Echo Consulting Services, Inc. v. North Conway Bank
669 A.2d 227, 140 N.H. 566, 1995 N.H. LEXIS 192 (1995)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A landlord breaches the implied covenant of quiet enjoyment by substantially interfering with the tenant's beneficial use or enjoyment of the premises. This breach entitles the tenant to damages, even if the interference does not rise to the level of a constructive eviction that would require the tenant to vacate.
Facts:
- Echo Consulting Services, Inc. (Echo) leased a downstairs office space under a lease granting a 'common right of access thereto' and 'common use of the parking lot.'
- North Conway Bank (the bank) subsequently purchased the building, becoming Echo's landlord.
- Throughout 1987, the bank conducted extensive renovations on the main floor, which created significant noise, dirt, occasional power outages, and made the rear parking lot inaccessible.
- As a result, Echo's employees began using the main, street-level entrance for access to their downstairs office.
- On October 13, 1987, the bank changed the locks on the main entrance for security reasons, preventing Echo's employees from using that door after business hours.
- This left the rear door as Echo's only after-hours access, which Echo claimed was often obstructed and difficult to use.
Procedural Posture:
- Echo Consulting Services, Inc. sued its landlord, North Conway Bank, in the New Hampshire Superior Court (trial court).
- Echo asserted claims of constructive eviction, partial actual eviction, breach of the implied covenant of quiet enjoyment, and breach of the lease.
- After a bench trial, the Superior Court denied all of Echo's claims and entered judgment for the bank.
- Echo (as appellant) appealed the trial court's decision to the Supreme Court of New Hampshire.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a landlord's substantial interference with a tenant's beneficial use and enjoyment of the premises constitute a breach of the implied covenant of quiet enjoyment, even if the interference is not severe enough to amount to a constructive eviction?
Opinions:
Majority - Brock, C.J.
Yes. A landlord's substantial interference with a tenant's beneficial use and enjoyment of the premises can constitute a breach of the implied covenant of quiet enjoyment, entitling the tenant to damages even if the tenant does not vacate the property. The court rejected the antiquated common law view that the covenant only protects a tenant from being physically dispossessed. Modern legal principles recognize that a tenant's rights extend to the beneficial use and enjoyment of the property, and interference with that use can diminish the value of the leasehold. While affirming the trial court's denial of the partial actual eviction and constructive eviction claims, the court found the trial court applied an incorrect, overly narrow legal standard to the quiet enjoyment claim. The court therefore reversed that portion of the judgment and remanded for the trial court to determine whether the bank's renovation activities constituted a substantial interference with Echo's use of the premises under this modernized standard.
Analysis:
This decision significantly expands the scope of the covenant of quiet enjoyment in New Hampshire for commercial leases, moving beyond the traditional, narrow protection of mere physical possession. It modernizes state doctrine by recognizing that a tenant's rights include the beneficial use for which they contracted. By decoupling the breach of the covenant from the requirement to vacate (as required for constructive eviction), the case provides tenants with a more flexible remedy—damages—for landlord interferences that diminish the leasehold's value without forcing the tenant to abandon their business location.
