Holt v. Keer, 2013–491

• Decision Date: 13 January 2015
• Docket Number: No. 2013–491,2013–491
• Citation: 167 N.H. 232,110 A.3d 1
• Parties: Richard HOLT & a. v. Gary KEER & a. Gary Keer & a. v. Richard Holt & a.
• Court: New Hampshire Supreme Court

167 N.H. 232

110 A.3d 1

Richard HOLT & a.

v.Gary KEER & a.

Gary Keer & a.

v.Richard Holt & a.

No. 2013–491

Supreme Court of New Hampshire.

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 Jeannine 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 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 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 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...