Thibodeau v. Denver Cty. Bd. Comm'rs

The summaries of the Colorado Court of Appeals published opinions
constitute no part of the opinion of the division but have been prepared by
the division for the convenience of the reader. The summaries may not be
cited or relied upon as they are not the official language of the division.
Any discrepancy between the language in the summary and in the opinion
should be resolved in favor of the language in the opinion.

SUMMARY
August 23, 2018

2018COA124

No. 17CA0653 Thibodeau v. Denver Cty. Bd. Comm’rs —
Taxation — Property Tax — Valuation for Assessment

A division of the court of appeals holds that section 39-1-

104(11)(b)(I), C.R.S. 2017, authorizes an assessor to revalue real

property in an intervening tax year if the assessor discovers that the

original assessment was incorrect at the time it was originally done.

While this interpretation was previously announced in 24, Inc. v.

Board of Equalization, 800 P.2d 1366 (Colo. App. 1990), the relevant

statute has been subsequently amended. This decision makes clear

that the statutory amendment did not alter the assessor’s authority

in this regard. Further, in each of the prior published decisions

related to this language, the prior division ruled that although the

assessor had this authority, the taxpayer in that specific case

nevertheless won because the assessor had failed to establish that
the original valuation was incorrect. This is the first published

decision where the assessor’s actions are upheld.
COLORADO COURT OF APPEALS 2018COA124

Court of Appeals No. 17CA0653
Board of Assessment Appeals Case No. 68926

Joseph H. Thibodeau,

Petitioner-Appellant,

v.

Denver County Board of Commissioners and Board of Assessment Appeals,

Respondents-Appellees.

ORDER AFFIRMED

Division II
Opinion by JUDGE TOW
Dailey and Casebolt*, JJ., concur

Announced August 23, 2018

N.H. Wright and Associates, Norman H. Wright, Dillon, Colorado, for Petitioner-
Appellant

Kristin M. Bronson, City Attorney, Noah Cecil, Assistant City Attorney, Denver,
Colorado, for Respondent-Appellee Denver County Board of Commissioners

Cynthia H. Coffman, Attorney General, John A. Lizza, First Assistant Attorney
General, Denver, Colorado, for Respondent-Appellee Board of Assessment
Appeals

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art.
VI, § 5(3), and § 24-51-1105, C.R.S. 2017.
¶1 Petitioner, Joseph H. Thibodeau, appeals an order of the

Board of Assessment Appeals (BAA) denying his abatement petition

for the 2014 tax year. We affirm.

I. Background

¶2 Thibodeau purchased the subject property, a residence located

in the City and County of Denver, in July 2013. Earlier that year,

the property was valued at $803,800 for ad valorem tax purposes.

In May 2014, Thibodeau received notice that the City and County of

Denver Assessor’s Office increased its assessment of the property’s

value to $1,169,700.

¶3 Thibodeau unsuccessfully protested the increase with the

Assessor before petitioning for abatement from the Denver County

Board of Commissioners, sitting as the Denver County Board of

Equalization (BOE). Thibodeau argued that the City erred in

reassessing the subject property in an intervening year because no

unusual condition existed. The BOE rejected his claim and upheld

the 2014 assessment.

¶4 Thibodeau then filed an appeal with the BAA, again

contending that the BAA should reduce the subject property’s 2014

value to the 2013 value of $803,800. At the hearing, the BOE

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requested that the property’s value be lowered from $1,169,700 to

$1,150,000, based on an appraisal by a licensed residential

appraiser. The BAA concluded that the mischaracterization of the

property’s condition as average, rather than good, led to an

incorrect 2013 assessment of the property’s value. Therefore, the

assessor was permitted to correct the incorrect assessment during

the intervening year. Additionally, the BAA found that there was

sufficient evidence to support the value testified to by the appraiser.

¶5 On appeal, Thibodeau argues that the BAA erred in upholding

the City and County of Denver’s reassessment of his property

because section 39-1-104(11)(b)(I), C.R.S. 2017, only permits

redeterminations in intervening years when unusual conditions

exist. He also contends that the reassessment violated his

constitutional right to equal protection in light of the Supreme

Court’s decision in Allegheny Pittsburgh Coal Co. v. County

Commission, 488 U.S. 336 (1989). We consider, and reject, each

contention in turn.

II. Standard of Review

¶6 A challenge to the BAA’s property tax assessment requires us

to review questions of law and fact. We may only set aside the

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BAA’s decision if the BAA failed to abide by the statutory scheme for

calculating property taxes, or its decision is unsupported by

competent evidence. Jefferson Cty. Bd. of Cty. Comm’rs v. S.T.

Spano Greenhouses, Inc., 155 P.3d 422, 424 (Colo. App. 2006).

Because statutory interpretation is a question of law, we review the

BAA’s interpretation of the relevant statute de novo. Id.

¶7 However, we defer to the BAA’s findings of fact. “It is the

function of the BAA, not the reviewing court, to weigh the evidence

and resolve any conflicts.” Bd. of Assessment Appeals v. Sampson,

105 P.3d 198, 208 (Colo. 2005). And, Thibodeau bears the burden

of proving by a preponderance of the evidence that the property

assessment is incorrect. Id. at 202.

III. Correction of a Property Assessment in an Intervening Year

¶8 Thibodeau first contends that the BAA erred in concluding

that the assessor was permitted to reassess his property value in an

intervening year without showing that an unusual condition

existed. We conclude that section 39-1-104(11)(b)(I) authorizes

assessors to correct incorrect property assessments in intervening

years.

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A. The Assessor’s Authority

¶9 Section 39-1-104(10.2)(a) provides that “beginning with the

property tax year which commences January 1, 1989, a

reassessment cycle shall be instituted with each cycle consisting of

two full calendar years.” In other words, property value

assessments are calculated once every two years. But,

reassessments of property values are permitted in intervening years

if “any unusual conditions in or related to any real property which

would result in an increase or decrease in actual value” exist.1

§ 39-1-104(11)(b)(I). Additionally, the statute provides that

[i]f any real property has not been assessed at
its correct level of value, the assessor shall
revalue such property for the intervening year
so that the actual value of such property will
be its correct level of value; however, the
assessor shall not revalue such property above
or below its correct level of value except as
necessary to reflect the increase or decrease in
actual value attributable to an unusual
condition.

Id.

1 As applicable here, an unusual condition includes the installation
of an onsite improvement or the addition to or remodeling of a
structure. § 39-1-104(11)(b)(I), C.R.S. 2017.

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¶ 10 Thibodeau contends that the statute restricts property

reassessments in intervening years to only instances where

unusual conditions arise. Because no unusual condition exists

here, he argues that the property was improperly reassessed during

an intervening year. Divisions of this court have addressed, and

rejected, similar arguments.

¶ 11 The statutory language quoted above was first enacted, albeit

in slightly different form, in 1983. At that time, the legislature

added the following sentence to the statute:

If any real property has not been assessed at
its correct base year level of value, the
assessor may revalue such property for an
intervening year so that the actual value of
such property will be its correct base year level
of value; however, the assessor may not
revalue such property above or below its
correct base year level of value except as
necessary to reflect the increase or decrease in
actual value attributable to an unusual
condition.

Ch. 429, sec. 1, § 39-1-104(11)(b)(I), 1983 Colo. Sess. Laws 1495.

¶ 12 In 24, Inc. v. Board of Equalization, 800 P.2d 1366, 1368 (Colo.

App. 1990), a division of this court determined that this language

granted assessors the authority to revalue properties during

intervening years under three circumstances: “(1) to correct a

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clerical error or supply a clerical omission; (2) to adjust for an

unusual condition; or (3) to correct an incorrect value.” In its

analysis, the division acknowledged that the statutory language

governing reassessments during intervening years was unclear. Id.

at 1369. Accordingly, the division turned to the legislative history

underpinning the statute to determine its purpose.2 Id.; see Colo.

Dep’t of Revenue v. Creager Mercantile Co., 2017 CO 41M, ¶ 16

(explaining that courts employ interpretive rules when the statutory

language is subject to alternative constructions and its intended

scope is unclear).

¶ 13 The division concluded that the statute was intended to

provide assessors the authority to correct an incorrect assessment

in or between base years. 24, Inc., 800 P.2d at 1369. And, other

divisions of this court have agreed that county assessors may

correct property value assessments in intervening years. See

2 During a legislative committee hearing, the bill sponsor explained
that if an assessor “make[s] a mistake and value[s] the property too
high or too low, [the assessor] need[s] the ability in between base
years to reappraise the property, as long as [the assessor] do[es] not
exceed what the property was worth in the base year.” 24, Inc. v.
Bd. of Equalization, 800 P.2d 1366, 1369 (Colo. App. 1990) (quoting
Hearing on H.B. 1004 before the H. Fin. Comm., 54th Gen.
Assemb., 1st Sess. (Jan. 17, 1983)).

6
Leavell-Rio Grande Cent. Assocs. v. Bd. of Assessment Appeals, 753

P.2d 797, 800 (Colo. App. 1988) (concluding that assessors may

revalue properties in intervening years to correct incorrect base

value assessments); see also Lowe Denver Hotel Ass’n v. Arapahoe

Cty. Bd. of Equalization, 890 P.2d 257, 258-59 (Colo. App. 1995)

(explaining that assessors may make corrective intervening-year

revaluations when the assessor’s original base period valuation for

the first year of the reassessment cycle is incorrect).3

¶ 14 The pertinent statutory language has been amended only once

since then, and that amendment does not impact the applicability

of the analysis in 24, Inc.4 Therefore, we disagree with Thibodeau

that reassessments during intervening years are permitted only

when unusual conditions exist. Instead, we conclude that county

3 Thibodeau characterizes this announcement in 24, Inc., as dicta.
He is mistaken. “A holding and its necessary rationale, however,
are not dicta.” Hardesty v. Pino, 222 P.3d 336, 340 (Colo. App.
2009) (citing Michael Abramowicz & Maxwell Stearns, Defining
Dicta, 57 Stan. L. Rev. 953, 1048 (2005)).
4 In 1987, the legislature made two changes: the provision went

from permissive (“the assessor may revalue such property for an
intervening year”) to mandatory (“the assessor shall revalue such
property”), and the year beginning the reassessment cycle would no
longer be referred to as “the base year.” Ch. 285, sec. 1, § 39-1-
104(11)(b)(I), 1987 Colo. Sess. Laws 1385.

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assessors are required to correct incorrect assessments in

intervening years in order to set the value at what it would have

been set at in the assessment year had the mistake not occurred.

Further adjustments to the value, however, cannot be made in an

intervening year absent proof of an unusual condition.

B. The Corrected Assessment

¶ 15 We must next determine (1) whether Thibodeau’s property was

incorrectly assessed during the 2013 assessment year and (2)

whether there is competent evidence to support the 2014 corrected

value. We answer both questions in the affirmative.

¶ 16 At the BAA hearing, a certified residential appraiser and an

employee of the county assessor’s office testified that the subject

property was misidentified as being in average, rather than in good,

condition during the 2013 assessment year. The county assessor

explained that the appraisal system accounts for the condition of

the property by determining the property’s condition, desirability,

and utility. Consequently, a mischaracterization of the property’s

condition may result in an inaccurate assessment of the property’s

value.

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¶ 17 When assessing a property’s condition, the assessor testified

that the county assessor’s office examines permit records from the

county’s planning department to determine whether improvements

have been made on the property. The county assessor explained

that a house built in the 1930s that had not undergone renovations

or remodeling is considered a house in average condition. But, the

assessor’s office “always assume[s] . . . in the absence of any other

knowledge . . . that the condition is average.” Here, the assessor’s

records indicated that the property had not been remodeled since

its construction in 1938.

¶ 18 In June 2013, after the assessment was completed, the

property was listed for sale, during which pictures and a description

of the property were posted on the Multiple Listing Service (MLS)

website. The MLS listing described the property as containing a

“brand new gourmet kitchen, bathrooms, copper pipes, new

electrical, [and a] wine cellar,” and the photographs, according to

the assessor, indicated that the “kitchen and also the bathrooms

[had] been renovated and remodeled.” The county assessor

subsequently “updated” the property’s record to indicate that the

property was in good condition.

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¶ 19 After modifying the record, the assessor then revalued the

property, taking into consideration the newly discovered

information that the property had been in good, not average,

condition at the time of the 2013 assessment. During the hearing,

the county assessor testified that he used a market approach, in

which he used three comparable sales, to determine that the

property’s correct value was $1,150,000 on January 1, 2013.

Thibodeau did not present evidence that the BOE’s corrected value

was incorrect. Rather, he argued only that reassessing the property

during an intervening year was improper because the BOE could

not point to an unusual condition that arose between 2013 and

2014.5

5 During the hearing, Pamela King, a professional interior decorator,
testified that she helped to “reface” the kitchen in 2009. She
explained that she assisted in only completing “cosmetic things to
the house” — such as repainting kitchen cabinets and installing
countertops, a sink, a stair runner, and window coverings. Even
so, the assessor testified that the property was in good condition
not only because of the kitchen alterations but also due to
significant, and previously unknown, renovations to the property’s
plumbing, electrical system, and bathrooms that had occurred over
time prior to the 2013 assessment. Thus, while we agree with
Thibodeau that there was no unusual condition warranting
reassessment during the intervening year, a corrected assessment
was nonetheless permitted because the 2013 assessment was based

10
¶ 20 At the conclusion of the hearing, the BAA determined that the

subject property was incorrectly assessed in 2013 and there was

competent evidence to support the BOE’s corrected value of

$1,150,000. We agree.

¶ 21 A property’s value must be assessed “according to its taxable

status, use, and condition on the assessment date.” 2 Div. of Prop.

Taxation, Dep’t of Local Affairs, Assessors’ Reference Library § 2, at

2.6 (rev. July 2018) (emphasis added). Here, the county assessor

initially classified the house as average based on an incorrect

assumption that the property had not been renovated or remodeled

since 1938. As a result, the records used to determine the

property’s value in 2013 differed significantly from the depiction of

the property in the June 2013 MLS listing. Because the 2013

property assessment relied on an incorrect characterization of the

property’s condition, the county assessor’s office was permitted,

indeed required, to correct the assessment in 2014.

on an incorrect assumption that the property was in average
condition at that time.

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¶ 22 Moreover, there is substantial evidence in the record to

support the BAA’s conclusion that the property’s appraisal of

$1,150,000 was persuasive and well-supported. The county

assessor explained how a misclassification of a property’s condition

can lead to a significant miscalculation of the property’s value for

tax purposes. And, the assessor presented substantial evidence on

the process by which the property’s value was recalculated. We

therefore conclude that the BAA’s factual determinations as to the

appropriate valuation of the subject property for the 2013 tax year

is supported by competent and substantial evidence in the record

as a whole, and the BAA’s ruling therefore will not be disturbed on

review. See Weingarten v. Bd. of Assessment Appeals, 876 P.2d

118, 121 (Colo. App. 1994).

IV. Constitutional Challenges

¶ 23 Thibodeau also contends that the BOE’s off-cycle

reassessment of the property’s value violated the Equal Protection

Clause of the United States Constitution, as well as the Colorado

Constitution’s guarantee of uniform taxation. We are not

persuaded.

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A. Standard of Review

¶ 24 The Fourteenth Amendment to the United States Constitution

provides that no state shall “deny to any person within its

jurisdiction the equal protection of the laws.” U.S. Const. amend.

XIV, § 1. This provision requires the government to treat similarly

situated persons in a similar manner. HealthONE v. Rodriguez, 50

P.3d 879, 892 (Colo. 2002). Because the BOE’s actions did not

affect Thibodeau’s fundamental right or a suspect class, so long as

the BOE’s actions are not unreasonable, arbitrary, or capricious,

they need only bear a rational relationship to legitimate

governmental objectives. Id. at 893.

B. Applicable Law and Analysis

¶ 25 Thibodeau contends that the BOE’s actions are in tension with

the Supreme Court’s decision in Allegheny Pittsburgh Coal Co. v.

County Commission, 488 U.S. 336 (1989). In Allegheny, the county

tax assessor systematically revalued properties on the basis of their

recent purchase prices and made only minor modifications in the

assessments of land that had not been recently sold. Id. at 338.

Consequently, properties that were sold when this practice was in

place were assessed significantly higher than comparable

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neighboring properties that had not been recently sold. Id. at 342.

The Court concluded that the assessor’s practice of assessing only

recently sold properties, and nominally adjusting properties that

had not recently sold, resulted in significant discrepancies in the

value of comparable properties over time. Id. at 346. The Court

observed that the “[p]etitioners’ property [had] been assessed at

roughly 8 to 35 times more than comparable neighboring property,

and these discrepancies [had] continued for more than 10 years

with little change.” Id. at 344. The petitioners, therefore, had been

denied the equal protection of the law. Id. at 346.

¶ 26 Thibodeau contends that the county assessor here is engaging

in a similar practice to that rejected in Allegheny. The comparison,

however, is inapt. In Allegheny, property values were assessed only

when a sale of the property occurred; unless a property was sold,

its assessed value was likely to remain largely unchanged for years.

Here, on the other hand, the statute requires all properties to be

reassessed every two years — regardless of whether they have been

recently sold — with the ability to remedy an incorrect assessment

or account for an unusual condition in an intervening year.

14
¶ 27 The mere fact that the county assessor became aware of the

incorrect valuation as a result of the routine sales verification

process does not raise the concerns addressed in Allegheny. There

is simply no evidence that Thibodeau’s property is assessed at a

significantly different value than comparable properties, or that any

such discrepancy has existed for any length of time.

¶ 28 Thibodeau also contends that “increasing the valuation of a

single property [based on the sales verification process] while not

raising the values of all properties in the same class (let alone, in

the same neighborhood)” violates the Equal Protection Clause. But,

the fact that two properties are in the same class or same

neighborhood does not necessarily mean they are similarly situated.

Thibodeau would have to show (1) there were other homes that were

incorrectly valued in the assessment year; (2) the assessor became

aware of these incorrect values; and (3) the values were not

corrected in the intervening year. There was no such showing here.

In fact, the Board of Commissioners makes clear that the sales

verification process, which is used to evaluate the accuracy of the

county’s property records, applies to all properties that are recently

sold. And, Thibodeau does not present any evidence indicating

15
otherwise. We therefore cannot determine that the subject property

was treated differently from similarly situated properties.

¶ 29 Because we conclude that the assessment value of the subject

property was corrected upon the discovery that the original

assessment was based on an incorrect determination of the

property’s condition, not because of the sale of the property, and

that similarly situated properties also undergo the sales verification

process employed here to determine that the property was

incorrectly assessed, we discern no equal protection concerns.

C. Colorado’s Uniformity Clause

¶ 30 Thibodeau also argues that the revaluation violates the

Uniformity Clause of the Colorado Constitution. Colo. Const. art. X,

§ 3(1)(a). This provision provides that the methods and regulations

underpinning tax assessments “shall secure just and equalized

valuations for assessments of all real and personal property not

exempt from taxation under this article.” Id. The protections

provided by the Uniformity Clause are co-extensive with those

ensured by the federal Equal Protection Clause. Qwest Corp. v.

Colo. Div. of Prop. Taxation, 310 P.3d 113, 120 (Colo. App. 2011),

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aff’d, 2013 CO 39. Thus, because we conclude there is no violation

of the Equal Protection Clause, this argument, too, must fail.

V. Conclusion

¶ 31 The order is affirmed.

JUDGE DAILEY and JUDGE CASEBOLT concur.

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