In re Marriage of Sanchez-Vigil

• Decision Date: 16 November 2006
• Docket Number: No. 05CA0535.,05CA0535.
• Citation: 151 P.3d 621
• Parties: In re the MARRIAGE OF Veronica SANCHEZ-VIGIL, f/k/a Veronica Rael, Appellant, and Eril T. Rael, Appellee.
• Court: Colorado Court of Appeals

151 P.3d 621

In re the MARRIAGE OF Veronica SANCHEZ-VIGIL, f/k/a Veronica Rael, Appellant, and

Eril T. Rael, Appellee.

No. 05CA0535.

Colorado Court of Appeals, Div. II.

November 16, 2006.

Jim D. Rogers, Golden, Colorado, for Appellant.

No Appearance for Appellee.

Opinion by Judge ROTHENBERG.

In this post-dissolution of marriage proceeding, Veronica Sanchez-Vigil (wife) appeals the order denying her request for attorney fees and costs following the sentencing of her former husband, Eril T. Rael (husband), to jail for contempt of court. The issue on appeal is whether a party who successfully seeks punitive sanctions against another in a criminal contempt proceeding is entitled to attorney fees under a contractual provision for such fees. Because we conclude attorney fees should be awarded under such circumstances, we reverse the order of the trial court and remand with directions.

In 2000, the marriage of husband and wife was dissolved, and they entered into a separation agreement (the Agreement) that was incorporated into the decree of dissolution and entered as a permanent order of the court. The Agreement provides, as relevant here:

PREVAILING PARTY AWARDED FEES AND COSTS IN CASE OF DISPUTE: In the event that either party must petition the court for resolution of any dispute arising hereunder, the prevailing party shall be entitled to recover from the other party his or her expenses and costs ... including reasonable attorney fees.

In March 2004, wife filed a verified motion and affidavit for citation for criminal contempt of court. She requested that husband be required to pay her attorney fees and costs incurred based on her efforts to enforce compliance with the court's orders, in accordance with the fee-shifting provision in the Agreement. The court ordered the clerk to issue a citation to husband requiring him to show cause why "sanctions and/or imprisonment" should not be imposed on him for his failure to comply with the court's orders relating to child support.

In October 2004, following a hearing, the trial court found husband in criminal contempt of court, and in November, the court sentenced him to jail for punitive contempt. However, the court denied wife's request for attorney fees and her later motion for reconsideration.

Relying on Eichhorn v. Kelley, 56 P.3d 124 (Colo.App.2002), the trial court concluded as a matter of law that wife was not entitled to attorney fees because she did not benefit from the court's ruling finding husband in punitive contempt. The court cited In re Marriage of Nussbeck, 974 P.2d 493 (Colo. 1999), and In re Marriage of Watters, 782 P.2d 1220 (Colo.App.1989), for the proposition that a punitive contempt order is intended to vindicate and uphold the dignity of the court and not to benefit the interests of third parties.

Wife contends the trial court erred in denying her request for attorney fees under the Agreement. We agree.

Colorado follows the traditional American Rule that parties in a lawsuit are required to bear their own legal expenses unless attorney fees may be awarded under a statute, a court rule, or an express contractual provision. Bernhard v. Farmers Ins. Exch., 915 P.2d 1285 (Colo.1996).

Fee-shifting provisions in contracts are designed to override the general rule that the losing party does not have to pay the winner's attorney fees. These provisions contemplate that the "prevailing party" will be entitled to recover its attorney fees and that there will be one winner and one loser regarding payment of those fees. Brock v. Weidner, 93 P.3d 576, 579 (Colo.App.2004); see Wheeler v. T.L. Roofing, Inc., 74 P.3d 499, 503-04 (Colo.App.2003).

Here, wife demanded that husband comply with the terms of the Agreement, and she initiated a contempt proceeding when he refused or failed to do so. The plain language of the Agreement requires an award of attorney fees "[i]n the event that either party must petition the court for resolution of any dispute arising hereunder" (emphasis added). The language is clear and unambiguous, and we conclude the broad term "any dispute" includes these circumstances. We reject the trial court's determination that, as a matter of law, attorney fees are not permitted in punitive contempt actions and that wife was not a prevailing party for purposes of attorney fees.

I.

Sanctions for contempt of court may be punitive or remedial. Punitive sanctions are intended to punish conduct that is found to be "offensive to the authority and dignity of the court." C.R.C.P. 107(a)(4). Remedial sanctions are "imposed to force compliance with a lawful order or to compel performance of an act within the person's power or present ability to perform." C.R.C.P. 107(a)(5).

In Eichhorn v. Kelley, supra, a division of this court rejected the defendants' contention that they were entitled to attorney fees, pursuant to C.R.C.P. 107(d), as a punitive sanction in a contempt proceeding. The division reasoned as follows:

In an indirect contempt proceeding involving "Punitive Sanctions," the court "may impose a fine or imprisonment or both." C.R.C.P. 107(d)(1); In re Marriage of Nussbeck, [supra, 974 P.2d at 499]. This section of the rule does not provide for an award of attorney fees. However, in an indirect contempt proceeding "Remedial Sanctions" under C.R.C.P. 107(d)(2) may include assessment of "[c]osts and reasonable attorney's fees in connection with the contempt proceeding" in the discretion of the court, provided that the nature of the sanction has been disclosed in the motion or citation.

The inclusion of certain items implies the exclusion of others. Based on this rule of interpretation, we conclude that because C.R.C.P. 107(d)(2) specifically allows an award of attorney fees as a remedial sanction, and C.R.C.P. 107(d)(1) has no comparable provision for a punitive sanction, the latter provision must be construed to exclude an award of attorney fees as a punitive sanction.

Eichhorn v. Kelley, supra, 56 P.3d at 126 (additional citations omitted). Later divisions construing C.R.C.P. 107 have reached the same conclusion. See In re Lopez, 109 P.3d 1021 (Colo.App.2004) (citing Eichhorn and concluding attorney fees may not be awarded under C.R.C.P. 107); In re Marriage of Lodeski, 107 P.3d 1097 (Colo.App. 2004)(same).

However, Eichhorn and the other cases are distinguishable because none of them involved a request for attorney fees under an agreement that expressly provides for an award of such fees to the prevailing party. We have no quarrel with the holdings of Eichhorn and its progeny that C.R.C.P. 107 does not provide for an award of attorney fees in punitive contempt cases. But we conclude that Eichhorn does not preclude the trial court from enforcing a valid fee-shifting agreement like the one in this case, and that the trial court erred in ruling otherwise in this case.

The recent decision of In re Marriage of Ikeler, 148 P.3d 347 (Colo.App.2006), is instructive. There, a division of this court vacated an order by the trial court awarding attorney fees to the wife. The parties had entered into a marital agreement providing each party would be responsible for his or her own attorney fees. Nevertheless, the trial court awarded attorney fees to the wife after finding the agreement was unconscionable. On appeal, a division of this court set aside the award of attorney fees, concluding that marital agreements governing the manner in which each party's attorney fees will be paid should be enforced by the trial court.

Ikeler did not distinguish between cases where the parties have agreed each party will pay his or her own fees and those where, as here, they have agreed the prevailing party will be awarded attorney fees. Applying the reasoning of the division there, we conclude the agreement in this case is enforceable.

II.

We further conclude the trial court erred in determining, as a matter of law, that wife was not a "prevailing party" in the contempt action because she did not benefit from the court's ruling finding husband in punitive contempt.

The determination of which party succeeded or prevailed under a contractual fee-shifting provision is committed to the discretion of the trial court subject to an abuse of discretion standard of review on appeal. See Dennis I. Spencer Contractor, Inc. v. City of Aurora, 884 P.2d 326, 328 (Colo.1994). However, an abuse of discretion occurs when the trial court applies an incorrect legal standard. See Medina v. Conseco Annuity Assurance Co., 121 P.3d 345 (Colo.App.2005).

Here, the trial court relied on appellate decisions stating that sanctions in punitive contempt cases are imposed primarily to punish behavior that obstructs the administration of justice and to vindicate the dignity of the court. See In re Marriage of Nussbeck, supra; In re Marriage of Lodeski, supra; In re Marriage of Watters, supra.

Again, however, none of these cases involved a separation agreement or a contract providing for the recovery of attorney fees. Nussbeck did not even address the issue of attorney fees or discuss who is a "prevailing party" for purposes of attorney fees in a contract case, and Lodeski, like Eichhorn, only addressed the propriety of an attorney fees award under C.R.C.P. 107.

The division in Watters upheld an award of attorney fees to a father who had successfully challenged an excessive wage assignment for child support brought by the district attorney. As...