Merrimack Premium Outlets, LLC & a. v. Town of Merrimack

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2023-0545, Merrimack Premium Outlets, LLC &
a. v. Town of Merrimack, the court on February 28, 2025, issued
the following order:

The court has reviewed the written arguments and the record submitted
on appeal, has considered the oral arguments of the parties, and has
determined to resolve the case by way of this order. See Sup. Ct. R. 20(3). The
plaintiffs, Merrimack Premium Outlets, LLC and Merrimack Premium Outlets
Center, LLC, appeal orders of the Superior Court (Colburn, J.) denying their
motion for entry of final order as to tax year 2017, deeming their motion for
summary judgment moot, and dismissing their amended complaint in this
action challenging the reassessment of taxable property (the Property) by the
defendant, Town of Merrimack (Town). We affirm in part, reverse in part, and
remand.

This appeal follows our remand of this case in Merrimack Premium
Outlets v. Town of Merrimack, 174 N.H. 481 (2021). The detailed factual
background of this case was recited in Merrimack Premium Outlets. Briefly,
following a 2016 revaluation of all taxable property in the municipality, the
Town became aware that a higher valuation of the Property had been used in
connection with securing a loan. Merrimack Premium Outlets, 174 N.H. at
483. Believing that it had severely undervalued the Property in 2016, the Town
increased the Property’s assessment for the 2017 tax year. Id. The plaintiffs
sued for declaratory and injunctive relief and, in an appeal challenging multiple
trial court rulings, we held “that the trial court erred in ruling that the Town
had the authority to correct its undervaluation of the Property by adjusting its
assessment pursuant to RSA 75:8.” Id. at 483, 489. We accordingly reversed
and remanded, and noted that disposition obviated the need to address the
parties’ remaining arguments. Id.

On remand, the plaintiffs filed a motion seeking a final order as to tax
year 2017, arguing that the opinion and mandate in Merrimack Premium
Outlets made it “clear that no further action is required by the trial court other
than the entry of judgment in favor of the Plaintiffs with respect to tax year
2017.” The plaintiffs also filed a motion for partial summary judgment in the
now-consolidated action relating to tax years 2017 through 2020. Both
motions sought a refund of the amount of taxes attributable to the
reassessment of the Property, plus statutory interest.
 The trial court denied the motion for final order. In a subsequent order,
issued in November 2022, the trial court noted the “tortured procedural
history” of the consolidated cases and stated that “[a]s such, the Court is not
entirely sure which claims for which tax years are even still before it or what
relief, exactly, the plaintiffs are seeking for each tax year and the legal basis for
that relief.” Accordingly, the trial court “exercise[d] its case management
authority to require the plaintiffs to file a single complaint that includes all of
their claims (constitutional, statutory, equitable, or otherwise) and requests for
relief arising from every tax year at issue (presumably 2017 through 2020).” It
further instructed:

This new complaint will be the operative complaint going forward
and will supersede all of the prior complaints in each of the
consolidated docket numbers. The plaintiffs shall file it as if this
Court has made no prior dismissal rulings in any of these cases,
but should take into consideration the supreme court’s opinion
and the current realities when deciding which claims to bring.

In light of that ruling, the trial court deemed the plaintiffs’ motion for summary
judgment to be moot.

The plaintiffs filed an amended complaint setting forth two counts, the
first captioned as a “statutory claim” and the second as an “equal protection
claim.” (Capitalization omitted.) The Town filed a motion to dismiss both
counts, which the trial court granted. The court ruled that to the extent count
I sought a declaratory judgment, it must be dismissed as moot because
Merrimack Premium Outlets “effectively provided the declaratory relief the
plaintiffs seek.” The court further ruled that to the extent count I was “a
statutory cause of action premised on a violation of RSA 75:8,” it failed to state
a claim for which relief may be granted because a violation of RSA 75:8 does
not support a private right of action.

With respect to the equal protection claims, the court ruled that the
plaintiffs could not maintain a claim under the State Constitution because the
abatement process provided them an adequate remedy at law. The court also
ruled that to obtain damages for a violation of the Federal Constitution, the
plaintiffs were required to bring a claim under 42 U.S.C. § 1983, and that, even
construing count II as such, it failed to allege sufficient facts to state a viable
claim. This appeal followed.

The plaintiffs first argue that the trial court erred in refusing to enter a
final judgment as to tax year 2017. The trial court noted that, procedurally,
Merrimack Premium Outlets merely reinstated the plaintiffs’ previously-
dismissed statutory claim, and the court ruled that it would be inappropriate to
enter judgment when “the Court has never held a trial in this matter or ruled

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on a motion for summary judgment” or “hear[d] any of the evidence in this
case.”

We agree with the plaintiffs that Merrimack Premium Outlets
“conclusively ruled that RSA 75:8 did not authorize the Town’s ‘corrected’ 2017
reassessment of the Property,” and that, as the “law of the case,” this legal
ruling was binding precedent to be followed on remand. See Merrimack Valley
Wood Prods. v. Near, 152 N.H. 192, 201 (2005). However, we disagree with the
plaintiffs’ assertion that our decision “left no unresolved factual issues with
respect to the 2017 tax year for the trial court’s consideration.” Any remedy for
the unauthorized reassessment would require factual findings relating to, at
least, the amount of taxes imposed before and after reassessment, but no such
factual findings were at issue in Merrimack Premium Outlets. See Merrimack
Premium Outlets, 174 N.H. at 483-84. Even if we assume that, as the
plaintiffs contend, “[t]here is no genuine dispute” as to many, or even all, of the
material facts, that contention must be tested on a properly-filed motion for
summary judgment. Accordingly, we affirm the trial court’s denial of the
plaintiffs’ motion for entry of final order as to tax year 2017.

We now turn to the plaintiffs’ argument that the trial court erred in
dismissing count I of their amended complaint. “In reviewing an order granting
a motion to dismiss, we assume the truth of the facts as alleged in the
plaintiff[s’] pleadings and construe all reasonable inferences in the light most
favorable to the plaintiff[s].” Barufaldi v. City of Dover, 175 N.H. 424, 427
(2022). “The standard of review in considering a motion to dismiss is whether
the plaintiff[s’] allegations are reasonably susceptible of a construction that
would permit recovery.” Id. “This threshold inquiry involves testing the facts
alleged in the pleadings against the applicable law.” Id. “We will uphold the
granting of the motion to dismiss if the facts pled do not constitute a basis for
legal relief.” Id.

The plaintiffs argue that the trial court erred in focusing on count I’s
“Statutory Claim” title and adopting the Town’s “private right of action”
argument to dismiss that count. (Quotation omitted.) They argue that they
were not required “to identify a statutory private right of action to obtain a
refund of illegally assessed property taxes,” but that, “[t]o the contrary, a
taxpayer that involuntarily pays an illegal tax assessment is necessarily
entitled to a refund of its payment, with interest at the statutory rate.”

The Town contends that this construction of count I is an attempt by the
plaintiffs “to convert their statutory claim into a common law claim” that was
first — and untimely — raised in their motion for reconsideration and properly
rejected on that basis by the trial court. We disagree. As the plaintiffs
correctly note, New Hampshire is a notice pleading jurisdiction. See Toy v. City
of Rochester, 172 N.H. 443, 448 (2019). A complaint with sufficient factual
allegations “need not do more than state the general character of the action

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and put both court and counsel on notice of the nature of the controversy.” Id.
(quotation omitted). Count I of the amended complaint put both the trial court
and the Town on notice of the nature of the plaintiffs’ claim; namely, that the
Town lacked statutory authority to change the 2016 assessment for the
Property and, therefore, the plaintiffs are entitled to a refund of the difference
between the taxes they paid in the applicable tax years and the taxes they
would have paid but for the illegal reassessment. The plaintiffs do not claim a
cause of action “under” RSA 75:8; rather, they pleaded the lack of authority
under that statute, as well as under RSA 75:8-b, as the basis for their claim
that the “Town’s illegal assessments of the Property for tax years 2017 through
2020 have caused the Plaintiffs to pay illegal and unauthorized taxes” for
which they are entitled to a refund. See RSA 75:8 (2012) (amended 2022), :8-b
(2012).

The Town nevertheless contends that even an illegal assessment does not
entitle a taxpayer to a refund. Rather, it argues, the taxpayer’s exclusive
remedy lies in the abatement process. We have stated generally that “New
Hampshire tax abatement statutes provide the exclusive remedy to a taxpayer
dissatisfied with an assessment.” Porter v. Town of Sanbornton, 150 N.H. 363,
367 (2003). As the Town points out, early New Hampshire cases also state that
the abatement remedy applies “not only when the assessment is made upon an
overvaluation, but also when the whole assessment is illegal.” Edes v.
Boardman, 58 N.H. 580, 584 (1879). We have, however, subsequently
disavowed that expansive view of the abatement remedy. See Bretton Woods
Co. v. Carroll, 84 N.H. 428, 430 (1930), abrogating, in relevant part, Rowe v.
Hampton, 75 N.H. 479, 480 (1910). We have recognized that “the issue in an
abatement proceeding is whether the government has taxed the plaintiff out of
proportion to other property owners in the taxing district” and distinguished
that inquiry from “questions as to the legality of the assessment.” Porter v.
Town of Sandwich, 153 N.H. 175, 177-78 (2006). Moreover, we have held that
because the inquiry into the legality of an assessment raises a question of law,
a plaintiff bringing such a challenge “is not necessarily required to follow the
statutorily prescribed abatement procedure.” Id. at 177.

Thus, in Town of Sandwich, we held that plaintiffs who raised “questions
as to the legality of the assessment, not issues of proportionality or inability to
pay,” were not required to commence an abatement proceeding to confer on the
superior court jurisdiction to adjudicate their claims. Id. at 178. Similarly, in
a case that, like this one, involved a reassessment of property based on
subsequently-acquired information, we held that the taxpayer was not required
to exhaust administrative remedies when “[t]he only substantive issue raised
. . . [was] the authority for the city’s supplemental assessment for
underassessed property under RSA 76:14.” Pheasant Lane Realty Trust v. City
of Nashua, 143 N.H. 140, 141-42 (1998).

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 Here, as in Pheasant Lane, the plaintiffs’ action does not raise issues of
proportionality or inability to pay, but, rather, challenges the legality of the
Town’s assessment of the Property. Accordingly, to the extent the trial court
based its dismissal of count I on the ground that the plaintiffs’ sole remedy lay
in the abatement process, it erred. Moreover, to the extent the Town contends
that the plaintiffs must prove disproportionality to prevail on count I, they are
mistaken. The Town simply cannot impose a tax based upon an assessment
made without statutory authority: “Because the power to tax arises solely by
statute, the right to tax must be found within the letter of the law and is not to
be extended by implication.” Id. at 143 (quotation and citations omitted); see
id. at 141-44 (affirming injunction preventing city from imposing taxes based
upon reassessment of property not authorized by statute).

As noted previously, our holding in Merrimack Premium Outlets that the
Town lacked authority under RSA 75:8 to adjust its assessment of the Property
to correct its prior undervaluation is the law of the case. See Merrimack
Premium Outlets, 174 N.H. at 489. The plaintiffs’ amended complaint pleads
the factual allegation — as yet untested — that the Town carried the increased
2017 tax year assessment forward for each subsequent tax year through 2020.
The amended complaint also alleges that “[t]he Town did not authorize an
annual appraisal at market value for any of tax years 2017, 2018, 2019, or
2020,” which, if true, would eliminate RSA 75:8-b as statutory authority for
reappraisal of the Property in tax years 2017 through 2020. See RSA 75:8-b.
In addition, as noted previously, factual allegations relevant to a remedy for
unauthorized reassessment also remain to be proven. Accordingly, we reverse
and remand for the trial court to make the necessary factual findings and
fashion an appropriate remedy. In doing so, the trial court may consider the
plaintiffs’ motion for summary judgment that it previously deemed moot or
permit the plaintiffs to file a new motion for summary judgment as stated in its
November 2022 order. Accordingly, we find it unnecessary to address the
plaintiffs’ argument that the trial court erred in failing to grant, or even
consider, their motion for summary judgment.

The plaintiffs also challenge the dismissal of their equal protection claim
— count II of their amended complaint. As we read the plaintiffs’ amended
complaint, this count pleads an alternative legal theory on which they claim
entitlement to the same relief sought in count I. Having reversed the dismissal
of count I, and clarified the scope of our remand, we find it unnecessary to
address the plaintiffs’ challenge to the dismissal of their constitutional claim.
See Chapman v. Douglas, 146 N.H. 209, 211 (2001) (“We follow an established
policy against reaching a constitutional issue in a case that can be decided on
a non-constitutional ground.”).

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 We have considered, and are not persuaded by, the Town’s remaining
arguments for affirmance.

Affirmed in part; reversed in
part; and remanded.

MACDONALD, C.J., and BASSETT, DONOVAN, and COUNTWAY, JJ.,
concurred.

Timothy A. Gudas,
Clerk

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