25CA1400 Thompson v Canyon Ranch Ventures 08-20-2026 COLORADO COURT OF APPEALS
Court of Appeals No. 25CA1400 Douglas County District Court No. 25CV30199 Honorable Ben L. Leutwyler III, Judge
Clint B. Thompson, Plaintiff-Appellant, v. Canyon Ranch Ventures, LLC, a Colorado limited liability company, Defendant-Appellee.
ORDER AFFIRMED AND CASE
REMANDED WITH DIRECTIONS
Division III
Opinion by JUDGE KUHN
Freyre and Johnson, JJ., concur
NOT PUBLISHED PURSUANT TO C.A.R. 35(e)
Announced August 20, 2026
The Law Offices of Robert E. McGough, Robert E. McGough, Denver, Colorado, for Plaintiff-Appellant
Neusch Law, Erik R. Neusch, Denver, Colorado, for Defendant-Appellee
¶1 The district court awarded Canyon Ranch Ventures, LLC, respondent, attorney fees and costs under the order to show cause statute addressing spurious liens and documents (SLD statute), section 38-35-204(3), C.R.S. 2025, and C.R.C.P. 105.1. Clint B. Thompson, petitioner, appeals this award. We affirm.
I. Background
¶2 Thompson entered into a contract with Canyon Ranch to complete a number of projects, including “remodel[ing] the main level of [Thompson’s] [p]roperty [and] add[ing] a deck.” He paid for most of the projects in full, except for the “Deck Project.” Canyon Ranch, therefore, stopped working on the Deck Project and placed a mechanic’s lien on Thompson’s property.
¶3 Thompson filed a petition for an order to show cause under the SLD statute and Rule 105.1. In accordance with the SLD statute’s requirements, the court ordered Canyon Ranch to show cause why the mechanic’s lien shouldn’t be declared invalid under the SLD statute. The court also scheduled a show cause hearing.
¶4 Before the show cause hearing, Canyon Ranch moved to dismiss Thompson’s petition, “discharge the Order to Show Cause, and vacate the [show cause] hearing.” The district court construed
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the motion as being brought under C.R.C.P. 12(b)(5). Neither side objected to that characterization. The court ordered the parties to file any response or reply to the motion to dismiss before the show cause hearing. At the show cause hearing, the court first took up the motion to dismiss, and the parties engaged in oral argument on that motion. However, neither side asked the court during the hearing to permit the presentation of evidence.
¶5 Canyon Ranch argued that while the court had subject matter jurisdiction to hear the case under SR Condominiums, LLC v. K.C. Construction, Inc., 176 P.3d 866 (Colo. App. 2007), it did not have subject matter jurisdiction in “this particular show cause hearing” because the SLD statute didn’t apply. In response, Thompson argued that he was not asking the court to declare the mechanic’s lien spurious, given the holding in Tuscany, LLC v. Western States Excavating Pipe & Boring, LLC, 128 P.3d 274 (Colo. App. 2005), but rather he was asking the court to declare the lien “facially invalid as recorded, or [find that] it didn’t meet the statutory requirements.”
¶6 The court held that Thompson’s petition did not state a claim for which relief could be granted because the SLD statute didn’t apply to mechanics’ liens. The court then granted Canyon Ranch’s
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motion to dismiss. Canyon Ranch then moved for attorney fees. In a written order, the court concluded that the mechanic’s lien was not a spurious lien under Tuscany, LLC. Accordingly, it awarded attorney fees and costs to Canyon Ranch under section 38-35-204(3).
¶7 Thompson now appeals.
II. Analysis
¶8 Thompson contends that (1) he was entitled to an evidentiary hearing under the SLD statute; (2) the district court failed to conduct an evidentiary show cause hearing within the meaning of the statute; and, accordingly, (3) it erred by awarding Canyon Ranch attorney fees and costs.1 Specifically, he argues that Westar Holdings Partnership v. Reece, 991 P.2d 328 (Colo. App. 1999), “requires an evidentiary hearing before any award of fees and costs may issue.”
1 Thompson only appeals the district court’s order awarding
attorney fees and costs. Therefore, we do not consider the merits of the order dismissing Thompson’s claims.
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A. Applicable Law and Standard of Review
¶9 A lien is “an encumbrance on real or personal property as security for the payment of a debt or performance of an obligation.” § 38-35-201(2), C.R.S. 2025. One type of lien, a mechanic’s lien, “protect[s] persons whose labor or material enhances the value or the condition of another’s real property.” Seracuse Lawler & Partners, Inc. v. Copper Mountain, 654 P.2d 1328, 1330 (Colo. App. 1982); see also § 38-22-101, C.R.S. 2025 (mechanics’ lien statute).
¶ 10 A lien can be “spurious” under the SLD statute for several reasons. § 38-35-201(4)(a)-(c). For instance, a lien is spurious if the “purported lien or claim of lien . . . [i]s not provided for by a specific Colorado or federal statute.” § 35-35-201(4)(a). If a person’s “personal property is affected by a recorded or filed lien . . . that the person believes is a spurious lien . . . [they] may petition the district court . . . for an order to show cause why the lien or document should not be declared invalid.” § 38-35-204(1).
¶ 11 If, following the show cause hearing, the court determines that a lien is spurious, it “shall make findings of fact and enter an order and decree declaring the spurious lien . . . invalid[] . . . and enter[] a monetary judgment in the amount of the petitioner’s costs,
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including reasonable attorney fees.” § 38-35-204(2). However, if the court determines that the lien is not a spurious lien, “the court shall issue an order so finding and enter a monetary judgment in the amount of any respondent’s costs, including reasonable attorney fees.” § 38-35-204(3).2
¶ 12 We review de novo issues of statutory interpretation and application. See Tuscany, LLC, 128 P.3d at 277. However, “[w]e review a trial court’s decision to award attorney fees [and costs] for abuse of discretion.” Nesbitt v. Scott, 2019 COA 154, ¶ 16. A trial court abuses its discretion if its award is manifestly arbitrary, unreasonable, or unfair. Id.
B. Preservation
¶ 13 Canyon Ranch argues that Thompson failed to preserve the issues on appeal because he “did not request or demand an evidentiary hearing, and he did not object to the district court going forward without an evidentiary hearing that involved witnesses and
2 Another division of this court noted that the legislative history
described the show cause “hearing provision as a ‘fail-safe mechanism’ because there was ‘no chance’ a legitimate lien could be discharged through use of a show cause hearing.” Westar Holdings P’ship v. Reece, 991 P.2d 328, 331 (Colo. App. 1999).
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exhibits.” For his part, Thompson argues that he preserved the issues on appeal in his “Opposition to Respondent’s Motion for Attorney Fees and Costs.”
¶ 14 In order to preserve an issue for appeal, the issue must be “brought to the district court’s attention so that the court has an opportunity to rule on it.” Grant Bros. Ranch, LLC v. Antero Res. Piceance Corp., 2016 COA 178, ¶ 11. In Thompson’s opposition to Canyon Ranch’s motion for attorney fees and costs, he argued that Canyon Ranch is not entitled to fees and costs because the court failed to conduct a show cause hearing within the meaning of the SLD statute. In its subsequent order, the court acknowledged that while it didn’t “take evidence regarding the lien, . . . it is the result of the show cause hearing, not the manner in which the hearing was held, that matters.” The court then held that because Canyon Ranch “established” that the lien was not a spurious lien, it was entitled to attorney fees and costs under the SLD statute.
¶ 15 Because Thompson raised these issues before the district court, and the district court ruled on them, we conclude that the issues are preserved for appeal.
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C. The Court Did Not Err by Awarding Attorney Fees and Costs to Canyon Ranch
¶ 16 A prior division of this court held that because mechanics’ liens are provided for by a specific Colorado statute — the General Mechanics’ Lien statute, see §§ 38-22-100.3 to -133, C.R.S. 2025 — “all such liens are excluded from the definition of ‘spurious liens’ by [section] 38-35-201(4)(a) and therefore they cannot be invalidated on that basis.” Tuscany, LLC, 128 P.3d at 278.
¶ 17 Here, citing Tuscany, LLC, the district court noted that the SLD “statute does not apply to mechanics’ liens.” The court further noted that although it hadn’t taken evidence at the show cause hearing, it had determined that the mechanic’s lien wasn’t a spurious lien based on the definition in the SLD statute. It then concluded that Canyon Ranch was entitled to fees and costs under the SLD statute as the respondent. In support, the court said,
The [c]ourt finds that it is the result of the show cause hearing, not the manner in which the hearing was held, that matters. The clear intent of the spurious lien statute is to award fees and costs to the prevailing party: the party who either establishes that the lien is spurious, or the party who established the lien is not a spurious lien. Here, [Canyon Ranch]
established that the lien was not a spurious lien.
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¶ 18 Nevertheless, Thompson contends that Canyon Ranch is not entitled to fees and costs because a hearing on the order to show cause is a mandatory condition before any fee award and that the district court failed to hold such a hearing because “it limited the proceeding to argument on Canyon Ranch’s motion to dismiss.” Thompson cites Westar Holdings Partnership in support of this contention.
¶ 19 In Westar, the district court ruled that the defendant’s lis pendens was not a spurious document and awarded the defendant attorney fees. 991 P.2d at 329. The plaintiff appealed the fee award, arguing that “the [district] court erred by not considering the merits of its petition based on the evidence presented at the hearing.” Id. at 330. The plaintiff further argued that the district court limited “its review to the pleaded allegations and legal argument.” Id. A division of this court ultimately held that a show cause hearing under section 38-35-204 “may not be limited to the pleaded allegations and legal argument unless the parties agree to a waiver of the right to present and have evidence considered.” Id. at 332. The division also held that the award of attorney fees was
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“premature.” The division then reversed the judgment and remanded the case for further proceedings. Id.
¶ 20 Significantly, the Westar court dealt with a lis pendens, which can be deemed a spurious document under appropriate circumstances. Notably, a lis pendens “falls under the spurious lien statute.” Shyanne Props., LLC v. Torp, 210 P.3d 490, 491 (Colo. App. 2009). Westar’s holding that the district court couldn’t limit its review to the “pleaded allegations and legal argument” makes sense in that context because the SLD statute applied and a lis pendens can be a spurious document under certain circumstances. Westar, 991 P.2d at 331-32. In other words, the court was required to consider the merits of the show cause petition “based on the evidence presented at the hearing.” Id. at 330.
¶ 21 Here, however, Thompson points us to no reason the district court had to take evidence to decide whether the lien was spurious. To the contrary, the court had to resolve that question as a matter of law because mechanics’ liens are “provided for by a specific Colorado . . . statute” and are therefore not covered by the SLD statute. § 38-35-201(4)(a); Tuscany, LLC, 128 P.3d at 278. Therefore, there was no evidence the court could have considered
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that would have changed the answer to the critical question: The mechanic’s lien was not spurious within the meaning of the SLD statute as a matter of law.3 Thus, the district court did not err by not holding a hearing before ruling on Canyon Ranch’s motion to dismiss.
¶ 22 Accordingly, the district court did not err by awarding attorney fees and costs to Canyon Ranch following the court’s determination under section 38-35-204(3) that the mechanic’s lien was not a spurious lien.4 See § 38-35-204(3) (“If, following the hearing on the order to show cause, the court determines that the lien . . . is not a
3 Even if we were to conclude that the district court erred by failing
to permit evidence at the hearing, Thompson doesn’t describe any prejudice flowing from such an error. See C.R.C.P. 61 (“The court at every stage of the proceeding must disregard any error or defect in the proceeding which does not affect the substantial rights of the parties.”); see also Wunder v. Dep’t of Revenue, 867 P.2d 178, 181 (Colo. App. 1993) (noting that error is harmless error when plaintiff neither alleged nor demonstrated any prejudice from a statutory violation). And Thompson does not point us to any evidence that he could have offered that would have allowed him to prevail in the face of the holding in Tuscany, LLC v. W. States Excavating Pipe & Boring, LLC, 128 P.3d 274 (Colo. App. 2005).
4 Because we affirm Canyon Ranch’s award of attorney fees and
costs under the SLD statute, we need not consider Thompson’s arguments that the district court had no alternative basis to award fees or Canyon Ranch’s argument that we could affirm on other grounds under section 13-17-102, C.R.S. 2025.
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spurious lien . . . , the court shall . . . enter a monetary judgment in the amount of any respondent’s costs, including reasonable attorney fees . . . .”); Tuscany, LLC, 128 P.3d at 280 (holding that the respondent was entitled to attorney fees under section 38-35-204(3) because the SLD statute doesn’t apply to mechanics’ liens); cf. SR Condos., LLC, 176 P.3d at 871 (holding that the district court erred by awarding the petitioner attorney fees and costs under section 38-35-204(2) pursuant to Tuscany, LLC because it was no longer the prevailing party).
D. Appellate Attorney Fees
¶ 23 Canyon Ranch requests an award of attorney fees on appeal under C.A.R. 39.1. It argues that because it was awarded attorney fees and costs under the SLD statute and Rule 105.1, it is also entitled to appellate fees for successfully defending this appeal.
¶ 24 “When a party is awarded attorney fees for a prior stage of the proceedings, it may recover reasonable attorney fees and costs for successfully defending the appeal.” Active Release Techs., LLC v. Xtomic, LLC, 2017 COA 14, ¶ 17 (quoting Kennedy v. King Soopers Inc., 148 P.3d 385, 390 (Colo. App. 2006)). This principle applies in
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the spurious lien context. Evans v. Evans, 2019 COA 179M, ¶¶ 44- 45.
¶ 25 Thompson advances two arguments against an award of fees. First, he argues that the “request is entirely derivative of the [d]istrict [c]ourt’s award under . . . the SLD statute.” But because we affirm the district court’s award of fees, that fact supports an award of fees on appeal in this case.
¶ 26 Second, Thompson argues that his appeal “is not frivolous, groundless, or brought for purposes of delay within the meaning of [section] 13-17-102[, C.R.S. 2025],” and that an award of fees would “penalize [him] for seeking appellate review of a fee award that turns on a legitimate question of statutory authority.” Section 13-17-102 permits a court to assess attorney fees when it determines that an action lacks substantial justification. An action lacks substantial justification when it is substantially frivolous, groundless, or vexatious. § 13-17-101.5(1), C.R.S. 2025. We do not conclude that Thompson’s appeal is substantially frivolous, groundless, or vexatious, and we do not award appellate fees under that statute. Nonetheless, section 13-17-102 only provides one basis for a court to award fees. And that section does not nullify the statutory
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mandate in section 38-35-204, which is an entirely separate basis requiring an award of fees. When a party brings a claim under the SLD statute — and the court determines the lien is not spurious — then the other party is entitled to its attorney fees.
¶ 27 In the end, we agree with Canyon Ranch. Because we affirm the district court’s order, Canyon Ranch is entitled to an award of its reasonable appellate attorney fees incurred in defending this appeal under section 38-35-204. We remand this matter to the district court to determine the amount of this award. C.A.R. 39.1.
III. Disposition
¶ 28 The order is affirmed. The case is remanded to the district court to determine and award Canyon Ranch its reasonable appellate attorney fees.
JUDGE FREYRE and JUDGE JOHNSON concur.