Lynch v. Town of Pelham
| Decision Date | 24 October 2014 |
| Docket Number | No. 2013–064,2013–064 |
| Parties | J. Albert LYNCH v. TOWN OF PELHAM |
| Court | New Hampshire Supreme Court |
Cronin, Bisson & Zalinsky P.C., of Manchester (John G. Cronin and Daniel D. Muller, Jr., on the brief and Mr. Cronin orally), for the plaintiff.
Donahue, Tucker & Ciandella, PLLC, of Exeter (Katherine B. Miller, on the brief and orally), for the defendant.
The plaintiff, J. Albert Lynch, Trustee of FIN–LYN Trust (Trustee), appeals an order of the Superior Court (Nicolosi, J.) granting a motion to dismiss his action seeking to enforce restrictive covenants contained in a deed between the Trustee and the Town of Pelham (Town). The trial court ruled that the covenants at issue are appurtenant and personal, and that the Trustee lacked standing to enforce them. We reverse and remand.
The following facts were drawn from the plaintiff's petition, the allegations of which we accept as true for the purposes of reviewing the trial court's order on the motion to dismiss. Elter–Nodvin v. Nodvin, 163 N.H. 678, 679, 48 A.3d 908 (2012). In the 1980s, Elizabeth Mills owned twenty-four acres of land in the center of the Town. After she fell ill, her daughter, Shirley Parker, attempted to sell the property. Two local developers made offers to Parker with the intent to subdivide the property into multiple building lots. Before she had acted upon either offer, Louis Fineman and J. Albert Lynch, both residents of Pelham, approached Parker about purchasing the entire tract for $300,000, with the intention to sell it to the Town rather than develop it.
Fineman and Lynch approached the Town Board of Selectmen with their proposal to purchase the property and then sell it to the Town. The Board of Selectmen told them that the Town would be willing to purchase only eighteen acres because it could not afford the entire tract. Sometime prior to the conveyance, the FIN–LYN Trust was established with Lynch as the trustee. On February 1, 1985, the property was conveyed to Lynch, as Trustee, by deed recorded in the Hillsborough County Registry of Deeds. On or about March 25, 1985, the Town Planning Board signed an approved subdivision plan for the property, also recorded in the Hillsborough County Registry of Deeds, which depicted an eighteen-acre parcel, Lot 7–237, and six one-acre building lots, Lot 7–237–1 through Lot 7–237–6, intended for single-family use. The Trustee sold the six building lots on May 1, 1985, and engaged in negotiations with the Town relative to the eighteen-acre lot.
William Hayes, the chairman of the Planning Board, negotiated on behalf of the Town. From the outset, the Trustee insisted that the eighteen-acre parcel be used only for municipal buildings, and that the Town set up a committee to study the development of town offices on the property. The Town ultimately agreed to purchase the eighteen-acre parcel for $180,000, subject to a number of restrictive covenants. The deed conveying the eighteen-acre parcel was executed on May 31, 1985. It provided, in part:
The deed did not specify whether the restrictions were intended to be in gross or appurtenant, and likewise did not specify a means of enforcing the restrictive covenants, such as a right of re-entry or reverter.
The Town has constructed municipal buildings on the eighteen-acre parcel, now known as the Village Green. In March 2012, the Town voted to approve construction of a new fire station on the Village Green. The design was proposed in 2011. When the plans were first presented to the Board of Selectmen, the minutes reflect that it was observed "that all of the deed restrictions and covenants encumbering the property had been covered in the proposed design; every [criterion] of the deed had been met." However, although the Town described the proposed fire station as being "designed in a traditional New England fashion, with pitched roofs, clapboard siding and double hung windows," the Trustee disagreed. By letter dated March 27, 2012, the Trustee advised the Board of Selectmen that the proposed fire station did not comport with the restrictive covenants in the deed to the Town. The Trustee filed a writ on April 20, 2012, in superior court. As of that date, the Town had not responded to the Trustee's letter, and it continued to plan for construction. At oral argument before this court, the Town represented that construction of the fire station had been completed.
In his writ, the Trustee alleged that "the portion of the new fire station constituting the garage will have a flat roof," and "portions of the new fire station will consist of poured concrete walls" rather than clapboards. The Trustee petitioned the court for declaratory and injunctive relief, claiming that: (1) the proposed fire station would violate the restrictive covenants because it is not of "Colonial architecture," in whole or in part, and has, in whole or in part, a flat roof; (2) the Town violated the deed restrictions when it failed to plant a dense row of trees along the southern boundary of the Village Green; and (3) the Town violated the covenants by failing to fully reconstruct and maintain the stone wall along Marsh Road. He also requested attorney's fees. The Town moved to dismiss, arguing that the Trustee lacked standing to enforce the restrictive covenants because the Trustee no longer owned any land near the Village Green. The Trustee responded that because the covenants are in gross, he is able to enforce them. In the alternative, the Trustee sought to amend the petition to add an abutting landowner as a party.
The trial court relied on Shaff v. Leyland, 154 N.H. 495, 914 A.2d 1240 (2006), in ruling that, because the Trustee did not own land benefiting from the covenants, he lacked standing to enforce them. It interpreted Shaff to hold that any deeded covenant that is not clearly labeled "in gross"—including those at issue here—is an appurtenant covenant. The trial court also ruled that, even if it were to construe the covenants as in gross and enforceable, the Trustee had failed to allege a cognizable "legitimate interest" in enforcing the covenant. See Restatement (Third) of Property: Servitudes § 8.1, at 474 (2000). The court ruled that aesthetic concerns "cannot be considered legitimate where [the Trustee] does not own any nearby property." The court found that the equities favored the unrestricted use of the Town's land as endorsed by its voters, over the aesthetic concerns advanced by the Trustee. It also rejected the Trustee's contract-based arguments. This appeal followed.
On appeal, the Trustee argues that the trial court erred by applying Shaff to the exclusion of other accepted principles of deed interpretation. He argues that the pertinent covenants were in gross and supports that argument in two ways. First, he contrasts the covenants at issue with other covenants contained in the deed that expressly identify the benefited dominant estate, arguing that those servitudes that were not expressly appurtenant were intended to be in gross. Second, he argues that, taking into account the circumstances existing at the time of their creation, the covenants at issue were intended to be in gross. Specifically, he argues that since the Trust had already divested itself of its other property at the time of the conveyance to the Town, it is clear that the parties did not intend the covenants to benefit a particular parcel of nearby land, but rather the residents of the community, independent of the ownership of any particular parcel.
The Trustee further argues that the trial court erred when, despite its failure to identify a specific property benefiting from those covenants, it concluded that the restrictions were covenants appurtenant. He supports this contention by referring to the trial court's denial of his request to add an abutting landowner because to do so "would be futile." The Trustee also challenges the trial court's conclusion that he lacked a "legitimate interest" in enforcing the covenants. Finally, he argues that the trial court erred when it denied his request to add an abutting landowner as an additional petitioner.
The Town counters that New Hampshire's rules of deed construction favor appurtenant restrictions, and that restrictive covenants may be in gross only if the deed clearly states that the covenants created are in gross. The Town argues that, because the deed did not specify that the restrictions were in gross, the restrictions were appurtenant, and, since Lynch, in his capacity as Trustee, owns no other land in the Town, he lacks standing to enforce the restrictions. The Town also contends that, even if the restrictions are in gross, the Trustee is not entitled to enforce the restrictions because he has shown no injury or damages entitling him to equitable relief. It adds that the trial court did not unsustainably exercise its discretion by denying the Trustee's motion to amend because the deed contains no right to enforcement...
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