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Bar News - October 18, 2013

NH Supreme Court At-a-Glance: August 2013


Workers’ Compensation

Appeal of Thomas Phillips, No. 2011-683
August 21, 2013
Affirmed in part; reversed in part; vacated in part; and remanded
  • Whether actual notice is sufficient under the Workers’ Compensation Law.
In 2006, Thomas Phillips and his wife were living in a trailer they rented from the Crockers, who lived on abutting property. As part of their lease agreement, Mr. Phillips agreed to perform general yard and home maintenance work for the Crockers, in exchange for a rent reduction. In August of that year, Mr. Crocker asked Mr. Phillips to remove a branch of a tree near the Crockers’ house. The next day, Mr. Phillips fell while cutting the branch with a chainsaw. No one witnessed the fall, but Mrs. Phillips and the Crockers found him shortly afterward. As a result of the fall, Mr. Phillips was paralyzed from the neck down.

About three years later, on Aug.10, 2009, Mr. Phillips filed a claim for workers’ compensation benefits, claiming that the Crockers were his employers. The Crockers had a homeowners’ insurance policy that included mandatory workers’ compensation coverage for domestic employers, as required by state law (RSA 281-A:6). The Crockers’ insurance company denied Mr. Phillips’ claim, and he requested a hearing with the New Hampshire Department of Labor (DOL). The DOL determined that Mr. Phillips was entitled to workers’ compensation benefits, and the insurance company appealed to the Compensation Appeals Board (CAB).

The CAB disagreed with the DOL, concluding that Mr. Phillips failed to provide timely notice of his injury to the Crockers within two years, as required by RSA 281-A:19 and 20. The CAB reasoned that the Crockers’ actual notice of Mr. Phillips’ injuries was not sufficient, because the Crockers were not traditional employers and did not have the expertise in the area of workers’ compensation law to know when an injury could trigger a claim for benefits. Mr. Phillips appealed the CAB’s determination to the NH Supreme Court.

On appeal, the court clarified that, contrary to the insurance company’s argument, there is nothing in the workers’ compensation statute that required that notice to an employer of an injury include notice of a potential claim for workers’ compensation benefits. Therefore, because there was no question that the Crockers had actual notice of the injury, as well as knowledge that the injury occurred while Mr. Phillips was cutting a branch at their request, RSA 281-A:19 and 20 do not bar Mr. Phillips’ workers’ compensation claim. The court remanded the case to the CAB for a determination of whether Mr. Phillips’ intoxication caused his injury, in whole or in part.

Wadleigh, Starr & Peters, PLLC, Manchester (Michael R. Mortimer and Emily G. Bolton on the brief, and Mr. Mortimer orally), for Thomas Phillips. Bernard & Merrill, PLLC, Manchester (Andrew A. Merrill and Gary S. Harding on the brief, and Mr. Merrill orally), for State Farm Fire & Casualty Company.

Breach of Contract – Remittitur

Victor Virgin Construction Corp. v. NH Department of Transportation, No. 2012-162
August 21, 2013
Vacated and remanded
  • Whether the trial court properly remitted a jury award following an advisory jury finding of liability for breach of contract and a jury finding of negligent misrepresentation by defendant.
In 2008, Victor Virgin Construction Corporation bid on a NH Department of Transportation project and was awarded the contract. The DOT subsequently requested several changes from Virgin’s subcontractors, which increased the project’s scope and delayed its completion by almost a year. After completion of the project, DOT paid Virgin the amount originally agreed to, with only a minor upward adjustment for the changes. Virgin sued DOT for both breach of contract and negligent misrepresentation.

The trial court denied DOT’s motion to bifurcate the trial, holding that the jury would try the negligent misrepresentation claim and would serve only an advisory role as to the breach of contract claim. The jury found in favor of Virgin on both of its claims and awarded it over $1.5 million in damages. The DOT then moved for a new trial, or, alternatively, to set aside the jury award and for either a new trial on the issue of damages or remittitur. The trial court granted remittitur and reduced the award to $779,078.80. The court did not enter a finding of liability on the breach of contract claim, ruling instead that the award could be sustained solely on the negligent misrepresentation claim. Virgin appealed, seeking the jury’s full award, and DOT cross-appealed, seeking further remittitur.

On appeal, the NH Supreme Court agreed with DOT that Virgin’s claim for negligent misrepresentation was governed by RSA 541-B:14, I, which limits recovery for tort claims against the state to $475,000. The court held that the full $475,000 was appropriate in this case, as there was ample evidence that Virgin’s damages exceeded that amount. The court then noted that, because the statutory cap does not apply to Virgin’s breach of contract claim, the matter must be remanded to the trial court for a determination as to DOT’s liability on that claim, and, if appropriate, the amount of damages.

D’Amante, Couser, Pellerin, & Associates, Concord (Bruce J. Marshall) for Virgin. Michael A. Delaney, attorney general (Kevin H. O’Neill), for DOT.

Criminal Procedure – Evidence

State v. Ernest Willis, No. 2011-678August 21, 2013
  • Whether the trial court properly admitted statements the defendant made to his church pastor and portions of a recorded police interview.
Back in 1997, then 15-year-old C.A. and Ernest Wills, the defendant, then 39 years old, attended the same church in Concord. C.A. became close with the defendant, and he gave her driving lessons. During one of the lessons, C.A. and the defendant had sexual contact and, about a month later, they had sexual intercourse at C.A.’s home. In October 1997, an upset C.A. confided in another church member that she was pregnant.

The church’s pastor, Charles Phelps, and C.A.’s mother were notified. Phelps and his wife, Linda, met with C.A. and her mother that night, and C.A. stated that the defendant was the father of the child. The next day, Phelps met privately with the defendant, who acknowledged his relationship with C.A. Phelps then reported the information to the police and DCYF, after informing the defendant that he would do so. Later that evening, the defendant and his wife met with Phelps and Linda.

The police investigation stalled in 1997 and was not restarted again until 2010 when Detective Chris DeAngelis learning of the events and telephoned C.A. to investigate. DeAngelis also spoke with Phelps and conducted an audio-recorded interview with the defendant in May 2010. The defendant was indicted, and the evidence at trial included the audio-recorded police interview of the defendant, partially redacted at the defendant’s request, and Phelps’s testimony.

With regard to the admissibility of the defendant’s statements to Phelps, the NH Supreme Court ruled that the trial court properly found that the religious privilege did not apply to statements the defendant made in the presence of Phelps’s wife, because she was an extraneous third party. The court also upheld the trial court’s admission of statements the defendant made only to Phelps, finding that the religious privilege also did not apply to these statements, because New Hampshire’s Child Protection Act requires clergy to report child abuse regardless of the possible application of the religious privilege.

The court next turned to statements from the defendant’s audio-recorded police interview. The court held that Detective DeAngelis’ statements questioning C.A.’s motive to lie were properly admitted because their probative value was not substantially outweighed by the danger of unfair prejudice to the defendant. Next the court held that although the trial court should not have admitted certain statements from the interview that referenced an anonymous DCYF report filed in 1997, it was a harmless error, because the trial court’s prompt and thorough limiting instruction that the jury was not to consider those statements for their truth, but only for the purpose of eliciting a response from the defendant, cured the prejudice.

Michael A. Delaney, attorney general (Susan P. McGinnis), for the State. Christopher M. Johnson (chief appellate defender), Concord, for the defendant.

NH Supreme Court slip opinions in the following cases were summarized by Bar News staff.

Real Property

Bilden Properties LLC & a. v. S. Gerald Birin & a.
No. 2012-387
Aug. 21, 2013
Affirmed in part; reversed in part; vacated in part; and remanded.
  • Whether the trial court erred in finding that the petitioners were bona fide purchasers for value, who acquired interest in the subject property without notice of the Birins’ mortgage on it.
On Dec. 18, 2001, Austin James Properties LLC acquired title to the property at 719 Daniel Webster Highway in Merrimack and granted first and second mortgages to Southern New Hampshire Bank. In 2006, Scott Desantis, the managing member of Austin James Properties, granted a $1 million mortgage on the property to the Birins, to secure a number of debts that he and entities he controlled owed to them.

The deed for the mortgage, which far exceeded the value of the property, was captioned incorrectly, listing the grantor as "Austin James Development," instead of "Austin James Properties." The error was transferred to the grantor index at the registry of deeds.

In the spring of 2007, another mortgage on the property was granted under the correct name. In November 2007, Austin James Properties entered into a purchase and sales agreement for the property with Bilden Properties, which applied for a loan at TD Bank, which hired an attorney to examine the title. The attorney hired a title abstractor, whose title search uncovered only the second mortgage. A reference to "Austin James Development" was checked with the Secretary of State’s office, which reported that no such entity was registered there. Told of this, the attorney did not instruct the title abstractor to search the other name in the grantor index and ultimately certified the title as marketable and insurable, not knowing about the Birin’s mortgage.

In December 2007, Austin James Properties sold the property to Bilden Properties for $339,000, and other mortgages on the property were discharged.

In 2009, the Birins began foreclosure proceedings on the property. Following a bench trial, the trial court found that the petitioners were bona fide purchasers for value, who purchased the property without notice of the Birins’ mortgage. Yet, the trial court also ruled that the petitioners’ interest in the property were equitably subrogated up to the amount paid to discharge the Southern New Hampshire Bank mortgages. Although the trial court granted a permanent injunction prohibiting the Birins from foreclosing, it found that their "right of foreclosure is limited by the terms of their mortgage and as a mortgagee junior to the TD Bank mortgage as subrogates."

Petitioners Bilden Properties and TD Bank North America appealed, and the respondents cross-appealed.

In New Hampshire, priority is given to a subsequent purchaser who acquires an interest without notice of prior interest, but only if the subsequent purchaser also records his or her interest before the owner of the prior interest records that prior interest. (RSA 477:3-a (2001). This makes the Birins’ mortgage unenforceable, if the petitioners recorded their interest first in one of three ways provided by the statute – "actual," "record," or "inquiry." Inquiry notice arises from legal inference – notice of a fact that is sufficiently curious or suspicious.

The NH Supreme Court found that petitioners had actual notice of the 2007 mortgage and inquiry notice of the Birins’ mortgage, because the name "Austin James Development" was listed in records of the 2007 mortgage, and a grantor index search of that name would have revealed the Birins’ mortgage. The court found that it was not reasonable for the attorney and/or title abstractor to conclude the search after contact with the Secretary of State’s office. Thus, the court reversed the trial court’s ruling that the petitioners were purchasers for value.

The court upheld the trial court’s determination that the petitioners’ interests in the property were equitably subrogated up to the amount paid to discharge the prior mortgages held by Southern New Hampshire Bank. The court did not address whether the attorney and title abstractor hired by TD Bank were negligent. The case was remanded to the trial court to determine the rate of interest that should be applied to the amount owed to petitioners at foreclosure.

Coughlin, Rainboth, Murphy & Lown, PA, of Portsmouth (Kenneth D. Murphy on the brief and orally), for petitioner Bilden Properties LLC.

Wacks & McHale PC, of Lynnfield, Massachusetts (Kenneth D. Wacks and Michelle A. McHale on the brief, and John F. Willis orally), for petitioner TD Bank, NA. Hage Hodes, PA, of Manchester (Jamie N. Hage on the brief and orally), for the respondents.

Criminal Procedure

State of New Hampshire v. Bradford Dalton
No. 2012-392
Aug. 21, 2013
  • Whether the trial court erred in denying his motion to suppress evidence.
Bradford Dalton was arrested and charged with driving under the influence – third offense, on June 17, 2010. The arresting officer pulled him over at about 7:40 p.m., after noticing that his car did not appear to have an inspection sticker. The vehicle did have a transparent temporary inspection sticker that had been issued in May (the stickers don’t list the year in which they were issued). The stickers give drivers 60 days to correct a vehicle emissions problem.

Because the officer couldn’t determine in which year the sticker was issued, and therefore whether it was valid, he asked the driver for his license and registration. While speaking with the defendant he noticed an odor of alcohol and subsequently arrested him.

The trial court denied a motion to suppress evidence from the stop, ruling that because the officer couldn’t determine from the sticker whether it was valid, he had proper authority to request the driver’s paperwork.

Following conviction, the defendant appealed, arguing that the officer violated his right s under Part I, Article 19 of the New Hampshire Constitution and the Fourth and Fourteenth Amendments to the United States Constitution by continuing a motor vehicle stop after realizing the vehicle had an inspection sticker.

The NH Supreme Court upheld the trial court’s ruling, finding that the officer was not only stopping the vehicle to determine whether it had an inspection sticker, but also to determine whether any sticker on the vehicle was valid. Because his request for the related paperwork was "reasonably related to the initial justification for the stop," it was deemed proper. State v. McKinnnon-Andrews (2004). The court found that the federal constitution provides no greater protection than the state constitution in this area.

Michael A. Delaney, attorney general (Diana E. Fenton, assistant attorney general, on the brief and orally), for the State. Thomas Barnard, assistant appellate defender, of Concord, on the brief and orally, for the defendant.

Utilities Law

Appeal of Northern New England Telephone Operations LLC d/b/a Fairpoint Communications-NNE
No. 2012-398
Aug. 21, 2013
  • Whether the Public Utilities Commission (PUC) erred in its rulings relative to Fairpoint’s common line access charges.
In March 2008, the PUC ordered Verizon to stop imposing "carrier common line charges" on certain telephone calls that did not require use of Verizon’s common line, finding that Verizon did not provide switched access service in connection with the calls. On appeal, the NH Supreme Court reversed the PUC’s decision. Appeal of Verizon New England (2009). The court found that common line access was only one aspect of switched access service.

After that decision, the PUC reopened the proceeding and ordered Verizon’s successor, Fairpoint, to clarify when it could charge common line charges. The PUC approved Fairpoint’s revision but rejected Fairpoint’s attempt to increase the fees. Because it found the fee-increase proposal to be voluntarily submitted, the PUC later agreed to dismiss the portion of the docket related to the common line charges, after finding that an order of the Federal Communications Commission and sections of the Code of Federal Regulations capped the fee. Fairpoint appealed and had the burden of proving the PUC acted unlawfully, unreasonably or unjustly.

The NH Supreme Court rejected claims that Fairpoint did not move for rehearing in a timely fashion. With regard to the merits of Fairpoint’s claims, the court found that the revisions requested by the PUC were not "outside the scope of the proceedings." The court did not consider Fairpoint’s arguments about why the requested revisions were outside the scope of the proceedings because they were not included in its motion for reconsideration. Likewise, the court did not address Fairpoint’s argument that the common line fee is not a "contribution element" because it was not included in its motion for reconsideration.

The court also found that the PUC did not deprive Fairpoint of its due process rights by "prohibiting further proceedings" regarding the use of the common line charge, because Fairpoint agreed to take the record "as is" when it intervened in the proceeding, acknowledging that no further proceedings were necessary to decide issues already addressed.

The court also rejected the argument that the PUC’s failure to accept Fairpoint’s proposal to raise the common line fee rates equated to confiscation of the company’s property, stating that Fairpoint failed to outline an adequately developed legal argument for the claim. The same was decided about a claim that the PUC violated RSA 378:27.

Orr & Reno of Concord (Susan S. Geiger on the joint brief and orally), for the petitioner Freedom Ring Communications, LLC d/b/a BayRing Communications. Rich May, P.C., of Boston, Mass., (Shaela McNulty Collins and Eric J. Krathwohl on the joint brief), for petitioner Global Crossing Telecommunications Inc., A Level 3 Company. BCM Environmental & Land Law PLLC, of Concord (Amy Manzelli on the joint brief), and Fagelbaum & Heller, LLP, of Sherborn, Mass. (Gregory M. Kennan on the joint brief), for petitioner Choice One of New Hampshire Inc., Conversent Communications of New Hampshire, LLC, CTC Communications Corp., and Lightship Telecom, LLC, all of which do business as Earthlink Business. Hinckley, Allen & Snyder, LLP, of Concord (Daniel M. Deschenes on the joint brief), and James A. Huttenhower, of Chicago, Ill., on the joint brief, for petitioner AT&T Corp.

Devine, Millimet & Branch of Manchester (Harry N. Malone on the brief and orally), for the respondent, Northern New England Telephone Operations LLC d/b/a FairPoint Communications – NNE.

Heather Devine

Heather Devine is an associate at Sulloway & Hollis. She is a member of the firm’s Employment and Litigation practice groups

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

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