Opinion ID: 2355739
Heading Depth: 3
Heading Rank: 1

Heading: Prevailing Party under the Water Agreement

Text: The injunction, Final Decree, and all related motions were a result of a dispute under the Water Agreement. The Water Agreement states that [i]n the event of a dispute arising concerning the intent or construction of this Agreement, the prevailing party shall be entitled to reasonable attorney's fees (emphasis added). We have interpreted the phrase arising out of to mean to originate from, grow out of, or flow from. City & Cnty. of Denver v. Gonzales, 17 P.3d 137, 140-41 (Colo.2001) (internal quotations omitted) (interpreting a fee shifting provision in a statute); see also Bedard v. Martin, 100 P.3d 584, 593 (Colo.App.2004) (interpreting a fee shifting provision in a real estate contract). In this case, the language in the Water Agreement is sufficiently similar to arising out of and we see no reason why that definition is not applicable here, making this a dispute arising concerning the intent or construction of the [Water Agreement]. Although Anderson's original application did not specifically involve the Water Agreement, nearly every other motion and order in this case referenced and incorporated the Water Agreement. Even Anderson agrees that his motion for an injunction was made in part to enforce and interpret the Water Agreement. The Final Decree also interpreted and incorporated the Water Agreement. In the Final Decree, the water court clarified what it meant to require one-half of the water to remain in the main part of the Eureka Ditch. Therefore, we conclude that this was a dispute concerning the intent or construction of [the Water Agreement]. We further conclude that Pursell was the prevailing party under this provision. Like the decision to award attorney fees, we review determinations of which party is the prevailing party under a fee shifting provision for an abuse of discretion. 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)). We use this standard because the trial court is in the best position to observe the course of the litigation and to determine which party ultimately prevailed. Archer v. Farmer Bros., 90 P.3d 228, 231 (Colo.2004) (citations omitted). In order to be a prevailing party, a party must succeed on a significant issue in the litigation and achieve some of the benefits sought. In re Water Rights of Bd. of Cnty. Comm'rs of Cnty. of Arapahoe, 891 P.2d 981, 984 (Colo.1995) (citing Odenbaugh v. Cnty. of Weld, 809 P.2d 1059, 1063 (Colo. App.1990)). But, [t]he issue on which the party prevails need not be the central issue in the litigation, only a significant one. Id. (citations omitted). The court should examine the overall context of the case, Munoz v. Measner, 214 P.3d 510, 515 (Colo.App.2009), and should consider where in the case the parties spent the majority of their time and resources, Archer, 90 P.3d at 232. In Archer, we held that a party was a prevailing party under C.R.C.P. 54(d) and entitled to costs even though there had been an adverse judgment against it. Id. There, although the other party had prevailed on one claim, we determined that the vast majority of the time and resources of the litigation were devoted to the claims that were dismissed against the party. Id. Thus, we held that the party was entitled to costs as the prevailing party despite the adverse judgment against it. Id. Here, the bulk of the litigation involved whether or not Sebesta and Pursell were required to by-pass the ponds on their properties so that Anderson would receive his share of the water right in accordance with the Water Agreement. There was little to no contention over the other parts of the application. The water court ultimately ruled that the Water Agreement did not require Sebesta and Pursell to by-pass the ponds on their properties. Thus, because Pursell succeeded on his main objection to the application and the only issue that was significantly litigated, the water court was correct in determining that he was the prevailing party in a dispute arising concerning the intent or construction of the [Water Agreement].