People v. Mendro
731 P.2d 704
Colo.
1987
Check Treatment

The PEOPLE of the State of Colorado, Plaintiff-Appellant, v. Joseph W. MENDRO, Defendant-Appellee.

No. 85SA177.

Supreme Court of Colorado, En Banc.

Jan. 20, 1987.

732 P.2d 704

quired if tenant had a duty to obtain “a prospective tenant-buyer,” and, in response, the court ordered the tenant to present a “lease from the prospective buyer” within five days.

Both Mr. Thompson and Pollock testified that when Pollock offered to buy the home during the five-day period, he was asked to enter into a lease, and he refused. Mr. Thompson then refused to approve the on-site sale. Mr. Thompson also testified that, had Pollock entered into a lease applying for tenancy, he would have considered it just as he considered all other lease applications, taking the court‘s interpretation of paragraph seven (that the park could not refuse consent to an on-site sale unreasonably) into account.

Despitе this uncontradicted testimony, the trial court found the park‘s refusal to consent to the on-site sale was “solely” due to animosity toward tenant. Based on this finding, the court held the park in breach for its refusal to allow an on-site sale to Pollock after the F.E.D. hearing.

While there is evidence tо support a finding of animosity between the park and tenant prior to the court‘s F.E.D. order, there is no evidence in the record to show animosity after the court‘s order. Both Pollock and Thompson testified that the on-site sale to Pollock was not refused until after Pollock failed to tеnder a signed lease. The park was simply holding tenant to the trial court‘s order that tenant find a tenant-buyer who was willing to sign a lease.

Thus, there is no evidence to support the finding that the sole reason for the refusal to allow on-site sale to Pollock was due to animosity toward tenant. A fаctual finding that has no support in the record cannot serve as the basis for a judgment. C.R.C.P. 52(a); (where no competent evidence to support trial court‘s factual finding, judgment based thereon reversed on appeal). The park cannot be in breach for simply holding the tenant to the terms of the trial court‘s order.

Since tenant never produced another tenant-buyer, we do not reach the issue of whether the park could have unreasonably refused an on-site sale to such a prospective tenant-buyer, had one been forthcoming.4

The judgment of the court of appeals is reversed as to the breach of lease claim.

Barney Iuppa, Dist. Atty., Lovice D. Riffe, Deputy Dist. Atty., Colorado Springs, for plaintiff-appellant.

J. Gregory Walta Colorado Springs, for defendant-appellee.

VOLLACK, Justice.

The People appeal the trial court‘s acquittal of the defendant on felony theft, pursuant to section 18-4-401, 8B C.R.S. (1986). The trial court, sitting as the trier of fact, found the People sustained their burden of proof beyond a reasonable doubt to all the elements of theft. However, the court ruled that a prosecution under the theft statute for violation of the mechanic‘s lien statute, section 38-22-127, 16A C.R.S. (1982), required proof of an additional element of mens rea. The trial court ruled that the prosecution must prove that the defendant knew the requirements ‍​​​‌‌‌‌​​​​‌​‌‌‌‌​​​‌​‌​​​‌‌​‌‌​‌‌‌​‌​‌​​‌‌​‌‌‌​‍of the mechanic‘s lien statute and that his acts constituted the wrongful use of his customers’ money. We disapprove the judgment.

I.

The defendant was the owner of a remodeling business loсated in Colorado Springs, now defunct. Evidence at trial showed that the defendant took money from various clients as an advance payment for work to be performed, but used a considerable portion of the money advanced to pay his ongoing operating expenses and bank loans. The defendant was charged with felony theft as a result of violating section 38-22-127 of the general mechanic‘s lien statute, 16A C.R.S. (1982). Section 38-22-127 states in pertinent part:

(1) All funds disbursed to any contractor or subcontractor under any building, construction, or remodeling contract or on any construction project shall be held in trust for the payment of the subcontractors, material suрpliers, or laborers who have furnished materials, services, or labor, who have a lien, or may have a lien, against the property, or who claim, or may claim, against a principal and surety under the provisions of this article and for which such disbursement was made.

(2) This section shall not be сonstrued so as to require any such contractor or subcontractor to hold in trust any funds which have been disbursed to him for any subcontractor, material supplier, or laborer who claims a lien against the property or claims against a principal and surety who has furnished a bond under the рrovisions of this article if such contractor or subcontractor has a good faith belief that such lien or claim is not valid or if such contractor or subcontractor, in good faith, claims a setoff, to the extent of such setoff.

....

(5) Any person who violates the provisions of subsections (1) and (2) оf this section commits theft, as defined in section 18-4-401, C.R.S. 1973.

The trial court, sitting as the finder of fact, concluded that the prosecution had proved each of the elements of theft as set out in the theft statute, section 18-4-401, and that the defendant had failed to comply with the requirements of the mechanic‘s lien statute. However, the court ruled that the prosecution was required to prove “something more” than the elements of theft and the defendant‘s failure to comply with the requirements of the mechanic‘s lien statute. The trial court found that the defendant did not use his customers’ money for his own personal use, but used it to pay his ongoing operating expenses and bank loans at the recommendation of his bank‘s lawyer, his accountant, and his friend and financial confidant. The court also found that the defendant was not aware of the mechanic‘s lien statutory requirement that a certain amount of each customer‘s money must be held in trust to pay materialmen and laborers.

The trial court ruled that in order to criminally prosecute the defendant for violation of the mechanic‘s lien statute, a civil statute, the prosecution must prove that the defendant knew that his aсts constituted wrongful use of customers’ money. The court relied on , and , to conclude that the prosecution had failed to establish beyond a reasonable doubt the existence of a culpable mental state on the part of the defendant. The prosecution contends that it is sufficient that the defendant “knowingly” used the money in a manner inconsistent with the owners’ use or benefit, under section 18-4-401(1)(b), and that the trial court found that element to have been met. The prosecution also contends that the trial court erred in requiring the defendant to know and ignore the requirements of section 38-22-127 in order to prove that there was guilty knowledge.

II.

A prosecution for a violation of section 38-22-127 must be prosecuted under section 18-4-401. . See § 38-22-127(5), 16A C.R.S. (1982). In order to сonvict, the prosecution must prove each of the elements of the crime of theft as set out in section 18-4-401, including the requisite intent. . All of the subsections of 18-4-401, except (d), contain an express culpable mental state element.1 The trial court interpreted People v. Piskula to require that the prosecution prove an additional element ‍​​​‌‌‌‌​​​​‌​‌‌‌‌​​​‌​‌​​​‌‌​‌‌​‌‌‌​‌​‌​​‌‌​‌‌‌​‍of mens rea in a prosecution for the violation of section 38-22-127. In People v. Piskula, we stated, “When the means used to perpetrate this theft are those of deception, the requisite mental state is necessarily the intent to defraud.” . The trial court interpreted this language to require the prosecution to prove that the defendant had the specific intent to defraud his customers when he violated

section 38-22-127. In this interpretation, the trial court erred.

In People v. Piskula, we held that a prosecution for the violation of section 38-22-127 did not conflict with the constitutional prohibition of imprisonment for civil debt. We also stated that “the critical factor in determining whether or not a criminal prosecution falls within the fraud exception to this constitutional prohibition is the existence of the intent to defraud as an element of the offense.” . We have since rejected this suggestion that all theft by deception prosecutions require proof of intent to defraud, and have held instead that “the Genеral Assembly has established alternative mental state requirements for the offense of theft by deception.” . Section 38-22-127(5) mandates that a person who violates its provisions commits theft under section 18-4-401. Section 18-4-401 requires proof of a culpable mental state as well as proof of prohibited conduct for cоnviction of any of the offenses enumerated therein. ; see also . Here, the trial court found that the prosecution had proved beyond a reasonable doubt all the elements of theft pursuant to section 18-4-401. For the reasons set forth in Part III, the trial court improperly entered the judgment of acquittal.

III.

The People also claim that the trial court erred in ruling that the defendant must be shown to have had knowledge of the requirements of section 38-22-127 and have failed to comply with those requirements in order to be convicted of theft. The trial court stated in its findings of fact and conclusions of law that:

[I]f it could be shоwn that Mr. Mendro knew of the requirements of the mechanic‘s lien statute that that money was supposed to be held in trust, ... and had he then chosen to ignore that law, ... then in my judgment he could have been found guilty of theft and should have been found guilty of theft. But without that guilty knowledge, in my judgment, he cannot be.

We have long rеcognized that a mistake of law is no defense ‍​​​‌‌‌‌​​​​‌​‌‌‌‌​​​‌​‌​​​‌‌​‌‌​‌‌‌​‌​‌​​‌‌​‌‌‌​‍to the criminal culpability of a person‘s actions. ; . In addition, section 18-1-504(2) states in pertinent part:

A person is not relieved of criminal liability for conduct because he engages in that conduct under a mistaken belief that it does not, as a matter of law, constitute an offense....

The defendant‘s violation of section 38-22-127 is not immune from prosecution because of his ignorance of that statute‘s existence. However, evidence that the defendant violated 38-22-127 by itself does not lead to criminal liability. The People must prove all elements of the theft statute, section 18-4-401, to obtain conviction.

To the extent that the trial court required the Pеople to prove a culpable mental state element beyond that required in the theft statute, and held that the defendant must know the requirements of the mechanic‘s lien statute to prove culpable mental state, we disapprove of the judgment.

LOHR, J., dissents, and QUINN, C.J., joins in the dissent.

DUBOFSKY, J., does not participate.

LOHR, Justice, dissenting:

Section 38-22-127, 16A C.R.S. (1982), requires that a contractоr on any construction project hold in trust for the payment of subcontractors, material suppliers and laborers funds disbursed to the contractor in payment for work performed on the project. The statute further provides that any person who violates the requirement that such funds be hеld in trust commits theft under section 18-4-401, 8B C.R.S. (1986). The majority holds that a contractor can be convicted of theft under this statutory scheme notwithstanding a complete absence of knowledge of the requirement that payment for construction work be held in trust. I would not impute to the legislature the intent to impose criminal liability in absence of any wrongful intent by a contractor, and therefore I respectfully dissent.

The majority holds that a contractor can be found guilty of theft for using funds disbursed to him under a construction contract while being completely unaware of his statutorily-imposed responsibility to hold the funds in trust. In dоing so, the majority has allowed the imposition of criminal liability on one who lacks a culpable mental state. “Generally, in order to subject a person to criminal liability for a felony or serious misdemeanor, there must be a concurrence of an unlawful act (actus reus) and a culpable mental state (mens rea).” . See ; ; .

The theft statute, it is true, requires a culpable mental state. A person is guilty of theft only if he “knowingly obtains or exercises control over anything of value of another without authorization” and “intends to deprive the other person permanently of the use оr benefit of the thing of value.” § 18-4-401(1), 8B C.R.S. (1986). The majority holds that the requisite culpable mental state can be predicated on the legal fiction that the contractor in this case was aware of the requirements of section 38-22-127, or that it is irrelevant whether he knew of those requirements because ignorance of the law is not a defense. I cannot believe, however, that the legislature intended to impose criminal liability of degrees of seriousness ranging up to a class 3 felony on the basis of legally imputed but factually nonexistent knowledge that funds received in payment for construction work were deemed in law to be held in trust. See (legislature rarely will attempt to impose ‍​​​‌‌‌‌​​​​‌​‌‌‌‌​​​‌​‌​​​‌‌​‌‌​‌‌‌​‌​‌​​‌‌​‌‌‌​‍criminal sanctions on the blameless); § 2-4-201(1)(c), 1B C.R.S. (1980) (in enacting a statute, it is presumed that a just and reasonable result is intended).

It is unnecessary to determine whether the legislature could impose such liability. Rather, in absenсe of a clearcut expression of an intention to do so—an intention I cannot discern from the statutes at issue—I would not construe the statutes to impose criminal liability in circumstances where, as here, the contractor had no actual knowledge of his obligation to hold the funds in trust.

I would affirm the judgment of the trial court.

QUINN, C.J., joins in this dissent.

CONTINENTAL AIR LINES, INC., а Nevada corporation, Petitioner, v. Maynard W. KEENAN, Jr., Respondent.

No. 84SC460.

Supreme Court of Colorado, En Banc.

Jan. 20, 1987.

Notes

1

Section 18-4-401, 8B C.R.S. (1986), states in pertinent part:

Theft. (1) A person commits theft when he knowingly obtains or exercisеs control over anything of value of another without authorization, or by threat or deception, and:

(a) Intends to deprive the other person permanently ‍​​​‌‌‌‌​​​​‌​‌‌‌‌​​​‌​‌​​​‌‌​‌‌​‌‌‌​‌​‌​​‌‌​‌‌‌​‍of the use or benefit of the thing of value; or

(b) Knowingly uses, conceals, or abandons the thing of value in such manner as to deprive the other person permanently of its use or benefit; or

(c) Uses, conceals, or abandons the thing of value intending that such use, concealment, or abandonment will deprive the other person permanently of its use and benefit; or

(d) Demands any consideration to which he is not legally entitled as a condition of restoring the thing of value to the other person.

4

Some states have adopted the Restatement (Second) position only for either residential leases or commercial leases, but not both. For example, California has adopted the position only in the context of commercial leases. . Other states have adopted it only in the context of residential leases. E.g., N.Y. Real Prop. § 226-b (McKinney 1982) (the New York Appellate Division later refused to extend this adoption to commercial leases in ). Still others, Oregon, for example, have adoрted the position only in the context of mobile home parks. Or.Rev.Stat. § 91.890 (1986).

Since different states apply the provision in different (and sometimes mutually exclusive) circumstances, it is clear that the Restatement (Second) position can be seen as serving different policy goals. As such, some jurists havе stated that the decision whether or not to adopt it may better be made by a legislature. See, e.g., (suggesting that “if California is to adopt the [Restatement position], it do so by clear legislative action.“); (by implication).