*1 judgment judgment as directed. The otherwise affirmed. Judge Judge Chief DAVIDSONand *

MARQUEZ concur. CORPORATION,

HEALTHSOUTH

Petitioner-Appellant,

BOULDER COUNTY BOARD COMMISSIONERS,

Respondent-Appellee,

Colorado State Board of Assessment

Appeals, Appellee.

No. 08CA0233. Appeals,

Colorado Court of

Div. V.

March *2 LLC, Associates, Norman Wright &

N.H. Colorado, for Village, Wright, Greenwood H. Petitioner-Appellant. Attorney, Mi- Hoyt, Lawrence

H. Attorney, Koertje, Assistant A. chael Colorado, Respondent-Appellee. Boulder, for General, Suthers, Attorney Rox- W. John Attorney Gen- Baca, Assistant Senior D. ane Freimann, Assistant eral, R. Brenner Lisa Colorado, Denver, Ap- General, for Attorney pellee. Judge GRAHAM.

Opinion case, petitioner, tax property In this appeals (taxpayer), Corporation Assess- Board of of the a final order (BAA). BAA dismissed ap- administrative consolidated taxpayer's by respondent, challenging the denial peals County Com- County Board of the Boulder seeking (BOCC), petitions of two missioners portion refund of and an abatement property taxes for taxpayer's personal order the BAA's reverse year. tax We proceedings on further remand for and refund taxpayer's abatement merits claims. an abatement statutory grounds for taxes property part of of all or refund 89-10- in section provided

levied C.R.S.2008, authorizes 114(1)(a){(D(A), taxes property and refund abatement an whether due "erroneously illegally," levied assessment"; (1) valuation "erroneous (8) "clerical er- (2) levying"; "irregularity in (4) ror"; "overvaluation." whether, under appeal At issue scheme, taxpay- tax property the Colorado an abatement may seek er taxes when property personal overpaid from the overpayment resulted assets overreporting earlier misconduct filing its and valuations Contrary schedules. declaration that, conclude ruling, we BAA's scheme, has the proceed with overvaluation, not- claims withstanding the fraudulent overstatement filings provided no its assets and valuations its initial basis for abatement and refund claims under filings. Consequently, the BAA erred in dis- grounds. The BOCC missing taxpayer's appeals affording without alternatively argued that if even there were evidentiary hearing, and on remand it *3 any statutory grounds viable for relief under taxpayer's must consider the merits of over- circumstances, these taxpayer's abatement concerning valuation personal claims its and refund claims should by be barred cer- year. for the 2002 tax equitable defenses, tain including the "un- clean hands" doctrine. I. Background Factual motion, After considering taxpayer's The legal facts relevant to the issues be- response, the reply, by BOCC's briefs the dispute. fore us are not in Taxpayer timely parties, argument and oral evidentiary filed two abatement and petitions with issues, hearing on the BAA granted concerning the BOCC the taxes levied on its BOCC's motion and taxpayer's dismissed ap- personal property for the year. 2002 tax Af- peals. ter petitions, taxpay- the BOCC denied these timely appealed er these decisions to the As order, we read the BAA's it did not BAA. BAA later ap- consolidated these jurisdiction. Rather, dismiss for lack of peals. BAA ruled that there statutory were no grounds authorizing an abatement and re- In proceedings, the BAA taxpayer sought fund under by cireumstances stated to reduce year the 2002 tax valuation of its taxpayer. personal Specifically, the BAA Longmont at its ruled that location $654,642 $125,517, to under taxpayer's and to these reduce the cireumstances abate- year 2002 tax personal valuation of its prop- ment and refund claims were not based on erty $471,060 at its Boulder location from to any assessment, erroneous valuation for $60,312. The factual taxpayer's basis for any error, clerical any overvaluation abatement and refund claims is that in within meaning statutory of these pro- part of a broader fraudulent scheme to visions. appeal This followed. company's increase the price, stock taxpayer included fabricated valuations for fictitious Legal II. Analysis assets in the property declaration agree We tazpayer with that the BAA schedules it filed. dismissing erred in its abatement and refund Taxpayer, through independent ac- claims under these cireumstances. In our countants, disclosed the existence of this view, taxpayer had a viable basis for its scheme to the BOCC a letter which en- abatement and refund claims under the stat- copy closed a complaint of a which had been utory scheme ground overvaluation, against filed taxpayer by the Securities and to the extent taxpayer that prove could Exchange complaint Commission. The al- personal property was overvalued leged taxpayer had earnings inflated its any inclusion of value attributable to nonexis- projections match of certain Wall Street tent perceive assets. We also no basis under analysts and thereafter balanced its books scheme for barring these au- matching earnings false with false increases thorized abatement and refund claims under tangible in its According assets. to the com- equitable defenses asserted plaint, taxpayer "engaged transactions, BOCC. practices and a course of business which would operated have as a fraud or deceit A. Jurisdictional Issues purchasers of the securities." Now management, different We first parties' arguments address the sought an abatement por- and refund of the jurisdiction the BAA's to consider tion of the property taxes it over- taxpayer's abatement and refund claims. As paid reported attributable to the valuations by taxpayer, noted because the administra- of the nonexistent assets. appeals tive from the deny- BOCC's actions ing taxpayer's BOCC moved to taxpayer's petitions dismiss timely were filed appeals, contending taxpayer's BAA, fraud in with the jurisdiction the BAA had 39-10-114(1)(a)(D)(A), 1991 Colo. Sess. appeals. duty to "hear" 89-10-114.5(1), stating 39-2-125(1)(f), (legislative C.R.S. declaration Laws 1962 §§ that this was added Broadway Corp. Arapahoe 2008; 5050 S. extending Comm'rs, the intent of scheme "with (Colo.App.1991) petition for an abate- property taxes levied erro- ment or refund of appeals, administrative In such overvaluation," neously illegally due to an any previ a review of limited to BAA is not petitions and refund allows abatement taken, instead is authorized but action ous valuation"); see essentially all errors "for evidentiary proceedings on novo conduct de Corp. v. Bd. Assessment also Portofino the abatement merits of (Colo.App.1991) Appeals, 820 P.2d Realty Trust v. & D.C. Burns claims. See *4 legislative declara- {noting applying this Comm'rs, County Bd. of Jefferson tion). (Colo.App.1992). Never P.2d 903 subject theless, BAA has mat the even when statutory the determination as to appeals, the jurisdiction to hear such ter taxpayer's to a abatement grounds applicable re on abatement and limitations substantive claims is based on substance and refund statutory provi in other found fund elaims claims, language and the taxpayer's of Broad See 5050 S. applicable. sions remain taxpayer's petition is not control used (holding that at 968-71 way Corp., 815 P.2d abatement and ling. taxpayer's When appeal, but jurisdiction to hear the had BAA a factual determination refund claims involve and re of abatement affirming BAA's denial valuation, they appropriate statutory unauthorized under claims as fund overvaluation. ground of are based scheme). Club, 122- Country 97 P.3d at Boulder See it had Here, the BAA stated 23; v. Colo.Bd. Wyler/PebbleCreekRanch ultimately it appeals, but taxpayer's "heard" (Colo. 597, 600 Appeals, 883 P.2d Assessment taxpayer's ruling that them dismissed 2 Assessors App.1994); see also Reference fall claims did not and refund abatement (rev. V, Sept.2008) (provi Library § at 5.14 relief grounds for such the substantive within refer Property Tax Administrator's sions statutory scheme. stating that "overvaluation" ence manuals any jurisdic not based on order was BAA's 39-10-114(1)(a)(ID)(A)is defined under section issues, no error on perceive we tional require judg adjustments that as "valuation grounds. any jurisdictional ment"). Here, taxpayer's and refund Issues abatement B. Overvaluation factually its inclusion of are based on claims argu Next, contrary to the BOCC's in the of nonexistent assets fictitious values analysis, agree with and the BAA's we it property declaration schedules personal it asserted viable proper- Although initially filed. the cireumstances claims under on the assets and ty taxes levied were based statutory autho provisions here based on the county had the taxpayer reported, values ground of "overval rizing claims on the only authority and tax legal to value uation." county. actually within the property located interpretations of statutes review We 89-1-105, 39-1-108(5)(a), C.R.98.2008. §§ primary purpose BAA de novo. Our reported could not Any nonexistent construing is to effectuate when statutes county could not within the be located Assembly. To deter intent of the General Consequently, tax- any actual value. have intent, look to the we first mine has been an overval- payer that there asserts phrases their giving words and language, property in taxable uation of its meaning. Boulder commonly accepted extent that the taxes have aggregate, to the County Bd. Country Boulder Club v. to the on valuation attributable been levied Comm'rs, (Colo.App.2003). 97 P.3d initially reported. assets nonexistent not defined The term "overvaluation" circumstances, any ap- absent Under these 39-10-114(1)(a)(D)(A), it must be but section a viable basis for exceptions,there is plicable meaning. See ch. see. given a broad taxpayer's scheme, Consequently, abatement and refund claims un under the ground der the scheme on the taxpayer may granted relief on its abate- overvaluation. The amount of the overvalua ment and ground refund claims on the tion involves a factual determination as to the overvaluation to the extent that it can estab- improperly assigned valuation to nonexistent improperly lish it was taxed on valuation opposed properly assets as to the valuation relating property. to nonexistent assigned to actual assets located within the county. Club, Country See Boulder 97 P.3d Equitable C. Defenses 122-23; USA, Depot see also Home Inc. v. that, The BOCC also contends even if tax- Comm'rs, Pueblo payer statutory grounds had for its abate- (Colo.App.2002)(affirming BAA's fac claims, ment and refund these claims should tual taxpay determinations as to valuation of equitable grounds by be barred on the un- personal property evidentiary pro er's clean hands doctrine because arose from ceedings taxpayer's own fraudulent misconduct ov- claims). erreporting per- assets and valuation in the possible exceptions There are two sonal schedules filed. 'We not statutory authorization for abatement and re- persuaded. overvaluation, fund claims on the *5 applicable but neither one is here. provisions Tax generally viewed as technical subject laws that are not to First, abatement and refund claims P, equitable principles. Shell EW. & Inc. v. statutorily of overvaluation are Comm'rs, Dolores 948 P.2d prohibited if the valuation for the same (Colo.1997)(SWEPI ). Neverthe year previously challenged was under less, in ap certain it cireumstances separate adjustment protest and procedure. propriate apply equitable certain princi 89-10-114(1)(a)(D(D), C.R.S.2008; ples in proceedings abatement and refund Trust, Realty D.C. Burns & 849 P.2d at 902. property under the Colorado tax scheme. parties agreed hearing at the BAA that (holding See id. at application that taxpayer previously challenge did not equitable tolling appropriate doctrine was year personal 2002 tax prop valuation of its to statute of limitations in erty protest adjustment under the proce dure, proceedings refund under exception and so this cireumstances inapplicable. is case). that exception applies The other to situations taxpayer which a has failed to file view, In our it appro would not be personal property declaration schedule and priate permit application of the non- county assessor has amade "best infor statutory equitable defense of the unclean (BIA) mation available" valuation as author here, hands doctrine under the cireumstances 89-5-116(1), ized under section C.R.98.2008. which barring would have the effect of tax Property In Tax Adm'r Geophysi v. Prod. payer's statutorily authorized abatement and Services, Inc., cal 860 P.2d claims, refund Assembly because the General (Colo.1993), supreme court held that a has addressed this situation provided but has taxpayer in that situation is barred from consequences. for different challenging the BIA personal valuation of its Nothing in the scheme itself bars property under the abatement taxpayer that has submitted false informa- procedure, provisions based on the of section tion in a personal property filed schedule 39-5-118, C.R.S.2008, applies only pursuing from later taxpayer when a personal has failed to file a any resulting overpayment claims as to of its property schedule. personal property taxes. there are case, however, In taxpayer this per- filed separate statutory two provisions otherwise property sonal for schedules the 2002 tax addressing §§ these cireumstances. See 39- year and no BIA valuations were made. 5-116(2),89-10-114(1)(b),C.R.8.2008. Thus, exception provided by section 39- Geophysical 89-5-116(2)(a), 5-118 and Production Under section Services inapplicable is also here. complete fails to make a full and disclosure of illegally erroneously or as the result of levied pur- for assessment personal property (b) (a) assessment, things, if, among erroneous valuation other poses (c) property error, schedule in a filed irregularity levying, clerical includes property "any information" (d) are, These four bases overvaluation. erroneous, "false, misleading." that is view, the nature of a different from our 39-5-116(2)(c) that provides further Section claim, statutory provisions do not and the "shall in those circumstances any taxpayer in the nature of tax- exclude claims that are pursue the administrative have satisfy nevertheless one payer's but taxpayers available to remedies We also note that four bases. tax- title, [the dependent upon basis the fraudulent the dissent focuses on while added.) (Emphasis claim." payer's] activity taxpayer, it was not the BOCC target earnings the inflated that was the Colorado taxpayers that distinguishes between it the investors. fraud: was scheme property schedules any personal fail to file short, although In the Colorado taxpayers file expressly appli- address the scheme does not information, pro include false schedules cability equitable defenses to abatement consequences for each situa viding different cireumstances, and refund claims under these any personal failing to file Taxpayers tion. not silent on the issue. Because the challeng are barred from property schedule Assembly has addressed situa- General the abatement and BIA valuation under ing a taxpayers including mislead- tion of false or Servs., Geophysical Prod. procedure. ing personal property in filed information 89-5-116(1), 516-19; §§ 839- see has chosen not to bar such schedules but contrast, filing personal taxpayers In 5-118. pursuing later abatement and infor include false property schedules concerning any resulting over- refund claims pursue all statutory right mation have a *6 taxes, for perceive we no basis payment remedies, including administrative available effectively barring such claims and refund nevertheless under the abatement remedies 39-5-116(2). procedure. See by nonstatutory grounds permitting the on the application equitable of the defense of statutory scheme also the in hands doctrine this situation. See unclean conse more limited adverse provides for 89-10-114(1)(b). 39-5-116(2), §§ in 39-10- such section quences to 114(1)(b). taxpayers prevailing on Although generally claims are and refund abatement Proceedings D. Remand paid together to refunds of the taxes entitled reasons, foregoing the case must For the 39-10-114(1)(b) interest, section

with refund BAA for a new determi remanded to the interest "shall not be provides that refund nation on the merits of abatement "as a overpaid if taxes were levied paid" the of overvalu and refund claims by taxpayer in made result of an error year. concerning the 2002 tax For ation personal property schedules." completing BAA authorized to purposes, provided in such statutory penalty evidentiary hearing on a de novo conduct of in limited to the denial cireumstances is Taxpayer is entitled to an taxpayer's claims. any tax refunds made under terest on of its 2002 procedure. interest, taxes, property without phrase, supposes that the "de- The dissent prove it was the extent can taxpayer's] pendent upon [the the basis of valuation attributable improperly taxed on 39-5-116(2)(c), claim," in contained section rather than valuation property nonexistent BAA allows the provides exception within to actual assets located attributable in tax abatement reject petition for January 1 date. county assessment on cireumstance, arguing that the basis present 89-1-105, 89-1-108(5)(a), 39-10- §§ is fraudulent. taxpayer's petition here 114(1)(a)(D(A),(b); Realty & D.C. Burns referencing the four phrase We read Trust, 903-04; also Home P.2d at see in set forth separate bases for abatement USA, Inc., 50 P.3d at 918-20. Depot taxes have been 39-10-114: where section year, personal property E. Issues Other business began renditions to include fictitious as- parties arguments have also asserted sets. rulings similar claims in based on the on See, eg., parte from other states. Ex cases fraud, explain To the nature of the (Ala.2007). Corp., HealthSouth 978 So.2d 745 copy letter referred to the of an attached However, because those cases were decided complaint civil against that had been filed significantly different lan- based by Exchange the Securities and guage in different in schemes those in complaint Commission Alabama. The states, persuasive we do not find them to be stated: regarding in this case the construction of the 1999, HealthSouth, Since one of the na- applicable statutory provisions of the Colora- largest providers, tion's healthcare has do tax scheme. by earnings overstated its least $1.4 Finally, disposition in view of billion. This massive overstatement oc- issues, remaining we need not address the curred in- [HealthSouth's because founder] parties. contentions of the sisted that meet or exceed [HealthSouth] earnings expectations by established Wall reversed,

Accordingly, the BAA's order is analysts. Street When [HealthSouth's] and the case is remanded to it for further estimates, earnings fell short of such [the proceedings consistent with the views ex- founder] directed account- [HealthSouth's] pressed opinion. in this ing personnel "fix artificially it" in- Judge BOORAS concurs. flating company's earnings to match expectations. Wall Street To balance Judge BERNARD dissents. books, the [HealthSouth's] false increases Judge dissenting. BERNARD earnings were matched false increas- By es suggestion [HealthSouth's] There is no assets. the third this case that quarter anything wrong Boulder did [HealthSouth's] col- assets lecting personal million, taxes from Health- were overstated at least $800 Rather, payment South. approximately percent of total assets. property taxes at issue here was based on complaint pur- later indicated that the misrepresentations HealthSouth's intentional pose matching expectations of Wall in documents that it submitted to the Coun- analysts Street's was to "maintain the mar- *7 ty. County per- The did not invent fictitious price ket stock." [HealthSouth's] One property; sonal did. inflating the means of asset value was to give did not this fictitious "record[ false entries to ] the fixed asset value; property a HealthSouth did. As a books of [HealthSouth's] numerous facilities. result, I would conclude that HealthSouth is The combined amount of the false entries not pursue entitled to the administrative equaled the total amount of fictitious increas- remedy of abatement and refund of its taxes es to the quarter." income statement for that because it bases its claim for relief on its own cynical, This fraudulent appar- scheme is Therefore, misconduct. I because would af- ently unique. not firm the Board of Assessment or- der, implosion Since the respectfully I of Enron in November dissent. severely Wall Street has been Background

I. by unprecedented shaken an string of ac- counting involving publicly fraud seandals The record in this case contains a letter corporations. traded corpora- Most of the written to the Boulder Treasurer guilty earnings tions involved have been an seeking accountant the tax abatement and inflation-adding refund for fictitious income to their HealthSouth. The letter asked the Treasurer to note that financial appeal statements. The of earn- ings By inflation is obvious. means of part of a fraudulent scheme [Health- accounting gimmicks, by simply various inflated matching

South] income with en- property, plant, manufacturing tries to equipment and transactions that never took [Bleginning place, accounts.... with company steadily the 1999 can a create title, dependent to this boost earnings curve will rising pro- surprisingly, wpon this the basis his claim. price. Not share management. rewards for duces lucrative 39-5-116(2)(c) (emphasis supplied). § grants management to fre- option Stock view, my language In of section 39-5- earnings tar- specified quently are tied 116(2)(c) false, clearly making er- states quickly may be achieved more gets that roneous, misleading statements does not company's books. More- manipulating the necessarily pursuit of administrative bar over, increas- prices rise based on as share remedies, such as tax abatement and refund. may management profit, es revenue the statute also makes clear that ever-greater gains from sales realize may prevent making such statements a tax- company acquired shares of the previously payer pursuing from such administrative claim. remedies based the nature of the so, they compelled to do Although are not earnings of- inflate their corporations that History B. on the fictitious income pay ten helps hide the doing so create because History Statutory investors, analysts accounting fraud statute, voluntarily In the of a absence goes If the fraud undetect- and the SEC. normally paid taxes are not recoverable ed, cer- offending corporation almost taxpayer, if those taxes were col- even govern- tainly will be content to allow illegally. generally, David J. Mar- lected keep overpayments. chitelli, Annotation, Voluntary Payment Doc- however, exposed, the fraud When Recovery Payment trine as Bar to seeking likely respond by corporation is Tax, Generally 1 ALR. 6th 229 Unlawful taxes, may overpaid a refund of the (2005); MceQuillin, Eugene The Law of mil- or even hundreds of amount to tens (8d Municipal Corporations 44.180 lions of dollars ed.2003). concept, rationale for Boise, Playing "Monopoly Craig with M. voluntary payment called the doctrine or the Phony Profits, Fraud Penalties Money": rule, voluntary explained by the payment was 144, 146-47 Equity, 90 Minn. L.Rev. Supreme Texas Court: omitted). (Nov.2005) (footnotes voluntary payment rule seem This Analysis IIL. counterintuitive, important but there are it. In the taxation con- supporting reasons A. Introduction text, taxing rule authorities secures (1) view, my claim is In HealthSouth's orderly their financial af- conduct of (2) misconduct; see- by its own barred Supreme Court States] The [United fairs. C.R.8.2008, 39-5-116(2)(c), allows tion recognized "government's ex- has also taken into consideration misconduct to be in financial ceedingly strong interest stabil- determining is en- whether when threats to a state's ity in this context" and *8 statutory right to tax pursue titled to security that can arise from un- financial 89-5- and refund. Section abatement The rule predictable revenue shortfalls 116(2)(a), C.R.$.2008, general out a rule: sets age-old policies of dis- supports also complete make a full and person A fails to government. couraging litigation with the personal property pursu- of his disclosure County Community CollegeDist. v. Dallas (a) if in a paragraph he includes ant to this (Tex.2005) Bolton, 868, 876-77 any information 185 S.W.3d filed schedule Corp. Div. Alcoholic false, erroneous, (quoting McKesson v. which is or his Tobacco, 18, 37, 110 Beverages in a schedule & 496 U.S. misleading or fails to include (citations (1990)) 2238, property owned him. 17 taxable S.Ct. 110 L.Ed.2d omitted). legislature further indicates what the The violating general rule is: effect of Colorado, statutory ability In a (a) taxes has subject paragraph of this and refund of Any person to to seek an abatement (2) pur- shall have the to Board Assess- subsection been in effect since 1902. Benbrook, 860, 863 remedies available sue the administrative 974

(Colo.1987). Therefore, ing taxpayer that a pursue because Colorado is entitled to a has structure that allows for seeking administrative remedies a tax abate- taxes, voluntary abatement and refund of ment and refund in all in cireumstances payment apply not doctrine does to this case. false, provided which the has erro- neous, misleading information. voluntary the rationale for the payment plays doctrine still a role in the History Colorado Case Law functioning of our tax abatement and refund statutes. supreme The court has looked at

To accommodate the dual in needs Colora- abatement structure do for a reliable constant of revenue source several considering times when the effect of government remedy for the and a for tax- by taxpayers mistakes in valuing personal payers sought enjoin who collections property. Boyer In Bros. v. Board Com- in they the courts because believed missioners, 275, (1980), 87 Colo. P. 288 408 carrying disproportionate were a share of Wyoming sheepherders had entered into an burden, the tax Colorado established a agreement pay with a Colorado assessor statutory remedy recognized that some in- sheep grazing taxes on in Colorado. The junetive equity actions in under the "tradi- higher provid- assessment rate was than that equity required tional head of fraud" but statute, sheepherders sought ed and the to exhaust administrative reme- to recover the difference between going dies before to court if an assessment agreed-upon rate and the rate. is deemed excessive. supreme rejected court argument, their Ela, (quoting Id. Aspects Some Colorado observing that Remedies, Taxpayers' Rocky Mtn. L.Rev. been, least, [hlaving part in responsible (1950)). 145,160 the assessment in the manner de- has, time, legislature granted over seribed, having failed to file a schedule taxpayers leeway seeking more when law, required by sheepherders [the in are] they paid refund for taxes position urge, no as a for recov- because of their mistakes. [them], Portofino ering paid by the taxes the method Corp. v. Appeals, Board Assessment of assessment followed this case. 1157, (Colo.App.1991)("[Wle P.2d con- Id. at P. 288 at 413. that, 39-10-114, amending clude [section Stephens In E.A. Equal & Co.v. Board of C.R.S Assembly 2008] the General ization, (1939), 104 Colo. 92 P.2d 732 provide intended to opportuni- company sought an abatement and refund of ty to utilize the provi- overpaid personal taxes, arguing purpose challenging sions for the an over- that, mistake, bookkeeper's because of a it valuation."). given taxing authority had erroneous val legislative Evidence of this trend is found property. supreme ues of the Our court 89-5-116(2). in the evolution of section As concluded that company was not entitled here, pertinent Assembly the General first requested to the relief it because adopted "false, language referring to er- appears company] voluntarily [the roneous, misleading" information that now paid in question; the taxes the error 39-5-116(2)(a) appears in section in 1964. solely involved was due con- calculations 187-5-16, § Ch. 1964 Colo. Laws Sess. company's] tained [the own tax sched- (2)(c) 702. Subsection was added in 1987. ule; voluntarily schedule was 1, 89-5-116(2)(c), Ch. see. 1987 Colo. *9 it; by made solely that the error was due Sess. Laws 1415. company's] negligence [the own and not present, legislative this trend taxing agencies; action of the culminates with the version of section 39-5- the facts which show the in mistake were 116(2)(c) that has in been effect since 1987. possession company]. the sole of [the Because the to an administra- 559, Id. at 92 P.2d at 733. remedy qualified by tive is phrase the "de- pendent claim," supreme the pointed basis of the court then out that [the] legislature point has not reached public policy the of stat- there was a denying reason for

975 windfall, and County a the received that echoes the an abatement scheme. voluntary payment doctrine: of HealthSouth's the was not victim rationale for and recovery under the facts permit To reasoning under disagree I with this line of in the instant case would cireumstances for three rea- cireumstances of this case of the endanger the entire structure First, by re- is the harm done sons. there multiplicity to a of suits state and lead money public treasury. As moving from the of taxes. justice Supreme Court com- of the Ohio 734; 561, Coquina 92 P.2d at see also Id. at involving in a recent case Health- mented County Equali- Corp. v. Larimer Oil and request for an abatement South's similar (Colo.1989)("Tax- zation, P.2d 1201 property tax in that state: refund of by sup- the overvaluation payers who create majority laments the loss to the While the taxing information to the plying erroneous by corpo- "innocent investor" caused pro- and authority must discover the mistake fraud, government I that the rate believe prescribed in section 39- test within the time vie- taxing primary districts are also statute, [C.R.S.2008]."), superseded taxing dis- tims of the fraud. While 39-10-114(1)(a)(D(A), C.R.S.2008, as stated may temporarily tricts have benefited from Corp., 820 P.2d at 1159-60. in Portofino overpayment of taxes HealthSouth recently supreme court As (and adjusted presumably therefore their recognized importance of "strict enforce income), those budgets to reflect imposed taxpay duties on districts, taxing upheld if a refund is same v. Pro Property Tax Administrator ers." forced, remand, will now be these Services, Inc., 860 P.2d Geophysical duction times, up very difficult economic to come (Colo.1993). 514,519 repay tax benefits re- with funds to those worse, ceived. And what those funds Harm C. go corporation to a that has will back because I do not cite these Colorado cases admitted to massive fraud. present status of section they represent Levin, 121 Corp. v. Ohio St.3d 39-5-116(2)(c). Clearly, legislature has 282, 2009-Ohio-584, 903 N.E.2d terrain, recently in most modified Stratton, J., (2009)(Lundberg concurring). pursue taxpayers to allow administrative Second, because the tax valuation even in some cases when an over- remedies system self-reporting, filing relies on truthful entirely to their own payment be due intentionally confi- false disclosures reduces conduct. system. public perceives If the dence Rather, I these cases because cite designed misrepresentations to secure supreme demonstrate that our court has ob- common, voluntary advantage that, express absent an served compliancemay dwindle. See United States contrary, conduct statement (2d Bove, Cir.1998)(filinga 155 F.3d refund, a tax and that can bar implicates integ- false income tax return providing an abatement and refund over- Boise, system); Play- rity of the national tax can harm paid taxes certain cireumstances Money", ing "Monopoly 90 Minn. with "entire tax structure of the state." This ("'There at 172 n. 120 is substantial L.Rev. harm is an leads me to conclude that such on the effect of economic literature appropriate factor to consider when deter- compliance, with re- attitudes on tax most mining whether a intentional mis- concluding taxpayer percep- searchers valuing personal property representation system per- of fairness in the tax tions reme- can be the basis for administrative ceptions compliance other dy. rate of tax significantly affect the overall that the did HealthSouth contends compliance."). any injury misrepre- not suffer because of its Third, can Rather, misrepresentations like these goes, argument sentations. County's capacity to do adversely affect the tax revenue that it would received *10 duty. ability taxpay- The to determine truthfully had HealthSouth not have obtained compromised liability personal property. er's true tax reported the value of its 976

because, equitable tolling requires inquiry an period County of into during the relies report, may be de delay prompted on the false records cireumstances of the invoked.") stroyed falsified. Badaracco v. Com See of limitations to be the statute missioner, 386, 398, 756, 464 104 S.Ct. U.S. By specifically including phrase "de- (1984) (federal in L.Ed.2d 549 criminal 78 claim," upon I pendent [the] the basis of case). voluntary Subsequent tax dis come 89-5-116(2)(c) places believe that section Col- trusted, may not be for obvious rea closures analytical squarely camp orado in the occu- sons, requiring to focus thus majority pied of the Alabama Su- taxpay more on verification of that resources preme Corp. in Court HealthSouth 399, er's submissions. Id. at 104 S.Ct. legislature has made clear that because our claim an the nature for D. Other Jurisdictions taxpayer determine whether a should This this has issue right pursue has a administrative reme- states, presented in with been to courts other dies, persuaded by majority opinion I am differing Compare parte results. Ex Health Corp. apply in HealthSouth that we should (Ala.2007) 745, Corp., 978 South So.2d equitable principles in situations such as (statutory "mistake" did terms "error" and these. dishonesty; not include intentional majority Corp. in paid was not entitled to refund for taxes on relying language reached its decision equitable princi fictitious White, v. 301 57 Levin, Stone U.S. S.Ct. ples), Corp. with HealthSouth v. 903 (1937): L.Ed. 1265 81 (Ohio N.E.2d at 1184-85 statute mandates appears refunds unless the reason for refusal authorizing The statutes tax refunds and statute; equitable principles in the did not recovery predicated suits for their are if it apply; HealthSouth entitled to refund equitable prineiples the same case). prove reading can A cases these money in assumpsit underlie an action for depend makes clear that their results direct Since, type had and in received. this ly language employed their stat action, plaintiff must recover virtue utes. by equitable of a measured stan- dards, open it follows that is E. Conclusion which, defendant to show state of facts Generally, provisions are technical laws standards, according deny to those would subject equitable principles. not Shell right, even without resort to the mod- P, E Western & Inc. v. Dolores statutory authority pleading equita- ern for (Colo.1997). Comm'rs, 948 P.2d 1007 ble defenses actions which are more exceptions, including there strictly legal. when, case, in a tax abatement and refund (citations omitted), quoted Id. in Health application equitable principles is nec- Corp., South at 754. I think So.2d essary unjust to avoid result occasioned language particularly persuasive is because application strict of a statute of limita- supreme our court indicated that tions. Id. remedy "recognized my Assembly It is view that the General equity some actions in under the "traditional equitable exception taxpay- created an to a equity head of fraud"" Board Assess statutory right pursue a er's tax abate- Benbrook, 735 P.2d at 863. 39-5-116(2)(c). ment and refund section Here, HealthSouth's hands are unclean be phrase "dependent upon the basis of intentionally improper cause its conduct had qualifies statutory right. I [the] claim" necessary "an immediate and relation to the phrase conclude that this authorizes the deci- sought." claim under which relief maker, in- sion situations such as these Colorado Korean Ass'n v. Korean Senior erroneous, "false, volving misleading" in- Ass'n, (Colo.App.2006). I formation, apply equitable principles when would, therefore, deny HealthSouth its statu examining providing the reason in- P, tory right to seek administrative relief be formation. See E & Shell Western ("The application P.2d at 1010 doctrine cause *11 scheme, guiding doctrine in change [tlhe this case is the the fraudulent then equitable maxim that "he who comes into position request a refund of the taxes equity must come with clean hands." This when the fraud is discovered and is no banality. maxim is far more than a mere longer profitable. self-imposed It is a ordinance that closes equity taint- the doors of court of one inequitableness or faith rela- ed with bad relief,

tive to the matter in which he seeks may improper

however have been the be-

havior of the defendant. That doctrine is concept

rooted the historical of court of

equity affirmatively aas vehicle for enfore- ing requirements of conscience and Colorado, The PEOPLE of the State of good presupposes faith. This on refusal Plaintiff-Appellant, part iniquity." "the abetter of "equity Thus while does not demand that v.

its suitors shall have led blameless lives" Jeffrey HUGGINS, Sr., Allen matters, require as to other does Defendant-Appellee. fairly shall have acted and without No. 07CA1259. controversy fraud or deceit as to the issue. Colorado Appeals, Court of Mfg. Precision Instrument v. Co. Automo Div. III. Co., Machinery tive Maintenance 324 U.S. April 2, 2009. 806, 814-15, 993, 65 S.Ct. 89 L.Ed. 1381 (1945) Heath, (quoting Bein v. 47 U.S. Rehearing April Denied (1848), 6 How. L.Ed. 416 216, 229, Loughran Loughran, v. 292 U.S. (1934)) (citations

S.Ct. 78 L.Ed. 1219

omitted). differently

I would if misrep- conclude had a product

resentations been of innocent

mistakes, simple negligence. even I differently

would also view this case if the

County had contributed to this situation mistakes,

through negligence, its own or mis- And, although recognize

conduct. I

many of HealthSouth's shareholders are also

victims of its misconduct who be entitled proceed-

to relief of their own in a different

ing, the interests I have identified above scale,

weigh, my denying favor of

HealthSouth the relief it seeks here. conclude,

I would as did the Alabama Civil Corp. Court of in HealthSouth Assessor, County Tax 978 So.2d

Jefferson 737, 744 (Ala.Civ.App.2006), the af- decision Supreme

firmed the Alabama opin- Court above,

ion cited that: intentionally provide

HealthSouth cannot

the tax misleading assessor with informa- scheme,

tion in furtherance of a fraudulent

allow the tax depend assessor on this assessment, making

information in let

the assessment stand while it benefits from