In re Marriage of Aragon

• Decision Date: 16 May 2019
• Docket Number: Court of Appeals No. 18CA0500
• Citation: 444 P.3d 837
• Parties: IN RE the MARRIAGE OF Vanessa Castillo ARAGON, Appellee, and Alain Leonardo Aragon, Appellant.
• Court: Colorado Court of Appeals

444 P.3d 837

IN RE the MARRIAGE OF Vanessa Castillo ARAGON, Appellee,

and

Alain Leonardo Aragon, Appellant.

Court of Appeals No. 18CA0500

Colorado Court of Appeals, Division V.

Announced May 16, 2019

Thomas Law Group, P.C., Sergei B. Thomas, Denver, Colorado, for Appellee

Leonard A. Martinez & Associates, PC, Leonard A. Martinez, Lakewood, Colorado, for Appellant

Opinion by JUDGE J. JONES

¶1 In this dissolution of marriage case between Vanessa Castillo Aragon (wife) and Alain Leonardo Aragon (husband), husband appeals two post-decree orders: a January 28, 2018, order awarding wife attorney fees, and a March 7, 2018, order awarding her child support and maintenance. We vacate the attorney fees order, affirm in part and reverse in part the child support and maintenance order, and remand the case for further proceedings.

I. Background

¶2 The parties’ thirteen-year marriage ended in 2017. They have five children. Under the initial February 2017 permanent orders, the district court ordered husband to pay wife $ 823 per month in child support and $ 1,372 per month in maintenance. Those calculations were based on husband then receiving $ 843 per week in workers’ compensation payments for temporary total disability. But because husband was awaiting final resolution of a workers’ compensation claim at that time, the court reserved a final decision on property division, child support, and maintenance until the claim was resolved.

¶3 In July 2017, husband settled his workers’ compensation claim for a lump-sum payment of $ 171,563, representing 165.34 weeks of pay at the rate of $ 887.48 per week.

¶4 Wife later moved to modify child support and maintenance. She also asked that the issue of attorney fees under section 14-10-119, C.R.S. 2018, be reopened and that husband be ordered to pay $ 28,583.50 of her fees and costs. The court granted wife’s request to reopen attorney fees and ordered husband to pay 75% of her requested fees and costs.

¶5 After a hearing, the court determined husband’s income by taking his workers’ compensation settlement, less the attorney fees he owed to his workers’ compensation attorney and the amount set aside for his future medical expenses; prorating that amount over twelve months beginning April 1, 2018; and adding in his income as an Uber driver and from an Airbnb rental property. The court attributed no income to wife and ordered the parties to recalculate child support and maintenance based on husband’s income, which resulted in husband owing wife $ 1,695 per month in child support and $ 4,170 per month in maintenance. The court noted that child support and maintenance would have to be recalculated on or before April 1, 2019 — the end of the proration period for husband’s settlement — and it denied wife’s request for additional attorney fees.

II. Attorney Fees

¶6 Husband first contends that the district court erred in awarding wife attorney fees. He argues that claim preclusion bars an award of fees wife incurred for the initial February 2017 proceedings. He also argues, and wife concedes, that the court didn’t make adequate findings to support the award under section 14-10-119. And he argues that the court erred by failing to conduct a hearing on fees and by failing to determine the reasonableness of wife’s requested fees using the lodestar method.

¶7 We agree with both parties that additional findings are necessary concerning attorney fees and remand the case for that purpose, and we agree with husband that the court should apply the lodestar method when determining reasonable attorney fees. But we reject husband’s arguments that claim preclusion bars wife from receiving fees she incurred for the initial permanent orders proceedings and that he was entitled to a hearing on wife’s request.

A. Legal Standards

¶8 Under section 14-10-119, "[t]he court from time to time, after considering the financial resources of both parties, may order a party to pay a reasonable amount" for the other party’s costs, including attorney fees, of maintaining dissolution proceedings. See In re Marriage of Gutfreund , 148 P.3d 136, 141 (Colo. 2006) (The statute empowers courts to "equitably apportion costs and fees between parties based on relative ability to pay."). The decision whether to award fees under the statute is discretionary; we won’t disturb such a decision absent a showing of an abuse of that discretion. In re Marriage of Davis , 252 P.3d 530, 538 (Colo. App. 2011) ; see Gutfreund , 148 P.3d at 141 (noting district court’s "great latitude to craft [attorney fee] orders appropriate to the circumstances of a given case").

¶9 In awarding fees, a court must make findings concerning the parties’ relative incomes, assets, and liabilities; and it must apportion fees based on the statute’s equitable purpose, explaining how and why it arrived at the specific amount of the award. In re Marriage of Aldrich , 945 P.2d 1370, 1378 (Colo. 1997) ; see also In Interest of K.M.B. , 80 P.3d 914, 917-18 (Colo. App. 2003) ("When awarding attorney fees, the trial court must specifically set forth the reasons for the award...."). The court must also consider the reasonableness of the hourly rate and the necessity for the hours billed. In re Marriage of Connerton , 260 P.3d 62, 67 (Colo. App. 2010) ; In re Marriage of Mockelmann , 944 P.2d 670, 672 (Colo. App. 1997) ; In re Marriage of Rieger , 827 P.2d 625, 625 (Colo. App. 1992) ; see also In re Marriage of Newell , 192 P.3d 529, 537 (Colo. App. 2008) (presuming magistrate considered attorney’s fee affidavit and was satisfied that fees were reasonably incurred).

B. Analysis

1. Additional Findings Are Necessary Regarding Attorney Fees

¶10 As wife concedes, although her motion and the court’s attorney fees order are captioned "pursuant to" section 14-10-119, the court didn’t make any findings regarding the basis for awarding fees under the statute. Though the court attached wife’s motion to its order, the motion asserts only that wife incurred substantial fees, most of which were "due to [husband’s] actions, lack of action, and/or purposely hiding compensation and employment funds." These factors aren’t a proper basis for awarding fees under section 14-10-119. See In re Marriage of Woolley , 25 P.3d 1284, 1288-89 (Colo. App. 2001) ( section 14-10-119 award is primarily intended to apportion fees based on the parties’ financial circumstances); see also In re Marriage of Trout , 897 P.2d 838, 840 (Colo. App. 1994).

¶11 Without more specific findings under the statutory standard, we aren’t able to meaningfully review the attorney fees order. See In re Marriage of Rozzi , 190 P.3d 815, 822 (Colo. App. 2008). Thus, we vacate the order and remand the case for additional findings. See Aldrich , 945 P.2d at 1380 ; K.M.B. , 80 P.3d at 917.

¶12 But the court need not hold a hearing on remand. As wife points out, the parties stipulated that the court would rule on her motion without a hearing. See In re Marriage of Ensminger , 209 P.3d 1163, 1167 (Colo. App. 2008) (court doesn’t have an obligation to hold a hearing sua sponte on a spouse’s request for attorney fees); see also Maloney v. Brassfield , 251 P.3d 1097, 1108 (Colo. App. 2010) ("Stipulations are a form of judicial admission" and "are binding on the party who makes them.") (citation omitted).

2. The Court Should Start by Determining a Lodestar Amount

¶13 We further conclude that, on remand, the district court should determine a lodestar amount as the starting point when evaluating the reasonableness and necessity of wife’s attorney fees. In so concluding, we reject the majority’s decision in Woolley , 25 P.3d at 1289, to the contrary. We instead agree with the dissenting judge in that case, who would have required calculation of a lodestar figure in determining fees under section 14-10-119. See 25 P.3d at 1289-91 (Taubman, J., concurring in part and dissenting in part); see also Visible Voices, Inc. v. Indus. Claim Appeals Office , 2014 COA 63, ¶ 25, 328 P.3d 307 (declining to follow the decision of another division of the court of appeals, and noting that one division of the court isn’t bound by another division’s decision). We do so for the following reasons.

¶14 The language of the statute clearly limits an award to those fees that are "reasonable." Though the statute requires the court to consider "the financial resources of both parties," that consideration goes to each spouse’s respective obligation — that is, the portion of the "reasonable" fees each spouse should bear. It doesn’t speak to the reasonableness of the fees incurred in the first instance. So some standard is needed to guide courts in making that threshold determination. One possible such standard is the "lodestar" approach.

¶15 Under the lodestar approach, the court first calculates a lodestar amount, which represents the number of hours reasonably expended on the case multiplied by a reasonable hourly rate. S. Colo. Orthopaedic Clinic Sports Med. & Arthritis Surgeons, P.C. v. Weinstein , 2014 COA 171, ¶ 23, 343 P.3d 1044. After calculating a lodestar amount, the court then has the discretion to make upward or downward adjustments to that amount after considering the relevant factors in Colo. RPC 1.5(a) for determining the reasonableness of attorney fees. S. Colo. Orthopaedic Clinic Sports Med. & Arthritis Surgeons , ¶ 24. These factors include the following:

(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;

(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;

(3) the fee customarily charged in the locality for similar legal services;

(4) the amount involved and the results obtained;

(5) the time limitations imposed by the client or by the circumstances;

(6) the nature and length of the professional relationship with the client;

(7) the experience, reputation, and ability of the

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