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THE SUPREME COURT OF NEW HAMPSHIRE
___________________________
Hillsborough–southern judicial district
No. 2016-0305
SEGTEL, INC.
v.
CITY OF NASHUA
Argued: February 23, 2017
Opinion Issued: June 9, 2017
Cole Associates Civil Law, PLLC, of Lebanon (Carolyn K. Cole on the brief
and orally), for the plaintiff.
Office of Corporation Counsel, of Nashua (Celia K. Leonard on the brief
and orally), for the defendant.
HICKS, J. The defendant, the City of Nashua (City), appeals an order of
the Superior Court (Temple, J.) granting summary judgment to the plaintiff,
segTEL, Inc., on the basis that the City lacked the authority to tax the
plaintiff’s use of the City’s rights of way. See RSA 72:6, :23 (2012). We affirm.
I. Factual Background
The evidence submitted on summary judgment, viewed in a light most
favorable to the City, see N. New England Tel. Operations v. City of Concord,
166 N.H. 653, 655 (2014), supports the following facts. The City has issued
licenses to certain utility providers — FairPoint Communications, Inc. and
Public Service of New Hampshire (collectively, the utility providers) — that have
placed poles and conduits over certain rights of way owned by the City. The
utility providers pay property tax to the City pursuant to a 2005 ordinance,
which amended the terms of existing pole licenses to add the following
language: “In accordance with the requirements of RSA 72:23[,] I (b), the
licensees(s) and any other entity nor [sic] or hereafter using or occupying
municipal property pursuant to this license shall be responsible for the
payment of, and shall pay, all properly assessed personal and real property
taxes . . . .” (Quotations omitted.)
The plaintiff is a telecommunications company that owns and/or
operates a fiber optic cable network throughout New Hampshire — including
within the City. It does not own any poles or conduits within the City, and
does not have its own license from the City authorizing its occupation of the
City’s rights of way. Instead, pursuant to pole attachment agreements with the
utility providers, the plaintiff remits a fee to the utility providers in exchange
for the right to place its fiber optic cables on their poles and conduits. It is
undisputed that these pole attachment agreements do not require the plaintiff
to pay property taxes assessed by the City.
Having become aware of the plaintiff’s use of the utility providers’ poles
and conduits, the City in 2014 assessed the plaintiff property taxes of
$1,507.94 for its use of the City’s rights of way. The plaintiff applied for an
abatement, which the City denied. Thereafter, the plaintiff brought this action
in superior court, seeking: (1) a declaratory judgment that the City is not
entitled to impose the tax; and (2) to strike the City’s 2014 tax assessment.
The trial court granted summary judgment to the plaintiff, ruling that
“[b]ecause [the plaintiff] has not entered into an agreement in which it
consented to be taxed,” the City could not lawfully tax the plaintiff for its use
and occupation of the City’s rights of way. This appeal followed.
II. Analysis
“When reviewing a trial court’s grant of summary judgment, we consider
the affidavits and other evidence, and all inferences properly drawn from them,
in the light most favorable to the non-moving party.” N. New England Tel.
Operations, 166 N.H. at 655 (quotation omitted). “If our review of the evidence
does not reveal any genuine issue of material fact, and if the moving party is
entitled to judgment as a matter of law, we will affirm the trial court’s decision.”
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Id. (quotation omitted). “We review the trial court’s application of the law to the
facts de novo.” Id. (quotation omitted).
On appeal, the City argues that it has statutory authority pursuant to
RSA 72:6 and RSA 72:23 to tax the use and occupancy of its rights of way. In
opposition, the plaintiff argues that a statutory precondition for the assessment
of taxes has not been met in the instant case.
Resolution of this issue requires that we engage in statutory
interpretation. The interpretation of a statute is a question of law, which we
review de novo. Bank of N.Y. Mellon v. Dowgiert, 169 N.H. 200, 204 (2016). In
matters of statutory interpretation, we are the final arbiters of the legislature’s
intent as expressed in the words of the statute considered as a whole. Id. In
construing its meaning, we first examine the language found in the statute,
and when possible, we ascribe the plain and ordinary meanings to the words
used. Id. We interpret legislative intent from the statute as written and will
not consider what the legislature might have said or add language that the
legislature did not see fit to include. Id. We interpret statutory provisions in
the context of the overall statutory scheme. Id. Absent an ambiguity, we will
not look beyond the language of the statute to discern legislative intent. Id.
“The assessment and collection of taxes must be based on legislative
authority.” Signal Aviation Servs. v. City of Lebanon, 169 N.H. 162, 169 (2016)
(quotation omitted). RSA 72:6 provides that “[a]ll real estate, whether improved
or unimproved, shall be taxed except as otherwise provided.” RSA 72:6. RSA
72:23, I(a) exempts from taxation:
Lands and the buildings and structures thereon and therein and
the personal property owned by the state of New Hampshire or by a
New Hampshire city, town, school district, or village district unless
said real or personal property is used or occupied by other than
the state or a city, town, school district, or village district under a
lease or other agreement the terms of which provide for the
payment of properly assessed real and personal property taxes by
the party using or occupying said property.
RSA 72:23, I(a).
The parties agree that RSA 72:23, I, governs the present dispute. Indeed,
we have recognized that a city’s rights of way fall within the purview of the
statute. See Verizon New England v. City of Rochester, 151 N.H. 263, 268
(2004) (agreeing with trial court’s determination that “[w]hatever interests the
city . . . possesses in the rights of way, those interests are ‘owned’ for purposes
of determining whether non-governmental entities that use or occupy those
interests in the rights of way must pay properly assessed real estate taxes”
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(brackets omitted)). The parties, likewise, agree that the plaintiff “used or
occupied” the City’s rights of way. Thus, our determination of the City’s taxing
authority under RSA 72:6 turns upon whether the plaintiff used or occupied
the City’s rights of way “under a lease or other agreement the terms of which
provide for the payment of properly assessed real and personal property taxes
by the party using or occupying said property,” RSA 72:23, I(a).
The City argues that “the requirement for an ‘agreement’ under RSA
72:23, I[,] has been satisfied” by the pole licenses the City issued to the utility
providers. (Emphasis omitted.) We disagree, and hold that, under the
circumstances here, the City lacked the authority under RSA 72:6 and RSA
72:23, I, to tax the plaintiff’s use of its rights of way.
By its plain language, RSA 72:23, I(a) provides that city-owned property
is exempt from taxation unless: (1) that property is used or occupied by
another “under a lease or other agreement”; and (2) “the terms of [that
agreement] provide for” the payment of property taxes. RSA 72:23, I(a). We
have previously recognized that pole licenses are “other agreement[s]” for the
purposes of RSA 72:23, I(a), N.E. Tel. & Tel. Co. v. City of Rochester, 144 N.H.
118, 121 (1999), and here the utility providers’ pole licenses provide for the
payment of property taxes. However, the plaintiff does not use and/or occupy
the City’s rights of way “under” the pole licenses. See Webster’s Third New
International Dictionary 2487 (unabridged ed. 2002) (defining “under” in
relevant part as “required by: in accordance with: bound by” (bolding omitted)).
Because the plaintiff is not a party to the pole licenses, it is not subject to their
terms. See Fleet Bank-NH v. Christy’s Table, 141 N.H. 285, 290 (1996)
(holding that defendants, who were not parties to contract in question,
therefore could not be bound by its terms). It, therefore, is not subject to the
terms of the pole licenses providing for the payment of taxes. This conclusion
is consistent with our prior application of the statute. See Appeal of Reid, 143
N.H. 246, 253 (1998) (holding that municipality could not assess tax against
lessees of real properties where relevant leases did not provide for the payment
of property taxes, and explaining that “the plain language of RSA 72:23, I,
reveals that it contains . . . a tax provision that ensures that the lessees are
aware of, and consent to, taxation of their leasehold”); HEA Realty v. City of
Nashua, 136 N.H. 695, 697 (1993) (holding that the exception to RSA 72:23, I’s
tax exemption does not require that the municipality assessing the tax be party
to the agreement providing for the payment of taxes).
The City attempts to distinguish Appeal of Reid. To the extent it does so
on the basis that Reid involved the taxation of leaseholds, as opposed to the
taxation of property used or occupied pursuant to a license, we find this
argument unpersuasive. Although Appeal of Reid involved the taxation of
leaseholds, see Appeal of Reid, 143 N.H. at 247-48, for the purposes of RSA
72:23, I, this is a distinction without a difference. The City has not identified
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any language in RSA 72:23, I, indicating that the statute applies differently to
licenses from the way it does to leases. Indeed, the plain language of the
statute excepts both leased property and licensed property from the tax
exemption under the same circumstances. See RSA 72:23, I(a) (exempting
property unless “lease or other agreement” provides for the payment of taxes).
Further, to the extent that the City argues that Appeal of Reid is inapplicable
because it considered whether a municipality was entitled to tax certain
leaseholds pursuant to RSA 73:10 (2012), we disagree. Although we addressed
the municipality’s taxing authority under RSA 73:10 in Appeal of Reid, we also
addressed separately its taxing authority in light of the exception to tax
exemption contained in RSA 72:23, I. See Appeal of Reid, 143 N.H. at 250,
253. Similarly, we need not address the City’s argument that the trial court
erroneously relied upon RSA 73:10 because, even if it did, its decision is
sustainable solely under our interpretation of RSA 72:23, I.
We construe the City’s brief as arguing, in the alternative, that the
plaintiff impliedly consented to be subject to the terms of the utility providers’
pole licenses. The City claims that the plaintiff’s course of conduct
demonstrates that “it was aware of and willing to accept the conditions
imposed by the City and the legislature.” (Quotation and brackets omitted.) It
asserts that the plaintiff’s consent to be subject to the terms of the pole
licenses is evidenced by: (1) the plaintiff’s knowledge “that it must have a
license from the City to occupy City right[s] of way”; (2) the plaintiff’s knowledge
“of the conditions which are part of the . . . pole licenses” ; (3) the plaintiff’s
“place[ment] [of] its [fiber optic cable] in City right[s] of way”; and (4) the City’s
“allow[ance] . . . [of the plaintiff’s use of] its right[s] of way without issu[ance]
[of] a new license to [the plaintiff].” We disagree.
Even if we were to accept the City’s assertions, we cannot discern how
such evidence supports a conclusion that the plaintiff consented to be subject
to the terms of the utility providers’ pole licenses. Such a conclusion does not
follow from the plaintiff’s unlicensed attachments. The plaintiff’s knowledge
that the utility providers agreed to pay property taxes is insufficient evidence of
its consent to be taxed. Likewise, the City’s silent acquiescence cannot be
construed as implied consent by the plaintiff to be subject to the terms of
licenses issued to third parties. Ultimately, as the plaintiff asserts in its brief,
“[t]he fact that [the plaintiff] uses and occupies the City[’s] right[s] of way for
profit does not, by itself, create consent to be taxed.” (Quotation and citation
omitted.) Whether the absence of either a separate license to the plaintiff from
the City or an agreement by the plaintiff to be bound by the utility providers’
pole licenses would, as the City suggests, render the plaintiff a “trespass[er]”
with “no right to be in the City right[s] of way,” is not an issue before us and
does not affect our interpretation of RSA 72:23, I.
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For the foregoing reasons, we conclude that the trial court did not err in
ruling that “[b]ecause [the plaintiff] has not entered into an agreement in which
it consented to be taxed,” the City lacked the authority under RSA 72:6 and
RSA 72:23, I, to tax the plaintiff’s use of the City’s rights of way.
Affirmed.
DALIANIS, C.J., and CONBOY and LYNN, JJ., concurred.
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