Opinion
No. CV 05-4011440 S
July 23, 2007
MEMORANDUM OF DECISION
The plaintiff has filed a two-count appeal from the refusal of the defendant Board of Assessment Appeals (board) to reduce the assessments placed on two pieces of real property owned by the plaintiff located on Grand Avenue in New Haven, Connecticut, and also refused to restore the tax exemptions as church/religion property which had been removed by the defendant's assessor on the grand list of October 1, 2004.
The first count alleges that the plaintiff is the owner of real property located at 795 Grand Avenue, that on October 1, 2004 the assessors of the City of New Haven valued the property at $125,790.00 and removed its tax exemption status as church/religion property, and that the plaintiff appealed to the board which refused to reduce the assessment or restore the tax exemption.
The second count refers to real property owned by the plaintiff located at 783 Grand Avenue which was valued at $122,010.00, and makes the same claims as set forth in the first count. The defendant City of New Haven, on behalf of the board, admits all of the allegations but denies that the two properties are overvalued or that they are entitled to tax exemptions as church/religious property.
This case was tried before this court on August 31 and September 15, 2006. The plaintiff's trial brief, the defendant's trial brief, and the plaintiff's reply brief were filed on October 31, 2006, December 8, 2006 and May 1, 2007 respectively.
On the first day of trial the plaintiff orally withdrew its claims that the properties were over assessed. Accordingly, the only issue before this court is whether the plaintiff has proven that either of the two properties, or any part of each, was being used for church or religious purposes in 2004 and therefore was entitled to a tax exemption on the grand list of October 1, 2004 as property used for charitable purposes pursuant to Connecticut General Statutes Section 12-81(7).
"Under our statutes, there are three requirements for a tax exemption. The property must belong to or be held in a trust for an organization exempt from taxation under the provisions of General Statutes 12-81; it must be held for one of the purposes stated in that statute's list of exemptions; and it must produce no rent, profits or income. The trial court concluded that the plaintiff had failed to meet the exemption available in 12-81(7) for property used exclusively for charitable purposes.
"A general description of the burden of proving a tax exemption was aptly articulated in Faith Center, Inc. v. Hartford, 39 Conn.Sup. 142, 473 A.2d 342 (1982), aff'd, 192 Conn. 434, 472 A.2d 16, cert. denied, 469 U.S. 1018, 105 S.Ct. 432, 83 L.Ed.2d 359 (1984), an analysis cited with approval in the Appellate Court opinion. That court said: "Certain general principles of law govern cases such as the present ones where a party claims that property is exempt from taxation. "It is a settled rule of law that statutes which exempt from taxation are to be strictly construed against the party claiming an exemption." Crescent Beach Ass'n. v. East Lyme, 170 Conn. 66, 71, 363 A.2d 1045 (1976); Wiegand v. Heffernan, 170 Conn. 567, 582, 368 A.2d 103 (1976); Hartford Hospital v. Board of Tax Review, 158 Conn. 138, 147, 256 A.2d 234 (1969). "Exemptions, no matter how meritorious, are of grace, and must be strictly construed. They embrace only what is strictly within their terms." Hartford v. Hartford Theological Seminary, 66 Conn. 475, 482-83, 34 A. 483 (1895); Woodstock v. The Retreat, Inc., 125 Conn. 52, 56, 3 A.2d 232 (1938). As the Supreme Court noted in Snyder v. Newtown, 147 Conn. 374, 386, 161 A.2d 770 (1960), appeal dismissed, 365 U.S. 299, 81 S.Ct. 692, 5 L.Ed.2d 688 (1961): " `Exemption from taxation is the equivalent of an appropriation of public funds, because the burden of the tax is lifted from the back of the potential taxpayer who is exempted and shifted to the backs of others. Lyman v. Adorno, 133 Conn. 511, 516, 52 A.2d 702. The owners of tax-exempt property in the community derive the same benefits from government as other property owners but pay no property taxes for those benefits.' " "It is also well settled that the burden of proving entitlement to a claimed tax exemption rests upon the party claiming the exemption. Curly Construction Co. v. Darien, 147 Conn. 308, 160 A.2d 751 (1960); Burritt Mutual Savings Bank v. New Britain, 146 Conn. 669, 154 A.2d 608 (1959); Cooley Chevrolet Co. v. West Haven, 146 Conn. 165, 148 A.2d 327 (1959); Forman Schools, Inc. v. Litchfield, 14 Conn.Sup. 444, rev'd on other grounds, 134 Conn. 1, 54 A.2d 710 (1947)." Faith Center, Inc. v. Hartford, supra, 153-54.
This court has recognized that the "definition of charitable uses and purposes has expanded with the advancement of civilization and the daily increasing needs of men." Camp Isabella Freedman of Connecticut, Inc. v. Canaan, supra, 514. The Camp Isabella court continued: "It no longer is restricted to mere relief of the destitute or the giving of alms but comprehends activities, not in themselves self-supporting, which are intended to improve the physical, mental and moral condition of the recipients and make it less likely that they will become burdens on society and more likely that they will become useful citizens. Bader Realty Investment Co. v. St. Louis Housing Authority, 358 Mo. 747, 752, 217 S.W.2d 489. Charity embraces anything that tends to promote the well-doing and the well-being of social man. Id. An institution is charitable when its property and funds are devoted to such purposes as would support the creation of a valid charitable trust. Davie v. Rochester Cemetery Ass'n., 91 N.H. 494, 495, 23 A.2d 377." Id., 514-15. Other jurisdictions have also recognized the increasingly broad definition of charitable purpose. See, e.g., Fredericka Home for the Aged v. County of San Diego, 35 Cal.2d 789, 792-93, 221 P.2d 68 (1950); Oasis, Midwest Center for Human Potential v. Rosewell, 55 Ill.App.3d 851, 858, 370 N.E.2d 1124 (1977); Rosser v. Prem, 52 Md.App. 367, 384, 449 A.2d 461 (1982)." United Church of Christ v. West Hartford, 206 Conn. 711, 718-20 (1988).
The court finds the following facts and reaches the following conclusions. The plaintiff, God's Corner Church, is a Connecticut corporation organized for charitable purposes. The plaintiff is a member of a hierarchical church structure known as the Church of God In Christ, Inc., which has approximately seven million world wide members, and approximately twenty-two churches in the state of Connecticut. The churches in Connecticut are also divided into three jurisdictions. The plaintiff is a member of the Connecticut Second Jurisdiction, Church of God In Christ. Edward White is an ordained minister in the Church of God In Christ, Inc., and is the pastor of the plaintiff. Mr. White's wife, Beverly White, is the spiritual administrator of the plaintiff.
In 1996, the plaintiff acquired 795 Grand Avenue and in 1997 it acquired 783 Grand Avenue. 795 Grand Avenue is also referred to as 793-795. 783 Grand Avenue is a two-story brick building with a basement. 795 Grand Avenue is a one-story brick building divided into two separate spaces.
On February 18, 1999, the defendant approved both properties for tax exemptions. 783 Grand Avenue was granted a tax exemption on the basis that it was property owned by a religious organization and actually used as a residence used by the organization's officiating clergyman, pursuant to General Statutes § 12-81(15). 793-795 Grand Avenue received its tax exemption on the basis that it was property owned by a religious organization and that it was being used for religious or charitable purposes, pursuant to General Statutes § 12-81(7).
On July 23, 2004 the defendant inspected 793-795 Grand Avenue, concluded that one-half of the property was being leased out as an income producing day care center, and notified the plaintiff that the tax exemption as to that space was being removed, effective with the grand list of October 1, 2004.
On September 20, 2004 the defendant inspected the non-day care portion of 793-795 Grand Avenue and the first floor of 783 Grand Avenue and on September 24, 2004 notified the plaintiff that those areas were no longer tax exempt because they were not being used for religious or charitable purposes, effective with the grand list of October 1, 2004. The only portion of 783 and 793-795 Grand Avenue which has been continued as tax exempt, pursuant to General Statutes § 12-81(15), was the second floor of 783 Grand Avenue, which is used as a residence by Minister White and his wife.
The plaintiff claims in the first count that the non-day care portion of 795 Grand Avenue, which is referred to as 793 Grand Avenue, was being used for regular church services during 2004 and is therefore entitled to a tax exemption, and in the second count that the first floor and basement of 783 Grand Avenue was used for the charitable purposes of receiving and distribution of used furniture to people in need and is also entitled to a tax exemption.
In August 2000 the plaintiff submitted plans for the renovations of what is described on the plans as a "Proposed Church Day Care, 795 Grand Avenue" to the defendant and received approval from the traffic and parking division and the fire marshal. No building permit has ever been obtained by the plaintiff for the renovations of the church. The day care center area was renovated and has been in operation as a day care center since 2001.
In 2004 the plaintiff filed a petition in bankruptcy under Chapter 11 in the United States Bankruptcy Court. On July 26, 2004 Mrs. White testified in that proceeding, under oath, that 793 Grand Avenue had never been used as a church, but that it will be used as a church after the renovations are completed. She further testified that 793 Grand Avenue was "bare" and "vacant at this point." Thereafter she testified that her husband had "used" the property since it was purchased in 1996, but that she did not know what he had used it for. She also testified that the sole use at the present time of 793-795 Grand Avenue was the day care center and that some renovations were being done but that she did not know when they had been done.
On August 27, 2004, in the same bankruptcy proceeding that his wife testified in, Mr. White testified that the renovations had not yet started at 793 Grand Avenue because they "did not have a plan yet where we can start our renovations." On September 20, 2004, Mr. White told the defendant's assessor that the non-day care portion of 795 Grand Avenue was not being used as a church, that there were plans to renovate the space, but that they were not able to move ahead because they were out of money. On September 20, 2004 the non-day care portion of 795 Grand Avenue was in a state of disrepair, with ceiling tiles removed, lighting fixtures removed, exposed wires hanging down, and the lights were not functioning.
In an effort to establish that it was using 793 Grand Avenue as a church in 2004 the plaintiff offered the testimony of Hester Bordeaux, a bishop in the Church of God In Christ. Bishop Bordeaux testified that he had seen services being conducted by Reverend White on forty or fifty occasions. However, his testimony, given on August 31, 2006, that he attended such services in 2004 was not persuasive. At one point he agreed that he witnessed such services "on or around October of 2004" but he could not give specific dates. Later in cross-examination when asked whether the forty or fifty services were all in 2004 he answered "stretches out." In response to a question about the time frame the services were in he responded that "they have services on Wednesday night." He could not remember the earliest date that he attended services but "guessed" it was whatever year they started. The evidence indicated that 793-795 Grand Avenue was acquired in 1996. He did remember the last time he attended such services as being in July 2006, which was one month before he testified.
The issue in this case with respect to 793 Grand Avenue is whether this property in 2004 was being used exclusively as a church. The plaintiff has the burden of proof that it is entitled to the exemption. The court finds that the plaintiff has not established that it is entitled to the exemption pursuant to C.G.S. § 12-81(7) because it has failed to prove that in 2004 the property was being used for charitable purposes. In addition the plaintiff has failed to prove that it is entitled to an exemption pursuant to C.G.S. § 12-88 which provides that property which is held for charitable purposes "shall be exempt from taxation though not in actual use therefore by reason of the absence of suitable buildings and improvements thereon, if the construction of such buildings or improvements is in progress." The plaintiff has failed to prove that construction or improvements were being done at 793 Grand Avenue during 2004.
The second count of the complaint alleges that 783 Grand Avenue was being used for charitable purposes in 2004 and that it was entitled to a tax exemption for that reason on the grand list of October 1, 2004. As indicated above, the property consists of a basement, first floor, and second floor. The second floor is the residence of Revered White and his wife and has been given tax exempt status by the defendant since 1999. This appeal is concerned with the claim that the basement and first floor were being used for charitable purposes during 2004 and that they should have been tax exempt on the grand list of October 1, 2004.
The court finds that during 2004 the plaintiff was using the first floor and basement of 783 Grand Avenue for the receipt, storage, and distribution of used furniture and other household items that had been donated by members of the church for distribution to needy families. The first floor and basement was not used for any other purpose in 2004, except the furniture distribution program which qualifies as a charitable use, and it produced no income. The court finds that the plaintiff has proven the allegations of the second count.
Judgment may enter in favor of the defendant on the first count.
On the second count a judgment may enter in favor of the plaintiff. The defendant is ordered to grant tax exempt status to 783 Grand Avenue on the grand list of October 1, 2004.