Town of Ledyard v. WMS Gaming, Inc.

• Citation: 338 Conn. 687,258 A.3d 1268
• Decision Date: 21 April 2021
• Docket Number: SC 20418
• Parties: TOWN OF LEDYARD v. WMS GAMING, INC.
• Court: Supreme Court of Connecticut

338 Conn. 687

258 A.3d 1268

TOWN OF LEDYARD

v.WMS GAMING, INC.

SC 20418

Supreme Court of Connecticut.

Argued November 19, 2020

Officially released April 21, 2021^*

Proloy K. Das, Hartford, with whom were Lloyd L. Langhammer, Norwich, and Kevin W. Munn, for the appellant (plaintiff).

Aaron S. Bayer, Hartford, with whom, on the brief, was David R. Roth, New Haven, for the appellee (defendant).

Robinson, C. J., and McDonald, Mullins, Kahn and Cradle, Js.

ROBINSON, C. J.

The sole issue in this certified appeal is whether General Statutes § 12-161a,¹ which allows trial courts to award a municipality attorney's fees incurred "as a result of and directly related to" proceedings to collect delinquent personal property taxes, includes attorney's fees incurred in a related federal action regarding the municipality's authority to impose such personal property taxes. The plaintiff, the town of Ledyard, appeals, upon our grant of its petition for certification,² from the judgment of the Appellate Court reversing the judgment of the trial court and directing summary judgment for the defendant, WMS Gaming, Inc. Ledyard v. WMS Gaming, Inc. , 192 Conn. App. 836, 850, 218 A.3d 708 (2019). On appeal, the plaintiff claims that the Appellate Court improperly construed § 12-161a in concluding that the defendant's liability for attorney's fees under the statute is limited to the collection proceeding in state court and does not include the related federal court proceeding. See id. at 845, 218 A.3d 708. We conclude that the ambit of § 12-161a includes a directly related federal action that is determinative of a municipality's authority to pursue the underlying state collection proceeding. Accordingly, we reverse the judgment of the Appellate Court.

The record reveals the following relevant facts and procedural history, as set forth in the various decisions issued by this court and the Appellate Court in this case. See Ledyard v. WMS Gaming, Inc. , 330 Conn. 75, 78–80, 191 A.3d 983 (2018) ; Ledyard v. WMS Gaming, Inc. , supra, 192 Conn. App. at 839–42, 218 A.3d 708 ; Ledyard v. WMS Gaming, Inc. , 171 Conn. App. 624, 625–28, 157 A.3d 1215 (2017), rev'd, 330 Conn. 75, 191 A.3d 983 (2018). "On August 3, 2006 ... the Mashantucket Pequot Tribal Nation (Tribal Nation) filed an action in the United States District Court for the District of Connecticut challenging the authority of the state of Connecticut [state] and the plaintiff to impose property taxes on slot machines owned by Atlantic City Coin & Slot Co. (AC Coin) and leased to the Tribal Nation, for use in its gaming operations. In that complaint, the Tribal Nation alleged that the plaintiff lacked the authority to impose the property tax because such taxation is preempted by federal regulation of Indian gaming pursuant to both the Indian Gaming Regulatory Act, 25 U.S.C. §§ 2701 through 2721 ... and the Final Mashantucket Pequot Gaming Procedures, 56 Fed. Reg. 24,996 (May 31, 1991), and that the taxation was an illegal interference with the Tribal Nation's sovereignty. The present action was filed [in the trial court] on June 23, 2008, to collect unpaid personal property taxes for gaming equipment owned by the defendant and leased to the Tribal Nation for its gaming operations."³ Ledyard v. WMS Gaming, Inc. , supra, 192 Conn. App. at 839, 218 A.3d 708.

"[T]he plaintiff [in the present action] sought $18,251.23 in unpaid personal property taxes, plus costs, interest, and penalties. In addition, the plaintiff sought attorney's fees pursuant to ... § 12-161a.

"Shortly after the plaintiff had commenced the underlying state action, the Tribal Nation filed [a second] action in the United States District Court for the District of Connecticut challenging the authority of the state ... and the plaintiff to impose the taxes at issue in the present state action. Although it was not a party to the federal action commenced by the Tribal Nation, the defendant filed a motion to stay the present state action pending the outcome of the federal action, which the trial court, Martin , J. , granted.

"On March 27, 2012, the District Court ruled on [the parties’] motions for summary judgment filed in the ... federal action. The District Court, determining that the authority of the state and the plaintiff to impose the taxes was preempted by federal law, granted the Tribal Nation's motion for summary judgment and denied separate motions for summary judgment filed by the plaintiff and the state .... See Mashantucket Pequot Tribe v. Ledyard , Docket No. 3:06CV1212 (WWE), 2012 WL 1069342, *12 (D. Conn. March 27, 2012), rev'd, 722 F.3d 457 (2d Cir. 2013). On July 15, 2013, the United States Court of Appeals for the Second Circuit reversed the District Court's judgment, concluding that the authority of the state and the plaintiff to impose the taxes was not preempted by federal law. See Mashantucket Pequot Tribe v. Ledyard , 722 F.3d 457, 477 (2d Cir. 2013).

"After the proceedings had resumed in the present state action, the parties executed a stipulation. Under the stipulation, the parties agreed that the defendant had tendered payment to the plaintiff for all outstanding taxes, accrued interest, and accrued penalties at issue.

They further agreed that the plaintiff was entitled to reasonable attorney's fees and costs incurred in the underlying state action, the amount of which would be determined by the trial court and the payment of which would be accepted by the plaintiff as satisfaction of all of the taxes, interest, penalties, attorney's fees, and costs recoverable by the plaintiff with respect to the underlying state action. They disputed, however, whether the trial court could also find the defendant liable for attorney's fees incurred by the plaintiff in defense of the federal action commenced by the Tribal Nation to which the defendant was not a party .... The parties agreed to submit to the trial court the issue of whether the defendant was liable for the federal action attorney's fees.

"After executing the stipulation, the parties filed ... motions for summary judgment as to liability only with respect to the federal action attorney's fees. On October 6, 2016, the trial court, Vacchelli , J. , issued its memorandum of decision granting the plaintiff's motion for summary judgment, denying the defendant's motion for summary judgment, and rendering ... judgment as to liability only in favor of the plaintiff with respect to the federal action attorney's fees. The trial court concluded that the defendant was liable for the federal action attorney's fees pursuant to § 12-161a. The trial court further stated that the plaintiff could file a motion for attorney's fees within thirty days and that a hearing would be scheduled thereafter to determine the amount of the attorney's fees to which the plaintiff is entitled. Shortly thereafter, on October 11, 2016, the plaintiff filed a motion for attorney's fees.

"On October 25, 2016, [before] the trial court [scheduled] a hearing on the plaintiff's motion for attorney's fees, the defendant appealed [from] the trial court's decision with respect to the federal action attorney's fees [to the Appellate Court]." (Footnotes omitted; internal quotation marks omitted.) Ledyard v. WMS Gaming, Inc. , supra, 192 Conn. App. at 839–41, 218 A.3d 708. "The plaintiff subsequently filed a motion to dismiss the appeal for lack of subject matter jurisdiction, which [the Appellate Court] granted on the ground that the trial court's decision was not yet an appealable final judgment because it had yet to determine the amount of attorney's fees owed to the plaintiff. ... Thereafter, [this court] reversed the judgment of [the Appellate Court] and remanded the case ... to [the Appellate Court] with direction to deny the plaintiff's motion to dismiss." (Citation omitted.) Id. at 841–42, 218 A.3d 708.

With respect to the merits of the defendant's appeal, the Appellate Court concluded on remand that the plain language of § 12-161a, specifically, "as a result of and directly related to," required a "more restrictive proximal nexus to the collection proceeding in which the attorney's fees are requested" than a proximate cause standard. Id. at 845, 218 A.3d 708. The Appellate Court determined that the phrase "directly related," when read in context with "as a result of," imported a more restrictive meaning to the language of the statute. Id. at 844–45, 218 A.3d 708. The court noted that, although the resolution of the federal action was significant to the ultimate outcome of the tax collection proceeding in state court, it "did not result directly in a final determination of the rights and obligations of the parties relative to the claimed delinquent tax." Id. at 845, 218 A.3d 708. Therefore, the Appellate Court held that "only litigation fees incurred in the prosecution of the collection action itself would qualify as attorney's fees directly related to the collection proceeding as contemplated by § 12-161a." Id. ; see id. at 845–46, 218 A.3d 708 (noting that nature of "the claims that were at issue in the federal action," including claim that Tribal Nation lacked standing, supported its conclusion because, "far from incurring attorney's fees directly related to an action that would result in a final determination of the rights and obligations of the parties relative to the claimed delinquent tax, the attorney's fees in the federal action were incurred in a collateral deviation or diversion from such a final determination"); see also id. at 847–49, 218 A.3d 708 (comparing § 12-161a to other attorney's fee statutes, including General Statutes §§ 12-193 and 49-7 ). Accordingly, the Appellate Court reversed the judgment of the trial court and remanded the case to that court "with direction to deny the plaintiff's motion for summary judgment and to grant the defendant's motion for summary judgment." Id. at 850, 218 A.3d 708. This certified appeal followed. See footnote 2 of this opinion.

On appeal, ...