15 TOWER AVE., LLC v. ECUMENICAL HOUS., No. CV 08-5022316 (Jan. 5, 2009)


2009 Ct. Sup. 854, 46 CLR 868
No. CV 08-5022316Connecticut Superior Court Judicial District of Hartford at Hartford
January 5, 2009

[EDITOR’S NOTE: This case is unpublished as indicated by the issuing court.]


The plaintiff in this foreclosure action is the assignee of tax liens which it purchased from the City of Hartford (City). The tax liens were for taxes due the City for the years 2000-2006 on property known as 29 Tower Avenue in Hartford. The plaintiff is seeking to foreclose the tax liens because of non-payment of the liens.

The State of Connecticut (State) is a defendant in the action because it is a party to a covenant with the defendant, Ecumenical Housing, Inc. (Ecumenical). The covenant was executed by the State and Ecumenical as a result of legislation passed by the legislature (Conn. Gen. Stat. § 8-214b, et seq.) which provides public money to nonprofit companies for the building of low and moderate income housing under a Land Bank/Land Trust Program. The State gave Ecumenical a $207,000 grant to build such housing at 29 Tower Avenue in Hartford and the parties then executed a restrictive covenant running with the land limiting the development of the property to low and moderate income housing pursuant to § 8-214b. The agreement was recorded in the land records by reference to the covenant.

The agreement (par. 4) states that Ecumenical could not sell, transfer or lease the property without the State’s consent and that the property must be used solely for low and moderate income housing.

The plaintiff now seeks to foreclose out the State’s interest. The State has pleaded a special defense based on sovereign immunity and relies essentially on First Union National Bank v. Hi Ho Shopping Ventures, Inc. et al., 273 Conn. 287 (2005).

In First Union, the Supreme Court interprets the word “interest” in Conn. Gen. Stat. § 49-31 which provides, “In any action to foreclose a mortgage or lien on any land in which the state, or any officer or agent CT Page 855 thereof claims to have an interest subordinate to that of the party seeking foreclosure, the state, or such officer or agent, as the case may be, may be made a party defendant, and such interest may be foreclosed in the same manner and with the same effect as if such interest were held by an individual, except that no judgment may be rendered against the state or any officer or agent for money or cost of suit.”

In First Union, the interest sought to be foreclosed was an ownership interest in a Bridgeport state college.

The Supreme Court opined that the term “interest” construed broadly could encompass an ownership interest. The court held “Where there is any doubt about [the] meaning or intent [of a statute in derogation of sovereign immunity, it is] given the effect which makes the least rather than the most change to sovereign immunity.” Id. at 294.

The Supreme Court further discussed the plaintiff’s claim as a serious interference with the performance of their (governmental) functions which in this case would be “substantial interference with the State’s means of providing low and moderate income housing.” It concluded by saying, “interest” in § 49-31 should not be construed to include the state’s interest in real property, and that § 49-31 does not waive sovereign immunity so as to permit foreclosure of state owned real property.

This court finds that the State’s interest in the property which is the subject of this action is closely akin to its interest in First Union since its covenant with the plaintiff strictly controlled the use of the property and the property is now restricted to the development of low and moderate housing. This court therefore finds that the General Assembly never authorized any municipality to foreclose out a Land Bank/Land Trust restrictive covenant and never waived the State’s sovereign immunity to such tax foreclosure action.

The plaintiff’s motion to strike the State’s special defense of sovereign immunity is denied.[1]

[1] The court also finds that the State’s claim that the affordable housing restrictive covenant cannot be foreclosed out in a foreclosure action has merit. The Appellate Court cites Faught v. Edgewood Corners, Inc., 63 Conn.App. 164 (2001), cert. den., 256 Conn. 934 (2001) which held that the burden of an easement appurtenant runs to all subsequent owners of the land and cannot be extinguished or foreclosed out in a municipal tax lien foreclosure action.

CT Page 856