Colorado Court Affirms Attorneys’ Fee Award Against Plaintiff’s Counsel For Pursuing Unsupported CCPA Claims

The Colorado Court of Appeals recently affirmed a trial court’s award of more than $241,000 in attorney fees against a plaintiffs’ attorney who continued to pursue unsupported claims arising out of a residential construction dispute. Although the opinion was not selected for official publication under C.A.R. 35(e) and therefore has no precedential value, it nevertheless provides an instructive reminder that Colorado courts are willing to impose significant financial consequences when claims lack substantial justification.

For builders, developers, contractors, insurers, and defense counsel, the case is worth reading, not because it announces new law, but because it demonstrates that Colorado’s fee-shifting statute remains a meaningful tool when unsupported claims continue long after they should have been abandoned.

The case arose from a residential siding dispute involving claims for breach of contract, negligence, negligence per se, breach of warranty, Colorado Consumer Protection Act (“CCPA”) violations, and mechanic’s lien issues. As the litigation progressed, the district court granted summary judgment on certain claims, directed verdicts on others, and the jury ultimately found in favor of the contractor.

Following trial, the contractor sought attorney fees under C.R.S. § 13-17-102. The district court carefully limited the recoverable fees to the period during which particular claims became unjustifiable and awarded $241,934.50 against plaintiffs’ counsel and his law firm. The Court of Appeals affirmed.

The appellate court agreed that the CCPA claim lacked substantial justification because the plaintiff failed to produce evidence of the statute’s required “significant public impact” element. Evidence consisting primarily of statements on the contractor’s website and a customer list did not establish that consumers actually relied upon or were affected by the alleged misrepresentations.

Note that violations of the CCPA, if found by the finder of fact, provide for treble damages, plus attorneys’ fees and litigation costs. The risk of these “enhanced damages” provides leverage used by plaintiffs’ attorneys to extort settlements. This makes CCPA claims extremely valuable to plaintiffs’ attorneys, those the “public impact” standard has been a stumbling block in recent years.

Perhaps this is why plaintiffs’ attorneys have lobbied the Colorado legislature so hard to remove the “public impact” standard as an element of the claim. See S.B. 11-068, H.B. 19-1289, as introduced, H.B. 23-1192, as introduced, H.B. 24-1014, S.B. 25-157. I assume plaintiffs’ attorneys will push this issue again in future years. I hope, when they do, that when asked why the public impact element should be removed, someone is honest enough to say: “because we risk having to pay attorneys’ fees for frivolous litigation if it remains.”

The most significant lesson is procedural rather than substantive. Lawyers have a continuing obligation to reevaluate claims as discovery progresses and facts develop. Claims that may initially appear viable can become unsupported. Likewise, defense counsel should continually assess whether the record supports a motion under C.R.S. § 13-17-102.

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