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Bar News - August 15, 2008

NH Supreme Court At-a-Glance July 2008 – Part 1



Hogan Family Enterprises, Ltd. v. Town of Rye
July 2, 2008

· Whether the trial court erred by concluding that the settlement agreement between the parties was: 1) not barred by the Statute of Frauds pursuant to RSA 506:1 (1997); 2) was enforceable; and 3) should not be set aside upon grounds of surprise, mistake or duress.

Hogan owned a property in Rye that abutted Fair Hill Avenue which had naturally occurring wetlands on it that existed since pre-colonial times. A drainage pipe discharges water from Fair Hill Avenue onto the property owned by Hogan. A separate drainage system drained the water from the property to the sea. Hogan filed suit claiming that the drainage system was no longer adequate and caused damage to his property.

Before trial, the parties reached a settlement agreement. The parties met with the judge in chambers and after counsel for the town read aloud the terms of the settlement agreement, the trial court signed an order requiring the parties to file their settlement agreement with the Court. Upon drafting of the settlement agreement, Hogan refused to execute the agreement and hired new counsel and challenged whether the agreement was enforceable.

The Court found that settlement agreements "finalized under court supervision" are not bound by the Statute of Frauds. The Court further found that despite the fact that the better practice for trial judges "presiding over settlement conferences" should do so on the record, it is not necessary and that the settlement agreements done in chambers are enforceable. Moreover, the Court stated that it is "the obligation of the parties and their counsel, and not the trial court, to ensure that a proper record is preserved." As to the final issue, the Court found that the decision to set aside a settlement agreement rests within the sound discretion of the trial court. Here, the trial court noted the terms of the settlement agreement during the settlement conference. Hogan, who was represented by counsel, appeared to understand the terms of the agreement. The Court further indicated that there was no indication of fraud and that Hogan was not under duress. As a result, the Court ruled in favor of the Town of Rye.

Gottesman & Hollis, of Nashua (Anna Barbara Hantz on the brief) for Hogan Family Enterprises, Ltd.

Michael L. Donovan, of Concord, by brief, for the Town of Rye

Jonathan McNeal v. Robert M. Lebel d/b/a RML General Contractor
July 11, 2008
Affirmed in part; reversed in part; and remanded

· Whether the trial court erred in: 1) ruling that the Plaintiffs breached the contract; 2) making certain factual findings 3) determining damages; 4) ruling that the home contained no substantial defects as the phrase is used in RSA 205-B:2; and 5) ruling that neither defendant committed any unfair or deceptive trade practices as contemplated by RSA 358-A:2 (Consumer Protection Act).

The plaintiffs, Jonathan and Paul McNeal, appealed an order by the Superior Court in their action against the defendants Pullman Modular Industries, Inc and Robert M. Lebel arising out of an alleged improper manufacture and/or construction of a modular home.

The Plaintiffs had a contract with defendants to construct a modular home. The terms of the construction financing required the loan to be paid by September 30, 2004, but the home was not ready for occupancy by that date. All parties had become "disappointed and distrustful of one another." Lebel informed the plaintiffs that he would refuse to do anymore work until paid. The plaintiffs refused to pay him until construction was complete. The plaintiffs’ attorney sent Lebel a letter demanded that he prioritize the work on the exterior of the home. Lebel refused and considered this a termination of his employment.

The Court first found that the plaintiffs anticipatorily breached the contract and upheld the trial court’s ruling on that issue. Likewise, the Court found that the trial court did not err in making certain factual findings or in the determination of damages. However, the Court, contrary to the trial court’s findings concluded that when Lebel failed to deliver a set of stairs to the plaintiffs so that they could receive a certificate of occupancy constitute a "substantial defect" pursuant to RSA 205-B:2. Finally, the Court found that the trial court correctly found no Consumer Protection violation.

Law Office of Joshua L. Gordon, of Concord (Joshua L. Gordon on the brief), and Bosen & Springer, P.L.L.C., of Portsmouth (Jonathan S. Springer orally), for the plaintiffs.

Tower, Crocker & Mullins, P.A. of Jaffrey (Thomas P. Mullins on the brief and orally), for defendant Robert M. Lebel d/b/a RML General Contractor.

Gormley & Gormley, P.C., of Nashua (Arthur O. Gormley, III on the brief and orally), for defendant Pullman Modular Industries, Inc.

Suzanne Orr v. David A. Goodwin
July 15, 2008

· Whether the trial court erred in concluding that the liquidated damages clause of the party’s contract was enforceable.

· Whether, in the event the liquidated damages clause is valid, if it does not limit the Plaintiffs to receiving the liquidated damages as the sole and exclusive remedy.

· Whether the Plaintiffs mistake in retaining the deposit as liquidated damages bars them from pursuing actual damages.

· Whether the parties’ contract should be construed against the defendants because the parties had unequal bargaining power, and because the defendants did not disclose a material contingency.

In October 2004, the parties executed a sales agreement in which the defendants agreed to purchase real and personal property in Madbury from the plaintiffs for $1,020,000. Upon execution of the agreement, the defendants paid a deposit of $10,000. The parties’ sale agreement contained a clause titled "Liquidated Damages", which stated: "If the Buyer shall default in the performance of their obligation under this agreement, the amount of the deposit may, at the option of the Seller, become property of the Seller as reasonable." In February 2005, the addendum was executed confirming that the defendants paid an additional $15,000 and indicated that the sale was to close by October 15, 2005. In October, 2005, the defendant informed the plaintiffs that they could not sell their home and therefore could not purchase the plaintiff’s property. The plaintiffs retained the $25,000 deposit and filed suit against the defendants eighteen months later seeking additional damages.

"In order for a liquidated damages clause to be enforced, three conditions must be met: 1) the damages anticipated as a result of the breach are uncertain in amount of difficult to prove; 2) the parties intended to liquidate damages in advance; and 3) the amount agreed upon must be reasonable and not greatly disproportionate to the presumable loss or injury." The Court found that the trial court properly upheld the liquidated damages provision. With regard to the second issue, the Court found that the trial court did not err in determining that the plaintiffs’ election was final and precluded a claim for actual damages. Finally, the Court concluded that the record did not convince the Court that the parties had unequal bargaining power.

Shaine & McEachern, P.A. of Portsmouth (Laurie A. Lacoste on the brief and orally), for the plaintiffs.

Boynton Waldron Doleac Woodman & Scott, P.A. of Portsmouth (William G. Scott on the brief and orally), for the defendants.

Devine, Millimet & Branch, P.A., of Manchester (Patrick C. McHugh and Matthew Johnson on the brief), for the New Hampshire Association of Realtors, as amicus curiae.


State of New Hampshire v. Nathaniel Gibbs
July 25, 2008

· Whether the trial court erred in using the evidence presented at trial which resulted in his acquittals as the sole basis for imposing a suspended sentence.

In September 2004, the defendant pled guilty to a misdemeanor count of possession of a controlled drug, and was sentenced to twelve months in the house of correction, all suspended upon the condition that he be of good behavior fore two years, with one year probation. In 2006, the defendant was charged with simple assault on a police officer, resisting arrest, disobeying a police officer, and driving while intoxicated, all arising out of an incident in May of that year. The resisting arrest, disobeying a police officer, and two assault charges were tried before a jury. The jury acquitted the defendant of all four charges and the state nol prossed the driving while intoxicated charge. The State prior to trial moved to impose the suspended sentence of the 2004 drug conviction based upon the allegations asserting that the May 2006 incident violated its condition of good behavior. The Court after the trial of the 2006 incident imposed six months of the suspended sentence.

The Court found that "a suspended sentence may be revoked upon proof by a preponderance of the evidence of a violation of the condition upon which the sentence was suspended." When the condition was to be of good behavior, the State’s burden of proof is satisfied by "either by establishing the fact of a criminal conviction or by proof of the commission of the underlying acts." The Court concluded that the trial court’s consideration of the evidence presented at trial regarding the acquitted conduct was proper for imposing the suspended sentence.

Kelly A. Ayotte, attorney general (Nicholas Cort, assistant attorney general, on the brief and orally), for the State.

Theodore Lothstein, assistant appellate defendant, of Concord, on the brief and orally, for the defendant.

State of New Hampshire v. Russell Brown
July 31, 2008
Reversed and Remanded

· Whether the trial court erred by ruling that the Defendant’s speedy trial right under the Interstate Agreement on Detainers Act ("IAD") (RSA 606-A) had not been violated when the Defendant had not been brought to trial within 180 days after the State received his request for final disposition of his charges.

The Defendant was incarcerated in Arizona when he was indicated on the charges at issue in this case. The State of lodged a detainer against him pursuant to the Interstate Agreement on Detainers and requested a speedy trial in New Hampshire. The State received the request on September 12, 2005 and the charges were not resolved until October 27, 2006.

"The purpose of the IAD is to encourage the expeditious and orderly disposition of outstanding charges and determination of the proper status of any and all detainers based on untried indictments, informations, or complaints." The 180 window of time may be extended in three circumstances. First, "provided that for good cause shown in open court, the prisoner or his counsel being present, the court having jurisdiction over the matter may grant any necessary or reasonable continuances." Second, the Defendant may waive his right to a speedy trial. Third, "the running of the 180 days time period shall be tolled whenever and for as long as the prisoner is unable to stand trial, as determined by the court." In the absence of a waiver, or the Defendant’s inability to stand trial, or one of the three enumerated circumstances above, the pending charges must be dismissed with prejudice if the prisoner is not brought to trial within 180 days.

Here the Court found that the State did not meet its burden is demonstrating that it was in compliance with the IAD and as a result the Court dismissed the Defendant’s charges with prejudice.

Kelly A. Ayotte, attorney general (Susan G. Morrell,, assistant attorney general, on the brief and orally), for the State.

David M. Rothstein, deputy chief appellate defendant, of Concord, on the brief and orally, for the defendant.


In the Matter of the Liquidation of the Home Insurance Company
July 25, 2008
Reversed and Remanded

· Whether the trial court erred by ignoring an agreement’s plain language, which unconditionally assigned the affiliated cedents’ claims to it.

The appellant, Century Idemnity Company, appealed an order of the Superior Court sustaining a referee’s ruling denying CIC’s asserted setoff of reinsurance claims in the liquidation of the Home Insurance Company. The respondent was Roger A. Sevigny, Commissioner of Insurance of the State of New Hampshire.

RSA 402-C:34 provides that "mutual debts or mutual credits between the insurer and another person in connection with any action or proceeding under this Chapter shall be set off and the balance only shall be allowed or paid except as provided in paragraph II." Paragraph II provided the exception that "no setoff shall be allowed in favor of any person where the obligation of the insurer to the person was purchased by or transferred to the person with a view to its being used as a setoff." The Court held that despite the trial court’s rulings, had the legislature intended to vest the liquidator with the discretion to disallow setoffs, "it would have chosen more permissive language such as ‘may’ or ‘might’. Accordingly, the Court declined to read RSA 402-C:34 to authorize discretionary disallowance of otherwise qualifying setoffs.

Orr & Reno, PA, of Concord (Ronald L. Snow and Lisa Snow Wade on the brief) and Morrison & Foerster LLP, of New York, New York (Gary S. Lee on the brief and Kathleen E. Schaaf orally), for the appellant.

Kelly A. Ayotte, attorney general (J. Christopher Marshall, attorney on the brief) and Rackemann, Sawyer & Brewster PC, of Boston, Massachusetts (J. David Leslie and Eric A. Smith on the brief, and Mr. Leslie orally), for the respondent.

At-a-Glance July Part II will appear in the Sept. 5 issue of Bar News.

Christopher J. Somma, Esquire received his B.A. in Religion and Sociology from Bates College and a Juris Doctorate degree from the Franklin Pierce Law Center. He is currently employed at Ford & Weaver, P.A. in Portsmouth, New Hampshire and concentrates his practice in creditor’s rights, bankruptcy, and commercial litigation.

Supreme Court Rule 42(9) requires all NH admitted attorneys to notify the Bar Association of any address change, home or office.

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