Hamon Contractors sued the project administrator Carter & Burgess for fraud and other torts related to a public works project. The Colorado Court of Appeals upheld summary judgment dismissing all tort claims, ruling that the economic loss rule bars fraud claims when the alleged wrongdoing stems from contractual duties. This means subcontractors generally cannot sue for fraud if the dispute arises from how a contract was performed, even if the conduct was intentional.
You cannot sue for fraud if the dispute involves how someone performed their contractual duties—you're limited to contract remedies like damages or change orders.
The economic loss rule applies even to intentional misconduct, so document everything in writing within your contract to establish clear expectations and avoid tort claims.
If you believe someone committed fraud, review your contract first to see if the issue is contractual performance; if so, pursue contract claims and dispute resolution procedures instead of tort litigation.