Tracy v. Surofchek.
2025 COA 21. No. 24CA1058. Colorado Rules of Appellate Procedure—Costs on Appeal Taxable in the Trial Court—Premiums Paid for Supersedeas or Other Bond—Letters of Credit—C.A.R. 39—CRCP 121.
February 20, 2025
The Tracys and Surofcheks lived in adjacent houses and had a property dispute. They entered into a settlement agreement, but the Tracys then sued the Surofcheks for trespass, conversion and destruction of property, and violations of the homeowners association covenants. The Surofcheks counterclaimed for breach of the settlement agreement and abuse of process. A jury found for the Surofcheks’ on the Tracys’ claims and on both of the Surofcheks’ counterclaims. The court entered judgment for the Surofcheks on the jury’s verdicts, and the Tracys moved the court to approve a letter of credit to serve as a bond to stay execution of the judgment pending their planned appeal, which the district court granted. The Tracys delivered the letter of credit to the clerk of the court and then filed a notice of appeal of the part of the judgment the court entered on the Surofcheks’ abuse of process counterclaim. While the appeal was pending, the Tracys, with the court’s approval, delivered to the court second and third letters of credit to account for amendments to the judgment and costs pending appeal. They later delivered three renewed letters of credit because the previous ones expired after one year. The court approved the renewed letters of credit, which extended the previous letters of credit for one year. The judgment on the abuse of process counterclaim was reversed and the case was remanded for a new trial on that counterclaim. On remand, the Tracys submitted a bill of costs incurred on appeal to the district court under C.A.R. 39(a) and (c), in part for $30,367.89 for the cost of premiums of $15,074 paid for the initial letters of credit and $15,043.89 paid for the renewed letters of credit. The district court denied the Tracys’ bill of costs because the Surofcheks’ abuse of process counterclaim remained pending. After the Surofcheks voluntarily dismissed their abuse of process counterclaim, the Tracys filed a renewed bill of costs, again seeking an award of $30,367.89. A different judge initially entered an order awarding the Tracys $34,772.09 for appellate costs, which included the costs of the letters of credit, but later denied the request.
On appeal, the Tracys argued that the district court abused its discretion by denying their request for an award of the costs of the letters of credit. The court of appeals determined that C.A.R. 39(c)(1)(C) and CRCP 121 § 1-23(2)(a) and (9), when considered together, clearly provide that a letter of credit provided to preserve a party’s rights pending appeal in lieu of a supersedeas bond is an “other bond” within the meaning of C.A.R. 39(c)(1)(C). Accordingly, a successful appellant may recover the reasonable fee for such a bond, and the district court abused its discretion. The court however, declined to direct the district court to award the Tracys the entirety of the costs of the letters of credit because the district court hasn’t yet ruled on the reasonableness of these expenses.
The order was reversed and the case was remanded for the district court to determine the reasonable amount of the costs of the letters of credit that the Tracys delivered to secure the judgment.