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In re Inrewar od Delluomo

Court of Appeals of Colorado, Seventh Division

April 10, 2014

In the Interest of Phillip Delluomo, Protected Person, Respondent-Appellee, and Janice Eder, Conservator for Phillip Delluomo, Appellee,
v.
Brenda Cedarblade, Appellant

El Paso County District Court No. 10PR635. Honorable Thomas K. Kane, Judge.

JUDGMENT VACATED IN PART.

Cucullu & Associates, Michael D. Cucullu, Colorado Springs, Colorado, for Respondent-Appellee.

Wade Ash Woods Hill & Farley, P.C., Herbert E. Tucker IV, Gregory B. Washington, Denver, Colorado, for Appellee.

Law Office of Edward T. Farry, Jr., Edward T. Farry, Jr., Colorado Springs, Colorado, for Appellant.

Opinion by JUDGE J. JONES. Fox and Navarro, JJ., concur.

OPINION

Page 292

J. JONES, JUDGE.

[¶1] Defendant, Brenda Cedarblade, appeals the district court's judgment entered on a jury verdict awarding attorney fees to plaintiffs, Phillip Delluomo and his conservator, Janice Eder, based on Ms. Cedarblade's breach of fiduciary duty. Because we conclude that the circumstances of the case do not fit within any recognized exception to the " American rule" -- requiring parties to pay their own legal expenses -- we vacate the portion of the judgment awarding attorney fees.

I. Background

[¶2] Mr. Delluomo created a revocable living trust. He named himself trustee and Wells Fargo Bank as co-trustee. The beneficiaries of the trust were his niece, Ms. Cedarblade, and his nephew, Timothy Corcoran. The trust contained a variety of assets, including several parcels of real property.

[¶3] A few months after the creation of the trust, Mr. Delluomo executed warranty deeds that effectively removed five parcels of real property from the trust and transferred them into joint tenancy with Ms. Cedarblade. Following several other changes to Mr. Delluomo's financial affairs -- changes which appear to have been initiated by at least three potential beneficiaries -- reports were filed with El Paso County Adult Protective Services. Ultimately, the court appointed Ms. Eder as Mr. Delluomo's conservator.

[¶4] Ms. Eder initiated an action on Mr. Delluomo's behalf to quiet title, seeking to

Page 293

set aside the real property transactions involving Ms. Cedarblade on the basis of undue influence and breach of fiduciary duty, and seeking damages for Ms. Cedarblade's conduct. A jury found that Ms. Cedarblade had exerted undue influence on Mr. Delluomo with regard to the conveyances of property into joint tenancy. Thus, the court set aside the property transfers to Ms. Cedarblade. The jury also found that Ms. Cedarblade had a fiduciary duty to Mr. Delluomo arising out of a confidential relationship, and that she had breached her fiduciary duty with respect to the property conveyances. The jury awarded plaintiffs attorney fees of $315,000, all of which represented fees incurred in this action, based on Ms. Cedarblade's breach of fiduciary duty. The court entered judgment on the jury verdict.

[¶5] On appeal, Ms. Cedarblade challenges whether, as a legal matter, the jury could award attorney fees as damages. She does not challenge the reasonableness of the amount of fees ...


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