The Hall & Evans Rocky Mountain Litigation Reporter is a periodic online newsletter directed to a select group of individuals and organizations. In this edition, we summarize two recent decisions from the Colorado Supreme Court and two from the Colorado Court of Appeals.
Topics in this Issue
Supreme Court Abolishes Sudden Emergency Instruction
Court Must Balance Privacy Considerations Before Ordering Production of Computers and Telephone Records
Economic Loss Rule Bars Negligence Claims Against Land Planner
Cases
Supreme Court Abolishes Sudden Emergency Instruction
In January 2004, Michael Johnson was driving westbound near Telluride. Richard Bedor was driving eastbound on the same road. When Johnson’s car encountered a patch of ice, Johnson lost control of his car which then slid across the center lane and collided with Bedor’s car. Both Johnson and Bedor were injured in the accident.
Bedor sued Johnson in negligence for the injuries he received in the accident. At trial, the court gave the jury the standard “sudden emergency instruction”: “a person who, through no fault of his or her own, is placed in a sudden emergency, is not chargeable with negligence if the person exercises that degree of care that a reasonably careful person would have exercised under the same or similar circumstances.” This doctrine recognizes “that a person confronted with sudden or unexpected circumstances calling for immediate attention is not expected to exercise the judgment of one acting under normal conditions.” Bedor objected to the court giving this instruction. The jury returned a verdict finding Johnson not negligent, and Bedor appealed. In an unpublished opinion, the Court of Appeals affirmed. Bedor then filed a Petition for Writ of Certiorari with the Colorado Supreme Court, and the Supreme Court agreed to review the case. The Supreme Court then issued the writ of certiorari to determine if competent evidence supported the trial court’s decision to give the sudden emergency instruction.
After oral argument, however, the Supreme Court requested supplemental briefing on the issue of whether the sudden emergency doctrine has continuing validity in light of Colorado’s comparative negligence regime or should be abolished. After considering the additional briefing submitted, the Supreme Court concluded that the sudden emergency instruction should be abolished.
The Supreme Court reasoned that the sudden emergency instruction was duplicative of standard jury instructions on reasonableness and negligence and may mislead the jury. Standard negligence instructions, given in this case, defined “negligence” as acting in a way that “a reasonably careful person would act under the same or similar circumstances,” and defined “reasonable care” as “the degree of care which a reasonably careful person would use under the same or similar circumstances.” The Court reasoned that the “circumstances” necessarily include those constituting the alleged sudden emergency. Further, the sudden emergency instruction may mislead the jury because it focuses attention on a narrow set of facts (those creating the alleged emergency) and implies that the defendant is subject to a reduced standard of care. Balancing these factors, the Supreme Court reasoned that the instruction’s potential to mislead the jury outweighed its marginal utility. Accordingly, the Supreme Court abolished the sudden emergency instruction in Colorado. Full text of opinion . . . Bedor v. Johnson, case number 10SC65 (Colo. 2013).
Court Must Balance Privacy Considerations Before Ordering Production of Computers and Telephone Records
Christopher Smay worked for two related transportation and logistics companies. In July 2010, Smay resigned and started two competing transportation companies. Alleging that Smay had contacted their customers before he resigned in an attempt to take the customers to his new businesses, plaintiffs sued Smay for breach of loyalty, breach of fiduciary duty, and misappropriation of trade secrets. As part of their discovery requests, plaintiffs sought to inspect Smay’s personal and business computers, smartphones, tablets and other electronic storage devices. Plaintiffs also sought production of Smay’s telephone records for roughly three years. Asserting privacy, Smay refused to produce this material.
Plaintiffs then filed a motion to compel, which Smay resisted on privacy grounds. Without holding a hearing or analyzing the privacy issues, the court granted plaintiffs’ motion in a brief order. Smay then initiated a Rule 21, C.A.R., “original proceeding” in the Colorado Supreme Court, asking the Supreme Court to review the discovery order of the trial court. The Supreme Court granted Smay’s petition and ordered briefing on the merits. After considering the arguments presented by both parties, the Colorado Supreme Court held that the trial court abused its discretion in ordering production of the personal and business computers, smartphones, tablets and telephone records without conducting an analysis of the privacy factors involved.
When a party resists discovery on confidentiality or privacy grounds, the trial court must balance the policy in favor of broad disclosure with the individual’s right to keep personal information private. Under the Supreme Court’s balancing test, the requesting party must prove that it has a compelling need for the information, that it is using the least intrusive means to obtain the information, and that the information sought is not available from other sources. The Supreme Court also held that a party has an expectation of privacy in personal and business computers, smartphones, tablets and telephone records. Because the trial court did not conduct an analysis of the factors involved when faced with an assertion of privacy, as a matter of law the trial court abused its discretion. The Supreme Court therefore remanded the case to the trial court with directions to conduct the required balancing request.
Full text of opinion…Gateway Logistics v. Smay, 2013 CO 25 (April 15, 2013). Darin Lang, a member of Hall & Evans, L.L.C., and Jeanne Baak, an associate at Hall & Evans, represented defendant Smay in these proceedings. For further information about this case, Darin Lang may be reached at (303) 628-3318 or by email to langd@hallevans.com; and Jeanne Baak may be reached at (303) 28-3408 or by email to baakj@hallevans.com.
Economic Loss Rule Bars Negligence Claims Against Land Planner
Coleman Brothers Construction (“Coleman”) hired Stan Clauson Associates (“SCA”) to provide land planning and permit approval services in connection with Coleman’s efforts to develop a parcel of land near Aspen. When SCA sued Coleman for breach of contract, Coleman asserted counterclaims based in negligence arising from Pitkin County’s rejection of the permit submitted by SCA on behalf of Coleman.
SCA filed a motion for summary judgment on the counterclaims asserted by Coleman, arguing that these negligence claims were barred by the Economic Loss Rule. (“ELR”). The trial court agreed and later entered summary judgment for SCA. After the parties settled SCA’s claims against Coleman, Coleman appealed the trial court’s entry of summary judgment.
The Court of Appeals affirmed the ruling of the trial court, noting that under the ELR, a party suffering only economic loss from the breach of an express or implied contractual duty may not assert a tort claim for such breach absent an independent duty of care under tort law. To determine whether the ELR bars a claim, the court must ascertain the source of the duty allegedly breached. If the duty arises from the terms of the contract, a claim for its breach sounds in contract and the ELR would bar a tort claim. On the other hand, if the duty arises from a common law and exists independent of the terms of the contract, a claim for its breach sounds in tort and the ELR will not bar a negligence claim.
Coleman argued that SCA breached the standard of care owed by land planning professionals to their clients. If a contract for professional services does not explicitly adopt the professional standard of care, and the law identifies the service provider as a professional, fulfillment of the professional standard of care is a duty that arises independent of the contract, and the ELR will not bar a claim for breach of the professional duty. Coleman could not, however, identify any Colorado case holding a land planner to a professional standard of care. The Court of Appeals noted that land planners are not similar to other professionals, such as attorneys or accountants, who are licensed by the state and held to a professional standard of care. Because Coleman’s counterclaims against SCA essentially alleged a failure to perform the contract, and because SCA owed Coleman no duty independent of the contract, the Court of Appeals held that Coleman’s counterclaims for negligence were barred by the ELR.
Full text of opinion. . . Stan Clauson Associates v. Coleman Brothers Construction, 2013 Colo. App. LEXIS 44 (Colo. App. 2013). Benton Barton and Peter Middleton, both members of Hall & Evans, L.L.C., represented Stan Clauson Associates in the Pitkin County District Court. Brian Molzahn, also a Member of Hall & Evans, L.L.C., handled the appeal.
CONTRIBUTING AUTHORS AND EDITORS
Andrew D. Ringel, Esq. at 303-628-3453 or by e-mail at ringela@hallevans.com; Robert M. Ferm, Esq. at 303-628-3380 or by email at fermr@hallevans.com; Malcolm Mead, Esq. at 303-628-3301 or by email at meadm@hallevans.com.
INQUIRIES OR COMMENTS
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DISCLAIMER
The Hall & Evans Rocky Mountain Litigation Reporter is for informational purposes only and not for the purpose of offering legal advice or a legal opinion on any matter. No reader should act or refrain from acting on the basis of any statement in the Hall & Evans Rocky Mountain Litigation Reporter without seeking advice from qualified legal counsel on the particular facts and circumstances involved. Links to full text of opinions are provided by the Colorado Bar Association (http://www.cobar.org).