JJT v. Town of Oxford et al. (2013)

MEMORANDUM OF DECISION RE MOTION TO DISCHARGE LIS PENDENS # 103

INTRODUCTION

The defendant, 66 Hawley Road, LLC “Hawley”) filed this Application for Discharge of the Notice of Lis Pendens which was placed on the land records of the Town of Oxford for property sold to it by Angelo Melisi (“Melisi”).   The plaintiff, JJT & M, Inc. was the owner of the property at 66 Hawley Lane which was sold at a tax sale auction pursuant to C.G.S. § 12–157 to Angelo Melisi on June 28, 2012.   Melisi received the deed on April 9, 2013 and thereafter transferred the property by quitclaim to the defendant 66 Hawley Road, LLC. Hawley recorded the deed on or about May 1, 2013.   The plaintiff contends that the original tax sale to Melisi is null and void as a result of claims of fraud.   The defendant submitted a memorandum in support of the motion dated August 7, 2013.   The plaintiff submitted a memorandum in opposition to the application for discharge dated August 16, 2013.   The defendant submitted a reply on August 23, 2013.   The parties appeared before Judge Arthur Hiller on August 5, 2013 for a hearing which was continued to August 9, 2013 before this court for argument.

DISCUSSION

The plaintiff JJT & M had filed a complaint against the defendants alleging that it is the rightful owner of the property at 66 Hawley Road and that the tax sale pursuant to C.G.S. § 12–157 is null and void as a result of allegations of fraud by the former Oxford Tax Collector.   The defendant 66 Hawley Road, LLC has submitted an Application for Discharge of the Notice of Lis Pendens filed by the plaintiff as to the property and as a result of its claims of fraud surrounding the assessment of the taxes.   The defendants are the Town of Oxford, which conducted the tax sale auction of the property at 66 Hawley Road and the current record owner of the property, 66 Hawley Road, LLC. The motion does not address the defendant Town of Oxford.   On July 11, 2013, the defendant, 66 Hawley Road, LLC, filed an Application for Discharge of the Notice of Lis Pendens which had been recorded on land records for the 66 Hawley Road property by the plaintiff.   The Court, Judge Hiller, heard testimony on August 5, 2013 for the initial hearing scheduled for the motion in the Milford Superior Court.   The Court permitted the parties to submit memoranda at the conclusion of the hearing.   The matter was reassigned to this Court.   On September 9, 2013, the parties appeared for a hearing but informed the Court that they would not be presenting further testimony and would only present argument.   The parties agreed that the transcript of the prior short calendar argument and testimony of Mr. Melisi could be admitted as an exhibit for consideration of the court.  (Transcript, August 5, 2013 Exh. A.)

The notice of lis pendens puts “potential buyers of real estate and creditors of its owners on notice that the real estate may be subject to pending adverse interest that may affect the title or right to the property.”  Garcia v. Brooks Street Associates, 209 Conn. 15, 22, 546 A.2d 275 (1988).  “․ [T]he effect of the lis pendens is simply to give notice to the world of the remedy being sought.   The lis pendens created no additional right in the property on the part of the plaintiff, but simply allows the parties to know that a lawsuit is pending in which the plaintiff is seeking to establish such a right.”   (Citations omitted.)  Wallingford Staffordshire v. Staffordshire, 42 Conn.Sup. 241, 250, 615 A.2d 188 (1992) [6 Conn. L. Rptr. 304].  “[A] notice of lis pendens ensures that the [litigant's] claim cannot be defeated by a prejudgment transfer of property ․ [T]he lis pendens procedure provides security for payment of the claim pending final resolution of the case.”   Williams v. Bartlett, 189 Conn. 471, 479–80, 457 A.2d 290, appeal dismissed, 464 U.S. 801, 104 S.Ct. 46 (1983).   The property owner burdened by the notice of lis pendens may challenge its validity on two independent grounds:  (1) absence of probable cause to sustain the lis pendens claim;  or (2) noncompliance with the procedural requirements of an effective lis pendens notice.  Dunham v. Dunham, 217 Conn. 34, 35, 584 A.2d 445 (1991).   The defendant has challenged the notice of lis pendens on the first ground only.   The parties argued about the notice but agreed that it is not relevant for the instant motion to discharge.

When the defendant seeks to dissolve the lis pendens, the plaintiff is required to establish probable cause to sustain the validity of the claims.   The burden of proof is upon the plaintiff to demonstrate that there is probable cause.   Our rules regarding the standard of proof for establishing probable cause are well settled.   It is important to remember that the plaintiff does not have to establish that he will prevail, only that there is provable cause to sustain the validity of the claim.  Village Line Corporation v. Children's Store, Inc., 31 Conn.App. 652, 657, 626 A.2d 813 (1993), citing Dow v. Condon, 525 A.2d 935 (1987).  “The legal idea of probable cause is a bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a man of ordinary caution, prudence and judgment, under the circumstances, in entertaining it.”  Wall v. Toomy, 52 Conn. 35, 36 (1884).  “Probable cause is a flexible common sense standard.   It does not demand that a belief be correct or more likely true than false.”   Texas v. Brown, 460 U.S. 730, 103 S.Ct. 1535 (1983).

In the instant motion, the defendant contends that the purchase of the property at the tax sale followed the statutory procedure.   The plaintiff does not raise notice as the basis for a nullity but argues that the taxes, which were the subject of the sale, were calculated by the tax collector in a fraudulent manner.   The plaintiff relies upon the findings in Newton v. Schott, 87 Conn. 142 (1913).   The plaintiff contends that this action stands for the proposition that it has authority to challenge the taxes assessed well after the tax sale auction.   The plaintiff refers to the challenge in Newton as supporting its position.   However, the Newton court does not stand for the proposition that the plaintiff has the authority to challenge the sale whether it is the amount or method well after the sale and outside of the statutory redemption period.   The property owner in Newton was following the one-year time period before recording to challenge the action for collection of taxes.   The plaintiff in the instant action did not challenge or exercise its rights of redemption within six months in accordance with C.G.S. § 12–157(f).  The court in Newton recognized, like this court, that the time period for validation of the sale and the recording of title must be defined.   In Newton the court recognized the “time beyond which the tax should not have precedence over the other liens” is a concern.   The plaintiff in the instant action had a six-month time period before the deed was recorded, but never challenged the sale.¹  The plaintiff had many avenues to challenge the amount of taxes which they now suggest is an issue but chose to do nothing.   Not only was there a six-month redemption period but there was a sixty-day period as a result of the filing of bankruptcy which the plaintiff chose not to utilize.   To follow the plaintiff's argument would ignore the validating statutes which apply to the tax sale auction by the municipality.

The plaintiff argues that it is impossible to bring an action for redemption, because it would be required to pay the very taxes that it challenges.   However, without this procedure the parties are left with no procedure absent a notice challenge.   Additionally, the payment of the taxes, if found illegal, improper or fraudulent would permit reimbursement to the plaintiff or if proper the plaintiff would only be paying what was due.   At any rate, this procedure would permit the plaintiff to challenge what it claims is an improper tax.²

The defendant relies upon the decision in Associates Financial Services of America, Inc. v. Sorenson, 46 Conn.App. 721, 700 A.2d 107 (1997), for support of its position that the plaintiff has no probable cause to challenge the tax sale and thus no basis to record a lis pendens on the property.   The Associates Financial Services action is not identical to the instant action but it discussed the issue of a remedy if there was misconduct on the part of the state official.   The Court first recognized that the actions and procedure in a tax sale are ministerial and thus the officials must comply with the statutes.   However, the Court indicated that in the event there was a situation where there is a claim of misconduct by the state officers, the law of this state “provides in substance, that the plaintiff is entitled to be made whole for any loss of property occasioned by the unauthorized conduct of the state official.”  Associates Financial Services of America, Inc., supra, 46 Conn.App. 727–28, citing Parratt v. Taylor, 451 U.S. 527, 542, 101 S.Ct. 1908 (1981).   This case supports the argument that there are other avenues of relief for the plaintiff and that the law does not support a finding that the sale is null and void.   To do so, as the defendant argued, would only create new law that would contradict a defined time for redemption and the recording of ownership to the purchaser.   An extension of the ability to challenge the sale well after the redemption period would only undermine the ability of the municipality to conduct a tax sale for fear by the purchaser that they would always be subject to a legal challenge.   The Court does not find that there is probable cause that the plaintiff will be successful in its action for quiet title as to the defendant 66 Hawley Road, LLC, and thus the Application for Notice to Discharge the Lis Pendens which was recorded on July 2, 2013 in the Town of Oxford land records is granted.

THE COURT

Brazzel–Massaro, J.

FOOTNOTES

FN1. This is interesting because the plaintiff filed an action for injunction before the sale which was not granted and then never addressed its challenges to the sale as noted herein for any time within the redemption period..  FN1. This is interesting because the plaintiff filed an action for injunction before the sale which was not granted and then never addressed its challenges to the sale as noted herein for any time within the redemption period.

FN2. It was also noted in argument that the plaintiff has other avenues of relief such as administrative appeals or the filing of a declaratory judgment.   Plaintiff did nothing even though it attempted to have the court issue an injunction before the file..  FN2. It was also noted in argument that the plaintiff has other avenues of relief such as administrative appeals or the filing of a declaratory judgment.   Plaintiff did nothing even though it attempted to have the court issue an injunction before the file.

Brazzel–Massaro, Barbara, J.