24CA0520 Tremitek v Resilience 06-05-2025
COLORADO COURT OF APPEALS
Court of Appeals No. 24CA0520 Arapahoe County District Court No. 21CV30646 Honorable Elizabeth Beebe Volz, Judge
Tremitek, LLC, a Pennsylvania limited liability company,
Plaintiff-Appellant,
v.
Resilience Code, LLC, a Colorado limited liability company, and Chad Prusmack,
Defendants-Appellees.
JUDGMENT AFFIRMED IN PART AND REVERSED IN PART, ORDER REVERSED, AND CASE REMANDED WITH DIRECTIONS
Division IV Opinion by JUDGE HARRIS Yun and Martinez*, JJ., concur
NOT PUBLISHED PURSUANT TO C.A.R. 35(e) Announced June 5, 2025
Fox Rothschild LLP, Christopher T. Groen, Risa B. Brown, Denver, Colorado, for Plaintiff-Appellant
Greenberg Traurig, LLP, John A. Wharton, Camille Papini-Chapla, Denver, Colorado, Elliot Anderson, Las Vegas, Nevada, for Defendants-Appellees
*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.S. 2024. ¶1 In this action for breach of a commercial lease, plaintiff,
Tremitek, LLC (landlord), appeals the judgment awarding it
damages and attorney fees against defendants, Resilience Code,
LLC and Chad Prusmack (tenant). The landlord argues that the
court erred in (1) finding that it failed to mitigate its damages;
(2) calculating damages; and (3) determining the attorney fees
award. We agree that the court erred in calculating damages and
that the court must reconsider its attorney fees award. Accordingly,
we affirm the judgment in part and reverse it in part, reverse the
attorney fees order, and remand the case for further proceedings.
I. Background
¶2 In January 2017, the landlord and tenant executed a 128-
month lease for commercial property in Arapahoe County. Under
the “triple net” lease, the tenant was responsible for paying base
rent, which increased over time, along with condominium
association assessments and other operating expenses (condo fees)
and property taxes.
¶3 By October 2020, the tenant had stopped paying rent, which
by then was about $8,500 per month. It vacated the property
several months later, in February 2021.
1 ¶4 The landlord listed the property for sale and then, after the
tenant vacated, also for lease. Over the next year, the landlord’s
real estate broker received around 100 inquiries, approximately 30
of which “went to second base,” meaning the prospective buyers or
lessees “were fits” for the property. In one such inquiry, a ballet
company proposed leasing the property beginning in September
2021 for $7,000 in monthly rent (with six months of free rent) plus
a $30,000 credit for building improvements (the ballet offer). The
landlord did not respond to the ballet offer or any of the other
“second base” inquiries.
¶5 In the meantime, in April 2021, the landlord sued the tenant
for breach of contract. Initially, it sought to collect liquidated
damages in the amount of all unpaid rent and condo fees, but the
trial court ruled that the lease’s liquidated damages provision was
unenforceable.
¶6 The case proceeded to a bench trial in April 2022, where the
trial court found that the tenant breached the lease, but it awarded
damages only through February 2021, when the tenant vacated the
property. The court concluded that the landlord could have
2 mitigated its damages by selling or re-leasing the property by that
date.
¶7 The landlord appealed, and a division of this court reversed.
The division agreed that the liquidated damages provision was
unenforceable, but it concluded that the landlord was not required
to sell its property to mitigate damages. Tremitek, LLC v. Resilience
Code, LLC, 2023 COA 54, ¶¶ 33, 36-37 (Tremitek I). Because the
trial court’s damages award rested on the landlord’s failure to sell
the property, the division remanded the case for additional findings
concerning the landlord’s efforts to re-lease the property. Id. at
¶ 49.
¶8 On remand, the trial court again found that the landlord had
failed to mitigate its damages, concluding that with reasonable
efforts, the landlord could have re-leased the property by August
2021. Thus, the court awarded the landlord past due rent under
the lease (including condo fees and late fees) from the date of the
tenant’s default to July 2021. Then, using the ballet offer as a
benchmark, the court awarded damages for the period from August
2021 to the date of trial in the amount of $1,000 per month —
representing the difference between the rent the tenant owed under
3 the lease and the rent the landlord could have collected from a
substitute tenant. By separate order, the trial court awarded the
landlord attorney fees in the amount of $129,440.
II. Discussion
¶9 The landlord contends that the trial court erred in (1) finding
that it failed to mitigate its damages; (2) calculating the term and
amount of damages; and (3) reducing its requested attorney fees
award.
A. Standard of Review
¶ 10 A judgment following a bench trial presents a mixed question
of fact and law. Kroesen v. Shenandoah Homeowners Ass’n, 2020
COA 31, ¶ 55. We review the trial court’s factual findings for clear
error and its legal conclusions de novo. Id. A factual finding is
clearly erroneous only if it has no factual support in the record.
Sanchez-Martinez v. People, 250 P.3d 1248, 1254 (Colo. 2011).
¶ 11 Whether an injured party used reasonable efforts to mitigate
its damages is a question of fact, Fair v. Red Lion Inn, 943 P.2d 431,
437 (Colo. 1997), but whether the trial court applied the correct
legal standard in making that determination is a question of law,
4 Highlands Ranch Univ. Park, LLC v. Uno of Highlands Ranch, Inc.,
129 P.3d 1020, 1026 (Colo. App. 2005).
¶ 12 Likewise, the proper amount of damages is a fact issue
reviewed for clear error while the proper measure of damages is a
legal issue reviewed de novo. See Kroesen, ¶ 56.
¶ 13 We review a trial court’s award of attorney fees for an abuse of
discretion. Cronk v. Bowers, 2023 COA 68M, ¶ 33.
B. Mitigation of Damages
¶ 14 The party claiming damages from a breach of a lease has “the
duty to take such steps as are reasonable under the circumstances
in order to mitigate or minimize the damages sustained.” Fair, 943
P.2d at 437 (quoting Ballow v. PHICO Ins. Co., 878 P.2d 672, 680
(Colo. 1994)). The duty to mitigate prevents “a landlord from
passively suffering preventable economic loss.” Schneiker v.
Gordon, 732 P.2d 603, 611 (Colo. 1987). Instead, the landlord must
take “affirmative steps” to re-lease the property, and the failure to
take such steps “constitute[s] a failure to exercise ‘reasonable
efforts’ to mitigate damages.” Pomeranz v. McDonald’s Corp., 821
P.2d 843, 847 (Colo. App. 1991), aff’d in part and rev’d in part on
other grounds, 843 P.2d 1378 (Colo. 1993).
5 ¶ 15 The landlord acknowledges its duty to mitigate, but it argues
that the trial court erred by disregarding a lease provision granting
the landlord “sole discretion” to set the terms of any substitute
lease. We discern no error.
¶ 16 True, the division in Tremitek I noted that the reasonableness
of mitigation efforts “must be viewed in light of [the] provision[].”
Tremitek I, ¶ 50 (quoting Del E. Webb Realty & Mgmt. Co. of Colo. v.
Wessbecker, 628 P.2d 114, 116 (Colo. App. 1980)). But the division
made clear that the lease provision “does not supplant the duty to
mitigate.” Id.; see also Bert Bidwell Inv. Corp. v. LaSalle & Schiffer,
P.C., 797 P.2d 811, 812 (Colo. App. 1990) (notwithstanding a lease
provision requiring the landlord’s consent to sublet, the landlord
could not arbitrarily reject a substitute tenant once the duty to
mitigate arose). As the division explained, while the law does not
require a landlord to accept “any offer,” it “may not reject a
reasonable offer.” Tremitek I, ¶¶ 51-52.
¶ 17 The trial court correctly applied this standard. In its amended
judgment entered after remand, the court recognized that the
landlord was “not required to accept every party that [wa]s
interested in leasing space, and c[ould] certainly reject an uncertain
6 tenant.” But it found that the landlord had failed to take
reasonable steps to procure a substitute tenant, including by
ignoring the ballet offer.
¶ 18 The landlord maintains that it had no duty to pursue the
ballet offer, as it was merely a preliminary proposal with “inferior”
terms compared to the existing lease. That argument fails on both
fronts. Even assuming the ballet offer was not an actual offer that
could be accepted (though the landlord testified to the contrary at
trial), a party seeking to mitigate its damages “cannot give the silent
treatment to prospective tenants.” Hto7, LLC v. Elevate, LLC, 319
A.3d 368, 381 (D.C. 2024); see also S.N. Mart, Ltd. v. Maurices Inc.,
451 N.W.2d 259, 262 (Neb. 1990) (landlord failed to mitigate
damages when it did not contact a prospective replacement tenant);
Vawter v. McKissick, 159 N.W.2d 538, 542 (Iowa 1968) (landlord
failed to mitigate damages when she made no efforts to “explore the
opportunities” to rent to two prospective tenants, including one
tenant who did not want to pay the advertised rent). Nor can the
landlord reject an otherwise suitable substitute tenant merely to
avoid any financial loss. See Tremitek I, ¶ 52 (“[A] landlord may not
reject a reasonable offer simply because it does not allow the
7 landlord to recoup all of its losses.”); O’Brien v. Black, 648 A.2d
1374, 1377-78 (Vt. 1994) (landlord failed to mitigate damages when
it rebuffed inquiry from a prospective replacement tenant and held
out for a more lucrative arrangement); see also Sizer v. Lopez
Velasquez, 270 A.3d 299, 303 (D.C. 2022) (landlords failed to
mitigate damages when they rejected replacement tenants who
could not pay the full rent because landlords could have recovered
the differential from the breaching tenants).
¶ 19 In any event, the trial court’s finding that the landlord failed to
mitigate its damages did not turn exclusively on the landlord’s
decision to ignore the ballet offer. Rather, the court found that as a
general matter, the landlord took a lackadaisical approach to
procuring a substitute tenant. The court’s conclusion in this regard
is amply supported by the record.
• For more than a year after the tenant’s default, the landlord
insisted that the lease’s liquidated damages provision
supplanted any duty to mitigate its losses. At the April 2022
trial, the landlord’s representative continued to misapprehend
this duty, explaining that the landlord was not willing to enter
8 into a lease on less favorable terms in order to mitigate its
losses.
• Even before the tenant defaulted, the landlord had listed the
property for sale. But it did not retain the broker to re-lease
the property until several months after the tenant stopped
paying rent. According to the landlord, it could not begin
efforts to re-lease the property until the tenants left.
• The real estate broker prepared a spreadsheet showing the
approximately thirty inquiries that progressed to “second
base.” There were “no counterproposals communicated by
[the landlord]” to anyone on the spreadsheet.
• The landlord agreed to re-lease the property for $12.50 per
square foot, approximately the same rent the tenant had paid
for the first twenty months of the lease. The rent was not
adjusted to account for the COVID-19 pandemic.
• According to the broker, comparable properties were sold
within 120 to 180 days. As of the time of trial, the landlord’s
property had been listed for sale for around 800 days and for
lease for over 400 days. The broker testified that under
“fundamental 101 real estate” principles, lowering the rent
9 would “generate some more interest” in the property. But the
landlord had not authorized a price reduction at any point
since the property was first offered for re-lease.
¶ 20 In sum, considering the entire record, we cannot say that the
trial court committed clear error in determining that the landlord
failed to mitigate its damages.
C. Damages Award
¶ 21 In an action to recover damages for breach of a commercial
lease, “[t]he measure of damages is the amount it takes to place the
landlord in the position he would have occupied had the breach not
occurred, taking into account the . . . duty to mitigate.” Schneiker,
732 P.2d at 612. This will usually “be the difference between the
rent reserved in the lease and the reasonable rental value of the
premises” for the relevant period, plus any other consequential
damages caused by the breach. Id.
¶ 22 In its amended judgment, the trial court awarded the landlord
damages in the amount of $119,365.80. This award included three
categories:
• Rent owed while tenant possessed the premises: $55,068.90 in
past due rent and late fees from October 2020 (when the
10 tenant stopped paying rent) through February 2021 (when the
tenant vacated the premises).
• Rent owed while landlord sought a substitute tenant:
$55,296.90 in past due rent and late fees from March 2021
through July 2021, or “the period of time the Court [found]
was a reasonable amount of time . . . in which to obtain a
substitute tenant.”
• Setoff from a substitute tenant: $9,000, or $1,000 per month
from August 2021 through April 2022 (representing the
purported differential in monthly rent between “a substitute
tenant” and the amount owed under the breaching tenant’s
lease).
¶ 23 The landlord raises several challenges to the court’s damages
computation. First, it points out that the trial court failed to award
damages for taxes, which the tenant owed under the lease. Second,
concerning the setoff damages, the landlord says the trial court
erred by awarding damages only through the date of trial. And
third, it says that even assuming the court could use the ballet offer
as a benchmark for calculating damages, the award misrepresents
11 the difference between what the tenant owed and what the ballet
company would have paid.
1. Taxes
¶ 24 The landlord argues, the tenant concedes, and we agree that
the trial court erred by failing to award damages for unpaid taxes
owed under the lease from October 2020 through April 2022. See
Tremitek I, ¶ 49 n.3 (instructing the trial court to award taxes on
remand).
2. End Date of Damages
¶ 25 The landlord argues that it was entitled to damages through
August 2027, the end of the lease term. We agree with the tenant
that the landlord waived any claim to damages beyond the date of
trial.
¶ 26 Waiver is “the intentional relinquishment of a known right.”
Dep’t of Health v. Donahue, 690 P.2d 243, 247 (Colo. 1984). It can
be implied when, for example, “a party engages in conduct which
manifests an intent to relinquish the right or privilege, or acts
inconsistently with its assertion.” Id. When a party waives an
issue, we may not review it. People in Interest of A.V., 2018 COA
138M, ¶ 13.
12 ¶ 27 An invited error, likewise, is usually not reviewable. Vista
Resorts, Inc. v. Goodyear Tire & Rubber Co., 117 P.3d 60, 65 (Colo.
App. 2004). The concept of invited error “rests on the principle that
‘a party may not complain on appeal of an error that he has invited
or injected into the case; he must abide the consequences of his
acts.’” McGill v. DIA Airport Parking, LLC, 2016 COA 165, ¶ 9
(quoting People v. Rediger, 2015 COA 26, ¶ 52).
¶ 28 Initially, the landlord, arguing it had no duty to mitigate,
sought liquidated damages rather than damages for unpaid rent.
When the trial court denied this request, the landlord shifted
course: it argued that because it had attempted to reasonably
mitigate, it was entitled to unpaid rent and fees through the date of
trial. To that end, the landlord’s trial management order claimed
itemized damages through April 7, 2022, in the amount of
$340,679.59. To support this claim at trial, landlord submitted a
copy of the lease, along with a spreadsheet detailing these damages
on a monthly basis, again limiting them to $340,679.59. In its
written closing argument, the landlord “respectfully request[ed] that
the Court enter judgment for breach of the lease in the principal
amount of $340,679.59 through April 7, 2022.”
13 ¶ 29 Under these circumstances, we conclude that, at best, the
landlord waived its argument for post-April 2022 damages by
neither requesting those damages nor presenting evidence of post-
April 2022 damages at trial. Alternatively, the landlord invited the
error by specifically asking the court to award damages only
through April 2022. Either way, any claim of error is not reviewable
on appeal.1
3. Setoff Calculation
¶ 30 To calculate damages for the period after the landlord could
have procured a substitute tenant, the court needed to determine
the reasonable rental value of the premises at that time and
subtract that amount from the amount owed under the lease. See
Schneiker, 732 P.2d at 612. The only evidence presented by the
parties regarding reasonable rental value came from the ballet offer.
The landlord does not dispute that the trial court could therefore
properly rely on the ballet company’s proposal to determine rental
1 To the extent the landlord contends that C.R.C.P. 54(c) compels a
different result, we decline to consider that contention. The landlord’s one-sentence argument, which appears in a footnote in its reply brief, is “insufficient to warrant review of that claim.” Bloom v. Nat’l Collegiate Athletic Ass’n, 93 P.3d 621, 623 (Colo. App. 2004).
14 value. Cf. Consumers United Ins. Co. v. Smith, 644 A.2d 1328, 1344
(D.C. 1994) (court may use comparable rental properties to
compute fair market value); 720 Lex Acquisition LLC v. Guess?
Retail, Inc., No. 09-cv-7199, 2014 WL 4184691, at *13 (S.D.N.Y.
Aug. 22, 2014) (unpublished opinion) (“[T]he reasonable rental
value . . . can and should be approximated by looking to the value
of comparable leases . . . .”); Lu v. Grewal, 30 Cal. Rptr. 3d 623, 627
(Ct. App. 2005) (“[T]he correct measure for mitigation credit is the
property’s fair market rental value.”). But, it says, in that case, the
court had to account for all the differences in terms between the
ballet offer and the existing lease, including that the ballet offer
contemplated six months of free rent, $30,000 in a building
improvement credit, and no condo fees.
¶ 31 We agree that if the court intended to use the ballet offer itself
to calculate damages, it needed to take into account that the ballet
offer would have commenced in September 2021; the base rent
differential was nearly $1,500 per month; the ballet company would
not have paid rent for the first six months, see Hto7, 319 A.3d at
382-83 (when substitute lease allows for period of free rent, the
original tenant is liable for the rent); the landlord would have
15 applied a $30,000 credit for improvements, cf. Richard v. Broussard,
495 So. 2d 1291, 1293 (La. 1986) (tenant is liable for cost of
altering the premises for purposes of re-letting the property to new
tenant); and the ballet company would not have paid most of the
condo fees and the taxes.2
¶ 32 On the other hand, the court may have intended to use the
ballet offer as merely a rough benchmark. But if this was the
court’s intent, it had to explain how it arrived at that conclusion.
¶ 33 Because we are not certain whether the court’s damages
award reflects a comparable offer analysis or offsets the landlord’s
damages specifically by the ballet offer, we reverse and remand for
further findings and recalculation of damages.
D. Attorney Fees
¶ 34 Lastly, the landlord contends that the trial court abused its
discretion when it reduced the attorney fees award by 20%. We
2 Contrary to the tenant’s argument, the landlord did not have to
specifically request damages based on the ballet offer’s distinct terms. The landlord is entitled to argue that the trial court was obliged to correctly calculate damages. See, e.g., Taylor v. HCA- HealthONE LLC, 2018 COA 29, ¶¶ 50-52 (where an issue is governed by a particular standard or framework, a party need not preserve an argument that trial court must apply the correct standard or framework).
16 cannot discern the basis for the court’s decision, and therefore we
reverse and remand for further findings.
1. Attorney Fees Order
¶ 35 To calculate the attorney fees award, the trial court first
determined a reasonable hourly rate. The court noted that the
landlord’s counsel collectively charged from $425 to $620 per hour.
It then found that while an hourly rate of $500 was typical of the
geographic region where the case was tried, counsel in landlord-
tenant disputes typically charge a lower rate. So while it applied a
rate of $500 per hour, the court noted that such a rate “should
signify greater familiarity with the . . . issues involved.”
¶ 36 The court next determined the reasonable number of hours
spent on the case. Accounting for the higher hourly rate, the court
deducted 139 hours as “excessive.”
¶ 37 The court then multiplied the hourly rate by the adjusted
number of hours expended and arrived at an initial award of
$161,800. See S. Colo. Orthopaedic Clinic Sports Med. & Arthritis
Surgeons, P.C. v. Weinstein, 2014 COA 171, ¶ 23.
¶ 38 Finally, the court reduced the initial award by 20% for an
adjusted total award of $129,440. The court found that such an
17 adjustment was appropriate because the landlord continued
throughout the case to litigate its duty to mitigate its losses, and, in
the end, it was awarded substantially less than “the entire value of
the outstanding term of the lease.”
2. Analysis
¶ 39 Neither party challenges the trial court’s initial award.
Instead, the landlord contends that the trial court’s additional
downward adjustment constituted “impermissible double counting”
because the court also reduced the reasonable hourly rate and
number of hours expended. On this point, we disagree.
¶ 40 The trial court initially adjusted the number of hours
expended based on a determination that the issues lacked
complexity and therefore counsel could have performed the work in
fewer hours. See Payan v. Nash Finch Co., 2012 COA 135M, ¶ 43
(court may adjust the number of hours expended based on lack of
complexity). In contrast, the court’s subsequent 20% across-the-
board reduction of the fee award was to account for the “degree of
success” achieved. Tallitsch v. Child Support Servs., Inc., 926 P.2d
143, 147-48 (Colo. App. 1996) (“Once the lodestar amount is
18 determined, that basic amount may be adjusted upward or
downward” based on “the degree of success achieved.”).
¶ 41 The landlord counters that under the circumstances, the court
erred by cutting fees based on the degree of success the landlord
achieved in the litigation. On this point, we agree in part.
¶ 42 The court found that the landlord’s counsel had unreasonably
pursued its liquidated damages argument, only to have that
argument rejected by both the trial court and the appellate court.
We acknowledge that counsel’s continued pursuit of nonmeritorious
arguments can justify a downward adjustment. See, e.g., Hobbs v.
EVO Inc., 7 F.4th 241, 259 (5th Cir. 2021). But the court did not
explain why a 20% reduction overall was justified. And while the
trial court properly considered “the amount of damages recovered”
by the landlord, Tallitsch, 926 P.2d at 148, we have reversed the
damages award. Thus, on remand, the court must reconsider this
factor in light of the recalculated amount of damages.
III. Disposition
¶ 43 The judgment is affirmed in part and reversed in part, the
attorney fees order is reversed, and the case is remanded to the trial
court for further proceedings.
19 JUDGE YUN and JUSTICE MARTINEZ concur.