A-1 AUTO REPAIR & DETAIL v. Bilunas-Hardy

• Decision Date: 22 April 2004
• Docket Number: No. 02CA0036.,02CA0036.
• Citation: 93 P.3d 598
• Parties: A-1 AUTO REPAIR & DETAIL, INC., Plaintiff-Appellee v. Angela BILUNAS-HARDY, f/k/a Angela Olsen-Hardy, Defendant-Appellant.
• Court: Colorado Court of Appeals

93 P.3d 598

A-1 AUTO REPAIR & DETAIL, INC., Plaintiff-Appellee v. Angela BILUNAS-HARDY, f/k/a Angela Olsen-Hardy, Defendant-Appellant.

No. 02CA0036.

Colorado Court of Appeals, Div. V.

April 22, 2004.

Goldman, Robbins & Rogers, LLC, Lindsey K.S. Nicholson, Durango, Colorado, for Plaintiff-Appellee.

Meinert & Hodges, L.L.C., Timothy A. Meinert, Dillon, Colorado, for Defendant-Appellant.

Opinion by Judge PICCONE.

In this case involving claims for conversion and civil theft, defendant, Angela Bilunas-Hardy, appeals the summary judgment entered in favor of plaintiff, A-1 Auto Repair & Detail, Inc. We affirm.

Hardy was hired as a secretary by A-1. Her duties included collecting payments from customers, paying the bills, making deposits, and preparing and issuing payroll checks. After Hardy terminated her employment, A-1 discovered that Hardy had overpaid herself on her last paycheck. A-1 retained an accountant, who determined Hardy overpaid herself $5,749.25 during her employment. A-1 also discovered approximately sixty-nine job invoices were missing. The invoices were marked "paid cash." The cash from payment of these invoices was never deposited into A-1's bank account. A-1 alleged Hardy took the cash paid by the customers, destroyed A-1's records of the jobs, and kept the cash.

Hardy was prosecuted for two counts of theft and was found guilty. The conviction was affirmed on appeal. People v. Bilunas, 2003 WL 253170 (Colo.App. No. 01CA0752, Feb. 6, 2003)(not published pursuant to C.A.R. 35(f)) (cert. granted Oct. 6, 2003), 2003 WL 22283851 (Colo.).

A-1 commenced this action against Hardy for conversion and civil theft. Based upon collateral estoppel, A-1 moved for summary judgment on its claim for conversion of payroll overpayments and the amount of cash associated with the missing invoices. A-1 also sought treble damages, attorney fees, and costs pursuant to the civil theft statute, § 18-4-405, C.R.S.2003.

The trial court granted A-1's motion for summary judgment, applying collateral estoppel only to the issue of liability for conversion of payroll overpayments. With regard to conversion for the missing invoices, civil theft, and the determination of damages, the trial court found there was no genuine issue of material fact, granted summary judgment, and awarded damages, treble damages, and attorney fees.

I.

Hardy contends Colorado law does not allow courts to apply collateral estoppel, now commonly known as the doctrine of issue preclusion, when the first adjudication is criminal and the subsequent litigation is civil. We disagree.

A. Summary Judgment

Summary judgment is a drastic remedy and should only be granted if there is a clear showing that no genuine issue as to any material fact exists and the moving party is entitled to judgment as a matter of law. Compass Ins. Co. v. City of Littleton, 984 P.2d 606, 613 (Colo.1999). We review orders granting summary judgment de novo. McIntyre v. Bd. of County Comm'rs, 86 P.3d 402 (Colo.2004).

B. Collateral Estoppel or Issue Preclusion

Initially, we note that the terms collateral estoppel and issue preclusion are now used interchangeably. The modern trend is to use the term issue preclusion rather than collateral estoppel. See Byrd v. People, 58 P.3d 50, 53 n. 3 (Colo.2002)

("We prefer to use the terms `claim preclusion' and `issue preclusion' rather than `res judicata' and `collateral estoppel.'").

The doctrine of collateral estoppel or issue preclusion holds that a court's final decision on an issue actually litigated and decided precludes litigation of that issue in subsequent actions. Pomeroy v. Waitkus, 183 Colo. 344, 517 P.2d 396 (1973). Issue preclusion permits a plaintiff to foreclose a defendant from relitigating an issue previously lost by that defendant in another action. See Parklane Hosiery Co. v. Shore, 439 U.S. 322, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979)

.

Issue preclusion is intended to "relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and, by preventing inconsistent decisions, encourage reliance on adjudication." Bebo Constr. Co. v. Mattox & O'Brien, P.C., 990 P.2d 78, 84 (Colo.1999)(quoting Salida Sch. Dist. R-32-J v. Morrison, 732 P.2d 1160, 1163 (Colo.1987), and Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 415, 66 L.Ed.2d 308 (1980)).

In Pomeroy, supra, the supreme court held that under issue preclusion, "the final decision of a court on an issue actually litigated and determined is conclusive of that issue in any subsequent suit." Pomeroy, supra, 183 Colo. at 350, 517 P.2d at 399 (emphasis added). None of the Colorado cases applying issue preclusion have indicated any intent to limit its application to civil cases as Hardy contends. We conclude that a party to a civil action may invoke the doctrine of issue preclusion against a former criminal defendant to preclude him or her from relitigating an issue decided in the criminal prosecution.

To preclude a civil litigant from relitigating an issue previously found against him in a criminal prosecution is less severe than to preclude him from relitigating such an issue in successive civil trials, for there are rigorous safeguards against unjust conviction, including the requirements of proof beyond a reasonable doubt and of a unanimous verdict, the right to counsel, and a record paid for by the state on appeal. Stability of judgments and expeditious trials are served and no injustice done, when criminal defendants are estopped from relitigating issues determined in conformity with these safeguards.

Teitelbaum Furs, Inc. v. Dominion Ins. Co., 58 Cal.2d 601, 606, 25 Cal.Rptr. 559, 375 P.2d 439, 441 (1962) (citations omitted).

The clear trend of Colorado cases is not to limit the application of issue preclusion to purely civil or purely criminal proceedings.

The Colorado Supreme Court has given preclusive effect in an attorney disciplinary proceeding to a trial court's finding in a child support proceeding that the attorney's failure to pay child support was willful. See People v. Kolenc, 887 P.2d 1024, 1026 (Colo.1994)

; see also People v. Tucker, 837 P.2d 1225 (Colo.1992)(conclusion in criminal contempt proceeding that attorney willfully failed to pay child support would preclude litigation of willfulness issue in disciplinary proceeding). Further, the supreme court has precluded relitigation of issues decided in an arbitration proceeding so long as the traditional issue preclusion test has been met. Guar. Nat'l Ins. Co. v. Williams, 982 P.2d 306 (Colo.1999); see also Dale v. Guar. Nat'l Ins. Co., 948 P.2d 545 (Colo.1997); Quist v. Specialties Supply Co., 12 P.3d 863 (Colo.App.2000)(the principles of issue preclusion apply to arbitration proceedings). And issue preclusion applies to administrative proceedings in which the agency is acting in a quasi-judicial role. Salida Sch. Dist. R-32-J v. Morrison, supra, 732 P.2d at 1163; see also Pub. Serv. Co. v. Van Wyk, 27 P.3d 377 (Colo.2001); Sunny Acres Villa, Inc. v. Cooper, 25 P.3d 44 (Colo.2001)(preclusion extends to an administrative agency's finding of fact and conclusion of law).

When intent is an element of the offense, an adjudication of delinquency has been held sufficient to establish a conclusive presumption of intent in an insurance coverage action because adjudication of delinquency requires a higher burden of proof and constitutional protections not present in most civil cases. Swentkowski v. Dawson, 881 P.2d 437 (Colo.App.1994); see also Colo. Farm Bureau Mut. Ins. Co. v. Snowbarger, 934 P.2d 909 (Colo.App.1997)

(when the issue of intent is finally decided in previous criminal prosecution, it cannot be relitigated to avoid the intentional acts exclusion of an insurance policy); State Farm Fire & Cas. Co. v. Mason, 697 P.2d 793 (Colo.App.1984)(dismissal of arson charges against the insured in criminal action did not collaterally estop insurer from filing a petition for declaratory judgment where the insurer was not in privity with the prosecutor).

The United States District Court for the District of Colorado, construing Colorado law, also has applied the doctrine of issue preclusion where the first adjudication was criminal and the subsequent litigation was civil. In Poole v. State Farm Fire & Casualty Co., 941 F.Supp. 964 (D.Colo.1996), aff'd, 125 F.3d 862 (10th Cir.1997), the plaintiff was convicted of first degree murder. The victim's estate sued for wrongful death. The plaintiff brought a civil action against its insurer seeking a defense and indemnity. The district court granted summary judgment in favor of the insurer under its policy exclusion for "intentional acts causing bodily injury," concluding the plaintiff's intent was decided in his criminal trial. "To determine in this action that [the plaintiff] did not act with the requisite intent ... would be to hold that the jury in the criminal trial was wrong, which is not permitted under the doctrine of issue preclusion." Poole, supra, 941 F.Supp. at 968; see also Colo. Farm Bureau Mut. Ins. Co., supra.

Further, substantial case law from other jurisdictions supports our conclusion. Courts in at least twenty states and the District of Columbia have held that a party to a civil action may invoke issue preclusion to preclude a criminal defendant from relitigating issues decided in the criminal prosecution. At least five federal circuit courts have ruled similarly. See, e.g., Gelb v. Royal Globe Ins. Co., 798 F.2d 38 (2d Cir.1986)

; Compton v. Ide, 732 F.2d 1429, 1434 (9th Cir.1984),

abrogated on other grounds by Agency Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143, 107 S.Ct. 2759, 97 L.Ed.2d 121 (1987); Wolfson v. Baker, 623 F.2d 1074, 1077-81 (5th Cir.1980); Cardillo v. Zyla, 486 F.2d 473, 475-76 (1st Cir.1973); Scott v. Robertson, 583 P.2d 188, 191-92 (Alaska 1978); Teitelbaum Furs, Inc. v. Dominion Ins. Co., supra, 58 Cal.2d at 607, 25 Cal.Rptr. at 562, 375 P.2d at 442 ("any issue necessarily decided in a...