People v. Shifrin
2014 WL 785220
Colo. Ct. App.2014Background
- CCPA action against Leonid Shifrin and several affiliated defendants for a pattern of deceptive trade practices related to option ARM loans.
- Attorney General alleged defendants and related entities engaged in misleading advertising, undisclosed loan terms, and misrepresented rates to steer consumers into option ARM loans.
- Trial court directed verdict in favor of Shifrin after the Attorney General rested; remaining defendants faced injunctive relief, civil penalties, restitution, disgorgement, and attorney fees.
- Court admitted representative consumer affidavits but later held many affidavits inadmissible hearsay, leading to recalculation of damages and remand.
- Attorney General cross-appealed the directed verdict against Shifrin and sought discovery sanctions; issues on jury trial, damages, and setoff were central to the appeal and cross-appeal.
- On appeal, the court (1) vacated parts of damages due to inadmissible affidavits, (2) remanded for recalculation, and (3) remanded for default judgment considerations and possible reconsideration of the directed verdict as a Rule 41(b)(1) dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Right to a jury trial under COPA | AG argues relief is equitable; jury trial not required. | Shifrin asserts entitlement to jury trial under COPA for legal remedies. | No right to jury trial; COPA action primarily equitable in nature. |
| Use of representative witnesses to prove CCPA violations | AG may use representative borrowers to prove pattern and liability. | Defendant challenges sufficiency and preservation without full record. | Representative witness testimony upheld; not required to present all borrowers. |
| Admissibility of non-testifying borrowers' affidavits and CRE 807 | Affidavits aid efficiency; admission appropriate to prove remedies. | Affidavits are hearsay; procedural missteps; CRE 807 not satisfied. | Affidavits inadmissible; remand for recalculation of restitution and disgorgement without affidavits; CRE 807 not satisfied. |
| Restitution and disgorgement calculations under 6-1-110(1) | Equitable remedies may compensate or restore and deter; comprehensive remedy allowed. | Remedies should be limited; method may not reflect complete statutory intent. | Restitution and disgorgement recalculation required; formula upheld as reasonable but limited by inadmissible affidavits. |
| Setoff against Johnson settlement under Uniform Contribution Act | No setoff; State enforces public interest remedies; not tort damages. | Should reduce liability by Johnson settlement amount. | No setoff; CCPA remedies are not tort damages; setoff not available. |
Key Cases Cited
- May Department Stores Co. v. State ex rel. Woodard, 863 P.2d 967 (Colo.1993) (CCPA primarily equitable; civil penalties punish and deter deceptive acts)
- Berger v. Dixon & Snow, P.C., 868 P.2d 1149 (Colo.App.1993) (restitution is equitable relief; civil penalties separate from damages)
- Stuart v. N. Shore Water & Sanitation Dist., 211 P.3d 59 (Colo.App.2009) (de novo review of jury trial right in civil actions)
- First Nat'l Bank of Meeker v. Theos, 794 P.2d 1055 (Colo.App.1990) (civil jury right in COPA actions; context of equity vs. legal relief)
- Watson v. Public Service Co. of Colo., 207 P.3d 860 (Colo.App.2008) (determinative issue is character of relief, not always damages)
- State ex rel. Suthers v. Mandatory Poster Agency, Inc., 260 P.3d 9 (Colo.App.2009) (tests for representation of witnesses in CCPA context)
- U.S. Fax Law Center, Inc. v. Henry Schein, Inc., 205 P.3d 512 (Colo.App.2009) (interpretation of CCPA in Colorado context)
- W. Food Plan, Inc. v. Dist. Court, 198 Colo. 251 (Colo.1979) (CCPA deterrence and equitable nature; damages and penalties)
- Coors v. Sec. Life of Denver Ins. Co., 91 P.3d 393 (Colo.App.2003) (CCPA enforcement mechanisms and remedies context)
- Figgie Int'l, Inc. v. FTC, 994 F.2d 608 (3d Cir.1993) (trustworthiness and reliability considerations for residual hearsay exception)
- Fed. Trade Comm'n v. Kitco, 612 F. Supp. 1280 (D. Minn. 1985) (admissibility of consumer complaints and restitution context)
- United States v. Universal Mgmt. Servs., Inc., 191 F.3d 750 (6th Cir. 1999) (disgorgement deterrence and equitable relief context)
- May Dep't Stores Co. v. Williams, 805 P.2d 419 (Colo.1991) (distinction between civil penalties and exemplary/punitive damages; May precedent)