Wheelabrator Bridgeport, L.P. v. City of Bridgeport, 19288.

• Citation: 320 Conn. 332,133 A.3d 402
• Decision Date: 02 February 2016
• Docket Number: No. 19288.,19288.
• Court: Connecticut Supreme Court
• Parties: WHEELABRATOR BRIDGEPORT, L.P. v. CITY OF BRIDGEPORT. Wheelabrator Bridgeport, L.P., et al. v. City of Bridgeport.

320 Conn. 332

133 A.3d 402

WHEELABRATOR BRIDGEPORT, L.P.

v.CITY OF BRIDGEPORT.

Wheelabrator Bridgeport, L.P., et al.

v.City of Bridgeport.

No. 19288.

Supreme Court of Connecticut.

Argued Sept. 17, 2015.

Decided Feb. 2, 2016.

John B. Daukas, pro hac vice, with whom were Barry C. Hawkins and Michael K. Murray, for the appellants-appellees (plaintiffs).

Elliott B. Pollack, with whom was Tiffany K. Spinella, for the appellee-appellant (defendant).

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

ZARELLA

, J.

The named plaintiff, Wheelabrator Bridgeport, L.P. (Wheelabrator), operates a waste to energy facility (facility) located on property in the city of Bridgeport (property).¹ In 2009, Wheelabrator appealed from the tax assessment of the defendant, the city of Bridgeport (city), pursuant to

General Statutes §§ 12–117a

, 12–119 and 22a–270, claiming that the city had overvalued the property, as well as personal property located on the property, on the city's 2007 and 2008 grand lists for purposes of assessing property taxes. In 2011, Wheelabrator, the United States Bank National Association, as corporate owner trustee of the facility, James E. Mogavero, as individual owner trustee of the facility, and Waste To Energy I, LLC (Waste To Energy),² as equitable owner of the facility, filed a second appeal from the city's tax assessment, alleging that the city had overvalued the property on the 2010 grand list. Thereafter, the two appeals were consolidated for purposes of trial. The city moved to dismiss both appeals for lack of standing, and the trial court granted the motion to dismiss the first appeal but denied the motion to dismiss the second appeal. The trial court then rendered partial judgment in favor of Wheelabrator in the second appeal and reduced the valuation of the property on the 2010 grand list. Wheelabrator filed the present appeal³ from the judgments of the trial court, claiming, among other things, that the trial court improperly (1) granted the city's motion to dismiss the first appeal, (2) improperly valued the property in the second appeal, and (3) failed to consider evidence of the city's wrongful conduct in the second appeal. The city cross appealed, claiming that, in the second appeal, the trial court improperly (1) denied its motion to dismiss, (2) admitted the appraisal testimony of Wheelabrator's two expert witnesses, and (3) excluded developer's profit from its valuation of the property based on the cost to construct the facility. We conclude that the trial court improperly dismissed the first appeal. We also agree with Wheelabrator's two claims regarding the second appeal and reject the city's claims on cross appeal. Accordingly, we reverse the judgment of the trial court dismissing the first appeal, reverse the trial court's valuation of the property in the second appeal, and remand for further proceedings in the first appeal and a new trial in the second appeal.

The record reveals the following procedural history and facts, some of which were found by the trial court and some of which are undisputed. The facility was built in the 1980s as a collaboration between the Connecticut Resources Recovery Authority (CRRA) and Wheelabrator. The facility burns municipal solid waste to generate electricity, which Wheelabrator sells to United Illuminating Company. In addition to income derived from the sale of electricity, Wheelabrator receives tipping fees from municipalities in exchange for receiving municipal solid waste.

In order to take advantage of certain tax and bond opportunities that would not have been available if the facility had been owned by a private entity, CRRA took nominal title to the facility and leased it back to Wheelabrator. Pursuant to § 22a–270 (a)

,⁴ the property was exempt from municipal property taxes until January 1, 2009. The property became taxable on that date pursuant to § 22a–270 (b)

. On the city's 2007 grand list, the city listed the fair market value of the property as $365,624,993 and the value of Wheelabrator's personal property as $17,253,570. These amounts reflected the value of the real and personal property as of October 1, 2003, the date of the last citywide property valuation.

The city conducted a citywide revaluation on October 1, 2008. As the result of this revaluation, the city listed the value of the property on the 2008 grand list as $401,624,570 and the value of Wheelabrator's personal property as $10,559,534. Wheelabrator appealed from the 2007 and 2008 valuations to the Board of Assessment Appeals of the City of Bridgeport (board), claiming that the valuations were excessive.⁵ The board denied the appeal. Wheelabrator then appealed from this denial to the trial court pursuant to §§ 12–117a

,⁶ 12–119⁷ and 22a–270 (b)

. In its complaint, Wheelabrator alleged that, as of December 31, 2008, Waste To Energy was the owner of the property and that Wheelabrator was a lessee that was responsible for paying all property taxes.

Thereafter, the city filed a motion to dismiss the appeal for lack of subject matter jurisdiction on the ground that Wheelabrator lacked standing. Specifically, the city contended, among other things, that Wheelabrator had alleged that Waste To Energy was the owner of the property that Wheelabrator leased when, in fact, CRRA was the owner of the land. Accordingly, the city argued, Wheelabrator "does not have a legally cognizable interest in the subject property from Waste [To Energy]" for purposes of §§ 12–117a

and 12–119. See General Statutes § 12–117a ("any lessee of real property whose lease has been recorded as provided in section 47–19 and who is bound under the terms of his lease to pay real property taxes" has right to appeal from board's ruling); General Statutes § 12–119

("any lessee [of the property] whose lease has been recorded as provided in section 47–19 and who is bound under the terms of his lease to pay real property taxes" has right to appeal from board's ruling). In addition, the city claimed that Wheelabrator lacked standing because a lessee of personal property cannot file an appeal pursuant to §§ 12–117a and 12–119. Wheelabrator filed an opposition to the motion, in which it claimed that, as of January 3, 2009, CRRA held record title to the land on which the facility was located, CRRA leased the land to Wheelabrator, which subleased it to the United States Bank National Association and Mogavero, the owner trustees, who, in turn, subleased it back to Wheelabrator. In addition, Wheelabrator alleged that the United States Bank National Association and Mogavero, as owner trustees, had record title to the facility and, on behalf of Waste To Energy, which was the trust beneficiary and equitable owner of the facility, leased the facility to Wheelabrator. Wheelabrator also claimed that its standing to appeal pursuant to § 22a–270 did not depend in any way on the nature of Waste To Energy's interest in the land. Rather, that statute was intended to allow lessees such as Wheelabrator to appeal from the city's tax assessments. Finally, Wheelabrator contended that it had standing under §§ 12–117a and 12–119 because it was a lessee of real property whose lease had been recorded in the land records and who was required to pay property taxes, and the statutes were not limited to appeals from real property assessments. The trial court concluded that the issue of Wheelabrator's standing involved factual questions that would be better addressed at the time of trial and denied the city's motion to dismiss.

On its 2010 grand list, the city again listed the value of the real property as $401,624,570, but it reassessed the value of Wheelabrator's personal property at $56,873,060. Wheelabrator appealed from this valuation to the board. At a hearing in this second appeal, the chairman of the board asked Wheelabrator if it had an appraisal report for the property. Wheelabrator had prepared a draft appraisal report for use in the first appeal, but, because the report was not yet subject to disclosure in that litigation under the trial court's discovery schedule, and because Wheelabrator believed that the report was privileged and confidential attorney work product, Wheelabrator declined to produce it. The board ultimately denied the second appeal, and Wheelabrator appealed from the board's denial to the trial court pursuant to §§ 12–117a

, 12–119 and 22a–270 (b). The trial court consolidated the two appeals for trial.

At the trial of the consolidated appeals, the city contended that the second appeal should be dismissed for lack of standing because (1) Wheelabrator failed to establish either that CRRA owned the land and that Wheelabrator was its lessee or that the United States Bank National Association and Mogavero, the owner trustees, owned the facility and that Wheelabrator was their lessee, (2) a lessee of personal property is not authorized to appeal pursuant to §§ 12–117a

and 12–119, and (3) Wheelabrator failed to exhaust its administrative remedies because it had refused to provide the draft appraisal report to the board at the hearing on the assessment relating to the 2010 grand list. After trial, the trial court granted the city's motion to dismiss the first appeal on the ground that CRRA, not Waste To Energy, was the owner of the property, and, therefore, Wheelabrator's complaint, "alleging that [Waste To Energy] was the owner and lessor of the subject property, failed to comply with §§ 12–117a

and 12–119 [which allow] only an owner of property or a lessee of the owner who has agreed to pay the property tax and whose lease or notice of lease has been recorded [in] the city's land records to appeal from an assessor's valuation."⁸ The court further concluded that § 22a–270

did not provide "an alternative path for taking a tax appeal in order to avoid the restrictions contained in §§ 12–117a and 12–119" because § 22a–270"requires the lessee to comply with chapter 203 of the General Statutes ... which incorporates §§...