COLORADO COURT OF APPEALS 2016COA155
Court of Appeals No. 15CA1435
City and County of Denver District Court No. 14CV34053
Honorable Morris B. Hoffman, Judge
Layton Construction Co., Inc., a Utah corporation,
Plaintiff-Appellant,
v.
Shaw Contract Flooring Services, Inc., d/b/a Spectra Contract Flooring, a
Georgia corporation,
Defendant-Appellee.
JUDGMENT AFFIRMED AND CASE
REMANDED WITH DIRECTIONS
Division IV
Opinion by JUDGE J. JONES
Graham and Miller, JJ., concur
Announced October 20, 2016
The Holt Group LLC, L. Tyrone Holt, Kevin P. Walsh, Kevin D. Poyner, Denver,
Colorado, for Plaintiff-Appellant
Hall & Evans, LLC, Darin J. Lang, Brian Molzahn, Elizabeth K. Olson, Denver,
Colorado, for Defendant-Appellee
¶1 Plaintiff, Layton Construction Co., Inc. (Layton), appeals the
district court’s summary judgment for defendant, Shaw Contract
Flooring Services, Inc. (Shaw), based on the doctrine of claim
preclusion. Because we conclude that all of Layton’s contentions
challenging the district court’s application of that doctrine are
without merit, we affirm.
I. Background
¶2 Layton was the general contractor responsible for construction
of a hotel in Vail, Colorado. It hired Shaw, and many other
subcontractors, to perform work on the project.
¶3 In June 2009, the property owner (referred to by the parties as
BCRE) terminated its contract with Layton and, not too long
thereafter, gave Layton notice of numerous construction defects in
the project, a few of which related to Shaw’s work. Layton sued
BCRE alleging that BCRE had failed to pay for work, seeking over
$27 million in damages. After BCRE asserted counterclaims
against Layton for defective workmanship (seeking more than $25
million in damages), Layton added claims against various
subcontractors, including Shaw.
1
¶4 Pursuant to an indemnification clause in the subcontract,
Layton’s sixth claim for relief sought indemnification from Shaw for
“all damages and costs” arising from any liability it might have to
BCRE.1 In response to Shaw’s interrogatory (Interrogatory 8) asking
Layton to “identify all material facts upon which [Layton] based [the
indemnification] claim,” Layton stated, under oath, that those facts
included “Shaw’s failure to provide a defense or pay Layton’s costs
to defend against [BCRE’s] claims that relate to or arise out of
Shaw’s allegedly deficient or defective work.” In responding to
another interrogatory (Interrogatory 4) asking Layton to describe
every breach of the indemnification clause, Layton specifically noted
“Shaw’s failure to provide a defense or pay Layton’s costs.” Layton’s
response to Interrogatory 8 expressly incorporated its response to
Interrogatory 4.2
1 The indemnification clause provided for indemnification from “all
damages, costs and expenses incurred in connection” with “all
claims, demands, suits, proceedings, attachments, levies, penalties,
damages and losses, liabilities, liens, claims for indemnification or
contribution, and any other matter whatsoever” “arising out of or
resulting from,” among other things, Shaw’s work on the project.
2 In its answer brief on appeal, Shaw pointed out that Layton had
said in response to Interrogatory 8 that its indemnification claim
included attorney fees and costs incurred in defending against
2
¶5 Layton also asserted a claim for contribution against Shaw
(the seventh claim for relief), alleging that if Layton was found to be
liable to BCRE for “the tortuous [sic] acts of” Shaw, Shaw should be
required to contribute payment for such liability. At Layton’s
request, the district court dismissed that claim without prejudice in
March 2011.
¶6 Later, after BCRE specifically identified Shaw’s allegedly
defective work (totaling about $9,000 in value), Layton moved to
voluntarily dismiss its indemnification claim against Shaw “with
prejudice.” Layton’s motion said that the dismissal would include
“those claims that have been or could have been asserted in this
lawsuit.” (Emphasis added.) The motion purported not to seek
dismissal of “any new or future claims,” which it defined as those
BCRE’s claims. In its reply brief, however, Layton ignored its
response to Interrogatory 8 and instead argued that its response to
Interrogatory 4 was irrelevant, for a number of unconvincing
reasons. At oral argument, Layton’s counsel argued that Layton’s
response to Interrogatory 8 was irrelevant because Layton objected
to that interrogatory, but he did not explain why the interrogatory
was objectionable or why any objection would render the answer
irrelevant to this issue. (The record shows that Layton’s only
specific objection to the interrogatory was an attorney work-product
objection.) We perceive no relevant, nonfrivolous objection to that
standard interrogatory and, in any event, Layton went on to answer
the interrogatory despite the objections. Its sworn answer to the
interrogatory is enlightening, and we therefore consider it.
3
“that may arise or be asserted in the future in any other lawsuits or
circumstances, which may be subject to the indemnification
provision.” The proposed order Layton submitted with its motion
repeated these parameters and said that each party would bear its
own attorney fees and costs. The district court did not sign
Layton’s proposed order, but instead entered a written order on
June 6, 2011, saying only, as now relevant, that Layton’s claims
were dismissed with prejudice.
¶7 The case between Layton and BCRE (in which several
subcontractors remained parties) continued. In July 2014,
following a bench trial, the court awarded Layton just over $5
million on its claims against BCRE, which was far less than Layton
had sought. The court also ruled that Layton was not liable to
BCRE for defective work because BCRE had materially breached the
contract by failing to give Layton contractually required notices of
defective work and an opportunity to correct the work. With respect
to the subcontractors remaining in the case, the court found that
they were liable to Layton under the indemnification provisions in
their subcontracts (which were identical to the provision in Shaw’s
subcontract) for the expenses (including attorney fees and costs)
4
that Layton had incurred in defending against BCRE’s claims, to
the extent those expenses were attributable to work performed by
each subcontractor.
¶8 Shortly thereafter, Layton filed this case against Shaw and
several other subcontractors. It asserted claims against Shaw for
contractual and common law indemnity and declaratory judgment
seeking an award of “attorney fees, costs and expenses” it had
incurred in defending against BCRE’s claims in the prior case.3
Layton asserted that it could seek indemnification from Shaw
pursuant to a provision in the Construction Defect Action Reform
Act (CDARA), section 13-80-104, C.R.S. 2016, which allows claims
for indemnification against subcontractors to be filed within ninety
days of a final judgment against a contractor. § 13-80-104(1)(b)(II),
(1)(c) (indemnification claim “[s]hall be brought within ninety days
3 Layton claims to have incurred over $16 million in attorney fees
and costs in defending against BCRE’s claims. Layton’s complaint
also alleged losses resulting from Layton’s payments for work that
the subcontractors had not performed. But it is not clear if Layton
alleged that Shaw was one of those subcontractors, and in any
event Layton does not assert on appeal any argument relating to
those alleged losses.
5
after [settlement of or final judgment against the contractor in]” the
construction defect claim).4
¶9 Shaw moved for summary judgment. It argued that Layton’s
indemnification claims are barred by the doctrine of claim
preclusion because the court in the prior case had dismissed those
claims with prejudice. The district court agreed, rejecting Layton’s
contrary arguments in a thorough written order.
II. Standard of Review
¶ 10 Summary judgment is appropriate when “the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled to
a judgment as a matter of law.” C.R.C.P. 56(c). We review de novo
an order granting summary judgment based on claim preclusion.
Loveland Essential Grp., LLC v. Grommon Farms, Inc., 2012 COA 22,
¶ 13.
4Interestingly, there was no settlement of the prior case as between
Layton and BCRE, nor was there any judgment “against” Layton on
BCRE’s claims in the prior case, calling into question the
applicability of section 13-80-104(1)(b)(II), C.R.S. 2016, under its
own terms. But Shaw has not raised that issue, so we will not
address it.
6
¶ 11 To the extent Layton’s contentions require us to construe
CDARA, that presents a question of law that we also review de novo.
Sperry v. Field, 205 P.3d 365, 367 (Colo. 2009). In interpreting a
statute we strive to discern and give effect to the General
Assembly’s intent. Hassler v. Account Brokers of Larimer Cty., Inc.,
2012 CO 24, ¶ 15. To do this, we look first to the statutory
language itself; we give the words and phrases used therein their
plain and ordinary meanings, and we read the language in the dual
contexts of the entire statute and the comprehensive statutory
scheme. Id.; Jefferson Cty. Bd. of Equalization v. Gerganoff, 241
P.3d 932, 935 (Colo. 2010); BP Am. Prod. Co. v. Patterson, 185 P.3d
811, 813 (Colo. 2008). After doing this, if we conclude that the
statutory language is unambiguous we apply it as written and we
do not resort to other rules of statutory construction. Reno v.
Marks, 2015 CO 33, ¶ 20; Klinger v. Adams Cty. Sch. Dist. No. 50,
130 P.3d 1027, 1031 (Colo. 2006).
III. General Law of Claim Preclusion
¶ 12 “Claim preclusion works to preclude the relitigation of matters
that have already been decided as well as matters that could have
been raised in a prior proceeding but were not.” Argus Real Estate,
7
Inc. v. E-470 Pub. Highway Auth., 109 P.3d 604, 608 (Colo. 2005);
accord Lobato v. Taylor, 70 P.3d 1152, 1165 (Colo. 2003). It serves
two primary purposes: protecting litigants from the burden of
relitigating issues against the same party (or its privy) and
promoting judicial economy by preventing needless litigation.
Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 (1979); Lobato, 70
P.3d at 1165-55.
¶ 13 “For a claim in a second judicial proceeding to be precluded by
a previous judgment, there must exist: (1) finality of the first
judgment, (2) identity of subject matter, (3) identity of claims for
relief, and (4) identity or privity between parties to the actions.”
Argus Real Estate, 109 P.3d at 608; accord Loveland Essential Grp.,
¶ 14.
IV. Analysis
¶ 14 Layton makes three fundamental contentions: (1) its claims
against Shaw in this case are not identical to those it asserted
against Shaw in the prior case; (2) CDARA modifies the doctrine of
claim preclusion in the construction defect context by requiring (or
at least allowing) splitting of indemnification claims; and (3) various
8
exceptions to the claim preclusion doctrine apply to this action. We
address and reject each of these contentions in turn.
A. Identity of Claims
¶ 15 Layton argues that its claims in this case are not identical to
those it asserted in the prior case both because it did not seek
indemnity for attorney fees and costs in the prior case and because
its claims in this case do not arise out of the same transaction as
its claims in the prior case.5 Both of these arguments are based on
distortions of, or are flat out contrary to, applicable, well-settled
legal principles.
¶ 16 We need not decide whether Layton sought indemnification for
fees and costs in the prior case because it obviously could have
done so, a fact it admitted in opposing Shaw’s summary judgment
motion.6 Layton does not contest that any claim for indemnification
5Layton concedes that the other three requirements of claim
preclusion are met.
6 Shaw, however, has much the better of the argument on whether
Layton sought indemnification of fees and costs in the defect case.
Layton’s sworn discovery responses in the prior case said that the
attorney fees and costs it had incurred and were incurring in
defending against BCRE’s claims were included in its
indemnification claim. And the language of Layton’s complaint in
9
based on Shaw’s duty to defend accrued, at the latest, in 2009
when it first began incurring attorney fees and costs in connection
with BCRE’s claims, which Shaw would not pay. See Jones v. Sun
Carriers, Inc., 856 F.2d 1091, 1094 (8th Cir. 1988) (indemnity claim
for costs and expenses accrues when indemnitee has made a
payment or otherwise expended sums, while indemnity claim for
liabilities arises when a liability is legally imposed; applying
Arkansas law); Farmers Ins. Exch. v. Am. Mfrs. Mut. Ins. Co., 897
P.2d 880, 882 (Colo. App. 1995) (duty to defend arises when claims
are asserted against party to whom the duty is owed); see also
Sterenbuch v. Goss, 266 P.3d 428, 433 (Colo. App. 2011) (once some
injury has occurred, a claim has accrued even if further injury
continues to occur).7 That Layton may not have known the full
extent of Shaw’s liability while Shaw was a party in the prior case
does not matter; as Layton conceded in opposing Shaw’s summary
that case was certainly broad enough to include a claim for such
fees and costs.
7 Layton’s complaint in this case expressly alleges that in 2009 it
incurred such fees and costs before it added Shaw to the prior case.
In responding to Shaw’s motion for summary judgment, Layton
submitted an affidavit repeating this allegation. Its opening brief in
this appeal does so as well.
10
judgment motion, it could have presented evidence of and obtained
a judgment for all attorney fees and costs incurred or likely to be
incurred in the prior case. (Indeed, after the district court entered
its judgment of liability against the subcontractors in the prior case,
Layton sought to have the court determine how much the
subcontractors owed Layton for attorney fees and costs it had
expended relating to BCRE’s claims.)
¶ 17 Layton’s argument that the claims are not identical because
they do not arise from the same transaction or series of
transactions is meritless. Colorado law treats “a single claim
broadly for purposes of merger and bar, to include more than
merely the same cause of action or theory of recovery.” In re
Greene, 2013 CO 29, ¶ 11. A single claim “embrace[s] all remedial
rights of a plaintiff against a defendant growing out of the relevant
transaction or series of connected transactions.” Id. (emphasis
added); see also Argus Real Estate, 109 P.3d at 609 (“[C]laim
preclusion also bars a litigant from splitting claims into separate
actions because once judgment is entered in an action it
‘extinguishes the plaintiff’s claim . . . includ[ing] all rights of the
plaintiff to remedies against the defendant with respect to all or any
11
part of the transaction, or series of connected transactions, out of
which the action arose.’’’ (quoting Restatement (Second) of
Judgments § 24 (Am. Law Inst. 1982))). “Generally, a contract is
considered to denote a single transaction for the purpose of claim
preclusion, and therefore claims for different breaches of a contract
ordinarily must be brought in the same action.” Loveland Essential
Grp., ¶ 16; see also Sun Indem. Co. of N.Y. v. Landis, 119 Colo. 191,
195, 201 P.2d 602, 604 (1948) (stating, perhaps in dictum but
perhaps as an alternative holding, that “the right of recovery of the
indemnitee against the indemnitor is a single right of action which
cannot be split”); Goodstein v. Silver Plume Mines Co., 79 Colo. 269,
276, 245 P. 714, 716 (1926) (“A party is not ordinarily entitled to
split his cause of action by suing to recover a portion of his claim
arising out of an entire indivisible contract, and thereafter to
institute another action for the balance of the claim.”).8
8 A claim for attorney fees and costs pursuant to a contractual
indemnification provision seeks such an award as damages, not
costs, and therefore must be submitted to the fact finder; contrary
to Layton’s suggestion, it may not be submitted in a motion under
C.R.C.P. 121, section 1-22. See Ferrell v. Glenwood Brokers, Ltd.,
848 P.2d 936, 941 (Colo. 1993) (if attorney fees are damages, they
“must be determined by the trier of fact and proven during the
damages phase”); Sun Indem. Co. of N.Y. v. Landis, 119 Colo. 191,
12
¶ 18 Layton’s claims in both cases arose out of a single contract.
Indeed, they arose out of the same provision of the same contract.
And they all related to BCRE’s claims against Layton for
construction defects at the same project. Given all that, Layton’s
assertions that the claims in both cases did not form a convenient
trial unit and that the parties would not reasonably have expected
to litigate the current claims in the prior case are untenable. See
Williams v. Ins. Co. of N. Am., 692 So. 2d 654, 657-58 (La. Ct. App.
1997).9
195, 201 P.2d 602, 604 (1948) (when a party seeks indemnification
for litigation expenses, those expenses are damages); Lawry v. Palm,
192 P.3d 550, 568 (Colo. App. 2008) (attorney fees sought as a
legitimate consequence of the contract sued upon are damages); see
also C.R.C.P. 121, § 1-22(2) (rule does not apply to attorney fees
awardable as damages). In the prior case, Layton expressly and
repeatedly characterized the fees and costs at issue as damages.
The district court in the prior case did so as well.
9 Layton’s assertions ring especially hollow in light of the fact that it
pursued claims for indemnification of attorney fees and costs
against several subcontractors in the prior case and obtained
judgment for such indemnification. And after the judgment in that
case, Layton asked the district court to hold a hearing on how
much Shaw should be required to pay Layton to indemnify it for
attorney fees and costs incurred in that case. Though Layton
submitted an affidavit from Michael Colligan, its Manager of
Contract Risk, saying that Layton had not intended to dismiss any
indemnification claim for attorney fees, costs, and expenses against
Shaw in the prior case, we are not persuaded that Mr. Colligan’s
13
¶ 19 In sum, because Layton could have asserted an indemnity
claim against Shaw for attorney fees and costs in the prior case,
there is identity of claims. Argus Real Estate, 109 P.3d at 608-09;
Loveland Essential Grp., ¶ 15; cf. Thresherman’s Mut. Ins. Co. v.
Wallingford Mut. Ins. Co., 26 F.3d 776, 781-83 (7th Cir. 1994)
(indemnification claim that could have been brought in prior action
in which indemnitee dismissed claims against indemnitor with
prejudice barred by claim preclusion; indemnification claims,
including the one for fees and costs, arose out of the same
transaction and could not be split).
B. CDARA
¶ 20 Layton argues that the ninety-day provision of CDARA, section
13-80-104(1)(b)(II), modifies the common law doctrine of claim
affidavit creates a genuine issue of material fact regarding Layton’s
reasonable expectations given the law on this issue and Layton’s
own conduct in the prior case (which includes, in addition to its
pursuit of fees and costs against other subcontractors, its sworn
interrogatory responses (which Mr. Colligan executed) and
statements in the motion to dismiss). See Anderson v. Lindenbaum,
160 P.3d 237, 241 (Colo. 2007) (affidavit that conflicts with prior
sworn testimony may be disregarded if it presents no credible
explanation for the contradiction); see also Williams v. Ins. Co. of N.
Am., 692 So. 2d 654, 658 (La. Ct. App. 1997) (“Nor do we think that
reasonable parties would expect that the attorney’s fees for an
action would be an entirely separate matter from the action itself.”).
14
preclusion as to indemnification for attorney fees and costs by
requiring a contractor to wait until after it has been found liable to
sue subcontractors for such indemnification. Put another way,
Layton argues that the General Assembly intended “to eliminate the
practice of adding every party and every claim in one proceeding
and intended that only subcontractors responsible for the alleged
damages be permitted to participate in the defect action.”10 We
perceive no such intent.
In CLPF-Parkridge One, L.P. v. Harwell Investments, Inc., 105
P.3d 658 (Colo. 2005), the supreme court held that the ninety-day
provision “is a statute of limitations tolling provision[,] not . . . a
ripeness provision that prevents a defendant in a construction
defect lawsuit from . . . bring[ing] an indemnity or contribution
claim against or add[ing] a party allegedly responsible for the
construction defect.” Id. at 659. Thus, it “does not bar . . . third-
party claims for indemnity or contribution in construction defect
lawsuits; rather, [it] also allows indemnity or contribution claims to
10Layton’s argument is at odds with the fact that it sued several
subcontractors for indemnification for attorney fees and costs in the
prior case and obtained judgment against them for such fees and
costs.
15
be brought by a separate lawsuit.” Id.; accord Richmond Am. Homes
of Colo., Inc. v. Steel Floors, LLC, 187 P.3d 1199, 1205 (Colo. App.
2008); Fire Ins. Exch. v. Monty’s Heating & Air Conditioning, 179
P.3d 43, 46 (Colo. App. 2007). Though Layton argues that CLPF-
Parkridge does not apply because it did not concern an
indemnification claim for attorney fees and costs, that is a
distinction without a meaningful difference. The supreme court’s
interpretation of the meaning of CDARA — that it allows but does
not require an indemnitee to sue for indemnification in a defect case
— applies equally to such claims.11 Indeed, because an
indemnification clause imposing a duty to defend (and liability for
costs of defense) creates liability for the indemnitor regardless of
whether an indemnitee is found liable to a third party, there would
be no reason for the General Assembly to require an indemnitee to
11 Layton argues in the alternative that CLPF-Parkridge should be
modified or overturned. But of course we do not have authority to
do either. People v. Novotny, 2014 CO 18, ¶ 26 (only the supreme
court can overrule its precedent on matters of state law); In re
Estate of Ramstetter, 2016 COA 81, ¶ 40 (the court of appeals must
follow precedent of the Colorado Supreme Court).
16
wait until its liability to a third party is determined before seeking
indemnification for fees and costs.12
¶ 21 Contrary to Layton’s assertion, we see nothing “absurd” about
construing CDARA so as not to require a separate lawsuit against a
subcontractor for indemnification for attorney fees and costs — that
is, to allow such claims to be asserted in the defect case. Nor does
such an interpretation render the ninety-day provision of section
13-80-104(1)(b)(II) meaningless. In cases in which indemnitors
have not been made parties to the construction defect case, the
provision applies.
¶ 22 The following question, however, remains: does CDARA alter
the application of the doctrine of claim preclusion where a
contractor asserts an indemnification claim against a subcontractor
in a construction defect case, as CDARA allows? That is, even
though CDARA allows a contractor to sue a subcontractor for
indemnification in the defect case, does it permit claim splitting, the
practice of asserting part of a claim in one case and part of the
12 If the result of the first case is a finding that the contractor is not
liable to the owner, there is obviously no claim for indemnification
for such liability against the subcontractor. But such a result does
not extinguish the subcontractor’s liability for costs of defense.
17
claim in a later case? Though Layton argues (apparently in the
alternative) that it does, we conclude that it does not.
¶ 23 Because the common law doctrine of claim preclusion is
“fundamental to the operation of the judicial system,” a statutory
provision will not be deemed to create exceptions to the doctrine
unless it does so “in a manner that is undoubtedly clear.” Argus
Real Estate, 109 P.3d at 611. This limitation is consistent with the
broader principle that “statutes may not be interpreted to abrogate
the common law unless such abrogation was clearly the intent of
the General Assembly.” Id. (alteration omitted) (quoting Preston v.
Dupont, 35 P.3d 433, 440 (Colo. 2001)). A statute may do so only
“expressly or by clear implication.” Id.
¶ 24 We see nothing in CDARA expressly or by clear implication
abrogating the doctrine of claim preclusion in the circumstances
before us. As CLPF-Parkridge holds, the provision of CDARA
allowing indemnification claims after an indemnitee’s liability has
been determined is only a tolling provision. Its limited purpose is
only to allow such claims. It does not purport to render
inapplicable claim preclusion where a contractor chooses instead to
sue the subcontractor in the defect case. And where an indemnitor
18
is made a party to the construction defect case, as CDARA allows,
the policy concerns which animate the doctrine of claim preclusion
— protecting litigants from the burden of multiple cases and
preventing needless litigation — retain their force. Nothing in
CDARA indicates otherwise. Cf. id. at 611-12 (holding that section
15-11-1106(2), C.R.S. 2016, which allows an action to reform an
instrument found to violate the rule against perpetuities, did not
abrogate claim preclusion for quiet title actions).
C. Exceptions to Claim Preclusion
¶ 25 Layton contends in the alternative that certain exceptions to
the doctrine of claim preclusion apply to this case. None of them
do.
¶ 26 First, Layton argues that Shaw somehow agreed to the filing of
a later indemnification case because (1) Shaw failed to object to
Layton’s motion to dismiss without prejudice its contribution claim
in the prior case and (2) Shaw did not object to the alleged
reservation of the indemnification claim in Layton’s motion to
voluntarily dismiss with prejudice the indemnification claim in the
prior case. See Restatement (Second) of Judgments § 26(1)(a)
(parties may agree to allow a plaintiff to split its claim).
19
¶ 27 But we do not see how Shaw’s failure to object to the dismissal
without prejudice of the contribution claim constituted an
agreement to allow Layton to assert an indemnification claim in a
later case. And Layton’s motion to dismiss its indemnification claim
did not purport to reserve its current indemnification claims. To
the contrary, it expressly sought dismissal with prejudice of claims
that it had asserted and those which it could have asserted. As
discussed, Layton could have asserted its current indemnification
claims in the prior case (a point Layton conceded in the district
court). Those claims did not arise after that case (the category of
claims Layton purported to reserve). They had already arisen.
Layton’s current position that its motion did not seek dismissal of
its current indemnification claims with prejudice is pure
dissembling.13
¶ 28 Second, Layton argues that the district court in the prior case
allowed it to assert its current indemnification claims in a
subsequent case. See Restatement (Second) of Judgments
13 Further, in noting that each party would bear its own attorney
fees and costs, Layton’s proposed order of dismissal expressly
contemplated that Shaw would have no liability for Layton’s
attorney fees and costs incurred in the prior case.
20
§ 26(1)(b) (“[t]he court in the first action has expressly reserved the
plaintiff’s right to maintain the second action”). But nothing in the
court’s order of dismissal remotely suggests such permission. And
to the extent Layton argues that the court implicitly accepted the
reservation of claims in the motion to dismiss, there is no evidence
that the court did so. Further, we have already concluded that
Layton’s definition of “future claims” in its motion did not include
its current indemnification claims.
¶ 29 Third, Layton again argues that CDARA allows claim splitting.
See Restatement (Second) of Judgment § 26(1)(d) (a statute may
allow a plaintiff to split its claim). As discussed above, however,
nothing in CDARA allows claim splitting in these circumstances.
¶ 30 Fourth, Layton argues that the fact it was “suffering from
recurring harm by Shaw’s unwillingness to defend” it constitutes
good reason to allow it to split its claim. See Restatement (Second)
of Judgments § 26(1)(e) (claim may be split for reasons of
substantive policy in a case involving a continuing or recurrent
wrong). Layton does not identify any substantive policy supporting
claim splitting in this context, and we perceive none. And we
observe that although Layton argues that CDARA is intended to
21
streamline litigation, it fails to explain how requiring separate
actions, or allowing a second action against a subcontractor after
the contractor has already sued the subcontractor once for the
same transaction, as it claims CDARA does, is consistent with that
goal.
¶ 31 “[J]udicially[] recognized exceptions to claim preclusion are
extremely rare.” Argus Real Estate, 109 P.3d at 611; accord Lobato,
70 P.3d at 1166. Nothing about this case calls for the application of
any such exception.
V. Attorney Fees
¶ 32 Shaw requests an award of its attorney fees incurred on
appeal, arguing that Layton’s appeal is substantially frivolous and
substantially vexatious. See § 13-17-102(2), (4), C.R.S. 2016.
¶ 33 We agree with Shaw that Layton’s appeal is substantially
frivolous. The district court’s judgment was so plainly correct and
the legal authority is so clearly contrary to Layton’s positions that
there is really no appealable issue. Thus, Layton’s appeal is
frivolous as filed. See Castillo v. Koppes-Conway, 148 P.3d 289,
292 (Colo. App. 2006).
22
¶ 34 Though Layton asserts that its appeal is not frivolous because
it has raised “novel” issues of first impression, the novelty of those
issues is nothing more than a reflection of their futility. See Ozee v.
Am. Council on Gift Annuities, Inc., 143 F.3d 937, 941 (5th Cir.
1998) (“The specter of sanctions deters not only the raising of
claims that have been considered and rejected repeatedly, but also
the pursuit of untested claims that are worthless on their face.”);
Hilmon Co. (V.I.) Inc. v. Hyatt Int’l, 899 F.2d 250, 253 (3d Cir. 1990)
(sanctions for appeals appropriate because, although novel theories
were asserted, “at the outset the result of each appeal was obvious:
they were utterly without merit and could only result in delay”);
Wagner v. Wagner, 371 P.3d 807, 815 (Idaho 2016) (finding appeal
frivolous despite party’s assertions of issues of first impression); see
also Nienke v. Naiman Grp., Ltd., 857 P.2d 446, 449 (Colo. App.
1992) (issue of first impression may be frivolous if the party fails to
present a rational argument in support of it); Sullivan v. Lutz, 827
P.2d 626, 628 (Colo. App. 1992) (“[I]f a party fails to present
plausible arguments in support of a novel claim, sanctions may be
imposed under [section 13-17-102], irrespective of the subjective
state of mind of the party or the attorney at the time the claim was
23
asserted.”). The outcome of this appeal was preordained by case
law, including, but by no means limited to, Argus Real Estate,
Loveland Essential Group, and CLPF-Parkridge, which, though not
in all applications directly on point, were sufficiently so that Layton
had no chance of prevailing.14
¶ 35 Shaw is entitled to an award of reasonable appellate attorney
fees against Layton and its counsel, jointly and severally. See § 13-
17-102(3). We exercise our discretion under C.A.R. 39.1 to remand
the case to the district court for a determination of the amount of
those fees.
VI. Conclusion
¶ 36 The judgment is affirmed. We remand the case to the district
court to determine the reasonable amount of Shaw’s attorney fees
incurred on appeal. See C.A.R. 39.1.
JUDGE GRAHAM and JUDGE MILLER concur.
14Layton’s appeal is also frivolous as argued, at least in part. For
example, Layton misrepresents its positions in the prior case and
some of the district court’s actions in that case.
24