Richard Holt & a. v. Gary Keer & a. Gary Keer & a. v. Richard Holt & a. , 167 N.H. 232 ( 2015 )

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THE SUPREME COURT OF NEW HAMPSHIRE
___________________________
Rockingham
No. 2013-491
RICHARD HOLT & a.
v.
GARY KEER & a.
GARY KEER & a.
v.
RICHARD HOLT & a.
Argued: May 15, 2014
Opinion Issued: January 13, 2015
Ducharme Law, P.L.L.C., of Portsmouth (Robert E. Ducharme on the
brief and orally), for the petitioners.
Shaines & McEachern, PA, of Portsmouth (Paul McEachern on the brief
and orally), for the respondents.
BASSETT, J. The petitioners, Gary and Katherine Keer, appeal an order
of the Superior Court (McHugh, J.) denying their motion for enforcement of the
trial court’s previous orders and for a finding of contempt. The petitioners, the
owners of one of the four units in a condominium, filed the motion which
alleged that the respondents, Richard Holt together with the owners of other
units in the condominium, had unlawfully converted common area within the
condominium to limited common area. We vacate and remand.
The following facts are taken from the record or are undisputed. This
case involves a four-unit condominium located on Boston Avenue in Hampton,
known as the Boston Four Condominium. The condominium was created in
1989 pursuant to a “Condominium Site Plan” and “Declaration of
Condominium Ownership,” both of which were recorded in the Rockingham
County Registry of Deeds. The site plan depicts the four units and describes
them as units “7, 7R, 9 & 9R Boston Avenue.” Each unit is a free-standing
residential building. The four units are arranged in a rectangle; units 7 and 9
are adjacent to one another bordering Boston Avenue, and units 7R and 9R are
rear units located behind units 7 and 9 respectively. The condominium
bylaws, recorded at the same time as the declaration, created the Boston Four
Condominium Association to oversee the operations of the condominium
property.
In addition to the residential buildings, the condominium also includes
certain property around the four units that the declaration designates as either
“common area” or “limited common area.” Common area is property in which
each unit owner has “an equal one-fourth (25%) undivided interest.” The
declaration provides that common area “[s]hall refer to all portions of the
condominium other than the units.” This includes a large portion of the
outside property, walkways between units, as well as all utility lines serving the
condominium. In contrast, limited common area consists of “the portion of the
Common Area reserved for the exclusive use of . . . one or more, but less than
all, of the units.” Limited common area includes “doorsteps, porches,
balconies, patios, and any other apparatus designed to serve a single unit, but
located outside of the boundaries thereof . . . .” In addition, as to units 7, 7R,
and 9R, each has its own parking space which is designated as limited
common area. Each parking space is 9 feet by 18 feet, with boundaries
delineated on the site plan.
The Keers purchased unit 7 in 1996. At that time, Richard and Jeannine
Holt, then husband and wife, owned unit 7R. In 1997, after Richard and
Jeannie Holt were divorced, Richard Holt became the sole owner of unit 7R.
Since 2006, Richard Holt and his current wife, Rosanna Holt, have jointly
owned unit 7R. In 1998, Richard Holt, together with Patricia Duquette,
purchased unit 9R.
In the mid-2000s, the unit owners had several disagreements relating to
the operation of the condominium. The issues included allocation of costs
relating to the units’ connection to new sewer lines, the propriety of additions
Richard Holt had made to units 7R and 9R, and use of the common area. A
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further disagreement arose because Richard Holt and his tenants had been
parking two vehicles, one behind the other, in unit 9R’s designated parking
space, which caused one of the vehicles to encroach onto the common area.
Pursuant to a clause in the declaration requiring the arbitration of
disputes between and/or among unit owners, the parties submitted their
dispute to a neutral arbitrator. The Keers and the owner of unit 9, Frederick
Guthrie, alleged that Richard Holt and Duquette had committed at least eleven
violations of the condominium documents. Richard Holt and Duquette
asserted two cross-claims against the Keers and Guthrie. Although the
arbitrator denied most of the relief requested by the Keers and Guthrie, he also
issued an order prohibiting Richard Holt or his tenants from parking two
vehicles in the parking space reserved for unit 9R. On the cross-claims
relating to sewer connection costs, the arbitrator ordered the Keers and
Guthrie to pay their share of the cost to connect their units to the sewer
system.
In September 2008, Richard Holt filed a petition in superior court
seeking an order confirming the arbitrator’s decision. The Keers and Guthrie
filed a separate action in superior court appealing the arbitrator’s decision. In
February 2009, the trial court consolidated the two actions, ruled that a
hearing was unnecessary, and granted Richard Holt’s petition to confirm the
arbitrator’s decision. The trial court also denied the Keers’ and Guthrie’s
appeal, finding that it was, in essence, a disagreement with the arbitrator’s
factual findings, which was not a proper basis for appealing the decision.
Following a hearing regarding the enforcement of the arbitrator’s
decision, the trial court issued a final order in which it observed that “[t]he
operation of the Boston Four Condominiums is in complete disarray,” and that,
given that the Keers and Guthrie disagreed with Richard Holt, who then had an
ownership interest in two of the four units, “on any issue the vote is two to
two.” The court again confirmed the arbitrator’s award and “required [all
parties] to comply with its terms.” The court stated that a failure to comply
with the arbitrator’s decision “may lead to contempt findings by the Court.”
In June 2010, Guthrie sold unit 9 to Kathleen Barnicoat. In December
2010, responding to a motion brought by the Keers, the trial court ordered
Richard Holt to formally mark the area around unit 9R’s parking space, so that
its boundaries would be clear. In April 2011, after the Keers filed a motion for
contempt arguing that Richard Holt had marked unit 9R’s parking space in
excess of twenty feet, the court ordered Richard Holt to delineate the area of
the parking space in accordance with the site plan so that it did not exceed
eighteen feet.
In 2012, Richard Holt and Duquette sold unit 9R to John and Elaine
Banacos. On August 28, 2012, the condominium association recorded an
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amendment to the declaration and bylaws (2012 amendment). This
amendment changed the designation of certain condominium property from
common area to limited common area, to the benefit of units 7R and 9R, and to
the detriment of the remaining units. The 2012 amendment inserted the
following sentence into the section describing the property designated as
limited common area:
The limited common areas contain the separate patio area behind
and to the north of Unit 9R as “LCA Unit 9R”, the separate patio
behind and [to] the north of Unit 7R as “LCA Unit 7R”, and; the
walkway existing from the steps between units 9R and 7R
extending from the steps to the north boundary as “LCA Units 9R
and 7R.”
In response to the amendment, the Keers filed a “Motion to Bring
Forward to Enforce the Court Order/Contempt” with the trial court. In the
motion, the Keers alleged numerous violations of the arbitrator’s 2009 decision.
The Keers also alleged that the 2012 amendment to the declaration infringed
upon their equal undivided interest in the common area. Following a hearing,
the trial court declined to rule on the issue stating that, with regard to the
change in common area to limited common area, the hearing provided “very
little information as to the specific areas in question” and, therefore, the court
could not issue an order “with respect to what may be common area as
opposed to limited common area without further evidence . . . .”
In April 2013, the condominium association recorded another
amendment to the condominium instruments. This amendment inserted
language into the declaration providing that written consent of three-fourths of
the unit owners is sufficient to waive certain restrictive covenants. The
amendment also inserted language into the bylaws that specifically allows
condominium association meetings to take place if three-fourths of the unit
owners attend.
In May 2013, the Keers filed a “Motion for Contempt/Enforce the Court
Orders” with the trial court. Among other things, the Keers alleged that the
2012 amendment violated the terms of the Condominium Act, RSA ch. 356-B
(2009) (Act). The Keers also alleged that both amendments to the declaration
were not legally effective because they had not been signed by a majority of the
owners. On May 31, 2013, the trial court denied the Keers’ motion.
On June 13, 2013, the condominium association recorded a document
entitled “Ratification and Adoption of Prior Amendments to Declaration and
Bylaws of the Boston Four Condominium” signed by all the unit owners except
the Keers. That same day, the Keers filed a motion to reconsider the denial of
their motion for contempt with the trial court. The Keers again asserted that
the 2012 amendment violated the Condominium Act. On June 27, 2013, the
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trial court denied the motion to reconsider, stating that “the Keer[s] continue to
file motions challenging the court’s past decisions regarding the Condominium
rules” and that it would not entertain any further motions on the issue. The
Keers have appealed the trial court’s orders of May 31, 2013, and June 27,
2013.
On appeal, the Keers argue that, because the arbitrator’s 2009 decision
requires unanimity of all unit owners in order to convert common area to
limited common area, the remaining owners cannot amend the declaration to
require less than unanimity. The Keers also argue that the 2012 amendment
converting limited common area from common area violated the requirements
of the Condominium Act and is therefore void. The respondents counter that
the Keers failed to adequately preserve these issues for appeal. They also argue
that the assignment of common area to limited common area was done in
accordance with both the condominium instruments and the Condominium
Act. We will first address the respondents’ preservation argument.
Supreme Court Rule 16(3)(b) states, in part, that a petitioner’s brief
“shall make specific reference to the volume and page of the transcript where
the issue [on appeal] was raised and where an objection was made, or to the
pleading which raised the issue.” Sup. Ct. R. 16(3)(b). It further provides that
“[f]ailure to comply with this requirement shall be cause for the court to
disregard or strike the brief in whole or in part.” Id. This requirement reflects
the general policy that “trial forums should have an opportunity to rule on
issues and to correct errors before they are presented to the appellate court.”
Camire v. Gunstock Area Comm’n, 166 N.H. 374, 377 (2014) (quotation
omitted).
The respondents argue that the Keers’ brief fails to cite the specific
pleading in which the issues on appeal were raised before the trial court and,
therefore, that the Keers’ brief should be stricken. In response, the Keers filed
a reply brief with a supplemental appendix that included the motion for
contempt that the Keers had filed with the trial court. The respondents did not
object to the supplemental filing.
More importantly, the record establishes that the issues raised on appeal
were, in fact, before the trial court. Here, issues concerning the propriety of
the amendments to the condominium instruments were raised in the Keers’
motion for contempt and again in their motion for reconsideration, and our
acceptance order stated that these two orders were the only decisions at issue
on appeal. Thus, we construe the respondents’ argument not as asserting that
the issues were not raised in the trial court, but rather, that the Keers initially
failed to cite references to these issues having been raised in the trial court. To
strike the Keers’ brief under these circumstances would elevate form over
substance. See State v. Burke, 153 N.H. 361, 362-63 (2006) (“Courts are least
likely to dismiss an appeal . . . when briefing errors do not hamper the ability
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to dispose of the appeal or otherwise interfere with their review.” (quotation
omitted)). We decline to do so. Accordingly, we conclude that the issues are
preserved for our review.
Turning to the merits, we are mindful that this case comes to us on
appeal from the trial court’s denial of the Keers’ motion for contempt. “The
contempt power is discretionary and the proper inquiry is not whether we
would have found the respondent[s] in contempt, but whether the trial court
unsustainably exercised its discretion in refusing to do so.” In the Matter of
Giacomini & Giacomini, 150 N.H. 498, 500 (2004). “To show an unsustainable
exercise of discretion, [the Keers] must demonstrate that the trial court’s ruling
was clearly untenable or unreasonable to the prejudice of [their] case.” Lillie-
Putz Trust v. Downeast Energy Corp., 160 N.H. 716, 723-24 (2010).
We read the trial court’s orders, which denied the Keers’ request for
relief, as rejecting their argument that the 2012 amendment violated the
Condominium Act. Resolution of this issue requires that we interpret the
terms of the Condominium Act. “Statutory interpretation is a question of law
that we review de novo.” EnergyNorth Natural Gas v. City of Concord, 164 N.H.
14, 16 (2012). “We are the final arbiter of the intent of the legislature as
expressed in the words of a statute considered as a whole.” Id. “In interpreting
a statute, we first look to the language of the statute itself, and, if possible,
construe that language according to its plain and ordinary meaning.” Id.
“Furthermore, we interpret statutes in the context of the overall statutory
scheme and not in isolation.” Id. “This enables us to better discern the
legislature’s intent and to interpret statutory language in light of the policy or
purpose sought to be advanced by the statutory scheme.” Appeal of Local Gov’t
Ctr., 165 N.H. 790, 804 (2014). Additionally, “[w]e construe all parts of a
statute together to effectuate its overall purpose and avoid an absurd or unjust
result.” Id.
The Condominium Act, RSA chapter 356-B, applies “to all condominiums
and to all condominium projects” in New Hampshire. RSA 356-B:2, I. In order
to create a condominium, certain “condominium instruments” must be
recorded with the registry of deeds in the county where the condominium is
located. RSA 356-B:7, :11. Condominium instruments include a declaration,
which must describe or delineate all common area and limited common area, if
any. RSA 356-B:16, I(e)-(f). RSA 356-B:3, II defines “common area” as “all
portions of the condominium other than the units.” RSA 356-B:17 states, in
relevant part, that a declaration may allocate each unit an equal undivided
interest in the common area or a proportionate undivided interest based upon
the size or value of the unit. RSA 356-B:17, I-II. In contrast, “limited common
area” is defined in the Act as a “portion of the common area reserved for the
exclusive use of those entitled to the use of one or more, but less than all, of
the units.” RSA 356-B:3, XX. Notably, these statutory definitions of common
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area and limited common area appear verbatim in the definition section of the
Boston Four Condominium declaration.
RSA 356-B:19, I, sets forth the limited circumstances in which limited
common areas may be assigned:
All assignments and reassignments of limited common areas
shall be reflected by the condominium instruments. No limited
common area shall be assigned or reassigned except in accordance
with this chapter. No amendment to any condominium instrument
shall alter any rights or obligations with respect to any limited
common area without the consent of all unit owners adversely
affected thereby as evidenced by their execution of such
amendment, except to the extent that the condominium
instruments expressly provided otherwise prior to the first
assignment of that limited common area.
(Emphasis added.) Consequently, any assignment or reassignment of limited
common area must both be expressly provided for in the condominium
instruments, and comply with the terms of the Act. Id. In order to comply with
RSA 356-B:19, I, an amendment to a condominium declaration cannot “alter
any rights or obligations with respect to any limited common area” unless the
unanimous consent of “all unit owners adversely affected” is obtained. Id.
In addition, the Act describes the limited circumstances under which an
amendment to the declaration can convert common area to limited common
area:
A common area not previously assigned as a limited common
area shall be so assigned only pursuant to RSA 356-B:16, I(f),
except that limited common areas may be created or expanded
pursuant to an amendment to the condominium instruments
consented to by 2/3 of the votes in the unit owners association, or
such higher percentage as the condominium instruments may
provide, and then thereafter assigned as therein provided. . . . The
creation or expansion of limited common areas pursuant to this
paragraph shall not alter the amount of undivided interest in the
common areas allocated to any unit.
RSA 356-B:19, III.
As the first clause of RSA 356-B:19, III specifies, an area designated as
common area that has not previously been assigned to any individual unit as
limited common area may be assigned as limited common area “only” pursuant
to RSA 356-B:16, I(f). RSA 356-B:16, I(f) states that a condominium
declaration must contain “a description or delineation of all common areas . . .
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which may subsequently be assigned as limited common areas, together with a
statement that they may be so assigned” and “a description of the method
whereby any such assignments shall be made in accordance with RSA
356-B:19 . . . .” In this case, the Boston Four Condominium declaration does
not specifically delineate any common area that may later be assigned as
limited common area, nor does it contain any method by which common area
could be assigned as limited common area.
The respondents argue that the 2012 amendment was lawfully made
pursuant to the second clause of RSA 356-B:19, III, which states that limited
common area “may be created or expanded” by an amendment to the
condominium instruments “by 2/3 of the votes in the unit owners association,
or such higher percentage as the condominium instruments may provide.” The
respondents contend that, because an amendment of the Boston Four
Condominium declaration requires consent of only three of the four unit
owners, the second clause of RSA 356-B:19, III empowers three unit owners to
amend the declaration to designate existing common area to be limited
common area. We disagree.
“[W]e do not construe statutes in isolation; instead, we attempt to do so
in harmony with the overall statutory scheme.” Soraghan v. Mt. Cranmore Ski
Resort, Inc., 152 N.H. 399, 405 (2005). “When interpreting two statutes that
deal with a similar subject matter, we construe them so that they do not
contradict each other, and so that they will lead to reasonable results and
effectuate the legislative purpose of the statutes.” Id. Based upon the statute’s
plain language, the purpose of RSA 356-B:19 is to provide protection for
condominium unit owners, relating to their interest in common areas and
limited common areas. Interpreting the two-thirds exception found in RSA
356-B:19, III to create a blanket exception for the assignment of limited
common area would conflict with, and, essentially nullify, the other protections
contained in RSA 356-B:19. See Weare Land Use Ass’n v. Town of Weare, 153
N.H. 510, 511-12 (2006) (“The legislature will not be presumed to pass an act
leading to an absurd result and nullifying, to an appreciable extent, the
purpose of the statute.”).
For example, interpreting the second clause of RSA 356-B:19, III as the
respondents suggest creates a conflict with RSA 356-B:19, I. Converting
common area to limited common area alters the rights and obligations of
owners with respect to limited common area because new limited common area
is created. See RSA 356-B:19, I. Contrary to the respondents’ assertion, the
broad statutory language that an amendment may not “alter any rights or
obligations with respect to any limited common area” encompasses any
alteration in rights, and is not limited to circumstances in which rights to
limited common area are eliminated. Thus, any amendment to the
condominium documents that changes a unit owner’s rights to limited common
area requires the unanimous consent of all “adversely affected” owners.
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Because the Keers’ right to use certain portions of the common area was
extinguished by the assignment of those areas as limited common area, the
2012 amendment adversely affected the Keers, yet they did not consent to or
execute the amendment as contemplated by RSA 356-B:19, I.
Additionally, we note that the respondents’ interpretation of the second
clause of RSA 356-B:19, III conflicts with the first clause of that same section.
If a two-thirds majority were sufficient to reassign common area as limited
common area, there would be no need for the declaration to identify, as
required by the first clause of RSA 356-B:19, III, the specific common areas
that could later be assigned as limited common area under RSA 356-B:16, I(f).
Thus, the respondents’ interpretation would, for all practical purposes, render
the first clause of RSA 356-B:19, III meaningless. See Winnacunnet Coop. Sch.
Dist. v. Town of Seabrook, 148 N.H. 519, 525-26 (2002) (“When construing a
statute, we must give effect to all words in a statute and presume that the
legislature did not enact superfluous or redundant words.”).
Rather, we interpret RSA 356-B:19, III in harmony with RSA 356-B:19, I,
which provides broad procedural protections for those owners adversely
affected by an alteration of rights regarding limited common areas. However,
as noted above, RSA 356-B:19, I also allows for situations in which the consent
of adversely affected owners would not be required, so long as the
condominium documents provided for this before assigning that limited
common area. This exception is consonant with the first clause of RSA 356-
B:19, III, which requires the condominium instruments to identify which
common area not previously assigned as limited common area may be so
assigned, and by what method.
The second clause of RSA 356-B:19, III allows limited common areas to
be “created or expanded” pursuant to a two-thirds vote, or such higher
percentage as provided in the condominium instruments. If, as discussed
above, “created or expanded” limited common area were construed to include
all assignment and reassignment of limited common areas, the second clause
would directly conflict with RSA 356-B:19, I. Instead, we interpret the second
clause of RSA 356-B:19, III to apply only when the creation or expansion of
limited common area would not adversely affect unit owners under RSA 356-
B:19, I. For instance, if a condominium association enters into an agreement
to purchase additional land, it may choose to create new limited common area
for particular unit owners. Because pre-existing common area and limited
common area rights would remain unaffected, a unit owner not receiving
additional limited common area would not be “adversely affected.” Therefore,
in the posited scenario, unanimous consent of all owners would not be
required. This interpretation comports with the protective purpose of the
statute, while, at the same time, it does not render other portions of RSA 356-
B:19 a nullity. It is also consistent with the last sentence of RSA 356-B:19, III,
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which specifically provides that creation of new limited common area cannot
alter a unit owner’s proportional percentage of common area.
Given our interpretation of paragraphs I and III of RSA 356-B:19, we hold
that the 2012 amendment was unlawful. The 2012 amendment removed
property previously designated as common area, and created limited common
area in the “separate patio” areas behind units 9R and 7R, and in the walkway
between units 9R and 7R. These assignments altered the owners’ rights with
respect to limited common area, and the Keers were adversely affected. See
RSA 356-B:19, I. Because the assignment was made without the consent of
the Keers, the 2012 amendment violated the Act. Given that we conclude that
the 2012 amendment violated the terms of the Act, we need not address the
Keers’ argument that the 2012 amendment also violated the arbitrator’s 2009
decision.
However, concluding that the 2012 amendment violated RSA 356-B:19
does not end our inquiry. We must also decide whether, in light of our ruling,
the trial court’s denial of the Keers’ motion for contempt was an unsustainable
exercise of discretion. To overturn the trial court’s decision we must find that
the Keers demonstrated that the trial court’s ruling was “clearly untenable or
unreasonable to the prejudice of [the Keers’] case.” Lillie-Putz Trust, 160 N.H.
at 723-24.
The Keers, representing themselves before the trial court, filed the
motion for contempt arguing that the 2012 amendment violated their rights as
unit owners. The motion also specifically alleges that the 2012 amendment
violated RSA 356-B:19. In a one sentence order, the trial court denied the
Keers’ motion for contempt, noting that the change in unit ownership had
shifted the balance of power in the condominium association. In their motion
for reconsideration, the Keers again argued that the 2012 amendment violated
RSA 356-B:19. In a summary order, the trial court denied the motion for
reconsideration, stating that “the Keer[s] continue to file motions challenging
the court’s past decisions regarding the Condominium rules.”
We conclude that the trial court either misconstrued the nature of the
Keers’ request, or that it simply failed to address their statutory claims. In
fact, the Keers advanced several theories before the trial court, including an
argument that the 2012 amendment violated the requirements of the Act with
respect to assignment of limited common area. The basis for that argument
was purely statutory and not predicated upon the terms of prior court orders
regarding the condominium rules. Therefore, the trial court erred when it
stated that the Keers were only challenging “the court’s past decisions
regarding the Condominium rules,” and when it failed to address the Keers’
statutory argument. Accordingly, we conclude that the trial court’s decision is
unsustainable. We, therefore, vacate the trial court’s ruling on the Keers’
motion for contempt and remand for consideration in light of our ruling. Cf. In
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the Matter of Martel & Martel, 157 N.H. 53, 61 (2008) (vacating trial court’s
denial of a motion for contempt where trial court erred in a factual finding that
formed the basis of contempt motion).
Finally, we note that, on appeal, the parties disagree as to the meaning
and ramifications of the trial court’s grant of the condominium association’s
motion to substitute parties. Given that we are remanding, we leave it to the
trial court to determine, in the first instance, the effect of its own order.
Vacated and remanded.
DALIANIS, C.J., and HICKS, CONBOY, and LYNN, JJ., concurred.
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