23 LTD v. Herman

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
July 25, 2019

2019COA113

No. 18CA0950, 23 LTD v. Herman — Labor and Industry —
Employment Contracts — Noncompetition Agreements —
Nonsolicitation Agreements

In this case concerning the alleged breach of an employment

agreement’s noncompete and nonsolicitation provisions, the

division holds that parties to an employment, noncompete, or

nonsolicitation agreement cannot contractually obligate a court to

blue pencil noncompete or nonsolicitation provisions to render any

unenforceable terms enforceable. Thus, the district court did not

err or abuse its discretion when it declined to blue pencil a

nonsolicitation provision that is unenforceable under Colorado law.
COLORADO COURT OF APPEALS 2019COA113

Court of Appeals No. 18CA0950
City and County of Denver District Court No. 14CV34518
Honorable J. Eric Elliff, Judge

23 LTD, d/b/a Bradsby Group, a Colorado corporation,

Plaintiff-Appellant and Cross-Appellee,

v.

Tracy Herman,

Defendant-Appellee and Cross-Appellant.

JUDGMENT AFFIRMED, ORDER REVERSED,
AND CASE REMANDED WITH DIRECTIONS

Division VII
Opinion by JUDGE BERGER
Dunn and Navarro, JJ., concur

Announced July 25, 2019

Sherman & Howard, L.L.C., Tamir I. Goldstein, William R. Reed, Denver,
Colorado, for Plaintiff-Appellant and Cross-Appellee

McElroy, Deutsch, Mulvaney & Carpenter, LLP, Kristi L. Blumhardt, Lily
Ramirez, Englewood, Colorado, for Defendant-Appellee and Cross-Appellant
¶1 This case presents an employment law issue of first

impression in Colorado –– when, if ever, is a court required to blue

pencil a noncompete or nonsolicitation 1 agreement to conform it to

Colorado law?2

¶2 23 LTD, d/b/a Bradsby Group (Bradsby), sued former

employee Tracy Herman for breach of noncompete and

nonsolicitation provisions in her employment agreement. A jury

determined that Herman had not breached the noncompete

provision. The jury returned a verdict (and awarded nominal

damages of one dollar) in favor of Bradsby on the nonsolicitation

claim, but the district court set aside that verdict and entered

judgment in favor of Herman because the nonsolicitation provision

violates Colorado law and because the court declined to narrow the

1 This provision is also sometimes referred to as a noncontact or no-
contact agreement.
2 While some courts use the term “blue penciling” to refer only to

the removal of words from a noncompete or nonsolicitation
provision without modifying or adding any other terms, Ferrofluidics
Corp. v. Advanced Vacuum Components, Inc., 968 F.2d 1463, 1469
(1st Cir. 1992), others use the term to refer more generally to any
court modifications of such provisions, ADP, LLC v. Rafferty, 923
F.3d 113, 120 n.7 (3d Cir. 2019). We use the term “blue pencil” to
refer to any modification of a noncompete or nonsolicitation
provision by a court.

1
provision to render it enforceable. Despite entering judgment in

favor of Herman on both claims, the court denied her request for

attorney fees under the agreement’s fee-shifting provision. Bradsby

appeals the merits judgment, and Herman cross-appeals the denial

of attorney fees.

¶3 We conclude that the record supports the jury’s verdict on the

noncompete claim and that the court did not err or abuse its

discretion in declining to blue pencil the nonsolicitation provision.

Thus, we affirm the court’s merits judgment. We also conclude that

Herman is entitled to attorney fees because she prevailed on both

breach of contract claims, and we therefore reverse the court’s order

denying attorney fees and remand with directions.

I. Relevant Facts and Procedural History

¶4 Bradsby hired Herman in 2009 as a legal recruiter. When she

was hired, she signed an Account Executive Employment

Agreement that included noncompete and nonsolicitation provisions

(agreement). The noncompete provision states, in relevant part:

Upon termination of his/her employment with
Bradsby, Account Executive . . . shall not . . .
within the Restricted Area from a period of
twelve (12) months from the date of
termination of employment become an owner,

2
partner, investor, or shareholder in any entity
that competes with Bradsby without prior
written consent of Bradsby . . . .

¶5 The agreement defines the “Restricted Area” as any place

“within 30 miles of Bradsby’s principal place of business,” which is

in downtown Denver.

¶6 The nonsolicitation provision states, in pertinent part:

Upon termination of his/her employment with
Bradsby, Account Executive . . . shall not
within the Restricted Area, for a period of
twelve (12) months from the date of
termination of employment, contact or solicit
the business of any person, entity, applicant,
client, employer or prospective employer who
Bradsby has contacted or solicited during the
twelve (12) months prior to the Account
Executive’s termination . . . .

¶7 The agreement also includes provisions prohibiting Herman

from disclosing Bradsby’s confidential information or using it for

her own benefit (the confidentiality provisions) without the prior

written consent of Bradsby.

¶8 While employed by Bradsby, Herman worked with one of

Bradsby’s clients, the law firm Vranesh and Raisch, LLP, to fill

various hiring needs. She also worked with a lawyer applicant to

help him find a job. Her efforts included setting up an interview

3
with Vranesh. Vranesh offered the applicant a job in 2012, but the

applicant declined the offer.

¶9 For reasons not relevant to our analysis, Bradsby terminated

Herman’s employment in 2014. At termination, Bradsby reminded

Herman of her noncompete and nonsolicitation obligations.

Herman sought clarification as to the scope of those obligations and

requested that the Restricted Area be reduced from a thirty-mile

radius to a twenty-eight mile radius (Herman’s home at the time

was twenty-eight miles from Bradsby’s main office). Bradsby

refused to modify the terms of the agreement.

¶ 10 Not long after, Herman formed Touchstone Legal Resources,

LLC. She obtained a mailbox at a UPS store in Monument,

Colorado –– outside the Restricted Area –– and listed this as the

new company’s address in its organizational documents (though

she later testified that she did non-recruiting work for Touchstone

from her home). At trial, she described Touchstone’s business as

“10 percent” recruiting and “90 percent” everything else, including

law firm succession planning.

¶ 11 After starting her new business, she reached out to the prior

applicant to see if anyone in his network would be interested in an

4
open position with the City of Fort Collins (the applicant had

significantly more experience than the position required).

¶ 12 The applicant then inquired whether Vranesh still had a

position open. As a result of this inquiry, Vranesh ultimately hired

the applicant and paid Herman (or Touchstone) $12,000 for her role

in the hiring.

¶ 13 When Bradsby learned that Herman had played a role in

Vranesh’s hiring of the applicant, Bradsby sued her for breach of

the noncompete and nonsolicitation provisions, arguing that

enforcement of those provisions was necessary to protect its trade

secrets.

¶ 14 Both parties moved for summary judgment. The district court

granted Herman’s motion for summary judgment, concluding that

the nonsolicitation provision “effectively prevents [Herman] from

competing at all for a one year period unless she effectively removes

herself from the Denver metropolitan area” because it “prohibits

[Herman] from contacting any person or entity in any of the

industries to which [Bradsby] provides recruiting services if that

person or entity had contact with any Bradsby employee.” The

court further concluded that the nonsolicitation provision is so

5
broad that it renders the noncompete provision superfluous and

concluded, as a result, that both provisions are “void and in

violation of Colorado law.” The court “decline[d] to ‘blue pencil’ the

Agreement in order to bring it into compliance,” stating that the

agreement’s confidentiality provisions adequately protect Bradsby’s

trade secrets.

¶ 15 Bradsby appealed to this court. A different division held that

the enforceability of the noncompete provision turned on the

existence of Bradsby’s alleged trade secrets and remanded the case

for a determination of, among other things, whether Bradsby held

trade secrets. 23 LTD v. Herman, (Colo. App. No. 16CA1095, Aug.

3, 2017) (not published pursuant to C.A.R. 35(e)) (Bradsby I). The

division also held that the nonsolicitation provision is “fatally

overbroad” and directed the district court on remand to “revisit its

decision not to blue pencil [the nonsolicitation provision] based on

the trade secret findings.” Bradsby I, slip op. at ¶¶ 23, 28. Finally,

the division rejected the district court’s analysis that the

nonsolicitation and confidentiality provisions are coterminous with

respect to trade secret protection.

6
¶ 16 On remand, the jury determined that Bradsby possessed trade

secrets, but that Herman had not violated the noncompete

provisions. The jury also found that Herman had violated the

nonsolicitation provision and awarded Bradsby damages of one

dollar. On post-trial proceedings, the district court declined to blue

pencil the overly broad nonsolicitation provision (recall the district

court concluded and Bradsby I held that, without modification, the

nonsolicitation provision violates Colorado law) and entered

judgment in favor of Herman on all claims.

¶ 17 The court denied Herman’s request for attorney fees because it

concluded that Herman had violated the confidentiality provisions

of her employment agreement –– a violation that was not pleaded or

at issue in the case.

II. Analysis

¶ 18 Bradsby argues that the district court erred in declining to

blue pencil the “fatally overbroad” nonsolicitation provision because

the agreement required the court to do so. Bradsby I, slip op. at ¶

23. To the extent the agreement did not actually require the court

to blue pencil the agreement, Bradsby contends the court abused

its discretion in declining to do so. Finally, Bradsby argues that the

7
record does not support the jury’s verdict that Herman did not

violate the noncompete provision. We reject all these contentions. 3

¶ 19 On cross-appeal, Herman argues that the court abused its

discretion in declining to award her attorney fees under the

agreement’s fee-shifting provision. We conclude that the court’s

reasoning was improper and that, under these facts, Herman is the

prevailing party entitled to attorney fees under the fee-shifting

provision.

A. The District Court Did Not Err or Abuse Its Discretion in
Declining to Blue Pencil the Unenforceable Nonsolicitation
Provision

1. General Principles

¶ 20 As a general matter, “[a]greements not to compete, with some

narrow exceptions, are contrary to the public policy of Colorado.”

Saturn Sys., Inc. v. Militare, 252 P.3d 516, 526 (Colo. App. 2011).

“The core policy underlying the unenforceability of noncompetition

provisions is a prohibition on the restraint of trade or . . . the right

to make a living.” Phoenix Capital, Inc. v. Dowell, 176 P.3d 835, 844

3 Bradsby also asks that if it prevails on this appeal, we remand to
the district court for an award of liquidated damages. Because we
affirm the district court’s merits judgment, that question is moot.

8
(Colo. App. 2007). A nonsolicitation agreement is a form of

noncompete agreement. Saturn Sys., 252 P.3d at 526.

¶ 21 There are exceptions to the general rule. One such exception

is set forth in section 8-2-113(2)(b), C.R.S. 2018, which provides

that “[a]ny covenant not to compete which restricts the right of any

person to receive compensation for performance of skilled or

unskilled labor for any employer shall be void, but this [prohibition]

shall not apply to: . . . [a]ny contract for the protection of trade

secrets.” While section 8-2-113(2)(b) provides a trade secret

exception to the statutory prohibition on noncompete agreements,

any such limitations must be reasonable and narrowly drafted.

Saturn Sys., 252 P.3d at 526.

¶ 22 As explained in detail below, Colorado law provides little

guidance as to when, and to what extent, trial courts may blue

pencil unreasonable noncompete provisions, so we look to decisions

of courts in other jurisdictions.

¶ 23 In states that permit the enforcement of reasonable

noncompete agreements, courts have taken three different general

approaches to unenforceable noncompete provisions, described by

the First Circuit as follows:

9
(1) the “all or nothing” approach, which would
void the restrictive covenant entirely if any part
is unenforceable, (2) the “blue pencil”
approach, which enables the court to enforce
the reasonable terms provided the covenant
remains grammatically coherent once its
unreasonable provisions are excised, and
(3) the “partial enforcement” approach, which
reforms [(blue pencils)] and enforces the
restrictive covenant to the extent it is
reasonable, unless the “circumstances indicate
bad faith or deliberate overreaching” on the
part of the employer.

Ferrofluidics Corp. v. Advanced Vacuum Components, Inc., 968 F.2d

1463, 1469 (1st Cir. 1992) (quoting Durapin, Inc. v. Am. Prods., Inc.,

559 A.2d 1051, 1058 (R.I. 1989)); see also 6 Williston on Contracts

§ 13:24, Westlaw (4th ed. database updated May 2019) (same).

¶ 24 Though Colorado appellate courts have not explicitly endorsed

any of these three approaches, they have made clear that trial

courts have the discretion to blue pencil unenforceable noncompete

provisions, at least to some extent. 4

4 Though Bradsby asks this court to blue pencil the agreement,
Bradsby has not cited, and we are unaware of, any case in which a
Colorado appellate court has blue penciled the provisions of a
noncompete, or any authority that would permit us to do so. We
thus reject this request.

10
¶ 25 In National Graphics Co. v. Dilley, 681 P.2d 546, 547 (Colo.

App. 1984), the court recognized that a “trial court has the

discretion to reform an unreasonable territorial restriction set forth

in a covenant not to compete in order to make the scope of the

geographic area reasonable” but concluded that the trial court did

not abuse its discretion in “refusing to rewrite the parties’

agreement by supplying the limitations of both duration and

geographic scope.”

¶ 26 In Gulick v. A. Robert Strawn & Associates, Inc., 477 P.2d 489,

493 (Colo. App. 1970) (not published pursuant to C.A.R. 35(f)), on

the other hand, the trial court narrowed the geographic scope of an

overly broad noncompete provision, and the appellate court upheld

that judgment.

¶ 27 And in Management Recruiters of Boulder, Inc. v. Miller, 762

P.2d 763, 764 (Colo. App. 1988), the court considered a

nonsolicitation provision that prohibited the defendant from

contacting any “candidate or employer-client with whom the

[defendant] had contact with or access to.” The division upheld the

trial court’s decision to “narrowly construe[]” the provision to only

11
bar contact with candidates or employer-clients with whom the

defendant had “actual contact.” Id. at 766.

¶ 28 In this case, the district court declined to blue pencil the

overly broad nonsolicitation provision. Therefore, we do not need to

broadly decide when and to what extent a Colorado trial court may

blue pencil an overly broad noncompete or nonsolicitation

provision. We address only the questions of (1) whether the

agreement or the law of the case required the district court to blue

pencil the nonsolicitation provision; and (2) assuming the court had

no such obligation, whether the district court abused its discretion

in declining to do so.

2. The District Court Was Under No Obligation to Blue Pencil the
Overly Broad Nonsolicitation Provision

¶ 29 In its opening brief, Bradsby contends that the severability

section of the agreement obligated the district court to blue pencil

the agreement to conform it to Colorado law. We disagree.

¶ 30 It is not the function of a court to write or rewrite contracts for

parties to enable enforcement of a contract that, as written, violates

the public policy of the state. Bayly, Martin & Fay, Inc. v. Pickard,

780 P.2d 1168, 1175 (Okla. 1989). While, under certain

12
circumstances, a court may exercise its discretion to blue pencil an

otherwise offensive restrictive covenant, the trial court has broad

discretion whether and when to exercise that authority. Nat’l

Graphics, 681 P.2d at 547.

¶ 31 We squarely reject the proposition that contracting parties, by

inclusion of language in a contract, may compel a court to blue

pencil an agreement that violates the public policy of this state.

Though Colorado law provides little guidance in this area, Bayly,

Martin & Fay, 780 P.2d 1168, decided in a jurisdiction that permits

trial courts to modify overly broad noncompete provisions, is

instructive. In that case, the Oklahoma Supreme Court declined to

modify (or require its trial courts to modify) overly broad

noncompete provisions, even though the contracts at issue granted

that authority, because doing so would require the court to rewrite

an unlawful contract. Id. at 1175.

¶ 32 Several other courts have rejected the proposition that parties

may delegate to the courts the responsibility to contract for them.

In Rector-Phillips-Morse, Inc. v. Vroman, 489 S.W.2d 1, 4 (Ark. 1973),

for example, the court considered a provision similar to the one in

this case and stated: “We are firmly convinced that parties are not

13
entitled to make an agreement, as these litigants have tried to do,

that they will be bound by whatever contract the courts may make

for them at some time in the future.”

¶ 33 Simply put, the court is not a party to the agreement, and the

parties have no power or authority to enlist the court as their agent.

Thus, parties to an employment or noncompete agreement cannot

contractually obligate a court to blue pencil noncompete provisions

that it determines are unreasonable.

¶ 34 Moreover, even if private parties could enlist a court to correct

their contracts, the contract in this case does not do so. Bradsby

argues in its opening brief that the severability provision in the

agreement states that “if any portion of the Agreement is held

invalid or unenforceable because of unreasonable overbreadth,” the

agreement will still be enforceable to the extent determined by the

court. (Emphasis added.) But as Herman correctly points out in

her answer brief, that is not what the agreement says. The

agreement states:

In the event that any portion of this Agreement
shall be held unenforceable, it is agreed that
the same shall not affect any other portions of
this Agreement, and the remaining covenants
and restrictions or portions thereof shall

14
remain in full force and effect; further, if the
invalidity or unenforceability is due to the
unreasonableness of the time or geographical
area covered by a covenant and restriction, the
covenants and restrictions shall nevertheless
be effective for the period of time and for such
area as may be determined to be reasonable by
a court of competent jurisdiction.

¶ 35 As noted by the district court, any conceivable mandatory duty

(which we reject) to blue pencil this contract is limited to correcting

overbreadth in the agreement’s geographic and temporal

restrictions. Those restrictions are not at issue.

¶ 36 Apparently recognizing that its opening brief argument cannot

be sustained based on the plain language of the agreement,

Bradsby reframes its argument in its reply brief. There, it contends

that notwithstanding the specific language of the severability

provision quoted above, the provision, “read as a whole,”

demonstrates a “clear intent to cure any unreasonable overbreadth

of the restrictive covenants and enforce them to the extent allowed.”

That is a weaker argument than Bradsby presented in its opening

brief. Considering the provision as a whole, the fact that the

severability provision specifically authorizes a court to modify the

geographic and temporal restrictions suggests, if anything, that only

15
those two restrictions were intended to be subject to modification by

a court. Beeghly v. Mack, 20 P.3d 610, 613 (Colo. 2001) (“[T]he

inclusion of certain items implies the exclusion of others.”).

¶ 37 Finally, like the district court, we do not interpret Bradsby I’s

mandate to require the district court to blue pencil the agreement

on remand; rather, we read Bradsby I to afford the district court

discretion to determine whether to blue pencil the agreement,

consistent with the discretion provided by our case law. Nat’l

Graphics, 681 P.2d at 547.

¶ 38 In sum, contrary to Bradsby’s argument, the district court

violated neither the law of the case nor the mandate of Bradsby I.

See Thompson v. Catlin Ins. Co. (UK), 2018 CO 95, ¶¶ 21-22

(mandate rule); Jones v. Samora, 2016 COA 191, ¶ 47 (law of the

case doctrine).

3. The District Court Did Not Abuse Its Discretion in Declining to
Blue Pencil the Overly Broad Nonsolicitation Provision

¶ 39 We also reject Bradsby’s argument that even if the court was

not compelled to blue pencil the agreement, it abused its broad

discretion in declining to do so.

16
¶ 40 We review a court’s decision not to blue pencil a noncompete

agreement to conform it to the requirements of the law for an abuse

of discretion. Nat’l Graphics, 681 P.2d at 547. A court abuses its

discretion when its decision is manifestly arbitrary, unfair, or

unreasonable, or contrary to law. People v. Jackson, 2018 COA 79,

¶ 37.

¶ 41 Fundamentally, it is the obligation of a party who has, and

wishes to protect, trade secrets to craft contractual provisions that

do so without violating the important public policies of this state. 5

That responsibility does not fall on the shoulders of judges. Rector-

Phillips-Morse, 489 S.W.2d at 4; Bayly, Martin & Fay, 780 P.2d at

1175.

5 We note that protection for trade secrets is self-effectuating under
the Colorado Uniform Trade Secrets Act, section 7-74-103, C.R.S.
2018. This statute protects (under the circumstances stated) trade
secrets irrespective of whether the holder of the trade secrets also
requires noncompete or nonsolicitation agreements. For this
reason, and because the confidentiality and noncompete provisions
remained effective throughout their terms, any contention that our
conclusion here would permit Herman to engage in rampant abuse
of Bradsby’s trade secrets is unfounded.

17
¶ 42 Here, the district court gave substantial reasons why it

declined to exercise its discretion to blue pencil the agreement. The

district court

• cited the general Colorado public policy against

noncompete provisions;

• based on the absence of relevant Colorado case law,

reviewed authority in other jurisdictions counseling

restraint in blue penciling parties’ agreements,

particularly where the overbreadth of the initial

restriction renders it unfair;

• pointed out the significant overbreadth of the

nonsolicitation provision; and

• concluded that “significant modification would be

necessary to make it comport with the law.”

¶ 43 Bradsby proposes three separate ways in which a court could

blue pencil the nonsolicitation provision, which as written prohibits

Herman from soliciting any person or entity previously contacted by

Bradsby: (1) barring Herman only from soliciting individuals whom

she had contacted while in Bradsby’s employ; (2) barring Herman

only from soliciting Bradsby clients; or (3) barring Herman only

18
from soliciting Bradsby clients whom she had contacted. The

multiple blue pencil options supplied by Bradsby support the

district court’s observation that blue penciling would require

“significant modification.” The court would have to determine not

only which provisions to delete, but also which provisions to add,

essentially rewriting the nonsolicitation clause.

¶ 44 While we agree with Bradsby that Bradsby I concluded that

the confidentiality provisions are not coterminous with the

nonsolicitation provision, and therefore cannot render the

nonsolicitation provision superfluous, the district court’s other

reasons for declining to blue pencil the agreement constitute sound

reasons for the exercise of the court’s discretion.

¶ 45 Accordingly, we reject Bradsby’s argument that the district

court abused its discretion.

B. The Jury Verdict That Herman Did Not Form a Competing
Company Has Support in the Record

¶ 46 Bradsby next argues that the jury’s verdict that Herman did

not form a competing company in violation of the noncompete

provision is not supported by the evidence and asks that we

19
“reverse the jury’s verdict.” Because there is record support for the

jury’s verdict, we reject this argument.

¶ 47 “Appellate courts are bound by a jury’s findings and can only

disturb a jury verdict if clearly erroneous.” Murphy v. Glenn, 964

P.2d 581, 584 (Colo. App. 1998) (citation omitted). “It is within the

jury’s province alone to determine the weight of the evidence and

the credibility of witnesses, and to draw all reasonable inferences of

fact therefrom.” Id. Therefore, “a jury’s verdict will not be disturbed

if there is any support for it in the record.” Id.

¶ 48 The parties presented conflicting evidence to the jury as to

whether Herman formed a competing company in violation of the

noncompete provision. At bottom, Bradsby asks us to reweigh this

conflicting evidence. We do not have the authority to do so. Id.

¶ 49 Herman testified that Touchstone was not primarily a

recruiting company, that any recruiting work was undertaken

outside the Restricted Area, and that Touchstone maintained a

business address outside the Restricted Area. It was the jury’s sole

responsibility to determine whether this testimony was true.

20
C. As the Prevailing Party, Herman Is Entitled to Attorney Fees

¶ 50 Herman argues that she is the prevailing party because the

court entered judgment in her favor as to both the noncompete and

nonsolicitation claims. We agree.

¶ 51 We review determinations of which party is the prevailing

party under a fee-shifting provision for an abuse of discretion.

Anderson v. Pursell, 244 P.3d 1188, 1193-94 (Colo. 2010).

¶ 52 Applying this standard, we first conclude that the district

court’s rationale cannot support its conclusion that Herman is not

the prevailing party. Second, we conclude that Herman is the

prevailing party because she prevailed on both breach of contract

claims litigated. Klun v. Klun, 2019 CO 46, ¶ 31.

1. The District Court’s Determination That Herman Breached the
Unlitigated Confidentiality Provision Cannot Support the
Conclusion that Herman Is Not the Prevailing Party

¶ 53 The district court concluded that Herman was not the

prevailing party because,

while [Herman] may not legally have breached
those relevant provisions of her contract
litigated in this case, she nevertheless
breached her obligations not to use [Bradsby’s]
information for her own benefit. Thus, she
cannot be considered the ‘prevailing party’

21
under Spencer’s reasoning and is not entitled
to her attorney fees.

¶ 54 For several reasons, we cannot sustain the district court’s

attorney fee order on this basis. First, Bradsby did not allege in its

complaint that Herman had violated the confidentiality provision.

Second, one or both of the parties demanded a jury trial on all

issues pleaded. Third, and most importantly, the question of

whether the confidentiality provision was violated was never tried

before the jury or litigated in any sense (at least until the court

made its own finding). Finally, Herman had no opportunity to

defend herself against this allegation.

¶ 55 The district court did not cite, and we have not found, any

authority authorizing a court to deny recovery under a prevailing

party attorney fee clause when the court finds contractual

violations not alleged or tried in the case. Thus, despite the

significant discretion afforded the district court in determining

which party is the prevailing party, Whiting-Turner Contracting Co. v.

Guarantee Co. of N. Am. USA, 2019 COA 44, ¶ 56, the district

court’s finding that Herman violated the unlitigated confidentiality

22
provision cannot sustain its conclusion that Herman was not the

prevailing party.

2. Herman is the Prevailing Party

¶ 56 “[W]here a claim exists for a violation of a contractual

obligation, the party in whose favor the decision or verdict on

liability is rendered is the prevailing party for purposes of awarding

attorney fees.” Dennis I. Spencer Contractor, Inc. v. City of Aurora,

884 P.2d 326, 327 (Colo. 1994).

¶ 57 Bradsby alleged that Herman breached two provisions of the

agreement: the noncompete provision and the nonsolicitation

provision. Herman indisputably prevailed on each of these claims,

as evidenced by the judgment entered in her favor (and which we

affirm). Thus, she is the prevailing party.

¶ 58 Relying on Archer v. Farmer Bros. Co., 90 P.3d 228, 230-31

(Colo. 2004), Bradsby argues Herman is not the prevailing party

because Bradsby prevailed on the “significant issue” of whether

Bradsby held trade secrets and obtained “some of the benefits

sought by the litigation.” Archer, however, is inapposite for multiple

reasons.

23
¶ 59 First, as two divisions of this court have opined, “Spencer

articulated the test for a ‘prevailing party’ under a contract, whereas

Archer was a tort case and involved a cost award to a prevailing

party under C.R.C.P. 54(d).” Extreme Constr. Co. v. RCG Glenwood,

LLC, 2012 COA 220, ¶ 55 (citing Pastrana v. Hudock, 140 P.3d 188,

190-91 (Colo. App. 2006)). Second, in Archer, “either party could

arguably [have been] considered the ‘prevailing party’” because each

party prevailed on one or more of the claims at issue. 90 P.3d at

231. That is not the case here because Bradsby did not prevail on

either breach of contract claim. 6

¶ 60 Even if we were to apply the Archer test, Bradsby did not

obtain “some of the benefits sought by the litigation.” Id. at 230.

Bradsby did not sue Herman to obtain a ruling that it held trade

6 Anderson v. Pursell, 244 P.3d 1188 (Colo. 2010), does not require
a different result. Although the court in that case applied the
“significant issue” test articulated in Archer to determine which
party was the prevailing party under a fee-shifting agreement, that
case involved an application for adjudication of water rights, rather
than a breach of contract claim. Id. at 1193-95. Further, the
applicant in Anderson received some of the water rights requested,
but the water court denied other portions of the application, so
there was no clear-cut prevailing party. Id. at 1192.

24
secrets. It brought the litigation to enforce the noncompete and

nonsolicitation provisions and did not obtain the relief sought.

¶ 61 In addition, and contrary to Bradsby’s position, the fact that

the jury entered a verdict in Bradsby’s favor as to the

nonsolicitation claim is meaningless when that claim ultimately

failed, and judgment on that claim was rendered in Herman’s favor.

¶ 62 Bradsby’s final contention is that Herman is judicially

estopped from relying on the fee-shifting provision because Bradsby

argued at various points that the entire agreement was void. To

support this contention, Bradsby relies on New Hampshire v. Maine,

which states that when “a party assumes a certain position in a

legal proceeding, and succeeds in maintaining that position, he may

not thereafter, simply because his interests have changed, assume

a contrary position.” 532 U.S. 742, 749 (2001) (citation omitted).

¶ 63 Bradsby’s argument fails because Herman did not “succeed[]

in maintaining that position.” Id. The court only ruled that the

nonsolicitation provision was unenforceable, not that any other

portions of the agreement were unenforceable. Bradsby does not

contend, and we do not conclude, that the unenforceability of the

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nonsolicitation provision alone renders the fee-shifting provision

unenforceable.

¶ 64 Ordinarily, given the discretion afforded the trial court in

determining which party is the prevailing party, we would remand

to the district court for a prevailing party determination. Spencer,

884 P.2d at 328 n.6. But here, applying Spencer and considering

that Herman indisputably prevailed on both claims, the only

determination on remand that an appellate court could affirm is a

determination that Herman is the prevailing party. Given this, it

would be a waste of judicial resources to remand to the district

court for a prevailing party determination.

¶ 65 Because we affirm the district court’s merits judgment and

conclude that Herman was the prevailing party, we grant Herman’s

request for appellate attorney fees and costs under the fee-shifting

agreement and C.A.R. 39.

III. Conclusion

¶ 66 The merits judgment in favor of Herman is affirmed. The

district court’s order denying attorney fees to Herman is reversed.

On remand the district court is directed to enter an order awarding

Herman reasonable attorney fees in the amount previously

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requested (because Bradsby did not contest the reasonableness of

that amount) plus reasonable appellate attorney fees and costs, as

determined by the district court.

JUDGE DUNN and JUDGE NAVARRO concur.

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