Town of Stratford et al. v. Raphael Jacobelli et al. (2013)

MEMORANDUM OF DECISION

The town of Stratford (town) commenced this case against defendants who own T–Hangars at Sikorsky Memorial Airport (Sikorsky).   The town seeks a determination by a declaratory judgment whether the T–Hangars are realty or personalty.¹  The town's assessor, Melinda Fonda, notified the T–Hangar owners that she considers the T–Hangars to be real property subject to taxation.

The parties have stipulated as to the facts and have cross moved for summary judgment.²

The parties conferred with the Hon. George Levine, JTR, and agreed to develop a stipulation of facts.   The stipulation, dated August 6, 2012 (Entry No. 123) provides, in relevant part, as follows:

1. The hangars at the center of this dispute are owned by the defendants and consist of aircraft hangars described by the manufacturer as “portable” T–Hangars (herein “T–Hangars”) located on portions of land leased either from the City of Bridgeport or leased by the Defendant N.E. Hangar Development to defendants as sub-lessees and located at Sikorsky Memorial Airport (herein also “the Airport”), 1000 Great Meadow Road, Stratford, CT 06615–7577.

2. The T–Hangars are for the private use and purpose of their respective owners and/or occupants.

3. There are two primary locations on the Airport where the T–Hangars are situated:  the South Ramp which is accessed by the South Ramp entrance to Sikorsky ․ and the North Side, which is accessed from the North Side Entrance, both of which entrances are located on Main Street in Stratford.

4. The T–Hangars located at the South Ramp (“South Ramp T–Hangars”) are located on land owned by the City of Bridgeport with the land leased to the defendant, N.E. Hangar Development, LLC. Each T–Hangar was purchased and is privately owned by persons or entities populating the South Ramp (also known as abandoned runway 18).

5. The Defendant South Ramp T–Hangar owners are subtenants of N.E. Hangar Development, LLC, pursuant to written sublease agreements.

6. The T–Hangars located on the North Side of the Airport (“North Ramp T–Hangars”) are situated upon parcels of land owned by the City of Bridgeport and leased directly to the following Defendants:

a.  David Faile

b. N759ZD, LLC

c. BBL 201 Associates

d. Howard Altman

e.  Christopher Lavin

f. Austin Schraff

g. Lion Company, LLC

h. Herman Schuler

i.  ERL, Inc.

j. Raphael Jacobelli

k. Frank Fasanella

l. John Courtney

m. Krosno Group, Inc.

n. Kendall R. Troussaint

o.  O.G. Sexton

p. Aminkhan Aladin

q. Don Winters

r. Robert Jones III

s. Jack Bart

t. Morgan Kaolian

u.  RGG Realty Corp.

v. The Superior Plating Co.

w. Robert Gill

x. RebCourt, LLC

7. The land that the North Ramp T–Hangars sit on is leased from the City of Bridgeport pursuant to unwritten month to month leases.

8. The T–Hangars are designed for the storage of aircraft, storage of parts and accessories, and protection of aircraft from wind, storm, and sun damage.

9. The T–Hangars are structures consisting of steel tubes and sheet metal and the North Ramp T–Hangars come with a trailer hitch.

10. The North Ramp T–Hangars were previously moved from another location on the Airport to the present location.

11. Prior to the T–Hangars being located at the South Ramp, N.E. Hangar Development, LLC applied for building permits to the Stratford Building Department.

12. N.E. Hangar Development, LLC drafted materials ․ which state among other statements that “construction starts October 2007” and according to the same document, “the hangars are being installed as portable structures as required by the Town of Stratford.   These same building codes apply to mobile homes and back yard sheds.”   See Exhibit A, attached to stipulation of facts, Entry No. 123.

13. The South Ramp T–Hangars range in size from 998 square feet (SF) to 1,400 SF.

14. The North Side T–Hangars range in size from 805.59 SF to 1,171.05 SF.

15. The N.E. Hangar materials indicate that there are a number of options available for installation on the South Ramp T–Hangars including insulation, side or back doors, rubberized painted floor, work bench, and electronic hookups.

16. The T–Hangars are attached to the ground using anchors of varying lengths, up to two feet, that are inserted through the base of the T–Hangars and into the ground, fastening it down.   The anchors can be removed.

17. According to Summit Metal Systems, LLC's materials ․ some of the T–Hangars on the South Ramp have wind design load of “110 MPH exp.  ‘C.’ “

18. The T–Hangars have no footings.

19. Merger of ownership of the T–Hangars and the parcels of land on which they sit is not contemplated by the terms of the leases.

20. As to the North Ramp T–Hangars, there is a monthly rate schedule reflecting fees associated with the leases.

21. The T–Hangars are devoted to non-public use for the purpose of storage and housing of private aircraft.

22. On October 1, 2007 and October 1, 2008, the T–Hangars were included on the personal property portion of the Grand List.

23. On October 1, 2009, the T–Hangars were included on the real property portion of the Grand List.

Subsequently, the T–Hanger defendants submitted to the court three affidavits that the parties agreed to treat as part of the stipulation.   These affidavits may be summarized as follows.   David H. Faile, Jr., in an affidavit dated April 18, 2013, stated that he owns two T–Hangars “located on two parcels of land that I lease from the City of Bridgeport pursuant to a Month to Month Lease.”   It is Mr. Faile's understanding that Bridgeport “can end [his] lease at any time and I will be required to relocate my two T–Hangars to another parcel on the Airport or to another Airport entirely.”   His T–Hangars do not have any floor, but are anchored to the ground.   They are subject to debris and flooding.   He purchased his first T–Hangar for $27,000 and his second for $10,661.50.   Until 2009, the T–Hangars “were treated as Personal Property and I submitted personal property declarations for each of them.”   He was informed by letter dated 12/21/09 that the T- Hangars were being assessed as real property.   Paul A. Lange, the managing member of N759ZD, LLC which is a defendant in the town's action, filed an affidavit that appeared identical to Faile's affidavit, with the exception of the purchase price for their respective T–Hangars.

The affidavit dated April 22, 2013 of Eugene McGarry, managing member of N.E. Hangar Development, LLC, filed on behalf of the South Ramp sub-lessees, may be summarized as follows.   The T–Hangar parties to the South Ramp entered into a license and sublease agreement.   Each licensee paid “a one-time license fee for exclusive use of a portion of asphalt paving in which to tie down or provide a T–Hangar for storage of general aviation aircraft when not in use.   The license fee is paid to N.E. Hangar Development.”   In addition, each sub-lessee “pays monthly rent to N.E. Hangar Development for the cost of maintenance and upkeep of the surrounding asphalt apron and for administrative expenses for required coordination with the City of Bridgeport Aviation Commission.”   The T–Hangar itself may be purchased from any particular supplier and all of the pieces to the T–Hangar are erected on site.   All T–Hangars must be removed at the end of the license term unless sold sooner.   Finally, no T–Hangar is permanently affixed to the ground and is only located in a particular spot pursuant to license.

The court, with the consent of the parties, viewed the T–Hangars at issue on August 22, 2013.   The North Ramp T–Hangars had shed-like metal walls with wooden cross-beams mounted with studs.   The T–Hangars are affixed to the ground by means of heavy spikes driven through openings in the metal base into the asphalt paving.   The base of the each T–Hangar consists of a wooden frame of 2 x 4s.   There were trailer hitches so that the T–Hangars could be moved, but only by a heavy-duty truck.   The T–Hangars are subject to water in-take and the asphalt floor was wet at the time of the court's viewing.

The South Ramp T–Hangars appeared newer and in better condition than the North Ramp T–Hangars.   There were no visible hitches.   The South Ramp T–Hangars are identical to the North Ramp T–Hangars in having shed-like walls, cross-beams on the walls, attachment to the ground with heavy spikes, and wood frames on the bottom.   The South Ramp T–Hangars are larger than the North Ramp's and are more than one-story high.   The South Ramp T–Hangars open similar to a garage, with a door that lifts.   The T–Hangars are equipped with electricity.   The court also saw water on the asphalt floor.

Both the North Ramp and South Ramp T–Hangars were capable of being disassembled but it would require much effort as the spikes and boards would have to be removed and the walls collapsed.

The town has correctly asked the court to engage in the interpretation and factual application of two tax statutes under the declaratory judgment provisions of General Statutes § 52–29(a), which provide as follow:  “The Superior Court in any action or proceeding may declare rights and other legal relations on the request for such declaration, whether or not further relief is or could be claimed.   The declaration shall have the force of a final judgment.”

This statutory provision has been recognized as an appropriate vehicle by which to obtain a judicial determination of the proper construction of tax statutes.   See, e.g., Pepin v. Danbury, 171 Conn. 74, 368 A.2d 88 (1976) (action for a declaratory judgment determining whether the tax formula of the named defendant, and the levy of taxes pursuant thereto, is valid);  Kellems v. Brown, 163 Conn. 478, 313 A.2d 53 (1972), appeal dismissed, 409 U.S. 1099, 93 S.Ct. 911, 34 L.Ed.2d 678 (1973) (construction of a statute imposing tax on dividends and capital gains);  Spector Motor Service, Inc. v. Walsh, 135 Conn. 37, 61 A.2d 89 (1948) (declaratory judgment as to the validity and construction of the Corporation Business Tax Act of 1935).   The remedy of declaratory judgment is entitled to a “liberal construction” to bring about the legislature's intention.  Bysiewicz v. Dinardo, 298 Conn. 748, 757, 6 A.3d 726 (2010), quoting Sigal v. Wise, 114 Conn. 297, 301–02, 158 A. 891 (1932).³

Regarding the construction of tax statutes, our Supreme Court has stated:

“[I]ssues of statutory construction raise questions of law, over which we exercise plenary review ․ 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 ․ 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 ․” (Citation omitted;  internal quotation marks omitted.)  Kasica v. Columbia, 309 Conn. 85, 93, 70 A.3d 1 (2013).

Regarding real estate liable to taxation, the first statute referenced by the parties is § 12–64(a) that provides, in relevant part, as follows:

“All the following-mentioned property, not exempted, shall be set in the list of the town where it is situated ․ Dwelling houses, garages, barns, sheds, stores, shops, mills, buildings used for business, commercial, financial, manufacturing, mercantile and trading purposes, ice houses, warehouses, silos, all other buildings and structures, house lots, all other building lots and improvements thereon and thereto ․”

In listing the types of real property that are subject to tax, if not exempt, § 12–64 includes basically all real estate and improvements on it.   See R. Fuller, 9A Connecticut Practice Series:  Land Use Law and Practice (3d Ed.2007) § 45.2(a), p. 540.⁴

The court finds that the property listed in this statute is clear and unambiguous.  “When the words of a statute are clear and unambiguous, we assume that the words themselves express the legislature's intent and there is no need to look further for interpretive guidance.”  (Internal quotation marks omitted.)  Lauer v. Zoning Commission, 246 Conn. 251, 266, 716 A.2d 840 (1998).  “It is the duty of the court to interpret statutes as they are written ․ and not by construction read into statutes provisions which are not clearly stated.”  (Citation omitted;  internal quotation marks omitted.)   Luce v. United Technologies Corp., 247 Conn. 126, 133, 717 A.2d 747 (1998).

Here § 12–64(a) plainly states that a “shed” is an item of real property.   The court's view of the T–Hangars (as detailed above) leads it to conclude that the T–Hangars are similar to a shed.   In addition, the stipulation indicates that the T–Hangars are being used for the “storage of aircraft, storage of parts and accessories, and protection of aircraft from wind, storm, and sun damage.”   (Stipulation, ¶ 8.)   They have been described as metallic “structures [.]”  (Stipulation, ¶ 9, ¶ 12.)   Furthermore, “some of the T–Hangars on the South Ramp have a wind design load of '110 MPH exp.   C.' “ (Stipulation, ¶ 17).⁵

The court construes “shed” in its common and ordinary meaning, not in the strained interpretation urged by the defendants.   See, e.g., Germain v. Manchester, 135 Conn.App. 202, 209–10, 41 A.3d 1100 (2012).   A shed is a building with walls and a roof, and a T–Hangar is an equivalent.   See Tine v. Zoning Board of Appeals, 308 Conn. 300, 307–08, 63 A.3d 910 (2013).⁶

Courts outside of Connecticut have considered T–Hangars to be realty.   See, e.g., Gordon v. Morristown, 910 A.2d 836 (Vt.2006), where the trial court was reversed in its holding that a hangar, similar to those here, was not a fixture and not taxable as realty.

The Gordon court held that a Vermont statute, listing what was realty, made the trial court's fixture analysis irrelevant.   Under the statute, the hangar was a “building” in a broad sense, referring to any structure enclosing a space or sheltering contents.  “The hangar, as a structure designed to enclose an area for sheltering airplanes, is a building” and subject to real property tax.  Id., 303.   See also U.S. Aircraft Financing, Inc. v. Jankovich, 407 N.E.2d 287, 290 (Ind.App.1980):  “The real property conveyed was limited to two large hangars, a number of ‘T’ hangars and other structures.   The land upon which these buildings were located belonged to the Gary Municipal Airport.”

The defendants assert the special defense that the assessor's office placed the T–Hangars on the personal property list for the 2007 and 2008 tax years.   Therefore, they claim that the town is estopped from placing the T–Hangars on the list of real property.

The doctrine of municipal estoppel, however, does not apply to a circumstance where a reconsideration has been made as to subsequent tax years.   As the Supreme Court has stated, municipal estoppel might only be invoked in limited situations where an agent of the town was unjustified in making the change, and “only when special circumstances make it highly inequitable or oppressive to enforce” the changed position.  (Internal quotation marks omitted.)   Fadner v. Commissioner of Revenue Services, 281 Conn. 719, 727, 917 A.2d 540 (2007), quoting Dupuis v. Submarine Base Credit Union, Inc., 170 Conn. 344, 354, 365 A.2d 1093 (1976).

The defendants also raise the special defense that the town is subject to res judicata and cannot argue its position as this same claim was resolved in Bridgeport Aviation v. Stratford, Superior Court, judicial district of Fairfield at Bridgeport, Docket No. CV 03 0399689 (December 27, 2005) [40 Conn. L. Rptr. 511].   However, the court held in Bridgeport Aviation that Stratford did not have the power to assess taxes against Bridgeport Aviation for land that it leases at the airport (owned by Bridgeport) and is tax exempt under § 12–74.   Here, however, the town seeks not to tax the lessee of the land (in the prior case, Bridgeport's lessee, Bridgeport Aviation), but to place the owners of the T–Hangar structures on the real property tax list.   Therefore, res judicata does not apply.   See Barton v. Norwalk, 131 Conn.App. 719, 727, 27 A.3d 513 (2011).

The South Ramp T–Hangar defendants, through the McGarry affidavit, supra, point to a sublease and licensing agreement that shows that the T–Hangars are to be assembled on the site and must be removed at the end of the leased term.   The T–Hangar owners may purchase their T–Hangars from any supplier.   The town notes that the sublease is subject to renewal for up to twenty-five years.   In any event, our Supreme Court has stated that an agreement that a fixture was nevertheless to remain personalty may bind the parties to the agreement, but does not bind those outside of the contract.   See Old Farms Associates v. Commissioner of Revenue Services, 279 Conn. 465, 491, 903 A.2d 152 (2006), citing Hartlin v. Cody, 144 Conn. 499, 506, 134 A.2d 245 (1957).

The defendants raise other factual claims regarding the T–Hangars that the court does not find sufficiently probative.   The fact that the areas where the T–Hangars are placed are not public does not affect the court's interpretation of “shed” or “other buildings” in § 12–64(a).   Nor does the fact that occasionally the ground under the facility is subject to a water flow.   The stipulation and the court's inspection demonstrate the unlikelihood that the T–Hangars will be taken down once erected.   They are virtually permanent as any other building might be, even given that Bridgeport or N.E. Hangar Development, LLC could technically evict them under the terms of the leases.   Therefore, the court concludes that the T–Hangars that are the subject of this declaratory judgment action fall within the ambit of § 12–64(a).

The second statute that is before the court is § 12–74 that provides as follows:  “All property owned by any town or city, which is located in another town and used for the purposes of an airport, shall be exempt from taxation as long as it continues to be used for such purposes and as long as the town in which it is located has the same privileges as to the use of such airport as are possessed by the municipality owning the same;  but, if any such airport is leased to any person, association or private corporation, or is used in such manner as to become a source of profit to the municipality owning the same, the land so occupied and situated in any adjoining town or towns shall thereupon be subject to taxation.”   Under this statute, New Haven was held exempt from real estate taxation by the East Haven stemming from New Haven's ownership of Tweed–New Haven Airport.   See New Haven v. East Haven, 47 Conn.Sup. 594, 618, 822 A.2d 376 [31 Conn. L. Rptr. 184] (2001), aff'd, 263 Conn. 108, 818 A.2d 741 (2003).

The parties agree that § 12–74 also exempts the landowner, Bridgeport, from the town's real estate taxation with regard to Sikorsky.   The defendant T–Hangar owners also contend that the § 12–74 exemption applies to their ownership of the T–Hangar structures.   These are structures placed on land owned by Bridgeport through a direct lease for the North Ramp T–Hangars and through a sublease and license agreement for the South Ramp T–Hangars.

The court disagrees with the defendants.   Under the long-standing precedent of Russell v. New Haven, 51 Conn. 259, 262, 142 A. 800 (1883), the defendants are not taxed as a lessee of Bridgeport, but as owners of the T–Hangars.   This precedent has been followed in other states, see, e.g., Portland Terminal Co. v. Hinds, 39 A.2d 5, 8 (Me.1944), and at the United States Supreme Court in Jetton v. University of the South, 208 U.S. 489, 503 n.1, 28 S.Ct. 375, 52 L.Ed. 584 (1908).   The case of University of Hartford v. Hartford, 2 Conn.App. 152, 159, 477 A.2d 1023 (1984), recognizes Russell v. New Haven, but distinguishes it on the ground that the lessor had substantial control aver the activities of the owner of the building.   There is no showing of such control in this case.   The court concludes that Bridgeport's exemption under § 12–74 is not available to the T–Hangar owners.

Accordingly, for the foregoing reasons, the declaratory judgment is entered in favor of the town, without costs to any party.

Henry S. Cohn, Judge

FOOTNOTES

FN1. There are several T–Hangar owners who individually brought tax appeals against the town.   These cases were stayed by the Hon. George Levine, JTR, pending the outcome of the present declaratory judgment.   This decision addresses only the case brought by the town..  FN1. There are several T–Hangar owners who individually brought tax appeals against the town.   These cases were stayed by the Hon. George Levine, JTR, pending the outcome of the present declaratory judgment.   This decision addresses only the case brought by the town.

FN2. The town initially moved for judgment on the pleadings, to which the defendants objected in procedural grounds.   The town then filed a reply stating that its motion should be treated as one for summary judgment.   See reply, dated May 20, 2013, p. 5..  FN2. The town initially moved for judgment on the pleadings, to which the defendants objected in procedural grounds.   The town then filed a reply stating that its motion should be treated as one for summary judgment.   See reply, dated May 20, 2013, p. 5.

FN3. The town has met the provisions of Practice Book §§ 17–55 and 17–56, including the need for aggrievement and notice..  FN3. The town has met the provisions of Practice Book §§ 17–55 and 17–56, including the need for aggrievement and notice.

FN4. By contrast, General Statutes § 12–71(a) covers taxation by a municipality of “[a]ll goods, chattels and effects ․ belonging to any person who is a resident in this state ․” See also Northeast Datacom, Inc. v. Wallingford, 212 Conn. 639, 642, 563 A.2d 688 (1989)..  FN4. By contrast, General Statutes § 12–71(a) covers taxation by a municipality of “[a]ll goods, chattels and effects ․ belonging to any person who is a resident in this state ․” See also Northeast Datacom, Inc. v. Wallingford, 212 Conn. 639, 642, 563 A.2d 688 (1989).

FN5. For over 150 years under the law of fixtures, “[a] thing may be as firmly affixed to the land by gravitation as by clamps or cement.”   Snedeker v. Warring, 12 N.Y. 170, 175 (1854)..  FN5. For over 150 years under the law of fixtures, “[a] thing may be as firmly affixed to the land by gravitation as by clamps or cement.”   Snedeker v. Warring, 12 N.Y. 170, 175 (1854).

FN6. The same analysis applies if T–Hangars are considered as “all other buildings” under § 12–64(a)..  FN6. The same analysis applies if T–Hangars are considered as “all other buildings” under § 12–64(a).

Cohn, Henry S., J.