New England Tel. and Tel., v. City of Rochester

• Decision Date: 06 August 1999
• Docket Number: 97-647
• Parties: NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY v. CITY OF ROCHESTERTHE SUPREME COURT OF NEW HAMPSHIRE
• Court: New Hampshire Supreme Court

NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY v CITY OF ROCHESTER

No. 97-647

THE SUPREME COURT OF NEW HAMPSHIRE

August 6, 1999

Strafford

McLane, Graf, Raulerson & Middleton, P.A., of Manchester (Jack B. Middleton and Scott H. Harris on the brief, and Mr. Middleton orally), for the plaintiff.

Jones, Wensley, Wirth & Azarian, of Rochester (Danford J. Wensley on the brief and orally), for the defendant.

HORTON, J.

The defendant, City of Rochester, appeals a decision of the Superior Court (Fitzgerald, J.) granting plaintiff New England Telephone and Telegraph Company's motion for summary judgment. We reverse and remand.

The plaintiff provides telecommunications services to the residents of the city of Rochester. The defendant issued the plaintiff licenses for the location of "poles, wires, cables and other similar equipment" on city-maintained highways. See RSA 231:161, I(b), IV (1993). Pursuant to RSA 231:163 (1993), which permits license alterations "whenever the public good requires," the Rochester City Manager and Commissioner of Public Works filed a petition with the city council in March 1996 to amend the plaintiff's pole licenses to require the plaintiff to pay property taxes.

The proposed license amendment provided that "[i]n accordance with . . . RSA 72:23, I(b) this license is granted to the licensee(s) subject to the condition that the licensee(s)

. . . shall pay[] all properly assessed real and personal property taxes," and "[f]ailure of the licensee(s) to pay duly assessed personal and real taxes when due shall be cause to terminate this license." The amendment further provided that "in accordance with the requirements of RSA 72:73, I(b), the licensee(s) . . . shall be obligated to pay real and personal property taxes on structures or improvements added . . . pursuant to this license." RSA 72:23, I(b) (Supp. 1998) states:

All leases and other agreements, the terms of which provide for the use or occupation by others of real or personal property owned by the state or a city, town, school district, or village district, entered into after July 1, 1979, shall provide for the payment of properly assessed real and personal property taxes by the party using or occupying said property no later than the due date. All such leases and agreements shall include a provision that "failure of the lessee to pay the duly assessed personal and real estate taxes when due shall be cause to terminate said lease or agreement by the lessor." All such leases and agreements entered into on or after January 1, 1994, shall clearly state the lessee's obligations regarding the payment of both current and potential real and personal property taxes, and shall also state whether the lessee has an obligation to pay real and personal property taxes on structures or improvements added by the lessee.

In August 1996, the mayor and city council granted the defendant's petition after concluding that the public good required the licenses to be amended. The plaintiff appealed the decision to superior court, see RSA 231:166 (1993), and moved for summary judgment. The court held that (1) the plaintiff's licenses were not "leases [or] other agreements" within the meaning of RSA 72:23, I(b), and (2) the public good did not require the defendant to amend the plaintiff's licenses. The court granted the plaintiff's motion for summary judgment. This appeal followed.

"In reviewing a grant of summary judgment, we look at the affidavits and other evidence, and all inferences properly drawn therefrom, in the light most favorable to the non-moving party." Del Norte, Inc. v. Provencher, 142 N.H. 535, 537, 703 A.2d 890, 892 (1997). We will affirm the grant of summary judgment if the evidence reveals no genuine issue of material fact, and if the moving party is entitled to judgment as a matter of law. N.E. Tel. & Tel. Co. v. City of Franklin, 141 N.H. 449, 452, 685 A.2d 913, 916 (1996). "As no material fact is in dispute on appeal, we need only determine whether the [moving party] was entitled to judgment as a matter of law." Del Norte, Inc., 142 N.H. at 537, 703 A.2d at 892. We review de novo the trial court's application of the law to the facts. Id.

We have already decided that the plaintiff's tele-communications equipment is not taxable as real estate. See N.E. Tel. & Tel. Co., 141 N.H. at 452-56, 685 A.2d 916-18. We, therefore, address whether the defendant can require the plaintiff to pay real estate taxes on the land that the plaintiff uses pursuant to its pole licenses. The assessment and collection of taxes must be based on legislative authority. King Ridge, Inc. v. Sutton, 115 N.H. 294, 296, 340 A.2d 106, 108 (1975). We have implied that pole licenses may not be taxable as real estate because a license does not ordinarily constitute a property interest. See N.E. Tel. & Tel. Co., 141 N.H. at 455-56, 685 A.2d at 918. The defendant, however, does not seek to tax the plaintiff's licenses. Rather, the defendant seeks to amend the plaintiff's pole licenses to require the plaintiff to pay property taxes on the land it is allowed to use and occupy under those licenses.

This allocation of the tax burden is mandated by statute.

RSA 72:6 (1991) provides that all real estate shall be taxed unless otherwise provided. RSA 72:23 (Supp. 1998) exempts from taxation any real estate "owned by the state, cities, towns, school districts, and village districts unless [it] is used or occupied by [another] under a lease or other agreement the terms of which provide for the payment of properly assessed [taxes] by the party using or occupying said property." RSA 72:23, I(a) (emphasis added). All leases and other agreements executed after July 1, 1979, that permit private parties to use or occupy public property must contain language (1) requiring the party using or occupying...