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Mary Evans v. J Four Realty

February 13, 2013


The opinion of the court was delivered by: Dalianis, C.J.

1st Circuit - Lancaster District Division

Argued: January 16, 2013

The respondent, J Four Realty, LLC (J Four), appeals an order of the 1st Circuit Court - Lancaster District Division (Patten, J.) finding that it violated RSA 540-A:2 and :3, II (2007) by using self-help to evict the petitioner, Mary Evans, and awarding her actual damages of $3,000 and attorney's fees and costs, see RSA 540-A:4, IX(a) (Supp. 2012). We affirm in part, reverse in part, and remand.

The trial court found, or the record supports, the following facts. The petitioner lived for approximately five years in an apartment with two bedrooms, a kitchen, a living room, and one bathroom, which was part of a resort called "Naturally New Hampshire Healthfully Yours Resort, Inc." The petitioner's apartment was adjacent to the resort's office and was not part of the hotel portion of the resort. The petitioner did not have a written lease; she resided in the apartment as a tenant at will pursuant to an informal agreement with the resort's prior owner.

The respondent became the owner of the resort property on January 9, 2008, having purchased it at a foreclosure sale in late 2007. Because she was unaware of the foreclosure, the petitioner continued to pay rent to the prior owner of the resort.

On August 3, 2008, the respondent dispatched its agent to the petitioner's apartment to evict her. The agent arrived at the petitioner's residence with a deputy sheriff and a town police officer and told her that she had to leave her apartment with all of her property by the end of the day. The petitioner complied with the agent's demand.

The petitioner brought a petition against the respondent under RSA chapter 540-A, alleging that the respondent's conduct violated RSA 540-A:2 and :3, II and seeking damages under RSA 540-A:4, IX(a). Following an evidentiary hearing, the trial court ruled in her favor, and this appeal followed.

"We review the trial court's legal rulings de novo, but defer to its findings of fact if supported by the record." O'Hearne v. McClammer, 163 N.H. 430, 436 (2012) (quotation omitted).

The respondent first argues that the trial court erroneously determined that it was a "landlord" within the meaning of RSA chapter 540-A. Resolving this issue requires that we interpret the pertinent statutory provisions. We review the trial court's statutory interpretation de novo. Town of Atkinson v. Malborn Realty Trust, 164 N.H. 62, 67 (2012). We are the final arbiter of the intent of the legislature as expressed in the words of the statute considered as a whole. Id. When examining the language of the statute, we ascribe the plain and ordinary meaning to the words used. Id. We interpret legislative intent from the statute as written and will not consider what the legislature might have said or add language that the legislature did not see fit to include. Id. We also interpret a statute in the context of the overall statutory scheme and not in isolation. Id.

RSA 540-A:1, I (2007) defines a "[l]andlord" as "an owner, lessor or agent thereof who rents or leases residential premises including manufactured housing or space in a manufactured housing park to another person."

(Emphases added.) The respondent contends that it does not meet this definition because, while it owned the premises, it neither rented nor leased the petitioner's apartment to her. Thus, the respondent reasons, under the plain meaning of RSA 540-A:1, I, it is not a "landlord."

The petitioner raises three arguments in response. First, relying upon Texas law, the petitioner argues that she and the respondent created a new landlord/tenant relationship by implication. See Twelve Oaks Tower I v. Premier Allergy, 938 S.W.2d 102, 110 (Tex. App. 1996) ("parties' post- foreclosure conduct, including continued possession of the premises and payment and acceptance of rent payments with full knowledge of foreclosure, created a new lease"). Under Texas law, "[w]hen a landlord-mortgagor is foreclosed upon, the general rule is that a tenant's lease is terminated." Aspenwood Apartment Corp. v. Coinmach, Inc., 349 S.W.3d 621, 631 (Tex. App. 2011), review granted, (Tex. 2012). When this occurs, the tenant and the purchaser at a foreclosure sale may "independently enter into a new landlord- tenant relationship." Id. For such a new relationship to be found to exist, "both parties must manifest consent to enter into a new lease." Id. A tenant's mere continuation in possession does not, without more, establish a new landlord/tenant relationship. See id. By contrast, a "landlord's either demanding rent or accepting it constitutes an election to create a tenancy relationship." Id. at 632.

Thus, in Twelve Oaks, a new landlord/tenant relationship arose by implication when, after learning that the Federal Deposit Insurance Corporation (FDIC) had foreclosed upon the property, the tenant continued to occupy the premises and pay rent to the FDIC, which accepted it. Twelve Oaks, 938 S.W.2d at 110. In ICM Mortgage Corp. v. Jacob, 902 S.W.2d 527 (Tex. App. 1994), however, although the tenant "clearly manifested her desire to lease the property after foreclosure," the mortgagee, "through its repeated refusals to accept rent" from her, "revealed only unwavering disinterest in leasing the house to [her]." Jacob, 902 S.W.2d at 533. Although the mortgagee instructed the tenant to "sit tight" until it obtained clear title to the property, this was "insufficient as a matter of law to give rise to a new lease." Id. (quotation omitted).

In this case, the petitioner concedes that she never paid rent to the respondent and was never "specifically aware that [the respondent] owned her apartment." She was not even aware of the foreclosure until the day she was evicted. Nor is there any evidence that the respondent ever demanded that the petitioner pay rent. Although the respondent did not attempt to remove the petitioner for eight months after becoming the owner of the premises, during that entire time, the petitioner paid rent to the prior owner. Under these circumstances, assuming, without deciding, that our law is consistent with Texas law on this point, the ...

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