source: Caselaw Access Project

author: Berdon, J.

license: Public Domain

text:
    Donald E. Hare v. John McClellan, Jr., et al.
    (15176)
    Peters, C. J., and Callahan, Berdon, Palmer and Hervían, Js.

      Argued May 30
    decision released August 1, 1995

      John R. FitzGerald, for the appellant (plaintiff).

      John D. Boland, for the appellees (defendants).
   Berdon, J.

In this case involving the validity of a right of first refusal contained in a deed to real property, the dispositive issue is whether the trial court properly rendered summary judgment for the defendants on all issues. The plaintiff, Donald E. Hare, owns certain real property in the town of Woodstock. The defendants John McClellan, Anthony B. McClellan and Faith McClellan LeBaron (McClellans) conveyed a parcel of neighboring real property to the defendant Laura Ann Curley. The plaintiff, claiming that he had a valid right of first refusal on the parcel conveyed, brought this action seeking monetary damages from the McClellans and a mandatory injunction that would require Curley to convey the parcel to him in exchange for $45,000. The defendants, in a counterclaim, sought a judgment declaring the plaintiffs alleged right of first refusal invalid. The defendants moved for summary judgment on the plaintiff’s complaint and on the counterclaim, and the trial court granted the motion, rendering judgment for the defendants. We reverse the judgment of the trial court.

The underlying facts are undisputed. Margaret T. Tourtellotte, the mother of the McClellans, owned a large parcel of real property in the town of Woodstock. A discontinued highway known as the Old Connecticut Path ran in a southwesterly direction through the property. In 1973, Tourtellotte sold a portion of the property on the southerly side of the discontinued road to the plaintiff for $35,000. In the deed, which was properly recorded in the Woodstock land records, Tourtellotte stated that she intended to include in the conveyance a right of way over the discontinued road, but “to the extent and only to the extent that the grantor has a sufficient legal interest in and to said road to grant this right of way. The grantor expressly disclaims any warranties with reference to this road otherwise contained in the Warranty Deed.”

The deed from Tourtellotte to the plaintiff also included the following provision: “In the event that the Seller offers for sale land contiguous to the within described premises, with exceptions and qualifications as hereinafter noted, the Buyer shall have an option to purchase same for the asking price and for a period not to exceed thirty days after written notice has been mailed by the Seller to the Buyer at the Buyer’s, last known address. Failure to exercise this option within the said 30 day period shall render this option null and void, and of no effect. . . . For purposes of this paragraph the ‘discontinued highway’ on the above map shall be deemed to be contiguous land of the Seller.” (Emphasis added.)

Sometime after she conveyed this property on the southerly side of the road to the plaintiff, Tourtellotte subdivided her remaining property on the northerly side of the road into three separate parcels. In January 1990, Tourtellotte informed the plaintiff of her intention to sell one of the three parcels. The plaintiff subsequently executed a release of any right or claim he might have had in that parcel by reason of his right of first refusal. In September, 1992, Tourtellotte’s attorney informed the plaintiff that the second parcel was to be sold, and stated in a letter that “[u]nder the terms of the right of first refusal, you have a right to elect [to purchase] the property at the same price as offered by the prospective purchasers .... As you know, you do have thirty days in which to exercise your right of first refusal and purchase the property.” The plaintiff decided to purchase this parcel. The third parcel of the subdivision is the parcel at issue in this case. On June 7, 1993, the McClellans, who had acquired their mother’s interest in the third remaining parcel, sold that parcel to Curley for $45,000. The McClellans did not provide notice of the proposed sale to the plaintiff, nor did they offer him the opportunity to purchase the third parcel.

The plaintiff subsequently brought this action to enforce his “right of first refusal,” seeking monetary damages from the McClellans and a mandatory injunction to require Curley to convey the property to him in exchange for $45,000, the price that she had paid for the parcel. The defendants filed an answer and a counterclaim, which alleged that the parcel sold to Curley was not subject to the right of first refusal because that parcel was not “contiguous” to the plaintiff’s property. The defendants further sought to have the plaintiffs interest in the parcel declared invalid because, among other reasons, it constituted an unreasonable restraint on alienation or was violative of the statutory rule against perpetuities. See General Statutes § 45a-490 et seq.

The defendants moved for summary judgment on all counts of the complaint and on the counterclaim. The plaintiff filed two affidavits in opposition to the defendants’ motion. In the first, the plaintiff recounted the history of the conveyances set forth above. He also stated in the affidavit that the right of first refusal contained in the 1973 deed, along with the language indicating that the discontinued highway was to be deemed “contiguous,” was inserted into the sales contract in order “to join the land northerly of the discontinued highway with the discontinued highway and assure that it would be treated as contiguous and subject to my right of first refusal.” In the second affidavit, George H. Jackson, the plaintiffs attorney at the time of the 1973 conveyance, stated that the intention of the deed’s language was to give the plaintiff a right of first refusal in “all the land northerly of the parcel that he was purchasing, as well as that southerly and easterly of the subject property.”

In an oral decision, the trial court rendered summary judgment on all issues in favor of the defendants. The court based its decision on two independent grounds. First, the court concluded that the right of first refusal was an unreasonable restraint on alienation, and was therefore invalid. Second, the court determined that, in any case, the Curley parcel was not subject to the plaintiff’s right of first refusal because it was not “contiguous” to the plaintiff’s property. On appeal, the plaintiff claims that the trial court’s ruling was improper in both respects. We agree with the plaintiff.

We begin our analysis by reiterating the standard of review of a trial court’s decision to grant a motion for summary judgment. “Practice Book § 384 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. In deciding a motion for summary judgment, the trial court must view the evidence in the light most favorable to the nonmoving party. Suarez v. Dickmont Plastics Corp., 229 Conn. 99, 106, 639 A.2d 507 (1994). Although the party seeking summary judgment has the burden of showing the nonexistence of any material fact; D.H.R. Construction Co. v. Donnelly, 180 Conn. 430, 434, 429 A.2d 908 (1980); a party opposing summary judgment must substantiate its adverse claim by showing that there is a genuine issue of material fact together with the evidence disclosing the existence of such an issue.” (Internal quotation marks omitted.) Water & Way Properties v. Colt’s Mfg. Co., 230 Conn. 660, 664, 646 A.2d 143 (1994).

With that standard in mind, we turn to the specific claims of the plaintiff.

I

We initially consider whether the trial court was correct in granting the motion for summary judgment on the ground that the right of first refusal was a restraint on alienation that was unreasonable. The transcript of the court’s oral ruling reveals that the court apparently based its determination of unreasonableness on two interconnected grounds. Initially, the court determined that “there is no termination date for the right of first refusal.” The court held, therefore, that the right “amounts to an unreasonable restraint on alienation due to its unlimited duration.” As further support for its conclusion of unreasonableness, however, the court also looked to the amount of time that the right had been in existence. Finding that the deed from Tourtellotte to the plaintiff had been executed twenty-one years earlier in 1973, the court determined that the existence of the right for this period constituted “an unreasonable period of time.” The court, therefore, concluded that the right was invalid as an unreasonable restraint on alienation. We disagree with the trial court’s analysis of this issue.

A right of first refusal is known more technically as a preemptive option, as a right of preemption, or simply as a preemption. “A right of pre-emption is a right to buy before or ahead of others; thus, a pre-emptive right contract is an agreement containing all the essential elements of a contract, the provisions of which give to the prospective purchaser the right to buy upon specified terms, but, and this is the important point, only if the seller decides to sell. It does not give the pre-emptioner the power to compel an unwilling owner to sell, and therefore is distinguishable from an ordinary option.” Annot., 40 A.L.R.3d 920, 924 (1971).

Whether a preemptive option is reasonable or unreasonable is a question of law for the court. Cf. Robert S. Weiss & Associates, Inc. v. Wiederlight, 208 Conn. 525, 530, 546 A.2d 216 (1988) (reasonableness of covenant not to compete); Scott v. General Iron & Welding Co., 171 Conn. 132, 137-38, 368 A.2d 111 (1976) (same). In making its determination of whether such a preemptive option is reasonable, the court must take into account the following factors: “(1) the purpose of the pre-emption, (2) its duration, and (3) the method of determining the price to be paid.” Annot., supra, 40 A.L.R.3d 926; Metropolitan Transportation Authority v. Bruken Realty Corp., 501 N.Y.2d 156, 167-68, 492 N.E.2d 379, 501 N.Y.S.2d 306 (1986); J L J Associ ates, Inc. v. Persiani, 41 Conn. Sup. 79, 88, 550 A.2d 650 (1988); see generally 1 Restatement (Second), Property, Donative Transfers § 4.4 (1983). Thus, although the court’s ultimate determination of the reasonableness of the preemptive option is a legal one, the court can make that legal determination only after engaging in factual determinations regarding the purpose, duration and method of setting the price for the parcel in question. Cf. Robert S. Weiss & Associates, Inc. v. Wiederlight, supra, 529 n.2 (requiring court, in evaluating reasonableness of covenant not to compete, to weigh five fact-bound considerations).

For several reasons, we are persuaded that the trial court should not have granted the defendants’ motion for summary judgment on the ground that the preemptive option was unreasonable. First, there is no indication in the record that the trial court, in making its determination of reasonableness, considered any factor other than the duration of the restraint. The transcript of the court’s oral decision contains repeated references to the termination date of the preemptive option, but none to its purpose or to the method of determining price. Because the record does not demonstrate that the trial court properly applied the law with respect to the reasonableness of the preemptive option, therefore, the summary judgment cannot be sustained.

Second, genuine issues of material fact exist with respect to the two factors apparently not considered by the trial court. For example, with respect to the purpose of the preemptive option, the plaintiff’s affidavit indicated that the plaintiff had sought such a right because he was concerned about how the property north of the discontinued highway would be developed. This was in stark contrast to the assertion of the defendants that the preemptive option applied only as to the discontinued highway itself. Moreover, with respect to the method for determining the price to be paid, it was unclear whether the provision gave the plaintiff a right to purchase at the “asking price” at which the McClellans initially listed their property for sale, or the price at which a third party buyer ultimately agreed to purchase it. Indeed, the briefs of the parties in this court demonstrate that this issue remains unclear. The defendants argue that the plaintiff, at most, had an option to purchase at $59,000, the McClellans’ original asking price. The plaintiff, however, insists that he had an option to purchase at $45,000, the price ultimately paid by Curley. This continuing dispute on the purpose of the preemptive option and the method of setting the price of the property, two material factors that must be weighed in determining whether the preemptive option itself is reasonable, demonstrates that the trial court should not have rendered summary judgment for the defendants. Rather, the trial court should have conducted a further evidentiary inquiry into the purpose and the price at which the preemptive option could be exercised.

Finally, the trial court, in considering the duration of the preemptive option, looked to the incorrect period of time. The trial court repeatedly expressed its belief that the preemptive option was of “unlimited duration” and that its duration thus far had exceeded twenty-one years. While it is true that the life of the preemptive option may have been unlimited, and that it thus far had been in existence for twenty-one years, these considerations are not relevant to the “duration” of the preemption’s restraint on alienation.

“The duration of the restraint is not measured by the life of the preemptive right. The rule does not condemn restrictions on transfer, i.e., provisions which postpone sale during the option period: it condemns only the ‘effective prohibition against transferability itself’ . . . .” (Citations omitted; emphasis in original.) Metropolitan Transportation Authority v. Bruken Realty Corp., supra, 501 N.Y.2d 167. Thus, the duration of a restriction is not measured by the life of the right, but by the “period during which the right could be exercised after the [seller] decided to sell.” Id.; see 1 Restatement (Second), supra, § 4.4, comment (a), illustration 3 (where provision requires holder of right to act within ten days from date price is set by two appraisers, “the terms of the agreement provide a reasonable means of setting the price, and specify that [the holder of the right] must act with reasonable expedition”).

In this case, the language of the preemptive option stated that “the Buyer shall have an option to purchase same for the asking price and for a period not to exceed thirty days after written notice has been mailed by the Seller to the Buyer at the Buyer’s last known address. Failure to exercise this option within the said 30 day period shall render this option null and void, and of no effeet.” (Emphasis added.) Thus, the preemptive option contains a term of duration of thirty days, and this period must be weighed, along with the purpose of the preemptive option and the method of ascertaining the price, in determining whether the preemptive option as a whole is “reasonable.” The trial court, therefore, should not have rendered summary judgment for the defendants on the ground that the preemptive option was unreasonable.

II

The trial court’s second stated ground for granting summary judgment was its conclusion that, regardless of whether the preemptive option was reasonable, the Curley parcel would not have been subject to it. The court first determined that “the deed is clear on its face” that properties subject to the right must be “contiguous” to the plaintiff’s land, and that “[t]he deed needs no further interpretation.” The court further concluded that the Curley parcel was not contiguous to the plaintiffs land because that parcel was separated from the plaintiff’s land by the discontinued highway. The trial court, therefore, rendered judgment for the defendants on this ground. We disagree with the trial court’s interpretation of the deed and, consequently, with its decision to render summary judgment.

In construing a deed, a court must consider the language and terms of the instrument as a whole. Lake Garda Improvement Assn. v. Battistoni, 160 Conn. 503, 511, 280 A.2d 877 (1971). “Our basic rule of construction is that recognition will be given to the expressed intention of the parties to a deed or other conveyance, and that it shall, if possible, be so construed as to effectuate the intent of the parties. ... In arriving at the intent expressed . . . in the language used, however, it is always admissible to consider the situation of the parties and the circumstances connected with the transaction, and every part of the writing should be considered with the help of that evidence.” (Internal quotation marks omitted.) Faiola v. Faiola, 156 Conn. 12, 17, 238 A.2d 405 (1968); Lake Garda Improvement Assn. v. Battistoni, supra, 513 (“court may also consider the surrounding circumstances at the time of the conveyance, and the situation of the parties at that time”). “The construction of a deed in order to ascertain the intent expressed in the deed presents a question of law and requires consideration of all its relevant provisions in the light of the surrounding circumstances. ... On appeal the scope of review of such a question is plenary . . . .” (Citation omitted.) Carbone v. Vigliotti, 222 Conn. 216, 222, 610 A.2d 565 (1992).

The record in this case demonstrates that the trial court did not properly apply these principles in interpreting the language of the deed. The trial court, determining that “the deed is clear on its face” and that “[t]he deed needs no further interpretation,” declined to consider the circumstances surrounding the inclusion of the preemptive option in the deed or the intention of the parties with respect to its language. For two reasons, however, we conclude that the language of the provision was not clear and unambiguous, and that the trial court should have looked to extrinsic evidence offered by the parties as to their intentions and the circumstances surrounding the inclusion of the preemptive option in the deed.

First, the word “contiguous” is not susceptible of only one clear and definite meaning. Although the defendants assert that the preemptive option applies only to property that was in “actual contact, or touching” the land of the plaintiff, that is not the only possible interpretation. Black’s Law Dictionary, for example, defines contiguous as also meaning “[i]n close proximity,” “neighboring” or “near in succession.” Black’s Law Dictionary (6th Ed. 1990). Webster’s defines contiguous as meaning, in addition to actual contact, “near, though not in contact; neighboring.” Webster’s New International Dictionary (1916). These definitions do not require actual contact between two things in order for them to be contiguous. A determination of how much of the defendants’ property is subject to the preemptive option, therefore, can be made only by reference to extrinsic evidence.

Second, the interpretation proffered by the defendants is not wholly consistent with other provisions contained in the deed. For purposes of exercising the preemptive option, the deed states that “the ‘discontinued highway’ on the above map shall be deemed to be contiguous land of the seller.” The defendants assert that this provision means only that the road, and not property north of the road, is subject to the plaintiff’s right of first refusal. In the deed, however, Tourtellotte had “expressly disclaimed] any warranties with reference to this road,” though she had warranted the remainder of the property conveyed. Indeed, the language of the deed indicates that Tourtellotte was not even certain that she had “a sufficient legal interest in and to said road” in order to grant the plaintiff a right of way over it. It seems highly doubtful that the parties would have negotiated a provision granting the plaintiff a preemptive option in property that the seller was not even certain was hers. It is more reasonable that the parties included this provision as a precaution against the possibility that Tourtellotte did not have a legal interest in the road. In such a case, the provision in the deed would have operated to make clear that, for purposes of the preemptive option, the discontinued highway that was owned by someone else would not sever the otherwise “contiguous” property to the north of the highway owned by the defendants and render that property no longer subject to the plaintiff’s preemptive option.

The extrinsic evidence submitted by the parties, which the trial court declined to consider, was informative on the issues of what intention the parties ascribed to the language of the preemption and the circumstances surrounding the execution of the deed. According to the plaintiff’s affidavit, for example, the purpose of expressly defining the discontinued highway as contiguous to the plaintiff’s land “was to join the land northerly of the discontinued highway with the discontinued highway and assure that it would be treated as contiguous and subject to my right of first refusal.” In other words, the discontinued highway was not to be viewed as a separate parcel, but was to be viewed as attached to the contiguous land lying to the north. The affidavit of the attorney who represented the plaintiff at the time of the conveyance also supported this interpretation. The attorney stated that “contiguous” referred to “all the land northerly of the parcel that he was purchasing, as well as that southerly and easterly of the subject property.” Furthermore, on two previous occasions, Tourtellotte and the defendants had notified the plaintiff that parcels north of the discontinued highway would be sold, and offered to allow him to purchase the parcels in accordance with the language contained in the deed. The trial court should have considered this evidence in determining the meaning and scope of the preemptive option, and should not have rendered summary judgment for the defendants on the basis of the language in the deed alone.

Indeed, the rules applicable to the construction of contracts in general yield the same result. Although the parol evidence rule “prohibits the introduction of evidence that varies or contradicts an exclusive written agreement”; Ruscito v. F-Dyne Electronics Co., 177 Conn. 149, 160, 411 A.2d 1371 (1979); that rule “does not bar the use of extrinsic evidence to aid in the interpretation of contractual language.” Heyman Associates No. 1 v. Insurance Co. of Pennsylvania, 231 Conn. 756, 781 n.22, 653 A.2d 122 (1995); Bead Chain Mfg. Co. v. Saxton Products, Inc., 183 Conn. 266, 272-73,439 A.2d 314 (1981). To the contrary, extrinsic evidence is always admissible “to explain an ambiguity appearing in the instrument.” (Internal quotation marks omitted.) Heyman Associates No. 1 v. Insurance Co. of Pennsylvania, supra, 780; Jay Realty, Inc. v. Ahearn Development Corp., 189 Conn. 52, 56, 453 A.2d 771 (1983).

For the reasons set forth above, the language in the deed and the scope of the preemptive option are ambiguous, thus requiring reference to extrinsic evidence such as the affidavits of the plaintiff and his attorney and the past course of dealing of the parties when other parcels north of the road had become available. The trial court, therefore, should not have rendered summary judgment for the defendants on the ground that the language of the deed was “clear on its face.”

The judgment is reversed and the case is remanded to the trial court for further proceedings consistent with this opinion.

In this opinion the other justices concurred.

       The plaintiff appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199 (c).

       The record does not indicate how the defendants came to own their mother’s property.

       The defendants also claimed that the plaintiffs right of first refusal was invalid because it did not satisfy the statute of frauds and because the plaintiff was guilty of laches or had waived his right to the parcel. Because these issues are not before us, we do not address them.

       The trial court dismissed the defendants’ contention that the right of first refusal was subject to the statutory rule against perpetuities. See footnote 5.

       We note that the parties have not challenged the trial court’s preliminary determination that a right of first refusal is subject to analysis only as a restraint on alienation, and not as a future interest subject to the statutory rule against perpetuities. See footnote 4. The parties, apparently assuming that the trial court’s frame of analysis was correct, dispute only whether the precise type of right in this case was a “reasonable” or “unreasonable” restraint on alienation. We have never considered the issue of whether a right of first refusal to purchase real property is subject to analysis as a restraint on alienation or as a future interest subject to the perpetuities rule. The issue has, however, been litigated in the trial court; see, e.g., J L J Associates, Inc. v. Persiani, 41 Conn. Sup. 79, 550 A.2d 650 (1988); and is addressed in the Restatement (Second) of Property. See 1 Restatement (Second), Property, Donative Transfers § 4.4 (1983) (providing for analysis as a restraint on alienation), and comment (c) (“[i]f the right of first refusal given by a preemptive provision is specifically enforceable in equity, the provision creates a non-vested property interest that is subject to the rule against perpetuities”); see also id., reporter’s note 2 (“[pjreemptive provisions giving the optionee a right of first refusal at the best price the optionor is willing to accept or at the fair market value of the property impose no restraint on alienation and have therefore been held valid in the majority of cases”). Although these provisions are contained in the edition of the Restatement (Second) of Property that relates to donative transfers, and not to commercial transactions, the introductory note to these provisions indicates that they are equally applicable to nondonative transfers. See id., p. 144; see also Lewis Oyster Co. v. West, 93 Conn. 518, 530-33, 107 A. 138 (1919) (conducting perpetuities analysis on right of first refusal in commercial transaction).
      Nevertheless, because the parties to this litigation have not raised these issues before us, we do not consider them. We confine our analysis, therefore, only to the issue of whether the right of first refusal contained in the Tourtellotte deed to the plaintiff is “reasonable.”

       “Terminology in cases involving pre-emptive rights has been somewhat loose and therefore subject to criticism. Although there is a distinct difference between a pre-emption and an option, courts often refer to preemptions as options.” Annot., 40 A.L.R.3d 920, 927-28 (1971). For consistency, we refer to the interest at issue in this case as a preemptive option.

       We have never before attempted to define the factors that must be weighed in determining whether a preemptive option is “reasonable” or “unreasonable.” Although older cases of this court have addressed the validity of such rights, none of the opinions in those cases clearly sets forth why the right was being held valid or invalid. Nevertheless, the results reached in these cases can be understood by reference to the three factors announced today, and specifically the third factor relating to the method of setting the price for the property. For example, in Lewis Oyster Co. v. West, 93 Conn. 518, 107 A. 138 (1919), the holder of the preemptive option was entitled to purchase the seller’s property for a flat price of $2500 plus improvements, regardless of the market price or the price offered by a third party buyer. This court, in holding the provision invalid, stated that “[i]t is not consistent with the public policy of Connecticut . . . that the dead hand of the [property seller] should rest on this property and control its price . . . .” Id., 533. As the Restatement recognizes, “[f]ixed price preemptions and preemptions at a percentage of [market price] are the most commonly used preemptive provisions that [are restraints on alienation]. . . . The effect of such a provision on the alienability of property is directly proportional to the difference between the market value and option price of the property.” 1 Restatement (Second), Property, Donative Transfers § 4.4, reporter’s note 4 and 4 (a) (1983).

       The defendants argue, as an alternative ground for affirming the decision of the trial court, that the provision in question was not a preemptive option at all, but a strict option. According to the defendants, this distinction is determinative of how much the holder of the right must pay for its exercise. The defendants argue that if the right is characterized as an option, the plaintiff had only the right to purchase the property at the price at which the sellers initially placed it on the market. On the other hand, according to the defendants, if the right is characterized as a preemptive option, the plaintiff had the right to purchase the property for the price at which the sellers actually received an offer to buy.
      Although we agree with the defendants that there is a technical difference between an option and a preemption; see footnote 6 and accompanying text; we do not agree that this difference necessarily determines the price that the holder of the option must pay for its exercise. We can find no authority for such a proposition, nor have the defendants cited any. Moreover, we cannot imagine why the parties to such a contract should not be allowed to determine for themselves on what terms or at what price the right may be exercised, regardless of whether it is labeled an “option” or a “preemptive option.” Indeed, the fact that the defendants dispute the method for determining the price to be paid bolsters the plaintiff’s argument that summary judgment was not proper in this case.

       We note, however, that the 1973 deed from Tourtellotte to the plaintiff appears to have given a preemptive option only to the “buyer,” rather than to the buyer and his heirs, devisees and assignees.


text:
    Walter A. Stewart, Administrator (Estate of Marion B. Javery) v. Federated Department Stores, Inc., et al.
    (15124)
    Peters, C. J., and Borden, Berdon, Norcott and F. X. Hennessy, Js.

      Argued May 25
    decision released August 1, 1995

      Michael A. Dowling, with whom were Kevin J. Gumpper and, on the brief, ShelaghM. Neary, for the appellant (named defendant).

      Richard A. Silver, with whom were John D. Josel and, on the brief, Jonathan L. Mannina, for the appellee (plaintiff).
   Berdon, J.

The defendant Federated Department Stores, Inc. (defendant), appeals from the refusal of the trial court to set aside the verdict against it awarding the plaintiff, Walter A. Stewart as administrator of the estate of the decedent, Marion B. Javery, damages for her wrongful death. Javery, a business invitee of the defendant, was murdered by a third party, Bernard Williams, in a parking garage in Stamford that was owned and operated by the defendant in connection with its retail store, Bloomingdale’s.

The jury found for the plaintiff and awarded damages in the amount of $1,507,310 for the wrongful death of the decedent. The trial court denied the defendant’s motion to set aside the verdict and for judgment notwithstanding the verdict and rendered judgment on the verdict. The defendant appealed raising two issues: (1) whether the trial court properly instructed the jury on the issue of proximate cause; and (2) whether the trial court should have granted the defendant’s motion for judgment notwithstanding the verdict on the ground that, as a matter of law, the death of Javery was the result of a superseding intervening cause. We affirm the judgment of the trial court.

The jury reasonably could have found the following facts. On June 6,1988, Javery was shopping in Bloomingdale’s department store. After finishing shopping, Javery returned to her car, which was parked on the ground floor of Bloomingdale’s garage. As she was placing her purchases in her trunk, Williams, an individual with no connection to the defendant, approached her from behind to rob her. When Javery resisted, Williams repeatedly stabbed her, leaving her to die on the garage floor. Before fleeing, Williams took Javery’s purse and packages and her watch, which he ripped from her arm.

At the time of Javery’s murder and robbery, no security guard was on duty in the garage. In fact, it was the defendant’s practice to maintain minimal security in the garage. Bloomingdale’s, with gross annual sales of forty million dollars, employed five security officers to guard its in-store property, while employing only one security officer to guard customer and employee safety in the garage. Moreover, the security guard assigned to the three story, 985 car facility was regularly reassigned to guard the loading dock and was not replaced while absent from his or her post. Consequently, the garage was frequently left unsecured, which was the case at the time of Javery’s death.

Additionally, the garage was not constructed or maintained in a manner that provided security to the store’s customers. Lighting was dim, with 300 fluorescent light fixtures inoperative on the day that Javery was murdered. Furthermore, there were no gates at either the vehicular or pedestrian entrances, nor was the facility fully fenced or enclosed on the ground level.

Geographically, the store and its garage are located in a neighborhood of Stamford that is reputed for its high crime rate. The crimes committed in the area spanned the spectrum of violence from larceny and robbery to rape and murder. Within the ten months prior to Javery’s death, over 1000 serious crimes were committed within an area of two blocks from the garage. More specifically, Javery’s murder was not the first crime to occur in Bloomingdale’s garage. Prior to her attack, customers had been robbed at knifepoint and assaulted in the garage. Indeed, as in this case, several customers and employees had been robbed at knifepoint in the garage when there was no security guard on duty. Additionally, the garage was regularly the site of larcenies from parked cars, theft of cars and vandalism. In recognition of the criminal activity in and about the garage, the defendant’s employees repeatedly requested the management to increase security in the garage. The defendant, however, took no steps to provide additional security.

Furthermore, the defendant, as informed by its own security personnel, was aware of the security problem in its garage and the remedial steps that were necessary to correct it. In 1982, Kevin Lash, the security manager for the Stamford Bloomingdale’s, after reviewing the crime problem in and about the garage, recommended that an additional guard was required and that the garage should be fully enclosed with fencing. Management, however, rejected this proposal.

Neil A. Sullivan, an expert in the field of security, appeared as an expert for the plaintiff. He testified that the defendant had failed to assess the danger to which its customers and employees were exposed in the parking garage. After reviewing the history of crime in the garage and the surrounding area, as well as the garage’s physical layout and lighting, Sullivan concluded that the garage required at least three guards to provide adequate security. In Sullivan’s opinion, “[h]ad appropriate security coverage been in place, had access to the facility been controlled, had lighting been adequate, it is probable that criminal activity would have been deterred and the robbery which led to [Javery’s] death would not have been attempted.”

During deliberations, the jury was furnished with four interrogatories. In response, the jury specifically found the following: the defendant was negligent by failing to provide the requisite level of security in its garage; the defendant’s negligence was the proximate cause of, i.e., a substantial factor in causing the harm to Javery; the defendant’s failure to use reasonable care in guarding the safety of its patrons within its garage created or increased the likelihood of injury to a customer as a result of a criminal act within the garage; and the harm caused by Williams was within the scope of the risk created by the defendant’s negligence. In accordance with the jury verdict, the court rendered judgment for the plaintiff. This appeal followed.

I

At the conclusion of the evidence and summations, the trial court furnished the jury with extensive instructions on all aspects of the law pertaining to the case, including instructions regarding proximate cause and intervening cause. The defendant focuses on the following three aspects of the initial and supplemental instructions as the basis for its claim that the trial court improperly instructed the jury: (1) the court’s failure to reinstruct on the issue of cause in fact; (2) the court’s failure to instruct that the plaintiff had a heightened burden of proof regarding the “scope of the risk” caused by the defendant’s negligence; and (3) the court’s response to the jury’s inquiry whether the nature of the crime should be considered when determining causation.

Our standard of review is well established. “The test of a court’s charge is not whether it is as accurate upon legal principles as the opinions of a court of last resort but whether it fairly presents the case to the jury in such a way that injustice is not done to either party under the established rules of law.” (Internal quotation marks omitted.) Atlantic Richfield Co. v. Canaan Oil Co., 202 Conn. 234, 240, 520 A.2d 1008 (1987). Thus, we must determine “whether the charge as a whole presents the case to the jury so that no injustice will be done.” State v. Derrico, 181 Conn. 151, 170, 434 A.2d 356, cert. denied, 449 U.S. 1064, 101 S. Ct. 789, 66 L. Ed. 2d 607 (1980). Only when a specific request to charge is filed, or an exception is taken to the charge, may this court examine individual components of the charge. State v. Fleming, 198 Conn. 255,268, 502 A.2d 886, cert. denied, 475 U.S. 1143, 106 S. Ct. 1797, 90 L. Ed. 2d 342 (1986). Therefore, jury instructions “need not be exhaustive, perfect, or technically accurate.” (Internal quotation marks omitted.) Preston v. Keith, 217 Conn. 12, 17, 584 A.2d 439 (1991). Nonetheless, the trial court must correctly adapt the law to the case in question and must provide the jury with sufficient guidance in reaching a correct verdict. Id.

A

Other than on the issue of the burden of proof, the defendant does not challenge the trial court’s initial charge on causation. Rather, the defendant focuses its first claim on the supplemental instructions that were given in response to a note from the jury to the judge that read: “Please redefine causation as it pertains to this case.”

In its initial instruction, the trial court charged that the plaintiff was required to establish that the defendant’s conduct was the legal cause of Javery’s harm and death. Legal cause was defined as having two components, both of which had to be satisfied: cause in fact and proximate cause. The court defined cause in fact as the purest application of legal cause. To determine whether cause in fact existed, the jurors were instructed to ask themselves: Would the injury have occurred were it not for Bloomingdale’s negligent conduct? Addressing the second component, the court noted that there can be multiple proximate causes of an event, and that proximate cause is satisfied if the plaintiff can prove that the defendant’s negligence was a substantial factor in the resulting harm.

In response to the jury’s request for a redefinition of causation, the trial court reminded the jurors that the charge was to be understood as a whole, and that no individual point should be singled out. The court then proceeded to repeat its definition of proximate cause as a “substantial factor,” without explicitly redefining cause in fact.

The defendant argues that because of the absence of an explicit recharge on the issue of cause in fact, the jury was not adequately guided on the elements of causation. We disagree. Before we may address the defendant’s claim, we must review the principles of legal causation.

Cause in fact, occasionally referred to as actual cause, asks whether the defendant’s conduct “caused” the plaintiff’s injury. Thus, if the plaintiff’s injury would not have occurred “but for” the defendant’s conduct, then the defendant’s conduct is a cause in fact of the plaintiff’s injury. Conversely, if the plaintiff’s injury would have occurred regardless of the defendant’s conduct, then the defendant’s conduct was not a cause in fact of the plaintiff’s injury. W. Prosser & W. Keeton, Torts (5th Ed. 1984) § 41, p. 266. Here, the court correctly defined cause in fact as: “Would the injury have occurred were it not for [the defendant’s] negligent . . . conduct . . . ?” See Doe v. Manheimer, 212 Conn. 748, 757, 563 A.2d 699 (1989).

Philosophically, cause in fact is limitless; “but for” the creation of this world, no crime or injury would ever have occurred. W. Prosser & W. Keeton, supra, p. 264. The philosophical sense of causation includes the “great number of events without which any happening would not have occurred . . . yet the effect of many of them is so insignificant that no ordinary mind would think of them as causes.” 2 Restatement (Second), Torts § 431, comment (a) (1965). Therefore, as a practical matter, limits must be established. Lines must be drawn determining how far down the causal continuum indivictuals will be held liable for the consequences of their actions. W. Prosser & W. Keeton, supra, § 42, p. 273. This line is termed “proximate cause.”

Proximate cause establishes a reasonable connection between an act or omission of a defendant and the harm suffered by a plaintiff. Id., § 41, p. 263. Proximate cause serves to “[temper] the expansive view of causation [in fact] ... by the pragmatic . . . shaping [of] rules which are feasible to administer, and yield a workable degree of certainty.” (Internal quotation marks omitted.) Doe v. Manheimer, supra, 212 Conn. 757-58. In other words, legal cause can be portrayed pictorially as a Venn diagram, with the circle representing cause in fact completely subsuming the smaller circle representing proximate cause, which specifically focuses on that which we define as legal causation. This court has defined proximate cause as “[a]n actual cause that is a substantial factor in the resulting harm. . . .” (Emphasis added.) Id., 757; Mahoney v. Beatman, 110 Conn. 184, 195, 147 A. 762 (1929). It was this definition of proximate cause that the trial court employed in its initial and supplemental instructions.

When a court responds to a jury’s inquiry, the court’s supplemental charge may be “less formal and lack the exactness of the formally prepared original charge.” DePaola v. Seamour, 163 Conn. 246, 253, 303 A.2d 737 (1972). Nevertheless, “additional charges to the jury must state the law correctly and not be misleading . . . .” Id. To determine the correctness of a jury charge, the charge must be “read as a whole, and judged by its total effect rather than by its individual component parts.” (Internal quotation marks omitted.) Blanchette v. Barrett, 229 Conn. 256, 280, 640 A.2d 74 (1994).

Reading the jury recharge in light of these principles, we are persuaded that the trial court adequately instructed the jury as to the necessary elements of causation. The trial court already had informed the jury of its duty to find that the defendant’s actions were a “cause in fact” of Javery’s injury. The court also had instructed the jury that it could not find that the defendant’s actions were a cause in fact of Javery’s injury, unless it found that, in the absence of the defendant’s conduct, the injury would not have occurred. Although the recharge did not explicitly redefine the cause-in-fact test, the trial court, in explaining what was necessary to find proximate cause, adequately reminded the jury of the cause-in-fact issue. The jury, therefore, received adequate guidance on the issue of causation.

B

The defendant next claims that the trial court improperly instructed the jury on the burden of proof regarding superseding cause. Specifically, the defendant claims that in accordance with Manheimer, the trial court should have instructed the jury that the plaintiff had to prove that the intentional act of Williams was within the scope of the risk caused by the defendant’s negligence “to a fairly strong degree of certainty.” The court declined to give such an instruction, both in its initial and supplemental charges.

We have adopted the standard set forth in § 442B of the Restatement, that “[w]here the negligent conduct of the actor creates or increases the risk of a particular harm and is a substantial factor in causing that harm, the fact that the harm is brought about through the intervention of another force does not relieve the actor of liability, except where the harm is intentionally caused by a third person and is not within the scope of the risk created by the actor’s conduct.” Doe v. Manheimer, supra, 212 Conn. 759; Kiniry v. Danbury Hospital, 183 Conn. 448, 454-55, 439 A.2d 408 (1981).

The defendant’s claim that the plaintiff has a heightened burden regarding whether Williams’ intentional act was within the scope of the risk created by the defendant originates from one phrase used in Manheimer. We stated in Manheimer that the application of § 442B of the Restatement “requires a fairly strong degree of certainty that a criminal or intentional intervening act is within the ‘scope of the risk’ of a negligent actor’s conduct.” (Emphasis added.) Doe v. Manheimer, supra, 212 Conn. 767. Such a heightened burden of proof is not required by the Restatement, which merely requires proof by a preponderance of the evidence, nor did we mean to imply in Manheimer that there is a higher secondary standard of proof required for § 442B. We have but one civil common law standard of proof for the recovery of damages in negligence, that is, a fair preponderance of the evidence. Coburn v. Lenox Homes, Inc., 186 Conn. 370, 372, 441 A.2d 620 (1982); see also 2 Restatement, supra, § 328A, comment (a); W. Prosser & W. Keeton, supra, § 38, p. 239. Consequently, the plaintiff must show, by a fair preponderance of the evidence, that harm intentionally caused by a third person is within the scope of the risk created by the defendant’s negligent conduct. Accordingly, we explicitly disavow that language from Manheimer, and, accordingly, we reject the defendant’s claim that the trial court should have instructed the jury that the plaintiff was required to prove, to a fairly strong degree of certainty, that the conduct of Williams was within the scope of the risk created by the defendant’s negligence.

C

The third issue concerning causation raised in this appeal requires little discussion because of our clear precedents on this matter. On the fourth day of deliberations, the jury asked: “Do we . . . consider the nature of a crime when determining causation?” The trial court answered “no” to the jury’s question and instructed the jury that liability was not contingent upon the actual type, extent or severity of the criminal activity. The court instructed the jury that it was to consider the general nature of the harm, i.e., the criminal activity in the garage and in the surrounding area, in order to determine the scope of the risk when applying the rule of § 442B of the Restatement. The defendant asserts that the question should have been answered “yes,” because, according to the defendant, no similar crime had been previously committed within the garage. Thus, according to the defendant, the intentional conduct of Williams was not within the scope of the risk created by its conduct, and consequently the defendant should be relieved of liability. We disagree.

Our decision in Manheimer is instructive on this point. “Our cases make it clear that, to be within the 'scope of the risk,’ the harm actually suffered must be of the same ‘general type’ as that which makes the defendant’s conduct negligent in the first instance.” (Emphasis added.) Doe v. Manheimer, supra, 212 Conn. 764. Moreover, “[i]f the . . . [defendant’s] conduct is a substantial factor in bringing about harm to another, the fact that the . . . [defendant] neither foresaw nor should have foreseen the extent of the harm or the manner in which it occurred does not prevent it from being liable.” (Internal quotation marks omitted.) Merhi v. Becker, 164 Conn. 516, 521, 325 A.2d 270 (1973); 2 Restatement, supra, § 435 (1). Accordingly, we conclude that the trial court’s answer to the jury question properly stated the law.

II

The last issue raised by the defendant is whether the trial court improperly refused to direct a verdict in favor of the defendant. After the close of the plaintiff’s case, the defendant moved for a directed verdict, which was denied by the trial court. After the trial court accepted the jury verdict, the defendant then moved for a judgment notwithstanding the verdict. Practice Book § 321. Our standard of review is succinctly set out in Mather v. Griffin Hospital, 207 Conn. 125, 540 A.2d 666 (1988). “Our review of the trial court’s refusal to direct a verdict requires us to consider the evidence in the light most favorable to the prevailing party, according particular weight to the congruence of the judgment of the trial judge and the jury, who saw the witnesses and heard their testimony .... The verdict will be set aside and judgment directed only if we find that the jury could not reasonably and legally have reached their conclusion.” (Citations omitted; internal quotation marks omitted.) Id., 130.

The defendant argues that Williams’ actions were not within “the scope of the risk” foreseeable to it, because there had been no prior incidents of murder within the garage. Williams’ actions, the defendant claims, therefore constituted a superseding intervening cause that, as a matter of law, excused the defendant from liability for Javery’s death. The defendant consequently asserted that Javery’s death was not reasonably foreseeable, and therefore was not within the scope of the risk of § 442B of the Restatement.

The question of proximate causation generally belongs to the trier of fact because causation is essentially a factual issue. Doe v. Manheimer, supra, 212 Conn. 756; Tetro v. Stratford, 189 Conn. 601, 605,485 A.2d 5 (1983); Fox v. Mason, 189 Conn. 484, 489, 456 A.2d 1196 (1983). “It becomes a conclusion of law only when the mind of a fair and reasonable [person] could reach only one conclusion; if there is room for a reasonable disagreement the question is one to be determined by the trier as a matter of fact.” (Internal quotation marks omitted.) Trzcinski v. Richey, 190 Conn. 285, 295, 460 A.2d 1269 (1983); 2 Restatement, supra, § 434. Therefore, only if the intervention of Williams was not foreseeable as a matter of law will this court reverse the jury’s determination.

This court does not agree with the defendant’s narrow definition of “scope of the risk.” As we pointed out in part IC of this opinion, it is the general nature of the crime, not the particular crime, that defines the breadth of the scope of the risk. In light of the evidence received at trial, we conclude that a jury reasonably could have found, by a fair preponderance of the evidence, that the harm that befell Javery had been reasonably foreseeable and within the scope of the risk created by the defendant’s negligence.

The defendant relies on our decision in Manheimer, wherein we upheld the trial court’s conclusion that, as a matter of law, the intentional act of a third party had not been within the scope of the risk created by the defendant’s negligence. In Manheimer, this court determined that it was not reasonably foreseeable to a private landowner that overgrown vegetation might provide a substantial incentive or inducement for the commission of a violent criminal assault on his property by one stranger upon another. Doe v. Manheimer, supra, 212 Conn. 762. We held that a prudent landowner would not infer from his ordinary experience that overgrown vegetation could prompt such a violent criminal act. Id. Furthermore, “there was no evidence tending to demonstrate that the defendant had had any past experience that might reasonably have led him to perceive and act on the atypical association between ‘natural shields’ such as overgrown vegetation and violent criminal activity.” Id. The evidence showed only that nonviolent “criminal activity” such as vagrancy and the public consumption of alcohol tended to occur in the vacant lot belonging to the defendant. Id. Consequently, we ruled that, as a matter of law, the intentional conduct of the third person was not within the scope of the risk created by the defendant’s negligence. Id., 762-63.

The facts in this case, however, are strikingly different than those presented in Manheimer. As applied to this case, the jury reasonably could have found that the particular harm involved, Javery’s robbery and murder, had been within the foreseeable scope of the risk because the prior robberies that occurred in the garage were crimes with a natural propensity to escalate into physical violence, including murder. Furthermore, given the criminal statistics that were available to the defendant, the recommendations of its own security supervisor and other employees, and the past violent crimes that had occurred within the garage and its immediate vicinity, the jury reasonably could have found that the defendant had been aware or should have been aware of the dangers of larceny, robbery, rape, felony murder and other similar crimes that are prevalent in shadowy, isolated places, such as the dim parking garage in question.

In light of this evidence, a jury reasonably could have concluded that the defendant had both actual and constructive notice that robbery and its associated violent consequences were likely to occur in its garage. Moreover, a jury reasonably could have concluded that the constant presence of individuals, encumbered with their purchases, returning to their vehicles in a parking structure that was not enclosed and that was either unguarded or insufficiently guarded, served as an invitation to criminals, an invitation that had been accepted on several previous occasions. Consequently, in this instance, jurors reasonably could have concluded that the intervention of Williams had been within the foreseeable scope of the risk created by the defendant’s negligent conduct and thus was not a superseding cause. Accordingly, we conclude that there was sufficient evidence of causation to support the jury’s verdict.

The judgment of the trial court is affirmed.

In this opinion the other justices concurred.

       The jury awarded economic damages in the amount of $7310, and $1,500,000 in noneconomic damages.

       The defendant appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199 (c). The plaintiff cross appealed asserting that the court had improperly struck the plaintiffs count sounding in recklessness. Subsequently, on October 13,1994, the plaintiff withdrew its cross appeal.

       The interrogatories read as follows:
      “1. Did you find that [the] defendant acted negligently in that it failed to provide the required level of security in its garage?
      “2. If the answer to question number one is that the defendant acted negligently do you find that the negligence was at least one proximate cause of (a substantial factor causing) the harm suffered by Mrs. Javery?
      “3. Did Bloomingdale’s failure to use reasonable care in providing adequate security to protect business invitees within the garage from criminal conduct create or increase the likelihood of injury to a customer as a result of a criminal act within the garage?
      “4. If Bloomingdale’s was negligent, was the harm caused by Mr. Williams within or without the scope of the risk created by the defendant’s negligence?”

       See part I B of this opinion.

       The court stated: “Now, ladies and gentlemen, at the outcome of this case I have indicated to you that the charge is a whole, so we have to keep it in balance because this is the charge again, and that’s why I read to you at the very beginning a charge of a whole: I instruct you not to single out any sentence or individual point or instruction in my charge and ignore the others. You can consider all the instructions as a whole with regard to each other. ...”

       See footnote 8.

       As instructed by the court, the definition of proximate cause includes reference to actual cause: “[A] proximate cause is a cause in fact which is also a substantial factor in producing the injury.”

       In most instances, and when a party does not specifically request an independent instruction on cause in fact, an instruction on proximate cause alone may be sufficient to guide the jury on the meaning of legal causation. The Restatement (Second) of Torts takes this approach. Rather than defining legal cause as a combination of cause in fact and proximate cause, § 431 of the Restatement provides that a person’s “negligent conduct is a legal cause of harm to another if (a) his conduct is a substantial factor in bringing about the harm . . . .”

       The court answered: “As to the amount of an award of money, the answer would generally be considered yes. As to the issue of liability to pay out—to pay any amount of damages at all, the answer is no as to a particular crime except you must look at all criminal activity in the garage and in the area to understand the scope of the risk as it relates to the analysis of [§ 442B] . . . .”

       “[Tjortious or criminal acts may in themselves be foreseeable, and so within the scope of the created risk, in which case the actor may still be liable for the harm, under the rules stated in §§ 448 and 449.” 2 Restatement, supra, § 442B, comment (c). Section 448 of the Restatement provides: “The act of a third person in committing an intentional tort or crime is a superseding cause of harm to another resulting therefrom, although the actor’s negligent conduct created a situation which afforded an opportunity to the third person to commit such a tort or crime, unless the actor at the time of his negligent conduct realized or should have realized . . . that such a situation might be created, and that a third person might avail himself of the opportunity to commit such a tort or crime.” Moreover, as noted in comment (c) of § 448, “[t]he actor’s conduct may be negligent solely because he should have recognized that it would expose the person, land, or chattels, of another to an unreasonable risk of criminal aggression. If so, it necessarily follows that the fact that the harm is done by such criminal aggression cannot relieve the actor from liability (see § 449). However, it is not necessary that the conduct should be negligent solely because of its tendency to afford an opportunity for a third person to commit the crime. It is enough that the actor should have realized the likelihood that his conduct would create a temptation which would be likely to lead to its commission.”


author: Borden, J.

text:
    Lester Katz v. Commissioner of Revenue Services
    (15172)
    Peters, C. J., and Borden, Berdon, Norcott and Katz, Js.
    Argued May 25
    decision released August 1, 1995

      Lester Katz, pro se, the appellant (plaintiff).

      Robert L. Klein, assistant attorney general, with whom, on the brief, was Richard Blumenthal, attorney general, for the appellee (defendant).
   Borden, J.

The principal issue in this appeal is whether certain money market fund distributions, designated as tax-exempt interest dividends, which are exempt from federal taxation, also are exempt from state taxation. The plaintiff, Lester Katz, brought an appeal in the trial court, claiming that the defendant, the commissioner of revenue services, had improperly denied the plaintiff’s request for a tax refund because: (1) the defendant had failed to act on his refund request within the required ninety day time period; and (2) the defendant had improperly concluded that the distributions received by the plaintiff were taxable under state law. The plaintiff appeals from the judgment of the trial court dismissing his appeal. Because we conclude that the ninety day time period is directory, not mandatory, and that the distributions are not exempt from state taxation, we affirm the judgment of the trial court.

The following facts and procedural history are undisputed. In 1987, the plaintiff invested in the Merrill Lynch CMA Tax-Exempt Fund (fund). The fund invests in obligations of state and municipal governments that are exempt from federal income taxes. In the same year, he received payment from the fund in the amount of $24,736. The distributions were designated by the fund as tax-exempt interest dividends.

On the plaintiff’s 1987 federal tax form, he reported this amount as “tax exempt interest income.” The plaintiff did not, however, include the distributions as taxable dividend and interest income on his Connecticut tax return. On March 5, 1991, the defendant sent a tax computation notice to the plaintiff, assessing him $2968.24 in additional tax, plus interest of $1298.61. The plaintiff paid the additional tax and interest under protest, and filed a refund claim, pursuant to General Statutes § 12-515, which was received by the defendant on April 1, 1991. On December 19, 1991, the defendant notified the plaintiff that the distributions received by the plaintiff were subject to state taxation. Accordingly, the defendant denied the plaintiff’s petition for a refund.

The plaintiff appealed to the trial court, claiming that: (1) the defendant’s decision denying the request for a refund was invalid because he had failed to act within the ninety day period required by § 12-515; and (2) the distributions were exempt from state taxation. The trial court concluded that the ninety day period was mandatory, but determined that enforcement of the time provision rested with the plaintiff, by way of a mandamus action. The court then concluded that the distributions received by the plaintiff were subject to state taxation, and rendered judgment in favor of the defendant. This appeal followed-.

We first address the plaintiffs claim that § 12-515 contains a mandatory provision requiring the defendant to act on a claim for a refund within ninety days. The plaintiff contends that, because the defendant failed to meet the ninety day requirement, the defendant’s denial of the plaintiff’s request for a refund was invalid. We disagree. We conclude that the ninety day period in § 12-515 is directory.

“The test to be applied in determining whether a statute is mandatory or directory is whether the prescribed mode of action is the essence of the thing to be accomplished, or in other words, whether it relates to a matter of substance or a matter of convenience. ... If it is a matter of substance, the statutory provision is mandatory. If, however, the legislative provision is designed to secure order, system and dispatch in the proceedings, it is generally held to be directory, especially where the requirement is stated in affirmative terms unaccompanied by negative words. . . . Such a statutory provision is one which prescribes what shall be done but does not invalidate action upon a failure to comply.” (Citations omitted; internal quotation marks omitted.) Jones v. Mansfield Training School, 220 Conn. 721, 727, 601 A.2d 507 (1992). A reliable guide in determining whether a statutory provision is directory or mandatory is whether the provision is accompanied by language that expressly invalidates any action taken after noncompliance with the provision. Leo Fedus & Sons Construction Co. v. Zoning Board of Appeals, 225 Conn. 432, 440, 623 A.2d 1007 (1993).

The purpose of § 12-515 is to provide a mechanism for taxpayers who have overpaid taxes to obtain a refund. The defendant has ninety days to act on a claim for a refund without having to pay interest on the refund; after ninety days, interest accrues. The ninety day requirement, therefore, is not related to a matter of substance, but serves as an inducement to the defendant to process refund claims in a timely manner, and as a remedy for a taxpayer whose rightful refund is delayed beyond ninety days.

Section 12-515 contains no language indicating that the defendant’s decision regarding a refund will be void if more than ninety days elapse between receipt of the claim for a refund and notice of the commissioner’s decision. To the contrary, by providing that “there shall be added interest . . . between the ninetieth day following receipt of such claim for refund by the commissioner and the date of notice by the commissioner that such refund is due,” the statute expressly contemplates that some decisions will be made by the defendant beyond the ninety day time period.

The legislative history of § 12-515 supports our conclusion that the ninety day period is directory rather than mandatory. Prior to 1985, § 12-515 lacked the ninety day requirement and did not provide for interest to be paid on tax refunds. Number 85-356 of the 1985 Public Acts added the ninety day requirement, in conjunction with a provision that interest be paid on any refund not paid within the ninety day period. The debate in the House of Representatives strongly suggests that the ninety day requirement was included solely to delineate the point at which interest would begin to accrue and was wholly unrelated to determining whether the defendant’s actions outside the ninety day period were substantively valid. A proponent of the provision stated that “[tjhis particular amendment is going to put two new sections into the bill, and basically the sections end up, requiring the payment of interest on refunds of both the succession tax, the capital gains, dividends and interest tax, when the Commissioner does not make the refund within 90 days of the claim.” 28 H.R. Proc., Pt. 17, 1985 Sess., pp. 6168-69, remarks of Representative Linda N. Emmons.

Furthermore, construing the ninety day period as mandatory would mean that some taxpayers who had claimed refunds to which they were not legally entitled would nonetheless receive them solely because of an administrative delay. Absent a clear legislative indication, we are loathe to attribute an intent to the legislature to draw down the public fisc in favor of those with no substantive entitlement thereto. The statute provides that the remedy for undue delay is interest on what is due the taxpayer, not payment of what is not due the taxpayer.

The plaintiff next claims that because the dividends that he received from the fund were not taxable for federal income tax purposes, they were similarly not taxable for Connecticut tax purposes. We disagree.

The parties stipulated that the distributions received by the plaintiff were designated as “tax-exempt interest dividends” and that the distributions were exempt from federal taxation. General Statutes (Rev. to 1987) § 12-506 (a) (l) imposes a tax on “all dividends and interest income earned.” “Dividends” is defined in General Statutes (Rev. to 1987) § 12-505 as “those dividends taxable for federal income tax purposes without regard to the dividend exclusion.” The plaintiff argues that because the dividends he received are not taxable for federal income tax purposes, they are not within the definition of dividends in § 12-505. By falling outside the § 12-505 definition, the plaintiff insists, the dividends cannot be taxed under § 12-506. We are not persuaded.

Although the tax-exempt interest dividends do not qualify as “dividends” under § 12-505, they do qualify as taxable “interest income” under that statute. Section 12-518-9a (d) (3) of the Regulations of Connecticut State Agencies provides that interest income means any “exempt-interest dividends,” as defined in the Internal Revenue Code (I.R.C.) § 852 (b) (5). Seetion 852 (b) (5) (A) defines tax-exempt interest dividends as “any dividend or part thereof (other than a capital gain dividend) paid by a regulated investment company and designated by it as an exempt-interest dividend in a written notice mailed to its shareholders . . . .’’The tax-exempt interest dividends received by the plaintiff manifestly fall within the ambit of § 852 (b) (5) (A), and thus within § 12-518-9a (d) (3). As an item of interest income, therefore, the distributions are subject to state taxation under § 12-506.

The plaintiff argues, however, that the defendant, in promulgating § 12-518-9a (d) (3) of the regulations, exceeded his powers, thus rendering that subdivision invalid. The plaintiff notes that, unlike subdivisions (1) and (2) of § 12-518-9a (d), which mirror the language of § 12-506, subdivision (3) of the regulation is not directly drawn from the language of the statute. The plaintiff relies on Fusco-Amatruda Co. v. Tax Commissioner, 168 Conn. 597, 604, 362 A.2d 847 (1975), for the proposition that “[n]o administrative or regulatory body can modify, abridge or otherwise change the statutory provisions under which it acquires authority unless the statute specifically grants it that power. ... In the context of the taxing power, this means that an administrative rule or regulation ... is ineffective if, inter alia, it purports to enlarge an exemption or confer an exemption not conferred by the statute.” (Citations omitted; internal quotation marks omitted.) According to the plaintiff, Fusco-Amatruda Co. not only applies to expanding upon an exemption, but also to expanding the scope of a tax. The plaintiff contends that when the defendant issued § 12-518-9a (d) (3), he expanded the definition of interest income, and so in effect imposed a tax not contemplated by the General Assembly. Accordingly, the plaintiff asserts, the regulation is invalid. We disagree.

The defendant has broad power, under General Statutes § 12-2, to promulgate regulations designed to carry out the purpose of the tax statutes. “This court pays considerable deference to the commissioner’s interpretation of tax statutes . . . [unless] the issue has not previously been the subject of judicial scrutiny, has not been the subject of a legislatively approved regulation and is not a time-tested interpretation of the statute . . . .” (Citations omitted.) Ruskewich v. Commissioner of Revenue Services, 213 Conn. 19, 24, 566 A.2d 658 (1989).

Although our case law has not specifically addressed § 12-518-9a, the state dividends, interest income and capital gains tax has received judicial scrutiny on a number of occasions. See, e.g., id., 19; Yaeger v. Dubno, 188 Conn. 206, 449 A.2d 144 (1982); Woodruff v. Tax Commissioner, 185 Conn. 186, 440 A.2d 854 (1981). In those cases we held that, because our statutory scheme is based on the federal statutory scheme, the federal treatment of dividends and capital gains applies to the dividends and capital gains income that is subject to taxation under § 12-506. The regulation at issue here appropriately follows federal rules, because it, like I.R.C. § 852 (b) (5) (B), prescribes how tax-exempt interest dividends, such as those received by the plaintiff, should be treated: “An exempt-interest dividend shall be treated by the shareholders for all purposes of this subtitle as an item of interest . . . .” (Emphasis added.) The regulation, then, by following the federal characterization of the distributions as interest income, is consistent with our prior cases.

In addition, the regulation was approved by the legislative regulation review committee, as required by General Statutes § 4-170. Legislative ratification of a proposed regulation by the review committee is an important consideration in determining whether a regulation is consistent with a statutory scheme. Phelps Dodge Copper Products Co. v. Groppo, 204 Conn. 122, 129-30, 527 A. 2d 672 (1987). Moreover, the regulation was enacted in 1985 and remains in effect today. A regulation’s existence “for a substantial period of time, although not itself determinative, is persuasive as to its validity.” Id., 130.

Because § 12-518-9a (d) (3) is consistent with our prior cases interpreting §§ 12-505 and 12-506, and because the regulation received legislative approval and has been in effect for ten years, we conclude that the defendant’s interpretation of “interest income,” as set forth in the regulation, is entitled to great deference and was a valid exercise of his authority. Because the distributions received by the plaintiff fall within the scope of the regulation, they are an item of interest income subject to state taxation.

The judgment is affirmed.

In this opinion the other justices concurred.

       The plaintiff appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal to this court pursuant to Practice Book § 4023 and General Statutes § 51-199 (c).

       General Statutes § 12-515 provides: “refund claims. Any taxpayer who feels that he has overpaid any taxes due under this chapter may file a claim for refund in writing with the commissioner within three years from the due date for which such overpayment was made stating the specific grounds upon which the claim is founded. Not later than ninety days following receipt of such claim for refund the commissioner shall determine whether such claim is valid and if so, said commissioner shall notify the comptroller of the amount of such refund and the comptroller shall draw an order on the treasurer in the amount thereof for payment to the taxpayer. To the amount of such refund there shall be added interest at the rate of three-fourths of one per cent for each month or fraction thereof which elapses between the ninetieth day following receipt of such claim for refund by the commissioner and the date of notice by the commissioner that such refund is due. Failure to file a claim within the time prescribed in this section constitutes a waiver of any demand against the state on account of overpayment. Within thirty days after disallowing any claim in whole or. in part the commissioner shall serve notice of his action on the claimant.”

       General Statutes (Rev. to 1983) § 12-515 provides: “refund claims. Any taxpayer who feels that he has overpaid any taxes due under this chapter may file a claim for refund in writing with the commissioner within three years from the due date for which such overpayment was made stating the specific grounds upon which the claim is founded. Failure to file a claim within the time prescribed in this section constitutes a waiver of any demand against the state on account of overpayment. Within thirty days after disallowing any claim in whole or in part the commissioner shall serve notice of his action on the claimant.”

       General Statutes (Rev. to 1987) § 12-506 provides in relevant part: “imposition op tax on dividends, inteeest income and capital gains. (a) A tax is hereby imposed on (1) all dividends and interest income earned, received in fact or constructively, accrued or credited to the taxpayer during his taxable year except that no such tax shall be imposed unless the taxpayer’s adjusted gross income in such year equals or exceeds fifty-four thousand dollars, in accordance with [the tax schedule] . . . .”

       General Statutes (Rev. to 1987) § 12-505 provides In relevant part: “definitions. . . . ‘[I]nterest income’means (1) any interest income taxable for federal income tax purposes, exclusive of any such income with respect to which taxation by any state is prohibited by federal law, less any amounts forfeited to a bank, savings bank, savings and loan association, credit union or other depository institution, wherever located, as a penalty for premature withdrawal of funds from a time savings account, certificate of deposit, or similar class of deposit, and (2) any interest income from obligations issued by or on behalf of any state, political subdivision thereof, or public instrumentality, state or local authority, district, or similar public entity, exclusive of such income from obligations issued by or on behalf of the state of Connecticut, any political subdivision thereof, or public instrumentality, state or local authority, district, or similar public entity created under the laws of the state of Connecticut . . . .”

       Section 12-518-9a (d) of the Regulations of Connecticut State Agencies provides: “ ‘Interest income’ means—(1) any interest income which, for federal income tax purposes, is subject to tax, (2) any interest income which is derived from obligations issued by or on behalf of any State, any political subdivision thereof, or any agency, instrumentality, authority or district of any State or any political subdivision thereof, and (3) any exempt-interest dividends, as defined in section 852 (b) (5) of the Internal Revenue Code.”

       In his brief, the plaintiff states that the defendant expanded the definition of “dividends,” but in his reply brief refers to the defendant’s efforts to modify the General Assembly’s definition of “interest income.” Because § 12-518-9a (d) clearly addresses the definition of interest income, we assume that the plaintiff’s argument is that the regulation expanded the definition of interest income.

       General Statutes § 12-2 provides in relevant part: “appointment, POWERS AND DUTIES OF COMMISSIONER OF REVENUE SERVICES. ADMINISTRATIVE pronouncements, (a) . . . . The commissioner may prescribe regulations . . . and make rulings, not inconsistent with law, to carry into effect the provisions of [title 12], which regulations or rulings, when reasonably designed to carry out the intents and purposes of [title 12], shall be prima facie evidence of its proper interpretation. . . .”

       The statutory scheme at issue in Ruskewich v. Commissioner of Revenue Services, supra, 213 Conn. 19, Yaeger v. Dubno, supra, 188 Conn. 206, and Woodruff v. Tax Commissioner, supra, 185 Conn. 186, did not subject interest to taxation. Interest was added as a taxable item in 1983.

       Accordingly, the exempt-interest dividends are subject to the state tax pursuant to § 12-506, even though they are excludable from gross income for federal tax purposes pursuant to § 852 (b) (5) (B).

       General Statutes § 4-170 provides in relevant part: “legislative review committee. ... (a) There shall be a standing legislative committee to review all regulations of the several state departments and agencies following the proposal thereof ....
      “(b) No adoption, amendment or repeal of any regulation . . . shall be effective until the original of the proposed regulation . . . has been approved by the committee . . . .”