Pjm & Associates, Lc v. City of Bridgeport

971 A.2d 24

292 Conn. 125

PJM AND ASSOCIATES, LC v. CITY OF BRIDGEPORT.

Bridgeport Towers, LLC v. City of Bridgeport.

No. 18229.

Supreme Court of Connecticut.

Argued November 18, 2008.

Decided June 16, 2009.

Russell D. Liskov, associate city attorney, for the appellant (defendant).

George J. Markley, Fairfield, with whom was Alexander Breiner, for the appellees (plaintiffs).

ROGERS, C.J., and NORCOTT, VERTEFEUILLE, ZARELLA and SCHALLER, Js.

ZARELLA, J.

The principal issue in this joint appeal is whether a municipal tax assessor, in determining the present value of real property used primarily for the purpose of producing rental income, has authority under General Statutes § 12-63c¹ to compel the filing of income and expense reports by the property owner in years in which there is no citywide revaluation or interim revaluation of properties in the same class as the owner's property. The defendant, the city of Bridgeport, appeals² from the judgments of the trial court reversing the decisions of the defendant's board of assessment appeals (board) upholding penalties imposed by the defendant's tax assessor (assessor) on the plaintiffs, PJM & Associates, LC (PJM), and Bridgeport Towers, LLC (Bridgeport Towers), owners of income producing properties³ in Bridgeport, for failing to comply with the assessor's request to file reports disclosing the rental income and operating expenses of the properties by June 1, 2004. The defendant specifically claims that the trial court improperly determined that § 12-63c(a) does not authorize the assessor to compel the disclosure of information regarding income and operating expenses in a year when there is no citywide revaluation of all real property or no interim revaluation of properties in the same class as the plaintiffs' properties. The plaintiffs reply that the trial court properly construed the statute and claim as alternative grounds for affirmance⁴ that (1) the plaintiffs had no intent to defraud, the only circumstance under which the statutory penalty may be imposed for a property owner's failure to submit an income and expense report, (2) the penalty bears no rational relationship to the offense, (3) § 12-63c(a) empowers the assessor to require an income and expense report only when a property is appraised under the capitalization of net income method, which was unwarranted in these cases under General Statutes § 12-63b(a), and (4) the assessor incorrectly calculated PJM's penalty by increasing by 10 percent the prior assessed value of its industrial facility, instead of its value following application of the exemption under General Statutes § 12-81(59) for a manufacturing facility in a distressed municipality. We conclude that the trial court's judgments must be reversed because the assessor was authorized under § 12-63c(d) to impose penalties on the plaintiffs for failing to file the requested income and expense reports by June 1, 2004. We further conclude that the plaintiffs' first and second alternative grounds for affirmance have no merit. We agree, however, with the plaintiffs' third alternate ground for affirmance, namely, that § 12-63b(a) empowers the assessor to require income and expense reports only when there are insufficient data regarding current sales of comparable properties.⁵ Accordingly, we reverse the trial court's judgments and remand the cases to the trial court for further proceedings to determine whether there were insufficient data on comparable sales so as to justify the assessor's use of the capitalization of net income method, and, if there were insufficient data, to consider the plaintiffs' claim that the assessor improperly calculated the penalty against PJM's tax-exempt property.

The parties stipulated to the following facts. The defendant sent each plaintiff a questionnaire regarding income and expenses in connection with their rental properties for the Bridgeport grand list of October 1, 2004. Neither party received the questionnaire, however, and, for that reason, neither party filed a completed questionnaire with the assessor by June 1, 2004. Thereafter, the assessor imposed penalties on the plaintiffs pursuant to § 12-63c(d) for their failure to file the questionnaire by June 1, 2004. The penalties consisted of an increase in the assessed value of each property by 10 percent for the assessment year October 1, 2004. The penalty imposed on the property owned by PJM was based on the property's original assessed value as reflected on the grand list of October 1, 2004, instead of on the reduced assessed value applicable to the property on the grand list of October 1, 2004, under § 12-81(59).⁶ Both plaintiffs filed timely appeals to the board from the assessor's decisions, and the board subsequently denied the appeals.

The plaintiffs appealed from the board's denial of their appeals to the trial court. At trial, the assessor, William O'Brien, testified that income and expense reports for the plaintiffs' properties had been filed in the years 2003, 2005 and 2006. He also testified that a citywide revaluation had been conducted in 2003 and that, although there had been a revaluation of a class of commercial properties in 2004 that did not include the plaintiffs' properties, there had been no citywide revaluation of properties in 2004, 2005 or 2006. The assessor further testified that, even if the plaintiffs had submitted the requested income and expense reports after June 1, 2004, the penalties would have been imposed for their failure to file them by the deadline.

The trial court sustained the appeals and rendered judgments for the plaintiffs. The trial court first observed that an assessor is not limited to appraising real property only in a year of a citywide revaluation, as the plaintiffs contended, because General Statutes § 12-55⁷ permits assessors to conduct interim revaluations. E.g., DeSena v. Waterbury, 249 Conn. 63, 91, 731 A.2d 733 (1999). The court nonetheless concluded that, "unless the assessor demands ... income and expense figures from the property owner during the process of revaluation, for purposes of determining the present true and actual value of the property, there is no statutory obligation for the property owner to file such information annually." The court thus determined that, because the assessor had acknowledged at trial that there had been no citywide revaluation and no revaluation for the class of properties to which the plaintiffs' properties belonged in 2004, the information requested from the plaintiffs would not have been used for the purpose, set forth in the statute, of conducting a contemporaneous appraisal of the properties to determine their present value in 2004. The court specifically concluded that "[§]12-63c(a) is not a statute that authorizes an ongoing yearly submission, but rather it has the specific purpose of aiding an assessor in the process of conducting a `present' valuation of a taxpayer's property for assessment purposes." The court thus nullified the penalties imposed by the assessor, and this appeal followed.

"An appellate court's review of a trial court decision is circumscribed by the appropriate standard of review. As we have often stated: The scope of our appellate review depends upon the proper characterization of the rulings made by the trial court. To the extent that the trial court has made findings of fact, our review is limited to deciding whether such findings were clearly erroneous. When, however, the trial court draws conclusions of law, our review is plenary and we must decide whether its conclusions are legally and logically correct and find support in the facts that appear in the record." (Internal quotation marks omitted.) Torres v. Waterbury, 249 Conn. 110, 118-19, 733 A.2d 817 (1999).

In the present case, the defendant claims that the assessor had authority under § 12-63c to request the income and expense reports, thus raising an issue of statutory interpretation that requires our plenary review.⁸ See, e.g., Stone-Krete Construction, Inc. v. Eder, 280 Conn. 672, 676-77, 911 A.2d 300 (2006). "When construing a statute, [o]ur fundamental objective is to ascertain and give effect to the apparent intent 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, General Statutes § 1-2z directs us first to consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered." (Internal quotation marks omitted.) Id., at 677, 911 A.2d 300. "The test to determine ambiguity is whether the statute, when read in context, is susceptible to more than one reasonable interpretation." (Internal quotation marks omitted.) R.C. Equity Group, LLC v. Zoning Commission, 285 Conn. 240, 266, 939 A.2d 1122 (2008).

I

We begin with the defendant's claim that the assessor had authority to require the submission of income and expense reports for the 2004 tax year, in which a revaluation of the plaintiffs' properties did not occur. General Statutes § 12-63c(a) provides in relevant part: "In determining the present true and actual value in any town of real property used primarily for purposes of producing rental income, the assessor ... shall have power to require ... in the conduct of any appraisal of such property pursuant to the capitalization of net income method, as provided in section 12-63b, that the owner of such property annually submit or make available to the assessor not later than the first day of June, on a form provided by the assessor, the best available information disclosing the actual rental and rental-related...