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Bar News - February 17, 2016


Supreme Court At-a-Glance

By:

January 2016

Criminal Law

State of New Hampshire v. Grande
No. 2013-0762
Jan. 12, 2016
Affirmed

  • Whether the defendant’s is barred procedurally and/or by collateral estoppel from raising ineffective assistance of counsel on direct appeal

This is a direct appeal from a trial court ruling whereby the defendant asserts ineffective assistance of counsel after his appointed counsel failed to object to the trial court’s ruling that he had opened the door to evidence of a robbery and failed to articulate why that evidence was inadmissible. The state countered defendant’s claim, noting he waived his ineffective assistance of counsel claim when he failed to appeal the trial court’s ruling from a prior hearing. The state also contends defendant’s claim of ineffective assistance of counsel is barred by collateral estoppel.

The NH Supreme Court first addressed the state’s procedural argument, noting in particular its holding in State v. Thompson (2011) does not allow the defendant “...to litigate his ineffectiveness claim in the trial court, fail to appeal the trial court’s ruling, and then obtain appellate review of his claim as part of his direct appeal.”

The court then addressed the state’s contention that the defendant’s claim of ineffective assistance of counsel was barred by collateral estoppel. The court, deciding the civil test of collateral estoppel applied, noted its decision in State v. Hall (2006), where “[p]ost-conviction relief, such as a motion for a new trial based upon ineffective assistance of counsel, is civil in nature,” and because the defendant did not argue otherwise, the court assumed the civil for collateral estoppel test applied.

The court applied the four prongs of collateral estoppel and found the doctrine applied whereby 1) the issues of defendant’s counsel failing to argue the defendant had not opened the door to testimony about the robbery and the testimony was inadmissible as hearsay are identical to those the defendant raised on appeal; 2) the issues were decided by the trial court and not appealed, which means they have been decided on the merits; 3) the defendant was a party to the trial court action, is a party to the appeal, was appointed counsel, and the trial court held a hearing on the merits for the defendant’s motion for new trial; and 4) the trial court considered the defendant’s claim on the merits.

Joseph A. Foster, attorney general (Susan P. McGinnis, senior assistant attorney general, on the brief and orally), for the State; Stephanie Hausman, deputy chief appellate defender, of Concord, on the brief and orally, for the defendant


Criminal Law

State of New Hampshire v. Dow
No. 2014-0591
Jan. 12, 2016
Affirmed

  • Whether the trial court erred when it admitted detailed evidence that defendant physically abused his former girlfriend because the state did not meet its burden
  • Whether the trial court erred when it allowed the state’s expert witness to testify regarding the effects of domestic violence on a victim

This appeal was of defendant’s convictions after a jury trial on two counts of first-degree assault, one count of second-degree assault, and five counts of endangering the welfare of a child.

Defendant first appealed the trial court’s finding that evidence of defendant’s prior bad act, i.e. that he threatened and abused his girlfriend, was not excluded per NH R. Ev. 404(b). In determining whether the trial court’s ruling on the admissibility of the evidence was an unsustainable exercise of its discretion, the NH Supreme Court examined the defendant’s argument that the trial court violated NH R. Ev. 404(b) when it allowed the defendant’s girlfriend to testify at trial concerning his abuse of her, because the state did not meet the first and third prong of the admissibility test.

The court found evidence of the defendant’s abuse of his girlfriend was in a significant way connected to material events constituting the crime charged, which satisfies the first prong of the test for admissibility. Defendant claimed the court’s articulation of the relevance standard for admission of prior bad act evidence per NH R. Ev. 404(b) sets forth a higher standard than required NH R. Ev. 401, and therefore evidence of uncharged acts of domestic violence committed by him against his girlfriend did not meet this standard.

The court rejected this, noting they need not decide whether the relevance standard under Rule 404(b) is “higher” than that under Rule 401, because the evidence of the defendant’s prior abuse of his girlfriend meets the standard the court articulated for admission of prior bad act evidence under NH R. Ev. 404(b). Moreover, the court found, there was a significant logical connection between the defendant’s abuse of his girlfriend and her failure to report the abuse of the minor child, and the defendant’s abuse of his girlfriend led her to lie to the police. Because the child would not be testifying, the testimony of the defendant’s girlfriend was critical to the state’s case and thus admissible.

The court also found the state met its burden under the third prong of the test of admissibility per NH R. Ev. 401. Defendant claimed the testimony of the defendant’s girlfriend should not be admitted because, regardless of any relevance her testimony may have, it “was greatly outweighed by the danger of unfair prejudice.” The court rejected this argument noting that, “even though evidence of the defendant’s abuse of [the defendant’s girlfriend] may have been prejudicial, it was not so inflammatory as to substantially outweigh its probative value.”

Finally, the court rejected the defendant’s argument that the trial court had erred by allowing expert testimony per NH R. Ev. 702, asserting that the court’s decision in State v. Searles (1996) makes evidence presented by the expert admissible only when a victim recants or otherwise minimizes the subject abuse during her testimony. The court also rejected defendant’s claim that the expert’s testimony was prejudicial; and because the defendant’s girlfriend is not a “victim,” any expert testimony is inadmissible.

Joseph A. Foster, attorney general (Heather A. Cherniske, attorney, on the brief and orally), for the State; Wilson, Bush, Durkin & Keefe, of Nashua (Charles J. Keefe on the brief and orally), for the defendant.


Administrative Law

Appeal of THI of New Hampshire at Derry LLC
Jan. 12, 2016
Affirmed

  • Whether the Health Services Planning and Review Board (Board) incorrectly applied the statutory moratorium in RSA 151-C:4, III(a) as precluding the Board from granting THI of New Hampshire at Derry (THI) a certificate of need (CON).

In this appeal to the Board’s administrative ruling, THI asserts: 1) the Board incorrectly applied the statutory moratorium found in RSA 151-C:4 because RSA 151-C:4, III(a) creates an exception to the moratorium for the transfer of beds to an “existing facility,” which THI had in Pleasant Valley Nursing Center (Pleasant Valley); and 2) the Board’s denial of THI’s CON application was arbitrary, capricious, and unlawful because of the Board’s decision to deny on the transfer of Pleasant Valley, even though the Board approved the transfer of Pleasant Valley during the CON completeness review process.

The NH Supreme Court examined RSA 151-C:4, I, which creates a statutory moratorium on construction of new nursing homes, and found RSA 151-C:4, I confers limited exceptions to the prohibition on the Board’s authority to grant a CON. The court found that “existing” or “existing facility” is not defined by RSA 151-C:4, I and agreed with the state that the term is clear and unambiguous, and that a facility must be “existing” when the Board considers the CON application.

Contrary to THI’s line of reasoning, the court agreed with the Board the term “existing facility” cannot be stretched so far as to include a completely new facility that no longer has any relationship to another operating facility owned by the applicant at the time the Board is asked to grant the CON. In other words, the facility for which the CON is being sought must already be in existence and not a yet-to-be-built ancillary facility. Because the facility THI wanted to transfer beds to was not already in existence, the Board did not err when it denied THI’s CON.

Andrew Eills Law Offices, of Concord (Andrew B. Eills on the brief and orally), for the petitioner; Joseph A. Foster, attorney general (Kenneth A. Sansone, attorney, on the brief and orally), for the State.


Subject Matter Jurisdiction

Federal Home Loan Mortgage Corporation v. Willette
Jan. 12, 2016
Affirmed

  • Whether the 6th Circuit Court-Hooksett District Division lacked subject matter jurisdiction to issue a writ of possession

Appeal from a decision of the 6th Circuit Court-Hooksett District Division (Spath, J.), which issued a writ of possession in favor of the plaintiff, Federal Home Loan Mortgage Corporation (Freddie Mac). The defendant contends that the District Division did not have subject matter jurisdiction because she filed a plea of title in superior court, which per the language of RSA 540:18, means the district division no longer had subject matter jurisdiction over Freddie Mac’s action for possession.

The court found RSA 540:17 and 18 did deprive the district division of subject matter jurisdiction once the defendant filed her title action in superior court. The court found the plain language of the 540:18 does not harmonize with the defendant’s interpretation of RSA 540:18 that “no further proceedings shall be had before” strips the subject matter jurisdiction from the district court for an action for possession when a defendant files a title action in superior court and grants the superior court exclusive jurisdiction to issue a writ of possession. The court did interpret that the language “no further proceedings” in RSA 540:18 ensures “...the district division does not rule upon the title action, which is beyond its jurisdiction, or proceed with the action for possession until the title action is resolved in the superior court...”

The court also found RSA 540:18 does not require the district court to transfer or enter a title action to superior court, rather RSA 540:18 shifts to the defendant the burden to introduce the title action in superior court.

Harmon Law Offices, of Newton Highlands, Mass. (Amie DiGiampaolo on the memorandum of law), for the plaintiff; Stephen W. Wight, of Lawrence, Mass., by brief, for the defendant.


Consumer Law

Jeffery Roy v. Quality Pro Auto LLC
No. 2014-0730
Jan. 26, 2016
Affirmed

  • Whether trial court erred when it ruled the implied warranty of merchantability as set forth in RSA 382-A:2-314 did not apply to the purchase of a vehicle that was noticed upon sale to be unsafe

This was an appeal from a ruling by the trial court that the implied warranty of merchantability as set forth in RSA 382-A:2-314 did not apply to a vehicle, which the plaintiff purchased with express knowledge that it was unsafe and may not pass inspection.

The NH Supreme Court rejected and refused to review plaintiff’s argument that the trial court erred when it found the plaintiff waived the implied warranty of merchantability. Instead, the court focused its analysis on the statutory construction of RSA 382-A:2-314, and specifically comments to the statute.

The court found that the defendant sold the plaintiff a used vehicle and expressly pointed out in the sale agreement that the vehicle “will not pass a New Hampshire inspection, is unsafe for operation, and cannot be driven on the ways of this state.” This express language of the sale agreement specifying the condition did not create a breach of the implied warranty of merchantability; conversely, the vehicle was merchantable within the meaning of the parties’ sale agreement.

University of New Hampshire School of Law Civil Practice Clinic, of Concord (Peter S. Wright, Jr. on the brief), for the plaintiff. Quality Pro Auto LLC, self-represented party, filed no brief. Holmes Law Offices, of Concord (Gregory A. Holmes on the brief), for New Hampshire Automobile Dealers Association, as amicus curiae.


Agency Law

Joseph Castagnaro v. The Bank of New York Mellon
No. 2014-0782
Jan. 26, 2016
Remanded

Two questions of law were certified to the New Hampshire Supreme Court by the United States Court of Appeals for the First Circuit per NH SUP. CT. R. 34:

  • “Does New Hampshire common law and/or RSA § 479:25 require a foreclosing entity to hold both the mortgage and note at the time of a non-judicial foreclosure? If so, can an agency relationship between the note holder and the mortgage holder meet that requirement, and does language in the mortgage naming the mortgagee ‘nominee for lender and lender’s successors and assigns’ suffice on its own to show an adequate agency relationship?”
  • “Assuming the common law and/or RSA § 479:25 requires a unity of the mortgage and note at the time of a non-judicial foreclosure, and that an agency relationship between the note holder and the mortgage holder does not satisfy such a requirement, can the parties’ intent to separate the two overcome the unity rule? If so, does separating the mortgage and note at the onset of the transaction indicate such intent as a matter of law?”

Author’s note: NH SUP. CT. R. 34 allows the Court to “…answer questions of law certified to it by the Supreme Court of the United States, a court of appeals of the United States, or of the District of Columbia, or a United States district court when requested by the certifying court if there are involved in any proceeding before it questions of law of this State which may be determinative of the cause then pending in the certifying court and as to which it appears to the certifying court there is no controlling precedent in the decisions of this court.

Per the first question, the NH Supreme Court was presented with an identical issue in Bergeron v. NY Community Bank (2015). The court concluded in Bergeron the agency relationship created between the noteholder and the mortgage holder does require the foreclosing entity to hold both the note and the mortgage at the time of non-judicial foreclosure, and the language in the mortgage naming the mortgagee “nominee for lender and lender’s successors and assigns” on its own serves to show a suitable agency relationship. The court did not have to address the second certified question as RSA 479:25 does not require a unity of the mortgage and note at the time of a non-judicial foreclosure.

The court refused to consider the merits of the plaintiff’s federal case, as the only questions before it were those certified by the United State Court of Appeals for the First Circuit per NH SUP. CT. R. 34.

The Law Offices of Martin & Hipple , of Concord (Stephen T. Martin on the brief), for the plaintiff. Primmer Piper Eggleston & Cramer, of Manchester (Thomas J. Pappas on the brief), and Winston & Strawn, of Charlotte, NC (Elizabeth T. Timkovich and Phoebe N. Coddington on the brief), for the defendant.


Domestic Law

In the Matter of Marinna Nizhnikov and Alexander Nizhnikov
No. 2014-0794
Jan. 26, 2016
Affirmed in part, reversed in part, vacated in part, and remanded

  • Whether the trial court erred when it ruled the parties prenuptial agreement was unenforceable

The NH Supreme Court focused the greater part of its opinion on whether the trial court erred when it ruled the parties’ prenuptial agreement was unenforceable. The respondent argued the trial court erred when it declined to enforce the agreement because the timing of the agreement’s execution was not an issue, as the parties had no prior plans to be married when the agreement was signed.

The respondent also argued the petitioner had knowledge of the respondent’s financial condition and therefore waived her right to a financial disclosure. The petitioner argued the trial court was correct to decline to enforce the agreement, and it correctly considered the lack of financial statements, mutually with the timing of the agreement’s execution, when it made it declined to enforce the agreement.

The court observed prenuptial agreements are presumed valid unless the party seeking the invalidation of the agreement proves that: (1) the agreement was obtained through fraud, duress or mistake, or through misrepresentation or nondisclosure of a material fact; (2) the agreement is unconscionable; or (3) the facts and circumstances have so changed since the agreement was executed as to make the agreement unenforceable. In re Estate of Hollett (2003). However, the trial court did not clearly state the legal grounds upon which it was refusing to enforce the prenuptial agreement, finding only that the agreement was unenforceable because of a “collapsed time frame” leading up to the marriage, and the inadequacy of financial disclosures. This suggested to the court that the trial court invalidated the agreement as being obtained because of duress.

The court examined the circumstances preceding the signature of the agreement and found the petitioner was not under undue duress and did not otherwise sign the agreement involuntarily, even though the agreement was signed the day the parties were married. The court noted that the petitioner had ample time before signing the agreement to review it, and in fact agreed to it before her signature. More so, the failure to attach financial statements, coupled with signing the agreement on the same day of the marriage, did not presume it was involuntarily signed, nor was there any evidence of bad faith or lack of bargaining power. The court concluded the parties’ prenuptial agreement was not the product of duress or obtained through non-disclosure of material fact, making it valid and enforceable. The court vacated the trial court’s property distribution with remand to distribute the property consistent with the parties’ pre-nuptial agreement.

The court briefly considered the respondent’s remaining arguments regarding a mutual restraining order; a parenting plan, which allowed the petitioner to eventually have “near equal” parenting time; order requiring him to pay for 100 percent of the children’s uninsured medical expenses and co-parenting counseling; the trial court’s refusal to require the parties to live a certain geographical distance from one another; and the trial court’s admission of a DCYF administrative appeal into evidence. The court decided the respondent did not meet the burden of reversible error and therefore affirmed the trial court’s rulings on these issues.

Crusco Law Office, of Bedford (Kysa M. Crusco and Kimberly A. Shaughnessy on the brief, and Ms. Crusco orally), for the petitioner. Hamblett & Kerrigan, of Nashua (Kevin P. Rauseo and Andrew J. Piela on the brief, and Mr. Rauseo orally), for the respondent.


Administrative Law

Appeal of City of Concord
No. 2014-0801
Jan. 26, 2016
Affirmed

  • Whether the Public Employee Labor Relations Board (PELRB) erred when it concluded that the grievance relating to a retiree presented by the Concord Police Supervisors’ Association (Union) is subject to arbitration under the successor collective bargaining agreement (CBA)

This appeal is from a PERLB decision by the City of Concord regarding whether the grievance filed against a retiree was properly subject to arbitration. The NH Supreme Court limited itself to this issue and disregarded the merits of the grievance, noting that “[u]nless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the PELRB, not the arbitrator.” Appeal of Town of Durham (2003). In this case, the Union, which inferred the PELRB lacked jurisdiction to decide whether the matter is subject to arbitration, failed to identify where the parties “clearly and unmistakably” agreed whether the matter was subject to arbitration was to be decided by the arbitrator.

Citing Appeal of Town of Bedford, 142 N.H. 637, the court recognized under the positive assurance standard, if it determines with positive assurance the CBA is not predisposed to an interpretation that covers the dispute, it may conclude the arbitration clause does not include a particular grievance. The court then examined the relevant language of the CBA to resolve whether the grievance at issue is subject to arbitration. The court’s subsequent analysis of the successor CBA revealed “…the grievance and arbitration provision restricts arbitration to grievances; the successor CBA defines grievances as disputes or claims by “employee[s]”; the retroactive COLA at issue was granted to “employees”; and retirees are not “employee[s]” within the meaning of the CBA.”

Despite this, the court questioned whether the grievance and arbitration provision in the successor could be interpreted to cover the retiree’s grievance. The successor CBA is ambiguous as to which “employees” are entitled to the retroactive COLA. Does the CBA cover employees active at any time during its term, which would make the retiree eligible, or employees who were active as of the effective date of the successor CBA on Dec. 19, 2013, which would make the retiree ineligible? The court concluded the PELRB’s ruling invoking the presumption that the retiree’s grievance was subject to arbitration because the successor CBA is ambiguous as to whether it covers the retiree’s grievance.

City Solicitor’s Office of Concord (James W. Kennedy, city solicitor, on the brief and orally), for the petitioner. Milner & Krupski, of Concord (John S. Krupski on the brief and orally), for the respondent.


Evidence

Jeffery Smith v. Milko Pesa d/b/a Auto Milko
No. 2015-0019
Jan. 26, 2016
Affirmed

  • Whether the evidence supports the trial court’s determination that the defendant did not violate his obligations under RSA chapter 358-F

This was an appeal from an order of the Circuit Court granting a judgment to the defendant on the plaintiff’s small claim action, which sought damages and other relief on the grounds that the plaintiff validly revoked acceptance of the used motor vehicle the defendant sold him, and the defendant violated RSA chapter 358-F by selling him the vehicle.

The plaintiff argued on appeal that he presented sufficient evidence that he revoked his acceptance of the motor vehicle pursuant to RSA 382-A: 2-608, and that the defendant violated RSA 358-F:2, 3 governing the sale of unsafe used motor vehicles.

The NH Supreme Court’s review of whether the plaintiff presented sufficient evidence to show he revoked acceptance per RSA 382-A:2-608 revealed the plaintiff’s reliance upon RSA 382-A:2-608 was misplaced. The court observed the parties explicitly entered into an agreement for a used motor vehicle that “will not pass a New Hampshire inspection, is unsafe for operation, and cannot be driven on the ways of this state.”

The court found the vehicle’s condition was in accord with the obligations under the contract, even though the vehicle failed inspection, and the plaintiff was not entitled to revoke his acceptance. The plaintiff presented no evidence that the defendant made representations that the vehicle ran well, and any evidence the vehicle was non-conforming was conflicting, which was properly left to the discretion of the trial court to resolve. To the plaintiff’s assertion the defendant violated RSA 358-F:2 and :3 relating to the sale of unsafe used motor vehicles, the court found the trial court could have reasonably found the defendant did not refuse to conduct an inspection. More so, the court concluded, the trial court could have reasonably found the defendant informed the plaintiff that an inspection could not be conducted that day, because the mechanic was not at work, and the plaintiff insisted on buying the car without an inspection.

Denitsa N. Pocheva-Smith, of Rochester, by brief and orally, for the plaintiff. Lawson Persson & Weldon-Francke, of Laconia (James P. Ball on the brief), and Haughey, Philpot & Laurent, of Laconia (William Philpot Jr. orally), for the defendant.


Insurance

Old Republic Insurance Company v. Stratford Insurance Company
No. 2015-0123
January 26, 2016
Remanded

Three questions were certified to the New Hampshire Supreme Court by the United States Court of Appeals for the First Circuit per NH Sup. Ct. R. 34:

Under New Hampshire law, when is an excess insurer’s duty to defend triggered?
  • Does New Hampshire follow the general rule that the excess insurer’s duty to defend is triggered only when the primary insurer’s coverage is exhausted?
  • If not, what rule as to allocation of defense costs and timing of payment does New Hampshire follow?

Author’s note: NH SUP. CT. R. 34 allows the Court to “…answer questions of law certified to it by the Supreme Court of the United States, a court of appeals of the United States, or of the District of Columbia, or a United States district court when requested by the certifying court if there are involved in any proceeding before it questions of law of this State which may be determinative of the cause then pending in the certifying court and as to which it appears to the certifying court there is no controlling precedent in the decisions of this court.”

Practitioner’s tip: This case adopts a significant rule change for New Hampshire insurance law.

To the First Circuit’s query, the New Hampshire Supreme Court answered that the excess insurer’s duty to defend is triggered only when the primary’s insurer’s coverage is exhausted.

In support of its answer, the court emphasized that it now had the occasion to address this issue, and it took this opportunity to adopt the majority rule whereby: “[w]here an insured is covered by both a primary policy and an excess policy... the excess liability carrier is not obligated to participate in the defense until the primary policy limits are exhausted.” The court noted this obligation exists unless the specific policy language excuses or excludes it.

The court highlighted that “[t]he fundamental goal of interpreting an insurance policy, as in all contracts, is to carry out the intent of the contracting parties.” Bartlett v. Commerce Ins. Co. (2015). The court further elaborated, writing that adopting the majority rule serves the purpose of effectuating the intent of primary and excess insurers that providing different levels of coverage for the same insured as part of a comprehensive risk management scheme.

The court further explained the majority rule epitomizes how the insurance system operates, how companies manage risk, and how insurers market and price their policies. The majority rule also allows the primary insurer to retain exclusive control over the litigation and, by extension, the protection of its financial interest in the outcome. To do otherwise would allow the indemnity insurer to have a strategic role in making litigation decisions and, ultimately, the primary insurer’s financial interest in the outcome of the litigation.

Getman, Schulthess, Steere & Poulin, of Manchester (Naomi L. Getman), for the plaintiff, filed no brief. Barclay Damon, of New York, NY (Laurence J. Rabinovich on the brief), and Devine Millimet & Branch, of Manchester (Richard C. Nelson on the brief), for the defendant. Hoefle, Phoenix, Gormley & Roberts, of Portsmouth (Stephen H. Roberts on the brief), and Wiley Rein LLP, of Washington, DC (Laura Foggan on the brief), for Complex Insurance Claims Litigation Association, as amicus curiae.

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