author: Judge DAVIDSON.

text:
    BALL CORPORATION, an Indiana corporation, Plaintiff-Appellee, v. Frederick C. FISHER, in his official capacity as Executive Director of the Colorado Department of Revenue, and the Colorado Department of Revenue, Defendants-Appellants.
    No. 01CA0246.
    Colorado Court of Appeals, Div. IV.
    Dec. 20, 2001.
    Certiorari Denied July 22, 2002.

      Lentz, Evans and King, P.C., Robert A. Wherry, Jr., Denver, CO, for Plaintiff-Appel-lee.
    Ken Salazar, Attorney General, Carolyn Lievers, Assistant Attorney General, Denver, CO, for Defendants-Appellants.
   Opinion by

Judge DAVIDSON.

Defendants, the Colorado Department of Revenue and Frederick C. Fisher, in his official capacity as executive director of the Department (collectively Department), appeal from the judgment of the trial court reversing the Department’s final determination that plaintiff, Ball Corporation (taxpayer), was not exempt from certain use taxes. We affirm.

According to the stipulated facts, after an audit, the Department issued a notice of deficiency to taxpayer for failure to pay use taxes levied by the state and by three special districts, namely, the Regional Transportation District, Scientific and Cultural Facilities District, and Baseball District. The use taxes were assessed on machinery at taxpayer’s plant in Golden for the period of September 1,1990 to September 30,1993.

The alleged deficiencies fell into two categories. The first category involved machinery with less than a three-year useful life that taxpayer expensed for tax purposes after January 1, 1993, the effective date that taxpayer’s plant was included within the Wheat Ridge Enterprise Zone Expansion Area. For that equipment, the Department alleged that both state and special district use taxes were due. The second category involved equipment with greater than a three-year useful life that taxpayer capitalized for tax purposes. For that equipment, the Department conceded that taxpayer was exempt from state use taxes but alleged that there was no exemption from the special district use taxes.

Taxpayer asserted that it was exempt from all of the assessed taxes, but, after an eviden-tiary hearing, the Department found that taxpayer did not qualify for an exemption. Specifically, the Department determined, pursuant to the statutes in effect during the audit period, that general state sales tax exemption criteria for certain machinery, contained in § 39-26-114(ll)(d), C.R.S.2001, were incorporated into the general use tax exemption for such machinery, § 39-26-203(l)(y), C.R.S.2001, and into the Urban and Rural Enterprise Zone Act, § 39-30-101, et seq., C.R.S.2001. To qualify for the § 39-26-114(ll)(d) exemption, property must also qualify for the federal investment tax credit (ITC) as described in “section 38 of the ‘Internal Revenue Code of 1954’, as amended.” The Department determined that expensed equipment does not qualify for the ITC and, thus, a state or special district use tax exemption, even if located within an enterprise zone. The Department further determined, based on § 29-2-105, C.R.S.2001, that while machinery qualifying for the ITC is exempt from state use taxes, it is not exempt from the special district use taxes, even within an enterprise zone.

Taxpayer appealed the Department’s final determination pursuant to § 39-21-105, C.R.S.2001. The trial court granted summary judgment in favor of taxpayer, reversing the Department’s finding that taxpayer was not exempt from the use taxes. The trial court found that § 39 — 26—114(ll)(d) included amendments to the federal tax code that eliminated a three-year useful life requirement, and, in any event, a useful life requirement conflicts with the exemption for expensed property contained in § 39-30-106, C.R.S.2001, and, therefore, is not required for the latter exemption. The trial court also determined that § 29-2-105 does not grant the special districts authority to assess a use tax on machinery that is exempt from state use tax.

In this appeal by the Department, the parties agree that there are no facts in dispute and that the issues to be resolved are ones of statutory construction and interpretation. The statutes in effect during the audit period have subsequently been amended but do not differ in relevant part from the current statutes, except where indicated.

The interpretation of a statute is a question of law and review is de novo. United Airlines, Inc. v. Indus. Claim Appeals Office, 993 P.2d 1152 (Colo.2000).

A court’s primary goal in interpreting a statute is to determine and give effect to the intent of the legislature, and a court should first look to the plain and ordinary meaning of the statutory language. Farmers Group, Inc. v. Williams, 805 P.2d 419 (Colo.1991). If the language is unambiguous, resort to other interpretive rules of statutory construction, such as legislative history, is unnecessary. Town of Telluride v. Lot Thirty-Four Venture, L.L.C., 3 P.3d 30 (Colo.2000). Statutory provisions should be construed as a whole, giving effect to each word and, where possible, harmonizing potentially conflicting provisions. Farmers Reservoir & Irrigation Co. v. Consol. Mut. Water Co., 33 P.3d 799 (Colo.2001).

When interpreting tax statutes, a court should not view the power to impose taxes expansively, and should resolve doubts in favor of the taxpayer. Transponder Corp. of Denver, Inc. v. Prop. Tax Adm’r, 681 P.2d 499 (Colo.1984). However, when construing a tax exemption statute, a court should view exemption as the exception and taxation as the rule. Colorado Dep’t of Revenue v. Woodmen of the World, 919 P.2d 806 (Colo.1996). In any case, the court may not amend the statute by construction. State Dep’t of Revenue v. Adolph Coors Co., 724 P.2d 1341 (Colo.1986).

The interpretation of a statute by the agency charged with its enforcement is entitled to deference, but the court is not bound by such interpretation, especially in cases where the law has been misapplied or misconstrued. Huddleston v. Bd. of Equalization, 31 P.3d 155 (Colo.2001). Such deference is not required when the construction of the statute by the agency has not been uniform or the statutory language clearly compels a contrary result. Three Bells Ranch Assocs. v. Cache La Poudre Water Users Ass’n, 758 P.2d 164 (Colo.1988).

I.

The Department contends that § 39-26-114(ll)(d) incorporates amendments to the federal ITC only to the date of the Colorado statute’s enactment in 1979 and, thus, includes an absolute three-year useful life requirement. It argues that this prevents taxpayer’s expensed machinery from qualifying for an exemption. Alternatively, the Department contends that even under the later versions of the ITC, taxpayer is not entitled to an exemption. Specifically, it argues that post-1979 versions of the ITC contain a depreeiability requirement, which implies a one-year useful life requirement, that prevents expensed machinery from qualifying for exemption. The Department contends that the requirements of neither version conflict with the exemption for expensed property in § 39-30-106. We disagree with each contention.

Section 39-30-106 exempts certain machinery purchases made for use in enterprise zones from the state sales and use taxes imposed by article 26 of title 39, C.R.S.2001. In 1989, the section was amended to provide exemption “whether or not such purchases are capitalized or expensed.” See 1989 Colo. Sess. Laws, ch. 341, § 39-30-106 at 1523. The section provides that administration of the enterprise zone sales and use tax exemption shall be pursuant to § 39-26-114(11), “except to the extent that such section and this section are inconsistent.”

Section 39-26-114(11), in turn, is the general state sales tax exemption for certain machinery and includes the requirement that exempt equipment qualify for the former federal ITC. The requirements of § 39-26-114(11) are also incorporated by reference into the general state use tax exemption for such machinery, § 39-26-203(l)(y). Section 39-26-114(ll)(a)(II), as it existed during the audit period, was prefaced by the phrase “[E]xeept as allowed in section 39-30-106.” 1988 Colo. Sess. Laws, ch. 273 at 1317.

Thus, the two statutes each contain a provision for resolving conflicts between them, and the parties do not dispute that, when there is an inconsistency, § 39-30-106 will control.

The question to be answered, then, is whether an inconsistency exists between the applicable versions of § 39-26-114(ll)(d), including incorporated federal requirements, and § 39-30-106. While both parties contend that there is no such conflict, they do so based on different reasoning, and they reach different results. On the one hand, the Department argues that there is either a one-year or three-year useful life requirement contained in the ITC and incorporated into § 39-26-114(11), but that neither conflicts with the “capitalized or expensed” language in § 39-30-106. On the other hand, taxpayer argues that there is no inconsistency because, under later versions of the ITC, exemption for “recovery property” is allowed regardless of useful life. Taxpayer further argues that, even if there were any useful life requirement, it would conflict with the provision in § 39-30-106 that allows an exemption for expensed purchases. We agree with taxpayer’s second argument for several reasons.

A.

The Department argues first that a three-year useful life requirement must be read into § 39-26-114(1l)(d) because the reference to “section 38 of the ‘Internal Revenue Code of 1954’, as amended” means the version of that section as it appeared in 1979, when § 39-26-114(ll)(d) was enacted, and not to subsequent amendments. We disagree.

Section 39-26-114(ll)(d), providing an exemption from sales tax for certain machinery purchases, provides that “in order to qualify for the exemption provided in this subsection (11), a purchase must be of such nature that it would have qualified for the investment tax credit against federal income tax as was provided by section 38 of the ‘Internal Revenue Code of 1954’, as amended.” Section 38 property was defined in § 48 of that code.

The relevant statutes have undergone a series of amendments. When § 39-26-114(ll)(d) was enacted in 1979, the definition of § 38 property contained a three-year useful life requirement and the language of § 39 — 26—114(1l)(d) was phrased in the present tense: “a purchase must also qualify for the investment tax credit against federal income tax provided by section 38 of the ‘Internal Revenue Code of 1954’, as amended.” See 1979 Colo. Sess. Laws, ch. 373 at 1448. In 1981, the definition of § 38 property was amended to eliminate an absolute three-year useful life requirement and to permit an exemption for certain “recovery” property, defined by I.R.C. § 168 (1981). See Economic Recovery Act of 1981, Pub.L. No. 97-34, 95 Stat. 172. In 1986, the Internal Revenue Code of 1954 was revised and reenacted as the Internal Revenue Code of 1986, and the investment tax credit was effectively repealed. See Tax Reform Act of 1986, Pub.L. No. 99-514, 100 Stat.2085. In 1988, Colorado’s General Assembly amended § 39-26-114(ll)(d) from its original language requiring that purchases qualify for the ITC, to its current language requiring that purchases “be of such nature that it would have qualified for the [ITC] as was provided by section 38.” See 1988 Colo. Sess. Laws, ch. 277 at 1326.

Taxpayer disagrees with the Department’s contention that § 39-26-114(d)(ll) incorporates only the 1979 version of § 38 and argues that the “as amended” language includes all amendments up to 1986, when the 1954 code was superseded. The trial court agreed with taxpayer, determining that the General Assembly’s use of the phrase “as amended” indicated a legislative intent to incorporate subsequent amendments. We agree with the trial court.

When a statute specifically incorporates enumerated provisions of another statute, in contrast to referring to another law in general terms, the General Assembly is considered to be adopting the contents of the other provision as of the time of the adoption, and, “absent express legislative declaration to the contrary, subsequent amendments to the adopted statute will not affect the terms originally adopted.” Arrington v. Arrington, 618 P.2d 744, 745 (Colo.App.1980). An example of such static incorporation would be if § 39-26-114(ll)(d) had incorporated “ § 38 of the Internal Revenue Code of 1954,” without more.

However, the plain language of the statute is to the contrary. We conclude that, by adding the phrase “as amended,” the General Assembly indicated that § 39 — 26—114(ll)(d) was intended to track the federal provision as it evolved.

This interpretation is also consistent with the context of the statutes. When Colorado’s tax provisions have counterparts at the federal level, incorporating amendments to the federal tax code simplifies compliance and enforcement under the Colorado tax code. See § 39-22-102, C.R.S.2001. While there is currently no federal counterpart, the federal ITC provisions in the Internal Revenue Code of 1954, as amended, served similar purposes to Colorado’s exemption. See Colorado Dep’t of Revenue v. Cray Computer Corp., 18 P.3d 1277 (Colo.2001). Although there is no express legislative declaration similar to § 39-22-102 contained in the sales and use tax provisions, administration of § 39-26-114(ll)(d) would be similarly simplified by incorporating the same criteria used under the federal tax code.

Moreover, to incorporate § 38 as it existed at the time § 39-26-114(ll)(d) was adopted, it would have been sufficient for the General Assembly to reference the section number alone. A reference to any part of a statute includes all reenactments, revisions or amendments of that statute. Section 2-4-209, C.R.S. (2001). The addition of the phrase “as amended” was therefore unnecessary if the General Assembly meant only to adopt the statute as it existed in 1979 and to preclude incorporation of subsequent amendments.

Similarly, if § 39-26-114(ll)(d) incorporated § 38 as it existed in 1979, without subsequent amendments, the 1988 amendment changing the section to read in the past tense was also unnecessary. If a statute specifically incorporates another statute by reference, repeal of the incorporated statute does not result in a repeal of the incorporating statute. See Sch. District No. 1 v. Hastings, 122 Colo. 1, 220 P.2d 361 (1950). Thus, the amendment to § 39 — 26—114(ll)(d) to include property that would have qualified for the ITC “as was provided” by the 1954 Code reflects only legislative recognition that the 1954 Code no longer existed. Since it had been replaced by the 1986 Code, there could be no subsequent amendments to the 1954 Code, and the version immediately prior to its repeal should govern the Colorado provision.

In other statutes, the General Assembly has made clear when it intends to preclude incorporation of subsequent amendments to the federal tax code. See, e.g., § 31-30-1133(1), C.R.S.2001 (“as in effect on September 1, 1974, as applicable to governmental plans, or, to the extent not inconsistent, the federal ‘Internal Revenue Code of 1986’, as amended and in effect on January 1, 1989”); § 39-29-114(4), C.R.S.2001 (“as of January 1, 1987”); § 12-9-102(5.5)(a), C.R.S.2001 (“as amended through December 31, 1984”); § 15-1-1006, C.R.S.2001 (“as it exists on June 2, 1971; except that all references to the ‘Internal Revenue Code of 1954’ in section 15-1-1002(3) and (5) refer to the ‘Internal Revenue Code of 1954’ as it exists on April 19,1973”).

Conversely, the General Assembly has used the phrase “as amended” in related statutes as a shorthand method of incorporating future amendments to the federal tax code. Section 39-23.5-102(9.5), C.R.S.2001, defining “Internal revenue code” for estate tax purposes, was amended in the same 1988 bill that amended § 39-26-114(ll)(d). The amendment to § 39-23.5-102(9.5) substituted the phrase “the ‘Internal Revenue Code of 1986’, as amended, and any regulations thereunder” for a much longer phrase clearly including subsequent amendments to the federal code and, importantly, indicated that no substantive change was intended by any of the amendments to the bill. Colo. Sess. Laws 1988, ch. 277 at 1325-26. This change in § 39-23.5-102(9.5) indicates that the phrase “as amended” was intended to be equivalent to the much longer phrase regarding subsequent amendments.

Thus, according to the relevant rules of statutory construction, § 39 — 26—114(ll)(d) indicates that subsequent amendments to § 38 of the Internal Revenue Code of 1954 are incorporated into the Colorado statute. Therefore, the applicable definition of § 38 property, and the one incorporated into § 39 — 26—114(ll)(d), is the one in effect immediately prior to the 1986 repeal of the 1954 code, specifically, “recovery property (within the meaning of section 168 without regard to any useful life) and any other property with respect to which depreciation ... is allowable and having a useful life ... of 3 years or more.” I.R.C. § 48(a) (1985).

B.

Contrary to taxpayer’s contention, however, the fact that § 39-26-114(ll)(d) allows exemption for recovery property “without regard to any useful life” does not end the inquiry. Section 168, defining recovery property, also requires that property be deprecia-ble, which implies a one-year useful life. We must therefore determine whether a requirement of depreeiability and a one-year useful life conflicts with § 39-30-106.

1.

In its final determination, the Department did not focus on a three-year useful life requirement. Instead, it determined that, even under the post-1979 ITC, taxpayer’s property did not qualify for exemption because expensed property does not fit the definition of recovery property under § 168, which requires that property be depreciable. Thus, according to the Department, taxpayer’s property was expensed, and because the requirements of § 39 — 26—114(ll)(d) were not met, taxpayer was properly denied the § 39-30-106 exemption.

Although the Department argued in the trial court, and on appeal, that the three-year useful life requirement contained in the 1979 ITC was not inconsistent with the exemption for “expensed” machinery contained in § 39-30-106, because we have determined that the 1979 ITC is not the applicable version, we must necessarily address whether the post-1979 version of the ITC contains such a conflict. We conclude that it does.

Section 162(a) of the Internal Revenue Code permits a deduction for “ordinary and necessary business expenses paid or incurred during the taxable year.” If an expenditure will provide benefits to the taxpayer substantially beyond the taxable year, the taxpayer generally may not deduct the full amount of the purchase in the year made but must capitalize the asset and recover the cost by methods including taking deductions for depreciation over the useful life of the asset. Treas. Reg. § 1.263(a)-l, 2 (2001); Clausman v. Commissioner, 57 T.C.M. (CCH) 17 (1989). While the line distinguishing a current expense from a capital expenditure may not always be clear, the two categories are generally distinct. See INDOPCO, Inc. v. Comm’r, 503 U.S. 79, 112 S.Ct. 1039, 117 L.Ed.2d 226 (1992); Overhauser v. United States, 45 F.3d 1085,1087 (7th Cir.1995) (“An expense incurred for an asset whose value is exhausted in one year is a current expense; the asset is not depreciable if its useful life is so short.”); Tennessee Carolina Transp., Inc. v. Comm’r, 65 T.C. 440, 454, 1975 WL 3169 (1975) (“a deduction for ordinary and necessary business expenses is not the same animal as a deduction allowed for depreciation”), ajfd, 582 F.2d 378 (6th Cir.1978).

The post-1979 ITC criteria, incorporated into § 39-26-114(11), do not speak explicitly in terms of “capitalized” or “expensed.” To qualify for the former federal ITC, either as “recovery property” under § 168 or as other property, the property must be “deprecia-ble.” See I.R.C. §§ 38, 48, 168 (1985). If a taxpayer fully expenses an item and recovers its full cost in one year, then depreciation is not allowable and the property does not qualify for the ITC. Treas. Reg. § 1.48 — 1(b) (2001); Coca-Cola Bottling Co. v. United States, 203 Ct.Cl. 18, 487 F.2d 528 (1973); Wellford v. Comm’r, 50 T.C.M. (CCH) 945 (1985).

Because § 162 and the ITC both allowed for deductions from federal income tax, this rule prevented double income tax deductions for the same property. This is not a problem under the state taxation scheme relevant here, because, while an item may be ex-pensed for purposes of an income tax deduction, the exemptions in §§ 39-26-114(11) and 39-30-106 are from sales and use taxes, not from income tax. However, this does not alter the fact that the definition of the term “depreciable” excludes expensed property.

The ordinary meaning of the term “expensed,” then, refers to taking a deduction in the current year and usually refers to property with less than a one-year useful life. Once an election is made to expense property, the property loses its de-preciability for purposes of the ITC and therefore does not meet the definition of § 38 property. Coca-Cola Bottling Co. v. United States, supra. Thus, under the general machinery exemption contained in § 39-26-114(ll)(d), which incorporates § 38, no exemption is available for expensed machinery because such machinery is not depreciable.

However, § 39-30-106 was amended to allow an exemption for machinery in an enterprise zone “whether or not such purchases are capitalized or expensed.” Read alone, the exemption contained in § 39-30-106 does not require that property be depre-ciable and is therefore broader than the exemption allowed in the rest of the state by § 39-26-114(11).

Giving effect to the conflict provisions of §§ 39-26-114(11) and 39-30-106, this inconsistency is resolved by allowing § 39-30-106, by its terms, to govern. Thus, while the ITC depreciability and useful life requirements remain in place for purchases of machinery outside of an enterprise zone, the “capitalized or expensed” language in § 39-30-106 prevents those requirements from being applicable to purchases within an enterprise zone.

2.

The Department argues that, regardless of our statutory interpretation, the supreme court’s decision in Colorado Department of Revenue v. Cray Computer Corp., supra, must be read to hold that the language in § 39-30-106 is consistent with a three-year, and impliedly a one-year, useful life requirement. We disagree. Cray Computer is distinguishable.

Cray Computer involved another exemption requirement imposed by the condition in § 39-26-114(11) that purchases qualify for the federal ITC — a $150,000 limit on purchases of used machinery. The taxpayer argued, and a panel of this court agreed, that this ITC limitation was inconsistent with the purpose of the enterprise zone sales tax exemption to provide incentives to businesses located within one of the zones. The supreme court reversed. It first noted that there was no express inconsistency between the enterprise zone sales tax exemption and the ITC limitation for purchases of used machinery. It then held that not every limit on incentives is inconsistent with the purposes of the Enterprise Zone Act and that favoring purchases of new, rather than used, machinery was consistent with the goal of fostering economic growth in the enterprise zones.

Here, in contrast to Cray Computer, there is an express inconsistency between the one-year useful life or depreciability requirement and the enterprise zone sales and use tax exemption. Specifically, the enterprise zone exemption language, “whether or not such purchases are capitalized or expensed,” eliminates any useful life or depreciability limitation.

C.

As a separate argument, the Department contends that its interpretation of § 39-26-114(1l)(d), specifically a three-year useful life requirement, was approved by the General Assembly when it declined to adopt a proposed amendment eliminating the reference in § 39-26-106 to that section. The Department also argues that its interpretation of the statutes is entitled to deference. Again, we disagree.

1.

When a legislature reenacts or amends a statute without repealing a longstanding agency interpretation, it is persuasive evidence that the legislature intended the agency interpretation to remain in effect. Hewlett-Packard Co. v. State Dep’t of Revenue, 749 P.2d 400 (Colo.1988). Here, however, the General Assembly did not amend or reenact § 39-26-114(ll)(d). And, while the General Assembly declined to remove from § 39-30-106 the incorporating reference to the ITC requirements contained in § 39-26-114(ll)(d), the Department’s interpretation of § 39-30-106, at the time of its proposed amendment, did not include reference either to the ITC or three-year useful life requirements. See 1 Code Colo. Regs. 201-13 (1989).

Moreover, discussion by the General Assembly of that proposed amendment to § 39-30-106 did not specifically reference a three-year useful life requirement but referenced only a distinction between capitalized and expensed items. The representative from the Department described the effect of eliminating reference to § 39-26-114(d) as follows:

One of the items, probably the biggest change in that, I believe, is 11(d) which says that the items must qualify for what would be the investment tax credit. Basically, that would be items held for a substantial period of time, capitalized items; and this amendment would allow items that are expensed and written off immediately for income tax purposes to qualify for this exemption.

Hearings on H.B. 89-1349 before the Senate Committee on Finance, (Apr. 11, 1989). The only issues raised by that proposed amendment were identified as whether expensed items would qualify, whether items used indirectly in manufacturing would qualify, and whether any change would be retroactive or prospective. Although that proposed amendment was not adopted and the final bill did not delete reference to § 39-26-114(ll)(d), the final version did add the “capitalized or expensed” language to § 39-30-106 that is inconsistent with a useful life requirement. See 1989 Colo. Sess. Laws, ch. 341 at 1523.

The legislative history of the final amendment to § 39-30-106, which ultimately added the “capitalized or expensed” language, supports the interpretation that the term “ex-pensed” was meant to include assets with less than a three-year useful life. See Hearings on H.B. 89-1349, supra, (Apr. 27, 1989). Testimony at the hearing did not include any mention of a three-year useful life requirement. Statements made by a representative from the Department indicated that the amendment would permit an exemption for short-lived assets.

[Revenue Dept.]: All this is saying is that they can have exemptions if they expense it, as opposed to having to qualify for the old investment tax credit, or basically having the items capitalized. That’s what it is in a nutshell.
Senator Mendez: So those are items that are shorter lived; they’re not really machinery, they’re sort of — less part of it. [Revenue Dept.]: Yeah, generally speaking that would be correct.
Senator Considine: Generally speaking that’s right, but remember that American business has made a bet out of useful lives and been wrong a great deal of the time because of technological change. And the piece of equipment that you bought 5 years ago that had a 10 year physical life may have had a much shorter functional life because of changing technologies.

The only mention of a three-year useful life requirement appears in a printed handout included in the Staff Summary of the April 27, 1989 hearing and indicates that such a requirement would not apply to the § 39-30-106 exemption. While the Department now disputes its origin, typed initials and a handwritten note on the bottom of the page attribute the sheet to the Department of Revenue, and statements made during the hearing are consistent with that attribution. The handout describes the effect of the proposed amendment in the following terms:

The allowance of the sales/use tax exemption for expensed items will likewise have far reaching impact. Whereas, under current law qualifying items must be depreciated over at least a 3 year useful life. This provision allows the exemption for parts, tools, and machines that have limited useful lives (days or hours) apparently contrary to the original provisions of the law. This provision would allow items such as drill bits, nondurable parts, short-lived items, molds, dies, etc. to be exempt from tax.

2.

The Department also argues that its current interpretation of the statutes, incorporating only the amendments up to 1979 and including the three-year useful life requirement, is entitled to deference.

However, in addition to being contrary to the language of the statutes, this interpretation has not been consistently asserted. After the “capitalized or expensed” language was added to the statute, the Department of Revenue Regulations implementing § 39-30-106 were first amended in 1992. The amended regulation stated, in part:

Machinery, machine tools, and parts purchased prior to June 7, 1989 [the effective date of the “capitalized or expensed” amendment to § 39-30-106] did not qualify for this exemption unless it/they were capitalized on the taxpayer’s books and met the definition of “qualifying property” as contained in section 48 of the internal revenue code as such section existed prior to the enactment of the “Revenue Reconciliation Act of 1990.”

1 Code Colo. Regs. 201-13, Regulation 39-30-106(1) (amendments subsequent to 1992 have not altered the quoted language). By negative implication, purchases made after June 7,1989 qualify for the exemption even if they are not capitalized and do not meet the definition of “qualifying property.” Moreover, the regulation makes reference to § 48 “as such section existed prior to the enactment of the ‘Revenue Reconciliation Act of 1990.’ ” Although the Department now challenges taxpayer’s assertion that the “as amended” language incorporates amendments up to 1986, when the 1954 Internal Revenue Code was superseded, this regulatory interpretation implies that even later amendments were incorporated into § 39-26-114(ll)(d).

Furthermore, while the Department argues that its position is clearly articulated to taxpayers, Regulation 39-30-106 instructs taxpayers wishing to claim the exemption to submit the Department’s Form DR 1191, captioned “Sales Tax Exemption on Purchases of Machinery and Machine Tools.” The instructions to that form, however, are internally inconsistent in their statement of the requirements for the enterprise zone exemption. While the “general instructions” state that equipment purchased for use in an enterprise zone “must still meet the basic investment tax credit requirement of having a three-year useful life if expensed,” the “Instructions for Businesses Located in an Enterprise Zone” state that the property “must be of a nature that would have qualified for federal investment tax credit (ITC) as ITC existed in 1986.” However, by 1986 there was no longer a three-year useful life requirement imposed on property that met the definition of “recovery property” under § 168.

II.

The Department also contends that, pursuant to § 29-2-105 and the reasoning of Howard Electrical & Mechanical, Inc. v. Department of Revenue, 771 P.2d 475 (Colo.1989), the special districts have the power to impose a use tax on machinery that is exempt from state use tax. Again, we disagree.

RTD’s general taxing authority is contained in § 32-9-119(2)(a), C.R.S.2001, which gives RTD the authority to impose a sales tax “upon every transaction or other incident with respect to which a sales tax is now levied by the state, pursuant to the provisions of article 26 of title 39, C.R.S.,” with exceptions not relevant here. Additional taxing authority is provided to RTD in § 29-2-105, relied upon by the Department. That section contains the requirements for any tax ordinance or proposal of an incorporated town, city, or county and states that such entities may exempt machinery described in § 39-26-114(11), but that they must do so explicitly. Section 29-2-105(l)(d) then adds, “The regional transportation district may, in its discretion, continue to levy a sales tax ... on purchases of machinery or machine tools, as provided in section 39-26-114(11), C.R.S.”

The authority of the Scientific and Cultural Facilities District and the Baseball District to impose taxes on the type of machinery involved here is derivative of any authority granted to RTD. Sections 32-13-107(l)(a)(I), 32-14-114(l)(a), C.R.S.2001.

In Howard Electrical & Mechanical, Inc. v. Department of Revenue, supra, the court addressed the scope of RTD’s taxing power under § 32-9-119(2). It determined that, because the General Assembly granted RTD power to impose a sales tax pursuant to article 26 of title 39, rather than limiting it to part 1 of article 26, RTD also had the power to impose a use tax under part 2 of article 26.

The Department contends that, under Howard Electrical, wherever the special districts are expressly granted authority to impose a sales tax, they are also granted implied authority to impose a use tax. The Department therefore argues that because § 29-2-105 provides that the special districts may impose a sales tax on machinery exempt from state sales tax, it also allows them to impose a use tax on machinery that is exempt from state use tax.

Unlike the grant in § 32-9-119(2), however, § 29-2-105 does not authorize the special districts to impose taxes on property that is exempt from state sales tax under all of article 26. Instead, the districts are limited to imposing sales tax only on machinery that is otherwise exempt under § 39-26-114(11). While article 26 includes both sales and use taxes, § 39-26-114(11) provides only for a sales tax exemption. The corresponding use tax exemption is found in § 39-26-203(l)(y). Section 29-2-105 does not include a provision allowing the districts to impose a tax on machinery exempt under § 39-26-203(l)(y). Moreover, § 29-2-105 itself is limited to a sales tax. A corresponding use tax provision is contained in § 29-2-109, C.R.S.2001, which contains no grant of authority to RTD.

Generally, RTD is limited to imposing a tax on transactions taxed by the state. Section 32-9-119. While § 29-2-105 grants RTD additional power to impose a sales tax on items otherwise exempt from state taxation under § 39-26-114(11), it cannot be extended by construction to grant RTD authority to tax transactions exempt from state taxation under other provisions such as § 39-26-203(l)(y) or § 39-30-106(l)(a).

Therefore, we agree with the trial court that the special districts do not have the authority to levy a use tax here.

The judgment is affirmed.

RULAND and DAILEY, JJ., concur.


source: Caselaw Access Project

author: Judge ROY.

license: Public Domain

text:
    Dirk REID, Plaintiff-Appellee, v. Chris PYLE, Defendant-Appellant.
    No. 00CA1069.
    Colorado Court of Appeals, Div. III.
    April 11, 2002.
    Rehearing Denied June 20, 2002.

      Deisch, Marion & Klaus, P.C., Jeffrey B. Klaus, Denver, Colorado, for Plaintiff-Appel-lee.
    Paul Grant, Englewood, Colorado, for Defendant-Appellant.
   Opinion by

Judge ROY.

In this consolidated action, defendant, Chris Pyle, appeals from a trial court judgment quieting title in plaintiff, Dirk Reid, to a residential property in Golden, Colorado, and denying defendant’s claims concerning his loans to plaintiff. We affirm in part, reverse in part, and remand for further proceedings.

The parties were business partners and friends since childhood. Defendant helped plaintiff with the financing and construction of a house on the property, and at various times each lived in the house with their respective families, sometimes simultaneously. The parties also pooled their funds in plaintiffs bank account, which they used as a joint account for household and personal expenses.

In 1997, plaintiff executed a promissory note in favor of defendant for $40,000, due on the transfer or sale of the property, together with a quitclaim deed transferring the property to defendant “for and in consideration of the sum of One Dollar and considerations.” Subsequently, the parties’ relationship deteriorated.

Defendant recorded his quitclaim deed in 1998 and soon thereafter instituted a forcible entry and unlawful detainer (FED) action to remove plaintiff from the property. Plaintiff responded by instituting a quiet title action. Defendant counterclaimed to recover money he allegedly lent plaintiff to construct the house and purchase a motorhome. The matters were consolidated for trial.

I.

Defendant contends that the trial court erred in concluding that the parties had not formed a partnership with respect to the property. We disagree.

A partnership is an association of two or more persons to carry on as co-owners of a business for profit. Section 7-60-107(1), C.R.S.2001; Batterman v. Wells Fargo Ag Credit Corp., 802 P.2d 1112 (Colo.App.1990). The person asserting the partnership has the burden of proving its existence. Fulenwider v. Writer Corp., 544 P.2d 408 (Colo.App.1975)(not selected for official publication). The existence of a partnership is a question of fact to be determined from direct evidence and the inferences that can properly be drawn from that evidence, but the question whether the evidence establishes a partnership is one of law. See Blocker Exploration Co. v. Frontier Exploration, Inc., 740 P.2d 983 (Colo.1987).

A trial court’s findings of fact are given considerable deference on review, and we will not overturn them unless they are unsupported by the record. This is true even though there is support in the record for a contrary finding and even though we may have reached a different result had we acted as the finder of fact. See People v. Hams, 762 P.2d 651 (Colo.1988).

Here, the trial court expressly found, with support in the record, that there was no agreement to share profits and losses in the house venture and that the quitclaim deed and promissory note indicated that defendant’s contribution was a loan secured by the house as collateral. We therefore find no error in the trial court’s conclusion that there was no partnership.

II.

Defendant next contends that because the promissory note does not specify a time for performance, the trial court erred by concluding that it was due only upon sale or other transfer of the property. We agree in part.

No instrument intended to secure the payment of a debt shall be deemed a conveyance, regardless of its terms. Section 38-35-117, C.R.S.2001; Ver Straten v. Worth, 79 Colo. 30, 243 P. 1104 (1926).

Here, the trial court found that the parties intended to and did create a lien on the property because the quitclaim deed was meant to secure payment of an underlying debt or obligation. See Alien, Inc. v. Futterman, 924 P.2d 1063 (Colo.App.1995). The handwritten markings on the deed, the promissory note, defendant’s contributions to the construction of the house, and concessions in his trial court briefs provide record support for that conclusion; hence, the trial court’s findings are binding on appeal. See Griffin v. United Bank, 40 Colo.App. 513, 580 P.2d 818 (1978), affd, 198 Colo. 239, 599 P.2d 866 (1979).

Because we requested that the parties address at oral argument the effect of the law of negotiable instruments on the promissory note, we resolve that issue now.

To be a “negotiable instrument” subject to the statutes governing such instruments, an instrument must contain, inter alia, an unconditional promise to pay a fixed amount of money, see § 4-3-104(a), C.R.S. 2001, on demand or at a definite time, § 4-3-104(a)(2), C.R.S.2001. If a written agreement makes an obligation to pay subject to an express condition, not payable on demand, the agreement is not a negotiable instrument, and the statutory provisions relating to negotiable instruments are inapplicable to the transaction. See Roa v. Miller, 784 P.2d 826 (Colo.App.1989).

Here, plaintiffs obligation to pay was expressly conditioned on “the sale or transference” of the property. Thus, the promissory note was not a negotiable instrument and § 4-3-108, C.R.S.2001, was not applicable to it. See, e.g., Bradley v. Buffington, 500 S.W.2d 314 (Mo.Ct.App.1973) (instrument payable upon contingency not negotiable). To recover upon the instrument, therefore, generally defendant would be required to prove that a sale or transfer of the property had occurred. See Roa v. Miller, supra.

However, defendant may be entitled to recover upon the instrument before the happening of the contingency in this case. It is a fundamental principle that if a promi-sor is himself the cause of the failure of performance of a condition upon which his own liability depends, he cannot take advantage of that failure. Navajo Freight Lines, Inc. v. Moore, 170 Colo. 539, 463 P.2d 460 (1970) (citing 6 S. Williston, Law of Contracts § 677 (3d ed.1957)). Where, as here, the promisor’s obligation is conditional on the occurrence of a contingency whose happening is solely within the promisor’s control, the promisor has an implied obligation to exercise reasonable diligence to bring about that contingency. See Navajo Freight Lines, Inc. v. Moore, supra (payment of money contingent on promisor establishing fund from which money would be paid); Sorenson v. Connelly, 36 Colo.App. 168, 536 P.2d 328 (1975) (purchase of home contingent on promisor securing financing); see also Atha v. Atha, 224 Ga.App. 280, 480 S.E.2d 298 (1997) (payment of money contingent on promisor securing financing).

The burden is upon the promisee to prove by a preponderance of the evidence that the promisor did not exercise reasonable diligence in attempting to satisfy the obligation. If the promisor’s lack of diligence is proved, payment may become due without performance of the condition. See Navajo Freight Lines, Inc. v. Moore, supra; see also Sorenson v. Connelly, supra.

It is undisputed that plaintiff made some effort to sell the property before he executed the promissory note, but it is apparent from this record that he has made no effort to sell the property thereafter and in fact expressly refused to do so. Therefore, on remand the trial court should determine whether plaintiff has made and continues to make a reasonable and good faith effort to market the property, and if the trial court determines he has not, the trial court should order the promissory note immediately due and payable and proceed with any action instituted on the equitable mortgage.

III.

Defendant also contends that the trial court erred by denying his claim for money plaintiff owed him from the purchase of a motorhome. We conclude that further findings are necessary.

A.

Defendant specifically argues that the trial court erred by finding that he had forged the promissory note on the moto-rhome and vandalized the motorhome. We disagree.

When the trial court sits as the finder of fact, the credibility of the witnesses, the sufficiency, probative effect and weight of the evidence, and the inferences and conclusions to be drawn therefrom all are within its province, and its findings will not be disturbed on review unless manifestly erroneous. See Gerrity Oil & Gas Corp. v. Magness, 946 P.2d 913 (Colo.1997); People v. Harris, supra.

The trial court’s findings concerning the source of the promissory note and defendant’s involvement in the vandalism are supported by plaintiffs testimony as well as testimony that defendant admitted to the vandalism and was the last person in possession of the vehicle. Therefore, we will not disturb the trial court’s findings of fact.

B.

Defendant argues that the trial court erred in concluding that his participation in the vandalism precludes his claim as to the motorhome. We agree.

The trial court, in its order, concluded that defendant had contributed to the purchase of the motorhome, but was not entitled to a share in the insurance proceeds because he vandalized the vehicle. In doing so, the trial court relied on Baker v. Couch, 74 Colo. 380, 221 P. 1089 (1923), overruled, by Salzman v. Bachrach, 996 P.2d 1263 (Colo.2000), which compels courts to leave parties in the position they have placed themselves when a transaction between them is illegal, fraudulent, or immoral. In reaching this conclusion, however, the trial court failed to consider adequately the nature of the transaction.

Ostensibly, defendant’s claim is for repayment of his loan to plaintiff for the purchase of the motorhome. Although the trial court concluded that the promissory note offered at trial was forged, that conclusion, standing alone, is insufficient to determine whether the transaction involved a purchase of a share in the motorhome, a gift, or a loan. The fact that defendant may have been responsible for vandalizing the motorhome does not preclude him from asserting his claims subject to any offsets available to plaintiff.

Therefore, on remand the trial court must determine the nature of the transaction involving the purchase and financing of the motorhome and defendant’s rights, if any, with respect thereto.

IV.

Defendant also argues that plaintiff was collaterally estopped from asserting a claim that defendant vandalized the moto-rhome because plaintiffs subrogated insurer dismissed its action against defendant with prejudice. We address the issue because it may recur on remand. We disagree.

At the outset, plaintiffs standing to assert any claims or offsets based on damages to the motorhome was not adequately developed in the trial court; nor, except for a passing reference in the opening and reply brief, was it mentioned on appeal. Therefore, we cannot, and do not, address it.

Collateral estoppel, or issue preclusion, bars relitigation of an issue if: (1) the issue sought to be precluded is identical to an issue actually and necessarily determined in the prior proceeding; (2) the party against whom estoppel is asserted has been a party to or is in privity with a party to the prior proceeding; (3) there is a final judgment on the merits in the prior proceeding; and (4) the party against whom the doctrine is asserted had a full and fair opportunity to litigate the issue in the prior proceeding. See Sunny Acres Villa, Inc. v. Cooper, 25 P.3d 44 (Colo.2001); Quist v. Specialties Supply Co., 12 P.3d 863 (Colo.App.2000). Each of these elements must be satisfied. Sunny Acres Villa, Inc. v. Cooper, supra.

The instant proceeding and the insurance company’s suit against defendant both involve the issue of whether defendant vandalized the motorhome. Plaintiffs rights to the claim were subrogated to his insurance carrier, and therefore, plaintiff was in privity with his insurer in the prior proceeding. The insurance carrier had a full and fair opportunity to litigate because it had an adequate incentive to recover the insurance proceeds already paid to plaintiff. See Schenck v. Minolta Office Systems, Inc., 802 P.2d 1131 (Colo.App.1990).

However, a dismissal with prejudice unaccompanied by findings has no pre-clusive effect on any issue. See Lawlor v. National Screen Service Corp., 349 U.S. 322, 75 S.Ct. 865, 99 L.Ed. 1122 (1955); Interdigital Technology Corp. v. OKI America, 866 F.Supp. 212 (E.D.Pa.1994)(issue preclusion inapplicable to issue dismissed in earlier litigation without factual findings or conclusions of law). Nor does a dismissal of an action with prejudice unaccompanied by findings preclude subsequent litigation involving a different cause of action. See Connaghan v. Maxus Exploration Co., 5 F.3d 1363 (10th Cir.1993).

Here, after defendant was acquitted in the criminal matter, the insurance carrier’s action against defendant was dismissed with prejudice upon a joint motion on the ground that “the parties [had] resolved all outstanding issues.” Because the case was settled, the court made no findings of fact and entered no conclusions of law. Consequently, the settlement in that case has no preclusive effect.

V.

Finally, defendant contends that the district court improperly relied on a police officer’s affidavit of probable cause to arrest him for an assault on his wife. The affidavit contained statements from defendant’s wife that she had told defendant she had an affair during their separation. Defendant argues the affidavit was hearsay incorrectly admitted under the public records exception of CRE 803(8). We agree that the affidavit was erroneously admitted, but conclude that the error was harmless.

We are persuaded by the holding and analysis of CRE 803(8) in Leiting v. Mutha, — P.3d -, 2002 WL 287528 (Colo.App. No. 00CA2227, Feb. 28, 2002), and conclude that the affidavit was inadmissible hearsay. Nevertheless, the error was harmless. See C.A.R. 35(e); see also Public Service Co. v. Barnhill, 690 P.2d 1248 (Colo.1984)(receipt of inadmissible evidence harmless).

The affidavit was admitted to prove defendant’s knowledge of the relationship between his wife and plaintiff. However, defendant has conceded, both in his appellate brief and in the trial court, that on the date in question he disbelieved plaintiffs and his wife’s' denials of a relationship. Thus, because defendant’s own statements corroborate the information in the affidavit, we perceive no prejudice to a substantial right of defendant.

The judgment is reversed as to the determination of the date the promissory note is due and payable and the plaintiffs claims with respect to the motorhome, both of which are remanded for further proceedings in accordance with the views expressed in this opinion. The balance of the judgment is affirmed.

Judge NEY and Judge DAILEY concur.


author: Judge DAILEY.

text:
    The PEOPLE of the State of Colorado, Plaintiff-Appellee, v. Robert AMBOS, Defendant-Appellant.
    No. 01CA0414.
    Colorado Court of Appeals, Div. III.
    April 25, 2002.
    As Modified on Denial of Rehearing June 13, 2002.

      Ken Salazar, Attorney General, Cynthia A. Greenfield, Assistant Attorney General, Denver, Colorado, for Plaintiff-Appellee.
    Sears & Swanson, P.C., Victoria C. Swanson, Lance M. Sears, Colorado Springs, Colorado, for Defendant-Appellant.
   Opinion by

Judge DAILEY.

Defendant, Robert Ambos, appeals the trial court’s order denying his Crim. P. 35(c) motion. We affirm.

Defendant was charged with first degree murder for shooting his girlfriend. On August 12, 1994, pursuant to a plea agreement, defendant pleaded guilty to second degree murder, and the court imposed a stipulated sentence of forty years in the custody of the Department of Corrections.

On October 22, 1996, defendant filed a pro se Crim. P. 35(c) motion claiming ineffective assistance of counsel. In that motion, defendant alleged, among other things, that counsel performed ineffectively by failing to conduct an adequate investigation. On November 19, 1996, the trial court summarily denied defendant’s motion.

On April 30, 1997, defendant, through counsel, filed a second Crim. P. 35(c) motion alleging ineffective assistance of counsel. The trial court conducted an evidentiary hearing on the motion and entered an order denying relief on November 18, 1997. Defendant appealed that ruling.

On May 14, 1999, while that appeal was pending, defendant filed the present motion asking that the trial court either reconsider its ruling denying his Crim. P. 35(c) motion or grant him a “new trial based on newly discovered evidence.” As grounds for his newly discovered evidence claim, defendant alleged that, in the course of defending himself against a wrongful death claim arising from the same incident for which he was convicted, he learned of a physical evidence analysis, not previously known to plea counsel, that would have supported his assertion that the victim was accidentally shot while trying to prevent defendant from committing suicide. In his motion, defendant referred to information he obtained in November 1998 when an investigator and a forensic scientist concluded, based on the original police reports, autopsy report, and crime scene photographs, and on a deposition in which a police officer recounted information available in the police reports, that the physical evidence was not inconsistent with defendant’s assertion.

On May 11, 2000, a division of this court affirmed the trial court’s 1997 order denying defendant’s second Crim. P. 35(c) motion. People v. Ambos, (Colo.App. No. 98CA2044, May 11, 2000)(not selected for official publication).

Thereafter, the trial court conducted an evidentiary hearing on defendant’s motion for reconsideration. The trial court denied the motion, finding that it was time barred and unsupported by allegations establishing justifiable excuse or excusable neglect for the delay. Specifically, the court found that defendant had reason to know about plea counsel’s allegedly inadequate investigation when defendant filed the two previous Crim. P. 35(e) motions. This appeal followed.

I.

Defendant contends that, because his initial 1996 Crim. P. 35(c) motion was timely filed, his 1999 motion was also timely filed because it “relates back” to the earlier motion. We disagree.

Section 16-5-402, C.R.S.2001, provides, as relevant here, that a defendant has three years from the date of conviction in which to commence a collateral attack absent a showing of circumstances that amount to justifiable excuse or excusable neglect. Thus, in this case, the limitations period expired on August 12, 1997, three years after the entry of defendant’s plea.

Contrary to defendant’s suggestion, the timely commencement of a collateral attack fails to toll the limitations period with respect to additional postconvietion claims not contained in the timely filed motion. See People v. Merchant, 983 P.2d 108, 112-13 (Colo.App.1999). The limitations period of § 16-5-402 would be rendered meaningless if a convicted defendant could circumvent it by filing a timely Crim. P. 35(e) motion containing only conclusory allegations and then supplementing those allegations after the limitations period had expired.

II.

Defendant next contends that his 1999 motion was timely filed because the limitations period was tolled during the pen-dency of the appeal from the trial court’s ruling denying his timely filed 1997 Crim. P. 35(c) motion. Again, we disagree.

Where a defendant initiates a direct appeal from a conviction, § 16-5 — 402’s three year limitations period does not begin to run until the appeal is exhausted. This rule was created by the supreme court based on an interpretation of the term “conviction” in § 16-5-402. The supreme court reasoned that, without such a rule, a defendant required to file a motion for postconviction relief within three years of conviction might have to choose between the statutory right to appeal and the statutory right to postconviction review. People v. Hampton, 876 P.2d 1236, 1240 — 11 (Colo.1994).

Defendant does not identify a similar rationale that would warrant a tolling the limitations period of § 16-5-402 during the pen-dency of an appeal from the denial of Crim. P. 35(c) motion. We perceive no justification for such a rule. To the contrary, such a rule would frustrate the purpose of the limitations statute and encourage defendants to extend the limitations period indefinitely by filing a series of postconviction motions and appealing each denial. Accordingly, we reject defendant’s tolling argument.

III.

Defendant also contends that the trial court erred in concluding that he had failed to establish justifiable excuse or excusable neglect. We are not persuaded.

Section 16-5-402(2)(d), C.R.S.2001, provides that a court may hear a collateral attack commenced after the three-year period if it “finds that the failure to seek relief within the applicable time period was the result of circumstances amounting to justifiable excuse or excusable neglect.” In People v. Wiedemer, 852 P.2d 424, 441 — 12 (Colo.1993), the supreme court set forth the following factors to consider in determining whether a defendant’s inaction is attributable to justifiable excuse or excusable neglect: (1) whether circumstances or outside influences prevented a challenge to the prior conviction; (2) whether a defendant who had reason to question the constitutionality of a conviction investigated its validity and took advantage of avenues of relief that were available; (3) whether the defendant either knew that the conviction was constitutionally infirm or had reason to question its validity; (4) whether the defendant had other means of preventing the government’s use of the conviction so that a postconviction challenge was previously unnecessary; (5) the time between the date of conviction and the defendant’s challenge; and (6) the effect that such period has on the state’s ability to defend against the challenge.

Whether a defendant has demonstrated justifiable excuse or excusable neglect is a question of fact to be resolved by the trial court, whose ruling we will not overturn if the record supports its findings. People v. Wiedemer, supra; see also People v. Vigil, 983 P.2d 805, 810 (Colo.App.1999).

We conclude the record supports the trial court’s determination, which was based on due consideration of the Wiedemer factors, that the information disclosed through civil litigation could have reasonably been discovered before the limitations period expired and that it therefore was not “newly discovered evidence” sufficient to establish justifiable excuse or excusable neglect. See People v. Landis, 9 P.3d 1165, 1166-67 (Colo.App.2000)(defendant’s “newly discovered evidence” did not constitute justifiable excuse or excusable neglect because defendant could have obtained the information and presented it to the court before the limitations period expired).

IV.

Finally, defendant contends that the trial court erred in not considering, or ruling upon, that part of his May 1999 motion requesting a new trial based on newly discovered evidence. We disagree.

Because a defendant who pleads guilty has been convicted not after trial but upon his or her own admissions, that defendant is not entitled to request a new trial under Crim. P. 33. Rather, that defendant is limited to seeking postconvietion relief under Crim. P. 35 to set aside the conviction. While Crim. P. 35(c)(2)(V) authorizes relief based upon newly discovered evidence, see People v. Schneider, 25 P.3d 755, 760 (Colo.2001), a claim for such relief is, like all Crim. P. 35(c) claims for relief, subject to the time bar set forth in § 16-5-402.

As we determined in part III, defendant has not shown justifiable excuse or excusable neglect for belatedly seeking relief under Crim. P. 35(c). Consequently, defendant’s newly discovered evidence claim is itself barred by § 16-5-402.

The order is affirmed.

Judge NEY and Judge ROY concur.


author: judge NIETO.

text:
    The PEOPLE of the State of Colorado, Plaintiff-Appellee, v. John Manuel OVALLE, Defendant-Appellant.
    No. 01CA0050.
    Colorado Court of Appeals, Div. V.
    May 9, 2002.
    Rehearing Denied June 27, 2002.

      Ken Salazar, Attorney General, Dawn M. Weber, Assistant Attorney General, Denver, Colorado, for Plaintiff-Appellee.
    Robert Stuart McCormick, Fort Collins, Colorado, for Defendant-Appellant.
   Opinion by

judge NIETO.

Defendant, John Manuel Ovalle, appeals the sentence imposed upon his guilty plea to one count of escape, a class three felony. We dismiss the appeal in part and affirm the sentence.

This ease originated from an escape charge filed against defendant in 1993 after he failed to return to a community corrections residential facility. Defendant entered into a plea agreement, whereby he pled guilty to an amended count of attempted escape, a class four felony, in exchange for dismissal of the original class three felony charge. Under the terms of the agreement, defendant was sentenced to two years in the Department of Corrections (DOC), plus the three-year mandatory parole term required by § 18-1-105(l)(a)(V)(A), C.R.S.2001.

Defendant was released from DOC to begin serving his mandatory parole period on December 12, 1995. Later, defendant’s parole was revoked, and he was returned to DOC to serve the time remaining on his mandatory parole term.

Defendant then filed a motion entitled “Petition Pursuant to Rule 106, C.R.Cr.P,” which the trial court considered as a postconviction motion under Crim. P. 35(c). In the motion, defendant contended that DOC had not credited the proper amount of presentence confinement and earned time against his remaining sentence. The trial court granted the motion and determined that defendant was entitled to 383 days credit, leaving approximately two years remaining to be served.

A few days before this ruling, defendant had filed a separate Crim. P. 35(c) motion, in which he contended that he had not been adequately advised of the mandatory parole term that was part of his sentence on the attempted escape charge, and that the addition of the term violated his plea agreement. He argued that his sentence was void and illegal.

In an order dated August 13, 1999, the trial court granted the motion, set aside defendant’s guilty plea, vacated his sentence, reinstated the original charge, and set the case over for arraignment. No timely appeal was taken from this ruling.

In addition to the reinstated charge, defendant was charged with four habitual criminal counts. At that time, defendant had charges pending in another case that also included habitual criminal counts. Defendant then entered into a plea agreement under which he pled guilty to a charge in each case.

In the case that is the subject of this appeal, defendant entered a guilty plea to the class three felony escape charge and the habitual criminal counts were dismissed. Defendant was sentenced to eight years in DOC plus five years of mandatory parole, with credit for time served to be determined. This appeal followed.

I.

Defendant contends that the trial court erred in its order dated August 13, 1999. He argues that the court should not have granted his second Crim. P. 35(c) motion, and that it erred by vacating his conviction and sentence and reinstating the original class three felony escape charge. However, we are without jurisdiction to review that order or contentions based upon it.

Crim. P. 35(c)(3) provides, in pertinent part:

If the court finds that defendant is entitled to postconviction relief, the court shall vacate and set aside the judgment, impose a new sentence, or grant a new trial, or discharge the prisoner, or make such orders as may appear appropriate to restore a right which was violated.... The order of the trial court granting or denying the motion is a final order reviewable on appeal. (emphasis added)

Here, the trial court’s order was entered on August 13, 1999, and it was not timely appealed. Thus, once the time limitations of C.A.R. 4(b) expired, the order became final. See People v. Janke, 852 P.2d 1271, 1273 (Colo.App.1992)(order ruling on a Crim. P. 35(c) motion becomes final after the period in which to perfect an appeal expires).

Therefore, we are without jurisdiction to address defendant’s contentions regarding the August 13, 1999, order. As a result, we dismiss this portion of the appeal.

II.

Defendant also contends that his sentence violates the constitutional prohibition against double jeopardy because he had already discharged the DOC portion of the sentence imposed upon his original guilty plea. He argues that imposing additional imprisonment constitutes multiple punishments for the same offense. We disagree.

The double jeopardy clauses of the United States and Colorado constitutions protect an accused from multiple punishments for the same offense. U.S. Const, amend. Y; Colo. Const, art. II, § 18; People v. Chavez, 32 P.3d 613 (Colo.App.2001).

However, if a judgment of conviction is reversed for an error of law, the defendant is not deemed to have been in jeopardy for purposes of retrial. Colo. Const, art. II, § 18; § 18-l-304(l)(c), C.R.S.2001. A judgment of conviction that is reversed for an error of law renders the verdict and judgment a nullity, warranting a second trial based on the same facts. Stafford v. People, 165 Colo. 328, 331, 438 P.2d 696, 697 (1968). Thus, the continued prosecution of the escape charge after the original conviction and sentence were vacated did not violate the prohibition against double jeopardy.

Nonetheless, defendant argues that he had fully served his sentence because he had discharged the DOC portion of the sentence and, therefore, resentencing him to a longer term in DOC constituted multiple punishments for the same offense. We disagree. While defendant might be correct that his second sentence would be barred if he had fully served the original sentence, see United States v. Arrellano-Rios; 799 F.2d 520 (9th Cir.1986)(increasing a legal sentence after it has been fully served violates the Double Jeopardy Clause), here the record shows that he had not fully discharged his original sentence.

Every sentence imposed under § 18-1-105(l)(a)(V), C.R.S.2001, contains, as separate components, a prison term and a term of parole. Martin v. People, 27 P.3d 846, 850 (Colo.2001). “[Ejvery DOC sentence consists of a period of imprisonment and a period of mandatory parole.” People v. Garcia, — P.3d -, 2002 WL 58926 (Colo.App. No. 99CA2360, Jan. 17, 2002). If a defendant’s mandatory parole is revoked, he or she may be required to serve the remaining period of mandatory parole in DOC. Section 17-22.5-403(8)(a), C.R.S.2001; Craig v. People, 986 P.2d 951 (Colo.1999). Thus, to serve the sentence fully, a defendant must discharge both the imprisonment and the mandatory parole parts of the sentence.

Here, defendant’s original sentence consisted of two years imprisonment and three years mandatory parole. He discharged the imprisonment portion of his sentence when he was released to parole. See § 18 — 1— 105(l)(a)(V)(D), C.R.S.2001. However, it is undisputed that he had not yet discharged the mandatory parole portion of his sentence. Therefore, he was still serving the original sentence when the original conviction was vacated. See People v. Barth, 981 P.2d 1102 (Colo.App.1999)(parole is merely a privilege to serve remainder of sentence outside prison).

Accordingly, we conclude that discharge of only the imprisonment portion of defendant’s sentence did not constitute a discharge of his entire sentence and did not create a double jeopardy bar to further prosecution after the original conviction and sentence had been vacated. See People v. District Court, 673 P.2d 991 (Colo.1983)(when an original sentence is found to be illegal, resentencing to a term longer than the original sentence does not constitute double jeopardy).

Because we have determined that defendant’s sentence did not violate the prohibition against double jeopardy, we do not consider the prosecution’s argument that defendant waived the defense by failing to raise it before he pled guilty.

Therefore, the appeal as to the August 13, 1999 order is dismissed, and the sentence is affirmed.

Judge DAVIDSON and Judge CASEBOLT concur.


author: Judge TAUBMAN.

text:
    UIH-SFCC HOLDINGS, L.P. and UIH-SFCC, L.P., Plaintiffs-Appellants, v. Loic BRIGATO, Winfred J. Anderson, and Yoshiko Payne, Defendants-Appellees.
    No. 01CA1234.
    Colorado Court of Appeals, Div. IV.
    May 23, 2002.

      Jacobs Chase Frick Kleinkopf & Kelley, Jeffrey A. Chase, N. Reid Neureiter, Denver, Colorado, for Plaintiffs-Appellants.
    No Appearance for Defendants-Appellees.
   Opinion by

Judge TAUBMAN.

Plaintiffs, UIH-SFCC Holdings, L.P. and UIH-SFCC, L.P. (collectively UIH), appeal the trial court’s order dismissing their complaint on the basis of forum non conveniens. We reverse.

UIH-SFCC, L.P. is a Colorado partnership with its principal place of business in Denver. UIH-SFCC Holdings, L.P., the ■ general partner in UIH-SFCC, L.P., is a Colorado partnership organized under the laws of Colorado. UIH-SFCC Holdings, L.P. is an indirect, wholly-owned subsidiary of UIH, Inc., a Colorado corporation. UIH, Inc. is in the business of acquiring ownership interests in and maintaining cable television systems internationally. When UIH filed this complaint, UIH, Inc. had interests in 23 countries, serving 10.7 million homes and approximately 4 million cable subscribers.

Defendants, Loic Brigato, Winfred J. Anderson, and Yoshiko Payne (collectively partners), are limited partners in UIH-SFCC, L.P. Brigato is a citizen of France and French Polynesia. Anderson and Payne are United States citizens.

This dispute concerns the operation of the French Polynesian cable television system. According to the allegations in the complaint, in 1994, the partners obtained broadcast licenses from the French government and sought investment funds from UIH, Inc. to develop the cable television industry in Tahiti. The parties formed the partnership in 1995 by executing a partnership agreement. Simultaneously, the parties executed a master agreement whereby the partnership obtained all the preferred shares in a French company that owned the then existing Tahitian cable television system. By 1998, UIH-SFCC Holdings, L.P. had invested approximately twenty million dollars in the venture.

In August 1998, UIH filed a complaint in Colorado district court against the partners, alleging that they had refused to comply with the terms of the partnership agreement and breached their fiduciary duties to UIH.

In June 2001, the trial court, after denying the partners’ motion to dismiss for lack of personal jurisdiction and forum non con-veniens, granted the partners’ motion to reconsider and dismissed the case without prejudice under the doctrine of forum non conveniens. This appeal followed.

I. Final Judgment

As an initial matter, we note that a trial court’s dismissal of an action without prejudice typically does not constitute a final judgment for purposes of appeal. However, such a dismissal is considered final and ap-pealable if further action by the plaintiff would be barred by the statute of limitations. See Brody v. Bock, 897 P.2d 769 (Colo.1995); B.C. Inv. Co. v. Throm, 650 P.2d 1333 (Colo.App.1982). Because it appears that the applicable three-year and two-year statutes of limitations would bar UIH from refiling its claims, we will consider the trial court’s dismissal as final and address the merits of this appeal.

II. Motion to Reconsider

UIH contends that the law of the case doctrine should have precluded the trial court from granting the partners’ motion for reconsideration. We disagree.

In February 2000, the trial court denied the partners’ motion to dismiss based on forum non conveniens, finding that although the partners’ contacts with Colorado were minimal and virtually all the witnesses and relevant evidence were located in French Polynesia, it had no basis to grant the motion. However, the court noted its concerns regarding the partners’ ability to defend the action in Colorado and concluded that if the partners’ due process rights were in jeopardy, it might reconsider its order.

Subsequently, in their motion for reconsideration, the partners submitted an affidavit from a French Polynesian representative to the French National Assembly, stating that resolution of this action in Colorado would impact the sovereign and national security interests of France and French Polynesia. The partners also argued that they were financially unable to defend the action in Colorado and submitted affidavits from each of the partners detailing their impecuniousness.

We conclude that despite the initial order, the trial court was not prohibited from reconsidering its ruling in light of the new circumstances. See Forbes v. Goldenhersh, 899 P.2d 246 (Colo.App.1994)(trial court which had entered a partial summary judgment ruling did not err in considering evidence on that issue during trial and in reversing its ruling in its final judgment); see also Vashone-Caruso v. Suthers, 29 P.3d 339 (Colo.App.2001)(court may decline to apply law of the case doctrine if it determines that the previous decision is no longer sound because of changed conditions or law, or legal or factual error, or if the prior decision would result in manifest injustice).

Furthermore, we reject UIH’s contention that the trial court was precluded from considering the partners’ motion to reconsider because the information contained therein could have been discovered earlier. This motion did not seek a new trial. As a result, the trial court was not limited by the requirements of C.R.C.P. 59(d). See also Kennedy v. Bailey, 169 Colo. 43, 453 P.2d 808 (1969)(to sustain a motion for new trial on the grounds of newly discovered evidence, it is essential that the evidence could not have been discovered in the exercise of reasonable diligence and produced at the trial).

Therefore, we conclude that the trial court properly addressed the partners’ motion to reconsider.

III. Forum Non Conveniens

UIH contends that the trial court erred in granting the partners’ motion to reconsider because the doctrine of forum non conveniens does not apply in Colorado when the plaintiff is a Colorado resident and has established personal jurisdiction over the defendant in Colorado. We disagree. However, we conclude, for the reasons stated below, that the trial court nonetheless abused its discretion when it dismissed UIH’s complaint based on forum non conveniens.

Forum non conveniens is an equitable doctrine under which a trial court has discretion to dismiss an action when it concludes that a more appropriate forum lies elsewhere. PMI Mortg. Ins. Co. v. Deseret Fed. Sav. & Loan, 757 P.2d 1156, 1158 (Colo.1988). The burden is on the moving party to establish the need for a forum non conve-niens transfer. See Rivendell Forest Prods., Ltd. v. Canadian Pac. Ltd., 2 F.3d 990, 993 (10th Cir.1993).

The forum non conveniens determination is committed to the sound discretion of the trial court. The court’s decision deserves substantial deference and may be reversed only when there has been a clear abuse of discretion. Piper Aircraft Co. v. Reyno, 454 U.S. 235, 102 S.Ct. 252, 70 L.Ed.2d 419 (1981). See also PMI Mortg. Ins. Co. v. Deseret Fed. Sav. & Loan, supra (concluding that the trial court did not abuse its discretion in dismissing the action based on forum non conveniens).

However, there is a strong presumption in favor of a plaintiffs choice of forum. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S.Ct. 839, 91 L.Ed. 1055 (1947)(noting the plaintiffs choice of forum should rarely be disturbed). This is especially true when the party choosing a United States forum is a domestic entity and the alternative forum is foreign. See Olympic Corp. v. Societe Generale, 462 F.2d 376 (2d Cir.1972). See also Rivendell Forest Prods., Ltd. v. Canadian Pac. Ltd., supra, 2 F.3d at 993 n. 4 (noting that if domestic law applies, or if the foreign forum is inadequate, then forum non conve-niens doctrine is inapplicable).

In Colorado, the doctrine of forum non conveniens is available in only the most limited circumstances. The supreme court first considered the availability of forum non con-veniens in Colorado courts in McDonnell-Douglas Corp. v. Lohn, 192 Colo. 200, 557 P.2d 373 (1976). The McDonnellr-Douglas court relied in part on Colo. Const, art. II, § 6, which provides: “Courts of justice shall be open to every person, and a speedy remedy afforded for every injury to person, property or character; and right and justice should be administered without sale, denial or delay.” Based on this constitutional provision, as well as the reasoning employed by courts in other jurisdictions in which the doctrine had been applied, the supreme court concluded that forum non conveniens generally may not be used to dismiss an action filed by a resident plaintiff. It held that “the doctrine of forum non conveniens has only the most limited application in Colorado courts, and except in most unusual circumstances the choice of a Colorado forum by a resident plaintiff will not be disturbed.” McDonnell-Douglas Corp. v. Lohn, supra, 192 Colo, at 201, 557 P.2d at 374. (Emphasis added.) See also Marsin Med. Int’l v. Bauhinia Ltd., 948 F.Supp. 180, 190 (E.D.N.Y.1996)(defendant must offer “evidence of ‘unusually extreme circumstances’ demonstrating that ‘material injustice is manifest’ to justify overturning plaintiffs choice in favor of a foreign forum”; quoting Nationsbank of Fla. v. Banco Exterior de España, 867 F.Supp. 167, 170 (S.D.N.Y.1994)).

Since McDonnellr-Douglas, no Colorado appellate court has affirmed dismissal for forum non conveniens of a ease filed by a resident plaintiff. In fact, only one reported decision has dismissed a case under this doctrine. See PM I Mortg. Ins. Co. v. Deseret Fed. Sav. & Loan, supra (affirming trial court’s dismissal on the basis of forum non conveniens when neither party was a Colorado resident, the cause of action arose beyond the border of Colorado, numerous witnesses were located in California, similar actions were pending in California and Utah, Colorado residents were not affected by the outcome of the litigation, and the litigation would require a Colorado court to interpret California law).

Thus, the dispositive issue is whether this case presents the unusual circumstances necessary to justify denying a resident plaintiff access to a Colorado forum.

A review of the reported Colorado decisions discussing unusual circumstances illustrates the limits of this term. In McDonnellr-Douglas, the court noted that the difficulty and expense of securing witnesses and the availability of physical evidence outside Colorado are not unusual circumstances. McDonnell-Douglas Corp. v. Lohn, supra, 192 Colo, at 201, 557 P.2d at 374 (noting inconvenience and expense are inherent in all litigation and these factors are insufficient to oust a resident plaintiff from the chosen forum). Similarly, in Kelce v. Touche Ross & Co., 192 Colo. 202, 557 P.2d 374 (1976), the supreme court concluded that the expense of securing witnesses, the location of the evidence, and the availability of another court did not approach the circumstances necessary to deprive a resident of access to the state’s court system. Finally, in Casey v. Truss, 720 P.2d 985 (Colo.App.1986), a division of this court stated that the applicability of Alaskan law was insufficient to oust the resident plaintiff from his chosen forum.

Here, UIH is a Colorado resident partnership, and neither party is contesting the trial court’s exercise of personal jurisdiction over the partners.

The trial court dismissed UIH’s complaint, concluding that: the partners’ contacts with the state were minimal; Colorado’s interest in providing a judicial forum for its own citizens is drastically reduced where the plaintiff is a large multinational corporation; similar litigation was pending in French Polynesia; and the dispute was an important concern for French Polynesia. In addition, the trial court found that the partners are persons of limited means and would have financial difficulty defending the action in Colorado. It noted the costs for travel, translation and interpretation services, and international communications. Finally, it considered the affidavits from potential witnesses stating they were unwilling to travel to Colorado, including the affidavit of the French Polynesian representative noted above.

However, it is undisputed that the partners initiated the business dealings with UIH, the contract was entered into in Colorado, and the parties agreed in writing that Colorado law would govern disputes. Indeed, Anderson admitted that the partners agreed to the possibility of arbitration in the United States. Additionally, the difficulty in securing witnesses is not an unusual circumstance. Further, we conclude that the availability of the Tahitian forum and the costs associated with litigating the action here also are not unusual circumstances as contemplated by McDonnellr-Douglas.

No reported Colorado decision has distinguished between a resident plaintiff and a plaintiff that is a Colorado resident partnership whose general partner is a wholly-owned subsidiary of a Colorado corporation doing business internationally. Given the severe limitation of the forum non conveniens doctrine in Colorado, we decline to carve out an exception solely on the basis that the Colorado partnerships here do business internationally.

Finally, we conclude that the vague assertions contained in the affidavit of the French Polynesian representative, without more, are insufficient to deny UIH a forum in its resident state. In his affidavit, the representative maintained that no United States court should decide issues important to the people of French Polynesia. In particular, he asserted that this case impacts the sovereign interest of the French government and that because the telecommunications sector is of high strategic importance, the case also affects national security issues of France and French Polynesia. However, there is no indication in the record that the representative is authorized to speak for the governments of France or French Polynesia. Accordingly, this affidavit does not present an unusual circumstance warranting a departure from the norm that a Colorado resident is entitled to litigate its case in this state.

Thus, we conclude that the trial court abused its discretion when it granted the partners’ motion to reconsider and dismissed the case.

The order of the trial court is reversed.

Judge MARQUEZ and Judge VOGT concur.


author: Judge NIETO.

text:
    In the Matter of the ESTATE OF Rocco A. SCHIOLA, a/k/a Rocco Schiola, Deceased, Petitioner-Appellee, v. COLORADO DEPARTMENT OF HEALTH CARE POLICY AND FINANCING, Respondent-Appellant.
    No. 01CA1255.
    Colorado Court of Appeals, Div. V.
    May 23, 2002.

      Solem, Mack & Steinhoff, P.C., R. Erie Solem, Englewood, Colorado, for Petitioner-Appellee.
    Ken Salazar, Attorney General, Ann Hause, Assistant Attorney General, Denver, Colorado, for Respondent-Appellant.
   Opinion by

Judge NIETO.

The Department of Health Care Policy and Financing appeals the dismissal of its petition for allowance of claim filed against the Estate of Roeco A. Schiola. We affirm.

Prior to his death, Mr. Schiola received Medicaid benefits from a program administered by the Department. The Department reimbursed expenses for medical care provided to Mr. Schiola. Following Mr. Schiola’s death, the Department, through an agent, filed a claim against his estate to recover benefits paid on his behalf. The personal representative denied the claim, and a hearing was held on the Department’s petition for allowance of claim.

At the hearing, the personal representative asserted that the probate court lacked jurisdiction because the Department had not followed its own procedures, which permit an application for an undue hardship waiver of the claim. The court continued the hearing so the application could be made.

The Department and the personal representative could not agree on the procedure, and no application was filed. The personal representative then filed a motion to dismiss the Department’s petition for allowance of claim, alleging that the Department failed to give the heirs notice of their right to apply for a hardship waiver of the claim and that the Department’s procedures failed to provide an administrative hearing on an application for waiver. The court found that the Department had failed to give proper notice to the individuals affected by the proposed recovery and granted the motion. This appeal followed.

The Department contends that the court erred in dismissing its petition because it followed all required administrative procedures and gave proper notice of the process for applying for a hardship waiver. We agree that the Department properly served notice on the personal representative, but nonetheless affirm the probate court’s order because the written notice was defective.

Federal law provides that states participating in the Medicaid program must establish Medicaid recovery procedures in accordance with federal standards. See 42 U.S.C. § 1396p; § 26-4-403.3, C.R.S.2001. As relevant here, 42 U.S.C. § 1396p(b)(3) provides: “The State agency shall establish procedures (in accordance with standards specified by the Secretary) under which the agency shall waive the application of this subsection ... if such application would work an undue hardship as determined on the basis of criteria established by the Secretary.”

The federal standards for the states’ Medicaid recovery programs are set out in § 3810 of the State Medicaid Manual promulgated by the Federal Health Care Financing Administration. Section 3810(D) of the State Medicaid Manual requires states to adopt procedures under which individuals who will be affected by recovery will have the right to apply for an undue hardship waiver. These procedures must specify the method for applying for a waiver, the hearing and appeal rights, and the time frames involved. Section 3810(G)(2) of the State Medicaid Manual provides:

You should give a specific notice to individuals affected by the proposed recovery whenever [recovery is sought]. The notice should be served on the executor or legally authorized representative of the individual’s estate, or, if these are not known to the State, other survivors or heirs. The executor or legally authorized representative should be required to notify individuals who would be affected by the proposed recovery. In the situation where there is no executor or legally authorized representative, the State should notify the family or the heirs. The notice should include, at a minimum, the action the State intends to take, reason for the action, individual’s right to a hearing (42 CFR Subpart E), method by which he/she may obtain a hearing, procedure for applying for a hardship waiver, and the amount to be recovered. An administrative hearing is not required if State law provides for court review as the next appellate step.

Under state law, the Department is authorized to establish an “estate recovery program only insofar as such program is in accordance with” the federal requirements. Section 26-4h103.3(2Xc), C.R.S.2001.

The Department attempted to give notice “to the individuals affected by the proposed recovery” by sending a Notice of Estate Claim to the attorney who represented the personal representative. The probate court found that notice to the personal representative was not sufficient compliance with the federal regulation requiring notice to the individuals affected. However, we agree with the Department that service of a notice in proper form on the personal representative would be sufficient to give notice to the individuals affected by the claim against the estate.

Section 3810(G)(2) of the State Medicaid Manual specifically provides that notice of the right to apply for a hardship waiver should be served on the representative of the decedent’s estate with directions to notify the affected individuals of their right to seek a waiver. Notice that is reasonably calculated to apprise interested parties of the pendency of an action and that provides them an opportunity to participate meets the requirements of due process. Long v. Pippin, 914 P.2d 529 (Colo.App.1996). For the following reasons we conclude that serving the notice on the personal representative, as permitted by § 3810(G)(2), is reasonably calculated to give notice to the affected individuals.

First, the personal representative is required to take all steps reasonably necessary to protect and preserve the estate in his or her possession. Section 15-12-709, C.R.S. 2001. Providing the Notice of Claim to the affected individuals who may be able to obtain a waiver of a claim against the estate is a reasonable step that may protect and preserve assets of the estate.

Second, “the personal representative acts in a fiduciary capacity for the benefit of creditors or others interested in the estate.” In re Estate of Masden, 24 P.3d 634, 637 (Colo.App.2001); see also § 15-12-711, C.R.S.2001; Colorado National Bank v. Friedman, 846 P.2d 159 (Colo.1993). The simple act of providing to a beneficiary a notice that comes to a fiduciary and that he or she knows may have significant value to a beneficiary is well within the duty of a fiduciary. See Vento v. Colorado National Bank-Pueblo, 907 P.2d 642 (Colo.App.1995) (trustee must exercise the same care that would be used in safeguarding and preserving his or her own property).

Therefore, because of the duties of the personal representative described above, service of the notice on the personal representative with directions to give notice to the affected individuals would be reasonably calculated to provide notice to those individuals. Accordingly, the probate court erred by holding that the Department could not provide notice to the affected individuals by serving the notice on the personal representative. The personal representative argues that he cannot be required to give the notice to heirs or others interested in the estate because he does not represent them and they may have conflicting interests. We reject this argument because requiring the personal representative to give the notice to these interested persons does not require him to represent them or take any action on their behalf. Thus, forwarding the notice does not create a conflict for him or require him to take action beyond the duties of a personal representative.

However, although the Department was permitted to serve the notice on the personal representative, the record here shows that the Notice of Claim served by the Department was defective.

The Notice of Claim did not inform the personal representative that it was the heirs or other affected individuals who had the right to apply for the hardship waiver, and it did not direct the personal representative to give the notice to those individuals. Section 3810(G)(2) requires that notice be given to “individuals affected by the proposed recovery.” It provides for service of the notice on the personal representative only as a means of achieving the required notice to affected individuals. While the personal representative can be required to forward the notice to the affected individuals, a notice that does not in any way identify who should receive the notice, and does not contain specific directions for the personal representative to notify those persons, does not provide the required notice to “individuals affected by the proposed recovery.”

Section 3810(D) requires advance notice to affected individuals of their right to apply for a hardship waiver. Because the notice provided by the Department failed to provide this notice, it was fatally defective.

The probate court did not make findings concerning the contents of the Notice of Claim nor the requirements of the regulations. However, the interpretation of regulations and written documents is a matter of law that we review de novo. See Weisbart v. Agri Tech, Inc., 22 P.3d 954 (Colo.App.2001); Ledbury v. Department of Higher Education, 962 P.2d 308 (Colo.App.1997).

Having concluded that the Department did not give the notice required by § 3810(D) and (G)(2), we further conclude that the probate court did not err by dismissing the Department’s claim against the estate. See Kratzer v. Colorado Intergovernmental Risk Share Agency, 18 P.3d 766 (Colo.App.2000) (appellate court may affirm trial court on grounds different from those relied on by trial court).

Because our holding that the Department did not provide proper notice fully resolves this appeal, we do not consider whether the Department must provide an administrative hearing on applications for hardship waivers.

The order is affirmed.

Judge DAVIDSON and Judge CASEBOLT concur.