Board
of Assessment Appeals Case Nos. 69059, 69724.
Ryley
Carlock & Applewhite, F. Brittin Clayton III, Denver,
Colorado, for Petitioner-Appellant and Cross-Appellee.
Sheryl
Rogers, County Attorney, Kathleen L. Moore, Assistant County
Attorney, Durango, Colorado, for Respondents-Appellees and
Cross-Appellants.
Philip
J. Weiser, Attorney General, Krista Maher, Assistant Attorney
General, Denver, Colorado, for Appellee.
OPINION
CARPARELLI,
JUDGE.[*]
[¶1]
Petitioner, the Martin Trust, appeals the orders of the Board
of Assessment Appeals (BAA) partly denying its request to
reclassify a parcel of its land as residential for property
tax purposes. The Board of County Commissioners of La Plata
County and the Board of Equalization of La Plata County (the
County) cross-appeal the order. In separate opinions, the
majority affirms the
Page 1142
BAA's classification of the Trust's west parcel as
vacant land, reverses the remaining BAA orders, and remands
with directions.
I.
Factual Background and Procedural History
[¶2]
Mr. James Martin and Ms. Virginia Martin bought two adjacent
parcels of land in La Plata County, Colorado, in 2000. The
following graphic showing the relationship between the
parcels was admitted at the BAA hearing. It is oriented with
north at the top.
The
east parcel, labeled "Residential," contains the
Martins' home on a 0.62-acre lot, and the parcel labeled
"Adjacent Land Lot" (the west parcel) is an
unimproved 0.72-acre lot that adjoins the residential
parcel's western boundary. Colorado Division of Wildlife
(DOW) open land borders the parcels' north and west
sides. For tax year 2014, the Martin Family Partnership, LLLP
(the partnership) held the title to the west parcel and the
Martins held the title to the residential parcel as joint
tenants. The Partnership and the Martins thereafter
transferred title to both parcels to the Trust, which held
the titles for tax years 2015-2016.
[¶3]
The County Assessor classified the west parcel as vacant land
for tax years 2014-2016, and the Trust sought to have it
reclassified as residential. It appealed the Assessor's
decision to the Board of Equalization and Board of County
Commissioners. The Boards denied both appeals. The Trust
appealed those decisions to the BAA.
[¶4]
At a consolidated de novo hearing, the BAA upheld the
County's 2014 classification of the west parcel as vacant
land, finding that the parcels were not under common
ownership because they were separately titled and the owners
were "separate and distinct legal entities." For
the 2015-2016 classifications, the BAA partially granted the
Trust's appeal, stating it was "persuaded by [the
Trust's] claim there would be a loss of west views if a
residence [was] constructed on the [west
parcel]."[1] But it determined that only two-thirds
of the west parcel was used as a unit in conjunction with the
residential parcel for maintaining views from that parcel. On
that basis, it ordered that only the two-thirds
Page 1143
portion of the west parcel be reclassified as residential.
[¶5]
The Trust contends that the BAA erred when it concluded that
the west parcel was vacant land for the tax year 2014 and
partly vacant land for tax years 2015-2016. Conversely, the
County contends that the BAA erred when it reclassified the
west parcel as residential land for tax years 2015-2016. The
BAA argues the evidence supports its determinations.
II.
Standard of Review
[¶6]
A land classification determination for property tax purposes
is a mixed question of law and fact. Kelly v. Bd. of Cty.
Comm'rs, 2018 COA 81M, ¶10, 459 P.3d 621 (citing
Home Depot USA, Inc. v. Pueblo Cty. Bd. of
Comm'rs, 50 P.3d 916, 920 (Colo.App. 2002)). We
defer to "the BAA's classification... if it has a
reasonable basis in law and is supported by substantial
evidence in the record considered as a whole." Farny
v. Bd. of Equalization, 985 P.2d 106, 109 (Colo.App.
1999). We may affirm an agency's legal conclusion on any
grounds supported by the record. See Joseph v. Mieka
Corp., 2012 COA 84, ¶24, 282 P.3d 509; Rush Creek
Sols., Inc. v. Ute Mountain Ute Tribe, 107 P.3d 402, 406
(Colo.App. 2004).
[¶7]
When construing and applying statutes, "[o]ur primary
task is to ascertain and effectuate the intent of the General
Assembly." Moffett v. Life Care Ctrs. of Am.,
219 P.3d 1068, 1072 (Colo. 2009). When construing a statute,
we look to its plain and ordinary language to give effect to
the legislature's intent. Young v. Brighton Sch.
Dist. 27J, 2014 CO 32, ¶11, 325 P.3d 571. We consider
the statute as a whole, construing it in a manner that gives
consistent, harmonious, and sensible effect to all its parts.
Oakwood Holdings, LLC v. Mortg. Invs. Enters. LLC,
2018 CO 12, ¶12, 410 P.3d 1249. We must also "give
meaning to all portions of the statute, and avoid a
construction rendering any language meaningless."
Well Augmentation Subdistrict v. City of Aurora, 221
P.3d 399, 420 (Colo. 2009) (citing Fabec v. Beck,
922 P.2d 330, 337 (Colo. 1996)). In addition, we must not
adopt an interpretation that leads to an illogical or absurd
result. Frazier v. People, 90 P.3d 807, 811 (Colo.
2004). Last, "[w]e do not add words to a statute."
Boulder Cty. Bd. of Comm'rs v. HealthSouth
Corp., 246 P.3d 948, 951 (Colo. 2011).
III.
Constitution and Statutes
A.
Colorado Constitution
[¶8]
"The Colorado Constitution states that all taxes upon
real property shall be uniform and distinguishes agricultural
and residential property from other types of real property
for assessment purposes." Boulder Cty. Bd. of
Equalization v. M.D.C. Constr. Co., 830 P.2d 975, 978
(Colo. 1992) (citing Colo. Const. art. X, § 3(1)(a)).
[¶9]
Article X, section 3 of the Colorado Constitution establishes
guidelines for determining the actual value of
property and the valuation for assessment of
such property. Colo. Const. art. X, § 3(1)(a). It
describes "[r]esidential real property" to include
"all residential dwelling units and the land, as defined
by law, on which such units are located," and states
that for tax assessment purposes, real property is valued
based on a percentage of its actual value. Colo.
Const. art. X, § 3(1)(b). Thus, under the constitution,
"residential real property" refers to residences
and to the land on which they are located. However, the
provision states that the meaning of "land" is as
defined by law. As will be discussed later, section
39-1-102(14.4)(a), C.R.S. 2018, defines the meaning of
"land" in terms of parcels of land. What
constitutes a "parcel of land" is determined by the
legal description in the parcel's deed.
B.
Vacant Land
[¶10]
Section 39-1-103, C.R.S. 2018, addresses the valuation of
land for property tax purposes. As pertinent here, subsection
103(14)(c)(I) states:
For purposes of [section 39-1-103(14)], "vacant
land" means any lot, parcel, site, or tract of land
upon which no buildings or fixtures, other than minor
structures, are located. "Vacant land" may
include land
Page 1144
with site improvements.[2] "Vacant land" includes
land that is part of a development tract or subdivision
when using present worth discounting in the market approach
to appraisal; however, "vacant land" shall not
include any lots within such subdivision or any portion of
such development tract that improvements, other than site
improvements or minor structures, have been erected upon or
affixed thereto.
[¶11]
In plain and unequivocal words, section 39-1-103(14)(c)(I)
states that for purposes of property tax valuation
assessment, "vacant land" is any parcel or tract of
land "upon which no buildings or fixtures, other than
minor structures, are located."[3] This language is
unambiguous and must be applied in accordance with its plain
and ordinary meaning. The County Assessor did so when it
classified the west parcel as "vacant land."
C.
Residential Land
[¶12]
Section 39-1-102(14.4)(a) in pertinent part states that
"`[r]esidential land' means a parcel or contiguous
parcels of land under common ownership upon which residential
improvements are located and that is used as a unit in
conjunction with the residential improvements located
thereon."[4]
[¶13]
Thus, "residential land" is land, including single
parcels of land and contiguous parcels of land under common
ownership,
1. "upon which residential improvements are
located"; and
2. "that is used as a unit in conjunction with the
residential improvements located thereon."
Thus,
to ascertain and effectuate the General Assembly's intent
regarding the meaning of "residential land," it is
essential that we also do so with regard to the meaning of
the term "residential improvements."
D.
Residential Improvements
[¶14]
The plural term "residential improvements" is
defined in section 39-1-102(14.3). The first sentence of
subsection 102(14.3) defines "[r]esidential
improvements" as "a building, or that portion of a
building, designed for use predominantly as a place of
residency by a person, a family, or families." The
second sentence states that "residential
improvements" also includes "buildings, structures,
fixtures, fences, amenities, and water rights that are an
integral part of the residential use."
[¶15]
Thus, land "upon which residential improvements are
located" may be land upon which there is "a
building, or that portion of a building, designed for use
predominantly as a place of residency by a person, a family
or families" (a residence). It may also be land upon
which there is a "building[], structure[], fixture[],
fence[], amenit[y], [or] water right[] that [is] an integral
part of the residential use" (man-made structures or
water rights).
IV.
Issues Presented
A.
Residential Improvements
[¶16]
The County contends that while the BAA's factual findings
are supported by the record, it erred as a matter of law by
reclassifying two-thirds of the west parcel as residential
land for tax years 2015 and 2016 because the "used as a
unit" element requires
Page 1145
that each parcel of land must contain its own residential
improvement. It relies on dicta in Sullivan v. Board of
Equalization, 971 P.2d 675 (Colo.App. 1998).
B. Used
as a Unit
[¶17]
The Trust contends that the BAA misconstrued the meaning of
"used as a unit in conjunction with the residential
improvements" in subsection 102(14.4)(a) and, as a
result, erred when it decided that for tax years 2015 and
2016 one-third of the west parcel was vacant land. The Trust
argues that case law regarding "used as a unit"
involving single parcels "appl[ies] equally" to
contiguous parcels, and that those cases establish that
undeveloped land adjacent to a residence is "used as a
unit" with the residence if the land is used "in
any manner to enhance the use or enjoyment of the residence
— including merely keeping other people off of the
land," so long as the land is not used for
non-residential purposes such as commerce or agriculture. So,
according to the Trust, because the west parcel was purchased
to protect the view from the Martins' residence, and a
house located on the west parcel would change the views, the
undisputed facts standing alone are more than sufficient to
require residential classification of both parcels.
C.
Passive Use
[¶18]
The BAA now asserts that "passive uses," such as
view preservation, do not "satisfy the statutory
requirement that an adjacent parcel be used as a unit in
conjunction with a residence." In the alternative, the
BAA argues, if view preservation satisfies the "used as
a unit" requirement, then the BAA's fact
determinations were correct and we should uphold the partial
classifications.
D.
Resolution of These Issues
[¶19]
In separate opinions, the majority concludes that, as applied
to contiguous parcels of land, subsection 102(14.4)(a)
requires that
• the parcels must be used as a unit in conjunction
with the residential improvements on them; and
• using the land as a unit in conjunction with the
residential improvements on it requires active use of
residential improvements that are an integral part of the
use of the residence, and does not include merely looking
at or beyond vacant parcels.
In
addition, I conclude that as applied to contiguous parcels of
land, subsection 102(14.4)(a) requires that
• at least one of the contiguous parcels must have a
residence on it;
• there must be residential improvements on
contiguous parcels on which there are no residences;
• residential improvements on contiguous parcels
must be an integral part of the use of the residence on the
neighboring parcel; and
• the parcels must be used as a unit in conjunction
with the residential improvements on them.
V.
Analysis
[¶20]
In the following paragraphs, I ascertain and effectuate the
intent of the General Assembly by considering article 1 of
title 39 as a whole and giving consistent, harmonious, and
sensible effect to the definitions of "residential
improvements," "residential land," and
"vacant land." The analysis demonstrates that the
second sentence of subsection 102(14.3), which requires the
presence of man-made structures or water rights, has no
meaning or effect when applied to a parcel on which there is
a residence and has meaning and effect only when it is
applied to a parcel that is contiguous to such a parcel.
Based on the analysis, I conclude that, in accordance with
the second sentence of subsection 102(14.3), a parcel that is
contiguous to one on which there is a residence can be
classified as residential land only when it has a
"building[], structure[], fixture[], fence[], amenit[y],
[or] water right[]" that is "an integral part of
the residential use" of the parcel containing the
residence.
A.
"Residential Land" and "Residential
Improvements"
[¶21]
Plainly stated, the Trust contends that the General
Assembly's intention in subsection 102(14.4) was to
define "residential land"
Page 1146
to mean a parcel of land on which there is a residence and
each contiguous parcel that is under the same ownership and
is used in conjunction with the residence. If this had been
the General Assembly's intent, it could have and most
likely would have written subsection 102(14.4) using this
plain and ordinary language. However, this is not the
language of the statute. The General Assembly did not include
the word "residence" anywhere in subsection
102(14.4) or subsection 102(14.3). Instead, it used the term
"residential improvements" and provided a lengthy
definition of that term. To effectuate the General
Assembly's intention, we must give consistent and
harmonious effect to subsections 102(14.4) and 102(14.3), and
apply subsection 102(14.4) in a manner that does not render
any portion of subsection 102(14.3) meaningless.
B.
Applying Subsection 103(14)(c)(I)
[¶22]
Subsection 103(14)(c)(I) states that a parcel "upon
which no buildings or fixtures, other than minor structures,
are located" is "vacant land." It does not say
that such a parcel is "vacant land" unless it is
contiguous to a parcel on which there is a residence. Nor
does it say that such a parcel is "vacant land"
unless it is used in conjunction with a residence located on
an adjacent parcel that is under common ownership. Applying
subsection 103(14)(c)(I) in accordance with the plain and
ordinary meaning of the language used and without inserting
any words not present, the Trust's west parcel is
"vacant land."
C.
Applying Subsection 102(14.3)
1. The
Residential Parcel
[¶23]
When the first sentence of subsection 102(14.3) is included
in subsection 102(14.4)(a), it provides that
"residential land" means a parcel "upon which
[a building, or that portion of a building, designed for use
predominantly as a place of residency by a person, a family,
or families is] located and that is used as a unit in
conjunction with the [building designed for use predominantly
as a place of residency by a person, a family, or
families]."
[¶24]
Figure 1 depicts two parcels of land that are under common
ownership.
As explained above, for either of the parcels to be
classified as "residential land," at least one of
them must have upon it "a building, or [a] portion of
a building, designed for use predominantly as a place of
residency by a person, a family, or families," §
39-1-102(14.3), and the land must be "used as a unit
in conjunction with [that building]," §
39-1-102(14.4)(a).
[¶25]
In Figure 2, the left parcel has a swimming pool on it and
the right parcel is vacant.
Page 1147
Despite the presence of an amenity, the left parcel cannot
properly be classified as "residential land"
based on the portion of subsection 102(14.3) that states
that "residential improvements" includes man-made
structures and water rights because the amenity is not
"an integral part of [a] ...