Coquina Oil Corp. v. Larimer County Board of Equalization , 13 Brief Times Rptr. 311 ( 1989 )

ERICKSON, Justice,

dissenting:

I respectfully dissent. Coquina Oil Corporation (Coquina) reported its 1982 production revenue and not its 1981 from four oil leases to the Larimer County Assessor (assessor) pursuant to section 39-7-101, 16B C.R.S. (1982). Based on the report the assessor placed a value on the leases and sent a notice of assessed valuation to Co-quina. Coquina paid the assessed tax and did not discover that an error had been made in the report to the assessor until after the time limitations for protest and adjustment set forth in section 39-5-122, 16B C.R.S. (1982), expired. As a result of a clerical error, Coquina supplied erroneous production figures to the assessor which resulted in an overpayment of $66,423.10. When Coquina discovered that it had erroneously reported its 1982 production revenue and not its 1981 production revenue, it filed a petition for abatement and refund under the provisions of section 39-10-114, 16B C.R.S. (1982).

The majority opinion accurately traces Coquina’s efforts to recover the overpayment and the subsequent denial of relief by the court of appeals. Coquina Oil Corp. v. Larimer County Bd. of Equalization, 742 P.2d 932 (Colo.App.1987). The majority, however, attributes little to Board of Assessment Appeals v. Benbrook, 735 P.2d 860 (Colo.1987), in denying relief to the taxpayer. Benbrook was decided two months after the court of appeals announced Coquina.

In my view, the remedial measures provided by the General Assembly to correct errors that occur in the determination of the proper tax are to protect not only the taxing authority but also the taxpayer. The majority holds that a taxpayer can only recover a refund under the clerical error provision of section 39-10-114(l)(a) when the error is due in part to the taxing authority, but cannot recover when the error is due solely to a clerical error by the taxpayer. At 1201. In my opinion, under the facts of this case, the taxpayer is entitled to a refund of overpaid taxes even though the error was attributable solely to the taxpayer.

It is undisputed that Coquina erroneously over paid a substantial amount by reason of a good faith mistake. As a result of the error the government reaped a windfall profit which violates the Colorado Constitution’s mandate that taxes shall be assessed in a fair and equitable manner. See Colo. Const, art. X, § 3.

The erroneous valuation was not discovered in time for correction pursuant to the protest and adjustments provisions of section 39-5-122, 16B C.R.S. (1982). The General Assembly, however, enacted two provisions that grant a remedy to the taxpayer to recover an amount erroneously paid after the time periods in section 39-5-122, have expired. See sections 39-1-113 and 39-10-114, 16B C.R.S. (1982).

Section 39-10-114 states in pertinent part:

(l)(a) If taxes have been levied erroneously or illegally, whether due to erroneous valuation for assessment, irregularity in levying, or clerical error, the treasurer shall report the amount thereof to the board of county commissioners, who shall proceed to abate such taxes in the manner provided by law. However, in no case shall an abatement or refund in taxes be made more than six years after the taxes were due.

(b) Any taxes illegally or erroneously levied and collected, and penalty interest thereon, shall be refunded pursuant to this section, together with refund interest at the same rate as that provided for penalty interest set forth in section 39-10-114. Said refund interest shall accrue only from the date payment of taxes and penalty interest thereon was received by the treasurer.

(Emphasis added.)

When the language of the statute is plain and its meaning clear, it must be applied as written. See Department of Social Serv. v. Board of County Com’rs, 697 P.2d 1 (Colo.1985); People in Interest of Paiz, 43 Colo.App. 352, 603 P.2d 976 (1979). Moreover, in construing a taxation statute, all doubts must be construed against the taxing authority and in favor of the taxpayer. Associated Dry Goods v. Arvada, 197 Colo. 491, 593 P.2d 1375 (1979); Rocky Mountain Prestress, Inc. v. Johnson, 194 Colo. 560, 574 P.2d 88 (1978); City & County of Denver v. Sweet, 138 Colo. 41, 329 P.2d 441 (1958). The plain language of section 39-10-114 clearly and unambiguously provides a refund remedy to taxpayers who. have over paid taxes due to a clerical error. The majority opinion’s limitation of relief for a clerical error to those committed at least in part by the taxing authority ignores the plain wording of the statute and unfairly deprives Coquina of the taxpayer remedies provided by the General Assembly. A clerical error should be corrected if the error causes an illegal or erroneous result in the assessment and collection of the tax that the General Assembly has specified. The statute should not be read to defeat the purpose of providing taxpayers relief from erroneous tax assessments. See People v. District Court, 713 P.2d 918 (Colo.1986); Tacorante v. People, 624 P.2d 1324 (Colo.1981).

The six-year statute of limitations contained in sections 39-1-113 and 39-10-114 was enacted in 1981 and became effective January 1, 1982. Ch. 446, sec. 2, § 39-10-114, 1981 Colo.Sess.Laws 1837, 1838. The addition of the six-year statute of limitations in section 39-10-114 reflects the General Assembly’s intent to provide a basis for taxpayer relief beyond the time permitted for protest and adjustment under section 39-5-122. See Board of Assessment Appeals v. Benbrook, 735 P.2d 860 (Colo.1987). In Benbrook, we provided for a liberal construction of section 39-10-114, stating “in plain terms [section 39-10-114] provides administrative remedies for correction of any substantial injustice resulting from ‘erroneous valuation for assessment’ of a taxpayer’s property.” Id. at 868 (quoting Lamm v. Barber, 192 Colo. 511, 526, 565 P.2d 538, 549 (1977)). In my view, section 39-10-114 also furnishes a remedy for correction of substantial injustice resulting from “clerical errors.” Both Lamm and Benbrook demonstrate that section 39-10-114 is to be applied liberally to correct good-faith errors if those errors are discovered after the procedural time limits in 39-5-122 have expired.

The amendment by the General Assembly of sections 39-1-113 and 39-10-114 to include a six-year limitative period implicitly overrules E.A. Stephens & Co. v. Board of Equalization, 104 Colo. 556, 92 P.2d 732 (1939). The six-year statute of limitations reflects that the General Assembly was not concerned that the remedy of abatement and refund would encourage litigation, impede revenue collection, and damage the budgetary process. In allowing a taxpayer a full six years to appeal an erroneous tax, the legislature refuted the holding in Stephens that belated recovery would “endanger the entire tax structure of the state and lead to a multiplicity of suits for the refund of taxes.” Stephens, 104 Colo. at 561, 92 P.2d at 734. In Board of Commissioners v. Doherty, 114 Colo. 594, 168 P.2d 556 (1946), we implicitly overruled Stephens stating:

The section of the county’s reliance, provides that, every “inhabitant... shall set down ... all real estate situate within the county by him owned or controlled on the first day of April, of the then current year, describing,” etc. Certainly, that statute is reasonable, and should be observed. But it is a far cry, we think, and most unjust, to say that because a taxpayer’s agent, proceeding in the manner and under the circumstances here, mistakenly schedules real estate that not only does not belong to his principal, but is nonassessable state lands in which he has no interest, and, while continuing in error, pays the taxes levied thereon, does not come within the “new right” which the statute invoked by the taxpayer clearly declares. “Submission of property not taxable confers no authority on the taxing officers to assess or levy a tax thereon, and being without authority so to do, the taxpayer cannot be estopped by such listing from asserting such want of authority or the illegality of taxes levied and collected thereon.”

Id. at 600, 168 P.2d at 560 (citations omitted) (emphasis added).

Although Doherty is factually distinguishable from this case, the same rationale applies. Section 39-10-114 should not be construed to prevent a taxpayer from obtaining a refund of taxes paid as a result of a good faith mistake. Here, Coquina was able to justify its error as a good faith mistake made by accountants. Coquina’s substitution of the 1981 production revenue figures for 1982 figures is “clerical error” within the meaning of section 39-10-114. I would therefore hold that Coquina is entitled to a full refund of the erroneously paid taxes.

Coquina should also be permitted to recover interest in the amount of one percent per month in accordance with section 39-10-104(3)(a), 16B C.R.S. (1982). Accordingly, I would return the case to the court of appeals with directions to remand to the district court of Larimer County to order the assessor to refund to Coquina $66,-423.10 plus 12% annual interest.

I am authorized to say that Justice LOHR and Justice KIRSHBAUM join in this dissent.