When a landlord files an eviction in Colorado, they often ask the court for an award of their attorney fees and court costs. Tenants who defeat an eviction can also ask courts for the landlord to pay their legal costs. Being able to recover these amounts can greatly influence whether a tenant fights back or concedes. This article discusses the distinctions between attorney fees and costs, including under what circumstances each can be recovered.
The “American Rule”
Colorado follows the “American Rule” for awarding attorney fees and costs, meaning that, absent a contract or statute stating otherwise, each party to a lawsuit on contract bears their own attorney fees and costs. See Bunnett v. Smallwood, 793 P. 2d 157, 160 (Colo. 1990). The eviction statutes generally reflect this rule. Under C.R.S. § 13-40-123, the prevailing party in an eviction may recover their reasonable attorney fees only if there is a residential rental agreement containing a provision for either party to obtain attorney fees. However, a prevailing party in an eviction may always recover their costs of suit, such as filing fees charged by the court.
Fee-Shifting Clauses: Bilateral vs. Unilateral
Contract clauses that shift attorney fees come in two forms: bilateral clauses where both parties can recover their fees and unilateral clauses where only one party is able to recover their fees and the other party cannot.
Historically, only Colorado tenants with substantial negotiating leverage (or those with generous/unaware landlords) were able to get lease agreements that had bilateral fee-shifting clauses. Landlords in Colorado drafted leases where only they could recover their attorney fees in the event of a lawsuit—often any lawsuit—and preclude the tenant from recovering their attorney fees. For example, these leases might say, “In the event that this lease becomes the subject of litigation, the landlord shall be entitled to recover their attorney fees.” Under such a lease, a tenant who wishes to sue their landlord can usually only viably do so if either (1) they can recover enough in damages from their claims to pay their attorneys out of pocket, or (2) they sue under a statute that allows for them to recover attorney fees. See, e.g., C.R.S. § 38-12-905(5)(a) (aggrieved tenants may recover attorney fees for breaches of the Colorado Rental Application Fairness Act).
Today, unilateral fee-shifting clauses in Colorado residential leases are unenforceable. C.R.S. § 38-12-801(3)(a)(I) (“A written rental agreement must not include:… A one-way, fee-shifting clause that awards attorney fees and court costs only to one party. Any fee-shifting clause contained in a rental agreement must award attorney fees to the prevailing party in a court dispute concerning the rental agreement, residential premises, or dwelling unit following a determination by the court that the party prevailed and that the fee is reasonable.”) Any unilateral fee-shifting provision in a Colorado residential lease today is void and unenforceable. C.R.S. § 38-12-801(3)(b).
When is a Party a “Prevailing Party”?
In Colorado evictions, determining which party is the prevailing party is easy: the party that wins on the issue of possession is the prevailing party. This issue was addressed and answered by the Colorado Court of Appeals in Integra Financial v. Grynberg Preoleum. In Integra, the court reasoned that, since an eviction action is an action to recover possession of real property, “claims that do not bear on the right to possession are not part of an FED action for purposes of awarding attorney fees.” 74 P. 3d 347, 348-49 (2002). There, the court ruled that the landlord was the prevailing party after securing a judgment for possession despite the tenant having prevailed on counterclaims unrelated to the issue of possession.
The Process of Recovering Attorney Fees and Costs
Attorney fees can only be recovered in a Colorado eviction if all the following are true:
- You are the prevailing party;
- You have incurred attorney fees in the course of prevailing;
- The court has found your attorney fees to be reasonable; and
- The eviction stems from a residential lease containing a bilateral fee-shifting clause.
The requirements for recovering costs is simpler:
- You are the prevailing party; and
- You have incurred costs, such as filing fees.
Once a judgment for possession has been issued, a prevailing party can motion the court for an award of attorney fees. The motion should set forth the basis for the attorney’s rate as well as a detailed itemization showing how fees were incurred. The losing party may then object to the reasonableness of the fees being requested, and the court may set the matter for further hearing. If the court agrees that the attorney fees are unreasonable, then it may reduce the attorney fee award to amount it deems reasonable.
It’s important to note that there are a few other methods to recovering attorney fees and costs, such as through court sanctions or pursuant to C.R.S. § 13-17-102.
If you are facing an eviction or have questions about fee-shifting clauses, contact Lipscomb Law today for a brief consultation.
Authored by Andrew Lipscomb