Winecellar Farm Inc. v. Hibbard

• Decision Date: 21 July 2011
• Docket Number: No. 2010–275.,2010–275.
• Citation: 27 A.3d 777,162 N.H. 256
• Parties: WINECELLAR FARM, INC.v.Leona HIBBARD and another.
• Court: New Hampshire Supreme Court

162 N.H. 256

27 A.3d 777

WINECELLAR FARM, INC.

v.Leona HIBBARD and another.

No. 2010–275.

Supreme Court of New Hampshire.

Argued: April 13, 2011.Opinion Issued: July 21, 2011.

Steiner Law Officer, PLLC, of Concord (R. James Steiner on the brief and orally), for the petitioner.McNeill, Taylor & Gallo, P.C., of Dover (R. Peter Taylor on the brief and orally), and Bosen & Associates, PLLC, of Portsmouth (Christopher P. Mulligan on the brief), for the respondents.LYNN, J.

The petitioner, Winecellar Farm, Inc. (Winecellar), appeals an order of the Superior Court ( Brown, J.) ruling that it was not entitled to: (1) a decree pro confesso awarding it specific performance to purchase the Bedard Farm; (2) specific performance to purchase the Bedard Farm under the doctrine of part performance; and (3) continue haying activity in perpetuity under a lease agreement. The respondents, thirteen individual heirs of Eva Bedard's estate, cross-appeal, arguing that the trial court erred by: (1) awarding Winecellar a purchase right regarding certain buffalo pastures; and (2) failing to order Winecellar to turn over lease payments for its use of the pastures during the litigation. We affirm in part, reverse in part, and remand.

I

We set forth the facts surrounding the relationship between Winecellar and Leo and Eva Bedard, the former owners of the Bedard Farm in Durham, as found by the trial court or as otherwise supported in the record. The Bedards were siblings who lived their entire lives on the Bedard Farm until they passed away in 2006. Neither ever married. In 1992, Craig and Jennifer Rief purchased Winecellar, a working farm adjacent to the Bedard Farm. (Hereinafter, Winecellar and the Riefs are used interchangeably.) The Riefs began living on their property in 1998, and enjoyed a close, friendly relationship with the Bedards.

The Riefs informed the Bedards on multiple occasions of their interest in buying the Bedard Farm when the Bedards were ready to sell it and, until that time, in farming both properties together. They first proposed buying the property in writing on September 28, 1997, offering to purchase it for $350,000 and to give the Bedards a life tenancy. The offer was not accepted. In November 2003, Winecellar offered to lease the Bedards' land, in order to cut hay, in exchange for a monthly payment of $500 and winter maintenance of the Bedards' driveway. A proposed “Land Lease” was attached to the letter; the Bedards did not sign it.

On May 1, 2004, Winecellar and Ms. Bedard signed a “Memorandum of Understanding to Harvest Hay” (Haying Agreement), providing that Winecellar would “harvest hay throughout the appropriate times of the year” from the Bedard Farm, and maintain and harvest the fields in accordance with certain practices. In exchange, it would be responsible for maintaining certain access ways and roadways, including snow removal from the driveway. Additionally, the Haying Agreement provided: “Bedards agree to allow Winecellar Farm to continue this activity every year in perpetuity as long as Winecellar Farm maintains the access ways, roadways and insurance coverage in accordance with the terms and conditions of this agreement.” Later in 2004, Winecellar proposed leasing part of the Bedard Farm to pasture buffalo, but the Bedards declined the offer.

By letter dated July 24, 2004, the Riefs expressed their “apologies [for] mov [ing] too fast in asking [the Bedards] to lease [them] land for the buffalo,” and stated: “we would still be interested to lease your land for a monthly payment (maybe the back field ...), or eventually buy your property when you feel the time is right.” The letter also stated:

We have always had the impression that you would consider us when it came time to sell your property and we would pay you whatever price you wanted. We also respected your need to make your decision in due time....

... Please let us know if you are still considering us as the buyer of your property—it would mean a lot to our family for our dream to merge the two farms.

About two months later, by letter dated September 27, 2004, entitled “Land Lease for Winecellar Farm to pasture buffalo,” the Riefs set forth an understanding between the parties for Winecellar to use two back fields on the Bedard Farm to pasture a buffalo herd in exchange for payments of $200 per month (Pasture Agreement). The Riefs began paying the Bedards $200 per month, invested a significant amount of money in fencing and other equipment in order to pasture buffalo on the leased land, and purchased a number of buffalo. The following year, the Riefs expressed their desire to put in writing their understanding that they could purchase the Bedard Farm at some point in the future. A note accompanying the September 2005 “lease payment” stated in part:

Your property is obviously very meaningful to us for the purpose of raising buffalo and fulfilling our long-term commitment to keep our property and yours as working farms. We would not be able to support the buffalo if we lost access to your property. With that said, I have greatly appreciated your verbal commitments in the past to sell us the property at a time and price acceptable to you, but was hopeful that you would consider documenting this in writing.

....

... ... I have enclosed a Letter of Understanding that would document your intention to sell us the property at a time and price acceptable [to] you. This is not an obligation to sell. It simply documents the verbal commitment we have made to each other, for us to purchase your property when you do decide to sell....

I have invested a lot of time and effort in raising the buffalo, including the purchase of new haying equipment. Having our intentions in writing would give me peace of mind, as I am sure it would you too. If this Letter of Understanding is acceptable to you, please sign one copy and return it to me in the self-addressed stamped envelope.

The attached “Letter of Understanding” set forth terms under which the Riefs would pay $200 per month in exchange for the Bedards' promise to sell them the property “at a time and price acceptable to owner” and for the opportunity to match any third-party offer. The Bedards did not sign the letter, and the Riefs continued to pay the Bedards $200 per month.

In January 2006, the Riefs offered to pay “an additional $200 per month” to fence more land for pasturing the buffalo. Further, they again sought written confirmation of their ability to purchase the Bedard Farm in the future; the note accompanying the February “lease payment” stated:

As we have discussed in the past, I would like to acquire your property when you are ready to sell it to support the buffalo and to maintain the property as an operating farm. I have enclosed a Letter of Understanding and an additional $200 for your consideration. If this is acceptable to you, please sign both copies of the letter on behalf of yourself and Leo and return one copy to me in the self-addressed envelop[e].

The attached “Letter of Understanding” provided that “[i]n consideration of the sum of an additional $200 per month paid under the current land lease (for a total of $400 per month),” the Bedards would agree to sell their farm to the Riefs “at a time and price acceptable to Eva Bedard and Leo Bedard.” The Bedards did not sign the letter. The Riefs thereafter paid the Bedards $400 per month; they identified each payment as a “land lease payment” until after Eva Bedard's death.

On March 11, 2006, Leo Bedard died. Later that month, in a note to Eva Bedard accompanying the April “lease payment,” the Riefs again expressed their desire to purchase the property, stating, “As we have discussed on several occasions, I would like to acquire your property when you are ready to sell it,” and

You mentioned the other day that you don't know how you could possibly repay us for everything—you don't have to. All I ask is that you consider us when you do decide to move. If it would help you, Jennifer and I would be more than happy to buy the property and let you stay for as long as you would like.

The attached “Letter of Understanding” was identically worded to the January 2006 proposal, with the exception that it did not contain Mr. Bedard's name. The document reflects that Mr. Rief, Mrs. Rief and Ms. Bedard all signed the letter on April 8, 2006. The signed letter shows that “Stephen Hoginski” witnessed all three signatures. However, Mr. Hoginski was not present when Ms. Bedard signed the document, but instead signed it as a “witness” hours later outside of her presence. Approximately three months later, on June 27, 2006, Ms. Bedard died. The Riefs subsequently recorded the signed “Letter of Understanding” in the registry of deeds.

Ms. Bedard's will executed in December 2005 provides for the Bedard Farm to pass to her nieces and nephews in accordance with a residual property clause. In November 2006, Winecellar filed a petition for a preliminary injunction seeking to preclude her estate from evicting its herd of buffalo and removing fencing equipment maintained on two pastures on the Bedard Farm. It alleged that “[t]hree separate written agreements” governed its rights, including a Haying Agreement, Pasture Agreement and a Purchase and Sale Agreement executed in April 2006. After the trial court granted the motion for preliminary injunction, Winecellar filed an amendment seeking to compel the estate to convey to it the Bedard Farm based on the doctrine of part performance and on a purchase and sales agreement. In August 2009, Winecellar filed an emergency motion to add the individual heirs of the estate as necessary parties and to add a quiet title claim against them. The trial court ordered the heirs to file a written appearance by a date certain and “a plea, answer, demurrer or other response” by November 6, 2009. Although the respondents filed appearances, they did not timely file responsive pleadings. Subsequently, based on...