2012 COA 134
Colo. Ct. App.2012Background
- From 1992, Colorado college employees contributed to a trust for long‑term disability benefits, with trustees appointed to supervise by each college; the original trust was later replaced by CHEIBA, with reserves intended to fund future benefits; Mesa State withdrew in 2005 and sought release of about $1 million to fund a new trust; CHEIBA refused; several hundred employees filed a class action alleging they were third‑party beneficiaries and that trustees and colleges breached trust contracts and fiduciary duties, including good faith and fair dealing; plaintiffs sought an accounting and declaratory judgment on rights regarding the two trusts; case was moved from Mesa County to Denver Probate Court; defendants moved to dismiss under CGIA arguing sovereign immunity; probate court denied the dismissal; the appeal addresses CGIA immunity and whether claims lie in tort or contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CGIA applicability to these claims. | Employees' claims against trustees and colleges may not be barred. | CGIA immunity precludes actions that lie in tort against public entities/employees. | Some claims lie in tort and are barred; others remain contractual. |
| Breach of contract vs. tort against trustees. | Trust agreements create fiduciary duties; alleged breach arises from contract. | Fiduciary duties may create independent tort duties. | Trustees’ breach of fiduciary duties is contractual; economic loss rule bars tort recovery against trustees. |
| Implied covenant breach by trustees and colleges. | Implied covenant breach is a contractual claim not barred by CGIA. | Implied covenant breach may be tortious. | Implied covenant claim against trustees not barred; against colleges barred as to fiduciary duties but not as to the covenant. |
| Inverse condemnation claim. | Inverse condemnation is a non‑tort, non‑contract action against government. | CGIA may bar tort claims. | Inverse condemnation is not barred by CGIA; not a tort or contract claim. |
| Mistake claims (unilateral/mutual). | Attorney misconduct alleged; seeks declaratory relief voiding waiver provision. | Mistake claims arise from contract and equitable relief; CGIA not applicable. | Mutual/unilateral mistake claims lie in contract and are barred by CGIA. |
Key Cases Cited
- Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256 (Colo. 2000) (economic loss rule; overlaps with CGIA determine tort vs. contract)
- BRW, Inc. v. Dufficy & Sons, Inc., 99 P.3d 66 (Colo. 2004) (three BRW factors for determining source of duty; independent tort duty may arise)
- CAMAS Colorado, Inc. v. Board of County Comm'rs, 36 P.3d 135 (Colo. App. 2001) (equitable relief for mistake; CGIA limits on tort claims; contract focus)
- Robinson v. Colorado State Lottery Div., 179 P.3d 998 (Colo. 2008) (claims that could lie in both tort and contract barred by CGIA)
- Berg v. State Bd. of Agriculture, 919 P.2d 254 (Colo. 1996) (CGIA generally excludes contract claims; exceptions noted)
- Decker v. Browning-Ferris Industries of Colorado, Inc., 931 P.2d 436 (Colo. 1997) (tort vs. contract implied covenants; CGIA considerations)
- Cary v. United of Omaha Life Ins. Co., 68 P.3d 462 (Colo. 2003) (implied covenant(good faith) generally not tort unless insurance context; limits application)