Mark L. Thompson and Rosalin Rogers, Petitioners
Catlin Insurance Company (UK) Ltd. Respondent
Certiorari to the Colorado Court of Appeals Court of Appeals
Case No. 15CA964
Attorneys for Petitioners: Sherman & Howard L.L.C.
Christopher R. Mosley Christopher M. Jackson Denver, Colorado
Attorneys for Respondent: Gordon & Rees LLP John R. Mann
Attorney for Amicus Curiae Colorado Trial Lawyers
Association: The Gold Law Firm, LLC Michael J. Rosenberg
Greenwood Village, Colorado
Attorneys for Amicus Curiae United Policyholders: Colorado
Insurance Law Center Damian J. Arguello Westminster, Colorado
At issue in this case are insurance proceeds owed to
Petitioners Rosalin Rogers and Mark Thompson because of a
botched property investment orchestrated by their
broker-dealer, United Securities Alliance. Some ten years
into this seemingly interminable litigation, no one now
questions that United's insurer, Respondent Catlin
Insurance, must pay Petitioners under a professional
liability insurance policy that Catlin issued. Rather, it is
the amount of the debt that has occupied several Colorado
courts for much of the last decade.
The court of appeals has grappled with Catlin's debt to
Petitioners on four separate occasions. At the end of round
four, a division of the court of appeals upheld the district
court's determination of attorney fees and costs that
Catlin may deduct from the liability limit under Catlin's
policy. Thompson v. United Sec. All., Inc.
(Thompson IV), 2016 COA 128, ¶ 27, ___ P.3d___
. It is this decision in Thompson IV about fees and
costs that we now review.
We first address whether the Thompson IV division
erred when it upheld the district court's decision to
consider new evidence on remand from Thompson v. United
Securities Alliance, Inc. (Thompson III), No.
13CA2037, (Colo.App. Oct. 16, 2014). Because the Thompson
IV division reasonably construed the mandate issued by
the Thompson III division, we perceive no error.
Our second task is to decide whether the Thompson IV
division erred when it held that there was no legal basis for
awarding prejudgment interest in a garnishment proceeding. We
conclude that the division did err and that Petitioners are
entitled to prejudgment interest.
Accordingly, as to the first issue, we affirm the judgment of
the court of appeals. As to the second, we reverse and remand
for further proceedings consistent with this opinion.
Facts and Procedural History
Petitioners, through United, invested in a warehouse property
only to learn that (1) the warehouse was, in Petitioners'
estimation, "obsolete"; (2) the seller had
purchased the warehouse only three years earlier for
significantly less than Petitioners paid; and (3) the
subtenant was not credit-worthy. After Petitioners'
investment tanked, they commenced arbitration against United.
In two separate arbitration proceedings, the panels each
ruled in favor of Petitioners and awarded damages.
Petitioners then went to district court to confirm the award.
Once confirmed, Petitioners began the arduous journey toward
claiming insurance proceeds from United's insurance
To receive the proceeds, Petitioners filed a writ of
garnishment against Catlin. Catlin responded by arguing that
United's insurance policy with Catlin didn't cover
the underlying claim at issue. The district court disagreed
and found coverage. Catlin then asserted that the insurance
policy allowed it to deduct from the policy's liability
limit "reasonable and necessary fees and costs"
incurred in its defense of United. No one disputes this. To
prove their costs and fees, Catlin submitted invoices that
were heavily redacted, apparently out of a concern that their
disclosure might adversely affect another, unrelated case.
However, the district court was unable to make heads or tails
out of the redacted invoices. Flummoxed, it found that Catlin
could deduct nothing from the policy's $1 million limit.
¶8 A division of the court of appeals upheld the
judgment as to insurance coverage, but reversed the district
court on fees and costs. The division reasoned that even the
redacted invoices demonstrated that Catlin had incurred at
least some reasonable fees and costs. Catlin then
claimed a total of roughly $550, 000 in fees and costs. As a
result, Catlin paid Petitioners about $450, 000-the
undisputed amount left over after Catlin deducted from the $1
million policy limit its claimed attorney fees and costs-with
the validity of the $550, 000 deduction to be determined on
remand in district court.
On remand, the district court was still unable to decipher
the redacted invoices. To come up with some calculation, as
the court of appeals required, the district court simply
extrapolated from Petitioners' attorney fees and
costs in the two underlying arbitrations, which totaled $320,
000. Apparently deciding that what's good for the goose
is good for the gander, the district court held that Catlin
could likewise deduct $320, 000 from the policy limit. Catlin
A division of the court of appeals again reversed, reasoning
that the district court had failed to make sufficient
findings of fact to support its determination. Thompson
III, slip op. at 7-8. Specifically, the division
couldn't determine how the district court correlated the
Petitioners' attorney fees to Catlin's. Id.
So, it remanded "for the district court to make a more
specific determination of the reasonable costs and fees that
Catlin may deduct." Id. at 11. The court of
appeals also gave the more specific instructions at issue
The order is reversed and remanded with instructions to
calculate the reasonable costs and fees that Catlin may
deduct from the policy limit. In doing so, the court is
directed to review the existing record, and from this record,
calculate the amount of expenses that Catlin reasonably
incurred in each of the [two] arbitrations; and to identify
any factors and calculations used in making this calculation.
Id. at 15.
On remand, the district court ordered additional briefing.
Catlin then radically altered the landscape of the case by
finally submitting the unredacted invoices. Petitioners
objected and moved to strike, claiming that submission of the
unredacted invoices exceeded the scope of the Thompson
III mandate. The district court denied the motion.
With decipherable invoices now in hand, the district court
calculated Catlin's reasonable expenses. Of the some
$550, 000 that Catlin requested, the district court found
around $450, 000 reasonable and ordered Catlin to pay the
remaining balance of approximately $100, 000. The district
court did not require Catlin to pay pre- or post-judgment
This time, Petitioners appealed. They argued that the
district court exceeded "the existing record"
mandate when it reviewed the unredacted invoices. Petitioners
also contended that the district court erred in failing to
order any prejudgment interest.
The Thompson IV division majority disagreed on both
grounds. As to the first issue, the majority reasoned that
the Thompson III division's mandate-when read in
context-didn't preclude the district court from examining
the unredacted invoices. Thompson IV, ¶ 12.
Rather, given the specific factors that the previous division
had presented the district court, the direction to look to
the existing record "was merely a way to reassure the
district court that it need not start from scratch but could
instead perform the necessary factfinding and calculations
based on the indisputably less-than-ideal evidence in the
record." Id. at ¶ 21. Finally, the
division unanimously held that there wasn't a legal basis
for awarding Petitioners any prejudgment interest.
Id. at ¶¶ 30-32.
But Judge Webb dissented as to the majority's ruling on
the scope of the mandate. To him, the language of the
Thompson III mandate was abundantly clear: The
district court was only to look to "the existing
record" and nothing else. Id. at ¶ 41
(Webb, J., dissenting). He also reasoned that the
Thompson III mandate simply sought a better
explanation from the district court, not better evidence.
Id. at ¶ 48. Finally, Judge Webb considered the
majority's conclusion unfair, as it gave Catlin a second
chance to submit invoices after Catlin had made a tactical
decision to submit only redacted ones. Id. at
We granted certiorari.
First, we address the mandate issue. We conclude that the
Thompson IV division didn't err when it
determined that the district court complied with the
Thompson III mandate.
Second, we discuss prejudgment interest. We conclude that
Petitioners are entitled to prejudgment interest.
The Thompson III Mandate
Viewed in the broader context of this lengthy dispute, the
Thompson IV division reasonably construed the
Thompson III mandate. We reach this conclusion in
four steps. First, we outline the standard of review. Second,
we describe the mandate rule. Third, we note that the court
of appeals is entitled to some discretion in reviewing its
own mandate. Fourth, we consider some practical problems that
would result from reversing the court of appeals in this