Pine Haven Christian Home, Inc. v. Vill. of Oostburg

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Pine Haven Christian Home, Inc., Plaintiff-Respondent, v. Village of Oostburg, Defendant-Appellant.

No. 2023AP942

Court of Appeals of Wisconsin, District II

June 19, 2024

This opinion will not be published. See WIS. STAT. RULE 809.23(1)(b)5.

APPEAL from a judgment of the circuit court for Sheboygan County No. 2021CV176 ANGELA W. SUTKIEWICZ, Judge.

Before Gundrum, P.J., Neubauer and Grogan, JJ.

Per curiam opinions may not be cited in any court of this state as precedent or authority, except for the limited purposes specified in Wis.Stat. Rule 809.23(3).

PER CURIAM.

¶1 The Village of Oostburg appeals from a judgment entered after the circuit court granted summary judgment in favor of Pine Haven Christian Home, Inc. in regard to Pine Haven's lawsuit challenging its property tax assessment. The court concluded that the four duplexes Pine Haven purchased near Pine Haven's existing assisted living facility qualified "as a retirement home for the aged" under WIS STAT. § 70.11(4d) (2021-22)^[1] and are therefore entitled to exemption from property taxation. The Village asserts that the duplexes do not satisfy the definition of "retirement home for the aged" as defined in Milwaukee Protestant Home for the Aged v. City of Milwaukee, 41 Wis.2d 284, 164 N.W.2d 289 (1969), and therefore do not meet the statutory requirement for tax exemption. The Village therefore requests that we reverse the grant of summary judgment in Pine Haven's favor and direct that summary judgment instead be granted in its favor. We reverse the judgment and remand with directions to grant summary judgment in the Village's favor.^[2]

I. BACKGROUND

¶2 It is undisputed that Pine Haven is a nonprofit entity that owns and operates housing facilities ranging from independent living facilities to long-term skilled nursing facilities. In 2019, Pine Haven purchased four duplexes located south of its assisted living facility in Oostburg for the purpose of expanding the continuum of care its facilities offer. At the time, the duplexes were fully occupied, and the tenants thereafter entered new rental agreements with Pine Haven.^[3]

¶3 Pine Haven submitted a Property Tax Exemption Request for the recently acquired duplexes seeking exemption from property taxes pursuant to WIS. STAT. § 70.11(4d) for the 2020 tax year. Although the Village assessor initially granted the request, he reversed that decision a day later on the basis that the duplexes did not qualify "as a retirement home for the aged" within the meaning of § 70.11(4d).^[4] Pine Haven paid its tax bill and commenced this action to recover the "unlawful" tax and sought a declaration that the duplexes are exempt from taxation under the statute.

¶4 Both parties moved for summary judgment. Pine Haven argued that the duplexes fall within the definition of "retirement home for the aged," whereas the Village contended that they do not. After hearing oral argument, the circuit court granted summary judgment in Pine Haven's favor. The Village appeals.

II. DISCUSSION

¶5 "'Summary judgment is appropriate when there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law.'" Martinez v. Rullman, 2023 WI.App. 30, ¶18, 408 Wis.2d 503, 992 N.W.2d 853 (quoted sources omitted) review denied, 2024 WI 3, 4 N.W.3d 908. "Appellate courts review a grant of summary judgment de novo using the same methodology as the circuit court." Id. "Summary judgment should be granted only when there are no genuine issues of disputed material facts." Id.

¶6 The dispute here is whether Pine Haven's four duplexes located near one of its assisted living facilities qualify "as a retirement home for the aged" under WIS STAT. § 70.11(4d) so as to exempt Pine Haven from paying property taxes for those properties. We review questions of statutory interpretation de novo, State v. Lickes, 2020 WI.App. 59, ¶16, 394 Wis.2d 161, 949 N.W.2d 623, aff'd, 2021 WI 60, 397 Wis.2d 586, 960 N.W.2d 855, and we interpret statutes using the well-established methodology articulated in State ex rel. Kalal v. Circuit Court for Dane County, 2004 WI 58, 271 Wis.2d 633, 681 N.W.2d 110. When reviewing statutory language, this court "ascertain[s] and appl[ies] the plain meaning of the statutes as adopted by the legislature." White v. City of Watertown, 2019 WI 9, ¶10, 385 Wis.2d 320, 922 N.W.2d 61. "[S]tatutory interpretation 'begins with the language of the statute[,]'" and the "language is given its common, ordinary, and accepted meaning, except that technical or specially-defined words or phrases are given their technical or special definitional meaning." Kalal, 271 Wis.2d 633, ¶¶45-46 (citation omitted) ("Context is important to meaning. So, too, is the structure of the statute in which the operative language appears. Therefore, statutory language is interpreted in the context in which it is used; not in isolation but as part of a whole; in relation to the language of surrounding or closely-related statutes; and reasonably, to avoid absurd or unreasonable results.").

¶7 "Taxation is the rule and exemption from taxation is the exception." Trustees of Indiana Univ. v. Town of Rhine, 170 Wis.2d 293, 299, 488 N.W.2d 128 (Ct. App. 1992). "Tax exemption statutes are matters of legislative grace and are to be strictly construed against the granting of an exemption." Id. "The party claiming the exemption must show the property is clearly within the terms of the exception and any doubts are resolved in favor of taxability." Id.

¶8 The tax exemption statute at issue here, WIS. STAT. § 70.11(4d), as relevant, identifies the following as being exempt from taxation:

BENEVOLENT RETIREMENT HOMES FOR THE AGED. Property that is owned by a nonprofit entity that is a benevolent association and used as a retirement home for the aged, but not exceeding 30 acres of land necessary for the location and convenience of buildings, while such property is not used for profit, if the fair market value of the individual dwelling unit, as determined by the assessor for the taxation district in which the property is located, is less than 130 percent of the average equalized value under [WIS. STAT. §] ^70.57 of improved parcels of residential property located in the county in which the retirement home for the aged is located in the previous year, as determined by the assessor of the taxation district in which the property is located based on the sum of the average per parcel equalized value of residential land and the average per parcel equalized value of residential improvements, as determined by the department of revenue.

(Emphasis added.) To determine whether Pine Haven's duplexes qualify for the aforementioned tax exemption, we must construe the phrase "retirement home for the aged[.]"

¶9 While the tax exemption statute does not define the phrase "retirement home for the aged," our supreme court explained when construing WIS. STAT. § 70.11(4) (1963-64) in Milwaukee Protestant Home for the Aged, that "retirement homes for the aged" are "what the name implies, homes for retired persons, places of congregate living where retirees go to live, expecting to pay the fees charged and to receive the usual incidents of group home living." 41 Wis.2d at 291. We are bound by that precedent. See, e.g., State v. McMahon, 186 Wis.2d 68, 92, 519 N.W.2d 621 (Ct. App. 1994) ("[A]s an error correcting court, we are bound by our supreme court case law.").

¶10 The Village contends the four duplexes do not fall under the definition of the term set forth in Milwaukee Protestant Home for the Aged for multiple reasons, including that: (1) they are independent units with their own ingress, egress, and garage; (2) Pine Haven does not provide any services to the duplex tenants at the duplex itself; and (3) if a duplex tenant wants to purchase a meal or attend or participate in an event at the nearby assisted living facility, the tenant is considered a visitor. The duplexes themselves also do not share any common areas: there is no common kitchen, living room, game room, exercise room, party room, hallway, or any other space for congregate or group living. And, as previously noted, when Pine Haven purchased the four duplexes, the existing tenants remained after signing new rental agreements with Pine Haven. These rental agreements do not identify the duplexes as a "retirement home" or "retirement home for the aged" but instead describe the intended "use" of the duplexes simply as being for "residential purposes[.]" The duplex rental agreements also state that Pine Haven will provide lawn care and snow removal but do not require any upfront registration fee or enroll the duplex tenants into a retirement home.

¶11 Pine Haven believes its duplexes do qualify "as a retirement home for the aged" because the duplex tenants have access to the common areas of its assisted living facility down the street and may pay to participate in meals and some programming. In addition, Pine Haven explains that duplex tenants have "preferred placement" to move into one of Pine Haven's other facilities should that tenant eventually require greater support, services, or care.

¶12 In granting Pine Haven's motion for summary judgment, the circuit court erroneously disregarded Milwaukee Protestant Home for the Aged because it believed the supreme court's definition-set forth in 1969-was a "narrow and antiquated definition of a retirement home for [the] aged [that] does not take into consideration the current ... practice of the continuum of care." Even assuming the court was correct in its belief that our supreme court's definition of "retirement home for the aged" is not an accurate reflection of the continuum of care that is more commonly found in today's retirement home...