Court Opinion

ID: 8052152
Source: CourtListenerOpinion
Date Created: 2022-09-09 04:13:03.131992+00
Date Added: 2024-06-11T09:05:12.319785
License: Public Domain

HORTON, j.,
dissenting: The majority correctly distinguishes between a defect in the property and a defect in the title when determining whether the title is good and marketable. Thus, unbuildable grade, ledge problems, bad drainage, and building construction problems are not, by themselves, clouds on title. The mere existence of hazardous wastes and hazardous materials on a given property does not create a defect in title. When the State imposes a lien on the property, however, and does so effectively, the defect in the property becomes a defect in title. I submit that this is the case before us and that the majority wrongly reverses the trial court’s decision awarding contractual damages.
It is important to remember the contract term applicable to this case.
The seller has good and clear title to all property to be sold .... The property will be sold free and clear of all liens (recorded, unrecorded) and encumbrances at closing. If the Seller cannot clear property by and before closing, the full commission will be due and owing.
Fairly read, this clause states that if the closing fails by virtue of the existence of a lien, recorded or unrecorded, on the subject property, the plaintiff will receive the full commission due. This is the parties’ agreement, and we should honor it exactly. Thus, the only real issue before us is whether a lien exists on this property. It should also be noted that the majority’s basis of decision — marketability of title — is also determined by the existence or non-existence of a lien.
The buyer aborted the closing after his due diligence inspection of the property revealed pollution. Unfortunately, the record does not *82permit us to determine the existence or non-existence of a lien. There is-, however, a substantial risk that a lien does exist that would trigger the contractual provision and create a defect in title, or, at the minimum, an encumbrance on the title.
RSA 147-B:10-b, I (Supp. 1997) provides:
The department [of environmental services] shall have a lien upon the business revenues and all real and personal property of any person subject to liability under RSA 147-B:10,1 for all costs recoverable by the state pursuant to RSA 147-B:10, II.
(Emphasis added.)
In order for the lien to be “valid and effective” it must be recorded in the registry of deeds. RSA 147-B:10-b, II (Supp. 1997). It is clear that no lien has been recorded in the case before us. Thus, we must determine whether an unrecorded, inchoate lien exists. RSA 147-B:10-b, II creates a super priority for the lien (other than on residential property) when the lien is recorded. Since the lien is granted priority over all encumbrances existing at -the time of recording and thereafter, it arises at the time of pollution by hazardous waste or hazardous materials. Recording serves only to perfect the lien. The legislature has adopted this lien structure in other circumstances. See RSA ch. 447 (1991 & Supp. 1997).
Having found that a lien exists, we must determine whether the lien is applicable to this property in the hands of this buyer. First, is the property in question a “facility?” RSA 147-B.-2, III. The answer depends on whether the pollution is “hazardous waste or hazardous materials.” RSA 147-B:2, VII, VIII. If the property is a “facility,” the property would be burdened with a lien. By buying the property, the defendant would be strictly liable under RSA 147-B:10. Having discovered the pollution prior to purchase, the buyer gains no protection from RSA 147-B:10-a, II.
I cannot believe that we would deny the buyer the right to avoid his obligation to purchase under the facts of this case, if a lien exists. The majority remands for consideration of plaintiff’s claim of damages based on violation of good faith and fair dealing. I would remand to the trial court on a completely different basis. I would ask the trial court to determine whether the subject property’s acknowledged pollution created a statutory lien on the property that existed at the time of closing, and whether the defendant would then have *83become strictly liable. If both determinations are in the affirmative, the trial court’s judgment for the plaintiff is appropriate.
THAYER, J., joins in the dissent.