Rector v. City and County of Denver, 03CA0857.

• Citation: 122 P.3d 1010
• Decision Date: 24 October 2005
• Docket Number: No. 03CA0857.,03CA0857.
• Parties: Terri RECTOR, Damian Spencer, Lynn D. Jamison, Shirley Beamer, and Robert Wagner, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. CITY AND COUNTY OF DENVER, a municipal corporation; and ACS State and Local Solutions, Inc., a New York corporation, Defendants-Appellees.
• Court: Supreme Court of Colorado

122 P.3d 1010

Terri RECTOR, Damian Spencer, Lynn D. Jamison, Shirley Beamer, and Robert Wagner, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. CITY AND COUNTY OF DENVER, a municipal corporation; and ACS State and Local Solutions, Inc., a New York corporation, Defendants-Appellees.

No. 03CA0857.

Colorado Court of Appeals, Division IV.

January 27, 2005.

Certiorari Denied October 24, 2005.

COPYRIGHT MATERIAL OMITTED

The Carey Law Firm, Leif Garrison, Robert B. Carey, Colorado Springs, Colorado, for Plaintiffs-Appellants.

Cole Finegan, City Attorney, Geoffrey S. Wasson, Assistant City Attorney, Denver, Colorado, for Defendant-Appellee City and County of Denver.

Davis, Graham & Stubbs, LLP, Richard P. Holme, Andrew M. Low, Denver, Colorado, for Defendant-Appellee ACS State and Local Solutions, Inc.

WEBB, J.

In this putative class action concerning fines and late fees assessed for parking violations, plaintiffs, Terri Rector, Damian Spencer, Lynn D. Jamison, Shirley Beamer, and Robert Wagner, appeal the judgment in favor of defendants, City and County of Denver and ACS State and Local Solutions, Inc., dismissing all claims with prejudice, and the award of attorney fees to ACS. We affirm in part, reverse in part, and remand for further proceedings as to declaratory and injunctive relief.

Under a contract with Denver, ACS prepares parking tickets and violation notices, sends these notices to alleged violators, processes parking tickets, and collects fines and late fees. It receives a percentage of the money collected.

Denver's parking citation states, "if payment is not received within 20 calendar days, the fine is increased to . . . Fine Amt. is Doubled." The Denver Municipal Revised Code (DMRC) prohibits collection of fees or costs "for violation of a municipal ordinance except those specifically provided for in this Code." DMRC § 14-42. According to plaintiffs, because the parked vehicle violation ordinance, DMRC § 54-829, does not expressly provide for a late fee in addition to the underlying fine, assessing late fees violates § 14-42.

The Municipal Code further provides that payment of the prescribed fine to the county court clerk represents a complete satisfaction of the violation. DMRC § 54-824. If a violator requests a hearing and is found guilty, the judgment entered is the applicable fine plus court and certain other costs. DMRC § 54-825. According to plaintiffs, the parking citation misrepresents that a late fee will be imposed if the alleged violator pays the fine to the court clerk after twenty days or requests a hearing.

Plaintiffs further assert that Denver improperly delegates its authority to ACS and that Denver pays ACS an unlawful commission.

Plaintiffs seek return of late fees from both defendants based on claims of unjust enrichment and money had and received. They also seek a declaratory judgment concerning the parties' rights and obligations under the DMRC and injunctive relief against both defendants to protect future violators of Denver's parking ordinances from actions allegedly contrary to the DMRC.

Plaintiffs further allege that ACS violated the Federal and Colorado Fair Debt Collection Practices Acts, 15 U.S.C. § 1692, et seq. (FDCPA), and § 12-14-101, et seq., C.R.S.2004 (CFDCPA); violated the Colorado Consumer Protection Act, § 6-1-101, et seq., C.R.S.2004 (CCPA); and engaged in a civil conspiracy with Denver "to commit a tortious act" by using "false and deceptive language." However, because plaintiffs argue that the trial court erred in dismissing their civil conspiracy claim for the first time in their reply brief, we do not address this argument. See Rocky Mountain Animal Def. v. Colo. Div. of Wildlife, 100 P.3d 508 (Colo.App.2004).

Defendants jointly moved to dismiss under C.R.C.P. 12(b)(5). Denver filed a separate motion to dismiss under C.R.C.P. 12(b)(1), asserting that plaintiffs' unjust enrichment and money had and received claims sounded in tort and that immunity was not waived by the Colorado Governmental Immunity Act, § 24-10-101, et seq., C.R.S.2004 (CGIA).

The trial court found that plaintiffs' voluntary payment of fines and late fees constituted final judgments that precluded recovery under Prilliman v. City of Canon City, 146 Colo. 159, 360 P.2d 812 (1961). The court also dismissed the FDCPA, the CFDCPA, and the CCPA claims, concluding that the parking ordinances did not give rise to a commercial transaction.

The court awarded ACS attorney fees under § 13-17-201, C.R.S.2004, on the basis that all claims asserted by plaintiffs were tort claims.

I. Scope of Review

A motion to dismiss for failure to state a claim under C.R.C.P. 12(b)(5) is disfavored and should be granted only when it appears beyond doubt that the plaintiff cannot obtain relief under any reasonable interpretation of the pleaded facts. Rosenthal v. Dean Witter Reynolds, Inc., 908 P.2d 1095 (Colo.1995). Such a motion must be decided solely on the complaint allegations, with all factual allegations being accepted as true and the court drawing all reasonable inferences therefrom in favor of the plaintiff. Medina v. State, 35 P.3d 443 (Colo.2001); Kratzer v. Colo. Intergovernmental Risk Share Agency, 18 P.3d 766 (Colo.App.2000).

Immunity under the CGIA is an issue of subject matter jurisdiction to be resolved by the trial court under C.R.C.P. 12(b)(1). Fogg v. Macaluso, 892 P.2d 271 (Colo.1995). The plaintiff has the burden of proving jurisdiction, and the trial court's findings of fact will not be reversed unless clearly erroneous. Trinity Broad. of Denver, Inc. v. City of Westminster, 848 P.2d 916 (Colo.1993). However, if the court accepts all the plaintiff's factual assertions as true, immunity becomes an issue of law subject to de novo appellate review. Tidwell v. City & County of Denver, 83 P.3d 75 (Colo.2003).

When a trial court does not engage in the proper C.R.C.P. 12(b) analysis, a reviewing court need not remand if it can resolve the issue as a matter of law. W.O. Brisben Cos. v. Krystkowiak, 66 P.3d 133 (Colo.App. 2002), aff'd, 90 P.3d 859 (Colo.2004); cf. Norsby v. Jensen, 916 P.2d 555 (Colo.App.1995) (reviewing court applied C.R.C.P. 12(b)(1) without remand when trial court improperly treated motion to dismiss as a C.R.C.P. 12(b)(5) motion).

II. Voluntary Payment Rule

Plaintiffs first contend the trial court erred in precluding recovery of late fees under the voluntary payment rule. We disagree.

Initially, we note that while the trial court made findings concerning the voluntary payment rule under C.R.C.P. 12(b)(1) and the CGIA, this rule does not implicate a public entity's waiver of its statutory immunity as to "claims for injury which lie in tort or could lie in tort." See § 24-10-106(1), C.R.S.2004. Hence, we review application of the voluntary payment rule de novo, based on the factual allegations of the amended complaint, under C.R.C.P. 12(b)(5).

In Prilliman, a motorist pleaded guilty to an ordinance violation and paid a fine. Shortly thereafter, the supreme court declared the ordinance void. City of Canon City v. Merris, 137 Colo. 169, 323 P.2d 614 (1958), overruled in part by Vela v. People, 174 Colo. 465, 484 P.2d 1204 (1971). Prilliman then sued to recover the fine.

The supreme court held Prilliman had paid the fine under a mistake of law and upheld dismissal of his claim based on the general rule set forth in 70 C.J.S. Payment § 156(c), "[m]oney paid under an unconstitutional or invalid statute or ordinance, without any circumstances of compulsion is paid under a mistake of law, and so cannot be recovered." Prilliman, supra, 146 Colo. at 160, 360 P.2d at 812.

Here, plaintiffs characterize their payment of late fees as a mistake of fact. In Prilliman, the supreme court determined that in as much as the motorist believed "lawful steps could be taken to collect the fine assessed against him," his mistake was one of law. 146 Colo. at 160, 360 P.2d at 812. We discern no meaningful distinction between a mistaken belief that a void ordinance is valid, as in Prilliman, and plaintiffs' mistaken belief here that Denver acted with the authority created by a valid ordinance in assessing late fees.

Moreover, both in Prilliman and here, the claimants had at least constructive knowledge of the ordinances, see Francis v. City & County of Denver, 160 Colo. 440, 418 P.2d 45 (1966), and actual knowledge of the facts purportedly constituting violations. See Black's Law Dictionary, 1017 (8th ed.2004) ("mistake of law" is "A mistake about the legal effect of a known fact or situation."); see also Brookside Mem'ls, Inc. v. Barre City, 167 Vt. 558, 702 A.2d 47, 50 (1997) (in voluntary payment cases, the typical mistake of law involves "a failure to appreciate the effect or consequences of a recognized law").

And we note that a misrepresentation as to a legal obligation will not support an action for damages. Chacon v. Scavo, 145 Colo. 222, 358 P.2d 614 (1960); Two, Inc. v. Gilmore, 679 P.2d 116 (Colo.App.1984).

Recently, strict application of the mistake of fact-mistake of law distinction under the voluntary payment rule has been questioned. See Time Warner Entm't Co. v. Whiteman, 802 N.E.2d 886 (Ind.2004). However, even the Whiteman court recognized that the weight of authority still applies the rule to mistakes of law. It cited with approval City of Evansville v. Walker, 162 Ind.App. 121, 318 N.E.2d 388 (1974), which rejected a claim to recover parking fines imposed without legal authority because the plaintiffs voluntarily paid the fines rather than contesting them.

Hence, we conclude that plaintiffs made mistakes of law, and we discern no basis to treat mistakes of law differently here than in Prilliman.

Nevertheless, plaintiffs argue that even if they made mistakes of law, misrepresentations by Denver and ACS preclude application of the voluntary payment rule. In this regard, plaintiffs' reliance on United Bank v. Meaux, 761 P.2d 253 ...