     The summaries of the Colorado Court of Appeals published opinions
  constitute no part of the opinion of the division but have been prepared by
  the division for the convenience of the reader. The summaries may not be
    cited or relied upon as they are not the official language of the division.
  Any discrepancy between the language in the summary and in the opinion
           should be resolved in favor of the language in the opinion.


                                                                   SUMMARY
                                                                 May 17, 2018

                                2018COA71

No. 17CA0303, State of Colorado v. Robert J. Hopp and
Associates, LLC — Bankruptcy — Attorney Fees — Colorado
Consumer Protection Act — Colorado Fair Debt Collection
Practices Act

     A division of the court of appeals considers whether the trial

court erred when it imposed an award of attorney fees and costs

against a defendant who had filed for bankruptcy and received a

bankruptcy discharge before the underlying case in the trial court

was filed. Defendant argues that the trial court was precluded from

doing so by Bankruptcy Code § 727, which prohibits any attempt to

collect from the debtor a debt that has been discharged, because

the bankruptcy discharge applied to any claim for attorney fees and

costs that could have been fairly or reasonably contemplated during

the bankruptcy case. 11 U.S.C. § 727 (2012).
     Adopting the rationale set forth in In re Jensen, 395 B.R. 472,

480 (Bankr. D. Colo. 2008), the division concludes that, because

the attorney fees award in this case is a civil penalty imposed under

the Colorado Consumer Protection Act, it is not dischargeable

under 11 U.S.C. § 523(a)(7) (2012). Thus, the division concludes

that the trial court did not err when it awarded attorney fees and

costs against defendant.
COLORADO COURT OF APPEALS                                        2018COA71



Court of Appeals No. 17CA0303
City and County of Denver District Court No. 14CV34780
Honorable Shelley I. Gilman, Judge


State of Colorado, ex rel. Cynthia H. Coffman, Attorney General for the State of
Colorado; and Julie Ann Meade, Administrator, Uniform Consumer Credit
Code,

Plaintiffs-Appellees and Cross-Appellants,

v.

Robert J. Hopp & Associates, LLC; The Hopp Law Firm, LLC; National Title,
LLC, d/b/a Horizon National Title insurance, LLC; First National Title
Residential, LLC; Safehaus Holdings Group, LLC; Lori L. Hopp; and Robert J.
Hopp,

Defendants-Appellants and Cross-Appellees,


                              ORDER AFFIRMED

                                  Division I
                      Opinion by JUDGE ROTHENBERG*
                       Taubman and Harris, JJ., concur

                           Announced May 17, 2018


Cynthia H. Coffman, Attorney General, Jennifer H. Hunt, First Assistant
Attorney General, Erik R. Neusch, Senior Assistant Attorney General, Rebecca
M. Taylor, Mark L. Boehmer, Assistant Attorneys General, Denver, Colorado,
for Plaintiffs-Appellees and Cross-Appellants

Richards Carrington, LLC, Christopher P. Carrington, Ruth M. Moore, Denver,
Colorado, for Defendants-Appellants and Cross-Appellees


*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2017.
¶1    Plaintiffs, the State of Colorado, ex rel. Cynthia H. Coffman,

 Attorney General for the State of Colorado; and Julie Ann Meade,

 Administrator, Uniform Consumer Credit Code, brought a civil law

 enforcement action against defendants, foreclosure lawyer Robert J.

 Hopp; Hopp’s wife, Lori L. Hopp; Hopp’s law firms, Robert J. Hopp

 & Associates, LLC and The Hopp Law Firm, LLC (collectively, the

 law firms); as well as Hopp’s affiliated title companies, National

 Title, LLC, d/b/a Horizon National Title Insurance, LLC, and First

 National Title Residential, LLC; and Safehaus Holdings Group, LLC,

 a company owned by Hopp and Lori Hopp, which, through its

 subsidiary, provided accounting and bookkeeping services for the

 law firms and title companies. The State alleged that Hopp, the law

 firms, and their affiliated companies violated the Colorado

 Consumer Protection Act (CCPA) and the Colorado Fair Debt

 Collection Practices Act (CFDCPA) by billing its mortgage servicer

 clients title insurance premium charges for foreclosure

 commitments when those full costs were not actually incurred,

 despite knowing that these fraudulent costs would be assessed

 against Colorado homeowners in foreclosure. The district court

 agreed with plaintiffs and entered judgment in their favor, except it


                                    1
 concluded there was insufficient evidence to find Lori Hopp

 personally liable for any alleged misconduct.

¶2    Defendants now appeal the district court’s award of plaintiffs’

 attorney fees and costs. Lori Hopp further appeals the district

 court’s denial of her request for her attorney fees.

¶3    We affirm the district court’s order.

                       I.   Attorney Fees Orders

¶4    The trial court awarded plaintiffs most of their reasonable

 attorney fees and costs incurred in bringing the enforcement action

 under the CCPA and CFDCPA. See § 5-16-133, C.R.S. 2017; § 6-1-

 113(4), C.R.S. 2017. The trial court’s order awarding fees cites to

 the former location of the CFDCPA, section 12-14-135, C.R.S. 2014.

 The CFDCPA was repealed and replaced in 2017 and section 12-14-

 135 was replaced by section 5-16-133, C.R.S. 2017. Plaintiffs

 requested attorney fees in the amount of $933,277 and $35,648 in

 costs. The trial court made numerous reductions to plaintiffs’

 requested award:

          The court concluded it was unreasonable to employ more

            than two attorneys and a paralegal at trial. It declined to

            award fees for any fees requested for staffing at trial


                                    2
           exceeding that level. It subtracted those amounts from

           the amount requested by plaintiffs, resulting in a lodestar

           amount of $903,106.

         Considering the factors set forth in Colo. RPC 1.5, the

           trial court observed that plaintiffs recovered significantly

           less than they sought at the outset at trial. The court

           also noted its concern that plaintiffs did not realize that a

           substantial portion of penalties imposed under the

           FDCPA were not available until after trial. Thus, the

           court reduced the lodestar amount by twenty-five percent

           and awarded $677,329.50 for attorney fees.

         Defendants challenged plaintiffs’ request for costs for

           deposing Lori Hopp and Brian Howard. Plaintiffs did not

           respond to defendants’ argument; therefore, the court

           reduced the costs award to $33,685.97.

¶5    Lori Hopp requested her attorney fees and costs, arguing that

 plaintiffs’ action against her was substantially groundless under

 sections 13-17-101 to -106, C.R.S. 2017. She argued that,

 alternatively, C.R.C.P. 11(a) required imposing a sanction against

 plaintiffs by way of awarding her attorney fees. The court denied

                                   3
 her motion, concluding that, even though the state did not

 ultimately prove the CCPA claim against her, it was not groundless,

 nor were sanctions required against plaintiffs under C.R.C.P. 11(a).

                     II.   Underlying Judgment

¶6    Defendants contend that, in the event the underlying

 judgment against them is reversed on appeal, the award of fees and

 costs against them should also be reversed because it depends on

 the validity of the underlying judgment on the merits. Because we

 affirm the underlying judgment in State v. Hopp, 2018 COA 69,

 announced today, reversal of the attorney fees award is not required

 on that basis.

                           III.   Bankruptcy

¶7    Hopp contends the trial court erred when it imposed an award

 of attorney fees and costs against him because it was precluded

 from doing so by his discharge of debts in bankruptcy. We

 disagree.

                           A.     Preservation

¶8    Hopp filed for bankruptcy on January 25, 2013, and obtained

 a discharge on February 10, 2014. Plaintiffs’ enforcement action

 was filed ten months later, on December 19, 2014. Plaintiffs


                                    4
 contend Hopp failed to preserve the issue of the effect of his

 bankruptcy discharge in the trial court because he raised this issue

 “for the first and only time” in his C.R.C.P. 59 motion after trial.

 Plaintiffs further argue that a C.R.C.P. 59 motion, which

 contemplates amending a judgment or seeking a new trial, was not

 the proper procedural avenue for raising a bankruptcy discharge.

¶9    Hopp argues that he preserved his bankruptcy argument at

 numerous points in the proceedings. First, Hopp contends that he

 asserted in his answer to plaintiffs’ complaint that his bankruptcy

 discharge barred, at least in part, some of plaintiffs’ claims against

 him. He did not provide any further details about his bankruptcy

 in the answer. After trial, in his C.R.C.P. 59 motion to amend the

 court’s findings and conclusions, Hopp argued that his bankruptcy

 discharge precluded the trial court’s award of attorney fees against

 him because they were awarded to compensate the state for its

 actual pecuniary loss. The trial court declined to address this

 argument in the context of Hopp’s C.R.C.P. 59 motion because it

 held Hopp had presented no evidence of his bankruptcy at trial.

 Hopp does not dispute the trial court’s finding that he presented no

 evidence of his bankruptcy during the trial.


                                    5
¶ 10   After plaintiffs submitted affidavits of attorney fees and costs,

  Hopp argued that the trial court, as part of its “punitive award” of

  attorney fees, was required to consider his bankruptcy in the

  context of his ability to pay. In light of his bankruptcy, Hopp

  alleged he was unable to pay the underlying judgment of penalties

  or plaintiffs’ requested attorney fees.

¶ 11   Even assuming that Hopp properly preserved the

  consideration of the effect of his bankruptcy discharge on any

  attorney fees award in the trial court, we reject Hopp’s arguments

  on the merits.

                         B.   Prepetition Liability

¶ 12   Hopp argues that the district court was precluded from

  awarding fees and costs against him by Bankruptcy Code § 727,

  which prohibits any attempt to collect from the debtor a debt that

  has been discharged. 11 U.S.C. § 727 (2012). He contends that the

  bankruptcy discharge applies to any claim for attorney fees and

  costs that could have been fairly or reasonably contemplated during

  the bankruptcy case. We are not persuaded.

¶ 13   Bankruptcy Code § 524(a)(1) voids any judgment at any time

  obtained for a determination of a personal liability of the debtor for


                                     6
  a debt discharged, as relevant here, under § 727, 11 U.S.C.

  § 524(a)(1) (2012). A debt is not dischargeable, however, for “a fine,

  penalty, or forfeiture payable to and for the benefit of a

  governmental unit, and is not compensation for actual pecuniary

  loss, other than a tax penalty.” 11 U.S.C. § 523(a)(7) (2012). The

  fine, penalty, or forfeiture may be criminal or civil in nature. In re

  Jensen, 395 B.R. 472, 480 (Bankr. D. Colo. 2008). We review

  whether a particular debt meets the elements of § 523(a)(7), which

  is a question of law, de novo. Id.

¶ 14   First, Hopp argues that, under In re Castellino Villas, A. K. F.

  LLC, 836 F.3d 1028 (9th Cir. 2016), the attorney fees award

  constitutes a prepetition debt which was fairly contemplatable prior

  to the bankruptcy discharge, and therefore is subject to the

  discharge. In Castellino Villas, the Ninth Circuit reasoned as

  follows:

             When parties engage in prepetition litigation
             that could lead to an award of attorneys’ fees,
             they may fairly contemplate that the prevailing
             party will be awarded those fees. Therefore, a
             creditor’s contingent claim to such fees is
             discharged in bankruptcy, even if some fees
             are incurred post-petition. But when the
             prepetition litigation is resolved in bankruptcy
             so that any claim (including a contingent claim


                                       7
            for attorneys’ fees) against the debtor would be
            discharged, we cannot say that the debtor’s
            affirmative action to commence what amounts
            to “a whole new course of litigation,” was in the
            fair contemplation of the parties when the
            debtor filed a bankruptcy petition. Rather, the
            debtor’s decision to eschew the fresh start
            provided by bankruptcy and engage in new
            litigation is more akin to post-petition conduct
            that, by definition, was not in the fair
            contemplation of the parties prepetition.

  Id. at 1035-36 (quoting Siegel v. Fed. Home Loan Mortg. Corp., 143

  F.3d 525, 534 (9th Cir. 1998)).

¶ 15   Castellino Villas is inapposite here. The claims underlying the

  attorney fees award in Castellino Villas arose out of dischargeable

  debts. That is not true in this case. Hopp concedes that the award

  of penalties under the CCPA and CFDCPA is nondischargeable. The

  United States Bankruptcy Court for the District of Colorado has

  held that a civil penalty imposed under the CCPA is a

  nondischargeable penalty within the meaning of § 523(a)(7).

  Jensen, 395 B.R. at 482. Federal courts are divided on the issue of

  whether an award of attorney fees and costs may be held

  nondischargeable under § 523(a)(7). However, the bankruptcy

  courts look to state law to reach this determination. Id. at 487.




                                    8
¶ 16      The Bankruptcy Court for the District of Colorado has

  considered the CCPA’s attorney fees provision and noted that

  Colorado cases hold it serves both punitive and deterrent purposes.

  Id. (citing Hall v. Walter, 969 P.2d 224, 231 (Colo. 1998)). The fact

  that such an award also serves to enable enforcement by defraying

  the government’s expenses did not change the primary purpose of

  the provision. Id. at 487-88. Accordingly, the Bankruptcy Court

  concluded that an award of attorney fees made under the CCPA’s

  mandatory provision was sufficiently penal to constitute a “fine,

  penalty or forfeiture” under § 523(a)(7) and was not dischargeable.

  Id. at 488. We are persuaded by the Bankruptcy Court’s

  interpretation of the CCPA’s attorney fees provision and apply it

  here.

¶ 17      We further note that there is no reason to believe that the

  subsections of the CFDCPA allowing an award of attorney fees and

  costs payable to the administrator do not serve the same penal

  purposes as the CCPA. The CFDCPA serves a similar purpose as

  the CCPA, namely consumer protection. See Flood v. Mercantile

  Adjustment Bureau, LLC, 176 P.3d 769, 773 (Colo. 2008) (The

  FDCPA has the “remedial purpose of protecting consumers against


                                       9
  debt collection practices that take advantage of gullible, unwary,

  trustful, or cowed persons who receive a debt collection

  communication.”). Thus, we conclude that the trial court’s attorney

  fees awards made under the CCPA and the CFDCPA are not

  dischargeable, and we decline to order that they be vacated as void

  under 11 U.S.C. § 524.

       IV.    Attorney Fees for Unpursued or Unsuccessful Claims

¶ 18   Defendants contend the trial court erred when it failed to

  reduce plaintiffs’ attorney fees award by the amount of any fees

  incurred for their unpursued and unsuccessful claims. We

  disagree.

¶ 19   “We review the reasonableness of a trial court’s award of

  attorney fees for an abuse of discretion. The determination of

  reasonableness of attorney fees is a question of fact for the trial

  court, and its ruling will not be disturbed on review unless patently

  erroneous and unsupported by the evidence.” Payan v. Nash Finch

  Co., 2012 COA 135M, ¶ 16 (citation omitted).

¶ 20   Where a plaintiff brings multiple claims, but is only successful

  on some claims, we apply a method of claim segregation to

  determine to what extent an award of attorney fees can be awarded


                                    10
  under a fee-shifting statute. See Rocky Mountain Festivals, Inc. v.

  Parsons Corp., 242 P.3d 1067, 1073 (Colo. 2010). Where a plaintiff

  brought multiple claims involving a common core of facts or based

  on related legal theories, counsel’s work on an individual claim

  could not be distinguished from work on the entirety of the case.

  Id. (citing Hensley v. Eckerhart, 461 U.S. 424, 435 (1983)).

  Therefore, the court concluded that reducing the fee award for work

  on unsuccessful claims would be inappropriate. Id. However,

  where a plaintiff brought distinctly different claims for relief based

  on different facts and legal theories, and “the litigation could be

  justly conceived as a ‘series of discrete claims’ that had been ‘raised

  in separate lawsuits,’” an award of fees only for the plaintiff’s

  successful claims would be both practicable and appropriate to

  effect the purpose of the fee-shifting statute. Id. (quoting Hensley,

  461 U.S. at 434-35).

¶ 21   Defendants objected to portions of plaintiffs’ attorney fee

  request. Defendants argued that plaintiffs failed to subtract from

  their request fees incurred in the pursuit of the following claims:

           The claim alleging Hopp and the law firms billed

             incorrectly for foreclosure commitments that did not


                                     11
            result in title policies through LSI Default Title and

            Closing, also known as LSI Title Agency, which was

            unsuccessful at trial.

          The claim alleging defendants misrepresented a fifteen

            dollar “filing cost” in bids and cure statements, which the

            trial court dismissed at summary judgment.

          The claim, which plaintiffs withdrew prior to trial, that

            the law firms misrepresented $275 as a title search

            report fee on its files from servicer Fannie Mae.

          The claim, which was also withdrawn prior to trial, that

            the law firms charged a standard C.R.C.P. 120 filing fee

            on foreclosure files for files even when the client was

            exempt from court filing costs.

¶ 22   In its order, the trial court ruled as follows:

            The unpursued and unsuccessful claims and
            the successful claims involved a common core
            of facts and were based on related legal
            theories. Since the legal work on the
            unpursued and unsuccessful claims could not
            be distinguished from the work done on the
            whole of litigation, a reduction of the fee would
            be inappropriate. . . . Moreover, these
            unpursued and unsuccessful claims represent
            a small fraction of the case.



                                     12
  We agree with the trial court’s reasoning. Plaintiffs’ claims involved

  a common core of facts: namely, that the law firms submitted

  unlawful and inflated charges for costs paid by homeowners. All of

  plaintiffs’ claims were brought under the same legal theories,

  applying provisions of the CCPA and CFDCPA. Even though the

  unsuccessful and unpursued claims alleged different instances of

  misrepresentation, plaintiffs’ theory on each claim was similar —

  namely, that Hopp and the law firms, with the cooperation of their

  affiliated title firms, engaged in a general practice in their

  foreclosure work of billing loan servicers (and accordingly,

  homeowners in default) for certain costs that were not actually

  incurred.

¶ 23   On the LSI claim, which proceeded to trial, plaintiffs alleged

  that Hopp and the law firms engaged in the same kind of

  misrepresentation with foreclosure commitment billing as it alleged

  in the claims in which it prevailed. The only difference between this

  claim and the successful claims was that, in the acts underlying the

  LSI claim, plaintiffs alleged that Hopp and the law firms ordered

  title commitments through LSI, rather than through its own

  affiliated title companies.


                                     13
¶ 24   As for the claims withdrawn prior to trial, plaintiffs alleged

  that defendants similarly misrepresented other fees which they were

  not authorized to collect. Plaintiffs alleged that defendants

  routinely misrepresented the cost of a Fannie Mae title search

  report by always charging clients the maximum cost allowed by

  Fannie Mae, even though the routine market rate for the product

  was less than half that amount. Plaintiffs further alleged that

  defendants charged clients filing fees for standard Rule 120 cases,

  even when the client for whom the law firm filed the motion to

  authorize sale was exempt from filing costs by the state. Both of

  these claims were based on plaintiffs’ theory that defendants, as a

  routine practice in their foreclosure work, billed their loan servicer

  clients (and, accordingly, homeowners in default) for costs that were

  not actually incurred. The only difference between the unpursued

  claims and the successful claims was the specific category of the

  allegedly fraudulent costs being billed.

¶ 25   Accordingly, the trial court’s decision to decline to reduce the

  attorney fees award on the basis of claim segregation was not

  patently erroneous or unsupported by the evidence presented at




                                    14
  trial. We conclude the trial court did not abuse its discretion. See

  Payan, ¶ 16.

                      V.    Lori Hopp’s Fees Request

¶ 26   Lori Hopp contends the trial court erred in rejecting her

  argument that she was entitled to her attorney fees and costs under

  sections 13-17-101 to -106 for defending against plaintiffs’

  eventually unsuccessful claims against her. We disagree.

¶ 27   We review a trial court’s decision whether to award attorney

  fees under section 13-17-102, C.R.S. 2017, for an abuse of

  discretion. Anderson v. Pursell, 244 P.3d 1188, 1193 (Colo. 2010).

  “A trial court abuses its discretion if its decision is ‘manifestly

  arbitrary, unreasonable, or unfair.’” Id. at 1194 (quoting Colo. Nat’l

  Bank of Denver v. Friedman, 846 P.2d 159, 167 (Colo. 1993)).

¶ 28   A trial court is authorized to award “reasonable attorney fees

  against any attorney or party who has brought or defended a civil

  action, either in whole or in part, that the court determines lacked

  substantial justification.” § 13-17-102(2). An action lacks

  substantial justification if it is “substantially frivolous, substantially

  groundless, or substantially vexatious.” § 13-17-102(4).




                                     15
¶ 29   Lori Hopp does not contend the claims against her were

  substantially vexatious or frivolous; rather, she argues that the

  claims were substantially groundless. A claim is groundless “if the

  allegations in the complaint, while sufficient to survive a motion to

  dismiss for failure to state a claim, are not supported by any

  credible evidence at trial.” Stepanek v. Delta Cty., 940 P.2d 364,

  369 (Colo. 1997). A claim is also considered groundless if there is

  no evidence supporting an essential element of a claim, even if there

  is evidence supporting other elements. See Ranta Constr., Inc. v.

  Anderson, 190 P.3d 835, 847 (Colo. App. 2008). “A losing position

  is not necessarily groundless for purposes of awarding attorney

  fees, nor is a claim groundless solely because the plaintiff failed to

  establish a prima facie case if there is some credible evidence to

  support the claim.” In re Estate of Owens, 2017 COA 53, ¶ 50.

¶ 30   When granting an award of fees under section 13-17-102(2),

  the trial court must consider the factors set forth in section 13-17-

  103, C.R.S. 2017, which “give context and content” to the court’s

  determination whether a fee award is appropriate. Munoz v.

  Measner, 247 P.3d 1031, 1034 (Colo. 2011). These include, as

  relevant here,


                                    16
             (a) [t]he extent of any effort made to determine
             the validity of any action or claim
             before [it] was asserted;
             (b) [t]he extent of any effort made after the
             commencement of an action to reduce the
             number of claims or defenses being asserted or
             to dismiss claims or defenses found not to be
             valid within an action;
             (c) [t]he availability of facts to assist a party in
             determining the validity of a claim or defense;

             ...

             (f) [w]hether . . . issues of fact determinative of
             the validity of a party’s claim or defense were
             reasonably in conflict; [and]
             (g) [t]he extent to which the party prevailed
             with respect to the amount of and number of
             claims in controversy.

  § 13-17-103(1). A trial court is required to discuss

  only those factors enumerated in section 13-17-103 that

  are relevant to the case, and need not make specific findings with

  respect to factors that are not specifically at issue. Anderson, 244

  P.3d at 1197.

¶ 31   While the trial court concluded plaintiffs failed to prove their

  CCPA claim against Lori Hopp by a preponderance of the evidence,

  the court explicitly noted that it “did not find that the State failed to

  present any credible evidence in support of the claim.” (Emphasis

  added.) It further ruled:


                                     17
             The State’s claim against Ms. Hopp arose from
             a rational argument based on credible evidence
             and law; namely, as the 85 percent owner of
             National Title and an active participant in the
             entities’ businesses through her bookkeeping
             and accounting services at SafeHaus
             Financial, Ms. Hopp approved, directed,
             participated, or cooperated in its conduct.
             Further, the longtime executive vice president
             of National Title identified Ms. Hopp as a
             person of authority.

  In its order, the court cited case law indicating that a losing

  position is not necessarily groundless for the purpose of awarding

  attorney fees.

¶ 32   The trial court considered whether plaintiffs contemplated the

  validity of their claims before the commencement of the action, and

  whether their claim was rational in light of the facts available at

  that time. Lori Hopp’s position within the companies affiliated with

  Hopp and his law firms, as well as her hands-on role in

  bookkeeping and accounting for those entities raised the question

  of her knowledge of the extent of the misrepresentations made in

  billing in foreclosure files that were the basis of all claims in this

  action. Lori Hopp’s knowledge determined, in large part, her

  liability under the CCPA. See Crowe v. Tull, 126 P.3d 196, 204

  (Colo. 2006) (to establish a violation of the CCPA, a plaintiff must


                                     18
  show the defendant knowingly engaged in a deceptive trade

  practice). The extent of Lori Hopp’s knowledge was a question of

  fact which plaintiffs could only fully develop through the

  presentation of evidence at trial. Thus, the trial court’s decision

  that plaintiffs’ CCPA claim against Lori Hopp was not substantially

  groundless was not manifestly arbitrary, unreasonable, or unfair.

¶ 33   Accordingly, the trial court did not abuse its discretion when it

  declined to award Lori Hopp’s attorney fees.

                             VI.   Conclusion

¶ 34   The order is affirmed.

       JUDGE TAUBMAN and JUDGE HARRIS concur.




                                    19
