Bar News - September 14, 2012
US District Court Decision Listing: August 2012
Arthur O. Phaneuf, et al. v. NH Board of Registration of Funeral Directors & Embalmers, et al.
Case No. 12-cv-160-SM, No Opinion No. (Done As Notice of Ruling)
New Hampshire funeral homes and their owner sued state Board of Registration of Funeral Directors and Embalmers, and others, seeking to enjoin ongoing state administrative disciplinary proceedings. The court dismissed the case, holding that abstention was required under Younger v. Harris, 401 U.S. 37 (1971), and that no exceptions to abstention were applicable. 2 pages. Judge Steven J. McAuliffe.
ROK Builders, LLC v. 2010-1 SFG Venture, LLC
Case No. 12-cv-57-PB, Opinion No. 2012 DNH 148
This bankruptcy appeal involved the competing claims of two creditors to the real property of Moultonborough Hotel Group, LLC ("Debtor"). SFG holds a secured claim against the Debtor as the assignee of a construction mortgage on the Debtor’s hotel. ROK, the contractor who built the hotel, also has a claim against the Debtor for unpaid work that is secured by a mechanic’s lien attachment. After the Debtor filed a petition for chapter 11 reorganization, SFG commenced this adversary proceeding against ROK, seeking a declaration that its mortgage is senior to ROK’s mechanic’s lien to the extent that mortgage loan proceeds were disbursed to ROK for materials and labor. ROK asserted eleven counterclaims against SFG. The bankruptcy court dismissed most of ROK’s counterclaims for failure to state a claim and subsequently entered summary judgment in SFG’s favor on the priority claim. ROK appealed both decisions. Reviewing the challenged rulings de novo, this court affirmed. On the priority claim, the court determined that RSA 447:12-a unambiguously resolved the dispute in SFG’s favor. On the equitable subordination claim, the court affirmed dismissal because when a creditor has notice of and an opportunity to challenge a trustee’s proposed settlement that purports to surrender all equitable subordination claims, as was the case here, the creditor must present its equitable claim in opposition to the settlement, rather than in a separate adversary proceeding. The court dismissed ROK’s avoidance claim because the cause of action belongs to the Debtor and the Debtor litigated it and lost. The court dismissed ROK’s breach of contract claim because ROK was not a third party beneficiary of the loan agreement, and the unjust enrichment claim because ROK failed to allege the unconscionability element. For the remaining contract and tort claims, ROK only alleged misconduct by SFG’s assignor and there was no basis for holding SFG liable. 25 pages. Judge Paul J. Barbadoro.
Ningbo Chenglu Paper v. Momenta, Inc.
Case No. 11-cv-479-SM, Opinion No. 2012 DNH 133
In bankruptcy proceedings, creditor filed motion for payment of administrative expenses for the value of goods it delivered by drop-shipment directly to the debtor’s customer in the 20 days preceding debtor’s filing of bankruptcy petition. The bankruptcy court held that the drop-shipped goods were not "received by the debtor" within the meaning of 11 U.S.C. Sec. 503(b)(9). In the creditor’s appeal, the district court affirmed the bankruptcy court’s decision, holding that "received by the debtor" means "possessed by the debtor, either actually or constructively," and that goods drop-shipped to the debtor’s customer were never possessed by the debtor actually or constructively. 17 pages. Judge Steven J. McAuliffe
Forrester Environmental Services, Inc. v. Wheelabrator Technologies, Inc.
Civil No. 10-cv-154-JL, Opinion No. 2012 DNH 139*
After concluding that the statute of limitations barred the bulk of plaintiffs’ claims, the court ordered plaintiffs to show cause why summary judgment should not be entered in favor of the defendant on their remaining claims. In response to the court’s order, plaintiffs submitted evidence that the defendant’s alleged misconduct caused a third party to enter into a contract with the defendant. But plaintiffs did not submit any admissible evidence that the third party would have done business with them instead of the defendant, and the court resultantly concluded that plaintiffs could not demonstrate that they suffered any injury as a result of the defendant’s alleged misconduct. Because injury was an essential element of plaintiffs’ claims for tortious interference with contractual relationship and prospective advantage, the court granted summary judgment to the defendant on those claims. The court also held that to recover under the New Hampshire Consumer Protection Act, N.H. Rev. Stat. Ann. § 358-A:1 et seq., a plaintiff must, at a minimum, establish either injury or privity with the defendant. Because plaintiffs had shown neither, the court granted summary judgment in favor of the defendant on plaintiffs’ Consumer Protection Act claim as well. 23 pages. Judge Joseph N. Laplante.
Robert Banks v. Mark Hall et al.
Civil No. 10-cv-269-JL
The defendants, state troopers who had arrested the plaintiff following a high-speed vehicle chase, moved for summary judgment on his claims that they had used excessive force against him in effecting the arrest, arguing that (1) they were entitled to qualified immunity and (2) while certain troopers admitted using force against Banks in the form of a police dog and Tasers, all of them denied kicking or otherwise beating him. Denying the motion, the court ruled that (1) if a rational trier of fact believed the plaintiff’s testimony that, immediately after stopping his vehicle, he exited with his hands in the air and then lie and remained face-down on the ground without resisting, then the troopers would not have acted reasonably in using the dog and the Tasers against him and, therefore, were not entitled to qualified immunity, and (2) even though the plaintiff could not identify the officers who kicked or beat him, there was evidence that he was in fact kicked and beaten, as well as that the arrest lasted 10 minutes, so all of the officers could be held liable for failing to stop those among them--whoever they were--from kicking and beating him. 5 pages. Judge Joseph N. Laplante.
COMMERCIAL LITIGATION; STATUTE OF LIMITATIONS
Forrester Environmental Services, Inc. v. Wheelabrator Technologies, Inc.
Civil No. 10-cv-154-JL, Opinion No. 2012 DNH 138
In this dispute between two competing companies over the defendant’s alleged misstatements to a mutual customer, the court conducted an evidentiary hearing on the limited issue of whether some or all of plaintiffs’ claims were barred by the three-year statute of limitations in N.H. Rev. Stat. Ann. § 508:4. Following the hearing, the court found that, with limited exceptions, plaintiffs "[d]iscovered, or in the exercise of reasonable diligence should have discovered" the alleged misconduct and its causal connection to their damages more than three years before the complaint was filed. Although plaintiffs argued that the full extent of their damages did not manifest itself until well within the limitations period, the court concluded that plaintiffs’ claims accrued when they first suffered some damage, and that the continuing accrual of damages did not toll the limitations period. The court similarly concluded that it was not necessary that plaintiffs knew of each discrete wrongful act by the defendant for the limitations period to begin running. The court accordingly held that § 508:4 barred the bulk of plaintiffs’ claims. 34 pages. Judge Joseph N. Laplante.
Jakobiec v. Merrill Lynch Life Ins. Co.
Case No. 10-cv-223-PB, Opinion No. 2012 DNH 134
Former attorney Thomas Tessier represented a trust that was designated as a beneficiary of a life insurance policy purchased from Merrill Lynch. With the aid of his brother, whom the probate court appointed as the trustee, Tessier misappropriated the proceeds of the policy. Thaddeus Jakobiec, the sole beneficiary of the trust, and several other interested parties sued Merrill Lynch for breach of the insurance contract. Their claim was premised on the assumption that Merrill Lynch breached the insurance contract by making the insurance policy proceeds check payable to a fraudulent trust created by Tessier to perpetuate his misappropriation scheme. The court granted Merrill Lynch’s motion for summary judgment because plaintiffs could not prove that the alleged breach caused their injury. The undisputed facts demonstrated that plaintiffs would have suffered the same harm regardless of Merrill Lynch’s alleged breach of the insurance contract because the Tessiers had positioned themselves to steal the proceeds of the insurance policy regardless of whether the check for the insurance proceeds had been made payable to the fraudulent trust or the trust designated under the policy. 9 pages. Judge Paul J. Barbadoro.
Sky Systems of Plymouth, N.H., LLC v. Sentech Architectural Systems, LLC
Case No. 12-cv-37-PB, Opinion No. 2012 DNH 145
Sky Systems brought suit against Sentech, alleging that it had not received all the commissions to which it was entitled when Sentech terminated it as its sales-representative for the Northeast region. In addition to contract damages, Sky sought treble damages and attorneys’ fees based on Sentech’s alleged violations of the New Hampshire and Texas Sales Representative Acts. Sky moved for summary judgment, which the court denied. The court held that the Texas Sales representative Act did not apply because Sentech had not engaged Sky to solicit orders within the state of Texas; the New Hampshire statute did not apply because Sky was an LLC and the statute only brought natural persons within its scope of protection. On the contract claim, the court held that of the two interpretations advanced by the parties, Sentech’s was the only reasonable construction. On that reading, Sentech did not immediately owe Sky, upon termination, all future commissions that might accrue, whether or not the purchaser had yet paid Sentech. Instead, commissions due Sky accrued only as purchasers made payments to Sentech, and Sky had not established that Sentech failed to make timely payments. 15 pages. Judge Paul J. Barbadoro.
Orion Seafood v. Supreme Group, et al.
Case No. 11-cv-562-SM, Opinion No. 2012 DNH 146
Plaintiff brought suit against three related business entities seeking to recover damages for defendants’ alleged failure to place purchase orders for frozen Maine lobster tails and false reassurances of performance. One defendant moved to dismiss several counts of the complaint for failure to state claims. The court converted the motion to dismiss to a motion for judgment on the pleadings. It denied the motion as to plaintiff’s equitable estoppel and fraudulent misrepresentation claims and granted the motion as to the state consumer protection claim. 13 pages. Judge Steven J. McAuliffe.
CRIMINAL LAW; SENTENCING
United States of America v. Paul Wilson
Criminal No. 11-cr-83/01-JL, Opinion No. 2012 DNH 143
The defendant was convicted of three counts of wire fraud in violation of 18 U.S.C. § 1343. In its presentence investigation report, the United States Probation Office recommended that a two-level increase be applied to the defendant’s base offense level pursuant to U.S. Sentencing Guideline § 3B1.3 for abusing a position of trust. Both the defendant and the government objected to this two-level enhancement, arguing that the defendant was not in a "trust relationship" with his victims. Noting that neither the plain language of the guideline nor its official commentary requires the defendant to be in a position of trust vis-à-vis his or her victim in order for the adjustment to apply, the court rejected the parties’ proffered interpretation of the guideline. And, because the defendant "abused a position of public or private trust . . . in a manner that significantly facilitated the commission or concealment of the offense," the court concluded that a two-level enhancement pursuant to § 3B1.3 was appropriate. 12 pages. Judge Joseph N. Laplante.
INTERNATIONAL LAW; CHILD CUSTODY
Jessica Thompson v. Chad Gnirk
Civil No. 12-cv-220-JL, Opinion No. 2012 DNH 142
A minor child’s mother brought an action under the Hague Convention on the Civil Aspects of International Child Abduction against the child’s father, claiming that he had wrongfully retained custody of the child in violation of the mother’s rights under the laws of Canada where, the mother claimed, the child had been habitually resident at the time of the alleged wrongful retention. The father claimed that the mother had abandoned custody of the child to him and that, in any event, the child was then habitually resident in the United States. Following a bench trial, the court found and ruled that, at the time of the alleged wrongful retention, the child was habitually resident in the United States. Specifically, the court found that (1) the parents had manifested a shared, settled intent that the child reside in the United States as of December 2008, when the mother and child moved from Canada to the United States and began living with the father, and continued to do so for a period lasting until the parties broke off their romantic relationship in May 2011 and (2) although, following the breakup, the child traveled to Canada with her mother, that did not reflect the parties’ agreement that the child reside in Canada from that point onward (indeed, within a month, the mother had returned the child to stay with her father in the United States). 42 pages. Judge Joseph N. Laplante.
Andrew Broady and Forever Music Productions, LLC v. Larry Hoppen, et al.
Case No. 12-cv-79-SM, Opinion No. 2012 DNH 132
Plaintiff music promoters brought suit against musicians, their unincorporated association, and booking agent, for, among other things, trademark infringement and breach of contract. Defendants moved to dismiss for lack of personal jurisdiction. The court granted the motion as to the federal trademark claim and dismissed the remaining state law claims for lack of subject matter jurisdiction. 16 pages. Judge Steven J. McAuliffe.
Orion Seafood v. Supreme Group, et al.
Case No. 11-cv-562-SM, Opinion No. 2012 DNH 147
Plaintiff brought suit against three related business entities seeking to recover damages for defendants’ alleged failure to place purchase orders for frozen Maine lobster tails and false reassurances of performance. Two defendants moved to dismiss for lack of personal jurisdiction. The court denied the motion without prejudice to refiling after the taking of jurisdictional discovery. 10 pages. Judge Steven J. McAuliffe
Colassi v. Hartford Life & Accident Insurance Co.
Case No. 10-cv-562-PB, Opinion No. 2012 DNH 141
Kenneth Colassi, pro se, brought a legal malpractice suit against his former attorney, Ronald Eskin, alleging that he was denied benefits in a prior administrative proceeding because of Eskin’s negligent or willful failure to submit certain medical information. The parties filed cross motions for judgment on the pleadings. The court denied Colassi’s motion because Colassi failed to even argue that he would be entitled to judgment if the facts were viewed in the light most favorable to Eskin. The sole basis for Eskin’s motion was Colassi’s failure to disclose an expert witness pursuant to the timetable of the court-approved discovery plan. The court agreed that an expert would be necessary to prove malpractice. Although the issue of whether an expert had been disclosed was not within the pleadings, Colassi conceded in his responsive materials that he had not and would not disclose an expert. In light of that concession, the court granted judgment because Colassi could prove no set of facts in support of his claim that would entitle him to relief. 4 pages. Judge Paul J. Barbadoro.
Markem-Imaje Corp. v. Zipher Ltd.
Case No. 07-cv-06-PB, Opinion No. 2012 DNH 136
Markem-Imaje Corporation ("Markem") sought a declaratory judgment that Zipher’s patents, disclosing thermal transfer printers, were invalid and unenforceable. In its motion for summary judgment, Markem argued that the patents’ use of functional claim language at the point of novelty rendered them invalid for indefiniteness. The court rejected Markem’s argument insofar as it determined there was no per se rule prohibiting functional claim language, whether at the point of novelty or elsewhere. Nonetheless, the court determined that the use of functional language in the patent claims at issue was improper because the specified structures — controllers — that are not inherently capable of performing the claimed functions, but must be programmed to perform those functions. One of skill in the art would therefore be unable to ascertain what structures were implied by the functional language, and the claims were indefinite. Further, the court explained that in light of the litigation history of the case it would not construe the claims as means-plus-function claims under 35 U.S.C. § 112, ¶ 6, but that even if it had, the claims could not be saved because the patent specification did not set out the algorithms necessary to provide the requisite structure. 28 pages. Judge Paul J. Barbadoro.
PROFESSIONAL MALPRACTICE; CAUSATION; CONSUMER PROTECTION ACT
Elmo et al. v. Callahan et al.
Civil No. 10-cv-286-JL, Opinion No. 2012 DNH 144
In this legal malpractice action, defendants moved for summary judgment, arguing that plaintiffs could not demonstrate that the defendants’ conduct legally and proximately caused their injury. Plaintiffs’ injury resulted from the failure of a business created in a "roll-up" merger of their company and several similar companies; plaintiffs claimed they would not have participated in the merger at all if not for the defendants’ malpractice. The court concluded that plaintiffs’ evidence was sufficient to prove "but-for" causation, but that it could not prove proximate causation because it did not establish that plaintiffs’ injury was a foreseeable consequence of the defendant’s conduct. The court therefore granted summary judgment in favor of defendants on plaintiffs’ claims for negligence, negligent misrepresentation, breach of fiduciary duty, and breach of contract. The court concluded, however, that plaintiffs could still recover under the New Hampshire Consumer Protection Act, N.H. Rev. Stat. Ann. § 358-A:1 et seq., reasoning that a plaintiff need not show that the defendant’s conduct caused its loss to recover under the Act, and, contrary to the defendants’ argument, the "securities regulation" exemption to the Act did not apply. The court also denied plaintiffs’ motions for default judgment for the defendants’ alleged spoliation of evidence. 35 pages. Judge Joseph N. Laplante.
Daniel Scolardi v. Fowler, et al.
Case No. 11-cv-298-SM, Opinion No. 2012 DNH 129
This civil suit arose out of a failed real estate transaction, when several parties were defrauded by a company known as CLM and its principals (not parties to this litigation). Defendants paid CLM a substantial sum of money, thinking CLM was plaintiff’s agent and, in exchange for that payment, they would receive a discharge to a mortgage held by plaintiff and encumbering property defendants recently purchased. That did not happen. These consolidated actions followed and defendants moved for summary judgment, saying they were entitled to an order compelling plaintiff to discharge that mortgage deed. The court denied the motion, holding that the existence of genuinely disputed material facts precluded the entry of judgment as a matter of law. Among the disputed issues were whether CLM was the actual or apparent agent of plaintiff and whether defendants’ attorney acted reasonably in assuming that it was. 12 pages. Judge Steven J. McAuliffe.
Marie L. Miller v. NationStar Mortgage, LLC
Case No. 12-cv-180-SM, Opinion No. 2012 DNH 130
After pro se plaintiff lost at least two state court actions she had filed against her former mortgage lender, she brought this federal action against the same defendant and several of its employees, whom she had not previously sued. She claims the lender and its employees violated several of her federally protected constitutional rights, committed a fraud upon the state court, were unjustly enriched at her expense, and unlawfully deprived her of her property. The court concluded that defendants were entitled to dismissal of plaintiff’s complaint on several grounds, including the Rooker-Feldman doctrine, res judicata, and collateral estoppel. 11 pages. Judge Steven J. McAuliffe.
Puiia v. Cross
Case No. 12-cv-54-PB, Opinion No. 2012 DNH 135
Joseph Puiia, Jr. sued Marital Master Philip Cross and Judge Lucinda Sadler of the New Hampshire Superior Court Family Division, as well as Barbara Salvo-Wallack, who served as the guardian ad litem in custody proceedings involving two of Puiia’s grandchildren. Puiia’s suit arose out of the family court proceedings that led to the suspension of his previously granted grandparent visitation rights. The court dismissed Puiia’s claims for monetary relief under Section 1983 on the basis of absolute judicial and quasi-judicial immunity. The court also dismissed Puiia’s claim for injunctive relief because Section 1983 expressly bars injunctions against judicial officers. Lastly, the court determined that Puiia failed to sufficiently plead his conspiracy claim. Having dismissed all federal claims, the court declined to exercise supplemental jurisdiction over Puiia’s state law claims. 10 pages. Judge Paul J. Barbadoro.
Peters v. Applewood Care & Rehabilitation Center
Case No. 12-cv-233-PB, Opinion No. 2012 DNH 150
The estate of Sylvia Robinson (the "Estate") filed suit in state court against Applewood, a privately owned and operated nursing home, Gail Cushing, the administrator of the facility, as well as unknown physicians and nurses working for Applewood. The Estate sought to hold defendants liable for Robinson’s death and other injuries she sustained during her residency at Applewood. The complaint asserted four state law claims that sound in tort and a section 1983 claim. Based on federal question jurisdiction over the section 1983 claim, defendants removed the action to this court. The court dismissed the section 1983 claim against all defendants because the Estate failed to allege sufficient facts to show that either Applewood or its agents acted under color of state law. The alleged grounds of state action — that the nursing home received substantial government funds and was extensive regulated by the government — were indistinguishable from the grounds the Supreme Court rejected in another case. Having dismissed the only federal claim, the court remanded the state law claims. 9 pages. Judge Paul J. Barbadoro.
Gregory Montore v. Michael J. Astrue, Commissioner, Social Security Administration
Case No. 11-cv-190-SM, Opinion No. 2012 DNH 131
Claimant appealed the denial of his application for disability benefits. He asserted that the administrative law judge (ALJ) erred in numerous respects, including by not finding that claimant suffered from a severe impairment of bipolar disorder and by failing to resolve a conflict between the Dictionary of Occupational Titles (DOT) and the vocational expert’s testimony. The court found no reversible error. Any error in failing to find a severe impairment of bipolar disorder was harmless, and the ALJ was not obligated to resolve a conflict between the vocational expert’s testimony and the DOT that was neither apparent nor identified at the administrative hearing. 21 pages. Judge Steven J. McAuliffe.
Constance Leach v. Michael J. Astrue, Commissioner, Social Security Administration
Case No. 11-cv-363-SM, Opinion No. 2012 DNH 128
Claimant moved to reverse the Commissioner’s denial of her application for disability insurance benefits. The court granted that motion, at least to the extent claimant sought remand to the administrative law judge, concluding that the ALJ had failed to adequately explain his decision to substantially discount the professional opinions of claimant’s treating physicians. 19 pages. Judge Steven J. McAuliffe.