Traer Creek-EXWMT LLC v. Eagle County Board of Equalization , 2017 Colo. App. LEXIS 125 ( 2017 )

COLORADO COURT OF APPEALS 2017COA16
Court of Appeals No. 16CA0723
Eagle County District Court No. 15CV30255
Honorable Russell H. Granger, Judge
Traer Creek-EXWMT LLC, a Colorado limited liability company,
Plaintiff-Appellant,
v.
Eagle County Board of Equalization,
Defendant-Appellee.
JUDGMENT AFFIRMED
Division II
Opinion by JUDGE J. JONES
Dailey and Berger, JJ., concur
Announced February 9, 2017
Otten, Johnson, Robinson, Neff & Ragonetti, P.C., Dimitri Adloff, David P.
Hutchinson, Denver, Colorado, for Plaintiff-Appellant
Bryan Treu, County Attorney, Christina Hooper, Assistant County Attorney,
Eagle, Colorado, for Defendant-Appellee
¶1 Plaintiff, Traer Creek-EXWMT LLC (Traer), appeals the district
court’s judgment dismissing its claims against defendant, Eagle
County Board of Equalization (the Board), for lack of standing.
Because we conclude that a mere lessee of property (such as Traer)
does not have standing to challenge a property tax valuation of
property that includes the leased property, we affirm.
I. Background
¶2 This appeal concerns the property tax valuation of Chapel
Square Subdivision Tract B-1 (Tract B) for the tax year 2015. Tract
B is a parcel of land that has a commercial retail building on it.
Tract B has been subject to a lease since 1987, and since 2002
Traer has been the lessee.1 Under a “Declaration of Easements,”
Traer is contractually obligated to pay the property taxes “directly to
the appropriate taxing authorities.” But since assuming the lease,
Traer has not paid the property taxes directly to the taxing
authority; the owner has made those payments and Traer has
reimbursed the owner.
1The parties appear to dispute whether the lease covers all of Tract
B, but we do not need to resolve that dispute.
1
¶3 On May 1, 2015, the Eagle County Assessor mailed the owner
a notice of valuation regarding Tract B. Traer (but not the owner)
initiated the statutory protest and adjustment process to challenge
the 2015 valuation of Tract B. The assessor issued a notice of
determination declining to adjust the valuation.
¶4 Traer appealed the notice of determination to the Board. The
Board upheld the valuation.
¶5 Undaunted, Traer appealed the Board’s decision to district
court pursuant to section 39-8-108, C.R.S. 2016.2
¶6 The Board moved to dismiss under C.R.C.P. 12(b)(1) on the
theory that a mere lessee does not have standing to challenge a
property tax valuation of the sort issued by the assessor. The
district court agreed and dismissed the case.
II. Discussion
¶7 Traer contends that the district court erred in ruling that it
does not have statutory or common law standing, and that factual
2 Traer joined CSB Properties Holdings LLC, one of the owners, as a
defendant because CSB declined to join as a plaintiff. CSB did not
file an answer or other pleadings, and the district court entered a
“clerk’s default” against CSB.
2
determinations underlying the court’s ruling are incorrect. We
address and reject each contention in turn.
A. Statutory Standing
1. Standard of Review and Applicable Law
¶8 We review questions of standing and statutory interpretation
de novo. 1405 Hotel, LLC v. Colo. Econ. Dev. Comm’n, 2015 COA
127, ¶ 36; Krol v. CF & I Steel, 2013 COA 32, ¶ 15 n.2.
¶9 Our primary goals in interpreting a statute are to discern and
give effect to the General Assembly’s intent. Krol, ¶ 15.
We look first to the statutory language, giving
the words and phrases used therein their plain
and ordinary meanings. We read the language
in the dual contexts of the statute as a whole
and the comprehensive statutory scheme,
giving consistent, harmonious, and sensible
effect to all of the statute’s language.
Id. (citation omitted).
2. Analysis
¶ 10 Traer argues that because it “owns” an interest in property —
albeit a leasehold interest — it has standing under the statutory
scheme to object to and protest a valuation. To show why Traer is
wrong, we walk through the objection and protest process laid out
by the applicable statutes, beginning with the notice of valuation.
3
¶ 11 Section 39-5-121(1)(a)(I), C.R.S. 2016, provides that “the
assessor shall mail to each person who owns land or improvements
a notice setting forth the valuation of such land or improvements.”
When the valuation in question concerns the fee interest in real
property, the statutory phrase “owns land” is most naturally
understood as referring to a fee owner, not someone with a mere
leasehold interest in property. Thus, only the fee owner of real
property need be notified of a tax valuation of that owner’s real
property.
¶ 12 This understanding of owner in this context is confirmed by
section 39-5-102(1), C.R.S. 2016, which says that “[o]wnership of
real property shall be ascertained by the assessor from the records
of the county clerk and recorder.” Such records typically identify
fee owners, but not necessarily lessees.3 And this understanding
also makes sense in light of the fact that only fee owners of real
property are liable to the taxing authority for taxes assessed
pursuant to a valuation of real property. See Cantina Grill, JV v.
3 Traer notes that the Declaration of Easements describing the
lessee’s tax obligation was recorded in the county land records.
However, this document was not recorded to demonstrate
ownership, and Traer is not mentioned in the document.
4
City & Cty. of Denver Cty. Bd. of Equalization, 2015 CO 15, ¶ 20
(even if there are taxable interests in property that are less than fee
ownership, the property is taxed to the fee owner).
¶ 13 Section 39-5-122(1)(a), C.R.S. 2016, outlines the “[t]axpayer’s
remedies to correct errors” after valuation. It reads in relevant part
that
after notices of adjusted valuation are mailed
to taxpayers, the assessor will sit to hear all
objections and protests concerning valuations
of taxable real property determined by the
assessor for the current year; [and] that, for a
taxpayer’s objection and protest to be heard,
notice must be given to the assessor.
The reference to “notices . . . mailed to taxpayers” clearly refers to
the notices mailed pursuant to section 39-5-121(1)(a)(I). Since
those notices are, with respect to real property, mailed to owners,
and “owners” in this context means fee owners, “taxpayers” as used
in section 39-5-122(1)(a) means those fee owners to whom the
assessor sent notices.
¶ 14 Under subsection (2) of section 39-5-122, “[i]f any person is of
the opinion that his or her property has been valued too high, . . .
he or she may appear before the assessor and object.” Considered
in conjunction with subsection (1), a “person” referred to in
5
subsection (2) is a “taxpayer.” And as discussed, a taxpayer to
whom a notice of valuation of real property has been sent is a fee
owner. At least this is so when the valuation is of the fee interest in
the land, as it was in this case, for the objection may be made only
as to the “property” that “has been valued.” An assessor values real
property as a whole, regardless of any leasehold interests in the
property, and the fee owner is responsible for paying the tax.
Cantina Grill, ¶ 20.
¶ 15 Thus far, therefore, this much is clear: the fee owner is the
only party given statutory standing to object to and protest the
assessor’s valuation of real property in fee. And once the assessor
decides such an objection and protest, the statutes governing
further review of that decision make clear that they do not expand
the class of persons with standing.
¶ 16 Under section 39-8-106, C.R.S. 2016, the county board of
equalization must “hear petitions from any person whose objections
or protests have been refused or denied by the assessor.” The
“person” referred to in this section is plainly the “person” who had
standing to first object to and protest the valuation with the
assessor under section 39-5-122. If “the petitioner’s” petition is
6
denied by the board, section 39-8-108 allows “the petitioner” to
appeal that denial. The “petitioner” is the “person” who filed the
petition under section 39-8-106; that “person” is the “taxpayer” who
objected under section 39-5-122; and that “taxpayer” is, in turn,
the owner who received the notice of valuation pursuant to section
39-5-121. See Tenney v. Bd. of Assessment Appeals, 856 P.2d 89,
91 (Colo. App. 1993) (“[T]he term ‘petitioner,’ as used in these
statutes, has been interpreted as meaning the taxpayer for the
property.”).
¶ 17 In sum, the relevant statutes expressly limit the right of review
in this context to a property owner to whom a notice of valuation is
sent as required by statute. “[W]hen a statute creates a cause of
action and designates those who may sue under it, none except
those designated may sue,” and “we are without authority to
expand [that class].” Berry Props. v. City of Commerce City, 667
P.2d 247, 249 (Colo. App. 1983); see Tenney, 856 P.2d at 90 (“If a
statute designates those who may bring an action, only those
parties so designated have standing to do so.”).
¶ 18 We are not persuaded to the contrary by Traer’s argument that
because section 39-1-102(16), C.R.S. 2016, defines “taxable
7
property” as including “all property, real or personal, not expressly
exempted from taxation by law,” and since section 39-1-102(14)
defines “real property” as including “all . . . interests in lands,” it
may challenge any assessment relating to the underlying property
under section 39-5-122. Even if Traer is a “person” as that term is
defined in section 39-1-102(9), it is not a person whose “property
has been valued too high.” § 39-5-122(2). The assessor did not
separately value Traer’s alleged “property” — its leasehold interest;
the assessor valued the fee ownership interest in the property.
Traer does not have such an interest.
¶ 19 Traer’s reliance on cases addressing abatement and refund
proceedings4 is equally misplaced. Traer is not seeking a tax
abatement and refund — a process that occurs after the property
tax is paid. Rather, Traer seeks to protest and adjust the property
valuation, which is a procedure that occurs before the tax is paid.
4 See Hughey v. Jefferson Cty. Bd. of Comm’rs, 921 P.2d 76, 79
(Colo. App. 1996) (purchaser of a tax lien did not have standing to
petition for abatement); Wyler/Pebble Creek Ranch v. Colo. Bd. of
Assessment Appeals, 883 P.2d 597 (Colo. App. 1994) (taxpayer
sought abatement); Telluride Reg’l Airport Auth. v. Bd. of
Equalization, 789 P.2d 201 (Colo. App. 1989) (lessee had standing
to petition for abatement under § 39-9-108); Gunnison Cty. v. Bd. of
Assessment Appeals, 693 P.2d 400 (Colo. App. 1984) (county
sought property tax abatement).
8
These two procedures are not identical as “[t]he protest and
adjustment procedures and the abatement and refund procedures
are separate and independent administrative procedures for the
adjudication of property tax disputes which are governed by
different statutes.” Wyler/Pebble Creek Ranch v. Colo. Bd. of
Assessment Appeals, 883 P.2d 597, 599 (Colo. App. 1994); see
Huerfano Cty. Bd. of Cty. Comm’rs v. Atl. Richfield Co., 976 P.2d
893, 896 (Colo. App. 1999) (same).
¶ 20 Therefore, based on the plain language in the statutes
governing valuation protest and adjustment, we conclude that the
district court did not err in ruling that Traer lacks standing to
challenge the valuation of Tract B.
B. Common Law Standing
¶ 21 Traer contends that it has standing under common law
principles because it pays the taxes on Tract B, and because the
land owner granted it agency authority to challenge the valuation.
¶ 22 Traer’s contention falters at the outset because when a statute
limits standing to bring a particular kind of action, a court may not
effectively disregard that limitation by employing notions of
common law standing. Tenney, 856 P.2d at 90; Berry Props., 667
9
P.2d at 249. As discussed, the relevant statutes deny Traer
standing.5
C. Factual Findings
¶ 23 Traer contends that the district court improperly adopted the
Board’s factual assertions regarding the amount of space Traer
leases and the amount of tax liability for which Traer is directly
responsible under the Declaration of Easements. But the amount
of leased space and Traer’s liability to the owner are irrelevant to
the question of standing under the governing statutes. So any error
as to those facts is harmless. See C.R.C.P. 61.
III. Conclusion
¶ 24 The judgment is affirmed.
JUDGE DAILEY and JUDGE BERGER concur.
5 We also observe that the letter allegedly granting Traer agency
authority is not typed on letterhead, and it is unclear who signed
the letter as the signature is illegible and there is no printed
signature. Further, the property was owned by two separate
entities during tax year 2015, and Traer has never claimed to have
permission from CSB to appeal the valuation. In fact, CSB has
been unresponsive through the valuation appeal process. Traer
joined CSB as a co-defendant in this case. We will not interpret
CSB’s unresponsiveness as granting Traer authority to act as its
agent.
10