Case 15-11755-CSS Doc 729-2 Filed 06/29/16 Page 6 of 13 DISTRICT COURT, CITY AND COUNTY OF DENVER, COLORADO 1437 Bannock Street Denver, Colorado 80202 JULIE ANN MEADS, ADMINISTRATOR, UNIFORM CONSUMER CREDIT CODE, Plaintiff, v. USA DISCOUNTERS, LTD d/b/a USA LIVING a a n.i_ ~r t~mru~~~c T~i,~~rTTL~T ~T~C~ Y L' L 1~IJ G111U lA!fJ/ d 1'Ll`J 1 ~J11.L' lV {J V Defendant. ~ COURT USE ONLY Case No.~ 2015CV32520 Division 368 Courtroom 280 FINAL CONSENT JUDGMENT Plaintiff, Julie Ann Meade, Administrator of the Uniform Consumer Credit Code (the "Administrator"), and Defendant, USA Discounters, LTD d/b/a USA Living and d/b/a Fletcher's Jewelers ("USA")(together, "Parties"), hereby consent to entry of final judgment in this matter as embodied in this Final Consent Judgment to resolve fully and finally the claims and issues in the above captioned case, without trial or hearing, and to avoid the additional time and expense associated with continuing litigation. The Court, having considered this matter and being otherwise fully advised in the premises, DOES HEREBY FIND, CONCLUDE, ORDER, and ADJUDGE,as follows I. JURISDICTION AND VENUE This Court has jurisdiction over the parties and subject mattei of this 1. action, and shall retain jurisdiction over this matter for all purposes, including, but not limited to, the purpose of enabling any party to this Final Consent Judgment to apply to the Court at any time for any further orders which may be necessary or Case 15-11755-CSS Doc 729-2 Filed 06/29/16 Page 7 of 13 appropriate for the construction, modification, or execution of this Final Consent Judgment, and for the enforcement or compliance herewith and the punishment of violations hereof. 2. This Court has jurisdiction over any claim, cause of action, or proceeding arising out of or based upon this Final Consent Judgment. 3. Venue is proper in the City and County of Denver, Colorado. II. PARTIES The Administrator is the duly appointed Administrator of the Colorado TTrif~rm Cr~nc~imnr (rrPrlit rnr~P~ r.R.~. s~ .r_l'~'~n~_P.f .S'P.lY, ~2n~~~ ~"iJCC'C" pY' "Code"). She is authorized to enfoYce compliance with the UCCC, see C.R.S. §§ 5-6101, et seq., and may bring a civil action against those who make or collect charges in excess of those permitted by the UCCC. In such actions, the Administrator may seek injunctive relief to restrain persons from violating the UCCC, obtain consumer restitution, and collect civil penalties for UCCC violations. See C.R.S. §§ 5-6-111, 56-112, 5-6-113, and 5-6-114. 4. USA, doing business as USA Living and/or Fletcher's Jewelers, is a 5. foreign company organized under Virginia law. USAD identifies its principal place of business as 6353 Center Drive, Bldg 8 Ste 101, Norfolk, Virginia 23502. III. DEFINITIONS Consumer credit sale. The term "consumer credit sale" has the 6. definition set forth in C.R.S. § 5-1_-301(11). Affected Consumer. The term "Affected Consumer" includes (a) the 7. 526 previously identified Colorado consumers USA obtained a judgment against in Virginia and (b) the 55 previously identified Colorado consumers USA obtained a judgment against in Colorado. FINDINGS OF FACT &ADMISSIONS IV. All facts identified as stipulated in the March 17, 2016 Trial 8. Management Order are adopted here by reference. V. GENERAL PROVISIONS Scope of Final Consent Judgment. This Final Consent Judgment is 9. entered pursuant to the UCCC. Unless otherwise provided, this Final Consent Judgment shall apply to USA and its officers; directors; agents servants Case 15-11755-CSS Doc 729-2 Filed 06/29/16 Page 8 of 13 employees affiliates subsidiaries; heirs; together with the other parties described in C.R.C.P. 65(d); all entities that USA may own, operate, or control, in whole or in part; and all entities in which USA has invested capital in an amount that exceeds $25,000. 10. Release of Claims. Subject to the conditions in paragraph 13, the Administrator agrees and acknowledges that execution of this Final Consent Judgment is a complete settlement and release of all claims under the Code on behalf of the Administrator against USA and its directors, employees, managers, and officers (as well as the officers and directors of USA's parent company, USA Discounters Holding Company, Inc.), whether past or present, in each case solely in their capacity as such, that were asserted or could have been asserted under the f!n~1A; that. arncA ~rinr t.n gr~tr~~ of t.1~A Final (~!nncPnt ~T~i~bmPnt.; an~ that. rglatg to nr are based upon the acts or practices which are the subject of the Complaint. 11. Bankruptcy Claim. Promptly following the effectiveness of this Final Consent Judgment, the Administrator will amend her general, non priority unsecured claim in USA's bankruptcy case ("Administrator's Unsecured Claim") to the penalty amount described in paragraph 35 and will not file, assert, or otherwise pursue any further claims in the bankruptcy case (whether unsecured, secured, priority, administrative or otherwise). The Administrator's Unsecured Claim shall be deemed allowed in such amended amount as a general, non-priority unsecured claim against USA's bankruptcy estate. 12. Statement Regarding Liability. USA neither admits nor denies any wrongdoing. It is agreeing to this Final Consent Judgment for settlement purposes. 13. Preservation of Law Enforcement Action. Nothing herein precludes the Administrator from enforcing the provisions of this Final Consent Judgment or from pursuing any non released claims, including any law enforcement action with respect to any acts or practices of USA not covered by this Final Consent Judgment or any acts or practices in which USA engages after entry of this Final Consent Judgment. 14. Compliance with and Application of State Law. Nothing herein relieves USA of its duty to comply with applicable laws of the State of Colorado nor constitutes authorization by the Administrator for USA to engage in acts and practices prohibited by such laws. This Final Consent Judgment shall be governed by the laws of the State of Colorado. 15. Non-Approval of Conduct. Nothing herein constitutes approval by the Administrator of any of USA's past, present, or future business practices, and USA shall not make any representation to the contrary. Case 15-11755-CSS Doc 729-2 Filed 06/29/16 Page 9 of 13 16. Preservation of Private Claims. Unless otherwise provided, nothing in this Final Consent Judgment shall limit, constrain, abridge, abrogate, waive, release, or otherwise prejudice any private rights, causes of action, or remedies of any person against USA with respect to the acts and practices covered by this Final Consent Judgment. 17. Contempt. The parties understand and agree that a finding of any violation of any term or provision of this Final Consent Judgment shall give rise to all contempt remedies available to the Court. The parties agree to waive any requirement of personal service provided that they provide written notice in accordance with the terms of this Final Consent Judgment. 1 R, FgAriitinYz ~n (Jn»ntPrn~rtc 'Phie Final rnnSgnt. .T~ir~g_mPnt. _,.__„ ma~~ hP executed in counterparts. 19. Severability. If any provisions) of this Final Consent Judgment is held to be invalid, illegal, unenforceable, or in conflict with the law of any jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 20. Amendment. This Final Consent Judgment may be amended solely by written agt~eement signed by both Parties or their authorized representatives and with the Court's approval. 21. Complete Agreement. This Final Consent Judgment represents the entire agreement between the parties hereto and a complete merger of prior negotiations and agreements. 22. Effective Date. On the date this Final Consent Judgment is entered by the Court, this Court shall enter it as a final judgment of the Court and that date shall be the effective date of this Final Consent Judgment for all purposes. 23. Attorney Fees and Costs. Except as otherwise provided herein, each party shall bear its own attorney fees and costs in connection with this matter. VI. INJUNCTIVE l3,ELIEF 24. USA is immediately and permanently enjoined from violating any provision of the Code. 25. Within 30 days of entry of this Final Consent Judgment, USA will adjust the account balances for all Colorado consumers from the previouslyidentified 7,897 credit agreements who still have outstanding account balances to reflect the maximum possible finance charge under C.R.S. ~ 5-2-201, including Case 15-11755-CSS Doc 729-2 Filed 06/29/16 Page 10 of 13 interest and debt cancellation. Within 45 days of effectiveness of this Final Consent Judgment, USA will furnish the Administrator with proof of the adjusted account balances. 26. Upon entry of this Final Consent Judgment, USA will immediately and permanently cease and desist from charging any additional fees when a Colorado consumer makes a payment via any form of electronic means. 27. Upon entry of this Final Consent Judgment, USA will immediately and permanently cease and desist from communicating with any Colorado consumer's employer before obtaining a final judgment against the consumer except to verify the consumer's employment, to ascertain the consumer's whereabouts, or to request C,'A, ilia~ ~iho nnn ciµm o nr ~nn+a~t TT.ti 28. Upon entry of this Final Consent Judgment, USA will immediately and permanently cease disclosure of Colorado consumers' indebtedness to any thirdparty other than where appropriate to a consumer credit bureau, or with a consumer's employer as described above, or with a personal reference previously provided by the consumer as describe above. 29. Upon entry of this Final Consent Judgment, USA will henceforth file suit against defaulted Colorado consumers only in Colorado or, if the consumer no longer resides in Colorado, in the county and state where the consumer currently resides. 30. Upon entry of this Final Consent Judgment, USA will issue letters henceforth providing notice of the right to cute that are fully compliant with C.R.S. § 5-5-110. 31. Within 30 days of effectiveness of this Final Consent Judgment, USA will send to any consumer who received a notice of the right to cure that was defective under C.R.S. § 5-5-110 a new notice of the right to cure compliant with C.R.S. § 5-5-110, and provide the opportunity to cure the default before taking additional collection actions on the account. Within 45 days of effectiveness of this Final Consent Judgment, USA will furnish the Administrator with proof of the sent notices of the right to cure. Within 45 days of effectiveness of this Final Consent Judgment, USA 32. will report revised account balances (after applying all injunctive, monetary, or other relief specified in this Final Consent Judgment), to all credit bureaus to which USA previously reported. Within 60 days of effectiveness of this Final Consent Judgment, USA will furnish the Administrator with proof of the reporting. 33. Within 45 days of effectiveness of this Final Consent Judgment, USA Case 15-11755-CSS Doc 729-2 Filed 06/29/16 Page 11 of 13 will provide notice to all persons with adjusted account balances which provides "Because of a settlement USA Discounters recently reached with the State of Colorado with respect to certain accounts, USA has adjusted your account balance on (date) by $ (amount). As of that date, your new (adjusted) account balance was $ (amount)." The notice shall be in not less than 14-point bold typeface. USA may provide such notice by United States mail or by electronic mail to the consumers' last known address. USA will provide proof of such mailings within 60 days of effectiveness of this Final Consent Judgment. VII. MONETARY PROVISIONS 34, 1_T~A a~'ree~ that it will ~ff~re~ c3Pht relief to AffP~tPri (~',nne»mPxc ac follows for all judgments arising from lawsuits filed in Virginia against a Colorado consumer, USA will agree to debt relief of sixty percent(60%) of the judgment at the time it was issued. If the amount of the debt relief is less than the current legal balance, USA will adjust the balance downward accordingly. If the amount of debt relief extinguishes the current legal balance, USA will adjust the balance to zero. Any remaining amount of debt relief that exceeds the current legal balance has been incorporated into and is included within the Administrator's Unsecured Claim as described in Paragraph 35. USA will accomplish these measures within 30 days of effectiveness of this Final Consent Judgment. USA will furnish proof of same within 45 days of effectiveness of this Final Consent Judgment. 35. The Court enters judgment for a civil penalty against USA in the amount of one million dollars ($1,000,000.00). This specified penalty amount comprises the Administrator's Unsecured Claim. 36. The Court immediately enters judgment on the full penalty amount. VIII. MISCELLANEOUS 37. Except as expressly provided in this Final Consent Judgment, nothing herein shall be construed as relieving USA of its obligation to comply with all state and federal laws, regulations or rules, or granting permission to engage in any acts or practices prohibited by such law, regulation, or rule. 38. The Parties acknowledge that they have thoroughly reviewed this Final Consent Judgment with their counsel, that they understand and agree to its terms, and that they agree that it shall be entered as an Order of this Court. The Parties knowingly and voluntarily enter into this Final Consent Judgment and waive any right to a formal hearing on the mattex•s forming the basis of this Final Consent Judgment and any right to appeal herefrom. Case 15-11755-CSS Doc 729-2 Filed 06/29/16 Page 12 of 13 39. Each of the non-Court signatories. to this Consent Judgment warrants and represents that he or she has authority to agree to this Consent Judgment on behalf of the party for which he or she is signing. 40. Notice. All notices to the State shall be sent to the following David B. Shaw Assistant Attorney General Colorado Department of Law Consumer Protection Section Ralph L. Carr Colorado Judicial Center 1300 Broadway, 6th Floor l~Pn~Pr; (~;(~ $(l~Q~ david.shaw@coag.gov All notices to USA shall be sent to the following Greg Goldberg Steven T. Collis Holland &Hart, LLP 555 17th St., #3200 Denver, CO 80202 GGoldber~;@hollandhart.com stcollis@hollandhart.com SO ORDERED,ADJUDGED, and DECREED this day of By the Court Catherine A. Lemon Denver District Court Judge 2016. Case 15-11755-CSS Doc 729-2 Filed 06/29/16 Page 13 of 13 For the Plaintiffs s/ Julie Ann Meade JULIE ANN MEADE Administrator, Uniform Consumer Credit Code Dated Attorneys for Plaintiff s/ David B. Shaw DAVID B. SHAW,#40453 TR,TNA K. TAYi.nR; #471,94 Assistant Attorneys General Colorado Department of Law Consumer Protection Section Consumer Credit Unit Dated For the Defendant Dated Print Name Title Attorneys for Defendant HOLLAND &HART,LLP s/ Greg E. Goldberg GREG E. GOLDBERG STEVEN T. COLLIS Attorneys for Defendant Dated Attorneys for Defendants Pursuant to C.R.C.P. 121, ~ 1-26(7, the original of this document with original signatures is maintained in the offices of the Colorado Department of Law, Consumer Protection Section, Ralph L. Carr Judicial Center, 1300 Broadway, 6~h FL, Denver, CO 80203, and will be made available for inspection upon request.