Opinion
No. 568713
November 2, 2005
MEMORANDUM OF DECISION
In this action, plaintiff, White Sands Beach Association seeks to foreclose certain tax liens against the property of the named defendants.
The matter was scheduled for trial to commence on October 18, 2005 at which time the parties entered into a stipulation which was placed on the record. The stipulation resulted in a bifurcation of the action. It was stipulated that:
A judgment of strict foreclosure should enter on the tax liens for taxes due July 1, 2000, July 1, 2001, July 1, 2002 and July 1, 2003 with applicable interest through September 7. A law day was set for April 15, 2006.
Plaintiff withdraws its lien for taxes due July 1, 2004.
The issue of plaintiff's attorneys fees and costs in the foreclosure action should be resolved at a future evidentiary hearing.
Defendants will file an amended complaint by October 28, 2005 pursuant to C.G.S. § 12-119 raising the invalidity of the assessments due from July 1, 2005 forward on the grounds that the White Sands Beach Association was never properly incorporated, i.e., that it has no legal existence and the defendants' property was never properly annexed to the White Sands Beach Association. The parties shall have until December 10, 2005 to complete written discovery, depositions to be completed by December 30, 2005.
Motions for summary judgment, if any, are to be filed by January 17, 2006 and any objections thereto by January 30, 2006.
Exhibits premarked on October 18, 2005 shall remain with the court to be used at trial on the bifurcated issues and both parties reserved the CT Page 14064-ca right to offer additional exhibits at the time of trial.
Plaintiff has requested to amend their counterclaim to add a count pursuant to C.G.S. § 42-110a et seq., Connecticut Unfair Trade Practices Act (CUTPA). Plaintiff has objected to this amendment. It was agreed that the court should rule on the request to amend.
The majority view in Connecticut is that a CUTPA claim will not lie against a municipality in the foreclosure in a tax lien.
In Danbury v. Dana Investment Corp., 249 Conn. 1, 730 (1999), the court was faced with the issue of whether a CUTPA claim could be maintained against a municipality in a municipal tax lien foreclosure. The court found, inter alia, that § 42-110b(a) provides: "No person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce. Section 42-110a(4) defines `[t]rade' and `commerce' [as] the advertising, the sale or rent or lease, the offering for sale or rent or lease, or the distribution of any services and any property, tangible or intangible, real, personal or mixed, and any other article, commodity, or thing of value in this state." (Internal quotation marks omitted.) Id., 19. "Even if we were to assume that, in collecting real estate taxes owed to it, the city was engaged in `trade' or `commerce,' we conclude that [the defendant's] special defense founders on General Statutes § 42-110c(a), which provides in relevant part: Nothing in this chapter shall apply to: (1) Transactions or actions otherwise permitted under law as administered by any regulatory board or officer acting under statutory authority of the state or of the United States . . ." (Internal quotation marks omitted.) Id. The court went on to hold that the process by which a municipality assesses real property is authorized and regulated by statute; that the process by which the taxpayer may challenge those assessments are regulated by statute; that the process by which the town may collect unpaid taxes is regulated by statute; and therefore, CUTPA may not be applied "to a municipality that is acting pursuant to statute in order to collect unpaid taxes by foreclosing on previously unchallenged tax liens." Id., 20.
The first and second counts of the counterclaim allege violations of CUTPA and that plaintiff does not exist as a specially incorporated entity since it did not follow the requirements of the special act of incorporation and the act which allowed an annexation of additional property including defendants' property. The second-count alleges that plaintiff is in fact a common law partnership. In effect, the defendants are alleging that the provisions of § 42-110c(a) do not apply here. CT Page 14064-cb
The issue of whether or not the collection of taxes constitutes trade or commerce so as to bring the counterclaim within the preview of CUTPA is not now decided. Because of the specific allegations of the first and second counts of the proposed counterclaim, the request to amend the counterclaim must be granted.
Accordingly, the request to amend is granted. CT Page 14064-cc