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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 ___________________________ Grafton No. 2011-318 LEBANON HANGAR ASSOCIATES, LTD. v. CITY OF LEBANON Argued: April 5, 2012 Opinion Issued: June 12, 2012 Opinion Modified: July 13, 2012 Schuster, Buttrey & Wing, P.A., of Lebanon (Barry C. Schuster and Eric G. Derry on the brief, and Mr. Schuster orally), for the plaintiff. Gardner Fulton & Waugh, P.L.L.C., of Lebanon (Adele M. Fulton on the brief and orally), for the defendant. LYNN, J. The plaintiff, Lebanon Hangar Associates, Ltd. (LHA), appeals the decision of the Superior Court (Vaughan, J.) vacating an arbitrator's decision that the plaintiff was not required to pay taxes under a lease agreement with the defendant, the City of Lebanon. We reverse and remand. I The arbitrator found, or the record supports, the following facts. LHA has leased property at the Lebanon Airport from the City, the owner of the

land, since 1991. Although the terms of the lease require LHA to pay "taxes . . . lawfully levied or assessed," between 1991 and the first half of 2006, the City did not tax LHA on the value of the land itself, limiting its assessment of taxes to the value of the buildings. In October 2006, the City assessed a tax upon the value of the land, thereby increasing the total valuation subject to taxation from $77,400 in 2005 to $360,400 in 2006. After unsuccessfully requesting an abatement from the City, LHA petitioned the superior court, pursuant to RSA 76:17 (2003), to rule that the leasehold is not taxable. LHA subsequently moved to amend its petition to add a claim that the City breached the lease by demanding the payment of taxes. In response, the City invoked an arbitration clause in the lease that states, "Any controversy arising out of or relating to this lease or the breach thereof shall be settled by arbitration." The City argued that "if there is a controversy about the lease itself, it must be settled through arbitration." Thereafter, the parties filed a stipulation with the court in October 2008 indicating that they had agreed to proceed to arbitration. The stipulation stated: "The City has . . . requested arbitration and the parties are currently arranging arbitration to address the controversies arising out [of] the Lease." It also stated: "[T]he parties shall undertake arbitration of the matters concerning the controversies arising out of the Lease." The parties then proceeded to arbitration. During the first stage of arbitration, LHA argued that the lease unambiguously forbids the City from assessing real estate taxes on the land. In support of its argument, LHA presented evidence that: (1) the City's attorney wrote a letter contemporaneously with the 1991 lease agreement stating that there would be "no real estate taxes on City owned land"; and (2) from 1991 to 2006, the City did not tax LHA on the leased land. The City presented contrary evidence on both points. To support its argument that the lease is an integrated agreement that requires LHA to pay taxes on the land, the City presented a copy of the written lease itself. To support its alternative argument that it should prevail even if the arbitrator disagreed with its first argument, the City also presented extrinsic evidence purporting to show that it had taxed LHA on the leased land since 1996, and that LHA paid the tax during that time. In April 2009, the arbitrator issued the first of two decisions, concluding that, while the written lease unambiguously allows the City to assess a tax upon the value of LHA's leased land, other evidence submitted by LHA could serve as the basis for reforming the lease based upon mutual mistake. At the next hearing, LHA asserted its reformation argument over the objections of the City, which contended that the arbitrator's authority was limited to deciding the meaning of the four corners of the lease agreement. After reviewing the evidence, the arbitrator issued a second, and final, decision in March 2010, concluding that LHA "is not and has not been obligated to pay real estate taxes

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to the City" under the lease. The arbitrator found, in particular, that the City did not tax LHA on the value of the land until 2006, when the dispute at issue first arose

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