Argued
November 13, 2018
Procedural
History
Petition
for the appointment of a receiver of rents, brought to the
Superior Court in the judicial district of Hartford and tried
to the court, Graham, J.; judgment granting
the petition and appointing Boardwalk Realty Associates, LLC,
as receiver of rents; thereafter, the court granted the
receiver's motion to modify the order of appointment and
granted the motion to intervene as a party defendant filed by
M & S Associates, LLC; subsequently, the court denied the
intervening defendant's motion to remove the receiver,
and the intervening defendant appealed to this court, which
reversed in part the trial court's judgment and remanded
the case with direction to deny the receiver's motion to
modify the receivership orders, and the plaintiff, on the
granting of certification, appealed to the Supreme Court,
which reversed this court's judgment in part and remanded
the case to this court with direction to affirm the judgment
of the trial court granting the receiver's motion for
modification allowing the collection of back rent allegedly
due; thereafter, the court, Scholl, J.,
granted the receiver's motion to approve its interim
accounting report and to disburse funds, and the intervening
defendant appealed to this court. Affirmed.
Eric
H. Rothauser, for the appellant (intervening defendant).
Logan
A. Carducci, with whom were Daniel J. Krisch and, on the
brief, Kenneth R. Slater, Jr., for the appellee (plaintiff).
Keller, Prescott and Pellegrino, Js.
OPINION
KELLER, J.
On
April 26, 2011, the plaintiff, the town of Canton (town),
filed a petition for an appointment of a receiver of rents
after the named defendant, Cadle Properties of Connecticut,
Inc. (Cadle), failed to pay property taxes on real property
it owns at 51 Albany Turnpike in Canton. The court granted
the petition on June 20, 2011. In this appeal, the
intervening defendant, M & S Associates, LLC, which
currently occupies the subject property, appeals from the
trial court's post-judgment order approving an interim
accounting filed by the receiver of rents, Boardwalk Realty
Associates, LLC (receiver).[1] The defendant claims that the
trial court erred in granting the receiver's motion for
approval of the interim accounting by misconstruing General
Statutes § 12-163a[2] and finding that the receiver is not
required to pay, from the date of the receiver's
appointment, the defendant's utility costs at the subject
property. We disagree.
In a
prior appeal, our Supreme Court set forth the following
undisputed facts and procedural history, all of which are
relevant to the present appeal:[3] ‘‘[Cadle] . . . is
the owner of real property in Canton . . . . After Cadle
effectively abandoned the property, which is . . .
environmentally contaminated[4] . . . the town . . . filed a
petition seeking the appointment of a receiver of rents
pursuant to § 12-163a. The petition alleged that Cadle
had failed to pay real property taxes due to the town in the
amount of $362, 788.59, plus interest and lien penalties, for
a total amount due of $884, 263.04.[5] The petition further alleged
that, during all relevant periods, the property was occupied
by a Volkswagen dealership owned by [the defendant], which
had a legal obligation to pay rent to Cadle. The court,
having found that Cadle owed the town taxes . . . granted the
petition to appoint the receiver, and issued orders
authorizing the receiver to collect all rents or use and
occupancy payments due with respect to the property.
‘‘After
the receiver served the [defendant] with a notice to quit
possession of the property on the ground of nonpayment of
rent, the [defendant] filed a motion to intervene in the
town's action against Cadle in order to challenge the
receiver's authority to take legal action against it.
Shortly thereafter, the receiver filed a motion to modify the
receivership order to authorize it to pursue an eviction of
the [defendant] in the event of nonpayment of rent, to lease
the property to a new tenant, and to use all legal process to
collect back rent. Prior to acting on the [defendant's]
pending motion to intervene, the court granted the
receiver's motion to modify without objection.
‘‘Subsequently,
the trial court granted the [defendant's] motion to
intervene in the action. The [defendant] then filed a motion
to remove the receiver, asserting, inter alia, 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 taxes and prior rents. The court denied the
motion for removal . . . .'' (Footnotes added and
omitted.) Canton v. Cadle Properties of
Connecticut, Inc., 316 Conn. 851, 854-55, 114 A.3d 1191
(2015). The defendant appealed from the court's denial of
its motion for removal. As noted previously, the defendant,
in part, prevailed in its appeal because our Supreme Court
ruled that the receiver only had authority under the statute
‘‘to use legal process to collect past due rent .
. . .'' Id., 862. The case was remanded to
this court with direction to affirm the trial court's
judgment with respect to its conclusion that the receiver has
the authority to use legal process to collect past due rent.
Id., 853, 863.
On
March 3, 2017, the receiver filed an interim accounting, and
moved the trial court to approve said accounting and its
previous disbursal of funds. In relevant part, the defendant
objected on the ground that the accounting submitted
indicated that the receiver had failed to comply with the
order of priorities for distributions under § 12-163a,
in that ‘‘[t]here is no indication in the
accounting of any payments being applied to utilities
supplied after the date of the receiver's
appointment.''[6]
On
April 24 and May 15, 2017, the court held a hearing on both
the receiver's motion to approve its interim accounting
and the defendant's objection to it. During the April 24,
2017 hearing, the court requested that the receiver file a
more detailed accounting of the fees and expenses that it
claimed. The receiver complied by filing an updated
accounting on May 12, 2017. The defendant argued to the court
that § 12-163a (a) requires the receiver to pay the
costs for utilities due on and after its appointment,
notwithstanding the fact that the expired lease agreement
between the defendant and Cadle had provided that the
defendant would pay for the cost of its utilities or, in
continuing to operate its automobile dealership, the
defendant had been paying the utilities supplying service to
the dealership after the lease expired. The defendant pointed
to the language of § 12-163a, arguing that the statute
clearly did not distinguish between the owner's and the
tenants' utility obligations. Accordingly, the defendant
asserted that it was the obligation of the receiver to
reimburse it for approximately $25, 000 that it had expended
for utilities provided to the property since the date of the
receiver's appointment.
The
receiver responded that the defendant's interpretation of
the statute was ‘‘tortured, '' and that
it would permit the defendant to ‘‘continue to
squat on the property and have its utilities reimbursed from
a nonexistent rent stream back into its
pocket.''[7] The receiver further asserted that the
intent of the statute was to pay utility bills owed to the
enumerated utilities by the owner/ landlord but not those
owed by the tenants. It declared that the defendant's
interpretation was ‘‘absurd'' because it
would result in unjustly rewarding a non-rent-paying
‘‘squatter'' that had continued to
operate its business on the property and utilized utilities
only for its own business functions. The receiver, ...