Orion answer and counterclaims - Colorado Attorney General
Orion answer and counterclaims - Colorado Attorney General
Orion answer and counterclaims - Colorado Attorney General
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ADAMS COUNTY, DISTRICT COURT, COLORADO<br />
1100 Judicial Center Drive<br />
Brighton, CO 80601<br />
Plaintiff:<br />
ORION FINANCIAL GROUP, INC.<br />
v.<br />
Defendants:<br />
JOHN W. SUTHERS, COLORADO ATTORNEY<br />
GENERAL, <strong>and</strong> LAURA E. UDIS, ADMINISTRATOR,<br />
UNIFORM CONSUMER CREDIT CODE, FIRST<br />
ASSISTANT ATTORNEY GENERAL<br />
v.<br />
Additional Defendant on Counterclaims:<br />
ERIC THOMPSON<br />
<strong>Attorney</strong>s for Defendants:<br />
JOHN W. SUTHERS<br />
<strong>Attorney</strong> <strong>General</strong><br />
JEANINE M. ANDERSON, Atty. Reg. No. 28206*<br />
Senior Assistant <strong>Attorney</strong> <strong>General</strong><br />
1525 Sherman Street, 7 th<br />
Floor<br />
Denver, CO 80203<br />
Phone Number: 303-866-2030<br />
FAX Number: 303-866-5474<br />
*Counsel of Record<br />
COURT USE ONLY <br />
Case No.: 11CV1834<br />
Division: A<br />
ANSWER AND COUNTERCLAIMS
Defendants <strong>and</strong> Counter-Plaintiffs, the State of <strong>Colorado</strong> ex rel. John W. Suthers,<br />
<strong>Attorney</strong> <strong>General</strong> for the State of <strong>Colorado</strong>, <strong>and</strong> Laura E. Udis, Administrator of the Uniform<br />
Debt-Management Services Act (together, the “State”), by <strong>and</strong> through the undersigned senior<br />
assistant attorney general, file the following Answer <strong>and</strong> Counterclaims:<br />
ANSWER TO COMPLAINT FOR DECLARATORY JUDGMENT<br />
PARTIES<br />
1. The State is without sufficient knowledge to form a belief as to the truth or falsity<br />
of the allegations contained in paragraph 1 of <strong>Orion</strong> Financial Group, Inc.’s (“<strong>Orion</strong>”) Complaint<br />
<strong>and</strong> therefore denies them.<br />
2. The State admits the allegations contained in paragraph 2 of <strong>Orion</strong>’s Complaint.<br />
JURISDICTION AND VENUE<br />
3. Paragraph 3 of <strong>Orion</strong>’s Complaint constitutes a legal conclusion to which no<br />
response is required. To the extent the paragraph is construed to require a response, however,<br />
the State admits that the Court has subject matter jurisdiction over this action.<br />
4. Paragraph 4 of <strong>Orion</strong>’s Complaint constitutes a legal conclusion to which no<br />
response is required. To the extent the paragraph is construed to require a response, however,<br />
the State admits that venue is proper in this Court.<br />
FACTUAL ALLEGATIONS<br />
5. The State is without sufficient information to form a belief as to the truth or<br />
falsity of <strong>Orion</strong>’s averment as to why <strong>Orion</strong> was created <strong>and</strong> therefore denies it.<br />
6. <strong>Orion</strong>’s allegation that it acted as a “stated agent” for a registered debtmanagement<br />
services company constitutes a legal conclusion to which no response is required.<br />
To the extent the allegation is construed to require a response, however, the State denies it. The<br />
State is without sufficient information to form a belief as to the truth or falsity of the remaining<br />
allegations contained in paragraph 6 of <strong>Orion</strong>’s Complaint <strong>and</strong> therefore denies them.<br />
7. The State admits that it is the Administrator’s opinion that the services <strong>Orion</strong><br />
contracts to provide are debt-management services under the <strong>Colorado</strong> Uniform Debt-<br />
Management Services Act (the “DMSA”). The State is without sufficient information to form a<br />
belief as to the truth or falsity of the remaining allegations contained in paragraph 7 of <strong>Orion</strong>’s<br />
Complaint <strong>and</strong> therefore denies them.<br />
2
8. The State states that the March 8, 2010 letter speaks for itself. To the extent that<br />
the allegations concerning the content of that letter can be construed as inconsistent with the<br />
letter, the State denies them. The State is without sufficient information to form a belief as to the<br />
truth or falsity of the remaining allegations contained in paragraph 8 of <strong>Orion</strong>’s Complaint <strong>and</strong><br />
therefore denies them.<br />
9. The State denies the allegations contained in paragraph 9 of <strong>Orion</strong>’s Complaint.<br />
10. The State states that the September 2, 2011 letter speaks for itself. To the extent<br />
that the allegations contained in paragraph 10 of <strong>Orion</strong>’s Complaint can be construed as<br />
inconsistent with the letter, the State denies them.<br />
11. The State denies the allegations contained in paragraph 11 of <strong>Orion</strong>’s Complaint.<br />
12. The State is without sufficient information to form a belief as to the truth or<br />
falsity of the allegations contained in paragraph 12 of <strong>Orion</strong>’s Complaint <strong>and</strong> therefore denies<br />
them.<br />
13. The State admits that it has not resolved its issues with <strong>Orion</strong>. The State is<br />
without sufficient information to form a belief as to the truth or falsity of <strong>Orion</strong>’s allegation that<br />
it has negotiated in good faith <strong>and</strong> therefore denies it. The remainder of paragraph 13 of <strong>Orion</strong>’s<br />
Complaint constitutes a prayer for relief to which no response is required.<br />
COUNT: I<br />
14. Paragraph 14 of <strong>Orion</strong>’s Complaint violates C.R.C.P. 10(b), which requires that<br />
the contents of each numbered paragraph be limited to a statement of a single set of<br />
circumstances. The State admits that <strong>Orion</strong> quoted C.R.S. §§ 12-14.5-204(b) <strong>and</strong> 12-14.5-231<br />
correctly. The State denies the remaining allegations in paragraph 14 of <strong>Orion</strong>’s Complaint.<br />
COUNT: II<br />
15. Paragraph 15 of <strong>Orion</strong>’s Complaint violates C.R.C.P. 10(b), which requires that<br />
the contents of each numbered paragraph be limited to a statement of a single set of<br />
circumstances. The State admits that <strong>Orion</strong> quoted C.R.S. §§ 12-14.5-225(b), 12-14.5-225(c),<br />
<strong>and</strong> 12-14.5-235(a) <strong>and</strong> (b) correctly. The State denies that the Administrator claimed to have<br />
the authority to void <strong>Orion</strong>’s contracts with consumers, as implied by <strong>Orion</strong>. The remainder of<br />
paragraph 15 constitutes a legal conclusion to which no response is required. To the extent the<br />
allegations are construed to require a response, however, the State denies them.<br />
3
COUNT: III<br />
16. Paragraph 16 of <strong>Orion</strong>’s Complaint violates C.R.C.P. 10(b), which requires that<br />
the contents of each numbered paragraph be limited to a statement of a single set of<br />
circumstances. The State admits that <strong>Orion</strong> quoted C.R.S. § 12-14.5-232(a) <strong>and</strong> Black’s Law<br />
Dictionary correctly. The remainder of paragraph 16 constitutes a legal conclusion to which no<br />
response is required. To the extent the allegations are construed to require a response, however,<br />
the State denies them.<br />
The paragraph immediately following paragraph 16 of <strong>Orion</strong>’s Complaint constitutes a<br />
prayer for relief to which no response is required. To the extent the paragraph is construed to<br />
require a response, however, the State denies the allegations contained therein.<br />
All allegations not specifically admitted are denied.<br />
DEFENSES<br />
1. <strong>Orion</strong>’s Complaint fails to state a claim upon which relief can be granted.<br />
2. <strong>Orion</strong> failed to exhaust its administrative remedies.<br />
COUNTERCLAIMS<br />
NATURE OF THE COUNTERCLAIMS<br />
1. In these difficult economic times, some <strong>Colorado</strong> consumers have turned to debtmanagement<br />
providers for help. Debt-management providers encourage consumers to default on<br />
their debts <strong>and</strong> then promise to assist the consumers by settling the consumers’ debts for pennies<br />
on the dollar. But after paying thous<strong>and</strong>s of dollars to a debt-settlement provider, consumers<br />
often discover that the provider has done nothing – or very little – to improve the consumers’<br />
financial situation. Recognizing the problems with the industry, the National Conference of<br />
Commissioners on Uniform State Laws (the “NCCUSL”) approved <strong>and</strong> recommended for<br />
enactment in all states the Uniform Debt-Management Services Act in 2005, which <strong>Colorado</strong><br />
adopted, with revisions, in 2008. The <strong>Colorado</strong> Uniform Debt-Management Services Act (the<br />
“DMSA”) protects <strong>Colorado</strong> consumers by requiring that those who “offer to provide, contract to<br />
provide, or provide” debt-management services in <strong>Colorado</strong> be registered with the Administrator<br />
of the Uniform Consumer Credit Code <strong>and</strong> refrain from certain activities.<br />
2. In March 2010, the Administrator launched an investigation into <strong>Orion</strong>’s business<br />
practices in <strong>Colorado</strong>. Through that investigation, the State learned that <strong>Orion</strong> provides debtmanagement<br />
services to <strong>Colorado</strong> residents, but it has failed to register as a provider with the<br />
Administrator <strong>and</strong> its business practices violate various provisions of the DMSA. As a result of<br />
the investigation, the State proposed a Stipulation <strong>and</strong> Final Agency Order (the “Stipulation”) to<br />
4
<strong>Orion</strong>, which <strong>Orion</strong> rejected. Before the State could file its lawsuit (indeed, while its offer was<br />
still open, per <strong>Orion</strong>’s request), however, <strong>Orion</strong> filed its Complaint for Declaratory Judgment.<br />
Therefore, the State brings the following <strong>counterclaims</strong> seeking to enjoin Counter-Defendants<br />
<strong>Orion</strong>’s <strong>and</strong> Eric Thompson’s unlawful business practices in the state of <strong>Colorado</strong>, <strong>and</strong> seeking<br />
consumer restitution, disgorgement, damages, civil penalties, <strong>and</strong> attorneys’ fees <strong>and</strong> costs.<br />
PARTIES AND JURISDICTION<br />
3. Defendant <strong>and</strong> Counter-Plaintiff John W. Suthers is the duly elected <strong>Attorney</strong><br />
<strong>General</strong> of the State of <strong>Colorado</strong>. He is authorized under C.R.S. § 6-1-103 to enforce the<br />
<strong>Colorado</strong> Consumer Protection Act (the “CCPA”) by bringing civil actions against those that<br />
engage in deceptive trade practices. In such actions, the State may seek injunctive relief,<br />
consumer restitution, disgorgement, civil penalties, damages, <strong>and</strong> attorneys’ fees <strong>and</strong> costs. See<br />
C.R.S. §§ 6-1-110, 6-1-112, <strong>and</strong> 6-1-113.<br />
4. Defendant <strong>and</strong> Counter-Plaintiff Laura E. Udis (“Udis”) is the Administrator of<br />
the Uniform Consumer Credit Code. She is authorized under C.R.S. § 12-14.5-232 to enforce<br />
the DMSA by bringing civil actions against those that violate the act. In such actions, the<br />
Administrator may seek injunctive relief, consumer restitution, disgorgement, civil penalties,<br />
damages, <strong>and</strong> attorneys’ fees <strong>and</strong> costs. See C.R.S. § 12-14.5-233.<br />
5. Plaintiff <strong>and</strong> Counter-Defendant <strong>Orion</strong> is a <strong>Colorado</strong> corporation with its office<br />
<strong>and</strong> principal place of business located at 5005 West 81 st<br />
Place, Suite 100, Westminster,<br />
<strong>Colorado</strong> 80030. <strong>Orion</strong> has provided “debt-management services” to <strong>Colorado</strong> residents under<br />
C.R.S. § 12-14.5-202(10).<br />
6. Upon information <strong>and</strong> belief, Counter-Defendant Eric Thompson (“Thompson”)<br />
was, at all pertinent times, an owner <strong>and</strong> officer of <strong>Orion</strong> <strong>and</strong>, acting alone or in concert with<br />
others, he has formulated, directed, controlled, had the authority to control, or participated in the<br />
acts <strong>and</strong> practices of <strong>Orion</strong>, including the acts <strong>and</strong> practices alleged in these <strong>counterclaims</strong>.<br />
GENERAL ALLEGATIONS<br />
a. The Debt-Management Services Act.<br />
7. Udis is the Administrator of the Uniform Consumer Credit Code in <strong>Colorado</strong>.<br />
The Administrator is responsible for, among other things, ensuring that those providing “debtmanagement<br />
services” to residents of <strong>Colorado</strong> (“provider” or “providers”) are properly<br />
registered to conduct business in <strong>Colorado</strong> <strong>and</strong> comply with the provisions of the DMSA.<br />
8. Under the DMSA, “debt-management services” means “services as an<br />
intermediary between an individual <strong>and</strong> one or more creditors of the individual for the purpose of<br />
obtaining concessions . . . .” C.R.S. § 12-14.5-202(10).<br />
5
9. To provide debt-management services to residents of <strong>Colorado</strong>, a provider must<br />
obtain a certificate of registration from the Administrator. C.R.S. § 12-14.5-204. To obtain a<br />
certificate, a provider must supply information about itself, must meet specified requirements of<br />
competency, must obtain insurance against employee dishonesty, <strong>and</strong> must post a surety bond to<br />
ensure its compliance with the DMSA. C.R.S. §§ 12-14.5-205 through 12-14.5-214.<br />
10. In addition, the DMSA establishes requirements for providers to meet in<br />
connection with their interaction with the individuals they serve. C.R.S. § 12-14.5-217<br />
prescribes detailed information that must be provided before a provider may enter into an<br />
agreement with an individual. C.R.S. §§ 12-14.5-219 through 12-14.5-224 <strong>and</strong> § 12-14.5-228<br />
govern the content of the agreement, including cancellation rights <strong>and</strong> limitations on the fees that<br />
may be charged. Other provisions address the performance <strong>and</strong> termination of agreements <strong>and</strong><br />
miscellaneous other matters. C.R.S. §§ 12-14.5-225, 12-14.5-226, <strong>and</strong> 12-14.5-228. Providers<br />
must comply with these requirements as to all transactions entered into on or after January 1,<br />
2008. C.R.S. § 12-14.5-240.<br />
b. Counter-Defendants’ Business Practices.<br />
11. <strong>Orion</strong> is not registered to provide debt-management services in <strong>Colorado</strong>.<br />
12. In March 2010, the State launched an investigation into <strong>Orion</strong>’s business practices<br />
to determine whether <strong>Orion</strong> was providing debt-management services to <strong>Colorado</strong> <strong>and</strong>, if so,<br />
whether its business practices complied with the DMSA.<br />
13. That investigation found that <strong>Orion</strong> has contracted to provide debt-management<br />
services to 165 <strong>Colorado</strong> residents <strong>and</strong> has provided debt-management services as a “back-end”<br />
provider to approximately 125 additional <strong>Colorado</strong> residents for Prestige Financial Solutions,<br />
Inc., but its business practices violate various requirements of the DMSA.<br />
14. To start, the agreements 1<br />
under which <strong>Orion</strong> contracted to provide debtmanagement<br />
services to <strong>Colorado</strong> consumers from August 8, 2009 through March 10, 2010 did<br />
not comply with the following subsections of C.R.S. § 12-14.5-219:<br />
a. (a)(2), providing that agreements must be signed <strong>and</strong> dated by the<br />
provider;<br />
b. (a)(6)(C), requiring that agreements disclose the schedule of<br />
payments to be made by or on behalf of the individual;<br />
1 <strong>Orion</strong> used at least two different agreements during this time period. Each of the violations<br />
detailed below was in at least one of the agreements. Neither of <strong>Orion</strong>’s agreements was fully<br />
compliant with the DMSA.<br />
6
c. (a)(6)(E), requiring that agreements disclose the creditors the<br />
provider believes will not participate in the plan;<br />
d. (a)(6)(F), requiring that agreements disclose that the provider will<br />
issue periodic accounting reports to the consumer;<br />
e. (d)(1)(A), (B), <strong>and</strong> (C), requiring that agreements disclose the<br />
consumer’s right to terminate the agreement without penalty or<br />
obligation; that the provider will refund 65 percent of any portion<br />
of the set-up fee that has not been credited against the settlement<br />
fee; <strong>and</strong> that following termination, all powers of attorney granted<br />
by the individual are revoked <strong>and</strong> ineffective 2<br />
; <strong>and</strong><br />
f. (d)(3)(A) <strong>and</strong> (B), requiring that agreements disclose that within<br />
five days of learning of a creditor’s decision to withdraw from a<br />
program, the provider would disclose the identity of the creditor<br />
<strong>and</strong> the consumer’s right to modify or withdraw from the<br />
agreement.<br />
15. Further, the <strong>Colorado</strong> consumers on whose behalf <strong>Orion</strong> performs debtmanagement<br />
services were not provided with the “Notice of Right to Cancel” disclosures in the<br />
form m<strong>and</strong>ated by C.R.S. § 12-14.5-220.<br />
16. Still further, <strong>Orion</strong> collected charges <strong>and</strong> payments from <strong>Colorado</strong> consumers<br />
despite the fact that its contracts did not comply with the DMSA, in violation of C.R.S. § 12-<br />
14.5-223(b).<br />
17. In addition, <strong>Orion</strong> does not comply with prerequisites for providing debtmanagement<br />
services as detailed in the following subsections of C.R.S. § 12-14.5-217:<br />
a. (d) <strong>and</strong> (g), requiring that providers provide the “Important<br />
Information for You to Consider” disclosure;<br />
b. (b)(3)(B), prohibiting a provider from providing debt-management<br />
services unless the provider, through the services of a certified<br />
counselor or certified debt specialist, has made a determination,<br />
based on the provider’s analysis of the information provided by the<br />
individual <strong>and</strong> otherwise available to it, that the plan is suitable for<br />
2<br />
This section was amended effective July 1, 2011. The alleged violations relate to Counter-<br />
Defendants’ pre-July 1, 2011 conduct.<br />
7
the individual <strong>and</strong> the individual will be able to meet the payment<br />
obligations under the plan; <strong>and</strong><br />
c. (c)(3)(B), (C), <strong>and</strong> (D), providing that before an individual assents<br />
to an agreement to engage in a plan, a provider shall, with respect<br />
to all creditors identified by the individual or otherwise known by<br />
the provider to be creditors of the individual, provide the<br />
individual with a list of creditors that the provider expects to<br />
participate but not grant concessions; creditors not expected to<br />
participate; <strong>and</strong> all other creditors.<br />
18. In addition, <strong>Orion</strong>’s powers of attorney did not contain the requisite limitation that<br />
<strong>Orion</strong> could settle debts for not more than 50 percent of the actual balance of the debt owed a<br />
creditor at the time of settlement, in violation of C.R.S. § 12-14.5-228(a)(3). 3<br />
19. Finally, <strong>Orion</strong>’s internet website does not disclose on the home page, or on a page<br />
that is clearly <strong>and</strong> conspicuously connected to the home page, the names of <strong>Orion</strong>’s principal<br />
officers, in violation of § 12-14.5-218(g)(3).<br />
20. As a result of these violations, the State proposed a Stipulation to <strong>Orion</strong>.<br />
21. <strong>Orion</strong> rejected the proposed Stipulation.<br />
FIRST COUNTERCLAIM FOR RELIEF<br />
VIOLATIONS OF COLORADO DEBT-MANAGEMENT SERVICES ACT (C.R.S. § 12-<br />
14.5-204)<br />
22. The State incorporates by reference the allegations of paragraphs 1 through 21<br />
above as if fully set forth herein.<br />
23. To provide debt-management services to residents of <strong>Colorado</strong>, a provider must<br />
obtain a certificate of registration from the Administrator. C.R.S. § 12-14.5-204.<br />
24. <strong>Orion</strong> contracts to provide <strong>and</strong> provides debt-management services to residents of<br />
<strong>Colorado</strong>.<br />
25. <strong>Orion</strong> has failed to obtain a certificate of registration from the Administrator.<br />
26. Therefore, <strong>Orion</strong> has violated the DMSA.<br />
3 See footnote 2 above.<br />
8
27. Thompson caused <strong>Orion</strong> to violate the DMSA <strong>and</strong> therefore is liable for its<br />
violations. See C.R.S. § 12-14.5-233.<br />
28. As a result of Counter-Defendants’ violations of the DMSA, the Administrator is<br />
entitled to injunctive relief, consumer restitution, disgorgement, civil penalties, <strong>and</strong> attorneys’<br />
fees <strong>and</strong> costs. See id.<br />
SECOND COUNTERCLAIM FOR RELIEF<br />
VIOLATIONS OF COLORADO DEBT-MANAGEMENT SERVICES ACT (C.R.S. § 12-<br />
14.5-219)<br />
29. The State incorporates by reference the allegations of paragraphs 1 through 28<br />
above as if fully set forth herein.<br />
30. The DMSA sets forth specific requirements concerning the content of agreements<br />
to provide debt-management services. C.R.S. § 12-14.5-219.<br />
31. The agreements under which <strong>Orion</strong> provides services do not contain the requisite<br />
content.<br />
32. Therefore, <strong>Orion</strong> has violated the DMSA.<br />
33. Thompson caused <strong>Orion</strong> to violate the DMSA <strong>and</strong> therefore is liable for its<br />
violations. See C.R.S. § 12-14.5-233.<br />
34. As a result of Counter-Defendants’ violations of the DMSA, the Administrator is<br />
entitled to injunctive relief, consumer restitution, disgorgement, civil penalties, <strong>and</strong> attorneys’<br />
fees <strong>and</strong> costs. See id.<br />
THIRD COUNTERCLAIM FOR RELIEF<br />
VIOLATIONS OF COLORADO DEBT-MANAGEMENT SERVICES ACT (C.R.S. § 12-<br />
14.5-220)<br />
35. The State incorporates by reference the allegations of paragraphs 1 through 34<br />
above as if fully set forth herein.<br />
36. The DMSA provides for specific cancellation rights that consumers shall have,<br />
<strong>and</strong> sets forth the procedures providers must comply with in notifying consumers of their right to<br />
cancel an agreement. C.R.S. § 12-14.5-220.<br />
37. <strong>Orion</strong> does not comply with the requirements set forth in C.R.S. § 12-14.5-220.<br />
38. Therefore, <strong>Orion</strong> has violated the DMSA.<br />
9
39. Thompson caused <strong>Orion</strong> to violate the DMSA <strong>and</strong> therefore is liable for its<br />
violations. See<br />
C.R.S. § 12-14.5-233.<br />
40. As a result of Counter-Defendants’ violations of the DMSA, the Administrator is<br />
entitled to injunctive relief, consumer restitution, disgorgement, civil penalties, <strong>and</strong> attorneys’<br />
fees <strong>and</strong> costs. See id.<br />
FOURTH COUNTERCLAIM FOR RELIEF<br />
VIOLATIONS OF COLORADO DEBT-MANAGEMENT SERVICES ACT (C.R.S. § 12-<br />
14.5-223)<br />
41. The State incorporates by reference the allegations of paragraphs 1 through 40<br />
above as if fully set forth herein.<br />
42. The DMSA prohibits providers from imposing fees if their agreements do not<br />
comply with the DMSA.<br />
43. <strong>Orion</strong> imposes fees despite the fact that its agreements do not comply with the<br />
DMSA.<br />
44. Therefore, <strong>Orion</strong> has violated C.R.S. § 12-14.5-223(b) of the DMSA.<br />
45. Thompson caused <strong>Orion</strong> to violate the DMSA <strong>and</strong> therefore is liable for its<br />
violations. See C.R.S. § 12-14.5-233.<br />
46. As a result of Counter-Defendants’ violations of the DMSA, the Administrator is<br />
entitled to injunctive relief, consumer restitution, disgorgement, civil penalties, <strong>and</strong> attorneys’<br />
fees <strong>and</strong> costs. See id.<br />
FIFTH COUNTERCLAIM FOR RELIEF<br />
VIOLATIONS OF COLORADO DEBT-MANAGEMENT SERVICES ACT (C.R.S. § 12-<br />
14.5-217)<br />
47. The State incorporates by reference the allegations of paragraphs 1 through 46<br />
above as if fully set forth herein.<br />
48. The DMSA requires that providers provide consumers with certain cautionary<br />
disclosures <strong>and</strong> information, fully described in C.R.S. § 12-14.5-217.<br />
49. <strong>Orion</strong> does not provide the requisite disclosures <strong>and</strong> information.<br />
50. Therefore, <strong>Orion</strong> has violated the DMSA.<br />
10
51. Thompson caused <strong>Orion</strong> to violate the DMSA <strong>and</strong> therefore is liable for its<br />
violations. See<br />
C.R.S. § 12-14.5-233.<br />
52. As a result of Counter-Defendants’ violations of the DMSA, the Administrator is<br />
entitled to injunctive relief, consumer restitution, disgorgement, civil penalties, <strong>and</strong> attorneys’<br />
fees <strong>and</strong> costs. See id.<br />
SIXTH COUNTERCLAIM FOR RELIEF<br />
VIOLATIONS OF COLORADO DEBT-MANAGEMENT SERVICES ACT (C.R.S. § 12-<br />
14.5-228(a)(3))<br />
53. The State incorporates by reference the allegations of paragraphs 1 through 52<br />
above as if fully set forth herein.<br />
54. Under the DMSA, if a provider takes a power of attorney that authorizes the<br />
provider to settle a debt, the power of attorney must expressly limit the provider’s authority to<br />
settle the debt for not more than 50 percent of the actual balance of the debt owed at the time of<br />
settlement. C.R.S. § 12-14.5-228(a)(3). 4<br />
55. <strong>Orion</strong>’s powers of attorney fail to include the required limitations.<br />
56. Therefore, <strong>Orion</strong> has violated the DMSA.<br />
57. Thompson caused <strong>Orion</strong> to violate the DMSA <strong>and</strong> therefore is liable for its<br />
violations. See C.R.S. § 12-14.5-233.<br />
58. As a result of Counter-Defendants’ violations of the DMSA, the Administrator is<br />
entitled to injunctive relief, consumer restitution, disgorgement, civil penalties, <strong>and</strong> attorneys’<br />
fees <strong>and</strong> costs. See id.<br />
SEVENTH CLAIM FOR RELIEF<br />
VIOLATIONS OF COLORADO DEBT-MANAGEMENT SERVICES ACT (C.R.S. § 12-<br />
14.5-218(g)(3))<br />
59. The State incorporates by reference the allegations of paragraphs 1 through 58<br />
above as if fully set forth herein.<br />
60. Under the DMSA, a provider that maintains an internet website shall disclose on<br />
the home page of its website, or on a page that is clearly <strong>and</strong> conspicuously connected to the<br />
4 See footnote 2 above.<br />
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home page by a link that clearly reveals its contents: the names of its principal officers. § 12-<br />
14.5-218(g)(3).<br />
61. <strong>Orion</strong>’s website does not make such a disclosure.<br />
62. Therefore, <strong>Orion</strong> has violated the DMSA.<br />
63. Thompson caused <strong>Orion</strong> to violate the DMSA <strong>and</strong> therefore is liable for its<br />
violations. See C.R.S. § 12-14.5-233.<br />
64. As a result of Counter-Defendants’ violations of the DMSA, the Administrator is<br />
entitled to injunctive relief, consumer restitution, disgorgement, civil penalties, <strong>and</strong> attorneys’<br />
fees <strong>and</strong> costs. See id.<br />
EIGHTH COUNTERCLAIM FOR RELIEF<br />
VIOLATIONS OF COLORADO CONSUMER PROTECTION ACT (C.R.S. § 6-1-<br />
105(1)(z))<br />
65. The State incorporates by reference the allegations of paragraphs 1 through 64<br />
above as if fully set forth herein.<br />
66. Under the CCPA, a person engages in a deceptive trade practice when, in the<br />
course of such person’s business, such person “[r]efuses or fails to obtain all governmental<br />
licenses or permits required to perform the services . . . as agreed to or contracted for with a<br />
consumer.” See C.R.S. § 6-1-105(1)(z).<br />
67. <strong>Orion</strong> has failed or refused to obtain from the Administrator the requisite<br />
certificate of registration to provide debt-management services, in violation of C.R.S. § 6-1-<br />
105(1)(z).<br />
68. Therefore, <strong>Orion</strong> has violated the CCPA.<br />
69. Thompson caused <strong>Orion</strong> to violate the CCPA <strong>and</strong> therefore is liable for its<br />
violations. See C.R.S. § 6-1-112.<br />
70. As a result of Counter-Defendants’ violations of the CCPA, the <strong>Attorney</strong> <strong>General</strong><br />
is entitled to injunctive relief, consumer restitution, disgorgement, civil penalties, <strong>and</strong> attorneys’<br />
fees <strong>and</strong> costs. See C.R.S. §§ 6-1-110, 6-1-112, <strong>and</strong> 6-1-113.<br />
PRAYER FOR RELIEF<br />
ACCORDINGLY, the State prays for entry of judgment in its favor, <strong>and</strong> against Counter-<br />
Defendants, <strong>and</strong> requests the Court provide the following relief:<br />
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from:<br />
A. Issue a preliminary <strong>and</strong> permanent injunction, enjoining Counter-Defendants<br />
1. Providing debt-management services to residents of <strong>Colorado</strong><br />
without obtaining from the Administrator the requisite certificate<br />
of registration;<br />
2. Providing debt-management services to <strong>Colorado</strong> residents in<br />
violation of the DMSA’s requirements; <strong>and</strong><br />
3. Engaging in deceptive trade practices, in the course of their<br />
business activities, in violation of the CCPA.<br />
B. Impose civil penalties against Counter-Defendants under C.R.S. § 12-14.5-233<br />
<strong>and</strong> C.R.S. § 6-1-112;<br />
C. Order Counter-Defendants to make restitution of money to the persons aggrieved<br />
by the violations;<br />
D. Order Counter-Defendants to disgorge all profits from their unlawful activities in<br />
the state of <strong>Colorado</strong>;<br />
E. Award costs, expenses, <strong>and</strong> attorneys’ fees incurred by the State;<br />
F. Award pre- <strong>and</strong> post-judgment interest; <strong>and</strong><br />
G. Award such other relief as the Court deems proper <strong>and</strong> just.<br />
DATED: Denver, <strong>Colorado</strong><br />
January 6, 2012<br />
JOHN W. SUTHERS<br />
<strong>Attorney</strong> <strong>General</strong><br />
s/ Jeanine M. Anderson<br />
JEANINE M. ANDERSON, 28206*<br />
Senior Assistant <strong>Attorney</strong> <strong>General</strong><br />
Consumer Credit Unit<br />
Consumer Protection Section<br />
<strong>Attorney</strong>s for Defendants <strong>and</strong> Counter-Plaintiffs<br />
*Counsel of Record<br />
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Pursuant to C.R.C.P. 121 § 1-26(7), the original of this document with original signatures is<br />
maintained in the Offices of the <strong>Colorado</strong> <strong>Attorney</strong> <strong>General</strong>, 1525 Sherman Street, Seventh<br />
Floor, Denver, <strong>Colorado</strong> 80203, <strong>and</strong> will be made available for inspection by other parties or<br />
the Court upon request.<br />
CERTIFICATE OF SERVICE<br />
This is to certify that a true <strong>and</strong> correct copy of the within Answer <strong>and</strong> Counterclaims,<br />
dated January 6, 2012, was duly served this 6th day of January, 2012 upon the following parties:<br />
Brad M. Daybell, Esq.<br />
The Law Office of Brad M. Daybell, PC<br />
11001 West 120th Avenue, Suite 400<br />
Broomfield, CO 80021<br />
14<br />
s/ Michele A. Kendall