Saying someone is "gay" is likely no longer defamatory. A recent case in New York held such. Colorado has no decision directly on point, but I would not imagine that your situation calls for a defamation claim.
It sounds like you would be better off spending your money on "hooked on phonics" or a literacy tutor.
I'm not sure what your compensation would be of you won the lawsuit. Seeing that there are no damages, your claim may not result in any compensation. I would recommend that you consult with an experienced Colorado attorney to review the details of your case and protect your rights. I hope you found my response helpful.
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