HomeMy WebLinkAbout2018CV149 - SUTHERLAND V. CITY OF FORT COLLINS, STEVE MILLER & IRENE JOSEY - 113 - ORDER GRANTING FORT COLLINS' MOTION FOR ATTORNEY'S FEES AND BILL OF COSTS1
District Court, Larimer County, State of Colorado
201 LaPorte Avenue, Suite 100
Fort Collins, CO 80521-2761
(970) 494-3500
▲ COURT USE ONLY ▲
Plaintiff:
Eric Sutherland
v.
Defendants:
The City of Fort Collins, et al.
Case Number: 2018CV149
Courtroom: 5B
ORDER GRANTING FORT COLLINS’S MOTION FOR ATTORNEYS’ FEES AND
BILL OF COSTS
The Court has reviewed The City of Fort Collins’s Motion for Attorneys’ Fees
and Bill of Costs, dated September 26, 2018. The Court held a hearing on this motion on
March 15, 2019. Having reviewed the motion, response, reply, exhibits, and applicable
law, the court finds and orders as follows.
On April 26, 2018, Eric Sutherland filed a Complaint for Declaratory Judgment
and Equitable Relief. Plaintiff sought a declaratory judgment from the Court finding
that bonds issued by the Fort Collins Electric Utility Enterprise Board (“EUEB”) were
invalid.
On September 5, 2018, this Court dismissed all of Plaintiff’s claims against the
City of Fort Collins, Steve Miller, and Irene Josey. The City of Fort Collins now seeks an
award of attorneys’ fees and costs pursuant to C.R.S. § 13-17-102.
I. Legal Standards
In a civil action, a court may award attorney fees if the opposing party “brought
or defended an action, or any part thereof, that lacked substantial justification.” C.R.S. §
13-17-102(4). An action “lacked substantial justification” if it was “substantially
frivolous, substantially groundless, or substantially vexatious.” Id. Attorney fees may
only be awarded against an unrepresented party when “the party clearly knew or
reasonably should have known that his action or defense, or any part thereof, was
DATE FILED: April 2, 2019
CASE NUMBER: 2018CV149
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substantially frivolous, substantially groundless, or substantially vexatious.” C.R.S. §
13-17-102(6).
“A claim is substantially frivolous if the proponent can present no rational
argument based on the evidence or law in support of that claim or defense.” City of
Aurora ex rel. Util. Enter. v. Colorado State Eng'r, 105 P.3d 595, 620 (Colo. 2005), as modified
on denial of reh'g (Feb. 14, 2005).
If a party “requests a hearing concerning the award of fees and costs… then the
district court must hold a hearing.” In re Marriage of Aldrich, 945 P.2d 1370, 1379–80
(Colo. 1997). If, however, a party objects to the amount of fees requested but does not
request a hearing, the court is not required to hold a hearing. Id.
When determining whether to award attorney fees and, if so, what amount to
award, the court examines a list of factors:
(a) The extent of any effort made to determine the validity of any action or claim
before said action or claim was asserted;
(b) The extent of any effort made after the commencement of an action to reduce
the number of claims or defenses being asserted or to dismiss claims or defenses
found not to be valid within an action;
(c) The availability of facts to assist a party in determining the validity of a claim
or defense;
(d) The relative financial positions of the parties involved;
(e) Whether or not the action was prosecuted or defended, in whole or in part, in
bad faith;
(f) Whether or not issues of fact determinative of the validity of a party's claim or
defense were reasonably in conflict;
(g) The extent to which the party prevailed with respect to the amount of and
number of claims in controversy;
(h) The amount and conditions of any offer of judgment or settlement as related
to the amount and conditions of the ultimate relief granted by the court.
C.R.S. § 13-17-103(1).
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II. Application of Law
1. Mr. Sutherland’s Action was Substantially Frivolous
Mr. Sutherland’s action was substantially frivolous for two principal reasons: (A)
Mr. Sutherland filed numerous “claims for relief” that were clearly not recognizable
legal claims; and (B) Mr. Sutherland brought this action knowing that he has not
suffered an injury and may never suffer an injury as a result of Defendants’ alleged
actions.
A. Claims for Relief
Mr. Sutherland’s claims four through eleven and fourteen through nineteen are
not recognizable claims for relief and, in some cases, not even complete sentences. For
example, the fourth claims states in full, “Poudre Valley Fire Protection District
agreement.” His fifth claim states in full, “Timnath Ranch agreement.” His sixth claims
states in full, “Timnath Farms Metropolitan districts agreement.”
Mr. Sutherland “reasonably should have known” that claims four through
eleven and fourteen through nineteen were substantially frivolous. See Pl.’s Resp. to
Fort Collins Mot. To Dismiss at 2 (Mr. Sutherland acknowledges that “Claims
numbered Fourteen through Nineteen… were not sufficiently expressed and should be
dismissed”). It was substantially frivolous for Mr. Sutherland to file claims that clearly
do not allege any recognizable claim for relief and, in some instances, contain nothing
more than the name of an agreement.
B. Injury-in-fact
Mr. Sutherland did not suffer any injury-in-fact, as required by Colorado
standing law, before he commenced this action. “To satisfy the injury-in-fact prong of
the Wimberly standing test (as set forth in Brotman), the injury must be direct and
palpable.” Olson, 53 P.3d at 750, citing Cloverleaf Kennel Club, Inc. v. Colorado Racing
Commission, 620 P.2d 1051 (Colo. 1980). Here, Mr. Sutherland’s claimed injury centers
on his beliefs that (1) Poudre School District will raise taxes in the future due to lost
revenue and (2) Fort Collins will raise electric rates in the future due to lost revenue.
Mr. Sutherland acknowledges that neither of these injuries are certain to occur and that
it cannot be known for some time whether they will come to pass. See, e.g., Response to
Fort Collins Mot. To Dismiss at 5. An injury that “cannot be determined until a remote
time in the future is not sufficiently direct and palpable to support a finding of injury-
in-fact.” Olson, 53 P.3d at 750. Mr. Sutherland reasonably should have known that it
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was substantially frivolous to file this action knowing that he had not suffered an
injury, as required by Colorado standing law.
C. Mr. Sutherland’s Arguments are not Persuasive
In his response, and at the hearing, Mr. Sutherland argued that his action was a
legitimate challenge to Fort Collins’s issuance of bonds. Mr. Sutherland argued that the
bonds issued by the EUEB were not issued by the Fort Collins City Council. Mr.
Sutherland argued that this violated Fort Collins’s own city charter. Mr. Sutherland
further argued that, in order to challenge the bonds, he was required to file a lawsuit
within 30 days. Mr. Sutherland argued that he had no way of knowing whether he
would suffer an injury within that 30-day limit, but that the law should be construed to
allow his suit to go forward despite the uncertainty of his injury. Mr. Sutherland
argued that, at the very least, his suit presented a novel legal theory and that it would
be improper to find that his action was substantially frivolous.
The Plaintiff’s arguments are not persuasive. The Court finds that Mr. Sutherland
is well-aware of the standing limits imposed by Colorado law. In fact, Mr. Sutherland
cited one principle standing case, Olson v. City of Golden, in his complaint. Compl. at
¶33. In fact, he testified at the hearing that he knew he may lack standing.
Therefore, Plaintiff was well-aware at the time he filed this lawsuit that he would
have standing only if he had suffered an injury-in-fact. Additionally, Plaintiff testified
that he has filed nine civil actions against the City of Fort Collins and other
governmental entities in northern Colorado. He admitted that he had not prevailed in
any of those lawsuits. He has had at least one lawsuit dismissed for lack of standing.1
This again shows that Plaintiff knew or should have known that he lacked standing to
bring the current suit.
Plaintiff’s argument that he asserted a novel theory of law is also not persuasive.
A generous reading of Plaintiff’s complaint shows that, out of the nineteen claims
asserted, only two are sufficiently pled. Plaintiff’s claims one and twelve arguably set
forth a claim for relief with the requisite specificity. Claim one is not applicable to the
City of Fort Collins. Claim twelve sets forth Plaintiff’s claim that the bonds issued by
the EUEB were not properly issued according to the Fort Collins City Charter. There is
no properly pled claim setting forth Plaintiff’s novel legal theory regarding standing.
Plaintiff has repeatedly characterized his claim as one for declaratory judgment. See,
1 2016CV235 Eric Sutherland v. Thompson School District R2-J.
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e.g., Pl.’s Resp. to Fort Collins’s Mot. to Dismiss at 4. However, Plaintiff never sought
declaratory judgment to reconcile the nonclaim statute with Colorado standing law.
Therefore, Court finds Plaintiff’s arguments unpersuasive. The Court finds that
Plaintiff knew or reasonably should have known that his lawsuit was substantially
frivolous.
2. C.R.S. § 13-17-103(1) Factors
The court further finds as follows:
A. Efforts made to determine the validity of the claims before asserting them
Plaintiff claims that he made an effort to determine the validity of his claims
prior to filing his complaint. At the hearing, Plaintiff primarily argued that he had
presented a novel theory of law in his complaint and argued that his claim should have
been heard despite the uncertainty of whether Plaintiff would ever suffer an injury.
Plaintiff argued that the nonclaim statute required him to file a suit challenging the
City’s action within 30 days. Plaintiff argued that it was impossible to know whether he
would suffer an injury within the 30-day timeline, but that he was required to file suit to
avoid the nonclaim statute. This explanation seems to go to Plaintiff’s twelfth claim for
relief.
The Court finds that Plaintiff did not explain this rational in his complaint or
properly seek declaratory relief regarding his rights under the nonclaim statute.
Additionally, Plaintiff did not offer an explanation at the hearing of any efforts to
determine the validity of any of his other claims for relief.
B. Efforts made to reduce the number of claims or dismiss those found not to be
valid
Mr. Sutherland brought many claims that are clearly not legally recognizable
claims for relief. Mr. Sutherland did not move to dismiss any of these claims before
they were dismissed by the Court on a motion from the opposing party. Therefore, Mr.
Sutherland made no reasonable effort to reduce the number of his claims or dismiss
those that lacked merit.
C. Availability of facts to assist a party in determining the validity of a claim
All of the facts necessary to determine the validity of Mr. Sutherland’s claims
were available to him prior to the filing of this action. Mr. Sutherland has made no
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allegation that he was unable to obtain the necessary facts prior to commencing this
action.
D. Relative financial positions of the parties
No information regarding this factor was provided by either party.
E. Bad faith
Plaintiff argues that he brought this lawsuit against Fort Collins because (1) he
believes the bonds issued by the City are invalid and (2) he believes the City’s
broadband project will fail, resulting in a rise in electricity rates. Plaintiff argues that he
had valid concerns prompting him to sue on these two bases.
Fort Collins argues that Plaintiff brought this lawsuit in bad faith. Fort Collins
argued that Plaintiff had his opportunity to object to the bonds at the EUEB meeting
and took advantage of that opportunity. Fort Collins argued that Plaintiff knew or
should have known that he did not have standing to bring this lawsuit and brought suit
only to delay the issuance of the bonds and disrupt the City’s broadband project. Fort
Collins argued that Plaintiff has brought similar lawsuits in the past and the fact that
Plaintiff has not prevailed in any of these prior suits. Finally, Fort Collins pointed out
that Plaintiff has recently been barred from bringing suits pro se in the Eighth Judicial
District.
The Court finds that Plaintiff brought this action in bad faith. Plaintiff opposed
Fort Collins’s construction of a broadband internet network. Plaintiff opposed this
network at the EUEB meeting when the bonds were issued and he voiced his opposition
to the construction again at the March 15, 2019 hearing. The Court finds that Plaintiff’s
suit against Fort Collins was brought for the purpose of delaying and/or harassing the
City in its attempt to construct the voter-approved broadband network.
In reaching this conclusion, the Court relies in part on the fact that Plaintiff has
filed past lawsuits against governmental entities in similar circumstances. These
include lawsuits challenging mill levy overrides where additionally money would go to
the construction of new schools and Plaintiff’s claims against the Timnath Development
Authority and Compass Mortgage Corporation in this case challenging the creation of
debt by the Timnath Development Authority. Plaintiff has shown a pattern of
challenging measures by the City of Fort Collins and surrounding areas that would or
could raise taxes or utility rates. Plaintiff has not succeeded on any of his claims. A
different judge in the Eighth Judicial District recently found that “Mr. Sutherland’s
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frivolous and vexatious litigation activity constitutes a serious abuse of civil process”.
That Court entered a permanent injunction barring Plaintiff from filing suits pro se in
the Eighth Judicial District in case number 2018CV30567.
The Court considers all of these factors in reaching its conclusion that Plaintiff
brought this suit in bad faith.
F. Issues of fact in conflict
There are no issues of fact in conflict in this matter. Mr. Sutherland sought a
ruling that certain bonds are invalid because the proper procedures were not followed.
Mr. Sutherland does not have standing to bring these claims and there is no factual
dispute as to Mr. Sutherland’s standing.
G. Extent the party prevailed with respect to the claims
In this Court’s order dated September 5, 2018, all of Mr. Sutherland’s claims were
dismissed as they related to the City of Fort Collins. Thus, Fort Collins prevailed
entirely with respect to the claims against it in this action.
H. Amount and conditions of an offer of judgment or settlement
No party in this case offered judgment or settlement.
3. Award
At the hearing, Fort Collins requested $54,662.59 in attorney fees and $2,295.77 in
costs. Plaintiff did not challenge the reasonableness of the rates charged by the
attorneys for Fort Collins, but Plaintiff did challenge the amount of time necessary to
defend against Plaintiff’s lawsuit. Plaintiff additionally challenged the necessity of
extensive legal research.
The Court finds that the amount of time expended by the attorneys for the City
was reasonable. Plaintiff’s complaint purported to assert nineteen claims for relief
touching on issues of municipal law, election law, and the issuance of bonds. The
Complaint raised complex legal issues, even if Plaintiff didn’t ultimately have standing
to pursue any of his claims for relief. Defendant’s counsel testified that he had to read,
confer and sometimes respond to over eighty emails sent by the Plaintiff. Attorneys for
Fort Collins had an ethical duty to represent their clients and inform themselves of the
nature of the case and updates regarding other parties. Both researching the issues
involved and maintaining awareness of the case status involved a substantial amount of
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time. The Court finds that the amount of time spent by the attorneys in their
representation of Fort Collins in this matter was reasonable.
The Court does not find that the rates charged by the attorneys are reasonable.
While the rates charged by the attorneys may be reasonable in Denver, this case was
brought in Larimer County. The Court therefore reduces the rates for Fort Collins’s
attorneys so that they are on par with the rates charged in this legal community. The
Court awards fees based on the following rates: Mill - $325; Milgrom - $235. Applying
those hourly rates, the Court awards Fort Collins $37,947.50 in attorney fees.
The Court finds the costs requested by Fort Collins to be reasonable. Therefore,
the Court awards Fort Collins $2,295.77 in costs.
Order
The Court enters judgment in favor of the City of Fort Collins and against Eric
Sutherland in the amount of $37,947.50 in attorney fees and $2,295.77 in costs for a total
of $40,243.27. Interest shall accrue at the statutory rate of 8% per annum.
Dated: April 2, 2019. BY THE COURT:
__________________________
Gregory M. Lammons
District Court Judge