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NOTICE: This opinion is subject to motions for rehearing under Rule 22 as well as formal revision before publication in the New Hampshire Reports. Readers are requested to notify the Reporter, Supreme Court of New Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any editorial errors in order that corrections may be made before the opinion goes to press. Errors may be reported by E-mail at the following address: reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 a.m. on the morning of their release. The direct address of the court's home page is: http://www.courts.state.nh.us/supreme. THE SUPREME COURT OF NEW HAMPSHIRE ___________________________ Strafford No. 2008-011 SUZANNE ORR & a. v. DAVID A. GOODWIN & a. Argued: June 26, 2008 Opinion Issued: July 15, 2008 Shaines & McEachern, P.A., of Portsmouth (Laurie A. Lacoste on the brief and orally), for the plaintiffs. Boynton, Waldron, Doleac, Woodman & Scott, P.A., of Portsmouth (William G. Scott on the brief and orally), for the defendants. Devine, Millimet & Branch, P.A., of Manchester (Patrick C. McHugh and Matthew Johnson on the brief), for the New Hampshire Association of Realtors, as amicus curiae. GALWAY, J. The plaintiffs, Suzanne Orr and Nelson Bolstridge, appeal an order of the Superior Court (Houran, J.) granting summary judgment to the defendants, David A. Goodwin, Ann Goodwin, Aaron Goodwin and Kylie Goodwin. We affirm.

The parties do not dispute the relevant background facts. In October 2004, the parties executed a sales agreement in which the defendants agreed to purchase real and personal property in Madbury from the plaintiffs for $1,020,000. Upon execution of the agreement, the defendants paid a deposit of $10,000. The parties' sales agreement contained a clause titled "Liquidated Damages," which stated: "If the Buyer shall default in the performance of their [sic] obligation under this agreement, the amount of the deposit may, at the option of the Seller, become the property of the Seller as reasonable." In February 2005, an addendum was executed confirming that the defendants had paid an additional $15,000 as a deposit. The addendum also provided that the sale was to close by October 15, 2005. In October 2005, the defendants informed the plaintiffs that they were not able to sell their home and, therefore, could not afford to purchase the plaintiffs' property. The plaintiffs retained the $25,000 deposit and it appears that there was virtually no further contact between the parties until early 2007. Despite retaining the deposit, the plaintiffs instituted this suit in February 2007 to recover various damages, including carrying costs on the Madbury property and costs incurred in purchasing and carrying other property, as a result of the defendants' failure to consummate their agreement. The defendants moved for summary judgment, which the trial court granted. After their motion for reconsideration was denied, the plaintiffs filed this appeal. When we review a trial court's grant of summary judgment, we consider the affidavits and other evidence, and all inferences properly drawn from them, in the light most favorable to the non-moving party. Carter v. Concord Gen. Mut. Ins. Co., 155 N.H. 515, 517 (2007). If our review of the evidence does not reveal any genuine issue of material fact, and if the moving party is entitled to judgment as a matter of law, we will affirm the trial court's decision. Id. We review the trial court's application of the law to the facts de novo. Id. On appeal, the plaintiffs first contend that the trial court erred in concluding that the liquidated damages clause of the parties' contract was enforceable. Interpretation of the parties' written agreement is a question of law, which we review de novo. Czumak v. N.H. Div. of Developmental Servs., 155 N.H. 368, 373 (2007). 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. Id. According to the plaintiffs, the liquidated damages clause fails two of the three criteria for a valid liquidated damages provision and, therefore, cannot be enforced against them. Before a liquidated damages clause will be enforced,

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three conditions must be met: (1) the damages anticipated as a result of the breach are uncertain in amount or difficult to prove; (2) the parties intended to liquidate damages in advance; and (3) the amount agreed upon must be reasonable and not greatly disproportionate to the presumable loss or injury. Shallow Brook Assoc's v. Dube, 135 N.H. 40, 46 (1991). The plaintiffs concede that the damages were uncertain in amount. Accordingly, the first factor is met. As to the second factor, the plaintiffs contend that it was not their intention or belief that "their damages would be limited to the $25,000.00 deposit." The amount of damages, however, is not at issue in considering this factor. The relevant consideration is whether there is evidence that the parties intended to liquidate their damages in advance. Here, the contract contains a clause specifically titled "Liquidated Damages," which initially demonstrates an intent to liquidate damages. The plaintiffs contend, however, that because the clause does not use the term "liquidated damages" outside the title, it is insufficient to demonstrate an intent to provide for such damages. At oral argument, the plaintiffs also contended that the term "reasonable" as used in the clause applies to the term "property," and thus does not demonstrate an intent to define liquidated damages. We are not persuaded by either argument. Although the term "liquidated damages" appears only in the title, the language of the clause defines how damages are handled by delineating the rights of the sellers relative to the buyers' deposit in the event of default, a result that would not change had the term been repeated in the body of the clause. Further, to interpret the clause as suggested by the plaintiffs would allow them to retain the deposit as "reasonable property." The plaintiffs, however, do not indicate what the term "reasonable property" means. The interpretation advanced by the defendants, in contrast, regards the term "reasonable" as defining the liquidated damages referenced in the title. We believe the defendants' interpretation to be sounder and in line with the apparent intent of the clause. Given the title of the clause and the rights it defines, we conclude that the clause was intended to provide for liquidated damages and, therefore, that this provision evinces an intent by the parties to liquidate damages in advance. See id. Therefore, the second factor has been met. "The third prong of the test requires that the amount stipulated was a reasonable one, that is to say, not greatly disproportionate to the presumable loss or injury." Id. at 47 (quotation omitted). In determining whether the stipulated amount is reasonable, "[o]ur function on appeal is to determine whether a reasonable person could have arrived at the same determination as the trial court, based on the evidence, and we will not upset the trial court's finding as long as it is substantiated by the record and is not erroneous as a matter of law." Id. (quotation omitted). "Thus, it is not enough that we might

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have ruled differently had we been asked to decide this question in the first instance. Rather we must affirm the trial court's finding unless it is unsupported by the evidence." Id. While we have stated that the relevant consideration is whether the amount stipulated is not disproportionate to the presumable loss, we have also stated that it is proper to look at the actual damages suffered in determining whether the amount is reasonable. Id. at 47-48. Therefore, we have adopted a two-part test for assessing the reasonableness of the amount stipulated whereby we "first judge whether the provision was a reasonable estimate of difficult-to-ascertain damage at the time the parties agreed to it." Id. at 48 (quotation omitted). If it is a reasonable estimate, we must then conduct a retrospective appraisal of the liquidated damages provision, and if the actual damages turn out to be easily ascertainable, we must then consider whether the stipulated sum is unreasonable and grossly disproportionate to the actual damages from a breach. Id. at 48-49. If so, the liquidated damages provision will be deemed unenforceable as a penalty, and the aggrieved party will be awarded no more than the actual damages. Id. at 49. Thus, "even if the liquidated sum is reasonable in light of the anticipated or presumable loss, the provision will not be enforced if the actual loss to the party is minimal and easy to prove." Id. at 48; see also Restatement (Second) of Contracts

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