Semler v. Hellerstein

2016 COA 122

• Court: Colorado Court of Appeals
• Decided: August 25, 2016
• Docket: 15CA0206
• Status: Published

Opinion

COLORADO COURT OF APPEALS 2016COA122

Court of Appeals No. 15CA0206 City and County of Denver District Court No. 14CV32364 Honorable Robert L. McGahey, Jr., Judge

R. Parker Semler,

Plaintiff-Appellant,

v.

Bruce S. Hellerstein; Perfect Place, LLC; Bruce S. Hellerstein, CPA P.C.; Charles Bewley; and Berenbaum Weinshienk, P.C.,

Defendants-Appellees.

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

Division II Opinion by JUDGE ASHBY Webb and Plank*, JJ., concur

Announced August 25, 2016

Semler and Associates, P.C., R. Parker Semler, Jeremy Goldblatt, Matthew Nelson, Denver, Colorado, for Plaintiff-Appellant

Podoll & Podoll, P.C., Richard B. Podoll, Robert C. Podoll, Robert A. Kitsmiller, Greenwood Village, Colorado, for Defendants-Appellees Bruce S. Hellerstein; Perfect Place, LLC; and Bruce S. Hellerstein, CPA P.C.

Wheeler Trigg O’Donnell LLP, Carolyn J. Fairless, Denver, Colorado, for Defendants-Appellees Charles Bewley; and Berenbaum Weinshienk, P.C.

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.S. 2015. ¶1 Plaintiff, R. Parker Semler, appeals from the trial court’s order

granting the motions to dismiss of defendants, Bruce S. Hellerstein;

Perfect Place, LLC; Bruce S. Hellerstein, CPA P.C.; Charles Bewley;

and Berenbaum Weinshienk, P.C., and denying Semler’s motion to

amend his complaint. Semler also appeals from the trial court’s

denial of his motion for postjudgment relief and its award of

attorney fees and costs in defendants’ favor. We affirm in part,

reverse in part, and remand the case for further proceedings.

I. Background

¶2 Semler and Perfect Place are both members of the 1940 Blake

Street Condominium Association (Association). Hellerstein owns

and controls both Perfect Place and Bruce S. Hellerstein, CPA P.C.

(collectively, the Perfect Place defendants). Hellerstein also served

as treasurer of the Association when he allegedly committed the

conduct discussed below. Bewley is an attorney employed by the

law firm of Berenbaum Weinshienk, P.C. At all relevant times,

Bewley represented Hellerstein and his two corporate entities.

¶3 The current litigation stems from a related quiet title action in

which Perfect Place asked the court to determine that it was the

rightful owner of parking spaces C, D, and E. According to Semler,

1 he had acquired title to parking space C more than seven years

before this litigation began. He also acquired title to parking space

D through a deed of trust and for significant consideration. Perfect

Place asserted that it had acquired title to parking spaces C, D, and

E via a quitclaim deed from John Watson and two entities that

Watson controlled in June 2011. The court presiding over the quiet

title action determined that Semler owned parking spaces C and D,

while Perfect Place owned parking space E.

¶4 Perfect Place appealed and that appeal is currently pending

before another division of this court.

¶5 Semler then brought the current suit claiming that Bewley and

Hellerstein devised a scheme to gain title to Semler’s building

parking spaces C and D. Semler alleged that Bewley and

Hellerstein, through various misrepresentations made to Watson,

induced Watson to sign deeds conveying Semler’s parking spaces to

Perfect Place. According to Semler, Hellerstein, as the treasurer of

the Association, breached his fiduciary duty to Semler by scheming

to take his parking spaces. Bewley, by representing Hellerstein,

conspired with and helped Hellerstein in his efforts to improperly

gain title to the parking spaces. And Berenbaum Weinshienk failed

2 to properly supervise Bewley, was vicariously liable for Bewley’s

conduct, and breached an agreement to not represent one

Association member against another. Semler’s first amended

complaint alleged claims only for breach of fiduciary duty against

Hellerstein, aiding and abetting that breach against Bewley, and

civil conspiracy against all defendants.

¶6 Defendants filed two motions to dismiss, one based on

C.R.C.P. 12(b)(5) and one based on a lack of standing. Soon

thereafter, Semler moved to amend his complaint a second time,

proposing to add claims for fraud, nondisclosure and concealment,

negligent misrepresentation, negligent supervision, vicarious

liability, and breach of contract. He also more clearly explained

that he was seeking damages for the lost income opportunities he

suffered as a result of having to defend against the quiet title

action.1

1 In his reply brief on appeal, Semler, for the first time, asserted damages based on his loss of use of the parking spaces and his inability to alienate them while the quiet title action is still pending. We decline to address these arguments as they were never presented to the trial court and have not been properly raised. See People v. Williams, 33 P.3d 1187, 1190 (Colo. App. 2001).

3 ¶7 The court granted the motions to dismiss and denied Semler’s

second motion to amend. The court also awarded attorney fees in

favor of defendants.

II. Timeliness of the Notice of Appeal

¶8 Defendants assert that Semler’s notice of appeal was untimely

and, therefore, we lack jurisdiction to consider the appeal. We

disagree.

¶9 “The timely filing of a notice of appeal is a jurisdictional

prerequisite to appellate review.” Estep v. People, 753 P.2d 1241,

1246 (Colo. 1988). Under C.A.R. 4(a), the notice of appeal must be

filed “within 49 days of the date of the entry of the judgment,

decree, or order from which the party appeals.”

¶ 10 As relevant here, one method by which to calculate the

forty-nine-day period is from the date the court grants or denies a

Rule 59 motion. C.A.R. 4(a). Thus, “[t]he timely filing of a motion

pursuant to C.R.C.P. 59 tolls the time for filing a notice of appeal.”

Goodwin v. Homeland Cent. Ins. Co., 172 P.3d 938, 944 (Colo. App.

2007).

¶ 11 Nevertheless, defendants argue that because there was no trial

and Semler made the same arguments in his postjudgment motion

4 as he had in earlier pleadings, Semler’s motion did not qualify as a

C.R.C.P. 59 motion. They further argue that because Semler asked

the court to vacate its orders of dismissal, the postjudgment motion

could only be construed as a motion to vacate the judgment under

C.R.C.P. 60. And, because a postjudgment motion pursuant to

C.R.C.P. 60 does not toll the time within which to file a notice of

appeal, Semler’s appeal is untimely.

¶ 12 We find the out-of-state cases cited by defendants

distinguishable,2 follow those prior Colorado cases that construe

motions such as Semler’s — filed in cases that ended before a trial

— as motions under C.R.C.P. 59, and conclude that this appeal is

timely. See SMLL, L.L.C. v. Daly, 128 P.3d 266, 269 (Colo. App.

2005); Small v. Gen. Motors Corp., 694 P.2d 374, 375 (Colo. App.

1984).

¶ 13 Here, the day after the court entered its order dismissing

Semler’s claims, Semler filed a motion for reconsideration pursuant

to C.R.C.P. 59. The court denied the motion about one month later

2See Hyde v. Anania, 578 N.W.2d 647 (Iowa 1998); Brown v. Brown, No. 659, 1988 WL 36360, at *2 (Ohio Ct. App. Mar. 29, 1988); Johnson v. Johnson, 515 A.2d 960, 962 (Pa. Super. Ct. 1986).

5 on December 22, 2014. Exactly forty-nine days later, on February

9, 2015, Semler filed his notice of appeal. Therefore, we conclude

the appeal was timely filed and that we do have jurisdiction to

consider the appeal.

III. Motion to Amend Complaint

¶ 14 Semler contends that the trial court erred by denying his

motion for leave to amend his complaint a second time.

¶ 15 We generally review a trial court’s decision to grant or deny a

motion to amend for an abuse of discretion. See Benton v. Adams,

56 P.3d 81, 85 (Colo. 2002). However, “[w]hen a trial court denies

leave to amend on grounds that the amendment would be futile

because it cannot survive a motion to dismiss, we review that

question de novo as a matter of law.” Id.

¶ 16 Our courts favor a liberal policy toward amending pleadings.

Under C.R.C.P. 15(a), “where leave of court is required to amend a

pleading, ‘leave shall be freely given when justice so requires.’” Civil

Serv. Comm’n v. Carney, 97 P.3d 961, 966 (Colo. 2004) (quoting

C.R.C.P. 15(a)). In determining whether to grant leave, the court

should consider the totality of the circumstances. Id. Some

grounds for denying a motion to amend include “undue delay, bad

6 faith, dilatory motive, repeated failure to cure deficiencies in the

pleadings via prior amendments, undue prejudice to the opposing

party, and futility of amendment.” Benton, 56 P.3d at 86.

¶ 17 Here, in its omnibus order dismissing the case, the trial court

denied Semler’s motion to amend his complaint (for the second

time) but stated no basis for doing so other than articulating why

Semler had no standing to pursue any alleged fraud against or

misrepresentation to Watson, the prior owner of the parking spaces.

And the court’s dismissal of the action was specifically premised on

Semler’s fraud claims. These claims were not included in Semler’s

initial or amended complaint and were new to the second amended

complaint. Therefore, it appears to us that even though the court

denied Semler’s motion to amend, it did in fact consider the second

amended complaint when ruling on the motion to dismiss.

Defendants acknowledge this in their answer brief.

¶ 18 We presume, therefore, that the court’s denial of Semler’s

motion to amend was premised on its dismissal of the entire action

and the futility of further proceedings. Thus, we will review the trial

court’s dismissal of the action based on Semler’s second amended

complaint.

7 IV. Standing

¶ 19 The trial court’s order dismissing the action stated:

[Semler] is not the victim of the alleged fraud that he claims occurred. . . . [Semler] fails to offer any evidence to support this claim of misrepresentation, instead offering conclusory statements in his Complaint. If Mr. Watson is the victim of fraud, then it is he who should sue the Association and/or the individuals for their role in the alleged misrepresentation. Due to lack of standing, the other legal issues addressed in Defendants’ Motions are moot.

¶ 20 We review the trial court’s decision regarding whether a

plaintiff has standing de novo. Barber v. Ritter, 196 P.3d 238, 245

(Colo. 2008). To establish standing, the court must find that the

plaintiff has suffered (1) an injury in fact (2) to a legally protected

interest. Id. at 245-46. Both prongs must be met. A plaintiff lacks

standing to sue for injuries allegedly suffered by someone else. See

Wimberly v. Ettenberg, 194 Colo. 163, 168-69, 570 P.2d 535, 539

(1977); see also Greenwood Vill. v. Petitioners for Proposed City of

Centennial, 3 P.3d 427, 439 (Colo. 2000) (“The third-party standing

rule prevents a party from asserting the claims of third parties who

are not involved in the lawsuit.”).

8 ¶ 21 Here the fraud, concealment, and misrepresentation claims

are all premised on conversations and transactions between Watson

and defendants. Semler was not involved. He asserts, however,

that the fraudulent conduct was intended to cause damage to him

— that is, to improperly acquire title to his parking spaces thereby

depriving him of their use. Even if we assume that Semler is

correct and that he has standing to assert these fraud-based claims

even though he was not the first-party victim of the fraud, we

nonetheless affirm the trial court’s dismissal of those claims. See

Rush Creek Sols., Inc. v. Ute Mountain Ute Tribe, 107 P.3d 402, 406

(Colo. App. 2004) (we may affirm the trial court’s ruling on any

grounds supported by the record).

¶ 22 Semler alleges that he suffered lost income opportunity

damages as a result of defendants’ fraudulent conduct because he

was forced to litigate his right to the parking spaces and was unable

to accept additional clients during that time. To recover damages

for fraudulent conduct, the damages must be a reasonably

foreseeable consequence of the fraud. See Restatement (Second) of

Torts §§ 435A, 548A (Am. Law Inst. 1965); see also Bridge v. Phx.

Bond & Indem. Co., 553 U.S. 639, 656-57 (2008). We conclude that

9 Semler’s claims for lost opportunity damages are too remote and

unforeseeable to be recoverable. See Bridge, 553 U.S. at 658;

Roberts v. Holland & Hart, 857 P.2d 492, 496-98 (Colo. App. 1993).

While the possibility of litigation and the potential for attorney fees

would have been foreseeable, the damages alleged here, which

resulted from Semler representing himself and foregoing the

opportunity to accept other clients, is too far removed from the

alleged fraudulent conduct to have been foreseeable by defendants.

¶ 23 Accordingly, we conclude that these claims failed to state a

claim upon which relief could be granted and should have been

dismissed under C.R.C.P. 12(b)(5). The trial court’s dismissal order,

however, fails to address Semler’s remaining, non-fraud-based

claims. Thus, we address them each in turn.

V. C.R.C.P. 12(b)(5)

¶ 24 Because Semler’s remaining claims assert conduct against

him directly, the trial court’s reasoning for dismissal based on lack

of standing does not apply. And because we may affirm the trial

court’s order on any basis supported by the record, we analyze

Semler’s remaining claims under C.R.C.P. 12(b)(5). See Rector v.

City & Cty. of Denver, 122 P.3d 1010, 1013 (Colo. App. 2005)

10 (“When a trial court does not engage in the proper C.R.C.P. 12(b)

analysis, a reviewing court need not remand if it can resolve the

issue as a matter of law.”).

¶ 25 Under C.R.C.P. 12(b)(5), a party may move to dismiss the other

party’s claims for “failure to state a claim upon which relief can be

granted.” The supreme court recently acknowledged a shift in how

Colorado courts should assess C.R.C.P. 12(b) motions to dismiss, so

that Colorado law is more closely aligned with the federal

standards. Warne v. Hall, 2016 CO 50, ¶ 29 (“Although our opinion

today does not result in an amendment to the language of our rules

of procedure, it clearly signals a shift in the considerations

according to which a motion to dismiss is to be evaluated and,

therefore, a change in the terms in which a complaint may have to

be expressed to avoid dismissal.”). Under this standard, “only a

complaint that states a plausible claim for relief survives a motion

to dismiss.” Id. at ¶ 9 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679

(2009)).

¶ 26 In contrast, under the old standard, a plaintiff failed to state a

claim upon which relief could be granted when “it appear[ed]

beyond a doubt that a plaintiff [could] prove no set of facts in

11 support of her claim which would entitle her to relief.” Pub. Serv.

Co. of Colo. v. Van Wyk, 27 P.3d 377, 385-86 (Colo. 2001); see also

Dotson v. Bernstein, 207 P.3d 911, 912 (Colo. App. 2009) (“A

complaint may not be dismissed for failure to state a claim so long

as the pleader is entitled to some relief upon any theory of law.”).

¶ 27 Warne suggests that the new standard applies retroactively,

and despite having been ordered to address this issue at oral

argument, neither party argued to the contrary. However, even

under the prior and more lenient “no set of facts” standard, we

conclude that Semler has failed to state a claim for all but one of

his claims, as discussed below.3 Regardless, in reviewing Semler’s

claims under Rule 12(b)(5), we view all allegations in the complaint

as true and in the light most favorable to the nonmoving party. See

Bly v. Story, 241 P.3d 529, 533 (Colo. 2010).

3 Because under either the former, more lenient standard or the more stringent Warne standard the result would be the same, we reject Semler’s request to remand and allow him to amend yet again in an effort to satisfy the new standard.

12 A. Civil Conspiracy

¶ 28 Semler contends that defendants conspired with each other to

obtain his parking spaces. We conclude as a matter of law that

Semler is not entitled to relief on a civil conspiracy claim.

¶ 29 The elements of a civil conspiracy claim are “(1) two or more

persons, and for this purpose a corporation is a person; (2) an

object to be accomplished; (3) a meeting of the minds on the object

or course of action; (4) one or more unlawful overt acts; and (5)

damages as the proximate result thereof.” Walker v. Van

Laningham, 148 P.3d 391, 396 (Colo. App. 2006) (quoting Jet

Courier Serv., Inc. v. Mulei, 771 P.2d 486, 502 (Colo. 1989)).

¶ 30 It is a well-settled tenet of corporate law that a director cannot

conspire with the corporation which he serves. See, e.g., Pittman v.

Larson Distrib. Co., 724 P.2d 1379, 1390 (Colo. App. 1986) (“A

corporation and its employees do not constitute the ‘two or more

persons’ required for a civil conspiracy, at least if the employees are

acting on behalf of the corporation and not as individuals for their

individual advantage.”) (citations omitted). However, Semler

claimed that “at all times relevant to the allegations” in his

complaint, Bewley was the legal representative for and an agent of

13 Perfect Place and Hellerstein.4 And whether an attorney who is

acting within the scope of his representation may conspire with his

client is an issue of first impression in Colorado.

¶ 31 Other courts that have addressed the issue generally hold that

an attorney acting within the scope of his employment cannot

conspire with his client unless the attorney acted for his sole

personal benefit. See, e.g., Farese v. Scherer, 342 F.3d 1223, 1231

(11th Cir. 2003); Heffernan v. Hunter, 189 F.3d 405, 412-13 (3d Cir.

1999). This limitation reflects that “[t]he right of a litigant to

independent and zealous counsel is at the heart of our adversary

system and, indeed, invokes constitutional concerns.” Heffernan,

189 F.3d at 413. Further, “[c]ounsels’ conduct within the scope of

representation is regulated and enforced by disciplinary bodies

established by the courts. Abuses in litigation are punishable by

sanctions administered by the courts in which the litigation

occurs.” Id.

4 The CPA firm, for which Hellerstein was the principal, was also referenced in the complaint as one of the “Perfect Place defendants” whom Semler claimed conspired to obtain ownership of the parking spaces. All of these defendants were allegedly represented by Bewley.

14 ¶ 32 Even so, other courts have recognized additional bases for a

viable conspiracy claim, such as when the attorney engages in

fraud. See Wiles v. Capitol Indem. Corp., 280 F.3d 868, 871 (8th

Cir. 2002); Marshall v. Fenstermacher, 388 F. Supp. 2d 536, 553

(E.D. Pa. 2005); see also Astarte, Inc. v. Pac. Indus. Sys., Inc., 865 F.

Supp. 693, 708 (D. Colo. 1994); Moore v. Weinberg, 644 S.E.2d 740,

750 (S.C. Ct. App. 2007) (“[A]n attorney may be held liable for

conspiracy where, in addition to representing his client, he

breaches some independent duty to a third person.”) (citation

omitted), aff’d, 681 S.E.2d 875 (S.C. 2009).

¶ 33 Here however, as discussed in Part IV above, Semler has

neither pleaded facts to support a fraud claim nor alleged that

Bewley acted for his own personal gain or otherwise acted outside

the scope of his legal representation. See Doherty v. Am. Motors

Corp., 728 F.2d 334, 339-40 (6th Cir. 1984) (concluding that the

plaintiff did not present any evidence proving the existence of a

conspiracy between the defendant and the defendant’s attorneys

because the attorneys “were motivated not by personal concerns

but by concerns for their clients”). To the contrary, Semler asserted

that “at all times relevant” to the claims, Bewley was acting within

15 the scope of his representation of the Perfect Place defendants and

his employment as an employee for defendant law firm Berenbaum

Weinshienk. Thus, we leave for a different case the issue of

deciding exactly what must be alleged to plead a viable claim

against a lawyer for allegedly conspiring with the lawyer’s client.

See Alexander v. Anstine, 152 P.3d 497, 499 (Colo. 2007) (“Because

Anstine lacked standing to bring the aiding and abetting claim

against the attorney defendants, we do not reach the second issue

regarding whether an attorney can be held liable for aiding and

abetting a breach of fiduciary duty to a non-client, . . . thereby

leaving this issue for another day.”).

¶ 34 Therefore, we conclude that this allegation fails to state a

claim upon which relief can be granted and should be dismissed.

B. Breach of Fiduciary Duty

¶ 35 Semler contends that Hellerstein, as treasurer of the

Association, breached his fiduciary duty to Semler, a member of the

Association, by engaging in self-serving and fraudulent conduct.

We conclude that Semler has not stated such a claim.

¶ 36 Generally, determining the existence of a fiduciary duty is a

question of fact; however, certain relationships may give rise to a

16 fiduciary duty as a matter of law. Mintz v. Accident & Injury Med.

Specialists, PC, 284 P.3d 62, 68 (Colo. App. 2010), aff’d, 2012 CO

50. Thus, we review such determinations de novo. Id.; see

Command Commc’ns, Inc. v. Fritz Cos., Inc., 36 P.3d 182, 186 (Colo.

App. 2001) (“The court determines as a matter of law the nature

and scope of the duty owed by a fiduciary.”).

¶ 37 “[A] fiduciary relationship exists between two persons when

one of them has undertaken a duty to act for or to give advice for

the benefit of another on matters within the relationship’s scope.”

Mintz, 284 P.3d at 68. Thus, generally, a homeowners’ association

owes a fiduciary duty to its members. McShane v. Stirling Ranch

Prop. Owners Ass’n, 2015 COA 48, ¶ 30 (cert. granted Jan. 11,

2016). And, “[u]nder section 38-33.3-303(2)(a), [C.R.S. 2015,] ‘[i]f

appointed by the declarant, in the performance of their duties, the

officers and members of the executive board are required to exercise

the care required of fiduciaries of the unit owners.’” Id. (quoting

§ 38-33.3-303(2)(a)). Accordingly, much like officers of a

corporation, the board members of a homeowners’ association owe

a fiduciary duty to both the association and its members. See

Michaelson v. Michaelson, 939 P.2d 835, 841-42 (Colo. 1997); Van

17 Schaack Holdings, Ltd. v. Van Schaack, 867 P.2d 892, 897 (Colo.

1994).

¶ 38 This duty, however, is not all encompassing. When acting on

behalf of the association or in their official capacity as board

members, or when engaging in transactions involving the

association but in their individual capacities, that fiduciary duty

exists and the board members are bound by it. But, when engaged

in transactions with other association members or with members of

the public at large, where those transactions are not conducted on

behalf of the association and do not involve the association, there

exists no fiduciary duty. See Mintz, 284 P.3d at 68-69 (“[W]here the

parties are engaged in an arm’s-length business transaction

without any special relationship of trust and confidence and

without one party assuming a duty to act in the other party’s best

interest, a fiduciary duty does not exist.”).

¶ 39 Here, Hellerstein was not acting in his role as treasurer when

he engaged in the allegedly fraudulent conduct. And the

Association was not involved in or affected by these transactions

with Watson or Semler. Rather, these transactions involved

individuals acting in their individual capacities and were unrelated

18 to the interests of the Association. We are not persuaded that

Hellerstein was bound by his fiduciary duties when acting wholly

outside the scope of his board position.

¶ 40 Therefore, under the circumstances here, Hellerstein did not

owe a fiduciary duty to Semler. Accordingly, we conclude that

Semler has failed to state a claim upon which relief can be granted.

C. Aiding and Abetting Breach of Fiduciary Duty

¶ 41 Semler contends that Bewley aided and abetted Hellerstein in

breaching his fiduciary duty. Because we have concluded that

Hellerstein did not owe Semler a fiduciary duty under these

circumstances, Bewley could not, as a matter of law, have aided

and abetted him in breaching it. Therefore, we conclude that

Semler has failed to state a claim upon which relief can be granted.

D. Negligent Supervision

¶ 42 Semler contends that Bewley’s law firm, Berenbaum

Weinshienk, negligently supervised Bewley, which caused Semler to

have to litigate his rights to the parking spaces in the quiet title

action. Again, we conclude that Semler has not stated a viable

claim.

19 ¶ 43 An employer may be directly liable for its negligent supervision

of an employee where “(1) the defendant owed the plaintiff a legal

duty to supervise others; (2) the defendant breached that duty; and

(3) the breach of the duty caused the harm that resulted in

damages to the plaintiff.” Settle v. Basinger, 2013 COA 18, ¶ 23.

To determine whether the employer owed a duty to a particular

plaintiff, we consider “the risk involved, the foreseeability and

likelihood of injury as weighed against the social utility of the

actor’s conduct, the magnitude of the burden of guarding against

injury or harm, and the consequences of placing the burden upon

the actor.” Id. at ¶ 25.

¶ 44 The duty arises only where the employer has reason to know

that the employee is likely to harm others “because of ‘his [or her]

qualities’ and ‘the work or instrumentalities entrusted to him [or

her].’” Id. at ¶ 26 (quoting Destefano v. Grabrian, 763 P.2d 275, 287

(Colo. 1988)) (emphasis omitted); see Keller v. Koca, 111 P.3d 445,

450 (Colo. 2005) (“[I]n order for a duty of care to exist, there must

be a connection between the employer’s knowledge of the

employee’s dangerous propensities and the harm caused.”). The

connection between the employer’s knowledge and the employee’s

20 dangerous propensities is crucial to establishing a duty. Keller, 111

P.3d at 450.

¶ 45 For the reasons we have stated with respect to each claim thus

far, Semler has not alleged any tortious conduct by Bewley, let

alone conduct about which his employer knew and negligently

failed to prevent. Therefore, we conclude that Semler has failed to

state a claim upon which relief can be granted.

E. Vicarious Liability

¶ 46 Semler also contends that Berenbaum Weinshienk is

vicariously liable for the tortious acts of Bewley, who was, at all

times, acting within the scope of his employment. We disagree.

¶ 47 Vicarious liability is a special form of secondary liability

whereby an employer is liable for the torts of its employees when

they are acting within the scope of their employment. First Nat’l

Bank of Durango v. Lyons, 2015 COA 19, ¶ 36; Stokes v. Denver

Newspaper Agency, LLP, 159 P.3d 691, 693 (Colo. App. 2006). In

order to find the employer liable, the court must first find the

employee liable. See Arnold By & Through Valle v. Colo. State Hosp.,

Dep’t of Insts., 910 P.2d 104, 107 (Colo. App. 1995).

21 ¶ 48 Again, here, Semler has failed to allege any actionable tortious

conduct committed by Bewley and, thus, there is no conduct for

which Bewley’s employer could be vicariously liable.

F. Breach of Contract

¶ 49 Finally, Semler contends that Berenbaum Weinshienk

breached its contract with the Association by allowing Bewley to

represent one Association member against another.

¶ 50 Semler alleges that the president of the Association “instructed

Bewley that neither he nor Berenbaum Weinshienk was to

represent the . . . Association against any member of the . . .

Association or to represent one member . . . against another” and

that Bewley agreed to those terms. Based solely on the pleading

allegations, we cannot conclude that this “instruction” was not a

contract of which Semler was an intended beneficiary.

¶ 51 Generally, an individual who is not a party to the contract may

not assert a claim for breach of that contract. See Parrish

Chiropractic Ctrs., P.C. v. Progressive Cas. Ins. Co., 874 P.2d 1049,

1056 (Colo. 1994). One exception to this general rule, however, is

in the case of third-party beneficiaries. See id.; Smith v. TCI

Commc’ns, Inc., 981 P.2d 690, 693 (Colo. App. 1999). “A third-party

22 beneficiary may enforce a contract only if the parties to that

contract intended to confer a benefit on the third party when

contracting; it is not enough that some benefit incidental to the

performance of the contract may accrue to the third party.” Everett

v. Dickinson & Co., 929 P.2d 10, 12 (Colo. App. 1996).

¶ 52 Here, as a member of the Association, Semler is arguably a

third-party beneficiary of this agreement between Bewley and the

Association. From the facts Semler has alleged, the intent of any

agreement may have been to protect Association members.

However, this question may be illuminated by evidence once the

case goes beyond the pleading stage. See Parrish, 874 P.2d at 1056

(“While the intent to benefit the non-party need not be expressly

recited in the contract, the intent must be apparent from the terms

of the agreement, the surrounding circumstances, or both.”).

¶ 53 We also conclude that Baker v. Wood, Ris & Hames,

Professional Corp., 2016 CO 5, does not require a different result.

In Baker, the plaintiffs, devisees of a testator’s estate, alleged that

the attorney representing the testator had failed to properly advise

the testator and the devisees (as intended third-party beneficiaries)

thus frustrating the testator’s intent to treat all devisees equally.

23 The supreme court reaffirmed the strict privity rule and held that

an attorney’s liability to a nonclient, for work performed on behalf of

a client, is limited to “circumstances in which the attorney has

committed fraud or a malicious or tortious act, including negligent

misrepresentation.” Id. at ¶ 35.

¶ 54 Unlike in Baker, Semler has not alleged in his breach of

contract claim that the breach occurred because the legal work

performed by Bewley for either the Association or the Perfect Place

defendants was deficient. Instead, Semler alleges that Bewley’s

representation of the Perfect Place defendants in their attempt to

acquire the parking spaces breached the contract between Bewley

and the Association because those defendants’ interests were

adverse to Semler’s. This difference undercuts the policy

considerations identified in Baker as supporting the strict privity

rule.

¶ 55 Therefore, we conclude that Semler has sufficiently pleaded a

third-party beneficiary breach of contract claim under C.R.C.P.

12(b)(5). Accordingly, we remand the case to the trial court for

further proceedings on this claim.

24 VI. Attorney Fees

¶ 56 Following its dismissal of Semler’s action, the court awarded

defendants their attorney fees under section 13-17-201, C.R.S.

2015. Semler contends that if we reverse the dismissal order, this

award must necessarily be reversed. We agree in part.

¶ 57 Section 13-17-201 provides:

In all actions brought as a result of . . . the tort of any other person, where any such action is dismissed on motion of the defendant prior to trial under rule 12(b) of the Colorado rules of civil procedure, such defendant shall have judgment for his reasonable attorney fees in defending the action.

An award for fees under this statute is appropriate where the entire

action, not just some of the claims, is dismissed. See State v.

Golden’s Concrete Co., 962 P.2d 919, 925 (Colo. 1998); Dubray v.

Intertribal Bison Coop., 192 P.3d 604, 606-07 (Colo. App. 2008). A

division of this court has further concluded that the statute applies

separately to each defendant. Smith v. Town of Snowmass Vill., 919

P.2d 868, 873-74 (Colo. App. 1996). Thus, so long as all claims

against a single defendant were dismissed, even though claims

against other defendants may survive C.R.C.P. 12(b) motions, that

defendant may recover under the statute. Id.

25 ¶ 58 Here, we have concluded that only Semler’s breach of contract

claim survives C.R.C.P. 12(b) dismissal. Thus, because that claim

was not pleaded against the Perfect Place defendants, we leave the

attorney fees award to them undisturbed. See Jaffe v. City & Cty. of

Denver, 15 P.3d 806, 813-14 (Colo. App. 2000). But the fees award

under this statute to Bewley and Berenbaum Weinshienk cannot

stand, and we reverse that portion of the court’s order. See Sotelo

v. Hutchens Trucking Co., 166 P.3d 285, 287 (Colo. App. 2007) (“[A]

defendant may not recover attorney fees under § 13-17-201 when

(1) the plaintiff’s action includes both tort and nontort claims and

(2) the defendant has obtained dismissal of the tort claims, but not

of the nontort claims, under C.R.C.P. 12(b).”).

VII. Appellate Attorney Fees

¶ 59 Berenbaum Weinshienk and Bewley have requested appellate

attorney fees under C.A.R. 39.1.5 Because those defendants were

only partially successful on appeal and because we have concluded

that they are not entitled to their trial court attorney fees under

section 13-17-201, we further conclude that they are not entitled to

5The Perfect Place defendants have not requested appellate attorney fees.

26 appellate attorney fees. See In re Marriage of Roddy, 2014 COA 96,

¶ 32; Mullins v. Med. Lien Mgmt., Inc., 2013 COA 134, ¶ 58; cf.

Dubray, 192 P.3d at 608.

VIII. Conclusion

¶ 60 We affirm the trial court’s order, albeit partially on different

grounds, dismissing all of Semler’s claims except as to his claim for

breach of contract. We remand the case to the trial court for

further proceedings on this claim alone. And we affirm the trial

court’s order awarding attorney fees to the Perfect Place defendants,

but we reverse the award of attorney fees to the remaining

defendants.

JUDGE WEBB and JUDGE PLANK concur.