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LLC v. Gunnison County Board of County Commissioners

Court of Appeals of Colorado, Third Division

November 5, 2015

Prospect 34, LLC and Prospect Development Company, Inc., Petitioners-Appellants,
Gunnison County Board of County Commissioners, Respondent-Appellee, and Board of Assessment Appeals, Appellee, and Reserve Metropolitan District No. 2, a political subdivision of the State of Colorado, Intervenor

Board of Assessment Appeals Nos. 63109 & 63110.

Seter & Vander Wall P.C., Kim J. Seter, Elizabeth A. Dauer, Greenwood Village, Colorado; Diamond McCarthy LLP, Michael J. Yoder, Dallas, Texas, for Petitioners-Appellants.

David Baumgarten, County Attorney, Gunnison, Colorado, for Respondent-Appellee.

Bailey & Peterson, P.C., James S. Bailey, Jr., Randall M. Livingston, Denver, Colorado, for Intervenors.

Fox and Kapelke[*], JJ., concur.


Page 820


[¶1] Just what does " shall not exceed" mean in the mill levy provision of Reserve Metropolitan District No. 2's (RMD2) service plan? According to Prospect Development Company, Inc., and Prospect 34, LLC (together, Prospect), this phrase means what it says -- the maximum mill levy that RMD2 can assess on Prospect's real property.[1] Not surprisingly, when RMD2 taxed Prospect at a higher rate, Prospect petitioned the Gunnison County Board of County Commissioners (BOCC) to abate the excess taxes. After the BOCC denied the petition, Prospect appealed to the Board of Assessment Appeals (BAA).

[¶2] Instead of reaching the merits of this issue, the BAA resolved it against Prospect on the basis of the court's order denying a summary judgment motion on this issue in a parallel district court action involving RMD2 and Prospect, among other parties. Because this order is not a final determination of the issue, we conclude that the BAA abused its discretion. Turning to the merits, we address a novel question of statutory interpretation and further conclude that under the Special District Act, the excess mill levy is illegal. For these reasons, we reverse and remand for the BAA to order the BOCC to grant the petition and abate the excess taxes.

I. Background

[¶3] RMD2 is a special district located entirely within the town of Mt. Crested Butte (Town) in Gunnison County. RMD2's service plan -- a document statutorily required to organize a special district -- states that RMD2's mill levy " shall not exceed 50 mills, subject to Gallagher Adjustments," and that any levy beyond 50 mills requires Town approval. The Town adopted the service plan in 2000. The Gunnison County District Court organized RMD2 in 2001.

[¶4] By 2013, the mill levy totaled 52.676 mills, including the Gallagher Adjustment of 2.676 mills. Then the RMD2 board approved certifying to the BOCC 55.676 mills, 3.000 mills in excess of the cap in the 2000 service plan. Although the maximum mill levy provision in the service plan had never been increased, the BOCC levied 55.676 mills on December 21, 2012.

[¶5] The Town council protested the mill levy increase, noting that it " does not consent to any increase above 50 mills 'gallagherized' in the mill levy . . . ." Reserve Metropolitan District No. 1[2] (RMD1), the Town, and the

Page 821

Town council sued in Gunnison County Court to enjoin the excess mill levy and for a declaratory judgment that the excess mill levy was void. The court denied the council's motion for summary judgment on this issue. That action remains pending.

[¶6] The BAA did not independently examine the legality of the excess mill levy. Rather, the BAA order stated, in pertinent part:

Judge Patrick determined that the 3.000 mills were levied legally, notwithstanding the mill levy cap in the Service Plan. The Board declines to re-analyze Judge Patrick's determination. As the tax has been determined to be legal, Petitioners are not entitled to an abatement/refund of taxes.

Then the order relied solely on the denial of summary judgment to conclude that " the 3.000 mills were levied legally."

II. Preservation and Standard of Review

[¶7] The parties do not dispute preservation of the issues on appeal. An appellate court may set aside a BAA order only if the BAA abused its discretion or if the order was arbitrary and capricious, based on clearly erroneous facts, unsupported by substantial evidence, or otherwise contrary to law. Boulder Cty. Bd. of Comm'rs v. HealthSouth Corp., 246 P.3d 948, 951 (Colo. 2011). But appellate review of statutory interpretation is ...

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