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Roup v. Commercial Research, LLC

Supreme Court of Colorado, En Banc

June 1, 2015

Gary S. Roup, Petitioner:
v.
Commercial Research, LLC, Respondent:

Certiorari to the Colorado Court of Appeals. Court of Appeals Case No. 12CA453.

Judgment Affirmed.

SYLLABUS

In this decision, the Colorado Supreme Court holds that a Health Savings Account (" HSA" ) is not a " retirement plan" within the meaning of Colorado's exemption statute. An HSA is not intended to replace income lost as a result of retirement; it is intended to cover medical costs incurred at any point during a person's lifetime. The General Assembly has not chosen to provide an exemption for HSAs in the relevant statutes. Accordingly, the supreme court affirms the judgment of the court of appeals.

Gary S. Roup, Petitioner, Pro Se, Aspen, Colorado.

Stokes & Wolf, P.C., James R. Wolf, Denver, Colorado, Attorneys for Respondent.

Weinstein, Pinson & Riley, P.S., Kimberly L. Martinez, Denver, Colorado; Greenberg & Sada, P.C., Alan Greenberg, Englewood, Colorado Attorneys for Amici Curiae Colorado Creditor Bar Association and Associated Collection Agencies, Inc.

Public Employees' Retirement Association, Adam L. Franklin, General Counsel, Kimberly K. Gardner, Senior Staff Attorney, Megan M. Westberg, Staff Attorney, Denver, Colorado, Attorneys for Amicus Curiae Colorado Public Employees' Retirement Association.

OPINION

Page 274

HOBBS, JUSTICE

[¶1] The issue in this case is whether a Health Savings Account (" HSA" ) qualifies as a " retirement plan" for the purposes of section 13-54-102(1)(s), C.R.S. (2014), which exempts certain property from garnishment.[1] We hold that an HSA is not a " retirement plan" within the meaning of Colorado's exemption statute. An HSA is not intended to replace income lost as a result of retirement; it is intended to cover medical costs incurred at any point during a person's lifetime. The General Assembly has not chosen to provide an exemption for HSAs in the relevant statutes. We therefore affirm the judgment of the court of appeals.

I.

[¶2] Commercial Research, LLC (" Creditor" ) obtained an assignment of a default judgment that had been entered against Gary S. Roup in a Texas court. Creditor then filed the judgment in Colorado and began collection proceedings against Roup's assets, including $3,729.24 held in an HSA. Roup asserted these funds were exempt from attachment or garnishment because his HSA is a retirement plan under section 13-54-102(1)(s), which exempts certain types of property--including funds held in any " retirement plan" --from levy and sale.

[¶3] The trial court determined that an HSA is not a retirement plan, reasoning that an HSA merely permits individuals to defer income on a tax-exempt basis to pay medical expenses. Concluding that no authority supported exempting Roup's HSA from garnishment, the trial court ordered the funds to be released to Creditor.

[¶4] Meanwhile, during the trial court proceedings, Roup filed for bankruptcy and was granted a discharge of the underlying judgment.

Page 275

Roup had appealed the trial court's order denying his exemption, but the court of appeals remanded to the trial court the question of whether the intervening bankruptcy made the issue moot. On remand, the trial court ruled that even though the bankruptcy discharged the underlying judgment, the discharge did not extinguish Creditor's garnishment because Roup had not taken any affirmative step toward extinguishing the lien. See, e.g., In re Haberman,516 F.3d 1207, 1209 (10th Cir. 2008) (" [L]iens generally pass through bankruptcy unaffected . . . ." ); In re Deutchman,192 F.3d 457, ...


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