Case Title: Our Lady of Ephesus House of Prayer, Inc. v. Town of Jamaica

Citation: 178 Vt. 35, 2005 VT 16, 869 A.2d 145

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 2005-01-28T00:00:00Z

Document:
Our Lady of Ephesus House of Prayer, Inc. v. Town of Jamaica (2004-001); 
178 Vt. 35; 869 A.2d 145

2005 VT 16

[Filed 28-Jan-2005]

       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.

                                 2005 VT 16

                                No. 2004-001

  Our Lady of Ephesus House of Prayer, Inc.	 Supreme Court

                                                 On Appeal from
       v.	                                 Windham Superior Court

  Town of Jamaica	                         September Term, 2004

  John P. Wesley, J.

  Christina Reiss of Gravel and Shea, Burlington, for Plaintiff-Appellant.

  Robin Stern of Potter Stewart, Jr. Law Offices, P.C., Brattleboro, for
    Defendant-Appellee. 

  PRESENT:  Dooley, Johnson, Skoglund and Reiber, JJ., and 
            Allen, C.J. (Ret.), Specially Assigned

       ¶  1.  DOOLEY, J.   Plaintiff, Our Lady of Ephesus House of Prayer,
  Inc. (OLEHOP), appeals a superior court judgment that declined to increase
  the portion of plaintiff's property exempt from property taxation beyond
  the amount determined in a previous ruling.  OLEHOP argues that all of its
  property is exempt as either a pious or public use.  We affirm.
   
       ¶  2.  OLEHOP is a nonprofit corporation organized in Vermont and
  granted tax-exempt status as a church under § 501(c)(3) of the Internal
  Revenue Code by the U.S. Internal Revenue Service (IRS).  Mary and Donald
  Tarinelli incorporated OLEHOP after visits to a shrine at the last
  residence of Mary, the mother of Christ, in Ephesus, Turkey.  The
  Tarinellis deeded OLEHOP 81.7 acres of land, subdivided from the land
  surrounding their own residence, in the Town of Jamaica.  A private road
  serves a common driveway for both the Tarinelli's house and OLEHOP's
  property. 

       ¶  3.  Plaintiff's by-laws describe it as a "private institution which
  exists for the purpose of nurturing the spiritual growth and development of
  all those who come into association for religious services, periods of
  meditation, and spiritual retreats."  In OLEHOP's application to the IRS
  for tax-exempt status, it represented itself as a church without membership
  and open to persons of all faiths.  Plaintiff further indicated that it
  holds services for weddings, stations of the cross, rosary, catechism, and
  occasional meetings for visiting priests.  OLEHOP described its
  ecclesiastical government as "Catholic Faith-this church does not have
  hierarchy." 

       ¶  4.  There are several buildings on OLEHOP's property, including a
  main barn, a smaller barn, three sheds and an abandoned sugarhouse.  In
  2001, the west end of the main barn was converted into a small chapel.  In
  2002, OLEHOP began work on a second, larger chapel next to the smaller one,
  and this work was largely completed in 2003 although the chapel remains
  unheated. Another part of the barn served as an indoor riding ring, and,
  following the collapse of the roof in this area, the space has been
  converted into outdoor parking.  Also, the stable area in the barn was
  converted into room units with bathrooms, and above that two units were
  constructed for visiting priests.  Next to the small chapel is a meditation
  garden and pathway with the Stations of the Cross.

       ¶  5.  The main part of OLEHOP's property is open and undeveloped. 
  Approximately 22.8 acres consists of fenced fields and pastures.  The
  remaining acreage is wooded, with an extensive network of bridle trails
  running through it.  Some of this woodland was sugared in the past.
   
       ¶  6.  The Jamaica listers set plaintiff's property at $511,700 in
  2000, and plaintiff grieved the assessment, claiming the entire property
  was exempt because it was a religious society.  In response, the listers
  adjusted the assessment to $341,500, and plaintiff filed for a declaratory
  judgment in superior court.  In that action, the court accepted that the
  property was used for "pious" purposes, a prerequisite for exemption from
  property taxation under 32 V.S.A. § 3802(4), but further concluded that a
  limiting provision, 32 V.S.A. § 3832(2), allowed only part of the property
  to be  exempt: a small portion of the barn renovated as a modest chapel,
  its lawn, the meditation garden and the pathway containing the Stations of
  the Cross.  Accordingly, the court granted plaintiff an exemption for ten
  percent of the barn's total value and its accompanying well and septic
  system, and for six acres containing the garden, lawn, and Stations of the
  Cross.  The total exemption was $38,494, and the resulting property value
  subject to tax was $473,206.

       ¶  7.  OLEHOP then undertook further renovations to the property,
  adding the large chapel, the room units and the parking area as described
  above, and sought another declaratory judgment, asking the court to
  reexamine the proportion of the property exempt from property taxes in
  light of the changes.  The renovations were incomplete in 2002 at the
  listers' assessment, but were "substantially complete" when the court
  issued its order in 2003.

       ¶  8.  In this second proceeding, plaintiff advanced a new theory. 
  Plaintiff argued that it was not a "religious society," under the operative
  language in the limitation of 32 V.S.A. § 3832(2), and that all of its
  property should be exempt under the "public use" exception of 32 V.S.A. §
  3802(4).  In the alternative, OLEHOP argued that even if it was a
  "religious society" engaged in pious uses, it was entitled to more than a
  ten percent property tax exemption.
   
       ¶  9.  The court found that there was no basis to exempt plaintiff's
  entire property.  Specifically, the court rejected plaintiff's claim that
  it is not a religious society.  The court did not articulate a definition
  for a religious society and acknowledged that the term was ambiguous.  It
  found, however, that "the Legislature must have intended to include any
  organization which, as Plaintiff did here, represented itself as a 'church'
  to the Internal Revenue Service."  Although OLEHOP argued that all of its
  property should be exempt as a "public use," the court rejected this claim
  because the property was unquestionably being used for pious purposes. 
  Further, the court found that the limitations of § 3832(2) would apply
  regardless of whether the use was defined as public or pious because the
  real estate is "owned or kept by a religious society."  The court denied
  plaintiff's request to expand the tax exemption from the 2001 order,
  finding that, even considering the changes made to the property, no greater
  proportion of OLEHOP's property was eligible for exemption.

       ¶  10.  We view the trial court's factual findings in the light most
  favorable to the party prevailing below and will set them aside only for
  clear error.  Brown v. Whitcomb, 150 Vt. 106, 109,