Peter Potenza & a. v. Joshua Lanctot & a.; Joshua Lanctot & a. v. Peter Potenza & a.

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2019-0732, Peter Potenza & a. v. Joshua
Lanctot & a.; Joshua Lanctot & a. v. Peter Potenza & a., the
court on October 23, 2020, issued the following order:

Having considered the opening and reply briefs filed by Joshua and
Cindy Lanctot (the landlords), the opposing brief filed by Peter and Kelley
Potenza (the tenants), and the record submitted on appeal, we conclude that
oral argument is unnecessary in this case. See Sup. Ct. R. 18(1). The
landlords appeal orders of the Circuit Court (Gardner, J.) following a merits
hearing on the tenants’ petition alleging that the landlords willfully violated the
tenants’ rights to quiet enjoyment, see RSA 540-A:2 (2007), :4 (Supp. 2019),
and on the landlords’ small claim action alleging that the tenants breached the
lease when they failed to pay rent and abandoned the property. We affirm.

The following facts are either derived from the trial court’s orders or
relate the contents of documents included in the appellate record. On
November 13, 2018, the tenants moved into the subject premises pursuant to a
lease agreement with the landlords. The lease agreement was for a 12-month
term and required the tenants to pay $1,995 in monthly rent.

On November 16, three days after they moved into the home, the tenants
discovered what they believed to be mold in two of the upstairs bedroom
closets. On November 17, the tenants informed the landlords about the mold
growth and the lack of heat on the second floor. The landlords responded on
November 19 that Absolute Resource Associates (ARA) would inspect the home
on November 28. ARA did so on November 30, and issued a report on
December 10 stating that there was visible mold on the closet door in one of
the bedrooms and on the attic roof sheathing. Included in the report was an
analysis of samples from the residence, which showed heavy amounts of the
fungus Cladosporium. ARA recommended that the mold be professionally
remediated. The landlords did not remediate the mold until February 12,
2019. Inspection reports submitted at trial supported the tenants’ contention
that the second floor of the home lacked heat.

The plaintiffs filed their petition on February 5 and moved out of the
premises on February 8. Thereafter, the landlords filed a small claim action
against the tenants alleging that the tenants abandoned the property in
violation of the lease agreement, seeking damages for unpaid rent for the
months of January, February, and March 2019, among other things. The
landlords represented that they would retain the tenants’ security deposit to
“cover[] 1 of the 3 months of unpaid rent.” The tenants subsequently filed a
counterclaim, alleging that the landlords violated statutory requirements
pertaining to security deposits. Each of the parties sought attorney’s fees.

The trial court held a merits hearing on offers of proof on March 11.
With regard to the tenants’ petition, the trial court found that the landlords
willfully violated the tenants’ rights to quiet enjoyment “by not assuring that
there was sufficient heat on the second floor and by failing to remediate the
mold problem in a more prompt manner.” The court found that the landlords
were aware of the mold and heat issues “as early as November 17, 2018,” but
did not do any work to “address the tenants’ concerns” until after the tenants
filed their February 5 petition. The trial court, therefore, assessed the
landlords $1,000 in statutory damages and reasonable attorney’s fees. See
RSA 540-A:4, IX; see also Carter v. LaChance, 146 N.H. 11, 14 (2001) (holding
that a plaintiff prevailing on a claim brought under RSA chapter 540-A is
entitled to the statutory minimum of $1,000 in damages “plus costs and
reasonable attorney’s fees”). As to the landlords’ small claim complaint, the
trial court found that the tenants failed to pay rent for January, February, and
March 2019, and that the landlords, accordingly, were entitled to judgment in
the amount of $2,992.50 representing three months’ worth of one-half of the
$1,995 monthly rent—$997.50.1

In response to the parties’ motions for reconsideration, the trial court
reconsidered the damages awarded to the landlords on their small claim
complaint. Because the tenants vacated the premises on February 8, 2019,
and the landlords sold the property on March 15, the court reduced the
damages awarded to $1,463 “to account for the time until the property was
sold and the restitution which [the] court . . . limited for that time frame as the
landlords had made initial good faith efforts to address the issues raised by the
tenants.”

The tenants subsequently moved for clarification, asking the court to
require the landlords to return $532 from the tenants’ $1,995 security deposit.
The tenants contended that, under the parties’ lease, the landlords are
required to return the unused balance of the security deposit to the tenants.
The tenants explained that $532 is the amount left after subtracting from the
security deposit the $1,463 they owed the landlords on the small claim action.
The court agreed and granted the tenants’ motion.

1 The landlords contend that $2,992.50 does not represent three months’ worth of one-half of

the $1,995 monthly rent. Rather, they argue, $2,992.50 represents two and one-half months’
rent ($4,987.50) less the $1,995 security deposit that the landlords assert the trial court
allowed them to retain and apply toward the unpaid rent. We do not share the landlords’
interpretation of the trial court’s orders. Had the trial court intended to award the landlords
two and one-half months’ rent ($4,987.50), it would have entered a damage award in that
amount. It did not do so.

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 In reviewing a trial court’s decision rendered after a trial on the merits,
we uphold its factual findings and rulings unless they lack evidentiary support
or are legally erroneous. O’Malley v. Little, 170 N.H. 272, 275 (2017). We do
not decide whether we would have ruled differently than the trial court, but
rather, whether a reasonable person could have reached the same decision as
the trial court based upon the same evidence. Id. Thus, we defer to the trial
court’s judgment on such issues as resolving conflicts in the evidence and
determining the weight to be given evidence. Id. Nevertheless, we review the
trial court’s application of the law to the facts de novo. Id.

On appeal, the landlords first contend that the tenants were not
constructively evicted. Given that the trial court did not frame its conclusions
in those terms, we decline the landlords’ invitation to do so on appeal.

The landlords next assert that the trial court erred by finding that they
violated the tenants’ quiet enjoyment by failing to remediate the mold problem
promptly and/or by failing to adequately heat the second floor of the premises.
The tenants counter that the landlords have waived this argument because it
was not included in the landlords’ notice of appeal. We conclude that the
notice of appeal questions fairly comprise the issue of whether the trial court
erred when it determined that they violated the tenants’ rights to quiet
enjoyment. See Sup. Ct. R. 16(3)(b).

A breach of the covenant of quiet enjoyment occurs when the landlord
substantially interferes with the tenant’s beneficial use or enjoyment of the
premises. DiMinico v. Centennial Estates Corp., 173 N.H. ___, ___ (decided
March 11, 2020) (slip op. at 5). To be actionable, the landlord’s interference
need not rise to the level of a constructive eviction, however. Id. at ___ (slip op.
at 5). A tenant’s right to quiet enjoyment is protected both by the common law
and by statute. Id. at ___ (slip op. at 8); see Crowley v. Frazier, 147 N.H. 387,
389 (2001) (“The right to or covenant of quiet enjoyment is a common law
doctrine . . . .”); RSA 540-A:2 (“No landlord shall willfully violate a tenant’s right
to quiet enjoyment . . . .”); see also Adams v. Woodlands of Nashua, 151 N.H.
640, 642 (2005) (explaining that “we rely upon the common law doctrine” in
construing the statutory protection for quiet enjoyment contained in RSA 540-
A:2). Whether the covenant of quiet enjoyment has been breached in a
particular case is a question of fact for the trial court. DiMinico, 173 N.H. at
___ (slip op. at 5). We will not disturb the trial court’s ruling on this factual
issue unless it lacks evidentiary support or is erroneous as a matter of law. Id.
at ___ (slip op. at 5).

The landlords contend that the trial court erred in finding that they
violated the tenants’ rights to quiet enjoyment by failing to remediate the mold
problem more promptly because, they assert, they “promptly engaged [a] mold
remediation service,” which “promptly investigated the site of the claimed
mold,” and “found the mold was not too extensive and could be remediated.”

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As to the heating issue, the landlords assert that the January 31, 2019 home
inspection report “is not an adequate basis to find [they] deprived [the]
[t]enants of heat to the second floor,” and that the municipal code enforcement
office report “refutes [the] [t]enants’ claim that [the] [l]andlords deprived [the]
[t]enants of heat to the second floor.” (Bolding and emphasis omitted.)

To the extent that the landlords intend to challenge the sufficiency of the
evidence to support the trial court’s findings, we conclude that the evidence
was sufficient. At the merits hearing, the tenants proffered that they notified
the landlords about the mold issue on November 17, 2018. There is sufficient
evidence to support the conclusion that the landlords did not schedule
remediation for the mold until after the tenants moved out of the premises in
February. Remediation began on February 11, 2019, and was completed on
February 12. The record is sufficient to support the trial court’s finding that
the landlords failed to remediate the mold problem promptly.

With regard to the heating issue, the landlords proffered that because the
house is heated with forced air, to maintain heat throughout the house
“requires the ventilation system to be adjusted” and that the landlords offered
to “come out and check the vent[s], and that offer was declined” by the tenants.
The tenants countered that they notified the landlords about the heat issue
around the time that they moved into the house and that the landlords did not
adjust the vents in the home until after the tenants moved out. The tenants
contended that the landlords never offered to “come over and fix the vents.”

The tenants produced a report of a January 31, 2019 home inspection,
which stated that there was “very little heat coming out” of the heating sources
in the home even though the thermostat was set at 70 degrees. The report
included photos showing temperatures downstairs ranging from 43 to 52
degrees and temperatures upstairs ranging from 42 to 46 degrees. An April 1,
2019 report from the municipal code enforcement office stated that during an
earlier inspection, “it was noticed that the heat was turned down to
approximately 53 degrees” and that “[t]he dampers were all completely opened
in an un-balanced [manner].” In addition, the “basement door was frozen
open” and there was no heat installed in the second floor bathroom. There is
sufficient evidence to support the trial court’s finding that the landlords failed
to ensure that the second floor of the home had adequate heat.

Although the evidence before the trial court was conflicting, those
conflicts were for the trial court to resolve in the first instance. See O’Malley,
170 N.H. at 275. To the extent that the landlords’ arguments challenge the
weight the trial court gave to the evidence before it, we defer to the trial court
on such issues. See id.

The landlords next assert that there was no evidence to support the trial
court’s determination that the mold and heating issues substantially interfered

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with the tenants’ beneficial use or enjoyment of the premises. See DiMinico,
173 N.H. at ___ (slip op. at 5). To support this assertion, the landlords rely
upon cases where there was no violation of the right to quiet enjoyment
because there was no finding that the tenants had lost any use of the premises.
See Crowley, 147 N.H. at 389; see also Adams, 151 N.H. at 642. The landlords
acknowledge that, in the instant case, “the trial court did find that Tenants
claimed to have lost the use of part of the premises,” but contend that “this
finding was not supported by the evidence in the record.” (Emphasis added.)
To the contrary, the finding is supported by the tenants’ offer of proof, which
included their assertion that, as a result of the mold upstairs, and having been
told by ARA that their daughters “should be nowhere near” it, they moved their
family downstairs, as well as their assertion that the upstairs was not
inhabitable because of both the mold and heating issues.

The landlords next argue that the tenants are not entitled to an award of
attorney’s fees because the trial court failed to find that they willfully violated
the tenants’ rights to quiet enjoyment. See DiMinico, 173 N.H. at ___ (slip op.
at 9); see also RSA 540-A:2. However, unlike the trial court in DiMinico, the
trial court in this case specifically found that the landlords violated RSA 540-
A:2, which prohibits the willful violation of a tenant’s right to quiet enjoyment,
and, thus, made the requisite finding of willfulness.

The landlords next contend that the trial court erred by rejecting their
affirmative defense of abandonment. RSA 540-A:4, XII provides that
relinquishment or abandonment of possession is an affirmative defense to a
tenant’s claim under RSA 540-A:2. By statute, “[a]bandonment of possession
means all tenants have physically vacated the premises without the intent to
return.” RSA 540-A:4, XII(b). There is a rebuttable presumption that the
tenants have abandoned the premises if: (1) the landlord provided the tenants
with a written property abandonment notice; and (2) at least two of four
statutorily-enumerated conditions are present. Id. The four statutorily-
enumerated conditions are: (1) all adult tenants have notified the landlord in
writing of their intent to vacate the premises by a certain date and that date
has passed; (2) all keys have been returned to the landlord; (3) the tenant has
removed all or a majority of the tenant’s personal property from the premises;
and (4) the tenants have not paid rent for a period of more than 91 days. Id.

Here, it is undisputed that the tenants did not vacate the premises until
February 8, after having filed their petition alleging that the landlords breached
their rights to quiet enjoyment, and long after notifying the landlords of the
mold and heating issues. Under these circumstances, we conclude that the
trial court did not err when it rejected the landlords’ affirmative defense of
abandonment.

The landlords next argue that the trial court erred by not awarding
attorney’s fees to them based upon the tenants’ breach of the parties’ lease.

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The lease provided that, in the event that the tenants failed to pay rent, the
tenants were to pay the landlords “any and all costs and expenses, paid or
incurred by [the landlords] in obtaining payment by [the tenants] of such
delinquent sum(s), including reasonable attorneys’ fees, all as permitted by
law.” The tenants counter that the landlords failed to preserve this argument.
They contend that the landlords’ small claim action did not seek attorney’s fees
and that the landlords never argued in the trial court that the lease entitled
them to such fees.

The record on appeal shows that, although the trial court understood
that the parties sought to recover attorney’s fees in the small claim action, and
although the landlords filed a motion for reconsideration, they never alerted the
trial court that its failure to award them attorney’s fees constituted error. The
trial court must have had the opportunity to consider any issues asserted by
the landlords on appeal; thus, to satisfy this preservation requirement, any
issues which could not have been presented to the trial court before it issued
its order on the merits must have been presented to it in a motion for
reconsideration. See LaMontagne Builders v. Bowman Brook Purchase Group,
150 N.H. 270, 274 (2003); N.H. Dep’t of Corrections v. Butland, 147 N.H. 676,
679 (2002). Under these circumstances, we agree with the tenants that the
landlords’ arguments related to their entitlement to attorney’s fees pursuant to
the lease are not preserved for our review. See Bean v. Red Oak Prop. Mgmt.,
151 N.H. 248, 250 (2004).

The landlords next assert that the trial court erred by ordering them to
return the balance of the security deposit to the tenants. The landlords argue
that the tenants forfeited their right to the security deposit when they failed to
pay rent in January 2019. This, too, is an argument that the landlords have
not demonstrated that they preserved, and that, accordingly, we decline to
address substantively. See id. Any issues that the landlords raised in their
notice of appeal, but failed to brief, are deemed waived. See In re Estate of
King, 149 N.H. 226, 230 (2003).

Affirmed.

Hantz Marconi and Donovan, JJ., concurred; Houran, J., retired superior
court justice, specially assigned under RSA 490:3, concurred.

Timothy A. Gudas,
Clerk

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