Opinion
No. 08 5007230
April 14, 2010
MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT [#114]
The plaintiff City of Norwich (hereinafter "plaintiff"), moved for a motion for summary judgment against the defendant, Rose City Community Land Trust for Housing, Inc. (hereinafter "defendant"), pursuant to the provisions of the Connecticut Practice Book. The plaintiff claims that there is no genuine issue of material fact concerning the plaintiff's right to obtain a foreclosure of its municipal tax liens and judgments on the subject property. The defendant contends to the contrary based upon the issues set forth in its answer and disclosure of defense dated March 27, 2009.
I BACKGROUND
The plaintiff commenced this action by the filing of a complaint with a return date of April 1, 2008 (hereinafter the "Complaint"). The Complaint was brought in ten counts and sought the foreclosure of municipal tax liens and judgment liens on property known as 631 West Main Street, Norwich, Connecticut. On March 27, 2009, the defendant filed a disclosure of defense alleging that the defendant did not receive notice of the tax or notice that the defendant lost its tax exempt status. In addition to the disclosure of defense, the defendant, on March 27, 2009, filed its answer admitting ownership of the subject property, denying the tax was assessed and liened and leaving the plaintiff to its proof with respect to payment on the lien and prior and subsequent encumbrances.
The plaintiff, on September 14, 2009, filed its motion for summary judgment claiming that the defendant failed to raise any bona fide defenses to this foreclosure action, which would preclude judgment in favor of the plaintiff on the Complaint. On September 23, 2009, the defendant filed its objection to motion for summary judgment alleging there was an issue of fact and/or law with respect to whether the defendant received notification of an increase in assessment. The plaintiff, on September 30, 2009, filed a reply brief asserting that the Connecticut General Statutes did not require notification.
On November 16, 2009, the court heard argument on the plaintiff's motion for summary judgment and the defendant's objection to the same. At the hearing, the court heard argument with respect to the judgment liens being foreclosed, as well as the tax liens being foreclosed. The court continued the hearing on the issue of the tax liens being foreclosed to December 21, 2009, where further testimony was heard and a briefing schedule that ended with a defendant's reply brief filed January 18, 2010.
The plaintiff contended, through argument and affidavits, that the judicial liens placed on the property in question were pursuant to the provisions of General Statutes § 7-152c. This section of the general statutes applies to municipal citations including blight citations. The plaintiff contends that subsection (f) of § 7-152c provides that the municipal hearing officer should mail the notice by assessment to the person liable and no less than 30 days after mailing file with the Superior Court a certified copy of the assessment. The court clerk shall thereafter enter payment in the amount of the assessment and said judgment will have the effect of a money judgment. See § 7-152c(f). Section 7-152c(g) further provides that the "person against whom an assessment has been entered pursuant to this section is entitled to judicial review by way of an appeal." See § 7-152c(g). The appeal must be instituted within thirty days of the making of the notice of assessment." See id. Finally, the plaintiff contends that "[a] judgment lien on real property may be foreclosed or redeemed in the same matter as a mortgage on the same property." See C.G.S. § 53-380a(c.)
Municipal Tax Liens
Counts first, second and third of the complaint allege that the defendant owes tax liens that are not paid and prayer for relief for foreclosure of those liens. The tax years in question are for the assessment years October 1, 2004, October 1, 2005, and October 1, 2006, due and payable in July 1, 2005, July 1, 2006, and July 1, 2007 respectively. The defendant, on March 27, 2009, filed a disclosure of defense alleging that it did not receive notice of the tax or notice that it lost its tax exempt status. In addition to the disclosure of defense, the defendant, on March 27, 2009, filed an answer admitting to ownership of the subject property denying that the tax was assessed and liened and leaving the plaintiff to its proof with respect to payment on the lien and prior and subsequent encumbrances.
The parties requested and were granted the right to submit testimony and documentary evidence at the short calendar hearings. The assessor for the City of Norwich contended that when a property is moved from the exempt portion of the grand list to the taxable portion that action is not an increase in assessment triggering an obligation to send notification to the property owners pursuant to General Statutes § 12-55. Furthermore, she contends that the placement of taxable organizations on the exempt list by the prior assessor could be corrected later as a clerical error or mistake.
The defendant, through testimony of the assessor of the town of Colchester contends that any increase in assessment due to loss in exempt status would trigger a notice of assessment increase consistent with the Connecticut Assessor's Handbook. (Def. Exh. 11, Chapter 8.)
There is no doubt from the evidence presented that the defendant failed to file a quadrennial report (M-3 Form) with the Norwich assessor for the tax years in question. Failure to file the statutory form results in the loss of exemption, with property to move from the exempt portion of the grand list to the taxable portion. The assessor in office for the 2004 and 2005 grand lists had the property as exempt. The assessor claims she corrected the error by correspondence in April 2006. She contends that she fixed a clerical error by the prior assessor.
II NOTIFICATION AFTER FAILURE TO FILE QUADRENNIAL REPORT
According to the court in Spanish American Development Agency v. Bridgeport, Superior Court, judicial district of Bridgeport, Docket No. CV 00 0349376 (April 3, 2001, Ford, J.) ( 29 Conn. L. Rptr. 479, 480), "[a]lthough it is clear that a property is subject to taxation when the charitable organization that owns it fails to file a quadrennial tax exemption statement, it is not at all clear when the assessor must notify the charitable organization that they have not filed a quadrennial form and that they will be added back to the tax roles."
In C.C.C. Real Estate, Inc. v. Waterbury, Superior Court, judicial district of Waterbury, Docket No. CV 04 40001666 (November 15, 2007, Upson, J.) ( 44 Conn. L. Rptr. 529, 532), the court found that "[i]t was incumbent upon [the defendant] to file a timely quadrennial report, and the assessor had no legal responsibility to assist [the defendant] in doing so." The court went on to state that "[t]he only statute that might conceivably create such a duty, General Statutes § 12-87a, merely provides that an assessor, `upon receipt of proof of substantial compliance by such organization with the requirements concerning submission of such statement, may allow an extension of time not exceeding sixty days within which such statement may be filed . . .' This does not create a duty to inform the taxpayer of its failure to file, however, nor does it require the assessor to allow an extension." (Emphasis in original.) Id., 533 n. 13.
Based on the statutory language in § 12-87a and the court's rationale in C.C.C. Real Estate, Inc. v. Waterbury, supra, 44 Conn. L. Rptr. 532, this court concludes that the tax assessor is not required to send notice to a property owner after the property owner fails to file a quadrennial report for exemption, and the property is moved from the exemption portion of the grand list to the taxable portion of the grand list.
III CLERICAL ERROR
"Pursuant to General Statutes § 12-60, [the plaintiff] is not allowed to add omitted property to the grand lists unless the court finds that the omission or mistake was clerical." Spanish American Development Agency v. Bridgeport, supra, 29 Conn. L. Rptr. 480. "Clerical errors are of a character different from errors of substance, of judgment, or of law . . . Where an error is of a deliberate nature such that the party making it at the time actually intended the result that occurred, it cannot be said to be clerical." (Citation omitted.) National CSS, Inc. v. Stamford, 195 Conn. 587, 596, 489 A.2d 1034 (1985).
The court has found one Connecticut case addressing whether a tax assessor who subsequently discovers that a property owner failed to file a quadrennial report may treat the property's inclusion on the tax-exempt list as a clerical error. In Spanish American Development Agency v. Bridgeport, supra, 29 Conn. L. Rptr. 480, the court found that the plaintiff was "not allowed to retroactively tax [the defendant] because [the plaintiff] failed to strictly enforce General Statutes §§ 12-81(7) and 12-87. Neither statute allows a tax assessor to retroactively tax a charitable organization when the assessor discovers, four years after the fact, that the organization failed to comply with the statutes. Section 12-60 only allows the tax assessor to correct clerical omissions or mistakes. The omission resulted from [the plaintiff's] failure to enforce a statute for a period of eight years. Accordingly, the omission was one of substance, not merely clerical."
In the present case, despite failing to file a quadrennial report, the defendant was not added to the taxable portion of the 2004 grand list and the 2005 grand list. Donna Ralston, the new tax assessor for the plaintiff testified that she corrected the 2004 grand list and the 2005 grand list in April 2006 to add the defendant to the taxable portion of both lists. Ralston further testified that "a taxable organization on the tax-exempt list would be considered a clerical mistake, which she could correct." Pursuant to the court's rationale in Spanish American Development Agency v. Bridgeport, supra, 29 Conn. L. Rptr. 479, this court is inclined to conclude that the plaintiff cannot retroactively tax the defendant for the two years in that it failed to enforce a statute by treating it as a clerical error. The plaintiff's claim for summary judgment as to counts first and second has failed.
IV NOTIFICATION PURSUANT TO GENERAL STATUTES § 12-55
General Statutes § 12-55 provides in relevant part: "The assessor . . . may increase or decrease the valuation of any property as reflected in the last-preceding grand list . . . In each case of any increase in valuation of a property above the valuation of such property in the last-preceding grand list . . . the assessor . . . shall mail a written notice of assessment increase to the last-known address of the owner of the property the valuation of which has increased."
In the present case, pursuant to the submitted evidence, the defendant's gross assessment did not increase when it was moved from the exemption portion of the grand list to the taxable portion of the grand list. The defendant's net assessment, however, increased from $0 to $67,000. The text of § 12-55 does not distinguish between net assessments and gross assessments, and therefore, whether the statute's notice requirements apply to this case presents a question of statutory interpretation.
"The question of whether a particular statute . . . applies to a given state of facts is a question of statutory interpretation . . . Statutory interpretation presents a question of law for the court." (Internal quotation marks omitted.) Massad v. Eastern Connecticut Cable Television, Inc., 70 Conn.App. 635, 639, 801 A.2d 813, cert. denied, 261 Conn. 926, 806 A.2d 1060 (2002). General Statutes § 1-2z provides: "The meaning of a statute shall, in the first instance, be ascertained from the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered." "When the relevant statutory text and the relationship of that text to other statutes do not reveal a meaning that is plain and unambiguous, our analysis is not limited, and we look to other factors relevant to determining the meaning of [the statute], including its legislative history, the circumstances surrounding its enactment and its purpose . . . The test to determine ambiguity is whether the statute, when read in context, is susceptible to more than one reasonable interpretation." (Citations omitted; internal quotation marks omitted.) Viera v. Cohen, 283 Conn. 412, 421, 927 A.2d 843 (2007).
Our Supreme Court has also determined that "[t]he process of statutory interpretation involves a reasoned search for the intention of the legislature . . . In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply. In seeking to determine that meaning, we look to the words of the statute itself, to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter." (Internal quotation marks omitted.) Fleet National Bank's Appeal from Probate, 267 Conn. 229, 237-38, 837 A.2d 785 (2004). Moreover, "no part of a legislative enactment is to be treated as insignificant or unnecessary, and there is a presumption of purpose behind every sentence, clause or phrase . . . [so that] no word or phrase in a statute is to be treated as superfluous." (Internal quotation marks omitted.) State v. Peeler, 271 Conn. 338, 434-35, 857 A.2d 808 (2004).
The court has found no existing case law interpreting § 12-55. This is a case of first impression. In examining the aforementioned factors, it is not clear whether the legislative intended to require assessors to provide notice to property owners for an increase in the property's net assessment pursuant to § 12-55. Section § 12-55 does provide that the assessor must provide notice for " any increase in valuation of any property as reflected in the last-preceding grand list." This court concludes that the assessor is not required to provide notice to the defendant when property is moved from exempt to taxable property, especially where the defendant has failed to file a quadrennial (M-3) form. To require notice in such circumstances confers a benefit to an organization which has failed to comply with the statutory requirement.
V
CT Page 8767
JUDGMENT LIENS
The defendant, in its answer to counts fourth through tenth of the plaintiff's complaint concerning the foreclosure of the judgment liens, admitted that it owned the property in question and left the plaintiff to its proof with respect to the remaining allegations of the complaint. (See Amended Answer, March 27, 2009.) The defendant, in its amended disclosure of defense dated March 27, 2009, contends that:
Counts 4, 5, 6, 7, 8, 9, and 10: The plaintiff has levied against the defendant's bank accounts to collect upon the blight liens set out in the complaint and the plaintiff has obtained some or all of the monies due. Further, the liens were filed pursuant to the City of Norwich's Blight Enforcement Ordinance. The defendant has worked with the plaintiff to correct the problems on this property and on the other properties which were the subject of the liens listed in these counts. This attorney talked with the plaintiff's blight enforcement officer, Ed Martin, who indicates that there are no current outstanding violations against this property or the other properties which are subject of the liens listed in these counts. The blight assessment and the liens are for the purpose of obtaining for the plaintiff the funds to do the construction to remove the blight, but the defendant has cured all of the problems.
The defendant has further argued in its objection to plaintiff's motion for summary judgment that it is in full compliance with all of its properties within the city's blight ordinance. The defendant further contends that, as a matter of law, the city is required to either purchase the property determined to be blighted or take it by eminent domain, but only after the property is to be found blighted or abandoned pursuant to Ordinance No. 1303 of the Norwich City Ordinances. The defendant argues that said ordinance does not provide for the levying of the blight fine or judgment another property or for the lien to be satisfied by a foreclosure judgment.
The defendant has admitted the allegation of the ownership of the property and has left the plaintiff to its proof with respect to the remaining allegations of the judgment lien counts. As to the claim that the defendant has cured the blight and that the plaintiff is barred from foreclosing its liens, the defendant's argument is misplaced. The plaintiff has followed the procedures set out in General Statutes § CT Page 8768 7-152c(e) for the enforcement of assessments and judgments. The defendant had the right to request a hearing before the citation officer and/or appeal the assessment to the Superior Court. The defendant, according to the pleadings in this case, chose to do neither. The fact that the defendant has apparently cleaned the blighted properties in question does not invalidate the liens. The defendants were cited for the blight and given time to remedy the blight with the defendants failing to cure the blight in the time period allowed. The statute (§ 7-152 c, et seq.) and the municipal ordinance provide the procedure and remedy. The City of Norwich ordinances do not prohibit the plaintiff from proceeding to judgment on the judgment liens in question.
Furthermore, the defendant is attempting to collaterally attack the validity of the judgment liens. The defendant's challenges should have been made before the hearing officer and/or the court pursuant to the procedure set out in § 7-152c. The defendant is barred from attacking the judgment liens absent fraud or the like. See Cavallo v. Derby Savings Bank, 188 Conn. 281, 449 A.2d 986 (1982); Lawall Realty Limited Partnership v. Auwood, Superior Court, judicial district of New London, Docket No. CV 93 0527050 (January 10, 1994, Parker, J.).
The defendant had the right to raise these claims at the hearing or trial court level, which it failed to do. "A collateral attack on a judgment is a procedurally impermissible substitute for an appeal." (Internal quotation marks omitted.) Gerte v. Logistec Connecticut, Inc., 283 Conn. 60, 63, 294 A.2d 855 (2007).
The defendant has failed to convince the court that there is any material issue of fact as to the validity and amount of the judgment liens as alleged (with proper credit given for money paid (see Affidavit of Defendant, Exhibit D) in counts fourth through tenth of the plaintiff's complaint.
ORDER
The court, pursuant to the authority cited above, grants summary judgment to the plaintiff as to counts third through tenth in that there is no material issue of fact. As to counts first and second, the court denies the plaintiff's motion for summary judgment.