206 A.3d 694
R.I.2019Background
- Bluedog loaned $35,000 to Fogliare Group, secured by a first-priority mortgage on property comprising two lots: one in Providence and one in Cranston. Bluedog recorded its mortgage.
- Providence held a tax sale for the Providence parcel for tax year 2015; a collector’s deed was recorded after the July 1, 2015 sale.
- Bluedog sued in Superior Court (June 2, 2016) seeking (1) a declaration that the Providence parcel’s assessment/tax was illegal and (2) an injunction against the sale.
- Defendants moved to dismiss under Rule 12(b)(6), arguing Bluedog failed to use the statutory administrative remedies (§ 44-5-26), or, if invoking equity (§ 44-5-27), the three-month limitations period expired; also that there was nothing to enjoin because the sale had occurred.
- The Superior Court granted dismissal with prejudice; Bluedog appealed. The Supreme Court affirmed, holding the taxing statutes provide exclusive procedures and Bluedog’s suit was untimely under § 44-5-27.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bluedog could bypass § 44-5-26 administrative remedies by alleging an illegal tax and proceed in Superior Court | Illegal-tax exception allows direct Superior Court action or declaratory judgment outside the taxing statutes | Taxing statutes are exclusive; if property is at all ratable in the city, plaintiff must follow § 44-5-26 or, if invoking equity, meet § 44-5-27 timing | Held for defendants: statutes are exclusive; because part of the property was in Providence, Bluedog’s claim sounded in overassessment and must follow statutory route |
| Whether the three-month limitations period in § 44-5-27 precluded Bluedog’s equitable action alleging an illegal tax | A declaratory-judgment action alleging illegal taxes falls outside § 44-5-27 and thus is not time-barred | § 44-5-27’s three-month limit applies to equitable actions alleging illegal taxes and began after the first-installment due date | Held for defendants: even assuming an illegal tax claim, Bluedog filed after the three-month period (deadline Oct. 24, 2015); June 2, 2016 filing was untimely |
| Whether a declaratory-judgment suit can replace the statutory remedies | DJA may be used to challenge illegal taxes and avoid administrative procedures | Precedent bars using the Uniform Declaratory Judgments Act to replace statutory tax remedies | Held for defendants: declaratory relief cannot substitute for statutory remedies where property is ratable; Pascale/Minardi control |
| Whether injunctive relief was available given the tax sale had already occurred | Injunction still warranted to undo or restrain effects of an illegal tax/sale | No present or imminent harm to enjoin; sale completed; remedies were statutory or equity timely invoked | Held for defendants: injunction claim was moot/unsupportable in light of completed sale and procedural defects |
Key Cases Cited
- Narragansett Elec. Co. v. Minardi, 21 A.3d 274 (R.I. 2011) (illegal-tax exception allows direct Superior Court suit but taxing statutes otherwise provide exclusive remedies)
- Lehigh Cement Co. v. Quinn, 173 A.3d 1272 (R.I. 2017) (taxing statutes are the exclusive remedy for aggrieved taxpayers)
- Pascale v. Capaldi, 188 A.2d 378 (R.I. 1963) (Uniform Declaratory Judgments Act cannot replace statutory tax procedures)
- CIC–Newport Assocs. v. Stein, 403 A.2d 658 (R.I. 1979) (equity suit challenging assessments must comply with statutory limits and procedures)
- St. Clare Home v. Donnelly, 368 A.2d 1214 (R.I. 1977) (distinguishes tax-exempt, non-ratable property from ratable estates for purposes of statutory restrictions)