CONSTITUTIONAL LAW / TAKINGS

Counsel for First
American Law
Group, a division
of First American
Title Insurance
Company, in
Boston, MA.

No. 2019-0339
April 24, 2020

Affirmed

 

  • Whether the trial court erred in finding RSA 80:89, VII unconstitutional to the extent it purports to extinguish a municipality’s duty to provide excess proceeds of a tax sale to the former owner after three years from the date of recording of the tax deed.

Plaintiff failed to pay taxes on property he owned for 2008, 2009, and 2010. The Town imposed liens against the property for the unpaid taxes.  After the plaintiff failed to redeem the property by paying off the liens, the tax collector issued a tax deed to the Town.

Plaintiff entered into negotiations with the Town seeking a reduction of the fines and penalties assessed as part of the tax lien, but the Plaintiff failed to provided financial information requested by the Town and the Town ultimately declined to reduce the amount required to redeem the liens on the property.

More than three years after the recording of the tax deed, the Town gave notice of its intent to sell the property at auction unless the taxes were redeemed. At that time, the redemption amount for all taxes, interest, costs and penalties was about $94,000 on property assessed by the Town to have a value of $309,900.

Plaintiff filed suit challenging the statutory tax deed scheme as a violation of the New Hampshire Constitution to the extent that plaintiff’s equity in the property was being taken by the Town without just compensation.  The trial court agreed and entered an order requiring the Town to pay over to plaintiff any excess proceeds realized on the sale of the property in excess of the amounts due for taxes, interest, etc.

The Town appealed arguing that RSA 80:89 provides a mechanism for plaintiff to preserve his equity in the property that plaintiff failed to avail himself of and that, moreover, RSA 80:89 provided a three year statute of limitations for plaintiff to have asserted any claim to his excess process and plaintiff failed to timely assert those claims.

The Court affirmed the trial court, ruling that the tax sale scheme set forth at RSA 80:89 unconstitutionally permits takings without just compensation to the extent it attempted to limit the time for towns to pay excess proceeds on tax sales to three years after the date of the tax deed.  Rather, to avoid unconstitutional takings of a property owner’s equity on a tax sale, a town must provide the owner with any excess proceeds the town receives on the ultimate sale of the property—whenever that may be.

 

Alfano Law Office, PLLC, of Concord (John F. Hayes on the brief and orally), for the plaintiff.  Upton & Hatfiled, LLP, of Concord (Barton L. Mayer and Michael P. Courtney on the brief, and Mr. Mayer orally), for the defendant.  Beaumont & Campbell, Prof. Ass’n, of Salem (Bernard H. Campbell on the brief), for New Hampshire Tax Collectors’ Association, as amicus curiae.  Stephen C. Buckley, of Concord, for New Hampshire Municipal Association, by brief, as amicus curiae. New Hampshire Legal Assistance (Ruth Heintz and Steven Tower on the brief), as amicus curiae.  Pacific Legal Foundation, of Palm Beach Gardens, Florida (Christina Martin on the brief) and Bernstein, Shur, Sawyer & Nelson, P.A., of Concord (Ovide M. Lamontagne on the brief), for Pacific Legal Foundation, as amicus curiae.