Tilcon Conn. v. Town of North Branford

Full title: TILCON CONNECTICUT, INC. v. TOWN OF NORTH BRANFORD

Court: Connecticut Superior Court, Judicial District of New Haven at New Haven

Date published: Aug 19, 2004

2004 Conn. Super. Ct. 12532 (Conn. Super. Ct. 2004)

37 CLR 750

Opinion

No. CV 04-0489089 S

August 19, 2004

MEMORANDUM OF DECISION RE MOTION TO STRIKE #102

THOMPSON, JUDGE.

Under General Statutes § 12-41(d)(1), "[a]ny person who fails to file a declaration of personal property on or before the first day of November, or on or before the extended filing date as granted by the assessor pursuant to section 12-42 shall be subject to a penalty equal to twenty-five percent of the assessment of such property . . ."

The plaintiff, Tilcon Connecticut, Inc. (Tilcon), which operates a rock quarry in North Branford, filed its declaration of personal property 20 days after the November 1 deadline. Based on information in that declaration, the North Branford tax assessor valued Tilcon's personal property at $8,581,150 and, because of the late filing, imposed a twenty-five percent penalty ($2,145,288), bringing the total assessment to $10,726,438. Roughly a month later — 109 days after the November 1 deadline — Tilcon filed a request to extend the filing date,¹ which the tax assessor denied. Tilcon then appealed the assessment to the North Branford board of assessment appeals. The board denied the appeal, and this appeal followed.

1 Tilcon filed its request to extend the filing date under General Statutes § 12-42, which provides in part: "The assessors may grant an extension of not more than forty-five days to file the declaration required pursuant to section 12-41 upon determination that there is good cause."

Tilcon appeals pursuant to General Statutes §§ 12-117a² (count one) and 12-119³ (count two). In count one, it claims that, because of the twenty-five percent penalty, "[t]he valuation . . . was not that percentage of its true and actual value on that assessment date, but was grossly excessive, disproportionate, inequitable and unlawful." (Complaint, Count 1, ¶ 7.) In count two, Tilcon claims (again because of the penalty) that "[t]he tax laid on [its] property was computed on an assessment which, under all the circumstances was manifestly excessive and could not have been arrived at except by disregarding the statutes for determining the valuation of such property . . ." (Complaint Count 2, ¶ 11.)

2 General Statutes § 12-117a provides in relevant part: "Any person . . . claiming to be aggrieved by the action of the board of tax review or the board of assessment appeals, as the case may be, in any town or city may, within two months from the date of the mailing of notice of such action, make application, in the nature of an appeal therefrom, with respect to the assessment list for the assessment year . . ."

3 General Statutes § 12-119 provides in relevant part: "When it is claimed that a tax has been laid on property not taxable in the town or city in whose tax list such property was set, or that a tax laid on property was computed on an assessment which, under all the circumstances, was manifestly excessive and could not have been arrived at except by disregarding the provisions of the statutes for determining the valuation of such property, the owner thereof . . . may, in addition to the other remedies provided by law, make application for relief to the superior court for the judicial district in which such town or city is situated."

The defendant, the town of North Branford (town), now moves to strike Tilcon's entire complaint on the ground that Tilcon has failed to state a claim for which relief can be granted.

"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); see Practice Book § 10-39. "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." (Internal quotation marks omitted.) Gazo v. Stamford, 255 Conn. 245, 260, 765 A.2d 505 (2001). "[I]t does not admit legal conclusions or the truth or accuracy of opinions stated in the pleadings." (Internal quotation marks omitted.) Doe v. Yale University, 252 Conn. 641, 694, 748 A.2d 834 (2000). "In ruling on a motion to strike, the court is limited to the facts alleged in the complaint. The court must construe the facts in the complaint most favorably to the plaintiff . . . If facts provable in the complaint would support a cause of action, the motion to strike must be denied." (Internal quotation marks omitted.) Faulkner v. United Technologies Corp., 240 Conn. 576, 580, 693 A.2d 293 (1997).

The town argues that Tilcon has failed to state a claim for which relief can be granted because its failure to file a timely declaration of personal property triggered a mandatory duty on the tax assessor's part to impose the twenty-five percent penalty.⁴ Tilcon counters that § 12-41 is directory, rather than mandatory, and that the tax assessor is, therefore, not required to assess a statutory penalty for a late filing. Tilcon argues, in the alternative, that its complaint alleges sufficient facts for which the court may provide equitable relief from the town's unlawful penalty.

4 In support, the town relies entirely on two cases that were decided before the legislature revised §§ 12-41 and 12-42: Feierstein v. North Branford, Superior Court, judicial district of New Haven, Docket No. 297930 (October 30, 1990, Mignone, J.), and LH Leasing Co. v. Waterbury, Superior Court, judicial district of Waterbury, Docket No. CV96 0132955 (May 14, 1997, Doherty, J.).

The first issue is whether the language in § 12-41(d)(1) is directory or mandatory. That section provides in relevant part: "Any person who fails to file a declaration of personal property on or before the first day of November, or on or before the extended filing date as granted by the assessor pursuant to section 12-42 shall be subject to a penalty equal to twenty-five percent of the assessment of such property . . ." (Emphasis added.) General Statutes § 12-41(d)(1). Tilcon argues, in essence, that the phrase "subject to" reflects a legislative intent to deprive the word "shall" of its mandatory nature.

The court could find only three Connecticut cases that interpreted the phase "shall be subject to," and each case affirmed its mandatory character. "In Vartuli v. Sotire . . . [our Supreme Court] interpreted the time limitation contained in the Coastal Management Act, General Statutes (Rev. to 1983) 22a-109(f) as mandatory because another subsection of the act provided that '[t]he coastal site plan review . . . shall be subject to the same statutory requirements as subsection (b) of section 8-7d for the purposes of determining the time limitations on the zoning commission in reaching a final decision.'" (Emphasis added.) Caron v. Inland Wetlands Watercourses Commission, 222 Conn. 269, 275, 610 A.2d 584 (1992). In Blodgett v. New Britain Trust Co., 108 Conn. 715, 719, 145 A. 56 (1929), our Supreme Court noted: "the statute is explicit and mandatory, 'the . . . interests of such beneficiaries shall be subject to such tax.'" (Emphasis added.) And in Braithwaite v. Wallingford, Superior Court, judicial district of New Haven, Docket No. 262168 (November 12, 1991, Healey, J.T.R.) ( 5 Conn. L. Rptr. 261, 6 C.S.C.R. 1104), the court explained that "[t]he payment of interest on delinquent taxes is mandatory. Section 12-146 is entitled 'Tax, when delinquent. Interest.' This statute provides inter alia when a tax becomes 'delinquent,' it 'shall be subject to interest from the date of such delinquent installment . . ." (Emphasis added.)

The Missouri Court of Appeals concluded likewise in Westrope Associates v. Director of Revenue, 57 S.W.3d 880 (Mo.App.W.D. 2001). There, a state statute required the plaintiff (a surplus lines insurance broker) to pay a surplus lines tax before the 16th of each year. Id., 882. The plaintiff's check reached the director of insurance revenue a day late, and the director assessed a $11,962.43 penalty (ten percent of the tax) against the plaintiff in accordance with the following statutory language: "Any tax imposed . . . which is delinquent in payment shall be subject to a penalty of ten percent of the tax." (Emphasis added.) Id., 881-82. The plaintiff argued that "the plain and clear language of [that section] requires the Director of Revenue to exercise his discretion to either impose or not to impose a 10% penalty, rather than to impose a penalty mandatorily." Id., 882. As here, the plaintiff in Westrope Associates premised its argument on the legislature's use of the phrase "subject to," which, it claimed, evinced a legislative intent that the penalty be discretionary. Id.

In rejecting this argument, the court noted that "[t]he dictionary definition of 'subject to' is '[l]iable, subordinate, subservient, inferior, obedient to; governed or affected by; provided that; provided; answerable for.' Black's Law Dictionary 1425 (6th ed. 1990)." Id., 883. The court continued: "The 'liable' definition of 'subject to' fits most easily into the context of [the statute]. The statute clearly states that a surplus lines tax which is delinquent shall be liable for a penalty of ten percent of the tax. This language does not indicate an intention by the legislature to permit the Director to exercise his discretion in imposing the tax. This reading of the statute is further supported by the fact that there is no language in the statute that would indicate the legislature's intention that the agency exercise discretion in imposing the penalty. The statute does not include any standards or criteria to guide the agency's exercise of its discretion. Nor does it allow the imposition of any graduated penalty." Id. Thus, the court concluded that "any surplus line tax that is delinquent 'shall be subject to a penalty of ten percent of the tax' is plain and free of ambiguity." Id.

Here, as in Westrope Associates, the first definition of "subject to" in Black's Law Dictionary — "liable" — fits naturally within the context of § 12-41(d)(1): "Any person who fails to file a declaration of personal property on or before the first day of November . . . shall be [liable for] a penalty equal to twenty-five percent of the assessment of such property." Further, despite Tilcon's claim to the contrary, the statute contains no language to suggest that the legislature intended that the tax assessor exercise any discretion in imposing either the tax or the penalty. Tilcon claims that when the legislature revised §§ 12-41 and 12-42, it gave "discretion in situations where the 25% penalty is 'onerous' on a taxpayer that was not blatantly attempting to circumvent the law." (Emphasis in original.) (Tilcon's Brief, p. 11.) There is absolutely no language in either section to support that statement. Cf. General Statutes § 8-12⁵ (statute containing graduated fines, with amount depending on whether violation was wilful).

5 General Statutes § 8-12 provides in relevant part: "The owner or agent of any building or premises where a violation of any provision of such regulations has been committed or exists shall be fined not less than ten nor more than one hundred dollars for each day that such violation continues; but, if the offense is wilful, the person convicted thereof shall be fined not less than one hundred dollars nor more than two hundred and fifty dollars for each day that such violation continues, or imprisoned not more than ten days for each day such violation continues or both . . ." (Emphasis added.)

Tilcon also argues that the word "shall," as employed in § 12-41(d)(1), is directory, not mandatory, because it is a matter of convenience, not substance. The court disagrees. Tilcon relies on three cases that are readily distinguishable from the present case: United Illuminating Co. v. New Haven, 240 Conn. 422, 692 A.2d 742 (1997); Crest Pontiac Cadillac, Inc. v. Hadley, 239 Conn. 437, 685 A.2d 670 (1996); and Katz v. Commissioner of Revenue Services, 234 Conn. 614, 623, 662 A.2d 762 (1995). In each case, the Supreme Court interpreted a statute that contained the word "shall" and concluded that, despite the presence of that word, each statute was directory, rather than mandatory.⁶ Yet the statutes imposed either a time or a notice requirement, and "in the context of time and notice requirements, the Connecticut appellate courts have often found the word 'shall' to be directory rather than mandatory." Dornemann v. Dornemann, 48 Conn.Sup. 502, 514, 850 A.2d 273 (2004).

6 In United Illuminating Co. v. New Haven, supra, 240 Conn. 463-64, the relevant statute, General Statutes § 12-53(c), imposed a notice requirement: "Section 12-53(c) provides that '[i]f the assessor or board of assessors' increases or decreases the value of any taxable property under the provisions of § 12-53(b), 'they shall, within thirty days of such hearing or any adjournment thereof give [the taxpayer] notice thereof in writing by mailing the same, postage prepaid, to his last-known address and the same shall be held to be sufficient.'" In Crest Pontiac Cadillac, Inc. v. Hadley, supra, 239 Conn. 445, the relevant statute, General Statutes § 4-180(c), imposed a notice (mailing) requirement: "The [agency's] final decision shall be delivered promptly to each party or his authorized representative, personally or by United States mail, certified or registered, postage prepaid, return receipt requested. The final decision shall be effective when personally delivered or mailed or on a later date specified by the agency." (Internal quotation marks omitted.) And in Katz v. Commissioner of Revenue Services, supra, 234 Conn. 616 n. 2, the relevant statute, General Statutes § 12-515, imposed a time requirement: "Not later than ninety days following receipt of such claim for refund the commissioner shall determine whether such claim is valid . . ." (Internal quotation marks omitted.)

Here, the relevant statute (§ 12-41(d)(1)) imposes neither a time nor a notice requirement, but, rather, a penalty requirement. As such, this case is more akin to Santiago v. Slate, 261 Conn. 533, 540, 804 A.2d 801 (2002), in which the Supreme Court addressed whether "the certification requirement of [General Statutes] § 54-95(a)⁷ is mandatory or directory." To resolve that issue the court set forth the following test: "The test to be applied in determining whether a statute is mandatory or directory is whether the prescribed mode of action is the essence of the thing to be accomplished, or in other words, whether it relates to a matter of substance or a matter of convenience . . . If it is a matter of substance, the statutory provision is mandatory. If, however, the legislative provision is designed to secure order, system and dispatch in the proceedings, it is generally held to be directory, especially where the requirement is stated in affirmative terms unaccompanied by negative words." (Internal quotation marks omitted.) Id.

7 General Statutes § 54-95(a) read in part: " No appeal may be taken from a judgment denying a petition for a new trial unless, within ten days after the judgment is rendered, the judge who heard the case or a judge of the Supreme Court or the Appellate Court, as the case may be, certifies that a question is involved in the decision which ought to be reviewed by the Supreme Court or by the Appellate Court."

Based on that test, the court concluded that the certification requirement in § 54-95(a) is mandatory. Id. In doing so, the court explained that "an important legislative policy objective of § 54-95(a) is to discourage frivolous appeals. The certification requirement of § 54-95(a) is the means chosen by the legislature to accomplish that end. The fact that the certification requirement is integral to a fundamental objective of the statute strongly supports the conclusion that the certification requirement is mandatory." Id., 541. The same holds true here: the legislative policy objective is to encourage people to file a declaration of personal property on or before the first day of November, and the penalty requirement of § 12-41(d)(1) is the means chosen to accomplish that end. Because the penalty requirement is essential to the statute's purpose, the court concludes that it is mandatory.

This conclusion is supported by the fact that § 12-42 — which is referenced in § 12-41, and which authorizes the tax assessor to extend the date of filing by not more than forty-five days — employs the word "may" in the very first sentence: "The assessors may grant an extension of not more than forty-five days to file the declaration required pursuant to section 12-41 upon determination that there is good cause." General Statutes § 12-42. Thus, "[t]he words 'shall' and 'may' must then be assumed to have been used with discrimination and a full awareness of the difference in their ordinary meanings." Builders Service Corp. v. Planning Zoning Commission, 208 Conn. 267, 304-05, 545 A.2d 530 (1988). Moreover, § 12-42 provides that, if no declaration is filed, "the assessors shall fill out a declaration including all property which the assessors have reason to believe is owned by the person for whom such declaration is prepared, liable to taxation, at the percentage of its actual valuation . . . and add thereto twenty-five per cent of such assessment." (Emphasis added.) Again, no discretion.

The second issue is whether Tilcon alleges sufficient facts in its complaint for which the court may provide equitable relief from the town's penalty. Tilcon argues that, under 12-117a, the court may exercise its broad discretionary power to grant equitable relief from the unfair, disproportionate tax burden thrust upon it. The court disagrees.

"Section 12-117a, which allows taxpayers to appeal the decisions of municipal boards of tax review to the Superior Court, provide[s] a method by which an owner of property may directly call in question the valuation placed by assessors upon his property . . . In a § 12-117a appeal, the trial court performs a two-step function. The burden, in the first instance, is upon the plaintiff to show that he has, in fact, been aggrieved by the action of the board in that his property has been overassessed . . . In this regard, [m]ere overvaluation is sufficient to justify redress under [§ 12-117a], and the court is not limited to a review of whether an assessment has been unreasonable or discriminatory or has resulted in substantial overvaluation." (Citations omitted; internal quotation marks omitted.) Konover v. West Hartford, 242 Conn. 727, 734-35, 699 A.2d 158 (1997). " Only after the court determines that the taxpayer has met his burden of proving that the assessor's valuation was excessive and that the refusal of the board of tax review to alter the assessment was improper . . . may the court then proceed to the second step in a § 12-117a appeal and exercise its equitable power to 'grant such relief as to justice and equity appertains . . .'" (Emphasis added.) Id., 735.

Here, Tilcon alleges that the tax assessor's valuation of its personal property was excessive, disproportionate, etc., solely because of the penalty imposed under § 12-42(d)(1). Having already found that the tax assessor had a mandatory duty to impose that penalty, the court concludes that Tilcon has failed to allege sufficient facts to prove that the tax assessor's valuation was excessive.

The motion to strike is granted.

Thompson, J.