## Facts

- The City and County of Denver undertook a public-works project to build two steel bridges on Speer Boulevard over the Platte River.
- The City contracted with BRW, Inc., an engineering firm, to design the project and provide construction administration services, including preparing drawings and specifications.
- BRW subcontracted inspection/construction-administration functions to Professional Service Industries, Inc. (PSI) to inspect construction for compliance with BRW’s plans and specifications.
- The City separately contracted with a general contractor, who subcontracted work to lower-tier subcontractors, including Dufficy & Sons, Inc.
- Dufficy’s subcontract required it to fabricate, paint, and ship structural steel and to perform in accordance with BRW’s plans and specifications incorporated into the project’s contract documents.
- Dufficy alleged it incurred unexpected delays and extra costs tied to the specified paint system and to BRW’s/PSI’s interpretation, direction, and inspection of painting work.
- Dufficy sought additional compensation through the project’s administrative dispute process but filed suit against BRW and PSI before that process concluded.
- Dufficy asserted negligence against BRW (specifications and administration), negligence against PSI (inspection and direction), and negligent misrepresentation, seeking only economic damages (no personal injury or non-contract property damage).

## Issues

1. Whether Colorado’s economic loss rule bars a subcontractor’s negligence and negligent misrepresentation claims seeking purely economic damages against a design engineer and the engineer’s inspection agent when there is no direct contract between them.
2. Whether the asserted duties of care were independent tort duties or duties defined and allocated by a network of interrelated construction contracts.

## Decision

- The Colorado Supreme Court reversed the court of appeals and reinstated the trial court’s dismissal of Dufficy’s tort claims.
- The court held the economic loss rule barred Dufficy’s negligence and negligent misrepresentation claims against BRW and PSI.
- The court concluded BRW’s and PSI’s relevant duties were not independent tort duties; they were defined by and arose from the interrelated contractual structure governing the project.
- Contract law, including the project’s contractual remedies, provided the exclusive avenue to address Dufficy’s alleged economic losses.

## Legal Principles

- The economic loss rule bars tort claims for purely economic loss when the claimed duty arises from contractual obligations and no independent duty exists under tort law.
- Determining an “independent duty” turns on the parties’ contractual relationships and the allocation of risk and responsibilities in interrelated contracts, not on a defendant’s professional status.
- Duty analysis requires identifying the duty alleged in tort and deciding whether it is independent of, or instead memorialized in or derived from, the contractual framework.
- In multi-party construction projects, interrelated contracts can establish and limit the duties and remedies among participants, including downstream parties, through incorporation of plans/specifications and agreed dispute procedures.

## Conclusion

The court held that, in a complex construction project governed by interrelated contracts, a subcontractor may not reframe alleged failures to perform contract-defined design and inspection responsibilities as tort claims for purely economic damages; absent an independent tort duty, the economic loss rule confines the subcontractor to contractual remedies.


BRW, Inc. v. Dufficy & Sons, Inc., 99 P.3d 66 (Colo. 2004)