PUBLISHED OPINION
Case No.: 94-2140
Complete Title
of Case:
KICKERS OF WISCONSIN, INC.,
a/k/a Milwaukee Kickers Soccer
Club,
Plaintiff-Appellant-Cross
Respondent,
v.
CITY OF MILWAUKEE,
Defendant-Respondent-Cross
Appellant.
Submitted on Briefs: August 1, 1995
Oral Argument: ---
COURT COURT OF APPEALS OF WISCONSIN
Opinion Released: October 17, 1995
Opinion Filed: October
17, 1995
Source of APPEAL Appeal and cross-appeal from a judgment
and CROSS-APPEAL
Full Name JUDGE COURT: Circuit
Lower Court. COUNTY: Milwaukee
(If
"Special", JUDGE: MICHAEL P. SULLIVAN
so indicate)
JUDGES: Sullivan, Fine and Schudson, JJ.
Concurred: ---
Dissented: Fine, J.
Appellant
ATTORNEYSFor the plaintiff-appellant-cross respondent the cause
was submitted on the briefs of Foley & Lardner with Timothy C.
Frautschi and Susan A. La Budde, of Milwaukee.
Respondent
ATTORNEYSFor the defendant-respondent-cross appellant the cause
was submitted on the briefs of Grant F. Langley, city attorney, and Gregg
C. Hagopian, assistant city attorney, of Milwaukee.
COURT OF APPEALS DECISION DATED AND RELEASED October
17, 1995 |
NOTICE |
A party may file with the Supreme Court a petition to review an
adverse decision by the Court of Appeals.
See § 808.10 and Rule
809.62, Stats. |
This opinion is subject to further editing. If published, the official version will appear in the bound
volume of the Official Reports. |
No. 94-2140
STATE OF WISCONSIN IN
COURT OF APPEALS
KICKERS
OF WISCONSIN, INC.,
a/k/a
Milwaukee Kickers Soccer
Club,
Plaintiff-Appellant-Cross Respondent,
v.
CITY
OF MILWAUKEE,
Defendant-Respondent-Cross Appellant.
APPEAL
and CROSS-APPEAL from a judgment of the circuit court for Milwaukee
County: MICHAEL P. SULLIVAN,
Judge. Affirmed.
Before
Sullivan, Fine and Schudson, JJ.
SCHUDSON,
J. The issue in this case is whether
Kickers of Wisconsin, Inc., a youth soccer organization, qualifies as an
“educational association” entitled to property tax exemption pursuant to
§ 70.11(4), Stats., which
exempts up to ten acres of property owned and used by various educational,
benevolent, and religious organizations.
The trial court concluded, inter alia, that “the predominant
purpose of [Kickers] is recreational” and, therefore, that Kickers was not an
educational association entitled to the property tax exemption. We agree and affirm.
I. BACKGROUND
Kickers
is seeking an exemption for a ten-acre portion of a fifty-acre property in the
City of Milwaukee. Kickers leases the
property (with a purchase option) from the Robert A. Uihlein, Jr. 1976
Trust. Under the lease, Kickers has to
pay the real estate taxes on the property.
In 1992, the City reassessed the property and the real estate taxes
increased substantially. Kickers paid
the taxes under protest and sought a partial refund of $56,795.45 from the
City, arguing that it was entitled to a ten-acre tax exemption under
§ 70.11(4), Stats. Section 70.11(4), Stats., provides a general property tax exemption for:
Property owned and used exclusively by educational
institutions offering regular courses six months in the year; or by
churches or religious, educational or benevolent associations, ... but
not exceeding 10 acres of land necessary for location and convenience of
buildings while such property is not used for profit.
(Emphasis added.)
Kickers
brought a motion for partial summary judgment claiming to be the beneficial
owner of the property. The trial court
granted Kickers's motion.[1] Following cross-motions for summary judgment
on the remaining issues, however, the trial court further concluded:
[T]he predominant purpose of [Kickers] is recreational
so that, as a matter of law, (i) [Kickers] is not an educational institution,
an educational association, or a benevolent association for purposes of Wis.
Stat. § 70.11(4), and (ii) [Kickers] does not use the property primarily
for educational or benevolent purposes within the meaning of Wis. Stat.
§ 70.11(4).
Thus, the trial court concluded that Kickers was not
entitled to the tax exemption and refund of the 1992 taxes.
II. DISCUSSION
“When
both parties move by cross-motions for summary judgment, it is ‘the equivalent
of a stipulation of facts permitting the trial court to decide the case on the
legal issues.’” Friendship
Village v. City of Milwaukee, 181 Wis.2d 207, 219, 511 N.W.2d 345, 350
(Ct. App. 1993) (citation omitted) (“Friendship I”). We apply the same standards set forth in
§ 802.08, Stats., in
reviewing the trial court's ruling on the summary judgment motions. Id. Whether an organization “is or is not an educational association
is dependent upon a construction of the term ‘educational association’ under
sec. 70.11(4), Stats. The issue is one of statutory construction
and therefore is a question of law.” International
Found. of Employee Benefit Plans v. City of Brookfield, 95 Wis.2d 444,
448, 290 N.W.2d 720, 722 (Ct. App. 1980), aff'd, 100 Wis.2d 66, 301
N.W.2d 175 (1981). Therefore, because
this case arose on cross-motions for summary judgment and involves
interpretation and application of § 70.11(4), Stats., our review is de novo. See Friendship I, 181
Wis.2d at 219, 511 N.W.2d at 350; Waushara County v. Graf, 166
Wis.2d 442, 457, 480 N.W.2d 16, 22 (1992).
In
considering whether Kickers is entitled to an exemption under § 70.11(4), Stats., we are guided by certain
principles:
Taxation is the
rule and exemption from taxation is the exception. Tax exemption statutes are matters of legislative grace and are
to be strictly construed against the granting of an exemption. A strict construction does not mean the narrowest
possible reading, however. Rather, the
statute should be construed in a “strict but reasonable” manner. The party claiming the exemption must show
the property is clearly within the terms of the exception and any doubts are
resolved in favor of taxability.
Trustees of Indiana Univ. v. Town of Rhine, 170 Wis.2d 293, 299, 488 N.W.2d 128, 130 (Ct. App.
1992) (citations omitted). Further,
“‘[a]n exemption from taxation must be clear and express. All presumptions are against it, and it
should not be extended by implication.’”
Janesville Community Day Care Ctr., Inc. v. Spoden, 126
Wis.2d 231, 233, 376 N.W.2d 78, 80 (Ct. App. 1985) (citation omitted). Finally, “the burden of proving an
entitlement to a tax exemption is on the party seeking the exemption.” Friendship I, 181 Wis.2d at
219, 511 N.W.2d at 350.
To
qualify for property tax exemption under § 70.11(4), Stats., a taxpayer must satisfy five
criteria. Tailored to this case, they
are:
(1)Kickers must be an “educational
association”;
(2)Kickers must own and use the property
exclusively for the purposes of the association;
(3)the property must be less than ten acres;
(4)the property for which the exemption is
sought must be “necessary for convenience and location of buildings”;
(5)the property
must not be used for profit.
See Janesville
Community Day Care, 126 Wis.2d at 235, 376 N.W.2d at 81. We conclude that Kickers does not qualify as
an “educational association.”[2]
A
two-step test determines whether Kickers is an “educational association”:
(1) The organization and its property must be
substantially and primarily devoted to educational purposes; and (2) the
organization's educational activities must be “traditional,” in the sense that
their benefits are in the general public interest and are available to an
indefinite class.
Id. at 236, 376 N.W.2d at 81.
Therefore, to determine whether Kickers qualifies for the tax exemption,
we first consider whether its property “is substantially and primarily devoted
to educational purposes.” “[W]e must
look to the facts ab initio to determine whether the primary use ...
comes within the compass of what the legislature has denominated as an
educational association.” International
Found., 95 Wis.2d at 448, 290 N.W.2d at 722.
According
to its summary judgment submissions, Kickers's programs are substantially and
primarily devoted to teaching children to play soccer and conducting
competitive soccer leagues. In
conjunction with those activities, Kickers also conducts training programs for
coaches and referees. In support of its
argument that it is an educational association, Kickers points to its mission
statement, which declares that its goal is “to develop the physical, mental and
emotional growth and fitness of American youth and adults through the sport of
soccer at all levels of age and competition.”
Kickers purports to accomplish its mission “through encouraging and
educati[ng] young people and their coaches in the following respects:
1.To
provide each player with opportunities to improve individual soccer skills.
2.To encourage all players to give their best.
3.To develop programs that promote expertise in
coaching and refereeing.
4.To emphasize family participation.
5.To stress soccer as a team sport.
6.To secure the best available competition.
7.To demand good sportsmanship by players,
coaches, and spectators.
8.To instill knowledge and enjoyment of the
game of soccer.
9.To help club
members use their talents as soccer players in educational pursuits through
arrangements and assistance for grants and scholarship.”[3]
The
importance of sports and athletic competition in building character, teaching
skills and values, and fostering the healthy growth and development of children
is beyond question. The activities that
Kickers provides for children are outstanding and truly treasured by many
families throughout the Milwaukee area. Further, it is beyond dispute that such
activities do indeed carry important educational values in many ways. The fact that the educational values flow
from “physical education” does not necessarily disqualify an organization from
the tax exemption. See Trustees
of Indiana Univ., 170 Wis.2d at 304-305, 488 N.W.2d at 132 (summer
training camp used for university physical education majors qualifies where,
among other activities, university faculty teach required courses). Nevertheless, even as measured by Kickers's
own summary judgment submissions describing its programs, Kickers is
“substantially and primarily devoted to” recreational purposes.
Kickers
points to Janesville Community Day Care, arguing that the day
care center involved in that case was deemed an educational association “even
though a substantial part of the day was devoted to merely custodial care such
as feeding, napping and playing.”
Concluding, however, that the primary purpose of the day care center was
educational, Janesville Community Day Care, 126 Wis.2d at 239, 376
N.W.2d at 82, we noted that, in addition to “physical care, supervision and
feeding of the children,” the day care center made “daily use of a structured
instructional curriculum and specific programs, ... includ[ing] language and
cognitive development, music, nature study, basic math and social and physical
development.” Id. at
237-238 & n.4, 376 N.W.2d 81-82 & n.4.
The center contained a “number of classrooms and ‘learning center’
stations for the children's independent activities.” Id. at 238, 376 N.W.2d at 82. Here, by contrast, Kickers has failed to
establish that the primary purpose and use of the property is
educational.[4]
Kickers
also contends that it qualifies as an educational association because it provides
carefully structured programs comparable to those that the Wisconsin Department
of Public Instruction requires of public school physical education
programs. Although Kickers's programs
may be of such quality, and although that may further support Kicker's
undisputed claim to educational value for its programs, that does not qualify
Kickers as an educational association any more than a school's physical
education department, independent of the school's other programs and academic
curriculum, would necessarily qualify as an education association. Here, we must remember, the question is not
whether Kickers's programs have educational value comparable to that of a
public school physical education program, but, rather, whether “[t]he
organization and its property” are “substantially and primarily devoted to
educational purposes.” Janesville
Community Day Care, 126 Wis.2d at 236, 376 N.W.2d at 81.
We
acknowledge that the distinction between recreation and education may not
always be certain and clear. We
appreciate that this case presents a relatively “close call” in determining
whether Kickers is “substantially and primarily devoted to educational
purposes.” Nevertheless, while
spectators might have doubts about Kickers's request for exemption, the referees
decide according to clear rules:
[Exemption] statutes conferring special privileges and
in derogation of the sovereignty exercised over other property are to be
strictly construed. If the meaning of
such statute is fairly ambiguous or uncertain as to a specific piece of
property or owner, it is the duty of courts to resolve the doubt in favor of
the taxability of the property. It
is for the legislature to grant these special privileges, and it has always
been held that courts will proceed upon the assumption that whatever the
legislature intends to exempt will be expressed in such clear language as to
leave no doubt, and that what has been left doubtful is not intended to be
exempted.
Katzer v. City of Milwaukee, 104 Wis. 16, 21, 79 N.W. 745, 746 (1899) (citations
omitted; emphasis added).[5]
Thus,
here, as on a soccer field, those who must referee the close calls have “the
duty” to do so by the rules. “The
party claiming the exemption must show the property is clearly within the terms
of the exception and any doubts are resolved in favor of taxability.” Trustees of Indiana Univ., 170
Wis.2d at 299, 488 N.W.2d at 130 (emphasis added). Because Kickers failed to establish that its property is “clearly
within” the exception for property of organizations “substantially and
primarily devoted to educational purposes,” Kickers does not qualify as an
“educational association” under § 70.11(4), Stats. Therefore, we
conclude that the trial court correctly granted summary judgment to the City.
By
the Court.—Judgment affirmed.
No. 94-2140(D)
FINE,
J. (dissenting). In my view, the
uncontroverted evidentiary submissions establish without a doubt that the
Kickers of Wisconsin, Inc., is an “educational association” as that term is
used in § 70.11(4), Stats. See Trustees of Indiana Univ.
v. Town of Rhine, 170 Wis.2d 293, 302–304, 488 N.W.2d 128, 131–132 (Ct.
App. 1992); Janesville Community Day Care Ctr., Inc. v. Spoden,
126 Wis.2d 231, 236–241, 376 N.W.2d 78, 81–83 (Ct. App. 1985). It is settled that “educational” is not
limited to “`formal academic curricula.'”
Trustees of Indiana Univ., 170 Wis.2d at 302, 488 N.W.2d
at 131. (Citation omitted.) The Kickers have an admirable record of
teaching our state's youngsters not only the principles of soccer, but, more
significantly, the principles of sportsmanship, teamwork, and life. In my view, this is not a “relatively `close
call,'” as the Majority believes.
Majority op. at 10.
Although
I conclude that the Kickers is an “educational association” under § 70.11(4), Stats., I am uncertain whether, on this
record, the property for which the exemption is sought is “necessary for
convenience and location of buildings,” as is also required by § 70.11(4), and
would hear oral argument on that issue.
[1] The City, maintaining that the trust owned
the property, cross-appealed on the beneficial ownership issue. Our resolution of the appeal, however,
obviates the need to address this issue on cross-appeal. See Gross v. Hoffman,
227 Wis. 296, 300, 277 N.W. 663, 665 (1938) (only dispositive issue need be
addressed).
[2] Although Kickers
“claims that it triply qualifies for one ten acre exemption as an ‘educational institution,’
an ‘educational association,’ and/or as a ‘benevolent association,’”
Kickers fails to specifically support its argument with reference to a
benevolent association. Further,
Kickers concedes that the threshold for qualifying as an educational
association is lower than that for qualifying as an educational
institution. Thus, Kickers does not
argue in any context other than as an “educational association” and, accordingly,
we do not address other classifications under § 70.11(4), Stats.
Additionally, because we conclude that Kickers is not an educational
association whose property is used exclusively or primarily for educational
purposes, we do not decide whether Kickers would have satisfied the other four
criteria articulated in Janesville Community Day Care. See Gross, 227 Wis. at
300, 277 N.W. at 665.
[3] In determining
whether an organization's primary purpose is educational, “its declared object
cannot be controlling. What it actually
does must also be scrutinized.” Janesville
Community Day Care, 126 Wis.2d at 237, 376 N.W.2d at 81. In this case, however, we accept Kickers's
mission statement as an accurate summary of its purposes and its actual
activities.
[4] Further, if one considers whether Kickers
meets the requirement that it offer educational activity that “‘benefits the
general public directly and ... in some way lessen[s] the burdens of
government,’” Janesville Community Day Care, 126 Wis.2d at
240-241, 376 N.W.2d at 83 (citation omitted), additional contrasting factors
emerge. In Janesville Community
Day Care, the day care center satisfied this requirement because, among
other reasons, it offered speech therapy, vision and hearing tests, special
programs tailored to “gifted” children and children with special needs, and its
programs were coordinated with the community's public schools to assure proper
placement of special needs children.
The center also offered testimony that “children with diverse and
challenging preschool experiences and education are better developed physically,
socially and cognitively upon reaching grade school,” which translated into
“reduced burdens on the public school by eliminating the need in many instances
for counseling, testing, and speech therapy, and by increasing the likelihood
of the pupils' academic success.” Id. Thus, the day care center directly assumed
specific functions that the public schools otherwise would have had to have
provided. Although Kickers argues that
it donates some equipment and field time to the Milwaukee public schools, that
it participates in the Milwaukee public school drug awareness programs, and
that it “teaches and reinforces the same values and skills taught” in the
schools, Kickers has not established that its contributions provide what
ordinarily would be provided by government such that the burdens on government
are lessened. See Trustees of
Indiana Univ., 170 Wis.2d at 302-303, 488 N.W.2d at 131.
In this regard, we also note the
understandable concern expressed in the amicus curiae brief of the
League of Wisconsin Municipalities:
If Kickers and similar organizations whose primary
purpose is to provide after-school opportunities for children to play
recreational sports ... are permitted to remove their properties from the tax
rolls, the affected municipalities and school districts will necessarily suffer
an erosion in their tax bases. School
districts—which, by law, must provide a complete education to the same
children—will suffer the most.
(Emphasis in original.)
[5] Our resolution of the legal issue in this
case does not suggest any view that, as a matter of legislative policy, it
would be inappropriate to grant Kickers an exemption. We do note, however, that while the legislature has specifically
granted tax exemptions to numerous organizations including nonprofit youth
hockey associations, see § 70.11(32) Stats.,
it specifically declined to pass 1991 Assembly Bill 224, which was a
legislative proposal to exempt up to sixty acres of land owned or leased by
nonprofit youth soccer associations.