State of Colorado, ex rel. Cynthia H. Coffman, Attorney General for the State of Colorado; and Julie Ann Meade, Administrator, Uniform Consumer Credit Code, Plaintiffs-Appellees and Cross-Appellants,
Robert J. Hopp & Associates, LLC; The Hopp Law Firm, LLC; National Title, LLC, d/b/a Horizon National Title insurance, LLC; First National Title Residential, LLC; Safehaus Holdings Group, LLC; and Robert J. Hopp, Defendants-Appellants and Cross-Appellees,
and County of Denver District Court No. 14CV34780 Honorable
Shelley I. Gilman, Judge
Cynthia H. Coffman, Attorney General, Jennifer H. Hunt, First
Assistant Attorney General, Erik R. Neusch, Senior Assistant
Attorney General, Rebecca M. Taylor, Mark L. Boehmer,
Assistant Attorneys General, Denver, Colorado, for
Plaintiffs-Appellees and Cross-Appellants
Richards Carrington, LLC, Christopher P. Carrington, Ruth M.
Moore, Denver, Colorado, for Defendants-Appellants and
ROTHENBERG JUDGE [*]
1 In a case of first impression in the Colorado courts, we
address whether the Colorado Consumer Protection Act (CCPA)
and the Colorado Fair Debt Collection Practices Act (CFDCPA)
prohibit foreclosure attorneys and title companies from
billing mortgage servicer clients foreclosure commitment
charges when those full costs were not actually incurred,
despite knowing that these fraudulent costs would be assessed
against homeowners in foreclosure. We conclude that such a
practice violates the CCPA and CFDCPA.
2 Plaintiffs, the State of Colorado, ex rel. Cynthia H.
Coffman, Attorney General for the State of Colorado; and
Julie Ann Meade, Administrator, Uniform Consumer Credit Code,
brought a civil law enforcement action against defendants,
foreclosure lawyer Robert J. Hopp; his law firms, Robert J.
Hopp & Associates, LLC, and The Hopp Law Firm, LLC
(collectively, the law firms); as well as Hopp's
affiliated title companies, National Title, LLC, d/b/a
Horizon National Title Insurance, LLC, and First National
Title Residential, LLC; and Safehaus Holdings Group, LLC, a
company owned by Hopp and his wife Lori L. Hopp, which,
through its subsidiary, provided accounting and bookkeeping
services for the law firms and title companies. The State
alleged that Hopp, the law firms, and their affiliated
companies violated the CCPA and the CFDCPA by engaging in the
billing practice described above. The district court agreed,
for the most part, with the State and imposed penalties
totaling $624, 000. While Hopp's wife, Lori Hopp, was a
defendant in the district court action, she was not found
liable for any claims and is not named as a party to this
3 Defendants appeal the trial court's judgment;
plaintiffs cross-appeal an evidentiary ruling.
4 We affirm the district court's judgment and remand the
case with directions.
5 The trial court, in a thorough written order, found the
following facts and described the mechanics of the
foreclosure process in Colorado. The parties do not dispute
these facts or description.
6 Generally, in Colorado, a person who borrows money from a
lender to purchase real property signs a promissory note and
an accompanying deed of trust. A deed of trust is "a
security instrument containing a grant to a public trustee
together with a power of sale." § 38-38-100.3(7),
C.R.S. 2017. In the deed of trust, the borrower agrees that,
upon default, the lender can initiate a nonjudicial
foreclosure proceeding, which can result in the public
trustee's eventual sale of the property.
7 A foreclosure may be withdrawn prior to sale for various
reasons, such as the borrower's agreement to a loan
modification, disposal of the property through a short sale,
the lender's agreement to a deed-in-lieu of foreclosure,
or the borrower's cure of the default. The public trustee
for El Paso County testified that between 2008 and 2016,
approximately half of the foreclosures filed in Colorado were
withdrawn before sale.
8 If a borrower wishes to end the foreclosure proceedings by
curing the default on the property, he or she may file a
written notice of intent to cure with the public trustee.
§ 38-38-104(1), C.R.S. 2017. The public trustee must
promptly contact the lender's attorney to request a
written "cure statement" itemizing all sums
necessary to cure the default, including missed payments,
accrued interest, late fees, penalties, and the fees and
costs associated with the foreclosure. §
38-38-104(2)(a)(I). The lender's attorney may include
good faith estimates with respect to interest, fees, and
costs. § 38-38-104(5).
9 If a foreclosure action is not withdrawn, the property that
serves as collateral for the borrower's loan proceeds to
sale. Before the scheduled sale date, the holder of the
evidence of debt, or the holder's attorney, submits a bid
to the public trustee. § 38-38-106(2), (6), C.R.S. 2017.
The holder's bid sets the minimum price for bidding on
the property and that bid must be at least the lender's
good faith estimate of the fair market value of the property,
less certain sums identified in section 38-38-106(6). The bid
includes the attorney fees and costs.
10 If the property is purchased at sale for less than the
borrower's total indebtedness to the lender, the lender
may pursue the collection of the deficiency from the borrower
through other avenues. If the property is purchased for more
than the total amount of indebtedness to the lender, any
overbid may be claimed by others with interests in the
property, and then, upon payment of those claims, by the
Title Commitments In Foreclosure Actions
11 At the beginning of a nonjudicial foreclosure action, the
lender's attorney orders a title product for the subject
property. A foreclosure commitment is a title insurance
product used to ensure that insurable and marketable title is
delivered to the lender at the end of a foreclosure. It is a
commitment to issue a title insurance policy upon the
satisfaction of certain conditions. A foreclosure commitment
often contains a hold-open provision so it does not expire
until twenty-four months after it is issued, in contrast to
non-foreclosure title commitments, which usually expire six
months after issuance.
12 The title agent's underwriter sets the cost of title
products such as a foreclosure commitment. The underwriter
sets forth costs in the title company's rate manual and
submits the manual to the Division of Insurance (DOI) for
approval. The DOI reviews the rates as part of its regulation
of the insurance industry. See § 10-4-401,
C.R.S. 2017. A title agent is bound by the rate filed with
the DOI and may not charge more or less than that rate. Div.
of Ins. Reg. 8-1-1, § 6(F)-(G), 3 Code Colo. Regs.
13 In the event that a foreclosure action is not completed
because the homeowner cures the deficiency by paying the
asserted amount due in the foreclosure action, or the
foreclosure action is otherwise cancelled or withdrawn, the
foreclosure sale does not occur and the title company cannot
issue a title insurance policy.
14 Hopp is an attorney. His law firms provided legal services
for mortgage defaults, including residential foreclosures, in
15 Through the law firms, Hopp represented loan servicers,
such as the Colorado Housing and Finance Authority, JPMorgan
Chase, and Bank of America in foreclosure proceedings. The
servicers-clients are not parties to this action.
16 Hopp owned several businesses which supported the law
firms' foreclosure services. Together with his wife, Hopp
owned a holding group, SafeHaus Holdings Group, LLC
(SafeHaus). Safehaus owned a subsidiary which performed
accounting and bookkeeping services for the law firms.
Safehaus also owned a title company, National Title, LLC,
which provided foreclosure commitments for the law firms.
Hopp was a partial owner of another title company, First
National Title Residential, LLC, which also provided
foreclosure commitments to the law firms in 2008 and 2009.
17 National Title and First National Title Residential were
authorized to issue title commitments and policies through an
underwriter, Fidelity National Title Insurance Company
(Fidelity). Fidelity's manual set forth, in relevant
part, the following rates and charges for a foreclosure
I-16 Foreclosure Commitment:
This section applies to a title commitment issued to
facilitate the foreclosure of a deed of trust, including a
policy to be issuable, within a 24-month period after the
commitment date, naming as proposed insured the grantee of a
Confirmation Deed following the foreclosure, the holder of a
certificate of redemption or the grantee upon the
consummation of a resale between the holder of a Confirmation
Deed and a bona fide third party purchaser within the
24-month hold open period. . . .
The charge will be 110% of the applicable Schedule of Basic
Rates based on the unpaid balance of the deed of trust being
In the event of a cancellation prior to the public
trustee's sale there shall be a charge of $300.00 to
$750.00, based on the amount of work performed. Cancellations
following the public trustee's sale shall be subject to
the full charges set forth in the second paragraph.
18 While representing the servicers, the law firms typically
ordered foreclosure commitments from Hopp's title
companies. National Title invoiced the law firms a charge of
110% of the schedule of basic rates upon the delivery of a
foreclosure commitment. As a routine practice, within ten
days of filing a foreclosure action, the law firms passed
this cost on to the servicers by billing and seeking
reimbursement from them for the charge of 110% of the
schedule of basic rates. This is the same amount that
Fidelity's manual listed as the charge for a
completed title insurance policy, even though a
policy had not yet been issued, and in many cases, never
would be issued if a foreclosure was cured or cancelled.
19 After a lengthy investigation into defendants' billing
practices, plaintiffs filed a civil enforcement action. Their
2014 complaint cites to the former location of the CFDCPA,
sections 12-14-101 to -137, C.R.S. 2014. The CFDCPA was
repealed and replaced in 2017 by sections 5-16-101 to -135,
C.R.S. 2017. In this opinion, we cite throughout to the
current version of the CFDCPA which, as relevant here, is not
20 The plaintiffs asserted the following claims:
. All defendants violated section
6-1-105(1)(1), C.R.S. 2017, of the CCPA by making false or
misleading statements concerning the price of services
claimed for title search costs, title commitments, and court
. The law firms and Hopp violated section
5-16-107(1)(b)(I), C.R.S. 2017, of the CFDCPA by using false,
deceptive, or misleading representations in connection with
the collection of foreclosure-related debt.
. The law firms and Hopp violated section
5-16-108(1)(a), C.R.S. 2017, of the CFDCPA by collecting
amounts that were not expressly authorized by the agreements
borrowers had signed creating their debt, or permitted by
law, and using unfair and unconscionable means to collect
sought a judgment against defendants for declaratory relief,
injunctive relief, disgorgement of unjustly obtained
proceeds, civil penalties, and attorney fees and costs.
Defendants moved to dismiss the action as untimely.
21 The district court issued numerous, detailed written
orders in this case. It denied defendants' motion to
dismiss for untimeliness prior to trial. The court again
addressed and rejected defendants' arguments that
plaintiffs' claims were barred by the statute of
limitations set forth in the CFDCPA in its detailed written
22 The district court concluded that defendants, with the
exception of Lori Hopp, violated the CCPA in their invoicing
for foreclosure commitments ordered from the affiliated title
companies. It ruled that the law firms knowingly made
"false and misleading statements of fact concerning the
price of foreclosure commitments by charging for and
collecting policy premium amounts shortly after the
initiation of the foreclosure proceeding and by representing
that these costs were actually incurred." In doing so,
the court credited the testimony that emphasized that a title
premium charge was not earned unless a policy was issued.
23 The trial court further concluded that Hopp and the law
firms violated the CFDCPA by using "false, deceptive,
and misleading representations in connection with the
collection of homeowners' debt because they falsely
represented the 110% policy premium amount as an actual,
necessary, reasonable, and actually incurred cost, when that
amount was not actually incurred by the Hopp law firms."
Hopp directed the law firms to invoice these amounts to
servicers, knowing they would be ultimately charged to
24 However, the district court concluded that the State
failed to prove its CCPA claim alleging Hopp and the law
firms engaged in deceptive trade practices when they
collected a full title policy premium from servicers, but
paid nothing - neither a policy premium nor a cancellation
fee - when it ordered title commitments through a
nonaffiliated title agency.
25 The district court declined to exercise its discretion to
order disgorgement, based on its finding that the State
failed to present trustworthy and reliable evidence that its
calculations reasonably approximated the amount of
defendants' unjustly obtained gains.
26 The court entered a permanent injunction prohibiting Hopp,
his law firms, or any other persons or entities acting under
their control, or in concert with them, from engaging in any
of the conduct that was the subject of the case,
"including claiming against homeowners in foreclosure a
policy premium for a foreclosure commitment before that cost
is actually incurred." The district court imposed
penalties on defendants under the CCPA, which were capped by
statute at $500, 000. It further imposed penalties on Hopp
and the law firms in the amount of $1, 374, 600 under the
CFDCPA. Upon consideration of defendants' motion to amend
its judgment pursuant to C.R.C.P. 59, the district court
reduced the penalties imposed under the CFDCPA to a total of
$124, 200. Because the statutory amendment allowing penalties
was not effective until July 1, 2011, the district court
recalculated the total penalty amount to include only
transactions occurring after the effective date. Ch. 121,
sec. 5, § 12-14-135, 2011 Colo. Sess. Laws 382; sec. 7,
2011 Colo. Sess. Laws at 382. The district court further
awarded the State its reasonable costs and attorney fees
incurred in enforcing the CCPA and CFDCPA. Defendants appeal
the district court's award of plaintiffs' attorney
fees and costs in a separate case, State v. Hopp,
2018 COA 71, also announced today.
Statute of Limitations for Penalties
27 Defendants contend the trial court erred by imposing
penalties under the CCPA and the CFDCPA because they were
barred by the one-year limitation period set forth in section
13-80-103(1)(d), C.R.S. 2017, as well as section 5-16-113(5),
C.R.S. 2017 (CFDCPA claims), and section 6-1-115, C.R.S. 2017
(CCPA claims). We disagree.
Standard of Review and Statute of Limitations
28 "When a claim accrues under a statute of limitations
is an issue of law. We review de novo a trial court's
application of the statute of limitations where the facts
relevant to the date on which the statute of limitations
accrues are undisputed." Kova ...