Chapter 18 - § 18.6 • ATTORNEY FEES FOR WRONGFUL ACTS

• Jurisdiction: Colorado

§ 18.6 • ATTORNEY FEES FOR WRONGFUL ACTS

When the natural and probable consequence of a party's wrongful act has been to involve a plaintiff in litigation with others, the general rule is that reasonable expenses of litigation may be recovered from the wrongdoer.⁶³ In 1984, the Colorado Supreme Court decided a case in which the principals of a broker were entitled to attorney fees incurred in a quiet title action because the suit arose from the broker's breach of fiduciary duty to his principals.⁶⁴ The court stated that the natural and probable consequence of the broker's wrongful act was to involve the principals in litigation, thus the general rule was applicable and the wrongdoer was responsible for the reasonable expenses of litigation.⁶⁵

The Colorado Supreme Court, in Elijah v. Fender, clarified that, contrary to the Colorado Court of Appeals' reading of its decision in McNeill v. Allen,⁶⁶ a party need not be a defendant in prior litigation to recover attorney fees under the wrongful act doctrine, reasoning that a "party may be placed in a position of having to bring suit as plaintiff to defend his rights. A quiet title action is an obvious example."⁶⁷

In 1993, the Colorado Court of Appeals decided just the type of case the Elijah decision referred to. The case involved property owners who had entered into an agreement granting the co-owners a preemptive right to purchase the interests of any co-owner who desired to sell one of the land parcels. Parties to this agreement sought to quiet title to one of the parcels due to a co-owner's violation of the agreement.⁶⁸ The court held that the property owners were entitled to recover attorney fees incurred on their claims for quiet title and specific performance contained within the joint agreement because the wrongful acts of a third person required the plaintiffs to engage in separate litigation — the quiet title action — to protect or preserve their rights. But the court found, without elaborating, that the plaintiffs were not entitled to attorney fees incurred on their claim seeking damages for interference with the agreement because "absent circumstances not present [in Swartz], such damages do not include attorney fees incurred for asserting and proving [the interference with a contract] claim."⁶⁹ While the court did not elaborate, its reasoning may be that wrongful acts of the co-owner did not require that the plaintiffs assert the interference with a contract claim to protect their own rights.

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