Dove Valley Business Park Associates, Ltd. v. Board of County Com'rs of Arapahoe County

• Decision Date: 21 December 1995
• Docket Number: No. 94CA1883,94CA1883
• Citation: 923 P.2d 242
• Parties: DOVE VALLEY BUSINESS PARK ASSOCIATES, LTD., a Colorado limited partnership; Abacus Group Realty Holding Company II, a Delaware corporation, as successor by merger to Diversified Land Holdings, Inc., a Delaware corporation; Havana Street, Ltd., a Colorado limited partnership and Gullwing Acres Limited Liability Co., a Wyoming limited liability company; and Colorado National Bank, a federally charted bank, as successor by merger to Bank Western, a federal bank, Plaintiffs-Appellants, v. The BOARD OF COUNTY COMMISSIONERS OF ARAPAHOE COUNTY, Colorado; and Dorothy J. Vogt, Treasurer, Arapahoe County, Colorado, Defendants-Appellees. . IV
• Court: Colorado Court of Appeals

Page 242

923 P.2d 242

DOVE VALLEY BUSINESS PARK ASSOCIATES, LTD., a Colorado limited partnership; Abacus Group Realty Holding Company II, a Delaware corporation, as successor by merger to Diversified Land Holdings, Inc., a Delaware corporation Havana Street, Ltd., a Colorado limited partnership and Gullwing Acres Limited Liability Co., a Wyoming limited liability company; and Colorado National Bank, a federally charted bank, as successor by merger to Bank Western, a federal bank, Plaintiffs-Appellants, v. The BOARD OF COUNTY COMMISSIONERS OF ARAPAHOE COUNTY Colorado; and Dorothy J. Vogt, Treasurer Arapahoe County, Colorado, Defendants-Appellees.

No. 94CA1883.

Colorado Court of Appeals Div. IV.

Dec. 21, 1995.

Rehearing Denied Jan. 25, 1996.

Certiorari Granted Sept. 23, 1996.

Law Offices of Bennett S. Aisenberg, P.C., Bennett S. Aisenberg, H. Paul Himes, Jr., Barry J. Goldstein, Denver, for Plaintiffs-Appellants.

John E. Bush, Jr., Acting County Attorney, Richard F. Mutzebaugh, Assistant County Attorney, Littleton, for Defendants-Appellees.

Opinion by Judge DAVIDSON.

Plaintiffs, Dove Valley Business Park Associates, Ltd.; Abacus Group Realty Holding Company II; Havana Street, Ltd. and Gullwing Acres Limited Liability Co.; and Colorado National Bank, appeal from a declaratory judgment entered by the trial court dismissing plaintiffs' statutory, constitutional, and equitable claims for interest due from defendants, the Board of County Commissioners of Arapahoe County and the treasurer of Arapahoe County (county), on erroneously assessed property taxes. We affirm in part and reverse in part.

Plaintiffs, owners of commercial real estate in Arapahoe County, failed to pay in a timely manner assessed 1988, 1989, and/or 1990 property taxes. As a result, under the provision currently codified at § 39-10-104.5, C.R.S. (1994 Repl.Vol. 16B), taxes became delinquent and penalty interest accrued at a rate of 12 percent per year, beginning May 1 of the year following the assessment.

In November of the year taxes became delinquent, the county sold tax liens on the properties at sales pursuant to § 39-11-101 et seq., C.R.S. (1994 Repl.Vol. 16B). Some of the tax liens were purchased by third parties, others were stricken off to the county when no other purchaser came forward. On the date of the tax sale, penalty interest ceased to accrue to the county, but redemption interest, at a rate of 15-16 percent, began to accrue to the holder of the tax lien certificate See §§ 39-11-115 and 39-12-103, C.R.S. (1994 Repl.Vol. 16B).

Plaintiffs redeemed--by paying the amount of taxes, penalty interest, sale costs, and redemption interest--at least two of the properties soon after the tax lien sales. See § 39-12-101, et seq., C.R.S. (1994 Repl.Vol. 16B).

Three of the plaintiffs waited several months after the tax lien sales to petition for abatement or refund of the taxes pursuant to Colo. Sess. Laws 1990, ch. 282, § 39-10-114 at 1719. Havana Street, Ltd., pursued the alternative protest and adjustment procedure, pursuant to Colo. Sess. Laws 1989, ch. 324, §§ 39-5-122 and 39-8-109. It is unclear from the record whether this plaintiff filed the protest before or after the tax lien sale.

Both protest and abatement procedures ultimately resulted in substantial reduction of the property taxes. For those properties not already redeemed, the county required the taxpayers to redeem the properties before the abatement/adjustment amount was used to reduce the tax due under either procedure. Some of the properties may not have been redeemed.

The county agreed that it was obligated to refund erroneously levied taxes, but refused to pay any refund interest or to reimburse plaintiffs for penalty interest or redemption interest paid by plaintiffs on the erroneously levied taxes. The trial court agreed with the county, and this appeal followed. We hold that the county is obligated to reimburse plaintiffs for penalty interest paid on the erroneously levied taxes. We further hold that the county must pay refund interest only from the date of payment of taxes by the taxpayer. Finally, we hold that the county is not required to refund or credit redemption interest.

I.

A.

Penalty Interest

Penalty interest is interest paid by the taxpayer to the county because of delinquency in payment of the taxes. When, as here, taxes are to be paid in a single installment, penalty interest accrues at a rate of one percent per month from May 1 of the year taxes are due until either the taxes are paid, or until the tax lien is sold. See § 39-10-104.5. We agree with plaintiffs that the county must reimburse them for any penalty interest plaintiffs have paid on the erroneously levied taxes.

Colo. Sess. Laws 1990, ch. 282, § 39-10-114(1)(b) at 1719, by its plain language, requires that "[a]ny taxes illegally or erroneously levied and collected, and penalty interest thereon, shall be refunded." See also § 39-8-109 ("he shall forthwith receive the appropriate refund of taxes and penalty interest ") (emphasis added).

Here, at the time that plaintiffs redeemed the property, the county collected from plaintiffs the levied taxes, with a setoff for the amount erroneously levied, together with penalty interest on the entire amount. Consequently, to the extent that plaintiffs have redeemed their properties, the county must reimburse plaintiffs for penalty interest paid on the erroneously levied taxes.

B.

Refund Interest

Refund interest is interest paid to the taxpayer by the county to compensate the taxpayer for having paid erroneously levied taxes. Refund interest, calculated on both the erroneously levied and collected taxes and any penalty interest thereon, accrues to the taxpayer at one percent per month, from the date that the payment of taxes and penalty interest is received by the treasurer. See §§ 39-10-114(1)(b) and 39-8-109.

At issue is the statutory interpretation of "payment of taxes," which initiates accrual of refund interest. Plaintiffs argue that a lien sale can constitute "payment of taxes" and that, therefore, the statute requires the county here to calculate refund interest from the date that a third party purchased the tax lien or the tax lien reverted to the county.

The county asserts that, to the contrary, under these statutory provisions, refund interest does not accrue until the taxpayer (or appellant, pursuant to § 39-8-109) pays the tax. Here, the county argues, that did not occur until plaintiffs redeemed their property from the tax lien sale. Further, it asserts that the statutes require the county to pay refund interest on the erroneously paid amount only from the date payment is received by the treasurer. Hence, since the reduction in valuation occurred the same day as payment, the county calculates that no refund interest accrued. We agree with the county.

The operative language of the pertinent statutes--which the parties agree applied to the tax years at issue--is illustrated in § 39-10-114(1)(b), which required that:

Any taxes illegally or erroneously levied and collected, and penalty interest thereon, shall be refunded pursuant to this section, together with refund interest at the same rate as that provided for penalty interest [1% per month]. Said refund interest shall accrue only from the date payment of taxes and penalty interest thereon was received by the treasurer. (emphasis added)

See also § 39-8-109.

The goal of statutory construction is to ascertain and give effect to the intent of the General Assembly. To do so, courts look first to the statutory language. But, if the scope of the language is unclear or lends itself to alternative construction, the court may apply other rules of statutory construction and look to legislative history. People v. Terry, 791 P.2d 374 (Colo.1990).

Additionally, deference should be given to the interpretation of the statute by the officers charged with its administration, Commercial Federal Savings & Loan Ass'n v. Douglas County Board of Equalization, 867 P.2d 17 (Colo.App.1993), but tax statutes should "not be extended beyond the clear import of the language used, [and] [a]ll doubts will be construed against the government and in favor of the taxpayer." Transponder Corp. v. Property Tax Administrator, 681 P.2d 499, 504 (Colo.1984).

As between the owner/taxpayer and a third party who is not the taxpayer's agent or a person who has an interest in the property, the applicable versions of the statutes do not state explicitly from whom the taxes must be received to trigger accrual of refund interest. However, applying these interpretive rules of statutory construction to the refund provisions, we agree with the county that, although a tax lien sale or some other event might function to "pay the taxes" in a different context, payment of taxes by the taxpayer is prerequisite to accrual of refund interest.

It is first appropriate to look at the context in which statutory terms appear. See State v. Hartsough, 790 P.2d 836 (Colo.1990) Thus, it is important that § 39-10-114(1)(b) is a "refund" provision. The statute authorizes "refund," not simply "payment" by the county. See §§ 39-10-114 and 39-8-109. By definition, a "refund" is remitted to the party who already has paid. Black's Law Dictionary 1152 (Rev. 5th ed.1979) ("refunds" are "money received by the government ... to be refunded or restored to the parties paying them " (emphasis added)).

In § 39-10-114(1)(b), accrual of refund interest is tied to the date of payment, and disbursement is conditioned on the erroneous taxes being "collected." Reading the entire section in concert, we conclude the object of the operative words "collected [from]," "payment [from]," and "refund [to]" must be the same, and the owner/taxpayer is the only possible entity.

Furthermore, § 39-10-114(1)(b) must be read and considered in the proper context of the full statute. See Allen v. Charnes, 674 P.2d 378 (Colo.1984).

In this light, an interpretation that...