THE STATE OF NEW HAMPSHIRE
SUPREME COURT
In Case No. 2025-0172, Saher Abdel-Hadi v. ZJBV Properties, LLC, the court on August 26, 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 defendant, ZJBV Properties, LLC, appeals an order of the Superior Court (English, J.), issued following a bench trial and entering judgment in favor of the plaintiff, Saher Abdel-Hadi, on the plaintiff's breach of contract claim. We reverse in part, vacate in part, and remand. The following facts are taken from the trial court's order or recite the contents of documents in the record before us. On November 22, 2022, the parties entered into an agreement whereby the plaintiff would lease the defendant's commercial building located in Hampton Falls ("Lease"). The plaintiff testified that the building had two floors, each about 5,000 square feet. The Lease required the plaintiff to make monthly rental payments of $11,000 over a sixty-month term commencing December 1, 2022. The Lease also required the plaintiff to pay the first and last months' rent at the time of signing along with an $11,000 security deposit. The Lease provided that the plaintiff "may use the Premises for a Lounge or any other use permitted by law"
and that the plaintiff "shall have all City, State and Health permits required by law."
The Lease specified that the plaintiff "shall have the obligation to conduct any construction or remodeling (at [his] expense) that may be required to use the Premises as specified above and may construct such fixtures on the Premises (at [his] expense) that appropriately facilitate its use for such purposes." "Such construction shall be undertaken, and such fixtures may be erected only with the prior written consent of the [defendant] which shall not be unreasonably withheld." The Lease also required the plaintiff to maintain liability, worker's compensation, and property insurance and to deliver to the defendant a certificate of insurance before commencement of the Lease. The Lease also included the following provision:
If [the plaintiff] is unable to secure a permit to occupy the leased space for a lounge from the Town of Hampton Falls; and [the plaintiff] has exhausted all avenues and remedies allowed to him by law, [the plaintiff] shall be allowed to terminate this lease and
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will forfeit any and all rental payments made to the [defendant] for the leased property.
Prior to signing the Lease, the parties negotiated additional terms that included giving the plaintiff the option to extend the Lease, but the plaintiff never executed a document containing the additional terms. At the time the parties executed the Lease, the plaintiff paid the defendant $33,000 for the first and last months' rent along with the security deposit. The defendant provided the plaintiff with a key to the premises the next day, November 23, 2022. Both before and after the commencement of the Lease on December 1, the defendant's principal, Brian Thibeault, told the plaintiff that if he did not sign a document reflecting the additional terms the parties negotiated, Thibeault would lock the plaintiff out of the premises. Thibeault also asked the plaintiff to provide the required certificate of insurance and to place the utilities accounts into the plaintiff's name. The plaintiff did not comply, but the defendant did not lock the plaintiff out of the building.
There was a quantity of furniture on the main floor of the building when the plaintiff was shown the premises, and it remained after the commencement of the Lease. The furniture included several large tables, a sofa, a desk, and a large antique, among other items.
On December 9, 2022, the plaintiff, through counsel, sent the defendant a letter purporting to terminate the Lease. The letter noted that the plaintiff intended to use the property for a hookah lounge and asserted that the parties mutually understood that this was the plaintiff's intention. The letter indicated that the plaintiff met with the Hampton Falls building inspector who informed him that a hookah lounge was not a permitted use in the zone where the property is located. It alleged that the plaintiff "has been denied possession of the property since December 1 as you continue to store your personal property throughout the premises." It also asserted that because the plaintiff was unable "to obtain a permit to use the premises for a lounge and due to your ongoing breach by denying our client possession of the premises, I am declaring the lease to be terminated as of December 1, 2022." The letter did not acknowledge or attempt to demonstrate compliance with the plaintiff's obligation under the Lease to exhaust all "avenues and remedies" available by law before terminating the Lease. The letter demanded return of the $33,000 paid by the plaintiff. The defendant apparently did not meet the plaintiff's demand. On April 13, 2023, the defendant secured a new tenant for the premises.
On May 30, 2023, the plaintiff filed a complaint alleging breach of contract and seeking to recover $33,000. On June 23, 2023, the defendant filed a counterclaim against the plaintiff for breach of contract as a result of the plaintiff's alleged failure to pay rent from January 2023 to April 2023.
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On November 15, 2024, the trial court held a bench trial. On February 4, 2025, the court issued an order concluding that the defendant materially breached the lease "by refusing tenant possession." The court explained that while the plaintiff "was allowed some limited access to the property, that access was limited by the substantial property Defendant maintained on the premises." "More importantly, Plaintiff's possession was thwarted by Defendant's consistent assertion that Plaintiff could not occupy the premises and that Defendant intended to change the locks on December 1 if the document with additional terms was not signed by that time." The court ordered that the plaintiff "is entitled to the return of his $33,000" but did not explicitly rule on the defendant's counterclaim. The court denied the defendant's motion for reconsideration. This appeal followed. On appeal, the defendant argues that the trial court's finding that there was a material breach was not supported by the evidence. We agree.
"When reviewing a trial court's decision rendered after a trial on the merits, we will uphold the trial court's factual findings and rulings unless they lack evidentiary support or are legally erroneous." Gaucher v. Waterhouse,
175 N.H. 291, 295 (2022). "We do not decide whether we would have ruled differently than the trial court, but, rather, whether a reasonable person could have reached the same decision based upon the same evidence." Id. at 295-96.
"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 to the evidence." Id. at 296. "It is within the province of the trial court to accept or reject, in whole or in part, whatever evidence was presented." Id. "We review the trial court's application of the law to the facts de novo." Id.
"[A] breach of contract occurs when there is a failure without legal excuse to perform any promise which forms the whole or part of a contract." Keene Auto Body v. State Farm Mut. Auto Ins. Co., 175 N.H. 503, 511 (2022) (quotation omitted). "Whether a breach of contract is material is a question of fact, and we will uphold the trial court's findings of fact and rulings of law unless they lack evidentiary support or constitute a clear error of law." Found. for Seacoast Health v. Hosp. Corp. of America, 165 N.H. 168, 181 (2013). A breach is material if: (1) a party fails to perform a substantial part of the contract or one or more of its essential terms or conditions; (2) the breach substantially defeats the contract's purpose; or (3) the breach is such that upon a reasonable interpretation of the contract, the parties considered the breach as vital to the existence of the contract. Id. at 182. Although the absence of proof of damages is not dispositive of whether a breach is material, where a breach causes no damages or prejudice to the other party, it may be deemed to be immaterial. Id. A material breach excuses future performance. Gaucher, 175 N.H. at 296.
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The record does not support either of the trial court's bases for ruling that the defendant materially breached the Lease by denying possession to the plaintiff. First, the defendant's threats to change the locks did not deny possession to the plaintiff. On the day after the Lease was signed, the plaintiff had a key to the building. While it is true that the defendant threatened to change the locks, the defendant never followed through on its threat. Contrary to the trial court's ruling, a landlord's unrealized threat to bar entry does not amount to a denial of possession.
Nor was the defendant's storage of furniture in the leased premises a material breach of the Lease on the evidence before the trial court. The Lease was silent about the disposition of the furniture. The Lease required that the plaintiff obtain all necessary state and local approvals and the defendant's consent before fitting up the space for its use as a hookah lounge. There was no evidence that the plaintiff obtained any such approvals or the defendant's consent. Absent compliance with these terms in the Lease, the plaintiff could not take any meaningful steps toward putting the building to its intended use. The presence of furniture, then, did not interfere in any material way with the plaintiff's possession. Indeed, in his brief the plaintiff concedes, "Witness testimony demonstrates the space was usable and the furniture did not materially impede occupancy."
Under these circumstances, the record did not support the existence of a material breach by the defendant. Accordingly, we reverse the trial court's entry of judgment in favor of the plaintiff. To the extent that the trial court intended to rule on the defendant's counterclaim in its order, we vacate that ruling and remand for proceedings consistent with this order. Reversed in part; vacated in
part; and remanded.
DONOVAN, COUNTWAY, AND GOULD, JJ., concurred; MACDONALD, C.J., did not participate in the final vote.
Timothy A. Gudas, Clerk