Notice: This opinion is subject to formal revision before publication in the Atlantic and Maryland Reporters. Users are requested to notify the Clerk of the Court of any formal errors so that corrections may be made before the bound volumes go to press.
DISTRICT OF COLUMBIA COURT OF APPEALS
No. 18-TX-383
JASWANT SAWHNEY IRREVOCABLE TRUST, INC., APPELLANT,
V.
DISTRICT OF COLUMBIA, APPELLEE.
Appeal from the Superior Court of the District of Columbia (CVT-27-17)
(Hon. Alfred S. Irving, Jr., Trial Judge)
(Argued March 5, 2020 Decided September 3, 2020)
Sat Nam S. Khalsa, with whom Roland F. Sennholz was on the brief, for appellant.
Mary L. Wilson, Senior Assistant Attorney General, with whom Karl A. Racine, Attorney General for the District of Columbia, Loren L. AliKhan, Solicitor General, and Caroline S. Van Zile, Deputy Solicitor General, were on the brief, for appellee.
Before MCLEESE and DEAHL, Associate Judges, and RUIZ, Senior Judge.
DEAHL, Associate Judge: Appellant Jaswant Sawhney Irrevocable Trust,
Inc. applied for a real property tax exemption under D.C. Code § 47-1002(13)
(2015 Repl.). The real property in question is the only Sikh temple—also known 2
as a gurdwara—in Washington, D.C. The tax exemption application was denied
by the District of Columbia Office of Tax and Revenue (OTR), and Sawhney Trust
appealed by filing a petition in the Superior Court. The Superior Court dismissed
Sawhney Trust’s petition for failure to state a claim upon which a tax exemption
could be granted. We reverse and remand for further proceedings.
I.
The following facts are not in dispute. Sawhney Trust is a nonprofit
charitable corporation registered in the District of Columbia. It purchased the Sikh
Gurdwara located at 3801 Massachusetts Avenue, NW, also known as Square
1816, Lot 45, on May 7, 2013. Before Sawhney Trust purchased it, the Sikh
Cultural Society of Washington, D.C., Inc. owned and operated the Gurdwara.
The property was deemed tax exempt by OTR between 2005, when it opened as a
gurdwara, and 2013, when the Sikh Cultural Society sold it to Sawhney Trust.
When Sawhney Trust sought to extend that tax exemption, its application was
denied. OTR’s denial letter explained that Sawhney Trust could not avail itself of
the tax exemption extended to “churches” under D.C. Code § 47-1002(13),
because that provision “requires that a building must be owned and used by a
single congregation in order to qualify for exemption,” whereas “the Trust is a 3
charitable organization, rather than a religious entity,” and therefore “cannot be
considered a church or congregation” under § 47-1002(13). Sawhney Trust filed a
petition seeking further review in the Superior Court. See D.C. Code § 47-1009.
In its petition, Sawhney Trust claimed that the Gurdwara qualified for
exemption under D.C. Code § 47-1002(13), which exempts “[c]hurches, including
buildings and structures reasonably necessary and usual in the performance of the
activities of the church.” In addition to owning the Gurdwara, Sawhney Trust
alleged that it had also operated the Gurdwara since buying the property from the
Sikh Cultural Society. It asserted that it “operate[d] Sikh Gurdwara (Sikh
Temple), as its auxiliary for conducting many religious activities.” Specifically,
Sawhney Trust claimed that under its ownership, the property remained dedicated
to the “identical purposes” as under the Sikh Cultural Society’s ownership, which
included serving “the religious, social, cultural, educational and spiritual needs” of
the Sikh community in the District. Sawhney Trust indicated that it had even
“added several religious activities” to the work of the Gurdwara. Beyond these
factual allegations, Sawhney Trust alleged legal error in OTR’s denial of its
application. It disputed OTR’s premise for denying its application, namely, that a
church building “must be owned and used by a single congregation” in order to
qualify for exemption under § 47-1002(13). 4
The government moved to dismiss Sawhney Trust’s petition for failing to
state a cognizable claim for exemption. It argued that concurrence of ownership
and use, the test applied by OTR in its determination, was, in fact, a prerequisite
for tax exemption under § 47-1002(13). Sawhney Trust’s petition, it argued, could
not survive this test because the property at issue was “owned by [Sawhney Trust],
which is a separate entity from the congregation which uses it.”
The trial court granted the government’s motion and dismissed Sawhney
Trust’s petition. In its order, the court focused primarily on the legal question at
issue: whether concurrent ownership and use is required for exemption under
§ 47-1002(13). The court concluded that concurrence of ownership and use is
required by Trustees of St. Paul Methodist Episcopal Church South v. District of
Columbia, 212 F.2d 244 (D.C. Cir. 1954) and Bethel Pentecostal Tabernacle, Inc.
v. District of Columbia, 106 A.2d 143 (D.C. 1954). With regard to the facts
alleged by Sawhney Trust in its petition, the court indicated it was “not persuaded
by Sawhney Trust’s attempt to classify the Sikh Temple as an auxiliary of
Sawhney Trust” and concluded that the property was “not entitled to an exemption
under D.C. Code § 47-1002(13) because Sawhney Trust, the Property’s owner, is a
legal entity separate and apart from the Sikh community that uses the Property.” 5
The trial court did not address OTR’s conclusion that, to be entitled to an
exemption, Sawhney Trust had to be a religious organization.
II.
Before turning to the merits, we address this court’s sua sponte inquiry into
whether Sawhney Trust’s January 5, 2016, “Application for Exemption from D.C.
Real Property Tax” should be considered as part of the appellate record before us.
The application was submitted to OTR and relied upon in its exemption denial, but
never filed with the Superior Court. We agree with the government’s position,
taken at oral argument, that the application was not part of the record before the
Superior Court and is not before us. We thus do not consider it in reaching our
decision.
We have held that the Superior Court’s review of adverse tax assessment
rulings is conducted “on the basis of evidence presented at trial,” rather than on the
administrative record. Square 345 Assocs. v. District of Columbia, 721 A.2d 963,
965 (D.C. 1998); see also District of Columbia v. N.Y. Life Ins. Co., 650 A.2d 671,
672 (D.C. 1994) (The Superior Court’s “task is not to conduct a review of agency
action. Rather, the court must make an independent valuation of the property on
the basis of the evidence presented at trial.”); Rock Creek Plaza-Woodner Ltd. 6
P’ship v. District of Columbia, 466 A.2d 857, 859 n.1 (D.C. 1983) (“When a
taxpayer appeals to the Superior Court . . . . ‘the whole case, both facts and law, is
open for consideration.’”) (quoting District of Columbia v. Burlington Apt. House
Co., 375 A.2d 1052, 1057 (D.C. 1977) (en banc)).
This is not only a binding interpretation of the applicable statutory
provisions but also a sound one. Section 47-3303 of the D.C. Code, which governs
Superior Court review of petitions from tax exemption denials, 1 provides that the
Superior Court “shall hear and determine all questions arising on appeal and shall
make separate findings of fact and conclusions of law.” Section 47-3304(a)
provides, relatedly, that “[d]ecisions of the Superior Court in civil tax cases are
reviewable in the same manner as other decisions of the court in civil cases tried
without a jury.” These provisions suggest that the Superior Court record begins as
a clean slate and is to be developed by the parties; it is neither limited to, nor
necessarily supplemented by, the record before the agency.
1 See D.C. Code § 47-1009 (adverse decisions under § 47-1002, as here, may be appealed “in the same manner and to the same extent as is provided in §§ 47- 3303 and 3304”). 7
It admittedly adds some confusion that our statutory provisions refer to a
Superior Court proceeding challenging a tax assessment as an “appeal.” See D.C.
Code § 47-1009 (“appeal to the Superior Court”); D.C. Code § 47-3303 (referring
to Superior Court assessment challenge as an “appeal”); cf. Super. Ct. Tax R.
6(b)(4) (requiring Superior Court petitioner to plead assignments of error to the
assessing authority). But this minor linguistic oddity does not compel a contrary
conclusion. See, e.g., Colten v. Kentucky, 407 U.S. 104, 115 (1972) (discussing
right to “appeal” that is “in reality a trial de novo”).
Given the Superior Court’s broad authority to receive new evidence,
establish a distinct record, and make independent factual determinations, we
conclude that Sawhney Trust’s petition for review initiated a new proceeding and
that the agency filings did not automatically become part of the record before the
Superior Court. Simply put, in appeals from tax exemption denials—unlike most
appeals preceded by an agency determination—the administrative proceedings do
not limit the courts’ consideration, nor do the usual principles of judicial deference
and substantial evidence review apply. When challenging an adverse tax
assessment or exemption denial it is incumbent on the petitioner to present to the
Superior Court any evidence—including any materials before the agency—that it
is entitled to the exemption. Square 345 Assocs., 721 A.2d at 965 (“[T]he taxpayer 8
bears the burden to show that the assessment it challenges is incorrect.”); see also
Super. Ct. Tax R. 6(b) (instructing that the “petitioner may append to the petition
such other statements or documents as are material”). The application is thus not
before us on appeal because it was never entered into the Superior Court record.
See D.C. App. R. 10(a). Either party may seek to submit the application into the
trial court record on remand, though we leave to the trial court whether to accept
such a submission.
III.
We now turn to the merits. The trial court dismissed Sawhney Trust’s
petition for failure to state a claim upon which relief (a tax exemption) might be
granted. We review dismissals for failure to state a claim, like those under Rule
12(b)(6),2 de novo. Super. Ct. Civ. R. 12(b)(6); Grayson v. AT&T Corp., 15 A.3d
219, 228 (D.C. 2011) (en banc). In reviewing the petition under this standard, we
2 The parties have never disputed that the standards embodied in Super. Ct. Civ. R. 12(b)(6) applied to the proceedings below, though as the trial court noted, the tax division has not formally adopted Rule 12(b)(6) and does not have an equivalent provision in its own rules. Nonetheless, it is common practice for the tax division to hear and decide motions to dismiss under the framework of Rule 12(b)(6). Given the parties’ agreement that Rule 12(b)(6)’s familiar standards were applicable to the proceedings below, we review the judgment as we would a Rule 12(b)(6) dismissal. 9
accept all factual allegations as true and construe all inferences in favor of the
petitioner. Grayson, 15 A.3d at 228. “Because ‘[o]ur rules reject the approach that
pleading is a game of skill in which one misstep . . . may be decisive to the
outcome’ and ‘manifest a preference for resolution of disputes on the merits, not
on technicalities of pleading,’ we construe pleadings ‘as to do substantial justice.’”
Id. (quoting Clampitt v. Am. Univ., 957 A.2d 23, 29 (D.C. 2008)). A case should
not be dismissed at the pleading stage because the trial court does not believe a
plaintiff will ultimately prevail. “Indeed it may appear on the face of the pleadings
that a recovery is very remote and unlikely but that is not the test.” Id. (quoting
Solers, Inc. v. Doe, 977 A.2d 941, 947 (D.C. 2009)). The test we apply is the one
outlined by the United States Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662
(2009)—whether there is sufficient factual matter, accepted as true, to “state a
claim to relief that is plausible on its face.” Potomac Dev. Corp. v. District of
Columbia, 28 A.3d 531, 544 (D.C. 2011) (quoting Iqbal, 556 U.S. at 678).
When addressing disputes over the District’s real property tax exemption
statutes, we bear in mind that “[i]t is firmly established in the jurisprudence
relating to the District’s real property tax that exemptions from taxation are to be
construed strictly against the party claiming an exemption.” Nat’l Med. Ass’n, Inc.
v. District of Columbia, 611 A.2d 53, 55 (D.C. 1992). “Any arguable ambiguity in 10
the statutory language must consequently be resolved, if reasonably possible, in
favor of the District.” 1137 19th St. Assocs. v. District of Columbia, 769 A.2d 155,
164 (D.C. 2001).
Sawhney Trust raises two main arguments in support of reversing the trial
court’s judgment of dismissal. First, it makes the broad argument that concurrence
of ownership and use is not required under the plain terms of § 47-1002(13), so
that the trial court erred in imposing that requirement.3 Second, it argues that even
if concurrent ownership and use is required, the trial court erred in granting the
motion to dismiss because the petition, viewed in the light most favorable to
Sawhney Trust, sufficiently alleged concurrent ownership and use. We take these
arguments in turn, and, because we agree with Sawhney Trust on the second point,
we then address the government’s additional arguments for affirmance.
A.
3 It argues, in the alternative, that to the extent our precedents require concurrence of ownership and use, those precedents were wrongly decided and should be overturned. As Sawhney Trust recognizes, however, a division of this court is not empowered to overturn our past precedents so we do not consider this argument. M.A.P. v. Ryan, 285 A.2d 310, 312 (D.C. 1971) (“[N]o division of this court will overrule a prior decision of this court,” as “such result can only be accomplished by this court en banc.”). 11
Sawhney Trust’s broad argument is that, contrary to the trial court’s
reasoning, there is no concurrence of ownership and use requirement in § 47-
1002(13). That provision’s plain language, the argument goes, is indifferent to
who owns the church property in question. “[T]he exemption applies to the
building not the institution” that owns it, Sawhney Trust argues, and “[s]o long as
the church building in question is used . . . primarily and regularly for public
religious worship, the building is eligible for exemption.” In other words, in
Sawhney Trust’s view, “church buildings are entitled to exemption based on the
activities that take place within them rather than on who owns a particular church
building.” The plain language of § 47-1002(13) is susceptible to that reading, as it
exempts the following real property from taxation:
Churches, including buildings and structures reasonably necessary and usual in the performance of the activities of the church. A church building is one primarily and regularly used by its congregation for public religious worship.
D.C. Code § 47-1002(13).4
4 Throughout this opinion we use the term “church,” as it appears in the statute, but understand it to include like buildings that are affiliated with religious and spiritual groups outside the Christian tradition including, for example, gurdwaras, mosques, temples, and synagogues. 12
Whatever force Sawhney Trust’s statutory interpretation argument has,
however, its interpretation is squarely foreclosed by our precedents. The United
States Court of Appeals for the District of Columbia Circuit narrowly interpreted
the statute’s text in 1954 when deciding Trustees of St. Paul, 212 F.2d at 248–49,
249 n.6, an opinion that is binding on this court. 5 In Trustees of St. Paul, the court
considered whether a church owned by a Methodist religious corporation, which
was rented out to several entirely separate religious organizations, 6 was entitled to
a tax exemption under the identically worded predecessor to the modern-day § 47-
1002(13). Id. at 246 & n.1 (construing D.C. Code § 47-801a(m) (1951 Ed.)). The
court found that the church did not qualify for exemption because it “had not been
‘primarily and regularly used by its congregation for public religious worship.’”
Id. at 248.
5 M.A.P., 285 A.2d at 312 (“With respect to decisions of the United States Court of Appeals rendered prior to February 1, 1971, we recognize that they, like the decisions of this court, constitute the case law of the District of Columbia.”). 6 At various points the Trustees of St. Paul Methodist Episcopal Church rented its building out to “Young Peoples Synagogue, Inc.,” to “Christ Temple Church,” and “to the First Church of the Nazarene.” Trustees of St. Paul, 212 F.2d at 247. Aside from the transactional lessor-lessee relationship, there was no apparent affiliation between the Trustees of St. Paul and any of those organizations. 13
The court emphasized that the use of the word “its” preceding
“congregation” in the statute’s text indicated some requisite affiliation between the
congregation and the “religious organization which owns the building” and held
accordingly that “concurrence of ownership and use is essential to the exemption
of a church building.” Id. at 249 n.6. In reaching that conclusion, the court
reasoned that the antecedent of the word “its” is “the religious organization which
owns the building.” Id. Sawhney Trust counters that the statutory text never refers
to a “religious organization which owns the building,” so it is untenable to treat
that phrase as the antecedent of the word “its.” The better reading, in Sawhney
Trust’s view, is that the antecedent of the word “its” is “a church building,” a
phrase occurring earlier in the same sentence, so that “its congregation” refers to
whatever congregation uses the church building for public religious worship. It
may well be that Sawhney Trust advances the better interpretation of § 47-
1002(13). But this is not a matter of first impression, and the interpretation
Sawhney Trust advances is foreclosed by Trustees of St. Paul.
The holding of Trustees of St. Paul was also reaffirmed, later in the same
year, by this court’s predecessor in Bethel Pentecostal, 106 A.2d at 145. In that
case, a religious corporation requested tax exemption for a newly acquired church
property that was undergoing renovations. Id. at 144. Although congregants 14
visited the church occasionally and would pray or “sing a song or two” before
helping with the renovation work, the congregation held its regular services at
another location. Id. The court found the property ineligible for exemption
because “[t]o hold that property which is being prepared for use as a church is the
same as property which is being used as a church would be a distortion of the plain
language of the statute.” Id. The court further held, as most relevant here, that
because the property was pending sale during the contested time period—so that it
was still owned by the seller, an Episcopal church, but was being used by the
buyer, Bethel Pentecostal—the property did not satisfy the concurrent ownership
and use test, which is “essential to the exemption of a church building.” Id. at 145
(quoting Trustees of St. Paul, 212 F.2d at 249 n.6).
The holdings of both Trustees of St. Paul and Bethel Pentecostal are
unambiguous and provide that “concurrence of ownership and use is essential to
the exemption of a church building.” Trustees of St. Paul, 212 F.2d at 249 n.6;
Bethel Pentecostal, 106 A.2d at 145. We thus agree with the trial court that
Sawhney Trust was required to plead concurrence of ownership and use in order to
claim exemption under § 47-1002(13). We likewise agree with the government
that the arguments advanced by Sawhney Trust for the alteration or wholesale 15
elimination of this statutorily derived standard would be better addressed to the
District of Columbia Council or to the en banc court.
B.
Having found that concurrence of ownership and use is required under § 47-
1002(13), we now address whether Sawhney Trust’s petition set forth a facially
plausible claim that it concurrently owns and uses the Gurdwara. We believe it
did.
Sawhney Trust’s ownership of the Gurdwara was plainly alleged in its
petition. What is in dispute is whether Sawhney Trust uses the Gurdwara. In its
petition, Sawhney Trust stated that it “operates Sikh Gurdwara (Sikh Temple), as
its auxiliary for conducting many religious activities” and that the Gurdwara is
dedicated to “meeting the religious, social, cultural, educational and spiritual needs
of the Sikh Community in the District.”
The trial court found these allegations insufficient as a matter of law to
establish Sawhney Trust’s use of the Gurdwara for two related reasons. First, it
concluded that the property was “not entitled to an exemption under D.C. Code
§ 47-1002(13) because Sawhney Trust, the Property’s owner, is a legal entity 16
separate and apart from the Sikh community that uses the Property.” Second, as to
Sawhney Trust’s representation that it operates the Gurdwara as “its auxiliary,” the
court was “not persuaded by Sawhney Trust’s attempt to classify the Sikh Temple
as an auxiliary of Sawhney Trust.” An auxiliary relationship was inapposite, in the
trial court’s view, because while this court’s precedents recognize that buildings
owned by one charitable organization and operated by an auxiliary charitable
organization may be entitled to a tax exemption under § 47-1002(8) (providing a
tax exemption for buildings “belonging to and operated by” charitable
organizations), the same is not true of church buildings. Compare Catholic Home
for Aged Ladies v. District of Columbia, 161 F.2d 901, 902 (D.C. Cir. 1947)
(holding a non-profit “old ladies’ home” owned by one charitable organization and
operated by its auxiliary was entitled to an exemption under § 47-1002(8)’s
predecessor statute), with Trustees of St. Paul, 212 F.2d at 249 n.6 (holding
Catholic Home’s analysis of the charitable building exemption inapplicable to the
church building exemption now codified at § 47-1002(13)). Neither is a valid
reason to deny the exemption as a matter of law.
1. There Is No Legal Identity Requirement for a § 47-1002(13) Exemption
The trial court found Sawhney Trust was not entitled to exemption because
it “is a legal entity separate and apart from the Sikh community that uses the 17
property.” This reasoning echoed the government’s view, espoused before the trial
court, that a church owner cannot claim the § 47-1002(13) tax exemption if it “is a
separate entity from the congregation which uses” the church. Sawhney Trust
concedes that the Sikh community uses the Gurdwara but argues that unlike the
transactional relationships between the entirely separate church owners and
congregations in Trustees of Saint Paul and Bethel Pentecostal, it is itself an
integral part of the Sikh community. Sawhney Trust submits that “there is no
meaningful separation between the Trust and the community that attends services
at the Gurdwara,” and that “individual trustees of the Trust are themselves
members of the Gurdwara’s congregation and, alongside other members of the
congregation, make up the leadership at the Gurdwara.” 7
We agree that those facts, if established, would demonstrate that Sawhney
Trust uses the Gurdwara for public religious worship so that it would be entitled to
a tax exemption under § 47-1002(13). Neither Trustees of St. Paul nor Bethel
7 We acknowledge that Sawhney Trust’s petition was not a model of clarity and that it has had to flesh out this point in the appellate briefing, as quoted above. But the petition does allege that Sawhney Trust “operates Sikh Gurdwara,” that the Gurdwara is “owned and used by a single congregation,” and that it is not “owned by one organization and used by another group or congregation.” We view the language in the appellate briefing as mere elaboration on the petition’s representations, which themselves were sufficient to survive a motion to dismiss. 18
Pentecostal suggest that there must be a precise legal identity shared by the church
owner and congregants in order to qualify for this property tax exemption.
Trustees of St. Paul concerned one religious organization leasing its church to
several different and unaffiliated organizations. 212 F.2d at 247. Bethel
Pentecostal, likewise, addressed the situation where one religious organization
allowed another unaffiliated organization to use its church property during the
pendency of a sale between the two. 106 A.2d at 144. In each of those decisions,
the court dealt with buildings, the ownership and use of which was divided
between wholly unaffiliated religious organizations engaged only in arms-length
transactional relationships. Here, unlike in Trustees of St. Paul or Bethel
Pentecostal, there is only one organization—Sawhney Trust—and no indication
that some separate organization owns or uses the Gurdwara. To the contrary,
Sawhney Trust has alleged that it alone operates the Gurdwara. Trustees of St.
Paul and Bethel Pentecostal do not stand for the proposition that the congregation
must itself own the church building in question. The cases require instead that the
congregation not be wholly distinct from the entity that does.
Nor do we think it makes any sense to require that a church’s owner and its
congregation be the same legal entity in order to qualify for this tax exemption, a
condition that does not appear in the relevant statutory language or in the case law. 19
For starters, it is not clear what such a requirement would even mean. The word
“congregation” is not defined in the statute, but in this context is generally
understood to mean “an assembly of persons” who meet, often “habitually,” for
“worship” and “for religious instruction.” See, e.g., Webster’s Third New
International Dictionary 478 (2002). It is not typically defined by its legal form,
nor indeed by any legal formality.
Perhaps the trial court was endorsing OTR’s view that the exemption is
inapplicable “because the [Gurdwara] is owned by [Sawhney] Trust, rather than
the congregation that worships there,” and because Sawhney Trust “appears to be
governed by a board of trustees who are not appointed or controlled by the
congregation using the property.” It is unclear how many churches would run
afoul of that test—requiring that the congregants themselves have ultimate control
over the church building’s ownership—and when pressed on this point at oral
argument the government offered little defense of it.8 See Roberts-Douglas v.
8 For instance, when asked if a church building owned by one of the church’s bishops would qualify for tax exemption, government counsel offered a “probably,” provided the bishop was “participating in the church.” See, e.g., Roberts-Douglas, 624 A.2d at 411 (Wagner, J., concurring) (describing church as being “owned and controlled by Bishop Meares and his family”). That is tough to square with OTR’s position, and the one the government took before the trial court, that the congregation itself must exercise control over the ownership of the church. Likewise, when asked whether a church placing legal title to a place of worship in (continued…) 20
Meares, 624 A.2d 405, 410–11 (D.C. 1992) (describing the “Evangel Temple” in
the District of Columbia as “governed by a Presbytery composed of ministers” that
“holds title to all church property”); see generally Michael W. McConnell & Luke
W. Goodrich, On Resolving Church Property Disputes, 58 Ariz. L. Rev. 307, 327–
30 (2016) (explaining that religious associations governed by congregations
represent only one end of a wide spectrum of religious polity and that “many
religious associations are neither ‘congregational’ nor ‘hierarchical,’” but “fall
somewhere between the two, or change over time,” with this being “particularly
true of non-Christian religious organizations, which often do not share the
Christian notions of ‘assembly’ and ‘membership’”).
There are strong reasons for us to tread lightly in this area rather than
extending a preferred tax-exempt status only to religious organizations that subject
themselves to one particular form of internal governance. See U.S. Const. amend.
I; Holy Virgin Prot. Cathedral of the Russian Orthodox Church Outside Russ. v.
(…continued) a trust controlled by the church would qualify for exemption, the government responded that “might get us closer,” but quickly reversed its position, saying “if the trust is not a church, then no,” it would not qualify. But see, e.g., Mount Jezreel Christians Without a Home v. Board of Trustees of Mount Jezreel Baptist Church, 582 A.2d 237, 239 (D.C. 1990) (describing “title to the church property” as “vested in the trustees or directors,” with the property itself “held in trust ‘for the uses and purposes named and no other’”). 21
Chertoff, 499 F.3d 658, 662 (7th Cir. 2007) (“Courts normally do not interfere in
the internal affairs of religious institutions.”) (citing Serbian E. Orthodox Diocese
for the U.S. & Can. v. Milivojevich, 426 U.S. 696, 721 (1976)). Where neither the
statutory text nor our precedents even hint at such a restrictive reading of § 47-
1002(13), we reject it.
2. The Alleged Auxiliary Relationship Between Sawhney Trust and the Gurdwara May Satisfy the Requirements of § 47-1002(13)
The trial court and the government both discount Sawhney Trust’s allegation
that it operates the Gurdwara “as its auxiliary.” To varying degrees they treat that
allegation as, at best, inapposite and, at worst, a concession that Sawhney Trust
does not itself use or operate the Gurdwara. It is neither. It is a plain allegation
that Sawhney Trust operates the Gurdwara.
Sawhney Trust’s use of the word “auxiliary” appears to have been a
misguided attempt to bring itself under the auspices of Catholic Home, which
disavows the concurrence of ownership and use requirement for charitable
buildings now codified under § 47-1002(8). 161 F.2d at 902 (construing D.C.
Code § 47-801a(h) (1940 Ed. & 1946 Supp.)). As explained above, Catholic
Home provides that a building owned by one charitable organization and used by 22
another satisfies the requirements of § 47-1002(8), governing “[b]uildings
belonging to and operated by [charitable] institutions.” D.C. Code § 47-1002(8);
161 F.2d at 902. That position was rejected as inapplicable to church buildings
under the exemption now codified at § 47-1002(13) by Trustees of St. Paul. 212
F.2d at 249 n.6. But Sawhney Trust’s legal misstep does not detract from its
critical factual allegation that it alone operates the Gurdwara.
While Sawhney Trust’s reliance on Catholic Home is indeed misplaced to
the extent it argues that concurrent ownership and use is not required under § 47-
1002(13)—in direct contravention of the holding in Trustees of St. Paul—it does
not follow that Sawhney Trust’s description of the Gurdwara as its auxiliary
defeats or is irrelevant to its claim. Although we reaffirm here that concurrence of
ownership and use is required under § 47-1002(13), that legal conclusion does little
to resolve the question presented by the factual allegations in this case: Whether a
church building owned by a single organization and operated in an auxiliary nature
by that same organization can satisfy concurrent ownership and use. In resolving
this question, we find the court’s analysis of auxiliary organizations in Catholic
Home instructive. 23
Catholic Home for Aged Ladies, a nonprofit charitable corporation, provided
rent-free housing to elderly women without means to support themselves. Catholic
Home, 161 F.2d at 901. Recognizing that there was additional need for low-rent
housing among elderly women of limited means, Catholic Home for Aged Ladies
purchased an additional residential property and incorporated an auxiliary
nonprofit corporation called Saint Margaret Mary House to operate the home. Id.
Catholic Home for Aged Ladies applied for real property tax exemption on this
newly acquired residential property and was denied on the basis that there was no
concurrence of ownership and use. Id. The United States Court of Appeals for the
District of Columbia Circuit reversed on the grounds that concurrence of
ownership and use was not required under § 47-1002(8)’s predecessor statute. Id.
at 902.
In addition to this central statutory holding, the court also considered the
auxiliary structure of the organizations under the framework of concurrent
ownership and use and ultimately rejected the notion that the property at issue was,
in fact, separately owned and operated. Although the property was owned by
Catholic Home for Aged Ladies and operated by its “auxiliary charity” Saint
Margaret Mary House, the court designated this distinction a mere technicality,
saying, “if we look through the shadow to the substance we find that both charities 24
are, except in name, one and the same, though separately organized to accomplish
each [charity’s] specific purpose.” Id. Whether Sawhney Trust concurrently owns
and operates the Gurdwara is ultimately a factual question that will turn on whether
it participates in the religious activities of the Gurdwara or instead deals with it
only through arms-length transactions, 9 as in Trustees of St. Paul and Bethel
Pentecostal. At this stage, Sawhney Trust’s allegations that it owns and operates
the Gurdwara as its auxiliary, providing religious services to meet the needs of the
local Sikh community, is enough to state a plausible claim that it meets the
requirements of this test.
To the extent the trial court found the auxiliary nature of the Gurdwara’s
operation insufficient because it indicates that Sawhney Trust is engaged in
additional activities that are not explicitly or traditionally religious, we do not
believe that this defeats its claim either. In its denial letter, OTR stressed that
Sawhney Trust’s “purposes and activities consist of providing tuition assistance to
needy students and providing financial support to the All India Pingalwara Society
or other charities in India,” benefiting individuals who are not members of the
9 What we mean by “religious activities”—an admittedly opaque term—is that Sawhney Trust must be engaged in the religious elements of the Gurdwara, as opposed to merely providing facilities management, financial support, or the like, as was the case in Trustees of St. Paul and Bethel Pentecostal. 25
congregation. Sawhney Trust does not dispute that it originally incorporated to
engage in charitable work, that it continues to engage in charitable work outside
the scope of the Gurdwara’s operation, or that much of this work benefits residents
of India. Sawhney Trust submits on appeal that its petition “used the term
‘auxiliary’ to describe the Gurdwara’s relationship to the Trust, indicating that
owning and operating the Gurdwara is an integrated function of the Trust alongside
the Trust’s other tax-exempt charitable activities.” This is an inference that can
readily be drawn from the facts alleged and it is not one that defeats a claim for tax
exemption under § 47-1002(13). Sawhney Trust’s characterization of the
Gurdwara’s operation as auxiliary to its other charitable work does not make
Sawhney Trust’s claim for exemption implausible. Just as two separately
incorporated organizations may satisfy concurrence of ownership and use where
they are “except in name, one and the same,” Catholic Home, 161 F.2d at 902,
there is no reason why a single organization engaged in charitable work extending
beyond its operation of a church could not.
Indeed, we find no basis in either the text of the statute or this court’s
precedents to support the proposition that an otherwise tax-exempt church property
must lose its exemption if the organization owning it engages in outside charitable
work. Although the property itself must be used “primarily and regularly . . . for 26
public religious worship,” there is no like limitation on the primary activities of the
entity that owns the property. D.C. Code § 47-1002(13). Imposing such a
requirement would not only significantly narrow the existing exemption, without a
basis in text or precedent for doing so, but would also run counter to the charitable
practices—and in many cases, teachings—of diverse religious traditions. We
decline to adopt such an interpretation.
C.
The government makes two additional arguments in support of affirmance
that were not addressed by the Superior Court. First, it argues that Sawhney
Trust’s petition did not allege concurrent ownership and use because it conceded
that the property actually remains under the operation of its prior owner, the Sikh
Cultural Society. Second, the government argues that Sawhney Trust is ineligible
for exemption under § 47-1002(13) because it is a charitable organization rather
than a “religious organization.” Neither argument is persuasive.
1. The Pleadings Do Not Establish that the Sikh Cultural Society Operates the Gurdwara.
The government argues on appeal that Sawhney Trust does not, in fact,
operate the Gurdwara. It points to Sawhney Trust’s statement in its petition that 27
“[t]he Property since its purchase is dedicated not only to the identical purpose of
Sikh Society, but has added several religious activities.” That is an implicit
concession, the argument goes, that “a distinct corporate entity, the Sikh Cultural
Society used the property for religious activities before it sold the property and
continues with the same religious activities at the Temple after the sale.”
That is a quantum logical leap, and not one we can draw from the pleadings.
To say that the Gurdwara remains dedicated to the identical purpose that the Sikh
Cultural Society used the Gurdwara for—serving the Sikh community—does not
express, imply, suggest, or even hint that the Sikh Cultural Society rather than
Sawhney Trust continues to operate the property. In fact, Sawhney Trust alleged
just the opposite, that it itself operates the Gurdwara. If the government believes
otherwise, for whatever reason, it can attempt to develop a record to that effect on
remand. But at this stage of the proceedings, Sawhney Trust is entitled to the
benefit of all inferences and there is no reason to draw this tenuous inference
advocated by the government.
2. Section 47-1002(13) Contains No “Religious Organization” Requirement Beyond that the Same Organization Own and Use the Church
In addition to its other claims, the District of Columbia argues that Sawhney
Trust does not qualify for exemption under § 47-1002(13) because it is not a 28
“religious organization,” as that phrase appears in Trustees of St. Paul, 212 F.2d at
249 n.6, though it is not in the text of § 47-1002(13). It bases this conclusion on
OTR’s statement that Sawhney Trust characterized itself in its application for
exemption as a “charitable, non-profit organization.” Sawhney Trust states on
appeal that it considers itself a religious, charitable, and educational organization
and asserts that the organization itself is a tax-exempt nonprofit corporation.
Our precedents instruct “that the terms ‘religion’ and ‘religious’” are to be
construed, for purposes of the tax exemption under § 47-1002(13), in accordance
with their “ordinary usage,” which defies classification of religions via “rigid
concepts.” Washington Ethical Soc’y v. District of Columbia, 249 F.2d 127, 129
(D.C. Cir. 1957). We thus need not determine “broadly whether [Sawhney Trust]
is in an ecclesiastical sense a religious society or church” to answer the narrow
question of whether its property qualifies for exemption under § 47-1002(13). Id.
While Trustees of St. Paul states that the tax exemption under § 47-1002(13)
inheres to the benefit of the “religious organization which owns the building,” 212
F.2d at 249 n.6, it does not presume to adopt an interpretation of what qualifies as a 29
religious organization, beyond that it be an organization that owns and operates the
church in question.10
Exemption of church buildings under § 47-1002(13) exists in the context of
like exemptions for “art galleries, libraries, public charities, hospitals, schools and
colleges.” Washington Ethical Soc’y, 249 F.2d at 129; D.C. Code § 47-1002. The
critical inquiry under the statutory framework is the use of the property, not the
structure of the organization that owns it. That is a marked contrast from the
separate real property tax exemption provided in § 47-1002(14), which is limited to
buildings used for religious activities so long as they also “belong[] to religious
corporations and societies.” Under that exemption, unlike § 47-1002(13), there is
at least a plausible textual argument that the owner of the building must, in some
more limited sense, be a religious organization. But no similarly restrictive
language appears in § 47-1002(13). Where an organization owns and operates a
10 There was no occasion to consider this issue in Trustees of St. Paul where there was no dispute that the church owner was a religious organization; the dispute, instead, centered on whether one religious organization leasing its church out to an entirely separate and unaffiliated religious organization in an arms-length transaction could benefit from the tax exemption under § 47-1002(13). 212 F.2d at 246–47. We do not disturb Trustees of St. Paul’s holding, which did nothing more than answer that narrow question in the negative. 30
church by participating in its religious elements, see supra note 9, it is a religious
organization in the relevant sense that term was used in Trustees of St. Paul.
Sawhney Trust has alleged enough to establish a plausible claim that the
Gurdwara is “primarily and regularly used by its congregation for public religious
worship.” D.C. Code § 47-1002(13). Where this standard is met, a claim for
exemption will not be defeated because the organization itself could be
characterized as doing more to serve another cause in the public interest on a not-
for-profit basis.
IV.
We reverse the trial court’s order dismissing Sawhney Trust’s petition and
remand for further proceedings. Sawhney Trust filed a petition in the Superior
Court alleging that it owns and operates the Gurdwara, which provides religious
services to meet the cultural and spiritual needs of the Sikh community in the
District. If Sawhney Trust can establish those facts as true, it is entitled to an
exemption from real property taxes for the Gurdwara under § 47-1002(13).
So ordered.