Summary
The New Hampshire Supreme Court reviews disputes arising from the State’s lease of the Mount Sunapee ski area, including claims for breach of contract, estoppel, reformation, and inverse condemnation. The court holds that Sunapee retained standing to seek reformation despite assigning its lease to CNL because it retained a concrete interest in the leasehold and the litigation. The court also concludes that the lease provision requiring approval by the Governor and Executive Council is ambiguous and must be interpreted consistently with the statutory approval process for state-owned property.
Topics
Practice areas
Questions Presented
- Whether Sunapee retained standing to seek reformation of the lease after assigning its rights under the lease to CNL.
- Whether the lease provision requiring approval by the Governor and Executive Council was ambiguous and required the Governor to submit a proposed lease amendment to the Executive Council.
- Whether the lease created an express or implied right or guarantee of expansion beyond the existing leasehold.
- Whether Sunapee raised genuine issues of material fact on its boundary-related governmental-estoppel claim.
- Whether Sunapee raised genuine issues of material fact supporting reformation based on alleged misrepresentation or fraud concerning the leasehold boundaries.
- Whether the inverse-condemnation rulings should stand after reversal of summary judgment on the reformation claim.
- Whether attorney's fees should be addressed at that stage of the litigation.
Holdings
- Sunapee retained standing to pursue reformation because it contractually retained a sufficient concrete interest in the outcome of the claim, including its continuing subleasehold interest and related rights.
- The lease provision requiring approval of an amendment by the Governor and Executive Council was ambiguous, but it was properly interpreted to conform to RSA 4:40. Under that interpretation, the Governor was not required to submit a proposed lease amendment to the Executive Council when he did not approve it.
- The lease created no express or implied right or guarantee that Sunapee could expand the ski area beyond the existing leasehold.
- Summary judgment was improper on Sunapee's claim that State officials represented or concealed material facts concerning the northern and western leasehold boundaries.
- Summary judgment was improper on Sunapee's reformation claim because the alleged misrepresentation by the State's agent could support reformation without proof of mutual mistake, and the same disputed facts supporting estoppel also required trial on reformation.
- The summary-judgment ruling and partial dismissal of the inverse-condemnation claim had to be vacated because the reformation claim was reinstated and the lower court's partial-dismissal order was unclear.
Key quotations
“The underlying logic of this black letter law is simple: once a lessee has relinquished his interest and obligations in the leased premises, there is no practical way he can be harmed by a subsequent breach.” (at 788)
“We note, however, that we signal no general departure from our case law on governmental estoppel and limit our holding on this issue to the facts of this case.” (at 796)
“Ordinarily, the Government’s interference with contractual rights arising under a contract with the Government will give rise to a breach of contract action, rather than a taking claim.” (at 799)
Factual background
The State solicited proposals to lease and operate the Mount Sunapee ski area, and Sunapee's predecessor participated in the process. State officials allegedly represented that the northern and western boundaries of the leasehold would be coterminous with the state park boundaries, but the lease was signed without a metes-and-bounds description or boundary map. After the lease was signed, the State supplied a description leaving a buffer between the leasehold and park boundaries. Sunapee later sought an amendment to facilitate western expansion, purchased adjacent land in reliance on assurances concerning the expansion, and the Governor declined to submit the proposed amendment to the Executive Council.
Procedural history
Sunapee sued the State in 2007 concerning the boundaries of a Mount Sunapee ski-area lease and alleged promised expansion rights. The superior court dismissed the mandamus claim and part of the inverse-condemnation claim, later permitted an amended complaint adding reformation, and granted the State summary judgment on all claims. In an earlier appeal, the Supreme Court remanded for a factual determination concerning standing. On remand, the superior court found that Sunapee retained standing to pursue reformation and that the assignment's release did not bar Sunapee's claims. The Supreme Court affirmed the standing ruling, affirmed summary judgment on the contract, implied-covenant, and expansion-related estoppel theories, reversed summary judgment on the boundary-related estoppel and reformation claims, vacated the inverse-condemnation rulings, and remanded.
Remand instructions
Proceed with trial or further proceedings on the boundary-related equitable-estoppel and reformation claims. Reconsider the entire inverse-condemnation claim in light of the opinion and clarify the land and legal basis involved. Attorney's-fee consideration was premature and may be addressed later.