Town of Lunenburg v. Unorganized Towns and Gores of Essex County
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Town of Lunenburg v. Unorganized Towns & Gores of Essex County (2005-165); 180 Vt. 578; 908 A.2d 424
2006 VT 71
[Filed 24-Jul-2006]
ENTRY ORDER
2006 VT 71
SUPREME COURT DOCKET NO. 2005-165
DECEMBER TERM, 2005
Town of Lunenburg, et al. } APPEALED FROM:
}
}
v. } Essex Superior Court
}
Supervisor and Board of Governors }
of the Unorganized Towns and Gores } DOCKET NO. 63-10-00 Excv
of Essex County }
Trial Judge: Walter M.
Morris, Jr.
In the above-entitled cause, the Clerk will enter:
¶ 1. Plaintiffs, several of the thirteen organized towns in Essex
County, sued the supervisor and Board of Governors of the six unorganized
towns and gores of Essex County (UTGs), seeking a declaratory judgment on
the disposition of a substantial sum of money in a UTG savings account. On
appeal, defendants challenge the superior court's order requiring them to
distribute the bulk of the funds to the organized towns of Essex County.
The trial court held that defendants' view that the statutes that set up
the funding mechanism for the UTGs allowed the supervisor to retain the
funds indefinitely conflicted with the plain language of the statutes.
Accordingly, the court ordered distribution of the funds to the thirteen
organized towns of Essex County. We affirm the judgment of the trial
court.
¶ 2. The six UTGs are Averill, Avery's Gore, Ferdinand, Lewis,
Warner's Grant, and Warren's Gore. Largely uninhabited, they occupy a
contiguous area in Essex County of approximately 103,000 acres and were
home to twenty-four registered voters and three schoolchildren in 2000.
¶ 3. The State controlled the UTGs' finances prior to January 1,
1969. In 1968, the Legislature created the position of supervisor of the
UTGs and shifted control of the UTGs' finances to the supervisor. 1967,
No. 331 (Adj. Sess.), §§ 1 & 3 (eff. Jan. 1, 1969). Under the new
financial system created by Act 331, an annual tax was assessed "upon the
grand list of all unorganized towns and gores in Essex county" at a rate of
three dollars. 32 V.S.A. § 4981. (FN1) The supervisor was directed to
meet the UTGs' expenses, including the salary of and the reasonable
expenses incurred by the supervisor, from the § 4981 tax revenues. Id. §
4982. Finally, the Legislature required the supervisor to close the UTGs'
books each year by distributing any revenue left after expenses to the
organized towns of Essex County, as follows:
During the month of July each year, upon adequate provision being
made for the expenses of all unorganized towns and gores in Essex
county, any surplus revenue assessed under section 4981 and
received during the preceding calendar year shall be distributed
by the supervisor for the unorganized towns and gores of Essex
county to each organized town and city within that county in equal
amounts up to and including $300.00 for each organized town and
city. Any surplus revenue then remaining shall be distributed to
each organized town and city in Essex county in the proportion
which the population of that town or city bears to the population
of all the organized towns and cities of the county, as shown in
the most recent United States census.
32 V.S.A. § 4983. Whether and how to apply this provision to the disputed
savings account is the crux of this case.
¶ 4. The trial court found the following relevant facts. The
savings account at issue first appeared in the UTGs' books in 1971, which
reflected a $450 interest payment into the account, resulting in a total
balance of $40,450. The original supervisor would later tell his successor
that the account was "for emergencies." While the account witnessed some
activity early on, it has been entirely dormant since 1975, at which time
its balance was about $52,000. The account continued to accrue interest,
however, and, as of October 25, 2000, the balance had increased to
$174,021.24.
¶ 5. An audit in 2000 confirmed the existence of the savings
account, and plaintiffs sued for a declaration of rights with respect to
the funds in the account as of May 18, 2000, the effective date of the
changes in §§ 4981-4982 and repeal of § 4983. 1999, No. 139 (Adj. Sess.),
§ 5. The parties filed cross-motions for summary judgment. The trial
court denied defendants' motion and granted plaintiffs' motion in part.
After resolving issues relating to surplus revenue for fiscal year 1999 and
interest rates, the court entered judgment on April 4, 2005, ordering the
UTGs to pay each of the thirteen organized towns its pro-rata share of the
savings account principal and interest, a sum from a checking account plus
interest, and prejudgment interest. Defendants appealed, principally
asserting: (1) the trial court misconstrued § 4983 and failed to accord
proper deference to the supervisor by treating the money in the savings
account as revenue eligible for distribution to the organized towns; (2)
the statute of limitations barred plaintiffs' claim to any money that was
in the savings account more than six years before the suit was commenced;
(3) the trial court lacked jurisdiction to award money to organized towns
other than plaintiffs; and (4) the repeal of § 4983 obviated any
requirement for distribution after May 18, 2000. (FN2) We reject each
argument and affirm.
¶ 6. We review summary judgment orders de novo and apply the same
standard as the trial court. Hardwick Recycling & Salvage, Inc. v. Acadia
Ins. Co., 2004 VT 124, ¶ 14, 177 Vt. 421, 869 A.2d 82. Summary judgment
is proper when there are no genuine issues of material fact and the moving
party is entitled to judgment as a matter of law. V.R.C.P. 56(c)(3).
Where, as here, no genuine issues of material fact remain, "[w]e conduct a
plenary, nondeferential review of the questions of law raised by the
motion." Hardwick Recycling & Salvage, Inc., 2004 VT 124, ¶ 14.
¶ 7. Defendant's first argument turns principally on whether the
court correctly viewed the savings account as "surplus revenue" under §
4983. When interpreting a statute, our primary goal is to give effect to
the Legislature's intent. Town of Killington v. State, 172 Vt. 182, 188,
776 A.2d 395, 400 (2001). To determine legislative intent, "we look to the
words of the statute itself, the legislative history and circumstances
surrounding its enactment, and the legislative policy it was designed to
implement." Perry v. Vt. Med. Practice Bd., 169 Vt. 399, 406, 737 A.2d 900, 905 (1999). The plain language of a statute, if unambiguous and not
harmful to the legislative scheme, is sufficient evidence of legislative
intent. In re Weeks, 167 Vt. 551, 554, 712 A.2d 907, 909 (1998).
¶ 8. The trial court concluded that the plain language of § 4983
demonstrated the Legislature's intent to create "a fiscal system in which
the receipts and expenses for each year would be netted out at the close of
each year, and any surplus of revenues over expenses would be paid over to
the organized towns . . . no later than July of the ensuing year." We
agree. A fair reading of § 4983 indicates that, after making "adequate
provision" for expenses, the supervisor must distribute any remaining funds
to the organized towns.
¶ 9. Defendants' reading of § 4983 would undermine this purpose.
See In re Jewell, 169 Vt. 604, 606, 737 A.2d 897, 900 (1999) (mem.)
(reasoning that a statute should not be construed in way that is at odds
with its underlying purpose). They read § 4983 as excluding all funds in
the savings account other than the preceding calendar year's interest from
the statute's definition of surplus revenue. That interpretation, however,
has caused the supervisors to avoid their statutory obligation to disburse
surplus funds simply by holding onto the funds in the savings account year
after year. Thus, we reject defendants' interpretation because we presume
the Legislature did not intend such a result. See Will v. Mill Condo.
Owners' Ass'n, 2004 VT 22, ¶ 15, 176 Vt. 380, 848 A.2d 336 (recognizing
that we presume the Legislature does not intend interpretation of statute
"that would lead to absurd or irrational consequences"(quotations
omitted)).
¶ 10. The "adequate provision" language of § 4983 does not permit
the supervisor to maintain an ever-growing reserve fund for an indefinite
duration. As the trial court observed,
the Legislature contemplated that seven months was more than
enough time for all bills for the preceding calendar year to have
filtered in to the supervisor, and to have actually been paid, but
if not then perhaps some estimated amount could be set aside to
cover any such later arriving bills or invoices.
Just because a taxing authority may provide for future expenses does not
"warrant unnecessary accumulation in the treasury for the remote future or
for contingencies which may never occur." 15 E. McQuillin, The Law of
Municipal Corporations § 39:2, at 5 (3d ed. 2005); see also In re County
Collector of Cook County, 774 N.E.2d 832, 848 (Ill. App. Ct. 2002)
(recognizing that a municipality "cannot unnecessarily accumulate monies in
the public treasury"). This is especially true here in light of the
Legislature's decision to require the supervisor to close the UTG books
each year and distribute excess funds to the organized towns. The disputed
funds in this case could not have been the "adequate provision" for future
the statute contemplated because the supervisors never used them to pay UTG
expenses and instead left them untouched in the savings account for three
decades. Finally, nothing in the record suggests the amount of money in
the account bears any relation to a reasonable estimate of late-arriving
bills or invoices.
¶ 11. We also reject defendants' argument that we should defer to
the supervisors' contemporaneous construction of § 4983 as allowing them to
retain the funds in the savings account indefinitely. "[T]he
contemporaneous construction of a statute by the executive officers of a
government, whose duty it is to execute it, is entitled to great weight,
and should not be disregarded nor overturned, except for cogent reasons,
and unless it is clear that such construction is erroneous." In re
National Guard, 71 Vt. 493, 499, 45 A. 1051, 1053 (1899). The supervisors'
thirty-year practice of holding the funds in the savings account directly
conflicts with the plain language and purpose of § 4983 because it
precluded both the use of the disputed funds for UTG expenses and the
disbursement of the funds to the organized towns-the only permissible
outcomes for UTG revenue enumerated in § 4983. Instead, their construction
allowed the funds to sit, untouched, in the savings account, presumably
indefinitely. This is just the sort of "purely aberrational . . . result"
against which this Court has warned. Town of Killington v. Dep't of Taxes,
2003 VT 88, ¶ 6, 176 Vt. 70, 838 A.2d 91. In addition, determining the
meaning of "surplus revenue" under § 4983 is a legal task for which the
supervisors have no special expertise. See In re Lyon, 2005 VT 63, ¶ 15,
178 Vt. 232, 882 A.2d 1143 (recognizing an administrative agency's
discretion in making findings and conclusions of fact but declining to
defer to an agency's conclusions of law in areas outside the agency's
expertise). Thus, we need not defer to them in matters of statutory
construction.
¶ 12. Next, this action is not, as defendants assert, time-barred,
because the supervisors continuously violated § 4983 ever since the initial
failure to disburse the money in the savings account to the organized
towns. In concrete terms, in July 1972, the year after the savings account
first appeared in the UTGs' books, each supervisor was bound by § 4983 to
include that money as in the statutorily mandated reckoning of expenses
against revenue and distribution to the organized towns. The passage of
time did not relieve the supervisors of that duty, and the interest
accumulating in the account each year became subject to distribution under
§ 4983 in July of the following year. Thus, at the time of this lawsuit,
the supervisor was statutorily required to run the entire contents of the
savings account through the § 4983 calculations and make distributions to
the organized towns accordingly. Therefore, because the § 4983 violation
as to all the money in the account continued right up to the time of this
action, plaintiffs' claim is not time-barred. See Howard Jarvis Taxpayers
Ass'n v. City of La Habra, 23 P.3d 601, 609 (Cal. 2001) (holding that
city's continued imposition and collection of a tax without voter approval
was a continuous violation, and therefore limitations period began anew
with each collection and did not bar claims for declaratory and mandamus
relief).
¶ 13. Next, we hold that the trial court correctly awarded the
funds on a pro-rata basis to all of the organized towns in Essex County,
despite the fact that some of those towns were not parties to the case.
Section 4983 directs the supervisor, when a surplus exists after netting
out the year's expenses, to pay "equal amounts up to and including $300.00
for each organized town and city," and to distribute any remaining surplus
"to each organized town and city" in proportion to the population of each.
13 V.S.A. § 4983 (emphasis added). Thus, to award the disputed funds to
any group other than each of the organized towns and cities in Essex County
would violate the express instructions of the Legislature.
¶ 14. Finally, the supervisor was required to make a distribution
in 2000 notwithstanding the fact that § 4983 was repealed that year. 1999,
No. 139 (Adj. Sess.), § 3 (eff. May 18, 2000). The UTGs urge that Act
139's limitation "to grand lists for April 1, 2000 or after," id. § 5, does
not apply to the repeal of § 4983, so that the supervisor's authority to
make § 4983 disbursements ended on May 18, 2000, the effective date of Act
139. To support their contention, the UTGs cite historical notes following
§§ 4981 and 4982, which each state that "the amendment to this section by
section 1 of [Act 139] shall apply to grand lists for April 1, 2000 or
after." 32 V.S.A. §§ 4981-4982 hist. (Cum. Supp. 2005). These historical
notes, however, do not elucidate the effect of Act 139 on § 4983. Indeed,
because Act 139 applies only to grand lists for April 1, 2000, or after,
the provisions of § 4983 remained operative for grand lists before April 1,
2000, and the supervisor still had to conduct the § 4983 calculations for
the 1999 calendar year.
Affirmed.
BY THE COURT:
_________________________________________
Paul L. Reiber, Chief Justice
_________________________________________
Denise R. Johnson, Associate Justice
_________________________________________
Marilyn S. Skoglund, Associate Justice
_________________________________________
Brian L. Burgess, Associate Justice
__________________________________________
Ernest W. Gibson III (Ret.), Associate
Justice, Specially Assigned
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Footnotes
FN1. Unless otherwise stated, citations throughout the text to 32 V.S.A. §§
4981-4983 are to the versions in effect before May 18, 2000. In 2000, the
Legislature revamped the UTGs' financial structure, amending §§ 4981 and
4982 and repealing § 4983. 1999, No. 139 (Adj. Sess.), §§ 1-3. The act
became effective on May 18, 2000, its date of passage, and applied "to
grand lists for April 1, 2000 or after." Id. § 5.
FN2. Defendants proffered two additional claims: (1) the "unusual quantity
of obvious errors" in the trial court's decision "cast significant doubt"
on its conclusions; and (2) the UTGs' railroad tax revenues were not, as
the trial court found, payments in lieu of taxes from the State for
railroad tracks that it owned. On the first point, defendants list
numerous statements in the trial court's decision that they claim are
incorrect. To the extent that these points relate to the legal challenges
advanced by defendants, they are subsumed by our resolution of those
challenges. To the extent they do not, they are not adequately briefed
legal arguments. See Wilkins v. Lamoille County Mental Health Svcs., 2005
VT 121, ¶ 15, 16 Vt. L. Wk. 329, 889 A.2d 245 (noting that points
insufficiently briefed or argued do not warrant consideration on appeal).
As to the railroad tax issue, assuming the trial court's discussion was
incorrect, defendants fail to explain how that entitles them to relief.
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