Statutes of Limitations
Accrual of Claims Between Counsel.
In twodifferent cases, the Colorado Court of Appealsaddressed issues concerning accruals of claims forstatute of limitations purposes where one attorneysued another. In
HannonLaw Firm, LLC v. Melat, Pressman & Higbie, LLP
,2011 WL 724742 (Colo.App. March 3, 2011),
, 2011 WL 3855738(Colo. Aug. 29, 2011) (also at 2011 Colo. LEXIS 685),the plaintiff and defendants were law firms whohad contingent-fee agreements with certain clientsin a federal court tort action against a mine owner.Together, they entered into a fee-sharing agree-ment that did not state how the compensationwould be handled if one law firm withdrew. Theplaintiff eventually did withdraw, and some con-siderable period later when the case settled, theclients paid the defendant law firms their fees andcosts as required by the contingent-fee agreement,and one defendant paid the plaintiff for costs ithad incurred before it withdrew, but not for anyservices that the law firm had rendered. The plain-tiff sued less than three years after being notifiedof the settlement, asserting a claim for
, and the district court dismissed the case onstatute-of-limitations grounds. The court of appealsagreed with the plaintiff that its
claim did not accrue until recovery actuallyoccurred in the underlying case. The court ofappeals disagreed with the defendants’ contentionthat the claim accrued when the plaintiff last pro-vided legal services to the clients, nearly nine years before the instant suit was filed, because a claimfor
accrues when a person discov-ers or reasonably should discover that all elementsof the claim are present, which means “when aplaintiff has conferred a benefit upon the defen-dant and the retention of the benefit becomesunjust.”
at *2. The accrual standard in C.R.S.§ 13-80-108(6), concerning breach of implied con-tract, does not apply, because
claims require no proof of any agreement or breach.
Hannon Law Firm
, 2011 WL 724742 at *4.Because a claim for attorney fees under a contin-gent-fee contract may accrue only when recoveryactually occurs in the underlying litigation, and awithdrawing attorney’s quantum-meruit claimagainst former co-counsel cannot accrue earlierthan when that recovery in the underlying actionhappens, that is the earliest time when it could besaid to be unjust for the settling counsel to haveretained the benefit of the withdrawing attorney’swork.
. at *5. This is one of the issues that thesupreme court has agreed to review on certiorari.
See Melat, Pressman & Higbie, LLP v. Hannon LawFirm, LLC
, 2011 WL 3855738 (Colo. Aug. 29, 2011).Another division of the court of appeals fol-lowed the holding in
when one attorneysued another attorney and an investment-fundrecovery expert for unjust enrichment in
Steren-buch v. Goss
, 2011 WL 4837519 (Colo. App. Oct. 13,2011) (also at 2011 Colo. App. LEXIS 1637). In thatcase, the plaintiff sued for tortious interferencewith contracts and civil conspiracy, and also forunjust enrichment, claiming that the defendantshad stolen clients that the plaintiff represented ona contingency basis in an underlying case alleging a fraudulent investment scheme, which ultimatelyresulted in a consent judgment and distribution offunds to the plaintiff’s former clients, among oth-ers. Because a claim for unjust enrichment is equi-table and based on principles that are associatedwith restitution, the court relied on
, andheld that, by analogy, “any retention by [defen-dants] for the benefits of [plaintiff’s] legal servicescould become unjust only upon a client’s recoveryin a contingency fee case.”
at *9. Thus, theplaintiff’s cause of action for unjust enrichmentaccrued only when the defendants obtainedrecovery of their contingency from the distribu-tion following the consent judgment. A differentresult followed, however, as it concerned the tor-tious interference claim. Under the applicablestatute holding that a tort cause of action accrueswhen “both the injury and its loss are known orshould have been known by the exercise of rea-sonable diligence,” C.R.S. § 13-80-108(1),
claimaccrued when the plaintiff knew or should haveknown that the defendant attorney had improper-ly induced his clients to terminate their contractswith him,
, 2011 WL 4837519 at *4, and itwas not necessary that the plaintiff know the pre-cise extent of his damages, as opposed to knowing that he had been injured.
Three-Year Statute of Limitations BarredClaim for Misappropriation of Trade Secrets.
TheColorado Supreme Court reviewed and affirmed a
2011 Annual Survey of Colorado Law