Colonial Bank v. Colorado Financial Services Bd., 97CA0436

• Decision Date: 14 May 1998
• Docket Number: No. 97CA0436,97CA0436
• Citation: 961 P.2d 579
• Parties: 98 CJ C.A.R. 2353 COLONIAL BANK, a Colorado state-chartered commercial bank; Centennial Bank, a Colorado state-chartered commercial bank; Arapahoe Bank and Trust, a Colorado state-chartered commercial bank; Aurora National Bank-South, a national banking association; FirstBank of South Jeffco, a Colorado state-chartered commercial bank; Independent Bankers of Colorado, a Colorado non-profit corporation; The Colorado Bankers Association, a Colorado non-profit corporation; Petitioners-Appellants, v. COLORADO FINANCIAL SERVICES BOARD, and Gates Credit Union, a Colorado state-chartered credit union, Respondents-Appellees. . IV
• Court: Colorado Court of Appeals

Page 579

961 P.2d 579

98 CJ C.A.R. 2353

COLONIAL BANK, a Colorado state-chartered commercial bank;

Centennial Bank, a Colorado state-chartered commercial bank;

Arapahoe Bank and Trust, a Colorado state-chartered

commercial bank; Aurora National Bank-South, a national

banking association; FirstBank of South Jeffco, a Colorado

state-chartered commercial bank; Independent Bankers of

Colorado, a Colorado non-profit corporation; The Colorado

Bankers Association, a Colorado non-profit corporation; Petitioners-Appellants, v. COLORADO FINANCIAL SERVICES BOARD, and Gates Credit Union, a

Colorado state-chartered credit union,

Respondents-Appellees.

No. 97CA0436.

Colorado Court of Appeals,

Div. IV.

May 14, 1998.

Rehearing Denied June 18, 1998.

McKenna & Cuneo, L.L.P., I. Thomas Bieging, Patrick B. Augustine, Lawrence S. Ebner, Denver, for Petitioners-Appellants.

Hogan & Hartson, L.L.P., Craig A. Umbaugh, Kathryn W. Bradley, Denver, for Petitioners-Appellants Centennial Bank, FirstBank of South Jeffco, and The Colorado Bankers Association on the Opening Brief.

Gale A. Norton, Attorney General, Martha Phillips Allbright, Chief Deputy Attorney General, Richard A. Westfall, Solicitor General, Richard H. Forman, Senior Assistant Attorney General, Denver, for Respondent-Appellee Colorado Financial Services Board.

Berenbaum, Weinshienk & Eason, P.C., Robert G. Wilson, Jr., Eugene M. Sprague, Denver, for Respondent-Appellee Gates Credit Union.

Opinion by Judge VOGT.

Colonial Bank, Centennial Bank, Arapahoe Bank & Trust, Aurora National Bank-South, FirstBank of South Jeffco, Independent Bankers of Colorado, and The Colorado Bankers Association (the Banks) appeal from a district court judgment affirming an order of the Colorado Financial Services Board (Board) permitting Gates Credit Union (Gates) to expand its field of membership. We affirm.

Gates is a state-chartered credit union which for many years served current and former employees of the Gates Corporation and its affiliate companies. In August 1995, Gates filed an application with the Board pursuant to § 11-30-101.7, C.R.S.1997, requesting approval of an amendment to its bylaws that would add a community field of membership to its existing employment-based field of membership. The proposed community field of membership was to be comprised of persons living in an area referred to as South Metro Denver, which had a population of approximately 294,500 at the time of the application. As reasons for its requested amendment, Gates cited its aging membership base and impaired prospects for expanding that base because of the phaseout of Gates Corporation's Denver manufacturing operations.

The Banks filed written protests opposing Gates' application. At a public hearing before the Board, Gates and the Banks offered evidence, including expert testimony, supporting and opposing Gates' proposed expansion. Twelve days later the Board reconvened, discussed Gates' application, and voted three to one to approve it. The Board met again by teleconference to review and approve the proposed written findings and order in the matter.

The Banks sought judicial review pursuant to § 24-4-106(7), C.R.S.1997. The district court affirmed the Board's order, and this appeal followed.

I.

The Banks first contend that the Board exceeded its authority by allowing Gates to combine a community field of membership with an employment-based field of membership, in violation of the "single common bond" limitation of § 11-30-103(2), C.R.S.1997. We do not agree.

A credit union is a cooperative association incorporated for the purpose of promoting thrift among its members and creating a source of credit for them at fair and reasonable rates of interest. Section 11-30-101(1)(a), C.R.S.1997. Unlike banks, credit unions have a statutory limitation on their membership. Section 11-30-103(2) provides in pertinent part that credit union organization and membership, other than those of a central credit union,

shall be limited to groups having a common bond of employment or association or groups which reside within a well-defined neighborhood, community, or rural district having a population of no more than twenty-five thousand or as otherwise authorized by the board. Small groups which the commissioner determines to lack the potential membership to organize their own credit union may be eligible for membership in an existing credit union if such small groups have a common bond of employment or association. A member of the immediate family of any person who, under the provisions of this article, is eligible for membership in a credit union may also be admitted to membership therein.

This statute, first enacted in 1931 and amended on several occasions since then, has not previously been construed by the Colorado Supreme Court or in any published decision of this court.

The Board interpreted the statute in this case as authorizing the combination of an employment-based field of membership with a community field of membership. It noted that there already were other state-chartered credit unions in Colorado with such a combination. The Board found support for its construction in the second sentence of § 11-30-103(2), which it read as permitting small groups to "join existing credit unions without requiring that the common bond be the same class."

In reviewing the Board's construction of the statute, we must ask two questions. First, if the General Assembly has spoken directly to the precise question at issue, we, like the Board, must give effect to the legislature's unambiguously expressed intent. If, however, the General Assembly has not directly addressed the issue, the question becomes whether the Board's determination is based upon a permissible construction of the statute. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984); cf. Popke v. Industrial Claim Appeals Office, 944 P.2d 677 (Colo.App.1997) (although court as a general rule may not substitute its own statutory construction for reasonable interpretation made by agency, agency interpretation is not binding if it is inconsistent with clear language of statute or with legislative intent).

We are also mindful that the interpretation of a statute by the agency charged with enforcement of that statute is entitled to deference. Urbish v. Lamm, 761 P.2d 756 (Colo.1988); City & County of Denver v. Board of Assessment Appeals, 802 P.2d 1109 (Colo.App.1990).

The Banks argue that the General Assembly's use of the disjunctive "or" in the first sentence of § 11-30-103(2) ("limited to groups having a common bond of employment ... or groups which reside within a well-defined community") means that Gates has a choice between mutually exclusive alternatives--either an employment-based group or a community, but not both. The Board and Gates respond that the additional phrase at the end of the sentence ("or as otherwise authorized by the board") indicates that the General Assembly intended to confer discretion on the Board to approve a field of membership consisting of a combination of occupational, association, and community bonds if the Board deemed such approval appropriate. Both sides assert that the second sentence in § 11-30-103(2), regarding "small groups," can be read to support their interpretation of the statute.

In our view, § 11-30-103(2) is susceptible of either interpretation, and is therefore ambiguous. See Estate of David v. Snelson, 776 P.2d 813 (Colo.1989). Further, the parties have directed us to no legislative history that unambiguously evidences the General Assembly's intent relative to this issue when it added the "or as otherwise authorized" language to the statute in 1977. See Colo. Sess. Laws 1977, ch. 121 at 565-66.

The Banks rely on statements from 1977 by legislators and witnesses that are referenced in the attorney general opinion discussed in Part II, below. However, both the statements and the opinion are concerned with a different issue, and do not address whether the Board's predecessor was to have authority to approve credit unions that combine community and employment-based fields of membership.

Because the General Assembly has not directly addressed the issue, the question becomes whether the Board's determination is based upon a permissible construction of the statute. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., supra.

Rules of statutory construction provide no definitive guidance as to whether the phrase "or as otherwise authorized by the board" is to be construed as an alternative only to the immediately preceding phrase ("having a population of no more than twenty-five thousand"), or as an alternative to the choices set forth earlier in the same sentence ("groups having a common bond of employment or association" or "groups which reside within a well-defined ... community"). We note that in a somewhat analogous context, the General Assembly has expressly rejected the so-called "last antecedent rule," which provides that relative and qualifying words or phrases generally refer solely to the last antecedent with which they are closely connected. See § 2-4-214, C.R.S.1997; see also Estate of David v. Snelson, supra; People in Interest of M.W., 796 P.2d 66 (Colo.App.1990) (when a referential or qualifying clause follows several words or phrases and is applicable as much to the first word or phrase as to the others in the list, then the clause should be applied to all the words or phrases that preceded it).

Applying that reasoning to the issue presented here, we conclude that it is permissible to interpret the "or as otherwise authorized" clause as an alternative to all the phrases that precede it, not just to the immediately preceding phrase.

We reject the Banks' contention that a different conclusion is required because federal courts have construed the analogous federal statute as requiring that all members of an occupational...