Colorado Supreme Court Round-Up (01/22/08)


1) Flood v. Mercantile Adjustment Bureau, LLC, No. 06SC699 (pdf, 33 pages).

Plaintiff bought a used car from a dealer and financed the purchase. When plaintiff lost her job and missed several payments, the finance company repossessed the car and sold it for an amount less than the loan balance. The finance company turned over the deficiency to debt-collecting piece of shit Mercantile Adjustment Bureau for collection.

MAB uses a mailing service to print and mail its debt collection letters. MAB emails the information to the service, which uses a wholly automated process to print the letters, stuff them into envelopes and mail them to debtors.

After receiving a collection letter, the plaintiff sued MAB in county court for violating two provisions of the Colorado Fair Debt Collection Practices Act. The county court found for MAB on both issues and the district court affirmed.

By a 4-3 vote, the Supreme Court reversed in part. The Court adopted the “least sophisticated consumer” standard that federal courts use in interpreting the federal FDCPA and held that the dunning letter violated the notice provisions of C.R.S. § 12-14-109.  The letter was, in the majority’s view, contradictory in two respects. First, it impliedly encouraged the debtor to resolve the debt via contacting MAB by phone. (Calling the “person” whose name appears on the letter’s signature line would have done little good, seeing as how no such person exists.) However, a debtor’s statutory rights to request verification and dispute the debt can only be exercised in writing. The language advising the debtor of that fact was buried in fine print at the end of the letter.

Second, the letter set forth conflicting deadlines. It contained a date certain for resolving the debt by accepting MAB’s settlement offer. That date was 39 days after the date on the letter.  Elsewhere the letter says that the debtor has 30 days to dispute the debt in writing. For those two reasons, the majority concluded that the letter was “likely to confuse the least sophisticated consumer” about the rights conferred by CFDCPA.

The plaintiff also alleged that MAB’s use of a mailing service violated C.R.S. § 12-14-105(2), which generally prohibits debt collectors from communicating with “third parties.” The Court unanimously disagreed. The purpose of the non-communication statute is prevention of the coercion, harassment and embarrassment inherent in debt collectors calling family, friends, neighbors, employers, etc. of the debtor. The Court found that no such dangers were involved with MAB’s use of an automated third-party mailing service.

Justices Eid, Rice and Coats dissented in part, concluding that MAB did nothing wrong at all in this case.

2) Lanahan v. Chi Psi Fraternity, No. 07SA113 (pdf, 19 pages).

Plaintiff’s son was a pledge at the University of Colorado chapter of Chi Psi Fraternity. Seven douchebag frat boys took the plaintiff’s son and other pledges to a secluded off-campus spot and made the pledges drink alcohol to the point of shitfacedness and beyond. The douchebag frat boys returned the plaintiff’s son to the frat house, dumped him on a couch and gave him a bucket to catch the rather alarming amount of vomit. The douchebags didn’t seek medical assistance and actively prevented others from doing so. By the time paramedics were called at 9:00 the following morning, the plaintiff’s son was dead.

Plaintiff filed a wrongful death action against the UC chapter, the national fraternity and the seven douchebags. Colorado law, specifically C.R.S. § 13-21-203, caps recovery of non-economic damages in wrongful death cases. The current inflation-adjusted cap is $341,250. The issue was whether the cap applied to the entire case or on a per-defendant basis.

The Supreme Court held unanimously that the cap applied per-case. Thus, the plaintiff’s maximum recovery of non-economic damages is capped at $341,250 regardless of how many of the nine defendants are ultimately adjudged liable. Another victory for tort “reform,” albeit an expected victory.

Petitions for Rehearing:

1 denied, none granted.

Petitions for Certiorari:

33 denied, 3 granted. Painfully boring stuff:

1) Huber v. Kenna, No. 07SC757:

Whether the court of appeals erred in refusing to apply a 2006 tax statute, which expressly limits tenants in common to a single $100,000 credit and expressly applies to any easement donated after 1999, to the respondents’ 2000 easement.

2) Fierro v. People, No. 07SC788:

Whether the court of appeals erred when it determined that the trial court imposed an illegal sentence in a probation revocation setting by sentencing petitioner to a term of imprisonment other than the original, suspended Department of Corrections’ sentence.

3) Acoustic Marketing Research, Inc. v. Technics, L.L.C., No. 07SC789:

Whether an award of damages based on future royalties payable on a per-unit-produced basis pursuant to a written agreement is speculative when that agreement includes an explicit provision that allows, upon payment of a specified sum, discontinuance or abandonment of production for any reason.

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