiff in one action can "revive" his concededly stale claims by filing them as counterclaims in a parallel action brought by the defendant solely for the purpose of having those claims declared stale is illogical and unsound. Hamilton v. Cunningham, 880 F. Supp. 1407 (D. Colo. 1995).

Action for declaratory judgment of nonliability based on statute of limitations grounds is not a "claim" triggering the counterclaim revival statute. Such an interpretation of the statute would lead to an absurd result. Tidwell v. Bevan Props., Ltd., 262 P.3d 964 (Colo. App. 2011).

Notwithstanding the time limitation set forth in this section, defendant's counterclaims are timely because they relate back, under C.R.C.P. 15(c), to his initial answer, which was filed within the limitation period. Makeen v. Hailey, 2015 COA 181, 381 P.3d 337.

Applied in Plains Metro. Dist. v. Ken-Caryl Ranch, 250 P.3d 697 (Colo. App. 2010).