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Bar News - November 8, 2002 NH Supreme Court Opinion Summaries
FEDERAL ARBITRATION ACT - PURCHASE AND SALE CONTRACT - WARRANTY CONTRACT DUGGAN, J. The defendant appealed from a jury verdict in favor of the plaintiffs as to whether the superior court (Fitzgerald, J.) erred in failing to take notice of the Federal Arbitration Act, 9 U.S.C.A. §§ 1 et seq. (1999 & Supp. 2001), when it granted the plaintiffs' motion to amend and permitted the case to proceed to trial on the merits. The supreme court affirmed. When purchasing their manufactured home, the plaintiffs signed a purchase and sale contract and purchased a separate ten-year warranty contract. Both contracts included an arbitration provision. The plaintiffs, who were dissatisfied with the condition of the home and with the repairs, sued the defendants for breach of the purchase and sale contract. On a motion to dismiss, the defendant asserted that the plaintiffs should be compelled to arbitrate. The plaintiffs filed a "Motion to Amend as to Arbitration," asserting that no warranty contract was issued. As to the defendant's argument that the trial court ignored the mandates of the Federal Arbitration Act, 9 U.S.C.A. §§ 1 et seq., the supreme court stated that the trial court did not have to reach the issue of whether the Federal Arbitration Act required any dispute arising out of the warranty contract to proceed to arbitration, because the court found that the plaintiffs had alleged sufficient facts to establish waiver or grounds for revocation of the warranty contract. See 9 U.S.C.A. § 2. The supreme court declined to address the defendant's argument that the trial court erred when it failed to enforce the arbitration provision of the purchase and sale contract, because the defendant failed to preserve the issue.
UNINSURED MOTORIST PAYMENTS DUGGAN, J. The defendant appealed a superior court (Fauver, J.) order declaring the defendant may not reduce uninsured motorist benefit payments to the plaintiffs by the amount recoverable from the uninsured tortfeasor. The supreme court affirmed. A woman was injured in an automobile accident. She and her husband carried uninsured motorist protection issued by the defendant, that had a recovery limit of $100,000. After settlement with the tortfeasor for $50,000, an uninsured motorist arbitration panel placed the plaintiffs' total damages at $225,000. The defendant reduced the plaintiff's $100,000 in coverage by the $50,000 settlement, leaving $50,000 available in uninsured motorist benefits. The superior court found that the policy language did not entitle the defendant to offset the tortfeasor's settlement. The supreme court addressed the defendant's argument that the insurance policy's language is unambiguous, and that the Trust Agreement provision of the policy allowing for an offset applies to the entire policy. Although the court agreed that the Trust Agreement provision permitted Prudential to offset the plaintiffs' recovery from the tortfeasor, the court stated that the policy had to be read as a whole, and construed as would a reasonable person in the position of the insured, based on more than a casual reading of the policy. Brouillard v. Prudential Prop. & Cas. Ins. Co., 141 N.H. 710, 712 (1997). The Payments Reduced provision of the Uninsured Motorists booklet allowed for a reduced payment only when the plaintiff's recovery exceeds the amount of the plaintiff's damages. After determining that the booklet superceded the general Trust Agreement, the court concluded that Prudential could reduce the uninsured motorist benefits only if there would otherwise be a recovery in excess of the damages. The court held, therefore, that Prudential was not entitled to offset the plaintiffs' benefits.
WATER AND SEWER REQUIREMENTS - STATE STATUTES - TOWN ORDINANCES DALIANIS, J. The plaintiff appealed from the superior court (Smith, J.) order denying his petition for a declaration that: (1) the water and sewer rates and availability charge of the defendant, the Town of Canaan, violate State statutes and the town's water ordinance; and (2) the town has failed to comply with State statutory water and sewer sys tem reporting requirements. The supreme court affirmed. The plaintiff was billed a minimum charge for water and sewer service to a building he used for storage. He objected to paying the charge, claiming it was unfair and excessive. The town discontinued his water and sewer service in June 1998, and billed him thereafter a quarterly availability charge of $20.00. The supreme court looked to RSA chapter 38, which governs water rates, to determine that towns are permitted to assess persons who are served by the water system. RSA 38:27 (2000). Additionally, the court determined that water rates may be based upon consumption of water on the premises, number of people served on the premises, or "upon some other equitable basis." RSA 38:28 (2000); RSA chapter 149-I:7-:8 (1996) (comparable statutes for sewer rates). Addressing the plaintiffs first argument that the town's minimum water and sewer rates violate the State statutes because they are inequitable, the supreme court found that evidence supported the trial court's ruling that the minimum rates helped maintain rate stability and defray fixed costs of product delivery. The court upheld the $20.00 per quarter fee as just. The court found the plaintiff's assertion that equitable rates must be based upon use to contradict the plain language of the statutes. The court disagreed with the plaintiff's assertion that minimum rates violate the town's water ordinance because they are used to support operating expenses in addition to administrative costs. Instead, the court stated that using minimum rates to support operating expenses is consistent with the purpose of the ordinance. Finally, the court disagreed with the plaintiff's argument that the town failed to comply with the reporting requirements of RSA 38:21 (2000) and RSA 149-I:25 (1996). The court found the commissioners' reports, published in the town's annual reports, to satisfy the statutory requirements.
ANTITRUST STATUTES DALIANIS, J. The plaintiffs appealed an order of the superior court (Lynn, J.) dismissing their claim against the defendant for allegedly violating New Hampshire's antitrust statute. RSA ch. 356 (1995). The supreme court affirmed. As a precondition to using "Windows 98" operating systems, the plaintiffs were required to enter into an "End User Licensing Agreement" (EULA), which was included with the software. The plaintiffs sued the defendant under the State's antitrust statute, RSA 356, for willfully acquiring monopoly power and setting inflated prices in the computer operating systems market in New Hampshire. The plaintiffs alleged damages due to unfair and unconscionable prices for "Windows 98" operating systems. On appeal, the plaintiffs first argued that the plain language of RSA 356:11 reveals that the legislature intended for them to recover under the antitrust statute. In considering this argument, the supreme court looked to federal antitrust law, 15 U.SC. § 15(a) (1994) (the Clayton Act), to construe RSA chapter 356. Using a seminal case, Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977), the court reasoned that the direct purchaser, and not others in the distribution chain, is the party injured within the meaning of the Clayton Act. The court concluded that it is sound to limit antitrust lawsuits to direct purchasers, and thus found that the trial court did not err in following Illinois Brick. Next, the supreme court considered the plaintiffs' argument that the Illinois Brick rule violated their constitutional right to receive a remedy for their injuries under Part I, Article 14 of the State Constitution. Disagreeing with the plaintiffs, the court stated that the distinction between direct and indirect purchasers in antitrust actions under RSA 356:1 is not an arbitrary or discriminatory infringement of access to the courts. Therefore, the court supported the trial court's position that the state constitution was not violated. As to the plaintiffs' argument that the legislature could not have intended for New Hampshire to follow Illinois Brick, the court rejected the position that because a federal case had not been decided at the time of the enactment of RSA chapter 356, the legislature did not intend for the state to follow it. The court further disagreed with the plaintiffs' assertion that because they entered into EULAs with the defendant to use the "Windows 98" operating system, they are not purchasers of the product. Instead, the court stated that the plaintiffs did not purchase their products directly from the defendant, and they were not, therefore, direct purchasers for purposes of Illinois Brick. Finally, the court disagreed with the plaintiffs' argument that they were entitled to bring their antitrust action pursuant to exceptions in Illinois Brick. The court explained that its review is limited to the record, and concluded that the plaintiffs stated no cognizable claim under either exception in Illinois Brick. The court acknowledged certain policy implications of construing RSA chapter 356 in harmony with the Illinois Brick rule, but stated that such policy issues should be left for the legislature to decide.
HARASSMENT - PRIOR BAD ACTS BROCK, C.J. The defendant appealed his conviction of harassment, RSA 644:4, I(e) (Supp. 2001), after a jury trial in Concord District Court (Robbins, J.). The supreme court affirmed in part, reversed in part, and remanded. The defendant was responsible, under a court order, for child support payments. During a call to the Division of Child Support Services (DCCS), the defendant yelled and threatened violence. The defendant was charged with one count of harassment, RSA 644:4, I(e), and two counts of criminal threatening, RSA 631:4, I(b) (1996). Prior to trial, the defendant moved to suppress proffered evidence of a bad act. The trial court admitted the evidence under Rule 404(b). After sentencing, and while the appeal was pending, the trial court denied the defendant's request for the trial court to determine whether he had satisfied the terms of his deferred sentence. On appeal, the defendant first argued that the trial court erred in admitting evidence of prior bad acts. The supreme court stated that prior bad acts evidence is admissible when it is relevant for a purpose other than proving the defendant's character or disposition; there is clear proof that the defendant committed the act; and the probative value of the evidence is not substantially outweighed by its prejudice to the defendant. See State v. McGlew, 139 N.H. 505, 507 (1995). The court found that the prior bad acts evidence was relevant to proving the elements of both charges against the defendant. The court agreed with the trial court that the prior statement was probative of the defendant's intent, and found that there was a logical connection of the prior bad act to the charged act. The court held that the evidence was admissible to prove the charge of harassment. The plaintiff next argued that the trial court erred in refusing to determine whether to suspend the defendant's deferred sentence on the basis that it had no jurisdiction. The court stated that an appeal to the supreme court does not automatically suspend execution of a sentence. Nothing in the record that showed either the State or the defendant requested a stay, or that the trial court stayed the sentence. Thus, the six month deferral period began to run at sentencing.
SEXUAL HARASSMENT DALIANIS, J. The defendant appealed from an order of the Superior Court (McGuire, J.) setting aside a decision of the New Hampshire Commission for Human Rights (HRC) awarding her damages for sexual harassment that occurred while she was working for the New Hampshire Department of Corrections (DOC). The Supreme Court affirmed. The defendant reported to supervisors that she had been sexually harassed by another correctional officer and then filed a written complaint. On the day of her complaint, a DOC investigator interviewed her separately, about the defendant's allegations. The defendant claimed that the officer harassed her once more. The harassing officer admitted to the defendant's allegations and prepared a written statement in which he formalized his admissions. The defendant was told that the officer would be disciplined for his conduct, and he was removed from his post later that day. Th DOC's investigation found that the harassing officer's conduct was egregious and inappropriate, but also found that the defendant contributed to the sexual harassment by not telling the officer that she was uncomfortable, by not telling him to stop, and by remaining friendly with him. The harassing officer was suspended and warned that future violations would result in termination. The defendant then filed a charge of employment discrimination with the HRC. The HRC determined she had been sexually harassed and that the DOC failed to take adequate remedial action. The superior court set aside the HRC's decision ruling that the DOC took adequate remedial action to address the harassing conduct. On appeal, the defendant first asserted that the superior court's decision should be reversed because she was denied due process. The Supreme Court declined to address the defendant's due process challenge because she never raised the issue of due process be fore the superior court. The defendant next asserted that the decision should be reversed because the DOC's remedial action was legally insufficient. The court looked to remedial action under Title VII to analyze this issue of first impression. The Supreme Court concluded that the trial court did not err in ruling the DOC's remedial action was appropriate under the circumstances.
DIVORCE - ALIMONY - MEDICAL INSURANCE NADEAU, J. The petitioner appealed a decision of the Derry Family Division (Reardon, J.) in her divorce from the respondent. The Supreme Court vacated in part and remanded. During her marriage to the respondent, the petitioner was primarily responsible for managing the parties' household and taking care of their children, while the respondent provided for the family's financial needs. The respondent was diagnosed with depression and related disorders, and was hospitalized for depression and suicidal thoughts. Due to her mental illness, she is unemployable. The petitioner first argued that the amount of alimony awarded by the trial court was "grossly insufficient in both amount and duration." The New Hampshire Supreme Court could not determine, on the trial court's findings and rulings, whether the amount of alimony it ordered represented a sustainable exercise of discretion. Thus, the court vacated and remanded for findings and rulings supporting an appropriate award. As to the petitioner's challenge to the seven-year duration of alimony, the court determined it to be error that the marital master lacked findings or rulings explaining the limitation. The court remanded and instructed the trial court to support time limitations on alimony with specific findings and rulings. Regarding the petitioner's challenge to the insufficiency of the duration of health insurance coverage, the court vacated and remanded for supporting findings and rulings.
PROFESSIONAL CONDUCT - CONTEMPT NADEAU, J. The Supreme Court Committee on Professional Conduct (committee) petitioned for reciprocal discipline proceedings against the respondent, pursuant to New Hampshire Supreme Court Rule 37(10). The committee reported, per the court's request, that the respondent had neither purged himself of two pending contempt orders in Vermont nor had been reinstated to practice law in Massachusetts. In September 2001, the New Hampshire Supreme Court ordered the respondent to refrain from practicing law in New Hampshire for three months, and ordered an attorney to take possession of the respondent's files and trust accounts, inventory them, and take action to protect the clients. The respondent asserted that he had no active New Hampshire clients; however, he had two cases pending before the United States District Court for the District of New Hampshire and one case before the New Hamp shire Supreme Court. The court ordered the respondent to show cause why he should not be held in contempt. The respondent argued that he was the real party in interest. In December 2001, a Referee (Manias, J.) scheduled a hearing for which the respondent was ordered to submit relevant files for cases pending in state or federal courts. The respondent came to the hearing but failed to bring relevant files. The referee found the respondent in contempt of the court's September and December orders and recommended disbarment proceedings. The court found that the respondent violated the September order by continuing to practice law and by submitting his client files. The court found the respondent's argument about the underlying validity of his Massachusetts suspension irrelevant. The court also found the respondent's unwillingness to submit client files to be "willful and blatant" disregard for the court's December order. The court adopted the referee's findings, held the respondent in contempt of both the September and December orders, referred the matter to the committee for disbarment proceedings, extended the respondent's suspension from the practice of law, and assessed the respondent all expenses incurred by the committee for investigation and prosecution of the matter.
EMOTIONAL DISTRESS NADEAU, J. The plaintiff appealed from an order of the Superior Court (Hollman, J.) granting summary judgment to the defendant. The New Hampshire Supreme Court affirmed in part and remanded in part. The plaintiff bought take-out food from the defendant. As she was eating the food, the plaintiff bit into a used "band-aid." She experienced physical and mental revulsion and "extreme anxiety" that she may have contracted an infectious disease. The plaintiff's doctor described the plaintiff as "having anxiety and being emotionally distraught...." The plaintiff did not claim that she suffered any physical injury. On appeal, the plaintiff first argued that "tranquility of mind" is a fundamental interest protected by the State Constitution, and contended that a physical manifestation of anxiety only needed to be demonstrated when a plaintiff seeks to recover for emotional distress under a traditional negligence theory. The court declined to reconsider settled law, and upheld that "before a plaintiff can recover damages for emotional distress pursuant to a negligence cause of action, he or she must prove that physical injury resulted therefrom." Thorpe v. State, 133 N.H. 299 (1990). Because the plaintiff did not suffer physical injury and did not charge the defendant with liability for personal injury, the court ruled that she could not recover. As to the plaintiff's argument that summary judgment was in error because expert evidence was presented as to her physical symptoms, the court found that emotional harm was "absent additional objectively verifiable physical symptoms" precluded recovery. The court found the products liability claim, based upon the negligence of the defendant, untenable. The court remanded the plaintiff's breach of warranty claim.
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