CourtListener 10123971

Testo completo

23CA1190 World v Hill 09-12-2024

COLORADO COURT OF APPEALS

Court of Appeals No. 23CA1190
City and County of Denver District Court No. 22CV30028
Honorable Shelley I. Gilman, Judge

World Capital Brokerage, Inc.,

Plaintiff-Appellant,

Howard Schall Hill,

Defendant-Appellee.

ORDER AFFIRMED

Division VII
Opinion by JUDGE KUHN
Tow and Gomez, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)
Announced September 12, 2024

von Gunten Law LLC, David von Gunten, Denver, Colorado, for Plaintiff-
Appellant

Haddon, Morgan and Foreman, P.C., Jacob McMahon, Denver, Colorado, for
Defendant-Appellee
¶1 Plaintiff, World Capital Brokerage, Inc. (WCB), appeals the

district court’s order awarding attorney fees to defendant, Howard

Schall Hill. We affirm.

I. Background

¶2 This protracted dispute relates to WCB’s decision to fire Hill as

a registered representative and investment adviser following Hill’s

admission that he had altered the expiration date of a customer’s

driver’s license on a new account application form. After WCB

reported the reason for Hill’s termination in a Form U5 that it filed

with the Financial Industry Regulatory Authority (FINRA), Hill

sought to expunge this disclosure by initiating arbitration under

FINRA’s rules. In response, WCB filed its “Statement of Answer,

Motion to Dismiss, and Request for Award of Attorney’s Fees.” WCB

asserted that Hill’s conduct violated certain contracts the parties

had entered into when Hill joined the company. And under those

contracts, WCB argued, Hill was required to compensate WCB for

attorney fees it incurred in the arbitration proceeding. The

arbitrator granted Hill’s expungement request and denied WCB’s

claim and request for attorney fees.

1
¶3 Less than three weeks later, WCB reasserted its breach of

contract claim in Denver District Court. Hill moved for summary

judgment, arguing that because the issue of attorney fees had

already been decided in the arbitration, WCB was collaterally

estopped from relitigating it in court. Hill also contended that

because WCB’s claim lacked substantial justification, he was

entitled to recover attorney fees and costs incurred in defending

against the lawsuit. The district court agreed with Hill on both

counts, granting his motion for summary judgment.

¶4 Hill then filed a timely motion seeking an award of $42,684.50

in attorney fees and $579 in costs. Shortly thereafter, WCB

appealed the district court’s order granting summary judgment to

Hill. A motions division of this court dismissed parts of WCB’s

appeal challenging the district court’s fee award. World Cap.

Brokerage, Inc. v. Hill, (Colo. App. No. 22CA2221, July 7, 2023)

(unpublished order). The motions division reasoned that because

the district court had yet to determine the amount of fees and costs

Hill was entitled to recover, the fee award didn’t constitute a final,

appealable order. Id.

2
¶5 A separate division of this court heard the merits appeal of the

summary judgment order. That division affirmed the district

court’s ruling that WCB’s breach of contract claim was barred

under the doctrine of collateral estoppel. World Cap. Brokerage, Inc.

v. Hill, slip op. at ¶ 29 (Colo. App. No. 22CA2221, Jan. 18, 2024)

(not published pursuant to C.A.R. 35(e)).

¶6 In the meantime, the district court reduced the fee award to a

sum certain. After holding an evidentiary hearing on the

reasonableness of the amounts Hill claimed, the court awarded the

requested $579 in costs and a reduced $27,403.63 in attorney fees.

II. Analysis

¶7 WCB challenges the fee award on the grounds that the district

court erred when it determined that (1) Hill was entitled to attorney

fees because WCB’s underlying claim lacked substantial

justification and (2) the awarded amounts were reasonable. We

decline to address the first argument because it’s waived, and we

disagree with WCB’s second contention.

3
A. WCB Waived the Issue of Whether its Claim Lacked
Substantial Justification

¶8 WCB contends that the district court erred when it determined

that its breach of contract claim lacked substantial justification,

entitling Hill to a fee award under section 13-17-102, C.R.S. 2024.

Hill argues in response that this issue is waived and that we should

decline to address it on the merits.

¶9 In his motion for summary judgment, Hill contended that he

was entitled to recover his attorney fees for defending against

WCB’s claim because, among other things, that claim lacked

substantial justification. Specifically, Hill argued that WCB’s action

was “substantially vexatious as defined by [section] 13-17-102(4)

because it [was] designed to irritate and annoy [him] in the hopes of

forcing a settlement from, or judgment against, [him] with no basis

now that it’s [a] claim [that] has been adjudicated according to the

terms WCB agreed to.”

¶ 10 WCB’s response only addressed the merits issues in the

motion. WCB argued that the relevant contracts were enforceable

and that collateral estoppel didn’t apply because the arbitration

4
proceedings didn’t satisfy all elements of that doctrine.1 However, it

failed to address Hill’s attorney fee request. The district court

considered this lack of response when granting the request: “Noting

that WCB does not challenge Mr. Hill’s basis for [his] request of

attorney fees, the Court grants [Hill’s] request after consideration of

the factors in [section 13-17-103, C.R.S. 2024].”

¶ 11 WCB then filed a motion for reconsideration under C.R.C.P.

59, arguing that its opposition to the application of collateral

estoppel operated as an objection to Hill’s attorney fee request.

WCB’s attorney added that because an argument under section

13-17-102 is routinely asserted, counsel “seldom addresses an

opposing party’s claim for fees when based on the argument that

fees are allowed because the arguments lack substantial

1 Specifically, WCB contended that collateral estoppel didn’t apply

because the issue of WCB’s entitlement to arbitration-related
attorney fees wasn’t necessarily adjudicated in the arbitration, and
WCB didn’t have a full and fair opportunity to litigate that issue in
the prior proceeding. See Bebo Constr. Co. v. Mattox & O’Brien, P.C.,
990 P.2d 78, 84-85 (Colo. 1999) (listing elements of collateral
estoppel). Like the district court, the division of this court rejected
WCB’s arguments. See World Cap. Brokerage, Inc. v. Hill, slip op. at
¶¶ 18-29 (Colo. App. No. 22CA2221, Jan. 18, 2024) (not published
pursuant to C.A.R. 35(e)).

5
justification and [are] frivolous.” WCB repeats this argument on

appeal in support of preservation.2 We’re not persuaded.

¶ 12 Hill made a request for attorney fees that was separate and

distinct from the substantive issues of breach of contract and

collateral estoppel in the motion for summary judgment. In support

of his argument that WCB’s suit was substantially vexatious under

section 13-17-102, he contended that several factors contained in

section 13-17-103 applied to the case. Specifically, Hill argued that

(1) WCB had access to facts necessary to determine the validity of

its breach of contract claim; (2) WCB was in a superior financial

position; (3) WCB “presented claims and pleading[s] in bad faith

throughout this proceeding”; and (4) no facts impacting the validity

of WCB’s claim were reasonably in conflict. See § 13-17-103(1)(c)-

(f).

¶ 13 WCB completely failed to address Hill’s claim for attorney fees

in its response, let alone his specific arguments under sections

13-17-102 and -103 that ultimately constituted the basis for the

2 WCB is represented by the same counsel on appeal as it was in

the district court.

6
court’s fee award. While the district court determined that

collateral estoppel applied to WCB’s breach of contract claim, that

wasn’t the basis of the court’s determination that WCB’s action

lacked substantial justification. Nor did the court make its

determination based solely on WCB’s failure to respond to the

argument.

¶ 14 Instead, the district court considered the statutory factors

when granting Hill’s request. The court found that WCB’s suit

lacked substantial justification because even though WCB was

aware of facts impacting the validity of its claim, it nonetheless

“chose to commence and continue this action against Mr. Hill with

knowledge of those facts, which were determinative of the validity of

WCB’s claim and were not reasonably in conflict.”

¶ 15 In its reply brief, WCB argues in favor of preservation. It says

that “[i]t can only be left to the imagination how a party can contest

the relief sought by an opponent by summary judgment, and seek

its own contrary relief, but then somehow not be deemed to object

to a claim for fees.” But this misses the point. A party must do

more than just object; it must also give the district court its

arguments in support of its objection. See Colo. Permanente Med.

7
Grp., P.C. v. Evans, 926 P.2d 1218, 1228 (Colo. 1996); see also

Valentine v. Mountain States Mut. Cas. Co., 252 P.3d 1182, 1188 n.4

(Colo. App. 2011) (“A party’s mere opposition to its adversary’s

request . . . does not preserve all potential avenues for relief on

appeal. We review only the specific arguments a party pursued

before the district court.”).

¶ 16 Even if the district court had inferred that WCB would object

to fees, a nonresponse doesn’t give the district court a basis for that

objection. Because WCB didn’t address any of the statutory factors

in its briefing on the motion for summary judgment, the court had

no opportunity to consider whether WCB was nonetheless

substantially justified in bringing the lawsuit. See Cuevas v. Pub.

Serv. Co. of Colo., 2023 COA 64M, ¶ 35 n.3 (noting that although

parties are not required to use “talismanic language” to preserve

issues for appeal, the district court must be presented with an

adequate opportunity to make findings of fact and conclusions of

law on the issue (quoting People v. Melendez, 102 P.3d 315, 322

(Colo. 2004))) (cert. granted in part July 1, 2024).

¶ 17 “It is axiomatic that issues not raised in or decided by a lower

court will not be addressed for the first time on appeal.” Melat,

8
Pressman & Higbie, L.L.P. v. Hannon L. Firm, L.L.C., 2012 CO 61,

¶ 18. When a party fails to advance an argument in the district

court, that argument is generally waived. Id. Under the

circumstances of this case, then, we conclude that WCB waived this

issue. We thus decline to address it further.3

B. The Amount of the Fee Award is Reasonable

¶ 18 WCB next contends that the district court erred by awarding

Hill $27,982.63 in attorney fees and costs because (1) the award

was based in part on supporting documentation that was hearsay

3 To the extent WCB argues that it preserved this issue in its motion

for reconsideration, we disagree. See Fid. Nat’l Title Co. v. First Am.
Title Ins. Co., 2013 COA 80, ¶ 51 (noting that a defense raised for
the first time in a post-trial motion under C.R.C.P. 59 isn’t
preserved for appellate review). We also note the significant risks
inherent in counsel’s longstanding practice of not addressing
similar attorney fee requests. See M.H.W. v. D.J.W., 757 P.2d 1129,
1130 (Colo. App. 1988) (“A trial court may, in its discretion,
consider a party’s failure to file a responsive pleading a confession
of a motion.”); Weize Co. v. Colo. Reg’l Constr., Inc., 251 P.3d 489,
493-94 (Colo. App. 2010) (motion for discovery sanctions properly
deemed confessed where party failed to respond); see also Avicanna
Inc. v. Mewhinney, 2019 COA 129, ¶ 25 (“Waiver is the intentional
relinquishment of a known right.”).

9
and wasn’t admitted at the hearing and (2) the amount of the award

is unreasonable.4 We perceive no error.

1. Relevant Law and Standard of Review

¶ 19 An attorney fee award must be reasonable. Crow v.

Penrose-St. Francis Healthcare Sys., 262 P.3d 991, 998 (Colo. App.

2011). To determine whether the award is reasonable, the district

court calculates a “lodestar” amount, which represents the number

of hours reasonably expended on the case multiplied by a

reasonable hourly rate. See Payan v. Nash Finch Co., 2012 COA

135M, ¶ 18. The lodestar amount “carries with it a strong

presumption of reasonableness.” Id.

4 To the extent WCB contends that Hill’s supporting documentation

was inadmissible because it wasn’t properly authenticated, we note
that WCB failed to object on that ground during the hearing.
Specifically, WCB argued that the documentation implicated “other
foundational issues” but didn’t specify whether it was objecting on
authentication grounds. Consequently, this issue is also not
preserved for appellate review, and we decline to address it further.
See People in Interest of O.J.S., 844 P.2d 1230, 1233 (Colo. App.
1992), aff’d sub nom. D.A.S. v. People, 863 P.2d 291 (Colo. 1993);
see also McLaughlin v. BNSF Ry. Co., 2012 COA 92, ¶ 9 n.1 (“It is
axiomatic that an appellate court considers only the specific
grounds on which a party objected to evidence’s admission in the
district court.”).

10
¶ 20 Then, the court may adjust the lodestar amount upward or

downward by applying the factors contained in Rule 1.5 of the

Colorado Rules of Professional Conduct. Accetta v. Brooks Towers

Residences Condo. Ass’n, 2021 COA 147M2, ¶ 44. Those factors

include, as relevant here, (1) the time and labor required, the

novelty and difficulty of the questions involved, and the skill

required to perform the legal services properly; (2) the fee

customarily charged in the locality for similar services; (3) the

results obtained; and (4) the experience, reputation, and ability of

the lawyer performing the services. Colo. RPC 1.5(a). The court

may also consider other factors, such as the amount in controversy,

the amount of damages sought, and the amount of damages

recovered. Id.; Tallitsch v. Child Support Servs., Inc., 926 P.2d 143,

148 (Colo. App. 1996).

¶ 21 We review the reasonableness of the amount of an attorney fee

award for an abuse of discretion. Dubray v. Intertribal Bison Coop.,

192 P.3d 604, 608 (Colo. App. 2008); see also § 13-17-103(1) (“In

determining the amount of an attorney fee . . . award, the court

shall exercise sound discretion.”). “A district court abuses its

discretion if the award is manifestly arbitrary, unreasonable, or

11
unfair.” Ravenstar LLC v. One Ski Hill Place LLC, 2016 COA 11,

¶ 40, aff’d, 2017 CO 83. “Accordingly, a trial court’s determination

of a reasonable attorney fee award will generally not be disturbed

on review unless it is patently erroneous and unsupported by the

evidence.”5 Planning Partners Int’l, LLC v. QED, Inc., 2013 CO 43,

¶ 12.

2. Discussion

¶ 22 In his motion for attorney fees and costs, Hill sought to recover

the amounts he was charged by Bonifazi & Associates, P.C., and his

prior counsel — HLBS Law and AdvisorLaw, LLC. Specifically, Hill

5 We note that WCB’s opening brief doesn’t include the applicable

standard of review for this issue. See C.A.R. 28(a)(7)(A) (providing
that an appellant’s opening brief must identify the applicable
standard of review “under a separate heading placed before the
discussion of each issue”). Instead, WCB provides a single standard
of review for all issues presented in this appeal and argues that we
should review them de novo because “[t]he issues in this case were
decided by the Court’s Order granting summary judgment to [Hill].”
But while the court entered the fee award in its order granting Hill’s
motion for summary judgment, that fact doesn’t determine the
status of the award or the applicable standard of review. See Axtell
v. Park Sch. Dist. R-3, 962 P.2d 319, 322 (Colo. App. 1998) (noting
that an award of fees in a summary judgment order is not final
until the amount of fees is determined); Dubray v. Intertribal Bison
Coop., 192 P.3d 604, 608 (Colo. App. 2008) (reviewing attorney fee
award for an abuse of discretion).

12
claimed that by the time the court granted his motion for summary

judgment, his prior counsel had charged him $38,568.50 in

attorney fees and $540 in costs. He additionally claimed $4,116 in

fees and costs from Bonifazi & Associates.6 In support of these

amounts, Hill attached affidavits from Dan Bonifazi and Owen

Harnett, HLBS’s founder and managing attorney. Harnett’s

affidavit addressed HLBS’s and AdvisorLaw’s fees and costs,

including the rates charged and work performed. Harnett’s affidavit

asserted that the claimed amounts were necessary and reasonable.

In addition to the affidavits, Hill also attached billing statements he

received from each counsel.

¶ 23 The district court awarded a portion of the claimed amounts.

It awarded Hill $3,346.38 in attorney fees that Bonifazi &

Associates charged him and $24,057.25 in fees that HLBS charged

him. It denied all fees pertaining to AdvisorLaw. The court also

6 While the motion stated that Bonifazi & Associates charged

$4,116 in attorney fees, the accompanying affidavit reflected $2,607
in attorney fees and $1,470 in paralegal fees, for a total of $4,077.
The remaining $39 represented the filing costs that were passed
through to Hill.

13
awarded him his full costs. WCB only challenges the award of

HLBS’s fees and costs.

¶ 24 First, WCB asserts that “[t]he evidence at the hearing did not

justify the amount of the fee award” because Hill only introduced

documentary evidence regarding HLBS’s fees, which was

inadmissible hearsay. In support, WCB points out that Hill failed to

present any testimony about whether those fees were necessary and

reasonable. Consequently, WCB argues that “[s]ince the fees and

costs of [Hill’s] prior counsel were never established as reasonable

and necessary, and any documentary evidence of the[ir] billings

[was] inadmissible because [it was] hearsay, no fees should have

been awarded from prior counsel.” We’re not persuaded.

¶ 25 True, neither an expert nor anyone from HLBS testified at the

evidentiary hearing. But WCB doesn’t provide a compelling

argument as to why such testimony was required before the court

could make its reasonableness determination.

¶ 26 WCB also doesn’t direct us to any legal authority — and we

are aware of none — stating that the hearsay doctrine prohibits a

court from considering documents submitted in support of an

attorney fee motion unless they are also admitted into evidence at a

14
hearing. To the contrary, C.R.C.P. 121, section 1-22, specifically

contemplates a court utilizing affidavits and supporting

documentation to evaluate fee requests. The rule provides that a

motion for an award of attorney fees “shall be accompanied by any

supporting documentation, including materials evidencing the

attorney’s time spent, the fee agreement between the attorney and

client, and the reasonableness of the fees.” C.R.C.P. 121,

§ 1-22(2)(b). And while this rule allows a party to request an

evidentiary hearing on the reasonableness of the requested fees —

as WCB did here — it doesn’t suggest that a hearing request

precludes a court from considering the supporting documentation

submitted with the motion. Cf. City of Aurora v. Colo. State Eng’r,

105 P.3d 595, 627 (Colo. 2005) (noting that a bill of costs submitted

pursuant to C.R.C.P. 121, section 1-22 need not comply with CRE

1006); see also Patterson v. James, 2018 COA 173, ¶ 44 (noting that

a court isn’t required to rely on particular forms of evidence when

evaluating the reasonableness of a fee request).

¶ 27 Relying on C.R.C.P. 121, section 1-22, the district court here

considered Hill’s supporting documentation to determine a

reasonable amount of HLBS attorney fees he was entitled to

15
recover. That documentation, as noted, included the law firm’s

billing records and the managing attorney’s affidavit stating that all

work performed on Hill’s behalf and the amounts set forth in the

records were necessary and reasonable. That documentation all

supports the district court’s determination. See Patterson, ¶ 45

(noting that it wasn’t error for a court to rely on testimony at an

evidentiary hearing as well as affidavits provided before the

hearing).

¶ 28 Even setting that documentation aside, we note that WCB

didn’t identify any specific HLBS costs it considered unwarranted —

either in the district court or on appeal.7 So the district court was

left to determine whether the fees requested as a whole were

reasonable rather than evaluating challenges to individual line

items. Hill testified at the hearing that he had paid over $40,000 in

attorney fees and costs that he believed were necessary to defend

against WCB’s claim and that the billing records accurately

7 Any such challenge would also not be preserved. See Valentine v.
Mountain States Mut. Cas. Co., 252 P.3d 1182, 1188-89 (Colo. App.
2011) (declining to address a challenge to the reasonableness of
costs where the appellants failed to identify specific costs they
believed were inappropriate).

16
reflected the amounts he was charged. This testimony adequately

established the amount Hill was billed and the amount he paid for

legal services.

¶ 29 As the district court observed, parties frequently offer expert

testimony in attorney fees disputes, but expert testimony is not

required under law. See Parks v. Edward Dale Parrish LLC, 2019

COA 19, ¶ 28. And while, perhaps, it would have been helpful had

someone from HLBS testified at the hearing, the court nonetheless

received documentation and testimony from which it could assess

the reasonableness of Hill’s fee request. In short, the record here

shows that, contrary to WCB’s assertion, Hill presented evidence in

support of his claim that the amounts HLBS charged were

necessary and reasonable. The district court’s determination is

thus supported by the evidence.

¶ 30 Second, WCB argues that “the fees and costs of prior counsel

were not proportional and [were] excessive.” In support, it argues

that the fee award of $27,403.63 far exceeded the value of the

underlying breach of contract claim, which was $22,000. WCB also

argues that it incurred $10,000 in attorney fees during the same

17
timeframe, which is significantly lower than the fee award. And

finally, WCB argues that this wasn’t a complex case.

¶ 31 Those points may be true, but the court considered each of

these arguments. Moreover, it granted WCB some relief in

connection with the arguments and determined that a 10%

reduction in the billed amount was appropriate to address them.8

The court also reduced HLBS’s fees an additional 20% after

determining that some time entries were unnecessary, duplicative,

or block billed. Then the court denied all fees that HLBS charged

for its administrative staff’s time on the case. The net result of

these deductions was that the court granted only roughly 60% of

the fees that Hill had incurred through HLBS and AdvisorLaw. We

cannot say on this record that the district court’s fee award is

manifestly arbitrary, unreasonable, or unfair.

8 The court also considered several factors contained in Colo. RPC

1.5(a), concluding that an upward or downward adjustment to the
lodestar amount of $27,403.63 wasn’t necessary. Because WCB
doesn’t challenge this determination on appeal, we need not
consider its merits here. See City of Aurora v. 1405 Hotel, LLC,
2016 COA 52, ¶ 16 n.3 (not addressing an issue that the parties
didn’t present on appeal).

18
¶ 32 In conclusion, the district court’s decision is supported by the

evidence in the record, and we perceive no abuse of discretion in its

decision to award Hill $27,982.63 in attorney fees and costs. See

Planning Partners Int’l, LLC, ¶ 12.

III. Appellate Attorney Fees

¶ 33 Hill requests appellate attorney fees under section 13-17-102

and C.A.R. 38(b), arguing that WCB’s appeal is frivolous as filed.

Specifically, Hill argues that after the district court determined that

WCB was collaterally estopped from litigating its breach of contract

claim — and the division of our court affirmed that ruling — WCB

nonetheless appealed the court’s attorney fee award “without

[providing] a coherent claim for why its position was [substantially]

justified.” Similarly, Hill argues, “WCB has not come close to

showing” that the amount of the fee award isn’t reasonable given

that the court granted only 60% of the fees he claimed.

¶ 34 An appeal is frivolous as filed if “there are no legitimately

appealable issues because the judgment below ‘was so plainly

correct and the legal authority contrary to the appellant’s position

so clear.’” Calvert v. Mayberry, 2019 CO 23, ¶ 45 (quoting Castillo

v. Koppes-Conway, 148 P.3d 289, 292 (Colo. App. 2006)).

19
¶ 35 While WCB’s appeal is ultimately unsuccessful, we don’t think

that it failed to present legitimately appealable issues. True, we

decline to address the merits of WCB’s argument that the district

court erred by determining that Hill was entitled to an attorney fee

award. But we think that WCB made sufficiently rational

arguments in its challenge to the amount of the fee award to render

its appeal not frivolous as filed. We therefore deny the request for

appellate attorney fees.

IV. Disposition

¶ 36 The order is affirmed.

JUDGE TOW and JUDGE GOMEZ concur.

23CA1190 World v Hill 09-12-2024

COLORADO COURT OF APPEALS

Court of Appeals No. 23CA1190

City and County of Denver District Court No. 22CV30028

Honorable Shelley I. Gilman, Judge

World Capital Brokerage, Inc.,

Plaintiff-Appellant,

Howard Schall Hill,

Defendant-Appellee.

ORDER AFFIRMED

Division VII

Opinion by JUDGE KUHN

Tow and Gomez, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)

Announced September 12, 2024

von Gunten Law LLC, David von Gunten, Denver, Colorado, for Plaintiff-

Appellant

Haddon, Morgan and Foreman, P.C., Jacob McMahon, Denver, Colorado, for

Defendant-Appellee

¶ 1 Plaintiff, World Capital Brokerage, Inc. (WCB), appeals the

district court’s order awarding attorney fees to defendant, Howard

Schall Hill. We affirm.

I. Background

¶ 2 This protracted dispute relates to WCB’s decision to fire Hill as