v. Ray , 2018 COA 158 ( 2018 )

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
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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
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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
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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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