Court Opinion

ID: 4585230
Source: CourtListenerOpinion
Date Created: 2020-11-10 19:02:18.721675+00
Date Added: 2024-06-11T13:42:47.889538
License: Public Domain

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