Charles F. Overton v. Clarence Chess

The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.
SUMMARY
May 12, 2022
2022COA51
No. 20CA2091, Overton v. Chess — Taxation — Property Tax —
Redemption — Limitation of Actions for Recovery of Land —
Improvements — Expenditures — Interest
A division of the court of appeals considers from when interest
accrues for certain types of expenditures under section 39-12-101,
C.R.S. 2021. The division concludes that interest accrues from the
date each expenditure was made, except with respect to
improvements.
COLORADO COURT OF APPEALS 2022COA51
Court of Appeals No. 20CA2091
Fremont County District Court No. 17CV30126
Honorable Lynette M. Wenner, Judge
Charles F. Overton and Janet Overton,
Plaintiffs-Appellants and Cross-Appellees,
v.
Clarence Chess and James Erickson,
Defendants-Appellees and Cross-Appellants.
JUDGMENT AFFIRMED IN PART, REVERSED IN PART,
AND CASE REMANDED WITH DIRECTIONS
Division VII
Opinion by JUDGE BERGER
Brown and Johnson, JJ., concur
Announced May 12, 2022
Law Office of Dan Slater, Daniel B. Slater, Cañon City, Colorado, for Plaintiffs-
Appellants and Cross-Appellees
David C. Conley, PC, David C. Conley, Colorado Springs, Colorado, for
Defendants-Appellees and Cross-Appellants
¶1 A treasurer’s deed may be issued to a tax lien purchaser when
the owner of real property does not pay real estate taxes and does
not redeem the property from the tax sale. When the original owner
challenges the treasurer’s deed as improperly issued, section 39-12-
101, C.R.S. 2021, governs the rights of the parties. If the issuance
of the treasurer’s deed was statutorily insufficient, the original
owner must reimburse the treasurer’s deed holder for certain
expenditures plus interest. But section 39-12-101 does not specify
from when that interest accrues for certain types of expenditures.
This case requires us to decide that question.
¶2 Charles F. and Janet Overton (Overton) appeal the amount of
interest that the district court awarded on certain expenditures in
connection with an action to recover land under section 39-12-101.
Clarence Chess and James Erickson (Chess) cross-appeal the
court’s denial of a set-off for the value of an easement conveyed by
Overton while Overton held title to the property.
¶3 The first question presented is whether interest accrues from
the date each expenditure was made or only from the date that the
court ascertains the reimbursement amount. We conclude that
interest accrues from the date each expenditure was made, except
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with respect to improvements. As to the second question, we
conclude that the district court erred by finding that there was no
evidence regarding diminution in value to the property because of
the conveyance of the easement. We therefore affirm in part,
reverse in part, and remand with directions.
I. Relevant Facts and Procedural History
¶4 The county treasurer conveyed a treasurer’s deed for real
property to Overton after Chess, the original owner of the property,
failed to pay real estate taxes. Chess challenged the validity of the
treasurer’s deed because, he claimed, he had not been given the
statutorily required notice before it was issued.
¶5 After a bench trial, the district court agreed and ordered the
return of the property to Chess, subject to Chess reimbursing
certain expenditures, as required by section 39-12-101. In
determining that amount, the court rejected Chess’s request to
offset the value of a utility easement on part of the property that
Overton had conveyed to a third party.
¶6 Both parties filed post-trial motions. Overton filed a “Motion
for Imposition of Interest,” requesting that the court assess interest
“based on the date each expense was incurred.” Chess filed a
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C.R.C.P. 59(a) motion, asking the court to “reconsider its ruling to
not award any credit” for the value of the utility easement.
¶7 The court did not expressly rule on either motion. Chess’s
Rule 59 motion was denied by operation of law when the court did
not rule within the time prescribed by that rule. C.R.C.P. 59(j).
¶8 After the Rule 59(j) deadline, Chess filed a “Motion to Deposit
Funds under Rule 67,” which requested permission to deposit into
the court registry the principal amount previously determined by
the court, plus interest running from the date the court ascertained
that amount, in exchange for possession of the property.
¶9 Over Overton’s objection, the court granted Chess’s C.R.C.P.
67 motion. Chess deposited the funds in accordance with the
court’s order.
II. Jurisdiction
¶ 10 Although not raised by either party, we first address our
jurisdiction to consider this appeal because an “appellate court
must always be satisfied that it has jurisdiction to hear an appeal.”
Chavez v. Chavez, 2020 COA 70, ¶ 22.
¶ 11 This court has jurisdiction over final judgments entered by a
district court. See C.A.R. 1(a)(1); § 13-4-102(1), C.R.S. 2021. “[A]
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final judgment is ‘one that ends the particular action in which it is
entered, leaving nothing further for the court pronouncing it to do
in order to completely determine the rights of the parties involved in
the proceedings.’” Chavez, ¶ 24 (citation omitted). Prejudgment
interest is a component of damages and therefore must be
addressed by the court before the judgment is final for appeal. Id.
at ¶ 26.
¶ 12 The court’s initial order stated that “[Chess] shall make
payment to [the Overtons] to compensate them for the
improvements and expenses they incurred in the amount of
$155,517.98 together with interest thereon at the rate of twelve
percent per annum, by the person recovering said land to the
persons.”
¶ 13 But the Rule 67 order authorized Chess to deposit the
principal amount previously determined by the court together with
interest that clearly was computed from the date of the court’s
initial order. The court’s later grant of Chess’s Rule 67 motion,
therefore, necessarily held that the interest accrued only from the
ascertainment date, not the date the expenditures were made.
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¶ 14 Accordingly, the district court entered a final judgment and we
have appellate jurisdiction.
III. Analysis
A. Interest
¶ 15 Overton contends that section 39-12-101 requires
prejudgment interest and, more specifically, interest on
reimbursement amounts accruing from the date of the
expenditures. We agree as to all categories of expenditures except
improvements.
¶ 16 The parties agree, as do we, that Overton preserved this claim
for appeal. This claim presents a question of statutory
interpretation, which we review de novo. See Nieto v. Clark’s Mkt.,
Inc., 2021 CO 48, ¶ 12. When interpreting a statute, our aim is to
effectuate the legislature’s intent, and we apply unambiguous
statutes as written. Id.¶ 17 If, however, a statute is ambiguous, “meaning it is silent or
susceptible [of[ more than one reasonable interpretation,” we turn
to extrinsic aids to discern the statute’s meaning. People v. Jones,
2020 CO 45, ¶ 55. Those aids include the end to be achieved by
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the statute, the language and structure of the statute, and any
relevant legislative history. Id.; Nieto, ¶ 13.
¶ 18 “The right to interest, absent an agreement to pay it, is purely
statutory and is limited to those circumstances set forth in the
statute.” Indian Mountain Metro. Recreation & Park Dist. v. J.P.
Campbell & Assocs., 921 P.2d 65, 66 (Colo. App. 1996). Similarly,
the right to prejudgment interest is purely statutory. See id.Unless a statute authorizes prejudgment interest, a court has no
authority to award it. Id.¶ 19 Section 39-12-101 provides in relevant part that
[w]hen a recovery of any of such land is
effected in any suit, action, or proceeding, the
value of all improvements made in good faith
on such lands, and all sums paid for the tax
lien on said land and for improvements, and
all costs incident to the issuance and recording
of the treasurer’s deed, and all taxes and
assessments paid thereon after the sale of the
tax lien thereof, including the redemption
value of all tax sale certificates redeemed, held,
or surrendered for redemption by the grantee
in such treasurer’s deed or his heirs or
assigns, shall be ascertained by the court or
jury trying the action for recovery and shall be
paid, together with interest thereon at the rate
of twelve percent per annum, by the person
recovering said land to the persons entitled
thereto, and the payment of such sum shall be
a condition precedent to the entry of judgment
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or decree in such suit, action, or
proceeding. . . . The term “improvements”
includes sums and amounts of money
expended thereon in good faith by the grantee
and his successors and assigns in search of
minerals and oil, as well as other expenditures
for the improvements of such lands which add
to the cost and value thereof.
(Emphasis added.)
¶ 20 The plain language of section 39-12-101 authorizes at least
some amount of prejudgment interest on all categories of
expenditures listed in the statute because the reimbursement
amount (including interest) must be paid before a court may enter a
judgment or decree in the case.1
¶ 21 The plain language of section 39-12-101 is also clear that
interest accrues from the date of ascertainment as to the
improvements. The statute requires reimbursement of the value of
the improvements. That value, as opposed to the amount paid for
the improvements, is unliquidated and unknown until the trier of
1While several other statutes authorize prejudgment interest in
certain circumstances, Overton has not argued those statutes apply
here. See, e.g., § 5-12-102(1)(a), C.R.S. 2021; § 13-21-101(1),
C.R.S. 2021.
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fact ascertains it.2 Therefore, because we aim to give effect to every
word in a statute, interest on the improvements accrues only from
the date the trier of fact ascertains the value of the improvements.
See Nieto, ¶ 21.
¶ 22 But the statutory language does not specify an accrual date
for the remaining categories of expenditures, which include the
“sums” paid for the tax lien, the “costs” related to the treasurer’s
deed, and “all taxes and assessments paid” after issuance of the tax
lien. Unlike the “value” of improvements, those amounts are
liquidated and known even before the trier of fact ascertains them.
¶ 23 As to those remaining categories, the statutory language does
not answer the following question: Does interest accrue from the
date each expenditure was paid by the grantee of the treasurer’s
deed or from the date the court or jury ascertains the
reimbursement amount?
2 We reject Overton’s argument that the statute’s use of the word
“expenditures” in the definition of “improvements” means that
interest accrues from the date each improvement was made. The
word “value” modifies the defined term “improvements.” For the
same reason, we do not view the Colorado Supreme Court’s use of
the word “expenditures” in White v. Widger, 144 Colo. 566, 573, 358
P.2d 592, 596 (1960), as inconsistent with our reading of the
statute.
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¶ 24 Section 39-12-101 is subject to more than one reasonable
interpretation. One could reasonably conclude that interest
accrues from the date that the court or jury ascertains the
reimbursement amounts owed on categories other than
improvements. On the other hand, one might also reasonably
conclude that the interest accrues from the date each expenditure
(other than improvements) is made by the grantee of the treasurer’s
deed.
¶ 25 Because the statute is ambiguous, we turn to interpretive aids
to answer the question. For two reasons, we conclude that the
statute requires interest from the date each expenditure is made
except as to the value of improvements.
¶ 26 First, the object to be obtained by the statute supports the
reading that interest accrues from the date of these expenditures.
The Colorado Supreme Court held that the purpose of a prior
version of the statute was “protecting claimants under tax deeds.”
Wood v. McCombe, 37 Colo. 174, 182, 86 P. 319, 321 (1906), aff’d
sub nom. Elder v. Wood, 208 U.S. 226 (1908). Similarly, in Cripple
Creek Trading & Mining Co. v. Stewart, the court held that the
statute’s purpose
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was to permit no delinquent whose land has
been sold to cancel, because for some reason
void, the deed issued thereon, and thus escape
the tax. It evidently contemplates that he shall
pay because the property and its tax burden
were his and that burden has been discharged
by another; and that he shall pay interest and
penalties to discourage his failure to meet his
obligation to the state, and encourage others to
meet it in event of such failure.
100 Colo. 271, 273, 67 P.2d 1032, 1033 (1937) (emphasis added).
Assessing interest from the date each expenditure is made serves
the purpose of protecting treasurer’s deed holders like Overton.
¶ 27 Second, a closely related statute also supports this reading. A
property owner who redeems property from a tax lien purchaser
must pay interest on costs “from the date of sale.” § 39-12-103(3),
C.R.S. 2021. It would be anomalous to disallow that same interest
to a lien purchaser in the next step of the statutory process.
¶ 28 For these reasons, we conclude section 39-12-101 requires
interest on reimbursement amounts from the date of ascertainment
as to the value of improvements and from the date each of the
remaining expenditures were made. Other than the value of
improvements, the court therefore erred by awarding interest only
from the date it ascertained the amount of the expenditures.
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B. Easement
¶ 29 On cross-appeal, Chess claims that the district court erred
when it denied an offset for the value of the utility easement
conveyed by Overton. We agree.
¶ 30 This issue was adequately preserved for appeal. We review the
district court’s findings underlying its denial of relief for clear error
and will not disturb such findings unless they find no support in
the record. See Owners Ins. Co. v. Dakota Station II Condo. Ass’n,
2021 COA 114, ¶ 50.
¶ 31 “An easement is a right conferred by grant, prescription or
necessity authorizing one to do or maintain something on the land
of another ‘which, although a benefit to the land of the former, may
be a burden on the land of the latter.’” Lazy Dog Ranch v. Telluray
Ranch Corp., 965 P.2d 1229, 1234 (Colo. 1998) (citation omitted).
¶ 32 The court’s initial order stated,
No credit is awarded against the total amount
for the funds received from the Black Hills
Easement since [the Overtons] were the known
legal owners of the property at the time they
entered into the agreement. No evidence was
presented showing there was a negative impact
on the value of the property as a result of this
separate agreement between Black Hills and
[the Overtons].
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¶ 33 The record, however, contained the offer letter from the utility
for the easement and the easement deed itself. The offer letter
stated that the utility would “pay the fair market value for the land
rights to be acquired and has retained the services of an
independent appraiser, to provide salient comparable sales data
that serves as the basis for determining the fair market value for
the land rights to be acquired.” The easement deed stated it
granted the right to “enter upon the lands” and that it “shall run
with the land.”
¶ 34 The offer letter and related easement deed supplied at least
some evidence of the value of the easement and, thus, some
evidence of diminution in value of the entire parcel. The court’s
conclusion that there was no evidence regarding the property value
was therefore clearly erroneous.
¶ 35 Janet Overton, an owner of the property at the time of trial,
testified that there already was an electric line on the property and
that she did not believe the easement reduced the property value.
Because there was some evidence on both sides of this disputed
question, the district court was required to resolve the disputed
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facts. We must remand for additional findings and conclusions
because the court did not do so.
IV. Disposition
¶ 36 The court’s judgment requiring Chess to pay interest on the
value of the improvements from the date the court ascertained the
reimbursement amount is affirmed. The court’s judgment requiring
Chess to pay interest on all other categories of expenditures from
the date the court ascertained the reimbursement amount is
reversed. That part of the judgment that denied an offset for the
value of the conveyed easement is also reversed.
¶ 37 The case is remanded for two purposes. First, the district
court must ascertain the amount of interest accruing from the date
expenditures other than improvements were made. Second, the
court must make findings and conclusions on the value, if any, of
the easement and enter judgment accordingly.
JUDGE BROWN and JUDGE JOHNSON concur.
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