Belinda A. Begley & Robert K. Hirsch Revocable Trust v. Ireson

• Decision Date: 05 November 2020
• Docket Number: Court of Appeals No. 19CA1245
• Citation: 490 P.3d 963
• Court: Colorado Court of Appeals
• Parties: The BELINDA A. BEGLEY AND ROBERT K. HIRSCH REVOCABLE TRUST, Belinda A. Begley, and Robert K. Hirsch, Plaintiffs-Appellants, v. Myrtle IRESON; Lisa Harris, as Special Administrator of the Estate of Virginia Hoeckele; Andrew J. Gibbs; and Gibbs-Young, LLC, Defendants-Appellees.

490 P.3d 963

The BELINDA A. BEGLEY AND ROBERT K. HIRSCH REVOCABLE TRUST, Belinda A. Begley, and Robert K. Hirsch, Plaintiffs-Appellants,

v.Myrtle IRESON; Lisa Harris, as Special Administrator of the Estate of Virginia Hoeckele; Andrew J. Gibbs; and Gibbs-Young, LLC, Defendants-Appellees.

Court of Appeals No. 19CA1245

Colorado Court of Appeals, Division VI.

Announced November 5, 2020

Rehearing Denied November 25, 2020

Robert K. Hirsch, P.C., Robert K. Hirsch, Belinda Ann Begley, Denver, Colorado, for Plaintiffs-Appellants

Gordon & Rees, LLP, John R. Mann, Denver, Colorado; Jonsen Law Firm, LLC, Eric R. Jonsen, Broomfield, Colorado, for Defendants-Appellees Myrtle Ireson and Lisa Harris

McElroy, Deutsch, Mulvaney & Carpenter, LLP, Glendon L. Laird, Greenwood Village, Colorado, for Defendants-Appellees Andrew J. Gibbs and Gibbs-Young, LLC

Opinion by JUDGE BROWN

¶ 1 Plaintiffs-appellants, Belinda A. Begley, Robert K. Hirsch, and the Belinda A. Begley and Robert K. Hirsch Revocable Trust (collectively, Begley and Hirsch), appeal the district court's order granting summary judgment in favor of defendants-appellees Andrew J. Gibbs and Gibbs-Young, LLC (together, Gibbs) and granting partial summary judgment in favor of defendants-appellees Myrtle Ireson and Lisa Harris, as Special Administrator of the Estate of Virginia Hoeckele (together, Ireson and Hoeckele). Begley and Hirsch also appeal the district court's award of costs to Gibbs.

¶ 2 Applying the litigation privilege as articulated in Begley v. Ireson , 2017 COA 3, 399 P.3d 777 ( Begley I ), we affirm the entry of summary judgment. However, because the district court did not conduct a hearing, we reverse the award of costs to Gibbs and remand the case for further proceedings solely on that issue.

I. Background

¶ 3 Begley and Hirsch own residential property in the Washington Park neighborhood of Denver on which they wished to demolish the existing house and build a new one. Ireson is their neighbor on one side and Hoeckele was their neighbor on the other.¹

¶ 4 Begley and Hirsch contracted with Forte Development Group, LLC, owned by George R. Saad, to undertake the project. In mid-September 2014, Forte demolished the existing home and, on or about October 1, 2014, began shoring work necessary to excavate the basement of the new home.

¶ 5 Begley and Hirsch allege that Ireson and Hoeckele, individually and through Gibbs as their attorney, made statements, threats, and complaints that their respective properties had been damaged during construction, which caused Forte to cease all construction work as of October 2, 2014, and to breach the construction contract. According to Begley and Hirsch, when excavation finally began again on January 15, 2015, Gibbs threatened police intervention and demanded the work stop.

¶ 6 On January 20, 2015, Begley and Hirsch filed a complaint against Ireson, Hoeckele, and Gibbs, asserting claims for intentional interference with contract and intentional interference with prospective contractual relations. Nine days later, Ireson and Hoeckele filed their own lawsuit, Denver District Court Case No. 15CV30352, against Begley, Hirsch, and Forte, among others.

¶ 7 Hoeckele moved to dismiss Begley and Hirsch's complaint under C.R.C.P. 12(b)(5) for failure to state a claim upon which relief can be granted, arguing that her allegedly tortious conduct was protected by the litigation privilege. Ireson and Gibbs joined in the motion. The district court dismissed the complaint, holding that Begley and Hirsch failed to allege that Ireson and Hoeckele caused Forte to breach the contract, and that Gibbs's conduct was absolutely privileged.

¶ 8 Begley and Hirsch appealed, and a division of this court reversed. Begley I , 2017 COA 3, 399 P.3d 777. First, the division concluded that the complaint sufficiently alleged that Ireson and Hoeckele caused Forte to breach the contract. Id. at ¶ 11. Second, the division concluded that the litigation privilege attaches to an attorney's prelitigation statements only if (1) the prelitigation statement relates to prospective litigation and (2) the prospective litigation is contemplated in good faith. Id. at ¶¶ 17, 23. Because the district court did not address whether the prospective litigation against Begley, Hirsch, and Forte was contemplated in good faith, the division reversed and remanded for further proceedings. Id. at ¶¶ 24-26.

¶ 9 On remand, Gibbs moved for summary judgment and the district court granted the motion. It applied the two-part rule set out in Begley I and concluded that Begley and Hirsch failed to meet their burden to demonstrate a genuine dispute of material fact with respect to either part. The court later awarded Gibbs his costs as the prevailing party.

¶ 10 Ireson and Hoeckele also moved for summary judgment on the same grounds as Gibbs. The district court partially granted the motion. Considering its ruling on Gibbs's motion for summary judgment, the court concluded that Ireson and Hoeckele could not be vicariously liable for Gibbs's conduct because Gibbs's conduct was privileged. However, it concluded that genuine issues of material fact remained regarding the propriety of Ireson and Hoeckele's conduct before they retained Gibbs. The parties later filed a joint motion to dismiss with prejudice the remaining claims against Ireson and Hoeckele, which the court granted.

II. Analysis

A. Summary Judgment

¶ 11 Begley and Hirsch contend that the district court erred by concluding that application of the litigation privilege warranted summary judgment in favor of Gibbs, Ireson, and Hoeckele. Specifically, they argue that the court erred by (1) applying the litigation privilege to nondefamatory statements; (2) concluding that Gibbs's allegedly tortious conduct was related to contemplated litigation; and (3) concluding that Gibbs contemplated the litigation against them in good faith. We reject each contention in turn.

1. Standard of Review

¶ 12 The determination of privilege is a question of law we review de novo. Club Valencia Homeowners Ass'n v. Valencia Assocs. , 712 P.2d 1024, 1027 (Colo. App. 1985).

¶ 13 We also review the entry of summary judgment de novo. Shelter Mut. Ins. Co. v. Mid-Century Ins. Co. , 246 P.3d 651, 657 (Colo. 2011). Summary judgment is appropriate when the pleadings, affidavits, depositions, and admissions establish that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. C.R.C.P. 56(c) ; BA Mortg., LLC v. Quail Creek Condo. Ass'n , 192 P.3d 447, 450 (Colo. App. 2008). For purposes of summary judgment, a "material fact" is one that will affect the outcome of the case. Olson v. State Farm Mut. Auto. Ins. Co. , 174 P.3d 849, 853 (Colo. App. 2007).

¶ 14 The party moving for summary judgment bears the initial burden of demonstrating that there is no genuine issue of material fact. Cont'l Air Lines, Inc. v. Keenan , 731 P.2d 708, 712 (Colo. 1987). Once the moving party has met this initial burden, the burden shifts to the nonmoving party to establish a genuine issue of material fact. Id. "If the nonmoving party cannot muster sufficient evidence to make out a triable issue of fact ..., a trial would be useless and the moving party is entitled to summary judgment as a matter of law." Id. at 713.

2. The Litigation Privilege Generally

¶ 15 Statements made by an attorney during or in preparation for pending legal proceedings are absolutely privileged so long as the remarks have some relation to the proceeding. Begley I , ¶ 13 ; Club Valencia , 712 P.2d at 1027. This absolute privilege exists "to encourage and protect free access to the courts for litigants and their attorneys." Begley I , ¶ 13 ; see also Westfield Dev. Co. v. Rifle Inv. Assocs. , 786 P.2d 1112, 1117 (Colo. 1990).

¶ 16 In contrast, the litigation privilege attaches to an attorney's prelitigation statement only if (1) the statement is related to prospective litigation and (2) the prospective litigation is contemplated in good faith. Begley I , ¶ 17 ; see also Merrick v. Burns, Wall, Smith & Mueller, P.C. , 43 P.3d 712, 714 (Colo. App. 2001) ("Communications preliminary to a judicial proceeding are protected by absolute immunity only if they have some relation to a proceeding that is actually contemplated in good faith."); Restatement (Second) of Torts § 586 cmt. e (Am. Law Inst. 1977) ("As to communications preliminary to a proposed judicial proceeding, the [absolute privilege] applies only when the communication has some relation to a proceeding that is contemplated in good faith and under serious consideration.").

3. The Litigation Privilege Shields Nondefamatory Statements

¶ 17 Begley and Hirsch first argue that the district court erred by entering summary judgment because they contend the litigation privilege shields only defamatory statements and Gibbs's statements were not defamatory. Because the litigation privilege can apply to nondefamatory statements, we disagree.

a. Preservation

¶ 18 Ireson and Hoeckele contend that this issue is unpreserved because Begley and Hirsch did not raise it with the district court until their motion to reconsider the order denying the parties’ competing requests for C.R.C.P. 54(b) certification. Begley and Hirsch assert that they have been raising this argument "for five years," and cite their opposition to the original motions to dismiss filed by Ireson, Hoeckele, and Gibbs.

¶ 19 Because Begley and Hirsch did not raise this issue in connection with the motions for summary judgment, they arguably waived their right to raise it in this appeal. See Estate of Stevenson v. Hollywood Bar & Cafe, Inc. , 832 P.2d 718, 721 n.5 (Colo. 1992) (concluding that because the argument was not raised in response to summary judgment, it could not be raised on appeal). Nonetheless, in the interests of justice and judicial economy, we will address this argument on the merits.

b. Analysis

¶ 20 Begley and Hirsch assert that the most damaging of Gibbs's statements...