Pedlow v. Stamp

Opinion by Judge TURSI. Plaintiff, Gertrude Pedlow, appeals from the order of the trial court awarding attorney fees and costs to defendant, Dale Stamp, pursuant to § 13-17-102, C.R.S. (1987 Repl.Vol. 6A). We reverse. In 1983, the City of Colorado Springs entered into an agreement under which defendant was responsible for operating and staffing the municipal tennis program. In 1984, defendant offered to hire plaintiff as his administrative assistant. The written employment contract proposed by defendant provided, in part, that neither the city [1111] nor defendant would provide workers’ compensation insurance coverage for plaintiff. In response, plaintiff informed defendant that this provision conflicted with his legal obligations under the Colorado Workers’ Compensation Act. When defendant refused to modify the proposed contract, plaintiff commenced this action, asserting that defendant’s conduct violated the public policy underlying §§ 8-44-101(1) and 8-48-101(1), C.R.S. (1986 Repl.Yol. 3B). Defendant filed an answer and a counterclaim which requested an award of attorney fees and costs under § 13-17-102. The complaint was dismissed on defendant’s motion for summary judgment, and the trial court subsequently entered summary judgment on defendant’s counterclaim for attorney fees. On appeal, this court rejected plaintiff’s assertion that her claim represented a good faith attempt to establish a new theory of law, and we therefore affirmed the trial court’s order. Pedlow v. Stamp, 749 P.2d 969 (Colo.App.1987). That ruling was reversed in Pedlow v. Stamp, 776 P.2d 382 (Colo.1989), wherein our supreme court held that the trial court abused its discretion in failing to conduct a hearing on defendant’s counterclaim and in failing to set forth any factual findings in support of its award. Following the hearing on remand, the trial court again entered judgment against plaintiff on defendant’s counterclaim. In its written order, the trial court made the following findings: “It is agreed that ... Plaintiff was attempting to establish new law. The court has previously found that Plaintiff’s counsel was acting in good faith and was not negligent or acting to harass, vex or delay the Defendant. “Based upon the record in this case, the court finds the complaint to be ‘substantially frivolous’ based upon the absence of Colorado precedent supporting the desired establishing of new law, and in view of the existing Colorado precedent defining wide latitude in the creation of employer-employee relationships.” On appeal, plaintiff contends the trial court abused its discretion in imposing sanctions. We agree. Section 13-17-102(7), C.R.S. (1987 Repl. Vol. 6A) provides that: “No attorney or party shall be assessed attorney fees as to any claim or defense which the court determines was asserted by said attorney or party in a good faith attempt to establish a new theory of law in Colorado.” This provision of the statute reflects the principle that an attorney’s ethical obligation zealously to represent a client permits the pursuit of a claim which is not recognized under existing law “if it can be supported by a good faith argument for an extension, modification, or reversal of existing law.” See Mission Denver Co. v. Pierson, 674 P.2d 363 (Colo.1984). Here, plaintiff sought to establish a public policy tort based on an employer’s requirement that prospective employees waive certain rights under the Workers’ Compensation Act. Such a cause of action has not been recognized in this jurisdiction, nor do we address that question here. Nonetheless, it is not unreasonable to argue that an extension of existing case law would permit a plaintiff to maintain this type of claim. In Lathrop v. Entenmann’s, Inc., 770 P.2d 1367 (Colo.App.1989), this court recognized that an employee had a civil tort cause of action against an employer when the employee had been discharged in retaliation for having pursued a workers’ compensation claim. The availability of this type of claim was not based on the particular nature of a given employer-employee relationship, but rather on the recognition that it is a violation of this state’s public policy for an employer to discourage or prevent the enjoyment of substantive rights under the Workers’ Compensation Act by forcing individuals to choose between their jobs or their rights. An identical result was reached by the Illinois Supreme Court in Kelsay v. Motorola, Inc., 74 Ill.2d 172, 23 Ill.Dec. 559, 384 N.E.2d 353 (1978). Subsequently, in Darnell v. Impact Industries, Inc., 105 Ill.2d 158, 85 Ill.Dec. 336, 473 N.E.2d 935 [1112] (1984), a majority of the Illinois Supreme Court applied the same public policy at issue in Kelsay, supra, and extended the availability of the tort to include an employee who was discharged when her employer discovered that, contrary to the statements made on her employment application, she had filed a workers’ compensation claim against a previous employer. In a dissenting opinion, Justice Moran noted, “Under the reasoning of the majority, it seems clear that if plaintiff had honestly answered the ... questions on the application at issue here, and defendant had refused to hire her on that basis, the same public policy which the majority finds offended in the case at bar would be compromised.” In our view, these decisions could serve to support an argument that employers should be liable in tort for attempting to coerce individuals to forego their statutory rights by denying them employment. Accordingly, we conclude the trial court abused its discretion in ruling that plaintiff’s claim was substantially frivolous under § 13-17-102. The order awarding attorney fees and costs is reversed. RULAND, J., concurs. DUBOFSKY, J., specially concurs.