Clare v. Town of Hudson

• Citation: 160 N.H. 378,999 A.2d 348
• Decision Date: 16 June 2010
• Docket Number: No. 2009–158.,2009–158.
• Court: New Hampshire Supreme Court
• Parties: Michael CLARE, Trustee of Horizon Realty Trust v. TOWN OF HUDSON.

160 N.H. 378

999 A.2d 348

Michael CLARE, Trustee of Horizon Realty Trust

v.TOWN OF HUDSON.

No. 2009–158.

Supreme Court of New Hampshire.

Argued: Jan. 20, 2010.

Opinion Issued: June 16, 2010.

David M. Groff, of Pelham, on the brief and orally, for the plaintiff.

Hage Hodes, P.A., of Manchester (Stephen C. Buckley on the brief and orally), for the defendant.

CONBOY, J.

The plaintiff, Michael Clare, appeals a decision of the Superior Court (Dalianis, J.) affirming a decision of the planning board for the Town of Hudson (Town) denying Clare's request to refund the cost of a performance bond filed with the Town. We affirm in part, reverse in part, and remand.

The record evidences the following facts. Clare, as trustee of the Horizon Realty Trust, is one of the developers of the Thurston's Landing subdivision in Hudson. On August 9, 2000, the Town of Hudson Planning Board (planning board) approved the Thurston's Landing West subdivision, but required a performance bond of $81,705 for improvements to Bush Hill Road at its intersection with Flying Rock Road. On September 8, 2000, Horizon Realty Trust paid the Town $81,705, which was used to create and fund a separate Town account (the Bush Hill Road account). On February 7, 2005, the Town paid ABB–Kin & Sons, Inc. $1,500 from the Bush Hill Road account to conduct drill tests on Bush Hill Road to determine the subsurface materials needed for the improvements.

On March 4, 2005, Town Engineer Tom Sommers proposed certain improvements to address "a less than adequate sight distance most specifically in the northerly direction looking from Flying Rock Road without increasing the vehicle speed on Bush Hill Road." Sommers noted that funding was available from the Bush Hill Road account, "which was paid by the Thurstons [sic ] Landing developer and specifically marked for this improvement," and which had grown to $86,910 due to accrued interest. The board of selectmen unanimously approved the proposed improvements at a meeting on March 22, 2005. The improvements included smoothing down a "knob in the right of way area" and slightly raising Bush Hill Road at its lowest section. The board of selectmen noted, in connection with the proposal to raise the section of Bush Hill Road, that "[t]he Highway Department is going to be grinding and repaving that area, so they can elevate that by approximately ½–1 foot." As to the financing for these improvements, the selectmen noted: "Funding is available from the developer of Thurston's West, a requirement of the planning process. Any remaining funds will be used for some paving and resurfacing in that general area." The timing of the Bush Hill Road improvements was subject to the relocation of a utility pole.

At some point in 2006, Clare inquired about the status of his performance bond. The Town responded, by letter dated November 15, 2006, that the bond was "being used to complete improvements to the subject intersection." The letter explained that the project, originally scheduled for 2005 but postponed to 2006, would be completed in the spring of 2007 due to third-party delays in the utility work.

An email sent by Road Agent Kevin Burns on July 17, 2007, requested that the Town's Engineering Division execute a purchase order "for the Bush Hill Road improvements," which "work was done under the current Town Wide Paving Project." The purchase order to Brox Industries, also dated July 17, 2007, showed a deduction of $89,153.95 from the Bush Hill Road account, with the description:

THURSTONS [sic ] LANDING WEST BOND

BUSH HILL ROAD IMPROVEMENTS.

BUSH HILL ROAD PAVEMENT COMPLE [sic ]

This payment was supported by two field reports from Brox Industries, one reporting, "Reclaimed and grade[d] 33,141 Square Yards of pavement & fine graded" on Bush Hill Road as part of the town-wide paving project between July 5 and July 12, 2007, and the second reporting, "PLACED ¾? Binder" at the same location on July 12, 13, and 16, 2007. Brox Industries' paperwork indicated that the cost for the Bush Hill Road paving work consisted of $55,014.06 for reclaiming and grading, and $196,672.49 for placement of binder. Of the $251,686.55 paid by the Town for the work, $89,153.95 came from the Bush Hill Road account. The check exhausting the Bush Hill Road account was dated August 8, 2007.

In a letter dated August 6, 2007, Clare's attorney inquired about the status of the performance bond posted "for improvements to the Flying Rock Road/ Bush Hill Road intersection." The letter continued: "More than 6 years have now passed since my client posted this bond. The Town has recently repaved Bush Hill Road. It does not appear that any of my client's funds were used for improvements to the intersection for which they were allocated." Clare requested that the planning board review the matter at its next meeting and return to him any bond funds and accrued interest. On August 23, 2007, Clare's counsel again wrote to the Town Planner requesting that the matter be scheduled for planning board review.

The Town responded by letter dated August 24, 2007, reporting that the funds had been encumbered in February 2005, and were spent in part for the 2005 ABB–Kin drill tests, with the remainder spent in July 2007, when "the Town of Hudson contracted with Brox Industries in the amount [of] $89,153.95 to construct road improvements to Bush Hill Road."

By letter dated August 27, 2007, Clare's counsel expressed his disagreement with the Town's position, writing, "Your letter [of August 24, 2007] indicates that the bond funds were spent on general road maintenance, including the recent paving done by Brox Industries in July, 2007. Unfortunately, you did not provide me with any accounting of the Town's expenditure of my client's money." Clare appealed the Town's August 24, 2007 response to the Hudson Community Development Department and to the zoning board of adjustment. Both the department and the zoning board declined to review the appeal. See RSA 676:5, III (2008) (decisions regarding innovative land use controls may not be appealed to the zoning board of adjustment); RSA 674:21, I(m) (Supp.2009) ("innovative land use controls" include impact fees).

On October 1, 2007, Clare formally applied to the planning board for release of his performance bond. In a memorandum in support of his application, he asserted that "[t]he Town did not perform the proposed improvements to the Bush Hill Road/Flying Rock Road intersection," and that his "bond was not used for its intended purpose within 6 years from the date that it was posted, as required by RSA 674:21(IV)(e)." On October 10, 2007, the planning board voted to deny his application, finding that the bond was properly encumbered and properly spent in accordance with the relevant provisions of the zoning ordinance. The superior court upheld the planning board's decision in an order dated February 2, 2009.

On appeal, Clare contends that the superior court erred in declining to order the return of his bond fund, arguing that the Town violated RSA 674:21, V(c) and (e) by expending the bond fund for a purpose other than the capital improvement for which it was collected. Specifically, he asserts that the bond fund was spent to underwrite the Town's annual road maintenance work, rather than the sight distance improvement project at the Bush Hill Road/Flying Rock Road intersection.

"Our review of the trial court's decision is deferential. We will uphold its decision on appeal unless it is unsupported by the evidence or legally erroneous." Ferson–Lake, LLC v. City of Nashua, 159 N.H. 524, 526, 986 A.2d 476 (2009) (citations omitted); see also Summa Humma Enters. v. Town of Tilton, 151 N.H. 75, 79, 849 A.2d 146 (2004). "Superior court review of planning board decisions is equally limited. The superior court is obligated to treat the factual findings of the planning board as prima facie lawful and reasonable and cannot set aside its decision absent unreasonableness or an identified error of law." Ferson–Lake, 159 N.H. at 526, 986 A.2d 476 (citation omitted). "The review by the superior court is not to determine whether it agrees with the planning board's findings, but to determine whether there is evidence upon which they could have been reasonably based." Id. "[T]he appealing party must demonstrate that an error of law was committed or must persuade the trial court by the balance of probabilities that the board's decision was unreasonable." Feins v. Town of Wilmot, 154 N.H. 715, 717, 919 A.2d 788 (2007) (quotations omitted).

We note first that Clare concedes in his brief that his "bond fund was encumbered for the purpose for which it had been collected within six years from the date it was paid, as required by RSA 674:21, V(e)." He has therefore waived his argument as to the timeliness of the Town's action to encumber his bond.

We therefore address Clare's arguments regarding impact fee accounting requirements. RSA 674:21, V provides:

As used in this section "impact fee" means a fee or assessment imposed upon development, including subdivision, building construction or other land use change, in order to help meet the needs occasioned by that development for the construction or improvement of capital facilities owned or operated by the municipality, including ... public road systems and rights-of-way.

RSA 674:21, V(c), the provision upon which Clare principally relies, further provides:

Any impact fee shall be accounted for separately, shall be segregated from the municipality's general fund, may be spent upon order of the municipal governing body, ... and shall be used solely for the capital improvements for which it was collected, or to recoup the cost of capital improvements made in anticipation of the needs which the fee was collected to meet.

The limitations on impact fees are set forth in RSA 674:21, V(a), which provides:

The amount of any [impact] fee shall be a proportional share of municipal capital improvement costs which is reasonably related to the

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