Case Title: Lincoln Street v. Town of Springfield

Citation: 

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1992-04-01T00:00:00Z

Document:
NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
  as well as formal revision before publication in the Vermont Reports.
  Readers are requested to notify the Reporter of Decisions, Vermont Supreme
  Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in
  order that corrections may be made before this opinion goes to press.


                                  No. 91-179


  Lincoln Street, Inc.                         Supreme Court

                                               On Appeal from
       v.                                      Windsor Superior Court

  Town of Springfield, Vermont,                April Term, 1992
  Bonnie Greer, Delinquent Tax
  Collector and John O'Brien,
  Finance Director



  Richard W. Norton, J.

  Agnes S. Hughes and George W. Lamb of Lamb & Hughes, P.C., Springfield, for
    plaintiff-appellant

  Stephen S. Ankuda of Parker & Ankuda, P.C., Springfield, for defendants-
    appellees



  PRESENT: Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.



       JOHNSON, J.    Plaintiff, Lincoln Street, Inc., appeals a decision
  granting summary judgment in favor of the Town of Springfield.  At issue is
  whether property owned by private individuals and leased to a nonprofit
  organization for public or charitable use is exempt from property tax
  pursuant to 32 V.S.A { 3802(4).  The trial court held that, because Lincoln
  Street leases the subject property from private owners, the property does
  not qualify for a public use tax exemption.  We affirm.
       The facts are not in dispute.  Lincoln Street is a private, nonprofit
  Vermont corporation that serves mentally retarded persons in Windham and
  Windsor Counties by operating a number of group residential homes.  Lincoln
  Street leases one such property from Stephen and Truddi Greene.  The terms
  of the lease agreement obligate Lincoln Street to pay annual personal and
  real property taxes assessed against the Greenes' property by the Town of
  Springfield.  Lincoln Street requested that Town exempt the property from
  such taxes, but the Town refused.  Instead, the Town placed a $577,000
  attachment on the property to insure the payment of back taxes.  Lincoln
  Street subsequently sought a declaratory judgment regarding the tax exempt
  status of the leased property.  The Town moved to dismiss or, in the
  alternative, for summary judgment.  The trial court held that Lincoln
  Street's request for a property tax exemption was foreclosed by the
  definition of "public use" developed by this Court in American Museum of
  Fly Fishing, Inc. v. Town of Manchester, 151 Vt. 103, 110, 557 A.2d 900, 904
  (1989), and granted summary judgment in favor of the Town.
       To prevail on a motion for summary judgment, the moving party must show
  that there are no genuine issues of material fact and that the moving party
  is entitled to judgment as a matter of law.  Kelly v. Town of Barnard, 155
  Vt. 296, 299, 583 A.2d 614, 616 (1990).
       At issue is the interpretation of the first clause of 32 V.S.A. {
  3802(4), (FN1) which provides a tax exemption for "[r]eal and personal estate
  granted, sequestered or used for public, pious, or charitable uses."  The
  first clause of subsection (4), unlike subsequent clauses, contains no
  express requirement of ownership.   Two years before Lincoln Street entered
  into its lease agreement, we considered at length the legislative and common
  law history of the statute and determined that, since at least 1886, three
  guiding principles were explicit or implicit in all decisions of this Court
  construing the legislative purpose of { 3802(4).  American Museum of Fly
  Fishing, 151 Vt. at 110, 557 A.2d  at 904.  Consequently, we clarified the
  interpretation of { 3802(4) by establishing a three-part test for
  determining whether a use is "public":
            (1) the property must be dedicated unconditionally to
            public use;

            (2) the primary use must directly benefit an indefinite
            class of persons who are part of the public, and must
            also confer a benefit on society as a result of the
            benefit conferred on the persons directly served; and

            (3) the property must be owned and operated on a not-
            for-profit basis.

  Id.
       Lincoln Street asks us to overrule American Museum of Fly Fishing and
  all other decisions that require a concurrence of ownership and operation as
  a qualification for a public or charitable use exemption.  Lincoln Street
  argues that the plain meaning of the first clause, when read independently,
  establishes direct and immediate use of property as the sole criterion for
  property tax exemption.  Secondly, Lincoln Street argues that case law
  before American Museum of Fly Fishing specifies use, not ownership, as the
  test.  Lastly, Lincoln Street argues that the trend in other jurisdictions
  is away from requiring both use and ownership.
       Lincoln Street relies on Town of Williston v. Pine Ridge School, Inc.,
  132 Vt. 439,