White v. Lee, 83-076

• Decision Date: 21 October 1983
• Docket Number: No. 83-076,83-076
• Citation: 124 N.H. 69,470 A.2d 849
• Parties: Randy WHITE et al. v. Judith LEE, Barrington Tax Collector et al.
• Court: New Hampshire Supreme Court

Page 849

470 A.2d 849

124 N.H. 69

Randy WHITE et al. v. Judith LEE, Barrington Tax Collector et al.

No. 83-076.

Supreme Court of New Hampshire.

Oct. 21, 1983.

New Hampshire Legal Assistance, Portsmouth (Fay E. Melendy, Portsmouth, on brief and orally), for plaintiffs.

McNeill & Taylor P.A., Dover (R. Peter Taylor, Dover, on brief and orally), for defendants.

Gregory H. Smith, Atty. Gen. (Betsy S. Westgate, Asst. Atty. Gen., on brief), for the State of New Hampshire as amicus curiae.

KING, Chief Justice.

This is an interlocutory transfer without ruling from the Superior Court (Temple, J.). In this case, we are asked to rule upon the sufficiency and constitutionality of the notice provisions of RSA chapter 80 as they apply to a current owner whose property is subject to a tax sale for delinquent taxes which were assessed against a prior owner.

The facts from which this case arose are as follows: On August 29, 1977, the plaintiffs, Randy and Katherine White, became landowners for the first time when Katherine's great grandmother, Pearl Chesley, conveyed to them for no consideration a two-acre, unimproved parcel of land located on Wood Road in Barrington, New Hampshire. In November 1977, following the transfer, the tax collector for the town of Barrington, defendant Judith Lee, mailed to Pearl Chesley a bill for the real estate taxes on the property in the amount of $24.72. In the town of Barrington, real estate tax bills are routinely sent out in November of each year to the owner of record as of April first of that tax year.

In May 1978, because the 1977 taxes on the property remained unpaid, the tax collector mailed to Pearl Chesley a notice informing her that a tax sale of the property would be held in June 1978, should the delinquent taxes on her property then remain unpaid. No notice of the impending sale was mailed to the then current owners, plaintiffs Randy and Katherine White, even though they were listed as the owners of the property on the town's current tax warrants. Pearl Chesley died in May 1978 without informing the plaintiffs of the impending sale of their property.

A tax sale of the plaintiffs' property was held on June 5, 1978. Elaine Gorrill, also named as a defendant in this suit, purchased the property from the town for $33.89. Notice of the sale was recorded at the registry of deeds; however, no notice was forwarded to the plaintiffs.

Because the plaintiffs moved several times during 1978 and 1979, they did not receive their 1978 tax bill and, through error and inadvertence, that bill was not paid.

On May 8, 1980, the plaintiffs received notice that their 1979 taxes in the amount of $33.05 must be paid prior to June 7, 1980, in order to avoid a tax sale of their property for nonpayment of these taxes. The plaintiffs did not, however, receive any notice regarding the delinquent 1977 taxes, nor were they informed that the continuing delinquency meant that their property was in jeopardy and that their right to redeem could expire on June 5, 1980.

On June 12, 1980, the plaintiffs mailed a check in the amount of $33.05 to the Barrington Tax Collector. Approximately two months after it had been received, the tax collector returned the uncashed check to the plaintiffs with a letter dated August 5, 1980, informing them that their property had been deeded to Elaine Gorrill. It was at this point that the plaintiffs first became aware of the fact that their property had been subject to a tax sale for delinquent taxes.

The plaintiffs later discovered that on July 17, 1980, more than one month after they had paid $33.05 into the town treasury, the tax collector had executed a tax deed of their property to Elaine Gorrill. RSA 80:38 (Supp.1981). The defendant Gorrill had purchased the land at a tax sale held by the town on June 5, 1978, for non-payment of the 1977 taxes on the property.

The plaintiffs filed a class action in the Strafford County Superior Court seeking injunctive and declaratory relief for themselves, and for all others similarly situated who have failed to pay their taxes and whose real estate has therefore been subject to the tax sale procedures of RSA chapter 80. The plaintiffs seek to have the tax sale of their property set aside on the basis of insufficient notice and to enjoin any further employment of the tax sale procedures as set forth in RSA chapter 80.

The plaintiffs contend that RSA chapter 80, should be interpreted to require that all notices of tax liability and tax sale proceedings be given to a current owner of property, when a town is on notice of a change in ownership since the date of the original tax assessment. The plaintiffs further contend that if the statute is not so interpreted, it is invalid on constitutional grounds because it allows a property owner who acquires his property in the middle of a tax year to lose title to it without being provided either with notice of the tax liability, the tax arrearage, the tax sale, and redemptive rights, or with an opportunity for a hearing to determine the propriety of a transfer by tax deed.

Because the questions raised in this litigation are important and novel issues in New Hampshire, and will have an impact on the procedures used by any municipality in conducting a tax sale pursuant to RSA chapter 80, the Superior Court (Temple, J.), upon recommendation of a Master (Robert A. Carignan, Esq.), transferred four questions without ruling to this court.

The first question transferred is as follows:

"1. Does RSA 80:21 require a town to notify the current owner of a parcel of real property of a tax sale where delinquent real estate taxes were assessed against a prior owner, and, as a result of a change in ownership during the tax year, the current owner was listed on subsequent tax warrants?"

RSA 80:21 requires that a tax collector, upon posting public notice of a tax sale, also provide notice "by registered mail to the last known post-office address of the owner or of the person against whom the tax was assessed." In Coleman v. Town of Hooksett, 111 N.H. 337, 283 A.2d 681 (1971), this court noted that the purposes of the tax sale notices required by RSA 80:21 are "(1) to inform the owner that his property is to be sold so that he can prevent the sale by paying the taxes, and (2) to advise prospective purchasers that the taxpayer's property is to be offered for sale." Id. at 338, 283 A.2d at 682 (emphasis added).

It is an accepted principle of statutory construction that statutes "should be construed so as to effectuate their evident purpose." State v. Sweeney, 90 N.H. 127, 128, 5 A.2d 41, 41 (1939). In order to achieve the purpose behind the notice mandates of RSA 80:21, this provision must be interpreted to require that notice be sent to those individuals most interested in retaining the property and, therefore, most willing to pay the delinquent taxes.

The current owners, as listed upon the town's tax warrants, are interested parties to an impending tax sale of their property. They stand to lose valuable rights if their property is sold, and they are, therefore, the parties who should be most willing, if given notice, to pay the delinquent taxes upon the property and thereby avoid a sale. In order to read RSA 80:21 in harmony with its purpose within the statutory scheme, it must be interpreted to require that notice of an impending sale be sent to a current owner, when that individual's name and address are listed upon the town's current tax warrant.

Only when RSA 80:21 is interpreted to require this form of notice will it withstand constitutional challenge. In a recent decision, Mennonite Board of Missions v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983), the United States Supreme Court established the right of a mortgagee of property to receive notice of an impending tax sale of the mortgaged property. Examining tax sale procedures in general, the Court held that "notice by mail or other means as certain to ensure actual notice is a minimum constitutional precondition to a proceeding which will adversely affect the liberty or property interests of any party," if that party's name and address are reasonably ascertainable. Id. at 2712 (emphasis added). The Court applied the due process mandates, expounded in Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950), to tax sale proceedings. Mennonite Bd. of Missions v. Adams, 103 S.Ct. at 2709-11. The Court further noted that "a party's ability to take steps to safeguard its own interests does not relieve the State of its constitutional obligations." Id. at 2712.

The current owners of a piece of property which is subject to an impending tax sale are interested parties whose property interests will be adversely affected by such a sale. Consequently, these individuals, whose names and addresses are reasonably ascertainable from the town's tax warrants and/or current property inventories, must be given actual notice by registered mail of an impending sale. See RSA 74:7-a (Supp.1981) (penalty for failure to file completed inventory on or before April 15). Less reliable forms of constructive notice, such as publication or posting, are not reasonable where "an inexpensive and efficient mechanism such as mail service is available." Mennonite Bd. of Missions v. Adams, 103 S.Ct. at 2711 (quoting Greene v. Lindsey, 456 U.S. 444, 455, 102 S.Ct. 1874, 1880 72 L.Ed.2d 249 (1982)). The fact that the current owners may realize that their property is subject to an annual tax, and may be able to inquire for themselves into the tax status of their property, does not relieve the State of its constitutional obligation to provide notice. Mennonite Bd. of Missions v. Adams, 103 S.Ct. at 2712.

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