Tremitek v. Resilience

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.

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¶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

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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

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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,

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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).

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¶ 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

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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

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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

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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

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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

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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.

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¶ 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.”

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¶ 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).

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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.

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JUDGE YUN and JUSTICE MARTINEZ concur.

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