DISTRICT COURT, CITY AND COUNTY OF
DENVER, COLORADO
1437 Bannock Street
Denver, Colorado 80202
STATE OF COLORADO ex rel. CYNTHIA H.
COFFMAN, ATTORNEY GENERAL FOR THE
STATE OF COLORADO, and JULIE ANN
MEADE, ADMINISTRATOR, UNIFORM
CONSUMER CREDIT CODE,
Plaintiffs,

..... COURT USE ONLY .....

v.

FREEDOM STORES, INC. d/b/a FREEDOM
FURNITURE & ELECTRONICS, MILITARY
CREDIT SERVICES, LLC, FREEDOM
ACCEPTANCE CORPORATION, LEONARD B.
MELLEY, JR. and JOHN F. MELLEY,
Defendants.
Case No.: 15 CV 31423
Courtroom: 275

CONSENT JUDGMENT
Plaintiffs, the State of Colorado ex rel. Cynthia H. Coffman, Attorney General
for the State of Colorado, and Julie Ann Meade, Administrator of the Uniform
Consumer Credit Code (collectively "the State") and defendants Freedom Stores,
Inc. d/b/a Freedom Furniture & Electronics, Military Credit Services, LLC, and
Freedom Acceptance Corporation (the "Entity Defendants") Leonard B. Melley, Jr.
and John F. Melley (the "Individual Defendants") (collectively the "Defendants"),
hereby consent to the entry of final judgment in this matter as embodied in this
Consent Judgment, to resolve fully and finally the claims alleged in the abovecaptioned 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, DECREE, and ADJUDGE, as
follows:

I. JURISDICTION AND VENUE
1.
This Court has jurisdiction over the parties and the subject matter of
this action.
2.
By Order dated January 29, 2016, the Court granted the State's
Motion to Amend its Complaint. The State's First Amended Complaint dated
October 9, 2015 (Complaint), which is fully incorporated herein by this reference,
states claims against Defendants pursuant to Colorado's Uniform Consumer Credit
Code, C.R.S. § 5-1-101, et seq. (Code) and the Colorado Consumer Protection Act,
C.R.S. § 6-1-101, et seq. (CCPA).
3.
The Entity Defendants filed their Answer to the First Amended
Complaint, asserting various defenses, on February 19, 2016.
4.
The Individual Defendants were served with the First Amended
Complaint in February, 2016, were granted an extension of time to file their
responses to the Complaint until April 4, 2016. The Individual Defendants filed a
Motion to Dismiss Pursuant to C.R.C.P. 12(b)(2) and C.R.C.P. 12(b)(5) on April 4,
2016.
5.
The Court is authorized to issue the relief requested in the Complaint
pursuant to the Code and CCPA.
6.

Venue is proper in the City and County of Denver, Colorado.

II. PARTIES
7.
Plaintiff Cynthia H. Coffman is the duly elected Attorney General of
the State of Colorado. She is authorized under C.R.S. § 6-1-103 to enforce the
CCPA, and may bring a civil action against a person for engaging in deceptive trade
practices. In such action, the State may seek injunctive relief to prohibit the person
from violating the CCPA, obtain consumer restitution, and collect civil penalties for
violations ofthe CCPA. See C.R.S. §§ 6-1-110, 6-1-112, and 6-1-113.
Plaintiff Julie Ann Meade is the duly appointed Administrator of the
8.
Code. She is charged with enforcement of the Code. See C.R.S. § 5-6-104. In
particular, she is authorized to bring a civil action to enforce compliance with the
Code. In such action, she may seek injunctive relief to restrain a person from
violating the Code, obtain consumer restitution, and seek civil penalties for Code
2

 violations. See C.R.S. §§ 5-6-111 to -114.
Defendant Freedom Stores, Inc., d/b/a Freedom Furniture &
9.
Electronics, is a corporation duly formed and existing under the laws of Delaware.
It has corporate offices at 700 Godwin Avenue, Suite 110, Midland Park, New
Jersey 07432.
Defendant Military Credit Services, LLC is a limited liability company
10.
formed and existing under the laws of Virginia. It has business offices located at
1150 E. Little Creek Road, Norfolk, Virginia 23518.
11.
Defendant Freedom Acceptance Corporation is a corporation duly
formed and existing under the laws of Virginia. It has business offices located at
1150 E. Little Creek Road, Norfolk, Virginia 23518.
12.
Defendant Leonard B. Melley, Jr. is a resident of the state of North
Carolina, and is an officer of each of the Entity Defendants.
13.
Defendant John F. Melley is a resident of the Commonwealth of
Virginia, and is an officer of each of the Entity Defendants.

III.

DEFINITIONS

For purposes of this Consent Judgment, the following terms have the
meanings stated.
14.
"BOLM" means Bank of Lake Mills, a FDIC insured bank chartered by
the state of Wisconsin.
"Club Membership Product" means a membership in any club or
15.
organization that a Colorado Consumer purchases in connection with a Consumer
Credit Transaction.
16.
"Colorado Consumer" means a consumer to whom credit is granted in a
Consumer Credit Transaction.
17.
"Consumer Credit Transaction" has the meaning set forth in C.R.S. 51-301(12) except that it includes only those Consumer Credit Transactions "made in
this state" as defined in C.R.S. § 5-1-201(1) or that otherwise fall within the scope of
the Code pursuant to C.R.S. §§ 5-1-201 and 5-1-202.
18.
"Debt Waiver Product" means an agreement under which a creditor
agrees to reduce or forgive the consumer's obligations under a Consumer Credit
3

 Transaction upon the occurrence of a specified event, such as the death or injury of
the consumer, or the damage or destruction of the collateral. "Debt Waiver Product"
does not include credit insurance or property insurance for which the cost is
permitted to be treated as an "additional charge" by C.R.S. § 5-2-202(3).
"Enjoined Persons" means the Defendants, the officers and employees
19.
of the Entity Defendants, and those persons in active concert or participation with
the Enjoined Persons who have actual or constructive notice of this Consent
Judgment. The term "Enjoined Persons" refers both to each individual Enjoined
Person and to the Enjoined Persons collectively, as appropriate based upon the
specific context in which the term is used herein.
20.
"Distant Forum Action" means a debt-collection action or proceeding
filed against a consumer in a forum other than one in: (i) the city, county, or parish,
where the consumer resides at the time the action is filed; (ii) the city or county
where the consumer was physically present when the agreement on which the
action is based was signed; or (iii) a city, county, or parish contiguous to, adjacent
to, or within 50 miles of (i) or (ii).
21.
the Court.

"Effective Date" means the date this Consent Judgment is entered by

22.
"Freedom Furniture" means defendant Freedom Stores, Inc. d/b/a
Freedom Furniture & Electronics.
23.

"FAC" means defendant Freedom Acceptance Corporation.

24.

"Military Credit" means defendant Military Credit Services, LLC.

25.
"Proper Forum" means a forum in: (i) the city, county, or parish where
the consumer resides at the time the action is filed; (ii) the city or county where the
consumer was physically present when the agreement on which the action is based
was signed; or (iii) a city, county, or parish contiguous to, adjacent to, or within 50
miles of (i) or (ii).

IV.

GENERAL PROVISIONS

26.
It is expressly understood, acknowledged and agreed to by the parties
that nothing in this Consent Judgment constitutes an admission, declaration, or
other evidence of the rights or liabilities of any person or entity, except with respect
to the terms provided in the Consent Judgment. The State acknowledges that the
Defendants have denied liability for the allegations and claims set forth in the
Complaint.

4

 V. INJUNCTIVE RELIEF
27.
In the event that an Enjoined Person purchases or otherwise acquires,
after the Effective Date, a Consumer Credit Transaction originated by a bank or
other depository institution that is entitled to the benefits of the federal usury
preemption doctrine pursuant to 12 U.S.C. § 85, 12 U.S.C. § 1831d, or other
equivalent federal laws, the Enjoined Person shall treat each Consumer Credit
Transaction as though it did not originate from such bank or other depository
institution, and thus shall not rely upon any federal law permitting the exportation
of interest rates as a basis for failing to comply with the Code, including the Code's
finance charge ceilings. This prohibition applies only when:
an Enjoined Person plays any role in the marketing of the Consumer
a.
Credit Transaction;
b.
an Enjoined Person plays any role in underwriting the Consumer
Credit Transaction or otherwise determining whether credit should be
extended to the subject consumer;
c.
the Consumer Credit Transaction was originated by a bank to finance
the sale of goods by an Enjoined Person; or
d.
an Enjoined Person owed an obligation to purchase the Consumer
Credit Transaction as of the time of the Consumer Credit Transaction's
origination.
28.
Enjoined Persons shall not sell a Debt Waiver Product to Colorado
Consumers after the Effective Date without including the cost of such product in the
calculation of the finance charge for each Consumer Credit Transaction pursuant to
C.R.S. § 5-1-301(20) for purposes of compliance with the maximum finance charge
restrictions of the Code. Enjoined Persons shall disclose the finance charge and the
annual percentage rate for a Consumer Credit Transaction as required by the
Federal Truth in Lending Act, 15 U.S.C. 1601, et seq., regulations issued
thereunder, and the Code.
In the event that Enjoined Persons acquire a Consumer Credit
29.
Transaction after the Effective Date from a third party that contains a Debt Waiver
Product, Enjoined Persons are prohibited from collecting fees or charges for such
Debt Waiver Product to the extent that the collection of such fees or charges would
cause the Colorado Consumer to pay charges that exceed the maximum finance
charge restrictions of the Code. Enjoined Persons are prohibited from selling,
assigning, or otherwise transferring such Consumer Credit Transactions to any
party other than the originating party.
5

 30.
Enjoined Persons shall not sell a Club Membership Product in
connection with a Consumer Credit Transaction after the Effective Date which
provides membership rights only during the period that credit is extended to the
Colorado Consumer.
31.
Unless authorized by a rule adopted by the Administrator, Enjoined
Persons shall not charge Colorado Consumers fees based on the manner in which
such consumers make payments owed pursuant to the terms of a Consumer Credit
Transaction.
32.
Enjoined Persons shall not charge Colorado Consumers a fee for the
refinancing of a previous Consumer Credit Transaction without including such fee
in the calculation of the finance charge for the refinanced Consumer Credit
Transaction pursuant to C.R.S. § 5-1-301(20) and in the finance charge and annual
percentage rate that are disclosed for a Consumer Credit Transaction as required
by the Federal Truth in Lending Act, 15 U.S.C. 1601, et seq., regulations issued
thereunder, and the Code.
33.
In the event that Enjoined Persons offer credit insurance in connection
with a Consumer Credit Transaction and seek to qualify the fees associated with
the insurance as an additional charge pursuant to C.R.C.P. 5-2-202(3) , Enjoined
Persons shall implement policies and procedures to ensure compliance with the
requirements of C.R.C.P. 5-2-202(3). Entity Defendants shall implement such
written policies and procedures within 60 days of the Effective Date. The
referenced policies and procedures shall be in writing and shall be produced to the
State upon request.
34.
Where the agreement evidencing a Consumer Credit Transaction
authorizes Enjoined Persons to charge a delinquency charge in compliance with
C.R.S. § 5-2-203, Enjoined Persons shall not charge a delinquency charge that is
greater than the amount authorized by the agreement, regardless of whether a
greater charge could have been contracted for in compliance with the Code.
35.
Enjoined Persons shall not file or threaten to file Distant Forum
Actions against Colorado Consumers in connection with Consumer Credit
Transactions. Enjoined Persons further shall not file actions against Colorado
Consumers in connection with Consumer Credit Transactions unless the actions are
filed in a Proper Forum and in accordance with all applicable statutes of limitations
and other laws.
36.
Enjoined Persons shall not use language in agreements for Consumer
Credit Transactions originated by Defendants that call for the application of the law
6

 of a state other than Colorado, nor shall Enjoined Persons seek to enforce provisions
in agreements that evidence Consumer Credit Transactions which purport to call
for the application of the law of a state other than Colorado.
Enjoined Persons shall implement policies and procedures to ensure
37.
that all fees and charges assessed in connection with a Consumer Credit
Transaction, and all payments received on a Consumer Credit Transaction, are
identified in the account records for a Colorado Consumer and are readily accessible
by Enjoined Persons' employees who have a business need to access such record.
Entity Defendants shall implement such written policies and procedures within 60
days of the Effective Date. The referenced policies and procedures shall be in
writing and shall be produced to the State upon request.
38.
Enjoined Persons shall implement policies and procedures to ensure
that the Enjoined Persons do not collect or attempt to collect fees until such fees are
actually owed by a Colorado Consumer under the terms of a Consumer Credit
Transaction. As an example, Enjoined Persons shall ensure that costs and fees that
may be awarded by a court in connection with a lawsuit for the collection of a
Consumer Credit Transaction are not posted to the unpaid balance of a Consumer
Credit Transaction until actually awarded by a court. Entity Defendants shall
implement such written policies and procedures within 60 days of the Effective
Date. The referenced policies and procedures shall be in writing and shall be
produced to the State upon request.
39.
Enjoined Defendants shall implement policies and procedures to
ensure that Defendants do not engage in unconscionable debt collection practices as
defined in C.R.S. § 5-5-109(4). Entity Defendants shall implement such written
policies and procedures within 60 days of the Effective Date. The referenced
policies and procedures shall be in writing and shall be produced to the State upon
request.
40.
Within twenty (20) days of the Effective Date, Defendants shall
provide notice of this Consent Judgment by providing a copy of it to their officers,
directors, agents, servants, employees whose duties include compliance with the
Consent Judgment, attorneys, affiliates, subsidiaries, and assigns, including,
without limitation, any entity affiliated with or related to Defendants through
direct or indirect common ownership, control, or management, or any assignee of
any of Defendants' Consumer Credit Transactions, whether for collection or
otherwise, and to all persons in active concert or participation with Defendants.
Within thirty days of the Effective Date, Defendants shall provide proof and certify
to the Court and the State that they gave such notice, via sworn affidavit
identifying the names, titles, addresses, website addresses, if any, and telephone
numbers of the persons and entities to whom Defendants provided a copy of this
7

 Consent Judgment.

VI. MONETARY RELIEF/CONSUMER REDRESS
41.
Defendants shall pay the Colorado Attorney General the amount of
$77,000 in settlement of the States' claims with respect to Distant Forum Actions
within 10 business days of the Effective Date. Payment shall be deemed paid upon
the State's receipt of the payment, and only upon such receipt. The payment shall
be held in trust by the Attorney General, including any interest earned thereon, to
be used in the Attorney General's sole discretion for reimbursement of the State's
costs and attorney's fees in this matter, consumer restitution, consumer or creditor
educational purposes, or consumer credit or consumer protection enforcement
efforts, or for initiatives to benefit military personnel and their families.
42.
Defendants shall pay redress in the total amount of $310,000 to
Colorado Consumers who received extensions of credit from Defendants Military
Credit or Freedom Stores between April 21, 2011 and December 31, 2015.
Defendants shall pay the $310,000 in redress in the following order:
a.
b.
c.
d.
e.

to reverse any refinance fees assessed;
to reverse any court costs or attorneys' fees assessed;
to reverse any fee assessed for a Debt Waiver Product;
to reverse any electronic payment fees assessed;
any remaining balance shall be applied to all accounts for which
redress is provided pursuant to the above provisions of this Paragraph
42 with an equal amount credited or paid to each such account.

43.
Defendants shall pay redress in the total amount of $502,000 to
Colorado Consumers who entered into Consumer Credit Transactions that were
represented to consumers as originating from BOLM and that were subsequently
sold and assigned to FAC (each a "BOLM Account" and collectively the "BOLM
Accounts"). Defendants shall pay the $502,000 in redress as follows:
Defendants shall divide the BOLM Accounts into three groups: (1)
a.
accounts that are paid in full as of the Effective Date ("Paid Accounts");
(2) accounts that are "Delinquent Accounts" as defined in Paragraph
44.b., below, as of the Effective Date; and (3) accounts that are
"Current Accounts" as defined in Paragraph 44.b., below, as of the
Effective Date.
b.
Defendants shall perform an audit of each Paid Account and calculate
the "Excess Charge" for each Paid Account as follows:
(i)
Defendants shall determine the interest paid by each Colorado
Consumer on a Paid Account based on the actual dates and
amounts of the payments made by the Colorado Consumer.
8

 (ii)

c.

d.

Defendants shall then add the fee, if any, for a Debt Waiver
Product charged in connection with the Consumer Credit
Transaction, net of any adjustment permitted by Paragraph
44.h., to the amount determined under subparagraph (i).
(iii) Defendants shall determine the "Excess Charge" for each Paid
Account by calculating the amount, if any, by which the amount
determined under subparagraph (ii) exceeds the maximum
finance charge permitted by C.R.S. § 5-2-201(2) for each Paid
Account.
Defendants shall perform an audit of each Delinquent Account and
calculate the "Excess Charge" for each Delinquent Account as follows:
(i)
Defendants shall determine the interest paid by each Colorado
Consumer on a Delinquent Account based on the actual dates
and amounts of the payments made by the Colorado Consumer
for the period between the date the Delinquent Account was
originated and the date of the last payment made by the
Colorado Consumer.
(ii)
Defendants shall then add the fee, if any, for a Debt Waiver
Product charged in connection with the Consumer Credit
Transaction, net of any adjustment permitted by Paragraph 44.
h., to the amount determined under subparagraph (i).
(iii) Defendants shall determine the "Excess Charge" for each
Delinquent Account by calculating the amount, if any, by which
the amount determined under subparagraph (ii) exceeds the
maximum finance charge permitted by C.R.S. § 5-2-201(2) for
each Delinquent Account for the period between the date the
Delinquent Account was originated and the date of the last
payment made by the Colorado Consumer.
Defendants shall perform an audit of each Current Account and
calculate the "Excess Charge" for each Current Account as follows:
(i)
Defendants shall determine the interest to be paid on each
Current Account based upon the assumption that each
Consumer Credit Transaction will be paid in full in accordance
with its terms.
(ii)
Defendants shall then add the fee, if any, for a Debt Waiver
Product charged in connection with the Consumer Credit
Transaction, net of any adjustment permitted by Paragraph
44.h., to the amount determined under subparagraph (i).
(iii) Defendants shall determine the "Excess Charge" for each
Current Account by calculating the amount, if any, by which the
amount determined under subparagraph (ii) exceeds the
maximum finance charge permitted by C.R.S. § 5-2-201(2) for
each Current Account based upon the assumption that each
9

 e.

Consumer Credit Transaction will be paid in full in accordance
with its terms.
Upon calculating the "Excess Charge" for each BOLM Account as
provided in subparagraphs a. through d., above, Defendants shall add
the Excess Charges for all Paid, Delinquent and Current Accounts
togetner to determine the Total Excess Charges for all BOLM
Accounts. Defendants shall then determine the redress to be applied
to each BOLM Account by multiplying $502,000 by the ratio, expressed
as a percentage, which the Excess Charge for each BOLM Account
bears to the Total Excess Charges for all BOLM Accounts. BOLM
Accounts with an Excess Charge of $0 or less, which thus had no
Excess Charge, shall not be included in the calculation set forth in this
subparagraph (e).

44.
The following provisions apply to redress payable to Colorado
Consumers pursuant to the provisions of Paragraphs 42 and 43:
a.

b.

c.

d.

e.

f.

g.

Redress may be paid by means of a credit to the outstanding balance
owed by a Colorado Consumer to an Entity Defendant, or by check
payable to a Colorado Consumer.
Accounts of Colorado Consumers for which all payments are current or
are less than 180 days delinquent are defined for the purposes hereof
as "Current Accounts." Accounts of Colorado Consumers for which
payments are delinquent by 180 days or more are defined for the
purposes hereof as "Delinquent Accounts."
In the event the amount of the credit to be applied to a Current
Account exceeds the remaining balance due and owing on the account
(an "excess credit"), the Colorado Consumer will be paid an amount
equal to the excess credit by check.
Payment of an excess credit is not required in connection with a
Delinquent Account. The amount of an excess credit for a Delinquent
Account is defined as an "over balance credit" for the purposes hereof.
Over balance credits shall be applied to Current Accounts in
accordance with the provisions of subparagraphs i. and j., below.
Redress for accounts which were paid in full by a Colorado Consumer
prior to the application of redress credits to the account pursuant to
the terms hereof will be paid by check.
In the event the total redress, in the aggregate, for a Current or a
Delinquent Account is $10 or less, no payment or credit on that
Account is required.
No redress is required with respect to a fee or charge for which redress
was provided to the Colorado Consumer in response to the DCCC
Administrator's 2012 examination of Freedom Stores.
10

 h.

1.

J.

Redress of the amount of the fee for a Debt Waiver Product is not
required in connection with accounts for which the amount of the fee
was credited to the Colorado Consumer's account prior to the Effective
Date, or for accounts for which a claim was honored and the amount of
the debt forgiven exceeded the amount of the fee.
The aggregate amount of all over balance credits of the redress to be
paid pursuant to Paragraph 42 shall be divided by the number of
Current Accounts to which redress was paid pursuant to the provisions
of that Paragraph, and an equal portion credited or paid to each of
such accounts.
The aggregate amount of all over balance credits of the redress to be
paid pursuant to Paragraph 43 shall be divided by the number of
Current Accounts to which redress was paid pursuant to the provisions
of that Paragraph, and an equal portion credited or paid to each of
such accounts.

Within twenty (20) days of the Effective Date, Defendants shall submit
45.
to the State, at the address specified in Paragraph 57, an accounting or spreadsheet
reflecting the redress to be paid to each Colorado Consumer in accordance with the
provisions of Paragraphs 42, 43 and 44 (the "Redress Plan"). The Redress Plan shall
identify:
a.
b.
c.

d.
e.
f.
g.

each Colorado Consumer to whom redress is payable by name, account
number and current address as shown on Defendants' records,
whether the Colorado Consumer's account is a Current Account or a
Delinquent Account;
the amount of redress to be paid the Colorado Consumer for each type
of fee specified in Paragraphs 42 and 43, and as a portion of over
balance credits pursuant to Paragraph 44;
the total amount ofredress to be paid to each Colorado Consumer;
the amount to be credited to each Colorado Consumer's account;
the amount to be paid to each Colorado Consumer by check;
for Delinquent Accounts, the amount of any over balance credit, and
the total of all over balance credits.

46.
Within thirty (30) days of the submittal of Defendants' Redress Plan to
the State, Defendants shall apply credits to accounts and prepare checks payable to
Colorado Consumers consistent with the Redress Plan. Defendants are liable,
jointly and severally, for the penalty and redress obligations set forth in Paragraphs
41-43.
47.
Within thirty-five (35) days of the submittal of Defendants' Redress
Plan to the State, Defendants shall notify each Colorado Consumer of the amount of
the credit Defendants have applied to the Colorado Con urn r's account, and shall
11

 mail checks to each Colorado Consumer to whom a check is due under the Redress
Plan.
48.
Wit hin fifteen (15) days of providing the consumer :redress notices and
checks to Colorado Consumers pm· uant to Par a gr ph 47, Defendants shall provide
the State with a list of Colorado Consumers receiving consumer redress pursuant to
the provisions of this Consent Judgment and the amount of each credit and check.
Within thirty (30) days of providing t he consumer r dres notices and
49.
checks to Colorado Consumers pursuant t o P aragraph 4 7, Defendants shall r eport
to all consumer reporting agencies to which it h as previ usly :ftu·nished cr dit
information regarding the Colorado Consumers of the updated account balances.
50.
For a period of four (4) years, Defendants must maintain evidence of
the credits applied to the accounts of Colorado Consumers pursuant to the
provisions of this Consent Judgment and make such evidence available to the State
on request.
51.
In the event that Defendants are unable to locate a Colorado
Consumer to whom a redress check is issued pursuant to the provisions of
Paragraph 47 within 180 days of the date the check was issued, Defendants shall
cancel the check payable to the Colorado Consumer and issue a check payable to the
Colorado Attorney General in an equal amount . Such p ayment sh all be deliver ed to
the St ate at the address designated in P aTagr aph 57 and shall be deemed paid upon
the State's receipt of the payment, and only upon uch r eceipt. The paymen t shall
be held in trust by the Attorney General, including any interest earned thereon, to
be used in the Attorney General's sole discretion for reimbursement of the State's
costs and attorney's fees in this matter, consumer restitution, consumer or creditor
educational purposes, or consumer credit or consumer protection enforcement
efforts. When making a payment to the State pursu a nt to this P ar a graph,
Defendants shall provide the State with information indicating the name and
address of each Colorado Consumer that could not be located and the amount of the
payment owed to each consumer.
52.
In the event that any Defendant that grants a credit or makes a
payment pursuant to this Consent Judgment, or is jointly and severally liable for
such credit or payment, files for bankruptcy within 90 days after making any
payment or credit , the State may file a motion to vacate this Consent Judgmen and
r esume its claims in the above-captioned action. Defendants will not oppose any
such motion and hereby stipulate that any such bankruptcy filing will constitute
valid grounds to vacate t h is Consent Judgm ent pursuant t o C.R.C.P. 60. In a ny
such resumed procee ding, t h e St ate sh all not be limited to pursuing th e monetaxy
or injunct ive r elief set forth in hi Consent Judgm ent and instead m ay pur ue all

12

 remedies available under Colorado law.

VII. MISCELLANEOUS
53.
It is the intent and purpose of this Consent Judgment to resolve fully
and finally the issues between the State and Defendants raised and alleged in this
action, or which could have been alleged based upon the information known to the
State as of the Effective Date, and only those issues. Amongst other claims that are
resolved by this Consent Judgment, the State will not pursue any claim against
Defendants for failure to have a license to make supervised loans with respect to
accounts owned by Defendants as of the Effective Date that were made or purported
to have been made to Colorado Consumers by Military Credit or the Bank of Lake
Mills. The omission from the Complaint or this Consent Judgment of other acts,
conduct, or transactions, which might constitute other violations of the Code or
CCPA, shall not be deemed approval by the State of such acts, conduct, or
transactions.
54.
This Consent Judgment shall in no way limit, constrain, abridge,
abrogate, waive, release, or otherwise prejudice the right of any consumer to bring
any private action permitted by law.
This Consent Judgment shall not be modified except in a writing
55.
signed by the parties or their authorized representatives and approved and entered
by the Court.
This Consent Judgment shall be governed by Colorado law without
56.
regard to choice of law rules. As with the Code and CCPA, it shall be liberally
construed in the State's favor and strictly construed against Defendants, who shall
comply fully, completely, and strictly with all of its terms and provisions.
57.
as follows:

All notices under this Consent Judgment shall be in writing and given

To the State:
By regular mail and by email to:
Julie Ann Meade, Administrator
Jay Simonson, First Assistant Attorney General
Nikolai Frant, Assistant Attorney General
Consumer Protection Section- Consumer Credit Unit
Colorado Department of Law
Ralph L. Carr Colorado Judicial Center

13

 1300 Broadway, 6th Floor
Denver, Colorado 80203
J uli .lVfeade@coag.gov
J ay.Simonson@coag.gov
nikolai.frant@coag.gov
To Defendants:
By regular mail and email to:
Freedom Stores, Inc. d/b/a Freedom Furniture and Electronics:
Mr. Link Melley
Freedom Stores, Inc.
700 Godwin Avenue, Suite 110
Midland Park, New Jersey 07 432
lmell y@n: edomfe .com
Military Credit Services, LLC:
Mr. John Melley
Military Credit Services, LLC
1150 E. Little Creek Rd.
Ste. 201
Norfolk, VA 23518
jmell y@military redit .com
Freedom Acceptance Corporation:
Mr. John Melley
Freedom Acceptance Corporation
1150 E. Little Creek Rd.
Ste. 201
Norfolk, VA 23518
jmelley@militarvcredit.com
With copies to the following:
Janice Hofmann Clark
Hellerstein and Shore, P.C.
5347 S. Valentia Way, Suite 100
Greenwood Village, CO 80111
jclark@shorea'tty ·.com
and
14

 L. Jean Noonan
Hudson Cook, LLP
1020 19th Street, NW
7th Floor
Washington, D.C. 20036
jnoonan@hudco.com
Such names and addresses may be changed by g1vmg the other parties notice
delivered pursuant to this Paragraph.
58.
Any claims or causes of actions ansmg out of or based upon this
Consent Judgment shall be commenced in the District Court for the City and
County of Denver, Colorado, and Defendants hereby consent to the jurisdiction,
venue, and process of such Court. In the event of any such action or proceeding
alleging or asserting a violation of or failure to comply with this Consent Judgment,
this Consent Judgment shall be admissible in full.
59.
Nothing in this Consent Judgment shall prevent either party from
petitioning the Court for the modification of this Consent Judgment in the event
that a future federal or state law or a decision of a court of applicable jurisdiction
creates a conflict with the provisions of this Consent Judgment or authorizes
conduct which is enjoined by the provisions of this Consent Judgment, or in the
event that an otherwise unforeseen event justifies the modification of the provisions
of this Consent Judgment.
60.
This Court shall retain jurisdiction over this matter for the purpose of
enabling any party to it to apply to the Court at any time for such further orders as
may be necessary or appropriate for the construction, execution, or enforcement of,
or compliance with or punishment for violations of, this Consent Judgment.
61.
Except as otherwise provided herein or as a court previously may have
awarded, each party shall bear its own costs and attorney's fees in connection with
this matter.
62.
Defendants have had the opportunity to be represented by legal
counsel, and to consult with counsel for the State to negotiate a resolution of this
matter. Defendants knowingly and voluntarily enter into this Consent Judgment
and waive any right to a formal hearing on the matters forming the basis of this
Consent Judgment and any right to appeal therefrom.
63.
This Consent Judgment represents the entire agreement between the
parties hereto and a complete merger of prior negotiations and agreements, and is
binding upon the parties and all officers, directors, employees, shareholders,
15

 managers, members, principals, affiliates, successors, and assigns of the parties.
64.

This Consent Judgment may be executed in counterparts.

65.
On the date this Consent Judgment is signed by the Court, it shall be
entered as and become a final judgment of the Court.

SO ORDERED, ADJUDGED, and DECREED this _ _ day of _ _ __
2016.
BY THE COURT:

District Court Judge
AGREED AND CONSENTED TO:
STATE:

DEFENDANTS:

State of Colorado ex rel. Cynthia H.
Freedom Stores, Inc. d/b/a Freedom
Coffman, Attorney Gen~
eral for the State
Furniture and Electronics

of Col~
orad
. /_d?
By: __
,

h

'

.t~

.
By:
- - - - - -- - - - - -- Its: _ _ _ _ _ __ _ _ _ _ _ __

Military Credit Services, LLC
By: _ _ _ _ _ _ _ __ _ _ _ __

Its: Manager
Freedom Acceptance Corporation
By: _ _ _ _ _ _ _ _ __ _ _ __
Its: _ _ _ _ __ _ _ _ _ _ _ __

16