Heffernan v. Slapin

• Court: Connecticut Supreme Court
• Writing for the Court: Before COTTER; COTTER
• Citation: Heffernan v. Slapin, 438 A.2d 1, 182 Conn. 40 (Conn. 1980)
• Decision Date: 05 August 1980
• Parties: Gerald J. HEFFERNAN, Tax Commissioner v. Kenneth J. SLAPIN, Executor (ESTATE OF Bessie Miller LYONS).

Page 1

438 A.2d 1

182 Conn. 40

Gerald J. HEFFERNAN, Tax Commissioner v. Kenneth J. SLAPIN, Executor (ESTATE OF Bessie Miller LYONS).

Supreme Court of Connecticut.

Argued June 5, 1980.

Decided Aug. 5, 1980.

Robert H. Rubin, Westport, for appellant (defendant).

Albert E. Sheary, Chief Inheritance Tax Atty., Hartford, with whom, on the brief, were Carl R. Ajello, Atty. Gen., and Seymour M. Alpert, First Asst. Commissioner of Revenue Services, Hartford, for appellee (plaintiff).

Before COTTER, C. J., and BOGDANSKI, PETERS, HEALEY and PARSKEY, JJ. COTTER, Chief Justice.

The sole issue presented by this appeal is whether an executor may utilize the hearing described in General Statutes § 12-367(b), in effect on February 17, 1973, to contest and alter his own appraisal of an asset reported on a duly filed succession tax return after the tax commissioner failed to object to the executor's reported appraisal pursuant to General Statutes § 12-359(b).

The parties stipulated to the facts and those pertinent to this appeal are: The decedent, Bessie Miller Lyons, was a settlor of a trust dated September 6, 1968, and involving certain real estate located in Norwalk; she died testate on February 17, 1973. In November of 1973, the executor of the decedent's estate filed the Connecticut succession tax return (form S-1), reporting the previously noted trust as item 1 on schedule 10. In the column of schedule 10 designated as "Total Value at Date of Death," the executor listed the value of the corpus of the trust as $549,300. In the adjacent column calling for concessions of taxability, the executor claimed the trust was not taxable. The tax commissioner objected to the executor's claim of nontaxability but did not object to the executor's valuation of the trust. After a hearing on the tax commissioner's objection, the Norwalk Probate Court entered a decree on May 21, 1975, holding the trust to be not taxable for Connecticut succession tax purposes. An appeal by the commissioner to the Superior Court, however, was sustained and the executor did not appeal the Superior Court's decree holding the trust to be taxable.

On June 3, 1976, the plaintiff tax commissioner computed the Connecticut succession tax based on the succession tax return as filed and included the trust estate, found taxable by the Superior Court, at the value of $549,300 placed on it by the defendant executor. The trust was added to other conceded taxable property to form a gross taxable estate of slightly over $1,000,000. On June 21, 1976, the defendant filed an application under General Statutes § 12-367 for a hearing upon the computation of the tax before the Norwalk Probate Court. The executor's claim, as set forth in his application, was that the value placed on the trust in the succession tax return was excessive and that a lower figure should be used in computing the tax on the trust. After a hearing, the Probate Court entered a decree reducing the value of the trust in question for purposes of the Connecticut succession tax from $549,300 to $387,000. The tax commissioner's appeal from this decree of the Probate Court was sustained by the Superior Court, and it is from that judgment that this appeal by the defendant executor is taken.

I

The present case involves solely the interpretation of §§ 12-359(a), 12-359(b) and 12-367(b) of the General Statutes in effect on February 17, 1973, the date of the decedent's death. Thus, we first examine the statutory scheme in these provisions before reviewing the arguments underlying the defendant's claim that the trial court erred in sustaining the tax commissioner's appeal. See Hopkins v. Pac, 180 Conn. 474, 477, 429 A.2d 952; Bahre v. Hogbloom, 162 Conn. 549, 554-55, 295 A.2d 547.

Section 12-359(a) of the General Statutes ¹ sets forth what shall be included on the succession tax return. Section 12-359(b) delineates the method of objecting to valuations and concessions of taxability of individual items set forth in the succession tax return and sets out the scope of the Probate Court hearing and determination on the objections. ² Section 12-359(b) further provides the method of determining the gross taxable estate upon which the tax computation shall be based. ³ Section 12-367(b) in 1973 provided for an application for a hearing to challenge the tax commissioner's computation of the succession tax. ⁴

II

The defendant executor argues initially that, on its face, there is no limitation regarding the issues which may be heard in a hearing held pursuant to § 12-367(b) and that he could raise the issue of valuation as he did before the Probate Court. This argument ignores our cardinal rule concerning statutory construction, viz.: "In the construction of ... statutes, words and phrases shall be construed according to the commonly approved usage of the language." General Statutes § 1-1(a). See Robinson v. Unemployment Security Board of Review, 181 Conn. 1, 7, 434 A.2d 293; Connecticut Light & Power Co. v. Costle, 179 Conn. 415, 423, 426 A.2d 1324. Section 12-367(b), whose words the defendant executor does not quote or rely on in making his claim, fails to mention or allude to valuation, concessions of taxability or the determination of the gross estate already fixed under § 12-359. Under § 12-367, a hearing is restricted to questions on the tax's "computation," an expression which is repeatedly iterated in the provision. "Compute" commonly means "to determine or ascertain esp. by mathematical means: arrive at an answer to or sum for ... vi: to make calculations." Webster, Third New International Dictionary. See also Goddard v. Shapiro Bros. Shoe Co., 234 A.2d 326, 330 (Me.) (computation is the act or process of computing; calculation, reckoning); Fisher v. Bethesda Discount Corp., 221 Md. 271, 276, 157 A.2d 265 (same); Mudd v. McColgan, 174 P.2d 646, 651 (Cal.App.) (determination of a deficiency in an income tax was a "computation" of a tax within the statute). Thus, the hearing appears definitely to be restricted to questions such as whether the mathematics are correct or whether a full exemption was granted. Nothing suggests that the fiduciary has an opportunity under § 12-367(b) to question his own reported valuations.

Nonetheless, although words do not become ambiguous simply because lawyers or laymen contend for different meanings and courts do not torture words to import ambiguity where the ordinary meaning leaves no room for it; see, e.g., Collins v. Sears, Roebuck & Co., 164 Conn. 369, 374, 321 A.2d 444; because the defendant contends that as a whole and as applied to the present facts the statutory scheme created by §§ 12-359 and 12-367 is confusing and ambiguous, we review his other arguments to see whether any ambiguity can reasonably be imputed to these provisions. Our further review is also impelled by the principle that statutes are to be interpreted with regard to other relevant statutes because the legislature is presumed to have created a consistent body of law. State v. Murtha, 179 Conn. 463, 466, 427 A.2d 807; Doe v. Institute of Living, Inc., 175 Conn. 49, 58, 392 A.2d 491.

A

Initially in support of his claim that § 12-367(b) permits the question of valuation to be raised at a hearing before a Probate Court, the defendant contends that the entry of $549,300 on schedule 10 of the succession tax return in question was only a pro forma informational figure which had no legal significance and was not binding on the defendant. Not only does this argument disregard the clear language of § 12-359(a) and the defendant's actions in conformity with the directions on the succession tax return itself, but it also fails to take into account the significance of the entry of valuation for the tax commissioner under the statutory framework created by §§ 12-359(a) and (b).

The succession tax return utilized was in conformity with the mandatory language of § 12-359(a), and schedule 10 of that return (where "Transfers During Decedent's Lifetime" are reported) has a column for the description of the asset, another for the valuation of the asset, and a third column for concessions of taxability concerning the asset. Thus, the succession tax return statute and the succession tax return itself clearly indicate that an asset must be reported at its fair market value, regardless of concessions of taxability which form a distinctly separate issue. As the stipulated facts reveal, the defendant executor followed both the requirements of § 12-359(a) and the succession tax return prepared and disseminated in furtherance of the statutory directions. Finally, as the defendant himself conceded at oral argument, when the tax commissioner raised questions of taxability concerning the entries on the succession tax return under § 12-359(b), he was also at that time bound to object to questions of valuation or forfeit the opportunity to challenge the executor's valuation. In light of the foregoing, the defendant's argument is unpersuasive that the entry of valuation on the succession tax return before the issue of taxability was finally determined was merely a pro forma matter.

B

In conformity with the initial language of § 12-359(b); see footnote 2; the tax commissioner objected to the defendant's claim of nontaxability for the trust in question, but did not object to the defendant's reported appraisal of fair market value for the trust. Although the Superior Court sustained the tax commissioner's objection and held the trust to be taxable in its entirety and the defendant did not appeal to this court, he nonetheless argues that if a hearing is not permitted on valuation after the Superior Court's determination of taxability, § 12-359(b) does not permit the addition of the trust to the decedent's taxable estate. The defendant's contention is premised on the fact that the three methods of determining the gross taxable estate for purposes of tax computation as described in § 12-359(b); see footnote 3; do not...