Economic Loss Doctrine—Torts—Civil Theft.

The Supreme Court reviewed whether the economic loss rule bars a claim under CRS § 18-4-405 for civil theft where the theft also constitutes a breach of the parties’ contract. Assuming that a claim for civil theft sounds in tort, the Court held that separation of powers principles dictate that the judge-made economic loss rule cannot bar a statutory cause of action, particularly one designed to compensate for economic loss caused by intentionally wrongful conduct. The Court overruled Makoto USA, Inc. v. Russell, 250 P.3d 625 (Colo.App. 2009) to the extent it is inconsistent with this opinion. The Court affirmed the Court of Appeals’ judgment and remanded with instructions to return the case to the trial court for further proceedings.

Ditch Easement—Sufficiency of Resume Notice—Water Court Subject Matter Jurisdiction.

The Supreme Court upheld the water court’s entry of summary judgment affirming the validity of a change of water right, determining that the resume notice was sufficient to alert interested parties to the nature, scope, and impact of the proposed change despite an initial error in the location description for an impacted headgate. The Court affirmed the dismissal on other grounds, however, because all ancillary claims should have been dismissed for lack of subject matter jurisdiction after the notice was deemed sufficient.

Privilege Against Self-Incrimination—Miranda Warnings—What Constitutes Custody.

In this interlocutory appeal, the Supreme Court considered whether the trial court erred in suppressing a statement made by defendant following a search of his residence by his parole officer and a member of the police department. After the search of defendant’s bedroom yielded a zippered pouch containing a glass pipe and a small piece of straw with residue that tested presumptively positive for methamphetamine, the police officer decided to question defendant outside his residence. He asked defendant about the zippered pouch, and defendant denied it was his. He then inquired about who had access to the bedroom, and defendant indicated that other people had access to the room and that a lot of people had been staying with him recently. Finally, the police officer asked defendant when he last used methamphetamine, and defendant responded that it was two to three weeks earlier.

The trial court found that confronting defendant with the zippered pouch and questioning him about it effectively rendered him under arrest. In a written order, the trial court reiterated that once the police officer confronted defendant with the zippered pouch, a reasonable person in that position would not have believed “he was free to leave.” The trial court ruled that any subsequent questions of defendant should have been preceded by a Miranda advisement. Since no such advisement was provided, it suppressed a statement made by defendant.

The Court held that the trial court erred by applying the “free to leave” standard. The relevant question is not whether a reasonable person would believe he was free to leave, but whether such a person would believe he was deprived of his freedom of action to a degree associated with a formal arrest. Applying the correct standard, the Court concluded that, under the totality of the circumstances, a reasonable person in defendant’s position would not have considered himself so deprived. While the police officer’s confrontation of defendant with the zippered pouch is a factor that weighs in favor of a finding of custody for purposes of Miranda, when viewed in conjunction with the other circumstances present, it is insufficient to warrant a determination that defendant was in custody and that the police officer was required to read him his Miranda rights. Therefore, the Court reversed the trial court’s suppression order.