Town of Groton v. LLC (2010)

MEMORANDUM OF DECISION RE MOTION FOR SUMMARY JUDGMENT [# 120 ]

The present foreclosure action arises from the alleged non-payment of taxes assessed by the town's assessor on property located on Mardie Lane in Groton, Connecticut (the property).   The plaintiff, the town of Groton (town) filed a motion for summary judgment as to liability only against the defendant, First Groton, LLC (the defendant LLC), on November 20, 2009.   The town filed a memorandum in support of its motion.   On December 31, 2009, the defendant LLC filed an objection to the town's motion, together with its memorandum of law.   That same date, the town filed a reply to the defendant LLC's objection.   The defendant LLC filed a supplemental memorandum of law in support of its objection on February 1, 2010.   On February 2, 2010, the town filed a supplemental memorandum of law in support of its motion.

BACKGROUND

On September 25, 2008, the town filed a 142-count complaint against the defendant LLC alleging the non-payment of taxes assessed by the town's assessor on the property.   In its motion for summary judgment, the town alleges the following facts.   On October 27, 1998, Mardie Lane Homes, LLC (Mardie Lane), the defendant LLC's predecessor in interest, received conditional approval from the town planning commission for the construction of a subdivision on the property.   See Groton v. Mardie Lane Homes, 286 Conn. 280, 283, 943 A.2d 449 (2008).   Five years after the approval of the subdivision plan, the proposed public improvements had not been completed.  Id., 284-85.   At its meeting on November 10, 2003, the town planning commission determined that approval of the subdivision plan had expired, and recorded a formal notice of subdivision expiration on the land records.  Id.

On August 18, 2006, East Haven Builders, Inc. (East Haven Builders), a creditor of Mardie Lane, filed a petition for involuntary relief under chapter 7 of the United States Bankruptcy Code with the United States Bankruptcy Court for the District of Connecticut at Bridgeport.   On August 28, 2006, Hamari Ventures, LLC (Hamari), a creditor in the bankruptcy action, filed a motion for relief from the automatic stay for the purpose of completing its foreclosure against the multiple lots on the property, which the court granted on January 12, 2007.

On July 15, 2008, title to the property became absolute in Hamari pursuant to strict foreclosure, and an amended foreclosure certificate was recorded on July 29, 2008, at Volume 1014, Page 781 of the town's land records.   Hamari subsequently conveyed the property to Rivers Edge Management, LLC (Rivers Edge) pursuant to a quitclaim deed dated July 31, 2008, and recorded on August 6, 2008, at Volume 1015, Page 406 of the town's land records.   Rivers Edge then conveyed the property to the defendant LLC pursuant to a statutory warranty deed recorded on August 6, 2008, at Volume 1015, Page 408 of the town's land records.   The defendant LLC also recorded a notice and memorandum of option agreement to purchase the property with Rivers Edge as the buyer, reciting lots three through twelve, and lots twenty through twenty-eight of the Grove Avenue subdivision, on August 6, 2008, at Volume 1015, Page 440 of the town's land records.   The amended foreclosure certificate and both deeds identified the lots of the subdivision, and made specific reference to the subdivision plan.

APPLICABLE LAW

“Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.   In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party.”  (Internal quotation marks omitted.)  Provencher v. Enfield, 284 Conn. 772, 790-91, 936 A.2d 625 (2007).

“In ruling on a motion for summary judgment, the court's function is not to decide issues of material fact, but rather to determine whether any such issues exist.”  Nolan v. Borkowski, 206 Conn. 495, 500, 538 A.2d 1031 (1988).  “In seeking summary judgment, it is the movant who has the burden of showing the nonexistence of any issue of fact.   The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law.   The courts hold the movant to a strict standard.   To satisfy his burden the movant must make a showing that it is quite clear what the truth is, and that excludes any real doubt as to the existence of any genuine issue of material fact ․ As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent ․ When documents submitted in support of a motion for summary judgment fail to establish that there is no genuine issue of material fact, the nonmoving party has no obligation to submit documents establishing the existence of such an issue ․ Once the moving party has met its burden, however, the opposing party must present evidence that demonstrates the existence of some disputed factual issue ․ It is not enough, however, for the opposing party merely to assert the existence of such a disputed issue.   Mere assertions of fact ․ are insufficient to establish the existence of a material fact and, therefore, cannot refute evidence properly presented to the court under Practice Book § [17-45].”  (Internal quotation marks omitted.)   Zielinski v. Kotsoris, 279 Conn. 312, 318-19, 901 A.2d 1207 (2006).

DISCUSSION

Practice Book § 10-70 governs the requirements for a municipal tax lien foreclosure, providing:  “In any action to foreclose a municipal tax or assessment lien the plaintiff need only allege and prove:  (1) the ownership of the liened premises on the date when the same went into the tax list, or when said assessment was made;  (2) that thereafter a tax in the amount specified in the list, or such assessment in the amount made, was duly and properly assessed upon the property and became due and payable;  (3) (to be used only in cases where the lien has been continued by certificate) that thereafter a certificate of lien for the amount thereof was duly and properly filed and recorded in the land records of the said town on the date stated;  (4) that no part of the same has been paid;  and (5) other encumbrances as required by the preceding section.”

In support of its motion, the town argues that it has alleged and submitted evidence fulfilling the requirements of Practice Book § 10-70.   Specifically, the town alleges that Mardie Lane, Bond & Walsh Company, Tsaga Holdings, LLC and Ulbrick Associates, LLC were the record owners of various lots of the property at different points during the tax years 1998 through 2007.   The town further alleges that the defendant LLC currently owns the property.   The town also submitted certified copies of certificates of continuing tax liens, indicating that the city assessed a tax on the property during the years in question, which was made due and payable.   The town further submitted the affidavit of Nancy L. Dytko, the town's tax collector, indicating that the taxes due and owing have not been paid.   Finally, the town alleged in its complaint all prior and subsequent encumbrances of record in accordance with Practice Book § 10-69.   Therefore, this court concludes that the town has met its burden of establishing a prima facie case for a tax lien foreclosure action pursuant to the requirements of Practice Book § 10-70.

The defendant LLC asserts five special defenses in opposition to the plaintiff's foreclosure action.  “When a complaint and supporting affidavits establish an undisputed prima facie case for a foreclosure action, a court must only determine whether [a] special defense is legally sufficient before granting summary judgment.”   LaSalle National Bank v. Shook, Superior Court, judicial district of New London, Docket No. CV 99 0549266 (July 13, 2000, Martin, J.), aff'd, 67 Conn.App. 93, 787 A.2d 32 (2001).

First Special Defense

The defendant LLC's first special defense states as follows:  “The assessment of the taxes was invalid due to the fact that the various lots being foreclosed were assessed as separate and distinguishable lots being a part of a subdivision, when in actuality, the [town] terminated the subdivision but continued to assess the lots as separate parcels of property rather than assessing all of the lots as one parcel of property.”

“It is well settled that if the defendant wanted to challenge the validity of the assessments, it was required to follow the appropriate statutory procedures, either by (1) timely appealing from the assessments to the board of assessment appeals pursuant to General Statutes §§ 12-111 and 12-112, and from there by timely appealing to the court pursuant to General Statutes § 12-117a, or (2) timely bringing a direct action pursuant to § 12-119.

“[A] taxpayer who has failed to utilize the available statutory remedies [may not] assert, in an action to collect a tax ․ that the tax has not been properly assessed ․ The rationale for this rule is the need on the part of the government for fiscal certainty.   A municipality, like any governmental entity, needs to know with reasonable certainty what its tax base is for each fiscal year, so that it responsibly can prepare a budget for that year ․ Public policy requires, therefore, that taxes that have not been challenged timely cannot be the subject of perpetual litigation, at any time, to suit the convenience of the taxpayer ․ A taxpayer who has not sought redress in an appropriate manner is foreclosed from continuing litigation outside [those] statutes.”  (Citation omitted;  internal quotation marks omitted.)  Redding v. Elfire, LLC, 74 Conn.App. 491, 497-99, 812 A.2d 211 (2003).

In the present case, the defendant LLC has not filed a timely appeal under § 12-117a or § 12-119 from any assessments upon which the liens are based.   In its supplemental memorandum of law, the defendant LLC concedes that it is not entitled to additional time within which to appeal the tax assessments pursuant to 11 U.S.C. § 108(a)(2) as a successor in title.   The defendant LLC has not provided any case law, and this court has found none, indicating that it is entitled to additional time to meet the statutory time limitations.   As a result, the defendant LLC's first special defense challenging the validity of the tax assessments is legally insufficient in the present case.

Second Special Defense

The defendant LLC's second special defense alleges that the tax liens are invalid because “they are based on invalid assessments ․ they describe the lots as separate parcels of property even [though] the [town] terminated the subdivision and therefore, there cannot be any separate lots ․ and ․ there is a discrepancy in the description of the properties being foreclosed in that they are identified as lots in a subdivision, when in actuality there is no subdivision as it was terminated by the [town].”   In the present case, as discussed herein, the defendant LLC has not filed an appeal under § 12-117a or § 12-119 from any assessments upon which the liens are based.   Therefore, the portion of the defendant LLC's second special defense challenging the validity of the tax assessments is legally insufficient in the present case pursuant to Redding v. Elfire, LLC, supra, 74 Conn.App. 491.

In support of the portion of its defense alleging a discrepancy in the property description, the defendant LLC relies on Redding v. Elfire, LLC, supra, 74 Conn.App. 491, in which our Appellate Court found that a trial court improperly granted the plaintiff's motion for summary judgment in an action to foreclose municipal tax liens.   The court in Redding stated that “the defendant submitted considerable evidence that supports its contention that the description of the property being foreclosed, as described in the ․ complaint, is at variance with that of the property that actually was liened by the plaintiff, as described in the certificates of tax lien.   Moreover, the defendant offered evidence that the ․ complaint purports to foreclose on the property as it is described in an illegal map that never was approved by the defendant's planning commission.”  Id., 496-97.

In the present case, unlike in Redding, the property described in the town's complaint matches the property described in the tax lien certificates.   All of the submitted evidence, including the notice and memorandum of option agreement to purchase the property recorded by the defendant LLC, also contains an identical property description.   Additionally, unlike the Redding case, the map in which the property is described was conditionally approved by the town's planning commission.  “Absent an appeal challenging its validity, the approval of a subdivision authorizes a tax assessor to tax the property as subdivided lots rather than as the undifferentiated parcel or parcels that preceded the approval.”  (Internal quotation marks omitted.)   257 Blake, LLC v. Seymour, Superior Court, judicial district of New Haven, Docket No. CV 08 4031348 (August 4, 2009, Skolnick, J.T.R.) (48 Conn. L. Rptr. 350, 352).

Moreover, “the vigilant owner of real property is duty bound to go beyond the description provided in a notice of tax sale and look to extrinsic evidence if there is any doubt as to the land at issue.”  Berger v. Fitzgerald, 55 Conn.App. 138, 147, 739 A.2d 287, cert. denied, 251 Conn. 922, 742 A.2d 358 (1999), citing Ontario Land Co. v. Yordy, 212 U.S. 152, 29 S.Ct. 278, 53 L.Ed. 449 (1909).   The defendant LLC has not submitted any evidence contradicting the town's claim, and as a result, has failed to demonstrate the existence of a genuine issue of material fact.   Therefore, the defendant LLC's second special defense is legally insufficient in the present case.

Third Special Defense

The defendant LLC's third special defense alleges that by filing the tax liens, the town violated the automatic stay provisions of the United States Bankruptcy Code because Mardie Lanes is in bankruptcy.  11 U.S.C. § 362 states in relevant part:  “The filing of a petition under section 301, 302, or 303 of this title ․ does not operate as a stay ․ under subsection (a) of the creation or perfection of a statutory lien for an ad valorem property tax, or a special tax or special assessment on real property whether or not ad valorem, imposed by a governmental unit, if such tax or assessment comes due after the date of the filing of the petition.”   In its objection to the town's motion, the defendant LLC concedes that pursuant to 11 U.S.C. § 362, the town did not violate the automatic stay provision of the United States Bankruptcy Code by filing the tax liens on the property.   Therefore, the defendant LLC's third special defense is legally insufficient in the present foreclosure action.

Fourth Special Defense

The defendant LLC's fourth special defense states as follows:  “Upon information and belief obtained from parties associated with the prior owner of the property sought to be foreclosed, the defendant [LLC] believes that payment of the outstanding taxes were offered but refused and rejected by the [town].”   The affidavit of Nancy L. Dytko, filed by the town, states that no payment has been offered or rejected by the town.   The defendant LLC has not submitted any evidence contradicting the material submitted by the town on this issue.   As a result, the defendant LLC's fourth special defense fails to raise a genuine issue of material fact to prevent foreclosure in the present case.

Fifth Special Defense

The defendant LLC's fifth special defense alleges that the town has unclean hands because it “continued to assess and tax the property, and the individual lots, as if it was a subdivision knowing full well that their actions were improper, unfair, deceptive and immoral.”

The town was not, however, required to perform an interim revaluation of the property for taxation purposes.  Voluntown v. Rytman, 21 Conn.App. 275, 285, 573 A.2d 336, cert. denied, 215 Conn. 818, 576 A.2d 548 (1990).   In support of its defense, the defendant LLC cites Pauker v. Roig, 232 Conn. 335, 654 A.2d 1233 (1995), in which our Supreme Court stated that a tax assessor is not obligated to undertake an interim revaluation “in the absence of a showing of the destruction or expansion of the property, a substantial change in its use or zoning classification, or a decision by the taxpayer to go out of business.”  Id., 342.   According to the defendant LLC, the town's termination of the subdivision constituted a substantial change in the property's use or zoning classification, and therefore, the tax assessor was required to perform an interim revaluation.   The defendant LLC's reliance on Pauker is misplaced, however, as that case involved a tax appeal pursuant to § 12-119.   In the present case, the defense challenges the validity of the tax assessments and, as discussed herein, is legally insufficient in a foreclosure action.   As a result, the defendant LLC's fifth special defense fails to raise a genuine issue of material fact to prevent foreclosure in the present case.

CONCLUSION

In light of the evidence submitted by both parties, the town has made out its prima facie case for a tax lien foreclosure action pursuant to Practice Book § 10-70.   The special defenses, as offered by the defendant LLC, fail to raise a genuine issue of material fact to prevent foreclosure.

ORDER

Based on the foregoing, the court hereby grants the town's motion for summary judgment as to liability only.

Devine, J.

Devine, James J., J.