Court Opinion

ID: 4086127
Source: CourtListenerOpinion
Date Created: 2016-10-08 00:05:27.938716+00
Date Added: 2024-06-11T07:45:24.257219
License: Public Domain

COLORADO COURT OF APPEALS                                         2016COA139

Court of Appeals No. 15CA1462
Baca County District Court No. 13CR12
Honorable Stanley A. Brinkley, Judge

The People of the State of Colorado,

Plaintiff-Appellee,

v.

Curtis Lynn Foos,

Defendant-Appellant.

                              ORDER AFFIRMED

                                  Division I
                         Opinion by JUDGE FREYRE
                       Taubman and Plank*, JJ., concur

                        Announced September 22, 2016

Cynthia H. Coffman, Attorney General, Joseph G. Michaels, Assistant Attorney
General, Denver, Colorado, for Plaintiff-Appellee

Law Offices of Les S. Downs, Les S. Downs, Trinidad, Colorado, for Defendant-
Appellant

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2016.
¶1    Defendant, Curtis Lynn Foos, appeals the district court’s

 restitution order. We affirm.

                         I.      Background

¶2    In 2011, Foos filed for bankruptcy. The United States

 Bankruptcy Court entered an order of discharge resulting in a

 complete discharge of Foos’ debts.

¶3    In 2013, Foos was charged with two counts of felony theft and

 one count of defrauding a secured creditor. Prior to his bankruptcy

 proceedings, Foos owed money to the victims identified in each of

 the three counts.

¶4    The district attorney who brought the charges was later

 recused from the case because her husband’s company was a

 creditor in the Foos bankruptcy proceeding, as were the three

 alleged victims in the criminal complaint. The court appointed a

 special prosecutor from another judicial district who elected to

 move forward with the charges.

¶5    After the appointment of the special prosecutor, Foos pleaded

 guilty to the charge of defrauding a secured creditor in exchange for

 the prosecution dismissing the two counts of felony theft. The

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 parties stipulated to a three-year deferred judgment and sentence

 with a requirement for full restitution. After a hearing, the district

 court ordered Foos to pay restitution of $58,047.13 to Perry

 Huffman.

                      II.     Restitution Order

¶6    Foos contends that the district court erred in ordering him to

 pay restitution for three reasons: (1) Foos had previously discharged

 his debt to Huffman in bankruptcy; (2) Foos was prosecuted in bad

 faith; and (3) Foos was ordered to pay restitution for a count to

 which he did not plead guilty. We disagree.

                        A.   Standard of Review

¶7    The trial court has broad discretion in setting the terms and

 conditions of restitution, and, absent a showing that the court

 abused its discretion by misconstruing or misapplying the law, we

 will not disturb its ruling. People v. Reyes, 166 P.3d 301, 302

 (Colo. App. 2007).

                 B.   Timing of Bankruptcy Discharge

¶8    Foos contends that the district court erred in ordering him to

 pay restitution because he discharged his debts through

 bankruptcy prior to charges being filed against him.

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                           1.   Applicable Law

¶9     Colorado’s restitution statute expressly states that restitution

  orders are not dischargeable in bankruptcy. § 18-1.3-603(4)(d),

  C.R.S. 2015 (“Any order of restitution imposed shall be considered a

  debt for ‘willful and malicious’ injury for purposes of exceptions to

  discharge in bankruptcy as provided in 11 U.S.C. sec. 523.”).

¶ 10   Our supreme court has also held that “[t]he fact that the

  defendant’s personal liability . . . was discharged in the United

  States Bankruptcy Court does not preclude restitution.” People v.

  Milne, 690 P.2d 829, 837 (Colo. 1984). The defendant in Milne was

  unable to repay investment notes, declared bankruptcy, and had

  his liability to the holders of the notes discharged. Id. at 832. He

  was later charged and convicted of selling securities without a

  license. Id. at 833. Our supreme court concluded that the district

  court did not err in ordering the defendant to pay restitution to the

  unpaid noteholders as a condition of his probation. Id. at 838.

¶ 11   In reaching this conclusion, the court explained the differing

  goals behind the restitution and bankruptcy statutes. Id. at 837.

  “An order requiring the payment of restitution as a condition of

  probation is as much a part of a criminal sentence as a fine or other

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  penalty.” Id. As such, “[r]estitution does not create a debt or a

  debtor-creditor relationship between the defendant and the victim,

  and it is not intended as a substitute for a civil action for damages.”

  Id. In contrast, the bankruptcy laws “are designed to provide

  financial relief to overly extended debtors.” Id. A discharge in

  bankruptcy insulates “a debtor from liability on any civil claim for

  payment arising out of the discharged debt.” Id. Accordingly, the

  supreme court concluded that “[i]nasmuch as the bankruptcy laws

  are not intended to relieve a defendant from the legal consequences

  of a criminal conviction, monetary penalties imposed for the

  violation of criminal laws . . . are not dischargeable in bankruptcy.”

  Id.

¶ 12    The supreme court also specifically addressed the “validity of

  an order of restitution following a discharge in bankruptcy[.]” Id.

  The court relied on a Fifth Circuit Court of Appeals case which held

  that the discharge of a defendant’s debt did not prohibit the district

  court from subsequently conditioning the defendant’s probation on

  the payment of restitution. Id. (citing United States v. Carson, 669

  F.2d 216, 218 (5th Cir. 1982)). Based on Carson, the supreme

  court held that the district court did not err in ordering the

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  defendant to pay restitution as a condition of his probation, despite

  the fact that his liability to the holders of the notes had previously

  been discharged. Id. at 838.

¶ 13   Our supreme court’s holding in Milne is consistent with the

  United States Supreme Court’s holding in Kelly v. Robinson, 479

  U.S. 36, 50 (1986), where a criminal defendant sought to discharge

  the restitution order in her criminal case in a Chapter 7 bankruptcy

  proceeding. The Supreme Court held that “any condition a state

  criminal court imposes as part of a criminal sentence” is not

  dischargeable in bankruptcy proceedings. Id.

                             2.   Application

¶ 14   Foos acknowledges that § 18-1.3-603(4)(d) precludes the

  discharge of a restitution order in bankruptcy proceedings. He

  argues that the statute does not apply, however, because he

  discharged his debt before criminal charges were filed against him,

  and because he is not seeking discharge of a restitution order in

  bankruptcy proceedings. He also argues that Milne does not apply

  because it was decided before the General Assembly enacted § 18-

  1.3-603. However, because the restitution statute does not conflict

  with the holding in Milne, we have no reason to believe that the

                                     5
  General Assembly intended to overturn Milne and conclude that we

  are bound by its holding in resolving this case. See People v.

  McCullough, 6 P.3d 774, 778 (Colo. 2000) (“[W]e assume that the

  General Assembly was apprised of existing case law.”).

¶ 15   The facts of this case are analogous to those in Milne. In

  2012, the United States Bankruptcy Court discharged Foos’ debt

  against the three victims in this case. The following year, Foos was

  charged with three felony counts. In 2015, Foos resolved these

  counts by pleading guilty to one count of defrauding a secured

  creditor. As part of his sentence, Foos was ordered to pay

  restitution.

¶ 16   As the supreme court held in Milne, it is proper for a court to

  issue “an order of restitution following a discharge in bankruptcy[.]”

  Milne, 690 P.2d at 837. Restitution is part of a criminal sentence

  and does not create a debtor-creditor relationship between the

  defendant and the victim. Id. Because restitution serves a different

  purpose than bankruptcy, the district court’s ability to order Foos

  to pay restitution as part of his sentence was not altered by the

  bankruptcy court discharging the debt Foos owed to his creditors.

                                    6
  See id. Accordingly, the district court did not err in ordering Foos

  to pay restitution.

                        C.   Bad Faith Prosecution

¶ 17    Foos next contends that he should not have been ordered to

  pay restitution because the charges against him were brought in

  bad faith.

¶ 18    In making this argument, Foos relies on language from In re

  Williams, 438 B.R. 679, 692 (B.A.P. 10th Cir. 2010), in which the

  court discussed the possibility of “criminal prosecution in bad faith

  in order to ‘coerce’ the payment of a discharged debt.” The court

  explained that “a ‘cozy relationship’ between the creditor and the

  prosecutor might indicate that the motive of the prosecutor is solely

  to benefit the creditor, and not to vindicate the public interest.” Id.

  at 693. In such a scenario, “a debtor might be able to state a cause

  of action to enjoin the proceeding as a violation of the discharge[.]”

  Id.

¶ 19    We reject Foos’ argument because the facts in this case differ

  from the hypothetical described in Williams. While it is undisputed

  that the original prosecutor had a “cozy relationship” with Foos’

  creditors, the court replaced her with a special prosecutor who had

                                     7
  no personal connection to the case. The special prosecutor’s

  independent decision to move forward with the case demonstrates

  that the charges were not brought “in bad faith in order to ‘coerce’

  the payment of a discharged debt.” See id. at 692.

¶ 20   Additionally, Foos waived his right to challenge the validity of

  the charges by pleading guilty. See People v. Madrid, 908 P.2d

  1167, 1169 (Colo. App. 1995) (“A plea of guilty is a judicial

  admission of the offense and its elements and it also constitutes the

  waiver of substantial constitutional rights.”) (citation omitted). Foos

  did not argue before the district court and does not argue now that

  his plea was not knowing, intelligent, and voluntary. Accordingly,

  Foos cannot demonstrate that the prosecution was baseless

  because he admitted to committing the offense by pleading guilty.

  See id.

                        D.    Dismissed Charges

¶ 21   Foos contends that he should not have been ordered to pay

  restitution to Huffman because Huffman was listed as a victim in

  one of the theft counts that was dismissed as part of his plea

  agreement. While Foos does not fully develop this argument on

  appeal, his argument is clearly contrary to Colorado case law,

                                     8
  which holds that a victim, for purposes of restitution, does not have

  to be one of the named victims of a conviction. See People v.

  Borquez, 814 P.2d 382, 384 (Colo. 1991) (“[A] criminal conviction

  establishing the defendant’s culpability is not required in order to

  impose restitution.”); see also People v. Ortiz, 2016 COA 58, ¶ 16

  (same); People v. Daly, 313 P.3d 571, 577 (Colo. App. 2011) (“[A]

  restitution order may properly include losses a victim incurred

  resulting from a defendant’s uncharged acts.”).

                          III.    Conclusion

¶ 22   The order of the district court is affirmed.

       JUDGE TAUBMAN and JUDGE PLANK concur.

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