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 ...