Bar News - October 14, 2011
US District Court Decision Listing - Sept. 2011
Olga L. Bogdanov v. Avnet, Inc.
Case No. 10-cv-543-SM, Opinion No. 2011 DNH 153
Bankruptcy trustee filed adversary proceeding against creditor seeking to avoid preferential payments. Bankruptcy court held that creditor had established subsequent new value defense against preference avoidance. In trustee’s appeal, district court affirmed bankruptcy court’s decision, thereby allowing subsequent new value to offset preferences that paid for previously advanced new value. 26 pages. Chief Judge Steven J. McAuliffe.
CIVIL MOTIONS (MISCELLANEOUS)
Bryant v. Liberty Mutual Group, Inc.
Case No. 11-cv-217-SM, Opinion No. 2011 DNH 151
Plaintiff filed suit against her former employer, saying it wrongfully terminated her employment and then fraudulently induced her to sign a release of claims, in exchange for severance pay. Defendant moved for judgment on the pleadings, asserting that plaintiff knowingly and voluntarily signed the release of claims and, despite her claims to the contrary, there was no fraud or duress. Accordingly, said the defendant, plaintiff’s claims are barred by the release. The court denied that motion, holding that the complaint, taken as true, described causes of action and defendant’s arguments were better raised on summary judgment. 3 pages. Chief Judge Steven J. McAulife.
United States v. Hulick, et al.
Case No. 08-cv-499-SM, Opinion No. 2011 DNH 152
Defendants moved the court to reconsider its order dismissing their counterclaims against the Internal Revenue Service. Specifically, they asserted that despite their lack of administrative exhaustion, the equitable doctrine of "recoupment" permitted them to maintain counterclaims under 26 U.S.C. § 7433. The court disagreed, holding that defendants’ counterclaims did not fit within the narrow scope of that equitable doctrine, as explained in several Supreme Court opinions. 3 pages. Chief Judge Steven J. McAuliffe.
Contino v. Hillsborough County Dept. of Corrs., et al.
Case No. 09-cv-65-PB, Opinion No. 2011 DNH 142
Plaintiff sued two Hillsborough County Department of Corrections officials and a doctor for injuries sustained during his incarceration, alleging that defendants failed to provide him with constitutionally adequate psychiatric, hypertension, and dental treatment. Defendants moved for summary judgment. The court granted the motion, concluding that plaintiff failed to exhaust administrative remedies for the hypertension and dental treatment claims, as required by the Prison Litigation Reform Act. With respect to the psychiatric treatment claim, court held that plaintiff failed to provide any competent evidence that would enable a reasonable finder of fact to conclude that the treatment he received was constitutionally inadequate. 21 pages. Judge Paul J. Barbadoro.
CIVIL RIGHTS; EMPLOYMENT
John Balsamo v. University System of New Hampshire, et al.
Case No. 10-cv-500-PB, Opinion No. 2011 DNH 150
Plaintiff, a maintenance technician at the University of New Hampshire, sued his employer and four of the University’s employees when he was fired. In regard to plaintiff’s state law claims, the court denied to motion to dismiss the breach of contract claim against the University, finding that the employee handbook could give rise to contractual obligations and finding that an ambiguous online disclaimer did not preclude the creation of an enforceable contract. The court dismissed a claim for the breach of covenant of good faith and fair dealing as duplicative of the breach of contract claim, dismissed a claim for wrongful discharge on the basis that the complaint included only conclusory allegations, and dismissed a tortious interference with contract claim because plaintiff had not sufficiently alleged that the individual defendants acted outside the scope of their authority. In regard to plaintiff’s constitutional claims, the court found the allegations sufficient to support the possibility of a protected property interest in employment, and therefore allowed a due process claim to proceed. The court dismissed plaintiff’s equal protection and free speech claims, however, finding the complaint failed to allege facts showing that similarly situated individuals were treated differently and failed to specify any words or conduct of plaintiff that would qualify as protected. 25 pages. Judge Paul Barbadoro.
CIVIL RIGHTS; FOSTER CARE
K., et al. v. NH Department of Health & Human Services
Case No. 09-cv-94-JL, Opinion No. 2011 DNH 157*
The plaintiffs, the parents of children who had been temporarily placed in foster care through the efforts of the New Hampshire Department of Health and Human Services, sued the Department, one of its divisions, one of its district offices, and a number of their employees, alleging, inter alia, that the foster placements had violated the rights of both the parents and children under various federal statutes setting conditions on federal funding to the states for foster and child welfare programs, as well as a state-law claim for negligent infliction of emotional distress on behalf of the parents. The defendants moved to dismiss these claims, arguing the statutes in question neither implied any private rights of actions nor created any privately enforceable rights under 42 U.S.C. § 1983, and that the parents’ negligence claim failed because the defendants had no duty to them. The court granted the defendants’ motions to dismiss these claims, ruling that (1) the statutory provisions evinced no Congressional intent to create privately enforceable rights, since they were couched in unclear language and were enforceable by the federal Secretary of Health and Human Services, who could revoke federal funding only if a state failed to maintain "substantial conformity" with the requirements as a whole and (2) even assuming that the defendants had acquired a duty to the children, that did not give them any duty to the parents, so their negligence claim failed. 31 pages. Judge Joseph N. Laplante.
COMMERCIAL LITIGATION, EVIDENTIARY REQUIREMENTS ON SUMMARY JUDGMENT
Clearview Software, et al. v. Christopher Ware
Case No. 07-cv-405-JL, Opinion No. 2011 DNH 139
The plaintiffs, who were authorized resellers of products made by the defendant’s employer, sued the defendant, one of its regional account managers, alleging that he had committed violations of the New Hampshire Consumer Protection Act, tortiously interfered with the plaintiffs’ relationship with one of their customers, and engaged in a civil conspiracy with one of the plaintiffs’ competitors and its employees. The thrust of the plaintiffs’ claims was that the defendant, in seeking to have that competitor approved as an authorized reseller of his employer’s products and to secure credit approval from one of the employer’s distributors so that the competitor could attempt to secure a contract from the customer, had made statements "passing off" the competitor as essentially the same entity as the plaintiffs. The court granted the defendant’s motion for summary judgment on those claims, ruling that (1) there was no admissible evidence that the defendant made the statements, because an e-mail from the distributor’s employee attributing them to the defendant could not be admitted for that purpose, (2) even if there was such evidence, the claims would still fail because it was undisputed that, before the defendant’s employer and its distributor decided to authorize the competitor, they knew that it was not in fact the same entity as the plaintiffs, and (3) the plaintiffs had no fiduciary or other "special" relationship with the defendant--or, for that matter, his employer--that obligated him to correct misstatements made by others who were not under his control, or protected them against the employer’s authorizing the competitor to compete with the plaintiff. 35 pages. Judge Joseph N. Laplante.
Yorgo Foods, Inc. v. Orics Industries, Inc.
Case No. 08-cv-438-SM, Opinion No. 2011 DNH 145
Plaintiff contracted with defendant to purchase a custom-manufactured food packaging machine. But, due to extended delays in delivery, plaintiff cancelled the contract and sought return of its substantial deposit. When defendant refused, plaintiff brought suit. The case was tried before the court, which ruled in favor of plaintiff on its breach of contract claims, but in favor of defendant on plaintiff’s remaining claims (breach of covenant of good faith; unjust enrichment; intentional misrepresentation; fraud; and Consumer Protection Act). As to plaintiff’s request for attorney’s fees, the court noted that neither the Uniform Commercial Code nor the parties’ contract provides for fees in the event of breach. And, because plaintiff failed to demonstrate that defendant’s litigation position was patently unreasonably or frivolous, it was not entitled to an award of attorney’s fees under New Hampshire’s common law. 40 pages. Chief Judge Steven J. McAuliffe.
DISCOVERY, EXPERT DISCLOSURE, WITNESS DISCLOSURE
Contour Design v. Chance Mold Steel, et al.
Case No. 09-cv-451-JL, Opinion No. 2011 DNH 154
Following a jury trial on its claims for damages for misappropriation of trade secrets and breaches of a non-disclosure agreement, the plaintiff challenged certain evidence the defendant intended to introduce at the upcoming hearing on the plaintiff’s claims for non-monetary relief, but that had not been introduced at the jury trial, arguing that it had not been properly disclosed. The court ruled that the defendant could not use the evidence--including a new witness, documents, and a new opinion from the defendant’s expert witness--because it had not been disclosed until nearly 4 months after the final pretrial deadline for the disclosure of witnesses and exhibits, and more than 8 months after the deadline for expert reports, the defendants had offered no justification for the belated disclosure, and it would obviously be highly prejudicial to the plaintiff, who had never heard of the previously undisclosed witness and had been told by the defendant that it did not possess the previously undisclosed documents and could not get them. 27 pages. Judge Joseph N. Laplante.
Exeter Hospital v. New England Homes
Case No. 10-cv-377-JL, Opinion No. 2011 DNH 135
The plaintiff, a hospital, brought a claim under the Employee Retirement Income Security Act ("ERISA"), seeking reimbursement of a payment it had mistakenly refunded to the defendant, an employer whose employee the hospital had treated, reimbursing the hospital for the costs of that treatment under the employer’s health insurance plan. The plan’s third-party claims administrator had rejected the hospital’s request for reimbursement, but the hospital had not appealed that denial to the employer itself, as provided by the plan. The defendant moved for summary judgment, arguing that the plaintiff’s claim was barred because it had failed to exhaust administrative remedies by failing to appeal the initial denial of reimbursement. While the hospital suggested that, because the plan had been terminated before the time to appeal ran out, any appeal would have been futile, it failed to come forward with any evidence supporting that view, so the court granted the employer’s motion for summary judgment. 12 pages. Judge Joseph N. Laplante.
EVIDENCE, HEARSAY, EXPERT TESTIMONY
Julie Westerdahl, et al. v. Bruce Williams
Case No. 10-cv-266-JL, Opinion No. 2011 DNH 136*
The defendant, who had allegedly injured the plaintiff in a bicycle accident, moved to preclude certain evidence from the upcoming trial of her negligence claim, including (1) an opinion by a doctor who had treated her for her injuries as to her need for surgery and its likely cost, and (2) the conclusion in a police report of the accident that the defendant had caused it by failing to yield and exercise due care. The court granted the defendant’s motion to exclude the challenged medical opinion, which had not been disclosed to the defendant until more than six months after the deadline for expert reports. The court rejected the plaintiff’s argument that no report was necessary because the doctor was her treating physician, because the doctor had not reached the challenged opinion during his treatment of the plaintiff. But the court denied the defendant’s motion to exclude the challenged opinion from the police report, ruling that, under Fed. R. Evid. 803(8)(C) as interpreted by the Supreme Court and the First Circuit Court of Appeals, the opinion was not inadmissible merely because it stated a conclusion, or because the officer was not an expert in accident reconstruction. The court did rule, however, that the opinion would be excluded if the plaintiff could show, by examining the officer at trial outside the presence of the jury, that the conclusion was untrustworthy. 18 pages. Judge Joseph N. Laplante.
FREEDOM OF INFORMATION ACT
Sensor Systems Support, Inc. v. FAA
Case No. 10-cv-262-PB, Opinion No. 2011 DNH 141
Sensor Systems filed a complaint seeking to compel the Federal Aviation Administration ("FAA") to produce records in response to its request under the Freedom of Information Act ("FOIA"). The statutory provision on which Sensor Systems based its claim requires agencies to act on appeals from initial FOIA decisions within 20 days. The FAA filed a motion to dismiss or in the alternative for summary judgment. The court granted the motion, concluding that the FOIA gives federal courts the power to decide claims that an agency has improperly withheld agency records, but does not similarly authorize a court to review an agency’s failure to act on an appeal. The court delayed entry of final judgment for 20 days to give Sensor Systems an opportunity to file an amended complaint setting forth a claim that FAA has improperly withheld records. 3 pages. Judge Paul J. Barbadoro.
FUGITIVE DISENTITLEMENT DOCTRINE
United States v. C. Gregory Melick
Case No. 10-cv-308-JD, Opinion No. 2011 DNH 148
Melick is subject to an IRS summons, which he has ignored. The government petitioned to enforce the summons, and the court issued an order for Melick to show cause why the government’s petition should not be granted. Melick failed to appear at the show cause hearing. Melick’s motions to dismiss were denied, and he was ordered to obey the IRS summons. Melick again failed to comply with the order. The government moved to hold Melick in civil contempt, and the court ordered Melick to appear at a hearing to show cause why he should not be held in contempt, warning that a warrant would issue for his arrest if he did not appear for the hearing. Melick did not appear, and the court issued a bench warrant for Melick’s arrest. Melick has failed to comply with the warrant and remains at large. The government moved to strike Melick’s most recent motion to dismiss under the fugitive disentitlement doctrine. The court granted the motion because Melick is a fugitive, his fugitive status arose in this case, and he has repeatedly defied the court’s authority in this case. 11 pages. Judge Joseph A. DiClerico, Jr.
LANDLORD TENANT; COMMERCIAL LEASE
Flo-Pro, Inc. v. 10 Iron Horse Drive, LLC, et al.
Case No. 11-cv-158-JL, Opinion No. 2011 DNH 155
The tenant under a commercial lease sued its landlord, seeking a declaratory judgment that the landlord had wrongfully terminated the lease and a preliminary injunction against the landlord’s interference with the tenant’s possession of the premises. The landlord had terminated the lease because, after it had taken over the landlord’s interest by assignment, the tenant had failed to provide the required security deposit; while the landlord possessed a letter of credit in favor of the former landlord, the tenant had acknowledged in an estoppel certificate that it would have that instrument assigned to or reissued in favor of the new landlord, but had failed to do so. The landlord moved to dismiss, arguing that, even though diversity jurisdiction existed, the court lacked subject-matter jurisdiction over possessory actions or that it should abstain from exercising jurisdiction because the landlord-tenant relationship was governed by state law. The court denied the motion to dismiss the case because it was not a possessory action, but an action for a declaratory judgment as to the parties’ rights under the lease, and that the mere fact that state law provided the rules of decision did not justify abstention. The court also denied the motion for preliminary injunction, rejecting the tenant’s argument that it was excused from providing the security deposit because the landlord had refused to turn over the letter of credit in favor of the former landlord; the landlord had no such express or implied obligation under the lease, and the tenant could not have reasonably expected the landlord to do so, in light of the estoppel certificate and the parties’ course of dealing. 34 pages. Judge Joseph N. Laplante.
SOCIAL SECURITY; EVIDENCE OF DISABILITY
Gloria Ann Young v. Michael J. Astrue, Commissioner, Social Security Administration
Case No. 10-cv-417-JL, Opinion No. 2011 DNH 140
A claimant appealed the denial of disability benefits, contending that the administrative law judge improperly: (1) found that her depression was not a severe impairment, (2) assessed her credibility, (3) failed to give controlling weight to the medical opinion of her treating physician and assigned greater weight to the opinion of a non-examining physician, and (4) failed to consider the impact of obesity on her ability to work. The Commissioner moved for an order affirming his decision. The court denied the claimant’s motion and granted the Commissioner’s motion. The court, after a searching review of the record, concluded that there was ample record support for the administrative law judge’s finding that Young’s mental impairments only had a mild effect on daily life. The court also concluded that there was ample record support for the conclusion that Young’s daily activity level was consistent with an ability to perform light duty work. The court also concluded that the record supported the administrative law judge’s decision to give greater weight to the residual functional capacity assessment of a consulting physician than to the opinion of Young’s treating physician. The court also found that although the administrative law judge did not perform an in-depth analysis of the functional effects of Young’s obesity, the ALJ properly considered that impairment and committed no error. 40 pages. Judge Joseph N. Laplante.
Candy Hudon v. Michael J. Astrue, Commissioner, Social Security Administration
Case No. 10-cv-405-JL, Opinion No. 2011 DNH 143
The claimant appealed the denial of disability insurance benefits and supplemental security income benefits claiming that the administrative law judge did not adequately account for the severity of her mental impairments and did not give appropriate weight to her treating source’s opinion when formulating Hudon’s residual functional capacity. The Commissioner moved for an order affirming his decision contending that any mistakes on the part of the administrative law judge were simply "scrivener’s errors" and record evidence supported the decision . The court granted the claimant’s motion and denied the Commissioner’s motion. The court concluded that the administrative law judge’s finding that Hudon experienced three episodes of decompensation was not an obvious "scrivener’s error," and undermined the conclusion that Hudon was not disabled. The court also concluded that the administrative law judge’s evaluation of the medical opinion evidence was inconsistent and unsupported by the record. Therefore, the decision lacked substantial evidentiary support and must be reversed. 14 pages. Judge Joseph N. Laplante.
Linda A. Beck v. Michael J. Astrue, Commissioner, Social Security Administration
Case No. 10-cv-362-JL, Opinion No. 2011 DNH 146
The claimant appealed the denial of disability benefits, claiming that the administrative law judge: (1) failed to give controlling weight to her treating physician’s functional capacity assessment because the administrative law judge misinterpreted a notation in Beck’s medical records that she was "doing quite well", and (3) did not properly assess Beck’s credibility. The Commissioner moved for an order affirming this decision. The court granted the claimant’s motion and denied the Commissioner’s motion. The administrative law judge concluded that Beck’s treating cardiologist’s opinion that Beck was disabled was wholly inconsistent with treatment records noting that she was "doing quite well" or "looked well." The court stated that descriptive phrases like "doing quite well" should be viewed in the context of a claimant’s illness, and do not automatically compel a conclusion that a claimant is capable of full-time employment. A review of the record in this case revealed that when taken in context, the observation that Beck was "doing quite well" was not indicative of functional rebirth, but rather referred to the progress of her recovery relative to her dire medical condition when she first entered the hospital. Thus, Beck’s treating cardiologist’s functional assessment was not inconsistent with his treatment notes. The administrative law judge’s decision to give little weigh to the opinion of Beck’s treating cardiologist was neither reasonable nor supported by the evidence. 25 pages. Judge Joseph N. Laplante.
Jonathan and Carol Shafmaster v. USA
Case No. 09-cv-238-PB, Opinion No. 2011 DNH 149
Jonathan and Carol Shafmaster sought a refund of interest payments and a failure to pay penalty they incurred following an audit of two tax years. They alleged that the interest payments were due to unreasonable IRS delay in completing the audit, and that the failure to pay penalty was improper both because the IRS failed to issue proper notice and demand and because the IRS had agreed not to impose that penalty. The court granted the government’s motion to dismiss the interest claim based on a lack of subject matter jurisdiction. The court denied the government’s summary judgment motion on the notice and demand issue, finding that an IRS document created a genuine factual dispute about whether notice and demand were sent to the right address. The court granted summary judgment on all other issues relating to the failure to pay penalty, finding that there was no enforceable agreement between the Shafmasters and the IRS and that the Shafmasters could not have reasonably relied on any IRS misrepresentations. 14 pages. Judge Paul Barbadoro.
USA v. William E. Boutwell
Case No. 07-cv-401-PB, Opinion No. 2011 DNH 144
The United States sought to recover interest on taxes owed by taxpayer that accrued after he filed for Chapter 12 bankruptcy. The court granted the government’s motion for summary judgment because post-petition interest on a non-dischargeable debt is not dischargeable in a Chapter 12 bankruptcy proceeding. 3 pages. Judge Paul Barbadoro.