Woodrow Wilson LLC v. Housing Finance Auth.

• Citation: 294 Conn. 639,986 A.2d 271
• Decision Date: 02 February 2010
• Docket Number: No. 18179.,18179.
• Parties: WOODROW WILSON OF MIDDLETOWN, LLC v. CONNECTICUT HOUSING FINANCE AUTHORITY.
• Court: Supreme Court of Connecticut

986 A.2d 271

294 Conn. 639

WOODROW WILSON OF MIDDLETOWN, LLC v. CONNECTICUT HOUSING FINANCE AUTHORITY.

No. 18179.

Supreme Court of Connecticut.

Argued October 23, 2009.

Decided February 2, 2010.

David A. Haught, with whom was Lorinda S. Coon, Hartford, for the appellant (plaintiff).

Charles L. Howard, with whom was Sheila A. Huddleston, Hartford, for the appellee (defendant).

ROGERS, C.J., and KATZ, PALMER, VERTEFEUILLE and McLACHLAN, Js.

VERTEFEUILLE, J.

The plaintiff, Woodrow Wilson of Middletown, LLC, appeals from the judgment of the trial court determining that the defendant, the Connecticut Housing Finance Authority, did not breach its contract with the plaintiff by refusing to consent to the plaintiff's request to prepay its mortgage from the defendant under General Statutes § 8-253a.¹ On appeal, the plaintiff claims that the trial court misinterpreted § 8-253a(1) and improperly failed to conclude that the defendant was required to consent to the plaintiff's prepayment of the mortgage because the requirement of § 8-253a(1)(B) had been satisfied. The defendant responds that the trial court properly interpreted § 8-253a(1)(B) and that the trial court's conclusion that the plaintiff had failed to demonstrate that the requirement for prepayment had been satisfied is supported by the evidence. We agree with the defendant and, accordingly, we affirm the judgment of the trial court.²

The following facts, as found by the trial court, and procedural history are relevant to our resolution of this appeal. In 1998, the defendant sold to the plaintiff an existing apartment building in Middletown, a portion of which was comprised of rental units for persons of low and moderate income. Pursuant to General Statutes § 8-253, the plaintiff financed the purchase with a mortgage from the defendant. At the closing, the plaintiff signed a promissory note and a thirty year mortgage note to the defendant, in addition to a covenant of conditions and regulatory agreement (regulatory agreement) pursuant to which the plaintiff agreed to be regulated by the defendant with regard to the property. The note provided that it could not be prepaid prior to September 9, 2016, without the prior written consent of the defendant and, further, that any prepayment would be subject to the "statutory, regulatory and policy requirements and limitations" of the defendant. The regulatory agreement required that for a period of approximately eighteen years, the plaintiff must rent at least 20 percent of the apartments to tenants of low and moderate income. Those tenants are defined in the regulatory agreement as individuals and families whose annual income is 80 percent or less than the "area median gross income" as determined in certain federal regulations.

In July, 2002, the plaintiff attempted to prepay the balance of the mortgage; the defendant, however refused to consent to the offered prepayment. Thereafter, the plaintiff brought this action against the defendant, alleging, inter alia, breach of contract and breach of the covenant of good faith and fair dealing.³ In its prayer for relief, the plaintiff sought mandatory injunctive relief, money damages, and attorney's fees. Following a trial, the trial court determined that the plaintiff had not established either its breach of contract claim or its claim regarding the breach of the covenant of good faith and fair dealing. Specifically with respect to the breach of contract claim, the trial court determined that the defendant was not required to consent to the prepayment of the loan because the plaintiff had not demonstrated that the requirement for prepayment set forth in § 8-253a(1)(B) had been satisfied, namely that "the need for low and moderate income housing in the area concerned is no longer acute."⁴ (Emphasis added.)

The trial court also summarily rejected the plaintiff's good faith and fair dealing claim. See footnote 2 of this opinion. This appeal followed.⁵

This appeal principally turns on the proper interpretation of the words "in the area concerned" in § 8-253a(1)(B). On appeal, the plaintiff claims that the trial court improperly determined that this phrase refers to an area known as "the Hartford metropolitan statistical area." The plaintiff contends that "the area concerned" in § 8-253a(1)(B) is the market area from which the apartment complex draws its tenants, in this case, Middlesex County.⁶ In response, the defendant asserts that the trial court properly agreed with the defendant's interpretation of the phrase "the area concerned" as the Hartford metropolitan statistical area, and, therefore, properly concluded that the plaintiff did not meet the requirements of § 8-253a(1)(B).

We begin by setting forth the appropriate standard of review. The resolution of this appeal requires us to interpret § 8-253a(1)(B). "Well settled principles of statutory interpretation govern our review.... Because statutory interpretation is a question of law, our review is de novo.... When construing a statute, [o]ur fundamental objective is to ascertain and give effect to the apparent intent of the legislature.... In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply.... In seeking to determine that meaning, General Statutes § 1-2z directs us first to consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable results, extratextual evidence of the meaning of the statute shall not be considered. ... The test to determine ambiguity is whether the statute, when read in context, is susceptible to more than one reasonable interpretation." (Citations omitted; internal quotation marks omitted.) Achillion Pharmaceuticals, Inc. v. Law, 291 Conn. 525, 531, 970 A.2d 57 (2009). "When a statute is not plain and unambiguous, we also look for interpretive guidance to the legislative history and circumstances surrounding its enactment, to the legislative policy it was designed to implement, and to its relationship to existing legislation and common law principles governing the same general subject matter...." (Internal quotation marks omitted.) Key Air, Inc. v. Commissioner of Revenue Services, 294 Conn. 225, 233, 983 A.2d 1 (2009).⁷

We begin our analysis with the relevant statutory text. Section 8-253a provides in relevant part: "In addition to the terms and conditions set forth in section 8-253, loans made by the authority hereunder shall also be subject to the following terms and conditions: (1) A loan hereunder may be prepaid after a period of twenty years or sooner with the permission of the authority; provided, nonprofit mortgagors and mortgagors to whom loans are made on or after October 1, 1978, may prepay their loans prior to maturity only with the consent of the authority. The authority shall grant such consent if it finds (A) that it may reasonably be expected that the prepayment of the loan will not result in a material escalation of rents charged to occupants of the project; and (B) that the need for low and moderate income housing in the area concerned is no longer acute...." (Emphasis added.) Section 8-253a does not define the term "the area concerned," nor is a definition found elsewhere in the Connecticut Housing Finance Authority Act (act), General Statutes § 8-241 et seq. The language of the statute is instructive, however, in that it requires the defendant to consent to prepayment of the mortgage only "if it finds" that both of the conditions for prepayment are met. (Emphasis added.) General Statutes § 8-253a(1)(B). The text of the statute clearly indicates that the legislature chose to give the defendant the sole authority, in its expertise, to determine whether a mortgagor has met the requirements necessary to receive the consent to prepay.

In accordance with § 1-2z, we next turn to the relevant statutory scheme of which § 8-253a is a part, namely, the remaining sections of the act. The text of these relevant provisions confirms our understanding that the legislature intended to defer to the defendant to determine whether a mortgagor has met the requirements for the defendant's consent to prepayment. As we recently have recognized, "[t]he purpose of the act is to address the `serious shortage of housing for low and moderate income families and persons....' General Statutes § 8-242." Renaissance Management Co. v. Connecticut Housing Finance Authority, 281 Conn. 227, 239, 915 A.2d 290 (2007). In order to achieve that purpose, the legislature has given the defendant the authority "[t]o do all acts and things necessary or convenient to carry out the purposes" of the act. General Statutes § 8-250(30). Moreover, the legislature has provided that the defendant's powers "shall be interpreted broadly to effectuate the purposes [of the act] and shall not be construed as a limitation of powers." General Statutes § 8-262; see also Renaissance Management Co. v. Connecticut Housing Finance Authority, supra, at 239, 915 A.2d 290 ("the broad delegation of power to the defendant is a necessary part of achieving the overarching purpose of the act").

Although the language of § 8-253a(1)(B) and its relationship to other provisions of the act show that the legislature intended to defer to the defendant's authority and expertise in determining whether the defendant was required to consent to prepayment of the mortgage, we nevertheless cannot conclude that it is plain and unambiguous with regard to the meaning of "the area concerned...." Accordingly, consistent with § 1-2z, we turn to extratextual sources to determine whether the trial court properly interpreted the meaning of the statute.

The legislative history surrounding the enactment of § 8-253a is minimal, and...