Town of Canton v. Cadle Props. of Conn., Inc.

• Decision Date: 19 May 2015
• Docket Number: No. 19225.,19225.
• Court: Connecticut Supreme Court
• Parties: TOWN OF CANTON v. CADLE PROPERTIES OF CONNECTICUT, INC.

316 Conn. 851

114 A.3d 1191

TOWN OF CANTON

v.CADLE PROPERTIES OF CONNECTICUT, INC.

No. 19225.

Supreme Court of Connecticut.

Argued Jan. 6, 2015.

Decided May 19, 2015.

Daniel J. Krisch, with whom was Kenneth R. Slater, Jr., Hartford, for the appellant (plaintiff).

Eric H. Rothauser, with whom were Jay B. Weintraub and, on the brief, John L. Bonee III, West Hartford, for the appellee (intervening defendant).

ROGERS, C.J., and PALMER, ZARELLA, EVELEIGH, McDONALD, ESPINOSA and VERTEFEUILLE, Js.

Opinion

McDONALD, J.

This certified appeal requires us to consider whether General Statutes § 12–163a, under which a court may appoint a receiver of rents when real property taxes due to a municipality are delinquent, authorizes the receiver to: (1) evict a tenant from the property in the event of a default; (2) lease the property to a new tenant; and (3) use legal process to collect back rent allegedly due. The Appellate Court concluded that none of these acts falls within the scope of a receiver's authority under the statute. See Canton v. Cadle Properties of Connecticut, Inc., 145 Conn.App. 438, 450–58, 77 A.3d 144 (2013). We conclude that § 12–163a does authorize a receiver to use legal process to collect rent due prior to the date of the receiver's appointment, but we agree with the Appellate Court's conclusions in all other respects. Accordingly, we affirm in part and reverse in part the Appellate Court's judgment, which had reversed in part the judgment of the trial court insofar as that court had modified the receivership orders to confer authority to undertake the three aforementioned actions.

The record reveals the following undisputed facts and procedural history. The defendant, Cadle Properties of Connecticut, Inc. (Cadle), is the owner of real property in Canton (property).¹ After Cadle effectively abandoned the property, which is allegedly environmentally contaminated, the plaintiff, the town of Canton (town), filed a petition seeking the appointment of a receiver of rents pursuant to § 12–163a. The petition alleged that Cadle had failed to pay real property taxes due to the town in the amount of $362,788.59, plus interest and lien penalties, for a total amount due of $884,263.04. The petition further alleged that, during all relevant periods, the property was occupied by a Volkswagen dealership owned by M & S Associates, LLC (tenant), which had a legal obligation to pay rent to Cadle.² The court, having found that Cadle owed the town taxes in the amount of $358,220.04, granted the petition to appoint the receiver, and issued orders authorizing the receiver to collect all rents or use and occupancy payments due with respect to the property.

After the receiver served the tenant with a notice to quit possession of the property on the ground of nonpayment of rent, the tenant filed a motion to intervene in the town's action against Cadle in order to challenge the receiver's authority to take legal action against it. Shortly thereafter, the receiver filed a motion to modify the receivership order to authorize it to pursue an eviction of the tenant in the event of nonpayment of rent, to lease the property to a new tenant, and to use all legal process to collect back rent. Prior to acting on the tenant's pending motion to intervene, the court granted the receiver's motion to modify without objection.

Subsequently, the trial court granted the tenant's motion to intervene in the action. The tenant then filed a motion to remove the receiver, asserting, inter alia, that the receiver had exceeded its authority under § 12–163a by serving it with a notice to quit and by bringing an action to collect back taxes and prior rents. The court denied the motion for removal, reasoning that, because the receiver acts in the owner's stead, it would not be constrained from collecting back rent or evicting a nonpaying tenant through legal process. The court noted, however, that its order did not authorize the receiver to collect any back taxes owed by the tenant.³

On appeal to the Appellate Court, the tenant claimed, inter alia, that the trial court improperly had denied its motion to remove the receiver because the court exceeded its authority under § 12–163a when it modified its order to allow the receiver to evict the tenant, to secure a new tenant, and to bring an action against the tenant for all rents due, including back rents allegedly owed. Id., at 450, 77 A.3d 144. The Appellate Court agreed. That court concluded that the receiver's responsibilities are prescribed in § 12–163a and cannot be expanded by the trial court. Id., at 454, 77 A.3d 144. Those duties, according to the Appellate Court, are limited to collecting rents that in turn are to be used to pay taxes and utilities due after the date of the receiver's appointment. Id., at 455–58, 77 A.3d 144. Although the Appellate Court concluded that the statute was ambiguous as to the receiver's authority to collect back rent, it reasoned that a construction limiting the collection of rent to that which is due after the receiver's appointment was more harmonious with the receiver's authority to pay only those taxes and utilities due after the date of the receiver's appointment. Id., at 457–58, 77 A.3d 144. Accordingly, the Appellate Court reversed the trial court's judgment insofar as it had granted the receiver's motion to modify the receivership orders, but it affirmed the judgment insofar as it had denied the tenant's motion to remove the receiver. Id., at 458, 77 A.3d 144. The town's certified appeal to this court followed. See Canton v. Cadle Properties of Connecticut, Inc., 310 Conn. 941, 79 A.3d 893 (2013).

The scope of a receiver's authority under § 12–163a is a question of statutory construction subject to plenary review and well established principles. See General Statutes § 1–2z (setting forth plain meaning rule); Teresa T. v. Ragaglia, 272 Conn. 734, 742, 865 A.2d 428 (2005) (“[w]hen a statute is not plain and unambiguous, we also seek interpretive guidance from the legislative history of the statute and the circumstances surrounding its enactment, the legislative policy it was designed to implement, the statute's relationship to existing legislation and common-law principles governing the same general subject matter”).

Section 12–163a (a) sets forth the circumstances under which a municipality may seek the appointment of a receiver of rents and the authority vested in the receiver upon such appointment. That subsection provides in relevant part: “Any municipality may petition the Superior Court or a judge thereof, for appointment of a receiver of the rents or payments for use and occupancy for any property for which the owner, agent, lessor or manager is delinquent in the payment of real property taxes.... The receiver appointed by the court shall collect all rents or payments for use and occupancy forthcoming from the occupants of the building in question in place of the owner, agent, lessor or manager. The receiver shall make payments from such rents or payments for use and occupancy, first for taxes due on and after the date of his appointment and then for electric, gas, telephone, water or heating oil supplied on and after such date. The owner, agent, lessor or manager shall be liable for such reasonable fees and costs determined by the court to be due the receiver, which fees and costs may be recovered from the rents or payments for use and occupancy under the control of the receiver, provided no such fees or costs shall be recovered until after payment for current taxes, electric, gas, telephone and water service and heating oil deliveries has been made. The owner, agent, lessor or manager shall be liable to the petitioner for reasonable attorney's fees and costs incurred by the petitioner, provided no such fees or costs shall be recovered until after payment for current taxes, electric, gas, telephone and water service and heating oil deliveries has been made and after payments of reasonable fees and costs to the receiver. Any moneys remaining thereafter shall be used to pay the delinquent real property taxes....” General Statutes § 12–163a (a).

We begin with the principal dispute in this appeal, namely, whether the Appellate Court properly determined that the receiver may not collect back rent due, but only rent that is due after the receiver's appointment. The crucial sentence in § 12–163a (a) provides: “The receiver appointed by the court shall collect all rents or payments for use and occupancy forthcoming from the occupants of the building in question in place of the owner, agent, lessor or manager.” We agree with the Appellate Court that this sentence is ambiguous, especially as to the meaning of the term “forthcoming.” See Canton v. Cadle Properties of Connecticut, Inc., supra, 145 Conn.App. at 455, 77 A.3d 144. Nonetheless, we are persuaded that the more logical and compelling construction is the broader reading of the statute.

We put considerable weight on the fact that the statute refers to “all rents,” rather than simply “rent.” See General Statutes § 12–163a (a). The words “all” and “rents” (plural), individually and collectively, support the broadest possible reading. Indeed, it is difficult to ascribe any other logical meaning to the phrase “all rents” and still give full effect to both terms. “All” does not modify “occupants.”

Therefore, we cannot reasonably construe it to mean the collection of rent from every occupant. Rather, the term all rents suggests multiple kinds or sources (type or temporal) of rent. The fact that the receiver is to collect all rents “in place of the owner,” who undoubtedly would be entitled to collect past and presently due rent, lends further support to the broader construction. See General Statutes § 12–163a (a). Although the term “forthcoming” does not clearly convey past and presently due, at least one of the various definitions of that term would be consistent with that meaning. See, e.g., The American Heritage Dictionary...