Stepney Pond Estates, Ltd. v. Monroe

• Decision Date: 04 June 2002
• Docket Number: (SC 16656)
• Citation: 260 Conn. 406,797 A.2d 494
• Court: Connecticut Supreme Court
• Parties: STEPNEY POND ESTATES, LIMITED v. TOWN OF MONROE.

260 Conn. 406

797 A.2d 494

STEPNEY POND ESTATES, LIMITED v. TOWN OF MONROE.

(SC 16656)

Supreme Court of Connecticut.

Argued February 15, 2002.

Officially released June 4, 2002.

Sullivan, C. J., and Katz, Palmer, Vertefeuille and Zarella, Js. David O. Chittick, for the appellant (defendant).

Erskine D. McIntosh, for the appellee (plaintiff).

Opinion

SULLIVAN, C. J.

This appeal arises from a judgment by the trial court invalidating the imposition of a conveyance tax by the defendant, the town of Monroe, on a sale by the plaintiff, Stepney Pond Estates, Limited, of land classified as forest land pursuant to General Statutes § 12-107d.¹ The defendant claims on appeal that the trial court improperly concluded that (1) it had jurisdiction under General Statutes § 12-119² to hear the plaintiff's claim that the imposition of the tax pursuant to General Statutes § 12-504a (b)³ was illegal; and (2) the transfer of the property to the plaintiff by Richard T. Zimany and Alexandra T. Zimany, acting as executors of the property owner's estate, did not initiate a new ten year holding period for purposes § 12-504a (b) and, accordingly, that no conveyance tax was due on the plaintiff's subsequent sale of the property. The defendant also claims that the trial court improperly rejected its claim that, pursuant to General Statutes § 12-494,⁴ a conveyance tax of $1650 was due on the conveyance to the plaintiff. We conclude that the trial court properly determined that it had jurisdiction to hear the plaintiff's claim. We also conclude, albeit on different grounds, that the trial court properly determined that the transfer to the plaintiff did not initiate a new ten year holding period. Finally, we conclude that the plaintiff was not required to pay a conveyance tax on the transaction in which it acquired the property. Accordingly, we affirm the judgment of the trial court.

The record reveals the following relevant facts and procedural history. The land at issue consists of forty-seven acres out of a sixty-five acre property located at 362 Hattertown Road in the town of Monroe. On September 29, 1971, at the request of Alexander Zimany, the then owner of the property, the state forester classified the forty-seven acres as forest land pursuant to § 12-107d. Alexander A. Zimany died in 1983, leaving the entire property to his wife, Dorothy T. Zimany. Dorothy T. Zimany died on September 26, 1986, leaving her entire estate, including the property, to her children, Richard T. Zimany and Alexandra T. Zimany. The forty-seven acre tract had been continuously classified as forest land from the time it was originally classified until the time of Dorothy T. Zimany's death.

By an executor's deed dated December 21, 1990,⁵ Richard T. Zimany and Alexandra T. Zimany, acting as executors of their mother's estate, conveyed the entire sixty-five acre tract to the plaintiff for no consideration. The plaintiff corporation had been created by those individuals for the sole purpose of receiving title to the property, and they were its sole shareholders.

On February 21, 1991, the defendant's tax assessor notified the plaintiff that, if it wished to keep the forest classification on the property, it would have to notify the state forester that there had been a change of title. The plaintiff filed the appropriate forms and, on October 21, 1991, the bureau of forestry issued an amended certificate, the stated purpose of which was to change the owner of record from the estate of Alexander A. Zimany to the plaintiff. The defendant stipulated at trial that the property had not been declassified at any time and that the amended certificate of classification was a continuation of the original certificate issued in 1971.

On December 26, 1991, the defendant, through its tax assessor, Francis W. Kascak, recorded an assessor's lien on the defendant's land records indicating that the property had been acquired by the plaintiff on December 21, 1990, and classified as forest land on October 1, 1991.⁶ The tax assessor testified at trial that he recorded the lien because he did not consider the transfer to the plaintiff to be an exempt transaction under General Statutes § 12-504c (k)⁷ and, therefore, he believed that the transfer initiated a new ten year holding period for purposes of § 12-504a (b).⁸

In February, 1996, the plaintiff sold the property to Jan's Construction Company for $1,500,000. At that time, pursuant to § 12-504a (b) (5), the defendant imposed a conveyance tax in the amount of $58,056, representing 6 percent of the sale price. The plaintiff paid the tax under protest. The defendant subsequently discovered that the tax assessor incorrectly had determined that the plaintiff's acquisition date had been October 1, 1991 — the date as of which the department of forestry had changed the name of the title holder on the classification certification — rather than December 21, 1990 — the date that the property was transferred to the plaintiff. Accordingly, it determined that, pursuant to § 12-504a (b) (6), the correct tax rate on the conveyance to Jan's Construction Company should have been 5 percent for property sold within the sixth year of ownership, rather than the 6 percent previously assessed. The defendant also determined that, pursuant to § 12-494, a conveyance tax of $1650 should have been imposed on the transfer of the property to the plaintiff. Accordingly, the defendant forwarded a refund check in the amount of $8026 to the plaintiff, representing the difference between 6 percent and 5 percent of the sale price, less $1650. The plaintiff never negotiated the check.

On March 8, 1996, the plaintiff, citing the provisions of § 12-119, initiated this action, claiming on various grounds that the imposition of the tax was illegal. The defendant filed a motion to dismiss on the grounds that, pursuant to General Statutes § 12-504d,⁹ the exclusive remedy available to the plaintiff was an appeal pursuant to General Statutes §§ 12-111¹⁰ and 12-112.¹¹ The trial court, Ronan, J., denied the motion. The defendant renewed the motion to dismiss at the time of trial and, again, the trial court, Gormley J., denied it. A trial was held on June 4, 2001, and on June 27, 2001, the trial court issued its decision. The court concluded that, under Timber Trails Associates v. New Fairfield, 226 Conn. 407, 627 A.2d 932 (1993), the defendant had not been authorized to declassify the property for purposes of initiating a new ten year holding period under § 12-504a (b) at the time of the transfer to the plaintiff. The court also stated that, although it was inclined to agree with the plaintiff's claim that the transfer fell under the exception set forth at § 12-504c (k) pertaining to transfers as a result of death, it was not required to reach that claim in light of its conclusion based on Timber Trails Associates. Accordingly, the trial court ruled that, because, for purposes of § 12-504a (b), the date that the plaintiff "first caused such land to be . . . classified" was the date that the property originally had been classified in 1971, the land had not been sold within ten years of classification and the defendant had illegally imposed the conveyance tax. The court ordered the defendant to refund the $58,056 to the plaintiff. The trial court did not directly address the defendant's claim that $1650 was due pursuant to § 12-494,¹² but implicitly rejected the claim by ordering a full refund of the $58,056 without a setoff. The defendant appealed to the Appellate Court, and we granted the plaintiff's motion to transfer the appeal to this court pursuant to Practice Book § 65-2 and General Statutes § 51-199 (c).

The defendant claims on appeal that the trial court improperly denied its motion to dismiss for lack of jurisdiction. It also claims that the trial court improperly relied on this court's decision in Timber Trails Associates v. New Fairfield, supra, 226 Conn. 407, in support of its determination that the sale of the land by the plaintiff in 1996 was not subject to a conveyance tax pursuant to § 12-504a (b) (6) because the defendant had no authority to declassify the land. Finally, it claims that the trial court improperly rejected its claim that a conveyance tax of $1650 was due pursuant to § 12-494 on the transfer of the property to the plaintiff in 1990. With respect to the defendant's first claim, we conclude that the trial court properly determined that it had jurisdiction. With respect to the second claim, we affirm the judgment of the trial court on the alternate ground that the transfer to the plaintiff was an excepted transfer under § 12-504c (k). With respect to the third claim, we conclude that no conveyance tax was due from the plaintiff pursuant to § 12-494.

I

We first address the defendant's claim that the trial court had no jurisdiction to hear the plaintiff's claim pursuant to § 12-119 because, under § 12-504d, the exclusive remedy for a person aggrieved by the imposition of a conveyance tax pursuant to § 12-504a (b) is an appeal to the board of assessment appeals pursuant to §§ 12-111 and 12-112. We conclude that the trial court properly determined that it had jurisdiction over the claim.

"A determination regarding a trial court's subject matter jurisdiction is a question of law. When . . . 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." (Internal quotation marks omitted.) Doe v. Roe, 246 Conn. 652, 660, 717 A.2d 706 (1998). "Subject matter jurisdiction involves the authority of a court to adjudicate the type of controversy presented by the action before it. . . . A court does not truly lack subject matter jurisdiction if it has competence to entertain the action before it. . . . Once it is determined that a tribunal has authority or competence to decide the class of cases to which...