Opinion ID: 4565231
Heading Depth: 1
Heading Rank: 1

Heading: The Party Presentation Principle

Text: ¶31 In our adversarial system of justice, we follow the party presentation principle, which relies on the parties to frame the issues to be decided and assigns to the courts the role of neutral arbiter of the matters that the parties present. United States v. Sineneng-Smith, 140 S. Ct. 1575, 1579 (2020); Lucero v. People, 2017 CO 49, ¶ 26, 394 P.3d 1128, 1134. This principle reflects the fact that “[o]ur adversary system is designed around the premise that the parties know what is best for them, and are responsible for advancing the facts and arguments entitling them to relief.” Greenlaw v. United States, 554 U.S. 237, 244 (2008) (quoting Castro v. United States, 540 U.S. 375, 386 (2003) (Scalia, J., concurring in part and concurring in the judgment)). Thus, in deciding a case, courts should not look for wrongs to right but should decide only the questions presented by the parties. Sineneng-Smith, 140 S. Ct. at 1579. ¶32 Here, we granted certiorari on two precise legal questions that, although reframed, fairly captured the issues as Lessees had articulated them in their petition for a writ of certiorari. Moreover, I believe that these issues were well tailored to address two issues of statutory construction that the division below addressed as matters of first impression and in a published opinion. ¶33 Notwithstanding the foregoing, the majority does not address either of these questions. Instead, it apparently asks and answers its own question, namely, 3 whether section 32-1-401(1)(a) permits the inclusion of a surface owner’s real property into a special taxing district without notice to or consent of owners of subsurface severed mineral interests, such that when the interest of the surface owner is included in a special district, the subsurface severed mineral estate is likewise included in the district and subject to taxation. This, however, is not an issue on which the division below opined, and, in my view, the parties were not given a full and fair opportunity to brief this question. ¶34 Accordingly, I do not believe that the issue on which the majority rules today is properly before us, nor do I believe that it affords us a basis on which to affirm the judgment below. Rather, I would address only the issues on which we granted certiorari. I turn to those issues next, beginning with the pertinent standard of review and principles of statutory construction. B. Standard of Review and Principles of Statutory Construction ¶35 We review questions of statutory interpretation de novo. Dep’t of Revenue v. Agilent Techs., Inc., 2019 CO 41, ¶ 16, 441 P.3d 1012, 1016. In construing a statute, our goal is to effectuate the legislature’s intent. Id. In seeking to do so, “we look to the entire statutory scheme in order to give consistent, harmonious, and sensible effect to all of its parts, and we apply words and phrases in accordance with their plain and ordinary meanings.” UMB Bank, N.A. v. Landmark Towers Ass’n, 2017 CO 107, ¶ 22, 408 P.3d 836, 840. We must avoid constructions that would render 4 any words or phrases superfluous or that would lead to illogical or absurd results. Agilent Techs., Inc., ¶ 16, 441 P.3d at 1016. In addition, we must respect the legislature’s choice of language, and we will not add words to a statute or subtract words from it. Id. ¶36 If the statutory language is clear, then we apply it as written and need not resort to other rules of statutory construction. Id. If, however, the statutory language is ambiguous, then we may examine the legislative intent, the circumstances surrounding the statute’s adoption, and the possible consequences of different interpretations to discern the proper construction of that statute. Colo. Oil & Gas Conservation Comm’n v. Martinez, 2019 CO 3, ¶ 19, 433 P.3d 22, 28. A statute is ambiguous when it is reasonably susceptible of multiple interpretations. Id. C. “Fee Owner” Under Section 32-1-401(1)(a) ¶37 Lessees contend that the division below erred in concluding that a mineral lessee is not a fee owner for purposes of section 32-1-401(1)(a). I disagree. ¶38 Section 32-1-401(1)(a) provides: The boundaries of a special district may be altered by the inclusion of additional real property by the fee owner or owners of one hundred percent of any real property capable of being served with facilities of the special district filing with the board a petition in writing requesting that such property be included in the special district. The petition shall set forth a legal description of the property, shall state that assent to the inclusion of such property in the special district is given by the fee owner or owners thereof, and shall be acknowledged 5 by the fee owner or owners in the same manner as required for conveyance of land. ¶39 Lessees assert that the phrase “fee owner” in the first sentence of this statute refers to any owner of a fee interest in property, including owners of interests in fee simple determinable, which Lessees maintain describes their interests. A fee simple determinable is typically defined as “[a]n estate that will automatically end and revert to the grantor if some specified event occurs[.]” Fee Simple Determinable, Black’s Law Dictionary (11th ed. 2019). And, as Lessees assert, although we have not opined on the issue, a number of other courts have concluded that an oil and gas lease conveys such an interest. See, e.g., Somont Oil Co. v. A & G Drilling, Inc., 49 P.3d 598, 604 (Mont. 2002) (“[O]il and gas leases transfer to the lessee a fee simple determinable estate with the lessor retaining a possibility of reverter.”); Maralex Res., Inc. v. Gilbreath, 76 P.3d 626, 630 (N.M. 2003) (“The typical oil and gas lease grants the lessee a fee simple determinable interest in the subsurface minerals within a designated area.”); Anadarko Petrol. Corp. v. Thompson, 94 S.W.3d 550, 554 (Tex. 2002) (“A Texas mineral lease grants a fee simple determinable to the lessee.”). ¶40 Respondents Robert Lembke, 70 Ranch LLC, the District, and United Water and Sanitation District, in contrast, contend that by using the phrase “fee owner,” the legislature intended to cover only those owners who hold a fee simple 6 absolute, or “[a]n estate of indefinite or potentially infinite duration.” Fee Simple Absolute, Black’s Law Dictionary (11th ed. 2019). ¶41 In my view, the phrase “fee owner” is reasonably susceptible of both of these interpretations. Accordingly, I believe that the phrase is ambiguous, and thus I turn to other tools of construction. Colo. Oil & Gas Conservation Comm’n, ¶ 19, 433 P.3d at 28. Doing so persuades me that for purposes here, “fee owner” does not subsume lessees of severed mineral interests. I reach this conclusion for two reasons. ¶42 First, like the division below, see Bill Barrett Corp. v. Lembke, 2018 COA 134, ¶¶ 33–38, __ P.3d __, I agree that the rationale in Coquina Oil Corp. v. Harry Kourlis Ranch, 643 P.2d 519, 522 (Colo. 1982), applies here. In Coquina Oil, 643 P.2d at 520–23, we considered whether two federal oil and gas lessees could assert the power to condemn private property for private use (there, a private way of necessity) under article II, section 14 of the Colorado Constitution and under section 38-1-102(3), C.R.S. (2019). We concluded that the lessees could not do so because, among other things, giving the lessees such condemnation powers “creates the possibility that the [property owner whose land was to be condemned for purposes of the private right-of-way] will be subjected repeatedly to the disruptive effect and expense of litigation as successive lessees attempt to secure a temporary right-of-way.” Coquina Oil, 643 P.2d at 522. Condemnation of a 7 right-of-way by a fee owner of a landlocked estate, in contrast, “does not create the same potential for a multiplicity of lawsuits. If the fee owner condemns the right-of-way, the taking is permanent and the appropriate compensation for the interests condemned is established in one proceeding.” Id. ¶43 Here, as in Coquina Oil, because Lessees’ interest is not necessarily of unlimited duration, treating a lessee as a fee owner for purposes of section 32-1-401(1)(a) could result in a succession of mineral lessees petitioning to be included in a special district, thereby creating potential instability and uncertainty in the organization and administration of that district. Absent an express indication of such an intent, I am unwilling to presume that this is what the legislature intended. ¶44 Second, I am persuaded by the position taken at oral argument by counsel for Lembke and 70 Ranch LLC that if the phrase “fee owner,” as that phrase is used in section 32-1-401(1)(a), is deemed to include lessees of severed mineral estates holding fee simple determinable interests, then deciding whether such owners are “fee owners” within the meaning of the statute could require a lengthy series of steps. For example, one might be required to pull the title (assuming the lease at issue is even recorded), review the lease to decide whether it intended to grant a fee simple determinable interest (as opposed to a mere leasehold), see whether the lease contains a reverter provision, interpret that provision, and, possibly, confer 8 with the lessor and lessee to decide whether the reverter provision has been triggered. Given that section 32-1-401(1)(a) appears to reflect a legislative goal of establishing a simple and expeditious process for certain property owners to include their properties in a special district, I am unwilling, without a clearer indication of legislative intent, to presume that the legislature intended the complex process that Lessees’ position could necessitate. Cf. §§ 32-1-102(2), (4), C.R.S. (2019) (providing that the procedures contained in part 2 of the Special District Act were necessary for the “coordinated and orderly creation of special districts and for the logical extension of special district services throughout the state,” and noting that “it is the policy of this state to provide for and encourage the consolidation of special districts and to provide the means therefor by simple procedures”). ¶45 For these reasons, I would conclude that a lessee of a mineral estate is not a “fee owner” for purposes of section 32-1-401(1)(a). D. Process For Including Real Property Into A Special District ¶46 Lessees further assert that the division erred in concluding that, because the severed mineral estates at issue are not “real property capable of being served with facilities of the special district” under section 32-1-401(1)(a), the owners of 70 Ranch could, by petition, join those severed mineral estates to the special district without giving notice to or obtaining the consent of the owners of those 9 interests. Bill Barrett Corp., ¶¶ 47, 49. I agree that the division misconstrued the statute in this regard. ¶47 As noted above, section 32-1-401(1)(a) provides, in pertinent part, that a special district’s boundaries “may be altered by the inclusion of additional real property by the fee owner or owners of one hundred percent of any real property capable of being served with facilities of the special district” filing a written petition requesting such inclusion. The statute further provides that this petition shall state, among other things, “that assent to the inclusion of such property in the special district is given by the fee owner or owners thereof.” Id. ¶48 The division began its analysis of these provisions by opining that “capable of being served with facilities of the special district” modifies “fee owner or owners of one hundred percent of any real property” and thus tells special districts which owners must petition. Bill Barrett Corp., ¶ 41. I agree with that determination. ¶49 The division went on to state, however, that the phrase “capable of being served with facilities of the special district” does not limit what property may be included, and because a severed mineral estate is not property capable of being served with facilities of the special district, owners of such estates need not petition for inclusion, or consent to being included, in the district. Id. at ¶¶ 41, 47. From this premise, the division opined that the failure of the 70 Ranch owners to show 10 in their petition for inclusion the consent of all severed mineral estate owners did not invalidate 70 Ranch’s inclusion within the boundaries of the District here and did not invalidate the District’s taxing authority. Id. at ¶ 49. The division thus affirmed the district court’s grant of summary judgment for respondents, in which that court had concluded that the severed mineral estates under 70 Ranch could be included within the District, notwithstanding the fact that the owners and lessees of those estates did not petition for or consent to inclusion. Id. In addition, the division determined that the lack of consent of the mineral estate owners did not preclude the District from taxing Lessees. Id. at ¶ 23. ¶50 In reaching these conclusions, the division appears to have determined that a fee owner can join to a special district the interests of either a non-fee owner or of certain other real property owners whose properties are not capable of being served by the facilities of the district, without notice or consent, merely by filing a petition. With respect, I do not agree with that construction of section 32-1-401(1)(a). ¶51 Unlike the division, I perceive nothing in section 32-1-401(1)(a) that would allow a fee owner of a surface estate to petition to include a third-party’s property interest in a special district. Nor do I read that statute as addressing how and when consent must be sought from third parties. 11 ¶52 In my view, section 32-1-401(1)(a) plainly states that the fee owner or owners of one hundred percent of any real property capable of being served with the facilities of a special district can petition to have their own properties included within the district. Thus, the statute speaks of such owners’ filing a petition in writing requesting that “such property” (i.e., their own property that is the subject of their petitions) be included. § 32-1-401(1)(a). The statute then goes on to require that the owners’ petition state that “assent to the inclusion of such property” is given by the petitioning owners. Id. To me, this means merely that the petitioning owners must verify in their petitions that they are consenting to the inclusion of their own properties, not the properties of others, in the special district. ¶53 In short, I understand section 32-1-401(1)(a) as establishing a simple and expeditious means by which certain real property owners can include their own properties, not the properties of others, in a special district. Indeed, a different subsection—subsection 32-1-401(2)—provides the means by which certain real property owners may petition for the inclusion of someone else’s property in a special district. ¶54 To conclude otherwise and to allow one property owner to include the property of another within a special district—without notice to or consent of that owner and when that owner’s property is not capable of being served by the facilities of the district—would, as Lessees contend, implicate significant due 12 process concerns. This is because the effect of such inclusion would be to tax one property owner in order to fund facilities to be provided to other property owners. See Landmark Towers Ass’n v. UMB Bank, N.A., 2018 COA 100, ¶ 28, 436 P.3d 1139, 1147 (concluding that the inclusion of certain properties in a special district for the sole purpose of taxing those properties to fund improvements on completely separate properties violated the included property owners’ rights to due process). ¶55 In this regard, I am not convinced by the 70 Ranch owners’ assertion (which the majority implicitly accepts, see maj. op. ¶ 23) that Lessees’ due process rights were protected because the owners provided appropriate notice by publication. As the owners conceded at oral argument, they gave notice of their petition to include their own property within the District. Their petition said nothing about including Lessees’ property in the District. Accordingly, even if Lessees were aware of the 70 Ranch owners’ notice by publication, I do not believe that this notice necessarily apprised Lessees that their own property interests were at issue. ¶56 For these reasons, answering the second question on which we granted certiorari in this case, I would conclude that section 32-1-401(1)(a) did not permit the owners of 70 Ranch to join, by petition, Lessees’ real property interests into the District, without notice or consent, merely because either Lessees were not fee owners or their interests were not capable of being served by the District. To the 13 contrary, I believe that the statute speaks only to the inclusion of the 70 Ranch owners’ own property interests here. ¶57 The question thus becomes whether, once 70 Ranch is included in the District, the District has the authority to impose ad valorem taxes on Lessees’ severed mineral interests, which lie beneath 70 Ranch and are therefore within the District’s geographic boundaries. This is an interesting question and one that is of substantial consequence to all of the parties now before us (and, more generally, to all persons and entities holding interests in severed mineral estates and to special districts throughout Colorado). This also seems to be the question that the majority ultimately answers in this case, although it does not say so directly and suggests that it is not opining on the issue. Compare maj. op. ¶ 25 with id. at ¶ 22. But the division below did not address this question, Lessees’ petition for a writ of certiorari did not ask us to consider it, we did not grant certiorari on it, and no party was given a full and fair opportunity to brief or argue it. Accordingly, I would leave this admittedly significant issue for another day, when the question is properly before us and the parties have had a full and fair opportunity to address it. II. Conclusion ¶58 For these reasons, addressing the two questions on which we granted certiorari, I would conclude that (1) a lessee of a severed mineral estate is not a 14 “fee owner” within the meaning of section 32-1-401(1)(a) and (2) that statute did not permit the owners of 70 Ranch to join, by petition, Lessees’ real property interests into the District, without notice or consent, merely because either the Lessees were not fee owners or their interests were not capable of being served by the District. I would leave for a case in which the question is properly presented the issue of whether a special district may tax a severed mineral estate lying beneath a surface estate that is included within, and that is within the geographical boundaries of, the special district. ¶59 Accordingly, I respectfully dissent. I am authorized to state that JUSTICE BOATRIGHT and JUSTICE SAMOUR join in this dissent. 15