People v. Foos , 409 P.3d 561 ( 2016 )


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  • 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.
    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
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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
    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
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    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.
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    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
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    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,
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    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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