Omid Shekarchian and Nationwide Telecom U.S. Corp, a Colorado corporation, Plaintiffs-Appellees,
v.
Maxx Auto Recovery, Inc., Defendant-Appellant.
City
and County of Denver District Court No. 17CV30557 Honorable
Elizabeth A. Starrs, Judge
DLG
Law Group LLC, Michael J. Davis, Cassandra S. Wich, Denver,
Colorado, for Plaintiffs-Appellees
Elkus
& Sisson, P.C., Reid J. Elkus, Lucas Lorenz, Denver,
Colorado, for Defendant-Appellant
OPINION
HARRIS
JUDGE
¶
1 Defendant, Maxx Auto Recovery, Inc., appeals from a
judgment entered in favor of plaintiffs, Omid Shekarchian and
his company, Nationwide Telecom U.S. Corp, [1] on their claim
under the Colorado Consumer Protection Act (CCPA).
¶
2 Maxx Auto runs a repossession service and impound lot. It
repossessed and impounded Shekarchian's car, then refused
to return it unless Shekarchian agreed to sign a form release
- before seeing the car - representing that he had
"carefully examined" the car and had "made
sure that there [was] no damage" and releasing Maxx Auto
from any claims. The district court found that Maxx Auto
routinely required car owners to sign the release without an
opportunity to inspect their vehicles and determined that the
practice violated the CCPA.
¶
3 On appeal, Maxx Auto contends that the district court
clearly erred in finding that it had engaged in the
challenged conduct, and that, even if it had, the conduct did
not violate the CCPA. Furthermore, it says, the court applied
an incorrect standard in determining that it had acted in bad
faith and awarding treble damages.
¶
4 We conclude that Maxx Auto's standard practice of
demanding that car owners execute a release containing
misrepresentations to avoid potential liability constitutes
an unfair or deceptive trade practice under the CCPA and that
the practice significantly impacted the public. But we agree
with Maxx Auto that the court misapplied the standard of
proof in awarding treble damages.
¶
5 Accordingly, we reverse the damages award and remand for
reconsideration under the proper standard. In all other
respects, we affirm the judgment.
I.
Background
¶
6 Shekarchian bought the car under a retail installment
agreement with BMW Financial Services (BMW FS). He later
failed to make payments in accordance with the agreement, and
BMW FS hired Maxx Auto to repossess the car. Maxx Auto towed
the car to its secure impound lot.
¶
7 About a month later, Shekarchian paid off the loan and BMW
FS released its lien. But when Shekarchian appeared at the
impound lot to recover his car, Maxx Auto refused to release
it unless Shekarchian signed a form release, prior to any
inspection, representing that he had carefully inspected the
car and its contents, agreeing that there was no damage, and
releasing Maxx Auto from any claims:
In sole consideration of the delivery to me of the above
described vehicle and personal property, I agree that I have
carefully examined the above described vehicle and made sure
that there is no damage, other than any pre-existing damage
marked and accounted for on the vehicle condition report. I
further agree that I have examined all personal belongings
that were left in the above vehicle and that everything is
accounted for and has no damage.
By signing this Release, I fully understand the above
statements and do agree to Release and Hold Harmless Maxx
Auto Recovery . . . from all claims, demands and or actions,
which I . . . may have against Maxx Auto Recovery . . . .
¶
8 Shekarchian noted that the release contemplated a prior
examination and asked to see his car, but Maxx Auto's
employee refused to retrieve it until he obtained a signed
release. Eventually, Shekarchian left the lot without his
car.
¶
9 Shekarchian then filed this lawsuit, asserting, as relevant
here, a claim under the CCPA and a claim for replevin. After
a hearing on the replevin claim, the district court ordered
Maxx Auto to return the car to Shekarchian. By that time,
though, the car had been parked in the impound lot for more
than seven months, and it needed repairs because of the
protracted storage.
¶
10 The case proceeded to a bench trial on Shekarchian's
CCPA claim and Maxx Auto's counterclaim for additional
storage fees. In a well-reasoned written order, the district
court found that Maxx Auto routinely forced vehicle owners to
"endorse a false statement on a release so that [it]
could escape liability for harms it may have caused" its
customers and that this practice was "plainly unfair and
deceptive" within the meaning of the CCPA. The court
entered judgment in favor of Shekarchian on his claim and
Maxx Auto's counterclaim, awarded damages in the amount
of the cost of repairs, and then trebled the damages upon a
finding, "by a preponderance of the evidence," that
Maxx Auto had engaged in bad faith conduct pursuant to
section 6-1-113(2)(a)(III), C.R.S. 2018.
¶
11 On appeal, Maxx Auto first argues that neither Shekarchian
nor his company has standing to bring a CCPA claim. As for
the merits, Maxx Auto contends that it did not engage in the
conduct forming the basis of the court's finding of a
CCPA violation, and that, in any event, the conduct is not an
unfair or deceptive trade practice that significantly impacts
the public, as required by the CCPA. Maxx Auto also contends
that the court erred in awarding treble damages.
II.
Standing Under the CCPA
¶
12 At trial, Shekarchian testified that the cost of repairs
to his car was paid by a nonparty company of which he was the
owner. Maxx Auto contends that because a nonparty incurred
the cost of repairs, neither Shekarchian nor Nationwide
Telecom U.S. Corp is the real party in interest under
C.R.C.P. 17(a) and, therefore, neither plaintiff has standing
to bring a CCPA claim. We disagree.
A.
Preservation and Standard of Review
¶
13 Maxx Auto appears to conflate the real party in interest
doctrine with the concept of standing. To the extent it
presents an independent argument under Rule 17, we conclude
that it has waived the argument, and so we address only its
claim challenging plaintiffs' standing.
¶
14 At trial, Shekarchian testified about the somewhat
complicated ownership status of the car. Upon learning that
the car was partly owned by a subsidiary of the named
plaintiff company, rather than the named company itself, Maxx
Auto initially moved to dismiss on the grounds that "the
proper party" had not been named and that Shekarchian
did not have standing. But after further explanation by
Shekarchian, Maxx Auto's counsel appeared to agree that
the issue had been sufficiently clarified and resolved,
prompting Shekarchian's counsel to ask, "[S]o is he
withdrawing his motion to dismiss?" The court responded,
"Well, I'm denying the motion to dismiss," to
which Maxx Auto's counsel added, "Yeah. I - I think
that ship has sailed. I - I think it's a little
clearer."
¶
15 We construe Maxx Auto's counsel's comments as a
withdrawal of its claim that neither plaintiff was a
"proper party." Therefore, Maxx Auto has waived
review of that claim on appeal. See, e.g.,
Marriage of Corak, 2014 COA 147');">2014 COA 147, ¶ 23 ("A
litigant who abandons an argument in the trial court likewise
abandons it for the purposes of appeal."); see also
Ajay Sports, Inc. v. Casazza, 1 P.3d 267, 272 (Colo.App.
2000) (party waives real party in interest claim if it fails
to raise the claim "in a timely manner" in the
district court).
¶
16 Later, Shekarchian testified that a nonparty company had
paid the cost of repairs. But this time, Maxx Auto argued
only that, as a consequence of the nonparty's payment,
neither Shekarchian nor the named company had standing to
pursue a claim under the CCPA. The court did not separately
address standing in its written order, and, while we
generally require a party to request a ruling in order to
preserve an issue for appeal, see Herrera v.
Anderson, 736 P.2d 416, 418 (Colo.App. 1987), the rule
does not apply to a claim challenging standing, which may be
raised at any time, Anson v. Trujillo, 56 P.3d 114,
117 (Colo.App. 2002).
¶
17 Whether a plaintiff has standing to sue is a question of
law that we review de novo. Ainscough v. Owens, 90
P.3d 851, 856 (Colo. 2004).
B.
Analysis
¶
18 The CCPA incorporates as elements of a claim the
traditional standing requirements: an injury in fact to a
legally protected interest. See ...