Tremitek v. Resilience

CourtColorado Court of Appeals
DecidedJune 5, 2025
Docket24CA0520
StatusUnpublished

This text of Tremitek v. Resilience (Tremitek v. Resilience) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tremitek v. Resilience, (Colo. Ct. App. 2025).

Opinion

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.

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