Commercial Research, LLC v. Roup
Decision Date | 05 December 2013 |
Docket Number | Court of Appeals No. 12CA0453 |
Citation | 353 P.3d 859 |
Parties | COMMERCIAL RESEARCH, LLC, Plaintiff–Appellee, v. Gary S. ROUP, Defendant–Appellant. |
Court | Colorado Court of Appeals |
Stokes & Wolf, P.C., James R. Wolf, Denver, Colorado, for Plaintiff–Appellee.
Gary S. Roup, Pro Se.
¶ 1 This case presents the question whether a health savings account (HSA) meeting the requirements of 26 U.S.C. § 223 (2006) is a “retirement plan” as contemplated by the Colorado statute exempting certain property from garnishment, section 13–54–102, C.R.S.2013. We hold that it is not and therefore affirm the district court's order denying judgment debtor Gary S. Roup's claim of exemption.
¶ 2 Commercial Research LLC (Creditor) obtained an assignment of a default judgment that had been entered against Mr. Roup in a Texas court. Creditor then filed the judgment in Colorado and began collection proceedings against Mr. Roup's assets, including $3,729 held in an HSA. In the course of the proceedings, Mr. Roup asserted that the funds in his HSA were exempt from attachment or garnishment because the HSA qualified as a “retirement plan” under section 13–54–102(1)(s). The district court ruled that Mr. Roup's HSA was not a pension, retirement, or deferred compensation plan because the HSA merely allowed Mr. Roup to defer income on a tax-exempt basis to pay medical bills. The court concluded that no authority supported exempting the HSA from garnishment, and consequently the court ordered the funds in Mr. Roup's HSA to be released to Creditor.
¶ 3 In the course of the district court proceedings, Mr. Roup filed for bankruptcy protection and was granted a discharge. Because we were unable to determine from the record the effect that Mr. Roup's discharge had on the continuing validity of Creditor's garnishment against Mr. Roup's HSA, and were concerned that the case might have become moot, we remanded this case for further argument of the parties and for findings by the trial court. On remand, the district court ruled that the underlying judgment had been discharged in bankruptcy, but that the discharge did not extinguish Creditor's garnishment because Mr. Roup had not taken any affirmative step toward extinguishing the lien. See In re Haberman, 516 F.3d 1207, 1209 (10th Cir.2008) (); In re Deutchman, 192 F.3d 457, 460 (4th Cir.1999) (). Mr. Roup does not challenge that ruling on appeal.
¶ 4 Because Creditor's garnishment of Mr. Roup's HSA survived bankruptcy, this case still presents an actual controversy, and we therefore proceed to consider the merits of the appeal. See In re Marriage of Wiggins, 2012 CO 44, ¶ 16, 279 P.3d 1.
¶ 5 Mr. Roup contends that his HSA is a “retirement plan” and therefore exempt from garnishment under section 13–54–102(1)(s). We reject this contention.
¶ 6 Mr. Roup's contention requires us to interpret the meaning of a statutory term. We review such an issue de novo.
Weinstein v. Colborne Foodbotics, LLC, 2013 CO 33, ¶ 8, 302 P.3d 263.
¶ 7 The principles governing our interpretation of a statutory term are well-established. Our primary goals are to discern and give effect to the General Assembly's intent. Hassler v. Account Brokers of Larimer Cnty., Inc., 2012 CO 24, ¶ 15, 274 P.3d 547 ; Krol v. CF & I Steel, 2013 COA 32, ¶ 15, 307 P.3d 1116. To do this, we look first to the statutory language; we give the words and phrases used in the statute their plain and ordinary meanings. Hassler, ¶ 15; Krol, ¶ 15. And we must also read the relevant statutory language in the dual contexts of the particular statute at issue and the entire related statutory scheme so as to give consistent, harmonious, and sensible effect to the statute's language. Jefferson Cnty. Bd. of Equalization v. Gerganoff, 241 P.3d 932, 935 (Colo.2010) ; BP Am. Prod. Co. v. Patterson, 185 P.3d 811, 813 (Colo.2008). If, after doing this, we determine that the statute's meaning is clear, we will enforce it as written and will not resort to other rules of statutory construction. Denver Post Corp. v. Ritter, 255 P.3d 1083, 1089 (Colo.2011) ; Krol, ¶ 15. But if we determine that the statutory language is ambiguous—that is, susceptible of more than one reasonable meaning—we may consider other indicators of legislative intent. See § 2–4–203, C.R.S.2013; Bd. of Cnty. Commis v. Costilla Cnty. Conservancy Dist., 88 P.3d 1188, 1193 (Colo.2004) ; see also A.M. v. A.C., 2013 CO 16, ¶ 8, 296 P.3d 1026 ().
¶ 8 Article XVIII, section 1 of the Colorado Constitution provides: “The general assembly shall pass liberal homestead and exemption laws.” To that end, the General Assembly has from time to time enacted laws placing specified property out of the reach of creditors. Many of these exemptions are currently collected in section 13–54–102. Of the many provisions therein, only one, subsection (1)(s), is relevant in this case. It provides:
¶ 9 In general, and as relevant here, this provision exempts from garnishment “any pension or retirement plan or deferred compensation plan.” Mr. Roup concedes that an HSA is not a pension plan or a deferred compensation plan; he contends only that it is a “retirement plan.”
¶ 10 An HSA is a “trust created or organized in the United States as a health savings account exclusively for the purpose of paying the qualified medical expenses of the account beneficiary, but only if the written governing instrument creating the trust meets [specified requirements].” 26 U.S.C. § 223(d)(1) (2006). “Under federal tax law, eligible individuals may establish and make pretax contributions to [an HSA] and then use those monies to pay or reimburse medical expenses.” Retail Indus. Leaders Ass'n v. Fielder, 475 F.3d 180, 196 (4th Cir.2007). If money is withdrawn from an HSA, but is not used to pay the beneficiary's qualified medical expenses, the money becomes taxable income and the beneficiary must pay an additional twenty percent penalty. 26 U.S.C. § 223(f)(2), (4)(A) (2006). However, the twenty percent penalty does not apply if the beneficiary makes the withdrawal after becoming Medicare-eligible at age sixty-five.
26 U.S.C. § 223(f)(4)(C) (2006) ; 42 U.S.C. § 1395c (2006).
¶ 11 HSAs are not considered “employee welfare benefit plans” for purposes of the provisions of Title I of ERISA. See United States Dep't of Labor, Employee Benefits Security Administration, Field Assistance Bulletin 2004–1 (Apr. 7, 2004), available at http://www.dol.gov/ebsa/regs/fab_2004–1.html; see also Fielder, 475 F.3d at 196 ( ).
¶ 12 Section 13–54–102(1)(s) does not define the term “retirement plan,” nor does any other provision of article 54 of title 13. In Dillabaugh v. Ellerton, 259 P.3d 550 (Colo.App.2011), a division of this court looked to the following three definitions of the term to discern its usual and ordinary meaning:
See Dillabaugh, 259 P.3d at 552–53.
¶ 13 Considering these similar definitions, the Dillabaugh division concluded that the term “retirement plan” is not ambiguous and held that a “future retirement obligation” owed to the judgment debtor was a retirement plan within the meaning of section 13–54–102(1)(s). In so holding, the division rejected the argument that only plans that possess attributes of the specific ERISA-qualified or tax-qualified examples listed in section 13–54–102(1)(s) are “retirement plans.” Id. at 553–54 ; but see In re Ludwig, 345 B.R. 310 (Bankr.D.Colo.2006) (...
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...v. Account Brokers of Larimer Cnty., Inc., 2012 CO 24, ¶ 15, 274 P.3d 547 ; Commercial Research, LLC v. Roup, 2013 COA 163, ¶ 7, 353 P.3d 859, 2013 WL 6354558. We first look to the statutory language, giving the words and phrases used therein their plain and ordinary meanings. Hassler, ¶ 15......