Opinion ID: 171942
Heading Depth: 2
Heading Rank: 3

Heading: Analysis of Denial of Attorney Fees

Text: Mr. Lopez’s final claim is that the district court erred in denying his request for attorney fees. Mr. Lopez moved for an award of attorney fees under § 10-4-708(1.7). Subsection (a) of § 10-4-708(1.7) reads: At least twenty days prior to the commencement of the proceeding the party claiming the benefits shall set forth the amount claimed and in controversy in a separate document entitled “Notice to insurer of amount claimed”, which shall include no more than those amounts the insured claims are denied or not timely paid by the insurer. The notice shall also specify the amount, if any, claimed for attorney fees. The notice shall be served on all parties no later than twenty days prior to the commencement of the arbitration hearing or trial, and shall be served in the manner set forth in rules promulgated by the commissioner of insurance. If such notice is not timely served, there shall be no award of attorney fees to the person claiming benefits, unless the arbitrator or court determines that the failure was the result of excusable neglect, in which case the arbitration or trial -23- shall be continued to a date at least twenty days after the notice is filed. As noted above, United Fire argued that Mr. Lopez could not collect attorney fees because he had failed to provide the notice referred to above and the district court denied fees because “[t]here was no breach of the contract as the policy was written.” Aplt. App. at 470. Mr. Lopez argues the court’s denial was inconsistent with its previous holding that a breach of contract did occur. We affirm the denial of attorney fees but for a different reason than that advanced by the district court. See Proctor v. United Parcel Serv., 502 F.3d 1200, 1206 (10th Cir. 2007) (internal quotation omitted) (“We may affirm the district court’s decision for any reason supported by the record.”). We review de novo “any statutory constructions or legal conclusions that provide a basis for the award” of attorney fees, “[a]lthough the ultimate decision to award fees rests within the district court’s discretion.” Phelps v. Hamilton, 120 F.3d 1126, 1129 (10th Cir. 1997). We note that “[i]n the absence of a statute, court rule, or private contract to the contrary, attorney fees are not recoverable by a prevailing party in either a contract or a tort action.” Adams v. Farmers Ins. Group, 983 P.2d 797, 801 (Colo. 1999). Mr. Lopez is seeking attorney fees under § 10-4-108(1.7), which the Colorado Supreme Court has stated is the subsection that “pertains to the availability and amount of attorney fee awards.” Id. at 803. When interpreting the meaning of that statute, we look to Colorado’s -24- rules of statutory construction. Finstuen v. Crutcher, 496 F.3d 1139, 1148 (10th Cir. 2007). In construing a statute, our duty is to effectuate the intent and purpose of the General Assembly. We read the statute as a whole, giving sensible effect to all of its parts whenever possible. If the statutory provisions are clear, we apply their plain and ordinary meaning. If statutory provisions are in conflict, we adopt the interpretation that best harmonizes the various provisions if possible. CLPF-Parkridge One, L.P., v. Harwell Invs., Inc., 105 P.3d 658, 660 (Colo. 2005) (citations omitted). Under § 10-4-708(1.7)(a): At least twenty days prior to the commencement of the proceeding the party claiming the benefits shall set forth the amount claimed and in controversy in a separate document entitled “Notice to insurer of amount claimed”, which shall include no more than those amounts the insured claims are denied or not timely paid by the insurer. § 10-4-708(1.7)(a) (emphasis added). This notice must also include claimed attorney fees. Id. Further, “[i]f such notice is not timely served, there shall be no award of attorney fees to the person claiming benefits, unless the arbitrator or court determines that the failure was the result of excusable neglect, in which case the arbitration or trial shall be continued to a date at least twenty days after the notice is filed.” Id. -25- The parties agree no notice was served. Mr. Lopez argues on appeal, as he did to the district court, that service of the notice was not required under the facts of this case. Although the first sentence of subsection 1.7 states that the notice must be served “[a]t least twenty days prior to the commencement of the proceeding,” Mr. Lopez points out that the third sentence clarifies what is meant by the phrase “the proceeding.” Id. That sentence reads: “The notice shall be served on all parties no later than twenty days prior to the commencement of the arbitration hearing or trial, and shall be served in the manner set forth in rules promulgated by the commissioner of insurance.” Id. (emphasis added). Mr. Lopez therefore argues that because the present case was never set for trial or arbitration he was not required to serve the notice. But the words “the proceeding” are used not just in subsection 1.7(a), they are also used in subsection 1.7(c), which controls how the trial court is to determine “the amount of attorney fees, if any, to be awarded.” Under § 10-4-708(1.7)(c)(I): The award of attorney fees to the insured shall be in direct proportion to the degree by which the insured was successful in the proceeding. The determination of the degree of the insured’s success shall be based upon a comparison of the amount of benefits set forth in the notice of amount of benefits claimed and the amount of benefits recovered in the proceeding. The percentage resulting from this comparison shall be the degree by which the insured was successful. -26- Thus, an award of attorney fees is based on the degree to which the party seeking the fees was “successful” in “the proceeding.” But, as pointed out by Mr. Lopez, there was no arbitration hearing or trial in this case. Mr. Lopez therefore implicitly reads the references to “the proceeding” in subsection 1.7(c)(I), as references to something that did take place in this case, such as the contract action in general or possibly just the summary judgment proceedings. He therefore argues the monies he eventually received from United Fire were proof of monetary success in “the proceeding.” But such conflicting interpretations of the phrase “the proceeding” would not harmonize the various provisions. Mr. Lopez argued in the district court that he “was successful in recovering 100% of the PIP benefits sought in the litigation.” Aplt. App. at 455. But such an interpretation ignores the statutory authorization to award attorney fees. An insured’s “success” in “the proceeding” is formulaic. § 10-4-708(1.7)(c)(I). It is measured by a comparison of the claimed benefits set forth in the statutory notice with the amount of benefits recovered in “the proceeding.” 13 At this time, we need not decide precisely what the Colorado legislature intended with its reference to a “proceeding.” Here, if the phrase “the proceeding” in subsection 1.7(a) and subsection 1.7(c)(I) is interpreted as a reference to something that actually took place in this case, such as Mr. Lopez’s 13 In Adams, the Colorado Supreme Court stated that this “statutory definition of who constitutes a ‘successful’ party in the substantive proceedings is in need of no additional clarification.” 983 P.2d at 802. -27- overall legal action or the summary judgment proceedings, then Mr. Lopez is barred from collecting fees because he did not serve his notice at least twenty days prior to “the commencement of the proceeding,” i.e., the filing of his complaint or his motion for partial summary judgment. 14 If “the proceeding” is interpreted in those subsections as a reference to an “arbitration hearing or trial” then, although no notice was required, Mr. Lopez is still not entitled to attorney fees because, since there was no trial, there were no “benefits recovered in the proceeding” and he was therefore not “successful in the proceeding.” Under either interpretation, affirmance is required.