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Logixx Automation9/12/2002
erly broad because it could be construed to apply to other areas of manufacturing, such as the airline and automobile industries. However, we decline to speculate as to whether the agreement would be overly broad in a different setting because, here, Michels marketed the Return Shop as a direct competitor to the Preformer in the same market area -- manufacturing illuminated signs.
VII. Economic Loss Rule
Michels contends that the conspiracy claim is barred by the economic loss rule and that the trial court erred in ruling otherwise. We conclude any error was harmless.
In Town of Alma v. Azco Construction, Inc., 10 P.3d 1256 (Colo. 2000), and its companion case, Grynberg v. Agri Tech, Inc., 10 P.3d 1267 (Colo. 2000), the supreme court expressly adopted the economic loss rule in Colorado to maintain a distinction between contract and tort law. The essential difference between tort and contract obligations is the source of the parties' duties. Tort obligations arise from duties imposed by law and are designed to protect all citizens from the risk of physical harm to their persons or to their property. These duties are imposed by law without regard to any agreement or contract.
In contrast, contract obligations arise from promises made between parties. Contract law is intended to enforce the expectancy interests created by the parties' promises so that they can allocate risks and costs during their bargaining. Town of Alma v. Azco Constr., Inc., supra.
The economic loss rule provides that a party suffering only economic loss from the breach of an express or implied contract 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., supra.
Accordingly, the companies cannot maintain a conspiracy claim associated with the breach of contract unless an independent duty of care exists.
Here, in effect, the companies argue that because Michels, was a party to the settlement agreement, he had an independent duty not to enter into a civil conspiracy with another party to the contract to breach the contract, particularly when the alleged coconspirator was a former board member of the companies.Under Azco, our analysis focuses on whether Michels had an independent duty not to conspire to breach a contract with another signatory to that contract. See Grynberg v. Agri Tech, Inc., supra (the focus in an analysis under the economic loss rule is on the source of the duties alleged to have been breached). If he did, the conspiracy charge was not barred by the economic loss rule. However, if no independent duty existed, then under the economic loss rule, the conspiracy claim was invalid.
As discussed below, we conclude that a conspiracy to breach a contract claim cannot be maintained when the two parties alleged to have participated in the conspiracy are signatories to the contract. Therefore, Michels had no independent duty not to conspire to breach the settlement agreement with another signatory to that agreement. Thus, the conspiracy claim is barred by the economic loss rule, and the trial court erred by submitting this claim to the jury.
The parties agree that no case law in Colorado has addressed whether there can be a conspiracy by two or more parties to a contract to breach that contract.
In Nelson v. Elway, 908 P.2d 102, 106 (Colo. 1995), the supreme court addressed the elements of civil conspiracy in conjunction with the tort of breach of fiduciary duty: "To establish a civil conspiracy in Colorado, a plaintiff must show: (1) two or more persons; (2) an object to be accomplished; (3) a meeting of the minds on the object or
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