Opinion
No. X01 CV04 4005268 S
May 14, 2008
MEMORANDUM OF DECISION RE MOTION TO DISMISS #171
I BACKSTORY
Relevant facts are set out in Neighborhood Builders, Inc. v. Madison, Superior Court, complex litigation docket at Waterbury, Docket No. X01 CV 04 4005268 (October 12, 2007, Cremins, J.). "The plaintiffs, Richard Gentile Building Co., LLC (Gentile), Peter Smith Building Co., LLC (Smith), The Dowler Group, LLC (Dowler), Paul Coady Construction, LLC (Coady), Neighborhood Builders, Inc. (Neighborhood Builders), and MJM Builders, Inc. (MJM), filed a five-count amended complaint, as a putative class action on January 21, 2005." "According to the amended complaint, Gentile, Smith, Dowler, and Coady are Connecticut limited liability companies and small businesses with their principal places of business in Connecticut." Id. "Neighborhood Builders and MJM are Connecticut corporations and small businesses with their principal places of business in Connecticut. According to the amended complaint, the defendant, the town of Madison, is a municipal corporation located in New Haven County, Connecticut, and organized pursuant to the laws of the state of Connecticut with a board of [selectmen] form of government.
"In the amended complaint, all of the plaintiffs except for Richard Gentile Building Co., LLC, who was not a party to the original complaint, were listed by shortened names that were initially provided in the original complaint filed on December 20, 2004. Paragraphs one through five of section one of the original complaint are incorporated by reference into the amended complaint." Neighborhood Builders, Inc. v. Madison, supra, Superior Court, Docket No. X01 CV 04 4005268 n. 1.
"Coady subsequently withdrew from this action." Neighborhood Builders, Inc. v. Madison, supra, Superior Court, Docket No. X01 CV 04 4005268 n. 2.
"Count one alleges a violation of General Statutes § 7-130i, Count two alleges a violation of General Statutes § 7-148, count three alleges a violation of the constitution of Connecticut, article ten[th], §§ 1 and 2, count four alleges a violation of 42 U.S.C. § 1983, and count five alleges a violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq. The plaintiffs are seeking declaratory relief, injunctive relief, damages, and counsel fees and costs, which they allege are based on the `Defendant's unlawful practices related to the collection, use, and allocation of monies collected from the Plaintiffs and others similarly situated, under the mechanism of building permit fees.'" (Amended complaint, § I, ¶ 8.)
"Specifically, the plaintiffs allege that pursuant to the defendant's town ordinance, they and `others similarly situated, are required to obtain building permits in order to conduct their trade the construction and/or renovation of building structures on parcels of land.' (Amended complaint, § III, count one, ¶ 14.) The plaintiffs further allege that as per General Statutes § 7-130i et seq. and case law, `a fee is not a revenue measure, but a means of compensating the government for the cost of offering and regulating a particular service;' (amended complaint, § III, count one, ¶ 16) and `[f]ees in excess of the amount which is necessary for offering and regulating a particular service constitute an illegal tax.' (Amended complaint, § III, count one, ¶ 17.) According to the plaintiffs, the revenues that the defendant derives from the plaintiffs and others similarly situated are significantly in excess of the cost relating to offering and regulating building activity in Madison. It is alleged that the defendant unlawfully uses the building permit fees collected from the plaintiffs and others similarly situated in part to fund its general operations. The plaintiffs also allege that the defendant unlawfully uses the building permit fees to fund social programs and other initiatives that bear no relationship to the offering and regulating of building activity in Madison. "According to the plaintiffs, the defendant's conduct exceeds the authority provided to municipalities with respect to lawful taxation pursuant to § 7-148. The plaintiffs further allege that the defendant's use of the building permit fees to fund social programs and other initiatives is in violation of article [tenth, §§ 1 and 2, of the constitution of Connecticut] as the defendant has exercised a power that the Connecticut General Assembly has not given to it. In the amended complaint, it is further alleged that the defendant is a local government that acts under color of state law as per 42 U.S.C. § 1983 et seq., and that the `Defendant's building permit fees schedule constitutes an unconstitutional deprivation of property without just compensation in violation of the Fifth Amendment to the United States Constitution, incorporated through the Fourteenth Amendment to apply to the states.' (Amended complaint, § III, count four, ¶ 27.) With respect to count four, the plaintiffs are seeking `[a] declaration that [the] Defendant's building permit fees constitute an unconstitutional and illegal taking without just compensation . . .' (Amended complaint, § III, count four, ¶ 31.)" Neighborhood Builders, Inc. v. Madison, supra, Superior Court, Docket No. X01 CV 04 4005268.
II JOURNEY OF THE PLEADINGS
"The defendant filed its answer on February 22, 2005, and following requests to revise filed by the plaintiffs on March 4, 2005, and March 7, 2005, the defendant filed a revised answer and special defenses on March 30, 2005." Id. "On April 15, 2005, the plaintiffs filed a reply to the defendant's special defenses, denying each and every one. On March 19, 2007, the plaintiffs filed a motion for class certification accompanied by a memorandum of law in support thereof. On May 15, 2007, the defendant filed a memorandum in opposition to the motion for class certification." Id.
"The two requests to revise appear to be identical to each other." Neighborhood Builders, Inc. v. Madison, supra Superior Court, Docket No. X01 CV 04 4005268 n. 3.
On October 12, 2007, the plaintiffs' motion to certify as a class was granted as to the entire complaint. Id. The defendant filed an appeal of the granting of class certification on October 25, 2007; the appeal is still pending at this time.
On December 27, 2007 the defendant filed a motion to dismiss all five counts of the plaintiffs' complaint for lack of subject matter jurisdiction. The defendant's position is that the plaintiffs lack standing because neither § 7-130i, § 7-148, nor article tenth, §§ 1 and 2, of the constitution of Connecticut provide for private causes of action for the plaintiffs. Another ground for the defendant's motion to dismiss is that this court does not have subject matter jurisdiction over the plaintiffs' 42 U.S.C. § 1983 claim. The last ground for defendant's motion to dismiss is that the plaintiffs do not have standing because CUTPA does not provide for a private cause of action against Connecticut municipalities.
The plaintiffs filed their memorandum objecting to the motion to dismiss on February 4, 2008. The plaintiffs' position with regard to the motion to dismiss is that the motion "is a thinly-veiled attempt to adjudicate the causes of action in this matter, as would a motion to strike or motion for summary judgment, rather than a true attack on the subject matter jurisdiction of this court." (Plaintiffs' memorandum in opposition to motion to dismiss dated February 4, 2008, p. 2.) The plaintiffs assert, inter alia, that the defendants "misconstrue" counts one, two and three of the operative complaint as seeking monetary damages when, in truth, the plaintiffs are seeking, with respect to those counts, a declaratory judgment that the defendant's imposition of building permit fees constitutes an ultra vires act exceeding the authority granted to the defendant as a Connecticut municipality. Additionally, as to count five of the operative complaint, the plaintiffs argue that municipalities do not have blanket immunity from being liable for CUTPA violations. The plaintiffs argue that the issue of whether the defendant is liable for CUTPA violations is one of fact, not law. The plaintiffs further contend that the factors of Connelly v. Housing Authority, 213 Conn. 354, 361-65, 567 A.2d 1212 (1990) must be applied to determine whether a municipality is exempt from CUTPA. The defendant filed its reply on February 15, 2008.
In their memorandum in opposition to the motion to dismiss, the plaintiffs do not address the defendant's arguments pertaining to count four of the operative complaint, which alleges violations of 42 U.S.C. § 1983; nevertheless at oral argument on February 25, 2008, the counsel for the plaintiffs stated that the plaintiffs had not "abandoned" pursuing an objection to the motion to dismiss count four of the operative complaint but "wish[ed] to argue it here." (Transcript of February 25, 2008 oral argument, p. 23.)
As discussed below, the motion to dismiss counts one, two, three and four of the operative complaint is granted, and the motion to dismiss count five is denied.
III DISCUSSION Motion to Dismiss
"The standard of review of a motion to dismiss is . . . well established. In ruling upon whether a complaint survives a motion to dismiss, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader . . . A motion to dismiss tests, inter alia, whether, on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) DaimlerChrysler Corp. v. Law, 284 Conn. 701, 711, 937 A.2d 675 (2007). "A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court." (Emphasis in original; internal quotation marks omitted.) Gurliacci v. Mayer, 218 Conn. 531, 544, 590 A.2d 914 (1991). "[A] motion to dismiss is not designed to test the legal sufficiency of a complaint in terms of whether it states a cause of action." Pratt v. Old Saybrook, 225 Conn. 177, 185, 621 A.2d 1322 (1993). "If a party is found to lack standing, the court is without subject matter jurisdiction to determine the cause . . . A determination regarding a trial court's subject matter jurisdiction is a question of law." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 286 Conn. 264, 271, 943 A.2d 420 (2008). "[S]tanding . . . implicates a court's subject matter jurisdiction, which may be raised at any point in judicial proceedings." Stamford Hospital v. Vega, 236 Conn. 646, 656, 674 A.2d 821 (1996).
CT Page 8104
B Declaratory Judgment
Practice Book § 17-56(a)(2) provides in relevant part that in an action for declaratory judgment, "[t]he prayer for relief shall state with precision the declaratory judgment desired . . ." The Supreme Court has held that the precision requirement is mandatory. For example, in Kellems v. Brown, 163 Conn. 478, 480, 313 A.2d 53 (1972), the court was faced with "procedure . . . followed by the parties . . . [that] deviated from the usual practice of a direct stipulation as to the operative facts with a prayer for relief stating `with precision the declaratory judgment desired.'" In response the court stated that "precision and specificity . . . [are] not only desirable but also mandatory in a declaratory judgment action." (Emphasis added.) Id., 482-83. See also Kievman v. Grevers, 122 Conn. 406, 412, 189 A. 609 (1937) ("[t]he prayer for relief in an action seeking a declaratory judgment must state with precision the declaratory judgment desired"); Aetna Life Ins. Co. v. Richmond, 107 Conn. 117, 119, 139 A. 702 (1927) ("[t]his complaint in no way suggests that a declaratory judgment is sought. It does not ask the court to declare the rights of the parties. Where such judgment is desired, it should be so stated with precision, in an appropriate prayer for relief").In at least one case, Adams v. Rubinow, 157 Conn. 150, 167-68, 251 A.2d 49 (1968), the court, notwithstanding the mandatory rule of precision, attempted to craft declaratory relief for the plaintiffs, even though the prayer for relief sought answers to eleven "extremely broad" questions. The issue in Adams was whether a public act concerning the administration of the Connecticut probate courts was unconstitutional. Id., 152. Although the court noted that it "would probably be justified in refusing to entertain [the plaintiff's questions] at all;" Id., 168; it chose instead "to attempt to comply, as far as [was] reasonably possible, with the obvious desires of the parties and to overlook technical procedural deficiencies insofar as it can safely and properly be done." Id. The main reason for departing from the norm of requiring specificity was the "far reaching public interest" involved in the outcome of the case. Id.
In their operative complaint, the plaintiffs list declaratory relief as one of several claimed remedies in their prayer for relief. The prayer does not enumerate beyond those words what declaration it is specifically seeking, and the plaintiffs do not clearly indicate the particular counts in which they are seeking declaratory relief. Indeed, with regard to the actual counts in the operative complaint the word "declaration" only appears as to count four. (Amended complaint, § III, count four, ¶ 31.) In their memorandum in opposition to the motion to dismiss, the plaintiffs raise the issue of declaratory relief, asserting that it is not seeking monetary damages but declaratory relief for counts one, two and three of the operative complaint. The defendant states on page one of its reply brief that "the plaintiffs now purport for the first time — and contrary to the clear understandings of the Court and the parties — that their claims in the first three counts are no longer claims for money damages under the referenced statutes, but are instead claims for declaratory relief."
In section I of the operative complaint which is entitled "PARTIES" in ¶ 8 of the operative complaint, the plaintiffs indicate that they are seeking declaratory relief.
The plaintiffs have not "state[d] with precision the declaratory judgment desired" as required by the Practice Book. Additionally, the circumstances in this case do not lend themselves to an Adams exception; there, both parties clearly desired a resolution of the constitutional issues via a declaratory judgment, and there was a list (albeit a long one) of proposed questions that were important to the public policy of the state of Connecticut. In this case, as the plaintiffs have not provided any guidance for this court to follow in attempting to create a declaratory judgment, it would be inappropriate for the declaratory judgment action to go forward. Therefore, this court will not treat plaintiffs' complaint as seeking declaratory relief and will only consider the plaintiffs' claims for monetary damages with respect to counts one, two and three of the operative complaint.
C Count 1 — General Statutes § 7-130i
General Statutes § 7-130i provides in relevant part: "[T]he authority is authorized to fix, revise, charge and collect rates, rents, fees and charges for the use of and for the services furnished or to be furnished by each project and to contract with any person, partnership, association or corporation, or other body, public or private, in respect thereof." General Statutes § 7-130a provides in relevant part: "(d) `Project' or `projects' or `public facility' or `public facilities' means any one or more of the following: Public golf courses, bathing beaches, swimming pools, marinas or small craft harbors, tennis courts, facilities for camping, fishing and hunting, playgrounds, gymnasiums, playing fields, indoor recreation centers, auditoriums, exhibition halls, museums, aquariums, shipbuilding and other maritime arts and trades demonstration facilities, stadiums, hockey rinks and ski tows and other skiing facilities, as such terms are generally used, and parking facilities and other facilities for the public convenience in connection with any of the foregoing, including all buildings, structures and other facilities for the public convenience, including but not limited to restaurants and other concessions, and appurtenances thereto which the authority may deem necessary and desirable, together with all property, real or personal, rights, easements and interests which may be acquired by the authority or any person contracting with the authority for the construction, improvement and operation of any of the foregoing." The plaintiffs allege that under § 7-130i et seq., "a fee is not a revenue measure, but a means of compensating the government for the cost of offering and regulating a particular service." (Amended complaint, § III, count one, ¶ 16.) The plaintiffs further allege that "[f]ees in excess of the amount which is necessary for offering and regulating a particular service constitute an illegal tax." (Amended complaint, § III, count one, ¶ 17.) In support of these allegations, the plaintiffs cite to New Haven v. New Haven Water Co., 44 Conn. 105, 108 (1876), quoting Welch v. Hotchkiss, 39 Conn. 140, 143 (1872), which states in relevant part that "[w]henever a municipal corporation is authorized to make by-laws relative to a given subject, and to require of those who desire to do any act or transact any business pertaining thereto to obtain a license therefor, the reasonable cost of granting such licenses may be properly charged to the persons procuring them . . ."
The issue presently before the court is not whether the permit fees exceed the reasonable cost of issuing the permit and of inspecting and regulating the permitted activity, the issue is whether the plaintiffs here have standing to pursue their claim under the referenced statutes. The court concludes that the plaintiffs do not have standing to pursue their § 7-130i claim.
"When the legislature has authorized supplementary private causes of action, it has generally done so expressly." Middletown v. Hartford Electric Light Co., 192 Conn. 591, 596, 473 A.2d 787 (1984), overruled on other grounds, Waterbury v. Washington, 260 Conn. 506, 800 A.2d 1102 (2002). There is no private cause of action under § 7-130i. In addition, the facts of this case are inapposite to the language of § 7-130i because that statute refers to "projects," which as per § 7-130a, includes items such as golf courses, swimming pools and tennis courts, and not municipalities collecting building permit fees. The court can discern no challenge by the plaintiffs to any acts related to a "[p]roject," "project," "public facility" or "public facilities" as defined by § 7-130a.
Because § 7-130i does not provide for any private cause of action for money damages, and further, because § 7-130i does not relate in any way to building permit fees, the defendant's motion to dismiss count one of the operative complaint is granted.
CT Page 8107
D Count 2 — General Statutes § 7-148
General Statutes § 7-148 is an extensive statute describing the scope of powers granted to municipalities. Section 7-148(c)(2)(B) grants municipalities the power to "[a]ssess, levy and collect taxes for general or special purposes on all property subjects or objects which may be lawfully taxed, and regulate the mode of assessment and collection of taxes and assessments . . ." The operative complaint alleges that the defendant's actions "exceed the scope of the authority given to municipalities . . ." (Amended Complaint. § II, count two, ¶ 22.) In their memorandum in opposition to the motion to dismiss, the plaintiffs clarify their position by stating: "To be clear, the Plaintiffs do not dispute that the Defendant has the power to levy a building permit fee. Rather, the Plaintiffs contend that any building permit fee is invalid when it exceeds an approximation of the costs associated with that service so as to be a tax and a source of revenue." (Plaintiffs' memorandum in opposition to motion to dismiss dated February 4, 2008, p. 5.) Here again, the plaintiffs have not provided the court with a basis to conclude that in the present case the defendant's alleged violation of § 7-148(c)(2)(B) provides the plaintiffs with a private cause of action for money damages against the defendant pursuant to § 7-148. The defendant's motion to dismiss count two of the operative complaint is granted.E Count 3 — Conn. Const., art. X, §§ 1 and 2
Article tenth, §§ 1 and 2, of the constitution of Connecticut pertain to delegations of authority to the towns, cities and boroughs of the state of Connecticut. Count three of the operative complaint alleges that the "[d]efendant's use of building permit fees to fund social programs and other initiatives violates Article 10, Secs. 1 and 2 of the Constitution of the State of Connecticut, in that Defendant has taken to itself power not given to it by the Connecticut General Assembly." (Amended Complaint, § III, count three, ¶ 24.) In Kelley Property Development, Inc. v. Lebanon, 226 Conn. 314, 339, 627 A.2d 909 (1993), the Supreme Court reasoned that "we should not construe our state constitution to provide a basis for the recognition of a private damages action for injuries for which the legislature has provided a reasonably adequate statutory remedy." The Superior Court in Williams v. Hartford Public Schools, Superior Court, judicial district of Hartford, Docket No. CV 05 4009112 (April 5, 2007, Elgo, J.), cited to Kelley in granting the defendant's motion for summary judgment as to the plaintiff's state constitutional claim. The plaintiffs have not provided the court with support for the contention that either Article tenth, § 1, of the constitution of Connecticut or Article tenth, § 2, of the constitution of Connecticut provides for a private cause of action for money damages.
The defendant's motion to dismiss as to count three of the operative complaint is granted.
F Count 4 — 42 U.S.C. § 1983
Count four of the operative complaint alleges a violation of 42 U.S.C. § 1983. The plaintiffs claim that the defendant's permit fees schedule constitutes an illegal taking of property, which is actionable under 42 U.S.C. § 1983. 42 U.S.C.S. § 1983 (2002) provides in relevant part that "[e]very person who, under color of any statute, ordinance, regulation, custom, or usage, of any State . . . subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured . . ." The plaintiffs allege that the "[d]efendant's building permit fees schedule constitutes an unconstitutional deprivation of property without just compensation in violation of the Fifth Amendment to the United States Constitution." (Amended Complaint, § III, count four, ¶ 27.) In its memorandum in support of its motion to dismiss, the defendant argues, inter alia, that money does not fall under the purview of the takings clause of the fifth amendment to the United States constitution.
The fifth amendment to the United States constitution applies to takings of real property. The United States Supreme Court has held that the government must provide just compensation when it effects a permanent physical occupation of property; e.g., Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 102 S.Ct. 3164, 3179, 73 L.Ed.2d 868 (1982); or when it imposes regulations that deprive someone of the economic use or value of his or her property. E.g., Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 43 S.Ct. 158, 159-60, 67 L.Ed.2d 322 (1922); e.g., Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 112 S.Ct. 2886, 2892-95, 120 L.Ed.2d 798 (1992). Generally, the courts have not recognized licensing fees as falling under the umbrella of a takings claim. For example, the United States Court of Appeals for the Federal Circuit held in Commonwealth Edison Co. v. United States, 271 F.3d 1327, 1339 (Fed. Cir. 2001), cert. denied, 535 U.S. 1096, 122 S.Ct. 2993, CT Page 8109 152 L.Ed.2d 1051 (2002), that "regulatory actions requiring the payment of money are not takings." The United States Court of Appeals for the Federal Circuit went on to say that "while a taking may occur when a specific fund of money is involved, the mere imposition of an obligation to pay money . . . does not give rise to a claim under the Takings Clause of the Fifth Amendment." Id., 1340. In the present case, as the 42 U.S.C. § 1983 claim involves the defendant's imposition of a fee upon the plaintiffs, the plaintiffs do not have a cause of action under 42 U.S.C. § 1983. Therefore, the defendant's motion to dismiss as to count four of the operative complaint is granted.
G Count 5 — CUTPA
The plaintiffs lastly allege that the defendant has engaged in conduct that violates CUTPA because "it offends statutory, common law and basic public concepts of fairness." (Amended Complaint, § IV, count five, ¶ 34.) General Statutes § 42-110b provides in relevant part: "(a) No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." There is no Connecticut Appellate or Supreme Court case that provides municipalities with blanket immunity against CUTPA claims. On the face of the statute, the plaintiffs have no issue with subject matter jurisdiction or with standing. This count, therefore, survives the defendant's motion to dismiss.
IV CONCLUSION
The defendant's motion to dismiss as to counts one, two, three, and four of the operative complaint is granted. Count five of the operative complaint, the CUTPA claim, survives the defendant's motion to dismiss.