2008-706, SOUTH WILLOW PROPERTIES, LLC v. BURLINGTON COAT FACTORY OF NEW HAMPSHIRE, LLC

This is a commercial landlord/tenant dispute

brief and orally), for the defendant. Cleveland, Waters and Bass, P.A., of Concord (William B. Pribis on the

the plaintiff. Ogorchock and John Mark Turner on the brief, and Mr. Ogorchock orally), for Sheehan Phinney Bass + Green, P.A., of Manchester (James F. to press. Errors may be reported by E-mail at the following address:

BURLINGTON COAT FACTORY OF NEW HAMPSHIRE, LLC

page is: http://www.courts.state.nh.us/supreme. SOUTH WILLOW PROPERTIES, LLC

No. 2008-706 editorial errors in order that corrections may be made before the opinion goes Manchester District Court Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New ___________________________

THE SUPREME COURT OF NEW HAMPSHIRE

a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as p. 2 South Willow, BCF signed a contract for replacement of the roof. requesting a decision by October 19. On October 31, without notification to BCF sent an email to South Willow attaching bids for a new roof and

written consent would be a default under the lease.” On October 13, 2005,

permission to perform any work on the roof” and doing so “without landlord’s following day, South Willow reiterated that BCF “does not have the Landlord’s notice, Tenant may cure such default on Landlord’s behalf.” By letter dated the

services and construction costs required to remedy them.

to perform any of its obligations under the Lease, and after seven (7) days

structural problems, including the leaks, and agreed to pay for the engineering coming through the roof. In 2004, BCF acknowledged responsibility for the notifying BCF that doing so would be “a default under the lease.” structural steel installed to support the remaining wall resulted in a “waterfall” 2

contractor to replace the roof.” Demolition of the roof commenced that same

of the Lease. Further, under Article 28 of the Lease, in the event Landlord fails

engage in any type of roof replacement without its written consent and by removal of the load-bearing wall and the negligent installation of the South Willow did not. South Willow responded by instructing BCF not to leaks was South Willow’s responsibility and that it would replace the roof if

to South Willow stating that it had “already contracted with a roofing was locating a contractor to install a new roof. On March 2, BCF faxed a letter stated, “[R]eplacement of the roof is Landlord’s responsibility under Article 14 On February 23, 2006, South Willow sent a letter to BCF stating that it

the roof developed numerous, severe leaks. The deflection in the roof caused holes in the roof to attach the support beams. As a result of these renovations, repairs to the roof into 2005. In August 2005, BCF alleged that fixing the roof the roof; and changing the façade of the building, which required four large

On September 8, 2005, BCF sent a letter to South Willow in which it

resolved. The parties continued to disagree about the adequacy of BCF’s units and installing sixteen new units, which resulted in several large holes in outstanding issues,” including those concerning roof damage, had been In September 2004, South Willow informed BCF that “none of the

predecessors-in-interest and took occupancy of the space at issue. 2002, BCF assumed the obligations under a 1974 lease between the parties’

bearing wall, which caused serious structural problems; removing seven HVAC renovations to the property that included removing an interior concrete loadroof that were satisfactorily repaired by South Willow. In 2003, BCF undertook When BCF moved into the premises, there were occasional leaks in the

is a tenant in a shopping plaza in Manchester owned by South Willow. In late The record contains the following facts. BCF, a retail clothing merchant, arguing, in part, that the notice to quit was defective because it set forth two

p. 3 demised Premises.” BCF filed a special plea and brief statement of defenses

the written consent of the Landlord prior to engaging in structural work on the of the Lease requiring the tenant to provide plans and specifications and obtain (30 days from the date of this Notice) for your failure to comply with Section 15

possession of 1525 South Willow Street . . . no later than November 18, 2006

judgment on the merits must have been rendered in the first action.

for its intended use. to quit. The notice stated: “You are hereby notified to quit and deliver

which BCF contends was a “material element of its claim.” therefore, is whether a final judgment on the merits was rendered in the first

same cause of action must be before the court in both instances; and (3) a final ordered the issuance of a writ of possession. quit. A new possessory action was filed and, following a bench trial, the court case. Two days later, South Willow issued a new eviction notice and notice to there was insufficient evidence to prove the property was not safe or unsuitable the roof was a non-material breach of the parties’ lease; and (6) in finding that On October 17, 2006, South Willow served BCF with a thirty-day notice in excluding expert testimony; (5) in failing to find that BCF’s replacement of

merits” in that South Willow failed to prove service of a proper eviction notice, parties do not dispute that the first two elements are met. The issue before us,

met: (1) the parties must be the same or in privity with one another; (2) the same cause of action. Id. For the doctrine to apply, three elements must be could have been litigated, in an earlier action between the same parties for the concluded that the notice to quit was not sufficiently specific and dismissed the precludes litigation in a later case of matters actually decided, and matters that novo. Meier v. Town of Littleton, 154 N.H. 340, 342 (2006). Res judicata The applicability of res judicata is a question of law, which we review de waiver of South Willow’s right to evict; (3) in its interpretation of the lease; (4)

BCF argues that the judgment in the first lawsuit was a “final judgment on the dismissing South Willow’s second lawsuit under the doctrine of res judicata. We first address BCF’s argument that the trial court erred by not

2007, filed its landlord-tenant writ. On October 31, 2007, the district court

ruling that South Willow’s continued acceptance of rent did not constitute a Willow’s second action was not barred by the doctrine of res judicata; (2) in BCF appeals, arguing that the trial court erred: (1) in ruling that South

On October 17, 2006, South Willow served a notice to quit and in May

work, but BCF proceeded to have its contractor replace the existing roof. day. South Willow responded on March 2, instructing BCF to cease all roof suit.” p. 4 the merits of the action, the judgment rendered will prove no bar to another

notice and notice to quit. findings.” Two days later, South Willow served BCF with a second eviction or from the evidence at trial.”

for the eviction” as required by RSA 540:3. “If the first suit was dismissed for

other issues raised by the defendant nor did the court rule on the requests for accordingly, did not bar South Willow’s second lawsuit. satisfied “appears on the face of the pleadings, as a result of pretrial discovery, technical defect in the notice to quit, was not a decision on the merits and, new suit for possession). We hold that the trial court’s dismissal, based upon a landlord’s failure to give a notice to quit did not preclude landlord from filing a William Calomiris Inv. Corp., 461 A.2d 466 (D.C. 1983) (dismissal based upon Costello v. United States, 365 U.S. 265, 286 (1961); see Hamilton v. specificity the reason for the eviction.” with RSA 540:3.” RSA 540:3 requires that an eviction notice “state with giving to the tenant . . . a notice in writing to quit the premises in accordance that South Willow’s first notice to quit did not “state with specificity the reason

order, the court stated: “Given this decision, the court did not address the (1982). This rule applies whether the fact that a precondition has not been period. The trial court agreed and granted BCF’s motion to dismiss. In its subjected under a common-law action.” precondition has been satisfied.” Restatement (Second) of Judgments § 20(2) specific as to the tenant’s alleged conduct and it did not give a sufficient notice suit, does not bar another action by the plaintiff instituted after . . . the A judgment based upon a “plaintiff’s failure to satisfy a precondition to

I, “[t]he lessor or owner of nonrestricted property may terminate any tenancy by with [its] terms is required.” Lavoie, 115 N.H. at 267. Pursuant to RSA 540:2, and benefits which a landlord did not enjoy at common law, strict compliance 218 (2005) (quotation omitted). Because RSA chapter 540 “establish[es] rights

lease without suffering the delay, loss and expense to which he may be the notice to quit failed to comply with RSA 540:3 because the notice was not actions “is to permit the landlord to recover possession on termination of a premises. Lavoie v. Szumiez, 115 N.H. 266, 267 (1975). The purpose of such actions to simplify and facilitate the landlord’s recovery of possession of the the eviction, and its notice period was insufficient. RSA chapter 540 (2007 & Supp. 2008) authorizes summary possessory

The court held a bench trial and at the close of evidence BCF argued that

breach of the lease, it failed to state with sufficient specificity the reason(s) for different notice periods, it failed to allege that BCF committed a material p. 5 5

the parties engaged in numerous communications concerning BCF’s negligent

issued writ of possession. right to bring an eviction proceeding. Throughout 2003, 2004, and into 200 p. 5 5, the eviction notice. that Miller and Colonial Village compel a finding that South Willow waived its unauthorized replacement of the roof, constituted a waiver. We do not agree acceptance of rent,” following its claim of breach of the lease for BCF’s landlord’s right to proceed with an eviction.” Based upon these cases, BCF argues that South Willow’s “unqualified

intended to continue with eviction proceedings despite the payment. Id. at 93. future rent does not create a new tenancy where there is evidence a landlord the landlord’s right to evict. Id. We affirmed, holding that the acceptance of possession, rejecting the tenant’s argument that the acceptance of rent waived as a waiver to issue a notice to quit.” Id. The trial court issued a writ of justifying an inference of a relinquishment of it.” verbal agreement, the landlord had the tenant removed with the previously quit, advising the tenant that its acceptance of rent “should not be construed

premises until the end of May. trial court ruled that the landlord’s acceptance of rent waived its right under ongoing rent payments from its tenant. Colonial Village, 1 p. 5 57 N.H. at 91. The In Colonial Village, after the landlord served a notice to quit, it accepted breach and serving an eviction notice will not operate as a waiver of the party. Id. start a new possessory action if it wanted to evict the tenant because of the clearly erroneous. until the end of May. Id. at 661. Accordingly, the landlord was obligated to because the parties had expressly agreed to create a new tenancy that lasted

explicit language to forego a right, or upon conduct under the circumstances landlord believed was a violation of the original lease and the subsequent

that if the tenant paid the April and May rent, the tenant could remain in the Miller, 1 p. 5 50 N.H. at 657. Thereafter, the landlord and tenant verbally agreed did not pay rent for April and the landlord prevailed on its possessory action. tenant on notice that the landlord’s acceptance of future rent after claiming a In Miller, the tenant, whose lease was due to expire at the end of May,

question of fact and we will not overturn the trial judge’s determination unless Town of Bethlehem, 146 N.H. 348, 3 p. 5 54 (2001) (quotation omitted). Waiver is a

“A finding of waiver must be based upon an intention expressed in

1 p. 5 57 N.H. 91 (2008), “the landlord must take some affirmative step to put the Miller v. Slania Enters., 150 N.H. 655 (2004), and Colonial Village v. Pelkey, the eviction by its continued acceptance of rent. BCF argues that based upon The next issue is whether South Willow waived its right to proceed with the time, and the object intended.” p. 6 parties, all of its provisions, its subject matter, the situation of the parties at default under the lease.” roof of the Premises. To do so without landlord’s written consent would be a that it “does not have the Landlord’s permission to perform any work on the 6

deems necessary to keep the premises in a good state of repair, but

reflect the parties’ intention, the court considers the written agreement of these that it relinquished such a right. behalf and at Landlord’s expense.” South Willow responded by informing BCF

and replacements to the interior of Tenant’s buildings which it Tenant shall make and pay for all . . . nonstructural repairs

Paragraph 14 of the lease provides: waiver of the right to evict.”

facts found by the trial court. In our search for the interpretation that will best pursue eviction nor conducted itself in such a way as to justify an inference obligations under the Lease . . . Tenant may cure such default on Landlord’s we interpret a lease by giving its terms their reasonable meaning.” under Article 28 of the Lease, in the event Landlord fails to perform any of its the roof is Landlord’s responsibility under Article 14 of the Lease. Further, On September 8, 2005, BCF notified South Willow that “replacement of

(1979) (citation and quotation omitted).

and citation omitted). “It is this court’s task to interpret the contract, using Willow neither expressed in explicit language its intent to forego its right to Blackstone Realty Assocs., 141 N.H. 366, 368-69 (1996) (brackets, quotation

ultimately a question of law for this court to determine. As with any contract, subsequent eviction proceedings.” 15 and 28 of the parties’ lease. “The proper interpretation of a lease is Next BCF argues that the trial court erred in interpreting paragraphs 14,

reserving all of its rights to pursue whatever remedies were available to it. 354. We hold that the trial court did not err in finding that South Willow’s replacement of the roof, South Willow notified BCF in writing that it was See N. Country Envtl. Servs., 146 N.H. at date that BCF notified South Willow that it was proceeding with demolition and

Based upon the totality of the parties’ conduct, we conclude that South

accepted with the reservation of all rights under this Notice and any hereafter received from you for the use and occupancy of said Premises shall be second eviction notice and notice to quit, which stated that “[a]ll payments

Colonial Village, on November 2, 2007, South Willow served its

default of the lease for conducting unauthorized work. On March 2, 2006, the construction work, and South Willow repeatedly informed BCF that it was in tenant may exercise self-help under paragraph 28 of the lease. p. 7 specifications, refuses to authorize “alterations, additions or changes” that the approval. It is only after the landlord, despite receiving plans and

specifications for the proposed work to South Willow and receive its written

building will not be impaired by such work.

“alterations, additions or changes,” BCF was required to submit plans and contemplated in paragraph 15 of the lease. Thus, before undertaking roof is a structural alteration, addition and change” to the structure as

not withhold its consent thereto if the structural strength of the

alterations, additions or changes; provided, further, Landlord shall

negligent construction, it was BCF’s responsibility to fix the damage. However, property. Because BCF caused the damage at issue to the building by its engaged in negligent construction when it undertook renovations to the

tenantable condition, and in good order and repair. which shall be necessary to maintain the same in a safe, dry and Article and those due to Tenant’s negligence) to said buildings payments in connection therewith . . . . written consent to plans and specifications for structural Landlord, and do all necessary work and make all necessary suitable; provided, however, Tenant shall obtain Landlord’s prior otherwise, in and to its buildings as it may deem necessary or

negligence are the responsibility of the tenant. The trial court found that BCF Pursuant to paragraph 14 of the lease, repairs due to the tenant’s

shall be specifically obligated to make under the provisions of this . . . cure such default, all on behalf of and at the expense of any such default for seven (7) days after notice thereof by Tenant such interior alterations, additions or changes, structural or specified in this lease, then Tenant may, after the continuance of In the event Landlord shall . . . fail to perform any obligation

Paragraph 28 of the lease provides:

pay for all repairs and replacements (except those which Tenant negligence, default or failure to repair. Landlord shall make and provision of this lease or which shall be necessitated by Landlord’s Tenant may, at its own expense, from time to time make

Paragraph 15 of the lease provides:

replacements which Landlord shall be required to make under any in no event shall Tenant be obligated to make repairs and satisfy the requirements of paragraph 15.” p. 8 2005, “were not plans and specifications, as those terms are normally used, to

trial court’s finding that the bids forwarded to South Willow on October 13,

choose. Based upon the evidence at trial, we affirm the reasonableness of the Furthermore, BCF did not specify which of the several bids it was going to certain specific, unique situations,” a “field walk-through,” and an “inspection.”

conversations with the roofer,” “detailed drawings,” “shop drawings to handle

to a general quote, “plans and specifications” would include “detailed with New Hampshire environmental laws. Kramer also testified that in addition material contained asbestos and, if so, how it would be treated in compliance

precluded from raising this issue on appeal.

for doing what was indisputably necessary.”

square feet of old roofing material would be disposed of, and whether the

they lack support in the record.

operate its business. Under the circumstances, BCF could hardly be faulted the case.” question for the trier of fact to determine from the facts and circumstances of breach of the lease occurred. “Whether conduct is a material breach is a each of the vents and pipes to be installed with the HVAC units, how the 84,000

indicate that BCF made an offer of proof at trial with respect to the evidence it objection to a ruling excluding evidence. The record, however, does not Id. BCF does not argue that the trial court’s requires a contemporaneous offer of proof in order to preserve for appeal an omitted). On appeal, we will not reverse the findings of the trial court unless

Barrows v. Boles, 141 N.H. 382, 388 (1996) (quotation and brackets continued to withhold permission for BCF to do what was necessary to properly

specifications regarding the work to be performed. Nonetheless, South Willow effort to comply with the lease – providing South Willow with detailed plans and BCF argues next that the trial court erred in finding that a material flashing would be installed, the details for preventing water leakage around 412, 413-14 (1989). the quote lacked specificity because it did not discuss, for example, how the general description” of the work the roofer intended to perform. He testified that See State v. Saulnier, 132 N.H.

offered by its commercial roofer. New Hampshire Rule of Evidence 103(b)(2) Next, BCF argues that the trial court erred in excluding expert testimony

performed in the roof replacement.” Thus, BCF argues that it “made every

trial, the Academy Roofing quote, like the other bids received, only provided “a

used, and generally [giving] ‘a pretty detailed report of the work’ to be bids as describing “the scope of work to be performed, the type of roof to be performed, in satisfaction of paragraph 15 of the lease. BCF characterizes the However, as the president of South Willow, Charles Kramer, testified at

2005 were detailed plans and specifications regarding the work to be BCF argues that the roofing bids it provided South Willow in October intended use.” p. 9 insufficient evidence to prove the property was not safe or unsuitable for its

“[a]lthough there was evidence the leaks were inconvenient, there was

cleaned up.” Based upon the record, we affirm the trial court’s finding that

areas where customers couldn’t get in there till we got it mopped and got it them with plastic,” “[b]ring out barrels to catch the drips,” and “tape off some trial that the leaks required employees to “move racks of clothing,” “[c]over 9

[which] lessened the number and severity of the leaks.” There was testimony at

objection, justified eviction.

order notes, “[o]ver the course of the next year various repairs were made . . . initially resulted in “severe and numerous leaks.” However, as the trial court’s use. When BCF undertook renovations to the property in 2003 the work

demolition and reconstruction of the roof, over South Willow’s express written

DALIANIS, DUGGAN, HICKS and CONBOY, JJ., concurred.

insufficient to prove the property was not safe or unsuitable for its intended

that the record supports the trial court’s finding that BCF’s unauthorized for the trial court to find a material breach of the lease. However, we conclude “received a . . . brand new roof with a fifteen year warranty,” it was erroneous

Finally, BCF argues that the trial court erred in finding the evidence

before serving notice and commencing an eviction action and because it findings lack support. Rather, it argues that because South Willow delayed