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Southern Colo. Orthopaedic Clinic Sports Med. & Arthritis Surgeons, P.C. v. Weinstein

Court of Appeals of Colorado, Sixth Division

December 18, 2014

Southern Colorado Orthopaedic Clinic Sports Medicine and Arthritis Surgeons, P.C., a Colorado professional corporation, a/k/a Premier Orthopedics and Sports Medicine Specialists, P.C., Plaintiff-Appellant,
v.
David M. Weinstein, M.D., Defendant-Appellee

El Paso County District Court No. 07CV5023. Honorable Peter W. Booth, Judge.

Hamil/Martin, LLC, J. Lawrence Hamil, Denver, Colorado; Tsoucaris Law, LLC, Valissa A. Tsoucaris, Denver, Colorado, for Plaintiff-Appellant.

Lewis Roca Rothgerber, LLP, Eric Hall, Edward Gleason, Colorado Springs, Colorado, for Defendant-Appellee.

Opinion by JUDGE BERNARD. Fox and Nieto[*], JJ., concur.

OPINION

BERNARD, JUDGE

Page 1045

[¶1] This appeal focuses on a fee-shifting provision in an employment agreement. This provision states that the prevailing party in any action to enforce the agreement " shall be entitled to recover. .. all attorney fees [and] costs."

[¶2] Does this provision require the trial court to award the prevailing party all its attorney fees and costs instead of awarding it only its reasonable attorney fees and costs? We answer this question " no." As a result, we affirm the trial court's decision that awarded only reasonable attorney fees and costs to the plaintiff in this case, a professional corporation known as the Southern Colorado Orthopaedic Clinic Sports Medicine and Arthritis Surgeons, P.C.

I. Background

[¶3] The litigation between the professional corporation and the defendant, Dr. David M. Weinstein, spans roughly seven years. (We note that there was another defendant involved in this case who is not a party to this appeal.) The professional corporation alleged that the doctor had breached his employment agreement with the professional corporation. The professional corporation sued the doctor, and it raised seven claims.

Page 1046

As is pertinent to our analysis, these claims included (1) breach of various terms of the employment agreement; and (2) an allegation that the doctor had not paid liquidated damages that he owed because he had violated a non-compete provision of the employment agreement. The doctor responded with counterclaims and third-party claims.

[¶4] In 2009, the trial court presided over an eight-day jury trial. At its conclusion, the jury awarded the professional corporation $13 in nominal damages. The trial court then granted the professional corporation's request for a directed verdict, and it awarded the professional corporation $10,000 in liquidated damages because the doctor had breached the non-compete provision.

[¶5] The trial court later decided that neither the professional corporation nor the doctor had prevailed at trial. It reasoned, in part, that the professional corporation had only obtained nominal damages. The court then declined the professional corporation's request for attorney fees and costs under the fee-shifting provision in the employment agreement.

[¶6] The professional corporation appealed. (The other defendant participated in this first appeal.) A division of this court reversed the trial court's conclusion that the professional corporation had not prevailed for the purposes of the fee-shifting provision. S. Colo. Orthopaedic Clinic Sports Med. & Arthritis Surgeons, P.C. v. Weinstein, (Colo. App. No. 09CA2034, Dec. 2, 2010)(not published pursuant to C.A.R. 35(f)). It reasoned that the professional corporation had prevailed because the judgment " favored [the professional corporation] on fifteen significant claims." The division then remanded the case so that the trial court could hold " a new trial on the issue of damages on [the duty of loyalty claims] and to determine and award [the professional corporation's] attorney fees and costs, both at trial and on appeal."

[¶7] This appeal only concerns the award of attorney fees and costs. On remand, the professional corporation asked the court to order the doctor to pay it $821,452.58 in attorney fees and costs. (By this time, the other defendant had settled with the professional corporation. The details of this settlement are not in the record. The remand hearing on attorney fees and costs only involved the professional corporation and the doctor.) The trial court awarded the professional corporation $28,993.75. This figure included $9315.15 in attorney fees for the trial, $2328.79 in costs for the trial, and $17,349.81 in attorney fees and costs for the appeal.

II. Standard of Review

[¶8] We review an award of attorney fees and costs for an abuse of discretion. Planning Partners Int'l, LLC v. QED, Inc., 2013 CO 43, ¶ 12, 304 P.3d 562. A trial court abuses its discretion when its " actions are manifestly arbitrary, unreasonable, or unfair." Id. (citing Colo. Nat'l Bank of Denver v. Friedman, 846 P.2d 159, 167 (Colo. 1993)). " Accordingly, a trial court's determination of a reasonable attorney fee award will generally not be disturbed on review unless it is patently erroneous and unsupported by the evidence." Id. (citing Hartman v. Freedman, 197 Colo. 275, 281, 591 P.2d 1318, 1322 (1979)). But we review a trial court's interpretation of a contractual fee-shifting provision de novo. In re Estate of Gattis, 2013 COA 145, ¶ 35, 318 P.3d 549.

III. The Fee-Shifting Provision

[¶9] The professional corporation contends that the trial court erred when the court did not award it all its attorney fees and costs. It bases this argument on the fee-shifting provision, which states that the professional corporation was entitled to all its attorney fees and costs because it was the prevailing party at trial. It adds that this clear language blocked the trial court from awarding only reasonable attorney fees and costs. We disagree. We therefore affirm the trial court, although we do so on somewhat different grounds. See Negron v. Golder, 111 P.3d 538, 542 (Colo. App. 2004)( if the trial court reaches the correct conclusion, the Court of Appeals may affirm on different grounds).

A. The Law

[¶10] Colorado courts follow the American rule, which requires parties to ...


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