COLORADO COURT OF APPEALS 2016COA116
Court of Appeals No. 15CA0485 City and County of Denver District Court No. 14CV34290 Honorable Herbert L. Stern, III, Judge
Francis Ybarra,
Plaintiff-Appellant,
v.
Greenberg & Sada, P.C., a Colorado corporation,
Defendant-Appellee.
JUDGMENT AFFIRMED
Division V Opinion by JUDGE BERGER Román and Bernard, JJ., concur
Announced August 11, 2016
Vedra Wali LLC, Daniel Vedra, Ahson Wali, Denver, Colorado, for Plaintiff- Appellant
Greenberg & Sada, P.C., Alan Greenberg, Englewood, Colorado, for Defendant- Appellee
Murr Siler & Accomazzo, P.C., Jamie G. Siler, James Eckels, Kimberly L. Martinez, Denver, Colorado, for Amicus Curiae Colorado Creditor Bar Association
Cynthia H. Coffman, Attorney General, Nikolai N. Frant, Assistant Attorney General, Denver, Colorado, for Amicus Curiae Administrator of the Uniform Consumer Credit Code ¶1 This case presents the novel question whether the Colorado
Fair Debt Collection Practices Act (CFDCPA), sections 12-14-101 to
-137, C.R.S. 2015, applies to a subrogation claim for damages
arising from a tortious act. The answer turns on whether a
subrogation claim constitutes a “debt” as defined in the CFDCPA.
We conclude that a subrogation claim is not a “debt” under the
CFDCPA and therefore affirm the district court’s judgment
dismissing the complaint of plaintiff, Francis Ybarra.
I. Relevant Facts and Procedural History
¶2 Ybarra drove her car into a parked car insured by State Farm
Auto Insurance Company (State Farm). Ybarra was uninsured.
State Farm paid its insured for the damages to the vehicle, and
thus it became a subrogee, both by the terms of the State Farm
insurance policy and Colorado common law, of the insured’s
negligence claim against Ybarra. Bainbridge, Inc. v. Travelers Cas.
Co. of Conn., 159 P.3d 748, 751 (Colo. App. 2006) (discussing
common law subrogation).
¶3 State Farm, in its capacity as subrogee, hired defendant, the
law firm of Greenberg & Sada, P.C. (law firm), to sue Ybarra for
1 negligence. When Ybarra did not respond to State Farm’s
complaint, a default judgment was entered against her.
¶4 In a separate suit, which is the subject of this appeal, Ybarra
sued the law firm, alleging that it violated the CFDCPA’s venue
provisions as well as prohibitions against making false
representations and using deceptive means to collect a debt when it
obtained judgment against her. §§ 12-14-107(1)(b)(I), (1)(k), -
111(1)(b), C.R.S. 2015. The law firm moved to dismiss Ybarra’s
claim for failure to state a claim under C.R.C.P. 12(b)(5), asserting
that a subrogation claim was not a “debt” subject to the CFDCPA.
¶5 The district court granted the law firm’s motion, holding that
“the Act only applies to consensual consumer transactions, not [to]
judgments arising from negligence claims.” Ybarra appeals the
court’s dismissal of her complaint, arguing that the CFDCPA
applies to subrogation claims arising from a tort.
II. Standard of Review
¶6 We review de novo the district court’s grant of a motion to
dismiss. BRW, Inc. v. Dufficy & Sons, Inc., 99 P.3d 66, 71 (Colo.
2004); Fry v. Lee, 2013 COA 100, ¶ 17. In reviewing a motion to
dismiss, we accept all matters of material fact in the complaint as
2 true and view the allegations in the light most favorable to the
plaintiff. Town of Alma v. AZCO Constr., Inc., 10 P.3d 1256, 1259
(Colo. 2000). Even so, a complaint must “state a claim for relief
that is plausible on its face.” Warne v. Hall, 2016 CO 50, ¶¶ 1-2
(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).1
III. The Meaning of “Debt” Under the CFDCPA
¶7 Ybarra argues that the district court misinterpreted the
CFDCPA in dismissing her claim. We disagree.
¶8 Statutory interpretation is a question of law which we review
de novo. Smith v. Exec. Custom Homes, Inc., 230 P.3d 1186, 1189
(Colo. 2010). In interpreting a statute, our primary goals are to
discern and give effect to the General Assembly’s intent. Krol v. CF
& I Steel, 2013 COA 32, ¶ 15. We look first to the statutory
language, giving words and phrases their plain and ordinary
meanings according to the rules of grammar and common usage.
§ 2-4-101, C.R.S. 2015. We read the language in the dual contexts
1 Warne v. Hall, 2016 CO 50, was decided after the district court dismissed Ybarra’s complaint. Because the standard for dismissal under C.R.C.P. 12(b)(5), as established in Warne, is now the law, we must apply it. However, the question presented in this case is the purely legal question whether a subrogation claim is a “debt” within the meaning of the CFDCPA. Thus, the change in the law effected by Warne does not affect the result of this case.
3 of the statute as a whole and the comprehensive statutory scheme,
giving consistent, harmonious, and sensible effect to all of the
statute’s language. Krol, ¶ 15. If the statutory language is
susceptible of more than one reasonable interpretation, it is
ambiguous, and only then will we apply interpretive aids to
ascertain the General Assembly’s intent. Vanderborgh v. Krauth,
2016 COA 27, ¶ 9.
¶9 The CFDCPA defines “debt” as “any obligation or alleged
obligation of a consumer to pay money arising out of a transaction,
whether or not such obligation has been reduced to judgment.”
§ 12-14-103(6)(a), C.R.S. 2015. The CFDCPA does not define the
word “transaction.” Therefore, we must determine the meaning of
the word “transaction.” But if Ybarra’s obligation to pay money to
State Farm did not arise from a “transaction,” it is not a “debt”
subject to the CFDCPA.
¶ 10 To determine the meaning of “transaction,” we may consult
definitions contained in recognized dictionaries. Union Ins. Co. v.
Houtz, 883 P.2d 1057, 1068 (Colo. 1994). Black’s Law Dictionary
offers four definitions of the word “transaction”:
4 1. The act or an instance of conducting business or other dealings; esp., the formation, performance, or discharge of a contract. 2. Something performed or carried out; a business agreement or exchange. 3. Any activity involving two or more persons. 4. . . . An agreement that is intended by the parties to prevent or end a dispute and in which they make reciprocal concessions.
Black’s Law Dictionary 1726 (10th ed. 2014).
¶ 11 Ybarra asserts five arguments to support her contention that a
car accident is a “transaction” under the CFDCPA, and that
therefore her alleged obligation to pay State Farm is a “debt” within
the meaning of the CFDCPA.
A. Remedial Statutes Should Be Construed Broadly
¶ 12 Ybarra first argues that the General Assembly intended courts
to apply the third (and most expansive) definition of “transaction” in
Black’s Law Dictionary: “[a]ny activity involving two or more
persons.” She points out that courts interpreting the CFDCPA’s
federal counterpart, the Fair Debt Collection Practices Act (FDCPA),
15 U.S.C. § 1692 (2012), have held that it should “be construed
liberally in favor of the consumer” to effectuate the FDCPA’s
purpose of protecting consumers from harassing and abusive debt
collection practices. Johnson v. Riddle, 305 F.3d 1107, 1117 (10th
5 Cir. 2002). Because the CFDCPA is based on the FDCPA, Ybarra
claims that the General Assembly intended for the CFDCPA to apply
to negligence judgments arising from car accidents. See Udis v.
Universal Commc’ns Co., 56 P.3d 1177, 1180 (Colo. App. 2002)
(noting that the CFDCPA is based on the FDCPA).
¶ 13 Following authority from another division of this court and
federal cases, we reject this argument. We find the reasoning in
Rector v. City & County of Denver, 122 P.3d 1010 (Colo. App. 2005),
and the Eleventh Circuit’s decision in Hawthorne v. Mac
Adjustment, Inc., 140 F.3d 1367 (11th Cir. 1998), persuasive. See
also Turner v. Cook, 362 F.3d 1219, 1228 (9th Cir. 2004) (following
Hawthorne).
¶ 14 A variation of the question before us was addressed in Rector.
The issue in that case was whether late fees assessed for parking
meter violations constituted “debt” under the CFDCPA. Rector, 122
P.3d at 1016. In deciding that question, the division addressed
whether parking meter fees arise out of a “transaction.” The
division concluded that they did not because regulation of metered
parking is an exercise of Denver’s police power, as opposed to a
rendition of a service to consumers, and is therefore outside the
6 scope of a consumer transaction. Id. The division relied on
Staub v. Harris, 626 F.2d 275, 278 (3d Cir. 1980), which, in
interpreting the FDCPA, held that “at a minimum, the statute
contemplates that the debt has arisen as a result of the rendition of
a service or purchase of property or other item of value.”
¶ 15 We agree with Rector’s interpretation of the word “transaction.”
Though, as Ybarra correctly argues, Black’s Law Dictionary offers
one very broad alternative definition of the word “transaction,” the
word’s primary definition is much more limited: “[t]he act or an
instance of conducting business or other dealings.” Black’s Law
Dictionary 1726 (10th ed. 2014). Under Ybarra’s construction of
“transaction,” any obligation to pay another would be covered by
the CFDCPA. But, had the legislature intended that the statute
apply to any obligation to pay another, it would not have limited the
definition of “debt” to those obligations “arising out of a
transaction.” § 12-14-103(6)(a); Denver Publ’g. Co. v. Bd. of Cty.
Comm’rs, 121 P.3d 190, 195 (Colo. 2005) (when construing
statutory language, the appellate court interprets every word,
rendering none superfluous).
7 ¶ 16 The fact that an undefined word in a statute has more than
one dictionary definition does not necessarily render either the word
or the statute ambiguous. A division of this court has rejected that
precise argument, and so do we. Stoesz v. State Farm Mut. Auto.
Ins. Co., 2015 COA 86, ¶¶ 14-16; see also Miss. Poultry Ass’n v.
Madigan, 31 F.3d 293, 307 (5th Cir. 1994). As we concluded above,
the plain language (and context) of the CFDCPA precludes equating
a “transaction” with “any activity involving two or more persons.”
Thus we are left with only one reasonable interpretation of the word
“transaction,” which requires some kind of business dealing.
Rector, 122 P.3d at 1016.
¶ 17 Ybarra argues that Rector is factually distinguishable from this
case. That is true. But Rector did address, correctly in our view,
the meaning of the word “transaction” in the CFDCPA, and that
analysis strongly supports the district court’s conclusion that a
subrogation claim is not a “debt” within the meaning of the
CFDCPA.
¶ 18 Moreover, if the General Assembly disagreed with Rector’s
interpretation of the word “transaction” under the CFDCPA, it has
had eleven years to countermand that interpretation by legislative
8 amendment. Pueblo Bancorporation v. Lindoe, Inc., 63 P.3d 353,
360 (Colo. 2003) (“[I]f the legislature disapproves of our
interpretation, it has the power to amend the statute to make its
intention clear.”). The fact that the General Assembly has not
disturbed Rector’s holding should, and does, give us pause to decide
the meaning of “transaction” differently from the way it was decided
in Rector.
¶ 19 The Eleventh Circuit’s interpretation of “debt” under the
FDCPA in Hawthorne further supports our conclusion. In that
case, the Eleventh Circuit considered almost exactly the question
now before us: whether a subrogation claim arising from a tort was
a “debt” under the FDCPA. Relying on Webster’s New Collegiate
Dictionary (1979) and Webster’s New World Dictionary (2d ed.
1986), the court concluded that “[t]he ordinary meaning of
‘transaction’ necessarily implies some type of business dealing
between parties.” Hawthorne, 140 F.3d at 1371. Thus,
“transactions” do not include “damage obligations thrust upon one
as a result of no more than her own negligence.” Id. We think that
Hawthorne was correctly decided and we apply it here.
9 ¶ 20 We also reject Ybarra’s argument that any reliance on
Hawthorne is misplaced because that case interpreted the FDCPA,
which has a different definition of “debt” from that in the CFDCPA.
Under the FDCPA, a “debt” is “any obligation or alleged obligation of
a consumer to pay money arising out of a transaction in which the
money, property, insurance, or services which are the subject of the
transaction are primarily for personal, family, or household purposes,
whether or not such obligation has been reduced to judgment.”
15 U.S.C. § 1692a(5) (emphasis added).
¶ 21 We acknowledge that the state and federal definitions of “debt”
are not identical. Still, we conclude that those differences do not
negate the applicability of Hawthorne’s holding that not all
obligations to pay money are “debts.” Under the FDCPA, only
personal, family, or household debts are covered, while the
CFDCPA’s definition of “debt” does not contain this limitation. But
this difference only limits the FDCPA’s applicability to debts arising
from certain types of transactions. It does not displace the
requirement, contained in both the federal and Colorado statutes,
that the debt must arise from a “transaction.”
10 ¶ 22 Because a car accident can only be considered a “transaction”
under a strained interpretation of the CFDCPA, we conclude that a
subrogation claim arising from a car accident is not a “debt” under
the CFDCPA. Indian Mountain Metro. Recreation & Park Dist. v. J.P.
Campbell & Assoc., 921 P.2d 65, 67 (Colo. App. 1996) (“if the
language of the statute is plain, its meaning clear, and no absurdity
results, no strained interpretation should be adopted.”).
B. Consensual Transaction
¶ 23 Ybarra next contends that the district court erred in holding
that a debt must arise from a “consensual” transaction to be
covered under the CFDCPA. We need not consider this argument
because we have held, above, that a subrogation claim arising from
tortious activity is not a “transaction” within the meaning of the
CFDCPA. Thus, it is unnecessary to decide in this case whether the
transaction must be consensual.
C. Subrogation of Rights Itself is a “Transaction”
¶ 24 Ybarra next argues that the act of subrogating rights itself is
the transaction from which the debt arose. She asserts that her
liability to State Farm only arose once State Farm stepped into the
shoes of its insured “to protect [its] bottom line.”
11 ¶ 25 We reject this argument because it is undisputed that absent
the car accident, Ybarra would have had no obligation to pay the
insured or State Farm. Furthermore, even if the subrogation claim
was a “transaction,” that transaction was between the insured and
the insurer, not one between the Ybarra and the insured.
¶ 26 Ybarra has not cited, and we have not found, any section of
the CFDCPA or any other authority which supports a conclusion
that the subrogation of rights itself somehow triggers application of
the CFDCPA when the underlying event is not itself a transaction,
and we decline to read additional terms into or modify the statute’s
plain language. Dubois v. Abrahamson, 214 P.3d 586, 588 (Colo.
App. 2009).2
D. Deference to Agency Advisory Opinion
¶ 27 Ybarra further contends that we should, and the district court
failed to, defer to the advisory opinion of the Colorado Collection
Agency Board (Board) which concludes that “insurance subrogation
claims are ‘debt’ within the meaning of [the CFDCPA].”
2 We do not exclude the possibility that under different circumstances than those presented here, a subrogation claim could constitute a “debt” under the CFDCPA.
12 ¶ 28 “[W]e must give deference to the reasonable interpretations of
the administrative agencies that are authorized to administer and
enforce the law.” Tivolino Teller House, Inc. v. Fagan, 926 P.2d
1208, 1211 (Colo. 1996). Such deference, however, is not
warranted when the agency’s interpretation is contrary to the plain
meaning of the statute. Gessler v. Colo. Common Cause, 2014 CO
44, ¶ 7.
¶ 29 The parties dispute whether the Board qualifies as an
administrative agency deserving of deference for its interpretations
of the CFDCPA and whether the advisory opinion is the type of
agency action that is entitled to deference. But we need not decide
those questions because even if the Board’s decision was entitled to
deference, we conclude that its interpretation that subrogation
claims are debts is not supported by the plain language of the
¶ 30 Relying on various dictionary definitions, the Board’s advisory
opinion concludes that because “transaction” is a “broad term,” it
includes torts out of which a subrogation claim arises. In so
concluding, the opinion rejected the applicability of Hawthorne
because “[u]nlike the FDCPA, there is nothing in the Act’s definition
13 of ‘debt’ that requires that the ‘transaction’ involve a contractual or
consensual arrangement or the purchase or use of goods or
services.”
¶ 31 But, as we concluded above, the ordinary meaning of
“transaction” does require “some type of business dealing between
parties.” Hawthorne, 140 F.3d at 1371. While a court should give
deference to the agency entrusted by law to enforce a statute, the
court must, in the end, make its own determination of the legal
meaning of a statute. Colo. Mining Ass’n v. Bd. of Cty. Comm’rs,
199 P.3d 718, 731 (Colo. 2009); Williams v. Kunau, 147 P.3d 33, 36
(Colo. 2006).
¶ 32 For the reasons articulated above, we conclude that the
Board’s opinion incorrectly determined the meaning of “debt” in the
CFDCPA and we reject it.
E. Legislative History
¶ 33 Ybarra next asserts that the legislative history of the CFDCPA
demands that the term “debt” be interpreted broadly enough to
cover obligations arising from car accidents. While the legislative
history of a statute may illuminate ambiguous text, it is improper to
14 allow legislative history “to muddy clear statutory language.”
Milner v. Dep’t of Navy, 562 U.S. 562, 572 (2011).
¶ 34 Because we conclude that the Act, by its language, clearly and
unambiguously does not apply to the type of subrogation claim at
issue here, we do not address Ybarra’s legislative history argument.
IV. District Court’s Citation of an Irrelevant Statute
¶ 35 Lastly, Ybarra contends that the district court erred because it
relied on an irrelevant statute in holding that the CFDCPA does not
apply to judgments arising from negligence claims.
¶ 36 In its dismissal order, the district court cited the definition of
“collection agency” under the CFDCPA: “‘Collection agency’ does not
include . . . [a]ny person while serving or attempting to serve legal
process on any other person in connection with the judicial
enforcement of any debt[.]” § 12-14-103(2)(b)(IV).
¶ 37 Ybarra argues that the court erred in concluding, based on
this definition, that persons attempting to collect judgments are
exempt under the statute. She asserts that the definition of
“collection agency” merely exempts process servers and is not a
blanket exemption for judgments arising from negligence claims.
15 ¶ 38 We agree with Ybarra that subsection 103(2)(b)(IV) did not
exempt the law firm from application of the CFDCPA. But it is not
clear that the district court relied on the definition of “collection
agency” in granting the motion to dismiss. Instead, it appears that
the court relied on Rector and Hawthorne to conclude that the
CFDCPA applies only to consensual consumer transactions, and
not judgments arising from negligence claims. But even if the court
erroneously relied on that subsection of the statute in reaching its
decision, its reliance was immaterial in view of our analysis and
disposition.
V. Conclusion
¶ 39 We hold that a subrogation claim arising from tortious activity
is not a “debt” under the CFDCPA and therefore affirm the district
court’s judgment dismissing Ybarra’s complaint.
JUDGE ROMÁN and JUDGE BERNARD concur.