Daimlerchrysler Corp. v. Law

• Decision Date: 18 December 2007
• Docket Number: No. 17892.,17892.
• Citation: 284 Conn. 701,937 A.2d 675
• Court: Connecticut Supreme Court
• Parties: DAIMLERCHRYSLER CORPORATION v. Pamela LAW, Commissioner of Revenue Services.

937 A.2d 675

284 Conn. 701

DAIMLERCHRYSLER CORPORATION v. Pamela LAW, Commissioner of Revenue Services.

No. 17892.

Supreme Court of Connecticut.

Argued October 15, 2007.

Decided December 18, 2007.

Scott M. Erskine, pro hac vice, Rochester, MI, with whom was Catherine A. Stewart, for the appellant (plaintiff).

Gregory T. D'Auria, associate attorney general, with whom were Louis P. Bucari, Jr., Hartford, and, on the brief, Richard Blumenthal, attorney general, and Paul M. Scimonelli, assistant attorney general, for the appellee (defendant).

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

KATZ, J.

The plaintiff, DaimlerChrysler Corporation, appeals from the judgment of the trial court dismissing the plaintiff's appeal from the decision of the defendant, Pamela Law, the commissioner of revenue services, denying the plaintiff's claim for a refund of state sales tax it had paid to consumers pursuant to General Statutes § 42-179(d),¹ a part of what is commonly known as the state's lemon law. See General Statutes §§ 42-179 through 42-190. Specifically, the plaintiff claims that the trial court improperly determined that its claims were barred by sovereign immunity because it was not an aggrieved taxpayer authorized to appeal from the defendant's decision pursuant to General Statutes § 12-422,² and that the state has not waived its sovereign immunity under § 42-179(d) because that provision does not compel the defendant to reimburse manufacturers for refunds of sales tax made to consumers. The plaintiff further claims that the defense of sovereign immunity could not be interposed in a claim against the state for unconstitutional acts. We disagree with the plaintiff, and, accordingly, we affirm the judgment of the trial court.

The record reveals the following undisputed relevant facts and procedural history. During the period relevant to this appeal, the plaintiff was engaged in the business of manufacturing motor vehicles for sale and lease to consumers in Connecticut. More significantly for the purposes of this appeal, the plaintiff refunded state sales tax to certain consumers when it accepted for return their motor vehicles pursuant to § 42-179(d), which provides that a consumer may return a materially defective new motor vehicle that cannot be repaired to the manufacturer, which must then refund to the consumer the vehicle's contract price plus all collateral charges, including the sales tax previously paid by the consumer. Thereafter, on October 27, 2004, pursuant to General Statutes § 12-425,³ the plaintiff timely filed a claim with the defendant for a refund of sales and use taxes arising from the various refunds it had given to lemon law consumers. On or about February 22, 2005, the defendant issued notice to the plaintiff disallowing the tax refund. The plaintiff timely filed a written protest; however, on August 26, 2005, the defendant issued a final determination that the plaintiff was not entitled to relief pursuant to §§ 42-179 and 12-425. Specifically, the defendant concluded therein that "the vehicle sales in question were completed transactions properly subjected to sales tax in this state. Without statutory provisions allowing a refund of said tax, the [d]epartment [of revenue services] is without authority to approve this refund claim."

The plaintiff subsequently appealed, pursuant to § 12-422, from the defendant's decision to the trial court. The plaintiff asserted that, although it was not the retailer of the motor vehicles for which it sought a tax refund and, accordingly, was not legally obligated to, and therefore did not, charge, collect and remit sales tax to the defendant in connection with the sales of any of these motor vehicles, it nevertheless was a taxpayer entitled to reimbursement because it had refunded the sales tax pursuant to § 42-179(d). According to the plaintiff, the defendant's failure to reimburse it for the refunds it had paid pursuant to § 42-179(d) has resulted in, inter alia: a violation of the plaintiff's rights to due process and equal protection under the state and federal constitutions; an unconstitutional taking under the state constitution; and unjust enrichment. The plaintiff also alleged that it was entitled to the refund on various equitable grounds, including equitable subrogation.

The defendant moved to dismiss the appeal for lack of subject matter jurisdiction on several grounds. First, the defendant contended that the appeal was barred by the doctrine of sovereign immunity because the plaintiff was not "[a] taxpayer aggrieved because of any order, decision, determination or disallowance of the [defendant]"; General Statutes § 12-422; and therefore could not pursue an appeal under § 12-422, the statutory provision waiving sovereign immunity for such appeals. Rather, the plaintiff's obligation to reimburse consumers arose from the lemon law, specifically, § 42-179(d), which discloses no legislative authorization for a manufacturer to recover any of the contract price or collateral charges, such as sales tax, that had been refunded to the consumer. Therefore, according to the defendant, § 42-179(d) does not authorize the plaintiff's appeal expressly or implicitly. Second, the defendant contended that, even if § 42-179(d) did authorize the appeal, the plaintiff was neither statutorily aggrieved because it did not fall within the zone of interests protected by the statute, nor classically aggrieved because it did not have a specific personal and legal interest in the subject matter.⁴ Finally, the defendant contended that, to the extent that the plaintiff had alleged that it was equitably subrogated to the rights of the consumer under the lemon law, the plaintiff had no standing to seek a refund on the basis of that doctrine because the Connecticut Sales and Use Taxes Act, General Statutes § 12-406 et seq., does not expressly authorize subrogation.

The plaintiff opposed each of the grounds asserted in the defendant's motion to dismiss. Specifically, with respect to the issue of sovereign immunity, the plaintiff asserted that it is an aggrieved taxpayer entitled to file for a refund pursuant to §§ 12-422 and 12-425. The plaintiff contended that, if the trial court were to construe §§ 12-422 and 12-425 otherwise, and thereby deprive the plaintiff of the right to a refund of the sales tax that the defendant statutorily was required to make under § 42-179(d), then an unconstitutional deprivation of property would occur. The plaintiff further contended that sovereign immunity properly cannot be interposed as an affirmative defense when, as in this case, the claim is that, inter alia, an unconstitutional deprivation of property without due process and a violation of its right to equal protection will result if the refund is denied. Finally, the plaintiff contended that the facts alleged in its complaint, specifically, that it had refunded the sales tax pursuant to the statutory mandate of § 42-179(d), were sufficient to establish standing under both statutory and classical aggrievement.

In granting the defendant's motion to dismiss, the trial court determined that, although the plaintiff had asserted several theories of recovery, the dispositive issue was whether the defendant was immune from suit because of the doctrine of sovereign immunity. The trial court agreed with the defendant's contention that the plaintiff was not a taxpayer within the meaning of § 12-422, a sales and use taxes statute, but, rather, that it was a claimant seeking reimbursement from § 42-179(d), the lemon law, which does not authorize expressly or implicitly the plaintiff's claim for reimbursement. Additionally, the trial court rejected the plaintiff's contention that sovereign immunity could not be interposed as a defense when a claim is brought against the government for unconstitutional acts, noting that "[t]o overcome sovereign immunity, the [plaintiff was] required to clearly demonstrate an incursion upon constitutionally protected interests." (Internal quotation marks omitted.) Tuchman v. State, 89 Conn.App. 745, 755, 878 A.2d 384, cert. denied, 275 Conn. 920, 883 A.2d 1252 (2005). The court concluded that the plaintiff had failed to meet this burden because its claims were "founded on the [defendant's] refusal to refund state sales taxes to the plaintiff as provided for in §§ 12-422 and 12-425," and the plaintiff was not a taxpayer entitled to claim a refund under any of those sections of the sales and use taxes statutes. Accordingly, the trial court granted the defendant's motion to dismiss on the basis of sovereign immunity without reaching the issue of aggrievement. This appeal followed.⁵

The plaintiff contends that the trial court improperly determined that sovereign immunity was a bar to its appeal. Specifically, the plaintiff contends that the trial court acted improperly when it rejected its claims that the state authorized the present action against the defendant by the plaintiff as an aggrieved taxpayer pursuant to §§ 12-422 and 12-425, and that the doctrine of sovereign immunity does not bar the court's ability to consider the plaintiff's claims regarding the various constitutional ramifications of the refund denials. The plaintiff also contends that, on the basis of the allegations, the trial court should have concluded that it was classically and statutorily aggrieved. In response, the defendant reiterates her contention that the plaintiff was not a taxpayer, and therefore could not prevail, under § 12-422, the statutory provision waiving sovereign immunity. Rather, because the plaintiff's obligation to reimburse consumers arose from § 42-179(d), which does not authorize an appeal, the state did not waive sovereign immunity. Furthermore, the defendant maintains that the trial court properly determined that it was without jurisdiction to consider the plaintiff's claims for the alleged unconstitutional results ensuing from the refund denial. Fina...