PROPERTY LAW

Stacie Ayn Murphy Corcoran
2011 graduate of Suffolk University,
practicing in Mass. and NH

No. 2018-0172

July 30, 2019

Affirmed in part, Reversed in part, Vacated in part, and Remanded

  • Issue: Did the trial court err in ordering the City to reacquire title to a parcel of land and to transfer title to the plaintiffs.

The City conducted a sealed bidding process to sell a lot of land. After receiving the bids, the City reached out to several of the bidders to inquire about their intended use of the land and asked one of the bidders (“Toys”) but not the other (“Philbrooks”) whether they would accept a restrictive covenant as a condition of purchase, which they declined. The property was awarded to the Phillbrooks and the Toys brought suit. The trial court granted the Toys’ request for declaratory judgment and injunctive relief and ordered the City to reacquire the land and transfer title to the Toys. The trial court denied the Phillbrook’s motion for reconsideration and they appealed.

On the issue that the legal theories were not set forth in the Toys’ complaint, the Court found that because New Hampshire is a notice-pleading state, while the restrictive covenant was not expressly articulated in the complaint, the defendants had notice that the issue would be raised at trial because it was included as part of the motion for summary judgement. Reviewing the issue de novo, of whether the trial court erred in granting the Toys’ request for declaratory judgement and injunctive relief, the Court reviewed this case in the context of Irwin Marine. The Court found that the City had the authority to establish and conduct a sealed bidding procedure. Related to the Conditions of Sales, the Court found the City retained the right to reject any bidding it concluded would be in the best interest of the City. Additionally, the Court found the absence of an express declaration of “best interests” is not sufficient to show the City’s exercise of discretion was “arbitrary, capricious, unjust or illegal.”

Next, the Court disagreed with the trial court that the City could not revise the terms of sale to include a restrictive covenant. Citing Irwin Marine, the Court went on to say the city can amend as long as its done in “a fair and equal manner.” The Court found that not imposing the same restrictive covenant on the Phillbrooks was “outside the bounds of fairness.” Finally, the Court reviewed the equitable relief and vacated the award and remand to the trial court to determine a suitable remedy and the issue of award of attorney fees.

Donald F. Whittum Law Office, of Rochester (Donald F. Whittum on the memorandum of law) and Carl W. Potvin, of Rochester, orally for the plaintiffs. Andrea K. Mitrushi, deputy city attorney, of Rochester, by brief and orally for the defendants.