Merrimack Premium Outlets, LLC v. Town of Merrimack
| Decision Date | 01 October 2021 |
| Docket Number | No. 2020-0358,2020-0358 |
| Citation | 266 A.3d 364,174 N.H. 481 |
| Parties | MERRIMACK PREMIUM OUTLETS, LLC & a. v. TOWN OF MERRIMACK |
| Court | New Hampshire Supreme Court |
Sassoon Cymrot Law, LLC, of Hingham, Massachusetts (Anthony M. Ambriano on the brief and orally), for the plaintiffs.
Drummond Woodsum & MacMahon, of Manchester (Matthew R. Serge and Demetrio F. Aspiras on the brief, and Demetrio F. Aspiras orally), for the defendant.
The plaintiffs, Merrimack Premium Outlets, LLC and Merrimack Premium Outlets Center, LLC, appeal, and the defendant, Town of Merrimack (Town), cross-appeals, orders of the Superior Court (Colburn, J.) in this action challenging the Town's reassessment of taxable property. We reverse and remand.
The following facts were recited in the trial court's orders or relate the contents of documents contained in the record. Merrimack Premium Outlets, LLC owns a large property in Merrimack (the Property) that it leases to Merrimack Premium Outlets Center, LLC. The latter entity operates a retail outlet shopping mall, known as the Merrimack Premium Outlets, on the Property. In 2016, the Town conducted a revaluation of all taxable property within the municipality. See RSA 75:8-a (2012). As a result, the Property was assessed at $86,549,400. Later that year, the Town became aware that the Property had been used in or about 2013 as collateral for a loan and had been valued for that purpose at $220,000,000. Based on this information, the Town believed that it had severely undervalued the Property. Accordingly, the Town reassessed the Property for the 2017 tax year at $154,149,500 (the 2017 reassessment). The plaintiffs then brought this action for declaratory judgment and injunctive relief.
The plaintiffs’ complaint alleges that there were no changes in either the Property or the market that justify the 2017 reassessment. It further alleges that: (1) the Property was not sold during that timeframe; (2) the reassessment did not correct any clerical or mathematical errors in the 2016 assessment; and (3) the increase in the assessment did not result from changes in assessment methodology applied to all Town properties. The complaint asserts that because "[t]he Town had no legal authority to make such a reassessment," it was "void and illegal." The complaint also alleges, "[o]n information and belief," that "the Town did not increase the tax year 2017 assessments of the other shopping center and retail outlets in the Town" and asserts that the "reassessment is an unauthorized, illegal and unconstitutional ‘spot’ assessment."
The parties requested that the court resolve certain legal issues on the pleadings to narrow the issues for trial. Accordingly, on June 14, 2019, the court issued an order addressing, among other issues, whether the Town had statutory authority to make the 2017 reassessment. The court ruled that "the Town had the legal authority to adjust the appraised value of the [Property] for the 2017 tax year despite the fact that there were no physical, zoning, or ownership change[s] to the [P]roperty following the 2016 town-wide revaluation." Based on that ruling, the court subsequently dismissed count II of the complaint for failure to state a claim, to the extent that it sought relief "on the basis that the Town lacked the authority to change the assessed value" of the Property.
The Town also initially sought to dismiss the plaintiffs’ constitutional challenge for failure to state a claim, which the trial court denied. Thereafter, the trial court dismissed that claim with prejudice when it granted the Town's second motion for sanctions based upon the plaintiffs’ repeated failure to answer certain interrogatories. It subsequently denied the plaintiffs’ motion for reconsideration.
The plaintiffs now appeal, arguing, in pertinent part, that the trial court erred in: (1) ruling that the Town had statutory authority to make the 2017 reassessment when there had been no physical, zoning, or ownership changes to the Property; and (2) dismissing their constitutional claim with prejudice as a discovery sanction. The Town cross-appeals, arguing that the trial court erred in denying the Town's motion to dismiss the plaintiffs’ unconstitutional spot assessment claim.
We begin with the plaintiffs’ argument that the trial court erred in ruling that the Town had the authority to reassess the Property for the 2017 tax year in order to correct a prior undervaluation. "Because the power to tax arises solely by statute, the right to tax must be found within the letter of the law and is not to be extended by implication." Pheasant Lane Realty Trust v. City of Nashua, 143 N.H. 140, 143, 720 A.2d 73 (1998) (quotation and citations omitted). "As such, mistaken property tax valuations can be corrected only through legislatively authorized remedies." Id. Accordingly, "[r]esolving this issue requires us to engage in statutory interpretation, and, therefore, our review is de novo." Virgin v. Fireworks of Tilton, 172 N.H. 484, 486, 215 A.3d 892 (2019) (quotation omitted).
When interpreting statutes, "[w]e first look to the language of the statute itself, and, if possible, construe that language according to its plain and ordinary meaning." Id. at 486, 215 A.3d 892. "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. Id. at 486-87, 215 A.3d 892 (citation omitted).
We described New Hampshire's statutory property tax scheme in LLK Trust v. Town of Wolfeboro, 159 N.H. 734, 992 A.2d 666 (2010). Specifically, "a tax year runs from April 1 to March 31" and "[t]axes are assessed based upon the value of property located in a town as of April 1." LLK Trust, 159 N.H. at 736, 992 A.2d 666 ; see RSA 76:2 (Supp. 2020) ; RSA 74:1 (2012). "The Town must adjust assessments annually so that all assessments are reasonably proportional within that municipality." LLK Trust, 159 N.H. at 736, 992 A.2d 666 (quotation omitted); see RSA 75:8, I (2012). In addition, at least every five years, "[t]he assessors and/or selectmen shall reappraise all real estate within the municipality so that the assessments are at full and true value." RSA 75:8-a ; cf. LLK Trust, 159 N.H. at 736, 992 A.2d 666 ().
The plaintiffs argue that "[o]nce proportionality is achieved by the ‘5-year’ town-wide reappraisal, that proportionality can only be modified when there has been a change in a property within the express terms of RSA 75:8." They contend that no such change occurred here.
The Town argues that the plaintiffs urge a "restrictive reading" of RSA 75:8 under which "no change in assessment may occur unless it satisfies one of the conditions listed in RSA 75:8, II." That reading is erroneous, the Town contends, because "[t]he plain language of RSA 75:8, II contains no limitation on why the Selectmen may consider adjusting an assessment." According to the Town, the statute is not mandatory, but
The Town misconstrues the plaintiffs’ argument. The plaintiffs do not rely on paragraph II of the statute, and the changes explicitly listed therein; rather, they rely on paragraph I, which directs assessors and selectmen to annually "adjust assessments to reflect changes." RSA 75:8, I (emphasis added). Based on that plain language, we agree with the plaintiffs that some "change" is a prerequisite to a municipality's legal authority to adjust a property's assessment under RSA 75:8, I.
The Town nevertheless contends that even if there is a "change" requirement in RSA 75:8, I, "[n]othing limits such ‘changes’ to physical manifestations." It argues that "the discovery of the extreme underassessment of the Property here satisfies any ‘change’ requirement in the statute." We disagree.
To discern the meaning of "changes" in RSA 75:8, I, we first look to paragraph II of that statute, which lists a number of events that might prompt assessors and selectmen to adjust a property's assessment. As evidenced by the final, catchall phrase, the listed events are all changes that may "affect[ ] value." RSA 75:8, II(f). Also informing our interpretation is recognition that "[t]axes are assessed based upon the value of property." LLK Trust, 159 N.H. at 736, 992 A.2d 666. RSA 75:1 requires the selectmen to appraise all taxable property, other than certain types of property specifically excepted, "at its market value[,] ... mean[ing] the property's full and true value as the same would be appraised in payment of a just debt due from a solvent debtor." RSA 75:1 (Supp. 2020). Reading RSA 75:8 as a whole and in conjunction with RSA 75:1, we conclude that adjustment to an assessment pursuant to RSA...
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