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Bruce v. Roberts

Court of Appeals of Colorado, Third Division

December 15, 2016

Barry L. Bruce, Attorney-Appellant,
Jay A. Roberts and Ashley Roberts McNamara, as Co-Trustees of the Della I. Roberts Trust, Petitioners-Appellees.

         Larimer County District Court No. 13PR30246 Honorable Devin R. Odell, Judge


          Jackson Kelly PLLC, John S. Zakhem, John L. Skari, Jr., Benjamin Ross, Denver, Colorado, for Appellant

          Davis Graham & Stubbs LLP, John M. Bowlin, Denver, Colorado, for Appellees


          NAVARRO, JUDGE

         ¶ 1 A Colorado court must award attorney fees against a party who presents the court with a claim or defense lacking substantial justification. § 13-17-102(2), C.R.S. 2016. But can a Colorado court award fees under section 13-17-102 for an unjustified claim presented to a foreign court?

         ¶ 2 This question is raised by appellant, Barry L. Bruce, an attorney assessed with opposing counsels' fees under section 13-17-102 for legal work performed in both the underlying Larimer County estate matter and a collateral action in West Virginia. Relying on the language of section 13-17-102 and Board of County Commissioners v. Kraft Building Contractors, 122 P.3d 1019 (Colo.App. 2005), Bruce argues that the district court lacked authority to award attorney fees incurred solely in the West Virginia case. Appellees, Jay A. Roberts and Ashley Roberts McNamara, respond that In re Estate of Leslie, 886 P.2d 284, 288 (Colo.App. 1994), supports the court's award.

         ¶ 3 We conclude that Kraft properly applied the plain language of section 13-17-102 and that Leslie is distinguishable. To the extent that Leslie may conflict with our decision, however, we decline to follow that case. Following Kraft instead, we vacate the district court's order as it pertains to attorney fees incurred in the West Virginia action and remand for further proceedings. I. Facts and Proceedings

         ¶ 4 In 1996, Della Roberts, assisted by her son James Roberts, formed the Della I. Roberts Trust in Colorado, where she lived. She died eight days later.

         ¶ 5 Upon Della's death, James, the designated trustee, was supposed to divide the trust's assets into two equal shares. The first share was intended to benefit James and his wife, Mary Sue Roberts. The second share was intended to benefit Della's grandchildren, the children of James and Mary Sue. The trust instrument further provided that James was to distribute to Della's grandchildren "at least monthly and in equal amounts, all of the net income from their trust share."

         ¶ 6 James did not properly administer the trust. Apparently, however, no one expressed concern over his administration until after he died in October 2012. Upon his death, Mary Sue assumed the role of trustee pursuant to the trust's provisions. As such, she was supposed to distribute equally all principal remaining from the trust's second share to Della's grandchildren. But a majority of the grandchildren promptly removed Mary Sue as trustee (as permitted by the trust instrument), citing concerns that trust assets had already been squandered and she might not properly distribute any remaining assets. These grandchildren then sought the trust's financial records and a corporate fiduciary willing to assume the role of trustee.

         ¶ 7 Unable to obtain either the financial records or a willing corporate fiduciary, two grandchildren - Jay A. Roberts and Ashley Roberts McNamara - brought this probate action on behalf of the trust. (We will refer to them as "trustees" because they were ultimately appointed trustees.) Their initial petition sought an order appointing a successor trustee. They then sought the records necessary to complete a historical accounting for the trust, marshal and distribute the remaining assets, and finally dissolve the trust.

         ¶ 8 Mary Sue objected to the petition on jurisdictional grounds. Citing her and James's move from Colorado to West Virginia in 1999, she argued that West Virginia courts had exclusive jurisdiction over the trust. In June 2013, the district court rejected the jurisdictional challenge and concluded that Larimer County, Colorado, was the appropriate venue.

         ¶ 9 Meanwhile, Mary Sue filed a separate case in West Virginia state court. She asked that court to assume jurisdiction over the trust, and she sought (among other things) a temporary restraining order and an injunction to prevent dissolution of the trust. Trustees removed the case to the federal district court in West Virginia. After a hearing, the federal court dismissed the West Virginia action in November 2013, concluding that "jurisdiction over the trust is properly in Colorado." Mary Sue appealed this decision to the Fourth Circuit but then voluntarily dismissed her appeal. The record does not reveal whether trustees sought an attorney fees award from the federal courts in the West Virginia action. On appeal, Bruce asserts that trustees did not apply for fees in the federal courts; trustees have not disputed his assertion.

         ¶ 10 Back in Colorado, the district court accepted a final accounting of the trust filed by trustees, ordered all assets remaining in the trust be distributed to the grandchildren in equal shares, and found that the trust could recover administrative costs and attorney fees incurred in litigating both the Colorado and West Virginia cases, pursuant to section 13-17-102.

         ¶ 11 Bruce represented Mary Sue in both the Colorado and West Virginia matters. The district court awarded attorney fees for the Colorado matter ($7325) in favor of the trust and against both Bruce and Mary Sue's local counsel, jointly and severally. The court assessed fees against Bruce for the West Virginia action ($54, 565).

         II. Analysis

         ¶ 12 Bruce appeals the district court's order only as it pertains to attorney fees awarded for the West Virginia action. He contends that section 13-17-102 did not authorize the court to award attorney fees incurred solely in the West Virginia case.[1] Based on the plain language of the statute, Bruce is right, except to the extent that trustees used in this case any work product created for the West Virginia federal action. Because the record does not reveal whether they did so, further proceedings are necessary to address this exception. For these reasons, we vacate the order in part and remand for resolution of this question.

         A. Relevant Law and Standard of Review

         ¶ 13 A court considering whether to award attorney fees must begin with the American Rule, "which precludes an award of attorney fees absent a specific contractual, statutory, or procedural rule providing otherwise." City of Aurora ex rel. Util. Enter. v. Colo. State Eng'r, 105 P.3d 595, 618 (Colo. 2005); see L & R Expl. Venture v. CCG, LLC, 2015 COA 49, ¶ 20 (stating that Colorado follows the American Rule requiring each party in a lawsuit to bear its own legal expenses). Article 17 of title 13 specifically provides otherwise and sets forth a limited basis for awarding attorney fees. As relevant here, section 13-17-102 authorizes an attorney fees award if a court finds an attorney or party brought or defended a civil action that "lacked substantial justification, " either in whole or in part. § 13-17-102(2); see § 13-17-102(4) (defining the phrase "lacked substantial justification").

         ¶ 14 But does section 13-17-102 also authorize a Colorado court to award attorney fees for frivolous litigation occurring not in that court but in a separate (though related) matter occurring in a foreign court?[2] This question presents a statutory interpretation issue that we review de novo. Sperry v. Field, 205 P.3d 365, 367 (Colo. 2009); see also Madison Capital Co. v. Star Acquisition VIII, 214 P.3d 557, 560 (Colo.App. 2009) ("We review de novo the legal analysis employed by the trial court in reaching its decision to award attorney fees.").

         ¶ 15 The primary goal of statutory interpretation is to ascertain and give effect to the General Assembly's intent. St. Vrain Valley Sch. Dist. RE-1J v. A.R.L., 2014 CO 33, ¶ 10. To determine this intent, we look first to the statute's plain language. Vigil v. Franklin, 103 P.3d 322, 327 (Colo. 2004). "[W]e must accept the General Assembly's choice of language and not add or imply words that simply are not there." People v. Benavidez, 222 P.3d 391, 394 (Colo.App. 2009). We must also read the language in the context of the statute as a whole, giving consistent, harmonious, and sensible effect to all its parts. Jefferson Cty. Bd. of Equalization v. Gerganoff, 241 P.3d 932, 935 (Colo. 2010); see also Copeland v. MBNA Am. Bank, N.A., 907 P.2d 87, 90 (Colo. 1995) ...

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