2019 CO 46
Colo.2019Background
- Parties are siblings who settled a dispute over a family farm and water shares in a Settlement Agreement that followed prior litigation and bankruptcy; plaintiffs conveyed three parcels (A, B, C) to defendant by warranty deed.
- Section 13(a) of the Settlement Agreement provided that the prevailing party in any action to enforce the Agreement “by any means” would be awarded costs, including reasonable attorney fees.
- After the conveyances, plaintiffs sued in water court seeking injunctive and declaratory relief, conversion, and trespass, alleging defendant blocked historical access to headgates, valves, pipelines, and diverted water—claims plaintiffs framed as consistent with the Settlement Agreement’s reservation of historical access.
- Both parties filed partial summary judgment motions that relied on the Settlement Agreement’s terms; the water court granted some relief to defendant but denied both summary judgment motions in part, then after trial entered judgment for defendant on all remaining claims.
- Defendant moved for attorney fees under section 13(a); the water court denied the fee motion, reasoning plaintiffs only sought declaratory/injunctive relief (not breach/specific performance) and thus were not enforcing the Agreement.
- The Colorado Supreme Court reviewed de novo and reversed, holding plaintiffs’ claims were, in substance, efforts to enforce the Settlement Agreement and that defendant, as prevailing party, is entitled to fees; the case was remanded to quantify trial and appellate fees.
Issues
| Issue | Plaintiffs' Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §13(a)’s fee-shifting covers declaratory/injunctive actions that, in substance, seek to enforce the Settlement Agreement | Klun plaintiffs: §13(a) applies only to breach/damages or specific performance claims; silent as to declaratory relief, so fees not available | Michael Klun: §13(a) covers any action to enforce the Agreement “by any means,” so prevailing party in plaintiffs’ enforcement-based suit is entitled to fees | Fee provision is unambiguous and broad; plaintiffs’ claims sought to enforce the Agreement in substance, thus defendant (prevailing party) is entitled to attorney fees under §13(a) |
| Whether plaintiffs’ pleadings and litigation conduct show they were seeking to enforce the Agreement | Plaintiffs: their remedies were declaratory/injunctive and not claims for breach—thus not enforcement triggering fees | Defendant: plaintiffs’ complaint, summary judgment motion, and requests for fees show they relied on and sought enforcement of the Agreement’s terms | Plaintiffs’ own pleadings and course of performance demonstrate they relied on and sought to enforce the Agreement; they cannot argue otherwise after losing |
Key Cases Cited
- Ad Two, Inc. v. City & County of Denver ex rel. Mgr. of Aviation, 9 P.3d 373 (Colo. 2000) (contract interpretation is a question of law; give effect to parties’ intent from the agreement's plain language)
- Pepcol Mfg. Co. v. Denver Union Corp., 687 P.2d 1310 (Colo. 1984) (parties’ performance under a contract before controversy is probative of their intent)