People v. Foos , 2016 Colo. App. LEXIS 1337 ( 2016 )

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
1
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.
2
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
3
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
4
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.
9