HDH Partnership v. Hinsdale County Board of Equalization

COLORADO COURT OF APPEALS 2017COA134

Court of Appeals No. 16CA1723
Board of Assessment Appeals, State of Colorado Case Nos. 68337, 68338,
68339 & 68340

HDH Partnership; Lawrence Ausherman; Mark L. Ish; Herb Marchman;
Hondros Family Real Estate, LLC; and Teresa M. Mull Revocable Trust,

Petitioners-Appellants,

v.

Hinsdale County Board of Equalization,

Respondent-Appellee

and

Board of Assessment Appeals, State of Colorado,

Appellee.

ORDER REVERSED AND CASE
REMANDED WITH DIRECTIONS

Division IV
Opinion by JUDGE GRAHAM
Booras and Dunn, JJ., concur

Announced October 19, 2017

Hoskin Farina & Kampf, P.C., Michael J. Russel, Andrew H. Teske, Karoline M.
Henning, Grand Junction, Colorado, for Petitioners-Appellants

Schumacher & O’Loughlin, LLC, Michael P. O’Loughlin, Gunnison, Colorado,
for Respondent-Appellee

Cynthia H. Coffman, Attorney General, Krista Maher, Assistant Attorney
General, Denver, Colorado, for Appellee
¶1 In this case we are tasked with determining whether owners of

fishing and hunting memberships, HDH Partnership, Lawrence

Ausherman, Mark L. Ish, Herb Marchman, Hondros Family Real

Estate, LLC, and Teresa M. Mull Revocable Trust, may be taxed for

the parcels of real estate allocated to them in their membership

agreements.

¶2 The parcels are part of a larger tract of land used as a hunting

and fishing club in southwestern Colorado. Membership in the

club is granted to those who hold a deed to one of the parcels which

collectively comprise the club grounds. Members cannot make

improvements on their parcels or exclude other club members.

Instead, the club retains control over the grounds and grants all

members equal access, regardless of the parcel to which they hold

title. A member’s rights to access the grounds can be revoked if he

or she owes money or violates club rules.

¶3 On these facts, we conclude that the club is the true property

owner because it enjoys the most significant incidents of ownership

while members effectively have a license to use club grounds,

notwithstanding that they hold bare legal title to the parcels.

1
 Therefore, the club, not the members should bear the real property

tax burden.

I. Background

A. The Lake Fork Hunting and Fishing Club

¶4 In 1979, the Lake Fork Hunting and Fishing Club (the Club)

was formed. A declaration transferred 1400 acres of land to the

Club, divided into twenty-nine parcels, known as “Ranches.”

Except for a single “Floating Membership” that is not tied to a

Ranch, the only way to obtain membership in the Club is to hold

title to part of a Ranch. Membership cannot be “sold, assigned or

transferred, voluntarily or by will or by operation of law.” Instead,

“[w]henever a member . . . cease[s] to own the interest in the real

property which entitles him to such membership . . . such member

shall automatically be dropped from the membership rolls of the

Club and the membership certificate [is transferred] to the new

ranch owner.” In other words, club membership cannot be severed

from the deed, but instead follows record title to a Ranch.

¶5 The Club reserves the following rights:

2
  “exclusive hunting and fishing rights and privileges

including all rights of ingress and egress upon and

across the entire property, including all Ranches”;

 “exclusive right to construct and maintain over, across

and upon each Ranch . . . utilities, roads, lakes, ditches,

bridges and fences”;

 “exclusive right to pasture livestock on the entire

property, including each individual Ranch”;

 “the right to impound, store, and divert the waters of the

Lake Fork of the Gunnison river over, across and upon

each Ranch”; and

 the rights to “easements and rights of way incident to

and necessary to maintain . . . the existing skeet and trap

field, the existing golf driving range and the existing

airport runway.”

Members are prohibited from

 subdividing the Ranches;

 building within one hundred feet of the river;

 placing trailers or mobile homes on the Ranches; or

3
  conducting any mining or drilling activities.

Initially, members were barred from building more than three

residences on any Ranch, but, in 1999, the declaration was

amended to prohibit the construction of any residence on a Ranch.

¶6 The Club’s bylaws limit the number of guests a member may

bring to the Club for hunting or fishing and the number of days an

individual guest may hunt or fish. Members must register

themselves and their guests when using Club grounds, and their

hunting and fishing activities are subject to detailed Club

regulations. The Club is entitled to all revenues from fees charged

for hunting, fishing, shooting, and other activities on the grounds.

¶7 Only “members in good standing” are permitted to access Club

grounds, which are defined as “all property owned by Lake Fork

Hunting and Fishing Club including all ranches by virtue of the

ownership of which persons are entitled to membership in the Lake

Fork Hunting and Fishing Club.” Members who have unpaid

assessments or other outstanding fees “shall not be entitled to the

privileges of the Club.” And the Board of Governors may “censure[],

fine[], or have all privileges suspended . . . for violation of the

Declaration . . . , By-Laws, Rules or Regulations . . . or for any

4
 conduct which in the opinion of the Board, is improper or

prejudicial to the welfare of or reputation of the Club.”

B. Procedural History

¶8 Each of the petitioners in this case holds membership in the

Club by virtue of a deed conferring record title to a Ranch or part of

a Ranch. They initiated this action after they disagreed with the

Hinsdale County Assessor’s 2015 assessment of those parcels.

They argued that the Assessor should not have assessed property

taxes to them individually because, although they are the record

title holders, they do not actually enjoy traditional incidents of

ownership, which are instead retained by the Club. The Club, they

said, is the true property owner and therefore it should have

received the property tax assessment. Petitioners also argued that

the Assessor failed to account for the personal property value of the

Ranch deeds. The value of the deeds, they claimed, was not in the

land but in the club membership that the deed granted —

membership which constitutes a personal property interest not

subject to real property taxation.

¶9 The Hinsdale County Board of Equalization (BOE) agreed with

the Assessor that petitioners were the parcel owners and affirmed

5
 the Assessor’s valuation. Petitioners appealed to the Board of

Assessment Appeals (BAA), which agreed with the BOE and

affirmed its decision. Petitioners then filed this appeal.

¶ 10 Because we agree with petitioners that the Club is the true

owner of the parcels, we conclude that the BAA erred as a matter of

law in assessing real property taxes to petitioners. We also

conclude that the BAA erred in affirming the Assessor’s valuation,

because it was based on the personal property value of petitioners’

licenses to use Club grounds, rather than the value of the parcels

as real property. Accordingly, we reverse the BAA’s order and

remand for further proceedings consistent with this opinion.

II. To Whom Should the Real Property Taxes be Assessed?

¶ 11 We must first answer the following question: Who is the true

owner of the Ranches who should be assessed taxes for them? We

agree with petitioners that bare legal title is not determinative, and,

instead, we must look beyond the legal form to the substance of the

parties’ respective rights. We also agree that, based on petitioners’

and the Club’s respective rights, petitioners hold mere licenses to

use Club grounds, while the Club retains the most significant

6
 traditional incidents of ownership. Therefore, we conclude that the

Club, as the true owner, should have been assessed the taxes.

A. Standard of Review

¶ 12 We review decisions of the BAA as a mixed question of fact and

law. See Cantina Grill, JV v. City & Cty. of Denver Bd. of

Equalization, 2015 CO 15, ¶ 15. We defer to the BAA’s factual

findings unless they are unsupported by competent evidence in the

record, but we interpret the tax statutes de novo, and apply those

interpretations to the facts to reach our own legal conclusions.

Roaring Fork Club, LLC v. Pitkin Cty. Bd. of Equalization, 2013 COA

167, ¶ 21; see also §§ 24-4-106(7), (11), 39-8-108(2), C.R.S. 2017;

Cantina Grill, ¶ 15.

¶ 13 Whether something is “an interest in property that can be

valued and is subject to property tax” is a question of law. Roaring

Fork, ¶ 26.

¶ 14 When interpreting statutes, we give the words their ordinary

and common meanings and interpret the provisions as a whole,

giving effect to all parts. Bd. of Cty. Comm’rs v. Vail Assocs., Inc., 19

P.3d 1263, 1273 (Colo. 2001).

7
 B. We Must Look Beyond Bare Legal Title to Determine
Ownership

¶ 15 The BOE insists that the Assessor was obligated to assess

taxes to the record title holders (petitioners) and that we may not

look beyond bare legal title when determining ownership for tax

purposes.1 Petitioners disagree, arguing that the law permits us to

look beyond the title to the substance of the parties’ rights when

determining ownership. We agree with petitioners. Their position

finds support in statute and case law.

1. Record Title is Not Conclusive Under Colorado’s Tax Statutes

¶ 16 First, reading the tax statutes as a whole, we conclude that

record title is not conclusive evidence of property ownership. It is

true that assessors are directed to ascertain real property

ownership “from the records of the county clerk and recorder.”

§ 39-5-102(1), C.R.S. 2017. But those records are merely “prima

facie evidence of all things appearing therein.” § 39-1-115, C.R.S.

2017. Prima facie means “[a]t first sight; on first appearance but

subject to further evidence or information.” Black’s Law Dictionary

1The BAA acknowledges that we may look past the form to the
substance of the parties’ rights but contends that petitioners retain
sufficient rights such that they are the true parcel owners.
8
 1382 (10th ed. 2014). And section 39-5-122(2), C.R.S. 2017,

provides that “[i]f any person is of the opinion that . . . property has

been erroneously assessed to such person, he or she may appear

before the assessor and object.” Therefore, while record title is

evidence of property ownership, it merely creates a rebuttable

presumption, not a conclusive determination.

¶ 17 We are also unpersuaded that section 39-5-104, C.R.S. 2017,

required the Assessor to tax the individual deed holders. “Each

tract or parcel of land . . . shall be separately appraised and valued,

except when two or more adjoining tracts, parcels, or lots are owned

by the same person, in which case the same may be appraised and

valued either separately or collectively.” § 39-5-104. The BOE

argues that this requirement for individual parcel valuation

required the Assessor to assess taxes to the individual record title

holders. While this provision requires valuation of individual

owners’ parcels, it is silent on how ownership is determined. Thus,

it does not affect our conclusion that the tax statutes permit us to

look beyond bare legal title.

9
 2. Case Law Supports Looking Past Bare Legal Title to Determine
Ownership for Tax Purposes

¶ 18 Furthermore, case law illustrates that property ownership is

not necessarily determined by record title. Instead, we must look

beyond “form[s] and labels” to determine “real ownership.” Mesa

Verde Co. v. Bd. of Cty. Comm’rs, 178 Colo. 49, 54, 495 P.2d 229,

232 (1972); Gunnison Cty. v. Bd. of Assessment Appeals, 693 P.2d

400, 404 (Colo. App. 1984) (“Record title alone . . . is not

determinative.”).

“[T]axation is not so much concerned with the
refinements of title as it is with actual
command over the property taxed . . . .” In a
number of cases, the Court has refused to
permit the transfer of formal legal title to shift
the incidence of taxation attributable to
ownership of property where the transferor
continues to retain significant control over the
property transferred. In applying this doctrine
of substance over form, the Court has looked
to the objective economic realities of a
transaction rather than to the particular form
the parties employed. The Court has never
regarded “the simple expedient of drawing up
papers,” as controlling for tax purposes when
the objective economic realities are to the
contrary. “In the field of taxation,
administrators of the laws and the courts are
concerned with substance and realities, and
formal written documents are not rigidly
binding.”

10
 City of Golden v. Aramark Educ. Servs., LLC, 2013 COA 45, ¶ 31

(alteration in original) (quoting Frank Lyon Co. v. United States, 435

U.S. 561, 572-73 (1978)).

¶ 19 This principle has been applied to tax cases in Colorado in the

following situations:

 evaluating disputes over whether property is taxable, see

Cantina Grill, ¶¶ 5-73 (looking past form to determine

that Denver International Airport concessionaires’

possessory property interests were not tax exempt even

though city held legal title); Mesa Verde, 178 Colo. at 53-

57, 495 P.2d at 231-33 (looking beyond bare legal title to

determine that concessionaire on national park property

owned improvements thereon); Gunnison Cty., 693 P.2d

at 404 (applying substance over form doctrine to

determine that jail which county sold and leased back

from a private entity was tax exempt county property);

 deciding if a contract conveyed a real property interest,

see Vill. at Treehouse, Inc. v. Prop. Tax Adm’r, 2014 COA

6, ¶¶ 8-30 (holding that assignment of rights to develop

condominium units constituted taxable real property
11
 rights, notwithstanding that transferor retained rights in

the common elements); Bernhardt v. Hemphill, 878 P.2d

107, 112-13 (Colo. App. 1994) (holding that time share

contract did not create real property interest);

 analyzing whether a contract created tax exempt or

taxable sales, cf. Aramark, ¶¶ 31-35 (explaining that

substance over form doctrine supported argument that

contract created retail sales but ultimately deciding case

based on presumption against tax exemption) (citing

Frank Lyon, 435 U.S. at 572-73); and

 determining whether a golf club membership, nominally

a personal property interest, was actually taxable as real

property, Roaring Fork, ¶¶ 31-46 (holding that

memberships were merely licenses, not leaseholds

taxable as real property).

¶ 20 Nothing in the law suggests that this doctrine cannot also be

applied to the question of who is the true owner of real property and

should therefore be assessed taxes. In fact, there is strong support

for applying the doctrine here. See Frank Lyon, 435 U.S. at 573;

Mesa Verde, 178 Colo. at 57, 495 P.2d at 233 (“[W]here a party has
12
 the right to possession, use, enjoyment, and profits of the property,

that party should not be permitted to use the bare legal title . . . to

avoid his fair and just share of state taxation.”); Gunnison Cty., 693

P.2d at 404 (“The nature of a transaction is not controlled by its

legal characterization; rather, it is the intention of the parties which

determines the essence of the transaction, and the facts of each

case demonstrate the parties’ intention.”).

C. Applying the Substance Over Form Doctrine Reveals That the
Club is the True Owner

¶ 21 Having concluded that we may look past bare legal title to

determine ownership, we must now examine the substance of

petitioners’ and the Club’s rights to decide who is the true owner of

the real property. Because the Club has a high degree of control

over the grounds, and petitioners may only use the grounds equally

with other club members and subject to the Club’s control and

regulation, we conclude that the Club is the true owner while

petitioners’ rights are akin to a mere license.

¶ 22 “Property rights in a physical thing have been described as the

rights ‘to possess, use and dispose of it.’” Loretto v. Teleprompter

Manhatten CATV Corp., 458 U.S. 419, 435 (1982) (quoting United

13
 States v. Gen. Motors Corp., 323 U.S. 373, 378 (1945)). The right to

possess property connotes the right to control it. See Cantina Grill,

¶ 1 n.1 (Possessory interest is defined as “[t]he present right to

control property, including the right to exclude others”[;] “a physical

relation to the land of a kind which gives a certain degree of

physical control over the land, and an intent so to exercise such

control as to exclude other members of society in general from any

present occupation of the land.” (first quoting Black’s Law

Dictionary 1353 (10th ed. 2014); then quoting Restatement (First) of

Property § 7 (1936))). The power “to exclude others . . . has

‘traditionally been considered one of the most treasured strands in

an owner’s bundle of property rights.’” Aspen Springs Metro. Dist. v.

Keno, 2015 COA 97, ¶ 9 (quoting Loretto, 458 U.S. at 435). Other

real property ownership rights include the right to develop the

property, see Vill. at Treehouse, ¶ 22, and the right to income from

the property, McDonald v. McDonald, 150 Colo. 492, 494, 374 P.2d

690, 691 (1962); see also Mesa Verde, 178 Colo. at 57, 495 P.2d at

233.

¶ 23 By contrast, “[a] license is a personal privilege to do some act

or series of acts upon the land of another not involving possession

14
 of an estate or interest therein.” Roaring Fork, ¶ 41 (quoting Welsch

v. Smith, 113 P.3d 1284, 1289 (Colo. App. 2005)).

¶ 24 In applying these rules to the facts here, Roaring Fork is

instructive. In that case, a division of this court concluded that a

golf club membership was not a leasehold but a license. Id. at

¶¶ 36-37. The club’s members had “a personal privilege to perform

any of a series of acts on the club’s property, including playing golf,

fishing, dining, or working out at the fitness facility.” Id. at ¶ 41.

But, members were not entitled to “possession of the property . . .

[or] exclusive use or occupation of it,” could not receive rents or

profits from the club’s property, and could not “exclude any others

from the club’s property who would use it in the same way.” Id. at

¶¶ 37, 40 (citation omitted). Furthermore, “memberships can be

revoked for . . . nonpayment of dues or violation of the club’s rules

and regulations.” Id. at ¶ 41.

¶ 25 Although the memberships here are conveyed by deed, the

rights they convey are strikingly similar to those in Roaring Fork.

Members do not have possessory rights to the parcels for which

they hold record title; they can only access them equally with other

club members. They have no power to exclude other club members

15
 from the parcels to which they hold title and are limited in the

number of guests they may bring onto the grounds. Members

cannot profit from mining, drilling, or pasturing livestock on their

parcels and are not entitled to revenues collected by the Club from

use of the property. Members also lack control over improvements

to the property. And members’ rights to access Club grounds may

be revoked if they do not pay their assessments and fees or if they

violate Club rules.

¶ 26 Meanwhile, the Club enjoys most of the traditional benefits of

real property ownership, including the rights to exclude

nonmembers or members not in good standing, to erect or remove

improvements, to control the river and its waters, and to profit from

the land by pasturing livestock, conducting mining or drilling

activities, and charging fees to members. Given the extent of the

Club’s control over the property, we conclude that, while the

members hold bare legal title to the parcels, the Club is the true

owner. See Frank Lyon, 435 U.S. at 573; Mesa Verde, 178 Colo. at

57, 495 P.2d at 233 (“[W]here all the evidence indicate[d] that the

most significant incidents of ownership [were] possessed by [a

private party], it would be an especially unjust result to allow [that

16
 party] to escape state taxation.”); Gunnison Cty., 693 P.2d at 404

(The county “retained sufficient control of the property to render it

tax exempt” where it “occupie[d] and control[led] the property,

control[led] construction and improvements of the property, [and]

maintain[ed] and insure[d] the property.”).

¶ 27 Accordingly, we agree with petitioners that the BAA erred as a

matter of law in holding that petitioners were the real property

owners.

D. Appellees’ Other Arguments Regarding Ownership Are
Unavailing

¶ 28 We find the BOE’s and BAA’s remaining arguments on this

issue unpersuasive for the following reasons.

1. Petitioners Benefit From Holding Restrictive Deeds

¶ 29 The BOE argues that the substance over form doctrine is

inapplicable here because “[petitioners’] statements throughout

their Opening Brief make it sound like the Club’s owners have no

rights or privileges by having an ownership interest in a [Ranch] . . .

[but] the owners enjoy many outdoor recreational benefits by

owning a parcel.” Relatedly, the BOE and BAA argue that the

limitations on petitioners’ property rights are merely restrictive

17
 covenants from which they benefit through the preservation of the

Club as an undeveloped hunting and fishing area for use by all

members.

¶ 30 We are unpersuaded by these contentions because they

conflate any benefit with benefits incident to ownership. See Radke

v. Union Pac. Ry. Co., 138 Colo. 189, 198-99, 334 P.2d 1077, 1082

(1959) (explaining the difference between language granting title to

mineral reserves and language granting mere license to remove

minerals from land). While it is undoubtedly true that petitioners

benefit from holding deeds to Club Ranches, and that they even

benefit from the deed restrictions, which protect their ability to

access the whole undeveloped grounds for hunting and fishing,

those rights nevertheless amount to mere license to use Club

property, not fee ownership.

2. Petitioners Control Their Properties Through the Club

¶ 31 The BOE and BAA also argue that petitioners retain sufficient

control to remain fee owners through the Board of Governors (the

Board). We find no legal support for this contention.

¶ 32 An association that represents a group of individuals is not

equivalent to each individual exercising control over his or her

18
 property. See Clubhouse at Fairway Pines, L.L.C. v. Fairway Pines

Estates Owners Ass’n, 214 P.3d 451, 456-57 (Colo. App. 2008)

(holding that common interest community association did not

adequately represent the interests of individual owners, who may

hold differing opinions from one another and from the association

itself); Dunne v. Shenandoah Homeowners Ass’n, Inc., 12 P.3d 340,

344-45 (Colo. App. 2000) (same). While petitioners have some

ability to participate in management of the land by exercising their

voting rights or running for a seat on the Board, this is hardly the

same as exercising exclusive control over one’s own property.

¶ 33 This argument would also require us to disregard the Club’s

corporate form. Governance through a separate corporate entity is

not merely a legal nicety; it is substantively different than individual

control over property or even collective governance under a different

ownership structure. For example, in Reishus v. Bullmasters, LLC,

2016 COA 82, a division of this court considered a claim related to

a piece of land similarly designated for hunting purposes. See id. at

¶ 12. But in that case, the structure of the ownership was a

tenancy in common, and the individual owners governed by a

simple majority vote. Id. at ¶¶ 3-12. The practical effect was that

19
 those owners had a greater degree of control over the collective use

of the property than these club members, who only vote for

representatives to govern the property on behalf of the Club.2

¶ 34 Ultimately, the influence petitioners have over Club

governance of the land is simply not sufficient control to say that

they retain any significant incidents of fee ownership.

3. Possibility of Future Changes to the Declaration

¶ 35 Next, to the extent the BOE and BAA suggest that the Club

could change the declaration, bylaws, and other regulations that

deprive petitioners of significant incidents of ownership, we decide

assessment controversies based on current realities, not future

possibilities. See Padre Resort, Inc. v. Jefferson Cty. Bd. of

Equalization, 30 P.3d 813, 815-16 (Colo. App. 2001) (holding that

assessor was correct to disregard hotel rooms under construction

when valuing property because “economic conditions existing

outside the base period may not be considered in arriving at the

taxable value of property”); see also Vail Assocs., 19 P.3d at 1280

(holding that ski resort held taxable possessory property interest,

2 The members can engage in direct governance only by amending
the Club declaration by a vote of 75% of members.
20
 notwithstanding that its interest only extended to the year 2031);

Mesa Verde, 178 Colo. at 57, 495 P.2d at 233 (“It would be a very

harsh doctrine that would deny the right of the states to tax lands

because of a mere possibility that they might lapse to the United

States (for failure to fulfill certain contractual obligations).” (quoting

Balt. Shipbuilding & Dry Dock Co. v. City of Baltimore, 195 U.S. 375,

382 (1904))). Thus, whether petitioners might be accorded more

control of the parcels in the future does not change our present

analysis.

4. Petitioners Retain the Right to Sell Their Interests

¶ 36 The BOE and BAA also assert that petitioners are the real

property owners because they retain the right to sell their parcels.

We disagree. The right to sell is not dispositive. See Loretto, 458

U.S. at 436 (“[E]ven though the owner may retain the bare legal

right to dispose of the occupied space by transfer or sale, the

permanent occupation of that space by a stranger will ordinarily

empty the right of any value, since the purchaser will also be

unable to make any use of the property.”). And while petitioners

retain the right to sell the deeds to their parcels, the substance of

21
 the rights bought and sold is merely license to use the Club

grounds, not interest in the land.

¶ 37 To be sure, the alienability of these deeds is unusual.

Licenses are typically revocable, unassignable personal privileges

that terminate upon transfer of the land. See Radke, 138 Colo. at

207-08, 334 P.2d at 1086-87; Vill. at Treehouse, ¶ 19; Lehman v.

Williamson, 35 Colo. App. 372, 375, 533 P.2d 63, 65 (1975). But

those characteristics are not necessary for a license. See Radke,

138 Colo. at 208-09, 334 P.2d at 1087; Roaring Fork, ¶ 11. So,

while the use of a deed to convey these licenses is unusual, it does

not change the substance of the rights bought and sold. See Dep’t

of Commerce v. Carriage House Assocs., 585 P.2d 1337, 1339 (Nev.

1978) (observing that “vacation licenses,” which gave holders the

right to occupy resort units for a short time, were “an anomaly [that

do not] fit neatly into any nice legal terminology,” but concluding

that they were more akin to contract rights than real property

interests).

¶ 38 Accordingly, we reject the contention that the ability to sell a

Ranch deed means that the deed conveys a real property interest in

the parcel.

22
 5. CCIOA

¶ 39 The BOE also argues that the Colorado Common Interest

Ownership Act (CCIOA) required the Assessor to assess the parcels

individually. We need not address this contention because the

provision on which the BOE relies does not apply to the Club.

Section 38-33.3-105(2), C.R.S. 2017, applies only to common

interest communities created after June 30, 1992, unless they have

elected CCIOA treatment. §§ 38-33.3-115, -117, -118, C.R.S. 2017.

The Club was created in 1979 and has not elected CCIOA

treatment.

6. Unit Assessment Rule

¶ 40 The BOE and BAA next contend that the unit assessment rule

requires taxes to be assessed to the individual members. We do not

perceive the unit assessment rule as applicable here.

¶ 41 “The unit assessment rule requires that all estates in a unit of

real property be assessed together, and that the real estate as an

entirety be assessed to the owner of the fee free of the ownerships of

lesser estates such as leasehold interests.” Vill. at Treehouse, ¶ 32

(citing City & Cty. of Denver v. Bd. of Assessment Appeals, 848 P.2d

355, 358 (Colo. 1993)).

23
¶ 42 The unit assessment rule is not implicated in this case

because petitioners are not asking for the taxes to be split between

them and the Club. See City & Cty. of Denver, 848 P.2d at 359 (The

unit assessment rule “prohibits multiple assessments on multiple

taxpayers holding disparate interests in a single piece of property.”).

Instead, they ask us to recognize the Club as the true property

owner, despite the legal form. Looking beyond the form to the

substance of the parties’ rights does not require us to divide the tax

allocation.

7. Absent Members

¶ 43 The BOE and BAA further contend that petitioners’ arguments

were properly rejected because all club members were not joined in

the action. We disagree.

¶ 44 First, we are not convinced that the members’ owners were

necessary or indispensable parties under C.R.C.P. 19. A party is

indispensable if the absent “person’s interest in the subject matter

of the litigation [is] such that no decree can be entered in the case

which will do justice between the parties actually before the court

without injuriously affecting the right of such person[.]” Woodco v.

Lindahl, 152 Colo. 49, 54-55, 380 P.2d 234, 238 (1963). Here,

24
 petitioners challenge the tax assessments on four parcels of land to

which they hold bare legal title. Other club members’ assessments

are not at issue. Hence, we fail to see how a decision will

injuriously affect the absent members.

¶ 45 But, even if the absent club members were indispensable

parties, affirming the order would not be the appropriate remedy.

The BOE and BAA did not move to join the absent owners or to

dismiss the action for failure to join indispensable parties. Instead,

they argue that relief should be denied to petitioners on the merits

because the other members were not party to the suit. This is not

how C.R.C.P. 19 works. See Fairway Pines, 214 P.3d at 454 (The

indispensable party rule “does not mean that ‘a party with the

necessary information to make a motion for joinder of an

indispensable party at his disposal can sit back and raise it at any

time in the proceedings, when the only effect . . . would be to

protect himself.’”) (alteration in original) (citation omitted); see also

Durango & Silverton Narrow Gauge R.R. Co. v. Wolf, 2013 COA 118,

¶ 26 (The trial court did not err in issuing summary judgment for

plaintiff “where [the defendant] did not move for joinder [of parties

he argued were indispensable], but simply raised the issue in his

25
 summary judgment motion.”). If the absent club members were

indispensable, their absence would require a remand for joinder or

dismissal, not affirmation of the order on the merits. See Fairway

Pines, 214 P.3d at 457 (explaining that proper remedy for failure to

join an indispensable party is to join the absent party); Frazier v.

Carter, 166 P.3d 193, 196 (Colo. App. 2007) (holding that

indispensable party’s absence “prevent[ed] final resolution of the

issues raised” on appeal, and remedy was remand to trial court

where the plaintiff would have opportunity to join the absent party).

III. How Should the Property Value Be Calculated?

¶ 46 Finally, we agree with petitioners that the Assessor improperly

valued the parcels, and that the BAA abused its discretion in

affirming that valuation.

A. Standard of Review and Applicable Law

¶ 47 “An assessor’s valuation of property for taxation is presumed

to be correct.” Cantina Grill, ¶ 15. The taxpayer bears the burden

of rebutting that presumption by a preponderance of the evidence.

Roaring Fork, ¶ 20. We will set aside a decision by the BAA only if

there is no competent evidence in the record to support the decision

or “the decision reflects a failure to abide by the statutory scheme

26
 for calculating property tax assessments.” CTS Invs., LLC v.

Garfield Cty. Bd. of Equalization, 2013 COA 30, ¶ 59.

¶ 48 Assessors are directed to value property “by appropriate

consideration of the cost approach, the market approach, and the

income approach to appraisal.” Id. at ¶ 27 (quoting § 39-1-

103(5)(a), C.R.S. 2017). “The market approach, or comparable sales

method, involves an analysis of sales of comparable properties in

the market.” City & Cty. of Denver, 848 P.2d at 357 n.3. “The

assessor is required to use sales of real property only in the

valuation process.” 3 Div. of Prop. Taxation, Dep’t of Local Affairs,

Assessor’s Reference Library § 3, at 3.4 (rev. July 2017) (citing § 39-

1-103, C.R.S. 2017).

B. Analysis

¶ 49 Because we have concluded that the Club is the true property

owner and individual members hold only a license to use Club

grounds, we are compelled to conclude that the Assessor’s valuation

violated the statutory scheme for calculating property tax

assessments. Specifically, the Assessor improperly valued the

parcels based on sales of personal property (the members’ licenses),

not comparable real properties.

27
¶ 50 The Assessor calculated the value of the individual Ranches by

using sales of deeds to other Club parcels in the past few years.

But, as we have explained, those deeds conveyed only a license to

use the Club grounds — a personal property interest. Because the

value of those sales reflected the value of the personal property

conveyed rather than land, the Assessor should not have used them

as “comparable sales” in determining the value of the parcels, and

the BOE and BAA should not have affirmed that valuation.

IV. Conclusion

¶ 51 We reverse the order of the BAA. On remand, petitioners’

parcels3 should be reassessed as fractions of the Club grounds as a

whole, rather than based on the personal property value of the

members’ licenses to use the Club. The new assessments should be

issued to the Club, not to the individual record holders.

JUDGE BOORAS and JUDGE DUNN concur.

3 Because the BOE and BAA raised the issue of absent Club
members, we clarify that only petitioners’ parcels need to be
reassessed. Resolution of petitioners’ challenges to their own 2015
assessments does not require us to address the assessments of any
other club ranches.
28