JW CONST. CO., INC. v. Elliott
253 P.3d 1265
Colo. Ct. App.2011Background
- Elliotts hired JW Construction to build a custom home; contract included fixed price portions, allowances, and monthly draws based on costs expended; a change order increased sums despite fixed-price elements.
- JW allegedly altered or fabricated three invoices backing draw requests; Elliottts paid earlier draws and then stopped draws five and six, paying subcontractors directly.
- Elliotts terminated JW for noncompliance with documentation and alleged misrepresentations; JW claimed Elliottts breached by terminating and withholding payments.
- JW filed two mechanics' liens for draws five and six; Elliottts contested them as excessive since they already paid some portions directly to subcontractors.
- Trial court found JW altered invoices, misrepresented costs, and that Elliottts were justified in terminating; court awarded damages for misrepresentation and excessive liens against JW and Wodiuk, with personal liability on Wodiuk later added; case then appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Wodiuk’s personal liability for excessive lien costs | Elliotts: Wodiuk held liable as corporate officer | Wodiuk: only the filer (JW) bears liability | Wodiuk not personally liable; statute confines liability to the filer |
| Standard for liability under excessive lien statute | JW failed to prove reasonable belief; actor knew excess was claimed | Court should apply negligence standard | Court properly applied knowledge-based standard and upheld liability under 38-22-128 |
| Preservation of economic loss rule issue on appeal | Economic loss rule precludes tort claims; should be reviewed | Issue was not preserved for review | Economic loss rule not reviewed; unpreserved issue declined |
| Damages for misrepresentation and concealment | Damages measured by benefit-difference due to misrepresentation | No damages or misrepresentation not proven | Sufficient evidence supports tort damages; misrepresentations induced inflated payments |
| JW’s breach of contract claim not clearly decided | Breach of contract claim unresolved by trial court | Rulings implied rejection or subsumed in damages | Trial court’s rulings effectively resolved the contract claim; remand not required |
Key Cases Cited
- Micciche v. Billings, 727 P.2d 367 (Colo. 1986) (corporate veil and independent legal identity of corporation)
- Alexander Co. v. Packard, 754 P.2d 780 (Colo.App. 1988) (statutory trust; corporate officer fiduciary duty distinct from excessive lien)
- Packard, 754 P.2d 780 (Colo.App. 1988) (see Alexander Co. v. Packard (Colo.App. 1988))
- Rhino Linings USA, Inc. v. Rocky Mountain Rhino Lining, Inc., 62 P.3d 142 (Colo. 2003) (statutory violation not automatically a tort; independent torts require separate action)
- Delta Sales Yard v. Patten, 870 P.2d 554 (Colo.App. 1993) (implicit ruling allowed where explicit challenge not preserved)
- Robinson v. Colo. State Lottery Div., 179 P.3d 998 (Colo. 2008) (discretion to review unpreserved issues; factors include question of law and briefing)
- Newt Olson Lumber Co. v. School Dist. No. 8, 83 Colo. 272, 263 P. 723 (1928) (statutory rights and implied causes of action cited)