Bonnie C. FERRELL, Petitioner, v. GLENWOOD BROKERS, LTD., a Colorado Corporation, Respondent.
No. 92SC107
Supreme Court of Colorado, En Banc.
March 29, 1993.
848 P.2d 936
On June 18, 1992, the respondent pleaded guilty to one count of bribery, contrary to
II
The inquiry panel recommended that the respondent be disbarred for his misconduct, and the respondent has consented to disbarment. Under the American Bar Association‘s Standards for Imposing Lawyer Sanctions (1986 & Supp.1992) (ABA Standards), in the absence of aggravating or mitigating factors, disbarment is appropriate when:
(a) a lawyer engages in serious criminal conduct, a necessary element of which includes intentional interference with the administration of justice, false swearing, misrepresentation, fraud, extortion, misappropriation, or theft; or
(b) a lawyer engages in any other intentional conduct involving dishonesty, fraud, deceit, or misrepresentation that seriously adversely reflects on the lawyer‘s fitness to practice.
ABA Standards 5.11. Disbarment is also warranted when a lawyer “improperly communicates with someone in the legal system other than a witness, judge, or juror with the intent to influence or affect the outcome of [a legal] proceeding, and causes significant or potentially significant interference with the outcome of the legal proceeding.” Id. at 6.31(c).
The only factor in mitigation is that the respondent has no prior disciplinary record and this factor by itself is insufficient under the circumstances to call for a sanction less than disbarment. See People v. Brown, 841 P.2d 1066, 1067 (Colo.1992) (guilty plea to bankruptcy fraud warrants disbarment despite lack of prior disciplinary record); People v. Schwartz, 814 P.2d 793, 794 (Colo.1991) (convictions for bankruptcy fraud and conspiracy to commit bankruptcy fraud are convictions for serious crimes under
III
It is hereby ordered that Bradley Paul Viar be disbarred and that his name be stricken from the list of attorneys authorized to practice before this court, effective immediately upon the issuance of this opinion. It is further ordered that Viar be required to demonstrate prior to any application for readmission that he has paid the costs of this proceeding in the amount of $119.71 to the Supreme Court Grievance Committee, 600 Seventeenth Street, Suite 500-S, Dominion Plaza, Denver, Colorado 80202.
Robert M. Noone, Margaret O‘Donnell, Delaney & Balcomb, P.C., Glenwood Springs, for respondent.
Justice MULLARKEY delivered the Opinion of the Court.
In the Garfield County Court, respondent, Glenwood Brokers, Ltd. (Glenwood), brought an action against petitioner, Bonnie C. Ferrell (Ferrell), to recover a real estate brokerage commission of $3,900 due after Ferrell breached a real estate listing contract. The contract also provided for an award of reasonable attorney fees to the prevailing party in case of litigation or arbitration arising out of the contract. The county court entered judgment in favor of Glenwood, and, in addition to the $3,900 real estate commission, awarded attorney fees of $4,794 to Glenwood. Ferrell appealed to the district court, contending that the award of attorney fees brought the damages awarded to Glenwood above the then-existing $5,000 jurisdictional limit of the county court. The district court affirmed the county court and we granted certiorari. We affirm.1
I.
Glenwood, a Colorado corporation, is a real estate brokerage firm in Glenwood Springs, Colorado. Mark Kister is a shareholder and director of Glenwood, and a duly licensed real estate broker. Ferrell is a dentist who lives and practices in Denver.
In his capacity as a real estate broker, and as an agent of Glenwood, Kister entered into an Exclusive Right to Sell Listing Contract (Listing Contract) with Ferrell on August 12, 1989, for the purpose of selling her condominium unit in Glenwood Springs. Among other terms, the Listing Contract provided that a six percent commission would be earned upon Glenwood‘s procuring a ready, willing and able buyer, and that in the event of litigation over its enforcement, the prevailing party is entitled to attorney‘s fees.
Kister procured an offer to purchase the subject property from a ready, willing and able purchaser for the condominium. Subsequently, both the purchasers and Ferrell reneged on the deal, however, the commission had already been earned and was due and payable at the time of the scheduled closing, October 27, 1989.
Glenwood commenced an action in the Garfield County Court, seeking the commission, as well as interest, costs, and attorney fees. After a bench trial, the court entered judgment in Glenwood‘s favor for $3,900 with interest, and costs in the amount of $5,235.57, including $4,794 in attorney fees.1 Ferrell appealed the judgment to the district court, which affirmed the county court judgment. We granted certiorari, and now affirm the district court judgment.
II.
At the time this case was filed,
(1) The county court shall have concurrent jurisdiction with the district court in
civil actions, suits, and proceedings in which the debt, damage, or value of the personal property claimed does not exceed five thousand dollars....
Thus, the jurisdiction of the county courts of the state was limited to actions, suits, and proceedings in which the debt, damage, or value of the personal property claimed did not exceed five thousand dollars.
In Denver Brick Manufacturing Co. v. McAllister, 6 Colo. 326 (1882), this court construed a constitutional provision and a statute which were almost identical to the jurisdictional limit statute at issue here except for the amount of the limit. We held “that the amount specified as the statutory limitation of the jurisdiction in question must be taken to mean the amount due the plaintiff, or the value or amount of his claim, or the value of the property sought to be recovered at the time of bringing the action.” Id. at 329-30 (emphasis added). We reasoned that it “would be a most lame and impotent conclusion” to say that a court could be ousted of jurisdiction of a case which was within its jurisdiction when commenced, or a plaintiff could be forced either to remit part of the recovery or to seek another forum late in the proceedings. Id. at 328.
During that same December term of the court, we also decided Cramer v. McDowell, 6 Colo. 369 (1882). There, the plaintiff filed his action before a justice of the peace, who did not have jurisdiction of any case where the amount in controversy exceeded $300. At the time of filing, $300 principal and approximately $4 interest were due on the notes at issue. After trial, judgment was entered in the plaintiff‘s favor for $305.10. This court held that the judgment was void and no execution could issue. We reached this result because the subject matter amount exceeded the justice‘s jurisdiction when the action was filed, and the plaintiff did not make a timely offer to remit part of the judgment and bring the amount in controversy within the justice‘s jurisdiction. Id. at 371.
The element of recovery which made the judgment exceed the jurisdictional limit in Denver Brick was interest accumulating after the action was commenced on a note secured by a deed of trust. Here, it is attorney fees agreed to by contract. At the time the present action was commenced by filing a complaint on November 29, 1989, the record shows that Glenwood‘s attorney had performed 5.7 hours of billed work, worth $484.50, and only 33 days of interest, at $.85 per day, totalling $28.05 (this court‘s calculation), had accumulated by November 29, 1989, for a grand total of $4,412.55, well within the jurisdictional limit.4
Furthermore, we cannot agree with Ferrell‘s contention that, once its attorney fees had accumulated sufficiently so that the potential judgment exceeded $5,000, Glenwood should have transferred the action to the district court. Implementing such a rule would be a waste of judicial resources. Under that theory, cases properly filed in county court would be transferred to district court at any stage of the litigation, even on the eve of (or during) trial. Two, rather than one, courts would be required to process the same case before it was resolved. Such a rule also would encourage bad faith litigation and discourage settlement because fee-shifting contracts would be enforceable only to a very low limit. Furthermore, such contracts, which are clearly enforceable and serve to discourage non-meritorious contract disputes and to encourage settlement, would be ineffective to serve those purposes.
Because the debt, damage, or value of the personal property claimed by Glenwood, including pre-complaint interest and attorney fees, was within the jurisdictional limit of $5,000 when Glenwood filed its complaint, the county court had jurisdiction over the complaint. It was not ousted of its jurisdiction solely because, at the time judgment was entered, the amount of attorney fees and underlying debt sued upon exceeded $5,000.
III.
There also is a separate, independent ground for upholding the county court‘s judgment. Under the law applicable to this case, the county court properly found the attorney fees to be costs which may be awarded over and above the county court‘s $5,000 jurisdictional limit. Ferrell argues that attorney fees cannot be awarded here as “costs,” because
Perhaps the best answer is that attorney fees are neither costs nor damages, but a hybrid, partaking of each in varying degrees. Even when they are classified as costs, they are not treated as are ordinary costs, but as a separate item of monetary relief; even when they are treated as damages, they are often awarded and set by a court, even in a jury trial.
1 Mary Frances Derfner & Arthur D. Wolf, Court Awarded Attorney Fees ¶ 1.02 at 1-9 (1992).
A realization that attorney fees are a hybrid of costs and damages is important, because in cases where recovery of attorney fees is authorized, either by statute, court rule, contract, or common law, a classification of such an award either as “costs” or “damages” can determine the outcome. For example, if attorney fees are “damages,” then the merits of a lawsuit are not appealable until the amount of fees has been set. Court Awarded Attorney Fees ¶ 1.01 at 1-5; Baldwin v. Bright Mortgage Co., 757 P.2d 1072 (Colo.1988). If they are considered to be damages, attorney fees must be determined by the trier of fact and proven during the damages phase, and can be multiplied under statutes that permit doubling and trebling of damages. Post-judgment interest is awardable on attorney fees treated as damages. Court Awarded Attorney Fees ¶ 1.01 at 1-5 to 1-8.
On the other hand, if attorney fees are classified as “costs,” then an appeal on the merits can proceed independent of the fees issue. Baldwin, 757 P.2d at 1074. Costs can be taxed by the clerk after being determined by a judge without being specifically pleaded, with issues of entitlement and amount not reached until after the merits are decided. Roa v. Miller, 784 P.2d 826, 829 (Colo.App.1989) (“[I]f the award [of attorney fees] is dependent upon the achievement of a successful result in the litigation in which they are to be awarded and the fees are for services rendered in connection with that litigation, a determination of the propriety of an award of fees need not be made until that litigation is completed and the result is known.“). Finally, costs are not subject to double and treble damages. Court Awarded Attorney Fees ¶ 1.01 at 1-7.
Instead of trying to anticipate all possible fact situations and classify attorney fees either as costs or damages in particular cases, we conclude that such a determination is, by its very nature, a fact- and context-sensitive one, which rests within the sound discretion of the trial court. Such discretion should be guided by the nature of the requested attorney fees. If attorney fees are part of the substance of a lawsuit, that is, if the fees being sought are “the legitimate consequences of the tort or breach of contract sued upon,” Bunnett, 793 P.2d at 160, such as in an insurance bad faith case, then such fees are clearly damages. If, on the other hand, attorney fees are, as here, simply the consequence of a contractual agreement to shift fees to a prevailing party, then they should be treated as “costs,” at least where the fee-shifting contract provision is not
Ferrell also argues that, unlike statutorily and rule-authorized attorney fees, contractually authorized fees necessarily arise out of a contract, the existence and validity of which must be proven at trial, and therefore make up a part of the “debt, damage, or value of the personal property claimed.” For this reason, Ferrell argues, Glenwood confuses the procedure for awarding attorney fees with the substantive demand and proof of the right to recover those fees.
This argument, however, is groundless in light of the facts of this case. There was no contention that the contract between Glenwood and Ferrell did not exist or was invalid. The only question was the application of the contract to the facts, that is, whether Glenwood had produced a ready, willing, and able buyer. Moreover, it would appear that in the vast majority of cases, the only question about attorney fees would be whether the amount claimed was “reasonable,” which was not in question here. While, in some other case, the question of whether contractually authorized attorney fees should be considered actual damages because they are more directly at issue might be properly before the court, such is not the case here.
Because there is no specific prohibition against awarding contractually authorized attorney fees as “costs,” and the attorney fees awarded were not clearly “damages,” the county court was within its discretion in awarding the attorney fees as “costs.”
IV.
The jurisdiction of the county court is determined at the time the lawsuit is commenced, and the fact that interest or attorney fees continue to accrue does not oust that court of its jurisdiction. The county court, alternatively, was within its discretion in awarding the contractually authorized attorney fees as “costs.” The judgment of the district court is affirmed.
LOHR, J., specially concurs, and KIRSHBAUM, J., joins in the special concurrence.
Justice LOHR specially concurring:
I concur in the judgment of the court and in parts I and II of the majority opinion. In order to decide this case, it is unnecessary to address the “separate, independent ground for upholding the county court‘s judgment” discussed in part III of the majority opinion. See maj. op. at 940. For this reason, and because I do not find all that is said in part III persuasive, I do not join in that section of the majority opinion.
KIRSHBAUM, J., joins in this special concurrence.
Justice MULLARKEY
CENTRIC-JONES COMPANY, a Colorado limited partnership; Nucon Construction Corp., a Colorado corporation; and J.A. Jones Construction Company, Petitioners, v. Judge Lynne M. HUFNAGEL, District Court Judge, and The Denver District Court, Respondents.
No. 92SA407.
Supreme Court of Colorado, En Banc.
March 29, 1993.