Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization

2015 UT App 288THE UTAH COURT OF APPEALS
ALLIANT TECHSYSTEMS, INC.,
Plaintiff and Appellee,
v.
SALT LAKE COUNTY BOARD OF EQUALIZATION, UTAH STATE TAX
COMMISSION, AND GRANITE SCHOOL DISTRICT,
Defendants and Appellants.
Amended Opinion 1
No. 20130532-CA
Filed November 27, 2015
Third District Court, Salt Lake Department
The Honorable L.A. Dever
No. 030917933
Simarjit S. Gill, Kelly W. Wright, and Mary Ellen
Sloan, Attorneys for Appellant Salt Lake County
Board of Equalization
Sean D. Reyes, John C. McCarrey, and Laron J. Lind,
Attorneys for Appellant Utah State Tax Commission
Robert G. Crockett and John E.S. Robson, Attorneys
for Appellant Granite School District
1. After our original opinion issued on April 23, 2015, the Salt
Lake County Board of Equalization filed a petition for rehearing.
We granted the petition and now issue this amended opinion.
See generally Utah R. App. P. 35(j) (“If a petition for rehearing is
granted, the court may make a final disposition of the cause
without reargument, or may restore it to the calendar for
reargument or resubmission, or may make such other orders as
are deemed appropriate under the circumstances of the
particular case.”). In this amended opinion, we have revised
paragraphs 11, 24, 26, and 30. Footnote 2 is new.
Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
David J. Crapo, Pamela B. Hunsaker, Steven P.
Young, and Mark K. Buchi, Attorneys for Appellee
JUDGE JOHN A. PEARCE authored this Amended Opinion, in
which JUDGES GREGORY K. ORME and J. FREDERIC VOROS JR.
concurred.
PEARCE, Judge:
¶1 The Salt Lake County Board of Equalization, the Utah
State Tax Commission, and Granite School District (collectively,
the Board) appeal from the district court’s entry of summary
judgment in favor of Alliant Techsystems, Inc. (ATK). The
district court concluded that ATK does not have exclusive
possession of the government land on which it conducts
operations and is thus exempt from Salt Lake County’s privilege
tax. See generally Alliant Techsystems, Inc. v. Salt Lake County Bd. of
Equalization, 2012 UT 4, 270 P.3d 441 (defining “exclusive
possession” for purposes of establishing a privilege tax
exemption). We affirm the district court’s entry of summary
judgment.
BACKGROUND
¶2 ATK is a for-profit aerospace and defense products corpo-
ration. ATK operates on its own property, as well as on land
owned by the United States Navy. ATK’s use of the Naval
Industrial Reserve Ordnance Plant (NIROP) lies at the heart of
this dispute. ATK uses NIROP pursuant to a facilities use
agreement between ATK and the Navy.
¶3 Because it is owned by the Navy, NIROP is exempt from
property taxes. However, subject to certain exemptions, Utah
law allows for the imposition of a privilege tax on those who use
tax-exempt property in connection with a for-profit business. See
Utah Code Ann. § 59-4-101 (LexisNexis 2000). In 2000, Salt Lake
20130532-CA 2 2015 UT App 288Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
County assessed a privilege tax on ATK’s use of the NIROP
property.
¶4 ATK challenged the privilege tax assessment, arguing that
its use of NIROP satisfied a statutory exemption to the privilege
tax because ATK did not have “exclusive possession” of the
property. See id. § 59-4-101(3)(e) (providing that a privilege tax
may not be imposed on “the use or possession of any lease, per-
mit, or easement unless the lease, permit, or easement entitles
the lessee or permittee to exclusive possession of the premises to
which the lease, permit, or easement relates”). Both the Salt Lake
County Board of Equalization and the Utah State Tax
Commission rejected ATK’s argument and upheld the
assessment.
¶5 ATK challenged those rulings in the district court, where
ATK and the Board filed competing motions for summary
judgment on the exclusive-possession issue. The undisputed
facts before the district court demonstrated that ATK had exclu-
sive possession of NIROP as against third parties but that the
Navy retained some degree of management and control over
NIROP. ATK argued that, as a matter of law, it did not have ex-
clusive possession of NIROP because the Navy retained ultimate
management and control over the facility. The Board argued that
the exclusive possession required for taxation was exclusive pos-
session as against third parties, not exclusive possession as
against the owner of the property, and that the Board was there-
fore entitled to judgment as a matter of law. The district court
agreed with the Board that ATK had exclusive possession of
NIROP despite the Navy’s retention of “traditional levels of
management and control.” The district court noted that there
was “no evidence or argument that anyone other than the Navy,
the land-owner, had any possession, use, management, or
control” of NIROP. Because the district court concluded that
ATK had exclusive possession of NIROP as a matter of law, it
granted the Board’s summary judgment motion.
20130532-CA 3 2015 UT App 288Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
¶6 ATK appealed, and the Utah Supreme Court reversed the
district court’s summary judgment order. See Alliant Techsystems,
Inc. v. Salt Lake County Bd. of Equalization, 2012 UT 4, ¶ 38, 270
P.3d 441. The supreme court analyzed section 59-4-101(3)(e) and
concluded that the Utah Legislature intended the term “exclu-
sive possession” to have its “ordinary and accepted meaning,”
id. ¶ 23, which is possession “exclusive as against all parties, in-
cluding the property owner,” id. ¶ 24. The supreme court ex-
plained,
[W]e conclude that “exclusive possession” means
having the present right to occupy and control
property akin to that of an owner or consistent
with a lessee. To qualify as exclusive possession,
the user or possessor must have this right over a
definite space for a definite time. While not an ex-
haustive list, examples of the type of control
needed for exclusive possession include (1) the
general power to admit or exclude others, includ-
ing the property owner, from any present occupa-
tion of the property and (2) the authority to make
broad use of the property, with only narrow
exceptions.
Id. ¶ 28 (citation footnotes omitted).
¶7 The supreme court concluded that the district court had
erred by evaluating ATK’s possession of NIROP in terms of
third-party access without considering whether ATK had exclu-
sive possession as against the Navy. Id. ¶ 30. The supreme court
remanded the matter to the district court for further fact finding
and reevaluation of the exclusive-possession question. See id.
¶¶ 37–38. Specifically, the supreme court identified “genuine
issues as to the following material facts: (1) whether ATK has the
authority to exclude the Navy from any present occupation of
NIROP, (2) the extent of ATK’s authority to use NIROP, and (3)
20130532-CA 4 2015 UT App 288Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
whether ATK has been granted a definite space for a definite
time.” Id. ¶ 33.
¶8 On remand, the parties conducted additional discovery.
The Board also retained an expert witness to provide testimony
on commercial leases and on the operating arrangement between
ATK and the Navy. ATK filed a motion to strike the expert’s affi-
davit and report, which the district court granted. Both parties
again filed cross-motions for summary judgment on the
exclusive-possession issue.
¶9 Applying the supreme court’s interpretation of “exclusive
possession” to the undisputed facts, the district court concluded
that ATK did not have exclusive possession of NIROP. The
district court cited a number of undisputed facts in support of
that conclusion. The district court noted that the Navy had
fenced the NIROP property and posted it with signs stating that
the property belonged to the United States government. Further,
the operating agreement between ATK and the Navy stated that
the unauthorized use of government property can subject a
person to fines, imprisonment, or both. The district court con-
cluded that these facts “conflict with the Board’s claim that the
property is under the exclusive possession of ATK.”
¶10 The district court also cited provisions in the facilities use
agreement that allowed the Navy to “terminate ATK’s right to
use NIROP at any time and for any reason.” The district court
concluded, “[T]hese provisions repudiate the Board’s claim that
the Facilities Use Contract is for a definite time, one of the
requirements for exclusive possession outlined by the Utah
Supreme Court in its decision.”
¶11 The district court noted that the Navy designated
approximately fourteen Navy personnel as its representatives to
20130532-CA 5 2015 UT App 288Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
deal with NIROP’s programmatic and technical requirements. 2
The district court found that “Navy personnel are on the NIROP
property on a daily basis and communicate daily with ATK
regarding all aspects of maintenance, operation, and usage of
NIROP.” The district court also noted that “ATK has no
authority to exclude the Navy or anyone authorized by the Navy
from NIROP.” The district court concluded, “The monitoring of
the programmatic and technical requirements of NIROP, to-
gether with the fact that ATK cannot deny the Navy access to
NIROP, can only be viewed as a form of retained right of control
that renders ATK’s possession less than exclusive.”
¶12 The district court determined that a requirement that ATK
prioritize use of the facilities for work on behalf of the Navy was
not necessarily inconsistent with exclusive possession. However,
the district court concluded that “[t]he fact that the Facilities Use
Contract requires ATK to obtain permission from the Navy to
use the facilities for purposes other than the Navy’s Fleet
Ballistic Missile System shows that the Navy has a retained right
of control which contradicts exclusive possession.”
¶13 Finally, the district court highlighted that “the Navy au-
thorizes ATK to use certain enumerated NIROP facilities, but
retains the right to change or terminate the list of facilities that
ATK may use at any time.” The district court cited a provision
incorporated into the facilities use agreement allowing the Navy
2. In its Petition for Rehearing, the Board argues that we should
not consider this fact in our analysis because the Board
challenged its accuracy before the district court. The Board did
not, however, challenge the district court’s factual findings on
appeal. Because the Board did not directly challenge the district
court’s factual findings in its appeal, we assume they are
supported by the record. See Ameritemps, Inc. v. Labor Comm’n,
2005 UT App 491, ¶ 27, 128 P.3d 31.
20130532-CA 6 2015 UT App 288Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
to terminate ATK’s “authority to use any of the facilities” at any
time. The district court concluded, “These provisions conflict
with the requirement that ATK have exclusive control over a
definite space for a definite time.”
¶14 The district court ultimately concluded,
The directive of the Utah Supreme Court applied to
these undisputed facts establishes as a matter of
law that ATK does not have possession of the
NIROP property to the exclusion of all others. The
rights retained by the Navy establish that the pos-
session of the property is shared and therefore
ATK does not have “exclusive possession” as that
term has been defined by the Utah Supreme Court.
The district court entered summary judgment for ATK and
ordered the Salt Lake County Board of Equalization to vacate its
privilege tax assessments against ATK and refund previously
collected taxes with interest.
ISSUES AND STANDARDS OF REVIEW
¶15 The Board argues that the district court erred in granting
ATK’s motion for summary judgment—and in denying the
Board’s own motion for summary judgment—on the issue of
“exclusive possession” under Utah Code section 59-4-101(3)(e).
“We review the district court’s decision to grant summary
judgment for correctness, granting no deference to the [district]
court.” Alliant Techsystems, Inc. v. Salt Lake County Bd. of
Equalization, 2012 UT 4, ¶ 17, 270 P.3d 441 (alteration in original)
(citation and internal quotation marks omitted). Further, “[a]
district court’s interpretation of a statute is a question of law,
which we also review for correctness.” Id.
20130532-CA 7 2015 UT App 288Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
¶16 The Board also argues that the district court erred in
granting ATK’s motion to strike the affidavit and report of the
Board’s expert witness. We review the district court’s decision to
exclude expert witness testimony for an abuse of discretion. See
Eskelson v. Davis Hosp. & Med. Ctr., 2010 UT 59, ¶ 5, 242 P.3d 762.
¶17 Finally, the Board argues that the district court erred by
failing to apply strict rules of statutory construction when apply-
ing the exclusive-possession test in light of the privilege tax’s
intended purpose of closing gaps in the tax laws. “This court
review[s] a trial court’s interpretation of statutory and case law
for correctness, affording no deference to the trial court’s
ruling.” Antion Fin., LC v. Christensen, 2013 UT App 60, ¶ 9, 298
P.3d 681 (alteration in original) (citation and internal quotation
marks omitted).
ANALYSIS
¶18 Utah Code section 59-4-101 generally provides that a
privilege tax may be imposed “on the possession or other benefi-
cial use enjoyed by any person of any real or personal property
which for any reason is exempt from taxation, if that property is
used in connection with a business conducted for profit.” Utah
Code Ann. § 59-4-101(1)(a) (LexisNexis 2000). The privilege tax is
assessed in “the same amount that the ad valorem property tax
would be if the possessor or user were the owner of the
property.” Id. § 59-4-101(2).
¶19 Utah Code section 59-4-101 contains multiple exemptions
identifying situations in which a privilege tax may not be as-
sessed. The exemption at issue in this case prevents the
imposition of a privilege tax on “the use or possession of any
lease, permit, or easement unless the lease, permit, or easement
entitles the lessee or permittee to exclusive possession of the
premises to which the lease, permit, or easement relates.” Id.
§ 59-4-101(3)(e) (emphasis added). The issues before us on
20130532-CA 8 2015 UT App 288Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
appeal focus on whether ATK maintains “exclusive possession”
of NIROP for purposes of qualifying for the privilege tax
exemption contained in section 59-4-101(3)(e). 3
I. Exclusive Possession
¶20 The district court originally granted summary judgment
to the Board in this case, concluding that ATK had exclusive
possession of NIROP because there was “no evidence or argu-
ment that anyone other than the Navy, the land-owner, had any
possession, use, management, or control” of NIROP. In Alliant
Techsystems, Inc. v. Salt Lake County Board of Equalization, 2012 UT
4, 270 P.3d 441, the Utah Supreme Court reversed that decision,
holding that in order for ATK to have exclusive possession of
NIROP for privilege-tax purposes, the possession needed to be
exclusive as to all others, including the Navy. On remand, the
district court applied the supreme court’s definition of exclusive
possession and granted summary judgment to ATK, concluding
that ATK did not have exclusive possession of NIROP.
¶21 The Board argues that the district court erred in conclud-
ing that ATK lacked exclusive possession of NIROP for
privilege-tax purposes. In so doing, the Board does not argue
that there are disputed facts that should have precluded sum-
mary judgment. Rather, the Board argues that the district court
erred in applying the test for exclusive possession that the Alliant
3. Early in the litigation, the district court concluded that ATK
used NIROP pursuant to a permit. See Alliant Techsystems, Inc. v.
Salt Lake County Bd. of Equalization, 2012 UT 4, ¶ 13, 270 P.3d 441.
Although it did not directly address the issue, the Utah Supreme
Court treated ATK’s use or possession of NIROP under the
permit as satisfying the “use or possession of any lease, permit,
or easement” requirement of the exception. See Utah Code Ann.
§ 59-4-101(3)(e) (LexisNexis 2000).
20130532-CA 9 2015 UT App 288Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
court articulated. The Board contends that a proper application
of the Alliant test to the undisputed facts would have resulted in
summary judgment in the Board’s favor rather than ATK’s.
¶22 We disagree. In Alliant, the Utah Supreme Court conclud-
ed that “‘exclusive possession’ means having the present right to
occupy and control property akin to that of an owner or con-
sistent with a lessee.” Id. ¶ 28. In remanding this matter to the
district court, the supreme court identified three hallmarks of
exclusive possession:
To have the same present right to occupy or control
property as an owner or lessee, an entity must have
the power to exclude the property owner from
occupying the property, the authority to make
broad use of the property (with narrow exceptions
only), and power over a definite space for a def-
inite time.
Id. ¶ 33 (emphasis added).
¶23 The supreme court held that although this was not an ex-
haustive list, each factor must be present for exclusive
possession to exist. See id. Thus, we must affirm the district
court’s summary judgment for ATK if the court correctly deter-
mined that ATK’s possession of NIROP failed to satisfy any one
of the three Alliant factors.
¶24 Alliant required the district court to assess ATK’s “author-
ity to make broad use of [NIROP], with only narrow exceptions.”
Id. ¶ 28. The district court relied on several facts to conclude that
ATK’s authority to use NIROP does not satisfy the Alliant test.
The district court noted that Navy personnel are designated to
“deal[] with [the] programmatic and technical requirements of
NIROP” and that these personnel are “on the NIROP property
on a daily basis and communicate daily with ATK regarding all
aspects of maintenance, operation, and usage of NIROP.” The
20130532-CA 10 2015 UT App 288Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
court considered the fact that “ATK has no authority to exclude
the Navy or anyone authorized by the Navy from NIROP.” 4 The
court further focused on the facilities use agreement’s
requirement that ATK “obtain permission from the Navy to use
the facilities for purposes other than the Navy’s Fleet Ballistic
Missile System,” 5 and viewed that restriction as “a retained right
of control which contradicts exclusive possession.” 6
¶25 The district court correctly concluded that these facts are
incompatible with a conclusion that ATK had the same broad
authority to use NIROP that an owner or lessee would have.
Indeed, the limitations on ATK’s authority to exclude Navy per-
sonnel and to conduct non-Navy business without receiving the
Navy’s permission are consistent with the facts presented in
Osguthorpe v. Wolf Mountain Resorts, LC, 2010 UT 29, 232 P.3d
999, a case the Alliant court analyzed. In Osguthorpe, a purported
lease agreement “limited [the lessee’s] use of the Property to a
‘commercial recreational area,’” “did not allow [the lessee] to
exclude others” from the affected property, and “specified the
4. In its brief, the Board states that it “disputes the district court’s
characterization” of this fact. However, the Board does not
explain how it disagrees with the district court’s
characterization.
5. The Board assigns weight to the fact that the Navy had denied
only one of ATK’s requests to use NIROP for non-Navy work.
For purposes of the Alliant test, the relevant point centers on
ATK’s obligation to request permission and not on the Navy’s
willingness to accede to requests.
6. Although the district court analyzed the fact in the context of
whether ATK had been granted a definite space for a definite
time, the Navy’s ability to change, at any time, which NIROP
buildings and facilities ATK could use is also inconsistent with
the ability to make broad use of the property as an owner would.
20130532-CA 11 2015 UT App 288Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
infrastructure [the lessee] could build, including ski lifts, snow-
making equipment and similar structures required for a ski
area.” Id. ¶ 27. “In short,” the Utah Supreme Court concluded,
“the language of the [purported lease] limited [the lessee] in its
use of the land, which is characteristic of a nonpossessory
interest.” Id.
¶26 We see no meaningful distinction between Osguthorpe and
the present case on the issue of possessory authority. As in
Osguthorpe, the user of the property—ATK—lacks the authority
to exclude the property owner—the Navy—from the property.
The district court found that “ATK has no authority to exclude
the Navy or anyone authorized by the Navy from NIROP,” and
the facilities use agreement allows the Navy to “terminate ATK’s
right to use NIROP at any time and for any reason.” Also as in
Osguthorpe, ATK’s use of the property is restricted to certain
enumerated purposes. ATK is required “to obtain permission
from the Navy to use the facilities for purposes other than the
Navy’s Fleet Ballistic Missile System.” Because similar
restrictions were sufficient for the Osguthorpe court to find a lack
of exclusive possession, we cannot conclude that the district
court erred in reaching the same conclusion here.
¶27 The district court correctly concluded that ATK lacked the
authority to make broad use of NIROP, with only narrow excep-
tions. See Alliant Techsystems, Inc. v. Salt Lake County Bd. of
Equalization, 2012 UT 4, ¶ 28, 270 P.3d 441; see also Osguthorpe,
2010 UT 29, ¶ 25 (“‘The uses a possessor in land may make of the
space within his possession are, in general, undefined and are
limited only by the rights of others, while the uses an owner of a
nonpossessory interest may make are definitely limited in their
scope.’” (quoting Restatement (First) of Property: Easements in-
troductory note (1944))). Without such broad authority, ATK did
not have exclusive possession of NIROP under the Alliant test,
20130532-CA 12 2015 UT App 288Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
and the district court properly granted summary judgment to
ATK on that issue. 7
¶28 Nevertheless, the Board raises two overarching argu-
ments against the district court’s conclusions. First, the Board
argues that the Navy’s retained authority over NIROP comport-
ed with the provisions of a typical modern commercial lease.
The Board reasons that ATK’s possession of NIROP therefore
satisfied Alliant’s exclusive-possession test because ATK’s rights
to NIROP were “consistent with” those of a typical lessee. See
Alliant, 2012 UT 4, ¶ 28.
¶29 The Alliant decision forecloses this argument. In Alliant,
the supreme court used the term “lessee” in its formal, black-
letter-law sense, to mean one who possesses a bundle of rights
closely approximating those of a fee owner:
[W]e conclude that “exclusive possession” must
mean the same present right to occupy and control
property that would exist for a fee simple owner of
that property. Such a present right to occupy and
control property occurs when a user or possessor
operates under a lease. Indeed, we have recognized
that a lessee has a present possessory interest in
property, with the present right to occupy and
control property akin to that of the owner.
Id. ¶ 25 (citation footnote omitted) (citing 49 Am. Jur. 2d Landlord
and Tenant § 21 (1996); Cornelius J. Moynihan & Sheldon F.
Kurtz, Moynihan’s Introduction to The Law of Real Property 87 (4th
ed. 2005)). Thus, when Alliant speaks of possessory rights “akin
to” or “consistent with” those of a lessee, it means “a present
7. Because we can affirm the district court’s exclusive-possession
ruling solely on ATK’s lack of authority over NIROP, we need
not address the other two Alliant factors.
20130532-CA 13 2015 UT App 288Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
possessory interest in property, with the present right to occupy
and control property akin to that of the owner.” Id. ¶ 25. The
relevant question, then, is whether ATK has “the same present
right to occupy and control property that would exist for a fee
simple owner of that property.” Id. The district court thus
properly compared ATK to the groups Alliant identified as
having exclusive possession—fee simple owners and lessees
with rights akin to ownership.
¶30 Second, the Board argues that ATK must be deemed to
have had exclusive possession of NIROP because there is no evi-
dence that the Navy or anybody else had exclusive possession of
the property. It may be true that ATK currently occupies NIROP
and the Navy does not. However, it is the Navy’s right to enter,
occupy, and control NIROP that is inconsistent with ATK’s ex-
clusive possession, regardless of whether the Navy chooses to
exercise that right. See id. ¶ 28 (“‘[E]xclusive possession’ means
having the present right to occupy and control property . . . .”
(emphasis added)). Thus, the Navy’s failure to occupy NIROP is
not inconsistent with the district court’s conclusion that ATK
lacked exclusive possession of NIROP. Moreover, this argument
fails to address the presence of Navy personnel tasked with
dealing with NIROP’s programmatic and technical
requirements. Nor does the Board’s argument explain the
Navy’s continued control over the activities that occur on
NIROP.
¶31 In Alliant, the Utah Supreme Court interpreted “exclusive
possession” under Utah Code section 59-4-101(3)(e) to mean
“having the present right to occupy and control property akin to
that of an owner or consistent with a lessee.” Id. ¶ 28. The district
court correctly concluded that the Navy’s continuing ability to
limit ATK’s activities on the property is incompatible with ATK
having exclusive possession of NIROP under the supreme
court’s definition. The district court therefore properly entered
summary judgment in favor of ATK.
20130532-CA 14 2015 UT App 288Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
II. The Board’s Expert Witness
¶32 The Board also argues that the district court erred in
striking the affidavit and opinions of its expert witness. The
Board’s expert is a Utah attorney with experience negotiating
and drafting commercial leases. The Board sought to offer the
expert’s opinions on the terms of typical modern commercial
leases, on whether ATK’s possession of NIROP was consistent
with those terms, and on whether ATK had exclusive possession
of NIROP pursuant to Alliant Techsystems, Inc. v. Salt Lake County
Board of Equalization, 2012 UT 4, 270 P.3d 441. The district court
granted ATK’s motion to strike the expert’s affidavit and exclude
his opinions, concluding that his commercial leasing experience
did not qualify him as an expert witness in this matter, that there
was no need for expert testimony because the facilities use
agreement was unambiguous, and that the expert’s affidavit and
opinions were inadmissible because they spoke to “the ultimate
legal issue” in the case.
¶33 The district court has wide discretion to determine the ad-
missibility of expert testimony. See De Adder v. Intermountain
Healthcare, Inc., 2013 UT App 173, ¶ 8, 308 P.3d 543. Accordingly,
we will disturb the district court’s exclusion of expert testimony
“only when it exceeds the limits of reasonability.” Id. (citation
and internal quotation marks omitted).
¶34 The district court’s exclusion of the expert’s testimony
was within the bounds of the court’s discretion. The Board
acknowledges on appeal that certain aspects of the expert’s
proposed testimony “arguably venture into the realm of legal
opinion.” Expert testimony is admissible when it will “help the
trier of fact to understand the evidence or to determine a fact in
issue.” Utah R. Evid. 702(a). For summary judgment purposes,
whether the undisputed facts surrounding ATK’s possession of
NIROP satisfied the Utah Supreme Court’s interpretation of the
“exclusive possession” requirement presents a question of law.
20130532-CA 15 2015 UT App 288Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
See Alliant, 2012 UT 4, ¶ 17. The district court properly excluded
the expert’s opinion to the extent that it addressed that legal
question. See First Sec. Bank of Utah, NA v. Banberry Crossing, 780
P.2d 1253, 1258 (Utah 1989) (affirming exclusion of expert testi-
mony on a legal question because “[q]uestions of law are to be
determined by the court”); Ashton v. Ashton, 733 P.2d 147, 153
(Utah 1987) (holding that an attorney’s expert opinion on the
effect of a joint tenant’s conveyance was inadmissible statement
of law).
¶35 The Board argues that other portions of the expert’s testi-
mony would have spoken solely to factual issues. Specifically,
the expert would have testified as to (1) the rights of possession
typically enjoyed by lessees in modern commercial leases and (2)
similarities between those rights and the rights enjoyed by ATK
under its facilities use agreement with the Navy. However, it
was within the district court’s broad discretion to determine that
this testimony would not have been helpful in resolving the
issues before it.
¶36 The Utah Supreme Court required the district court to de-
termine whether ATK has “the present right to occupy and
control [NIROP] akin to that of an owner or consistent with a
lessee.” Alliant, 2012 UT 4, ¶ 28. As discussed above, this test
contemplates comparison to one who “has a present possessory
interest in property, with the present right to occupy and control
property akin to that of the owner.” Id. ¶ 25. The supreme court
further identified three specific factual disputes for the district
court to resolve, none of which required reference to commercial
leasing standards. Under these circumstances, the district court
acted within its discretion in applying Alliant’s legal standards to
the undisputed facts before it without considering the opinions
of the Board’s expert witness. See De Adder, 2013 UT App 173,
¶ 8.
20130532-CA 16 2015 UT App 288Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
III. Public Policy and Statutory Interpretation
¶37 The Board also argues that the district court erred by fail-
ing to apply rules of strict statutory construction when applying
the exclusive-possession test. The Board reasons that the
privilege tax is intended to close gaps in the tax laws, see Great
Salt Lake Minerals & Chems. Corp. v. State Tax Comm’n, 573 P.2d
337, 339 (Utah 1977), and that tax exemptions “are strictly
construed,” Corporation of Episcopal Church in Utah v. Utah State
Tax Comm’n, 919 P.2d 556, 558 (Utah 1996). The Board appears to
argue that the district court should have applied these considera-
tions notwithstanding the Utah Supreme Court’s express
interpretation of Utah Code section 59-4-101(3)(e)’s exclusive-
possession requirement. See Alliant Techsystems, Inc. v. Salt Lake
County Bd. of Equalization, 2012 UT 4, ¶¶ 20–30, 270 P.3d 441.
¶38 The case was before the district court on remand from the
supreme court, which had interpreted the exclusive-possession
requirement in the context of this very case. See id. The district
court was not at liberty—nor are we—to disregard the supreme
court’s application of the rules of statutory interpretation to
section 59-4-101(3)(e), see id. ¶ 23 (“The application of our tools
for statutory interpretation makes clear, however, that the
legislature intended that ‘exclusive possession’ have its ordinary
and accepted meaning.”). The district court acted correctly when
it applied the supreme court’s interpretation of section 59-4-
101(3)(e)’s exclusive-possession requirement without consider-
ing the competing public policy and statutory interpretation
considerations the Board advances.
CONCLUSION
¶39 In light of the undisputed facts before it, the district court
did not err in concluding that ATK did not have exclusive
possession of NIROP, because ATK did not have “the present
right to occupy and control [NIROP] akin to that of an owner,”
20130532-CA 17 2015 UT App 288Alliant Techsystems, Inc. v. Salt Lake County Board of Equalization
Alliant, 2012 UT 4, ¶ 28, or rights consistent with a lessee “with
the present right to occupy and control [NIROP] akin to that of
the owner,” id. ¶ 25. The district court also acted within its dis-
cretion in striking the Board’s expert witness. Finally, neither
this court nor the district court may rewrite the Utah Supreme
Court’s interpretation of Utah Code section 59-4-101(3)(e) to
accommodate the Board’s statutory interpretation and public
policy arguments. We therefore affirm the district court’s entry
of summary judgment in ATK’s favor.
20130532-CA 18 2015 UT App 288