Bar News - February 9, 2007
NH Supreme Court At-a-Glance – December 2006
By: Eric L. Raymond
Reclassification of Structures
Walter W. Fischer, Trustee of Walter W. Fischer 1993 Trust v. New Hampshire State Building Code Review Board.
December 20, 2006
- Whether the Superior Court erred in affirming the determination of the New Hampshire State Building Code Review Board (Board) that two buildings owned by the petitioner do not qualify as two-family dwellings under the State Fire Code.
Petitioner owned buildings that were constructed in 1968 and through, at least, May 2002 had been classified as two family dwellings. The petitioner had been leasing the units to University of New Hampshire students. After a fire in 2002, the Durham Fire Department reviewed the buildings’ classification and reclassified them as “lodging and rooming houses,” which required modifications to comply with the code. The petitioner appealed the reclassification to the State Fire Marshall, then to the Board and finally to the Superior Court—all affirmed the reclassification.
The Court rejected petitioner’s argument that reclassification is a retrospective application of a subsequent code and found that the State prospectively applied the correct classification. The Court also rejected petitioner’s argument that reclassification deprived him of a vested right in a nonconforming use. The Court found that an individual does not have a vested right to imperil the public’s safety.
The Court rejected the petitioner’s argument that the code discriminates between related and unrelated individuals. The building code restricts the sharing of a duplex or single family dwelling by unrelated individuals, but not by related individuals. The Court also rejected the petitioner’s argument that he was denied Due Process because he was not afforded an adjudicative hearing before a state fire marshal, pursuant to N.H. Admin. Rules, Saf-C 6006.02. The Court found that Saf-C 6006.02 was preempted by RSA 155-A:1 which provides that appeals from stare fire marshals are heard by the board.
Richard K. Bendetson & a. v. Killarney, Inc. & a.
December 28, 2006
- Whether the trial court lacked authority to set aside a shareholder’s election to purchase shares pursuant to RSA 239-A:14.34(a), where the electing shareholder has not revoked his election.
- Whether the trial court unsustainably exercised its discretion when it set aside the election to purchase the petitioning shareholder’s shares.
- Whether the trial court erred in finding sufficient grounds to support Killarney’s dissolution.
Richard K. Bendetson (Bendetson) and Robert E. Buonato, Jr. (Buonato) formed Killarney Inc. as equal shareholders. They also formed New Killarney L.L.P. with Killarney Inc. acting as the general partner owning a one percent interest in New Killarney. Bendetson and Buonato each have a forty-nine and one-half percent interest in New Killarney. Buonato and Bendetson had a falling out and were unable to elect new directors or schedule further shareholder meetings. Bendetson filed a petition for dissolution of Killarney and New Killarney, and Buonato filed an election to purchase Bendetson’s Killarney shares under RSA 293-A:14.34(a). The superior court set aside Buonato’s election to purchase Bendetsons’s shares and ordered dissolution of Killarney. Buonato appealed.
The Court held that the trial court did not lack authority to set aside Buonato’s election to purchase Bendetson’s shares. Pursuant to RSA 293-A:14.34(a), when one shareholder petitions for dissolution, the remaining shareholders can elect to purchase those shares. Buonato’s argument was founded on a provision which states: “An election pursuant to this section shall be irrevocable, unless the Court determines that it is equitable to set aside or modify the election.” Buonato argued that the aforementioned provision limits the Court’s equity power to set aside an election, and contended that the electing party must seek revocation of their election before the court may set it aside. The Court disagreed with Buonato’s interpretation of RSA 293-A:14.34(a), and found that the statute’s irrevocability provision is meant to bind the parties to a requested election—it does not limit the court’s equity power.
The Court further found that the trial court did not unsustainably exercise its discretion when it set aside Buonato’s election to purchase. The Court noted that the trial court has discretion to review its orders at any time before rendering a final judgment. Therefore, it rejected Buonato’s argument that a later presiding judge could not overrule the decision of an earlier presiding judge. The Court also rejected Buonato’s argument that a full evidentiary hearing was required, because the trial court had engaged in a full colloquy.
Buonato argued that the evidence did not establish that the directors had a term of office, and asserted that their terms never expired. The Court, after reviewing Killarney’s by-laws, found that directors served a one-year term and, if new directors were not elected, remained as officers in a holdover capacity. The Court concluded that allowing officers to holdover did not make their term of office infinite, and found sufficient grounds to support dissolution.
General Electric Company, Inc, v. Commissioner, New Hampshire Department of Revenue Administration.
December 5, 2006
Affirmed in part and reversed in part
- Whether a corporation paying business profits taxes in New Hampshire has standing to challenge the denial of a dividend reduction under RSA 77-A:4, IV, where it is asserting that foreign dividends should be subject to the exemption.
- Whether the trial court erred in ruling that RSA 77-A:4, IV does not violate the United States Commerce Clause.
General Electric Company, Inc. (GE) is a parent corporation with foreign and domestic subsidiaries. GE challenged the constitutionality of RSA 77-A:4; IV. The Commissioner, New Hampshire Department of Revenue Administration (Department), filed motions to dismiss for lack of standing and for summary judgment. The superior court granted the Department’s motions, and GE appealed.
The Court began with an in-depth analysis of the New Hampshire business profits taxation system. General Electric (GE) is a parent cooperation with numerous affiliated domestic and foreign corporations. The Court found that GE was a unitary business under RSA 77-A:41, XIV (2003), which is subject to a combined reporting method that apportions income of the unitary business to the state. RSA 77-A:1, XIII, XV, XVI (2003). Domestic “intergroup activity,” like dividend payment, is excluded from gross business profits, because these payments are made with funds that have already been taxed by the state. In contrast, dividends paid by a foreign affiliate to a domestic unitary group member are included in gross business profits, because the foreign dividends are not paid from funds that were previously taxed by the state. GE challenged the inclusion of foreign dividends in its taxable business profits.
The Court found that the trial court improperly granted the Department of Revenue’s (Department) motion to dismiss for lack of standing. The Department argued that the dividend reduction in RSA 77-A:4, IV, did not apply to GE and GE lacked standing to challenge the statute. The Court rejected the Department’s argument that GE did not qualify as a “parent of an affiliated group” under RSA 77-A:4, IV. The Department also argued that GE lacked standing to challenge RSA 77-A:4, IV because it is a unitary business and the statute does not apply to GE or affect the way it is taxed. The Court rejected GE’s argument and held that any corporate parent, which pays business profit taxes to New Hampshire, that is denied a dividend reduction under RSA 77-A:4, IV, has standing to challenge the statute. The Court reversed the granting of the Department’s motion to dismiss for GE’s lack of standing.
The Court found that the trial court did not err in granting the Department’s motion for summary judgment, because RSA 77-A:4, IV, does not violate the United States Commerce Clause. GE argued that RSA 77-A:4, IV, facially discriminates against the parents of dividend paying foreign subsidiaries that do not conduct business in New Hampshire. The Court, after assessing New Hampshire’s business taxation as a whole, held that it did not facially discriminate against foreign commerce.
State of New Hampshire v. Daniel Ayer, Sr.
December 7, 2006
- Whether the trial court erred when it permitted the State to introduce statements made to Officer Mathews by defendant’s wife.
- Whether the court erred when it permitted the introduction of firearms and ammunition, not used in the commission of the charged crime, found in the defendant’s truck.
- Whether the trial court erred in refusing to allow evidence and jury instructions of lesser included offenses.
- Whether the trial court improperly appointed the defendant counsel.
- Whether the trial court erred in partially denying a motion to suppress and failing to find that defendant invoked his right to counsel during booking.
- Whether the trial court erred in only partially suppressing his statements to the police.
- Whether the trial court erred in denying his pretrial motion to suppress the items seized from his truck as fruits of unlawfully obtained statements.
Mark Rowland (Rowland), a counselor with the Division of Children, Youth and Families, went to defendant’s home to meet with his family. The defendant, after leaving his home and then returning, told Rowland to leave and, when Rowland refused, the defendant shot him and fled. Rowland later died. Officer Mathews arrived at the scene, approached defendant’s wife, and she stated that defendant had told her he was going to kill Rowland. She then described the defendant and his vehicle. Police arrested defendant and found firearms, including the murder weapon, in his vehicle. Defendant waived his Miranda rights at the police station and gave formal statements. Defendant was convicted of first-degree murder in 2003, which was reversed on appeal. On retrial he was reconvicted of first-degree murder.
The defendant argued that admitting his wife’s statements violated his rights to confrontation under the New Hampshire and United States Constitutions. The defendant, relying on Crawford v. Washington, 541 U.S. 36 (2004), argued that the statements made by his wife were inadmissible, because she did not testify at trial. The Court discussed Crawford in detail and noted that only testimonial statements make a declarant a witness within the meaning of the Confrontation Clause. The Court found that the statements made by the defendant’s wife to Officer Mathews were nontestimonial because the police had entered a chaotic scene, from which an armed man had recently fled—the circumstances objectively indicated that Officer Mathews’ interrogation was to provide assistance during an ongoing emergency. In addition, the Court rejected the defendant’s argument that only the statements pertaining to identification should be admitted.
The Court found that the trial court did not err when it allowed the firearms and ammunition, not used in the crime, into evidence. It also held that the trial court did not err in refusing to instruct the jury on a manslaughter defense because “a lawful act cannot provide sufficient provocation for a finding of manslaughter.” State v. Smith, 123 N.H. 46, 49 (1983). The Court noted that Rowland was engaged in a lawful act when the defendant shot him.
The Court held that the trial court did not improperly appoint counsel. An effective assertion of the right to self-representation must be “(1) clear and unequivocal; (2) knowingly, intelligent and voluntary; and (3) timely.” State v. Sweeney, 151 N.H. 666, 670 (2005). The Court found that the defendant did not clearly and unequivocally choose to proceed pro se.
The trial court did not err in finding that the defendant failed to invoke his right to counsel during booking. The Court found no evidence that the defendant requested counsel during booking or the interview. Defendant contended that he invoked his right during an unrecorded portion of the interview. Applying the requisite standard of review, the Court deferred to the trial court’s finding that the defendant did not invoke his right to counsel.
The Court found that the trial court did not err in denying defendant’s motion to suppress items seized from his truck. The defendant argued that the search was conducted pursuant to an invalid search warrant. However, the trial court, upon hearing evidence, found that the defendant consented to the search.
Criminal/Search and Seizure
State of New Hampshire v. Michael Licks
December 6, 2005
- Whether the district court erred in denying the defendant’s motion to suppress evidence.
An officer noticed the defendant slouched over in the driver’s seat of a vehicle, at nighttime, with the engine running. The officer approached the defendant’s car with his flashlight and the defendant opened his window. The officer observed signs of intoxication and arrested the defendant for DWI.
The defendant argued that he was subjected to an unlawful seizure in violation of RSA 594:2 (2001) and part I, Article 19 of the New Hampshire Constitution. The Court disagreed. It found that the defendant had limited his own freedom of movement when he placed himself in a parked car with vehicles on each side and a curb in front. The Court considered whether a reasonable person in the defendant’s position would have felt free to “terminate the encounter” with the officer and found that, considering the totality of the circumstances, a reasonable person would not have believed he must submit to the officer’s request. Therefore, the defendant was not subject to an unlawful seizure, and the court did not err in denying the defendant’s motion to suppress evidence.
Greenland Conservation Commission v. New Hampshire Wetlands Council & a. Conservation Law Foundation v. New Hampshire Wetlands Council & a.
December 19, 2006
- Whether the trial court erred in affirming the issuance of a wetlands permit, because the court did not consider the impact of the development as a whole, including upland development, on wetlands.
- Whether the trial court impermissibly shifted the burden of developing and presenting alternative designs on the parties opposing the permit.
- Whether the trial court erred in affirming the wetlands council decision, because the record lacked evidence addressing “key dispositive findings.”
- Whether the trial court erred in failing to address six “critical, potentially outcome-determinative grounds for appeal.”
- Whether the trial court applied an overly deferential standard of review and did not specify factual and legal grounds for the decision.
Endicott General Partnership (Endicott) received approval for a subdivision that included approximately 85 acres of wetlands. Endicott filed a “standard dredge and fill application,” pursuant to RSA 482-A:3, I (2001), with the NH Dept. of Environmental Services wetlands bureau. The permit was issued to Endicott, but was subsequently challenged and revoked. Endicott sought reconsideration, and a new permit, which increased land under the conservation easement and reduced the wetlands crossings, was issued. Plaintiffs appealed the bureau’s decision to the wetlands council, which affirmed the permit. Plaintiffs appealed to the superior court, which also affirmed the permit.
The plaintiffs argued that, pursuant to RSA 482-A and the Department of Environmental Services (DES) wetlands rules, the DES must consider the effects of development as a whole on the wetlands. The plaintiffs relied on RSA 482-A:1 to support their argument that principles of wetlands ecology require assessment of a development’s impact, as a whole, on wetland areas. The Court analyzed RSA 482-A, and found that it limits assessment to construction activities within wetland areas—and does not permit review of upland activities. Likewise, the Court found that DES regulations do not require DES evaluation of upland development on wetlands.
The plaintiffs contended that the trial court erred by shifting the burden of developing and presenting alternative designs. The Court rejected this argument. The plaintiffs identified the trial judge’s questions as evidence that the burden had been shifted. The Court found that the questions were merely hypothetical and the record did not support the plaintiffs’ argument.
Plaintiffs’ argued that the DES improperly issued the permit because it did not address “key dispositive findings.” The Court rejected the argument. In its denial, the bureau found there were alternative designs to limit the number of wetlands crossings. However, the Court found that labeling these findings as “dispositive” was without basis. The Court held there was no error in affirming the project without a redesign to eliminate several wetland crossings.
The Court did not accept the plaintiffs’ argument that the trial court erred in failing to address, what the plaintiffs characterized as, six “critical” issues. The Court found the plaintiffs’ first five “critical issues” were without merit. The remaining issue was whether the DES failed to consider the cumulative impact or the functions and values of the wetland project. The Court, upon review of the record, found that these issues were considered.
The Court rejected the argument that the wetlands council improperly applied a deferential standard of review to the wetlands bureau’s legal conclusions. The Court found that while the language in the wetland council decision, regarding standard of review, may have been imprecise, it was not incorrect as a matter of law.
The plaintiffs argued that the trial court erred in affirming the wetlands council decision, because the council did not provide a factual and legal basis for its decision. The DES contended that RSA 482-A:10, VI, only requires the issuance of findings of fact and rulings of law for remands. The Court disagreed and held that the council must issue findings of fact and rulings of law for remands and affirmations. Nevertheless, the Court did not remand to the superior court to have the council issue findings of fact and ruling of law, because there was sufficient evidence for trial court to reach its decision.
Evidence/Admissibility of Statements
State of New Hampshire v. Donald W. Morrill a/k/a/ “Sam” W. Morrill
December 19, 2006
Reversed and remanded.
- Whether the trial court erred by allowing the state to introduce inadmissible hearsay evidence.
Defendant was charged and convicted of aggravated felonious sexual assault of his stepdaughter. On appeal the conviction was reversed and remanded. On remand defendant was convicted again, and the defendant appeals.
The defendant argued that the trial court erred in admitting statements made to a police officer by the victim’s father, who died before the trial. The defendant argued that the statements are inadmissible hearsay and barred by Crawford v. Washington, 54 U.S. 36 (2004). On appeal the State conceded that the statements were inadmissible hearsay, but continued to argue that the defendant had opened the door to the statements. The Court discussed the open door doctrine, and distinguished between the doctrines of “curative admissibility” and “specific contradiction” It found the doctrine of “curative admissibility” inapplicable, because no evidence was erroneously admitted in the defendant’s favor. Furthermore, the defendant did not gain an advantage by misleading the jury, which would trigger the doctrine of “specific contradiction.” The Court noted that providing a jury with contrary evidence and a contrary theory of the case does not constitute misleading the jury. Therefore, the Court held that the statements should not have been admitted under the open door doctrine.
John Milliken & a. v. Dartmouth-Hitchcock Clinic & a.
December 28, 2006
- Whether the trial court erred in allowing Dr. Mary D’Alton to render testimony regarding the cause and timing of the said child’s injuries.
- Whether the trial court erred in permitting Dr. Michele Lauria’s testimony regarding the cause and timing of the child’s injuries.
- Whether the trial court erred in permitted Dr. Robert Zimmerman to testify about the cause of the child’s injuries and use certain exhibits at trial.
Parents of a child born with injuries brought a malpractice action. The plaintiffs appeal evidentiary rulings by the trial court.
The Court held that the trial court did not err when it permitted Dr. Mary D’Alton (D’Alton) and Dr. Michele Lauria (Lauria) to testify about the timing and cause of the injuries. The plaintiffs failed to preserve their arguments that D’Alton was not qualified to testify about the causes of the injury. Furthermore, while the plaintiffs did preserve their objection to D’Alton’s testimony about timing, D’Alton’s background and experience was sufficient to qualify her to render an opinion. The Court found that the plaintiffs failed to preserve their arguments against Lauria’s testimony.
The Court found that the trial court did not err in permitting Dr. Robert Zimmerman’s (Zimmerman) testimony or use of exhibits. The plaintiffs argued that Zimmerman’s testimony was based on unreliable principles and methods. The Court held that the plaintiffs’ objection was properly preserved, but the plaintiffs waived this argument when they conceded that Zimmerman was qualified. The plaintiffs also argued that certain exhibits should not have been allowed because they were not disclosed in an expert report pursuant to RSA 516:29-b, II(c) (Supp. 2006). The Court found that plaintiffs had been made aware of the exhibits and the Court did not err in allowing them.
Evidence/Expert Testimony and Securing Judgments
John Boynton & a. v. Dennis Figueroa & a.
- Whether the trial court erred by denying Signature’s motion to prohibit the plaintiffs from offering evidence of their remedial measures.
- Whether the trial court erred in allowing the plaintiffs to offer lay opinions about the home’s defects and necessary repairs.
- Whether the trial court erred in denying Signature’s motion for judgment notwithstanding the verdict and for remittitur.
- Whether the trial court erred when it ordered Signature to post a bond to secure the judgment.
The plaintiffs purchased a modular home from Signature Building Systems, Inc. (Signature) through Dennis Figueroa. The plaintiffs contracted with Figueroa to install the home. The plaintiffs discovered several problems with the home and sued Signature for negligence, negligent and intentional misrepresentation, and violation of the New Hampshire Consumer Protection Act (CPA). The jury found in favor of the plaintiffs. Signature moved for judgment notwithstanding the verdict, to set aside the verdict, and for remittitur—all three motions were denied. The trial court, over Signature’s objection, doubled the damages, because the jury found Signature acted willfully in violating the CPA. Signature appealed.
The Court held the trial court did not err in allowing the plaintiffs’ testimony about the defects and their remedial measures. Signature argued that expert testimony about the defects was required, but the Court disagreed. The Court cited New Hampshire Rule of Evidence 701, which permits lay witness opinions that are rationally based on what the witness perceived and are helpful in determining an issue of fact. It noted that the plaintiffs testified about defects they observed and their actions to remedy the defects. Expert testimony was not required, because the plaintiffs testified about defects that were not beyond the ken of an average lay person.
The Court found that the trial court did not err in denying Signature’s motion for JNOV and remittitur. The Court rejected Signature’s argument that the plaintiffs’ remedial actions were a superseding cause and/or evidence of contributory negligence. The Court rejected Signature’s contention that Figueroa did not have authority to act on its behalf, because there was sufficient evidence to find apparent authority. Furthermore, the record supported a finding that the plaintiff’s relied on deceptive statements about Signature’s approved builders. The Court found sufficient evidence to support the damages award.
The Court held that the trial court did not err in requiring Signature to post a bond to secure the damages. It recognized that he trial court has broad equity powers and inherent authority to protect the subject matter of its decision—the jury’s damage award. See, In the Matter of Hampers & Hampers, 154 N.H. __ (decided Nov. 1, 2006).
Foreclosure/Right to Self-Help Eviction
James M. Greelish v. Diane Wood
December 7, 2006
Affirmed in part; vacated in part; and remanded.
- Whether the trial court incorrectly calculated the plaintiff’s damages for defendant’s failure to vacate the premises.
- Whether the trial court erred in awarding damages to the defendant for plaintiff’s conduct.
The plaintiff purchased property at foreclosure sale and served the defendant, a life tenant, with notice to quit the premises. The defendant did not leave, and the plaintiff brought a landlord-tenant action seeking damages for rent while defendant was in possession. Defendant sought damages for harassment and for loss of personal property. The trial court found that plaintiff had engaged in conduct to force the defendant to leave, and removed her personal property before she retrieved it. On appeal the New Hampshire Supreme Court remanded for further proceedings. On remand the trial court awarded plaintiff $4,876.71 for the lost rent, and awarded the defendant $5,390.09 for the plaintiff’s improper conduct and lost property. Plaintiff appealed.
The Court held that the trial court erred in calculating the lost rent. The trial court awarded damages for lost rent starting on the date that the plaintiff had found a new tenant. The Court held that damages begin to accrue on the date that a tenant begins holding over—not when a new tenant is found. The Court vacated the plaintiff’s damages and remanded for recalculation.
The plaintiff argued that the trial court improperly awarded the defendant damages for his conduct. The plaintiff, relying on RSA 540:26, contended that he was entitled to use self-help. The Court rejected the plaintiff’s argument. The Court found that RSA 540:12 should be read narrowly, and does not preserve the right to self-help eviction. The Court, holding that self-help was unavailable to the plaintiff, affirmed the defendant’s damages awarded.
In the Matter of the Liquidation of the Home Insurance Company
December 5, 2006
- Whether the superior court erred in upholding the New Hampshire Commissioner of Insurance’s proposed agreement with the insured and reinsured of Home Insurance Company
The New Hampshire Commissioner of Insurance (commissioner) as liquidator of Home Insurance Company (Home) approved an agreement for payments to certain insured and reinsured of Home, in exchange for the filling of claims against Home. The intervenors challenged the proposed agreement, and the superior court upheld the agreement. The intervenors appealed.
Home, as a member of the American Foreign Insurance Association (AFIA), entered insurance and reinsurance agreements with entities in the United Kingdom (the AFIA Cedents). Home was subsequently declared insolvent and the commissioner was appointed as liquidator. RSA 402-C:44 (2006) governs the order of claim distribution and the AFIA Cedents’ reinsurance contracts fell into Class V, which made it unlikely their claims would be paid—and would deter them from filling. The commissioner proposed an agreement where the AFIA Cedents would receive a payment, characterized as an administrative cost, for filling their claims.
The Court held that the trial court did not err in upholding the commissioner’s proposed agreement. The Court, citing RSA 402-C:25, noted that the commissioner has broad authority to take all necessary and appropriate actions in collecting the assets of an insolvent insurer. The Court found that the AFIA Cedents’ claims would provide Home’s estate with a large asset to liquidate. Furthermore, there was sufficient evidence that the AFIA Cedents would not file their claims without a financial incentive. The Court held that the commissioner had authority to enter into the proposed agreement, and make administrative payments to lower priority creditors—the AFIA Cedents—because the action was necessary and appropriate in collecting assets.
The intervenors argued that the trial court failed to apply a multi-factor test in determining if the agreement was fair and reasonable. The Court found that the trial court did not precisely apply the multi-factor test outlined in In re Estate of Indiana Motorcycle Mfg., Inc., 299 B.R. 8 (D. Mass. 2003), but they considered relevant factors. The Court held that the trial court did not err in ruling that the proposed agreement was fair and reasonable.
Petition of Maxi Drug, Inc. & a.
December 28, 2006
- Whether the commissioner of the Department of Health and Human Services (DHHS) erred in ruling that the DHHS Medicaid recovery system was lawful.
Petitioners, a group of pharmacy providers and a pharmacy trade association (pharmacy providers) sought declaratory judgment from the commissioner of Department of Health and Human Services. The commissioner failed to render a judgment, and the petitioners filed a request to certiorari. The commissioner was ordered to render a judgment. After the rendering of judgment, the petitioners renewed their writ of certiorari and argued that it was ripe for adjudication. The Court agreed and granted their request.
The Court found that the commissioner erred in concluding that the DHHS Medicaid recovery system was lawful. DHHS issued notices to pharmacy providers that other claim payment sources, such as Medicare, must be exhausted before Medicaid is utilized. After conducting audits, DHHS sought repayment for improperly paid claims and refused to pay valid claims until repayment was made. The Court, citing federal Medicaid regulations, found that there are two options available to DHHS when a third-party is liable for a claim: 1) if third party liability is established prior to payment, DHHS must practice “cost avoidance” by rejecting and returning the claim to the provider to determine third party liability; and 2) if third party liability is found after payment, DHHS must practice “pay and recover later” by seeking reimbursement from the third party providers.
The Court noted that federal regulations allow a reduction of future payments to providers when overpayments have been made, but the Court distinguished overpayment from third party liability. The Court found that the overpayment recoupment process is not available in third party liability situations, and held that the commissioner erred in finding DHHS could recoup by reducing future payments.
OB/GYN Associates of Southern New Hampshire v. New Hampshire Insurance Guaranty Association
December 19, 2006
- Whether NHIGA was time-barred from arguing that the Covenant policy’s coverage relieved it of any reimbursement obligation.
- Whether the trial court erred in ruling that insurance policy coverage had to be exhausted before NHIGA’s had an obligation to pay.
- Whether the trial court erred in ruling that there was coverage available to OB/GYN under its insurance policy.
Dr. Leonard Wasserman, M.D. (Wasserman) was insured by PHICO Insurance. Wasserman was an employee of OB/GYN, which was insured by Covenant Health Systems Insurance, Ltd. (Covenant). An action was filed against Wasserman and OB/GYN—under a theory of vicarious liability. PHICO was declared insolvent and New Hampshire Insurance Guaranty Association (NHIGA) assumed Wasserman’s defense pursuant to RSA 404-B:8. OB/GYN settled the claims against itself and Wasserman. Wasserman assigned his rights under his insurance policy to OB/GYN. OB/GYN brought an action for declaratory judgment against NHIGA to recover the settlement portion paid on Wasserman’s behalf. NHIGA moved for summary judgment, which was granted. OB/GYN appealed.
The Court found that the trial court correctly ruled that NHIGA was not time-barred from litigating the Covenant policy’s construction. RSA 491:22, III, provides a limitations period for filing declaratory judgments. OB/GYN argued that NHIGA had, in effect, filed a de facto declaratory judgment when it sought to determine insurance coverage under the Covenant policy. The Court rejected this argument because NHIGA never filed a petition for declaratory judgment. Therefore, RSA 491:22, III, was not applicable, and did not time-bar NHIGA from asserting a defense that relied on interpretation of the Covenant Policy.
The Court found that the Covenant policy must be exhausted before NHIGA has a duty to pay. The Court cited RSA 404-B12, I, which states “[a]ny person having a claim against an insurer under any provision in an insurance policy other than a policy of an insolvent insurer which is also a covered claim…shall be required to exhaust first his right under such policy.” RSA 404-B12, I. The Court found that the claim against Wasserman is a covered claim, and OB/GYN must exhaust its insurance if it is also a covered claim. It held that the claim against OB/GYN is a covered claim, because it is based on a theory of vicarious liability—the claims against Wasserman and OB/GYN involved the same factual allegations and legal assertions. Therefore, the trial court did not err in ruling that the Covenant policy must be exhausted before NHIGA is obligated to pay.
The Court held that the trial court did not err in finding that there was coverage available to OB/GYN under the Covenant policy. OB/GYN argued that the policy did not cover negligence of physicians providing direct care. It found that Wasserman was an employee of OB/GYN and was acting “by or for” OB/GYN when providing care. Therefore, the trial court did not err in finding coverage was available.
New Hampshire Insurance Guaranty Association v. Elliot Hospital
December 20, 2006
- Whether the trial court erred in ruling that the exhaustion and offsetting requirements of RSA 404-B:12, I, are limited to first party claims against an insurer.
- Whether the claim against Hitchcock is a covered claim under RSA 404-B:12, I, which would require exhaustion of Hitchcock’s available insurance.
- Whether finding that Hitchcock is fifty-one percent liable, under rules of joint and several liability, would make the claim against Elliot a claim against Hitchcock that is subject to the exhaustion requirements of RSA 404-B:12, I.
A mother and father brought malpractice suits against Elliot Hospital (Elliot,) and Dartmouth-Hitchcock Clinic and Hitchcock Clinic (collectively, Hitchcock). The action was based on brain damage their child suffered during delivery. The child was delivered at Elliot, while Hitchcock managed the mother’s pregnancy, labor and delivery. Elliot’s insurer, PHICO Insurance Company, was declared insolvent, and the New Hampshire Insurance Guaranty Association (NHIGA) undertook its duties pursuant to RSA Chapter 404-B. Hitchcock was insured by Lexington Insurance Company (Lexington). Prior to trial NHIGA petitioned the court for a declaration that the Lexington policy must be exhausted before NHIGA is obligated to pay. Elliot and NHIGA filed cross motions for summary judgment and the superior court granted Elliot’s motion.
The Court agreed with NHIGA’s assertion that, under RSA 404-B12, I, the malpractice claim against Hitchcock is a claim against an insurer. However, the Court disagreed with NHIGA’s contention that this was a “covered claim” and subject to the exhaustion requirements of 404-B:12, I. The Court found that the claims against Hitchcock and Elliot are not the same claim. The Court noted that Hitchcock alone was charged with negligent prenatal care, and there was no evidence that Hitchcock bore legal responsibility for the actions of Elliot’s employees. The Court distinguished this case from OB/GYN Associates of Southern New Hampshire v. New Hampshire Insurance Guaranty Association, 154 N.H. __ (2006), where the court found a claim based on a theory of vicarious liability was a covered claim.
The court rejected NHIGA’s argument that the rules of joint and several liability could trigger the exhaustion requirements of RSA 404-B:12, I. The Court found that, while the rules of joint and several liability can provide another avenue of recovery, the rules do not transform a claim against Elliot into a claim against Hitchcock. Accordingly, the Court upheld the trial court’s order requiring NHIGA to undertake its statutory obligations.
New Hampshire Motor Transportation Association Employee Benefit Trust v. New Hampshire Insurance Guaranty Association & a.
December 21, 2006
- Whether the trial court erred in granting NHIGA’s motion for summary judgment, because the Legion Insurance policy was not direct insurance covered under the Guaranty Act, and the claims against Trust’s were not “covered claims” under RSA 404-B:5, IV.
- Whether the trial court erred in granting NHLHIGA’a motion for summary judgment, because Trust’s claims arose from a reinsurance policy.
The New Hampshire Motor Transport Association Employee Benefit Trust (Trust) is a non-profit multiple-employer welfare arrangement organized under RSA chapter 415-E (2006). The Trust provides a health care benefit program to members of the New Hampshire Motor Transport Association. Trust purchased specific loss insurance from Legion Insurance Company (Legion), which was subsequently liquidated leaving unpaid claims. Trust requested that the New Hampshire Insurance Guaranty Association (NHIGA) and/or the New Hampshire Life and Health Insurance Guaranty Association (NHLHIGA) assume responsibility for the unpaid claims, but both refused. Trust filed a petition for declaratory judgment and all parties moved for summary judgment. The trial court granted the NHIGA and NHLHIGA motions for summary judgment and Trust appealed.
The Court noted that if Trust is an “insurer” it is not entitled to coverage under the Guaranty Act and has no claim against NHIGA. The Court analyzed the meaning of insurer and determined that the Trust is an “insurer.” The Court rejected Trust’s contention that it cannot be an insurer, because it is not subject to various regulations that pertain to insurance companies. The Court rejected Trust’s argument that the Guaranty Act must apply because arrangements created pursuant to RSA 415-E are required to obtain excess insurance. The Court found that the Guaranty Act was not written to include arrangements created under RSA chapter 415-E, and the Court will not read additional language into the statute. The trial court correctly granted NHIGA’s motion for summary judgment.
The Court agreed with the trial court’s ruling that Trust was not entitled to coverage under the Life and Health Guaranty Act. NHLHIGA contended that excess loss insurance, like Trust’s claim against Legion, is not covered under RSA 405-B:5, II(a). The Court agreed. It noted that NHLHIGA only provides coverage for direct health insurance policies. The Court found that the insurance policy between Trust and Legion was not a direct policy, because Trust itself was insured—not Trust’s member employees. The Court held that the trial court did not err in granting NHLHIGA’s motion for summary judgment.
Personal Jurisdiction/Minimum Contacts
Vermont Wholesalers Building Products, Inc v. J.W. Jones Lumber Company, Inc.
December 21, 2006
Vacated and remanded
- Whether a manufacturer’s awareness that a product will reach New Hampshire in its stream of commerce is sufficient to establish “minimum contacts” in New Hampshire.
Jones Lumber (Jones), a North Carolina corporation, manufactures and sells lumber products. Jones Lumber sells its products to Vermont Wholesalers Building Products (Vermont Wholesalers), which distributes to four states—one of which is New Hampshire. Jones was aware that Vermont Wholesalers distributed its products to New Hampshire retailers. New Hampshire residents filed a suit alleging defective flooring, manufactured by Jones Lumber, was installed in their home. A third party action was brought against Jones, and Jones moved to dismiss for lack of personal jurisdiction. The trial court denied the motion and Jones appealed.
The Court’s decision began with an in-depth analysis of the legal requirements for the exercise of personal jurisdiction. The issue before the Court was whether placing a product in a stream of commerce with knowledge it would arrive in the forum state was sufficient to find minimum contact. The Court considered World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980), and found forseeability that a product might reach the forum state. The Court analyzed the various opinions in Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987), where the court considered whether placing a product into the stream of commerce is sufficient to assert personal jurisdiction. The Court found Justice O’Connor’s “stream of commerce plus” theory to be the most consistent with the United State Supreme Court’s holding in World-Wide Volkswagen. The Court, found that the trial court did not apply the “stream of commerce plus” theory when it found personal jurisdiction over Jones. The Court vacated and remanded to the trial court to apply the proper standard.
Planning Board Decision
Property Portfolio Group, LLC v. Town of Derry & a.
December 21, 2006
- Whether the trial court erred in granting the Town of Derry’s motion to dismiss Property Portfolio Group’s (PPG) petition for declaratory judgment, because PPG’s petition was untimely filed.
Hall Business Restoration (Hall) sought a site plan determination from the Town of Derry (Town) to convert a former fire station into a diner. Property Portfolio Group (PPG) was an abutter with notice of the proceedings. The Town approved Hall’s application for site plan determination. Five months after the Town’s approval, PPG filed a petition in the superior court for restraining orders and declaratory judgment. Town filed a motion to dismiss asserting that PPG’s petition was untimely filed. The superior court granted the Town’s motion, and PPG appeals.
The Court found that PPG’s petition for declaratory judgment was untimely filed under RSA 677:15, I (Supp. 2006). Pursuant to RSA 677:15, I, a person “aggrieved by any decision of the planning board” must present a petition to the superior court “within 30 days after the date upon which the board voted to approve or disprove the application.” PPG contended that the planning board did not render a decision, because there was no application before it, and a condition precedent was attached to the decision. The Court found a proper application was before the planning board, and disagreed that a condition precedent was attached to approval—finding it was a condition subsequent. The Court disagreed with PPG’s contention that RSA 676:4, IV, provided the trial court with jurisdiction to review procedural aspects of the planning board’s decision outside of the 30 day appeal period. Lastly, the Court found PPG reliance on zoning case law, to support its contention that the petition should have been heard outside the appeal period, was misplaced. The Court held that PPG’s appeal of the Town planning board decision was untimely and the trial court properly dismissed PPG’s petition for declaratory judgment.
Right-to-Know Law/Freedom of Information Act
Frederick J. Murray v. New Hampshire Division or State Police, Special Investigation Unit & a.
December 20, 2006
Vacated and remanded
- Whether the trial court erred in ruling that the documents requested by the petitioner were investigatory in nature and not subject to disclosure under the New Hampshire Right-to-Know Law and the Federal Freedom of Information Act.
Petitioner requested records and information relating to the investigation of his missing daughter. The attorney general’s office denied all requests, and petitioner filed a petition in the superior court for a declaration that the denial violated the New Hampshire Right-to-Know Law and the Federal Freedom of Information. The superior court denied petitioner’s requests, and the petitioner appealed.
The Court disagreed with the trial court’s ruling that the requested records were not subject to disclosure because they were investigatory in nature. The Court analyzed the New Hampshire Right-to-Know Law, RSA ch. 91-A (2001 & Supp. 2006) and found that its provisions should be interpreted broadly in favor of disclosing information. The Court—noting that the Right-to-Know Law does not address requests for police investigation files—adopted the Federal Freedom of Information Act’s six-prong test for evaluating requests for investigation files. The Court focused on the disclosure exemption, which the trial court relied on when it ruled that disclosure would interfere with an investigation. The Court found that the State failed to meet its burden of establishing that disclosure would actually interfere. The mere fact that the documents relate to an investigation is not enough to establish interference. The Court vacated and remanded so the State may present evidence that disclosure will interfere with an investigation.
Margaret A. Shaff v. Edith W. Leyland
December 6, 2006
- Whether the Superior Court erred in granting summary judgment in favor of petitioner, finding that the respondent lacks standing to enforce a restrictive covenant.
Respondent owned approximately seventy-five acres in Amherst. The respondent began selling portions of the property, and conveyed twenty-three acres to the petitioner with a restrictive covenant—providing that only a colonial-type residence with a market value of one-hundred thousand dollars may be built on the property. The respondent currently owns no property in Amherst, the petitioners want to build more homes on the property, and the respondent seeks to enforce the restrictive covenant. The trial court granted petitioner’s motion for summary judgment on the basis that respondent lacks standing to enforce the covenant.
The Court found that the trial court did not err in granting the motion for summary judgment for lack of standing. The Court identified the majority rule for standing to challenge a covenant, which provides that a person must own property benefited by the covenant to suffer an injury. The respondent urged the Court to adopt the Restatement (Third) of Property, which does not require ownership to have standing—instead the holder need only “establish a legitimate interest in enforcing” the covenant. Restatement (Third) of Property: Servitudes, §8.1. The Court analyzed and distinguished covenants “appurtenant” and “in gross,” and noted that the common law has not always recognized covenants in gross. It noted that the general rule of deed interpretation favors appurtenant covenants. Therefore, the Court will construe servitudes as appurtenant unless the deed expresses a contrary intent. It found that here the covenant is appurtenant, and the respondent lacked standing to enforce the easement. Furthermore, the Court noted that it has not decided to adopt the Restatement (Third) of Property: Servitudes, §8.1, because, even if it did adopt the rule, the holding would not change. It rejected respondent’s argument that she has standing under theories of contract law.
Zoning/Conditions Attached to a Variance
Michelle J. Robinson v. Town of Hudson
December 20, 2006
- Whether the superior court erred in affirming the cost condition attached to the petitioner’s variance.
- Whether the cost condition attached to the variance is arbitrary and unreasonable.
The petitioner owns an undeveloped lot in a six-lot subdivision. The subdivision plan called for the extension and paving of Mark Street (the Mark Street extension), but the street was never paved. The petitioner’s lot has approximately fifty feet of frontage on a paved street, Wason Road. The petitioner decided to develop the lot in 2001 and sought a variance, because the lot lacked 150 feet of frontage on Wason Road. The Town of Hudson Zoning Board of Adjustment (ZBA) denied the variance, and the superior court dismissed the petitioner’s appeal. The Supreme Court reversed the superior court’s dismissal and remanded. The superior court vacated the ZBA’s decision and remanded for a de novo hearing. The ZBA granted the variance with four conditions. The petitioner filed a motion for rehearing, to challenge the first and fourth conditions, which the ZBA denied. On appeal, the superior court affirmed the ZBA decision, and petitioner appealed.
The Court found that the petitioner failed to assert that the cost condition was vague, in her motion for rehearing before the ZBA, and the matter is not preserved for appeal. The petitioner argued that using the word “unspecified” when addressing the cost condition was sufficient to preserve the issue. The Court noted that RSA 677:3, I (1996), requires that a motion “shall set forth fully every ground upon which it is claimed that the decision or order complained of is unlawful or unreasonable.” The Court held that the petitioner’s motion for rehearing failed to set forth a claim that the cost condition was vague.
The Court rejected the petitioner’s argument that the cost condition is arbitrary and unreasonable. It noted that the petitioner is only required to pay a pro rata share of the cost, not the entire cost of the road. The Court also rejected the petitioner’s argument that the cost condition imposes an unknown financial obligation and no reasonable person would purchase the lot. It reasoned that granting a variance, which made the lot buildable, presumably increased its value. Finally, the Court did not accept the petitioner’s argument that the condition is unlawful because it regulates the owner, not the land. The Court noted that the condition applies to the land, not a specific person, because it applies to owner at the time of road construction. Therefore, the Court held that the cost condition is not arbitrary or unreasonable.
The Court found that the liability condition, which releases the town of liability for maintenance and repair of the Mark Street Extension, is reasonable. The Court recognized the Town’s concern that other lot owners may use the petitioner’s driveway to access the Mark Street Extension, and the condition protects the town from liability. However, the Court noted that circumstances may change if/when the Mark Street Extension is completed, but offered no opinion on that issue now.