Interlude, Inc. v. Skurat

266 Conn. 130

831 A.2d 235

INTERLUDE, INC. v. CATHERINE A. SKURAT, TAX COLLECTOR OF THE CITY OF DANBURY, ET AL.

(SC 16690)

Supreme Court of Connecticut.

Argued January 13, 2003.

Officially released October 7, 2003.

Borden, Katz, Palmer, Vertefeuille and Zarella, Js. Peter N. Buzaid, for the appellants (defendants).

Monte E. Frank, with whom, on the brief, were Neil R. Marcus, Jonathan S. Bowman and David L. Grogins, for the appellee (plaintiff).

Opinion

PALMER, J.

The sole issue raised by this certified appeal is whether the plaintiff, Interlude, Inc., a tax-exempt organization, is liable for property taxes accruing prior to, but not becoming due until after, the plaintiff's acquisition of property. The defendant city of Danbury (city),¹ claims that the Appellate Court improperly concluded that General Statutes § 12-81b² and Danbury Code § 18-20³ require the city to abate property taxes that have accrued prior to the date of a tax-exempt entity's acquisition of property. We conclude that § 12-81b provides only for an exemption from taxes accruing after the date of acquisition, rather than an abatement of previously accrued taxes. Accordingly, we reverse the judgment of the Appellate Court.

We glean the following undisputed facts and procedural history from the record and a joint stipulation of facts submitted by the parties to the trial court. The city assesses real property on October 1 of each year in accordance with General Statutes § 12-62a (a).⁴ Pursuant to General Statutes § 12-142,⁵ the city has determined that payment of the assessment amount will be made in four quarterly installments: July 1 and October 1 of the year following the assessment, and January 1 and April 1 of the subsequent year. The city's fiscal year runs from July 1 through the following June 30.

On October 1, 1991, the city assessed properties located at 25, 27, 29 and 31 Grand Street (property), which, at that time, were owned by Junco, Inc. (Junco), an entity that is not exempt from property taxes. Thereafter, Junco paid the first installment that was due on July 1, 1992. On September 24, 1992, Junco conveyed the property to the plaintiff, a nonprofit corporation that provides transitional housing, support and rehabilitation services to individuals with severe psychiatric disabilities. The plaintiff recorded the deed to the property on October 5, 1992. Thereafter, on July 2, 1993, the city notified the plaintiff that it had granted the plaintiff a tax exemption on the property pursuant to General Statutes (Rev. to 1993) § 12-81 (7).⁶

Thereafter, the city billed the plaintiff for the remaining three installments⁷ of the October 1, 1991 assessment and for the five days running from October 1, 1992, the date of the following assessment, to October 5, 1992, the date on which the plaintiff recorded the deed to the property. Initially, the plaintiff did not pay this tax bill. On November 1, 1994, the city filed a tax lien on the property. On January 15, 1995, the plaintiff, under protest and in order to avoid a tax sale of the property, paid the city $21,495.40 in taxes, interest and lien fees and an additional $2832.88 in attorney's fees. The plaintiff then demanded reimbursement, which the city denied.

The plaintiff thereafter instituted the present action seeking: (1) a judgment declaring that, pursuant to § 12-81b and Danbury Code § 18-20, the plaintiff, as a tax-exempt successor in interest to Junco, was not liable for any taxes and, in particular, those becoming due after the date of acquisition; and (2) reimbursement of the money it had paid to the city under protest. The city pleaded, by way of special defenses, that the plaintiff's claim was time barred and that the claim was not authorized under General Statutes (Rev. to 1993) § 12-89⁸ and General Statutes § 12-119.⁹ The trial court concluded that, under § 12-81b, the plaintiff was entitled to reimbursement for the taxes that it had paid to the city that had accrued after the date of the plaintiff's acquisition of the property,¹⁰ but not taxes that had accrued before the date of acquisition but that became due after that date.¹¹ The trial court rejected the plaintiff's contention that § 12-81b entitled the plaintiff to reimbursement for all taxes that it had paid, regardless of when those taxes had accrued. Therefore, the court denied the plaintiff's request for reimbursement of taxes that had accrued prior to its acquisition of the property on September 24, 1992, which comprised the bulk of the taxes that the plaintiff had paid under protest. The court ordered the city to reimburse the plaintiff only for its payment of the twelve days of taxes that had accrued subsequent to the acquisition date.¹² The court did not address the special defenses asserted by the city.

The plaintiff appealed from the judgment of the trial court to the Appellate Court, claiming that the trial court improperly had construed the scope of the tax exemption prescribed by § 12-81b. Interlude, Inc. v. Skurat, 54 Conn. App. 284, 285, 734 A.2d 1045 (1999). The Appellate Court affirmed the judgment of the trial court without reaching the merits of the plaintiff's claim, concluding that the plaintiff's action was barred by the one year statute of limitations contained in § 12-119.¹³ Id., 287-89. The plaintiff thereafter filed a petition for certification to appeal to this court, which we granted. Interlude, Inc. v. Skurat, 250 Conn. 927, 738 A.2d 657 (1999). On appeal, this court concluded that the one year limitations period prescribed by § 12-119 was inapplicable to the plaintiff's action because the assessment value of the property was not at issue and because the plaintiff did not own the property on the date of the October 1, 1991 assessment. Interlude, Inc. v. Skurat, 253 Conn. 531, 541, 754 A.2d 153 (2000). We therefore reversed the judgment of the Appellate Court and remanded the case to that court for consideration of the plaintiff's claim that it was entitled to reimbursement for the taxes it had paid to the city under protest. See id.

On remand, the Appellate Court, with one judge dissenting, reversed the judgment of the trial court and concluded that the plaintiff was entitled to full reimbursement of all property taxes it had paid subsequent to its acquisition of the property. Interlude, Inc. v. Skurat, 67 Conn. App. 505, 515, 787 A.2d 631 (2002). Specifically, the Appellate Court framed the issue as whether the statutory exemption, which provides for reimbursement of taxes paid by the tax-exempt entity "for a period subsequent to [the acquisition] date"; (emphasis added) General Statutes § 12-81b; "applies only to taxes assessed after the exempt entity acquired the property or to all taxes billed by the [city] after the exempt entity acquired the property." (Emphasis in original.) Interlude, Inc. v. Skurat, supra, 67 Conn. App. 509. The Appellate Court effectively concluded that the term "period" in § 12-81b refers to any period after acquisition for which property tax installments in a fiscal year become due. See id., 511-13. The court noted that, "[b]ecause pursuant to [General Statutes] § 7-383¹⁴ the property tax for a municipality's fiscal year, July through June, is payable beginning with the first installment of that fiscal year, all of the taxes at issue in this case were for time periods subsequent to the date of acquisition." (Emphasis in original.) Id., 513. Thus, the Appellate Court reversed the judgment of the trial court and remanded the case to that court with direction to render judgment directing the city to reimburse the plaintiff for its payment of those taxes. Id., 515. This certified appeal followed.¹⁵

The city claims that the Appellate Court improperly concluded that § 12-81b requires it to abate property taxes as of the date of the plaintiff's acquisition of the property. The city maintains that the taxes in question are for the 1991 assessment period of October 1, 1991, through September 30, 1992, and that the Appellate Court's decision effectively prevents it from collecting taxes that accrued on the property when it was owned by an entity not exempt from taxation. The city claims that § 12-81b does not require a municipality to abate previously accrued property taxes but, rather, merely provides a municipality with the option to advance the effective date of the exemption under §§ 12-81 (7) and 12-89 from the assessment date following acquisition— in this case, October 1, 1992—to the date the tax-exempt entity acquires the property.¹⁶ Conversely, the plaintiff contends that § 12-81b cannot be construed to tie the exemption to the period of the assessment year, because that statute does not use the words "tax year" or "assessment." Rather, General Statutes § 12-81b provides for reimbursement of "any tax paid . . . ." Therefore, the plaintiff claims, the legislature necessarily intended to relieve tax-exempt entities of their obligation to pay all taxes after their acquisition of the property. In other words, the plaintiff contends that § 12-81b requires the abatement of any taxes that accrue before the acquisition of the property but that become due subsequent to the acquisition of the property. We conclude that the construction of the statute advanced by the city is the more sound interpretation.

Because this issue raises a question of statutory construction, our review is plenary. E.g., Thames Talent, Ltd. v. Commission on Human Rights & Opportunities, 265 Conn. 127, 135, 827 A.2d 659 (2003). "The process of statutory interpretation involves a reasoned search for the intention of the legislature. . . . In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply. In seeking to determine that meaning, we look to the words of the statute itself, to the legislative history and circumstances surrounding...