Bermel v. BlueRadios, Inc
2017 COA 20
| Colo. Ct. App. | 2017Background
- Bermel contracted with BlueRadios (2009–2014) as an engineering contractor and signed a Proprietary Information and Inventions Agreement (PIAA) requiring return of company materials on termination.
- After the parties failed to renew in July 2014, Bermel copied and forwarded thousands of company emails/attachments to his personal Gmail, anticipating a wage dispute.
- Bermel demanded unpaid wages; BlueRadios paid him. Bermel sued for breach of contract, unjust enrichment, and violation of the Colorado Wage Protection Act (CWPA).
- BlueRadios counterclaimed for breach of contract, civil theft (§ 18-4-405), and conversion; it secured a preliminary injunction and later obtained a judgment finding Bermel liable on all counterclaims and awarding attorney fees and statutory damages under the civil theft statute.
- Bermel appealed, arguing (1) the economic loss rule bars BlueRadios’ civil theft claim and (2) the trial court erred by granting summary judgment that Bermel was not covered by the CWPA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the economic loss rule bars a civil theft claim under § 18-4-405 | Bermel: economic loss rule (a judicial construct distinguishing contract/tort) precludes statutory civil-theft claim based on contractual dispute | BlueRadios: civil theft is a legislatively created statutory cause of action and remedy that survives the economic loss rule | Held: Economic loss rule does not bar a statutory civil theft claim; statute creates an independent legislative remedy and courts should not abrogate it |
| Whether Bermel was an "employee" under the CWPA and thus entitled to protections | Bermel: he meets CWPA definition of employee and raised factual disputes precluding summary judgment | BlueRadios: Bermel was an independent contractor; submitted affidavit and audit evidence showing independent-contractor status | Held: Summary judgment for BlueRadios reversed. BlueRadios failed to establish lack of genuine issue as to "under the contract" control and whether Bermel was customarily engaged in an independent trade; remand for further proceedings |
| Whether appellate fees should be awarded under the civil theft statute | N/A (BlueRadios sought fees) | BlueRadios: entitled to appellate fees under § 18-4-405 | Held: BlueRadios entitled to appellate attorney fees under the civil theft statute; remanded to trial court to determine amount |
Key Cases Cited
- Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256 (Colo. 2000) (adopting and explaining Colorado's economic loss rule)
- BRW, Inc. v. Dufficy & Sons, Inc., 99 P.3d 66 (Colo. 2004) (duty must arise independent of contract and not be memorialized in it)
- Itin v. Ungar, 17 P.3d 129 (Colo. 2000) (civil theft statute provides private remedy requiring proof of criminal act but not prior conviction)
- In re Marriage of Allen, 724 P.2d 651 (Colo. 1986) (legislative purpose of civil theft statute includes punitive/treble-damages remedy)
- Comptech Int'l, Inc. v. Milam Commerce Park, Ltd., 753 So. 2d 1219 (Fla. 2000) (legislative causes of action trump judicial policies that would abrogate statutory remedies)
- Makoto USA, Inc. v. Russell, 250 P.3d 625 (Colo. App. 2009) (divisional decision holding economic loss rule barred a civil theft claim under facts of that case)
- West v. Roberts, 143 P.3d 1037 (Colo. 2006) (construing overlap between UCC and civil theft statute in a different context)
- Boehme v. U.S. Postal Serv., 343 F.3d 1260 (10th Cir. 2003) (judicial economic-loss principles not applicable where legislature provided statutory remedy)
- Ulbrich v. Groth, 78 A.3d 76 (Conn. 2013) (economic loss rule does not bar statutory consumer protection claims)
- Stuart v. Weisflog's Showroom Gallery, Inc., 746 N.W.2d 762 (Wis. 2008) (economic loss rule cannot bar remedies created by statute)