Wayne Ross, Trustee of the Wayne Ross Revocable Trust & a. v. Donald W. Ross & a. , 170 N.H. 331 ( 2017 )

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THE SUPREME COURT OF NEW HAMPSHIRE
___________________________
Merrimack
No. 2016-0370
WAYNE ROSS, TRUSTEE OF THE WAYNE ROSS REVOCABLE TRUST & a.
v.
DONALD W. ROSS & a.
Argued: June 1, 2017
Opinion Issued: September 28, 2017
Ramsdell Law Firm, P.L.L.C., of Concord (Michael D. Ramsdell on the
brief and orally), for the plaintiffs.
Preti, Flaherty, Beliveau & Pachios, PLLP, of Concord (Peter G. Callaghan
on the brief and orally), for the defendants.
HICKS, J. The plaintiffs, Wayne and Ruth Ross, trustees of the Wayne
Ross Revocable Trust and the Ruth Ross Revocable Trust, respectively, appeal
an order of the Superior Court (McNamara, J.), following a bench trial, in favor
of the defendants, Donald Ross and Rossview Farm, LLC (the LLC). The
plaintiffs contest the trial court’s findings that the parties entered into a lease
for the plaintiffs’ lifetimes and that they had no right to evict the defendants
pursuant to RSA 540:2, II(d) or (e) (2007). We vacate and remand.
I. Facts
The trial court found the following facts. The plaintiffs have owned a
farm in Concord since at least 1957. Throughout the years, the farm has
produced or sold dairy products, hay, firewood, timber, Christmas trees,
strawberries, maple syrup, and blueberries.
In 1998, one of the defendants, Donald, the plaintiffs’ son, agreed to
work on the farm. Through the early 2000’s, Donald was treated as an
employee of the farm, and he began to assume increasing responsibility for the
farm’s operation. As he did so, the plaintiffs transferred assets of the farming
operation to him. In 2003, Wayne told Donald that he wanted Donald to run
the farm until Wayne’s death, whereupon Donald would inherit the farm. The
plaintiffs consulted with attorneys about estate planning and attended
seminars on transferring family farms. In 2004, defendant Rossview Farm,
LLC was registered with the State and the parties granted the LLC permission
to use the trade name “Rossview Farm.” Around 2004 or 2005, Donald took
over operations of the farming business. Wayne continued to work on the farm
occasionally, but Donald received all of the farm’s income and paid all of its
expenses.
The parties agreed in January of 2006 that Donald would pay monthly
rent. In June of that year, Wayne agreed to revise a United States Department
of Agriculture (USDA) contract to reflect that “Wayne Ross [was] leasing [the
farm’s] operation to Donald.” (Quotation omitted.) Nine days after Donald
submitted the revision, the parties executed a written lease which provides, in
total, as follows:
June 23, 2006
To whom it concerns:
We, Wayne and Ruth Ross, lease our farm land on District #5 Road
in Concord, NH, to Donald Ross of Rossview Farm LLC for $21,000
per year.
The trial court found that the written lease was prepared only to satisfy the
requirements of the USDA and that the original lease between the parties was
oral. Between 2004 and 2013, Donald ran the farm and made significant
investments in it. Donald paid the rent of $21,000 per year, although he did
not always pay on time and frequently paid in cash, until 2011, when the
parties agreed rent would no longer be required.
By 2013, the parties were at odds with one another. Two physical
altercations occurred, one in 2010 and one in 2013. After serving Donald an
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“eviction notice and notice to vacate, on or before January 11, 2014,” the
plaintiffs filed this action seeking a preliminary injunction, a permanent
injunction, and declaratory judgment to determine their rights to terminate the
lease and declare that Donald had no right to remove property from, or
permanently alter property on, the farm or to use Rossview Farm’s graphic.
After a bench trial, the trial court found that: (1) Donald’s lease of the
farm is for the plaintiffs’ lifetimes; (2) the plaintiffs do not have the right to evict
Donald for non-payment of rent; (3) the plaintiffs do not have the right to evict
Donald pursuant to RSA 540:2, II(d) or (e); (4) Donald maintains the right to
the perennial crops on the property; and (5) the LLC is the owner of the trade
name and logo of Rossview Farm. The plaintiffs moved for reconsideration,
which the trial court denied. This appeal followed. On appeal, the plaintiffs
challenge only the trial court’s findings that the lease’s duration is for the
plaintiffs’ lifetimes and that RSA 540:2, II (Supp. 2016) does not authorize
them to evict the defendants.
II. Lease
On appeal, the plaintiffs contend that the trial court erred by concluding
that the parties entered into a lease for the plaintiffs’ lifetimes. Specifically,
they argue that it was error for the trial court to rely upon parol evidence to
determine the duration of the lease because the June 23, 2006 document is an
insufficient writing under the statute of frauds. See RSA 506:1 (2010). It is
insufficient, in the plaintiffs’ view, because it lacks an essential term: the
duration. The defendants dispute that the duration is an essential term of a
memorandum satisfying the statute of frauds and, alternatively, argue that the
June 23, 2006 document identifies the duration of the lease with reasonable
certainty to satisfy the statute of frauds. The defendants further argue that to
enforce the statute of frauds would perpetrate a fraud and that the doctrine of
part performance removes the lease from the operation of the statute of frauds.
A. Availability of judicial review
The trial court found that the plaintiffs conceded that the June 23, 2006
document satisfies the statute of frauds. Conceding an issue in the trial court
waives a party’s right to contest that issue on appeal. See Milliken v.
Dartmouth-Hitchcock Clinic, 154 N.H. 662, 669-70 (2006) (concluding that
plaintiffs waived appellate argument by conceding issue in trial court). We
uphold the trial court’s factual finding unless it lacks evidentiary support or is
legally erroneous. Jesurum v. WBTSCC Ltd. P’ship, 169 N.H. 469, 476 (2016).
The trial court found that the plaintiffs conceded that the June 23, 2006
document satisfied the statute of frauds because, in their post-trial
memorandum, the plaintiffs explained their position that the June 23, 2006
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document “is a writing signed by all the parties that states the terms of the
parties’ agreement. This document satisfies the statute of frauds and governs
their relationship.” The “clear” language of the June 23, 2006 document, the
plaintiffs posited, creates a yearly lease. However, the plaintiffs also argued in
the post-trial memorandum that the defendants’ introduction of parol evidence
of the parties’ intent to create a perpetual lease violated the statute of frauds
because “the intent of the parties to create a perpetual lease must be clear from
the face of the document and there must be a document to satisfy the statute
of frauds.” Thus, the plaintiffs did not concede that the June 23, 2006
document satisfies the statute of frauds for all purposes; instead, they
contended that it “satisfies the statute of frauds” if the document is read to
create a yearly lease.1 Therefore, the trial court’s finding that the plaintiffs
conceded the issue lacks evidentiary support, and we conclude that the
plaintiffs did not waive their statute of frauds argument by concession.
We next address the defendants’ argument that the plaintiffs did not
preserve their argument that the June 23, 2006 document does not satisfy the
statute of frauds. “It is a long-standing rule that parties may not have judicial
review of matters not raised in the forum of trial.” Thorndike v. Thorndike, 154
N.H. 443, 447 (2006) (quotation omitted). “The rationale behind the rule is that
trial forums should have an opportunity to rule on issues and to correct errors
before they are presented to the appellate court.” Mortgage Specialists v.
Davey, 153 N.H. 764, 786 (2006) (quotation and brackets omitted).
Accordingly, we have held that when an issue is raised for the first time in a
motion for reconsideration and failure to raise the issue earlier did not deprive
the trial court of a full opportunity to correct its error, the issue has been
preserved for our review. Id.
In the trial court, the plaintiffs argued that the lease was only a one-year
lease. Accordingly, they contended that the June 23, 2006 document “satisfies
the statute of frauds.” When the trial court concluded in its order that the
lease was actually for the duration of the plaintiffs’ lifetimes, they properly filed
a motion for reconsideration raising the argument that they now raise on
appeal: that the lease the trial court found was for the plaintiffs’ lifetimes
violated the statute of frauds in the absence of a writing reflecting “a term of
years.” Furthermore, the trial court specifically addressed whether the June
23, 2006 document contained “the essential elements of ‘a writing’” satisfying
1 Although the plaintiffs say that the document would “satisf[y] the statute of frauds” for a one-
year lease, we note that we have never decided whether a one-year lease is within the statute of
frauds. See, e.g., McIntire v. Woodall, 140 N.H. 228, 231 (1995) (noting that if an agreement can
be, and is, fully performed by one party within one year, “the agreement of the other party is not
within the statute.” (quotation omitted)). But see RSA 506:1 (contracts for the sale of an interest
in land are within the statute of frauds); J.G.M.C.J. Corp. v. C.L.A.S.S., Inc., 155 N.H. 452, 462
(2007) (“An agreement to lease land for a term of years is a contract to convey an interest in land
within the Statute of Frauds.”). We need not decide the issue here.
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the statute of frauds in its order on the plaintiffs’ motion to reconsider. Thus,
we conclude that the plaintiffs’ argument is preserved.
The defendants also argue that the plaintiffs are judicially estopped from
arguing that the June 23, 2006 document was insufficient to satisfy the statute
of frauds because the argument is “directly contrary to [the plaintiffs’] position
below.” “The doctrine of judicial estoppel generally prevents a party from
prevailing in one phase of a case on an argument and then relying on a
contradictory argument to prevail in another phase.” Cohoon v. IDM Software,
153 N.H. 1, 4 (2005) (quotation omitted). “We have noted three factors that
typically inform the decision whether to apply the doctrine in a particular
case.” Id. (quotation omitted).
One factor to consider in deciding whether to apply the doctrine of
judicial estoppel is whether the party’s later position is clearly
inconsistent with its earlier position. Courts also regularly inquire
whether the party has succeeded in persuading a court to accept
that party’s earlier position. A third consideration is whether the
party seeking to assert an inconsistent position would derive an
unfair advantage or impose an unfair detriment on the opposing
party if not estopped.
Id. (quotation omitted). Here, the argument the plaintiffs raise on appeal —
that the June 23, 2006 document does not satisfy the statute of frauds for a
lease for the plaintiffs’ lifetimes — is not inconsistent with their original theory
— that the document “satisfies the statute of frauds” for a year-to-year lease.
Because the plaintiffs’ argument on appeal is not inconsistent with their earlier
position, neither the first nor third factors weigh in favor of judicial estoppel.
Thus, we conclude that judicial estoppel does not apply.
Finally, the plaintiffs contend that the defendants’ argument about part
performance was not raised in the trial court. We construe the plaintiffs’
contention as asserting that the defendants’ part performance argument was
not preserved. The defendants raised their argument — that the contract was
withdrawn from the statute of frauds by the doctrine of part performance — in
their objection to the plaintiffs’ motion to reconsider, dated May 17, 2016. The
trial court’s order on the motion to reconsider was issued June 3, 2016. Thus,
although the trial court did not address part performance in its order, the
defendants’ failure to raise the issue earlier did not deprive the trial court of the
opportunity to address it. Therefore, the argument is preserved. See Mortgage
Specialists, 153 N.H. at 786 (holding that issue is preserved if raised in motion
for reconsideration and failure to raise issue earlier did not deprive trial court
of opportunity to correct error).
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B. Statute of frauds
The plaintiffs contend that the June 23, 2006 document was an
insufficient writing under the statute of frauds because it lacked an essential
term of the lease: the duration. The plaintiffs conclude that, because parol
evidence is generally inadmissible to prove an essential term that is absent
from a writing, the trial court erred in relying upon parol evidence to determine
the duration of the lease.
The statute of frauds, as applicable here, provides that “[n]o action shall
be maintained upon a contract for the sale of land unless the agreement upon
which it is brought, or some memorandum thereof, is in writing and signed by
the party to be charged, or by some person authorized by him in writing.” RSA
506:1. An oral agreement to lease land for a term of years is a contract to
convey an interest in land within the statute of frauds. Byblos Corp. v. Salem
Farm Realty Trust, 141 N.H. 726, 729 (1997). Consequently, an agreement to
transfer a leasehold interest must also be in writing to be enforceable. Id. “To
satisfy the statute of frauds, the writing must express the essential terms of the
contract.” Greene v. McLeod, 156 N.H. 724, 727 (2008) (quotation omitted). To
allow parol evidence to supply the essential terms of the contract would
circumvent the purpose of the statute of frauds. Badr Export and Import, Inc.
v. Groveton, 122 N.H. 101, 103 (1982).
The trial court concluded that the June 23, 2006 document satisfies the
statute of frauds because it was signed by the parties to be charged and
contains the essential terms of “‘a writing’ sufficient to satisfy the statute of
frauds,” which the court stated were the identity of the property to be leased
and the price. In contracts for the sale of land, the essential terms that the
writing must express include: the purchase price, the identity of the parties,
and a description of the real estate in question. Greene, 156 N.H. at 727. The
plaintiffs do not contend that any of those essential terms are absent from the
June 23, 2006 document.
However, the plaintiffs argue that, for a lease for a term of years, the
writing must express a fourth essential term: the duration of the lease. The
defendants respond, correctly, that this court has never held that the duration
of a lease is an essential term that must be expressed in writing to satisfy the
statute of frauds. See Gowing v. Bell, 96 N.H. 361, 363 (1950) (noting that the
parties agree that duration is an essential element of a lease).
Although we have not held that the duration of a lease is an essential
term, numerous other jurisdictions have. In Simon v. Simon, 625 N.E.2d 564,
567 (Mass. App. Ct. 1994), the court explained:
In the case of a lease or an agreement to lease, the duration
of the leasehold interest is central to that undertaking. It is an
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essential element in a lease for a term that there be a demise for a
period definitely fixed or at least capable of definite ascertainment.
(Quotation omitted.) Thus, the court concluded that an option agreement to
lease a retail store did not satisfy the statute of frauds because it “fail[ed] to
define the time period over which the rental was to extend.” Simon, 625 N.E.
at 567-68; accord, e.g., Custis v. Valley National Bank of Phoenix, 375 P.2d
558, 561 (Ariz. 1962); English v. Standard Optical Co., 814 P.2d 613, 616
(Utah Ct. App. 1991) (citing Birdzell v. Utah Oil Refining Co., 242 P.2d 578,
580 (Utah 1952)); see also Annotation, Sufficiency of Description of Terms and
Conditions of Lease, or Lease Provision, so as to Comply with Statute of
Frauds, 12 A.L.R. 6th 123, 138 (2006) (noting that courts have held that leases
must, at a minimum, identify: parties; premises to be leased; duration of lease,
including when the term begins; and rental amount). We agree with the
reasoning of these courts and conclude that the duration of a lease is an
essential term that must be expressed in writing to satisfy the statute of
frauds.
The defendants argue that time for performance is not an essential term
under the statute of frauds. We have held that the time for performance is not
an essential term of an assignment of an option to purchase real estate,
Lapierre v. Cabral, 122 N.H. 301, 303, 305 (1982), nor of a sale of wood and
timber to be cut on a tract of land, Kidder v. Flanders, 73 N.H. 345, 346 (1905).
Unlike an assignment of an option to purchase real estate or a sale of timber
growth, however, the time for performance of a lease for a term of years is
essential because “the duration of the leasehold interest is central to that
undertaking.” Simon, 625 N.E.2d at 567. The defendants cite, and we have
found, no authority to support the proposition that the duration of a lease is
not an essential term.
The defendants further argue that, to satisfy the statute of frauds, the
duration of the lease need only be reasonably certain from the June 23, 2006
document. Because the document describes the rent as “$21,000 per year,”
the defendants contend that the writing identifies the duration of the lease as
greater than one year with reasonable certainty. We agree that reasonable
certainty as to an essential term can suffice to satisfy the statute of frauds;
however, the phrase “per year” is insufficient to invoke with reasonable
certainty a specific term of years.
If an essential term is “neither stated nor determinable,” the writing is
insufficiently definite to satisfy the statute of frauds. MacThompson Realty v.
City of Nashua, 160 N.H. 175, 179 (2010) (quotation omitted). However, the
statute of frauds may be satisfied if the absent essential term can be
determined by the contents of the writing. See id. (finding that writing satisfied
the statute of frauds where absent essential term was “readily determinable
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from the settlement agreement”). For example, a writing that does not
explicitly state the agreed-upon price may satisfy the statute of frauds if “the
contract prescribes a method,” such as a future appraisal, “which will
necessarily result in the determination of the price.” Id. (quotation omitted).
Similarly, a writing that describes the property to be conveyed without “a
statement of its boundaries, its geographical location or other designations
frequently used in formal conveyances of real estate,” is sufficiently definite to
satisfy the statute of frauds “[i]f the descriptive language used is clear and
explicit in denoting a particular lot of land.” Jesseman v. Aurelio, 106 N.H.
529, 532 (1965) (quotations omitted); see also Cunningham v. Singer, 111 N.H.
159, 160-61 (1971) (holding that “house with contents and one acre of land . . .
first house on the left belonging to Mrs. Anna Singer . . . on Lewis Hill
Bethlehem, N.H.” described property with reasonable certainty); Gilbert v.
Tremblay, 79 N.H. 431, 432-33 (1920) (finding “234 Union Ave & lot” a
sufficient description of land to be conveyed (quotation omitted)).
Here, the duration of the lease is neither stated in nor determinable from
the June 23, 2006 document. The single sentence contained in the document
provides only that: “We, Wayne and Ruth Ross, lease our farm land on District
#5 Road in Concord, NH, to Donald Ross of Rossview Farm LLC for $21,000 per
year.” The duration is not included, nor does the document provide a method
by which the duration could be determined. The descriptive language, “per
year,” is not clear and explicit in denoting a particular duration of the lease.
See Campbell v. Sheraton Corp. of America, 253 S.W.2d 106, 110 (Mo. 1952)
(holding that phrase “salary is to be $12,000 a year” did not fix duration of
employment). Thus, the June 23, 2006 document is insufficiently definite to
satisfy the statute of frauds.
Based upon the foregoing, we conclude that the trial court erred when it
found that the June 23, 2006 document satisfied the statute of frauds.
However, “[b]ecause strict enforcement of the statute can produce frustration
on the one hand, and unethical conduct on the other, the law seeks to alleviate
the harshness of the statute when some operating facts, such as fraud, part
performance or other equitable considerations, are present.” Greene, 156 N.H.
at 728 (quotation, brackets, and ellipsis omitted). “The part performance
doctrine is a judicial device intended to prevent the terms of a formal statute
from doing grave injustice.” Id. (quotation and brackets omitted). It is well
established that the part performance doctrine “effectively withdraws contracts
from the operation of the statute of frauds when application of the statute
would result in fraud or irreparable injury on the purchaser who has performed
his part of the agreement.” Id. (quotations, citation, and brackets omitted).
The defendants argue on appeal, as they did below, that the doctrine of part
performance withdraws this lease from the operation of the statute of frauds.
We decline to rule on this issue in the first instance. We, therefore, vacate and
remand for the trial court to determine whether the doctrine of part
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performance or other equitable considerations withdraw this lease from the
operation of the statute of frauds.
III. Right to terminate lease pursuant to RSA 540:2
Finally, the plaintiffs contend that the trial court erred by concluding
that neither RSA 540:2, II(d) nor (e) gave them authority to terminate the lease.
RSA 540:2, II provides that “[t]he lessor or owner of restricted property may
terminate any tenancy” with proper notice, for specified reasons including, in
subsection (d), “[b]ehavior of the tenant or members of his family which
adversely affects the health or safety of the other tenants or the landlord or his
representatives” or, in subsection (e), “[o]ther good cause.” (Emphasis added.)
“Restricted property” generally means residential property. RSA 540:1-a, II
(2007) (quotation omitted); N.A.P.P. Realty Trust v. CC Enterprises, 147 N.H.
137, 141 (2001). By contrast, “[n]onrestricted property” is defined, in relevant
part, as “all real property rented for nonresidential purposes.” RSA 540:1-a, I
(2007) (quotation omitted). The question of whether the disputed property
constitutes “[r]estricted” or “[n]onrestricted” property is a threshold issue that
the trial court did not address. RSA 540:1-a, I, II (quotations omitted); RSA
540:2, I, II (Supp. 2016). Based on the record before us, the disputed property
appears to be farmland “rented for nonresidential purposes,” RSA 540:1-a, I,
and the plaintiffs themselves identified it as “[n]onrestricted property” in the
eviction notice with which they served the defendants. (Quotation omitted.)
Thus, it is unclear from the record why RSA 540:2, II is applicable to the case
before us.
The plaintiffs contend that, although the trial court did not explicitly find
that the lease involved restricted property, we should assume that the trial
court made all of the subsidiary findings necessary to support its decision. See
In the Matter of Aube & Aube, 158 N.H. 459, 466 (2009) (“We must assume
that the trial court made subsidiary findings necessary to support its general
ruling.” (quotation omitted)). However, we will not assume that the trial court
made a particular subsidiary finding if the record does not support it. Cf. id.
(“We will uphold the trial court’s decision unless the record does not support it
. . . .”). We can find no support in the record for a finding that the disputed
property is “[r]estricted property” under RSA 540:1-a, II (quotation omitted).
Accordingly, we vacate the trial court’s order on the plaintiffs’ RSA 540:2, II
claim and direct the trial court, upon remand, to determine the threshold issue
of whether the disputed property is “[r]estricted property” or “[n]onrestricted
property” under RSA 540:1-a.
IV. Conclusion
Because we conclude that the trial court’s finding that the June 23, 2006
document satisfied the statute of frauds was error, and because we can find no
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support in the record for the trial court’s implicit finding that the disputed
property was “[r]estricted property” under RSA 540:1-a, we vacate and remand
to the trial court for determinations as to: (1) whether the lease is withdrawn
from the statute of frauds by the doctrine of part performance or other
equitable considerations and (2) whether the disputed property is “[r]estricted
property” or “[n]onrestricted property” under RSA 540:1-a. (Quotations
omitted.)
Vacated and remanded.
DALIANIS, C.J., and LYNN and BASSETT, JJ., concurred.
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