Bar Journal - Summer 2007
Lex Loci: A Survey of New Hampshire Supreme Court Decisions
By: Attorney Charles A. DeGrandpre
Is it possible for an individual’s reputation to be so malodorous that even if he is defamed, he is libel-proof? In Thomas v. Telegraph Publishing Co., opinion issued May 1, 2007, this was a question of first impression in New Hampshire and the Court followed other states that have adopted the doctrine which holds that “a convicted criminal may have such a poor reputation that no further damage to it is possible at the time of an otherwise libelous publication.”
In a spirited opinion by Justice Duggan, a unanimous Court took a middle ground and adopted an “issue-specific version” of the libel-proof doctrine which operates “to justify dismissal of defamation actions where the substantial criminal record of a libel plaintiff shows as a matter of law he would be unable to recover other than nominal damages.”
Having adopted the issue-specific version of the libel-proof doctrine, the Court next considered whether the trial court had properly applied the doctrine in its holding that the plaintiff was libel-proof. It is an understatement to say that the plaintiff’s career was less than stellar. He had criminal convictions in New Hampshire, Massachusetts and Texas for offenses ranging from burglary and receiving stolen property to possession of a controlled substance, criminal threatening, disorderly conduct, resisting arrest, and driving while intoxicated, among others. The plaintiff had admitted to some 20 convictions in a 15 year period, and had a habitual criminal record in three states. The New Hampshire Supreme Court, however, reversed the trial court’s finding that the plaintiff was libel-proof because it had found that there had been little media attention regarding the plaintiff’s prior arrests and convictions. The Court specifically ruled that “publicity is part and parcel of the damage to a reputation necessary to trigger the issue-specific version of the libel-proof plaintiff doctrine. Indeed, it is often the means by which such damage occurs and the most effective evidence of that damage. In other cases where courts have most persuasively applied the doctrine and deemed plaintiffs libel-proof, both the publicity surrounding the crimes and the attendant level of notoriety are quite high.”
Under the heading of “What were they thinking?” is the case of Becksted v. Nadeau, opinion issued June 26, 2007, [less than 60 days after oral argument!]. This case involved a contest between some carpenters and a law firm, with the carpenters claiming that the law firm had engaged in deceptive practices under the Consumer Protection Act (CPA), RSA chapter 358-A, (which, interestingly, neither party contested applied to the case). It appears that the carpenters were hired to undertake renovations to the apartment of one of the lawyers who lived above the law firm. Meanwhile, the defendant law firm began representing the carpenters in other legal matters and upon receiving the last invoice from the carpenters, which they contested, the defendant law firm immediately submitted a bill for its services to date. Unfortunately, the lawyer’s bill contained a computational error which increased the bill by more than double [What a horror show]. In the ensuing dispute, the defendant lawyers attempted to use their over-inflated bill as a wash against the plaintiff’s much larger bill. This dispute then reached the superior court when the plaintiffs brought an action to enforce a mechanic’s lien on the defendant’s premises and a claim under the CPA for deceit. The trial court dismissed the claim of the plaintiff carpenters by granting a directed verdict on the plaintiff’s claim after the plaintiffs’ had rested. The lower court found that the plaintiffs had failed to prove that the defendant engaged in deceptive acts and that the plaintiffs failed to produce sufficient evidence they suffered any injuries because the plaintiffs had never paid the erroneous bill.
The defendant law firm’s arguments were quickly torpedoed in the Supreme Court, which unanimously concluded “that a rational juror could find that the defendant attempted to deceive the plaintiffs by inflating the legal bill…and using that inflated amount to bargain with the plaintiffs.” Since this was a motion for a directed verdict, the Court found that “although a rational juror could find that the defendant’s actions were not deceitful, a rational juror might also reasonably infer the contrary.” Thus, the trial court committed an unsustainable exercise of discretion by granting the defendant’s motion for directed verdict. The Supreme Court then went on to affirm its earlier rulings that there is no requirement under the CPA for a claimant to show actual damages and the plaintiffs could be awarded the statutory minimum and attorney’s fees. To repeat, “What were they thinking?”
In this day and age, the great constitutional writ of habeas corpus [“hand over the body”] is under heavy attack from both the Congress and the Executive branch and is becoming even more unavailable to many alleged “terrorist suspects” in this post 9/11 era. Sleeper v. Warden, New Hampshire State Prison, opinion issued April 5, 2007, is an instance where a New Hampshire superior court mandated a writ of habeas corpus to the petitioner, but a unanimous Supreme Court reversed and found that the writ should not issue in this case. The defendant was convicted after a jury trial of several charges of aggravated felonious sexual assault and felonious sexual assault. It appeared that after the jury issued its verdict, the trial judge went to the jury deliberation room “to dismiss [the jury] and thank them,” a very common practice in our superior courts and one very much appreciated by the trial jurors. During the trial judge’s colloquy with the jury, the jury foreperson said something that could have indicated an improper shifting on the part of the jury of the traditional burden of proof and, as a result, the defendant, who testified, may have been required to prove he was innocent. The trial court subsequently and commendably reported this conversation to the attorneys and the defendant filed a motion to reconvene the jury, which was denied by the trial judge. The defendant then appealed to the Supreme Court, but the Supreme Court affirmed the convictions. The defendant later filed a petition for a writ of habeas corpus, arguing that the trial court had not acted properly to voir dire each individual juror. The superior court considered the petition for habeas corpus and granted it. On the second appeal to the Supreme Court, the state argued that the defendant had failed to raise the issue in his earlier appeal to the Supreme Court. A unanimous Supreme Court agreed and reversed the trial court’s granting of the writ, holding that “it was incumbent upon [the defendant] to raise the issue he raised in his habeas petition in his post-verdict motion. His failure to do so precludes subsequent review on collateral attack.” The lesson of this story is that in these perilous times, you must jump through ALL of the procedural hoops in order to justify the granting of the powerful writ of habeas corpus.
Premier Capital, LLC v. Skaltsis, opinion issued March 30, 2007, is another in a line of recent New Hampshire Supreme Court cases confronting the issue whether the usual three-year statute of limitations for ordinary actions under RSA 508:4, I or the 20-year statute of limitations under RSA 508:6, which establishes a 20-year statute of limitations for notes secured by mortgages on real property, applies in a particular case. Here, the present defendants executed a promissory note in 1990 secured by first mortgages which they signed on property which they owned. The mortgagee bank subsequently assigned the notes and mortgages to other entities. In 1992, the defendants defaulted on the note and in 1993, the assignee mortgagee demanded the balance due on the note and conducted a mortgage foreclosure sale in 1994, which left a balance due on the note. The note was further assigned in a series of assignments and in 2003, the plaintiff mortgagee assignee began the present action to collect the balance due on the note. The defendants claimed that the three-year statute of limitations applied so that the time limit for collecting on the balance of the note made by them expired three years from the date of the mortgage foreclosure, citing to earlier New Hampshire Supreme Court cases. However, the Supreme Court stuck to its earlier position, carefully distinguishing the cases relied upon by the defendants. The earlier cases, the Court opined, provided support for the conclusion that the 20-year statute of limitations did not apply to parties who did not themselves give security for their obligations, but here, the defendants both made the note and gave the mortgages to secure it. “[U]nder an unwavering line of decisions from this court, ‘although the mortgagee no longer has recourse to the property once it has been sold free and clear at a foreclosure sale, he may assert, in an action against his debtor (the mortgagor), that where the covenants of the mortgage given to secure the note remain undischarged, the debtor waived the right to plead the statute of limitations for twenty years.’”
State v. Elementis Chemical, Inc., opinion issued April 19, 2007, involves an issue not frequently encountered in our courts, the assessment of a civil forfeiture against a defendant. It appeared that the defendant was in the business of distributing commercial chemical products and in 1981 purchased a 12-acre site in Merrimack [the old, notorious Grace Chemical plant in the middle of town running parallel to U.S. Route 3] where it conducted its business until 1998, at which time it moved its operations from the site. At the time the defendant finished its operations in Merrimack, many of the buildings were in a state of disrepair, but the defendant did not repair them because it intended to demolish them. Instead, however, the defendant began to rent the buildings to various lessees. As a result of a report of potential soil and ground water contamination, the New Hampshire Department of Environmental Services (DES) visited the site and found some of the roofs of the buildings collapsed, found rickety, above-ground, storage tanks containing hundreds of gallons of chemicals dangerous to human health, and numerous unsecured bottles of reagents. The buildings had an acrid vinegar-like smell and were not secured against trespassers.
In 2001, DES issued an imminent hazard order (IHO) to the defendant and ordered the defendant to clean up the site within 30 days, which the defendant did. However, the DES maintained that the defendant was still subject to penalties for the violations found in the original visit and in 2003, the state filed a civil forfeiture action against the defendant in superior court, alleging that the defendant had violated hazardous waste laws and regulations, etc. The issue became the measure of the amount of an appropriate civil forfeiture. The state sought a civil forfeiture of $50,000 for the first day of the violation and no less than $1,100 for each succeeding day for a total civil forfeiture of over a $1,000,000. The defendant argued for a civil forfeiture of between $25,000 and $50,000.
The trial court imposed a civil forfeiture penalty of $100 per day for the continued violations, totaling $95,100, which is a civil forfeiture penalty within the very expansive range allowed by the statute involved, RSA 147-A:17. The state appealed and the Supreme Court upheld the trial judge, stating that the trial court had correctly established the amount of the civil forfeiture. In a Supreme Court’s review of whether a superior court’s assessment of a civil penalty under RSA 147-A:17 was an unsustainable exercise of discretion, the party must “show that the superior court’s decision is not sustainable[…]a party must demonstrate that the court’s ruling is clearly untenable or unreasonable to the prejudice of its case.” The Court held that the state had failed to show that the trial court had unreasonably exercised its discretion, pointing out that the court specifically took into consideration that the defendant had cooperated fully with DES after receiving the IHO, that the defendant had borne the cost of cleaning up the site, and that despite the potential threat posed by the chemicals left at the site, no injuries resulted. [Is this another variation of “No score, no foul?”]
The Court recognized that while there was some merit to the state’s argument that the defendant’s egregious conduct and three year abandonment of the site could have justified a more substantial penalty, “the superior court’s civil forfeiture assessment falls within the range specified in RSA 147-A:17 and its stated rationale for the assessment is supported by the record.”
Syncom Industries, Inc. v. Wood, opinion issued March 16, 2007, addresses the troublesome issue of the enforcement of restrictive covenants in employment agreements, which here, restricted the defendant employee, preventing him from soliciting, directly or indirectly, business from the employer’s customers for three years after leaving its employ, and over a very broad geographical area. This is a lengthy case and should be read on this frequently encountered, important issue. However, it’s the author’s belief that the case can be boiled down to a couple of major points. The defendant argued that the restrictive covenant was unenforceable as a matter of law, but the Court rejected this extreme position. Secondly, the Court stuck to its earlier cases which found that in order to be enforceable, the covenants must not be unreasonably broad and here, the Court found that they were unreasonably broad. But, trial “[c]ourts have the power to reform overly broad restrictive covenants if the employer shows that it acted in good faith in the execution of the employment contract.” The Court then remanded the case to the trial court to determine whether the restrictive covenants could be reformed. Since this would require factual determinations, the trial court was the proper place to make those determinations.
Contrast the result in the Syncom Case with ACAS Acquisitions (Precitech) Inc. v. Hobert, opinion issued May 3, 2007. Here the superior court had enforced the restrictive covenants which the defendant employee signed and which were presented to him by the employer, the plaintiff, and the issue went to the Supreme Court. In a unanimous opinion by Justice Galway, the Supreme Court upheld these non-competition agreements, holding that they met the strict tests that it the Court had previously established for such agreements:
We have stated that the law does not look with favor upon contracts in restraint of trade or competition….Such contracts are to be narrowly construed….Restrictive covenants are, however, valid and enforceable if the restraint is reasonable, given the particular circumstances of the case….A covenant’s reasonableness is a matter of law for this court to decide….We review the trial court’s factual findings, however, for clear error.
The Court then conducted such a review and found that the agreements were reasonable, were not overly broad in scope, and the duration was not unreasonable, nor did the non-competition agreements impose an undue hardship on the employee, nor was the restrictive covenant injurious to the public interest. The Court concluded “that the defendant’s non-competition covenant was reasonable and enforceable. The lesson to be drawn from these two cases is that chances of enforcing such [a non-compete] agreement is very fact specific. It’s like a red/green bet in roulette – there is a 50/50 chance1 that a court will go one way or the other.
An interesting “bad check” case is found in State v. Stewart, opinion issued April 17, 2007. The defendant was convicted on a felony count of issuing a bad check but upon this appeal, the Supreme Court reversed and remanded the case on the issue of whether or not the jury improperly considered whether the defendant had the knowledge that “the funds were insufficient on the day that he actually wrote the check…regardless of his good faith belief that [the payee] would hold the check until the mortgage refinance went through.” The Court therefore concluded that “knowledge of insufficient funds at the time of issue is neither a legal presumption…nor an element of the crime” but held that the plain language of the bad check statute, RSA 638:4, I, “focuses on the defendant’s belief as to the eventuality of the check being honored, not on the defendant’s knowledge of his account balance at the time of writing the check.”
State v. Brown, opinion issued April 6, 2007, is a novel criminal case involving a conviction under RSA 642:3, I(a) for the crime of “hindering apprehension.” A jury convicted the defendant of the crime and the issue turned upon whether the judge had properly expanded the statutory definition of the crime when it responded to a question from the jury during deliberations. This gave the Supreme Court a unique opportunity to explore New Hampshire’s Hindering Apprehension or Prosecution statute which the Court found was modeled from a similar provision in the Model Penal Code. The Court pointed out that the Model Penal Code provision covers the former common law crime of accessory after the fact but breaks decisively with the traditional concept that the accessory’s liability derives from that of his principal. Instead, hindering apprehension is a completely “independent offense of obstruction of justice” which “dispenses with many of the common-law elements[,] [including] knowledge of the identity of the perpetrator, knowledge of the underlying felony, and…even the requirement that a felony actually have been committed….This[is] approach ‘focuses instead upon whether the defendant purposely hindered law enforcement.’”
The Court went on to rule that “[t]he required mental state under RSA 642:3 does not require that the defendant or anyone else know that the person he aided in fact committed a crime. Instead, the mental state required is the intent to hinder apprehension or prosecution….The defendant need only act with the intent to harbor or conceal a person from apprehension and discovery.”
Fisher v. Minichiello, opinion issued April 12, 2007, addresses the applicability of the stalking statute enacted in New Hampshire in 1993. The specific question was whether in a civil petition under the statute, the statute applied in other than domestic violence cases. Here, the petitioner in the civil proceeding was a daughter of parents in a nursing home, who, in pursuit of her concern for the proper care of her parents, bombarded the nursing home employee with a barrage of visits, late-night calls, threats, etc., etc., etc. The issue split the Court three to two with Justice Duggan writing for a three-member majority and Chief Justice Broderick and Justice Dalianis each writing separate opinions. It seems to the author that it’s a tossup whether or not the statute should apply to the present situation in light of its legislative history and its original title: “An Act Establishing The Crime Of Stalking And Authorizing The State To Enforce Domestic Violence Protective Orders Issued In Other States.” Both the concurrence and the dissent indicated that they did not feel that the defendant’s conduct “amounted to stalking as it is commonly understood” because there was plenty of evidence that during the legislative hearings on the bill, “domestic violence was a chief concern of the bill’s sponsors and supporters.”
However, the majority, led by Justice Duggan, found that “the plain language of the statute does not limit the availability of a protective order or other relief to a family or household member” and established the correct test for the trial court as follows: “We hold that when issuing a stalking order in response to a civil petition filed pursuant to RSA 633:3-a, III-a, the trial court must make findings on the record that a defendant engaged in two or more specific acts “over a period of time, however short, which evidences a continuity of purpose.” The Supreme Court held that the trial court had so found in the present case.
Is it an unreasonable search and seizure to stop a moving vehicle for merely going through a big puddle of water on a highway or to stop a moving vehicle for merely squealing its tires? These questions were before the Supreme Court in two separate cases and both were answered in the affirmative. It’s improper to stop a vehicle unless there is probable cause for the stop, even if, after the stop, a criminal violation is found. In State v. Craveiro, opinion issued May 10, 2007, a unanimous Supreme Court in an opinion by Justice Duggan, held that an automobile that drove around a stopped police car which did not have any warning lights on, and through a large puddle on the highway, was not stopped properly and the community and emergency exceptions to the reasonable search and seizure rule did not apply. In State v. Pepin, opinion issued May 1, 2007, a unanimous Supreme Court in an opinion authored by Justice Dalianis held that the police did not have a reasonable suspicion of a violation of the road racing statute, RSA 565:75, I, where a driver was stopped at a red light immediately in front of the police cruiser. When the light changed, the policeman testified that he heard the defendant’s tires “squeal, a squeal that was more than a ‘chirp’ which caught [the officer’s] attention.” The policeman proceeded to stop the car and found that the driver, the defendant herein, was driving after being certified as a habitual offender. The policeman justified the stop on the basis that he had a suspicion that the defendant was engaging in an exhibition of “speed or acceleration” in violation of the road racing statute, but the Supreme Court didn’t buy this far-fetched argument, holding “that a brief squeal of tires, without more, does not support a reasonable suspicion that the road racing statute had been, was or was about to be violated.” It seems to the author that it is a waste of scarce police resources to prosecute such silly cases. How does the old Pete Seeger refrain go? “When will they ever learn, When will they ever learn?”
Attorney disciplinary cases continue to bedevil our profession and the Supreme Court itself. Fine nuances are encountered when an attorney engages in impermissible behavior and the many gradations of punishment from warning, reprimand, public censure to suspension for a limited period of time, to disbarment, all conflate to create a unique set of circumstances in each case. A case, however, of supreme importance to the attorney involved. There can be no case worse to lose than your own disciplinary proceeding case. Our Supreme Court, the ultimate arbiter of the appropriate punishment in such cases, should be commended for its careful consideration of an appropriate punishment in cases of attorney disciplinary matters. As the Mikado sings in Gilbert and Sullivan’s operetta, The Mikado, “My object all sublime, I shall achieve in time—To let the punishment fit the crime—The punishment fit the crime,” a goal that the Supreme Court pursues with great assiduousness.
A good example of the Supreme Court’s careful slicing of issues relating to attorney misconduct so that the “punishment [shall] fit the crime” is found in Coddington’s Case, opinion issued March 8, 2007. Here, in an attorney trust account irregularities case, [many times a cause of disbarment], the Court opted for a two-year suspension as recommended by the Professional Conduct Committee since “[t]his sanction satisfies the goals of the attorney discipline system by protecting the public and preserving the integrity of the legal profession.” In choosing the proper punishment, the Court pointed specifically to the facts, (1) that the respondent was a solo practitioner, (2) the respondent’s actions caused a loss of $40.00 to a client which the attorney repaid, and (3) the respondent failed to self-report and initially failed to respond to the PCC’s requests for information [in the words of the PCC, the lawyer acted like a “deer in the headlights” when the PCC came around the corner].
Bosse’s Case, opinion issued April 4, 2007, is another sterling example of the Court’s careful weighing of the appropriate punishment in an attorney disciplinary proceeding. The Supreme Court’s Professional Conduct Committee suspended the respondent attorney from the practice of law for six months and the question was whether that punishment was appropriate, or should a greater punishment be applied. The Court first considered the nature of the offense which involved an attorney signing his client’s name without his consent or authorization. He then lied to the other party that the agreement had been executed by his client. So the issue was a lie by an attorney, something the Supreme Court has previously stated as reflecting more negatively on the legal profession, than no other single transgression.2 But the Court also considered that the attorney had no prior disciplinary record, he had cooperated with the proceedings, had admitted remorse, had admitted his misconduct, and already had had his real estate license revoked as a consequence of his actions. In the end, a unanimous Supreme Court, speaking through Justice Dalianis, focused in on the fact that while the transgression was great, it would not accept the attorney discipline office’s (ADO) invitation to disbar the respondent for a “single episode of deceit.” It warned, however, that “while there may be instances where a single episode of deceit is sufficiently egregious to warrant disbarment, this is not such an instance.” The Court concluded by suspending the respondent attorney from the practice of law for two years.
1. Well not really 50/50, as the house takes its slice.
2. Kalil’s Case, 146 N.H. 466,467 (2001).