Opinion
HHDCV166068933S
08-09-2017
Town of East Windsor v. SJK Properties, LLC et al
UNPUBLISHED OPINION
RULING RE PLAINTIFF'S MOTION TO STRIKE SJK DEFENDANTS' SPECIAL DEFENSE, SETOFF AND COUNTERCLAIM #112.00
M. Nawaz Wahla, J.
I. Issue
The principal issue before the court is whether the special defenses, setoff and counterclaims initiated by the defendants are legally valid under the Connecticut law.
The parties are well versed with the factual and procedural context of the case. Therefore, the court will not engage in this unnecessary exercise of reiterating the history and facts. It is helpful, expeditious as well as instructive to address underlying issue.
Town of East Windsor's municipal tax foreclosure action to collect delinquent taxes on 52 properties for the year 2007-2013 is at issue. SJK Defendants' answer, sixteen special defenses, claim of setoff and counterclaims whether valid or not is at the heart of the motion to strike, filed on November 22, 2016, pursuant P.B. § 10-39 et seq. (pleading entry 109.00 dated September 12, 2016.)
SJK Properties, LLC and number of other individuals, related family members are listed as defendants. For the sake of ease and convenience of the proceedings defendants will be referred as SJK Defendants.
II. Standard of Review
" The purpose of motion to strike is to contest . . . the legal sufficiency of the allegations of any [pleading] . . . to state a claim upon relief can be granted (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003). A motion to strike challenges the legal sufficiency of a pleading . . . and, consequently, requires no factual findings by the trial court." (Internal quotation marks omitted.) Batte-Holmgren v. Commissioner of Public Health, 281 Conn. 277, 294, 914 A.2d 996 (2007). The role of the trial court in ruling on a motion to strike is " to examine the [complaint], construed in favor of the [plaintiff], to determine whether the [pleading party has] stated a legally sufficient cause of action." (Internal quotation marks omitted.) Dodd v. Middlesex Mutual Assurance Co., 242 Conn. 375, 378 698 A.2d 859 (1997). In ruling on a motion to strike, the court is limited to the facts alleged in the complaint." (Internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997). " [I]f facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Batte-Holmgren v. Commissioner of Public Health, supra, 294. " Moreover . . . [w]hat is necessarily implied [in an allegation] need not be expressly alleged." (Internal quotation marks omitted.) Violano v. Fernandez, 280 Conn. 310, 318, 907 A.2d 1188 (2006). Chase Home Finance, LLC. v. Fequiere, 119 Conn.App. 570 989 A.2d 606 (2010). Chase Home Finance, LLC. v. Fequiere, 119 Conn.App. 570, 989 A.2d 606 (2010).
III. Foreclosure Special Defenses
The Connecticut law has recognized the following defenses to foreclosure: payment, discharge, release and satisfaction, Petterson v. Weinstock, 106 Conn. 436, 441, 138 A. 433 (1927); Connecticut Savings Bank v. Reilly, 12 Conn.Supp. 327, 328 (1944); invalidity of lien, Citicorp Mortgage, Inc. v. Kerzner, 8 Conn.L.Rptr. 229, (1993) (Curran, J.); accident, mistake or fraud, Petterson v. Weinstock, 106 Conn. at 442; Boretz v. Segar; 124 Conn. 320, 324, 199 A. 548 (1938); Usury, Atlas Realty Corp. v. House, 120 Conn. 661, 183 A. 9 (1936); Abandonment of security, Glotzer v. Keyes, 125 Conn. 227, 5 A.2d 1 (1939); and under certain circumstances, inequity, Olean v. Treglia, 190 Conn. 756, 771, 463 A.2d 242 (1983) or unconscionability. Hamm v. Taylor, 180 Conn. 491, 495, 429 A.2d 946 (1980).
SPECIAL DEFENSES GENERALLY
The essence of the SJK Defendants' special defenses are challenging the tax assessment of individual lots as opposed to the property as a whole after the subdivision approval and the amount of the assessment. These special defenses cite numerous tax collection statutes without any relevance to the underlying cause of action, none of these special defenses provide a sufficient factual and legal basis, as noted above. Almost majority of identical issue/issues have been previously litigated when SJK Defendants filed an action challenging inter alia, the assessments of the same property in this court. See SJK PROPERTIES, LLC v. TOWN OF EAST WINDSOR, HHD-CV-15-6029377-S. The court has taken the judicial notice of these proceedings. As far as the assessments are concerned, the Supreme Court of Connecticut has addressed the issue and it is the controlling law. See Fyber Properties Killingworth Limited Partnership v. Donna Shanoff et al., 228 Conn. 476, 636 A.2d 834 (1994). The question presented in that case was when should a subdivision property have been assessed for the purposes of municipal taxation as individual subdivision lots rather than as unsubdivided land. The property owner claimed that the relevant date would have been on which the subdivision map was filed with the Town clerk. The Supreme Court upheld the trial court's determination that property becomes taxable as a subdivision and amenable to revaluation upon commission's approval of the application .
SPECIAL DEFENSE 1
SJK defendants first special defense asserts that the plaintiff has failed to comply with C.G.S. § 12-155, " demand and levy for the collection of taxes." The plaintiff correctly counters that a demand and levy is not relevant to tax collection lien foreclosure and must be stricken. In support of its position, the plaintiff cites number of cases. The most relevant and on point is the cases of Conn. Tax Liens 1, LLC v. Lee, No. HHD-CV-12-6031406-S, 2013 WL 4779615, at *2 (Aug.19, 2013, Robaina, J.) (Identifying six different methods to collect taxes.) In light of the foregoing, special defense 1 is hereby stricken.
SPECIAL DEFENSES 2 and 3
Second special defense alleges that the plaintiff have violated C.G.S. § 12-152, " tax on portion of the property assessed as a whole." As noted above, it is not a recognized special defense under CT law and is not valid to a municipal tax lien foreclosure as it does not pertain to the making, validity or enforcement of the lien. See City of Norwich v. Hallstrom, 2012 WL 954066 and Town of Glastonbury v. Sakon, 2014 WL 7495060. Section 12-152 is not applicable here as the plaintiff contend that each lot was separately assessed and taxed.
Additionally, the plaintiff correctly asserts that the defendants fail to allege sufficient facts to support this special defense, such as, it fails to identify which lots were conveyed and to whom, the date and the method by which the new owner requested that the assessor place a valuation on the conveyed lot, and the date and method by which the new owner demanded that tax collector compute the tax on said lot. These additional reasoning lend support to strike this special defense.
As far as special defense 3 is concerned, it alleges that plaintiff violated C.G.S. § 12-153 with regards to those lots where land has been conveyed by the Defendant to individuals or limited liability companies and those parcels conveyed . . .
Plaintiff counters this defense for the reasons listed in the special defense 2. The special defenses 2 and 3 are hereby stricken.
SPECIAL DEFENSE 4
In essence this special defense is asserted that the plaintiff has treated the defendants with disparity . . . to other similarly situated property owners . . . raising an implied issue of discrimination to the tax against the defendants. This special defense essentially attacks the property tax assessment. As noted earlier, such defense cannot be raised in foreclosure action. The plaintiff correctly points out that the courts have held a taxpayer may not raise a claim of unlawful assessment as a special defense or counterclaim in a action by municipality to collect taxes. See Hartford v. Faith Center, Inc. 196 Conn. 487, 492-93, 493 A.2d 883 (1985). Town of Weston v. Saugatuck Land Trust Co., CV106013364S, 2011 WL 3890994, (Conn.Super.Ct., July 19, 2011) ; Town of W. Hartford Ass'n of E. Hartford v. Dadi, CV010807735, 2001 WL 135540 (Conn.Super.Ct. Oct. 17, 2001) (striking improper assessment counterclaims because it does not relate to the tax lien). The special defense 4 is hereby stricken.
SPECIAL DEFENSES 5, 6 and 7
Special defense 5 states that the plaintiff have violated C.G.S § 12-145 and 146 by refusing to accept payback property taxes and granting a waiver of interest imposed by the Town. The special defense 6 alleges that the defendants have attempted to pay the said property tax but the plaintiff has failed or refused to accept said payment. Special defense 7 alleges that plaintiff violated C.G.S § 12-166 by not accepting the offered tax payments.
The plaintiff counters that 5, 6, and 7 special defenses do not contain sufficient facts and allegations are conclusory. The review of the defendants pleading in these special defenses are devoid of any specific reasons for waiver of interest and waiver of interest is a discretionary authority of the tax collector, such discretion cannot be the basis for a special defenses to a foreclosure for nonpayment of taxes. See Braithwaite v. Town of Wallingford, No. 262168, 1991 WL 241856, at *1 (Nov. 12, 1991, Healey, A.) The special defense 5, 6, and 7 are stricken.
SPECIAL DEFENSE 8
This defense asserts that the plaintiff filed illegal certificate of liens against the property owners. The plaintiff correctly counters that the defendant fails to offer any factual allegations as to how the certificate of liens violated C.G.S § 12-173 or why the certificate is illegal. Hence, special defense 8 is hereby stricken.
SPECIAL DEFENSE 9
This defense alleges in a conclusory fashion and without any detailed specificity that the plaintiff failed to discharge the tax liens recorded herein as per C.G.S. § 12-179. The court is unable to discern what is it that the defendants are asserting. There is no explanation as why the tax liens are illegal. As noted above, this is not a valid and recognized special defense under the Connecticut Law. Hence, special defense 9 is hereby stricken.
SPECIAL DEFENSE 10
The defendants allege that the plaintiff has improperly filed the tax foreclosure lien complaint, in violation of C.G.S. § 12-182 and 183. The plaintiff in response contends that § 12-182 and 12-183, entitled " Summary foreclosure of tax liens" and " Form of petition for summary foreclosure, " respectively. The plaintiff argues correctly that these statutes are not relevant to the municipal tax lien foreclosure actions and pertain to different tax collection methods. In support of its argument, plaintiff cites City of Middletown v. Meadows Assocs. of Middletown, Inc., 45 Conn.Super. 261, 264, 711 A.2d 1 (Super. Ct. 1998) , (noting different procedures and notice requirements for foreclosure of individual tax liens and summary foreclosure of a list of liens.) The plaintiff further argues that the defendant cannot force the plaintiff to pursue one type of remedy when it choose to pursue a different one (even assuming such process applies here). In light of the foregoing, special defense 10 is hereby stricken.
SPECIAL DEFENSE 11
In this special defense it is alleged that certificate of tax lien did not properly describe the description of the real estate, which is single parcel of land in the land records . . . individual building lots which do not exist . . .
In its motion to strike the plaintiff argues that this defense alleges that Certificate of Liens are a " fictitious assessments" because the real estate owned by the defendants was subdivided into individual building lots stemming from " a fictitious event within the Town's assessment process." The plaintiff argues that the defendant's principal argument is that plaintiff improperly assessed individual building lots, as opposed to assessing the larger land mass as a whole.
As noted above, and court agrees with the plaintiff that the Supreme Court has addressed the issue of assessing the individual lots following subdivision approval and determined that subdivision approval, rather than recording of subdivision map, is the appropriate time for reevaluation and reassessment of real property. See Fyber Properties Killingworth Limited Partnership v. Donna Shanoff et al., supra, 228 Conn. 476.
Additionally, the plaintiff cites Pauker v. Roig, 232 Conn. 335, 654 A.2d 1233 (1995), the holding in that cases is: Absent an appeal challenging its validity, the approval of a subdivision authorizes a tax assessor to tax the property as subdivision lots rather than as the undifferentiated parcel or parcels that preceded the approval. The authority to tax subdivision lots in such a revaluation under § 12-119. To the extent that conditional approvals deprive taxpayers of immediate economic returns from their investment, such conditional approvals raise issues only of valuation, which property may be addressed only by appeal under § 12-117a.
In the present case, the defendants do not allege that they appealed the underlying assessment on the individual lots. The plaintiff correctly counters and court agree that this special defense is legally insufficient. Therefore, special defense 11 is stricken.
SPECIAL DEFENSES 12, 13 and 14
The special defense 12 and 13 allege that the plaintiff has illegally assessed the property of the defendants, which is single lot, and is over-charging the defendants for past taxes for the years 2007-2013. The plaintiff counters that these special defenses collectively in essence attack the tax assessment of properties being foreclosed which is not a valid special defense, as noted above time and again. Special defense 12, 13, and 14 are hereby stricken.
SPECIAL DEFENSES 15 and 16
Special defense 15 and 16 both attack the property description and challenge the assessment of the individual lots. The defendants do not expressly mention the statute but imply that the tax certificates of tax lien subject of the complaint are not valid and impliedly violate C.G.S. § § 12-173(a)(2) and 12-173(a)(3). The plaintiff correctly counters that the statutory requirement of § 12-173(a)(2) states that there must be " a description of such real estate." There is no requirement such as " legal description." The tax lien provide the physical address of the property. Further, the court finds that after review of the record the requirements of C.G.S. § 12-173(a)(3) have been satisfied, all liens states the principal amount of the tax due, the interest and costs associated with tax lien are secured by the lien on the property. The defendants concede that C.G.S. § 12-64 does not specify the standards requisite in the description of premises. As noted above, these are invalid special defenses. The special defense 15 and 16 are hereby stricken.
Sec. 12-173. Certificate continuing lien. Discharge. Valid notice. (a) The collector of each municipality, by pursuing the method authorized by either section 12-174 or 12-175, may continue any tax lien existing against any item of real estate to secure the payment of the tax assessed by such municipality thereon or of any obligation to make a payment in lieu of any such tax, as defined in section 12-171, as such tax has been increased by legal interest, fees and charges, by making out and filing, within the time limited by section 12-174 or 12-175, in the office of the town clerk of the town wherein such real estate is situated, a certificate containing the following information: (1) The name of the person against whom such tax appears in the rate bill; (2) a description of such real estate; (3) the principal of such tax due thereon, the amount of which, with interest, if any, and fees and other charges, is secured by such lien; (4) the date or dates when the principal of such tax became due; and (5) a statement giving notice of his intention to file a lien pursuant to sections 12-172 and 49-73a to 49-73i, inclusive, against the proceeds of any policy of insurance providing coverage for loss or damage caused by fire, if a loss or damage has occurred. The town clerk shall record such certificate in the land records. Any tax lien so continued, when the tax has been paid with interest, fees and charges as provided by law, shall be discharged by a certificate of the then collector of taxes. Such certificate of release shall be delivered by such collector to the town clerk, who shall record it in the land records.
SET OFF
The SJK Defendants alleges that the defendants brought a cause of action against this plaintiff, titled as SJK Properties v. Town of East Windsor and John Watts, Docket No. CV 16-6067462, which the defendant seeks to set off any and all damages. The SJK Defendants had also filed lawsuit seeking an injunction and other relief. It is captioned as SJK Properties v. Town of East Windsor, Docket No. CV15-6057864. The court has taken judicial notice of these law suits.
The plaintiff correctly points that there is no contract between the parties, there is no mutual and liquidated debt due and owing from the plaintiff to the Defendants. Additionally, the Defendants have not pled that justice could not be obtained through a separate action. Additionally, the plaintiff in support of its motion cites " The right of set-off, whether legal or equitable, has always been confined to rights of action arising from contracts." Heimbrock v. Heimbrock, No. CV08-5004975S, 2009 WL 1662469, at *3 (May 18, 2009, Roche, J.) citing Springfield-Dewitt Gardens, Inc. v. Wood, 143 Conn. 708, 713, 125 A.2d 488 (1956). Neither lawsuit is based on a contract and thus, setoff is not appropriate. The plaintiff argues that in addition the Defendants fail to allege the existence of a mutual, liquidated debt between the parties. " A set-off is a debt independent of the transaction alleged in the complaint. A condition precedent to the application of the setoff statute . . . is that the defendant's claim arises from debt due from the plaintiff." (Internal citations, quotations omitted, emphasis added.) Heimbrock v. Heimbrock, No. CV08-5004975S, 2009 WL 1662469, at *3 (May 18, 2009, Roche, J.); PPI Techs., Inc. v. Madison Polymeric Eng'g, Inc., No. CV-11-6024647S, 2015 WL 4380100, at *4 (Jun. 16, 2015, Wilson, R.) (debt owed by the plaintiff must be mutual and liquidated). These law suits do not constitute a mutual and liquidated debt presently due from the plaintiff, hence the claim of set off is stricken.
COUNTERCLAIM
The SJK Defendants in their counterclaim re-allege a laundry list of allegations pled in the special defenses, such as Town has assessed this single parcel of land as 49 building lots and issued illegal tax liens against the individual building lots; the filing of these illegal tax liens has damaged the counterclaim plaintiff etc. The plaintiff correctly counters that the counterclaim is legally insufficient as (a) it fails to allege a viable cause of action, (b) it improperly seeks to challenge the assessment, (c) it fails the transaction test for counterclaim, and (d) it is barred by the prior pending doctrine. See Town of Wallingford v. Glen Valley Associates, Inc., 190 Conn. 158, 161, 459 A.2d 525 (1993). The counterclaim is hereby ordered stricken.
CONCLUSION
For the foregoing reasons, the plaintiff's motion to strike SJK Defendants' special defenses, set off and counterclaim is granted.
(b) A certificate continuing a tax lien under this section, filed in a timely manner, provides valid notice of the continuance of the lien to a subsequent purchaser or encumbrancer if the recorded certificate is sufficient to place a subsequent purchaser or encumbrancer on notice of the existence and extent of that lien, notwithstanding any error, irregularity or omission in that certificate. A certificate that erroneously states the amount due provides valid notice to a subsequent purchaser or encumbrancer up to the amount stated or the amount actually due, whichever is less.