Ybarra v. Greenberg & Sada, P.C., 2018 CO 81

Plaintiff Francis Ybarra was default-judged in Denver County Court on a negligence (tort) claim brought by State Farm, which was subrogated to its insured’s rights after paying the insured’s loss.
State Farm was represented by respondent law firm Greenberg & Sada, P.C., which obtained the default judgment.
Ybarra sued Greenberg & Sada in Denver District Court alleging violations of the Colorado Fair Debt Collection Practices Act (FDCPA) based on the firm’s efforts to collect the subrogated claim.
The district court dismissed for failure to state a claim, holding a subrogated tort claim is not a “debt” under the Act.
The Colorado Court of Appeals affirmed, reasoning the Act’s undefined term “transaction” implies a business dealing, not a tort, and subrogation does not create a money-obligation debt.
The Colorado Supreme Court granted certiorari and affirmed the court of appeals: a tort (pre-judgment) and an insurance subrogation agreement do not, by themselves, create a consumer “debt” under the FDCPA.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a tort or the insurance subrogation creates a “debt” under the Colorado FDCPA	Ybarra: the tort that produced damages (and/or the insurer’s subrogation contract) is a "transaction" giving rise to an obligation to pay money and thus a debt under the Act	Greenberg & Sada: a tort (absent a judgment or contract) does not create an obligation to pay money; subrogation merely substitutes claim holders and does not create a new debt	Held: A tort alone does not create an obligation to pay money and is not a “debt”; subrogation does not convert a tort into a debt.
Whether a law firm enforcing a subrogated tort claim is a “debt collector” under the Act	Ybarra: by enforcing the subrogated claim, the firm acted as a debt collector subject to the Act	Greenberg & Sada: because the claim is not a “debt,” the firm was not a debt collector under the Act	Held: Because the claim is not a debt, the firm was not acting as a debt collector governed by the Act.

Rector v. City & County of Denver, 122 P.3d 1010 (Colo. App. 2005) (intermediate appellate decision limiting Act to obligations arising from transactions/business dealings)
Vigil v. Franklin, 103 P.3d 322 (Colo. 2004) (elements of negligence and when legal obligation to pay arises)
Marquez v. People, 311 P.3d 265 (Colo. 2013) (undefined statutory terms are given ordinary meaning)
Colo. Dep’t of Transp. v. Brown Group Retail, Inc., 182 P.3d 687 (Colo. 2008) (distinguishing torts from contractual obligations)