Susan Hayden v. David K. Gardner (2016)

MEMORANDUM OF DECISION RE MOTION TO STRIKE (# 127)

This motion filed by the defendant Town of Lebanon (hereinafter defendant) requests that the court strike the third count of the plaintiff's amended complaint (no. 123), which seeks to contest the validity of a tax collectors deed as authorized by C.G.S. 12–159a(a).¹  The defendant claims the third count, which alleges fraud, is legally insufficient on the grounds that the plaintiff has not paid and has not demonstrated the ability to pay the taxes that were due and therefore a court sitting in equity should require repayment of the taxes before allowing a case for redemption to proceed.  The defendant requests that the plaintiff be required to deposit with the court the funds necessary to redeem to her property from the tax sale.  The sale was conducted pursuant to General Statute 12–157.²

This motion is denied to the extent it requests that the court order that funds be deposited by the plaintiff with the court.  Such an order is not within the court's purview in addressing a motion to strike.  The motion to strike as to the legal sufficiency of the third count is granted, however, because the allegations for a complaint of fraud are legally insufficient as they do not describe the damages claimed.

FACTS

The plaintiff, Susan Hayden, filed a three-count amended complaint on July 23, 2015.³  In that complaint the plaintiff alleges the following material facts.  At all times relevant, the plaintiff was the owner of the home located at 114 Lynch Road in Lebanon, Connecticut.  At all times relevant, Joyce Hofmann was the tax collector for the defendant, Town of Lebanon.  The plaintiff acquired the deed to her home from Jon Hayden by quitclaim deed, dated June 26, 2008.  David Gardner claims interest in the property through a tax collector's deed dated February 14, 2014 ⁴ issued by Hofmann.  The Gardner deed was recorded in the land records of the Town of Lebanon on August 1, 2014.  The plaintiff claims that Gardner's tax collector's deed is invalid because the issuance of the deed failed to conform to the requirements of Connecticut General Statutes §§ 12–157—12–159a.  The plaintiff asserts she never received notice of the sale, either before or after it occurred, as required by General Statutes § 12–157.  Further the plaintiff alleges the defendant did or should have known that the plaintiff did not receive notice of the sale.  Since the defendant knew that the plaintiff did not receive notice, the defendant caused the deed to be fraudulently executed and failed to provide the plaintiff with due process.

In its motion to strike, the defendant argues that because the plaintiff has not paid or has not offered to pay the taxes owed which renders the plaintiff's claim is legally insufficient.  The defendant argues that the taxes should be paid or at least held in escrow pending the outcome of the case.

DISCUSSION

“The purpose of a motion to strike is to contest ․ the legal sufficiency of the allegations of any complaint ․ to state a claim upon which relief can be granted.”  (Internal quotation marks omitted.)  Fort Trumbull Conservancy, LLC v. Alves, 262 Conn. 480, 498, 815 A.2d 1188 (2003).  “[A] a motion to strike challenges the legal sufficiency of a pleading and, consequently, requires no factual findings by the trial court ․ [The court] construe[s] the complaint in the manner most favorable to sustaining its legal sufficiency ․ Thus, [i]f facts provable in the complaint would support a cause of action, the motion to strike must be denied ․ Moreover, [the court notes] that [w]hat is necessarily implied [in an allegation] need not be expressly alleged ․ It is fundamental that in determining the sufficiency of a complaint challenged by a defendant's motion to strike, all well-pleaded facts and those facts necessarily implied from the allegations are taken as admitted ․ Indeed, pleadings must be construed broadly and realistically, rather than narrowly and technically.”  (Internal quotation marks omitted.)  Coppola Construction Co. v. Hoffman Enterprises Ltd. Partnership, 309 Conn. 342, 350, 71 A.3d 480 (2013).  “If any facts provable under the express and implied allegations in the plaintiff's complaint support a cause of action ․ the complaint is not vulnerable to a motion to strike.”  Bouchard v. People's Bank, 219 Conn. 465, 471, 594 A.2d 1 (1991).

General Statute 12–159a(a) states:  “(a) In any action brought to prove the invalidity of a collector's deed or enjoin tax sale proceedings, other than an action based on fraud, the court shall, if the complaining party is successful, order the complaining party to pay to the tax collector or to the person or persons claiming an interest pursuant to such deed, (1) amounts representing taxes, interest and other charges lawfully due from the complaining party at the time of such tax sale with interest from the date of such tax sale at the rate provided in section 12–157, and (2) the reasonable costs of payment of taxes, insurance premiums, repairs, maintenance and demolition of any structures constituting a nuisance, and the fair market value of any capital improvements made to the property by such persons, with interest at the rate provided in section 37–3a computed from the time of such expenditure or improvement.”

This section of the General Statutes has not been the subject of litigation which would clarify the necessary allegations necessary to support a successful challenge to a tax collector's sale.  What is clear from the review of this statute is that if the challenge is successful the court has the power to require the successful party to pay the underlying tax obligations and other expenses attendant to the sale as detailed in the statute.  In this case the plaintiff asserts that the defendant has acted fraudulently and thus the court will look at what must alleged to establish an actionable claim of fraud.

“The elements of a fraud action are:  (1) a false representation was made as a statement of fact;  (2) the statement was untrue and known to be so by its maker;  (3) the statement was made with the intent of inducing reliance thereon;  and (4) the other party relied on the statement to his detriment.”  (Internal quotation marks omitted.)  Reville v. Reville, 312 Conn. 428, 441, 93 A.3d 1076 (2014).

In this case implicit in the execution of the tax collector's deed is that statutory notice requirements pursuant to C.G.S. 12–157 have been followed.  The plaintiff alleges that the statutory notice requirements were not followed.  The plaintiff was entitled to rely upon the Town to follow the statutory framework.  The principal benefit to the plaintiff from the following of the statutory procedures would be that the plaintiff would have had notice of the imminent intent of the Town to sell her property to satisfy the municipal tax obligations.  Having notice of the Town's intent the plaintiff would then have had a period of time to put her finances in order to acquire the funds to satisfy the municipal tax obligation.  This complaint is silent as to the detriment that the plaintiff has suffered.  In her prayers for relief the plaintiff requests a judicial order nullifying the tax collector's deed.  The count is silent as to the plaintiff's ability to pay the underlying delinquent municipal taxes within the time frames provided by statute.

In this case the plaintiff does not sufficiently allege the claimed damages resulting from the defendant's alleged fraud in failing to follow the statutory requirements for a tax collector's sale.  Within that statutory framework the plaintiff would have had to actually satisfied the municipal taxes.

The defendant Town's motion to strike the third count is granted.

Cosgrove, J.

FOOTNOTES

FN1. General Statute 12–159a(a) states:  “(a) In any action brought to prove the invalidity of a collector's deed or enjoin tax sale proceedings, other than an action based on fraud, the court shall, if the complaining party is successful, order the complaining party to pay to the tax collector or to the person or persons claiming an interest pursuant to such deed, (1) amounts representing taxes, interest and other charges lawfully due from the complaining party at the time of such tax sale with interest from the date of such tax sale at the rate provided in section 12–157, and (2) the reasonable costs of payment of taxes, insurance premiums, repairs, maintenance and demolition of any structures constituting a nuisance, and the fair market value of any capital improvements made to the property by such persons, with interest at the rate provided in section 37–3a computed from the time of such expenditure or improvement.”.  FN1. General Statute 12–159a(a) states:  “(a) In any action brought to prove the invalidity of a collector's deed or enjoin tax sale proceedings, other than an action based on fraud, the court shall, if the complaining party is successful, order the complaining party to pay to the tax collector or to the person or persons claiming an interest pursuant to such deed, (1) amounts representing taxes, interest and other charges lawfully due from the complaining party at the time of such tax sale with interest from the date of such tax sale at the rate provided in section 12–157, and (2) the reasonable costs of payment of taxes, insurance premiums, repairs, maintenance and demolition of any structures constituting a nuisance, and the fair market value of any capital improvements made to the property by such persons, with interest at the rate provided in section 37–3a computed from the time of such expenditure or improvement.”

FN2. § 12–157. Method of selling real estate for taxes:(a) When a collector levies one or more tax warrants on real estate, he or she shall prepare notices thereof, containing the name of the taxpayer, a legal description of the real property or citation to an instrument in the land records, an assessor's map or another publicly available document identifying the real property's boundaries, the street address, if such real property has one, the amount of the tax or taxes due, including any interest and charges attributable to the property as of the last day of the month immediately preceding the notice, a statement that additional taxes, interest, fees and other charges authorized by law accruing after the last day of the month immediately preceding the notice are owed in addition to the amount indicated as due and owing in the notice, and the date, time and place of sale.  The collector shall post one notice on a bulletin board in or near the collector's office in the town where such real estate is situated, if any, or at some other exterior place near the office of the town clerk, which is nearest thereto;  one shall be filed in the town clerk's office of such town and such town clerk shall record and index the same as a part of the land records of such town, which recording shall serve as constructive notice equivalent to a lis pendens for all purposes, and one shall be sent by certified mail, return receipt requested, to the taxpayer and each mortgage, lienholder and other encumbrancer of record whose interest is choate and will be affected by the sale.  Such posting, filing and mailing shall be done not more than twelve and not less than nine weeks before the time of sale and shall constitute a legal levy of such warrant or warrants upon the real estate referred to in the notice.  Such collector shall also publish a similar notice for three weeks, at least once each week, in a newspaper published in such town, or in a newspaper published in the state having a general circulation in such town.  The first notice shall be published beginning not more than twelve and not less than nine weeks before the time of sale and the last shall be published not more than four weeks nor less than two weeks before such sale.  He shall also send by certified mail, return receipt requested, to the delinquent taxpayer and to each mortgagee, lienholder and other encumbrancer of record whose interest in such property is choate and will be affected by such sale, a similar notice which shall not be required to list information pertaining to properties in which the person to whom the notice is directed has no interest.  The notice shall be sent at least twice, the first not more than eight nor less than five weeks before such sale and the last not more than four weeks nor less than two weeks before such sale.  The notice shall be addressed to his or her place of residence, if known to the collector, or to his or her estate or the fiduciary thereof if the collector knows him or her to be deceased, or to the address, or the agent of such person, to which such person has requested that tax bills be sent.  If there is no address of such person, or if no such agent is given in the records of such town, the notice shall be sent to the place where such person regularly conducts business or other address as the collector believes will give notice of the levy and sale.  If a person is a corporation, limited partnership or other legal entity, the notice may be sent to any person upon whom process may be served to initiate a civil action against such corporation, limited partnership or entity or to any other address that the collector believes will give notice of the levy and sale.  If no place of residence or business is known and cannot be determined by the tax collector for any owner, taxpayer, mortgagee, lienholder or other encumbrancer whose interest in the property is choate and will be affected by the sale, in lieu of notice by certified mail as provided in this subsection, the notice, together with the list of mortgagees, lienholders, and other encumbrancers of record whose interests in the property are choate and will be affected by such sale, shall be published in a newspaper published in this state, having a general circulation in the town in which such property is located at least twice, the first not more than eight weeks nor less than five weeks before such sale and the last not more than four weeks nor less than two weeks before such sale.(b) The collector may, for any reason, adjourn such sale from time to time by causing public notice of such adjournment and the time and place of such adjourned sale to be given either by oral announcement or posting of a written notice at the time and place designated for the sale in the notices of such sale.  If the adjourned date is set for a date more than three days from the date of the original or rescheduled sale date, the tax collector shall provide a postage prepaid written notice of the new time and place of the sale to the delinquent taxpayer and each mortgagee, lienholder and other encumbrancer of record whose interest is choate and will be affected by the sale.(c) At the time and place stated in such notices, or, if such sale is adjourned, at the time and place specified at the time of adjournment as aforesaid, such collector (1) may sell at public auction to the highest bidder all of said real property, to pay the taxes with the interest, fees and other charges allowed by law, including, but not limited to, those charges set forth in section 12–140, or (2) may sell all of said real property to his municipality if there has been no bidder or the amount bid is insufficient to pay the amount due.(d) The collector shall post, at the time and place of the sale, a written notice stating the amount of all taxes, interest, fees and other charges authorized by law with respect to each property to be sold.  The tax collector may publish or announce any rules for the orderly conduct of the auction and the making of payment by successful bidders which are not inconsistent with the requirements of law.  The tax collector or the municipality may retain the services of auctioneers, clerks and other persons to assist the tax collector in the conduct of the sale and the cost of such persons paid for their services shall be added to the taxes due from the delinquent taxpayer.  If more than one property is sold, the tax collector shall apportion all shared costs equally among all the properties.(e) Within two weeks after such sale, the collector shall execute a deed thereof to the purchaser or to the municipality conducting the sale and shall lodge the same in the office of the town clerk of such town, where it shall remain unrecorded six months from the date of such sale.(f) Within sixty days after such sale, the collector shall cause to be published in a newspaper having a daily general circulation in the town in which the real property is located, and shall send by certified mail, return receipt requested, to the delinquent taxpayer and each mortgagee, lienholder and other encumbrancer of record whose interest in such property is choate and is affected by such sale, a notice stating the date of the sale, the name and address of the purchaser, the amount the purchaser paid for the property and the date the redemption period will expire.  The notice shall include a statement that if redemption does not take place by the date stated and in the manner provided by law, the delinquent taxpayer, and all mortgagees, lienholders and other encumbrancers who have received actual or constructive notice of such sale as provided by law, that their respective titles, mortgages, liens, restraints on alienation and other encumbrances in such property shall be extinguished.  After such notice is published, and not later than six months after the date of the sale or within sixty days if the property was abandoned or meets other conditions established by ordinance adopted by the legislative body of the municipality, if the delinquent taxpayer, mortgagee, lienholder or other encumbrancer whose interest in the property will be affected by such sale, pays to the collector, the amount of taxes, interest and charges which were due and owing at the time of the sale together with interest on the total purchase price paid by the purchaser at the rate of eighteen per cent per annum from the date of such sale plus any taxes and debts owed to the municipality that were not recovered by the sale and any additional charges under section 12–140, such deed, executed pursuant to subsection (e) of this section, shall be delivered to the collector by the town clerk for cancellation and the collector shall provide a certificate of satisfaction to the person paying the money who, if not the person whose primary duty it was to pay the tax or taxes, shall have a claim against the person whose primary duty it was to pay such tax or taxes for the amount so paid, and may add the same with the equivalent precedence, rate of interest and priority as the tax paid over other nongovernmental encumbrances but without precedence or priority over any state or municipal tax lien or any tax that was not yet due and payable when notice of the levy was first published to any claim for which he has security upon the property sold, provided the certificate of satisfaction is recorded on the land records but the interests of other persons in the property shall not be affected.  Within ten days of receipt of such amounts in redemption of the levied property, the collector shall notify the purchaser by certified mail, return receipt requested, that the property has been redeemed and shall tender such payment, together with the amount held pursuant to subparagraph (A) of subdivision (1) of subsection (i) of this section, if any, to the purchaser.  If the purchase money and interest are not paid within such redemption period, the deed shall be recorded and have full effect..  FN2. § 12–157. Method of selling real estate for taxes:(a) When a collector levies one or more tax warrants on real estate, he or she shall prepare notices thereof, containing the name of the taxpayer, a legal description of the real property or citation to an instrument in the land records, an assessor's map or another publicly available document identifying the real property's boundaries, the street address, if such real property has one, the amount of the tax or taxes due, including any interest and charges attributable to the property as of the last day of the month immediately preceding the notice, a statement that additional taxes, interest, fees and other charges authorized by law accruing after the last day of the month immediately preceding the notice are owed in addition to the amount indicated as due and owing in the notice, and the date, time and place of sale.  The collector shall post one notice on a bulletin board in or near the collector's office in the town where such real estate is situated, if any, or at some other exterior place near the office of the town clerk, which is nearest thereto;  one shall be filed in the town clerk's office of such town and such town clerk shall record and index the same as a part of the land records of such town, which recording shall serve as constructive notice equivalent to a lis pendens for all purposes, and one shall be sent by certified mail, return receipt requested, to the taxpayer and each mortgage, lienholder and other encumbrancer of record whose interest is choate and will be affected by the sale.  Such posting, filing and mailing shall be done not more than twelve and not less than nine weeks before the time of sale and shall constitute a legal levy of such warrant or warrants upon the real estate referred to in the notice.  Such collector shall also publish a similar notice for three weeks, at least once each week, in a newspaper published in such town, or in a newspaper published in the state having a general circulation in such town.  The first notice shall be published beginning not more than twelve and not less than nine weeks before the time of sale and the last shall be published not more than four weeks nor less than two weeks before such sale.  He shall also send by certified mail, return receipt requested, to the delinquent taxpayer and to each mortgagee, lienholder and other encumbrancer of record whose interest in such property is choate and will be affected by such sale, a similar notice which shall not be required to list information pertaining to properties in which the person to whom the notice is directed has no interest.  The notice shall be sent at least twice, the first not more than eight nor less than five weeks before such sale and the last not more than four weeks nor less than two weeks before such sale.  The notice shall be addressed to his or her place of residence, if known to the collector, or to his or her estate or the fiduciary thereof if the collector knows him or her to be deceased, or to the address, or the agent of such person, to which such person has requested that tax bills be sent.  If there is no address of such person, or if no such agent is given in the records of such town, the notice shall be sent to the place where such person regularly conducts business or other address as the collector believes will give notice of the levy and sale.  If a person is a corporation, limited partnership or other legal entity, the notice may be sent to any person upon whom process may be served to initiate a civil action against such corporation, limited partnership or entity or to any other address that the collector believes will give notice of the levy and sale.  If no place of residence or business is known and cannot be determined by the tax collector for any owner, taxpayer, mortgagee, lienholder or other encumbrancer whose interest in the property is choate and will be affected by the sale, in lieu of notice by certified mail as provided in this subsection, the notice, together with the list of mortgagees, lienholders, and other encumbrancers of record whose interests in the property are choate and will be affected by such sale, shall be published in a newspaper published in this state, having a general circulation in the town in which such property is located at least twice, the first not more than eight weeks nor less than five weeks before such sale and the last not more than four weeks nor less than two weeks before such sale.(b) The collector may, for any reason, adjourn such sale from time to time by causing public notice of such adjournment and the time and place of such adjourned sale to be given either by oral announcement or posting of a written notice at the time and place designated for the sale in the notices of such sale.  If the adjourned date is set for a date more than three days from the date of the original or rescheduled sale date, the tax collector shall provide a postage prepaid written notice of the new time and place of the sale to the delinquent taxpayer and each mortgagee, lienholder and other encumbrancer of record whose interest is choate and will be affected by the sale.(c) At the time and place stated in such notices, or, if such sale is adjourned, at the time and place specified at the time of adjournment as aforesaid, such collector (1) may sell at public auction to the highest bidder all of said real property, to pay the taxes with the interest, fees and other charges allowed by law, including, but not limited to, those charges set forth in section 12–140, or (2) may sell all of said real property to his municipality if there has been no bidder or the amount bid is insufficient to pay the amount due.(d) The collector shall post, at the time and place of the sale, a written notice stating the amount of all taxes, interest, fees and other charges authorized by law with respect to each property to be sold.  The tax collector may publish or announce any rules for the orderly conduct of the auction and the making of payment by successful bidders which are not inconsistent with the requirements of law.  The tax collector or the municipality may retain the services of auctioneers, clerks and other persons to assist the tax collector in the conduct of the sale and the cost of such persons paid for their services shall be added to the taxes due from the delinquent taxpayer.  If more than one property is sold, the tax collector shall apportion all shared costs equally among all the properties.(e) Within two weeks after such sale, the collector shall execute a deed thereof to the purchaser or to the municipality conducting the sale and shall lodge the same in the office of the town clerk of such town, where it shall remain unrecorded six months from the date of such sale.(f) Within sixty days after such sale, the collector shall cause to be published in a newspaper having a daily general circulation in the town in which the real property is located, and shall send by certified mail, return receipt requested, to the delinquent taxpayer and each mortgagee, lienholder and other encumbrancer of record whose interest in such property is choate and is affected by such sale, a notice stating the date of the sale, the name and address of the purchaser, the amount the purchaser paid for the property and the date the redemption period will expire.  The notice shall include a statement that if redemption does not take place by the date stated and in the manner provided by law, the delinquent taxpayer, and all mortgagees, lienholders and other encumbrancers who have received actual or constructive notice of such sale as provided by law, that their respective titles, mortgages, liens, restraints on alienation and other encumbrances in such property shall be extinguished.  After such notice is published, and not later than six months after the date of the sale or within sixty days if the property was abandoned or meets other conditions established by ordinance adopted by the legislative body of the municipality, if the delinquent taxpayer, mortgagee, lienholder or other encumbrancer whose interest in the property will be affected by such sale, pays to the collector, the amount of taxes, interest and charges which were due and owing at the time of the sale together with interest on the total purchase price paid by the purchaser at the rate of eighteen per cent per annum from the date of such sale plus any taxes and debts owed to the municipality that were not recovered by the sale and any additional charges under section 12–140, such deed, executed pursuant to subsection (e) of this section, shall be delivered to the collector by the town clerk for cancellation and the collector shall provide a certificate of satisfaction to the person paying the money who, if not the person whose primary duty it was to pay the tax or taxes, shall have a claim against the person whose primary duty it was to pay such tax or taxes for the amount so paid, and may add the same with the equivalent precedence, rate of interest and priority as the tax paid over other nongovernmental encumbrances but without precedence or priority over any state or municipal tax lien or any tax that was not yet due and payable when notice of the levy was first published to any claim for which he has security upon the property sold, provided the certificate of satisfaction is recorded on the land records but the interests of other persons in the property shall not be affected.  Within ten days of receipt of such amounts in redemption of the levied property, the collector shall notify the purchaser by certified mail, return receipt requested, that the property has been redeemed and shall tender such payment, together with the amount held pursuant to subparagraph (A) of subdivision (1) of subsection (i) of this section, if any, to the purchaser.  If the purchase money and interest are not paid within such redemption period, the deed shall be recorded and have full effect.

FN3. The first two counts of the complaint are filed against the defendant David Gardner and the third count is file against the defendant Town of Lebanon.  This motion to strike was filed by the Town of Lebanon and concerns only the third count of the amended complaint.  Since Gardner is not involved with this motion Town of Lebanon shall be referred to as the defendant..  FN3. The first two counts of the complaint are filed against the defendant David Gardner and the third count is file against the defendant Town of Lebanon.  This motion to strike was filed by the Town of Lebanon and concerns only the third count of the amended complaint.  Since Gardner is not involved with this motion Town of Lebanon shall be referred to as the defendant.

FN4. It is unclear to the court when the tax sale actually occurred and whether the statutory redemption period had expired prior to the execution of the deed.  General Statute 12–157(e) provides “within two weeks after such sale, the collector shall execute a deed thereof to the purchaser.”.  FN4. It is unclear to the court when the tax sale actually occurred and whether the statutory redemption period had expired prior to the execution of the deed.  General Statute 12–157(e) provides “within two weeks after such sale, the collector shall execute a deed thereof to the purchaser.”

Cosgrove, Emmet L., J.