Opinion
Civil Action 23-cv-02054-SKC-NRN
05-22-2024
ROBERT WEST, Plaintiff, v. SCOT KERSGAARD, SUE FLAGEOLLE, TODD ENYEART, and NICHOLAS LEHTO, Defendants.
REPORT AND RECOMMENDATION ON DEFENDANTS' MOTIONS TO DISMISS, ECF NOS. 25 & 26, PLAINTIFF'S MOTION TO ADD DEFENDANTS, ECF NO. 39, AND PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT, ECF NO. 48
N. REID NEUREITER UNITED STATES MAGISTRATE JUDGE
This case is before the Court pursuant to orders issued by Judge S. Kato Crews, ECF Nos. 32, 40, 54, referring the following motions: Sue Flageolle, Todd Enyeart, and Nicholas Lehto's (“County Employees”) Motion to Dismiss, ECF No. 25; Jefferson County Assessor Scot Kersgaard's (“County Assessor”) Motion to Dismiss, ECF No. 26; Plaintiff Robert West's Motion to Add Defendants, ECF No. 39; and Plaintiff's Motion for Summary Judgment, ECF No. 48.
The Clerk is respectfully directed to update the spelling of Defendant Scot Kersgard to “Scot Kersgaard” on the docket.
The Court has taken judicial notice of the Court's file, considered the applicable federal and state statutes and case law. As set forth below, the Court RECOMMENDS that Defendants' Motions to Dismiss, ECF Nos. 25 & 26, be GRANTED, and Plaintiff's Motion to Add Defendants, ECF No. 39, and Motion for Summary Judgment, ECF No. 48, be DENIED.
I. PROCEDURAL HISTORY
Plaintiff filed suit on August 14, 2023 against the County Assessor for Jefferson County, Colorado, pursuant to 18 U.S.C. § 242 and the United States Constitution. He alleges that his rights were violated when the County Assessor incorrectly calculated the 2021 and 2023 appraisal value of Plaintiff's real property in Evergreen, Colorado by using a “non-statutory statistical methodology that calculates an equalized value for an entire group of properties or a typical property of the group using property attributes in the group of properties in a selected geographic or market area.” ECF No. 1 at 5-6. The County Assessor moved to dismiss the complaint. ECF No. 15. Plaintiff then filed an Amended Complaint on December 13, 2023, adding the County Employees as Defendants and alleging an alternative statutory basis for his claims, 42 U.S.C. § 1983. ECF No. 23.
The County Employees and County Assessor subsequently moved to dismiss the Amended Complaint. ECF Nos. 25, 26. In response, Plaintiff filed an Objection to Defendant's Motion to Dismiss Amended Complaint, ECF No. 27, and the County Employees and County Assessor filed replies, ECF Nos. 33, 35.
Plaintiff later filed a Motion to Add Defendants. ECF No. 39. Defendants filed a response, ECF No. 44, and Plaintiff responded by filing an Objection to Defendants Motion Objecting to the Addition of Defendants, ECF No. 46. Plaintiff then filed a Motion for Summary Judgment. ECF No. 48. Defendants opposed the motion. ECF No. 49.
The Court conducted a motion hearing on these motions on March 13, 2024. ECF No. 56. Counsel for Defendants appeared in-person, and Plaintiff appeared via telephone. Id.
Unless otherwise noted, all factual allegations are taken from Plaintiff's Amended Complaint, ECF No. 23, and are presumed to be true for the purposes of the motions to dismiss, ECF No. 25 & 26. Any citations to docketed materials are to the page number in the CM/ECF header, which sometimes differs from a document's internal pagination.
Plaintiff alleges his real property was incorrectly valued by the County Assessor at $680,344.00 on January 1, 2021, and $933,239.00 on January 1, 2023. ECF No. 23 at 8, 20. He asserts that the 2021 valuation resulted in his property tax being incorrectly assessed for tax years 2021 and 2022 ($3,849.80 in 2021, and $3,810.60 in 2022, for a total of $7,660.40). Id. at 10, 16, 17. The valuations were purportedly incorrect because they were calculated using “mass appraisal value,” which is a “methodology that calculates an equalized value for an entire group of properties”- rather than a calculation of the real property's “actual value,” as Plaintiff argues is required by state statute. Id. at 9. Plaintiff alleges that the valuation of his real property must comply with Colo. Rev. Stat. §§ 39-1-103 (5)(a) and (8)(a), the “Comparable Sales Adjustment Grid Jefferson County Assessor's Office May 1, 2021,” and the case Arapahoe County Board of Equalization v. Podoll, 935 P.2d 14, 17 (Colo. 1997), which holds that individual tax assessments of real property must be “based upon a property's actual value and that actual value may be determined using a market approach, which considers sales of similar properties” but the assessor must also “consider the specific attributes of each property's improvements, including the assigned quality grade, to determine the property's individual worth.”
The Court considers the exhibits attached to the Amended Complaint (photocopies of tax statements for tax years 2021 and 2022, a “Comparable Sales Grid” Plaintiff received from the County Assessor, 2021 and 2023 Real Property Notices of Valuation, a sales grid Plaintiff obtained from a realtor, and a discovery response from Jefferson County Board of Equalization in a state court case West v. Jefferson County Board of Equalization, No. 2021CV232 (Jefferson Cnty. Dist. Ct. August 31, 2022), ECF No. 23 at 15-25) to be incorporated into the Amended Complaint by reference. See Gee v. Pacheco, 627 F.3d 1178, 1186 (10th Cir. 2010).
Such property valuations occur every two years. Colo. Rev. Stat. § 39-1104(10.2).
When asked to provide the materials upon which the 2021 valuation was based, the County Assessor allegedly provided Plaintiff with “a falsified ‘market approach' comparable sales grid . . . with the $680,344 mass appraisal value pasted over the calculated ‘actual value'” for Plaintiff's property. ECF No. 23 at 9, 19. When the County Assessor allegedly overvalued the property at $933,239.00 in 2023, Plaintiff again requested the materials upon which the assessment was based. Id. at 10. In response, the County Assessor provided a “list of sales in market areas,” “images of dialogue boxes in an application,” and “a misinformation claim” about what the state statute meant. Id. at 11. Plaintiff claims that his property was overvalued in 2023 by $122,599.00. Id. at 11, 18, 21 (“statutory Market Approach Comparable Sales Grid obtained from a Realtor shows a Current Year Actual Value of $810,640”).
Plaintiff claims damages of $7,660.40 in taxes he paid based on “wrong and illegal mass appraisal value” for tax years 2021 and 2022, plus lost interest. Id. at 11. He also requests that the County Assessor be ordered to stop using “mass appraisal value” as a “current actual value” for any specific property's notice of valuation or tax calculation. Id. at 12. Lastly, Plaintiff requests punitive damages totaling $12 million. Id.
III. PRO SE PLAINTIFF
Plaintiff proceeds pro se. Accordingly, the Court “review[s] his pleadings and other papers liberally and hold[s] them to a less stringent standard than those drafted by attorneys.” Trackwell v. United States, 472 F.3d 1242, 1243 (10th Cir. 2007) (citations omitted). However, a pro se litigant's “conclusory allegations without supporting factual averments are insufficient to state a claim upon which relief can be based.” Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir. 1991). A court may not assume that a plaintiff can prove facts that have not been alleged, or that a defendant has violated laws in ways that a plaintiff has not alleged. Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983); see also Whitney v. New Mexico, 113 F.3d 1170, 1173-74 (10th Cir. 1997) (the court may not “supply additional factual allegations to round out a plaintiff's complaint”); Drake v. City of Fort Collins, 927 F.2d 1156, 1159 (10th Cir. 1991) (the court may not “construct arguments or theories for the plaintiff in the absence of any discussion of those issues”). A plaintiff's pro se status does not entitle him to an application of different rules. See Montoya v. Chao, 296 F.3d 952, 957 (10th Cir. 2002).
IV. PLAINTIFF'S MOTION TO ADD DEFENDANTS
Prior to filing the Motion to Add Defendants, the County Assessor moved to dismiss the initial complaint, Plaintiff then filed the Amended Complaint, and the parties have now fully briefed Defendants' Motions to Dismiss. The Motion to Add Defendants seeks to add as new defendants Jefferson County Treasurer Jerry DiTullio and Executive Director of the Department of Local Affairs Maria De Cambra. ECF No. 39 at 3. In his motion, Plaintiff argues that Ms. De Cambra should be named as a defendant because Mr. Lehto has taken an education course titled “Introduction to Ad Valorem Mass. Appraisal,” which is listed on the Department of Local Affairs website, such that the department is allegedly “complicit with the other Defendants in providing a non-statutory . . . assessment methodology and value.” Id. at 2-3, 10, 14. Plaintiff further argues that Mr. DiTullio should be named as a defendant because “[h]e used the non-statutory assessed/actual/current value, assigned to the Plaintiff's property, to calculate the ‘damages' incurred by the Plaintiff” and was therefore a “down-stream participant” in the alleged constitutional violations. Id. at 4.
Because Plaintiff's Motion to Add Defendants seeks to revise the operative complaint by adding new defendants, the Court construes it as a motion to amend a pleading. Federal Rule of Civil Procedure 15(a)(2) provides that, after a party has already amended his pleading once, “a party may amend its pleading only with the opposing party's written consent or the court's leave. The Court should freely give leave when justice so requires.” Fed.R.Civ.P. 15(a)(2). “Refusing leave to amend is generally only justified upon a showing of undue delay, undue prejudice to the opposing party, bad faith or dilatory motive, failure to cure deficiencies by amendments previously allowed, or futility of amendment.” Frank v. U.S. W., Inc.,3F.3d 1357, 1365 (10th Cir. 1993). Amendment is futile “if the complaint, as amended, would be subject to dismissal.” Full Life Hospice, LLC v. Sebelius, 709 F.3d 1012, 1018 (10th Cir. 2013) (internal citation and quotation marks omitted).
Additionally, D.C.COLO.LCivR 15.1(b) provides in relevant part:
A party who files an opposed motion for leave to amend or supplement a pleading shall attach as an exhibit a copy of the proposed amended or supplemental pleading which strikes through (e.g., strikes through) the text to be deleted and underlines (e.g., underlines) the text to be added. Unless otherwise ordered, the proposed amended or supplemental pleading shall not incorporate by reference any part of the preceding pleading, including exhibits.
D.C.COLO.LCivR 15.1(b).
Plaintiff has not filed a proposed amended complaint, nor the “redline” attachment required under the Local Rules. The operative Amended Complaint, ECF No. 23, does not contain any allegations regarding these proposed new defendants, and the Court may not consider allegations made in the Motion to Add Defendants as though they had been included in a proposed complaint. See Brown v. Harris, No. CIV.A.05-CV-02203-WD, 2006 WL 3833938, at *2 (D. Colo. Dec. 28, 2006) (“[P]laintiff may not simply file piecemeal amendments and supplements to his complaint....[I]t is entirely appropriate to require Plaintiff to set forth all of his original and supplemental allegations and claims in a single document.”).
As described in more detail below in the discussion regarding the Tax Injunction Act, the Court believes that Plaintiff's Motion to Add Defendants would be futile and should be DENIED. See Session v. Carson, No. 18-cv-00239-PAB-KLM, 2019 WL 4727634, at *2 (D. Colo. Sept. 27, 2019) (denying plaintiff's motion to amend the pleadings as futile where the allegations in the operative and amended complaints were identical, and “there are no factual allegations in the amended complaint that would entitle plaintiff to obtain relief against any of the proposed defendants”); see also Ogden v. San Juan County, 32 F.3d 452, 455 (10th Cir. 1994) (holding that a party's “pro se status does not excuse the obligation of any litigant to comply with the fundamental requirements” of the Federal Rules of Civil Procedure). Because the Amended Complaint as a whole is barred by the Tax Injunction Act, adding more defendants without substantially modifying the claims would be an exercise in futility.
V. DEFENDANTS' MOTIONS TO DISMISS
The County Assessor argues that this Court lacks subject matter jurisdiction over Plaintiff's claims pursuant to Rule 12(b)(1) because (1) Plaintiff has not exhausted the administrative remedies provided in Colo. Rev. Stat. § 39-8-108(1); (2) the methodology used to assess the value of real property for taxation purposes is a subject for legislative (and not judicial) determination; (3) the Tax Injunction Act, 28 U.S.C. § 1341, precludes subject matter jurisdiction; (4) the parallel state court proceeding dictates that this federal case should be dismissed, or alternatively stayed, on abstention grounds. ECF No. 26. The County Assessor additionally argues that the case should be dismissed pursuant to Rule 12(b)(6) because Plaintiff fails to state a procedural or substantive Fourteenth Amendment Due Process claim upon which relief can be granted. Id. The County Employees join in the County Assessor's arguments, and additionally argue that the Amended Complaint must be dismissed because the County Employees, as government officials, are entitled to qualified immunity. ECF No. 25.
The Court begins by addressing the County Assessor's third argument regarding the Tax Injunction Act because it is dispositive of all of Plaintiff's claims. Ultimately, the Court concludes that it lacks subject matter jurisdiction under the Tax Injunction Act and believes that this lawsuit should be dismissed.
A. APPLICABLE LEGAL STANDARDS
Rule 12(b)(1) empowers a court to dismiss a complaint for “lack of subject matter jurisdiction.” Fed.R.Civ.P. 12(b)(1). Dismissal under Rule 12(b)(1) is not a judgment on the merits of the plaintiff's case, but only a determination that the court lacks authority to adjudicate the matter. See Butler v. Kempthorne, 532 F.3d 1108, 1110 (10th Cir. 2008). A court lacking jurisdiction “must dismiss the cause at any stage of the proceeding in which it becomes apparent that jurisdiction is lacking.” Full Life Hospice, LLC v. Sebelius, 709 F.3d 1012, 1016 (10th Cir. 2013). A motion to dismiss under Rule 12(b)(1) “admits all well-pleaded facts in the complaint as distinguished from conclusory allegations.” Smith v. Plati, 258 F.3d 1167, 1174 (10th Cir. 2001). The burden of establishing subject matter jurisdiction is on the party asserting jurisdiction. See Pueblo of Jemez v. United States, 790 F.3d 1143, 1151 (10th Cir. 2015). Accordingly, Plaintiff bears the burden in this case of establishing that this Court has jurisdiction to hear his claims.
Generally, Rule 12(b)(1) motions to dismiss for lack of subject matter jurisdiction take two forms. Holt v. United States, 46 F.3d 1000, 1002 (10th 1995).
First, a facial attack on the complaint's allegations as to subject matter jurisdiction questions the sufficiency of the complaint. In reviewing a facial attack on the complaint, a district court must accept the allegations in the complaint as true. Second, a party may go beyond allegations contained in the complaint and challenge the facts upon which subject matter jurisdiction depends. When reviewing a factual attack on subject matter jurisdiction, a district court may not presume the truthfulness of the complaint's factual allegations. A court has wide discretion to allow affidavits, other documents, and a limited evidentiary hearing to resolve disputed jurisdictional facts under Rule 12(b)(1). In such instances, a court's reference to evidence outside the pleadings does not convert the motion to a Rule 56 motion.Id. at 1002-03 (citations omitted); see also Pueblo of Jemez, 790 F.3d at 1148 n.4.
In this case, Defendants make a facial argument because they assert that the Amended Complaint itself insufficiently alleges subject matter jurisdiction. Therefore, the Court accepts the factual allegations in the Amended Complaint as true, and evaluates whether it has authority to adjudicate the case.
B. ANALYSIS
The Tax Injunction Act states that “[t]he district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State.” 28 U.S.C. § 1341; see also Marcus v. Kan. Dep't of Revenue, 170 F.3d 1305, 1309 (10th Cir. 1999). The United States Supreme Court has “interpreted and applied the Tax Injunction Act as a ‘jurisdictional rule' and a ‘broad jurisdictional barrier.'” Marcus, 170 F.3d at 1309 n.2 (quoting Arkansas v. Farm Credit Servs. of Cent. Ark., 520 U.S. 821, 825 (1997)). Accordingly, in the Tenth Circuit, the Tax Injunction Act is considered “a bar to federal jurisdiction over cases involving the enjoinment, suspension, restraint, levy, or collection of taxes imposed by states.” Id.
In his opposition to the Motions to Dismiss, Plaintiff argues that the Tax Injunction Act is irrelevant and contends that this case is not about taxes or property valuation. ECF No. 27 at 7. Plaintiff states that he does not dispute the valuation of his property or the taxes he paid. Id. At the hearing, Plaintiff advanced a novel theory that the $7,660.40 he paid to the state-the same total dollar amount that his 2021 and 2022 tax statements state that he owes in taxes-was a “payment” rather than a “tax,” because “taxes” must be correctly calculated, “and if they are not correct, they are not taxes- they are just payments.” ECF No. 56. Plaintiff has not cited any authority in support of this argument. Plaintiff has stated many times what this case is not about, but in the few instances where he articulates what this case is about, he is clearly describing property valuation and property taxes. See ECF No. 27 at 6-7 (Plaintiff “seeks to recover the financial damages he incurred when the Assessor installed (without providing State or Federal due process), and executed a non-statutory appraisal/assessment methodology to calculate a therefore wrong value for his property.”); ECF No. 23 at 11 (requesting “[t]he return to Plaintiff of the $7,600.40 tax payment,” and alleging that Plaintiff's property value and tax burden were incorrect sums created via the implementation of a “wrong and illegal” calculation).
The Court is not persuaded by Plaintiff's re-characterizations of the issues presented in this case. Plaintiff is plainly disputing the proper calculation of his property value (assessed in tax years 2021 and 2023) and corresponding property taxes (paid in tax years 2021 and 2022). Accordingly, the Court finds that this lawsuit falls within the ambit of the Tax Injunction Act because it involves a request to “enjoin, suspend or restrain the assessment, levy or collection of any tax under State law.” 28 U.S.C. § 1341.
Additionally, the state of Colorado provides a “plain, speedy, and efficient remedy” to resolve Plaintiff's claims. State statutes provide the remedy for taxpayers who wish to dispute the valuation of their real property. See Colo. Rev. Stat. § 39-5-122 (outlining process by which a property owner may initially object to the valuation of their property to the county assessor); id. at § 39-8-106 (process by which “any person whose objections or protests have been refused or denied by the assessor” can appeal to the county board of equalization); id. at § 39-8-108 (if a petition to the county board of equalization (“BOE”) is denied in whole or in part, “the petitioner may appeal the valuation . . . to the board of assessment appeals or to the district court . . . [or] may submit the case to arbitration”).
Indeed, Plaintiff has challenged these same issues via the administrative pathways prescribed by these statutes. He challenged the property valuation for tax year 2021 by protesting to the County Assessor, then petitioned the Jefferson County BOE, then appealed to the Jefferson County District Court, and finally appealed to the Colorado Court of Appeals. See ECF No. 26-2 at 2-4 (denying Plaintiff's administrative appeal of the $680,344.00 valuation of his property for tax year 2021, despite Plaintiff's “argument on what he believed to be incorrect mathematical equations presented in the County's Comparable Sales Grid spreadsheet, and specifically in how the ‘Final Adjusted Market Value' and ‘Current Value' were derived.”); West v. Jefferson Cnty. Bd. of Equalization, No. 23CA0153, 2024 WL 738517, at *1 (Colo.App. Feb. 22, 2024) (affirming district court decision). Plaintiff has not appealed the decision to the Colorado Supreme Court, and the deadline to do so has now passed. Colo.App. R. 4(a)(1). Plaintiff similarly began the administrative process to challenge the property valuation for tax year 2023. In June 2023-approximately two months before filing this lawsuit in federal court-Plaintiff protested the valuation to the County Assessor, and then in September 2023, petitioned the Jefferson County BOE. See ECF Nos. 26-3, 26-4.
The Court may take judicial notice of state court records and matters of public record when considering a facial challenge to subject matter jurisdiction. Thurman v. Steidley, No. 16-CV-554-TCK, 2017 WL 2435287, at *4 (N.D. Okla. June 5, 2017) (citing St. Louis Baptist Temple, Inc. v. Federal Deposit Ins. Corp., 605 F.2d 1169, 1172 (10th Cir. 1979)); Tal v. Hogan, 453 F.3d 1244, 1265 (10th Cir. 2006).
The Tax Injunction Act is intended to prevent federal courts from meddling in this exact kind of state tax dispute. See Rubeck v. Divis, No. 21-8043, 2022 WL 278375, at *1 (10th Cir. Jan. 31, 2022) (dismissing 42 U.S.C. § 1983 lawsuit which disputed property taxes owed). In addition to barring injunctive relief, the Act bars declaratory relief, California v. Grace Brethren Church, 457 U.S. 393, 408 (1982), and suits for damages as well, Brooks v. Nance, 801 F.2d 1237, 1249 (10th Cir. 1986).
Amongst other things, Mr. West seeks relief in the form of “[t]he return to Plaintiff” of all taxes paid on his Property for the 2021 and 2022 tax years, injunctive relief in the form of an order that the Assessor “cease and desist” the manner in which the office calculates assessed values, an order that “the Assessor [] fix his broken in-house Comparable Sales Adjustment Grid software application and build public confidence,” and punitive damages totaling $12 million dollars. ECF No. 23 at 11-13. It is obvious that this is a suit that seeks to enjoin or restrain the assessment, levy, and collection of Colorado property tax from Mr. West. Therefore, the Tax Injunction Act divests this Court of subject matter jurisdiction over this matter, and consequently, the case should be dismissed pursuant to Rule 12(b)(1).
VI. MOTION FOR SUMMARY JUDGMENT
Because the Court recommends that Defendants' Motions to Dismiss be granted, it also recommends that Plaintiff's motion for summary judgement on these same claims be denied. Johnson ex rel. Johnson v. Bodenhausen, 835 F.Supp.2d 1092, 1096 (D. Colo. 2011).
VII. CONCLUSION
For the reasons set forth above, it is hereby RECOMMENDED that Defendants' Motions to Dismiss, ECF Nos. 25 & 26, be GRANTED, and Plaintiff's Motion to Add Defendants, ECF No. 39, and Motion for Summary Judgment, ECF No. 48, be DENIED.