People v. Foos

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.

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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

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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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