2004-189, ROBERT MATTE & a. v. SHIPPEE AUTO, INC.

has leaked periodically since the defendant has bee n in the building. The tax increases as additional rent. Evidence was presented at trial that the roof defendant to pay a fixed rent of $2,000 per month, plus a portion of real estate commercial building shared by it a nd the plaintiffs. The lease requires the The record supports the following facts. The defendant leases space in a

reverse and remand. Inc., in this action to evict it from premises leased from the plaintiffs. We an offset for damages against any unpaid rent by the defendant, Shippee Auto Motors, Inc., appeal an order of the Keene District Court (Talbot, J.) permitting NADEAU, J. The plaintiffs, Robert Matte and Bob Matte’s Raceway

brief and orally), for the defendant. Law Office of Steve J. Bonnette, P.C., of Keene (Steve J. Bonnette on the

orally), for the plaintiffs. Bell & Hockensmith, of Keene (G. Jeremy Hockensmith on the brief and

No. 2004 - 189 Keene District C ourt

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. O pinions are available on the Internet by 9:00 Errors may be reported by E - mail at the following address: errors in order that corrections may be made before the opinion goes to press. Hampshire, One Noble Drive, Concord, New Hampshire 03301, of any editorial Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as 2

with their terms is required. which a landlord did not enjoy at common law, strict compliance by its terms. Since th ese statutes establish rights and benefits nature of the action unless such an intention is clearly indicated not to be construed as making any change in the possessory which lie in . . . district courts were authorized. Such a statute is possession of his premises, s tatutory summary possessory actions In order to simplify and facilitate the landlord’s recovery of

ejectment action. Lavoie v. Szumiez, 115 N.H. p. 2 266, 267 (1975). the usual way a landlord regained possession of property was by a common law Before adoption of the statutory procedures codifie d in RSA chapter 540,

counterclaims. possession -- they made no claim for past - due rent and the defendant filed no prescribed by the statute. They also note that their writ sought only action, and argue that the trial court’s autho rity to grant relief is limited to that that an eviction proceeding under RSA chapter 540 is a summary possessory deny the eviction sought and to order the affirmative relief it did. They note On appeal, the plaint iffs argue that the trial court lacked the authority to

would dismiss the eviction action. remaining balance of unpaid rent and taxes by February p. 2 25, 2004, the court piece of equipment. The court concluded that if the defendant paid the without the benefit of insul ation; and $2700 for the repair of” a water - damaged substantial periods of time; $500 for having to heat the premises in January $2,000 rent for the month of December when the premises were of little use for taxes. It determined, however, that the defendant was “entitled to a credit of The court found that the plaintiffs were entitled to the unpaid rent and

be permitted to offset its damages against any unpaid rent.” “As a matter of contract law, by analogy, a commercial tenant should therefore unpaid rent for breaches of the warranty of ha bitability. The court concluded: On the other hand, it noted, a residential tenant may claim offsets against a landlord - tenant action by withholding rent for claimed breaches of warranty. defendant from the premises. The trial court held that a tenant could not avoid The plaintiffs brought this action under RSA chapter 540 to evict the

represented at trial that the rent due had been placed in an escrow account. trial, the defendant was also behind on the additional tax rent. The defendant continue to do so until it “stop[ped] raining into [its] space.” At the time of the defendant began withholding rent, stating through counsel that it would leaking became steadily worse during the summer of p. 2 200 p. 3 3. In December 2003, 3

rather sought possession of the premises only. Thus, the trial court erred in make a claim for unpaid rent.” Id. The landlord here did not so elect, but amount owed to the plaintiff[s],” is availa ble only “[i]f the landlord elects to defendant sought to assert here, namely, one “which offsets or reduces the The plain meaning of this provision is that the type of defense the

nonpayment, a money judgment shall issue in favor of the tenant. that the tenant’s counterclaim exceeds the amount of the action shall be granted in favor of the tenant. If the court finds owed by the tenant to the landlord, judgment in the possessory exceeds or equals the amount of rent and other lawful charges the landlord to the tenant, as a result of set - off or cou nterclaim money judgment. If the court determines that the amount owed by ground of nonpayment of rent, it shall also award the landlord a the court finds that the landlord is entitled to possession on the tenant which offsets or reduces the amount owed to the plaintiff. I f court shall consider any defense, claim, or counterclaim by the rent. If the landlord elects to make a claim for unpaid rent, the at the l andlord’s option, to make a claim for an award of unpaid The writ of summons shall provide an opportunity for the landlord,

RSA 540:1 p. 3 3, III (Supp. 2004) provides, in part:

add words that it did not see fit to include.” Id. (citation omitted). modification. We will neither consider what the legislature might have said nor the language of a statute is clear on its face, its meaning is not subject to as a whole.” Remington Invs. v. Howard, 150 N.H. 65 p. 3 3, 654 (2004). “Where of the intent of the legislature as expressed in the words of a statute considered action statute. In matters of statutory interpretation, we are “the final arbiter With these guidelines in mind, we examine our own summary possessory

possessory actions.” Brown v. Young, p. 3 364 A.2d 1171, 1173 (D.C. 1976). of Appeals has stated that “[f]ew defens es are available in [summary] cert. denied, 502 U.S. 816 (1991). Accordingly, the District of Columbia Court Ossen v. Wanat, 585 A.2d 685, 687 (Conn.) (quotation and ellipses omitted),

landlord seeking possession. summary and is designed to provide an expeditious remedy to the under a common - law action. The process is intended to be suffering the delay, loss and expense to which he may be subjected landlord to recover possession on termination of a lease without The purpose of summary proce ss proceedings is to permit the

explained: Id. (citation omitted). Furthermore, as the Supreme Court of Connecticut has p. 4 4

the consummation of the lease or to the purpose for which the lessee entered on the lessor’s performance of covenants that were a significant inducement to Supreme Court has held that “the lessee’s covenant to pay rent is dependent the landlord’s obligations under the lease. Thus, for exam ple, the Utah pay rent would be dependent upon the landlord’s performance of some or all of jurisdictions holding that view. Under this theory, the tenant’s obligation to lease covenants are mutually de pendent, and cites case law from other The defendant appears to argue, however, for adoption of the rule that

Thus, we decline to address the defendant’s warranty of habitability argument. against a cl aim made against him by the landlord.” Id. at 93 (citation omitted). by instituting an action for breach of warranty or by offsetting his damages remedies of damages, reformation, and rescission. The tenant can obtain relief warranty of habitability] makes available to the tenant the basic contract appeal. Kline, 111 N.H. at 88. We stated that “[a]doption of [the implied recovered possession of the premises and that judgment was not at issue on commercial tenants. See RSA 5 p. 4 40:13 - d. In Kline, the landlord had already made available to residential tenants by statute and does not apply to rent and defeat an eviction action. That remedy, as noted previously, was namely, that breach of the warranty of habitability allows a tenant to withhold leas es, does not support the proposition the defendant would have us apply, in which we first recognized an implied warranty of habitability in residential commercial leases because Kline v. Burns, 111 N.H. 87, 92 (1971), the decision We need not reconsider whether to extend the warranty of habitability to

case, which were substantially different from tho se presented here. 536 (1980), but notes that we expressly based our decision on the facts of that warranty of habitability to commercial leases in Golub v. Colby, 120 N.H. 535, contract law.” The defend ant acknowledges that we declined to extend the extended the warranty of habitability to this commercial lease “by analogy to The defendant argues that the trial court, nevertheless, correctly

vacation or recreation.” It therefore does not apply to this commercial lease. to “any premises leased or rented for residential purposes, other than for relief under this section. We disagree. B y its terms, RSA 5 p. 4 40:13 - d applies only premises.” The defendant argues that the trial court had the authority to order fitness for health and safety” that “materially affects the habitability of [the] action brought for failure to pay rent for a substantial violation of “standards of statute. For instance, RSA 540:13 - d (1997) provides a defense to a possessory defenses are of course cognizable in a summa ry proceeding brought under that Certain defenses are recognized in RSA chapter 540 itself, and those

Accordingly, we reverse the trial court’s order. the defendant could avoid eviction by paying the net amount of rent owed. offsetting the defendant’s damages against the past - due rent a nd in ruling that p. 5 5

37 p. 5 5. The typical tenant has also evolved from the “‘jack - of - all - trades’ farmer the lessee than did the land itself.” Richard Barton Enterprises, 928 P.2d at commercial buildings, . . . plants and factories came to have greate r value to important. Improvements such as houses, apartments, office[s,] . . . industrialized society, improvements on the land became relatively more society and the law. “With th e evolution from an agrarian to an urbanized, underpinnings of the independent covenants rule have given way to changes in As a number of courts have recognized, many of the historical

Id. at 90 - 91 (citations omitted).

independent of each other. the covenants of the parties were con sidered to be mutually the tenant. Because the lease was primarily a conveyance of land, without modern conveniences and could be easily kept in repair by were mostly incidental to the lease. They were constructed simply which would often yield the rent. Also the bui ldings on the land existing, the value of the lease to the tenant was the land itself the landlord and others. Furthermore, in the agrarian society then him with the remedies with which to protect his interest against was considered both an owner and occupier in order to provide as a conveyance of lands for a certain term or at will. The tenant Under the tenurial system a lease was considered primarily

which h as little application in the modern world. See Kline, 111 N.H. at 90 - 92. independent lease covenants originated under the system of feudal tenure, As we observed in Kline, however, the common law doctrine of

that case do not vitiate that rule. r emedies afforded tenants by our adoption of the warranty of habitability in excuse, nor is it a defense to, the failure of the tenant to pay rent,” id., and the rule that “[t]he landlord’s breach of an express covenant to repair does not performance of their obligation,” id. at 90. Rather, we noted the common law tenants and that their obligation to pay rent was dependent on the landlords’ with the [housing] code was a contractual obligation of the landlords to the id. at 92, we did not adopt the tenants’ contention that “the duty to comply recognized therein an implied warranty of h abitability in residential leases, see noted the independent covenants rule in Kline, 111 N.H. at 91, and while we See Wesson v. Leone Enterprises, Inc., 774 N.E.2d 611, 620 (Mass. 2002). We actual or constructive evi ction will relieve a tenant of his obligation to pay rent. common law rule that the covenants of a lease are independent, and only an The doctrine that the defendant would have us adopt is contrary to the

(Utah 199 p. 6 6). into the l ease.” Richard Barton Enterprises, Inc. v. Tsern, 928 P.2d 368, 378 6

repossessing and relet ting the premises without losing the right to seek 795, 799 (2004), in the context of allowing a landlord to mitigate damages by rule in RAL Automotive Group, Inc. v. Edwards, 151 N.H. ___, ___, 8 p. 6 61 A.2d We note, for instance, that we recently reaffirmed the independent covenants attention by the parties because they are not relevant to the case before u s. affect other common law doctrines in ways that have not been brought to our Similarly, wholesale abrogation of the independent covenants rule may

legislature an opp ortunity to address the issue. Thus, we are reluctant to make such changes without first giving the disrupt the legislatively - created framework governing RSA chapter 540 actions. envision ways in which changing common law rights and remedies might Cooperman v. MacNeil, 123 N.H. p. 6 696, 701 (1983). N evertheless, we can exist side by side with the statutory remedy, at the election of the suitor.” the old common - law actions of ejectment and entry have been retained and pursuing his legal reme dy at common law,” and, therefore, “in New Hampshire, “[n]othing in this chapter shall be construed to prevent a landlord from 540 - A (1997 & Supp. 2004). Admittedly, RSA 540:26 (1997) provides that enacted rules and procedures. See RSA ch. 540 (1997 & Supp. 2004); RSA ch. law, some areas of landlord - tenant law are now governed by le gislatively - First, although the independent covenants rule is a part of the common

common law rule of independent covenants at this time. escaped us here, a number of considerations convince us not to abandon the N.H. at 89 (quotation omitted). Nevertheless, while that recognition has not premises are reasonably safe or suitable for the uses intended.” Kline, 111 common law rule that ordinary leases contain no implied warranty that “the the landlord - tenant relationship in modern society prompted us to abandon the In Kline, our recognition that feudal values no longer define or influence

at 34; Richard Barton Enterprises, 928 P.2d at 378. p. 6 667, 672 (Ariz. Ct. App. 1994); Wesson, 774 N.E.2d at 621; Teodori, 415 A.2d covenants are dependent. See Terry v. Gaslight Square Associates, 897 P.2d even in the context of commercial leases, that the tenant’s and the landlord’s the foregoing reasons, courts in a number of States have adopted the view, Shopping Ctr. v. Dastmalchi, 446 N.W.2d 440, 443 (N.D. 1989). For many of increasing influence of contract law on interpretation of leases.” South Forks the independent covenants rule “may be shifting somewhat due to the Teodori v. Werner, 415 A.2d 31, 33 (Pa. 1980). Thus, it has been noted that properly analyzed under contract law rather than property law. See, e.g., In addition, leases have come to be viewed by many courts as more

(quotation omitted). ability or i ncentive to make repairs himself. Wesson, p. 7 774 N.E.2d at p. 6 619 who was the common law’s model of the lessee” to one who lacks the skill, 7

concurred. BRODERICK, C.J., and DALIANIS, DUGGAN and GALWAY, JJ.,

133 N.H. at 816. Accordingly, we reject the defendant’s argument. the distric t court does not have equity jurisdiction.” Woodstock Soapstone, “Although it has the power to entertain possessory actions under RSA 540:13, Soapstone Co. v. Carleton, 133 N.H. 809, 816 (1991); see RSA 502 - A:14 (199 p. 7 7). “is a court of limited jurisdiction with powers conferred by statute.” Woodstock equitable power.” Emerson v. Town of Stratford, 139 N.H. 629, 631 (1995). It court is not a constitutional court and does not have a general grant of deny the eviction based on principles of equity.” We disagree. “[T]he district Finally, the defendant argues that “it was proper for the trial court to

the defendant to begin withholding the fixed monthly rent in December. roof has been repaired.” There is no evidence that this agreement authorized 2003, “to defer di scussions regarding the unpaid real estate tax rent until the appears to have been, at most, an agreement sometime prior to November 5, preserved, the evidence would not support a finding of modification. There Upon review of the record, we conclude that even if this issue had been and that, in any event, the evidence does not show a modification of the lease. plaintiffs counter that this argument was not preserved for appellate review, pay all rent that it owed, including its portion of the real estate tax bill.” The to provide that once the roof was completely rep aired, [the defendant] would The defendant contends that “[t]he parties modified the terms of the lease

remaining arguments. the doctrine of dependent lease covenants. We turn now to the defendant’s Accordingly, we decline at this time the defendant’s invitation to adopt

new law. landlords and tenants more of an opportunity to anticipate and adjust to the and tenants in this State. A statutory change, on the other hand, would give by the defendant would se riously disrupt settled expectations among landlords omitted). A sudden and fundamental change in the law such as that proposed Mut. Fire Ins. Co. v. Scanlon, 138 N.H. 301, 304 (1994) (quotation and ellipsis invo lving contract rights, where reliance interests are involved.” Providence Finally, “considerations in favor of stare decisis” are paramount “in cases

may make in the framework of the statutory possessory action. legislature, on the other hand, may consider the global effects of any change it mitigation of damages doctrine is neither clear no r currently before us. The abandoning the independent covenants rule in this case might have on the damages from the original tenant for any deficiency in the rent. The effect that