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188 Conn. App. 36
Conn. App. Ct.
2019
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Background

  • Town of Canton petitioned under Conn. Gen. Stat. § 12-163a for appointment of a receiver of rents after owner Cadle Properties failed to pay property taxes on contaminated commercial property occupied by M & S Associates (a Volkswagen dealer).
  • Court appointed Boardwalk Realty Associates, LLC as receiver to collect rents/use-and-occupancy and to apply funds in statutorily ordered priority.
  • Receiver served M & S with a notice to quit and sought authority to collect past-due rent; M & S intervened and challenged receiver actions and later objected to the receiver’s interim accounting.
  • M & S claimed § 12-163a required the receiver to pay all utilities supplied after the receiver’s appointment, including utility costs the tenant (M & S) had been paying post-appointment, and sought reimbursement of about $25,000.
  • Trial court approved the receiver’s updated interim accounting and held the receiver must pay utilities only if they are the owner’s obligation (e.g., common-area utilities), not tenant-incurred utilities. M & S appealed.

Issues

Issue Plaintiff's Argument (Town/Receiver) Defendant's Argument (M & S) Held
Whether § 12-163a requires the receiver to pay utilities incurred by tenants after appointment §12-163a should be read to require payment only of utilities that are the owner’s obligation (e.g., common areas) to preserve funds for taxes and receiver costs The statute’s plain text requires payment of all enumerated utilities supplied on/after appointment, without distinguishing owner vs. tenant obligations; receiver must reimburse tenant-paid utilities Receiver is required only to pay utilities that are the owner’s obligation; tenant-incurred utility costs need not be reimbursed
Whether literal reading of § 12-163a controls or extratextual evidence may be used Extratextual evidence and legislative intent support limiting receiver’s utility payments to owner obligations when literal reading produces unworkable/absurd results Plain meaning is clear and must be followed; receiverships are sui generis and strictly construed Where literal text yields unworkable result, courts may consult legislative history; legislative purpose shows §12-163a modeled on §16-262f and was not meant to make receivers pay tenant utilities

Key Cases Cited

  • Canton v. Cadle Properties of Connecticut, Inc., 316 Conn. 851 (Conn. 2015) (prior appeal addressing scope of receiver’s authority under §12-163a)
  • Rivers v. New Britain, 288 Conn. 1 (Conn. 2008) (use of §1-2z to consult legislative history when plain text yields unworkable result)
  • Southern Connecticut Gas Co. v. Housing Authority, 191 Conn. 514 (Conn. 1983) (purpose and limits of utility-related receivership statute §16-262f)
  • Connecticut Light & Power Co. v. DaSilva, 231 Conn. 441 (Conn. 1994) (treatment of statutory rent receiverships as sui generis)
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Case Details

Case Name: Canton v. Cadle Properties of Connecticut, Inc.
Court Name: Connecticut Appellate Court
Date Published: Feb 26, 2019
Citations: 188 Conn. App. 36; 204 A.3d 62; AC40484
Docket Number: AC40484
Court Abbreviation: Conn. App. Ct.
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    Canton v. Cadle Properties of Connecticut, Inc., 188 Conn. App. 36