Free Reply to Response to Motion - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE STATE OF COLORADO Civil Action No. 04-cv-01876-RPM-CBS KIRK WARREN, Plaintiff, v. AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA, a Florida insurance company, Defendant. ______________________________________________________________________________ REPLY OF AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA IN FURTHER SUPPORT OF ITS MOTION FOR FEES AND COSTS ______________________________________________________________________________ Defendant, AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA ("American Bankers"), by its attorneys, SENTER GOLDFARB & RICE, LLC and WELLS MARBLE & HURST, PLLC, submits its reply in further support of its motion for fees and costs as follows: On June 23, 2006, the Court issued an Order dismissing Plaintiff's entire Amended Complaint for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1). [#122]. Based on the dismissal under Rule 12(b), American Bankers Insurance Company of Florida ("American Bankers") filed its motion for fees and costs on July 7, 2006. Plaintiff's deadline to file a response to American Bankers' motion for fees and costs was July 31, 2006; however, Plaintiff filed his response on August 21, 2006. [#139]. 1

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A.

Defendant is Entitled to its Attorneys' Fees. In his response, Plaintiff contends that American Bankers is not entitled to attorneys' fees;

however, each of the Plaintiff's assertions are without merit. Plaintiff argues that American Bankers' reliance on Barnett v. Denver Publishing Co., 36 P.3d 145, 148 (Colo. App. 2001) for a mandatory award of attorneys' fees is misplaced, since Barnett involves the dismissal of an action for failure to state a claim upon which relief can granted as opposed to Rule 12(b)(1) for lack of subject matter jurisdiction. To the contrary, Barnett does not limit the mandatory award of attorneys' fees to the dismissal of actions for failure to state a claim upon which relief can be granted. Pursuant to § 13-17-201, "an award of attorney fees is mandatory when a trial court dismisses an action under C.R.C.P. 12(b)." Barnett v. Denver Publishing Co., 36 P.3d 145, 148 (Colo. App. 2001). Clearly, § 13-17-201 does not restrict such an award to the dismissal of actions under a specific subsection of Rule 12(b). In fact, "by its plain language, § 13-17-201 applies to a motion to dismiss under [Rule] 12(b)(1) for lack of subject matter jurisdiction." Smith v. Town of Snowmass Village, 919 P.2d 868, 872 (Colo. App. 1996); see also Wark v. Board of County Comm'rs of County of Dolores, 47 P.3d 711, 717 (Colo. App. 2002)(awarding attorney fees involving dismissal of contract and tort claims for lack of subject mater jurisdiction); Jaffe v. City & County of Denver, 15 P.3d 806, 814 (Colo. App. 2000). Smith, Wark, and Jaffe unequivocally hold that an award of attorneys' fees under § 13-17-201 is mandatory when an action is dismissed for lack of subject matter jurisdiction under Rule 12(b)(1). Plaintiff also asserts that American Bankers' motion for attorneys' fees is premature and that American Bankers' failed to raise the issue of subject matter jurisdiction in its Answer or Amended

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Answer. First, Defendant's motion for fees and costs is not premature because the court dismissed the Plaintiff's entire Complaint and the case was closed on the Court's docket. Second, "subject matter jurisdiction can never be waived and may be raised at any time." Franklin Sav. Corp. v. United States, 180 F.3d 1124, 1129 (10th Cir. 1999); see also Arbaugh v. Y & H Corp., 126 S. Ct. 1235, 1240 (2006)(subject matter jurisdiction may be raised at any stage in litigation); Robinson v. Brown & Williamson Tobacco Corp., 909 F. Supp. 824, 826 (D. Colo. 1995)(subject matter jurisdiction may be raised at any time). As noted above, this Court issued an Order dismissing the entire civil action on June 23, 2006 ­ just over a month after the Colorado Court of Appeals issued its decision in DiCocco v. National Gen. Ins. Co., P.3d (Colo. App. 2006). In DiCocco, the Court of Appeals

analyzed primacy and subject matter jurisdiction issues for the first in the context of the rash of APIP cases that have besieged Colorado's state and federal courts in the past few years. The timing of American Bankers' motion for attorneys' fees is reasonable in light of the Colorado Court of Appeals' announcement of DiCocco in May 2006. Plaintiff further argues that his claims are not based entirely in tort and that §13-17-201 does not apply to claims based in contract, statute, or equity; however, Plaintiff's contentions are misplaced. Plaintiff's entire Amended Complaint was dismissed, including his tort claims and claims based in contract, statute, or equity. In Wark, the trial court dismissed both contract and tort claims for lack of subject matter jurisdiction and awarded attorney fees pursuant to § 13-17-201. Wark, 47 P.3d at 713, 717. The Wark court affirmed the judgment and remanded the case for "an award of reasonable attorney fees incurred by the [defendant] in connection with the dismissal of

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plaintiff's state law claims." Id. at 717. Thus, § 13-17-201 applies to present situation, since the Court dismissed not only the tort claim but the entire action. Plaintiff asserts that only one tort claim for bad faith was dismissed under Rule 12(b) as opposed to the entire action and cites First Interstate Bank v. Berenbaum, 872 P.2d 1297, 1302 (Colo. App. 1993) in an attempt to make a distinction between the dismissal of an action and a single claim. However, the Berenbaum opinion is distinguishable on the grounds that "the party seeking attorney fees still had a claim pending against it." See Smith, 919 P.2d at 873 (reliance upon Berenbaum inapposite "since party seeking attorney fees still had a claim pending against it."). Since no claims are pending against American Bankers due to the Court's dismissal of the entire action, attorneys' fees should be awarded under § 13-17-201. Moreover, application of the attorney fees provision of the Colorado Consumer Protection Act ("CCPA") as to Plaintiff's claims arising under the Act is unnecessary and irrelevant. Since the Court dismissed Plaintiff's entire action, § 13-17-201 is the controlling statute and governs the award of attorneys' fees in the present situation. Plaintiff argues that he made a good faith argument that American Bankers violated the CCPA; however, § 13-17-201 contains no provision regarding a party's good faith argument to establish new law. See Hewitt v. Rice, 119 P.3d 541, 546 (Colo. App. 2004)("§ 13-17-201 applies and controls over § 13-17-102(7) . . . even though the plaintiff brought the action in a good faith attempt to establish new law."); Smith, 919 P.2d at 873 (stating that although plaintiff brought action in good faith, court bound by mandatory language of § 13-17-201). Furthermore, to the extent § 6-1-113 conflicts with § 13-17-201 as to the proper standard for determining an award of attorneys' fees', § 13-17-201 controls due to the fact that it was enacted

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after § 6-1-113 . See L.D.G. v. E.R., 723 P.2d 746, 748 (Colo. App. 1986)("If there is a conflict between statutes enacted at different times, the last in time controls to the extent of the inconsistency."). Although Plaintiff argues that American Bankers' attorneys' fees are not reasonable, American Bankers' exhibits attached to its motion for fees and costs clearly provide detailed descriptions of the services rendered throughout the course of litigation which demonstrate its entitlement to such an award. In determining the reasonableness of attorneys' fees, "a court must begin by calculating the so-called `lodestar amount' of a fee, and a claimant is entitled to the presumption that this lodestar amount reflects a `reasonable' fee." Robinson v. City of Edmond, 160 F.3d 1275, 1281 (10th Cir. 1998). The lodestar calculation may be determined by multiplying the number of attorney hours "reasonably expended" by a "reasonable hourly rate." Id. In addition, affidavits have been provided as to the reasonableness of the sum of attorneys' fees and each attorney's hourly rate. The services rendered were reasonable and necessary in defending against Plaintiff's claim for $30 million, and American Bankers has proven so by a preponderance of evidence. See C.R.S. § 13-25-127. It must be pointed out that Plaintiff could have avoided paying the fees and costs mandated by statute by simply dismissing this action voluntarily when Defendant filed its motion to dismiss. "By implication, § 13-17-201 allows a plaintiff to escape liability for attorney fees by filing a confession to a motion to dismiss under Rule 12(b) in such a manner that defendant is not required to expend additional efforts beyond the filing of its motion." See Brammer-Hoelter v. Twin Peaks Charter Academy, 81 F. Supp. 2d 1090, 1102 (D. Colo. 2000); see also Smith, 919 P.2d at 873 (stating that plaintiff may avoid liability by seeking voluntary dismissal, by filing stipulation of

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dismissal, or by confessing Rule 12(b)(1) motion to dismiss). Plaintiff should have recognized the merit to American Bankers' motion to dismiss and taken the appropriate action to avoid liability, especially due to the fact that Plaintiff's counsel was counsel in the DiCocco case, which served as the Court's basis for dismissing the Plaintiff's action. B. Defendant is Entitled to its Costs. Plaintiff incorrectly asserts in his Response Brief that costs under C.R.S. § 13-16-107 are awardable only for tort actions that dismissed on the merits. This argument is simply wrong. C.R.S. § 13-21-107 actually states that "in any action" costs shall be awarded to the defendant if an action is dismissed upon a motion to dismiss. The statute says nothing about tort actions or adjudication on the merits. C.R.S. § 13-16-122 provides an illustrative list of costs that may be awarded. The list is not exhaustive. Cherry Creek School District v. Voelker, 859 P.2d 805, 813 (Colo. 1993). In general, absent a specific prohibition, the trial court has discretion over the awarding of costs. Id. Plaintiff failed to carefully review Defendant's Bill of Costs before arguing that many of the costs Defendant are not allowed by statute. Defendant is not seeking reimbursement for long distance charges, postage, of fees for electronic filing and research. Defendant's Bill of Costs clearly sets forth the costs Defendant is seeking, as well as a citation to authority for the awarding of those costs. Plaintiff's lengthy discussion regarding computerized research, long distance charges, and postage is, therefore, unpersuasive.

WHEREFORE, for the reasons set forth herein, American Bankers Insurance Company of

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Florida respectfully moves this Court to grant its motion for fees and costs. Respectfully submitted,

By s/ Billy-George Hertzke Arthur J. Kutzer Billy-George Hertzke SENTER GOLDFARB & RICE, LLC 1700 Broadway, Suite 1700 Denver, Colorado 80290 Telephone: 303-320-0509 Facsimile: 303-320-0210 E-mail: [email protected] Walter D. Willson WELLS MARBLE & HURST, PLLC Post Office Box 131 Jackson, Mississippi 39205-0131 Telephone: 601-355-8321 Facsimile: 601-355-4217 E-mail: [email protected] Attorneys for Defendant American Bankers Insurance Co. of Florida CERTIFICATE OF SERVICE I certify that on this 8th day of September 2006, a true and correct copy of the above and foregoing REPLY OF AMERICAN BANKERS INSURANCE COMPANY OF FLORIDA IN FURTHER SUPPORT OF ITS MOTION FOR FEES AND COSTS was filed with the Clerk of the Court using the ECF system which sent notification of such filing to the following: Julie Bettencourt Cliff - [email protected] Attorney for Plaintiff

s/ Billy-George Hertzke

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