Bar Journal - Fall 2005
LEX LOCI: A Survey of New Hampshire Supreme Court Decisions
By: Attorney Charles A. DeGrandpre
In a virtual torrent of important cases decided by the Supreme Court recently, one decision stands out as reversing what had appeared to be settled law in New Hampshire; i.e., the right of a landlord to evict a tenant for any non-discriminatory reason after the expiration of the tenant’s lease. In a major victory for New Hampshire Legal Assistance’s long time tenants’ rights advocate, Attorney Elliott Berry, the Court, speaking through Judge Dalianis, interpreted our residential landlord tenant law as not allowing a termination simply because the lease has expired. The Court interpreted RSA 540:2, II(e), which provides for termination for “other good cause” as not encompassing as good cause the fact that the lease has expired:
Were the mere expiration of a lease to constitute good cause, then tenants could be evicted arbitrarily from their homes through no fault of their own; such evictions, as the legislature undoubtedly realized, create substantial hardships for tenants. At worst, tenants may become homeless as a result. Even when another residence is procured, the tenant must bear the expenses and inconveniences of moving. Relationships with friends and neighbors may be disrupted, children may be forced into new school districts, and local services and support systems for elderly and disabled tenants may be lost. Such a result would be contrary to what the legislature intended.
Furthermore, were the mere expiration of the lease to constitute good cause for eviction, it could enable landlords to evict when the true reason for eviction is ill-motivated. RSA 540:2, II was enacted to prevent landlords from evicting tenants for ill-motivated reasons. If the mere expiration of the lease were to constitute a good cause, a landlord who did not wish to continue renting to a tenant for any reason—for example, because the tenant became disabled during the course of the tenancy—could evict the tenant at the end of the lease without disclosing the true reason for eviction. This would be contrary to what the legislature intended.
This outcome surprises the author. As a result of the Court’s opinion, the relationship of landlords and tenants may be significantly altered. It appears that before a tenancy is created, a landlord may generally choose his own tenant for any reason that is not discriminatory, but that once a tenancy is established, the landlord may not evict a tenant for any non-discriminatory reason of his choosing after the expiration of the lease.
Merrimack Valley Wood Products, Inc. v. Near, opinion issued May 9, 20051, revised June 22, 2005, made new law concerning the vexious issue of the enforceability of a non-competition agreement in an employment contract. The defendant, when employed by the plaintiff, signed a restrictive “covenant not to compete and a covenant not to disclose.” It may be significant that the defendant worked for the plaintiffs for six months before he was asked to sign the agreement and only signed it when he was informed that his continued employment with the plaintiff was contingent upon signing the agreement. The covenants restricted the defendant, after the term of his employment, from disclosing to others “any list or lists of customers, business methods, systems, prices, trade secrets, or information of any kind or nature pertaining to the business of [the plaintiffs].” The defendant also agreed after leaving employment not to “sell to directly or indirectly, or cause to be sold, any materials to customers which [the plaintiffs] ha[ve] sold to within the twelve (12) months prior to the date of termination, for a period of one (1) year from the date of termination.” The employee decided to leave the plaintiffs’ employ. Before leaving, he returned his “price book” to the plaintiffs, which was described as “a confidential document that outlines the pricing structures used by the plaintiffs.” The defendant employee had previously worked in the same business field for another company and after leaving the employment of the plaintiffs, he was hired by a competitor of the plaintiff as an outside sales representative. “The defendant continued to solicit sales from the customer base he had developed while working for the plaintiffs and from his previous experience in the industry.”
The trial court held a full evidentiary hearing and found that the non-compete agreement was unreasonable because it was too broad; specifically, it prohibited the solicitation of the plaintiffs’ customers with whom the employee had not dealt. The case went on appeal to the Supreme Court and was remanded to the trial court for rehearing. Upon rehearing, the trial court again found that the covenant was unreasonable because “the non-compete covenant applied to all of the plaintiffs’ customers, regardless of whether the defendant had any contact with them” and, thus, “it was broader than necessary to protect the plaintiffs’ legitimate interest in protecting their goodwill.”
The Supreme Court held that the test of the reasonableness of a restrictive covenant ancillary to an employment contract required the Court to “employ a three-pronged test: first, whether the restriction is greater than necessary to protect the legitimate interests of the employer; second, whether the restriction imposes an undue hardship upon the employee; and third, whether the restriction is injurious to the public interest.”
The Supreme Court looked back on its history of the treatment of such non-compete agreements and found that this restrictive covenant failed the first prong of the reasonableness test. That is, the restriction was greater than necessary to protect the legitimate interest of the employer. Furthermore, on the issue of whether the restriction could be modified by simply prohibiting the employee from dealing with customers with whom the employee had dealt, the Court held that the covenant could not be modified as the plaintiffs argued because the plaintiffs “had not acted in good faith in the execution of the…agreement.” This is an echo of the tardiness of the employer in presenting the non-competition agreement to the employee.
Berry v. Watchtower Bible and Tract Society of New York, Inc., opinion issued July 15, 2005, is a relatively infrequent example, among the members of the present Court, of a split opinion by the Supreme Court. The case involved the general rule that individuals are not responsible for the criminal attacks of others. Chief Justice Broderick spoke for the majority of the Court and affirmed the dismissal of all the claims for damages by two young children who were allegedly sexually abused by their father, against the New York Society of the Jehovah’s Witnesses and its local congregation. The facts of this intriguing case are startling. Both the mother and father were practicing Jehovah’s Witnesses. The children’s mother, following her church’s policies, met with the elders of the church and disclosed to them that her husband was sexually abusing both his own daughter and his stepdaughter, the mother’s daughter by a prior marriage. The elders of the church met with the husband and wife on several occasions and both husband and wife acknowledged that under church rules, the consultations were private. However, the elders failed to report to appropriate authorities the ongoing abuse as appeared to be required by the provisions of RSA 169-C:29 and, rather, counseled the wife not to report the abuse and paternalistically advised her to “be silent about the abuse and be a better wife!!” The majority opinion upheld the dismissal of all of the plaintiff children’s claims, to the author a very surprising result. The majority opinion ruled that the child abuse reporting statute (RSA 169-C:29), which enumerates a laundry list of specific individuals by profession (physician, surgeon, county medical examiner, psychiatrist, school official, teacher, etc., etc.) who are required to report any suspicion of child abuse, followed by the catchall phrase of “any other person having reason to suspect the child has been abused or neglected” did not include the church elders.
This was too much for Judge Dalianis who dissented, citing four exceptions
to the general rule that individuals were not responsible for the criminal attacks of others: (1) when there is a special relationship; (2) where the defendant creates an especial temptation and opportunity for criminal misconduct, also called the special circumstances exception,…. (3) the existence of overriding foreseeability; and (4) when one voluntarily assumes the duty.
Judge Dalianis would find that there was a duty based on the special relationship between the children and the church because the elders “had reason to anticipate [the defendant father’s] criminal conduct and that it created a situation facilitating [his] conduct.”
In this case, the elders of the defendant Wilton Congregation not only created an opportunity for [the defendant father] to continue abusing the plaintiffs precisely because of their inaction, but actively facilitated the continuing abuse by their instruction [to the mother] not to act. Further the elders instructed [the mother] not to report the abuse in the presence of the abuser himself. It is not unreasonable to refer that [the defendant father] continued abusing the plaintiffs, his daughters, safe in the knowledge that [the mother] was not going to report him to secular authorities.
As will appear evident to readers, the author’s sympathies are with the dissent, particularly in light of the recent developments of the discovery of the nature and extent of sexual abuse by Catholic priests of their own minor congregants. Judge Dalianis states that the majority feared “heading down a slippery slope where friends and relatives will face tort liability for giving bad advice,” but would find this an unusual case which should be decided upon the special facts of this case:
The facts creating the duty in this case were the elders’ awareness of [the mother’s] religious beliefs, the fact that her husband was the one abusing the children, the elders’ knowledge of the abuse over the years, their continued failure to counsel her to seek help, their specific instruction to her not to seek help when she relied upon their guidance and the fact that they did so in [the father’s] presence. These special circumstances created an opportunity for [the father] to continue abusing the plaintiffs.
Time permits the author to give only a brief review of some of the recent important Supreme Court cases. In State v. Knickerbocker, Jr., opinion issued July 29, 2005, the Court ruled that where there was an almost twenty year delay between a person’s death and an indictment against the defendant for second degree murder of that person, the defendant must show actual prejudice in order to allow a dismissal based on pre-indictment delay. Having failed to do so, the Supreme Court reversed the trial court’s dismissal of the indictment against the defendant and remanded the case against the defendant for further proceedings in superior court.
Petition of The State of New Hampshire, opinion issued August 12, 2005, makes clear that a superior court has no power to sentence a convicted criminal defendant to serve part of his sentence in home confinement if the county where he is to stand committed does not have a home confinement program. If the county does not have a program supporting this type of confinement, the Supreme Court held that the court’s sentence of home confinement should be vacated.
In Petition of The State of New Hampshire, opinion issued May 9, 2005, the State failed in its petition for writ of certiorari in Supreme Court challenging the decision of a superior court judge not to impose a mandatory life imprisonment sentence under RSA 632-A:10-a, III. The three- felony enhanced sentence provisions do not apply, the Court ruled, where the defendant is convicted three times in one proceeding, without a prior conviction, holding that if the legislature felt differently, it “then it should make its intention unmistakably clear.”
A unanimous Supreme Court, speaking through Justice Duggan, in a lengthy opinion, imposed a harsher penalty (disbarment) instead of a suspension that the judicial referee, Judge Manias, had recommended in Coffey’s Case, opinion issued August 12, 2005. The case involved a situation in which an attorney’s long-term client’s competency was called into question where the client, with the advice of independent counsel, had made a substantial gift to the attorney. The Supreme Court agreed with the judicial referee that the attorney had violated several provisions of the Rules of Professional Conduct, but the essential Supreme Court finding was “that the respondent knowingly engaged in conduct that violated his duties as a professional with the intent to benefit himself.” The surprising aspect of the Court’s opinion was its disregard of the judicial referee’s recommendation of a two-year suspension, the Court summing up its tough views concerning the matter as follows:
In light of the serious injury suffered by [the client] and the significant aggravating factors present in this case, we disagree with the referee that a two-year suspension is an adequate sanction. Rather, we conclude that disbarment is necessary for the protection of the public and the preservation of the integrity of the legal profession. See Sup. Ct. R. 37(13)(f) (2003; amended 2003). The conduct of a lawyer who selfishly takes advantage of an elderly, mentally ill client by charging an exorbitant fee and then relies upon less than forthright testimony to defend his conduct requires disbarment. Accordingly, the respondent is hereby disbarred and is ordered to reimburse the committee for all of its expenses, including legal fees, incurred in investigating and prosecuting this matter.
Finally, the author will close his column this quarter by contrasting two interesting cases involving the right to practice law in New Hampshire. In the first, Reiner’s Case, opinion issued September 7, 2005, the question was whether a Maine attorney who was indicted on felony charges arising out of his alleged connection with prostitution and money laundering activities, was entitled to continue to practice law in New Hampshire where he was also admitted. Maine had not suspended the attorney but upon receipt of knowledge of the indictment against the attorney, the New Hampshire Supreme Court had suspended the attorney. However, after a hearing, the Court held that a suspension was not necessary for the protection of the public since the charges against the attorney were simply allegations at this point in time. The Court did impose certain conditions upon the respondent attorney including the obligations to notify the Supreme Court of the status of his criminal proceedings from time to time and, more importantly, to notify all of his New Hampshire clients of the pending criminal charges against him “with specificity.”
In The Matter of Bar Applicant ADM-2004-176, opinion issued August 18, 2005, the Supreme Court was confronted with an attorney who sought admission to practice law in New Hampshire, having received a master’s degree in education and then a law degree. He had owned and operated his own business for the past 20 years. After the applicant submitted his petition and questionnaire for admission to the Bar of New Hampshire, together with the required supporting recommendations, the standing committee on character and fitness of the New Hampshire Supreme Court (Committee) filed two adverse reports recommending the applicant be denied admission. The Supreme Court ordered the applicant to show cause why his application should not be denied. After briefing and oral argument, the Court denied his application.
In its per curiam opinion, the Court focused on what the Committee described as the applicant’s “willful, deliberate and contumacious” conduct before the Windham Vermont Family Court. It appeared that the applicant was hoisted on his own petard—doomed by his own words.. The Vermont Supreme Court had found him in contempt of the Windham Family Court for a period of time because he had failed to produce requested documents in an action filed by the applicant “to modify the child support he was paying.” The New Hampshire Supreme Court found that the applicant’s “reaction to the contempt finding, his motions to recuse the [Vermont] magistrate and the overall tenor of his pleadings are indicative of his character and fitness to practice law. They suggest an intemperate disposition, and an unusual quickness to find fault with others. (Emphasis supplied).”
The Court ruled that the touchstone of an application for admission to the New Hampshire Bar was that the “applicant must prove good moral character and fitness by clear and convincing evidence.” Supreme Court Rule 42-5-a. The Court ruled that the present applicant failed to meet his burden of proving his fitness by tending to “take small incidents and blow them out of proportion,” and viewing the “wrongs allegedly done to him on an exaggerated scale.” The Court concluded that the applicant “has not demonstrated sufficient positive characteristics to support his fitness to practice law”:
We do not challenge the applicant’s assertion that he is a moral person. He is committed to helping others, and expresses a deep concern for equality and justice. We do not question these traits. It is his lack of fitness that hinders his ability to practice law. The right to practice law is not an inherent right of every citizen, as is the right to carry on an ordinary trade or business. It is a peculiar privilege granted only to those who demonstrate special fitness in intellectual attainment and character. All may aspire to it on an absolutely equal basis, but not all will attain it….Based upon our review of the evidence, we hold that the applicant has not satisfied his burden of proving by clear and convincing evidence his fitness to practice law.
The author suggests that readers should review the opinion and make their own judgment concerning the tenor of the applicant’s pro se pleadings. An example of the applicant’s penchant for hyperbole [choosing one among several illustrations used by the New Hampshire Supreme Court as examples of unfitness in the applicant’s own words] concerned the applicant’s incendiary views about the Vermont Family Court before which he was personally involved where in a memorandum of law, he asked, “Is it more comfortable to believe that [the applicant] has disdain for authority, than to consider that the lawlessness at Windham Family Court is probably the indirect cause-in-fact of domestic violence?”
1. The author’s firm represented a party to the action and, therefore, the author’s views may be colored.
Attorney Charles A. DeGrandpre is a director and treasurer in the firm of McLane, Graf, Raulerson & Middleton, P.A., Portsmouth, New Hampshire.