Opinion
No. FST CV 06 5001565 S
September 4, 2007
MEMORANDUM OF DECISION
I. Background and Facts
This partition action was commenced in May 2006 and tried to the court on July 10, 2007 Following the taking of testimony, the court made a short visit to the subject property with the parties and counsel on the afternoon of July 10.
The property is located on and between Tokeneke Road and Locust Hill Road in Darien, Connecticut. Consisting of a little less than a third of an acre, the property is the site of three buildings: a residence with the address of 79 Locust Hill Road, a second residence with the address of 139 Tokeneke Road and between these two buildings a wood frame garage. The parties agree that the property is owned by the plaintiff OTN Osceola, LLC (OTN) which has an undivided one-quarter interest, by the defendant Roth-Natale, who has an undivided one-quarter interest and by the defendant Estate of Michael Duffy, Sheila Duffy, Executrix, which has an undivided one-half interest.
According to testimony and exhibits received at trial the property was originally purchased by Roth-Natale's grandmother in the 1920s. Exhibit (Ex.) A. It was transferred to Roth-Natale's grandfather, and in 1942 after he died, the property was inherited by John and Joseph Roth. Ex. D. Joseph Roth died in 1969 and his one-half interest in the property went to his widow, Mary Duffy Roth, in 1970. Ex. G. Mary Duffy Roth deeded her share to her nephew Michael Duffy in 1977. Ex. H. Michael Duffy and his wife Sheila Duffy lived together on the property at 79 Locust Hill Road beginning in 1966 until his death in 2006.
John Roth and his family lived at 139 Tokeneke Road. He deeded his half share to his daughters Nancy Roth-Natale and Jacqueline Roth in 1999 (Ex. I) and the latter lived at 139 Tokeneke Road until about 2004. In 2006 Jacqueline Roth sold her one-quarter share to OTN. Ex. K.
The managing director of OTN is Richard Sanford who has lived next door at 77 Locust Hill for 37 years. In its partition complaint OTN alleges that it, Roth-Natale and the Estate of Michael Duffy are co-owners of the property. OTN seeks a partition of the property pursuant to General Statutes §§ 52-495 et seq. and contends that a sale of the property and a division of the sale proceeds according to the parties' respective rights would promote the interests of the co-owners.
According to Sanford "OTN" stands for the first letters of the address 139 and "Osceola" is the original name for Tokeneke.
The parties have stipulated by means of a joint expert disclosure of Tom Preston of Redding Appraisals Group, LLC, that the value of the subject property is $580,000. Dkt. Entry 113.10.
Sanford testified that since OTN became an owner of the property he has had access only to the 139 Tokeneke Road residence. He had received a key to that house from Jacqueline Roth but had met with a chilly reception when he approached Roth-Natale and Sheila Duffy and offered to buy the remaining shares of the property. Sanford testified that the buildings on the property were deteriorating badly. At the 139 Tokeneke house he said the roof must be redone, gutters are falling off, and the bathroom is falling apart. No one has resided there since OTN bought its share of the property and the electricity has been turned off. He testified that the 79 Locust Hill house had serious problems with its main roof, porch roof and chimney. The Bilco door to the basement is gone, a window is covered by a tarpaulin, and animals and birds have been seen entering and leaving. Sanford also noted that a tree limb had recently fallen on the electric lines and torn them away from the house. He said that he had not seen Mrs. Duffy reside in the 79 Locust Hill house since he became a co-owner.
Sanford testified that he had obtained liability insurance for his share of the property, but was unable to obtain fire insurance. He presented information from the Darien Zoning Regulations from which one might conclude that any legally nonconforming use of the property might have been abandoned by the fact that the two residences had not been used much over his tenure as a co-owner.
Sanford paid $75,000 for his quarter share. He has subsequently made an offer of $65,000 to Roth-Natale and an offer to Duffy of $130,000 for their respective shares. He has not made any repairs to either residence. He gave two reasons for this: the lack of any relationship with his co-owners and a conclusion that the structures on the property were no better than "tear downs." Although Sanford initially contemplated the possibility of fixing up the residences for his children he testified that after buying his share of the property he concluded repairs were not feasible.
Roth-Natale testified as to the history of the property since her family had come into ownership in 1927. She moved out of 139 Tokeneke Road when she got married in 1970. Her sister Jacqueline lived there until 2004 when she moved out under somewhat mysterious circumstances. Roth-Natale says her intent is to make repairs to the property and live there. She testified she is not living there now because she is concerned about giving up her residence in public housing in Darien with the future ownership of this property uncertain, and because she would have to pay rent to OTN. She testified and presented an affidavit to the effect that she wants to continue to live in Darien, may soon exceed the income limits for public housing and cannot afford Darien rental rates. She testified that she has received a mortgage commitment on the property in the past for $200,000, and wants to buy OTN's quarter share of the property. She believes 139 Tokeneke Road is in "fair" condition with cosmetic repairs needed. She further testified that a letter she sent to Sanford in 2004 indicating an interest in selling her share of the property to him (Ex. 8) was a ruse to obtain information as to how much he was offering her sister Jacqueline for her share. Roth-Natale testified she had an agreement to purchase Jacqueline's share of the property, but her sister reneged.
Duffy testified about her history with the 79 Locust Hill residence. Her husband Michael lived there since 1944 when he was twelve years old. She and Michael raised three children there from 1966 on. She hopes to live there in the future near her children and friends. Since her husband's death in February 2006, she has only stayed in the house perhaps 15-20 nights. Since this lawsuit started she has been advised not to make any repairs until the future of the property is settled. She has made arrangements to have power restored since the tree limb hit the wires several weeks ago. She had water pipes repaired when there was a leak last winter. She believes the further repairs required are "cosmetic."
The court visited the property at the request of the plaintiff OTN. The court concludes the two residences are probably habitable, at least on a temporary basis, but that the required repairs are more than cosmetic. However, the court is not an expert in this field and did not receive any expert testimony on this subject. The small shared garage is quite dilapidated with significant sections of a wall missing.
II. The Court's Legal and Equitable Powers
General Statutes § 52-495 provides that:
CT Page 15714
Courts having jurisdiction of actions for equitable relief may, upon the complaint of any person interested, order partition of any real property held in joint tenancy, tenancy in common, coparcenary or by tenants in tail. The court may appoint a committee to partition any such property. Any decrees partitioning entailed estates shall bind the parties and all persons who thereafter claim title to the property as heirs of their bodies.
General Statutes § 52-500(a) states:
Any court of equitable jurisdiction may, upon the claimant of any person interested, order the sale of any property, real or personal, owned by two or more persons, when in the opinion of the court, a sale will better promote the interests of the owners. If the court determines that one or more of the persons owning such real or personal property have only a minimal interest in such property and a sale would not promote the interests of the owners, the court may order such equitable distribution of such property, with payment of just compensation to the owners of such minimal interest, as will better promote the interests of the owners.
General Statutes § 52-502 states in part:
(a) On any complaint for the sale of real or personal property, the court in which the case is pending may make any order necessary to protect the rights of all parties in interest and to carry the sale into effect.
(b) On any such complaint, the court may appoint a committee to make the sale, who shall pay into court the proceeds therefrom. The proceeds from the sale, after deducting such reasonable costs and expenses as the court directs, shall be distributed by order of court among all persons interested in the property, in proportion to their interests.
A partition action such as this, although a creature of statute, is an equitable action. Fernandes v. Rodriguez, 255 Conn. 47, 59 (2000). The defendants Roth-Natale and Duffy contend that a sale of the subject property would not promote the interest of the owners and that OTN is the owner of a minimal interest in the property and pursuant to the provisions of the last sentence of Section 52-500(a), this court should order compensation to OTN and equitable distribution of the property. OTN contends otherwise, pointing out that OTN's one-quarter interest cannot be considered minimal, certainly no more minimal than Roth-Natale's interest, and furthermore, that the substantial value of the property as a whole negates any concern about the costs of a court-ordered auction sale.
III. Discussion
The last sentence of Section 52-500(a) contains the words "minimal interest." The Connecticut General Assembly added the sentence to Section 52-500(a) after the Connecticut Supreme Court decision in Fernandes v. Rodriguez, supra, which held that the existing statutory language regarding partition actions in 2000 permitted only two kinds of relief: an actual physical division of the real estate or a partition by sale of the property (and division of the proceeds). In Fernandes the Supreme Court reversed a trial court order, which had been affirmed by the Appellate Court, requiring the defendant to execute a quitclaim deed to the plaintiff in return for a payment of money. In response to Fernandes and what appears to have been a clear invitation to rewrite the partition action statute (see Fernandes v. Rodriguez, supra, 255 Conn. 58) the General Assembly enacted Public Act 04-93 to add the last sentence to Section 52-500(a). This court's investigation has turned up no cases construing the phrase "minimal interest."
General Statutes § 1-2x provides that the meaning of a statute shall be ascertained from the text of the statute itself. If the meaning of the text is "plain and unambiguous and does not yield absurd or unworkable results," evidence of the statute's meaning from outside its text "shall not be considered." The Connecticut Supreme Court has stated that "[t]he test to determine ambiguity is whether the statute, when read in context, is susceptible to more than one reasonable interpretation" Carmel Hollow Associates Ltd. v. Bethlehem, 269 Conn. 120, 134 n. 19 (2004). This court finds that the meaning of "minimal interest" in Section 52-500(a) may be reasonably interpreted in more than one way and therefore, some assistance might be had from the legislative history. Tarnowski v. Socci, 271 Conn. 284, 287 n. 3.
The amendment was initially submitted by the judicial branch, and a representative of the judicial branch, testifying before the General Assembly's Judiciary Committee, proposed that the phrase "minimal interest" be left to judicial interpretation on a case-by-case basis and emphasized that "interest" should include more than monetary or legal interest and would, for example, include the fact that some owners were living and had lived on the property for a certain amount of time. Judiciary Committee Hearing Minutes, February 27, 2004, 001175-75. In a colloquy with Representative McMahon, the judiciary representative seemed to indicate that if a property was left to five children and one wanted to be bought out, the amendment could apply but not if one child wanted to buy out the other four. Id., 001178-79.
Following the trial the court requested counsel to brief the effect of Fernandes v. Rodriguez, supra. Their helpfulness in briefing that issue and the legislative history of P.A. 04-93 is appreciated.
On the floor of the Connecticut Senate Senator McDonald, co-chair of the Judiciary Committee, described the amendment as providing the opportunity for a court to "consider all of the merits and equitable considerations" in a partition action. Senate minutes, April 14, 2004, 001131. In the House of Representatives, Representative Stone said a "minimal interest" is not defined and would be determined by the court "under the totality of all the circumstances" but in "[his] opinion" a "50 percent interest would not be a minimal interest." House of Representative Minutes, April 22, 2004, 002026. Representative Farr stated that minimal interest was meant to mean what it means in "common English, a relatively small interest." Id. Representative Farr continued that such an interest in his view included a five or eight percent interest but not a 50% or 35% interest. Id., 002026-27.
The above legislative history provides three pieces of relevant information. First as noted the Public Acts 04-93 was designed to broaden the court's equitable powers in partition actions. Second, there was concern that ordering a sale of property by auction often caused expenses not in proportion to the value of the property. This concern as pointed out by OTN is not an issue in this case given the value of the property. Third, while certain percentages of ownership were seen by some legislators to fall clearly within the concept of minimal interest (e.g. less than 10 percent) or without (e.g. 35 or 50 percent) and interest could include more than just percentage of ownership, there remained a substantial area where the court, considering relevant factors, could exercise its judgment in determining whether an interest was minimal so as to justify exercising the option of ordering an owner to quitclaim his or her interest to another owner in return for just compensation.
The court must consider whether OTN's interest in the property may be considered minimal, and whether it is in the best interests of the parties to order a sale of OTN's interest to the defendants. Because of their family ties and history, and their shared interest in remaining on the property, the two defendants may be considered as one party in this analysis. As such, they own three-quarters of the legal interest in the property and OTN owns one-quarter. It is appropriate to consider as an interest in the property the decades that one or both of the defendants or their family members have owned and/or lived on the property. In this connection it is also appropriate to consider the stated desires of the defendants to return to or retain their status as residents on the property. In contrast, OTN has only owned the property a relatively short period and has never lived there, and has no present intention to do so. While Sanford claims an interest as a long-time neighbor whose neighboring property may be adversely affected by deterioration of the property, Sanford is not technically a party to this case. The court finds that the defendant's interest in the property taking into account the long-term and continuing ties to the property is greater by some uncalculable amount than 75 percent and OTN's interest is less than 25 percent. Thus, even if the defendants are not treated as one, OTN has the least interest of the three owners.
The court determines that OTN's interest is minimal, and that, pursuant to Section 52-500(a) it has the authority to order equitable distribution of the property. The court also finds that the equitable distribution will better promote the interests of the parties. Both Roth-Natale and Duffy were persuasive in stating their need and desire to remain and live on the property, although they were less persuasive as to their financial ability to accomplish this. Roth-Natale testified that she would be unable to live anywhere else in Darien if, as she fears she becomes ineligible for public housing. While this testimony might be characterized as conjecture, it is undeniable that most single unemployed woman might find it very difficult to own a home in this affluent area. In the same vein, Duffy testified as to her desire to stay in Darien near friends and doctors of long standing and to keep the property in family hands. OTN's interests are not promoted, but neither do they suffer injury. Since OTN has decided not to use the property for Sanford's children, its interest appears to be purely economic and the providing of just compensation will obviate any injury.
In sum, the court concludes that while there is no assurance that the defendants will have sufficient resources to restore the buildings for long-term residential use, the equities dictate they be given the opportunity to remain owners and at least potential residents on the property.
Having determined to order equitable distribution, the next issue is what is just compensation. The parties agree that the value of the property is $580,000. Awarding OTN a 25 percent interest in that amount, $145,000, affords it what might be considered a substantial windfall of nearly a 100 percent profit in less than eighteen months. "Just compensation" is usually associated with condemnation or eminent domain cases and the phrase actually appears in the Connecticut Constitution at Article First, Section 11. In that context it means a fair equivalent in money for property taken. "Ordinarily, although not necessarily, this is the market value of the property taken." Schnier v. Commissioner of Transportation, 172 Conn. 427, 431 (1977). The court sees no basis to stray from that interpretation.
Windfall or otherwise the court determines that OTN is entitled to 25 percent of the agreed fair market value of $580,000 as just compensation for its ownership interest in the property. Therefore, the court orders OTN to deliver a quitclaim deed to one or both defendants in consideration of $145,000. Each party to the transaction shall bear its own costs. The court orders the transaction to be completed by December 1, 2007. If the defendants or one of them are unable to purchase OTN's interest, the property shall be sold at a date to be determined after December 1, and the proceeds divided in accordance with the parties' respective interests.
SO ORDERED.