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Martin Trust v. Board of County Commissioners of La Plata County

Court of Appeals of Colorado, Fourth Division

February 7, 2019

Martin Trust, Petitioner-Appellant and Cross-Appellee,
v.
Board of County Commissioners of La Plata County, Colorado; and Board of Equalization of La Plata County, Colorado, Respondents-Appellees and Cross-Appellants, and Board of Assessment Appeals, Appellee.

          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 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.

         (IMAGE OMITTED)

         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 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 (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; 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. 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. 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 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 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" 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.

         (IMAGE OMITTED)

         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.

         (IMAGE OMITTED)

         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] residential use [of the parcel]."

         ¶ 26 In Figure 3, the left parcel has a residence on it.

         (IMAGE OMITTED)

         Here, the left parcel can properly be classified as "residential land" in accordance with the first sentence of subsection 102(14.3), because there is located upon it "a building, or that portion of a building, designed for use predominantly as a ...


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