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City of Westminster v. Centric-Jones Constructors9/11/2003
ring summary judgment dismissing its negligence claim against Jones on the basis of the economic loss rule. We disagree.
We review a trial court's decision to grant summary judgment de novo using established standards. Summary judgment is appropriate only if the pleadings and supporting documents demonstrate no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. The moving party has the burden to establish that no genuine issue of material fact exists, and any doubt should be resolved against the moving party. See Aspen Wilderness Workshop, Inc. v. Colo. Water Conservation Bd., 901 P.2d 1251 (Colo. 1995).
If the moving party shows no material fact exists, the nonmoving party must demonstrate the existence of a material fact. C.R.C.P. 56(e); Sullivan v. Davis, 172 Colo. 490, 474 P.2d 218 (1970). The nonmoving party must make this showing with admissible evidence and cannot rely on either pleadings or argument alone. Smith v. Mehaffy, 30 P.3d 727 (Colo. App. 2000); Bauer v. Southwest Denver Mental Health Ctr., Inc., 701 P.2d 114 (Colo. App. 1985).
We discern no disputed issue of material fact and conclude that the trial court correctly applied the economic loss rule.
Under this rule, "a party suffering only economic loss from the breach of an express or implied contractual duty may not assert a tort claim for such a breach absent an independent duty of care under tort law." Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256, 1264 (Colo. 2000).
The economic loss rule focuses on the source of the duty at issue. Tort duties are imposed by law without regard to any agreement. Contractual obligations arise from promises made between parties and are enforced to protect the expectancy interests created by those promises. Town of Alma, supra.
In Town of Alma, the supreme court applied the economic loss rule to preclude a negligence claim for costs of replacing defective water lines installed by a contractor. In concluding that the contractor owed no duty to the town independent of its contractual obligations, the court explained that the contract expressly assigned the contractor a duty to guarantee its quality of workmanship and materials and the contractor allegedly breached this duty. The court also noted that damages involved only the cost to repair and replace the water lines that were the subject of the contract.
Here, as in Town of Alma, the contract includes standards of care. The contract expressly requires that the work be "of good quality and free from faults and defects and in conformance with the Contract documents," that Jones perform in a workmanlike manner, and that Jones provide warranties guaranteeing the quality of the work and materials.
The City does not assert that, in a commercial project, a contractor has an independent duty to the owner merely by virtue of the parties' relationship. Cf. Cosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041 (Colo. 1983)(recognizing independent duty in construction of personal residence).
The City's affiants describe various deficiencies in Jones' construction methods, primarily mishandling of fill below the clearwell that ultimately caused wetting and destabilization of the underlying bedrock. However, Jones' contractual duties included the fill, and therefore, damage to the bedrock from breach of those duties would be attributable to Jones under the contract. Moreover, as in Town of Alma, the City primarily seeks the cost of rebuilding the defective structures that were the subject of the contract and consequential damages allegedly caused by the same construction practices that contributed to those defects.
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