Fontanari v. Snowcap

• Court: Colorado Court of Appeals
• Decided: November 14, 2024
• Docket: 23CA2181
• Status: Unknown

Opinion

23CA2181 Fontanari v Snowcap 11-14-2014

COLORADO COURT OF APPEALS

Court of Appeals No. 23CA2181 Mesa County District Court No. 17CV30314 Honorable Douglas S. Walker, Judge Honorable Jeremy Chaffin, Judge

Brett Fontanari, Trustee of the Rudolph and Ethel Carol Fontanari Revocable Living Trust; Britt Fontanari, Trustee of the Rudolph and Ethel Carol Fontanari Revocable Living Trust; Kimberly Gross, Trustee of the Rudolph and Ethel Carol Fontanari Revocable Living Trust; and Pear Park Baptist Church, Trustee of the Rudolph and Ethel Carol Fontanari Revocable Living Trust,

Plaintiffs-Appellants,

v.

Snowcap Coal Company, Inc., a Delaware corporation,

Defendant-Appellee.

JUDGMENT AFFIRMED AND CASE REMANDED WITH DIRECTIONS

Division V Opinion by JUDGE LUM Freyre and Grove, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e) Announced November 14, 2024

Rider & Quesenberry, LLC, Stephanie Rubinstein, Grand Junction, Colorado, for Plaintiff-Appellants

Hoskin Farina & Kampf, Andrew H. Teske, John T. Pryzgoda, Grand Junction, Colorado; Curtis, Justus & Zahedi, LLC, John P. Justus, Westminster, Colorado, for Defendant-Appellee ¶1 Plaintiffs, Brett Fontanari, Britt Fontanari, Kimberly Grosse

and Pear Park Baptist Church, Trustees of the Rudolph and Ethel

Carol Fontanari Revocable Living Trust (Fontanari), appeal the

judgment in favor of defendant Snowcap Coal Company, Inc.

(Snowcap), following a bench trial on Snowcap’s breach of contract

claim. We affirm the judgment and remand with directions for the

district court to consider reasonable appellate attorney fees.

I. Background

¶2 In 2002, Snowcap acquired the Roadside Portals Mine (the

mine) and associated real property subject to reclamation under the

Colorado Surface Coal Mining Reclamation Act (the Act), section 34-

33-101 to -137, C.R.S. 2024. Snowcap holds a permit issued

pursuant to the Act, under which it is responsible for conducting

the reclamation work. As required by the Act, Snowcap posted a

performance bond to ensure the completion of reclamation. See §

34-33-113, C.R.S. 2024.

¶3 About a year later, Snowcap entered into a Purchase and Sale

Agreement (PSA) to convey to Fontanari an approximately 226-acre

portion of Snowcap’s property within the reclamation boundary.

The PSA contained an “as is, where is” clause under which

1 Fontanari agreed that it would rely solely on its own inspection to

determine the condition of the property. Additionally, it contained a

broad indemnity provision stating that Fontanari

shall release, indemnify, hold harmless, and defend [Snowcap] . . . from and against any and all claims, demands, losses, liabilities, damages, fines, penalties, costs and expenses (including without limitation, costs for site remediation, and costs for reasonable attorney fees) . . . arising or alleged to arise in any manner whatsoever from any condition on or under the [property].

Finally, the PSA granted Snowcap an easement to access the

property for the purpose of performing its reclamation obligations.

¶4 In 2013, Snowcap submitted a bond release application to the

Division of Reclamation, Mining, and Safety (DRMS) with respect to

lands on the property. Fontanari objected to the bond release

because of concerns related to “subsidence features” on the land

and their effect on irrigation.

¶5 The next year, Fontanari dug a trench on the property, which

allowed water to enter one of the mine shafts and partially saturate

the mine, a condition called “hydrologic communication.” The

hydrologic communication caused public safety concerns and

generated additional objections to the bond release from Fontanari.

2 DRMS ordered Snowcap to submit an application for a permit

revision that would require it to investigate the hydrologic

communication, prepare a plan to repair it, prepare a reclamation

plan for any resulting disturbances, and commit to completing the

repairs and reclamation.

¶6 J.E. Stover & Associates (Stover), Snowcap’s “onsite

representative,” prepared the permit revision application, undertook

the other related tasks, and communicated with DRMS.

¶7 DRMS approved the permit revision. Snowcap also submitted

the proposed plan for repair and reclamation to DRMS. Fontanari

submitted objections and proposed an alternative plan. DRMS

rejected Fontanari’s plan and issued a decision approving

Snowcap’s plan. Fontanari sought review of the DRMS decision

before the Mined Land Reclamation Board (MLRB). After a two-day

hearing, the MLRB affirmed the DRMS decision. Fontanari then

filed an action in Mesa County Case No. 17CV30391 seeking

judicial review of the MLRB order. The district court affirmed the

MLRB order and awarded Snowcap statutory attorney fees.

Fontanari appealed the attorney fee award to a division of this

3 court.1 We will refer to these proceedings collectively as the “DRMS

proceedings.”

¶8 While the DRMS proceedings were ongoing, Fontanari filed the

underlying action against Snowcap, alleging breach of contract (for

the permit revision) and failure to maintain subjacent support.

Fontanari’s claims generally alleged that sinkholes and other

conditions on the property prevented it from irrigating the property

and adjacent lands using flood irrigation and required it to use a

pipe and sprinkler irrigation method, resulting in added costs.

Fontanari also sought declaratory relief, asking the court to

interpret the terms of the PSA and the revised permit.

¶9 Snowcap asserted a number of counterclaims, including, as

relevant here, a breach of contract claim alleging that Fontanari

breached (or would breach) the indemnity provision by refusing to

compensate Snowcap for costs and expenses, including reclamation

costs and attorney fees, incurred (1) as a result of the hydrologic

1 The division reversed the award of statutory attorney fees and

remanded to the district court. Fontanari v. Snowcap Coal Co., 2023 COA 29. The case is stayed in the district court pending the outcome of this appeal. 4 communication; (2) during or as a result of the DRMS proceedings;

and (3) in defending against Fontanari’s claims in the instant case.

¶ 10 All of Fontanari’s claims and most of Snowcap’s counterclaims

were dismissed, leaving only Snowcap’s breach of indemnity

provision claim (indemnity enforcement claim).

¶ 11 Fontanari moved to dismiss the indemnity enforcement claim

under C.R.C.P. 12(b)(5), which the district court denied. Later,

Fontanari filed a summary judgment motion arguing that the

indemnity provision was ambiguous and that it only applied to

claims made by third parties against Snowcap — not to claims

between Fontanari and Snowcap or claims arising out of

Fontanari’s behavior. Fontanari also argued that the indemnity

provision was void as a matter of public policy. The district court

rejected Fontanari’s arguments, concluding that (1) the indemnity

provision unambiguously made Fontanari responsible for the

additional reclamation costs and related litigation expenses and (2)

public policy didn’t render the provision void.

¶ 12 During trial, after Snowcap’s case-in-chief, Fontanari moved

again for dismissal of the indemnity enforcement claim based on

Fontanari’s interpretation of the indemnity provision. The court

5 denied the motion. After trial, the district court found that

Fontanari breached the indemnity provision and awarded Snowcap

a total of $517,906.39 in damages, most of which were attorney

fees, including fees incurred “up to the trial” in the underlying

litigation. The court later entered a separate award for $49,218.17

in attorney fees incurred during trial and for closing arguments.

¶ 13 On appeal, Fontanari argues that the district court erred by

concluding that (1) the PSA unambiguously imposed an indemnity

obligation on Fontanari for the fees and costs incurred by Snowcap

and (2) the fees and costs incurred during trial and for closing

argument were reasonable.2

II. Indemnity Provision

¶ 14 Fontanari first contends that the district court erred by finding

that the PSA’s indemnity provision is unambiguous and that it

requires Fontanari to pay the fees and costs incurred by Snowcap.

We disagree.

2 In its opening brief, Fontanari also argued that the district court

erred by concluding that the indemnity provision didn’t violate public policy; however, it withdrew this issue in its reply brief. 6 A. Additional Facts

Section 13.B of the PSA provides:

From and after the date of Closing, [Fontanari] . . . shall release, indemnify, hold harmless, and defend [Snowcap] . . . against any and all claims, demands, losses, liabilities, damages, fines, penalties, costs and expenses (including without limitation, costs for site remediation, and costs for reasonable attorney fees) known or unknown, arising or alleged to arise in any manner whatsoever from any condition on or under the [property], or the failure of the [property] to comply with applicable environmental laws and regulations . . . , or arising or alleged to arise from any claim for damage to any property, including loss of use thereof, or which [Snowcap] may sustain or incur in connection with any litigation, investigation, or other expenditures incident to any of the foregoing, including any suit instituted to enforce this agreement of indemnity . . . . This indemnification obligation and release and waiver shall survive the Closing of the sale/purchase of the Premises.

¶ 15 The damages awarded by the district court under this

provision were broken into four categories: (1) $151,730.61 for fees

Snowcap paid to Stover for Stover’s work related to the hydrologic

communication and related administrative proceedings (Stover

fees); (2) $198,454.58 in attorney fees incurred during the DRMS

proceedings and in relation to Fontanari’s bond release objections;

7 (3) $67,721.20 in attorney fees incurred to defend against

Fontanari’s dismissed claims in the underlying litigation; and (4)

$100,000 in attorney fees incurred “up to the time of trial” — and

$49,218.17 in attorney fees incurred during trial and for post-trial

work — related to Snowcap’s prosecution of its indemnity

enforcement claim.

B. Standard of Review and Applicable law

¶ 16 “The primary goal of contract interpretation is to determine

and give effect to the intent of the parties,” which we determine

“primarily from the language of the instrument itself.” Ad Two, Inc.

v. City & Cnty. of Denver, 9 P.3d 373, 376 (Colo. 2000). A contract

that is unambiguous “will be enforced according to [its] plain

language.” Id.

¶ 17 The terms of a contract are ambiguous when they are

“susceptible to more than one reasonable interpretation.” Id.

However, the mere fact that the parties disagree about the

interpretation of the contract does not itself create ambiguity. Id. at

376-77.

¶ 18 Whether a written contract is ambiguous is a question of law

that we review de novo. Lake Durango Water Co. v. Pub. Utils.

8 Comm’n, 67 P.3d 12, 20 (Colo. 2003). We also review de novo the

interpretation of unambiguous contractual language, including the

language of indemnity provisions. Id.; see also Boulder Plaza

Residential, LLC v. Summit Flooring, LLC, 198 P.3d 1217, 1220-21

(Colo. App. 2008) (indemnity agreements subject to same rules of

construction governing contracts generally).

C. Analysis

¶ 19 We agree with the district court that the language of the

indemnity provision unambiguously requires Fontanari to

indemnify Snowcap for each of the four categories of damages the

court awarded.

¶ 20 The provision is very broad, but none of its words, either in

isolation or in context, are confusing or susceptible of more than

one reasonable interpretation. See Sunshine v. M. R. Mansfield

Realty, Inc., 575 P.2d 847, 849 (Colo. 1978) (when there is only one

reasonable meaning of a contract term, the parties are bound by

that meaning). The provision says that Fontanari must indemnify

Snowcap against “any and all claims . . . costs and expenses”

(Emphasis added)

9 • “arising or alleged to arise in any manner whatsoever

from any condition on or under the [property] or the

failure of the [property] to comply with applicable

environmental laws and regulations”;

• “arising or alleged to arise from any claim for damage to

any property”; and

• incurred “in connection with any litigation” related to

“any of the foregoing, including any suit initiated to

enforce [the indemnity provision].”

¶ 21 Further, the provision specifies that the “costs and expenses”

for which Fontanari may be liable “includ[e], without limitation,

costs for site remediation[] and costs for reasonable attorney fees.”

(Emphasis added.)

¶ 22 The first two categories of damages — the Stover fees and the

attorney fees for DRMS proceedings — arise out of the investigation,

monitoring, repair, reclamation, and administrative proceedings

necessitated by the hydrologic communication, along with the

related litigation initiated by Fontanari after DRMS approved

Snowcap’s revised plan. The hydrologic communication is a

“condition on or under the property.” In addition, that condition 10 caused Snowcap to incur fees to ensure that the property

“compl[ied] with applicable environmental laws and regulations.”

Further, to the extent fees in those categories also relate to

Fontanari’s 2013 objections to the bond release, those fees arise out

of Fontanari’s concerns about subsidence features, which are also a

“condition on or under the property.”

¶ 23 The third category of damages — the attorney fees incurred in

defending against Fontanari’s dismissed claims — also arises from

litigation related to (1) a “condition on or under the property,”

namely, sinkholes, “surface subsidence,” and related issues; and (2)

a claim for damage to the property caused by those conditions.

¶ 24 The fourth category of damages — attorney fees for

prosecuting Snowcap’s indemnity enforcement claim — are incurred

in connection with a “suit initiated to enforce” the indemnity

provision.

¶ 25 In sum, all four categories of damages are expressly covered

under the indemnity provision’s plain language.

¶ 26 To the extent we understand Fontanari’s arguments to the

contrary, we aren’t persuaded by them. First, Fontanari argues

that the indemnity provision is ambiguous (and must be construed

11 against Snowcap as the drafter) because the district court made

“contradictory findings” about ambiguity in its order denying the

motion to dismiss and its order denying summary judgment.

¶ 27 Fontanari’s claim is based on language in the dismissal order

saying, “When an agreement is ambiguous, a determination of the

parties’ intent . . . is a question of fact.” (Emphasis added.)

Fontanari contrasts this with the district court’s summary

judgment order concluding that the agreement was unambiguous.

We agree with Snowcap that, in context, the language in the

dismissal order is a simple statement of the law, not a conclusion

that the contract was ambiguous. Neither party argued that the

contract was ambiguous in the motion to dismiss or response

thereto. Rather, Fontanari argued that the interpretation of the

indemnity provision was governed by a line of Colorado cases

articulating a “general rule” that such provisions applied only to

claims asserted by third parties.3 The court disagreed with

Fontanari’s interpretation and denied the motion. And in any

event, we discern no ambiguity in our de novo review.

3 Fontanari doesn’t reassert this argument on appeal.

12 ¶ 28 Second, Fontanari contends that the district court’s

interpretation of the indemnity provision — requiring Fontanari to

pay for the fees and costs at issue here — is unreasonable because

Snowcap provided Fontanari with notice and an opportunity to

comment on its proposed bond release in 2013.4 We don’t perceive

that submitting a legally required public notice and opportunity to

comment to all “adjoining property owners, surface owners,

appropriate governmental bodies,” and various other administrative

agencies is inconsistent with Fontanari’s obligations under the

indemnity provision. Nor does it render the district court’s

interpretation unreasonable.

¶ 29 Third, Fontanari contends that the provision is ambiguous

because some of the district court’s factual findings about the

timing of Snowcap’s indemnification demands were contradicted by

portions of the record. But Fontanari doesn’t explain, and we can’t

discern, why this compels a conclusion that the contract is

4 When making this argument, Fontanari references the “number of

times Snowcap provided notice” of its right to object but does not provide any citation to the record. As best we can discern, the only reference in Fontanari’s briefing to a notice of objection rights provided by Snowcap is the notice of application for bond release in 2013. 13 ambiguous. Cf. People v. Sanders, 2023 CO 62, ¶ 16 (noting that

we do not consider “bald legal propositions” presented without

supporting authority, argument, or development).

¶ 30 Finally, Fontanari contends that the indemnity provision is

ambiguous in light of a provision in the PSA giving Snowcap an

easement to enter the property to perform its reclamation

obligations. We decline to consider this argument because it was

raised for the first time in the reply brief. See Knappenberger v.

Shea, 874 P.2d 498, 503 (Colo. App. 1994) (issues not presented in

an opening brief generally are not considered by the court).

¶ 31 For all these reasons, the district court didn’t err by

concluding that the PSA unambiguously required Fontanari to pay

the fees and costs it awarded.

III. Reasonableness of Attorney Fees

¶ 32 Fontanari next contends that the district court erred by

awarding attorney fees to Snowcap incurred during trial and for

post-trial work. We again disagree.

A. Standard of Review and Applicable Law

¶ 33 We review an attorney fee award for an abuse of discretion and

will not disturb it unless it is patently erroneous or unsupported by

14 the evidence. CAW Equities, LLC v. City of Greenwood Village, 2018

COA 42M, ¶ 38.

B. Analysis

¶ 34 To the best of our understanding, Fontanari contends that,

when the district court reduced Snowcap’s pre-trial attorney fees

from $250,324.48 to $100,000, it concluded that $100,000 was the

maximum amount of attorney fees it was reasonable to expend in

enforcing the indemnification provision. Thus, Fontanari argues,

the court erred by entertaining and granting any further attorney

fees for trial and post-trial work.

¶ 35 We disagree with Fontanari’s interpretation of the district

court’s order. The order did not say (or even imply) that $100,000

was a cap on reasonable fees for the enforcement proceedings.

Instead, it said that $100,000 was a reasonable amount that “still

recognize[d] the substantial work that did go into this portion of the

case.” (Emphasis added.) The court later expressly explained that

the parties were “entitled to a hearing on the final portion of the

attorney fees for the trial and . . . post-trial work and expenses.”

¶ 36 Because Fontanari doesn’t raise any other argument as to why

the $49,218.17 in attorney fees awarded for trial and post-trial

15 work is unreasonable, we affirm the district court’s order awarding

those fees.

IV. Reasonable Appellate Attorney Fees

¶ 37 Snowcap also requests an award of its reasonable appellate

attorney fees and costs incurred in defending against this appeal

under C.A.R. 39.1. Snowcap argues that it is entitled to such fees

because “[t]his appeal is a continuation of litigation by Snowcap to

enforce Fontanari’s indemnity obligation of the PSA.” We agree.

Kennedy v. King Soopers Inc., 148 P.3d 385, 390 (Colo. App. 2006)

(“When a party is awarded attorney fees for a prior stage of the

proceedings, it may recover reasonable attorney fees and costs for

successfully defending the appeal.”). We exercise our discretion

under C.A.R. 39.1 and remand the case to the district court for a

determination of reasonable appellate attorney fees. Wheeler v. T.L.

Roofing, Inc., 74 P.3d 499, 506 (Colo. App. 2003).

V. Disposition

¶ 38 We affirm the judgment and remand for further proceedings

consistent with this opinion.

JUDGE FREYRE and JUDGE GROVE concur.