Snyder v. New Hampshire Sav. Bank, 90-055

• Decision Date: 13 March 1991
• Docket Number: No. 90-055,90-055
• Citation: 592 A.2d 506,134 N.H. 32
• Parties: Gordon M. SNYDER v. NEW HAMPSHIRE SAVINGS BANK and another.
• Court: New Hampshire Supreme Court

Page 506

592 A.2d 506

134 N.H. 32

Gordon M. SNYDER v. NEW HAMPSHIRE SAVINGS BANK and another.

No. 90-055.

Supreme Court of New Hampshire.

March 13, 1991.

Rehearing Denied Aug. 2, 1991.

Howard and Gleason P.A., Henniker (Robert R. Howard, III, on the brief and orally), for appellant, Bio-Energy Corp.

Gallagher, Callahan & Gartrell P.A., Concord (Mary Ellen Kiley on the brief and orally), for defendant New Hampshire Sav. Bank.

Orr and Reno P.A., Concord (James E. Morris on the brief and orally), for defendant Papertech Corp.

JOHNSON, Justice.

The appellant, Bio-Energy Corporation (Bio-Energy), appeals the Superior Court's (M. Flynn, J.) denial of its motion to intervene as a plaintiff in this case, an equity action to set aside a foreclosure sale for lack of proper notice. At issue is the application to lessees of RSA 479:25, II (Supp.1990), which requires notice to certain persons of an impending foreclosure under a power of sale mortgage. We reverse the trial court's ruling that Bio-Energy, a lessee, is not entitled to notice under RSA 479:25, II (Supp.1990), and remand.

Bio-Energy entered into a ten-year lease with Hoague-Sprague Corporation in January 1985, for possession of property owned by Hoague-Sprague in Hopkinton, and subsequently recorded the lease. At the time of the agreement, the leased premises were subject to four mortgages which were granted, in order of priority, to (1) New Hampshire Savings Bank (NHSB); (2) United States Small Business Administration; (3) Gordon M. Snyder; and (4) Walter E Heller & Company of New England, Inc. NHSB's mortgage contained a power of sale. In December 1987, after Hoague-Sprague defaulted on the mortgage loan, NHSB conducted a foreclosure sale of the property at which Papertech Corporation, which now holds title, was the highest bidder. At the time the parties' briefs were filed in this court, Bio-Energy still occupied the leased premises.

In March 1988, Snyder, one of the four original mortgagees, filed a bill in equity to invalidate the foreclosure sale. Snyder alleged that the sale was held in violation of RSA 479:25, II (Supp.1990), because he did not receive written notice of the sale. He argued that, as a lienholder, the statute entitled him to such notice. The statute reads, in pertinent part:

"[N]otice shall be served upon the mortgagor or sent by registered or certified mail to his last known address or to such person as may be agreed upon in the mortgage at least 25 days before the sale. The term 'mortgagor' shall include the mortgagor or the then record owner of the premises. Like notice shall be sent to any person having a lien on the premises of record...."

In February 1989, Papertech served Bio-Energy with a notice to quit the leased premises. Bio-Energy responded by filing a motion to intervene in Snyder's action to invalidate the foreclosure sale. Bio-Energy argued that it did not receive notice to which it was entitled under RSA 479:25, II (Supp.1990), and that the foreclosure sale should therefore be set aside. Because this argument is similar to Snyder's, Bio-Energy maintained that it should be allowed to intervene in the interest of judicial economy. The superior court disagreed, ruling that Bio-Energy "was neither a 'lien holder' nor an 'owner' for the purposes of RSA 479:25."

On appeal, Bio-Energy argues that, as a lessee, it qualifies as either a lienholder or an owner for purposes of RSA 479:25, II (Supp.1990). Alternatively, Bio-Energy argues that, to the extent RSA 479:25, II (Supp.1990) does not entitle it to written notice of a foreclosure sale under a power of sale mortgage, the statute violates the due process clause of the fourteenth amendment to the United States Constitution. The defendants Papertech and NHSB reply that RSA 479:25, II (Supp.1990) cannot be read to require notice to a lessee and that such a reading does not result in any constitutional deprivation.

Before examining the merits of these arguments, we must consider Bio-Energy's procedural posture. The company has appealed the superior court's denial of its motion to intervene, and therefore our only question is whether the motion was properly denied. We have stated that "the right to intervene has been usually determined as a matter of discretion by the Trial Court." Scamman v. Sondheim, 97 N.H. 280, 281, 86 A.2d 329, 330 (1952). Thus, we may not overturn the trial court's decision unless we are persuaded that the court abused its discretion.

To determine this issue, we look to the standard a trial court should use in deciding whether to grant a motion to intervene: "[A] person who seeks to intervene in a case must have a right involved in the trial and his interest must be 'direct and apparent; such as would suffer if not indeed be sacrificed were the court to deny the privilege.' " R. Wiebusch, 4 New Hampshire Practice, Civil Practice and Procedure § 176, at 129-30 (1984) (emphasis added) (citations omitted). Bio-Energy undoubtedly has an interest in seeing the foreclosure sale invalidated. The foreclosure sale resulted in Bio-Energy's obtaining a new landlord and has placed its leasehold in jeopardy. The controversy thus is whether Bio-Energy has an actionable right involved in Snyder's equity action. To resolve this question and determine whether the trial court properly denied Bio-Energy's motion to intervene, we will determine whether Bio-Energy has a right to notice under RSA 479:25, II (Supp.1990).

First, we examine Bio-Energy's claim that it is an "owner," for purposes of RSA 479:25, II (Supp.1990). The statute provides that mortgagors are entitled to personal notice, and defines "mortgagors" to include "the mortgagor or the then record owner of the premises." RSA 479:25, II (Supp.1990) (emphasis added). "To resolve the statutory argument[ ], principles of statutory interpretation require us to look first to the statutory language itself...." Petition of Jane Doe, 132 N.H. 270, 276, 564 A.2d 433, 438 (1989). But where the statutory language is ambiguous, we turn to the statute's legislative history for interpretive guidance. See Petition of Public Serv. Co. of N.H., 130 N.H. 265, 282, 539 A.2d 263, 273 (1988), appeal dismissed, 488 U.S. 1035, 109 S.Ct. 858, 102 L.Ed.2d 983 (1989).

The phrase "then record owner of the premises" is potentially ambiguous because of the variety of interests a person may own in a particular property. One person may own a life estate in the property, while another owns a remainderman interest. At the same time, one may own a mortgage interest in the property, another a leasehold interest, and another an easement interest. See Restatement (First) of Property § 10, at 25 (1936) ("owner" means person who has one or more interests). It is unclear from the language of the statute whether one, some, or all of these possible meanings should be ascribed to the phrase "then record owner of the premises." Thus, we look to the statute's legislative history for guidance.

In 1923, mortgagors were given the right to personal notice of a foreclosure sale under a power of sale mortgage. Laws 1923, 115:1. Until that time, no class of persons was entitled to personal notice. See Laws 1899, 19:3; Laws 1905, 2:1; Laws 1923, 115:1. In 1977, the legislature amended the statute to require that personal notice be given to "a grantee of the mortgagor or the then-owner of the mortgaged premises and any person claiming a lien or other encumbrance upon the premises," as well as to the mortgagor. Laws 1977, 401:1. When this version of RSA 479:25, II (Supp.1990) was amended in 1979, the language "a grantee of the mortgagor" and "or other encumbrance" was stricken. Laws 1979, 224:1. Since then, that portion of the statute has not been changed.

Our task is to determine from the above history what the legislature intended when it deleted certain words and phrases from the statute in 1979. Ordinarily, "any material change in the language of the original act [the 1977 law] is presumed to indicate a change in legal rights." 1A Sutherland Stat. Const. § 22.30, at 265 (4th ed. C. Sands rev. 1985); see also Cowan v. Tyrolean Ski Area, Inc., 127 N.H. 397, 403, 506 A.2d 690, 694 (1985). But where the language of the original act is ambiguous, that presumption may be rebutted, and the enactment of the amending statute may be viewed as an attempt to resolve that ambiguity. See 1A Sutherland Stat. Const. § 22.30, at 266; see also Grunebaum v. C.I.R., 420 F.2d 332, 336 (2d Cir.1970) (proposal to amend regulation can be motivated by desire to clarify or restate existing law); State v. Taylor, 47 Wash.App. 118, 123, 734 P.2d 505, 508 (1987).

We conclude that the presumption of change articulated above should not be applied to this case, because the language of the original act, "a grantee of the mortgagor or the then-owner of the mortgaged premises," is ambiguous. A grantee is the owner of whatever he or she was granted; thus, it is confusing to require that notice be given to both a "grantee" and an "owner". We find it likely that the words "a grantee of the mortgagor" were stricken in order to avoid this confusion and to delete unnecessary language. This judgment is supported by the comments of a legislator advocating the amendment. Senator Poulsen, noting the deletion of the words "grantee of the mortgagor," stated that the bill which was ultimately passed "cleans up the law." N.H.S. Jour. 1000-01 (1979). Thus the deletion of those words does nothing to alter the class of persons entitled to notice of a foreclosure sale held under a power of sale mortgage.

Applying this interpretation of RSA 479:25, II (Supp.1990) to the facts of this case, we find that Bio-Energy qualifies for coverage under this statute's notice provision. Hoague-Sprague, the mortgagor in this case, conveyed a leasehold interest to Bio-Energy. Because a lease is a type of conveyance, see Ballentine's Law Dictionary 716 (3d ed. 1969), Bio-Energy is a grantee of the...