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Bar Journal - September 1, 2002

Lex Loci: A Survey of New Hampshire Supreme Court Decisions

By:
LEX LOCI:

 

Like a bull in a china shop, the most recent Claremont School decision, Claremont School District v. Governor, decided April 11, 2002, succeeded in reshaping and realigning in an unexpected way the lineup of the Justices of the "new" Court (since the advent of the recent Justices appointed by Governor Shaheen) as they have responded to this towering case. The majority opinion, upholding the Claremont position, was written by Justice Duggan, with whom Chief Justice Brock and Justice Broderick joined, leaving Justices Nadeau and Dalianis in the minority.

The issue before the Court was whether the State's obligation to provide a constitutionally adequate public education requires it to include standards of accountability in the educational system, and the majority concluded that "accountability is an essential component of the State's duty and that the existing statutory scheme has deficiencies that are inconsistent with the State's duty to provide a constitutionally adequate education." The key issue was whether the State had already met its responsibility by virtue of existing statutes, rules and regulations which had already been enacted, including RSA 193-E:2, which includes a definition of an adequate education. The majority's lengthy opinion carefully walked through each rule or statute proffered by the Attorney General's office to satisfy the accountability requirement and rejected each one, upholding the Claremont plaintiffs. Ominously, however, the Court majority concluded that, in the future, issues requiring factual development and determination were to be resolved in the superior court, not the Supreme Court.

The dissenters, Justices Nadeau and Dalianis, argued that the "time has come for the Supreme Court to conclude its jurisdiction over this appeal" and "[a]ccordingly the docket in this appeal should now be closed." The dissent was an opinion co-authored by the dissenting Justices who found that they were in basic disagreement with the position of the majority:

We believe that by deciding the State is required to set standards that when applied indicate whether the school districts are providing an adequate education and hold those school districts accountable, the majority moves unnecessarily into the province of the legislative and executive branches. While it certainly makes sense for the State to adopt 'standards of accountability,' in our view the court should not order or oversee such action. Nor should the court sit in continuous judgment over educational policy decisions made by the legislature and the Governor, which may very well be a consequence of today's decision.

In The Matter of Yannalfo, decided April 16, 2002, is the first major interpretation of an antenuptial agreement since the Court's leading case of MacFarlane v. Rich.1  Involved was an antenuptial agreement which was of narrow scope, i.e., it governed only the $70,000 down payment made by the husband toward the purchase of a jointly owned home which, by the agreement of the husband and wife, was to be returned to the respondent husband in the event of a divorce and the subsequent sale of the house. The agreement was drawn by the respondent husband's attorney and presented to the petitioner for signature "[a] day or so before the wedding." The respondent husband "told the petitioner that he would not marry her unless she executed the agreement." She signed the agreement the next day without obtaining the advice of an attorney. Interestingly, the petitioner testified that she felt that the agreement was fair at the time she executed it.

A three Justice majority of the Supreme Court, in an opinion written by Chief Justice Brock, overturned the family court's decision which had voided the agreement on the grounds that it (1) "raises the question of a subtle form of duress" and (2) because there were substantially changed circumstances from the time the agreement was executed.

The first issue was whether or not the agreement was entered into as a result of duress simply because "the agreement was presented to the wife the night before the wedding and there was a threat that the marriage would not take place." First, the Supreme Court "declined to presume that the wife had insufficient time to obtain legal advice based only on the fact she was given the agreement on the eve of the wedding." Next, the Court distinguished cases from other jurisdictions cited by the plaintiff petitioner wife and found that, without more, such as a failure to disclose assets, etc., "there was insufficient evidence to support the trial court's conclusion that the antenuptial agreement was executed under duress."

Turning to the issue whether the lower court's conclusion that the circumstances of the parties had substantially changed since the agreement was executed so as to make enforcement unconscionable, the court majority held that, under MacFarlane, to hold an antenuptial agreement invalid by reason of changed circumstances, the circumstances must be extreme and "so far beyond the contemplation of the parties when they entered the contract that its present application to a spouse would be so one-sided that its enforcement would be unconscionable." The court used as an example of unconscionability as being where enforcement of the agreement would result in one spouse "becoming a public charge." The court concluded that the respondent husband's long-time unemployment or underemployment, his failure in unwise business ventures, and his erratic change in behavior and the petitioner wife's parents' contributions to household expenses were not sufficient changes in circumstances as to be "beyond the contemplation of the parties when the agreement was executed."

Justice Dalianis concurred in part with the majority in finding that there was not sufficient change in circumstances, but would have remanded the case for further hearings on the issue of duress. This decision is a major restatement of a key MacFarlane holding and it should provide useful guidance to practitioners in the domestic relations field.

The seldom visited New Hampshire antitrust statute, RSA 356, was before the Court in Minuteman, LLC v. Microsoft Corporation, decided April 19, 2002.2  This case is an example of the proverbial flea taking on the elephant. The two plaintiffs were (1) a consumer who purchased a computer with the Windows 98 operating system from a dealer and (2) a corporation which purchased a Windows 98 operating system on a CD disc from a retailer, each of whom were required to enter into and then use a licensing agreement that had been included with the software. As such, the plaintiffs were considered to be "indirect users" in the lingo of the antitrust bar. They brought suit against the defendant Microsoft seeking treble damages under the New Hampshire statute, claiming that the defendant had acquired monopoly power causing the plaintiff "to incur damages by having to pay unfair and unconscionable prices for 'Windows 98' operating systems." A unanimous Supreme Court, speaking through Justice Dalianis, closely examined the provisions of RSA 356:11, which provides certain remedies to "any person injured or threatened with injury by monopolistic acts." The essential issue was whether the statute allowed indirect purchasers, such as the plaintiffs, to bring an antitrust claim under the New Hampshire statute.

The court turned to federal law for assistance in the interpretation of the provision and found a like counterpart to RSA 356:11 in the Clayton Act, 15 U.S.C.,  15(a). The Supreme Court, upon reviewing federal law, found that there was a "seminal case," Illinois Brick,3  on point, in which the United States Supreme Court had rejected the claims of indirect purchasers, "holding that the direct purchaser, 'and not others in the chain of manufacture or distribution, is the party injured in his business or property within the meaning'" of the Clayton Act.

The court adopted the Illinois Brick rule based on the wording of the New Hampshire statute although it acknowledged that several states since Illinois Brick had enacted legislation that expressly allows indirect purchasers to bring antitrust actions under state law. The court, deferring to the legislature, held that "[w]e...leave to it [the legislature] the task of deciding whether indirect purchasers should be expressly allowed to bring claims under the State's antitrust law."

A unanimous Supreme Court denied the Petition of Union Leader Corporation, decided April 16, 2002,4  for access to the agendas and minutes of all meetings of the superior court judges for the year 1987. The Union Leader petitioned the court for access to the records relying on Part I, Article 8 of the New Hampshire Constitution, which provides:

All power residing originally in, and being derived from, the people, all the magistrates and officers of government and their substitutes and agents, and at all times accountable to them. Government, therefore, should be open, accessible, accountable and responsive. To that end, the public's right of access to governmental proceedings and records shall not be unreasonable restricted.

The court, speaking unanimously through Justice Broderick, first noted that the constitutional provision cited "applies to court records and that the public is generally afforded unfettered access to them." The Attorney General took the position that the documents sought by the Union Leader had not been "filed in court in connection with a pending case" and, therefore, were not subject to disclosure. The Supreme Court agreed with this argument, stating that

the documents sought are not court records. Rather, they are records of meetings of superior court judges concerning internal management and operation of the court that do not directly relate or pertain to court proceedings or the superior court's adjudicatory functions. The petitioner would have us interpret Part I, Article 8 so broadly as to mandate public access to all records related to any superior court activity, including its nonadjudicatory activities. We find no case from this or any jurisdiction, nor does petitioner identify any, establishing that materials unrelated to the adjudicatory function of the courts have historically been open to public inspection or considered to be court records for purposes of public access.

The author finds this a somewhat surprising result in light of New Hampshire's traditional "right to know" and "public access" bent, although the court went out of its way to "underscore the critical and historic imperative for an open and accessible judiciary to ensure that court proceedings are fair and that the judicial process is public and accountable." In sum, as defined by the court: papers that are filed in connection with judicial proceeds are open to inspection, but not records relating to the superior court's adjudicatory function. Presumably, that would apply to all other New Hampshire courts as well.

Does the New Hampshire wiretapping and eavesdropping statute (RSA 570-A), which prohibits the interception of wire and oral communications, apply to that part of a telephone conversation that is transmitted between a base receiver and a cordless phone? The court answered that question in the affirmative in Karch v. BayBank FSB, decided April 12, 2002. This case involved a claim by an employee of the defendant bank that her personal telephone conversations with a co-worker had been illegally intercepted and used by the bank to terminate her employment.

In addition to that holding, the Court also held that the plaintiff former employee had a valid breach of a privacy claim against her co-employee because of the public disclosure of private facts gained by the unlawful intercept. The Court held that this action was akin to the "tort of intrusion" described in the Restatement of Torts,  652D. The Court adopted the Restatement provision and held that such a claim was actionable in New Hampshire. Furthermore, the Court held that the workmen's compensation law did not bar the plaintiff's invasion of privacy claim since it involved an intentional tort against a co-employee and was specifically not barred by the workmen's compensation law's exclusivity provision. RSA 281-A:8, I(b). The Court did note that the plaintiff's claim in this case against the bank itself was barred by the workmen's compensation law.

Some cases can be noted in passing. In Petition of Stacey Perkins, decided May 6, 2002,5  the Supreme Court made clear that a person who has a discrimination complaint under the jurisdiction of the New Hampshire Commission For Human Rights, forfeits his/her right to go to the Commission for relief if the petitioner has first filed an action based on the same grievance in any court. In Kersey's Case, decided May 6, 2002, a unanimous Supreme Court made clear that a respondent attorney's failure to comply with the Court's own order to turn over files to the Court's appointed referee was blatantly in contempt of the Court's order and the Court summarily ordered the respondent's suspension to continue and remanded the matter to the Professional Conduct Committee to undertake disbarment proceedings against him. Furthermore, the respondent was assessed all expenses of the Professional Conduct Committee from the beginning of the proceedings to the date of the Court's decision. The moral of this story is: "It's not nice to poke your finger in the Supreme Court's eye."

In Pierson v. Hubbard, decided June 10, 2002, the Court had before it a now infrequently encountered issue involving the tort of defamation: whether the oral statements of an individual, the elected town clerk and tax collector of a town were absolutely privileged and therefore not subject to liability. The alleged defamatory statements were made in the defendant's official capacity at a public meeting in the town. The Court noted that a trend had developed over the years to broaden the classification of absolutely privileged communication to include local legislative bodies, but held that the elected official's "functions were administrative and ministerial, not legislative. Therefore, [the town clerk's and tax collector's] comments were not absolutely privileged [and] she was not absolutely immune from suit."

The well-known perils of dining in a Chinese restaurant in New Hampshire6  were before the Court in Palmer v. Nan King Restaurant, Inc., decided May 7, 2002. Where are our health inspectors when we need them? The facts were enough to cause one to forever eschew eating Chinese food, at least here in New Hampshire. It seems that the plaintiff, while eating food purchased from the defendant's Chinese take-out restaurant, bit into a used "band-aid." The plaintiff immediately experienced "physical and mental revulsion," "extreme anxiety" and worried that she may have contracted an infectious disease, i.e., AIDS. She thereafter visited her doctor and her doctor found the plaintiff in a high state of anxiety. She was tested for both HIV and hepatitis infections. The tests were negative but the plaintiff's doctor described the plaintiff as "having anxiety and being emotionally distraught...." Significantly, the plaintiff made no additional claim that she suffered any physical injury.

The plaintiff brought suit alleging negligence, products liability and breach of warranty. The superior court threw out the suit since there was no evidence that the plaintiff had experienced any physical injury resulting from her anxiety, based on the well-established New Hampshire rule that damages for negligence where emotional injury was claimed were not actionable without some physical manifestation.7  The plaintiff made several arguments before the Supreme Court. She first argued that freedom from emotional distress (in her felicitous phrasing, "tranquility of mind") is a fundamental interest and, therefore, recovery from emotional distress should be available without physical manifestation. The Court refused to change the settled law in New Hampshire on that issue. Second, the plaintiff claimed that finding the used band-aid in her mouth actually constituted a physical impact. Thus, she argued, an emotional distress claim need not be predicated upon subsequent physical symptoms of her anxiety. The Supreme Court also turned a negative ear to that argument stating that "regardless of physical impact, in order to recover for emotional distress under a traditional negligence theory, the plaintiff must demonstrate physical symptoms of her distress." The plaintiff then argued that she had experienced physical symptoms related to emotional distress citing to the case of Kenney v. Wong Len8  where the defendant won recovery when she had eaten food in a Chinese restaurant containing a dead mouse. However, the Court, dicing a very fine distinction, pointed out that the plaintiff in Wong Len had been immediately sick and required the services of a physician. The Court was adamant that "recovery for mental angst, absent additional objectively verifiable physical symptoms, is inconsistent with our prior case law."

The plaintiff next advanced her claim that under her products liability claim, a physical manifestation requirement was not required. The Supreme Court again rejected that argument, ruling that "a products liability claim, based upon the negligence of the defendant," was subject to the principles of a negligence action and required evidence of physical manifestations to be actionable.

The plaintiff was the recipient of one small victory when the Supreme Court remanded to the superior court her claim for a breach of warranty action, pointing out that the superior court had failed to address that issue. The Supreme Court's unanimous opinion, in the author's opinion, demonstrates the unsoundness of the rule requiring physical injury manifestations. It is very hard to see why a woman finding a dead mouse in her mouth can recover when, in this modern world, an equally hideous thing can happen: a person finds a used band-aid in her food. The fear of AIDS is now so prevalent that finding a used band-aid in one's food in a restaurant would seem to the author to be at least as damaging and actionable as coming upon a dead mouse in one's mouth. In modern times, we have learned that mental illness can be as disabling as a physical ailment.

ENDNOTES

1. 132 N.H. 603 (1989).
2. The author's firm represented a party to the action and, therefore, the author's views may be colored.
3. Illinois Brick, 431 U.S. 720 (1977).
4. As of this writing, a motion to reconsider has been filed concerning this opinion.
5. The author's firm represented a party to the action and, therefore, the author's views may be colored.
6. See Kenney v. Wong Len, 81 N.H. 427 (1925), where the plaintiff, dining at the Chinese restaurant, found a dead mouse in her mouth.
7. Chiuchiolo v. New England & c. Tailors, 84 N.H. 329 (1930).
8. 81 N.H. 427 (1925).

 

The Author

Attorney Charles A. DeGrandpre is a director and treasurer in the firm of McLane, Graf, Raulerson & Middleton, P.A., Portsmouth, New Hampshire.

 

 

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