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Bar Journal - September 1, 2001

Lex Loci: A Survey of New Hampshire Supreme Court Decisions

By:

A cat has fewer lives than has the New Hampshire school funding matter. The cataclysmic melee in our state over school funding continued in a riveting decision rendered by the Supreme Court on May 3, 2001, Sirrell v. State of New Hampshire.1 For the first time in history, at least to the author's knowledge, oral arguments in the case were broadcast live by New Hampshire public radio. The author was able to listen to most of the arguments from his office, as did many New Hampshire citizens. One hopes that this practice will continue for cases of public interest.

Based upon the often unreliable questions asked during oral arguments, it was the author's opinion at that point that the Court would reverse Judge Galway's superior court decision which had overturned the statewide property tax enacted by the legislature in 1997 as an answer to the Court's earlier Claremont decisions. What surprised the author most was not the decision itself, but how closely divided the Court was: three justices (all newly appointed) were in the majority, and two (long term members of the Court) were in the minority.

The author finds this to be a curious decision, in view of its huge import. The three Court majority spoke "per curiam," no one of the judges taking authorship for the majority opinion, while the two dissenters submitted a joint dissent, something also quite unusual. It is one thing for one justice to write a dissent to be concurred in by another and a very different thing to file a joint dissent. Similarly, the same may be said for the majority opinion. Per curiam opinions were once a way a court which was divided on a decisional basis but unanimous as to verdict issued opinions without ascribing authorship to any particular justice.

The majority (Justices Nadeau, Dalianis and Duggan) were confronted with a difficult problem. They found it hard to disagree with Judge Galway's findings that the property tax administration in New Hampshire is uneven at its best and chaotic at its worst. The constitutional mandate of Part II, Article 6 requires a re-evaluation of property every five years and the plaintiffs clearly demonstrated that, for example, the city of Keene had not re-evaluated its property since 1971. Indeed, as the dissenters pointed out, over 80% of the State's total equalized property value had not been re-evaluated for over a decade, despite the constitutional requirement.

Nevertheless, the majority hinged its decision on the plaintiff taxpayers' failure to meet their burden of proof, promulgating a new standard in such situations:

We now hold that to establish a violation of the uniformity clause based upon the under-assessment of other taxpayers, a taxpayer must prove a systematic pattern of taxation that is not proportional and reasonable. To prevail, the taxpayer must prove specific facts showing a 'widespread scheme of intentional discrimination'....Isolated or inadvertent lack of uniformity will not suffice....Intentional discrimination may be proved with direct evidence, or indirectly with proof of inequality or lack of uniformity substantial enough that intent may be inferred.

Thus, to prevail upon their declaratory judgment petition, the plaintiffs were required to establish they were harmed by the practical operation of the statewide property tax. Because the plaintiffs did not claim their own assessments were based upon something other than market value, but instead claimed that other taxpayers were under-assessed, the harm the plaintiffs were required to show was widespread intentional discrimination. (emphasis added and citations omitted)

This is not to say, however, that the majority didn't find that in many ways the present property tax assessment system failed to provide equal and proportional taxation as required by Part II, Article 5 of the State Constitution. However, despite its "serious concerns as to whether it [the statewide property tax] is proportional and reasonable" "[w]hat the plaintiffs proved was that the taxing system is flawed. What they did not prove is that the flaws resulted in a systematic pattern of disproportionate taxation. Nor did the plaintiffs prove that the flaws produced such substantial inequality that the inequality must be deemed intentional."

The dissenters (Brock, C.J. and Broderick, J.) were respectful, but fierce in their unrelenting criticism of the majority's formulation of new law, stating that the "majority today adopts a new standard, not even advocated by the State in the trial court, requiring proof of the widespread scheme of an intentional discrimination to prove a violation of Part II, Article 5."

The dissenters were merciless in their critique of the State's unequivocal position before the trial court that class action status or injunctive relief as requested by the plaintiff taxpayers were not necessary because if the tax was unconstitutional, the State was required to repay the collected tax. Upon these repeated representations Judge Galway had explicitly based several of his orders in the case, orders which were never challenged by the State. Indeed, the State's position in this whole matter is puzzling. It seems to the author that it should never have taken the position that it did in the trial court, knowing that it was without authority to take that position. As the dissenters bitingly pointed out,

We find it disturbing that the State made explicit representations to the trial court, upon which it and the plaintiffs obviously relied, and now the State contends on appeal that the trial court's reliance is reversible error because 'none of the State's arguments constitute an agreement or a stipulation to repay any amount' and because 'the State does not have statutory authority to agree to repayment of $880 million, or to the repayment of the 'excess property taxes' amount." The State should have considered whether it had such authority before making representations to the trial court. At the very least, the State should have promptly alerted the court upon the issuance of each of its orders in which it was clear that this court interpreted its statements as an agreement to pay or reimburse the entire State wide property tax, that the State did not mean what it said.

The author, having long ago been involved in a successful Supreme Court appeal of an unconstitutional tax, can well attest to the fact that winning in the Supreme Court doesn't mean one's taxpayer client is necessarily entitled to get the money he or she has unconstitutionally paid in taxes repaid. The State's history, through its Department of Revenue Administration, of fighting against repayment of unconstitutional taxes [e.g., in such cases such as the unconstitutional interest and dividend's tax exemption] is deplorable and deprives its own citizens of effective relief from a tax found to be unconstitutional. This is unworthy of our republican form of government which is founded upon the freely given consent and agreement of its citizens.

Francoeur v. Piper, decided June 22, 2001, is an important case that can be noted briefly. In this medical malpractice case, the Supreme Court for the first time prohibited the use of that old chestnut instruction given in medical malpractice cases at the request of the insurers of defendant physicians that instructs jurors that "a mere error of judgment, made in the proper exercise of judgment, is not professional negligence." The Court agreed with the defendant that this statement is probably a correct statement of the law but the Court was persuaded by the recent trend of many other states to reject this instruction because the instruction

is reasonably capable of confusing or misleading the jury in two ways. First, the insruction improperly introduces a subjective element regarding the standard of care. The defendant in a medical negligence case is measured against the standard of reasonable professional practice....This reasonableness standard is an objective standard,...and therefore the defendant's mental state is not an issue to be considered by the jury....The 'mere error of judgment' instruction suggests that some errors are not actionable. In determining which errors are more than a 'mere error,' the jury may improperly conclude that only errors made in bad faith are actionable....This could invite the jury to improperly consider the subjective intentions of the defendant at the time he rendered treatment....Second, by using the word 'mere,' the instruction implies that some errors, which fall below the standard of care, are not serious enough to be actionable. This could lead the jury to conclude incorrectly that a defendant is not liable for malpractice even if he is negligent.

Good riddance to bad rubbish!

The tension between freedom of the press and the conduct of a criminal investigation was starkly before the Court in Petition of State of New Hampshire (Bowman Search Warrants), decided July 16, 2001. It appeared that the local police were investigating the mysterious disappearance of a mother and her daughter. Soon thereafter, the State Police and the Attorney General's Office joined the investigation and the State sought and obtained a search warrant from a local district court. During the investigation, additional search warrants were obtained and upon the State's motion, the district court sealed all of the search warrants, the warrant applications, the supporting affidavits and returns. The Keene Sentinel, a feisty little newspaper and a long time champion of the free press cause, which takes its name literally, filed a petition to unseal the search warrants, basing its petition on New Hampshire common law and Parts I, Articles 8 and 22 of the State Constitution and the right to know law, RSA 595-A:4. The State argued that although there was a general right of the public to access the court records, there was a sufficient compelling interest to which required the records to remain sealed since

[i]t asserted a substantial State and public interest in allowing law enforcement to investigate potential criminal activity and to preserve the integrity of its investigations. The State argued that if the documents sought were disclosed the focus and the scope of the investigation would be made public, thus alerting potential suspects, who in turn might hinder the investigation by destroying evidence or coordinating stories. In addition, the State contended that premature disclosure could adversely affect the ability of law enforcement officials to obtain untainted statements from potential witnesses and could make those who had already provided information reluctant to cooperate in the future. Furthermore, the State asserted that it had a compelling interest in protecting a defendant's right to a fair trial, a right which could be adversely affected by premature disclosure of the sealed documents, and that releasing the documents before an indictment might interfere with the grand jury process.

On the other hand, the newspaper relied on prior decisions of the Court, arguing that there is a presumption strongly in favor of unsealing court records and the State, having the burden of proof on the matter, had failed to meet its burden by failing "to demonstrate a clear and present danger to its investigation to justify sealing the records." Thus the action was joined and in a unanimous Supreme Court opinion authored by Justice Broderick, the Court sided with the State. The Court's opinion recognized that "the New Hampshire Constitution creates a public right of access to court records....This right of access is not, however, absolute, and may be overcome when a sufficiently compelling interest for nondisclosure is identified." The Court put heavy emphasis upon the fact that public disclosure would be a "threat to an on-going, pre-indictment criminal investigation," and ultimately held

that in most pre-indictment criminal investigations, the existence of an investigation itself will provide the 'overriding consideration or special circumstance, that is, a sufficiently compelling interest, that would justify preventing public access to the records'....This presumption for ongoing, pre-indictment criminal investigations fits snugly within the framework set out in Petition of Keene Sentinel, 136 N.H. 121, and squarely within New Hampshire, and federal, jurisprudence.

Appeal of Seacoast Fire Equipment Company, decided July 13, 2001, was another unanimous decision of the Supreme Court under the New Hampshire Whistleblowers' Protection Act, RSA 275-E. The issue before the Court was one of the initial burden of proof and the shifting of that burden in the course of the trial. The Court first found that "the claimant bears the initial burden of establishing a prima facie case of unlawful conduct....Once the claimant has presented a prima facie case, the burden 'shift[s] to the employer to articulate some legitimate, nondiscriminatory reason for the [adverse employment action].'....The claimant must then be given a chance to demonstrate that the employer's proffered reason was actually a pretext." Looking at the disputed facts in the case, the Court found that there was sufficient evidence "which could support an inference that [the employer's] reasons for termination were contrived after the fact."

In a criminal case of first impression, In Re Nathan L., decided July 13, 2001, the Court had before it the question "whether the trial court can, as a trier of fact, convict a defendant of a lesser included offense without a request from the prosecution and over the objection of the defense." A unanimous Supreme Court, speaking through Justice Duggan, reviewed the law of other jurisdictions and "adopted a middle ground that permits, but does not require, the trial judge to instruct on lesser-included offenses when neither side requests the instruction." The Court ruled that "a trial court has the discretion to raise a lesser-included offense sua sponte at the conclusion of the trial for submission to the jury or to consider it as the trier of fact in a non-jury trial" but "the better practice is for the court to indicate to the parties at the close of the evidence its intention to raise a lesser-included offense and to give both sides an opportunity to express their views on the subject. Even if both sides object, however, the court may consider the lesser offense."

Two of New Hampshire's providers of legal services to the poor, New Hampshire Legal Assistance and the Legal Advice & Referral Center made substantial new law in a major landlord and tenant case in Johnson v. Wheeler, decided July 6, 2001. The Concord District Court had awarded a total of $12,000 ($1,000 a day) to a tenant who was injured by his landlords' wrongful action in dispossessing of his leased premises. The facts show that the plaintiff was paid up in advance for his rent and had notified the defendant landlords that he would be away for ten days (five of which he would be in jail!). Upon his return, the tenant found that the landlords had locked him out of the premises and had removed his personal property. The landlords had never sought to evict the plaintiff through judicial proceedings. The plaintiff was dispossessed of his room a total of twelve days, but only asked to regain entrance to his room on the 7th day, when he returned from jail.

The Court pointed out that the landlords did not dispute that they had violated the Landlord & Tenant Act (RSA 540-A), but they argued that the penalty provision of the Act, RSA 540-A:3, which provides for award of actual damages or $1,000, whichever is greater, for each day that a violation continues did not mean that all of the days of dispossession should be counted but only those days after which the plaintiff tenant had requested to re-enter his property. The Supreme Court upheld the district court and, construing the statute as a whole, found that it "seeks to prohibit the landlord's interference with the tenant's property or premises, not the landlord's denial of the tenant's request for access. In light of this, we conclude that a violation of RSA 540-A:3, II or III may occur regardless of whether the tenant has sought access to his or her property or premises." The landlords were further stung by the Court's award for reasonable attorney's fees for the plaintiffs in connection with the landlords' fruitless appeal to the Supreme Court. This case is another warning to all landlords that they must follow the strictures of the landlord tenant law very carefully and that any failure to do so will be expensive. Many times angry landlord clients want to lock tenants out of properties or detain their personal property when rent is not timely paid and it's sometimes hard to resist the temptation but is one that simply must be resisted at the peril of substantial monetary damages for failure to do so. The time is long gone when landlords had the upper hand and controlled the legislative agenda.

It's always surprising to learn of the number of domestic relations cases that are accepted on appeal by the Supreme Court. In The Matter of Peirce and Peirce,2 decided July 13, 2001, is one such case in which Chief Justice Brock spoke for a unanimous Court in overturning a trial judge of the superior court which denied the husband's request to modify his child support obligation to which he had previously stipulated. This might be a run of the mill domestic relations case except for the fact that this was an issue of first impression for the Court, i.e., whether RSA 458-C:7 which provides that any party may petition the court for modification of a child support order after three years of the entry of the order, had before it the issue whether the plaintiff is "entitled to automatic review of his existing support obligations by the court." The trial court had refused to provide such a review but the Supreme Court said that he was entitled to an automatic review of his existing child support obligations "without a need to show any change in circumstances." Let us offer a prayer for those unfortunate child support payers who will now face continued rounds of litigation before the domestic relations courts of our State every three years. It's a hell for which Dante in his Inferno would have found a ring if divorce had been allowed in Italy at that time.

A case of our continually developing common law of negligence, Lord v. Lovett, decided April 4, 2001, raised for the first time before our Court the loss of opportunity doctrine, also called the loss of chance doctrine. The doctrine is defined as "a medical malpractice form of recovery which allows a plaintiff, whose preexisting injury or illness is aggravated by the alleged negligence of a physician or health care worker, to recover for her lost opportunity to obtain a better degree of recovery." The trial court had ruled in favor of the defendant doctor on a motion to dismiss saying that "there's no such theory permitted in this State."

The Supreme Court disagreed, opting for one of three approaches to the lost opportunity doctrine current among the American jurisdictions, holding that "a plaintiff may recover for loss of opportunity in medical malpractice cases where the defendant's alleged negligence aggravates the plaintiff's preexisting injury such that it deprives the plaintiff of a substantially better outcome."

The Court [which included two superior court justices] was unanimous in its decision but Justice Broderick concurred specially stating that he accepted the majority's opinion with reservation:

The cause of action...has never before been explicitly sanctioned in our jurisprudence. Its adoption today ironically springs from a statute passed in 1986 as part of comprehensive tort reform, which was intended to preempt the common law and bring predictability and stability to the insurance market, in part, for the benefit of health care providers.

Justice Broderick went on the indicate that "because it is not clear which route the legislature followed, I cannot disagree with the majority's generous interpretation of 'medical injury'. If the legislature believes that unintended consequences have beset its statutory definition, I would respectfully urge it to clarify the statute to remove any uncertainty."

In the very infrequently encountered area of trust law, Lanoue v. Commissioner, decided June 19, 2001, involved a question certified from the United States District Court for the District of New Hampshire, concerning the validity of a special needs trust created pursuant to 42 U.S.C. 1396p. The trust was funded with the beneficiary's assets (the settlement of a personal injury action), was made explicitly irrevocable, was created by the beneficiary's guardian after the trust's primary beneficiary was found by the probate court to be incapacitated and provided upon termination that any remaining assets were to be paid to the primary beneficiary's "heirs at law in accordance with RSA 561:1, as if she died intestate." The government contended that the trust was in fact revocable despite its language of irrevocability because the "trust is revocable because there is no evidence of an intent to create an interest in the grantor's heirs." The government relied on cases in other jurisdictions which followed a general principal of trust law that "if a grantor is also the sole beneficiary of a trust, the trust is revocable regardless of language in the trust to the contrary."

The Supreme Court, relying on the great weight New Hampshire places upon the intention of a testator, rejected the government's position saying

The settlor's intent is clear. To conclude that the trust is revocable would defeat the purpose of the trust and thwart 42 U.S.C. 1396p. We will not adopt a construction that will defeat the clearly expressed intent of the settlor.

An attorney's threatening conduct and his lying about it resulted in a three month suspension from the practice of law as a result of the Supreme Court's unanimous decision in Kalil's Case, decided June 6, 2001. The judicial referee had recommended a private censure instead of suspension but the Court opted for the heavier sanction argued for by the Committee on Professional Conduct. Again, this case proves the point that often times it is not the offense itself that brings suspension of the attorney, but rather the attorney's attempt to cover up the misconduct by lying about it under oath. In the present case, it appeared that the respondent attorney was counsel for a creditor in a heated collection case against a pro se defendant. After a contempt hearing in the matter, the respondent and the pro se debtor went at it outside the courtroom. The debtor stated to the attorney that he had no intent to comply with a court order requiring payment. To say the least, this did not sit well with the respondent attorney who, colorfully but imprudently, told the debtor that if he did not make payment, the attorney would "rip his face off." The frightened defendant then ran back into the courtroom and an immediate hearing was held during which the defendant recited the respondent's threat. The respondent attorney twice denied that the conversation had occurred or that he had threatened the debtor, but evidence from an additional member of the Bar who was a witness to the confrontation showed that the respondent was lying and he ultimately so admitted. In mitigation, the respondent attorney argued that his twenty-five years of practice without a blemish was a sufficient reason for a censure only, but the Court found the harsher penalties of a three month suspension more applicable, relying on the attorney's oath that each New Hampshire lawyer takes that "[Y]ou solemnly swear or affirm that you will do no falsehood, nor consent that any be done in the court." As Richard Milhouse Nixon found out in the Watergate affair, his kingdom was lost for lying about his role in the matter, rather than for the act itself. It's a very hard lesson to learn.

ENDNOTES

1. The author is a taxpayer in a donor town; therefore, his views of the case may be colored.
2. The author has been twice divorced and as a result his opinion of the case may be colored.

The Author
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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