Com. Park Condo. Ass'n v. Little Deer Valley

320 A.3d 638

2024 N.H. 16

COMMERCE PARK CONDOMINIUM ASSOCIATION

v.LITTLE DEER VALLEY, LLC

Case No. 2023-0170

Supreme Court of New Hampshire.

Argued: January 18, 2024

Opinion Issued: April 4, 2024

Rockingham

Ducharme Law, P.L.L.C., of Stratham (Robert E. Ducharme on the brief and orally), for the plaintiff.

Orr & Reno, P.A., of Concord (James F. Laboe and Meredith Farrell Goldstein on the brief, and Meredith Farrell Goldstein orally), for the defendant.

DONOVAN, J.

[¶1] The defendant, Little Deer Valley, LLC (declarant), appeals a decision from the Superior Court (St. Hilaire, J.) denying its motion for summary judgment and granting the plaintiff’s, Commerce Park Condominium Association’s (Association), cross-motion for summary judgment. The declarant argues that the trial court erred by ruling that: (1) New Hampshire’s Condominium Act, RSA ch. 356-B (2022), requires physical construction for conversion; (2) the Condominium Act required the declarant to engage in substantial construction within the specified five-year or ten-year time period in order to convert the convertible land, see RSA 356-B:23, III; (3) the declarant’s recordation of an amended declaration and related plans in April 2010 failed to convert convertible land; and (4) the declarant’s construction of a new structure, Building C, would violate RSA 356-B:23, III and the overall purpose of the Condominium Act. We conclude that to convert convertible land, the Condominium Act required the declarant to file "appropriate instruments" within the five-to ten-year statutory deadline but did not require the declarant to physically construct Building C. RSA 356-B:23; see RSA 356-B:20. We also conclude that the declarant properly converted the convertible land when it filed the amended declaration and new site plan in 2010. See RSA 356-B:23, :20. Accordingly, we reverse.

I. Facts

[¶2] The following facts are taken from the trial court’s order or are otherwise supported by the record. In May 2005, the declarant recorded a declaration of condominium (declaration) establishing Commerce Park Condominium. The declaration provided that Commerce Park Condominium would comprise three multi-unit buildings: Building A, Building B, and Building C. The declaration reserved the declarant’s right "for a period of five years from the date of recording of this Declaration … to create and build an additional building, designated as Building C," on convertible land as delineated and set forth in the corresponding site plans. See RSA 356-B:16, II (permitting a condominium developer to designate convertible land); RSA 356-B:23, III (requiring conversions to occur within five years from the recordation of the declaration unless an amendment is filed).

[¶3] In April 2010, shortly before the five-year deadline, the declarant recorded an amendment to the declaration stating that the declarant "by execution and recording of this Third Amendment hereby exercises this right and option to convert the convertible land into" Building C. At the same time, the declarant also recorded a new site plan. The parties agree that the declarant did not file with the amendment, nor has it subsequently filed, floor plans for Building C. The declarant maintains that recording the amendment and the new site plan converted the convertible land pursuant to RSA 356-B:23, I, and that it was not required to file floor plans for Building C to convert the land. The Association contends that pursuant to RSA 356-B:23, III, the amendment extended the declarant’s right to convert for another five years, until May 2015, but did not actually convert the land.

[¶4] In April 2019, fourteen years after the original declaration was recorded, the declarant applied for a building permit to construct Building C. Thereafter, the Association voted to oppose the construction because, in its view, the declarant’s right to construct Building C had expired. Subsequently, the Association filed a petition in superior court for temporary and permanent injunctive relief to enforce the condominium declaration and bylaws. In May 2021, the superior court granted the Association’s request for a preliminary injunction as to the construction of Building C.

[¶5] In June 2022, the declarant moved for summary judgment. The declarant argued that, when it recorded the amendment to the declaration in April 2010, it converted the land intended for Building C before the five-year statutory deadline, and, therefore, it was permitted to build Building C. See RSA 356-B:23, I, III. The Association objected to the declarant’s motion and filed a cross-motion for summary judgment. The Association argued that the April 2010 amendment extended the declarant’s right to convert for an additional five years but did not convert the land. See RSA 356-B:23, III. The Association argued that the Condominium Act required the declarant to physically construct Building C for conversion to occur, and because the declarant did not construct Building C by the conversion deadline, its right to build had expired. The Association also argued that the declarant’s failure to build Building C violated the terms of the declaration, in which the declarant reserved the right "for a period of five years from the date of recording" the declaration, "to create and build" Building C.

[¶6] In January 2023, the superior court denied the declarant’s motion for summary judgment and granted the Association’s cross-motion for summary judgment. The court ruled that pursuant to RSA chapter 356-B, construction is required for conversion, and because the declarant "did not engage in any substantial construction of Building C before the extended deadline of May 9, 2015, its right to do so expired at that time." The court reasoned that allowing the declarant "to rely on its 2010 amendment to begin meaningful construction of Building C in 2019, four years after the ten-year deadline," would "run afoul of RSA 356-B:23, III." Further, the court explained, adopting the declarant’s interpretation would violate "the wording and spirit of the ten-year maximum set forth in RSA 356-B:23, III" and contravene the Condominium Act’s purpose to "protect buyers and establish reasonable expectations among the parties." The trial court also concluded that the declarant’s "attempt to begin construction well after the May 9, 2015 deadline would be contrary to section 14-1 of the Declaration, which pro- vided five years from 2005 (later extended to ten years) ‘to create and build an additional building, designated as Building C….’ "

[¶7] The trial court ruled that: (1) any and all of the declarant’s right, title, and interest under the declaration and Association’s bylaws, including the right to convert land, expired in May 2015; and (2) the land previously designated as convertible land under the declaration is common area of the Association, owned by the unit owners of the Association, subject to the control of the Association, and free from any development or convertible land rights of the declarant or any entity other than the Association. The court enjoined the declarant and its successors in interest from: (1) attempting to convert any of the land to additional units; and (2) creating, conveying, mortgaging, selling, transferring, or encumbering any portion of the common area of the Association. The declarant filed a motion for reconsideration, which the court denied. This appeal followed.

II. Analysis

[1, 2] [¶8] On appeal, the parties dispute the correct interpretation of RSA 356-B:20 and RSA 356-B:23 and the requirements necessary to convert convertible land. When reviewing the trial court’s rulings on cross-motions for summary judgment, we consider the evidence in the light most favorable to each party in its capacity as the nonmoving party and, if no genuine issue of material fact exists, and if the moving party is entitled to judgment as a matter of law, we will grant summary judgment to the prevailing party. See Boyle v. City of Portsmouth, 172 N.H. 781, 785, 235 A.3d 985 (2020). We review the trial court’s application of the law to the facts de novo. Id.

[¶9] The parties’ arguments concern New Hampshire’s Condominium Act, set forth in RSA chapter 356-B, which governs all condominiums and condominium projects. RSA 356-B:l, :2; Ryan James Realty v. Villages at Chester Condo. Assoc., 153 N.H. 194, 196, 893 A.2d 661 (2006). The Condominium Act provides that a condominium is created by recording condominium instruments in the local registry of deeds. RSA 356-B:7, 11; Ryan James Realty, 153 N.H. at 196, 893 A.2d 661. The condominium instruments include a declaration of condominium, which defines the rights as among the condominium owners, the condominium association, and the developer. RSA 356-B:3, VI; Ryan James Realty, 153 N.H. at 196, 893 A.2d 661.

[¶10] Condominiums may include "convertible land." RSA 356-B:16, II; Condos. at Lilac Lane Unit Owners’ Ass’n v. Monument Garden, 170 N.H. 124, 130, 166 A.3d 221 (2017). " ‘Convertible land’ " is defined as "a building site which is a portion of the common area, within which additional units and/or a limited common area may be created in accordance with this chapter." RSA 356-B:3, X. "The declarant may convert all or any portion of any convertible land into one or more units or limited common areas, or both, subject to any restrictions and limitations which the condominium instruments may specify." RSA 356-B:23, I. "Any such conversion shall be deemed to have occurred at the time of the recordation of appropriate instruments pursuant to paragraph II [of RSA 356-B:23] and RSA 356-B:20, III." Id. Such "appropriate instruments" include an amendment to the declaration describing the conversion, floor plans, and site plans. RSA 356-B:23, I, II; RSA 356-B:20, III; see also Monument Garden, 170 N.H. at 130, 166 A.3d 221. The declarant has five years to convert the convertible land into units, unless a shorter time is specified in the declaration; however, "the...