dissenting.
Can a contractor who voluntarily funds his own construction company be held civilly or even criminally liable for not holding those funds "in trust" for subcontractors? I would answer no.
Colorado's Trust Fund Statute, § 88-22-127, C.R.S.2009, is meant "to protect" against "unscrupulous contractors." In re Regan, 151 P.3d 1281, 1286-87 (Colo.2007). It requires contractors to hold certain funds "in trust for the payment of" their subcontractors, laborers, or suppliers A contractor who violates this statute by using trust funds for another purpose may be guilty of criminal theft. See § 38-22-127 (referencing § 18-4-401, C.R.S$.2009).
The statute covers "[alll funds disbursed ... [1] under any building, construction, or remodeling contract" or "[2] on any construction project." § 88-22-127(1). No one contends here that the manager's injecting capital into his own company disbursed funds under a contract covered by the first bracketed provision. Rather, the subcontractor plaintiff contends that this self-funding triggered the second provision because the manager "disbursed" funds "on a[ ] construction project." In my view, this contention distends the statute's language and disserves its purposes.
By funding his own company, the manager did not "disburse[ 1" funds "on a[ ] construction project." A "disbursement" is the "act of paying out money, commonly from a fund or in settlement of a debt or account payable." Bryan A. Garner, Black's Law Dictionary 495 (8th ed. 2004) (emphasis added). In the context of construction projects, it most naturally is construed as funds paid out by an external source for past or future work or costs. Every Colorado case heretofore decided under the Trust Fund Statute has involved that type of disbursement. E.g., Regan, 151 P.3d at 1283 (roofing company converted funds paid by developers); Syfrett v. Pullen, 209 P.3d 1167, 1169 (Colo.App.2008) (contractor converted funds paid by homeowner for remodeling); Flooring Design Assocs., Inc. v. Novick, 923 P.2d 216, 220 (Colo.App.1995) (builder converted funds paid by owners to purchase home); Alexander Co. v. Packard, 754 P.2d 780, 781-82 (Colo.App.1988) (contractor converted funds paid by another company for sewer and water line construction).
I would hold that the manager's voluntary injection of his own money into his company did not disburse funds on a construction project. Accordingly, the company was free to use that new capital without treating it as trust funds.
That the statute was never intended to reach self-funded capital is also suggested by section 38-22-127(1)'s final clause, enumerating the intended beneficiaries as persons or entities "for which such disbursement was made." Where a third party disburses funds to a contractor for construction work or costs, subcontractors are among the trust beneficiaries of those disbursed funds. This is so, regardless of what the disburser or contractor may have intended, because trust fund beneficiaries are created by law rather than by private agreement. See, e.g., Novick, 923 P.2d at 220. But a contractor's injection of its own capital into a company is not necessarily a disbursement made for the benefit of subcontractors.
I therefore respectfully disagree with the majority's holding that the manager's own capital injection created trust funds that could be used for no purpose other than paying subcontractors. Contrary to the majority, I do not believe the General Assembly ever intended for a project manager to be liable for civil conversion-and possibly even guilty of criminal theft-for expenditures of monies that he himself contributed voluntarily to his construction company.
Ultimately, any doubt as to the statute's reach should be resolved in a way that "best effectuates" its "purposes." Smith v. Executive Custom Homes, Inc., 230 P.3d 1186, 1189 (Colo.2010). Viewed narrowly, any result favoring an unpaid subcontractor could be *943deemed to further a statute designed to benefit subcontractors. But this particular subcontractor's victory will come at the expense of future homeowners, subcontractors, and laborers.
Here, had the manager not voluntarily injected his own capital into the company, the "trust funds" disbursed to the company by third parties would have been depleted. There is no dispute that the manager's funding provided the subcontractor and others with payments they otherwise would not have received. This accordingly is not a case in which a beneficiary was cheated out of trust funds by an "unserupulous contractor," Regan, 151 P.3d at 1287.
A lawyer familiar with today's holding likely would advise the manager not to recapitalize the company if there was any doubt as to the project's ultimate suceess. That would hurt, not help, the homeowners, subcontractors, and other intended beneficiaries of the Trust Fund Statute. Accordingly, I dissent.