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A.C. Excavating v. Yacht Club II Homeowners Association6/27/2005
negligence when the duty breached is a contractual duty and the harm incurred is the result of failure of the purpose of the contract." 10 P.3d at 1261, (citing Jardel Enterprises, Inc. v. Triconsultants, Inc., 770 P.2d 1301, 1303 (Colo. App. 1988)). We concluded in Town of Alma that the economic loss rule really turned on an examination of the source of the duty between the parties: if the source of the duty was contractual, then only contractual remedies applied.
On the other hand, we carved out an exception to the rule contoured to circumstances "where we have recognized the existence of a duty independent of any contractual obligations. . . ." Id. at 1263. We reaffirmed the test set out in Taco Bell, Inc. v. Lannon, 744 P.2d 43 (Colo. 1987), as a means of determining the existence of such a duty of care independent of a contract. Id. Essentially, we declared in Taco Bell that whether the plaintiff's interest that has been infringed by the defendant deserves protection is dependent on a weighing of several factors. 744 P.2d at 46.
In Town of Alma, the Town sought damages for the cost of repair and replacement of water lines against Azco, a company hired by the Town to install a water system. We characterized the claim as an economic loss claim. Town of Alma, 10 P.3d at 1264. Then, applying the Taco Bell test to determine whether an independent duty of care would allow the plaintiffs to escape application of the economic loss rule, we concluded there was no such duty and upheld the trial court's dismissal of the Town's suit. Id. at 1265. The court should treat the claims here similarly.
A. The pre-Town of Alma trilogy
In Town of Alma, we identified three cases in which we had reached different results under similar circumstances: Lembke Plumbing and Heating v. Hayutin, 148 Colo. 334, 366 P.2d 673 (1961); Metropolitan Gas Repair Serv., Inc. v. Kulik, 621 P.2d 313 (Colo. 1980) and Cosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041 (Colo. 1983). In my view, those cases can be analogized to large, venerable trees allowed to stand in the midst of a new thoroughfare -- with the street constructed around them. They represent precedent, and must be honored -- however, because they are inconsistent with the development of the law in this court and elsewhere, they must be limited to their facts and very narrowly construed.
Lembke Plumbing involved two negligence claims by homeowners against Lembke Plumbing, a company they had engaged to install plumbing pipelines and repair a heating system. 148 Colo. at 337; 366 P.2d at 675. Lembke's employees failed to protect the plumbing pipelines during installation, which resulted in a severed pipeline that caused severe flooding. Ultimately, the flooding even dislocated the house from its foundation. Id. In the second negligence suit, while repairing the plaintiffs' heating system, Lembke's employees stepped on and damaged a copper gauge tube, causing water to accumulate in a pit casing. Id. The defendant sought to avoid any liability by invoking the parties' agreement, which imposed no duty on Lembke to exercise due care and caution and the necessary degree of skill involved in a plumbing contract. Id. This court rejected the defendant's assertions, concluding that there was a common-law obligation to exercise due care under such circumstances. Id.
In Metropolitan Gas, the plaintiff brought a negligence suit against Metropolitan Gas for property damage resulting from an explosion of a gas operated boiler. 621 P.2d at 316. Metropolitan Gas had contracted with the plaintiff to perform repair work on the boiler. Id. The complaint alleged Metropolitan Gas was negligent in failing to discover a plugged or obstructe
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