author: STARING, Presiding Judge:

text:
    SK BUILDERS, INC., an Arizona Corporation, Plaintiff/Appellee, v. Michael and Sandi SMITH, Husband and Wife, Defendants/Appellants.
    Michael and Sandi Smith, Husband and Wife, Third-Party Plaintiffs/Appellants, v. David Alan Connor, Gregory John Connor, D.C. Concrete Company, Inc., Third-Party Defendants/Appellees.
    No. 2 CA-CV 2018-0008
    Court of Appeals of Arizona, Division 2.
    Filed January 29, 2019
    Waterfall, Economidis, Caldwell, Hanshaw & Villamana P.C., Tucson, By Corey B. Larson and Ariel E. Henderson, Counsel for Plaintiff/Appellee
    Thomas A. Zlaket P.L.L.C., Tucson, By Thomas A. Zlaket and The Law Offices of Charles M. Giles, Tucson, By Charles M. Giles, Counsel for Defendants/Third-Party Plaintiffs/Appellants
    Rai & Barone P.C., Phoenix, By Rina Rai, Jack G. Barone, and Tom Duer, Counsel for Third-Party Defendants/Appellees
    Presiding Judge Staring authored the opinion of the Court, in which Chief Judge Eckerstrom and Judge Brearcliffe concurred.
   STARING, Presiding Judge:

¶1 Michael and Sandi Smith appeal the trial court's judgment that they violated Arizona's Prompt Pay Act ("APPA"), A.R.S. §§ 32-1129 to 32-1129.07, by failing to pay or object in writing to a payment application submitted to them for construction of their new home. The Smiths also argue the court erroneously concluded no issues remained in their lawsuit against the concrete subcontractor after granting the subcontractor summary judgment. Finally, they challenge the attorney fees awarded to both the general contractor and concrete subcontractor as unreasonable. For the following reasons, we affirm in part, reverse in part, and remand.

Factual and Procedural Background

¶2 In September 2010, the Smiths entered into an agreement with SK Builders, Inc., a licensed general contractor, for the construction of a home. The original contract price was $1,632,804. The house was approved for occupancy, subject to final inspection and corrections, on March 22, 2012.

¶3 On May 1, 2012, SK submitted a third amended version of Payment Application No. 19 ("PA 19") to the Smiths, claiming they owed $180,289.61. Pursuant to the contract, SK had previously submitted and the Smiths had paid numerous monthly payment applications throughout the period of construction. In total, they made progress payments to SK in the amount of $1,506,314.76.

¶4 Before SK submitted the third amended version of PA 19, Ronald Robinette, architect and contract administrator, sent SK a letter advising that no further payments would be made until outstanding issues were resolved. According to Robinette, SK actually owed the Smiths money.

¶5 The outstanding issues to which Robinette referred concerned an interior concrete crack and the absence of wire mesh in the concrete that formed the back patio. SK had made repairs by injecting epoxy into the interior concrete crack. SK had also retained engineers to test the back patio, and they had concluded that, although the concrete deviated from the plans, it was in fact stronger than as specified in the plans. Based on the engineering findings, the concrete subcontractor, DC Concrete, refused to completely replace the back patio. PA 19 did not contain any request for payment related to the concrete work; the Smiths had already paid the full amount for the concrete work in previous payment applications, without objection.

¶6 The Smiths terminated the contract with SK effective May 5, 2012. Neither the Smiths, nor Robinette acting on their behalf, ever paid SK the amount requested in PA 19. Nor did the Smiths or Robinette object in writing to any of the items contained in PA 19. The Smiths continue to occupy the house and have not replaced the back patio.

¶7 SK sued the Smiths, claiming a violation of the APPA, breach of contract, and unjust enrichment. In the lawsuit, SK sought payment of the $180,289.61 claimed in PA 19, an additional $10,234.15, interest, and attorney fees. The Smiths counterclaimed against SK, also bringing a third-party complaint against SK's owner and some of SK's subcontractors, including DC, alleging breach of contract/defective workmanship, professional negligence, and fraudulent misrepresentation. Additionally, after several amendments to the third-party complaint, the Smiths included claims against Robinette and various project engineers. All claims except SK's claims against the Smiths were settled or otherwise resolved before trial.

¶8 The trial court granted summary judgment in favor of DC on the Smiths' breach of contract and fraudulent misrepresentation claims, finding no contractual privity between DC and the Smiths. Further, notwithstanding the Smiths' assertion that there were unresolved claims, the court ruled that no legal issues remained with respect to DC and, therefore, it was entitled to judgment pursuant to Rule 54(b), Ariz. R. Civ. P. The court awarded DC $259,092.70 in attorney fees, $5,299.34 in costs, and $30,564 in sanctions pursuant to Rule 68(g), Ariz. R. Civ. P. See Ariz. R. Civ. P. 68(g) (sanctions for party who rejects offer of judgment, but does not obtain more favorable judgment).

¶9 After a bench trial, the trial court found the Smiths had violated the APPA by failing to object in writing to any of the items in PA 19 within fourteen days of its submission. The court, however, found in favor of the Smiths on SK's breach of contract claim and dismissed SK's unjust enrichment claim. It entered judgment for SK for $180,289.61, and awarded SK $60,000 in attorney fees. The court later reduced the attorney fees awarded to SK to $50,000. This appeal followed. We have jurisdiction pursuant to A.R.S. §§ 12-120.21 and 12-2101(A)(1).

Discussion

Payment Application No. 19

¶10 The Smiths first argue PA 19 did not comply with the requirements for a progress payment under the APPA because most of the work in PA 19 was completed outside the preceding thirty-day billing cycle. They also argue that PA 19 was at most a "final billing" that did not impose the same obligations and time limits on them as a progress payment application.

¶11 We review issues of statutory interpretation and application de novo. Obregon v. Indus. Comm'n , 217 Ariz. 612, ¶ 9, 177 P.3d 873 (App. 2008). When interpreting a statute, our primary goal is to "discern and give effect to legislative intent." People's Choice TV Corp. v. City of Tucson , 202 Ariz. 401, ¶ 7, 46 P.3d 412 (2002). Ordinarily, we give words in statutes their commonly accepted meaning. Obregon , 217 Ariz. 612, ¶ 11, 177 P.3d 873. "If a statute's language is clear and unambiguous, we apply it without resorting to other methods of statutory interpretation." Hayes v. Cont'l Ins. Co. , 178 Ariz. 264, 268, 872 P.2d 668, 672 (1994). And, we construe a statute in context with other related provisions and its place in the statutory scheme.

Goulder v. Ariz. Dep't of Transp., Motor Vehicle Div. , 177 Ariz. 414, 416, 868 P.2d 997, 999 (App. 1993).

¶12 The APPA requires an owner to make progress payments to a contractor "on the basis of a duly certified and approved billing or estimate of the work performed and the materials supplied during the preceding thirty day billing cycle." 2000 Ariz. Sess. Laws, ch. 233, § 4. Payment must be made within seven days after the billing or estimate is certified and approved. Id. The "billing or estimate shall be deemed approved and certified fourteen days after the owner receives [it] unless before that time the owner or the owner's agent prepares and issues a written statement detailing those items in the billing or estimate that are not approved and certified." Id. An owner may object to "a billing or estimate or portion of a billing or estimate for unsatisfactory job progress, defective construction work or materials not remedied, disputed work or materials, [or] failure to comply with other material provisions of the construction contract...." Id. "Payment shall not be required pursuant to [the APPA] unless the contractor provides the owner with a billing or estimate for the work performed or the material supplied in accordance with the terms of the construction contract between the parties." Id. Finally, "[a] construction contract shall not alter the rights of any contractor, subcontractor or material supplier to receive prompt and timely progress payments [under the APPA]." Id.

¶13 The Smiths received the final amended PA 19 from SK on May 1, 2012. As noted, they neither objected to the billing within the statutory fourteen-day period, nor paid it within the statutory seven-day period that followed. Although the APPA requires owners and contractors to comply with time limitations, see generally 2000 Ariz. Sess. Laws, ch. 233, § 4, the Smiths argue their compliance was unnecessary in this instance because PA 19 contained work completed outside the thirty-day billing cycle and, therefore, was not a progress payment application under the APPA, but rather a final billing. But that is not the case. After SK submitted PA 19, the Smiths asked for a "final statement" of the remaining amount owed to SK. Further, Robinette issued "The Final Adjusted Contract Sum" more than one month after SK submitted PA 19. PA 19 was, therefore, a progress payment application. However, even though we reach this conclusion, our interpretation of the APPA leads us to further conclude SK was not entitled to relief for any items not falling within the preceding thirty-day billing cycle.

¶14 The APPA unambiguously provides that a contractor must base a progress payment "billing or estimate" on "the work performed and the materials supplied during the preceding thirty day billing cycle." 2000 Ariz. Sess. Laws, ch. 233, § 4. Thus, the plain language necessarily means that the APPA does not allow relief for work performed or materials supplied outside the preceding thirty-day billing cycle. See Farris v. Advantage Capital Corp. , 217 Ariz. 1, ¶ 5, 170 P.3d 250 (2007) ("A statute's plain language is the best indicator of legislative intent."); see also State v. Lychwick , 222 Ariz. 604, ¶ 9, 218 P.3d 1061 (App. 2009) (court ordinarily applies plain language without resorting to other interpretation methods).

¶15 Further, and contrary to SK's assertion, applying the APPA's plain language with regard to the thirty-day billing cycle does not create an absurd result. See Lowing v. Allstate Ins. Co. , 176 Ariz. 101, 103, 859 P.2d 724, 726 (1993) (a statute's language, "where clear and unequivocal, controls [a] statute's meaning unless it leads to absurd or impossible results"); see also Lychwick , 222 Ariz. 604, ¶ 9, 218 P.3d 1061 (recognizing absurdity and impossibility exceptions). Here, in support of its absurdity argument, SK gives the example of an appliance being purchased one month, stored the next month, installed the next month, and then tested as operational the next month. SK, however, ignores the fact that the APPA expressly allows progress payments to include either a "billing or estimate" of "work performed" and "materials supplied." 2000 Ariz. Sess. Laws, ch. 233, § 4. Thus, applying the APPA to SK's example, a contractor would comply with the APPA by submitting estimates of the amount of work performed and materials supplied concerning the appliance within each thirty-day billing cycle.

¶16 Moreover, SK overlooks the demanding standard for finding absurdity. "A result is 'absurd if it is so irrational, unnatural, or inconvenient that it cannot be supposed to have been within the intention of persons with ordinary intelligence and discretion.' " State v. Estrada , 201 Ariz. 247, ¶ 17, 34 P.3d 356 (2001) (quoting Perini Land & Dev. Co. v. Pima County, 170 Ariz. 380, 383, 825 P.2d 1, 4 (1992) ). Thus, finding absurdity contemplates extraordinary circumstances; a court may not disregard a statute's plain language and find absurdity merely because it believes the statute is unwisely enacted, results in awkward procedures, or leads to a harsh result. See Ariz. Const. art. III (Arizona's separation of powers); cf. City of Phoenix v. Butler , 110 Ariz. 160, 162, 515 P.2d 1180, 1182 (1973) (citation omitted) ("[I]t is not the function of the courts to rewrite statutes. The choice of the appropriate wording rests with the Legislature, and the court may not substitute its judgment for that of the Legislature."). Here, considering the plain language of the statute, including the legislature's decision to permit estimates of the work performed and the materials supplied in the preceding thirty-day billing cycle, requiring compliance with the plain language of the APPA's thirty-day billing provision does not lead to an absurd result.

¶17 SK also contends strict interpretation of the thirty-day billing cycle requirement is inconsistent with contractor-subcontractor relations. The APPA does link the owner's progress payments to work done by subcontractors billed in the contractor's payment application. Stonecreek Bldg. Co. v. Shure , 216 Ariz. 36, ¶ 16, 162 P.3d 675 (App. 2007). And, a subcontractor is not obligated to provide the contractor with payment applications limited to the preceding thirty-day billing cycle. 2000 Ariz. Sess. Laws, ch. 233, § 5. Therefore, as provided for by the plain language of the statute, the burden is on the contractor either to estimate the work performed and materials supplied by subcontractors during each thirty-day cycle, or to contractually obligate their subcontractors to submit their respective billings and estimates on time.

¶18 The "primary purpose of [the APPA] is to require an owner to identify and disapprove those items that need to be corrected early in the process so that contractors, subcontractors, and suppliers receive prompt payment for their work." Stonecreek , 216 Ariz. 36, ¶ 20, 162 P.3d 675. As discussed, for contractors to benefit from the APPA, they must comply with the thirty-day billing cycle requirement. SK admitted that PA 19 was submitted "[f]or work that had been completed to the date of that application," and could have been completed in the year and one-half leading up to that date.

None of the items in PA 19 list the dates when the work was performed or the materials supplied, so it is unclear which items, if any, were within the applicable billing cycle. The Smiths identified and SK agreed that $13,744.61 of plumbing work and $17,777 of flooring work included in PA 19 were completed at least before the certificate of occupancy was issued on March 22, 2012, and that PA 19 billed $27,596.80 for appliances that were purchased in 2011. Further, Robinette testified that none of the items billed in PA 19 occurred within the previous thirty-day cycle.

¶19 Neither the APPA, nor Arizona cases discussing it, expressly assign the burden of proof concerning the thirty-day billing cycle requirement. We conclude that the burden of proving compliance with the APPA's thirty-day billing cycle requirement falls on the contractor submitting a payment application. Cf. Yeazell v. Copins , 98 Ariz. 109, 116, 402 P.2d 541 (1965) ("The party who asserts a fact has the burden to establish the fact."). This is consistent with the obligation of the contractor to establish a violation of the APPA. Here, in finding in favor of SK, the trial court found SK "ha[d] proved all the elements required under the statute and the case law to establish a violation of the [APPA]." However, the court did not address the Smiths' thirty-day billing cycle argument. Thus, seeking relief under the APPA, SK met its burden of proving that PA 19 was submitted to the Smiths and not objected to or paid, but failed to prove compliance with the thirty-day billing cycle requirement. And, as noted, PA 19 included many items that were undisputedly outside the thirty-day cycle. Further, SK has failed to present any evidence refuting Robinette's testimony that none of the items billed in PA 19 occurred within the previous thirty-day cycle, only suggesting that maybe "touch-up" and "minor stuff" was done, without mention of its cost.

¶20 Accordingly, we reverse the trial court's judgment in favor of SK on its APPA claim.

Rule 54(b) Judgment

¶21 The Smiths next argue the trial court erroneously granted DC judgment pursuant to Rule 54(b), Ariz. R. Civ. P., arguing that there remained unresolved claims against DC.

¶22 Rule 54(b) provides that if an action involves multiple claims or parties, then "the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines there is no just reason for delay and recites that the judgment is entered under Rule 54(b)." In the context of Rule 54(b), a final judgment is "an ultimate disposition of an individual claim." Davis v. Cessna Aircraft Corp. , 168 Ariz. 301, 304, 812 P.2d 1119, 1122 (App. 1991) (final disposition of individual claim required). Further, a court's Rule 54(b) certification does not give this court jurisdiction on appeal if the judgment is not in fact final. Id. We review de novo a trial court's decision to apply Rule 54(b). Id.

¶23 On three occasions, the Smiths amended their third-party complaint against DC, with the last amendment dated almost three years before trial. The original third-party complaint alleged breach of contract/defective workmanship as count one, professional negligence as count two, and fraudulent misrepresentation as count three. The Smiths only included DC in counts one and three. In subsequent amendments, the Smiths added additional parties and additional claims, but the only counts against DC remained breach of contract/defective workmanship and fraudulent misrepresentation. Ultimately, the Smiths included several additional "claims" against DC in their response to DC's motion for summary judgment regarding fraudulent misrepresentation. These new allegations were conspiracy, concealment, and aiding and abetting. The trial court declined to consider them or any other new allegation, reasoning that the Smiths "had three and one-half years to amend their complaint to add counts ... [and] [t]o permit [the Smiths] to maintain entirely new causes of action against [DC] without proper notice and an informed chance to defend themselves would be grossly unfair." The court then granted DC summary judgment on both counts, and entered judgment in favor of DC pursuant to Rule 54(b).

¶24 At issue is whether any claims against DC other than breach of contract/defective workmanship and fraudulent misrepresentation remained. The Smiths argue additional claims were present in the case since at least the third amended third-party complaint, which they assert contained, at a minimum, claims for negligence, respondeat superior, and negligent misrepresentation. Although language about conspiracy and concealment was contained within the breach of contract/defective workmanship and fraudulent misrepresentation counts, the trial court entered judgment in favor of DC on the entirety of those two counts, which were the only counts directed towards DC. The decision not to consider any additional allegations was within the trial court's discretion. See Walls v. Ariz. Dep't of Pub. Safety , 170 Ariz. 591, 597, 826 P.2d 1217, 1223 (App. 1991). We thus conclude the court did not err in granting Rule 54(b) judgment in favor of DC.

Attorney Fees at Trial

¶25 Finally, the Smiths argue the awards of attorney fees to both SK and DC were unreasonable. They assert SK's award was unreasonable given the fact they prevailed on two of SK's three claims; and, therefore, they claim entitlement to an award of attorney fees. The Smiths argue DC's award was unreasonable because the trial court erroneously concluded the breach of contract and fraudulent misrepresentation claims were irreconcilably intertwined.

SK's Attorney Fees

¶26 We review an award of attorney fees for an abuse of discretion. Orfaly v. Tucson Symphony Soc'y , 209 Ariz. 260, ¶ 18, 99 P.3d 1030 (App. 2004). The successful party to an APPA claim is entitled to costs and reasonable attorney fees. 2000 Ariz. Sess. Laws, ch. 233, § 4. Further, the successful party to a contract action may be awarded reasonable attorney fees on that basis. A.R.S. § 12-341.01(A).

¶27 The trial court found in favor of the Smiths on SK's breach of contract claim, dismissed SK's unjust enrichment claim, and we have reversed the court's judgment in favor of SK on its APPA claim. Therefore, we reverse the award of attorney fees to SK, and remand to the trial court to award the Smiths their reasonable attorney fees.

DC's Attorney Fees

¶28 We review a trial court's decision on the amount of attorney fees awarded pursuant to A.R.S. § 12-341.01 for an abuse of discretion. Rudinsky v. Harris , 231 Ariz. 95, ¶ 27, 290 P.3d 1218 (App. 2012). Section 12-341.01 allows attorney fees for the successful party "[i]n any contested action arising out of a contract" in order to "mitigate the burden of the expense of litigation to establish a just claim or a just defense." The phrase "arising out of a contract" in § 12-341.01 must be read broadly, and "an action is considered to have arisen out of contract when the plaintiff asserted a contract and the defendant successfully proved that no contract existed."

ML Servicing Co. v. Coles , 235 Ariz. 562, ¶ 30, 334 P.3d 745 (App. 2014). An action also arises out of contract when the claim would not exist absent the contract. Id. ¶ 31. Even a tort claim will arise out of a contract "when the tort could not exist 'but for' the breach or avoidance of contract." Ramsey Air Meds, L.L.C. v. Cutter Aviation, Inc. , 198 Ariz. 10, ¶ 27, 6 P.3d 315 (App. 2000).

¶29 The Smiths alleged breach of contract against DC, which brought the matter within § 12-341.01. DC successfully proved no contract existed with the Smiths and successfully defended their fraudulent misrepresentation claim. The trial court awarded DC attorney fees, noting that the defense of one claim could not be separated from the defense of the other. The Smiths argue the court mistakenly concluded that the breach of contract claim was irreconcilably intertwined with the fraudulent misrepresentation claim and, therefore, DC's fee award should have been limited to the breach of contract defense. They further assert the facts necessary to grant summary judgment on the breach of contract claim were undisputed and available to all parties when the case started three and one-half years earlier. Thus, the Smiths essentially argue, DC should have brought its summary judgment motion sooner.

¶30 Here, we must determine whether the fraudulent misrepresentation claim could not exist but for the alleged contract. See ML Servicing , 235 Ariz. 562, ¶ 31, 334 P.3d 745. The Smiths alleged that DC breached a contractual agreement with them by failing to pour the concrete according to plans and specifications, and by knowingly performing and concealing defective work. Their fraudulent misrepresentation claim was based on the allegation that DC knew it performed defective work under the contract and did not intend to cure the defects in the concrete according to the contractually required plans and specifications. Thus, both the breach of contract claim and the fraudulent misrepresentation claim were intertwined in the counts against DC. The Smiths' fraudulent misrepresentation claim could not exist but for the alleged contract. Accordingly, the trial court did not abuse its discretion in awarding DC attorney fees.

Attorney Fees on Appeal

¶31 All parties request attorney fees on appeal. The Smiths and DC request attorney fees and costs pursuant to Rule 21(a), Ariz. R. Civ. App. P., and A.R.S. §§ 12-341 and 12-341.01. We award the Smiths their reasonable attorney fees incurred on appeal with respect to SK's claims against the Smiths. DC prevailed against the Smiths in this appeal; therefore, we award DC reasonable attorney fees against the Smiths. The Smiths may recover taxable costs against SK, and DC may recover taxable costs against the Smiths, each pursuant to A.R.S. § 12-341, upon compliance with Rule 21(b), Ariz. R. Civ. App. P. We deny SK's request for attorney fees.

Disposition

¶32 For the foregoing reasons, we affirm the trial court's Rule 54(b) judgment in favor of DC and award of attorney fees to DC, reverse the court's judgment that the Smiths violated the APPA and the court's award of attorney fees to SK, and remand to determine the Smiths' reasonable attorney fees at trial.

      Among other things, PA 19 requested payment for wrought iron railings, electrical work, area drains, a garden gate, fireplace facing, doors and door frames, tile surrounds, flooring, appliances, final cleaning, and jobsite cleanup.

      The legislature has amended the APPA since its original enactment, but the parties assert, and we agree, that in this instance the initial version is applicable because the project was designed before January 1, 2011, and the construction contract was entered before January 1, 2012. See 2010 Ariz. Sess. Laws, ch. 337, § 6. Accordingly, the statutory references in this opinion refer to provisions within the initial version of the APPA. The amendments do not affect our interpretation of the thirty-day billing cycle requirement discussed below.

      Failure to comply with the statutory requirements of the APPA does not necessarily deprive the contractor of all remedy. A non-compliant contractor may be entitled at law by its contract or perhaps even in equity to payment for work performed and materials supplied.

      The Smiths also argue PA 19 was insufficient because SK sent it to Robinette rather than the Smiths as purportedly directed. The Smiths have waived this argument on appeal because they raised it for the first time in their reply brief. See Ariz. R. Civ. App. P. 13(c) ; see also Dawson v. Withycombe , 216 Ariz. 84, ¶ 91, 163 P.3d 1034 (App. 2007).

      The APPA began as Senate Bill 1549, and the fact sheet prepared by senate staff describes its purpose as a bill that "[e]stablishes time frames and procedures for the periodic payment of contractors, alters the time frame for the periodic payment of subcontractors and permits work stoppage for failure of a contractor or subcontractor to receive timely payment." S. Rev. Fact Sheet for S.B. 1549, 44th Leg., 2d Reg. Sess. (Ariz. Feb. 16, 2000).

      PA 19 was originally submitted on March 28, 2012, resubmitted on April 30, 2012, and then submitted for the last time May 1, 2012. SK withdrew the original at Robinette's request to negotiate some changes and discounts.

      The Smiths later asserted that each of these counts contained additional allegations of negligence, respondeat superior, and negligent misrepresentation.

      A claim for relief requires "a short and plain statement of the claim showing that the pleader is entitled to relief." Ariz. R. Civ. P. 8(a)(2). The purpose of Rule 8 is to "give the opponent fair notice of the nature and basis of the claim and indicate generally the type of litigation involved." Cullen v. Auto-Owners Ins. Co. , 218 Ariz. 417, ¶ 6, 189 P.3d 344 (2008) (quoting Mackey v. Spangler , 81 Ariz. 113, 115, 301 P.2d 1026 (1956) ). The Smiths explicitly pled negligence against other parties by distinctly making it a separate count, but did not do so against DC. And, although the Smiths asserted conspiracy, concealment, and aiding and abetting claims against DC in the Smiths' response to DC's motion for summary judgment regarding fraudulent misrepresentation, the response was not a pleading. See Ariz. R. Civ. P. 7.

      The Smiths challenged the applicability of § 12-341.01 for the first time in a reply brief. Accordingly, we decline to consider this issue. See Ariz. R. Civ. App. P. 13(c) ("[R]eply brief ... must be strictly confined to rebuttal of points made in the appellee's answering brief."); Phelps v. Firebird Raceway, Inc. , 210 Ariz. 403, n.1, 111 P.3d 1003 (2005).


source: Caselaw Access Project

license: Public Domain

text:
    Crystal Lynn JOHNSON, Petitioner v. The PEOPLE of the State of Colorado, Respondent.
    Supreme Court Case No. 17SC120
    Supreme Court of Colorado.
    March 11, 2019 Rehearing Denied March 25, 2019
    Attorneys for Petitioner: Megan A. Ring, Public Defender, John Plimpton, Deputy Public Defender, Denver, Colorado
    Attorneys for Respondent: Philip J. Weiser, Attorney General, Carmen Moraleda, Assistant Attorney General, Denver, Colorado
    En Banc
   JUSTICE BOATRIGHT delivered the Opinion of the Court.

¶1 In this appeal, we consider whether the court of appeals erred when it held that the trial court's extraneous jury instruction concerning reasonable doubt did not unconstitutionally lower the prosecution's burden of proof. During voir dire, after giving the standard definition of reasonable doubt, the trial court described how hesitating to act relates to having a reasonable doubt. While the trial court's extraneous "hesitate to act" instruction was improper, there is not a reasonable likelihood that it prejudiced the defendant. The instruction was nonsensical, given only once during voir dire, not referenced by either party at any time, and flanked by the proper instruction regarding the burden of proof at the beginning and end of the trial. Therefore, we hold that the instruction did not lower the prosecution's burden of proof in violation of due process, and we affirm the judgment of the court of appeals.

I. Facts and Procedural History

¶2 After observing Crystal Johnson conduct an apparent drug transaction, police officers followed her vehicle and initiated a traffic stop. Officers searched Johnson's vehicle and seized methamphetamine and a digital scale. Her four-year-old daughter was in the car at the time. Johnson was then arrested and charged with possession of more than two grams of methamphetamine, possession with intent to distribute, possession of drug paraphernalia, and child abuse.

¶3 Prior to jury selection, the court asked the parties if they had any matters to discuss. After discussing other preliminary matters, defense counsel, based on previous experience before this same judge, requested "that the Court not explain hesitancy to act as a person cannot possibly find the Defendant not guilty." Following a brief exchange between the court and defense counsel, the court denied the request. After the court and the parties finished discussing the preliminary matters, the court brought out the potential jurors to begin jury selection.

¶4 During jury selection, the court read several instructions, which it framed as six "bedrock" principles of the American criminal justice system. One of those instructions was the pattern instruction for proof beyond a reasonable doubt. Specifically, the court stated that a reasonable doubt is "a doubt that is not vague, speculative, or imaginary, but such a doubt as would cause reasonable people to hesitate to act in matters of importance to themselves." Then, the court elaborated on what the phrase "hesitate to act" means:

I've heard some lawyers say, "Well if you get back in the jury room and you can't come to an immediate decision you have hesitated to act." Well, that's just not true .... [H]esitate to act doesn't mean if you get back in the jury room and you don't come to an instantaneous verdict that you have hesitated to act. Instead what it means is that after you evaluate all the evidence and you evaluate whether or not any doubts are reasonable or not, and you talk to everybody else, and you think about it, and you deliberate, you would find Ms. Johnson guilty only if, after hearing all of that evidence, you just can't bring yourself to do it. You just have to hesitate. It's not there. You can't find her guilty because the quality or quantity of evidence just doesn't let you. That's when you've hesitated to act.

After jury selection, Johnson stood trial for three days. At the conclusion of the trial, the court provided the jury with the pattern reasonable doubt instruction, both verbally and in writing. The court did not reference its "hesitate to act" instruction again, nor did the attorneys. The jury found Johnson guilty on all three drug charges and not guilty on the child abuse charge.

¶5 Johnson appealed her conviction. As relevant here, she argued that the court's "hesitate to act" instruction lowered the prosecution's burden of proof in violation of due process. The court of appeals disagreed with Johnson in a split decision. People v. Johnson , No. 14CA0071, 2017 WL 390911 (Colo. App. Jan. 26, 2017). Although the majority described the trial court's "hesitate to act" instruction as "confusing" and "nonsensical," it ultimately held that, because the instruction was given only once and was "flanked by the proper reasonable doubt jury instruction," there was not a reasonable likelihood that the jury understood and applied the "hesitate to act" definition in a manner that lowered the prosecution's burden. Id. at ¶¶ 12-13, 15.

¶6 Judge Ashby dissented. She reasoned that the trial court's "hesitate to act" instruction unconstitutionally lowered the prosecution's burden for four reasons: (1) the trial court instructed "the jury to find Johnson guilty if the evidence was unconvincing enough to make the jury hesitate"; (2) the trial court "defined hesitating to act as being unable to act"; (3) the instruction "restricted the circumstances under which the jury could find Johnson not guilty to those in which the evidence did not permit a finding of guilt"; and (4) the instruction was the only time that "hesitate to act" was defined, "[a]nd appellate courts must presume that the jury followed all of the trial court's instructions." Id. at ¶¶ 31-35. After determining that the trial court erred in giving the "hesitate to act" instruction, Judge Ashby asserted that the error was structural and necessitated automatic reversal. Id. at ¶ 43.

¶7 We granted certiorari to determine whether the trial court's definition of "hesitate to act" lowered the prosecution's burden of proof in violation of due process. We now hold that the instruction did not lower the prosecution's burden of proof in violation of due process, and we affirm the decision of the court of appeals.

II. Standard of Review

¶8 We review de novo the question of whether jury instructions accurately informed the jury of the law. People v. Waller , 2016 COA 115, ¶ 55, 412 P.3d 866, 877. An instruction that lowers the prosecution's burden of proof below reasonable doubt constitutes structural error and requires automatic reversal. Sullivan v. Louisiana , 508 U.S. 275, 281-82, 113 S.Ct. 2078, 124 L.Ed.2d 182 (1993).

III. Analysis

¶9 We must determine whether the trial court's "hesitate to act" instruction lowered the prosecution's burden of proof in violation of due process. To make this determination, we first look to the reasonable doubt standard and its attendant due process considerations. Then, we examine the law on ambiguous jury instructions. Finally, we conclude that the "hesitate to act" instruction was too isolated and nonsensical to have created a reasonable likelihood that the jury understood and applied the instruction, and we therefore hold that the instruction did not lower the prosecution's burden in violation of due process.

A. Reasonable Doubt

¶10 In criminal cases, the prosecution is required to "prove every factual element necessary to constitute the crime charged beyond a reasonable doubt." Vega v. People , 893 P.2d 107, 111 (Colo. 1995). This requirement "dates at least from our early years as a Nation" and is nothing short of "indispensable." In re Winship , 397 U.S. 358, 361, 364, 90 S.Ct. 1068, 25 L.Ed.2d 368 (1970). The U.S. Supreme Court has held that the Due Process Clause mandates the universal application of the reasonable doubt standard in criminal prosecutions. See id. at 364, 90 S.Ct. 1068 ("[W]e explicitly hold that the Due Process Clause protects the accused against conviction except upon proof beyond a reasonable doubt of every fact necessary to constitute the crime with which he is charged."). While the standard's application is universally mandated, courts retain some flexibility in defining what constitutes a reasonable doubt. Victor v. Nebraska , 511 U.S. 1, 5, 114 S.Ct. 1239, 127 L.Ed.2d 583 (1994) ("[S]o long as the court instructs the jury on the necessity that the defendant's guilt be proved beyond a reasonable doubt ... the Constitution does not require that any particular form of words be used ....").

¶11 Courts have instructed juries on the reasonable doubt standard dating back as early as 1827. See Henderson v. Poindexter's Lessee , 25 U.S. 530, 533, 12 Wheat. 530, 6 L.Ed. 718 (1827) ("[I]f, on the whole matter, the jury should have a reasonable doubt, then their verdict should be for the defendant."). In Commonwealth v. Webster , 59 Mass. 295 (1850), the Supreme Judicial Court of Massachusetts arguably presented the first widely accepted definition of reasonable doubt in criminal cases. Victor , 511 U.S. at 8, 114 S.Ct. 1239 ("The Webster charge is representative of the time when 'American courts began applying [the beyond a reasonable doubt standard] in its modern form in criminal cases.' ") (quoting Apodaca v. Oregon , 406 U.S. 404, 412 n.6, 92 S.Ct. 1628, 32 L.Ed.2d 184 (1972) ). In Webster , the court defined "reasonable doubt" as "that state of the case, which, after the entire comparison and consideration of all the evidence, leaves the minds of jurors in that condition that they cannot say they feel an abiding conviction, to a moral certainty , of the truth of the charge." 59 Mass. at 320 (emphasis added). Over time, the Webster "moral certainty" standard fell out of favor, while the "hesitate to act" standard gained popularity. Victor , 511 U.S. at 16, 20, 114 S.Ct. 1239 ("[W]e do not condone the use of the phrase [moral certainty] .... In any event, the instruction provided an alternative definition of reasonable doubt: a doubt that would cause a reasonable person to hesitate to act. This is a formulation we have repeatedly approved ....").

¶12 The evolution of the reasonable doubt standard in Colorado has traced a somewhat similar path, although it appears that Colorado courts never fully embraced the Webster standard. See Dougherty v. People , 1 Colo. 514, 523 (1872) ("The court declined to give this [ Webster ] instruction as drawn by prisoner's counsel, but, in lieu thereof, charged the jury that a reasonable doubt is that state of the mind on which, upon consideration of all the facts proved, the jury cannot say I am satisfied of the prisoner's guilt."). Much like the evolution in the federal courts, eventually the "hesitate to act" definition of reasonable doubt became part of the standard instruction in Colorado. See Alvarez v. People , 653 P.2d 1127, 1130 n.7 (Colo. 1982) ("Reasonable doubt ... is a doubt which is not a vague, speculative or imaginary doubt, but such a doubt as would cause reasonable men to hesitate to act in matters of importance to themselves.").

¶13 The U.S. Supreme Court has cautioned that further attempts by courts or parties to define "reasonable doubt" do not provide clarity. See Holland v. United States , 348 U.S. 121, 140, 75 S.Ct. 127, 99 L.Ed. 150 (1954) ("Attempts to explain the term 'reasonable doubt' do not usually result in making it any clearer to the minds of the jury ....") (quoting Miles v. United States , 103 U.S. 304, 312, 26 L.Ed. 481 (1880) ); see also Victor , 511 U.S. at 22, 114 S.Ct. 1239 ("[T]rial courts must avoid defining reasonable doubt so as to lead the jury to convict on a lesser showing than due process requires."). A division of our court of appeals also cited Holland for that proposition but stated that the proper inquiry is whether the contested language "caused the jury to apply the reasonable doubt standard in a way that violates due process." People v. Gomez-Garcia , 224 P.3d 1019, 1025 (Colo. App. 2009). Because the prosecution has the burden of proving every charge beyond a reasonable doubt, any jury instruction on reasonable doubt that creates "an improper lessening of the prosecution's burden of proof" violates "a defendant's constitutional right to due process." See People v. Garcia , 113 P.3d 775, 784 (Colo. 2005). As finder of fact, the jury is responsible for proper application of the reasonable doubt standard and thus requires proper instruction from the court to fulfill its duty. See Griego v. People , 19 P.3d 1, 7 (Colo. 2001) (reasoning that a jury "can only fulfill its constitutionally mandated role of finding each element beyond a reasonable doubt" when that jury has been properly instructed).

B. Jury Instructions

¶14 When reviewing an ambiguous jury instruction like the one here, we ask whether there is a reasonable likelihood that the jury applied the contested instruction in an unconstitutional manner. Estelle v. McGuire , 502 U.S. 62, 72, 112 S.Ct. 475, 116 L.Ed.2d 385 (1991). We do not consider jury instructions in isolation; rather, we consider them "in the context of the instructions as a whole ...." Id. (citing Cupp v. Naughten , 414 U.S. 141, 147, 94 S.Ct. 396, 38 L.Ed.2d 368 (1973) ). In the context of the entire record, if the trial court properly instructed the jury on the law-even with "objectionable language ... [in] the trial court's elaboration of the reasonable doubt instruction"-then there is no violation of due process. People v. Sherman , 45 P.3d 774, 779 (Colo. App. 2001).

C. Application

¶15 We must determine whether the trial court's extraneous "hesitate to act" instruction lowered the prosecution's burden in violation of due process. We conclude that it did not for two reasons: (1) the trial court gave proper instructions defining proof beyond a reasonable doubt and the prosecution's burden both before the extraneous instruction and at the close of evidence; and (2) the "hesitate to act" instruction was too nonsensical to be understood by the jury.

¶16 In the context of the entire record, the trial court properly instructed the jury on the law. During voir dire, directly preceding the extraneous "hesitate to act" instruction, the trial court instructed the jury on the definition of reasonable doubt using the exact language from the Colorado pattern jury instructions. See COLJI-Crim. E:03 (2018). And just prior to that, the trial court properly instructed the jury on both the prosecution's burden and the presumption of innocence. Similarly, at the end of trial, the trial court properly instructed the jury on reasonable doubt, the presumption of innocence, and the burden of proof. But that is not the end of the inquiry. As Judge Ashby's dissent accurately states, we must presume that the jury followed all of the court's instructions. In order for jurors to follow an instruction, however, they must be able to understand it.

¶17 When evaluating whether the jury could have understood the court's "hesitate to act" instruction, it is important to note that the beginning of the instruction is logical and not legally infirm. The beginning of the instruction merely explains that engaging in deliberations does not equate to reasonable doubt:

[H]esitate to act doesn't mean if you get back in the jury room and you don't come to an instantaneous verdict that you have hesitated to act.

That is accurate. The continuation of the instruction also accurately explains that the jury should engage in deliberations with everyone participating:

Instead what it means is that after you evaluate all of the evidence and you evaluate whether or not any doubts are reasonable or not, and you talk to everybody else, and you think about it, and you deliberate, you would find ...

But at the end of the instruction, the court attempts to define "hesitate to act," and that is where it becomes problematic:

[Y]ou would find Ms. Johnson guilty only if, after hearing all of that evidence, you just can't bring yourself to do it. You just have to hesitate. It's not there. You can't find her guilty because the quality or quantity of evidence just doesn't let you. That's when you've hesitated to act.

That language is indecipherable. Even with the benefit of a transcript and the luxury that time gives us to parse every word, it remains unintelligible. Therefore, because the problematic portion of the "hesitate to act" instruction is unintelligible, we cannot presume that the jury understood it.

¶18 In sum, the extraneous "hesitate to act" instruction cannot have prejudiced Johnson. We note that the trial court provided the instruction to the jury verbally and only once. It was not mentioned or referenced again throughout the entirety of the proceedings, including closing arguments. The court read the correct definitions of reasonable doubt and the burden of proof immediately preceding the improper verbal instruction. Additionally, the court correctly instructed the jury numerous times regarding the presumption of innocence, reasonable doubt, and the burden of proof. Finally, it bears repeating that the instruction is nonsensical and simply too confusing for the jury to follow. Hence, we hold that the instruction did not lower the prosecution's burden in violation of due process.

IV. Conclusion

¶19 As the Supreme Court cautioned in Holland , attempts to further define reasonable doubt do not provide clarity. Even if well-intentioned, this case demonstrates that point. Nevertheless, the trial court did not deprive Johnson of due process. Accordingly, we affirm the judgment of the court of appeals.

      We granted certiorari to review the following issue:
      1. Whether the trial court's definitions of hesitation to act lowered the prosecution's burden of proof in violation of due process.

      Although we conclude that certain language is not legally infirm, we do not condone any part of this instruction.

      In their briefing, both parties assert that the court meant to say, "not guilty" when it said "guilty," and that this is the only way the instruction makes any sense. Even if the court meant to say "not guilty," the instruction remains indecipherable. Both parties also raised the possibility of a transcription error, but this is not established in the record and, in any event, does not change the analysis here.


author: Opinion by CHIEF JUDGE LOEB

text:
    The PEOPLE of the State of Colorado, Petitioner,
    IN the INTEREST OF D.Z.B., Juvenile-Appellee, and Concerning Arapahoe County Department of Human Services, Appellant.
    Court of Appeals No. 14CA2167
    Colorado Court of Appeals, Division VI.
    Announced February 23, 2017
    Douglas K. Wilson, Colorado State Public Defender, Ryann S. Hardman, Deputy State Public Defender, Denver, Colorado, for Juvenile-Appellee
    Ronald Carl, County Attorney, Michael Valentine, Deputy County Attorney, Danielle Newman, Assistant County Attorney, Aurora, Colorado, for Appellant
   Opinion by CHIEF JUDGE LOEB

¶ 1 The Arapahoe County Department of Human Services (the Department) appeals the juvenile court's order placing D.Z.B., a juvenile offender, in a Department-managed residential child care facility in lieu of bond while the juvenile's adjudication was pending. The Department does not appeal D.Z.B.'s final adjudication as delinquent or his ultimate sentence to the same residential facility. Instead, the Department asserts that the court did not have the authority to place D.Z.B. in the facility preadjudication and in lieu of bond over the Department's objection. Because we conclude that the Department lacks standing, we dismiss the Department's appeal and express no opinion on the merits of the Department's appeal.

I. Background

¶ 2 The Department requested that the juvenile court certify the court file for D.Z.B.'s juvenile proceedings for appeal, but did not request any relevant transcripts. Thus, the facts below are taken from the records in the court file.

¶ 3 D.Z.B. had a complex history with the Department and the juvenile court beginning in 2012. Prior to the history recited below, the juvenile court placed D.Z.B. in the care of the Department in lieu of bond on multiple occasions. He repeatedly violated the court-imposed conditions of his bond, and the juvenile court placed him in increasingly supervised services (i.e. from in-home care, to nonresidential treatment, to foster care, etc.).

¶ 4 As relevant here, in early 2014, D.Z.B. pleaded guilty in two delinquency cases. The juvenile court adjudicated him delinquent and sentenced him to probation that included a placement at Jefferson Hills, a residential child care and treatment facility managed by the Department. Apparently, this was the first time D.Z.B. had been placed in a residential treatment facility. D.Z.B. entered Jefferson Hills in February 2014, and he was diagnosed with significant mental health and developmental issues during that stay.

¶ 5 D.Z.B. subsequently began treatment and therapy and did well at Jefferson Hills. He was successfully discharged from the facility into the care of his father and, despite the recommendation from Jefferson Hills, D.Z.B. received no in-home services following his release.

¶ 6 Within two months of his release from Jefferson Hills, D.Z.B. was charged with three additional delinquent acts. D.Z.B. was still on probation at this time and, consequently, the prosecution sought to revoke or modify probation in his two prior cases. D.Z.B. was appointed a public defender and a Guardian Ad Litem (GAL) for his pending delinquency and probation revocation matters. The public defender requested that the Department investigate treatment and confinement options for D.Z.B. at a pretrial conference on August, 12, 2014.

¶ 7 At a hearing on September 5, 2014, the GAL and defense counsel argued for residential treatment both prior to adjudication and as a sentence if D.Z.B. was adjudicated delinquent.

¶ 8 At the same hearing, in response to defense counsel's earlier request for treatment options, the Department stated through counsel that D.Z.B. had been accepted to four residential child care facilities. However, at that time, the Department objected to D.Z.B. being placed in one of the child care facilities in lieu of bond and recommended that he be placed in the Division of Youth Corrections if he were ultimately adjudicated delinquent. The Department further argued that the juvenile court did not have the authority to order the Department to place D.Z.B. in a residential child care facility prior to his adjudication when the Department objected to such a placement.

¶ 9 The juvenile court ordered briefing on the issue of the court's authority to place D.Z.B. in a residential child care facility preadjudication over the Department's objection. The GAL, defense counsel, and the Department filed briefs with the juvenile court one week later on September 12. The prosecution apparently took no stance as it did not file a brief.

¶ 10 On September 17, the juvenile court held a hearing regarding preadjudication placement. The minute order in the record reflects that the juvenile court allowed those present (the district attorney, defense counsel, the GAL, and counsel for the Department) to make a record regarding their respective views on placement. As previously noted, the transcripts from the court's hearings are not part of the record on appeal. However, we assume that the Department, D.Z.B., and the GAL made arguments consistent with their briefs. At the conclusion of the hearing, the juvenile court issued a minute order that "placement would be in lieu of bond to [the Department] at an appropriate residential child care facility as soon as placement is available."

¶ 11 On September 19, the juvenile court signed a temporary custody order, referencing its placement and bond order from September 17, and placed D.Z.B. in the custody of the Department effective on September 22, 2014, when placement at Jefferson Hills was predicted to become available.

¶ 12 At some point, the Department requested a written order from the juvenile court regarding the court's ruling that it had the authority to order placement with the Department in lieu of bond. The court issued a detailed written order on September 22, 2014, concluding that it had the statutory authority to place D.Z.B. in lieu of bond despite the Department's objection; finding that it was in the best interests of D.Z.B. and the community to order such a placement; and placing D.Z.B. in Jefferson Hills in lieu of bond.

¶ 13 On October 16, the juvenile court adjudicated D.Z.B. delinquent and sentenced him to probation on the condition that he continue treatment at Jefferson Hills.

¶ 14 The Department now appeals the juvenile court's September 22 written order concluding that the court had the authority to place D.Z.B. in Jefferson Hills prior to adjudication and in lieu of bond over the Department's objection.

II. Discussion

¶ 15 Because of the procedural posture of this case, the public defender's office is defending the juvenile court's September 22 order even though the outcome of this appeal will have no practical effect on D.Z.B.

¶ 16 In its answer brief, the public defender proffers five threshold issues that it asserts necessitate the dismissal of this appeal: mootness; untimeliness of the Department's appeal; an insufficient record for appeal; the lack of a final appealable order; and the Department's lack of standing to prosecute the appeal.

¶ 17 Because we agree that the Department lacks standing, we do not address the remaining threshold issues. We also express no opinion on the merits of the Department's appeal, and do not address those issues as well.

A. Standard of Review

¶ 18 A court does not have jurisdiction over a case unless the plaintiff has standing to bring it. E.g. , First Comp Ins. v. Indus. Claim Appeals Office , 252 P.3d 1221, 1222 (Colo. App. 2011). Therefore, we must first determine whether the Department has standing before we can address the merits of its appeal. See id. If the Department does not have standing, we must dismiss the appeal. Id.

¶ 19 Standing is a threshold jurisdictional issue that can be raised at any time. Ainscough v. Owens , 90 P.3d 851, 855 (Colo. 2004) ; Wibby v. Boulder Cty. Bd. of Cty. Comm'rs , 2016 COA 104, ¶ 9, 409 P.3d 516.

¶ 20 Standing is a question of law that this court reviews de novo. E.g., Hawg Tools, LLC v. Newsco Int'l Energy Servs., Inc. , 2016 COA 176M, ¶ 47, 411 P.3d 1126.

B. Law

¶ 21 To establish standing, an appellant must demonstrate that (1) it suffered injury in fact and (2) the injury was to a legally protected interest. First Comp Ins. , 252 P.3d at 1223.

¶ 22 An injury that is overly indirect or incidental to the action is not sufficient. Id. Instead, the injury prong of the standing analysis requires a "concrete adverseness which sharpens the presentation of issues that parties argue to the courts." Id. (quoting Ainscough , 90 P.3d at 856 ).

¶ 23 "Whether the plaintiff's alleged injury was to a legally protected interest 'is a question of whether the plaintiff has a claim for relief under the constitution, the common law, a statute, or a rule or regulation.' " Barber v. Ritter , 196 P.3d 238, 246 (Colo. 2008) (quoting Ainscough , 90 P.3d at 856 ).

¶ 24 When, as here, an appellant brings a claim under a statute, the standing inquiry turns on whether the statutory provision "can properly be understood as granting persons in the [appellant]'s position a right to judicial relief." Vickery v. Evelyn V. Trumble Living Trust , 277 P.3d 864, 868 (Colo. App. 2011) (quoting Pomerantz v. Microsoft Corp. , 50 P.3d 929, 932 (Colo. App. 2002) ).

¶ 25 There are three factors to consider when determining whether a statute confers standing to a particular plaintiff: "(1) whether the statute specifically creates such a right in the plaintiff; (2) whether there is any indication of legislative intent to create or deny such a right; and (3) whether it is consistent with the statutory scheme to imply such a right." First Comp Ins. , 252 P.3d at 1223 (quoting Olson v. City of Golden , 53 P.3d 747, 752 (Colo. App. 2002) ); see also Taxpayers for Pub. Educ. v. Douglas Cty. Sch. Dist. , 2015 CO 50, ¶ 15, 351 P.3d 461.

¶ 26 Under certain circumstances, a nonparty to a civil action can have standing to prosecute an appeal. See, e.g. , People in Interest of C.A.G. , 903 P.2d 1229, 1233 (Colo. App. 1995). Generally speaking, a nonparty must still have suffered an injury in fact, and the injury must be related to a legally protected interest. See, e.g. , First Comp Ins. , 252 P.3d at 1222. Further, "[i]f, following entry of final judgment , it appears that the non-party was substantially aggrieved by the disposition of the case in the trial court, a non-party has standing to appeal." C.A.G. , 903 P.2d at 1233 (emphasis added); see also Miller v. Clark , 144 Colo. 431, 432, 356 P.2d 965, 966 (1960).

¶ 27 The word "aggrieved" refers to a substantial grievance such as the denial to the party of some claim of right, either property or person, or the imposition upon him or her of some burden or obligation. AMCO Ins. Co. v. Sills , 166 P.3d 274, 275-76 (Colo. App. 2007). Thus, not every nonparty that is simply adversely affected by a judgment is substantially aggrieved, and, thus, every nonparty who has a grievance does not necessarily have standing to appeal. Id.

C. Analysis

¶ 28 In its opening brief, the Department anticipated that standing would be an issue on appeal and stated that although it was not a party to the delinquency proceedings, it had standing to prosecute the appeal because "the order granting legal custody of D.Z.B. to the Department and requiring the Department to place D.Z.B. in lieu of bond, thereby incurring the costs of placement, creates sufficient cognizable interest to allow the Department to seek review of the [juvenile court] order." The Department thus appears to argue that the cost of preadjudication placement is the injury in fact or substantial grievance that gives it standing. In support of its argument, the Department heavily relies on C.A.G. , 903 P.2d 1229, for the proposition that a custody order in favor of a county department of human services confers standing on the Department.

¶ 29 We disagree with the Department's contentions and conclude that, on the record and under the circumstances here, the Department does not have standing to prosecute this appeal. In reaching this conclusion, we distinguish the facts here from those described in C.A.G.

1. The Department Was a Nonparty

¶ 30 Although not dispositive, we start with the Department's concession that it is not a party to the delinquency actions against D.Z.B. It appears from the minute order on September 5, 2014, that the Department only appeared at the hearing because defense counsel requested that it consider preadjudication placement options for D.Z.B. It had no other role or interest in the outcome of the delinquency actions against D.Z.B.

¶ 31 Even after filing a brief in support of its position that the juvenile court did not have authority to place D.Z.B. over the Department's objection prior to adjudication, the Department was not a party to the delinquency action and continued to have no interest in the outcome of the case.

¶ 32 To have standing, the Department must, therefore, show that any injury it sustained as a result of the juvenile court's actions was not a mere adverse effect, but a substantial grievance. See AMCO Ins. Co. , 166 P.3d at 275.

2. Injury in Fact

¶ 33 The Department's alleged injury, the cost of placing D.Z.B. in Jefferson Hills for less than one month, is, in our view, incidental to D.Z.B.'s adjudication. See First Comp Ins. , 252 P.3d at 1223 (for a party to have standing, its injury in fact cannot be indirect or incidental to the action).

¶ 34 The Children's Code requires the state department of human services (DHS) to oversee the administration of juvenile programs and the delivery of services for juveniles. § 19-2-202, C.R.S. 2016. In the juvenile justice context, the Children's Code also requires DHS to establish and operate facilities necessary for the care, treatment, and rehabilitation of juveniles legally committed to its custody. § 19-2-403, C.R.S. 2016. The Department is equally tasked with these responsibilities because county departments of human services are agents of DHS and are charged with the administration of programs in their respective counties in accordance with DHS's rules and regulations. § 26-1-118(1), C.R.S. 2016 ("The county departments ... shall serve as agents of [DHS] and shall be charged with the administration of public assistance and welfare and related activities in the respective counties in accordance with the rules and regulations of [DHS]."). In other words, as a county department of human services, the Department is a "functional division[ ] of [DHS] for the convenient administration of the state program and [is] not [an] independent entit[y] separate and distinct from the state." Wigger v. McKee , 809 P.2d 999, 1004 (Colo. App. 1990) (quoting Nadeau v. Merit Sys. Council , 36 Colo.App. 362, 365, 545 P.2d 1061, 1063 (1975) ).

¶ 35 Therefore, the cost of placing D.Z.B. at Jefferson Hills while his adjudication was pending directly arises from the Department's statutory functions under the Colorado Children's Code, sections 19-1-101 to 19-7-103, C.R.S. 2016, and the Colorado Human Services Code, sections 26-1-101 to 26-23-105, C.R.S. 2016. The obligation and cost of caring for D.Z.B. at Jefferson Hills is incidental to his delinquency action because the Department has a statutory duty to care for and house children removed from their homes in delinquency actions. See AMCO Ins. Co. , 166 P.3d at 275-76 (when a judgment exposes a nonparty to obligations not created by the judgment, the nonparty does not have standing); cf. People v. Padilla-Lopez , 2012 CO 49, ¶ 20, 279 P.3d 651 (El Paso County Department of Human Services is not a victim, for purposes of restitution, in a child abuse case; the county department was not "aggrieved" by "having to provide foster care and counseling" to the child victim because "those costs are suffered by [the county department] because of [the county department]'s statutory duty to provide 'necessary shelter, sustenance, and guidance' to dependent and neglected children." (quoting § 26-1-201(1)(f), C.R.S. 2011 )).

¶ 36 Moreover, the Department has not shown an injury here. The record does not provide any information as to the costs associated with D.Z.B.'s preadjudication placement in Jefferson Hills. For example, we do not know how Jefferson Hills is funded (i.e. payment per client, payment for a certain number of beds regardless of occupation, payment in a monthly rate assuming 100% occupancy, etc.); we do not know how much it cost, if anything, to house D.Z.B. in Jefferson Hills for less than one month (September 22 to October 16) before he was adjudicated and sentenced. And, significantly, we do not know if the Department, DHS, or some combination was responsible for paying for D.Z.B.'s preadjudication placement. Thus, the Department's allegation that it was "significantly aggrieved" by the costs incurred by placement is a conclusory statement and devoid of support in the record. And, even if the costs were proven, costs of temporary placement are hardly the type of injury that "sharpens the presentation of issues," First Comp Ins. , 252 P.3d at 1223 (quoting Ainscough , 90 P.3d at 856 ), in an adjudication action because such costs had no bearing on the outcome of the final adjudication or the sentence and treatment that D.Z.B. received as part of his adjudication.

3. Injury to a Legally Protected Interest

¶ 37 Even if the Department had shown an injury in fact that was a substantial grievance directly related to this delinquency action, we conclude the injury was not to a legally protected interest.

¶ 38 The Department argued below and argues on appeal that the juvenile court did not have authority under the Children's Code to order a preadjudication placement with the Department in lieu of bond over the Department's objection. Thus, it is making a statutorily based argument allegedly supported by the Children's Code. When a plaintiff makes a claim based on a statute, that statute must confer standing upon the plaintiff to do so. See Taxpayers for Pub. Educ. , ¶15 ; Barber , 196 P.3d at 246 ; First Comp Ins. , 252 P.3d at 1223. We, therefore, must consider whether the Children's Code can properly be understood to grant the Department, a county human services agency, a right to judicial relief in a delinquency action. Taxpayers for Pub. Educ. , ¶ 15 ; Vickery , 277 P.3d at 868. In making that determination, we consider whether the Children's Code specifically confers standing to the Department, whether the Children's Code gives any indication of legislative intent to create or deny standing to the Department, and whether it would be consistent with the statutory scheme to infer the Department's standing. See First Comp Ins. , 252 P.3d at 1223.

¶ 39 First, the Children's Code does not expressly confer standing to the Department or DHS to intervene in a juvenile court's determination for preadjudication placement. As the Department points out, the Children's Code rarely references county human services departments. Moreover, any such references are in the context of custodians of juveniles after adjudication and sentencing. See, e.g. , § 19-2-906.5, C.R.S. 2016.

¶ 40 Second, the legislative intent of the Children's Code is, among other things,

[t]o secure for each child subject to these provisions such care and guidance ... as will best serve his welfare and the interests of society; ... [t]o remove a child from the custody of his parents only when his welfare and safety or the protection of the public would otherwise be endangered ...; and [t]o secure for any child removed from the custody of his parents the necessary care, guidance, and discipline to assist him in becoming a responsible and productive member of society.

§ 19-1-102(1)(a), (c), (d), C.R.S. 2016. Moreover, the General Assembly has stated that "the juvenile justice system shall take into consideration the best interests of the juvenile, the victim, and the community in providing appropriate treatment to reduce the rate of recidivism in the juvenile justice system and to assist the juvenile in becoming a productive member of society." § 19-2-102(1), C.R.S. 2016 (emphasis added). These goals emphasize the best interests and care of the juveniles; they do not indicate any intention to create or deny standing for human service agencies such as the Department and are, to the contrary, silent as to the Department's role in implementing the Children's Code.

¶ 41 Also, the Children's Code provisions regarding preadjudication placement, for example, sections 19-2-508 and - 509, C.R.S. 2016, do not directly implicate the Department. Section 19-2-508(1) provides for the care of the juveniles in shelters, detention facilities, or temporary holding facilities who have been removed from their homes as a result of a delinquency action. The statute specifically provides that a juvenile court can hold a juvenile without bond and place him or her in a preadjudication service program established pursuant to statute. § 19-2-508(3)(a)(IV)(E), C.R.S. 2016. It is silent as to the role of a human services agency despite the fact that said agencies are charged with managing detention and holding facilities. Similarly, under section 19-2-509(2), the juvenile court has the authority to place a juvenile in a preadjudication service program in lieu of bond without mention of the role, if any, of human services agencies such as the Department. Specifically, the statute is silent as to whether the Department may essentially veto a preadjudication placement by an objection.

¶ 42 Each of these statutes provides for the protection, care, and treatment of the juvenile; they do not indicate any legislative intent to create or deny standing to the Department under the circumstances here.

¶ 43 Third, as previously mentioned, the Children's Code does not provide protections for the Department. Rather, it provides for the protection, care, and treatment of juveniles subject to its provisions and, as relevant here, children removed from their homes for delinquent acts. We have found no statute, and the Department does not cite any, that indicates that conferring standing on the Department to interfere with a juvenile court's decision regarding preadjudication placements is consistent with the framework of the Children's Code. The General Assembly's own legislative declarations make it clear that the Children's Code was established for the protection and rehabilitation of children, not the protection of a human services agency's interests.

¶ 44 Thus, we conclude that the Children's Code does not confer standing on the Department to challenge a juvenile court's ruling regarding preadjudication placement. As a result, the Department does not have standing to prosecute this appeal.

4. C.A.G. is Distinguishable

¶ 45 As noted earlier, the Department relies on C.A.G. for its argument that it has standing despite being a nonparty to the delinquency action. But the Department's reliance on that case is misplaced.

¶ 46 In C.A.G. , a division of this court concluded that a county department of human services (the county department) had a legally cognizable interest sufficient to prosecute an appeal of an adjudication order finding the juvenile delinquent and ordering the county department to provide certain services to C.A.G. and to provide him with an "appropriate education." C.A.G. , 903 P.2d at 1231, 1233. The division emphasized that the county department had legal custody of the juvenile and that the juvenile court ordered the county department to provide the juvenile an "appropriate education" while not in the physical custody of the county department. Id.

¶ 47 The Department argues that the temporary custody order placing D.Z.B. in its legal custody, specifically at Jefferson Hills, is analogous to the custody order and order for educational services in C.A.G. and, therefore, it has standing to prosecute the present appeal.

¶ 48 We conclude that C.A.G. is distinguishable. To the extent that C.A.G. includes language broad enough to confer standing on the Department and other county human services agencies generally in every case in which they were granted temporary custody, we respectfully disagree. E.g. , People in Interest of S.N-V. , 300 P.3d 911, 914 (Colo. App. 2011) (one division of the court of appeals is not bound by a decision of another division).

¶ 49 The division in C.A.G. explicitly restricted its conclusion that the county department had a "legal cognizable interest sufficient" to prosecute the appeal to the circumstances of that case. C.A.G. , 903 P.2d at 1231 ("We conclude that, under the circumstances present here,...."). The division's ultimate holding on standing thus reflects a limitation that a legal custody order does not always confer standing: "the burden imposed by [a legal custody] order may obviously 'substantially aggrieve' the person upon whom it is placed." Id. at 1233 (emphasis added). This limited holding is consistent with the law in Colorado that a nonparty who is adversely affected by a judgment is not necessarily substantially aggrieved and, thus, does not necessarily have standing. AMCO Ins. Co. , 166 P.3d at 275.

¶ 50 In our view, the determinative circumstances in C.A.G. were that the county department was appealing from a final adjudication order that placed legal custody with the county department and ordered the county department to provide an appropriate education for the juvenile while he was not in the county department's physical custody. Moreover, the adjudication order required the county department to file with the court a plan describing how it proposed to meet the unique obligations that the juvenile court had imposed.

¶ 51 The circumstances with D.Z.B. were notably different from those in C.A.G. Unlike in C.A.G. where the county department was contesting the final adjudication order, here the Department is appealing from a temporary order placing D.Z.B. in its custody while he awaited final adjudication. The fact that the county department in C.A.G. was appealing the final adjudication order is significant because the cases cited by the division in C.A.G. hold that nonparties can have standing to appeal final judgments when the disposition substantially aggrieved the nonparty. C.A.G. , 903 P.2d at 1233 (citing Maul v. Shaw , 843 P.2d 139 (Colo. App. 1992) ; Robert-Henry v. Richter , 802 P.2d 1159 (Colo. App. 1990) ). Here, the Department is not contesting the final judgment or disposition, only the temporary order for preadjudication placement. The Department does not argue that it was substantially aggrieved by the final disposition of the case, only that it was substantially aggrieved by the cost of D.Z.B.'s temporary placement at Jefferson Hills during the pendency of the adjudication proceeding.

¶ 52 Moreover, as explained above, we think it significant that the Department was not ordered to do anything that it was not already required to do by statute-house D.Z.B., a juvenile removed from his home in a delinquency matter, in one of its facilities. In contrast, the division in C.A.G. was concerned with an adjudication order that required the county department to undertake a task that it was ill-equipped to do-educate the juvenile when it did not have physical custody of him. Id. at 1230-31. The juvenile court in C.A.G. recognized the uniqueness of the situation because it ordered the county department to present a written plan as to how it would accomplish the tasks the court ordered. Id. at 1231. In this case, by contrast, there was no such onerous or unique burden imposed on the Department, and the Department was not required to present a plan to the juvenile court for successful completion of its obligations under the preadjudication order. There was no question of successful completion because all the Department had to do to fulfill the order was transport D.Z.B. to Jefferson Hills and house him there until his final adjudication.

¶ 53 Hence, the only way that the Department could have been aggrieved was, as it alleged, by paying for D.Z.B.'s short stay at Jefferson Hills prior to his adjudication-a grievance that fell within its statutory duty to provide services to juveniles and, in our view, did not cause the Department to be "substantially aggrieved." §§ 19-1-102, 19-2-102, 26-1-118(1) ; AMCO Ins. Co. , 166 P.3d at 275 ; C.A.G. , 903 P.2d at 1233.

¶ 54 We also note that C.A.G. is distinguishable from this case because of the difference in the basis of the agencies' arguments. In C.A.G. , the county department was objecting to the adjudication order on the grounds that the county department was not properly equipped to provide an "appropriate education" while C.A.G. was in his parents' home rather than in the physical custody of the county department. C.A.G. , 903 P.2d at 1231. The division in C.A.G. emphasized that legal custody was with the county department only because the county department, as C.A.G.'s legal guardian, was required to act as a de facto parent, and its objection to the court's order requiring appropriate education was based on that parens patriae status. Id. at 1233. While the county department in C.A.G. also mentioned the lack of funding for such an undertaking and argued that the juvenile court did not have the authority to order educational services while the juvenile was not in its physical custody, the agency's underlying concern was how it could successfully carry out such an order for the benefit of C.A.G.

¶ 55 Here, by contrast, the Department did not base its argument on the best interests of D.Z.B. or whether it could have been successful in housing D.Z.B. prior to adjudication. Indeed, this appeal will not affect D.Z.B.'s adjudication, treatment, or probation at all. The Department's argument, instead, was based solely on the alleged expense of D.Z.B.'s preadjudication confinement, an expense routinely incurred by the Department as a result of its required statutory functions as an agency of DHS. Thus, although the Department may have been "adversely affected" by the court's September 22 order, it was not substantially aggrieved because the obligation of housing D.Z.B. when he was removed from his home preadjudication arose from the Department's statutory duties under the Children's Code. AMCO Ins. Co. , 166 P.3d at 275.

III. Conclusion

¶ 56 Because the Department lacks standing, we dismiss its appeal.

JUDGE FURMAN and JUDGE TERRY concur.

      Due to the lack of transcripts, we do not know what, if anything, the prosecution may have stated regarding its position on bond and, later, sentencing.

      The record is not clear as to who had legal and physical custody of D.Z.B. from September 17 through September 22.

      The Department concedes that the juvenile court has the authority to place a juvenile in a residential child care facility in lieu of bond when the Department does not object to the placement.

      Because we are concerned with whether the statute confers standing on the Department, we do not consider the merits of the Department's argument that the juvenile court lacked authority because Jefferson Hills was not a "preadjudication service program" contemplated in this statute. Such an argument has no bearing on whether the intent of the statute was to confer standing on the Department.


author: Opinion by JUDGE HARRIS

text:
    The PEOPLE of the State of Colorado, Plaintiff-Appellee, v. Edward MADISON, Defendant-Appellant.
    Court of Appeals No. 16CA0192
    Colorado Court of Appeals, Division I.
    Announced May 3, 2018
    Cynthia H. Coffman, Attorney General, Elizabeth Ford Milani, Assistant Attorney General, Denver, Colorado, for Plaintiff-Appellee
    Douglas K. Wilson, Colorado State Public Defender, Anne T. Amicarella, Deputy State Public Defender, Denver, Colorado, for Defendant-Appellant
   Opinion by JUDGE HARRIS

¶ 1 Defendant, Edward Madison, appeals the district court's order granting the Jefferson County sheriff's office's motion to destroy evidence associated with Madison's theft conviction. We affirm.

I. Background

¶ 2 Between March 2007 and April 2009, Madison stole scores of bottles of expensive wine from multiple liquor stores in Jefferson County. The prosecution charged him with three counts of theft ($1000 to $20,000), all class 4 felonies, in violation of section 18-4-401(1), C.R.S. 2017.

¶ 3 In April 2010, Madison pleaded guilty to an added count of attempted theft, a class 6 felony. In exchange, the prosecution agreed to a sentence of "probation with restitution."

¶ 4 The court sentenced Madison to a two-year term of probation. As for the restitution, the liquor stores declined to accept the wine recovered from Madison's home because the method of storage could not be confirmed, and therefore the wine was unmarketable. Instead, the stores sought reimbursement for the retail value of the wine. Accordingly, the court ordered restitution in the amount of $16,514. Police had seized $7000 during the search of Madison's home and that money was distributed to the victims, leaving a restitution balance of $9514.

¶ 5 Contemporaneously with the plea agreement, Madison and the prosecution entered into an "Evidence Disposition Agreement" (Agreement). The Agreement provided in relevant part:

• "Law enforcement may dispose of all evidence on the attached log except" sixty-seven bottles of wine recovered by police which would be returned to "defendant when restitution [was] paid."
• "Law enforcement shall release" the sixty-seven bottles of wine to the defendant or his lawyer "when restitution [was] paid," but the wine had to be requested "within 90 days" of the date of the Agreement.
• "Defendant understands that the agency may dispose of these items if they are not picked up within 90 days, unless other arrangements are made."
• "The defendant waives any right to further notification before the disposition for the items authorized above."
• "Any disposition will be according to the law enforcement agency's procedures and protocols, which may include returning property to the rightful owner or destruction."

¶ 6 Madison did not pay the outstanding restitution or request the wine within ninety days.

¶ 7 Nearly two years later, in January 2012, Madison's probation officer filed a complaint to revoke his probation, alleging that Madison had pleaded guilty to shoplifting in April 2011. In addition, though Madison's two-year probationary sentence was set to expire a few months later, Madison still owed $7740 in restitution.

¶ 8 The court revoked Madison's probation, resentenced him to a one-year term of probation, and reimposed the restitution obligation.

¶ 9 In May 2015, five years after Madison signed the Agreement, the sheriff's office moved for an order authorizing the destruction of the wine. Madison objected, contending that-although he still owed $7540 in restitution-he should be permitted to take possession of the wine and sell it, then apply the proceeds to his restitution balance. Madison argued that he had "a claim to ownership" of the wine based on the Uniform Commercial Code (UCC) and conversion principles. The court granted the motion, but stayed its order.

¶ 10 On appeal, Madison reasserts his argument that he has an ownership interest in the wine. As a result, he contends, the court should have either permitted him to sell the wine or ordered the sheriff's office to sell it, with any proceeds applied to his restitution obligation. We conclude that disposition of the wine is governed by the Agreement, not by the UCC or conversion principles, and that the Agreement expressly provides for the destruction of the wine under these circumstances.

II. Discussion

A. Disposition of the Evidence is Governed by The Evidence Disposition Agreement

¶ 11 Madison does not dispute that he entered into the Agreement with the prosecution. Thus, we look to the Agreement to determine whether it specifically allows law enforcement officials to destroy or otherwise dispose of the wine and whether it provides for an offset against Madison's restitution obligation.

¶ 12 The Agreement between Madison and the prosecution is, like Madison's related plea agreement, a contract. See People v. Johnson , 999 P.2d 825, 829 (Colo. 2000) ; see also McCarty v. People , 874 P.2d 394, 400 (Colo. 1994) (holding that a defendant is bound by her agreement to pay restitution). So we apply contract interpretation principles to construe the Agreement. Johnson , 999 P.2d at 829. In doing so, we seek to effectuate the intent of the parties, focusing on "the meaning a reasonable person would have attached to the agreement under the circumstances." Id.

¶ 13 The meaning of the Agreement is a question of law that we review de novo. Id.

¶ 14 Pursuant to the plain language of the Agreement, Madison could recover the stolen wine from law enforcement officials (1) "when restitution [was] paid" and (2) if the wine was "picked up within ninety days." We conclude that the only reasonable interpretation of the Agreement is that Madison had to both pay the restitution and pick up the wine within ninety days.

¶ 15 If Madison did not pay restitution and pick up the wine before the deadline, the Agreement expressly provided that "law enforcement" (i.e., the sheriff's office) could "dispose of the items" without further notice to Madison. And the "disposition" of the wine could "include ... destruction."

¶ 16 Madison did not pay restitution or pick up the wine within ninety days. At that point, under the plain and ordinary meaning of the Agreement's terms, the sheriff's office had the right (without seeking approval from the court or notifying Madison) to dispose of the wine. See People v. Barton , 174 P.3d 786, 789 (Colo. 2008) (a plea agreement is interpreted according to the plain and ordinary meaning of its terms). Further, no provision in the Agreement gave Madison the right to determine the particular disposition of the wine or to demand that any proceeds from the disposition be distributed to the victims and then applied to reduce his restitution balance. See, e.g. , Janicek v. Obsideo , LLC , 271 P.3d 1133, 1138 (Colo. App. 2011) (in interpreting a contract, the court may not rewrite or restructure the parties' agreement).

¶ 17 Thus, the Agreement unambiguously gave the prosecution (or the sheriff's office) the right to dispose of the wine in May 2015. When the terms of the plea agreement or similar contract are unambiguous, we ordinarily enforce the terms as written. See Craig v. People , 986 P.2d 951, 961 (Colo. 1999) ; see also United States v. Jordan , 509 F.3d 191, 195 (4th Cir. 2007) ("If the plea agreement is unambiguous as a matter of law, and there is no evidence of governmental overreaching, we should interpret and enforce the agreement accordingly.").

¶ 18 Still, Madison says that by failing to promptly exercise its right to destroy the wine, the prosecution either modified the Agreement or waived any right to enforce the ninety-day deadline. We are not persuaded.

¶ 19 As for the purported modification, Madison does not explain when the Agreement was modified or identify any new rights or obligations of the parties based on the modification. We therefore need not address this contention. See People v. Diefenderfer , 784 P.2d 741, 752 (Colo. 1989) (Appellant must "inform a reviewing court both as to the specific errors relied upon and as to the grounds, supporting facts and authorities therefor.").

¶ 20 As for the prosecution's alleged waiver, we acknowledge that a party may waive a contract provision where the party is "entitled to assert a particular right, knows the right exists, but intentionally abandons that right." Tarco, Inc. v. Conifer Metro. Dist. , 2013 COA 60, ¶ 33, 316 P.3d 82 (citation omitted); see also Dep't of Health v. Donahue , 690 P.2d 243, 247 (Colo. 1984) (Conduct implying an intent to waive must be "free from ambiguity and clearly manifest the intention not to assert the benefit.").

¶ 21 However, the circumstances of this case do not fit squarely within the doctrine of waiver. The purpose of the waiver doctrine is "to prevent the waiving party from lulling the other party into a belief that strict compliance with a contractual duty will not be required and then either suing for noncompliance or demanding compliance for the purpose of avoiding the transaction." 13 Williston on Contracts § 39:15, Westlaw (4th ed. database updated May 2017) (footnote omitted). Here, the prosecution neither sued Madison for noncompliance nor demanded compliance as a way to avoid the Agreement. More importantly, Madison has not alleged, and there is no evidence in the record, that the sheriff's office or the prosecution "lulled" him into a belief that law enforcement officials would store the wine indefinitely on the off chance that he might someday fulfill his restitution obligation.

¶ 22 In any event, even if the prosecution waived the initial ninety-day deadline, and implicitly extended the deadline by five years (a deadline Madison still failed to meet), a new deadline was set at the hearing on Madison's objection to the motion to destroy evidence. See State of Fla., Dep't of Ins. v. United States , 81 F.3d 1093, 1096-97 (Fed. Cir. 1996) (nonbreaching party does not waive a deadline if it sets a new deadline for performance "so that the parties will understand when performance is required"). In August 2015, the court essentially re-extended the deadline for an additional thirty days, explaining that if Madison paid the restitution by September 2015 (now, a full sixty-five months after he agreed to pay restitution), he could reap the benefit of the expired Agreement. But Madison did not pay the restitution.

¶ 23 Under these circumstances, we cannot conclude that the prosecution intentionally abandoned any deadline for collecting the restitution and implicitly agreed to store the wine forever.

¶ 24 Accordingly, we must enforce the unambiguous terms of the Agreement. And because Madison failed to satisfy the conditions precedent to his recovery of the wine, he is not entitled to take possession of the wine or to otherwise dictate the terms of its disposition.

B. The Agreement Did Not Give Madison an Ownership Interest in the Wine and an Ownership Interest Is Not Conferred by Any Statute or Legal Principle

¶ 25 We reject Madison's contention that, notwithstanding his failure to satisfy its requirements, the Agreement gave him an ownership interest in the wine, as did various statutes or legal principles.

¶ 26 Though it almost goes without saying, we emphasize, as a preliminary matter, that "one who steals or converts property to his own use does not thereby acquire title thereto." Stewart v. People , 193 Colo. 399, 400, 566 P.2d 1069, 1070 (1977) (quoting Trustee Company v. Aetna Co. , 135 Colo. 236, 310 P.2d 727 (1957) ); see also West v. Roberts , 143 P.3d 1037, 1044 (Colo. 2006) ("A thief has no title and can pass none, not even to a buyer in the ordinary course."). With that elementary principle in mind, we turn to Madison's arguments.

¶ 27 First, Madison says that the Agreement "effectively became a sales contract" because "the parties agreed that Madison could obtain the property," and "Madison therefore had rights to that property." As we have discussed, Madison had a right to obtain the property upon the satisfaction of certain conditions precedent. He did not satisfy those conditions and therefore he did not obtain any right to the wine.

¶ 28 Second, Madison argues that the UCC gave him an ownership interest in the wine. Madison says that, pursuant to section 4-2-401(2), C.R.S. 2017, he "bec[a]me a buyer of the goods via his restitution order" and that "title passed to Madison upon [the] delivery" of the wine to the sheriff's office.

¶ 29 Section 4-2-401 has no application to this case. That provision explains when title to goods passes from a seller to a buyer under a contract for sale-"[u]nless otherwise explicitly agreed, title passes to the buyer at the time and place at which the seller completes his performance"-and notes that any reservation by the seller of the title is limited to a reservation of a security interest. § 4-2-401(2).

¶ 30 Setting aside the fact that the victims are not "sellers" because they relinquished their right to the property by seeking reimbursement from Madison; and setting aside the fact that Madison is not a "buyer" within the meaning of the UCC, see § 4-1-201(9), C.R.S. 2017; and, finally, setting aside the fact that even under the UCC, title does not transfer until the seller has delivered the goods to the buyer (which did not occur here), the parties had "otherwise explicitly agreed" in the Agreement that Madison's right to ownership of the wine was contingent on payment of restitution within ninety days. By its own terms, section 4-2-401(2) cannot override the parties' agreement.

¶ 31 Third, the existence of a judgment lien did not give Madison an ownership interest in the wine. We agree that an order for restitution "is a final civil judgment in favor of the state and any victim," § 18-1.3-603(4)(a)(1), C.R.S. 2017, and that the order therefore "creates a lien by operation of law against the defendant's personal property and any interest that the defendant may have in any personal property," § 18-1.3-603(b)(II)(c). But the wine was not Madison's personal property, at least not until he paid for it by fulfilling his restitution obligation.

¶ 32 And finally, Madison did not obtain a property interest in the wine under principles of conversion. He contends that "a 'judicial sale' was effected pursuant to 4-2-401(2), C.R.S. 2017, passing title to him, when the theft [victims] opted to receive restitution for full value." Section 4-2-401(2) has nothing to do with judicial sales. Instead, as Madison noted in the district court, a "de facto" judicial sale is a remedy for the tort of conversion:

In conversion the measure of damages is the full value of the chattel, at the time and place of the tort. When the defendant satisfies the judgment in the action for conversion, title to the chattel passes to him, so that he is in effect required to buy it at a forced judicial sale.

Restatement (Second) of Torts § 222A cmt. c. (Am. Law Inst. 1965). Under conversion principles, title to the wine was not transferred to Madison when the victims sought restitution; rather, ownership would have transferred to Madison only if he had paid for the wine, and thereby reimbursed the victims for their loss. But he did not.

III. Conclusion

¶ 33 The order is affirmed.

Taubman and Márquez , JJ., concur

      Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5 (3), and § 24-51-1105, C.R.S. 2017.

      That figure included $5600 to a prospective third-party buyer who had agreed to purchase some of the wine. But after the prospective buyer sent Madison the money, Madison failed to send him the wine.

      Although Madison has no right to determine the disposition of the property, if, in accordance with its "procedures and protocols," the sheriff's office sells the wine and if it distributes the sale proceeds to the victims (because they have not otherwise been compensated for the loss-from, for example, the proceeds of an insurance policy), Madison is entitled to a setoff against the balance of his restitution obligation. § 18-1.3-603(3)(b)(II), C.R.S. 2017; People v. Stanley , 2017 COA 121, ¶ 20, 405 P.3d 518 (noting the restitution statute does not permit double recovery by the victim).