Us Fax Law Center, Inc. v. Henry Schein, No. 08CA0012.

• Citation: 205 P.3d 512
• Decision Date: 05 February 2009
• Docket Number: No. 08CA0012.
• Parties: US FAX LAW CENTER, INC., Plaintiff-Appellant, v. HENRY SCHEIN, INC., d/b/a Sullivan-Schein Dental, a Delaware corporation and Dentrix Dental Systems, Inc., a Utah corporation, Defendants-Appellees.
• Court: Court of Appeals of Colorado

205 P.3d 512

US FAX LAW CENTER, INC., Plaintiff-Appellant, v. HENRY SCHEIN, INC., d/b/a Sullivan-Schein Dental, a Delaware corporation and Dentrix Dental Systems, Inc., a Utah corporation, Defendants-Appellees.

No. 08CA0012.

Colorado Court of Appeals, Div. IV.

February 5, 2009.

Sawaya, Rose & Kaplan, P.C., Richard B. Rose, Denver, Colorado, for Plaintiff-Appellant.

Moye White LLP, Scott R. Bauer, Elizabeth H. Getches, Denver, Colorado, for Defendants-Appellees.

Opinion by Judge RICHMAN.

Plaintiff, U.S. Fax Law Center, Inc. (FLC), appeals the order of the trial court awarding attorney fees under section 13-17-201, C.R.S.2008, to defendants, Henry Schein, Inc., doing business as Sullivan-Schein Dental, and Dentrix Dental Systems, Inc. (the Schein defendants), and the order denying FLC's motion under C.R.C.P. 59(a) to set aside the attorney fees award. We affirm both orders and remand for an award of attorney fees on appeal.

I. Background

FLC initiated this case against the Schein defendants alleging claims for (1) violations of the Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227, (2) violations of the Colorado Consumer Protection Act (CCPA), § 6-1-702, C.R.S.2008, and (3) state torts sounding in negligence and negligence per se. All claims arise from the Schein defendants' transmission of unsolicited facsimile advertisements. The TCPA makes it unlawful to send unsolicited facsimile advertisements and creates a private right of action permitting the recipient of such a fax to sue for actual monetary loss or to receive statutory damages of $500 for each violation. 47 U.S.C. § 227(b)(1)(C) & (3). The CCPA makes the sending of unsolicited faxes or any faxes lacking a "header" a deceptive trade practice. § 6-1-702(1)(a) & (b), C.R.S.2008.

Although the TCPA is a federal statute, it expressly provides that if "otherwise permitted by the laws or rules of court" of the state, the private cause of action may be brought in an appropriate state court. 47 U.S.C. § 227(b)(3). A division of this court has held that Colorado state courts have jurisdiction to hear actions under the TCPA. Consumer Crusade, Inc. v. Affordable Health Care Solutions, Inc., 121 P.3d 350, 352 (Colo. App.2005).

FLC was not the direct recipient of the facsimiles at issue but rather took assignments of the claims from the original recipients. After FLC commenced this action, divisions of this court held that assignees of such claims do not have standing under the TCPA, because the claims are akin to invasion of privacy claims, or under the CCPA, because the assignees are not actual consumers. See McKenna v. Oliver, 159 P.3d 697 (Colo.App.2006); U.S. Fax Law Ctr., Inc. v. Myron Corp., 159 P.3d 745 (Colo.App.2006). Relying in part on these two decisions, the trial court granted the Schein defendants' C.R.C.P. 12(b)(5) motion to dismiss FLC's complaint.

Twenty-eight days after the dismissal order, the Schein defendants filed a motion for an award of attorney fees under section 13-17-201. The trial court granted the motion and ordered a hearing to determine a reasonable amount of fees. The court held a hearing and awarded attorney fees of $10,571. The court denied FLC's C.R.C.P. 59(a) motion, and this appeal followed.

II. Standards of Review

We review attorney fees awards and C.R.C.P. 59(a) rulings for abuse of discretion. BA Mortgage, LLC v. Quail Creek Condominium Ass'n, 192 P.3d 447, 454 (Colo.App.2008); Buckley Powder Co. v. State, 70 P.3d 547, 564 (Colo.App.2002). However, we review de novo any statutory interpretation or legal conclusion that provides a basis for such a fee award. Brown v. Davidson, 192 P.3d 415, 420 (Colo.App.2006).

III. FLC's Arguments on Appeal

FLC argues that the trial court erred in awarding attorney fees under section 13-17-201 because (1) application of that statute in this case conflicts with the TCPA, and therefore the award violates the Supremacy Clause, (2) section 13-17-201 provides for an award of attorney fees only when a "state tort claim" is dismissed for failure to state a claim and does not apply to FLC's TCPA claim, and (3) the attorney fees provision of section 6-1-113(3), C.R.S.2008, rather than section 13-17-201, governs the award of attorney fees for dismissal of FLC's CCPA claims.

In addition, FLC argues that the trial court abused its discretion by not adequately explaining why it allowed the Schein defendants to file for attorney fees twenty-eight days after the case was dismissed. FLC also argues that the trial court abused its discretion by failing to explain why it denied FLC's C.R.C.P. 59(a) motion to set aside the attorney fees award.

The Schein defendants request attorney fees incurred on this appeal.

A. Timely Motion for Attorney Fees

FLC contends that the trial court abused its discretion by accepting the Schein defendants' motion for attorney fees more than fifteen days after dismissing the case "without discussion, analysis, or citation to legal authority of any kind." We disagree.

C.R.C.P. 121 § 1-22(2)(b) provides: "Any party seeking attorney fees under this practice standard shall file and serve a motion for attorney fees within 15 days of entry of judgment or such greater time as the court may allow." (Emphasis added.) Furthermore, "a party's failure to request an extension of time does not preclude a trial court from considering a request for an award of costs and fees which has been filed beyond the 15-day deadline." In re Marriage of Wright, 841 P.2d 358, 361 (Colo.App. 1992). Thus, if the trial court accepts a filing after fifteen days without expressly granting an extension, it has impliedly exercised its discretion under the rule.

Here, the trial court rejected FLC's assertion that the request was untimely filed, stating that its decision was based on "the reasons stated" in a specified paragraph of the Schein defendants' Reply in Support of Motion for Attorneys' Fees. That paragraph, in addition to citing In re Marriage of Wright, describes the Schein defendants' post-trial efforts to negotiate a settlement on the attorney fees, FLC's request for time to consider their offer, the Schein defendants' attempts to contact FLC after that time had expired, and FLC's belated rejection of the offer. Thus, we conclude the court did not abuse its discretion by accepting the Schein defendants' filing twenty-eight days after it entered its order dismissing FLC's claims.

B. Whether Section 13-17-201 Is Preempted by TCPA

In Consumer Crusade, the division noted that the Supremacy Clause mandates that state law yield when it conflicts with federal law. 121 P.3d at 353 (citing Middleton v. Hartman, 45 P.3d 721, 731 (Colo. 2002)). Further, although the Supremacy Clause charges states with a coordinate responsibility to enforce federal law, each state does so in accordance with its regular modes of procedure, unless Congress dictates otherwise. Federal law must take state courts "as it finds them," because the states "have great latitude to establish the structure and jurisdiction of their own courts." 121 P.3d at 353 (quoting Howlett v. Rose, 496 U.S. 356, 372, 110 S.Ct. 2430, 110 L.Ed.2d 332 (1990)). Consumer Crusade also notes that the TCPA "leaves to the states the procedural and jurisdictional questions surrounding each state's enforcement of private rights of action." 121 P.3d at 355 (quoting Accounting Outsourcing, LLC v. Verizon Wireless Pers. Commc'ns, L.P., 329 F.Supp.2d 789, 802 (M.D.La.2004)).

The TCPA, on the one hand, contains no provision for the award of attorney fees. Section 13-17-201, on the other hand, requires the trial court to award reasonable attorney fees to a defendant when it dismisses a tort action under C.R.C.P. 12(b). FLC contends that because the TCPA is silent on attorney fees, Congress intended to adopt and apply the "American Rule" to TCPA claims, and therefore Colorado's statute is preempted. We are not persuaded.

Federal preemption of a state statute can occur when the federal statute expressly defines the extent to which it preempts the state law, when it occupies the field touched by the state law, or when the federal and state statutes are in direct conflict. See English v. General Electric Co., 496 U.S. 72, 78-79, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990). FLC's preemption argument is based on an asserted conflict between the TCPA and section 13-17-201.

Our courts have held that federal preemption is based on the Supremacy Clause and voids the applicability of a Colorado attorney fees statute only to the extent the statute conflicts with a provision of federal law. See State v. Golden's Concrete Co., 962 P.2d 919, 926 (Colo.1998); Kennedy v. King Soopers Inc., 148 P.3d 385, 388 (Colo.App.2006). Here, the TCPA and section 13-17-201 do not directly conflict. Unlike in Golden's Concrete, where the federal law specified criteria for an award of attorney fees that conflicted with the basis for a mandatory award under section 13-17-201, here the TCPA contains no criteria for an award of attorney fees.

FLC cites no case in which a state attorney fees statute was preempted by the TCPA, or by any federal statute that is silent as to awarding attorney fees. Instead, it would have us infer from congressional silence that the intent was to preclude the prevailing party in a TCPA case from collecting attorney fees.

We apply the interpretation principles followed by the Supreme Court: "Legislative silence is a poor beacon to follow in discerning the proper statutory route." Zuber v. Allen, 396 U.S. 168, 185, 90 S.Ct. 314, 24 L.Ed.2d 345 (1969). "An inference drawn from congressional silence certainly cannot be credited when it is contrary to all other textual and contextual evidence of congressional intent." Burns v. United States, 501 U.S. 129, 136, 111 S.Ct. 2182, 115 L.Ed.2d 123 (1991). Accordingly, we decline to infer from its silence that Congress intended to preclude the prevailing party in a TCPA case from collecting attorney fees.

Instead...