Interlude, Inc. v. Skurat

• Decision Date: 01 January 2002
• Docket Number: (AC 17634)
• Citation: 67 Conn. App. 505,787 A.2d 631
• Court: Connecticut Court of Appeals
• Parties: INTERLUDE, INC. v. CATHERINE A. SKURAT, TAX COLLECTOR OF THE CITY OF DANBURY, ET AL.

67 Conn. App. 505

787 A.2d 631

INTERLUDE, INC. v. CATHERINE A. SKURAT, TAX COLLECTOR OF THE CITY OF DANBURY, ET AL.

(AC 17634)

Appellate Court of Connecticut.

Argued May 8, 2001.

Officially released January 1, 2002.

Lavery, C. J., and Schaller and Hennessy, Js. Monte E. Frank, with whom, on the brief, were Jonathan S. Bowman, Neil R. Marcus and David L. Grogins, for the appellant (plaintiff).

Peter N. Buzaid, assistant corporation counsel, for the appellees (defendants).

Opinion

LAVERY, C. J.

This matter is before us on remand from the Supreme Court. Previously, in Interlude, Inc. v. Skurat, 54 Conn. App. 284, 288-89, 734 A.2d 1045 (1999), rev'd, 253 Conn. 531, 754 A.2d 153 (2000), we concluded that action by the plaintiff, Interlude, Inc. (Interlude), seeking a refund for taxes it paid on real property was barred by the one year statute of limitations contained in General Statutes § 12-119.¹ The Supreme Court granted certification; Interlude, Inc. v. Skurat, 250 Conn. 927, 738 A.2d 657 (1999); on the issue of whether we had properly applied § 12-119 to this case. The Supreme Court held that "§ 12-119 is inapplicable to the present case because there is no issue regarding the assessed value of the property, and because Interlude did not own the property on the assessment date. Accordingly, the one year statute of limitations provided by § 12-119 is not applicable here and, therefore, does not bar Interlude's claim." Interlude, Inc. v. Skurat, 253 Conn. 531, 541, 754 A.2d 153 (2000). Accordingly, the Supreme Court reversed the judgment of this court and remanded the case to us for further proceedings. We reverse the judgment of the trial court.

We repeat here, for convenience, the stipulated facts set forth in our original decision, Interlude, Inc. v. Skurat, supra, 54 Conn. App. 285-86. "Interlude is a Connecticut nonprofit corporation that provides community based, integrated transitional housing, support and rehabilitation services to individuals who suffer from severe psychiatric disabilities. On September 24, 1992, Interlude took title to four properties located at 25, 27, 29 and 31 Grand Street in the city of Danbury, and recorded its deed on October 5, 1992. Each of the four properties consists of three condominium units; all but four of the units are used by Interlude for its clients for charitable purposes.

"At the time of Interlude's purchase of the property, the city exempted the property from taxation. The city notified Interlude of its exemption on July 2, 1993. The city thereafter billed Interlude for the remaining three quarters of the 1991 grand list and for five days of the 1992 grand list, which the city claims became due and payable on October 1, 1992, and January 1, April 1 and July 1, 1993.² Initially, Interlude did not pay these tax bills. On November 1, 1994, however, the city noticed a tax lien on the property. On January 15, 1995, Interlude paid to the city, under protest, the amount of $21,495.40 in taxes, interest and lien fees as well as an additional $2832.88 in attorney's fees to avoid a tax sale of the property. Interlude then demanded reimbursement of the moneys it had paid to the city under protest, which was denied by the city. Interlude thereafter filed suit, seeking a declaratory judgment as to the meaning of a nonprofit organization's exemption from taxation pursuant to General Statutes § 12-81b and Danbury Code § 18-20, and demanding reimbursement of all moneys it had paid to the city to avoid a tax sale. The defendants [the city and its collector of taxes] pleaded by way of a special defense that Interlude's claims were untimely and were not permitted under General Statutes §§ 12-89, 12-118 or 12-119. The trial court rendered judgment, granting Interlude a reimbursement `for any taxes it paid that accrued on or after [September 24, 1992, the date of acquisition].' The trial court did not, however, grant Interlude a reimbursement for any taxes it had paid that had accrued prior to its acquiring the property on September 24, 1992, which represents the bulk of the taxes Interlude had paid under protest."

Interlude claims on appeal that the trial court improperly construed and applied an exemption from taxation as allowed by General Statutes § 12-81b and as adopted by Danbury Code § 18-20. We agree with Interlude's claim and, accordingly, reverse the judgment of the trial court.

Prior to the trial of this matter, the parties entered into a stipulation of facts. One of the facts to which the parties stipulated is that "[t]he plaintiff ... is a Connecticut [nonprofit] corporation organized exclusively for charitable purposes." The defendants in fact granted Interlude an exemption from property taxation effective on the date that the deed was recorded, October 5, 1992. There is thus no controversy between the parties as to the general proposition that Interlude's use of the property at issue qualifies it for an exemption from taxation pursuant to General Statutes § 12-81 (7).³ The only issue is whether that exemption applies only to taxes assessed after the exempt entity acquired the property or to all taxes billed by the defendant city of Danbury after the exempt entity acquired the property.

General Statutes § 12-81b⁴ permits municipalities to provide, by ordinance, that the property tax exemption authorized by § 12-81 becomes effective as of the date of acquisition of the property to which the exemption applies and to provide for reimbursement of the tax-exempt organization for any tax paid by it for a period subsequent to the date of such acquisition. The defendant city did so by enacting Danbury Code § 18-20.⁵ The defendants agree that pursuant to that ordinance, Interlude is entitled to a refund of property taxes for the period of September 24 through October 5, 1992, but insist that Interlude must pay the property tax bills for the second, third and part of the fourth quarters of the 1991 grand list, which became due and payable on October 1, 1992, and January 1 and April 1, 1993.

The essence of the parties' disagreement is over the proper interpretation of § 12-81b; specifically, when the exemption provided for in the statute takes effect and the parameters of that exemption.

Before turning to an analysis of the varying interpretations contended for by the parties, we recite our well settled standard of review. "Statutory construction is a question of law and therefore our review is plenary.... [O]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature.... In seeking to discern that intent, we look to the words of the statute itself, to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter." (Internal quotation marks omitted.) State v. Andresen, 256 Conn. 313, 328, 773 A.2d 328 (2001), quoting State v. Murray, 254 Conn. 472, 487-88, 757 A.2d 578 (2000).

"Exemption from taxation is the equivalent of an appropriation of public funds, because the burden of the tax is lifted from the back of the potential taxpayer who is exempted and shifted to the backs of others.... This is true whether the relief from taxation be considered an exemption, as the legislature has described it, or results from a policy of considering... property not ratable for tax purposes." (Citation omitted.) Snyder v. Newtown, 147 Conn. 374, 386, 161 A.2d 770 (1960), appeal dismissed, 365 U.S. 299, 81 S. Ct. 692, 5 L. Ed. 2d 688 (1961). By themselves, §§ 12-81 and 12-89⁶ dictate that when a town prepares an assessment list after an entity exempt from taxation under any of the subdivisions of § 12-81 acquires property in the town, the town should omit that property from the tax rolls for the subsequent assessment. The legislature also enacted § 12-81b, however, which specifically authorizes municipalities, at their option, to provide by ordinance that the exemption would be effective as of the date of acquisition. The city exercised that option when it enacted Danbury Code § 18-20 containing the following key sentence: "The tax-exempt organization shall be reimbursed for any tax paid by it for a period subsequent to the date of such acquisition and shall also be reimbursed for any tax paid by the prior owner for a period subsequent to the date of such acquisition for which such tax-exempt organization reimbursed the prior owner upon the transfer of title to such property." (Emphasis added.)

The defendants' claim of entitlement to payment is based on their assertion that the tax bills for the second, third and fourth quarters based on the October, 1991 grand list relate to the annual period October, 1991, through September, 1992. Under that assertion, the second quarter bill was for the period of ownership from January through March, 1992; the third quarter bill was for the period of ownership from April through June, 1992; and the fourth quarter bill was for the period of ownership from July through September, 1992. Also under that assertion, those bills were, except for the last few days in September, 1992, for the period of ownership prior to Interlude's September 24, 1992 acquisition of the property and, therefore, prior to the effective date of the exemption. That assertion is, however, false. General Statutes § 12-142 provides in relevant part: "The legislative body of each municipality, upon approving any budget calling for the laying of a tax on property, shall determine whether such tax shall be due and payable in a single installment or in two semiannual installments or in four quarterly installments and shall, unless otherwise provided by law, designate the date or dates on which such installment or installments shall be due and payable, subject to the provisions of section 7-383...." (Emphasis added.) General Statutes § 7-383 provides in...