Wadsworth v. Regional Rail Partners — Verified Statements of Claim Under the Colorado Public Works Act

Editor’s Note: Wadsworth Revisited

In August 2024, following the Colorado Court of Appeals’ decision in Ralph L. Wadsworth Construction Company, LLC v. Regional Rail Partners, we published Colorado Court of Appeals’ Ruling Highlights Dangers of Excessive Public Works Claims.

At the time, the decision warranted a significant warning to contractors and subcontractors performing public work in Colorado. The Court of Appeals concluded that Wadsworth’s verified statement of claim improperly included unliquidated delay damages and that, because the claim was excessive, Wadsworth forfeited its right to recover the amounts included in the claim. We cautioned contractors to carefully scrutinize verified statements of claim and to avoid including unliquidated damages or amounts that were not yet due and payable.

The Colorado Supreme Court has now reversed that decision.

In Ralph L. Wadsworth Construction Company, LLC v. Regional Rail Partners, 2026 CO 19, the Supreme Court clarified both what may properly be included in a verified statement of claim under Colorado’s Public Works Act and the consequences of filing an excessive claim.  The decision substantially changes the risk analysis underlying our 2024 article. It does not, however, eliminate the need for care when preparing a verified statement of claim. The claimed amounts must still fall within the categories permitted by the Public Works Act, and Colorado’s excessive-claim statute continues to impose meaningful consequences when its requirements are satisfied.

Below, my colleague Olivia Barden examines the Supreme Court’s decision and what it means for contractors and subcontractors pursuing payment on Colorado public works projects.

— David M. McLain

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In Ralph L. Wadsworth Construction Co., LLC v. Regional Rail Partners, 2026 CO 19, 587 P.3d 658, the Colorado Supreme Court addressed whether (1) disputed or unliquidated amounts, including delay and disruption damages, may lawfully be included in a verified statement of claim; and (2) a party that files an excessive claim forfeits all its legal rights and remedies for the amount claimed or only its statutory rights and remedies under the Public Works Act.

Background

In 2013, the Regional Transportation District (“RTD”) contracted with Regional Rail Partners (“Regional Rail”) to design and build the North Metro Rail Line public works project between Thornton and Denver’s Union Station. Regional Rail subcontracted with Ralph L. Wadsworth Construction Company, LLC (“Wadsworth Construction”) for work related to portions of the rail line. The primary contract was valued at more than $343 million. The original subcontract between Regional Rail and Wadsworth Construction was valued at $29 million, but following change orders, Wadsworth Construction was to be paid more than $60 million.

Substantial delays and disruptions impacted the project’s timeline and costs. Consequently, Wadsworth Construction hired an expert to analyze the costs and damages it had incurred due to the delays and disruptions. The expert delivered a report estimating that Regional Rail owed Wadsworth Construction approximately $12.4 million for ongoing delays, disruptions, and changes on the project.

In accordance with section 38-26-107(1), C.R.S. (2025), of the Public Works Act, Wadsworth Construction filed a verified statement of claim with RTD alleging that Regional Rail owed it approximately $15.8 million for labor, materials, and other supplies. Regional Rail took issue with the inclusion of a contractual retention amount, asserting that the retention was not yet owed. Wadsworth Construction then amended its verified statement of claim to approximately $12.8 million (the “verified statement of claim”).

Procedural Posture

Wadsworth Construction initiated this action in Denver District Court against Regional Rail, Balfour Beatty Infrastructure, Inc., Graham Contracting Ltd., Travelers Casualty and Surety Company of America, Balfour Beatty, LLC, and Graham Business Trust (collectively, “Defendants”), seeking unpaid costs.

Defendants alleged that Wadsworth Construction’s verified statement of claim was excessive under section 38-26-110, C.R.S. (2025), and that Wadsworth Construction had therefore forfeited all rights to the amounts claimed in its verified statement of claim.

Following a ten-day bench trial, the trial court determined that Regional Rail had not established that Wadsworth Construction’s verified statement of claim was excessive. The court found that there was a reasonable possibility that the amount sought in the verified statement of claim was due and that Regional Rail had delayed and disrupted Wadsworth Construction’s work. The trial court awarded Wadsworth Construction more than $3.7 million in damages and more than $1.9 million in unpaid construction funds.

Regional Rail appealed. The Colorado Court of Appeals reversed the trial court’s decision regarding the verified statement of claim. Wadsworth Construction then petitioned for certiorari review, which the Colorado Supreme Court granted.

Court’s Analysis

Disputed or Unliquidated Amounts

Wadsworth Construction argued that the plain language of section 38-26-107 of the Public Works Act allows a verified statement of claim to contain disputed or unliquidated amounts, including delay and disruption damages, to the extent those amounts fall within the limitations set forth in sections 38-26-107 and 38-26-110.

The Colorado Supreme Court agreed, concluding that “a contractor or subcontractor may file a verified statement of claim for a broad category of unpaid costs related to the scope of contracted work, namely, ‘labor, materials, sustenance, or other supplies’ or the provision of any ‘laborers, rental machinery, tools, or equipment.'” Wadsworth, 587 P.3d at 664. Thus, unpaid costs falling within these statutory categories and used in the prosecution of the work may be included in a verified statement of claim.

Importantly, the Court distinguished between an amount that is disputed or unliquidated and an amount that is not yet due because a contractual condition precedent to payment has not occurred. A disputed or unliquidated amount concerns what amount, if any, is due; a condition precedent concerns when an amount becomes due. Accordingly, an amount does not fall outside the statute merely because the parties dispute it or because the precise amount has not yet been determined.

The Court further explained that delay and disruption damages may be included to the extent they represent the types of costs identified in section 38-26-107(1). The Court cautioned, however, that purely consequential damages, such as lost profits and idle time, do not fall within the statute.

The Court also clarified what must be shown to establish an excessive claim. “[T]o prove that a verified statement of claim is excessive, a challenging party must therefore demonstrate that, at the time of filing, (1) the claim was for an amount greater than the amount due; (2) there is no reasonable possibility that the amount claimed was due; and (3) the claimant knew that the amount claimed was greater than the amount due.” Id.

Thus, the fact that a claimant ultimately recovers less than the amount included in its verified statement of claim does not, standing alone, establish that the claim was excessive.

Penalty for Excessive Claims

Wadsworth Construction also argued that the Court of Appeals erred in concluding that a claimant who files an excessive verified statement of claim forfeits any and all rights and legal remedies. Section 38-26-110(1) provides that a claimant who violates the statute and files an excessive claim “shall forfeit all rights to the amount claimed” and shall be liable for costs and reasonable attorney fees.

Wadsworth Construction argued that this provision means a claimant found to have filed an excessive claim forfeits only the statutory rights and remedies afforded by the Public Works Act. Regional Rail argued that the statutory language requires forfeiture of any and all rights and remedies to the amount claimed.

The Colorado Supreme Court found the statutory language ambiguous and looked to, among other things, the statute’s legislative history and the analogous forfeiture provision in Colorado’s Mechanics’ Lien Act.

Section 38-22-128, C.R.S. (2025), of the Mechanics’ Lien Act provides that a person who files an excessive lien “shall forfeit all rights to such lien.” The Supreme Court has construed this language to mean that a claimant who files an excessive lien forfeits its mechanics’ lien rights and remedies, but not other available legal remedies. See E.B. Roberts Construction Co. v. Concrete Contractors, Inc., 704 P.2d 859 (Colo. 1985).

The Court concluded that the legislative history of section 38-26-110 demonstrated an intent for the scope of forfeiture under the Public Works Act to mirror the forfeiture under the Mechanics’ Lien Act. Accordingly, a claimant who files an excessive verified statement of claim forfeits only the statutory rights and remedies afforded by the Public Works Act, not otherwise available legal remedies.

Key Takeaways

The Wadsworth Construction decision provides important guidance regarding verified statements of claim under Colorado’s Public Works Act. Disputed or unliquidated amounts, including delay and disruption damages, may be included in a verified statement of claim when the underlying amounts represent labor, materials, sustenance, rental machinery, tools, equipment, or other supplies used in the performance or prosecution of the work and the claim is not otherwise excessive under section 38-26-110.

The decision also makes clear that the amount ultimately recovered is not determinative of whether the verified statement was excessive. The inquiry focuses on the circumstances existing when the claim was filed, including whether there was a reasonable possibility that the amount claimed was due and whether the claimant knew that the amount claimed exceeded the amount due.

Conclusion

The Colorado Supreme Court concluded that “disputed or unliquidated amounts may lawfully be included when the claimed amounts represent labor, materials, sustenance, rental machinery, tools, equipment, or other supplies used in the prosecution of the work, and the inclusion of such amounts does not constitute an excessive claim under section 38-26-110.”

The Court further concluded that “a claimant who files an excessive claim pursuant to section 38-26-110 of the Public Works Act forfeits only the statutory rights and remedies created by the Act, not all rights and remedies otherwise available at law.”

Practical Implications

• Claims under the Public Works Act are not limited to undisputed or liquidated sums. Contractors and subcontractors may include disputed or unliquidated amounts in a verified statement of claim, provided the underlying costs fall within the categories permitted by section 38-26-107.
• When including delay and disruption damages in a verified statement of claim, contractors and subcontractors should identify and substantiate the underlying costs for labor, materials, sustenance, rental machinery, tools, equipment, or other supplies used in the performance or prosecution of the contracted work. Purely consequential damages, such as lost profits and idle time, are not within the statute.
• Whether a verified statement of claim is excessive is determined based on the circumstances existing at the time of filing. A claimant’s ultimate recovery of less than the amount claimed does not, by itself, establish an excessive claim.
• If an excessive claim is filed, the claimant forfeits the statutory rights and remedies provided by the Public Works Act, not otherwise available contractual or common-law remedies. The Act also provides for liability for costs and reasonable attorney fees when its excessive-claim provision is violated.
• Because the excessive-claim inquiry focuses on what was reasonably supportable and known at the time of filing, contractors and subcontractors should maintain contemporaneous documentation supporting the amounts included in a verified statement of claim.