TOWN OF CANTON v. CADLE PROPERTIES OF CONNECTICUT, INC.,

SC 19225

Judicial District of Hartford

 

      Municipalities; Taxation; Receiver of Rents; Whether Trial Court Granted Powers to a Receiver of Rents that were not Authorized by General Statutes § 12-163a.  The defendant owns real property in the town of Canton.  The property is occupied by an automobile dealership owned by M&S Associates, LLC (M&S), which paid rent to the defendant.  In 2001, the town filed a petition seeking the appointment of a receiver of rents pursuant to General Statutes § 12-163a on the ground that the defendant had failed to pay real property taxes that it owed to the town.  Pursuant to § 12-163a, a municipality may seek the appointment of a receiver to collect rents from a property that is subject to delinquent property taxes.  The statute also provides that “[t]he receiver appointed by the court shall collect all rents . . . forthcoming from the occupants of the building in question in place of the owner . . . .”  The trial court appointed a receiver and subsequently granted the receiver the authority to (1) evict M&S in the event of a default on any lease; (2) lease the property to a new tenant; and (3) use all legal processes to collect back rent.  Thereafter, M&S was permitted to intervene in the matter, and it filed a motion for reconsideration of the court’s ruling appointing a receiver and a motion to remove the receiver.  It maintained that the receiver had exceeded its authority under § 12-163a by serving it with a notice to quit and by bringing an action to collect back rent.  The court denied the motions, and M&S appealed, claiming that the court exceeded its authority in granting powers to the receiver that were not permitted under § 12-163a.  The Appellate Court (145 Conn. App. 438) agreed, concluding that, although § 12-163a is ambiguous as to the meaning of the phrase, “collect all rents . . . forthcoming from the occupants,” the legislative history of the statute indicates that the legislature did not intend to permit a municipality to take the property from the owner as it may do in a tax foreclosure action.  It also opined that, because § 12-163a specifically allows a receiver to pay only those taxes that are due on or after the date of the receiver’s appointment, a consistent construction of the statute leads to the conclusion that a receiver may only collect rents that are forthcoming on or after the date of the receiver’s appointment, not rents that are allegedly overdue.  Accordingly, the Appellate Court held that the trial court lacked the authority under § 12-163a to permit the receiver to evict M&S, to lease the property to a new tenant, and to collect back rent.  In this appeal, the Supreme Court will determine whether the Appellate Court properly determined that § 12-163a did not permit the trial court to authorize a receiver of rents to: (1) evict a tenant from the property in the event of a default; (2) lease the property to a new tenant; and (3) use all legal processes to collect back rent allegedly due.