DocketNumber: No. CV00-0161142S
Citation Numbers: 2001 Conn. Super. Ct. 5741-eu
Judges: ROGERS, JUDGE.
Filed Date: 4/30/2001
Status: Non-Precedential
Modified Date: 4/17/2021
The plaintiff has filed a motion for summary judgment, arguing that there are no genuine issues of material fact, and that as a matter of law, the plaintiff has priority over the insurance proceeds for its three tax liens. The defendant has also filed a motion for summary judgment in objection to the plaintiff's motion on the grounds that there are no genuine issues of material fact, and as a matter of law, the plaintiff cannot claim the insurance proceeds for its tax liens.
Accordingly, the only issue presented by the cross-motions for summary judgment is whether the plaintiff is entitled to priority regarding the insurance proceeds. Because the court finds that the debt for the plaintiff's tax liens were extinguished at the time it took absolute title to the property, the court grants summary judgment in favor of the defendant.
The following facts are not in dispute. The plaintiff, Municipal Funding, purchased certain municipal tax liens1 for real estate taxes owed to the City of Waterbury for the grand list years 1993, 1994 and 1995, relating to property known as 300 Schrafts Drive, and otherwise known as the Red Bull Inn. The assignment to the plaintiff included an agreement with the City of Waterbury wherein the plaintiff agreed not to foreclose on the City of Waterbury's water and sewer liens, but would take the property subject to those liens and then pay them off with interest. (Defendant's Exhibit. D.) In addition to the plaintiff's tax liens, a company named Angram owns municipal tax liens on the subject property from tax list years 1996 and 1997, and the city of Waterbury continues to have municipal tax liens on the subject property from tax list years 1998 and 1999. (Mahler's Aff. ¶¶ 5-6.)
As a result of being assigned the tax liens, the plaintiff was also CT Page 5741-ew substituted as a party plaintiff in the pending foreclosure action to foreclose on its 1993 and 1994 tax liens. See First Union National Bankv. Gunterman, Superior Court, judicial district of Waterbury, Docket No. 137607. The 1995 tax lien was not included in the foreclosure action. On January 19, 1999, the court, West, J., entered a judgment of strict foreclosure with law days to commence running on March 30, 1999, and found that the combined debt for the two foreclosed tax liens was $167,529.53 plus interest and fees. (Plaintiff's Exhibit. A.) On March 29, 1999, the court, West, J., reopened the foreclosure judgment again and reentered a judgment of strict foreclosure with law days to commence running on May 25, 1999. In addition, the court declared that the appraised value of the subject property was $450,000. (Mahler's Aff. ¶¶ 12-15.)
On May 24, 2000, before title vested in the plaintiff, there was a fire at the subject property. At the time of the fire, Reidville Scott was the owner of the property and maintained an insurance policy on the property that covered fire damage. (Mahler's Aff. ¶¶ 13-16.) The plaintiff did not seek to reopen the foreclosure judgment and proceeded to take title to the property on June 2, 1999. (Mahler's Aff. ¶ 21.) On May 23, 2000, the insurer of the subject property issued a check to the plaintiff and the City of Waterbury2 in the amount of $342,542.99, in partial payment of the fire damage.
As a general rule, Connecticut state law allows a municipality precedence when foreclosing on its tax liens. General Statutes §
In 1993, the state legislature enacted legislation giving municipalities the right to sell municipal tax liens to private parties. CT Page 5741-ex "Any municipality . . . may assign, for consideration, any and all liens filed by the tax collector to secure unpaid taxes on real property. . . . The assignee or assignees of such liens shall have and possess the same powers and rights at law or in equity as such municipality and municipality's tax collector would have had if the lien had not been assigned with regard to the precedence and priority of such lien, the accrual of interest and the fees and expenses of collection. The assignee shall have the same rights to enforce such liens as any private party holding a lien on real property." General Statutes §
The plaintiff argues that because the fire occurred after the foreclosure action was initiated and before any party could redeem, the fire loss proceeds were still payable to the owner of the property at that time, subject to the plaintiff's tax liens. The plaintiff argues, therefore, that it can collect on the insurance proceeds to pay its tax liens even though it has already foreclosed on two out of the three tax liens. The plaintiff argues that the insurance proceeds should be disbursed according to the following priority: 1) the licensed public adjusters are due ten percent of each insurance check per an agreement entered in court; 2) the plaintiff should then be paid for its 1993 and 1994 tax liens; 3) the plaintiff should then be paid for its 1995 tax lien; 4) Angram should then be paid for its 1996 and 1997 tax liens; and 5) the City of Waterbury should then be paid for its 1998 and 1999 tax liens.
The City of Waterbury argues that when the plaintiff foreclosed on its 1993 and 1994 tax liens and took absolute title to the property, the debt to the plaintiff was extinguished. The city argues that the tax liens owned by Angram and the City of Waterbury have priority because they are the only remaining municipal tax liens.
With respect to the disbursement of fire insurance proceeds, General Statutes §
Accordingly, the issue before the court is whether the plaintiff can claim the insurance proceeds for its tax liens. The plaintiff argues that it is entitled to the insurance proceeds for its tax liens in addition to foreclosing on them. The plaintiff cites Burritt Mutual Savinqs Bank v.Transamerica Ins. Co.,
The Burritt ruling is clearly distinguishable from the facts of this case. In Burritt, our Supreme Court addressed the issue of whether a loss payable clause in a mortgage document entitled a mortgagee to fire insurance proceeds even though it foreclosed on the subject mortgage. See id., 76-78. The court held that because the loss payable clause "creates a direct contractual relationship between the mortgagee and the insurer," the mortgagee may have a continued right to the insurance proceeds despite the foreclosure proceeding. Id., 76-77.
Unlike Burritt, the plaintiff in this action was not a party to a loss payable clause giving the plaintiff a direct contractual right to the insurance proceeds. Plaintiff in this case has not even brought an action against the insurance company that insured the subject property.
With respect to the plaintiff's 1993 and 1994 tax liens, the plaintiff foreclosed on its 1993 and 1994 tax liens and acquired absolute title to the subject property. Accordingly, pursuant to Connecticut General Statutes §
Unlike its 1993 and 1994 tax liens, the plaintiff did not foreclose its 1995 tax lien. The issue that remains, therefore, is whether an assignee of tax liens, such as the plaintiff, can still hold a tax lien on property it now owns from a previous foreclosure judgement. As discussed above, Connecticut law provides that when a municipality forecloses on a tax lien and acquires absolute title to the property, all other liens or claims held by the municipality against the property are cancelled. See General Statutes §
"To determine the collectively expressed legislative intent, we look first to the language of the statute itself. If that language is plain and unambiguous, we go no further." Sanzone v. Board of PoliceCommissioners,
In analyzing the legislative history of §
The court, therefore, finds that §
The court notes that if the plaintiff believed the value of the property had changed because of the fire, it had legal remedies available to it. The plaintiff, however, failed to bring a motion to reopen the judgment after the fire occurred and failed to seek a deficiency judgment against the underlying debtor.
For the foregoing reasons, the only tax liens that remain on the subject property are those liens from the 1996 and 1997 grand lists, held by Angram, and those liens from the 1998 and 1999 grand lists, held by the City of Waterbury. "No . . . foreclosure of any lien shall divest the estate sold of any existing lien for other taxes." General Statutes §
For the foregoing reasons, the plaintiff's motion for summary judgment is denied and the City of Waterbury's motion for summary judgment is granted.
CHASE T. ROGERS, J.