RULES OF PROFESSIONAL CONDUCT – SANCTIONS
No. LD-99-004 – September 6, 2001
Sheridan’s Case

BRODERICK, J. The Committee on Professional Conduct (Committee) filed a petition with this court seeking a public censure against the respondent, William C. Sheridan. The respondent did not contest that his conduct in the handling of a probate estate violated various rules of professional conduct, but argued that a public censure was not justified and that the complaint against him was barred by the statute of limitations.

The referee found by clear and convincing evidence that the respondent had violated New Hampshire Rules of Professional Conduct (Rules) 1.1(a), 1.1(b), 1.1(b)(5), 1.1(c)(4), 1.3(a) and 8.4(a) and that the applicable statute of limitations had not expired. He recommended that the respondent be publicly censured, assessed all expenses incurred by the Committee and required to complete the practical skills course within twelve months. The supreme court adopted the referee’s recommendations.

The executrix of an estate had retained the respondent as counsel. On June 30, 1993, the Hillsborough County Probate Court appointed him Commissioner of the then insolvent estate. Thereafter, the respondent failed to file any accounts on behalf of the executrix, the first of which was due in 1993, and neglected to perform any of his duties as Commissioner between June 30, 1993 and June 30, 1994. In January 1996, the probate court notified the respondent of his numerous defaults. He was granted an extension of time to satisfy his obligations. He nonetheless neglected to meet those obligations. In February 1997, not having cured the defaults, the respondent was removed as counsel to the estate and a new Commissioner was appointed.

The respondent contends that until June 1993 his associate was handling the representation of the estate. He alleges that he was not informed of the various defaults until January 1996, after the dissolution of his law partnership and after he sustained debilitating injuries in August 1994 and in March 1995. He further contends that his representation of the estate, while admittedly deficient, was due in part to the illness and subsequent death of the executrix in August 1996.

The supreme court rejected the respondent’s argument that his challenged conduct in 1993 and 1994 did not support a public censure. The conduct occurred primarily and substantially before the respondent was injured in August 1994 and it was exacerbated by his failure to seek further extension of the filing deadline after the original extension expired. His professional negligence and lack of diligence was, therefore, unrelated to any disability.

The supreme court next addressed the determination of the proper sanctions. In this case, the defendant identifies no viable mitigators. His injuries, although serious and unfortunate, were not the cause of his misconduct. Accordingly, they cannot afford him any protection. Further, although the respondent may have delegated the oversight of the estate to an associate, he remained counsel and Commissioner of record and thus responsible to ensure that the filings were made and duties discharged in a proper and timely fashion.

INSURANCE – REINSURANCE – NOTICE – BAD FAITH
No. 99-473 – September 6, 2001
Certain Underwriters at Lloyd’s London & a. v. The Home Insurance Company

Broderick, J. This case concerns a certificate of reinsurance (reinsurance policy) issued by the plaintiffs and other London reinsurers (collectively, London reinsurers) to the defendant. London Reinsurers refused to reimburse Home for a claim arising under its reinsurance policy and filed a declaratory judgment action to determine whether it was obligated to do so. The superior court ruled that Home breached the notice requirement of the reinsurance policy in bad faith and that London Reinsurers was, therefore, not required to provide reimbursement. The supreme court affirmed.

Home issued a liability insurance policy to the Hanna Mining Company (Hanna), which provided coverage of five million dollars per claim for the period August 1, 1966, through August 1, 1969. Home’s policy was excess to Hanna’s underlying policy with another insurer. Subsequently, the London Reinsurers issued a reinsurance policy to Home. Under the policy, London Reinsurers agreed to indemnify Home up to one million dollars on any claim for which Home was obligated to pay Hanna. According to the terms of the reinsurance policy, Home was obligated to notify London Reinsurers of any claims against Hanna for which coverage might be triggered under its liability policy. In addition, London Reinsurers had the right, after notification of such a claim, to exercise total control over its investigation, processing and disposition.

In 1984, Hanna informed Home that the Blackbird Mine in Idaho, which Hanna owned and operated in the late 1960s, had suffered pollution damage. Because Hanna believed that its liability exposure could be in the millions of dollars, Hanna requested that Home notify all of Hanna’s primary and excess liability insurers. Home, however, did not notify London Reinsurers of this potential loss. In 1995, Hanna settled the outstanding claim and Home paid it under its liability policy. When Home sought reimbursement from London Reinsurers, its request was denied on the basis that it breached the notification and claims control requirements of the reinsurance policy.

The supreme court adopted the Second Circuit’s rule that a reinsurer may be relieved from indemnifying its reinsured if it proves that the reinsured’s late notice was due to gross negligence or recklessness, i.e., bad faith. Such a circumstance can be established upon proof that a reinsured failed to implement practices and controls to ensure proper and timely notice of claims to the reinsurer. The record portrays Home as a bureaucracy lacking effective communication and continuity among departments. As a results, Home did not attempt to finds its "policy file" to determine whether any reinsurance was available until 1995, eleven years after it first received notice of the potential loss at the Blackbird Mine. Further, Home’s attempt to locate the "policy file" came after it made multiple decisions about the Blackbird claim and the pending litigation which, under its reinsurance policy, should have been made by, or at least involved, London Reinsurers.

CRIMINAL – EVIDENCE – OTHER BAD ACTS
No. 99-687 – Sept. 11, 2001
The State of New Hampshire v. Kenneth West

DUGGAN, J. The defendant was indicted for six assaults, which allegedly occurred when the victim was between thirteen and fifteen years old. At trial, the defendant admitted to molesting the victim, but asserted that he did so in Rockingham County, and not in Strafford County as alleged in the indictments.

The defendant first argued that the trial court erroneously admitted testimony concerning his confessions to his mother and to the victim’s mother. He contended that these admissions were evidence of other bad acts and thus inadmissible under New Hampshire Rule of Evidence 404(b).

The supreme court concluded that Rule 404(b) does not apply to the challenged testimony because the testimony was generic and revealed no specific "bad acts" other than those for which the defendant was on trial. Neither the victim’s mother nor the defendant’s mother testified that the admission pertained to any assaults other than those for which the defendant was charged.

The defendant next argued that the trial court erroneously admitted evidence of uncharged assaults. The defendant never objected to this testimony at trial, which is required to preserve an issue for appellate review.

The supreme court rejected the defendant’s argument that certain testimony unambiguously conveyed that the assaults in his parents’ home occurred on more than one occasion. The supreme court agreed with the trial court that the testimony was ambiguous, cumulative and thus not prejudicial.

LABOR RELATIONS – PUBLIC EMPLOYEES
No. 99-707 – Sept. 11, 2001
Appeal of Belknap County Commissioners

Broderick, J. The petitioner appeals a public employee labor relations board (PELRB) decision reversing and remanding an arbitrator’s decision that a grievance brought by the respondent, State Employee’s Association of New Hampshire, Inc., S.E.I.U., Local 1984 (SEA), was not arbitrable. The supreme court reversed.

The SEA is the bargaining representative of certain nursing and non-nursing personnel employed by the Belknap County Nursing Home. On December 31, 1996, the county’s collective bargaining agreement (original CBA) with the SEA expired. The parties executed a successor CBA in September 1997, which was made retroactive to April 1, 1997. In February 1997, after expiration of the original CBA, but prior to the effective date of the successor CBA, the county decided to pay "shift differentials" to non-nursing personnel beginning in January 1997. Before this decision, only nursing personnel were paid differentials for certain shifts. On February 5, 1997, in response to the county’s change in policy, the SEA filed a grievance under article 12 of the original CBA. The SEA claimed that payments should have been made retroactive for the entire period of the original CBA and that they should have been awarded to all personnel, nursing and non-nursing, who worked second and third shifts. The county denied the grievance and, as called for under the original CBA, the parties proceeded to arbitration.

During the arbitration proceeding on February 20, 1998, the county not only addressed the merits of the grievance, but also argued the grievance was not substantively or procedurally arbitrable. The county argued that the grievance was filed during a "hiatus" period between the original CBA and its successor; therefore, no agreement was in effect and the arbitrator lacked authority to reach the merits of the grievance. The county also asserted that the grievance was untimely filed.

The arbitrator concluded that since the grievance was filed during a "hiatus" between the two CBAs, there was no CBA in effect and hence no grievance procedure in place. Thus, he had no authority to rule on the arbitrability of the grievance. On November 18, 1998, the SEA filed an unfair labor practice complaint alleging that the county had violated RSA 273-A:5, I (h) and (i) (1999), by complying with the decision. The county moved to dismiss the unfair labor practice as untimely, and a PELRB hearing officer granted the motion on the grounds that the unfair labor practice had not been filed within the six-month statute of limitations. The officer concluded that the arbitrator’s May 18, 1998 award triggered the unfair labor practice and, therefore, the complaint, which was filed on November 18, 1998, was untimely. The SEA successfully appealed this decision to the PELRB. The board found that the unfair labor practice complaint was filed within six months of the date of the arbitrator’s award. On remand, the hearing officer rejected the county’s argument that the unfair labor practice complaint was untimely as it was filed more than six months after the filing of the grievance, which the county asserted was the triggering event for any alleged unfair labor practice complaint.

The supreme court concluded that the PELRB should have dismissed the unfair labor practice as untimely. In this case, the six-month statute of limitations for filing an unfair labor practice complaint began to run when the county first contested arbitrability. It is undisputed that this occurred during the arbitration hearing on February 1998. Assuming the SEA’s complaint was properly based on the county’s refusal to arbitrate, it was filed in November 1998, after the expiration of the six-month statutory limitation period.

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