CKBR Updates and Developments in Colorado Construction Law
Wadsworth v. Regional Rail Partners, 2026 CO 19, April 6, 2026
On April 6, 2026, the Colorado Supreme Court issued a unanimous decision resolving two significant questions of construction law under the Colorado Public Works Act (C.R.S. §§ 38-26-101 et seq.), which have caused widespread uncertainty for contractors and suppliers seeking to record mechanics’ liens on projects for unpaid services and materials.
The case arose from a subcontract dispute on the North Metro Rail Line project between Thornton and Denver’s Union Station, a public works project valued at over $343 million. Ralph L. Wadsworth Construction Company, LLC (“Wadsworth”) had a subcontract originally worth $29 million, which grew to over $60 million through change orders.
Wadsworth filed a verified statement of claim with the Regional Transportation District (RTD) alleging it was owed approximately $12.8 million for delay and disruption damages caused by the general contractor, Regional Rail Partners. After a ten-day bench trial, the trial court awarded Wadsworth over $3.7 million in delay and disruption damages and over $1.9 million in unpaid construction funds. The Court of Appeals reversed, holding that Wadsworth’s verified statement of claim (similar to a lien on a private project) was excessive as a matter of law and that Wadsworth had, therefore, forfeited all of rights to the amounts claimed. The Colorado Supreme Court granted certiorari and reversed the Court of Appeals.
The Court addressed two questions of first impression under the Public Works Act:
First, the Court considered whether disputed or unliquidated amounts — including delay and disruption damages — can lawfully be included in a verified statement of claim.
Second, the Court considered whether a claimant (here, Wadsworth) forfeits all legal rights and remedies if it files an excessive claim, or if it only forfeits the statutory rights and remedies afforded by the Public Works Act.
As to the first question, the Court held that disputed or unliquidated amounts — including delay and disruption damages — can lawfully be included in a verified statement of claim, provided the claimed amounts otherwise fall within the statutory categories of “labor, materials, sustenance, rental machinery, tools, equipment, or other supplies” used in prosecution of the contracted work. The Court held that purely consequential damages — such as lost profits or idle time — fall outside the statute and may not be included in a verified statement of claim. The claim must still satisfy the three-part excessiveness test of § 38-26-110, namely: (1) the claim is greater than the amount due; (2) there is no reasonable possibility the amount is due; and (3) the claimant had knowledge of the overstatement at filing.
The Court rejected the Court of Appeals’ interpretation that the word “due” in the statute excludes disputed claims. A disputed or unliquidated amount “seeks to clarify what, if anything, is due,” while the excessiveness standard under C.R.S. § 38-26-110 focuses on whether the contractor had a reasonable possibility of being owed the amount claimed and whether the contractor knew it was claiming more than was owed. The Court found no inconsistency in recognizing that an amount may be disputed and still have a reasonable possibility of being due.
As to the second question, the Court held that a contractor who files an excessive verified statement of claim forfeits only the statutory rights and remedies created by the Public Works Act — not all rights and remedies otherwise available at law. Thus, a contractor or supplier who overstates a claim may nevertheless pursue common law claims such as breach of contract.
The Court reached this conclusion by examining the legislative history of § 38-26-110, which was enacted in 2003 expressly to mirror the forfeiture provisions of the Colorado Mechanics’ Lien Act. Bill sponsors and supporters consistently stated in both Senate and House committee hearings that the Public Works Act penalty was intended to impose “the same requirements” as the Mechanics’ Lien Act. The Court’s prior interpretation of the Mechanics’ Lien Act’s comparable provision (C.R.S. § 38-22-128) confirmed that forfeiture reaches only lien-related remedies. The Court held that the Public Works Act should be read the same way.
Positive Impact on the Verified Statement of Claim Process
Prior to this ruling, the Court of Appeals interpreted the verified statement of claim statute to limit verified statements of claim to undisputed, liquidated amounts. That interpretation largely rendered the Public Works Act inoperable, especially in those situations where it is most needed — contentious delay and disruption claims. Moreover, contractors and suppliers have been leaving valuable potential damages claims for delay or productivity loss out of their mechanics’ liens because of the potential application of this bad precedent to private projects.
Following the Supreme Court’s holding, contractors and suppliers may now include delay and disruption damages, and other unliquidated amounts in their verified statements of claim, so long as those amounts are grounded in the “labor, materials, equipment, and supply” categories recognized by the statute and are not knowingly inflated. The key protection for the claiming party is that the standard for excessiveness requires actual knowledge of overstatement — a good-faith but ultimately unsuccessful claim no longer triggers forfeiture.
Equally important, the Court’s holding on the scope of forfeiture removes the risk that had loomed over every verified statement of claim – forfeiture of an entire claim. Under the Court of Appeals’ previous interpretation, a contractor who filed even a modestly excessive claim risked losing every avenue of recovery — including common law claims for breach of contract. Following the Supreme Court’s decision, that threat is no longer viable.
As a result, even if a contractor’s verified statement of claim is ultimately found to be excessive, the contractor still retains common law avenues for recovery. This ruling will substantially reduce the chilling effect that the prior ruling had placed on contractors’ and suppliers’ willingness to exercise their rights under the verified statement of claim statute – and, by extension, under the mechanics’ lien statute.
Effect on the Mechanics’ Lien Process
Although the Wadsworth only specifically addresses the Public Works Act, it also carries substantial implications for the Mechanics’ Lien Act, which governs private projects. This is because the Court in Wadsworth repeatedly analogized the two statutes and relied on Mechanics’ Lien Act case law — particularly E.B. Roberts Construction Co. v. Concrete Contractors, Inc. (1985) and Galiant Homes, LLC v. Herlik (2025) — to inform its interpretation of the Public Works Act.
The decision reinforces that the Mechanics’ Lien Act’s excessiveness standard similarly requires knowledge by the contractor at the time of filing. The decision also reinforces that a mechanic’s lien is not rendered excessive merely because the amount ultimately awarded is less than the amount claimed. Contractors and suppliers on private projects should take note that the same good-faith analysis applies: a lien claimant who uses available information to arrive at a reasonable goof faith valuation, even if ultimately incorrect, is not automatically subject to a finding that the lien was excessive.
The Wadsworth decision also distinguished the earlier Court of Appeals decision in Byerly v. Bank of Colorado (2013), which held that a lien was excessive where conditions precedent to payment had not yet been met and the contractor knew it. The Court in Wadsworth clarified that a disputed amount — where the question is how much is owed — is fundamentally different from a premature claim — where the question is whether payment is owed at all.
Key Takeaways for Construction Professionals
- Claimants on Public Works projects may now include delay, disruption, and other unliquidated damages in a verified statement of claim, provided those damages are tied to labor, materials, equipment, and supplies actually used on the project.Claimants may now do so without fear of forfeiting the entire claimed amount.
- Lost profits, idle time, and other purely consequential damages remain outside the scope of what may be claimed in a verified statement of claim.
- An excessive claim under the Public Works Act results in forfeiture of statutory remedies, but will not result in forfeiture of common law claims such as breach of contract or other equitable claims for relief.
- Expert-supported documentation of delay and disruption damages at the time of filing is strongly advised in order to establish a good-faith basis for the claim and defeat a challenge that the claimed amount is excessive.
- The same good-faith excessiveness analysis likely applies to Mechanics’ Liens on private projects – a disputed or uncertain damage amount does not render a lien excessive if the claimant lacked knowledge of overstatement at the time of filing.
DISCLAIMER: This publication is designed to provide general information on pertinent legal topics and is for educational purposes only. This publication does not constitute legal or financial advice and is not intended to create an attorney-client relationship between you and Campbell Killin Brittan & Ray LLC. Changes in the law subsequent to the date of this publication might affect this publications analysis or commentary. Construction professionals or others who are contemplating exercising their statutory rights on a project should consult with qualified legal counsel. For questions regarding this recent development or any other legal issues, the team of construction attorneys at Campbell Killin Brittan & Ray, LLC are happy to assist.
John Zakhem Andy Nickel
Jzakhem@ckbrlaw.com anickel@ckbrlaw.com
303-394-7204 303-394-7208