The Economic Loss Rule Still Bars Tort Claims, Even Those Pleaded As Fraud

Hamon Contractors, Inc., v. Carter & Burgess, Inc. (Colo. App. 2009)

In this April 30, 2009, opinion, the Court of Appeals rejects the position that alleging fraud is enough to avoid application of the economic loss rule.  Instead, the Court holds that the economic loss rule bars even a claim for alleged fraud where the acts complained of took place during a party's performance of its contractual duties.  This holding is consistent with BRW, Inc. v. Dufficy & Sons, Inc., 99 P.3d 66 (Colo. 2004) (holding that the economic loss rule bars misrepresentation claim by subcontractor against design professional, where alleged misrepresentation took place during the performance of the work).  The Court also holds that alleging that fraud took place before the contracts were entered into may not be sufficient to avoid dismissal, since a duty might not exist as a matter of law.