Pentelute v. Batenburg

• Court: Colorado Court of Appeals
• Decided: December 19, 2024
• Docket: 24CA0137
• Status: Unpublished

Opinion

24CA0137 Pentelute v Batenburg 12-19-2024

COLORADO COURT OF APPEALS

Court of Appeals No. 24CA0137 City and County of Denver District Court Nos. 19CV34536, 19CV34558 & 19CV34695 Honorable Andrew J. Luxen, Judge

Justin Pentelute, Maggie Regalia, and Tellus Core, Inc.,

Plaintiffs-Appellees,

v.

Richard M. Batenburg, Jr.; Clear Cannabis, Inc.; Subtle Escape, LLC; Subtle Relief, LLC; Cliintel Capital Group Aggressive Growth IV, LLC; Batmann Consulting, Inc.; Cliintel, LLC; Cliintel Capital Management Group, LLC; and Cliintel Capital Group, LLC, d/b/a Clear Colorado Group,

Defendants-Appellants.

JUDGMENT AFFIRMED IN PART AND REVERSED IN PART, AND CASE REMANDED WITH DIRECTIONS

Division II Opinion by JUDGE FOX Johnson and Schock, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e) Announced December 19, 2024

Fortis Law Partners LLC, Cara Thornton, Henry M. Baskerville, Denver, Colorado, for Plaintiff-Appellee Justin Pentelute

No Appearance for Plaintiff-Appellee Maggie Regalia

No Appearance for Plaintiff-Appellee Tellus Core, Inc.

Haddon, Morgan and Foreman, P.C., Adam Mueller, Jacob McMahon, Denver, Colorado, for Defendant-Appellant Richard M. Batenburg, Jr. Allen Vellone Wolf Helfrich & Factor P.C., Jordan Factor, Jeremy T. Jonsen, Vandana S. Koelsch, Denver, Colorado, for Defendant-Appellant Clear Cannabis, Inc.

Recht Kornfeld, P.C., Thomas M. Rogers III, Nathan Bruggeman, Denver, Colorado, for Defendants-Appellants Subtle Escape, LLC; Subtle Relief, LLC; Cliintel Capital Group Aggressive Growth IV, LLC; Batmann Consulting, Inc.; Cliintel, LLC; Cliintel Capital Management Group, LLC; and Cliintel Capital Group, LLC, d/b/a Clear Colorado Group ¶1 Defendants, Richard M. Batenburg, Jr. (Batenburg); Clear

Cannabis Inc. (CCI); Subtle Escape, LLC (SE); Subtle Relief LLC (SR);

Cliintel Capital Group Aggressive Growth IV, LLC (CCAG IV);

Batmann Consulting, Inc. (Batmann); Cliintel LLC, d/b/a

EvolutionZ Consulting (Cliintel); Cliintel Capital Management Group,

LLC (CCMG); and Cliintel Capital Group, LLC, d/b/a Clear Colorado

Group (CCG) (collectively, Joint Appellants), appeal the district

court’s attorney fees judgment in favor of plaintiff Justin Pentelute.

We affirm in part, reverse in part, and remand the case with

directions to correct the attorney fees award.

I. Background

¶2 This case addresses the second of two appeals stemming from

a contractual dispute between the parties — various individuals and

entities involved in the cannabis industry. Both appeals began in

the district court as three separate cases, which were later

consolidated. The first appeal, addressed in a separate opinion,

considered Joint Appellants’ merits appeal. This opinion addresses

Joint Appellants’ attorney fees appeal. A more complete recitation of

the facts giving rise to these appeals may be found in the merits

opinion, Pentelute v. Batenburg, slip op. at ¶¶ 2-22 (Colo. App. No.

1 23CA1586, Dec. 19, 2024) (not published pursuant to C.A.R. 35(e)).

Here, we provide an overview of the facts surrounding the attorney

fees dispute.

¶3 The contractual dispute at issue concerned four agreements:

(1) the Settlement Agreement and Mutual Release (Settlement

Agreement); (2) the Stock Redemption Agreement; (3) the Secured

Promissory Note (Promissory Note); and (4) the Security Agreement.

In January 2023, Judge Buchanan — who presided over trial —

issued findings of fact and conclusions of law, finding, as relevant

here, that certain Joint Appellants breached the Promissory Note

and Security Agreement. Judge Buchanan then retired, and Judge

Luxen presided over the remaining costs and fees issues.

¶4 The day Judge Luxen received the case, Pentelute filed a fee

petition requesting attorney fees. The court then heard evidence on

fees and costs during two evidentiary hearings. In November 2023,

the district court entered a costs award for $292,408.01 in favor of

Pentelute and Tellus Core Inc. (Tellus) and against Joint Appellants.1

1 Tellus is not a party to the fees appeal but was a party in the

district court. Its role in the case is described further below and in the merits appeal.

2 In December 2023, the district court awarded Pentelute $1,582,879

in attorney fees.

¶5 Joint Appellants subsequently filed a combined motion to

amend the attorney fees award under C.R.C.P 59(a)(4) and C.R.C.P.

60(b), arguing that the court had not reduced the damages, costs, or

attorney fees awards to account for $646,200 paid under the

Promissory Note before the breach. After a hearing in January

2024, the district court granted the motion and deducted $646,200

from the original fees award, reducing the attorney fees judgment

from $1,582,879 to $936,679.

II. Issues Raised on Appeal

¶6 Joint Appellants appeal the district court’s judgment awarding

attorney fees to Pentelute. First, if we reverse the judgment in favor

of Pentelute in the merits appeal, they ask us to also reverse the

attorney fees judgment in favor of Pentelute. Next, they contend

that the district court erred by awarding attorney fees for breach of

contract claims against nonparties to the contracts. Third, they

argue that the district court erred by amending the attorney fees

judgment, rather than the damages judgment, to account for

$646,200 in payments made under the Promissory Note from March

3 to October 2019. Finally, they ask us to remand to the district court

to apportion the attorney fees award to exclude fees involving Tellus

and Maggie Regalia.2 Pentelute also requests appellate attorney fees

and costs, and Tellus request appellate costs.

III. Analysis

A. Standard of Review

¶7 Contract interpretation “is a question of law that we review de

novo.” French v. Centura Health Corp., 2022 CO 20, ¶ 24.

Therefore, while we review a district court’s “prevailing party

determination under a contractual fee-shifting provision” for an

abuse of discretion, we review the interpretation of such provisions

de novo. In re Estate of Gattis, 2013 COA 145, ¶ 35. We review a

district court’s decision concerning the apportionment of attorney

fees for an abuse of discretion. Plan. Partners Int’l, LLC v. QED, Inc.,

2013 CO 43, ¶ 11. If the district court erred, we reverse only if the

error is not harmless because it affected a party’s substantial rights

by “substantially influenc[ing] the outcome of the case or impair[ing]

2 Like Tellus, Regalia is not a party to this appeal. Her role in the case is also described in more detail below and in the merits appeal.

4 the basic fairness of the trial itself.” Gebert v. Sears, Roebuck & Co.,

2023 COA 107, ¶ 30 (citation omitted); see C.R.C.P. 61.

B. Because We Affirm on the Merits, We Generally Affirm the Attorney Fees Judgment

¶8 Joint Appellants ask us to vacate the attorney fees judgment if

we reverse the underlying merits judgment. Pentelute argues that,

even if we reverse the merits judgment, he remains entitled to

attorney fees under the Promissory Note; Security Agreement;

Settlement Agreement; and civil theft statute, section 18-4-405,

C.R.S. 2024. Because we do not reverse most of the merits

judgment, we need not address these arguments. See K9Shrink,

LLC v. Ridgewood Meadows Water & Homeowners Ass’n, 278 P.3d

372, 379 (Colo. App. 2011) (“Because of our resolution of the merits,

we necessarily affirm the trial court’s award of attorney fees and

costs . . . .”). Except as provided in Part III.D below, we affirm the

attorney fees judgment in Pentelute’s favor.

C. The Settlement Agreement Supports an Award of Contractual Attorney Fees Against the Joint Appellants

¶9 Joint Appellants next ask us to find that the district court

erroneously held them jointly liable for contractual attorney fees,

arguing that they were not all parties to the breached agreements.

5 This argument mirrors an issue raised in the merits appeal, in

which Joint Appellants argued that the court erroneously held

nonparties to the Promissory Note and Security Agreement liable for

breach of contract. In this appeal, they contend that, just as

nonparties to a contract cannot be liable for its breach, nonparties

cannot be responsible for attorney fees under a contractual fee-

shifting provision. As in the merits appeal, Joint Appellants argue

that those who were only parties to the Settlement Agreement

cannot be liable under the Promissory Note or Security Agreement.

¶ 10 All Joint Appellants were parties to the Settlement Agreement,

and they all raised either affirmative claims or defenses, alleging

that Pentelute improperly retained their property. The district court

found that Pentelute did not materially breach the Settlement

Agreement by retaining this property. Therefore, Pentelute prevailed

on the claims related to the Settlement Agreement, and the

Agreement provides that in “any action . . . brought to enforce any

provision of this Settlement Agreement . . . the successful party

shall . . . be entitled to recover reasonable attorney’s fees.”

¶ 11 Moreover, Pentelute would have expended the same amount of

attorney fees to defend Joint Appellants’ allegations and to enforce

6 one or more obligations contained in the documents incorporated

into the Settlement Agreement. See Hill v. Affirmed Hous. Grp., 172

Cal. Rptr. 3d 811, 815-17 (Ct. App. 2014) (Both defendants

“asserted the joint defenses, and their counsel would have [done] the

same legal research and analysis in preparing those defenses.”). The

evidence and arguments presented were “inextricably intertwined”

such that it was reasonable to assess attorney fees against all Joint

Appellants. Regency Realty Invs., LLC v. Cleary Fire Prot., Inc., 260

P.3d 1, 7-9 (Colo. App. 2009) (finding parties’ claims to be

inextricably intertwined). Accordingly, the district court did not err.

¶ 12 Therefore, although we concluded in the merits appeal that

nonparties to the Promissory Note and Security Agreement could not

be held liable for breaching those agreements, Pentelute, No.

23CA1586, slip op. at ¶ 39, we conclude here that those Joint

Appellants may properly be held liable for attorney fees under the

Settlement Agreement’s fee-shifting provision.

D. The Court Erred by Applying Payments Made Under the Promissory Note to Offset Attorney Fees

¶ 13 Joint Appellants contend that the district court should have

applied $646,200 in pre-breach payments made under the

7 Promissory Note to offset the principal due under the Promissory

Note, rather than applying the payments to offset Pentelute’s

attorney fees award. For the reasons stated in the merits appeal, we

agree in part and remand to the district court accordingly.3 Id. at

¶¶ 74-91. As we explained there, because the district court’s error

increased the damages award against Joint Appellants by more than

the $646,200 that it applied to offset attorney fees, the error was not

harmless. Id. at ¶ 90; see C.R.C.P. 61; Gebert, ¶ 30.

¶ 14 Consistent with the merits appeal, we therefore remand to the

district court to amend the attorney fees and damages judgments by

removing the deduction for pre-breach payments from the attorney

fees award and instead applying those payments to the principal

and interest due on the Promissory Note at the time the payments

were made. We only remand the attorney fees award in light of our

conclusion that the $646,200 in pre-breach payment should have

been applied to offset damages, not attorney fees; on remand, the

3 In their merits appeal, Joint Appellants raised the same argument

with respect to the court’s damages award. Here, we remand with respect to attorney fees for the same reasons that we remanded there with respect to damages.

8 court is to amend the attorney fees award to reflect the amount

originally awarded before it deducted the pre-breach payments.

E. The Court Did Not Err by Declining to Apportion Attorney Fees

¶ 15 Joint Appellants next argue that the district court erred by

failing to apportion Pentelute’s attorney fees award to exclude fees

involving Regalia and Tellus.4 Specifically, they argue that, because

Regalia and Tellus were not parties to the contracts with fee-shifting

provisions, there was no basis to award their attorney fees.

Similarly, they contend that Pentelute — who paid Regalia’s and

Tellus’ attorney fees — could not recover attorney fees for work

performed for Tellus and Regalia’s dismissed claims.

1. Preservation and Additional Facts

¶ 16 The parties disagree about whether this issue was preserved.

Citing the joint opposition filed in response to Pentelute’s fee

petition, Pentelute contends that only Cliintel, SE, SR, and Batmann

preserved the issue. However, Joint Appellants correctly indicate

that CCI, Batenburg, CCG, CCAG IV, and CCMG joined the pleading

for which Pentelute concedes partial preservation. Indeed, Joint

4 Pentelute created and ran Tellus. Regalia, an accountant, oversaw Cliintel’s finance department. She also worked for Tellus.

9 Appellants specifically indicated that they were responding

collectively “rather than submitting separate oppositions for each

defendant.”5 Additionally, in a combined request for a hearing on

attorney fees and costs, all Joint Appellants asked the court to

address, “whether apportionment is required for Plaintiff’s voluntary

joint representation of Maggie Regalia and Tellus.” The issue was

revisited during the fee hearings. We therefore conclude that Joint

Appellants preserved this issue. See Gebert, ¶ 25 (Preservation

requires raising “‘the sum and substance of the argument’ [in] the

district court.”) (citation omitted).

¶ 17 In one of the consolidated cases, Cliintel brought claims

against Regalia for breach of fiduciary duty; Tellus for aiding and

abetting that breach; and Regalia and Tellus for unjust enrichment.

Regalia and Tellus then filed a counterclaim and third-party

complaint against Cliintel and Batenburg, respectively, alleging

defamation. In April 2022, the parties stipulated to dismiss the

defamation counterclaims. In May 2022, the parties orally notified

5 CCG, CCAG IV, and CCMG also submitted separate oppositions

concerning issues specific to them but joined all issues raised in the joint opposition.

10 the court of their intent to dismiss all claims against Regalia, which

would effectively dismiss her as a party. On the last day of trial,

before closing arguments, the court orally dismissed all claims

involving Regalia.6

¶ 18 While the claims discussed above were the only claims

involving Regalia, the same is not true of Tellus. In addition to the

claims for aiding and abetting Regalia’s alleged breach and for

unjust enrichment, Cliintel brought five claims against Pentelute

and Tellus and three separate claims against Tellus.

¶ 19 When the district court entered its findings of fact and

conclusions of law, it addressed four claims against Tellus and

Pentelute and two claims against only Tellus.7 The claims against

Tellus and Pentelute included civil theft, conversion, civil

conspiracy, and misappropriation of trade secrets, while the

additional claims against Tellus included tortious interference and

6 The district court discussed issuing a written dismissal order, but

the parties do not cite to one, nor could we identify one in the record. 7 In a footnote, the court indicated that it had considered the

parties’ remaining claims for trial identified in a trial management order but was only addressing those claims or defenses for which evidence had been presented, deeming any other claims or defenses abandoned.

11 unjust enrichment. All six claims involved Cliintel’s allegation that

Pentelute and Tellus improperly retained and used Cliintel’s

property. On each claim, the court found in Tellus’ and Pentelute’s

favor.

¶ 20 Before the court’s attorney fees award, Pentelute deducted

$25,174 from its attorney fees request for “fees specifically relating

only to Regalia and/or Tellus,”8 despite maintaining that he was

nonetheless entitled to these fees given the overlap among claims.

In awarding attorney fees to Pentelute, the court considered but

rejected Joint Appellants’ request for a further apportionment of

fees. The court reasoned that the claims were all intertwined and

acknowledged that Pentelute had already subtracted fees applicable

only to Regalia and Tellus.

2. Applicable Law

¶ 21 “[T]he essential goal in shifting fees . . . is to do rough justice,

not to achieve auditing perfection,” and district courts may consider

“their overall sense of a suit, and may use estimates in calculating”

attorney fees awards. Fox v. Vice, 563 U.S. 826, 838 (2011).

8 Presumably, Pentelute did this in anticipation of Joint Appellants’

various oppositions to his fee petition.

12 Appellate courts, in turn, must give the district court’s fee

determinations substantial deference. Id. Similarly, we defer to the

district court’s “decision to allocate costs between parties or instead

impose joint and several liability.” Schuessler v. Wolter, 2012 COA

86, ¶ 89; see also Rocky Mountain Festivals, Inc. v. Parsons Corp.,

242 P.3d 1067, 1074 (Colo. 2010) (noting that “whether claims are

interrelated or segregable” is a fact-sensitive inquiry).

¶ 22 When a party prevails on some claims but not others, the

district court need not always apportion the attorney fees award to

reflect only the claims upon which the party prevailed. Id. at 1073;

see also Hale v. Erickson, 23 P.3d 1255, 1258 (Colo. App. 2001)

(reaching a similar conclusion regarding apportionment among

plaintiffs). When claims are clearly different and “based on different

facts and legal theories,” apportionment is likely warranted. Rocky

Mountain Festivals, 242 P.3d at 1073 (quoting Hensley v. Eckerhart,

461 U.S. 424, 435 (1983)). However, our supreme court has

expressly declined to adopt a rule of mandatory apportionment.

QED, ¶ 25.

¶ 23 Conversely, if there are multiple claims that ‘“involve a

common core of facts’ or [are] ‘based on related legal theories,’”

13 apportionment between successful and unsuccessful claims may not

be warranted. Rocky Mountain Festivals, 242 P.3d at 1073

(alteration omitted) (quoting Hensley, 461 U.S. at 435). In such

cases, “[m]uch of counsel’s time will be devoted generally to the

litigation as a whole, making it difficult to divide the hours expended

on a claim-by-claim basis.” Hensley, 461 U.S. at 435.

3. Analysis

¶ 24 Here, we cannot say that the district court abused its

discretion by declining to apportion fees beyond the amounts that

Pentelute voluntarily withdrew from his request. See QED, ¶ 11.

First, Joint Appellants argue that apportionment was required

because Tellus and Regalia were not parties to the breached

agreements entitling Pentelute to attorney fees and were not

otherwise entitled to attorney fees. Yet the claims for which the

district court ruled in Tellus’ favor shared “a common core of facts”

with claims on which Pentelute prevailed and for which he is entitled

to attorney fees. Rocky Mountain Festivals, 242 P.3d at 1073

(quoting Hensley, 461 U.S. at 435). Pentelute brought breach of

contract claims against Joint Appellants to which their primary

defense was that Pentelute’s alleged breach of the Settlement

14 Agreement excused their nonperformance. Specifically, Joint

Appellants argued that Pentelute retained their property in violation

of the Settlement Agreement.

¶ 25 Ultimately, the court concluded that “Pentelute’s failure to

return or destroy the contents of his hard drive was [not] a ‘material’

breach of the contract, excusing Batmann’s and its affiliates further

performance.” The court then found in Pentelute’s favor on his

breach of contract claim. Because the breached contracts contained

fee-shifting provisions and because both parties brought claims to

enforce the Settlement Agreement, Pentelute was entitled to attorney

fees as the prevailing party. Although Tellus was not a party to

these agreements, the claims against Tellus, and upon which Tellus

prevailed, involved the same allegations about the retention of Joint

Appellants’ property. Further, because the same firm represented

Tellus and Pentelute, it would be difficult to “divide the hours

expended on a claim-by-claim basis” when the claims shared so

much factual similarity. Hensley, 461 U.S. at 435. Accordingly, the

court did not abuse its discretion by declining to apportion the fees

related to Tellus.

15 ¶ 26 We reach the same conclusion with respect to Regalia. While

she was not a party to the breached agreements, and the claims

involving her had been dismissed when the court issued its findings

of fact and conclusions of law, Cliintel’s allegations against Tellus

and Pentelute greatly involved Regalia’s conduct. For example,

Cliintel described Regalia as its “controller” and alleged that Tellus

directed Regalia and Pentelute “to infiltrate, access, and use

Cliintel’s protected information for Tellus’ benefit,” citing Cliintel’s

original complaint against Regalia and Tellus. In its claims against

Tellus and Pentelute, Cliintel repeatedly mentioned Regalia and her

conduct to support its allegations. Pentelute’s fee expert also

testified that the allegations against Regalia “went straight to the

heart of our breach of contract claim.”

¶ 27 Next, Joint Appellants argue that the issue before us is not

apportionment among claims but apportionment among parties;

thus, apportionment among claims is not dispositive of whether

apportionment is required among parties when some parties are

entitled to attorney fees and others are not. We are not persuaded

that this distinction warrants a different result. Joint Appellants

cite Newport Pacific Capital Co. v. Waste, 878 P.2d 136 (Colo. App.

16 1994), for the contention that apportionment among parties differs

from apportionment among claims. In Newport, a division of this

court considered whether the district court erred by failing to

apportion attorney fees to exclude fees incurred in a companion case

involving a different defendant but identical issues. Id. at 140.

¶ 28 The court held that, in multi-party cases where an attorney

fees award “is entered against only one [party], the trial court, to the

extent practical, should apportion the fees so that only those fees

incurred with regard to that party are awarded.” Id. (emphasis

added). The court was “unable to determine whether the trial court

properly allocated, or could allocate,” fees between the two cases

and remanded for such an allocation “if practicable.” Id. Here, the

district court explicitly considered and rejected apportionment.

Furthermore, Newport considered apportionment between two

different cases with different defendants but similar issues. There

was no suggestion that the cases in Newport involved overlapping

factual circumstances, such as here, where the claims involving

Pentelute involved facts concerning Tellus and Regalia. For this

reason, apportionment may not have been practicable. See id.

17 ¶ 29 Joint Appellants also rely on a case in which a division of this

court determined that an assignee could not recover attorney fees

incurred for its third-party beneficiary claims under a subcontract.

See Regency, 260 P.3d at 7-8. The same firm initially represented

both plaintiffs, Regency and Williams, and Regency paid both

plaintiffs’ fees. Id. at 3-4. Later, Regency retained separate counsel.

Id. at 4. Although the court concluded that Regency could not

recover attorney fees as a third-party beneficiary, it noted that

“except as to work of Regency’s separate law firm . . . some such fees

may be recoverable . . . because they were inextricably intertwined

with advancing Williams’ claims.” Id. at 8-9 (remanding to the

district court to make specific findings about apportionment).

¶ 30 Regency does not support Joint Appellants’ argument that

apportionment is required here. In declining to apportion fees, the

district court specifically cited Regency and acknowledged its duty to

apportion fees if possible. The court also noted that apportionment

may not be appropriate if claims are “inextricably intertwined,”

which Regency supports. Additionally, while the district courts in

Regency and Newport did not make specific findings with respect to

apportionment, the district court here did. Those findings are

18 entitled to our deference, see Schuessler, ¶ 89, and we cannot say

that the district court abused its discretion by declining Joint

Appellants’ request for a fee apportionment.

¶ 31 We appreciate Joint Appellants’ argument that, had Tellus and

Regalia retained their own attorneys, apportionment may have been

easier. However, Regency, which considered a similar joint

representation, weighs against finding this fact dispositive.

Moreover, even if Tellus, Regalia, and Pentelute obtained separate

counsel, Pentelute likely would have incurred fees related to Tellus

and Regalia in defending and prosecuting his own claims, which

necessarily involved Tellus and Regalia. For example, Pentelute’s fee

expert testified repeatedly that Regalia would likely have been

deposed and testified, even if she were not a party. Moreover, while

Joint Appellants assert that the fees attributable to Regalia and

Tellus could have been apportioned, Pentelute’s expert

acknowledged on cross-examination that, for many of the disputed

billing entries, it was difficult to determine which related specifically

to Regalia’s separate claims or Pentelute’s claims involving Regalia

as a witness.

19 ¶ 32 Finally, Joint Appellants emphasize testimony from Pentelute’s

fee expert who stated that Pentelute was not entitled to recover fees

incurred on Regalia’s and Tellus’ behalf and that Regalia could not

have recovered some fees had separate counsel represented her.

But the district court heard this testimony and rejected

apportionment. The district court also noted that it “analyzed each

time entry submitted” by Pentelute’s attorneys. Moreover, citing

evidence from the fee hearings, the court deducted fees where

Pentelute’s expert admitted certain entries should have been

deleted. Given the court’s thorough review and in light of the

deference we must give its findings, we will not second-guess the

court’s determination that the claims were sufficiently intertwined so

as to warrant no apportionment. See Fox, 563 U.S. at 838;

Schuessler, ¶ 89.

¶ 33 Even if there were some fees included that should not have

been, the goal is “rough justice,” not “auditing perfection.” Fox, 563

U.S. at 838. Particularly because this case involved years of

litigation and numerous related claims, it is impractical to comb

through hundreds of billing entries and speculate which entries

possibly related to claims involving only Tellus and Regalia separate

20 from Pentelute’s claims. The fact that Pentelute and the district

court removed some, but not all, fees relating to Tellus and Regalia

does not change our analysis.9 Given the complexity and length of

this case, we affirm the district court’s decision not to apportion the

attorney fees award.

IV. Appellate Attorney Fees and Costs

¶ 34 Pentelute contends that he is entitled to appellate attorney

fees and costs in both this appeal and the merits appeal under

several authorities, including C.A.R. 39 and 39.1. Under Rule

39(a)(2), we may only assess costs against Joint Appellants if we

affirm the appeal in its entirety. If we mostly affirm, “costs are taxed

only as ordered by the trial court.” C.A.R. 39(a)(4). Because we

affirm in part, we remand to the district court to determine whether,

and to what extent, Pentelute may recover appellate costs under

Rule 39.

9 Joint Appellants contend that the district court erroneously

accepted Pentelute’s assertion that all fees regarding Tellus and Regalia had been removed when the evidence suggested otherwise. However, Pentelute voluntarily removed some of these fees; the district court did not order him to do so. Furthermore, because the court properly concluded that apportionment was not necessary, it was not required (as Joint Appellants suggest) to determine whether Pentelute had removed all fees concerning Tellus and Regalia.

21 ¶ 35 In the merits appeal, “Tellus also requests costs on appeal.”

There is no further analysis beyond this sentence and a citation to

Rule 39.10 We decline Tellus’ request for costs because none of the

arguments raised in the merits appeal concern Tellus. Indeed, the

answer brief in the merits appeal states that Tellus “is a party on

appeal only as to the award of costs.” Moreover, while, unlike Rule

39.1, Rule 39 does not explicitly require more than “[m]ere citation

to [the] rule,” Tellus’ conclusory request is insufficient to warrant an

award of appellate costs. See Andres Trucking Co. v. United Fire &

Cas. Co., 2018 COA 144, ¶ 63 (declining a similarly brief request for

attorney fees and costs under Rule 39 and the former Rule 39.1,

before it was amended to require more than a citation).

¶ 36 Pentelute also asks us to award his appellate attorney fees

under Rule 39.1. Although Pentelute merely cites the rule in a

string citation, he does set forth “the legal and factual basis” for the

requested award beyond this citation. C.A.R. 39.1. Specifically, he

cites two cases awarding appellate attorney fees to parties awarded

10 The briefs in this case, the fees appeal, do not include a similar

request.

22 attorney fees in earlier proceedings.11 Additionally, Joint Appellants

seemingly concede Pentelute’s entitlement to fees and costs incurred

on appeal if he prevailed in one or both appeals. We agree for two

reasons.

¶ 37 First, Pentelute invokes the fee-shifting provisions under the

Promissory Note, Settlement Agreement, and Security Agreement.

Because the Promissory Note provides for attorney fees and costs

incurred “to defend or enforce any of [Pentelute’s] rights under [the]

Note,” we conclude that Pentelute is entitled to attorney fees and

costs on appeal with respect to issues involving the Promissory Note.

See Castle Rock Bank v. Team Transit, LLC, 2012 COA 125, ¶¶ 73-74

(interpreting a nearly identical provision and reaching the same

conclusion).

¶ 38 Second, for similar reasons, Pentelute is entitled to appellate

attorney fees and costs for issues involving the Settlement

11 Although these cases, Barret v. Investment Management

Consultants, Ltd., 190 P.3d 800, 805 (Colo. App. 2008), and Kennedy v. King Soopers Inc., 148 P.3d 385, 390 (Colo. App. 2006), were decided before C.A.R. 39.1, then C.A.R. 39.5, required more than “[m]ere citation to [the] rule,” the Rule’s amendment did not change the underlying legal basis for awarding appellate attorney fees.

23 Agreement, which allows the prevailing party to recover attorney fees

and costs “[i]n any action or proceeding brought to enforce” the

Settlement Agreement or “where any provision [of the Settlement

Agreement] is validly asserted as a defense.” As discussed, supra

Part III.C, we upheld Pentelute’s contractual attorney fees award

under the Settlement Agreement. Therefore, he is also entitled to

appellate attorney fees on this basis.

¶ 39 Pentelute next raises section 18-4-405, the civil theft statute,

as a basis for awarding his attorney fees and costs incurred on

appeal. In one case, which Pentelute cites, a division of this court

upheld a civil theft judgment and accordingly awarded appellate

attorney fees under section 18-4-405. Black v. Black, 2018 COA 7,

¶ 130. Because we affirmed the civil theft judgment against Joint

Appellants, Pentelute, No. 23CA1586, slip op. at ¶ 57, Pentelute is

similarly entitled to appellate attorney fees under this statute.

¶ 40 Lastly, Pentelute asks for fees and costs under the fraudulent

transfer statute, section 38-8-108(1)(c), C.R.S. 2024. However,

because he only cites the statute without “explain[ing] why he is

entitled to attorney fees and costs under this statute,” we do not

grant his appellate fees and costs on this basis. In re Estate of

24 Chavez, 2022 COA 89M, ¶ 50 (reaching the same conclusion under

a different statute); see also C.A.R. 39.1.

¶ 41 Because we conclude that Pentelute is entitled to at least some

of his attorney fees and costs incurred on appeal, we remand to the

district court to determine the amount of that award. See C.A.R.

39.1. However, because he only partially succeeds on appeal, the

district court may adjust the amount “to reflect the mixed result.”

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

see also Regency, 260 P.3d at 9 (awarding partial appellate attorney

fees under a contractual fee-shifting provision but declining fees for

arguments not within the scope of that provision).

V. Disposition

¶ 42 The judgment awarding Pentelute attorney fees is affirmed in

part, reversed in part, and the case is remanded to the district court

to amend the attorney fees award in accordance with Part III.D of

this opinion. On remand, the district court may also determine the

amount of appellate attorney fees and costs to which Pentelute is

entitled.

JUDGE JOHNSON and JUDGE SCHOCK concur.