Martin Hall & a. v. Ruth A. Rozelle & a.

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2014-0426, Martin Hall & a. v. Ruth A. Rozelle
& a., the court on February 12, 2015, issued the following order:

Having considered the briefs and record submitted on appeal, we conclude
that oral argument is unnecessary in this case. See Sup. Ct. R. 18(1). We affirm.

The plaintiffs, Martin Hall and Fiduciary Trust Company, as trustees of the
F.S. Browning, Jr. GST Non-Ex Trust, dated 11/4/92, amended and restated
5/6/04, appeal an order of the Superior Court (Houran, J.) in favor of the
defendants, Ruth Rozelle and several of her descendants and their spouses. The
plaintiffs acquired their interest in the real estate at issue through Franklin and
Cynthia Browning (the Brownings), who purchased it from Frederick and Ruth
Rozelle (the Rozelles). The deed from the Rozelles to the Brownings was subject
to a lease allowing the Rozelles “and their issue and spouses of their issue” to use
a shed on the property and “to access over the existing camp roads and paths, to
launch and dock small boats, swim, and park cars.” The lease is automatically
renewed “for successive periods of 6 years” unless the defendants cancel it in
writing. The plaintiffs contend that the trial court erred by finding that: (1) the
word “issue,” as used in the lease, “has the well-understood plain meaning as
lineal descendants”; and (2) the lease does not impose “a sufficient restraint as to
justify overriding the intent of the contracting parties.”

We review the trial court’s interpretation of a lease agreement de novo.
Pope v. Lee, 152 N.H. 296, 301 (2005). We will give the language used by the
parties its common meaning as understood by reasonable people and, in the
absence of ambiguity, we will determine the parties’ intent from the plain
meaning of the language used. Id. The plaintiffs state that the “lease is
ambiguous as to the identity of the lessees beyond the named parties and as to
its duration.” However, they do not develop this argument and, thus, have
waived it. See State v. Blackmer, 149 N.H. 47, 49 (2003) (stating that we confine
our review to only those issues that have been fully briefed). They focus, instead,
upon the argument that, if the lease is interpreted as benefiting the Rozelles’
lineal descendants, as opposed to the Rozelles’ issue living at the time they
executed the lease, then it is an unenforceable restraint on alienation, which
could not have been the intent of the parties to the lease.

A property owner may restrict the use of the property in any way the owner
sees fit, within the confines of the law. Pope, 152 N.H. at 303. We will enforce
the parties’ intent to create a perpetual leasehold where the intended restraint is
reasonable in view of the justifiable interests of the parties. Winecellar Farm v.
Hibbard, 162 N.H. 256, 266 (2011). Unreasonable restraints will be held invalid.
Id. Assessing the reasonableness of a challenged restraint involves balancing the
policy of respecting the intent of contracting parties with the policy of preserving
the free alienability of real property. Id. at 267. A direct relationship exists
between the justification for enforcement of a particular restraint, on the one
hand, and the quantum of restraint, the actual practical effect upon alienation
which would result from enforcement, on the other. Id. Thus, the greater the
quantum of restraint that results from enforcement of a given clause, the greater
must be the justification for that enforcement. Id.

In this case, the trial court found that the lease was part of the
consideration for the sale of the property from the Rozelles to the Brownings,
which justifies its enforcement. The Rozelles would be deprived of the benefit of
their bargain were the lease found unenforceable as written. See Motion Motors
v. Berwick, 150 N.H. 771, 778 (2004) (holding plaintiff bound by contract when it
had received the benefit of its bargain and failed to cite persuasive reason why it
should not have to endure consequences of deal it freely struck).

On the other hand, the plaintiffs have not demonstrated that the quantum
of restraint is large. The plaintiffs do not argue that the defendants’ use of the
shed and waterfront precludes, or even interferes with, their use of the property.
Cf. Winecellar, 162 N.H. at 268 (perpetual lease hindered farming). In fact, the
trial court found, and the plaintiffs do not challenge, that there have been no
complaints that the defendants over-use the property. Furthermore, the
plaintiffs do not argue that the lease affects the property’s marketability.
Compare Winecellar, 162 N.H at 268 (stating restriction placed significant
hindrance alienability of property) with Pope, 152 N.H. at 307 (stating restriction
did not foreclose sale of premises). The lease requires the defendants to pay five
percent of the property’s annual real estate taxes. Thus, the plaintiffs are
remunerated for the defendants’ use, and that remuneration increases as the
property becomes more valuable. Compare Winecellar, 162 N.H at 267 (noting
lessee paid no rent) with Pope, 152 N.H. at 308 (noting lease provided for annual
rent increases). Therefore, we conclude that the intended restraint created by the
lease, as interpreted by the trial court, is reasonable in view of the justifiable
interests of the parties. See Winecellar, 162 N.H. at 266.

The plaintiffs argue that the rental payments are not commensurate with
the burden on the property. However, the trial court found that the lease was
part of the consideration for the deed from the Rozelles to the Brownings, which
constitutes additional compensation for the lease. The plaintiffs cannot now
relieve themselves of a binding lease on the basis that, in hindsight, they believe
that the Brownings did not negotiate sufficient rent. See Pope, 152 N.H. at 207.

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 The plaintiffs argue that if “issue” means lineal descendants, then “an
unlimited and indeterminable number of people could use . . . [their] land over an
endless period of time” and that “[w]hat may be reasonable now will become
impractical in time and ultimately unworkable, and thus unenforceable . . . and
practically impossible to continue.” However, the plaintiffs cannot now relieve
themselves of the lease because they speculate that its terms may become
impractical at some undetermined time in the future. See Pope, 152 N.H. at 308
(holding landlord’s belief rent insufficient based upon current conditions did not
make perpetually renewable lease unreasonable restraint); Motion Motors, 150
N.H. at 778.

The plaintiffs argue that the Brownings and the Rozelles could not have
intended the lease to extend to the Rozelles’ lineal descendants because, if it
extends to the lineal descendants, it is unenforceable as an unreasonable
restraint and they must have intended the lease to be enforceable. However, we
conclude that the lease, as interpreted by the trial court, is not an unreasonable
restraint on alienation. Therefore, the Brownings’ and the Rozelles’ intent to
create an enforceable lease is not inconsistent with the conclusion that the plain
meaning of “issue” in the lease includes the Rozelles’ lineal descendants. See
RSA 21:20 (2012) (“The word ‘issue,’ as applied to the descent of estates, shall
include all the lawful lineal descendants of the ancestor.”); In re Richardson
Trust, 138 N.H. 1, 3 (1993) (finding common meaning of “issue” is lineal
descendants). We note that the fact that the lease is automatically renewed in
perpetuity indicates the Brownings’ and the Rozelles’ intent that it benefit more
than the Rozelles’ issue living at the time it was executed.

Affirmed.

Dalianis, C.J., and Hicks, Conboy, Lynn, and Bassett, JJ., concurred.

Eileen Fox,
Clerk

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