THE STATE OF NEW HAMPSHIRE
SUPREME COURT
In Case No. 2025-0067, Brixmor GA Seacoast Shopping Center LLC v. NH1 Motorplex LLC & a., the court on March 19, 2026, issued the following order:
The court has reviewed the written arguments and the record submitted on appeal, and has determined to resolve the case by way of this order. See Sup. Ct. R. 20(3). The defendants, NH1 Motorplex, LLC (NH1) and Dan and Pamela Jennison (the Jennisons), appeal an order of the Superior Court (Will, J.) awarding damages to the plaintiff, Brixmor GA Seacoast Shopping Center, LLC, for breach of a commercial lease agreement. The defendants argue that the trial court erred by determining that the plaintiff is entitled to recover
"landlord work" and "tenant allowance" costs. We affirm. The following facts appear in the trial court's orders or are otherwise supported by the record. In December 2016, the parties entered into a ten- year lease agreement by which NH1 leased commercial premises in Seabrook (premises) from the plaintiff for the purpose of operating a go-karting business. The lease was secured by the Jennisons' personal guaranty. During the COVID-19 pandemic, NH1 temporarily closed its business for three months and later reopened with limited hours. In May 2021, following unsuccessful negotiations between the parties over the termination of the lease agreement, NH1 stopped paying rent and vacated the premises.
The plaintiff sued the defendants for breach of contract. In response, the defendants asserted numerous defenses and a counterclaim against the plaintiff. The plaintiff thereafter moved for summary judgment on the defendants' liability and affirmative defenses. The trial court granted the plaintiff's motion but deferred ruling on damages.
Following a subsequent hearing, the trial court issued an order finding the defendants liable for approximately $2.1 million in damages for breach of the lease agreement and guaranty. The trial court observed that although the plaintiff was unable to find a tenant to relet the entire premises, it nonetheless mitigated its damages by leasing the premises to two successor tenants, which required the plaintiff to divide the premises into two separate spaces and make additional alterations. The court ultimately determined that the plaintiff could recover "landlord work" and "tenant allowance" as damages despite the absence of those express terms in the lease agreement because they constituted costs to relet the premises. Accordingly, after considering the approximately $3 million in damages under the original lease agreement,
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together with reletting costs, rent from the successor tenants, damages after mitigation, and the amount not recovered under the successor tenants' leases, the court calculated a damages sum of $2,107,985.10. The defendants unsuccessfully moved for reconsideration, and this appeal followed. The issue on appeal is whether the trial court erred by determining that
"landlord work" and "tenant allowance" are recoverable damages under the lease agreement as part of the "costs of alterations" incurred by the plaintiff. Following a damages hearing, "[w]e will uphold the trial court's findings and rulings unless they lack evidentiary support or are legally erroneous." N.H. Fish & Game Dep't v. Bacon, 167 N.H. 591, 596 (2015). "Our standard of review is not whether we would rule differently than the trial court, but whether a reasonable person could have reached the same decision as the trial court based upon the same evidence." Id. "Thus, we defer to the trial court's judgment on such issues as resolving conflicts in the testimony, measuring the credibility of witnesses, and determining the weight to be given evidence." Id. We review the trial court's legal rulings and its application of law to fact de novo. See Bursey v. CFX Bank, 145 N.H. 126, 129 (2000).1
"The interpretation of a lease is ultimately a question of law." Tulley v. Sheldon, 159 N.H. 269, 272 (2009). "We review the trial court's interpretation of a lease de novo." Id. "A lease is a form of contract that is construed in accordance with the standard rules of contract interpretation." Id. "When interpreting a written agreement, we give the language used by the parties its reasonable meaning, considering the circumstances and the context in which the agreement was negotiated, and reading the document as a whole."
McDonough v. McDonough, 169 N.H. 537, 541 (2016). "We give an agreement the meaning intended by the parties when they wrote it." Id. "Absent ambiguity, however, the parties' intent will be determined from the plain meaning of the language used in the contract." Id.
Section 21.02 of the lease agreement, entitled "Landlord's Remedies,"
provides:
If an Event of Default occurs . . . Landlord may:
(a) . . . make such alterations and repairs as may be necessary in order to relet the Demised Premises . . . . Upon reletting, rentals received by Landlord from such reletting shall be applied first to the payment of any indebtedness other than Minimum Annual Rent due hereunder from Tenant; second to the
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payment of any costs and expenses of such reletting, including brokerage fees, reasonable attorneys' fees and costs of alterations and repairs; third to the payment of the most current Minimum Annual Rent owed at the time; and the residual, if any, shall be held by Landlord and applied in payment of future Minimum Annual Rent as the same may become due and payable hereunder from Tenant. If such rentals received from such reletting are less than that to be paid by Tenant, Tenant shall be liable for the deficiency to Landlord. . . .
(b) . . . [E]lect to terminate the Lease. Should Landlord elect to terminate the Lease then, in addition to any other remedies Landlord may have available to it, Landlord may recover from Tenant all damages incurred by reason of such breach. The trial court construed the setoff language in Section 21.02(a) as allowing the landlord to recover the deficiency between: (1) rent owed by the breaching tenant plus "costs and expenses of such reletting"; and (2) rents received from successor tenants. The parties do not argue that the costs and expenses of reletting are not recoverable under Section 21.02(a), nor do they dispute that the costs and expenses of reletting include "costs of alterations and repairs."
Rather, they maintain that by interpreting the term "costs of alterations"
in the lease agreement as including "landlord work" and "tenant allowance,"
the trial court interpreted the agreement subjectively and in a manner contrary to "the clear and unambiguous language of Section 21.02." The plaintiff responds that the trial court properly construed the phrase "costs of alterations and repairs" as including both categories of expenses. We agree with the plaintiff.
Section 21.02(b) of the lease agreement broadly allows for the landlord's recovery of "all damages incurred by reason of such breach." (Emphasis added.) In addition, Section 21.02(a) provides that, following a breach by the tenant, the tenant shall be liable to the landlord for any deficiency between
"rentals received from such reletting" and the rent "to be paid by Tenant."
Noting that the lease agreement does not define "costs of alterations," the trial court defined the word "alteration" according to its dictionary definition: "[a] substantial change to real estate, esp. to a structure, usu. not involving an addition to or removal of the exterior dimensions of a building's structural parts." Black's Law Dictionary 97 (12th ed. 2024). Thus, consistent with our principles of contract interpretation, the trial court interpreted the lease agreement according to the plain meaning of the words used when it relied upon the dictionary definition of the word "alteration." See McDonough, 169 N.H. at 541; Pope v. Lee, 152 N.H. 296, 301-02 (2005) (discerning plain meaning of contract term according to its dictionary definition).
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The court determined that the dictionary definition of "alteration"
accorded with the parties' understanding of the term "costs of alterations." It also found that the evidence at the damages hearing established that "costs of alterations" includes "landlord work" and "tenant allowance, costs absorbed by the plaintiff in its leases with the successor lessees." At the hearing, the plaintiff introduced evidence that both "landlord work" and "tenant allowance"
were "reasonable and necessary cost[s] incurred" by the plaintiff to relet the premises following NH1's breach. There was testimony that "landlord work"
and "tenant expenses" cover "improvements in the space, whether [they] be performed directly by the landlord or performed by the tenant and then reimbursed via tenant allowance." More specifically, an employee of the plaintiff testified that "tenant allowance is a dollar amount that is paid to a tenant in lieu of landlord performing work," whereas "[l]andlord work is work that's done directly by the landlord." The plaintiff also introduced evidence that, because it had to relet the premises to two tenants, it "had to subdivide this space, which was a driver to the cost[s] that were incurred both by landlord work and by tenant allowance." This evidence supports the conclusion that "landlord work" and "tenant allowance" are included within the terms "costs of alterations" and costs of reletting in the parties' agreement. The defendants nonetheless assert that "landlord work" and "tenant allowance" were incentives to attract tenants, rather than necessary costs to relet the premises. The trial court reasoned that "the plaintiff leases property in a competitive marketplace in which it must make accommodations that attract tenants" and that the testimony at the hearing "established . . . a steadfast refusal to consider [these accommodations] likely would have stymied mitigation altogether or at least delayed it significantly to the defendants' detriment."
The trial court's finding is supported by the record. At the hearing, the plaintiff introduced testimony that it "mitigated [its] damages in this case by finding replacement tenants" and that the plaintiff "incurred certain costs to get those tenants in place." An employee of the plaintiff testified that, for retail tenants, "landlord work" and "tenant allowance" represent "a market expectation that the landlord is going to assist in the improvements to the space needed." He testified that these two terms refer to costs incurred "to bring a tenant into a space." This testimony supported the plaintiff's representation that the costs to mitigate the damages from NH1's breach were
"necessary to alter the premises" and that the successor tenants would not have agreed to lease the property without the fit up of the premises. Indeed, NH1 was also afforded "tenant allowance," referred to as "construction allowance" in its lease agreement with the plaintiff, to convert the premises from a grocery store into a go-kart facility.
We conclude that the trial court did not apply a "subjective standard" in ruling that "costs of alterations and repairs" in Section 21.02(a) of the lease
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agreement includes "landlord work" and "tenant allowance," and the court's findings and rulings were not unsupported by the record or legally erroneous. See Bacon, 167 N.H. at 596. Given our conclusion, we need not address the defendants' argument that the trial court erred in its determination that, alternatively, the plaintiff could recover "landlord work" and "tenant allowance"
as consequential damages. Accordingly, we affirm the trial court's award of damages to the plaintiff.
Affirmed.
MACDONALD, C.J., and DONOVAN, COUNTWAY, and GOULD, JJ.,
concurred.
Timothy A. Gudas, Clerk