Crowe v. Tull

• Decision Date: 09 January 2006
• Docket Number: No. 04SA385.,04SA385.
• Citation: 126 P.3d 196
• Parties: Richard E. CROWE, Plaintiff, v. Marc B. TULL and Franklin D. Azar & Associates, P.C., a Colorado professional corporation, Defendants.
• Court: Colorado Supreme Court

126 P.3d 196

Richard E. CROWE, Plaintiff, v. Marc B. TULL and Franklin D. Azar & Associates, P.C., a Colorado professional corporation, Defendants.

No. 04SA385.

Supreme Court of Colorado, En Banc.

January 9, 2006.

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Winston Law Firm, P.C., Joseph R. Winston, LeHouillier & Associates, Patric L. LeHouillier, Colorado Springs, for Plaintiff.

White and Steele, P.C., Thomas B. Quinn, Jennifer C. Forsyth, Denver, for Defendants.

Kennedy Christopher Childs & Fogg, P.C., John R. Mann, Ronald H. Nemirow, Denver, for Amicus Curiae Colorado Defense Lawyers Association.

Hoffman, Reilly, Pozner and Williamson, LLP, Beth L. Krulewitch, Denver, for Amicus Curiae Colorado Trial Lawyers Association.

John W. Suthers, Attorney General, Jan M. Zavislan, Deputy Attorney General, Denver, for Amicus Curiae Colorado Attorney General.

Koff, Corn, & Berger, P.C., Michael H. Berger, Denver, for Amicus Curiae Colorado Bar Association.

Pryor Johnson Carney Karr Nixon, P.C., Elizabeth C. Moran, Greenwood Village, for Amicus Curiae Copic Insurance Company.

MULLARKEY, Chief Justice.

I. Introduction

We exercised our original jurisdiction under C.A.R. 21 to determine whether a client may sue his or her attorney for violating the Colorado Consumer Protection Act ("CCPA") by using false or deceptive advertising to induce the client and other members of the public to hire the attorney. Specifically in this case, the petitioner, Richard Crowe, alleges that the respondents, Marc Tull and Azar & Associates ("Azar" or "the Azar firm"), employed a statewide marketing program, primarily through television advertisements, that portrayed the firm as highly skilled at negotiating with insurance companies and promised the firm would obtain full value for its clients' personal injury claims. Crowe alleges that he retained the Azar firm based on the representations made in its advertisements, the firm did not perform as advertised, and he was pressured into settling for only a fraction of the full value of his claim. According to Crowe, the Azar firm is a high-volume personal injury practice which relies for its profitability on quick settlements of cases with minimal expenditure of effort and resources by the firm. These business practices allegedly constitute an illegal scheme perpetrated on the public and enabled by the false or misleading advertising.

Crowe requested that we issue a rule to show cause why he should not be granted relief from the district court's dismissal of his claims for breach of fiduciary duty and violations of the CCPA. Crowe also requested relief from the trial court's denial of his motion to amend his complaint and the partial grant of Azar's motion for a protective order regarding discovery.¹ We issued the rule to show cause and now make that rule absolute.

We conclude that attorneys may be held liable for violations of the CCPA. We reject both the argument that attorneys are exempt from the CCPA and also the alternative argument that a special test for CCPA liability applies to attorneys. Rather, we apply to attorneys the test developed in our CCPA caselaw. A private claim for relief under the CCPA against an attorney must allege that the attorney or law firm knowingly engaged in a deceptive trade practice, which occurred in the course of the attorney or firm's business, vocation, or occupation, significantly impacting the public as actual or potential consumers of legal services, and causing injury in fact to a legally protected interest of the plaintiff.

In this case, the trial court barred Crowe from asserting a CCPA claim involving an attorney's "actual practice" of law. We remand to the district court to allow Crowe to replead the CCPA claim and for further proceedings consistent with this opinion.

II. Facts and Prior Proceedings

For the purposes of this opinion, we accept Crowe's allegations of fact as true.

Azar & Associates is a law firm specializing in personal injury lawsuits. In television advertisements that air throughout Colorado, the Azar firm represents itself as a firm that can recover money for its clients that other attorneys cannot. The commercials claim that the Azar firm will always "obtain as much as we can, as fast as we can" for its clients. One of the firm's commercials employs the slogan "In a wreck, get a check" while another portrays Franklin Azar, the President of the Azar firm, as the "strong arm" who muscles insurance adjusters into paying up. Crowe claims that he saw the Azar firm's television commercials before and after he was injured in an accident and that the commercials caused him to retain the firm.

Crowe was involved in a multi-car accident in Colorado Springs. He suffered numerous physical injuries, including mild traumatic brain injury with speech impairment, and his vehicle sustained heavy damages. According to the police report, a seventeen year old driving a Dodge Ram truck caused the accident when he ran a stop sign and collided with Crowe's two-door Honda with an estimated impact speed of 45 mph.²

Crowe retained the respondents here, Tull and Azar, to represent him in his personal injury claim. Crowe was offered $4,000 by the truck driver's insurer to settle the claim and Tull advised him to accept the offer. Crowe relied on Tull's advice and accepted the $4,000 settlement offer.

In the petition now before us, Crowe claims that his case was not ripe for settlement at the time it was settled because he had not reached maximum medical improvement, resulting in undetermined damages such as future lost wages and rehabilitation costs. He contends that the amount of the settlement was far below the real value of his claim given that he had already accumulated over $17,000 in medical and rehabilitation costs and lost over $7,000 in wages at the time Tull advised him to settle the case for $4,000.

Crowe filed a timely suit against Tull and Azar, claiming professional negligence, violation of the CCPA, and breach of fiduciary obligation. Crowe's CCPA and breach of fiduciary obligation claims were dismissed by the trial court, which found that those two claims duplicated Crowe's legal malpractice claim.³ The court stated that the "actual practice of law" was not a commercial activity regulated by the CCPA and that the focus of Crowe's claims was the allegation of poor legal work. The court also reasoned that while the Azar firm's commercials may have lured Crowe to retain them, the commercials did not cause Crowe's alleged financial injuries.

Crowe attempted to amend his complaint to replead his claim for breach of fiduciary obligation and add claims for negligent and fraudulent misrepresentation. The trial court denied Crowe's request to amend, finding the additional claims duplicative of either the previously dismissed claims or the professional negligence claim. The trial court subsequently granted Tull and Azar's request for a protective order, preventing Crowe from obtaining discovery on matters related to Azar's business practices.

Crowe claims that the trial court abused its discretion in dismissing his claims for breach of fiduciary duty and violations of the CCPA. We granted Crowe's petition and invited various amici to submit briefs on the question of whether or not the CCPA was applicable to attorneys engaged in providing legal services, a question of first impression in Colorado.⁴ Having heard arguments from all sides, we are persuaded by Crowe and the amici in support of the petitioner that attorneys are within the ambit of the CCPA.

In the next section, we will put Crowe's claim in context and examine the relevant statute and caselaw.

III. Analysis

To prove a private claim for relief under the CCPA, a plaintiff must show:

(1) that the defendant engaged in an unfair or deceptive trade practice; (2) that the challenged practice occurred in the course of defendant's business, vocation, or occupation; (3) that it significantly impacts the public as actual or potential consumers of the defendant's goods, services, or property; (4) that the plaintiff suffered injury in fact to a legally protected interest; and (5) that the challenged practice caused the plaintiff's injury.

Rhino Linings USA, Inc. v. Rocky Mountain Rhino Lining, Inc., 62 P.3d 142, 146-47 (Colo.2003) (citing Hall v. Walter, 969 P.2d 224, 235 (Colo.1998)).

The trial court ruled that Crowe's CCPA claim duplicated his legal malpractice claim and that the practice of law is not a commercial activity governed by the CCPA. Tull and Azar argue that the trial court's ruling was correct, that the claims were duplicative, and that the majority of state courts has found that deceptive trade claims do not apply to the practice of law. Therefore, according to the respondents, the CCPA should not apply to them as legal practitioners. We reject this argument.

In determining whether the CCPA applies to attorneys, we are guided by the well-established principles of statutory construction we have applied in past CCPA cases. Whenever possible, we construe the CCPA to give its terms their plain and obvious meaning. Hall v. Walter, 969 P.2d 224, 229 (Colo.1998); May Dep't Stores Co. v. State ex rel. Woodard, 863 P.2d 967, 972 (Colo.1993). Our goal is to give effect to the intent of the General Assembly and we avoid constructions that defeat the legislature's intent. Showpiece Homes Corp. v. Assurance Co. of Am., 38 P.3d 47, 51 (Colo.2001). The intention of the legislature prevails over a literal interpretation of the statute's plain and ordinary meaning that would produce an absurd result. Id.; Walter, 969 P.2d at 229.

A. Legislative Intent

1.

The CCPA was enacted in 1969 and there is no legislative record of the proceedings that led to its passage. See Showpiece Homes, 38 P.3d at 51. A Colorado Legislative Council Report published prior to passage of the CCPA describes Colorado's first false and misleading advertising law, which was based on the "...