Christian Fellowship v. Town of Limington

• Decision Date: 28 April 2006
• Citation: 896 A.2d 287,2006 ME 44
• Parties: CHRISTIAN FELLOWSHIP AND RENEWAL CENTER v. TOWN OF LIMINGTON et al.
• Court: Maine Supreme Court

896 A.2d 287

2006 ME 44

CHRISTIAN FELLOWSHIP AND RENEWAL CENTER v. TOWN OF LIMINGTON et al.

Supreme Judicial Court of Maine.

Argued: April 27, 2005.

Reargued: January 25, 2006.

Decided: April 28, 2006.

COPYRIGHT MATERIAL OMITTED

Stephen C. Whiting, Esq. (orally), The Whiting Law Firm, P.A., Portland, for plaintiff.

Bruce A. McGlauflin, Esq. (orally), Petruccelli, Martin & Haddow, LLP, Portland, for defendant.

Panel: SAUFLEY, C.J., and CLIFFORD, DANA, ALEXANDER, CALKINS, LEVY, and SILVER, JJ.^*

Majority: CLIFFORD, DANA, ALEXANDER, and SILVER, JJ.

Dissent: SAUFLEY, C.J., CALKINS, and LEVY, JJ.

Dissent: SAUFLEY, C.J.

ALEXANDER, J.

[¶ 1] The Christian Fellowship and Renewal Center (CFRC) appeals from the judgment of the Superior Court (York County, Fritzsche, J.) affirming a decision of the York County Commissioners that denied CFRC's petition for a property tax exemption and abatement of taxes imposed upon most of its property in Limington. CFRC asserts that it is a benevolent and charitable organization and that its uses of its property qualify it for exemption from property taxation pursuant to 36 M.R.S. § 652(1)(A), (C) (2005). Because of errors in the County Commissioners' analysis of the governing law and because, as a matter of primary jurisdiction, the County Commissioners should have the opportunity to consider joint stipulations presented in the first instance on appeal to the Superior Court, we vacate and remand.

I. CASE HISTORY

[¶ 2] CFRC owns approximately ninety acres of land in Limington.¹ The land was acquired in the late 1980s. CFRC has been operating since approximately 1992. For 1996, the Town imposed real estate taxes of $2783.26 on CFRC's property. CFRC applied to the Town for an abatement of these taxes, contending that the property qualified for a benevolent and charitable exemption pursuant to 36 M.R.S. § 652(1)(A). The Town found that CFRC, as an organization, qualified for the exemption, approved the exemption request, and granted an abatement for CFRC's principal meeting center and three acres of surrounding land. However, the Town denied the exemption request and abatement for the remainder of CFRC's property, including a farmhouse, a caretaker's house, and approximately eighty-eight acres of land that was used for recreational purposes connected to activities at the meeting center.

[¶ 3] CFRC appealed the Town's decision to the York County Commissioners pursuant to 36 M.R.S. § 844 (2005). The County Commissioners denied CFRC's exemption and abatement request. Upon CFRC's appeal pursuant to M.R. Civ. P 80B, the Superior Court (Brennan, J.) affirmed the County Commissioners' decision. Upon CFRC's appeal to us, we vacated and remanded for further fact-findings. Christian Fellowship & Renewal Ctr. v. Town of Limington, 2001 ME 16, 769 A.2d 834.

[¶ 4] On remand, a further hearing was conducted before the County Commissioners, and the County Commissioners again issued a decision affirming the Town's denial of the exemption and abatement request. On an initial appeal of that decision, the Superior Court (Brennan J.) remanded for further fact-findings to resolve a number of issues raised by both parties as needing clarification. The County Commissioners then conducted a further hearing and, in January 2004, issued another decision with the same result.

[¶ 5] On the third appeal to the Superior Court, the parties identified several problems with the County Commissioners' January 2004 decision. With the approval of the Superior Court, the parties entered into a consent order that (1) determined that a number of the stated findings in the County Commissioners' decision were not findings; (2) indicated that other findings were findings; (3) clarified some findings and conclusions; and (4) most significantly, added a separate stipulation of the facts "identifying certain facts that are undisputed and based on the record."

[¶ 6] As a result, it has been stipulated that CFRC's exemption request was denied because the County Commissioners concluded that: (1) CFRC's purposes, which included use for religious purposes, did not meet a prerequisite for exemption "requiring use solely for exempt purposes"; (2) CFRC's uses of its real estate were not "solely for charitable and benevolent purposes"; and (3) CFRC failed to demonstrate that the uses of the property at issue provide a significant public benefit or service that government would otherwise provide, "therefore negating the requirement of quid pro quo."

[¶ 7] Relying on the consent agreement that substituted for the County Commissioners' decision and the new stipulations of fact, the Superior Court affirmed the denial of CFRC's exemption request. In its opinion, the Superior Court correctly stated that a religious organization such as CFRC can qualify for a benevolent and charitable exemption for its property if it is "organized and conducted exclusively for benevolent and charitable purposes." The court further observed:

If a religious organization performs an act of charity which also meets a need which government programs or services address, then an exemption is warranted. If the religious organization instead meets a religious need which government cannot and should not meet, then an exemption is not warranted.

[¶ 8] This statement appears to disqualify religious related charitable activities from receiving the exemption, because the government cannot engage in religious activities. With this statement, the Superior Court affirmed the County Commissioners' conclusion that because CFRC provided recreation, retreat, and renewal activities primarily for religiously-affiliated groups, CFRC did not provide a service that government might otherwise provide and accordingly did not qualify for the benevolent and charitable tax exemption. CFRC then brought this appeal.

II. THE AGREED STIPULATIONS

[¶ 9] The facts and conclusions stipulated by the parties in the Superior Court form the basis for the Superior Court's ruling in this matter.² The Town's brief to us recognizes that this stipulation "succinctly summarizes those facts supporting the [d]ecision that are most relevant to this appeal." Although fact-findings are normally reviewed deferentially, we review de novo for errors of law when the parties stipulate or do not dispute the factual findings. Trask v. Devlin, 2002 ME 10, ¶ 14, 788 A.2d 179, 182.

[¶ 10] The findings and conclusions of the York County Commissioners that the parties agree should be considered on this appeal indicated that:

1. CFRC was exempt from income taxation "as a non-profit corporation engaged in the ministry."

2. The "raw land" of the property was "used for retreat/renewal by affiliated religious organizations."

3. CFRC charged a "nominal rate" for use of the facility.

4. The persons using the caretaker's cottage are responsible for security and maintenance of the property, meal preparation for groups using the property, and collection and distribution of donated foods.

5. While CFRC provides a public benefit by distributing food to the needy, the property at issue is not used for this purpose, "therefore negating the requirement of quid pro quo."

6. CFRC's purposes, including service for religious activities did not meet the prerequisite for exemption "requiring use solely for exempt purposes."

7. CFRC failed to demonstrate that it provides a significant public benefit or a service that government would otherwise provide.

8. CFRC failed to demonstrate that its organization and the uses of its real estate was "solely for charitable and benevolent purposes."

[¶ 11] After recounting the history of CFRC's acquisition of the property, its taxation and applications for abatement, the stipulations adopted by CFRC and the Town stated as follows:

5. According to both its Articles of Incorporation and By-laws, CFRC's purposes are limited to providing religious, charitable and/or educational services within the meaning of § 501(c)(3) of the Internal Revenue Code of the United States.³ CFRC was exempt from federal income taxation under Title 26 U.S.C. § 501(c)(3) in 1996, and had been since March of 1989.

6. More specifically, in 1996 CFRC's purpose and reason for existence was to help fundamentalist, bible-believing churches and individuals both physically and spiritually, including but not limited to pastors and church members. It did this in two ways. First, it existed to provide food to needy families in northern York County. In 1996 it distributed food to needy families which CFRC estimated was worth $300,000.00 (retail value). And second, in 1996 CFRC existed to provide support to churches, church groups, religious organizations, pastors, and church members by making its real estate and facilities available to them for low rates.

7. In 1996 CFRC advertised that its real estate and facilities were available to: ... "all fundamental, evangelistic, Bible-believing churches and individuals for Christian-related activities." CFRC would consider allowing other Judeo-Christian groups to use its facilities as well, but none have used the facilities.

8. In 1996 CFRC used its main center building only in connection with its two purposes. It brought food to a room in that building from grocery stores, repackaged the food, and then distributed it to needy families. It also rented that building to numerous churches, church groups, religious organizations, and pastors.

9. In 1996, CFRC charged groups $6.00 per person per night's lodging, and $10.00 per person for three meals a day. If individuals could not afford to pay these rates, CFRC let those individuals come for free. The fees charged by CFRC did not cover its expenses ... which meant that CFRC had to rely upon charitable donations to meet the remainder of its expenses.

10. CFRC's gross revenues in 1996 were $28,191.50 ... $13,020.47 of which came from charitable donations; $14,726.90 of which came from renting its facilities to churches,...