Chapter 6 - § 6.2 • COLORADO'S CONSUMER PROTECTION ACT (CCPA) — DECEPTIVE TRADE PRACTICES
| Jurisdiction | Colorado |
Although its adoption was not intended solely for the protection of homeowners, new home purchasers are entitled to the safeguards of Colorado's Consumer Protection Act (CCPA).12 The CCPA prohibits various kinds of deceptive and misleading trade practices in conjunction with the sale or advertisement of goods, property, or services. Penalties include actual damages, treble damages, and attorney fees and costs.
The CCPA prohibits a person in the course of his or her business, vocation, or occupation from, among other things, (1) misrepresenting that property is of a particular standard, quality, or grade if that person knows or should know that it is of another; (2) knowingly or recklessly making a false representation as to the characteristics of property or services; (3) knowingly or recklessly passing off services or property as those of another; (4) refusing or failing to obtain all governmental licenses or permits required to perform the services or to sell the property as agreed to or contracted for with a consumer; (5) knowingly or recklessly making a false representation as to the "approval" or "certification" of services or property; (6) failing to disclose material information concerning goods, services, or property, which information was known at the time of an advertisement or sale, if such failure to disclose was intended to induce the consumer to enter into the transaction; (7) advertising or representing that goods or services are guaranteed without clearly and conspicuously disclosing the nature and extent of the guarantee and the identity of the guarantor; or (8) knowingly or recklessly engaging in any unfair, unconscionable, deceptive, deliberately misleading, false, or fraudulent act or practice.13 C.R.S. § 6-1-105(1)(e) prohibits misrepresentations that have the capacity or tendency to deceive, even if they do not actually deceive every consumer exposed to them.14 "Recklessly" as used in the CCPA's deceptive trade practices section means a "reckless disregard for the truth or falsity of a statement or advertisement."15
In a U.S. District Court for Colorado case, the court identified four elements to establish a non-disclosure claim under C.R.S. § 6-1-105(1)(u): (1) the defendant failed to disclose information concerning goods, services, or property to consumers; (2) the defendant knew this information at the time of the advertisement or sale of the goods, services, or property; (3) the non-disclosed information was material; and (4) the defendant did not disclose this information with the intent to induce the consumer to enter into a transaction.16
The CCPA also provides that a person may not advertise or otherwise represent that his or her services, property, or goods are guaranteed without clearly and conspicuously disclosing the nature and extent of the guarantee, any material conditions or limitations in the guarantee that are imposed by the guarantor, the manner in which the guarantor will perform the guarantee, and the identity of the guarantor. A guarantee violates the CCPA if, when applied under normal conditions, the guarantee cannot be practically fulfilled, or is for such a period of time or is otherwise of such a nature as to have the capacity and tendency of misleading purchasers or prospective purchasers into believing that the goods or services so guaranteed have a greater degree of serviceability, durability, or performance capability in actual use than is true in fact. These provisions of the CCPA apply not only to guarantees but also to warranties, disclaimers of warranties, purported guarantees and warranties, and any promise or representation in the nature of a guarantee or warranty, and, thus, may apply to representations concerning home warranty services.17
An "advertisement" includes "the attempt by publication, dissemination, solicitation, or circulation, visual, oral, or written, to induce directly or indirectly any person to enter into any obligation or to acquire any title or interest in any property."18 "Property" means "any real or personal property, or both real and personal property, intangible property, or services."19 "Sale" means "any sale, offer for sale, or attempt to sell any . . . property for any consideration."20 Where a subsection of the CCPA prohibits a deceptive trade practice only to "goods and services," courts will extend the application of that subsection to the sale of "property."21
However, where the statement alleged to constitute a misrepresentation properly may be characterized as a contractual promise as opposed to a tortious misrepresentation, the distinction between tort and contract law will be observed, and no claim will lie under the CCPA.22 "A promise cannot constitute a misrepresentation unless the promisor did not intend to honor it at the time it was made."23
The CCPA was enacted in 1969, and many of its provisions are drawn from the 1966 Revised Uniform Deceptive Trade Practices Act (UDTPA).24 Other states that have adopted some variation of the 1966 revised version of the UDTPA include Georgia, Hawaii, Idaho, Louisiana, Massachusetts, Minnesota, Mississippi, Nebraska, New Mexico, Ohio, Oregon, and Wyoming.25 The careful practitioner should allege with specificity the factual bases for a CCPA claim to avoid possible dismissal under C.R.C.P. 9(b).26
§ 6.2.1—1999 Amendments
In 1999, the General Assembly amended the CCPA in several significant ways, effective May 18, 1999. The amended law limits the standing of persons entitled to sue to: (1) actual or potential consumers of the defendant's goods, services, or property who are injured as a result of the deceptive trade practice; (2) any successor in interest to an actual consumer; and (3) a person injured as a result of a deceptive trade practice in the course of that person's business or occupation.27 The Colorado Court of Appeals has held that under C.R.S. § 6-1-113(1)(b), the only assignees authorized to bring an action are those whose assignors were actual consumers who purchased the defendant's goods, services, or property.28
A "person," within the meaning of the CCPA, specifically includes a corporation, and thus, corporations have standing to sue for deceptive trade practices.29 Legislative recognition of such standing also appears to be reflected in the statute's language allowing a person "injured as a result of [a] deceptive trade practice" "in the course of [that] person's business or occupation" to sue.30 The Colorado Attorney General's office took the position before the legislature in 1999, and has taken the position in briefs before Colorado's appellate courts, that the CCPA's protections are intended to extend to business entities injured in their capacity as "consumers" of another's goods, property, or services.
Damages recoverable under the CCPA equal the greater of the amount of, (1) "actual damages sustained, including prejudgment interest of either eight percent per year or at the rate provided in section 13-21-101, whichever is greater, from the date the claim . . . accrued"; (2) $500; or (3) three times the amount of actual damages, but only if the evidence clearly and convincingly establishes that the person liable under the CCPA engaged in "bad faith" conduct.31 "Bad faith" conduct means "fraudulent, willful, knowing, or intentional conduct that causes injury."32 "Knowingly," in other contexts, has been held to mean: (1) when a person is aware that his or her conduct is of such a nature; or (2) that a person's conduct is practically certain to cause the result.33
In Crowe v. Tull, the Colorado Supreme Court indicated in dicta that a CCPA violation requires proof that the defendant knowingly engaged in a deceptive trade practice.34 Subsequently, Colorado's Court of Appeals held that not all CCPA subsections require that a person "knowingly" commit a deceptive trade practice.35 At least three CCPA provisions, on their face, suggest that proof of something less than the defendant "knowingly" committing a deceptive practice is sufficient to impose liability.36 However, other Colorado Court of Appeals panels have interpreted Crowe as requiring an intent to deceive.37 The CCPA was amended in 2019 to allow recovery for either intentional or reckless violations of four kinds of deceptive trade practices, as well as for certain "catch-all" violations where a person "knowingly or recklessly engages in any unfair, unconscionable, deceptive, deliberately misleading, false, or fraudulent act or practice."38
§ 6.2.2—CDARA II's Effect on CCPA Claims
CDARA II protects a construction professional against treble damage claims if he, she, or it establishes at trial that: (1) its complying pre-suit offer to settle a claim for a sum certain equals 85 percent or more of the amount awarded to the claimant as actual damages; (2) its reasonable cost to complete its complying pre-suit offer to repair the defect and resulting damage is 85 percent or more of the amount awarded to the claimant as actual damages; or (3) it complied with the terms of an accepted pre-suit offer to remedy or to settle the claim.39 For a fuller discussion of this aspect of the law, see "CCPA Treble Damages and Attorney Fee and Litigation Expense Claims" in § 2.2.2.
§ 6.2.3—Who May Sue
The CCPA is available to any person in a civil action against any person who engaged in or caused another to "engage in any deceptive trade practice listed in" C.R.S. § 6-1-105.40 "Person" under the CCPA includes individuals and any other legal entities.41 Third-party non-consumers have standing to bring actions under the CCPA, provided they can demonstrate that (1) they have suffered injury in fact to a legally protected interest as contemplated by the CCPA, (2) injury in fact resulted from the alleged action of the defendant,42 and (3) they otherwise meet the CCPA's statutory standing requirements.43
Under the pre-1999 version of the...
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