Giampapa v. American Family Mutual Insurance Co.

Justice BENDER

specially concurring.

Because the majority approves the recovery of noneconomic damages for the willful and wanton breach of a contract, I write separately. The majority’s rule undermines the goals and purposes of contract law and conflates the important distinction between tort and contract law. I would disapprove of its future use and substitute a new rale for the recovery of noneconomic damages for a breach of contract claim. I would hold that noneconomic damages resulting from a breach of contract should be determined by a strict foreseeability test. Noneconomic damages should be available in a breach of contract suit only if the parties specifically provided for them in the contract or if the nature of the contract clearly indicated that such damages were within the contemplation or expectation of the parties. Because the rejection of the willful and wanton rule departs from our somewhat murky precedent, I would apply it prospectively only. Martin Marietta Corp. v. Lorenz, 823 P.2d 100, 111— 12 (Colo.1992). Hence, I concur in the judgment reached by the majority.1

To understand my reasoning, I trace the history of the willful and wanton rule and explain why the rule blurs the distinction between contract and tort. Because I ultimately reject the willful and wanton rule, I also outline a strict foreseeability test — consistent with the fundamental principles of contract law — that should replace the majority’s rule in the future.

I. The History Of Colorado’s Willful and Wanton Rule Demonstrates That It Has Not Adhered To Fundamental Principles Of Contract Law

Under Colorado’s willful and wanton rule, noneconomic damages arising from a breach of contract are available if the breach is willful and wanton. The majority argues that “[f]rom the beginning, the rule has adhered to basic contract law principles.” See maj. op. at 240. Specifically, the majority claims and now holds that foreseeability has always been inherent in the rule. Id. at 240.

My review of our caselaw reveals opposing conclusions. Colorado’s willful and wanton rule has never adhered to basic contract law principles. From its inception, this “contract rule” has relied upon tort principles.

In addition, there is only one case in which we adopted a “foreseeability approach” that would entitle injured parties to noneconomic damages following a breach of contract. Trimble v. City & County of Denver, 697 P.2d 716, 731 (Colo.1985). Yet even in Trim-ble, we distinguished the case because it involved a contract of a “personal nature.” Id. at 731-32. Considering this history, the majority relies only on the Colorado Jury Instructions in support of its “inherent foreseeability requirement” and does not cite to a single Colorado case. See maj. op. at 240.

The uniqueness of Colorado’s willful and wanton rule cannot be over-emphasized. I *247note that with the possible exception of New Jersey, Colorado is the only state to permit the recovery of noneconomic damages for a willful and wanton breach of contract.2 See, e.g., Gaglidari v. Denny’s Rests, Inc., 117 Wash.2d 426, 816 P.2d 1362, 1370 (1991) (discussing, in the context of the breach of an employment contract, the uniqueness of Colorado’s willful and wanton rule); Buckley v. Trenton Sav. Fund Soc’y, 216 N.J.Super. 705, 524 A.2d 886, 891 (1987).

To appreciate why the willful and wanton rule is more consistent with the principles of tort law, I briefly describe the cases which explain, or attempt to explain, the origins of the rule.

The first case where a Colorado court considered the willful and wanton rule was Hall v. Jackson, 24 Colo.App. 225, 134 P. 151 (1913). The Hall defendant was an undertaker who had prepared the plaintiffs husband’s body for burial. The plaintiff, seeking damages for mental anguish, brought suit because the defendant breached the contract by failing to properly embalm the decedent. Id. at 226-27, 134 P. at 151-52. The court of appeals ruled that a plaintiff can recover for mental suffering resulting from a breach of contract if the breach was accompanied by “willful, insulting or wanton conduct.” Id. at 228,134 P. at 152. It reached this conclusion by importing a patchwork of principles mentioned in various cases by courts around the country, mostly involving tort claims and special contract situations.

The Hall court began its analysis by noting that, at common law, mental distress damages were unavailable unless they accompanied physical injury. Id. at 229, 134 P. at 152. The court recognized that some jurisdictions had moved away from the common law rule in the context of willful or intentional torts, such as malicious prosecution, slan*248der, libel, and seduction. Id. at 229-31, 134 P. at 152-53 (discussing Carter v. Oster, 134 Mo.App. 146, 112 S.W. 995 (1908); Summerfield v. W.U.T. Co., 87 Wis. 1, 57 N.W. 973 (1894)).

Turning to contract cases, the court discussed a Colorado ease involving a willful breach of a contract of carriage. Hall, 24 Colo.App. at 234,134 P. at 154 (citing Bleecker v. C. & S. Ry. Co., 50 Colo. 140, 114 P. 481 (1911)). In that context, mental distress damages were permitted because of the special “tort duty” owed by a common carrier. Hall, 24 Colo.App. at 234-35, 134 P. at 154. The Hall court also discussed a Minnesota ease involving a funeral contract similar to that present in Hall. Id. at 232-34, 134 P. at 153-54 (discussing Beaulieu v. Great Northern Ry. Co., 103 Minn. 47, 114 N.W. 353 (1907)). In Minnesota, at the time of the Beaulieu decision, mental anguish damages were available in contract if the breach of contract also constituted an “independent willful tort.” Hall, 24 Colo.App. at 233, 134 P. at 154.

Lacking guidance from this court and the legislature as to when mental distress damages should be available in contract cases, the court of appeals in Hall relied on these and similar cases to support the rule it created. Id. at 237-38, 134 P. at 155. The court of appeals held that mental distress damages alone, meaning mental distress damages unaccompanied by other sorts of physical or pecuniary loss, are available whenever a promisor’s conduct in breaching the contract is willful, insulting, or wanton. Id. at 228, 134 P. at 152. The Hall court did not at any point discuss the implications of the rule that it created, nor did it define “willful” or “wanton.”

The first Colorado Supreme Court ease to consider the issue of mental suffering damages in a contract case was Westesen v. Olathe State Bank, 78 Colo. 217, 240 P. 689 (1925). The defendant, a bank, agreed to loan the plaintiff money for a trip to California. The defendant breached the contract and the plaintiff brought suit. Id. at 218, 240 P. at 690. The court mentioned with favor the rule of Hall, that mental suffering damages were available for a willful and wanton breach of contract. Id. at 218-19, 240 P. at 690. However, it distinguished the facts of Westesen from those in Hall because the breach of contract in Westesen caused both pecuniary damages and mental distress damages, instead of mental distress damages alone. Id. at 219, 240 P. at 690. The court held that when mental distress damages are accompanied by other sorts of damages, such as pecuniary damages, they may be recovered so long as they are the “natural and proximate result of the breach,” regardless of whether the breach was willful.3 Id.

In a case involving facts similar to Hall, the Colorado Supreme Court approved use of the willful and wanton rule. Fitzsimmons v. Olinger Mortuary Ass’n, 91 Colo. 544, 550, 17 P.2d 535, 537 (1932). The court states that this rule is “in line with the distinction, approved by numerous authorities, between breaches of contract involving ‘simple negligence’ or ‘ordinary negligence’ and those accompanied by ‘willful, wanton or insulting’ conduct.” Id. at 550, 17 P.2d at 537 (citations omitted). The court provides no further explanation or discussion.

A few years later, this court again discussed the availability of mental distress damages in contract cases, at last providing some minimal definition of “willful and wanton.” McCreery v. Miller’s Groceteria Co., 99 Colo. 499, 503, 64 P.2d 803, 805 (1936). The McCreery court affirmed the rule of Hall and stated that a willful and wanton breach is not “a mere passive breach, but ... [is] intentional, and without any legal justification or excuse.” Id. ■

Following McCreery, Colorado courts did not discuss the availability of noneconomic damages in contract cases until the 1980s. See, e.g., Trimble, 697 P.2d at 731; Kimelman v. City of Colo. Springs, 775 P.2d 51, 53 (Colo.App.1988). In Trimble, we stated that such damages are recoverable if a contract is *249of a personal nature such that the parties knew or should have known that a breach of the contract would cause noneconomic damages. Trimble, 697 P.2d at 731. This foreseeability approach represented a departure from precedent both because no previous ease had focused on the personal nature of the contract and because no previous case had explicitly imposed a foreseeability requirement in conjunction with the willful and wanton rule. However, almost no cases have considered or applied the foreseeability rule announced in Trimble. But see Kimelman, 775 P.2d at 53 (refusing to apply the personal contract exception to a funeral contract because both Hall and Fitzsimmons had required willful and wanton conduct in the context of funeral contracts). Since that time, our courts have recited the willful and wanton rule without significant discussion.4

In sum, Colorado’s caselaw demonstrates that permitting the recovery for noneconomic damages resulting from a willful and wanton breach of a contract has always been rooted in the law of tort and not the law of contract. In connection with the development of this rule, the concept of foreseeable noneconomic damages has played no significant role.

II. The Willful And Wanton Rule Blurs The Distinction Between Contract And Tort

In an attempt to cure the basic contract law deficiencies of the willful and wanton rule, the majority explicitly includes a “foreseeability element.” See maj. op at 243. For plaintiffs to recover under the majority’s rule, noneconomic damages must have been the foreseeable result of a breach at the time the contract with defendant was made. Id. However, by retaining the “willful and wanton” element, the majority fails to cure the rule’s deficiencies. The rule still focuses on the conduct of the defendant at the time of the breach, thereby blurring the distinction between contract and tort. As background to support a full discussion of how I reach these conclusions, I review first some general principles of contract and tort law damages.

The purpose of contract damages is neither to compel performance nor to punish the breaching party. Rather, contract damages compensate the promisee for any loss resulting from breach. See, e.g., Mortgage Fin., Inc., 742 P.2d at 902. Therefore, under contract law, the aggrieved party is awarded damages that put her in a position as close as possible to that position she would have experienced with full performance of the contract (the “expectancy” position). See, e.g., Town of Alma v. AZCO Constr. Inc., 10 P.3d 1256, 1262 (Colo.2000)(“Contract law is intended to enforce the expectancy interests created by the parties’ promises so that they can allocate risks and costs during their bargaining.”); Taylor v. Colorado State Bank, 165 Colo. 576, 580, 440 P.2d 772, 774 (1968); 3 E. Allan Farnsworth, Famsivorth on Contracts § 12.1 (2d ed.1998).

Such expectancy damages have some limits. One such limitation has its roots in the mutual assent reached by the parties when they agree to a contract. The aggrieved party can recover only those damages that were the foreseeable result of a breach at the time the contract was made, and those damages that can be proven with reasonable certainty. See, e.g., Restatement (Second) of Contracts §§ 351 & 352 (1981). The foreseeability limitation exists because parties to a contract voluntarily assume liability. By definition, a contract means that parties mutually reached and agreed to specified terms and obligations. Courts are reluctant, therefore, to impose greater liability than contemplated by the parties at the time the contract was made. See, e.g., John A. Sebert, Jr., Punitive and Nonpecuniary Damages in Actions Based Upon Contract: Toward Achieving the Objective of Full Compensation, 33 UCLA L.Rev. 1565, 1567 (1986) (stating that “damage rules recognize the consensual basis of contract liability by limiting a contracting party’s potential liability to those risks that *250might reasonably be deemed to have been assumed upon entering the contract”).

Another such limit to expectancy damages is the common law principle that victims of a breach of contract typically were not entitled to noneconomic damages, such as emotional distress and mental suffering. Farnsworth, Farnsworth on Contracts § 12.17. Different rationales have been advanced to explain this limitation. Some courts and commentators suggest that such nonpecuniary damages are not generally foreseeable.5 Others point out that measurement of such damages is too uncertain to be permitted.6 Others say that this rule exists to prevent a windfall to the promisee or to further other policy goals.7 Whatever the rationale, the reality is that developments in many jurisdictions have made emotional distress and other noneco-nomic damages available in some circumstances, as discussed below.

Contrary to contract purposes, tort law addresses different purposes. See, e.g., Town of Alma, 10 P.3d at 1262; Decker v. Browning-Ferris Industries of Colorado, Inc., 931 P.2d 436, 446 (Colo.1997) [hereinafter “Thomas Decker II ”]. Tort law enforces duties imposed by law, instead of those created by contract. Id. As such, tort law often attempts to encourage socially beneficial types of behavior and to deter wrongful conduct. See, e.g., Restatement (Second) of Torts § 901(c) (1979). Accordingly, liability under tort law is typically premised on some sort of culpable conduct. See, e.g., id.; Douglas J. Whaley, Paying for the Agony: The Recovery of Emotional Distress Damages in Contract Actions, 26 Suffolk U.L.Rev. 935, 949 (1992) (“Tort law focuses on the fault of the tortfeasor, an element almost foreign to contract analysis. Contract looks to the fact of breach and ... does not weigh the culpability of the breacher in granting relief.”). As we have recently stated, “Liability not only recompenses the wronged plaintiff, but also deters the socially wrongful conduct in the first place. Hence, clarity and certainty of tort law serves a very important function in regulating how we deal with one another.” Denver Publ’g Co. v. Bueno, 54 P.3d 893, 898 (Colo.2002).

Because the law of torts and the law of contracts reflect different policies, each body of law recognizes different remedies. Thomas Decker II, 931 P.2d at 446. Instead of the expectancy interest awarded to the promisee for a breach of contract, a prevailing tort claimant is compensated for all damages proximately caused by the tortious behavior of the tortfeasor. Restatement (Second) of Torts § 901 cmt. a (“[T]he law of torts attempts primarily to put an injured person in a position as nearly as possible equivalent to his position prior to the tort.”). As a result, a more extensive range of damages is often available under tort law than under contract law.

The differences between the goals of tort and contract explain the differences between the damages recoverable under each.8 Un*251der tort law, liability is typically premised upon the defendant’s wrongful conduct. In contrast, in contract, breach is not always thought to be a morally reprehensible action. Farnsworth, Farnsworth on Contracts § 12.1 (“[Ajlong with the celebrated freedom to make contracts goes a considerable freedom to break them as well.”).9

There are even occasions where a breach of contract is thought to be economically and socially beneficial. The theory of “efficient breach” posits that the purpose of contract law is not to discourage all breaches. To the contrary, certain breaches, such as those where the breaching party’s gains exceed the injured party’s losses, are thought to be desirable. When such a situation arises, the measure of damages under contract law — the expectancy interest — provides an incentive to encourage the breach. See, e.g., Richard A. Posner, Economic Analysis of the Law (4th ed.1992); Farnsworth, Famsivorth cm Contracts § 12.3.

Our recent caselaw reflects these differing purposes of contract and tort and recognizes the need to separate the boundaries of these two bodies of law. Town of Alma, 10 P.3d at 1262-63. In Town of Alma, this court recognized that not all breaches of contract create tort liability. We held that the source of the duty under which the claimant sues determines whether a particular action sounds in contract or tort. Id. at 1262. If the source of the duty were found only in contract, and the damage resulting from the breach were wholly economic, then the claimant could not sue in tort. Id. at 1264. Tort claims could be brought only if the defendant violated a duty imposed by law. Id. at 1263-64. Our decision was motivated by the concern that the law of torts could swallow the law of contracts if every breach of contract were actionable in tort. Id. at 1260. The willful and wanton rule of noneconomic damages in contract cases presents analogous concerns.

As noted, traditional contract damages are based upon the expectations of the party at the time the contract is formed. The majority’s rule, permitting recovery of noneconomic damages for willful and wanton breaches, punishes a person who intentionally breaches more severely than it does one who only negligently breaches a contract. By focusing upon the type of breach, the majority’s rule risks under-compensating an injured promis-ee under a contract. Even if noneconomic damages are clearly foreseeable and can be proven with reasonable certainty, the majority would deny these damages from an injured party if the breach is unintentional or merely negligent. Such an approach fails to provide injured parties with the “benefit of their bargain.” See maj. op. at 241. Instead of adhering to traditional contract principles, the willful and wanton rule depends upon particular conduct deemed wrongful by law. Usually, wrongful conduct forms the basis of liability only in tort law.

Using a standard of culpability such as willfulness to determine liability in a contract case undermines the doctrine of efficient *252breach. In contract, parties are supposed to be allowed to weigh the costs of performance against the costs of breach. The costs of breach are generally calculated by considering the expectations of the parties at the time of contract. If the breaching party’s gains exceed the injured party’s losses, then the breach is thought to be desirable. However, the willful and wanton rule discourages a party from engaging in such a balancing test because it punishes intentional breaches.

The majority holds that noneconomic damages are available provided that the damages are a natural and probable result of a willful and wanton breach. See maj. op. at 234, 238. By so holding, the majority perpetuates a rule that creates a particular type of tort liability in the context of traditional contract liability. Noneconomic damages are available only if particular conduct occurs that is deemed wrongful. Thus, Colorado law imposes a tort duty to discourage contracting parties from intentionally breaching their contract. This rule in turn effectively elevates a breach of contract claim into an actionable tort claim. Such an approach undermines the goals and basic principles of contract law and unacceptably blurs the distinction between contract and tort.

This conflation of principles can be demonstrated by the majority’s articulation of its own rule, particularly with respect to foreseeability. The majority holds that a plaintiff can recover for noneconomic damages under the willful and wanton rule if such damages are a “foreseeable result of a breach at the time the contract was made.” See maj. op. at 240 citing to the Restatement (Second) of Contracts, §§ 351 & 352). As mentioned earlier, the majority also holds that such damages are recoverable so long as the damages are a “natural and probable result of the breach.” See maj. op. at 234, 238. I find this articulation indistinguishable from a “natural and proximate result of the breach,” which is the wording used and found in one of our original willful and wanton cases. See Westesen, 78 Colo, at 219, 240 P. at 690. The majority’s two statements of foreseeability are not necessarily the same. As the Restatement tells us, foreseeability under contract law is a more severe limitation of liability than is the requirement of “proximate cause” — an element that is normally found in a tort action. See Restatement (Second) of Contracts § 351 cmt. a. The Restatement explains that in contract, the recovery that is precluded by the limitation of foreseeability is usually based on the expectation interest — i.e. lost profits — but the limitation may also preclude recovery based on the reliance interest. Id. Thus, even the majority’s reaffirmation of the willful and wanton rule fails to address the conflation between the law of contract and the law of tort inherent in the rule.

While I adhere fully to the principles of stare decisis and the policies that this important doctrine serves, I am convinced that our current rule of noneconomic damages in contract cases should be set aside. See People v. Blehm, 983 P.2d 779, 788 (Colo.l999)(“[A] court will follow the rule of law it has established in earlier cases, unless clearly convinced that the rule was originally erroneous or is no longer sound because of changing conditions and that more good than harm will come from departing from precedent.”). Sound reason exists in this case to depart from the rule that permits recovery of non-economic damages for a willful and wanton breach of contract. The rule, unsound at its inception, has become no more sound with the passage of time. See Evans v. Bd. of County Comm’rs, 174 Colo. 97, 104, 482 P.2d 968, 972 (1971) (“We think that the [two cases that created the rule that the court considered] were wrong when announced and they are wrong today; repetition of them forty times or four hundred times doesn’t make good law or cause the reasons for the doctrines to become any stronger.”). Hence, I would disapprove of the willful and wanton rule and overrule Hall and the line of cases that follow it.

III. A New Contract Rule of Strict Foreseeability for the Recovery of Noneconomic Damages

Having concluded that the Colorado willful and wanton rule should be abandoned, I consider what rule should be implemented in its place. As discussed, the expectations of the parties at the time of contracting usually *253determine the damages that are available upon a breach, so that contractual risk can be confidently allocated.

The majority argues that “some new rule” would cause more harm than good because it undoubtedly would spur increased litigation and raise a number of uncertainties. See maj. op. at 241. Other courts and commentators are suspicious that using a foreseeability standard to determine the availability of non-economic damages will “risk runaway jury verdicts, inhibit commercial transactions, and increase uncertainty for contracting parties.” See, e.g., Michael Dorff, Attaching Tort Claims to Contract Actions: An Economic Analysis of Contort, 28 Seton Hall L.Rev. 390, 403 (1997). These authorities fear that literal application of the foreseeability rule would mean that emotional distress damages would be recoverable in almost every breach of contract suit. Gaglidari, 815 P.2d at 1373.

Recognizing these concerns, I would adopt a rule of strict foreseeability, following the approach of the Hawaii Supreme Court. Francis v. Lee Enter. Inc., 89 Hawai'i 234, 971 P.2d 707 (1999). Before Francis, Hawaii’s rule was that “where a contract is breached in a wanton or reckless manner [so] as to result in a tortious injury, the aggrieved person is entitled to recover in tort.” Dold v. Outrigger Hotel, 54 Haw. 18, 501 P.2d 368, 372 (1972). Thus, Hawaii had adopted an approach very similar to Colorado’s, with the exception that it acknowledged that it was imposing a tort standard onto contract law— an acknowledgement that the majority fails to make today.

Though the Francis court recognized the importance of stare decisis, it ultimately concluded that the Dold rule on willful or reckless breaches of contract “unnecessarily blurs the distinction between — and undermines the discrete theories of recovery relevant to— tort and contract law.” Francis, 971 P.2d at 712. Therefore, it discarded the rule and replaced it with a rule that was consistent with contract principles.10 The court noted that the nature of some contracts is such that emotional distress is a particularly foreseeable result. Id. at 713. In such circumstances, emotional distress and other sorts of noneconomic damages would be available to the injured promisee:

[I]n deciding whether such [emotional distress] damages are recoverable, we shift the focus of the inquiry away from the manner of the breach and to the nature of the contract. Thus, damages for emotional distress may be recoverable, but only where the parties specifically provide for them in the contract or where the nature of the contract clearly indicates that such damages are within the contemplation or expectation of the parties.

Id. (emphasis removed).

I agree with the analysis of the Hawaii Supreme Court. I would hold that noneco-nomic damages are available in breach of contract suits only where the parties specifically provide for them in the contract or where the nature of the contract clearly indicates that such damages are within the contemplation or expectation of the parties.

Replacing the willful and wanton rule with a rule of strict foreseeability does not risk under-compensating plaintiffs in employment cases. See maj. op. at 241. Neither rule changes our holding in Thomas Decker II that employees terminated in a willful and wanton manner cannot bring a tort claim for bad faith breach. 931 P.2d at 446. However, a rule of strict foreseeability, as I propose, would provide all plaintiffs with compensation for noneconomic damages in contract cases whenever the contract provides for them or where the nature of the contract clearly indicates that such damages are within the contemplation or expectation of the parties. Unlike the willful and wanton rule, Hawaii’s rule is not dependent upon the tortious nature of the breach.

I note that a strict foreseeability test is consistent with the growing trend towards permitting the recovery of noneconomic damages when such damages are contemplated by the parties at the time of contracting. Recently, several jurisdictions besides Hawaii have chosen to apply foreseeability prin*254ciples when determining what damages an aggrieved party may recover. See, e.g., Guerin v. N.H. Catholic Charities, Inc., 120 N.H. 501, 418 A.2d 224, 227 (1980) (permitting recovery of mental distress damages for a breach of contract in the exceptional situation where such damages were “within the contemplation of the parties”); Bourgeous v. Horizon Healthcare Corp., 117 N.M. 434, 872 P.2d 852, 858 (1994) (requiring the plaintiff to make a showing that mental distress damages were contemplated by the parties).11

While the rejection of the willful and wanton rule might not have been foreshadowed, there is some support in our precedent for the strict foreseeability rule that I propose today. In Trimble, we held that mental distress damages are available if they were foreseeable at the time of contracting and they were caused by the breach of a “personal” contract, which is a similar, though not identical, approach to that which I would adopt today. 697 P.2d at 731-32.

In following the lead of the Francis court, I would not undermine the ability of parties to allocate with confidence contractual risk or the predictability of contract damages generally.12 In the typical contract, parties do not contemplate noneconomic damages. A rule permitting such damages in the unusual case is unlikely to impact the great majority of all contracts. Such a rule supports and conforms to the values that contract law intends to foster. Where parties enter into contracts to insure peace of mind and mental security, and where breach of those contracts results in very real and provable noneconomic injury, contract law must compensate for that sort of injury.

IV. CONCLUSION

For the reasons stated above, I specially concur with the judgment of the majority.

I am authorized to say that Justice KOURLIS joins in this special concurrence.

. I concur with the majority’s discussion that (1) the "law of the case doctrine" is inapplicable here; (2) the Colorado Auto Accident Reparations Act (the "No Fault Act”) §§ 10-4-701 to 10-4 — 726, 3 C.R.S. (2002) does not preempt common law contract claims; (3) the full $900,000 award stands because American Family waived its section 13-21-102.5(3)(a), 5 C.R.S. (2002) statutory cap argument; and (4) under existing precedent, recovery from a willful and wanton breach of contract is not limited to mental distress damages, and includes a full range of noneconomic damages.

. A few states may require that the breach be willful and wanton, but this is usually coupled with other requirements, such as that the plaintiff suffer a bodily injury. See, e.g., Restatement (First) of Contracts § 341 (1932).

Other states have taken a variety of other approaches to the question of when noneconomic damages are available in contract suits. See generally John A. Sebert, Jr., Punitive and Nonpecu-niary Damages in Actions Based Upon Contract: Toward Achieving the Objective of Full Compensation, 33 UCLA L.Rev. 1565, 1584-1600 (1986); David Tartaglio, The Expectation of Peace of Mind: A Basis for Recovery of Damages for Mental Suffering Resulting from the Breach of First Party Insurance Contracts, 56 S. Cal. L.Rev. 1345, 1353-59 (1983); Joseph P. Tomain, Contract Compensation in Nonmarket Transactions, 46 U. Pitt. L.Rev. 867, 888-912 (1985). Several states maintain the rule that generally no damages may be recovered for mental or emotional distress resulting from a breach of contract. See, e.g., Brown v. Matthews Mortuary, Inc., 118 Idaho 830, 801 P.2d 37, 45-46 (1990); County of Milwaukee v. Schmidt, Garden & Erikson, 43 Wis.2d 445, 168 N.W.2d 559, 563 (1969). Some states have adopted the rule, usually in conjunction with other exceptions, that emotional and mental suffering damages are available for a breach of contract if they accompany physical injury, a tort-like situation that I do not specifically address here. See, e.g., Mont.Code Ann. § 27-1-310 (2002); E.I. DuPont de Nemours & Co. v. Pressman, 679 A.2d 436, 444-45 (Del. 1996); Clark v. Life & Cos. Ins. Co., 245 Ky. 579, 53 S.W.2d 968, 970 (1932); Keltner v. Wash. County, 310 Or. 499, 800 P.2d 752, 755-56 (1990). A few states require that a breach of contract must also constitute an independent intentional tort before noneconomic damages are permitted. See, e.g., Lickteig v. Alderson, Ondov, Leonard & Sween, 556 N.W.2d 557, 561 (Minn. 1996); Braesch v. Union Ins. Co., 237 Neb. 44, 464 N.W.2d 769, 778 (1991) overruled in part on other grounds by Wortman v. Unger, 254 Neb. 544, 578 N.W.2d 413, 417 (1998). Some jurisdictions have carved out specific exceptions to the rule of no mental distress damages in contract cases, in response to particularly compelling facts. For instance, emotional distress damages have been awarded for breaches of marriage contracts or funeral contracts or when telegraph companies failed to deliver important messages. See, e.g., Russ v. Western Union Tel. Co., 222 N.C. 504, 23 S.E.2d 681, 682 (1943); Waddell v. Wallace, 32 Okla. 140, 121 P. 245, 247 (1911).

A related approach adopted by several jurisdictions is to permit mental distress damages when the contract breached is of a "personal” nature, but not if it is of a "commercial” nature. See, e.g., Kewin v. Mass. Mut. Life Ins. Co., 409 Mich. 401, 295 N.W.2d 50, 53-54 (1980); Selsnick v. Horton, 96 Nev. 944, 620 P.2d 1256, 1257 (1980). Other states have taken essentially the same approach, but named the categories slightly differently. See, e.g., La. Civ.Code Ann. art. 1998 (2002) (distinguishing between contracts that gratify "pecuniary” interests and those that gratify "non-pecuniaiy” interests); Erlich v. Menezes, 21 Cal.4th 543, 87 Cal.Rptr.2d 886, 981 P.2d 978, 987-88 (1999) (distinguishing between "the ordinary commercial contract” and contracts whose "express object ... is the mental and emotional well-being of one of the contracting parties.”).

. The portion of the Westesen holding that permitted noneconomic damages whenever economic damages were present, subject to traditional foreseeability and causation requirements, was specifically rejected by the court of appeals. Adams v. Frontier Airlines Fed. Credit Union, 691 P.2d 352, 355 (Colo.App.1984).

. See, e.g., Westfield Dev. Co. v. Rifle Inv. Assoc., 786 P.2d 1112, 1121 (Colo.1990); Mortgage Fin., Inc. v. Podleski, 742 P.2d 900, 904 (Colo.1987); Van Steenhouse v. Jacor Broad. of Colo., Inc., 935 P.2d 49, 54 (Colo.App.1996) rev'd in part on other grounds 958 P.2d 464 (Colo.1998); Allabashi v. Lincoln Nat’l Sales Corp. of Colo.-Wyo., 824 P.2d 1, 4 (Colo.App.1991); Kimelman, 775 P.2d at 53; Hoffsetz v. Jefferson County Sch. Dist., 757 P.2d 155, 158 (Colo.App.1988); Rederscheid v. Comprecare, Inc., 667 P.2d 766, 767 (Colo.App.1983).

. See, e.g., John D. Calamari & Joseph M. Perillo, The Law of Contracts § 14-5(b) (3rd ed.1987) (and cases cited therein); Linda Curtis, Damage Measurements for Bad Faith Breach of Contract: An Economic Analysis, 39 Stan. L.Rev. 161, 165 (1986) ("The argument rests on a model of a contract as an arm’s length commercial transaction, in which emotional distress is generally not within the contemplation of the parties.”).

. See, e.g., Sebert, 33 UCLA L.Rev. at 1587-88 (and cases cited therein).

. See, e.g., Farnsworth, Farnsworth on Contracts § 12.17 ("A limitation more firmly rooted in tradition is that generally denying recovery for emotional disturbance, or 'mental distress,’ resulting from breach of contract, even if the limitations of unforeseeability and uncertainty can be overcome, It could be argued that the real basis of this rule is that such recovery is likely to result in disproportionate compensation.”); Calamari & Perillo, Law of Contracts § 14-5(b).

.Even the use of the phrases "general damages” and "special damages” differs somewhat confusingly under tort and contract. Like in contract, general damages in tort are those that flow naturally from the defendant’s conduct and special damages in tort are those damages that are particular to a specific plaintiff. 1 Marilyn Minzer et aL, Damages in Tort Actions § 3.03[1] (1992). However, under tort law, many types of noneco-nomic injuries are considered to flow naturally from a tort. Id.; see also Lira v. Shelter Ins. Co., 903 P.2d 1147, 1150 (Colo.App. 1994), affd 913 P.2d 514 (Colo.1996) (stating that general damages in tort include, among other types of loss, mental distress and worsening of physical condition). In contrast, noneconomic damages in contract are rarely discussed as general damages; general damages are unquestioningly re*251ferred to in economic terms. See, e.g., 3 Dan B. Dobbs, Law of Remedies § 12.2(3)(2d ed,1993)(discussing market-based ways of measuring general economic damages); Douglas J. Whaley, Paying for the Agony: The Recovery of Emotional Distress Damages in Contract Actions, 26 Suffolk U.L.Rev. 935, 955 (1992) ("Emotional distress recovery is a form of consequential damages.”). A commentator aptly summarized the confusing state of the law, pointing out that:

One notes some irony here: special damages in torts are more certainly calculated, in contracts they are less certain (consequentials are contract special damages); general damages in torts are less certain, in contracts they are more certain (formulas are contract general damages). Thus, special damages in torts are like general damages in contracts and general damages in torts are analogous to special damages in contracts.

Thomas C. Galligan, Jr., Contortions Along the Boundary Between Contracts and Torts, 69 Tul. L.Rev. 457, 470 (1994).

. Farnsworth also states:

No matter how reprehensible the breach, damages are generally limited to those required to compensate the injured party for lost expectation, for it is a fundamental tenet of the law of contract remedies that an injured party should not be put in a better position than had the contract been performed. As Holmes said, "If a contract is broken the measure of damages generally is the same, whatever the cause of the breach.” ... [C]ontract law is, in its essential design, a law of strict liability, and the accompanying system of remedies operates without regard to fault.

Farnsworth, Farnsworth on Contracts § 12.8 (footnotes omitted).

. The Francis court did not alter the rule that a breach of contract that results in physical injury’ may be actionable in tort, an issue that I do not address. Francis, 971 P.2d at 713.

. The majority relies on Guerin, Bourgeons and Francis to argue that Colorado, like these states, recognizes that the availability of noneconomic damages is consistent with basic contract law principles. See maj. op. at 240-241. The majority's reliance on these cases is misplaced on two grounds. First, none of these states requires a plaintiff to prove the breach was willful and wanton to recover for noneconomic damages in a contract case. As mentioned above, the Hawaii Supreme Court in Francis specifically rejected a rule similar to Colorado’s willful and wanton rule because it was not consistent with basic contract law. 971 P.2d at 712. Second, the foreseeability tests of these courts in the context of noneconomic damages are stricter than those applied in other contexts, such as for ordinary pecuniary loss. See, e.g., Bourgeons, 872 P.2d at 858 (requiring the plaintiff to make a showing that mental distress damages were contemplated, thus implying that a reasonable person standard will not be used).

. Professor Whaley, who argues in favor of applying ordinary foreseeability principles to the recovery of noneconomic damages, summarizes this idea well:

Using a simple Hadley [v. Baxendale, 9 Ex. 341, 156 Eng. Rep. 145 (1854)] test for the recovery of emotional distress damages is not likely to lead to a large expansion of liability. Most contract breaches do not cause legally significant amounts of mental anguish. But for the sort of contracts where human emotions are very much at issue[, where] peace of mind and freedom from worry are part of the bargain, as the defendant very well knew, and if the defendant breaches these sorts of contracts, the defendant should pay for the agony suffered as an obvious consequence. There is no surprise here; the issue of foreseeability takes care of that. Nor is this rule unfair to the defendant. If the defendant is going to traffic in the kind of contract that risks emotional distress when breached, let the defendant bear that risk.

Whaley, 26 Suffolk U.L.Rev. at 953.