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Building On Our Best LLC v. Sentinel Insurance Co. Ltd.

United States District Court, D. Colorado

May 3, 2016



R. Brooke Jackson United States District Judge.

This matter is before the Court on defendant Donan Engineering Co., Inc.’s Motion for Attorney’s Fees [ECF No. 46]. For the reasons discussed below, defendant’s motion is granted as to its entitlement to an award of fees.


In 2014 plaintiffs’ building in Englewood, Colorado was insured under a commercial property insurance policy issued by the Sentinel Insurance Company, Ltd. (Sentinel). ECF No. 17 at ¶ 6. Plaintiffs allege that on June 15, 2014 a hail and wind storm damaged the roof and other parts of the building. Id. at ¶ 7. After plaintiffs submitted an insurance claim, Sentinel’s adjuster hired Donan Engineering Co., Inc. (Donan) to inspect and report on the claimed damage. Id. at ¶ 8. Donan’s report concluded that the roof exhibited minimal evidence of damage. Id. at ¶ 9. Based on the report Sentinel denied the claim. Id.

Plaintiffs then hired a “public adjuster” to assist them with their insurance claim. Id. at 10. Plaintiffs and the public adjuster determined that Donan’s inspection was inadequate and asked Sentinel to have Donan re-inspect the property. Id. at ¶ 11. Although Sentinel’s adjuster agreed, Donan refused. Id.

Plaintiffs’ public adjuster determined that plaintiffs had sustained property damage in the amount of $47, 795.50, and plaintiffs submitted a proof of loss in that amount to Sentinel together with additional evidence of the claimed damage. Id. at ¶ 12. The public adjuster also informed Sentinel that State Farm, which insured another tenant’s portion of the same building, had determined that the June 15, 2014 hail storm had caused enough damage to the roof to require its replacement. Id. Sentinel continued to deny the claim. Id. at ¶ 13.

Plaintiffs therefore filed this lawsuit. The First, Second and Third Claims asserted breach of contract, common law insurance bad faith, and statutory bad faith against Sentinel. Id. at ¶¶ 17-19. The Fourth and Fifth Claims asserted violations of the Colorado Consumer Protection Act (CCPA) and civil conspiracy against Sentinel and Donan. Id. at ¶¶ 20-21. On November 12, 2015 this Court granted Donan’s motion to dismiss Claims Four and Five, as against Donan, pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim and dismissed the action with prejudice. ECF No. 45. Plaintiffs and Sentinel subsequently settled, and the Court dismissed the remainder of the case with prejudice. ECF Nos. 63, 66. Donan now moves for an award of its reasonable attorney’s fees. ECF No. 46.


Donan requests an award of its attorney’s fees pursuant to Colorado Revised Statute § 13-17-201. Id. For the reasons set forth below, the Court finds that Donan is entitled to an award of fees.

Federal courts apply the substantive law of the forum state when exercising jurisdiction over diversity cases or pendent state claims. Jones v. Denver Post Corp., 203 F.3d 748, 757 (10th Cir. 2000). “In the Tenth Circuit, attorney fee statutes are considered substantive.” Id. (citing Boyd Rosene & Assocs. v. Kansas Mun. Gas Agency, 174 F.3d 1115, 1118 (10th Cir. 1999)). Because this is a diversity case, Donan correctly asserts that this Court should look to Colorado’s fee recovery provision, C.R.S. § 13-17-201. See Infant Swimming Research, Inc. v. Faegre & Benson, LLP, 335 F. App’x 707, 715 (10th Cir. 2009) (unpublished). Section 13-17- 201 states,

In all actions brought as a result of a death or an injury to person or property occasioned by the tort of any other person, where any such action is dismissed on motion of the defendant prior to trial under rule 12(b) of the Colorado rules of civil procedure, such defendant shall have judgment for his reasonable attorney fees in defending the action. . . .

The provision requires the trial court to award reasonable attorney’s fees to a defendant when two conditions are met: (1) the action lies in tort; and (2) the action is dismissed pursuant to Rule 12(b).[1] Infant Swimming Research, Inc., 335 F. App’x at 715; Grynberg v. Ivanhoe Energy, Inc., No. 08-CV-02528-WDM, 2010 WL 3894151, at *3 (D. Colo. 2010). The Colorado legislature enacted “§ 13-17-201 to ‘discourage unnecessary litigation of tort claims, ’ and it applies not only to tort actions involving death or injury to person or property, but also to tort actions involving mere economic injury.” Nero v. Am. Family Mut. Ins. Co., No. 11-CV-02717-PAB-MJW, 2013 WL 5323191, at *7 (D. Colo. 2013) (quoting Houdek v. Mobil Oil Corp., 879 P.2d 417, 424 (Colo.App. 1994)).

Donan argues that both elements of § 13-17-201 are met because this Court dismissed Claims Four and Five (tort claims) pursuant to Fed.R.Civ.P. 12(b)(6). I agree. Plaintiffs make several arguments as to why § 13-17-201 should not apply. ECF No. 52. I will address each argument in turn.

First, plaintiffs contend that Donan is not entitled to attorney’s fees in part because “it is undisputed that the Court did not dismiss Plaintiffs’ entire tort action, it merely dismissed the portions of the action as to Donan.” ECF No. 52 at 2. I disagree. In order to recover fees pursuant to C.R.S. § 13-17-201, “a defendant must prevail on the entire action as to that defendant under Rule 12(b)[.]” Jones v. Haga, No. 05CV02268-PSF-CBS, 2007WL433126, at *2 (D. Colo. 2007) (emphasis added). “[A]lthough the statute speaks of an ‘action’ being dismissed, the 10th Circuit has interpreted that language to permit an award of fees in circumstances where all claims against a single defendant are dismissed on Rule 12 grounds, even though claims continue against other defendants.” Torres v. Am. Family Mut. Ins. Co., 606 F.Supp.2d 1286, 1287 (D. Colo. 2009) (citing Jones v. Denver Post Corp., 203 F.3d at 757). This Court granted Donan’s motion to dismiss as to the two claims plaintiffs ...

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