source: Caselaw Access Project

author: MATTHEWS, Justice.

license: Public Domain

text:
    Vern T. STILL and Wanda Still, Appellants and Cross-Appellees, v. Lloyd CUNNINGHAM, as Assignee of Northrim Bank, Appellee and Cross-Appellant.
    Nos. S-10680, S-10719.
    Supreme Court of Alaska.
    July 9, 2004.

      Thomas V. Van Flein, Clapp, Peterson & Stowers, LLC, Anchorage, for Appellants and Cross-Appellees.
    Gregory L. Youngmun, John D. Harjehau-sen, Delisio Moran Geraghty & Zobel, P.C., Anchorage, for Appellee and Cross-Appellant.
    Before: BRYNER, Chief Justice, MATTHEWS, EASTAUGH, FABE, and CARPENETI, Justices.
   OPINION

MATTHEWS, Justice.

I. INTRODUCTION

Vern Still was held liable on a personal guaranty, but his wife Wanda was exonerated on the grounds that the obligee violated the Stills’ civil rights by requiring Wanda to sign a guaranty. She was awarded partial rather than full attorney’s fees for her successful defense.

These appeals present four main contentions. First, Vern contends that the guaranty did not cover the debt in question. Second, Lloyd Cunningham, assignee of the obligee, contends that Wanda should not have been exonerated from liability. Third, Vern contends that he should have been exonerated from liability because his civil rights were also violated. Fourth, Wanda contends that she was entitled to full rather than partial attorney’s fees. We conclude that the first three contentions lack merit, but that the fourth is correct.

II. FACTS AND PROCEEDINGS

A. Facts

Premier Homes is an Alaska corporation, founded by Vern Still, Lute Cunningham, and Hank Bartos, to import and sell modular homes in the North Pole area. As of 1996, Bartos’s shares were in the process of being reacquired and there were four stockholders: Vern Still owned twenty-five percent of the shares, his son Mark also owned twenty-five percent, and Lute Cunningham and his wife Marilyn together owned the remaining fifty percent of the shares. Lute was the president.

On June 5, 1996, Vern and Wanda signed separate but identical guaranties, guarantying the payment of all present and future indebtedness of Premier Homes to Northrim Bank. Although the guaranties referred to a specific loan in a shaded area — Loan 103— they expressly covered all of Premier’s present and future indebtedness to Northrim. Language directly below the shaded area stated that “References in the shaded area are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.” The guaranties contained a clause authorizing the lender, either before or after revocation, to extend the time for payment of an indebtedness without reducing the guarantor’s liability.

In 1996 Northrim made ten separate loans to Premier, each financing separate modular units. All but one had been sold as of March 12, 1997. On that date Premier borrowed $203,022 from Northrim in a transaction referred to as Loan 200. The note for Loan 200 was signed by Lute as president. The Northrim loan authorization for Loan 200 lists as guarantors the Cunninghams and the Stills. Specific collateral for Loan 200 included a deed of trust covering a modular housing unit owned by Premier, a deed of trust covering real property owned by Lute and Marilyn, and a real estate contract payable to the Cunninghams under which $125,000 was receivable. The purposes of the loan were (1) to provide season start-up costs for Premier; (2) to pay off the $132,000 balance on an earlier loan from Key Bank; and (3) to pay original shareholder Frank Bartos a sum to complete the reacquisition of his shares.

On March 20, 1997, eight days after Loan 200 was made, Northrim issued a line of credit to Premier not to exceed $750,000. The proceeds were to be used for the purchase and transportation of modular units. Each loan was to be secured by a first deed of trust on a modular unit placed on a lot and by the guaranties of all of the stockholders in Premier. In 1997 some twelve units were financed by Northrim under this line of credit. All of them were placed in Stillmeyer Estates, a subdivision owned by Vern. Five of the units were purchased by Lute and Marilyn as rentals or for resale. It is not clear if these purchases were made from Premier or directly from the manufacturer.

On October 1, 1997, Vern wrote Northrim, revoking the guaranty. The letter stated: “I am writing concerning the guarantee I have signed for Premier Homes of North Pole, Inc. Effective immediately, I am revoking my guarantee. I will not be responsible for any new loans made through the company, unless I personally appear to sign any documents.”

Although Northrim had financed approximately twenty units as of Vern’s October 1, 1997 revocation, apparently only Loan 200 ultimately proved troublesome. On March 24, 1998, the note was extended to May 25, 1998. On June 26, 1998, the note was extended to October 20, 1998. This extension was accomplished by a document entitled “Change in Terms Agreement,” which was signed by Lute as president and Vern as vice-president. Meanwhile, on May 5, June 11, and August 19, 1998, Vern executed new guaranties identical in terms to the June 5, 1996 guaranty that he had revoked, except for references in the shaded areas. A third extension extended repayment to June 30, 1999.

On January 18, 2000, Northrim notified Premier, the Cunninghams, and the Stills that Loan 200 was in default. Eventually the note was purchased by Lute’s brother Lloyd. Lloyd paid the balance of the loan, $90,039.26, and took an assignment of Nor-thrim’s rights as to collateral and the guaranties.

B. Proceedings

Lloyd, as Northrim’s assignee, brought this action against the Stills under the guaranties of June 5,1996, to collect the outstanding balance of Loan 200. Lloyd also made a claim against Vern under the guaranties that Vern executed in 1998. Vern and Wanda answered, denying liability. They interposed a third-party complaint against Lute and Marilyn for fraudulently diverting funds from Premier for their own uses, and for breach of their fiduciary duties as officers and shareholders of Premier. The Stills also counterclaimed against Lloyd for civil conspiracy “to set up a sham proceeding in order to bilk Vern and Wanda Still.” Lloyd’s complaint was alleged to be “in furtherance of this conspiracy.” In an amended answer Vern pled another counterclaim against Lloyd, alleging that Vern had done construction work for Lloyd and had not been fully paid.

After some discovery was conducted, Lloyd moved for summary judgment against the Stills based on the June 5, 1996 guaranties and against Vern based on the three guaranties given in 1998. Vern and Wanda opposed the motion on two grounds. They claimed, first, that the guaranties did not cover Loan 200, and second, that Northrim violated federal and state law by refusing to extend credit to Vern, who was independently creditworthy, without first requiring Wanda’s guaranty. The Stills also contended that the three extensions of Loan 200 voided their obligation as guarantors. In reply, Lloyd argued that the guaranties explicitly covered all the indebtedness, including extensions or modifications of the indebtedness. Lloyd also contended that Northrim had a legitimate basis for requesting a guaranty from Wanda. The Stills cross-moved for summary judgment, claiming that Northrim had discriminated against them based on their marital status.

The superior court first considered Lloyd’s motion for summary judgment. The court ruled from the bench that the 1996 guaranties were continuous in nature and that their terms were not ambiguous. The court de-dined to find that extrinsic evidence of conversations between Vern and Gary Roderick of Northrim changed the meaning of the guaranties. The court concluded that Vern’s revocation was not effective as to Loan 200 because the'revocation was made after the loan. The court also ruled that the extensions did not void the guaranties because the guaranties provided that extensions would not terminate them. But the court reserved decision on the Stills’ civil rights claims.

Subsequently, the superior court ruled on the Stills’ cross-motion for summary judgment. The court held that the Stills’ state and federal discrimination claims were time barred, but that discrimination could be raised as an affirmative defense to the enforcement of the guaranties or as a counterclaim for recoupment. The court ruled that Wanda’s guaranty was void, but that Vern’s guaranty was enforceable.

The parties settled the Stills’ third-party claims against Lute and Marilyn. These were dismissed with prejudice in April 2001. A year later the court ruled that Vern could not assert a claim against Lloyd as a constructive co-guarantor standing in the shoes of his brother Lute. The case then proceeded to a bench trial on Vern’s counterclaim for unpaid construction work against Lloyd. The court found in favor of Lloyd and dismissed the counterclaim. The court entered a final judgment in favor of Lloyd against Vern for the full principal amount paid by Lloyd to Northrim for the note plus interest.

Both Lloyd and Wanda moved for attorney’s fees. The court awarded Lloyd reasonable actual attorney’s fees, as provided in the guaranty, of $28,912.50. Wanda argued that she was also entitled to an award of reasonable actual attorney’s fees as a prevailing civil rights litigant. The court determined that Wanda was not entitled to actual fees as a prevailing civil rights claimant, and awarded her partial attorney’s fees pursuant to Civil Rule 82. Vern and Wanda appeal and Lloyd cross-appeals.

III. DISCUSSION

A. Standard of Review

This court reviews an order of summary judgment de novo. Summary judgment is only appropriate where there is no dispute as to material facts, and the moving party is entitled to judgment as a matter of law. “Once the moving party has established a prima facie ease, the non-movant is required, in order 'to prevent the entry of summary judgment, to set forth specific facts showing that he could produce admissible evidence reasonably tending to dispute or contradict the movant’s evidence, and thus demonstrate that a material issue of fact exists.” On appeal from the grant of summary judgment, this court will construe factual evidence in favor of the opposing party.

B. Did the Trial Court Err in Ruling that Vern’s Guaranty Applied to Loan 200?

Vern’s first argument is that the superior court erred when it decided that his June 1996 guaranty was applicable to Loan 200. He claims that the court should have considered the evidence of the parties’ intent and practice rather than ruling that there must be an ambiguity before extrinsic evidence can be considered: “the trial court refused to consider the substantial extrinsic evidence showing the parties’ intent, at the time of the June 5,1996 guaranty, that the guaranty was applicable only to Loan No. 103 and not Loan No. 200.” He contends that “the Court should have ruled that the guaranty was not applicable to Loan 200, or that at the very least the guaranty, when viewed in context with the extrinsic evidence, was reasonably susceptible to both asserted meanings, requiring a jury trial.”

Vern also argues that if this court determines that the guaranty was continuing in nature, “a genuine issue of fact exists regarding unilateral mistake and fraud.” He contends that Roderick of Northrim told him that his June 5, 1996 guaranty would only apply to the particular loan identified in the shaded area of the guaranty and contends that he would not have signed any of the guaranties if he had been told that they were continuing in nature.

In opposition to the motion for summary judgment, Yern filed an affidavit. The allegations critical to his claim that extrinsic evidence affected the meaning of the guaranties and his claims of mistake and misrepresentation are contained in the following paragraph of the affidavit:

Based on my conversation with Gary at the bank, I was led to understand that some loans needed a guaranty and others didn’t, in fact, most didn’t, because they were fully secured by the modular units. Gary never told me that the bank thought if I signed just one guaranty I was promising my personal money for every loan the bank would issue to Premier Homes, no matter how large the amount, no matter what the interest rate was, and no matter whether I approved a particular loan. I would not have agreed to that if they did tell me that. When the time came to guarantee some loans, Gary would call me down and I would sign — except for Loan No. 200, which I did not consent to. If you look at the second page of the guaranties, you will see the loan number that the guarantee applies to. This is how Gary explained it to me. Each guaranty was for a particular loan and that was my understanding based on the bank’s practice with me.

1. The terms of the guaranty cannot be altered by the extrinsic evidence offered by Yern.

Under the terms of the parol evidence rule an integrated written contract cannot be varied or contradicted by prior negotiations or agreements. We explained the operation of this rule in Alaska Diversified Contractors, Inc. v. Lower Kuskokwim School District as follows:

The parol evidence rule is a rule of substantive law which holds that an integrated written contract may not be varied or contradicted by prior negotiations or agreements. Before the parol evidence rule can be applied, three preliminary determinations must be made: (1) whether the contract is integrated, (2) what the contract means, and (3) whether the prior agreement conflicts with the integrated agreement. Alaska Northern Dev., Inc. v. Alyeska Pipeline Serv. Co., 666 P.2d 33, 37-40 (Alaska 1983), cert. denied, 464 U.S. 1041, 104 S.Ct. 706, 79 L.Ed.2d 170 (1984). Extrinsic evidence may always be received on the question of meaning. Alyeska Pipeline Serv. Co. v. O’Kelley, 645 P.2d 767, 771 n. 1 (Alaska 1982). Once the meaning of the written contract is determined, however, the parol evidence rule precludes the enforcement of prior inconsistent agreements. Alaska Northern, 666 P.2d at 37.
This is not to say that the parol evidence rule is easy to apply. There is an obvious tension between using extrinsic evidence of a prior agreement for the purpose of determining the meaning of an integrated contract, and barring the use of a prior agreement to change an integrated contract once its meaning is determined. The evidence which is consulted to determine meaning may be the same evidence which is later excluded, or rendered irrelevant, by the parol evidence rule. However, this apparent conflict is made manageable in most cases by various practical rules. For example, while extrinsic evidence should be consulted in determining the meaning of a written contract, nonetheless “after the transaction has been shown in all its length and breadth, the words of an integrated agreement remain the most important evidence of intention.” Restatement (Second) of Contracts § 212 comment b. Further, questions of interpretation of the meaning of written documents are treated as questions of law for the court except where they are dependent for their resolution on conflicting extrinsic evidence. O’Kelley, 645 P.2d at 771 n. 2; Restatement (Second) of CONTRACTS § 212, comments d, e. The question of the meaning of a written contract, including a review of the extrinsic evidence to determine whether any of the extrinsic evidence is conflicting, is a preliminary question for the court. Where there is conflicting extrinsic evidence the court, rather than the jury, must nonetheless decide the question of meaning except where the written language, read in context, is reasonably susceptible to both asserted meanings. Alaska Northern, 666 P.2dat39.[]

In the present case there is no question but that the guaranty was integrated. Further, although Vern’s affidavit concerning his conversations with Gary Roderick can be consulted on the question of the meaning of the guaranty, ultimately the language of the guaranty is such that it is not reasonably susceptible to the meaning advocated by Vern. It clearly was not limited to a particular loan, rather it was continuous and applied to all indebtedness incurred by Premier before it was revoked. The superior court correctly decided that the extrinsic evidence referred to by Vern was ineffective to change the meaning of the guaranty.

2. Were issues of mistake and misrepresentation raised as defenses to summary judgment?

Vern argues that Gary Roderick told him that the guaranty would only apply to the particular loan identified in the shaded area of the guaranty. He now claims that this was a misrepresentation rendering the guaranty void and that it gave rise to a material mistake on his part that also rendered the guaranty void. A guaranty is voidable if it is induced by a fraudulent or material misrepresentation by the obligee. Similarly, a contract may be voidable because of a mistake of one party as to a basic assumption when the mistake is known to the other party or is due to the fault of the other party. Here Vern’s mistake and misrepresentation claims are both based on Roderick’s alleged misrepresentation. The par-ol evidence rule does not apply when the remedy of rescission or reformation is sought as a result of misrepresentation, or mistake. Thus these defenses are not precluded by the parol evidence rule.

But there are two questions that must be resolved in connection with these defenses. First, is Vern’s affidavit sufficiently specific to support a claim that Roderick misrepresented the nature of the guaranty? Second, assuming that the affidavit is sufficiently specific to show factual misrepresentation, did Vern nonetheless fail to raise, and preserve for purposes of appeal, the defenses of mistake or misrepresentation? We turn to a discussion of these points.

a. Is the affidavit sufficiently specific?

In reviewing grants of summary judgment, we view the evidence submitted in opposition to a summary judgment motion in the light most favorable to the opponent, “resolving all reasonable implications that can be drawn from such evidence in favor of the opponent.” But we are also justified in disregarding parties’ statements made during litigation as to their subjective impressions or intent at the time of a transaction “unless the party in some way expressed or manifested his understanding at the time of contract formation.”

Vern’s affidavit, quoted supra page 9, contains several statements that are properly considered as nonprobative expressions of his subjective impressions and intent. His statement that he was “led to understand” that only some loans needed a guaranty and his statement that he would not have agreed to a continuing guaranty, fall in this category. Also, his reference to the guaranties subsequent to the June 5, 1996 guaranty are of doubtful probative effect as to what took place at the signing of the first guaranty, because the subsequent guaranties were signed after he had revoked the first guaranty. But the statement in the penultimate sentence — “this is how Gary explained it to me” — may be an averment of a communication made during the 1996 transaction. It can be interpreted as saying, when considered most favorably to Vern, that Roderick actually told Vern that the guaranty only applied to the loan number listed on the guaranty. As so construed, the affidavit makes a specific claim that Roderick misrepresented the nature of the guaranty.

b. Did Vern raise the defenses of mistake and misrepresentation in opposition to the motion for summary judgment?

Even though Vern’s affidavit could have supported defenses that the 1996 guaranty should be rescinded or reformed based on mistake or misrepresentation, these defenses were not asserted in Vern’s memorandum in opposition to the motion for summary judgment. Instead, he relied on his civil rights defense and on his claim that the guaranties “do not cover the one loan that was in default — Loan No. 200.” His memorandum in opposition to the motion for summary judgment extensively develops, for some thirty-seven pages, what appears to be all of his defenses to the motion. Yet at no point does it claim that the guaranty is unenforceable because of misrepresentation or mistake. Indeed, “misrepresentation” or “mistake” are not even mentioned in the memorandum.

Issues that are not raised in the superior court are waived and cannot be asserted on appeal as grounds for overturning a judgment. Here Vern’s affidavit was relevant to a defense to the motion for summary judgment that was raised — the coverage of the guaranty — and to two that were not raised- — -mistake and misrepresentation. The fact that the affidavit could have supported defenses that were not raised is not, in our view, sufficient to raise them.

Alaska Civil Rule 56(c) sets out the obligations of a party opposing a motion for summary judgment. It states in relevant part:

The adverse party in accordance with Rule 77 may serve opposing affidavits, a concise “statement of genuine issues” setting forth all material facts as to which it is contended there exists a genuine issue necessary to be litigated, and any other memorandum in opposition to the motion.

Vern did not file a document entitled “Statement of Genuine Issues,” but his memorandum stated his defenses in detail. Civil Rule 77, referred to in Civil Rule 56(c), requires an opponent to a motion to file “a brief, complete written statement of the reasons in opposition to the motion, which shall include an answering brief of points and authorities.” An opposing memorandum thus must include all of a party’s defenses to a motion. Neither the trial court nor the mov-ants should be required to guess whether factual evidence might support defenses that are not identified or relied on. Here, since Vern did not assert as reasons in opposition to the motion for summary judgment the defenses of mistake or misrepresentation, these defenses are waived and cannot be asserted on appeal.

C. Neither the Revocation Nor the Extensions Discharged Vern’s Liability.

Vern argues that his revocation in October 1997 of the June 1996 guaranty discharged him from liability for Loan 200. This claim is without merit for Loan 200 was made some eight months before the revocation. The guaranty states that it will “continue to bind Guarantor for all Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor’s written notice of revocation, including any extensions, renewals or modifications of the Indebtedness.” Even without such language, it is established that “upon termination of a continuing guaranty, the continuing guarantor remains a secondary obligor with respect to obligations of the principal obligor incurred prior to termination.”

Vern also argues that the three extensions without his written consent, as guarantor, voided any obligation that he had under the guaranty. This argument is also without merit. The guaranty explicitly included extensions. A guarantor’s consent to future extensions expressed in a guaranty is binding.

D. Did the Court Err in Failing To Prorate the Debt to All Co-Guarantors?

Citing the general rule that co-sureties between themselves should share the cost of performance of their obligations according to their respective contributive shares, Vern claims that Lloyd should be able to recover from him only twenty-five percent of the amount Lloyd paid in satisfaction of Loan 200. His theory is that Lloyd was the agent of Lute and that if Lute had paid off the entire obligation he would only be entitled to a contribution of twenty-five percent from Vern.

The primary difficulty with this argument is that Vern did not establish that Lloyd was acting as an agent for Lute when he acquired the note. As the trial court ruled, “Lloyd Cunningham stands in the shoes of Nor-thrim, the principal,” and the applicable rule is that “the principal’s entitled to recover the entire amount of the guaranty from [Vern], After [Vern] paid that, he would have a right of contribution from co-guarantors. That’s his suit. That’s not this suit.” Thus while Vern may have claims against Lute and Marilyn for their contributive shares, he did not establish a factual basis for asserting such claims against Lloyd.

E. Civil Rights Claims

1. The opinion of the superior court

The superior court granted the Stills’ civil-rights-based motion for summary judgment. It held that Northrim violated the Stills’ rights by requiring Wanda to sign a guaranty without a legitimate justification. The court voided Wanda’s guaranty because of this violation, but not Vern’s. These decisions are challenged in the current appeal and cross-appeal.

In the process of ruling on the Stills’ summary judgment motion the court wrote a thorough opinion. We set out portions of it here in order to establish the legal context for the claims presented:

A. Did Northrim violate state and/or federal law when it required Mrs. Still to sign a guaranty for the loan to her spouse’s business?
1. State law claim
The Stills argue that requiring Wanda Still to sign the guaranty before approving the loan to her spouse’s business violated Alaska civil rights laws, specifically AS 18.80.200, AS 18.80.210, and AS 18.80.250. Discrimination on the basis of marital status violates public policy in Alaska. Under AS 18.80.210, the opportunity to obtain credit and financing without discrimination based on marital status is a civil right. It is unlawful under AS 18.80.250 for a financial institution extending credit to permit one of its employees (a) to discriminate against a loan applicant because of marital status in a condition to obtaining credit, except to the extent allowed by federal law applicable to the same type of transaction, or (b) to refuse to extend credit to a married loan applicant who is otherwise creditworthy. The Alaska Supreme Court has held that AS 18.80.250 creates a private right of action allowing the aggrieved party to sue for damages for violation of the statute. Alaska’s civil rights statutes have been given a high priority in the past and have been construed broadly to further the goal of eradicating discrimination. In general, contract provisions that violate state law are unenforceable. Thus, if Mrs. Still’s guaranty violated Alaska civil rights law, it normally would be unenforceable.
AS 18.80.250, unlike other provisions in AS 18.80, expressly excludes any practice permitted by federal law:
(a)(1) ..., except to the extent of a federal statute or regulation applicable to a transaction of the same character
(b) Notwithstanding the provisions of (a) of this section, any practice permitted by federal statute or regulation applicable to financial or credit transactions of the same character as those covered by this section does not constitute discrimination under this section.
The federal Equal Credit Opportunity Act (15 U.S.C. § 1601 et seq.) and Regulation B (12 C.F.R. Pt. 202) apply to all credit transactions without regard to the nature or type of credit or creditor. Therefore, federal law must be analyzed first to determine whether Northrim’s requirement of Mrs. Still’s guaranty was permitted by federal law.
2. Did federal law permit Northrim to require Mrs. Still to sign a guaranty before approving a loan to her spouse’s business ?
The Stills argue that Northrim violated the Equal Credit Opportunity Act (ECOA), 15 U.S.C.A. § 1691(a)(1) and federal regulations. Regulation B states:
a creditor shall not require the signature of an applicant’s spouse ... on any credit instrument if the applicant qualifies under the creditor’s standards of creditworthiness for the amount and terms of the credit requested.
Federal regulations concerning the signature of a spouse or other person for extensions of credit are found at 12 C.F.R. § 202.7(d). The regulations are intended to assure that qualified applicants are able to obtain credit in their own' names. In general, the creditor may not require the signature of a spouse or other person unless the creditor relies upon the future income of the spouse or jointly owned property or the creditworthiness of the spouse or other person. The creditor may require the spouse’s signature if the applicant requests unsecured credit and the guaranty relies upon property owned jointly with the spouse to satisfy the creditor’s standards of creditworthiness. But the creditor may require the signature only on the instruments reasonably believed to be necessary to enable the creditor to access the property in the event of the death or default of the applicant, and provided that the creditor does not routinely require non-applicant joint owners to sign an instrument that would result in forfeiture of the non-applicant’s interest. Moreover, the spouse’s signature, which was sought because of property owned jointly, cannot be used to impose personal liability on the spouse for the entire debt.
When an applicant applies for individual credit but does not qualify alone, the creditor may require a cosigner or guarantor but cannot require that the cosigner or guarantor be the spouse. Specifically with respect to spousal guarantees, the official interpretation of 12 C.F.R. § 202.7(d) states that “although a creditor may require all officers of a closely held corporation to personally guarantee a corporate loan, the creditor may not automatically require that spouses of married officers also sign the guarantee.”
One federal district court rejected a creditor’s argument that the bank’s requirement of guaranties showed that the bank did not consider the debtor to be creditworthy. The court noted that the record contained no evidence that the debtor-spouse was not individually creditworthy in the bank’s eyes. Similarly, in this ease, the record contains no evidence that Vern Still was not independently creditworthy.

(Citation footnotes omitted.)

2. The court did not err in refusing to invalidate Vern’s guaranty.

Vern argues that since the trial court held that his right to obtain credit individually was violated when Northrim required Wanda to act as a guarantor the court should have invalidated his guaranty along with Wanda’s. He argues that as a general proposition contracts made in violation of law should be considered void and that this remedy is appropriate in this case in order to vindicate the violation of his civil rights. Although he cites general authority holding that a contractual provision may be invalidated if it is illegal or in violation of public policy, he cites no authority that has invalidated a guaranty that was permissibly required under equal rights lending laws.

A number of cases decided under Regulation B of ECOA have held that while a guaranty that was impermissibly required should be voided, it is not appropriate to void a guaranty that was permissibly required in the same transaction. In general, the reasons for this result are that the civil rights violation caused the impermissibly required guaranty to be signed. But even if the lender had complied with the civil rights law, the permissibly required guaranty still would have been executed. Even though the permissibly bound guarantor must honor his guaranty, he may rely on statutory damage remedies for vindication, assuming the statute of limitations has not run, and assuming that he has suffered damages.

A leading case expressing this reasoning is Integra Bank/Pittsburgh v. Freeman. There the court stated:

I conclude, therefore, that while an ECOA violation should not void the underlying credit transaction an offending creditor should not be permitted to look for payment to parties who, but for the ECOA violation, would not have incurred personal liability on the underlying debt in the first instance. This rule places a creditor in no worse position than if it had adhered to the law when the credit transaction occurred. A creditor may not claim to have relied factually upon a guarantor’s assets if it has never requested nor received financial information regarding them. Further, a creditor may not claim legal reliance on a signature that was illegally required in the first instance.
With regard to other credit applicants involved in a tainted credit transaction— the primary credit seeker and permissibly required sureties or guarantors for example — I conclude that the purpose of the ECOA would not be furthered by permitting them to assert an alleged ECOA violation as a defense to liability on the underlying debt. These parties’ liability for the underlying debt exists independent of the alleged ECOA violation. Congress did not enact the ECOA to permit permissibly bound debtors to escape contractual liability when called upon to perform. To allow an ECOA defense to liability in such circumstances would not advance Congress’ stated intent to allow creditworthy applicants to enter into credit transactions without regard to their marital status.
In stating that permissibly bound debtor parties may not assert an ECOA violation to escape liability on the underlying debt it does not follow that these parties cannot suffer an injury cognizable under the ECOA. A cognizable injury to such a party may occur if — as an objectively qualified loan applicant or guarantor — the party is nonetheless impermissibly required to secure a spouse’s or other party’s signature pursuant to a loan transaction. The ECOA affords these parties an affirmative cause of action for their actual “actual damages sustained” under 15 U.S.C. § 1691e(a).[]

Other cases employing similar reasoning include Silverman v. Eastrich Multiple Investor Fund and FDIC v. Medmark, Inc.

We agree with these authorities both as interpretations of ECOA and as analogous authority concerning how state law should be applied. If Northrim Bank had fully complied with ECOA and its state law counterparts, Vern would still be liable under the 1996 guaranty. Ordering the forfeiture of a permissibly required guaranty that was obtained along with an impermissibly required one does not seem necessary to deter lending institutions from illegal conduct. The array of other potential sanctions, including compensatory damages, punitive damages in egregious cases, injunctive relief, criminal sanctions, and the voiding of the impermis-sibly required guaranty along with actual attorney’s fees to the party whose guaranty was impermissibly required, all serve to deter forbidden conduct.

F. Did the Trial Court Err by Granting Summary Judgment in Favor of Wanda?

On cross-appeal Lloyd argues that the superior court should not have granted summary judgment in favor of Wanda. He argues that Wanda had the burden of establishing that Premier, rather than Vern, was independently creditworthy. He also contends that there was no evidence that Northrim required Wanda to sign a guaranty for the impermissible reason that she was Vern’s spouse and that there were questions of fact as to whether the bank required her guaranty because it was relying on joint property owned by the Stills or on Wanda’s annual wages of some $54,000.

Lloyd’s first point — that the relevant inquiry was whether Premier Homes rather than Vern was independently creditworthy — is without merit. The applicable regulation is 12 C.F.R. § 202.7(d) (2004). It provides:

Signature of spouse or other person—
(1) Rule for qualified applicant. Except as provided in this paragraph, a creditor shall not require the signature of an applicant’s spouse or other person, other than a joint applicant, on any credit instrument if the applicant qualifies under the creditor’s standards of creditworthiness for the amount and terms of the credit requested.

Under the regulations, both Premier and Vern were applicants. But since Wanda is the spouse of Vern, not Premier, the “applicant” whose standard of creditworthiness is at issue in the present context is Vern.

Concerning Lloyd’s argument that Wanda failed to produce evidence that Northrim discriminated against her based on marital status, the actual legal question that must be addressed need not be stated in those broad terms. The applicable regulation is 12 C.F.R. § 202.7(d)(1), set forth above. Under this regulation, requiring the signature of an applicant’s spouse is prohibited if the applicant qualifies under the creditor’s standards of creditworthiness for the amount and terms of the credit requested. As to this question the evidence presented by the Stills showed that Vern was independently creditworthy, that his creditworthiness did not depend on jointly owned property, and that Northrim did not require Wanda to sign a guaranty because of her income.

The superior court discussed these points as follows:

Vern Still states in his affidavit that he was creditworthy without his wife. Mr. Cunningham contends that this is a self-serving statement made during litigation that does not raise an issue of fact. The bank’s documents, however, note that Mr. Still was the owner of StillMeyer Corp., which owned a large subdivision, and the Valley Water Company. A 1998 report discusses Mr. Still’s financial condition and makes no mention of Mrs. Still. Because the Stills filed joint tax returns, Mr. Still’s tax return necessarily included income information about his wife. But, the joint tax return does not show whether or not Northrim relied on Mrs. Still’s income. Moreover, Mr. Roderick stated in his deposition that Mrs. Still’s signature was of little importance to the loan transaction, thus seemingly admitting that Premier Homes would have been able to obtain the line of credit without Mrs. Still’s guaranty.
Lloyd Cunningham argues that the Stills have failed to show that there are no factual issues regarding whether Mr. Still was creditworthy on his own. A March 5, 1997, internal report states that “[financial strength and depth of Premier Homes lay with Vern and Wanda Still ” and “[t]heir 2/97 statement shows a Net Worth of $4.9 million.” The same report, however, attributes this net worth to the Valley Water Company and the real estate holdings of StillMeyer. Wanda Still had no interest in either company. The W-2 form indicates that the reported wages for the Stills were solely those of Wanda Still, who was employed by Valley Water Company. Mr. Cunningham argues that Northrim may have been justified in obtaining Mrs. Still’s signature on a guaranty, because the presence of information about her in the loan file shows that the bank might have used the joint finances of Vern and Wanda Still, particularly her salary, in the decision about Premier Homes’ loan. There is no evidence to support this speculation. The loan was to be paid primarily in one large balloon payment approximately a year after the date on the note. Even the gross amount of Mrs. Still’s salary was only about 1/4 of the total principal owed when the note matured. No juror could reasonably believe that the relatively small amount' of cash that might be available from Mrs. Still’s salary was important to Northrim’s decision on loan No. 200 to Premier Homes. The Stills’ $4.9 million net worth (all or most of which came from Mr. Still’s companies) noted in the bank’s report was many times greater than Mrs. Still’s salary. Nothing in Northrim’s loan files has been brought to this court’s attention from which an inference could be made that Vern Still was not sufficiently creditworthy individually to guarantee the loans to Premier Homes along with the other shareholders and officers of the company. Mr. Roderick stated in his deposition that he believed Wanda Still was of no importance to the credit transaction.

(Citation footnotes omitted.) We agree with the court’s analysis and with its conclusion that “Vern Still was independently creditworthy without Wanda Still’s salary or her interest in jointly owned property. No jury could reasonably find otherwise.”

G. Should Wanda Have Been Awarded Attorney’s Fees under a Reasonable Actual Fee Standard?

The superior court ruled that Wanda was the prevailing party and awarded her attorney’s fees of $1,992.15. This award was made under Civil Rule 82(b)(2), which provides for a partial award of attorney’s fees of twenty percent of reasonable and actual fees to a prevailing party who does not recover a money judgment in a case that is resolved short of trial. The trial court found that Wanda’s reasonable actual fees were $9,960.75 and awarded her twenty percent of this sum.

Section 1691e(d> of ECOA provides for the recovery of a reasonable attorney’s fee “in the case of any successful action under subsection (a), (b) or (c) of this section.... ” Subsection (c) provides for a grant of “such equitable and declaratory relief as is necessary to enforce the requirements imposed under this subchapter.” “A reasonable fee” in section 1691e(d) means a reasonable actual fee rather than a reasonable partial fee as would be awarded under Civil Rule 82. -\yanda argues that the court should have applied section 1691e(d) and awarded her actual fees.

In reply, Lloyd contends that a prerequisite to an award of fees under section 1691e(d) is that the litigant requesting such fees must have filed an action. Lloyd relies on North Carolina Department of Transportation v. Crest Street Community Council, Inc., where the United States Supreme Court held that an independent action seeking attorney’s fees under 42 U.S.C. § 1988 could not be maintained. Instead, such fees may only be sought in litigation in which a party seeks to enforce the civil rights laws listed in section 1988. We do not regard the North Carolina case as closely analogous authority. The Supreme Court did not rule that attorney’s fees under section 1988 would not be available in an action in which the prevailing party sought to enforce one of the applicable civil rights laws as an affirmative defense or a setoff.

Whether section 1691e(d) authorizes an award of attorney’s fees to a litigant who is not a plaintiff is a question of federal law. But so far as we can tell, no federal or state court has held that section 1691e(d) either permits or precludes fee awards to prevailing defendants. The parties have brought no authoritative decisions on the issue to our attention and we have found none.

Our case of Hayer v. National Bank of Alaska presents a close analogy. The Hay-er case arose when the bank sued the Hayers for a debt. They defended claiming that the bank had violated the federal Truth in Lending Act, 15 U.S.C. § 1601-65. They claimed that they were entitled to a partial offset for statutory penalties because of the bank’s violations. The trial court found that the debt was owed and that the Hayers were entitled to a partial offset because the bank had violated the federal act. The court made no award of costs or fees to the Hayers. They appealed claiming, in part, that they were entitled to an award of attorney’s fees under 15 U.S.C, § 1640(a)(3), which “provides that a creditor violating the Truth-in-Lending Act is liable ‘in the case of any successful action to enforce [rights under the act for] the costs of the action, together with a reasonable attorney’s fee as determined by the court.’ ” We held that the Hayers were entitled to attorney’s fees under this provision, even though their claim was asserted as a setoff:

It might be argued that the rationale behind such an award of attorney’s fees is inapplicable where the debtor is the defendant instead of the plaintiff and asserts the Truth-in-Lending violation as a setoff to a suit on the underlying debt. We see no reason to make such a distinction. At least one case holds that attorney’s fees are to be awarded where the debtor prevails on a counterclaim, Robert Levitan & Sons, Inc. v. Francis, 88 Misc.2d 125, 387 N.Y.S.2d 35 (1976), and we can see no significant difference between a setoff and a counterclaim in this context. Because of the Hayers’ assertion of their Truth-in-Lending Act claim, the appellee, a large state-wide bank, had been alerted to its non-compliance with the federal act and will presumably take steps to ensure future compliance. The congressional policy of enforcement through private litigation will thus have been furthered by assertion of the Hayers’ claim. We believe therefore that the court should have awarded them a reasonable attorney’s fee.[]

We believe that this rationale applies as strongly to ECOA violations as to Truth-in-Lending Act violations. We conclude therefore that the court should have awarded Wanda reasonable actual attorney’s fees. On remand the superior court should award Wanda a fee of $9,960.75 for her successful assertion of her entitlement to equitable relief under 15 U.S.C. § 1691e(c).

IV. CONCLUSION

The award of attorney’s fees to Wanda Still is REVERSED. On remand the court should award her $9,960.75. In all other respects, the judgment of the superior court is AFFIRMED.

      . Lute and Marilyn Cunningham also signed identical guaranties in favor of Northrim on June 5, 1996.

      . Back-up documentation indicates that this is a reference to Vern and Wanda, not Vern and Mark.

      . The court stated, in part:
      the language is as clear as any that one sees in any of the case law about what the meaning of the guaranty was. And the Stills signed them without question in 1996.
      The times that other guaranties were required was after ... Mr. Still revoked that guaranty. And so the conduct is in a different kind of context. And I don’t think it ... can be used to raise an ambiguity about what the document said.
      ... the course of conduct that is actually relevant is the fact that there were no guaranties that were required until Mr. Still revoked his guaranty. That course of conduct says that it was a continuing guaranty and everybody knew it.
      ... I also find that Mr. Still’s letter ... terminating his guaranty wasn’t effective with respect to loan number 200....

      ... the other issue that was raised had to do with the extensions. And certainly there are some ... times that extensions can void a guaranty. But in these particular guaranties, there were provisions specifically in the guaranties themselves that ... cover[] extensions.
      So the language is sufficient to take it out of that ... kind of case where there’s a voiding by the fact of extensions.

      . The Stills' conspiracy counterclaim was evidently considered resolved favorably to Lloyd, although the briefs do not describe the procedural mechanism by which this occurred.

      . West v. Umialik Ins. Co., 8 P.3d 1135, 1137 (Alaska 2000).

      . Alaska R. Civ. P. 56(c).

      . Philbin v. Matanuska-Susitna Borough, 991 P.2d 1263, 1265-66 (Alaska 1999) (quotations omitted).

      . West, 8 P.3dat 1137.

      . 778 P.2d 581, 583-84 (Alaska 1989) (footnotes omitted).

      . Restatement (Third) of Suretyship and Guaranty § 12(1) (1996).

      . Restatement (Second) of Contracts § 153 (1981); see Restatement (Third) of Suretyship and Guaranty § 12(3).

      . Diagnostic Imaging Ctr. Assocs. v. H & P, 815 P.2d 865, 867 (Alaska 1991).

      . Norville v. Carr-Gottstein Poods Co., 84 P.3d 996, 1003 (Alaska 2004).

        .Id.; see also Peterson v. Wirum, 625 P.2d 866, 870 (Alaska 1981):
      Differences of opinion among the parties as to their subjective intent, expressed during the litigation, do not establish an issue of fact regarding the parties’ reasonable expectations at the time they entered into the contract, since such self-serving statements are not considered to be probative. Rather, the court must look to the express manifestations of each party’s understanding of the contract in attempting to give effect to the intent behind the agreement.
      (Footnotes omitted.)

      . Hagans, Brown & Gibbs v. First Nat'l Bank of Anchorage, 783 P.2d 1164, 1166 n. 2 (Alaska 1989) ("Issues not properly raised or briefed at trial are not properly before this court on appeal.”).

      . Alaska R. Civ. P. 77(c)(l)(ii).

      . Restatement (Third) of Suretyship and Guaranty § 16 (1996).

      . He consented to the second extension in his capacity of vice president of Premier. See supra page 4.

      . The guaranty provided in relevant part:
      DURATION OF GUARANTY. This Guaranty ... will continue in full force until all Indebtedness incurred or contracted before receipt by Lender of any notice of revocation shall have been fully and finally paid and satisfied and all other obligations of Guarantor under this Guaranty shall have been performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may only do so in writing.... Written revocation of this Guaranty will apply only to advances or new Indebtedness created after actual receipt by Lender of Guarantor's written revocation ... This Guaranty will continue to bind Guarantor for all Indebtedness incurred by Borrower or committed by Lender prior to receipt of Guarantor's written notice of revocation, including any extensions, renewals, substitutions or modifications of the Indebtedness. All renewals, extensions, substitutions, and modifications of the Indebtedness granted after Guarantor's revocation, are contemplated under this Guaranty and, specifically will not be considered to be new Indebtedness.... Release of any other guarantor or termination of any other guaranty of the Indebtedness shall not affect the liability of Guarantor under this Guaranty.

      . See Restatement (Third) of Suretyship and Guaranty'! 48(1).

      . See id. §§ 55, 57.

      . 839 F.Supp. 326 (E.D.Pa.1993).

      . Id. at 329-30 (citation omitted).

      . 51 F.3d 28 (3d Cir.1995).

      . 897 F.Supp. 511 (D.Kan.1995); see also, Southwestern Pennsylvania Reg'l Council, Inc. v. Gentile, 776 A.2d 276, 282 (Pa.Super.2001); Eure v. Jefferson Nat'l Bank, 248 Va. 245, 448 S.E.2d 417, 421 (1994).

      . See AS 22.10.020(i); Loomis v. Schaefer, 549 P.2d 1341, 1343 (Alaska 1976).

      . Id.

      . Id.

      . AS 18.80.270.

      . See infra pages 26-29.

      . 12 C.F.R. § 202.2(e) (2004).

      . 15 U.S.C. § 169le(d) provides as follows:
      Recovery of costs and attorney’s fees
      In the case of any successful action under subsection (a), (b), or (c) of this section, the costs of the action, together with a reasonable attorney’s fee as determined by the court, shall be added to any damages awarded by the court under such subsection.

      . See Hayer v. Nat’l Bank of Alaska, 663 P.2d 547 (Alaska 1983).

      . 479 U.S. 6, 107 S.Ct. 336, 93 L.Ed.2d 188 (1986).

      . 42 U.S.C. § 1988 states in relevant part: "In any action or proceeding to enforce a provision of ... Title VI of the Civil Rights Acts of 1964 ..., the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee as part of the costs.”

        .North Carolina, 479 U.S. at 11, 107 S.Ct. 336.

      . Courts in two cases, in dicta, have stated or implied that a prevailing defendant may not rely on that statute for an award of attorney’s fees. Integra Bank/Pittsburgh v. Freeman, 839 F.Supp. 326 (E.D.Pa.1993) (implying in dictum that attorney's fees would not be available under statute to defendant seeking recoupment); Durdin v. Cheyenne Mountain Bank, - P.3d -, at -, 2004 WL 352089, at 6 (Colo.App., Feb.26, 2004) (stating in dictum that fees are not available under this statute to defendants).

      . 619 P.2d 474 (Alaska 1980).

        .Id. at 476.

      . Id.


author: Judge NEY.

text:
    Enrique LOBATO, Petitioner, v. INDUSTRIAL CLAIM APPEALS OFFICE OF the STATE of Colorado and Western Forge, Respondents.
    No. 02CA1145.
    Colorado Court of Appeals, Div. II.
    June 5, 2003.
    Rehearing Denied July 24, 2003.
    Certiorari Granted Aug. 2, 2004.
    Steven R. Waldmann, Colorado Springs, Colorado, for Petitioner.
    No Appearance for Respondent Industrial Claim Appeals Office.

      Dworkin, Chambers & Williams, P.C., David J. Dworkin, Margaret Bauder Garcia, Denver, Colorado, for Respondent, Western Forge.
    Brandee Defalco Galvin, Denver, Colorado, for Amicus Curiae Pinnacol Assurance.
   Opinion by

Judge NEY.

The sole issue in this workers’ compensation case against Western Forge (employer) concerns the time frame during which Enrique Lobato (claimant) was required to request a division-sponsored independent medical examination (DIME) under the 1999 amendments to § 8-42-107.2, C.R.S.2002. We conclude that claimant’s request for a DIME was untimely and therefore affirm the final order of the Industrial Claim Appeals Office (Panel) striking the DIME report and denying medical impairment benefits based on the DIME physician’s rating.

A year after claimant’s 1992 compensable injury, a treating physician placed claimant at maximum medical improvement (MMI) and assigned a zero percent rating for permanent impairment. Employer filed a final admission of liability (FAL) in 1994, which admitted liability for zero percent permanent partial disability (PPD) benefits. Claimant timely objected on grounds that he was not at MMI and was entitled to benefits for permanent medical impairment.

No further action was taken until 1995, when claimant sought an award of future medical benefits and alleged a new injury resulting from the aggravation of the 1992 injury. In an order mailed November 4, 2000, the administrative law judge (ALJ) found that claimant failed to prove a new injury and denied the request for future medical treatment of the 1992 injury. That order was not appealed.

Less than thirty days after the order, on November 30, 2000, claimant requested a DIME by filing a notice and proposal to select a DIME physician. The DIME was performed in February 2001, and the DIME physician assigned a fifteen percent whole person impairment rating.

Relying on § 8-42-107.2, employer asserted that claimant’s notice and proposal to select a DIME was untimely filed. The ALJ agreed and therefore granted employer’s motion to strike the DIME report and denied claimant’s request for PPD benefits based on the DIME physician’s rating. The Panel affirmed, with one Panel member specially concurring.

Claimant contends that his DIME request was timely because he had no notice of any time limit within which he had to request a DIME. We disagree, though for reasons other than those relied upon by the majority of the Panel.

In 1991, the DIME procedure was enacted as a means to resolve disputes pertaining to the treating physician’s opinion as to MMI and impairment. Colo. Sess. Laws 1991, ch. 219, § 8-42-107(8)(b)-(c) at 1309-10; see Cordova v. Indus. Claim Appeals Office, 55 P.3d 186 (Colo.App.2002)(opinions of a DIME physician concerning MMI and medical impairment are binding unless overcome by clear and convincing evidence). There was no requirement to file a DIME request within a certain time until 1998, when § 8 — 42-107.2 was enacted. Colo. Sess. Laws.1998, ch. 313 at 1432.

Section 8-42-107.2 created a procedure for the selection of a DIME physician. Section 8-42-107.2(1), C.R.S.2002. But see Whiteside v. Smith, 67 P.3d 1240 (Colo. 2003)(fee requirement in § 8-42-107.2 is unconstitutional because it deprives injured indigent claimants of their property interests without due process). It provides that a claimant who disputes the treating physician’s medical impairment rating must file a notice and proposal to select a DIME physician within thirty days of the date of mailing of a FAL by the insurer or self-insured employer that includes an impairment rating issued in accordance with § 8-42-107, C.R.S. 2002. Section 8-42-107.2(2)(a)(I)(A), (b), C.R.S.2002.

When originally enacted in 1998, § 8 — 42-107.2 applied to injuries that occurred on or after August 5,1998. Colo. Sess. Laws 1998, ch. 313 at 1432. However, in 1999, the statute was amended to apply to injuries occurring as early as 1991. Colo. Sess. Laws 1999, ch. 86, § 8-42-107.2(6) at 255 (effective Sept. 1, 1999, § 8 — 42-107.2 is a “remedial statute and is procedural in nature,” and it “shall be applicable to all open cases with a date of injury on or after July 1, 1991, for which a [DIME] has not been requested, pursuant to section 8-42-107”).

Two Panel members found that claimant had thirty days from the date of mailing of the 1994 FAL because the “remedial” and “procedural” language in § 8-42-107.2(6) made the “unambiguous” provisions of § 8-42-107.2 retroactive. The third, specially concurring Panel member, finding that § 8-42-107.2 was “ambiguous,” concluded that claimant had thirty days from the September 1, 1999, effective date of § 8-42-107.2(6), because that was the “triggering event” which put claimant on notice of his obligation. Employer agrees with this interpretation, adding that claimant could have requested a DIME any time between the August 5, 1998, effective date of § 8-42-107.2(2)(b), and September 1, 1999, because until the effective date of § 8-42-107.2(6), the thirty-day requirement was presumed prospective.

In addition to these two agency interpretations, the director of the Division of Workers’ Compensation has yet a third. See § 8-47-101(2), C.R.S.2002 (director enforces and administers the Workers’ Compensation Act); Colo. Dep’t of Labor & Employment v. Esser, 30 P.3d 189 (Colo.2001)(Panel and ALJ comprise portions of the agency); Popke v. Indus. Claim Appeals Office, 944 P.2d 677 (Colo.App.1997)(director is the administrator of the agency). Implicitly finding an ambiguity, she opined that where a claimant objected to a FAL prior to the effective date of § 8-42-107.2(6), there must be a triggering event, a new or revised FAL, or a medical report, before the thirty-day period to request a DIME begins to run. Any other interpretation, in her view, “would present due process concerns.” M.A. Whiteside, HB 99-1019, Selection of an Independent Medical Examiner, 14 About Claims 2 (Nov.1999).

In reliance on the director’s interpretation, claimant asserts that his DIME request was timely because the ALJ’s 2000 order was the triggering event which put him on notice of his obligation to request a DIME within thirty days. Resolution of this contention requires our resort to the familiar rules of statutory interpretation.

In construing statutes, courts must give effect to the underlying legislative intent. To do so, courts first look to the statutory language itself, giving words and phrases their commonly accepted and understood meanings. If the statutory language is unambiguous, there is no need to resort to interpretive rules of statutory construction. Therefore, if courts can give effect to the ordinary meaning of the words adopted by the General Assembly, the statute should be construed as written, because it may be presumed that the General Assembly meant what it clearly said. Davison v. Indus. Claim Appeals Office, 72 P.3d 389 (Colo.App. No. 02CA0922, Jan. 2, 2003); see Holliday v. Bestop, Inc., 23 P.3d 700 (Colo.2001).

However, if the statute is silent or ambiguous with respect to a specific issue, the court must determine whether the agency’s interpretation is based on a permissible construction of the statute. Janssen v. Indus. Claim Appeals Office, 40 P.3d 1 (Colo.App. 2001), rev’d on other grounds sub nom. Indus. Claim Appeals Office v. Zarlingo, 57 P.3d 736 (Colo.2002); see Longmont Toyota, Inc. v. Indus. Claim Appeals Office, 85 P.3d 548 (Colo.App. No. 02CA0441, Feb. 13, 2003) (interpretation given a statute by the officer or agency charged with its administration is ordinarily entitled to deference).

Here, even though § 8^42-107.2(6) expressly states that § 8-42-107.2 is applicable to all claims with a date of injury on or after July 1, 1991, for which no DIME has been requested, it is silent regarding its applicability to claimants who obtained and objected to a FAL prior to the September 1, 1999, effective date of the amendment.

This silence creates an ambiguity, and the existence of the various Division interpretations of this amendment serves to underscore that fact. Normally, we would be called upon to determine whether a single agency interpretation is based on a permissible construction of § 8-42-107.2(6). However, because of the internal inconsistencies in the various interpretations, we also must decide which of the three interpretations we adopt. See Janssen v. Indus. Claim Appeals Office, supra. That decision requires resort to the interpretative rules of statutory construction. See Damson v. Indus. Claim Appeals Office, supra.

One guiding principle is that the interpretation of a statute may not cause an absurd result. See § 2-4-201(l)(c), C.R.S. 2002 (a just and reasonable result is intended); Indus. Claim Appeals Office v. Orth, 965 P.2d 1246 (Colo.1998); Support, Inc. v. Indus. Claim Appeals Office, 968 P.2d 174 (Colo.App.1998). Thus, we cannot sanction an interpretation that makes compliance impossible.

As claimant argues, he could not have known that he had to request a DIME within thirty days of the date of mailing of the 1994 FAL, given that § 8-42-107.2(6) was not enacted until 1999. Thus, the interpretation adopted by the majority of the Panel is impermissible because it is unreasonable to expect claimant to have known, at the time of the 1994 FAL, that he was required to act within a certain time. And because the lack of notice inherent in the Panel’s majority interpretation might call into question the constitutionality of the amendment, we should avoid that result. See Colo. Springs Disposal v. Indus. Claim Appeals Office, 58 P.3d 1061 (Colo.App.2002). We therefore conclude that the interpretations by the majority of the Panel and the Director are not permissible.

In contrast, the interpretation of the specially concurring Panel member is correct because she recognizes that a claimant’s opportunity to request a DIME would be foreclosed if the time for the request expired prior to the effective date of the amendment. And we agree that the stated purpose of § 8-42-107.2(6) — to “improve and simplify” remedies already existing under the Act — is furthered if the thirty-day period begins to run from the September 1, 1999, effective date of § 8-42-107.2(6).

Furthermore, statutes are presumed to operate prospectively. Section 2-4-202, C.R.S. 2002; see Colo. Const, art. II, § 11 (General Assembly shall pass no law retrospective in its operation). Although the majority of the Panel relied on Vetten v. Industrial Claim Appeals Office, 986 P.2d 983 (Colo.App.1999), for the proposition that application of a statute to a pending claim for relief does not violate the prohibition of retrospective legislation when the statute effects a change that is only procedural or remedial in nature, we agree with the specially concurring Panel member thatthis case is distinguishable. Vetten involved a claimant’s petition to reopen a 1975 injury claim that was subject to the 1988 amendments to the reopening statute, and the court rejected the contention that application of the amendments was unconstitutional retrospective legislation. However, because those amendments involved a statute of limitations for initiating a claim, they did not, as here, foreclose the claimant from proceeding with an active and ongoing claim for relief.

Here, September 1, 1999, was the date which triggered the applicability of the statute because as of that time, claimant was on notice of his obligation to request a DIME. Accordingly, we hold that for claimants who obtained and objected to a FAL prior to the effective date of § 8-42-107.2(6), the thirty-day period for requesting a DIME began to run on September 1,1999.

In so holding, we do not lightly dismiss the director’s stance that a “triggering event,” other than the effective date of the amendment itself, was necessary before the time period could run. However, if employer had, for instance, filed an amended FAL, that filing would simply “trigger” the time period as it related to the new FAL, not the one filed in 1994. There was no amended FAL here, and there is no statutory requirement that employer “refile” the 1994 FAL simply to prompt claimant to act.

Likewise, if claimant had successfully established that his aggravation was related to the 1992 injury, then the DIME process could have commenced anew. Claimant’s failure to appeal the ALJ’s 2000 order concluding that there was no aggravation foreclosed that possibility, and therefore, contrary to claimant’s argument, that order cannot be deemed a “trigger” for the thirty-day period.

Accordingly, because claimant had thirty days from September 1, 1999, to request a DIME, and no timely request was filed, the ALJ did not err in finding that claimant lost the right to dispute the treating physician’s impairment rating and that the zero percent rating is therefore binding.

The order of the Panel is affirmed.

Judge MARQUEZ and Judge CARPARELLI, concur.


author: Judge DAILEY.

text:
    YACHT CLUB II HOMEOWNERS ASSOCIATION, INC., Plaintiff-Appellant, v. A.C. EXCAVATING; Brady Son Bonded Roof Co.; Dirt-N-All Excavating; NDF Company; Formex Concrete Forming, Inc.; Frank’s Finish Grading, Inc.; Hesterly Holland Construction, LLC; K.J. Woodworks, Ltd.; Rocky Mountain Flatwork, Inc.; Stevens Excavating, Inc.; Watren Concrete Forming, Inc.; and Yeager Concrete Corporation, Defendants-Appellees.
    No. 02CA0645.
    Colorado Court of Appeals, Div. III.
    Nov. 20, 2003.
    Certiorari Granted July 26, 2004.

      Holland & Hart, LLP, Joseph W. Halpern, Teresa D. Locke, Denver, Colorado; McKenzie Rhody & Hearn, LLC, T. Cass McKenzie, Michael A. Hearn, Andrew M. Karr, Denver, Colorado, for Plaintiff-Appellant.
    Messner & Reeves, LLC, John K. Shunk, Denver, Colorado, for Defendant-Appellee A.C. Excavating.
    Harris Karstaedt Jamison & Powers, A. Peter Gregory, James G. Gaspich, Engle-wood, Colorado, for Defendants-Appellees Brady & Son Bonded Roof Co., Formex Concrete Forming, Inc., Frank’s Finish Grading, Inc., Hesterly Holland Construction, LLC, and Watren Concrete Forming, Inc.
    Markusson, Green & Jarvis, P.C., H. Keith Jarvis, David B. Bush, Denver, Colorado, for Defendant-Appellee Dirh-N-All Excavating.
    Burg Simpson Eldredge Hersh & Jardine, P.C., Peter W. Burg, Kathy Hix, David K. Teselle, Englewood, Colorado, for Defendant-Appellee NDF Company.
    Ray Lego & Associates, Janet S. Bouffard, Greenwood Village, Colorado, for Defendants-Appellees KJ Woodworks, Ltd. and Rocky Mountain Flatwork, Inc.
    Fowler, Schimberg & Flanagan, P.C., Daniel M. Fowler, Steven W. Fox, Denver, Colorado, for Defendant-Appellee Stevens Excavating, Inc.
    Hall & Evans, LLC, Bruce A. Menk, Denver, Colorado, for Defendant-Appellee Yeager Concrete Corporation.
   Opinion by

Judge DAILEY.

In this construction defects case, plaintiff, Yacht Club II Homeowners Association, Inc. (HOA), appeals the judgment entered in favor of defendants, A.C. Excavating; Brady & Sons Bonded Roof Co.; Dirl^N-All Excavating; NDF Company; Formex Concrete Forming, Inc.; Frank’s Finish Grading, Inc.; Hesterly Holland Construction, LLC; K.J. Woodworks, Ltd.; Rocky Mountain Flat-work, Inc.; Stevens Excavating, Inc.; Wa-tren Concrete Forming, Inc.; and Yeager Concrete Corporation (collectively, subcontractors). We reverse and remand for further proceedings.

The issues on appeal concern the HOA’s right to pursue claims of negligence against subcontractors for the following problems encountered in the individual units and common areas of a townhome development: heaving basement floors, cracking concrete foundations and slabs, reverse sloping driveways, leaking windows and doors, slanted floors, damaged drywall, standing water in garages, movement of framing, water penetration of the roofs and underlying structures, water staining, wet insulation, decaying floor sheathing, and deteriorating external trim.

Attributing these problems to various architectural, grading, drainage, structural, and concrete flatwork defects, as well as to improper installation of-windows, doors, roof trusses, and shingles, the HOA instituted the present action against (1) the developer and general contractor for breach of implied warranty, breach of express warranty, violation of the Colorado Consumer Protection Act, and negligence; and (2) subcontractors for negligence.

The HOA settled with the developer, general contractor, and other subcontractors not parties to this appeal. As pertinent to the remaining subcontractors, the trial court granted a motion for partial summary judgment against the HOA, on the ground that it lacked standing to assert claims for damages to individually owned units. When the HOA requested reconsideration or, in the alternative, leave to amend to add individual unit owners as plaintiffs, the trial court denied the request as moot. The court relied on its interim partial summary judgment ruling that barred the HOA’s negligence claims, even in relation to common areas, based on the economic loss rule, because the HOA was a third-party beneficiary of subcontractors’ warranties to the general contractor.

Because negligence was the only claim the HOA alleged against the subcontractors, the trial court entered judgment in favor of the subcontractors.

I.

The HOA contends that the trial court erred in concluding that it lacked standing to pursue claims for construction defects damage to individual townhome units. We agree.

Although the trial court determined that its standing ruling had become moot in light of its economic loss ruling, we choose to address the standing issue because of its jurisdictional nature. See Ajay Sports, Inc. v. Casazza, 1 P.3d 267, 272 (Colo.App.2000).

In Villa Sierra Condominium Ass’n v. Field Corp., 787 P.2d 661, 667 (Colo.App. 1990), a division of this court indicated that a condominium association lacked standing to assert claims on behalf of condominium unit owners against a builder-vendor for damages to individual units caused by construction defects.

In 1991, the General Assembly enacted the Colorado Common Interest Ownership Act (CCIOA), § 38-33.3-101, et seq., C.R.S.2003. Under the CCIOA, a unit owners association is empowered, “subject to the provisions of [its] declaration,” to “[ijnstitute, defend, or intervene in litigation or administrative proceedings in its own name on behalf of itself or two or more unit owners on matters affecting the common interest community.” Section 38-33.3-302(l)(d), C.R.S.2003.

Here, the trial court determined that the HOA lacked standing to pursue damage claims on behalf of individual unit owners under Villa Sierra. Further, the court determined that the HOA could not assert standing under the CCIOA because the HOA’s declaration excluded individual units from the common interest community.

On appeal, the subcontractors concede that the court erred in its construction of the HOA’s declaration. Nonetheless, they contend that the CCIOA does not confer standing upon the HOA to raise damage claims related to individual units. Claims of that nature are not, they argue, “matters affecting the common interest community.” In support of this argument, they direct our attention to differences in the association’s and the unit owners’ rights and obligations with respect to the “common elements” of, and the individual units in, a common interest community, as set out in § 38-33.3-307(1), C.R.S.2003 (except as otherwise provided in the declaration or by statute, “the association is responsible for maintenance, repair, and replacement of the common elements, and each unit owner is responsible for maintenance, repair, and replacement of such owner’s unit”). We are not persuaded.

The interpretation of a statute is a question of law. See Ryals v. St. Mary-Corwin Reg’l Med. Ctr., 10 P.3d 664, 659 (Colo.2000). Our task in interpreting a statute is to give effect to legislative intent. Preston v. Dupont, 35 P.3d 433, 437 (Colo. 2001).

We presume that, in enacting a statute, the legislature was aware of prior decisional law, Colorado Springs Disposal v. Indus. Claim Appeals Office, 58 P.3d 1061, 1063 (Colo.App.2002), and we accept the intent of the drafters of a uniform act as the General Assembly’s intent when it adopts a uniform act. See Copper Mountain, Inc. v. Poma of Am., Inc., 890 P.2d 100, 106 (Colo. 1995).

We construe words and phrases that have acquired a technical or particular meaning, whether by legislative definition or otherwise, accordingly. See § 2-4-101, C.R.S. 2003; Pierson v. Black Canyon Aggregates, Inc., 48 P.3d 1215, 1219 (Colo.2002).

If the meaning of a statute is clear and unambiguous, we apply the statute as written. See Slack v. Farmers Ins. Exchange, 5 P.3d 280, 284 (Colo.2000).

Here, the General Assembly enacted the CCIOA in 1991, following the division’s decision in Villa Sierra. Section 38-33.3-302(l)(d) was patterned after the Uniform Common Interest Ownership Act (UCIOA), § 3-102(d) (1982), whose purpose was to make “clear that the association can sue or defend suits even though the suit may involve only units as to which the association itself has no ownership interest.” UCIOA § 3-102 cmt. 3, at 96; see Jerry C.M. Orten et al., The Colorado Common Interest Ownership Act, 21 Colo. Law. 645, 653 (Apr. 1992)(§ 38-33.3-302(l)(d) “follows the national trend acknowledging the representative capacity of the association and ends substantial difficulty on the standing issue in Colorado[,] ... enabling] the association to represent more effectively its owners in such matters as construction defects, avoiding] the necessity of assignment of claims, powers of attorney or class actions in many circumstances, [and] thereby simplifying and making more practical the prompt action in the association’s and owners’ common interests”).

By its terms, the plain language of § 38-33.3-302(l)(d) permits an association to bring an action not only on its own behalf but also on behalf of “two or more unit owners.” The only limitation on an action on behalf of unit owners is that the matter be one “affecting the common interest community.”

Under the CCIOA, individual units are a part of the “common interest community.” See § 38-33.3-103(30), C.R.S.2003 (defining “unit” as “a physical portion of the common interest community which is designated for separate ownership or occupancy and the boundaries of which are described in or determined from the declaration”).

Recognizing the underlying purpose of § 38-33.3-302(l)(d), giving the phrase “common interest community” the meaning ascribed to it by the CCIOA, and realizing that an exception should not be read into a statute that its plain language does not suggest, warrant, or mandate, see Town of Telluride v. Lot Thirty-Four Venture, L.L.C., 3 P.3d 30, 35 (Colo.2000), we conclude that § 38-33.3-302(l)(d) confers standing upon associations to pursue damage claims on behalf of two or more unit owners with respect to matters affecting their individual units. See Sandy Creek Condo. Ass’n v. Stott & Egner, Inc., 267 Ill.App.3d 291, 296, 204 Ill.Dec. 709, 642 N.E.2d 171, 176 (1994)(interpreting similar language; reaching same conclusion); Milton Co. v. Council of Unit Owners, 354 Md. 264, 277-78, 729 A.2d 981, 988-89 (1999)(same); Brickyard Homeowners’ Ass’n Mgmt. Comm. v. Gibbons Realty Co., 668 P.2d 535, 539-40 (Utah 1983) (same).

Consequently, the trial court erred in ruling that the HOA lacked standing to assert damage claims for construction defects to numerous individual townhome units.

II.

The HOA contends that the trial court erred in dismissing its negligence claim based on the economic loss rule. We agree.

We review de novo the trial court’s summary judgment ruling. See Aspen Wilderness Workshop, Inc. v. Colo. Water Conservation Bd., 901 P.2d 1251, 1256 (Colo.1995).

“[The] economic loss rule prevents recovery for negligence when the duty breached is a contractual duty and the harm incurred is the result of failure of the purpose of the contract.” Jardel Enters., Inc. v. Triconsultants, Inc., 770 P.2d 1301, 1303 (Colo. App.1988).

In Town of Alma v. Azco Construction, Inc., 10 P.3d 1256, 1259, 1262 (Colo.2000), the supreme court approved use of the economic loss rule to maintain the boundary between tort and contract law. Tort law, the court pointed out, concerns obligations imposed by law, without regard to any agreement or contract, to protect citizens from the risk of physical harm to their persons or their property. Contract law, in contrast, concerns obligations arising from promises made between parties.

Contract law is intended to enforce the expectancy interests created by the parties’ promises so that they can allocate risks and costs during their bargaining. Limiting tort liability when a contract exists between parties is appropriate because a product’s potential nonperformance can be adequately addressed by rational economic actors bargaining at arms length to shape the terms of the contract.

Town of Alma, supra, 10 P.3d at 1262.

The key to the availability of a tort or contract action lies in the source of the duty that forms the basis of the action:

[W]here we have recognized the existence of a duty independent of any contractual obligations, the economic loss rule has no application and does not bar a plaintiffs tort claim because the claim is based on a recognized independent duty of care and thus does not fall within the scope of the rule.

Town of Alma, supra, 10 P.3d at 1263. Hence, we turn to the question whether subcontractors owe the HOA an independent tort duty.

The existence of a tort duty is a matter of law. “The determination that a duty does or does not exist is ‘an expression of the sum total of those considerations of policy which lead the law to say that the plaintiff is [or is not] entitled to protection.’ ” Cary v. United of Omaha Life Ins. Co., 68 P.3d 462, 466 (Colo.2003)(quoting W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 53, at 539 (5th ed.1984)).

In Cosmopolitan Homes, Inc. v. Weller, 663 P.2d 1041, 1042-43 (Colo.1983), the supreme court held that, independent of any contractual duty, builder-vendors also have a general duty imposed by law to act without negligence in the construction of homes. See also Cary v. United of Omaha Life Ins. Co., supra, 68 P.3d at 466 n. 7 (noting that Cosmopolitan Homes “determined that a home-builder owed a duty of care to a subsequent purchaser even though there was no privity of contract between the builder and the purchaser”).

In Town of Alma, the supreme court held that its Cosmopolitan Homes decision was not in conflict with the economic loss rule, because the negligence claims in Cosmopolitan Homes arose from a duty independent of any duty imposed by contract. See Town of Alma, supra, 10 P.3d at 1265-66 (characterizing Cosmopolitan Homes as allowing subsequent purchasers to sue in negligence for latent defects because of a builder’s independent duty to act without negligence in the construction of a home).

Significantly, in Town of Alma, supra, 10 P.3d at 1262, the supreme court also cited Consolidated Hardwoods, Inc. v. Alexander Concrete Construction, Inc., 811 P.2d 440, 443 (Colo.App.1991), as “allowing [a] homeowner’s negligence claim against [a] subcontractor because [an] independent duty was breached.” While the independent duty in Consolidated Hardwoods arose as a result of work done in excess of that required by contract, Colorado, along with other jurisdictions, has also recognized a more general right of a purchaser of a home to recover property damages caused by the negligence of a subcontractor. See Driscoll v. Columbia Realty-Woodland Park Co., 41 Colo.App. 453, 455, 590 P.2d 73, 74 (1978); Juliano v. Gaston, 187 N.J.Super. 491, 496, 455 A.2d 523, 525 (1982).

We read the supreme court’s decision in Cosmopolitan Homes as strongly endorsing a policy favoring quality construction of homes. Subcontractors play an important part in the construction of homes; they are aware that their work is, ultimately, for the benefit of homeowners and that harm to homeowners from negligent construction is foreseeable. To discourage misconduct and provide an incentive for avoiding preventable harm, we conclude that subcontractors owe homeowners a duty of care, independent of any contract provision, in connection with the construction of homes. Cf. Lembke Plumbing & Heating v. Hayutin, 148 Colo. 334, 337, 366 P.2d 673, 675 (1961)(finding plumber had a generic common law duty to exercise due care, caution, and skill, apart from any contractual duty, when the rights of others may be adversely affected).

Nevertheless, subcontractors assert that, under Town of Alma, supra, 10 P.3d at 1264 n. 12, the economic loss rule bars the HOA’s lawsuit because it and the unit owners were thirdparty beneficiaries of the agreements between the subcontractors and the general contractor. We are not persuaded.

Assuming that the HOA and unit owners were third-party beneficiaries, they would be bound by any limitations contained in or arising from those agreements, if they attempted to enforce them. See Parker v. Ctr. for Creative Leadership, 15 P.3d 297, 298-99 (Colo.App.2000)(third-party beneficiary must accept contract’s burdens along with its benefits). However, where, as here, purported third-party beneficiaries do not invoke the benefits of a contract, the contract may not be enforced against them. See Harper v. Del. Valley Broadcasters, Inc., 743 F.Supp. 1076, 1084 (D.Del.1990)(rejeeting argument which “utterly fail[s] to distinguish between contractually creating rights in or conferring benefits on a third person and imposing obligations on a person not party to the contract”), aff'd, 932 F.2d 959 (3d Cir.1991).

Any other conclusion undercuts the very rationale for the economic loss rule, that is, of rational economic actors bargaining at arm’s length to allocate by contract their respective rights and liabilities, in lieu of tort duties imposed by law. Town of Alma, supra, 10 P.3d at 1262. In contrast here, neither the unit owners nor the HOA had the opportunity to bargain with the subcontractors.

We acknowledge that courts in some jurisdictions have applied the economic loss rule to bar homeowner lawsuits against subcontractors. See Aas v. Superior Court, 24 Cal.4th 627, 639, 101 Cal.Rptr.2d 718, 12 P.3d 1125, 1133 (2000)(superseded by statute as stated in Rosen v. State Farm Gen. Ins. Co., 30 Cal.4th 1070, 135 Cal.Rptr.2d 361, 70 P.3d 351 (2003)); Casa Clara Condo. Ass’n v. Charley Toppino & Sons, Inc., 620 So.2d 1244, 1248 (Fla.1993); Calloway v. City of Reno, 116 Nev. 250, 253-54, 993 P.2d 1259, 1261 (2000).

However, these jurisdictions also applied, or intimated that they would apply, the economic loss rule to bar homeowner lawsuits against builder-vendors. See Aas v. Superior Court, supra, 24 Cal.4th at 643, 101 Cal. Rptr.2d 718, 12 P.3d at 1136; Calloway v. City of Reno, supra, 116 Nev. at 261, 993 P.2d at 1266; see also Casa Clara Condo. Ass’n v. Charley Toppino & Sons, Inc., supra, 620 So.2d at 1247.

Because the supreme court has indicated, in its treatment of Cosmopolitan Homes in its Town of Alma decision, that the economic loss rule would not be similarly applied in Colorado, we find these out-of-state authorities unpersuasive.

Consequently, the trial court erred in dismissing the negligence claims against the subcontractors on the basis of the economic loss rule.

The judgment is reversed, and the case is remanded for further proceedings.

Judge MARQUEZ and Judge ROY concur.


author: Judge KAPELKE.

text:
    ROCKY MOUNTAIN CARDIOLOGY and State Farm Insurance Companies, Petitioners, v. INDUSTRIAL CLAIM APPEALS OFFICE OF the STATE of Colorado and Barbara Armbruster, Respondents.
    No. 03CA0437.
    Colorado Court of Appeals, Div. III.
    Feb. 12, 2004.
    Rehearing Denied June 24, 2004.

      Clifton, Hook & Bovarnick, P.C., Clyde E. Hook, Gary L. Fleming, Harvey D. Flewell-ing, Denver, Colorado, for Petitioners.
    Ken Salazar, Attorney General, Erie Ro-thaus, Assistant Attorney General, Denver, Colorado, for Respondent Industrial Claim Appeals Office.
    Elliott Law Offices, PC, Mark D. Elliott, Arvada, Colorado, for Respondent Barbara Armbruster.
   Opinion by

Judge KAPELKE.

Rocky Mountain Cardiology and its insurer, State Farm Insurance Companies (collectively employer), seek review of a final order of the Industrial Claim Appeals Office (Panel) awarding temporary disability benefits to Barbara Armbruster (claimant). We affirm.

Claimant injured her left arm in 1999. In June 2001, employer filed a general admission of liability for the payment of temporary disability benefits commencing December 30, 1999. Temporary partial disability benefits were also stipulated to in June 2001.

Effective August 1, 2001, employer suspended benefits based on claimant’s failure to attend a rescheduled medical appointment. It is undisputed that claimant attended a rescheduled appointment on August 31, 2001, and the administrative law judge (ALJ) found, with record support, that by September 20, 2001, employer had knowledge that she had done so. Employer did not reinstate temporary disability benefits, however, and did not file an amended or final admission of liability.

Instead, employer filed a motion to stay in December 2001, seeking to bar reinstatement of temporary disability benefits pending completion of the independent medical examination (IME) process and adjudication of the issues. In response, claimant argued that her benefits had to be reinstated because she had attended the rescheduled appointment. Employer’s request for stay was denied.

In January 2002, employer filed an application for hearing on claimant’s entitlement to temporary disability benefits after various dates.

In April 2002, employer also sought to withdraw the previously filed admissions of liability, disputing that claimant suffered a work-related injury other than to her left arm and challenging the IME physician’s opinion to the contrary.

After several hearings in June and July 2002, the ALJ determined that claimant failed to prove that she had suffered compen-sable injuries. In his order of August 14, 2002, the ALJ granted employer’s request to withdraw its admission of liability and denied claimant’s request for additional disability and medical benefits. The ALJ determined that employer had no duty to reinstate temporary disability benefits once they had been properly suspended and, on that basis, concluded that employer had not violated the Workers’ Compensation Act.

On review, the Panel concluded that employer properly suspended benefits after claimant failed to attend the medical appointment. However, based on the plain language of § 8 — 42—105(2)(c), C.R.S.2003, the Panel determined that employer was required to reinstate disability benefits after August 31, 2001, and to pay such benefits until the ALJ entered his order in August 2002. The Panel therefore further concluded that claimant’s receipt of the disputed benefits did not constitute an overpayment. Finally, the Panel set aside the ALJ’s ruling that penalties were not warranted and remanded that issue for a determination of the amount of such penalties to be imposed.

I.

Employer contends that the Panel erred in ordering the reinstatement of temporary disability payments based on the general admission of August 2001. We disagree.

An employer must provide notice that liability is admitted or contested within twenty days of the date it has knowledge of an injury that disables a claimant for more than three days or results in permanent impairment or death. Section 8^t3-203(l)(a), C.R.S.2003. By filing an admission, an employer has, in effect, admitted that the claimant has sustained the burden of proving entitlement to temporary disability benefits. Once an employer admits liability, it is bound by that admission and must pay benefits accordingly. Colo. Comp. Ins. Auth. v. Indus. Claim Appeals Office, 18 P.3d 790 (Colo. App.2000).

The relevant portion of § 8-42-105(2)(c), C.R.S.2003, provides that “[i]f the employee fails to appear at a rescheduled appointment, the insurer or self-insured employer may, without a prior hearing, suspend payment of temporary disability benefits to the employee until the employee appears at a subsequent rescheduled appointment ” (emphasis added).

In construing a statute, a reviewing court must determine and give effect to the intent of the legislature by giving the language of the statute its plain and ordinary meaning. The Panel’s interpretation will be set aside only if it is inconsistent with the clear language of the statute or with the legislative intent. Magnetic Eng’g, Inc. v. Indus. Claim Appeals Office, 5 P.3d 385 (Colo.App.2000).

We agree with the Panel here that the emphasized plain language of § 8-42-105(2)(c) provides for the automatic reinstatement of disability benefits once the employee appears at a rescheduled appointment. This construction is consistent with the use of the word “suspended” in other workers’ compensation statutes. See Magnetic Eng’g, Inc. v. Indus. Claim Appeals Office, supra (construing the term in statute requiring employee to submit to medical or vocational examination upon employer’s written request).

Here, employer filed a general admission of liability in June 2001 and suspended benefits beginning August 1, 2001, based on claimant’s failure to attend a rescheduled medical appointment. As noted, however, it is undisputed that employer knew by September 20, 2001, that claimant had attended a rescheduled appointment. It is also undisputed that employer did not file an amended admission to terminate temporary disability benefits on the basis that it contested causation or that claimant had reached maximum medical improvement.

Thus, employer remained bound by the June 2001 admission to pay temporary disability benefits and was no longer entitled to withhold payment once claimant kept the subsequent rescheduled appointment. As discussed, employer did not seek to withdraw its admission until April 2002.

II.

Employer also asserts that the Panel lacked jurisdiction to order it to pay additional temporary disability benefits. We disagree.

An employer is required to continue paying pursuant to an admission of liability and may not unilaterally withhold payment until a hearing is held to determine whether there is sufficient evidence to permit withdrawal of the admission. Pacesetter Corp. v. Collett, 33 P.3d 1230 (Colo.App.2001); Arenas v. Indus. Claim Appeals Office, 8 P.3d 558 (Colo.App.2000); see Snyder v. Indus. Claim Appeals Office, 942 P.2d 1337 (Colo. App.1997)(if claimant objects to petition to suspend, modify, or terminate, payments must continue until' hearing despite later evidence of lack of causation).

Furthermore, withdrawal of an admission is granted prospectively, except in limited situations where the claimant is shown to be at fault. See, e.g., Snyder v. Indus. Claim Appeals Office, supra. Compare HLJ Mgmt. Group, Inc. v. Kim, 804 P.2d 250 (Colo.App.1990), with Vargo v. Colo. Indus. Comm’n, 626 P.2d 1164 (Colo.App.1981)(retroactive relief granted where claimant made fraudulent misstatements regarding specific injury for which benefits were claimed), and Arenas v. Indus. Claim Appeals Office, supra (retroactive relief granted to impose fifty percent penalty for intoxication).

Thus, the Panel had jurisdiction to require payment of disability benefits consistent with the June 2001 admission until the ALJ determined in August 2002 that claimant’s injuries were not caused by her employment. Additionally, absent a showing of fraud or other employee misconduct, relief could be granted only prospectively. See HLJ Mgmt. Group, Inc. v. Kim, supra. Indeed, the record here shows that employer sought relief only as of the date of hearing and did not seek retroactive relief.

Finally, we reject the argument that the August 2001 general admission was sufficient to preserve employer’s objection based on lack of causation. That admission was based solely on claimant’s failure to attend the rescheduled medical appointment. In addition, employer’s later filing of a motion to stay the obligation to pay temporary disability benefits belies this argument.

III.

We also reject employer’s contention that equitable principles dictate that claimant is not entitled to any award of workers’ compensation benefits or penalties. See Johnson v. Indus. Comm’n, 761 P.2d 1140 (Colo.1988)(equitable doctrine of estoppel cannot be used to circumscribe right afforded by workers’ compensation statute); cf. Indus. Comm’n v. Plains Util. Co., 127 Colo. 506, 259 P.2d 282 (1953)(powers and authority of the ALJ and Panel are expressly conferred by statute); Indus. Comm’n v. Carpenter, 102 Colo. 22, 76 P.2d 418 (1938)(workers’ compensation proceeding is purely statutory).

IV.

Finally, employer contends that the Panel erred in determining that the benefits it paid did not constitute an overpayment. We are not persuaded.

Employer has the burden of proving its entitlement to recoup an overpayment. See City & County of Denver v. Indus. Claim Appeals Office, 58 P.3d 1162 (Colo. App.2002).

Here, inasmuch as temporary disability benefits were owing as a matter of law until the ALJ’s order granted prospective relief, we agree with the Panel that the disputed payments did not constitute “overpayment” under the Workers’ Compensation Act. See § 8-40-201(15.5), C.R.S.2003.

The order is affirmed.

Judge ROY and Judge CARPARELLI concur.