Opinion
No. CV 08 5008750
March 25, 2011
MEMORANDUM OF DECISION RE FORECLOSURE AND ATTORNEYS FEES
BACKGROUND
The plaintiff, the town of Groton, brings this strict foreclosure action against the defendant, First Groton, LLC, for its non-payment of taxes assessed by the Assessor of the Town of Groton on property located at Mardie Lane. The facts underlying this action have been previously set forth by the court by its April 8, 2010 decision granting Groton's motion for summary judgment as to liability. See Town of Groton v. First Groton, LLC, Superior Court, judicial district of New London, Docket No. CV 08 5008750 (April 8, 2010, Devine, J.). The plaintiff now seeks to recover the defendant's debt, along with legal fees and costs.
ARGUMENT
The defendant opposes the plaintiff's motion for the following reasons. First, it argues that Groton violated its statutory duty when it continued to assess the properties as individual lots rather than as one parcel of unclassified land after Groton terminated its subdivision. Next, the defendant contends that the doctrine of equitable tolling is applicable. Finally, the defendant argues that the Groton Tax Assessor was required to undertake an interim revaluation of the property after the subdivision was terminated.
Practice Book § 10-70 governs the foreclosure of municipal tax liens. That section states: "(a) In any action to foreclose a municipal tax or assessment lien the plaintiff need only allege and prove: (1) the ownership of the liened premises on the date when the same went into the tax list, or when said assessment was made; (2) that thereafter a tax in the amount specified in the list, or such assessment in the amount made, was duly and properly assessed upon the property and became due and payable; (3) (to be used only in cases where the lien has been continued by certificate) that thereafter a certificate of lien for the amount thereof was duly and properly filed and recorded in the land records of the said town on the date stated; (4) that no part of the same has been paid; and (5) other encumbrances as required by the preceding section. (b) When the lien has been continued by certificate, the production in court of the certificate of lien, or a certified copy thereof, shall be prima facie evidence that all requirements of law for the assessment and collection of the tax or assessment secured by it, and for the making and filing of the certificate, have been duly and properly complied with. Any claimed informality, irregularity or invalidity in the assessment or attempted collection of the tax, or in the lien filed, shall be a matter of affirmative defense to be alleged and proved by the defendant."
The court will first address the defendant's contention that Groton violated its statutory duty when it continued to assess the properties as individual lots rather than as one parcel of unclassified land after Groton terminated its subdivision. In opposing summary judgment, the defendant's special defense asserted that: "The assessment of the taxes was invalid due to the fact that the various lots being foreclosed were assessed as separate and distinguishable lots being a part of a subdivision, when in actuality, the [town] terminated the subdivision but continued to assess the lots as separate parcels of property rather than assessing all of the lots as one parcel of property." (Internal quotation marks omitted.) Town of Groton v. First Groton, LLC, supra, Docket No. CV 08 5008750.
In rejecting this defense, this court stated: "It is well settled that if the defendant wanted to challenge the validity of the assessments, it was required to follow the appropriate statutory procedures, either by (1) timely appealing from the assessments to the board of assessment appeals pursuant to General Statutes §§ 12-111 and 12-112, and from there by timely appealing to the court pursuant to General Statutes § 12-117a, or (2) timely bringing a direct action pursuant to § 12-119 . . . [A] taxpayer who has failed to utilize the available statutory remedies [may not] assert, in an action to collect a tax . . . that the tax has not been properly assessed . . . The rationale for this rule is the need on the part of the government for fiscal certainty. A municipality, like any governmental entity, needs to know with reasonable certainty what its tax base is for each fiscal year, so that it responsibly can prepare a budget for that year . . . Public policy requires, therefore, that taxes that have not been challenged timely cannot be the subject of perpetual litigation, at any time, to suit the convenience of the taxpayer . . . A taxpayer who has not sought redress in an appropriate manner is foreclosed from continuing litigation outside [those] statutes." (Internal quotation marks omitted.) Id.
This court held that the defendant failed to file a timely appeal under § 12-117a or § 12-119 from any assessments upon which the liens were based. Moreover, the court noted that the defendant conceded that it was not entitled to additional time within which to appeal the tax assessments, pursuant to 11 U.S.C. § 108(a)(2), as a successor in title. As a result, this court held that the defendant's special defense challenging the validity of the tax assessments was legally insufficient. The court has no reason to depart from its analysis now and as such, rejects the defendant's first argument.
Next, the court will address the defendant's argument, raised for the first time, as to the applicability of the doctrine of equitable tolling. Recently, in Wiele v. Board of Assessment Appeals of Bridgeport, 119 Conn.App. 544, 988 A.2d 889 (2010), the court addressed the doctrine of equitable tolling in the context of § 12-117a and § 12-119. In Wiele, the taxpayer moved to a different state and registered the vehicle in that state. The taxpayer mailed the receipt from the returned Connecticut plates to the city's tax assessor's office to show the truck was no longer registered in Connecticut. Nevertheless, the city assessed the truck unbeknownst to the taxpayer. Seven years later, the taxpayer moved back to Connecticut. See id., 546. At some point thereafter, the taxpayer became aware of the assessment and attempted to resolve the issue with the city's tax officials. The city issued a tax warrant and deducted the assessed amount from the taxpayer's bank account. See id., 547.
The taxpayer appealed from the decision of city's board of assessment appeals denying her challenge to city's removal of funds from her bank account, in which she alleged the taxes were illegally assessed because the truck had not been registered in the state after she had moved to another state. See id. The board of assessment appeals argued that the taxpayer's action should be dismissed because it is barred by the statute of limitations pursuant to § 12-119. See id., 548. The court declined to issue an order dismissing the taxpayer's action because the taxpayer's substantive arguments sounded in equitable tolling. See id., 554.
The court defined equitable tolling in the following manner: "The doctrine that the statute of limitations will not bar a claim if the plaintiff, despite diligent efforts, did not discover the injury until after the limitations period had expired . . . The tolling of a statute of limitations may potentially overcome a statute of limitations defense. When a statute of limitations is tolled, it does not run and the time during which the statute is tolled is considered, in effect, as not having occurred. Therefore, if a statute in a particular case is tolled, it is as if the statute commenced on a later date . . . The doctrine of equitable tolling applies in certain situations to excuse untimeliness in filing a complaint." (Citation omitted; internal quotation marks omitted.) Id.
Ultimately, the court concluded that the taxpayer's action was not barred by the one-year statute of limitations under § 12-119 because the taxpayer made arguments consistent with the doctrine of equitable tolling, namely, that she did not learn of the illegal tax until fourteen years after the assessment. See id., 555.
The present case is distinguishable from the facts before the court in Wiele. As such, the court is not persuaded that the doctrine is applicable here. As previously discussed, this court held that the defendant failed to file a timely appeal from any assessments upon which the liens were based and further, that the defendant was not entitled to additional time within which to appeal the tax assessments, pursuant to 11 U.S.C. § 108(a)(2), as a successor in title. The court has no reason to depart from its analysis now and as such, rejects the defendant's second argument.
Finally, the court will address the defendant's argument that the Groton Tax Assessor was required to undertake an interim revaluation of the property after the subdivision was terminated. In granting Groton's motion for summary judgment, this court addressed the defendant's special defense that alleged the town has unclean hands because it "continued to assess and tax the property, and the individual lots, as if it was a subdivision knowing full well that their actions were improper, unfair, deceptive and immoral." (Internal quotation marks omitted.) Town of Groton v. First Groton, LLC, supra, Docket No. CV 08 5008750.
In rejecting this special defense, this court stated: "The town was not, however, required to perform an interim revaluation of the property for taxation purposes. Voluntown v. Rytman, 21 Conn.App. 275, 285, 573 A.2d 336, cert. denied, 215 Conn. 818, 576 A.2d 548 (1990)." (Internal quotation marks omitted.) Id. This court also distinguished this case from Pauker v. Roig, 232 Conn. 335, 342, 654 A.2d 1233 (1995), in which our Supreme Court stated that a tax assessor is not obligated to undertake an interim revaluation "in the absence of a showing of the destruction or expansion of the property, a substantial change in its use or zoning classification, or a decision by the taxpayer to go out of business." In reliance on Pauker, the defendant argued that the town's termination of the subdivision constituted a substantial change in the property's use or zoning classification, and therefore, the tax assessor was required to perform an interim revaluation. This court countered: "The defendant LLC's reliance on Pauker is misplaced, however, as that case involved a tax appeal pursuant to § 12-119. In the present case, the defense challenges the validity of the tax assessments and, as discussed herein, is legally insufficient in a foreclosure action." Town of Groton v. First Groton, LLC, supra, Docket No. CV 08 5008750. Furthermore, in the present controversy, there was no change in zoning classification when the subdivision expired by the statutory time period. Thus, the court is similarly unwilling to depart from its prior analysis in regard to the defendant's third and final argument.
ATTORNEYS FEES
The plaintiff in the pursuit of a tax lien foreclosure is entitled to attorneys fees and costs as a prevailing party pursuant to the provisions of General Statutes §§ 52-249(a) and 12-193. "[Section] 52-249 provides that the plaintiff may be awarded attorneys fees in an action to foreclose a lien `upon obtaining judgment of foreclosure . . .'" Original Grasso Construction Co. v. Shepherd, 70 Conn.App. 404, 418, 799 A.2d 1083, cert. denied, 261 Conn. 932, 806 A.2d 1065 (2002). Section 12-193, in relevant part, states: "Court costs, reasonable appraiser's fees, and reasonable attorneys fees incurred by a municipality as a result of any foreclosure action brought pursuant to section 12-181 or 12-182 and directly related thereto shall be taxed in any such proceeding against any person or persons having title to any property so foreclosed and may be collected by the municipality once a foreclosure action has been brought pursuant to section 12-181 or 12-182 . . ." (Emphasis added.).
The award and amount of legal fees and costs lies with the discretion of a trial court. See Danbury v. Dana Investment Corp., 249 Conn. 1, 27-29, 730 A.2d 1128 (1999) (discussing fees pursuant to § 12-193); see also Redding v. Elfire, LLC, Superior Court, judicial district of Danbury, Docket No. CV 99 0337512 (December 1, 2004, Axelrod, J.T.R.) (contains a detailed discussion of attorneys fees in a foreclosure action for unpaid municipal taxes).
The plaintiff has filed an affidavit of legal fees and costs starting in 2003, when work commenced on the collection of the back taxes and other foreclosure matters, including intervening bankruptcy matters prior to foreclosure by other creditors. The town's foreclosure was not commenced until 2008. The defendant contends that the attorneys fees must be reasonable and relate to the action at hand and claims that a portion of the plaintiff's attorneys fees are not related to the present foreclosure action.
This court, in its discretion, shall limit the attorneys fees commencing January 2, 2008, as "directly related" to the present foreclosure matter pursuant to the statutory mandate of § 12-193. See e.g., White Sands Beach Assn., Inc. v. Bombaci, Superior Court, judicial district of New London, Docket No. CV 04 0568713 (May 12, 2009, Purtill, J.T.R.) (court reduced claimed attorneys fees because plaintiff's defense of counterclaim was not "directly related" to the foreclosure of tax liens).
ORDER
It is hereby ordered that a judgment of foreclosure shall enter in favor of the plaintiff town. Attorneys fees of $15,674.50 and costs in the amount of $5,882.23 (including title search of $1,650.00 and appraisal fee of $1,800.00) are awarded in favor of the plaintiff. The matter shall be set down for a short calendar hearing to establish (1) the valuation of the subject property; (2) the present debt owed to the plaintiff, and (3) whether strict or foreclosure by sale shall be ordered.