v. Ireson

2020 COA 157, 490 P.3d 963

• Court: Colorado Court of Appeals
• Decided: November 5, 2020
• Docket: 19CA1245, Begley
• Status: Published

Opinion

The summaries of the Colorado Court of Appeals published opinions constitute no part of the opinion of the division but have been prepared by the division for the convenience of the reader. The summaries may not be cited or relied upon as they are not the official language of the division. Any discrepancy between the language in the summary and in the opinion should be resolved in favor of the language in the opinion.

SUMMARY November 5, 2020

2020COA157

No. 19CA1245, Begley v. Ireson — Attorneys and Clients — Litigation Privilege

A division of the court appeals affirms the district court’s entry

of summary judgment in favor of defendants based on application of

the litigation privilege under the standard set forth in Begley v.

Ireson, 2017 COA 3 (Begley I). Begley I established that the

litigation privilege may immunize an attorney’s prelitigation

statement if (1) the statement is related to prospective litigation and

(2) the prospective litigation is contemplated in good faith. Id. at ¶

17.

First, the division rejects the plaintiffs’ argument that the

attorney’s statements were not protected by the litigation privilege

because they were not defamatory and instead concludes that the

litigation privilege may shield nondefamatory statements. Second, the division concludes that the attorney’s statements

related to the prospective litigation because there was no dispute

that they were made after he was retained to represent clients in

connection with damages alleged to have been caused by

construction activities on the plaintiffs’ property, related to the

construction project and the contemplated litigation, and were

made to individuals closely connected with the contemplated

litigation.

Finally, the division concludes that the plaintiffs failed to meet

their burden to establish a genuine issue of material fact regarding

whether the attorney contemplated the litigation he later filed on

behalf of his clients in good faith. In so doing, the division

concludes that the filing of a lawsuit is insufficient, standing alone,

to establish that the litigation was contemplated in good faith.

Instead, the fact that litigation was subsequently commenced is one

factor a court can consider when determining whether an attorney

contemplated the litigation in good faith. COLORADO COURT OF APPEALS 2020COA157

Court of Appeals No. 19CA1245 City and County of Denver District Court No. 15CV30222 Honorable J. Eric Elliff, Judge

The Belinda A. Begley and Robert K. Hirsch Revocable Trust, Belinda A. Begley, and Robert K. Hirsch,

Plaintiffs-Appellants,

v.

Myrtle Ireson; Lisa Harris, as Special Administrator of the Estate of Virginia Hoeckele; Andrew J. Gibbs; and Gibbs-Young, LLC,

Defendants-Appellees.

JUDGMENT AFFIRMED, ORDER REVERSED, AND CASE REMANDED WITH DIRECTIONS

Division VI Opinion by JUDGE BROWN Dunn and Freyre, JJ., concur

Announced November 5, 2020

Robert K. Hirsch, P.C., Robert K. Hirsch, Belinda Ann Begley, Denver, Colorado, for Plaintiffs-Appellants

Gordon & Rees, LLP, John R. Mann, Denver, Colorado; Jonsen Law Firm, LLC, Eric R. Jonsen, Broomfield, Colorado, for Defendants-Appellees Myrtle Ireson and Lisa Harris

McElroy, Deutsch, Mulvaney & Carpenter, LLP, Glendon L. Laird, Greenwood Village, Colorado, for Defendants-Appellees Andrew J. Gibbs and Gibbs-Young, LLC ¶1 Plaintiffs-appellants, Belinda A. Begley, Robert K. Hirsch, and

the Belinda A. Begley and Robert K. Hirsch Revocable Trust

(collectively, Begley and Hirsch), appeal the district court’s order

granting summary judgment in favor of defendants-appellees

Andrew J. Gibbs and Gibbs-Young, LLC (together, Gibbs) and

granting partial summary judgment in favor of defendants-appellees

Myrtle Ireson and Lisa Harris, as Special Administrator of the

Estate of Virginia Hoeckele (together, Ireson and Hoeckele). Begley

and Hirsch also appeal the district court’s award of costs to Gibbs.

¶2 Applying the litigation privilege as articulated in Begley v.

Ireson, 2017 COA 3 (Begley I), we affirm the entry of summary

judgment. However, because the district court did not conduct a

hearing, we reverse the award of costs to Gibbs and remand the

case for further proceedings solely on that issue.

I. Background

¶3 Begley and Hirsch own residential property in the Washington

Park neighborhood of Denver on which they wished to demolish the

1 existing house and build a new one. Ireson is their neighbor on one

side and Hoeckele was their neighbor on the other.1

¶4 Begley and Hirsch contracted with Forte Development Group,

LLC, owned by George R. Saad, to undertake the project. In mid-

September 2014, Forte demolished the existing home and, on or

about October 1, 2014, began shoring work necessary to excavate

the basement of the new home.

¶5 Begley and Hirsch allege that Ireson and Hoeckele,

individually and through Gibbs as their attorney, made statements,

threats, and complaints that their respective properties had been

damaged during construction, which caused Forte to cease all

construction work as of October 2, 2014, and to breach the

construction contract. According to Begley and Hirsch, when

excavation finally began again on January 15, 2015, Gibbs

threatened police intervention and demanded the work stop.

¶6 On January 20, 2015, Begley and Hirsch filed a complaint

against Ireson, Hoeckele, and Gibbs, asserting claims for

intentional interference with contract and intentional interference

1Hoeckele died during the litigation and her estate was substituted as the defendant party.

2 with prospective contractual relations. Nine days later, Ireson and

Hoeckele filed their own lawsuit, Denver District Court Case No.

15CV30352, against Begley, Hirsch, and Forte, among others.

¶7 Hoeckele moved to dismiss Begley and Hirsch’s complaint

under C.R.C.P. 12(b)(5) for failure to state a claim upon which relief

can be granted, arguing that her allegedly tortious conduct was

protected by the litigation privilege. Ireson and Gibbs joined in the

motion. The district court dismissed the complaint, holding that

Begley and Hirsch failed to allege that Ireson and Hoeckele caused

Forte to breach the contract, and that Gibbs’s conduct was

absolutely privileged.

¶8 Begley and Hirsch appealed, and a division of this court

reversed. Begley I, 2017 COA 3. First, the division concluded that

the complaint sufficiently alleged that Ireson and Hoeckele caused

Forte to breach the contract. Id. at ¶ 11. Second, the division

concluded that the litigation privilege attaches to an attorney’s

prelitigation statements only if (1) the prelitigation statement relates

to prospective litigation and (2) the prospective litigation is

contemplated in good faith. Id. at ¶¶ 17, 23. Because the district

court did not address whether the prospective litigation against

3 Begley, Hirsch, and Forte was contemplated in good faith, the

division reversed and remanded for further proceedings. Id. at

¶¶ 24-26.

¶9 On remand, Gibbs moved for summary judgment and the

district court granted the motion. It applied the two-part rule set

out in Begley I and concluded that Begley and Hirsch failed to meet

their burden to demonstrate a genuine dispute of material fact with

respect to either part. The court later awarded Gibbs his costs as

the prevailing party.

¶ 10 Ireson and Hoeckele also moved for summary judgment on the

same grounds as Gibbs. The district court partially granted the

motion. Considering its ruling on Gibbs’s motion for summary

judgment, the court concluded that Ireson and Hoeckele could not

be vicariously liable for Gibbs’s conduct because Gibbs’s conduct

was privileged. However, it concluded that genuine issues of

material fact remained regarding the propriety of Ireson and

Hoeckele’s conduct before they retained Gibbs. The parties later

filed a joint motion to dismiss with prejudice the remaining claims

against Ireson and Hoeckele, which the court granted.

4 II. Analysis

A. Summary Judgment

¶ 11 Begley and Hirsch contend that the district court erred by

concluding that application of the litigation privilege warranted

summary judgment in favor of Gibbs, Ireson, and Hoeckele.

Specifically, they argue that the court erred by (1) applying the

litigation privilege to nondefamatory statements; (2) concluding that

Gibbs’s allegedly tortious conduct was related to contemplated

litigation; and (3) concluding that Gibbs contemplated the litigation

against them in good faith. We reject each contention in turn.

1. Standard of Review

¶ 12 The determination of privilege is a question of law we review de

novo. Club Valencia Homeowners Ass’n v. Valencia Assocs., 712

P.2d 1024, 1027 (Colo. App. 1985).

¶ 13 We also review the entry of summary judgment de novo.

Shelter Mut. Ins. Co. v. Mid-Century Ins. Co., 246 P.3d 651, 657

(Colo. 2011). Summary judgment is appropriate when the

pleadings, affidavits, depositions, and admissions establish that

there is no genuine issue of material fact and that the moving party

is entitled to judgment as a matter of law. C.R.C.P. 56(c);

5 BA Mortg., LLC v. Quail Creek Condo. Ass’n, 192 P.3d 447, 450

(Colo. App. 2008). For purposes of summary judgment, a “material

fact” is one that will affect the outcome of the case. Olson v. State

Farm Mut. Auto. Ins. Co., 174 P.3d 849, 853 (Colo. App. 2007).

¶ 14 The party moving for summary judgment bears the initial

burden of demonstrating that there is no genuine issue of material

fact. Cont’l Air Lines, Inc. v. Keenan, 731 P.2d 708, 712 (Colo.

1987). Once the moving party has met this initial burden, the

burden shifts to the nonmoving party to establish a genuine issue

of material fact. Id. “If the nonmoving party cannot muster

sufficient evidence to make out a triable issue of fact . . . , a trial

would be useless and the moving party is entitled to summary

judgment as a matter of law.” Id. at 713.

2. The Litigation Privilege Generally

¶ 15 Statements made by an attorney during or in preparation for

pending legal proceedings are absolutely privileged so long as the

remarks have some relation to the proceeding. Begley I, ¶ 13; Club

Valencia, 712 P.2d at 1027. This absolute privilege exists “to

encourage and protect free access to the courts for litigants and

6 their attorneys.” Begley I, ¶ 13; see also Westfield Dev. Co. v. Rifle

Inv. Assocs., 786 P.2d 1112, 1117 (Colo. 1990).

¶ 16 In contrast, the litigation privilege attaches to an attorney’s

prelitigation statement only if (1) the statement is related to

prospective litigation and (2) the prospective litigation is

contemplated in good faith. Begley I, ¶ 17; see also Merrick v.

Burns, Wall, Smith & Mueller, P.C., 43 P.3d 712, 714 (Colo. App.

2001) (“Communications preliminary to a judicial proceeding are

protected by absolute immunity only if they have some relation to a

proceeding that is actually contemplated in good faith.”);

Restatement (Second) of Torts § 586 cmt. e (Am. Law Inst. 1977)

(“As to communications preliminary to a proposed judicial

proceeding, the [absolute privilege] applies only when the

communication has some relation to a proceeding that is

contemplated in good faith and under serious consideration.”).

3. The Litigation Privilege Shields Nondefamatory Statements

¶ 17 Begley and Hirsch first argue that the district court erred by

entering summary judgment because they contend the litigation

privilege shields only defamatory statements and Gibbs’s

7 statements were not defamatory. Because the litigation privilege

can apply to nondefamatory statements, we disagree.

a. Preservation

¶ 18 Ireson and Hoeckele contend that this issue is unpreserved

because Begley and Hirsch did not raise it with the district court

until their motion to reconsider the order denying the parties’

competing requests for C.R.C.P. 54(b) certification. Begley and

Hirsch assert that they have been raising this argument “for five

years,” and cite their opposition to the original motions to dismiss

filed by Ireson, Hoeckele, and Gibbs.

¶ 19 Because Begley and Hirsch did not raise this issue in

connection with the motions for summary judgment, they arguably

waived their right to raise it in this appeal. See Estate of Stevenson

v. Hollywood Bar & Cafe, Inc., 832 P.2d 718, 721 n.5 (Colo. 1992)

(concluding that because the argument was not raised in response

to summary judgment, it could not be raised on appeal).

Nonetheless, in the interests of justice and judicial economy, we will

address this argument on the merits.

8 b. Analysis

¶ 20 Begley and Hirsch assert that the most damaging of Gibbs’s

statements were his demands that construction stop. They contend

that, because such statements are not defamatory, they are not

protected by the litigation privilege. They argue, “simply put,

Colorado privilege law requires defamation.” We are unaware of

such a requirement.

¶ 21 Although the privilege was created to protect participants in

judicial or quasi-judicial proceedings from liability for defamatory

communications, see Hoffler v. State Pers. Bd., 7 P.3d 989, 990

(Colo. App. 1999), aff’d, 27 P.3d 371 (Colo. 2001), it has been

applied more broadly to immunize nondefamatory conduct. See

Westfield Dev. Co., 786 P.2d at 1118 (endorsing a qualified litigation

privilege to intentionally interfere with performance of a contract);

Dep’t of Admin. v. State Pers. Bd., 703 P.2d 595 (Colo. App. 1985)

(relying on the litigation privilege to conclude that an employee was

not subject to discipline for statements made during an

administrative hearing). Indeed, “[t]he privilege not only shields

attorneys from defamation claims arising from statements made

during the course of litigation, but it also bars other non-

9 defamation claims that stem from the same conduct.” Buckhannon

v. U.S. W. Commc’ns, Inc., 928 P.2d 1331, 1335 (Colo. App. 1996).

¶ 22 Begley and Hirsch cite Buckhannon and Club Valencia in

support of their argument. True, those cases discuss application of

the privilege to an attorney’s defamatory statements, but that is

because defamatory statements were the basis for the claims in

those cases. See Buckhannon, 928 P.2d at 1334 (the plaintiff

alleged the defendant’s defamatory statements intentionally

interfered with his contractual relations with a third party); Club

Valencia, 712 P.2d at 1027 (the plaintiff asserted a libel claim).

Neither case articulated a requirement that the offending conduct

be defamatory before the litigation privilege applied.

¶ 23 In addition, in Westfield Development Co., the supreme court

considered and impliedly rejected such a requirement. There, the

court considered whether the recording of a lis pendens constituted

a privileged statement made in the course of a judicial proceeding.

Westfield Dev. Co., 786 P.2d at 1114. The plaintiffs claimed the

mere filing of the lis pendens was actionable under theories of

intentional interference with contract, malicious prosecution, and

abuse of process; they did not allege that the lis pendens was

10 defamatory. See id. at 1116. In concluding that a qualified

litigation privilege may apply, the court did not mention defamation.

Id. at 1118. Instead, it held that “[t]he qualified privilege applies

when (1) the interferer has, or honestly believes he has, a legally

protected interest; (2) the interferer in good faith asserts or

threatens to assert it; and (3) the assertion or threat is by proper

means.” Id.

¶ 24 And we note that applying the litigation privilege to shield

nondefamatory litigation conduct is consistent with decisions from

other jurisdictions. See, e.g., Blanchette v. Cataldo, 734 F.2d 869,

877-78 (1st Cir. 1984) (“[T]he Massachusetts courts have applied

the privilege, not only in defamation cases, but as a general bar to

civil liability based on the attorney’s statements.”); Visto Corp. v.

Sproqit Techs., Inc., 360 F. Supp. 2d 1064, 1068 (N.D. Cal. 2005)

(“[The litigation privilege] is a defense to a number of torts,

including intentional interference and defamation.”); W. Techs., Inc.

v. Sverdrup & Parcel, Inc., 739 P.2d 1318, 1322 (Ariz. Ct. App. 1986)

(“[T]he same privilege that bars [plaintiff’s] action for injurious

falsehood also bars its action for intentional interference with a

contractual relationship.”); Levin, Middlebrooks, Mabie, Thomas,

11 Mayes & Mitchell, P.A. v. U.S. Fire Ins. Co., 639 So. 2d 606, 608 (Fla.

1994) (“[A]bsolute immunity must be afforded to any act occurring

during the course of a judicial proceeding, regardless of whether the

act involves a defamatory statement or other tortious behavior such

as the alleged misconduct at issue, so long as the act has some

relation to the proceeding.”); Kahala Royal Corp. v. Goodsill

Anderson Quinn & Stifel, 151 P.3d 732, 752 (Haw. 2007) (applying

litigation privilege to tort claims against lawyer arising from lawyer’s

management of inspection of corporate books and records);

Reynolds v. Schrock, 142 P.3d 1062, 1069 (Or. 2006) (applying

litigation privilege to attorney’s alleged aiding and abetting of

client’s breach of fiduciary duty); Clark v. Druckman, 624 S.E.2d

864, 870 (W. Va. 2005) (applying litigation privilege to claims

arising from lawyer’s disclosure of experts in litigation and

reasoning that there is “no reason to distinguish between

communications made during the litigation process and conduct

occurring during the litigation process”).

¶ 25 Finally, the Begley I division did not say that the statement in

question must be defamatory for the litigation privilege to apply

even though it was aware of the nature of Gibbs’s allegedly tortious

12 conduct. Instead, it articulated just two requirements: (1) the

statement must relate to prospective litigation and (2) the

prospective litigation must be contemplated in good faith. Begley I,

¶ 17.

¶ 26 Thus, we conclude that the litigation privilege may protect an

attorney from liability for his nondefamatory statements.

4. Gibbs’s Statements Related to Contemplated Litigation

¶ 27 Next, Begley and Hirsch contend that the district court erred

by concluding that Gibbs’s allegedly tortious statements “related to”

contemplated litigation. We disagree.

a. Additional Background

¶ 28 In their complaint, Begley and Hirsch alleged that Gibbs

engaged in the following tortious conduct:

 On October 6, 2014, Gibbs interrupted a meeting

between Begley, Hirsch, Saad, and a soils engineer and

introduced himself as the attorney for Ireson and

Hoeckele. “[He] behaved in an aggressive unprofessional

manner that was outrageous. He told those present,

‘This is not a shakedown,’ in a manner that clearly

conveyed that was exactly what it was intended to be.

13 When Plaintiff Begley resisted his bullying tactics, he told

her ‘she needed to be taught a lesson.’ Using threats,

intimidation and coercion, he deliberately frightened

[Saad] and the soils engineer with accusations that

permanently and adversely altered the relationships

between all parties.”2

 “Gibbs continued to make mail, email and telephone

threats of legal action and demands,” including sending a

formal notice of claim pursuant to section 13-20-803.5,

C.R.S. 2019, of the Construction Defect Action Reform

Act (CDARA), which purportedly included inaccurate

statements about the project.

 When excavation finally began again on January 15,

2015, Gibbs called Saad and demanded construction

cease or Gibbs “would have the Denver sheriff stop him.”

2 Today, we decide only whether Gibbs’s conduct is protected by the litigation privilege. Assuming Begley and Hirch’s allegations are true, we express no opinion regarding whether such conduct aligns with the Colorado Rules of Professional Conduct. See, e.g., Colo. RPC, Preamble ¶ 9 (“Zealousness does not, under any circumstances, justify conduct that is unprofessional, discourteous or uncivil toward any person involved in the legal system.”).

14  Gibbs demanded that he have the right to decide when

and if construction would be allowed to continue and

demanded that Forte provide him with “architectural and

engineering materials for this purpose.”

¶ 29 In support of his motion for summary judgment, Gibbs

submitted an affidavit in which he averred as follows:

 He first spoke with Ireson on October 3, 2014, regarding

the construction activities on Begley and Hirsch’s

property. He arranged to meet with Ireson on October 6,

2014, “to inspect the damage and discuss her retaining

[his] firm to help recover the cost to repair her home.”

 On October 6, 2014, he met with Ireson and observed

recent damage to her home. He then met with Hoeckele

and observed similar recent damage to her home. Ireson

and Hoeckele agreed to retain Gibbs “to represent their

interests relating to the damages to their homes and, if

necessary, file a lawsuit against the responsible parties in

the event settlement negotiations were unsuccessful.”

 When he was leaving the meeting with Ireson and

Hoeckele, he observed a meeting between Begley, Hirsch,

15 Saad, and the soils engineer. He approached, introduced

himself as counsel for Ireson and Hoeckele, and

“explained that [his] clients would like to discuss a

solution to the damage the demolition caused to their

homes in an effort to avoid litigation.” He then showed

Begley, Hirsch, Saad, and the soils engineer the damage

to Ireson’s and Hoeckele’s properties.

 He and Hirsch exchanged correspondence “about

[Hirsch’s] construction project and to discuss resolution.”

Ultimately, he sent a notice of claim under CDARA.

 Having received no response to his efforts to “discuss

settlement,” he filed a lawsuit on behalf of Ireson and

Hoeckele against Hirsch, Begley, and Forte, among

others, on January 29, 2015.

¶ 30 Gibbs attached to his affidavit the following exhibits:

 An October 7, 2014, letter from Hirsch, in which Hirsch

acknowledges meeting Gibbs the previous day and

touring the properties of the “owners whom you

represent.” According to Hirsch, the letter served to

“memorialize that [Gibbs] agreed that CRE 408 covers the

16 verbal offers [Saad] made to the owners to fix certain

things on their properties.”

 An October 18, 2014, letter from Hirsch, in which Hirsch

acknowledges receiving a voicemail from Gibbs the

previous Friday. It continues: “Speaking for [Begley] and

myself, it seems premature to discuss anything until you

assert a claim.”

 An October 21, 2014, email from Gibbs to Hirsch, asking

the following questions: “Do I understand your

correspondence to mean that you and [Begley] will not

. . . discuss a resolution until we assert a claim? At the

risk of sounding confrontational, do we really need to

initiate litigation just to get you to the table?” The email

concludes, “If you intend on denying all responsibility or

do not intend to work toward a settlement, then please

let me know now so that we begin that process sooner

rather than [later].”

 A December 8, 2014, letter cataloguing Gibbs’s

interactions with Begley and Hirsch, including the

October 6, 2014, meeting, Gibbs’s voicemail to Hirsch,

17 and the letters and emails between Gibbs and Hirsch. It

says, “I emailed you on October 21, 2014 asking if

litigation was actually necessary to discuss a resolution,

but you never responded.” Attached to the letter are a

CDARA notice of claim, two reports from a professional

engineer Gibbs retained to evaluate the damage to his

clients’ properties, and a copy of a complaint “we will file

in the Denver County District Court as soon as the Notice

Claim period expires, in the event that we still cannot

reach a settlement.” The letter adds that if Begley and

Hirsch preferred to “forgo the Notice of Claim process,”

they could execute a waiver of service “to commence

litigation immediately.”

¶ 31 As relevant to this issue, in opposition to Gibbs’s motion for

summary judgment, Hirsch submitted an affidavit in which he

averred as follows:

 “After the hiring of Andrew Gibbs by Hoeckele and Ireson

as their attorney, and before the filing of the CDARA, Mr.

Gibbs made a number of demands on us for money.”

18  Shortly after the October 6, 2014, meeting began, “Gibbs

approached . . . and introduced himself as the lawyer

representing Hoeckele and Ireson. He became

argumentative and aggressive, accusing people of causing

damages. He wanted copies of the soils reports for his

experts to review.”

 Gibbs made demands for money while refusing to

articulate “duty, breach, causation, or damages” or “what

the claims were.” Although Gibbs said, “This is not a

shakedown,” “[i]n fact it was a shakedown.”

 When Begley questioned Gibbs “about the basis upon

which he was attributing responsibility [and] question[ed]

what the injuries to the properties were, . . . Gibbs began

yelling at Begley . . . and started to lecture her.” Begley

told Gibbs to stop lecturing her, and Gibbs “said ‘some

people need lecturing.’ They argued for a few minutes

and Gibbs refused to back down or apologize, instead

saying twice, [Begley] ‘needed to be taught a lesson.’”

 Construction stopped because Ireson, Hoeckele, and

Gibbs demanded Forte stop all work on the project.

19  Gibbs left him a voicemail on October 17, 2014, asking

what repair plans existed and for the soils report, and he

“replied in a letter that it was premature to discuss

anything until Gibbs asserted a claim for his clients.”

 On October 21, 2014, Gibbs sent him an email

“threatening litigation, but again, declining to say on

what basis he thought there was liability or responsibility

or exactly how much money he wanted.”

 On January 15, 2015, about three hours after excavation

finally began again, Gibbs demanded construction stop.3

Gibbs also demanded copies of architectural and

3 In their original complaint, Begley and Hirsch alleged that, on January 15, 2015, Gibbs called Forte and demanded that construction cease or Gibbs “would go to [c]ourt that afternoon and would get an injunction to shut it down.” After the defendants filed their motions to dismiss asserting the litigation privilege, Begley and Hirsch filed an amended complaint altering this allegation to include a threat by Gibbs to call law enforcement. In his summary judgment affidavit, Hirsch averred that Gibbs demanded construction stop, but did not say that Gibbs threatened either an injunction or police intervention.

20 engineering plans and stated he would be the one to

decide when construction would resume.4

¶ 32 The district court concluded that “[t]he pertinence requirement

is hardly at issue” and that “[t]he undisputed facts show that all

statements allegedly giving rise to [Begley and Hirsch’s] claims were

related to the construction project that took place on [their]

property.”

b. Analysis

¶ 33 Begley and Hirsch contend that Gibbs’s “improper

interference” was related only to the construction project, not to the

contemplated litigation, and that the district court erred by

concluding the pertinency requirement was satisfied. We disagree.

¶ 34 To be privileged, an attorney’s allegedly tortious statement

“must have been made in reference to the subject matter of the

proposed or pending litigation, although it need not be strictly

relevant to any issue involved in it.” Club Valencia, 712 P.2d at

1027. “The pertinency required is not technical legal relevancy, but

4 Begley also submitted an affidavit in opposition to Gibbs’s motion for summary judgment, which is largely consistent with and duplicative of Hirsch’s affidavit.

21 rather a general frame of reference and relation to the subject

matter of the litigation.” Id. The litigation privilege “embraces

anything that possibly may be relevant.” Id. And, “[a]ll doubt

should be resolved in favor of its relevancy or pertinency. No

strained or close construction will be indulged to exempt a case

from the protection of privilege.” Id. at 1027-28.

¶ 35 In support of his motion for summary judgment, Gibbs offered

evidence that he was retained by Ireson and Hoeckele to represent

them in connection with the damage they allege was caused by the

construction activities on Begley and Hirsch’s property, including

pursuing a lawsuit if necessary, before he engaged in any of the

allegedly tortious conduct. Begley and Hirsch did not offer any

contradictory evidence regarding the timing of or purpose for

Gibbs’s retention. On the contrary, in their complaint, they alleged

that, “[a]t all times material herein[,] Defendant Gibbs represented

Defendants Ireson and Hoeckele.” Thus, it is undisputed that all of

Gibbs’s allegedly tortious conduct occurred after he was retained as

counsel for Ireson and Hoeckele to, among other things, file a

lawsuit.

22 ¶ 36 All the statements Begley and Hirsch allege Gibbs made

related to the construction project, damage to his clients’ property,

early settlement of potential claims, and initiation of litigation. All

such statements related to “the subject matter” of the litigation

ultimately initiated on behalf of Ireson and Hoeckele. And, all such

statements were made to individuals closely connected with the

contemplated litigation. See id. at 1027 (“[T]he maker of the

statement and the recipient must be involved in and closely

connected with the proceeding.”). Nothing in the materials Begley

and Hirsch submitted in opposition to summary judgment suggests

a contrary conclusion.

¶ 37 Accordingly, the district court did not err by concluding that

Gibbs’s allegedly tortious conduct “related to prospective litigation.”

Begley I, ¶ 17.

5. Begley and Hirsch Failed to Meet Their Burden to Establish a Genuine Issue of Material Fact Regarding Gibbs’s Good Faith

¶ 38 Begley and Hirsch contend that the district court erred by

concluding that Gibbs contemplated the litigation against them in

good faith. We disagree.

23 a. Additional Background

¶ 39 The facts set forth in Part II.A.4.a above are relevant to this

issue. As well, in the affidavit attached to his motion for summary

judgment, Gibbs attested that “[a]t all pertinent times on and after

my first meeting with Ms. Ireson and Ms. Hoeckele on October 6,

2014, I contemplated in good faith the filing of a lawsuit on their

behalf if we were unsuccessful in a satisfactory resolution.”

¶ 40 In the affidavit attached to Begley and Hirsch’s response,

Hirsch further attested to the following:

 During the October 6, 2014, inspections of the alleged

damage, Ireson and Hoeckele admitted some of the

damage was pre-existing and had been previously

repaired.

 He and Begley were sent a CDARA notice, in which they

were named as “construction professionals.”

 Ireson and Hoeckele’s request for a temporary restraining

order to stop construction was denied “because [their]

own expert . . . testified both that [their] homes were safe

and that there was no irreparable harm done to their

24 b. Analysis

¶ 41 Begley and Hirsch first contend that the district court erred by

concluding that Gibbs contemplated the litigation in good faith

because good faith is a question that cannot be resolved on

summary judgment. Under the circumstances presented by this

case, we disagree.

¶ 42 To determine whether there are disputed issues of material

fact, we must interpret the meaning of “good faith” contained in the

two-part standard articulated in Begley I. We have found little

guidance on what constitutes “good faith” in this context, but

Black’s Law Dictionary (11th ed. 2019) defines “good faith” as “[a]

state of mind consisting in (1) honesty in belief or purpose, (2)

faithfulness to one’s duty or obligation, (3) observance of reasonable

commercial standards of fair dealing in a given trade or business, or

(4) absence of intent to defraud or to seek unconscionable

advantage.” See also Credit Serv. Co. v. Dauwe, 134 P.3d 444, 447

(Colo. App. 2005).

¶ 43 As an initial matter, we reject Ireson and Hoeckele’s

contention that the filing of the lawsuit on their behalf against

Begley and Hirsch is enough, standing alone, to establish that

25 Gibbs contemplated the litigation in good faith. Adopting such a

blanket rule ignores a concern the division in Begley I identified

when it articulated the standard we apply now — specifically, that

“an attorney could make a statement that tortiously interfered with

a contract and then cloak it in the privilege by subsequently filing a

bad faith and meritless claim related to the otherwise tortious

statement.” Begley I, ¶ 16. Therefore, we conclude that the fact

that litigation was subsequently commenced is just one factor we

consider when determining whether an attorney contemplated the

litigation in good faith.

¶ 44 Typically, whether a person acted in good faith is a question

ill-suited for resolution at the summary judgment stage. See

Montoya v. Bebensee, 761 P.2d 285, 290 (Colo. App. 1988) (“In

resolving the question of the existence of good faith, a reference to

all underlying circumstances must be made. Proof of such state of

mind involves a consideration of circumstantial evidence and of the

reasonable inferences to be drawn therefrom. Thus, such an issue

seldom can be resolved on a motion for summary judgment.”). And

a “mere declaration of good faith by an affiant is not sufficient to

26 resolve that issue in the face of a pleaded denial.” Martin v. Weld

County, 43 Colo. App. 49, 53, 598 P.2d 532, 534-35 (1979).

¶ 45 Here, however, Gibbs’s declaration that he contemplated

litigation against Begley and Hirsch in good faith was not the only

evidence he offered in support of his motion for summary judgment.

In his affidavit, he cited corroborating circumstantial evidence,

including the timing and purpose of his retention by Ireson and

Hoeckele, his communications with Begley and Hirsch attempting

to settle the matter without having to initiate litigation, and the fact

that he actually filed a lawsuit against Begley, Hirsch, Forte, and

others. In addition, he attached to his affidavit correspondence

reflecting the parties’ mutual understanding that Gibbs was

contemplating asserting a claim on behalf of Ireson and Hoeckele,

Hirsch’s correspondence declining to discuss settlement without a

claim, a CDARA notice that is a statutory prerequisite to initiating

litigation, expert reports prepared by professional engineers Gibbs

retained to evaluate the damage to his clients’ properties, and a

draft complaint in substantially the same form as the one he later

filed.

27 ¶ 46 It can hardly be said that the only evidence of good faith

offered in support of Gibbs’s motion for summary judgment was his

own “mere declaration.” Thus, we conclude, as did the district

court, that the evidence Gibbs offered satisfied his initial burden of

demonstrating that there was no genuine issue of material fact

regarding his good faith contemplation of litigation. See Dauwe,

134 P.3d at 446 (finding movant’s summary judgment evidence

satisfied his initial burden to demonstrate a lack of disputed issues

of fact where he attested to his good faith and submitted

corroborating evidence from the opposing party’s discovery

responses).

¶ 47 Once Gibbs met his initial summary judgment burden, the

burden shifted to Begley and Hirsch to establish a triable issue of

fact. Keenan, 731 P.2d at 712-13. That is, Begley and Hirsch had

to present some evidence, by affidavit or otherwise, from which a

fact finder could reasonably infer that Gibbs did not act with

honesty in belief or purpose, did not act in faithfulness to his duty

or obligation, did not observe reasonable commercial standards of

fair dealing in the law, or acted with intent to defraud or to seek

28 unconscionable advantage of them. See Dauwe, 134 P.3d at 447-

48. In this endeavor, they failed.

¶ 48 We agree with the district court that Begley and Hirsch’s

evidence reflects their subjective view that Ireson and Hoeckele had

no valid claims against them and their subjective interpretation of

Gibbs’s conduct. It does not establish a genuine issue of material

fact regarding Gibbs’s good faith contemplation of litigation.

¶ 49 Begley and Hirsch first contend that Gibbs’s refusal to explain

to them the basis of their purported liability in their early

communications demonstrates that he did not contemplate the

litigation in good faith. Assuming the truth of this assertion, we are

not persuaded by it. Certainly, by the time Gibbs filed the

complaint, he had an obligation to have determined it was well

grounded in fact and warranted by existing law, see C.R.C.P. 11,

but we are not aware of any requirement that a lawyer be able to

articulate specific causes of action to the opposing party to

demonstrate good faith in contemplating litigation.

¶ 50 Further, the objective circumstantial evidence reflects a

common understanding that Ireson and Hoeckele believed they had

been damaged by construction activities on Begley and Hirsch’s

29 property, and that Gibbs would file litigation on their behalf if

settlement was not possible. For example, one day after their first

meeting, Hirsch sent Gibbs a letter reflecting their “agree[ment]”

that offers made by Saad to remedy the damage Ireson and

Hoeckele identified were covered by CRE 408. That rule governs

how settlement offers may be used as evidence in civil litigation.

Thus, Hirsch demonstrated his early understanding that Gibbs was

contemplating litigation. Later correspondence between the parties

buttresses this conclusion.

¶ 51 Begley and Hirsch next contend that naming them as

“construction professionals” in the CDARA notice demonstrates

Gibbs’s bad faith. Section 13-20-803.5 requires a litigant to engage

in a notice of claim process as a prerequisite to initiating litigation

against a construction professional. Gibbs sent Begley and Hirsch

a notice pursuant to this CDARA provision. The term “construction

professional” means “an architect, contractor, subcontractor,

developer, builder, builder vendor, engineer, or inspector

performing or furnishing the design, supervision, inspection,

construction, or observation of the construction of any improvement

to real property.” § 13-20-802.5(4), C.R.S. 2019. We need not

30 decide whether Begley and Hirsch were “construction professionals”

because the only potential consequence of Gibbs mis-labeling them

in the CDARA notice is that the notice would be ineffective, and a

new notice of claim procedure would have to be undertaken. Begley

and Hirsch suffered no harm from being named “construction

professionals.” We see no bad faith.

¶ 52 Begley and Hirsch also contend that Gibbs’s decision to not

name Saad individually as a defendant in the lawsuit demonstrates

his bad faith because Forte had been dissolved. They fail to

explain, and we fail to see, how this decision demonstrates that

Gibbs contemplated litigation against them in bad faith. And Ireson

and Hoeckele ultimately reached a settlement with Forte, despite

not naming Saad individually. See Ireson v. Hirsch, slip op. at ¶ 6

n.1 (Colo. App. No. 17CA0078, Apr. 12, 2018) (not published

pursuant to C.A.R. 35(e)) (noting that Ireson and Hoeckele asserted

that they sought dismissal of all claims in the litigation against

Begley and Hirsch pursuant to a settlement agreement with Forte).

¶ 53 Finally, Begley and Hirsch contend that the litigation was not

contemplated in good faith because it is meritless. They assert that

the damages Ireson and Hoeckele have identified pre-existed the

31 construction activities on their property. And they highlight the

denial of Ireson and Hoeckele’s request for a temporary restraining

order (TRO) to stop construction.

¶ 54 But there is a difference between bad faith and lack of success

on a claim. As the district court explained, “[w]hile it is, of course,

true that claims brought in bad faith must be, by definition,

meritless, it does not follow that because a claim is meritless, it was

contemplated in bad faith.” Put another way, nothing in the

definition of good faith requires success on the merits of the filed

litigation. See Visto Corp., 360 F. Supp. 2d at 1069 (“It is the

contemplation of litigation that must be in good faith, not the merits

of the actual litigation itself that animates the litigation privilege.”).

¶ 55 And although the Denver District Court denied Ireson and

Hoeckele’s request for a TRO for failure to establish irreparable

harm, it also concluded that the TRO request was not frivolous or

groundless. See Ireson, No. 17CA0078, slip op. at ¶¶ 36, 40. That

decision was affirmed on appeal by another division of this court,

id. at ¶ 45, as was the Denver District Court’s entry of summary

judgment in favor of Ireson and Hoeckele on Begley and Hirsch’s

counterclaim for abuse of process, id. at ¶¶ 20-27. While these

32 decisions do not control our determination of good faith, we find

them persuasive.

¶ 56 In the end, we conclude that Begley and Hirsch failed to

establish a genuine issue of material fact as to whether Gibbs

contemplated litigation against them on behalf of his clients in good

faith. Having failed to meet this burden, we affirm the district

court’s entry of summary judgment.

B. Costs

1. The District Court Must Conduct a Hearing

¶ 57 Begley and Hirsch contend that the district court erred by

failing to conduct a hearing on Gibbs’s request for an award of

costs. We agree.

¶ 58 Pursuant to C.R.C.P. 121, section 1-22(1),

[a]ny party that may be affected by the Bill of Costs may request a hearing within the time permitted to file a reply in support of the Bill of Costs. . . . When required to do so by law, the court shall grant a party’s timely request for a hearing.

If a party contests the factual basis for or reasonableness of an

award of costs and timely requests a hearing, the district court

must hold a hearing. Foster v. Phillips, 6 P.3d 791, 796 (Colo. App.

33 1999); Harvey v. Farmers Ins. Exch., 983 P.2d 34, 41 (Colo. App.

1998), aff’d sub nom. Slack v. Farmers Ins. Exch., 5 P.3d 280 (Colo.

2000).

¶ 59 Begley and Hirsch opposed Gibbs’s bill of costs, arguing that

the costs claimed were unreasonable and unsupported. The same

day, they filed a motion to set a hearing on Gibbs’s motion for

attorney fees and bill of costs. Without conducting a hearing, the

district court awarded Gibbs most of the costs claimed. The same

day, it denied as moot Begley and Hirsch’s motion to set a hearing.

¶ 60 Begley and Hirsch timely requested a hearing, so the district

court was obligated to hold one. Because it failed to do so, we

reverse the award of costs and remand the matter to the district

court to hold a hearing on Gibbs’s bill of costs.

2. Gibbs Is the Prevailing Party

¶ 61 Begley and Hirsch contend that the district court also erred in

awarding costs against them by finding that Gibbs was the

prevailing party. Although we have already reversed the cost

award, we address and reject this contention as it is likely to arise

on remand.

34 ¶ 62 We review an award of costs for an abuse of discretion. See S.

Colo. Orthopaedic Clinic Sports Med. & Arthritis Surgeons, P.C. v.

Weinstein, 2014 COA 171, ¶ 8. A court abuses its discretion where

its decision is manifestly arbitrary, unreasonable, or unfair, or

where the court misapplies or misconstrues the law. Int’l Network,

Inc. v. Woodard, 2017 COA 44, ¶ 24.

¶ 63 C.R.C.P. 54(d) provides that “reasonable costs shall be allowed

as of course to the prevailing party.” “A ‘prevailing party’ is one who

prevails on a significant issue in the litigation and derives some of

the benefits sought by the litigation.” Archer v. Farmer Bros. Co., 90

P.3d 228, 230 (Colo. 2004).

¶ 64 The district court granted summary judgment in favor of

Gibbs on all claims asserted against him by Begley and Hirsch.

There is no question he is the prevailing party. The district court

did not abuse its discretion in so finding.

III. Appellate Fees and Costs

¶ 65 In the concluding paragraph of their opening brief, Begley and

Hirsch request appellate attorney fees. Pursuant to C.A.R. 39.1, a

party requesting attorney fees must include in its principal brief “a

specific request, and explain the legal and factual basis, for an

35 award of attorney fees.” Begley and Hirsch do not provide us with a

legal or factual basis to award attorney fees. The request is denied.

¶ 66 Ireson and Hoeckele request an award of appellate attorney

fees pursuant to C.A.R. 38(b), which authorizes such an award if we

determine that an appeal is frivolous. They do not support this

request with any argument. We do not find that Begley and Hirsch

were unable to present a rational argument based on evidence or

law, or that they prosecuted this appeal for the sole purpose of

harassment or delay. See Auxier v. McDonald, 2015 COA 50, ¶ 29.

And we have reversed the district court’s order on one issue. Thus,

the request is denied.

IV. Conclusion

¶ 67 The district court’s entry of summary judgment in favor of the

defendants-appellees is affirmed. The district court’s award of costs

to Gibbs is reversed, and the case is remanded for a hearing on

Gibbs’s bill of costs.

JUDGE DUNN and JUDGE FREYRE concur.