The Final Judgment Rule and Attorney Fees
| Publication year | 1988 |
| Pages | 2139 |
| Citation | Vol. 17 No. 11 Pg. 2139 |
1988, November, Pg. 2139. The Final Judgment Rule And Attorney Fees
On July 11, 1988, the Colorado Supreme Court decided Baldwin v. Bright Mortgage Company.(fn1) This decision has made a change in certain appellate practices in the state of Colorado. After Baldwin, a judgment on the merits may be appealed even if issues regarding attorney fees remain unresolved in the trial court.
Baldwin stemmed from the dismissal of a third-party claim against Bright Mortgage Company, the construction lender on a home being built for the Baldwins. The trial court determined the third-party claim to be frivolous and assessed attorney fees against the Baldwins and their attorney.
The trial court, pursuant to Colorado Rules of Civil Procedure ("C.R.C.P.") Rule 54(b),(fn2) declared that the dismissal of the Baldwins' claims against the lender was a final judgment and that there was no just reason to delay entry of final judgment. However, the trial court reserved until a later hearing the amount and reasonableness of the attorney fees to be assessed against the Baldwins and their attorney. The Baldwins appealed the dismissal to the Colorado Court of Appeals, which rejected the appeal "for lack of a final, appealable judgment" because the issue of attorney fees had not been resolved.
In its dismissal of the Baldwins' appeal, the Colorado Court of Appeals relied on its decision in Ortega v. Board of County Commissioners of Costilla County.(fn3) In Ortega, the plaintiff sought attorney fees, but the trial court failed to decide the issue. The Court of Appeals held that there was no final judgment until the issue of attorney fees was resolved and dismissed the appeal. The decision in Ortega was reaffirmed in Martin Marietta v. Busto.(fn4)
Baldwin overruled the decisions of the Colorado Court of Appeals in Martin Marietta and Ortega. In doing so, the Colorado Supreme Court relied extensively on the U.S. Supreme Court ("Court") decision in Budinich v. Becton Dickinson & Co.(fn5)
Budinich was commenced in a Colorado District Court, then removed to the U.S. District Court for the District of Colorado. It was later appealed to the U.S. Circuit Court of Appeals for the Tenth Circuit. The Court granted certiorari to resolve a conflict among the federal circuits concerning the issue of whether a judgment on the merits can be appealed when issues regarding attorney fees remain undecided in the trial court.
Before Budinich, the majority of the U.S. Circuit Courts of Appeals (known as the "bright-line" circuits) held that a judgment was final for purposes of appeal even though attorney fee issues remained pending in the trial court. A minority of the circuits (known as "collateral/integral" circuits) held that a judgment on the merits was final for appeal purposes only if the undecided issues involving attorney fees were collateral to the relief requested. In a "collateral/integral" circuit, the practitioner and the trial court had to make an educated guess as to whether the issue of attorney fees was collateral to or an...
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