Saint John's Cmtys., Inc. v. City of Milwaukee
| Citation | 399 Wis.2d 729,2021 WI App 77,967 N.W.2d 151 |
| Decision Date | 05 October 2021 |
| Docket Number | Appeal No. 2020AP1696 |
| Parties | SAINT JOHN'S COMMUNITIES, INC., Plaintiff-Respondent, v. CITY OF MILWAUKEE, Defendant-Appellant. |
| Court | Court of Appeals of Wisconsin |
On behalf of the defendant-appellant, the cause was submitted on the briefs of Tearman Spencer, city attorney, and Allison N. Flanagan, assistant city attorney.
On behalf of the plaintiff-respondent, the cause was submitted on the brief of Alan Marcuvitz and Andrea Roschke of von Briesen & Roper, S.C. of Milwaukee.
Before Brash, C.J., Donald, P.J., and White, J.
¶1 The City of Milwaukee appeals an order granting summary judgment in favor of Saint John's Communities, Inc., relating to a property tax exemption dispute. Saint John's constructed a new high-rise tower on property it owns that had previously been granted an exemption. The City assessed property tax on the new tower for 2019, on the ground that Saint John's did not timely submit a property tax exemption application for the newly constructed tower as required under the statutes. Saint John's challenged the assessment of the tax, and the circuit court agreed with Saint John's that it was not required to file a new application in order to continue the property tax exemption that already existed on its property. The circuit court therefore ordered that the property taxes paid by Saint John's for 2019 be refunded, with interest.
¶2 We, however, conclude that Saint John's claim filed with the City was statutorily deficient, and therefore this action should have been dismissed. Furthermore, Saint John's claim of a violation of the uniformity clause of the Wisconsin Constitution also fails based on that deficiency. Accordingly, we reverse the order of the circuit court, and remand this matter for the entry of an order dismissing Saint John's complaint against the City in its entirety.1
¶3 Saint John's is a Wisconsin corporation, qualifying as an I.R.C. § 501(c)(3) entity. It is the owner of property located on North Prospect Avenue in Milwaukee, identified by a single tax key number (the "Property"). The Property is used as an "age restricted continuing care retirement community," and is licensed by the Wisconsin Department of Health Services (DHS) pursuant to WIS. STAT . ch. 50.
¶4 According to the president of Saint John's, Renee Anderson, Saint John's applied for, and received, exemption from real estate taxes for the Property in 2010. Anderson further averred that the Property was designated as fully exempt by the City from 2010 through 2018. However, the chief assessor for the City, Peter Bronek, averred that he requested that Saint John's submit an exemption application in 2016. That application indicated that the statutory basis for the exemption was WIS. STAT . § 70.11(4)(a)1., which allows for exemption from real estate taxes on property that is owned by a nonprofit entity and operated as a facility registered under ch. 50, "including benevolent nursing homes[.]" See § 70.11(4)(a)1. Bronek determined at that time that the Property continued to qualify for exemption.
¶5 In 2018, Saint John's began constructing a twenty-one story residential tower on the Property in an area that had previously been used as a parking lot. Construction was ongoing for most of 2019, with occupancy set for January 2020. At that point, residents would be transferred from the old buildings, which would then be demolished.
¶6 In September 2019, the City Assessor's office contacted Saint John's to inquire about the new tower on the Property, and requested that Saint John's complete a property exemption application for the new tower indicating why it qualified for exemption. Saint John's completed the application for the new tower in September 2019.
¶7 As explained by Bronek in his affidavit, all property is assessed as of January 1 of the taxable year, see WIS. STAT . § 70.10, and a property owner seeking exemption must submit an exemption application by March 1 of the taxable year, see WIS. STAT . § 70.11. However, if a property "was exempt for the previous year and its use, occupancy or ownership did not change in a way that makes it taxable," it will remain exempt without a new application being submitted. Id. On the other hand, "if the property did not exist in the previous year," an exemption application is required to be submitted by March 1. Id.
¶8 In reviewing Saint John's exemption application, Bronek observed that, in contrast to its 2016 application, Saint John's indicated in its 2019 application for the new tower that the statutory basis for exemption was WIS. STAT . § 70.11(4d), which allows for the exemption of property "owned by a nonprofit entity that is a benevolent association and used as a retirement home for the aged[.]" See id. This subsection has different requirements for exemption than those set forth in § 70.11(4)(a)1., which Saint John's had cited in its 2016 application. In particular, § 70.11(4d) does not include a requirement for licensure under WIS. STAT . ch. 50, but it does include limitations relating to the fair market value of the property for which exemption is being sought. See § 70.11(4d). Bronek further averred that Saint John's website included an advertisement for "luxury retirement units" in the new tower, noting the size of the units, the amenities included, and their location overlooking Lake Michigan.
¶9 The City determined that the newly constructed tower was a new use of the Property, and therefore presumed to be taxable, pursuant to WIS. STAT . § 70.109. As a result, because Saint John's did not submit its exemption application for the 2019 tax year until September—after the March 1 statutory deadline—the Board of Assessors determined that Saint John's new tower was taxable for 2019.
¶10 Saint John's filed a claim with the City on November 8, 2019, challenging the assessment. The City advised Saint John's that its claim was premature, because at that point the City had neither levied nor collected the challenged tax from Saint John's as required under WIS. STAT . § 74.35(2)(a).2 Saint John's then filed a second claim on December 5, 2019, which the City advised Saint John's was still premature; although the tax had been levied by that time, Saint John's had not yet paid it.
¶11 Furthermore, the City noted that even if Saint John's claim was not deficient, it had failed to timely file an exemption request by March 1, 2019 for the new tower, as required under WIS. STAT . § 70.11. Saint John's argued that a new exemption application was not required under that statute because the Property had been exempt from property taxation in 2018, and the occupancy and ownership of the Property had not changed "in any way that made the Property taxable for 2019[.]" The City ultimately denied Saint John's claim on January 21, 2020.
¶12 Saint John's then filed the underlying action on January 22, 2020. The City filed a motion to dismiss on the grounds that Saint John's underlying claim submitted to the City was procedurally deficient, in that such a claim cannot be made until the purportedly unlawful tax has been timely paid, see WIS. STAT . § 74.35(5)(c) ; Saint John's did not pay the challenged 2019 taxes until January 22, 2020, when it commenced its action in circuit court.
¶13 Saint John's, in turn, filed a motion for partial summary judgment. It again argued that the statutory requirement to file a new tax exemption application did not apply because the Property was already previously exempt, and there was no change in the use of the Property as a continuing care retirement facility.
¶14 The circuit court denied the City's motion to dismiss and granted Saint John's motion for partial summary judgment. The court rejected the City's argument that Saint John's claim was procedurally deficient pursuant to WIS. STAT . § 74.35(5)(c), regarding the requirement for both the levy and collection of the challenged tax, noting that Saint John's had timely paid the first installment of its 2019 property taxes on the Property prior to commencing its action with the circuit court. The court further found that the use of the Property had not changed, and thus because the Property had previously been exempt, a new exemption application had not been necessary. Therefore, the court held that the Property was fully exempt from property taxation for 2019, and ordered that the amount in 2019 tax paid by Saint John's be refunded, with interest. This appeal follows.3
¶15 Our analysis focuses on the City's argument that the circuit court erred in denying its motion to dismiss. The City's motion to dismiss argued that Saint John's had failed to state a claim upon which relief could be granted, due to the claim's procedural deficiencies. "The purpose of a motion to dismiss for failure to state a claim is to test the legal sufficiency of the complaint." Hermann v. Town of Delavan , 215 Wis. 2d 370, 378, 572 N.W.2d 855 (1998). "Whether a complaint properly pleads a cause of action is a question of law" which we review independently, "without deference to the decisions of the lower court[ ]." Id.
¶16 The City's argument is based on the language of the requirements set forth in WIS. STAT . § 74.35 for the "[r]ecovery of unlawful taxes." This argument requires that we conduct a statutory interpretation analysis. "[T]he purpose of statutory interpretation is to determine what the statute means so that it may be given its full, proper, and intended effect." State ex rel. Kalal v. Circuit Ct. for Dane Cnty. , 2004 WI 58, ¶44, 271 Wis. 2d 633, 681 N.W.2d 110. Statutory interpretation presents a question of law that this court reviews de novo. DOR v. River City Refuse Removal, Inc. , 2007 WI 27, ¶26, 299 Wis. 2d 561, 729 N.W.2d 396.
¶17 According to WIS. STAT . § 74.35(1), an "unlawful tax" is "a general property tax with respect to which one or more errors specified in [ WIS. STAT . §] 74.33(1)(a) to (f) were...
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Saint John's Cmtys., Inc. v. City of Milwaukee
...KINGSLAND ZIEGLER, C.J. ¶1 This is a review of a published decision of the court of appeals, Saint John's Communities, Inc. v. City of Milwaukee, 2021 WI App 77, 399 Wis. 2d 729, 967 N.W.2d 151, reversing the Milwaukee County circuit court's1 order denying the City of Milwaukee's ("City") m......