Jay Edwards, Inc. v. Baker

• Citation: 130 N.H. 41,534 A.2d 706
• Decision Date: 05 November 1987
• Docket Number: No. 86-087,86-087
• Parties: JAY EDWARDS, INC. v. Phillip BAKER et al.
• Court: New Hampshire Supreme Court

Page 706

534 A.2d 706

130 N.H. 41

JAY EDWARDS, INC. v. Phillip BAKER et al.

No. 86-087.

Supreme Court of New Hampshire.

Nov. 5, 1987.

Sheehan, Phinney, Bass & Green P.A., Exeter (Peter F. Kearns on brief and orally), for plaintiff.

Aeschliman & Tober, Portsmouth (Stephen L. Tober on brief and orally), for defendants.

PER CURIAM.

In this dispute over real estate, the plaintiff appeals the granting of the defendants' motion to dismiss and the denial of the plaintiff's right to a jury trial by the Superior Court (O'Neil, J.). We hold that the plaintiff did not state a cause of action and therefore affirm.

The plaintiff operates a Toyota dealership on property leased from F.A.D. Enterprises, Inc. (F.A.D.) and abutting the Spaulding Turnpike in Portsmouth. F.A.D. is a land-holding company which owns and leases not only the plaintiff's land, where the dealership is located, but land adjacent to the plaintiff's dealership which the owners of the OMNE Mall complex plan to develop.

The plaintiff filed a petition on or about January 12, 1984, asking, inter alia, that the defendants be found to have breached the lease, be temporarily enjoined from transferring the parcel that the plaintiff leases, and be ordered to convey that land to the plaintiff. The petition named the following defendants: F.A.D.; Capital Management Corporation (C.M.C.), a partner in OMNE Partners II; Thomas E. Flynn, stockholder and president of F.A.D.; Phillip G. Baker, stockholder and treasurer of C.M.C.; and OMNE Partners II, the developers of the OMNE Mall complex.

All proceedings against Thomas Flynn were resolved by agreement dated August 11, 1986. As a result, he is no longer a named defendant for purposes of final disposition of this case.

The plaintiff leased the land on which the Toyota dealership operated, pursuant to an agreement with F.A.D. executed on August 4, 1976. The lease agreement, modified by a letter of the same date, included a provision that the plaintiff would have a right of first refusal should F.A.D. decide to sell the parcel that the plaintiff leases. At the time of the execution of the lease, the plaintiff's parcel and the OMNE parcel were part of an undivided tract which could not be sold without subdivision approval, according to Portsmouth Zoning ordinances. Subdivision approval was granted after November 1983.

On November 22, 1978, the F.A.D. board of directors voted to offer the plaintiff an option to buy the parcel it was leasing for $200,000, and to require it to make a $10,000 deposit in order to do so. The plaintiff never signed the option agreement. On August 13, 1981, F.A.D. offered to sell the plaintiff both the parcel it was leasing and the OMNE parcel for $950,000. The offer was not accepted.

On May 7, 1982, F.A.D. executed an agreement with C.M.C. granting it an option to lease the OMNE parcel beginning June 30, 1982, with the right to purchase it when the lease terminated a year later. The agreement contained the condition that the plaintiff possessed the right of first refusal for the parcel which it was leasing.

In December 1982, the plaintiff was apprised of potential development plans for the OMNE Mall, as those plans might affect the plaintiff's parcel. There was additional discussion concerning the possibility of converting the plaintiff's right of first refusal into an option. As a result of this discussion, the plaintiff's attorney drafted an agreement which provided for a deposit of $1.00 for the option to purchase the leased parcel. Flynn indicated that he would be unwilling to sign such an agreement on F.A.D.'s behalf and no further discussion ensued until the present suit was filed.

On July 25, 1983, F.A.D. and CMC executed an agreement to extend CMC's option to purchase the property leased under the May 7, 1982 agreement until October 15, 1983. Additionally, CMC was granted an option to purchase F.A.D.'s stock. On September 2, 1983, CMC exercised the stock option, and the stock was transferred. F.A.D. continues to own the plaintiff's parcel, however, and the plaintiff's lease is still in effect.

The primary issue before us is whether the trial court erred in granting the defendants' motion to dismiss on the ground that the plaintiff failed to state a claim upon which relief could be granted.

In its petition, the plaintiff asserted that it was denied its right of first refusal to purchase the land it leased from F.A.D. It also argued that the defendants intentionally breached the terms of the lease and intentionally deprived the plaintiff of its right to operate a business, in violation of RSA chapter 356.

The defendants denied the plaintiff's allegations and counterclaimed that the plaintiff's claims were a misuse and abuse of process and an intentional interference with the interests of the defendants in developing the OMNE Mall. The defendant Thomas Flynn filed a separate answer and denied the material portions of the plaintiff's allegations.

The plaintiff filed its answer to the defendants' counterclaims and was denied its motion for a jury trial. The defendants filed a motion to dismiss, which the trial court granted. We affirm the granting of that motion.

In ruling on a motion to dismiss, the court must determine whether the facts as pled are sufficient under the law to constitute a cause of action. See Hartman v. Town of Hooksett, 125 N.H. 34, 35, 480 A.2d 12, 13 (1984); Hamilton v. Volkswagen of America, 125 N.H. 561, 562, 484 A.2d 1116, 1117 (1984). It must rigorously scrutinize the complaint to determine whether, on its face, it asserts a cause of action. What is involved is a pre-trial, threshold inquiry that tests the facts in the complaint against the applicable law. See F. James, Civil Procedure § 7:13 (1965).

I. Breach of Right of First Refusal

In Count I of a pleading that even the plaintiff's appellate counsel describes as "meager" in its brief, the plaintiff alleges:

A. That it leases the property upon which its business operates from the Defendant F.A.D. pursuant to the terms of a Lease executed on August 4, 1976.

B. That also on August 4, 1976, the President of F.A.D. sent a letter to the Plaintiff incorporating additional provisions into the Lease and provided ... a right to the Plaintiff to purchase the property upon which the Plaintiff operates should the Defendant F.A.D. decide to offer the property for sale.

C. In direct violation of the ... Lease, the Defendant F.A.D. offered to sell the property to CMC, with the offer being made in 1982.

(Emphasis added.) It is certainly true that "[i]n ruling on a motion to dismiss, all facts properly pleaded by the plaintiff are deemed true, and all reasonable inferences derived therefrom are construed most favorably to the plaintiff." Weld Power Industries v. C.S.I. Technologies, 124 N.H. 121, 123, 467 A.2d 568, 569 (1983). It is equally true, however, that a court "need not accept statements in the complaint which are merely conclusions of law." Chasan v. Village District of Eastman, 128 N.H. 807, 814, 523 A.2d 16, 20 (1986) (quoting Mt. Springs Water Co. v. Mt. Lakes Vill. Dist., 126 N.H. 199, 200-01, 489 A.2d 647, 649 (1985)).

The weakness in the above pleading concerns the word "offer," which is of course a legal term of art. Whether a given factual transaction is or is not an "offer" is a question of law, and its use here represents nothing more than a legal conclusion which the trial court was not required to accept. The plaintiff should rather have pled specific facts which could support the ultimate legal conclusion that an offer had been made--for example, the language used in the transaction and the circumstances surrounding the communication of the "offer." See generally 1 S. Williston, A Treatise on the Law of Contracts §§ 37-39 (3d ed. 1957). As the language of the complaint, quoted above, indicates the plaintiff has not pled such facts. Count I thus fails to "plead sufficient facts to form a basis for the cause of action asserted," Mt. Springs supra, and must fail. Because we have so concluded, we need not consider the question of whether the sale of the F.A.D. stock "triggered" the plaintiff's right of first refusal, an issue disclaimed below by the plaintiff and not properly before us.

II. Tortious Interference with Contract

In an even more striking manner, Count II of the plaintiff's petition constitutes nothing more than a bald legal conclusion, utterly devoid of factual support on the face of the pleading, to wit: "The acts of the defendants constitute...