Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.
The Colorado Court of Appeals ruled plain error review applies to an unpreserved proportionality challenge to a sentence.
A jury found Arthur Walker guilty of second-degree burglary and, based on prior felony convictions, the trial court deemed him a habitual offender. Walker was sentenced to 24 years in prison as required by state statute for habitual offenders.
On appeal, the court rejected several arguments by Walker over evidence admitted to the trial and prosecutor conduct.
Walker also argued that his 24-year prison sentence is grossly disproportionate and is a cruel and unusual punishment under the Colorado Constitution and the Eighth Amendment. He did not raise this claim during trial and the state Court of Appeals considered if plain error review standards should apply to unpreserved claims about disproportionate sentencing.
In his appeal, Walker argued that plain error analysis is inappropriate since constitutional proportionality is a legal question the court should review de novo. The Colorado Court of Appeals ruled that “those two standards are not incompatible” since de novo review is the first step in plain error review of an unpreserved claim.
Looking at precedent from Colorado courts and the state Supreme Court, the Court of Appeals found that “Colorado decisions considering an unpreserved claim have recognized that, even where an appellate court reviews de novo whether an error occurred, the court cannot reverse unless the error constitutes plain error.”
After reviewing trial details, the Colorado Court of Appeals didn’t find any plain error in Walker’s sentencing and left his sentence in place.
Capital One v. Colorado Department of Revenue
Capital One finances purchases on private label credit cards offered by retailers to consumers. Customers must pay sales taxes on any tangible personal property which Capital One covers with loans through private label credit cards. Under Colorado law, retailers pay sales taxes to the Colorado Department of Revenue at the time of purchase.
Some credit card purchasers did not pay their credit card loans, and Capital One filed a series of claims with the Colorado Department Revenue asking for a $1.5 million refund in sales taxes from these “bad debt” credit cards loans between 2011 and 2013.
Under Colorado Revised Statutes 39-26-102(5), taxpayers are entitled to a credit for sales tax on certain credit sales when purchasers default. Under the statute, taxpayers are “any person obligated to account to the executive director of the [DOR] for taxes collected or to be collected.”
Capital One argued that while it did not directly give sales taxes to the DOR, it qualified as a taxpayer since the creditor and each retailer constituted a “combination” of entities “acting as a unit.”
The DOR and its director found that Capital One submitted only one contract with a retailer that supported its unit claim, but said contract specified that the companies were independent contractors meaning they are not a unit or constituents as a whole. It also found that CRS 39-26-102(5) does not offer tax refunds, only tax credits.
Capital One appealed the ruling in district court, holding its original argument that it qualified as a taxpayer by acting as a combined unit with the retailers. The district court ruled Capital One and the retailer were not a “unit,” but if they were, Capital One must seek a refund from the retailers, not the DOR. Even so, the district court found, Capital One did not identify any retailers or join them as plaintiffs. The court also agreed with the DOR’s finding that CRS 39-26-102(5) only offers tax credits.
On appeal, Capital One asked the Colorado Court of Appeals to rule, de novo, on the central definition of a taxpayer under CRS 39-26-102(5), “i.e., a ‘person’ obligated to collect and pay sales tax to the DOR.”
Using a plain language reading, the Colorado Court of appeals ruled that a “group or combination” of entities is a “person” when “the entities act as one — that is, when they join together to form an ‘inclusive whole’ or an ‘aggregate entity.’”
The court found that Capital One acted as a separate corporate identity from retailers in other purposes but also, “the constituent members must act as a ‘unit’ for purposes of paying sales tax,” which Capital One did not, leaving retailers to pay the DOR.
Capital One doesn’t qualify as a taxpayer under CRS 39-26-102(5), the Colorado Court of Appeals ruled, and it affirmed the district court’s judgment.
Eric Garcia v. Puerto Vallarta Sports Bar, LLC
Eric Garcia claims he was injured in the parking lot of Puerto Vallarta Sports Bar in October 2017. Garcia filed a civil complaint against the bar, claiming negligence, premises liability, negligent hiring, supervision, training and/or retention and respondeat superior.
In the complaint, district court civil summons and district court cover sheet, the bar’s name was identified as “Puerta Vallarta Sports Bar, LLC, a Colorado Limited Liability Company doing business as Puerto Vallarta Sports Bar.” The manager on duty was given the affidavit but the bar never responded to the complaint.
Garcia filed a motion for default judgment which the district court granted. The motion granted $78,940.16 to Garcia against “Puerta Vallarta Sports Bar, LLC, a Colorado Limited Liability Company doing business as Puerto Vallarta Sports Bar.” Six months later, Garcia filed a notice of hearing to try to collect the judgment which included an affidavit that the bar’s owner, Ramiro Montes, was served to attend and produce documents at the hearing.
At the hearing, Montes requested more time from the court to produce subpoenaed documents. He acknowledged that the lawsuit had been ongoing, his wife had been very sick for a while and recently died, adding that “I kind of ignored everything, you know. I wish I — it’s not right, but I did.”
Montes’ attorney filed motions for post-judgment relief under Rule 60, motions to stay enforcement of the judgment and to attend the case’s Rule 69 hearing. In the hearing, Montes’ attorney argued that the entity listed on the complaint — Puerta Vallarta Sports Bar — didn’t exist since the bar was actually named Puerto Vallarta Sports Bar.
Garcia’s attorneys filed a 60(a) motion to correct the misspelling, which was granted.
Later, Montes’ filed a motion to set aside the summary judgment, claiming that by serving the affidavit to the bar’s manager on duty, he was not properly served.
The district court ruled in favor of Garcia, finding that the court could properly correct the misspelling under 60(a) and that Montes waived his right to challenge service of process since he didn’t bring it up when first challenging the enforceability of the judgment.
On appeal, Montes and Puerto Vallarta Sports Bar argued the lower court erred in amending the pleadings and default judgment to correct the misspelling and by not setting aside the default judgment based on invalid service of process.
The Colorado Court of Appeals rejected both arguments.
Allowing the 60(a) motion “merely corrected a misnomer, it didn’t add a stranger to the action and Garcia wasn’t required to re-serve PVSB,” the court found. While the bar’s name was initially misspelled on the service of process, the court ruled de novo that Montes waived that appeal by not making a timely claim.
The Colorado Court of Appeals affirmed the district court’s orders and judgments.
Editor’s note: a court opinion summary was redacted from this article on May 10, 2024, upon request.