Bar News - December 17, 2014
Supreme Court At-a-Glance
By: Summarized by James F. Allmendinger
James A. Conrad v. NH Department of Safety & a.
Nov. 6, 2014
- Whether in the face of false imprisonment and due process claims by a state trooper the Department of Safety and state police commander are entitled to immunity
This is a case of an employee’s marital problems undermining his ability to do his job. Plaintiff, a state trooper, “was experiencing marital difficulties” that led to plaintiff’s being warned against “bringing his personal life into his work life.” The difficulties affected the plaintiff, his spouse, and his employer and spiraled out of control over a period of several months.
Concerns about the employee led to a two-hour detention at state police headquarters that ended only when the employee was arrested by the Concord Police Department. That gave rise to claims of false imprisonment and denial of due process under 42 USC §1983 against the Department of Safety and the commander of the state police professional standards board. The Court concluded that the state police acted reasonably under decidedly difficult circumstances.
The Court’s legal discussion is a primer on the three types of immunity: sovereign, official, and qualified. These various immunities are based on the recognition that certain essential, fundamental activities of government must remain immune from tort liability so that government can function. The Court distinguishes among the three as follows:
“Sovereign immunity protects the State itself from suit in its own courts without its consent, and shields it from liability for torts committed by its officers and employees. Qualified immunity and official immunity provide immunity for wrongful acts committed [by officials and employees] within the scope of their government employment. Qualified immunity shields against lawsuits alleging constitutional violations, such as claims brought under 42 USC §1983. Official immunity shields against lawsuits alleging common law torts, such as negligence. (Citations and quotations omitted; emphasis added.)”
Official and qualified immunity do, ultimately, turn on the reasonableness of the state actor’s conduct, and the Court rejected plaintiff’s argument that a jury should decide the reasonableness question in cases of qualified and official immunity.
In cases of sovereign immunity, the Court turns to RSA 541-B: 19, I (d), the statute waiving the state’s immunity in some but not all cases. Here again, the touchstone is reasonableness, because if the conduct is reasonable the statute does not waive immunity in false imprisonment cases: “provided that the employee whose conduct gives rise to the claim reasonably believes, at the time of the acts or omissions complained of, that his conduct was lawful, and provided further that the acts complained of were within the scope of official duties of the employee for the state.”
The Court finds the state police reasonably believed their actions were reasonable and within the scope of official duties in the concededly difficult circumstances of this case.
Douglas, Leonard & Garvey, of Concord (Charles G. Douglas III and C. Kevin Leonard on the brief, and Mr. Douglas orally), for the plaintiff. Michael A. Delaney, attorney general (Laura E. B. Lombardi, assistant attorney general, on the brief and orally), for the defendants.
The State Of New Hampshire v. Shawn Carter
Nov. 25, 2014
Reversed and remanded
- Whether statutes prevail over conflicting court procedural rules where the statute arguably compromises core adjudicatory functions of the courts
The defendant was charged with four counts of knowing or reckless second degree murder. The defendant filed a motion for pre-indictment discovery, relying on RSA 604:1-a in support of the motion. The State objected.
The court below, relying primarily on Opinion of the Justices (Prior Sexual Assault Evidence), 141 NH 562 (1997), found RSA 604:1-a unconstitutional because it is a procedural statute that conflicts with Superior Court Rule 98, a rule that establishes, among other things, time limits for discovery in criminal cases. That statute, held the court below, usurps the essential power of the judiciary to control its own proceedings and therefore is unconstitutional.
On appeal, the defendant argues that RSA 604:1-a does not violate Part I, Article 37 of the New Hampshire Constitution because: (1) the statute (a) does not usurp or impair an essential function of the judiciary, and (b) can be read in harmony with Rule 98; and (2) to the extent there is a conflict between the statute and the rule, the statute must prevail. The Court agreed with the defendant on both points.
The Court exhaustively reviews the history of disputes regarding court procedures and legislation, and concludes that only if legislation “compromise[s] the core adjudicatory functions of the judiciary to resolve cases fairly and impartially and to protect the constitutional rights of all persons who come before the courts” will the Court invalidate that legislation. Since the statute in dispute here does not meet that test, the court below erred in concluding that that statute infringed upon the power of the judiciary to control its own proceedings.
Joseph A. Foster, attorney general (Stacey L. Pawlik, assistant attorney general, on the brief and orally), for the State. Thomas Barnard, senior assistant appellate defender, of Concord, on the brief and orally, for the defendant.
United States of America v. Ryan Howe
November 13, 2014
- Whether a defendant eligible to serve on a jury has had his civil rights restored for purposes of a federal possession of a firearms charge where the defendant is eligible to have an earlier conviction annulled, but the earlier conviction has not been annulled
The defendant, Ryan Howe, was indicted under federal law in August 2012 for possession of a firearm by a felon. He moved to dismiss that count on the ground that he was not a “felon” under an exception provided for “[a]ny conviction which has been expunged, or set aside or for which a person . . . has had civil rights restored.” The First Circuit has held that “the civil rights that must be restored to trigger the exception are the rights to vote, to hold public office, and to serve on a jury.” (Citations omitted.)
Here the parties agreed that defendant’s rights to vote and to hold public office were restored by operation of state law before the date of the federal offense. The parties disagreed as to whether the defendant was eligible to serve on a jury under New Hampshire’s juror qualification statute. RSA 500-A:7-a, V . That statute provides that: “A juror shall not have been convicted of any felony which has not been annulled or which is not eligible for annulment under New Hampshire law.” (Emphasis added.) The federal district court agreed with the defendant’s reading of RSA 500-A:7-a, V and dismissed the felon in possession charge. The United States appealed to the First Circuit, which certified the question to the New Hampshire Supreme Court.
The question is narrower than that, because the United States conceded that the defendant’s conviction is eligible for annulment under New Hampshire law. Thus, the only question before the Court was: given that the defendant has not obtained annulment of his conviction, despite his undisputed eligibility for annulment is he nevertheless qualified to serve as a juror? On such distinctions do cases sometimes turn.
The Court’s review of the question begins with its observation that the statute on annulment is ambiguous. Where a statute is ambiguous, the Court engages in a review of the legislative history. The legislative history shows that RSA 500-A:7-a, V added a disqualification from jury service that had not previously existed in New Hampshire law, and in that way the statute shrank the universe of available jurors. Nonetheless, the legislative history indicates that RSA 500-A:7-a was also intended to “rectify the problem” of dwindling jury pools. That, in turn, means it is reasonable to read the addition of the eligible-for-annulment language as an attempt by the legislature to broaden the pool of potential jurors to include those convicted felons who, although not having actually obtained an annulment, were nevertheless thought to have been “sufficiently rehabilitated to serve as a juror.” Thus the Court concluded that the defendant’s interpretation of RSA 500-A:7-a, V is supported by the statute’s legislative history. (Citations omitted.)
John P. Kacavas, United States Attorney (Seth R. Aframe, assistant United States attorney, on the brief and orally), for the petitioner. Behzad Mirhashem, assistant federal defender, of Boston, Mass., and Jeffrey S. Levin, assistant federal defender, of Concord (Mirhashem and Levin on the brief, and Mirhashem orally), for the defendant.
In Re: G.B.
Nov. 7, 2014
- Whether the termination of the father’s parental rights is appropriate following the father’s conviction of attempt to commit murder and the father’s failure to support, educate and care for the child because the father is serving a prison term
In September 2008, the father was arrested after making arrangements with an undercover state trooper to pay to have the child’s mother murdered. The father pleaded guilty to a class A felony indictment for criminal solicitation to commit murder and is serving an 8–20 year prison sentence, with an early release date of Aug. 16, 2016. After the child’s mother died, guardianship of the child was apparently granted to his maternal grandparents. The grandparents had their own difficulties, and the child’s cousin and his spouse were granted temporary custody. Following the death of both grandparents, the cousin and his wife were granted permanent guardianship and they subsequently filed a petition against the father seeking termination of his parental rights.
The district court granted the petition and the father appealed, arguing that: (1) the trial court lacked jurisdiction to terminate his parental rights; (2) the petitioners did not prove beyond a reasonable doubt that the father failed to support the child despite being financially able to do so; (3) the evidence did not support termination of the father’s parental rights on the ground of abandonment; and (4) termination of the father’s parental rights was not in the child’s best interest when it was contrary to his deceased mother’s wishes and was not necessary for the child’s welfare.
The Court concludes that the court below had original and continuing jurisdiction under several statutes, disposing of the first issue. The next two issues were are not, in the Court’s view, a basis for reversal of the decision below even if proved. And finally, even if the mother’s wish was for the father to have a continuing relationship with the child, the test is what is in the best interests of the child, not what a parent may have wished. The Court agreed with the court below that a lot had changed since the child’s mother had tried to reconcile with the father, and now the child was thriving in the custody of his guardians. The Court also agreed with court below correctly concluded that it was necessary to terminate the father’s parental rights in order to protect the child in the future. The takeaway? Trying to murder mom doesn’t get you any favors.
Valerie C. Raudonis, of Nashua, by brief and orally, for the petitioners. Lucinda Hopkins, of Manchester, by brief and orally, for the respondent.
In The Matter Of Ismail Yaman And Linda Yaman
Nov. 7, 2014
- Whether a properly entered custody order of foreign registry is entitled to enforcement under New Hampshire’s Uniform Child Custody Jurisdiction and Enforcement Act
A Turkish man married an American woman in 2000. She became a Turkish citizen, and the couple had two children, one born in the United States and the second born in Turkey, after the couple relocated to Turkey. Later, the wife suspected her husband of abusing their elder child, the couple separated, and the wife sought a divorce in Turkish courts. The Turkish courts conducted a thorough investigation of the child abuse charges, found them meritless, and granted the couple’s divorce. However, the Turkish court also awarded sole custody of the children to the father. The mother unsuccessfully appealed the custody decision through the Turkish court system.
Following the denial of her final appeal in Turkey, the mother took her children and fled the country. By a circuitous route she relocated to New Hampshire, a fact discovered by her former husband some 18 months later. The former husband then filed a petition to regain custody of his children in federal district court in New Hampshire under the Hague Convention and the International Child Abduction Remedies Act. The federal district court dismissed that petition, a result affirmed on appeal to the First Circuit Court of Appeals.
Meanwhile, the federal district court declined to exercise supplemental jurisdiction over the father’s state law claim under New Hampshire’s Uniform Child Custody Jurisdiction and Enforcement Act, RSA chap. 458-A (the Act). The federal court dismissed that claim without prejudice, allowing the father to pursue his custody claim under state law in state court. The state district court concluded that the Turkish divorce proceedings were entitled to enforcement under the Act and ordered the children returned to the father’s custody. The mother appealed from that decision, while the state district court agreed to stay its order pending the appeal to the New Hampshire Supreme Court.
The Court initially reviews the purposes of the Act, one of a number of laws promulgated by the National Conference of Commissioners on Uniform State Laws. Those purposes include deterring abductions of children; avoiding relitigation of custody decisions; and facilitating the enforcement of custody decrees of other states. To further those purposes, deference is given to foreign proceedings, which will not be disturbed unless, among others, it can be shown that the ruling was made without notice or an opportunity to be heard or that the child custody laws of the foreign jurisdiction violate fundamental principles of human rights.
The Court discusses the first issue, the right to be heard, at length and concludes that that right is not fixed solely by New Hampshire practice but must also take into account the different customs, practices and standards of other jurisdictions. Here the mother was present throughout the lengthy Turkish proceedings, was represented by Turkish counsel, and now complains only that she did not have simultaneous translation during much of the proceedings, proceedings conducted in Turkish. The Court refused to find that that one failing in the circumstances of this dispute amounts to a denial of the opportunity to be heard.
The Court then turns to second issue, the problem of defining “fundamental human rights.” That term not defined in the Act. The mother argues that because Turkish law does not provide for joint custody, giving the father sole custody in this dispute, she is denied a fundamental right. The Court does not see that to be a violation of principles of human rights, particularly in view of the extensive visitation rights the Turkish courts gave the mother.
The Court also rejected the mother’s final arguments, that restoring custody to the father would not be in the best interests of the children; that the New Hampshire legislature did not appreciate the problems that passage of the Act could cause; that she was denied an evidentiary hearing in state court; and that the state court should have followed different procedures, including communicating with the Turkish courts. The Supreme Court rejects all of those arguments, concluding—and I do not do the Court’s careful analysis its due here—that the Act favors child custody determinations made by foreign courts even if those courts are not perfect and the legislature has spoken.
From this complicated case involving issues unfamiliar to most New Hampshire practitioners, or at least to me, I take away a practice pointer closer to home: do not argue on appeal that you have been denied an evidentiary hearing if you agreed to proceed on offers of proof. That argument will not work, because you could have called your witnesses. So, call your witnesses, no matter the press of other things, or be prepared to live with offers of proof on appeal.
Ropes & Gray, of Boston, Massachusetts (Kristen A. Fiore and Daniel V. Ward on the brief, and Mr. Ward orally), for the petitioner. Vitt Brannen & Loftus, of Norwich, Vermont (Geoffrey J. Vitt, Barney L. Brannen, John B. Loftus, and Sarah J. Merlo on the brief, and Mr. Brannen orally), for the respondent.
Susan R. White & a. v. Vermont Mutual Insurance Company & a.
Nov. 21, 2014
- Whether an adult son is “in residence” at his mother’s New Hampshire house for purposes of liability coverage under his mother’s homeowners insurance policy when his primary residence is in another state
This case arose when a dog owned by Matthews caused an accident that injured Susan White on July 3, 2011. The incident occurred while Matthews was staying with friends at a home owned by his mother in Moultonborough. The Moultonborough home was covered by an insurance policy issued to Matthews’s mother by Vermont Mutual. The policy defined an “insured” to include “residents of your household who are... your relatives.” Following the 2011 incident involving Matthews’ dog, the petitioners sought a declaratory judgment that Vermont Mutual is responsible for any damages they may recover from Matthews. After a bench trial, the trial court concluded Matthews was not a resident of his mother’s household and denied the petition. This appeal followed.
We do not learn what the incident was, though cautionary words for dog owners are always appropriate, especially when it comes to homeowners insurance. We do learn that Matthews does live and has most of his connections in Massachusetts even though he visits his mother’s house in Moultonboro and is still licensed to drive and registered to vote in New Hampshire. The Court applies its earlier cases to conclude that “resident” means primary residence, and therefore Matthews is not a “resident relative” insured for purposes of his mother’s Moultonboro homeowners insurance policy.
Nixon, Vogelman, Barry, Slawsky & Simoneau, of Manchester (Leslie C. Nixon on the brief and orally), for the petitioners. Primmer Piper Eggleston & Cramer, of Manchester (Gary M. Burt on the brief and orally), for the respondent, Vermont Mutual Insurance Company. Law Office of V. Richards Ward Jr., of Wolfeboro (V. Richards Ward Jr. on the memorandum of law), for the respondent, Charles Matthews.
Amica Mutual Insurance Company v. Beverly P. Mutrie
Nov. 13, 2014
- Whether injuries arising from police executing a search warrant for illegal drug-dealing constitutes an occurrence for purposes of homeowner’s insurance coverage
In this declaratory judgment case involving insurance coverage, the intervenors are four police officers who served on a drug task force. On April 12, 2012, the police officers executed a search warrant at a property in Greenland where Beverly Mutrie’s son lived. During the execution of the search warrant, Mutrie’s son opened fire, wounding the police officers. Mutrie’s son then turned the gun on himself. Although the Court does not say, the four officers were injured in the same 2012 shootout in which Greenland Police Chief Michael Maloney was fatally shot.
The police officers filed a civil suit against Mutrie in July 2012. They alleged that Mutrie was responsible for their injuries because, “with the knowledge, information, and belief” that her son was engaged in criminal activity, she “did recklessly and wantonly allow... criminal activity and conduct to take place at the subject property and otherwise... supported and facilitated [her son’s] criminal activity at the subject property.”
The trial court concluded that the reckless and wanton conduct in which Mutrie was alleged to have engaged – knowingly permitting her son to engage in criminal activity on her property – did not constitute an “occurrence” as required for coverage under the homeowner’s and umbrella insurance policies issued to Mutrie by Amica. The Supreme Court affirmed.
The Court concluded that Amica owed no duty to defend, because Mutrie’s alleged conduct did not constitute an “occurrence” under the policies. Under the relevant provisions in the policies, coverage and the insurer’s duty to defend are triggered only by an “occurrence,” defined as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions, which results, during the policy period, in: a. Bodily injury; or b. Property damage.”
The policies did not define the term “accident.” However, the Court notes that it has defined “accident” to mean “an undesigned contingency, a happening by chance, something out of the usual course of things, unusual, fortuitous, not anticipated, and not naturally to be expected.” Unless the alleged injury is the result of an accident, there is no “occurrence,” and the policies do not provide coverage. Whatever else police searches of drug premises might be, those searches are not accidental occurences.
As a matter public policy, one cannot insure against criminal conduct. This decision fully comports with that public policy, noting that criminal conduct is inherently injurious and outside the scope of coverage of these policies. It is unfortunate, also as a matter of public policy, that the police officers need to seek additional relief as a result of their injuries.
Sulloway & Hollis, of Concord (Sarah S. Murdough on the brief and orally), for the petitioner. Coughlin, Rainboth, Murphy & Lown, of Portsmouth, for the respondent, filed no brief. Boynton, Waldron, Doleac, Woodman & Scott, of Portsmouth (Christopher E. Grant on the brief and orally), for the intervenors.
Labor and Employment Law
Ichiban Japanese Steakhouse, Inc. v. Kymberly Rocheleau, et al.
Nos. 2013-79 and 2013-780
Nov. 13, 2014
- Whether two wait staff were entitled to lost wages and attorney’s fees where the employer’s tip pooling arrangement violated RSA 279:26-b
In August 2010, Ichiban Japanese Steakhouse hired two waitstaff, gave them a thick packet of documents to review, and required them to sign a detailed tip-pooling agreement that gave 60 percent of their tips to other staff. Eight months later, the two resigned and filed charges with the New Hampshire Department of Labor (DOL) seeking unpaid wages from their former employer.
Each had a hearing before DOL; in one of the hearings, the employer’s attorney conceded that if the new hire had not signed the tip-pooling agreement, she would not have been hired as wait staff, but might have been employed in another position. DOL found the tip-pooling agreement was not signed voluntarily and without coercion, as required by RSA 279:26-b, and ruled that the two wait staff were entitled to lost wages and attorney’s fees. The employer appealed first to superior court and then to the Supreme Court. Both upheld DOL’s decision.
The employer argued that the new hires had voluntarily and without coercion signed the tip-pooling agreement, because there was no “coercion” within the meaning of the statute. According to the employer, neither employee was “physically coerce[d]” or “pressure[d]” into signing the agreement. The Court rejected the employer’s suggestion that coercion requires application of physical force. The Court also rejected the employer argument that the employees signed the agreement “voluntarily,” noting that DOL expressly found to the contrary, and the record supported that finding.
Next the employer disputed DOL’s calculations of lost wages. In both cases, the Court found that the back wages awarded by DOL were less than the 60 percent tip-pooling amounts diverted from the waitstaff wages. Therefore, the employer failed to show that DOL made an error of law in calculating the lost wages.
Finally, the employer challenged the award of attorney’s fees, arguing that such fees were not consistently awarded under New Hampshire labor law. The Court concluded that there was no inconsistency in its prior decisions on attorney‘s fees in wage and hour cases and DOL’s aware here was proper. RSA chapter 275—the wage and hour law—is protective legislation, intended to effectuate the broad purpose of protecting employees. Therefore, when a wage claim has been found to be meritorious, a court “should exercise its statutory discretion by awarding reasonable counsel fees, unless the court... finds particular facts that would render such an award inequitable.” (Citation omitted.)
Tarbell & Brodich, of Concord (Friedrich K. Moeckel on the brief and orally), for the petitioner. Law Office of Kenneth J. Barnes, of Concord (Kenneth J. Barnes on the brief and orally), for the respondents.
Appeal of Strafford County Sheriff’s Office & a.
Nov. 13, 2014
- Whether the county committed an unfair labor practice by changing the working conditions of sheriff’s office employees during the period when the a union was seeking an election to represent those employees
Anytime the union comes to town, questions arise as to what an employer can and cannot do in response to the union’s efforts to organize the employer’s employees. In July 2012, the union filed a PELRB petition for the certification for a bargaining unit of employees of the Strafford County Sheriff’s Office. The PELRB approved a bargaining unit composed of the positions of deputy sheriffs, dispatcher, and secretary. Following an election in December 2012, the union was certified as the bargaining unit’s exclusive representative for purposes of bargaining.
In November 2012, prior to the representation election, the union filed a complaint with the PELRB alleging that the county committed an unfair labor practice by changing the terms and conditions of employment of affected employees after the union had filed a representation petition with the PELRB. Following a hearing, the PELRB concluded that the changes made – to the deputies’ schedules, to the rate of pay for outside detail work, and to the manner in which overtime was calculated – were all mandatory subjects of bargaining that the county could not unilaterally change once the union filed its certification petition. The PELRB ordered the county to “restore the affected employees to the status quo ante that existed as of the filing of the certification petition and make them whole.” This appeal followed.
The county argued: (1) that the sheriff had the discretion to change the hours, and nothing should limit that discretion; (2) that changes in the rate of pay for outside detail work were required by a ruling of the United States Department of Labor under federal overtime rules; and (3) that the PELRB made no finding that the sheriff was acting out of hostility to the union.
The Court was not persuaded by the county’s arguments. First, the sheriff’s discretion to change hours is contrary to its duty to bargain with the union over hours, because hours are a mandatory subject of bargaining. In reaching this conclusion, the Court applied its longstanding three part test for determining whether a matter is mandatory subject of bargaining.
Second, federal overtime laws set a “floor, not a ceiling” and nothing prevented the sheriff from both complying with the US DOL requirements and maintaining its existing practices. And third, the Court has not required that an employer’s actions be motivated by anti-union animus where the issue is changes in terms and conditions of employment, because such violations are a refusal to bargain in fact, and that is an unfair labor practice in itself without regard to the employer’s motivation for making the changes.
Soldati Law Offices, of Portsmouth (Lincoln T. Soldati on the brief and orally), for the petitioners. Nolan Perroni Harrington, of Lowell, Mass. (Peter J. Perroni on the brief and orally), for the respondent.
Daryl Dembiec & a. v. Town Of Holderness
Nov. 13, 2014
Reversed and Remanded
- Whether the petitioners — who were building a house – had to exhaust zoning board appeals before going to court and, in turn, whether the zoning board lacked jurisdiction to hear the petitioners’ municipal estoppel claim
In April 2012, when construction of their home was substantially completed, the town’s compliance officer told the petitioners that he would not issue a certificate of compliance for their new home because the existing boathouse contained a dwelling unit, and the applicable zoning ordinance allowed two dwellings on a lot only when they are in the same structure, such as in a duplex. The compliance officer told the petitioners that, before he could issue a certificate of compliance, they would need either to obtain a variance or to remove “all plumbing” from the boathouse.
The petitioners then applied to the zoning board of adjustment for an equitable waiver from the ordinance. Two intervenors objected to the petitioners’ request. The board originally granted the waiver, but on rehearing, denied it. The petitioners then sought a variance, but the board denied that request. The petitioners filed their petition with the court at the same time that they applied to the zoning board for a variance.
In their court petition, the petitioners sought a declaration that, because the Town issued a building permit, it is “estopped from enforcing the one dwelling per unit lot provision of the zoning ordinance as applied to the Property.” They also requested an order requiring the Town to issue certificates of compliance and occupancy for the single family house. The Town moved to dismiss the petition, arguing that the trial court lacked jurisdiction because the petitioners had not appealed the decision of the compliance officer to the zoning board, and, therefore, had failed to exhaust their administrative remedies. The trial court dismissed the petition, and this appeal followed.
The Court began by observing that ordinarily parties must exhaust their administrative remedies before appealing to the courts. However, that requirement is not absolute. When administrative action would be futile, or when the agency lacks authority to act, exhaustion is not required. In this case, the Court concluded that a zoning board of adjustment lacked the jurisdiction to decide municipal estoppel, because zoning boards have only those powers that are expressly conferred upon them by statute or are necessarily implied by those statutes.
Even though a zoning board of adjustment may consider general equitable principles when exercising its discretion to grant a variance or make some other decision within its authority, that does not equate to a general grant of equitable jurisdiction. Here, the claim is that even though the compliance officer correctly interpreted the zoning ordinance, it is inequitable for him to decline to issue a certificate of compliance because the petitioners reasonably relied upon the building permit issued by the Town. That type of equitable claim is not one that the legislature has empowered the zoning board of adjustment to hear. Therefore petitioners were not required to exhaust administrative remedies in this dispute.
Bernstein, Shur, Sawyer & Nelson, of Manchester (Roy W. Tilsley and Christopher G. Aslin on the brief, and Mr. Tilsley orally), for the petitioners. Mitchell Municipal Group, of Laconia (Walter L. Mitchell and Steven M. Whitley on the brief, and Mr. Mitchell orally), for the respondent.
In Re Estate of Muriel R. Mills
Nov. 13, 2014
- Whether decedent’s estate property claim prevailed over rights of a mortgagee, where the mortgage agreement gave the mortgagee—the financial institution— the right to foreclose on the property upon the death of the mortgagor
Six years prior to her death, the decedent Muriel Mills granted a “home equity conversion mortgage” on her property to Financial Freedom Senior Funding Corporation. The terms of the mortgage included a statutory power of sale that allowed Financial Freedom to foreclose upon the property upon the death of the borrower. The terms also provided that the “Borrower shall have no personal liability for payment of the debt secured by this Security Instrument” and that the “Lender may enforce the debt only through the sale of the Property.”
The administrator of her estate filed a petition to the quiet title of the mortgaged property. The circuit granted the motion of the respondent, Federal National Mortgage Association (Fannie Mae), to dismiss the petitioner’s quiet title action. The Supreme Court affirmed.
On appeal, the petitioner argued that the trial court erred by failing to find that the respondent’s foreclosure action is barred because Financial Freedom did not provide notice of a claim and present a demand to the estate pursuant to RSA 556:1 and :3, and that the respondent did not file suit against the administrator within one year of the grant of administration as required by RSA 556:5. The petitioner further contends that the trial court erred by failing to enter a decree pro confesso pursuant to Probate Division Rule 131 and a default judgment “against Financial Freedom, its agent and its assigns.”
The Court disposes of the arguments of the estate. As to the lack of notice and the failure to bring suit within a set time, those failings may give rise to claims in some other cause of action, but not in a petition to quiet title and not in a case involving “power of sale” mortgages. Under New Hampshire law, power of sale mortgages permit mortgage foreclosure without any court proceedings. As to the failure of Financial Freedom—as distinct from Fannie Mae— to defend against the petition, Financial Freedom’s was not a party in interest at the time of these proceedings. Instead, the Court notes that Financial Freedom’s interest in the property had been assigned to the Fannie Mae in an unrelated transaction several years earlier. Counsel for Fannie Mae did file an appearance and a motion to dismiss, and court below did not err in acting on that motion to dismiss.
McDowell & Osburn, of Manchester (Mark D. Morrissette on the brief and orally), for the petitioner. Harmon Law Offices, of Newton Highlands, Massachusetts (Amie DiGiampaolo on the brief and orally), for the respondent.