Opinion ID: 2636000
Heading Depth: 1
Heading Rank: 2

Heading: The Colorado Governmental Immunity Act

Text: We review the issue of whether Robinson's claims are barred by the CGIA de novo because it concerns a matter of statutory construction. City of Colo. Springs v. Conners, 993 P.2d 1167, 1171 (Colo.2000). Thus, we are not bound by the lower court's determination. Id. Pursuant to the CGIA, public entities are immune from liability in all claims for injury that lie in tort or could lie in tort, unless the claim falls within an exception to that immunity. Section 24-10-106(1), C.R.S. (2007), provides: A public entity shall be immune from liability in all claims for injury which lie in tort or could lie in tort regardless of whether that may be the type of action or the form of relief chosen by the claimant except as provided otherwise in this section. In contrast, the CGIA was not intended to apply to actions grounded in contract. Berg v. State Bd. of Agric., 919 P.2d 254, 258 (Colo.1996). Because Robinson's claims here are framed in the pleadings as contractual and quasi-contractual, rather than tort claims, the issue before us is whether these claims lie in tort or could lie in tort and are thus barred by the CGIA. As we have made clear, the form of the complaint is not determinative of the claim's basis in tort or contract. Id.; City & County of Denver v. Desert Truck Sales, Inc., 837 P.2d 759, 764 (Colo.1992). Instead, a court must consider the nature of the injury and the relief sought. See Conners, 993 P.2d at 1175-76; Adams v. City of Westminster, 140 P.3d 8, 11 (Colo.App.2005); CAMAS Colo., Inc. v. Bd. of County Comm'rs, 36 P.3d 135, 138 (Colo.App.2001). When the injury arises either out of conduct that is tortious in nature or out of the breach of a duty recognized in tort law, and when the relief seeks to compensate the plaintiff for that injury, the claim likely lies in tort or could lie in tort for purposes of the CGIA. See Conners, 993 P.2d at 1176; Adams, 140 P.3d at 10 (holding that the CGIA was intended to apply when the claimant seeks redress from injuries that result from tortious conduct); CAMAS Colo., 36 P.3d at 138 (noting that a court must examine the source from which the allegedly breached duty arises). Although the nature of the relief requested is not dispositive on the question of whether a claim lies in tort, the relief requested informs our understanding of the nature of the injury and the duty allegedly breached. See generally Conners, 993 P.2d at 1170-76 (holding that although the form of relief alone does not govern the categorization of a claim as a tort or other type of action, a trial court must consider the nature of the relief sought to determine whether a particular claim lies in tort or could lie in tort). We assess the nature of the injury and the relief requested on a case-by-case basis through a close examination of the pleadings and undisputed evidence. See Berg, 919 P.2d at 259. Not surprisingly, where the nature of the injury and the relief requested implicate both tort and contract, the analysis becomes more complicated. Indeed, certain common law tort claims that are expressly intended to remedy economic loss such as fraud or negligent misrepresentation can exist independent of or in conjunction with a contractual claim. Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256, 1263 (Colo.2000). Yet, these economic-loss claims sound in tort. Id. For example, a contracting party's negligent misrepresentation of material facts prior to the execution of an agreement may provide the basis for a tort claim asserted by a party detrimentally relying on such negligent misrepresentations. Keller v. Smith Harvestore Prods., 819 P.2d 69, 72 (Colo. 1991). Thus, the plaintiff who has been fraudulently induced to enter into the contract may either sue to rescind the contract or affirm the contract and sue in tort for the damages caused by the fraudulent act. W. Cities Broad., Inc. v. Schueller, 849 P.2d 44, 48 (Colo.1993). In these areas where there is such overlap, claims that could arise in both tort and contract are barred by the CGIA, while claims arising solely in contract are not subject to the CGIA. We have had several opportunities to consider whether a particular claim lies solely in contract or whether it could also lie in tort and would thus be barred by the CGIA. In Berg, we addressed the question of whether the plaintiff's particular claim of promissory estoppel was actually based on a theory of equitable estoppel, which is fundamentally a tort theory because it is based on the misrepresentation of facts. 919 P.2d at 259. There, a former employee of Colorado State University alleged that the University promised to provide health care coverage at a level at least equal to that which the employee had received at the time of his retirement and that it failed to provide such coverage. Id. Because the essence of the claim was the breach of a promise that was detrimentally relied upon rather than alleged misrepresentations of certain facts, we held that the claim was not actually a tort claim for the purposes of the CGIA. Id. Our reasoning in Berg was based on a similar case, Board of County Commissioners v. DeLozier, in which this court distinguished promissory estoppel claims from the theory of equitable estoppel. 917 P.2d 714, 716-17 (Colo.1996). There, DeLozier alleged that a County Commissioner had promised her that the next open paramedic position with the ambulance service would be offered to her, but the Board later failed to offer her the position even though DeLozier had left her previous employment and moved to Summit County. Id. at 715. Because DeLozier's claim was not based on any misrepresentations of fact and could not support a claim for fraud or misrepresentation, we held that her claim was properly characterized as one of promissory estoppel rather than equitable estoppel. Id. at 717. We stated: In an equitable estoppel claim for negligent misrepresentation of facts, the misrepresentation must be of material fact that presently exists or has existed in the past. A promise relating to future events without a present intent not to fulfill the promise is not actionable as a tortious misrepresentation of facts. Thus, a claim of equitable estoppel lies in tort, whereas a claim of promissory estoppel lies in contract. Id. at 716 (citations omitted). [5] Thus, DeLozier's claim was contractual and was not barred by the CGIA. Id. As Berg and DeLozier illustrate, a claim that is supported by allegations of misrepresentation or fraud is likely a claim that could lie in tort. See Berg, 919 P.2d at 259; DeLozier, 917 P.2d at 716-17; see also Patzer v. City of Loveland, 80 P.3d 908, 912 (Colo.App.2003) (explaining that a claim that is based not on a promised performance in the future, but rather on an alleged misrepresentation of facts is fundamentally a tort claim barred by the CGIA); Lehman v. City of Louisville, 857 P.2d 455, 457 (Colo.App. 1992) (holding that when the essence of the claim is either negligent or intentional misrepresentation, the claim could lie in tort). In sum, these cases apply our general rule that courts must assess the nature of the injury underlying the claim to determine whether the injury arose out of tortious conduct or the breach of a duty arising in tort and thus whether the claim could lie in tort.
We turn first to Robinson's contractual claims for relief: (1) breach of express contract; (2) breach of UCC express warranties; (3) breach of UCC implied warranties; and (4) breach of implied covenant of good faith and fair dealing. Underlying these claims are the following factual allegations regarding the Lottery's conduct. The Lottery sells instant scratch game tickets for a significant time period after all represented and advertised prizes are awarded when players have no chance of winning the prizes. The Lottery is aware that these scratch tickets do not have the represented prize available and that an instant scratch ticket without a grand prize would not sell. In fact, the Lottery continues to encourage the purchase and sale of scratch tickets that have no more represented prizes available. By ignoring the fact that it is selling scratch tickets that cannot win the prize used to induce purchase, the Lottery brings in millions of dollars per year in revenue from tickets purchased when the scratch player has no chance of winning the prize that he or she sought to win. For example, tickets that Robinson purchased were emblazoned with the words win up to $10,000 even though the last $10,000 prize had already been awarded. Robinson paid $1 to $2 per scratch ticket and would not have done so if she had been aware that the represented and advertised prizes were no longer available at the time of purchase. Robinson contends that her underlying injury arises out of the Lottery's failure to deliver what it offered, namely a chance to win one of the represented and advertised prizes. Specifically, Robinson submits that she is not arguing that the Lottery wrongfully induced her to enter into an unfavorable contract. However, the CGIA is less concerned with what the plaintiff is arguing and more concerned with what the plaintiff could argue. See Berg, 919 P.2d at 258. As we stated previously, the form of the complaint is not determinative of whether the claim lies in tort or could lie in tort. Id. Here, a review of the factual allegations supporting Robinson's claims for relief reveals that the underlying injury is based on the Lottery's alleged misrepresentations. Specifically, the injury arises out of the Lottery's misrepresentations regarding the availability of the represented prizes, which induced the purchase of scratch tickets. Thus, unlike Berg and DeLozier, where the court determined that the plaintiff's allegations could not support a claim for fraud or misrepresentation, Robinson's allegations in the complaint would appear to support a tort claim. Consequently, regardless of whether the Lottery breached any contractual duties, the essence of the injury here is tortious in nature and would support a claim for the breach of a duty arising in tort. Furthermore, in this instance, the nature of the relief requested does not deter our conclusion that Robinson's contractual claims could lie in tort. Although Robinson is vague about the specific damages she is requesting in conjunction with her contractual claims, Robinson does state that the Lottery's conduct has resulted in damages including but not limited to the money expended on lottery tickets. In her prayer for relief, Robinson requests actual damages and appropriate damages, including restitution of the revenues received either after a represented prize was no longer available or when it was unwinnable. Robinson contends, based on our opinion in Conners, that her contractual claims do not lie in tort because they are equitable in nature and are not claims for compensatory relief for personal injuries. See 993 P.2d at 1176. However, contrary to Robinson's suggestion, Conners does not stand for the proposition that the CGIA will never bar claims for equitable relief because they are not claims for compensatory relief. In Conners, we addressed the question of whether a former city employee's claim for backpay and reinstatement under Colorado's Civil Rights Act (the CRA), a civil rights statute designed to redress workplace discrimination, was a claim that lies in tort or could lie in tort. See id. at 1176-77. In that case, we were presented with a statutory claim, without origins in common law, which was intended by the legislature to address constitutionally based concerns of equality rather than mere compensation for personal injuries. See id. at 1173-75. On the clean slate of a statutorily imposed duty, we analyzed the CRA's conception of injury and remedy in order to inform our understanding of the nature of the underlying claim. See id. at 1176-77. Regarding the nature of the relief requested, we stated that the form of relief alone, whether damages or equitable relief, does not govern the categorization of a claim as a tort or other type of action. Id. at 1176. However, we noted that courts must consider the nature of the relief, particularly in cases such as Conners where the statutory claim was not based on an action with common law roots in tort or contract. See id. Thus, by looking at the nature of the relief requested in order to inform our understanding of the underlying duty that the statute imposes, we determined that CRA claims are not tortious in nature because they are non-compensatory, equitable claims, which are intended to redress general discriminatory employment practices rather than compensate the plaintiff for tort-like personal injuries. See id. at 1176-77. Accordingly, we held that the CRA claims did not lie in tort for the purposes of the CGIA. Id. at 1177. In sum, contrary to Robinson's contention, the nature of the relief is not dispositive as to the question of whether a claim lies in tort. Rather, the relief requested is merely an aid in understanding the duty breached or the injury caused to determine if the claim lies or could lie in tort. Here, we need not determine whether a statutorily created claim lies in tort. Instead, we have determined above that regardless of whether Robinson has presented valid contract claims, the pleaded allegations underlying the contract claims could be alternatively pleaded in tort  in other words, the claims could lie in tort. The complaint and the pleadings in this case clearly reveal an injury that is tortious in nature. Consequently, analysis of the relief requested plays a less significant role in informing our understanding of the underlying injury. Thus, irrespective of the label attached to the damages requested, Robinson cannot elude the conclusion that the underlying injury and the duty breached are tortious in nature and therefore her claims could lie in tort. [6] Accordingly, Robinson's contract claims are barred by the CGIA.
Robinson's seventh claim for restitution and unjust enrichment alleges the following. Robinson conferred a benefit on the Lottery in the form of monies paid for scratch tickets. Robinson would not have purchased the tickets had she known that the represented and advertised prizes were unavailable, unwinnable, or previously claimed. The Lottery's retention of Robinson's money unjustly enriches the Lottery. According to Robinson, the Lottery is aware that the reality of the scratch games is that they are simply a regressive tax on lower-income, undereducated and minority citizens. [7] Robinson argues that because this claim seeks equitable relief that is non-compensatory in nature, it does not lie in tort for purposes of the CGIA. It is a matter of first impression for this court as to whether a claim for unjust enrichment is a claim that lies or could lie in tort for the purposes of the CGIA. Unjust enrichment is a form of quasi-contract or contract implied in law that does not depend in any way upon a promise or privity between the parties. DCB Constr. Co., Inc. v. Cent. City Dev. Co., 965 P.2d 115, 119 (Colo. 1998). The test for recovery under an unjust enrichment theory requires a showing that (1) at plaintiff's expense (2) defendant received a benefit (3) under circumstances that would make it unjust for defendant to retain the benefit without paying. Id. at 119-20. The scope of the remedy is broad, cutting across both contract and tort law, with its application guided by the underlying principle of avoiding the unjust enrichment of one party at the expense of another. Ninth Dist. Prod. Credit Ass'n v. Ed Duggan, Inc., 821 P.2d 788, 795 (Colo.1991); Cablevision of Breckenridge, Inc. v. Tannhauser Condo. Ass'n, 649 P.2d 1093, 1097 (Colo.1982). [8] In other jurisdictions, courts have held that a claim based on unjust enrichment can be predicated on either tort or contract law. Westwood Pharms., Inc. v. Nat'l Fuel Gas Distrib. Corp., 737 F.Supp. 1272, 1284-85 (W.D.N.Y.1990) (applying New York law and finding that an unjust enrichment claim predicated on defendants' intentional or negligent acts sounded in tort); State, Dep't of Human Servs. ex rel. Palmer v. Unisys Corp., 637 N.W.2d 142, 154 (Iowa 2001) (holding that the doctrine of unjust enrichment can arise from contracts, torts, or other predicate wrongs); Peddinghaus v. Peddinghaus, 295 Ill.App.3d 943, 230 Ill.Dec. 55, 692 N.E.2d 1221, 1225 (1998) (holding that unjust enrichment claim alleging fraudulent inducement was based on tort theory); Hydro Conduit Corp. v. Kemble, 110 N.M. 173, 793 P.2d 855, 860-62 (1990) (finding that unjust enrichment was an action based on contract for the purposes of New Mexico's governmental immunity statute). To determine if an unjust enrichment claim sounds in tort or contract, some jurisdictions look to the factual basis underlying the claim. See, e.g., Blusal Meats, Inc. v. United States, 638 F.Supp. 824, 832 (S.D.N.Y.1986) (holding that plaintiff's unjust enrichment claim was predicated on tort and that it was therefore subject to the statute of limitations for tort actions); Peddinghaus, 230 Ill.Dec. 55, 692 N.E.2d at 1225. Because an unjust enrichment claim can be predicated on either tort or contract, we apply the same case-by-case analysis to an unjust enrichment claim as we have done with other claims, assessing the nature of the injury and the relief requested. See Berg, 919 P.2d at 259; DeLozier, 917 P.2d at 715. Here, Robinson's unjust enrichment claim requires a showing that it would be unjust for the Lottery to retain the money spent by Robinson on scratch tickets when the represented prizes were no longer available. However, to show injustice, Robinson necessarily relies on allegations that she was induced into the purchase of scratch tickets by the Lottery's alleged misrepresentations that certain prizes remained available. Once again, we are presented with an injury which appears to be based on tortious conduct or the breach of a duty actionable in tort. Thus, because this unjust enrichment claim is predicated on tortious conduct and the nature of the injury arises out of a misrepresentation, this claim lies in tort or could lie in tort for the purposes of the CGIA. Furthermore, the mere fact that Robinson is requesting equitable relief in the form of rescission does not deter our conclusion that this particular unjust enrichment claim for equitable relief lies in tort. Although the relief requested informs our understanding of whether the injury is tortious in nature, it is not dispositive of the claim's underlying basis in tort or contract. Robinson seeks restitution of the Lottery's profits on scratch tickets sold after the represented prizes were no longer available. Although this relief is labeled restitution, it is in effect the equivalent of damages that Robinson could plead in tort  money expended on lottery tickets when the Lottery misrepresented certain facts in order to induce Robinson to purchase the tickets. Thus, in this particular instance, where the nature of the injury underlying the unjust enrichment claim arguably arises out of tortious conduct and the request for relief is effectively equivalent to the damages that Robinson could seek in tort, the claim lies in tort or could lie in tort. Accordingly, Robinson's unjust enrichment claim is barred by the CGIA.