Court Opinion

ID: 6339930
Source: CourtListenerOpinion
Date Created: 2022-05-12 15:02:44.505513+00
Date Added: 2024-06-11T15:49:13.452643
License: Public Domain

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
                                                                 May 12, 2022

                                2022COA51

No. 20CA2091, Overton v. Chess — Taxation — Property Tax —

Redemption — Limitation of Actions for Recovery of Land —

Improvements — Expenditures — Interest

     A division of the court of appeals considers from when interest

accrues for certain types of expenditures under section 39-12-101,

C.R.S. 2021. The division concludes that interest accrues from the

date each expenditure was made, except with respect to

improvements.
COLORADO COURT OF APPEALS                                           2022COA51

Court of Appeals No. 20CA2091
Fremont County District Court No. 17CV30126
Honorable Lynette M. Wenner, Judge

Charles F. Overton and Janet Overton,

Plaintiffs-Appellants and Cross-Appellees,

v.

Clarence Chess and James Erickson,

Defendants-Appellees and Cross-Appellants.

            JUDGMENT AFFIRMED IN PART, REVERSED IN PART,
                AND CASE REMANDED WITH DIRECTIONS

                                  Division VII
                          Opinion by JUDGE BERGER
                        Brown and Johnson, JJ., concur

                           Announced May 12, 2022

Law Office of Dan Slater, Daniel B. Slater, Cañon City, Colorado, for Plaintiffs-
Appellants and Cross-Appellees

David C. Conley, PC, David C. Conley, Colorado Springs, Colorado, for
Defendants-Appellees and Cross-Appellants
¶1    A treasurer’s deed may be issued to a tax lien purchaser when

 the owner of real property does not pay real estate taxes and does

 not redeem the property from the tax sale. When the original owner

 challenges the treasurer’s deed as improperly issued, section 39-12-

 101, C.R.S. 2021, governs the rights of the parties. If the issuance

 of the treasurer’s deed was statutorily insufficient, the original

 owner must reimburse the treasurer’s deed holder for certain

 expenditures plus interest. But section 39-12-101 does not specify

 from when that interest accrues for certain types of expenditures.

 This case requires us to decide that question.

¶2    Charles F. and Janet Overton (Overton) appeal the amount of

 interest that the district court awarded on certain expenditures in

 connection with an action to recover land under section 39-12-101.

 Clarence Chess and James Erickson (Chess) cross-appeal the

 court’s denial of a set-off for the value of an easement conveyed by

 Overton while Overton held title to the property.

¶3    The first question presented is whether interest accrues from

 the date each expenditure was made or only from the date that the

 court ascertains the reimbursement amount. We conclude that

 interest accrues from the date each expenditure was made, except

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 with respect to improvements. As to the second question, we

 conclude that the district court erred by finding that there was no

 evidence regarding diminution in value to the property because of

 the conveyance of the easement. We therefore affirm in part,

 reverse in part, and remand with directions.

             I.    Relevant Facts and Procedural History

¶4    The county treasurer conveyed a treasurer’s deed for real

 property to Overton after Chess, the original owner of the property,

 failed to pay real estate taxes. Chess challenged the validity of the

 treasurer’s deed because, he claimed, he had not been given the

 statutorily required notice before it was issued.

¶5    After a bench trial, the district court agreed and ordered the

 return of the property to Chess, subject to Chess reimbursing

 certain expenditures, as required by section 39-12-101. In

 determining that amount, the court rejected Chess’s request to

 offset the value of a utility easement on part of the property that

 Overton had conveyed to a third party.

¶6    Both parties filed post-trial motions. Overton filed a “Motion

 for Imposition of Interest,” requesting that the court assess interest

 “based on the date each expense was incurred.” Chess filed a

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  C.R.C.P. 59(a) motion, asking the court to “reconsider its ruling to

  not award any credit” for the value of the utility easement.

¶7     The court did not expressly rule on either motion. Chess’s

  Rule 59 motion was denied by operation of law when the court did

  not rule within the time prescribed by that rule. C.R.C.P. 59(j).

¶8     After the Rule 59(j) deadline, Chess filed a “Motion to Deposit

  Funds under Rule 67,” which requested permission to deposit into

  the court registry the principal amount previously determined by

  the court, plus interest running from the date the court ascertained

  that amount, in exchange for possession of the property.

¶9     Over Overton’s objection, the court granted Chess’s C.R.C.P.

  67 motion. Chess deposited the funds in accordance with the

  court’s order.

                            II.   Jurisdiction

¶ 10   Although not raised by either party, we first address our

  jurisdiction to consider this appeal because an “appellate court

  must always be satisfied that it has jurisdiction to hear an appeal.”

  Chavez v. Chavez, 2020 COA 70, ¶ 22.

¶ 11   This court has jurisdiction over final judgments entered by a

  district court. See C.A.R. 1(a)(1); § 13-4-102(1), C.R.S. 2021. “[A]

                                    3
  final judgment is ‘one that ends the particular action in which it is

  entered, leaving nothing further for the court pronouncing it to do

  in order to completely determine the rights of the parties involved in

  the proceedings.’” Chavez, ¶ 24 (citation omitted). Prejudgment

  interest is a component of damages and therefore must be

  addressed by the court before the judgment is final for appeal. Id.

  at ¶ 26.

¶ 12   The court’s initial order stated that “[Chess] shall make

  payment to [the Overtons] to compensate them for the

  improvements and expenses they incurred in the amount of

  $155,517.98 together with interest thereon at the rate of twelve

  percent per annum, by the person recovering said land to the

  persons.”

¶ 13   But the Rule 67 order authorized Chess to deposit the

  principal amount previously determined by the court together with

  interest that clearly was computed from the date of the court’s

  initial order. The court’s later grant of Chess’s Rule 67 motion,

  therefore, necessarily held that the interest accrued only from the

  ascertainment date, not the date the expenditures were made.

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¶ 14   Accordingly, the district court entered a final judgment and we

  have appellate jurisdiction.

                                 III.   Analysis

                                 A.     Interest

¶ 15   Overton contends that section 39-12-101 requires

  prejudgment interest and, more specifically, interest on

  reimbursement amounts accruing from the date of the

  expenditures. We agree as to all categories of expenditures except

  improvements.

¶ 16   The parties agree, as do we, that Overton preserved this claim

  for appeal. This claim presents a question of statutory

  interpretation, which we review de novo. See Nieto v. Clark’s Mkt.,

  Inc., 2021 CO 48, ¶ 12. When interpreting a statute, our aim is to

  effectuate the legislature’s intent, and we apply unambiguous

  statutes as written. Id.

¶ 17   If, however, a statute is ambiguous, “meaning it is silent or

  susceptible [of[ more than one reasonable interpretation,” we turn

  to extrinsic aids to discern the statute’s meaning. People v. Jones,

  2020 CO 45, ¶ 55. Those aids include the end to be achieved by

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  the statute, the language and structure of the statute, and any

  relevant legislative history. Id.; Nieto, ¶ 13.

¶ 18   “The right to interest, absent an agreement to pay it, is purely

  statutory and is limited to those circumstances set forth in the

  statute.” Indian Mountain Metro. Recreation & Park Dist. v. J.P.

  Campbell & Assocs., 921 P.2d 65, 66 (Colo. App. 1996). Similarly,

  the right to prejudgment interest is purely statutory. See id.

  Unless a statute authorizes prejudgment interest, a court has no

  authority to award it. Id.

¶ 19   Section 39-12-101 provides in relevant part that

             [w]hen a recovery of any of such land is
             effected in any suit, action, or proceeding, the
             value of all improvements made in good faith
             on such lands, and all sums paid for the tax
             lien on said land and for improvements, and
             all costs incident to the issuance and recording
             of the treasurer’s deed, and all taxes and
             assessments paid thereon after the sale of the
             tax lien thereof, including the redemption
             value of all tax sale certificates redeemed, held,
             or surrendered for redemption by the grantee
             in such treasurer’s deed or his heirs or
             assigns, shall be ascertained by the court or
             jury trying the action for recovery and shall be
             paid, together with interest thereon at the rate
             of twelve percent per annum, by the person
             recovering said land to the persons entitled
             thereto, and the payment of such sum shall be
             a condition precedent to the entry of judgment

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            or decree in such suit, action, or
            proceeding. . . . The term “improvements”
            includes sums and amounts of money
            expended thereon in good faith by the grantee
            and his successors and assigns in search of
            minerals and oil, as well as other expenditures
            for the improvements of such lands which add
            to the cost and value thereof.

  (Emphasis added.)

¶ 20   The plain language of section 39-12-101 authorizes at least

  some amount of prejudgment interest on all categories of

  expenditures listed in the statute because the reimbursement

  amount (including interest) must be paid before a court may enter a

  judgment or decree in the case.1

¶ 21   The plain language of section 39-12-101 is also clear that

  interest accrues from the date of ascertainment as to the

  improvements. The statute requires reimbursement of the value of

  the improvements. That value, as opposed to the amount paid for

  the improvements, is unliquidated and unknown until the trier of

  1While several other statutes authorize prejudgment interest in
  certain circumstances, Overton has not argued those statutes apply
  here. See, e.g., § 5-12-102(1)(a), C.R.S. 2021; § 13-21-101(1),
  C.R.S. 2021.

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  fact ascertains it.2 Therefore, because we aim to give effect to every

  word in a statute, interest on the improvements accrues only from

  the date the trier of fact ascertains the value of the improvements.

  See Nieto, ¶ 21.

¶ 22   But the statutory language does not specify an accrual date

  for the remaining categories of expenditures, which include the

  “sums” paid for the tax lien, the “costs” related to the treasurer’s

  deed, and “all taxes and assessments paid” after issuance of the tax

  lien. Unlike the “value” of improvements, those amounts are

  liquidated and known even before the trier of fact ascertains them.

¶ 23   As to those remaining categories, the statutory language does

  not answer the following question: Does interest accrue from the

  date each expenditure was paid by the grantee of the treasurer’s

  deed or from the date the court or jury ascertains the

  reimbursement amount?

  2 We reject Overton’s argument that the statute’s use of the word
  “expenditures” in the definition of “improvements” means that
  interest accrues from the date each improvement was made. The
  word “value” modifies the defined term “improvements.” For the
  same reason, we do not view the Colorado Supreme Court’s use of
  the word “expenditures” in White v. Widger, 144 Colo. 566, 573, 358
  P.2d 592, 596 (1960), as inconsistent with our reading of the
  statute.

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¶ 24   Section 39-12-101 is subject to more than one reasonable

  interpretation. One could reasonably conclude that interest

  accrues from the date that the court or jury ascertains the

  reimbursement amounts owed on categories other than

  improvements. On the other hand, one might also reasonably

  conclude that the interest accrues from the date each expenditure

  (other than improvements) is made by the grantee of the treasurer’s

  deed.

¶ 25   Because the statute is ambiguous, we turn to interpretive aids

  to answer the question. For two reasons, we conclude that the

  statute requires interest from the date each expenditure is made

  except as to the value of improvements.

¶ 26   First, the object to be obtained by the statute supports the

  reading that interest accrues from the date of these expenditures.

  The Colorado Supreme Court held that the purpose of a prior

  version of the statute was “protecting claimants under tax deeds.”

  Wood v. McCombe, 37 Colo. 174, 182, 86 P. 319, 321 (1906), aff’d

  sub nom. Elder v. Wood, 208 U.S. 226 (1908). Similarly, in Cripple

  Creek Trading & Mining Co. v. Stewart, the court held that the

  statute’s purpose

                                    9
            was to permit no delinquent whose land has
            been sold to cancel, because for some reason
            void, the deed issued thereon, and thus escape
            the tax. It evidently contemplates that he shall
            pay because the property and its tax burden
            were his and that burden has been discharged
            by another; and that he shall pay interest and
            penalties to discourage his failure to meet his
            obligation to the state, and encourage others to
            meet it in event of such failure.

  100 Colo. 271, 273, 67 P.2d 1032, 1033 (1937) (emphasis added).

  Assessing interest from the date each expenditure is made serves

  the purpose of protecting treasurer’s deed holders like Overton.

¶ 27   Second, a closely related statute also supports this reading. A

  property owner who redeems property from a tax lien purchaser

  must pay interest on costs “from the date of sale.” § 39-12-103(3),

  C.R.S. 2021. It would be anomalous to disallow that same interest

  to a lien purchaser in the next step of the statutory process.

¶ 28   For these reasons, we conclude section 39-12-101 requires

  interest on reimbursement amounts from the date of ascertainment

  as to the value of improvements and from the date each of the

  remaining expenditures were made. Other than the value of

  improvements, the court therefore erred by awarding interest only

  from the date it ascertained the amount of the expenditures.

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                               B.   Easement

¶ 29   On cross-appeal, Chess claims that the district court erred

  when it denied an offset for the value of the utility easement

  conveyed by Overton. We agree.

¶ 30   This issue was adequately preserved for appeal. We review the

  district court’s findings underlying its denial of relief for clear error

  and will not disturb such findings unless they find no support in

  the record. See Owners Ins. Co. v. Dakota Station II Condo. Ass’n,

  2021 COA 114, ¶ 50.

¶ 31   “An easement is a right conferred by grant, prescription or

  necessity authorizing one to do or maintain something on the land

  of another ‘which, although a benefit to the land of the former, may

  be a burden on the land of the latter.’” Lazy Dog Ranch v. Telluray

  Ranch Corp., 965 P.2d 1229, 1234 (Colo. 1998) (citation omitted).

¶ 32   The court’s initial order stated,

             No credit is awarded against the total amount
             for the funds received from the Black Hills
             Easement since [the Overtons] were the known
             legal owners of the property at the time they
             entered into the agreement. No evidence was
             presented showing there was a negative impact
             on the value of the property as a result of this
             separate agreement between Black Hills and
             [the Overtons].

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¶ 33   The record, however, contained the offer letter from the utility

  for the easement and the easement deed itself. The offer letter

  stated that the utility would “pay the fair market value for the land

  rights to be acquired and has retained the services of an

  independent appraiser, to provide salient comparable sales data

  that serves as the basis for determining the fair market value for

  the land rights to be acquired.” The easement deed stated it

  granted the right to “enter upon the lands” and that it “shall run

  with the land.”

¶ 34   The offer letter and related easement deed supplied at least

  some evidence of the value of the easement and, thus, some

  evidence of diminution in value of the entire parcel. The court’s

  conclusion that there was no evidence regarding the property value

  was therefore clearly erroneous.

¶ 35   Janet Overton, an owner of the property at the time of trial,

  testified that there already was an electric line on the property and

  that she did not believe the easement reduced the property value.

  Because there was some evidence on both sides of this disputed

  question, the district court was required to resolve the disputed

                                     12
  facts. We must remand for additional findings and conclusions

  because the court did not do so.

                            IV.   Disposition

¶ 36   The court’s judgment requiring Chess to pay interest on the

  value of the improvements from the date the court ascertained the

  reimbursement amount is affirmed. The court’s judgment requiring

  Chess to pay interest on all other categories of expenditures from

  the date the court ascertained the reimbursement amount is

  reversed. That part of the judgment that denied an offset for the

  value of the conveyed easement is also reversed.

¶ 37   The case is remanded for two purposes. First, the district

  court must ascertain the amount of interest accruing from the date

  expenditures other than improvements were made. Second, the

  court must make findings and conclusions on the value, if any, of

  the easement and enter judgment accordingly.

       JUDGE BROWN and JUDGE JOHNSON concur.

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