Case Information
*3 Before KELLY and HOLLOWAY , Circuit Judges and SHADUR [*] , District Judge.
KELLY , Circuit Judge.
This is an appeal from consolidated adversary proceedings in bankruptcy. The Appellants Jeffery A. Weinman [“the Trustee”] and the Manager of Revenue and Ex Officio Treasurer for the City and County of Denver, and the Treasurer for El Paso County, Colorado [сollectively “the Taxing Authorities”] appeal from the district court’s order affirming the bankruptcy court’s grant of summary judgment in favor of the Appellees General Electric Capital Corporation [“GECC”] and First Security Bank, National Association, in its capaсity as legal owner and trustee, on behalf of Bavaria International Aircraft Leasing Gmbh & Co. KG [“Bavaria”]. We have jurisdiction pursuant to 28 U.S.C. §§ 158(d) and 1291 and we affirm the district court’s order.
Background
*4 In March of 1995, the debtor, West Pacific Airlines [“WestPac”], entered into lease agreemеnts for five aircraft with GECC and for one aircraft with Bavaria. [1] The term of the leases was either for five or ten years and the monthly rent ranged from $190,000 to $210,000 per plane. All six leases were in effect on January 1st of both 1997 and 1998.
WestPac filed a voluntary petition for Chapter 11 bankruptcy in October of 1997, ceased all flights in February of 1998, and converted the proceedings into a Chapter 7 bankruptcy in July of 1998. The Trustee was appointed by the bankruptcy court as WestPac’s Chapter 7 trustee and was substituted for WestPac as а party to this action.
WestPac did not pay its 1997 and 1998 state personal property taxes, totaling $1,057,279.80, to the Colorado Property Tax Administrator. Because WestPac was headquartered in El Paso County, Colorado on January 1, 1997, and in Denver on January 1, 1998, the Taxing Authorities for El Paso and Denver were entitled to collect the taxes. After WestPac ceased flights and because GECC was seeking to terminate its leases with WestPac and retake possession of its aircraft, the Taxing Authorities filed an emergency motion for relief from automatic stay seeking authority to collect the taxes owed pursuant to Colo. Rev. Stat. § 39-10-113. On February 13, 1998, the bankruptcy court granted limited relief from the stay to the Taxing Authorities by requiring the lessors to post *5 security in the amount of $66,346.00 per aircraft before retaking possession. The bankruptcy court entered orders confirming termination of the aircraft leases on February 14, 1998 for GECC and April 2, 1998 for Bavaria. [2] GECC and Bavaria posted the required security with the bankruptcy court prior to retaking possession of the aircraft.
In March of 1999, all of the parties filed motions for summary judgment.
In July 1999, the bankruptcy court granted summary judgment in favor of GECC
and Bavaria. The Trustee and Taxing Authorities moved for reconsideration and
sought a stay. They requested that the court certify the questions оf state law to
the Colorado Supreme Court. The bankruptcy court did so certify, but the
Colorado Supreme Court declined to answer the certified questions.
Subsequently, the bankruptcy court denied the motion for reconsideration and
stay. The Trustee and Taxing Authorities then unsuccessfully appealed to the
district court and now appeal to this court. We view the record “in a light most
favorable to the parties opposing the motion for summary judgment.” Connolly v.
Baum,
Discussion
It is not necessary for this court to address whether a leasehold interest in personal property is intangible property for the purposes of Colo. Rev. Stat. § 39- 3-118 nor is it necessary to decide whether Colo. Rev. Stat. § 39-3-118 is valid under the Colorado Constitution. The only issue that must be decided is whether Colorado tax law authorizes the distraint, seizure, and sale of the taxable personal property of the lessor to satisfy the personal property tax of the lessee.
*7 Under the Colorado tax code, taxes on real and personal property create a first and perpetual lien. Colo. Rev. Stat. § 39-1-107(2). This lien attaches to the property as of noon on January 1 of the tax year. Colo. Rev. Stat. § 39-1-105. If at any time after the lien attaches, the treasurer believes for any reason that any taxable personal property may be removed from Colorado and, therefore, made uncollectible, the treasurer may at once distrain, seize, and sell the personal property to enforce collection, Colo. Rev. Stat. § 39-10-113. [3] Likewise, if the taxes become delinquent upon the personal property of any public utility, [4] the treasurer of the county shall distrain and sell any of the personal property of the utility, Colo. Rev. Stat. § 39-10-111(11). [5]
The Appellants assert that both § 39-10-113 and § 39-10-111(11) authorize the distraint, seizure, and sale of the aircraft owned by GECC and Bavaria to pay the property tax owed by WestPac. They contend that the language of Colo. Rev. *8 Stat. § 39-10-113 does not limit the treasurer to the personal property of the taxpayer and that the treasurer only needs to believe that taxable personal property will be removed from Colorado. Taxable property is defined in the tax code as “all property, real and personal, not expressly exempted from taxation by law,” Colo. Rev. Stat. § 39-1-102(16); and, personal property is defined as “everything that is the subject of ownership and that is not included within the term ‘real property,’” Colo. Rev. Stat. § 39-1-102(11). The aircraft, therefore, fit within the definitions of taxable property and personal property. The Appellants note that GECC and Bavaria almost certainly intended to remove the aircraft from Colorado after the leases were terminated; therefore, they conclude that the treasurer had reason to believe that taxable personal property was going to be removed from Colorado and was authorized to distrain, seize, and sell the aircraft.
This interpretation of Colo. Rev. Stat. § 39-10-113 proves too much. It
would not distinguish between property of the lessor and the lessee, let alone the
property of third parties. Under Appellants’ interpretation, the treasurer would be
able to distrain, seize, and sell every vehicle traveling in Coloradо on the
interstate regardless of ownership. Motor vehicles are clearly within the statutory
definition of taxable personal property and the treasurer would have reason to
believe that the driver would remove the vehicle from Colorado and render any
taxes uncollectible. The goal in statutory interpretation is to determine and give
*9
effect to the intent of the legislature. Bertrand v. Bd. of County Comm’rs, 872
P.2d 223, 228 (Colo. 1994) (en banc). To ascertain that intent, it is presumed that
a just and reasonable result is intended, Cоlo. Rev. Stat. § 2-4-201(c), and
statutory terms are given their plain and ordinary meaning. Bertrand,
The Appellants argue that even if they аre limited to the taxable personal property of WestPac they can still distrain, seize, and sell the aircraft because “WestPac had a present possessory interest in the aircraft.” Aplt. Br. at 24. No explanation has been offered in the briefs or at oral argument for how WestPac’s leasehold interest in the aircraft transforms the aircraft of GECC and Bavaria into WestPac’s personal property. WestPac’s leasehold interest may be subject to *10 distraint, seizure, and sale [assuming it is not an intangible], but the aircraft of GECC and Bavaria certainly are not.
Our interpretation of § 39-10-113 and § 39-10-111(11) is consistent with
Colorado case law. Of the cases cited to this court that involved the property of
the lessor being distrained, seized, and sold to satisfy the taxes of the lessee, there
was, in contrast to § 39-10-113 and § 39-10-111(11), clear and express statutory
authorization. In Burtkin Assocs. v. Tipton, a lessor challenged Colorado’s sales
and wage and withholding tax statutes as facially unconstitutional because they
allowed the property of the lessоr to be seized to pay the taxes of the lessee. 845
P.2d 525, 527-28 (Colo. 1993) (en banc) (citing Colo. Rev. Stat. § 39-26-117(1)
(“of or used by any retailer under lease”), § 39-22-604(7) (“owned or used by”)
(1982 & Supp. 1991)). The Supreme Court of Colorado upheld the federal and
state constitutionality of the statutes bеcause they gave notice and because the
lessor had failed to take advantage of a safe harbor provision that would have
exempted his property from the lien. Likewise, in Horacek v. Cherry Creek
Corp., the Colorado Court of Aрpeals noted that the wage and withholding, sales,
and use tax statutes and ordinance made it clear that mere use of personal
property subjected it to the lien even if the using party did not own the property.
For the first time at oral argument, the Appellants suggested that this court
should remand to the bankruptcy court if we find that the lien attached only to the
leasehold interests and not to the aircraft. Prior to oral argument, the Appellants
never sought WestPac’s leasehold interests in the aircraft. They only sought the
aircraft. Besides the obvious difficulty that the leasehold interests have long been
terminated аnd required the payment of rent,
[6]
the Appellants have waived this
argument by failing to raise it in their opening brief to this court. See Fed. R.
App. P. 28; Scrivner v. Sonat Exploration Co.,
AFFIRMED.
Notes
[*] The Honorаble Milton I. Shadur, Senior District Judge, United States District Court for the Northern District of Illinois, sitting by designation.
[1] WestPac also leased a number of aircraft from other lessors, but the other lessors are not party to this action.
[2] It is not clear if the Appellants initially agreed with or сhallenged the dates of termination. See 1 Joint App at 0091. Counsel for the Appellants, however, referred to these dates during oral argument.
[3] The statute provides: If at any time after the lien of general taxes has attached the treasurer believеs for any reason that any taxable personal property may be removed from the state of Colorado or may be dissipated or distributed, so that taxes to be levied for the current year may not be collectible, the treasurer may at onсe proceed to collect the taxes and, if the treasurer deems it necessary, may distrain, seize, and sell the personal property to enforce collection. ... Colo. Rev. Stat. § 39-10-113(1)(a).
[4] “Public Utility” is defined at Colo. Rev. Stat. § 39-4-101(3)(a). All parties are in аgreement that WestPac is a utility for the purposes of this section.
[5] The statute provides: If taxes become delinquent upon the personal property of any public utility, as defined in article 4 of this title, the treasurer of the county in which the taxes are dеlinquent shall commence a court action or employ a collection agency as provided in section 39-10-112 or distrain and sell any of the personal property of the utility wherever found in the manner that other personal property is to be distrained and sold for the nonpayment of taxes; .... Colo. Rev. Stat. § 39-10-111(11).
[6] In oral argument, counsel noted that there was no value in the leasehold interests because the rent exceeded the fair market rental value of the aircraft at both the time that Western Pacific went into bankruptcy and the time the leases were terminated.