Harrison v. Barclay

SUMMARY

September 5, 2024

2024COA100

Nos. 23CA0659 & 23CA0191, Azar v. Ngo — Attorneys and

Clients — Rules of Professional Conduct — Restrictions on

Right to Practice — Restriction on Right to Practice after

Termination

A division of the court of appeals concludes, for the first time

in a Colorado appellate decision, that an employment agreement

provision prohibiting an attorney at a law firm, while still employed

by the firm, from soliciting fellow employees to leave the law firm is

not an agreement that “restricts the right of a lawyer . . . to practice

after termination of the relationship,” as prohibited by Colorado

Rule of Professional Conduct 5.6(a).

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.

COLORADO COURT OF APPEALS 2024COA100

Court of Appeals Nos. 23CA0659 & 23CA0191

City and County of Denver District Court No. 20CV30785

Honorable David H. Goldberg, Judge

Franklin D. Azar & Associates P.C., a Colorado corporation,

Plaintiff-Appellee,

v.

Ivy Ngo,

Defendant-Appellant,

v.

Franklin D. Azar,

Third-Party Defendant-Appellee.

JUDGMENT AND ORDERS AFFIRMED

AND CASE REMANDED WITH DIRECTIONS

Division VII

Opinion by JUDGE TOW

Gomez and Kuhn, JJ., concur

Announced September 5, 2024

Sherman & Howard L.L.C., Tamir Goldstein, Denver, Colorado, for Plaintiff-

Appellee and Third-Party Defendant-Appellee

Azizpour Donnelly, LLC, Katayoun A. Donnelly, Denver, Colorado, for

Defendant-Appellant

1

¶ 1 Defendant, Ivy Ngo, appeals the judgment entered against her

and in favor of plaintiff, Franklin D. Azar & Associates P.C. (the

Azar firm) and counterclaim defendant, Franklin D. Azar (Azar).

1

This appeal requires us to consider, for the first time in a Colorado

appellate decision, whether an employment agreement provision

prohibiting an attorney at a law firm from soliciting fellow

employees to leave the law firm is an agreement that “restricts the

right of a lawyer . . . to practice after termination of the

relationship,” as prohibited by Colorado Rule of Professional

Conduct 5.6(a). We conclude that, to the extent it prohibited such

solicitation during Ngo’s employment, the agreement did not violate

Rule 5.6(a) and thus was enforceable. We therefore affirm the

judgment.

1

As will be discussed more thoroughly below, Azar was not a

plaintiff in the initial action. When pleading her counterclaims

against the Azar firm, Ngo also brought claims against Azar

individually. Although more correctly considered a third-party

defendant, because the parties and the trial court referred to Azar

throughout the proceedings as an additional counterclaim

defendant, we do so as well.

2

¶ 2 Ngo also appeals the post-trial orders granting the Azar firm

attorney fees and costs. We affirm the orders and remand the case

for further proceedings.

I. Background

¶ 3 Ngo was the head of the class action department at the Azar

firm. When she was hired, Ngo signed an agreement entitled

“Confidentiality, Non-Disclosure, and Non-Solicitation Agreement”

(the Confidentiality Agreement). The Confidentiality Agreement

contained three restrictive provisions: an agreement not to disclose

or use proprietary information (the nondisclosure provision), an

agreement not to solicit or induce the firm’s employees to leave the

firm (the employee nonsolicitation provision), and an agreement not

to solicit clients of the firm (the client nonsolicitation provision).

Ngo also signed an “Employment Agreement,” which contained a

noncompete covenant and provided that she would abide by the

Confidentiality Agreement.

¶ 4 After working at the Azar firm for approximately two years,

Ngo began making plans to leave and hoped to make the move with

the rest of the class action department. To that end, she emailed a

slide deck presentation to other law firms designed to convince the

3

firms to take her department on as a Denver office. When the Azar

firm learned of her actions, it fired her. Four months later, Ngo

began working at a new law firm.

¶ 5 The Azar firm sued Ngo for breach of contract and breach of

fiduciary duty. Ngo initially moved to dismiss for failure to state a

claim. While that motion was pending, discovery proceeded,

through which the Azar firm discovered the identity of certain law

firms to which it believed Ngo had sent her slide deck proposal. The

Azar firm, through counsel, sent letters to those firms informing

them of the lawsuit and that Ngo appeared to have disclosed

confidential information to them.

¶ 6 After the court denied her motion to dismiss, Ngo answered

the complaint and asserted counterclaims against both the Azar

firm and Azar individually including, as relevant here, (1) a

defamation claim based on the letters the Azar firm sent to the

firms as well as statements Azar and the Azar firm made to clients,

Ngo’s former colleagues, and Ngo’s potential future employers; and

(2) a declaratory judgment claim. The latter claim sought a

declaration that the nondisclosure and client nonsolicitation

provisions were unenforceable because they violated Rule 5.6(a) of

4

the Colorado Rules of Professional Conduct — which prohibits

agreements that restrict an attorney’s practice of law after leaving

employment.

2

¶ 7 Ngo filed a partial motion for summary judgment on the Azar

firm’s breach of contract and breach of fiduciary duty claims, as

well as her declaratory judgment counterclaim. The trial court

partially granted the motion as to the declaratory judgment

counterclaim, concluding that the client nonsolicitation provision

violated Rule 5.6(a) and was thus unenforceable. The court also

concluded that the nondisclosure provision did not cover Ngo’s

“mental impressions, thoughts, methodologies, philosophies, and

strategies developed during her work as an attorney for any client

she worked with before or after her departure” from the Azar firm.

The court denied Ngo’s request for declaratory judgment in all other

respects. The court also dismissed the breach of fiduciary duty

claim as barred by the economic loss rule.

3

The court denied Ngo’s

request for summary judgment on the breach of contract claim.

2

Notably, Ngo’s declaratory judgment claim did not explicitly

address the employee nonsolicitation provision.

3

The Azar firm does not cross-appeal this dismissal.

5

¶ 8 Azar and the Azar firm also filed a motion for summary

judgment seeking, as relevant here, judgment against Ngo on her

defamation counterclaim. The trial court denied the motion,

concluding that disputed issues of fact precluded summary

judgment on whether the litigation privilege or substantial truth

defenses applied.

¶ 9 The Azar firm’s breach of contract claim and Ngo’s defamation

claim were tried to a jury. Following the presentation of evidence,

both parties moved for a directed verdict. The trial court

determined that the letters the Azar firm had sent to the law firms

could not give rise to a defamation claim because they were

protected by the litigation privilege. It accordingly modified the jury

instructions to state that the letters did not constitute defamatory

statements but otherwise allowed the defamation claim to go to the

jury. The trial court also denied the directed verdict as to the

breach of contract claim, noting that it had previously concluded

that the employee nonsolicitation provision did not violate Rule 5.6.

¶ 10 As to the Azar firm’s breach of contract claim, the jury was

provided a general verdict form asking whether Ngo had breached

the Employment Agreement and whether she had breached the

6

Confidentiality Agreement. The jury was then told that if the

answer to either of these two questions was yes, it should determine

whether the Azar firm “ha[d] damages as a result of Ngo’s breach of

contract.” Neither the breach portion nor the damages portion

requested the jury to allocate specific damages to specific alleged

breaches, such as to a violation of the nondisclosure provision as

opposed to the employee nonsolicitation provision. The jury found

that Ngo had breached both agreements and awarded Azar $4,000

in damages. The jury also returned a verdict in favor of Azar and

the Azar firm on the defamation counterclaim.

¶ 11 Pursuant to fee-shifting provisions in the agreements, the Azar

firm requested $1,907,546.50 in attorney fees and $138,380.33 in

costs. Ngo opposed the request, arguing that in light of the modest

verdict, the Azar firm should not be considered the prevailing party

and that, in any event, the amount requested was unreasonable.

The trial court issued two orders, awarding the Azar firm

$1,072,991.00 in attorney fees and $106,660.70 in costs.

II. Ngo’s Challenges to the Judgment

¶ 12 Ngo appeals the judgment, contending that the trial court

erred by (1) concluding that the employee nonsolicitation provision

7

did not violate Rule 5.6; (2) refusing to instruct the jury on the

employee preparation privilege on the breach of contract claim; and

(3) applying the litigation privilege to the letters the Azar firm sent

to the law firms and accordingly modifying the jury instructions on

the defamation claim. We discern no error.

A. Employee Nonsolicitation Provision

¶ 13 Ngo contends that the trial court erred by allowing the part of

the breach of contract claim premised on her solicitation of

employees to go to the jury. She argues that, as a matter of law,

the employee nonsolicitation provision in the Confidentiality

Agreement was unenforceable because it violated Rule 5.6(a).

1. Standard of Review and Applicable Law

¶ 14 We review de novo interpretations of the Colorado Rules of

Professional Conduct. Johnson Fam. L., P.C. v. Bursek, 2024 CO 1,

¶ 8. “Our interpretation of a rule is informed by the comments to

that rule.” Id.

¶ 15 Rule 5.6(a) provides that “[a] lawyer shall not participate in

offering or making . . . a partnership, shareholders, operating,

employment, or other similar type of agreement that restricts the

right of a lawyer or LLP to practice after termination of the

8

relationship, except an agreement concerning benefits upon

retirement.” The language of Rule 5.6(a) plainly forbids any

agreement that would entirely prohibit a lawyer from practicing law

after departure from a firm. Johnson, ¶ 10.

¶ 16 Despite Rule 5.6(a)’s wording in terms of the lawyer’s right to

practice, the rule has “twin policy goals . . . : to protect lawyers’

professional autonomy and to ensure that clients have the freedom

to choose an attorney.” Id. at ¶ 14; see also Colo. RPC 5.6 cmt. 1

(noting that an agreement entirely prohibiting a lawyer from

practicing law “not only limits [an attorney’s] professional

autonomy, but also limits the freedom of clients to choose a

lawyer”). Recently, the Colorado Supreme Court agreed with other

courts that Rule 5.6(a) is “designed primarily to protect client

choice.” Johnson, ¶ 17.

2. The Effect of the General Verdict

¶ 17 Given that the evidence would amply support a determination

that Ngo breached the nondisclosure provision, we asked the

parties to provide supplemental briefs on the impact of the general

verdict on any ultimate harmlessness analysis. After all, if any

error in permitting the jury to consider the employee nonsolicitation

9

provision was ultimately harmless, we would not need to reach the

merits of the dispute at all.

¶ 18 Many years ago, the Colorado Supreme Court held that, when

a civil claim is submitted to a jury on two grounds for relief, one of

which is legally valid and the other not, “it is impossible to

determine from the general verdict returned, upon which theory the

jury found for [the] plaintiff. In such circumstances prejudice to

[the] defendant must be presumed.” Mosher v. Schumm, 166 P.2d

559, 561 (Colo. 1946). We find no intervening case law that calls

this venerable proposition into question. Accordingly, we must

determine whether the trial court erred by submitting to the jury

the question of whether Ngo breached the employee nonsolicitation

provision.

3. Analysis

¶ 19 We begin by noting the narrowness of the issue before us. All

of the evidence involving Ngo soliciting fellow employees focused on

her conduct before she left the Azar firm. Accordingly, we assume

without deciding that the employee nonsolicitation provision would

run afoul of Rule 5.6(a) to the extent that it prohibited Ngo from

soliciting employees after her departure from the firm. The question

10

before us, however, is limited to whether Rule 5.6(a) prohibited the

Azar firm from offering, and Ngo from accepting, a contractual

provision requiring Ngo to refrain from soliciting her fellow

employees while she was still employed by the firm.

4

We conclude

that it did not.

¶ 20 Under common law, “an employee breaches his duty of loyalty

if prior to the termination of his own employment, he solicits his

co-employees to join him in his new competing enterprise.” Jet

Courier Serv., Inc. v. Mulei, 771 P.2d 486, 494 (Colo. 1989). Though

no Colorado appellate decision has addressed whether this common

law duty of loyalty applies in the law firm context, decisions from

other states’ courts have. See, e.g., Dowd & Dowd, Ltd. v. Gleason,

816 N.E.2d 754, 765, 770-72 (Ill. App. Ct. 2004) (affirming multi-

million-dollar judgment against attorneys whose breaches of the

4

To the extent there is an argument that the employee

nonsolicitation provision was overly broad because it, by its terms,

also prohibited Ngo from soliciting employees of the Azar firm after

she left, Ngo does not argue that the trial court erroneously

judicially modified — or “blue penciled” — the agreement. Because

Ngo does not raise the issue of the scope of the trial court’s

authority to sever unenforceable provisions from enforceable ones,

we do not address it. See Johnson Fam. L., P.C. v. Bursek, 2024 CO

1, ¶ 24.

11

duty of loyalty included, while still at the firm, orchestrating a mass

exodus of attorneys from the firm at the same time the defendant

attorneys left); Gibbs v. Breed, Abbott & Morgan, 710 N.Y.S.2d 578,

583 (App. Div. 2000) (holding that partners soliciting co-employees

before leaving the firm breached the duty of loyalty owed by

partners to each other).

¶ 21 If Ngo had a common law duty to refrain from soliciting

co-employees before her departure from the firm, it makes little

sense to suggest that she could not essentially reiterate that duty

by making a contractual promise to the same effect — unless, that

is, doing so would act as a restriction on her or another lawyer’s

“right to practice” after her employment with the Azar firm

terminated. Ngo says that the predeparture employee

nonsolicitation provision in the Confidentiality Agreement acts as

such a restriction because it impermissibly restricts her right to

form, and practice in, teams of her and her clients’ choice after

termination. We are not persuaded.

¶ 22 As noted, the Rule 5.6(a) inquiry focuses on both client choice

and attorney autonomy. Ngo’s contention focuses on the latter, but

we will address both.

12

¶ 23 As applied to predeparture conduct, the employee

nonsolicitation provision did not significantly impact Ngo’s ability to

practice after her employment with the firm ended. First, the

provision only prohibited her from soliciting or inducing her fellow

employees to leave the Azar firm. Nothing in the provision

prevented Ngo’s fellow employees, upon learning of her impending

departure, from expressing their own interest in joining her. And,

again assuming that the employee nonsolicitation provision would

not be enforceable under Rule 5.6(a) after she left her employment,

Ngo would be free to recruit her former coworkers to join her at her

new firm, allowing her to build the team she sought.

¶ 24 Nor does a predeparture employee nonsolicitation provision

significantly implicate client choice. Any client who wished for Ngo

to be their attorney could have chosen to retain her regardless of

which attorneys (or paralegals or support staff) elected to

accompany her departure from the firm. And any client who

desired to retain one of the other attorneys could certainly have

chosen to retain whichever firm that attorney worked for. To the

extent a client might have wanted to insist that one of Ngo’s former

Azar firm colleagues join Ngo and represent the client as a team,

13

that simply exceeds the reach of the client’s choice. Even at the

zenith of its protection, client choice does not empower a client to

demand that a particular firm hire a particular lawyer or,

conversely, that a particular lawyer agree to work for a particular

firm; nor, for that matter, can either Ngo or any former colleague

force such a scenario into existence in the name of lawyer

autonomy. See Howard v. Babcock, 863 P.2d 150, 158-59 (Cal.

1993) (recognizing the practical limitations on the “theoretical

freedom” of each lawyer to choose whom to represent and of each

client to select their attorney of choice, as well as the fact that an

attorney “has no right to enter into employment or partnership in

any particular firm”).

¶ 25 Further, this provision did not prohibit other attorneys from

continuing to represent a particular client; rather, it prohibited

Ngo’s solicitation or inducement of such an attorney (before Ngo left

her employment) to leave the Azar firm with her. If an attorney

chose to leave the firm on their own, or the client solicited them to

do so, nothing in the agreement prohibited that attorney from

continuing to represent the client along with Ngo.

14

¶ 26 We are not persuaded otherwise by the cases on which Ngo

relies. Those cases involve employment agreements with some type

of financial disincentive provision for a departing attorney taking

clients or employees of the firm with them. See Johnson, ¶ 15

(concluding that a fee imposed on a per client basis, based not on

specific spending for a client and without any individualized

assessment, violates Rule 5.6(a)); Law Offs. of Ronald J. Palagi, P.C.,

LLO v. Howard, 747 N.W.2d 1, 26 (Neb. 2008) (concluding that a

provision providing that if a listed client of the firm chose to have

the terminated lawyer represent them, then all attorney fees would

be paid to the firm — not the lawyer — was unenforceable because

it provided a strong financial disincentive for the lawyer to perform

services for a former client and therefore restricted the client’s right

to retain the lawyer); Jacob v. Norris, McLaughlin & Marcus, 607

A.2d 142, 153-54 (N.J. 1992) (invalidating under New Jersey’s

version of Rule 5.6(a) a provision requiring forfeiture by a departing

law firm partner of otherwise payable termination compensation if

the departing partner solicits other professional or paraprofessional

employees of the firm to engage in the practice of law with the

departing partner). The agreements at issue in these cases are

15

materially different from the Confidentiality Agreement and

Employment Agreement, neither of which contains a financial

disincentive provision.

¶ 27 To the extent Ngo contends that the attorney fees provision is

a financial disincentive provision, we disagree. It is not an

automatically applicable financial penalty tied to clients who follow

her or coworkers who opt to join her at her new firm. Rather, it is a

fee-shifting provision that comes into play only after she is found to

have breached her enforceable promises. As such, it is not akin to

the financial disincentive provisions present in the authorities on

which she relies.

¶ 28 In sum, before Ngo left the Azar firm, the employee

nonsolicitation provision was at most a de minimis restriction on

her autonomy and did not impair client choice. Accordingly, the

trial court did not err by concluding that, as applied to her

predeparture conduct, the employee nonsolicitation provision did

not violate Rule 5.6.

16

B. Jury Instruction on Employee Preparation Privilege

¶ 29 Ngo next contends that the trial court erred by refusing to

instruct the jury on the employee preparation privilege. We

disagree.

1. Additional Background

¶ 30 Ngo tendered a jury instruction stating that Colorado law

permits employees to make arrangements to compete with their

employers prior to separation from employment. The trial court

declined to give the jury this instruction.

2. Standard of Review

¶ 31 We review de novo whether the jury instructions correctly

stated the law. Bedor v. Johnson, 2013 CO 4, ¶ 8. “If they did, we

review the trial court’s decision to give or reject a particular jury

instruction for an abuse of discretion.” Danko v. Conyers, 2018

COA 14, ¶ 54.

3. Analysis

¶ 32 Ngo relies on Jet Courier for the proposition that the law

permits her to prepare to compete against her employer before she

leaves that employment. The Azar firm counters that the exception

at issue in Jet Courier protects an employee from liability in tort,

17

see 771 P.2d at 497, but that such a privilege is inapplicable to its

breach of contract claim. We agree with the Azar firm.

¶ 33 The employee preparation exception in Jet Courier applied to a

breach of fiduciary duty claim, not a breach of contact claim. Id. at

491, 493-95, 497. As noted, though the Azar firm initially pleaded

a breach of fiduciary duty claim, the trial court granted Ngo’s

request to dismiss that claim. Ngo has not cited any Colorado

authority, nor are we aware of any, that applies the employee

preparation privilege to a breach of a contractual employee

nonsolicitation provision. Other jurisdictions have recognized that

a party can bargain away their ability to prepare to compete by

agreeing to restrictive covenants in an employment agreement. See,

e.g., Williams v. Dominion Tech. Partners, L.L.C., 576 S.E.2d 752,

757 (Va. 2003) (“[I]n the absence of a contract restriction regarding

this duty of loyalty [specifically, the duty to not compete with one’s

employer — including by recruiting co-employees — while still

employed], an employee has the right to make arrangements during

his employment to compete with his employer after resigning his

post.”) (emphasis added). Thus, the trial court did not err by

18

declining to instruct the jury using Ngo’s tendered employee

preparation instruction on the breach of contract claim.

C. Litigation Privilege

¶ 34 Finally, Ngo contends that the trial court erred by applying the

litigation privilege to the letters the Azar firm sent to the law firms

and by instructing the jury that these letters did not constitute

defamatory statements. We disagree with both contentions.

1. Additional Background

¶ 35 As noted, after terminating Ngo and filing its complaint, the

Azar firm learned through discovery that Ngo had sent the slide

deck presentation to several law firms. Based on this information,

the Azar firm sent letters to law firms that it believed received the

presentation from Ngo. Relevant to this appeal, the Azar firm sent a

letter to Squire Patton Boggs and to Boies Schiller Flexner.

5

¶ 36 Both letters stated in relevant part that

[i]t is [the Azar firm]’s understanding that Ms.

Ngo contacted you regarding possibly joining

your firm, and that as part of this process, she

provided you with information regarding [the

5

Ngo only challenges the letters sent to Squire Patton Boggs and

Boies Schiller Flexner because they were the only law firms that did

not relay information back to the Azar firm in response to receiving

the letters.

19

Azar firm]’s class action clients and cases. We

have learned that some information

disseminated by Ms. Ngo contained

confidential client information including

settlement amounts and details. We have also

learned that Ms. Ngo disclosed certain

information regarding clients and cases that

Ms. Ngo may have represented comprised her

“book of business,” but included matters

developed by [the Azar firm] though not yet

filed, which she was not authorized to do.

To ensure that there are no

misunderstandings or inadvertent disclosures

of the information and data provided to your

firm or its attorneys by Ms. Ngo, please return

any and all documents you received from Ms.

Ngo, including documents that do not appear

to contain client information, as such a

determination must be made by [the Azar

firm].

¶ 37 The Azar firm sent the letter to Squire Patton Boggs after

discovering a text message sent by an Azar firm employee (who was

privy to Ngo’s plan to leave the firm and take the class action

department with her) to another employee: “But yeah fingers

crossed SPB or a big plaintiffs’ firm comes through just in case.”

The employee testified that he wanted to keep working in the Azar

firm’s class action department and felt he was in a position of trust

with the Azar firm to advocate for the department if Azar was

20

considering shutting it down,

6

but he would be open to other

possibilities “if something else came along like a big plaintiffs’ firm

or SPB, Squire Patton Boggs, you know as a backup.”

¶ 38 The Azar firm sent the letter to Boies Schiller Flexner after

learning that lawyers from that firm had also recently joined Ngo’s

new firm.

2. Standard of Review and Applicable Law

¶ 39 The litigation privilege is an absolute privilege that permits an

attorney to “publish defamatory matter concerning another in

communications preliminary to a proposed judicial proceeding, or

in the institution of, or during the course and as a part of, a judicial

proceeding in which [the attorney] participates as counsel, if it has

some relation to the proceeding.” Killmer, Lane & Newman, LLP v.

BKP, Inc., 2023 CO 47, ¶ 21 (quoting Restatement (Second) of Torts

§ 586 (Am. L. Inst. 1977)).

¶ 40 Relevant here, a statement must satisfy two conditions for the

privilege to apply: (1) the statement must have some relation to the

6

Ngo allegedly told her fellow employees that Azar was going to

shutter the class action department because it was not profitable;

Azar denied any such plans.

21

subject matter of the litigation, and (2) the statement must be made

in furtherance of the objective of the litigation. Id. at ¶ 24.

¶ 41 We review de novo whether the litigation privilege applies. Id.

at ¶ 18. In doing so, we resolve all doubts about whether a

statement is privileged “in favor of [the statement’s] relevancy or

pertinency.” Id. at ¶ 25 (citation omitted).

3. Analysis

¶ 42 Ngo contends that the trial court erred by instructing the jury

that the letters could not establish the claim for defamation

because Squire Patton Boggs and Boies Schiller Flexner were

neither “involved in nor closely connected with the litigation.”

¶ 43 Initially, we note that whether “the recipient must be involved

in and closely connected with the proceeding” is no longer a

prerequisite for the absolute litigation privilege to apply. See id. at

¶ 22. Although, in a decades-old case, a division of this court had

included such a requirement, see Club Valencia Homeowners Ass’n

v. Valencia Assocs., 712 P.2d 1024, 1027 (Colo. App. 1985), the

Colorado Supreme Court recently said otherwise. Acknowledging

that it had not yet spoken on the litigation privilege, the supreme

court applied the articulation of the privilege set forth in section

22

586 of the Restatement (Second) of Torts, which does not include

any requirement that “the recipient must be involved in and closely

connected with the proceeding” for the litigation privilege to apply.

See Killmer, Lane & Newman, ¶ 20.

¶ 44 We turn, then, to whether the letters satisfied the two

conditions announced in Killmer, Lane & Newman.

¶ 45 First, the letters had some relation to the subject matter of the

litigation. The complaint alleged that Ngo conspired to improperly

transfer the Azar firm’s class action department to another law firm

and that she had met with several other law firms and attempted to

convince them to hire her, undertake representation of the Azar

firm’s clients, and absorb the Azar firm’s entire class action

department. The complaint also alleged that Ngo developed a

presentation in which she divulged proprietary and confidential

information in an attempt to move the class action practice to a

competing firm.

¶ 46 Though the complaint does not mention Squire Patton Boggs

or Boies Schiller Flexner (or any other law firm) by name, the letters

sent to Squire Patton Boggs and Boies Schiller Flexner articulated

the Azar firm’s understanding that Ngo had contacted them about

23

possibly joining their firms and that she had provided them with

information about the Azar firm’s class action clients and cases,

including confidential information. The letters also stated that Ngo

had disseminated confidential settlement amounts and details and

had represented that clients and cases compromised her “book of

business” but included matters not yet filed.

¶ 47 The letters to Squire Patton Boggs and Boies Schiller Flexner

clearly had “some relation to the subject matter” of the lawsuit —

even though the statements therein went beyond the allegations of

the complaint. See Coomer v. Donald J. Trump for President, Inc.,

2024 COA 35, ¶ 190 (concluding that the statements at a press

conference had “some relation to the subject matter” of the lawsuit

even though the statements went well beyond the allegations in the

complaint (quoting Killmer, Lane & Newman, ¶ 40)).

¶ 48 Second, the letters were made in furtherance of the objective of

the litigation. The Azar firm reasonably believed, based on text

messages and the fact that former Boies Schiller Flexner lawyers

had joined Ngo at her new firm, that Ngo had sent the presentation

to both firms. It was thus advancing its existing litigation objective

by trying to preserve any evidence that Ngo breached the

24

Confidentiality Agreement and the Employment Agreement by

disseminating the Azar firm’s confidential and proprietary

information to other law firms.

¶ 49 Therefore, the trial court did not err by concluding that the

litigation privilege applied and by modifying the jury instruction

accordingly.

III. Ngo’s Challenge to the Attorney Fees and Costs Orders

¶ 50 Ngo also appeals the attorney fees order and costs order. She

contends that the fee-shifting provisions in the Confidentiality

Agreement and Employment Agreement are an unreasonable

financial disincentive that violates Rule 5.6 by impermissibly

restricting clients’ right to choose their attorney as well as the

attorney’s right to practice law. The Azar firm contends that Ngo

did not preserve this contention as a challenge to the attorney fee

award. We agree with the Azar firm.

¶ 51 Generally, to preserve an issue for appeal, the issue must be

brought to the trial court’s attention and the court must be given

the opportunity to rule on it. Berra v. Springer & Steinberg, P.C.,

251 P.3d 567, 570 (Colo. App. 2010). “A party’s mere opposition to

its adversary’s request . . . does not preserve all potential avenues

25

for relief on appeal.” Valentine v. Mountain States Mut. Cas. Co.,

252 P.3d 1182, 1188 n.4 (Colo. App. 2011). We “review only the

specific arguments a party pursued before the district court.” Id.

¶ 52 When opposing the Azar firm’s request for attorney fees and

costs, Ngo did not argue that the fee-shifting provisions in the

Confidentiality Agreement and Employment Agreement violated

Rule 5.6. She only argued that the Azar firm should not be

considered the prevailing party and that the amount requested was

unreasonable.

7

¶ 53 Ngo contends that she preserved this argument in her

summary judgment motion, and since it was a pure question of law,

she did not need to re-raise it once the trial court found that “the

agreements in this case do not contain a financial disincentive

provision.” Ngo cites no Colorado case to support this contention.

Indeed, the supreme court has held that a denial of a motion for

summary judgment, whether based on a question of law or the

existence of disputed issues of material fact, is not appealable after

a trial. Feiger, Collison & Killmer v. Jones, 926 P.2d 1244, 1250

7

Ngo does not advance either of these arguments on appeal.

26

(Colo. 1996); see also Credit Serv. Co. v. Skivington, 2020 COA 60M,

¶ 8; Tisch v. Tisch, 2019 COA 41, ¶ 48 (“[T]o preserve an issue

raised in a denied motion for summary judgment, a party must

raise the issue in a motion for a directed verdict or judgment

notwithstanding the verdict during trial.”).

¶ 54 More importantly, Ngo does not cite any Colorado authority for

her proposition that making an argument in a motion for summary

judgment preserves the issue in an appeal of an attorney fees order

or a costs order. Even if she did, Ngo’s argument in the summary

judgment motion was that the fee-shifting provisions in the

Confidentiality Agreement and Employment Agreement “impose[d]

an unreasonable penalty on Ms. Ngo for representing a client.”

(Emphasis added.) The court agreed with Ngo that the client

nonsolicitation provision was unenforceable as a matter of law and

partially granted summary judgment on her declaratory judgment

counterclaim. Ngo did not argue that the fee-shifting provisions

were unenforceable for any other reason. Thus, even if she could

have preserved her argument in her motion for summary judgment,

she failed to do so.

27

¶ 55 To the extent Ngo suggests that her expert report and

response to the Azar firm’s motion to exclude her expert report

preserved this issue, we disagree. In neither the report nor the

response did Ngo argue that the trial court should decline to award

attorney fees and costs to the Azar firm because the fee-shifting

provisions in the Confidentiality Agreement and Employment

Agreement were unenforceable under Rule 5.6(a).

¶ 56 In sum, we conclude that Ngo failed to preserve this

contention, and we decline to address it. See Banning v. Prester,

2012 COA 215, ¶ 24. Because Ngo raises no other challenge to the

fees and cost orders, we affirm them.

IV. Appellees’ Appellate Attorney Fees and Costs Requests

¶ 57 Azar and the Azar firm request appellate attorney fees and

costs pursuant to C.A.R. 38(a), 39, and 39.1, as well as the fee-

shifting provisions in the Confidentiality Agreement and

Employment Agreement. Because we affirm the judgment and

orders, both appellees are entitled to costs pursuant to C.A.R. 39.

However, we reject appellees’ requests for double costs because,

though unsuccessful, we do not believe either appeal was frivolous

as argued.

28

¶ 58 In addition, the fee-shifting provisions in the agreements

entitle the Azar firm to attorney fees related to its defense of its

judgment for breach of contract. (Because Azar individually is not a

party to the contract, he is not entitled to benefit from the fee-

shifting provisions.) We exercise our discretion and remand to the

trial court to determine the amount of reasonable appellate costs

and attorney fees to be awarded to the Azar firm, as well as

reasonable costs to be awarded to Azar.

V. Disposition

¶ 59 The judgment and orders are affirmed, and the case is

remanded for further proceedings to establish reasonable costs and

attorney fees on appeal.

JUDGE GOMEZ and JUDGE KUHN concur.

Case Details

Case Name: Harrison v. Barclay

Court Name: Colorado Court of Appeals

Date Published: Sep 5, 2024

Citation: 2024 COA 100

Docket Number: 23CA0659

Court Abbreviation: Colo. Ct. App.