Bаrry L. Bruce, Attorney-Appellant, v. Jay A. Roberts and Ashley Roberts McNamara, as Co-Trustees of the Della I. Roberts Trust, Petitioners-Appellees.
Court of Appeals No. 15CA1824
COLORADO COURT OF APPEALS
Announced December 15, 2016
2016COA182
Honorable Devin R. Odell, Judge
Larimer County District Court No. 13PR30246. Division III, Opinion by JUDGE NAVARRO, Webb and Hawthorne, JJ., concur.
Davis Graham & Stubbs LLP, John M. Bowlin, Denver, Colorado, for Appellees
¶ 1 A Colorado court must award attorney fees against a party who presents the court with a claim or defense lacking substantial justification.
¶ 2 This question is raised by appellant, Barry L. Bruce, an attorney assessed with oppоsing counsels’ fees under
¶ 3 We conclude that Kraft properly applied the plain language of
¶ 4 In 1996, Della Roberts, assisted by her son James Roberts, formed the Della I. Roberts Trust in Colorado, where she lived. She died eight days later.
¶ 5 Upon Della‘s death, James, the designated trustee, was supposed to divide the trust‘s assets into two equal shares. The first share was intended to benefit James and his wife, Mary Sue Roberts. The second share was intended to benefit Della‘s grandchildren, the children of James and Mary Sue. The trust instrument further provided that James was tо distribute to Della‘s grandchildren “at least monthly and in equal amounts, all of the net income from their trust share.”
¶ 6 James did not properly administer the trust. Apparently, however, no one expressed concern over his administration until after he died in October 2012. Upon his death, Mary Sue assumed the role of trustee pursuant to the trust‘s provisions. As such, she was supposed to distribute equally all principal remaining from the trust‘s second share to Della‘s grandchildren. But a majority of the grandchildren promptly removed Mary Sue as trustee (as permitted by the trust instrument), citing concerns that trust assets had already been squandered and she might not properly distribute any remaining assets. These grandchildren then sought the trust‘s financial records and a corporate fiduciary willing to assume the role of trustee.
¶ 7 Unable to obtain either the financial records or a willing corporate fiduciary, two grandchildren — Jay A. Roberts and Ashley Roberts McNamara — brought this probate action on behalf of the trust. (We will refer to them as “trustees” because they were ultimately aрpointed trustees.) Their initial petition sought an order appointing a successor trustee. They then sought the records necessary to complete a historical accounting for the trust, marshal and distribute the remaining assets, and finally dissolve the trust.
¶ 8 Mary Sue objected to the petition on jurisdictional grounds. Citing her and James‘s move from Colorado to West Virginia in 1999, she argued that West Virginia courts had exclusive jurisdiction over the trust. In June 2013, the district court rejected the jurisdictional challenge and concluded that Larimer County, Colorado, was the appropriate venue.
¶ 9 Meanwhile, Mary Sue filed a separate case in West Virginia state court. She asked that court to assume jurisdiction over the trust, and she sought (among other things) a temporary restraining order and an injunction to prevent dissolution of the trust. Trustees removed the case to the federal district court in West Virginia. After a hearing, the federal court dismissed the West Virginia action in November 2013, concluding that “jurisdiction over the trust is properly in Colorado.” Mary Sue apрealed this decision to the Fourth Circuit but then voluntarily dismissed her appeal. The record does not reveal whether trustees sought an attorney fees award from the federal courts in the West Virginia action. On appeal, Bruce asserts that trustees did not apply for fees in the federal courts; trustees have not disputed his assertion.
¶ 10 Back in Colorado, the district court accepted a final accounting of the trust filed by trustees, ordered all assets remaining in the trust be distributed to the grandchildren in equal shares, and found that the trust could recover administrative costs and attorney fees incurred in litigating both the Colorado and West Virginia cases, pursuant to
¶ 11 Bruce represented Mary Sue in both the Colorado and West Virginia matters. The district court awarded attorney fees for the Colorado matter ($7325) in favor of the trust and against both Bruce and Mary Sue‘s local counsel, jointly and severally. The court assessed fees against Bruce for the West Virginia action ($54,565).
II. Analysis
¶ 12 Bruce appeals the district court‘s order only as it pertains to attorney fees awarded for the West Virginia action. He contends that
this exception. For these reasons, we vacate the order in part and remand for resolution of this question.
A. Relevant Law and Standard of Review
¶ 13 A court considering whether to award attorney fees must begin with the American Rule, “which precludes an award of attorney fees absent a specific contractual, statutory, or procedural rule providing otherwise.” City of Aurora ex rel. Util. Enter. v. Colo. State Eng‘r, 105 P.3d 595, 618 (Colo. 2005); see L & R Expl. Venture v. CCG, LLC, 2015 COA 49, ¶ 20 (stating that Colorado follows the American Rule requiring each party in a lawsuit to bear its own legal expenses).
¶ 14 But does
¶ 15 The primary goal of statutory interpretation is to ascertain and give effect to the General Assembly‘s intent. St. Vrain Valley Sch. Dist. RE-1J v. A.R.L., 2014 CO 33, ¶ 10. To determine this intent, we look first to the statute‘s plain language. Vigil v. Franklin, 103 P.3d 322, 327 (Colo. 2004). “[W]e must accept the General Assembly‘s choice of language and not add or imply words that simply are not there.” People v. Benavidez, 222 P.3d 391, 394 (Colo. App. 2009). We must also read the language in the context of the statute as a whole, giving consistent, harmonious, and sensible effect to all its parts. Jefferson Cty. Bd. of Equalization v. Gerganoff, 241 P.3d 932, 935 (Colo. 2010); see also Copeland v. MBNA Am. Bank, N.A., 907 P.2d 87, 90 (Colo. 1995) (“[A] statute should be
interpreted in a manner that gives effect to all its рrovisions and policy objectives, and not in a way that renders one or more of its parts or goals inoperative.“).
B. Application
1. District Court‘s Reasoning
¶ 16 In its “Order Regarding Attorney Fees,” the district court concluded that, unlike subsections (1) and (2) of
Nothing in this subsection [(4)], in contrast to
C.R.S. § 13-17-102(1) and(2) (requiring that an award must be “in any civil action of any nature commenced or appealed in any court of record in this state“), limits the term “an action” to an action in Colorado state court and thus it does not preclude, by its plain language, an award of attorney fees in a Colorado case that were incurred in an action in another jurisdiction,as long as that action affected the Colorado “proceeding.” In this case, the Court found that the West Virginia action was “a bad faith effort to delay and impede the [trustees‘] efforts to resolve the issues before this Court.” In other words, the Court finds that the West Virginia litigation — as a frivolous attack on this Court‘s jurisdiction — lacked substantial justification,
was interposed for delay, and unnecessarily expanded this proceeding and therefore falls within the term “an action” in
C.R.S. § 13-17-102(4) .3Although the Court can find no precedent for such an award, it determines, given its exclusive jurisdiction over the Trust, as well as its broad equitable powers in resolving issues regarding the Trust, and the fact that it has a complete record of the full scope of this litigation (unlike the federal district court, which limited its consideration to the issue of jurisdiction), that it is appropriate in this case for the Court to assess attorney fees incurred in the related West Virginia action.
¶ 17 The district court‘s conclusion, however, conflicts with Kraft. There, a division of this court considered an action filed in Colorado state court, removed to federal court, and remanded back to state
court. Kraft, 122 P.3d at 1021. On remand, the Colorado district court awarded defendants attorney fees for work performed at all stages of the litigation pursuant to
¶ 18 On appeal, the plаintiff contended that the trial court lacked authority to award attorney fees incurred solely in the federal court proceedings. Id. at 1022. The Kraft division agreed and held that
court has followed Kraft. See Kennedy v. King Soopers Inc., 148 P.3d 385, 389 (Colo. App. 2006) (“A state court may award attorney fees for work in federal court if the work produced during the federal proceedings is also used in the state court proceedings.“).
¶ 19 The plain language of
Subject to the limitations set forth elsewhere in this article, in any civil action of any nature commenced or appealed in any court of record in this state, the court shall award, by way of judgment or separate order, reasonable attorney fees against any attorney or party who has brought or defended a civil action, either in whole or in part, that the court determines lacked substantial justification.
¶ 20 Subsection (4), read in harmony with subsections (1) and (2), clarifies the process for invoking the court‘s authority to award fees and the conduct for which the court may exercise that authority:
The court shall assess attorney fees if, upon the motion of any party or the court itself, it finds that an attorney or party brought or defended an action, or any part thereof, that lacked substantial justification or that the action, or any part thereof, was interposed for delay or harassment or if it finds that an attorney or party unnecessarily expanded the proceeding by other improper conduct, including, but not limited to, abuses of discovery procedures available under the Colorado rules of civil procedure or a designation by a defending party under section 13-21-111.5(3) that lacked substantial justification. As used in this article, “lacked substantial justification” means substantially frivolous, substantially groundless, or substantially vexatious.
¶ 21 In other words, subsection (4) does not grant a court the authority to assess attorney fees that could not be awarded under subsections (1) and (2). Instead, subsections (1) and (2) provide general authority to award attorney fees for claims or defenses lacking substantial justification, while subsection (4) sрecifies the process and conduct for which a court may assess fees. In this
way, the subsections operate together to set the parameters and criteria for an attorney fees award. Cf. Upper Black Squirrel Creek Ground Water Mgmt. Dist. v. Cherokee Metro. Dist., 2015 CO 47, ¶ 22 (reading subsections (2) and (4) together to determine a court‘s authority to award attorney fees under
¶ 22 Simply put, if the limits of subsections (1) and (2) did not apply to subsection (4), those limits would lose any practical effect; a court could always award fees under subsection (4) without regard to those limits. We must eschew a statutory interpretation that robs the language of any impact. Seе People v. Terry, 791 P.2d 374, 376 (Colo. 1990) (“Courts should attempt to give effect to all
parts of a statute, and constructions that would render meaningless a part of the statute should be avoided.“).
¶ 23
¶ 24
or part thereof . . . , is determined to have been substantially frivolous, substantially groundless, or substаntially vexatious.”
¶ 25 Therefore, the district court‘s order rests on an erroneous interpretation of the law and clashes with Kraft and Kennedy.
¶ 26 Trustees, however, do not rely on the court‘s interpretatiоn. Instead, they advance a different view of
2. Trustees’ Arguments
a. Arguments Based on Section 13-17-102
¶ 27 Trustees acknowledge that the limits of subsections (1) and (2) apply to a court‘s authority to assess attorney fees under
subsection (4) of
¶ 28 By its terms, however,
superfluous[.]” Johnson, ¶ 18. To have meaning, subsections (1) and (2) must restrict a Colorado court‘s authority to awarding attorney fees incurred in response to unjustified conduct occurring “in any civil action of any nature commenced or appealed in any court of record in this state.”
¶ 29 Trustees also point to In re Marriage of Ward, 183 P.3d 707 (Colo. App. 2008). In that case, however, the division concluded that the trial court could award attorney fees under
¶ 30 Finally, trustees rely heavily on Leslie, decided by a division of this court. There, a district court in an estate matter cited
¶ 31 Instead, Leslie focused on whether a court may charge attorney fees against a petitioner‘s share of an estate when those fees were incurred in defense against the petitioner‘s frivolous litigation. See id. (recognizing
¶ 32 To the extent, however, that Leslie permits a Colorado court to award attorney fees incurred in another jurisdiction‘s case even where work product created for the other case was not used in Colorado, Leslie clashes with the plain language of
- Leslie contradicts the sound logic that “it is ordinarily ‘the court in which services were rendered that should determine the amount of attorney fees awardable.‘” Kraft, 122 P.3d at 1026 (quoting Lopez-Flores v. Hamburg Twp., 460 N.W.2d 268, 270 (Mich. Ct. App. 1990)).
- Leslie opens the door to an attorney fees award for conduct in a foreign action where the foreign court declined to — or could not — impose such sanctions. For instance, the record here does not show, and trustees do not assert, that they sought fees in West Virginia and complied with
Fed. R. Civ. P. 11(c)(2) when doing so. That rule contains a safe harbor provision requiring a
party to give notice that it intends to seek attorney fees as a sanction for a frivolous filing.
¶ 33 Consequently, to the extent Leslie conflicts with Kraft and our statutory analysis, we decline to follow Leslie. See City of
Steamboat Springs v. Johnson, 252 P.3d 1142, 1147 (Colo. App. 2010) (“We are not bound to follow a prior division‘s ruling.“).
b. Arguments Based on District Court‘s Equitable Authority
¶ 34 Trustees paid the attorney fees out of trust assets, on behalf of the trust. Trustees therefore maintain that the district court had authority to аward attorney fees to trustees in order to restore trust assets expended in response to Bruce‘s frivolous attacks:
If Mr. Bruce is permitted to run without consequence to foreign courts to bring frivolous challenges to the final decision of the Colorado probate court, Colorado courts will be effectively disabled from efficiently resolving a trust‘s final administration and protecting what remains of the trust‘s assets.
¶ 35 A court presiding over a probate matter certainly possesses equitable authority “to account for the unique circumstances of a particular proceeding and to ensure that parties are treated fairly and the decedent‘s will is upheld.” Beren v. Beren, 2015 CO 29, ¶ 18 (citing Leslie, 886 P.2d at 287). Even so, the general rule remains that a court may not award attorney
here relied, did not authorize the court to award attorney fees incurred solely in the West Virginia case unless the West Virginia work product was also used in this case. And, while trusteеs cite other statutes ostensibly authorizing a probate court to award attorney fees, those statutes do not mention attorney fees at all. See
¶ 36 Finally, trustees’ premise is flawed. In fact, a party may face consequences for going to a foreign court with frivolous litigation affecting Colorado trust assets: the estate may seek an attorney fees
award against that party from the foreign court, according to the statutes and rules of that jurisdiction.
3. Summary and Remand Directions
¶ 37
¶ 38 Neither the district court‘s order nor thе record clarifies, however, whether trustees used work product created for the West Virginia action in these Colorado proceedings.9 Accordingly, we vacate the portion of the order awarding $54,565 for attorney fees incurred in the West Virginia action, and we remand for the district court to determine whether trustees used work product created for the West Virginia action in these Colorado proceedings. See Kraft, 122 P.3d at 1026. The court may, but need not, hold a further
hearing. If trustees used work product created for the West Virginia action in this сase, the court shall award to trustees their attorney fees incurred for that work product. If not, the court shall not award any attorney fees incurred in the West Virginia action.
III. Conclusion
¶ 39 The district court‘s order, as it pertains to attorney fees incurred in the action before the West Virginia federal court, is vacated. The case is remanded for further proceedings consistent with this opinion.
JUDGE WEBB and JUDGE HAWTHORNE concur.