Title: Ran-Mar, Inc. V. Town of Berlin

State: vermont

Issuer: Vermont Supreme Court

Document:

Ran-Mar, Inc. V. Town of Berlin (2005-311)

2006 VT 117

[Filed 17-Nov-2006]


       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.


                                 2006 VT 117

                                No. 2005-311


  Ran-Mar, Inc., R & G Properties II, Inc.       Supreme Court
  and R & G Properties III, Inc.                 On Appeal from
       v.                                        Washington Superior Court


  Town of Berlin and Joadi Tracey, Treasurer     May Term, 2006
  and Collector of Current and Delinquent  
  Taxes of the Town of Berlin

  Matthew I. Katz, J.

  Kathleen B. O'Neill and Philip H. White of Wilson & White, P.C.,
    Montpelier, for  Plaintiffs-Appellants.

  Marikate E. Kelley and Philip C. Woodward of Woodward & Kelley, PLLC, South
    Burlington, for Defendants-Appellees.


  PRESENT:  Reiber, C.J., Dooley, Johnson, Skoglund and Burgess, JJ.

        
       ¶  1.  BURGESS, J.   This case arises out of a group of tax sales by
  the Town of Berlin to satisfy delinquent tax payments for properties owned
  by three related corporate entities: Ran-Mar, Inc.; R & G Properties II,
  Inc.; and R & G Properties III, Inc. (collectively, "taxpayers"). 
  Taxpayers challenged the Town's actions, claiming that the Town exceeded
  its statutory taxing authority under 32 V.S.A.   5254(a) by collecting
  "interest" and "penalties" through the tax sales and by retaining the
  excess proceeds from the tax sales during the redemption period.  Taxpayers
  also claimed that the Town's  retention of the proceeds was an
  unconstitutional taking.  The superior court granted the Town's motion for
  summary judgment.  We affirm.

       ¶  2.  Taxpayers owned a number of properties in the Town of Berlin. 
  After the taxes on several of taxpayers' properties became delinquent, the
  Town gave notice of tax sales on seven of the properties.  The notices
  stated that in order to prevent the tax sale taxpayers would have to pay
  the Town the principal on the delinquent taxes, any accrued interest,
  penalties, legal fees, and costs, before the date of the tax sale. 
  Taxpayers did not pay the amount due to the Town, and the tax sales were
  conducted.  Following the tax sales, taxpayers requested that the Town
  provide an accounting of the sales and turn over to taxpayers the amount
  collected in excess of the taxes, costs, and fees owed by taxpayers.  The
  Town responded that it intended to hold the proceeds of the tax sales until
  the expiration of the one-year statutory redemption period.  Taxpayers
  brought suit in Washington Superior Court to set aside the tax sales and
  challenge the Town's retention of the tax sale proceeds during the period
  of redemption. (FN1)  Taxpayers moved for judgment on the pleadings.  The
  Town moved for dismissal or, alternatively, for summary judgment.  The
  court granted the Town's motion for summary judgment, upholding the tax
  sales and the Town's authority to hold the proceeds until the end of the
  redemption period.  This appeal followed.
                        
       ¶  3.  Taxpayers argue that the tax sales were invalid because the
  Town's notices  demanded that taxpayers pay accrued interest and penalties
  to prevent the tax sales.  Taxpayers contend that the Town is not
  authorized to collect interest or penalties through tax sales under 32
  V.S.A.   5254(a), which provides: "When the tax with costs and fees is not
  paid before the day of sale, the real property on which the taxes are due
  shall be sold to pay such taxes, costs and fees."  Taxpayers claim that the
  language "taxes, costs and fees" does not include "interest" or "penalties"
  as demanded by the Town.  Taxpayers also argue that the Town had no right,
  statutory or otherwise, to hold the excess proceeds of the tax sale during
  the period of redemption and that to do so was an unconstitutional taking
  of their property.

       ¶  4.  First, we address taxpayers' contention that the Town exceeded
  32 V.S.A.   5254(a) by collecting interest on the delinquent tax principal
  by way of tax sale.  Taxpayers argue that the Town cannot collect interest
  on delinquent taxes because interest is not specifically listed in  
  5254(a).  The superior court held that interest is considered to be an
  element of the tax obligation itself, and therefore did not need to be
  specifically listed in the statute to be collectible through tax sale. 
   
       ¶  5.  In construing a taxing statute, like all statutes, our
  primary goal is to implement the intent and purpose of the Legislature.  In
  re Loyal Order of Moose, Inc. Lodge # 1090, 2005 VT 31, ¶ 8, 178 Vt. 510,