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Cases of Note

Courts presume that the General Assembly is aware of court decisions that construe state statutes or the constitution. The OLLS will update this web page quarterly to notify the General Assembly of such court decisions. Cases that may be of particular interest because they meet certain criteria have been summarized and are listed below in chronological order. Summaries for cases older than a year are available in an archive.

 

 

People v. Salgado, Colorado Court of Appeals No. 18CA0885 (January 10, 2019)

Holding: The Colorado Court of Appeals reversed the Jefferson County District Court and held that: (1) An executive order does not expire when the term of the governor who issued it ends and instead remains in effect until it is revoked, modified, or superseded by subsequent legal authority; and (2) An executive order that merely instructs an executive branch agency to prosecute certain offenses already established in law is not a legislative act constituting an unconstitutional exercise of legislative power by the executive branch in violation of the principle of separation of powers set forth in article III of the Colorado constitution.

Case Summary: Section 24-31-101 (1)(a), C.R.S., requires the attorney general to "appear for the state and prosecute and defend all actions and proceedings, civil and criminal, in which the state is a party or is interested when required to do so by the governor ...." This statute grants the governor general authority to direct the attorney general to prosecute certain cases.

In 1987, Governor Roy Romer issued Executive Order No. D 0017 87 (executive order). The executive order has not been repealed, rescinded, or modified and it requires the attorney general, through the Medicaid fraud control unit (MFCU) of the office of the attorney general, to investigate and prosecute Medicaid fraud and patient abuse cases.

In December 2017, the attorney general, through the MCFU, filed a felony charge involving neglect of an at-risk adult against Jasmine Salgado, an employee of an assisted living facility, in Jefferson County District Court. The Jefferson county district attorney, who had previously determined that there was insufficient evidence to prosecute Salgado, filed a notice asserting that the attorney general did not have legal authority or jurisdiction to file and prosecute the case because: (1) The executive order was unconstitutional; and (2) Legislation had superseded the executive order.

The district court rejected the argument that legislation had superseded the executive order, but concluded that the executive order was unconstitutional because "a former governor cannot require the current attorney general to act" and because "reliance on the executive order to confer authority in 2018 would be an unconstitutional exercise of legislative power by the executive branch."The attorney general appealed to the Colorado Court of Appeals and Salgado responded.

The Colorado Court of Appeals reversed the district court, holding that the executive order had not expired and that it is not an unconstitutional legislative act. Citing case law from other jurisdictions, the court of appeals noted that the "general rule" is that "executive orders validly issued pursuant to legislative or constitutional grants of authority remain in effect until revoked, modified, or superseded by later authority, and remain in effect beyond the expiration of the term of the governor who issued them." Applying the general rule, the court then determined that neither the language of section 24-31-101 (1)(a), C.R.S., nor any other legal authority support a requirement that an executive order delegating prosecutorial authority to the attorney general include a "temporal and spatial framework" or a "conclusion that executive orders expire along with the term of the issuing governor" or "after the lapse of some undefined period deemed sufficient by a court." Observing that the power of the governor "vests in the office, not the individual person inhabiting the office at any given time" and that an executive order thus "is the mandate of the office of the Governor, not the individual holding the title," the court concluded that "an executive order remains in effect until modified, rescinded, or superseded, and it does not expire merely because the issuing governor is no longer in office." Finally, the court held that because the executive order merely instructs an executive branch agency to prosecute certain offenses already established in law, it is not a legislative act constituting an unconstitutional exercise of legislative power by the executive branch in violation of the principle of separation of powers set forth in article III of the Colorado constitution. (For more information, contact Jason Gelender.)

 

 

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. (For more information, contact Shelby Ross.)

 

 

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. (For more information, contact Shelby Ross.)

 

 

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. (For more information, contact Shelby Ross.)

 

 

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.  (For more information, contact Courtney McDonald.)

 

 

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. (For more information, contact Thomas Morris.)

 

 

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. (For more information, contact Shelby Ross.)

 

 

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. (For more information, contact Thomas Morris.)

 

 

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. (For more information, contact Jennifer Berman.)