v. Ireson , 2020 COA 157 ( 2020 )

The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.
SUMMARY
November 5, 2020
2020COA157
No. 19CA1245, Begley v. Ireson — Attorneys and Clients —
Litigation Privilege
A division of the court appeals affirms the district court’s entry
of summary judgment in favor of defendants based on application of
the litigation privilege under the standard set forth in Begley v.
Ireson, 2017 COA 3 (Begley I). Begley I established that the
litigation privilege may immunize an attorney’s prelitigation
statement if (1) the statement is related to prospective litigation and
(2) the prospective litigation is contemplated in good faith. Id. at ¶
17.
First, the division rejects the plaintiffs’ argument that the
attorney’s statements were not protected by the litigation privilege
because they were not defamatory and instead concludes that the
litigation privilege may shield nondefamatory statements.
Second, the division concludes that the attorney’s statements
related to the prospective litigation because there was no dispute
that they were made after he was retained to represent clients in
connection with damages alleged to have been caused by
construction activities on the plaintiffs’ property, related to the
construction project and the contemplated litigation, and were
made to individuals closely connected with the contemplated
litigation.
Finally, the division concludes that the plaintiffs failed to meet
their burden to establish a genuine issue of material fact regarding
whether the attorney contemplated the litigation he later filed on
behalf of his clients in good faith. In so doing, the division
concludes that the filing of a lawsuit is insufficient, standing alone,
to establish that the litigation was contemplated in good faith.
Instead, the fact that litigation was subsequently commenced is one
factor a court can consider when determining whether an attorney
contemplated the litigation in good faith.
COLORADO COURT OF APPEALS 2020COA157
Court of Appeals No. 19CA1245
City and County of Denver District Court No. 15CV30222
Honorable J. Eric Elliff, Judge
The Belinda A. Begley and Robert K. Hirsch Revocable Trust, Belinda A. Begley,
and Robert K. Hirsch,
Plaintiffs-Appellants,
v.
Myrtle Ireson; Lisa Harris, as Special Administrator of the Estate of Virginia
Hoeckele; Andrew J. Gibbs; and Gibbs-Young, LLC,
Defendants-Appellees.
JUDGMENT AFFIRMED, ORDER REVERSED,
AND CASE REMANDED WITH DIRECTIONS
Division VI
Opinion by JUDGE BROWN
Dunn and Freyre, JJ., concur
Announced November 5, 2020
Robert K. Hirsch, P.C., Robert K. Hirsch, Belinda Ann Begley, Denver,
Colorado, for Plaintiffs-Appellants
Gordon & Rees, LLP, John R. Mann, Denver, Colorado; Jonsen Law Firm, LLC,
Eric R. Jonsen, Broomfield, Colorado, for Defendants-Appellees Myrtle Ireson
and Lisa Harris
McElroy, Deutsch, Mulvaney & Carpenter, LLP, Glendon L. Laird, Greenwood
Village, Colorado, for Defendants-Appellees Andrew J. Gibbs and Gibbs-Young,
LLC
¶1 Plaintiffs-appellants, Belinda A. Begley, Robert K. Hirsch, and
the Belinda A. Begley and Robert K. Hirsch Revocable Trust
(collectively, Begley and Hirsch), appeal the district court’s order
granting summary judgment in favor of defendants-appellees
Andrew J. Gibbs and Gibbs-Young, LLC (together, Gibbs) and
granting partial summary judgment in favor of defendants-appellees
Myrtle Ireson and Lisa Harris, as Special Administrator of the
Estate of Virginia Hoeckele (together, Ireson and Hoeckele). Begley
and Hirsch also appeal the district court’s award of costs to Gibbs.
¶2 Applying the litigation privilege as articulated in Begley v.
Ireson, 2017 COA 3 (Begley I), we affirm the entry of summary
judgment. However, because the district court did not conduct a
hearing, we reverse the award of costs to Gibbs and remand the
case for further proceedings solely on that issue.
I. Background
¶3 Begley and Hirsch own residential property in the Washington
Park neighborhood of Denver on which they wished to demolish the
1
existing house and build a new one. Ireson is their neighbor on one
side and Hoeckele was their neighbor on the other.1
¶4 Begley and Hirsch contracted with Forte Development Group,
LLC, owned by George R. Saad, to undertake the project. In mid-
September 2014, Forte demolished the existing home and, on or
about October 1, 2014, began shoring work necessary to excavate
the basement of the new home.
¶5 Begley and Hirsch allege that Ireson and Hoeckele,
individually and through Gibbs as their attorney, made statements,
threats, and complaints that their respective properties had been
damaged during construction, which caused Forte to cease all
construction work as of October 2, 2014, and to breach the
construction contract. According to Begley and Hirsch, when
excavation finally began again on January 15, 2015, Gibbs
threatened police intervention and demanded the work stop.
¶6 On January 20, 2015, Begley and Hirsch filed a complaint
against Ireson, Hoeckele, and Gibbs, asserting claims for
intentional interference with contract and intentional interference
1Hoeckele died during the litigation and her estate was substituted
as the defendant party.
2
with prospective contractual relations. Nine days later, Ireson and
Hoeckele filed their own lawsuit, Denver District Court Case No.
15CV30352, against Begley, Hirsch, and Forte, among others.
¶7 Hoeckele moved to dismiss Begley and Hirsch’s complaint
under C.R.C.P. 12(b)(5) for failure to state a claim upon which relief
can be granted, arguing that her allegedly tortious conduct was
protected by the litigation privilege. Ireson and Gibbs joined in the
motion. The district court dismissed the complaint, holding that
Begley and Hirsch failed to allege that Ireson and Hoeckele caused
Forte to breach the contract, and that Gibbs’s conduct was
absolutely privileged.
¶8 Begley and Hirsch appealed, and a division of this court
reversed. Begley I, 2017 COA 3. First, the division concluded that
the complaint sufficiently alleged that Ireson and Hoeckele caused
Forte to breach the contract. Id. at ¶ 11. Second, the division
concluded that the litigation privilege attaches to an attorney’s
prelitigation statements only if (1) the prelitigation statement relates
to prospective litigation and (2) the prospective litigation is
contemplated in good faith. Id. at ¶¶ 17, 23. Because the district
court did not address whether the prospective litigation against
3
Begley, Hirsch, and Forte was contemplated in good faith, the
division reversed and remanded for further proceedings. Id. at
¶¶ 24-26.
¶9 On remand, Gibbs moved for summary judgment and the
district court granted the motion. It applied the two-part rule set
out in Begley I and concluded that Begley and Hirsch failed to meet
their burden to demonstrate a genuine dispute of material fact with
respect to either part. The court later awarded Gibbs his costs as
the prevailing party.
¶ 10 Ireson and Hoeckele also moved for summary judgment on the
same grounds as Gibbs. The district court partially granted the
motion. Considering its ruling on Gibbs’s motion for summary
judgment, the court concluded that Ireson and Hoeckele could not
be vicariously liable for Gibbs’s conduct because Gibbs’s conduct
was privileged. However, it concluded that genuine issues of
material fact remained regarding the propriety of Ireson and
Hoeckele’s conduct before they retained Gibbs. The parties later
filed a joint motion to dismiss with prejudice the remaining claims
against Ireson and Hoeckele, which the court granted.
4
II. Analysis
A. Summary Judgment
¶ 11 Begley and Hirsch contend that the district court erred by
concluding that application of the litigation privilege warranted
summary judgment in favor of Gibbs, Ireson, and Hoeckele.
Specifically, they argue that the court erred by (1) applying the
litigation privilege to nondefamatory statements; (2) concluding that
Gibbs’s allegedly tortious conduct was related to contemplated
litigation; and (3) concluding that Gibbs contemplated the litigation
against them in good faith. We reject each contention in turn.
1. Standard of Review
¶ 12 The determination of privilege is a question of law we review de
novo. Club Valencia Homeowners Ass’n v. Valencia Assocs., 712
P.2d 1024, 1027 (Colo. App. 1985).
¶ 13 We also review the entry of summary judgment de novo.
Shelter Mut. Ins. Co. v. Mid-Century Ins. Co., 246 P.3d 651, 657
(Colo. 2011). Summary judgment is appropriate when the
pleadings, affidavits, depositions, and admissions establish that
there is no genuine issue of material fact and that the moving party
is entitled to judgment as a matter of law. C.R.C.P. 56(c);
5
BA Mortg., LLC v. Quail Creek Condo. Ass’n, 192 P.3d 447, 450
(Colo. App. 2008). For purposes of summary judgment, a “material
fact” is one that will affect the outcome of the case. Olson v. State
Farm Mut. Auto. Ins. Co., 174 P.3d 849, 853 (Colo. App. 2007).
¶ 14 The party moving for summary judgment bears the initial
burden of demonstrating that there is no genuine issue of material
fact. Cont’l Air Lines, Inc. v. Keenan, 731 P.2d 708, 712 (Colo.
1987). Once the moving party has met this initial burden, the
burden shifts to the nonmoving party to establish a genuine issue
of material fact. Id. “If the nonmoving party cannot muster
sufficient evidence to make out a triable issue of fact . . . , a trial
would be useless and the moving party is entitled to summary
judgment as a matter of law.” Id. at 713.
2. The Litigation Privilege Generally
¶ 15 Statements made by an attorney during or in preparation for
pending legal proceedings are absolutely privileged so long as the
remarks have some relation to the proceeding. Begley I, ¶ 13; Club
Valencia, 712 P.2d at 1027. This absolute privilege exists “to
encourage and protect free access to the courts for litigants and
6
their attorneys.” Begley I, ¶ 13; see also Westfield Dev. Co. v. Rifle
Inv. Assocs., 786 P.2d 1112, 1117 (Colo. 1990).
¶ 16 In contrast, the litigation privilege attaches to an attorney’s
prelitigation statement only if (1) the statement is related to
prospective litigation and (2) the prospective litigation is
contemplated in good faith. Begley I, ¶ 17; see also Merrick v.
Burns, Wall, Smith & Mueller, P.C., 43 P.3d 712, 714 (Colo. App.
2001) (“Communications preliminary to a judicial proceeding are
protected by absolute immunity only if they have some relation to a
proceeding that is actually contemplated in good faith.”);
Restatement (Second) of Torts § 586 cmt. e (Am. Law Inst. 1977)
(“As to communications preliminary to a proposed judicial
proceeding, the [absolute privilege] applies only when the
communication has some relation to a proceeding that is
contemplated in good faith and under serious consideration.”).
3. The Litigation Privilege Shields Nondefamatory Statements
¶ 17 Begley and Hirsch first argue that the district court erred by
entering summary judgment because they contend the litigation
privilege shields only defamatory statements and Gibbs’s
7
statements were not defamatory. Because the litigation privilege
can apply to nondefamatory statements, we disagree.
a. Preservation
¶ 18 Ireson and Hoeckele contend that this issue is unpreserved
because Begley and Hirsch did not raise it with the district court
until their motion to reconsider the order denying the parties’
competing requests for C.R.C.P. 54(b) certification. Begley and
Hirsch assert that they have been raising this argument “for five
years,” and cite their opposition to the original motions to dismiss
filed by Ireson, Hoeckele, and Gibbs.
¶ 19 Because Begley and Hirsch did not raise this issue in
connection with the motions for summary judgment, they arguably
waived their right to raise it in this appeal. See Estate of Stevenson
v. Hollywood Bar & Cafe, Inc., 832 P.2d 718, 721 n.5 (Colo. 1992)
(concluding that because the argument was not raised in response
to summary judgment, it could not be raised on appeal).
Nonetheless, in the interests of justice and judicial economy, we will
address this argument on the merits.
8
b. Analysis
¶ 20 Begley and Hirsch assert that the most damaging of Gibbs’s
statements were his demands that construction stop. They contend
that, because such statements are not defamatory, they are not
protected by the litigation privilege. They argue, “simply put,
Colorado privilege law requires defamation.” We are unaware of
such a requirement.
¶ 21 Although the privilege was created to protect participants in
judicial or quasi-judicial proceedings from liability for defamatory
communications, see Hoffler v. State Pers. Bd., 7 P.3d 989, 990
(Colo. App. 1999), aff’d, 27 P.3d 371 (Colo. 2001), it has been
applied more broadly to immunize nondefamatory conduct. See
Westfield Dev. Co., 786 P.2d at 1118 (endorsing a qualified litigation
privilege to intentionally interfere with performance of a contract);
Dep’t of Admin. v. State Pers. Bd., 703 P.2d 595 (Colo. App. 1985)
(relying on the litigation privilege to conclude that an employee was
not subject to discipline for statements made during an
administrative hearing). Indeed, “[t]he privilege not only shields
attorneys from defamation claims arising from statements made
during the course of litigation, but it also bars other non-
9
defamation claims that stem from the same conduct.” Buckhannon
v. U.S. W. Commc’ns, Inc., 928 P.2d 1331, 1335 (Colo. App. 1996).
¶ 22 Begley and Hirsch cite Buckhannon and Club Valencia in
support of their argument. True, those cases discuss application of
the privilege to an attorney’s defamatory statements, but that is
because defamatory statements were the basis for the claims in
those cases. See Buckhannon, 928 P.2d at 1334 (the plaintiff
alleged the defendant’s defamatory statements intentionally
interfered with his contractual relations with a third party); Club
Valencia, 712 P.2d at 1027 (the plaintiff asserted a libel claim).
Neither case articulated a requirement that the offending conduct
be defamatory before the litigation privilege applied.
¶ 23 In addition, in Westfield Development Co., the supreme court
considered and impliedly rejected such a requirement. There, the
court considered whether the recording of a lis pendens constituted
a privileged statement made in the course of a judicial proceeding.
Westfield Dev. Co., 786 P.2d at 1114. The plaintiffs claimed the
mere filing of the lis pendens was actionable under theories of
intentional interference with contract, malicious prosecution, and
abuse of process; they did not allege that the lis pendens was
10
defamatory. See id. at 1116. In concluding that a qualified
litigation privilege may apply, the court did not mention defamation.
Id. at 1118. Instead, it held that “[t]he qualified privilege applies
when (1) the interferer has, or honestly believes he has, a legally
protected interest; (2) the interferer in good faith asserts or
threatens to assert it; and (3) the assertion or threat is by proper
means.” Id.
¶ 24 And we note that applying the litigation privilege to shield
nondefamatory litigation conduct is consistent with decisions from
other jurisdictions. See, e.g., Blanchette v. Cataldo, 734 F.2d 869,
877-78 (1st Cir. 1984) (“[T]he Massachusetts courts have applied
the privilege, not only in defamation cases, but as a general bar to
civil liability based on the attorney’s statements.”); Visto Corp. v.
Sproqit Techs., Inc., 360 F. Supp. 2d 1064, 1068 (N.D. Cal. 2005)
(“[The litigation privilege] is a defense to a number of torts,
including intentional interference and defamation.”); W. Techs., Inc.
v. Sverdrup & Parcel, Inc., 739 P.2d 1318, 1322 (Ariz. Ct. App. 1986)
(“[T]he same privilege that bars [plaintiff’s] action for injurious
falsehood also bars its action for intentional interference with a
contractual relationship.”); Levin, Middlebrooks, Mabie, Thomas,
11
Mayes & Mitchell, P.A. v. U.S. Fire Ins. Co., 639 So. 2d 606, 608 (Fla.
1994) (“[A]bsolute immunity must be afforded to any act occurring
during the course of a judicial proceeding, regardless of whether the
act involves a defamatory statement or other tortious behavior such
as the alleged misconduct at issue, so long as the act has some
relation to the proceeding.”); Kahala Royal Corp. v. Goodsill
Anderson Quinn & Stifel, 151 P.3d 732, 752 (Haw. 2007) (applying
litigation privilege to tort claims against lawyer arising from lawyer’s
management of inspection of corporate books and records);
Reynolds v. Schrock, 142 P.3d 1062, 1069 (Or. 2006) (applying
litigation privilege to attorney’s alleged aiding and abetting of
client’s breach of fiduciary duty); Clark v. Druckman, 624 S.E.2d
864, 870 (W. Va. 2005) (applying litigation privilege to claims
arising from lawyer’s disclosure of experts in litigation and
reasoning that there is “no reason to distinguish between
communications made during the litigation process and conduct
occurring during the litigation process”).
¶ 25 Finally, the Begley I division did not say that the statement in
question must be defamatory for the litigation privilege to apply
even though it was aware of the nature of Gibbs’s allegedly tortious
12
conduct. Instead, it articulated just two requirements: (1) the
statement must relate to prospective litigation and (2) the
prospective litigation must be contemplated in good faith. Begley I,
¶ 17.
¶ 26 Thus, we conclude that the litigation privilege may protect an
attorney from liability for his nondefamatory statements.
4. Gibbs’s Statements Related to Contemplated Litigation
¶ 27 Next, Begley and Hirsch contend that the district court erred
by concluding that Gibbs’s allegedly tortious statements “related to”
contemplated litigation. We disagree.
a. Additional Background
¶ 28 In their complaint, Begley and Hirsch alleged that Gibbs
engaged in the following tortious conduct:
 On October 6, 2014, Gibbs interrupted a meeting
between Begley, Hirsch, Saad, and a soils engineer and
introduced himself as the attorney for Ireson and
Hoeckele. “[He] behaved in an aggressive unprofessional
manner that was outrageous. He told those present,
‘This is not a shakedown,’ in a manner that clearly
conveyed that was exactly what it was intended to be.
13
When Plaintiff Begley resisted his bullying tactics, he told
her ‘she needed to be taught a lesson.’ Using threats,
intimidation and coercion, he deliberately frightened
[Saad] and the soils engineer with accusations that
permanently and adversely altered the relationships
between all parties.”2
 “Gibbs continued to make mail, email and telephone
threats of legal action and demands,” including sending a
formal notice of claim pursuant to section 13-20-803.5,
C.R.S. 2019, of the Construction Defect Action Reform
Act (CDARA), which purportedly included inaccurate
statements about the project.
 When excavation finally began again on January 15,
2015, Gibbs called Saad and demanded construction
cease or Gibbs “would have the Denver sheriff stop him.”
2 Today, we decide only whether Gibbs’s conduct is protected by the
litigation privilege. Assuming Begley and Hirch’s allegations are
true, we express no opinion regarding whether such conduct aligns
with the Colorado Rules of Professional Conduct. See, e.g., Colo.
RPC, Preamble ¶ 9 (“Zealousness does not, under any
circumstances, justify conduct that is unprofessional, discourteous
or uncivil toward any person involved in the legal system.”).
14
 Gibbs demanded that he have the right to decide when
and if construction would be allowed to continue and
demanded that Forte provide him with “architectural and
engineering materials for this purpose.”
¶ 29 In support of his motion for summary judgment, Gibbs
submitted an affidavit in which he averred as follows:
 He first spoke with Ireson on October 3, 2014, regarding
the construction activities on Begley and Hirsch’s
property. He arranged to meet with Ireson on October 6,
2014, “to inspect the damage and discuss her retaining
[his] firm to help recover the cost to repair her home.”
 On October 6, 2014, he met with Ireson and observed
recent damage to her home. He then met with Hoeckele
and observed similar recent damage to her home. Ireson
and Hoeckele agreed to retain Gibbs “to represent their
interests relating to the damages to their homes and, if
necessary, file a lawsuit against the responsible parties in
the event settlement negotiations were unsuccessful.”
 When he was leaving the meeting with Ireson and
Hoeckele, he observed a meeting between Begley, Hirsch,
15
Saad, and the soils engineer. He approached, introduced
himself as counsel for Ireson and Hoeckele, and
“explained that [his] clients would like to discuss a
solution to the damage the demolition caused to their
homes in an effort to avoid litigation.” He then showed
Begley, Hirsch, Saad, and the soils engineer the damage
to Ireson’s and Hoeckele’s properties.
 He and Hirsch exchanged correspondence “about
[Hirsch’s] construction project and to discuss resolution.”
Ultimately, he sent a notice of claim under CDARA.
 Having received no response to his efforts to “discuss
settlement,” he filed a lawsuit on behalf of Ireson and
Hoeckele against Hirsch, Begley, and Forte, among
others, on January 29, 2015.
¶ 30 Gibbs attached to his affidavit the following exhibits:
 An October 7, 2014, letter from Hirsch, in which Hirsch
acknowledges meeting Gibbs the previous day and
touring the properties of the “owners whom you
represent.” According to Hirsch, the letter served to
“memorialize that [Gibbs] agreed that CRE 408 covers the
16
verbal offers [Saad] made to the owners to fix certain
things on their properties.”
 An October 18, 2014, letter from Hirsch, in which Hirsch
acknowledges receiving a voicemail from Gibbs the
previous Friday. It continues: “Speaking for [Begley] and
myself, it seems premature to discuss anything until you
assert a claim.”
 An October 21, 2014, email from Gibbs to Hirsch, asking
the following questions: “Do I understand your
correspondence to mean that you and [Begley] will not
. . . discuss a resolution until we assert a claim? At the
risk of sounding confrontational, do we really need to
initiate litigation just to get you to the table?” The email
concludes, “If you intend on denying all responsibility or
do not intend to work toward a settlement, then please
let me know now so that we begin that process sooner
rather than [later].”
 A December 8, 2014, letter cataloguing Gibbs’s
interactions with Begley and Hirsch, including the
October 6, 2014, meeting, Gibbs’s voicemail to Hirsch,
17
and the letters and emails between Gibbs and Hirsch. It
says, “I emailed you on October 21, 2014 asking if
litigation was actually necessary to discuss a resolution,
but you never responded.” Attached to the letter are a
CDARA notice of claim, two reports from a professional
engineer Gibbs retained to evaluate the damage to his
clients’ properties, and a copy of a complaint “we will file
in the Denver County District Court as soon as the Notice
Claim period expires, in the event that we still cannot
reach a settlement.” The letter adds that if Begley and
Hirsch preferred to “forgo the Notice of Claim process,”
they could execute a waiver of service “to commence
litigation immediately.”
¶ 31 As relevant to this issue, in opposition to Gibbs’s motion for
summary judgment, Hirsch submitted an affidavit in which he
averred as follows:
 “After the hiring of Andrew Gibbs by Hoeckele and Ireson
as their attorney, and before the filing of the CDARA, Mr.
Gibbs made a number of demands on us for money.”
18
 Shortly after the October 6, 2014, meeting began, “Gibbs
approached . . . and introduced himself as the lawyer
representing Hoeckele and Ireson. He became
argumentative and aggressive, accusing people of causing
damages. He wanted copies of the soils reports for his
experts to review.”
 Gibbs made demands for money while refusing to
articulate “duty, breach, causation, or damages” or “what
the claims were.” Although Gibbs said, “This is not a
shakedown,” “[i]n fact it was a shakedown.”
 When Begley questioned Gibbs “about the basis upon
which he was attributing responsibility [and] question[ed]
what the injuries to the properties were, . . . Gibbs began
yelling at Begley . . . and started to lecture her.” Begley
told Gibbs to stop lecturing her, and Gibbs “said ‘some
people need lecturing.’ They argued for a few minutes
and Gibbs refused to back down or apologize, instead
saying twice, [Begley] ‘needed to be taught a lesson.’”
 Construction stopped because Ireson, Hoeckele, and
Gibbs demanded Forte stop all work on the project.
19
 Gibbs left him a voicemail on October 17, 2014, asking
what repair plans existed and for the soils report, and he
“replied in a letter that it was premature to discuss
anything until Gibbs asserted a claim for his clients.”
 On October 21, 2014, Gibbs sent him an email
“threatening litigation, but again, declining to say on
what basis he thought there was liability or responsibility
or exactly how much money he wanted.”
 On January 15, 2015, about three hours after excavation
finally began again, Gibbs demanded construction stop.3
Gibbs also demanded copies of architectural and
3 In their original complaint, Begley and Hirsch alleged that, on
January 15, 2015, Gibbs called Forte and demanded that
construction cease or Gibbs “would go to [c]ourt that afternoon and
would get an injunction to shut it down.” After the defendants filed
their motions to dismiss asserting the litigation privilege, Begley
and Hirsch filed an amended complaint altering this allegation to
include a threat by Gibbs to call law enforcement. In his summary
judgment affidavit, Hirsch averred that Gibbs demanded
construction stop, but did not say that Gibbs threatened either an
injunction or police intervention.
20
engineering plans and stated he would be the one to
decide when construction would resume.4
¶ 32 The district court concluded that “[t]he pertinence requirement
is hardly at issue” and that “[t]he undisputed facts show that all
statements allegedly giving rise to [Begley and Hirsch’s] claims were
related to the construction project that took place on [their]
property.”
b. Analysis
¶ 33 Begley and Hirsch contend that Gibbs’s “improper
interference” was related only to the construction project, not to the
contemplated litigation, and that the district court erred by
concluding the pertinency requirement was satisfied. We disagree.
¶ 34 To be privileged, an attorney’s allegedly tortious statement
“must have been made in reference to the subject matter of the
proposed or pending litigation, although it need not be strictly
relevant to any issue involved in it.” Club Valencia, 712 P.2d at
1027. “The pertinency required is not technical legal relevancy, but
4 Begley also submitted an affidavit in opposition to Gibbs’s motion
for summary judgment, which is largely consistent with and
duplicative of Hirsch’s affidavit.
21
rather a general frame of reference and relation to the subject
matter of the litigation.” Id. The litigation privilege “embraces
anything that possibly may be relevant.” Id. And, “[a]ll doubt
should be resolved in favor of its relevancy or pertinency. No
strained or close construction will be indulged to exempt a case
from the protection of privilege.” Id. at 1027-28.
¶ 35 In support of his motion for summary judgment, Gibbs offered
evidence that he was retained by Ireson and Hoeckele to represent
them in connection with the damage they allege was caused by the
construction activities on Begley and Hirsch’s property, including
pursuing a lawsuit if necessary, before he engaged in any of the
allegedly tortious conduct. Begley and Hirsch did not offer any
contradictory evidence regarding the timing of or purpose for
Gibbs’s retention. On the contrary, in their complaint, they alleged
that, “[a]t all times material herein[,] Defendant Gibbs represented
Defendants Ireson and Hoeckele.” Thus, it is undisputed that all of
Gibbs’s allegedly tortious conduct occurred after he was retained as
counsel for Ireson and Hoeckele to, among other things, file a
lawsuit.
22
¶ 36 All the statements Begley and Hirsch allege Gibbs made
related to the construction project, damage to his clients’ property,
early settlement of potential claims, and initiation of litigation. All
such statements related to “the subject matter” of the litigation
ultimately initiated on behalf of Ireson and Hoeckele. And, all such
statements were made to individuals closely connected with the
contemplated litigation. See id. at 1027 (“[T]he maker of the
statement and the recipient must be involved in and closely
connected with the proceeding.”). Nothing in the materials Begley
and Hirsch submitted in opposition to summary judgment suggests
a contrary conclusion.
¶ 37 Accordingly, the district court did not err by concluding that
Gibbs’s allegedly tortious conduct “related to prospective litigation.”
Begley I, ¶ 17.
5. Begley and Hirsch Failed to Meet Their Burden to Establish a
Genuine Issue of Material Fact Regarding Gibbs’s Good Faith
¶ 38 Begley and Hirsch contend that the district court erred by
concluding that Gibbs contemplated the litigation against them in
good faith. We disagree.
23
a. Additional Background
¶ 39 The facts set forth in Part II.A.4.a above are relevant to this
issue. As well, in the affidavit attached to his motion for summary
judgment, Gibbs attested that “[a]t all pertinent times on and after
my first meeting with Ms. Ireson and Ms. Hoeckele on October 6,
2014, I contemplated in good faith the filing of a lawsuit on their
behalf if we were unsuccessful in a satisfactory resolution.”
¶ 40 In the affidavit attached to Begley and Hirsch’s response,
Hirsch further attested to the following:
 During the October 6, 2014, inspections of the alleged
damage, Ireson and Hoeckele admitted some of the
damage was pre-existing and had been previously
repaired.
 He and Begley were sent a CDARA notice, in which they
were named as “construction professionals.”
 Ireson and Hoeckele’s request for a temporary restraining
order to stop construction was denied “because [their]
own expert . . . testified both that [their] homes were safe
and that there was no irreparable harm done to their
property.”
24
b. Analysis
¶ 41 Begley and Hirsch first contend that the district court erred by
concluding that Gibbs contemplated the litigation in good faith
because good faith is a question that cannot be resolved on
summary judgment. Under the circumstances presented by this
case, we disagree.
¶ 42 To determine whether there are disputed issues of material
fact, we must interpret the meaning of “good faith” contained in the
two-part standard articulated in Begley I. We have found little
guidance on what constitutes “good faith” in this context, but
Black’s Law Dictionary (11th ed. 2019) defines “good faith” as “[a]
state of mind consisting in (1) honesty in belief or purpose, (2)
faithfulness to one’s duty or obligation, (3) observance of reasonable
commercial standards of fair dealing in a given trade or business, or
(4) absence of intent to defraud or to seek unconscionable
advantage.” See also Credit Serv. Co. v. Dauwe, 134 P.3d 444, 447
(Colo. App. 2005).
¶ 43 As an initial matter, we reject Ireson and Hoeckele’s
contention that the filing of the lawsuit on their behalf against
Begley and Hirsch is enough, standing alone, to establish that
25
Gibbs contemplated the litigation in good faith. Adopting such a
blanket rule ignores a concern the division in Begley I identified
when it articulated the standard we apply now — specifically, that
“an attorney could make a statement that tortiously interfered with
a contract and then cloak it in the privilege by subsequently filing a
bad faith and meritless claim related to the otherwise tortious
statement.” Begley I, ¶ 16. Therefore, we conclude that the fact
that litigation was subsequently commenced is just one factor we
consider when determining whether an attorney contemplated the
litigation in good faith.
¶ 44 Typically, whether a person acted in good faith is a question
ill-suited for resolution at the summary judgment stage. See
Montoya v. Bebensee, 761 P.2d 285, 290 (Colo. App. 1988) (“In
resolving the question of the existence of good faith, a reference to
all underlying circumstances must be made. Proof of such state of
mind involves a consideration of circumstantial evidence and of the
reasonable inferences to be drawn therefrom. Thus, such an issue
seldom can be resolved on a motion for summary judgment.”). And
a “mere declaration of good faith by an affiant is not sufficient to
26
resolve that issue in the face of a pleaded denial.” Martin v. Weld
County, 43 Colo. App. 49, 53, 598 P.2d 532, 534-35 (1979).
¶ 45 Here, however, Gibbs’s declaration that he contemplated
litigation against Begley and Hirsch in good faith was not the only
evidence he offered in support of his motion for summary judgment.
In his affidavit, he cited corroborating circumstantial evidence,
including the timing and purpose of his retention by Ireson and
Hoeckele, his communications with Begley and Hirsch attempting
to settle the matter without having to initiate litigation, and the fact
that he actually filed a lawsuit against Begley, Hirsch, Forte, and
others. In addition, he attached to his affidavit correspondence
reflecting the parties’ mutual understanding that Gibbs was
contemplating asserting a claim on behalf of Ireson and Hoeckele,
Hirsch’s correspondence declining to discuss settlement without a
claim, a CDARA notice that is a statutory prerequisite to initiating
litigation, expert reports prepared by professional engineers Gibbs
retained to evaluate the damage to his clients’ properties, and a
draft complaint in substantially the same form as the one he later
filed.
27
¶ 46 It can hardly be said that the only evidence of good faith
offered in support of Gibbs’s motion for summary judgment was his
own “mere declaration.” Thus, we conclude, as did the district
court, that the evidence Gibbs offered satisfied his initial burden of
demonstrating that there was no genuine issue of material fact
regarding his good faith contemplation of litigation. See Dauwe,
134 P.3d at 446 (finding movant’s summary judgment evidence
satisfied his initial burden to demonstrate a lack of disputed issues
of fact where he attested to his good faith and submitted
corroborating evidence from the opposing party’s discovery
responses).
¶ 47 Once Gibbs met his initial summary judgment burden, the
burden shifted to Begley and Hirsch to establish a triable issue of
fact. Keenan, 731 P.2d at 712-13. That is, Begley and Hirsch had
to present some evidence, by affidavit or otherwise, from which a
fact finder could reasonably infer that Gibbs did not act with
honesty in belief or purpose, did not act in faithfulness to his duty
or obligation, did not observe reasonable commercial standards of
fair dealing in the law, or acted with intent to defraud or to seek
28
unconscionable advantage of them. See Dauwe, 134 P.3d at 447-
48. In this endeavor, they failed.
¶ 48 We agree with the district court that Begley and Hirsch’s
evidence reflects their subjective view that Ireson and Hoeckele had
no valid claims against them and their subjective interpretation of
Gibbs’s conduct. It does not establish a genuine issue of material
fact regarding Gibbs’s good faith contemplation of litigation.
¶ 49 Begley and Hirsch first contend that Gibbs’s refusal to explain
to them the basis of their purported liability in their early
communications demonstrates that he did not contemplate the
litigation in good faith. Assuming the truth of this assertion, we are
not persuaded by it. Certainly, by the time Gibbs filed the
complaint, he had an obligation to have determined it was well
grounded in fact and warranted by existing law, see C.R.C.P. 11,
but we are not aware of any requirement that a lawyer be able to
articulate specific causes of action to the opposing party to
demonstrate good faith in contemplating litigation.
¶ 50 Further, the objective circumstantial evidence reflects a
common understanding that Ireson and Hoeckele believed they had
been damaged by construction activities on Begley and Hirsch’s
29
property, and that Gibbs would file litigation on their behalf if
settlement was not possible. For example, one day after their first
meeting, Hirsch sent Gibbs a letter reflecting their “agree[ment]”
that offers made by Saad to remedy the damage Ireson and
Hoeckele identified were covered by CRE 408. That rule governs
how settlement offers may be used as evidence in civil litigation.
Thus, Hirsch demonstrated his early understanding that Gibbs was
contemplating litigation. Later correspondence between the parties
buttresses this conclusion.
¶ 51 Begley and Hirsch next contend that naming them as
“construction professionals” in the CDARA notice demonstrates
Gibbs’s bad faith. Section 13-20-803.5 requires a litigant to engage
in a notice of claim process as a prerequisite to initiating litigation
against a construction professional. Gibbs sent Begley and Hirsch
a notice pursuant to this CDARA provision. The term “construction
professional” means “an architect, contractor, subcontractor,
developer, builder, builder vendor, engineer, or inspector
performing or furnishing the design, supervision, inspection,
construction, or observation of the construction of any improvement
to real property.” § 13-20-802.5(4), C.R.S. 2019. We need not
30
decide whether Begley and Hirsch were “construction professionals”
because the only potential consequence of Gibbs mis-labeling them
in the CDARA notice is that the notice would be ineffective, and a
new notice of claim procedure would have to be undertaken. Begley
and Hirsch suffered no harm from being named “construction
professionals.” We see no bad faith.
¶ 52 Begley and Hirsch also contend that Gibbs’s decision to not
name Saad individually as a defendant in the lawsuit demonstrates
his bad faith because Forte had been dissolved. They fail to
explain, and we fail to see, how this decision demonstrates that
Gibbs contemplated litigation against them in bad faith. And Ireson
and Hoeckele ultimately reached a settlement with Forte, despite
not naming Saad individually. See Ireson v. Hirsch, slip op. at ¶ 6
n.1 (Colo. App. No. 17CA0078, Apr. 12, 2018) (not published
pursuant to C.A.R. 35(e)) (noting that Ireson and Hoeckele asserted
that they sought dismissal of all claims in the litigation against
Begley and Hirsch pursuant to a settlement agreement with Forte).
¶ 53 Finally, Begley and Hirsch contend that the litigation was not
contemplated in good faith because it is meritless. They assert that
the damages Ireson and Hoeckele have identified pre-existed the
31
construction activities on their property. And they highlight the
denial of Ireson and Hoeckele’s request for a temporary restraining
order (TRO) to stop construction.
¶ 54 But there is a difference between bad faith and lack of success
on a claim. As the district court explained, “[w]hile it is, of course,
true that claims brought in bad faith must be, by definition,
meritless, it does not follow that because a claim is meritless, it was
contemplated in bad faith.” Put another way, nothing in the
definition of good faith requires success on the merits of the filed
litigation. See Visto Corp., 360 F. Supp. 2d at 1069 (“It is the
contemplation of litigation that must be in good faith, not the merits
of the actual litigation itself that animates the litigation privilege.”).
¶ 55 And although the Denver District Court denied Ireson and
Hoeckele’s request for a TRO for failure to establish irreparable
harm, it also concluded that the TRO request was not frivolous or
groundless. See Ireson, No. 17CA0078, slip op. at ¶¶ 36, 40. That
decision was affirmed on appeal by another division of this court,
id. at ¶ 45, as was the Denver District Court’s entry of summary
judgment in favor of Ireson and Hoeckele on Begley and Hirsch’s
counterclaim for abuse of process, id. at ¶¶ 20-27. While these
32
decisions do not control our determination of good faith, we find
them persuasive.
¶ 56 In the end, we conclude that Begley and Hirsch failed to
establish a genuine issue of material fact as to whether Gibbs
contemplated litigation against them on behalf of his clients in good
faith. Having failed to meet this burden, we affirm the district
court’s entry of summary judgment.
B. Costs
1. The District Court Must Conduct a Hearing
¶ 57 Begley and Hirsch contend that the district court erred by
failing to conduct a hearing on Gibbs’s request for an award of
costs. We agree.
¶ 58 Pursuant to C.R.C.P. 121, section 1-22(1),
[a]ny party that may be affected by the Bill of
Costs may request a hearing within the time
permitted to file a reply in support of the Bill of
Costs. . . . When required to do so by law, the
court shall grant a party’s timely request for a
hearing.
If a party contests the factual basis for or reasonableness of an
award of costs and timely requests a hearing, the district court
must hold a hearing. Foster v. Phillips, 6 P.3d 791, 796 (Colo. App.
33
1999); Harvey v. Farmers Ins. Exch., 983 P.2d 34, 41 (Colo. App.
1998), aff’d sub nom. Slack v. Farmers Ins. Exch., 5 P.3d 280 (Colo.
2000).
¶ 59 Begley and Hirsch opposed Gibbs’s bill of costs, arguing that
the costs claimed were unreasonable and unsupported. The same
day, they filed a motion to set a hearing on Gibbs’s motion for
attorney fees and bill of costs. Without conducting a hearing, the
district court awarded Gibbs most of the costs claimed. The same
day, it denied as moot Begley and Hirsch’s motion to set a hearing.
¶ 60 Begley and Hirsch timely requested a hearing, so the district
court was obligated to hold one. Because it failed to do so, we
reverse the award of costs and remand the matter to the district
court to hold a hearing on Gibbs’s bill of costs.
2. Gibbs Is the Prevailing Party
¶ 61 Begley and Hirsch contend that the district court also erred in
awarding costs against them by finding that Gibbs was the
prevailing party. Although we have already reversed the cost
award, we address and reject this contention as it is likely to arise
on remand.
34
¶ 62 We review an award of costs for an abuse of discretion. See S.
Colo. Orthopaedic Clinic Sports Med. & Arthritis Surgeons, P.C. v.
Weinstein, 2014 COA 171, ¶ 8. A court abuses its discretion where
its decision is manifestly arbitrary, unreasonable, or unfair, or
where the court misapplies or misconstrues the law. Int’l Network,
Inc. v. Woodard, 2017 COA 44, ¶ 24.
¶ 63 C.R.C.P. 54(d) provides that “reasonable costs shall be allowed
as of course to the prevailing party.” “A ‘prevailing party’ is one who
prevails on a significant issue in the litigation and derives some of
the benefits sought by the litigation.” Archer v. Farmer Bros. Co., 90
P.3d 228, 230 (Colo. 2004).
¶ 64 The district court granted summary judgment in favor of
Gibbs on all claims asserted against him by Begley and Hirsch.
There is no question he is the prevailing party. The district court
did not abuse its discretion in so finding.
III. Appellate Fees and Costs
¶ 65 In the concluding paragraph of their opening brief, Begley and
Hirsch request appellate attorney fees. Pursuant to C.A.R. 39.1, a
party requesting attorney fees must include in its principal brief “a
specific request, and explain the legal and factual basis, for an
35
award of attorney fees.” Begley and Hirsch do not provide us with a
legal or factual basis to award attorney fees. The request is denied.
¶ 66 Ireson and Hoeckele request an award of appellate attorney
fees pursuant to C.A.R. 38(b), which authorizes such an award if we
determine that an appeal is frivolous. They do not support this
request with any argument. We do not find that Begley and Hirsch
were unable to present a rational argument based on evidence or
law, or that they prosecuted this appeal for the sole purpose of
harassment or delay. See Auxier v. McDonald, 2015 COA 50, ¶ 29.
And we have reversed the district court’s order on one issue. Thus,
the request is denied.
IV. Conclusion
¶ 67 The district court’s entry of summary judgment in favor of the
defendants-appellees is affirmed. The district court’s award of costs
to Gibbs is reversed, and the case is remanded for a hearing on
Gibbs’s bill of costs.
JUDGE DUNN and JUDGE FREYRE concur.
36