to the Colorado Court of Appeals Court of Appeals Case No.
Attorneys for Petitioner Khalil Laleh: Evans Case, LLP Larry
Jacobs Denver, Colorado Kimball & Nespor, P.C. Charles J.
Kimball Arvada, Colorado
Attorneys for Petitioner Ali Laleh: Worstell & Associates
David Worstell Denver, Colorado
Attorneys for Respondents: Evans & McFarland, LLC Scott
S. Evans Greenwood Village, Colorado TNS & Associates,
P.C. Michael J. Norton Katelyn B. Ridenour Denver, Colorado
This case concerns a fee dispute between a pair of litigants
and a court-appointed expert. In 2012, Khalil Laleh brought a
forcible entry and detainer action against his brother, Ali
Laleh. The litigation later grew so unwieldy that the trial
court appointed Gary Johnson as an accounting expert (and
later as a special master) to resolve the feuding
brothers' complex accounting claims.
The Laleh brothers signed an engagement agreement with Gary
C. Johnson and Associates, LLC, setting forth the scope of
Johnson's services and payment. Johnson commenced work,
but before he completed his accounting reports for the trial
court, the brothers settled their case and the court
dismissed the suit. Johnson later informed the trial court
that Khalil and Ali refused to pay both his outstanding fees
and his costs incurred post-settlement in attempting to
collect the outstanding fees. Following a hearing, the trial
court issued an order ruling that Johnson's fees were
reasonable, and that he was entitled to the post-settlement
costs he incurred in trying to collect his outstanding fees.
In reaching the latter conclusion, the trial court relied on
language in the engagement agreement stating that the Lalehs
"are jointly and severally responsible for the timely
and complete payment of all fees and expenses"
to Johnson. (Emphasis added.)
In a published, split opinion, the court of appeals affirmed
the trial court's order ruling that the brothers were
jointly and severally liable for Johnson's fees and
costs. Laleh v. Johnson, 2016 COA 4, ¶ 58, P.3d
. The panel majority disagreed with the trial court's
interpretation of the agreement and instead concluded that
the agreement was silent as to collection costs incurred
after the case was dismissed. Id. at ¶¶
27-28. The majority nevertheless concluded that the trial
court did not abuse its discretion in awarding Johnson's
post-settlement collection costs, reasoning that the trial
court had the inherent authority to require the brothers to
pay such costs Id. at ¶ 28 Judge Webb dissented
on this point, arguing that an appellate court may not invoke
the doctrine of inherent authority for the first time on
appeal Id. at ¶ 59 (Webb, J, concurring in part
and dissenting in part).
We granted Khalil's and Ali's petitions for
certiorari review. Because we conclude that a separate
provision of the engagement agreement authorized the award of
the disputed post-settlement collection costs, we affirm the
award of these costs to Johnson, albeit on different grounds.
Facts and Procedural History
Brothers Khalil Laleh and Ali Laleh each own multiple small
businesses- primarily convenience stores and gas stations.
For years, the brothers commingled hundreds of thousands of
dollars between themselves and their businesses and kept few
financial records of these dealings. In 2012, Khalil brought
an action against Ali in county court for forcible entry and
detainer alleging that Ali failed to pay rent on a leased
commercial space. After Ali responded with counterclaims that
sought sums exceeding the county court jurisdictional limit,
the case was removed to the Jefferson County District Court
("the trial court").
By the time the court barred the parties from filing further
claims, the contentious case had expanded to involve at least
thirteen claims, nine parties, and six attorneys. Seven of
these claims concerned the brothers' commingled funds.
The trial court issued several orders to organize the
parties' claims and to preclude further "sue first,
ask questions later" claims. After requesting suggested
names from the parties, the trial court appointed Gary
Johnson as an accounting expert "to untangle the
parties' finances" and ordered that Khalil and Ali
each pay one-half of Johnson's fees.
Each brother signed an engagement agreement with Gary C.
Johnson and Associates, LLC, setting forth the scope of
Johnson's services and the brothers' obligation for
payment. Relevant here, the agreement provided that Johnson
would "continue as expeditiously as possible until
[Johnson] completed [his] services, or [has] been instructed
by [the brothers] to discontinue." Next, the brothers
agreed they were "jointly and severally responsible for
the timely and complete payment of all fees and
expenses of [Johnson]" (the "Fees"
provision). (Emphasis added.) The brothers also agreed to pay
Johnson's "reasonable out-of-pocket expenses."
The agreement provided that periodic invoices would be issued
to the brothers, and that the brothers were required to
communicate any disagreement with an invoice in writing
within thirty days of the invoice date. Finally, under the
paragraph titled "Governing Law and Jurisdiction, "
the agreement provided that, "[t]he prevailing party in
any dispute is entitled to an award of reasonable attorney
fees, costs and expenses."
Soon after Johnson began work in late September 2013, he had
difficulty obtaining requested information from the
brothers' former counsel. In December 2013, without
objection from the brothers, the court appointed Johnson as a
special master under C.R.C.P. 53 to authorize him to obtain
the requested information.
Johnson continued to encounter significant resistance from
the brothers, their counsel, and other witnesses. He
ultimately retained his own counsel to assist his
investigatory efforts and informed the brothers' counsel
that he had done so. The brothers did not object. Johnson
began billing the brothers for the cost of his counsel in
January 2014, and the brothers paid subsequent invoices
On February 7, 2014, the brothers settled the case and
directed Johnson to stop his work. The court granted the
brothers' joint request to dismiss all claims on February
24, 2014. When Johnson ceased his work in early February, he
had reviewed more than 12, 000 pages of material and his
report was 120 pages long. The trial court later noted that
it was clear that the resolution of the brothers' claims
"was attributable ...