United States District Court, D. Colorado
ORDER ON MOTION FOR ATTORNEY'S FEES
Michael E. Hegarty, United States Magistrate Judge.
December 28, 2017, the Court granted Defendant Atlas Copco
Drilling Solutions LLC's (“Atlas”) motion to
dismiss the three claims Plaintiff Wise Services, Inc.
(“Plaintiff”) brought against Atlas in the
operative Amended Complaint. Order, ECF No. 57. Here, citing
a state statute, Atlas seeks an award of attorney's fees
incurred in filing the motion to dismiss. The Court agrees
that Atlas is entitled to a fee award, but finds its fee
request is unreasonable in certain respects. Thus, the Court
will grant in part and deny in part Atlas' motion for
brings nine claims for relief against the various Defendants
but asserted only three of those claims against Atlas-Claim 1
for product liability, Claim 3 for breach of implied warranty
of fitness for a particular purpose, and Claim 4 for
negligence-based on the following allegations:
Atlas was the manufacturer of the Predator Drilling System
(the “Predator Drill Rig” or the
“Rig”) at issue in this lawsuit. Am. Compl.
¶¶ 11, 18, ECF No. 6. The Predator Drill Rig was a
prototype, but Atlas did not label or otherwise mark it as
such. Id. ¶¶ 14, 19. Defendant
Dallas-Morris Drilling, Inc. (“Dallas-Morris”)
was the original purchaser or lessor of the Rig. Id.
¶ 20. In 2015, Plaintiff entered into a contract to
purchase the Rig from Dallas-Morris for a price of $1.7
million. Id. ¶¶ 11, 33. When it purchased
the Rig, Plaintiff had no knowledge that it was a prototype.
Id. ¶¶ 34-37.
Plaintiff began having problems with the Rig almost
immediately. It first used the Rig to fulfill a contract to
drill four surface holes. Id. ¶ 40. While
drilling the first hole, the Rig failed and required
replacement parts. Id. ¶¶ 41-44. After
those repairs, the Rig's computer control system failed
while drilling the second hole. Id. ¶ 46.
Plaintiff was unable to use the Rig to complete the four-hole
contract and subcontracted the remaining job to a third
party. Id. ¶ 48.
Plaintiff repaired the Rig at its expense and entered into a
new drilling contract with a new third party. Id.
¶¶ 55-56. However, immediately after the Rig began
to drill, its computer system failed again. Id.
¶ 57. After chronic failures of both the Rig's
mechanical and computer systems, the third party terminated
the contract. Id. ¶ 59. During subsequent
contracts, the same problems persisted, and Plaintiff
continued to incur significant expenses repairing the Rig.
Id. ¶¶ 60-65, 67.
ECF No. 57. During the briefing on the motion to dismiss,
Plaintiff voluntarily withdrew its first claim, conceding it
was subsumed by the breach of implied warranty claim. The
Court then determined that Plaintiff failed to state
plausible third and fourth claims against Atlas pursuant to
Fed.R.Civ.P. 12(b)(6). Id.
timely filed the present motion seeking an award of
attorney's fees pursuant to Colo. Rev. Stat. §
13-17-201. Atlas argues that Plaintiff's claims were
primarily tort-based and, thus, the applicable statute
mandates a fee award. Mot. 2-3. Plaintiff counters that the
essence of its action actually sounds in contract and, thus,
§ 13-17-201 does not apply; alternatively, Plaintiff
contends Atlas' fee request is not reasonable. Atlas'
reply opposes both points.
exercising jurisdiction over diversity cases, such as this,
federal courts apply the substantive law of the forum state.
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. Kan. Mun.
Gas Agency, 174 F.3d 1115, 1118 (10th Cir. 1999)). The
Court finds, and Plaintiff does not object, that it is proper
to look to Colorado law, including Colorado's fee
recovery provision § 13-17-201, for potential
application in this case. See Infant Swimming Research,
Inc. v. Faegre & Benson, LLP, 335 Fed.Appx. 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 . .
attorney fee-shifting statute is intended to apply only to
‘a narrow category of baseless tort cases, namely those
cases that were so lacking in substance that they could not
survive a motion to dismiss for failure to state a claim upon
which relief could be granted.'” Bristol Bay
Prods., LLC v. Lampack, 312 P.3d 1155, 1165
(Colo. 2013) (quoting Krystkowiak v. W.O. Brisben
Cos., 90 P.3d 859, 869 (Colo. 2004)). The provision
requires that the trial court 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). Infant Swimming Research, Inc., 335
Fed.Appx. at 715; see also Gagne v. Gagne, 338 P.3d
1152, 1166 (Colo.App. 2014). The statute “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, 2013 WL 5323191, at *7 (D. Colo. 2013)
(quoting Houdek v. Mobil Oil Corp., 879 P.2d 417,
424 (Colo.App. 1994)).
the statute speaks of dismissals pursuant to Rule 12 of the
Colorado Rules of Civil Procedure, the statute nevertheless
applies to dismissals under Fed.R.Civ.P. 12(b)(6) as well.
Similarly, although 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, 203 F.3d at 757, n.6). In other
words, “a defendant must prevail on the entire action
as to that defendant under Rule 12(b)[.]” Jones v.
Haga, No. 05-cv-02268-PSF, 2007 WL 433126, at *2 (D.
challenges the present motion arguing first that the statute
does not apply and, second, that the fees requested are
unreasonable. The Court will address each challenge in turn.
Is Atlas Entitled to a Fee Award Under §
only challenge Plaintiff makes to the application of §
13-17-201 in this case is to argue his claims were primarily
contractual in nature. To determine whether a “tort
action” has been pled for the purposes of §
13-17-201, “district courts focus on the manner in
which the plaintiff's claims are pled.”
Nero, 2013 WL 5323191 at *7 (citing Dubray v.
Intertribal Bison Co-op., 192 P.3d 604, 607 (Colo.App.
2008)). Courts examine the face of the pleading, rather than
the underlying logic of the claims. Torres, 606
F.Supp.2d at 1291. “It makes the plaintiff the master
of his pleading: if the plaintiff chooses to plead claims in
tort, he runs the risk of C.R.S. § 13-17-201 applying;
if he wishes to avoid the application of the statute, he must
refrain from pleading tort claims.” Id. Thus,
“[w]hen a party has pleaded both tort and non-tort
claims, a court must determine, as a matter of law, whether
the essence of that party's action was one in tort, in
order to ascertain if section 13-17-201 applies.”
Gagne, 338 P.3d at 1167. In so determining,
“the court should focus on the manner in which the
claims were pleaded” . . ., “should rely on the
pleading party's characterization of its claims[, ] and
should not consider what the party should or might have
party here disputes that Plaintiff's Claim Three for
breach of implied warranty is grounded in contract and that
Claim Four for negligence is a tort claim; however, citing
the Colorado Court of Appeals, Plaintiff asserts that the
“essence” of its claims against Atlas are based
on contract and that Atlas conceded as much in its Motion to
Dismiss. Resp. 2-3. Atlas counters not only that Plaintiff
originally pleaded two tort claims against ...