Snyder v. New Hampshire Savings Bank , 134 N.H. 32 ( 1991 )

JOHNSON, J.

The appellant, Bio-Energy Corporation (Bio-Energy), appeals the Superior Court’s (M. Flynn, J.) denial of its motion to intervene as a plaintiff in this case, an equity action to set aside a foreclosure sale for lack of proper notice. At issue is the application to lessees of RSA 479:25, II (Supp. 1990), which requires notice to certain persons of an impending foreclosure under a power of sale mortgage. We reverse the trial court’s ruling that Bio-Energy, a lessee, is not entitled to notice under RSA 479:25, II (Supp. 1990), and remand.

Bio-Energy entered into a ten-year lease with Hoague-Sprague Corporation in January 1985, for possession of property owned by Hoague-Sprague in Hopkinton, and subsequently recorded the lease. At the time of the agreement, the leased premises were subject to four mortgages which were granted, in order of priority, to (1) New Hampshire Savings Bank (NHSB); (2) United States Small Business Administration; (3) Gordon M. Snyder; and (4) Walter E. Heller & Company of New England, Inc. NHSB’s mortgage contained a power of sale. In December 1987, after Hoague-Sprague defaulted on the mortgage loan, NHSB conducted a foreclosure sale of the property at which Papertech Corporation, which now holds title, was the highest bidder. At the time the parties’ briefs were filed in this court, Bio-Energy still occupied the leased premises.

In March 1988, Snyder, one of the four original mortgagees, filed a bill in equity to invalidate the foreclosure sale. Snyder alleged that the sale was held in violation of RSA 479:25, II (Supp. 1990), because he did not receive written notice of the sale. He argued that, as a lienholder, the statute entitled him to such notice. The statute reads, in pertinent part:

“[NJotice shall be served upon the mortgagor or sent by registered or certified mail to his last known address or to such person as may be agreed upon in the mortgage at least 25 days before the sale. The term ‘mortgagor’ shall include the mortgagor or the then record owner of the premises. Like notice shall be sent to any person having a lien on'the premises of record

In February .1989, Papertech served Bio-Energy with a notice to quit the leased premises. Bio-Energy responded by filing a motion to intervene in Snyder’s action to invalidate the foreclosure sale. Bio-Energy argued that it did not receive notice to which it was entitled under RSA 479:25, II (Supp. 1990); and that the foreclosure sale should therefore be set aside. Because this argument is similar to Snyder’s, Bio-Energy maintained that it should be allowed to intervene' in the interest of judicial econo,my. The superior court disagreed, ruling that Bio-Energy “was neither' a ‘lien holder’ nor an ‘owner’ for the purposes of RSA 479:25.”

On appeal, Bio-Energy argues that, as a lessee, it qualifies as either a lienholder or an owner for purposes of RSA 479:25, II (Supp. 1990). Alternatively, Bio-Energy argues that, to the extent RSA 479:25, II (Supp. 1990) does not entitle it to written notice of a foreclosure sale under a power of sale mortgage, the statute violates the due process clause of the fourteenth amendment to the United States Constitution. The defendants Papertech and NHSB reply that RSA 479:25, II- (Supp. 1990) cannot be read to require notice to a lessee and that such a reading does not result in any constitutional deprivation.

Before examining the merits of these arguments, we must consider Bio-Energy’s procedural posture. The company has appealed the superior' court’s denial of its motion to intervene, and therefore our only question is whether the motion was properly denied. We have stated that “the right to intervene has been usually determined as a matter of discretion by the Trial Court.” Scamman v. Sundheim, 97 N.H. 280, 281, 86 A.2d 329, 330 (1952). Thus, we may not overturn the trial-court’s decision unless we are persuaded that the court abused its discretion.

To determine this issue, we look to the standard a trial court should use in deciding whether to grant a motion to intervene: “[A] person who seeks to intervene in a case must have a right involved in the trial and his interest must be ‘direct and apparent; such as would suffer if not indeed be sacrificed were the court to deny the privilege.’” R. Wiebusch, 4 New Hampshire Practice, Civil Practice and Procedure § 176, at 129-30 (1984) (emphasis added) (citations omitted). Bio-Energy undoubtedly has an interest in seeing the foreclosure sale invalidated. The foreclosure sale resulted in Bio-Energy’s obtaining a new landlord and has placed its leasehold in jeopardy. The controversy thus is whether Bio-Energy has an actionable right involved in Snyder’s equity action. To resolve this question and determine whether the trial court properly denied Bio-Energy’s motion to intervene, we will determine whether Bio-Energy has a right to notice under RSA 479:25, II (Supp. 1990).

First, we examine Bio-Energy’s claim that it is an “owner,” for purposes of RSA 479:25, II (Supp. 1990). The statute provides that mortgagors are entitled to personal notice, and defines “mortgagors” to include “the mortgagor or the then record owner of the premises.” RSA 479:25, II (Supp. 1990) (emphasis added). “To resolve the statutory argument [ ], principles of statutory interpretation require us to look first to the statutory language itself . . . .” Petition of Jane Doe, 132 N.H. 270, 276, 564 A.2d 433, 438 (1989). But where the statutory language is ambiguous, we turn to the statute’s legislative history for interpretive guidance. See Petition of Public Serv. Co. of N.H., 130 N.H. 265, 282, 539 A.2d 263, 273 (1988), appeal dismissed, 488 U.S. 1035 (1989).

The phrase “then record owner of the premises” is potentially ambiguous because of the variety of interests a person may own in a particular property. One person may own a life estate in the property, while another owns a remainderman interest. At the same time, one may own a mortgage interest in the property, another a leasehold interest, and another an easement interest. See Restatement (First) of Property § 10, at 25 (1936) (“owner” means person who has one or more interests). It is unclear from the language of the statute whether one, some, or all of these possible meanings should be ascribed to the phrase “then record owner of the premises.” Thus, we look to the statute’s legislative history for guidance.

In 1923, mortgagors were given the right to personal notice of a foreclosure sale under a power of sale mortgage. Laws 1923, 115:1. Until that time, no class of persons was entitled to personal notice. See -Laws 1899, 19:3;,Laws 1905, 2:1; Laws 1923,115:1. In 1977, the legislature -amended the statute to require that personal notice be given to “a grantee of' the mortgagor or the then-owner of the mortgaged premises, and any person claiming a lien or other encumbrance upon the premises/’ as well as to the mortgagor. Laws 1977, 401:1. When this version of RSA 479:25, II (Supp. 1990) was amended in 1979, the language “a grantee of the mortgagor” and “or other encumbrance’)'^was-stricken. Laws 1979, 224:1. Since then, that portion of the statute has not been changed.

Our task is to determine from the ábove history what the legislature intended when it deleted certain words and phrases from the statute in 1979. Ordinarily, “any material change in the language of the original act [the 1977 law] is presumed to indicate a change in legal rights.” 1A Sutherland Stat. Const. § 22.30, at 265 (4th ed. C. Sands rev. 1985); see also Cowan v. Tyrolean Ski Area, Inc., 127 N.H. 397, 403, 506 A.2d 690, 694 (1985). But. where the language of the original act is ambiguous; that presumption may be rebutted, and the enactment of the amending statute may be viewed as an attempt to resolve that ambiguity. See 1A SUTHERLAND STAT. Const. § 22;30, at 266; see also Grunnebaum v. C.I.R., 420 F.2d 332, 336 (2d Cir. 1970) (proposal to amend regulation can be motivated by desire to clarify or restate existing law); State v. Taylor, 47 Wash. App. 118, 123, 734 P.2d 505, 508 (1987).

We conclude that the presumption of change articulated above should not be applied to this case, because the language of the original act, “a grantee of the mortgagor or the then-owner of the mortgaged premises,” is ambiguous. A grantee-is the owner of whatever he or she was granted; thus, it is confusing to require that notice be given to both a “grantee” and an “owner.” We find -it likely that the words “a grantee of the mortgagor” were stricken in order to avoid this confusion and to delete unnecessary language. This judgment is supported by the comments of a legislator advocating the amendment. Senator Poulsen, noting the deletion of the words “grantee of the mortgagor,” stated that the bill which was ultimately'passed “cleans up the law.” N.H.S. JOUR. 1000-01 (1979). Thus, the deletion -..of those words does nothing to alter the class of persons entitled to notice of a foreclosure sale held under a power of sale mortgage.

Applying this interpretation of RSA 479:25, II (Supp. 1990) to the facts of this case, we find that Bio-Energy qualifies for coverage under this statute’s notice provision. Hoague-Sprague, the mortgagor in this case, conveyed a leasehold interest to Bio-Energy. Because a lease is a type of conveyance, see Ballentine’s Law Dictionary 716 (3d ed. 1969), Bio-Energy is a grantee of the mortgagor. As we stated above, the words “then record owner of the premises” encompass the words “grantee of the mortgagor.” Hence, because Bio-Energy is a grantee of the mortgagor, it is also an owner of the premises.

The legislative history detailed above leads us to interpret the word “owner” to mean all persons who have an interest in the property. See Restatement (First) of Property § 10, at 25 (1936). As the Minnesota Supreme Court stated,

“An owner is not necessarily one owning the fee-simple, or one having in the property the highest estate it will admit of. One having a lesser estate may be an owner, and, indeed, there may be different estates in the same property, vested in different persons, and each be an owner thereof.”

Judd v. Landin, 211 Minn. 465, 472-73, 1 N.W.2d 861, 865 (1942); see also Chief Freight Lines Co. v. Industrial Commission, 366 S.W.2d 48, 54 (Mo. Ct. App. 1963) (lessee is an owner). As “the final arbiter of the intent of the legislature as expressed in the words of the statute,” Appeal of Manchester Bd. of School Comm., 129 N.H. 151, 152, 523 A.2d 114, 115 (1987), until the legislature makes a clear statement to the contrary, we will interpret the phrase “then record owner of the premises” to apply to all persons having record interests in the property.

Our interpretation of RSA 479:25, II (Supp. 1990) comports with the obvious intention the legislature had in enacting the statute; that is, to provide all interested parties with personal notice of a foreclosure sale conducted under a power of sale mortgage. The class of parties entitled to notice appears to be limited only by the requirement that the interest of the party be a recorded one. As a long-term owner of a leasehold, which had recorded its interest and made substantial improvements to the leased property, Bio-Energy easily falls within this class of parties.

Defendant Papertech argues that “extending” the coverage of RSA 479:25, II (Supp. 1990) to lessees would cause undue administrative burden. Most lessees, Papertech maintains, would flock to recording offices to take advantage of this “new right.” This argument is unfounded. During oral argument, Papertech admitted that it is already the practice of mortgagees to give personal notice, in accordance with the strictures of RSA 479:25, II (Supp. 1990), to all parties whose interests in the mortgaged premises are recorded. Thus it is unlikely that this ruling would cause an increase in the recording of leases. Moreover, assuming such an increase would result, it is for the legislature, consistent with any constitutional requirements, to decide whether this result is against public policy. See Hertz Corp. v. State, 518 N.Y.S.2d 704, 710 (N.Y. Sup. Ct. 1987).

Bio-Energy is entitled to notice under RSA 479:25, II (Supp. 1990), and therefore its motion to intervene was improperly denied. Because of our interpretation of RSA 479:25, II (Supp. 1990), we need not rule on Bio-Energy’s other arguments.

Reversed and remanded.

Thayer, J., dissented; the others concurred.