Title: Central Vermont Hospital, Inc. v. Town of Berlin

State: vermont

Issuer: Vermont Supreme Court

Document:

Central Vermont Hospital, Inc. v. Town of Berlin  CTRL_VT_HOSP_V_TOWN_OF_BERLIN.94-591; 164 Vt 456; 672 A.2d 474 [Filed 15-Dec-1995] 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. 94-591 Central Vermont Hospital, Inc., et al. Supreme Court On Appeal from v. Washington Superior Court Town of Berlin October Term, 1995 Alan W. Cheever, J. Richard Linton Brock, Sandra E. Levine and James S. Brock of Cheney, Brock, Saudek & Mullett, P.C., Montpelier, for plaintiffs-appellants Robert Halpert of Paterson & Walke, P.C., Montpelier, for defendant-appellee PRESENT: Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ. DOOLEY, J. Plaintiffs Central Vermont Hospital, Inc. (CVH) and Woodridge, Inc. appeal the Washington Superior Court's finding that the nursing home facility owned by Woodridge on land leased from CVH is subject to property taxation by defendant Town of Berlin. Plaintiffs claim that a nonprofit nursing home, which benefits hospital patients and is located on land leased to it by a hospital, is exempted from property taxation by 32 V.S.A. § 3802(4), and is not subject to taxation, under 32 V.S.A. § 3832(7), as property "used primarily for health . . . purposes." We affirm. CVH is a nonprofit hospital in Berlin, Vermont, providing acute, short-term health care to members of the public without regard to their ability to pay. In 1993, Woodridge began operation as a Level I & II skilled nursing care facility in Berlin on property owned by CVH and leased to Woodridge for one dollar per year. Admission to Woodridge is by order of physician. Woodridge accepts all patients regardless of their ability to pay as long as a bed is available, although a preference is given to CVH patients. The facility has run at a 99% occupancy rate, with 80% to 83% of the patients receiving Medicaid. The management of Woodridge and CVH is essentially the same, although the corporations have separate boards of trustees. Some of the trustees serve on both boards. The holding company of Woodridge and CVH is Central Vermont Medical Center, Inc. (CVMC). CVMC is the sole member of both Woodridge and CVH. Its mission is carried out by assigning short-term, acute-care responsibilities to CVH and long-term care responsibilities to Woodridge. In July of 1993, defendant sent a property tax bill to CVH for the twelve acres of land leased by CVH to Woodridge, and a bill to Woodridge for its nursing facility. The taxability of only the nursing home is at issue. Under 32 V.S.A. § 3802(4), real and personal property used for charitable purposes is exempt from local property taxes. There is no dispute that the Woodridge facility is a charitable use covered by § 3802(4), unless an exception applies. Defendant argues that Woodridge is "used primarily for health . . . purposes" and is therefore excepted from property tax exemption by § 3832(7). Plaintiffs respond that because of other exceptions within § 3832, the exception relied upon by defendants cannot extend to plaintiffs. Specifically, they argue that the Woodridge facility is directly connected to CVH and is exempt from property taxation as a "home" or a "hospital,"(FN1) and is not used for health purposes because "health" means being free from disease. The analytical framework for this dispute is set forth in Medical Ctr. Hosp., Inc. v. City of Burlington, 152 Vt. 611, 623, 566 A.2d 1352, 1358 (1989), in which we upheld the property tax exemption status of the Medical Center Hospital and related properties. As here, the City of Burlington argued that the hospital's property was used primarily for health purposes and therefore fit within the exception of § 3832(7). We noted that exceptions in § 3832(2), (6) specifically applied to hospitals under certain narrow circumstances, showing a legislative intent that the hospital would remain exempt if not within these exceptions. Thus, we held that because the term "hospital" is specifically used in § 3832(2) and (6), subsection (7)'s reference to property used for "health . . . purposes" could not be considered as encompassing hospital property since such an interpretation "would lead to the irrational result of rendering portions of subsections (2) and (6) meaningless." Id. at 622, 566 A.2d at 1358. The two exceptions relied upon in Medical Ctr. Hosp. are central to the issues before us because plaintiffs rely on language within them. Subsection (2) permits a town to tax "[r]eal estate owned or kept by a religious society other than a church edifice, a parsonage, the outbuildings of the church edifice or parsonage, a building used as a convent, school, orphanage, home or hospital . . . ." 32 V.S.A. § 3832(2) (emphasis added). Subsection (6) permits a town to tax "property owned or kept by an orphanage, home or hospital including diagnostic and treatment center not used for the purpose of such institution but leased to others for income or profit . . . ." Id. § 3832(6) (emphasis added). In Medical Ctr. Hosp., there was no question that the entity in dispute was a hospital. Here, the nature of Woodridge is central to the dispute. We understand plaintiffs to make three arguments from the statutory language: (1) Woodridge is a "home" for purposes of § 3832(2), (6); (2) Woodridge is directly connected to CVH so that its facilities are part of CVH for purposes of § 3832(2), (6); and (3) Woodridge is a treatment center and therefore a "home or hospital" as set out in §3832(6). We take these in turn. First, we do not read the term "home" in § 3832(2), (6) as including nursing homes. In reaching this conclusion, we emphasize the rationale of Medical Ctr. Hosp. that the "plain and ordinary language" of § 3832(7) does not create a general exception for hospitals, because the specific treatment of hospitals in § 3832(2), (6) showed a legislative intent to exempt hospitals from property taxation in most circumstances. Plaintiffs argue that we should use the same analysis herein because a skilled nursing facility is a home for purposes of § 3832(2), (6). This argument, however, sets up an unnecessary conflict between the subsections of § 3832. We have recognized "a fundamental rule of statutory construction that statutes dealing with the same subject matter should be construed with reference to each other as parts of one system." Emmons v. Emmons, 141 Vt. 508, 512, 450 A.2d 1113 , 1115 (1982). Where two statutes cover the same subject and one is more specific than the other, we harmonize them by giving effect to the more specific provision according to its terms. See State v. Buelow, 155 Vt. 537, 541, 587 A.2d 948, 951 (1990) (holding that more specific statutory sections on jurisdiction control). Further, we normally enforce a newer statute over an older one in conflict with the newer statute. Lomberg v. Crowley, 138 Vt. 420, 423, 415 A.2d 1324 , 1326 (1980). Subsection (7) of § 3832 was added in 1955, see 1955, No. 178, § 1 (property tax exemption does not include "land, buildings, and tangible personal property . . . used primarily for health or recreational purposes . . . "), whereas subsections (2) and (6) have existed since 1910 and 1933 respectively, see 1910, No. 32, § 1 (exemption does not include "lands or buildings owned or kept by a religious society . . . "); 1933, No. 10, § 1 (exemption does not include "any lands or buildings owned or kept by any orphanage, home or hospital and not used directly for the purpose of such institution, but leased to others for income or profit . . . "). Here, the more specific and later provision, § 3832(7), which clearly makes property used "primarily for health . . . purposes" taxable, controls over the more general and vague term "home," which can describe virtually any facility in which persons stay overnight for any reason. The way to harmonize the provisions is to conclude that "home" does not include property used primarily for health purposes. In this way, finding that § 3832(7) controls does not lead to "the irrational result of rendering portions of subsections (2) and (6) meaningless," the essential component of the Medical Ctr. Hosp. analysis. See 152 Vt. at 622, 566 A.2d at