July 20, 2018

Colorado Court of Appeals: District Court had Personal Jurisdiction over Out of State Client in Legal Fee Dispute

The Colorado Court of Appeals issued its opinion in Dorsey & Whitney LLP v. RegScan, Inc. on Thursday, February 22, 2018.

Attorney Fees—Personal Jurisdiction—Long Arm Statute—Due Process—Expert Witness—Fed. R. Evid. 703—Jury Instructions—CRE 408—Settlement Negotiations—Evidence.

RegScan, Inc., a Pennsylvania-based Internet company, reached out to and retained a specific Colorado attorney in Dorsey & Whitney LLP (the law firm) to represent it in a matter ultimately filed in Virginia. After a disagreement about the amount of fees owed, the law firm sued RegScan in Denver District Court. Judgment was ultimately entered for $373,707.43 against RegScan.

On appeal, RegScan argued that the district court lacked personal jurisdiction. It contended that its actions connecting it to Colorado did not demonstrate purposeful availment because it merely contacted a Minnesota-based firm that happened to staff the case with Colorado attorneys. A plaintiff desiring to invoke a Colorado court’s jurisdiction over a nonresident defendant must show that doing so comports with the long-arm statute and due process. Here, RegScan specifically retained an attorney in Colorado based on an existing relationship. The totality of the circumstances surrounding this retention demonstrates that RegScan’s purposeful activities directed at Colorado satisfy the minimum contacts requirement. Further, requiring RegScan to defend this case in Colorado was not unreasonable. Therefore, the district court did not err in denying RegScan’s motion to dismiss for lack of personal jurisdiction.

RegScan next contended that the court erred by allowing the law firm’s expert witness on the reasonableness of its fees to testify to the substance of information in pro forma bills (records reflecting the total number of hours worked) that the law firm didn’t offer into evidence. Fed. R. Evid. 703 allows an expert to base his opinion on facts or data that wouldn’t be admissible if such facts and data are of a type on which experts in the field would reasonably rely. But the expert may not disclose those inadmissible facts to the jury unless the court so allows after engaging in the balancing analysis required by the rule. RegScan’s argument confuses information that can’t be admitted under the evidence rules with information that simply has not been admitted. Here, RegScan failed to timely argue that the pro formas weren’t admissible. Further, the substance of the testimony was already in evidence, and RegScan did not argue that the witness’s ultimate opinion was inadmissible or wrong. Therefore, there was no violation of Fed. R. Evid. 703.

RegScan also contended that the district court erred by failing to include a fairness element in the elemental breach of contract jury instruction. Even if the court erred in omitting the element that the fee agreement was “fair and reasonable under the circumstances,” all relevant evidence in the record overwhelmingly shows that the fee agreement was fair and reasonable under the circumstances. Thus, any error was harmless.

Finally, RegScan argued that the district court erred by relying on CRE 408 to exclude email communications in which RegScan disputed the reasonableness of the law firm’s fees and didn’t admit liability. This evidence was properly excluded under CRE 408 because at the time the communications occurred the parties disputed the amount owed and were exchanging offers to resolve the dispute.

The judgment was affirmed.

Summary provided courtesy of Colorado Lawyer.

Print Friendly, PDF & Email

Speak Your Mind

*