Bellevue Properties, Inc. v. Settlers' Tennis, Inc. & a. ( 2016 )

THE STATE OF NEW HAMPSHIRE
SUPREME COURT
In Case No. 2014-0536, Bellevue Properties, Inc. v.
Settlers’ Tennis, Inc. & a., the court on July 26, 2016, issued
the following order:
Having considered the briefs and oral arguments of the parties, the court
concludes that a formal written opinion is unnecessary in this case. The
plaintiff, Bellevue Properties, Inc. (Bellevue), appeals, and defendant New
Hampshire Department of Transportation (the State) and defendants, Settlers’
Tennis, Inc., Settlers’ R1, Inc., and 13 Green Street Properties, LLC (collectively
referred to in this order as Settlers), cross-appeal, orders of the Superior Court
(Smukler, J.) related to Bellevue’s right to access and use a swimming pool and
tennis courts located on property owned by Settlers. We affirm.
I. Background
The parties own property in “Settlers’ Green,” a mixed-use development
that includes retail space, apartments that were once condominiums, the North
Conway Grand Hotel, and the “Tennis Green Lot,” on which there is an outdoor
swimming pool and six tennis courts (four concrete and two clay). For ease of
reference we refer to the swimming pool and tennis courts as “the Tennis Green
Lot amenities.” The Tennis Green Lot, which Settlers owns, is across the street
from the “Hotel Property,” which Bellevue has owned since 1999.
The Hotel Property comprises two lots, one on which the hotel is located
and the other on which hotel parking is located. According to Bellevue, and
not apparently disputed by Settlers or the State, the hotel currently has 150
rooms and 50 privately-owned suites. There are three swimming pools on the
Hotel Property: an indoor pool and two outdoor pools (the Hotel Property
amenities).
The State owns lots that we refer to as the “Condominium Property.” In
1996, after the original developer of the Condominium Property had lost it to
foreclosure, the State took the Condominium Property by eminent domain in
order to build the North-South Road and the Conway Bypass. When the State
took the property, only 42 of a planned 168 condominiums had been built.
The State demolished 28 of the 42 condominiums and has since leased the
remaining 14 residential units as apartments. Thus, Settlers’ Green currently
has no condominium units.
For the past several years, the parties have disputed Bellevue’s right to
access and use the Tennis Green Lot amenities. In 2010, the trial court
determined that the parties had abandoned the claimed contract that
established Bellevue’s alleged right to use those amenities. As a result, the
trial court equitably distributed the recreational amenities at Settlers’ Green,
awarding Settlers the Tennis Green Lot amenities and awarding Bellevue the
Hotel Property amenities.
In 2011, we reversed that decision in an unpublished order. We held
that, to the extent that the trial court treated certain documents in the chain of
title as “simple contracts instead of as documents creating a servitude, [it]
erred.” We ruled that those documents reserved to Bellevue “a property right
in the nature of an easement, for the use of and access to the Tennis Green Lot
by the owner of the Hotel Property.” We also concluded that the deeds of
record demonstrated that this property right was conveyed to Bellevue’s
predecessors-in-interest. We remanded the case to the trial court “to consider
whether Bellevue’s easement-like property right was abandoned or otherwise
extinguished.”
On remand, in an April 2012 order, the trial court denied summary
judgment to Bellevue and granted summary judgment to Settlers on Settlers’
claim that Bellevue’s easement should be extinguished under the impossibility
of purpose doctrine. In that order, the trial court also granted Bellevue’s
motion for an evidentiary hearing on damages. Before the evidentiary hearing
occurred, the court decided that cumulative evidence could not be introduced
at the hearing, but that the court would, instead, take judicial notice of the
prior record established in the 2010 proceedings. The court also denied most
of the numerous motions in limine filed by the parties in advance of the
damages hearing.
The damages hearing was held in May 2014. In a June 2014 order, the
trial court awarded damages to Bellevue based upon the difference in value of
the Hotel Property both with the easement to use and access the Tennis Green
Lot amenities and without it. Based upon Bellevue’s “limited” evidence relevant
to that measure, the trial court awarded Bellevue $44,000 in damages to
compensate for the loss of its easement-like right.
The instant appeal and cross-appeals concern the trial court proceedings
on remand. Specifically, Bellevue appeals the trial court’s order on summary
judgment, the damage award, certain of the trial court’s evidentiary decisions
during the damages hearing, and its denial of Bellevue’s request for attorney’s
fees. The State and Settlers have both filed cross-appeals challenging the trial
court’s decision to award any damages to Bellevue.
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II. Analysis
A. Termination of Bellevue’s Easement
In its ruling on the parties’ cross-motions for summary judgment, the
trial court determined that Bellevue’s easement “must be terminated” pursuant
to the “impossibility of purpose” doctrine. See Restatement (Third) of Property
(Servitudes) § 7.10 (2000) (setting forth the impossibility of purpose doctrine);
see also Boissy v. Chevion, 162 N.H. 388, 393 (2011) (adopting the doctrine).
Under the impossibility of purpose doctrine, “[w]hen a change has taken place
since the creation of a servitude that makes it impossible as a practical matter
to accomplish the purpose for which the servitude was created,” and
modification of the servitude “is not practicable, or would not be effective, a
court may terminate the servitude.” Restatement (Third) of Property
(Servitudes), supra § 7.10(1), at 394. The impossibility of purpose doctrine is
“designed to eliminate meaningless burdens on land and is based on the notion
that parties that create an easement for a specific purpose intend the servitude
to expire upon cessation of that purpose.” Boissy, 162 N.H. at 394 (quotation
omitted).
Inquiry in an impossibility of purpose case “begins with determining the
particular purpose of the easement in question.” Id. (quotation omitted). “A
provision in the easement instrument often indicates the parties’ intent in this
regard. When an easement purpose provision is ambiguous, courts examine
the surrounding circumstances to ascertain the parties’ intent and tend to
favor the grantee with a broad interpretation.” J.W. Bruce & J.W. Ely, Jr., The
Law of Easements and Licenses in Land § 10:8, at 10-17 to 10-18 (2011).
“Next, one must decide whether the contemplated purpose still exists. If not,
the easement is considered to have expired.” Boissy, 162 N.H. at 394(quotation omitted).
Examining a 1987 declaration executed by the original developer (the
1987 Declaration), and a 1986 “AMENITY AGREEMENT” between the original
developer and the entity to which the original developer conveyed the
Condominium Property (the 1986 Amenity Agreement), the trial court
determined that “the purpose of the easement was to create an equally-shared
property right to access the amenities on the Tennis Green Lot while
simultaneously assigning equal obligations to maintain the same.” The trial
court found that underlying this purpose was the expectation that “[t]he
condominium owners . . . [would] be roughly equivalent to the hotel occupants
in number and desired use.” However, the court found, “the condominiums
never reached the expected size envisioned by the creators of the rights and
obligations tied to the recreation amenities,” because of “the economic
downturn in the 1990s and the State’s taking by eminent domain.” Thus, the
court concluded, “[w]ithout nearly the same number of condominium units and
hotel rooms, it is impossible” for the Hotel Property owner (Bellevue) and the
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now non-existent condominium owners “to take on equivalent use of the
amenities and equivalent maintenance.” Accordingly, because “[a]t this
juncture, the only party that the easement serves is Bellevue,” and because
“[t]hat was never the intention of those who set out to create the property rights
and obligations for the development’s occupants,” the trial court ruled that
Bellevue’s easement “must be terminated” under the impossibility of purpose
doctrine.
We review the trial court’s rulings on cross-motions for summary
judgment under the following standard: “[W]e consider the evidence in the
light most favorable to each party in its capacity as the nonmoving party and, if
no genuine issue of material fact exists, we determine whether the moving
party is entitled to judgment as a matter of law.” Conant v. O’Meara, 167 N.H.
644, 648 (2015) (quotation omitted). “If our review of that evidence discloses
no genuine issue of material fact and if the moving party is entitled to
judgment as a matter of law, then we will affirm the grant of summary
judgment.” Id. (quotation omitted). “We review the trial court’s application of
the law to the facts de novo.” Id. (quotation omitted).
Although we apply our traditional summary judgment standard of review
to the legal issues and to the determination of whether a genuine issue of
material fact exists, we review the trial court’s decision to grant equitable relief
— in the form of extinguishing Bellevue’s easement under the impossibility of
purpose doctrine — for an unsustainable exercise of discretion. See id. at
648-49; see also CVA v. CLCA, 934 A.2d 669, 677 (N.J. Super. Ct. App. Div.
2007) (noting that a trial court “has a reservoir of equitable power to modify or
terminate a servitude should changes occur in the future which would make it
impossible as a practical matter to accomplish the purpose for which the
easement was created”). In applying our unsustainable exercise of discretion
standard of review to the trial court’s decision to extinguish Bellevue’s
easement, we determine “whether the record establishes an objective basis
sufficient to sustain the discretionary judgment made.” State v. Lambert, 147
N.H. 295, 296 (2001). Under our unsustainable exercise of discretion
standard, “[o]ur task is not to determine whether we would have found
differently.” Benoit v. Cerasaro, 169 N.H. ___, ___ (decided April 19, 2016)
(quotation omitted). “Our only function on review is to determine whether a
reasonable person could have reached the same decision as the trial court on
the basis of the evidence before it.” Id.
1. The 2011 Supreme Court Proceedings
Bellevue argues that the trial court’s ruling that the purpose of the
easement was to grant the Hotel Property owner and the condominium owners
an “equally-shared” right of access to, and a corresponding “equal obligation[ ]”
to maintain, the Tennis Green Lot amenities is contrary to our 2011
unpublished order. According to Bellevue, in that order, we conclusively
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determined that the purpose of Bellevue’s easement was to grant Bellevue a
unilateral right to access the Tennis Green Lot to use the recreational
amenities there.
Bellevue is mistaken. The question before us in the 2011 proceeding was
whether “an easement to use the swimming pool and tennis courts” on the
Tennis Green Lot had ever been “conveyed to Bellevue or its predecessors-in-
interest.” Given that question, we had no reason to, and did not, examine
whether Bellevue had a corresponding obligation to maintain the Tennis Green
Lot amenities or to analyze the nature of the easements granted to the State, as
owner of the Condominium Property. Moreover in our 2011 order, we did not
apply the impossibility of purpose doctrine, but instead remanded to the trial
court to consider whether Bellevue’s “easement-like property right” had been
extinguished. Thus, in the 2011 proceedings, we were not asked to, and did
not, decide the purpose of Bellevue’s easement.
Bellevue also contends that, because we focused primarily upon the
1987 Declaration in our 2011 decision, that document is the only document
relevant to determining the purpose of its easement. To the contrary, as we
explained in our 2011 decision, when determining the scope of an easement
created by written conveyance, “[o]ur task is to determine the parties’ intent in
light of the surrounding circumstances at the time the easement was granted.”
Arcidi v. Town of Rye, 150 N.H. 694, 701 (2004); see Bruce & Ely, supra § 10:8,
at 10-18 (explaining that “[w]hen an easement purpose provision is ambiguous,
courts examine the surrounding circumstances to ascertain the parties’
intent”). In our 2011 decision, we examined the language of the 1987
Declaration “in light of the circumstances surrounding its execution,” which
included the 1986 Amenity Agreement.
2. Whether the Trial Court Properly Determined the Purpose of the
Easement
Bellevue asserts that the trial court incorrectly determined that the
purpose of the easement was, in Bellevue’s words, “contingent upon or
intertwined with” the condominium development. Bellevue contends that its
“property right . . . is independent of any right of . . . other property interests at
Settlers’ Green.” We review the trial court’s interpretation of the 1986 Amenity
Agreement and 1987 Declaration de novo. See Petition of Warden (State v.
Roberts), 168 N.H. 9, 18 (2015) (explaining that “[w]e interpret written
documents de novo”). We find no error in the trial court’s interpretation of
those documents. We agree with the trial court that the purpose of Bellevue’s
easement, as reflected in the 1986 Amenity Agreement and the 1987
Declaration, was to share equally with the condominium owners a right of
access to, and a corresponding obligation to maintain, the Tennis Green Lot
amenities.
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The 1986 Amenity Agreement provided that “an integral part” of the
original developer’s plan for Settlers’ Green “and in particular the hotel portion
and the condominium development[,] is an amenity package including tennis
courts, indoor and outdoor swimming pools, health club, . . . and such other
amenities as may be added.” The 1986 Amenity Agreement further provided
that the “amenity package” was to be constructed and maintained “in an
equitable manner by . . . its users, the hotel owner/operator and condominium
owners.”
The 1986 Amenity Agreement gave the Hotel Property owner and the
condominium owners the equal right to use, and the corresponding equal
obligation to maintain, all of the amenities in the amenity package, including
those which were to be located on the Tennis Green Lot. Thus, under the 1986
Amenity Agreement, “to ensure that neither the hotel owner/operator or the
condominium owners control [the amenity package] to the detriment of the
other, all rights and obligations with respect to all amenities will be borne and
shared equally between the hotel and the condominiums.” Correspondingly,
“to ensure that both the hotel guests and condominium owners have equal
rights to use all amenities,” the 1986 Amenity Agreement gave the Hotel
Property owner and the condominium owners “undivided rights to use all
amenities under a common and equally applicable standard of use.”
To maintain equal control between the Hotel Property owner and the
condominium owners, the 1986 Amenity Agreement created an “Amenity
Association” to be governed by a board of directors — one-half of the board’s
members were to be elected by the Hotel Property owner and the other half
were to be elected by the condominium owners. To maintain equal cost
sharing, the agreement provided that net operating and maintenance costs
would be assessed on a mandatory basis equally to the Hotel Property owner
and the condominium owners.
Likewise, the 1987 Declaration provided that all of the amenities were to
be shared equally by the guests of the planned hotel and the owners of the
planned condominiums. Thus, the 1987 Declaration provided that the Hotel
Property owner and the condominium owners “shall have a right and easement
of enjoyment in and to the Recreational Areas,” defined as all of the property
owned by a new Settlers’ Green Recreation Association (SGRA) “for the common
use and enjoyment” of the Hotel Property owner and the condominium owners.
Under the 1987 Declaration, the Hotel Property owner had the “right to allow
its guests to use the Recreational Areas in accordance with the same rules and
regulations applicable to” the condominium owners “at no additional cost to
the Hotel.”
Additionally, the 1987 Declaration provided that the cost of operating
and maintaining the Tennis Green Lot amenities was to be borne equally by the
Hotel Property owner and the condominium owners. Under the 1987
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Declaration, operation and maintenance of the Tennis Green Lot amenities was
the responsibility of the SGRA. The Hotel Property owner and the
condominium owners were to have an equal number of votes in the SGRA. The
SGRA’s expenses were to be borne equally by the Hotel Property owner and the
condominium owners.
The SGRA, like the Amenity Association before it, was to be governed by
a board of directors, with half of the board’s members appointed by the Hotel
Property owner and half appointed by the condominium owners.
As the trial court aptly concluded, pursuant to the 1986 Amenity
Agreement and the 1987 Declaration, the easement-like property interest
granted to Bellevue to access and use the Tennis Green Lot amenities and its
obligation to maintain those amenities “was not . . . a unilateral right.” Rather,
[t]he expected owners of the condominiums also shared this right
to use and shared the obligation to maintain the Tennis Green Lot.
The documents used to create the easement . . . make it clear that
the individuals involved in creating, visualizing, and implementing
a recreational area for the development designed it so that all
would benefit from its use while all contributed to its care.
3. Whether the Trial Court Properly Relied upon Changed
Circumstances to Extinguish Bellevue’s Easement
Bellevue next asserts that, to the extent that the trial court relied upon
Settlers’ “business decision to pursue retail development instead of residential
development” as the changed conditions sufficient to extinguish Bellevue’s
easement, the trial court erred. Cf. AKG Real Estate, LLC v. Kosterman, 717
N.W.2d 835, 846-47 (Wis. 2006) (rejecting Section 7.10(2) of the Restatement
(Third) of Property (Servitudes) and adhering to the Wisconsin common law rule
that the servient estate owner may not unilaterally relocate, modify, or
terminate an express easement). However, the trial court did not rely upon
Settlers’ supposed decision to pursue retail development. Rather, it
determined that “the economic downturn in the 1990s and the State’s taking
by eminent domain” caused the changed conditions that required extinguishing
Bellevue’s easement.
Bellevue also argues that “Settlers is foreclosed from contending that . . .
extraneous forces,” such as the State’s taking of the Condominium Property by
eminent domain in 1996, “are the legal basis for extinguishing [Bellevue’s]
property right under the doctrine of changed conditions” because it raised that
argument in its motion to reconsider our 2011 order, which we denied. By
denying Settlers’ motion to reconsider, we expressed no opinion as to the
validity of that argument. Indeed, in the 2011 proceeding, we expressly
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declined to decide whether the easement was extinguished, choosing instead to
remand that issue to the trial court to decide in the first instance.
Bellevue also contends that, because Settlers drafted the 1987
Declaration, Settlers “created the changed conditions upon which the trial
court relied to terminate Bellevue’s rights.” We conclude that this argument
does not warrant further discussion. See Vogel v. Vogel, 137 N.H. 321, 322
(1993).
4. Whether the Trial Court Erred by Not Considering Alternatives
to Extinguishing the Easement
Bellevue argues that it was improper for the trial court to extinguish
Bellevue’s easement instead of modifying it. The impossibility of purpose
doctrine “has traditionally been used to terminate servitudes, rather than to
modify them.” Restatement (Third) of Property (Servitudes), supra § 7.10
cmt. a, at 395. “[T]he less drastic step should be taken if modification would
permit the servitude to continue to serve the purpose for which it was designed
to an extent that is worthwhile.” Restatement (Third) of Property (Servitudes),
supra § 7.10 cmt. a, at 395. However, modification is proper “only if it does not
materially increase the burden on the servient estate.” Restatement (Third) of
Property (Servitudes), supra § 7.10 cmt. a, at 395.
Here, the modifications that Bellevue proposes do not allow its easement
to continue to serve the purpose for which it was designed. As discussed
earlier, the purpose of the easement was for Bellevue to share equally with the
condominium owners the right of access to, and the obligation to maintain, the
Tennis Green Lot amenities. None of the modifications proposed by Bellevue
serve that purpose. For instance, Bellevue argues that “the most efficient
solution in this matter is to modify the easement to allow Bellevue to continue
to access and use the Recreation Amenities, while eliminating any of Settlers’
and the State’s rights to use those Amenities and any financial obligations
related thereto.” However, that modification would be directly contrary to the
purpose for which Bellevue’s easement was created. Under these
circumstances, we cannot conclude that the trial court unsustainably
exercised its discretion by terminating, instead of modifying, Bellevue’s
easement under the impossibility of purpose doctrine.
Bellevue also contends that “[t]he continued benefit to Hotel guests
precludes a finding that the Hotel’s servitude on the Tennis Green Lot could no
longer serve its purpose.” Bellevue’s argument, however, rests upon its
assumption that the purpose of its easement was solely to grant it access to the
Tennis Green Lot amenities. We have already rejected that assumption and,
thus, necessarily reject Bellevue’s argument based upon it.
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B. Damages
1. Whether the Fact that Bellevue’s Easement was Reciprocal
Precluded an Award of Damages
In its cross-appeal, Settlers argues that the trial court should not have
awarded Bellevue any damages, in part, because “this case involves reciprocal
easements.” Settlers asserts that, because Bellevue’s easement was reciprocal
in nature, the trial court “should have terminated all of the parties’ obligations
to make payments to the defunct [SGRA] to operate and maintain the
amenities, while awarding Settlers exclusive right to the amenities on the
[Tennis Green] Lot and awarding Bellevue the exclusive right to the amenities
on the Hotel Lot.” In effect, Settlers argues that the trial court erred by not
ordering the very relief it had ordered in 2010.
Bellevue responds that “the only issues properly before the trial court
were whether Bellevue’s easement-like property right was abandoned or
otherwise extinguished.” (Quotation omitted.) Bellevue explains that
“[w]hether or not property rights of the other parties, Settlers and the State,
were also extinguished was not an issue before the trial court on remand.”
We agree with Bellevue on this point. Because the only issue before the
trial court was whether Bellevue’s easement had been extinguished under the
impossibility of purpose doctrine, the trial court did not address whether the
easements granted to Settlers and the State continued to be viable.
Bellevue further contends that “there are no reciprocal rights at issue in
this matter that preclude an award of damages to Bellevue” because “[b]oth
Settlers and the State have long abandoned any reciprocal rights that they had
. . . through their ‘clear, unequivocal and decisive acts.’” Bellevue argues that
“[h]aving abandoned their rights to access and use the Tennis Green Lot and
the Recreation Amenities, Settlers and the State are not entitled to argue
herein that they have reciprocal rights that either require equitable treatment
or that negate any award of damages to Bellevue for the termination of its
property rights.”
The trial court did not address Bellevue’s argument that Settlers and the
State have abandoned their reciprocal easements, and we decline to do so in
the first instance. We similarly decline to address whether, as Settlers argues,
the 1986 Amenity Agreement and 1987 Declaration have been, or must be,
terminated. Although the parties appear to assume that the trial court
terminated both the 1986 Amenity Agreement and the 1987 Declaration, we do
not share their interpretation of the trial court’s decision. To the extent that
Bellevue argues that its easement was “not contingent upon either the rights of
any other party or the original Settlers’ Green development plans,” we note that
we have already rejected that argument.
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2. The Measure of Damages
The trial court ruled that the proper measure of Bellevue’s damages from
the loss of its easement to access and use the Tennis Green Lot amenities “is
based upon the fair market value of Bellevue’s dominant estate before and after
the easement was extinguished.” The trial court’s ruling was based upon the
Restatement (Third) of Property (Servitudes), which provides, in pertinent part,
that when an easement is extinguished under the impossibility of purpose
doctrine, damages “are measured by permanent loss of the remaining value of
the servitude benefit.” Restatement (Third) of Property (Servitudes), supra
§ 8.3 cmt. h, at 505. The trial court explained that in this case, “the ‘servitude
benefit’ is the easement to enter onto and use the recreational amenities at the
Tennis Green Lot.” (Quotation omitted.) Thus, the trial court reasoned, “[t]he
fair market value of the easement is the difference in the before and after
values of Bellevue’s dominant estate.” See Restatement (First) of Property
(Servitudes) § 508 cmt. c, at 3097 (1944) (explaining that because appurtenant
easements are “usable only in connection with the use and enjoyment of a
dominant tenement” and “have value only in connection with that tenement[,]
[t]heir value . . . for the purpose of measuring awards of compensation in
eminent domain proceedings ordinarily is the reduction in market value of the
dominant tenement with its appurtenant easements caused by the
condemnation proceedings”); see also Town of Stamford v. Vuono, 143 A. 245,
249 (Conn. 1928) (ruling that “[w]hen an easement appurtenant to land is
taken, the measure of damages is the depreciation in the market value of the
dominant tenement”); cf. State v. 3M Nat’l Advertising Co., 139 N.H. 360, 362
(1995) (calculating damages in condemnation of fee simple rights in land based
upon the difference in the fair market value of the property before and after the
taking).
Bellevue does not challenge the trial court’s reliance upon Restatement
(Third) of Property (Servitudes), supra § 8.3 cmt. h, at 505. Thus, Bellevue
agrees with the Restatement (Third) of Property (Servitudes) that, because its
easement was extinguished under the impossibility of purpose doctrine, its
damages “are measured by permanent loss of the remaining value of the
servitude benefit.” Restatement (Third) of Property (Servitudes), supra § 8.3
cmt. h, at 505. Bellevue contends, however, that to measure its loss, the trial
court should have relied upon the change in value of the servient estate (the
Tennis Green Lot) instead of upon the change in value of the dominant estate
(the Hotel Property). Cf. SCI Cal. Funeral Services, Inc. v. Five Bridges
Foundation, 137 Cal. Rptr. 3d. 693, 706-08 (Ct. App. 2012) (explaining, in
dicta, that even if the defendant had preserved its argument that the only
proper measure of damages for the loss of an appurtenant easement was the
diminution in value to the dominant estate, the argument would fail because
when a “trial court must value an asset for which there is no relevant,
comparable market, it may consider any valuation methodology that is just,
equitable, and not inconsistent with California law”). But cf. Redevelopment
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Agency v. Tobriner, 264 Cal. Rptr. 481, 489, 490 (Ct. App. 1989) (ruling that
when “the property interest taken is an easement appurtenant to a dominant
estate,” then the amount of just compensation “to which the condemnee is
entitled is determined by the diminution, if any, in the value of the dominant
estate to which the easement is appurtenant, caused by the loss of the
easement” and explaining that “[o]nly the change in the value of the
condemnee’s property is relevant, not the effect of the condemnation on the
value of the property taken”).
We need not decide whether the change in value of the servient estate
was the proper measure of damages in this case, because, even if it were, we
agree with Settlers and the State that Bellevue failed to produce any evidence
of that change in value. Bellevue’s expert real estate appraiser opined only
about the fair market value of the Tennis Green Lot as of January 2013 — after
the trial court’s 2012 order extinguishing Bellevue’s easement. He offered no
opinion as to the fair market value of the Tennis Green Lot before Bellevue’s
easement had been extinguished. Indeed, Bellevue’s expert appraised the
Tennis Green Lot as if it did not include the tennis courts and swimming pool.
Although the record includes the tax assessment records for the Tennis Green
Lot as of January 2013, that assessed value does not constitute reliable
evidence of the lot’s fair market value before Bellevue’s easement was
extinguished. Given the lack of evidence, we cannot find error in the trial
court’s failure to use the change in value of the Tennis Green Lot as the
measure of Bellevue’s damages.
3. The Amount of Damages
The trial court determined that Bellevue had provided only “limited”
evidence pertinent to the difference in the value of its dominant estate before
and after its easement was extinguished. Specifically, the court found that
Bellevue proved damages only “to the extent of showing that the value of its
dominant estate was diminished by its inability to offer ‘in-house’ tennis to
prospective hotel guests.” The trial court found that Bellevue’s damages
consisted of the difference between the amenities that Bellevue could offer its
hotel guests before and after its easement was extinguished. The court found
that before the easement was extinguished, “Bellevue advertised on the hotel
website that it had ‘in-house’ tennis courts and a swimming pool.” Because,
after the easement was extinguished, Bellevue still had three swimming pools
on its own property, the court found that “tennis is the only amenity” that
Bellevue could no longer offer its hotel guests.
Based upon evidence from the first trial that only 8-10 hotel guests used
the tennis courts per month and “the fact that the amenities were shared 50%,”
the trial court ruled that it was “appropriate to value Bellevue’s property right
at a figure that is less than the full cost of constructing four concrete and two
clay tennis courts.” Thus, although the cost of constructing four concrete
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tennis courts and two clay tennis courts was approximately $105,000, the trial
court awarded Bellevue only $44,000 — $40,000 to construct two clay tennis
courts and $4,000 “in gravel and prep.”
When, as in this case, “the law furnishes no precise legal measure for the
recovery of damages, the amount to be awarded is largely discretionary.”
Miami Subs Corp. v. Murray Family Trust and Kenneth Dash Partnership, 142
N.H. 501, 517 (1997) (quotation omitted). We review the trial court’s equitable
award of damages under our unsustainable exercise of discretion standard.
Clapp v. Goffstown Sch. Dist., 159 N.H. 206, 210 (2009).
In their cross-appeals, Settlers and the State contend that Bellevue is not
entitled to any damages because Bellevue’s expert failed to testify as to the fair
market value of Bellevue’s property both with the easement to access and use
the Tennis Green Lot amenities and without it. The trial court disagreed with
that assertion because it found that the value of Bellevue’s easement “is greater
than zero.” We cannot fault the trial court for relying upon the “limited”
evidence Bellevue provided.
In challenging the damage award, Bellevue first argues that the trial
court erred when it “reduced Bellevue’s damages based upon the fact that ‘the
amenities were shared 50%.’” We find no error in the reduction. As discussed
previously, both the 1986 Amenity Agreement and 1987 Declaration made clear
that Bellevue shared the Tennis Green Lot amenities equally with the
condominium owners.
Bellevue next asserts that “[t]he trial court’s deference to the long-
abandoned rights of Settlers and the State is also unsustainable in that the
trial court failed to take into account the extent to which Settlers enriched itself
through its concerted interference with Bellevue’s easement rights.” According
to Bellevue, extinguishing Bellevue’s easement right “enriched Settlers in the
amount of $2,425,800,” and allowing Settlers to retain this benefit “would be
unconscionable.” Bellevue premises those assertions upon its claims that “the
genesis of this entire dispute was Settlers’ desire to free the Tennis Green Lot
for commercial development,” and that by pursuing commercial development,
instead of residential development, Settlers took “unilateral action to terminate
Bellevue’s rights.” The trial court, however, did not find any of those facts. Nor
was it compelled to find them as a matter of law.
Bellevue similarly contends that the trial court erred because it failed to
“first consider the circumstances that led to Bellevue’s entitlement to
damages,” which Bellevue argues include the facts that, without the easement,
Settlers will be able to use the Tennis Green Lot for commercial development,
and that Settlers “provoked this litigation to eliminate both the encumbrance
on its property and its obligations to contribute to expenses.” Because the trial
court did not consider the factors that Bellevue argues are mandatory, Bellevue
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asks that we “vacate the trial court’s damages award and award damages
which fully, fairly and adequately compensate Bellevue for the loss of its
property right.” We decline Bellevue’s invitation to vacate the trial court’s
damage award because it is premised upon Bellevue’s view of the facts, which
the trial court neither adopted nor was required by law to adopt.
Bellevue next argues that the trial court erred by failing to award
Bellevue “past contributions owed by the State and Settlers” for the
“maintenance and repair costs” associated with the Hotel Property amenities as
well as “the value of the future contribution rights” owed by Settlers and the
State. This argument is premised upon Bellevue’s assumption that, when the
trial court extinguished Bellevue’s easement, it also “extinguished the . . .
contribution rights created by the 1987 Declaration.” (Italics omitted.)
However, as previously discussed, the trial court ruled only that
Bellevue’s easement to use the Tennis Green Lot amenities was extinguished.
Thus, the trial court considered only whether Bellevue was entitled to damages
for the loss of this specific property right. Although the trial court
acknowledged that, in addition to the easement to use and access the Tennis
Green Lot amenities, Bellevue had “an affirmative covenant for contribution by
Settlers and the State for 50% of the maintenance and capital costs associated
with [those] amenities,” the trial court did not address the status of the
covenant. (Quotation, ellipsis, and brackets omitted.)
Bellevue next asserts that the trial court erred in awarding only $44,000
instead of $589,930, which Bellevue argues represents the cost for
constructing six new tennis courts, a new pool, “fencing, decking[,] and site
work.” Because the record supports the trial court’s determination that tennis
is the only advertised amenity that Bellevue can no longer offer its hotel guests
because its easement was extinguished, we uphold that determination. As
previously discussed, we also uphold the trial court’s determination that it was
proper to reduce Bellevue’s damages because the amenities were to be shared
equally. Given this record, and our deferential standard of review, we cannot
say that the trial court unsustainably exercised its discretion by awarding
Bellevue $44,000 instead of $589,930. As we previously explained, under our
unsustainable exercise of discretion standard of review, our only function “is to
determine whether a reasonable person could have reached the same decision
as the trial court on the basis of the evidence before it.” Benoit, 169 N.H.
at ___.
Bellevue next contends that the trial court erred by not awarding it
approximately $800,000, which Bellevue asserts represents the value of a new
two-acre parcel on which Bellevue proposes the new tennis courts be built.
Settlers counters that Bellevue is not entitled to the funds necessary to
purchase a new two-acre site, in part, because Bellevue does not have a fee
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simple interest in the Tennis Green Lot and, therefore, is not entitled to be
reimbursed for that interest. We agree with Settlers.
Bellevue asserts that it is entitled to all of the above-described sums not
only because they place it in the same position it would have been had the
easement not been extinguished, but also because the State was allowed “to
extinguish Bellevue’s property right without compensation.” Bellevue asserts
that, because one of the changed conditions that led to the extinguishment of
its easement was the State’s taking of the Condominium Property, Bellevue is
entitled to the sums as just compensation for that taking.
We disagree with Bellevue that, when the State took the Condominium
Property by eminent domain, the State extinguished Bellevue’s property right
without just compensation. Bellevue never owned the Condominium Property
and the taking by eminent domain of that property occurred three years before
Bellevue owned the Hotel Property. Bellevue’s assertion that the trial court’s
extinguishment of its easement under the impossibility of purpose doctrine
constituted a taking entitling it to just compensation warrants no further
discussion. See Vogel, 137 N.H. at 322.
C. Evidentiary Decisions
Bellevue challenges the trial court’s failure at the damages hearing to
exclude: (1) evidence regarding the past use of the Tennis Green Lot amenities;
(2) the testimony of Settlers’ expert and other evidence regarding the condition
of the Tennis Green Lot amenities and their depreciation in value; and (3)
evidence that Bellevue’s easement to use and access the Tennis Green Lot
amenities was reciprocal in nature. “We review the trial court’s decisions on
the admissibility of evidence under an unsustainable exercise of discretion
standard.” Kelleher v. Marvin Lumber & Cedar Co., 152 N.H. 813, 832 (2005).
1. Past Use of the Tennis Green Lot Amenities
Before the damages hearing, Bellevue sought to exclude evidence of the
extent of the past use of the Tennis Green Lot amenities by hotel guests on the
ground that such evidence was irrelevant. The trial court denied the motion on
the ground that the evidence of the past use of the Tennis Green Lot amenities
by hotel guests might be relevant to Bellevue’s claim for damages based upon
loss of business, a damages claim that Bellevue does not press on appeal.
Although Bellevue now argues that the challenged evidence was “patently
irrelevant” to its other damages claims, it does not contest the trial court’s
rationale for its ruling. Under these circumstances, we are not persuaded that
the trial court’s decision constituted an unsustainable exercise of discretion.
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2. Depreciation in Value of the Tennis Green Lot Amenities
Before the damages hearing, Bellevue also moved to exclude the
testimony of Settlers’ expert on the grounds that his opinions that the Tennis
Green Lot amenities “were unusable both in June of 2007 and in May of 2013,”
and that they were “90% depreciated” in value, were irrelevant, see N.H. R. Ev.
401, 402, and failed to meet the required threshold of reliability, see N.H. R.
Ev. 702; see also Daubert v. Merrill Dow Pharmaceuticals, Inc., 509 U.S. 579(1993); RSA 516:29-a (2007). (Quotations omitted.) Bellevue likewise moved to
exclude other evidence of the condition and current value of the Tennis Green
Lot amenities on the ground that such evidence was irrelevant. The trial court
rejected Bellevue’s arguments. On appeal, Bellevue challenges only the trial
court’s determination that the evidence about the condition and current value
of the Tennis Green Lot amenities was relevant and admissible. Bellevue no
longer argues that the expert’s opinions upon those issues failed to meet the
required threshold of reliability.
Bellevue contends that the evidence was irrelevant because: (1)
Bellevue’s easement was “a right to access and use” the Tennis Green Lot
amenities “maintained and kept in good repair”; and (2) “Settlers prevented any
maintenance from being performed since 2009.” Bellevue argues that “it is the
condition of the [Tennis Green Lot amenities] while under Bellevue’s
maintenance that controls, and not their condition in 2014 after maintenance
has been prevented for five years.” Bellevue’s arguments, however, go to the
weight to be afforded the challenged evidence, not to its admissibility. We defer
to the trial court’s judgment on such issues as resolving conflicts in the
testimony, measuring the credibility of witnesses, and determining the weight
to be given evidence. Boissy, 162 N.H. at 396. Our task on appeal is not to
reweigh the evidence. Appeal of Phillips, 165 N.H. 226, 235 (2013).
3. Evidence that Bellevue’s Easement was Reciprocal
At the hearing on the parties’ motions in limine, Bellevue’s attorney
argued “that the reciprocal nature of the rights as asserted by [Settlers] has no
relevance” because Settlers had not asserted “any right to damages for the
extinguishment of any right that they may have had in the tennis green lot.”
Bellevue’s attorney further asserted that even if Settlers had claimed such
damages, Settlers would not be entitled to them because Settlers “sought to
extinguish and then ultimately obtained a court order extinguishing the
servitude,” and because it was “going to profit from the termination of the
rights.” The trial court rejected those arguments, ruling that evidence that
Bellevue’s easement was reciprocal might “be relevant for purposes such as an
offset to any damages that Bellevue is seeking.”
Bellevue argues that the trial court erred by so ruling because “Settlers
and the State both abandoned their right to access and use the Tennis Green
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Lot . . . , through their ‘clear, unequivocal and decisive acts.’” This argument
also goes to the weight to be afforded the challenged evidence, not to its
admissibility. Because we defer to the trial court on such matters, see Boissy,
162 N.H. at 396, we uphold its determination that the evidence was relevant
and admissible.
D. Attorney’s Fees
Bellevue contends that the trial court erred by failing to award Bellevue
its reasonable attorney’s fees. The general rule in this state is that each party
to a lawsuit is responsible for payment of its own attorney’s fees. Clipper
Affiliates v. Checovich, 138 N.H. 271, 277 (1994). We have recognized
exceptions to this general rule. See id. at 278. Bellevue relies upon two of
them. It argues that it is entitled to attorney’s fees because, having established
that Settlers acted in bad faith, Bellevue was “forced to seek judicial assistance
to secure a clearly defined and established right.” Id. (quotation omitted).
Bellevue asserts that it is also entitled to attorney’s fees because it was “forced
to litigate against an opponent whose position is patently unreasonable.” Id.(quotation omitted).
We will not overturn the trial court’s decision concerning attorney’s fees
absent an unsustainable exercise of discretion. Grenier v. Barclay Square
Commercial Condo. Owners’ Assoc., 150 N.H. 111, 115 (2003). We give
“tremendous deference” to the trial court’s decision on attorney’s fees. Daigle
v. City of Portsmouth, 137 N.H. 572, 574 (1993) (quotation omitted). We
uphold the trial court’s denial of attorney’s fees to Bellevue because: (1)
Bellevue has failed to establish that Settlers acted in bad faith; and (2) we
disagree that the position of either Settlers or the State has been “patently
unreasonable.” Although Bellevue refers to the trial court’s denial of “costs,” it
does not advance a separate appellate argument regarding that denial.
Affirmed.
DALIANIS, C.J., and KISSINGER, J., superior court justice, specially
assigned under RSA 490:3, and VAUGHAN, J., retired superior court justice,
specially assigned under RSA 490:3, concurred.
Eileen Fox,
Clerk
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