New Hampshire Housing Finance Authority v. Pinewood Estates Condominium Association
169 N.H. 378
| N.H. | 2016Background
- Patricia Rugg purchased a Pinewood condominium unit; she died in 2011 and assessments went unpaid thereafter.
- Pinewood notified Rugg, her estate, and NHHFA (holder of the first mortgage) of past-due assessments and warned it would terminate common services after 30 days if unpaid; Pinewood later terminated water/sewer to the unit.
- NHHFA foreclosed on the mortgage, bought the unit at judicial foreclosure sale, and paid post-foreclosure assessments but refused to pay pre-foreclosure assessments claimed by Pinewood.
- Pinewood sought payment of pre-foreclosure assessments and refused to restore services until all assessments (pre- and post-foreclosure) were paid; it relied on the condominium declaration provisions.
- The superior court granted summary judgment to Pinewood, holding NHHFA liable for pre-foreclosure assessments under the declaration and allowing continued termination of services; awarded Pinewood attorney’s fees.
- On appeal, the Supreme Court held that the Condominium Act and foreclosure law extinguished Pinewood’s claim to pre-foreclosure assessments against the unit and required restoration of services once NHHFA paid post-foreclosure assessments; reversed award of attorney’s fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether NHHFA (post-foreclosure purchaser) must pay pre-foreclosure condominium assessments | NHHFA: foreclosure extinguished junior condominium claims; NHHFA takes title free and clear | Pinewood: declaration imposes unit-level liability for prior assessments on any acquiring owner; termination resolution is distinct from lien | Held: Pinewood’s claim was junior and extinguished by foreclosure under RSA 356-B:46 and RSA 479:26; NHHFA not liable for pre-foreclosure assessments against the unit |
| Whether Pinewood may refuse to restore common services to NHHFA until pre-foreclosure assessments are paid | NHHFA: "all assessments" means only those assessments that remain obligations of the current owner after foreclosure (post-foreclosure) | Pinewood: assessments inure to the unit (not owner); declaration requires payment of all past-due assessments to restore services | Held: Because pre-foreclosure claim was extinguished as against the unit, Pinewood must restore services once NHHFA paid post-foreclosure assessments |
| Whether a termination-of-services under RSA 356-B:46, IX can operate as an encumbrance that survives foreclosure | NHHFA: termination cannot circumvent statutory priority rules; it would be equivalent to a lien and is subject to the Act’s priority limits | Pinewood: termination resolution is a separate statutory right, not an encumbrance subject to priority rules | Held: Termination resolution cannot operate to create a superior, continuing encumbrance; it is subject to RSA 356-B:46 priority rules and hence extinguished if junior |
| Whether Pinewood was entitled to attorney’s fees as the prevailing party under RSA 356-B:15, II | Pinewood: it prevailed in superior court and enforced the declaration | NHHFA: on appeal it prevails; the superior-court award should be reversed | Held: Reversed; because NHHFA prevails on appeal, Pinewood is not the prevailing party for fee award purposes |
Key Cases Cited
- Libertarian Party of N.H. v. Sec’y of State, 158 N.H. 194 (2008) (standing standard)
- Prof. Fire Fighters of N.H. v. N.H. Local Gov’t Ctr., 163 N.H. 613 (2012) (de novo review for statutory interpretation)
- Olson v. Town of Grafton, 168 N.H. 563 (2016) (statutory interpretation and plain meaning)
- Sanborn v. 428 Lafayette, LLC, 168 N.H. 582 (2016) (statute controls over conflicting condominium instruments)
- Neumann v. Village of Winnipesaukee Timeshare Owners’ Assoc., 147 N.H. 111 (2001) (Condominium Act governs condominiums)
- Cadle Co. v. Dejadon, 153 N.H. 376 (2006) (foreclosure extinguishes lien but underlying debt survives)