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Bar Journal - Spring 2008

LEX LOCI: A Survey of New Hampshire Supreme Court Decisions

By:

A very significant decision for municipalities and charitable organizations alike was the Court's fascinating opinion in Town of Peterborough v. The MacDowell Colony, Inc., opinion issued March 14, 2008. Before the Court was the increasingly frequently encountered issue of whether a particular charitable organization qualifies for a property tax exemption under RSA 72:23,V. The trial court had ruled that the charity, the renowned MacDowell Colony, was entitled to a property tax exemption and the Supreme Court affirmed the lower court's decision. Interestingly, the Court issued two separate opinions, both ruling in favor of the charity. In the first, authored by Justice Hicks and joined by Chief Justice Broderick and Judge Galway, the Court rejected the town's claim that MacDowell was not a public charitable organization because the creative artists who gained access to the property in Peterborough were not a substantial and a definite segment of the general public, or that any art was not required to be produced by the artist residents, or that the admission procedures gave the charity total discretion over who would receive its benefits. The majority opinion also went on to reject the town's vigorous argument that since only one New Hampshire resident was an artist in residence during the tax year involved, New Hampshire residents were not generally benefited. Rather the court majority adopted a sweeping view of the term "general public" as used in the statute, RSA 72:23-l:

We find it implicit that the term "general public" automatically includes residents of New Hampshire. Accordingly, a specific inquiry into the organization’s impact of New Hampshire residents is necessary only when the organization serves a narrower population that the general public, i.e, in the statute’s words, "a substantial and indefinite segment of the general public." . . . As we have concluded that MacDowell’s public service advances the intellectual well-being of the general public, we need not undertake a more specific inquiry.

The majority then moved on to the town’s final argument: that if the art created by resident artists constitutes the required public benefit for a charitable property tax exemption, then the profits from the art must be accounted for. The majority rejected this argument saying that RSA 72:23, V’s prohibition against private inurement applies to the charity McDowell, not the resident artists.

The concurrence offered by Justice Dalianis in which Justice Duggan joined, agreed that the MacDonald Colony was entitled to a tax exemption but held that the "sole issue in this appeal, broadly speaking, is whether MacDowell is a charitable organization." The concurrence then turned to a broad definition of "charitable purposes" found both in statutory law and in common law and would hold that,

Generally, charitable purposes fall into the following categories: (1) relieving poverty; (2) promoting health; (3) advancing education; (4) aiding religion; (5) providing governmental or municipal facilities and services; and (6) other purposes that are beneficial to the community [citing to the Restatement (Third) of Trusts, § 28 (2003)].

The concurrence looked to MacDowell's articles of incorporation which sets forth its charitable purposes and would find that MacDowell's purposes fall into the third general category of charitable purposes, that of advancing education. This case has been closely followed by both municipal lawyers and attorneys for charitable organizations. To the author, the fine distinctions between the two opinions were not very clearly demarcated. It seems to signal a clear loss to municipalities which, cash-strapped, are increasingly contesting charitable exemption status requests.

A case which well illustrates the leakiness, in New Hampshire, of a "personal liability umbrella policy" issued by an insurance company which, in the Supreme Court's words, made the insurer seemingly broadly "liable to defend, and potentially indemnify, the insured for an accident resulting in bodily injury, or the insured's commission of an offense resulting in personal injury." This insurance coverage protection seems to be pretty extensive but, as a result of the New Hampshire Supreme Court's decision in State Farm Insurance Company v. Bruns, opinion issued February 13, 2008, the umbrella policy protection provided by the insured's policy was left in tatters. Or better said, the umbrella, after the Court's analysis of the policy, consisted simply of the ribs with no cloth protection remaining.

In the Bruns case, the plaintiff’s mother, on behalf of her daughter who was allegedly sexually molested by the plaintiff’s husband, sought coverage under the personal liability umbrella insurance policy issued to the alleged offending father by the State Farm Insurance Company. The plaintiff’s claims, in behalf of her traumatized daughter, included claims for (1) damages for sexual assault and battery, (2) damages for the intentional infliction of emotional distress, (3) damages for alleged invasion of rights of privacy, and (4) damages for false imprisonment. The writ included a claim that the defendant engaged in ‘grooming’, i.e., the husband’s "course of conduct" and "pattern of sexual abuse and molestation" amounted to a pattern of grooming, "in that the commission of the earlier assaults made it more likely that assaults and other violations would occur in the future." Despite some ambiguities in the policy, a unanimous Supreme Court, speaking through Justice Galway, ruled against all of the arguments on behalf of coverage raised by the plaintiff mother on behalf of her child. A summary of the Court's basic holding would be that all of the defendant's claims were "rebrandings" of the basic claim for sexual assault and the policy contained an exclusion against coverage for intentional offenses such as sexual assault. Unavailing were the plaintiff's claims that "[A]n insurer's obligation is not merely to defend in cases of perfect declarations, but also in cases where, by any reasonable intendment of the pleadings, liability of the insured can be inferred, and neither ambiguity nor inconsistency in the underlying complaint can justify escape of the insurer from its obligation to defend."

The Supreme Court also rejected the reasoning of a recent case1 from the well-respected Supreme Court of California which would have provided coverage under the facts of the instant case. The California Supreme Court

concluded that because the evidence in the case before it did not clearly establish that all of the alleged misconduct was part of the molestation, the insurer could not deny coverage … according to the [California Supreme] court, "[n]either precedent nor logic dictates that a molester cannot be also liable for torts of negligence against the parties which are apart from and not integral to the molestation.

Seemingly long gone are the pioneering days of the Supreme Court in insurance cases when in 1947 it issued its precedent-shattering decision in the Dumas Case2, holding insurers broadly liable for negligently failing to properly defend their insureds, in addition to the liability of the insurance company for the insured’s primary negligence.

By far the largest percentage of cases handled by our trial court system are criminal cases, a fact that often goes unnoticed by the vast majority of New Hampshire lawyers. The number of New Hampshire lawyers who predominantly specialize in criminal defense work is relatively small and it is becoming increasingly unusual to see a lawyer crossing from the civil litigation field to the criminal defense field, and vice versa. Yet criminal cases make up a substantial proportion of our jury trials and, of course, by far the largest percentage of our trials in the district courts. On a daily basis, the New Hampshire criminal defense bar deftly handles hundreds of criminal cases, one after another, with relatively few mistakes. These cases usually require ingenuity and spontaneity by criminal lawyers who are frequently and unexpectedly confronted with thorny trial issues of every kind, for which it is very difficult to prepare.

Many of these cases make their way to our Supreme Court and among the recent decisions of the Court are many that illustrate ingenuous arguments raised by defense counsel. One such case is State v. Cosme, opinion issued March 20, 2008, where the defendant appealed the denial of his motion to strike the jury panel where he challenged the "State's practice for jury orientation; that is, the process prior to criminal, civil or equitable proceedings where individuals reporting for jury duty are first assembled in the courthouse but not yet selected to potentially sit as a juror on any specific case…. Our State's practice for jury orientation includes a video presentation and an informal oral address by the presiding judge followed by questions from the prospective jurors." (emphasis added.) The defendant argued that he had a right to be present at his trial (including the jury orientation), as guaranteed in Part 1, Article 15 of the New Hampshire Constitution. The Supreme Court unanimously concluded that "orientation of prospective jurors is not a critical stage of criminal proceedings instituted against a defendant, and does not bear the hallmarks of a proceeding in which his presence is necessary to preserve his ability to defend against pending criminal charges." The Court was more troubled by the potential of harm to a fair trial whenever a trial judge engages in ex parte communications, during jury orientation, with prospective jurors. On an ongoing basis, the Court recommended that "specific procedures governing the interaction between the trial court and prospective jurors during jury orientation should be accomplished through rulemaking."

Another criminal case raising a unique defense argument is State v. Solomon, opinion issued March 20, 2008. Here the defendant appealed the trial court's denial of his motion for dismissal of the case against him after the original presiding justice became unavailable and the bench trial was finished by another judge. It appeared that the judge hearing the trial was a member of the New Hampshire National Guard, and he had volunteered for duty in Iraq. The trial had begun in August by the original judge who began to hear evidence but was suspended so that a lawyer could be appointed for a witness. The case was again continued and then was scheduled in January of the following year. The original judge had by then been called to service in Iraq, and another judge was substituted to finish the case. The defendant then moved to dismiss, arguing that his right to have his trial completed by a particular tribunal under Part 1, Article 16 of the New Hampshire Constitution had been violated and he invoked the N.H. and U.S constitutional prohibitions against double jeopardy. The trial court, instead of granting the defendant's motion to dismiss, declared a mistrial, thereby allowing the defendant to be prosecuted again. The Supreme Court, speaking unanimously through Justice Galway, reversed the trial judge, holding that while a trial court may declare a mistrial over the defendant's objections, it can do so only if there is a "manifest necessity for a declaration of a mistrial" (emphasis added). However, the Supreme Court held that the trial court had unreasonably exercised its discretion in concluding that manifest necessity required a mistrial. The Supreme Court held that the State had the burden of proving that the mistrial was justified by manifest necessity, and found that the State had failed to meet its burden of proof. The Court held specifically that the State "has failed to demonstrate that any consideration was given to the possible effect upon the defendant's constitutional rights or that any measures were taken to ensure those rights were protected," especially after notice that the original trial judge had volunteered for hazardous overseas military duty.

Another criminal case, State v. Burgess, opinion issued February 26, 2008, involved a defendant who argued that the trial court violated his privilege against self- incrimination under Part 1, Article 15 of the New Hampshire Constitution by using his silence as a factor in sentencing. This was a question of first impression in New Hampshire and the Supreme Court chose not to follow a line of cases in other states which have held that a sentencing court may not consider a defendant's silence at sentencing as indicating a lack of remorse without violating his privilege against self incrimination. Instead, the New Hampshire Supreme Court, speaking unanimously through Justice Duggan, took a middle course. The defendant, after pleading not guilty, had refused to speak to the person conducting the pre-sentence investigation after the jury found him guilty of attempted escape and possessing an implement for escape. He also declined to speak for himself at the sentencing hearing, facts to which the sentencing judge referred in imposing the maximum extended term sentence. The Supreme Court held that "under our sentencing scheme, denying a defendant leniency simply because he fails to speak and express remorse is equivalent to penalizing him for exercising his right to remain silent." Inexplicably, however, the Court upheld the sentencing judge's action of imposing the maximum sentence, stating that a sentencing court's inference of a lack of remorse from a defendant's silence at sentencing does not violate the privilege against self-incrimination in all instances. The Court held that the facts of each case must be examined in each case, and that the defendant's "right to remain silent was not implicated because he would not have risked incriminating himself or jeopardizing his post-trial rights by expressing remorse for his acts." The author thinks that the Court puts too fine a point on its distinction, resulting in an unexpected setback to a defendant's right against self-incrimination under our New Hampshire Constitution.

Another disappointing criminal case is State v. Labranche, opinion issued February 26, 2008. Here the defendant appealed the trial court's act in permitting the State's expert psychiatrist to testify that the charged offense was not the product of his mental illness. Before trial the defendant had provided the proper notice to the trial court that he intended to enter a plea of not guilty by reason of insanity. The trial court subsequently allowed the state’s expert psychiatrist to testify that while the defendant did have a psychotic disorder, it was his opinion that the defendant's actions were not the product of a mental illness. To the author this is the ultimate question for the jury, but the Supreme Court unanimously upheld the action of the trial court in allowing the State's expert psychiatrist to so testify, distinguishing an earlier decision of the court3 where the Supreme Court had previously ruled inadmissible a defendant's attempt to introduce testimony of an expert psychiatrist on the ultimate issue of whether the defendant possessed the requisite mens rea for the crimes charged. The Supreme Court in the present case said that its earlier case was not applicable in the instant case because the expert testimony to which the defendant objected did not address the issue of intent, but rather the issue of the defendant's mental illness, upon which the jury would be assisted by the testimony of an expert. The Court relied heavily on the trial court's closing instruction to the jury that "[I]t's up to you, the jury, to determine as questions of fact whether the Defendant suffered from a mental disease or defect, and that such caused him to act as he has been charged," the trial judge adding that the jury was free to ignore the expert's opinion if they felt the opinion was not sound. Again, to the author, the Court’s reasoning makes too fine a point, and he would have opted for the position of many state and federal courts which have held that expert testimony regarding the issue of whether the defendant's conduct was a product of a mental illness was inadmissible. Experts who testify as a party wish are not hard to find.

Finally, it is the author's usual practice to end his quarterly column with a case with a humorous twist or two. However, it appears that the present Supreme Court, ever alert for an opportunity to frustrate the author, has rendered its latest decisions in a very prim and proper manner. The author leaves it to the readers to find some humor in the current avalanche of very strait-laced opinions.

Endnotes

1. Horace Mann Insurance Co. v. Barbara B., 846 P.2d, 792 (Cal. 1993).

2. Dumas v. Hartford Accident and Indemnity Co., 94 N.H. 484, 56 A2d 57 (1947).

3. State v. St. Laurant, 138 N.H. 492 (1994).

 
Author

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

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