SLANIA ENTERPRISES, INC.
APPLEDORE MEDICAL GROUP, INC.
Argued: November 16, 2017
C. Christie, of Durham, by brief and orally, for the
Peabody LLP, of Manchester (Kevin M. Fitzgerald on the brief
and orally), for the defendant.
plaintiff, Slania Enterprises, Inc. (Slania), appeals a
decision by the Superior Court (Howard, J.) granting
the motion of the defendant, Appledore Medical Group, Inc.
(Appledore), to dismiss as time-barred a petition to recover
damages stemming from an alleged breach of a commercial real
estate lease. We reverse in part, vacate in part, and remand.
trial court recited, or the plaintiff alleged, the following
facts. In October 2012, Slania, as the lessor, and Appledore,
as the lessee, entered into a commercial real estate lease
for an initial fixed term that ended on April 30, 2015.
However, Appledore never took possession of the premises.
paid rent due through January 2013, but then stopped doing
so. In March 2013, Appledore communicated to Slania that it
wished to terminate the lease. On April 12, 2013, Slania
notified Appledore that it was in default on its rental
payments. Appledore did not pay. On April 22, 2013, at the
expiration of the 10-day cure period, Slania notified
Appledore that, pursuant to Section 13.1(b) of the lease, it
was electing, as its remedy upon default, to "keep the
lease in effect and recover rent and other charges due [from
Appledore] less the amount [Slania] may recover by
re[-]letting the premises." Slania re-let the premises
from February 2015 through the end of the initial term of the
lease, April 2015, for a lesser monthly amount.
April 29, 2016, Slania filed a breach of contract action
against Appledore for $82, 527.87 in damages, which included
rent, late fees, and utility costs due from May 2013 through
April 2015. Appledore moved to dismiss, asserting that
because the lease was breached no later than April 22, 2013,
the claim was barred by the three-year statute of limitations
under RSA 508:4, I (2010). Slania objected, arguing that the
lease was an installment contract, and, therefore, the
statute of limitations did not bar a suit to recover payments
due within three years of the date the complaint was filed.
trial court granted Appledore's motion to dismiss, ruling
that, because "a real estate lease of the type involved
here is not an installment contract as that term is
contemplated in the statute of limitations context, "
the so-called "installment contract rule, " under
which the statute of limitations runs only against each
installment when it becomes due, did not apply. See
General Theraphysical, Inc. v. Dupuis, 118 N.H. 277, 279
(1978). Thus, the trial court concluded, the breach in this
case occurred "no later than April 22, 2013, the date
upon which Appledore's right to cure the claimed default
expired." The trial court also ruled that, even if the
installment contract rule could apply to a commercial real
estate lease, it did not apply to the parties' lease
because Appledore never took possession of the property.
addition, the trial court decided that, although the lease
"provided Slania with the choice to continue the Lease
and calculate damages in a certain manner as a
remedy to Appledore's breach[, ] . . .
Slania's unilateral choice of remedies cannot serve to
extend the time in which Appledore's initial breach
occurred." The trial court concluded that when Appledore
"failed to cure the default by April 22, 2013, the cause
of action had arisen for purposes of the statute of
limitations." The trial court denied Slania's motion
for reconsideration. This appeal followed.
reviewing the trial court's grant of a motion to dismiss,
our standard of review is whether the allegations in the
plaintiff's pleadings are reasonably susceptible of a
construction that would permit recovery. Plaisted v.
LaBrie, 165 N.H. 194, 195 (2013). We assume that the
plaintiff's pleadings are true and construe all
reasonable inferences in the light most favorable to the
plaintiff. Id. We then engage in a threshold inquiry
that tests the facts alleged by the plaintiff against the
applicable law, and if the allegations constitute a basis for
legal relief, we must hold that it was improper to grant the
motion to dismiss. Id.
first argues that the trial court erred when it decided that
commercial real estate leases cannot be installment contracts
for purposes of the installment contract rule. We agree with
Slania: a commercial real estate lease can be an installment
contract. An installment contract is "[a] contract
requiring or authorizing the delivery of goods in separate
lots, or payments in separate increments, to be separately
accepted." Black's Law Dictionary 395 (10th
ed. 2014). So too is a lease, in which a month's use of
the lessor's property is compensated by a monthly rent
payment. Thus, a commercial real estate lease that calls for
separate payments, separately accepted, is an installment
further argues that because a commercial real estate lease is
an installment contract, the installment contract rule
applies. Under New Hampshire law, "when an obligation is
to be paid in installments[, ] the statute of limitations
runs only against each installment as it becomes due even
though the creditor has the option to declare the whole sum
due on default of an installment, unless he exercises that
option." General Theraphysical, Inc., 118 N.H.
at 279. "In essence, " the installment contract
"rule treats each missed or otherwise deficient payment
as an independent breach of contract subject to its own
limitations period." Pierce v. Metropolitan Life
Ins. Co., 307 F.Supp.2d 325, 328-29 (D.N.H. 2004).
"Accordingly, a party bringing an action on an
installment contract can recover only for those payments
relating to periods for which the applicable statute of
limitations has not expired at the time plaintiff files
suit." Id. (quotation, brackets, and ellipsis
counters that the installment contract rule does not apply to
commercial real estate leases because a lease does not convey
a final possessory interest. Appledore cites no support for
this proposition. Nor have we found any. Indeed, we have
applied the installment contract rule to contracts for the
lease of goods, which similarly do not deliver a "final
possessory interest." See General Theraphysical,
Inc., 118 N.H. at 278-79. Moreover, courts in other
jurisdictions have ruled that the installment contract rule
can apply to real estate leases. See Lakeview Management,
Inc. v. Care Realty, LLC, Civil No. 07-cv-303-, 2010
WL 346811, at *2 (D.N.H. Jan. 22, 2010) (applying the
installment contract rule to a real estate lease and
observing that this court has not expressly excepted real
estate leases from that rule); Lindner v. Meadow Gold
Dairies, Inc., 515 F.Supp.2d 1141, 1151 (D. Haw. 2007)
(applying Hawaiian common law); Holiday Furniture Factory
Out. Corp. v. DOC, 852 So.2d 926, 928 (Fla. Dist. Ct.