Chapter 18 - § 18.12 • INTENTIONAL TORTS

• Jurisdiction: Colorado

§ 18.12 • INTENTIONAL TORTS

While a survey of the reported Colorado construction disputes reveals that intentional torts, particularly fraud, are asserted with some frequency, it is difficult to reasonably and usefully categorize the decisions because of the fact-specific nature of intentional tort claims. Therefore, rather than attempting to do so, this section will discuss a number of intentional torts that have been asserted in construction disputes, some of the decisions, and their outcomes.

§ 18.12.1-Interference with Contract

In L&M Enterprises, Inc. v. City of Golden,³²⁸ the plaintiff contractor submitted a bid on a public works project. Although it was the low bidder, the contract was awarded to the second lowest bidder.³²⁹ The contractor sued Golden for "interference with the formation of contract" and on other theories. That claim was dismissed, as were the others.³³⁰ While Colorado recognizes claims for tortious interference with contract, such claims are against third parties, not the party with whom the contract was sought.³³¹ Likewise, a contractor could not recover against the owner with whom it contracted for tortious interference with contract since "an essential element of this tort is the existence of a contract between the plaintiff and a third party."³³²

§ 18.12.2-Outrageous Conduct

"Outrageous conduct is that which is so outrageous and extreme as to go beyond all possible bounds of decency and to be regarded as atrocious and utterly intolerable in a civilized community."³³³ To prevail, a plaintiff must establish that by extreme and outrageous conduct, he or she suffered severe emotional distress.³³⁴ A contractor was not liable for outrageous conduct for failing to discover whether asbestos was in a building before starting its work because there was no evidence that the contractor knew of an existing asbestos problem and intentionally disregarded that hazard by proceeding with the work.³³⁵

§ 18.12.3-Abuse of Process/Malicious Prosecution

In Eiteljorg v. Bogner,³³⁶ homeowners sued a building contractor based upon alleged breach of warranty with respect to the quality of a home. The contractor asserted a counterclaim for malicious prosecution.³³⁷ The homeowners' claim was dismissed and the contractor was awarded damages, including damages for his lost time, mental suffering, and the attorney fees incurred in defending the action.³³⁸

§ 18.12.4-Fraud/Intentional Misrepresentation

In the construction context, fraud claims are often asserted against contractors based upon over-billing, failing to pay subcontractors and suppliers in spite of having received payment from an owner, and being paid for work that is either never completed or completed in a totally unacceptable manner. If a plaintiff establishes fraud, he or she is generally entitled to exemplary damages in addition to actual damages.³³⁹ It is the possibility of an exemplary damage award that presumably makes fraud claims appealing to plaintiffs in construction disputes.

In Tincombe v. Colorado Construction & Supply Corp.³⁴⁰ the plaintiffs sued a contractor they had engaged to complete certain home improvements for fraud based upon the fact that the work was never completed and the work actually undertaken was substantially defective. The trial court found that the homeowners had been fraudulently induced to enter the contract and awarded them damages in the amount they had paid the contractor together with exemplary damages.³⁴¹ The court of appeals affirmed the trial court's decision and determined that restitution by the breaching party of any benefit it received is appropriate where a breach goes to the essence of a contract.³⁴²

A sub-subcontractor was found liable to a contractor for fraud where the...