Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.
The Colorado Court of Appeals affirmed an order involving restitution.
According to the Court of Appeals opinion, Darryl Johnson worked as a loss prevention officer for Walmart. In that capacity, Johnson had access to a barrel key which he was accused of using to steal cash from registers and electronics. When confronted, Johnson admitted to the thefts. Prosecutors charged him with third-degree burglary and theft of between $2,000 and $5,000.
The initial investigation showed Johnson stole property valued at $3,097.59. A month later, an investigating officer received a witness statement from another loss prevention officer who reported the actual value of the stolen property was between $10,000 and $11,000. The officer submitted a supplemental report to prosecutors in February 2020 with a recommendation to amend the theft charge and booked 13 surveillance videos into evidence.
The prosecutor elected to not amend the theft charge based on the supplemental report. On June 9, 2020, Johnson pleaded guilty to theft as a class 6 felony and to an added count of theft as a class 1 misdemeanor in exchange for the dismissal of the third-degree burglary count.
According to the appeals court opinion, the prosecutor agreed to deferred judgment on the felony theft for three years and to enter a concurrent probationary sentence for the misdemeanor theft count. The plea agreement set forth the parties’ agreement for restitution. It provided Johnson pay all restitution within the term of the original sentence and pay restitution for all counts and cases governed by the plea agreement including counts and/or cases dismissed as part of the plea agreement. The agreement added the district attorney’s office would act in good faith to provide correct information establishing the amount of restitution within 91 days of sentencing. Additionally, the agreement stated Johnson agreed to pay restitution in an amount that would be determined within 91 days.
The district court accepted the plea agreement, ordered the prosecutor to provide the restitution amount within 91 days and gave the defense 60 days to object.
Following the plea, the prosecution’s senior restitution coordinator requested Walmart’s losses based on the February supplemental report. On Aug. 26, 2020, the coordinator followed up by phone. Walmart provided the coordinator with an in-house report and an accompanying narrative report Sept. 2, 2020 detailing each of the items and cash amounts taken and noting offsets for recovered items.
Walmart calculated the total loss from Johnson’s actions at $11,030.30. The coordinator prepared a restitution payout order requesting that amount in restitution that was filed with the court Sept. 8, 2020 (the 91st day after the plea and sentencing). The district court signed the order that day.
On Oct. 2, 2020, Johnson filed an objection to the restitution amount and requested a hearing. After many continuances requested by both sides, the court conducted an in-person hearing March 23, 2021, where the coordinator and investigating officer testified.
Johnson’s counsel argued the court’s Sept. 8, 2020 order didn’t constitute a final determination because the statute contemplated a restitution hearing if necessary, followed by a final determination within the 91-day timeframe, as well as the opportunity for the defense counsel to object within 91 days. His counsel added that if an objection couldn’t occur within 91 days, “that would be good cause to extend the 91-day determination and the DA [district attorney] would be able to argue at the same time that would be good cause as well, which is what the statute allows.”
Johnson further argued the complaint placed him on notice of restitution in the range of $2,000-$5,000, his plea subjected him to an amount in the $3,000-$4,000 range and that meant the court’s order in excess of $11,000 violated his due process rights.
The prosecutor argued her office didn’t receive the final documentation from Walmart until six days before the 91st day and cases like Johnson’s are the reason statute allows the court to extend 91 days for good cause. The prosecutor also argued the court’s Sept. 8, 2020 order constituted a restitution determination, and the defense’s objection constituted good cause to extend the 91 days for a final determination.
The prosecutor reasoned it would be absurd to interpret the statute as requiring all objections and hearings be concluded within 91 days because that type of process wasn’t feasible and would permit a defendant to continue the hearing beyond the 91st day to avoid restitution completely.
As for the amount of restitution, the prosecutor argued the officer’s February 2020 supplemental report stating the actual amount of restitution ranged from $10,000-$11,000 sufficiently notified Johnson of potential restitution before he entered a plea.
The defense counsel clarified he was only arguing the initial restitution request on the 91st day didn’t allow the court to make that final determination and stated the defense challenging the restitution would constitute good cause.
The district court rejected Johnson’s due process argument and found the charging document didn’t control the amount of restitution. It also found the plea agreement documents refuted the due process argument.
The lower court also applied a previous Court of Appeals case in People v. Weeks (Weeks I) and found the 91 days wasn’t jurisdictional, it had discretion to determine restitution beyond 91 days for good cause and it could determine good cause after 91 days. The court also found Johnson’s objection and request for hearing, made in accordance with the sentencing order, constituted good cause to conduct a hearing and determine restitution beyond 91 days. It also found the coordinator’s testimony satisfied the preponderance of evidence standard and ordered restitution in the amount requested.
Johnson contended the court violated the restitution statute by imposing it past the 91-day deadline without good cause and argued his objection beyond the 91-day deadline didn’t constitute good cause. Johnson also challenged the amount of restitution and claimed the court deprived him of due process by ordering restitution in an amount not authorized by his guilty plea.
The appeals court contended the record showed the restitution information wasn’t available to the prosecution at the time of Johnson’s plea and the court complied with Colorado Revised Statute 18-1.3-603(1)(b) by accepting the parties’ agreement that the prosecutor would provide a restitution amount within 91 days of conviction.
The appeals court further concluded the prosecutor complied with the plea agreement and CRS 18-1.3-603(2)(b) by providing the restitution amount on the 91st day; the court complied with CRS 18-1.3-603(1)(b) by entering the restitution order on the 91st day; and the court’s standing case management order permitting the defense to object to restitution within 30 days (discussed at the plea and sentencing hearing), coupled with its order at sentencing granting the defense 60 days to object to the restitution order entered, constituted good cause under CRS 18-1.3-603(2)(b) to permit entry of a final restitution order beyond 91 days.
The appeals court also didn’t find error in the amount of restitution ordered because Johnson agreed, as part of the plea agreement, to pay restitution in connection with the dismissed cases, dismissed counts and counts the prosecutor agreed not to file.
The appeals court affirmed the order.
Colorado Court of Appeals Judge Craig Welling specially concurred, agreeing with the majority’s analysis in all aspects besides one. In Welling’s view the appeals court didn’t need to reach the issue of whether the record established the restitution information was available to the prosecution at the time the court took Johnson’s plea and entered his sentence.
Colorado Court of Appeals Judge David Furman dissented. Furman concluded the lower court didn’t enter a restitution order that complied with CRS 18-1.3-603(1). Furman wrote he “would reverse the court’s untimely restitution order and remand this case with directions for the district court to enter a restitution order in the amount of zero.”
Heights Healthcare Company, LLC v. BCER Engineering, Inc.
The Colorado Court of Appeals unanimously affirmed in part, reversed in part and remanded a construction defect case.
Heights Healthcare Company, LLC owns the senior living community Peaks Care Center. Under a written contract, BCER Engineering, Inc. agreed to provide mechanical and electrical consulting services to develop a full set of construction documents and contract administration for installing packaged terminal air conditioner units in 84 residential rooms at the center. The contract contained a limitation on BCER’s liability equivalent to “total fee for services rendered” at $22,500.
After installation, Heights Healthcare found the units didn’t operate as expected. When the outdoor temperature dropped too low, the electrical system couldn’t run more than seven of the 84 installed PTAC units at the same time without tripping the breaker and shutting down the whole system.
After finding the suspected defect, Heights Healthcare filed suit against BCER alleging breach of contract under the Construction Defect Action Reform Act. Before trial, BCER filed a motion to determine a question of law under Colorado Rule of Civil Procedure 56(h), seeking a determination that the limitation of liability is enforceable. After briefing by the parties, the court granted BCER’s motion.
After a bench trial, the court issued an order finding BCER had breached its contract with Heights Healthcare by failing to design a proper electrical system to support the full heating functionality of the PTAC units. Due to the court’s pretrial ruling, Heights Healthcare was awarded $17,500 in damages, which was the amount stipulated to by the parties, subject to their respective appellate rights.
In a footnote of the appeals court opinion, it said in light of the trial court’s determination the limitation of liability in the contract was enforceable, the parties entered into a pre-trial stipulation for damages. The parties stipulated if the trial court found BCER liable, Heights Healthcare would be entitled to damages of $22,500, which was the total fee of services rendered per the contract. And since BCER already paid $5,000 to Heights Healthcare for the mobilization of generators to power the PTAC units, potential damages would be limited to the remaining $17,500. The stipulation also allowed Heights Healthcare to appeal the trial court’s orders.
Heights Healthcare contended on appeal the trial court’s determination that the limitation of liability provision in the parties’ contract was enforceable, notwithstanding Colorado Revised Statute 13-20-806(7)(a) of the Homeowner Protection Act, was erroneous. BCER cross-appealed, contending the trial court erred finding Heights Healthcare didn’t materially breach the contract first and BCER’s liability shouldn’t be reduced by Heights Healthcare’s pro rata share of the fault.
The appeals court wrote HPA amended CDARA and provided that any express waiver of, or limitation on the legal rights, remedies or damages provided by CDARA to claimants asserting claims that arise out of residential property are void as against public policy.
Applying HPA, the appeals court wrote, the trial court determined the limitation of liability clause in the parties’ contract was enforceable because the property in question in the case was zoned commercial at the time the parties entered into the contract.
In 2017, in the Colorado Court of Appeals case Broomfield Senior Living Owner, LLC v. R.G. Brinkmann Co., a division of the appeals court held HPA’s prohibition against limiting the accrual of claims protected the owners of a senior living facility where the property was located on a parcel zoned for residential use only.
In the current case, the appeals court needed to decide a question left open by the division in Broomfield: whether residential living quarters of a senior living community located on a parcel zoned commercial or mixed use constitutes residential property protected by HPA. The appeals court concluded it does.
Based on that conclusion, the appeals court reversed the trial court’s determination the limitation on liability is valid and enforceable. The appeals court also concluded the record supports the trial court’s findings that BCER breached the parties’ contract and that breach isn’t excused by an alleged breach by Heights Healthcare.
The appeals court reversed the trial court’s judgment in part, affirmed in part and remanded the case for further proceedings on the issue of damages.