Oakes v. Town of Richmond

• Docket Number: Docket: Sag-22-279
• Decision Date: 03 October 2023
• Citation: Oakes v. Town of Richmond, 2023 ME 65, 303 A.3d 650 (Me. 2023)
• Parties: Wilhelmine’ Dennis OAKES v. TOWN OF RICHMOND
• Court: Maine Supreme Court

303 A.3d 650

2023 ME 65

Wilhelmine’ Dennis OAKES v. TOWN OF RICHMOND

Docket: Sag-22-279

Supreme Judicial Court of Maine.

Argued: March 9, 2023

Decided: October 3, 2023

Roger R. Therriault, Esq.(orally), and Michael E. Therriault, Esq., Therriault & Therriault, Bath, for appellant Wilhelmine’ Dennis Oakes

Benjamin T. McCall, Esq.(orally), Jensen Baird, Portland, for appelleeTown of Richmond

Panel: STANFILL, C.J., and MEAD, JABAR, HORTON, CONNORS, and LAWRENCE, JJ.

CONNORS, J.

[¶1] The principal question raised in this appeal is how to contest a tax assessment that the putative taxpayer argues is not incorrect in the amount sought but should not be assessed against that taxpayer at all because the property does not belong to her.

[¶2] As discussed in more detail below, Wilhelmine’ Dennis Oakes alleges that she does not own the property for which the Town of Richmond has been imposing tax assessments on her.To contest the Town's assessments, she filed a two-count complaint in the Superior Court (Sagadahoc County) seeking a declaratory judgment and damages.The court( Mallonee, J. ) dismissed her suit on the ground that (1) there was no underlying cause of action to support her request for a declaratory judgment, and (2)she could not collect damages because she failed to exhaust her administrative remedies by seeking an abatement.We disagree and vacate the judgment.In doing so, we clarify when a tax challenge should be pursued through the abatement process, when it should be the subject of a declaratory judgment action, and when the taxpayer may choose either avenue for redress.

I.BACKGROUND

[¶3] Because we are reviewing the dismissal of a complaint for failure to state a cause of action,"[t]he following substantive facts are taken from the allegations in the complaint and are viewed as if they were admitted."20 Thames St. LLC v. Ocean State Job Lot of Me. 2017 LLC , 2021 ME 33, ¶ 2, 252 A.3d 516.

A.In 2008, Oakes received a deed from someone who she alleges did not own the property at issue .

[¶4] The gist of Oakes's factual allegations is that she does not own the real property for which the Town is assessing taxes against her because the Town lacked title to the property when it deeded that property to her predecessor-in-title.

[¶5] The relevant history of the real property at issue began in 1952 when Jakov Komisnij acquired real property (Parcel A) in Richmond.Komisnij died intestate in 1960, and all his property, including Parcel A, escheated to the State of Maine because he had no known widow or heirs.

[¶6] Abutting Parcel A is Parcel B, which was owned by Jakov Paljtschik¹ during the early 1960s.In 1962 and 1963, the Town filed tax liens for unpaid taxes assessed against Paljtschik.The Town eventually acquired title to Parcel B and deeded it to Elesowet and Rosalie Slostowsky in 1965.

[¶7] For unknown reasons, the Town also deeded Parcel A to Elesowet and Rosalie.The deed refers to Parcel A as "the Yakov Komishnij property" and states, "The purpose of this deed is to convey any interest the Grantor may have in the foregoing property by virtue of unpaid taxes for the tax years 1961, 1962, 1963, 1964, 1965."But there were no recorded or matured tax liens upon which the Town could base its title because Parcel A had escheated to the State several years earlier.Nonetheless, as of 1965, Elesowet and Rosalie possessed deeds from the Town purporting to convey both Parcel A and Parcel B.

[¶8] From 1967 to 1996, various letters were exchanged among interested parties regarding Parcel A.Indeed, public officials corresponded with each other about what to do with Parcel A.²Eventually, in 1996, the State authorized the sale of Parcel A to Rosalie, but she never paid the required sum or received a release or deed from the State.Meanwhile, two attorneys sent letters to the Town about Parcel A's title defects, but the Town did not act.³The Town's records suggest that it was aware of the title issue.The assessment record for Parcel A notes, "We have property to State in 1962," but the next line states, "Never State property.Error made 1962."

[¶9] In 1999, three years after the State authorized the sale of Parcel A to Rosalie, the Town filed a tax lien against Elesowet and Rosalie for failure to pay taxes on Parcel A. Rosalie purported to convey both Parcel A and Parcel B to the Town one year later.The Town discharged the tax lien and deeded Parcel A by quitclaim deed with covenant to Oakes's predecessor-in-title.In 2008, this individual deeded Parcel A by quitclaim deed with covenant to Oakes.

[¶10] An exhibit attached to the complaint reflects that Oakes became aware of Parcel A's title defects and attempted to resolve the issue with the Town in 2019.SeeM.R. Civ. P. 10(c) & Reporter's Notes December 1, 1959(noting that Rule 10"is substantially the same as Federal Rule 10");United States ex rel. Riley v. St. Luke's Episcopal Hosp. , 355 F.3d 370, 375(5th Cir.2004)("The exhibits attached to the complaint ... are part of the complaint ‘for all purposes.’Fed. R. Civ. P. 10(c).Thus it is not error to consider the exhibits to be part of the complaint for purposes of a Rule 12(b)(6) motion.").Her efforts, however, were unsuccessful.

B. Oakessued the Town to stop the tax assessments and to collect damages.

[¶11] In 2021, Oakes filed a two-count complaint in the Superior Court against the Town seeking a declaratory judgment (Count 1) and damages (Count 2).She primarily alleged that upon Komisnij's death in 1960, Parcel A escheated to the State; that the Town is aware of Parcel A's title defects yet continues to tax the property; and that the Town has no authority to tax Parcel A because its true owner, the State, is a non-taxable entity.In Count 1, Oakes requested a judgment declaring, inter alia, that she does not have a taxable interest in the property.Count 2 seeks monetary damages, namely, reimbursement for past paid taxes, statutory interest at the state-imposed rate for those paid taxes, and a refund of the purchase price of Parcel A.

C.The court granted the Town's motion to dismiss.

[¶12] The Town answered Oakes's complaint and subsequently filed a motion to dismiss pursuant to M.R. Civ. P. 12(b)(6), which motion the court granted.

[¶13] As to Count 1, citing Sold, Inc. v. Town of Gorham , 2005 ME 24, ¶ 10, 868 A.2d 172, the court reasoned that a declaratory judgment is an equitable form of relief that requires an independent underlying claim, and Oakes's complaint set forth two potential claims—an action to quiet title and an action for abatement.

The court concluded that because the six-year limitations period had run for a quiet title action, see14 M.R.S. § 752(2023), Oakes could not seek a declaratory judgment under that claim.It also concluded that she could not pursue a declaratory judgment under an abatement claim or the damages she requested in Count 2 because she failed to exhaust her administrative remedies by following the abatement process set forth in 36 M.R.S. §§ 841,843 -44 (2023).Oakes timely appealed.SeeM.R. App. P. 2B(c)(1);14 M.R.S. § 1851(2023).

II.DISCUSSION

[¶14] As noted, supra¶ 11, Oakes seeks (1) a declaration that the Town cannot assess taxes against her with respect to Parcel A because she does not own that property, and (2) damages based on her having paid assessments taxed to her in the past.After harmonizing precedent, we conclude that the claims asserted by Oakes for declaratory relief and for compensation survive the Town's motion to dismiss.

A.We construe complaints liberally and will affirm the dismissal of a complaint pursuant to Rule 12(b)(6) only when there is no doubt that the plaintiff is not entitled to relief.

[¶15] When reviewing the dismissal of a complaint, we review the complaint de novo "in the light most favorable to the plaintiff to determine whether it sets forth elements of a cause of action or alleges facts that would entitle the plaintiff to relief pursuant to some legal theory."Moody v. State Liquor & Lottery Comm'n , 2004 ME 20, ¶ 7, 843 A.2d 43(quotation marks omitted);Nadeau v. Frydrych , 2014 ME 154, ¶ 5, 108 A.3d 1254."A dismissal should only occur when it appears beyond doubt that a plaintiff is entitled to no relief under any set of facts that [she] might prove in support of [her] claim."Moody , 2004 ME 20, ¶ 7, 843 A.2d 43(quotation marks omitted)."The general rule is that only the facts alleged in the complaint may be considered ... and must be assumed as true."Id.¶ 8.

[¶16] Importantly, because Maine is a notice-pleading jurisdiction, the level of scrutiny used to assess the sufficiency of a complaint is "forgiving."Howe v. MMG Ins. Co. , 2014 ME 78, ¶ 9, 95 A.3d 79(quotation marks omitted).

B. Oakesmay pursue a declaratory judgment action based on her allegations that the Town lacks authority to tax her on property that she does not own.

[¶17] As described more specifically below, for over two hundred years, our statutes and case law have provided that a party who challenges a tax on the ground that the property has been overvalued can pursue relief exclusively through an administrative abatement proceeding.In contrast, if a party claims that the entire tax is unlawful, a civil action is appropriate for seeking redress.Beyond these two general principles, however, the analysis becomes more complicated.

[¶18] The avenue to challenge the overvaluation of property by a municipality has been, and remains, an administrative appeal.⁴Tax challenges for reasons other than an overvaluation were originally pursued through an action in law for trespass (a tort) or assumpsit (for recovery of money), seeWare v. Percival , 61 Me. 391, 393(1873), which actions then evolved into an action for a declaratory judgment after the enactment of the Uniform Declaratory Judgments Act, 14 M.R.S. §§ 5951 - 5963(2023), in 1941 and the merger of law and equity in 1959, seeM.R. Civ. P. 2 Reporter's Notes ...