Marriage of Madeo

24CA1715 Marriage of Madeo 09-25-2025

COLORADO COURT OF APPEALS

Court of Appeals No. 24CA1715
Douglas County District Court No. 21DR30648
Honorable Charles Pratt, Judge

In re the Marriage of

Nicholle Madeo n/k/a Nicholle Taylor,

Appellant,

and

Jerad Madeo,

Appellee.

JUDGMENT AFFIRMED

Division I
Opinion by JUDGE GROVE
J. Jones and Schutz, JJ., concur

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

Bam Family Law PC, Heather S. Broxterman, Kayla S. Quinn, Denver,
Colorado, for Appellant

The W Law, Carolyn Witkus, Jon Eric Stuebner, Denver, Colorado, for Appellee
¶1 In this divorce case involving Nicholle Madeo (wife) and Jerad

Madeo (husband), wife appeals the permanent orders regarding

property division and attorney fees. We affirm.

I. Relevant Facts

¶2 After thirteen years of marriage and two children, wife filed for

divorce in August 2021. At that time, husband was president of

Rocky Mountain Empire Electric (RMK Electric), a business he

started with a friend before the marriage.

¶3 The district court held a six-day permanent orders hearing in

December 2023. The parties stipulated that, at the time of the

marriage, husband’s 75% ownership interest in RMK Electric was

worth $465,000. The court accepted the joint experts’ income

capitalization method to determine the present value of his interest.

After making certain adjustments, the court valued his share at

$3,448,401, resulting in marital appreciation of $2,983,401. The

court divided the rest of the $9.9 million marital estate and ordered

husband to make an equalization payment of $2,854,481 to wife.

The court excluded wife’s unpaid $305,930 in attorney fees from the

property division, classifying it as her separate obligation.

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¶4 Wife moved for post-trial relief, arguing that RMK Electric’s

value should have included $1.4 million in “excess working capital”

that was “not needed to operate the company on a day to day basis”

and that her outstanding attorney fees should have been divided as

a marital debt.

¶5 The district court denied the motion. While the court

acknowledged that excess working capital was a proper

consideration in valuing a business, it found that RMK Electric’s

cash reserves had dropped significantly and that any remaining

excess working capital was minimal by the hearing date. The court

also declined to change its decision on wife’s attorney fees.

II. Excess Working Capital

¶6 Wife maintains that the district court undervalued RMK

Electric by failing to account for roughly $1.4 million in “excess

working capital” that should have been included as a tangible asset

of the business. We disagree.

¶7 Valuing property is within the district court’s discretion, and

we will not disturb its valuation if it is reasonable in light of the

evidence as a whole. In re Marriage of Krejci, 2013 COA 6, ¶ 23.

The court may adopt either spouse’s valuation or make its own, and

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its decision will be upheld if supported by the record. See id.; Van

Gundy v. Van Gundy, 2012 COA 194, ¶ 12.

¶8 The parties hired joint experts to determine the present value

of husband’s interest in RMK Electric. Applying the capitalized

economic income method, their report valued RMK Electric as of

November 2022. In assessing RMK Electric’s present value, one

joint expert testified that as of November 2022, the business had

roughly $1.4 million in excess working capital. See In re Radiology

Assocs., Inc. Litig., 611 A.2d 485, 495 (Del. Ch. 1991) (“Excess

working capital is the amount of working capital beyond the

amount an entity needs to fund its business.”). But the expert was

unsure whether that excess working capital was still available at

the time of the permanent orders hearing — which occurred more

than a year after valuation date. The expert speculated that $1.4

million in excess working capital might remain when the hearing

occurred, but emphasized that a business must be valued based on

its financial condition at the time of the hearing.

¶9 One of husband’s rebuttal experts testified that RMK Electric

currently did not have excess working capital, given the business’s

ongoing burn rate and recent underperformance. Another rebuttal

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expert indicated that by June 2023 — six months before the

hearing — RMK Electric had no excess working capital but instead

had a deficit of $37,543. That expert also said that Wells Fargo’s

“loan covenants” required minimum reserves, leaving no

discretionary funds.

¶ 10 Wife’s own rebuttal expert admitted that the “majority” of the

business’s excess working capital in November 2022 likely no longer

existed by the time of the hearing.

¶ 11 While the district court acknowledged that excess working

capital is a proper consideration in valuing a business, it found that

the “weight of the credible evidence convinc[ingly]” showed that

RMK Electric’s “burn rate” had reduced the excess to a “negligible”

amount by the time the hearing took place. The court explained

that it could not calculate the exact amount but found it was far

less than the $1.4 million claimed. See Krejci, ¶ 23 (parties must

present relevant evidence to the court, and their failure to do so

does not provide grounds for reversal); see also In re Marriage of

Eisenhuth, 976 P.2d 896, 901 (Colo. App. 1999) (the district court is

required to consider the evidence presented to it; it does not act as

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a surrogate attorney). Because those findings have record support,

we will not disturb them. See Krejci, ¶ 23.

III. Wife’s Outstanding Attorney Fees

¶ 12 Wife also contends that, by “declining to account for the

significant and reasonable marital expense” of her unpaid attorney

fees in the “[m]arital [b]alance [s]preadsheet” or to award fees under

section 14-10-119, C.R.S. 2025, the district court inequitably

“forc[ed] her to pay the debt from her portion” of the property

division.

¶ 13 A district court has broad discretion in granting attorney fees

and costs under section 14-10-119, and we will not disturb its

decision on appeal absent an abuse of discretion. In re Marriage of

Aragon, 2019 COA 76, ¶ 8.

¶ 14 Section 14-10-119 provides, in relevant part, as follows:

The court from time to time, after considering
the financial resources of both parties, may
order a party to pay a reasonable amount for
the cost to the other party of maintaining or
defending any proceeding under this
article . . . and for attorney fees . . . including
sums for legal services rendered and costs
incurred prior to the commencement of the
proceeding or after entry of judgment.

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¶ 15 The statute empowers the district court to equitably apportion

fees and costs between the parties based on their relative ability to

pay. In re Marriage of Gutfreund, 148 P.3d 136, 141 (Colo. 2006).

The purpose of any award under section 14-10-119 is to equalize

the parties and ensure neither party suffers undue economic

hardship because of the divorce. In re Marriage of Aldrich, 945 P.2d

1370, 1377 (Colo. 1997). To that end, the court must evaluate the

parties’ overall economic circumstances. See In re Marriage of

Evans, 2021 COA 141, ¶ 73.

¶ 16 “Litigation costs” incurred and paid before permanent orders

may be allocated in the property division under section 14-10-113,

C.R.S. 2025, through reimbursement. In re Marriage of Burford &

Hughes, 26 P.3d 550, 559 (Colo. App. 2001).

¶ 17 However, unpaid “litigation expenses,” like attorney fees, fall

within the purview of section 14-10-119. See id.; see also In re

Marriage of Rieger, 827 P.2d 625, 625 (Colo. App. 1992) (“[W]e find

no authority for the characterization of . . . attorney fees as a non-

challengeable marital debt under § 14-10-113 . . . .”). Burford

suggests that this distinction promotes the equitable purpose of

section 14-10-119, which is to equalize the parties’ status and

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ensure that neither party suffers undue economic hardship because

of the divorce. See Burford, 26 P.3d at 559; see also Gutfreund, 148

P.3d at 141 (recognizing that section 14-10-119 serves an equitable

purpose).

¶ 18 Applying that framework, the district court correctly treated

wife’s unpaid fees as her separate obligation under section 14-10-

113 and excluded them from the property division. See Aragon, ¶

8. Fees not sought under section 14-10-119 are not compensable

as part of the marital estate. See Burford, 26 P.3d at 559.

¶ 19 Moreover, wife did not preserve the contention that the district

should have exercised its discretion under section 14-10-119. See

In re Marriage of Pawelec, 2024 COA 107, ¶ 38 (to preserve an issue

for appeal, the issue must be brought to the district court’s

attention and the court must have an opportunity to rule on it); see

also Core-Mark Midcontinent Inc. v. Sonitrol Corp., 2016 COA 22,

¶ 26 (only specific arguments made to the district court are

preserved for appeal). Although her attorney fees remained unpaid

at the time of the permanent orders hearing, triggering section 14-

10-119, she did not seek a fee award under that statute. Instead,

in the joint trial management certificate and her later proposed

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written permanent orders, she asserted that her fees “should be

treated as a marital debt and allocated to [her] as an equitable

division of the marital estate, given the parties’ relative

circumstances.” True, she cited section 14-10-119. But her stated

approach treated the fees as a marital debt under section 14-10-

113. She even anticipated that husband would challenge the

reasonableness of her fees and would argue that the fees “should

not be fully included in the [c]ourt’s division of the parties’ marital

estate,” confirming that she framed the issue as a property division

matter. Because she did not ask the court to exercise its discretion

under section 14-10-119, she cannot now fault the court for failing

to do so. See Core-Mark Midcontinent Inc., ¶ 26.

IV. Appellate Attorney Fees

¶ 20 Husband requests appellate attorney fees under C.A.R. 39.1

and section 13-17-102, C.R.S. 2025, asserting that wife’s appeal is

simply an attempt to extract more money from him. Although wife

did not prevail, we do not consider her contentions to be so lacking

in merit that they indicate frivolity or bad faith. See Mission Denv.

Co. v. Pierson, 674 P.2d 363, 365 (Colo. 1984) (“Standards for

determining whether an appeal is frivolous should be directed

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toward penalizing egregious conduct without deterring a lawyer

from vigorously asserting his client’s rights.”); see also In re

Marriage of Boettcher, 2018 COA 34, ¶ 38 (“Fees should be awarded

only in clear and unequivocal cases . . . .”), aff’d, 2019 CO 81.

V. Disposition

¶ 21 The judgment is affirmed.

JUDGE J. JONES and JUDGE SCHUTZ concur.

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