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Bar Journal - Spring 2005

Lex Loci: A Survey of New Hampshire Supreme Court Decisions

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Among the many interesting decisions handed down by our Supreme Court in recent months are several cases of first impression. For example, Rosa v. Partners in Progress, Inc., opinion issued March 4, 2005, involved a first impression question concerning the rights of an illegal alien (here a Brazilian citizen) suing in New Hampshire in tort for injuries sustained while working at a New Hampshire Wal-Mart construction site. A unanimous Supreme Court, speaking through Justice Dalianis, first considered whether the defendant was precluded completely from bringing a claim for lost earning capacity because of his status as an illegal alien. The Court, citing to general law that holds that illegal aliens have rights of access to courts and are eligible to sue therein to enforce contracts and address civil wrongs, such as negligently inflicted personal injuries, ruled that "[w]e see no reason to separate an illegal alien’s claim for lost earning capacity from the umbrella of other claims that he may make under tort law, for ‘[s]urely the effect on the worker of his injury has nothing to do with his citizenship or immigration status.’"

The Court then went on to address whether an illegal alien’s claim for loss of earning capacity would be measured by what the illegal alien could have earned (but for his injury) unlawfully working in the United States or should his right of recovery be measured "by what the illegal alien could have earned lawfully working in his country of origin." The Court analyzed federal cases on this issue and held that "generally an illegal alien may not recover lost United States earnings because such earnings may be realized only if that illegal alien engages in unlawful employment." Despite this general rule, the Court went on to rule that "[A] person responsible for an illegal alien’s employment may be held liable for lost United States wages if that illegal alien can show that the person knew or should have known of his status, yet hired or continued to employ him nonetheless."

The Court then proceeded to the third issue—the extent to which a defendant may introduce evidence of the illegal alien’s status to rebut a claim for lost United States earnings. The Court held that "[g]enerally, an illegal alien may not recover lost United States earnings. Thus, an illegal alien’s status, though irrelevant to the issue of liability,….is relevant on the issue of lost earnings," although the Court recognized that the evidence of his illegal alien status might be prejudicial to the illegal alien’s case.

Another example of our precedent-shattering Supreme Court is its opinion in Durham v. Durham, opinion issued February 24, 2005. Here a unanimous Supreme Court remade the law concerning corporate derivative actions. The general rule followed in New Hampshire up to now is "that corporate claims are to be prosecuted either by the corporation or derivatively, but not through direct action by a shareholder." The plaintiff, a stockholder in a closely held corporation, brought an action against his fellow three shareholders directly and did not name the corporation as a party to the action. The trial court dismissed the plaintiff’s action. The plaintiff appealed arguing that "practical and policy reasons justify allowing a direct, as opposed to derivative, action against the defendants because the plaintiff is the sole aggrieved shareholder and is suing all the remaining shareholders." The Court bought this argument holding that "[t]he derivative/direct distinction makes little sense when the only interested parties are two individuals or sets of shareholders, one who is in control and the other who is not." The Court concluded that

[i]n cases such as this one, where the principles underlying the derivative proceeding are not served, the trial court should have the discretion to allow the plaintiff to pursue a direct claim against the corporate officers….While we agree that consistency in the law is important, we also recognize that the derivative proceeding involves burdensome, and often futile, procedural requirements when a minority shareholder seeks to redress wrongful behavior by the majority shareholders. Furthermore, any recovery from a derivative proceeding goes to the corporation and thus would be under the control of the alleged wrongdoers.

Sandford v. Wolfeboro, opinion issued March 4, 2005, invoked a very interesting, but very infrequently encountered issue in this day and age, the scope of a prescriptive easement to flow land. First, this case must be seen as a prescriptive easement case as it was not a case where there was a granted easement to flow land. The Court agreed with the trial court that "the standards for determining the scope of a right-of-way could not be used to determine the scope of prescriptive flow rights, due to the drastic difference between the nature of rights acquired in a right-of-way and those acquired in an easement to flow water onto another’s land." Here, the controversy arose because of an extreme fluctuation in water height because of the needs and desires of the dam owner and because of the weather, as a result of which water flowed to the top of the dam only once or twice a year. It’s fair to say that it did not happen on a regular basis. The Court pointed out that where "the prescriptive right at issue is the right to flow water onto land, however, the scope of the easement is much more difficult to define" than other types of prescriptive easements. The Court held that the proper rule to be applied was whether "a reasonable person could have found that the town established its easement to flow the plaintiff’s land…[to] the top of the dam, in keeping with the historical and customary use of the dam, within the obvious parameters of weather variations." Applying this rule, the Court held that the scope of the town’s right to flow land included the right to flow water to the top of the dam. Although having little general use, this fascinating case and its reasoning should be read by all lawyers interested in easement questions.

Figlioli v. R.J. Moreau Companies, Inc., opinion issued January 6, 2005, is one in which the author would describe the Supreme Court’s decision as being very hardnosed. The defendant had constructed the plaintiffs’ house with an attached deck which collapsed, severely injuring the plaintiffs who were standing on it at the time. In the lower court, the plaintiffs sought and received enhanced compensatory damages since they claimed that there was evidence of wanton, malicious or oppressive conduct on the part of the contractor. It appeared that the cause of the collapse was the fact that the defendant contractor had failed to lag-bolt the deck to the building. Instead the contractor had simply nailed the deck to the building. The defendant’s employee testified that he simply forgot to lag bolt the deck and, thus, the defendant claimed that compensatory damages should not be considered since there was no evidence of wanton, malicious or oppressive conduct. However, the plaintiff pointed out that the deck constructed by the same defendant on the very next adjoining house was also not lag-bolted but rather was simply nailed to the house in a similar fashion as was the plaintiffs’ deck. A unanimous but skeptical Supreme Court held that the plaintiffs’ claim for enhanced damages failed: "The plaintiffs presented no evidence as to the reason their deck was not lag-bolted, except that the deck next door was not lag-bolted either. The theories propounded by the plaintiffs’ counsel are not supported by anything more than conjecture." The moral of this story is that there is neither an Easter bunny nor a tooth fairy.

Fox v. Town of Greenland, opinion issued December 29, 2004, involved the issue of the disqualification of a zoning board member who voted after being absent from two of the five hearings held on the plaintiff developer’s petition for a special exception under the zoning law for a major commercial development. The attorney for the neighboring town and several abuttors first raised the issue of the Board member’s disqualification in a motion for rehearing which it had timely filed after the questioned Board member actually voted at the final hearing. The Supreme Court held that the objection was not raised "at the earliest possible time" because the Chairman of the Board of Adjustment had announced at the first hearing that the particular member would be missing some meetings, but would be brought up to speed and would be "expect[ed]" to vote on the matter. The Supreme Court held that the proper time for objecting to the Board member’s qualifications was right at the final hearing where the Board member actually participated in the deliberations and took part in the final vote of the meeting. This is a pretty strict rule to observe, especially considering the informal manner in which many zoning board hearings are held where it is often unclear whether a Board member (or even an alternate Board member) will actually vote or not until the vote is actually taken.

State v. Bouchesne, opinion issued March 4, 2005, addresses a recurring issue in criminal cases: when is a person is considered to be "seized" by the police. The New Hampshire Supreme Court emphasized that it had earlier established a stricter standard than the federal courts under the Federal Constitution, holding that "our State Constitution incorporates a strong right of privacy and provides greater protection for individual rights that the Federal Constitution." It is established in New Hampshire that the rule "under Part I, Article 19 of the State Constitution, a police officer must possess reasonable suspicion before taking an action that would communicate to a reasonable person that he or she is not free to leave." The Court applied that reasoning to the facts at hand where a police officer, believing that he had just witnessed a drug transaction, disembarked from his cruiser and motioned for the defendant to approach him, but the defendant did not respond and walked away. The officer followed him, identifying himself as a police officer and ordered the defendant to stop. The defendant bolted and the police officer followed, catching up with the defendant and grabbing him just as defendant dropped or threw a plastic container to the ground which was later found to contain cocaine and marijuana. The defendant was then arrested. The defendant moved to suppress the cocaine and marijuana obtained as a result of the seizure because he claimed that the officer lacked a reasonable articulable suspicion of a crime when he first ordered the defendant to stop because the officer admitted that, at that point, although he suspected a drug transaction, he had not seen the plastic bag. The Supreme Court overruled the trial court’s denial of the defendant’s motion to suppress the evidence of the illegal substance. Interestingly, the majority of the split Court, speaking through Justice Duggan, quoted in support of its rejection of the U.S. Supreme Court case1 which would have allowed the evidence to be admitted, their former colleague, Justice Souter, who had observed, when on the New Hampshire Supreme Court bench, that "if we place too much reliance on federal precedence, we will render the State rules a mere row of shadows; if we place too little, we will render State practice incoherent."2

The dissenters, Chief Justice Broderick and Justice Galway did not disagree with the majority’s rejection of the Hodari Case in general, but would rule that the exclusionary rule should not automatically be applied in all situations where a defendant is initially seized unlawfully, particularly where the defendant flees from seizure. The dissenters would use a modified test where a defendant resists arrest or detention, arguing for "more subtle application of the exclusionary rule" by use of a three-factor test which would not unduly chill law enforcement officers in the execution of their duties or unjustifiably reward suspects who flee in violation of the law: "the trial court should examine (1) the temporal proximity between the initial illegal seizure and the subsequent search pursuant to the lawful arrest; (2) the presence of intervening circumstances; and (3) the purpose and flagrancy of the official misconduct."

To use a phrase currently in the news, "the nuclear option," [however you pronounce it] Van Der Stok v. Voorhees, opinion issued January 24, 2005, is an interesting case involving a claim of fraud (here "the nuclear option") in a land contract case. It appeared that the plaintiff entered into a contract to sell a parcel of land to the defendant, upon which the defendant stated that he wanted to build a seasonal home. The plaintiff alleged that the defendant had said that a seasonal home could be built upon the property even though the defendant had hidden the fact that he had previously applied to the local zoning board for a seasonal home permit and had been denied an application for a building permit. However, the contract signed by the parties specifically provided that the "Seller [the plaintiff] makes no representations as to land use law or regulations." When the defendant immediately sought a building permit and was denied one, he stopped payment on his check. Undeterred, the overly confident plaintiff, relying on this clause of the sales agreement, brought an action on the purchase and sale agreement and even under the bad check statute. The defendant counterclaimed for "fraud/misrepresentation" and for abuse of process and malicious prosecution.

The trial court denied the plaintiff’s motion for summary judgment and granted the defendant purchaser his fees and costs and the ever confident plaintiff appealed to the Supreme Court. The Court rejected the plaintiff’s argument in reliance upon the non-representation clause in the purchase and sale agreement, stating that to allow such a provision would allow the plaintiff to succeed by trickery or duplicity:

We long ago observed: ‘The principle of the common law is well and distinctly settled, that positive fraud vitiates every thing—contracts, obligations, deeds of conveyance, and even the records and judgments of courts, incontrovertible as they are on every other ground….’ We have also stated that ‘courts do not lend their aid to enforce agreements against the principles or the policy of law, or having injustice or fraud for their object.’….Accordingly, we conclude that the defendant was not precluded by the contractual disclaimer from establishing the defense of fraud, and therefore the trial court correctly denied summary judgment. We emphasize, however, that our holding is limited to instances of positive fraud; that is, instances in which the party alleged to have committed fraud ‘made a representation with knowledge of its falsity or with conscious indifference to its truth with the intention to cause another to rely upon it.’ [emphasis added].

Brito v. Ryan, opinion issued January 6, 2005, is an appeal from a petition for entry of a foreign judgment pursuant to RSA 524-A which was granted by the lower court to a minor league ballplayer who was injured in Arizona while playing minor league baseball. The club he played for was colorfully called the Yuma Bullfrogs and he sued that club in Arizona as well as the owner of the club, similarly colorfully called the Valley Vipers Professional Baseball Club. In addition, he sued the defendant, a resident of New Hampshire, who owned 50 shares in the "Vipers." The defendant did not appear in the Arizona case nor respond to the lawsuit. After receiving a default judgment for $219,000 in the Arizona court, the plaintiff petitioned for entry of the default judgment against the defendant in the Merrimack County Superior Court and the court granted the petition for entry of a foreign judgment, pursuant to RSA 524-A, the Revised Uniform Enforcement of Foreign Judgments Act. The plaintiff claimed jurisdiction over the defendant in Arizona under the Arizona long arm statute, the defendant having been personally served in New Hampshire in compliance with the Arizona statute.

The Supreme Court reversed the trial court and remanded the for further hearing on whether there was sufficient minimum contacts of the defendant with the State of Arizona. Since the defendant did not challenge jurisdiction in Arizona and because the issue does not concern an appeal from such a challenge, "the trial court erred in concluding that the defendant waived the issue of personal jurisdiction, because there is nothing in the record that the defendant submitted himself to Arizona’s jurisdiction."

The author has, in earlier columns, unfavorably commented on the State’s uncompromising attitude to tax rebate claims filed by taxpayers who pay taxes under a tax measure found later to be unconstitutional by the State.3 Another example of such a case is Starr v. Governor, opinion issued December 29, 2004. This case involved a plaintiff only Mother Teresa could love, an incarcerated prisoner in the State prison system. The plaintiff contested the legality of a 5 percent surcharge assessed on all goods sold in the prison canteen, claiming that the surcharge was a tax.4 The Court, in an earlier appeal, had found that the surcharge that was indeed a tax which was disproportionately applied and, therefore, unconstitutional.5 Upon remand, the trial court ordered the State to reimburse those individuals held in prison who were required to pay the 5 percent surcharge, but the State stubbornly refused and appealed the trial court’s order. The Supreme Court then summarily affirmed the trial court’s order.6 The plaintiff prisoner then objected that the State had failed to provide payment of mandatory costs and interest on the judgment pursuant to RSA 524:1-b, but the trial court denied the plaintiff’s request for interest. The Supreme Court, on appeal, upheld the prisoner’s request for interest stating that RSA 524:1-b provided for mandatory interest in all judgments and it was not in the discretion of the trial court to deny an award of interest. By the author’s count [which may be off], the plaintiff was required, up to this point, to appeal three times to obtain redress for his damages.

The State argued that the trial court’s order ordering reimbursement to all prisoners was too broad. The State suggested an award of interest could only be made to "parties" under RSA 524:1-b and that the only actual parties to the case were the fifteen other named individual plaintiffs since the case had been denied class status. However, the Supreme Court noted that the State itself had objected to the plaintiffs’ request for certification of a class action, and had represented to the trial court "that if the plaintiffs prevailed, ‘all prisoners who were subjected to the 5 percent surcharge would be reimbursed.’ Accordingly, all prisoners who receive pecuniary damages as a result of this equity action are entitled to judgment interest."

The author notes the perverseness of the State in denying its own citizens redress for unconstitutional taxes and argues that it is beneath the dignity of a government which arises from the people of the State: "All men are born equally free and independent; therefore, all government, of right, originates from the people, is founded in consent, and instituted for the general good"7

ENDNOTES

  1. California v. Hodari D., 499 U.S. 621 (1991).
  2. State v. Bradbury, 129 N.H. 68, 83 (1986).
  3. It seems to be part of our State government’s frugal nature to deny justice to its citizens even when they have been found to be taxed unconstitutionally. What would our colonial forbears have thought of this practice? Perhaps they would have exercised the right of revolution contained in the Bill of Rights of the N.H. Constitution: "[t]herefore, whenever the ends of government are perverted…and all other means of redress are ineffectual….the people may, and of right ought to reform the old, or establish a new government. The doctrine of nonresistance against arbitrary power, and oppression, is absurd, slavish, and destructive of the good and happiness of mankind." Part I, Article 10, N.H. Constitution.
  4. See Starr v. Governor, 148 N.H. 72 (2002) (Starr I).
  5. Id.
  6. Starr v. Governor, No. 2003-0465 (N.H. 2003).

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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