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The State of New Hampshire THE STATE OF NEW HAMPSHIRE SUPREME COURT In Case No. 2014-0536, Bellevue Properties, Inc. v. Settlers’ Tennis, Inc. & a., the court on July 26, 2016, issued the following order: Having considered the briefs and oral arguments of the parties, the court concludes that a formal written opinion is unnecessary in this case. The plaintiff, Bellevue Properties, Inc. (Bellevue), appeals, and defendant New Hampshire Department of Transportation (the State) and defendants, Settlers’ Tennis, Inc., Settlers’ R1, Inc., and 13 Green Street Properties, LLC (collectively referred to in this order as Settlers), cross-appeal, orders of the Superior Court (Smukler, J.) related to Bellevue’s right to access and use a swimming pool and tennis courts located on property owned by Settlers. We affirm. I. Background The parties own property in “Settlers’ Green,” a mixed-use development that includes retail space, apartments that were once condominiums, the North Conway Grand Hotel, and the “Tennis Green Lot,” on which there is an outdoor swimming pool and six tennis courts (four concrete and two clay). For ease of reference we refer to the swimming pool and tennis courts as “the Tennis Green Lot amenities.” The Tennis Green Lot, which Settlers owns, is across the street from the “Hotel Property,” which Bellevue has owned since 1999. The Hotel Property comprises two lots, one on which the hotel is located and the other on which hotel parking is located. According to Bellevue, and not apparently disputed by Settlers or the State, the hotel currently has 150 rooms and 50 privately-owned suites. There are three swimming pools on the Hotel Property: an indoor pool and two outdoor pools (the Hotel Property amenities). The State owns lots that we refer to as the “Condominium Property.” In 1996, after the original developer of the Condominium Property had lost it to foreclosure, the State took the Condominium Property by eminent domain in order to build the North-South Road and the Conway Bypass. When the State took the property, only 42 of a planned 168 condominiums had been built. The State demolished 28 of the 42 condominiums and has since leased the remaining 14 residential units as apartments. Thus, Settlers’ Green currently has no condominium units. For the past several years, the parties have disputed Bellevue’s right to access and use the Tennis Green Lot amenities. In 2010, the trial court determined that the parties had abandoned the claimed contract that established Bellevue’s alleged right to use those amenities. As a result, the trial court equitably distributed the recreational amenities at Settlers’ Green, awarding Settlers the Tennis Green Lot amenities and awarding Bellevue the Hotel Property amenities. In 2011, we reversed that decision in an unpublished order. We held that, to the extent that the trial court treated certain documents in the chain of title as “simple contracts instead of as documents creating a servitude, [it] erred.” We ruled that those documents reserved to Bellevue “a property right in the nature of an easement, for the use of and access to the Tennis Green Lot by the owner of the Hotel Property.” We also concluded that the deeds of record demonstrated that this property right was conveyed to Bellevue’s predecessors-in-interest. We remanded the case to the trial court “to consider whether Bellevue’s easement-like property right was abandoned or otherwise extinguished.” On remand, in an April 2012 order, the trial court denied summary judgment to Bellevue and granted summary judgment to Settlers on Settlers’ claim that Bellevue’s easement should be extinguished under the impossibility of purpose doctrine. In that order, the trial court also granted Bellevue’s motion for an evidentiary hearing on damages. Before the evidentiary hearing occurred, the court decided that cumulative evidence could not be introduced at the hearing, but that the court would, instead, take judicial notice of the prior record established in the 2010 proceedings. The court also denied most of the numerous motions in limine filed by the parties in advance of the damages hearing. The damages hearing was held in May 2014. In a June 2014 order, the trial court awarded damages to Bellevue based upon the difference in value of the Hotel Property both with the easement to use and access the Tennis Green Lot amenities and without it. Based upon Bellevue’s “limited” evidence relevant to that measure, the trial court awarded Bellevue $44,000 in damages to compensate for the loss of its easement-like right. The instant appeal and cross-appeals concern the trial court proceedings on remand. Specifically, Bellevue appeals the trial court’s order on summary judgment, the damage award, certain of the trial court’s evidentiary decisions during the damages hearing, and its denial of Bellevue’s request for attorney’s fees. The State and Settlers have both filed cross-appeals challenging the trial court’s decision to award any damages to Bellevue. 2 II. Analysis A. Termination of Bellevue’s Easement In its ruling on the parties’ cross-motions for summary judgment, the trial court determined that Bellevue’s easement “must be terminated” pursuant to the “impossibility of purpose” doctrine. See Restatement (Third) of Property (Servitudes) § 7.10 (2000) (setting forth the impossibility of purpose doctrine); see also Boissy v. Chevion, 162 N.H. 388, 393 (2011) (adopting the doctrine). Under the impossibility of purpose doctrine, “[w]hen a change has taken place since the creation of a servitude that makes it impossible as a practical matter to accomplish the purpose for which the servitude was created,” and modification of the servitude “is not practicable, or would not be effective, a court may terminate the servitude.” Restatement (Third) of Property (Servitudes), supra § 7.10(1), at 394. The impossibility of purpose doctrine is “designed to eliminate meaningless burdens on land and is based on the notion that parties that create an easement for a specific purpose intend the servitude to expire upon cessation of that purpose.” Boissy, 162 N.H. at 394 (quotation omitted). Inquiry in an impossibility of purpose case “begins with determining the particular purpose of the easement in question.” Id. (quotation omitted). “A provision in the easement instrument often indicates the parties’ intent in this regard. When an easement purpose provision is ambiguous, courts examine the surrounding circumstances to ascertain the parties’ intent and tend to favor the grantee with a broad interpretation.” J.W. Bruce & J.W. Ely, Jr., The Law of Easements and Licenses in Land § 10:8, at 10-17 to 10-18 (2011). “Next, one must decide whether the contemplated purpose still exists. If not, the easement is considered to have expired.” Boissy, 162 N.H. at 394 (quotation omitted). Examining a 1987 declaration executed by the original developer (the 1987 Declaration), and a 1986 “AMENITY AGREEMENT” between the original developer and the entity to which the original developer conveyed the Condominium Property (the 1986 Amenity Agreement), the trial court determined that “the purpose of the easement was to create an equally-shared property right to access the amenities on the Tennis Green Lot while simultaneously assigning equal obligations to maintain the same.” The trial court found that underlying this purpose was the expectation that “[t]he condominium owners . [would] be roughly equivalent to the hotel occupants in number and desired use.” However, the court found, “the condominiums never reached the expected size envisioned by the creators of the rights and obligations tied to the recreation amenities,” because of “the economic downturn in the 1990s and the State’s taking by eminent domain.” Thus, the court concluded, “[w]ithout nearly the same number of condominium units and hotel rooms, it is impossible” for the Hotel Property owner (Bellevue) and the 3 now non-existent condominium owners “to take on equivalent use of the amenities and equivalent maintenance.” Accordingly, because “[a]t this juncture, the only party that the easement serves is Bellevue,” and because “[t]hat was never the intention of those who set out to create the property rights and obligations for the development’s occupants,” the trial court ruled that Bellevue’s easement “must be terminated” under the impossibility of purpose doctrine. We review the trial court’s rulings on cross-motions for summary judgment under the following standard: “[W]e 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, we determine whether the moving party is entitled to judgment as a matter of law.” Conant v. O’Meara, 167 N.H. 644, 648 (2015) (quotation omitted). “If our review of that evidence discloses no genuine issue of material fact and if the moving party is entitled to judgment as a matter of law, then we will affirm the grant of summary judgment.” Id. (quotation omitted). “We review the trial court’s application of the law to the facts de novo.” Id. (quotation omitted). Although we apply our traditional summary judgment standard of review to the legal issues and to the determination of whether a genuine issue of material fact exists, we review the trial court’s decision to grant equitable relief — in the form of extinguishing Bellevue’s easement under the impossibility of purpose doctrine — for an unsustainable exercise of discretion. See id. at 648-49; see also CVA v. CLCA, 934 A.2d 669, 677 (N.J. Super. Ct. App. Div. 2007) (noting that a trial court “has a reservoir of equitable power to modify or terminate a servitude should changes occur in the future which would make it impossible as a practical matter to accomplish the purpose for which the easement was created”).
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