CO Code § 13-17-202 (2021)
2021 Colorado Code|Title 13 - Courts and Court Procedure|Article 17 - Attorney Fees|Part 2 - Attorney Fees in Civil Actions in General|§ 13-17-202. Award of Actual Costs and Fees When Offer of Settlement Was Made

     Notwithstanding any other statute to the contrary, except as provided in section 24-10-106.3, C.R.S., in any civil action of any nature commenced or appealed in any court of record in this state:   If the plaintiff serves an offer of settlement in writing at any time more than fourteen days before the commencement of the trial that is rejected by the defendant, and the plaintiff recovers a final judgment in excess of the amount offered, then the plaintiff shall be awarded actual costs accruing after the offer of settlement to be paid by the defendant.    If the defendant serves an offer of settlement in writing at any time more than fourteen days before the commencement of the trial that is rejected by the plaintiff, and the plaintiff does not recover a final judgment in excess of the amount offered, then the defendant shall be awarded actual costs accruing after the offer of settlement to be paid by the plaintiff. However, as provided in section 13-16-104, if the plaintiff is the prevailing party in the action, the plaintiff's final judgment shall include the amount of the plaintiff's actual costs that accrued prior to the offer of settlement.    If an offer of settlement is not accepted in writing within fourteen days after service of the offer, the offer shall be deemed rejected, and the party who made the offer is not precluded from making a subsequent offer. Evidence thereof is not admissible except in a proceeding to determine costs.    If an offer of settlement is accepted in writing within fourteen days after service of the offer, the offer of settlement shall constitute a binding settlement agreement, fully enforceable by the court in which the civil action is pending.    An offer of settlement under this section shall remain open for at least fourteen days from the date of service unless withdrawn by service of withdrawal of the offer of settlement.    An offer of settlement served at any time fourteen days or less before the commencement of the trial shall not be subject to this section, and evidence thereof is not admissible for any purpose.       For purposes of this section, “actual costs” shall not include attorney fees but shall mean costs actually paid or owed by the party, or his or her attorneys or agents, in connection with the case, including but not limited to filing fees, subpoena fees, reasonable expert witness fees, copying costs, court reporter fees, reasonable investigative expenses and fees, reasonable travel expenses, exhibit or visual aid preparation or presentation expenses, legal research expenses, and all other similar fees and expenses.       When comparing the amount of any offer of settlement to the amount of a final judgment actually awarded, any amount of the final judgment representing interest subsequent to the date of the offer in settlement shall not be considered.    When the liability of one party to another has been determined by verdict or order or judgment, but the amount or extent of the liability remains to be determined by further proceedings, the party adjudged liable may make an offer of settlement, which shall have the same effect as an offer made before trial (except with respect to costs already incurred) if it is served pursuant to subsection (1) of this section.     History. Source: L. 90: Entire section added, p. 852, § 14, effective May 31. L. 95: Entire section amended, p. 1194, § 1, effective July 1. L. 2003: (1) amended, p. 1359, § 1, effective July 1. L. 2008: (1)(a)(II) amended, p. 8, § 1, effective July 1. L. 2015: IP(1)(a) amended,(SB 15-213), ch. 266, p. 1039, § 5, effective June 3.    Cross references:    For the legislative declaration contained in the 1990 act enacting this section, see section 1 of chapter 100, Session Laws of Colorado 1990.    For the legislative declaration in SB 15-213, see section 1 of chapter 266, Session Laws of Colorado 2015.     ANNOTATION   Law reviews. For article, “Application of the ‘Offer of Settlement' Statute: Less Than Legislative Intent?”, see 24 Colo. Law. 2557 (1995).   This section does not violate equal protection principles since it provides equal opportunity to plaintiffs and defendants alike. Rubio v. Farris, 51 P.3d 992 (Colo. App. 2002).   The 2008 amendment to subsection (1)(a)(II) effected a change to, rather than merely a clarification of, the law. Novak v. Craven, 195 P.3d 1115 (Colo. App. 2008).   The general assembly intended the 2008 amendment to subsection (1)(a)(II) to operate only prospectively. Novak v. Craven, 195 P.3d 1115 (Colo. App. 2008).   The court's general authority to make awards joint and several granted by § 13-17-102 (3) applies to cases governed by this section. Patterson v. James, 2018 COA 173 , 454 P.3d 345.   To award costs under this section, the costs must have accrued after the settlement offer, they must be actual costs, excluding attorney fees, and the costs must be reasonable. Mallon Oil Co. v. Bowen/Edwards Assoc., 940 P.2d 1055 (Colo. App. 1996), aff'd on other grounds, 965 P.2d 105 (Colo. 1998).   The nonclaim statute, § 15-12-803 (3)(b) , precludes a jury award in excess of a statutory settlement offer for liability insurance policy limits. White v. Estate of Soto-Lerma, 2018 COA 35 , 425 P.3d 1183.   This section does not impose a necessity requirement on recovery of actual costs accruing after the offer. And while reasonableness has been implied as a precondition to recovery, reasonableness is a lower standard than necessity. Danko v. Conyers, 2018 COA 14 , 432 P.3d 958.   The phrase “and all other similar fees and expenses” at the end of subsection (1)(b) suggests a limitation to the categories of items that may be recovered as actual costs. Catlin v. Tormey Bewley Corp., 219 P.3d 407 (Colo. App. 2009).   A party challenging the reasonableness of expert fees is entitled to a hearing on the issue. Dunlap v. Long, 902 P.2d 446 (Colo. App. 1995); Harvey v. Farmers Ins. Exch., 983 P.2d 34 (Colo. App. 1998), aff'd on other grounds sub nom. Slack v. Farmers Ins. Exch., 5 P.3d 280 (Colo. 2000); Dillen v. HealthOne, L.L.C., 108 P.3d 297 (Colo. App. 2004); Kim v. Grover C. Coors Trust, 179 P.3d 86 (Colo. App. 2007).   The party must request a hearing, however. Dillen v. HealthOne, L.L.C., 108 P.3d 297 (Colo. App. 2004).   The plain language of subsection (1)(a) does not require an offer of settlement to contain a reference to this section and use of the term “offer of settlement”, although the better practice might be to include such terms in such an offer. Dillen v. HealthOne, L.L.C., 108 P.3d 297 (Colo. App. 2004).   Subsection (1)(a)(III) does not require an offer to be “final” and specifically provides that an offeror is not precluded from making subsequent offers. Dillen v. HealthOne, L.L.C., 108 P.3d 297 (Colo. App. 2004).   Plaintiff entitled to award of actual costs under subsection (1)(a)(I) to the extent they constitute “costs other than attorneys' fees” under Fed. R. Civ. P. 54(d)(1) and are not preempted by a federal statute such as 28 U.S.C. § 1821 and to the extent, if at all, they constitute “related non-taxable expenses” under Fed. R. Civ. P. 54(d)(2). Garcia v. Wal-Mart Stores, Inc., 209 F.3d 1170 (10th Cir. 2000).   Court may not deny costs for expert witness fees under subsection (1)(a)(II) on the basis of the credibility of the witness, but rather must evaluate the costs based on the reasonableness of the fees. Bennett v. Hickman, 992 P.2d 670 (Colo. App. 1999); Paratransit Risk Retention Group Ins. Co. v. Kamins, 160 P.3d 307 (Colo. App. 2007).   The provisions of this section are mandatory and a trial court does not have discretion to refuse to award actual costs due to a party. Graven v. Vail Assocs., Inc., 888 P.2d 310 (Colo. App. 1994).   A determination under this section that the defendant is entitled to costs does not preclude an attorney fees award to plaintiff as the prevailing party. Chartier v. Weinland Homes, Inc., 25 P.3d 1279 (Colo. App. 2001).   Prevailing party is allowed to recover costs in cases where the costs are paid or advanced by an insurance company. Hale v. Erickson, 23 P.3d 1255 (Colo. App. 2001).   Subsection (1)(a)(II) does not apply to condemnation proceedings. City of Westminster v. Jefferson Center Ass'n, 958 P.2d 495 (Colo. App. 1997).   Section does not address a prevailing party who received less than its rejected offer of settlement but never rejected an offer under the statute. Therefore, plaintiff is not barred from an award of costs under this section and is entitled to an award of reasonable costs as a prevailing party pursuant to § 13-16-104 and C.R.C.P. 54(d). Hall v. Frankel, 190 P.3d 852 (Colo. App. 2008).   Recovery pursuant to this section available to extent maximum recovery allowed under § 24-10-114 not reached. Since plaintiff had recovered maximum allowable under § 24-10-114 for injury caused to child by negligence of pharmacy at state hospital, additional recovery for costs not available under this section. DeCordova v. State, 878 P.2d 73 (Colo. App. 1994).   Offer, which did not unequivocally exclude costs but which was “exclusive of costs”, was an offer for settlement apart or separate from costs mandated by this section. Carpentier v. Berg, 829 P.2d 507 (Colo. App. 1992); Aberle v. Clark, 916 P.2d 564 (Colo. App. 1995).   Offer of a total amount “inclusive of all costs and interest to date” was valid under this section. Aberle v. Clark, 916 P.2d 564 (Colo. App. 1995).   Subsection (3) does not require an offer of settlement to itemize separately the respective amounts being tendered for settlement of the underlying substantive claim and for costs. Aberle v. Clark, 916 P.2d 564 (Colo. App. 1995).   In an offer inclusive of “all costs and interest”, trial court must consider plaintiff's asserted preoffer costs, and the reasonableness thereof in assessing an award of costs. Rubio v. Farris, 51 P.3d 992 (Colo. App. 2002).   Ordinarily, a “final judgment” includes prejudgment interest but not costs. Where settlement offer did not reference, much less explicitly include, costs, the trial court erred in including plaintiff's costs as part of the “final judgment”. Novak v. Craven, 195 P.3d 1115 (Colo. App. 2008) (decided under law in effect prior to 2008 amendment).   Offer of settlement as to “all claims” unambiguously includes attorney fees if the only claim for attorney fees appears in the complaint. The offer of settlement need not explicitly reference attorney fees. Bumbal v. Smith, 165 P.3d 844 (Colo. App. 2007).   In calculating whether a final judgment exceeds the amount of a settlement offer that did not specifically exclude costs, a trial court is to exclude post-offer attorney fees awarded as costs, but include pre-offer fees awarded as costs. Chartier v. Weinland Homes, Inc., 25 P.3d 1279 (Colo. App. 2001).   A settlement offer should be presumed to impliedly include the amount of any post-verdict subrogation setoff. Ferrellgas, Inc. v. Yeiser, 247 P.3d 1022 (Colo. 2011).   Trial court need only award actual costs that are reasonably incurred after rejection of settlement offer. Prior to such award, trial court must make specific finding of reasonableness of costs. Evanson v. Colo. Farm Bur. Mut. Ins. Co., 879 P.2d 402 (Colo. App. 1993).   Unreasonable costs may be disallowed by the court under subsection (1)(a)(II). Jorgensen v. Heinz, 847 P.2d 181 (Colo. App. 1992); Cedar Lane Invs. v. St. Paul Fire & Marine Ins. Co., 883 P.2d 600 (Colo. App. 1994); Underwood v. Dillon Co., 936 P.2d 612 (Colo. App. 1997); Salazar v. Am. Sterlizer Co., 5 P.3d 357 (Colo. App. 2000).   When an expert is hired to testify but is precluded from doing so because his or her testimony is ruled inadmissible, the expert's services are not reasonably necessary to the disposition of the case, and expert fees should not be awarded. Clayton v. Snow, 131 P.3d 1202 (Colo. App. 2006).   No requirement that costs awarded relate to any particular phase of a lawsuit so long as they are incurred after the offer of settlement. Reasonable costs may include answer and jury fees and trial preparation fees of expert witnesses, even when some work of expert witnesses is performed after entry of summary judgment but before experts can be notified to stop work. Cedar Lane Invs. v. St. Paul Fire & Marine Ins. Co., 883 P.2d 600 (Colo. App. 1994).   The costs for a witness's airfare could be “reasonable travel expenses” under subsection (1)(b) of this section, even if the airfare exceeds the mileage reimbursement rate provided in § 13-33-103 , depending on the circumstances that led the witness to travel by air and the type of arrangements chosen. The same would be true of “gasoline money”, even if it exceeded the mileage fees provided in § 13-33-103 . The trial court should make findings on the reasonableness of such costs claimed by plaintiff. Catlin v. Tormey Bewley Corp., 219 P.3d 407 (Colo. App. 2009).   Under unusual circumstances, traveling companion expenses could be awarded under this section because the expenses of a traveling companion are “similar” to “reasonable travel expenses”, and this phrase in subsection (1)(b) is not limited to such expenses of a witness. In considering such an award, a trial court should make findings regarding the need for the traveling companion's presence, as well as the reasonableness of his or her travel arrangements. Catlin v. Tormey Bewley Corp., 219 P.3d 407 (Colo. App. 2009).   Jury consulting and related travel expenses are recoverable as costs accruing after the offer. Danko v. Conyers, 2018 COA 14 , 432 P.3d 958.   Trial court did not abuse its discretion in awarding a defendant only a portion of the actual costs incurred where such costs could have been avoided if defendant had availed itself of the procedures that would have limited the action to the resolution of a jurisdictional issue. Smith v. Town of Snowmass Vill., 919 P.2d 868 (Colo. App. 1996) (decided under former law).   Court may tax costs jointly and severally. It is within the court's discretion to decide how to tax the costs. Hale v. Erickson, 23 P.3d 1255 (Colo. App. 2001).   Because the court considered the plaintiff's bill of costs and amended bill of costs in awarding minimal costs, even though both the bill and amended bill were filed more than 15 days after the entry of judgment, the trial court was required to award the plaintiff reasonable costs incurred after the offer of settlement. Borquez v. Robert C. Ozer, P.C., 923 P.2d 166 (Colo. App. 1995), aff'd in part and rev'd in part on other grounds, 940 P.2d 371 (Colo. 1997).   Offers of judgment are not revocable by the offeror for the statutory period of 10 days. Centric-Jones Co. v. Hufnagel, 848 P.2d 942 (Colo. 1993); Rost v. Atkinson, 2012 COA 74 , 292 P.3d 1041.   A summary judgment order resolving all issues in a case does not terminate a valid settlement offer. Only two conditions terminate a valid settlement offer under subsection (1)(a): the offer's withdrawal or the expiration of the 14-day period. Rost v. Atkinson, 2012 COA 74 , 292 P.3d 1041.   Relief under C.R.C.P. 60(b) is available for judgments entered pursuant to this section. Domenico v. Sw. Props. Venture, 914 P.2d 390 (Colo. App. 1995).   An offer of settlement made to multiple plaintiffs must be apportioned among the parties to allow each to decide independently whether to settle and avoid a potential award of costs pursuant to this section. Weeks v. City of Colo. Springs, 928 P.2d 1346 (Colo. App. 1996); Antolovich v. Brown Group Retail, Inc., 183 P.3d 582 (Colo. App. 2007).   This section does not apply where an offer of settlement was made in a previous action, involving at least some claims that are different from those asserted in the later case, and where a timely statutory offer of settlement was not made in the action in which the judgment was obtained. Huffman v. Westmoreland Coal Co., 205 P.3d 501 (Colo. App. 2009).   Subsection (3) does not apply to an unapportioned offer to multiple plaintiffs. Taylor by and through Taylor v. Clark, 883 P.2d 569 (Colo. App. 1994).   Trial court erred as a matter of law in holding that the entry of summary judgment for one of two offerors of an offer of judgment voided the offer of judgment. An offer of judgment is both irrevocable and absolute for the 10-day statutory period. Centric-Jones Co. v. Hufnagel, 848 P.2d 942 (Colo. 1993).   Statutory period for accepting an offer of settlement cannot be extended by rule. The additional three-day period established in C.R.C.P. 6(e) for service by e-filing does not apply to statutorily established time periods. Montoya v. Connolly's Towing, Inc., 216 P.3d 98 (Colo. App. 2008).   Offer made to husband and wife could only be accepted by both parties and attempt by wife to accept half constituted a material change to the terms of the offer and was therefore a rejection of the offer. Since husband did not recover more from the jury than was offered by defendant he is not entitled to recover costs. Askew v. Gerace, 851 P.2d 199 (Colo. App. 1992).   Nothing in the statute permits one to condition an offer of settlement upon dismissal of claims against a third party whose claims would not be resolved in the settlement. Because the settlement offer required defendant to dismiss all counterclaims against plaintiffs but all plaintiffs did not join in the offer to dismiss their claims, plaintiffs did not comply with this section. Lawry v. Palm, 192 P.3d 550 (Colo. App. 2008).   A deposit of money into the court registry under C.R.C.P. 67(a) was not an offer of settlement triggering an award of costs under this section. First, the amount was based on the defendant's asserted maximum liability, an issue not yet decided, rather than as the result of any communication with the plaintiff. Second, the plaintiff had no opportunity to reject it. Therefore two of the key requirements of subsection (1)(a)(II), i.e., an offer and a rejection, were lacking. Taylor Morrison of Colo., Inc. v. Terracon Consultants, Inc., , 410 P.3d 767 .   Offer served less than ten days before trial was not within statutory period and the trial court was correct in not entering judgment on such offer. Larson v. A.T.S.I., 859 P.2d 273 (Colo. App. 1993).   Defendant's offer of $1.00 in settlement did not violate the spirit of this section and was both permissible and within the purpose of this section since this section is designed not only to encourage settlement but also to discourage unnecessary litigation and reduce the attendant costs. Graven v. Vail Assocs., Inc., 888 P.2d 310 (Colo. App. 1994).   It is contrary to the purpose of this section to allow non-monetary conditions to be imposed as part of a settlement offer. Therefore, any provisions extending the scope of the offer beyond the claims at issue remove the offer from the scope of the statute. Martin v. Minnard, 862 P.2d 1014 (Colo. App. 1993); Tallitsch v. Child Support Servs., Inc., 926 P.2d 143 (Colo. App. 1996); URS Group, Inc. v. Tetra Tech FW, Inc., 181 P.3d 380 (Colo. App. 2008).   A written proposal that included nonmonetary conditions, such as “mutual dismissal” and “full releases” where other potential claims existed between the parties, extended the offer beyond the claims at issue and therefore did not qualify under this section. Taylor Morrison of Colo., Inc. v. Terracon Consultants, Inc., , 410 P.3d 767 .   By requiring a release of all “future claims” relating to the project that was the subject of litigation, defendant imposed a nonmonetary condition that took its offer outside the scope of this section. URS Group, Inc. v. Tetra Tech FW, Inc., 181 P.3d 380 (Colo. App. 2008).   Inclusion of subrogation interests and putative liens in a settlement offer did not create a nonmonetary condition. Rather, by including those factors, defendant explained the value of the settlement offer. Thus, the settlement offer was covered by the language of this section. Strunk v. Goldberg, 258 P.3d 334 (Colo. App. 2011).   A settlement offer conditioned upon confidentiality cannot be used as a basis for seeking costs because either party has the right to make an offer and acceptance part of the public records. Martin v. Minnard, 862 P.2d 1014 (Colo. App. 1993).   Settlement offer provision inapplicable to condemnation proceedings in which the final judgment is less than the amount of the offer of settlement. City of Westminster v. Hart, 928 P.2d 758 (Colo. App. 1996).   Defendant failed to establish basis for relief under C.R.C.P. 60(b) where offer of settlement made by defendant's insurance attorney failed to specify whether the offer addressed fewer than all of the claims between the parties. Guevara v. Foxhoven, 928 P.2d 793 (Colo. App. 1996).   The intent of subsection (1)(a)(II) is to encourage the settlement of litigation by imposing upon a party who rejects a reasonable offer of settlement but recovers less than the amount of the offer, all of the post-offer costs of the offeror. Bennett v. Hickman, 992 P.2d 670 (Colo. App. 1999); Rubio v. Farris, 51 P.3d 992 (Colo. App. 2002).   This section modifies § 13-16-104 and C.R.C.P. 54(d) by not allowing a party who rejects a settlement offer and recovers less at trial to recover his or her costs, even though that party is determined to be the prevailing party. Bennett v. Hickman, 992 P.2d 670 (Colo. App. 1999); (decided under law in effect prior to 2008 amendment) (but see Miller v. Hancock, 2017 COA 141 , 410 P.3d 819, annotated below; Rubio v. Farris, 51 P.3d 992 (Colo. App. 2002).   The 2008 amendment abrogated Bennet v. Hickman, 992 P.2d 670 (Colo. 1999), annotated above. It entitles a plaintiff to recover pre-offer costs if he or she prevails at trial, but has no bearing on how a final judgment is compared to a settlement offer. Miller v. Hancock, 2017 COA 141 , 410 P.3d 819.   “Actual costs accruing after the offer of settlement” means due and payable or vested and thus costs that were paid prior to making an offer of settlement to plaintiff did not accrue or become due until after the settlement date and, therefore, fall within the scope of subsection (1)(a)(II). Bennett v. Hickman, 992 P.2d 670 (Colo. App. 1999).   A cost judgment under this section is to be offset from a jury award only after the prejudgment interest has been added. Bennett v. Hickman, 992 P.2d 670 (Colo. App. 1999).   This section details the steps a party must take in regard to offers of settlement. C.R.C.P. 26(a)(1)(C) and C.R.C.P. 26(e) exist, in part, to promote the exchange of sufficient information in order to encourage settlement. By binding plaintiff to the damage computations listed in plaintiff's initial disclosure statement merely because plaintiff did not designate the computations as estimates, the trial court effectively imposed a settlement on plaintiff and improperly involved the court in the settlement process. The trial court overemphasized plaintiff's failure to state that the initial disclosure of damages was an estimate, neglected to view the initial disclosures in the context of being information “now known and reasonably available,” and was insufficiently attentive to the importance of an early exchange of information and the resulting need to update information under C.R.C.P. 26(a)(1)(C) and 26(e). Absent some indication plaintiff tried to mislead the defendants or the court in plaintiff's initial disclosure or tried to frustrate the settlement process, plaintiff not required to accept an offer limited to plaintiff's initial disclosures. By granting the defendants' joint motion for judgment for a specific amount of damages over the objection of plaintiff, the court abused its discretion. Morgan v. Genesee Co., 86 P.3d 388 (Colo. 2004).   Applied in Lasher v. Paxton, 956 P.2d 647 (Colo. App. 1998); Goodwin v. Homeland Cent. Ins. Co., 172 P.3d 938 (Colo. App. 2007).