Myers v. American Modern Property and Casualty Insurance Company

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez
Civil Action No. 22-cv-3222-WJM-MDB
SUZANNE MYERS,
Plaintiff,
v.
AMERICAN MODERN PROPERTY AND CASUALTY INSURANCE COMPANY,
Defendant/Third-Party Plaintiff
v.
JENNIFER H. WILLIAMS, individual; and
EMPLOYER REALTY TEAM, LLC, a Colorado Corporation
Third-Party Defendants
ORDER DENYING DEFENDANT/THIRD-PARTY PLAINTIFF’S
MOTION FOR ATTORNEY’S FEES
Before the Court is Defendant/Third-Party Plaintiff American Modern Property
and Casualty Insurance Company’s (“American”) Motion for Attorney’s Fees (“Motion”)
against Third-Party Defendants Jennifer H. Williams and Employer Realty Team, LLC
(jointly, “Williams”). (ECF No. 76.) Williams did not file a response.
For the following reasons, the Court denies the Motion.
I. BACKGROUND
The parties are familiar with the general background of this case from, among
other sources, the Court’s Order granting default judgment in favor of American and
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against Williams. (ECF No. 74.) The Court incorporates that background here and
adds the following pertinent facts.
In January 2024, American moved for default judgment against Williams. (ECF
No. 61.) Therein, it sought to collect from Williams $63,000—i.e., the amount for which
it settled its claims with Plaintiff Suzanne Myers—and “the reasonable attorneys’ fees
and costs associated with collection.” (Id. at 13.) The Court concluded that it had
subject matter jurisdiction over the action and that the alleged facts, which were
deemed true as a result of Williams’s default, “support[ed] American’s equitable
subrogation claim.” (ECF No. 74 at 9.) Accordingly, the Court entered default judgment
in American’s favor and awarded it $63,000. (Id. at 12.)
As to its request for attorney’s fees, however, the Court observed that “American
d[id] not request attorney’s fees in a particular amount, nor . . . provide documentation
of its attorney’s fee rate or time spent on this matter.” (Id.) The Court therefore directed
American “to supply full documentation of its attorney’s hours expended on this matter,
its attorney’s hourly rate, and the reasonableness of both.” (Id.) In the conclusion
paragraph of its Order, the Court specified that American “shall submit all
documentation as required by rule and applicable case law of the reasonable amount of
attorney’s fees and costs expended by it in this matter . . . .” (Id. at 13.)
In August 2024, American filed the Motion, seeking $114,730.50 in attorney’s
fees. (ECF No. 76 at 5.) American contends that, “as a as a result of Williams’ acts and
omissions, [it] was required to defend itself against Plaintiff’s Complaint for breach of the
insurance contract and bad faith.” (Id. at 2.) It argues that its requested amount is
consistent with the factors listed in Rule 1.5 of the Colorado Rules of Professional
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Conduct, and that “[t]he combination of claims for statutory bad faith and American
Modern’s third-party claims for equitable subrogation and equitable contribution
increased the complexity of this matter.” (Id. at 3, 4.)
II. ANALYSIS
American contends it is entitled to collect a whopping $114,730.50 in attorney’s
fees from Williams because her “act and omissions” caused the damages alleged by
Myers against American. (Id. at 1–2.) The Court disagrees, however, because
American has failed to show that any contract provision or legal authority permits such a
recovery in this action.
“Generally, the ‘American Rule’ provides that ‘the prevailing litigant is ordinarily
not entitled to reasonable attorney's fees.’” Preitauer v. Am. Fam. Mut. Ins. Co., S.I.,
741 F. Supp. 3d 934, 941 (D. Colo. 2024) (quoting Alyeska Pipeline Serv. Co. v.
Wilderness Soc., 421 U.S. 240, 247 (1975)). But “that general rule is subject to
exception if the contract in question calls for a deviation from that rule or if the
legislature dictates an alternative arrangement through statute.” Id. (quoting Guarantee
Tr. Life Ins. Co. v. Est. of Casper by & through Casper, 418 P.3d 1163, 1172 (Colo
2018)); see also Travelers Cas. & Sur. Co. of America v. Pacific Gas & Elec. Co., 549
U.S. 443, 448 (2007) (same).
American has not clearly or explicitly argued on what grounds the Court may
deviate from the general “American Rule” that parties should bear their own attorney’s
fees. It does not argue that some contract provision entitles it to recover attorney’s fees
from Williams. Nor does it argue that a statute authorizes fee shifting in this case.
Relatedly, American’s Motion is marked by a lack of clarity for why it should recover
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fees: It does not clearly explain whether it believes it is entitled to recover the fees it
incurred defending against Myers’s breach of contract and bad faith claims, or the fees
it incurred pursuing its own equitable subrogation or equitable contribution claims
against Williams. The Motion instead seems to suggest that American is entitled to
recover the fees it expended to litigate both of these offensive and defensive claims.
(See generally ECF No. 76 (naming all these claims throughout its six-page Motion).)
This lack of clarity is problematic to American’s position for at least two reasons.
First, the Court has not located (and American has not cited) any authority holding that
a defendant is entitled to recover attorney’s fees against a third-party defendant based
on an equitable subrogation or equitable contribution claim. The closest authority the
Court has found is Agsecurity Insurance Co. v. Affiliated Foods, Inc., which merely
opined that a plaintiff “could” recover its attorney’s fees if it was successful on its
equitable subrogation claim. 2013 WL 5818551, at *5 (W.D. Okla. Oct. 29, 2013) (“To
the extent plaintiff is making an equitable subrogation claim, and if the jury ultimately
finds that defendant was negligent and plaintiff's insureds were fault free, the Court finds
that plaintiff could recover the costs and attorney's fees of its insured and insured's
employees incurred in the minor parents' lawsuit.”). And as for an equitable contribution
claim—which the Court did not grant default judgment on (see ECF No. 74 at 9 n.4 (“It
is doubtful that American could prevail under its equitable contribution theory.”)—the
Agsecurity Insurance Co. court observed that “the Oklahoma Supreme Court has held
that ‘no basis exists for recovery of attorney's fees in a contribution action.’” Id. (quoting
Nat’l Union Fire Ins. Co. v. A.A.R. W. Skyways, Inc., 784 P.2d 52, 58 (Okla. 1989)).
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Second, to the extent American believes it is entitled to recover fees based on
the time its attorney spent defending against Myers’s statutory bad faith claim,1 it has
not done its part to convince the Court that such a recovery is authorized here. “Section
10-3-1116, C.R.S., is the statute which was the foundation of the claim for unreasonable
delay or denial of insurance benefits.” Manchester Place HOA, Inc. v. Owners Ins. Co.,
2018 WL 11025155, at *1 (D. Colo. Mar. 26, 2018). “Under § 10-3-1116(5), ‘(i)f the
court finds that an action brought pursuant to this section was frivolous as provided in
article 17 of title 13, C.R.S., the court shall award costs and attorney fees to the
defendant in the action.’” Id. “A claim or defense is frivolous if its proponent cannot
“present a rational argument supporting the claim or defense.” Id. (quoting Bernal v.
Lumbermens Mut. Cas. Co., 97 P.3d 197, 203–04 (Colo. App. 2003) (citing W. United
Realty, Inc. v. Isaacs, 679 P.2d 1063 (Colo.1984)). “A claim or defense is groundless if
its proponent is not able ‘to produce evidence in support of the claim or defense.’” Id.
(citing Bilawsky v. Faseehudin, 916 P.2d 586 (Colo. App. 1995)).
Assuming without deciding that American can recover fees for the time its
attorney spent defending against Myers’s bad faith claims, it would likely have a strong
argument that Williams’s defense against these issues was frivolous.2 After all,
Williams asserted no defense to the claims raised by Myers (or American). See
Manchester Place Hoa, Inc., 2018 WL 11025155, at *2 (suggesting that a claim is
1 American does not cite any authority authorizing the award of attorney’s fees for a breach of
an insurance contract claim either.
2 The Court observes that a judge on the Colorado Court of Appeals has opined that, under
section 10-3-1116(5), “an award of attorney fees applies only to ‘an action brought pursuant to
this section,’ not to actions associated with an action brought pursuant to that section.” In Re
Marriage of Turilli, 507 P.3d 83, 92 (Colo. App. 2021) (Taubman, J., concurring in part and
dissenting in part) (emphasis added).
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frivolous if it was “irrational []or nonexistent”) (emphasis added). But American does not
even cite section 10-3-1116(5), let alone argue that Williams’s defense (or lack thereof)
was frivolous under that statute. As a result, American has utterly failed to show a legal
or factual basis upon which this Court can conclude that it is entitled to attorney’s fees
under section 10-3-1116(5). See MacKinney v. Allstate Fire & Cas. Ins. Co., 2016 WL
7034977, at *10 (D. Colo. Dec. 1, 2016) (denying fee request under section 10-3-
1116(5) where movant did not show that a claim or defense was frivolous); see also Hall
v. Allstate Fire & Cas. Ins. Co., 2021 WL 119344, at *4 (D. Colo. Jan. 12, 2021) (“But
without more, the court cannot say that Mr. Hall brought this suit in bad faith or that his
arguments lacked any rational basis.”).
Consequently, the Court need not address whether the hours expended by
American’s attorney were reasonable. See Evanston Ins. Co. v. L. Off. of Michael P.
Medved, P.C., 2017 WL 11556261, at *2 (D. Colo. May 4, 2017) (“While true that these
factors guide the district court's inquiry, the district court must first determine whether
Defendants’ statutory bad faith counterclaim was frivolous, as a finding that this
counterclaim is not frivolous relieves the court from making specific factual findings as
to each factor.”); see also Munoz v. Measner, 247 P.3d 1031, 1034 (Colo. 2011) (“We
hold that the plain language of section 13-17-103(1) requires the trial court to make
specific factual findings with regard to the application of the section's enumerated
factors only when granting an award of fees, not when denying an award . . . . Thus,
the first step of the analysis is to determine whether the action in question (or any part
thereof) [was frivolous].”).
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If American believes it is entitled to recover attorney’s fees pursuant to some
other authority not mentioned (or researched) by the Court in this Order, the Court
would have no way of knowing that, since the Motion is simply silent regarding which
authority that would be. American has not come close to making an adequate showing
of its entitlement to an award of $114,730.50 in attorney’s fees in this case. And it is
black letter law that the Court cannot make American’s arguments for it. See United
States v. Davis, 622 F. App’x 758, 759 (10th Cir. 2015) (“[I]t is not this court's duty, after
all, to make arguments for a litigant that he has not made for himself.”); see also Shaver
v. Whittier Condominiums HOA, 2023 WL 3321395, at *2 (D. Colo. May 9, 2023) (“In
other words, the Court cannot raise arguments on behalf of Mr. Shaver that he does not
raise himself.”); Mark O. v. Colvin, 2025 WL 392735, at *3 (D. Utah Jan. 8, 2025) (“A
court may consider an argument waived if a claimant fails to develop it, because this
failure does not allow for meaningful review.”); Avtech Cap., LLC v. MXM NV, Inc., 2024
WL 4894386, at *5 (D. Utah Nov. 26, 2024) (denying request for relief “for failure to
develop the argument and analyze relevant statutory and case law authority in the
context of the facts of this case”).
III. CONCLUSION
For the foregoing reasons, the Motion is DENIED. (ECF No. 76.)
Dated this 12 th day of March, 2025.
BY THE COURT:
______________________
William J. Martinez
Senior United States District Judge
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