Klein v. Tiburon Development LLC

COLORADO COURT OF APPEALS 2017COA109
Court of Appeals No. 16CA0824
City and County of Denver District Court No. 13CV33733
Honorable Catherine A. Lemon, Judge
James Klein and Beth Klein,
Plaintiffs-Appellants,
v.
Tiburon Development LLC, a Colorado corporation; and David Sell,
Defendants-Appellees.
JUDGMENT AFFIRMED IN PART, REVERSED IN PART,
AND CASE REMANDED WITH DIRECTIONS
Division IV
Opinion by JUDGE WELLING
Graham and Casebolt*, JJ., concur
Announced August 10, 2017
Ridley, McGreevy & Winocur, PC, Robert T. Fishman, Denver, Colorado, for
Plaintiffs-Appellants
Roy W. Penny, Jr., P.C., Roy W. Penny, Jr., Denver, Colorado, for Defendant-
Appellee Tiburon Development LLC
The Law Office of Lauren A. Burnett, P.C., Lauren A. Burnett, Avon, Colorado,
for Defendant-Appellee David Sell
*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2016.
¶1 This is this case’s second visit to this court. Last time around,
a division of this court affirmed the district court’s judgment on the
merits. The present appeal involves the district court’s decision to
award one side their attorney fees and deny the other side theirs.
Specifically, Beth and James Klein (the Kleins) appeal the district
court’s judgment refusing to award them their attorney fees and
costs pursuant to a line of credit agreement (LOC) between them
and Tiburon Development LLC (Tiburon). They also appeal certain
parts of the attorney fees award entered against them and their law
firm in favor of David Sell (Sell). We affirm in part, reverse in part,
and remand for further proceedings.
I. Background
A. History Preceding Prior Appeal
¶2 In 2005, the Kleins and their friends, David King, Betty King,
Sell, and Sell’s brother, formed a limited liability company, Tiburon,
to build a vacation home in Costa Rica. The Kleins, the Kings, Sell,
and Sell’s brother (the members) each owned 25% of Tiburon.
¶3 In 2011, Tiburon acquired a Costa Rican corporation that
owned a vacation home (VC5) in Costa Rica. In conjunction with
the acquisition, the members entered into an operating plan to
1
govern Tiburon’s use of VC5. The members agreed to split the
operating costs for VC5 in proportion to their shares in Tiburon.
¶4 The operating plan incorporated the LOC executed by the
members as a means of paying for furnishing and outfitting VC5.
Under the LOC, the Kleins and the Kings each loaned Tiburon
$15,000, with interest to accrue on any unused outstanding
balance at a rate of 5.25% per year.
¶5 The members furnished the Costa Rican corporation with
funds from the LOC and by making purchases for VC5 with their
own money. When a member purchased something for VC5, the
member would send the receipt to David King (who voluntarily did
the accounting for Tiburon), and he would credit that purchase to
the purchasing member’s Tiburon capital account.
¶6 All was not well in paradise. Disagreements between the
members arose when they began decorating VC5. And those
disagreements worsened over time.
¶7 In December 2012, the Kleins purchased their own vacation
home in Costa Rica and stopped using VC5. In July 2013, the
Kleins offered their interest in Tiburon for purchase by the other
members, with the offer remaining open for thirty days. The other
2
members did not accept the offer. Also in July, the Kleins
requested that the outstanding balance on the LOC be paid. David
King performed the accounting necessary to calculate the
outstanding balance on the LOC by equalizing all of the members’
capital contributions over the years. According to that accounting,
Sell and his brother collectively owed the Kleins $4686 to satisfy the
outstanding balance on the LOC. Sell and his brother paid the
Kleins $4686 on August 7, 2013.
¶8 In August 2013, the Kleins stopping paying their share of
VC5’s operating costs.1 They sued Tiburon, asserting the following
claims: (1) request for a judicial dissolution of Tiburon; (2) request
for an independent accounting; (3) breach of the LOC; and (4) civil
theft. The Kleins also sued Sell for civil theft. Tiburon
counterclaimed for 25% of VC5’s operating costs, alleging that the
Kleins had failed to pay such sums since August 2013. All parties
requested awards of attorney fees and costs.
1 Before August 2013, the Kleins never paid any portion of VC5’s
operating costs because Sell and his brother paid the costs and had
those payments credited to their capital contributions to Tiburon.
After the members’ contributions were equalized, however, the
members were responsible for paying their share of the costs
pursuant to the operating plan.
3
¶9 While the case was pending, the district court dismissed the
Kleins’ claim for judicial dissolution because they had caused an
extrajudicial dissolution of Tiburon.
¶ 10 In October 2014, following a trial to the court, the court ruled
as follows on the remaining claims:
 Tiburon did not breach the LOC by offsetting the members’
capital contributions against the outstanding balance. The
contracts governing Tiburon provided for the members’ capital
contributions to be equalized and David King’s accounting
satisfied that provision.
 Tiburon breached the LOC by not paying the Kleins interest on
the loan. The Kleins, however, failed to prove actual damages
for this breach; thus, the court awarded them nominal
damages of one dollar.
 David King’s accounting was substantially fair and accurate,
and any inaccuracies were immaterial. Therefore, an
independent accounting was unnecessary.
 The Kleins’ civil theft claims against Tiburon and Sell were
meritless. There was no evidence that any member had stolen
4
the Kleins’ personal property or that the Kleins had been
denied access to VC5.
 The Kleins breached the operating plan by not paying their
share of VC5’s operating costs. The court awarded Tiburon
$2510 — 25% of VC5’s operating costs since August 2013.
 Tiburon and Sell were entitled to their costs as prevailing
parties.
 It was premature to make a determination regarding attorney
fees, and the parties were free to file appropriate motions
under C.R.C.P. 121.
¶ 11 The Kleins filed a C.R.C.P. 59 motion for amendment of the
court’s findings and judgment or, in the alternative, for a new trial.
The Kleins requested an award of attorney fees and costs in their
C.R.C.P. 59 motion and in a separate motion, arguing that the LOC
contained a fee-shifting provision that provided for an award of
attorney fees. Tiburon and Sell filed motions requesting their
attorney fees and costs on various grounds.
¶ 12 The district court did not rule on the Kleins’ C.R.C.P. 59
motion (and therefore it was deemed denied as a matter of law).
5
But the district court deferred ruling on the parties’ motions for
attorney fees and costs.
¶ 13 While the attorney fees and costs motions were still pending,
the Kleins appealed the district court’s judgment. The Kleins also
asserted on appeal that the district court judge was biased against
them and requested the appointment of a new judge. In addition,
the Kleins requested an award of attorney fees and costs incurred
in appealing the judgment. In an unpublished opinion, a division of
this court affirmed the district court’s judgment and denied the
Kleins’ additional requests on appeal. Klein v. Tiburon Dev., LLC,
(Colo. App. No. 14CA2523, Jan. 28, 2016) (not published pursuant
to C.A.R. 35(f)). The division also dismissed the Kleins’ request for
attorney fees pursuant to the LOC, concluding that it lacked
jurisdiction to review the issue because the district court had not
yet issued a final order on the issue of attorney fees.
B. History Subsequent to the Prior Appeal
¶ 14 Following remand, the district court denied the Kleins’ request
for attorney fees and costs pursuant to the LOC. The district court
concluded that the Kleins were not the prevailing party as to either
Tiburon or Sell and that the LOC’s fee-shifting provision alone did
6
not entitle the Kleins to their attorney fees and costs. The district
court, however, granted both Tiburon’s and Sell’s separate motions
for attorney fees pursuant to section 13-17-102, C.R.S. 2016, and
costs as the prevailing parties, determining that Tiburon and Sell
were entitled to $53,789 and $56,153, respectively. In support of
these awards, the district court found the Kleins’ conduct in the
litigation to be vexatious and improper, their legal claims to be
substantially groundless, and that the Kleins not only routinely
disregarded their discovery obligations but “engaged in virtually
every kind of sanction-worthy conduct” set forth in section
13-17-102.
¶ 15 Sell subsequently filed a C.R.C.P. 59 motion requesting
reconsideration of the amount of attorney fees awarded to him, and
he specifically asked the district court to amend the judgment to
include attorney fees that he incurred in seeking the award of his
attorney fees against the Kleins. The court granted Sell’s motion,
amending the amount of fees awarded to Sell from $54,800 to
$67,525.
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II. Discussion
¶ 16 The Kleins raise three claims on appeal. First, the Kleins
contend that the district court erred in denying their request for
attorney fees, arguing that the unilateral fee-shifting provision in
the LOC entitles them to attorney fees and costs incurred to enforce
the interest provision of the LOC, as they sought to do through their
third claim for relief. Second, the Kleins contend that the district
court erred in awarding Sell the attorney fees he incurred in seeking
an award of fees because Sell failed to carry his burden to prove
that the Kleins’ defense to his fees motion lacked substantial
justification. Third, the Kleins contend that the district court’s
award of fees to Sell unreasonably included fees Sell incurred to
respond to portions of the post-trial motions that were not relevant
to the Kleins’ claims against Sell. As discussed below, we reject the
first and third claims of error, but we conclude that the second
contention has merit necessitating further proceedings on remand.
A. The District Court Did Not Err in Denying the Kleins’ Request
for Attorney Fees
¶ 17 The Kleins contend that the district court erroneously denied
their request for attorney fees pursuant to the fee-shifting provision
8
of the LOC. The LOC identified Tiburon as the Borrower and the
Kleins and Kings, collectively, as the Lender.2 Paragraph nine of
the LOC provides as follows:
Should this note be referred to an attorney for
collection Borrower shall pay all of Lender’s
actual costs, fees (including reasonable
attorneys’ fees) and expenses resulting from
such referral.
¶ 18 The district court denied the Kleins’ request for attorney fees
and costs on grounds that the Kleins were “not the prevailing party”
and that their request for fees under the LOC “is not supported by
the facts or the law.” The Kleins contend that paragraph nine is not
a “prevailing party” provision, and, therefore, the district court erred
by deciding their entitlement to fees based on a determination of
which party prevailed in the litigation. They argue that the plain
language of paragraph nine mandates an award of attorney fees and
costs in their favor because they “prevailed” on their claim to
2 Although the LOC identifies the Kleins and Kings collectively as
the Lender and the Kings were not parties to the litigation, Tiburon
does not argue on appeal that the lack of participation of the Kings
in the litigation is an infirmity in the Kleins’ ability to enforce the
fee-shifting provision of the LOC. Accordingly, we assume that the
Kleins have the capacity to enforce the Lender’s rights under the
LOC.
9
enforce the LOC’s interest provision and that the district court’s
discretion was limited to deciding the amount of that award.
Tiburon defends the district court’s decision on the grounds that
enforcing paragraph nine and awarding the Kleins their attorney
fees and costs pursuant to the LOC would violate public policy
based upon the facts and circumstances of this case. We agree
with Tiburon.
¶ 19 “We review a district court’s interpretation of a contractual fee-
shifting provision de novo.” Blooming Terrace No. 1, LLC v. KH
Blake St., LLC, 2017 COA 72, ¶ 25. “Contractual fee-shifting
provisions are generally valid under Colorado law,” and “a fee-
shifting provision need not be mutual to be enforceable.” Morris v.
Belfor USA Grp., Inc., 201 P.3d 1253, 1260 (Colo. App. 2008) (citing
Butler v. Lembeck, 182 P.3d 1185, 1189-90 (Colo. App. 2007)). But
a fee-shifting provision, like any contractual provision, may not be
enforced as written if doing so would violate public policy. See S.
Colo. Orthopaedic Clinic Sports Med. & Arthritis Surgeons, P.C. v.
Weinstein, 2014 COA 171, ¶¶ 20-21 (imposing a “reasonableness”
requirement in a contractual fee-shifting agreement as a matter of
public policy because “a starkly absolute fee-shifting provision that
10
does not impose a reasonableness requirement on the amount of
attorney fees and costs awarded contravenes public policy”); see
also Fed. Deposit Ins. Co. v. Am. Cas. Co. of Reading, 843 P.2d
1285, 1290 (Colo. 1992) (“It is a long-standing principle of contract
law that a contractual provision is void if the interest in enforcing
the provision is clearly outweighed by a contrary public policy.”).
¶ 20 The fee-shifting provision in paragraph nine is not, by its
terms, a prevailing-party provision. Instead, it entitles the Kleins,
as the Lender, to recover “all” of their attorney fees and costs
incurred as a result of any “referr[al] to an attorney for collection” of
the LOC, without regard to whether they prevail in such efforts and
no matter their own conduct in the course of the ensuing
proceedings. Indeed, the Kleins contend that they are entitled to
have paragraph nine enforced in their favor notwithstanding (1)
their nominal success on their claim to enforce the LOC and (2) the
fact that they were ordered to pay all of Tiburon’s attorney fees
pursuant to section 13-17-102. For the reasons set forth below, we
conclude that enforcing paragraph nine in favor of the Kleins under
the facts as determined by the district court and supported by the
record would violate public policy.
11
¶ 21 First, although paragraph nine is not a prevailing-party
provision, determining who prevailed is critical to resolving the
issue of whether enforcing the provision in the Kleins’ favor violates
public policy. And the Kleins were not the prevailing party in any
meaningful way. When determining entitlement to fees under a fee-
shifting provision of a contract, “[t]he determination of which party
prevailed is committed to the discretion of the trial court and is
subject to an abuse of discretion standard of review on appeal.”
Dennis I. Spencer Contractor, Inc. v. City of Aurora, 884 P.2d 326,
328 n.6 (Colo. 1994) (citing Smith v. Freeman, 921 F.2d 1120, 1122
(10th Cir. 1990)); see also Wheeler v. T.L. Roofing, Inc., 74 P.3d 499,
503 (Colo. App. 2003).
¶ 22 The district court concluded that the Kleins “were not the
prevailing party as to either Defendant in this action.” In support of
that conclusion, the district court made the following findings,
which are amply supported by the record:
 “[T]here is no legitimate question about who prevailed.
Defendants defeated Plaintiffs’ claims against them (minus
$1.00), and prevailed on Tiburon’s counterclaim.”
12
 “Defendants withstood [the Kleins’] litigious onslaught and
ultimately defeated [the Kleins’] goal of forcing a buyout of
their interests.”
 “Collecting unpaid interest on a note was such a trivial part
of the case that [the Kleins] did not even bother to present
damages evidence with respect to it.”
¶ 23 The Kleins contend that the district court’s prevailing-party
analysis focused too broadly. They contend that the analysis
should have focused only on whether they prevailed on their claim
for interest under the LOC, a claim on which they were awarded
nominal damages of one dollar. We disagree. Even if the germane
prevailing-party analysis should be limited to a subset of the claims
in the litigation, it should nevertheless focus on the entire claim
related to the LOC. And even doing so, the record supports the
district court’s conclusion that they were not the prevailing party.
¶ 24 The gravamen of the Kleins’ claim for breach of the LOC was
that Tiburon breached the LOC by offsetting the amount its
members owed the Kleins under the LOC against contributions the
borrower-members had made to cover operating expenses. Indeed,
a considerable portion of the litigation was dedicated to this
13
contention. The district court concluded that “the accounting
prepared by Mr. King was substantially fair and accurate and that
any inaccuracies were immaterial.” The Kleins lost this part of the
LOC claim in its entirety.
¶ 25 The only part of the LOC claim that the Kleins prevailed on
was that they were owed interest on the LOC. The district court
concluded, with record support, that this claim was “uncontested”
and “only a small part” of the LOC claim, which was “itself only a
very minor part of the litigation.” The inconsequential nature of the
claim for interest was highlighted by the district court’s finding that
the Kleins “did not even bother to present damages evidence with
respect to it.”
¶ 26 In short, the Kleins lost the predominant and only contested
part of the LOC claim, and they only nominally prevailed on the
secondary and uncontested issue of the entitlement to interest on
the LOC. Based on the district court’s findings, it would have been
an abuse of discretion for it to conclude that the Kleins were the
prevailing party on the LOC claim. Cf. Bedard v. Martin, 100 P.3d
584, 593 (Colo. App. 2004) (“When each party prevails in part, the
trial court generally must select one party as the overall winner for
14
purposes of the fee-shifting agreement.”); Wheeler, 74 P.3d at 503
(Contractual fee-shifting provisions “generally contemplate that the
prevailing party will be entitled to recover its attorney fees and that
there will be one winner and one loser regarding payment of those
fees.”). Thus, the record only supports one conclusion on the LOC
claim — that Tiburon prevailed.
¶ 27 In addition to not prevailing in any meaningful way on their
LOC claim, the Kleins were sanctioned for their conduct during the
course of the litigation. The district court made the following
findings, with record support:
 “[The Kleins] routinely failed to comply with their duty to
confer to resolve disputes, failed to comply with dispute
resolution procedures agreed-upon in the parties’ Operating
Agreement, and threatened non-parties with Rule 11
sanctions and perjury.”
 “[The Kleins’] conduct needlessly expanded the proceedings
and ran up the other side’s costs — which appears to have
been the whole point.”
 “[The Kleins’] conduct in this litigation — largely taken
through and with the willing assistance of Frank/Klein P.C.
15
— was of such nature as to require sanctions under
C.R.S. § 13-17-102.”
 “[The Kleins] engaged in virtually every kind of sanction-
worthy conduct enumerated in [section 13-17-102] over the
course of this case, including bringing claims that lacked
substantial justification or were interposed for delay or
harassment, and unnecessarily expanding the proceedings
by improper conduct.”
¶ 28 Due to this conduct, the Kleins were ordered to pay all of
Tiburon’s attorney fees, including the fees Tiburon incurred in
defending the Kleins’ LOC claim. The Kleins have not appealed this
part of the district court’s order. It would be antithetical to the
purpose of section 13-17-102 to enforce paragraph nine in their
favor given the sweep of the sanctions imposed against them. See
§ 13-17-101, C.R.S. 2016; cf. Wheeler, 74 P.3d at 503 (A
contractual fee-shifting provision “is not intended to result in each
side paying the other’s fees.”).
¶ 29 In summary, we conclude that enforcing a unilateral fee-
shifting provision in favor of a non-prevailing party that itself was
sanctioned for frivolous and vexatious conduct would violate public
16
policy. Accordingly, we affirm the district court’s denial of attorney
fees and costs to the Kleins. See People v. Chase, 2013 COA 27,
¶ 17 (“[W]e may affirm a trial court’s ruling on grounds different
from those employed by that court, as long as they are supported
by the record.”).
B. The District Court Erred By Awarding Sell Fees Incurred In
Seeking Fees
¶ 30 The party seeking an award of attorney fees bears the burden
of proving, by a preponderance of the evidence, his or her
entitlement to the award. Regency Realty Inv’rs, LLC v. Cleary Fire
Prot., Inc., 260 P.3d 1, 8 (Colo. App. 2009). A party awarded its fees
pursuant to section 13-17-102 is not automatically entitled to
recover expenses incurred in pursuing such an award of fees, even
when successful. Bd. of Cty. Comm’rs v. Kraft Bldg. Contractors,
122 P.3d 1019, 1022 (Colo. App. 2005). Instead, to support an
award of attorney fees incurred in seeking fees pursuant to section
13-17-102, the district court must determine that the sanctioned
party’s defense to that motion lacked substantial justification. Id.;
Foxley v. Foxley, 939 P.2d 455 (Colo. App. 1996). We review the
reasonableness of a district court’s award of attorney fees for an
17
abuse of discretion. Crandall v. City & Cty. of Denver, 238 P.3d
659, 661 (Colo. 2010).
¶ 31 The Kleins contend that the district court erred by amending
the initial fee award to Sell to include the attorney fees Sell incurred
in seeking the initial award of fees. The Kleins contend that Sell
failed to carry his burden to prove that the Kleins’ defense to Sell’s
fees motion lacked substantial justification, and that the district
court never found that the Kleins’ defense was frivolous, as
necessary to support such an award. Sell responds that the
amended judgment is supported by the district court’s findings of
fact and the court’s order in which it determined that he satisfied
his burden of proof. Sell further contends that the Kleins waived
any right to dispute his entitlement to these fees when they
voluntarily satisfied the court’s initial fee award, which included
some portion of the fees he incurred in seeking fees.
¶ 32 We conclude that the district court’s amendment of its initial
fee award to include fees Sell incurred in seeking fees was error.
We further conclude that the Kleins did not waive or otherwise moot
their right to appeal the propriety of the amended award through
partial payment of the initial fee award.
18
¶ 33 An award of fees incurred in seeking fees under section 13-17-
102 must be supported by a determination in the record that the
sanctioned party’s defense to the fees motion lacked substantial
justification. Kraft, 122 P.3d at 1022-23. But the record here
contains no such determination. Nor does the district court’s
statement that Sell satisfied his burden of proving his entitlement
to fees satisfy this requirement. Indeed, Sell did not meet his
burden. Nowhere in Sell’s C.R.C.P. 59 motion did he substantively
argue that the Kleins’ defense to his fees motion was frivolous.
Instead, he discussed only the frivolity of the Kleins’ claims at trial.
Sell’s only reference to the Kleins’ defense to his fees motion was his
statement that it “would have been among the documents the Court
stated it had reviewed” in reaching its decision to award fees to
defendants. This is insufficient where the court made no
particularized findings concerning the merits of the Kleins’
opposition to Sell’s fees motion. Foxley, 939 P.2d at 460 (“Absent a
finding that the defense to a motion for fees . . . lacks substantial
justification, fees and costs may not be awarded for challenging that
defense.”).
19
¶ 34 Nor are we persuaded by Sell’s contention that Parker v. Davis,
888 P.2d 324 (Colo. App. 1994), supports his entitlement to these
fees. In Parker, the court granted an award of fees incurred in
seeking fees in the absence of a specific finding that the sanctioned
party’s defense was frivolous only because that party had “made
statements on the record that precluded the need for proof on this
issue.” Id. at 327. Sell cites no analogous statements made by the
Kleins here, so Parker is readily distinguishable.
¶ 35 The record confirms that the Kleins’ objection to Sell’s fees
motion did not lack substantial justification. An argument is not
frivolous or groundless when it has a rational basis in fact and law,
and the district court’s mere rejection of an argument does not
render it frivolous. Kraft, 122 P.3d at 1022. The Kleins’ objection
to Sell’s fees motion argued, inter alia, that an adverse fee award
would be inconsistent with their claim to collect interest on the
LOC; argued that an award of fees as to a claim on which there was
conflicting testimony was error; and cited case law that provided
rational, though ultimately not persuasive, support for these
arguments. The district court’s rejection of the Kleins’ defense does
20
not justify an inference that their defense lacked substantial
justification. And the district court made no finding that it did.
¶ 36 We disagree that the Kleins’ payment of the initial fee award, a
portion of which included Sell’s fees incurred in seeking fees, waives
or moots their claim on appeal. As the supreme court stated in
USAA v. Parker, 200 P.3d 350 (Colo. 2009):
The general rule is that one against whom a
judgment or decree for a sum of money has
been rendered does not, by voluntarily paying
or satisfying it, waive or lose his right to review
it upon a writ of error or appeal unless such
payment or satisfaction was by way of
compromise or with an agreement not to pursue
an appeal or error proceeding.
Id. at 357 (quoting Reserve Life Ins. Co. v. Frankfather, 123 Colo.
77, 85, 225 P.2d 1035, 1039 (1950)).
¶ 37 Because the record does not show any agreement between the
Kleins and Sell that satisfaction of the initial fee award would
preclude any later appeal, this general rule controls. The partial
payment of Sell’s fees incurred in seeking fees thus does not waive
any portion of the Kleins’ claim on appeal.
¶ 38 For these reasons, we conclude that the district court erred in
including in its fee award the fees incurred by Sell in pursuing his
21
motion for fees against the Kleins. We reverse the court’s order
amending the judgment amount awarded to Sell for attorney fees
and direct the court on remand to subtract the amount of those fees
from the award.
C. The District Court’s Award of Attorney Fees To Sell For
Responding To The Kleins’ Rule 59 Motion Was Not An Abuse
Of Discretion
¶ 39 The determination of what constitutes reasonable attorney fees
is a question of fact for the district court and will not be disturbed
on review unless it is patently erroneous and unsupported by the
evidence. Am. Water Dev., Inc. v. City of Alamosa, 874 P.2d 352,
384 (Colo. 1994). We review the reasonableness of the amount of
attorney fees awarded for an abuse of discretion. Crandall, 238
P.3d at 661. The district court must make sufficient findings to
permit appellate review of an attorney fees award. Yaekle v.
Andrews, 169 P.3d 196, 201 (Colo. App. 2007), aff’d, 195 P.3d 1101
(Colo. 2008).
¶ 40 The Kleins contend that the district court abused its discretion
by awarding Sell fees incurred in responding to their C.R.C.P. 59
motion, which they contend had little or nothing to do with Sell.
The Kleins argue that by incurring more than $6000 in fees to
22
respond, Sell violated his duty to mitigate fees under section
13-17-102, and the award of fees was therefore unreasonable. The
Kleins also contend that the district court did not make sufficient
findings to permit appellate review. We disagree that the district
court abused its discretion.
¶ 41 Sell was entitled to file a response to the Kleins’ C.R.C.P. 59
motion, in which the Kleins requested, inter alia, that the court
grant a new trial. The remedies the Kleins requested — and the
repeated framing of the disputed issues in reference to the
“Defendants,” instead of merely defendant Tiburon — were such
that it was not unreasonable for Sell to respond to the entirety of
the Kleins’ motion.
¶ 42 Nor can we conclude that Sell breached his duty to mitigate
fees — for the foregoing reasons and because the award of $6000 to
Sell for fees incurred to file a response did not render the resultant
fee award “grossly out of proportion to the seriousness of the
issue[s] in dispute.” Kraft, 122 P.3d at 1023.
¶ 43 We also conclude that the district court’s findings supporting
the award of attorney fees to Sell are sufficient to permit appellate
review. The Kleins’ argument focuses only on the content of the
23
district court’s July 7, 2016, order amending the amount of the fees
award. But the July 7th order, although cursory, merely corrected
the amount of the judgment set forth in the court’s May 2, 2016,
order. The Kleins do not address whether the court’s May 2nd
order includes findings and discussion sufficient to permit appellate
review of the award. We conclude that it does.
¶ 44 For these reasons, we conclude that it was not an abuse of
discretion for the district court to award Sell the attorney fees he
incurred to respond to the Kleins’ C.R.C.P. 59 motion, and that the
decision is supported by findings in the record.
III. Conclusion
¶ 45 We affirm the district court’s judgment denying an award of
attorney fees and costs to the Kleins. In addition, we affirm the
district court’s judgment awarding Sell the attorney fees he
incurred to respond to the Kleins’ C.R.C.P. 59 motion. We reverse
the district court’s judgment insofar as the court awarded Sell the
attorney fees he incurred in seeking fees against the Kleins, and we
remand the case with instructions for the district court to subtract
the amount of such fees from the award.
JUDGE GRAHAM and JUDGE CASEBOLT concur.
24