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Colorado Supreme Court Expands Applicability of Civil Theft Claims in Bermelv. BlueRadios, Inc.

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Chris Bermel is an independent contractor who, in 2014, entered into a contract to provide engineering services to BlueRadios, Inc. Bermel signed a Proprietary Information and Inventions Agreement, which he later violated by forwarding thousands of emails to his personal email account. BlueRadios later filed a claim against Bermel, arguing that he was in breach of contract and, also, asserting that he had committed theft by stealing the company’s information. The trial court agreed, finding Bermel liable for breach of contract and civil theft.

Bermel appealed the trial court’s decision, claiming that Colorado’s Economic Loss Rule precluded BlueRadios from pursuing a civil theft claim. In a recent decision by the Colorado Supreme Court, the majority disagreed with Bermel and found that the economic loss rule does not preclude civil theft claims in certain circumstances.

Because civil theft claims carry with them the risk of an award of attorneys’ fees and treble damages, you can expect to see plaintiffs increasingly asserting theft claims for what was, until now, simply contractual breaches. Justice Gabriel’s dissent put it best when he explained that the majority’s decision “dramatically expands [a plaintiff’s] contractual remedies” and “will inappropriately allow many future contract claims to be asserted as civil theft claims, in pursuit of otherwise unavailable treble damages and attorney fees awards.”

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