Lochbuie v. Hudson

24CA1417 & 24CA1814 Lochbuie v Hudson 09-25-2025

COLORADO COURT OF APPEALS

Court of Appeals Nos. 24CA1417 & 24CA1814
Weld County District Court No. 23CV30664
Honorable Todd L. Taylor, Judge

Town of Lochbuie, Colorado, a Colorado statutory town,

Plaintiff-Appellant,

and

Seter, Vander Wall & Meilke, P.C., a Colorado professional corporation,

Attorney-Appellant,

v.

Town of Hudson, a Colorado home rule municipality; Hudson Library Board of
Trustees, a Colorado Municipal Library Board of Trustees; and High Plains
Library District Board of Trustees, a Colorado Library District Board of
Trustees,

Defendants-Appellees.

JUDGMENT AFFIRMED AND ORDER VACATED

Division VI
Opinion by JUDGE TOW
Yun and Sullivan, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e)
Announced September 25, 2025

Berg Hill Greenleaf Ruscitti LLP, Josh A. Marks, Christopher G. Seldin,
Boulder, Colorado, for Plaintiff-Appellant

Seter, Vander Wall & Meilke, P.C., Kim J. Seter, Elizabeth A. Dauer, Russell
Newton, Greenwood Village, Colorado, for Attorney-Appellant
Hoffman, Parker, Wilson & Carberry, P.C., Corey Y. Hoffmann, Nathan T. Cash,
Denver, Colorado, for Defendant-Appellee Town of Hudson

Otis & Bedingfield, LLC, Lia Szasz, Frederick J. Steimling, Loveland, Colorado,
for Defendant-Appellee Hudson Library Board of Trustees

Coan, Payton & Payne, LLC, William Garcia, Joseph Williams, Greeley,
Colorado, for Defendant-Appellee High Plains Library District Board of Trustees
¶1 Plaintiff, the Town of Lochbuie (Lochbuie), appeals the district

court’s judgment dismissing its claims against defendants, the

Town of Hudson (Hudson), Hudson Library Board of Trustees

(Hudson Library Board),1 and High Plains Library District Board of

Trustees (High Plains), for failure to state a claim upon which relief

could be granted. Lochbuie and its counsel also appeal the district

court’s order awarding fees against them in favor of Hudson Library

Board and High Plains. We affirm the judgment but vacate the

order.

I. Background

A. Factual Background

¶2 Lochbuie is a Colorado statutory town with approximately

8,000 residents. Hudson, a Colorado home rule municipality with

approximately 1,650 residents, is located eight and a half miles

northeast of Lochbuie. In 1981, Hudson established the Hudson

Library by passing Ordinance 81-5, which created “a free public

1 Hudson and the Hudson Library Board, although separately

represented, often acted jointly in the proceedings in the district
court. Consequently, when we refer to those two parties
collectively, we use “the Hudson parties.”

1
library in and for the Town of Hudson.” Ordinance 81-5 also

established the Hudson Library Board.

¶3 In 1985, Weld County and several municipalities within the

county were in the process of establishing a library district.

Hudson adopted a resolution (the 1985 Resolution) documenting

the municipality’s agreement to participate in the new library

district, which was then known as the Weld Library District but was

later rebranded as the High Plains Library District (the Library

District), and defining a tax sharing agreement to allocate Library

District funds. The 1985 Resolution stated:

[T]he Town of Hudson agrees to participate in
the [Library] District under the understanding
that it will be allocated funds by [High Plains]
to the municipality’s library for public library
services for the service area to be defined by
[High Plains] which will be not less than that
portion of RE-3J School District on the
western side of Weld County Road 61 which
includes the municipalities of Hudson,
Keenesburg, and Lochbuie. The amount shall
be not less than two-thirds of the property tax
proceeds collected by the Library District from
the mill levy from the service area’s assessed
value.

Later that year, the Weld County Board of County Commissioners

adopted Ordinance No. 137, officially establishing the Library

2
District. Ordinance No. 137 acknowledged the tax sharing

agreement, noting “the municipalities of Ault, Eaton, Evans, Fort

Lupton, Greeley[,] and Hudson’s participation in the District is

based upon certain understandings regarding allocation of proceeds

from the mill levy back to the municipal libraries based upon

certain service areas as set forth in each municipal resolution.”

¶4 In 2014, the Library District and Hudson entered into an

intergovernmental “Agreement Concerning Participation in the High

Plains Library District” (2014 IGA). It also acknowledged that

Hudson’s participation in the Library District was contingent on the

tax sharing agreement previously defined in the 1985 Resolution.

¶5 In the 2014 IGA, the Library District and Hudson agreed “that

it is in the best interests of their residents to continue to have

certain coordinated library services and have identified their

individual and mutual responsibilities for providing the same.” The

obligations of Hudson and the Hudson Library Board included

(1) “use [of] the property tax proceeds . . . for public library

services”; (2) “compl[iance] with the applicable provisions of the

Colorado Library Law [§§ 24-90-101 to -122, C.R.S. 2025]”; (3) “use

[of] the guidelines contained in the Colorado Public Library

3
Standards . . . to develop and evaluate library services”; and

(4) “promot[ing] collection and resource sharing.” Moreover,

“Hudson and [the Library District] agree[d] that Hudson will provide

library services in Hudson’s service area in accordance with” a

defined model set forth in the 2014 IGA.

¶6 The 2014 IGA contained the following termination clause:

This Agreement may be terminated for cause
by a party prior to the [IGA’s] expiration . . . in
the event that the other party has not met the
obligations as stated in Section 1 and Section
2 of this Agreement, provided, however, that
the terminating party gives ninety (90) days
advance written notice and an opportunity to
cure to the other party, identifying in
reasonable detail the nature of the failure to
perform, by implementing a plan to correct
such deficiency. If at the end of such ninety
(90) day period the parties have not reached
agreement, then both parties agree to engage
in mediation with a mutually acceptable
third-party mediator . . . . If a mutual
satisfactory agreement cannot be reached at
the conclusion of the mediation period, this
Agreement may be terminated by either party.

¶7 In 2020, Hudson and the Library District renewed the IGA

(2020 IGA), incorporating the terms of the 2014 IGA and reaffirming

the tax sharing agreement. The 2020 IGA referenced Lochbuie

three times as part of the Hudson Library service area, but always

4
in the context of the town being within the boundaries of the RE-3J

School District.

¶8 Lochbuie has expressed dissatisfaction with its inclusion in

the Hudson Library service area, specifically claiming that it is not

receiving the “customary library services” to which it is entitled

under the Colorado Library Law. In the spring of 2023, asserting

that it was a third-party beneficiary of the IGA,2 Lochbuie declared

a breach of the agreement and invoked the IGA’s termination

clause. Hudson and High Plains did not recognize Lochbuie’s claim

and, instead, reauthorized the IGA near the end of 2023.

B. Procedural History

1. Lochbuie’s Complaint

¶9 Lochbuie filed a complaint against High Plains, Hudson, and

the Hudson Library Board, alleging that the Hudson parties,

“contrary to Colorado Law, § 24-90-103(4.5), C.R.S.

[2025], unilaterally declared [Hudson’s] service area in the [1985

Resolution]” to include Lochbuie. Lochbuie further alleged that

2 Because the 2020 IGA incorporates by reference the 2014 IGA,

which in turn incorporates the 1985 Resolution, all of the operative
contractual language is effectively contained in the 2020 IGA. We
thus refer to these agreements collectively as “the IGA.”

5
“High Plains has failed to provide a library facility and adequate

library services reasonably accessible to the citizens of Lochbuie

despite the responsibility of Hudson to use Lochbuie tax revenues

to provide such services to Lochbuie under the IGA.” Lochbuie

alleged that, as a third-party beneficiary of the IGA, it had a right to

its benefits and to declare a breach of the agreement and invoke the

termination provision.

¶ 10 The complaint set forth six claims for relief: (1) a declaratory

judgment regarding the invalidity of Hudson Library’s claimed

“Service Area” and the IGA; (2) a declaratory judgment regarding

termination of the IGA; (3) breach of contract; (4) breach of the

implied covenant of good faith and fair dealing; (5) mandamus

pursuant to C.R.C.P. 106(a)(2); and (6) unjust enrichment.

2. Motions to Dismiss and Lochbuie’s First Amended Complaint

¶ 11 High Plains individually filed a motion to dismiss the

complaint, while the Hudson parties jointly filed a separate motion

to dismiss. All three defendants asserted that Lochbuie had failed

to join the Town of Keenesburg and Weld County as indispensable

parties. The Hudson parties argued that Lochbuie’s claims were

based on an incorrect understanding of the Colorado Library Law.

6
High Plains argued that Lochbuie did not have any claim to services

under the IGA because it was not a party and because the IGA did

not explicitly state that services would be provided to Lochbuie.

¶ 12 Lochbuie filed responses to the motions to dismiss. High

Plains filed a reply, but the Hudson parties did not.

¶ 13 After briefing on the motions to dismiss had closed, but before

the district court ruled, Lochbuie timely filed a first amended

complaint (FAC) pursuant to C.R.C.P. 15. In the FAC, Lochbuie

added the Town of Keenesburg and Weld County as “potentially

interested parties.” Lochbuie also expanded on its allegations about

the interplay between the 1985 Resolution, the 2014 IGA, and the

2020 IGA. Also, invoking the statutory definition of “public library

services” — defined as “services customarily provided by a public

library,” § 24-90-103(13.5) — Lochbuie alleged that the Hudson

Library Board failed to supply Lochbuie with such services as

required by the Colorado Library Law, the 1985 Resolution, and the

IGAs. Specifically, Lochbuie alleged that the Hudson Library Board

“failed or refused to provide a library facility and other customary

services and programs in Lochbuie (other than an occasional

bookmobile under the Shared Services model).”

7
¶ 14 Lochbuie also elaborated on its attempt to invoke the IGA’s

termination clause, alleging that it declared a breach of the terms of

the IGA for failure to provide appropriate public library services.

Lochbuie alleged that, in response, Hudson, the Hudson Library

Board, and High Plains rejected Lochbuie’s invocation of the

termination clause and claimed the IGA requires Lochbuie to

mediate its grievances before bringing the action. Lochbuie

continued to assert the same six claims for relief as in its original

complaint.

¶ 15 The Hudson parties jointly filed a motion to dismiss Lochbuie’s

FAC. Four days later, the district court issued an order entitled

“Order Granting Motions to Dismiss” (dismissal order). The court

issued the dismissal order before High Plains filed a motion to

dismiss the FAC and seventeen days before Lochbuie’s deadline to

file a response to the Hudson parties’ joint motion to dismiss.

C.R.C.P. 121, § 1-15(1)(b) (“The responding party shall have 21 days

after the filing of the motion or such lesser or greater time as the

court may allow in which to file a responsive brief.”).

¶ 16 The district court acknowledged that Lochbuie had filed the

FAC after briefing on the original motions to dismiss had closed but

8
noted that “[b]ecause the amended complaint does not cure the

defects that the defendants argue exist in the original complaint,

the court considers the defendants’ arguments related to the

amended complaint and rules on the merits of those arguments as

applied to Lochbuie’s amended claims.”

¶ 17 The district court reasoned that if Lochbuie were successful in

voiding Hudson’s declaration of its service area to include Lochbuie,

High Plains would no longer be able to collect taxes from the service

area.3 The district court also criticized Lochbuie for making

inconsistent requests — seeking both to void the inclusion of

Lochbuie in the Hudson parties’ service area and to require those

parties to provide what Lochbuie considers adequate library

services.

¶ 18 The district court went on to analyze the specific claims. It

concluded that Lochbuie’s claim seeking to invalidate Hudson’s

expansive “service area” relied on contractual language that did not

3 As we will discuss later, the district court’s observation suffers

from a fundamental flaw. Voiding Hudson’s declaration of its own
service area would have no impact on whether that portion of
Lochbuie remained in (and its residents in the area remained
subject to taxation by) the High Plains Library District.

9
exist at the time Hudson’s service area was established. The court

further concluded that Lochbuie failed to provide any legal

authority supporting its view that either High Plains or the Hudson

parties have a legal duty to build and maintain a public library in

Lochbuie.

¶ 19 Turning to the contract-based claims, the court held that

Lochbuie failed to “make any well-pleaded allegations as to any

surrounding circumstances that would support its claim to be a

third-party beneficiary.” Thus, it looked solely at the terms of the

agreement. The court said that Lochbuie is “not mentioned in the

IGAs and is not bestowed with any direct benefits by the IGAs.”

Instead, the court ruled, Lochbuie receives only incidental benefits

that, as a matter of law, are insufficient to bestow on Lochbuie the

status of third-party beneficiary.

¶ 20 The court then, in the alternative, concluded that even if

Lochbuie could be a third-party beneficiary of the IGA, it still would

not be entitled to relief. The court observed that the IGA requires

that Hudson and the Hudson Library Board “provide library

services to a service area, not to Lochbuie specifically.”

10
¶ 21 The court rejected Lochbuie’s mandamus claim, concluding

Lochbuie’s allegations failed to establish that there was any clear

duty “to build and maintain a public library within Lochbuie’s

territorial limits.” And finally, the court dismissed the unjust

enrichment claim, again emphasizing that the IGA requires library

services to be provided to a service area rather than specifically to

Lochbuie.

3. Lochbuie’s C.R.C.P. 59 Motion

¶ 22 Lochbuie then filed a motion under C.R.C.P. 59, asking the

court to reconsider its order granting the motions to dismiss.

Lochbuie asserted that “[a]mendment of the Order is necessary to

correct the Court’s interpretation of Lochbuie’s allegations and legal

positions.”

¶ 23 Lochbuie sought to clarify its position that it was not

attempting to challenge its inclusion in the Library District, only its

inclusion within Hudson’s service area. Lochbuie then expanded on

its claim regarding what customary library services are owed by

citing, for the first time, the Colorado Department of Education’s

“Public Library Standards.”

11
¶ 24 As to the contract claims, Lochbuie reiterated its claim that, to

the extent the IGAs are enforceable, it is an intended third-party

beneficiary. Lochbuie added that if the district court was not

persuaded, it should not have dismissed the sixth claim — for

unjust enrichment — which was pleaded in the alternative to the

contract claims.

¶ 25 Specifically, Lochbuie argued that library services are the core

benefit addressed by the agreements and thus cannot be incidental.

It further argued that Lochbuie is explicitly referenced “as an area

that will be served by Hudson” and that the service area described

in the IGAs includes Lochbuie.

¶ 26 The district court denied Lochbuie’s Rule 59 motion. In its

order, the court described Lochbuie’s argument as “perplexing and

confusing,” noting that Lochbuie appeared to claim it “did not

contest or attempt to void High Plains’s service area or Lochbuie’s

inclusion in High Plains,” while Lochbuie’s first claim for relief in

the FAC “sought [a] declaratory judgment declaring that the

instrument establishing that service area and including Lochbuie

within its boundaries [wa]s invalid and unenforceable.” The court

reiterated its confusion regarding Lochbuie’s position when it noted

12
that any dissatisfaction Lochbuie had with its library services

should be directed to High Plains — not Hudson — as High Plains

was the ultimate taxing authority and “it was High Plains that

created the Hudson service area and included Lochbuie within it.”

Finally, the court noted that it did not consider Lochbuie’s “new

arguments about ‘customary library services’ and ‘Public Library

Standards’ [as] Lochbuie did not plead these allegations (which are

conclusory) and did not make these arguments in response to the

motions to dismiss.” While the order did not specifically address

Lochbuie’s arguments in the Rule 59 motion regarding its allegation

that it is a third-party beneficiary, the district court ultimately

concluded that Lochbuie was “not entitled to the relief it seeks.”

4. Attorney Fees

¶ 27 Hudson Library Board and High Plains each requested

attorney fees under C.R.C.P. 11 and section 13-17-102, C.R.S.

2025. Both parties argued that Lochbuie’s complaint and Rule 59

motion lacked substantial justification and did not constitute a

good faith argument. High Plains also cited Lochbuie’s purportedly

contradictory arguments as grounds for awarding fees. Both

parties sought an award jointly and severally against Lochbuie and

13
its counsel, Seter, Vander Wall & Mielke, P.C. (the Seter firm). The

court granted both parties’ requests for attorney fees, noting that

Lochbuie’s claims lacked a rational legal basis and that they were

substantially frivolous and vexatious.4

5. Consolidated Appeal

¶ 28 Lochbuie timely filed a notice of appeal of the dismissal order.

Later, the Seter firm filed a timely notice of appeal of the attorney

fees award on behalf of itself and Lochbuie. Shortly after the

second notice of appeal was filed, appellate counsel filed an entry of

appearance on behalf of Lochbuie. That entry did not mention the

Seter firm. On Lochbuie’s motion, the appeals were consolidated.

¶ 29 In the opening brief, counsel for Lochbuie asserted, “All of the

arguments made herein apply equally to [the Seter firm].” By

signing the opening brief with this statement, Lochbuie’s appellate

counsel effectively entered an appearance as the Seter firm’s

attorney as well. C.A.R. 5(a). Further, under the circumstances

here, we deem the quoted language above to be a sufficient

4 Initially, the district court awarded the attorney fees to Hudson, as

opposed to the Hudson Library Board. The court issued a corrected
order to remedy this mistake.

14
adoption of Lochbuie’s brief by the Seter firm. See C.A.R. 28(h)

(providing that in cases with more than one appellant, appellants

may join in a single brief).

II. Dismissal of the FAC

¶ 30 Notably, in its reply brief, Lochbuie explicitly abandons its

first, second, fifth, and sixth claims, leaving only the two claims

premised on Lochbuie’s alleged status as a third-party beneficiary

of the IGA. As a result, the district court’s actions regarding the

other four claims are only relevant to Lochbuie and the Seter firm’s

appeal of the attorney fee award.

¶ 31 As to the contract claims, Lochbuie argues that the district

court reversibly erred by dismissing them. We disagree.

A. Standard of Review and Applicable Law

¶ 32 A person who is not a party to an express contract is generally

barred from bringing an action based on that contract unless they

are a third-party beneficiary. Harwig v. Downey, 56 P.3d 1220,

1221 (Colo. App. 2002). A third-party beneficiary “may bring an

action on the contract if the parties to the agreement intended to

benefit the [third-party and if] . . . the benefit claimed is a direct

and not merely an incidental benefit of the contract.” S K Peightal

15
Eng’rs, LTD v. Mid Valley Real Est. Sols. V, LLC, 2015 CO 7, ¶ 7

(quoting Parrish Chiropractic Ctrs., P.C. v. Progressive Cas. Ins. Co.,

874 P.2d 1049, 1056 (Colo. 1994)). “While the intent to benefit the

nonparty need not be expressly recited in the contract, the intent

must be apparent from the terms of the agreement, the surrounding

circumstances, or both.” Harwig, 56 P.3d at 1221. An incidental

beneficiary — as opposed to an intended beneficiary — “is neither a

promisee nor one to whom the promise is to be rendered but who is

benefitted by the undertakings of the contracting parties.” Quigley

v. Jobe, 851 P.2d 236, 238 (Colo. App. 1992).

¶ 33 Whether the parties to a contract intended to create a third-

party beneficiary is generally a question of fact. E. Meadows Co. v.

Greeley Irrigation Co., 66 P.3d 214, 217 (Colo. App. 2003). However,

when the only evidence proffered by the plaintiff to support the

claim of third-party beneficiary status is the language of the

contract, the issue becomes one of contract interpretation, and

“[t]he interpretation of language in a contract is a question of law

that we review de novo.” Harwig, 56 P.3d at 1221. In interpreting a

contract, we give effect to the intent of the parties, which is

16
primarily determined from the contract language itself. Id. at

1221-22.

B. Analysis

¶ 34 In its dismissal order, the court stated that Lochbuie “is not

bestowed with any direct benefits by the IGAs.” The court

concluded that “Lochbuie receive[d] incidental benefits of the

contract,” which are not sufficient as a matter of law to make

Lochbuie a third-party beneficiary. We agree with the district court.

¶ 35 Initially, we do not agree with the court’s view that Lochbuie

“is not mentioned in the IGAs.” True, the 2014 IGA never mentions

Lochbuie by name. Instead, it simply states that “the service area

of [Hudson] library was defined as the boundaries of Weld County

School District RE-3J.” But the 2020 IGA mentions Lochbuie by

name three times. The first instance appears in the tax sharing

provision, where Hudson’s service area is defined as “that portion of

RE-3J School District on the western side of Weld County Road 61,

including the municipalities of Hudson, Keenesburg, and

17
Lochbuie.”5 The second instance appears in a chart — again

indicating that Lochbuie falls within the “Re-3” school district — in

a column labeled “service area,” which is to be served by Hudson

Library. Finally, Lochbuie is mentioned by name once more under

the section “Member Service Areas,” and is once again grouped

together with Hudson and Keenesburg as municipalities lying

within the boundaries of RE-3J, to be served by the Hudson

Library.

¶ 36 Significantly, every time Lochbuie is mentioned in the IGA, it is

in the context of explaining that it is one of the municipalities that

exists within the designated service area. But the designated

service area is not “Hudson, Keenesburg, and Lochbuie”; instead, it

is “that portion of RE-3J School District on the western side of Weld

County Road 61.” The specific municipalities are merely listed as

being within that portion of the school district’s boundaries.

5 We note that there is a discrepancy between the 2014 IGA and

2020 IGA insofar as the former describes the service area of Hudson
Library as “the boundaries of Weld County School District RE-3J,”
while the latter describes it as “that portion of RE-3J School District
on the western side of Weld County Road 61.” Given that Weld
County Road 61 is well to the east of Lochbuie’s boundaries, this
discrepancy does not impact our analysis.

18
Indeed, each service area on the previously mentioned chart is

defined as a school district (though one such district is only

affiliated with a single municipality, Fort Lupton).

¶ 37 Moreover, the 2014 IGA includes a proviso that the parties

agreed that “it is in the best interest of their residents to continue to

have certain coordinated library services.” They did not set forth

any similar agreement that it was in the best interests of the

municipalities within the Library District.

¶ 38 In other words, the district court was essentially correct when

it observed that Lochbuie “is not bestowed with any direct benefits

by the IGAs.” Rather, the intended beneficiaries are the Weld

County residents who support the Library District with their tax

dollars. (Lochbuie does not remit any taxes or other funds to the

Library District. And those of its residents who do remit such taxes

do so not because they are Lochbuie residents but, rather, Weld

County residents.) High Plains then provides those intended

beneficiaries with certain library services by dividing up the

taxpaying recipients into service areas based on the school districts

(not the municipalities) they live in.

19
¶ 39 In short, we can identify nothing in the IGA suggesting that

the parties intended Lochbuie itself, as opposed to those residents

who live within the Library District, to be a direct beneficiary of the

IGA. Because, as a matter of law, the IGA refutes Lochbuie’s claim

that it is a third-party beneficiary, and Lochbuie made no other

allegations to support its claim — indeed, the FAC said only, in

conclusory fashion, that “Lochbuie is and has been an intended

beneficiary of the IGA since its inception in 1985” — the district

court did not err by dismissing these claims.6

III. Attorney Fees

¶ 40 Lochbuie and the Seter firm argue the district court

erroneously awarded sanctions. We agree.

A. Standard of Review and Applicable Law

¶ 41 We will not disturb a district court’s award of attorney fees

under section 13-17-102 or as a sanction under C.R.C.P. 11 absent

6 In light of our conclusion that Lochbuie’s contractual claims fail

as a matter of law, any procedural error in the district court’s
premature dismissal is harmless. See Schwartz v. Owens, 134 P.3d
455, 457 (Colo. App. 2005) (“Even a technically flawed dismissal
may be affirmed if it was entered as a matter of law and the party
that lost its claim had adequate opportunity but did not offer any
evidence or argument on which the claim could have survived.”).

20
an abuse of discretion. E-470 Pub. Highway Auth. v. Jagow, 30

P.3d 798, 805 (Colo. App. 2001), aff’d, 49 P.3d 1151 (Colo. 2002).

“A trial court abuses its discretion when its decision is manifestly

arbitrary, unreasonable, unfair, or based on a misapplication of the

law.” Black v. Black, 2020 COA 64M, ¶ 118.

¶ 42 Attorney fees may be recovered when a party or its attorney

brings an action that lacks substantial justification.

§ 13-17-102(4). A civil action lacks substantial justification when it

is “substantially frivolous, substantially groundless, or substantially

vexatious.” § 13-17-101.5(1), C.R.S. 2025. “A claim is frivolous if

the proponent has no rational argument to support it based on

evidence or the law.” Black, ¶ 133 (quoting Zivian v.

Brooke-Hitching, 28 P.3d 970, 974 (Colo. App. 2001)). “A claim is

vexatious if brought or maintained in bad faith to annoy or harass

another; vexatiousness includes ‘conduct that is arbitrary, abusive,

stubbornly litigious, or disrespectful of the truth.’” Consumer

Crusade, Inc. v. Clarion Mortg. Cap., Inc., 197 P.3d 285, 290-91

(Colo. App. 2008) (quoting Bockar v. Patterson, 899 P.2d 233, 235

(Colo. App. 1994)). A court may award attorney fees for a violation

of C.R.C.P. 11 if it concludes that an attorney’s argument is not

21
“well grounded in fact and . . . warranted by existing law or a good

argument” or if it is “interposed for any improper purpose, such as

to harass or to cause unnecessary delay or needless increase in the

cost of litigation.” C.R.C.P. 11(a).

B. Analysis

¶ 43 The district court concluded that “Lochbuie’s claims were a

misguided attempt to obtain a form of relief — a new library built

within its boundary using tax dollars collected by a library

district — that is not available through the judicial process.” The

court found that, given the apparent flaw in the proposed legal

theory, Lochbuie lacked any rational legal argument to support its

claim, and the claim was substantially frivolous.

¶ 44 But the district court’s frustration was of its own making.

¶ 45 First, in chastising Lochbuie for what it characterized as

inconsistent requests, the district court overlooked that a party is

permitted to plead in the alternative. C.R.C.P. 8(e)(2).

¶ 46 Moreover, the court repeatedly misinterpreted Lochbuie’s

positions. For example, it mischaracterized Lochbuie’s first claim

as seeking to void the creation of the Library District altogether.

Instead, Lochbuie asserted that it should not have been included in

22
the service area of Hudson Library District. At no point did it ever

contend that it should not receive any library services from High

Plains. To the contrary, Lochbuie’s entire case stems from its claim

that it is entitled to a certain level of library services from High

Plains, but that High Plains’ effort to delegate the provision of those

services to Hudson is inadequate.

¶ 47 Further, when analyzing Lochbuie’s third-party contract claim,

the district court simply misread the IGA, inexplicably asserting

that the IGA did not specifically mention Lochbuie. As noted,

Lochbuie is mentioned three separate times.

¶ 48 Ultimately, the court oversimplified Lochbuie’s purported goal

in the litigation, reducing it to what it perceived as an effort to

acquire a physical library. While Lochbuie sometimes expressed its

goals as obtaining library facilities within its borders, the gist of the

overall claim, again, was that it is not receiving “customary public

library services” as it asserts is required by the Colorado Library

Law.

¶ 49 At its heart, Lochbuie’s overarching contention was

straightforward. Its residents pay tax dollars to the Library

District — which passes the bulk of these funds on to the Hudson

23
Library Board, ostensibly to pay for library services to Lochbuie’s

residents — but the town, in its view, sees little to no benefits for its

residents. According to Lochbuie, it never agreed to be placed in

Hudson’s service area and had no say in High Plains’ decision to

fulfill what Lochbuie contends are the Library District’s statutory

obligations to Lochbuie and its residents under the Colorado

Library Law by contracting with Hudson. It believes Hudson, and

by extension High Plains, is failing to provide Lochbuie residents

adequate library services under the Colorado Library Law.

Significantly, the scope of the statute’s requirements has never been

judicially developed. Indeed, the statute has been cited a mere four

times in published appellate cases, none of which has fleshed out

what it means to provide “services customarily provided by a public

library.” § 24-90-103(13.5). As a result, Lochbuie took legal action

to address this issue.

¶ 50 To be sure, the district court might ultimately be correct that

whether a library district has a legal obligation to provide specific

library services and specifically how a library district fulfills any

obligation it may have are nonjusticiable political questions. But

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that is certainly far from clear at this point and does not necessarily

mean the present claims are substantially frivolous.

¶ 51 And, as to the district court’s determination that Lochbuie was

being “stubbornly litigious” — which appears to underpin its

determination that the claims were substantially vexatious — we

note that Lochbuie filed its C.R.C.P. 59 motion in part because the

district court’s premature ruling on the motion to dismiss had

deprived Lochbuie of the opportunity to even attempt to explain

how the FAC cured the defects in the original complaint.7 See

Hamon Contractors, Inc. v. Carter & Burgess, Inc., 229 P.3d 282, 301

(Colo. App. 2009) (A party is not stubbornly litigious merely because

it disagrees with a ruling of the district court, as a party “cannot be

faulted for attempting to convince the court to reconsider its view of

the applicable law.”). Moreover, there is no support in the record

for the court’s statement that “Lochbuie’s legal strategy was aimed

at pressuring Hudson and High Plains to make concessions that

neither has a duty to make under the law.”

7 Again, we have concluded that the district court’s error in this

regard was harmless. But it is nevertheless an appropriate
consideration when assessing whether sanctions are appropriate.

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¶ 52 In our view, the district court’s determination that Lochbuie’s

claims were substantially frivolous and vexatious was

fundamentally flawed because of its incorrect and overly simplified

view of the claims. Because it was based on such a demonstrably

incorrect view of the claims, the court’s order is manifestly unfair

and unreasonable. Accordingly, the court abused its discretion in

awarding attorney fees, and the order must be vacated.

IV. Disposition

¶ 53 The judgment is affirmed. The order awarding attorney fees is

vacated.

JUDGE YUN and JUDGE SULLIVAN concur.

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