Opinion
No. CV 03 0399689
August 16, 2005
MEMORANDUM OF DECISION RE (#132) DEFENDANT'S MOTION TO DISMISS
This is an action brought by the plaintiff, Bridgeport Aviation Services, Inc. (Aviation), against the defendant, Town of Stratford, for a declaratory judgment concerning unpaid property taxes.
The taxes were levied on Aviation by Stratford for its use of facilities located at the Sikorsky Memorial Airport. The airport is owned by the City of Bridgeport and is located in Stratford. Aviation uses the facilities pursuant to a lease with Bridgeport. Aviation claims that as a tenant of a tax-exempt property owner, the City of Bridgeport, Aviation is also entitled to tax-exempt status.
The defendant, the town of Stratford, has moved this court to dismiss the complaint of the plaintiff. Stratford argues that Aviation does not have standing because as a private entity it cannot assert Bridgeport's statutory immunity from tax under General Statutes § 12-74.
General Statutes § 12-74 provides that "[a]ll property owned by any town or city, which is located in another town and used for the purposes of an airport, shall be exempt from taxation so long as it continues to be used for such purposes and so long as the town in which it is located has the same privileges as to the use of such airport as are possessed by the municipality owning the same; but, if any such airport is leased to any person, association or private corporation, or is used in such manner as to become a source of profit to the municipality owning the same, the land so occupied and situated in any adjoining town or towns shall thereupon be subject to taxation."
Stratford contends that the lease from Bridgeport to Aviation is not subject to immunity from property tax and that the lease contains a provision which makes Aviation responsible for any property taxes levied by any governmental entity for the use of the airport property.
Aviation counters that Stratford has ignored the standard for granting a motion to dismiss for lack of standing. It argues that Stratford errs in focusing its argument entirely on statutory standing. It argues that it does not have to prove that it was statutorily aggrieved under § 12-74 because it is classically aggrieved, In addition, even if this court were to determine that statutory aggrievement was required in this case, there are sufficient allegations in the complaint to prove that the action is under the zone of interests to which the statute is designed to protect. A brief summary of the history of this dispute is necessary before addressing the issue of Aviation's standing. CT Page 11968-u
The issue of whether the Sikorsky airport, owned by Bridgeport, was subject to taxation by Stratford has been the subject of numerous lawsuits brought under various provisions of § 12-74, or under an earlier, identical version of the statute. Exhibits pertaining to the controversy were submitted by both parties in connection with this motion. In Bridgeport v. Stratford, 142 Conn. 634, 116 A.2d 508 (1955), Stratford contended that Bridgeport actually used the airport in such a manner to become a source of profit, which was disguised because Bridgeport was using an incorrect accounting method to not show a profit. The Connecticut Supreme Court disagreed, stating that, "[t]he loss of the tax exemption will not occur merely because a nice calculation by this or that method of accounting discloses a profit from operations for the year. The exemption will become unavailable if, considering all the circumstances, it is obvious that the airport is being operated for the purpose of making money for the City of Bridgeport. The airport cannot be used under a plan to add revenue to the plaintiff's general treasury without suffering the consequence of losing the tax exemption." Id., 644.
In a subsequent lawsuit, the parties entered a stipulation in 1978 which ultimately formed the basis of the court's judgment. Paragraph three of the stipulation mirrors the language of General Statutes § 12-74, making Bridgeport liable to pay taxes to Stratford if any of the enumerated conditions occur. In paragraph eighteen, Bridgeport agreed that if any of the conditions were then present, it would have to pay taxes to Stratford from 1958 to the present. In paragraph 5 of the stipulation, Bridgeport also agreed that if any portion of the airport was leased to a third person, the lease would provide that the third person shall pay real and personal property taxes to the town of Stratford. Stratford, apparently feeling that some of the conditions of § 12-74 were then present, commenced another action under paragraphs three and eighteen of the stipulation and judgment.
Paragraph six of the stipulation provided that this provision did not apply to leases currently in effect or to their extensions. A list of the current lessees was appended to the stipulation.
Judgment was entered against Stratford. In interpreting § 12-74, the court went against "[t]he general rule of construction in taxation cases . . . that provisions granting a tax exemption are to be construed strictly against the party claiming the exemption." Stratford v. Bridgeport, Superior Court, judicial district of Fairfield, Docket No. 204584 (September 16, 1996, Levin, J.) ( 17 Conn. L. Rptr. 569). The court stated that "General Statutes § 12-74 . . . does not grant an exemption in the technical sense. Rather it merely states a rule of nontaxabiity." Id., 569.
The Connecticut Supreme Court, however, analyzed the statute as creating an exemption. Bridgeport v. Stratford, supra, 142 Conn. 634; see also New Haven v. East Haven, 47 Conn.Sup. 594, 609, 822 A.2d 376 (2001) ( 31 Conn. L. Rptr. 184), aff'd, 263 Conn. 108, 818 A.2d 741 (2003).
Although the court continued to refer to the statute, it stated that it was really interpreting Stratford's claims as an action to enforce the CT Page 11968-v stipulated judgment rather than an action under the statute. For this reason, the court placed the burden on Stratford, rather than on Bridgeport, as it would have been under the statute. Id. The court first held that Bridgeport was not running the airport as a source of profit. Id., 570. The court then examined Stratford's claims that the airport was being leased to third persons. In interpreting the word "airport" in both the statute and the stipulation, the court held that "the tax exemption is lost only if the airport is leased as a whole or predominantly, and not merely a small constituent part." (Emphasis in original.) Id. The court found support for its interpretation in the absence of any provisions in the statute or stipulation for prorating taxes among various lessees. Id.
While that case was pending, on September 1, 1995, Bridgeport entered the lease with Aviation. In accordance with the 1978 stipulation, Paragraph 14.08 of the lease provided that Aviation was "solely responsible for any real, and/or personal property taxes, charges and assessments levied by any governmental entity against it for the use of the leased premises." Stratford then apparently levied taxes against the lessee, Aviation, directly.
This declaratory judgment action by Aviation resulted. Aviation contends that Stratford does not have the authority under § 12-74 to tax it directly. In addition, it contends that Stratford does not have the authority to impose property taxes on its leasehold interest. Stratford claims that Aviation lacks the standing to raise these claims.
Contained in a stipulation in another matter, submitted as an exhibit in this matter, Bridgeport agrees that Stratford has the right and authority to levy taxes against its tenants. Stratford agrees that Bridgeport has no liability for the tenant's debt. This understanding by Bridgeport and Stratford, however, has no bearing on the ultimate decision of the court as to whether the taxes were lawfully imposed or are owing.
"The issue of standing implicates subject matter jurisdiction and is therefore a basis for granting a motion to dismiss." St. George v. Gordon, 264 Conn. 538, 544, 825 A.2d 90 (2003). "If a party is found to lack standing, the court is without subject matter jurisdiction to determine the cause." Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 485, 815 A.2d 1188 (2003). "The fact that the plaintiffs in the present case seek only declaratory relief does not relieve them of the obligation to establish standing in order to maintain an action in the court . . . It is a basic principle of our law . . . that the plaintiffs must have standing in order for a court to have jurisdiction to render a declaratory judgment." (Citation omitted; internal quotation marks omitted.) St George v. Gordon, supra, 264 Conn. 546.
"Standing is established by showing that the party claiming it is authorized by statute to bring suit or is classically aggrieved." (Internal quotation marks omitted.) Carrubba v. Moskowitz, 274 Conn. 533, 551 (2005). "Statutory aggrievement exists by legislative fiat, not by judicial analysis of the particular facts of the case. In other words, in CT Page 11968-w cases of statutory aggrievement, particular legislation grants standing to those who claim injury to an interest protected by that legislation." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, supra, 262 Conn. 487. Stratford argues that Aviation does not have a right to Bridgeport's tax immunity status under § 12-74. Aviation claims that Stratford bases its authority to tax it under the statute. It, therefore, has the standing to contest a tax imposed upon it under the statute. Aviation also argues that it has standing because it is clearly classically aggrieved.
"The fundamental test for determining aggrievement encompasses a well-settled twofold determination: [F]irst, the party claiming aggrievement must successfully demonstrate a specific, personal and legal interest in [the subject matter of the challenged action], as distinguished from a general interest such as is the concern of all members of the community as a whole. Second, the party claiming aggrievement must successfully establish that this specific personal and legal interest has been specially and injuriously affected by the [challenged action] . . . Aggrievement is established if there is a possibility, as distinguished from a certainty, that some legally protected interest . . . has been adversely affected." Carrubba v. Moskowitz, supra, 274 Conn. 551.
The court finds that regardless of whether the authority to tax is based on General Statutes § 12-74 or is an attempt to tax Aviation's leasehold interest, Aviation has a specific, personal and legal interest in determining its liability to pay tax imposed on it. Having found that Aviation has such legal interest, the motion to dismiss for lack of standing is hereby denied.
By the Court,
Joseph W. Doherty, Judge