Colorado Criminal Restitution Law – Collecting Unpaid Pre – & Post Judgement Interest – An Unfair Turn In The Law
Colorado Criminal Restitution Law – Collecting Unpaid Pre – & Post Judgement Interest – An Unfair Turn In The Law – Quietly – in 2000- the Colorado State Legislature enacted changes to the laws governing the payment of restitution in Colorado criminal cases. Among these changes were provisions that mandate the payment of post conviction interest.
The law in question (reprinted in whole below) requires the application of 12% post-judgment interest to all Colorado restitution orders. The original law was enacted on September 1, 2000. However, for reasons related to computer programming logistics, was almost never enforced.
Here is the relevant section:
§ 18-1.3-603 (4)(b)(1) – Any order for restitution made pursuant to this section shall also be deemed to order that:
The defendant owes interest from the date of the entry of the order at the rate of twelve percent per annum;
Why Is The Colorado Interest On Criminal Restitution Only Arising Now?
After the law was enacted in September of 2000, the State of Colorado decided that the increased costs associated with updating its software, or in the alternative, forcing state employees to manually calculate interest, was not worth the effort or the additional cost except in the very rare circumstance that a victim specifically requested and a judge specifically ordered post-judgment interest.
Fifteen years passed and the payment of interest on restitution in Colorado criminal cases remained uncollected. In 2015, the State decided to not only collect this post-judgment interest, but to back collect interest on all orders for restitution since 2000. It is estimated that, across the state of Colorado, about 80,000 cases in which restitution is owed to about 143,000 victims will be affected.
On July 1, 2015 the Colorado Judicial Branch of government sent letters to all Defendants having outstanding restitution balances advising these individuals that under Section 18-1.3-603(4), C.R.S., interest on unpaid restitution balances would be charged at an annual rate of 12% and that beginning September 12, 2015 interest will be added at 1% per month of the current restitution balance.
The letters sent shock waves throughout the state especially when the letters indicated that interest may be added from the date the order for restitution was entered.
Individuals who had been paying restitution for years have not been required to pay post-judgment interest on their restitution orders. These people have never been advised by anyone in government that the state intended to collect post-judgment interest. Probationers who have made each and every payment in a timely manner will now be placed into a situation that may cause them to violate their probation based sentences.
How Much Restitution And How Will It Be Calculated?
On September 15, 2015 (date of this article is September 1) the state will automatically start adding on 12% interest at the rate of 1% each month to all outstanding restitution orders. The first assessment of interest will occur on the exact date of September 15th and then again on the second Saturday of each month thereafter.
If the victim requests it, the state will also calculate and include “back post-judgment interest” and add it to the total amount of money the Defendant owes.
Back Dating Interest On Colorado Criminal Restitution – So Called “Historical Interest”
Whether you have been diligently paying your restitution or not, your payment plan will change under the new enforcement mechanism.
“Historical” or back dated interest is calculated from the date of sentencing and can be requested by victims by submitting a form to the state. To obtain historical interest, the victim of a crime will file a “Request to Add Interest” (JDF 6) with the Clerk’s Office where the case is located.
The court then calculates the amount of interest owed by the Defendant based on the time period the restitution was unpaid and then it is ordered as part of the restitution total. Effective September 14, 2015, the victim’s request will be processed by staff in the court authorized to assess historical interest.
Returning To The Fundamentals – What IS Restitution? Who Has To Pay It? When? and Why?
The Loss Of The “Use” Of Money
Victim’s restitution is a court-ordered amount that a convicted offender pays to the victim to compensate him or her for monetary losses resulting from the crimes charged. It is collected on all counts those pled to and those dismissed. It is intended to hold an offender financially responsible for the harm he or she caused.
Colorado’s restitution law, Section 18-1.3-603, C.R.S., is mandatory and requires the court to consider the need for restitution for victims when imposing an offender’s sentence.
The statute reads:
“[a]s a condition of every sentence to probation, [trial courts] shall order that the defendant make full restitution pursuant to” Colorado’s restitution statute. § 18–1.3–205, C.R.S.
The “restitution statute” stresses that restitution is a crucial element of sentencing. See §§ 18–1.3–601 to 603 C.R.S., is a “deterrent to future criminality,” and a “mechanism for the rehabilitation of offenders.” It is also intended as compensation for the “suffering and hardship” of victims and their families. § 18–1.3–601, C.R.S..
The judge has no discretion when it comes to ordering restitution as a condition of probation. Restitution applies to “any pecuniary loss suffered by a victim,” including the “loss of use of money,” and “other losses or injuries proximately caused by an offender’s conduct and that can be reasonably calculated and recompensed in money.”
The term “loss of use of money” for example in theft cases, means not only the amount of money stolen, but the value of the use of the money stolen from the victim from the date the money was stolen to the date of the restitution award. That is why interest represents the method that victims are provided to recover the proper measure of the value of the use of the money the victim “lost” because the defendant deprived the victim of the use of that money.
Why Is Interest Charged As Part Of Colorado Criminal Restitution Orders? – Can The Judge Alter The Legal Mandate To Pay Interest In The Payment Of Interest?
As stated above, Section 18–1.3–603(4)(b)(I), C.R.S. mandates that restitution orders require Defendants to pay “interest from the date of the entry of the order at the rate of twelve percent per annum,” in order to “encourage expeditious payment of the restitution order.”
The policy judgment here is that by utilizing the “tool of post-judgment interest” Defendant’s on probation and owing restitution are “incentivized” to repay the restitution order back more quickly. While a judge has discretion to determine the terms and conditions of restitution orders, a judge cannot refuse to order post-judgment interest under Section 18–1.3–603(4)(b)(I) and to make certain that the restitution order is paid in full.
Simply put, a judge cannot modify the post-judgment interest calculation. Post-judgment interest is a mandatory provision of the restitution statute, as such it cannot be waived by the trial court or by the prosecution.
Colorado Criminal Restitution Is For Life But Does Not Include Civil Law Based Damages Such As Pain And Suffering
In Colorado criminal cases the Defendant must compensate a victim for their actual out of pocket losses but the Defendant is never ordered to pay for such things as pain and suffering or punitive damages.
In addition, while many Defendants believe that the obligation to pay restitution lasts as long as the sentence itself. Nothing could be further from the truth. Once a restitution order is entered the obligation to pay that order is a lifelong obligation that continues until the obligation is paid off. At the termination of the criminal sentence the restitution order continues as a “civil judgment” which survives for life and is not dischargable in any other proceeding such as a bankruptcy.
How Is Colorado Restitution Ordered?
In Colorado the Courts, known as the Judicial Branch which controls all 22 judicial districts assesses and controls the collection of restitution. Restitution is only one of several fees and costs in criminal cases. There are many fines, fees, and costs that a judge assesses against convicted offenders.
Colorado requires that “Every order of conviction of a felony, misdemeanor, petty, or traffic misdemeanor offense, except any order of conviction for a state traffic misdemeanor offense issued by a municipal or county court… shall include consideration of restitution” Section 18-1.3-603(1), C.R.S..
The prosecuting attorney has the responsibility to present the order for restitution within at or within 91 days of the sentencing – conviction Section 18-1.3-603(2), C.R.S. That responsibility includes compiling the alleged financial losses incurred AND the actual proof that such losses actually occurred. This is done in several ways such as victim impact statements, victim testimony at sentencing or even a fully litigated a restitution hearing where each side may address the victim’s restitution demand.
At the conclusion of this process, the sentencing judge either enters an order specifying the exact amount of restitution to be paid to the victim, if any, and addresses any future possible claims that may arise after that date. Section 18-1.3-603(1)(d), C.R.S..
Who Collects Colorado Criminal Restitution – How Is It Collected?
Under Colorado law, Section 16-18.5-104(1), C.R.S., restitution is due on the day that it is ordered. But it is rarely paid in full on that date. In fact, less than 5 percent of offenders are able to pay the entire amount of restitution at or before sentencing.
Collection investigators operate out of all 22 Colorado Judicial Districts to help offenders streamline the process of the collection of restitution while offenders serve their sentences and even after completing those sentences. They set up payment plans and monitor those plans for compliance. They work closely with probation in completing that task.
Can The Colorado Victim Directly Collect Restitution? How Does That Work?
Under Colorado law Section 16-18.5-107(1), C.R.S, the victim has the right to notify the court that they intend to collect restitution on his or her own. In that event, the court ceases attempts to collect the restitution. That same law requires the victim to report any payments made to them so that the balance of the restitution order is appropriately reduced – Section 16-18.5-107(4), C.R.S..
This is exceedingly rare on the part of victims but does occur with more frequency by insurance companies.
If Colorado Criminal Restitution Has Already Been Paid – Can The Victim Seek The Payment Of Post Judgment Interest?
Even if restitution has been paid in full, a victim can seek “historical interest” by filing the State of Colorado Judicial form JDF 6 “Request to Add Interest” with the Clerk’s Office where the case is located. Upon receipt of that form, the court clerk then calculates the amount of interest owed by the defendant based on the time period the restitution was unpaid and assesses it to the case.
This will also be available on and after September 14, 2015.
Can I Fight The Imposition Of Post-Judgment 12% Interest At This Point On Prior Orders For Restitution?
The short answer is “maybe.” The fight is on by Colorado’s criminal defense lawyers on this issue. As of the date of this article (September 2015) there is no conclusive answer to this question.
While the jury is out on this issue. Lawyers faced with clients in this situation are exploring several grounds of attack – none of which are very promising at this point. The complexity of these prongs of attack are not the subject of this article. However some areas of attack include:L
- The statutes do not permit the addition of “back dated – post-judgment interest” to the outstanding amount of restitution. The victim and the courts have “waived” any statutory right to post-judgment interest.
- The doctrine of “laches” (sitting or delaying on your rights) prohibits the application of an award of post judgment interest. A claim under the doctrine of laches includes the elements of: are: (1) full knowledge of the facts; (2) unreasonable delay in the assertion of an available remedy; and (3) intervening reliance by and prejudice to another.
- Post judgment interest after this long of a delay (15 years for some) violates notions of Due Process provided for in the United States and Colorado Constitutions.
- The intentional decision not to collect this interest bars its collection under the doctrine of Desuetude. Wikipedia describes this rare doctrine of law as a situation “that causes statutes, similar legislation or legal principles to lapse and become unenforceable by a long habit of non-enforcement or lapse of time. …It is the legal doctrine that long and continued non-use of a law renders it invalid, at least in the sense that courts will no longer tolerate punishing its transgressors.
- Post judgment interest if assessed subjects the Defendant to a second punishment in violation of the Colorado and United States Constitutions prohibitions on Double Jeopardy.
- Engaging in the “legislative redrafting” of a law by the judicial branch is contrary to the rule of lenity which requires courts to “liberally interpret” Colorado criminal sentencing statutes in favor of the defendant and to strictly construe those same provisions against the government.
Now For The Really Bad News – Colorado Law Also Provides For 8% Pre-Judgment Interest
While rarely imposed, Colorado Courts are also required to impose both 8% pre-judment interest as well as the 12% post-judgment interest. This was the holding of the case – Roberts v. People, 130 P.3d 1005 (Colo. 2006). Roberts was a theft from an at risk adult case and the Court
calculated and ordered restitution as the amount of money stolen from the victim plus 8% compounded annually from the dates of theft to the date of the restitution order (prejudgment 8% interest).
While the “restitution statute” does not explicitly provide for or permit pre-judgment interest and the requirement of such interest is based on the reasoning that when theft occurs the victim loses the “use” of the money stolen. The restitution law contains the provision, as the law was amended in 2000, that states that the victim has the right to seek compensation for the loss of the “use of money” and therefore 8 percent interest must be charged from the date of the theft.
What follows is Colorado’s ENTIRE Restitution Law 18-1.3-603 C.R.S. ( with relevant analysis in brackets when appropriate).
§ 18-1.3-603. Assessment of restitution – corrective orders.
[HMS – The order for restitution in all criminal cases is mandatory.]
(1) Every order of conviction of a felony, misdemeanor, petty, or traffic misdemeanor offense, except any order of conviction for a state traffic misdemeanor offense issued by a municipal or county court in which the prosecuting attorney is acting as a special deputy district attorney pursuant to an agreement with the district attorney’s office, shall include consideration of restitution. Each such order shall include one or more of the following:
[HMS – The next section addresses how and when the restitution order must be made]
(a) An order of a specific amount of restitution be paid by the defendant;
(b) An order that the defendant is obligated to pay restitution, but that the specific amount of restitution shall be determined within the ninety-one days immediately following the order of conviction, unless good cause is shown for extending the time period by which the restitution amount shall be determined;
(c) An order, in addition to or in place of a specific amount of restitution, that the defendant pay restitution covering the actual costs of specific future treatment of any victim of the crime; or
(d) Contain a specific finding that no victim of the crime suffered a pecuniary loss and therefore no order for the payment of restitution is being entered.
(2) The court shall base its order for restitution upon information presented to the court by the prosecuting attorney, who shall compile such information through victim impact statements or other means to determine the amount of restitution and the identities of the victims.
Further, the prosecuting attorney shall present this information to the court prior to the order of conviction or within ninety-one days, if it is not available prior to the order of conviction. The court may extend this date if it finds that there are extenuating circumstances affecting the prosecuting attorney’s ability to determine restitution.
[HMS – The next, very important section provides for the modification of a restitution order – up or down -and how that is performed.]
(3) Any order for restitution may be:
(a) Increased if additional victims or additional losses not known to the judge or the prosecutor at the time the order of restitution was entered are later discovered and the final amount of restitution due has not been set by the court; or
(I) With the consent of the prosecuting attorney and the victim or victims to whom the restitution is owed; or
(II) If the defendant has otherwise compensated the victim or victims for the pecuniary losses suffered.
[HMS – This next section provides for the conversion of an order of restitution to a final civil judgment in favor of the state and any victim- and of course it provides for post-judgment interest]
(4) (a) Any order for restitution entered pursuant to this section shall be a final civil judgment in favor of the state and any victim. Notwithstanding any other civil or criminal statute or rule, any such judgment shall remain in force until the restitution is paid in full. The provisions of article 18.5 of title 16, C.R.S., apply notwithstanding the termination of a deferred judgment and sentence or a deferred adjudication.
(b) Any order for restitution made pursuant to this section shall also be deemed to order that:
(I) The defendant owes interest from the date of the entry of the order at the rate of twelve percent per annum; and
(II) The defendant owes all reasonable and necessary attorney fees and costs incurred in collecting such order due to the defendant’s nonpayment.
(c) The entry of an order for restitution under this section 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.
[HMS – Section (d) prevents the discharge of restitution in a bankruptcy action and prevents the “double collection” of restitution if a victim receives payments from a different source – such as insurance.]
(d) Any order of restitution imposed shall be considered a debt for “willful and malicious” injury for purposes of exceptions to discharge in bankruptcy as provided in 11 U.S.C. sec. 523.
(5) If more than one defendant owes restitution to the same victim for the same pecuniary loss, the orders for restitution shall be joint and several obligations of the defendants.
(6) Any amount paid to a victim under an order of restitution shall be set off against any amount later recovered as compensatory damages by such victim in any federal or state civil proceeding.
[HMS – This next section provides for additional costs related to correcting public records fro the victims of identity theft and the like.]
(7) When a person’s means of identification or financial information was used without that person’s authorization in connection with a conviction for any crime in violation of part 2, 3, or 4 of article 4, part 1, 2, 3, or 7 of article 5, or article 5.5 of this title, the sentencing court may issue such orders as are necessary to correct a public record that contains false information resulting from any violation of such laws. In addition, the restitution order shall include any costs incurred by the victim related to section 16-5-103, C.R.S.
[HMS – Section 8 – addresses the complex role of insurance payments in their application to a criminal Defendant’s restitution obligation.]
(8) (a) Notwithstanding the provisions of subsection (1) of this section, for a non-felony conviction under title 42, C.R.S., the court shall order restitution concerning only the portion of the victim’s pecuniary loss for which the victim cannot be compensated under a policy of insurance, self-insurance, an indemnity agreement, or a risk management fund.
(b) The court, in determining the restitution amount, shall consider whether the defendant or the vehicle driven by the defendant at the time of the offense was covered by:
(I) A complying policy of insurance or certificate of self-insurance as required by the laws of this state;
(II) Self-insurance including but not limited to insurance coverage pursuant to the provisions of part 15 of article 30 of title 24, C.R.S.; or
(III) Any other insurance or indemnity agreement that would indemnify the defendant for any damages sustained by the victim.
(c) (I) Except as otherwise provided in this paragraph (c), a court may not award restitution to a victim concerning a pecuniary loss for which the victim has received or is entitled to receive benefits or reimbursement under a policy of insurance or other indemnity agreement.
(II) (A) A court may award a victim restitution for a deductible amount under his or her policy of insurance.
(II) Nothing in this paragraph (d) shall prohibit a nonowner driver or passenger in the vehicle from being awarded restitution if the driver or passenger was not covered by his or her own medical payments coverage policy.
(e) (I) Notwithstanding any provision of law to the contrary, an insurance company, risk management fund, or public entity shall not be obligated to defend a defendant in a hearing concerning restitution. No court shall interpret an indemnity or insurance contract so as to obligate an insurance company, risk management fund, or public entity to defend a defendant at arestitution hearing absent a specific agreement.
(II) Notwithstanding any provision of law, indemnity contract, or insurance contract to the contrary, an insurance company, risk management fund, or public entity shall not be obligated to pay or otherwise satisfy a civil judgment entered pursuant to this part 6, or to indemnify a defendant for an amount awarded in a restitution order.
(f) Nothing in this article shall be construed to limit or abrogate the rights and immunities set forth in the “Colorado Governmental Immunity Act”, article 10 of title 24, C.R.S.
[HMS – Section (g) provides for reinmbursement by a Colorado criminal Defendant for funds paid to victims out of the state victim’s compensation fund.]
(g) The provisions of this subsection (8) shall not preclude the court, pursuant to article 4.1 of title 24, C.R.S., from ordering restitution to reimburse an expenditure made by a victim compensation fund.
(9) For a conviction for human trafficking for involuntary servitude, as described in section 18- 3-503, or for human trafficking for sexual servitude, as described in section 18-3-504, the court shall order restitution, if appropriate, pursuant to this section even if the victim is unavailable to accept payment of restitution.
(10) (a) If, as a result of the defendant’s conduct, a crime victim compensation board has provided assistance to or on behalf of a victim pursuant to article 4.1 of title 24, C.R.S., the amount of assistance provided and requested by the crime victim compensation board is presumed to be a direct result of the defendant’s criminal conduct and must be considered by the court in determining the amount of restitution ordered.
(b) The amount of assistance provided is established by either:
(I) A list of the amount of money paid to each provider; or
(II) If the identity or location of a provider would pose a threat to the safety or welfare of the victim, summary data reflecting what total payments were made for:
(A) Medical and dental expenses;
(B) Funeral or burial expenses;
(C) Mental health counseling;
(D) Wage or support losses; or
(E) Other expenses.
(c) Records of a crime victim compensation board relating to a claimed amount of restitution are subject to the provisions of section 24-4.1-107.5, C.R.S.
Colorado Criminal Restitution Law – Collecting Unpaid Pre- & Post Judgement Interest – An Unfair Turn In The Law
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