Agenda - Planning Commission - 03/03/2016

Home

January 25, 2016 1 Volume 10 1 Issue 2 Zoning Bulletin NEW HAMPSHIRE (12/04/15)—This case addressed the issue of whether a town was negligent in its assessment and expenditure of impact fees, entitling developers to a refund of all assessed impact fees. The Background/Facts: In July 2012, the Town of Londonderry (the "Town") filed a bill of interpleader in superior court—asking the court to determine whether $264,517.02 in surplus impact fees collected under the Town's impact fee ordinance should be refunded to the developers who paid the impact fees or to the current owners of the properties for which the fees had been paid. Although the Town's impact fee ordinance specified that the current owners were entitled to the refunds, the Town sought to confirm that the ordinance was consistent with New Hampshire's impact fee statute. (See RSA 674:21, V).) New Hampshire's impact fee statute, RSA 674:21, V(e), provides, in part, that an impact fee ordinance "shall establish reasonable times [not longer than six years] after which any portion of an impact fee which has not become encumbered or otherwise legally bound to be spent for the purpose for which it was collected shall be refunded, with any accrued interest." (RSA 674:21, V(e).) Several parties intervened in the Town's interpleader action, and several parties brought counterclaims. Among those bringing counterclaims was Mesiti Development, Inc., JVL Construction Company, Inc., and Brook Hollow Corporation (hereinafter, collectively, the "Developers"). The Developers sought a refund of impact fees, and among other counterclaims, also alleged that the Town breached the fiduciary duties imposed by. RSA 672:21, V, by negligently administering its impact fee ordinance. Accord- ing to the Developers, the alleged fiduciary duties arose from the statute's requirement that impact fees be held insegregated accounts and not withdrawn without an approved order from the governing body. The Developers contended that this statutory scheme rendered the Town an "escrow agent for those funds from which arises a fiduciary duty to apply those funds in accordance with the statute." They argued that "[a]s an escrow agent, the Town [was] entrusted with the personal property of fee payers in the form of impact fee and exaction payments AND a contingent property right to receive an impact [fee] refund if the voters do not act." They also argued that the Town negligently breached the standard of care imposed by RSA 674:21, V, "when it arbitrarily established impact fee amounts which failed to meet the express requirements of rational nexus, proportionality and special benefit to the fee payer." The superior court granted the Town's motion to dismiss the Developer's counterclaims. The Developers appealed that dismissal. DECISION: Affirmed, and matter remanded. The Supreme Court of New Hampshire first held that the Developers did not have standing to seek a refund of the legally assessed, but unspent or unencumbered fees. The court found that because the Developers asserted their claims as fee payors and the Town's ordinance required the refunds 10 © 2016 Thomson Reuters