August 24, 2019

Colorado Court of Appeals: Attorney Fee Award in Traverse Proceeding Limited to Fees Incurred to Prepare, File, and Prosecute Traverse

The Colorado Court of Appeals issued its opinion in L&R Exploration Venture v. CCG, LLC on Thursday, April 23, 2015.

Garnishment—Attorney Fees Under CRCP 103 § 8(b)(5).

This is the second appeal in a garnishment proceeding. In the first appeal, intervenors challenged the district court’s order allowing garnishment of their bank accounts to satisfy an underlying judgment in favor of L&R Exploration Venture and its participants (collectively, L&R plaintiffs). A division of the Court of Appeals affirmed the order, concluding that the district court did not err in (1) determining that intervenor CCG is the alter ego of judgment debtor Jack Grynberg; (2) concluding that Grynberg and his alter egos had made voidable fraudulent transfers to intervenors Gadeco, Pricaspian, and Celeste Grynberg; and (3) allowing L&R plaintiffs to garnish the bank accounts of those intervenors.

Intervenors challenged the district court’s order awarding L&R plaintiffs attorney fees and costs under CRCP 103, § 8(b)(5), which states “[a]t any hearing upon a traverse, the court shall make such orders as to reasonable attorney fees, costs and expense of the parties to such hearing as are just.” The Court held that it was error to award attorney fees and costs not incurred to prepare and file the traverses of the intervenors’ challenges to the garnishments or to subsequently prosecute the traverse proceeding. It held that such an award is limited, in a successful traverse action, to only the attorney fees and costs incurred by the garnishor to prepare, file, and prosecute the traverse, and, in an unsuccessful action, to the attorney fees and costs incurred by the putative garnishee to defend against the traverse. The order was vacated for a recalculation of attorney fees and costs.

Summary and full case available here, courtesy of The Colorado Lawyer.