Eldertrust of Florida v. Town of Epsom, 2005-706.

CourtSupreme Court of New Hampshire
Citation919 A.2d 776
Docket NumberNo. 2005-706.,2005-706.
PartiesELDERTRUST OF FLORIDA, INC. v. TOWN OF EPSOM.
Decision Date18 January 2007
919 A.2d 776
ELDERTRUST OF FLORIDA, INC.
v.
TOWN OF EPSOM.
No. 2005-706.
Supreme Court of New Hampshire.
Argued: October 11, 2006.
Opinion Issued: January 18, 2007.

[919 A.2d 778]

Orr & Reno, P.A., of Concord (William L. Chapman and Jessica E. Storey on the brief, and Mr. Chapman orally), for the plaintiff.

Soltani/Mosca, PLLC, of Epsom (Edward C. Mosca on the brief and orally), for the defendant.

DUGGAN, J.


The defendant, Town of Epsom (Town), appeals a recommendation of the Special Master (Manias, J.), approved by the Superior Court (Fitzgerald, J.), granting a charitable tax exemption on properties owned by the plaintiff, ElderTrust of Florida, Inc. (ElderTrust). We affirm.

I. Background

The trial court found the following facts. National Health Investors (NHI) is a real estate investment trust that held mortgages on Epsom Manor and Heartland Place (collectively, the facilities), both of which are located in Epsom. Epsom Manor is a skilled nursing facility and Heartland Place is an assisted living facility. In 1999, NHI foreclosed on the mortgages for both facilities, took over their operation, and later contracted with National HealthCare Corporation (NHC) to manage them.

ElderTrust is a Tennessee non-profit corporation. Pursuant to its articles of incorporation, ElderTrust was "organized, and at all times thereafter operated, exclusively for public charitable uses and purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code, to establish, acquire, own, maintain, and operate hospitals, nursing homes and related health care facilities, including retirement housing for elderly persons."

In 2001, CFN Manchester/North, LLC (CFN), a subsidiary of ElderTrust, initiated efforts to acquire the facilities. ElderTrust acted through CFN because it believed that such an operational arrangement

919 A.2d 779

would facilitate its efforts to obtain funding from the United States Department of Housing and Urban Development (HUD) to finance the acquisition. However, HUD denied CFN's application for financing in 2001, so ElderTrust purchased the facilities through a mortgage financed by NHI, and contracted with NHC to manage the facilities for a fixed fee.

Thereafter, ElderTrust sought a tax exemption on the facilities under RSA 72:23, V for the 2002 tax year. The Town denied ElderTrust's application and assessed a tax totaling $104,774.90 on both facilities, which ElderTrust paid. ElderTrust appealed to the superior court, which ruled that the tax exemption should have been granted. The Town then appealed to this court.

Here, the Town argues the trial court erred in granting the tax exemption and in concluding that ElderTrust: (1) was established and administered for the purpose of performing some service of public good or welfare; (2) provided no pecuniary profit or benefit to its officers or members; and (3) owned, used or occupied its property for charitable purposes.

II. Standard of Review

Resolution of this appeal requires us to consider the interpretation and application of RSA 72:23, V (2003) and RSA 72:23-l (2003). See E. Coast Conf. of the Evangelical Covenant Church of America v. Town of Swanzey, 146 N.H. 658, 661, 786 A.2d 88 (2001). The interpretation and application of statutes present questions of law, which we review de novo. See, e.g., Town of Hinsdale v. Town of Chesterfield, 153 N.H. 70, 72, 889 A.2d 32 (2005); see also Hattiesburg Area Senior Servs., Inc. v. Lamar County, 633 So.2d 440, 444 (Miss.1994) (de novo review of charitable tax exemption cases); Iowa Methodist Hosp. v. Bd. of Review, 252 N.W.2d 390, 391 (Iowa 1977) (de novo review of charitable tax exemption cases). In conducting our review, we accord deference to the trial court's findings of historical fact, where those findings are supported by evidence in the record. Elwood v. Bolte, 119 N.H. 508, 510, 403 A.2d 869 (1979).

III. Discussion

The Town contends, in essence, that the trial court misinterpreted and misapplied RSA 72:23, V and RSA 72:23-l. We first interpret the statutes, and then consider their application.

RSA 72:23, V provides an exemption from taxation for:

[t]he buildings, lands and personal property of charitable organizations and societies organized, incorporated, or legally doing business in this state, owned, used and occupied by them directly for the purposes for which they are established, provided that none of the income or profits thereof is used for any other purpose than the purpose for which they are established.

Pursuant to RSA 72:23-l,

[t]he term "charitable" as used to describe a corporation, society or other organization within the scope of this chapter, including RSA 72:23 and 72:23-k, shall mean a corporation, society or organization established and administered for the purpose of performing, and obligated, by its charter or otherwise, to perform some service of public good or welfare advancing the spiritual, physical, intellectual, social or economic well-being of the general public or a substantial and indefinite segment of the general public that includes residents of the state of New Hampshire, with no pecuniary profit or benefit to its officers or members, or any restrictions which confine its benefits or services to such officers

919 A.2d 780

or members, or those of any related organization. The fact that an organization's activities are not conducted for profit shall not in itself be sufficient to render the organization "charitable" for purposes of this chapter, nor shall the organization's treatment under the United States Internal Revenue Code of 1986, as amended. This section is not intended to abrogate the meaning of "charitable" under the common law of New Hampshire.

RSA 72:23-l (emphasis added); see also The Housing Partnership v. Town of Rollinsford, 141 N.H. 239, 241, 683 A.2d 189 (1996) (RSA 72:23-l "is consistent with the common law definition of charitable organization.").

In matters of statutory interpretation, we are the final arbiters of the legislature's intent as expressed in the words of the statute considered as a whole. Town of Hinsdale, 153 N.H. at 72, 889 A.2d 32. When examining the language of the statute, we ascribe the plain and ordinary meaning to the words used. Appeal of Town of Bethlehem, 154 N.H. ___, ___, 911 A.2d 1 (2006). 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 have interpreted and applied both RSA 72:23, V and RSA 72:23-l on a number of previous occasions. See, e.g., Appeal of Town of Wolfeboro, 152 N.H. 455, 458-59, 879 A.2d 1137 (2005); Appeal of City of Franklin, 137 N.H. 622, 624-25, 631 A.2d 537 (1993); Town of Rollinsford, 141 N.H. at 240-41, 683 A.2d 189; Town of Swanzey, 146 N.H. at 661-62, 786 A.2d 88. In most of our past cases, we have conducted a narrow analysis to ascertain whether a particular portion of the charitable tax exemption statutory scheme was satisfied. We have not yet been presented with an opportunity to synthesize our previous holdings and to delineate a clear, multipartite inquiry, grounded in the statutory language, as to when a charitable tax exemption should be granted under RSA 72:23, V and RSA 72:23-l. We now take the opportunity to join a number of other courts, see, e.g., Methodist Old Peoples Home v. Korzen, 39 Ill.2d 149, 233 N.E.2d 537, 541-42 (1968); Clark v. Marian Park, Inc., 80 Ill.App.3d 1010, 36 Ill.Dec. 241, 400 N.E.2d 661, 664 (1980); Hospital Utilization Project v. Commonwealth, 507 Pa. 1, 487 A.2d 1306, 1317 (1985), in articulating a discrete set of factors against which a charitable tax exemption application must be evaluated.

We hold that the plain language of RSA 72:23, V and RSA 72:23-l requires the institution to satisfy each of the following four factors; namely, whether: (1) the institution or organization was established and is administered for a charitable purpose; (2) an obligation exists to perform the organization's stated purpose to the public rather than simply to members of the organization; (3) the land, in addition to being owned by the organization, is occupied by it and used directly for...

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