Criminal Law—Traffic Stop—Search and Seizure—Miranda—Public Safety Exception—Possession of a Weapon by a Previous Offender—Motion to Suppress.

Police officers conducted a traffic stop of a vehicle for various traffic infractions. The officers observed that the occupants were acting suspiciously. An officer asked the passenger (Perez) to step out of the car, and he began running. When the officers finally caught Perez, he resisted officers’ efforts to take him into custody and broke an officer’s nose. After handcuffing Perez, an officer frisked him and found two shotgun shells in his pocket. Before advising him of his Miranda rights, the officer asked Perez where the gun was. Perez responded that he had thrown it away. The shotgun was found in the vehicle. A jury convicted Perez of second degree assault on a peace officer and four counts of possession of a dangerous weapon by a previous offender (POWPO).

On appeal, Perez first contended that the trial court erred by denying his motion to suppress incriminating statements he made after his arrest and before police advised him of his Miranda rights. Absent warnings against self-incrimination, the prosecution generally cannot introduce in its case-in-chief statements obtained from a suspect that resulted from custodial interrogation. The public safety exception to Miranda warnings applies if the officer’s questioning related to an objectively reasonable need to protect the police or the public from immediate danger associated with a weapon. Although bullets may suggest possession of a gun, here the suggestion was not strong enough to give the officer reason to believe that Perez had discarded a shotgun while being chased. Because the officer’s question was not required to protect the police or public from immediate danger associated with a weapon, the public safety exception did not apply, and the trial court erred in denying the motion to suppress the incriminating statement. However, the evidence of Perez’s possession of the weapon was overwhelming without regard to the statement, so the error was harmless beyond a reasonable doubt.

Perez also contended that the trial court erred in allowing the jury to convict him of four counts of POWPO when the charges derived from the same weapon. A person with multiple prior felony convictions may not be convicted of multiple POWPO counts for possession of a single gun during a single incident. Thus, the convictions should have merged, and the error was plain.

            Finally, Perez contended that the trial court erred by allowing the prosecution to proceed when law enforcement’s outrageous conduct violated his federal and state rights to due process. Perez cited no authority suggesting that the conduct here was outrageous, and he did not show any error, let alone plain error.

The judgment was reversed in part and remanded with directions to vacate Perez’s POWPO convictions and sentences in counts four, five, and six and to correct the mittimus accordingly. The judgment was affirmed in all other respects.

Colorado Consumer Protection Act—Colorado Antitrust Act—Law of the Case Doctrine—Fifth Amendment—Nonparty Witnesses—Statute of Limitations—Public Harm.

Castle Law Group, LLC (the law firm) was the largest foreclosure law firm in Colorado during the subprime mortgage crisis that occurred about a decade ago. Because of the large volume of foreclosures during this period, mortgage servicers, acting on behalf of lenders, hired foreclosure law firms using comprehensive retainer agreements. As relevant here, the mortgage servicers included two quasi-public entities, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac). Under the retainer agreements at issue in this case, the mortgage servicers would agree to pay the law firm a flat fee for each case, and the law firm would arrange for all the foreclosure legal work, including posting of notices and land title research. The law firm would hire an outside vendor to complete these services. The mortgage servicers would then reimburse the firm for its “actual, necessary, and reasonable” costs for these services, in accordance with Colorado law.

In 2014, the State of Colorado and the State’s Administrator of the Uniform Commercial Code (collectively, the State) filed a civil enforcement action under the Colorado Consumer Protection Act (CCPA), CRS §§ 6-1-101 et seq. It alleged that the law firm and its principals exploited the reimbursement system by engaging in a deceptive scheme with Absolute Posting & Process Services, LLC and its principals (the posting company) and RE Records Research, LLC and its principals (the title company). The alleged scheme involved false or misleading statements of fact concerning the price of their foreclosure services under the CCPA. The State also alleged that the law firm had illegally fixed prices in violation of the Colorado Antitrust Act of 1992. Following a bench trial, the trial court ruled in favor of defendants on all the claims but one. As to the State’s one successful claim, the trial court assessed civil penalties against the law firm and its principals.

On appeal, the State contended that the trial court disregarded the law of the case doctrine when it determined that the prices of the title company and the posting company were “actual” and “reasonable.” It was alleged that the law firm conspired with the title company and the posting company to set prices for services in excess of the market rate and shared in the profits from the inflated costs. The State asserted that the Supreme Court’s opinion in State ex rel. Coffman v. Castle Law Group, LLC, 2016 CO 54, required the trial court to consider the market rate evidence to determine whether the prices were artificially inflated. The Court of Appeals held that (1) the trial court did not err by rejecting the State’s market rate evidence; (2) even if the trial court erred in concluding that the costs were “actual,” it did not commit reversible error; (3) the trial court did not err when it considered Fannie Mae’s approval of the charges as evidence that the charges were reasonable; and (4) the trial court did not improperly consider the State’s “kickback theory.” Therefore, the trial court’s findings did not contravene the law of the case. Further, the trial court’s findings that the prices for the services were not inflated and that the vendors set their prices independently of any influence from the law firm were supported by the record.

The State also contended that the trial court erred in allowing a nonparty witness to make a blanket invocation of her Fifth Amendment rights without having to take the witness stand to invoke the rights on a question-by-question basis. Here, the trial court allowed the State to make an offer of proof of the questions it intended to ask the witness, the witness knew what she would be asked, and there was no doubt that she would decline to answer the questions. Thus, even if the witness had taken the witness stand, the trial court would have made the same findings and conclusions. Therefore, the trial court did not err in allowing the witness to invoke the Fifth Amendment without taking the witness stand. Further, the trial court’s decision to decline to draw any adverse inference against the law firm based on the witness’s silence was supported by the record.

On cross-appeal, the law firm argued that the trial court erred by applying the statute of limitations in the CCPA instead of the statute of limitations for civil penalties in CRS § 13-80-103(1)(d). Because the CCPA has a statute of limitations specifically addressing cases brought under its provisions, it controls over the more general CRS § 13-80-103(1)(d), and the trial court did not err.

The law firm also argued that the trial court erred in assessing civil penalties under CRS § 6-1-112, because it incorrectly determined that the deceptive act significantly impacted the public as actual or potential consumers. A deceptive practice does not violate the CCPA simply because it impacts the public generally; the practice must impact the public specifically as actual or potential consumers of the goods or services at issue. The State had to prove that the law firm’s nondisclosure of its relationship with the posting company had a significant public impact. Here, the deceptive practice impacted only two clients, Fannie Mae and Freddie Mac. The public’s interest in these entities as taxpayers does not constitute a significant public impact. Therefore, the trial court erred as a matter of law in determining that the nondisclosure significantly impacted the public as actual or potential consumers.

The judgment was affirmed in part and reversed in part. The case was remanded to the trial court to vacate the judgment against the law firm.

Colorado Governmental Immunity Act—Colorado Anti-Discrimination Act—Equitable Relief—Legal Remedies—Political Subdivisions.

Plaintiff is a former human resources manager at Denver Health and Hospital Authority (Denver Health), which is a political subdivision of the State of Colorado. Denver Health terminated plaintiff’s employment, purportedly because he used confidential patient records of Denver Health employees for disciplinary purposes, in violation of the Federal Health Insurance Portability and Accountability Act of 1996. Plaintiff filed a discrimination charge with the Colorado Civil Rights Division (CCRD), asserting that the real reasons for his termination were sexual orientation discrimination and unlawful retaliation for asserting his rights under the Colorado Anti-Discrimination Act (CADA).

The CCRD did not timely resolve the discrimination charge, and plaintiff filed suit in district court. Plaintiff alleged sexual orientation discrimination in violation of CADA; two claims of retaliation under CADA; wrongful discharge in violation of public policy; whistleblower retaliation under the State Employee Protection Act (SEPA); and breach of implied contract or promissory estoppel. Plaintiff’s CADA claims were brought under the 2013 amendments to CADA. Denver Health claimed governmental immunity under the Colorado Governmental Immunity Act (CGIA) and moved under CRCP 12(b)(1) to dismiss all but the implied contract/promissory estoppel claim for lack of subject matter jurisdiction. The district court granted Denver Health’s motion as to the wrongful discharge in violation of public policy claim and the whistleblower claim under SEPA. The district court denied Denver Health’s motion as to the remaining claims.

On interlocutory appeal, Denver Health contended that the district court’s denial of governmental immunity as to the CADA claims was erroneous. To the extent plaintiff asserts claims for reinstatement, back pay, and other equitable relief, he is not subject to the CGIA. To the extent he asserts the legal remedies available under CADA as amended, he is subject to the CGIA. Thus, plaintiff’s claims against Denver Health for compensatory relief are subject to the requirements of the CGIA, and the district court’s conclusion to the contrary is incorrect. However, to the extent plaintiff’s complaint seeks equitable relief, such as back pay or reinstatement, his claims may proceed independently of compliance with the CGIA, including any notice requirement.

The order denying Denver Health’s motion to dismiss the CADA claims under the CGIA was reversed. The order was affirmed to the extent it denied the motion as to plaintiff’s equitable relief requests. The remaining claims were remanded to the district court.

Police—Disciplinary Procedures—Jurisdiction—Denver City Charter—Finality.

Murr and Sparks were Denver Police Department (DPD) officers (the Officers). They were investigated for excessive use of force after arresting two men outside a Denver nightclub. The Deputy Chief of Police recommended that Sparks be docked three days of pay and Murr be suspended for three days. The Manager of Safety (MOS) reviewed the recommendations according to the Charter of the City and County of Denver (the Charter) procedure, and he accepted them. The officers did not appeal this first disciplinary order.

After video of the incident was released to the public, the MOS reopened the investigation, rescinded the first disciplinary order, and remanded the matter. The Officers brought an action in district court to enjoin the MOS from issuing new disciplinary orders, asserting that the MOS lacked authority to rescind a disciplinary order and issue a new one after the deadline for filing an appeal had passed without one being taken. The district court denied injunctive relief. The MOS terminated the Officers, and they timely appealed this second disciplinary order. A hearing panel concluded that the first disciplinary order became final when the appeal period lapsed and the Charter did not authorize the MOS to reassert jurisdiction over the matter. The MOS appealed to the full Civil Service Commission of the City and County of Denver (the Commission). Ultimately, the Commission interpreted the Charter to give the MOS implied authority to reopen the Officers’ disciplinary matter, rescinded the discipline previously imposed, and upheld the terminations. The district court affirmed the Commission’s order.

On appeal, the Officers argued that the Charter does not expressly or impliedly grant the MOS power to rescind a disciplinary order once it becomes final and the time for appealing that order to the Commission expires. Even if the MOS has the implied power to rescind a disciplinary order, the Charter provisions and principles of finality and jurisdiction provide that this power and authority exists only until an order becomes final and while the MOS retains jurisdiction of the matter, which ends once the appeal time of that order expires. Here, the MOS’s first disciplinary order was a final order because it determined the matter in full, imposed legal consequences on the Officers, and left nothing further to be done to determine any party’s rights. Absent a timely appeal to the Commission within the 10 days, the Officers became bound to accept their discipline, which the DPD was required to implement. Thus, the Commission exceeded its jurisdiction and abused its discretion in concluding that the MOS had the implied authority and power to rescind the order.

The judgment was reversed and the case was remanded with directions to remand to the Commission for reentry of the first disciplinary order.

Taxpayers—Voters—Standing.

Plaintiffs were taxpayer-voters. They sued the Boulder County Board of County Commissioners and the Boulder County Housing Authority, alleging that they failed to uphold promises made during a 1993 campaign to raise taxes to purchase and maintain “open space” land. The district court dismissed some of plaintiffs’ claims for lack of standing and other claims for failure to state a claim upon which relief could be granted.

            On appeal, plaintiffs contended that the district court erred in dismissing their complaint. To support standing, a plaintiff’s complaint must establish a personal stake in the alleged dispute and an alleged injury that is particular as to the plaintiff. Here, plaintiffs’ asserted injuries are no different than those suffered by other individuals who voted for the proposed tax increases. And though Colorado allows broad taxpayer standing, this typically applies where the plaintiffs allege constitutional violations, which was not the case here. Plaintiffs also lack standing as voters because they did not allege they were denied the right to vote, that their votes were diluted, or that their right to vote was otherwise infringed upon. Instead, plaintiffs’ claims were predicated on unfulfilled expectations arising from campaign promises, which are not legally protected or cognizable interests. Consequently, the district court properly dismissed plaintiffs’ complaint.

The judgment was affirmed.