Court Opinion

ID: 4365762
Source: CourtListenerOpinion
Date Created: 2019-02-07 22:06:14.122336+00
Date Added: 2024-06-11T14:48:27.190748
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
                                                            February 7, 2019

                                2019COA19

No. 17CA1257, Parks v. Parrish — Torts — Abuse of Process;
Attorneys and Clients — Malpractice; Attorney Fees

     A division of the court of appeals considers whether bringing a

legal malpractice action to avoid or reduce liability for a former

attorney’s legal fees satisfies the improper use prong of a claim for

abuse of process. The division concludes that it does not.

Improper use requires the use of a proceeding to achieve an

illegitimate or coercive goal that is outside the scope of the

proceeding’s proper purpose. Because a regular and legitimate

function of a legal malpractice action is to avoid paying attorney

fees, bringing a legal malpractice case and carrying it to its natural

end does not constitute improper use, regardless of the motive.

Accordingly, the division vacates the judgment on the attorney’s

abuse of process claim.
     The division also considers whether an attorney seeking

damages for unpaid attorney fees must call an expert witness to

testify that the fees sought as damages are reasonable. The division

holds that such testimony is not required; reasonableness may be

proved by testimony from the attorney who performed the services

in question and other documentary evidence.
COLORADO COURT OF APPEALS                                          2019COA19

Court of Appeals No. 17CA1257
Jefferson County District Court No. 15CV31645
Honorable Randall C. Arp, Judge

James D. Parks III,

Plaintiff-Appellant,

v.

Edward Dale Parrish LLC, a Colorado limited liability company; and Edward
Dale Parrish, individually,

Defendants-Appellees.

             JUDGMENT AFFIRMED IN PART, VACATED IN PART,
                AND CASE REMANDED WITH DIRECTIONS

                                  Division VII
                         Opinion by JUDGE J. JONES
                       Navarro and Casebolt*, JJ., concur

                         Announced February 7, 2019

Westerfield & Martin, LLC, Zachary S. Westerfield, Logan R. Martin, Denver,
Colorado, for Plaintiff-Appellant

Edward Dale Parrish, PC, Dale Parrish, Wheat Ridge, Colorado, for Defendants-
Appellees

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2018.
¶1    Plaintiff, James D. Parks III, appeals from an unfavorable

 outcome in his malpractice case against his former attorney,

 defendant Edward Dale Parrish, and Parrish’s limited liability

 company/law firm, Edward Dale Parrish LLC (the law firm). He

 contends that the district court erred by (1) denying his motion for

 directed verdict (and subsequent motion for judgment

 notwithstanding the verdict (JNOV)) on defendants’ abuse of

 process counterclaim; (2) dismissing his breach of fiduciary duty

 claim; (3) denying his motion for directed verdict on defendants’

 breach of contract counterclaim; and (4) awarding defendants their

 costs for an expert witness. We agree with Parks’ first contention,

 but disagree with his second, third, and fourth contentions.

 Accordingly, we affirm in part and vacate in part.

                           I.   Background

¶2    Parrish and the law firm represented Parks in two cases — a

 partition case and a dissolution case — against Parks’ former, long-

 term girlfriend. 1 Neither case was resolved to Parks’ liking. He told

 Parrish to appeal the award of attorney fees against him in the

 1 Parrish was actually Parks’ second attorney. Parks’ first attorney
 left her firm and withdrew as Parks’ counsel.

                                   1
 dissolution case. Parrish said, “Not unless you pay me,” and after

 failed payment negotiations, filed a notice of attorney’s lien in the

 partition case.

¶3    In response, Parks filed this case against defendants, 2 alleging

 that defendants provided negligent representation and breached

 their fiduciary duty to Parks in the partition and dissolution cases.

 More particularly, and as now relevant, Parks alleged that Parrish

 failed to present evidence that would have avoided an award of

 attorney fees against Parks in the dissolution case, and that Parrish

 entered into a stipulation in the partition case without authority.

 Defendants counterclaimed for breach of contract (seeking an

 award of fees incurred in previously representing Parks) and abuse

 of process (based on Parks bringing this case).

¶4    Parks moved for summary judgment on the abuse of process

 counterclaim. The district court denied the motion, concluding that

 “if a jury found that Defendants did not provide negligent

 representation, then the jury could find that Plaintiff brought this

 action for the sole purpose of avoiding paying his legal fees by

 2Parks named several other individuals as defendants, but Parrish
 and the law firm are the sole remaining defendants.

                                    2
 attempting to coerce Defendants into either reducing the fees or

 accepting payment in an unacceptable form.”

¶5    The case went to trial. At the close of Parks’ evidence,

 defendants moved for directed verdicts on all of Parks’ claims. At

 first, the district court denied the motion in toto. But the next trial

 day, the court reconsidered defendants’ motion as to the breach of

 fiduciary duty claim. The court heard additional argument from

 both sides, concluded that the breach of fiduciary duty claim was

 duplicative of the negligence claim, and dismissed that claim.

¶6    Parks later moved for directed verdicts on defendants’

 counterclaims. The court denied that motion.

¶7    The jury returned verdicts for defendants on all claims and

 counterclaims, awarding defendants $33,580 on the breach of

 contract counterclaim and $46,314 on the abuse of process

 counterclaim. Defendants also moved for an award of costs for

 their expert witness. The court awarded $8,000. Parks moved for

 JNOV. By rule, that motion was deemed denied when the district

 court didn’t timely act on it. See C.R.C.P. 59(j).

                                    3
                                II.     Discussion

                           A.         Abuse of Process

¶8     Parks first contends that the district court erred in denying his

  motion for directed verdict and motion for JNOV on defendants’

  abuse of process counterclaim. We agree and vacate the judgment

  on that counterclaim.

                          1.     Standard of Review

¶9     We review de novo a district court’s denials of a motion for

  directed verdict and a motion for JNOV. Int’l Network, Inc. v.

  Woodard, 2017 COA 44, ¶ 8.

¶ 10   We view the evidence, and all inferences that may reasonably

  be drawn therefrom, in the light most favorable to the nonmoving

  party. Id. A court shouldn’t grant either motion unless there is no

  evidence that could support a verdict against the moving party on

  the claim. Id.; accord Boulders at Escalante LLC v. Otten Johnson

  Robinson Neff & Ragonetti PC, 2015 COA 85, ¶ 19.

                   2.     Applicable Law and Analysis

¶ 11   Abuse of process provides a remedy for situations where

  litigation, though properly commenced, is misused to coerce or

  compel a result that couldn’t normally be obtained via the ordinary

                                          4
  use of process. Active Release Techniques, LLC v. Xtomic, LLC, 2017
COA 14, ¶ 8; Walker v. Van Laningham, 148 P.3d 391, 394 (Colo.

  App. 2006) (“The essence of the tort of abuse of process is the use of

  a legal proceeding primarily to accomplish a purpose that the

  proceeding was not designed to achieve.”). 3

¶ 12   An ulterior or even nefarious motive, alone, isn’t enough to

  constitute an abuse of process. To prove an abuse of process, the

  claimant must show

               (1) an ulterior purpose for the use of a
               judicial proceeding; (2) willful action in the
               use of that process which is not proper in
               the regular course of the proceedings, i.e.,
               use of a legal proceeding in an improper
               manner; and (3) resulting damage.

  Mackall v. JPMorgan Chase Bank, N.A., 2014 COA 120, ¶ 39

  (quoting Lauren Corp. v. Century Geophysical Corp., 953 P.2d 200,

  202 (Colo. App. 1998)).

  3Abuse of process isn’t synonymous with malicious prosecution.
  Malicious prosecution “addresses the situation where a person
  knowingly initiates baseless litigation.” Mintz v. Accident & Injury
  Med. Specialists, PC, 284 P.3d 62, 66 (Colo. App. 2010), aff’d, 2012
CO 50. It also has an additional element that the prior action
  ended in favor of the malicious prosecution plaintiff. Hewitt v. Rice,
  154 P.3d 408, 411, 413-14 (Colo. 2007).

                                     5
¶ 13   The second element is distinct from the first. “[T]here is no

  liability for abuse of process if the [party’s] ulterior purpose was

  simply incidental to the proceeding’s proper purpose.” Mintz v.

  Accident & Injury Med. Specialists, PC, 284 P.3d 62, 66 (Colo. App.

  2010), aff’d, 2012 CO 50. Put another way, “[i]f the action is

  confined to its regular and legitimate function in relation to the

  cause of action stated in the complaint[,] there is no abuse, even if

  the plaintiff had an ulterior motive in bringing the action or if he

  knowingly brought suit upon an unfounded claim.” Colo. Cmty.

  Bank v. Hoffman, 2013 COA 146, ¶ 37 (quoting Sterenbuch v. Goss,

  266 P.3d 428, 439 (Colo. App. 2011)); see W. Page Keeton et al.,

  Prosser and Keeton on the Law of Torts § 121, at 898 (5th ed. 1984)

  (abuse of process requires a “definite act or threat not authorized by

  the process, or aimed at an objective not legitimate in the use of the

  process”).

¶ 14   Defendants argue that Parks brought this case to coerce them

  “into reducing the legal fees or accepting payment in an

  unacceptable form.” (The district court seems to have agreed that,

  if true, this was enough to support the counterclaim.) In support of

  this argument, they point to evidence presented at trial that Parks

                                     6
filed the dissolution case to gain leverage in the partition case,

coerced his ex-girlfriend into adding him and his children to her

health insurance, and threatened defendants with suit when

attempting to negotiate a lower payment. But none of these acts is

evidence of an improper use of the legal system in this case. See

Active Release Techniques, ¶ 12 (the plaintiff’s “reputation for filing,

or even [his] abuse of process in, other lawsuits should have no

bearing on [his] alleged abuse of process here”; use of process in the

case must be looked at objectively); see also Sterenbuch, 266 P.3d

at 438-39 (court properly dismissed abuse of process counterclaim

because alleging that the plaintiff had no lawful claims against the

defendants and used the suit to “harass, embarrass, damage,

burden and wrongfully obtain monies from defendants” didn’t

indicate improper use of process); cf. Aztec Sound Corp. v. W. States

Leasing Co., 32 Colo. App. 248, 252-53, 510 P.2d 897, 899 (1973)

(party used writ of replevin not to obtain property, but to demand

money not owed). 4

4 While threatening suit might indicate an ulterior motive, it doesn’t
indicate an improper use of the courts. See Active Release
Techniques, LLC v. Xtomic, LLC, 2017 COA 14, ¶ 12 (letters sent to

                                   7
¶ 15   Defendants seize on the statement in Walker that “[t]he legal

  proceeding must be used in an improper manner, for example, to

  accomplish a coercive goal.” 148 P.3d at 394. But they take that

  statement out of context. As Walker itself makes clear, that

  “coercive goal” must be one “that the proceeding was not designed

  to achieve.” Id.

¶ 16   One regular and legitimate function of a malpractice action is

  to contest attorney fees claimed by the attorney alleged to have

  committed malpractice. See Roberts v. Holland & Hart, 857 P.2d
492, 498 (Colo. App. 1993). That’s exactly what defendants allege

  Parks is doing in this case. But bringing a malpractice case and

  carrying it to its natural end to obtain a result such an action is

  designed to achieve doesn’t constitute an improper use of process,

  no matter the motive. See Sterenbuch, 266 P.3d at 439 (“[W]rongful

  use may not be inferred from the motive.” (citing James H. Moore &

  Assocs. Realty, Inc. v. Arrowhead at Vail, 892 P.2d 367, 373 (Colo.

  App. 1994))); see also Walker, 148 P.3d at 395 (“filing complaints

  individuals informing them of an investigation into potential
  litigation didn’t indicate an abuse of process because they were sent
  before and outside the scope of any litigation).

                                     8
  about barking dogs and cruelty to animals” under a county

  ordinance designed to address those issues isn’t an abuse of

  process, even with an ulterior motive); cf. Aztec Sound Corp. v. W.

  States Leasing Co., 32 Colo. App. 248, 510 P.2d 897 (1973) (leasing

  company commenced replevin action to repossess equipment to

  coerce payment under threat of removing equipment on which

  lessee’s business relied).

¶ 17   We therefore conclude that the district court erred in

  reasoning that the jury could find an abuse of process if it found

  merely that defendants didn’t provide negligent representation.

  Given the lack of evidence of any improper use of process, the

  district court should have granted Parks’ motion for a directed

  verdict or motion for JNOV on the abuse of process counterclaim.

  Accordingly, we vacate the judgment on the abuse of process

  counterclaim and direct the district court to enter judgment for

  Parks thereon. 5

  5Parks also argues that the district court’s error in declining to
  dismiss this counterclaim taints the verdicts on the other claims.
  We observe that Parks didn’t make this argument in the district
  court, as his counsel conceded at oral argument on appeal. We
  don’t consider arguments that a party failed to make in the district

                                    9
                      B.   Breach of Fiduciary Duty

¶ 18   Parks next contends that the district court erred in dismissing

  as duplicative his breach of fiduciary duty claim relating to the

  partition case. We aren’t persuaded.

¶ 19   Again, we review the district court’s decision regarding a

  motion for directed verdict de novo. Int’l Network, ¶ 8.

¶ 20   A legal malpractice case may, depending on the particular

  allegations, be brought under different theories — breach of

  contract, breach of fiduciary duty, and negligence. Smith v.

  Mehaffy, 30 P.3d 727, 733 (Colo. App. 2000). But while

  professional negligence may also indicate a breach of trust, that

  doesn’t mean that every professional negligence claim also supports

  a separate cause of action for breach of fiduciary duty. Moguls of

  Aspen, Inc. v. Faegre & Benson, 956 P.2d 618, 621 (Colo. App.

  1997); see also Aller v. Law Office of Carole C. Schriefer, P.C., 140
P.3d 23, 27-28 (Colo. App. 2005). Where the claims arise from the

  same material facts and the allegations pertain to an attorney’s

  court. Estate of Stevenson v. Hollywood Bar & Cafe, Inc., 832 P.2d
718, 721 n.5 (Colo. 1992).

                                     10
  exercise of professional judgment, the breach of fiduciary duty

  claim should be dismissed as duplicative. Aller, 140 P.3d at 27-28.

¶ 21   Parks alleged that Parrish breached his fiduciary duty by

  entering into the stipulation without Parks’ consent. That same

  allegation underlies, in part, the negligence claim and implicates

  Parrish’s exercise of professional judgment. 6 Parks doesn’t seem to

  argue to the contrary. Rather, he argues that the nature of the

  duty, rather than the factual basis, controls. Under the

  circumstances of this case, however, that distinction isn’t

  dispositive.

¶ 22   “Legal malpractice actions based on negligence concern

  violations of a standard of care, whereas legal malpractice actions

  based on breach of fiduciary duty concern violations of a standard

  of conduct.” Smith, 30 P.3d at 733. A breach of fiduciary duty

  claim arises from the attorney’s breach of the duties of loyalty and

  confidentiality. Aller, 140 P.3d at 27. But where the action

  concerns merely an attorney’s exercise of professional judgment,

  6 Contrary to Parks’ characterizations, the agreement at issue was a
  stipulation in the partition case that would guide a commissioner in
  valuing the property and determining an equitable division, not a
  settlement of the case.

                                   11
  the claim is one for negligence. Id. at 27-28. And “[w]here, as here,

  the operative allegations of the complaint assert violations of both

  standards of conduct and standards of care without making specific

  and particularized allegations of intentional conduct, . . . the

  malpractice claim is based upon negligence.” Id. at 27.

¶ 23   Parks argues on appeal (as he did in the district court) that

  Parrish’s breach of fiduciary duty wasn’t entering into a stipulation

  without authority, but representing to opposing counsel that he

  could enter into the stipulation. 7 We don’t discern any meaningful

  difference. Both the negligence claim and the fiduciary duty claim

  are based on the same material fact: Parrish entering into a

  stipulation. As the district court pointed out, “It’s the same

  conduct,” and any argument otherwise would be “splitting hairs.”

¶ 24   Parks’ reliance on Dury v. Ireland, Stapleton, Pryor & Pascoe,

  P.C., Civ. No. 08-cv-01285-LTB-MEH, 2009 WL 2139856 (D. Colo.

  July 14, 2009) (unpublished order), is misplaced. In that case, the

  defendants represented multiple parties with differing interests,

  7 Parks’ amended complaint, however, alleges that Parrish and the
  law firm breached a fiduciary duty by “[e]ntering into a stipulation
  that [they] did not have authority to enter into on behalf of [Parks].”

                                    12
  resulting in a conflict and a breach of the duty of loyalty that was

  separate and independent from any negligent handling of the actual

  legal work. Parks didn’t allege any such conflict or improper

  disclosure of attorney-client information (or any other breach of

  loyalty, such as misuse of client funds, see Aller, 140 P.3d at 27-

  28).

¶ 25     For these reasons, we conclude that the district court didn’t

  err.

                          C.   Breach of Contract

¶ 26     Parks next contends that the district court erred in denying

  his motion for a directed verdict on defendants’ breach of contract

  counterclaim. Again, we disagree.

¶ 27     Defendants claimed that Parks breached a contract by failing

  to pay attorney fees billed for work the law firm performed on his

  behalf. Because reasonableness is an implied term in all contracts

  for attorney fees, Parks argues that defendants had to prove the

  reasonableness of the fees they sought. Going a step further, he

  argues that expert testimony was necessary to establish the

  reasonableness of defendants’ claimed fees, and because

                                     13
  defendants didn’t present any such testimony, the claim necessarily

  fails. This last step is where his argument collapses.

¶ 28   Parks doesn’t point to any case — and we haven’t found any —

  supporting his assertion that expert witness testimony is required

  when breach of contract damages are unpaid attorney fees. Nor

  does he make any compelling argument that laypersons can’t

  determine the reasonableness of the fees charged by an attorney

  without the help of an expert. Cf. Boigegrain v. Gilbert, 784 P.2d
849, 850 (Colo. App. 1989) (in professional negligence cases, expert

  testimony as to the standard of care is required when a breach of

  duty can’t be understood by a layperson without the help of an

  expert). True, in attorney fees disputes, parties frequently offer

  expert testimony, but that doesn’t mean that expert testimony is

  always required. 8

¶ 29   At trial, Parrish testified about the services rendered, the time

  spent on those services, and the associated fees charged. And he

  spoke to the reasonableness of the time spent on specific tasks.

  8 We don’t mean to suggest that expert testimony on
  reasonableness is required in certain circumstances or is never
  required. These issues remain for another day.

                                    14
  The jury also considered defendants’ bills to Parks. The jury

  therefore had sufficient evidence from which to assess the

  reasonableness of the claimed fees. See In re Marriage of Pollock,

  881 P.2d 470, 472 (Colo. App. 1994) (additional expert testimony on

  reasonableness wasn’t required where testimony of client and

  attorney supported the award). 9

                               D.    Costs

¶ 30   Lastly, Parks contends that the district court erred in

  awarding costs for an expert witness to defendants. He argues

  these costs were considered by the jury as part of the damages for

  defendants’ counterclaims, and therefore the court awarded

  duplicative costs.

¶ 31   In the district court, however, Parks didn’t object to the costs

  on this basis. Therefore, the issue isn’t preserved and we don’t

  need to consider it. See Estate of Stevenson v. Hollywood Bar &

  Cafe, Inc., 832 P.2d 718, 721 n.5 (Colo. 1992).

  9 And though defendants asked for $43,000, the jury awarded them
  only $33,580 for breach of contract, indicating that the jury gave
  thought to what amount would be reasonable.

                                     15
¶ 32   Nor do we see any need to vacate the costs award because of

  our decision to vacate the judgment on the abuse of process

  counterclaim. Though that decision means defendants haven’t

  prevailed on every issue, they clearly remain, on balance, the

  “prevailing party.” And the costs in question were for defendants’

  expert, who testified concerning defendants’ compliance with the

  standard of care; these costs don’t relate to the abuse of process

  counterclaim.

                      E.   Appellate Attorney Fees

¶ 33   Defendants ask for an award of their appellate attorney fees,

  arguing that Parks’ appeal is substantially groundless and that

  Parks appealed only to delay or increase defendants’ expenses. We

  disagree with their assertions and so decline the request.

                            III.   Conclusion

¶ 34   We vacate the judgment in favor of defendants on the abuse of

  process counterclaim, but affirm the judgment in all other respects.

  We remand the case to the district court to enter judgment in Parks’

  favor on the abuse of process counterclaim, and to amend the

  judgment as to damages accordingly.

       JUDGE NAVARRO and JUDGE CASEBOLT concur.

                                    16