Judicial Arbiter Group, Inc. 1601 Blake Street, Suite 400 Denver ...
Judicial Arbiter Group, Inc. 1601 Blake Street, Suite 400 Denver, Colorado 80202 Phone: 303-572-1919 Facsimile: 303-571-1115 In Re the Matter of: Helen Collins.
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COURT USE ONLY
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Boyd N. Boland – Hearing Officer JAG Case No. 2015-1169A
INITIAL DECISION I. SUMMARY OF THE CASE Helen Collins is a member of the City Council of the City of Colorado Springs, Colorado. On January 21, 2015, the Office of the City Attorney on behalf of the City of Colorado Springs filed a formal complaint against Ms. Collins (the “Formal Complaint”) with the City’s Independent Ethics Commission (the “IEC”). The Formal Complaint arose from a series of events in which Ms. Collins acted as a pass-through in a real estate transaction involving her friend and political supporter, Douglas Bruce, and alleged that Ms. Collins violated the City’s Code of Ethics by (1) engaging in outside activities that conflicted with her official duties and responsibilities; (2) tolerating waste, fraud, abuse or corruption in government or in its businesses, operations, or services; (3) engaging in actions that may create, or do create, the appearance that Ms. Collins violated the law or the City’s ethical standards; and (4) engaging in an activity that may create, or does create, the appearance of impropriety.
The IEC conducted an investigation and forwarded to the City Council its recommendation, finding that Ms. Collins had violated the City’s Code of Ethics. On June 10, 2015, the City Council issued formal ethics charges against Ms. Collins consistent with the recommendation of the IEC. Ms. Collins responded to the ethics charges, disputed them, and requested an evidentiary hearing. The City Council elected to appoint a hearing officer to conduct the evidentiary hearing. The evidentiary hearing occurred before me on January 5-6, 2016, and the parties were allowed through January 27, 2016, to file written closing arguments. Now, having the benefit of all of the evidence admitted during the evidentiary hearing and the arguments of the parties, I find by clear and convincing evidence and conclude that Ms. Collins violated the City’s Code of Ethics. II. THE FORMAL ETHICS CHARGES The City of Colorado Springs Code of Ethics (the “Code of Ethics”) is contained in Article 3 of the Colorado Springs City Code. Section 1.3.106 of the Code of Ethics addresses conflicts of interest, and provides: Every covered person owes a duty of loyalty to the City. A conflict of interest exists when there is any personal or financial relationship that could influence or be perceived to influence the representation or conduct of business for, or on behalf of, the City. A conflict of interest also exists when any improper and undue influence can be exercised, or be perceived to be exercised, concerning a direct action involving the City. A conflict of interest may exist when there is an appearance of impropriety. No conflict of interest is allowed. A. No covered person shall hold financial interests that conflict with the conscientious performance of duty.
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B. No covered person shall engage in business activities including financial transactions using nonpublic government or enterprise private information, or allow the improper use of that information to further any private interest or gain. C. No covered person shall knowingly make unauthorized commitments or promises of any kind purporting to bind the City. D. No covered person shall give preferential treatment to any private organization or individual. E. No covered person shall directly or indirectly participate in any matter involving the City where they or a member of their family has a direct or indirect substantial financial interest. If a direct or indirect substantial financial interest exists, the covered person shall make known that interest to the appropriate persons and shall refrain from participating in the matter as it is dealt with by the City. F. No covered person shall engage in outside employment or activities, including seeking or negotiating for employment that conflicts with their official duties and responsibilities. G. No covered person shall tolerate waste, fraud, abuse and corruption in government or any of its businesses, operations or services. H. No covered person shall engage in any actions that may create, or do create, the appearance that they are violating the law or ethical standards. I. No covered person shall engage in any activity that may create, or does create, the appearance of impropriety. The City Council issued formal ethics charges against Ms. Collins on June 9, 2015, asserting that she violated the following provisions of the Code of Ethics: City Code 1.3.106, paragraph (G) that provides “no covered person shall tolerate waste, fraud, abuse and corruption in government or in any of its business [sic], operations or services.” City Code 1.3.106, paragraph (H) that provides “no covered person shall engage in any actions that may create, or do
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create, the appearance that they are violating the law or ethical standards.” City Code 1.3.106, paragraph (I) that provides “no covered person shall engage in any activity that may create, or does create, the appearance of impropriety.” Exh. 6.1 III. PRIOR PROCEEDINGS On January 21, 2015, the Office of the City Attorney on behalf of the City of Colorado Springs filed a Formal Complaint against Helen P. Collins asserting that she had violated the Ethics Code. Formal Complaint at p. 1. The Formal Complaint alleged in relevant part: On October 25, 2011, the City obtained a judgment against Douglas Bruce (“Bruce”) in the amount of $15,437.50 plus post-judgment interest in case number 11cv231 (“Judgment #1”). The City recorded Judgment #1 with the El Paso County Clerk and Recorder on February 10, 2012. * * * On November 25, 2014, Jessica Sheley of Empire Title left a voicemail message for Anne Turner (Senior Attorney, City Attorney’s Office) explaining that Bruce had a real estate closing coming up and that she would need the payoff amount to satisfy Judgment #1. Ms. Turner returned her call on November 26, 2014, confirming that the judgment remained unsatisfied and had grown to approximately $21,000. Ms. Sheley stated that the proceeds from the sale scheduled for December 8, 2014 would be sufficient to satisfy Judgment #1 in full and asked Ms. Turner to send her a memo confirming the amount required to satisfy the judgment. Ms. Turner supplied Ms. Sheley with the memo on Monday morning, December 1, 2014, stating that by December 8, 2014, the judgment will have grown to $21,205.09 and accrues interest at a rate of $4.60 per day. Ms. Sheley responded to Ms. Turner, stating that “[i]f all goes well, we should close on Monday, the 8th.” Later in the day on December 1, 2014 (5:50 PM), the court in Bruce’s active lawsuit (case number 13cv268) granted in part Reference is to those exhibits admitted into evidence at the evidentiary hearing on January 5-6, 2016, unless otherwise indicated. 1
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the City’s bill of costs, ordering Bruce to pay the City $7,569.61 (“Judgment #2”). The City’s outside counsel received the order electronically, but because Bruce represents himself, the court mailed a copy of the order to his record address--a P.O. Box. On Thursday, December 4, 2014 at 4:18 PM, a warranty deed transferring 1240 Samuel Point, Colorado Springs, Colorado (the “Property”) from Bruce to Helen P. Collins (“Collins”) was recorded with the El Paso Clerk and Recorder. Meanwhile, at 4:30 PM on that same day (Thursday December 4), the City filed a proposed order for judgment against Bruce for Judgment #2 entered earlier in the week plus postjudgment interest. The court entered the judgment on Friday morning, December 5, 2014 at 9:14 AM. On December 5, 2014, Collins signed a deed conveying the Property to Bonnie Langston. The City obtained a transcript of Judgment #2 and recorded it with the El Paso County Clerk and Recorder at 3:58 PM on Friday, December 5, 2014. Anne Turner promptly called Jessica Sheley at Empire Title at approximately 4:10 PM, notifying her of the City’s newly-recorded transcript of Judgment #2 and court orders. Ms. Sheley again asked for a payoff statement as had been done for Judgment #1, which Ms. Turner provided on Monday, December 8, 2014 at 8:42 AM. At 9:17 AM, Ms. Sheley confirmed receipt of Ms. Turner’s memo by email, stated that the closing was supposed to occur that afternoon, and that the City should receive its payoff on Tuesday, December 9. At approximately 9:45 AM on Monday, December 8, 2014, Anne Turner received a phone call from Bill McAfee, president of Empire Title. Mr. McAfee informed Ms. Turner for the first time that Bruce had transferred the Property to Collins on December 4, 2014, before the City recorded Judgment #2, and, consequently, Empire Title would not be satisfying Judgment #2 with the Property sale proceeds. He said that Bruce must have gotten some bad legal advice, because Bruce thought that by transferring the Property to Collins, he would avoid paying the City’s judgment (Judgment #1). In the afternoon of December 8, 2014, Bonnie Langston closed on the Property, paying Collins $140,000. Bruce was seen at
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City Council Chambers during the break in the work session convened that day. The deed conveying the Property from Collins to Langston was recorded with the El Paso County Clerk and Recorder on December 9, 2014 at 8:37 AM. A check drawn from the Empire Title escrow account made payable to the City in the amount of $21,214.29 ($21,205.09 plus two additional days of interest) in satisfaction of Judgment #1 was delivered to the City Attorney’s Office Tuesday morning, December 9. The check record reflects the “seller” as “Helen P. Collins.” As a result of the recording of the December 4, 2014 warranty deed from Bruce to Collins, the recorded transcript of Judgment #2 did not become a lien on the Property later conveyed to Bonnie Langston on December 8, 2014. The recorded deed from Bruce to Collins thereby operated to hinder or delay the City’s collection of Judgment #2. Formal Complaint at pp. 2-4. The Formal Complaint alleged violations of “multiple provisions of section 1.3.106, including section F (“[n]o covered person shall engage in outside . . . activities . . . that conflicts with their official duties and responsibilities”); section G (“[n]o covered person shall tolerate waste, fraud, abuse and corruption in government or any of its businesses, operations or services”); section H (“[n]o covered person shall engage in any actions that may create, or do create, the appearance that they are violating the law or ethical standards”); and section I (“[n]o covered person shall engage in any activity that may create, or does create, the appearance of impropriety”). Formal Complaint at p. 4. After investigating the Formal Complaint, the IEC forwarded its recommendation of ethics charges to the City Council. The IEC found that Ms. Collins did not violate §1.3.106(F), stating:
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The closing was to occur at the same time Collins’s duties called for her to be in a Council Meeting. Instead of skipping the meeting, she made arrangements for the closing to occur as scheduled while she was at the Council meeting to perform her duties. The [Formal] Complaint does not specify how the [City Attorney’s Office] believes Collins violated this provision, but the Commission does not find any way that the real estate transaction conflicted with Collins’s official duties and responsibilities. IEC Recommendation at p. 5. However, the IEC did find that Ms. Collins violated the Code of Ethics, as follows: The Commission finds that Collins violated Code §1.3.106(G), (H), and (I). Collins participated in a real estate transaction, the intent of which was to prevent the City from collecting Judgment #1, resulting in the City being unable to collect Judgment #2 at the closing, and did so because Seller had helped her get elected to office. Collins placed her friendship with Seller above her duty of loyalty to the city and her ethical obligations, resulting in harm to the City’s interests. Id. at p. 7. On June 10, 2015, the City Council notified Ms. Collins that it had issued formal ethics charges against her based on the recommendation of the IEC. The written notice states in part: Please be advised that City Council, at its June 9, 2015 regular meeting, elected to issue formal ethics charges on the recommendations of the Independent Ethics Commission in the Investigation of Complaint 2015-01. Specifically, those charges are City Code 1.3.106, paragraph (G) that provides “no covered person shall tolerate waste, fraud, abuse and corruption in government or in any of its business [sic], operations or services.” City Code 1.3.106, paragraph (H) that provides “no covered person shall engage in any actions that may create, or do
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create, the appearance that they are violating the law or ethical standards.” City Code 1.3.106, paragraph (I) that provides “no covered person shall engage in any activity that may create, or does create, the appearance of impropriety.” Exh. 6. IV. THE BURDEN OF PROOF Resolution No. 58-13 is a resolution of the Colorado Springs City Council approving procedures for the investigation and hearing of ethics complaints under the Code of Ethics. Among other things, the Resolution establishes that “the evidentiary burden shall be clear and convincing evidence.” Resolution No. 58-13 at §5(A). Under Colorado law, a fact is proven by clear and convincing evidence if it is shown to be “highly probable” and the fact-finder has no “serious or substantial doubt.” CJI-Civ. 3:2 (2015). V. THE STANDARD TO BE APPLIED TO THE CHARGES CONCERNING APPEARANCES Two of the formal ethics charges brought against Ms. Collins involve appearances--(1) the appearance of legal or ethical violations and (2) the appearance of impropriety. In her written closing argument, captioned “Objections to January 2016 Collins Hearing,” Ms. Collins states: The [hearing officer] seems to insert himself as a witness. Perceptions and appearances are the heart of the charges against Collins. That is absurd. The [hearing officer] cannot testify and be subject to cross-examination about his perceptions of possible improprieties. . . . Collins is entitled to know who had those views. The issue is real acts, not possibilities, perceptions, and appearances. Collins Closing Argument at ¶24 (original emphasis). 8
The IEC argues in its Closing Argument that the proper standard to be applied in determining the charges concerning appearances is an objective standard, citing authorities addressing when a judge must recuse or be disqualified based on an appearance of impropriety. I agree with the IEC that cases involving judicial disqualification provide guidance in determining the appropriate standard to be applied to the ethics violations charged here based on appearances. The purposes of the Colorado Springs Code of Ethics and the Code of Judicial Conduct governing judicial conduct are similar. Compare Code of Ethics at §1.3.101(B) (stating that “[t]he City of Colorado Springs is committed to complete honesty, utmost integrity, fair dealing and ethical behavior”), with Colorado Code of Judicial Conduct at §1.2 (stating that its purpose is to “promote[] public confidence in the independence, integrity, and impartiality of the judiciary”). Accordingly, I conclude that the test for whether there is an appearance of misconduct under the Code of Ethics is whether a reasonable person, knowing all relevant facts, would harbor doubts about the propriety of Ms. Collins’ actions. See People v. Schupper, 124 P.3d 856, 858 (Colo. App. 2005). VI. FINDINGS OF FACT AND CONCLUSIONS OF LAW Based on the evidence admitted during the evidentiary hearing on January 56, 2015, and the arguments of the parties, I make the following findings of fact and conclusions of law. All findings of fact are made based on clear and convincing evidence.
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A. Ms. Collins Is Subject to the Requirements of the Code of Ethics 1. Ms. Collins was elected to the City Council in April 2013. Trans. at 231:912.2 She was a member of the City Council in December 2014. Id. at 250:8-12. She was a member of the City Council at the time of the evidentiary hearing in January 2016. Id. at 230:17-19. Consequently, at all times relevant to these proceedings, Ms. Collins has been a member of the Colorado Springs City Council. 2. “Covered persons,” as that term is used in the Code of Ethics, includes “elected officials,” Code of Ethics at §1.3.102, and “elected officials” is defined in the Code of Ethics to include “[t]he Mayor and Council Members.” Id. Consequently, Ms. Collins is a “covered person” within the meaning of the Code of Ethics and is subject to its requirements. B. Ms. Collins Agreed To Act As a Pass-Through In a Real Estate Transaction Involving Douglas Bruce, a Friend and Political Supporter 3. On November 22, 2014, Mr. Bruce entered into a Contract to Buy and Sell Real Estate with Bonnie B. Langston. Exh. 7; Trans. at 89. Mr. Bruce was the seller, and Ms. Langston was the purchaser. Id. The transaction involved a condominium known as 1240 Samuel Point, Colorado Springs, Colorado (the “Property”). Id. 4. The sale of the Property was scheduled to close on Monday, December 8, 2014. Trans. at 89:22-90:4. 5. The Property was subject to a lien in favor of the City of Colorado Springs and against Mr. Bruce, which arose out of a civil action designated as 11-CV-231 in
Reference is to the Transcript of Proceedings of the evidentiary hearing on January 5-6, 2016. 2
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the District Court of El Paso County, Colorado. Exh. 1 (“Judgment #1”). The lien was recorded on February 12, 2012. Id. 6. The HUD-1 Settlement Statement prepared in anticipation of the sale of the Property (the “Settlement Statement”) discloses the existence of the lien created by Judgment #1. Exh. 12 at line 504. In order for Mr. Bruce to transfer clear title to Ms. Langston, the lien had to be paid off from the proceeds of the sale. Trans. at 46:13-47:1. 7. Mr. Bruce testified that on December 3, 2014, he realized that he had not seen the Settlement Statement, and the transaction was scheduled to close on December 8, 2014. Trans. 89:22-4. Mr. Bruce contacted his real estate agent, James Block, who arranged for Mr. Bruce to receive a copy of the Settlement Statement on December 3, 2014. Id. at 90:5-7. Consequently, Mr. Bruce first saw the Settlement Statement on December 3, 2014. Trans. at 141:7-19. 8. After looking at the Settlement Statement, Mr. Bruce contacted Ms. Collins and asked her to be an intermediary between himself and the buyer, and Ms. Collins agreed. Trans. at 99:3-19; 105:7-16; 109:19-110:2; 145:8-23; 246:16-21. 9. Ms. Collins and Mr. Bruce are friends, and Mr. Bruce is a political supporter of Ms. Collins. Trans. at 84:10-85:6; 109:16-17; 231:15-233:7. 10. In order to accomplish the pass-through to Ms. Collins, Mr. Bruce prepared a warranty deed transferring title of the Property from himself to Ms. Collins (the “Warranty Deed”). Exh. 13; Trans. at 98:22-99:9. Mr. Bruce recorded the Warranty Deed transferring the Property to Ms. Collins on December 4, 2014, at 4:18:53 p.m. Id.
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11. Empire Title of Colorado Springs, LLC (“Empire Title”), was the closing company for the sale of the Property. Exh. 8; Trans. at 176:12-177:12. 12. Immediately after recording the Warranty Deed, Mr. Bruce took a copy of it to the offices of Empire Title to show that the “property was now in the name of Helen Collins.” Trans. at 142:4-12. 13. Also on December 4, 2014, Mr. Bruce made arrangements to meet Ms. Collins at Empire Title on December 5, 2014, at approximately 10:00 a.m. Trans. at 115:14-18. 14. Mr. Bruce and Ms. Collins appeared together at the offices of Empire Title on December 5, 2014. Trans. at 193:6-18. They requested that Ms. Collins be allowed to complete her side of the closing for the Property at that time. Id. Sharon Myers, the closer for Empire Title, agreed. Id. Mr. Bruce also requested that the check for the proceeds from the sale of the Property be made out in his name. Id. at 147:14-17. Ms. Myers stated that the check had to be made out to Ms. Collins, “because she’s now the owner,” but agreed to allow Mr. Bruce to pick up the check at the closing provided Ms. Collins authorized him to do so. Id. at 147:14-148:2. Ms. Collins signed an authorization for Mr. Bruce to pick up the check. Id. at 147:25148:2; Exh. 15 at p. 2. 15. The closing for the sale of the Property occurred as scheduled on Monday, December 8, 2014. Trans. at 204:25-205:2. Present at the closing were Mr. Bruce; his real estate agent, Mr. Block; the purchaser, Ms. Langston; and Ms. Langston’s real estate agent, Carina Potter. Id. at 205:5-10.
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16. At the conclusion of the closing, Mr. Bruce was given the check for the proceeds from the sale of the Property, Trans. at 148:3-8; he took the check to City Hall, where Ms. Collins was on a break from a meeting of the City Council, id. at 148:9-12; and Ms. Collins endorsed the check to Mr. Bruce. Id.; Exh. 22. Mr. Bruce deposited the proceeds of the check into his bank account. Trans. at 148:12-13. C. The Purpose of the Pass-Through Between Mr. Bruce and Ms. Collins Was To Enable Mr. Bruce to Avoid Paying the Lien Created By Judgment #1 17. The evidence is disputed concerning why Mr. Bruce requested Ms. Collins to act as a pass-through in connection with the sale of the Property. 18. Mr. Bruce and Ms. Collins each testified that they discussed between themselves the purpose of the pass-through. Trans. at 99:12-13; 246:13-21. Their explanations are inconsistent, however. 19. Mr. Bruce testified that he asked Ms. Collins to act as a pass-through for the following reasons: And I told her that the government, I predict, is going to try to mess with my sale as soon as they find out about it, and I had to report it to them after--within two weeks after the fact, and that the government doesn’t want me to have any profit--have any sale, have any money, as part of the ongoing vicious, vindictive actions that they’ve been taking against me for it will be five years in April. . . . So, I told her that I would like to have her be a temporary buffer, intermediary, so that they can’t go to the buyer and try to get the buyer to have buyer’s remorse and say, you know, she was deceived somehow by me, whom she’s never met, didn’t like buying something from somebody who is temporarily a convicted felon, and that the government would--would do that. Trans. at 101:7-102:2. 20. Mr. Bruce also testified: 13
I was trying to have Helen--I’ll try to say it in simple words. I was trying to--I asked Helen, and she agreed, that--if she would be the intermediary, middle man, buffer--not technically power of attorney, but the equivalent to same; to be the person who was the--to transfer the property to Bonnie Langston so that the government could not try to unravel the sale, pressure Bonnie Langston, which they have done, to try to unravel the sale. . . . So, I wanted to make sure that I kept that sale together and that the government would not corruptly, illegally, immorally, unethically interfere with my sale of what was then my townhouse that I inherited from my late mother. Is that clear enough? Id. at 105:7-106:6 21. Mr. Bruce also testified: I was anticipating that the government would be--the state government, in this particular situation, was going to try to harass me some more, because I was on probation, and try to either unravel the sale, or make it difficult, or exploit possible buyer’s remorse after the closing, or something, and I asked if you [Ms. Collins] would agree to be the intermediary overnight. Id. at 145:13-20. 22. Thus, Mr. Bruce’s explanation of the purpose for the pass-through was to prevent the state government, overseeing his probation, from coming in after the closing and attempting to persuade the buyer to “unravel” the closed transaction. 23. In addition, Mr. Bruce admitted to Craig Valentine, an IEC Commissioner, that the reason he transferred the property to Ms. Collins was to circumvent payment of Judgment #1. Trans. at 277:6-12.3 Although this testimony may constitute hearsay, no contemporaneous objection was interposed during the hearing, and it was elicited by Ms. Collins during her cross-examination of Mr. Valentine. 3
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24. Ms. Collins’ explanation of the purpose for the pass-through is different. Ms. Collins testified: Well, I had a discussion with Mr. Bruce. He’s actually tried to sell a property, and they Googled his name and they called him back and said, We Can’t buy from you because it says you’re a convicted felon. Trans. at 238:7-11. 25. Ms. Collins also testified that she agreed to the pass-through so that the buyer “wouldn’t know she was purchasing from Mr. Bruce.” Id. at 239:9-13. 26. Ms. Collins also testified: I actually volunteered to sign it, because I was afraid Bonnie Langston was going to Google his name and come up, convicted felon. That’s the reason I did it. Id. at 246:18-21. 27. Thus, Ms. Collins’ explanation was that the purpose of the pass-through was to prevent the buyer from identifying Mr. Bruce as the seller and backing out of the sale before the closing. 28. The testimony of the representatives of Empire Title confirms Mr. Bruce’s statement to the IEC that the purpose of the pass-through was to circumvent the payment of Judgment #1. Specifically, Sharon Myers, the person who acted as the closer for the sale of the Property, Trans. at 176:12-177:1, testified that she met with Mr. Bruce on December 4, 2014, and that he objected to the provision in the Settlement Statement requiring the payoff of the lien for Judgment #1. Trans. at 189:9-190:1. Ms. Myers testified:
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Q. (By Mr. Wright) Did he [Mr. Bruce] describe what his objection was to the payoff to the City? A. Yes. Q. What was it? A. That the lien to the City of Colorado Springs should no longer be on the HUD Settlement Statement because he was no longer the owner of the property. * * * Q (By Mr. Wright) Did he [Mr. Bruce] explain why he thought that the payoff should not be allowed? A. Since he was no longer the owner of the property, that it should not be owed to the City of Colorado Springs. Q. Did he request that you do anything? A. He requested it to be removed. Q. What did you say to Mr. Bruce? A. I stated that this lien to the City of Colorado Springs was placed on when he was the owner, and it doesn’t come off just because the property had been transferred; the title. Q. Did Mr. Bruce accept your explanation? A. No, he did not. Q. Did he continue to argue with you? A. Yes. Q. Did you take any steps to try to resolve the argument? A. I explained to him that as a lien goes on the property when the property--whoever owns it at the time the lien is placed, it stays there. And that you can deed the property, but the lien is still a valid lien position. And I offered to call Alicia Simons, who is the manager down at ET Productions, so that he could talk to her. Q. And did you, in fact, do that? 16
A. Yes, I did. Trans. 190:18-192:9. 29. Ms. Myers also testified: Q. Did it cause you any concern that Mr. Bruce came to you with a Warranty Deed transferring the property at the same time that he objected to the lien attached to the property? * * * A. The concern would have only been that he was trying to transfer the title to Helen Collins. He was thinking he was going to avoid the lien. Id. at 208:3-13. 30. Alicia Simon is the president of ET Production Services. Trans. 211:1012. ET Production Services provides title research and title commitments and policies to Empire Title. Id. at 211:13-16;212:16-20. Empire Production Services did the title work in connection with the sale of the Property. Id. at 212:16-213:1. 31. Ms. Simon testified: Q. Do you know Douglas Bruce, ma’am? A. I do not. Q. Have you ever had a conversation with him? A. I have.
* * * I was contacted by Sharon Myers, the closer on the property, and she told me that Mr. Bruce was in her closing room and wanted to talk to me, so she put him on the phone with me. * * * He indicated to me that he felt like a requirement we had on the commitment was incorrect and should not be on there since he no longer owned the property. Q. Other than with regard to the identity of the owner, did he indicate there was any other problem with the title?
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A. No, other than feeling that we shouldn’t have that requirement on that. That was the only thing he brought up with me. Q. And what did you tell him? A. I told him that the lien was recorded at the time--or at the time the lien was recorded, he was still in title to the property, and therefore it attached to the property and would not come off unless it was paid and released. Q. Did you discuss the possibility of having some other title company perform the transaction? A. He did mention to me that he thought another title company might not show the same requirement, and I told him that I felt that they would unless they just happened to miss it or weren’t doing their job correctly. Q. Any particular reason why you remember this conversation with Mr. Bruce? A. It stands out to me, when I’m doing something, if I feel that somebody’s trying to avoid paying it. So, I guess it just stood in my mind because he shouldn’t avoid paying those things. We’re typically not asked to take them off. * * * Q. (By Mr. Wright) And what about the scenario that Mr. Bruce discussed with you caused you concern? A. The fact that he said that the property was no longer owned by him. And it just--and a lot of people are under the misunderstanding that the lien would go away when they’re not any longer in title. Id. at 213:8-215:20. 32. William McAfee is the owner of Empire Title Insurance Company. Trans. at 217:22-24. Mr. McAfee described the business of Empire Title as follows: We insure real estate transactions, whether it be purchases with our buyers and sellers to a real estate contract, or refinances. We search the public records. We look for liens 18
and judgments. We meet the conditions of the real estate contract to make sure that when a seller sells to a buyer, that liens and judgments are taken care of, and that conveyances are properly done to convey the real estate from one party to another. Id. at 218:1-9. 33. With respect to the sale of the Property, Mr. McAfee testified: A. We were the title company that handled the real estate transaction. There was a sale on the property. * * * Q. Did anyone come and ask you any questions regarding the transaction on 1240 Samuel Point? A. Yes. Sharon [Myers] had come to me, who was closing the transaction, and had some questions regarding a lien on the property. Q. Did you answer the questions? A. Yes. We--we had a lien on the property, we had a subsequent conveyance on the property, and Sharon’s question was, How do we deal with the lien? The conveyance that we had was reported changing from one person to another. Her question was, is that lien still valid on that particular property, and my answer to her question was yes, it would be. Q. In the course of dealing with Sharon, did you effect [sic] the Warranty Deed transferring the property to the third party? A. Yes, I did. Q. Refer to Exhibit 13 in front of you, please. Do you recognize that document? A. Yes. Q. What is it?
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A. That is the deed that conveyed the property from Douglas Bruce to Helen Collins. Q. Did the deed create any kind of separation between the title of record and the equitable interest in the property? A. No. The lien that was placed on there while Mr. Bruce owned the property would still be in effect on the property, even though this conveyance was there. So, yes, the lien would still be valid against this property. Id. at 219:2-221:15. 34. I find the explanations of the purpose for the pass-through offered by Mr. Bruce and Ms. Collins to be incredible, and I do not believe that testimony. This conclusion is bolstered by the following facts:4 (a) Ms. Collins is the subject of the charged ethical violations, and has an interest in the outcome; (b) Mr. Bruce is Ms. Collins’ friend and political supporter, Trans. at 85:1-6; 109:16-18; 122:18-24; and Mr. Bruce exhibited substantial bias in favor of Ms. Collins at the evidentiary hearing, even attempting to conduct the proceedings for her. Id. at 187:14-189:6; (c) Although Ms. Collins and Mr. Bruce testified that they discussed with each other the purpose of the pass-through, id. at 99:12-13; 246:13-21, their I am guided by CJI:Civ. 3:16 (2015), which provides that in assessing the credibility of a witness’ testimony, the fact-finder may consider “the reasonableness or unreasonableness of their testimony; the consistency or lack of consistency in their testimony; their motives; whether their testimony has been contradicted or supported by other evidence; their bias, prejudice or interest, if any; their manner or demeanor upon the witness stand; and all other facts and circumstances shown by the evidence which affect the credibility of the witnesses.” 4
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explanations at the evidentiary hearing were inconsistent. See ¶¶18-27, supra. In addition, Mr. Bruce admitted to the IEC that the purpose of the pass-through was to circumvent payment of Judgment #1. Id. at 277:6-12; (d) The testimony of Ms. Collins and Mr. Bruce is contradicted by the Empire Title witnesses--Sharon Myers, Alicia Simon, and William McAfee. The Empire Title witnesses testified consistently with each other, and they have no interest or bias in the matter; (e) Mr. Bruce’s explanation for the pass-through is contradicted by the evidence. In particular, the buyer, Bonnie Langston, testified that she did not know Mr. Bruce prior to the sale of the Property, was unaware of his reputation, and did not search his name on-line. Id. at 301:15-20. In addition, she was not contacted, before or after the sale, by anyone from “the prosecutor’s office” or “the probation office,” and no one attempted to persuade her to “unravel the sale.” Id. at 307:1-10; (f) Ms. Collins’ explanation for the pass-through is unreasonable. First, Mr. Bruce’s name was fully disclosed to the buyer as a result of the Contract to Buy and Sell Real Estate, Exh. 7, and Closing Instructions, Exh. 8. See Trans. at 91:1-6 (testimony by Mr. Bruce admitting that nothing was done to prevent disclosure of his identity during the negotiations for the sale of the Property and that his name “had to be on--on the contract”). Mr. Bruce testified that the buyer did not object to his involvement in the transaction and that “I can only speculate that she [the buyer] didn’t know anything about my problems with our corrupt government.” Trans. at 134:24-135:14. In addition, rather than shielding Mr. Bruce’s name from the buyer, the pass-through accentuated it by necessitating that the original contract with Mr.
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Bruce be terminated, Exh. 7 (final page), and that a new contract with Ms. Collins be executed, Exh. 14. Mr. Bruce had additional dealings with the buyer, outside of negotiating the contract, to “tear out appliances and the carpet” and to “save her the labor cost and the . . . throw away cost. . . . I had that conversation with her, and she had no objection to that.” Trans. at 135:11-25; (g) Mr. Bruce demonstrated enormous contempt for the government of the City of Colorado Springs and the Colorado judiciary. Trans. at 81:21-22 (stating that he has “a great familiarity, and even greater disgust, with the court system in Colorado”); 94:15-19 (describing the lien based on Judgment #1 as an “illegal demand for money”); 95:11-13 (describing the lien based on Judgment #1 as “another example of the City of Colorado Springs cheating me”); 97:13-14 (stating that “The Court. The City. They were all like different fingers on the same man”); 112:17-19 (stating that “[t]he trial judge didn’t give a rat’s ass about doing something illegal because he was doing what the City wanted him to do”); 119:1619 and 138:18-22 (describing the Colorado Springs City Attorney’s Office as “crooks” and “a bunch of damned crooks”); 165:6-166:1 (describing the judicial system as “nakedly corrupt” and a judge as the City’s “pawn”). Mr. Bruce also testified that Judgment #1 is “unjust.” Id. at 121:17-22. It is apparent from his contempt for all facets of government and based on his belief that the judgment is “unjust” that Mr. Bruce would attempt to circumvent the payment of the lien resulting from Judgment #1. 35. Mr. Bruce testified that his objection to the lien resulting from Judgment #1 was based on the fact that it was not properly calculated. Trans. at 94:25-95:6. I
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find this testimony to be incredible, and I do not believe it. In particular, Mr. Bruce did not dispute the amount of the lien when he spoke to Sharon Myers at Empire Title, id. at 190:18-25; the Assistant City Attorney who prepared the calculation of the lien has never received a complaint that it was miscalculated, id. at 65:18-24; and Mr. Bruce has not written a letter to the Office of the City Attorney disputing the calculation. Id. at 119:8-22. To the contrary, it appears that the miscalculation of the lien first came to light in January 2016, when the City Attorney’s Office was preparing for the evidentiary hearing in this matter. Id. at 65:25-66:5. 36. I find the explanation of the purpose of the pass-through offered by the Empire Title witnesses to be credible, and I believe that testimony. This conclusion is bolstered by the fact that the testimony of the Empire Witnesses is consistent and reasonable, and they have no stake in the outcome of the case or apparent bias. In addition, it is consistent with Mr. Bruce’s admission to the IEC that the purpose of the pass-through was to circumvent the payment of Judgment #1. Trans. at 277:612. 37. Accordingly, I find by clear and convincing evidence that the purpose of the pass-through between Mr. Bruce and Ms. Collins was to enable Mr. Bruce to avoid paying the lien created by Judgment #1. D. Ms. Collins Was Aware That the Purpose of the Pass-Through Was To Enable Mr. Bruce To Avoid Payment of the Lien Created By Judgment #1 38. Ms. Collins and Mr. Bruce each testified that they discussed with one another the purpose of the pass-through. Trans. at 99:12-13; 237:9-12; 246:13-21. In addition, it is unreasonable to believe that Ms. Collins, an elected public servant
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subject to the Code of Ethics, would agree to the pass-through without a credible explanation. 39. The only credible explanation for the pass-through is the one that Mr. Bruce admitted when he spoke to Mr. Valentine of the IEC--that he transferred the property to Ms. Collins in order to circumvent payment of Judgment #1. Trans. at 277:6-12 40. Nor is there any indication that Mr. Bruce lied to Ms. Collins about the purpose of the pass-through. Ms. Collins has never asserted that she was misled by Mr. Bruce about the purpose of the pass-through. In addition, it is undisputed that Mr. Bruce and Ms. Collins are friends, do favors for one another, and trust one another. Trans. at 84:12-18; 86:12-13; 104:1-3; 109:16-17; 122:18-24; 232:19233:7. Ms. Collins and Mr. Bruce are political allies, and meet every other week to discuss “City issues.” Id. at 232:25-233:7. 41. Accordingly, I find by clear and convincing evidence that Ms. Collins was aware that the purpose of the pass-through was to enable Mr. Bruce to avoid payment of the lien created by Judgment #1. 42. By entering into the pass-through for the purpose of enabling Mr. Bruce to avoid paying the lien created by Judgment #1, Ms. Collins placed her friendship and political alliance with Mr. Bruce above her duty of loyalty the City of Colorado Springs. As a result, Ms. Collins engaged in and tolerated fraud, abuse, and corruption in government, in violation of §1.3.106(G) of the Code of Ethics; engaged in actions that created the appearance that Ms. Collins was violating ethical standards, in violation of §1.3.106(H) of the Code of Ethics; and engaged in activities
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that created the appearance of impropriety by Ms. Collins, in violation of §1.3.106(I) of the Code of Ethics. E. The City of Colorado Springs Was Prevented From Collecting the Lien Created By Judgment #2 As a Consequence of the Pass-Through Between Mr. Bruce and Ms. Collins 43. Mr. Bruce was the plaintiff in a civil action, designated as 2013-CV-268, pending against the City of Colorado Springs in 2014. Exh. 6B at pp. 15-17. On December 1, 2014, the judge in Civil Action 2013-CV-268 entered an order granting the City’s bill of costs against Mr. Bruce in the amount of $7,569.61. Trans. at 67:1520; Exh. 3. That order was reduced to a judgment on December 5, 2014 (“Judgment #2”). Exh. 3. The City of Colorado Springs caused Judgment #2 to be recorded on December 5, 2014, at 3:58:57. Id. 44. Late in the afternoon of December 4, 2014, however, and prior to the City recording Judgment #2 the next day, Mr. Bruce conveyed the Property to Ms. Collins and recorded the Warranty Deed evidencing that conveyance. Exh. 13. 45. As a result of the pass-through from Mr. Bruce to Ms. Collins, the City of Colorado Springs was unable to collect payment of Judgment #2 from the proceeds of the sale of the Property. As Anne Turner testified: Q. Did Empire Title withhold funds from the person--the proceeds of the sale to pay the second lien; the 2014 lien? A. No, they did not. Q. Did you ever come to understand the reasons why Empire Title would not withhold from the proceeds enough to pay the second lien? A. Yes. I learned that Mr. Bruce transferred the property on December 4th, which was before the City was able to get the second judgment recorded, and therefore, the second judgment 25
did not attach to the property, and therefore, when it was sold, it was not to be satisfied from the proceeds of the property sale on the 8th because it had--it was no longer owned by Mr. Bruce on the 5th of December. Trans. at 72:19-73:9. 46. Mr. McAfee of Empire Title testified similarly: [By Mr. McAfee] The second lien that came of record didn’t come of record until the property had--had already been conveyed to Ms. Collins, and so the second one, since it had not been recorded, we could not collect for it. Q. So, did the Warranty Deed transferring the property to Helen Collins then prevent the collection of the second lien . . . to the property? * * * A. . . . Yes, it would. Trans. at 223:25-224:11. 47. Ms. Collins was informed on November 24, 2014, that the City had a bill of costs pending against Mr. Bruce in Civil Action No. 2013-CV-268. Exh. 6B at p. 17; Trans. at 235:6-236:18. 48. However, there is no evidence demonstrating that Ms. Collins was aware on December 4, 2014, that the judge had awarded costs against Mr. Bruce. Nor is there any evidence that Ms. Collins was aware in early December that the City reduced the order to Judgment #2 and recorded it on December 5, 2014. 49. Rather than respond to interrogatories served on him by the City, Mr. Bruce voluntarily satisfied Judgment #2 on May 4, 2015. Exh. 24; Trans. at 136:8138:17. 50. Regardless of whether Ms. Collins knew of the award of costs in Civil Action No. 2013-CV-268 on December 4, 2014, I find by clear and convincing
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evidence that as a consequence of her intentional and unethical conduct in entering into the December 4, 2014 pass-through with Mr. Bruce, Ms. Collins prevented the City of Colorado Springs from collecting the amount due on Judgment #2 from the proceeds of the sale of the Property. The delay required the City Attorney’s Office to expend additional resources to prepare and serve interrogatories on Mr. Bruce and improperly delayed the collection of Judgment #2. 51. By entering into the pass-through with Mr. Bruce and preventing the payment of Judgment #2 from the proceeds of the sale of the Property, Ms. Collins placed her friendship and political alliance with Mr. Bruce above her duty of loyalty to the City of Colorado Springs. As a result, Ms. Collins engaged in and tolerated fraud, abuse, and corruption in government, in violation of §1.3.106(G) of the Code of Ethics; engaged in actions that created the appearance that Ms. Collins was violating ethical standards, in violation of §1.3.106(H) of the Code of Ethics; and engaged in activities that created the appearance of impropriety by Ms. Collins, in violation of §1.3.106(I) of the Code of Ethics. F. Censure Is the Only Sanction Available for Ms. Collins’ Violations of the Code of Ethics 52. Resolution No. 58-13 provides: Section 6. If City Council finds that a violation of the City’s Code of Ethics has occurred, whether pursuant to an admission or at the conclusion of a full evidentiary hearing, City Council shall then proceed to impose any of the following sanctions: A. Monetary Fine: A monetary fine is appropriate per the City’s Code of Ethics if the individual who committed an ethics violation financially benefitted from their actions. Such penalty shall be double the amount of financial equivalent of any benefits obtained by such actions. The manner of recovery
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and any additional penalties may be as provided by law. City Code §1.3.101 et seq. B. Censure: Censure is a formal, official reprimand by City Council of one of its members. Such penalty carries no fine or suspension of the rights of the member as an elected official. City Charter, Article III, §50. C. Removal: Removal is available for City Council appointees and member [sic] of boards, committees and commissions appointed by City Council. City Charter, Article IX, §10(a). If the violator is a Mayoral appointee, City Council may make a recommendation to the Mayor that the appointee be removed. 53. There is no evidence that Ms. Collins benefitted financially from her actions violating the Code of Ethics. Consequently, the sanction of a monetary fine is not available in this case. 54. Removal is available as a sanction only against City Council appointees, not elected Council Members. The recommendation for removal is available as a sanction only against Mayoral appointees, and not elected Council Members. 55. The only sanction permitted under Resolution No. 58-13 for an ethical violation by a Council Member is censure. Resolution No. 58-13(6)(C). Censure may not carry any “fine or suspension of the rights of the member as an elected official.” Resolution No. 58-13(6)(B). VII. THE APPROPRIATE SANCTION The appropriate sanction for Ms. Collins’ improper conduct in violation of the Code of Ethics is censure in the form of a formal, official reprimand by the City Council, without fine or suspension of her rights as a Council Member.
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Dated February 15, 2016.
________________________________________________________ Boyd N. Boland, Hearing Officer Judicial Arbiter Group, Inc.
CERTIFICATE OF SERVICE I hereby certify that on this 15th day of February, 2016, a true and correct copy of the foregoing Initial Decision was served via electronic filing (e-mail), addressed to the following: Helen Collins [email protected] Dugan, Suzanne [email protected] William A. Wright, Esq. [email protected] Merv Bennett [email protected] Original Signature on File Jackie Burt, Administrative Clerk Judicial Arbiter Group, Inc.
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COURT USE ONLY
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Boyd N. Boland – Hearing Officer JAG Case No. 2015-1169A
INITIAL DECISION I. SUMMARY OF THE CASE Helen Collins is a member of the City Council of the City of Colorado Springs, Colorado. On January 21, 2015, the Office of the City Attorney on behalf of the City of Colorado Springs filed a formal complaint against Ms. Collins (the “Formal Complaint”) with the City’s Independent Ethics Commission (the “IEC”). The Formal Complaint arose from a series of events in which Ms. Collins acted as a pass-through in a real estate transaction involving her friend and political supporter, Douglas Bruce, and alleged that Ms. Collins violated the City’s Code of Ethics by (1) engaging in outside activities that conflicted with her official duties and responsibilities; (2) tolerating waste, fraud, abuse or corruption in government or in its businesses, operations, or services; (3) engaging in actions that may create, or do create, the appearance that Ms. Collins violated the law or the City’s ethical standards; and (4) engaging in an activity that may create, or does create, the appearance of impropriety.
The IEC conducted an investigation and forwarded to the City Council its recommendation, finding that Ms. Collins had violated the City’s Code of Ethics. On June 10, 2015, the City Council issued formal ethics charges against Ms. Collins consistent with the recommendation of the IEC. Ms. Collins responded to the ethics charges, disputed them, and requested an evidentiary hearing. The City Council elected to appoint a hearing officer to conduct the evidentiary hearing. The evidentiary hearing occurred before me on January 5-6, 2016, and the parties were allowed through January 27, 2016, to file written closing arguments. Now, having the benefit of all of the evidence admitted during the evidentiary hearing and the arguments of the parties, I find by clear and convincing evidence and conclude that Ms. Collins violated the City’s Code of Ethics. II. THE FORMAL ETHICS CHARGES The City of Colorado Springs Code of Ethics (the “Code of Ethics”) is contained in Article 3 of the Colorado Springs City Code. Section 1.3.106 of the Code of Ethics addresses conflicts of interest, and provides: Every covered person owes a duty of loyalty to the City. A conflict of interest exists when there is any personal or financial relationship that could influence or be perceived to influence the representation or conduct of business for, or on behalf of, the City. A conflict of interest also exists when any improper and undue influence can be exercised, or be perceived to be exercised, concerning a direct action involving the City. A conflict of interest may exist when there is an appearance of impropriety. No conflict of interest is allowed. A. No covered person shall hold financial interests that conflict with the conscientious performance of duty.
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B. No covered person shall engage in business activities including financial transactions using nonpublic government or enterprise private information, or allow the improper use of that information to further any private interest or gain. C. No covered person shall knowingly make unauthorized commitments or promises of any kind purporting to bind the City. D. No covered person shall give preferential treatment to any private organization or individual. E. No covered person shall directly or indirectly participate in any matter involving the City where they or a member of their family has a direct or indirect substantial financial interest. If a direct or indirect substantial financial interest exists, the covered person shall make known that interest to the appropriate persons and shall refrain from participating in the matter as it is dealt with by the City. F. No covered person shall engage in outside employment or activities, including seeking or negotiating for employment that conflicts with their official duties and responsibilities. G. No covered person shall tolerate waste, fraud, abuse and corruption in government or any of its businesses, operations or services. H. No covered person shall engage in any actions that may create, or do create, the appearance that they are violating the law or ethical standards. I. No covered person shall engage in any activity that may create, or does create, the appearance of impropriety. The City Council issued formal ethics charges against Ms. Collins on June 9, 2015, asserting that she violated the following provisions of the Code of Ethics: City Code 1.3.106, paragraph (G) that provides “no covered person shall tolerate waste, fraud, abuse and corruption in government or in any of its business [sic], operations or services.” City Code 1.3.106, paragraph (H) that provides “no covered person shall engage in any actions that may create, or do
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create, the appearance that they are violating the law or ethical standards.” City Code 1.3.106, paragraph (I) that provides “no covered person shall engage in any activity that may create, or does create, the appearance of impropriety.” Exh. 6.1 III. PRIOR PROCEEDINGS On January 21, 2015, the Office of the City Attorney on behalf of the City of Colorado Springs filed a Formal Complaint against Helen P. Collins asserting that she had violated the Ethics Code. Formal Complaint at p. 1. The Formal Complaint alleged in relevant part: On October 25, 2011, the City obtained a judgment against Douglas Bruce (“Bruce”) in the amount of $15,437.50 plus post-judgment interest in case number 11cv231 (“Judgment #1”). The City recorded Judgment #1 with the El Paso County Clerk and Recorder on February 10, 2012. * * * On November 25, 2014, Jessica Sheley of Empire Title left a voicemail message for Anne Turner (Senior Attorney, City Attorney’s Office) explaining that Bruce had a real estate closing coming up and that she would need the payoff amount to satisfy Judgment #1. Ms. Turner returned her call on November 26, 2014, confirming that the judgment remained unsatisfied and had grown to approximately $21,000. Ms. Sheley stated that the proceeds from the sale scheduled for December 8, 2014 would be sufficient to satisfy Judgment #1 in full and asked Ms. Turner to send her a memo confirming the amount required to satisfy the judgment. Ms. Turner supplied Ms. Sheley with the memo on Monday morning, December 1, 2014, stating that by December 8, 2014, the judgment will have grown to $21,205.09 and accrues interest at a rate of $4.60 per day. Ms. Sheley responded to Ms. Turner, stating that “[i]f all goes well, we should close on Monday, the 8th.” Later in the day on December 1, 2014 (5:50 PM), the court in Bruce’s active lawsuit (case number 13cv268) granted in part Reference is to those exhibits admitted into evidence at the evidentiary hearing on January 5-6, 2016, unless otherwise indicated. 1
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the City’s bill of costs, ordering Bruce to pay the City $7,569.61 (“Judgment #2”). The City’s outside counsel received the order electronically, but because Bruce represents himself, the court mailed a copy of the order to his record address--a P.O. Box. On Thursday, December 4, 2014 at 4:18 PM, a warranty deed transferring 1240 Samuel Point, Colorado Springs, Colorado (the “Property”) from Bruce to Helen P. Collins (“Collins”) was recorded with the El Paso Clerk and Recorder. Meanwhile, at 4:30 PM on that same day (Thursday December 4), the City filed a proposed order for judgment against Bruce for Judgment #2 entered earlier in the week plus postjudgment interest. The court entered the judgment on Friday morning, December 5, 2014 at 9:14 AM. On December 5, 2014, Collins signed a deed conveying the Property to Bonnie Langston. The City obtained a transcript of Judgment #2 and recorded it with the El Paso County Clerk and Recorder at 3:58 PM on Friday, December 5, 2014. Anne Turner promptly called Jessica Sheley at Empire Title at approximately 4:10 PM, notifying her of the City’s newly-recorded transcript of Judgment #2 and court orders. Ms. Sheley again asked for a payoff statement as had been done for Judgment #1, which Ms. Turner provided on Monday, December 8, 2014 at 8:42 AM. At 9:17 AM, Ms. Sheley confirmed receipt of Ms. Turner’s memo by email, stated that the closing was supposed to occur that afternoon, and that the City should receive its payoff on Tuesday, December 9. At approximately 9:45 AM on Monday, December 8, 2014, Anne Turner received a phone call from Bill McAfee, president of Empire Title. Mr. McAfee informed Ms. Turner for the first time that Bruce had transferred the Property to Collins on December 4, 2014, before the City recorded Judgment #2, and, consequently, Empire Title would not be satisfying Judgment #2 with the Property sale proceeds. He said that Bruce must have gotten some bad legal advice, because Bruce thought that by transferring the Property to Collins, he would avoid paying the City’s judgment (Judgment #1). In the afternoon of December 8, 2014, Bonnie Langston closed on the Property, paying Collins $140,000. Bruce was seen at
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City Council Chambers during the break in the work session convened that day. The deed conveying the Property from Collins to Langston was recorded with the El Paso County Clerk and Recorder on December 9, 2014 at 8:37 AM. A check drawn from the Empire Title escrow account made payable to the City in the amount of $21,214.29 ($21,205.09 plus two additional days of interest) in satisfaction of Judgment #1 was delivered to the City Attorney’s Office Tuesday morning, December 9. The check record reflects the “seller” as “Helen P. Collins.” As a result of the recording of the December 4, 2014 warranty deed from Bruce to Collins, the recorded transcript of Judgment #2 did not become a lien on the Property later conveyed to Bonnie Langston on December 8, 2014. The recorded deed from Bruce to Collins thereby operated to hinder or delay the City’s collection of Judgment #2. Formal Complaint at pp. 2-4. The Formal Complaint alleged violations of “multiple provisions of section 1.3.106, including section F (“[n]o covered person shall engage in outside . . . activities . . . that conflicts with their official duties and responsibilities”); section G (“[n]o covered person shall tolerate waste, fraud, abuse and corruption in government or any of its businesses, operations or services”); section H (“[n]o covered person shall engage in any actions that may create, or do create, the appearance that they are violating the law or ethical standards”); and section I (“[n]o covered person shall engage in any activity that may create, or does create, the appearance of impropriety”). Formal Complaint at p. 4. After investigating the Formal Complaint, the IEC forwarded its recommendation of ethics charges to the City Council. The IEC found that Ms. Collins did not violate §1.3.106(F), stating:
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The closing was to occur at the same time Collins’s duties called for her to be in a Council Meeting. Instead of skipping the meeting, she made arrangements for the closing to occur as scheduled while she was at the Council meeting to perform her duties. The [Formal] Complaint does not specify how the [City Attorney’s Office] believes Collins violated this provision, but the Commission does not find any way that the real estate transaction conflicted with Collins’s official duties and responsibilities. IEC Recommendation at p. 5. However, the IEC did find that Ms. Collins violated the Code of Ethics, as follows: The Commission finds that Collins violated Code §1.3.106(G), (H), and (I). Collins participated in a real estate transaction, the intent of which was to prevent the City from collecting Judgment #1, resulting in the City being unable to collect Judgment #2 at the closing, and did so because Seller had helped her get elected to office. Collins placed her friendship with Seller above her duty of loyalty to the city and her ethical obligations, resulting in harm to the City’s interests. Id. at p. 7. On June 10, 2015, the City Council notified Ms. Collins that it had issued formal ethics charges against her based on the recommendation of the IEC. The written notice states in part: Please be advised that City Council, at its June 9, 2015 regular meeting, elected to issue formal ethics charges on the recommendations of the Independent Ethics Commission in the Investigation of Complaint 2015-01. Specifically, those charges are City Code 1.3.106, paragraph (G) that provides “no covered person shall tolerate waste, fraud, abuse and corruption in government or in any of its business [sic], operations or services.” City Code 1.3.106, paragraph (H) that provides “no covered person shall engage in any actions that may create, or do
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create, the appearance that they are violating the law or ethical standards.” City Code 1.3.106, paragraph (I) that provides “no covered person shall engage in any activity that may create, or does create, the appearance of impropriety.” Exh. 6. IV. THE BURDEN OF PROOF Resolution No. 58-13 is a resolution of the Colorado Springs City Council approving procedures for the investigation and hearing of ethics complaints under the Code of Ethics. Among other things, the Resolution establishes that “the evidentiary burden shall be clear and convincing evidence.” Resolution No. 58-13 at §5(A). Under Colorado law, a fact is proven by clear and convincing evidence if it is shown to be “highly probable” and the fact-finder has no “serious or substantial doubt.” CJI-Civ. 3:2 (2015). V. THE STANDARD TO BE APPLIED TO THE CHARGES CONCERNING APPEARANCES Two of the formal ethics charges brought against Ms. Collins involve appearances--(1) the appearance of legal or ethical violations and (2) the appearance of impropriety. In her written closing argument, captioned “Objections to January 2016 Collins Hearing,” Ms. Collins states: The [hearing officer] seems to insert himself as a witness. Perceptions and appearances are the heart of the charges against Collins. That is absurd. The [hearing officer] cannot testify and be subject to cross-examination about his perceptions of possible improprieties. . . . Collins is entitled to know who had those views. The issue is real acts, not possibilities, perceptions, and appearances. Collins Closing Argument at ¶24 (original emphasis). 8
The IEC argues in its Closing Argument that the proper standard to be applied in determining the charges concerning appearances is an objective standard, citing authorities addressing when a judge must recuse or be disqualified based on an appearance of impropriety. I agree with the IEC that cases involving judicial disqualification provide guidance in determining the appropriate standard to be applied to the ethics violations charged here based on appearances. The purposes of the Colorado Springs Code of Ethics and the Code of Judicial Conduct governing judicial conduct are similar. Compare Code of Ethics at §1.3.101(B) (stating that “[t]he City of Colorado Springs is committed to complete honesty, utmost integrity, fair dealing and ethical behavior”), with Colorado Code of Judicial Conduct at §1.2 (stating that its purpose is to “promote[] public confidence in the independence, integrity, and impartiality of the judiciary”). Accordingly, I conclude that the test for whether there is an appearance of misconduct under the Code of Ethics is whether a reasonable person, knowing all relevant facts, would harbor doubts about the propriety of Ms. Collins’ actions. See People v. Schupper, 124 P.3d 856, 858 (Colo. App. 2005). VI. FINDINGS OF FACT AND CONCLUSIONS OF LAW Based on the evidence admitted during the evidentiary hearing on January 56, 2015, and the arguments of the parties, I make the following findings of fact and conclusions of law. All findings of fact are made based on clear and convincing evidence.
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A. Ms. Collins Is Subject to the Requirements of the Code of Ethics 1. Ms. Collins was elected to the City Council in April 2013. Trans. at 231:912.2 She was a member of the City Council in December 2014. Id. at 250:8-12. She was a member of the City Council at the time of the evidentiary hearing in January 2016. Id. at 230:17-19. Consequently, at all times relevant to these proceedings, Ms. Collins has been a member of the Colorado Springs City Council. 2. “Covered persons,” as that term is used in the Code of Ethics, includes “elected officials,” Code of Ethics at §1.3.102, and “elected officials” is defined in the Code of Ethics to include “[t]he Mayor and Council Members.” Id. Consequently, Ms. Collins is a “covered person” within the meaning of the Code of Ethics and is subject to its requirements. B. Ms. Collins Agreed To Act As a Pass-Through In a Real Estate Transaction Involving Douglas Bruce, a Friend and Political Supporter 3. On November 22, 2014, Mr. Bruce entered into a Contract to Buy and Sell Real Estate with Bonnie B. Langston. Exh. 7; Trans. at 89. Mr. Bruce was the seller, and Ms. Langston was the purchaser. Id. The transaction involved a condominium known as 1240 Samuel Point, Colorado Springs, Colorado (the “Property”). Id. 4. The sale of the Property was scheduled to close on Monday, December 8, 2014. Trans. at 89:22-90:4. 5. The Property was subject to a lien in favor of the City of Colorado Springs and against Mr. Bruce, which arose out of a civil action designated as 11-CV-231 in
Reference is to the Transcript of Proceedings of the evidentiary hearing on January 5-6, 2016. 2
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the District Court of El Paso County, Colorado. Exh. 1 (“Judgment #1”). The lien was recorded on February 12, 2012. Id. 6. The HUD-1 Settlement Statement prepared in anticipation of the sale of the Property (the “Settlement Statement”) discloses the existence of the lien created by Judgment #1. Exh. 12 at line 504. In order for Mr. Bruce to transfer clear title to Ms. Langston, the lien had to be paid off from the proceeds of the sale. Trans. at 46:13-47:1. 7. Mr. Bruce testified that on December 3, 2014, he realized that he had not seen the Settlement Statement, and the transaction was scheduled to close on December 8, 2014. Trans. 89:22-4. Mr. Bruce contacted his real estate agent, James Block, who arranged for Mr. Bruce to receive a copy of the Settlement Statement on December 3, 2014. Id. at 90:5-7. Consequently, Mr. Bruce first saw the Settlement Statement on December 3, 2014. Trans. at 141:7-19. 8. After looking at the Settlement Statement, Mr. Bruce contacted Ms. Collins and asked her to be an intermediary between himself and the buyer, and Ms. Collins agreed. Trans. at 99:3-19; 105:7-16; 109:19-110:2; 145:8-23; 246:16-21. 9. Ms. Collins and Mr. Bruce are friends, and Mr. Bruce is a political supporter of Ms. Collins. Trans. at 84:10-85:6; 109:16-17; 231:15-233:7. 10. In order to accomplish the pass-through to Ms. Collins, Mr. Bruce prepared a warranty deed transferring title of the Property from himself to Ms. Collins (the “Warranty Deed”). Exh. 13; Trans. at 98:22-99:9. Mr. Bruce recorded the Warranty Deed transferring the Property to Ms. Collins on December 4, 2014, at 4:18:53 p.m. Id.
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11. Empire Title of Colorado Springs, LLC (“Empire Title”), was the closing company for the sale of the Property. Exh. 8; Trans. at 176:12-177:12. 12. Immediately after recording the Warranty Deed, Mr. Bruce took a copy of it to the offices of Empire Title to show that the “property was now in the name of Helen Collins.” Trans. at 142:4-12. 13. Also on December 4, 2014, Mr. Bruce made arrangements to meet Ms. Collins at Empire Title on December 5, 2014, at approximately 10:00 a.m. Trans. at 115:14-18. 14. Mr. Bruce and Ms. Collins appeared together at the offices of Empire Title on December 5, 2014. Trans. at 193:6-18. They requested that Ms. Collins be allowed to complete her side of the closing for the Property at that time. Id. Sharon Myers, the closer for Empire Title, agreed. Id. Mr. Bruce also requested that the check for the proceeds from the sale of the Property be made out in his name. Id. at 147:14-17. Ms. Myers stated that the check had to be made out to Ms. Collins, “because she’s now the owner,” but agreed to allow Mr. Bruce to pick up the check at the closing provided Ms. Collins authorized him to do so. Id. at 147:14-148:2. Ms. Collins signed an authorization for Mr. Bruce to pick up the check. Id. at 147:25148:2; Exh. 15 at p. 2. 15. The closing for the sale of the Property occurred as scheduled on Monday, December 8, 2014. Trans. at 204:25-205:2. Present at the closing were Mr. Bruce; his real estate agent, Mr. Block; the purchaser, Ms. Langston; and Ms. Langston’s real estate agent, Carina Potter. Id. at 205:5-10.
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16. At the conclusion of the closing, Mr. Bruce was given the check for the proceeds from the sale of the Property, Trans. at 148:3-8; he took the check to City Hall, where Ms. Collins was on a break from a meeting of the City Council, id. at 148:9-12; and Ms. Collins endorsed the check to Mr. Bruce. Id.; Exh. 22. Mr. Bruce deposited the proceeds of the check into his bank account. Trans. at 148:12-13. C. The Purpose of the Pass-Through Between Mr. Bruce and Ms. Collins Was To Enable Mr. Bruce to Avoid Paying the Lien Created By Judgment #1 17. The evidence is disputed concerning why Mr. Bruce requested Ms. Collins to act as a pass-through in connection with the sale of the Property. 18. Mr. Bruce and Ms. Collins each testified that they discussed between themselves the purpose of the pass-through. Trans. at 99:12-13; 246:13-21. Their explanations are inconsistent, however. 19. Mr. Bruce testified that he asked Ms. Collins to act as a pass-through for the following reasons: And I told her that the government, I predict, is going to try to mess with my sale as soon as they find out about it, and I had to report it to them after--within two weeks after the fact, and that the government doesn’t want me to have any profit--have any sale, have any money, as part of the ongoing vicious, vindictive actions that they’ve been taking against me for it will be five years in April. . . . So, I told her that I would like to have her be a temporary buffer, intermediary, so that they can’t go to the buyer and try to get the buyer to have buyer’s remorse and say, you know, she was deceived somehow by me, whom she’s never met, didn’t like buying something from somebody who is temporarily a convicted felon, and that the government would--would do that. Trans. at 101:7-102:2. 20. Mr. Bruce also testified: 13
I was trying to have Helen--I’ll try to say it in simple words. I was trying to--I asked Helen, and she agreed, that--if she would be the intermediary, middle man, buffer--not technically power of attorney, but the equivalent to same; to be the person who was the--to transfer the property to Bonnie Langston so that the government could not try to unravel the sale, pressure Bonnie Langston, which they have done, to try to unravel the sale. . . . So, I wanted to make sure that I kept that sale together and that the government would not corruptly, illegally, immorally, unethically interfere with my sale of what was then my townhouse that I inherited from my late mother. Is that clear enough? Id. at 105:7-106:6 21. Mr. Bruce also testified: I was anticipating that the government would be--the state government, in this particular situation, was going to try to harass me some more, because I was on probation, and try to either unravel the sale, or make it difficult, or exploit possible buyer’s remorse after the closing, or something, and I asked if you [Ms. Collins] would agree to be the intermediary overnight. Id. at 145:13-20. 22. Thus, Mr. Bruce’s explanation of the purpose for the pass-through was to prevent the state government, overseeing his probation, from coming in after the closing and attempting to persuade the buyer to “unravel” the closed transaction. 23. In addition, Mr. Bruce admitted to Craig Valentine, an IEC Commissioner, that the reason he transferred the property to Ms. Collins was to circumvent payment of Judgment #1. Trans. at 277:6-12.3 Although this testimony may constitute hearsay, no contemporaneous objection was interposed during the hearing, and it was elicited by Ms. Collins during her cross-examination of Mr. Valentine. 3
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24. Ms. Collins’ explanation of the purpose for the pass-through is different. Ms. Collins testified: Well, I had a discussion with Mr. Bruce. He’s actually tried to sell a property, and they Googled his name and they called him back and said, We Can’t buy from you because it says you’re a convicted felon. Trans. at 238:7-11. 25. Ms. Collins also testified that she agreed to the pass-through so that the buyer “wouldn’t know she was purchasing from Mr. Bruce.” Id. at 239:9-13. 26. Ms. Collins also testified: I actually volunteered to sign it, because I was afraid Bonnie Langston was going to Google his name and come up, convicted felon. That’s the reason I did it. Id. at 246:18-21. 27. Thus, Ms. Collins’ explanation was that the purpose of the pass-through was to prevent the buyer from identifying Mr. Bruce as the seller and backing out of the sale before the closing. 28. The testimony of the representatives of Empire Title confirms Mr. Bruce’s statement to the IEC that the purpose of the pass-through was to circumvent the payment of Judgment #1. Specifically, Sharon Myers, the person who acted as the closer for the sale of the Property, Trans. at 176:12-177:1, testified that she met with Mr. Bruce on December 4, 2014, and that he objected to the provision in the Settlement Statement requiring the payoff of the lien for Judgment #1. Trans. at 189:9-190:1. Ms. Myers testified:
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Q. (By Mr. Wright) Did he [Mr. Bruce] describe what his objection was to the payoff to the City? A. Yes. Q. What was it? A. That the lien to the City of Colorado Springs should no longer be on the HUD Settlement Statement because he was no longer the owner of the property. * * * Q (By Mr. Wright) Did he [Mr. Bruce] explain why he thought that the payoff should not be allowed? A. Since he was no longer the owner of the property, that it should not be owed to the City of Colorado Springs. Q. Did he request that you do anything? A. He requested it to be removed. Q. What did you say to Mr. Bruce? A. I stated that this lien to the City of Colorado Springs was placed on when he was the owner, and it doesn’t come off just because the property had been transferred; the title. Q. Did Mr. Bruce accept your explanation? A. No, he did not. Q. Did he continue to argue with you? A. Yes. Q. Did you take any steps to try to resolve the argument? A. I explained to him that as a lien goes on the property when the property--whoever owns it at the time the lien is placed, it stays there. And that you can deed the property, but the lien is still a valid lien position. And I offered to call Alicia Simons, who is the manager down at ET Productions, so that he could talk to her. Q. And did you, in fact, do that? 16
A. Yes, I did. Trans. 190:18-192:9. 29. Ms. Myers also testified: Q. Did it cause you any concern that Mr. Bruce came to you with a Warranty Deed transferring the property at the same time that he objected to the lien attached to the property? * * * A. The concern would have only been that he was trying to transfer the title to Helen Collins. He was thinking he was going to avoid the lien. Id. at 208:3-13. 30. Alicia Simon is the president of ET Production Services. Trans. 211:1012. ET Production Services provides title research and title commitments and policies to Empire Title. Id. at 211:13-16;212:16-20. Empire Production Services did the title work in connection with the sale of the Property. Id. at 212:16-213:1. 31. Ms. Simon testified: Q. Do you know Douglas Bruce, ma’am? A. I do not. Q. Have you ever had a conversation with him? A. I have.
* * * I was contacted by Sharon Myers, the closer on the property, and she told me that Mr. Bruce was in her closing room and wanted to talk to me, so she put him on the phone with me. * * * He indicated to me that he felt like a requirement we had on the commitment was incorrect and should not be on there since he no longer owned the property. Q. Other than with regard to the identity of the owner, did he indicate there was any other problem with the title?
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A. No, other than feeling that we shouldn’t have that requirement on that. That was the only thing he brought up with me. Q. And what did you tell him? A. I told him that the lien was recorded at the time--or at the time the lien was recorded, he was still in title to the property, and therefore it attached to the property and would not come off unless it was paid and released. Q. Did you discuss the possibility of having some other title company perform the transaction? A. He did mention to me that he thought another title company might not show the same requirement, and I told him that I felt that they would unless they just happened to miss it or weren’t doing their job correctly. Q. Any particular reason why you remember this conversation with Mr. Bruce? A. It stands out to me, when I’m doing something, if I feel that somebody’s trying to avoid paying it. So, I guess it just stood in my mind because he shouldn’t avoid paying those things. We’re typically not asked to take them off. * * * Q. (By Mr. Wright) And what about the scenario that Mr. Bruce discussed with you caused you concern? A. The fact that he said that the property was no longer owned by him. And it just--and a lot of people are under the misunderstanding that the lien would go away when they’re not any longer in title. Id. at 213:8-215:20. 32. William McAfee is the owner of Empire Title Insurance Company. Trans. at 217:22-24. Mr. McAfee described the business of Empire Title as follows: We insure real estate transactions, whether it be purchases with our buyers and sellers to a real estate contract, or refinances. We search the public records. We look for liens 18
and judgments. We meet the conditions of the real estate contract to make sure that when a seller sells to a buyer, that liens and judgments are taken care of, and that conveyances are properly done to convey the real estate from one party to another. Id. at 218:1-9. 33. With respect to the sale of the Property, Mr. McAfee testified: A. We were the title company that handled the real estate transaction. There was a sale on the property. * * * Q. Did anyone come and ask you any questions regarding the transaction on 1240 Samuel Point? A. Yes. Sharon [Myers] had come to me, who was closing the transaction, and had some questions regarding a lien on the property. Q. Did you answer the questions? A. Yes. We--we had a lien on the property, we had a subsequent conveyance on the property, and Sharon’s question was, How do we deal with the lien? The conveyance that we had was reported changing from one person to another. Her question was, is that lien still valid on that particular property, and my answer to her question was yes, it would be. Q. In the course of dealing with Sharon, did you effect [sic] the Warranty Deed transferring the property to the third party? A. Yes, I did. Q. Refer to Exhibit 13 in front of you, please. Do you recognize that document? A. Yes. Q. What is it?
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A. That is the deed that conveyed the property from Douglas Bruce to Helen Collins. Q. Did the deed create any kind of separation between the title of record and the equitable interest in the property? A. No. The lien that was placed on there while Mr. Bruce owned the property would still be in effect on the property, even though this conveyance was there. So, yes, the lien would still be valid against this property. Id. at 219:2-221:15. 34. I find the explanations of the purpose for the pass-through offered by Mr. Bruce and Ms. Collins to be incredible, and I do not believe that testimony. This conclusion is bolstered by the following facts:4 (a) Ms. Collins is the subject of the charged ethical violations, and has an interest in the outcome; (b) Mr. Bruce is Ms. Collins’ friend and political supporter, Trans. at 85:1-6; 109:16-18; 122:18-24; and Mr. Bruce exhibited substantial bias in favor of Ms. Collins at the evidentiary hearing, even attempting to conduct the proceedings for her. Id. at 187:14-189:6; (c) Although Ms. Collins and Mr. Bruce testified that they discussed with each other the purpose of the pass-through, id. at 99:12-13; 246:13-21, their I am guided by CJI:Civ. 3:16 (2015), which provides that in assessing the credibility of a witness’ testimony, the fact-finder may consider “the reasonableness or unreasonableness of their testimony; the consistency or lack of consistency in their testimony; their motives; whether their testimony has been contradicted or supported by other evidence; their bias, prejudice or interest, if any; their manner or demeanor upon the witness stand; and all other facts and circumstances shown by the evidence which affect the credibility of the witnesses.” 4
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explanations at the evidentiary hearing were inconsistent. See ¶¶18-27, supra. In addition, Mr. Bruce admitted to the IEC that the purpose of the pass-through was to circumvent payment of Judgment #1. Id. at 277:6-12; (d) The testimony of Ms. Collins and Mr. Bruce is contradicted by the Empire Title witnesses--Sharon Myers, Alicia Simon, and William McAfee. The Empire Title witnesses testified consistently with each other, and they have no interest or bias in the matter; (e) Mr. Bruce’s explanation for the pass-through is contradicted by the evidence. In particular, the buyer, Bonnie Langston, testified that she did not know Mr. Bruce prior to the sale of the Property, was unaware of his reputation, and did not search his name on-line. Id. at 301:15-20. In addition, she was not contacted, before or after the sale, by anyone from “the prosecutor’s office” or “the probation office,” and no one attempted to persuade her to “unravel the sale.” Id. at 307:1-10; (f) Ms. Collins’ explanation for the pass-through is unreasonable. First, Mr. Bruce’s name was fully disclosed to the buyer as a result of the Contract to Buy and Sell Real Estate, Exh. 7, and Closing Instructions, Exh. 8. See Trans. at 91:1-6 (testimony by Mr. Bruce admitting that nothing was done to prevent disclosure of his identity during the negotiations for the sale of the Property and that his name “had to be on--on the contract”). Mr. Bruce testified that the buyer did not object to his involvement in the transaction and that “I can only speculate that she [the buyer] didn’t know anything about my problems with our corrupt government.” Trans. at 134:24-135:14. In addition, rather than shielding Mr. Bruce’s name from the buyer, the pass-through accentuated it by necessitating that the original contract with Mr.
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Bruce be terminated, Exh. 7 (final page), and that a new contract with Ms. Collins be executed, Exh. 14. Mr. Bruce had additional dealings with the buyer, outside of negotiating the contract, to “tear out appliances and the carpet” and to “save her the labor cost and the . . . throw away cost. . . . I had that conversation with her, and she had no objection to that.” Trans. at 135:11-25; (g) Mr. Bruce demonstrated enormous contempt for the government of the City of Colorado Springs and the Colorado judiciary. Trans. at 81:21-22 (stating that he has “a great familiarity, and even greater disgust, with the court system in Colorado”); 94:15-19 (describing the lien based on Judgment #1 as an “illegal demand for money”); 95:11-13 (describing the lien based on Judgment #1 as “another example of the City of Colorado Springs cheating me”); 97:13-14 (stating that “The Court. The City. They were all like different fingers on the same man”); 112:17-19 (stating that “[t]he trial judge didn’t give a rat’s ass about doing something illegal because he was doing what the City wanted him to do”); 119:1619 and 138:18-22 (describing the Colorado Springs City Attorney’s Office as “crooks” and “a bunch of damned crooks”); 165:6-166:1 (describing the judicial system as “nakedly corrupt” and a judge as the City’s “pawn”). Mr. Bruce also testified that Judgment #1 is “unjust.” Id. at 121:17-22. It is apparent from his contempt for all facets of government and based on his belief that the judgment is “unjust” that Mr. Bruce would attempt to circumvent the payment of the lien resulting from Judgment #1. 35. Mr. Bruce testified that his objection to the lien resulting from Judgment #1 was based on the fact that it was not properly calculated. Trans. at 94:25-95:6. I
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find this testimony to be incredible, and I do not believe it. In particular, Mr. Bruce did not dispute the amount of the lien when he spoke to Sharon Myers at Empire Title, id. at 190:18-25; the Assistant City Attorney who prepared the calculation of the lien has never received a complaint that it was miscalculated, id. at 65:18-24; and Mr. Bruce has not written a letter to the Office of the City Attorney disputing the calculation. Id. at 119:8-22. To the contrary, it appears that the miscalculation of the lien first came to light in January 2016, when the City Attorney’s Office was preparing for the evidentiary hearing in this matter. Id. at 65:25-66:5. 36. I find the explanation of the purpose of the pass-through offered by the Empire Title witnesses to be credible, and I believe that testimony. This conclusion is bolstered by the fact that the testimony of the Empire Witnesses is consistent and reasonable, and they have no stake in the outcome of the case or apparent bias. In addition, it is consistent with Mr. Bruce’s admission to the IEC that the purpose of the pass-through was to circumvent the payment of Judgment #1. Trans. at 277:612. 37. Accordingly, I find by clear and convincing evidence that the purpose of the pass-through between Mr. Bruce and Ms. Collins was to enable Mr. Bruce to avoid paying the lien created by Judgment #1. D. Ms. Collins Was Aware That the Purpose of the Pass-Through Was To Enable Mr. Bruce To Avoid Payment of the Lien Created By Judgment #1 38. Ms. Collins and Mr. Bruce each testified that they discussed with one another the purpose of the pass-through. Trans. at 99:12-13; 237:9-12; 246:13-21. In addition, it is unreasonable to believe that Ms. Collins, an elected public servant
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subject to the Code of Ethics, would agree to the pass-through without a credible explanation. 39. The only credible explanation for the pass-through is the one that Mr. Bruce admitted when he spoke to Mr. Valentine of the IEC--that he transferred the property to Ms. Collins in order to circumvent payment of Judgment #1. Trans. at 277:6-12 40. Nor is there any indication that Mr. Bruce lied to Ms. Collins about the purpose of the pass-through. Ms. Collins has never asserted that she was misled by Mr. Bruce about the purpose of the pass-through. In addition, it is undisputed that Mr. Bruce and Ms. Collins are friends, do favors for one another, and trust one another. Trans. at 84:12-18; 86:12-13; 104:1-3; 109:16-17; 122:18-24; 232:19233:7. Ms. Collins and Mr. Bruce are political allies, and meet every other week to discuss “City issues.” Id. at 232:25-233:7. 41. Accordingly, I find by clear and convincing evidence that Ms. Collins was aware that the purpose of the pass-through was to enable Mr. Bruce to avoid payment of the lien created by Judgment #1. 42. By entering into the pass-through for the purpose of enabling Mr. Bruce to avoid paying the lien created by Judgment #1, Ms. Collins placed her friendship and political alliance with Mr. Bruce above her duty of loyalty the City of Colorado Springs. As a result, Ms. Collins engaged in and tolerated fraud, abuse, and corruption in government, in violation of §1.3.106(G) of the Code of Ethics; engaged in actions that created the appearance that Ms. Collins was violating ethical standards, in violation of §1.3.106(H) of the Code of Ethics; and engaged in activities
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that created the appearance of impropriety by Ms. Collins, in violation of §1.3.106(I) of the Code of Ethics. E. The City of Colorado Springs Was Prevented From Collecting the Lien Created By Judgment #2 As a Consequence of the Pass-Through Between Mr. Bruce and Ms. Collins 43. Mr. Bruce was the plaintiff in a civil action, designated as 2013-CV-268, pending against the City of Colorado Springs in 2014. Exh. 6B at pp. 15-17. On December 1, 2014, the judge in Civil Action 2013-CV-268 entered an order granting the City’s bill of costs against Mr. Bruce in the amount of $7,569.61. Trans. at 67:1520; Exh. 3. That order was reduced to a judgment on December 5, 2014 (“Judgment #2”). Exh. 3. The City of Colorado Springs caused Judgment #2 to be recorded on December 5, 2014, at 3:58:57. Id. 44. Late in the afternoon of December 4, 2014, however, and prior to the City recording Judgment #2 the next day, Mr. Bruce conveyed the Property to Ms. Collins and recorded the Warranty Deed evidencing that conveyance. Exh. 13. 45. As a result of the pass-through from Mr. Bruce to Ms. Collins, the City of Colorado Springs was unable to collect payment of Judgment #2 from the proceeds of the sale of the Property. As Anne Turner testified: Q. Did Empire Title withhold funds from the person--the proceeds of the sale to pay the second lien; the 2014 lien? A. No, they did not. Q. Did you ever come to understand the reasons why Empire Title would not withhold from the proceeds enough to pay the second lien? A. Yes. I learned that Mr. Bruce transferred the property on December 4th, which was before the City was able to get the second judgment recorded, and therefore, the second judgment 25
did not attach to the property, and therefore, when it was sold, it was not to be satisfied from the proceeds of the property sale on the 8th because it had--it was no longer owned by Mr. Bruce on the 5th of December. Trans. at 72:19-73:9. 46. Mr. McAfee of Empire Title testified similarly: [By Mr. McAfee] The second lien that came of record didn’t come of record until the property had--had already been conveyed to Ms. Collins, and so the second one, since it had not been recorded, we could not collect for it. Q. So, did the Warranty Deed transferring the property to Helen Collins then prevent the collection of the second lien . . . to the property? * * * A. . . . Yes, it would. Trans. at 223:25-224:11. 47. Ms. Collins was informed on November 24, 2014, that the City had a bill of costs pending against Mr. Bruce in Civil Action No. 2013-CV-268. Exh. 6B at p. 17; Trans. at 235:6-236:18. 48. However, there is no evidence demonstrating that Ms. Collins was aware on December 4, 2014, that the judge had awarded costs against Mr. Bruce. Nor is there any evidence that Ms. Collins was aware in early December that the City reduced the order to Judgment #2 and recorded it on December 5, 2014. 49. Rather than respond to interrogatories served on him by the City, Mr. Bruce voluntarily satisfied Judgment #2 on May 4, 2015. Exh. 24; Trans. at 136:8138:17. 50. Regardless of whether Ms. Collins knew of the award of costs in Civil Action No. 2013-CV-268 on December 4, 2014, I find by clear and convincing
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evidence that as a consequence of her intentional and unethical conduct in entering into the December 4, 2014 pass-through with Mr. Bruce, Ms. Collins prevented the City of Colorado Springs from collecting the amount due on Judgment #2 from the proceeds of the sale of the Property. The delay required the City Attorney’s Office to expend additional resources to prepare and serve interrogatories on Mr. Bruce and improperly delayed the collection of Judgment #2. 51. By entering into the pass-through with Mr. Bruce and preventing the payment of Judgment #2 from the proceeds of the sale of the Property, Ms. Collins placed her friendship and political alliance with Mr. Bruce above her duty of loyalty to the City of Colorado Springs. As a result, Ms. Collins engaged in and tolerated fraud, abuse, and corruption in government, in violation of §1.3.106(G) of the Code of Ethics; engaged in actions that created the appearance that Ms. Collins was violating ethical standards, in violation of §1.3.106(H) of the Code of Ethics; and engaged in activities that created the appearance of impropriety by Ms. Collins, in violation of §1.3.106(I) of the Code of Ethics. F. Censure Is the Only Sanction Available for Ms. Collins’ Violations of the Code of Ethics 52. Resolution No. 58-13 provides: Section 6. If City Council finds that a violation of the City’s Code of Ethics has occurred, whether pursuant to an admission or at the conclusion of a full evidentiary hearing, City Council shall then proceed to impose any of the following sanctions: A. Monetary Fine: A monetary fine is appropriate per the City’s Code of Ethics if the individual who committed an ethics violation financially benefitted from their actions. Such penalty shall be double the amount of financial equivalent of any benefits obtained by such actions. The manner of recovery
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and any additional penalties may be as provided by law. City Code §1.3.101 et seq. B. Censure: Censure is a formal, official reprimand by City Council of one of its members. Such penalty carries no fine or suspension of the rights of the member as an elected official. City Charter, Article III, §50. C. Removal: Removal is available for City Council appointees and member [sic] of boards, committees and commissions appointed by City Council. City Charter, Article IX, §10(a). If the violator is a Mayoral appointee, City Council may make a recommendation to the Mayor that the appointee be removed. 53. There is no evidence that Ms. Collins benefitted financially from her actions violating the Code of Ethics. Consequently, the sanction of a monetary fine is not available in this case. 54. Removal is available as a sanction only against City Council appointees, not elected Council Members. The recommendation for removal is available as a sanction only against Mayoral appointees, and not elected Council Members. 55. The only sanction permitted under Resolution No. 58-13 for an ethical violation by a Council Member is censure. Resolution No. 58-13(6)(C). Censure may not carry any “fine or suspension of the rights of the member as an elected official.” Resolution No. 58-13(6)(B). VII. THE APPROPRIATE SANCTION The appropriate sanction for Ms. Collins’ improper conduct in violation of the Code of Ethics is censure in the form of a formal, official reprimand by the City Council, without fine or suspension of her rights as a Council Member.
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Dated February 15, 2016.
________________________________________________________ Boyd N. Boland, Hearing Officer Judicial Arbiter Group, Inc.
CERTIFICATE OF SERVICE I hereby certify that on this 15th day of February, 2016, a true and correct copy of the foregoing Initial Decision was served via electronic filing (e-mail), addressed to the following: Helen Collins [email protected] Dugan, Suzanne [email protected] William A. Wright, Esq. [email protected] Merv Bennett [email protected] Original Signature on File Jackie Burt, Administrative Clerk Judicial Arbiter Group, Inc.
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