Court Opinion

ID: 4342336
Source: CourtListenerOpinion
Date Created: 2018-11-16 17:09:46.539032+00
Date Added: 2024-06-11T14:48:59.990559
License: Public Domain

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
                                                          November 15, 2018

                               2018COA158

No. 16CA0444, People v. Ray — Criminal Law — Sentencing —
Restitution — Assessment of Restitution

     A division of the court of appeals considers whether the plain

language of the restitution statute in effect at the time of the trial

court’s order in this case, section 18-1.3-603(4)(b)(I), C.R.S. 2012,

prohibits the Colorado Judicial Department from charging criminal

defendants 1% interest per month on their restitution obligations

because the statute provides that a defendant owes post-judgment

interest “from the date of the entry of the order at the rate of twelve

percent per annum.” (Emphasis added.)

     The division determines that the statute is ambiguous, but

nevertheless concludes that the Judicial Department did not violate

the statute.
COLORADO COURT OF APPEALS                                      2018COA158

Court of Appeals No. 16CA0444
El Paso County District Court No. 09CR254
Honorable Robert L. Lowrey, Judge

The People of the State of Colorado,

Plaintiff-Appellee,

v.

Matthew James Ray,

Defendant-Appellant.

                              ORDER AFFIRMED

                                 Division IV
                        Opinion by JUDGE BERNARD
                       Hawthorne and Tow, JJ., concur

                        Announced November 15, 2018

Cynthia H. Coffman, Attorney General, Majid Yazdi, Assistant Attorney
General, Denver, Colorado, for Plaintiff-Appellee

Megan A. Ring, Colorado State Public Defender, Tracy C. Renner, Deputy State
Public Defender, Denver, Colorado, for Defendant-Appellant
¶1    When a statute says that a defendant owes interest at a rate of

 12% per annum on his restitution obligation, does that mean that

 the Colorado Judicial Department can only require him to make one

 interest payment per year? Defendant, Matthew James Ray, thinks

 so. We do not.

¶2    Our story begins with a letter sent by the Judicial Department

 in July 2015. It said that the Judicial Department would begin

 charging defendant interest at “1% per month” on any outstanding

 restitution balance. He responded by asking the trial court for an

 order declaring that the Judicial Department did not have the

 statutory authority to charge him monthly interest. The trial court

 declined.

¶3    Defendant appealed. We affirm.

                           I.   Background

¶4    A jury convicted defendant of second degree assault. The trial

 court sentenced him to prison, and it ordered him to pay

 $19,855.91 in restitution.

¶5    When the court issued the restitution order, section

 18-1.3-603(4)(b)(I), C.R.S. 2012, which we shall call “the restitution

 statute,” provided that a defendant owed post-judgment interest

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 “from the date of the entry of the order at the rate of twelve percent

 per annum.” (In 2016, the legislature amended the statute to lower

 the rate to 8%. Ch. 277, sec. 1, § 18-1.3-603, 2016 Colo. Sess.

 Laws 1142.) The restitution order in this case specifically noted

 that “interest will accrue at 12% per annum from the date of entry

 of the order.”

¶6    In June 2015, the Judicial Department issued a press release

 “announc[ing] a finalized plan to correct deficiencies in calculating

 and assessing interest on restitution.” The press release noted that

 the restitution statute “ha[d] not been applied consistently among

 the state’s judicial districts” and that the Judicial Department

 would begin “calculat[ing] and assess[ing] 1 percent interest

 monthly on restitution balances to ensure consistent and accurate

 application of the law across the state.”

¶7    The new policy came on the heels of a 2014 report issued by

 the Colorado State Auditor. The report noted that most judicial

 districts had not assessed or collected any interest since the

 legislature had enacted the restitution statute.

¶8    In July 2015, clerks of court around the state began sending

 letters to defendants with outstanding restitution balances to

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  inform them of the new policy. Defendant received a letter from the

  clerk of the El Paso County district court, which stated that he had

  an outstanding restitution balance of $19,583.98 and that “interest

  will be added at 1% per month of the current balance . . . until the

  original restitution amount is paid in full.”

                         II.   Trial Court’s Order

¶9     In response to the Judicial Department’s new policy,

  defendant asked the trial court for an order declaring that the

  Judicial Department did not have the statutory authority to charge

  him monthly interest. He made two arguments in support of his

  request: (1) the statute’s plain language did not allow the Judicial

  Department to make interest payable monthly; and (2) charging

  interest monthly rather than yearly “results in increased interest

  payments and [therefore] greater punishment.”

¶ 10   The trial court denied the motion. It first concluded that

  “twelve percent per annum” plainly referred “to a simple interest

  calculation that is compounded at the end of each calendar year.”

  But, the court continued, “[t]hat does not mean . . . that the

  assessment of interest remains stagnant for the year prior to

  interest being compounded.” The trial court found that “[a]

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  contrary interpretation would run afoul of the legislative directive

  that interest begin accruing immediately upon entry of the

  restitution order.”

¶ 11   The court then engaged in an interest-calculating exercise,

  stating that it would “appl[y] the concept of simple interest as it is

  normally understood in everyday financial circumstances.”

  According to the court, to determine an interest payment, one must

  first divide the annual interest rate (12%) by 365 (the number of

  days in a year) to calculate the “per diem percentage,” which, in this

  case was “.0329%.” But the court found that “[i]n an apparent

  effort to make calculations more uniform yet accurate, the [judicial

  department] has chosen to assess interest at the rate of 1% per

  month instead of the arguably more accurate .0329% per day.”

¶ 12   (In a thirty-day month, .0329% per day would yield a monthly

  interest rate of .987%. In a thirty-one-day month, it would yield a

  monthly interest rate of 1.0199%. In short February, it would yield

  a monthly interest rate of .9212%. So, in a non-leap year, the total

  amount of interest using the trial court’s methodology would be

  12.0085%. But, the trial court initially rounded the daily

  percentage rate to four decimal places. If the precise daily rate is

                                     4
  used, which has sixteen decimal places, the total amount of interest

  will be exactly 12%.)

¶ 13    So, considering that “[t]he legislature has given no guidance to

  the interpretation of ‘twelve percent per annum,’” the trial court

  concluded that it could not “find fault with the [Judicial

  Department’s] method of assessing post judgment interest.”

                              III.   Discussion

   A.   Standard of Review and Principles of Statutory Interpretation

¶ 14    This appeal requires us to interpret the restitution statute.

  Our review is de novo. People v. Ortiz, 2016 COA 58, ¶ 15.

¶ 15    When we interpret statutes, we must ascertain and give effect

  to the legislature’s intent. Colo. Dep’t of Revenue v. Creager

  Mercantile Co., 2017 CO 41M, ¶ 16. In doing so, “[w]e give effect to

  words and phrases according to their plain and ordinary meaning.”

  Denver Post Corp. v. Ritter, 255 P.3d 1083, 1089 (Colo. 2011). And,

  “we will not interpret a statute to mean that which it does not

  express.” Carruthers v. Carrier Access Corp., 251 P.3d 1199, 1204

  (Colo. App. 2010).

¶ 16    If a statute’s language is clear, we apply it as the legislature

  wrote it. Denver Post Corp., 255 P.3d at 1089. But, “[i]f the

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  statutory language is ambiguous, we may use other tools of

  statutory interpretation to determine the General Assembly’s

  intent.” Id. “A statute may be ambiguous if it is silent on an issue

  that would be expected to be within its scope.” People v. Carey, 198
P.3d 1223, 1229 (Colo. App. 2008).

                       B. The Restitution Statute

¶ 17    The restitution statute requires a court to consider restitution

  when it enters an order of conviction. § 18-1.3-603(1), C.R.S. 2018.

¶ 18   Timely payment of restitution lessens the financial burden of

  crime on victims, compensates them for “suffering and hardship,”

  and preserves their “individual dignity.” § 18-1.3-601(1)(e), C.R.S.

  2018; see also People v. Cardenas, 262 P.3d 913, 914 (Colo. App.

  2011). As a result, defendants must pay their restitution

  obligations in the “most expeditious manner.” § 18-1.3-601(1)(g)(I);

  Roberts v. People, 130 P.3d 1005, 1010 (Colo. 2006).

¶ 19   To “encourage expeditious payment,” the legislature required

  defendants to pay post-judgment interest. § 18-1.3-603(4)(b)(I);

  Roberts, 130 P.3d at 1010. When the court ordered restitution in

  this case, the statute provided, as we observed above, that

  “defendant owe[d] interest from the date of the entry of the order at

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  the rate of twelve percent per annum.” § 18-1.3-603(4)(b)(I), C.R.S.

  2012.

                             C. Discussion

¶ 20   Defendant first contends that the restitution statute is

  unambiguous. According to defendant, by using the phrase “per

  annum” in the restitution statute, the legislature demonstrated its

  clear intent that interest could be collected only one time per year.

¶ 21   In the alternative, if we conclude that the statute is

  ambiguous, defendant then asks us to reject the Judicial

  Department’s interpretation because (1) monthly payments of

  interest do not encourage indigent or incarcerated defendants to

  pay their restitution expeditiously; (2) there are other methods in

  the statute to encourage expeditious payment; and (3) the rule of

  lenity should apply in defendant’s favor.

                    1.    Is the Statute Ambiguous?

¶ 22   Defendant contends that the statute is unambiguous based on

  the plain and ordinary meaning of “per annum.” We disagree.

¶ 23   The legislature did not define “per annum” in the restitution

  statute. So the principles of statutory construction allow us to refer

  to a dictionary definition to ascertain the meaning of an undefined

                                    7
  term or phrase. Bachelor Gulch Operating Co. v. Bd. of Cty.

  Comm’rs, 2013 COA 46, ¶ 25. But the dictionary definition of “per

  annum” tells us only that the phrase means “[b]y, for, or in each

  year; annually.” Black’s Law Dictionary 1317 (10th ed. 2014).

  Applying the definition, we know that a defendant owes twelve

  percent annually, but remain in the dark about how often the

  Judicial Department can require a defendant to make interest

  payments.

¶ 24   We conclude that the statute is ambiguous because it is silent

  about this question of timing, Carey, 198 P.3d at 1229, and the

  statute is therefore susceptible of more than one reading, State v.

  Nieto, 993 P.2d 493, 500-01 (Colo. 2000).

       2.   Other Methods of Ascertaining the Legislature’s Intent

¶ 25   If a statute is ambiguous, we must consider other factors to

  ascertain the legislature’s intent. See § 2-4-203, C.R.S. 2018.

¶ 26   For example, we may look to a statute’s legislative history. See

  McLaughlin v. Oxley, 2012 COA 114, ¶ 10. In this case, we have

  reviewed the legislative history of House Bill 00-1169, which

  enacted the restitution statute. We have also reviewed the

  legislative history of Senate Bill 16-065, which amended the specific

                                    8
  subsection in question after the Judicial Department announced its

  new policy. But we did not discover any indication that the

  legislature contemplated the issue of when interest payments would

  be due.

¶ 27   We nevertheless conclude that the Judicial Department did

  not violate the statute for the following reasons.

¶ 28   First, although we have not located any Colorado case law on

  point, other jurisdictions have interpreted similar language in

  contracts and in statutes. The consensus is that “[t]he term ‘per

  annum’ is intended only as a measure of the rate with respect to

  time and does not require the payment of interest annually.” Gustin

  v. Sun Life Assurance Co. of Canada, 152 F.2d 447, 449 (6th Cir.

  1945); see Canton Trust Co. v. Durret, 9 S.W.2d 925, 927 (Mo.

  1928).

¶ 29   Second, we believe that, if the legislature intended to limit

  interest payments to an annual basis, it would have clearly done so.

  Spahmer v. Gullette, 113 P.3d 158, 162 (Colo. 2005)(“We will not

  create an addition to a statute that the plain language does not

  suggest or demand.”). Indeed, the legislature has done just that in

  other contexts. See § 32-11-644(2), C.R.S. 2018 (interest is

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  “payable annually or semiannually at a rate not exceeding eight

  percent per annum”); § 36-5-106, C.R.S. 2018 (“The interest shall

  be due and payable annually.”).

¶ 30   Third, the Judicial Department’s assessment of monthly

  interest payments is consistent with the common practice in the

  financial community. There are typically three methods to collect

  interest payments: (1) the 365/365 method or the “exact day”

  method; (2) the 360/360 method or the “ordinary interest” method;

  and (3) the 365/360 method or the “bank interest” method. Kreisler

  & Kreisler, LLC v. Nat’l City Bank, 657 F.3d 729, 732 (8th Cir.

  2011).

¶ 31   Under the exact day method, the annual interest rate is

  divided by 365 to calculate a daily interest rate. See Am. Timber &

  Trading Co. v. First Nat’l Bank of Or., 511 F.2d 980, 982 n.1 (9th

  Cir. 1973). Then, the daily interest rate is multiplied by the

  principal amount for each day a debt is outstanding during a

  month. Id. At the month’s end, a debtor is assessed monthly

  interest based on the number of days in a month. Id.

¶ 32   (We note that the trial court described this method, but then

  found that the interest “compounded at the end of each calendar

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  year.” “Simple interest” is “[i]nterest paid on the principal only,”

  while “compound interest” is “[i]nterest paid on both the principal

  and the previously accumulated interest.” Black’s Law Dictionary

  935-36. The parties do not raise the issue of whether the interest is

  simple or compound, but we assume for the purpose of discussion

  that the interest authorized by the restitution statute is simple

  interest because that is the standard presumption, see Quinlan v.

  Koch Oil Co., 25 F.3d 936, 941 (10th Cir. 1994), because the

  legislature has been explicit when imposing compound interest in

  other statutes, see § 5-12-102(1)(b), C.R.S. 2018 (“Interest shall be

  at the rate of eight percent per annum compounded

  annually . . . .”), and because the legislature later amended the

  statute to clarify that it is simple interest, 2016 Colo. Sess. Laws at

  1142.)

¶ 33   Next, under the ordinary interest method, the annual interest

  rate is divided by 360 to calculate a daily interest rate. Am. Timber

  & Trading Co., 511 F.2d at 982 n.1. This method assumes that

  each month has thirty days regardless of how many days are in the

  month. Id. Under this method, assuming the principal amount

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  does not change, the interest payment will be the same every

  month. Id.

¶ 34    There is a third method for calculating interest payments

  known as the bank interest method. Kreisler & Kreisler, 657 F.3d

  at 732. Under this method, the annual interest rate is divided by

  360 to calculate a daily interest rate, but then multiplied by the

  actual number of days in a year, usually 365. Id. “Because the

  numerator and denominator do not match as they do in the other

  methods, the [bank interest method] increases the effective interest

  rate . . . .” Id.

¶ 35    So, applying either the exact day method or the ordinary

  interest method in this case, the Judicial Department would collect

  no more than twelve percent interest per year. Only under the third

  method, which is not at issue in this case, would interest exceed

  twelve percent annually. See Am. Timber & Trading Co., 511 F.2d at

  982 (noting that using the bank interest method resulted in an

  actual annual interest rate of 12.167%, even though Oregon statute

  limited the annual interest rate to 12%.)

¶ 36    Fourth, defendant’s interpretation would run afoul of another

  part of the restitution statute that provides that a defendant owes

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  interest “from the date of the order.” See People v. Benavidez, 222
P.3d 391, 393 (Colo. App. 2009)(interpreting a statute to give

  “sensible effect to all its parts”). Under defendant’s interpretation, a

  person could avoid paying any interest from “the date of the order”

  for nearly a year if he were able to pay off the restitution before

  year’s end. (The record is unclear as to whether the Judicial

  Department’s current method would also allow a defendant to avoid

  paying any interest if he could pay all of the ordered restitution in

  full before the first month’s end.)

¶ 37   Fifth, we disagree with defendant’s contention that monthly

  payments do not promote the legislature’s stated objective of

  encouraging expeditious payment of restitution. Roberts, 130 P.3d

  at 1010. As stated above, under defendant’s interpretation, there

  would be little incentive to make any payments on restitution until

  the year’s end, see People v. Garcia, 55 P.3d 243, 245 (Colo.

  2002)(noting that “if restitution is not paid immediately, then

  victims are entitled to compensation for the delay in return of their

  money”), which is contrary to the legislature’s intent. We also

  disagree with defendant’s contention that, to the extent that

  monthly interest encourages those with means to pay, it does not

                                        13
  encourage indigent or incarcerated defendants to do the same. A

  defendant’s ability to pay restitution, and by implication, interest, is

  irrelevant to this issue. See People v. Stovall, 75 P.3d 1165, 1167

  (Colo. App. 2003).

¶ 38   Sixth, we are not persuaded to adopt defendant’s

  interpretation of the statute based on “other mechanisms in the

  statute that are designed to accomplish” the goal of expeditious

  payment. Our supreme court has determined that the assessment

  of post-judgment interest encourages expeditious payment.

  Roberts, 130 P.3d at 1010. The fact that there are also other

  statutory provisions designed to promote the same goal is

  irrelevant.

¶ 39   Seventh, the Judicial Department issues statements that are

  “promulgated pursuant to this court’s general power to administer

  the Colorado judicial system.” Bye v. Dist. Court, 701 P.2d 56, 59

  (Colo. 1985)(discussing Chief Justice Directives). And, although an

  exercise of administrative authority “may not modify or contravene

  an existing statute,” Colo. Consumer Health Initiative v. Colo. Bd. of

  Health, 240 P.3d 525, 528 (Colo. App. 2010), we have concluded

  above that the Judicial Department’s procedure did not “modify or

                                    14
  contravene” the restitution statute. Instead, “the judicial branch of

  government possesses the inherent power to determine and compel

  payment of those sums of money which are reasonable and

  necessary to carry out its mandated responsibilities.” Pena v. Dist.

  Court, 681 P.2d 953, 956 (Colo. 1984).

¶ 40    Finally, based on the preceding analysis, we do not need to

  invoke the rule of lenity. See Frazier v. People, 90 P.3d 807, 811

  (Colo. 2004)(“[A]pplication of the rule of lenity is a last resort and

  will not be applied when we are able to discern the intent of the

  [legislature].”).

¶ 41    The order is affirmed.

        JUDGE HAWTHORNE and JUDGE TOW concur.

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