Polonsky v. Town of Bedford

173 N.H. 226

238 A.3d 1102

Richard POLONSKY

v.TOWN OF BEDFORD

No. 2019-0339

Supreme Court of New Hampshire.

Argued: February 13, 2020

Opinion Issued: April 24, 2020

Alfano Law Office, PLLC, of Concord (John F. Hayes on the brief and orally), for the plaintiff.

Upton & Hatfield, LLP, of Concord (Barton L. Mayer and Michael P. Courtney on the brief, and Mr. Mayer orally), for the defendant.

Beaumont & Campbell, Prof. Ass'n, of Salem (Bernard H. Campbell on the brief), for New Hampshire Tax Collectors’ Association, as amicus curiae.

Stephen C. Buckley, of Concord, for New Hampshire Municipal Association, by brief, as amicus curiae.

New Hampshire Legal Assistance (Ruth Heintz and Steven Tower on the brief), as amicus curiae.

Pacific Legal Foundation, of Palm Beach Gardens, Florida (Christina Martin on the brief) and Bernstein, Shur, Sawyer & Nelson, P.A., of Concord (Ovide M. Lamontagne on the brief), for Pacific Legal Foundation, as amicus curiae.

DONOVAN, J.

The defendant, the Town of Bedford, appeals an order of the Superior Court (Nicolosi, J.): (1) ruling that the statutory scheme governing a municipality's obligations to compensate a former owner of property that the municipality has acquired by the execution of a tax deed violates Part I, Article 12 of the New Hampshire Constitution; and (2) awarding the plaintiff, Richard Polonsky, equitable relief. See RSA 80:88 - :91 (2012 & Supp. 2019). We affirm because the termination of a municipality's duty to provide excess proceeds from a sale of property acquired by tax deed to a former owner three years after the recording date of the deed, see RSA 80:89, VII, allows the municipality to acquire property by tax deed without compensating the former owner for the value of the property that exceeds the amount owed to the municipality.

I. Factual and Procedural Background

The relevant factual and procedural background follows. In 2008, the plaintiff inherited property in Bedford, which, according to the 2008 tax bill, was assessed at a value of $309,900. The plaintiff failed to pay his real estate taxes in 2008, 2009, and 2010. Consequently, tax liens were imposed on the property for each of those years. See RSA 80:59 (2012). When the plaintiff failed to redeem the property by paying the amount of the liens and interest, see RSA 80:69 (2012), the town tax collector issued a tax deed conveying the property to the Town on May 31, 2011. See RSA 80:76, I (2012). The Town recorded the deed on June 8, 2011.

The Town did not take any action regarding the property until April 4, 2013, when it contacted the plaintiff by telephone to advise him of the amount of back taxes, interest, costs, and penalties required to repurchase the property and of the Town's intention to sell the property by auction if he chose not to repurchase it. On June 12, the plaintiff offered to pay back taxes but requested that the Town waive the additional charges, citing ongoing medical problems that began in 2009. The Town requested financial and medical corroboration as it considered his request but received only his medical information. On July 17, the Town Council voted to reject the plaintiff's offer and begin the sale process.

Six months later, the Town formally noticed the plaintiff of its intent to sell the property. See RSA 80:89, I (Supp. 2019). The notice informed the plaintiff of his right to repurchase the property by paying back taxes, interest, costs, and penalties totaling $90,442.42. It further informed him that, if he decided to exercise this right, he had 30 days to provide written notice of his intent to repurchase the property, with payment due 15 days thereafter. ¹

The plaintiff received the notice in January 2014.

Although the plaintiff did not respond to the notice, the Town did not sell the property. In April 2015, the plaintiff received another notice of the Town's intent to sell the property, informing him that he had a right to repurchase the property by payment of back taxes, interest, costs, and penalties, now in the amount of $94,271.93. The plaintiff thereafter offered to pay the amount of back taxes and interest, but requested that the Town waive the penalties. The Town rejected the offer. The plaintiff, through counsel, twice requested the Town to reconsider its decision. By letter, the Town informed plaintiff's counsel of its decision not to reconsider, and further stated, "More than three years has passed since the property was deeded to the Town in May of 2011. Consequently, your client's right of repurchase has terminated. The notice of intent to sell and right of repurchase, dated April 10, 2015, was sent in error, and is no longer operative." See RSA 80:89, VII (Supp. 2019).

The plaintiff filed suit against the Town, alleging, in part, that the Town's intent to keep excess proceeds from an eventual sale of the property violates his "right to the equity in the subject property" under Part I, Article 12 of the New Hampshire Constitution. The Trial Court (Abramson, J.) issued a preliminary injunction, enjoining the Town from selling the property until the resolution of the litigation. The parties thereafter filed cross-motions for summary judgment. The Town argued, in relevant part, that its duty to provide the plaintiff with excess proceeds terminated upon three years from the recording date of the tax deed, pursuant to RSA 80:89, VII. The Town characterized this three-year period as a statute of limitations, within which a former owner must assert his or her right to receive excess proceeds. The plaintiff countered that, even if RSA 80:89, VII removed the Town's affirmative obligation to provide excess proceeds to him, the statute does not bar him from bringing a claim to recover the excess proceeds. Alternatively, he argued that, if RSA 80:89, VII does bar his claim, it violates Part I, Article 12 of the State Constitution by allowing the Town to take his property without just compensation. The Trial Court (Ruoff, J.) concluded that the statute did not preclude the plaintiff from recovering the excess proceeds from an eventual sale after three years, and, in light of this determination, did not address the plaintiff's constitutional argument.

The parties cross-appealed the trial court's decision to this court. See Polonsky v. Town of Bedford, 171 N.H. 89, 90-91, 190 A.3d 400 (2018). We determined, in relevant part, that the trial court's statutory interpretation conflicted with the plain language of RSA 80:89, VII, which does not allow a former owner to recover excess proceeds from a municipality after the three-year period has elapsed. Id. at 95-96, 190 A.3d 400. We concluded, therefore, that the trial court erred in finding that the statute did not bar the plaintiff's claim. Id. We remanded the plaintiff's takings argument and the Town's affirmative defenses for the trial court to address in the first instance. Id. at 98, 190 A.3d 400.

On remand, following a hearing, the Trial Court (Nicolosi, J.) first found that the Town executed a taking of the plaintiff's property, without compensation, when the tax collector issued the tax deed for the property to the Town. The trial court further observed that the application of the three-year period under RSA 80:89, VII would result in the "plaintiff being deprived of a $300,000 property for a $90,442.42 tax lien." The Town argued that RSA 80:89 provided a remedy for this otherwise unconstitutional taking, by giving the former owner three years to repurchase the property or file an action in court to compel the municipality to sell the property and pay the former owner the excess proceeds, which the plaintiff failed to do. The trial court concluded that this interpretation was inconsistent with the statutory provisions and concluded that "the statute violates the takings clause of the New Hampshire Constitution." The trial court also rejected the Town's argument that the plaintiff's claim is barred by the doctrine of unclean hands, and ruled that he is entitled to the excess proceeds of the eventual sale of the property. The Town appeals the trial court's decision.

II. Standard of Review

Because this appeal presents a question of constitutional law and statutory interpretation, our review is de novo. State v. Marshall, 162 N.H. 657, 661, 34 A.3d 540 (2011). In matters of statutory interpretation, we are the final arbiter of the intent of the legislature as expressed in the words of the statute considered as a whole. Petition of Carrier, 165 N.H. 719, 721, 82 A.3d 917 (2013). We first look to the language of the statute itself, and, if possible, construe that language according to its plain and ordinary meaning. Id. We interpret legislative intent from the statute as written and will not consider what the legislature might have said or add language that the legislature did not see fit to include. Id. We construe all parts of a statute together to effectuate its overall purpose and avoid an absurd or unjust result. Id. Moreover, we do not consider words and phrases in isolation, but rather within the context of the statute as a whole. Id. This construction enables us to better discern the legislature's intent and to interpret statutory language in light of the policy or purpose sought to be advanced by the statutory scheme. Id.

Further, in reviewing a statute, we presume it to be constitutional and will not declare it invalid except upon inescapable grounds. New Hampshire Health Care Assoc. v. Governor, 161 N.H. 378, 385, 13 A.3d 145 (2011). Accordingly, we will not hold a statute to be unconstitutional unless a clear and substantial conflict exists between it and the constitution. Id. When doubts exist as to the constitutionality of a statute, those doubts must be resolved in favor of its constitutionality. Id. The party challenging a statute's constitutionality bears the burden of proof. Id.

III. Analysis

The Town contends that the trial court erred in concluding that the statutory scheme is unconstitutional, asserting that the...