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
February 20, 2025
2025COA21
No. 24CA1058, Tracy v. Surofchek — Colorado Rules of
Appellate Procedure — Costs on Appeal Taxable in the Trial
Court — Premiums Paid for Supersedeas or Other Bond —
Letters of Credit
A division of the court of appeals holds, as a matter of first
impression, that the reasonable cost of a letter of credit that is
approved by and delivered to the court to secure a judgment
pending appeal is a recoverable cost of appeal under C.A.R.
39(c)(1)(C).
COLORADO COURT OF APPEALS 2025COA21
Court of Appeals No. 24CA1058
El Paso County District Court No. 20CV30335
Honorable Thomas K. Kane, Judge
Honorable Amanda J. Philipps, Judge
George Tracy and Amy Tracy,
Plaintiffs-Appellants,
v.
David T. Surofchek and Amy Surofchek,
Defendants-Appellees.
ORDER REVERSED AND CASE
REMANDED WITH DIRECTIONS
Division I
Opinion by JUDGE J. JONES
Brown and Yun, JJ., concur
Announced February 20, 2025
Gordon & Rees LLP, John R. Mann, Denver, Colorado, for Plaintiffs-Appellants
Sparks Willson, P.C., Eric V. Hall, Robert J. Bucknam, Colorado Springs,
Colorado, for Defendants-Appellees
¶1 George and Amy Tracy appeal the district court’s order
declining to award them the costs of letters of credit they obtained
to stay execution of a judgment against them pending their
ultimately successful appeal of a part of that judgment. The district
court concluded that such costs aren’t recoverable as costs of
appeal under C.A.R. 39(c)(1)(C) as a matter of law. But we conclude
that a successful appellant may recover the reasonable cost of a
letter of credit that the appellant obtains and delivers, and the
district court approves, in lieu of a supersedeas bond to stay
execution of a civil judgment pending appeal. We therefore reverse
the district court’s order and remand the case to the district court
to determine the reasonable costs of the Tracys’ letters of credit.
I. Background
¶2 David T. and Amy Surofchek bought a house next to the
Tracys’ house. Before moving in, though, they began renovating
their backyard fence, which bordered part of the Tracys’ property.
A dispute arose over who owned a corner area of property where
part of the fence ran, with each side accusing the other of
unneighborly behavior.
1
¶3 Though the Tracys and Surofcheks reached a settlement
whereby the Surofcheks paid the Tracys $15,000 in return for a
quitclaim deed to the disputed parcel, the Tracys later 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.
¶4 A jury found in the Surofcheks’ favor on the Tracys’ claims
and on both of the Surofcheks’ counterclaims. It awarded the
Surofcheks $208,542 in damages on their counterclaim for breach
of the settlement agreement and $950,000 on their counterclaim for
abuse of process. The court entered judgment for the Surofcheks
on the jury’s verdicts for $1,169,251.55 (which included
prejudgment interest).
¶5 The Tracys moved the court to approve a letter of credit in the
amount of $1,448,178 to serve as a bond to stay execution of the
judgment pending their planned appeal. The amount purported to
cover the entire judgment. The Surofcheks didn’t oppose the
motion. The district court granted it, and the Tracys delivered the
letter of credit to the clerk of the court. They then filed a notice of
2
appeal. But they didn’t appeal the entire judgment: they only
appealed the part of the judgment the court entered on the
Surofcheks’ abuse of process counterclaim.
¶6 While the appeal was pending, the Tracys, again with the
court’s approval, delivered to the court second and third letters of
credit in the amounts of $13,386.94 and $15,809, respectively, 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. Those renewed letters of
credit, which the court also approved, extended the previous letters
of credit for one year.
¶7 A division of this court reversed the judgment on the abuse of
process counterclaim, holding that the district court had
erroneously instructed the jury. The division therefore remanded
the case for a new trial on that counterclaim. Tracy v. Surofchek,
(Colo. App. No. 22CA0910, July 6, 2023) (not published pursuant to
C.A.R. 35(e)). The division’s reversal of that part of the judgment,
however, didn’t affect the part of the judgment the district court had
entered on the Surofcheks’ counterclaim for breach of the
settlement agreement. Id. at 18.
3
¶8 On remand, the Tracys submitted a bill of costs incurred on
appeal to the district court under C.A.R. 39(a) and (c). Among the
costs for which they sought an award was $30,367.89 for the “[c]ost
of premiums paid for letters of credit/supersedeas bond.” They
claimed the “premiums” were $15,074 for the initial letters of credit
and $15,043.89 for the renewed letters of credit. The Surofcheks
objected to these claimed costs, arguing that C.A.R. 39(c)(1)(C)
doesn’t “authorize an award of borrowing expenses incurred in
obtaining a line of credit to secure a letter of credit,” the Tracys
hadn’t shown that they had actually paid these expenses, the costs
were “unreasonable and excessive,” and the Tracys were seeking
costs “associated with judgments that were not appealed” (i.e., the
judgment on the counterclaim for breach of the settlement
agreement).
¶9 The district court denied the Tracys’ bill of costs in its entirety
because the case wasn’t over; the Surofcheks’ abuse of process
counterclaim remained pending. But in the same order, the court
said,
C.A.R. 39 does not provide for the award of
costs associated with obtaining a letter of
credit or the borrowing expenses of
4
obtaining a loan. C.A.R. 39(c)(1)(C) allows the
Court to award “premiums paid for a
supersedeas or other bond to preserve
rights pending appeal.” C.A.R. 39(c)(1)(C) does
not authorize the Court to award the costs
associated with a letter of credit.
Plaintiffs seek to recover under
C.A.R. 39(c)(1)(C) borrowing expenses for lines
of credit used to secure the letters of credit,
including for the following costs: loan
origination fees, life of loan flood monitoring,
flood determination fees, recording fees,
and title work. The costs requested are not
premiums for a bond or even a letter of credit
to be issued. [T]hese are expenses
allegedly incurred by Plaintiffs to obtain a loan.
Nothing in the express terms of
C.A.R. 39(c)(1)(C) authorizes the Court to
award borrowing expenses associated with
obtaining a loan to secure a letter of credit.
¶ 10 The Surofcheks voluntarily dismissed their abuse of process
counterclaim. The Tracys then filed a renewed bill of costs, again
seeking an award of $30,367.89 for the “[c]ost of premiums paid for
letters of credit/supersedeas bond.” A different judge than the one
who had previously declined to award costs of appeal until the case
was completed entered an order awarding the Tracys $34,772.09 for
5
appellate costs.1 That sum included the costs of the letters of
credit.
¶ 11 The Surofcheks responded to the court’s order and the Tracys’
renewed bill of costs by pointing out that the prior judge had said
that the costs of the letters of credit wouldn’t be awarded — a fact
the Tracys hadn’t informed the new judge of when they renewed
their request — and arguing why, on the merits, the court shouldn’t
award those expenses. The Tracys argued in reply why they were
entitled to recover the costs of the letters of credit notwithstanding
the previous judge’s view on the matter. The court then changed
course, denying the request for the costs of the letters of credit
based on the previous judge’s reasoning.
II. Discussion
¶ 12 The only issue before us is whether the district court abused
its discretion by denying the Tracys’ request for an award of the
costs of the letters of credit. We conclude that it did because it
erroneously viewed any such costs to be outside the scope of
1 The previous judge had retired in the interim.
6
appellate costs recoverable under C.A.R. 39(c)(1)(C) as a matter of
law.
A. Standard of Review
¶ 13 “As a general matter, we review a court’s award of costs for an
abuse of discretion. But we review the district court’s legal
conclusions forming the basis for that decision de novo.” Far
Horizons Farm, LLC v. Flying Dutchman Condo. Ass’n, 2023 COA 99,
¶ 34 (citation omitted).
¶ 14 The issue the Tracys raise and we address — whether the
reasonable cost of a letter of credit provided in lieu of a supersedeas
bond pending appeal is recoverable under C.A.R. 39(c)(1)(C) — is
one of law. So if we conclude that the district court erred by ruling
that such costs can’t be recovered, it necessarily follows that the
court abused its discretion. See Far Horizons Farm, ¶ 34; Belinda
A. Begley & Robert K. Hirsch Revocable Tr. v. Ireson,
2020 COA 157,
¶ 62 (a court abuses its discretion if it “misapplies or misconstrues
the law”).
B. Analysis
¶ 15 The Tracys’ contention on appeal requires us to construe court
rules of appellate and civil procedure. We construe such rules by
7
applying settled rules of statutory construction. Schaden v. DIA
Brewing Co., 2021 CO 4M, ¶ 32. This means we begin by looking at
the plain and ordinary meanings of the words and phrases used
therein. Krol v. CF & I Steel,
2013 COA 32, ¶ 15; see Schaden, ¶ 32.
But we don’t undertake such an assessment in a vacuum; rather,
we must read the rules as a whole, considering the relevant context.
Krol, ¶ 15. And, just as with statutes, we must give consistent,
harmonious, and sensible effect to all the relevant rules’ parts,
taking care to avoid constructions that would render any part
thereof superfluous or lead to illogical or absurd results. Schaden,
¶ 32; accord Brown v. Walker Com., Inc.,
2022 CO 57, ¶ 15.
¶ 16 When construing the court rules at issue, a couple of other
guiding principles come into play. We must construe the rules of
civil procedure “liberally to effectuate their objective to secure the
just, speedy, and inexpensive determination of every case and their
truth-seeking purpose.” Schaden, ¶ 33 (quoting DCP Midstream, LP
v. Anadarko Petroleum Co.,
2013 CO 36, ¶ 24); see C.R.C.P. 1(a).
And, where the rules are patterned after or otherwise similar to
federal rules, we may look to the federal rules and to decisions
8
construing those rules for guidance. Schaden, ¶ 33; accord Brown,
¶ 15; Garrigan v. Bowen, 243 P.3d 231, 235 (Colo. 2010).
¶ 17 We start, then, as we must, with C.A.R. 39(c), which governs
“Costs on Appeal Taxable in the Trial Court.” Subsection (c)(1)(C) of
that rule provides that “premiums paid for a supersedeas or other
bond to preserve rights pending appeal” “are taxable in the trial
court for the benefit of the party entitled to costs under this rule.”
An appellant who is successful on appeal is such a party. C.A.R.
39(a)(3).
¶ 18 The Tracys didn’t post a supersedeas bond. But were the fees
paid for the letters of credit “premiums paid for . . . other bond[s] to
preserve rights pending appeal”? The district court thought not,
equating the fees for letters of credit with “borrowing expenses for
lines of credit used to secure the letters of credit” or “expenses
associated with obtaining a loan to secure a letter of credit.” We
disagree with the district court’s analysis and conclusion.
¶ 19 A “premium” is commonly understood as the cost of
purchasing “insurance,” Merriam-Webster Dictionary,
https://perma.cc/YHQ9-ECXR (defining “premium”), or “coverage
by contract whereby one party undertakes to indemnify or
9
guarantee another against loss by a specified contingency or peril,”
Merriam-Webster Dictionary, https://perma.cc/HMQ3-TB78
(defining “insurance”). A fee paid for a letter of credit to secure
payment of a judgment pending appeal is, in essence, a “premium”
because it is the cost of a guarantee of payment by a third party of
a potential loss occasioned by a specified contingency — affirmance
of the judgment on appeal.
¶ 20 And, though C.A.R. 39 doesn’t provide any direct guidance on
what its reference to “other bond” means, it does provide some
indirect guidance. An “other bond” is a bond given “to preserve
rights pending appeal.” C.A.R. 39(c)(1)(C). Certainly the letters of
credit in this case were delivered to preserve the Tracys’ rights
pending appeal.
¶ 21 But we don’t need to hang our hat solely on the language of
C.A.R. 39(c)(1)(C) because C.R.C.P. 121, section 1-23 removes all
doubt. That rule, entitled “BONDS IN CIVIL ACTIONS,” expressly
provides that “[l]etters of credit issued by a bank chartered by either
the United States government or the State of Colorado” are “bonds”
that are effective upon approval by the court, and that “[t]he term
‘bond’ as used in this rule includes any type of security provided to
10
stay enforcement of a money judgment.” C.R.C.P. 121, § 1-23(2)(a),
(9).
¶ 22 Therefore, C.A.R. 39(c)(1)(C) and C.R.C.P. 121, section 1-
23(2)(a) and (9), considered together, make plain 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). It follows that a successful appellant may recover
the reasonable fee for such a bond.2
¶ 23 Federal case law applying Fed. R. App. P. 39 — the federal
analogue to C.A.R. 39 — generally supports this conclusion. See,
e.g., Trans World Airlines, Inc. v. Hughes, 515 F.2d 173, 175, 177
(2d Cir. 1975) (approving the district court’s award of the fee for a
letter of credit partially securing a judgment pending appeal); Smart
Mktg. Grp., Inc. v. Publ’ns Int’l, Ltd., No. 04-cv-0146,
2011 WL
1897214 (N.D. Ill. May 17, 2011) (unpublished opinion); Johnson v.
2 At oral argument, the Surofcheks’ counsel expressly conceded that
the district court erred by concluding that, as a matter of law, the
fee for a letter of credit delivered in lieu of a supersedeas bond can’t
be recovered as a cost of appeal under C.A.R. 39(c). Counsel sought
affirmance of the order on the basis that the second judge was
merely exercising her discretion when denying recovery of this cost,
an argument we reject below.
11
Pac. Lighting Land Co., 878 F.2d 297, 298 (9th Cir. 1989) (“Where a
letter of credit has been used and the total cost has been no greater
than a supersedeas bond without collateral, the charge for the letter
of credit has been treated as the equivalent of premiums paid for
the cost of a supersedeas bond.”).3 Decisions of state courts do too.
3 Some federal and state court cases, some of which the Tracys and
Surofcheks rely on, have drawn a distinction between the cost of a
letter of credit that is itself provided in lieu of a supersedeas bond
— which, if comparable to the cost of a supersedeas bond, is
recoverable — and the cost of a letter of credit that is obtained to
secure a supersedeas bond or a loan obtained to pay for a
supersedeas bond. See Republic Tobacco Co. v. N. Atl. Trading Co.,
481 F.3d 442, 445, 449-50 (7th Cir. 2007) (affirming award of costs
to obtain a loan of funds that were used to secure a judgment in
lieu of a supersedeas bond); Johnson v. Pac. Lighting Land Co.,
878
F.2d 297, 297-98 (9th Cir. 1989); Lerman v. Flynt Distrib. Co.,
789
F.2d 164, 165-67 (2d Cir. 1986) (interest charges incurred in
borrowing money used as collateral to secure a supersedeas bond
not recoverable); Hynix Semiconductor Inc. v. Rambus Inc., No. C-00-
20905-RMW,
2012 WL 95417, at *5-6 (N.D. Cal. Jan. 11, 2012)
(unpublished order); Klapmeier v. Cirrus Indus., Inc.,
900 N.W.2d
386, 393-96 (Minn. 2017). But see Bose Corp. v. Consumers Union
of U.S., Inc.,
806 F.2d 304, 304-05 (1st Cir. 1986) (per curiam)
(affirming an award of the cost of a letter of credit securing a
supersedeas bond because “there [was] no suggestion that the
charge for the letter of credit was either unreasonable or resulted in
any greater total cost than a supersedeas bond without supporting
collateral”); N. Pointe Ins. Co. v. Steward,
697 N.W.2d 173, 177-80
(Mich. Ct. App. 2005) (same). We don’t need to address that
distinction in this case because the Tracys’ letters of credit directly
secured the judgment, taking the place of a supersedeas bond.
12
E.g., Whittle v. Seehusen, 748 P.2d 1382, 1388 (Idaho Ct. App.
1987).
¶ 24 Unlike the district court, we also see significant differences
between a fee paid for a letter of credit used to secure a judgment
pending appeal and borrowing costs of an ordinary loan. With such
a letter of credit, the fee is paid regardless of whether the letter of
credit is ever drawn on, just like a premium paid for a supersedeas
bond. With an ordinary loan, however, the funds are necessarily
disbursed to the borrower, so the cost of obtaining the loan is in all
events the cost (or part of the cost) of actually receiving funds.4
Also, the letter of credit is payable directly to the judgment creditor
by the issuer of the letter, guaranteeing payment to the judgment
creditor; a loan to a judgment debtor doesn’t share these attributes.
See Centrifugal Casting Mach. Co. v. Am. Bank & Tr. Co.,
966 F.2d
1348, 1351-52 (10th Cir. 1992) (explaining how letters of credit
work).
4 We recognize that if the letter of credit is drawn on, the amount
taken becomes a loan. But that doesn’t happen, of course, when
the judgment is reversed on appeal.
13
¶ 25 All this isn’t to say that any cost associated with a letter of
credit that has some connection to securing a judgment is
necessarily recoverable. (This case doesn’t call for us to set limits
governing all such situations.) But it is to say that the reasonable
cost of a letter of credit itself used in lieu of a supersedeas bond to
secure a judgment is recoverable.
¶ 26 We aren’t persuaded to reach a different conclusion by the
Surofcheks’ arguments for affirmance.
¶ 27 First, contrary to the Surofcheks’ argument, the law of the
case doctrine didn’t require the second judge to adhere to the first
judge’s ruling. “Under the law of the case doctrine, ‘prior relevant
rulings made in the same case are to be followed unless such
application would result in error or unless the ruling is no longer
sound due to changed conditions.’” San Antonio, Los Pinos &
Conejos River Acequia Preservation Ass’n v. Special Improvement
Dist. No. 1, 2015 CO 52, ¶ 31 (emphasis added) (quoting People v.
Dunlap,
975 P.2d 723, 758 (Colo. 1999)). And the law of the case
doctrine doesn’t “prevent[] a trial court from clarifying or even
14
revisiting its prior rulings.” Stockdale v. Ellsworth, 2017 CO 109,
¶ 37 (quoting In re Bass,
142 P.3d 1259, 1263 (Colo. 2006)).5
¶ 28 Thus, the second judge wasn’t bound by the first judge’s
ruling. Indeed, by adhering to that ruling, the second judge in
essence repeated the first judge’s legal error. Far from being
required to adhere to the first judge’s ruling, the second judge was
actually obliged not to adhere to it because it was inconsistent with
the applicable rules.6
¶ 29 Second, we reject the Surofcheks’ invitation to affirm on the
ground the district court had discretion to deny the Tracys’ request
for the costs of the letters of credit. The district court denied the
request only because it accepted the first judge’s view that such
expenses aren’t recoverable as a matter of law. Nothing in the
record suggests that it would have denied the request had it
5 Of course, the law of the case doctrine wouldn’t bind us to follow
the first judge’s ruling in any event.
6 We don’t intend any disrespect to the trial judges in this case,
neither of whom had the benefit of this opinion when they ruled.
15
recognized that such expenses, if reasonable, are recoverable.7
Moreover, because, as we have held, reasonable premiums paid to
purchase a letter of credit to preserve a judgment debtor’s rights are
“taxable” under C.A.R. 39(c)(1)(C), a court would have to be
confronted with extraordinary circumstances to deny such a
request entirely.
¶ 30 For their part, the Tracys ask us to direct the district court to
award them the entirety of the costs of the letters of credit. We
decline the invitation. The district court hasn’t yet ruled on the
reasonableness of these expenses. See Valentine v. Mountain States
Mut. Cas. Co., 252 P.3d 1182, 1186-87 (Colo. App. 2011) (a trial
court has discretion over the amount of costs to award; such
amount should be reasonable). And the Surofcheks challenged the
reasonableness of the expenses on nonfrivolous bases — i.e., that
the letters of credit secured the entirety of the judgment even
7 The Surofcheks’ reliance on Catlin v. Tormey Bewley Corp.,
219
P.3d 407 (Colo. App. 2009), is misplaced. That case didn’t involve
costs awardable under C.A.R. 39(c)(1)(C) for bonds used to secure a
judgment. Rather, it concerned claimed costs to finance litigation
(interest on loans), which the prevailing party sought to recover
under section 13-16-122, C.R.S. 2024. (The division held that such
costs aren’t recoverable under that statute.)
16
though the Tracys appealed only a portion of the judgment and the
Tracys should have obtained multi-year letters of credit. Because
we are a court of review, not of first view, LTCPRO, LLC v. Johnson,
2024 COA 123, ¶ 46, we leave it to the district court to determine in
the first instance the reasonable amount awardable for these
expenses.8
III. Disposition
¶ 31 The order is reversed. We remand the case to the district
court to determine the reasonable amount of the costs of the letters
of credit that the Tracys delivered to secure the judgment. The
8 The Tracys assert that the Surofcheks waived any right to
challenge the reasonableness of the costs of the letters of credit
because they didn’t object to the Tracys providing the letters of
credit to secure the judgment within the time allowed by C.R.C.P.
121, section 1-23(6). But when the Tracys proposed using the
letters of credit as security for the judgment pending appeal, the
relevant issue from the Surofcheks’ point of view was whether those
letters of credit would adequately secure their judgment. The
recoverability of the costs associated with obtaining those letters of
credit wasn’t relevant to that issue and wasn’t before the court. The
time for objecting to those costs was when the Tracys sought to
recover them after the appeal. The Surofcheks timely did so.
Therefore, there was no waiver. See Mid-Century Ins. Co. v. HIVE
Constr., Inc., 2023 COA 25, ¶ 21 (“[G]iven that a waiver is an
intentional relinquishment of a known right, the circumstances
surrounding the alleged waiver matter.”) (cert. granted on other
grounds Feb. 5, 2024).
17
district court may, in its discretion, take additional evidence
bearing on that determination.
JUDGE BROWN and JUDGE YUN concur.
18
