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Mendoza v. Pioneer Gen. Ins. Co.

Court of Appeals of Colorado, Division A

March 13, 2014

Devin Mendoza and Natalie Gonzales, Plaintiffs-Appellants,
v.
Pioneer General Insurance Company, Defendant-Appellee

City and County of Denver District Court No. 12CV2284. Honorable J. Eric Elliff, Judge.

The Wynkoop Law Office, PLLC, Richard B. Wynkoop, Susan G. Thomas, Wheat Ridge, Colorado, for Plaintiffs-Appellants.

Pendleton, Wilson, Hennessey & Crow, P.C., L. Jay Labe, Denver, Colorado, for Defendant-Appellee.

Ney[*] and Roy[*], JJ., concur.

OPINION

Page 372

LOEB, CHIEF JUDGE.

[¶1] In this case to recover on a surety bond issued by defendant Pioneer General Insurance Company (Pioneer), plaintiffs, Devin Mendoza and Natalie Gonzales, appeal the district court's order and judgment denying their motion seeking a declaratory judgment. We reverse and remand with directions.

[¶2] Plaintiffs requested that the court enter a judgment declaring that a prior judgment they obtained against a motor vehicle dealer, Fitzgerald Automotive Group (Fitzgerald), under section 6-1-708, C.R.S. 2013, of the Colorado Consumer Protection Act (CCPA) constituted a determination of fraud or fraudulent representation sufficient to allow plaintiffs to recover on the surety bond obtained by Fitzgerald from Pioneer, pursuant to section 12-6-111, C.R.S. 2013 (the Motor Vehicle Dealer Bond Statute).

[¶3] The district court held that, while a CCPA violation could constitute a determination of fraud or fraudulent representation, the court did not have a sufficient record before it to determine whether or not there was a final determination of fraud or fraudulent representation to satisfy section 12-6-111(2)(b), C.R.S. 2013. We reverse and conclude that, as a matter of law, the county court judgment obtained by plaintiffs, finding that Fitzgerald had committed a deceptive trade practice by violating section 6-1-708(1)(a)(I), was a final determination of fraud made by a court of competent jurisdiction, which was sufficient to satisfy section 12-6-111(2)(b).

Page 373

I. Background and Procedural History

[¶4] In March 2009, Mendoza and Gonzales brought an action in Denver County Court against Fitzgerald, alleging, as pertinent here, a claim that Fitzgerald violated section 6-1-708, which is a provision of the CCPA that expressly prohibits motor vehicle dealers from engaging in certain specified deceptive trade practices. Plaintiffs asserted that Fitzgerald violated (1) section 6-1-708(1)(a)(I), which prohibits a motor vehicle dealer from falsely guaranteeing to a consumer that financing for the purchase of a vehicle has been approved if such approval is not final; and (2) section 6-1-708(1)(a)(III), which prohibits a dealer from refusing to refund a consumer's down payment when financing was not approved after the dealer falsely guaranteed that financing was approved and final. It appears to be undisputed that plaintiffs did not allege a claim for common law fraud in their county court action.

[¶5] After a trial to a jury, the jury found in favor of plaintiffs on their CCPA claim[1] and also found in a special interrogatory that Fitzgerald had engaged in bad faith conduct under section 6-1-113(2)(a)(III), C.R.S. 2013, which allows for an award of treble damages. The county court entered judgment on the jury's verdict in favor of plaintiffs and against Fitzgerald for actual damages in the amount of $3500 and trebled that amount, consistent with the jury's finding of bad faith. The court also awarded plaintiffs attorney fees and costs of $15,475 and $436.61 respectively.

[¶6] Thereafter, Fitzgerald apparently ceased operations, and plaintiffs were not able to recover on their judgment directly from Fitzgerald. Accordingly, they brought this action against Pioneer in Denver District Court, requesting, as relevant here, that the court enter a declaratory judgment that the motor vehicle dealer's licensing bond required by section 12-6-111 " is available to consumers who have been damaged by car dealers that commit deceptive trade practices as prohibited in [section 6-1-708 of the CCPA] and further find that the bond is applicable to costs and attorney fees incurred by the consumer . . . ." After briefing, the district court entered an order denying plaintiffs' motion. The court reasoned that, without the record from the underlying county court action, or any explicit finding of fraud or fraudulent representation by the jury, the court could only " attempt to make a finding of fraud based on the factual allegations of the underlying case." The court concluded that doing so would be improper.

[¶7] On appeal, plaintiffs contend the district court erred in denying their motion for declaratory judgment because, they assert, the county court's judgment was a final determination by a court of competent jurisdiction of fraud or fraudulent representation that was sufficient to satisfy section 12-6-111(2)(b). We agree.

II. Discussion

[¶8] Plaintiffs contend that sections 6-1-708 and 12-6-111 are part of a legislative and regulatory scheme designed to protect consumers from fraud and should be read together to accomplish that legislative purpose. Pioneer contends that plaintiffs did not allege a claim for fraud against Fitzgerald, the jury was never instructed on the elements of fraud, and the jury did not make any express findings that Fitzgerald engaged in fraud; hence, according to Pioneer, there was no " final determination by . . . a court of competent jurisdiction, of fraud or fraudulent misrepresentation by the bond principal." We conclude that the county court's entry of judgment on the jury's verdict in favor of plaintiffs on their CCPA claim was a final determination that Fitzgerald had committed fraud, and therefore, the district court erred in denying plaintiffs' request for a declaratory judgment.

Page 374

A. Standard of Review and Applicable Law

[¶9] Once a trial court has accepted jurisdiction, we review its decision whether to enter a declaratory judgment for an abuse of discretion. Troelstrup v. Dist. Court, 712 P.2d 1010, 1012 (Colo. 1986); Saxe v. Bd. of Trs. of Metro. State Coll. of Denver, 179 P.3d 67, 72 (Colo.App. 2007). Where, as here, the issue is one of statutory interpretation, our review is de novo. See Zab, Inc. v. Berenergy Corp., 136 P.3d 252, 254 (Colo. 2006) (" Whether a trial court may exercise its discretion in granting declaratory relief under the [Colorado Uniform Declaratory Judgment Law] is a matter of statutory interpretation, which we review de novo." ); Wallin v. McCabe, 293 P.3d 81, 83 (Colo.App. 2011) (same).

[¶10] The first goal of a court construing a statute is to ascertain and give effect to the intent of the General Assembly. Constructions that defeat the obvious legislative intent should be avoided. To determine the legislative intent, courts look first to the statutory language, giving words and phrases their plain and ordinary meaning. Although we must give effect to the statute's plain and ordinary meaning, the intention of the legislature prevails over a literal interpretation of the statute that would lead to an absurd result. Showpiece Homes Corp. v. Assurance Co. of Am., 38 P.3d 47, 51 (Colo. 2001).

[¶11] We consider statutes as a whole in order to effectuate legislative intent, and we give consistent, harmonious, and sensible effect to all the statute's parts. Colo. Dep't of Revenue v. Cray Computer Corp., 18 P.3d 1277, 1281 (Colo. 2001). Statutes should not be read in isolation but together with all other statutes relating to the same subject or having the same general purpose, to the end that a statute's intent may be ...


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