Cases of Note Archive 2018

People v. Taylor, Colorado Court of Appeals No. 17CA0280 (December 13, 2018)

Holding: Crim. P. 35(c)(3)(VII) supersedes prior case law, which states that a defendant can file a second Crim. P. 35(c) motion raising new postconviction claims if the defendant filed an initial Crim. P. 35(c) motion pro se.

Case Summary: This case involves a postconviction review of a defendant's case. Defendants can file for postconviction relief under Crim. P. 35. Crim. P. 35 sets the procedures, rules, and matters that can be heard in postconviction motion. Prior to 2004, if a defendant filed a 35(c) motion pro se, the defendant could file a second 35(c) motion raising new postconviction claims. In 2004, Crim. P. 35(c)(3)(VII) was adopted which requires a court to deny any claim that could have been presented in an appeal or postconviction proceeding previously brought, with five exceptions. The exceptions do not give a defendant the option to file a second 35(c) motion if the defendant filed the initial 35(c) motion pro se.

Defendant filed a pro se 35(c) motion raising seven claims. The postconviction court denied defendant's 35(c) motion. Defendant then filed a second pro se 35(c) motion, in which he renewed some of the claims from his first motion and raised new claims. The postconviction court held that the duplicative claims from defendant's initial 35(c) motion were barred as successive under Crim. P. 35(c)(3)(VI). However, the postconviction court did not consider the new claims as successive and denied them on the merits. The postconviction court's ruling was appealed. The court of appeals reversed. The court of appeals found that  Crim. P. 35 (c)(3)(VII) supersedes prior case law holding that a defendant can raise new postconviction claims in a second 35(c) motion if the first 35(c) motion was filed pro se.

Cowen v. People, Colorado Supreme Court No. 16SC952 (December 10, 2018)

Holding: A trial court may not impose restitution for pecuniary losses caused by acquitted conduct.

Case Summary: The defendant wrote two checks from his company's bank account to a repair shop for maintenance and repair of his semitruck. The defendant's bank account contained insufficient funds to cover the checks. The defendant was charged with two counts of fraud by check - one count for each check. The defendant admitted that he knew there were insufficient funds to cover the checks when he wrote them. He asserted he did not intend to defraud the repair shop and that he intended to transfer money from another account and get a loan to cover the amounts of the checks. The jury convicted the defendant of the charge related to the first check, but acquitted him of the charge related to the second check. As part of the defendant's sentence, the trial court imposed restitution totaling the amount of both checks.

The defendant appealed the trial court's decision, arguing the restitution related to the second check is barred because he was acquitted on that charge. The court of appeals affirmed, holding that since the defendant was convicted of at least one charge, the trial court could impose restitution for the whole amount since the underlying conduct proximately caused the victim's loss. The supreme court reversed, stating that the plain meaning of section 18-1.3-603, C.R.S., requires a defendant be found guilty of a charge in order to impose restitution. Therefore, a trial court may not impose restitution for pecuniary losses caused by acquitted conduct. The supreme court also stated that it was specifically disapproving of any previous court of appeals opinions that are in conflict with the supreme court's opinion.

People v. Ray, Colorado Court of Appeals No. 16CA0444 (November 15, 2018)

Holding: The Judicial Department may collect interest payments on a monthly basis, rather than annually pursuant to the statutory direction to collect interest on restitution at the rate of twelve percent per annum.

Case Summary: In June 2015, the Judicial Department issued a press release announcing it would begin calculating and assessing 1% interest monthly on restitution balances to ensure consistent and accurate application of the law across the state after a 2014 State Audit report noted that most judicial districts had not assessed or collected any interest since the legislature had enacted the restitution statute. Defendant sued, claiming the Judicial Department did not have the statutory authority to charge monthly interest because the plain language of the statute said otherwise by using the term "per annum". The Court of Appeals held that, although the General Assembly did not define the term "per annum" and there was no legislative history to help ascertain when interest should be collected, others jurisdictions have interpreted similar language to be intended only as a measure of the rate with respect to time and does not require the payment of interest annually. Additionally, if the General Assembly intended to limit interest payments to an annual basis, it would have done so as it did in other statutes.

People v. Timoshchuk, COlorado Court of Appeals No. 17CA0259 (November 1, 2018)

Holding: The right to counsel, including effective assistance of counsel, applies to revocation hearings.

Case Summary: A permanent resident facing revocation of probation on felony charges was sentenced to three years in prison. As a result of his guilty plea and sentence upon revocation, he was no longer eligible to seek asylum in the U.S. He filed a 35(c) based on the fact that his attorney did not inform him of the certainty of this immigration consequence. The district court summarily denied the defendant's motion for postconviction relief.

The court of appeals reversed the district court's denial of the defendant's motion for postconviction relief without a hearing. The court of appeals concluded that the legislature has provided, in sections 16-7-206(1) and 16-7-207(1)(b), that probationers facing revocation have a statutory right to counsel, including effective assistance of counsel as tested by the standard set forth in Strickland v. Washington, 466 U.S. 668 (1984).

In re Heine, Colorado Court of Appeals No. 17CA1219 (November 1, 2018)

Holding: Retroactively assigning a child support obligation for the obligee when a voluntary change in parenting time occurs is affirmed, though the statute remains ambiguous. The district court did not make sufficient findings to support a determination of underemployment.

Case Summary: Mother and father of two children divorced in 2008. After multiple voluntary changes to parenting time, the district court determined that the mother owed retroactive child support, despite having been the obligee of the previous order. Section 14-10-122 (5) addresses changes in parenting time and the associated child support and was amended in 2013. But, those amendments did not resolve the ambiguity as to whether an obligee can retroactively be made an obligor. The court of appeals determined the legislative intent of the 2013 amendments was that an obligee can retroactively be made an obliger. This conclusion affirms the decision of the district court to retroactively grant the father child support from the mother.

In re Rooks, Colorado Supreme Court No. 16SC906 (October 29, 2018)

Holding: In dissolution proceedings, the couple's cryogenically frozen pre-embryos constitute marital property of a special character. Supreme Court developed a framework to balance the parties' interests regarding the disposition of a divorcing couple's cryogenically preserved pre-embryos. The consent referred to in section 19-4-106 (7)(b) refers to the former spouse's consent to legal parenthood, not to their consent to placement of a pre-embryo.

Case Summary: A divorcing couple turned to the court to resolve a dispute over the disposition of their cryogenically preserved pre-embryos. The wife wished to keep the pre-embryos for future in vitro fertilization (IVF). The husband wanted no more genetic children using the pre-embryos and wished to have them discarded. The trial court ruled that the husband's right not to be forced to become a genetic parent outweighed the wife's desire to possibly have more children and awarded the pre-embryos to him. The court of appeals determined that the trial court erred in inferring contract terms that were not explicitly stated in the couple's contracts with the IVF facility to inform their ruling, but concluded that the trial court properly exercised its discretion in balancing the parties' interests and awarding the pre-embryos to the husband.

The supreme court reversed the judgment of the court of appeals, holding that both the trial court and the court of appeals considered inappropriate factors in attempting to balance the parties' interests, and remanded the case back to the trial court. In the absence of legislation regarding the disposition of cryogenically preserved pre-embryos upon the dissolution of marriage, the supreme court provided the following framework for balancing the parties' interests: courts should first look to any existing agreement between the parties regarding the disposition of their remaining pre-embryos in the event of divorce. In the absence of any such agreement, the court should balance the parties' interests by considering the following: (1) how the party who wishes to preserve the pre-embryos intends to use them; (2) the demonstrated physical ability or inability of the party seeking to use the pre-embryos for IVF to have biological children through other means; (3) the parties' original reasons for undertaking IVF; (4) the potential hardship for the party that wishes to avoid becoming a genetic parent, including emotional, financial, or logistical factors; (5) either party's demonstrated bad faith or attempt to use the pre-embryos as unfair leverage in divorce proceedings; and (6) other factors relevant to the parties' specific situation. The court also held that the following considerations are inappropriate: (1) the ability of the party seeking to use the pre-embryos to afford a child, (2) standing alone, the number of a party's existing children, and (3) the party seeking to use the pre-embryos' ability to adopt or otherwise parent non-biological children.

Lewis v. Taylor, Colorado Supreme Court No. 17SC241 (September 17, 2018)

Holding: The time value of money does not constitute reasonably equivalent value in an equity-type Ponzi scheme.

Case Summary: Taylor invested money in a Ponzi scheme run by Mueller. Their agreement did not provide any guaranteed rate of return or interest; rather, Taylor was to receive merely a portion of whatever profits might accrue. Taylor received several transfers of "profits" (in reality, merely subsequent investors' principal) from Mueller and later withdrew his entire principal, plus nearly half a million dollars profit. Then the enterprise was exposed as a scam. The trial court appointed Lewis as receiver, who sued to void the profit portion of the transfers to Taylor in order to return the money to investors who lost all of their principal.

Taylor argued that, under the "Colorado Uniform Fraudulent Transfer Act" (CUFTA), he had given "reasonably equivalent value" to Mueller in the form of the time-value of the invested money, and therefore the transfers to him were not voidable. The trial court held for the receiver, and the court of appeals reversed.

The supreme court reversed again, observing that this is an issue of first impression in Colorado. The supreme court found that under CUFTA, the time value of money does not constitute reasonably equivalent value in an equity-type Ponzi scheme. The court contrasted a Ponzi scheme in which an investor has been guaranteed a minimum rate of return or interest; in these situations, a transfer of "profits" or interest satisfies an antecedent debt, which makes the investment of principal a reasonably equivalent value. In these types of Ponzi schemes, a transfer of "profits" or interest is a dollar-for-dollar forgiveness of a contractual debt; such transfers are not voidable. But in an equity-type Ponzi scheme, the innocent investor who profits can point to nothing under CUFTA that ties the false profit to "value" that was provided to the debtor. Because Taylor did not provide any reasonably equivalent value, Mueller's transfers to him of "profits" were voidable.

People v. Ramirez, Colorado Court of Appeals No. 16CA1298 (September 6, 2018)

Holding: Semen does not constitute an "intimate part", defined in § 18-3-401 (2), for the purposes of establishing "sexual contact", defined in § 18-3-401 (4).

Case Summary: Defendant was convicted of sexual assault on a child (SAOC), sexual assault on a child by one in a position of trust (SAOC-POT), and indecent exposure, based on testimony that defendant ejaculated into the hands of his foster children and then required the children to swallow the semen. To commit the crimes of SAOC and SAOC-POT, the defendant must have "sexual contact" with a child, which requires the knowing touching of the actor's or victim's "intimate parts". The term "intimate parts" is defined as "the external genitalia or the perineum or the anus or the buttocks or the pubes or the breast of any person." The Court of Appeals, applying the plain language of the statute, vacated the defendant's convictions for SAOC and SAOC-POT and held that semen does not constitute an "intimate part" of the defendant's body.

Gessler v. Smith, Colorado Supreme Court No. 15SC462 (June 4, 2018)

Holding: The Colorado Supreme Court held that relevant jurisdictional language in article XXIX, section 5 of the state constitution (Amendment 41) authorizes the Independent Ethics Commission (IEC) "to hear complaints involving ethical standards of conduct relating to activities that could allow covered individuals, including elected officials, to improperly benefit financially from their public employment." The court also held that the public trust statute, section 24-18-103, C.R.S., establishes such an ethical standard of conduct and that the IEC therefore has jurisdiction over complaints alleging violations of the public trust. The IEC therefore had jurisdiction over a complaint alleging that former Secretary of State Scott Gessler (Gessler) had misappropriated state funds for personal or political uses.

Case Summary: Section 24-9-105 (1)(d), C.R.S., provides the Secretary of State a $5,000 discretionary account "for expenditure in pursuance of official business ...." Gessler used money in the discretionary account to travel to Florida to attend both an election law seminar hosted by the Republican National Lawyers Association and the Republican national convention. Colorado Ethics Watch filed a complaint with the IEC, alleging that Gessler had misappropriated state funds for personal or political uses and made false statements on expense reimbursement requests. After an investigation, the IEC set a hearing on the complaint and issued a prehearing order that listed potentially applicable standards of conduct or reporting requirements and reserved the right of the IEC to consider additional standards of conduct and reporting requirements based on the evidence presented and arguments made at the hearing. After the hearing, the IEC found that the use of the money in the discretionary account to travel to and attend the seminar and convention was primarily for partisan, and therefore personal, purposes and that it therefore (1) violated the ethical standard of conduct in section 24-9-105, C.R.S., that money in the account only be used for official business; and (2) was a breach of the public trust under section 24-18-103, C.R.S., which states that "the holding of public office or employment is a public trust" and requires a public officer or employee to "carry out his duties for the benefit of the people of the state."

Gessler sought judicial review, claiming that the IEC had exceeded its jurisdiction in considering the complaint, that its fact findings were arbitrary and capricious, and that it had violated his rights to due process, free speech, and assembly. The district court rejected the claims and affirmed the IEC's decision. Gessler then appealed, arguing that the IEC lacked jurisdiction over the complaint because section 5 of Amendment 41 should be construed to limit the IEC's jurisdiction to matters involving gifts, influence peddling, and standards of conduct and reporting requirements that expressly delegate enforcement to the IEC. The Court of Appeals affirmed the district court's decision, and the Colorado Supreme Court agreed to review that decision to determine whether: (1) the IEC had jurisdiction under the phrase "any other standards of conduct" in section 5 of article 41 to penalize any public employee for violating any Colorado law; (2) the phrase "other standards of conduct" is unconstitutionally vague; and (3) procedural due process requires pre-hearing notice to explain how laws are violated or may simply list laws and reserve the right to add charges after the hearing.

The Colorado Supreme Court first determined that "the overarching focus of [Amendment 41] is the regulation of activities that allowed covered individuals working in government, including elected officials, to gain improper personal financial benefit through their public employment." In light of this "overarching focus", the supreme court concluded that: (1) section 5 of Amendment 41, which authorizes the IEC to hear complaints under "any other standards of conduct...as provided by law," must be construed as granting the IEC jurisdiction over complaints of violations of "ethical standards of conduct that could allow covered individuals to improperly benefit financially from their public employment;" (2) "as provided by law" refers to laws already in existence; and (3) section 24-18-103, C.R.S, which establishes that the holding of office or employment is a public trust and that a public official shall carry out his duties for the benefit of the people of the state, establishes an ethical standard of conduct subject to the IEC's jurisdiction. Therefore, because the allegations against Gessler clearly implicated the public trust standard, the complaint fell within the IEC's jurisdiction, which is not limited to matters involving gifts, influence peddling, and standards of conduct and reporting requirements that expressly delegate enforcement to the IEC. Because the supreme court concluded that the IEC's jurisdiction over the case was proper and the allegations against the Secretary were within the scope of the IEC's jurisdiction, the court rejected Gessler's vagueness challenge. Finally, the supreme court rejected the Secretary's procedural due process claim because he failed to demonstrate that he suffered any prejudice as a result of the allegedly deficient notice.

Guarantee Trust Life Ins. Co. v. Estate of Casper, Colorado Supreme Court No. 17SC2 (May 29, 2018)

Holding: The statute that limits the survivability of a claim for punitive damages or penalties applies only after the death of the person against whom the punitive damages or penalties are claimed.

Case Summary: The plaintiff, Casper, sued his insurance company for the unreasonable delay or denial of insurance benefits. The jury awarded him compensatory and punitive damages. Casper died before the court entered a written and signed order, which also included an award of Casper's attorney fees and costs in the judgment. The insurance company argued that the attorney fees and costs could not be included in the computation of punitive damages and that the punitive damages claim did not survive Casper's death. The trial judge disagreed; the insurance company appealed, and the court of appeals affirmed. The insurance company sought review in the supreme court.

Previous case law, Kruse v. McKenna, 178 P.3d 1198 (Colo. 2008), held that the determination of whether a claim is assignable depends upon whether it survives the death of the person originally entitled to assert the claim. Kruse therefore intimated that the survival statute's limitation on penalties and punitive damages applies when either party dies. But the Supreme Court in Casper held that Kruse effectively ignored the plain meaning of survival statute's text, which states that punitive damages and penalties are only not available after the death of the person "against whom such punitive damages or penalties are claimed". Because it was the insurance company against whom the punitive damages were claimed but it was Casper who died, the survival statute did not apply, and to the extent that the Kruse decision failed to give meaning to the plain language of the survival statute, that decision was overruled.

Maralex Res., Inc. v. Colo. Oil and Gas Conservation Comm’n, Colorado Court of Appeals No. 17CA0051 (March 22, 2018)

Holding: The court of appeals upheld the district court's determination that the Colorado oil and gas conservation commission's (COGCC) rule authorizing COGCC staff to inspect oil and gas properties without a warrant met the administrative search exemption to the constitutional warrant requirement.

Case Summary: The COGCC obtained and executed a warrant to search two oil and gas locations and, two weeks later, reinspected the locations without a warrant. The inspections revealed a number of violations of the COGCC's rules, and the COGCC issued an order finding violation against the oil and gas operator. The oil and gas operator and the surface property owner sought judicial review in district court, asserting a facial challenge to the constitutionality of the COGCC's rule authorizing warrantless searches as a violation of the constitutional protections against unreasonable searches and seizures. The district court concluded that the inspection rule did not violate either the United States or the Colorado Constitution.

The court of appeals analyzed whether the COGCC's inspection rule met the administrative search exception to the constitutional warrant requirement. Applying a three-part test, the court of appeals determined that the COGCC's regulatory scheme provided a "constitutionally adequate substitute for a warrant" based on findings that: (1) Oil and gas development is a closely regulated industry; (2) a requirement that the COGCC obtain a warrant for every inspection performed would frustrate the state's substantial interest in regulating oil and gas development; and (3) the COGCC enforced its inspection rule with sufficient certainty and regularity that members of the regulated community had a reduced expectation of privacy in the commercial premises inspected. The court of appeals concluded that the COGCC's inspection rule met the administrative search exemption to the constitutional warrant requirement.

The court of appeals also reviewed the surface property owner's separate constitutional challenge to the COGCC's inspection rule on grounds that the rule as applied to the surface property owner violated the constitutional warrant requirement and constituted a governmental taking. The court of appeals rejected the as-applied challenge to the warrantless search because the surface property owner did not have a reasonable expectation of privacy in the property where the surface property owner granted the operator an unlimited easement to the surface estate. The court declined to address the surface property owner's takings claim because it was raised in a perfunctory manner.