Pacific Express v. Anderson

• Court: Colorado Court of Appeals
• Decided: November 24, 2021
• Docket: 20CA0923
• Status: Unknown

Opinion

20CA0923 Pacific Express v Anderson 11-24-2021

COLORADO COURT OF APPEALS

Court of Appeals No. 20CA0923

City and County of Denver District Court No. 18CV30070

Honorable Andrew P. McCallin, Judge

Pacific Express Stables, LLC, a Colorado limited liability company,

Plaintiff-Appellant,

v.

Ryan Anderson and CF LoDo, LLC, a Colorado limited liability company,

Defendants-Appellees.

JUDGMENT AFFIRMED AND CASE

REMANDED WITH DIRECTIONS

Division III

Opinion by JUDGE FURMAN

Lipinsky and Brown, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)

Announced November 24, 2021

Andrew Oh-Willeke, Denver, Colorado, for Plaintiff-Appellant

Business Management Law Group, Stanley V. Jezierski, Broomfield, Colorado,

for Defendants-Appellees

1

¶ 1 In this commercial lease case, Tenant, CF LoDo, LLC, leased

the basement of a downtown Denver building from Landlord, Pacific

Express Stables, LLC, to run a weight training and exercise

business. The Lease had a three-year term that began in July

2013. CF LoDo’s owner, Ryan Anderson, personally guaranteed the

Lease on behalf of CF LoDo.

¶ 2 In October 2014, a dispute arose between the parties about

both an increase in the amount of certain lease payments, called

“triple net charges,” and CF LoDo’s right to audit the building’s

operating costs. CF LoDo vacated the basement at the expiration of

the Lease in September 2016, without the dispute being resolved.

¶ 3 Pacific Express then sued CF LoDo and Anderson, as

guarantor, for breach of the Lease. Pacific Express alleged that CF

LoDo breached the Lease by not making certain Lease payments,

including the increased triple net charges, and by causing excessive

wear and tear to the basement. Pacific Express sought

$407,669.70 in damages.

¶ 4 After a bench trial, the court found for CF LoDo on “all of

[Pacific Express’s] claims,” except for a few “minor,” undisputed

claims. The court then awarded Pacific Express $2,760.00 in

2

damages on the “minor” undisputed claims and $2,172.70 in

pre- and post-judgment interest. The court found that Anderson

was jointly and severally liable for these damages as CF LoDo’s

guarantor on the Lease.

¶ 5 After determining that CF LoDo was the “prevailing party” for

purposes of a fee-shifting provision in the Lease, the trial court

awarded CF LoDo $51,435.00 in attorney fees and costs.

¶ 6 On appeal, Pacific Express contends that the trial court (1)

erred by finding that CF LoDo was not liable to pay the increased

triple net charges under Paragraph 6(i) of the Lease and (2) abused

its discretion by determining that CF LoDo was the “prevailing

party” under the fee-shifting provision of the Lease. Because we

disagree with Pacific Express’s contentions, we affirm the judgment.

¶ 7 Both Pacific Express and CF LoDo request an award of their

appellate attorney fees and costs. We deny Pacific Express’s

request, but we grant CF LoDo’s request.

I. Increased Triple Net Expenses

¶ 8 We first conclude that the trial court did not err in finding that

CF LoDo was not liable to pay the increased triple net charges

under Paragraph 6(i) of the Lease.

3

A. Standard of Review

¶ 9 Interpreting a lease is a question of law we review de novo.

See Vu, Inc. v. Pac. Ocean Marketplace, Inc., 36 P.3d 165, 167 (Colo.

App. 2001). Our “primary goal” when interpreting a lease “is to

determine and give effect to the intent of the parties.” Id. We

determine this intent primarily from the language of the lease itself.

See id. And when a written lease is “complete and free from

ambiguity,” we will consider it as expressing the intent of the

parties and will enforce it according to its plain language. Id.

¶ 10 But whether a party has performed its obligations under a

lease or has breached is a question of fact. See Lake Durango Water

Co. v. Pub. Utils. Comm’n, 67 P.3d 12, 21 (Colo. 2003). We must

defer to a trial court’s findings of fact unless they are so clearly

erroneous as to find no support in the record. See Loveland

Essential Grp., LLC v. Grommon Farms, Inc., 251 P.3d 1109, 1116-

17 (Colo. App. 2010); see also Van Gundy v. Van Gundy, 2012 COA

194, ¶ 12 (“We review a court’s factual findings following a trial to

the court only for clear error.”).

¶ 11 When a trial court sits as fact finder, it “is charged with

assessing the witnesses’ credibility and determining the evidence’s

4

sufficiency, probative effect, and weight.” State ex rel. Suthers v.

Mandatory Poster Agency, Inc., 260 P.3d 9, 15 (Colo. App. 2009).

So, “we must defer to the trial court’s determinations, unless they

are clearly erroneous or unsupported by the record.” Id. And, if

“evidence conflicts, we may not substitute our judgment for the trial

court’s.” Id.

B. Paragraph 6(i) of the Lease

¶ 12 Paragraph 6(i) of the Lease reads:

Tenant shall pay its Proportionate Share of the

Building’s operating costs (NNN) in monthly

installments, on the 15th of each month (in the

instance where the 15th falls on a Saturday or

Sunday, the Tenant shall pay its Proportionate

Share of the Building’s operating costs on the

following Monday), based upon Landlord’s

good faith estimate, from time to time, of the

Building’s operating costs. Tenant’s initial

payment is based upon Landlord’s estimate of

the building’s operating costs for the year in

question, and the monthly payments thereof

(and future payments) are subject to increase

or decrease as determined by Landlord from

time to time to reflect an accurate estimate of

actual operating costs. Within one hundred

twenty (120) days or a reasonable time

thereafter after the end of each calendar year,

Landlord shall deliver to Tenant a statement of

operating costs for such calendar year and

Tenant shall pay Landlord or Landlord shall

credit Tenant (or, if such adjustment is at the

end of the Term, pay Tenant), within thirty (30)

5

days of receipt of such statement, the amount

of any excess or deficiency in Tenant’s

payment of its portion of operating costs for

the calendar year. Tenant shall have the right

to audit Landlord’s operating costs.

¶ 13 Thus, under Paragraph 6(i), CF LoDo had to pay its

proportionate share of the building’s operating costs as “triple net

charges.” The “initial” amount of triple net charges that CF LoDo

had to pay was based on Pacific Express’s estimate of its operating

costs for the first year of the Lease. But Pacific Express had the

right to increase the amount of triple net charges that CF LoDo had

to pay on a monthly basis if the increase reflected an “accurate

estimate” of Pacific Express’s “actual” operating costs.

¶ 14 And, under Paragraph 6(i), Pacific Express had to deliver a

statement of its operating costs for the calendar year to CF LoDo

within 120 days or a reasonable time after the end of that calendar

year. CF LoDo then had to pay any deficiency in its payment of its

share of triple net charges for the calendar year, or Pacific Express

had to credit or pay CF LoDo for any excess amounts CF LoDo had

paid for its share of triple net charges for the calendar year, within

thirty days of receiving the statement of Pacific Express’s operating

costs. See id.

6

¶ 15 Paragraph 6(i) also granted CF LoDo the right to audit Pacific

Express’s operating costs.

C. The Trial and the Court’s Findings

¶ 16 Pacific Express claimed, among other things, that CF LoDo

breached Paragraph 6(i) of the Lease by not paying the increased

triple net charges. To support this claim, Pacific Express relied on

the testimony of its manager and on Exhibit 3, a spreadsheet

prepared by the manager that purported to show the building’s

operating costs and CF LoDo’s payment history during the relevant

time period.

¶ 17 In response, CF LoDo argued that it was not liable to pay any

increase in triple net charges. It argued that the manager was not

credible; some numbers in Exhibit 3 “were made up, in some cases,

out of whole cloth”; and the increased triple net charges was an

“overreach” by Pacific Express. Relying on Anderson’s testimony

and emails exchanged between Anderson and the manager, CF

LoDo argued that Pacific Express breached Paragraph 6(i) of the

Lease by not allowing CF LoDo to audit the records of the building’s

operating costs in a timely manner and by not providing the records

to CF LoDo in a format that would allow CF LoDo to audit them.

7

¶ 18 Following the trial, the court entered detailed oral findings of

fact and conclusions of law. The court addressed Pacific Express’s

claim for increased triple net charges.

¶ 19 The trial court interpreted Paragraph 6(i) of the Lease as

follows. CF LoDo is required “to pay its proportionate share of the

building’s operating expenses described as triple net.” Pacific

Express will “set forth an initial estimate of what these triple net

costs are.” But Pacific Express may pass on an increase in these

costs to CF LoDo. So, Pacific Express can “revise [its estimate of CF

LoDo’s amount of triple net charges] at the end of a calendar year.”

Pacific Express must deliver a statement of its operating costs to CF

LoDo within 120 days of the end of the calendar year, and CF LoDo

must pay “the amount of any excess or deficiency in [its] payment of

its portion of operating cost for [the] calendar year” within thirty

days of receipt of the statement. CF LoDo also “has a right to audit

the operating costs.”

¶ 20 The court then made findings regarding the events in this

case:

8

• Pacific Express’s “initial estimate” of CF LoDo’s proportionate

share of triple net charges “was set at $1,500 in 2013 when

[the] Lease started.”

• On October 8, 2014, the manager “on behalf of [Pacific

Express] sent an email to [Anderson] on behalf of the

Defendants and stated to him that the triple net costs [had]

increased.” The manager attached a spreadsheet to this email

that purported to show the building’s operating costs.

• “[T]wo days after receiving this statement, [Anderson] sent a

short email on” October 10, 2014, “to [Pacific Express] in

which he stated he would like to exercise his right to conduct

an audit.”

• Nothing happened for “five to six months.”

• On March 9, 2015, Pacific Express sent an email to Anderson

in which “it demand[ed] that the increase[d] triple net costs be

paid.”

• “At some point in either March or April” of 2015, Anderson

went to the manager’s home to attempt an audit of the

building’s operating costs, and the manager laid out the

receipts for these costs on her kitchen table.

9

• But Anderson could not conduct an “audit of these receipts

because they were so disorganized” and “in such disarray.”

• On May 22, 2015 — in “the last word on this audit” — the

manager emailed Anderson “stating that she will hire someone

and bill [CF LoDo] in order to organize her records.”

¶ 21 The trial court found there was “no credible evidence” of “the

increased triple net cost.”

¶ 22 The trial court also found that Pacific Express was obligated

under Paragraph 6(i) of the Lease “to provide meaningful records so

that [CF LoDo] can conduct an audit.” But the court found that

“the lack of organization, the disarray in the records, and the lack of

any credible evidence of the increased costs prevented [CF LoDo]

from exercising a meaningful audit.” So, the trial court found:

[Pacific Express] has breached its obligation . .

. to provide any verification of the actual costs

that would support an increase in the triple

net [charges]. So the Court finds that [CF

LoDo] was not obligated to pay the increase[d]

triple net cost that [Pacific Express] maintains

were due.

¶ 23 Regarding Exhibit 3 — the spreadsheet that the manager

maintained — the court found as follows:

10

I’m unable to find any aspect of [the

manager’s] testimony credible. So I do not

accept this spreadsheet as any credible

evidence of the increased triple net costs and

find that no credible evidence at all was

presented by [Pacific Express] of any increased

triple net costs that would trigger an increased

payment obligation by [CF LoDo] under

Paragraph 6([i]) of the Lease.

D. Analysis

¶ 24 On appeal, Pacific Express contends that the trial court erred

by interpreting Paragraph 6(i) of the Lease to mean that (1) CF

LoDo’s obligation to pay the increase in its amount of triple net

charges was “postponed by the Lease provision allowing [CF LoDo]

to request an audit of” Pacific Express’s operating costs and (2)

“audits were [to be] conducted at [Pacific Express’s] expense.”

¶ 25 But we need not address these contentions because the trial

court found that CF LoDo had no obligation to pay the increased

triple net charges. Pacific Express presented no credible evidence

that its claimed increase in operating costs was based on an

“accurate estimate of actual operating costs” as required by

Paragraph 6(i). And because Pacific Express presented no evidence

showing that its demand for increased payment from CF LoDo

“reflect[ed] an accurate estimate of actual operating costs,” it could

11

not demonstrate that CF LoDo breached the Lease by failing to pay

the increase. See Vu, Inc., 36 P.3d at 167.

¶ 26 Yet, Pacific Express contends that it did not have to prove to

the trial court that its operating costs had increased because CF

LoDo had to pay the increased triple net charges “on the basis of

[the] statement” Pacific Express delivered to CF LoDo. This does

not help Pacific Express. Paragraph 6(i) says that Pacific Express

can only increase CF LoDo’s triple net charges (and CF LoDo is only

obligated to pay these charges) if the increase reflects an “accurate

estimate” of Pacific Express’s “actual operating costs.” See id.

Pacific Express did not prove to the trial court that the increase in

CF LoDo’s triple net charges reflected an “accurate estimate” of

Pacific Express’s “actual operating costs.” The record supports the

trial court’s finding that “no credible evidence at all was presented

by [Pacific Express] of any increased triple net costs that would

trigger an increased payment obligation by [CF LoDo] under

Paragraph 6(i) of the Lease.” See State ex rel. Suthers, 260 P.3d at

15; Loveland Essential Grp., 251 P.3d at 1116-17.

¶ 27 Pacific Express’s reliance on Koerner v. Wilson, 85 Colo. 140,

142-45, 274 P. 737, 738 (1929), for the proposition that CF LoDo

12

had to prove, as an affirmative defense, that “the statement

provided by [Pacific Express] to [CF LoDo] was inaccurate in some

specific way” is misplaced. In Koerner, the lessee of an orchard

sued both the sheriff of Fremont County and the lessee’s father’s

creditor to recover damages for the conversion of some of the

lessee’s apples and apple boxes. See id. at 140-45, 274 P. at 737-

38. The sheriff, at the request of the creditor, entered the orchard,

seized the apples and apple boxes, and sold them to satisfy a

judgment against the lessee’s father. See id. After a trial, the court

entered judgment for the lessee and against defendants. See id. at

140-42, 274 P. at 737. On review to our supreme court, defendants

contended that even though they did not plead fraud as a defense,

the trial court erred by not admitting certain evidence of fraud

between the lessee and the lessee’s father. See id. at 142-45, 274 P.

at 738. In rejecting this contention, the supreme court concluded:

“Fraud is, under the circumstances of this case, clearly an

affirmative defense, and must be pleaded before evidence thereof

becomes admissible.” Id. at 143, 274 P. at 738.

¶ 28 But, unlike in Koerner, CF LoDo did not seek to admit

evidence that Pacific Express committed fraud. Instead, CF LoDo

13

denied that it had to pay the increase in its amount of triple net

charges. So, it was the burden of Pacific Express, as plaintiff, to

prove that CF LoDo had to pay the increase in its amount of triple

net charges but did not. See Saturn Sys., Inc. v. Militar, 252P.3d

516, 529 (Colo. App. 2011) (concluding that “a party attempting to

recover on a claim for breach of contract must prove,” among other

things, “the existence of a contract . . . [and] failure to perform the

contract by the defendant” (quoting W. Distrib. Co. v. Diodosio, 841

P.2d 1053, 1058 (Colo. 1992))). The trial court found that Pacific

Express did not meet its burden. See State ex rel. Suthers, 260 P.3d

at 15; Loveland Essential Grp., 251 P.3d at 1116-17.

II. Prevailing Party

¶ 29 We also conclude that the trial court did not abuse its

discretion by determining that CF LoDo was the prevailing party to

apply the fee-shifting provision of the Lease.

¶ 30 When a claim exists for violating a contractual obligation, “the

party in whose favor the decision or verdict on liability is rendered

is the prevailing party” for purposes of awarding attorney fees under

the fee-shifting provision of the contract. Dennis I. Spencer

Contractor, Inc. v. City of Aurora, 884 P.2d 326, 327 (Colo. 1994);

14

see Wheeler v. T.L. Roofing, Inc., 74 P.3d 499, 503-04 (Colo. App.

2003) (A “party prevails if the issue of liability is resolved in its

favor, even where damages are not awarded.”). But, when “both

parties have prevailed in part on the question of liability, the trial

court is free to determine which is prevailing for purposes of

applying [the] fee-shifting” provision. Wheeler, 74 P.3d at 504.

¶ 31 We review a trial court’s determination of which party is the

prevailing party for an abuse of discretion. See id. at 503. A court

abuses its discretion if its decision is manifestly arbitrary,

unreasonable, or unfair, or when it misapplies the law. See Genova

v. Longs Peak Emergency Physicians, P.C., 72 P.3d 454, 458 (Colo.

App. 2003).

¶ 32 Paragraph 20(f) of the Lease contains the following fee-shifting

provision: “In case suit shall be brought to enforce any provisions of

this Lease, the prevailing party shall (in addition to other relief

granted) be awarded all reasonable attorney’s fees and costs

resulting from such litigation.”

¶ 33 In the trial management order, Pacific Express claimed that

CF LoDo “breached the Lease with Pacific Express by not making

payments due under the Lease for rent including triple net Lease

15

payments, when due, and also owes late fees and interest under the

Lease as a consequence of failing to pay these amounts when due

under the Lease.” Pacific Express claimed that “the total amount

due for unpaid Lease payments, interest and late fees,” minus CF

LoDo’s security deposit, was $97,815.

¶ 34 Pacific Express also asserted numerous “claims” that CF LoDo

“breached the Lease with Pacific Express by physically damaging

the Premises, in excess of ordinary wear and tear, in a manner not

permitted by the Lease.” These “claims” included:

• “Damage to the cement floor of the Premises with a repair cost

actually incurred of approximately $30,000.”

• “Damage to other surfaces on the Premises such as walls,

pillars and doors with a repair cost actually incurred of

approximately $9,000.”

• “Damage to the garage wall caused when an invitee or licensee

of [CF LoDo] backed a truck into the wall estimated to require

approximately $5,000 to repair.”

• “Damages to the ceiling and roof estimated to require

approximately $5,000 to repair.”

16

• “Damages to the paint on a handicapped ramp estimated to

require approximately $4,000 to repair.”

• “Damages to a fire escape which was used so heavily that it

failed in non-emergency circumstances, in violation of City

and County of Denver ordinances, despite the fact that it was

not part of the portion of the building [that CF LoDo] was

authorized to use, in an amount that is estimated to cost

$50,000 to repair.”

• “There were other miscellaneous instances of damage to other

parts of the premises such as cabinets, doors, windows,

screens, in an amount of incurred and estimated costs

combined to repair of approximately $2,000 or more.”

Pacific Express provided a list of the costs of repairing the concrete

floor, which included “Concrete floor spot repairs” at a cost of

$1,180.

¶ 35 Pacific Express stated that it was seeking damages for breach

of the Lease in a total amount of $407,669.70. Pacific Express also

claimed that “Anderson is jointly and severally liable for all

amounts for which [CF LoDo] is liable” because “Anderson

personally guaranteed all obligations of [CF LoDo] under the Lease.”

17

¶ 36 CF LoDo’s defenses included, among other things, that

“[d]efendants have paid all amounts due under the Lease,” “[Pacific

Express] has not provided proof to substantiate its alleged operating

costs and other charges of additional rent,” “[d]efendants deny that

it caused any damages to the Premises beyond normal wear and

tear,” and “[defendants deny that some of the alleged damages were

the result of actions of the Defendants, including any damage to the

railings and fire escape.”

¶ 37 Both parties called numerous lay and expert witnesses to

testify. Most of this testimony addressed Pacific Express’s claim of

excessive wear and tear.

¶ 38 The manager testified extensively about Pacific Express’s

claims of unpaid Lease payments and excessive wear and tear.

¶ 39 At closing arguments, CF LoDo admitted liability for unpaid

rent for September 2016; unpaid triple net expenses (at the initial

estimate) for July, August, and September 2016; some excessive

wear and tear to the concrete floor (in the form of nails or screws

put into the concrete floor) with a repair cost of $1,180; and some

excessive wear and tear to two columns, drywall, baseboards, and

18

painting. But CF LoDo denied liability on all Pacific Express’s other

claims for breach of the Lease.

¶ 40 In its oral findings of fact and conclusions of law, the court

found as follows regarding the claims of excessive wear and tear:

[B]ecause the evidence that was provided of

this, of the damage that is [caused] by [Pacific

Express] primarily . . . came from [the

manager]. And I want to talk about her

testimony with regard to this excessive wear

and tear because it gave the Court a very

troubling insight into her theory as to what [CF

LoDo] caused by way of damage to the

building.

And quite frankly, after I was able to review all

of this, and reflect on her testimony, and

reflect on exactly what it is that she is claiming

from the Defendants here by way of excessive

wear and tear, I was unable to find any portion

of her testimony credible at all.

. . . .

As I go through this and I discuss just how

[Pacific Express] views the wear and tear

claim, this really is a case of an attempted

overreaching by [Pacific Express]. And this

overreaching of the damages that Pacific

Express claims was caused by [CF LoDo] in

this case causes me to question the reliability

of any of the information that [she] testified to.

¶ 41 The court then made specific findings that Pacific Express had

presented no credible evidence to support its claims of excessive

19

wear and tear to the fire escape, handicap ramp, garage wall, most

of the concrete floor, and the ceiling.

¶ 42 The trial court then found:

So the Court finds that . . . the major items of

damage to the property was simply not

supported by any credible evidence presented

by [Pacific Express]. And so therefore, I reject

[Pacific Express’s] theory as to any excessive

wear and tear.

. . . .

So I find that [Pacific Express] has failed to

sustain its burden of proof as to breach of

contract for excessive wear and tear. And

except for the minor items I’ll talk about at the

end, I am going to enter judgment for [CF

LoDo] on this aspect of [Pacific Express’s]

breach of the Lease claim.

¶ 43 The court found, as discussed, that there was no credible

evidence to support Pacific Express’s claim that CF LoDo breached

the Lease by failing to pay increased triple net charges.

¶ 44 The court then found:

[W]ith the exception of what I’m about to say, I

find in favor of [CF LoDo] and against [Pacific

Express] on all of [Pacific Express’s] claims in

this case. I find under the Lease that . . . [CF

LoDo] is a prevailing party, with the exception

of the minor items here.

20

The Defense admitted that they failed to pay

any triple net costs in July, August, and

September of 2016. The triple net cost that is

applicable is the initial estimate of $1,500 per

month for . . . these three months. [CF LoDo]

also admitted that . . . it failed to pay the

September rent. So these triple net costs for

these months and this rent payment shall be

due.

And then the Defense also admitted that there

were some . . . damage to the property that it

would be appropriate and fair for it to pay,

such as the nails that were in the floor . . . .

This is the only damage that was supported,

the damage to the floor from nails or the

screws . . . was $1,180. The Court will grant

that as an element of excessive wear and tear.

However, the other damages to the property

that [CF LoDo] admitted would be appropriate.

There’s some damage to the drywall, there was

some damage to columns in the middle, and

then there was some painting, all of which [CF

LoDo] admitted would be appropriate as

elements of excessive wear and tear. However,

no specific dollar figures could be generated for

the cost of repairing these specific damaged

items.

And as the Court found, [Pacific Express] failed

to present any credible testimony in support of

an excessive wear and tear claim. So while [CF

LoDo] is admitting that it would pay for these

kinds of things, there’s been a failure of

[Pacific Express’s] burden of proof by a

preponderance of the evidence to show what

the cost of these elements of damages would

be.

21

So the only element of damage that the Court

will impose against [CF LoDo] for excessive

wear and tear is the $1,180 for repairing the

concrete floor where the screws and nails were

. . . . So at closing argument, the Defense

stated that after the credit is given for the

$8,600 for the security deposit, there -- there

is $1,680 owing for triple net and rent costs,

and then also $1,180 owing for excessive wear

and tear, for a total damage of $2,760. And

I’m going to grant that in favor of [Pacific

Express] on these discrete items and against

[CF LoDo].

¶ 45 We conclude that the trial court did not abuse its discretion by

determining that CF LoDo was the prevailing party for purposes of

the fee-shifting provision of the Lease. See Wheeler, 74 P.3d at 503.

¶ 46 Both CF LoDo and Pacific Express prevailed in part on the

question of liability. See id. at 504. CF LoDo prevailed on most of

the disputed issues of liability. See Dennis I. Spencer Contractor,

884 P.2d at 332 (“[W]here a party prevails on the disputed main

issue [in a case], even though not to the extent of his original

contention, he will be deemed to be the successful party for the

purpose of taxing costs and attorney’s fees.”) (citation omitted). The

trial court found that CF LoDo was not liable to pay the increased

triple net expenses and was not liable for most of the alleged

22

excessive wear and tear, including excessive wear and tear to the

fire escape, handicap ramp, garage wall, most of the concrete floor,

and the ceiling.

¶ 47 But Pacific Express prevailed on a few — ultimately

undisputed — issues of liability. The trial court found that CF

LoDo was liable to pay one month of unpaid rent and three months

of unpaid triple net expenses at the initial estimate and was liable

for some items of excessive wear and tear to the concrete floor,

drywall, columns, and painting. Pacific Express also prevailed on

whether Anderson was liable for any damages assessed against CF

LoDo as guarantor.

¶ 48 Because both CF LoDo and Pacific Express prevailed in part

on the question of liability, the trial court had proper authority to,

and was in the best position to, determine who the prevailing party

was for the fee-shifting provision of the Lease. See Wheeler, 74 P.3d

at 504.

¶ 49 Yet, Pacific Express contends that it was the prevailing party

because there were only two claims in this case — one against CF

LoDo for breach of the Lease and one against Anderson as

guarantor — and it “was the party in whose favor the verdict on

23

liability was rendered on all of the claims in the case.” We disagree.

Even assuming there were only two claims, Pacific Express ignores

that CF LoDo prevailed in part on the question of liability. The trial

court found that CF LoDo was not liable to pay the increased triple

net expenses and was not liable for most of the claimed excessive

wear and tear. So, because both Pacific Express and CF LoDo

prevailed in part on the question of liability, regardless of how many

claims were brought, the trial court could determine the prevailing

party. See id.

¶ 50 Pacific Express also contends that CF LoDo only prevailed on

some “factual elements in the damages component of [the] breach of

contract claim,” not on the question of liability. We disagree. The

trial court found that CF LoDo did not breach the Lease when it

refused to pay the increased triple net expenses and did not breach

the Lease by causing excessive wear and tear to, among other

things, the fire escape, handicap ramp, garage wall, most of the

concrete floor, and the ceiling. These were findings on whether CF

LoDo was liable for breach of the Lease, not on the question of the

damages owed due to a breach of the Lease.

24

¶ 51 Pacific Express’s reliance on Dennis I. Spencer Contractor for

the proposition that it was the prevailing party is misplaced. In

Dennis I. Spencer Contractor, a contractor brought two claims

against the City of Aurora: one claim for breach of a construction

contract (which did not include a fee-shifting provision) and one

claim for breach of a settlement agreement (which included a

fee-shifting provision). See 884 P.2d at 327. A jury found the City

liable for breach of both the construction contract and the

settlement agreement. After finding that the City’s conduct in

breaching the settlement agreement gave rise to the breach of the

construction contract, the jury only awarded damages to the

contractor for breach of the construction contract. See id. at

327-28, 334. The trial court then determined that because the City

avoided paying damages for its breach of the settlement agreement,

the City was the “prevailing party” under the fee-shifting provision

of the settlement agreement and awarded attorney fees to the City.

Id. at 328. Our supreme court reversed the trial court’s

determination that the City was the “prevailing party,” and

concluded that “where a claim exists for a violation of a contractual

obligation, the party in whose favor the decision or verdict on

25

liability is rendered is the prevailing party for purposes of awarding

attorney fees.” Id. at 327.

¶ 52 But, unlike Dennis I. Spencer Contractor, in which the

contractor prevailed entirely on the question of liability, both Pacific

Express and CF LoDo prevailed in part on the question of liability

under the Lease. So, the trial court could determine, as between

Pacific Express and CF LoDo, the prevailing party. See Wheeler, 74

P.3d at 504.

¶ 53 Pacific Express’s opening brief on appeal provides quotes from

Paragraphs 11, 14, 20(b), 21(a), and 22(a) of the Lease, but Pacific

Express did not argue that, or how, these paragraphs applied.

Instead, in the opening brief, Pacific Express consistently argued

that it was the “prevailing party” under Paragraph 20(f) of the Lease.

In its reply brief, Pacific Express argued that Paragraphs 11, 14,

20(b), 21(a), and 22(a) of the Lease “provide a separate and

independent basis entitling the Landlord to an award of attorney

fees, even if attorney fees are not available under the prevailing

party clause of the Lease,” so “a prevailing party analysis is

unnecessary, and Landlord is entitled to its attorney fees and

costs.”

26

¶ 54 But Pacific Express has not cited to, and we are not aware of,

any place in the record where it raised this argument to the trial

court or where the trial court ruled on this argument. See C.A.R.

28(a)(7)(A) (In the opening brief, the appellant must state “whether

the issue was preserved, and if preserved, the precise location in

the record where the issue was raised and where the court ruled.”);

O’Quinn v. Baca, 250 P.3d 629, 631 (Colo. App. 2010) (concluding

that appellate courts are under “no obligation” to undertake a

search of the record “to determine whether (and, if so, how) issues

had been raised and resolved in the trial courts”). Thus, we will not

address this argument for the first time on appeal. See Kinney v.

Keith, 128 P.3d 297, 310 (Colo. App. 2005) (“Arguments not

presented to or ruled on by the trial court are deemed waived and

cannot be raised for the first time on appeal.”).

III. Pacific Express’s Request for Appellate Attorney Fees and Costs

¶ 55 Pacific Express requests its appellate attorney fees and costs

as the “prevailing party” under C.A.R. 39.1 and the “contractual

fee-shifting agreement in the Lease.” Because Pacific Express has

not prevailed on any issue on appeal, we deny this request.

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IV. CF LoDo’s Request for Appellate Attorney Fees and Costs

¶ 56 CF LoDo requests its appellate attorney fees and costs as the

prevailing party under Paragraph 20(f) of the Lease. We grant this

request. CF LoDo has prevailed on all issues in this appeal and

therefore is the prevailing party.

¶ 57 We remand the case to the trial court to determine CF LoDo’s

reasonable attorney fees and costs on appeal and to award this

amount to CF LoDo.

V. Conclusion

¶ 58 The judgment is affirmed, and the case is remanded to the

trial court to determine CF LoDo’s reasonable attorney fees and

costs on appeal and to award this amount to CF LoDo as the

prevailing party under Paragraph 20(f) of the Lease.

JUDGE LIPINSKY and JUDGE BROWN concur.