Infant Swimming Research, Inc. v. Faegre & Benson, LLP , 335 F. App'x 707 ( 2009 )

FILED
United States Court of Appeals
Tenth Circuit
June 9, 2009
UNITED STATES COURT OF APPEALS
Elisabeth A. Shumaker
Clerk of Court
FOR THE TENTH CIRCUIT
INFANT SWIMMING RESEARCH,
INC.,
Plaintiff-Appellant,
v. Nos. 07-1510, 08-1235 & 08-1484
(D.C. No. 1:07-CV-00839-LTB-BNB)
FAEGRE & BENSON, LLP; JUDY (D. Colo.)
HEUMANN; NORMAN HEUMANN;
MARK FISCHER,
Defendants-Appellees.
ORDER AND JUDGMENT *
Before McCONNELL, McKAY, and ANDERSON, Circuit Judges.
Invoking diversity jurisdiction, plaintiff Infant Swimming Research Inc.,
(“ISR”), filed a complaint against attorney Mark Fischer, his then-law firm,
Faegre & Benson, L.L.P., (“Faegre”), and their clients, Judy and Norman
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument. This order and judgment is
not binding precedent, except under the doctrines of law of the case, res judicata,
and collateral estoppel. It may be cited, however, for its persuasive value
consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1.
Heumann, based on Fischer’s admission that, during the pendency of litigation
between ISR and Ms. Heumann, he fabricated a federal court order that released
ISR’s judgment lien on Ms. Heumann’s property. In separate orders, the district
court dismissed all of ISR’s claims, based on its finding that, nothwithstanding
Fischer’s abhorrent conduct, ISR suffered no injury-in-fact because its judgment
was paid in full immediately after the final judgment was entered; thus, it never
needed to execute or rely on its lien. ISR appeals the district court’s (1) partial
grant of Faegre’s motion to dismiss and its grant of Faegre’s motion for summary
judgment as to the remaining claims (Appeal No. 07-1510); (2) dismissal of the
claims against Fischer and the Heumanns under Fed. R. Civ. P. 12(b)(1) (Appeal
No. 08-1235); and (3) award of attorney fees and costs to Fischer and the
Heumanns pursuant to Colo. Rev. Stat. § 13-17-201, which mandates such award
when an action is dismissed under Rule 12(b) (Appeal No. 08-1484). We have
jurisdiction over all of the appeals under 28 U.S.C. § 1291, and we affirm.
I. Factual Background
A. The Underlying ISR/Heumann Litigation. In April 2000, ISR sued Judy
Heumann for breach of a license agreement and misappropriation of trade secrets.
In February 2004, a jury ruled that Ms. Heumann had breached the license
agreement but had not misappropriated trade secrets. See Harvey Barnett, Inc. v.
Shidler, 200 F. App’x 734, 736 (10th Cir. 2006). Judgment was entered against
Ms. Heumann in favor of ISR, and ISR recorded the judgment as a lien against
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the Heumanns’ real property. ISR and Ms. Heumann cross-appealed. Fischer,
then a partner with Faegre, represented Ms. Heumann at trial and on appeal. In
August 2006, this court affirmed the jury’s verdict against Ms. Heumann, but
reversed the award of attorney fees to ISR, and remanded the matter to the district
court. See id. at 736-37.
On remand, the district court entered judgment against Ms. Heumann for
ISR’s attorneys’ fees in March 2007. Ms. Heumann immediately tendered
payment of $44,836.09 to the district court, the full judgment amount she
claimed was due if the court granted her motion to permit certain offsets.
While that motion was pending, ISR’s counsel discovered that a false
satisfaction-of-judgment order had been recorded in April 2005, releasing ISR’s
judgment lien on the Heumanns’ property.
On April 9, 2007, Fischer sent a letter to the federal court and the parties
admitting that, on April 25, 2005, he had fabricated a false federal court order,
forging the district court judge’s signature, that purported to stay the ISR
judgment and release ISR’s recorded judgment lien against the Heumanns’
property. See No. 07-1510, Aplt. App. at 68. He stated that he had done so
without assistance from any other person and, specifically, without the knowledge
or involvement of either Ms. Heumann or anyone at Faegre. See id. Fischer
further stated that he had given the false order to Ms. Heumann, “knowing that
she would file it with the Boulder County Clerk and Recorder in connection with
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securing permanent financing for a home she and her husband were building.” Id.Fischer withdrew as counsel, resigned from Faegre, and was immediately
suspended from the practice of law. He later pleaded guilty to forging the
signature of a federal judge, in violation of 18 U.S.C. § 505, and was disbarred.
The district court allowed Ms. Heumann’s requested offsets, and entered a
final judgment for ISR for $44,901.87 in June 2007, ruling that this judgment
superceded all prior judgments in the case. Two days later, Ms. Heumann paid in
full the net judgment against her to ISR.
B. The Complaint at Issue. In April 2007, immediately after receipt of
Fischer’s letter, but before the final judgment in the ISR/Heumann litigation was
entered, ISR filed the complaint at issue in these appeals. The complaint asserted
ten claims, including claims against all defendants for fraudulent transfer; fraud;
negligent misrepresentation; conspiracy; contempt; and declaratory and injunctive
relief; as well as a claim of negligent supervision against Faegre.
1. Claims Against Faegre. Faegre filed a Fed. R. Civ. P. 12(b)(6)
motion to dismiss for failure to state a claim. A month later, it filed a motion for
summary judgment, and submitted as evidence Fischer’s April 9, 2007 letter and a
sworn declaration from Fischer. In the declaration, Fischer stated that no one
associated with Faegre had any knowledge of his fabrication prior to his April 9,
2007 disclosure, or had reason to suspect his fabrication; nor did anyone
associated with Faegre authorize, agree to, or support the fabrication. Faegre’s
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motion also asserted that the complaint should be dismissed for lack of subject
matter jurisdiction because ISR had not been damaged because ISR never
attempted to execute on the judgment lien, its judgment was paid in full, and,
thus, the fabricated release order never impeded or impaired its ability to have its
judgment satisfied.
In response, ISR argued that Faegre’s motion was deficient because
(1) it did not include any affidavit from Faegre; (2) a Faegre associate and
paralegal had worked on issues relating to a stay of judgment and a supersedeas
bond between December 22, 2004 and January 6, 2005; (3) the court should
disregard Fischer’s declaration because he was an admitted forger; (4) Fischer
also fabricated another court order purporting to set a bond amount of $90,000; 1
(5) ISR was entitled to damages under Colo. Rev. Stat. § 38-35-109(3), which
allows the owner of real property to recover damages if a false lien is placed on
his property; and (6) discovery had not yet begun (though ISR never filed a
Fed. R. Civ. P. 56(f) motion).
1
Fischer stated in his April 9, 2007 letter that, before giving the false
judgment lien release order to Ms. Heumann for recording, he told her to give
Faegre $90,000, for deposit in the Registry of the Court in order to secure the stay
of execution, but he never made that deposit. See No. 07-1510, Aplt. App. at 154.
To obtain these funds, Fischer told Ms. Heumann she could post a $90,000 bond
in order to release the judgment lien on her property. Faegre explained to the
court that Fischer fabricated a supersedeas bond order, setting the bond at
$90,000, gave it to Ms. Heumann, who then gave Fischer $90,000, believing it
would be used to post bond in order to release the judgment lien. See id. at 223-
24.
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Reviewing an amended ISR complaint, the district court ruled that ISR had
sufficiently stated claims for vicarious liability under Colorado’s partnership law,
for negligent supervision, and for conspiracy, but had not alleged any actual
controversy to support its claims for declaratory and injunctive relief. Thus, it
granted in part the motion to dismiss.
The court then granted summary judgment to Faegre as to all of the
remaining claims. The court ruled that even if ISR could establish vicarious
liability on its fraud, negligent misrepresentation and contempt claims against
Faegre, these claims must nonetheless be dismissed because ISR failed to present
any evidence that it suffered an injury-in-fact. It is undisputed that ISR’s
judgment was paid in full, and that ISR never needed or attempted to execute on
its judgment lien.
The court rejected ISR’s argument that it was entitled to damages under
Colo. Rev. Stat. § 38-35-109(3). That statute grants damages to an owner of real
property whose title to that property is affected by a forged document. Here, the
court ruled, the real owner is the Heumanns, not ISR. The court rejected ISR’s
claim for punitive damages because it had not suffered any actual damages. It
also ruled that ISR had not presented any evidence to support its claim for
unawarded attorney fees incurred in the underlying ISR/Heumann litigation.
Finally, the court ruled that ISR failed to present evidence of a genuine issue of
material fact sufficient to support its negligent supervision or conspiracy claims.
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2. Claims Against Fischer and Heumanns. Fischer filed a motion
to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) for lack of subject matter
jurisdiction, asserting that ISR’s claims were not justiciable because it suffered no
injury-in-fact, and that ISR failed to establish the threshold amount of damages
for diversity jurisdiction. In response, ISR argued that it was entitled to damages
for civil contempt; damages under Colo. Rev. Stat. § 38-35-109(3); attorney fees
incurred in the underlying ISR/Heumann litigation; disgorgement of benefits; and
attorney fees incurred in the current action.
The district court ruled that there is no independent cause of action for civil
contempt, and that any civil contempt order requiring Fischer to pay a civil
contempt sanction to ISR could only have been issued by the court in the
underlying ISR/Heumann action, where Fischer’s wrongful conduct arose.
It again ruled that ISR was not entitled to damages under Colo. Rev. Stat.
§ 38-35-109(3) because it was not the owner of the affected real property.
It rejected ISR’s argument that it could recover as actual damages in this action
based on its claims for unawarded attorney fees in the underlying ISR/Heumann
litigation. ISR’s assertion was based on its speculation that the Heumanns would
not have been able to pursue the appeal in the prior case had it not been for the
false lien release. The district court ruled there was no evidence of such damages
because ISR prevailed in the prior case, was paid its judgment with accrued
interest, and was awarded its attorney fees. The court further ruled ISR failed to
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present any evidence or legal authority for its claims for disgorgement of benefits
and lost business opportunity costs. The court again rejected ISR’s claim for
punitive damages because it had not suffered any actual damages. Finally, it
again ruled that ISR failed to state a claim for injunctive or declaratory relief.
After the district court granted Faegre’s and Fischer’s motions, the
Heumanns filed a Rule 12(b)(1) motion to dismiss for lack of subject matter
jurisdiction because, as previously found by the court, ISR’s claims were not
justiciable because ISR had not suffered any injury-in-fact. For the same reasons
articulated in the Faegre and Fischer orders, the district court granted the motion,
ruling that ISR’s claims were not justiciable because it suffered no injury-in-fact.
II. Legal Analysis
We first address ISR’s appeal of the dismissal of its claims against Fischer
and the Heumanns, then ISR’s appeal of the dismissal of its claims against
Faegre, and finally ISR’s challenge to the award of attorney fees.
A. Appeal No. 08-1235; Dismissal of Claims against Fischer and the
Heumanns. In this appeal, ISR contends the district court erred in ruling that
ISR’s claims against Fischer and the Heumanns were not justiciable at the
motion-to-dismiss stage. It asserts that Fischer engaged in wrongful conduct,
and, therefore, a remedy is needed and the court should find some way to award
damages. To the contrary, the Supreme Court has held that mere observation of
wrongful conduct does not confer standing; rather, to have standing, a party must
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demonstrate personal injury that he suffered as a consequence of that conduct.
Valley Forge Christian Coll. v. Americans United for Separation of Church &
State, Inc., 454 U.S. 464, 485-86 (1982) (holding that observing and disagreeing
with unlawful conduct is not a substitute for a resulting, personal injury-in-fact).
Moreover, it is ISR’s burden to establish such injury, not the court’s obligation to
find some way to award damages. See Lujan v. Defenders of Wildlife, 504 U.S.
555, 561 (1992) (holding that party invoking federal jurisdiction bears the burden
of establishing standing); see also Renne v. Geary, 501 U.S. 312, 316 (1991)
(“We presume that federal courts lack jurisdiction unless the contrary appears
affirmatively from the record.” (internal quotation marks omitted)).
“Article III of the United States Constitution restricts the judicial authority
to deciding ‘Cases’ and ‘Controversies’” and “[t]he case-or-controversy
requirement is satisfied only where a plaintiff has standing.” Protocols, LLC v.
Leavitt, 549 F.3d 1294, 1298 (10th Cir. 2008) (quotations omitted).
To satisfy the standing requirement, a plaintiff must have such a
personal stake in the outcome of the controversy as to assure that
concrete adverseness which sharpens the presentation of issues upon
which the court so largely depends for illumination. Accordingly,
standing depends on the plaintiff’s showing (1) an injury in fact that
is both concrete and particularized as well as actual or imminent;
(2) a causal relationship between the injury and the challenged
conduct; and (3) a likelihood that the injury would be redressed by a
favorable decision.
Id. (quotations and citations omitted).
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“This showing must be supported in the same way as any other matter on
which the plaintiff bears the burden of proof, i.e., with the manner and degree of
evidence required at the successive stages of the litigation.” Id. (quotation
omitted). “At the pleading stage, general factual allegations of injury resulting
from the defendant’s conduct may suffice. . . .” Lujan, 504 U.S. at 561. If,
however, the defendant files a motion to dismiss for lack of jurisdiction, thus
putting the plaintiff’s Article III standing in issue, a district court may conduct
limited discovery on the jurisdictional issue and resolve the matter on motion
supported by affidavits, or, if a genuine issue of material fact exists, may conduct
an evidentiary hearing. See Alliance For Envtl. Renewal, Inc. v. Pyramid
Crossgates Co., 436 F.3d 82, 87-88 (2d Cir. 2006). At the summary judgment
stage, “mere allegations of injury are insufficient. Rather, a plaintiff must
establish that there exists no genuine issue of material fact as to justiciability.”
Dep’t of Commerce v. U.S. House of Representatives, 525 U.S. 316, 329 (1999).
We review the district court’s Rule 12(b)(1) dismissal de novo. Wyoming
v. United States, 279 F.3d 1214, 1222 (10th Cir. 2002). Based on our review of
the record and the briefing, we agree with the district court’s conclusion that ISR
failed to present any evidence that it suffered any injury as a result of Fischer’s
wrongdoing.
ISR asserts, without discussion or argument, that the district court failed
to apply Double Oak Construction, L.L.C. v. Cornerstone Development
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International, L.L.C., 97 P.3d 140 (Colo. App. 2003). No. 08-1235, Opening Br.
at 14. That case held that, under Colorado’s Uniform Fraudulent Transfer Act,
a fradulent transfer of property made with actual intent to defeat, hinder or delay
a creditor is a legal wrong once the creditor’s claim is made known, even if no
lien has been placed on the property. Id. at 146-47. But nothing in Double Oak
obviates the essential element that the creditor demonstrate that it suffered actual
damages as a proximate result of the wrongful transfer. Id. at 146. ISR
speculates that it lost business opportunities because the release of the lien
provided Ms. Heumann with financial resources to compete with ISR, see
No. 08-1235, Opening Br. at 15, but it presents no evidence of this purely
conjectural allegation, see Lujan, 504 U.S. at 560 (holding that injury in fact must
be actual and imminent, not conjectural and hypothetical). “[A] plaintiff cannot
rest a jurisdictional basis merely on unsupported conclusions or interpretations of
law.” Johansen v. United States, 506 F.3d 65, 68 (1st Cir. 2007) (quotations
omitted) (holding that plaintiff failed to demonstrate injury-in-fact where
defendant caused a tax lien to be placed on her property, thus clouding title, but
then paid taxes, releasing lien).
ISR asserts that it does not matter that its judgment was paid in full,
because that did not satisfy the attorney fees it was owed in the ISR/Heumann
litigation. No. 08-1235, Opening Br. at 16. But it is undisputed that ISR was
awarded its attorney fees in that matter, and (assuming purely for the sake of
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argument that ISR’s theory is even legally cognizable in this action), ISR presents
no evidence that it incurred any attorney fees related to the fraudulent release
order which are somehow unaccounted for in the fee award that it received in that
matter.
Finally, ISR cursorily lists its damage theories: civil contempt; Colorado’s
recording statute, § 38-35-109; punitive damages; and disgorgment of benefits,
none of which are supported by any evidence of actual damages. But ISR fails to
address the district court’s rationale for rejecting those theories, nor does it even
assert that the district court’s rulings on those theories was in error. Thus, we
deem these issues waived. See Christian Heritage Acad. v. Okla. Secondary Sch.
Activities Ass’n, 483 F.3d 1025, 1031 (10th Cir. 2007) (“Where an appellant lists
an issue, but does not support the issue with argument, the issue is waived on
appeal.”).
Accordingly, because ISR failed to demonstrate any injury-in-fact, we
conclude that the district court correctly dismissed all of ISR’s claims against
Fischer and the Heumanns under Rule 12(b)(1).
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B. Appeal No. 07-1510; Dismissal of Claims Against Faegre.
ISR claims 2 that the district court erred in granting summary judgment.
It first argues that under partnership law, Faegre should be jointly and severally
liable for the wrongs committed by its partner, Fischer. No. 07-1510, Opening
Br. at 15-18. ISR also contends there is evidence that Faegre was involved in the
forgery, based on billing records showing that a Faegre associate and paralegal
billed time related to a stay of judgment and a supersedeas bond three months
before Fischer’s forgery. We do not address these merit-based arguments,
however, because the district court dismissed for lack of jurisdiction based on
ISR’s failure to demonstrate any injury-in-fact. Article III standing must be
decided before the merits. See Alliance For Envtl. Renewal, Inc., 436 F.3d at 85
(citing Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1998)). Thus, the
only issue properly before us with respect to the district court’s dismissal of
ISR’s claims is the propriety of its justiciability ruling. See Affiliated Ute
Citizens v. Ute Indian Tribe, 22 F.3d 254, 255 (10th Cir. 1994) (holding that a
court will not review issues not necessary to support the underlying ruling).
2
ISR’s first claim of error in Appeal No. 07-1510 is that the appeal should
be stayed until the district court makes a final determination regarding all claims
and all parties. Since ISR filed its opening brief, the district court has made those
final determinations, entered final judgment with respect to all of the claims
against all of the parties, and ISR’s three appeals have been consolidated. Thus,
that claim of error is now moot.
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As to the court’s justiciability ruling, ISR simply contends that it sought
damages and that Faegre is responsible for those damages. It lists the theoretical
claims of damages it set forth in its complaint, but it does not point us to any
evidence of personal injury or damage, nor does it even present any argument on
appeal as to why it believes the district court erred in rejecting its damage-related
legal theories. See Opening Br. in No. 07-1510, at 18-19. Accordingly, we deem
the justciability issue in Appeal No. 07-1510 waived. See Christian Heritage
Acad., 483 F.3d at 1031. Thus, we affirm the district court’s dismissal of all
claims against Faegre for lack of subject matter jurisdiction.
C. No. 08-1484: Appeal of Attorney Fee Award to Fischer and the
Heumanns. The district court ordered ISR to pay Fischer’s and the Heumanns’
attorney fees incurred in defending against ISR’s complaint pursuant to Colo.
Rev. Stat. § 13-17-201. It awarded Fischer’s attorney fees of $25,635.00, and
costs of $192.63, and the Heumanns’ attorney fees of $31,849.00 and costs of
$588.86. ISR appeals those awards. We review the district court’s interpretation
and application of that statute de novo, Jones v. Denver Post Corp., 203 F.3d 748,
757 (10th Cir. 2000), and the reasonableness of the award for abuse of discretion,
Sussman v. Patterson, 108 F.3d 1206, 1209 (10th Cir. 1997).
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Section 13-17-201 requires the trial court to award reasonable attorney fees
to a defendant when it dismisses a tort action under Rule 12(b). The statute
provides:
In all actions brought as a result of a death or an injury to
person or property occasioned by the tort of any other person, where
any such action is dismissed on motion of the defendant prior to trial
under rule 12(b) of the Colorado rules of civil procedure, such
defendant shall have judgment for his reasonable attorney fees in
defending the action. This section shall not apply if a motion under
rule 12(b) of the Colorado rules of civil procedure is treated as a
motion for summary judgment and disposed of as provided in rule 56
of the Colorado rules of civil procedure.
The Colorado legislature enacted the statute to “discourage unnecessary
litigation of tort claims,” and it applies not only to tort actions involving death or
injury to person or property, but also to tort actions involving mere economic
injury. Houdek v. Mobil Oil Corp., 879 P.2d 417, 424 (Colo. App. 1994). The
Tenth Circuit has held that, when exercising diversity jurisdiction, federal courts
should use § 13-17-201 as the fee recovery provision when Colorado state law
tort claims are dismissed under Fed. R. Civ. P. 12(b) because courts “must apply
the substantive law of the forum state” and attorney fee statutes are considered
substantive for diversity purposes. Jones, 203 F.3d at 757 (quotation omitted).
1. Interpretation and Application of Section 13-17-201. ISR first
asserts, without elaboration or citation to legal authority, that this court must
give direction to the district court that it had discretion to deny fees under
§ 13-17-201. We find no authority for this proposition. Both the plain language
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of the statute and numerous court decisions make clear that an award of attorney
fees is mandatory when a trial court dismisses an action under Rule 12(b).
See, e.g., Kreft v. Adolph Coors Co., 170 P.3d 854, 859 (Colo. App. 2007); Wark
v. Bd. of County Comm’rs, 47 P.3d 711, 717 (Colo. App. 2002); Barnett v. Denver
Publ’g Co., 36 P.3d 145, 148 (Colo. App. 2001); see also Jones, 203 F.3d
at 757 n.6 (holding that § 13-17-201 “applies with equal force when a federal
court dismisses” a Colorado state tort claim pursuant to Fed. R. Civ. P. 12(b)).
Thus, we find no basis for ISR’s assertion that the district court was not bound by
the mandatory requirements of § 13-17-201. 3
Next, ISR claims that its complaint was not a tort action because three of
the ten claims were not tort claims, asserting that § 13-17-201 applies only to the
dismissal of an entire action of tort claims. Colorado courts have rejected this
same argument, holding that a defendant who succeeds in dismissing a complaint
under Rule 12(b) is entitled to the fee award even if the complaint included a mix
of tort and non-tort claims. See Dubray v. Intertribal Bison Co-op., 192 P.3d 604,
3
ISR repeatedly asserts that Fischer should not be awarded attorney fees
which resulted from him forging a court order, implying that the district court had
discretion to consider this factor. As noted, the district court did not have such
discretion. Further, the attorney fees in this case did not result from Fischer’s
forgery, but from ISR’s prosecution of a complaint consisting of claims it lacked
standing to assert. Finally, “[w]hile the award of fees under section 13-17-201
may lead to harsh consequences in particular cases, that is an issue for the
[Colorado] Assembly, not this court, to resolve.” Villalpando v. Denver Health &
Hosp. Auth., 181 P.3d 357, 365 (Colo. App. 2007), cert. denied, No. 07SC1064,
2008 WL 921297 (Colo. Apr. 7, 2008).
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607 (Colo. App. 2008) (“Here, . . . six of [plaintiff’s] eight claims against
defendants, and eight of his ten total claims asserted, were pleaded as tort
claims. . . . Under these circumstances, we perceive no error in the trial court’s
determination that this action ‘was brought as a result of a death or an injury to
person or property occasioned by the tort of any other person’ within the meaning
of section 13-17-201.”) (citing Wark v. Bd. of County Comm’rs, 47 P.3d 711, 717
(Colo. App. 2002), which affirmed trial court’s award of attorney fees under
§ 13-17-201 based on dismissal of the plaintiff’s contract and tort claims under
Rule 12(b)). The cases cited by ISR hold only that the entire complaint must be
dismissed under Rule 12(b), not that all such dismissed claims must be tort
claims, as the court in Dubray made clear. 192 P.3d at 607 (clarifying that the
only requirement of § 13-17-201 is a complete dismissal of all claims under
Rule 12(b), and that prior cases do not stand for the proposition that § 13-17-201
is inapplicable to actions involving both tort and non-tort claims).
ISR next contends that § 13-17-201 does not apply because the court went
beyond the pleadings and considered evidence when it dismissed the claims under
Rule 12(b)(1) for lack of subject matter jurisdiction, thus converting the matter to
a motion for summary judgment. Again, however, Colorado has squarely rejected
this argument. “[W]hen a party challenges the allegations supporting
subject-matter jurisdiction, the court has wide discretion to allow affidavits, other
documents, and a limited evidentiary hearing to resolve disputed jurisdictional
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facts[, and i]n such instances, a court’s reference to evidence outside the
pleadings does not convert the motion to dismiss to a Rule 56 motion for
summary judgment.” Davis ex rel. Davis v. United States, 343 F.3d 1282, 1296
(10th Cir. 2003) (quotation, citation, and brackets omitted). Based on this
principle, Colorado has ruled that courts can consider evidence outside the
pleadings in ruling on a Rule 12(b)(1) motion to dismiss for lack of subject matter
jurisdiction without converting it to a motion for summary judgment, and, in such
a case, an award of attorney fees is, under the “plain language of § 13-17-201,”
nonetheless “mandatory.” Smith v. Town of Snowmass Vill., 919 P.2d 868, 873
(Colo. App. 1996).
ISR contends the Heumanns failed to present evidence to the district court
that it actually paid its attorneys its requested fees and costs or that it has any
responsibility to pay those fees. There is, however, no requirement in Section
13-17-201 that a defendant demonstrate that it has paid its attorneys in order to
recover its attorney fees and costs. Cf. Boulder Plaza Residential, LLC, v.
Summit Flooring, LLC, 198 P.3d 1213, 1217 (Colo. App. 2008) (holding that,
although defendant’s attorney was paid by a third party, defendant is still entitled
to seek recovery of those fees and costs from any party liable therefor, and
whether defendant must in turn remit any such recovery to the third party does not
impair its right to recover them), cert. denied, No. 08SC470, 2009 WL 61656-18-
(Colo. Jan. 12, 2009). We find no legal error in the district court’s interpretation
and application of Colo. Rev. Stat. § 13-17-201.
2. Reasonableness of Awards. ISR contends the amounts of the
fee and cost awards were excessive. It first contends that Fischer and the
Heumanns improperly submitted redacted and bulk bills without specification of
the time spent on each item. While it is true that parts of the narrative portion of
some entries submitted by Fischer were redacted as attorney-client privileged,
none of the Heumann bills contained any redactions. Further, both the Fischer
and Heumann bills contained detailed narratives of the work performed and
specified the time spent on each item. Based on our review of the redacted
records, we cannot agree with ISR’s assertion that the bills submitted by Fischer
were so heavily redacted that he failed to provide a detailed description of the
services rendered. Rather, we conclude that ISR had adequate information from
the redacted bills to meaningfully evaluate and object, if necessary, to the
submitted entries. The district court, without objection from ISR, conducted an in
camera review of the unredacted Fischer bills and concluded that the time spent
for the entries was reasonable.
ISR next contends the Heumanns simply copied the Fischer motion to
dismiss. There is no evidence to support this assertion, nor does ISR articulate
any specific objection to the reasonableness of any specific time entry.
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Next, ISR objects to the cost awards, arguing that electronic research costs
and Heumanns’ counsel’s travel expenses from Boulder to Denver are not
allowable; an evidentiary hearing is required to award costs; and Fischer and the
Heumanns failed to include actual invoices for their costs. The district court
awarded recovery of computerized legal research expenses and travel expenses
pursuant to Colo. Rev. Stat. § 13-16-113, which does not limit the type of costs
that can be recovered. See City of Westminster v. Centric-Jones Constructors,
100 P.3d 472, 487 (Colo. App. 2003) (under § 13-16-113, “an award of costs is
committed to the sole discretion of the trial court”) (quotation omitted)). ISR did
not raise either the actual-invoice issue or the evidentiary-hearing issue in the
district court; thus, we will not address them for the first time on appeal. See
Tele-Commc’ns, Inc. v. Comm’r, 104 F.3d 1229, 1233 (10th Cir. 1997) (“[A]n
issue must be presented to, considered and decided by the trial court before it can
be raised on appeal.”) (quotations and brackets omitted)).
Finally, ISR argues that the attorney fee award to Fisher was improperly
based on the in camera review. Five months before issuing its order setting the
amount of attorney fees, the district court entered an order stating that it would
conduct an in camera review of the unredacted bills. ISR raised no objection to
that procedure then or at any time thereafter. Thus, we will not address that issue
for the first time on appeal. See id. Moreover, we cannot review the district
court’s evaluation of the unredacted bill because ISR did not move to have the
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unredacted bill filed under seal with this court or otherwise cause the unredacted
bills to be included in the appendix. See Burnett v. Sw. Bell Tel., L.P., 555 F.3d
906, 907-10 (10th Cir. 2009) (refusing to supplement record with missing district
court documents necessary for review, including essential supporting exhibits that
were filed under seal, which appellate court is precluded from accessing);
10th Cir. R. 30.1(A)(1) (The appellant’s appendix must be “sufficient for
considering and deciding the issues on appeal.”). In sum, ISR has not
demonstrated that the district court clearly abused its discretion to the
reasonableness of its fee and cost awards to Fischer or the Heumanns.
Accordingly, in Appeal Nos. 07-1510, 08-1235 and 08-1484, the judgments
of the district court are AFFIRMED.
Entered for the Court
Michael W. McConnell
Circuit Judge
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