Coquina Oil Corp. v. Larimer County Bd. of Equalization, 87SC162

• Decision Date: 13 March 1989
• Docket Number: No. 87SC162,87SC162
• Citation: 770 P.2d 1196
• Parties: COQUINA OIL CORPORATION, a Nevada corporation, Petitioner, v. The LARIMER COUNTY BOARD OF EQUALIZATION; the Board of County Commissioners of the County of Larimer, State of Colorado; Courtlyn W. Hotchkiss, Nona Thayer and James P. Lloyd, in their official capacity as members of the Larimer County Board of Equalization and the Board of County Commissioners of the County of Larimer, State of Colorado; the Board of Assessment Appeals of the State of Colorado; Henry F. Shriver, and F. William Beier, in their official capacity as members of the Board of Assessment Appeals; and Richard W. Green, Larimer County Assessor, Respondents.
• Court: Colorado Supreme Court

Page 1196

770 P.2d 1196

COQUINA OIL CORPORATION, a Nevada corporation, Petitioner, v. The LARIMER COUNTY BOARD OF EQUALIZATION; the Board of County Commissioners of the County of Larimer, State of Colorado; Courtlyn W. Hotchkiss, Nona Thayer and James P Lloyd, in their official capacity as members of the Larimer County Board of Equalization and the Board of County Commissioners of the County of Larimer, State of Colorado the Board of Assessment Appeals of the State of Colorado Henry F. Shriver, and F. William Beier, in their official capacity as members of the Board of Assessment Appeals; and Richard W. Green, Larimer County Assessor, Respondents.

No. 87SC162.

Supreme Court of Colorado En Banc.

March 13, 1989.

Rehearing Denied April 10, 1989.

Downey & Murray, P.C., Thomas E. Downey, Jr., Kate E. Knickrehm, Englewood, for petitioner.

Harden, Schmidt, Hass & Zier, P.C., George H. Hass, Fort Collins, for County respondents.

Duane Woodard, Atty. Gen., Charles B. Howe, Chief Deputy Atty. Gen., Richard H. Forman, Sol. Gen., Larry A. Williams, First Asst. Atty. Gen., Denver, for State respondents.

Sayre, Ankele & Icenogle, T. Edward Icenogle, Daniel B. Slattery, Englewood, amicus curiae for Amoco Production Co.

VOLLACK, Justice.

In Coquina Oil Corp. v. Larimer County Board of Equalization, 742 P.2d 932 (Colo.App.1987), the court of appeals held that a taxpayer who had supplied erroneous information to the county assessor which resulted in a tax overassessment of $66,423.10 could not seek abatement and refund of the overpayment under sections 39-1-113 and 39-10-114, 16B C.R.S. (1982). While we disagree with much of the reasoning of the court of appeals, we affirm its conclusion.

I.

The parties stipulated to the following facts. Coquina Oil Corporation (Coquina) is a Nevada corporation that owns oil and gas leases in Larimer County. Coquina in April 1982 filed its 1981 revenue figures for four oil leases with the county assessor as required by law for property assessment purposes. The assessor relied on these revenue figures in assessing the property and mailed Coquina a notice of assessed valuation in June 1982. Coquina paid the tax in February 1983.

In April 1983, after the protest period under section 39-5-122, 16B C.R.S. (1982), had passed, Coquina discovered that its accountants had misstated the amount of revenue generated by the oil leases in 1981, which resulted in a $66,423.10 overpayment of 1982 property taxes. Coquina immediately notified the county assessor of the error. It submitted correct revenue figures to the county assessor in August 1983 and requested a refund from the board of county commissioners (county board) pursuant to the abatement and refund provisions of sections 39-1-113 and 39-10-114.

The assessor recommended that the county board deny Coquina's request for a refund because the error was made by Coquina and because Coquina failed to protest the assessment during the protest and adjustment period specified in section 39-5-122. The county board denied Coquina's request in September 1983 for these reasons.

Coquina then appealed to the Colorado State Board of Assessment Appeals (Board). The Board affirmed the county board in March 1984 because it concluded Coquina failed to protest the assessment timely under section 39-5-122.

Coquina then sought judicial review of the Board's decision in the Larimer County District Court. The district court reversed the decision of the Board in April 1985. Rather than analyzing the applicability of sections 39-1-113 and 39-10-114, however, the district court found simply that it would be a denial of due process for the government to be able to recover an underpayment of property tax when the taxpayer erred in his favor without permitting the taxpayer to recover an overpayment when the taxpayer erred to its detriment. The district court ordered the county to refund $66,423.10 with interest.

The taxing authority appealed to the court of appeals. The court of appeals reversed the judgment of the district court in Coquina Oil Corp. v. Larimer County Board of Equalization, 742 P.2d 932 (Colo.App.1987). The court of appeals stated that a taxpayer could not seek abatement and refund under sections 39-1-113 and 39-10-114 unless the taxpayer shows that (1) the assessment is "wholly illegal or entirely erroneous and incapable of adjustment" or (2) the taxpayer "first becomes aware of the excessive charges after the statutory deadlines set forth in § 39-5-122 have expired." Id. at 933 (quoting Alpenrose Unit Week Ass'n v. Board of Assessment Appeals, 713 P.2d 932, 933 (Colo.App.1985)). It held that Coquina had not shown the assessment to be "illegal or erroneous in its entirety" as required in Simmons v. Board of County Commissioners, 146 Colo. 392, 361 P.2d 769 (1961), and Schmidt-Tiago Construction Co. v. Property Tax Administrator, 687 P.2d 528 (Colo.App.1984). The court of appeals found "unpersuasive" the argument that Coquina "first became aware of the excessive charges" after the time for protest and adjustment under section 39-5-122 had passed because the information necessary to show the tax was excessive was in Coquina's files since the spring of 1982. The court of appeals relied on E.A. Stephens & Co. v. Board of Equalization, 104 Colo. 556, 92 P.2d 732 (1939), in concluding that a taxpayer who provides erroneous information to the taxing authority cannot seek relief after the time for protest and adjustment has passed.

Two months after the court of appeals reversed the judgment of the district court, this court decided Board of Assessment Appeals v. Benbrook, 735 P.2d 860 (Colo.1987). Benbrook overruled Simmons and two other cases holding that a taxpayer may not seek relief under the abatement and refund procedure of sections 39-1-113 and 39-10-114 unless the tax is wholly illegal or erroneous. ¹ Benbrook held that a taxpayer may seek relief under sections 39-1-113 and 39-10-114 for a tax that is only partially illegal. See generally Gates Rubber Co. v. State Bd. of Equalization, 770 P.2d 1189, 1193-1194, (Colo.1989).

We granted certiorari to review Coquina Oil in light of Benbrook and to decide whether a taxpayer may obtain a refund under sections 39-1-113 and 39-10-114 after the time for protesting under section 39-5-122 has passed when the increased assessment was due to taxpayer error.

II.

A.

We begin by noting that Benbrook does not decide whether a taxpayer may recover an overpayment of taxes under sections 39-1-113 and 39-10-114(1)(a) when the taxpayer failed to protest under section 39-5-122 because of its own error which it failed to discover during the protest period described in section 39-5-122. Benbrook holds that a taxpayer may seek abatement and refund of overpaid taxes under sections 39-1-113 and 39-10-114 without exhausting administrative remedies under section 39-5-122 when another similarly situated taxpayer follows the protest procedure of section 39-5-122 and obtains a final determination that a property tax assessment is partially illegal. See Benbrook, 735 P.2d at 868; see also Gates, at 1194. As we recently observed, relief from violations of section 39-5-122 may also be obtained under sections 39-1-113 and 39-10-114

when the taxpayer does not learn of an assessment increase until the time to protest under § 39-5-122 has passed because of a clerical error on the part of the county in the notice of assessed valuation of the property, see Modular Communities, Inc. v. McKnight, 191 Colo. 101, 102, 550 P.2d 866, 867 (1976), or when the taxpayer is denied an opportunity to protest an assessment increase under § 39-5-122 because the tax was increased by the Colorado State Board of Equalization after the time for protesting the assessor's original assessment had passed, see Lamm v. Barber, 192 Colo. 511, 523-24, 565 P.2d 538, 547 (1977).

Gates, at 1195 n. 8; see also Benbrook, 735 P.2d at 865.

The circumstances that Benbrook found would justify relief under sections 39-1-113 and 39-10-114 rather than section 39-5-122 are not present in this case. No similarly situated taxpayer followed the protest procedure of section 39-5-122 and obtained a final determination that the tax Coquina paid was partially illegal, as in Benbrook. Coquina was not given an erroneous notice of valuation upon which it relied, as in Modular Communities. The tax was not a subsequent assessment, as in Lamm v. Barber. In short, Benbrook does not dispose of the issues in this case.

Although the issues in this case must be resolved by resort to cases other than Benbrook, our decision in Benbrook clearly rejects the notion that Coquina's claims under sections 39-1-113 and 39-10-114 must be denied because the tax was not "wholly illegal or entirely erroneous." To the extent that the court of appeals relied on that rationale, it was in error.

B.

The taxing authority argues that a taxpayer who supplies erroneous information which forms the basis of the overvaluation may not seek abatement and refund under sections 39-1-113 and 39-10-114. The taxing authority relies on E.A. Stephens & Co. v. Board of Equalization, 104 Colo. 556, 92 P.2d 732 (1939), for the proposition that a taxpayer may not obtain relief under the abatement and refund procedure for errors of its own making. It points out that section 39-5-122 was available to taxpayers such as Coquina to correct errors of this type but must be exercised timely so as not to impede the revenue collection and budgetary process. Coquina argues that it may seek abatement and refund under section 39-10-114(1)(a), which permits a taxpayer to demand correction of a "clerical error." Coquina argues that Stephens was implicitly overruled by Board of Commissioners v. Doherty, 114 Colo. 594, 168 P.2d 556 (1946). Coquina argues that the facts of this case are similar to the facts in Modular Communities, and argues that the purpose of section 39-10-114 of correcting "any substantial injustice resulting in ...