American rule in Colorado

2016Here, neither the trial court nor the jury made an express finding of 1991) (“Consolidation does not merge the consolidated actions into a single action.”); see also Marvin Johnson, P.C. v. Myers, 907 P.2d 67, 71 (Ariz. 1995) (“[I]f a tort action is consolidated with a probate proceeding, the parties to that tort action are entitled to all the rights they would have had under the Rules of Civil Procedure or otherwise, just as though the action had been consolidated with another tort action.”). 4 The American rule “requires each party in a lawsuit to bear its own legal expenses.” Bernhard, 915

2016Here, neither the trial court nor the jury made an express finding of 1991) (“Consolidation does not merge the consolidated actions into a single action.”); see also Marvin Johnson, P.C. v. Myers, 907 P.2d 67, 71 (Ariz. 1995) (“[I]f a tort action is consolidated with a probate proceeding, the parties to that tort action are entitled to all the rights they would have had under the Rules of Civil Procedure or otherwise, just as though the action had been consolidated with another tort action.”). 4 The American rule “requires each party in a lawsuit to bear its own legal expenses.” Bernhard, 915

2003Under the well-established American rule, costs, like attorney fees, generally are not considered actual damages "because they are not the legitimate consequences of the tort or breach of contract sued upon." Bunnett v. Smallwood, 793 P.2d 157, 160 (Colo.1990)(quoting Taxpayers for Animas-La Plata Referendum v. Animas-La Plata Water Conservancy Dist., 739 F.2d 1472 , 1480 (10th Cir.1984)).

2003Under the well-established American rule, costs, like attorney fees, generally are not considered actual damages "because they are not the legitimate consequences of the tort or breach of contract sued upon." Bunnett v. Smallwood, 793 P.2d 157, 160 (Colo.1990)(quoting Taxpayers for Animas-La Plata Referendum v. Animas-La Plata Water Conservancy Dist., 739 F.2d 1472 , 1480 (10th Cir.1984)).

2000See Fogerty v. Fantasy, Inc., 510 U.S. 517 , 114 S.Ct. 10233 , 127 L.Ed.2d 455 (1994); Bernhard v. Farmers Insurance Exchange, 915 P.2d 1285 (Colo.1996).

2000See Fogerty v. Fantasy, Inc., 510 U.S. 517 , 114 S.Ct. 10233 , 127 L.Ed.2d 455 (1994); Bernhard v. Farmers Insurance Exchange, 915 P.2d 1285 (Colo.1996).

2026A. Relevant Legal Principles ¶ 13 Although “Colorado courts follow the American rule, which requires parties to a lawsuit to pay their own legal expenses,” there is an exception “if the parties agree, in a contract clause known as a fee-shifting provision, that the prevailing party will be entitled to recover its attorney fees.” S. Colo. Orthopaedic Clinic Sports Med. & Arthritis Surgeons, P.C. v. Weinstein, 2014 COA 171, ¶ 10 . ¶ 14 We generally review a trial court’s decision to award attorney fees for an abuse of discretion, such that we won’t reverse the decision unless it is manifestly ar

2026A. Relevant Legal Principles ¶ 13 Although “Colorado courts follow the American rule, which requires parties to a lawsuit to pay their own legal expenses,” there is an exception “if the parties agree, in a contract clause known as a fee-shifting provision, that the prevailing party will be entitled to recover its attorney fees.” S. Colo. Orthopaedic Clinic Sports Med. & Arthritis Surgeons, P.C. v. Weinstein, 2014 COA 171, ¶ 10 . ¶ 14 We generally review a trial court’s decision to award attorney fees for an abuse of discretion, such that we won’t reverse the decision unless it is manifestly ar

2014See Buder, 774 P.2d at 1390-91 ; Smith, 30 P.3d at 733 ; Stevens, 874 P.2d at 497-98 . 5 III, Conclusion 1 29 Because the cireumstances of this case do not fit within the breach of trust exception to the American rule, the district court erred when it denied Ms. Cedarblade's motion for directed verdict and allowed the jury to award attorney fees to plaintiffs.

2014See Buder, 774 P.2d at 1390-91 ; Smith, 30 P.3d at 733 ; Stevens, 874 P.2d at 497-98 . 5 III, Conclusion 1 29 Because the cireumstances of this case do not fit within the breach of trust exception to the American rule, the district court erred when it denied Ms. Cedarblade's motion for directed verdict and allowed the jury to award attorney fees to plaintiffs.

1996Exceptions to the American rule recognized in Colorado include those based on: the "common fund” doctrine, County Workers Compensation Pool v. Davis, 817 P.2d 521 (Colo.1991); a parly’s bad faith and lack of candor in dealing with the court, Johnston v. District Court, 196 Colo. 1 , 580 P.2d 798 (1978); breach of fiduciary duty or breach of trust, Buder v. Sartore, 774 P.2d 1383 (Colo.1989); Heller v. First Nat’l Bank, N.A., 657 P.2d 992 (Colo.App.1982); and a party’s wrongful act proximately causing the wronged party to become engaged in litigation with others, Publix Cab Co. v. Colorado Nat’

1996Exceptions to the American rule recognized in Colorado include those based on: the "common fund” doctrine, County Workers Compensation Pool v. Davis, 817 P.2d 521 (Colo.1991); a parly’s bad faith and lack of candor in dealing with the court, Johnston v. District Court, 196 Colo. 1 , 580 P.2d 798 (1978); breach of fiduciary duty or breach of trust, Buder v. Sartore, 774 P.2d 1383 (Colo.1989); Heller v. First Nat’l Bank, N.A., 657 P.2d 992 (Colo.App.1982); and a party’s wrongful act proximately causing the wronged party to become engaged in litigation with others, Publix Cab Co. v. Colorado Nat’

1991Colorado courts have noted a limited number of exceptions to the application of the “American rule.” See Buder v. Sartore, 774 P.2d 1383 (Colo.1989) (action for breach of fiduciary duty); Denver Ass’n for Retarded Children, Inc. v. School District No. 1, 188 Colo. 310 , 535 P.2d 200 *1062 (1975) (obdurate behavior, common funds, and private attorney general exceptions); International State Bank v. Trinidad Bean & Elevator Co., 79 Colo. 286 , 245 P. 489 (1926) (action for wrongful precipitation of separate litigation with others); Bernstein v. Simon, 77 Colo. 193 , 235 P. 375 (1925) (malicious

1991Colorado courts have noted a limited number of exceptions to the application of the “American rule.” See Buder v. Sartore, 774 P.2d 1383 (Colo.1989) (action for breach of fiduciary duty); Denver Ass’n for Retarded Children, Inc. v. School District No. 1, 188 Colo. 310 , 535 P.2d 200 *1062 (1975) (obdurate behavior, common funds, and private attorney general exceptions); International State Bank v. Trinidad Bean & Elevator Co., 79 Colo. 286 , 245 P. 489 (1926) (action for wrongful precipitation of separate litigation with others); Bernstein v. Simon, 77 Colo. 193 , 235 P. 375 (1925) (malicious

2016Co., 819 P.2d 1060, 1061 (Colo. App. 1991) (“The ‘American rule’ follows a general policy of disallowing taxation of attorney fees against a losing party and in favor of a prevailing party to litigation.”). 15 a breach of trust by defendant.

2016Co., 819 P.2d 1060, 1061 (Colo. App. 1991) ("The 'American rule’ follows a general policy of disallowing taxation of attorney .fees against a losing party and in favor of a prevailing party to litigation.”).

2016Baker Botts L.L.P. v. ASARCO LLC , 576 U.S. ___ , ___, 135 S. Ct. 2158, 2161 (2015).

2016Baker Botts L.L.P. v. ASARCO LLC, 576 U.S. —, —, 135 S.Ct. 2158, 2161 , 192 L.Ed.2d 208 (2015).

2014See Buder, 774 P.2d at 1390-91 ; Smith, 30 P.3d at 733 ; Stevens, 874 P.2d at 497-98 . 5 III, Conclusion 1 29 Because the cireumstances of this case do not fit within the breach of trust exception to the American rule, the district court erred when it denied Ms. Cedarblade's motion for directed verdict and allowed the jury to award attorney fees to plaintiffs.

2014See Buder, 774 P.2d at 1390-91 ; Smith, 30 P.3d at 733 ; Stevens, 874 P.2d at 497-98 . 5 III, Conclusion 1 29 Because the cireumstances of this case do not fit within the breach of trust exception to the American rule, the district court erred when it denied Ms. Cedarblade's motion for directed verdict and allowed the jury to award attorney fees to plaintiffs.

2026See 1046 Munras Props., L.P. v. Kabod Coffee, 2025 COA 71, ¶ 23 .

2026See 1046 Munras Props., L.P. v. Kabod Coffee, 2025 COA 71, ¶ 23 .

2026Instead, it is only “an acknowledgement that the litigation costs incurred by a party in [a] separate litigation may sometimes be an appropriate measure of compensatory damages against another party.” Id. ¶ 14 Specifically, reasonable litigation costs and attorney fees may be recovered as damages from a third-party wrongdoer “[w]hen the natural and probable consequence of a wrongful act has been to involve [the party seeking the damages] in litigation with others.” Elijah v. Fender, 674 P.2d 946, 951 (Colo. 1984) (quoting Int’l State Bank of Trinidad v. Trinidad Bean & Elevator Co., 245 P. 489

2026Instead, it is only “an acknowledgement that the litigation costs incurred by a party in [a] separate litigation may sometimes be an appropriate measure of compensatory damages against another party.” Id. ¶ 14 Specifically, reasonable litigation costs and attorney fees may be recovered as damages from a third-party wrongdoer “[w]hen the natural and probable consequence of a wrongful act has been to involve [the party seeking the damages] in litigation with others.” Elijah v. Fender, 674 P.2d 946, 951 (Colo. 1984) (quoting Int’l State Bank of Trinidad v. Trinidad Bean & Elevator Co., 245 P. 489

2025Anderson v. Pursell, 244 P.3d 1188, 1194 (Colo. 2010). ¶ 54 Colorado follows the American rule, which requires each party in a lawsuit to bear its own attorney fees.

2025Anderson v. Pursell, 244 P.3d 1188, 1194 (Colo. 2010). ¶ 54 Colorado follows the American rule, which requires each party in a lawsuit to bear its own attorney fees.

2025For this reason, we break no new legal ground in observing that “[c]ontractual fee-shifting provisions are generally valid under Colorado law.” Morris v. Belfor USA Grp., Inc., 201 P.3d 1253, 1260 (Colo. App. 2008). ¶2 But this is the first published case in Colorado to consider whether a prevailing party may recover, under a contractual fee- shifting provision, the attorney fees it incurred to enforce such provision, known as “fees on fees.” Although a division of this court has addressed whether a party awarded fees under section 13-17-102, C.R.S. 2024, is “automatically entitled to recover

2025For this reason, we break no new legal ground in observing that “[c]ontractual fee-shifting provisions are generally valid under Colorado law.” Morris v. Belfor USA Grp., Inc., 201 P.3d 1253, 1260 (Colo. App. 2008). ¶2 But this is the first published case in Colorado to consider whether a prevailing party may recover, under a contractual fee- shifting provision, the attorney fees it incurred to enforce such provision, known as “fees on fees.” Although a division of this court has addressed whether a party awarded fees under section 13-17-102, C.R.S. 2024, is “automatically entitled to recover

2016Here, neither the trial court nor the jury made an express finding of 1991) (“Consolidation does not merge the consolidated actions into a single action.”); see also Marvin Johnson, P.C. v. Myers, 907 P.2d 67, 71 (Ariz. 1995) (“[I]f a tort action is consolidated with a probate proceeding, the parties to that tort action are entitled to all the rights they would have had under the Rules of Civil Procedure or otherwise, just as though the action had been consolidated with another tort action.”). 4 The American rule “requires each party in a lawsuit to bear its own legal expenses.” Bernhard, 915

2016Here, neither the trial court nor the jury made an express finding of 1991) (“Consolidation does not merge the consolidated actions into a single action.”); see also Marvin Johnson, P.C. v. Myers, 907 P.2d 67, 71 (Ariz. 1995) (“[I]f a tort action is consolidated with a probate proceeding, the parties to that tort action are entitled to all the rights they would have had under the Rules of Civil Procedure or otherwise, just as though the action had been consolidated with another tort action.”). 4 The American rule “requires each party in a lawsuit to bear its own legal expenses.” Bernhard, 915

2015Exch., 915 P.2d 1285, 1287 (Colo.1996) ("[The American rule ... requires each party in a lawsuit to bear its own legal expenses."). {16 The district court also addressed Marks' contention that she was entitled to costs and attorney fees under Colorado Republican Party v. Benefield (Benefield I), 337 P.3d 1199, 1207 (Colo.App.2011), because she was the "prevailing applicant" under subsection (5).

2015Exch., 915 P.2d 1285, 1287 (Colo.1996) ("[The American rule ... requires each party in a lawsuit to bear its own legal expenses."). {16 The district court also addressed Marks' contention that she was entitled to costs and attorney fees under Colorado Republican Party v. Benefield (Benefield I), 337 P.3d 1199, 1207 (Colo.App.2011), because she was the "prevailing applicant" under subsection (5).

2014In re Estate of Klarner, 113 P.3d 150, 157 (Colo.2005); First Citizens Bank & Trust Co., ¶35, 320 P.3d 406 .

2014In re Estate of Klarner, 113 P.3d 150, 157 (Colo.2005); First Citizens Bank & Trust Co., ¶35, 320 P.3d 406 .

2014Also, in dictum listing common-law exceptions to the American rule, the supreme court has described the exception as applying to "breach of fiduciary duty or breach of trust." Id. at 1287 n. 3 (emphasis added); see also Huizar, 52 P.3d at 821 n. 2.

2014Also, in dictum listing common-law exceptions to the American rule, the supreme court has described the exception as applying to "breach of fiduciary duty or breach of trust." Id. at 1287 n. 3 (emphasis added); see also Huizar, 52 P.3d at 821 n. 2.

2013It reasoned that because New York law was unsettled on the issue of liability for fees defending against federal securities law claims, it was "relue-tant to imply a result under that law which would conflict with the general 'American rule' against awarding fees against a losing party." Id. 119 In the instant case, our court of appeals relied in part on Pioneer Constructors v. Symes, 77 Ariz. 107 , 267 P.2d 740, 744 (1954), as the "leading case" on the method of apportionment the court ultimately chose to adopt.

2013It reasoned that because New York law was unsettled on the issue of liability for fees defending against federal securities law claims, it was "relue-tant to imply a result under that law which would conflict with the general 'American rule' against awarding fees against a losing party." Id. 119 In the instant case, our court of appeals relied in part on Pioneer Constructors v. Symes, 77 Ariz. 107 , 267 P.2d 740, 744 (1954), as the "leading case" on the method of apportionment the court ultimately chose to adopt.