Evidence

State v. Elementis Chemical, No. 2004-627

Appeal from Hillsborough Superior Court, December 9, 2005

Reversed and remanded.

Issue: State appealed ruling dismissing the State’s petition for civil forfeiture against the defendant, Elementis Chemical.  State argues that 1) the trial court erred in excluding as evidence defendant’s manifests of hazardous wastes based upon the policy of New Hampshire Rule of Evidence 407 regarding subsequent remedial measures and 2) that the trial court should have found sufficient evidence to conclude that waste on the defendant’s property was hazardous between 1998 and 2001.

The Court held that the voluntary remediation inherent to Rule 407 is not present when such remediation is pursuant to a statutory mandate and that the fairness concern of Rule 407 does not require exclusion of involuntary acts of remediation.  Since the defendant was mandated under New Hampshire law to remove the hazardous waste, the act of removing the waste was not voluntary; therefore, the fairness concern of Rule 407 did not provide a foundation for excluding the manifests.

The Court also rejected the defendant’s argument that the trial judge correctly excluded the manifests under Rule 403.  The Court found no support for this contention in the record, as the defendant did not move to have the manifests excluded under Rule 403 nor did the trial judge ever cite Rule 403 or mention the probative value of the manifests as evidence against the danger of unfair prejudice.

Accordingly, the Court found that the trial judge should not have excluded the manifests and that with the manifests as evidence, and the State should have had sufficient evidence to prove that waste on the defendant’s property was hazardous.

Attorney Discipline

Lane’s Case, No. LD-2003-010

New Hampshire Supreme Court, December 28, 2005:

Petition denied.

Issue: Appeal of Petition filed against respondent by the Supreme Court Committee on Professional Conduct. The referee found that the Committee failed by clear and convincing evidence to show that respondent violated New Hampshire Professional Rules of Conduct 1.9(c)(1) and 8.4(c) by disclosing information related to representation to be used to the disadvantage a former client in an estate matter.

The Court noted that the version of Rule of 1.9 that applied in this matter was the version that was in effect in 1996 when the alleged violations occurred.  The difference between the old rule and the new rule is that the old rule only prohibits an attorney from using such information to the disadvantage of a client while the new rule: 1) provides an additional exception to the lawyer’s use of information to the disadvantage of his client if that use is required by Rule 3.3; and 2) Rule 1.9(c) prohibits an attorney from revealing information relating to the representation of a former client.

The Court agreed with the referee’s ruling that information obtained from the file of respondent’s former estate client did not constitute information relating to the representation used to the disadvantage of the former client as required by Rule 1.9(b) but in fact the information the respondent obtained from his former estate client worked to the advantage of respondent’s former client, the executor of the estate.

The Court rejected the Committee’s argument that the respondent intentionally misrepresented his continued representation of the estate given that the Committee failed to show by clear and convincing evidence that the respondent intended to create a belief that he continued to represent the estate.  The evidence supported that at most the respondent had an erroneous belief that he continued to represent the estate.  The Court has not had an occasion to determine whether negligent misrepresentation constitutes a violation of Rule 8.4(c), nor did record show that the Committee charged the respondent with negligent misrepresentation.

Justice Broderick, and Justice Nadeau and Justice Duggan, concurred; Justice Dalianis concurred in part and dissented in part. 

Expert Witness/Attorneys Fees

Gulf Insurance Company v. AMSCO, Inc., No. 2004-354

Appeal from Rockingham Superior Court, December 28, 2005:

Affirmed.

Issue: Plaintiff appealed decision by the trial court that 1) permitted a defense expert to testify; (2) ruled that attorney’s fees and other expenses incurred by Gulf on certain bond claims were not recoverable under the parties’ indemnity agreement; and (3) rejected Gulf’s request for attorney’s fees under the indemnity agreement with its principal for its pursuit of the present case.  The defendant cross-appealed arguing that the trial court erred in rejecting its request to amend its pleadings and assert counterclaims against Gulf for breach of contract and for violation of the Consumer Protection Act, RSA chapter 358-A.

The Court determined that the trial court did not err when it allowed an expert witness to testify even though the expert was not disclosed in the defendant’s pre-trial statement.  Given the record, the Court concluded that the defendant’s reliance on pre-trial expert testimony as well as the subject matter of the anticipated testimony came as no surprise to the plaintiff and that the plaintiff was aware that the defendant would be relying on expert testimony as well as what the subject matter of that testimony would be.

The Court also held that the trial court did not err by denying the plaintiff’s attorney’s fees under the indemnity agreement.  The Court reviewed the trial court’s reading of the contract de novo and agreed with the trial court’s plain reading of the contract.  The Court agreed that plaintiff’s claim of expenses other than legal expenses was unreasonable because they amounted to ordinary business expenses beyond legal expenses covered under the agreement.  The Court cited the 5th Circuit in stating that an indemnity agreement “…does not entitle the surety company to reimbursement for legal expenses which are unreasonable or unnecessary.”

Finally, the Court did not address the Plaintiff’s last issue on appeal as the trial court record lacked any motion for reconsideration that contends that the trial court erred.

Utilities/Administrative Law

Appeal of Verizon New England, Inc., No. 2004-785

New Hampshire Public Utilities Commission, December 28, 2005

Affirmed.

Issue: Verizon raised three issues on appeal based on a Public Utilities Commission order imputing at least $23.3 million earned by Verizon’s unregulated affiliate, Verizon Yellow Pages Company, for ratemaking purposes: 1) the PUC erred as a matter of law when it ruled that the 2000 directory publishing agreement (DPA) was unjust and unreasonable because it did not reserve for the benefit of Verizon and its ratepayers any value from the directory publishing enterprise; (2) the PUC erred as a matter of law when it  imputed at least $23.3 million in revenues earned by the Yellow Pages Company to Verizon; and (3) the PUC unsustainably exercised its discretion by imposing a $1,000 penalty upon the Verizon for its failure to file the 1999 amendment.

The Court held that a 1999 DPA was not filed with the PUC as mandated under RSA 366:3 and was unenforceable under RSA 366:4 thus, it could not modify the DPA entered into in 1991.  Therefore, the 1991 DLA was still in effect through 2000 along with its requirements for revenue sharing payments with Verizon.  The Court rejected Verizon’s argument that the PUC was “collaterally estopped” from ruling that the termination of the 1991 DLA was unjust and unreasonable noting that the PUC has the power and authority to investigate any contract between a public utility and affiliate and if it finds any contract to be unreasonable, it may make any order required for the public good.  Additionally, the Court held that the PUC found sufficient evidence that value continued to flow to the Yellow Pages Company from its affiliation with Verizon and that Section 226 of the Telecommunications Act of 1996 does not prohibit revenue sharing between a public utility and its affiliate.

The Court then held that while RSA 366 does not impose the remedy of imputation, RSA 366:5 does grant the PUC the power to make any order required for the public good when a contract is found to be unjust and unreasonable.  The PUC in this case determined that imputation was the most reasonable remedy to make the ratepayers whole and it was consistent with the public good.

Finally, the Court upheld the PUC’s fine of $1,000 against Verizon for failing to file the 1999 DPA amendment as required by RSA 366:3 as the PUC was authorized by statute to do so.

Landlord/Tenant

John Simpson v. Daniel Young, No. 2004-700

Appeal from Laconia District Court

Affirmed in part; reversed in part; and remanded.

Issue: Defendant interfered with plaintiff’s property and premises in violation of RSA 540-A:3, I-III.  The trial court issued an ex parte order restoring the plaintiff’s property and the premises to him and scheduled a hearing on the matter.  Between the time of the order being issued and the order being served on defendant, the defendant committed several other violations of the plaintiff’s property and premises.  Plaintiff was awarded damages of $1,000 in Laconia District Court for defendant landlord’s violations.  Plaintiff appealed the trial court’s refusal of enhanced damages pursuant to RSA 540-A:4, IX and RSA 358-A:10 and the trial court’s decision not to find the defendant in contempt.

The Court held that the trial court erred in not awarding damages for more than one day because it is irrelevant when the defendant received notice of the trial court’s temporary orders to determine when the defendant began interfering with the plaintiff’s premises or personal property. The trial court was required to award damages to the plaintiff for each day the defendant violated RSA 540-A:3, I-III.  The Court remanded to the trial court and to award Plaintiff $34,000 or $1,000 for each day of the defendant’s violation of RSA 540-A:3, I-III.

The Court rejected the plaintiff’s assertion that he should be awarded enhanced damages under RSA 540-A:4, IX and RSA 358-A:10.  The Court noted that the statute does not classify a violation of RSA 540-A as an “unfair or deceptive act or practice” as defined in RSA 358-A.  Furthermore, the plaintiff did not argue that the violation of RSA-540-A is considered an “unfair or deceptive act or practice.”  The Court also held that the plaintiff, even though he proceeded pro se at the trial court, was entitled to his attorney’s fees per RSA 540-A:4, IX.  Plaintiff was allowed to file an affidavit with the Court detailing his costs and attorney’s fees. Finally, the Court held that the trial court was not obligated to find the defendant in contempt of the final order and that the trial court did not misapply its discretion in doing so.

Judicial Conduct

State v. Walter Ellis, No. 2004-730

Appeal from Rochester District Court, December 28, 2005

Affirmed.

Issue: Defendant appealed trespassing conviction and argued that the trial court erred in not granting his motion for recusal .  Defendant was represented by a non-lawyer representative who asked the judge to recuse himself prior to the commencement of the proceedings as the judge had represented the non-lawyer in a matter twenty-four years ago.  The judge determined there was no conflict as the non-lawyer was not a party to the matter and the judge had no prior contact with the defendant.

The Court rejected the defendant’s argument that the judge erred by not disclosing the prior relationship with non-lawyer representative and by refusing to recuse himself.  The representation in question occurred twenty-four years ago and the judge had to be reminded of the representation.  The prior representation was disclosed at the beginning of the proceedings by the non-lawyer representative and was considered by the judge before further proceedings took place.  The primary purpose of disclosure, the danger that either party would have been deprived of the opportunity to argue in favor of recusal, was satisfied as all parties were present.  The Court also noted that the representation in question had no relation to the current matter and therefore it was not necessarily improper for the judge to preside over the case.

Municipal Law

Town of Hinsdale v. Town of Chesterfield, No. 2004-802

Appeal from Cheshire Superior Court

Affirmed.

Issue: The defendant appealed the decision of the trial court ruling that reversed the defendant’s town meeting vote to close a portion of a class V highway under RSA 231:45-a, I.  The defendant’s two issues on appeal were that: 1) the trial court applied an incorrect legal standard; and 2) the facts do not support the court’s determination.

Both parties in the matter agreed that RSA 231:48 applies to the review of the defendant’s vote to close a portion of the highway.  The Court noted in reviewing the statute that it was ambiguous as to the type of review to be made by the superior court.  Because there was nothing in the legislative history of the statute nor any case law to determine the standard set forth in the statute, the Court determined the appropriate legal standard by considering the policy sought to be advanced by the statutory scheme.  By discerning the Legislature’s intent, the Court further reasoned that the proper legal standard in this matter must take into consideration the burden that the plaintiff would bear in continuing the road.  Therefore, the Court felt that the legislature intended for appeals for layout and discontinuance to have similar legal standards, however, the Court invited the Legislature to adopt a different standard by amendment should the Court’s holding be converse to that of the Legislature’s.

The Court held that the standard in reviewing a trial court’s decision in a discontinuance appeal should be the same standard in reviewing a trial court’s decision in a layout appeal. The Court in reviewing the record determined that the trial court applied the proper balancing test and that there was more than sufficient evidence to support the superior court’s decision.

Bio Energy, LLC v. Town of Hopkinton, No. 2004-847

Appeal from Merrimack Superior Court, December 30, 2005

Affirmed in part, reversed in part and remanded.

Issue: Town of Hopkinton appealed a decision by trial court concerning plaintiff’s use of construction and demolition woodchips (C & D woodchips) as a fuel source.  On appeal, the town argued that the trial court was in error: 1) by ruling that the town was preempted by State air emissions statutes from exercising control over local land use issues; and 2) by dismissing its claim that the use of woodchips derived from C & D debris as a fuel source constituted a change of use, thereby requiring Bio Energy to obtain new local permits.  The plaintiff cross-appealed alleging the trail court was in error by: 1) dismissing its claim of an unconstitutional taking and its request for attorney’s fees and costs; and 2) by failing to rule on its claim that it had not acted outside the scope of the December 2001 building permit.

The Court held that the town did not have the authority to issue a cease and desist order due to emissions generated by plaintiff’s facility because the area of air pollution regulation was preempted by the State.  Also, the Court held that the trial court was not in error when it dismissed the town’s claim concerning the use of the construction and debris woodchips as a fuel source.  The Court reasoned that the use of the woodchips did not substantially change the nature of the plaintiff’s original use of woodchips as a fuel source when the plaintiff first applied for a permit with the town.

On the plaintiff’s cross-appeal, the Court held that the town’s cease and desist order was not arbitrary and unreasonable in the context of a takings analysis and thus the trial court was not in error.  However, the Court remanded the issue of the plaintiff’s attorney’s fees back to the trial court as the Court felt that the issue was sufficiently ripe to be adjudicated.

Finally, the Court agreed that plaintiff’s request that the trial court rule on whether the plaintiff was acting outside the scope of its building permit the issue was not ripe for consideration.  Such a determination could not be made until the town actually tried to apply its regulations to the plaintiff’s building permit. 

Bankruptcy/Summary Judgment

Dalton Hydro, LLC v. Town of Dalton, No. 2005-195

Appeal from Coos County Superior Court, December 29, 2005

Reversed and remanded.

Issue: Plaintiff filed a timely application for abatement with the defendant, asserting that taxes assessed on its property were illegal, excessive, disproportionate, and unjust.  At the time the property was part of a bankruptcy proceeding and a trustee was appointed.  Defendant moved for summary judgment arguing that the town had met its obligations under statute and that the plaintiff forfeited its right by failing to return the tax inventory blank.   Plaintiff argued on appeal that: 1) the trial court erred in granting the town’s motion for summary judgment because material issues of fact existed; 2) the town had actual notice that Dalton Hydro would become the owner of the property prior to the statutory cutoff date for the mailing of inventory forms, and, thus, could not rely upon its mailing of an inventory form to American Paper to defeat Dalton Hydro’s right to seek an abatement; 3) the town failed to meet its statutory obligations as to Dalton Hydro because it relied solely upon county land records to establish property ownership, despite having actual knowledge that those records were incorrect; and 4) the interpretation and application of the relevant statute by the trial court violated the Due Process Clauses of the United States and New Hampshire Constitutions.

The Court found that the defendant was aware that the plaintiff’s property was part of a bankruptcy estate when it filled a proof of claim with the bankruptcy court seeking taxes on the property, which was paid in full.  Therefore, since the defendant was aware that the property was part of a bankruptcy estate, it should have mailed the tax inventory blank to the trustee.  The Court reversed the superior court’s ruling and remanded.  The Court did not address the plaintiff’s other three arguments.

Statute of Limitations

Juan Perez v. Pike Industries, Inc., No. 2005-064

Appeal from Merrimack Superior Court:

Affirmed.

Issue: Plaintiff injured his ankle on the edge of a State highway.  Three years later, plaintiff filed suit against the Department of Transportation alleging negligence on behalf of the State and its agents and employees.  One year later, plaintiff moved to add Pike Industries, Inc. alleging that it was a subcontractor to the State and may therefore be liable for the condition that lead to plaintiff’s injury.  The trial subsequently dismissed the plaintiff’s claims against the Department of Transportation.  Defendant made a motion to dismiss plaintiff’s claims on the grounds of the statute of limitations.  Trial court granted defendant’s motion.  Plaintiff appealed the trial court’s dismissal arguing that his claim was not barred by the statute of limitations for the following reasons: (1) the discovery rule exception in RSA 508:4, I, applies; and (2) his initial writ named Pike as a party by its reference to the “agents, servants, and employees” of the State.

The Court disagreed that the discovery rule exception applied in this case.  The Court noted the discovery rule exception will not apply unless the plaintiff did not discover, and could not reasonably have discovered, either the alleged injury or its causal connection to the alleged negligent act.  The plaintiff did not dispute that he was of aware of the injury when it occurred, rather the plaintiff argued that the discovery rule should apply because when the injury occurred, the plaintiff could not have known that the State subcontracted out the construction for that portion of the highway and that the plaintiff could not have known the identity of the contractor.  The plaintiff therefore argued that that the statute was tolled until he ascertained this information. The Court also noted that the plaintiff should have known to include the defendant as a possible subcontractor who paved the portion of the highway where he was injured. 

The Court rejected the plaintiff’s argument that he implicitly named the defendant when he named the State’s “agents” in his initial writ and moved to amend his writ to add the defendant.  The Court reasoned that in this case, by allowing the plaintiff to amend his writ to include the plaintiff after the statute had expired would prejudice the defendant.  Furthermore, the Court was not aware of any precedence that would make a generalized allegation of potential defendants specific enough to qualify one as a named party.  The Court reasoned that such a position would undermine the applicable statute of limitations.

Judicial Estoppel

Barry Cohoon v. IDM Software, Inc., No. 2004-816

Appeal from Rockingham Superior Court, December 15, 2005:

Affirmed in part; reversed in part; vacated in part; and remanded.

Issue: The defendants appealed the orders of the trial court granting the plaintiff’s motion for summary judgment.  The plaintiffs filed in this matter filed suit over improperly registered shares of stock.  The defendants filed suit against their counsel for malpractice and asserted as damages, their exposure to shareholder claims and more specifically liability for claims of rescission.  The defendant-attorneys in the malpractice suit moved to exclude evidence of rescission damages.  The malpractice suit was settled before the motion was ruled on.  The plaintiffs, in this matter, moved for summary judgment asserting an action for rescission against all principal defendants, breach of majority shareholders’ duty, and a claim captioned “PLEA OF LAW – JUDICIAL ESTOPPEL” against IDM.”   The trial court granted summary judgment to the plaintiffs under the doctrine of judicial estoppel.  The defendant’s filed a motion for reconsideration; however, the trial court ruled that summary judgment for the plaintiffs was proper under the doctrines of judicial estoppel and equitable estoppel.  The plaintiff’s cross-appealed that the doctrine of judicial appeal applies in this case.

The Court rejected the plaintiff’s argument that the doctrine of judicial appeal does not apply in this case.  The Court noted that the doctrine of judicial estoppel prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase.  The Court found that the trial court correctly determined that the first element of judicial estoppel was present, namely that the defendant’s took a position in the present suit that was inconsistent with the position taken in the malpractice suit. 

The Court reasoned that the second factor of the doctrine was met because the defendants represented before the court in the malpractice suit that the corporation had an outstanding liability to the shareholders for their rescission rights and the court in the malpractice suit accepted that position when ruling on the exclusion of that evidence.

Finally, the Court rejected the defendants’ argument that the third element of judicial estoppel is not met because the defendants gained no unfair benefit and the plaintiff’s suffered no unfair detriment.  The Court noted that if the defendants were allowed to maintain an inconsistent position regarding the rescission rights, the plaintiffs would not have those rescission rights even though the defendants used those same rights to gain a settlement in the malpractice suit.  Without those rescission rights, the plaintiff would be subjected to unfair detriment since they would likely not be able to achieve creditor status without claims to rescission.

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