Kymalimi, LLC & a. v. Town of Salem

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2022-0202, Kymalimi, LLC & a. v. Town of
Salem, the court on July 14, 2023, issued the following order:

The court has reviewed the written arguments and the record submitted
on appeal, has considered the oral arguments of the parties, and has
determined to resolve the case by way of this order. See Sup. Ct. R. 20(2). The
intervenor, DSM MB I LLC (DSM), appeals an order of the Superior Court
(Houran, J.) directing the Planning Board (Board) for the Town of Salem (Town)
to accept the site plan review application of Kymalimi, LLC (Kymalimi) as
complete based on the permission of leaseholder Transform Lease Opco, LLC
(Transform). We reverse. Additionally, we deny the plaintiffs’ “Motion to Strike
Town of Salem’s Memorandum of Law in Lieu of Brief” as moot. See Batchelder
v. Town of Plymouth Zoning Bd. of Adjustment, 160 N.H. 253, 255 (2010) (“The
doctrine of mootness is designed to avoid deciding issues that have become
academic or dead.”).

I. Background

The following facts are supported by the record. Transform is the
current holder of a lease concerning a portion of the property located at 167
South Broadway in Salem (the Property). DSM is the fee owner of the Property.
The lease grants Transform exclusive control over a structure on the Property
that once housed a Kmart store (the Building). The lease also grants
Transform the right to use the parking areas, access routes, and other
infrastructure on the Property, but those use rights are shared by other
tenants. The lease further grants Transform the right to assign the lease,
subject to the condition that the Building “shall not be used for any unlawful
purpose.” Transform has the right to extend the lease to a total term of
seventy-five years, in which case the lease would terminate on January 31,
2046. Kymalimi has executed a long-term sublease of the Building from
Transform, with the intention of operating charitable gaming in the Building.

In March 2021, Kymalimi submitted an application for site plan review to
change the use of the Building. Pursuant to RSA 676:4, the Board has adopted
site plan review regulations that applicants must follow. See Salem, N.H., Site
Plan Review Regulations § 268-1:3 (2012). In relevant part, the regulations
require the applicant to provide a “[l]etter of permission from owner of property,
if other than developer.” Id. § 268-2:2.1.6. In addition, Section 2 of the Town’s
site plan review application form solicits information concerning the applicant
and “owner of record if other than applicant.” Section 2 indicates that
“[w]ritten permission from owner is required.” The terms “owner” and “owner of
record” are not defined in this section. Section 7 of the form, which seeks
information about abutters, states that “[n]ames should be those of current
owners as recorded in the Tax Records.” Kymalimi provided information about
Transform in Section 2 of the application, noting that Transform is a
leaseholder. Kymalimi also submitted a letter of authorization permitting
Kymalimi and its agents “to act on Transform’s behalf” in connection with the
site plan application.

During an April 13, 2021 meeting, the Board discussed whether
Kymalimi’s application was complete without a letter of authorization from the
property owner, DSM. The Board determined by vote that the application was
complete. The Board then heard a presentation from Kymalimi’s representative
about the substance of the application. After a question arose as to whether
the application was merely conceptual, a Board member made a motion to
rescind the previous vote accepting the application as complete. The motion
failed. The Board then discussed the application. After hearing comments
from a representative of DSM, the Board voted to continue its discussion of the
application to the next meeting.

On April 26, 2021, DSM sent a letter to the Board outlining a number of
concerns with Kymalimi’s proposed use of the Building. DSM’s overarching
concern was that the proposed change would “result in detrimental parking,
traffic, public safety, and other impacts to the shopping center.” During an
April 27, 2021 meeting, the Board voted to reconsider its prior “acceptance of
the plan based on lack of owner consent.” The Board then voted not to accept
the application because DSM, the property owner, had not provided written
consent. In response, Kymalimi and Transform initiated this action against the
Town under RSA 677:15. DSM joined as an intervenor.

In January 2022, the trial court held a hearing on the plaintiffs’
complaint. At the hearing, Kymalimi argued that: (1) it was “procedurally
improper for the Planning Board to . . . accept the application, undertake
substantive consideration of it, as required by the statute, and then
discontinue that process” after finding that the application was incomplete;
and (2) that “as a matter of law,” the Town’s site plan application requirement
of the permission of “owner of record” was “satisfied by Transform’s written
permission.” Transform likewise asserted that “[a]n owner is not necessarily
one owning fee simple” and that “[o]ne having a lesser estate may be the
owner.” Transform emphasized that it “is the owner of the possessory right to
the space that is the subject of the application to the Planning Board.”

The Town argued that the trial court did not have jurisdiction to address
the merits of the complaint under RSA 677:15 because the Board had not yet
voted to approve or disapprove the application. See RSA 677:15, I (2016) (a
petition “shall be presented to the court within 30 days after the date upon

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which the board voted to approve or disapprove the application” (emphasis
added)). The Town and DSM argued “that the Planning Board ultimately has
the inherent authority to reconsider its own decisions.” DSM asserted that
because it “own[s] the shared common area” on the Property that is implicated
in this application, it has “the right to review what would be presented to the
board.”

In March 2022, the trial court issued an order ruling that “the Board was
wrong as a matter of law when it determined that Kymalimi’s site plan
application was incomplete because DSM had not provided written
permission.” At the outset, the trial court determined that although “this
matter should have been presented to the Court via a petition for writ of
certiorari, the Court nevertheless concludes that it may properly consider the
merits of this dispute.” See DHB v. Town of Pembroke, 152 N.H. 314, 318
(2005) (“Though the plaintiff’s petition did not seek a writ of certiorari, courts
are not limited by the ‘technical accuracy or designation of legal forms of
action.’”). The trial court was also “unpersuaded” by “Kymalimi’s suggestion
that the Board lacked the discretion to reconsider its April 13, 2021 vote
accepting the application as complete.” The court then turned to the “central
issue” in this dispute: “whether the Board properly interpreted the terms
‘owner’ or ‘owner of record’ in the site plan regulations, as those terms are used
in connection with the requirement that an application contain ‘[w]ritten
permission’ from the ‘owner’ in order to be complete.”

The trial court explained that while these terms are not defined in
Section 2 of the form, Section 7 requires the names of all abutters who are
“current owners as recorded in the Tax Records.” The court reasoned that
“[d]efining ‘owner’ in the middle of the form and in connection with a specific
purpose suggests that the term may have a different meaning in earlier
portions of the form which pertain to different purposes.” Looking at the
purpose of the regulation, the court noted that “interpreting the term ‘owner’ in
a manner that excludes Transform would not serve the Town’s stated purpose
vis-à-vis Kymalimi’s application” because the application seeks to change only
the interior and use of the Building and the lease “gives Transform exclusive
control” over the Building. Thus, the trial court disagreed “with the Board’s
apparent legal conclusion that only the fee owner can ever provide the ‘written
permission’ necessary for a site plan application to be complete.”

Accordingly, the trial court concluded that “the Board was wrong as a
matter of law when it determined that Kymalimi’s site plan application was
incomplete because DSM had not provided written permission.” The court
directed the Board “to accept the application as complete with Transform’s
written authorization, and to complete formal consideration of the application.”
DSM filed a motion for reconsideration, which the trial court denied. This
appeal followed.

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 II. Analysis

Because the trial court below treated the plaintiffs’ complaint under RSA
677:15 as a petition for writ of certiorari, we will do the same. See DHB, 152
N.H. at 318. “The judiciary’s certiorari jurisdiction is limited and gives a court
‘no authority to provide de novo relitigation of the original issues or to
substitute its judicial discretion for the administrative judgment below.’” Ruel
v. N.H. Real Estate Appraiser Bd., 163 N.H. 34, 44 (2011). The original
proceeding in the trial court was limited to whether the agency unsustainably
exercised its discretion or acted arbitrarily, unreasonably, or capriciously. Id.
Our review of the trial court’s decision is limited to ascertaining whether it
made an error of law or reached a result unsupported by the record. Id.

When interpreting planning board regulations, which we do de novo, the
general rules of statutory construction govern our review. See Trustees of
Dartmouth Coll. v. Town of Hanover, 171 N.H. 497, 509 (2018). Thus, the
words and phrases of the regulations should be construed according to the
common and approved usage of the language. Id. Moreover, we will not guess
what the drafters of the regulations might have intended, or add words that
they did not see fit to include. See Batchelder, 160 N.H. at 256-57. We
determine the meaning of the regulations from their construction as a whole,
not by construing isolated words or phrases. See id. Where the regulations
define the term in issue, that definition will govern. See id. Where, as here, no
definition is provided in the regulations themselves, we must look to the
regulations as a whole and attempt to discern the meaning intended by the
drafters. See id.

DSM argues that “the trial court erred when it determined that a tenant
of a building within the parcel of land at issue was an ‘owner’ entitled to give
permission for planning board site plan review and redevelopment over the fee
simple owner’s objection.” (Capitalization omitted.) We agree.

There is significant interplay between the Town’s site plan regulations
and the accompanying application for site plan review. The regulations provide
a list of materials that must be submitted to the Board “at least 21 days prior
to the next Planning Board meeting.” Salem, N.H., Site Plan Review
Regulations § 268-2:2.1. Among the required materials is the application form
as well as a “[l]etter of permission from owner of property, if other than
developer.” Id. §§ 268-2:2.1.1, 268-2:2.1.6 (emphasis added). Section 2 of the
application itself requests the “[n]ame, mailing address & telephone number of
owner of record if other than applicant” and notes that “[w]ritten permission
from owner is required.” (Emphases added.) Given this context, it follows that
the latter statement regarding permission implicitly refers to the “[l]etter of
permission from owner of property” specified in the regulations. Id. § 268-
2:2.1.6. Therefore, we conclude that the phrases “owner of property” in the
regulations and “owner of record” in the application are synonymous in that

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they refer to the same entity or individual. Under these circumstances, DSM —
the fee owner of the Property — is the “owner of property.” Thus, DSM is the
particular “owner of record” to which Section 2 of the application refers for the
purposes of providing permission.

The plaintiffs contend that Transform should be considered an “owner of
record” because “its leasehold estate is a matter of record, with a Memorandum
of Lease having been recorded in the Rockingham County Registry of Deeds.”
Transform is the leaseholder of the Building and therefore could be said to
“own” a leasehold interest. Yet, DSM is still the “owner” of the Building itself.
See R. Cunningham et al., The Law of Property § 1.2, at 5 (1984) (interpreting §
10 of Restatement (First) of Property) (“a person who has property interests
conventionally grouped under a single descriptive term such as ‘mortgage,’
‘leasehold,’ or ‘easement’ may properly be said either to ‘own’ or to ‘have’ the
particular mortgage, leasehold, or easement although he is not the ‘owner’ of
the . . . subject of the mortgage, leasehold, or easement”). Thus, Transform is
not an “owner of property” for purposes of providing permission for Kymalimi’s
site development plan under the Town’s regulations.

The plaintiffs further assert that “under the lease, Transform is an owner
whose written consent to the site plan review application satisfied the
regulations.” (Capitalization omitted.) They emphasize that “tenants and
subtenants may be owners of property with a sufficient ownership interest to
pursue land use approvals independently of the fee simple titleholder or
landlord.” See Snyder v. N.H. Savings Bank, 134 N.H. 32, 37 (1991)
(interpreting the phrase “then record owner of the premises” to apply to all
persons having record interests in the property, thus entitling a lessee under a
recorded lease to notice of a mortgage foreclosure under RSA 479:25, II). The
plaintiffs also rely on Appeal of Michele, where we observed in the context of
easements that “[b]ecause the term ‘owner’ encompasses property interests
other than fee ownership, the Micheles’ citation to the repeated use of the
terms ‘owner,’ ‘property owner,’ and ‘landowner’ throughout the statutory
scheme [of RSA chapter 482-A] does not advance their argument” that only fee
owners can apply for a dock permit. Appeal of Michele, 168 N.H. 98, 103
(2015). Thus, the plaintiffs assert, “Transform falls squarely within the
common and approved usage of the term ‘owner’ as well as ‘owner of record.’”

However, just as our statutory interpretation in Snyder and Appeal of
Michele relied on the specific context and statutory language in those cases,
our review here is necessarily rooted in the plain and ordinary meaning of the
Town’s site plan review regulations, application materials, and RSA 676:4.
Absent from RSA 676:4 as well as the Town’s site plan review regulations,
application form, and site plan checklist is any mention of leaseholders or a
requirement that the applicant provide the Board with a copy of a lease if there
is one.

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 Thus, we conclude that the trial court erred in finding that Transform’s
permission satisfied the requirements of the Town’s site plan regulations.
Accordingly, we reverse the trial court’s decision.

Reversed.

MACDONALD, C.J., and HICKS and BASSETT, JJ., concurred.

Timothy A. Gudas,
Clerk

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