State ex rel. Salazar v. CASH NOW STORES, No. 98CA2380.

• Decision Date: 16 March 2000
• Docket Number: No. 98CA2380.
• Citation: 12 P.3d 321
• Parties: STATE of Colorado, ex rel. Ken SALAZAR, Attorney General for the State of Colorado; and Laura E. Udis, Administrator, Uniform Consumer Credit Code, Plaintiffs-Appellants, v. The CASH NOW STORE, INC., Defendant-Appellee. The Cash Now Store, Inc. Plaintiff-Appellee, v. The State of Colorado, acting by and through the Administrator of the Uniform Consumer Credit Code, Defendant-Appellant.
• Court: Colorado Court of Appeals

12 P.3d 321

STATE of Colorado, ex rel. Ken SALAZAR, Attorney General for the State of Colorado; and Laura E. Udis, Administrator, Uniform Consumer Credit Code, Plaintiffs-Appellants, v. The CASH NOW STORE, INC., Defendant-Appellee.

The Cash Now Store, Inc. Plaintiff-Appellee, v. The State of Colorado, acting by and through the Administrator of the Uniform Consumer Credit Code, Defendant-Appellant.

No. 98CA2380.

Colorado Court of Appeals, Div. III.

March 16, 2000.

Rehearing Denied May 11, 2000.

Certiorari Granted October 23, 2000.

Ken Salazar, Attorney General, Paul Chessin, Assistant Attorney General, Denver, Colorado, for Plaintiffs-Appellants and Defendant-Appellant State of Colorado and Laura E. Udis, Administrator, Uniform Consumer Credit Code.

Krendl Horowitz & Krendl, Jay S. Horowitz, Philip L. Gordon, Denver, Colorado, for Defendant-Appellee and Plaintiff-Appellee The Cash Now Store, Inc.

Legal Aid Society of Metropolitan Denver, Manual A. Ramos, Denver, Colorado; Florida Legal Serv., Inc., Lynn Drysdale, Jacksonville, Florida; Kathleen Keest, Assistant Attorney General, Des Moines, Iowa, for Amicus Curiae National Association of Consumer Advocates. Opinion by Chief Judge HUME.

Plaintiffs, the State of Colorado, ex rel. Ken Salazar, Attorney General; and Laura E. Udis, Administrator, Uniform Consumer Credit Code (collectively "the State"), appeal the trial court's denial of its motion for a preliminary injunction against defendant, The Cash Now Store, Inc. (Cash Now). We affirm.

Cash Now engages in the business of purchasing anticipated income tax refunds from taxpayers at a discount. The form agreement entered into between Cash Now and its taxpayer customers reads, in pertinent part:

2. Payment. In consideration of the terms and provisions hereof, Cash Now agrees to pay to [taxpayer] the sum of $____ (the "Total Payment"). [Taxpayer] acknowledges that $____ of the Total Payment shall be paid to [taxpayer] by Cash Now upon [taxpayer's] execution of this Agreement

....

3. Assignment. In consideration of the terms and provisions hereof, [taxpayer] hereby transfers, conveys and assigns all of the [taxpayer's] right, title and interest in and to the Tax Refunds to Cash Now. In accordance with such assignment, [taxpayer]

(a) acknowledges that Cash Now shall have the right to take possession of [taxpayer's] completed tax forms and mail such to the proper Tax agency;

(b) acknowledges that Cash Now shall have the right to receive, open and review all correspondence received by Cash Now related to the Tax Refunds subsequent to the date hereof ...;

(c) agrees that in no event shall Cash Now be obligated to refund to [taxpayer] any amounts received by Cash Now hereunder in the event that [taxpayer's] Tax Refunds are audited at a later time;

(d) represents and warrants to Cash Now that [taxpayer] has not assigned its interest in the Tax Refunds to any other party and that such Tax Refunds are not subject to any lien or encumbrance.

....

5. Indemnification. [Taxpayer] agrees to indemnify, hold harmless and defend Cash Now from and against any claim, liability, loss, damage, cost or expense which may be imposed upon or incurred by Cash Now as a result of the breach of any representation or warranty made by [taxpayer] hereunder or as a result of Cash Now not receiving the full amount of the Tax Refunds set forth above. [Taxpayer] acknowledges that [taxpayer's] indemnification obligation shall include, without limitation, indemnifying Cash Now for any portion of the Tax Refund not received by Cash Now in connection with enforcement of this Agreement.

In an additional provision, by way of a power of attorney, the taxpayer grants to Cash Now the power to receive and sign the income tax refund check and to dispose of the proceeds.

The State filed a complaint seeking to enjoin Cash Now's business, contending that it was engaged in making supervised loans without a supervised lender's license in violation of the Uniform Consumer Credit Code, § 5-1-101, et seq., C.R.S.1999 (the UCCC). The State also filed a motion for preliminary injunction in that action. Cash Now initiated a separate declaratory judgment action, seeking a determination of whether the UCCC applied to its business transactions. The State later filed a motion for summary judgment in the declaratory judgment action.

The injunction and declaratory actions were consolidated, and the trial court determined that Cash Now was not engaged in the business of making loans, but rather that of making purchases of choses in action. The court found that the challenged transactions were not "consumer loans" and that, therefore, the UCCC did not apply to Cash Now's business. Thus, the court denied the State's motion for preliminary injunction and its motion for summary judgment.

I.

The State first contends that the trial court applied the wrong standard in reviewing its motion for preliminary injunction. We determine that the error was harmless.

Initially, we note that if an issue concerns only legal questions, a preliminary injunction ruling is subject to de novo appellate review. Evans v. Romer, 854 P.2d 1270 (Colo.1993).

Preliminary injunctive relief is an extraordinary remedy. In order to obtain a preliminary injunction, the moving party must satisfy six criteria as set forth in C.R.C.P. 65 and Rathke v. MacFarlane, 648 P.2d 648 (Colo.1982).

However, where injunctive relief is sought pursuant to a specific statutory procedure in a comprehensive licensing statute, that procedure controls over the more general application of C.R.C.P. 65. Kourlis v. District Court, 930 P.2d 1329 (Colo.1997); see Lloyd A. Fry Roofing Co. v. State Department of Health Air Pollution Variance Board, 191 Colo. 463, 553 P.2d 800 (1976)(because suit to enjoin statute is in public interest, state agency need not show irreparable injury).

As pertinent here, the UCCC provides that:

With respect to an action brought to enjoin violations of this code ... the administrator may apply to the court for a ... preliminary injunction against a respondent.... If the court finds after a hearing held upon notice to the respondent that there is reasonable cause to believe that the respondent is engaging in or is likely to engage in conduct sought to be restrained, it may grant any such temporary restraining order or preliminary injunction it deems appropriate.

Section 5-6-112, C.R.S.1999 (emphasis added).

Thus, in the context of the State's request for a preliminary injunction here, it was required to demonstrate "reasonable cause to believe" that Cash Now was engaging in conduct prohibited by the UCCC.

We agree with the State's contention that the court should have made its determination of whether to grant the preliminary injunction under the UCCC's standard, rather than C.R.C.P. 65 and Rathke v. MacFarlane, supra. However, for reasons more fully described later in this opinion, we conclude that the nature of defendant's business is such that it does not fall under the purview of the UCCC.

Accordingly, as we agree with the trial court's ultimate legal conclusion, we find no reversible error here.

II.

The State contends that Cash Now's transactions are loans or disguised loans under the UCCC and that, therefore, the trial court erred in denying its motion for a preliminary injunction. We disagree.

This contention requires us to determine whether the challenged transactions constitute "consumer loans" as that term is defined at § 5-3-104, C.R.S.1999, or "loans," under the definition set out in § 5-3-106, C.R.S. 1999.

Our task in interpreting a statute is to give effect to the intent of the General Assembly. To determine legislative intent, we look first to the plain language employed, giving words and phrases effect in accordance with their plain and ordinary meaning. City of Westminster v. Dogan Construction Co., Inc., 930 P.2d 585 (Colo.1997). The construction of statutory language should comport with the purpose of the legislative scheme, and the language used should be given its plain meaning, unless the result of that application is absurd. Farmers Group, Inc. v. Williams, 805 P.2d 419 (Colo.1991). If a statute is unambiguous, there is no need to resort to interpretive rules of statutory construction. However, if a statute is ambiguous, we may consider indicia of legislative intent. See, e.g., Aetna Casualty & Surety Co. v. McMichael, 906 P.2d 92 (Colo.1995)(legislative history and underlying purpose may be taken into account in construing ambiguous statute).

The UCCC is to be "liberally construed and applied to promote its underlying purposes and policies." Section 5-1-102(1), C.R.S.1999. These purposes and policies include simplification and clarification of the law governing consumer credit, small loans, and usury, as well as protection of consumers from unfair practices by suppliers of consumer credit. Sections 5-1-102(1), (2)(a) & (d), C.R.S.1999.

A.

Initially, we note that the State correctly asserts that, in construing the pertinent statutory provisions, deference should be given to the interpretation given the statute by the officer or agency charged with its administration. See Weld County School District RE-12 v. Bymer, 955 P.2d 550 (Colo. 1998).

Administrative interpretations are most useful when the subject involved calls for the exercise of the agency's technical expertise, and when the statutory language is susceptible of more than one reasonable interpretation. See Manor Vail Condominium Ass'n v. Board of Equalization, 956 P.2d 654 (Colo.App.1998).

However, the court will not be bound by an agency's decision that misconstrues or misapplies the law. Rather, the court must determine all questions of law, interpret the applicable statutes and state regulations, and apply such interpretation to the facts as duly found or established. Bostron v. Colorado Department of Personnel, 860 P.2d 595 (Colo.App.1993).

Thus, in the absence of a specific statutory...