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Serna v. Kingston Enterprises9/26/2002
contractual duty to indemnify an insured. See Stone v. Satriana, supra; Daugherty v. Allstate Insurance Co., ___ P.3d ___ (Colo. App. No. 01CA0130, Mar. 28, 2002); Pike v. American States Preferred Insurance Co., ___ P.3d ___ (Colo. App. No. 00CA0400, Feb. 28, 2002); Bernhard v. Farmers Insurance Exchange, 885 P.2d 265, 270-71 (Colo. App. 1994), aff'd, 915 P.2d 1285 (Colo. 1996). Further, the "shared recovery" contemplated by Bashor agreements encompasses only the return, on a full or pro rata basis, of the amount of money a Bashor defendant had already paid to the injured party. See Bashor v. Northland Insurance Co., supra, 29 Colo. App. at 83, 480 P.2d at 866.
Here, any duty on defendant's part to indemnify Serna arose not under contract but under common law. Further, Serna's agreement with the passengers was more akin to a profit-sharing agreement; her share of any recovery against defendant was not limited to recouping only the losses she or her insurance company sustained. Indeed, under the agreement, the passengers promised to give Serna half of any monies recovered from defendant in excess of $1 million. If, then, she were able to obtain a $1.5 million dollar judgment against defendant, she would be entitled to $250,000.
Finally, and perhaps most important, unlike the Bashor situation, there has never been a judgment enforceable against Serna; indeed, the only judgment against her is one to which she stipulated, along with conditions virtually ensuring her that it would never be enforced against her.
Because, under the particular circumstances of this case, we discern no danger that Serna will ever sustain a monetary loss or otherwise be subjected to an enforceable judgment against her, we affirm the trial court's dismissal of her indemnification claim against defendant. See Midwest Commerce Banking Co. v. Elkhart City Center, 4 F.3d 521, 526 (7th Cir. 1993)(one cannot "seek indemnity . . . without any basis for supposing that there will ever be any indemnifiable loss").
II. Attorney Fees and Costs
Next, Serna contends that the trial court erred in awarding attorney fees and costs. We agree.
Initially, we note that the trial court awarded fees and costs not only against Serna, but also against the passengers. Because the passengers are not parties to this appeal, we have no occasion to consider or disturb the award against them.
Section 13-17-102 requires that the trial court award reasonable attorney fees and costs in any case when a party's claim lacks "substantial justification," meaning the claim is substantially frivolous, groundless, or vexatious. However, where there is a rational basis grounded in law and evidence for a party's position, the trial court's finding that the position was substantially frivolous is not sustainable. Hart & Trinen v. Surplus Electronics Corp., 712 P.2d 491, 493 (Colo. App. 1985).
Having concluded that Serna's indemnity claim was not barred by the WCA or UCATA, we must necessarily conclude that "substantial justification" existed for the positions she took with respect to those issues. Thus, we cannot sustain the trial court's award of attorney fees and costs against Serna.
Because we reverse that award, we need not consider defendant's cross-appeal.
Accordingly, the judgment is affirmed, except that the award of attorney fees and costs against Serna is reversed.
JUDGE PLANK concurs.
JUDGE TAUBMAN specially concurs.
JUDGE TAUBMAN specially concurring.
While I agree with the majority's analysis, I write separately to express my agreement with Kingston that, as a matter of public p
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