Wednesday, July 10, 2013

Land Planners Not Held to Professional Standard of Care

Recently, the Colorado Court of Appeals indicated that there is no professional duty of care applicable to land planners.  See Stan Clauson Associates, Inc. v. Coleman Brothers Constr., LLC, 297 P.3d 1042 (Colo. App. 2013).  Stan Clauson Associates, Inc. (“SCA”) agreed to provide land planning services to Coleman Brothers Construction, LLC (“Coleman”) for property referred to as Crown Mountain in a letter and then verbally agreed to provide a development analysis for another property, located on Emma Road in Basalt, Colorado.  Thereafter, SCA sent letters to the defendant concerning the possible subdivision and development of the Emma Road property. 

Approximately two years later, SCA sued Coleman for breach of the verbal agreement concerning the Emma Road property.  Coleman then asserted counterclaims against SCA for negligently providing inaccurate advice about whether the Emma Road property could be subdivided and developed, and that the county had denied the planned unit development sketch plan SCA prepared and submitted on behalf of Coleman.  The district court granted SCA’s motion for summary judgment thereby concluding that the economic loss rule barred Coleman’s negligence counterclaims.  The Court of Appeals agreed.

In its opinion, the Court of Appeals reiterated the economic loss rule espoused in the Colorado Supreme Court in the Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256, 1264 (Colo. 2000) case.  “Under the economic loss rule, ‘a party suffering only economic loss from the breach of an express or implied contractual duty may not assert a tort claim for such a breach absent an independent duty of care under tort law.’”  Stan Clauson Associates, Inc., 297 P.3d at 1045; quoting Town of Alma, 10 P.3d at 1264.  In determining whether the economic loss rule bars a claim, a court must identify the tort duties alleged in the claim as well as the alleged contractual duties.  A court must also ascertain whether the act or omission alleged to have breached a tort duty would also be a material breach of the contract.   Stan Clauson Associates, Inc., 297 P.3d at 1045.                                   

While it is generally understood that professionals are held to duties and standards of care independent of any established by contract, Coleman nor the Court of Appeals could not find a Colorado case that held a land planner to a professional standard of care.  The court explained that service providers who have duties independent of their contracts and are held to professional standards are identified in Title 12 of the Colorado Revised Statutes.  See C.R.S. § 12-1.5-101 – C.R.S. § 12-71-104.  The Court of Appeals found that all of Coleman’s claims concerning SCA’s work being “inaccurate,” “juvenile,” not “state of the art,” “rushed,” and late were all allegations that SCA failed to substantially perform its duties under the contract.  Stan Clauson Associates, Inc., 297 P.3d at 1047.  As such, the court found that these claims give rise to a breach of contract claim but not claims independent of the contract. 

In doing so, the Court of Appeals concluded that SCA did not owe Coleman a duty independent of the contract.  “Land planning is not a profession that is held to an independent duty and standard of care under any Colorado statute, nor have land planners otherwise been held to such a duty or standard at common law in our state.”  Id. 

Those looking to hire land planners will want to keep this opinion in mind when crafting a contract for such services as this opinion seemingly limits your recourse in the event of a problem.

For additional information regarding Colorado construction litigation, please contact David M. McLain at (303) 987-9813 or by e-mail at mclain@hhmrlaw.com.

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The information contained in this blog is provided for informational purposes only. It is not legal advice and should not be construed as providing legal advice on any subject matter.