2015-0220, Attorney General, Director of Charitable Trusts v. Loreto Publications, Inc.

Charitable Trust s of the Attorney General’s Office. We affirm. to file reports for fiscal years 2010 to 2014. The petitioner is the Director of Hampshire Attorney General’s Office, see RSA 7:19, :28 (2013), and requiring it that it was statutorily exempt from filing annual reports with the New order of the Circuit Court (Leonard, J.) ruling that Loreto failed to establish HICKS, J. T he respondent, Loreto Publications, Inc. (Loreto), appeal s an

Supreme Court under Rule 33(2), on the brief, for the respondent. Douglas Bersaw, non - lawyer representative appearing by approval of the

charitable trusts, on the brief), for the petitioner. Joseph A. Foster, attorney general (Thomas J. Donovan, director of

No. 2015 - 0220 8th Circuit C ourt - Keene Probate Division

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh. us. Opinions are available on the Internet by 9:00 to press. Errors may be reported by E - mail at the following address: editorial errors in order that corrections may be made before the opinion goes Hampshire, One Charles Doe Drive, Concor d, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as 2

at any time during the proceeding, including on appe al, and may not waive it.” jurisdiction over this case. “A party may challenge subject matter jurisdiction Loreto reasserts its argument that the trial court lack s subject matter

re Estate of Couture, 166 N.H. 101, 105 ( p. 2 2014). it is unsupported by the evidence or plainly erroneous as a matter of law.” I n the circuit court). Thus, “we will not disturb the [circuit court’s] decree unless (conferring the jurisdiction, powers, and duties of the former probate court on such findings could not be reasonably made.” See RSA 490 - F:3 (Supp. 2015) fact of the judge of probate are final unless they are so plainly erroneous that RSA 567 - A:4 (2007) sets forth our standard of review: “The findings of

ordered Loreto to file its delinquent reports. Loreto appealed. exempt from the reporting requirements. The court rejected this argument and auxiliary” of a religious organization under RSA 7:19, I, and was therefore Loreto argued that it was a “religious organization” or an “integrated

as a 501(c)(3) tax exempt organization. the Charitable Trust Unit testified about, among other things, Loreto’s status an d the Roman Catholic Church. Also over Loreto’s objection, Terry Knowles of testified that she was unaware of an institutional relationship between Loreto Murphy Quinlan, the Chancellor of the Roman Catholic Diocese of Manchester, The court held an evidentiary hearing at which, over Loreto’s objection, Diane under [RSA 547:3, II(a)] to hear this matter.” The court denied the motion. church/religious organization, [the] court lacks subject matter jurisdiction arguing that “[s]ince [it]. . . is NOT a Charitable Trust, but rather a court requiring Loreto to file its delinquent reports. Loreto moved to dismiss, The Interim Director of Charitable Trusts sought a n order in the circuit

return or notice for three consecutive years.” “automatically revoked [by the IRS] for its failure to file a Form 990 - series or any subsequent fiscal year. In p. 2 201 p. 3 3, Loreto’s 501(c)(3) status was the Charitable Trust Unit but did not file an annual report for fiscal year 2010 Office. See RSA 7:21, II (2013); RSA 7:28, III. In 2009, Loreto registered with required it to register with and submi t annual reports to the Attorney General’s organization in New Hampshire and advised Loreto that New Hampshire law General’s Office learned that Loreto was operating as a 501(c)(3) tax exempt U.S.C. § 5 01(c)(3) (2012). In 2008, the Charitable Trust Unit of the Attorney tax exemption under section 501(c)(3) of the Internal Revenue Code. See 26 oral.” In or around 2003, the Internal Revenue Service (IRS) granted Loreto a communications media, whether electronic, audio, visual, printed, written or books, magazines, pamphlets or [tracts], and the use of any other the Roman Catholic religion through the publication, sale, or distribution of (2010 & Supp. 2015). Its stated purpose is “the promotion, and propagation of is a nonprofit corporation org anized under RSA chapter 292. See RSA ch. 292 The trial court found, or the record supports, the following facts. Loreto 3

with the IRS after 2009. Thus, its evidentiary argument, as we understand it, Loreto did not ha ve 501(c)( p. 3 3) status because it stopped filing exemption forms that, from 2010 to 2014 — the years releva nt to the petitioner’s complaint — Loreto also asserted that it is not a charitable trust. On appeal, it argues

discretion by ruling that Quinlan’s testimony was relevant and admissible. an integrated auxiliary. Thus, the trial court did not unsustainably exerc ise its Diocese of Manchester, which tended to make it less probable that Loreto was testimony concerned the absence of a relationship between Loreto and the was an “integrated auxiliary” of the Rom an Catholic Church. Quinlan’s In the trial court, Loreto sought to establish, among other things, that it

without the evidence.” N.H. R. Ev. 401. the determination of the action more probable or less probable than it would be having any tendency to make the existence of any fact that is of consequence to State v. Ramsey, 166 N.H. 45, 49 (2014). “‘Relevant evidence’ means evidence decision to admit evidence absent an unsustainable exercise of discretion.” the testimony of Quinlan and Knowles. “We will not reverse the trial court’s Next, Loreto challenges the relevance and, therefore, the a dmissibility of

jurisdiction over this case. RSA 7:21, II. Accordingly, we hold that the trial court had subject matter itself out to be” a charitable entity, and is, therefore, a charitable trust under advancement of religion . . . .”). Thus, the record shows that Loreto “holds of Trusts § 28, at 9 (200 p. 3 3) (“Charitable t rust purposes [may] include . . . the charitable purpose of promoting Roman Catholicism. See Restatement (Third) president testified, that Loreto was organized as a nonprofit corporation for the assertions, however, Loreto stated in its articles of incorporation, and its 501(c)(3) tax exempt organization since 2009. Regardless of the truth of these 2013. Loreto maintains that it registered under protest and has not been a 2009 and held 501(c)(3) tax exempt status until the IRS revoked that status in that Loreto registered as a charitable trust with the Attorney General’s Office in There was testimony at the evidentiary hearing, and the exhibits showed,

or other charitabl e purpose.” RSA 7:21, II (quotation omitted). out to be established, in whole or in part, for any benevolent, philanthropic . . . Internal Revenue Code” or “[a]ny other person or entity that is or holds itself [IRS] to be a tax exempt organization pursuant to section 501(c)( p. 3 3) of the organization,” which includes “[a]ny person or entity that is determined by the 7:21, II defines “[c]haritable trust” as, among other things, a “charitable involving charitable uses and trusts.” RSA 547:3, II (a) (Supp. 2015). RSA The circuit court has j urisdiction over, among other matters, “cases

jurisdiction.” Id. review, de novo, whether the trial court in this case ha [s] subject matter In the Matter of Ball & Ball, 168 N.H. 1 p. 3 33, 1 p. 4 40 (2015) (quotation omitted). “We 4

organization.” According to the petitioner, the drafters intended for this worship,” the petitioner argues, the statute’s drafters settled on “religious Searching for “a more inclusive term [than ‘church’] to describe houses of associations of churches.’” (Quoting 26 U. S. C. § 6033(a)(3)(A)(i) (2012)). but excluded ‘churches, their integrated auxiliaries, and conventions or 20, which “added an annual filing requirement for tax exempt organizations see Tax Reform Act of 1969, Pub. L. No. 91 - 172, § 101(d)(1), 83 Stat. p. 4 487, 519 drafters intended for the statute to mirror a federal tax law enacted in 1969, legislative history. Based up on that history, the petitioner argues that the counters that the term is ambiguous and that, therefore, we must rely upon full range or scope of a religion or church.” (Quotation omi tted.) The petitioner advance one or more of its purposes or interests but does not encompass the voluntary association that is based on or related to a religion and seeks to Loreto argues for a broader def inition of “religious organization” as “a

with Loreto . . . [and] has no direct authority [or] involvement with Loreto.” the Roman Catholic Church does not recognize an institutional relationship because, it reasoned, “[b]ased upon the testimony offered at the [h]earing, . . . failed to show that it was an “integrated auxiliary” of a religious organization had failed to show that it was either. The court also concluded that Loreto had “refers to religious houses of worship or churches,” and concluded that Loreto The trial court determined that “religious organization” in RSA 7:19, I,

organization” or “integrated auxiliar [y].” See i d. 7:19, I (emphasis added). The statute does not define either “religious integrated auxil iaries or. . . conventions or associations of churches.” RSA organization which holds property for charitable or religious purposes or their 7:19, I, exempts from the statutes governing charitable trusts “any religious New Hampshire to file annual reports with the Attorney General’s Office. RSA RSA 7:19, I. RSA 7:28, III requires all charitable trusts that are registered in organization” or an “integrated auxiliar[y]” of a religious organization under Attorney General’s reporting requirements because it is a “religious Loreto’s principal argument is that it i s statutorily exempt from the

admitting Knowles’ testimony about Loreto’s p. 5 501(c)(3) status. Court.”). Thus, the trial court did not unsustainably exercise its discretion by by these rules or by other rules prescribed by the New Hampshire Supreme as limited by constitutional requirements or as otherwise provided by statute or inadmissible. See N.H. R. Ev. p. 4 402 (“All relevant evidence is admissible, except testimony may have conflicted with other evidence does not render it Knowles’ testimony about Loreto’s 501(c)(3) de signation wa s relevant. That this 501(c)(3) tax exempt organizations are charitable trusts under RSA 7:21, II, to Loreto, show that it held 501(c)(3) status only until 2009. However, because irrelevant because it conflicted with the petitioner’s exhibits, which, according is that Knowles’ testimony about Loreto’s 501(c)(3) status after 2009 is 5

religious organizations,” including “churches, conventions and associations of Federal tax law regarded “se veral categories of institutions .. . as

H. Bradley). statutes into line with the [f]ederal tax law.” Id. at 2 (testimony of Rep. David Similarly, a legislator testified that “[t]he intent of the bill[] [was] to bring state on HB 8 p. 5 52 Before the House Judiciary Committee at 1 (May 27, 1971). bring the law into conformity with . . . the new federal tax law.” Public Hearing general relative to the recording of activities of charitable trusts [and] . . . would that, if enacted, the statut e “would broaden the jurisdiction of the attorney former Director of the Division of Charitable Trusts, Wells Anderson, stated public hearing before the New Hampshire House J udiciary Committee, the associations of churches.” Tax Reform Act of 1969 § 101(d)(1). Moreover, in a requirement “churches, their integrated auxiliaries, and conventions or filing requirement for 501(c)(3) organizations, but excluded from that identical to the pertinent part of the federal law, which established an annual “religious organization” for “church,” the statut e’s language was nearly the enactment of the Tax Reform Act of 1 969. Other than substituting 7:19 to conform to federal tax law. The statute was amended a few years after Our review of th at histo ry confirms that the legislature intended for RSA

statute’s legislative history to determine the term’s meaning. Naswa Motor Inn, 144 N.H. at 90, it is ambiguous. We therefore look to the organization” is “subject to more than one reasonable interpretation,” Appeal of Nor does Black’s Law Dictionary. Because we conclu de that “religious appears incapable of formulation.”). The statute does not offer a definition. (9th ed. 2007) (“[A] formal and consistent definition of the term church. . . term. Cf. B. Hopkins, The L aw of Tax - Exempt Organizations § 10.3, at 320 We acknowledge that “religious organization” is an inherently ambiguous

interpretation.” Appeal of Naswa Motor Inn, 144 N.H. 89, 90 (1999). ambiguous if its “language is subject to more than one reasonable history.” Forster v. Town of Henniker, 167 N.H. 74 p. 5 5, 750 (2 015). A statute is find statutory language to be ambiguous, we will not examine legislative to include.” Appeal of Local Gov’t Ctr., 165 N.H. 790, 804 (2014). “Unless we legislature might have said or add lan guage that the legislature did not see fit legislative intent from the statute as written and will not consider what the ascribe the plain and ordinary meanings to the words used.” Id. “We interpret 161 N.H. 659, 662 (2011). “We first examine the language of the statute and expressed in the words of the statute considered as a whole.” Appeal of Wilson, interpretation, “[w]e are the final arbiter of the intent of the legislature as Petition of Malisos, 166 N.H. 726, 729 (2014). In matters of statutory Statutory interpretation is a question of law, “which we review de no vo.”

law], which include[d] synagogues, mosques and other places of worship.” broader term to “match the IRS’s interpretation of church under [federal tax p. 6 6

organization” under RSA 7:19. Loreto to file. Thus, Loreto has failed to show that it is a “religious indicates that the IRS did not accept Loreto’s new designation and stil l required to file its forms during the three consecutive years after it re - designated itself the automatic revocation by the IRS of Loreto’s tax exempt status for its failure IRS denied or contested Loreto’s change in designation.” Ho wever, we note that such. On appeal, Loreto argues that “[n]o evidence was introduced that the testified to not having received notification that the IRS recognized Loreto as changed its designation to “church” in its 2009 exemption form, its president congregation, and provides no religious instruction. And although Loreto president testified that Loreto conducts no religious services, has no dealing predominantly, but not exclusively, in Catholic works. Loreto’s support the conclusion that Loreto is a publishing house and a bookseller Loreto’s articles of incorporation and testimony at the evidentiary hearing organization or integrated auxiliary of a religious organization under RSA 7:19. We now turn to Loreto’s argument that it is an exempt religious

Code”). exempt organization pursuant to section 501(c)(3) of the Internal Revenue things, “[a]ny person or entity that is determined by the [IRS] to be a tax “[c]haritable trust.” See RSA 7:21, II (defining charitable trust as, among other bolstered by RSA 7:21, II, which defers in part to the IRS in its definition of Federal Tax Code. See 2 p. 6 6 U.S.C. § 6033(a)(3)(A)(i). Our interpretation is RSA 7:19 to be consistent with the term “church” as the IRS interprets it in the Based on this legislative history, we construe “religious organization” in

(June 18, 1971) (emphasis added). Paul’s . . . .” Hearing on HB 852 Before the Senate Judiciary Committee at 1 actions like halfway houses; educational organizations like Dartmouth, St. into social action and hold funds not for religious purposes but for social requirement: governmental subdivisions; religious organizations — churches get the term “church”: “There are specified exemptions to the reporting Anderson specifically linked the term “religious organization” in RSA 7:19 to In a hearing before the New Hampshire Senate Judiciary Committee,

se rvices,” and others. Id. established places of worship, regular congregations, regular religious ecclesiastical government, a formal code of doctrine and discipline, . . . legal existence, a recognized creed and form of worship, a definite and distinct at 31 p. 6 6. The criteria, which the IRS made public in 1 9 p. 7 77, included “a distinct whether or not an organization qualifie[d] as a church.” Hopkins, supra § 10.3, enacted RSA 7:19, the IRS “formulated the criteria that it use[d] to ascertain 315; see 26 U.S.C. § 6033(a)(3)(A)(i). In 1970, the year before the legislature churches, [and] integrated auxiliaries of churches.” Hopkins, supra § 10.2, at 7

clerical error that did not affect the trial court’s ultimate disposition. Application of Cy Pres Doctrine; Granted.” The statement appears to be a issued by the trial court’s Clerk of Court erroneously states “Petition for We also need not address Loreto’s argument that the notice of decision

requirements. organization that was statutorily exempt from the Attorney General’s reporting The trial court merely concluded that Loreto was not the type of charitable with the “rights of Catholics to associate in furtherance of their religious goa ls.” to Loreto’s assertions as we understand them, the trial court did not interfere First and Fourteenth Amendments to the United States Constitution. Contrary W e need not address Loreto’s arguments about alleged violations of the

we find no error in the trial court’s shifting the burden of proof to Loreto. our subject matter jurisdiction analysis that the petitioner met its burden here, organization to show that it is exem pt under RSA p. 7 7:19. Having concluded in RSA 7:21, an organization is a charitable trust, the burden shifts to the exemption. Thus, once the petitioner meets its burden of showing that, under we interpr et the statute to place the burden of proof on the party seeking an Consistent with this general rule, and a bsent contrary indication in RSA 7:19, requirements carries the burden of establishing its entitlement thereto.”). (11th Cir. 2011) (“Generally, the party claiming an exemption to a statute’s see also Gentry v. Harborage Cottages - Stuart, LLLP, 654 F.3d 1 247, 1258 - 59 exemption.” Goodrow v. Lane Bryant, Inc., 732 N.E.2d 289, 294 (Mass. 2000); provisions of a statute has the burden to show that it is entitled to the the burden of proof, “[g] enerally, the party claiming an exemption from the 294 (1st Cir. 2005). Although RSA 7:19 does not explicitly mention who bears Estate of Abraham v. C.I.R., 408 F.3d 26, 35 (1st Cir.), a mended by 429 F.3d “We review the allocation of the burden of proof, a question of law, de novo.” organization is on the petitioner, and the petitioner d oes not meet that burden. Loreto asserts that the burden of proving that it is not an exempt

O ffice. is not statutorily exempt from filing annual reports with the Attorney General’s “religious organization.” We therefore uphold the trial court’s ruling that Loreto alleges, that it is an in tegrated auxiliary of the Roman Catholic Church, a Loreto is not listed in that directory. Thus, Loreto has also failed to show, as it Church as listed in the official Catholic directory.” Quinlan then stated that “education al, charitable, and religious organizations of the Roman Catholic a group exemption letter from the IRS recognizing the tax exempt status of all Quinlan explained that, every year, the Conference of Catholic Bishops receives institutional relationship between Loreto and the Diocese of Manchester. religious organization, Quinlan testified that, to her knowledge, there was no Concerning Loreto’s argument that it is an “integrated auxiliary” of a p. 8 8

DALIANIS, C.J.