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Bar Journal - Summer 2006


Lex Loci: A Survey of New Hampshire Supreme Court Decisions

By:

        In a major case, Appeal of the Town of Nottingham, opinion issued May 19, 2006,2 the Court, speaking unanimously in a crackerjack opinion authored by Justice Dalianis, waded into the area of water rights law and upheld the granting of a permit by the Department of Environmental Services (DES) for “a large groundwater withdrawal permit….proposing to withdraw up to 439,200 gallons of water per day” from groundwater in the Town of Nottingham.  Before the Court was a long-running battle which began with a groundwater withdrawal application of USA Springs to the DES in May of 2001 and was finally concluded just about five years later with the Court’s recent opinion.

        Many issues were before the Court and were deftly dissected by Judge Dalianis’ opinion.  The case involved “the application of and interplay among various State statutes, as well as claims under administrative rules, the common law and the Federal and State Constitutions.”  The Court first held that the provisions of RSA 485-C, the Groundwater Protection Act, were applicable to the proposed withdrawal and that Chapter RSA 481, State Dams, Reservoirs and Other Water Conservation Projects, did not control and that “no other public trust test must be applied” as RSA 481 would have required.

        Taking up the issue of whether the applicant had to apply for a dredge and fill permit under RSA 482-A, the Court concluded that it did not since the dredge and fill statute did not speak in terms of the removal of “water” from wetlands, banks, etc.

        A key issue was whether or not the granting of a large groundwater withdrawal permit to the applicant was “an unconstitutional taking of property in violation of the State and Federal Constitutions.”  After a careful review of cases from many other jurisdictions, the Court rejected the claim that compensation was required because “the right to use water does not carry with it ownership of the water lying under the land….[T]he right of user is not considered ‘private property’ requiring condemnation proceedings unless the property has been rendered useless for certain purposes,” quoting the Florida Supreme Court.3

        Confronting the issue of whether an adjudicated hearing was required under the provisions of 485-C, the Court held that entitlement to notice of the proceedings and the opportunity to submit comments to the agency did not make an individual or entity a party to the proceedings for the purposes of bringing into play the contested case provisions of the law.  The Court rejected the claims of a public interest group [SOG—Save Our Groundwater] to the contrary, ruling that “it is not this Court’s function to ‘prod’ administrative agencies to engage in activities not authorized by their governing statute.”

        There were several other issues of lesser importance before the Court, all of which were, of course, important to the parties, which the Court decided in the applicant’s favor.  This case makes clear that, if anyone needed to be reminded of it, in the 21st century the right of access to good potable water will be a powerful influence in the development of our state and that bottled water itself represents a commodity of substantial value.

        Several domestic relations cases (doesn’t that sound pretty quaint these days?) were recently before the Court, including several cases of first impression.  In The Matter of Bazemore and Jack, opinion issued April 11, 2006, a case with which all divorce practitioners can relate, the petitioner complained that she was denied due process and equal protection under the law because there was “an unfair bias against her by the trial court, and [because of] the ineffective assistance of her attorney….[she presented] a series of unsupported grievances and accusations regarding the marital master, the trial court, and her attorney.”  (Does that sound familiar to you divorce attorneys?)  In this case, however, the Supreme Court established for the first time that the rule concerning the imputation of income to a party to hold that RSA 458-C:2, IV(a) permits rather than requires a court to impute income to a party based upon a voluntarily underemployed parent’s prior earnings.

        In The Matter of Harvey and Harvey, opinion issued April 26, 2006, the Supreme Court for the first time established the rule that the property settlement of a divorce decree was usually to be paid at once and not over a period of time, unless there were extenuating circumstances, even if the application of this rule required the sale of the assets of the parties.

        Contrast In The Matter of Beal and Beal, opinion issued April 11, 2006, where the Court held that the divorce statute gave no authority for a superior court to order the sale of property in a divorce matter, pointing out that the statute authorizes trial courts only to distribute marital property between the parties: “[N]othing in this statute authorizes trial courts to order a sale of the parties’ marital assets to pay their creditors.”

        In D’Antoni v. Commissioner, New Hampshire Department of Health and Human Services, opinion issued June 14, 2006, the Court addressed the issue whether the $45 fee established by RSA 457:29 to obtain a marriage license was a fee or a tax, since the statute provided that $38 of the  $45 was to be paid to the Department of Health and Human Services to fund domestic violence programs (DOVE Fund).  The plaintiffs alleged that the $38 portion of the marriage license cost was a tax and not a fee as the state alleged.  As such, the plaintiffs claimed that it violated Part I, Article 12 and Part II, Article 5 of the State Constitution.  The Court held that “to be considered a ‘fee,’ the amount paid to acquire a business license, for example, must bear a relationship to and approximate the expense of issuing the license and of inspecting and regulating the business licensed.”  The plaintiffs argued that the $38 charge was not related to the costs of issuing a marriage license or to the regulation of marriages.  The Supreme Court relied on evidence presented by the state that the actual cost to the state of issuing a license was approximately $40.44 and, therefore, upheld the trial court’s ruling that “any money generated by RSA 457:29 for use in the [DOVE Fund] is less than the amount of money that the State spends in connection with issuing the license.”

        A couple of cases can be mentioned briefly.  The Cadle Company v. Dejadon, opinion issued April 21, 2006, makes clear that an action on an unsatisfied mortgage note is subject to the twenty year statute of limitations established for such indebtedness by RSA 508:6.  The defendant had argued that the six-year statute of limitations applied and that because a foreclosure had occurred more than six years before the suit on the note was begun, the six year statute of limitations extinguished the plaintiff’s claim.  The Court held, however, that if a note remains unpaid by foreclosure of the mortgage or otherwise, the mortgage is not discharged and the 20-year rule applies.

        In K & B Rock Crushing, LLC  v. Town of Auburn, opinion issued May 19, 2006, a case involving the application of RSA 155-E, which establishes a procedure for the granting of excavation permits by towns, the Court ruled that a motion for rehearing is required before an appeal to the superior court can be made under the statute.

        A significant case of first impression involving the psychotherapist-patient  privilege created by RSA 330-A:32 was before the Court in Desclos v. Southern New Hampshire Medical Center, opinion issued June 9, 2006.  The plaintiff brought a suit for medical negligence claiming that she sought treatment from the defendants who failed to recognize her symptoms of spinal cord  injury and, as a result, she claimed that she suffered irreversible quadriplegia.  The suit claimed damages, including pain and suffering, loss of earning capacity, and loss of enjoyment of life.  The defendants sought discovery of all of the plaintiff’s psychiatric and psychological records before the accident date.  They had already received such records belonging to the plaintiff for the period of time after the accident.  The plaintiff claimed her psychiatrist-therapist privilege.  The trial court granted the discovery motion of the defendants because the records were “clearly relevant to the issue of damages in regard to pain and suffering and loss of enjoyment of life.”  In a unanimous opinion for the Court by Justice Galway, the Court held that the disclosure of privileged information may only occur when (1) the Court finds a waiver of the privilege, or (2) the Court orders a piercing of the privilege.  On the issue of waiver, the Court rejected the defendant’s argument that the plaintiff had impliedly waived her psychological-patient privilege by claiming damages for loss of enjoyment of life, loss of earning capacity and pain and suffering.  The Supreme Court concluded that if the patient had put the confidential communications at issue by injecting the privileged material into the case, there would be a waiver but the Court held that the trial court must first examine the documents in question in camera to determine if the mental suffering for which the plaintiff claimed damages involved only generic mental suffering damages.  Such a general claim would not create waiver of the psychotherapist-patient privilege.

        Concerning the piercing of the privilege, the Court recognized that the privilege was not absolute and must yield when disclosure of the information concerned is considered “essential.”  However, the party seeking to pierce the privilege must first “establish a reasonable probability that the records contained information that is material and relevant to” the parties defense or claim and that determination by the trial court must be made after an in camera review of the information.  If “the trial court [finds] that if the parties seeking to pierce the privilege successfully shows the information sought is essential, the trial court should conduct an in camera review…The trial court’s responsibility during this review is to limit the disclosure of privileged information to that which is relevant to the purpose for which the disclosure was ordered.”

        The seldom encountered doctrine of unconstitutional conditions was before the Court in Gonya v. Commissioner, opinion issued May 18, 2006.  In a scholarly opinion by Justice Duggan, the Court unanimously upheld the New Hampshire Insurers Rehabilitation and Liquidation Act, RSA 402-C, which establishes procedures for the liquidation of insolvent or otherwise financially troubled insurance companies.  The plaintiffs, the estates of deceased tort claimants, argued that the statute unconstitutionally conditioned their ability to file a claim directly against the insurance company in liquidation by requiring them to relinquish their causes of action against the insureds.  The Court was quite circumspect in its analysis, pointing out that it was “not convinced that the doctrine of unconstitutional conditions is applicable to this case,” or that it had ever “expressly adopted the doctrine of unconstitutional conditions or applied it under the State Constitution.”  What is this rarely seen doctrine?  The Court defined the doctrine as barring “government from arbitrarily conditioning the grant of a benefit on the surrender of a constitutional right, regardless of the fact that the government appropriately might have refused to grant the benefit at all,” citing to a First Circuit case.4  The Court pointed out, however, that even if the doctrine were applied, not all conditions were prohibited.  If a condition was “sufficiently related” to the benefit, then it may be validly imposed.  The Court concluded that “RSA 402-C:40, I, does not violate the doctrine of unconstitutional conditions because the condition is germane to the legitimate legislative objectives of the statute.  Any burden on the rights of potential third party claimants imposed by RSA 402-C:40, I, is not unreasonable or arbitrary.”

        Hall v. Dartmouth Hitchcock Medical Center, opinion issued April 25, 2006, is a medical malpractice case “alleging negligence resulting in the wrongful birth of [the plaintiffs’] son who was born with a rare chromosomal disorder.”  The trial court had denied the hospital’s motions for directed verdict, judgment notwithstanding the verdict, and to set aside the verdict, but a unanimous Supreme Court reversed, based upon a factual analysis of the case.  The facts make excruciating reading since the parents were confronted with several decision points whether or not to terminate the pregnancy of a fetus which appeared to have a substantial risk of serious abnormalities.  The Court held that the hospital, through its physicians, was not required to identify and disclose every chance, no matter how remote, of the occurrence of a possible defect, no matter how insignificant.  The Court held it was sufficient, and the hospital had met its duty in this regard, that it inform the parents, in a timely fashion, of an increased possibility that the mother would give birth to “a child with severe birth defects.”

        In State v. Fichera, opinion issued June 9, 2006, a split Supreme Court had before it “New Hampshire’s unique insanity defense” which the Court has long recognized as a question of fact for the jury.  The majority first reiterated the rule that an insanity defense can be proven by lay testimony and that expert testimony is not required, and extended that rule by holding that it was improper for the trial court to grant the State’s motion to strike the insanity defense before trial, stating that the “defendant’s offer of proof was sufficient to give notice of his intent to raise an insanity defense and the grounds upon which he based that defense.”

        The number of schemes of which automobile dealers have invented to sell new automobiles to consumers never ceases to amaze the author.  In DaimlerChrysler Corporation v. Victoria, opinion issued June 14, 2006, the Court had before it an interpretation of the New Hampshire Lemon Law, RSA 357-D:3, V, which authorizes the New Motor Vehicle Arbitration Board to refund to consumers the full purchase price for a new motor vehicle that does not conform to a warranty.  It was inarguable that the respondents that the 2004 Dodge Neon SXT purchased by the respondent from an independent authorized DaimlerChrysler dealer was a lemon “because oil continually leaking into the coolant system of the vehicle, a problem that he had attempted to have repaired by the dealer three times.”  The arbitration board was confronted with a scheme of the dealer by which the trade-in value of a vehicle was substantially inflated higher than the trade-in vehicle’s appraisal.  This was designed to conceal the negative equity on the trade-in vehicle in order to enable the consumer to obtain a new and higher loan with which to purchase his new vehicle.  The dealer then inflated the purchase price of the new vehicle and documented the fraudulent vehicle price on the retail installment contract as $19,002.04.  The board had said that that this price controlled and that the dealer was obligated to pay to the customer the full purchase price, as shown on the contract, and not the actual lower purchase price paid by the purchaser.  The Supreme Court disagreed with the trial court and rejected that claim, holding that, “in the absence of an explicit legislative directive, we decline the board’s request to transform the Lemon Law into a mechanism for policing such practices between a dealer and consenting customer.  Accordingly, we conclude that the board exceeded its powers by adopting the inflated vehicle price as set forth in the retail installment contract.”

        Perhaps the automobile “dealer” [or more properly “wheeler-dealer”] did not “deal with a full deck.”  He got a “raw deal” from the arbitration board when he gave the buyer a “sweetheart deal,” but the Supreme Court obviously concluded that it was no “big deal.”

 

ENDnotes

1.     Safire, On Language, New York Times Magazine, June 25, 2006, p. 16.

2.     The author’s firm previously represented a party to the action and, therefore, the author’s views may be colored.

3.     Village of Tequesta v. Jupiter Inlet Corp., 371 So. 2d 663, 668 (1979).

4.     National Amusements, Inc. v. Town of Dedham, 43 F.3d 731, 747 (1st Cir. 1995).

 

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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