Chapter 4 - § 4.7 • ATTORNEY FEES AS DAMAGES

• Jurisdiction: Colorado

§ 4.7 • ATTORNEY FEES AS DAMAGES

Attorney fees may be recovered if provided for by statute, rule, or contract, and in some circumstances, as the legitimate consequence of the breach of a tort duty.¹⁷² One who, because of the tort of another, is required to act to protect his or her interests by bringing or defending an action against a third person, is entitled to recover reasonable compensation for the resulting loss of time, attorney fees, and other expenses incurred in the action against the third party.¹⁷³ Classification of attorney fees as costs or damages is a fact-sensitive inquiry and generally rests in the sound discretion of the trial court.¹⁷⁴ Under CDARA II, attorney fees and costs awards are deemed part of a claimant's recoverable "actual damages."¹⁷⁵ For discussion of recovering attorney fees under CDARA II, see "Costs and Attorney Fees," in § 2.2.2.

Under a "prevailing party" contract clause, the prevailing party is a party in whose favor liability is resolved, sometimes even where actual damages are not awarded.¹⁷⁶ An attorney fees award is not limited by the amount of the judgment, but the fees award must be reasonable.¹⁷⁷ Generally, if the trial court is asked to determine the fees award as an element of a party's damages, costs, or otherwise, it should make an initial estimate of a reasonable award by calculating the "lodestar" amount, equal to the number of hours reasonably expended multiplied by a reasonable hourly rate. The trial court then has discretion to adjust the lodestar amount by applying various factors.¹⁷⁸ However, if the jury is asked to determine the value of the fees as part of a damages claim, general evidentiary rules should govern the admissibility of evidence of such value, and the lodestar methodology may not control.¹⁷⁹

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Notes:

^[172] See Bunnett v. Smallwood, 793 P.2d 157, 160 (Colo. 1990) (statute, rule, or contract); Ferrell v. Glenwood Brokers, Ltd., 848 P.2d 936, 941 (Colo. 1993) (attorney fees may be recoverable as damages under legitimate consequences doctrine).

^[173] See Restatement (Second) of Torts § 914(2) (1979), cited with approval in Brochner v. W. Ins. Co., 724 P.2d 1293, 1299 (Colo. 1986); see also Int'l State Bank of Trinidad v. Trinidad Bean & Elevator Co., 245 P. 489, 489 (Colo. 1926); Rocky Mountain Festivals, Inc. v. Parsons Corp., 242 P.3d 1067, 1074 (Colo. 2010) (plaintiff's partial liability with respect to "distinct and segregable" claims in underlying suit did not preclude it pursuing...