May 27, 2020
- Whether the plaintiffs’ claim brought in February 2018 were time-barred or if the discovery rule tolled the statute of limitations; and whether certain evidence was properly admitted or should have been barred by the work-product doctrine.
The plaintiffs appealed an order of the Superior Court dismissing their complaint against the defendants on the ground that their claims are time-barred. The parties have a long and complicated business relationship (and litigation history) dating back to 1999. This litigation pertains to a failed condominium development project.
The relevant facts are as follows: Shepherds Hill Development Company, LLC (the “Development Company”) obtained approval to construct 400 condominium units in Hudson. After work had begun, the real estate market crashed and the Development Company filed for bankruptcy. The Development Company reorganized in the bankruptcy court and created Shepherds Hill Proponents, owned by the individual defendant. As part of the reorganization, the Development Company issued a promissory note to the plaintiff Balzotti’s wife for $714,000, guaranteed by the Proponents and the individual defendant. As units were sold, the note was to be paid down. The note was interest fee if paid within five years. In 2010, Balzotti’s wife issued a demand for payment on the note and forced the Development Company into involuntary bankruptcy. This was dismissed without prejudice because the court found it had been brought in bad faith and Balzotti was ordered to pay attorneys’ fees and punitive damages. By 2011, according to the original condominium declaration, the Association was governed by an elected board. The Development Company made an offer to the board to be granted an additional five years to construct the additional units. The association declined the offer. The Development Company subsequently recorded, without the knowledge or consent of the Association a “Twenty-Fourth Amendment” to the declaration purport three land units only from undeveloped portions of the condominium common area. The Association filed a complaint for declaratory and injunctive relief against the Development Company. The trial court ruled that the Development Company’s right to develop convertible land into condominium units (the Development Right) expired on February 26, 2013 and that the undeveloped land belonged to the association. The Development Company appealed this ruling. While the appeal was pending, the note was reassigned to Global Group, owned by Balzotti. The individual defendant testified that he met with Balzotti in the summer of 2014 to discuss the note and the status of the condominium development.
In February 2018, the plaintiffs sued the Development Company, and the defendants asserting a number of claims regarding the loss of the Development Right. The plaintiff moved to attach condominium property itself to satisfy a potential judgment. Plaintiff sought to only attach the Development Right not the condominium property. The defendants moved to dismiss and argued that the plaintiffs’ claims were time-barred because they were brought more than three years after the Development right was lost. In invoking the discovery rule, plaintiffs argue their claims were timely because Balzotti did not know or reasonably discover that the Development Right had been lost until he learned in 2016 that the N.H. Supreme Court had affirmed the trial court’s 2014 decision. The trial court held an evidentiary hearing to determine when Balzotti knew or should have known about the loss of the Development Right and determined that it was by either February 2013 or the summer of 2014. Therefore, the action was time-barred. The plaintiffs filed a motion for reconsideration and then filed this instant appeal.
Also on appeal was whether the defendants were barred by the doctrine of judicial estoppel from asserting the statute of limitations as an affirmative defense because of representations by the defendants in the 2010 bankruptcy proceedings, which was rejected by the Court. Further, the plaintiffs contested the admission of a timeline of events into evidence at the evidentiary hearing. The Supreme Court held that the timeline contained facts only and therefore is not protected attorney work product or attorney client privilege.
Matthew Johnson, Devine, Millimet, and Branch, Manchester, for the plaintiffs. Emile Bussiere, Jr., Bussiere & Bussiere, Manchester, for the defendant Ernest Thibeault. John Sullivan, Preti Flaherty, Concord, for the defendants, Shepherds Hill Development Co., LLC and Shepherds Hill Proponents, LLC. Jeremy Walker and Joseph Foster, McLane, Middleton, Manchester, for Ernest Ralph Caruso. Thomas Aylesworth, Moriarty Troyer & Malloy, Massachusetts, for the defendant Shepherds Hill Homeowners Association.