215 A.3d 491
N.H.2019Background
- Three long-term commercial tenants at 150 Dow Street (HTA, McLean, At Comm) leased spaces with assigned parking; leases stated parking rights were subject to the lessor’s "reasonable rules and regulations."
- Leases contained an "applicable law" section giving the landlord (and only in certain respects the tenant) the option to choose forum: court or binding arbitration under the AAA rules when the landlord elected arbitration.
- New owner-defendants purchased the property in 2017 and issued parking rules requiring tags/stickers and monthly parking fees that had not previously been charged.
- Tenants sued in superior court seeking declaratory and injunctive relief; defendants filed AAA demands alleging tenants’ noncompliance and moved to dismiss or stay pending arbitration.
- Trial court denied the motions to dismiss/stay, and granted partial summary judgment declaring the defendants’ parking-fee rules unenforceable; defendants appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who decides arbitrability (court or arbitrator)? | Court should decide because the lease lacks "clear and unmistakable" delegation to an arbitrator. | Incorporation of AAA rules (which empower an arbitrator to rule on arbitrability) shows clear delegation to arbitrator. | Court: No clear-and-unmistakable delegation; court decides arbitrability. |
| Scope of arbitration clause — does it cover this dispute? | Arbitration right for landlord is limited to disputes about tenant default under the lease; parking-fee dispute is not an enforceable lease term, so not arbitrable. | Lease permits arbitration of "any dispute pertaining to this Lease," so parking-rule dispute falls within arbitration. | Court: Arbitration right is limited to defaults under the lease; the parking-fee dispute does not present a colorable contractual-default claim and is not arbitrable. |
| Whether court impermissibly considered merits when deciding arbitrability | Court may interpret contract to the extent necessary to decide arbitrability and whether a colorable contract interpretation exists. | Court exceeded role by delving into merits instead of accepting arbitration demand on its face. | Court: It was proper to interpret the lease to determine whether defendants’ claim presented a colorable contract interpretation for arbitration. |
| Effect of forum-choice language and AAA incorporation together | Tenants: forum-choice language plus absence of express delegation defeats presumption that AAA incorporation delegates arbitrability. | Defendants: AAA incorporation, even with some court-access provisions, still clearly delegates arbitrability. | Court: Forum-choice provisions matter; AAA reference alone (in leases that allow court or arbitration) is not sufficient to clearly delegate arbitrability. |
Key Cases Cited
- Cluff-Landry v. Roman Catholic Bishop of Manchester, 169 N.H. 670 (N.H. 2017) (standard for accepting complaint allegations).
- Aetna Life & Cas. Co. v. Martin, 134 N.H. 90 (N.H. 1991) (default rule: courts decide arbitrability absent clear delegation).
- Appeal of Police Comm’n of City of Rochester, 149 N.H. 528 (N.H. 2003) (parties may clearly delegate arbitrability to arbitrator).
- Appeal of Town of Durham, 149 N.H. 486 (N.H. 2003) (court determines arbitrability unless clear delegation in contract).
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (U.S. 2002) (distinguishing who decides threshold procedural questions).
- Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (U.S. 2019) (courts should not decide arbitrability when parties clearly and unmistakably delegate that question).
- N.A.P.P. Realty Trust v. CC Enterprises, 147 N.H. 137 (N.H. 2001) (contract interpretation principles apply to leases and arbitration provisions).
- Appeal of AFSCME Local 3657, 141 N.H. 291 (N.H. 1996) (court may interpret agreement to determine arbitrability and whether grievance is covered).