December 9, 2018

Colorado Court of Appeals: Disposition of Stolen Property Governed by Restitution Agreement, Not UCC or Conversion Principles

The Colorado Court of Appeals issued its opinion in People v. Madison on Thursday, May 3, 2018.

Restitution Agreement.

Madison stole scores of bottles of expensive wine from multiple liquor stores. He pleaded guilty, and the court sentenced him to a two-year term of probation and ordered restitution. As part of the restitution agreement, Madison was permitted to take possession of the stolen property if he paid restitution to the victims within a contractual period of time. (The liquor stores declined to accept the recovered wine because the storage method could not be confirmed, and thus the wine was not marketable.) Madison and the prosecution also entered into an “Evidence Disposition Agreement.” Defendant did not pay the restitution and, five years later, the sheriff’s office moved for an order authorizing it to destroy the stolen property. The motion was granted by the court.

On appeal, Madison argued that he had an ownership interest in the wine. He contended that the court should have either permitted him to sell the wine or ordered the sheriff’s office to sell it, with any proceeds applied to his restitution obligation. Disposition of the wine was governed by the restitution agreement, which expressly provided for the destruction of the wine if Madison failed to both pay the restitution and pick up the wine within 90 days. Because Madison failed to meet that deadline, the sheriff’s office had the right to dispose of the wine without seeking approval from the court or notifying Madison. Further, the agreement did not give Madison the right to determine the particular disposition of the wine or to demand that any proceeds from the disposition be distributed to the victims and then applied to reduce his restitution balance.

Madison also contended that the agreement gave him an ownership interest in the wine, notwithstanding his failure to satisfy its requirements, based on the Uniform Commercial Code (UCC) and conversion principles. Disposition of the stolen property is governed by the agreement, not by the UCC or conversion principles. Madison had a right to obtain the property only upon satisfaction of conditions precedent, which he failed to satisfy.

The order was affirmed.

Summary provided courtesy of Colorado Lawyer.

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