Bill Barrett Corp. v. Sand Hills Metropolitan District
2016 COA 144
| Colo. Ct. App. | 2016Background
- Sand Hills Metropolitan District (originally Altamira Metro Dist. No. 6) was organized in 2004 to serve a planned Altamira development inside the Town of Lochbuie; that development was never built.
- In 2009 the district’s board approved inclusion of 70 Ranch (13,000 acres in unincorporated Weld County); Weld County commissioners were not given notice or asked to approve. The district began taxing mineral lessees at 70 Ranch in 2009.
- In 2011 the district excluded all Lochbuie land and thereby shifted its territory to encompass only 70 Ranch; the district did not obtain Weld County approval for that material change.
- The district prepared a revised service plan in 2013 reflecting a new regional water/infrastructure focus and the geographic relocation; Lochbuie’s board purported to approve the 2013 plan, but Weld County did not.
- Taxpayers (Bill Barrett, Bonanza Creek, and involuntary plaintiff Noble Energy) sued, seeking refunds and asserting the district exceeded statutory authority under the Special District Act; trial court granted partial summary judgment for Taxpayers as to actions after April 28, 2011, and for Sand Hills as to April 29, 2009–April 28, 2011.
- The Court of Appeals affirmed that the 2011 shift and altered purpose were material modifications requiring Weld County approval (which was not obtained), reversed the trial court as to the 2009–2011 period, and remanded with directions regarding preserved funds and relief for similarly situated Noble.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district lost taxing authority after the 2011 exclusion that left only 70 Ranch in Weld County | 2011 geographic shift and change of purpose were material modifications to the 2004 service plan requiring Weld County approval; absent approval, the district had no authority to tax after April 28, 2011 | Exclusion/inclusion cannot impair the district’s organization or taxing authority once formed; district status is not challengeable on that basis | Held for Plaintiff: 2011 shift and altered purposes were material modifications requiring county approval; taxing authority after April 28, 2011 was invalid (affirmed) |
| Whether the district had authority to tax Taxpayers from April 29, 2009 to April 28, 2011 after including 70 Ranch in 2009 | The 2009 inclusion of 70 Ranch was a material modification (large acreage outside Lochbuie) that required Weld County approval; without approval the inclusion and taxes were invalid | Boundary changes alone are not material; district relied on Lochbuie approval and published notice—time to challenge expired | Held for Defendant in part: Court of Appeals concluded the 2009 inclusion also constituted a material modification lacking Weld County approval, so the trial court’s grant to Sand Hills for 2009–2011 was reversed (district lacked authority for that period) |
| Whether the district’s 2009 public notice triggered the 45-day statutory challenge period | Taxpayers: the published notice did not describe a material departure or provide required county notice, so the statutory challenge period did not begin | Sand Hills: published notice (2009) started the challenge window and plaintiffs’ claims are time-barred | Held for Plaintiff: the 2009 notice did not satisfy section 32-1-207(3)(b) because it failed to put Weld County on notice of a material modification; the statute’s objection period did not bar the challenge |
| Proper remedy and preservation of funds collected (2011–2013) and applicability to Noble | Taxpayers sought refund/preservation of funds collected after invalid taxes; Noble, similarly situated, should get same relief | Sand Hills argued order preserving funds was prejudgment attachment and trial court abused discretion | Held for Plaintiff: trial court did not abuse discretion in ordering preservation of funds for 2011–2013; relief extended to Noble as an involuntary plaintiff; remand for release and judgment consistent with opinion |
Key Cases Cited
- Bly v. Story, 241 P.3d 529 (Colo. 2010) (statutory construction: effectuate legislative intent using plain meaning)
- Climax Molybdenum Co. v. Walter, 812 P.2d 1168 (Colo. 1991) (construe statutes to give consistent, sensible effect to all parts)
- Crandall v. City & County of Denver, 238 P.3d 659 (Colo. 2010) (avoid interpretations leading to absurd results)
- Upper Bear Creek Sanitation Dist. v. Bd. of County Comm’rs, 715 P.2d 799 (Colo. 1986) (board of county commissioners must approve modified service plans)
- Prinster v. District Court, 325 P.2d 938 (Colo. 1958) (court generally avoids adjudicating rights of parties not before it)
- Romero v. City of Fountain, 307 P.3d 120 (Colo. App. 2013) (standard of review for stay/related discretionary relief)