United States District Court, D. Colorado
ORDER DENYING DEFENDANTS' MOTION FOR COSTS AND
CHRISTINE M. ARGUELLO UNITED STATES DISTRICT JUDGE
matter is before the Court on Defendants Mervin Flood and
Susan Flood's Motion for Costs and Attorneys' Fees.
(Doc. # 65.) For the following reasons, the Court denies
Defendants' request for costs and fees.
Court's previous Order (Doc. # 64), United States
Magistrate Judge Michael Watanabe's Recommendation (Doc.
# 62), and United States Magistrate Judge N. Reid
Neureiter's Recommendation (Doc. # 107) provide detailed
recitations of the factual background of this case and are
incorporated herein. The Court details the procedural history
of this case only to the extent necessary to address
Defendants' Motion for Costs and Fees.
Steven Hardy and Jody Whitson-Hardy initiated this action in
a Colorado state court on December 28, 2016, and asserted
three claims for relief against Defendants: (1) breach of
contract; (2) fraud; and (3) negligent misrepresentation.
(Doc. # 3 at 4-7.) Defendants removed the action to this
Court on March 16, 2017. (Doc. # 1.)
filed a Motion for a More Definite Statement under Federal
Rule of Civil Procedure 12(e) shortly thereafter, arguing
that Plaintiffs' Complaint was not sufficiently
particular to satisfy Rule 9(b)'s pleading requirements
for allegations of fraud. (Doc. # 7.) Plaintiffs responded on
April 11, 2017 (Doc. # 14), to which Defendants replied on
April 25, 2017 (Doc. # 15). Magistrate Judge Watanabe denied
Defendants' Motion for a More Definite Statement on May
5, 2017. (Doc. # 23.) He concluded that that Plaintiffs'
Complaint complied with Rule 8(d)(1)'s requirement that
claims for relief contain a short and plain statement of the
claim showing that the pleader is entitled to relief and
giving the defendant fair notice of the claim. (Id.
at 1-2.) Magistrate Judge Watanabe did not address Rule 9(b).
Defendants did not appeal his Order.
two weeks later, on May 17, 2017, Defendants filed a Motion
to Dismiss, seeking dismissal of all three claims on five
grounds. (Doc. # 26.) Plaintiffs filed an Amended Complaint
on June 9, 2017 (Doc. # 32), mooting Defendants' Motion
to Dismiss, see (Doc. # 34). The Amended Complaint
included for the first time a demand for punitive and
exemplary damages. See (Doc. # 33-1.) It did not
contain any novel substantive allegations.
12, 2017, Defendants filed a second Motion to Dismiss,
reprising the same five arguments they made in their first
motion. (Doc. # 35.) Relevant here, Defendants' third
argument was that the Complaint “contain[ed] mere
conclusions, [and was] not entitled to the assumption of
truth.” (Id. at 11.) Plaintiffs responded on
June 13, 2017, and argued that they sufficiently pled their
claims. (Doc. # 37 at 7.) Plaintiffs noted that the Court had
already denied Defendants' Motion for a More Definite
Statement and had rejected Defendants' argument about the
sufficiency of Plaintiff's Complaint. (Id.)
Defendants replied in support of their Motion to Dismiss two
weeks later. (Doc. # 42.)
Report and Recommendation issued February 2, 2018, Magistrate
Judge Watanabe recommended that the Court deny
Defendants' Motion to Dismiss. (Doc. # 62.) With respect
to Defendants' third argument about the conclusory nature
of Plaintiffs' Complaint, the Magistrate Judge stated
that while he was “sympathetic to Defendants'
argument that Plaintiffs' allegations fail to meet the
Iqbal/Twombley pleading standards, ”
he was satisfied that Plaintiffs' “allegations
raise a reasonable expectation that discovery will reveal
evidence to support the elements of the claims
asserted.” (Id. at 9.) Magistrate Judge
Watanabe therefore recommended that “Plaintiffs'
Amended Complaint not be dismissed as conclusory.”
filed an Objection to the Recommendation on February 15,
2018. (Doc. # 63.) They argued that under Rule 9(b), which
“articulates the pleading requirements for fraud,
” Plaintiffs are required to “plead exactly what
statements they allege constitute the fraud in this
matter” but failed to do so in their Complaint.
(Id. at 2.)
February 23, 2018, this Court rejected Magistrate Judge
Watanabe's Recommendation and granted Defendants'
Motion to Dismiss. (Doc. # 64.) The Court determined that the
particularity requirement of Rule 9(b) applied to all three
of Plaintiffs' claims, including breach of contract and
negligent misrepresentation, because Plaintiffs alleged that
Defendants' conduct was fraudulent. (Id. at 8.)
The Court then held that “Plaintiffs' Amended
Complaint [did] not plead the three causes of action with
particularity and therefore [did] not satisfy Rule 9(b)'s
heightened pleading standard.” (Id. at 9.) It
therefore agreed with Defendants that “Plaintiffs'
action must be dismissed for failure to state a claim for
relief under Rule 12(b)(6).” (Id.) In its
conclusion, the Court restated that “Plaintiffs'
claims are . . . dismissed without prejudice.”
(Id. at 10.) However, the Court ordered that,
“should Plaintiff wish to file a Second Amended
Complaint specifically addressing the pleading deficiencies
identified in this Order, it shall be filed no later than
March 23, 2018, or this case will be dismissed with
prejudice.” (Id.) Plaintiffs filed a Second
Amended Complaint on March 22, 2018. (Doc. # 66.) The Second
Amended Complaint is presently the operative complaint, and
the parties are preparing for a five-day jury trial to begin
on May 20, 2019. See (Doc. # 129.)
March 3, 2018, Defendants filed the Motion for Costs and
Attorneys' Fees presently before the Court. (Doc. # 65.)
They are that they “are entitled to a mandatory award
of costs and reasonable attorneys' fees incurred in
defending Plaintiffs' Amended Complaint as provided by
Colorado Revised Statutes §§ 13-16-107 and
13-17-201, respectively.” (Id. at 1.)
Defendants request an award of $7, 691.76 in costs and $80,
518.75 in attorneys' fees. (Id. at 9.)
Plaintiffs responded in opposition to Defendants' request
on April 9, 2018 (Doc. # 75), to which Defendants replied on
April 23, 2018 (Doc. # 81).
COLORADO'S COSTS ...