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Bar News - July 13, 2012

NH Supreme Court At-a-Glance - June 2012


Arbitration/Tax Law

Lebanon Hangar Associates, LTD. V. City of Lebanon, No. 2011-318
April 5, 2012
Reversed and Remanded
  • Whether an arbitrator exceeded the scope of his authority by reforming a lease based upon mutual mistake?
The plaintiff, Lebanon Hangar Associates, Ltd. ("LHA") leased property at the Lebanon Airport from the defendant, the City of Lebanon ("City"). The terms of the lease required LHA to pay lawfully levied or assessed taxes. From 1991 to 2006, the City limited its assessment of taxes to the value of the buildings only and did not tax LHA on the value of the land. In 2006, the City assessed a tax on the land value, which increased the total valuation subject to taxation from $77,400 in 2005 to $360,400 in 2006. After the City denied LHA’s request for abatement, LHA petitioned the superior court pursuant to RSA 76:17 to rule that the leasehold was not taxable and amended its petition to include a claim that the City breached the lease by demanding payment of the taxes. The parties agreed to arbitrate after the City invoked an arbitration clause in the lease.

The arbitrator issued two decisions. The first concluded that while the written lease unambiguously allowed the City to asses a tax upon the value of LHA’s leased land, other evidence submitted by LHA could be a basis for reformation based upon mutual mistake. The arbitrator’s second and final decision held that LHA was not and had not been obligated to pay real estate taxes to the City under the lease. The arbitrator specifically found that LHA was not taxed on the land value until 2006 and rejected the City’s evidence to the contrary. The City moved to vacate the decision in superior court and LHA moved to confirm it. The superior court vacated the arbitrator’s decision except for the finding that the written lease terms required payment of taxes on the land.

On appeal, LHA argued that the arbitrator was correct in resolving the issue of whether the land was taxable under the lease. The City argued that the arbitrator exceeded the scope of his authority by reforming the lease based upon mutual mistake and that the issue submitted was limited to whether the written lease terms required LHA to pay taxes on the land value. The City further argued that once the arbitrator decided that the written lease terms required LHA to pay taxes on the land value that the arbitrator no longer had the authority to adjudicate any further issues.

The Court reviewed the trial court’s decision de novo because the conclusion as to the scope of the arbitrator’s authority is a contract interpretation question. The Court agreed with LHA that the arbitrator did not exceed the scope of his authority. The Court reviewed the stipulation submitted to the court indicating that the parties were agreeing to arbitrate as well as the lease to resolve the question to be decided by the arbitrator. The Court observed that aside from the lease and the stipulation, there was no submission agreement that narrowed the issues any further. Therefore, the Court looked to other evidence regarding the scope of issues submitted to the arbitrator.

The City argued that the arbitrator’s authority was limited to reviewing the four corners of the lease document. The Court disagreed stating that the arbitrator’s decision to consider whether the lease should be reformed because of a mutual mistake was not separate from, but rather an integral part of, his interpretation of the meaning of the lease. The Court reaffirmed that the primary purpose of arbitration is to resolve disputes expeditiously and that an arbitrator’s decision is reviewable only in a narrow set of circumstances with any doubts held by a reviewing court concerning what the parties intended to arbitrate to be resolved in favor of arbitration.

Barry C. Schuster and Eric Derry (on the brief), Schuster, Buttrey and Wing, Lebanon, for the plaintiff. Adele Fulton, Gardner Fulton & Waugh, Lebanon, for the defendant.

Constitutional Law

City of Manchester & a. v. Secretary of State, No. 2012-338
June 19, 2012
Remanded and Request for Declaration Denied
  • Whether the law redistricting the New Hampshire House of Representatives violated Part II, Article 11 of the New Hampshire Constitution?
Certain individuals, municipalities and towns sought a declaration that Laws 2012, Chapter 9 ("the Plan") violated Part II, Article 11 of the New Hampshire Constitution because it "(1) fails to provide approximately sixty-two towns, wards, and places with their own representatives; (2) divides certain cities, towns, and wards; (3) devises multi-member districts comprised of towns, wards, and places that are not contiguous" and because it does not take into account "community of interest" factors. These cases came before the Court on an interlocutory transfer without ruling. The Plan redistricting the House based upon the 2010 census was passed by the House on January 18, 2012 and the Senate on March 7, 2012. The Governor vetoed the Plan and the legislature overrode his veto.

When reviewing the constitutionality of the Plan, the Court started with the presumption that the Plan is constitutional and it will not be invalidated unless a clear and substantial conflict exists between the Plan and the constitution, with all doubt regarding the Plan’s constitutionality resolved in favor of constitutionality. Because of the presumption of constitutionality, the petitioners challenging the Plan had the burden of proof. The petitioners’ burden was to demonstrate that the legislature acted without a rational basis in enacting the Plan.

The Court discussed the principles governing redistricting legislation in detail. The overriding principle is the one person, one vote standard. The Court stated that this standard is founded in the requirements of Part II, Article 9 of the New Hampshire Constitution requiring that the House be "founded on principles of equality" and that the representation "be as equal as circumstances will admit." The Court discussed that the established method to determine whether a redistricting plan "affords citizens an equal right to vote is to calculate the extent to which it deviates from the ideal district population." The ideal population is calculated and once this is done, a determination is made as to how much a given district population deviates from the ideal. The parties agreed that the overall range of deviation for the Plan is 9.9%. The petitioners did not argue that the Plan’s 9.9% range of deviation violated the overriding principle of one person/one vote founded in Part II, Article 9 of the New Hampshire Constitution or the Federal Equal Protection clause. Rather, the petitioner’s argued that the Plan violated Part II, Article 11 of the New Hampshire Constitution in that it was too stringent in its adherence to this principle instead of affording more towns, wards and places their own representatives. The petitioners argued that the legislature could have complied more fully with Part II, Article 11 and the Federal Constitution by adopting a plan with a higher range of deviation that afforded the towns, wards and places their own representatives.

The Court found that the petitioners did not show that the legislature lacked a rational or legitimate basis for adhering to the 10% rule. The Court further explained that Part II, Article 11 cannot be considered in isolation and that a redistricting plan is also subject to other constitutional criteria. The Court further found that certain petitioners did not have standing to raise the claim that the Plan broke up certain towns, cities and wards and devised districts which are not contiguous in violation of Part II, Article 11 because the petitioners who raised the claim did not reside in the affected areas. The "Manchester petitioners" argued that the Plan was unconstitutional because it did not reflect "community of interest" factors. A community of interest was explained to be "a group of people concentrated in a geographic area who share similar interests and priorities-whether social, cultural, ethnic, economic, religious or political." The Court held that the New Hampshire Constitution does not require the Plan to consider "communities of interest" under Part II, Articles 9, 11 and 11-a. Ultimately, the Court held that because the petitioners did not meet their burden of proving that the Plan violated the New Hampshire Constitution, they were not entitled to a declaration that the Plan was unconstitutional.

Thomas J. Donovan, McLane, Graf, Raulerson and Middleton, Manchester, for the petitioners, City of Manchester and certain individual petitioners. Martin Honigberg and Jay Surdukowski (on the brief), Sulloway and Hollis, Concord, for certain individual petitioners. James Kennedy and Danielle L. Pacik (on the brief), City Solicitor’s Office, Concord, for the petitioner, City of Concord. Jason Dennis and Tony Soltani (on the brief), The MuniLaw Group, Epsom, for certain individual petitioners. Peter V. Millham and Matthew D. Huot (on the brief), Wescott, Dyer, Fitzgerald & Nichols, Laconia, for the petitioners, Town of Gilford and certain individual petitioners. Michael Delaney, attorney general (Anne M. Edwards, associate attorney general, and Stephen G. LaBonte, assistant attorney general, on the brief), for the attorney general. David Vicinanzo and Anthony J. Galdieri (on the brief), Nixon Peabody, Manchester, for the intervenor, the New Hampshire House of Representatives, through its Speaker. Christopher C. Buck (on the brief), J. Miller & Associates, Concord, Allan B. Krans, Sr. (on the brief), Dover, and Philip T. McLaughlin (on the brief), Laconia, for the City of Dover and Town of Meredith as amici curiae.

Employment Law

Susan Jeffery v. City of Nashua, No. 2011-516
June 12, 2012
  • Whether the trial court erred in holding that the plaintiff’s claims for constructive discharge and breach of contract were time-barred under the theory that the statute of limitations ran from the date of the plaintiff’s resignation letter versus the effective date of her resignation?
The plaintiff worked in the payroll department for the City of Nashua ("City") beginning in 1977 and became the risk manager for the City in 1998. In 2004, the plaintiff spoke with her direct supervisor explaining concerns that her supervisor did not understand the budget process because she wanted to level fund the health line items in the 2005 fiscal year budget. The supervisor told the plaintiff that she was comfortable with her numbers. In April 2005, the City found that the health insurance line item was underfunded and convened an ad hoc health care budget committee to investigate the circumstances. The committee’s final report made recommendations to be implemented. Some recommendations were to be implemented by the plaintiff as risk manager. The plaintiff did not implement all of the committee’s recommendations.

The plaintiff’s relationship with her supervisor deteriorated and she received two written warnings from her in 2006. Some of the plaintiff’s responsibilities were shifted to another newly created position and the plaintiff’s supervisor noted that that the plaintiff required improvement in several areas on her 2006 performance evaluation and denied the plaintiff a raise. The plaintiff was placed on a one week unpaid disciplinary suspension and demoted after the defendant learned that checks with significant value were left unsecured in the plaintiff’s department in violation of City policy. Thereafter, she took a leave of absence under the Family and Medical Leave Act. On December 21, 2006, while still on leave, she submitted her letter of resignation stating that she was retiring early and that the effective date of her resignation was December 31, 2006. The plaintiff brought constructive discharge and breach of contract claims against the City on December 29, 2009. The trial court granted the City’s motion for summary judgment on the basis that the claims were time barred by the 3 year statute of limitations.

On appeal, the plaintiff argued that the court erred by calculating the statute of limitations period on her constructive discharge from the date of her letter of resignation, December 21, 2006, rather than the effective date of her resignation, December 31, 2006. The issue of when a claim for constructive discharge accrues was an issue of first impression in New Hampshire. The Court relied on decisions in several other jurisdictions and adopted the reasoning that an action for constructive discharge accrues when the employee tenders the resignation or retirement notice. The Court affirmed the trial court’s decision that the plaintiff’s constructive discharge claim was barred by the statute of limitations because she filed suit after three years had run from the date of her resignation letter.

On appeal, the plaintiff also argued that the trial court erred in granting the City’s motion for summary judgment on her breach of contract claim. The Court declined to address whether the plaintiff’s employee handbook from the City created an enforceable employment contract. However, the Court assumed without deciding the issue, that there was an enforceable employment contract and again concluded that the breach of contract claim was barred by the statute of limitations. The plaintiff argued that the alleged breach occurred when she was constructively terminated from employment on January 1, 2007, but the Court held that the alleged breach, here the plaintiff’s constructive discharge, occurred when she submitted her December 21, 2006 letter of resignation and her breach of contract claim was thus time-barred by the statute of limitations.

John S. Krupski and Richard E. Molan (on the brief), Molan, Milner and Krupski, Concord, for the plaintiff. Elizabeth J. Baker and Debra Weiss Ford (on the brief), Jackson Lewis, LLP, Portsmouth, for the defendant.

Family Law/Constructive Trust

Edeltraud Elter-Nodvin v. Leah C. Nodvin & a., No. 2011-454
June 12, 2012
  • Whether the trial court erred in dismissing a mother’s claims for the imposition of a constructive trust on her deceased spouse’s insurance and retirement account proceeds that would otherwise pass to her daughters?
The petitioner and her spouse were married in 1986 and had two daughters during their marriage. In 2009, the petitioner’s spouse filed for divorce and the family division thereafter issued an anti-hypothecation order in October of 2009. The petitioner moved out of the country after the couple separated. The anti-hypothecation order restrained the parties from "selling, transferring, encumbering, hypothecating, concealing or in any other manner whatsoever disposing of any property, real or personal, belonging to either or both of them" during the pending proceedings. After the family division issued the anti-hypothecation order, the petitioner’s spouse removed the petitioner as beneficiary on some of his life insurance policies and retirement accounts and named the couple’s daughters as beneficiaries of these policies. The petitioner’s spouse died after making these changes.

The petitioner filed a petition against her daughters in superior court for the proceeds of these life insurance policies and retirement accounts. The petitioner sought the imposition of a constructive trust because of the circumstances of the spouse’s alterations to his beneficiaries. A motion to dismiss the petition was filed by the daughters, one of whom was a minor and under guardianship. The superior court granted the respondents’ motion to dismiss which had argued that the daughters were entitled to the proceeds of their father’s insurance policies and retirement accounts because his actions in changing beneficiaries did not violate the court’s anti-hypothecation order.

On appeal, the petitioner argued that her spouse’s alleged violation of the anti-hypothecation order justified the imposition of a constructive trust. The Court concluded that her spouse did not violate the anti-hypothecation order because the petitioner’s status as a beneficiary was not property, real or personal, belonging to her. The Court concluded that there was no property interest at stake because the petitioner did not allege that anything prohibited her spouse from changing the beneficiaries of the policies and accounts at issue and because the petitioner conceded that she had no vested interest in remaining as the beneficiary. The petitioner also argued that the Court should focus on the alleged purpose of the anti-hypothecation order, to preserve the status quo so that the trial court could equitably divide the couple’s assets during the divorce proceeding pursuant to RSA 458:16-a, I, II. The petitioner further argued that her spouse violated the order because by changing his beneficiaries he interfered with the trial court’s ability to make such a distribution in future divorce proceedings. The Court rejected the petitioner’s argument because her spouse’s change of beneficiaries did not affect the trial court’s ability to order him to name a certain beneficiary in the divorce. The Court found that the reason the trial court lost its ability to make such an order in the divorce was due to the spouse’s death, not the fact that he changed the beneficiaries. The Court declined to accept the petitioner’s interpretation of the anti-hypothecation order and therefore, found that her spouse did not violate the anti-hypothecation order and therefore, this was not a basis for imposing a constructive trust on the proceeds from these accounts.

The petitioner further argued that equity required the imposition of a constructive trust on the insurance proceeds. A constructive trust may be imposed when clear and convincing evidence shows that a confidential relationship existed between two people, that one of them transferred property to the other, and that the person receiving the property would be unjustly enriched by retaining the property, regardless of whether the person obtained the property honestly. The Court held that the trial court properly dismissed the claim for constructive trust because the petitioner failed to prove the requisite confidential relationship at the time of the beneficiary change. The Court reiterated that in order for a confidential relationship to exist there must be a justifiable belief that a person will act in another’s best interest. The Court found that the petitioner could not establish a confidential relationship because it was unreasonable for the petitioner to believe that after her spouse had filed a divorce petition, that he would continue to act in her best interest by following through with the couple’s previously established estate plan. Further, the Court held that if the petitioner wished to remain beneficiary of the insurance policies she should have asked the court to order her spouse not to alter them pursuant to RSA 458:16 and in the absence of such an order or some other legal or equitable obligation to maintain the policies for the petitioner, her spouse could name his daughters as beneficiaries.

William B. Pribis, Cleveland, Waters and Bass, Concord, for the petitioner. Andrew J. Piela, Hamblett and Kerrigan, Nashua, for the respondents.

Administrative Law-Zoning/Planning

Nicholas Bosonetto v. Town of Richmond, No. 2011-183
June 29, 2012
Affirmed in Part and Vacated in Part.
  • Whether the trial court erred in granting summary judgment in favor of the Town of Richmond and in dismissing the petitioner’s appeal of the decision from the Town of Richmond’s Zoning Board of Adjustment.
The petitioner owned real property containing three mobile homes which were located on the property pursuant to 1980 building permits. The petitioner filed a building permit application with the Town of Richmond Board of Selectman (“BOS”) requesting to replace a mobile home with a new three-bedroom residence at a different location on the property. The Board denied the application because the property was on a private road and the Town did not have provisions for building permits on private roads. The petitioner appealed the decision to the Zoning Board of Adjustment (“ZBA”). The ZBA held a public hearing, visited the site and deliberated on the matter. Upon an oral motion, the ZBA denied the application based on the criteria of RSA 674:41. Thereafter, the ZBA convened to review a draft of a “Notice of Decision” which provided reasons for the ZBA’s decision and the ZBA voted to approve the draft notice of decision without any additional deliberation and without a new vote on the application or any subsidiary matter. The notice was placed on file for public inspection the day after the meeting on August 18, 2009. On August 24, 2009, a Town clerk provided the petitioner with instructions on how to appeal the decision, including that the motion must be made within 30 days after the decision is filed and first becomes available for public inspections. On September 14, 2009, more than thirty days after the oral denial of the application but less than thirty days after the written notice of decision was approved by the ZBA, the petitioner filed a motion for rehearing with the ZBA. The ZBA denied the rehearing request because it was not filed within 30 days as specified in RSA 677:2.

The petitioner appealed the ZBA decision to the Superior Court, appealing the ZBA’s decision, requesting a declaratory judgment against the BOS and the ZBA, a writ of mandamus against the BOS and a writ of certiorari. The Superior Court denied all of the petitioner’s requested relief and the petitioner appealed.

On appeal, the petitioner argued that the trial court erred in dismissing his statutory appeal because his motion for rehearing was timely where the thirty day time period did not run until the day the ZBA voted to approve its written notice of decision. The petitioner pointed to the amendment provision of the statute to argue that the time period did not run until 30 days after the day on which the written decision was actually filed. The Court agreed with the trial court that the statute’s amendment provision merely permits a party in certain instances to amend a timely filed motion for rehearing and does not govern when a motion must first be filed. Therefore, the Court agreed with the trial court that the petitioner’s motion for rehearing was untimely.

The petitioner also argued that the town was equitably estopped from raising the timeliness issue because the instructions provided to the petitioner by the ZBA incorrectly stated that the motion for rehearing must be made within 30 days after the decision is filed and first becomes available for public inspection, which is contrary to the statutory requirements. The Court upheld the trial court’s ruling that the petitioner could not satisfy the requirements for equitable estoppel because the evidence did not support a finding that the Town made the incorrect statement to induce reliance by the Petitioner. Moreover, there was no evidence that the instructions were created for the petitioner specifically, the instructions warned the reader against relying solely on them and strongly recommended becoming familiar with the relevant statutes.

The Court discussed three other factors that weighed against the petitioner’s argument for equitable estoppel: that a party may not assert equitable estoppel to avoid the application of a statute, that the law does not favor application of equitable estoppel against municipalities and that although the Court has not yet addressed the issue, other courts have held that equitable estoppel applies only to misstatements of fact and not misstatements of law. Therefore, the Court agreed that the Town was not equitably estopped from raising the timeliness issue and affirmed the trial court’s ruling dismissing the petitioner’s appeal for failure to file a timely motion for rehearing with the ZBA.

The Court also affirmed the trial court’s ruling on the petitioner’s declaratory judgment actions because he failed to exhaust his administrative remedies before the ZBA due to his failure to file a timely motion for rehearing. The Court also discussed that the general rule in favor of exhausting administrative remedies has an exception if the zoning issue is suited to judicial rather than administrative treatment and no other adequate remedy is available. The Court found that the petitioner’s argument did not fall within an exception such as the constitutionality or validity of a zoning ordinance or the authority of an agency to act. The Court vacated the trial court’s ruling upholding the constitutionality of RSA 674:41. The Court declined to address the issue in a declaratory judgment action because the constitutional challenge was based on hypothetical facts not supported in the record and because a declaratory judgment cannot be based upon a hypothetical set of facts, a declaratory judgment action was not proper.

The Court upheld the trial court’s ruling denying the petitioner’s writ of mandamus because he had not exhausted his administrative remedies in a timely fashion and thus, the writ of mandamus was not an available remedy for him. Finally, the Court upheld the trial court’s denial of the petitioner’s request for attorney’s fees. The Court agreed that the trial court sustainably exercised its discretion in denying attorney’s fees because the bad faith claim was speculative and unsupported and the trial court found no public benefit where the claims were inadequately developed and were necessitated only by the fact that the petitioner failed to timely pursue his administrative remedies.

Kelly E. Dowd, Bragdon, Dowd & Kossayda, Keene, for the petitioner. David M. Tower, Tower & Crocker, Jaffrey, for the respondent.

Property Portfolio Group, LLC v. Town of Derry;
Dom Vincent, LLC v. Town of Derry, No. 2011-496
June 29, 2012
  • Whether the trial court erred in upholding a planning board decision to grant a waiver from a provision of the town’s site plan regulations.
MTM Realty, LLC (“MTM”) submitted a request for waiver from town’s site plan regulation that required that solid waste storage areas must be at least twenty-five feet from any property boundary. MTM requested permission to move its dumpsters closer to its boundary with Property Portfolio Group, LLC (“PPG”). PPG objected alleging that the dumpsters were already unlawfully located, that they negatively affected its ability to rent apartments, that moving the dumpsters closer would further affects its tenants and encroach on the buffer and that MTM had not established hardship as required by the town’s site plan regulations. The planning board closed the public hearing portion of its meeting and discussed the waiver request with additional questions for MTM’s representatives. The board also discussed the feasibility of other locales for the dumpsters, again asking questions of MTM. The board then voted to waive the solid waste storage setback requirement with the condition that a chain link fence enclose the area.

PPG and another abutter appealed the board’s decision to the Superior Court. PPG argued that the board acted unlawfully by granting the waiver without making specific findings on the record, which they argued was required by RSA 674:44, III(e). The Superior Court disagreed stating that while the board did not specifically state the basis for its grant of the waiver in the minutes, the minutes did show that the board gave a detailed review of the circumstances and therefore, found that the minutes reflected the board’s basis for its decision so as to meet the requirements of RSA 674:44, III(e).

PPG appealed, arguing that the board failed to make findings as required under RSA 674:44, III(e), that the trial court erred by treating RSA 674:44, III(e) as imposing ministerial or technical requirements that may be met by implication and that the evidence did not support a waiver. The Court disagreed stating that while RSA 674:44, III(e) required the basis of the board’s decision to be recorded in the minutes, there was nothing in the statute that required the board to make specific findings of fact. The Court pointed to other statutes where, if the legislature intended that specific findings be made, it has stated so expressly. The Court declined to read in such a requirement to RSA 674:44, III(e) when the legislature failed to include it.

The Court also looked to the definition of the word “basis” to construe RSA 674:44, III(e) to require only that the underlying rationale of the board’s decision granting a waiver be adequately reflected in its minutes. The Court agreed with the trial court that the board’s minutes were adequate in reflecting the basis for its decision because they demonstrated the board’s concerns that complying with the setback would violate fire code requirements, would pose safety risks, would interfere with MTM’s use of a loading zone and their concern for whether the dumpsters would be adequately screened. The Court further held that based upon the record, it could not find that the trial court’s decision was unsupported by the evidence or legally erroneous.

John P. Griffith, Griffith & Associates, Wilton, for the petitioner Property Portfolio Group. Edmund J. Boutin and Lynne Guimond Sabean (on the brief), Boutin & Altieri, Londonderry, for the respondent.

Constitutional Law

In Re C.M. & a., No. 2011-647
June 29, 2012
  • Whether the Due Process Clause of the New Hampshire Constitution (Part I, Articles 2 and 15) or the Fourteenth Amendment of the United States Constitution require counsel to be appointed for indigent parents when the State seeks to take custody of a minor child based on allegations of neglect or abuse.
The Newport Family Division made findings of neglect against the petitioners, Larry M. and Sonia M., the parents of two minor children. The parents both appealed to the Superior Court and a de novo hearing was scheduled for August 2011. Effective July 1, 2011, the legislature abolished an indigent parent’s statutory right to appointed counsel in a proceeding under RSA 169-C. After the amendment to RSA 169-C:10, II(a), each parent filed a motion to continue court-appointed counsel, alleging that such appointment is mandated under Part I, Articles 2 and 15 of the New Hampshire Constitution and the Fourteenth Amendment to the Federal Constitution. The case was transferred to the New Hampshire Supreme Court on an interlocutory transfer without ruling from the Superior Court.

A plurality of the Court addressed this issue of first impression under the three-prong test of Matthews v. Eldridge, 424 U.S. 319 (1976). To determine whether the New Hampshire Constitution requires the appointment of counsel in these proceedings, the Court balanced the following Matthews factors: “(1) the private interest affected by the official action; (2) the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and (3) the government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirements would entail.” Id. At 335.

Counsel for the parents argued that under In re Shelby R., 148 N.H. 237 (2002), Part I, Article 2 of the New Hampshire Constitution requires court-appointed counsel for indigent parents when the State requests custody of their children under RSA 169-C. The Court declined to apply Shelby R., which it explained was a plurality decision having no precedential value. Therefore, the Court analyzed the transferred question as an issue of first impression under the Matthews factors.

It was not disputed that the private interest affected is the parent-child relationship, a fundamental liberty interest. In reviewing the second Matthews factor, the Court emphasized that a proceeding under RSA 169-C is not the same as a termination of parental rights matter under RSA 170-C. The Court determined that the procedures set forth in RSA 169-C are sufficient to prevent the risk or erroneous deprivation of a parent’s fundamental liberty interest in the care and custody of his children. The Court discussed the procedures under RSA 169-C as being sufficient, namely, the right to a full hearing at which a parent may call witnesses, present evidence, and cross-examine adverse witnesses. The Court also discussed the statutory requirement that the trial court determine that each parent understands the consequences to parental rights via the court’s form entitled “Acknowledgment of Possible Consequences to Parental Rights in Abuse and Neglect Cases.” The Court also reiterated that the relaxed evidentiary standard in RSA 169-C proceedings reduced the risk of erroneous deprivation.

Under the third Matthews factor, the Court found that while the State’s financial concern regarding the expenditure on court appointed counsel may be legitimate, it was not significant enough to overcome the important private interests at stake. Although the Court discussed that the fundamental nature of the parents’ interest favors the appointment of counsel, it found that the statutory procedures in place prevent the risk that an unrepresented parent will be erroneously deprived of the care and custody of his child. The Court also discussed that where the State has an interest in protecting the best interest of children and providing reasonable services to assist with the statutory goal to reunite children and family, due process does not require that indigent parents have a per se right to appointed counsel in RSA 169-C proceedings. However, the Court went on to state that the trial court should make a case by case determination of whether appointed counsel is necessary to adequately reduce the risk of erroneous deprivation in certain cases, including those with complex legal issues. The Court reached the same result under the United States Constitution because it offers no greater protection than the New Hampshire Constitution.

The specially concurring opinion disagreed with the dissenting opinion stating that except in the individual case where fundamental fairness requires appointed counsel, the entitlement is a legislative matter and the right should not extend beyond the criminal law context because of the difficulty conceiving of appropriate limiting principles.

The dissenting opinion discussed that after recognizing the statutory right to counsel for indigent parents in abuse and neglect proceedings for thirty years, New Hampshire has apparently become the only state in the country to abolish that right. The dissent stated that the due process protections of the state constitution require the appointment of counsel for indigent parents in state-initiated proceedings under RSA 169-C. The dissent detailed the statutory scheme as a whole, including the various types of hearings that occur in a RSA 169-C matter, and stated that the initial RSA 169-C petition begins a series of hearings that can result in the immediate loss of custody of a child for up to one year or longer and that may ultimately result in termination of parental rights. That is, court orders arising out of a RSA 169-C petition are often the stepping stone for a petition to terminate parental rights. The dissent also discussed that that the state’s interests, considering the function involved and the fiscal and administrative burdens that additional or substitute procedural requirements would entail, do not outweigh the risk of an erroneous deprivation of the fundamental liberty interest at issue. The dissent further noted that after a 30 year entitlement, the only party not afforded counsel now in RSA 169-C proceedings is the indigent parent. The dissent further stated that the case-by-case approach to appointing counsel adopted by the plurality is not sufficient to protect the fundamental liberty interests at issue and puts an increased burden on the trial court.

Michael Shklar, Elliott, Jasper, Auten, Shklar & Wellman-Ally, Newport and Elliott Berry, New Hampshire Legal Assistance, Manchester, for Larry M. and Sonia M. Michael A. Delaney, Attorney General (Jeanne P. Herrick, Attorney on the brief and orally) for the New Hampshire Division of Children, Youth and Families. Doreen Connor (on the brief), Wiggin and Nourie, Manchester, Heather B. Repicky (on the brief), Nutter, McClennen & Fish, Boston, and William T. Robinson III (on the brief), American Bar Association, Chicago for the American Bar Association as amicus curiae. Vivek S. Sankaran (by brief), Ann Arbor, and Tracy A. Bernson (by brief), Dover, for the National Association of Counsel for Children as amicus curiae. Kysa Crusco (on the brief), Crusco Law Office, Bedford, John Pollock (on the brief), Public Justice Center, Baltimore, for the National Coalition for a Civil Right to Counsel as amicus curiae. Laura J. Brevitz (on the brief), Law Offices of Laura J. Brevitz, Raymond as amicus curiae.

Criminal Law

The State of New Hampshire v. Anthony Dilboy, No. 2011-565
June 29, 2012
  • Whether it is a violation of the Federal Confrontation Clause to allow a forensic expert to testify regarding opinions about test results if the expert is conveying the statements of other non-witnesses contained within these documents.
The defendant was convicted of two counts of manslaughter and two alternative counts of negligent homicide after he drove through a red light in Dover, New Hampshire, colliding with a second vehicle whose driver and passenger died from injuries sustained in the accident. Paramedics and a local hospital took blood and urine samples from the defendant following the accident. The State Police forensics toxicology laboratory tested the samples. The defendant filed a Motion in Limine objecting to the State offering testimony regarding transmittal slips, reports of the lab examinations sent from the Department of Safety to the Dover Police and blood test results. The defendant argued that without live testimony, the documents should be inadmissible under the Confrontation Clause because they were testimonial in nature. The State objected arguing that that the documents were relied upon by its expert, Michael Wagner, Ph.D., the assistant laboratory director at the State forensic laboratory. At the hearing on the Motion in Limine and the State’s objection, the defendant argued that all of the documents were testimonial, but he did not argue that Dr. Wagner’s testimony would violate the Confrontation Clause.

The trial court ruled that while the documents themselves were not testimonial, the interpretation of them would be testimonial. The trial court did not address whether Dr. Wagner’s testimony violated the Confrontation Clause. At trial, Dr. Wagner testified about his job duties, laboratory procedures and the results of some of the laboratory tests performed on the samples from the defendant. It was not clear from the record who performed the tests on the samples. Dr. Wagner testified that he reviewed his original data file during his testimony. Dr. Wagner did not testify about the contents of his file and his file was not admitted into evidence. Dr. Wagner testified about symptoms other witnesses attributed to the defendant and tests run on the samples. He also testified that certain substances were present in the blood samples. The transmittal slips were admitted into evidence, but the laboratory report letters with the test results to the police were not.
The defendant appealed his conviction arguing six errors including that the trial court erred in admitting evidence of laboratory test results in violation of the Confrontation Clause of the United States Constitution. The New Hampshire Supreme Court in Dilboy I found no error and affirmed the convictions. The defendant filed a petition for a writ of certiorari with the United States Supreme Court on the Federal Confrontation Clause issue. The United States Supreme Court granted the petition, vacated the New Hampshire Supreme Court’s decision in Dilboy I, and remanded for further consideration in light of the recently decided Bullcoming v. New Mexico, 131 S. Ct. 2705 (2011). The Bullcoming Court held that a report of a forensic scientist not present at trial was not admissible through a different scientist’s testimony. More specifically, the United States Supreme Court held that a “document created solely for an evidentiary purpose…made in aid of a police investigation, ranks as testimonial.” Id. At 2717.

On remand from the United States Supreme Court, the New Hampshire Supreme Court ruled that where there weren’t any forensic reports created by non-testifying analysts admitted against the defendant at trial, then there was no violation of the Confrontation Clause. Because the Court did not have the test results to review and without specific findings of what they were, the Court assumed the trial court made all findings necessary to support its ruling and those findings were supported by sufficient evidence. Additionally, without Dr. Wagner’s file, the Court was without an understanding of whether his testimony was based upon his own understanding of the tests or whether he was using the testimonial statements of others. The admission of Dr. Wagner’s statements would violate the Confrontation Clause only if he recited the statement of a non-testifying witness rather than his own opinions or conclusions based upon his review of the raw data. However, if his testimony about the test results was based upon his own review of the raw data, his statements may not have been a violation of the Confrontation Clause under Bullcoming. The New Hampshire Supreme Court therefore affirmed its Dilboy I decision.

Michael Delaney, Attorney General (Nicholas Cort, Assistant Attorney General on the brief and orally) for the State. Stephanie Hausman, Assistant Appellate Defender, Concord, for the defendant.

Family Law

In the Matter of Carolyn P. Cottrell, DDS and Mostafa El-Sherif, DMD, No. 2011-210
June 29, 2012
  • Whether the trial court erred in accepting an expert valuation of a dental practice where the valuation considered professional goodwill.
The parties, husband and wife, were married twenty-three years. At the time of the divorce, the wife worked as a clinical associate professor of dentistry at Tufts University, having previously practiced as a dentist. The husband was also a dentist with a successful dental practice in Concord. One of the assets to be valued in the divorce proceedings was the husband’s dental practice. The trial court adopted the fair market value of the practice provided by the wife’s expert. The wife’s expert opined that the present value of the business was $1,274,000, which was estimated from the ability to generate future earnings, also known as the capitalization of earnings approach. The husband’s expert opined that the value of the practice was $156,000 based only on the net tangible asset value of the business, including the value of equipment and furniture used in the dental practice. The husband’s expert did not value the business based on its transferable value because the husband did not intend to sell the practice.

The trial court adopted the wife’s expert’s valuation noting that the husband’s estimate was well under the $410,000 the respondent paid for the practice in 1996 and the practice had generated substantial income after that purchase. The trial court also noted that the wife’s expert disregarded the husband’s highest earning years (thereby lowering the estimate) and accounted for the substantial goodwill of the business, which the husband’s expert had not done.

The husband appealed arguing that the trial court erred by including professional goodwill in the value of the practice when the goodwill would not be transferable upon sale because it was attached to his own education and reputation. The husband argued that the professional goodwill should have been subtracted out of the estimated value of the practice and that, the case should be remanded for an adjustment in light of that error.

The Court found that the trial court did not commit an unsustainable exercise of discretion. The Court noted that the fair market value is what a willing buyer would pay a willing seller. Thus, the Court held that the trial court did not err in adopting the wife’s expert’s estimate for the practice because neither expert assigned a value to the professional goodwill and therefore there was no value for the Court to consider on the husband’s reputation. Therefore, the Court did not commit an unsustainable exercise of discretion. The Court further found that it was not error to adopt the wife’s expert’s estimate when it included a hypothetical covenant not to compete in determining its fair market value because both experts agreed that non-compete agreements are routinely included in the sale of professional practices.

Kevin P. Rauseo and Andrew J. Piela (on the brief), Hamblett & Kerrigan, Keene, for the petitioner. Ronna F. Wise and Patrick J. Sheehan (on the brief), Sulloway and Hollis, Concord, for the respondent.

Products Liability

Phaneuf Funeral Home v. Little Giant Pump Company & a., No. 2011-151
June 29, 2012
Affirmed in Part and Reversed in Part.
  • Whether RSA 508:4-b affords protections to product manufacturers based upon an alleged defect in a product that later becomes part of an improvement to real property.
The plaintiff, Phaneuf Funeral Home, hired the defendant Boyer Interior Design (“Boyer”) to do interior design and light renovation work in the basement and adjacent hallway of its funeral home. Boyer bought a water fountain from the defendant Elegant Earth, a household goods retailer, and subsequently installed it on a wall in the funeral home. The defendant Leviton supplied the fountain’s power cord to the defendant Little Giant, the manufacturer of the fountain. Boyer designed a back plate to be attached to the wall, attached the fountain to the back plate and painted to blend the fountain and the back plate with the wall per the plaintiff’s request and preference. Boyer installed the fountain in 1999. In 2007, a fire occurred at the funeral home. The plaintiff brought negligence and strict product liability claims against the defendants alleging that the water fountain’s defective pump and power cord caused the fire. The plaintiff withdrew its negligence claim against Boyer. The trial court granted the defendants’ motions for summary judgment which argued that the plaintiff’s claims were time barred by 508:4-b, I , the statute of repose for “Damages from Construction.”

In its appeal, the plaintiff agreed that its action was beyond the 8 year statute of repose contained within RSA 508:4-b, but alleged that the statute did not apply to product liability actions, that the fountain did not constitute an improvement to real property as required by the statute, and in the alternative, that the statute applies only to those who provide products and services that are particularized to or specifically designed for the improvement for which they are used or incorporated, which would exclude product manufacturers and retail sellers.<

The Court rejected the Plaintiff’s argument that because the words product, products or product liability are not used in the statute that it is applicable to negligence claims for design or construction of an improvement and not to product liability claims. The Court disagreed finding the statutory language unambiguous and applicable to all claims that arise from a deficiency in the creation of an improvement to real property. The Court also did not agree with the Plaintiff’s proposition that applying the stuatute to product liability claims would extinguish them because the statute does not create a statute of repose for all product liability claims.

The Plaintiff also argued that there was a genuine question of material fact regarding whether the wall fountain was an improvement to real property. The Court concluded that an improvement means an alteration or development of real property that either enhances or is intended to enhance its value or improve or is intended to improve its use for a particular purpose. The Court held that the trial court was correct in granting summary judgment on the basis that while the fountain may not have been an improvement when first purchased and hung, it became one when Boyer integrated it into the building’s structure.

The Plaintiff further argued that any protections of RSA 508:4-b are only applicable to entities who participate in the improvement of the real property. The Court addressed a matter of first impression, whether product manufacturers can claim the protection of the statute of repose based upon an alleged defect in a product that later becomes part of an improvement to real property. The Court found that the trial court erroneously granted summary judgment in favor of Elegant, Little Giant and Leviton because the actions against them did not arise out of a deficiency in the creation of an improvement. In fact, the record did not indicate that these defendants were in any way involved in improving the value or use of the real estate. That is, the water fountain was not manufactured or specifically designed to be or become an improvement and therefore, the 8 year statute of repose was not applicable to defendants, Elegant, Little Giant and Leviton. However, the action against Boyer did arise out of the creation of an improvement and thus, Boyer was entitled to the protections of RSA 508:4-b. The Court rejected the Plaintiff’s argument that its action arose out of Boyer’s role as a seller of a defective product rather than the builder of an improvement. Summary Judgment as to Boyer was affirmed and was reversed as to the remaining defendants.

John Sherman (on the brief), Sherman Law, Portsmouth, and Joseph Rich, Cozen O’Connor, Philadelphia, for the plaintiff. Nicholas J. Delault, Law Offices of John B. Schulte, Manchester, for the defendant Little Giant Pump Company. Christine Friedman, Mallory & Friedman, Concord for the defendant Boyer Interior Design.

Real Estate Law

Kilnwood on Kanasatka Condominium Unit Association, Inc. v. Perry Smith, No. 2011-323
June 29, 2012
  • Whether a Condominium Declaration may be reformed based upon mutual mistake to convert a condominium association to single family homes without a unanimous vote as required by the Declaration.
When a condominium association was unable to reach a unanimous vote, as required by the Condominium Declaration, to convert it from a condominium association to single-family homes, it petitioned the Court to reform the declaration. The association members who did not vote in favor of reformation filed a cross-petition to declare that the association remain a condominium association and also filed a motion to dismiss the reformation action. The trial court granted the motion to dismiss finding that the record did not support reformation based upon mutual mistake.

The Association appealed, arguing that the Declaration should be reformed because it was intended to be a subdivision of single-family residential lots and not a condominium. The Court stated that reformation is proper when, through fraud or mutual mistake of fact, the intentions of the parties to the agreement are not expressed in the document. Reformation is proper only when there is clear and convincing evidence that the agreement of the parties is not expressed in the document.

The Court found that the record did not support the association’s argument that it was not intended to be a condominium association. The Court pointed to the trial court’s observations that the enabling document was entitled “Declaration of Condominium,” was governed by the predecessor statute to the current Condominium Act, and had adopted a condominium plan and condominium bylaws.

Patrick H. Wood, Patrick Wood Law Office, Laconia, for the petitioner. Steven J. Dutton and Scott H. Harris (on the brief), McLane, Graf, Raulerson & Middleton, Manchester, for the respondents.

Sarah E. Lavoie

A 2004 graduate of Villanova University School of Law, Sarah Lavoie is an associate at Burns, Bryant, Cox, Rockefeller and Durkin in Dover. She practices general litigation, juvenile law, family law, personal injury.

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