“Listen, this old system of yours could be on fire and I couldn’t even turn on the kitchen tap without filling out a 27b/6.” Harry Tuttle – Brazil. In this case, Defendant’s employee, while repairing a cooling system, caused a tank of ammonia to explode, causing property damage. Plaintiff sued in tort, not breach of contract. The court of appeals affirmed dismissal under the economic loss rule (ELR). No tort duties existed outside of the repair contract because Plaintiff could have sought consequential damages, equal to tort damages, even with a limitation-of-liability clause. Though ammonia is toxic, the standard of “reasonable care” in tort law is the same as “prudent and workmanlike” because Colorado does not recognize a distinct “highest” degree of care. The court also held that ELR applies to property damage and negligent supervision is not a distinct tort claim.
Tag Archives: Standard of Care
Stan Clauson Associates v. Colemen Brothers Construction, Coleman Ranch, Dan Coleman, 2013COA7 (January 17, 2013)
“We are all professionals here…” But not if you are a land planner. In this case, a developer hired a land planner to help develop a property. Eventually, the planner sued the developer for breach of contract, who counter-sued for negligence. The counterclaim was dismissed based on the economic loss rule. That rule dismisses tort claims that are really contract claims, unless there is an independent tort duty outside of contract duties. Professionals owe independent tort duties consistent with other members of the profession and not just a duty to substantially perform under the contract. CRS 12-1.5-101 et. seq. lists 45 professions. The common law will recognize a duty only if the risk, likelihood of loss, burden, and consequences justify imposing a higher duty. The court of appeals held land planners are not professionals so the economic loss rule barred the counterclaim.
Win the battle, lose the war. In this construction contract case, on the evening before trial and after a year of litigation, Defendant moved to dismiss Plaintiff’s tort claim on the grounds that it was barred by the economic loss rule. The trial court did so, ostensibly under CRCP 12(b), but allowed Plaintiff to add a breach of contract claim. Plaintiff won at trial. Defendant sought, but was denied, mandatory attorneys’ fees because the tort claim was dismissed. The court of appeals held that, because Defendant moved to dismiss after the answer was filed, it was a CRCP 12(c) motion, so fee awards are not mandatory. The court also held that when a construction contract provides its own standard by which work must be performed, the contract’s standard applies, not industry standards. And, if a lay person could apply that standard, expert testimony may not be, and was not required here.