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Second Regular Session
Sixty-first General Assembly
LLS NO. 980208.01 DFH
HOUSE BILL 981083
STATE OF COLORADO
BY REPRESENTATIVE Adkins;
also SENATOR Blickensderfer.
A BILL FOR AN ACT
CONCERNING THE PAYMENT OF LEGAL FEES IN CIVIL ACTIONS.
(Note: This summary applies to this bill as introduced
and does not necessarily reflect any amendments that may be subsequently
Replaces the "substantially frivolous, groundless, or vexatious" standard for awarding attorney fees in civil cases with a new standard. Under the new standard, a case shall be deemed to lack substantial justification and thus allow for attorney fee awards if:
$ The claim is presented for improper purpose, such as to harass or cause unnecessary delay or needless increase in the cost of litigation;
$ The claims, defenses, or legal contentions are not warranted by existing law or by a nonfrivolous argument for a change in the law or for establishment of new law;
$ The allegations and other factual contentions do not have evidentiary support or are unlikely to have evidentiary support after discovery; or
$ The denials of factual contention are not warranted by the evidence or are not reasonably based on a lack of information or belief.
Requires that reasonable attorney fees be awarded to a party who makes a written settlement offer that is rejected, and the court ultimately enters a judgment that is less favorable than the rejected settlement offer. Provides that fees awarded shall be calculated from the date of the first settlement offer that is not less favorable than the judgment. Excludes cases involving domestic matters, juvenile matters brought under the "Colorado Children's Code", and traffic offenses from this requirement.
Defines what constitutes a judgment that is less
favorable than a rejected settlement offer. Sets forth a time
frame for the making and acceptance of written settlement offers.
States how awards of attorney fees may be allocated among multiple
parties. Specifies how awards of attorney fees are calculated.
Sets forth factors that justify a court's action to vary the
amount of attorney fees awarded. States that fees in contingency
fee cases shall be calculated on the basis of a reasonable hourly
Be it enacted by the General Assembly of the State of Colorado:
SECTION 1. 1317102, Colorado Revised Statutes, is amended to read:
1317102. Attorney fees. (1) Subject to the provisions of this section, in any civil action of any nature commenced or appealed in any court of record in this state, the court may award, except as this article otherwise provides, as part of its judgment and in addition to any costs otherwise assessed, reasonable attorney fees.
(2) (a) Subject to the limitations set forth elsewhere in this article, in any civil action of any nature commenced or appealed in any court of record in this state, the court shall award, by way of judgment or separate order, reasonable attorney fees against any attorney or party who has brought or defended a civil action, either in whole or in part, that the court determines lacked substantial justification.
(b) FOR PURPOSES OF THIS SECTION, A CIVIL ACTION, IN WHOLE OR IN PART, SHALL BE DEEMED TO LACK SUBSTANTIAL JUSTIFICATION IF EITHER:
(I) IT IS BEING PRESENTED FOR ANY IMPROPER PURPOSE, SUCH AS TO HARASS OR TO CAUSE UNNECESSARY DELAY OR A NEEDLESS INCREASE IN THE COST OF LITIGATION; OR
(II) THE CLAIMS, DEFENSES, AND OTHER LEGAL CONTENTIONS MADE IN PURSUIT OF THE CLAIMS OR DEFENSES ARE NOT WARRANTED BY EXISTING LAW OR BY A NONFRIVOLOUS ARGUMENT FOR THE EXTENSION, MODIFICATION, OR REVERSAL OF EXISTING LAW OR FOR THE ESTABLISHMENT OF NEW LAW; OR
(III) THE ALLEGATIONS AND OTHER FACTUAL CONTENTIONS DO NOT HAVE EVIDENTIARY SUPPORT OR ARE UNLIKELY TO HAVE EVIDENTIARY SUPPORT AFTER A REASONABLE OPPORTUNITY FOR FURTHER INVESTIGATION OR DISCOVERY; OR
(IV) THE DENIALS OF FACTUAL CONTENTIONS ARE NOT WARRANTED BY THE EVIDENCE OR ARE NOT REASONABLY BASED ON A LACK OF INFORMATION OR BELIEF.
(2.1) Notwithstanding any other provision of this part 1, the filing of a certificate of review pursuant to section 1320602 related to any licensed health care professional shall create a rebuttable presumption that the claim or action is not frivolous or groundless, but it shall not relieve the plaintiff or his OR HER attorney from ongoing obligations under rule 11 of Colorado rules of civil procedure.
(3) When a court determines that reasonable attorney fees should be assessed, it shall allocate the payment thereof among the offending attorneys and parties, jointly or severally, as it deems most just, and may charge such amount, or portion thereof, to any offending attorney or party.
(4) The court shall assess attorney fees
if, upon the motion of any party or the court itself, it finds
that an attorney or party brought or defended an action, or any
part thereof, that lacked substantial justification or that the
action, or any part thereof, was interposed for delay or harassment
or if it finds that an attorney or party unnecessarily expanded
the proceeding by other improper conduct, including, but not limited
to, abuses of discovery procedures available under the Colorado
rules of civil procedure or a designation by a defending party
under section 1321111.5 (3) that lacked substantial
As used in this article,
"lacked substantial justification" means substantially
frivolous, substantially groundless, or substantially vexatious.
(5) No attorney fees shall be assessed if, after filing suit, a voluntary dismissal is filed as to any claim or action within a reasonable time after the attorney or party filing the dismissal knew, or reasonably should have known, that he OR SHE would not prevail on said claim or action.
(6) No party who is appearing without
an attorney shall be assessed attorney fees unless the court finds
that the party clearly knew or reasonably should have known that
his OR HER action or defense, or any part thereof,
substantially frivolous, substantially groundless, or substantially
vexatious LACKED SUBSTANTIAL JUSTIFICATION;
except that this subsection (6) shall not apply to situations
in which an attorney licensed to practice law in this state is
appearing without an attorney, in which case, he
SUCH ATTORNEY shall be held to the standards established for attorneys
elsewhere in this article.
(7) No attorney or party shall be assessed
attorney fees as to any claim or defense
THAT the court determines was asserted by said attorney or party
in a good faith attempt to establish a new theory of law in Colorado.
(8) The provisions of this section shall not apply to traffic offenses, matters brought under the provisions of the "Colorado Children's Code", title 19, C.R.S., or related juvenile matters, or matters involving violations of municipal ordinances.
SECTION 2. Part 2 of article 17 of title 13, Colorado Revised Statutes, is amended BY THE ADDITION OF A NEW SECTION to read:
1317204. Award of attorney fees following settlement offer.
(1) EXCEPT FOR CASES COMMENCED UNDER TITLE 14, 19, OR 42, C.R.S., AND EXCEPT AS PROVIDED IN PARAGRAPH (b) OF SUBSECTION (6) OF THIS SECTION, IN ANY CIVIL ACTION COMMENCED OR APPEALED IN ANY COURT OF RECORD IN THIS STATE, REASONABLE ATTORNEY FEES SHALL BE AWARDED TO A PARTY MAKING A WRITTEN SETTLEMENT OFFER:
(a) IF THE OTHER PARTY HAS REJECTED THE WRITTEN SETTLEMENT OFFER MADE EITHER SIX MONTHS OR MORE AFTER A COMPLAINT IS SERVED UPON THAT PARTY OR NINETY DAYS OR MORE AFTER A CASE IS AT ISSUE, WHICHEVER OCCURS FIRST, AND A JUDGMENT IS ENTERED THAT IS LESS FAVORABLE TO THE OTHER PARTY THAN THE REJECTED SETTLEMENT OFFER; OR
(b) IN CASES THAT ARE SET TO BE TRIED WITHIN THIRTY DAYS AFTER THE DATE THE COMPLAINT IS FILED, IF THE OTHER PARTY HAS REJECTED A WRITTEN SETTLEMENT OFFER MADE AT ANY TIME PRIOR TO TRIAL, AND A JUDGMENT IS ENTERED THAT IS LESS FAVORABLE TO THE OTHER PARTY THAN THE REJECTED SETTLEMENT OFFER.
(2) IF THE JUDGMENT AWARDS EQUITABLE RELIEF ONLY, ATTORNEY FEES SHALL BE AWARDED TO A PARTY MAKING A WRITTEN SETTLEMENT OFFER IF THE COURT DETERMINES THAT, TAKING INTO ACCOUNT BOTH MONETARY RELIEF AND EQUITABLE RELIEF, THE JUDGMENT IS SUBSTANTIALLY LESS FAVORABLE TO THE REJECTING PARTY THAN THE WRITTEN SETTLEMENT OFFER.
(3) (a) FOR PURPOSES OF THIS SECTION, A JUDGMENT SHALL BE CONSIDERED LESS FAVORABLE IN ACCORDANCE WITH THE FOLLOWING:
(I) IF A PLAINTIFF MAKES A WRITTEN SETTLEMENT OFFER THAT IS REJECTED BY THE DEFENDANT AND THE JUDGMENT ENTERED IS IN AN AMOUNT THAT IS NOT LESS THAN NINETY PERCENT OF THE SETTLEMENT OFFER, THE DEFENDANT SHALL BE DEEMED TO HAVE RECEIVED A LESS FAVORABLE JUDGMENT.
(II) IF A DEFENDANT MAKES A WRITTEN SETTLEMENT OFFER THAT IS REJECTED BY THE PLAINTIFF AND THE JUDGMENT ENTERED DOES NOT EXCEED THE AMOUNT OF THE REJECTED SETTLEMENT OFFER BY TEN PERCENT OR MORE, THE PLAINTIFF SHALL BE DEEMED TO HAVE RECEIVED A LESS FAVORABLE JUDGMENT, UNLESS THE JUDGMENT IS EQUAL TO OR GREATER THAN THE DOLLAR AMOUNT OF THE CLAIM IF STATED IN THE COMPLAINT.
(b) FOR PURPOSES OF THIS SECTION, THE "JUDGMENT ENTERED" SHALL INCLUDE ASSESSABLE COSTS AND INTEREST CALCULATED TO THE DATE OF THE RECEIPT OF THE SETTLEMENT OFFER.
(4) (a) EXCEPT IN CASES THAT ARE SET TO BE TRIED WITHIN THIRTY DAYS AFTER THE DATE OF FILING THE COMPLAINT, A WRITTEN SETTLEMENT OFFER SHALL BE ACCEPTED IN WRITING WITHIN FIFTEEN DAYS AFTER RECEIPT THEREOF, OR SUCH OFFER IS DEEMED REJECTED.
(b) A WRITTEN SETTLEMENT OFFER IS DEEMED TO HAVE BEEN RECEIVED UPON DELIVERY TO A PARTY OR HIS OR HER ATTORNEY EITHER BY HAND, VIA FACSIMILE, OR UPON THE EXPIRATION OF THREE DAYS AFTER DEPOSIT WITH THE UNITED STATES POSTAL SERVICE BY FIRSTCLASS MAIL.
(5) THE COURT MAY ALLOCATE AN AWARD OF ATTORNEY FEES AGAINST THE PARTY AND THE ATTORNEY REPRESENTING THE PARTY. IN ACTIONS INVOLVING MULTIPLE PARTIES, THE COURT SHALL ALLOCATE ATTORNEY FEES BETWEEN OR AMONG THE PARTIES REQUIRED TO PAY SUCH FEES IN PROPORTION TO THEIR RESPECTIVE SHARE OF THE FINAL JUDGMENT AWARDED. THE COURT, TO THE EXTENT REASONABLY POSSIBLE, SHALL MATCH WRITTEN SETTLEMENT OFFERS TO JUDGMENTS OR APPORTIONED JUDGMENTS IN A MANNER CONSISTENT WITH THE STANDARDS SET FORTH IN THIS SECTION.
(6) (a) IN ANY ACTION REQUIRING AN AWARD OF ATTORNEY FEES PURSUANT TO THIS SECTION, THE COURT MAY AWARD LESS THAN THE FULL AMOUNT OF ATTORNEY FEES REQUIRED ONLY IF, UPON CONSIDERATION OF THE FACTORS LISTED BELOW, THE COURT DETERMINES A VARIATION IS WARRANTED:
(I) THE COMPLEXITY OF THE LITIGATION;
(II) THE LENGTH OF THE TRIAL;
(III) THE REASONABLENESS OF THE ATTORNEYS' HOURLY RATES AND THE NUMBER OF HOURS EXPENDED;
(IV) THE REASONABLENESS OF THE NUMBER OF ATTORNEYS USED;
(V) THE ATTORNEYS' EFFORTS TO MINIMIZE FEES;
(VI) THE REASONABLENESS OF THE CLAIMS AND DEFENSES PURSUED BY EACH SIDE;
(VII) VEXATIOUS OR BAD FAITH CONDUCT;
(VIII) THE RELATIONSHIP BETWEEN THE AMOUNT OF WORK PERFORMED AND THE SIGNIFICANCE OF THE MATTERS AT STAKE;
(IX) THE EXTENT TO WHICH THE FEES INCURRED BY THE PREVAILING PARTY SUGGEST THAT THE PREVAILING PARTY HAD BEEN INFLUENCED BY OTHER CONSIDERATIONS, SUCH AS A DESIRE TO DISCOURAGE CLAIMS BY OTHERS AGAINST THE PREVAILING PARTY OR ITS INSURER; AND
(X) OTHER EQUITABLE FACTORS DEEMED RELEVANT.
(b) IN ANY ACTION REQUIRING AN AWARD OF ATTORNEY FEES PURSUANT TO THIS SECTION, THE COURT MAY DECLINE TO AWARD ANY ATTORNEY FEES REQUIRED ONLY IF THE COURT MAKES A SPECIFIC FINDING THAT THE AWARD OF ATTORNEY FEES WOULD BE SO ONEROUS TO THE NONPREVAILING PARTY THAT IT WOULD DETER SIMILARLY SITUATED LITIGANTS FROM THE VOLUNTARY USE OF THE COURTS.
(c) IF THE COURT VARIES AN AWARD OF ATTORNEY FEES PURSUANT TO PARAGRAPH (a) OF THIS SUBSECTION (6) OR DECLINES TO AWARD ANY ATTORNEY FEES PURSUANT TO PARAGRAPH (b) OF THIS SUBSECTION (6), THE COURT SHALL MAKE A SPECIFIC WRITTEN FINDING EXPLAINING THE REASONS FOR THE VARIATION OR DECLINATION.
(7) (a) ATTORNEY FEES AWARDED PURSUANT TO THIS SECTION SHALL BE CALCULATED FROM THE DATE OF RECEIPT OF THE FIRST WRITTEN SETTLEMENT OFFER THAT IS NOT LESS FAVORABLE THAN THE JUDGMENT. THE COURT, OR A MASTER APPOINTED BY THE COURT, SHALL DETERMINE THE AMOUNT OF ATTORNEY FEES AND COSTS TO BE ASSESSED AGAINST THE REJECTING PARTY.
(b) IN ANY PROCEEDING TO DETERMINE THE REASONABLENESS OF ATTORNEY FEES REQUESTED, THE PREVAILING PARTY SHALL BE AWARDED COSTS AND ATTORNEY FEES, INCLUDING THE COSTS OF THE MASTER, INCURRED IN CONNECTION WITH SAID PROCEEDING. FEES IN CONTINGENCY CASES SHALL BE CALCULATED ON THE BASIS OF A REASONABLE HOURLY RATE.
(8) ANY AMOUNTS AWARDED UNDER THIS SECTION MAY BE OFFSET AGAINST ANY OTHER AWARDS ARISING OUT OF THE SAME ACTION.
(9) IN THE EVENT ANY OTHER PROVISION OF LAW PROVIDES FOR AN AWARD OF ATTORNEY FEES TO THE PREVAILING PARTY, TO THE EXTENT THERE IS A CONFLICT BETWEEN THAT PROVISION AND THIS SECTION, THE OTHER PROVISION OF LAW SHALL CONTROL.
SECTION 3. Effective
date. This act shall take effect at 12:01 a.m. on the day
following the expiration of the ninetyday period after final
adjournment of the general assembly that is allowed for submitting
a referendum petition pursuant to article V, section 1 (3) of
the state constitution; except that, if a referendum petition
is filed against this act or an item, section, or part of this
act within such period, then the act, item, section, or part,
if approved by the people, shall take effect on the date of the
official declaration of the vote thereon by proclamation of the