L.H.M. Corp. v. Martinez

Citation2021 CO 78
Decision Date13 December 2021
Docket Number20SC429
PartiesL.H.M. Corporation, TCD, d/b/a Larry H. Miller Chrysler Dodge Jeep Ram 104th, Petitioner v. Canuto John Martinez, Respondent
CourtSupreme Court of Colorado

Certiorari to the Colorado Court of Appeals Court of Appeals Case No. 19CA298.

Attorneys for Petitioner: Fairfield and Woods, P.C. Lee Katherine Goldstein Jason B. Robinson Michael J. Dommermuth Denver, Colorado.

Attorneys for Respondent: Wynkoop Law Office, PLLC, Richard Wynkoop Susan G. Thomas Wheat Ridge, Colorado.

Law Firm of Brian DeBauche, LLC Brian DeBauche, Denver, Colorado.

OPINION

MÁRQUEZ, JUSTICE.

¶1 After his attempt to buy an SUV went sideways, Plaintiff Canuto John Martinez successfully sued the car dealership, Defendant Larry H. Miller Chrysler Dodge Jeep Ram 104th ("LHM"), for violating section 6-1-708(1)(a), C.R.S. (2021), of the Colorado Consumer Protection Act ("CCPA"). The issue before us is whether the judgment was final for purposes of appeal when the district court determined that Martinez, as the prevailing plaintiff, was entitled to an award of attorney fees under the CCPA, but the court had not yet determined the amount of those fees. Our case law has offered conflicting guidance. In Baldwin v. Bright Mortgage Co., 757 P.2d 1072, 1074 (Colo. 1988), this court adopted a bright-line rule that a judgment on the merits is final and therefore appealable regardless of any unresolved issue of attorney fees. Five years later, however, in Ferrell v. Glenwood Brokers, Ltd., 848 P.2d 936, 940-42 (Colo. 1993), we suggested that the appealability of a judgment instead hinges on the fact-specific determination of whether the attorney fees at issue are best classified as costs or damages.

¶2 Today, we resolve the tension between Baldwin and Ferrell by reaffirming the bright-line rule established in Baldwin: A judgment on the merits is final for purposes of appeal notwithstanding an unresolved issue of attorney fees. To the extent our opinion in Ferrell deviated from Baldwin, its approach lacks justification and generates uncertainty, thus undermining the purpose of Baldwin's bright-line rule. We conclude that both litigants and courts are best served by the bright-line rule we adopted in Baldwin. We therefore overrule Ferrell and the cases that followed it to the extent those cases deviated from Baldwin's rule concerning the finality of a judgment for purposes of appeal. Applying the Baldwin rule here, we affirm the judgment of the court of appeals dismissing LHM's appeal in part as untimely, albeit under different reasoning.

I. Facts and Procedural History

¶3 On November 12, 2016, Martinez sought to purchase a 2016 Dodge Durango from LHM. Martinez made a cash down payment of $700 and traded in a 2012 vehicle he had purchased with financing from Ally Financial. Martinez sought to finance the rest of the purchase through a new loan with Ally, part of the proceeds of which would be used to pay off the 2012 trade-in. Martinez authorized LHM to submit loan applications on his behalf to Ally.

¶4 Ally conditionally approved Martinez's loan subject to proof of income, proof of employment, and proof of the trade-in. Based on this conditional approval, LHM employees assured Martinez that his financing had been approved. Martinez signed several agreements with LHM, including an assignment that purported to transfer LHM's interest in the Durango to Martinez and a Spot Delivery Agreement[1] that allowed Martinez to take the vehicle home. Martinez left the dealership believing he had purchased the Durango. Later that day, however, LHM received notice that Ally had declined Martinez's loan application. Neither Ally nor LHM sent this notice to Martinez.

¶5 From November 12 to 29, LHM negotiated unsuccessfully with Ally to obtain financing for Martinez. LHM did not inform Martinez of Ally's adverse financing decision.[2] Moreover, LHM sold Martinez's trade-in vehicle during this period and failed to apply the funds from that sale toward Martinez's existing loan with Ally on the trade-in.

¶6 When Martinez discovered that he was unable to make payments on Ally's website for the Durango, he returned to LHM's dealership on December 26. An LHM employee explained that staff turnover during the holidays had resulted in delays. LHM renewed Martinez's loan application with Ally, but Ally denied the application because payments on Martinez's loan for the trade-in vehicle were past due. On January 7, 2017, LHM tried again to obtain approval for the loan but was unsuccessful.

¶7 On January 9, Martinez and his wife returned to the dealership and asked LHM to cancel the sale of the Durango and return his trade-in. Although LHM had sold the trade-in, LHM's financial manager told Martinez that the dealership still had the vehicle and continued to assure Martinez that financing would be obtained. The manager asked the couple to return the following day to review and sign new documents. Before leaving the dealership, however, Martinez's wife spoke separately with another LHM employee who informed her that the trade-in vehicle had been sold.

¶8 The following day, Martinez filed suit, alleging, among other claims, that LHM violated section 6-1-708(1)(a) of the CCPA by (1) misrepresenting that Ally had approved financing for Martinez's purchase of the Durango, and (2) selling Martinez's trade-in without approved financing for the purchase of the Durango.[3]

¶9 Roughly a year later, on March 20, 2018, following a bench trial, the district court ruled in favor of Martinez on his CCPA claim. Finding that LHM acted in bad faith, the court awarded Martinez treble damages pursuant to section 6-1-113(2)(a)(III), C.R.S. (2021), of the CCPA, totaling $9, 900. The court also concluded that, as the prevailing party, Martinez was entitled to recover costs and reasonable attorney fees under section 6-1-113(2)(b). It directed Martinez to file a bill of costs and request for attorney fees within twenty-one days pursuant to C.R.C.P. 21.

¶10 Martinez timely filed a motion for attorney fees on April 10. On June 1, LHM filed an objection and asked the court to stay execution of the judgment, asserting that, because attorney fees and costs are a component of damages under the CCPA, the district court's March 20 order was not final until the court determined the amount of attorney fees and costs. The district court denied the stay, concluding that (1) prevailing party attorney fees and costs awarded under the CCPA are considered costs, rather than a component of damages; (2) its March 20 order was therefore a final, appealable order; and (3) because the March 20 order was final, the time to appeal that ruling had expired, and a stay was thus unnecessary. On December 28, the court awarded Martinez $51, 232.50 in attorney fees and $4, 484.05 in costs.

¶11 On February 15, 2019, LHM appealed the December 28 order. LHM did not challenge the reasonableness of the fees awarded, but instead argued that the district court erred in determining that LHM violated the CCPA. Martinez moved to dismiss in part for lack of jurisdiction, arguing that LHM did not file a timely notice of appeal from the merits judgment issued on March 20. A division of the court of appeals deferred ruling on the motion to dismiss and ordered the parties to brief the issue of whether the attorney fees and costs awarded were a component of damages on the CCPA claim or, instead, simply costs awarded to Martinez as the prevailing party.

¶12 After briefing, the division agreed with Martinez and dismissed LHM's appeal in part as untimely. Martinez v. LHM Corp., 2020 COA 53M, ¶¶ 22-23, 490 P.3d 708, 713. The division first observed that, under this court's decision in Baldwin, "[a] decision on the merits is a final judgment for appeal purposes despite any outstanding issue of attorney fees." Martinez, ¶ 12, 490 P.3d at 711 (quoting Baldwin, 757 P.2d at 1074). However, the division noted, this court's decision in Ferrell indicates that, "when attorney fees are 'damages' awarded 'as part of the substance of a lawsuit'-as opposed to 'costs' awarded to a prevailing party under a fee shifting provision-a trial court's order is not final until the court has determined the amount of the attorney fees award." Id. at ¶ 13, 490 P.3d at 711 (quoting Ferrell, 848 P.2d at 941-42). The division then reasoned that "[b]ecause the CCPA essentially shifts fees and costs to the violator, attorney fees under the CCPA are more akin to costs than to damages." Id. at ¶ 22, 490 P.3d at 713. Therefore, it concluded, the district court's March 20 order "was final and triggered LHM's time to appeal even though the district court had not yet resolved the amount of the attorney fee award under section 6-1-113(2)(b)." Id. at ¶ 18, 490 P.3d at 712. Finally, the division acknowledged that LHM's appeal was timely as to the district court's December 28 award of attorney fees. Id. at ¶ 23, 490 P.3d at 713. However, because LHM did not challenge the reasonableness of that award, the division affirmed the district court's order awarding $51, 232.50 in attorney fees. Id.

¶13 We granted LHM's petition for writ of certiorari.[4]

II. Analysis

¶14 This case highlights two basic principles governing the appealability of a judgment. First, an appellate court has jurisdiction to review only final judgments of a district court. § 13-4-102(1), C.R.S. (2021); C.A.R. 1(a)(1). "[A]s a general rule, a judgment is final and therefore appealable if it disposes of the entire litigation on its merits, leaving nothing for the court to do but execute the judgment." Baldwin 757 P.2d at 1073 (citing Kempter v. Hurd, 713 P.2d 1274, 1277 (Colo. 1986)). Second, an order or judgment establishing liability without determining damages is not...

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1 books & journal articles
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    • United States
    • Colorado Bar Journal No. 51-2, February 2022
    • February 1, 2022
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