West Brandt Foundation, Inc. v. Carper, 80SC279

• Citation: 652 P.2d 564
• Decision Date: 13 September 1982
• Docket Number: No. 80SC279,80SC279
• Parties: WEST BRANDT FOUNDATION, INC., a Louisiana non-profit corporation, d/b/a Singin' River Ranch, Petitioner, v. Raymond E. CARPER, Property Tax Administrator, Division of Property Taxation, and R.N. Patton, Martin E. Fisch, and F.M. Peterson, individually and as the Board of Assessment Appeals of the State of Colorado, Respondents.
• Court: Supreme Court of Colorado

Page 564

652 P.2d 564

WEST BRANDT FOUNDATION, INC., a Louisiana non-profit corporation, d/b/a Singin' River Ranch, Petitioner, v. Raymond E. CARPER, Property Tax Administrator, Division of Property Taxation, and R.N. Patton, Martin E. Fisch, and F.M. Peterson, individually and as the Board of Assessment Appeals of the State of Colorado, Respondents.

No. 80SC279.

Supreme Court of Colorado,

En Banc.

Sept. 13, 1982.

Robert C. Floyd, Denver, for petitioner.

J.D. MacFarlane, Atty. Gen., Richard F. Hennessey, Deputy Atty. Gen., Mary J. Mullarkey, Sol. Gen., Billy Shuman, Sp. Asst. Atty. Gen., General Legal Services Section, Denver, for respondents.

Holme, Roberts & Owen, Richard R. Young, James T. Flynn, Colorado Springs, for amicus curiae U.S. Div. of Christian Camping Intern.

DUBOFSKY, Justice.

We granted certiorari to review the Court of Appeals' decision in West Brandt Foundation v. Carper, No. 78CA683 (July 31, 1980) (not selected for official publication) affirming the Division of Property Taxation's denial of a property tax exemption sought by the West Brandt Foundation (West Brandt) for its property in Clear Creek County, Colorado. We agree with the Court of Appeals' conclusion that West Brandt did not establish that the property is entitled to a charitable tax exemption and affirm the judgment.

In November, 1971, West Brandt purchased property in Clear Creek County, Colorado known as the Singin' River Ranch (Ranch) from The Regular Baptist Church Builders, Inc., which had a property tax exemption for the Ranch. West Brandt filed an application for exemption from Colorado property tax in December 1971. No taxes were levied on the Ranch property for the years 1971 through 1974. In April 1975, the Property Tax Administrator, acting for the Division of Property Taxation, denied West Brandt's exemption application based on its failure to furnish requested financial information. In October 1976, after a hearing, the Administrator confirmed his initial determination, finding that West Brandt had failed to establish that the Ranch was used for charitable purposes. West Brandt appealed the Administrator's decision to the Board of Assessment Appeals (Board), which held a hearing on January 7, 1977 and affirmed the denial of exemption. The Clear Creek County District Court upheld the Board's decision.

On appeal, the Court of Appeals concluded that the court action seeking review of the Board's decision should have been dismissed because Clear Creek County was an indispensable party that had not been joined as a defendant in the action. West Brandt Foundation v. Carper, 44 Colo.App. 137, 608 P.2d 355 (1978). In March 1980, this Court reversed, holding that the county's participation was not required, and remanded the case to the Court of Appeals for a ruling on the merits. West Brandt Foundation v. Carper, 199 Colo. 334, 608 P.2d 339 (1980). On remand, the Court of Appeals affirmed the denial of tax-exempt status to the Ranch.

The West Brandt Foundation is a Louisiana corporation certified as a charitable, non-profit corporation by the United States Internal Revenue Service and the Colorado Department of Revenue. Article II of its Articles of Incorporation provides that the purposes of the Foundation are "[t]o receive and administer funds for religious, educational, charitable, scientific, civic and literary purposes, deemed appropriate and worthy by the Foundation Board of Trustees, all for the public welfare, and for no other purposes...." The Foundation is connected with the West Brothers chain of department stores which has its headquarters in DeRidder, Louisiana and which has stores in several Southern states, primarily Louisiana and Texas.

The Singin' River Ranch is a group guest facility consisting of approximately 260 acres and a number of buildings, including two large dormitories and a dining hall, as well as a large recreational field and facilities for ice skating and sledding during the winter. The Ranch provides no instructors or curriculum of its own; groups and organizations using the Ranch supply their own materials, instructors and curricula.

Ranch registration records for the years 1973 through 1976 show over 200 parties registered for a stay at the Ranch. A majority of these parties were affiliated with a church, religious organization or elementary or secondary school. Testimony at the hearing before the Board indicated that Ranch employees visit schools and churches to solicit groups to stay at the Ranch and the Ranch is listed in directories as providing facilities available to church groups. During the summer, the Ranch is used for a summer camp program known as Christian Life Adventure Camp. In the summer of 1974, the first summer for the program, 74 campers participated. In 1975, the program included 196 youngsters, and in 1976, attendance was 254.

Mr. Glen West, president of the West Brandt Foundation, testified at the Board hearing as to the eventual goals sought to be fulfilled through use of the Ranch:

[T]he overall objective of the foundation ... is to get more people to live the Christian life. We felt that if we would come to Denver and set up a facility here in Denver and make it available to people, to schools, and things of that nature, and also to churches, we would be able to furnish something that would help--not only help the churches and schools in this area, but, eventually, we would be able to do some of our own programs out there and they would have some of our own people in working out various programs.

* * *

What we want to do is eventually work with enough people at this ranch to use it as an experimental area to develop programs and that kind of thing, so that we can develop what we call a group of life skilled courses.

* * *

So, we entered ... an interdenominational program to get people interested or involved in a christian-type ministry. So, eventually, that's where we want to go.... This might not be in my lifetime when we do this. This is the vision I have for what we want to do.

A number of the groups using the Ranch accommodations have no apparent religious, educational or charitable affiliation. The registration records disclose that the Ranch facilities were used on various occasions for a retirement dinner, a wedding, a rehearsal dinner, meetings set up by the Bureau of Land Management, family reunions, and meetings of managers and employees of the West Brothers stores. Among the groups which accounted for the largest receipts for lodging at the Ranch were student ski groups.

Guests at the Ranch are charged uniform daily rates for room and board. As of 1976, these rates were $11.00 per day for adults, with slightly reduced uniform rates for students and children. An additional fee was charged for sheets, towels and soap. These rates were charged to all guests without exception. No groups were charged special rates by virtue of their affiliation, nor were individuals within groups given a discount because of inability to pay. West Brandt alleged, but did not produce evidence, that these rates were below the market price for comparable lodgings in the vicinity.

West Brandt also alleged that the Ranch operates at a loss of approximately $150,000 a year and that the Foundation makes up the deficit with funds received through contributions. However, accounting records for the years 1974 through 1976 submitted to the Board of Assessment Appeals did not clearly establish this. In these records, income from guest payments was sometimes attributed to Ranch income and sometimes to the income of the Foundation. In several instances, operating expenditures for particular groups were listed as Ranch expenses while receipts from lodging payments were attributed to Foundation income. Most notably, payments for participation in the Christian Life Adventure Camps were made to the Foundation, while all expenses for the camp were listed under Ranch costs. In light of this confusion, the extent to which the Ranch is subsidized by the Foundation is not clear from the evidence in the record.

A significant proportion of guests at the Ranch come from outside Colorado. In 1973, non-Colorado user days comprised 18% of the total number of user days. In 1974, they accounted for 15% of user days; in 1975, 39%; and in 1976, 37%. The Christian Life Adventure Camps are advertised in West Brothers stores, none of which are located in Colorado, and the camp program is organized through the Foundation's home office in Louisiana. Of the 524 individuals attending the Christian Life Adventure Camps in the years 1974 through 1976, only two were Colorado residents.

The basis for the property tax exemption West Brandt seeks is Article X, Section 5 of the Colorado Constitution, which provides:

Property, real and personal, that is used solely and exclusively for religious worship, for schools or for strictly charitable purposes ... shall be exempt from taxation, unless otherwise provided by general law.

Section 39-3-101(1)(g)(I)(A), C.R.S.1973, also provides for the charitable tax exemption as follows:

The following shall be exempt from general taxation under the provisions of articles 1 to 13 of this title:

* * *

(g)(I) Property, real and personal, that is owned and used solely and exclusively for strictly charitable purposes and not for private gain or corporate profit if:

(A) Such property is nonresidential....

The power to construe the constitutional words "charitable purposes" rests with the courts of this state. United Presbyterian Ass'n v. Board of County Commissioners, 167 Colo. 485, 448 P.2d 967 (1968). See also section 39-3-101(1)(g)(III), which provides: "It is recognized that only the judiciary can make a final decision as to whether or not a given property is or is not used for charitable purposes within the meaning of the state constitution...."

The definition of charity most frequently quoted in our prior opinions is from Jackson v. Phillips, 96 Mass. (14...