Opinion
No. CV00 0438015S
January 5, 2009
MEMORANDUM OF DECISION ON DEFENDANT'S GOD'S CORNER CHURCH, INC.'S MOTION TO DETERMINE THE DEBT OWED BY SAID DEFENDANT
The defendant's motion to determine the amount of the defendant's debt is before this court as the result of a remand in this case by the Appellate Court. City of New Haven v. God's Corner Church, Inc. et al., 108 Conn.App. 134 (June 3, 2008).
The Appellate Court set forth the procedural history in its decision. "The following procedural history is relevant to our disposition of the defendant's appeal. By amended complaint dated December 20, 2001, the plaintiff sought to foreclose eight municipal tax liens against property owned by the defendant within the city of New Haven at 793-795 Grand Avenue. After a series of delays in the proceedings, the court rendered judgment of foreclosure by sale on November 14, 2005, and set a sale date of February 18, 2006. On February 14, 2006, the defendant filed a motion to extend the sale date and to determine the debt owed to the plaintiff. On February 17, 2006, the court denied the defendant's motion as to extending the sale date but deferred ruling on the motion as to the debt, allowing the defendant to reclaim its motion with respect to that issue. After the sale had proceeded as scheduled, the committee filed a motion to approve the sale and the committee's deed, and the defendant reclaimed its motion to determine the debt. Both motions were scheduled for a hearing on March 13, 2006. Prior to the hearing, however, the defendant paid the plaintiff a sum of money to redeem the property, and, on March 9, 2006, the plaintiff filed a satisfaction of the judgment with the court. On March 13, 2006, the court ordered the parties to brief the issue that the defendant raises on appeal, namely, whether the court retained subject matter jurisdiction to address the defendant's motion to determine the debt after the plaintiff had filed the satisfaction of the judgment. On August 25, 2006, the court resolved that question in favor of the plaintiff and dismissed the defendant's motion to determine the debt. This appeal followed . . ."
The Appellate Court found that the trial court was in error when the trial court concluded that it did not have subject matter jurisdiction to hear the motion to determine the debt. The Appellate Court then discussed the defendant's claims in connection with the motion to determine the debt. "The defendant prays for a remand to the trial court for an evidentiary hearing to determine whether the plaintiff should return any part of the amount paid by the defendant to redeem the property. Specifically, the defendant claims that the plaintiff was unjustly enriched because it improperly had demanded and received payment for (1) approximately $22,000 in settlement of a separate dispute between the parties, (2) `a statutory collection fee' that was not submitted to the court or made a part of the judgment and (3) $3,117.05 in excess of the attorneys fees awarded by the court. The plaintiff, in response, asserts that it was entitled to demand those sums and that, in any event, the defendant has waived its claim of unjust enrichment by knowingly and voluntarily paying the amount demanded without reserving its rights to dispute the amount demanded."
The Appellate Court also noted the following facts which it stated were not in dispute. "On November 14, 2005, the court found the amount of the debt to be $94,415.59 and awarded the plaintiff, as part of its judgment of foreclosure by sale, $18,850 in attorneys fees. On March 3, 2006, the plaintiff's attorney issued to the defendant's attorney a payoff letter itemizing the amounts that the plaintiff claimed the defendant owed in order to redeem the property. The total amount in demand, as stated in the payoff letter, was $168,799.69. On March 9, 2006, the defendant paid the full amount of the March 3, 2006 demand."
The Appellate Court found that it was not clear from the record whether the trial court had ruled or made findings on the plaintiff's claim that the defendant had waived its right to dispute the amount of the debt and, as part of the remand, ordered the trial court to determine whether the defendant waived its right to be heard on the motion to determine the debt. "Accordingly, we must remand this case to the trial court for a determination of this threshold issue and, in the event the court finds that no waiver occurred, a decision on the merits of the defendant's claim."
This court conducted an evidentiary hearing in accordance with the remand order on September 10-11, 2008. The parties have filed appropriate post-hearing memoranda.
A waiver is the intentional relinquishment of a known right. In view of the evidence that the defendants have continued throughout these proceedings to pursue a hearing on the motion to determine the amount of the debt, the court finds that there has not been an intentional waiver of the right to have a hearing to determine the amount of the debt.
With respect to the merits of the defendant's claim, the principal issue is whether the defendant has proven that it paid the plaintiff more than it should have on March 9, 2006, and therefore that the plaintiff has been unjustly enriched by certain payments "Unjust enrichment applies wherever justice requires compensation to be given for property or services rendered under a contract, and no remedy is available by an action on the contract . . . A right of recovery under the doctrine of unjust enrichment is essentially equitable, its basis being that in a given situation it is contrary to equity and good conscience for one to retain a benefit which has come to him at the expense of another . . . With no other test than what, under a given set of circumstances, is just or unjust, equitable or inequitable, conscionable or unconscionable, it becomes necessary in any case where the benefit of the doctrine is claimed, to examine the circumstances and the conduct of the parties and apply this standard . . . Unjust enrichment is, consistent with the principles of equity, a broad and flexible remedy . . . Plaintiffs seeking recovery for unjust enrichment must prove (1) that the defendants were benefited, (2) that the defendants unjustly did not pay the plaintiffs for the benefits, and (3) that the failure of payment was to the plaintiffs' detriment. (Citations omitted; internal quotation marks omitted.) Hartford Whalers Hockey Club v. Uniroyal Goodrich Tire Co., 231 Conn. 276, 282-83, 649 A.2d 518 (1994).
The specific claims of unjust enrichment made by the defendant before the trial court (Doherty, J.), and as remanded by the Appellate Court, related to approximately $22,000 in settlement of a separate dispute between the parties, a statutory collection fee of $8,106.84 that was not previously submitted to the court, and $3,117.05 for attorneys fees that was in excess of the attorneys fees previously awarded by the court.
The evidence at the hearing on the remand disclosed that the property which was the subject of this foreclosure action was located at 793-795 Grand Avenue in New Haven. The plaintiff was seeking to foreclose on eight municipal tax liens on the grand lists of October 1, 1989 through October 1, 1996. The claim with respect to the 1989 grand list was withdrawn on July 18, 2005. The property had been sold at a foreclosure sale on February 18, 2006. A motion by the committee to approve the sale and the committee deed was scheduled for a hearing on March 13, 2006. The defendant also owned a separate piece of property next door at 783 Grand Avenue. The defendant had retained Attorney David Kurzawa to conduct a refinancing of both properties. Kurzawa was authorized to pay off mortgages, taxes and all debts that were claimed to be due on both properties so the financing could take place.
In connection with determining all of the debts claimed to be due on 793-795 Grand Avenue, Kurzawa had been in discussions with Attorney Stephanie Baier who represented the plaintiff in this foreclosure case. During February and early March 2006, Kurzawa and Baier had several discussions concerning the debts on both properties. Kurzawa requested and received a payoff letter with respect to 793-795 Grand Avenue on March 3, 2006 from Baier. The trial court had scheduled a hearing on March 13, 2006 on the committee's motion to approve the sale and committee deed and therefore, if the refinancing was to be accomplished it had to be done before that date.
The real estate taxes, interest, and penalties that were due on the seven grand lists of 1990 through 1996 were the subject of the tax liens being foreclosed in the instant case. In order to accomplish the refinancing of 793-795 Grand Avenue the lender insisted on being in first position on the property. Therefore it was necessary that all encumbrances of record on 793-795 Grand Avenue had to be paid off by the defendant in order to accomplish the refinancing. In addition to not paying real estate taxes for 793-795 Grand Avenue on the grand lists of 1990-1996, which was the subject of the tax liens in the instant case, the defendant also had not paid real estate taxes on 793-795 Grand Avenue for the grand lists of 2001-2004. Tax liens had been filed for the grand list of 2001-2004 but those liens were not the subject of this foreclosure action. The defendant and its counsel were aware that these liens had to be paid off in order to refinance 793-795 Grand Avenue. There was no discussion about paying off the tax claims of the City for 2001-2004 under protest.
The payment of what the Appellate Court described as "approximately $22,000 in settlement of a separate dispute by the parties" was in fact the payment of $14,847.70 in taxes and $5,225.86 in interest and penalties for 793-795 Grand Avenue on the grand lists of 2001, 2002, 2003 and 2004, which are not included in this foreclosure case. The defendant claims that these liens should not have been filed and should not have been paid because the property had a religious exemption for 2001-2003. This claim arises out of a decision by this court (Hadden, J.), in Docket No. CV05-4011440S, Judicial District of New Haven, God's Corner Church v. City of New Haven, (July 23, 2007). 793-795 Grand Avenue had been granted a religious exemption on February 18, 1999. On the grand list of October 1, 2004 the City of New Haven revoked the religious exemption. God's Corner Church appealed the revocation. The trial court found that 793-795 Grand Avenue was not being used as a church on October 1, 2004, that the plaintiff had failed to prove that it was entitled to the exemption as provided in C.G.S. Section 13-81(7) and dismissed the appeal.
Since the appeal to the Superior Court in that case was taken only from the revocation of the tax exemption on the 2004 grand list, the defendant in the instant case claims that the property was still tax exempt on the 2001-2003 grand lists and that the plaintiff has been overpaid $14,847.70 in taxes and $5,225.86 in penalties and interest levied on 793-795 Grand Avenue on the grand lists of 2001-2003.
The defendant was aware that the plaintiff had placed liens for unpaid real estate taxes on 793-795 Grand Avenue for the grand lists of 2001-2003. If the defendant wished to contest the validity of these liens it could have paid the taxes under protest and then contested their validity. The defendant was fully aware of all the facts with respect to the tax liens on the grand lists of 2001-2003 and paid the taxes voluntarily in order to accomplish the refinancing of 793-795 Grand Avenue. The defendant has failed to prove that the tax liens on 795 Grand Avenue for the grand lists of 2001-2003 were invalid and therefore it has failed to prove that the plaintiff has been unjustly enriched by the payment on March 9, 2006 of "approximately $22,000.00 in settlement of a separate dispute by the parties."
The next claim of unjust enrichment involves the payment on March 9, 2006 by the defendant to the plaintiff for a "statutory collection fee" of $8,106.84 that the defendant claims was not submitted to the trial court or made a part of the judgment. The statutory collection fee refers to the fee a collection agency may charge pursuant to General Statutes § 12-166. See City of New Haven v. Bonner, 272 Conn. 489, 493-97. The evidence established that on July 18, 2005 the trial court accepted the plaintiff's July 14, 2005 affidavit of debt which included collection fees of $7,769.64 paid by the plaintiff to the collection agency. The statutory collection fee of $8,106.24 which was included in the payoff letter of March 3, 2006 and which was paid by the defendant on March 9, 2006 reflects an increase of $337.20 over the previously approved fee and was proper. The plaintiff is entitled to collect from the defendant the collection fee paid by the plaintiff to the collection agency when the delinquent account is referred to the collection agency. The defendant has failed to prove that the plaintiff has been unjustly enriched by this payment.
The final claim of unjust enrichment made by the defendant in the Appellate Court concerns an attorneys fee of $3,117.05 in excess of the amount approved by the trial court. On November 14, 2005 the trial court had approved an attorneys fee of $18,850. Attorney Kurzawa had asked Attorney Baier about the increase in attorneys fees since the last court approval of $18,850. Ms. Baier advised him that she had done considerable work on the case from November 14, 2005 to March 3, 2006, and that she would submit the additional fees for court approval by way of a request for a supplemental judgment if he did not agree to the charge. After he was told the basis for the additional fees Mr. Kurzawa agreed to the updated fees and they were paid on March 9, 2006 without protest. The evidence before this court at the remand hearing concerning Ms. Baier's services between November 14, 2005 and March 3, 2006 satisfied this court that the additional legal fees were reasonable and would have been approved if a motion for approval had been filed. Such a motion was not filed because Ms. Baier believed the case was moot after the filing of the satisfaction of judgment. The defendant has failed to prove its claim of unjust enrichment with respect to the payment of the additional attorneys fees.
Accordingly, for the foregoing reasons the court finds that the defendant has failed to prove any of its claims of unjust enrichment as set forth in the remand order of the Appellate Court.