The defendants, CC Enterprises and its president, Christopher Currier, appeal from a Nashua District Court {Howorth, J.) order ruling that they violated the terms of their lease agreement by using the leased рremises to sell and rent sexually explicit videos, magazines and related novelties. The plaintiff, N.A.P.P. Realty Trust, cross-appeals, asserting the trial court erred in denying its requests for relief on alternative grounds. We vacate and remand.
On February 20, 1999, the parties entered into an agreement to lease a unit within a shopping center in Hudson. According to thе agreement, the unit was leased “for the purpose of operating a Video Multi-Media store and other related items.” In April 1999, the defendants opened a business known as “Vidеo Express of Hudson” (Video Express) on the premises. Video Express offers sexually explicit videos for sale and rent, as well as sexually explicit magazines and various sexuаl devices for sale. In the negotiations leading up to the agreement, the plaintiff did not expressly restrict the type of videos the defendants could rent and sell. The
Following an eviction hearing, the district court refrained from ruling on the plaintiffs claim that the defendants’ business is contrary to the law and ordinances of the Town of Hudson, noting that the issue would be resolved in a pending action brought against the defendants by the Town in superior court. The district court, however, did rule that bаsed “on the subjective judgment ... of third persons as well as the landlord’s principal,” the defendants’ business was “offensive” within the meaning of the agreement and ordered a writ of possession to issue. This appeal and cross-appeal followed.
On appeal, the defendants argue the trial court erred when it applied a subjective standard to determine whether their use of the premises was “offensive” as the term was used in the agreement. They also contend the trial court improperly interpreted a general clause of the lease as prohibiting a use specifically allowed in another clause.
“A lease is a form of contract that is construed in accordancе with the standard rules of contract interpretation.” Echo Consulting Services v. North Conway Bank,
In resolving the ambiguous terms of a contrаct, we apply different standards for different types of contracts. For example, the standard applied to interpreting much of the language of a promissory notе is
We recognize that “possible standards of [contract] interpretation fall into two categories: objective standards, which assign a mеaning to words according to external criteria; and subjective standards, which assign meaning according to the state of mind of one or more parties to the agreemеnt.” 11 S. WlLLISTON, CONTRACTS § 31:1, at 256 (4th ed. 1999). Objective standards include: the standard of reasonable expectation, which applies the meaning the party using an ambiguous term should reasonably have exрected it would convey to the other party; and the standard of reasonable understanding, which applies the meaning that the person to whom the ambiguous term is addressed would reasonably suppose it to have. See id. at 256-57. Subjective standards include: the mutual standard, which applies only the meaning that conforms to an intention common to both or all thе parties, and assigns this meaning even if it is contrary to the usage of all other persons; and the individual standard, which applies the meaning the person employing the term intended it to express, or the meaning the person receiving the communication understood the term to convey. See id. at 256.
Looking at the parties’ subjective intentions alone accоmplishes no more than restating their conflicting positions, and therefore cannot provide an appropriate standard for resolving the dispute in this case. Hencе, the trial court erred to the extent it applied a subjective standard to interpret the term “offensive.” The objective “expectation” and “understanding” standards are аppropriate because they place a reasonable person in the position of the parties, and interpret the disputed term according to what а reasonable person would expect it to mean under the circumstances. In determining the parties’ intentions under these standards, the court must give the disputed term the meaning “which the
In applying this objective standard, the court should consider the parties’ intent by examining the contract as a whole, the circumstances surrounding execution and the object intеnded by the agreement, keeping in mind our goal of giving effect to the intention of the parties. See Woodstock Soapstone,
The plaintiffs cross-appeal challenges the district court’s failure to rule that the plaintiff had “other good cause” to evict the defendants pursuant to RSA 540:2, II (e) (1997). RSA 540:2, II (e) provides that “[t]he lessor or owner of restricted property may terminate аny tenancy [with proper notice, for specified reasons including] [o]ther good cause.” Here, the plaintiffs property, however, is not “restricted property,” which under the statute generally means residential. See RSA 540:l-a, II (1997). Thus, RSA 540:2, II (e) is inapplicable to the case before us.
Finally, the plaintiff argues that the district court erred in failing to rule on the plaintiffs requested rulings that the lease incorporated the Hudson zoning ordinances and that, regardless of the validity of the applicable zoning ordinance, violation of the ordinance constituted a breach of the lease. First, we fail to discern how this theory was presented in the plaintiffs requested rulings. Moreover, even if this theory was presented, the district court correctly declined to rule on it, noting an action resolving whether the defendants’ business violates the Hudson zoning ordinances was then pending in the superior court. Cf. In re N.H.P.U.C. Statewide
Vacated and remanded.