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Bar News - November 19, 2014

Supreme Court At-a-Glance

October 2014
Employment Law
Appeal of Professional Firefighters of Hudson, IAFF Local 3154
No. 2013-690
Oct. 28, 2014
  • Multiple questions on appeal from an administrative proceeding before the Public Employee Labor Relations Board regarding the Town of Hudson’s refusal to pay unionized members of its fire department scheduled wage increases pursuant to a collective bargaining agreement that had expired and did not contain an automatic renewal clause, even though the Town paid such increases in the past under similar circumstances

In August 2011, the Town of Hudson informed the Professional Firefighters Union that it would no longer pay scheduled wage increases that it had been required to pay pursuant to a collective bargaining agreement (CBA) that was executed in 2006 and expired in 2009.

The 2006 CBA did not contain an automatic renewal clause (“evergreen” clause). The Town and Union had been parties to five CBAs dating back to 1991. On each occasion in the past, the Town had continued to pay scheduled wage increases during the interval between expiration and renewal of the parties’ various CBAs, even in the absence of an evergreen clause.

The Union filed a grievance pursuant to procedures outlined in the 2006 CBA. The matter was arbitrated, and the Union was awarded wage increases that had accrued since August 2011. The Town refused to pay, and the Union filed a complaint with the PELRB, alleging unfair labor practice contrary to RSA 273-A:5 and seeking enforcement of the arbitrator’s award.

The PELRB sided with the Town, concluding that the arbitrator’s award violated public policy, “namely the need for approval by the local legislative body of the expenditure of public monies to fund benefits like step increases for bargaining unit employees both during a contract’s express term and during any interval between collective bargaining agreements.” The Union appealed.

As a preliminary matter, the Court ruled that the PELRB had the authority to overrule the arbitrator’s award, because enforcement would have violated public policy “as expressed in controlling statutes, regulations, common law, and other applicable authority[.]”

The Court then reviewed some of the controlling law. “When a CBA ends, so do the benefits, including cost items, that were acquired through collective bargaining.” Alton School Dist., (1995). “In the absence of a current CBA, the parties’ obligations to one another [are] governed by the doctrine of maintaining the status quo.”

“We have consistently held that ‘[t]he status quo doctrine does not require payment of step increases after a CBA expires.’” Laconia Patrolman Assoc. (2013). The Court ultimately held that in the absence of an automatic extension, a “past practice of granting step increases during the status quo period cannot, as a matter of law, render such increases a binding term and condition of public employees’ employment.” The Court stated that “because the decision to grant the step increases was discretionary, the [Town] remained free to rescind them.”

Molan, Milner & Krupski of Concord (John Krupski on the brief and orally), for the Petitioner; Drummond Woodsum & MacMahon of Portsmouth (Mark T. Broth and Laurel A.V. McClead on the brief, and Mr. Broth orally), for the Respondent.

Constitutional Law/Civil Procedure
NH Bank Commissioner, as Liquidator for Noble Trust Company v. Cecil Sweeney
No. 2013-348
Oct. 24, 2014
Affirmed and remanded
  • Whether the State of New Hampshire can exercise personal jurisdiction over non-resident investors for the purpose of setting aside transfers of money from Noble to the investors as a result of their connection to a “Ponzi” scheme run by Noble Trust.

The NH bank commissioner filed a petition against Noble Trust, alleging that it was involved in a “Ponzi” scheme “in which Noble used new investors’ money to cover the losses of earlier investors.” The petition sought to set aside transfers of money from Noble to certain non-resident investors, impose constructive trusts, and recover for unjust enrichment and conversion. The non-resident investors moved to dismiss based on lack of personal jurisdiction. The trial court denied the motion. This appeal followed.

The Court undertook a two-part analysis. “First, the State’s long-arm statute must authorize such jurisdiction. Second, the requirements of the federal Due Process Clause must be satisfied.” The Court answered the first question in the affirmative by citing to RSA 510:4(I). The Court ruled that each of the non-resident investors transacted business in the State when they opened their accounts with Noble, a Manchester-based, non-depository banking institution.

The Court moved on to the due process analysis and stated that “[u]nder the Federal Due Process Clause, a court may exercise personal jurisdiction over a non-resident respondent if the respondent has minimum contacts with the forum, such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Kimball Union Academy (2013). The Court explained the difference between “general” (continuous and systematic contacts) and “specific” (cause of action relates to respondent’s forum-based contacts) jurisdiction, and clarified that it viewed this situation as a case of specific jurisdiction.

The Court explained that “in determining whether the exercise of specific personal jurisdiction over the respondents comports with due process, we examine whether: (1) the contacts relate to the cause of action; (2) the respondents have purposefully availed themselves of the protection of New Hampshire’s laws; and (3) it would be fair and reasonable to require the respondent’s to defend the suit in New Hampshire.”

The Court found that the cause of action arose out of the non-resident investor’s contacts with New Hampshire because “the respondents entered into an agreement and invested money with Noble, a New Hampshire entity.” In addition, the Court found the existence of “plus” factors, which make a finding of jurisdiction more likely. Staffing Network, (2000). For example, the agreement the respondents signed with Noble contained a choice-of-law provision specifying that it would be enforced in New Hampshire. The Court found that “the respondent’s purposely availed themselves of the protections of New Hampshire law” because the non-resident investors in this case voluntarily placed money with a New Hampshire-based company.

The Court disagreed with the respondent’s contention that they were merely passive investors, citing the fact that each maintained their accounts for a “prolonged period of time, engaged in multiple communications with the entity that held the account, and had some authority to direct account activities, such as withdrawing some or all of the funds or having funds wired into another account.”

The Court next analyzed the third due process requirement, “that it must be fair and reasonable to require the respondent’s to defend the suit in New Hampshire.” The Court noted that this analysis requires an examination of the five so-called “gestalt factors,” which consider: the burden on the respondent; the forum state’s interest in adjudicating the dispute; the petitioner’s interest in obtaining convenient and effective relief; the interstate judicial system’s interest in obtaining the most efficient resolution of controversies; and the shared interest of the several states in furthering fundamental substantive social policies.” Vt. Wholesale Bldg. Prods. (2006). The Court examined these factors and determined that “it is fair and reasonable to require the respondents to defend this suit in New Hampshire.”

Ann M. Rice deputy attorney general (Peter C.L. Roth, senior assistant attorney general, on the brief and orally), and Sheehan Phinney Bass & Green, of Manchester (Christopher M. Candon on the brief), for the Petitioner; Cleveland, Waters and Bass, of Concord (William B. Pribis on the brief), and Law Offices of Robert A. Stolzberg, of Boston, Massachusetts (Robert A. Stolzberg on the brief and orally), for Respondents John Sinanis and Stylianos Sinanis; CullenCollimore, of Nashua (Brian J.S. Cullen on the brief and orally), for Respondents Ivan Green, Mary Green, Susan Kelly (f/k/a Susan Fry Hare), Frank Arnone, Charles Carlson, Webster Dean, Tom Langel, DeeAnn Langel, Ardith Neustaeder, Darwin Schweitzer, Sharon Schweitzer, and Sharp Enterprises.

Constitutional/Election Law
NH Attorney General v. Bass Victory Committee
No. 2013-469 Oct. 15, 2014
  • Whether the trial court erred when it ruled that RSA 664:16-a is preempted by the Federal Election Campaign Act because push-polling is a campaign expenditure and the FECA regulates the required disclosures associated with campaign expenditures

The Court described the relevant facts as follows: In September 2010, the AG’s office received information regarding polling telephone calls made to New Hampshire residents that were described as containing negative content about US congressional candidate Ann McLane Kuster. The AG investigated, and concluded that the Bass Victory Committee had engaged in “push-polling,” as defined in RSA 664:2(XVII), without complying with the disclosure requirements set forth in RSA 664:16-a.

The AG filed a petition in Superior Court seeking statutory civil penalties pursuant to RSA 664:21. The Committee moved to dismiss on the ground that the state statute is preempted by the Federal Election Campaign Act (FECA) and its disclosure requirements. The trial court agreed. This appeal followed.

The Court began its analysis with a general discussion of federal preemption principles, citing the Supremacy Clause of Article VI as the source of the power and explaining that “[c]onsideration of the issues arising under the Supremacy Clause starts with the assumption that the historic police powers of the States are not superseded by Federal Act unless that is the clear and manifest purpose of Congress.”

The Court determined that “[h]ere, the version of RSA 664:16-a in effect at the time the AG brought this action required the Committee to disclose that the telephone calls were ‘being made on behalf of, in support of, or in opposition to a particular candidate for public office, identify that candidate by name, and provide a telephone number from where the push-polling is conducted.’ RSA 664:16-a(I). The effect of requiring such disclaimers is to reveal the identity of the sponsor of the telephone calls, i.e., to disclose who is paying for the calls. In this way, RSA 664:16-a imposes a disclosure requirement on campaign expenditures related to the election of a candidate for federal office.”

The Court concluded that RSA 664:16-a, as applied to a federal candidate or political committee, is preempted by the FECA.

Joseph A. Foster, attorney general (Anne M. Edwards, associate attorney general, and Brian W. Buonamano, attorney, on the brief, and Mr. Buonamano orally), for the New Hampshire Attorney General; Douglas, Leonard & Garvey, of Concord (Charles G. Douglas III and Jason Major on the brief, and Mr. Douglas orally), for Bass Victory Committee.

Criminal Law
State v. Myles Webster
No. 2013-079
Oct. 15, 2014
  • Whether the police violated defendant’s right to due process by releasing a booking photo to the media hours before arraignment, given the extensive media coverage and the fact that witnesses had yet to identify him
  • Whether the trial court violated defendant’s right to due process and to a fair and impartial jury when it denied his motion for a change of venue after also denying his request for individual, attorney-conducted voir dire and additional peremptory challenges

On March 21, 2012, Manchester police officer Daniel Doherty was shot while pursuing a fleeing suspect. The defendant, Myles Webster, was apprehended that evening, and the police released his booking photo to the media a few hours before the arraignment the next morning.

At trial, Doherty testified that at the time of the shooting he could clearly see Webster’s face because Webster was within 2-3 feet of Doherty when he stopped shooting. Doherty also admitted that he had seen photographs of Webster on TV shortly after the incident. Two other eye witnesses who identified Webster as the shooter had seen Webster’s booking photograph on television shortly after the incident.

Before trial, Webster moved to suppress the out-of-court identifications as unnecessarily suggestive. He also moved to suppress the in-court identifications as being tainted by the unnecessarily suggestive out-of-court identifications. Finally, he moved to suppress the initial in-court identifications of several other witnesses because they were not first asked to identify Webster in a photo array or lineup, and their memories were affected by pervasive media coverage. Webster argued that admission of these various identifications violated his state and federal rights to due process.

Citing Perry v. New Hampshire (2012), the Court explained that had the out-of-court identifications been the result of an impermissibly suggestive identification procedure arranged by law enforcement, it would be necessary to conduct a pretrial hearing to evaluate the reliability and admissibility of the identifications using the test set forth in Neil v. Biggers (1972).

In this case, however, the Court concluded that although law enforcement may have disseminated the photograph(s) to the media, this did not constitute state action within the meaning of Biggers because there was no evidence the police “orchestrated” the viewing of the photographs.

Therefore, due process required only that Webster be permitted to test the reliability of the various out-of-court and in-court identifications “through the rights and opportunities generally designed for that purpose, notably... vigorous cross-examination, protective rules of evidence, and jury instructions on both the fallibility of eyewitness identification and the requirement that guilt be proven beyond a reasonable doubt.”

The Court also held that Biggers does “not apply to in-court identifications not preceded by an impermissibly suggestive pretrial confrontation” and that “the remedy for any alleged suggestiveness... is cross-examination and argument.” Finally, the Court held that it was not an error to deny Webster’s motion for change of venue and for individual, attorney-conducted voir dire and for additional peremptory challenges, because although there was extensive media coverage, it “consisted of straightforward, unemotional factual accounts of events and of the progress of investigations,” and “diminished substantially” since the time of the incident.

Additional peremptory challenges were not necessary because Webster did not attempt to “demonstrate that the community from which the jury was drawn was so hostile, as a result of pervasive media coverage, that drawing an unbiased jury was impossible.”

Joseph Foster, attorney general (Stacey Pawlik, assistant attorney general, on the brief and orally), for the State; David Rothstein, deputy chief appellate defender, of Concord, on the brief and orally, for the defendant.

State v. Kevin Rawnsley
No. 2013-512
Oct. 17, 2014

  • Whether the trial court committed plain error in failing sua sponte to strike testimony that arguably should have been excluded by the marital privilege

On Feb. 16, 2008, a store clerk in Pittsfield was robbed by a bat-wielding, masked man. A passerby saw the suspect flee and described the suspect’s clothing, but no suspect was identified until 2012 when the defendant’s ex-wife came forward to offer information about the robbery in exchange for consideration in a criminal case pending against her.

At trial, the ex-wife testified that at the time of the robbery she was married to defendant Kevin Rawnsley and that on the night in question, during the relevant time-frame, she saw Rawnsley leave their apartment dressed in clothing similar to what the passerby had described and carrying a bat. When he returned, he pulled some small bills from his sweatshirt. When she confronted him about the robbery, he admitted doing so and described the details of the crime.

At trial, defense counsel did not object to the testimony because his theory of the case was that the woman was lying and he was not “concerned about what comes out of her mouth.” On appeal, the defendant argued that it was a mistake to admit the testimony but because he did not object based on marital privilege, and the trial court did not sua sponte strike the testimony, the Court should apply the plain error rule.

The Court explained that the “rule sets forth four requirements: (1) there must be an error; (2) the error must be plain; (3) the error must affect substantial rights; and (4) the error must seriously affect the fairness, integrity, or public reputation of the judicial proceedings.” State v. Guay (2013).

The state argued that the ex-wife’s testimony about Rawnsley’s conduct was not privileged because only acts attributable to the husband-wife relationship are covered by the marital privilege. Moreover, the state argued that Rawnsley’s admissions were not covered by the privilege because he waived the privilege when he did not object. The defendant disagreed.

The court declined to address whether the marital privilege applied in the case because, as the court stated, “[w]e need not address these arguments because we conclude that any alleged error was not plain.”

The court ruled that because it has never held that a trial court must sua sponte strike a witness’s testimony, any alleged error could not be plain. Quoting U.S. v. Smith, (11th Cir. 2006), the Court went on to explain that “[i]t is one thing to say that evidence, if objected to, should have been excluded; it is quite another to say that admission of evidence over no objection is error in some abstract sense. The problem with the second scenario is that defense counsel can waive evidentiary restrictions, and often has legitimate strategic reasons for doing so. Under those circumstances, reviewing admission of evidence for plain error can serve to transform defense counsel’s strategic decisions into trial court errors. In this way, trial counsel’s sound strategy becomes plain error at appellate counsel’s urging.” (Internal citations and ellipses omitted).

Since trial counsel did not object because his theory of the case was that the ex-wife was lying, the Court concluded that this was a case similar to that described above, and that any alleged error was not plain.

Joseph Foster, attorney general (Heather Flanner, attorney, on the brief and orally), for the State; Christopher Johnson, chief appellate defender, of Concord, on the brief and orally, for the defendant.

State v. Richard Paul
No. 2013-426
Oct. 24, 2014
  • Whether RSA 519:23-a merely codifies existing law regarding jury nullification or whether it required the trial court to allow the defendant to inform the jury that it has the right to judge the law or the right to ignore the law

The defendant was convicted of three counts of selling marijuana, one count of possession with intent to distribute marijuana, and one count of sale of a substance represented to be LSD. At trial, the defendant agreed to the following jury instruction: “We are a nation governed by laws. You should follow the instruction on the law as I give it to you, including the instruction that you should find the defendant guilty if the state has established guilt beyond a reasonable doubt. However, if finding the defendant guilty is repugnant to your sense of justice, and you feel that a conviction would not be a fair or just result in this case, it is within your power to acquit even if you find the state has met its burden of proof.”

The defendant also argued that two provisions of the standard instructions given to jurors in criminal cases tended to negate such an argument. The first is the instruction which states, “You must follow the law as I explain it regardless of any opinion you may have as to what the law ought to be.” The second is the so-called Wentworth instruction, which states: “If you have a reasonable doubt as to whether the State has proved any one or more of the elements of the crime charged, you must find the defendant not guilty. However, if you find that the State has proved all of the elements of the offense charged beyond a reasonable doubt, you should find the defendant guilty.” (emphasis added by the Court).

During closing arguments, the defendant urged the jury to acquit, even if it thought the state proved its case beyond a reasonable doubt. Defense counsel also asked the jury to ask themselves “whether this law makes sense to you, that on one hand something has no medical application, yet, on the other hand there are several governments who are allowing it to be medically applied.”

The state argued that the jury should find the defendant guilty. The trial court instructed the jury that it “should follow the law as I explain it regardless of any opinion you may have as to what the law ought to be.” It also gave the Wentworth instruction. The defendant claimed that the trial court’s instructions “contradicted and undermined the defendant’s explanation of the jury’s nullification right as laid out in RSA 519:23-a.”

The Court examined the plain language of the statute and the preamble to the session law enacting the statute and noted that “neither contains language that purports to impose upon the trial court any obligation to instruct the jury as to jury nullification.”

In addition, both the statute and preamble contain language about “informing the jury of its right to judge the application of the law in relation to the facts” and not that the “jury is to have the right to sit in judgment of the law...”

The court then examined the legislative history of the statute and the various iterations, the last of which contained only the requirement that the court permit the defendant to inform the jury of its right to judge the facts and the application of the law in relation to the facts in controversy. RSA 519:23-a (Supp. 2013).

Finally, the Court concluded that “construing RSA 519:23-a as merely codifying existing law, rather than conferring on the jury a right to judge or nullify the law, is consistent with the doctrine of constitutional avoidance[,]” a doctrine that requires the Court to construe a statute “so as to avoid bringing it into conflict with the constitution.”

Citing several cases from the 19th century, the Court concluded that “[w]ere RSA 519:29-a interpreted to grant juries the right to judge or nullify the law, there would be a significant question as to its constitutionality.”

The Court concluded by stating that “[n]othing in RSA 519:23-a required the trial court to permit the defendant to make [the argument about whether the law makes sense], asking the jury to judge the law itself. Nor did the statute require the court to instruct the jury that it ‘should’ rather than ‘must’ follow the court’s instructions. Thus, the trial court gave the defendant the benefit of an argument and an instruction to which he was not entitled. He therefore is in no position to complain.”

Furthermore, even if the trial court’s instructions undermined the defendant’s nullification argument, it did not matter, because the defendant had no right under the statute to make such an argument.

Joseph Foster, attorney general (Nicholas Cort, assistant attorney general, on the brief and orally), for the State; Law Office of Joshua L. Gordon, of Concord (Joshua Gordon on the brief and orally), for the defendant.

Family Law
IMO Susan Spenard and David Spenard
No. 2013-343
Oct. 17, 2014
Affirmed in part, vacated in part, and remanded
  • Whether the trial court erred by (1) imputing income to her of $4,000 per month for purposes of child support and alimony, (2) denying her request to reopen the case based on newly discovered medical evidence, (3) not accounting for two promissory notes, one of which the respondent sold prior to the final hearing, in dividing the marital estate, and (4) misidentifying two investment accounts, and awarding the respondent an interest in one of the accounts

The parties were married in 1998 and had one child. Both parties worked during the marriage. The petitioner worked as an entertainer throughout the parties’ relationship but cut back on her hours when the child was born. The respondent worked in the real estate business, which was cyclical and had declined recently. The parties filed for divorce in 2010, and a final decree was issued in early 2013.

With regard to the imputing of income, the Court first explained that RSA 458-C:2(IV)(a) does not require an express finding of voluntary unemployment. IMO Donovan & Donovan (2005). The Court concluded “that there was more than ample support for the trial court’s implied finding that the petitioner was voluntarily unemployed, and its express finding that she had the ability to earn $4,000 per month.”

Although the petitioner testified that she had not worked during the six months leading up to the final hearing due to health issues, she did not present any medical testimony at the final hearing. Moreover, during an interview with a private investigator, she claimed she could make $1,200 to $1,600 per night. The petitioner also spent large sums of money on discretionary expenses during the same six-month period.

After the final decree was issued, the petitioner moved to reopen the case to present medical evidence regarding her health issues. She argued that she was not able to obtain the evidence prior to the final hearing because the respondent had failed to provide health insurance pursuant to temporary orders.

The record reflected, however, that the respondent had obtained health insurance for the petitioner more than seven months before the final hearing. Therefore, the trial court could have reasonably determined that the petitioner was at fault for failing to obtain a medical diagnosis prior to trial.

Because the respondent failed to disclose several promissory notes on financial affidavits filed in the case, the Court vacated the trial court’s property distribution and remanded for findings and rulings consistent with its order. Because the Court vacated the property distribution, it declined to address the issue regarding the misidentification of two investment accounts and ruled that the petitioner could raise this issue below on remand.

The Court also indicated that on remand the trial court should make findings and rulings regarding petitioner’s claim that her parents had an ownership interest in one of her investment accounts, and that the trial court, therefore, lacked jurisdiction to invalidate her parent’s interests by awarding part of the account to respondent.

Bossie & Wilson, of Manchester (Jon Strasbuger, on the brief), for the petitioner; David Spenard, self-represented party, by brief.

Real Estate
J. Albert Lynch v. Town of Pelham
No. 2013-064
Oct. 24, 2014
Reversed and Remanded
  • Whether the trial court erred when it ruled that certain restrictive covenants were appurtenant and personal and dismissing an action to enforce because the trustee lacked standing

In February 1985, J. Albert Lynch, as trustee for the FIN-LYN Trust, purchased a 24-acre parcel of land in the center of Pelham.

The trust purchased the property with the intent of selling it to the town as a potential site for the construction of municipal buildings. The town agreed to purchase 18 of the 24 acres. In March 1985, the Pelham Planning Board signed and approved a subdivision plan, which depicted an 18-acre parcel and six one-acre building lots.

In May 1985, the trustee sold the six one-acre building lots. On May 31, 1985, the trustee sold the remaining 18 acres with buildings to be built in the colonial style with pitched roofs – no flat or single-pitch roofs permitted. The deed did not specify whether the restrictions were intended to be in gross or appurtenant, and also did not specify the means for enforcing the covenants.

In 2012, the town built a new fire station on the 18-acre parcel. Part of the fire station had a flat roof. In April 2012, the trustee filed a writ seeking to enforce the restrictive covenants.

The trial court dismissed the trustee’s complaint because it found that the trustee no longer owned land benefitting from the covenants, and therefore lacked standing to enforce them. The trial court relied on Shaff v. Leyland, (2006) and held that “any deeded covenant that is not clearly labeled “in gross” (the benefit or burden of a covenant is not tied to ownership or occupancy) is an “appurtenant” covenant (the rights and obligations of a covenant are tied to ownership or occupancy).

The Court stated that in Shaff it observed that “the general rule of construction favors appurtenant servitudes over servitudes in gross in part to prevent fortune hunters and mischief makers from buying up old covenant benefits for nuisance value without also buying the land they were intended to benefit.”

The Court stated, however, that Shaff did not create a per se rule requiring all in gross covenants to be expressly stated as such in the deed. The Court held that a “servitude should be interpreted to give effect to the intention of the parties ascertained from the language used in the instrument, or the circumstances surrounding creation of the servitude, and to carry out the purpose for which it was created.”

Focusing on the parties’ intent, the Court reasoned that if the covenants in this case had been appurtenant, they would have been void from the beginning because the trustee no longer owned any of the adjacent property at the time the land was conveyed to the town. The Court also looked at some other covenants in the deed, which were specifically appurtenant, and reasoned that if the parties intended the covenant in question to be appurtenant, they would have said so.

The Court went on to acknowledge and adopt Section 8.1 of the Restatement (Third) of Property: Servitudes, which states that “a person who holds the benefit of a covenant in gross must establish a legitimate interest in enforcing the covenant.” This requirement, the Court stated, is “intended to provide a substitute means of preventing opportunistic use of servitude violations for extortion or other improper purposes.”

Finally, the Court, again citing Section 8.1 of the Restatement, held that “the Trustee need not demonstrate economic harm, but rather, that he seeks enforcement to advance the purpose for which the servitude was created” – in this case, aesthetics. Based on the foregoing, the Court remanded the case so “the trial court to determine whether the fire station violate[d] the restrictive covenants, and, if so, the nature of the remedy.”

Cronin, Bisson & Zalinsky, of Manchester (John Cronin and Daniel Muller Jr. on the brief, and Mr. Cronin orally), for the plaintiff; Donahue, Tucker & Ciandella, of Exeter (Katherine Miller on the brief and orally), for the defendant.

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