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Bar News - May 17, 2013


NH Supreme Court At-a-Glance: April 2013

By:

Administrative Law

Appeal of City of Nashua, No. 2012-252
April 12, 2013
Affirmed
  • Whether "net assets" for purposes of eligibility for elderly tax exemption included encumbrances on real property, the value of which is excluded from "net assets" under RSA 72:39-a, I(c)
Petitioner challenged a NH Board of Tax and Land Appeals decision granting an elderly exemption to a taxpayer. The taxpayer applied for the exemption, and the BTLA granted it, on the basis of the taxpayer’s net assets – not including the value of her residence, but subtracting the value of an equity loan secured by that residence.

The Supreme Court reversed the BTLA, reasoning that "net assets," as used in RSA 72:39-a, I(c), means "the value of all includable assets net any encumbrances on those assets."

Sylvia F. Brewster, Law Offices of Sylvia F. Brewster, PLLC, Portsmouth, for the taxpayer. Stephen M. Bennett, Office of Corporation Counsel, Nashua, for the City of Nashua. Carynne Christine Fillmore, Concord, for the New Hampshire Local Government Center.


Strike Four LLC v. Nissan North America Inc., No. 2012-193
April 12, 2013
Affirmed in part; vacated in part; and remanded
  • Whether a settlement agreement between an auto manufacturer and dealer, calling for automatic termination of dealership in event of breach, was unenforceable for illegality pursuant to RSA 357-C
  • Whether a dealer’s conduct in negotiating and attacking a settlement agreement with an automobile manufacturer could justify an award of attorney’s fees for bad-faith conduct, notwithstanding the illegality of agreement
Strike Four LLC operates a Nissan dealership. In 2005, Nissan North America Inc. issued a notice of termination to Strike Four, prompting protests and counter-protests before the Motor Vehicle Industry Board. Ultimately, following two years of settlement negotiations, Nissan and Strike Four settled their cross-protests. The settlement included terms allowing an automatic discontinuance of Strike Four’s dealership, if Strike Four failed to meet sales targets. It also purported to waive each party’s ability to challenge the legality or enforceability of the settlement agreement.

When Strike Four failed to meet sales targets in 2010, Nissan invoked the settlement agreement. Strike Four filed another protest with the Motor Vehicle Industry Board asserting that the settlement agreement was unenforceable. Nissan filed a protest in response, seeking attorneys’ fees for Strike Four’s conduct in negotiating and seeking to avoid the agreement. The board granted Nissan’s counter-protest and denied Strike Four’s.

On appeal to the Superior Court, the Court granted summary judgment to Strike Four on both claims.

The Supreme Court affirmed the Superior Court as to the unenforceability of the settlement agreement, but vacated and remanded to the board for factual findings to determine if a fee award was appropriate. In holding that the settlement was unenforceable, the Supreme Court first reasoned that the waiver of challenges to legality was unenforceable, and Strike Four could not be estopped from raising the illegality argument. The Court then considered, and rejected, numerous arguments about the interpretation of RSA 357-C:7. That section of the statute clearly states that "Notwithstanding the terms... of any agreement... or [any] waiver no manufacturer shall cancel, terminate, fail to renew, or refuse to continue any franchise relationship" without following a statutory process. In light of this language, the Court held that an advance waiver of these statutory rights was illegal and unenforceable.

This did not establish, however, that Strike Four’s conduct did not constitute "bad faith" under 357-C:3. Despite the unenforceability of the settlement agreement, Strike Four’s conduct in forestalling the termination proceedings started in 2005, was held to potentially be bad faith, entitling Nissan to attorneys’ fees. The case was remanded to the board for factual findings relative to this claim.

Gregory A. Holmes, Holmes Law Offices, Concord; Elizabeth M. Leonard, McDowell &Osburn, Manchester, for petitioner. William N. Berkowitz, et al., Bingham McCutchen, Boston, Mass., for the respondent. Elizabeth A. McNellie, Baker Hostetler, Columbus, Ohio, and Brian J.S. Cullen, Cullen Collimore, Nashua, for the Association of Global Automakers, Inc., as amicus curiae.


Appeal of William Stewart, No. 2012-363
April 25, 2013
Vacated and remanded
  • Whether the requirement of "earning" at least $1,400 in two of four fiscal quarters to receive unemployment compensation was satisfied where wages were paid in one quarter but earned in both that quarter and the prior one
Petitioner William Stewart worked as the code enforcement officer in Laconia from March 14 to June 29, 2011. His second paycheck, for hours worked March 21 to March 27 was paid on April 1. That check would have given him more than the requisite $1,400 of earnings in the third quarter to satisfy the unemployment statute’s threshold, and there was no question that he earned more than enough in the fourth quarter to satisfy the statute.

Upon termination, petitioner applied to the NH Department of Employment Security for unemployment benefits. The DES ruled that he did not have the requisite earnings in two of four quarters in his base period under RSA 282-A:25. This ruling counted the April 1 paycheck in the fourth quarter.

Petitioner appealed, arguing that he had "earned" the April 1 paycheck during March, which was within the third quarter. The Supreme Court agreed, based on the plain language of the statute. In so doing, it explained that an earlier ruling, Appeal of Tennis, 149 N.H. 91, 95 (2003), did not require a different result. In Tennis, the issue was when a severance payment was earned under RSA 282-A:25. Because discretion is necessary to determine when a severance payment is "earned," the holding in that case, that the date of receipt had to be used as the date such payments are "earned" under the statute, did not control the issue of when wages were earned.

Because the Petitioner earned sufficient wages during two consecutive quarters under its interpretation of RSA 282-A:25, the Supreme Court vacated DES’s denial of benefits and remanded for future proceedings.

William Stewart, self-represented party. Michael A. Delaney, attorney general (Patrick J. Queenan, attorney) for the NH Department of Employment Security.


Civil Procedure

Ojo v. Lorenzo, et als., No. 2012-510
April 2, 2013
Affirmed in part, reversed and remanded
  • Whether a plaintiff’s civil claims based on his arrest were barred by his indictment on the charges for which he was arrested
Petitioner was arrested by the respondent, Manchester police officer Lorenzo, based in part on a kidnapping victim’s physical description of her assailant, which did not closely match petitioner’s physical appearance. Although he was indicted and confined for 17 months, the charges were eventually dropped when the complainant moved out of country.

Petitioner brought claims against respondents, Manchester Police Department and officer Lorenzo, based on respondents’ pre-arrest investigation and witness identification procedures. Construing these as claims for false imprisonment and malicious prosecution, respondents moved to dismiss, arguing that petitioner’s claims each required, as an essential element, the lack of probable cause – an element that was defeated because petitioner was indicted. The Superior Court granted the motion in a two-sentence order, holding that petitioner’s indictment rendered respondents immune from suit.

The Supreme Court reversed except as to malicious prosecution claims. The Court held that the indictment did not serve to preclude petitioner from arguing the issue of probable cause at the time of arrest. Because petitioner was not a party to indictment proceedings, there was no opportunity to litigate the issue, as required before collateral estoppel could attach. The Court also rejected respondents’ arguments for municipal immunity or immunity pursuant to RSA 507:8-d. The Court reasoned that, although petitioner’s indictment established probable cause at the time of the indictment, it did not establish same at the time petitioner was arrested.

Finally, the Court held that the lack of probable cause was not an essential element of petitioner’s claim; rather, probable cause was a defense to the claim, and one, the Court noted, respondents could raise in a summary judgment motion.

Osahenrumwen Ojo, self-represented party. Robert J. Meagher, McDonough, O’Shaughnessy, Whaland & Meagher, Manchester, for the defendants.


Commercial Law

The Sunapee Difference LLC v. State of New Hampshire, No. 2011-746
April 3, 2013
Affirmed in part, reversed in part, vacated and remanded
  • Numerous issues with respect to the state’s leasing of the Sunapee ski area and Mount Sunapee State Park
Petitioner, the Sunapee Difference LLC, appealed numerous orders of the Merrimack County Superior Court. The procedural history leading up to the appeal was complex, but in essence it involved a dispute over the rights of petitioner under a lease to run and expand the Sunapee ski area.

When the RFP was issued by the State, it was unclear whether the entire state park, or only the ski area, was to be included. Several witnesses testified that the RFP was to include the whole park. An explicit term of the lease, however, required approval of the governor and executive council. The lease was signed by petitioner and the NH Department of Recreation and Economic Development (DRED) prior to a formal metes-and-bounds description of the leasehold property being issued. The metes-and-bounds description, excluding the disputed portion of the park, was then issued and was part of the lease approved by Gov. Shaheen and the NH Executive Council in 1998.

Petitioner discovered this discrepancy in 2000 and approached DRED to amend the lease. In 2002, DRED recommended a lease amendment if petitioner agreed to certain conditions. Petitioner agreed to the conditions, and in reliance on the lease amendment, exercised a purchase option for land adjoining the park. The lease amendment was presented to Gov. Lynch in 2005. He refused to bring the lease to the Executive Council for approval. Petitioner sued the State in 2007, alleging breach of contract, equitable estoppel, breach of implied covenant of good faith and fair dealing, and inverse condemnation. It also sought reformation of the lease. The State challenged petitioner’s standing to bring these claims, as it had assigned the lease to a third party. The Superior Court assumed that petitioners had standing but granted summary judgment to the State on all claims.

The Supreme Court ruled that petitioner had standing based on the language of the lease assignments and the general rule that a lease assignment only destroyed privity of estate between petitioner and the State – not privity of contract. The Supreme Court also affirmed the trial court on petitioner’s breach of contract claim. That claim was based on Gov. Lynch’s refusal to bring the lease amendment to the Executive Council for approval. The Court reasoned that the lease language requiring approval of the "Governor and Council" had to be construed in line with RSA 4:40, which did not require the Governor to submit proposals for disposing of public land to the Council if he did not approve of them himself.

The Supreme Court reversed and remanded on the issue of equitable estoppel. It agreed with petitioner that genuine issues of fact existed with respect to the claim that the State should be estopped from denying that the borders of the park should be the boundaries of the leasehold. There was testimony, sufficient to at least require a trial, that the State misrepresented the boundaries of the leasehold early in negotiations with petitioner.

The Supreme Court also found that it could have been reasonable for petitioner to rely on these misrepresentations despite the general proposition that the State is not estopped by the unauthorized statements of its officials. The Court reasoned that, based on the narrow circumstances of the case, the State officials’ conduct was the sort of "capricious dealing or affirmative misconduct" that justified an exception to this rule. Because there was sufficient evidence to draw the conclusion that DRED affirmatively delayed presentation of the correct map until after the lease signing, the equitable estoppel claim could proceed to trial. The Court reversed and remanded the estoppel claim. The Court also reversed and remanded on the reformation claim, on the same rationale.

The Court affirmed summary judgment on the implied covenant of good faith and fair dealing claims. Because the implied covenants were "qualified and restrained" by the specific requirement of governor and council approval, the Court reasoned, they could not stand.

Finally, the Court found that there was an insufficient factual record to support summary judgment on the inverse condemnation claims. For this reason, the judgment for the State on these claims was vacated and remanded. The Court declined to consider attorneys’ fees, as that request was premature.

James E. Higgins of Manchester for the plaintiff. Michael A. Delaney, attorney general (Richard W. Head, associate attorney general), for the State.


Criminal Law

State of New Hampshire v. Rodriguez, No. 2012-038
April 30, 2013
Affirmed in part; reversed in part; and remanded
  • Whether the admission of co-conspirators’ statements post arrest constituted harmless error with respect to charges of conspiracy to commit burglary, or on charges of conspiracy and accomplice liability for first-degree assault
Petitioner appealed from his conviction on charges of conspiracy to commit burglary, conspiracy to commit first-degree assault, and accomplice liability for first-degree assault. Petitioner was charged with being the ringleader of a group of people who planned to go to the apartment of a drug dealer to assault him. The group went to the wrong apartment and assaulted someone else, stabbing him and beating him with what was described as a "souvenir" baseball bat. One of the drivers, on learning what had occurred, went to the police, resulting in the arrest of several other co-conspirators.

The investigating detectives were allowed to testify at trial about the co-conspirators’ post-arrest statements concerning petitioner’s role in entering the apartment and committing the assault. Although there was other direct testimony about petitioner’s participation in a plan to enter the apartment to commit an assault, the only direct evidence of the intent to use deadly weapons came from this testimony. Petitioner was convicted of burglary, first-degree assault, conspiracy to commit burglary, conspiracy to commit first-degree assault and being an accomplice to first-degree assault.

The trial court, noting its error in admitting these post-arrest statements under NH R.E. 801(d)(2)(E), vacated the burglary and first-degree assault convictions, but ruled that the error was harmless with respect to the remaining charges.

The Supreme Court reversed with respect to the charges related to first-degree assault. Because the only direct evidence at trial of the intent to use a deadly weapon came from the improperly-admitted testimony, there was no "overwhelming" evidence to support a first-degree assault charge, or derivative conspiracy or accomplice charges. The Supreme Court remanded the case for a new trial on the assault related charges.

As to the burglary-related charges, the Court held that there was overwhelming evidence of petitioner’s role in the plan to enter the apartment to commit a crime. Testimony of the non-conspirator driver and other witnesses established petitioner’s role in a plan to intentionally enter the apartment and commit assault. The Supreme Court therefore affirmed the burglary charge.

Michael A. Delaney, attorney general (Susan P. McGinnis, senior assistant attorney general) for the state. Christopher M. Johnson for the defendant.


Municipal Law

Town of Bartlett Board of Selectmen v. Town of Bartlett Zoning Board of Adjustment, No. 2012-490
April 12, 2013
Affirmed
  • Whether the term "premises" in the Town of Bartlett’s Municipal Ordinance was broad enough to allow signage on one lot owned by landowner after activities on another, contiguous lot
Petitioner, the Bartlett Board of Selectmen, appealed a Superior Court order upholding the Bartlett ZBA’s decision to allow a sign directing visitors to a registration office at Attitash Mountain Village. The sign was on Attitash Mountain Village’s property, but not on the same lot as the registration office. The property owner sought permission to erect this sign from the ZBA. The ZBA considered whether the municipal ordinance’s prohibitions on off-premise signs prohibited the sign in question, and held that it did not. The selectmen appealed to the Superior Court, which affirmed the ZBA.

On appeal, the Supreme Court held that the term "premises," as used in the municipal ordinance, encompassed "the place of business of an enterprise or institution." Thus, the landowner was not forbidden from erecting a sign at its place of business for activities there, even though the activities took place on a different lot.

The Court ruled against the selectmen’s jurisdictional argument as well, holding that a prevailing party needs not file a motion for rehearing before the ZBA in order to present alternative arguments in favor of upholding the ZBA’s favorable decision. The Court did not reach intervenors’ argument that the sign at issue was a "directional sign" permitted by the ordinance.

John J. Ratigan, Donahue, Tucker & Ciandella, Exeter for petitioner. Christopher T. Meier, Cooper Cargill Chant, North Conway, for the intervenor.


Steve Trefethen v. Town of Derry, No. 2012-394
April 12, 2013
Reversed and remanded
  • Whether RSA 21:35, II rendered an appeal of a ZBA decision timely, when the 30-day deadline expired on a Saturday and appeal was filed the following Monday
Petitioners filed an appeal of a ZBA decision on the 32nd day after that decision. The 30th day, which is the deadline under RSA 677:4, fell on a Saturday, and the appeal was filed the following Monday. The Superior Court dismissed for lack of subject matter jurisdiction, holding that the appeal was late-filed.

The Supreme Court held that the plain language of RSA 21:35, II extended the deadline set by 677:4 to the Monday following, given that the deadline fell on a Saturday.

The respondents argued that a prior case reaching the opposite conclusion was binding. See Radziewicz, 159 N.H. 313, 316-17 (2009). Because Radziewicz was decided before the effective date of RSA 21:35, however, Radziewicz was held not to be binding.

As the Supreme Court’s interpretation of RSA 21:35 and 677:4 was that the Superior Court did have jurisdiction over petitioner’s appeal, the case was remanded to the Superior Court.

Steve and Laura Trefethen, self-represented parties. Edmund J. Boutin and Lynn Guimond Sabean, Boutin&Altieri, Londonderry, for the Town of Derry.


Hannaford Bros. Co. v. Town of Bedford, et als., No. 2011-611
April 25, 2013
Affirmed
  • Whether the non-abutting competitor of a variance applicant has standing to challenge the ZBA’s decision absent any showing of direct injury
Petitioner owns a supermarket in Bedford, located in the commercial district. Bedford’s zoning ordinance restricts the size of any single building in that district to 40,000 square feet. When another supermarket sought a variance to build a 78,332 square foot store 3.8 miles away, petitioner objected to the variance application. The ZBA, in granting the variance, made reference to the differences between the petitioner’s location and the applicant’s location, and decided that the "spirit of the ordinance" did not foreclose a larger building on the applicant’s uniquely-situated lot.

Petitioner sought rehearing, and the ZBA held that it lacked standing because it was not a "person directly affected by the decision." The Superior Court dismissed the appeal on the same grounds.

On appeal to the Supreme Court, petitioner claimed standing on the basis of the ZBA’s comparisons of petitioner to applicant. This argument did not persuade the Supreme Court, because comparisons to other landowners are part of the determination a ZBA must make as to the character of the locality when analyzing a variance. Even if the comparison could arguably offer petitioner’s indefinite plans for future expansion, there was no direct and immediate injury.

Petitioner also claimed that the relief granted to applicant from the generally applicable zoning ordinance caused injury in the form of "unfair or illegal competition." This argument failed because it improperly conflated standing with the merits of the variance petition. If accepted, the Court reasoned, petitioner’s argument would grant standing to anyone who claimed that a ZBA decision was wrong.

Having failed to show proximity to the applicant or any concrete injury, petitioner raised additional grounds to assert standing – namely that it was deprived of equal protection of laws under the New Hampshire Constitution and RSA 674:20. Here, too, the lack of any direct injury was fatal to petitioner’s argument, and the Supreme Court affirmed the dismissal.

David W. Rayment and Mark S. Derby, Cleveland, Waters and Bass, for the Petitioner. Barton L. Mayer and Matthew R. Serge for the Town of Bedford and Bedford ZBA. Ari B. Pollack and Samantha D. Elliott for the Intervenor, Retail Management and Development Inc.


Pierre A. Chabot


Pierre A. Chabot of Hillsborough, an attorney at Wadleigh, Starr & Peters, focuses his practice on complex litigation, labor relations, and employment matters. He is admitted to practice before the state and federal courts in New Hampshire, the First Circuit Court of Appeals, and the United States Supreme Court.

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