Twilight Ridge, LLC v. Bd. of Cnty. Comm'rs of La Plata Cnty.

• Decision Date: 26 July 2018
• Docket Number: Court of Appeals No. 17CA0939
• Citation: 468 P.3d 43
• Parties: TWILIGHT RIDGE, LLC, Petitioner–Appellant, v. BOARD OF COUNTY COMMISSIONERS OF LA PLATA COUNTY, Colorado; and Board of Equalization of La Plata County, Colorado, Respondents–Appellees, and Board of Assessment Appeals, Appellee.
• Court: Colorado Court of Appeals

468 P.3d 43

TWILIGHT RIDGE, LLC, Petitioner–Appellant,

v. BOARD OF COUNTY COMMISSIONERS OF LA PLATA COUNTY, Colorado; and Board of Equalization of La Plata County, Colorado, Respondents–Appellees,andBoard of Assessment Appeals, Appellee.

Court of Appeals No. 17CA0939

Colorado Court of Appeals, Division VI.

Announced July 26, 2018

Ryley Carlock & Applewhite, F. Brittin Clayton III, Denver, Colorado, for Petitioner-Appellant

Sheryl V. Rogers, County Attorney, Kathleen Lyon, Assistant County Attorney, Durango, Colorado, for Respondents-Appellees

Cynthia H. Coffman, Attorney General, John A. Lizza, First Assistant Attorney General, Katie A. Allison, Second Assistant Attorney General, Emmy A. Langley, Assistant Solicitor General, Denver, Colorado, for Appellee

Opinion by JUDGE VOGT^*

¶ 1 Twilight Ridge, LLC appeals from two orders of the Colorado Board of Assessment Appeals (BAA) denying its petitions challenging the classification of its property for the 2014-15 and 2016 tax years. We affirm.

I. Background

¶ 2 Elmo and Patricia Robinson are the sole members of Twilight, a Colorado limited liability company. In 2013 Twilight purchased two contiguous platted parcels of land in La Plata County, Colorado. The first parcel has a home on it (Residential Parcel). The second parcel is a 0.763-acre buildable but undeveloped lot (Subject Parcel).

¶ 3 The La Plata County Assessor classified the Subject Parcel as vacant land, which is taxed at a higher rate than residential property. Twilight appealed the decision for the 2014-15 tax years to the Board of County Commissioners of La Plata County, and it appealed the decision for the 2016 tax year to the Board of Equalization of La Plata County, arguing to both bodies (collectively, the County) that the Subject Parcel should be reclassified as residential land.¹ Both Boards upheld the County Assessor's classification.

¶ 4 Twilight appealed to the BAA, which consolidated the two proceedings for a de novo hearing.² At the hearing, Elmo Robinson testified that he and his wife bought the two parcels together, intending that the Subject Parcel would give them privacy and serve as a buffer to help ensure that their views to the north would not be impeded by a house built on the Subject Parcel. He also said that the Subject Parcel was to be a place where his grandchildren could play when they came to visit, as the Residential Parcel had little flat land on which the children could safely play. Although he was currently offering only the Residential Parcel for sale, Robinson intended to sell both parcels together.

¶ 5 Twilight also offered testimony by Curt Settle, Deputy Director of the Colorado Division of Property Taxation, who was designated by the Property Tax Administrator (PTA) to testify regarding the Division's policies as embodied in the PTA's Assessors’ Reference Library (ARL). Settle testified about how assessors determine the classification of property for tax purposes, the standards applicable to such determinations as set forth in the ARL, and the types of use that can qualify for residential classification.

¶ 6 The County provided testimony from its appraiser, Diana Cole, who had visited Twilight's parcels after Twilight requested reclassification and had seen no activity or evidence of use on the Subject Parcel when she visited. Her testimony was followed by that of Craig Larson, the La Plata County Assessor, who had also visited the Twilight parcels. Larson opined that using the Subject Parcel as a place for children to play and to protect a view were simply "incidental" uses and were not the sort of "integral" use of the Subject Parcel in conjunction with the residential improvements that would warrant classifying the Subject Parcel as residential.

¶ 7 The BAA upheld the County's classification of the Subject Parcel as vacant land. Crediting Cole's and Larson's testimony over Robinson's, it concluded that Twilight

did not meet its burden of proving that the [Subject Parcel] meets the definition of "residential land" which is defined in Section 39-1-102(14.4), C.R.S. as "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."

(Emphasis added in BAA's order.)³

II. Analysis

¶ 8 Twilight contends that, in denying its challenge to the classification of its property, the BAA misconstrued the "used as a unit" element of section 39-1-102(14.4)(a), C.R.S. 2017, and made clearly erroneous findings of fact. We discern no reason for reversal.

A. Standard of Review and Applicable Law

1. Standard of Review

¶ 9 A BAA decision classifying property for tax purposes involves mixed issues of law and fact. Aberdeen Inv'rs, Inc. v. Adams Cty. Bd. of Cty. Comm'rs , 240 P.3d 398, 400 (Colo. App. 2009) ; E.R. Southtech, Ltd. v. Arapahoe Cty. Bd. of Equalization , 972 P.2d 1057, 1059 (Colo. App. 1998). We review the BAA's legal conclusions de novo, but we defer to its factual findings. Rust v. Bd. of Cty. Comm'rs , 2018 COA 72, ¶ 6, ––– P.3d ––––. Thus, we will sustain the BAA's classification if it is reasonably based in law and is supported by substantial evidence in the record as a whole. Farny v. Bd. of Equalization , 985 P.2d 106, 109 (Colo. App. 1999) ; E.R. Southtech, Ltd. , 972 P.2d at 1059 ; see § 24-4-106(7), C.R.S. 2017.

¶ 10 In proceedings before the BAA, the County Assessor's classification is presumed correct, and the burden to rebut that presumption is on the taxpayer challenging the classification. Gyurman v. Weld Cty. Bd. of Equalization , 851 P.2d 307, 310 (Colo. App. 1993).

¶ 11 The interpretation of statutes is a question of law that we review de novo. See Fischbach v. Holzberlein , 215 P.3d 407, 409 (Colo. App. 2009). In interpreting statutes, our primary objective is to effectuate the intent of the General Assembly, which we do in the first instance by looking to the plain meaning of the language used, considered within the context of the statute as a whole. Fifield v. Pitkin Cty. Bd. of Comm'rs , 2012 COA 197, ¶ 5, 292 P.3d 1207.

¶ 12 When the statute concerns property tax, we also owe deference to, but are not bound by, the PTA's interpretation of the statute he or she administers. See Rust , ¶ 6. The PTA is directed by statute to create "manuals, appraisal procedures, and instructions ... concerning methods of appraising and valuing land ... [and] improvements, ... and to require their utilization by assessors in valuing and assessing taxable property." § 39-2-109(1)(e), C.R.S. 2017. To that end, the PTA publishes the ARL to provide guidance for classifying land, and county assessors are bound to use it. Huddleston v. Grand Cty. Bd. of Equalization , 913 P.2d 15, 17 (Colo. 1996).

2. Classification of Real Property for Tax Purposes

¶ 13 Pursuant to the Colorado Constitution, "residential" real property is valued for assessment at a lower rate than other real property. See Colo. Const. art. X, § 3 (1)(b). Section 39-1-102(14.4)(a) defines residential land as "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."

¶ 14 The ARL includes a section intended to provide guidance for assessors in applying section 39-1-102(14.4)(a). The section, captioned "Contiguous Parcels of Land with Residential Use," states in relevant part that "[p]arcels of land, under common ownership, that are contiguous and used as an integral part of a residence, are classified as residential property." 2 Div. of Prop. Taxation, Dep't of Local Affairs, Assessors’ Reference Library § 6, at 6.10 (rev. Apr. 2018). It goes on to state that the assessor's judgment is crucial in determining whether contiguous parcels can be defined as residential property, that a physical inspection will provide information critical to this decision, and that suggested judgment criteria include the following:

• Are the contiguous parcels under common ownership?

• Are the parcels considered an integral part of the residence and actually used as a common unit with the residence?

• Would the parcel(s) in question likely be conveyed with the residence as a unit?

• Is the primary purpose of the parcel and associated structures to be for the support, enjoyment, or other non-commercial activity of the occupant of the residence?

If answers to all of these criteria are yes, then it is likely that the parcel would fall under the residential classification.

Id. at 6.11.

¶ 15 Divisions of this court have examined the BAA's classification of contiguous parcels of land in Fifield and in Sullivan v. Board of Equalization , 971 P.2d 675, 676 (Colo. App. 1998). In Fifield , the division held that neither section 39-1-102(14.4)(a) nor the ARL required that a parcel contiguous to the residential lot must itself contain residential improvements in order to be classified as residential for tax purposes. Fifield , ¶ 11. In Sullivan , 971 P.2d at 676, the division upheld the BAA's determination that the contiguous parcel did not qualify as residential because it was not under common ownership with the residential parcel. The division then went on to address the taxpayer's alternative contention that the contiguous parcel could qualify independently as residential. That avenue for residential classification was equally inapplicable because "in order for a parcel of land to qualify for residential classification independently from other parcels, there must be a residential dwelling unit on the property." Id. (emphasis added).⁴

¶ 16 The BAA's classification of contiguous or allegedly contiguous parcels of land has been addressed more recently in Kelly v. Board of County Commissioners , 2018 COA 81M, ¶¶ 39-41, 459 P.3d 621 (concluding BAA abused its discretion in rejecting parties’ stipulation that contiguous parcels were under common ownership); Hogan v. Board of County...