Mdc Holdings, Inc. v. Town of Parker
| Decision Date | 08 February 2010 |
| Docket Number | No. 08SC972.,08SC972. |
| Citation | 223 P.3d 710 |
| Parties | MDC HOLDINGS, INC., a Delaware corporation and Richmond American Homes of Colorado, Inc., a Delaware corporation, Petitioners v. TOWN OF PARKER, a Colorado home rule municipal corporation and Town of Castle Rock, a Colorado home rule municipal corporation, Respondents. |
| Court | Colorado Supreme Court |
We granted certiorari in Town of Parker v. MDC Holdings, Inc., No. 07CA1758, 2008 WL 4598270 (Colo.App. Oct.16, 2008) to review an unpublished court of appeals' decision enjoining the Executive Director of the Colorado Department of Revenue from hearing two tax appeals.1 Petitioners MDC Holdings, Inc. and Richmond American Homes of Colorado, Inc. (collectively "MDC") sought a refund for allegedly overpaid use taxes on building materials in connection with its residential construction activities in the Towns of Castle Rock and Parker (collectively "Towns"), both of which are home rule municipalities.
The Finance Directors of both Towns denied MDC's refund requests, and MDC initiated the appeal process pursuant to the Towns' municipal codes and section 29-2-106.1, C.R.S. (2009), which provides a uniform statewide process governing municipal sales and use tax appeals. MDC requested and obtained a consolidated informal hearing by the Towns on its refund requests.
After the informal hearing, the law firm representing both Towns advised MDC in writing that the Towns' appeal process included provisions requiring a formal on the record hearing following the informal hearing. The law firm representing MDC in both appeals responded by letter that MDC would not be requesting a formal hearing because section 29-2-106.1(2)(c)(I) limited the Towns to conducting only the informal hearing as part of the statutory use tax refund appeals process. Accordingly, MDC requested that the Towns issue their final decisions on MDC'S tax refund requests so that MDC would be in a position to exercise its appellate remedies. The Towns did not respond.
After waiting the required ninety-day statutory period, with no final decisions forthcoming from the Towns' Finance Directors, MDC filed its appeals with the Executive Director of the Department of Revenue, pursuant to section 39-21-103, C.R.S. (2009), as provided by section 29-2-106.1(3)(a). The Towns then asserted to the Executive Director that MDC had failed to exhaust its administrative remedies under the provisions of the Towns' municipal codes. In response, the Executive Director determined that MDC had properly complied with the appeal provisions applicable under the state statutes governing municipal tax refund requests made by taxpayers.
The Towns then filed a joint complaint for injunctive relief in the District Court for the City and County of Denver contesting the jurisdiction of the Executive Director to hear and determine MDC's tax refund appeals. The district court denied the injunction, determining that MDC had properly pursued its appeals to the Executive Director. The Towns appealed the denial of the injunction to the court of appeals.
The court of appeals determined that MDC had not timely appealed to the Executive Director because the letters from the Towns' law firm to MDC's law firm constituted the Towns' final decisions, and section 29-2-106.1(2)(c) required MDC to file its appeal with the Executive Director within thirty days after the taxpayer's exhaustion of local remedies. The court of appeals concluded that the Executive Director lacked jurisdiction to hear and determine MDC's tax refund appeals. We disagree and reverse the judgment of the court of appeals.
We hold that section 29-2-106.1 supersedes the Towns' codes, which require a formal hearing following the informal hearing; that the letters from the Towns' attorney to MDC's law firm did not constitute final decisions triggering the thirty-day deadline for appealing to the Executive Director; that MDC properly perfected its appeals following the ninety-day statutory waiting period applicable here because the Towns failed to render final decisions; and that the Executive Director has jurisdiction to hear and determine MDC's tax refund appeals.
MDC paid use taxes to the Towns on building materials in connection with its residential construction activities. In March of 2005, alleging overpayment, MDC requested use tax refunds from the Towns. In December 2005, the Finance Directors of the Towns denied the refund requests. The Finance Directors signed the denials under the letterhead of their respective town. Both denials advised MDC that it had fifteen days from the date of the denial "to request a hearing on this denial," under section 4.03.110 of the Parker Sales and Use Tax Code and section 3.05.110 of the Castle Rock Tax Administration Code.
Both codes in effect at the time of the refund requests contained the following provision under the heading "Hearings":
Informal hearing. If the taxpayer elects to participate in an informal hearing, which hearing must be held within thirty (30) days of the Director's receipt of the taxpayer's request for a hearing, additional informal hearings shall not be permitted except at the discretion of the Director. Informal hearings shall be conducted in any manner acceptable to the taxpayer and the Director with the purpose of settling the outstanding issues between the parties. If no settlement is reached, the taxpayer must request, in writing, a formal hearing on the record within fifteen (15) days after the informal hearing and the Director shall give notice of the formal hearing pursuant to subsection (b) above. If the taxpayer fails to request a formal hearing within fifteen (15) days after the informal hearing, all further rights to a hearing and appeal are waived and the taxpayer shall be bound by the Notice of Final Determination — Assessment and Demand for Payment or final Denial of Refund.
Castle Rock, Colo., Tax Administration Code § 3.05.110(C) (2008); Parker, Colo., Sales and Use Tax Code § 4.03.110(c) (2008) (emphasis added).
Both codes contained the following provisions for a formal hearing and determination on the record:
Director to conduct formal hearing. The hearing shall be held before the Director, or a hearing officer designated by the Director. At the hearing, the taxpayer may assert any facts, make any arguments and file any briefs and affidavits he or she believes pertinent to his or her case. The taxpayer shall be notified of the name of the hearing officer fifteen (15) days before the hearing date, and any objection by the taxpayer to the hearing officer shall be filed in writing at least forty-eight (48) hours prior to the hearing. All reasonable costs to the Town for a hearing officer must be paid by the taxpayer requesting the formal hearing when the hearing officer determines no change in the tax due.
Castle Rock, Colo., Tax Administration Code § 3.05.110(D) (2008); Parker, Colo., Sales and Use Tax Code § 4.03.110(d) (2008) (emphasis added). Both codes also contained a provision for any taxpayer appeal therefrom to be conducted pursuant to C.R.C.P. 106(a)(4):
Appeals. The taxpayer may appeal the Hearing Determination Notice of the Director issued pursuant to [the Towns' codes] within thirty (30) days of the date that such determination is sent by the Director. Such appeal shall be conducted pursuant to the terms of Rule 106(a)(4) of the Colorado Rules of Civil Procedure.
Castle Rock, Colo., Tax Administration Code § 3.05.120 (2008); Parker, Colo., Sales and Use Tax Code § 4.03.120 (2008) (emphasis added).
On January 5, 2006, alleging that it had overpaid its use taxes in the amount of $176,141.92 for the period March 8, 2002, through December 31, 2004, to Parker and $158,616.58 to Castle Rock for the period January 1, 2003, through December 31, 2004, MDC filed its written appeals and requests for an informal hearing in accordance with section 29-2-106.1(2)(c) and the Towns' codes. MDC's letter to the Town of Parker requesting the informal hearing states, in material part:
January 5, 2006
Mike Farina
Acting Finance
Town of Parker
Re: Appeal and Request for Informal
Hearing
M.D.C. Holdings, Inc., together with its Colorado operating subsidiary, Richmond American Homes of Colorado, Inc. (collectively, "MDC" or "the Company"), hereby request an informal hearing of the Town of Parker's ("Parker") December 22, 2005 denial of the Company's claim for refund of sales and use taxes ("Claim"). This request is made in accordance with C.R.S. § 29-2-106.1(2)(c) and Parker Municipal Code ("PMC") § 4.03.110(a).... We look forward to an informal hearing to discuss these matters.
(Emphasis added).
MDC made an identical request on January 5, 2006, addressed to Karen Feeney, Finance Director for the Town of Castle Rock, citing the state statute and Castle Rock Municipal Code § 3.05.110(A). A consolidated informal hearing involving the Towns and MDC occurred on February 10, 2006. On February 22, 2006, the law firm that represented both Towns sent on its letterhead identical letters to MDC's law firm. These letters commence with a statement that the Towns "[t]hank you for attending and participating in the February 10, 2006 meeting conducted pursuant to Section 4.03.110(c) of the Parker Municipal Code [and Section 3.05.110(C) of the Castle Rock Municipal Code]." Both of these code sections cited by the Towns' law firm are captioned "Informal Hearing"; both utilize the term "informal hearing" throughout; and neither contains the word "meeting" in their text.
The Towns' law firm letters go...
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