Shenanne Tucker

Supreme Court At-a-Glance Contributor Shenanne Tucker, Practiced law in New Hampshire and Maine since 2002, and currently is predominantly privately employed working in insurance.

Appeal from Merrimack County, No. 2018-0570

Nov. 6, 2020

Affirmed in part, reversed in part, and remanded.

 

  • Whether the trial court erred in granting summary judgment in favor of FairPoint based on its finding that the Towns’ taxation of FairPoint was ultra vires for failing to satisfy RSA 72:23, I (b).
  • Whether the trial court erred in granting FairPoint certain tax assessment abatements.

 

FairPoint utilized municipal rights-of-way in several municipalities for its use of utility poles and related instruments to provide telecommunication services.  Under RSA 231:160, licenses can be sought for the installation and use over municipal rights-of-way.  Certain exceptions from formal licensure for preapproved infrastructure across land that later becomes a public highway exist under the statute (legally permitting such use if copies of relevant documentation are provided).  RSA 72:8-a and 72:6 permit Towns to collect property tax on (1) “the value of FairPoint’s poles and conduits” (taxed as real estate) and (2) on “the value of FairPoint’s use or occupation of municipal rights-of way” (when the agreement of use or occupation provide for such property tax assessment).  As a result of the tax assessed by a number of Towns on its use and occupation of preexisting poles, FairPoint sought abatement.  The trial court consolidated the suits against defendants, appointing “representative municipalities,” and took up the issues in two phases (“Phase 1” to determine arguments of statutory construction and ultra vires at the summary judgment stage and “Phase 2” to try the facts regarding whether the tax assessments were to be abated due to being excessive).

Following phase 1, the trial court held that the licensing requirements of RSA 231:160-a did not “automatically include the statutorily required tax-shifting language” and declined to find that FairPoint’s use or occupation constituted a “perpetual lease” of the municipal rights-of-way.  The trial court then proceeded to Phase II with two “test cases,” in which select tax years imposed by the Towns of Durham and Hanover were given a bench trial.  Once abatement was ordered, the Towns appealed.

On appeal, the Court reviewed the trial court’s findings pertaining to taxation of FairPoint’s use or occupation of the municipal rights-of-way.  Construing the statutory language of RSA 72:23, I (b), the Court found that at the relevant times, the FairPoint permissions to use existing poles under RSA 231:160-a were “other agreements” that were required by the statute to include a provision “for the payment of properly assessed real and personal property taxes by the party using or occupying said municipal] property” in addition to other related terms.  Under the statute, FairPoint’s use and occupation of existing poles was legally permitted upon submission of the requisite documents and without further proceedings (such as would be required to effectuate an amendment to such licensing), creating a “deemed” license, so long as issuance was “lawful.”  The Court concluded that, by the statutes’ terms and purposes, to be lawful, such permissive use necessarily, and as a matter of law, incorporated the provisions of RSA 72:23, I (b). The Court rejected the Towns’ alternative argument that the use by FairPoint of the poles created a type of perpetual lease that would not require inclusion of taxation language to permit assessment.  Instead, the Court found that the use did not rise to the level of “ownership” and that RSA 72.23, I required tax shifting language in leases to permit taxation.

Regarding Phase 2 of the trial court’s determinations, the Court declined to decide on appeal what valuation expert methodology was appropriate, instead deferring-in the absence of legislative directive-to the trial court’s reasonable judgment to select one or more of “five appraisal techniques in valuing utility property original cost less depreciation (rate base or net book), comparable sales, cost of alternative facilities, capitalized earnings, and reproduction cost less depreciation.” Further, the Court left determinations of expert credibility and discovery disputes to the determination trial court, and found adequate supporting evidence in the record.

Accordingly, the Court affirmed in part, reversed in part, and remanded for further determinations.  Justices Houran and Brown concurred in part and dissented in part.

 

Devine, Millimet & Branch, PA of Manchester (Matthew R. Johnson on the brief and orally, for the plaintiff.

 

Mitchell Municipal Group, P.A. of Laconia (Walter L. Mitchell and Laura Spector-Morgan on the brief and Ms. Spector-Morgan orally) for the defendant.