Thomas M. Benoit & a. v. Joseph A. Cerasaro, Trustee of the Joseph A. Cerasaro Revocable Trust & a., 139 A.3d 1134

Background

In 1974 a developer recorded subdivision plans and a Declaration of Covenants for Profile Estates (70 lots + a 7-acre parcel designated “Common Land”), imposing easements/restrictions and creating a future homeowners association to maintain the Common Land.
The Declaration stated the covenants run with the land, inure to owners and the Association, and vest upon recordation; the developer retained title to Common Land until required to convey to the Association when 51% of lots were sold.
The developer failed to pay taxes; Common Land was sold at tax sale in 1979 to an adjacent lot owner (Gaumont), who later sold Lot 51 and the Common Land to the plaintiffs (Gaumont’s buyer) in 2001; plaintiffs paid taxes and sought to build on the Common Land in 2014 after obtaining a variance.
Plaintiffs sued seeking declaratory relief that the Declaration is unenforceable, quiet title by adverse possession, or alternatively that the homeowners must form the Association, purchase the Common Land at fair market value, and reimburse plaintiffs’ expenses.
Trial court granted summary judgment for defendants (lot owners), concluding the Declaration survived the tax sale, laches did not bar enforcement, and equitable relief sought by plaintiffs was denied; plaintiffs appealed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Did the 1979 tax sale extinguish the Declaration?	Tax sale extinguished covenants via tax-assessment theory; assessors failed to account for easements; or Association never formed so rights never vested.	Recorded Declaration vested covenants/easements on recordation and survive tax sale; assessors presumed to account for restrictions; owners may enforce absent Association.	The tax sale did not extinguish the Declaration; covenants vested on recordation and survive tax sale.
Did plaintiffs’ failure to redeem (RSA 80:32) extinguish defendants’ rights?	Plaintiffs argue default of redemption by Association extinguished defendants’ interests.	No interests were extinguished by tax sale, so redemption issue inapplicable; argument not raised below.	Not addressed on merits; court declined to consider novel argument raised on appeal.
Is enforcement barred by laches?	Defendants slept on rights for decades; never formed Association, never enforced covenants.	No prejudice or notice: plaintiffs did not develop or change Common Land in violation; defendants lacked awareness of misconduct until 2014.	Laches does not bar enforcement; delay was not shown to be unreasonable or prejudicial.
Should court award equitable relief (purchase/compensation to plaintiffs)?	Fairness requires Association purchase Common Land at fair market value and reimburse plaintiffs’ taxes/expenses.	Declaration requires developer/successor to bear maintenance until conveyance; plaintiffs bought with notice and paid taxes; their conduct undermines equitable relief.	Trial court acted within discretion to deny compensation; ordered conveyance to Association per Declaration and rejected plaintiff’s equitable claims.

Key Cases Cited

Gowen v. Swain, 90 N.H. 383 (1939) (tax sale ordinarily does not divest easements; assessors presumed to account for easements)
Marshall v. Burke, 162 N.H. 560 (2011) (tax sale does not extinguish vested prescriptive easements; valuation mistakes are remedied via abatement)
Buchholz v. Waterville Estates Assoc., 156 N.H. 172 (2007) (covenants running with the land survive tax sale)
Burke v. Pierro, 159 N.H. 504 (2009) (when prescriptive period had not run before a town acquired title, tax sale created a new title)
Appeal of Prof’l Fire Fighters of Hudson, 167 N.H. 46 (2014) (laches bars suit only when delay was unreasonable and prejudicial)
Village Green Condo. Ass’n v. Hodges, 167 N.H. 497 (2015) (trial court has broad discretion in applying laches)
Conant v. O’Meara, 167 N.H. 644 (2015) (review of equitable relief for unsustainable exercise of discretion)