author: Judge NEY.

text:
    The PEOPLE of the State of Colorado, Plaintiff-Appellee, v. Dudley STEPHENSON, Defendant-Appellant.
    No. 99CA0484.
    Colorado Court of Appeals, Div. I.
    Nov. 23, 2001.
    Rehearing Denied March 14, 2002.
    Certiorari Denied Oct. 21, 2002.

      Ken Salazar, Attorney General, Evan W. Jones, Assistant Attorney General, Denver, CO, for Plaintiff-Appellee.
    David S. Kaplan, Colorado State Public Defender, Lisa Dixon, Deputy State Public Defender, Denver, CO, for Defendant-Appellant.
   Opinion by

Judge NEY.

Defendant, Dudley Stephenson, appeals from the judgment of conviction entered on jury verdicts finding him guilty of felony murder, aggravated robbery, and tampering with physical evidence. We reverse and remand for a new trial.

It is undisputed that defendant and his wife planned to steal a car. In response to a classified advertisement, they went to the victim's home. During the theft of his car, the victim was shot and killed. Defendant and his wife then left the scene in the vie-tim's car.

The evidence at trial was disputed as to whether defendant or his wife was the shooter. Defendant's theory of the case was that he was guilty of theft, but not of aggravated robbery, because he did not intend to use force to steal the victim's car. He alleged that he was not armed and had no reasonable basis to believe that his wife was armed, and that she was the shooter. Therefore, under his theory, he could not be guilty of felony murder. See § 18-8-102(1)(b), C.R.8.2001.

I.

On appeal, defendant contends that the trial court erred in admitting an out-of-court statement made by his wife. Because we conclude that admission of the statement violated defendant's rights under the confrontation clauses of the United States Constitution and the Colorado Constitution, we agree.

Defendant moved to exclude the wife's statements as inadmissible hearsay. The court granted the motion except as to the wife's statement to the police officer who first spoke with her after she voluntarily reported the crime. The court ruled that the statement was admissible as either an excited utterance or a statement against penal interest.

We conclude that the statement against penal interest exception to the hearsay rule would apply, but defendant's confrontation clause rights were violated nonetheless.

A.

An excited utterance is a "statement relating to a startling event or condition made while the declarant was under the stress of excitement caused by the event or condition." CRE 808(2).

Before a statement may be admitted under CRE 8083(2), three requirements must be met: (1) the event must be sufficiently startling to render normal reflective thought processes of the observer inoperative; (2) the statement must be a spontaneous reaction to the occurrence; and (8) direct or cireumstan-tial evidence must exist to allow the jury to infer that the declarant had the opportunity to observe the startling event. People v. Dement, 661 P.2d 675 (Colo.1983).

It is undisputed that defendant's wife witnessed the event, and it is clear that she was distressed at the time of the statement. However, defendant argues that her statement, given at least three hours after the shooting, was not a spontaneous response to a startling event that left no time for reflective thought. We agree.

After leaving the victim's home in the vie-tim's car, defendant and his wife discussed their future conduct. They went to a restaurant where defendant discarded his shirt and the gun, and his wife called two friends to get advice or seek refuge. Ultimately, defendant's wife went to her mother's home and then to her mother's workplace. After talking with her daughter, the mother called 911 and reported that defendant had killed someone.

The police arrived, and the wife gave her statement to one of the officers. The officer testified that when she arrived, there was a frantic air in the room bordering on panic. The wife was speaking very quickly. Part of the statement was given in the narrative, and part was prompted by clarification questions asked by the officer.

Defendant's wife told the officer that she and defendant had planned the theft and jointly purchased a gun to use in the theft, and that defendant shot the victim. The statement, which was given at least three hours after the incident, was about five minutes in length. Defendant's wife was then taken into custody.

Defendant argues fifteen minutes is the longest delay between a startling event and an excited utterance that Colorado appellate courts have permitted. See People v. Hulsing, 825 P.2d 1027 (Colo.App.1991). But see People v. Martinez, 18 P.3d 831 (Colo.App.2000)(victim's statement, made within 15 or 20 minutes after she was removed from the seene, was an excited utterance); People v. Fincham, 799 P.2d 419 (Colo.App.1990) (allowing excited utterances of children made less than two hours after mother's abduction).

The excited utterance exception "has been liberally interpreted so as to extend to statements made following a lapse of time from the startling event itself." There is no bright-line time limitation "because the duration of stress will obviously vary with the intensity of the experience and the emotional endowment of the individual." People v. Hulsing, supra, 825 P.2d at 1031. See also U.S. v. Alfonso, 66 F.Supp.2d 261 (D.P.R.1999).

Under the cireumstances here, we conclude that the statement was so far removed from the startling event, with several independent interludes of reflective thought, that the trial court abused its discretion in admitting the statement as an excited utterance under CRE 808(2).

B.

The statement against interest exception to the hearsay rule, as relevant here, permits the admission of a statement that "at the time of its making ... so far tended to subject [the declarant] to civil or criminal liability ... that a reasonable [person] in [the declarant's] position would not have made the statement unless [the person] believed it to be true." CRE 804(b)(8).

Trial courts are given wide discretion in determining the admissibility of evidence, including the admission of statements against penal interest. See People v. Barnum, 23 P.3d 1287 (Colo.App.2001)(cert. granted June 11, 2001).

As a threshold matter, CRE 804(b)(8) requires that the declarant be unavailable. People v. Newton, 966 P.2d 563 (Colo.1998). Here, there is no dispute that defendant's wife was unavailable based on her invocation of her Fifth Amendment privilege against self-inerimination. See CRE 804(a)(1); People v. Farrell, 34 P.3d 401 (Colo.2001); Stevens v. People, 29 P.3d 305 (Colo.2001).

Under CRE 804(b)(8), the statement must tend to subject the declarant to criminal liability, and the trial court must determine whether a reasonable person in the declarant's position would not have made the statement unless the person believed it to be true. People v. Newton, supra.

Defendant argues that his wife's statement was not a statement against her penal interest because, although it subjected her to criminal liability for the less serious charges, it subjectively served to exonerate her of the more serious charge of murder, which she attributed to defendant, and further, she did not seem to appreciate that her statement exposed her to criminal liability for the more serious charges. We are not persuaded.

We cannot say that the trial court abused its discretion in concluding that the wife's statement was against her penal interest. She admitted to participating in a planned theft of a car at gunpoint and to her peripheral involvement in the killing of the owner. See People v. Newton, supra (a statement may be against penal interest when it admits the declarant was an accessory to a robbery).

We therefore conclude that, although we might have reached a different result under these circumstances, the trial court did not abuse its discretion in concluding that the statement met the evidentiary criteria for admissibility under CRE 804(b)(8) as a statement against penal interest.

C.

However, a statement that would be admissible as a hearsay exception under the rules of evidence may nevertheless be deemed inadmissible pursuant to the confrontation protections contained in the United States and Colorado Constitutions. U.S. Const. amends. VI, XIV; Colo. Const. art. II, § 16; Stevens v. People, supra.

Out-of-court statements offered against an accused are constitutionally admissible only if the prosecution demonstrates that: (1) the declarant is unavailable; and (2) the statements either fall within a "firmly rooted" hearsay exception or bear "particularized guarantees of trustworthiness." Stevens v. People, supra, 29 P.3d at 311 (quoting Ohio v. Roberts, 448 U.S. 56, 66, 100 S.Ct. 2531, 2539, 65 L.Ed.2d 597, 608 (1980)).

As previously noted, it is undisputed that defendant's wife was an unavailable declar-ant.

Furthermore, we conclude that because the wife's statement against penal interest was made to the police, it does not fall within a firmly rooted exception to the hearsay rule. See Stevens v. People, supra, 29 P.3d at 313 (although confessions made to fellow prisoners, family members, and friends may fall within a firmly rooted hearsay exception, "custodial confessions taken by law enforcement officers with a view to prosecution" are not within a firmly rooted exception). Seq, e.g., People v. Jensen, 55 P.3d 135 (Colo.App.2001) (statement was not inherently unreliable because co-defendant was not in custody and the statement was made to a friend).

Thus, our inquiry is whether the wife's statement here bore sufficient particularized guarantees of trustworthiness so as to be admissible.

Statements made by an accomplice that implicate another accused are presumptively unreliable. Lilly v. Virginia 527 U.S. 116, 119 S.Ct. 1887, 144 LEd.2d 117 (1999). This presumption is based on the "strong interest a co-defendant has in exeulpating his actions while at the same time inculpating another." Stevens v. People, supra, 29 P.3d at 313.

To overcome this presumption of unreliability, particularized guarantees of trustworthiness must be inherent in the totality of the cireumstances so that cross-examination of the declarant as to the truthfulness of the statement would be of "marginal utility." Stevens v. People, supra, 29 P.3d at 311 (quoting Lilly v. Virginia, supra, 527 U.S. at 136, 119 S.Ct. at 1900, 144 LEd.2d at 134). The marginal utility. test creates a "high burden of truthfulness." People v. Farrell, supra, 34 P.3d at 406.

In Lilly v. Virginia, supra, the Supreme Court reviewed an accomplice's statement admitting his involvement in a crime spree, but implicating the defendant of more serious crimes, such as murder. The plurality ruled that the accomplice's confession implicating the defendant did not fall within a "firmly rooted" hearsay exception and, furthermore, that there were not adequate guarantees of trustworthiness in the totality of the cireum-stances to overcome the presumption of unreliability of an accomplice's statements.

In Stevens v. People, supra, the Colorado Supreme Court applied the rationale of Lilly v. Virginia, supra, to a murder-for-hire case in which the declarant made a custodial confession that he was the shooter, but inculpated the accused as soliciting the murder. The court first concluded that the hearsay statement was admissible as a statement against penal interest by an unavailable witness, and that the statement was not within a firmly rooted exception to the hearsay rule. Stevens v. People, supra, 29 P.3d at 313.

The Stevens court further concluded that custodial confessions by a co-defendant inculpating the accused are "presumptively unreliable," and therefore such statements are only admissible if they are supported by guarantees of trustworthiness. Stevens v. People, supra, 29 P.3d at 313.

Next, in analyzing whether the statement bore sufficient guarantees of trustworthiness, the court looked at the "totality of the circumstances surrounding the making of the statement." Stevens v. People, supra, 29 P.3d at 314; see People v. Newton, supra (the statement must possess reliability by its inherent trustworthiness, not by reference to other evidence at trial).

Courts have "considerable leeway in their consideration of appropriate factors" to determine whether guarantees of trustworthiness exist. Stevens v. People, supra, 29 P.3d at 314 (quoting Idaho v. Wright, 497 U.S. 805, 822, 110 S.Ct. 3139, 3150, 111 L.Ed.2d 638, 656 (1990)). Such factors may include, but are not limited to: the declar-ant's motivation for making the statement; the cireumstances, such as place and time, under which the statement was made; the relationship of the declarant to the listener, e.g., the police as opposed to family; whether the statement was voluntary or coerced; the content of the statement, e.g., the level of detail and the declarant's personal knowledge of the events; whether the statement was obtained in exchange for a benefit; and the mental and physical condition of the declar-ant. Stevens v. People, supra.

The Stevens court continued its analysis by determining that "the most important determination as to its trustworthiness is whether the statement at issue is genuinely self-ineul-patory or whether it shifts the blame from the confessor to the defendant." Stevens v. People, supra, 29 P.3d at 314. See also People v. Farrell, supra. However, "an evaluation as to whether a statement is genuinely self-inculpatory is only one of the factors to be analyzed and is not by itself dispositive." Stevens v. People, supra, 29 P.3d at 315.

The Stevens court analyzed the cireum-stances surrounding the statement, emphasizing that the declarant "did not minimize his involvement in the murder nor did he shift the responsibility for committing the murder to the defendant." Stevens v. People, supra, 29 P.3d at 315. The court concluded that the statement was supported by sufficient guarantees of trustworthiness to overcome the presumption of unreliability, and the statement was "genuinely self-ineul-patory and was not designed to shift the blame to the defendant or to curry favor with law enforcement officials." Stevens v. People, supra, 29 P.3d at 318.

Subsequently, in People v. Farrell, supra, the supreme court reviewed the admission of an unavailable co-defendant's statement against interest, which implicated the defendant and was made in the course of a custodial interrogation. The Farrell court applied the rationale of Stevens v. People, supra, to conclude that the statement was admissible because it contained sufficient guarantees of trustworthiness. Specifically, the court stated that "the most important factor in evaluating the reliability of the tendered statement is whether it was genuinely self-inculpatory," as opposed to the case where the statement served to "merely [shift] the blame from the declarant to the defendant." People v. Farell, supra, 34 P.3d at 407.

In evaluating the facts presented there, the Farrell court determined that the statement was "blatantly self-inculpatory," because the co-defendant accepted direct culpability and did not attempt to minimize his own involvement, attributed many of the most incriminating actions to himself, and accepted sole responsibility for some of the crimes. Furthermore, the statements inculpating the defendant were inextricably intertwined with the self-inculpatory portions of the co-defendant's confession. The court also looked at additional factors of the statement's reliability to support its conclusion that the statement was constitutionally admissible: the high level of detail; the fact it was made immediately after the eriminal episode; the absence of police coercion or offers of special treatment; the absence of evidence of a retaliative motive; and the apparently unimpaired mental or physical condition of the co-defendant.

In both Stevens and Farrell, the supreme court reviewed statements that were genuinely self-inculpatory in that they did not shift the blame for the most serious erimes from the declarant to the defendant, nor did the statements minimize the declarant's involvement. Thus, in those cases, the "most important" factor for assessing if the intrinsic truthfulness of the statement-its unquestionably self-inculpatory nature-acted to overcome the presumption that statements made by an accomplice are unreliable.

Here, in contrast, the wife's statement was not genuinely self-inculpatory because it included both inculpatory and exculpatory blame-shifting elements. The statement was an admission of the wife's involvement in the crimes, but, in contrast to the statement in Stevens and Forrell, also subjectively served to exonerate her of the murder. While the felony murder doctrine may render this distinction legally moot, such distinction does not purge the statement of its blame-shifting component, and thus of its suspect nature, because it acted to shift and spread the blame to defendant.

Neither Stevens nor Farrell addressed the issue presented here, where the factors for assessing the inherent reliability of the statement at issue both support and detract from its trustworthiness.

Here, on the one hand, factors supporting a determination of trustworthiness are that the statement was made after the wife's mother called the police and before the wife was in custody. No lenient treatment was offered in exchange for the statement, and no police coercion was used. Apparently, much of the statement was in narrative form and was given under stressful cireum-stances. Finally, there was no evidence that the wife was mentally or physically unstable.

On the other hand, factors detracting from the statement's trustworthiness include the wife's awareness that she would be connected to the crimes because she had left her mother's truck at the seene. Thus, she had a strong motivation to distance herself from the more serious crime of murder, and therefore the fact that she voluntarily spoke to the police is less compelling.

Moreover, the wife's statement was made to the police, not to a friend or family member, it shifted the blame to defendant for the shooting, and it minimized her participation. Additionally, the wife's statement, as it related to defendant's actions, consisted of generalizations that lacked detail. Moreover, her professed motivation for the statement-to bring aid to the victim-is questionable because she waited several hours before contacting police and stated that she did not know where the victim's house was, although she admitted that she had driven there and back earlier that afternoon.

We conclude that the factors detracting from the trustworthiness of the wife's statement significantly outweigh the factors in favor of trustworthiness.

Thus, applying the rationale of Lilly, Farrell, and Stevens to the case before us, we conclude that admission of the wife's statement violated defendant's rights under the confrontation clause because the presumption of unreliability was not overcome by guarantees of trustworthiness, in that it is not "so clear from the surrounding civreumstances that the test of cross-examination would be of marginal utility" in assessing the truthfulness of the statement. See Stevens v. People, supra, 29 P.3d at 311 (quoting Lilly v. Virginia, supra, 527 U.S. at 136, 119 S.Ct. at 1900, 144 L.Ed.2d at 134).

Specifically here, cross-examination would be beneficial and not of marginal utility to test the truthfulness of the wife's statement with regard to her professed motivation for contacting the police, the lack of detail she provided regarding the actual shooting, and her inability to tell police where the murder took place despite the fact she drove there and back.

Therefore, the admission of the wife's statement violated defendant's rights under the confrontation clauses of the United States and Colorado Constitutions.

D.

Because we have concluded that the admission of the wife's statement was constitutionally erroneous, we must determine whether the error rises to the level of reversible error or was harmless beyond a reasonable doubt.

To find a constitutional error harmless, an appellate court must be confident beyond a reasonable doubt that the error did not contribute to the guilty verdict. See C.R.C.P. 61; Griego v. People, 19 P.3d 1 (Colo.2001); Blecha v. People, 962 P.2d 931, 942 (Colo.1998)(harmless error test "is not whether, in a trial that occurred without the error, a guilty verdict would surely have been rendered, but whether the guilty verdict actually rendered in this trial was surely unattributable to the error").

Here, defendant gave conflicting statements to police: he first claimed to know nothing about the shooting; he then claimed that his wife shot the victim; and finally, he admitted to shooting the victim. At trial he testified that he falsely confessed to the murder because that is what the police "wanted to hear."

Defendant's theory of the case was that he was not guilty of aggravated robbery because he did not intend to use force in robbing the victim of his car, and he did not know that his wife was armed. He contends that he therefore was not guilty of felony murder. Thus, the erroneous admission of the wife's statement, that they had both intended to use the gun to rob the victim and that defendant was the shooter, results in a "reasonable probability" that defendant has been prejudiced by the error. See Blecha v. People, supra, 962 P.2d at 942.

Therefore, we cannot conclude that the error was harmless, and we reverse defendant's conviction and remand for a new trial.

IIL.

Because this issue is likely to recur on retrial, we address defendant's contention that the trial court erred in admitting the videotape of his statement to police. We find no error.

While in police custody, defendant made a statement that was videotaped. During the interrogation, he initially denied all responsibility for the murder and accused his wife of shooting the victim. After the interrogating officer indicated that he did not believe defendant's story, defendant asked for a cigarette break and stated that he would then tell "everything." Following the break, defendant admitted that he shot the victim.

Defendant filed a motion in limine to suppress the videotaped statement. The trial court found, with evidentiary support, that the statement was taken after defendant had waived his rights under Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966). The court analyzed the totality of the circumstances to conclude that the statement was voluntary.

A.

Defendant first argues that the trial court erred in determining that his statement was voluntary. We disagree.

The test for voluntariness requires consideration of the totality of all surrounding circumstances, including the characteristics of the accused and the details of the interrogation, to determine whether the defendant's will was overborne by coercive police conduct. People v. Rivas, 13 P.3d 315 (Colo.2000).

The prosecution has the burden to establish by a preponderance of the evidence that the defendant made the statement voluntarily. People v. Valdez, 969 P.2d 208 (Colo.1998). "[A] trial court's findings of historical fact are entitled to deference by a reviewing court, but the trial court's application of legal standards to those facts is treated as a question of law to be reviewed de novo." People v. Rivas, supra, 13 P.3d at 320.

Defendant maintains that the police used coercive techniques such as: questioning him in the police station; badgering him about how he and his wife planned to pay for the victim's car without apparent means to do so; claiming that the police had "independent evidence" that defendant shot the vie-tim; and characterizing the confession as an "opportunity," which, he claims, was an implied promise of leniency in return for confessing. Defendant also argues that he was particularly susceptible to these techniques because he was in police custody, did not confer with counsel, had drugs and aleohol in his system and was fatigued, and because the interview was lengthy.

A necessary prerequisite to a conclusion of involuntariness is a finding that the police conduct in question was coercive and that the coercive conduct "played a significant role in inducing the statements." People v. Valdez, supra, 969 P.2d at 212.

We cannot conclude that the police interrogation techniques here were coercive. Seq, e.g., People v. Valdez, supra (police conduct that was angry, confrontational, and condemning was not coercive). We also cannot conclude that defendant's will was overborne by improper state conduct. See, eg., People v. Cardenas, 25 P.3d 1258 (Colo.App.2000)(finding a statement voluntary even though the defendant was under the influence of drugs and alcohol). Additionally, we disagree with defendant's contention that by giving him an "opportunity" to confess, the police implied a promise of leniency. See, e.g., People v. Trujillo, 938 P.2d 117 (Colo.1997)(statement was voluntary when police did not promise the defendant anything in return for a confession).

Thus, the trial court did not err in finding that the statement was voluntarily given. See People v. Cardenas, supra (a statement is voluntary when it is not the product of threats or violence and not obtained by any direct or implied promises or by the exertion of any improper influence).

B.

Defendant also contends that the trial court erred in admitting the videotape because the initial portion of the tape, in which defendant denied responsibility for the murder, was partially inaudible and his face was blocked from view. We find no error.

The trial court has broad discretion in determining the admissibility of tape recordings, and their admission will not be disturbed on appeal in the absence of an abuse of discretion. People v. Jeffers, 690 P.2d 194 (Colo.1984).

Defendant has failed to show how he was prejudiced by the inaudible portions of the videotape. The record reveals that the videotape clearly conveyed that defendant initially denied any responsibility for the murder and then, after the break, admitted that he was the shooter.

Therefore, we conclude defendant has not shown prejudice. See People v. Jeffers, supra (ruling no prejudice was shown when the defendant failed to establish how the inaudible segments affected the tapes' reliability). Accordingly, the trial court did not abuse its discretion in admitting the videotape. See People v. Quintana, 189 Colo. 330, 540 P.2d 1097 (1975)(even though parts of an audio-taped statement were inaudible, this fact did not render the entire recording inadmissible).

IIL

We also address defendant's contention that notebooks given to the jury contained information that conflicted with the jury instructions given in his case.

Crim. P. 16(IV)({) requires that notebooks be available for jurors during felony trials. The notebooks here contained general information that defendant objected to as inapplicable or contrary to the cireumstances of his case. Specifically, he challenged the following information contained in the notebooks: that the only difference between a civil and a criminal case is what the parties are called and who represents them; that defendants testify and present evidence; that a defendant could receive a deferred sentence or probation; that every sentence is for a finite period of time; and that a defendant is eligible for parole.

Although we find no reversible error because defendant has not shown prejudice in this case, to avoid confusion in the new trial, the court is directed to edit and correct the information contained in the notebooks.

IV.

Defendant's remaining contentions of error are unlikely to arise on retrial. Therefore, we will not address them.

The judgment is reversed, and the case is remanded for a new trial.

Judge METZGER and Judge TAUBMAN concur.


source: Caselaw Access Project

author: Judge KAPELKE.

license: Public Domain

text:
    WELBY GARDENS COMPANY, Petitioner-Appellee, and Colorado Board of Assessment Appeals, Appellee, v. ADAMS COUNTY BOARD OF EQUALIZATION, Respondent-Appellant.
    No. 01CA0307.
    Colorado Court of Appeals, Div. V.
    Jan. 3, 2002.
    As Modified on Denial of Rehearing May 23, 2002.
    Certiorari Granted Oct. 28, 2002.

      William A. Mclain, P.C., William A. McLain, Denver, CO, for Petitioner~Appel-lee.
    No Appearance for Appellee.
    James D. Robinson, Adams County Attorney, Jennifer Waseak Leslie, Assistant County Attorney, Brighton, CO, for Respondent, Appellant.

       Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.S.2001.

   Opinion by

Judge KAPELKE.

In this property tas case, respondent, Adams County Board of Equalization (the County), appeals the order of the Board of Assessment Appeals (BAA) determining that certain real property owned by the taxpayer, Welby Gardens Company, should be classified and valued as agricultural land for purposes of ad valorem taxation. We reverse.

The property at issue (the Property) consists of two parcels of land in Adams County, which are primarily used for greenhouses and greenhouse support buildings, including an 8000-square-foot retail garden center and a public parking area. A third parcel, which is leased to a third party and used for growing agricultural crops, is now conceded by the County to be agricultural land.

Taxpayer produces vegetables, flowers, and fruiting plant starts. Most of the products are grown in containers in the greenhouses; however, taxpayer also has a test field of approximately three acres in which plants are grown in the ground. Taxpayer generally does not use the soil from the Property for the greenhouse containers. The environment of the greenhouses is regulated using water systems, humidity pads, fans, and heaters. The plants are primarily sold at wholesale; however, some sales are made at the on-site retail center (which is classified as commercial) and at another retail outlet.

For the tax year 1999, the Adams County Assessor's Office classified and valued the Property as commercial land and improvements. Taxpayer appealed to the Board of Assessment Appeals (BAA). Relying on Morning Fresh Farms, Inc. v. Weld County Board of Equalization, 794 P.2d 1073 (Colo.App.1990), the BAA ruled that the Property should be classified as agricultural.

I.

The County contends that the BAA's statutory interpretation is contrary to the plain language and intent of the Colorado statutes and that the BAA therefore erred in determining that the Property should be classified as agricultural land. We agree.

Findings of fact of the BAA are entitled to deference unless they are unsupported by competent evidence or reflect a failure to abide by the statutory scheme for property tax assessment. Bd. of Assessment Appeals v. E.E. Sonnenberg & Sons, Inc., 797 P.2d 27 (Colo.1990). However, a reviewing court is not bound by the BAA's interpretation of law where it is inconsistent with the clear language of the statute or legislative intent. Douglas County Bd. of Equalization v. Clarke, 921 P.2d 717 (Colo.1996).

Agricultural land in Colorado receives favorable ad valorem tax treatment, calculated on the basis of the earning or productive capacity of the land. Colo. Const. art. X, § 83(1)(@); § 89-1-108(Bb)(a), C.R.S8.2001. As relevant here, "agricultural land" is defined as "[a] parcel of land ... that was used the previous two years and presently is used as a farm or ranch." Section 839-1-102(1.6)(a), C.R.S.2001.

At issue here is the definition of "farm." Section 39-1-102(8.5), C.R.S.2001, defines a "farm" as "a parcel of land which is used to produce agricultural products that originate from the land's productivity for the primary purpose of obtaining a monetary profit." "Agricultural and livestock products" are defined in 39-1-102(1.1), C.R.8.2001, as:

plant or animal products in a raw or unprocessed state that are derived from the science and art of agriculture, regardless of the use of the product after its sale and regardless of the entity that purchases the product. "Agriculture", for the purposes of this subsection (1.1), means farming, ranching, animal husbandry, and horticulture.

The BAA, relying on the dictionary definition of "horticulture," determined that the Property is a farm because it is a parcel of land that produces agricultural products, including products derived from horticulture, for the primary purpose of obtaining a monetary profit. Thus, the BAA ruled that the Property is agricultural land and should be assessed as such.

The County urges that this finding is contrary to the plain language of § 39-1-102(8.5), which requires that the agricultural products "originate from the land's productivity." This language, the County argues, requires a showing that the agricultural products have some connection with the land or soil itself. Because the products here are grown in fully enclosed, environmentally controlled buildings, and in soil obtained from outside sources, the County maintains that they bear no relationship to the land and that the BAA's ruling therefore violates the language and purpose of the statute. We agree.

A reviewing court must construe and apply a statute in accordance with the legislative intent. To determine that intent, we look primarily to the language of the statute itself, and when the statutory language is plain, it must be applied as written and "should not be subjected to a strained or forced interpretation." Boulder County Bd. of Equalization v. M.D.C. Constr. Co., 830 P.2d 975, 980 (Colo.1992). Further, each word and phrase must be given effect, using the commonly accepted meanings. San Miguel County Bd. of Equalization v. Telluride Co., 947 P.2d 1381 (Colo.1997).

According to the plain language of § 39-1-102(8.5), to qualify as a farm, a property must produce agricultural products "that originate from the land's productivity." This requirement is consistent with the constitutional mandate that agricultural land be valued "solely by consideration of the earning or productive capacity of such lands capitalized by a rate as prescribed by law." Colo. Const. art. X, § 8(1)(a). We agree with the County that this language requires that there be some relationship between the agricultural products and the productive capacity of the parcel of land. Where, as here, the land serves only to provide a site for a greenhouse operation, the products involved do not originate from the productivity of the land on which the greenhouses are located.

The BAA relied on Morning Fresh Farms, supra, for its decision. In that case, the plaintiff sought a personal property tax exemption for certain equipment used in its egg production facilities. A division of this court held that a forty-acre portion of the land that included buildings housing hens and egg handling equipment could fall within the definition of a farm under § 39-1-102@8.5). The egg production and hen replacement facilities were entirely self-contained, and none of the hens ever touched the ground. The division held, nevertheless, that there was nothing in the statutory definition of a farm that would exelude this portion of the property from being classified as a farm, and that the equipment thus could be exempt from personal property taxation as "agricultural equipment which is used on a farm or ranch in the production of agricultural products." Morning Fresh Farms, Inc. v. Weld County Bd. of Equalization, supra, 794 P.2d at 1075.

In following Morning Fresh Farms, the BAA here stated that "there is no material difference between a chicken sitting on wooden slats and producing an egg for profit, and a greenhouse plant, placed on wooden slats, producing a horticultural product for profit."

We conclude, however, that the facts in Morning Fresh Farms are distinguishable from those here. There, the egg production facility involved a 40 acre portion of an 800-acre farm on which corn, wheat, and alfalfa were grown. Some of the feed for the chickens was grown on the farm. Here, the Property is not a part of a larger agricultural property, but, rather, is itself primarily used for a commercial enterprise. We do not read the Morning Fresh Farms opinion as holding that property can be classified as agricultural even if there is no relationship between the agricultural product and the productivity of the land. However, to the extent that the opinion can be read to so hold, we conclude that it fails to give meaning to all the plain language of the statute, and we would therefore decline to follow it.

Because the agricultural products produced on the Property here do not originate from the land's productivity, as required by the plain language of the statute, we conclude that the Property is not a farm under § 39-1-102(8.5) and thus may not be classified and valued as agricultural for property tax purposes.

IL.

The County also argues that the BAA erred by failing to give deference to the Property Tax Administrator's interpretation of § 39-1-102(1.6)(a), as codified in the Assessors Reference Imbrary. However, because we conclude that the BAA's interpretation is contrary to the plain language of the statute, we need not address the issue.

The order of the BAA is reversed.

Judge VOGT and Justice ERICKSON, concur.


author: Judge ROTHENBERG.

text:
    Mary L. BEACH, Plaintiff-Appellant, v. Karen K. BEACH, Defendant-Appellee.
    No. 01CA0384.
    Colorado Court of Appeals, Div. III.
    Jan. 31, 2002.
    Certiorari Granted Nov. 4, 2002.

      Hanes & Schutz, P.C., Richard W. Hanes, Timothy J. Schutz, Colorado Springs, CO, for Plaintiff-Appellant.
    Michael J. Frederick, Colorado Springs, CO, Defendant-Appellee.
   Opinion by

Judge ROTHENBERG.

Plaintiff, Mary L. Beach, appeals the trial court's judgment following a bench trial in favor of defendant, Karen K. Beach. We reverse and remand for further proceedings.

I. Background

Karen K. Beach (the daughter) is the daughter of Mary L. Beach (the mother) and Ralph W. Beach (the father). In 1993, the father's health had severely deteriorated, and the daughter offered her parents the option of moving to her twenty-acre parcel in El Paso County. The parents orally agreed with the daughter to build an addition to her house at no expense to her so the mother and father could live there for the rest of their lives.

After the father died, the living arrangement between the mother and daughter became strained and eventually culminated in the filing of this lawsuit by the mother against the daughter. The mother sought partition of the addition and also alleged conversion of her personal property. In her answer, the daughter denied the mother had an interest in the property and filed a counterclaim to quiet title.

In the trial management order entered, both parties requested that if the trial court found the daughter had a right to partition, it place a value on the entire property and on the mother's interest in the addition, and then give the daughter an opportunity to purchase the mother's interest. If the daughter did not elect to do so and physical partition was not feasible, the parties asked that the trial court order the property to be sold and that the proceeds be divided based on their respective interests.

After hearing the evidence at trial, the court found the parties had entered into an oral contract that created a life estate in the mother and a remainder interest in the daughter. It also found for the mother on her claim of conversion of personal property and awarded nominal damages.

However, the trial court rejected the mother's claim for partition, concluding she had impliedly waived her right to partition the property because her life estate was limited. After concluding the mother was not entitled to partition, the court "as guidance" to the parties determined the present value of the mother's property interest at $48,000 based on expert testimony that the value of the entire twenty-acre parcel, which includes the addition, was approximately $250,000, and that the value of the addition built by the parents was between $49,500 and $100,000.

IL Partition of the Life Estate

The mother first contends the trial court erred in refusing to partition her life estate interest in the addition. We agree.

A.

Initially, we address and reject the daughter's contention that the mother is precluded as a matter of law from bringing this action to partition her life estate interest in the addition. This issue requires the interpretation of a statute and is therefore a question of law that we review de novo. City of Colorado Springs v. Conners, 993 P.2d 1167 (Colo.2000).

Historically, life estates were not subject to partition from the remainder interest. 2 Thompson on Real Property § 19.05 (D. Thomas 2d ed. 1998). The right to partition is usually only held by co-tenants. Federal Deposit Insurance Corp. v. Mars, 821 P.2d 826 (Colo.App.1991). However, statutes may alter this rule and permit a life tenant to partition his or her interest with the remain-derman. See generally 594 Am.Jur.2d Partition § 88 (2000). Colorado has such a statute.

Section 38-28-101, C.R.S.2001, states that '"Tajlctions for the division and partition of real or personal property or interest therein may be maintained by any person having an interest in such property" (emphasis added).

A life estate is an interest in real property. See 2 Thompson, supra, § 19.02. Accordingly, the holder of the life estate has the statutory right to partition.

Contrary to the daughter's assertion, Federal Deposit Insurance Corp. v. Mars, supra, did not hold that a life estate is not an interest subject to partition and Mars is also factually distinguishable.

There, the parties held "separate concurrent estates," Federal Deposit Insurance Corp. v. Mars, supra, 821 P.2d at 831, in that one party had an interest in the land while the other party had an interest only in the buildings on that land. Further, the trial court did not order partition, finding it would "constitute a waste." Federal Deposit Insurance Corp. v. Mars, supra, 821 P.2d at 831. Instead, the court ordered that the land be sold pursuant to § 38-28-107, C.R.S.2001, which provides: "[IJf ... the court finds that partition of the property cannot be made without manifest prejudice to the rights of any interested party, the court may direct the sale of such property at public sale upon such terms as the court may fix."

On appeal, a division of this court reversed the order of sale. Because neither party had a property interest in the other's estate and therefore had no common interest in the property, the division concluded the trial court could not order a sale of the land pursuant to § 38-28-107. The Mars court explained:

[Wle have found no authority from any jurisdiction for the proposition that a court sitting in equity may order the sale of land in a case such as this, where the present possessory owner has undisputed fee title, in order to benefit one who holds no interest in the land, either present or prospective.

Federal Deposit Insurance Corp. v. Mars, supra, 821 P.2d at 832. The division in Mars did not address whether other types of interests could be partitioned.

Here, it is undisputed that the daughter holds a remainder interest in the addition and that the mother holds the corresponding life estate. Because they have a common interest in the property, we conclude the trial court did not err in determining the mother was entitled to maintain an action under § 38-28-101 for partition of her life estate from the daughter's remainder interest.

B.

Both parties challenge the trial court's interpretation of their oral agreement pertaining to the life estate.

The existence of an oral contract, its terms and conditions, and the intent of the parties are questions of fact to be determined by the trier of fact. See Huddleston v. Union Rural Electric Ass'n, 841 P.2d 282, 291-92 n. 12 (Colo.1992).

If no conflict exists regarding the meaning of the terms used, the intent of the parties is to be determined by the court from those terms as a matter of law. If the court cannot ascertain the parties' intentions from those terms, the question becomes one of fact to be established by extrinsic evidence. Huddleston v. Union Rural Electric Ass'n, supra.

We must accept the trial court's findings of fact unless they are so clearly erroneous as to have no support in the record. Continental Western Insurance Co. v. Jim's Hardwood Floor Co., 12 P.3d 824 (Colo.App.2000). However, we review de novo the questions of law arising in interpreting a contract. Cruz v. Farmers Insurance Exchange, 12 P.3d 307 (Colo.App.2000).

Here, it was undisputed that the parents agreed to pay the daughter approximately $48,000 to build the addition to the daughter's house, that the parents were to live in the addition for the rest of their lives, and that after they both died the addition was to become the daughter's sole property. The record reflects these were the only explicit terms of the oral agreement.

The statute of frauds was not in issue and the parties also do not dispute the trial court's determination, nor do we, that this agreement created a life estate in the parents that allowed them to reside in the addition and also gave the daughter a remainder interest in the addition for which she had no obligation to pay. See Collins v. Shanahan, 34 Colo.App. 82, 88, 523 P.2d 999, 1003 (1974)("The primary characteristic of a life estate in land is that the interest is limited by the life of some person."), aff'd in part & rev'd in part, 189 Colo. 169, 539 P.2d 1261 (1975). It is also undisputed that the life estate was to be measured by the life of the parent who lived longer.

At issue is whether the trial court erred in concluding the mother impliedly waived her right to bring an action for partition of the life estate. We agree with the mother that the trial court erred in reaching that conclusion. ©

The holder of an interest in land may expressly waive the right to partition. See Twin Lakes Reservoir & Canal Co. v. Bond, 157 Colo. 10, 401 P.2d 586 (1965); see also McIntire v. Midwest Theatres Co., 88 Colo. 559, 560, 298 P. 959, 959 (1931)("[Thhere is nothing inalienable about this right of partition. A tenant in common may contract it away. ...").

No one contends such an express waiver occurred here.

A waiver of the right to partition also may be implied when partitioning the interest would undermine a contract between the parties. Twin Lakes Reservoir & Canal Co. v. Bond, supra; see also 59A Am.Jur.2d Partition § 61 (2000).

Here, although the parties never raised the issue in their pleadings or at trial, the trial court concluded the mother had impliedly waived her right to bring a partition action, finding that the mother's life estate was limited and that only she could cccupy the addition.

Relying on Twin Lakes Reservoir & Canal Co. v. Bond, supra, the trial court also determined that:

[blecause the addition is to be {the daughter's] property after the deaths of both parents, it is inherent in the agreement that the property could not be partitioned, nor can.either party be forced to sell her interest. Each party to the agreement waived any right of partition, for to partition the property would be a violation of the intent of the original agreement. (emphasis added)

We conclude there is no record support for the court's findings that the mother's life estate was limited, that only she could occupy the addition, and that partition of the property would be a violation of the intent of the original agreement.

Under the trial court's interpretation of the oral agreement, the mother had a life estate, but could not share it, rent it, or sell it. However, contrary to the trial court's findings, the record clearly reflects there was no express agreement between the parties concerning the mother's waiver of the right to partition, nor did the parties expressly agree to a term limiting the occupancy to only the mother. The mother and daughter both testified they did not discuss these matters. The daughter's testimony indicated that she personally believed the occupancy of the addition was limited to the mother. But, regardless of those personally held beliefs, the terms of the oral agreement express the intent of the parties in creating the life estate.

The parties did agree, with regard to the daughter's remainder interest, that the daughter would acquire the property at no cost upon the mother's death. However, also contrary to the court's finding, there is no evidence in the record of any agreement limiting the mother's life estate interest in the property or suggesting the daughter would not have to pay for the mother's interest if the mother wished to partition her interest or if the daughter wished to acquire that interest before the mother's death.

Twin Lakes Reservoir & Canal Co. v. Bond, supra, does not support the result reached by the trial court and urged by the daughter on appeal. In Twin Lakes, supra, 157 Colo. at 22-23, 401 P.2d at 592, partitioning the property either physically or by sale would have destroyed a lease and an casement between the co-tenants, thus depriving one party of the benefit of the lease and easement. Thus, the court there denied partition.

The daughter's reliance on McIntire v. Midwest Theatres Co., supra, is similarly misplaced. In McIntire, supra, 88 Colo. at 560-61, 298 P. at 959, one of the co-tenants leased the other co-tenant's interest in the property, and the lease was secured by a mortgage. The court concluded there that to partition the property would have defeated the contract between the parties by releasing one co-tenant from the mortgage and the obligation to pay the other co-tenant under the lease.

Here, there was no evidence that partitioning the mother's interest would undermine or defeat the parties' oral agreement or violate any of its terms because the parties never agreed to limit who could reside in the addition, and partition would not deprive the daughter of the value of her remainder interest.

We therefore conclude the trial court erred in finding that the mother's life estate was limited, that it was "inherent in the [parties' oral] agreement that the property could not be partitioned," and that the mother had impliedly waived her right to partition.

IIL Present Value of the Life Estate

The mother next contends the trial court erred in calculating the present value of her life estate. We agree.

If the trial court applies the correct methodology, its award will not be set aside unless it is manifestly and clearly erroneous. However, the trial court's determination of value will not be upheld if the court applies an incorrect method. DBA Enterprises, Inc. v. Findlay, 923 P.2d 298 (Colo.App.1996).

Valuation cannot be based on mere speculation and conjecture, and the trial court has the responsibility to make reasonable findings that provide for a fair, equitable, and adequate calculation of value. Sonoco Products Co. v. Johnson, 23 P.3d 1287 (Colo.App.2001).

A.

Here, after the trial court denied the mother the remedy of partition, the court nevertheless went on to enter a damages award, explaining that it was "to offer guidance" to the parties. The court determined the present value of the addition after subtracting the rental value realized by the mother during her occupancy. The court thus calculated damages using a method not urged by either party in the trial court or on appeal. The trial court did not indicate the legal basis for its calculation and the parties have cited no legal support for the methodology used. Nor do we find support for subtracting the rental value of the mother's past occupancy in determining present value.

We therefore conclude the trial court applied an incorrect methodology in valuing the mother's life estate, and the valuation must be set aside. See DBA Enterprises, Inc. v. Findlay, supra. In so concluding, we acknowledge that this is an issue arising infrequently and that the trial court had little guidance in determining the value of a life estate. We therefore address that issue.

B.

The Colorado General Assembly has addressed the procedures for partitioning property interests. See § 88-28-107. Section 38-28-108, C.R.9.2001, also provides: "The court shall direct the distribution of the net proceeds of such sale and any undistributed income from such property among the persons entitled thereto."

The General Assembly has offered no specific guidance on the exact issue before us, although it has determined the manner in which a life estate should be valued for the purpose of taxation. See § 89-23-116(1), C.R.S.2001. However, that statute has limited applicability in this case because it presupposes a proper value has already been placed on the life estate. We also are unaware of any Colorado appellate decisions applying § 39-23-116(1) or addressing the proper formula for valuing a life estate in a suit for partition.

C.

Other jurisdictions have suggested the following approach in valuing life estates: (1) sell the property encumbered by the life estate; (2) give the holder of the life estate the interest or investment income on the proceeds during the rest of the measuring life; (8) distribute the proceeds from the sale to the remainderman at the expiration of the life estate. See Cox v. Cox, 262 S.C. 8, 202 S.E.2d 6 (1974)(quoting South Carolina Savings Bank v. Stansell, 160 S.C. 81, 158 S.E. 131, 134 (1981)); see also Baskins v. Krepcik, 153 Neb. 36, 43 N.W.2d 624 (1950); Skidmore v. Austin, 261 N.C. 713, 136 S.E.2d 99 (1964); 59A Am.Jur2d Partition § 221 (2000).

However, caution is required in adopting this approach because these jurisdictions have statutory provisions different from those of Colorado. For example, as applied in Cox v. Cox, supra, South Carolina followed the common law rule that life estates are not subject to partition from the remainder interest and did not have a statute similar to § 38-28-101, which alters the common law rule.

Accordingly, we conclude this approach should not be used in determining the entitlement of the holder of a life estate in the event of a court-ordered partition sale.

D.

Another method for valuing a life estate derives from the Code of Federal Regulations concerning estate and gift taxes. We conclude this methodology offers considerable guidance in valuing life estates and should be used, subject to the equitable adjustments discussed below.

Under 26 C.F.R. § 20.20831-7(a), "the fair market value of ... life estates ... is the present value of such interests, determined under paragraph (d) of this section."

Paragraph (d)(2)(Gii) of that section contains the valuation methodology for life estates and provides in relevant part:

If the interest to be valued is the right of a person to receive the income of certain property, or to use certain nonincome-pro-ducing property ... for the life of one individual, the present value of the interest is computed by multiplying the value of the property by the appropriate ... life interest actuarial factor (that corresponds to the applicable section 7520 interest rate and ... life interest period).

26 C.F.R § 20.2031-7(d)@)(@iH) (emphasis added).

The "section 7520 interest rate" is provided by the Internal Revenue Service in a revenue ruling in its monthly Internal Revenue Bulletin.

The appropriate table containing the applicable single life remainder factor is currently Table S and is found at 26 C.F.R. § 20 .2031-7(d)(7).

To complete the calculation, one must obtain the age of the measuring life and the proper interest rate for the month in which partition is ordered. The appropriate remainder factor is found by locating the age of the measuring life in the age column of Table S and connecting that age with the value in the column under the appropriate interest rate. Once that remainder factor is identified, it is subtracted from 1.000000 to determine the life estate factor (the table only pertains to the remainder interest). See 26 C.F.R. § 20.2031-T7(d)(@2)(@i). The value of the property subject to the life estate is then multiplied by this factor.

The Supreme Court of Nebraska has applied this formula in valuing a trust interest and has explained its application in similar terms. In re Estate of Myers, 256 Neb. 817, 827, 594 N.W.2d 563, 570 (1999)(court observed that the Supreme Judicial Court of Maine had used a similar method to establish "the present value of a trust interest providing a fixed income by treating it as an annuity under the appropriate federal tax regulations"); see In re Estate of Fisher, 545 A.2d 1266 (Me.1988). The Nebraska court clarified that it was not holding that "the tax valuation method is the only appropriate method for valuing the present value" of a trust interest, and the court also acknowledged that this method "is at best imperfect" and that "the whole problem of valuing life interests by resort to mortality tables is at best a matter of educated guesswork." In re Estate of Myers, supra, 256 Neb. at 828, 594 NW.2d at 570 (emphasis added)(quoting McMurtry v. Commissioner, 203 F.2d 659, 666 (1st Cir.1953)).

We acknowledge there may be other appropriate methods for valuing a life estate and that the factual cireumstances here are distinguishable from those in Myers. Nevertheless, the Nebraska court's explanation of how to apply the formula in 26 C.F.R. § 20.2031-7(d) offers considerable guidance in resolving the issue before us. In the absence of more specific direction from the General Assembly, we conclude this methodology generally should be used in valuing life estates, subject to the equitable considerations discussed below.

Applying the tax valuation method here, the formula requires that we use a measuring life of seventy-one years because that was the mother's age at the time of the trial.

To find the applicable interest rate, we look to the revenue ruling determining the section 7520 interest rate for January 2001, which is the month that judgment entered. That ruling provides a 6.8% rate in Table 5. Rev. Rul2001-3, 2001-8 LRB. 819. The remainder factor corresponding to a measuring life of 71 years and an interest rate of 6.8% is A6851. Subtracting this value from 1.000000, we arrive at a life estate factor of 58149.

To determine the present value of the mother's life estate in the addition, we next look at the property value of the addition. The trial court here found that property value to be $90,000, and we conclude there is record support for that factual finding. Then $90,000 is multiplied by the factor of .53149. Accordingly, using this methodology, the present value of the mother's life estate at the time of trial was $47,834.10. That figure may vary somewhat on remand because the mother's age will be different and the interest rate may also have changed.

Although we conclude the tax valuation method described here is an appropriate, logical, and consistent method of determining the present value of a life estate, because partition is an equitable remedy we also conclude the trial court has discretion, if it deems such value to be inequitable under all of the cireumstances, to make adjustments that are fair and equitable. For example, the mother was also entitled to use other portions of the daughter's property, which may require an adjustment upward from the value calculated under the above formula. Other adjustments for the parties' specific cireumstances may also be deemed appropriate by the court.

IV. Conclusion

Because we have concluded the mother is entitled to partition of her life estate and the trial court applied an incorrect methodology in determining its value, we remand for a new hearing to determine the value of the mother's life estate under the correct methodology. If the court determines there are equitable reasons for deviating from the methodology set forth above, the court should make findings of fact explaining those reasons and the basis for its determination of value.

After the mother's property interest is valued, the daughter should be allowed to elect to purchase the mother's interest, as both parties have requested here. If the daughter does not elect to do so, the court should then determine, under § 38-28-107, whether physical partition would prejudice the rights of the parties. Should physical partition of the addition cause such prejudice, the court may order the sale of the addition and distribute the proceeds according to the parties' interests therein under § 38-28-108. The trial court may fix the terms of the sale, § 38-28-107, after considering the mother's entitlement to the life interest value calculated pursuant to 26 C.F.R. § 20.2031-7(d) and such equitable adjustments as the trial court may deem appropriate.

The judgment is reversed, and the case is remanded for further proceedings consistent with the views expressed in this opinion.

Judge JONES and Judge NIETO concur.


author: Judge PLANK.

text:
    Valerie A. COLLINS, Plaintiff-Appellant and Cross-Appellee, v. COLORADO MOUNTAIN COLLEGE, a Colorado Junior College District; and Colorado Mountain College Board of Trustees, a Colorado Junior College, Defendants-Appellees and Cross-Appellants.
    No. 00CA2147.
    Colorado Court of Appeals, Div. II.
    Feb. 28, 2002.
    Rehearing Denied March 28, 2002.
    Certiorari Denied Oct. 21, 2002.

      Colorado Education Association, Martha R. Houser, Gregory J. Lawler, Cathy L. Cooper, Sharyn E. Dreyer, Denver, Colorado; United Food & Commercial Workers Union, Local No. 7, Bradley C. Bartels, Wheat Ridge, Colorado, for Plaintiff-Appellant and Cross-Appellee.
    Hall & Evans, LL.C., Daniel R. Satriana, Jr., Denver, Colorado; Beattie & Chadwick, Glenn D. Chadwick, Glenwood Springs, Colorado, for Defendants-Appellees and Cross-Appellants.
   Opinion by

Judge PLANK.

In this employment termination dispute, plaintiff, Valerie A. Collins, appeals from the trial court's judgment in favor of defendants, Colorado Mountain College (CMC) and Colorado Mountain College Board of Trustees (the Board). CMC and the Board cross-appeal the order denying an award of attorney fees and costs. We affirm.

Collins was employed by CMC at its Alpine campus in Steamboat Springs as a full-time financial aid specialist. She also worked under a temporary contract as a part-time adjunct instructor.

In the fall of 1998, Colling's son, a student at the Alpine campus, was accused of certain disciplinary infractions. In the ensuing investigation, the director of financial aid reviewed the son's financial aid status and discovered that Collins had processed his financial aid application. CMC placed Collins on suspension with pay pending completion of an investigation and a predisciplinary hearing.

After further investigation, CMC recommended termination of Collins's employment. CMC placed her on suspension without pay, gave her notice of its recommendation for termination, and gave her the opportunity to appeal the recommendation through CMC's internal grievance procedure. The temporary teaching contract expired shortly thereafter.

CMC's policy manual provides for a three-step grievance procedure for non-faculty members. Collins waived Level I of the grievance procedure, a review by her immediate supervisor.

Level II consists of review by a Peer Review Committee (PRC). The PRC held a hearing at which Collins was represented by independent legal counsel. Counsel for each side had the opportunity to make arguments, present witnesses and evidence, and cross-examine witnesses. After the hearing, the PRC recommended termination of Collins's employment as a financial aid specialist based on four of the five grounds asserted by CMC, finding that any one of those four would be sufficient ecause for termination. Specifically, the PRC found that: (1) Collins ignored a conflict of interest directive against processing financial aid applications of relatives; (2) Collins improperly awarded her son financial aid on the basis that his legal guardian was his grandmother, Collins's mother; (8) Collins inappropriately awarded her son, then a recent high school graduate, a diversity grant that is intended for first-generation college students or students who have left a job to return to college to pursue a new career; and (4) in violation of CMC and federal financial aid policies, Collins ignored conflicting information on her son's application for federal student aid and his admissions applications. The PRC concluded that Collins's actions showed incompetence, inadequate job performance, neglect of duty, dishonesty, and insubordination.

Collins then appealed to Level III, a review and hearing by the CMC president or designee. Under CMC policy, the decision at Level III of the grievance procedure is final and binding. After hearing the parties' oral arguments and reviewing the testimony and exhibits presented at Level II, the Level III hearing officer upheld the findings made by the PRC. The hearing officer characterized Collins's actions as a deliberate attempt to mislead CMC for her son's personal benefit and conclhided that Collins failed to represent herself in an honest manner in her working relationship with CMC. Finding that the position of a financial aid specialist requires trustworthiness, integrity, and honesty, the hearing officer determined that termination of employment was appropriate. CMC then terminated Collins's employment.

Collings did not appeal this decision under C.R.C.P. 106(a)(4). Instead, she filed an action in the district court alleging two claims of breach of contract and one claim «of denial of her right to equal protection pursuant to article II, § 9 of the Colorado Constitution. The trial court granted summary judgment as to both breach of contract claims and the equal protection claim.

Collins appeals only the judgment with regard to the breach of contract claims. She does not appeal the judgment entered dismissing her equal protection claim. CMC and the Board cross-appeal the denial of attorney fees.

I.

Collins first contends that the trial court erred in granting summary judgment on her claim for breach of contract alleging insufficient cause for the termination from her position as a financial aid specialist. Specifically, she argues that her employment contract requires judicial review of .the substantive grounds for termination. We disagree.

Summary judgment is warranted only if the pleadings and supporting documents demonstrate that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. C.R.C.P. 56(c), Churchey v. Adolph Coors Co., 759 P.2d 1336 (Colo.1988). The moving party has the burden of establishing the lack of a triable factual issue, and all doubts as to the existence of such an issue must be resolved against that party. Churchey v. Adolph Coors Co., supra.

If an employee seeks to rely on an employee handbook or other written policy of the employer as the basis for an implied employment contract claim, the employee must accept the whole of that policy. The employee may not accept the favorable portions of the policy and reject the unfavorable portions. Floyd v. Coors Brewing Co., 952 P.2d 797 (Colo.App.1997), rev'd on other grounds, 978 P.2d 663 (Colo.1999).

Here, the parties do not contest that CMC's procedures gave rise to an implied contract. We conclude that such a contract merely allows Collins to enforce CMC's grievance policies and procedures. See Floyd v. Coors Brewing Co., supra. However, Collins does not contend that CMC did not follow its grievance policies and procedures. |

Nonetheless, Collins argues that judicial review of the substantive basis of the termination is permissible because CMC's termination policy provides that the college's ultimate decision on termination is "final," not "final and binding." We are not persuaded.

The interpretation of written doeu-ments presents a question of law subject to de novo review. Weisbart v. Agri Tech, Inc., 22 P.3d 954 (Colo.App.2001). "Final" means "not to be altered or undone; conclusive, decisive." Webster's Third New Internation, al Dictionary 851 (1981).

In support of her contention that she is entitled to judicial review, Collins relies on Vanderhurst v. Colorado Mountain College District, 16 F.Supp.2d 1297 (D.Colo.1998), aff'd on other grounds, 208 F.3d 908 (10th Cir.2000). In that case, as here, the plaintiff brought a breach of contract claim for wrongful termination of employment. The plaintiff neither challenged the defendant's internal grievance procedures nor alleged that the defendant did not follow those procedures. Rather, the plaintiff challenged the defendant's determination that there were substantive grounds for termination. The court denied the defendant's motion for summary judgment, ruling that there were genuine factual disputes as to whether the plaintiff's conduct violated the defendant's policies such that termination was warranted.

We find Vanderhurst distinguishable because it is not clear from that opinion that the CMC grievance procedures then in effect provided that the review was "final." If the grievance procedures in that case were identical to those in this case, we decline to follow the reasoning in Vanderhurst See First National Bank v. Rostek, 182 Colo. 437, 514 P.2d 314 (1978)(state court is not bound by federal court interpretation of state law).

Here, to the extent that CMC's grievance procedure led to an implied contract, the parties implicitly agreed that the grievance procedures provided a final and binding determination of whether termination of employment was appropriate. "Moreover, the fact that the termination policy states that the decision on termination is final, but does not specifically state that the decision is binding, does not suggest that judicial review of the termination is permissible. To hold otherwise would be to violate the principle of freedom of contract. See MareZ v. Dairyland Ins. Co., 638 P.2d 286 (Colo.1981)(refusing to adopt rule that would in effect rewrite terms of parties' contract).

Thus, we conclude that there were no genuine issues of material fact as to the first breach of contract claim. Accordingly, the trial court did not err in granting summary judgment on that claim. -

IL

Collins next contends that the trial court erred in granting summary judgment on her claim. for breach of contract as to the termination from her adjunct instructor position. Again, we disagree.

Collins's contract for the adjunct instructor position provided: |

This contract is for part-time, temporary employment only. Nothing in this contract is meant to create the expectation of continuing or future employment or property rights. THIS CONTRACT IS AT WILL and may be terminated at the discretion of the College at any time, with or without cause and with or without notice. I acknowledge that I am not a full-time faculty member of the College, and that my benefits and rights under College Poli-ey are not those of a Full-time Faculty member.

An employee who is hired in Colorado for an indefinite period of time is an at-will employee, whose employment may be terminated by éither party without cause and without notice, and whose termination does not give rise to a cause of action. Crawford Rehabilitation Services v. Weissman, 938 P.2d 540 (Colo.1997). However, an at-will employee may be able to enforce the termination procedures in an employee manual under either an implied contract theory or a promissory estoppel theory. Continental Air Lines, Inc. v. Keenan, 731 P.2d 708 (Colo.1987).

Here, the contract unambiguously declares that the employment is at-will. In addition, the policy manual expressly states that CMC's grievance procedure is not available to temporary employees or employees who are employed under a temporary letter of agreement. Therefore, contrary to Collins's argument, she could not reasonably have expected CMC to follow its grievance procedure as to the adjunct instructor position. Thus, the grievance procedures did not create an implied contract as to the adjunct instructor position. See Continental Air Lines, Inc. v. Keenan, supra. Accordingly, we affirm the trial court's summary judgment on Collins's second claim for breach of contract.

IIL.

On eross-appeal, CMC contends that it is entitled to attorney fees because Collins's claims were frivolous and groundless. We are not persuaded.

The court shall award attorney fees if an attorney or party brought or defended an action that lacked substantial justification. If a claim is substantially frivolous or substantially groundless, it lacks substantial justification. Section 18-17-102(4), C.R.8.2001.

A elgim is frivolous if the proponent can present no rational argument based on the evidence or law in support of the claim. A claim is groundless if the allegations in the complaint, while sufficient to survive a motion to dismiss for failure to state a claim, are not supported by any credible evidence at trial. Western United Realty, Inc. v. Isaacs, 679 P.2d 1063 (Colo.1984).

Here, Collins made rational arguments based on valid legal authority. Therefore, although we disagree with her contentions, we cannot conclude that they are frivolous or groundless. Accordingly, the trial court's denial of attorney fees was proper.

The judgment and the order denying attorney fees are affirmed.

Judge MARQUEZ and Judge ROY concur.


author: Judge METZGER.

text:
    Dorothy MORGAN, Plaintiff-Appellant, v. COLORADO DEPARTMENT OF HEALTH CARE POLICY AND FINANCING, Defendant Appellee.
    No. 01CA0629.
    Colorado Court of Appeals, Div. I.
    March 14, 2002.
    Rehearing Denied May 16, 2002.
    Certiorari Denied Nov. 4, 2002.

      Peter Komlos-Hrobsky, Joel Hayes, Colorado Legal Services, Denver, Colorado, for Plaintiff-Appellant.
    Ken Salazar, Attorney General, Ann Hause, First Assistant Attorney General, Denver, Colorado, for Defendant-Appellee.
   Opinion by

Judge METZGER.

Plaintiff, Dorothy Morgan, appeals the district court's order affirming the final agency decision of the Office of Appeals of the Colorado Department of Health Care Policy and Financing (the agency), which denied her application for Home- and Community-based Services for the Elderly, Blind, and Disabled (HCBS). We affirm.

Plaintiff is in her mid-sixties and suffers from diabetes mellitus, congestive heart failure, hypertension, obesity, asthma, gout, femoral neuritis, chronic pain in her left leg, and anxiety. Her condition requires that she take extensive medication and supplemental oxygen.

Plaintiff applied for HCBS benefits in 1998. HCBS is a Colorado Medicaid home care program providing assistance with dressing, bathing, cooking, cleaning, shopping, transportation, and other services to make it possible for elderly, blind, and disabled persons to avoid institutionalization. Section 26-4-601, et seq., C.R.8S.2001; Dep't of Health Care Policy & Financing Reg. No. 8-8.485, et seq., 10 Code Colo. Regs. 2505-10 (DHCP & F Regs). To be eligible for HCBS benefits, an applicant must have a functional impairment sufficiently severe to require the level of care available in a nursing home. Martinez v. Ibarra, 759 F.Supp. 664, 670 (D.Colo.1991)(Martines I); see also § 26-4-606, C.R.8.2001.

Level of care determinations are made by Colorado Foundation for Medical Care, a peer review organization (PRO) operating under contract with the state. As the first step in its evaluation process, a PRO case manager conducts an initial assessment in the field. A trained program coordinator, who is a registered nurse, then scores the applicants using a point system. Applicants who score twenty or more points and who have certain other minimum seores qualify automatically for HCBS benefits. DHCP & F Reg. No. 8 401.17(A). If an applicant does not qualify automatically, the PRO refers the application to a physician advisor to determine whether, in spite of the applicant's score, the applicant requires a nursing facility level of care. DHCP & F Reg. No. 8.401.17(B).

Plaintiff scored thirteen points on the initial evaluation and therefore did not qualify automatically. Her application was referred to a physician advisor, who examined her file and determined she was ineligible. Plaintiff requested reconsideration, and a registered nurse from the PRO conducted an on-site assessment at plaintiff's home. This assessment resulted in a score of eleven points. The PRO's reconsideration panel of two physicians then reviewed the entire case, listened to plaintiff's statement, and determined she was ineligible for HCBS benefits.

Plaintiff then appealed to the agency, and a hearing was scheduled before an Administrative Law Judge (ALJ). One day before the hearing, plaintiff submitted a letter from her treating physician describing her condition; plaintiff also testified at the hearing. The ALJ issued an initial decision determining that plaintiff was ineligible for benefits. Plaintiff filed exceptions to that decision, and the office of appeals of the agency issued a final agency decision affirming the ALJ's initial decision. Plaintiff then filed this § 24-4-106, C.R.S.2001, action in the district court. The court affirmed the final agency decision, and this appeal followed.

L.

Plaintiff first contends the district court erred in concluding that her ineligibility had been determined by using a "uniform assessment instrument," and that, therefore, the requirements of § 26-4-507(8)(d), C.R.8.2001 had been met. We disagree.

A.

Plaintiff argues that, because no scoring sheet associated with the particular assessment instrument adopted by the agency, the ULTC-100 form, appears in the record, and because the agency conceded the form was not used when her application was reconsidered during the on-site assessment, the determination of her ineligibility was fatally flawed. We do not agree.

Under § 24-4-106(7), C.R.S8.2001, an administrative agency's determination may be reversed only if the court finds the agency acted in an arbitrary and capricious manner, made a determination that is unsupported by the evidence in the record, erroneously interpreted the law, or exceeded its constitutional or statutory authority. See T.L. v. Colorado Department of Health Care Policy & Financing, 42 P.3d 63 (Colo.App.2001). Interpretation of a regulation by the agency charged with its enforcement is generally entitled to great deference and must be accepted if it has a reasonable basis in law and is warranted by the record. See Ohlson v. Weil, 953 P.2d 939 (Colo.App.1997).

The agency is required to employ "a uniform assessment instrument," in the "comprehensive and uniform client assessment process." Section 26-4-507(@)(d), C.R.S.2001. The agency has adopted the ULTC 100 form for this purpose. See DHCP & F Reg. No. 8401.16. The PRO nurses review the information obtained and seore it on the ULTC 100 form. DHCP & F Reg. No. 8 401.17(A).

The PRO uses the required ULTC-100 form for intake, but does not use it directly in making the final calculation of an applicant's seore. Instead, a registered nurse converts the information from the ULTC form to a "LTC-100 Worksheet" and then computes an applicant's final seore from that worksheet. The PRO has written guidelines governing this conversion process and also provides special training to the registered nurses who perform this function.

Here, the PRO case manager gathered plaintiff's information and recorded it on a computerized version of the ULTC-100 form. The PRO registered nurse then converted this information to the LTC-100 worksheet to arrive at plaintiff's score. When plaintiff asked for reconsideration, a PRO registered nurse conducted an on-site review using the LTC-100 worksheet. The record contains seores from the LTC-100 worksheet for both the initial evaluation and the on-site review, but it does not contain the score sheet for the ULTC-100 form.

The final agency decision rejected plaintiff's argument that the PRO had not properly used the ULTC-100 form. It held that, because the agency had used the form at some point in the process, that was sufficient compliance with § 26-4-507(3)(d). The district court upheld this determination.

We agree with this reasoning. The agency must use the ULTC-100 form "as part of the comprehensive and uniform client assessment process." Section 26-4-507(8)(d). The agency here satisfied this requirement by using the ULTC-100 form to gather the initial information concerning plaintiff's condition. We find nothing in the statutes or regulations that would require the agency to derive scores directly from the ULTC-100 form at every stage of the process. Thus, because the agency's method of using the ULTC-100 form has a reasonable basis in the law, and because the record is clear that the form was used in the initial stage of plaintiff's assessment process, we reject her argument.

B.

Plaintiff also argues that, because the criteria in the LTC-100 worksheet are different and more restrictive than those in the ULTC-100 form, the agency's use of the LTC-100 worksheet in later stages of the HCBS eligibility determination process violated the requirements of § 26-4-507(3)(d). We are not persuaded.

An applicant's level of impairment must be evaluated in "at least" fifteen enumerated areas: confusion, contact with reality, behavior, communication, mobility, bathing, dressing, eating and feeding, bowel continence, bladder continence, skin care, vision, hearing, need for supervision and observation, and living skills, such as cooking, shopping, and laundry. See DHCP & F Reg. No. 8401.11. These are the criteria listed on the LTC-100 worksheet.

In contrast, the ULTC-100 form calls for information in seventeen areas: transfers, bladder care, bowel care, mobility, dressing, bathing, hygiene, eating, meal preparation, housework, laundry, shopping, medicine management, appointment management, money management, access resources, and telephone.

Although the two forms differ slightly, they are not so disparate as to violate the requirements of § 26-4-507(B)(d). For example, where the LTC-100 worksheet has a single category for living skills such as cooking, shopping, and laundry, the ULTC-100 form has separate categories for these criteria. Moreover, the existence of written guidelines for converting information from one form to the other demonstrates that the two forms contain similar criteria. Thus, contrary to plaintiff's contention, the LTC-100 worksheet is not more restrictive than the ULTC-100 form.

Consequently, the district court was correct in concluding that the agency's assessment instruments met the applicable statutory and regulatory requirements.

IL.

Plaintiff next contends the district court erred in determining that the use of the unpublished criteria in the LTC-100 worksheet to evaluate her HCBS eligibility did not violate § 24-4-101, et seq., C.R.8.2001, the Administrative Procedure Act (APA), the delegation doctrine, and her right to due process. We find no error.

A.

First, we reject plaintiffs argument that the use of the unpublished criteria in the LTC-100 worksheet violated the APA.

An applicant's scores must be based on criteria developed by the PRO and approved by the state. DHCP & F Reg. No. 8401.17(A).

"No rule shall be relied upon or cited against any person unless ... it has been published and ... it has been made available to the public in accordance with this section." Section 24-4-108(10), C.R.8.2001. However, interpretive rules and general statements of policy do not require publication. Section 24-4-108(1), C.R.8.2001.

Here, the seoring criteria in the LTC-100 worksheet have not been published as a regulation. The agency concedes that these criteria are subject to change without public notice and that it is not possible, without these criteria, to determine whether an applicant meets HCBS requirements.

In Meyer v. Colorado Department of Social Services, 758 P.2d 192 (Colo.App.1988), a division of this court held that the termination of Medicaid-funded nursing home care benefits could be based on an unpublished point system. The division concluded the failure to publish the point system did not violate the APA because the point system was not the dispositive factor in the decision to terminate benefits. It reasoned that, because it "served only to trigger further consultation and review," the point system was not a binding rule requiring publication under § 24-4-108(1). Meyer v. Colorado Department of Social Services, supra, 758 P.2d at 196.

Similarly, here, we conclude that the scoring system in the LTC 100 worksheet serves only to facilitate the evaluation process for certain applicants. As required by Meyer v. Colorado Department of Social Services, supra, the final factual determination of eligibility is made by a physician advisor and a reconsideration panel of physicians, who remain free to make independent medical judgments about an applicant's qualifications.

Therefore, the district court properly concluded the agency did not violate the APA by using the unpublished criteria in the LTC-100 worksheet in the assessment of plaintiff's functional needs.

B.

We also reject plaintiff's argument that the use of the unpublished criteria in the LTC-100 worksheet violated the delegation doctrine.

The delegation doctrine requires that states provide "sufficient statutory standards and safeguards and administrative standards and safeguards, in combination, to protect against unnecessary and uncontrolled exercise of discretionary power." These standards must be sufficient to ensure that agency action is rational and consistent, and must provide for meaningful appellate review. Cottrell v. City & County of Denver, 636 P .2d 703, 709 (Colo.1981).

Here, the pertinent factors are established both by statute and regulation. Section 26-4-507(2)(a), C.R.S.2001, provides that the factors to be considered are eating, bathing, dressing, transferring from bed to chair, bowel and bladder control, and independent ambulation. Section 26-4-507(2)(g), C.R.S. 2001, lists additional factors: cooking, cleaning, using a telephone, shopping, doing laundry, providing transportation, and managing money. The "assessment instrument" adopted by the agency must include all of these factors. Section 26-4-507B)(d)(D(A), C.R.8.2001. By regulation, the agency must evaluate applicants in at least fifteen areas. See DHCP & F Reg. No. 8401.11. It does so using the LTC-100 worksheet, which, as we have held, is consistent with the statutory and regulatory requirements.

We agree with the trial court that the statutory and administrative standards provide sufficient safeguards to comply with the requirements of the delegation doctrine and that the agency's use of the LTC-100 worksheet, which comports with these standards, did not violate the doctrine.

C.

We reject plaintiff's argument that the use of unpublished criteria in the LTC-100 worksheet violated her right to due process.

"[Dlue process requires that welfare assistance be administered to ensure fairness and freedom from arbitrary decision-making as to eligibility"; this, in turn, requires "written standards and regulations." White v. Roughton, 530 F.2d 750, 753, 754 (7th Cir.1976); see also Martinez I, supra. Due process is satisfied in the Medicaid context where the agency uses a hearing procedure that includes review by independent physicians, with "clear, written standards controlling the substance and procedure of the physician review." Martinez I, supra, 759 F.Supp. at 670; see also Martinez v. Ibarra, 762 F.Supp. 873 (D.Colo.1991)(Martinez II).

When the agency denies HCBS benefits based on its scoring system, a physician ad-visor must evaluate the applicant's file and determine whether he or she requires a nursing facility level of care. See DHCP & F Reg. No. 8401.17(B), (C). If the physician advisor determines benefits should be denied, the applicant may request an informal conference with a reconsideration panel of physi-clans. See DHCP & F Reg. Nos. 8.059.121(B), 8. 401.17(F).

Here, plaintiff's application was evaluated by both a physician advisor and a reconsideration panel. The physician advisor examined the entirety of plaintiff's file. The reconsideration panel also reviewed that file, considered the registered nurse's on-site assessment results, and heard plaintiff's testimony about her functional impairments.

This level of review, using statutory and regulatory standards, was sufficient to protect plaintiff's due process rights.

TIL.

Plaintiff next contends the district court erred in concluding her HCBS eligibility was properly "determined" by a physician, as mandated by Martinez I & II, supra. She argues the physician advisor did not independently assess her eligibility because he relied on the PRO file and did not personally examine her. We disagree.

When an applicant fails to meet the minimum score to qualify automatically for HCBS benefits, the regulations provide for a "determination" by a PRO physician:

B. [A PRO physician] shall determine the individual's need for the level of services provided in a nursing facility. Such determination shall be based upon the professional judgment of the physician advisor who shall determine whether the individual's condition requires the skilled and maintenance services provided in a nursing facility.
C. The PRO physician's review, shall include the information provided by the individual's treating physician, the functional assessment screen, the [additional screen required for certain applicants] (if applicable), the information obtained on the on-site review (if applicable ...) and any other information in the individual's case file.

DHCP & F Reg. No. 8. 401.17.

The purpose of additional levels of review is to determine whether, in spite of the applicant's score, he or she requires a nursing facility level of care. See Martinez I & II, supra.

Here, the physician advisor examined the documents in plaintiff's file. These documents included the results of the functional assessment and diagnostic and medication information from plaintiff's treating physician. The physician advisor did not conduct a personal examination, nor did he speak to plaintiff or to her treating physician. The agency and the trial court found that review to be sufficient. We do not disagree.

The materials that a physician advisor is required to consider are sufficient to determine whether an applicant requires a nursing facility level of care, because those materials have been previously collected as part of a detailed and specific process. There is no requirement that a physician advisor must conduct a personal examination of the applicant or contact the treating physician. Because the physician advisor here considered all of the materials required and rendered his independent medical judgment, we agree with the district court that the independent review requirements of Martinez I & II, supra, were met.

IV.

Next, plaintiff contends the district court erred in concluding that the ALJ gave proper consideration to her testimony and to a letter from her treating physician. We disagree. ~

A.

First, we reject plaintiff's contention she was entitled to a written decision from the ALJ that discussed the evidence in more detail.

Hearings regarding Medicaid benefits must comport with the standards of Goldberg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970). 42 C.E.R. § 431.205(d) (2001). The relevant requirements are that "the decision maker should state the reasons for his determination and indicate the evidence he relied on, though his statement need not amount to a full opinion or even formal findings of fact and conclusions of law." Goldberg v. Kelly, supra, 397 U.S. at 271, 90 S.Ct. at 1022, 25 L.Ed.2d at 301 (citation omitted).

Federal regulations regarding Medicaid hearings provide that, in a de novo hearing, the decision must specify the reasons for the decision and identify the supporting evidence and regulations. (2001). 42 CFR. § 481.244(e)

Here, the ALJ found:

[Plaintiff] credibly testified that her overall physical condition has worsened in that she falls more frequently and she has had more incidents of bladder incontinence than she did at the time of the on-site evaluation. [Plaintiff] remains capable of managing her medication needs with the help of her family, but she needs more than minimal assistance with dressing herself.

After discussing the pertinent regulations, the ALJ concluded:

The preponderance of the evidence establishes that [plaintiff] does not qualify for HCBS-EBD services. While the evidence reflects that [plaintiff] is elderly and fune-tionally. impaired, she does not require skilled and maintenance services available in a nursing facility. The assistance she requires is provided by relatives and friends and she remains capable of managing her self-care and medication needs. Further, the medical judgment of the physicians is that [plaintiff] does not require the level of services provided in a nursing facility nor is she services dependent.

Even though this decision does not discuss plaintiff's testimony in detail, it does specify the evidence relied on and explains the ALJ's reasoning. While the ALJ might appropriately have provided a more thorough discussion of the evidence, we cannot say that the decision is deficient under 42 C.F.R, § 481.244(e) and the requirements of Goldberg v. Kelly, supra.

Therefore, the district court did not err in concluding the ALJ gave proper consideration to plaintiff's. testimony.

B.

Finally, we disagree with plaintiff that the district court erred in concluding the agency gave appropriate weight to the opinion of her treating physician.

Plaintiffs treating physician submitted information to the ALJ by letter. It is clear to us that the ALJ considered that information, because his findings incorporated it. However, the ALJ did not specifically discuss the relative weight he gave this evidence.

The final agency decision stated: "Perhaps most importantly, the letter from [plaintiffs] treating physician simply does not address the key issue in these proceedings, ie., it does not state that [plaintiff] is [in] need of a nursing facility level of care." The district court concluded that "the ALJ most likely found that the letter did not address the pertinent issues at hand."

Because the evidence from plaintiff's treating physician did not include his opinion on the pivotal issue before the agency-whether plaintiff needed a nursing facility level of care-we reject plaintiff's contention.

The order is affirmed.

Judge ROTHENBERG and Judge KAPELKE concur.