author: Justice HOBBS Justice COATS,

text:
    Thomas A. CARY and Beth Hanna, individually and on behalf of his minor daughter, Dena Cary, Petitioners, v. UNITED OF OMAHA LIFE INSURANCE COMPANY and Mutual of Omaha of Colorado, Inc., d/b/a Antero Health Plans, Respondents.
    Nos. 01SC708, 01SC834.
    Supreme Court of Colorado, En Banc.
    April 21, 2003.
    As Modified on Denial of Rehearing May 19, 2003.

      Wilcox & Ogden, P.C., Ralph Ogden, Denver, Colorado, Attorneys for Petitioners.
    Kutak Rock LLP, Gerard V. Reardon, Melvin B. Sabey, Denver, Colorado, Attorneys for Respondent United of Omaha Life Insurance Company.
    Kennedy & Christopher P.C., John R. Mann, Christopher K. Miller, Denver, Colorado, Attorneys for Respondent Mutual of Omaha of Colorado, Inc., d/b/a Antero Health Plans.
   Justice HOBBS

delivered the Opinion of the Court.

We granted certiorari in this case to review the court of appeals' decision in Cary v. United of Omaha Life Ins. Co., 43 P.3d 655 (Colo.App.2001). The court of appeals upheld the trial court's ruling on summary judgment. The court of appeals held that third-party insurance administrators hired by a city to run its health insurance program did not owe a duty of good faith and fair dealing to a claimant in the investigation and processing of an insurance claim, because there was no contractual relationship between the administrators and the insurance claimant. Id. at 658.

We disagree with the court of appeals' strict application of a privity of contract analysis to this case. Here, the insurance administrators had primary control over benefit determinations, assumed some of the insurance risk of loss, undertook many of the obligations and risks of an insurer, and had the power, motive, and opportunity to act unserupulously in the investigation and servicing of the insurance claims. Under such cireumstances, we hold that a special relationship existed between the administrators and the insured sufficient to establish in the administrator a duty to act in good faith. In order for Cary to recover for a breach of that duty in tort on remand of this case, he must establish the facts and prove his case that the administrators' conduct was unreasonable and the administrators knew either that their conduct was unreasonable or acted in reckless disregard of whether their conduct was unreasonable.

Accordingly, we reverse the judgment of the court of appeals and reinstate claimant's tort cause of action against the administrators for breach of their duty to act in good faith when investigating and servicing the insurance claims.

We turn first to the evidence the parties put forth, as of the time the trial court entered summary judgment against Cary. For the purpose of reviewing the propriety of the court's summary judgment order, we must resolve all doubts in favor of Cary, the non-moving party. See Smith v. Boyett, 908 P.2d 508, 514 (Colo.1995). In addition, Cary is entitled to all favorable inferences that may be drawn from the facts. Id.

I.

The City of Arvada offered its employees, like Thomas Cary, access to its self-funded health insurance program overseen by the Arvada Medical and Disability Program Trust Fund (Trust), but administered by United of Omaha and Mutual of Omaha of Colorado (Administrators).

Due to its limited resources, the Trust did not administer the Plan itself. A five-member volunteer board of trustees staffed the trust. It had no support staff, and none of its members had any experience or expertise in handling insurance claims or making coverage decisions. The board therefore did not investigate claims or involve itself in claims handling or processing (other than hearing final appeals). It met only quarterly to consider claims appeals, review contracts with third-party administrators such as United and Omaha, approve contracts for the provision of certain mental health services, and consider funding issues.

By contrast, United, whom the Trust hired to administer the Plan, exercised near-complete control over the administration of the Plan. United's contract with the Trust obligated it to: provide claim handling facilities; furnish claim handling personnel; establish claim handling procedures, including claim files and systems; verify claimant eligibility for the Plan; receive all claim forms and related materials from Plan members; process submitted claims; send "explanation of benefits" letters to claimants when it acts on a claim; prepare claim payments; provide actuarial services to the Trust to project estimated Plan benefit costs; provide underwriting services whereby it analyzes Plan benefits and makes recommendations to the Trust about modifying the benefits; print and pay the cost of all Plan claim forms and benefit checks; develop and print Plan benefit booklets and identification cards; evaluate the health histories of "late" applicants and determine whether they should have Plan coverage; provide a toll-free number for Plan claimants; and periodically audit the claims processing system to determine the quality of claim administration. United even established an appellate procedure for denials of coverage (though the Trust was the entity of last resort for appeals).

At the same time United agreed to administer the Plan, it entered into a reinsurance agreement with the Trust. Pursuant to this agreement, United agreed to reimburse the Trust for payments in excess of $75,000, but less than $1 million, for any one Arvada employee. It also agreed to reimburse the Trust for aggregate claims in excess of a certain dollar amount.

The claims dispute in this case began when Thomas Cary and Beth Hanna's (Cary's) fifteen-year-old daughter, a beneficiary of the Plan, shot herself in an unsuccessful suicide attempt. Her injuries required extensive treatment, hospitalization, and multiple surgeries. Cary applied for benefits from the Plan but the Administrators denied his claim, citing the Plan's exclusion of self-inflicted injuries as justification.

Cary responded to the denial by suing the City, the Trust, and the Administrators, seeking a declaration that the Plan covered his daughter's injuries, as well as damages for breach of his insurance contract and bad faith failure to provide insurance benefits. The trial court granted partial summary judgment for Cary, finding that the self-inflicted injury exelusion of the contract is ambiguous and resolving the ambiguity in favor of coverage. However, the trial court on summary judgment also dismissed Cary's claims against the Administrators for bad faith failure to provide insurance benefits, because Cary was not in contractual privity with the Administrators and no statute or regulation imposed an obligation to act in good faith on the Administrators in favor of Cary or his daughter.

Following the trial court's rulings, Cary settled with the City and the Trust for $800,000, and neither of those entities is involved with this appeal. Cary appealed the dismissal of his bad faith claim. The court of appeals affirmed the district court's judgment, holding that City's independent claims administrators owe no duty of good faith and fair dealing to parties, like Cary, who are not in contractual privity with the claims administrators.

IL.

We disagree with the court of appeals' strict application of a privity of contract analysis to this case. Here, the insurance administrators had primary control over benefit determinations, assumed some of the insurance risk of loss, undertook many of the obligations and risks of an insurer, and had the power, motive, and opportunity to act unserupulously in the investigation and servicing of the insurance claims. Under such cireumstances, we hold that a special relationship existed between the Administrators and the insured sufficient to establish in the Administrators a duty to act in good faith. In order for Cary to recover for a breach of that duty in tort on remand of this case, he must establish the facts and prove that the Administrators' conduct was unreasonable and the Administrators either knew their conduct was unreasonable or acted in reckless disregard of whether their conduct was unreasonable.

A.

Standard of Review

The trial court and court of appeals held that a third-party insurance claims administrator does not have a duty of good faith and fair dealing in the investigation and processing of the insured's claim, unless there is a contractual relationship between the insured and the administrator.

The existence and seope of a tort duty is a matter of law. E.g. HealthONE wv. Rodriguez, 50 P.3d 879, 888 (Colo.2002). Whether defendant owes a duty to plaintiff under tort law involves a number of factors. No single factor controls; "the question of whether a duty should be imposed in a particular case is essentially one of fairness under contemporary standards-whether reasonable people would recognize a duty and agree that it exists." Id. (quoting Greenberg v. Perkins, 845 P.2d 530, 536 (Colo.1993)). 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." W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 53, at 359 (5th ed.1984). We review, de novo, lower court determinations that a duty does or does not exist. E.g. Ryder v. Mitchell, 54 P.3d 885, 889 (Colo.2002)(reviewing, de novo, the question of whether the defendant owes a duty to the plaintiff).

The trial court granted summary judgment against Cary. But, summary judgment is appropriate only if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. HealthONE, 50 P.3d at 887. The non-moving party is entitled to the benefit of all favorable inferences that may be reasonably drawn from the undisputed facts, and all doubts must be resolved against the moving party. Id. A court must consider "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any," in determining whether to grant a motion for summary judgment. Id. (quoting C.R.C.P. 56(c)).

Summary judgment is a drastic remedy, to be granted only when there is a clear showing that the applicable standards have been met. Id. at 887-88. We review a grant of summary judgment de novo. Id. at 888. Here, Cary was entitled to proceed on his bad faith tort claim.

We turn our discussion first to the court of appeals' strict application of a privity of contract analysis to this case. We then proceed to the special relationship that existed between the third-party Administrators and Cary.

B.

Exceptions to Privity Requirement

Every contract in Colorado contains an implied duty of good faith and fair dealing. Transamerica Premier Ins. Co. v. Brighton School Dist. 27J, 940 P.2d 348, 351 (Colo.1997); Amoco Oil Co. v. Ervin, 908 P.2d 493, 498 (Colo.1995) (citing § 4-1-2083, 2 C.R.S. (1992)). In typical commercial contracts, a breach of the duty merely results in damages for breach of contract, not independent tort liability. Wheeler v. Reese, 835 P.2d 572, 578 (Colo.App.1992).

But, insurance contracts are not ordinary commercial contracts. Every insurer owes its insured a non-delegable duty of good faith and fair dealing. Because of the "special nature of the insurance contract and the relationship which exists between the insurer and the insured," an insurer's breach of this duty gives rise to a separate cause of action sounding in tort. Farmers Group, Inc. v. Trimble, 691 P.2d 1138, 1141 (Colo.1984). The duty is non-delegable so that insurers cannot escape their duty of good faith and fair dealing by delegating tasks to third parties. Courts have a "heightened responsibility" to scrutinize insurance contracts and invalidate provisions that violate public policy or principles of fairness. Huizar v. Allstate Ins. Co., 952 P.2d 342, 344 (Colo.1998).

In the typical insurance case, only the insurer owes the duty of good faith to its insured; agents of the insurance company-even agents involved in claims processing-do not owe a duty, since they do not have the requisite special relationship with the insured. See, e.g., Martinez v. Lewis, 969 P.2d 213, 214 (Colo.1998)(declining to impose a duty of good faith on physicians performing independent medical examinations as part of the claims adjustment process); Gorab v. Equity General Agents, 661 P.2d 1196, 1198 (Colo.App.1983) (rejecting an attempt to hold an insurance agent liable for breach of the duty of good faith by an insurance company).

In the typical case, the insured is adequately protected by the non-delegable duty the law imposes on the insurer. However, the existence of this non-delegable duty does not mean that a third-party claims administrator never has an independent duty to investigate and process the insured's claim in good faith. When the actions of a defendant are similar enough to those typically performed by an insurance company in claim administration and disposition, we have found the existence of a special relationship sufficient for imposition of a duty of good faith and tort liability for its breach-even when there is no contractual privity between the defendant and the plaintiff.

We first recognized an exception to the privity requirement in Travelers Ins. Co. v. Savio, 706 P.2d 1258 (Colo.1985), where we held that the provider of workers' compensation insurance owes a duty of good faith and fair dealing to an insured employer's employee. Id. at 1272. Although that case relies in part on the Workers' Compensation Act, section 840-101, 3 C.R.S. (2002) et seq., which makes every worker a third-party beneficiary of his employer's workers' compensation insurance, our decision placed heavy reliance on two other aspects of the case.

First, we relied on the "special nature" of the relationship that exists between an insured and his insurer, holding that this relationship also exists between the insurer and a beneficiary of quasi-insurance benefits:

The basis for liability in tort for the breach of an insurer's implied duty of good faith and fair dealing is grounded upon the special nature of the insurance contract and the relationship which exists between the insurer and the insured. The motivation of the insured when entering into an insurance contract differs from that of parties entering into an ordinary commercial contract. By obtaining insurance, an insured seeks to obtain some measure of financial security and protection against calamity, rather than to secure commercial advantage.

Id. at 1272. Since this statement is true of workers' compensation insurance, we held that the provider of workers' compensation insurance has a duty to deal fairly and in good faith with an injured employee. Id. at 12783.

Second, we relied on the fact that a workers' compensation provider, like an insurer in contractual privity with an insured, has a financial incentive to use its leverage to limit claims:

[OJnee a calamity has befallen an employee covered by workers compensation or an insured covered under a private insurance contract, the injured party is particularly vulnerable because of the injury or loss.... Insurers, backed by sufficient financial resources, are encouraged to delay payment of claims to their insureds with an eye toward settling for a lesser amount than due under the policy. The inequity of this situation becomes particularly apparent in the area of disability insurance in which the insured, often pursued by creditors and devoid of bargaining power, may easily be persuaded to settle for an amount substantially lower than that provided for in the insurance contract.

Id. at 1278 (internal quotations and citations omitted).

We extended Savio in Scott Wetzel Servs. Inc. v. Johnson, 821 P.2d 804 (Colo.1991), where we held that an independent claims adjusting company acting on behalf of a self-insured employer owes a duty of good faith and fair dealing to injured employees when it investigates and processes their claims. Id. at 808. Like Savio, Wetzel is based in part on the Workers' Compensation Act. However, Wetzel makes clear that our departure from the privity requirement is also premised on the fact that the adjuster "effectively delivered the workers' compensation benefits and took many of the steps necessary to perform the employer's duty of good faith and fair dealing owed to the claimants." Id. at 812.

It is the statutory and regulatory structure and the adjuster's participation in the investigation and processing of claims that give rise to the duty and not the contract between the employer and claims adjusting service, or the law of principal and agent.

Id. at 812 n. 10 (emphasis added).

We also held that the privity requirement was inapplicable in the domain of surety contracts in Transamerica, 940 P.2d at 348. In Transamerica, we recognized a cause of action in tort for a commercial surety's breach of its duty to act in good faith. Two factors led us to this conclusion. First, we noted that though there are differences in form between an insurance contract and a suretyship agreement, the substance of the two types of obligations are the same. Id. at 353. As in an insurance contract, the purpose of a suretyship agreement is not to obtain a commercial advantage, but to shield the beneficiary of the agreement from potentially catastrophic logses in the event that the principal defaults. Id. at 352. As a result, unless the surety handles claims in good faith, the "core purpose" of the suretyship agreement is defeated. Id. at 358.

Second, we noted that when the time comes to enforce a suretyship agreement, there is a disparity in bargaining power between the surety and the beneficiary. Absent the prospect of damages for bad faith breach, the surety has no incentive to pay in good faith:

Contract damages "offer no motivation whatsoever for the insurer not to breach. If the only damages an insurer will have to pay upon a judgment of breach are the amounts that it would have owed under the policy plus interest, it has every interest in retaining the money, earning the higher rates of interest on the outside market, and hoping eventually to force the insured into a settlement for less than the policy amount."

Id. (quoting Dodge v. Fidelity & Deposit Co., 161 Ariz, 344, 778 P.2d 1240, 1242-43 (1989))(emphasis in Dodge).

C.

Special Relationship in This Case

A sufficient special relationship existed between the Administrators and Cary to impose a duty of good faith and fair dealing on the Administrators, in light of their central role in claims administration and their financial liability for claims.

Confronted with a situation that is nearly identical to that before us, the Tenth Cireuit imposed a duty of good faith and fair dealing on a third-party insurance administrator. Wolf v. Prudential Ins. Co., 50 F.3d 793, 798 (10th Cir.1995). The defendant administrator in Wolf is much like the Administrators in the instant case: the administrator had primary control over benefit determinations (including some intermediate benefit appeals) and provided excess lability insurance to the sponsor of the self-funded insurance plan. Id. at 797-98.

Given these facts, the Tenth Circuit declined to apply the privity requirement. Rather, it focused "on the factual question of whether the administrator acts like an insurer such that there is a 'special relationship' between the administrator and the insured that could give rise to a duty of good faith." Id. at 797. In light of the facts that the defendant administrator performed nearly all of the functions of an insurance company and bore the risk of losses by the insureds, the court held that the administrator had a duty of good faith and fair dealing: "[OIn the facts presented by plaintiffs, Prudential had the power, motive, and opportunity to act unscrupulously. We believe that the Oklahoma Supreme Court would impose & duty on an entity in Prudential's position for the same reasons it imposed the duty on 'true' insurers." Id. at 798.

The Tenth Circuit's Wolf holding accords with our precedent. In the case before us, the Administrators fulfilled virtually all of the functions normally performed by an insurance company in processing claims and determining whether to deliver insurance benefits. The Trust's only involvement in the operation of the Plan was funding the claims account and hearing final appeals when the Administrators denied benefits. As in other cases where we found an exception to the privity requirement, the Administrators had a significant financial incentive to delay payment of benefits or coerce Cary into a diminished settlement. Cary settled his insurance claim with the City and the Trust for $800,000 after the trial court determined that Cary's medical expenses are covered by the policy. United's reinsurance contract with the City obligates it to reimburse the City for payments in excess of $75,000, but less than $1 million, for any one Arvada employee. In such cireumstances, United had a powerful financial incentive to deny or limit claims.

Colorado's statutory policy, stated in seetion 10-1-101, 8 C.R.S. (2002), is that all persons providing insurance services to the public must "be at all times actuated by good faith in everything pertaining thereto." Ballow v. PHICO Ins. Co., 875 P.2d 1354, 1363 (Colo.1993)(quoting § 10-1-101, 4A C.R.S. (1987)). The application of a strict privity of contract requirement to the case before us would allow agents like the Administrators to act with impunity in the service of their own self-interest, in disregard of this underlying statutory policy and common law principles upon which the special relationship exception to the privity requirement exists.

When a third-party administrator performs many of the tasks of an insurance company and bears some of the financial risk of loss for the claim, the administrator has a duty of good faith and fair dealing to the insured in the investigation and servicing of the insurance claim.

D.

Standard for Assessing Bad Faith Tort Claim

In "first party" bad faith insurance cases-cases in which an insured sues his insurance company directly-the plaintiff must prove that the conduct of the insurer was unreasonable, and that the insurer either knew that its conduct was unreasonable or acted in reckless disregard of whether it was unreasonable. E.g. Transamerica, 940 P.2d at 353-54; Wetzel, 821 P.2d at 810; Savio, 706 P.2d at 1276. The same standard applies to this bad faith case. On remand, Cary must establish the facts and prove that the Administrators' conduct was unreasonable and the Administrators either knew that their conduct was unreasonable or acted in reckless disregard of whether their conduct was unreasonable.

IIL

Accordingly, we reverse the judgment of the court of appeals and reinstate Cary's tort cause of action against the Administrators for breach of their duty to act in good faith when investigating and servicing the insurance claims. We. remand this -case to the court of appeals for consideration of any other issues remaining on appeal, and further proceedings consistent with this opinion.

Justice COATS dissents and Justice KOURLIS joins in the dissent.

Justice COATS,

dissenting.

Today the majority announces a new civil duty (giving rise to a tort claim for damages) that is neither implied in contract, mandated by statute, nor recognized at common law. In what I consider to be a misconstruction of our prior holdings, the majority finds that certain claims adjusters owe a duty directly to insured parties, despite the absence of any existing contractual or other legal relationship between them, based solely on the amount of influence the adjusters actually exercise over the ultimate decision to allow or not allow coverage. It does so to protect the insured party by providing a disincentive for wrongful behavior by agents of the insurer, but also by providing an alternate source of recovery. |

'While its goal may be laudable, I do not believe the majority's conclusion arises out of a legal theory. Social policy is clearly an important consideration in the interpretation and development of the law, but it cannot be the primary basis for judicial resolution of individual cases and controversies. Because I believe that such policy-driven holdings create unworkable rules of law and generally undermine confidence in the judicial process, I would leave public policy initiatives of this kind to the General Assembly. I therefore respectfully dissent.

Initially, it must be understood that the liability created by the majority today is separate and distinct from liability for insurance coverage under the terms of a contract. It is of course the insurer who is contractually liable to provide coverage under the terms of an insurance contract. Along with about half the other jurisdictions in this country, Colorado has also allowed that an insurer may be separately liable in tort for damages it causes by wrongfully denying insurance coverage. Without disputing the district court's judgment that Cary is not a third-party beneficiary of the contract between the City and United, however, and without suggesting that the legal relationship between the City and United is a sham or that United is actually liable to Cary for coverage on his contract with the City, the majority holds that certain agents of an insurer, depending upon their contractual agreements with the insurer and their actual participation in the claims process, may also be directly liable to a policyholder for damages caused by the insurer's denial of coverage.

The majority suggests that it does no more than apply existing "exceptions to the privity requirement" of a claim for bad faith breach of contract, and it likens its approach to other instances in which we have found a duty of care in the absence of a contractual relationship. See maj. op. at 466-467 & n. 7. In my view, this characterization not only misconstrues our prior holdings but highlights a fundamental difference in our understanding of the theoretical underpinnings of the tort of bad faith breach. While a tort by its very nature is an injury or wrong that is independent of contract, the tort of bad faith breach is unusual in that it recognizes liability for the wrongful breach of a duty to comply with the terms of an insurance contract. Unlike other duties of care that are independent of contractual relationships, the duty created by the majority in this case subjects non-contracting parties to liability for the denial of insurance coverage under the terms of a contract.

We have held that all contracts contain an implied duty of good faith and fair dealing, see Transamerica Premier Ins. Co. v. Brighton School Dist. 27J, 940 P.2d 348 (Colo.1997), but even a wrongful breach does not always give rise to a claim for damages in tort. It is only the "special nature of the insurance contract and the relationship which exists between the insurer and the insured" that can give rise to tort liability for a wrongful breach. Farmers Group Inc. v. Trimble, 691 P.2d 1138, 1141 (Colo.1984). We have also recognized that insurance-like relationships can be created and corresponding duties imposed by statute rather than con-

tract, similarly giving rise to an action in tort for wrongful breach of those duties. Whether the special duty is implied by a contractual relationship or imposed by statute, however, a breaching party can be liable only for damages suffered by someone to whom it owes a duty.

Our holdings that are characterized by the majority as "exceptions" to the privity requirement of a bad faith breach of contract claim are, to my mind, not exceptions at all. Some of the examples cited by the majority do not alter the privity requirement in any way, while the others do not even involve a bad faith breach of contract. In Trans-america, for instance, the contractual relationship of the parties was never in doubt. The issue before the court concerned only the question whether the duty owed by a surety to its beneficiary is sufficiently like that of an insurer to its insured to implicate similar consequences for a breach. Trans-america, 940 P.2d at 349. Largely because the legislature chose to classify a suretyship agreement as an insurance contract, we held that a wrongful breach of the surety's similar contractual duty to its beneficiary should also give rise to an action in tort for bad faith breach of the contract. Id. at 358-54.

By contrast, neither Travelers Ins. Co. v. Savio, 406 P.2d 1258 (Colo.1985), nor Scott Wetzel Servs., Inc. v. Johnson, 821 P.2d 804 (Colo.1991), was based on the breach of a contract. In Savio, we found that because the statutory workers' compensation regulatory scheme had much in common with insurance and because the statutory scheme created a duty, the wrongful breach of that duty should give rise to an action in tort just like the wrongful breach of the contractual duty owed by an insurer to its insured. Savio, 706 P.2d 1258. In Wetzel, we made even more clear that the duty giving rise to a tort claim was created by statute, by finding a legislative intent to impose the duty to injured workers not only on employers and their workers' compensation carriers but even on independent claims adjusters. Wet-gel, 821 P.2d at 811. To be sure, the nature of the functions actually performed by workers' compensation claims adjusters was an important factor in determining that their involvement was contemplated by the regulatory scheme and therefore that they fell within the class upon which the statute imposed a duty of fair dealing in processing workers' compensation claims. We did not, however, even remotely suggest that mere involvement in the processing of insurance claims creates a legal relationship that includes a special duty of good faith and fair dealing to insured parties.

By deriving a duty to an insured person from the adjuster's separate relationship with the insurer and actual participation in the claims process, the majority, in my opinion, confounds the existence of a legal duty with the questions of causation and culpability; contravenes well-accepted ageney principles; and imposes liability without advance notice or consistent application of the law.

First, despite acknowledging that a "special relationship" is essential, the majority actually eliminates the need for any legal relationship between the claims adjuster and insured, premising its new duty instead on "the power, motive, and opportunity to act unserupulously in the investigation and servicing of the insurance claims." Maj. op. at 463-464. Motive and opportunity to see that coverage is denied may be relevant to the question whether United acted in good faith, but they clearly do not imply a duty to deal in any particular way with someone whom it does not insure. The significant question is not whether United owes a duty of good faith and fair dealing to someone, but to whom it owes such a duty. Similarly, the significance of United's involvement in processing claims for the City is not that it is acting like an insurer but rather that it is acting for an insurer. To the extent that it insures the City with a stop-loss or reinsurance policy, it has a "semi-fiduciary" relationship with the City, its insured, and owes the City a special duty that potentially conflicts with a similar duty to the City's insured.

Second, by creating a legal relationship that is neither implied by the agreement of the parties nor mandated by statute, the majority resolves this pending controversy by creating duties and liabilities that never before existed, in this jurisdiction or virtually anywhere else, and that were not reasonably foreseeable. Although a significant number of jurisdictions recognize a separate recovery in tort for bad faith breach of contract, far fewer join our readiness to extend a similar cause of action to the denial of statutory workers' compensation claims. Virtually none has found an insurance-like duty not grounded in either contract or statute.

In Wolf v. Prudential Ins. Co., 50 F.3d 793 (10th Cir.1995), upon which the majority heavily relies, a panel of the Tenth Circuit Court of Appeals found the relationship between an insured and an independent claims adjuster to be a question of fact, not subject to summary judgment, where the adjuster was not only an insurance company itself but reinsured the nominal insurer, a church, and provided the church with the very insurance policy under which the coverage at issue was written. Even then, however, the Tenth Circuit did not find such a duty to exist in federal law but only predicted that the Oklahoma Supreme Court would impose such a duty if faced with a similar situation. The foresight of the federal court in this regard is at least questionable in light of Oklahoma's subsequent rejection of the Weigel! rationale and refusal to extend the bad faith tort even to a statutory workers' compensation claim. See Kuykendall v. Gulfstream Aerospace Technologies, 66 P.3d 374 (Okla.2002).

Finally, because I cannot find any theoretical basis for this duty, its seope is also unclear to me. Despite its reference to the broad legislative declaration in § 10-1-101, 8 C.R.S. (2002), the majority appears to reject the petitioners' argument that an action in tort should be permitted against all persons involved in the provision of insurance services, limiting the sweep of its holding instead to insurance claims adjusters having a reinsurance relationship with the actual insurer. It is unclear to me, however, the extent to which the holding rests on a virtual abdication of its role by the actual insurer, which the majority clearly implies was the case here. Furthermore, although the majority does not discuss or assign any particular weight to the implications of governmental immunity in this case, it makes clear that in "the typical case" an insured is adequately protected by the non-delegable duty of his insurer. Maj. op. at 466. Unless the unavailability or inadequacy of recovery from the insurer is a consideration, however, it remains unclear to me why the insured is not adequately protected by the well-accepted principles of agency law.

I would be considerably more reticent than the majority about judicially creating duties and liabilities, not heretofore recognized at law, especially when they conflict with other policy choices of the legislature and seem to rest so heavily on the equities of individual cases. Because I disagree with both the majority's rationale and its judgment, I respectfully dissent.

I am authorized to state that Justice KOURLIS joins in this dissent.

      . We granted certiorari on the following issues:
      1) Whether third-party administrators of health insurance plans owe the insureds any duty to process claims and determine coverage in a reasonable or good faith manner, and hence, whether they can be liable for either bad faith or negligence in the handling of those claims.
      2) Whether the court of appeals' decision to affirm the district court's award of costs must be reversed because the respondents are not the prevailing parties in this case.
      In light of our holding, we vacate the award of costs to the Administrators.

      . We consolidated this case with an appeal from an unpublished court of appeals opinion in case number 00CA2127. The two appeals involve the same parties and the same underlying case.

      . Mutual of Omaha of Colorado does business as Antero Health Plans. It is a wholly owned subsidiary of respondent United of Omaha Life Insurance Company.

      . Apparently United assigned some of these functions, including the appellate function, to its wholly owned subsidiary, respondent Mutual of Omaha of Colorado.

      . Although the Plan expressly excluded coverage for self-inflicted injuries, the district court found the scope of coverage under the Plan to be ambiguous, largely because the Plan defined the term "injury" in terms of accidental injuries, independent of illness and because the 1994 summary of the Plan sent to policyholders did not include self-inflicted injuries among the enumerated exclusions. The district court's order granting Cary's motion for summary judgment with regard to coverage of his daughter's medical treatment is not before us in this appeal.

      . For instance, courts consider (1) the risk involved, (2) the foreseeability and likelihood of injury as weighed against the social utility of the actor's conduct, (3) the magnitude of the burden of guarding against injury or harm, and (4) the consequences of placing the burden on the actor. E.g. HealthONE, 50 P.3d at 888.

      . We have applied a similar approach outside the domain of insurance contracts. For example, in Greenberg, 845 P.2d at 537, we observed that a duty of care "may arise independent of a contractual relationship even though such relationships often provide the basis for tort actions." In that case, we imposed a duty of care on a physician rendering an independent medical examination, although there was no contractual or physician/patient relationship between the examinee and the defendant doctor. Likewise, in Cosmopolitan Homes v. Weller, 663 P.2d 1041 (Colo.1983), we determined that a homebuilder owed a duty of care to a subsequent purchaser even though there was no privity of contract between the builder and the purchaser.

      . This case stands in contrast to cases like Martinez, 969 P.2d at 213, which hold that individuals who are merely involved in claims processing do not have a special relationship with the insured sufficient to create a duty of good faith and fair dealing. The physician in Martinez did not perform many of the functions of an insurance company, and had no direct financial incentive to deny the insured's claim. Our holding does not affect these cases.

      . See Douglas R. Richmond, The Two-Way Street of Insurance Good Faith: Under Construction, But Not Yet Open, 28 Loy. U. Chi. L.J. 95, 107 n. 74 (1996)(citing twenty-nine states that have recognized a common law tort for bad faith breach of a first-party insurance contract); see also Dominick C. Capozzola, First-Party Bad Faith: The Search for a Uniform Standard of Culpability, 52 Hastings LJ. 181, 182 n. 5 (2000)(finding twenty-five states that explicitly allow common law tort recovery, but citing five others that have allowed for "similar damages on expanded notions of contract law," and two more that have enacted statutes covering bad-faith actions).

      . See, e.g., Natividad v. Alexsis, Inc., 875 S.W.2d 695 (Tex.1994). See also Kuykendall v. Gulfstream Aerospace Technologies, 66 P.3d 374 (Okla.2002), Hodges, J., dissenting, at n. 33 (surveying jurisdictions that have decided whether or not to recognize common law tort claims for bad faith in the workers' compensation context).


source: Caselaw Access Project

license: Public Domain

text:
    Brian Dean WALTON, Petitioner. v. The PEOPLE of the State of Colorado, Respondent.
    No. 02SC60.
    Supreme Court of Colorado, En Banc.
    April 28, 2003.
    Ken Salazar, Attorney General, Wendy J. Ritz Assistant Attorney General, Denver, Colorado, for Petitioner.
    David S8. Kaplan, Colorado State Public Defender, Lisa Weisz, Deputy State Public Defender, Denver, Colorado, for Respondent.
   Justice Kourlis, Justice Rice and Justice Coats are of the opinion that the judgment of the Court of Appeals should be affirmed, whereas Chief Justice Mullarkey, Justice Hobbs and Justice Martinez are of the opinion that it should be reversed.

Since the court is equally divided, the decision of the Court of Appeals is affirmed by operation of law. CAR. $5(e).

Justice BENDER, does not participate.


author: Judge METZGER.

text:
    The PEOPLE of the State of Colorado, Plaintiff-Appellee, v. Zid PERRY, Defendant-Appellant.
    No. 98CA2122.
    Colorado Court of Appeals, Div. I.
    Feb. 14, 2002.
    Rehearing Denied Sept. 19, 2002.
    Certiorari Denied April 28, 2003.

      Ken Salazar, Attorney General, Christine C. Brady, Assistant Attorney General, Denver, Colorado, for Plaintiff-Appellee.
    David S. Kaplan, Colorado State Public Defender, Elizabeth Griffin, Deputy State Public Defender, Denver, Colorado, for Defendant-Appellant.
   Opinion by

Judge METZGER.

Defendant, Zid Perry, appeals the judgment of conviction entered on a jury verdict finding him guilty of possession of a schedule II controlled substance (methamphetamine) with intent to distribute, use of a controlled substance, tampering with evidence, and possession of drug paraphernalia. He also appeals the trial court's order denying his Crim. P. 85(c) motion alleging ineffective assistance of counsel. We affirm.

On September 22, 1997, a Mesa County deputy sheriff saw defendant's pickup truck traveling down a road with two people in the cab and, knowing a bench warrant existed for defendant's nonappearance in a pending case, followed the pickup into the driveway adjoining a house. The pickup parked behind the house, out of the deputy's view. A person, later identified as the owner of the house, came around the side of the house and, in response to the deputy's inquiry about who had been in the pickup with him, said that he had been alone. The deputy replied he had seen two people and asked if the other person had been defendant. The owner admitted it was, then went into the house to get him.

Shortly afterwards, the owner told the deputy defendant had run out the back door. Defendant was found standing near a shed behind the house. The deputy saw him reach toward his front pocket with his left hand, but then move out of view. Officers later found an address book with a "pay-owe" schedule and $306 in cash in defendant's pocket. On the ground nearby, in weeds that were wet from a recent rain, they found a glass smoking pipe with a trace amount of methamphetamine and a syringe. Neither the pipe nor the syringe was wet.

The owner of the house consented to a search, but each of the three bedrooms was padlocked. Defendant refused to permit a search of his bedroom, so a search warrant was obtained. In his bedroom, officers found eight cubic centimeters of liquid methamphetamine in a syringe, a recipe for making methamphetamine, test tubes, a propane bottle, a scale, some drug paraphernalia, a loaded nine millimeter handgun, and mail addressed to defendant. In the truck, officers found a glass pipe, test tubes with stoppers, a retail shopping bag containing small plastic bags, and, inside a film canister, another bag with three plastic bags containing 8.1 grams, 6.83 grams, and 2.1 grams of methamphetamine, respectively.

I.

DIRECT APPEAL

A.

Defendant first contends the trial court erred when it refused to allow him to present evidence at trial of the existence of the bench warrant for his arrest in another case. He argues that the exclusion of this evidence allowed the prosecution to create the misleading impression that his flight from police indicated his consciousness of guilt of the offenses here. He further argues the existence of the warrant was relevant to assist the jury in assigning appropriate weight to the flight evidence and in putting the arrest itself in context. We disagree.

We review this evidentiary ruling for abuse of discretion; thus, we must determine whether defendant has established it was manifestly arbitrary, unreasonable, or unfair. See People v. Ibarra, 849 P.2d 33 (Colo.1993). We will afford the evidence the maximum probative value attributable by a reasonable fact finder and the minimum unfair prejudice that can be reasonably expected. See People v. Gibbens, 905 P.2d 604 (Colo.1995).

Evidence of a defendant's flight may be relevant to show consciousness of guilt, People v. Baca, 852 P.2d 1302 (Colo.App.1992), but only if it can be shown the defendant was aware he or she was being sought. See, e.g., United States v. White, 488 F.2d 660 (8th Cir.1973); People v. Moody, 45 Ill.App.3d 674, 31 Ill.Dec. 441, 394 N.E.2d 643 (1979); State v. Sullivan, 43 N.J. 209, 203 A.2d 177 (1964); see also Barbara E. Bergman & Nancy Hollander, 1 Wharton's Criminal Evidence § 3:20 (15th ed. 1997).

To avoid encouraging a jury to speculate, evidence must create more than an unsupported inference or a possible ground for suspicion. See People v. Perez, 972 P.2d 1072 (Colo.App.1998).

Here, defendant sought to introduce evidence of the bench warrant's existence as an alternative explanation for his flight. However, he proffered no evidence that he knew about the warrant; instead, he argued the jury could infer that he was aware of its existence.

We agree with the trial court that, without evidence defendant knew of the warrant's existence, it would have been mere speculation to suggest he fled for that reason. See People v. Perez, supra. Thus, the trial court did not abuse its discretion in rejecting defendant's evidence.

Defendant next argues the evidence of the existence of the bench warrant was relevant and admissible as "history of arrest evidence" because the warrant was the reason for the police contact. We are not persuaded.

The purpose of history of arrest evidence is to show the existence or absence of consciousness of guilt. See Jordan v. People, 151 Colo. 133, 376 P.2d 699 (1962). While evidence that defendant fled because of his awareness of the prior bench warrant might have been relevant to the issue of his consciousness of guilt of the present offense, evidence that the prior warrant existed, without more, would not have been relevant to that issue.

Finally, defendant argues the trial court's evidentiary ruling allowed the prosecutor to create a misleading impression about the significance of his flight. Again, we are not persuaded.

Defendant relies on People v. Fierro, 651 P.2d 416 (Colo.App.1982), which held that a defendant's right to fair trial is violated when a prosecutor's argument, while supported by evidence admitted at trial, is contrary to facts outside the record of which the prosecutor is aware. However, the situation here is distinguishable. In Fierro, supra, the prosecutor argued the defendant had fabricated a story about surrendering three guns, although the prosecutor knew the guns had been surrendered to authorities Here, there is nothing in the record to indicate the prosecutor knew defendant was aware of the warrant's existence. Therefore, the argument was not the type of purposeful misrepresentation condemned in Fierro, supra.

Accordingly, the trial court's evidentiary ruling will not be disturbed.

B.

Defendant next contends the trial court "committed reversible error by allowing police to testify that he invoked his right to be free from a warrantless search and seizure in his home." We disagree that reversal is required.

Where, as here, defendant does not object at trial, we will review for plain error and determine whether the testimony so affected the fundamental fairness of the trial as to cast serious doubt on the reliability of the judgment of conviction. See Walker v. People, 932 P.2d 303 (Colo.1997). A constitutional error is harmless when the evidence properly received is so overwhelming that such error was harmless beyond a reasonable doubt. See Bartley v. People, 817 P.2d 1029 (Colo.1991). However, if a review of the entire record shows the defendant could have been prejudiced, the error cannot be harmless. See Lybarger v. People, 807 P.2d 570 (Colo.1991).

The United States and Colorado Constitutions protect individuals from unreasonable searches and seizures. U.S. Const. amends. IV, XIV; Colo. Const. art. II, § 7; see also Minnesota v. Dickerson, 508 U.S. 366, 113 S.Ct. 2130, 124 L.Ed.2d 334 (1993); People v. Canton, 951 P.2d 907 (Colo.1998). In general, searches of a person's home or property are prohibited without a warrant. See People v. Gall, 30 P.3d 145 (Colo.2001).

A constitutional right may be imper-missibly burdened when a penalty is imposed for exercising that right. See Apodaca v. People, 712 P.2d 467 (Colo.1985); People v. Anderson, 954 P.2d 627 (Colo.App.1997). Further, a defendant's exercise of his or her rights is inherently ambiguous and, therefore, is not probative of guilt. See People v. Quintana, 665 P.2d 605 (Colo.1983).

A defendant's due process rights may be violated when the prosecution uses at trial the defendant's refusal to consent to a search. See, e.g., United States v. Dozal, 173 F.3d 787 (10th Cir.1999). However, even if we assume that occurred here when the police testified about defendant's refusal to consent to a search, we conclude reversal is not required under the facts of this case.

The evidence properly received at trial showed defendant had 12.08 grams of methamphetamine, along with various items associated with the sale of drugs, in his truck. In his bedroom, defendant had eight cubic centimeters of liquid methamphetamine in a syringe, a recipe for making methamphetamine, and assorted items of drug paraphernalia.

Because this evidence of defendant's guilt is overwhelming, any error was harmless beyond a reasonable doubt.

C.

Defendant also asserts that, because § 18-18-405(2)(a)(I), C.R.S8.2001, classifies possession of a schedule II controlled substance with intent to distribute as a class 4 felony, the trial court erred in entering a judgment of conviction for a elass 3 felony and in sentencing him accordingly. We disagree.

In People v. Pierrie, 30 P.3d 816 (Colo.App.2001), a division of this court considered and rejected a contention identical to that defendant raises here. It concluded that, with the exception of simple possession and attempted simple possession, the General Assembly intended to punish as class 3 felonies all of the drug-related crimes proscribed in § 18-18-405(1), C.R.S.2001, including possession with intent to distribute. We agree with that determination and adopt it here.

Defendant relies on dicta in People v. Whitaker, 32 P.3d 511 (Colo.App.2000), to support his argument that possession of less than twenty-five grams of methamphetamine should be treated as a class 4 felony. However, that case relied on the enhanced sentencing provisions of § 18-18-405(8), C.R.S. 2001, and held that possession with intent to distribute more than one kilogram of methamphetamine was a class 3 felony. The issue here is whether possession with intent to distribute a schedule I1 controlled substance remains a class 3 felony when the amount possessed does not trigger § 18-18-4058). Under People v. Pierrie, supra, it does.

Therefore, the trial court did not err in sentencing defendant for a class 3 felony.

IL.

CRIM. P. 35(c) APPEAL

A.

Defendant contends the trial court erred in denying his Crim. P. 35(c) motion alleging ineffective assistance of counsel. Specifically, defendant argues the trial court erred in finding that he was not prejudiced by his counsel's untimely communication of a plea offer. Therefore, he asserts, his conviction must be reversed and the case must be remanded for a new trial. We disagree.

We give deference to the trial court's findings of fact after a Crim. P. 85(c) hearing, and we will not disturb them on review if they are supported by competent evidence in the record. See Downey v. People, 25 P.3d 1200 (Colo.2001).

To succeed on a claim of ineffective assistance of counsel, a defendant must establish both deficient performance and prejudice. To establish deficient performance, the defendant must demonstrate that, in light of all the cireumstances, counsel's identified acts or omissions were outside the wide range of professionally competent assistance. Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984); People v. Cole, 775 P.2d 551 (Colo.1989).

The trial court held that trial counsel's failure to convey the plea offer constituted deficient performance, and we agree.

Colorado has not adopted the rule that failure to convey a plea offer is deficient performance even though a defendant otherwise receives a fair trial. But, the rule has been widely accepted in other jurisdictions. See, e.g., Arredondo v. United States, 178 F.3d 778 (6th Cir.1999); United States v. Blaylock, 20 F.3d 1458 (9th Cir.1994); United States v. Rodriguez, 929 F.2d 747 (1st Cir.1991); Johnson v. Duckworth, 793 F.2d 898 (7th Cir.1986); United States ex rel. Caruso v. Zelinsky, 689 F.2d 435 (3d Cir.1982); see also ABA Standards for Criminal Justice: Prosecution Function and Defense Function § 4-6.2(b) (8d ed. 1998)("Defense counsel should promptly communicate and explain to the accused all significant plea proposals made by the prosecutor.").

We adopt that rule and, thus, agree with the trial court's conclusion that "[t is indisputable that the failure of an attorney to convey a plea offer to a client is a violation of the standard practice which an attorney should follow." The court found defense counsel did not timely convey the plea offers, and because defendant received a sentence greater than that contained in the offers, defense counsel's performance was deficient. However, defendant still must establish prej-udiee to succeed on his claim.

To establish prejudice, the defendant must demonstrate a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would 'have been different. Strickland v. Washington, supra; People v. Cole, supra.

Failing to communicate a plea offer to a defendant constitutes prejudice if there is a reasonable probability that the defendant would have accepted the offer if it had been timely communicated. See United States v. Blaylock, supra; cf. United States ex rel. Caruso v. Zelinsky, supra.

The trial court found defendant made an insufficient showing of prejudice because he "has not proven by a preponderance of the evidence that if those offers, either offer, had been communicated he would have accepted either one." As the trial court explained, defendant wished a global disposition of all five of his pending cases (including this one) with a six-year sentencing cap. However, none of the plea offers contained this provision because the deputy district attorney would only agree to an eight-year sentencing cap.

On defendant's motion for reconsideration, which argued he need only show a reasonable probability he would have accepted the offers, the court found that no reasonable probability existed.

Although the record contains some conflicting evidence, the trial court's conclusion is well-supported when the evidence is viewed in the context of its credibility determinations. Thus, we find no error.

B.

Defendant's remaining contentions criticize trial counsel's trial strategy and technique. However, we agree with the trial court that trial counsel's choices did not constitute ineffective assistance and that defendant failed to show a reasonable probability the outcome would have been different if trial counsel had used a different strategy or technique. See People v. Sparks, 914 P.2d 544 (Colo.App.1996). Accordingly, we find no error in the trial court's denial of defendant's Crim. P. 35(c) motion on this basis.

The judgment and order are affirmed.

Judge NEY and Judge TAUBMAN concur.


author: Judge NEY. Justice ERICKSON

text:
    The PEOPLE of the State of Colorado, Plaintiff-Appellee, v. Randy D. RIGGS, Defendant-Appellant.
    No. 00CA0398.
    Colorado Court of Appeals, Div. IV.
    June 20, 2002.
    Rehearing Denied July 18, 2002.

    Certiorari Granted April 21, 2003.

      Ken Salazar, Attorney General, Elizabeth Rohrbough, Assistant Attorney General, Denver, Colorado, for Plaintiff-Appellee.
    David S. Kaplan, Colorado State Public Defender, Mark G. Walta, Deputy State Public Defender, Denver, Colorado, for Defendant-Appellant.

       Erickson, J., would grant.

       Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.$.2001.

   Opinion by

Judge NEY.

Defendant, Randy D. Riggs, appeals the trial court's order denying authorization, pursuant to § 16-8-118, C.R.S.2001, for temporary physical removal from state hospital grounds for the purpose of treatment. We reverse and remand for further proceedings.

In 1982, defendant was found not guilty by reason of insanity of first degree murder after he strangled a woman and then sexually assaulted her corpse.

After several attempts, the Colorado Mental Health Institute in Pueblo (CMHIP) gave notice to the committing court that it intended to authorize temporary physical removal of defendant from the hospital for treatment and rehabilitation activities. CMHIP sought permission for supervised leave and, when defendant's doctors thought it was appropriate, for unsupervised leave. The district attorney filed an objection. After an evidentia-ry hearing, the court denied the request for temporary physical removal in a lengthy written order.

L.

Defendant contends that the applicable burden of proof should be on the objecting party. We agree.

We are not convinced by the People's argument that the burden should always be on the defendant because courts have indicated "it is reasonable to assume that, until the contrary is shown, the committed defendant poses a danger to the public by reason of his mental condition." People v. Gilliland, 769 P.2d 477 (Colo.1989)(citing People v. Chavez, 629 P.2d 1040 (Colo.1981)).

Here, the issue is not a matter of involuntary commitment as was addressed in People v. Chavez, supra, or of involuntary administration of antipsychotic medication as in People v. Gilliland, supra. A § 16-8-118 determination is, at its essence, a matter of treatment as opposed to a curtailment of a liberty interest. Furthermore, the plain language of the statute indicates that the court holds a "hearing upon the objections," and thus the burden should rest with the objecting party. See § 16-8-118(1)(c).

Thus, we conclude that the burden of proof under § 16-8-118 is on the objecting party, as opposed to the committed defendant. Additionally, the party with the burden of proof must meet that burden by a preponderance of the evidence. See People v. Garlotte, 958 P.2d 469 (Colo.App.1997)(applying preponderance of the evidence standard to revocation of defendant's conditional release); People v. McCoy, 821 P.2d 873 (Colo.App.1991).

IL

Defendant next contends that § 16-8-118 violates his constitutional rights of due process and equal protection because the statute lacks sufficient procedures and standards. We decline to reach this constitutional argument. Defendant did not adequately preserve it because he raises it for the first time on appeal. See People v. Boyd, 30 P.3d 819 (Colo.App.2001).

IIL

Defendant next contends that the trial court's order does not reflect that it considered the petition under the correct non-constitutional standards as set forth in prior decisions of Colorado courts. We agree.

Section 16-8-118 authorizes the temporary physical removal of a committed defendant from an institution for treatment and rehabilitation activities. The statute requires that the institution give written notice to the committing court of its intention to allow temporary leave for a committed defendant. Section 16-8-118(1)(a), C.R.8.2001. Thirty days from the date of mailing of the notice, the temporary physical removal request is authorized unless the district attorney or the attorney of record for the defendant files an objection with the committing court. Section 16-8-118(1)(b), C.R.S.2001 (no provision for a hearing if no objection is timely filed).

If an objection is filed, "the committing court shall fix a time for a hearing upon the objections, and no removal of the defendant from the institution in which he is held shall be authorized unless and until approval thereof is given by the committing court following such hearing." Section 16-8-118(1)(e), C.R.S.2001.

A request for temporary removal in supervised and unsupervised settings does not implicate the same liberty interests as involuntary commitment or nonconsensual administration of medication. See People v. Gilliland, supra; People v. Chavez, supra. However, the request implicates lesser considerations related to safety-both for the community and the committed defendant-than release or conditional release. See § 16-8-120, C.R.S.2001 (listing the applicable tests for release of a committed defendant); People v. Fetty, 650 P.2d 541, 543 (Colo.1982)("[tlhe state's interest at stake in automatically committing one found not guilty by reason of insanity is to insure the public's safety as well as the safety of the accused himself").

Thus, when ruling on a contested request for temporary removal under § 16-8-118, a trial court should assess on the totality of the evidence, whether public safety can be ensured while achieving the therapeutic purpose of the release. Cf. People v. Gilliland, supra, 769 P.2d at 480; Marshall v. Kort, 690 P.2d 219 (Colo.1984)(recognizing that a committed defendant may have a right to treatment).

Additionally, the court should weigh the rehabilitative potential of the temporary removal activities related to the committed defendant's course of treatment against the potential danger to the community based on the defendant's contact with the public. See People v. Garlotte, supra, 958 P.2d at 477 ("in formulating release conditions, a court must balance the defendant's best interests with the community's need for safety"). Furthermore, the trial court must give due consideration to the decisions of health care professionals made in the exercise of their professional judgment. See Kort v. Carlson, 723 P.2d 143, 150 (Colo.1986)("defendant's right to treatment ... consists ... of the right to have decisions about the appropriate treatment developed and offered by competent decisionmakers after the exercise of their professional judgment"). In giving such consideration, the trial court must indicate and evaluate such decisions in its findings of fact. See Kort v. Carlson, supra.

Here, the record indicates that the trial court and the parties adhered to the procedural requirements set forth in § 16-8-118. However, the record does not indicate whether the trial court applied the proper legal standards in ruling on the issue before it. Thus, we remand the case to the trial court to apply the standards we have set forth in this opinion. On remand, the court may also take further evidence if it deems necessary. See People v. Garlotte, supra.

Additionally, on remand, defendant should be provided the opportunity to rectify any factual errors that he contends were made by the court in denying his request for temporary physical removal. Finally, with regard to defendant's claim that the trial court improperly admitted letters from the victim's family, we direct that on remand the court consider only evidence relevant under the standards set forth in this opinion.

Order reversed and case remanded for further proceedings consistent with this opinion.

Judge VOGT concurs.

Justice ERICKSON dissents.

Justice ERICKSON

dissenting.

I respectfully dissent.

For the first time on appeal defendant asserts violations of the Due Process and Equal Protection Clauses of both the United States and Colorado Constitutions. These constitutional challenges were not raised in the trial court and should not be addressed in this appeal. See Colgan v. State, 623 P.2d 871 (Colo.1981).

The majority states that the trial court did not consider the petition under the correct standards and Colorado case law. However, the issue of statutory interpretation is raised for the first time on appeal. Defendant's argument about the procedures set forth in § 16-8-118, C.R.S.2001, was not made in the trial court and is supported only by defendant's appellate brief,. Therefore, that argument should not be considered here.

Further, the procedures and burden of proof set forth in the majority opinion expand and materially change the statute enacted by the General Assembly and thus constitute judicial legislation. The procedures to be followed are specified in § 16-8-118. It is not our function to invade the province of the General Assembly with directives that change the burden of proof and the discretion afforded to the trial court in ruling on removal and treatment outside the institution under § 16-8-118.

The prosecution's response to defendant's request for off-grounds privileges and treatment was that there has been an insufficient showing of adequate rehabilitation to warrant his temporary physical removal from the Colorado Mental Health Institute in Pueblo. I agree with the order entered by the trial court, which appears as Appendix A to this dissent.

Thus, the trial court was acting within its discretion when it made these findings and entered its order and denied the request for temporary removal for treatment and rehabilitation on a supervised or unsupervised program. Colorado's criminal commitment statutes give the trial court the ultimate responsibility for these decisions relating to commitment and release. People v. Gilliland, 769 P.2d 477, 481 (Colo.1989).

Accordingly, I would affirm the order entered by the trial court.

APPENDIX A

The defendant, Randy Dean Riggs, comes before this Court for authorization for temporary removal from the State hospital for treatment and rehabilitation pursuant to Section 16-8118, C.R.S. v. 6. This authorization would permit the defendant to leave the premises of the Colorado Mental Health Institute at Pueblo at first in a group under supervision and later, if the treating doctors felt it appropriate and without further Court order, to leave the premises without supervision. The ultimate goal would be to discharge this defendant.

The People filed an objection to such release because the defendant is too dangerous at this time to be permitted these privileges.

1. A jury trial on the issue of sanity was held in [March] 1982 and such jury found that the defendant was not guilty by reason of insanity [of] the crime of murder in the first degree.

2. The evidence has revealed that the defendant in 1981 planned to rape a young school teacher, but gave up that plan and decided to rape a [20-year-old] woman (the victim) and steal her sports car after he had noticed her driving around the Wellington area. He was able to determine where she lived. She had purchased a house in Wellington and was working in nearby Fort Collins driving back and forth in her sports car. The defendant devised a plan earlier as to how he would be able to enter the home of the school teacher and rape her and then decided to use this same plan to gain entry into the victim's home. He went to her door pretending to need to use the telephone.

The victim permitted him to enter her home and use the telephone after which he left, but then immediately returned claiming that he had left his wallet inside. The young woman refused to let him back into her home so he forced his way in and attacked her. The victim resisted so he killed her by choking her to death during the violent struggle. After killing the young woman he removed her clothing and had sexual intercourse with her corpse. He then took her automobile and kept it. He later, the next day, came back to the crime seene on at least one occasion and again had sex with the corpse.

8. The defendant, then an independent 16-year-old, had acted out in weird ways at school and elsewhere to get attention. His behavior made most of his teachers and counselors believe the he was not sane. He certainly was different. Although there was expert testimony that the defendant was sane and had merely had a violent criminal personality, there was also expert testimony that he was insane. The jury decided that he was insane and, therefore, not responsible for this crime.

4. The defendant was committed for an indeterminate term at the State hospital for the criminally insane. During the first 12 years all of the doctors determined that the defendant was highly manipulative, had great anger towards everyone, and would explode from time to time when frustrated. He controlled his anger only once during a six-month period. The defendant developed volatile homosexual relationships with some of the other inmates. The defendant would try to manipulate one inmate against another for his own advantage and even manipulate his staff and the doctors.

5. After 12 years the defendant finally admitted to killing the girl and having sex with her after she was dead. Although the defendant admits that he returned to the scene of the crime at least onee, he denied he went there for sex. He admitted having sex with the corpse, but states that her body aroused him after he had returned to the crime scene. The doctors (even now) are unable to diagnose a person who has sex with a corpse, or at least [are] unable to diagnose why this defendant had such sexual relationships.

6. The current testimony reveals that the defendant is now 83 years of age with a borderline personality disorder with antisocial personality disorder, narcissistic traits. Although the defendant has made progress in controlling his great anger, he still is a risk to the community when unsupervised. The doctors are not able to know for sure if the defendant is able to fool them because he knows what they want him to do or if he has actually progressed so that he can be permitted to be in the community. He certainly knows that they want him to do certain things or refrain from doing certain things in order for him to obtain privileges, There will always be a danger to some degree or other and a risk to the community if he is at large. The defendant cannot be cured but there is indication that he may be manageable. The doctors agree that the defendant should not be alone with any young woman and they recognize that the defendant has a great desire to do so. The defendant is lonely. His focus on women is still of concern to the doctors.

7. The defendant acknowledges that his current diagnosis includes sexual disorder, depression, borderline personality disorder with antisocial features, and narcissistic features. The defendant admits that he had relapse signs for dangerous behavior. He states feeling like the world is out to get him and that nobody cares or that people are just pushing him aside. He states that he starts cruising for somebody he can hurt. In the 1980's he had the urge to jump and strangle a female staff member. Besides the great anger problem, he acknowledges that he has sexual problems as well. He wants to have women around him all the time and sometimes to have sex with them. He acknowledges that he had rape fantasies in the past. He reports, "I start thinking about a woman. I get stuck on it. I think this woman wants me ... it goes to where it's sexual." The defendant recognizes that when he reports this to the staff it messes with his privileges. It makes him become dishonest with the staff. "Sometimes I get obsessed to where nothing else really matters and then my thinking gets all haywire." When asked if this was dangerous he replied[,} "It could be."

8. In 1982 when the defendant was first brought to the State hospital, the doctors state that the defendant laughed about the crime he was accused of committing, but refused to acknowledge that he committed it. He would not even look at the pictures of the victim to see what he had done. He now acknowledges what he did and states that [he] is sorry for the victim and her family. The defendant does want to have these [additional] privileges.

9. The defendant relatively recently upset one of his female therapists when he glared at her for a period of time in [July] 1999. This was a very hostile, angry action on his part.

10. Although the treating doctors have become friends of the defendant, want to recognize success of their treatment programs for him, and may want him to have progressed to the point that he can have unsupervised trips away from the hospital, this Court finds that the risk is far too great at least at this time to permit him to be unsupervised away from the hospital. The treatment has not yet reduced the defendant's problems with anger and his sexual desire for women to allow him to advance to this next level.

Therefore, the Court denies the defendant's request for permission to have temporary removal for treatment and rehabilitation away from the hospital in supervised or unsupervised releases.


author: Judge DAVIDSON.

text:
    The PEOPLE of the State of Colorado, Plaintiff-Appellee, v. Heath VALDEZ, Defendant-Appellant.
    No. 01CA0324.
    Colorado Court of Appeals, Div. III.
    Aug. 1, 2002.
    Certiorari Denied May 12, 2003.
    Ken Salazar, Attorney General, Michelle L. Prince, Assistant Attorney General, Denver, Colorado, for Plaintiff-Appellee.
    David S. Kaplan, Colorado State Public Defender, Anne Stockham, Deputy State Public Defender, Denver, Colorado, for Defendant-Appellant.
   Opinion by

Judge DAVIDSON.

Defendant, Heath Valdez, appeals from the trial court's order revoking his Youthful Offender System (YOS) sentence and imposing a six-year term with the Department of Corrections (DOC). We affirm.

In July 1997, defendant pled guilty to attempted first degree assault and was sentenced to six years in the DOC. The sentence was suspended on the condition that he successfully complete a three-year sentence in the YOS.

At an administrative hearing held April 13, 2000, defendant pled guilty to repeatedly violating the conditions of his YOS sentence. He was penalized with a ninety-day loss of privileges and seventy-five days of confinement.

On April 25, 2000, the DOC issued an unconditional statutory discharge to defen-. dant, which was to take effect on May 6, 2000. On May 5, 2000, the prosecution moved to revoke defendant's YOS sentence on the ground that he had failed to complete the YOS program successfully.

At a hearing on the revocation moti‘on, defendant argued that the trial court lost jurisdiction to revoke his sentence after the DOC issued the April 25 discharge order. He also argued that revocation would violate his right to be free from double jeopardy because the YOS had already penalized him for his misconduct.

The trial court rejected defendant's arguments, revoked his YOS sentence, and imposed the six-year DOC sentence.

I.

Defendant contends that principles of double jeopardy bar the imposition of the suspended DOC sentence because he suffered administrative sanctions for the same conduct. We disagree.

Here, the facts are undisputed, and the issue before us is solely a question of law subject to de novo review. See People v. Winpigler, 8 P.3d 439 (Colo.1999).

The double jeopardy clauses of the Fifth Amendment and Colo. Const. art. II, § 18, prohibit the state from imposing multiple punishments for the same crime. To show that the state has imposed multiple punishments, an individual must demonstrate that: (1) the state has subjected the individual to separate proceedings; (2) the conduct precipitating the separate proceedings was a single offense; and (8) the penalties in each of the proceedings may be considered "punishment" for double jeopardy purposes. People v. Ferrel, 929 P.2d 65 (Colo.App.1996).

We conclude there was no double jeopardy violation. It is the General Assembly's expressed intent that youthful offenders sentenced to the YOS be subject to all DOC regulations. Section 16-11-311(1)(d), C.R.S. 2001. Restraints directed toward the enforcement of prison regulations are essential to promote rehabilitation and order and are not considered punishment for double jeopardy purposes. People v. Watson, 892 P.2d 388 (Colo.App.1994). Therefore, the administrative proceeding that resulted in defendant's confinement and loss of privileges did not preclude imposition of the suspended sentence on double jeopardy grounds.

IL

Defendant next contends that the trial court had no jurisdiction to revoke his YOS sentence and sentence him to DOC custody. Again, we disagree.

The issue of the trial court's jurisdiction raises a question of law. See People in Interest of Bailey, 745 P.2d 280 (Colo.App.1987). Our review is de novo. See People v. Melillo, 25 P.3d 769 (Colo.2001).

The issue raised here was resolved in People v. Miller, 25 P.3d 1230 (Colo.2001). There, the DOC issued an unconditional statutory discharge that purportedly took effect three days before the trial court granted the prosecution's motion to revoke the defendant's YOS sentence. The supreme court determined that the discharge was void and did not vitiate the trial court's jurisdiction because "[the YOS statute clearly provides that an offender who cannot successfully complete his YOS sentence must be returned to the district court." People v. Miller, supra, 25 P.3d at 1232; see also § 16-11-311(5)(c), C.R.S.2001.

Defendant argues that, unlike the situation in Miller, the DOC official who signed his discharge knew that there was a pending motion to revoke his YOS sentence. Even if defendant were correct, this is a distinction without a difference. An agency action that exceeds the scope of the statutory powers conferred on it is void. See Hawes v. Colorado Div. of Ins., 45 P.3d 763 (Colo.App.2001)(cert. granted Apr. 22, 2002).

We conclude the DOC's discharge order was void and did not affect the trial court's jurisdiction to revoke defendant's YOS sentence.

The order is affirmed.

Judge JONES and Judge KAPELKE concur.