Court Opinion

ID: 5178098
Source: CourtListenerOpinion
Date Created: 2022-01-06 01:20:02.36136+00
Date Added: 2024-06-11T08:26:27.350848
License: Public Domain

JUDGE J. JONES
specially concurring.
{138 I concur in the majority's Judgment in full On the question of the concrete company's entitlement to an award of so-called "fees-on-fees," however, my reasons for concluding that the concrete company is entitled to such an award differ from those given by the majority. I conclude that the relevant statutory provision, subsection 10-3-1116(1), C.R.S. 2012, provides for an award of attorney fees as "costs," not "damages." Under our case law applying other fee-shifting provisions, it follows that the concrete company is entitled to an award of fees-on-fees.
139 Colorado follows the "American rule" regarding awards of attorney fees: parties in litigation generally pay their own attorney fees. Bernhard v. Farmers Ins. Exch., 915 P.2d 1285, 1287 (Colo.1996); see Ferrell v. Glenwood Brokers, Litd., 848 P.2d 936, 940 (Colo.1998). But statutes, court rules, the common law, and contracts sometimes provide for an award of attorney fees to a party in particular cireumstances,. Bernhard, 915 P.2d at 1287 & n. 3 (identifying exceptions to the general rule).
{ 140 Attorney fees that may be awardable fall into either of two categories: those that are awardable as "damages" and those that are awardable as "costs." See Ferrell, 848 P.2d at 940-41. Those fees awardable as "damages" are those incurred by the claimant as a legitimate consequence of the tort or breach of contract sued upon. Id. at 941 (citing Bunnett v. Smallwood, 793 P.2d 157, 160 (Colo.1990)); Elijah v. Fender, 674 P.2d 946, 951-52 (Colo.1984); Publix Cab Co. v. Colo. Nat'l Bank of Denver, 139 Colo. 205, 230, 338 P.2d 702, 715 (1959); Double Oak Constr., L.L.C. v. Cornerstone Dev. Int'l L.L.C., 97 P.3d 140, 150 (Colo.App.2003); see Simplot v. Chevron Pipeline Co., 563 F.3d 1102, 1115-16 (10th Cir.2009); Bunnett, 793 P.2d at 160 (such fees "are the subject of the lawsuit itself rather than an award to the successful litigant"); see also 1 Robert L. Rossi, Attorneys' Fees § 8.8, at 8-6 to 8-7 (8d ed.2011) ("[Wlhere the wrongful act of the defendant has involved the plaintiff in litigation with others, or placed the plaintiff in such relation with others as makes it necessary to incur expense to protect his or her interest, such expenses, including attorneys' fees, should be treated as the legal consequence of the original wrongful act, and may be recovered as damages."); Restate ment (Second) of Torts § 914(2) (1979). For example, the fees incurred by the claimant in litigation against a third party, where such litigation was a proximate consequence of the defendant's wrongdoing, are damages. Bernhard, 915 P.2d at 1287 n. 3, 1288; Publix Cab Co., 139 Colo. at 230, 338 P.2d at 715; see also Simplot, 563 F.3d at 1115-16; N. Am. Specialty Ins. Co. v. Corr. Med. Servs., Inc., 527 F.3d 1033, 1039 (10th Cir,.2008) (fees insured incurred in defending other litigation were recoverable as damages in suit against insurer which had allegedly breached its duties to defend and pay benefits).
¶ 141 But, important here, although "the fees incurred in the third party suit may be recovered in a later action against the wrongdoer, ... the fees incurred in bringing the actual action against the wrongdoer are not recoverable." Bernhard, 915 P.2d at 1287 n. 3; see also id. at 1291 (fees incurred in bringing an insurance bad faith action are not recoverable as damages); Bunnett, 793 P.2d at 160 ("[Alttorney fees ... are not considered actual damages."); Publix Cab Co., 139 Colo. at 230, 338 P.2d at 715; Rossi, *643§ 8.1, at 8-3, § 8.3, at 8-12, § 84, at 8-18 to 8-14. More precisely, the fees incurred in bringing the actual action against the wrongdoer are not "damages" and hence are not recoverable as such.
¶ 142 The fees incurred in the actual action against the wrongdoer are recoverable, if at all, as "costs." See Ferrell, 848 P.2d at 941-42. Such costs are awardable if there is a fee-shifting provision in law or contract providing for an award of attorney fees to a prevailing party. Id.; see Simplot, 563 F.3d at 1115-16; Bunnett, 793 P.2d at 160-61.
T 143 In sum, there is a substantive difference between fees awardable as damages and those awardable as costs. The fees incurred as a result of the wrongdoing may be recoverable as damages, but are not costs. Conversely, the fees incurred in the action against the wrongdoer may be recoverable as costs, but are not damages.1
1 144 Whether particular fees are awarda-ble as damages or as costs has other important consequences. For example, if attorney fees are sought as damages (and properly fit within that category), they "must be determined by the trier of fact and proven during the damages phase." Ferrell, 848 P.2d at 941; see Simplot, 563 F.3d at 1115-17 (a party has a Seventh Amendment right to a jury trial on the amount of attorney fees claimed as damages).2
€ 145 So, does subsection 10-8-1116(1) provide for an award of attorney fees incurred as damages, or for an award of attorney fees incurred as costs? It states that an insured "whose claim for payment of benefits has been unreasonably delayed or denied may bring an action in a district court to recover reasonable attorney fees and court costs and two times the covered benefit." Though it seems to me clear that the "covered benefit" is damages, the plain language of the subsection's terms, even considered as a whole and in light of the entire statutory scheme, see Lombard v. Colo. Outdoor Educ. Ctr., Inc., 187 P.3d 565, 570 (Colo.2008), does not clearly indicate that the fees awardable thereunder are damages. Nor does the plain language clearly indicate that the awardable attorney fees are costs. Therefore, the statute is ambiguous on that point.
1 146 Where, as here, a statute is ambiguous, the court may consider extrinsic indicators of legislative intent. Lombard, 187 P.3d at 570; State v. Nieto, 993 P.2d 493, 500-01 (Colo.2000); see § 2-4-203, C.R.8.2012.
1 147 I have reviewed the legislative history of House Bill 08-1047, of which section 10-88-1116 was a part. See Nieto, 993 P.2d at 501 (court may consider legislative history if a statute is ambiguous); see also § 2-4-208(1)(c) (same). It sheds no direct light on this point.
1 148 Considering the object sought to be attained, however, is somewhat helpful. See Colo. Dep't of Labor & Emp't v. Esser, 30 P.3d 189, 195 (Colo.2001) (court may consider object to be attained if statute is ambiguous); see also § 2-4-208(1)(a) (same). House Bill 08-1047 was enacted to further deter insurers from unreasonably delaying or denying the payment of benefits. Its title is: "Concerning strengthening penalties for the unreasonable conduct of an insurance carrier, and making an appropriation in connection therewith." Certainly, that object could be furthered by allowing an award of attorney fees incurred as damages or an award of attorney fees incurred as costs. But, as alluded to above, under the common law, fees *644incurred as a result of 'an insurer's bad faith breach of the insurance contract are already awardable as damages; the fees incurred in the action against the insurer are not, Bernhard, 915 P.2d at 1291, A common law bad faith claim will often (indeed, perhaps almost always) accompany a claim under sections 10-8-1115 and -1116. Thus, providing for an award of the same fees Already recoverable under the common law would rendér subsection 10-8-1116(1) less effective in attaining its object-it would not, at least in many cages, "strengthen{.] penalties" against insurers who act unreasonably. It seems to me, therefore, more likely that the General Assembly instead intended subsection 10-8-1116(1) to fill a gap-to provide a remedy that was previously unavailable. See Buckley v. Chilcutt, 968 P.2d 112, 117 (Colo.1998) (if statute is ambiguous, court may consider potential consequences of a particular construction); see also § 2-4-208(1)(e) (same).
€149 Considering a similar law is also somewhat helpful See Am. Numismatic Ass'n v. Cipoletti, 254 P.3d 1169, 1172 (Colo.App.2011) (if statute is ambiguous, court may consider laws on similar subjects); see also § 2-4-203(1)(d) (same). In Mishkin v. Young, 198 P.3d 1269 (Colo.App.2008), the division considered a statute allowing a tenant to sue a landlord for willful retention of a security deposit,. That statute provides that such willful retention "shall render a landlord liable for treble the amount of that portion of the security deposit wrongfully withheld from the tenant, together with reasonable attorneys' fees and court costs...." § 88-12-103(8)(a), C.R.S8.2012. The division regarded this statute as requiring an award of fees incurred in the action against the landlord (ie., as costs), including attorney fees incurred on appeal. Mishkin, 198 P.3d at 1273-74.
1 150 In the end, therefore, I conclude that subsection 10-8-1116(1) provides for an award of attorney fees (and costs) incurred in the statutory action against the insurer-that is, those fees incurred as costs, It follows that the concrete company is entitled to an award of fees-on-fees. See Mau v. E.P.H. Corp., 638 P.2d 777, 781 (Colo.1981); see also Mishkin, 198 P.3d at 1274.

. In Ferrell, the court observed that " 'attorney fees are neither costs nor damages, but a hybrid, partaking of each in varying degrees.'" Ferrell, 848 P.2d at 941 (quoting 1 Mary Frances Derfner & Arthur D. Wolf, Court Awarded Attorney Fees 11.02, at 1-9 (1992)). Considered in context, the court was not saying that particular fees incurred can be both costs and damages, or are neither, but rather that it is inaccurate to characterize all attorney fees as either one or the other.

. In Hall v. American Standard Insurance Co. of Wisconsin, 2012 COA 201, ¶ 16, 292 P.3d 1196, the division held that attorney fees recoverable under subsection 10-3-1116(1) are "damages," and may be awarded by the court after trial. I respectfully disagree with that decision, The fees sought in that case were those incurred in the action against the insurer under sections 10-3-1115 and -1116, not fees incurred as a result of the insurer's breach, Thus, the fees sought were not damages. And even if they, were damages, Ferrell says that the fact finder must determine those fees just as with any other category of damages. As discussed below, I believe subsection 10-3-1116(1) provides for an award of fees as costs.