DeSena v. Waterbury, (SC 15980)

• Decision Date: 01 June 1999
• Docket Number: (SC 15980)
• Citation: 731 A.2d 733,249 Conn. 63
• Court: Connecticut Supreme Court
• Parties: ALLEN V. DESENA v. CITY OF WATERBURY

249 Conn. 63

731 A.2d 733

ALLEN V. DESENA v. CITY OF WATERBURY

(SC 15980)

Supreme Court of Connecticut.

Argued February 16, 1999.

Officially released June 1, 1999.

Callahan, C. J., and Borden, Berdon, Katz, Palmer, McDonald and Peters, Js. Charles E. Oman III, assistant corporation counsel, for the appellant (defendant).

Anthony O. Famiglietti, for the appellee (plaintiff).

Mary-Michelle U. Hirschoff filed a brief for the Connecticut Conference of Municipalities as amicus curiae.

Opinion

KATZ, J.

At the time of the circumstances that gave rise to this appeal, General Statutes (Rev. to 1995) § 12-62¹ required, inter alia, municipal assessors to conduct revaluations, for taxation purposes, of all of the real property in their respective municipalities on a decennial basis.² Although the statutory revaluation scheme provides for only two limited circumstances under which an interim revaluation is mandated; see footnotes 14 and 15 of this opinion; the plaintiff, Allen V. DeSena, asserts that certain language in this court's opinion in Ralston Purina Co. v. Board of Tax Review, 203 Conn. 425, 435-36, 525 A.2d 91 (1987), served as a judicial recognition of additional special circumstances that compelled the defendant, the city of Waterbury, to conduct an interim revaluation. The principal issue in this appeal is whether these additional special circumstances can be relied upon as the basis for a mandatory interim revaluation. We conclude that they cannot.

Additionally, this appeal requires us to consider whether General Statutes (Rev. to 1995) §12-55,³ which permits municipal assessors to make adjustments to assessment values of real property in order to equalize the tax lists under certain conditions, compels the defendant's assessor to make such adjustments. We conclude that it does not.

The record reveals the following facts. In 1980, as part of a decennial revaluation required by § 12-62; see footnote 1 of this opinion; the defendant's assessor assessed real property located at 21 Cliff Street in Waterbury (property). On the property were two buildings: a three car garage, and a building of approximately 8153 square feet that had previously been used as a convalescent hospital. The property's assessed value on the grand list of October 1, 1980, was $406,000, a valuation that was based on a fair market value of $580,000. In July, 1987, the plaintiff, who had been a nursing home administrator for twenty-five years, purchased the property. At that time, the larger of the buildings on the property was licensed by the state as a skilled nursing facility. When the plaintiff purchased the property, he was "grandfathered" into provisions of state law that allowed him to operate a skilled nursing facility at the property in its then current condition.⁴

In 1992 or 1993, the plaintiff began efforts to sell the business on the property. At that time, he was leasing the property to an operating entity, Mattatuck Extended Care Facility, of which the plaintiff was owner, chief administrator and an officer. Under the terms of the lease agreement, the plaintiff received a monthly rent of $19,000, which, according to the plaintiff, was based upon his monthly mortgage payment obligation of approximately $10,000.

The plaintiff testified that his decision to sell the business was based on "market conditions" that had "slowly developed" since 1987.⁵ The plaintiffs efforts to sell the business were unsuccessful until 1995, when the state passed legislation that allowed him to sell the facility's license to a buyer who would be free to use the license at another physical location.⁶ On March 31, 1996, the plaintiff entered into a termination agreement in which he agreed to sell the property and its license to Athena Health Care (Athena), another nursing home operator, for $1,650,000. As part of the transaction, the plaintiff took back a mortgage on the property in the amount of $150,000. With a portion of the proceeds, the plaintiff paid off the preexisting mortgage on the property, which totaled in excess of $1,000,000. Thereafter, Athena's mortgage went into default and the plaintiff foreclosed in 1996. As a result of the foreclosure judgment, title vested once again in the plaintiff. Although the plaintiff thereby became the owner of the property, he did not reacquire the license that would permit a skilled nursing facility to be operated on the premises.⁷

Since reacquiring the property through foreclosure, the plaintiff has tried unsuccessfully to sell it. Each year, from 1987 through 1995, the defendant's assessor determined the assessed value of the property to be $406,000, the assessed value placed on the property in the 1980 revaluation. The plaintiff estimated, however, that the value of the property was below $150,000, and his appraiser valued it at $80,000 as of March 18, 1997. The plaintiff's appraiser based his appraisal on the property's "highest and best use compatible with its surroundings," that of a multifamily residence.

The plaintiff appealed the 1995 and 1996 assessments to the defendant's board of assessment appeals, which denied his appeal on April 22, 1997. Pursuant to General Statutes § 12-117a,⁸ the plaintiff appealed from the board's decision to the trial court, claiming that the assessments were "greatly excessive, disproportionate and unlawful." According to the trial court, the testimony presented at trial was a "battle of the experts," with the plaintiffs appraiser testifying that the property's fair market value was $80,000, which would amount to an assessed value of $56,000, and the defendant's appraiser testifying that the then current assessment was based on the 1980 figures for fair market value and assessed value, which, according to the defendant's appraiser, were "in the ballpark."

In its memorandum of decision, issued May 7, 1998, the trial court acknowledged this court's holding in Ralston Purina Co. v. Board of Tax Review, supra, 203 Conn. 441, that a taxpayer is not entitled to a revaluation of property between decennial revaluations based solely upon fluctuations in market conditions. According to the trial court, however, "the issue as to whether real estate assessments can be adjusted in interim years between decennial evaluations was answered in the affirmative in Ralston [Purina Co.] ...." Undoubtedly relying on language in Ralston Purina Co. that stated that "the defendant concedes that, under certain circumstances, such as the destruction or expansion of property, a substantial change in its use or zoning classification, or a decision by the taxpayer to go out of business, it would be required to conduct an interim revaluation of property"; id., 435-36; the trial court regarded these special circumstances as supporting interim relief. The court then determined that the present case fell under two of the three exceptions set forth in Ralston Purina Co.—that is, a substantial change in the use of the property, and the taxpayer's decision to go out of business. Accordingly, the court ruled in favor of the plaintiff with respect to the grand list of 1996, reducing the assessed value of the property from $406,000 to $56,000.⁹ The defendant appealed to the Appellate Court from the judgment of the trial court and, pursuant to Practice Book § 65-1 and General Statutes § 51-199 (c), we transferred the appeal to this court.

The defendant makes two claims on appeal. First, it claims that the trial court improperly relied on dictum in our opinion in Ralston Purina Co. v. Board of Tax Review, supra, 203 Conn. 435-36. Specifically, the defendant asserts that the special circumstances mentioned therein were not part of the court's holding and, therefore, are not recognized exceptions to § 12-62. Second, the defendant argues that § 12-55 is permissive rather than mandatory and, therefore, may not be used to compel the assessor to make an interim revaluation. We agree with the defendant.¹⁰ Accordingly, we reverse the judgment of the trial court.

I

Before considering the merits of the parties' arguments, we set forth the applicable standard of review. "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. Practice Book § [60-5]; United Illuminating Co. v. Groppo, 220 Conn. 749, 752, 601 A.2d 1005 (1992); Zachs v. Groppo, 207 Conn. 683, 689, 542 A.2d 1145 (1988); Pandolphe's Auto Parts, Inc. v. Manchester, 181 Conn. 217, 221-22, 435 A.2d 24 (1980)." (Internal quotation marks omitted.) SLI International Corp. v. Crystal, 236 Conn. 156, 163, 671 A.2d 813 (1996). In this case, the trial court made conclusions of law based upon its interpretation of this court's precedent. Our review, therefore, is plenary.

II

A

The defendant first claims that the trial court improperly concluded that the plaintiff was entitled to an interim revaluation of the property in accordance with dictum contained in Ralston Purina Co. v. Board of Tax Review, supra, 203 Conn. 435-36. In contrast, the plaintiff argues that the language at issue in Ralston Purina Co., although dictum, was a judicial recognition of nonstatutory special circumstances that can serve as a basis for compelling an interim revaluation of property, and, therefore, the trial court acted properly in relying on Ralston Purina Co. in its holding. We agree with the defendant.¹¹ Before turning our attention to the specific language at issue in Ralston Purina Co., however, it is instructive to examine the statutory scheme regarding revaluations of property, as well as the relevant case law interpreting the statutes. As we...