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Bar News - June 15, 2016


Supreme Court At-a-Glance

May 2016

Administrative

Appeal from the Board of Education

Appeal of the Dunbarton School District
No. 2015-0030
May 13, 2016
Reversed

  • Appeal from an administrative proceeding before the Board of Education which addressed two mechanisms for the termination of AREA relationships pursuant to RSA 195-A and the impact, if any, of an AREA relationship termination on outstanding debts

On appeal from the New Hampshire State Board of Education, Dunbarton School District (Dunbarton) sought to overturn the Board of Education’s (Board) decision, which held that pursuant to RSA 195-A, Dunbarton remained liable to Goffstown School District, for its proportional share of Goffstown’s obligation on a 20-year high school construction bond approved in 2001.

The NH Supreme Court explained the relevant facts as follows. RSA chapter 195-A allows the establishment of Authorized Regional Enrollment Area (AREA) schools. AREA schools within receiving districts served both receiving districts and sending districts. AREA plans must include a formula for the calculation of tuition, which may include an annual rental charge per pupil, defined as including a fair charge for building occupancy.

In 1971, Goffstown, Dunbarton, and the New Boston School districts entered into a written AREA plan. Goffstown as the receiving district and Dunbarton and New Boston as the sending districts. The annual tuition rate included a rental charge.

In the late 1990s, a renovation project budgeted at nearly $12 million was undertaken at Goffstown High School. The sending districts received written notice. Goffstown voters authorized the issuance of bonds to raise the money for the project, and the bond issued.

In 2004, Goffstown, Dumbarton, and New Boston agreed to a new written AREA plan to replace the 1971 plan. The 2004 plan included the following: 10-year term to end July 1, 2014; an annual tuition rate that included a rental charge; and voided any former AREA agreements between Goffstown, New Boston, and Dunbarton. The plan went into effect in 2004.

In 2014, before the expiration of the AREA plan, representatives from each school district discussed possible amendments and created a proposed AREA plan. Contemporaneously, the Board approved a Dunbarton/Bow AREA plan. Voters approved the Dunbarton/Bow plan, and Dunbarton voters rejected the Goffstown/Dunbarton/New Boston AREA plan.

Goffstown requested a hearing to determine Dunbarton’s remaining obligation on the 2001 construction bond. The Board decided that Dunbarton remained obligated under the bond, because it failed to initiate a withdrawal study four months before the vote.

Upon the denial of Dunbarton’s request for reconsideration, this appeal followed. The Court reviewed the appeal de novo.

On appeal, Dunbarton argued that there are two mechanisms for the termination of an AREA relationship (1) withdrawal by one party, and (2) expiration. Dunbarton argued that withdrawal may occur during the period of a plan; expiration occurs as a result of the end of the term. Dunbarton argued that only withdrawal may impose financial liability for payments on outstanding bond issues, and that the Board wrongfully concluded that Dunbarton had withdrawn from the AREA plan.

Goffstown argued that the Board properly determined that Dunbarton had withdrawn from the AREA plan. Goffstown argued that the obligation created by withdrawal with respect to financial obligations of a district was not erased by the enactment of the 2004 AREA plan.

The state argued amicus curiae that the phrase “withdrawing sending district” should include both school districts that withdraw from an AREA plan before termination and those that allow AREA plans to expire.

After the hearing, the Court agreed with Dunbarton. The Court observed that the 2004 plan expressly stated that former AREA agreements between Goffstown/New Boston/Dunbarton shall become void.

The Court concluded that pursuant to the plain language of the statute, Dunbarton was not a “withdrawing sending district” when the AREA plan between the parties expired in 2014, and thus, Dunbarton is not financially liable to Goffstown for its proportional share of the 2001 high school construction bond.

Edward M. Kaplan, Sulloway & Hollis, of Concord, (Sarah S. Murdough on the brief) for the Goffstown School District. Daniel E. Will, Devine, Millimet & Branch, Manchester, (Joshua M. Wyatt on the brief) for the Dunbarton School District. Joseph A. Foster, attorney general, (Brian W. Buonamano, assistant attorney general, by brief) for the New Hampshire State Board of Education, on the brief as amicus curiae.


Criminal

State v. Bedell
No. 2014-0662
May 27, 2016
Affirmed

  • Whether the Superior Court erred in dismissing a juror on the second day of trial and, if so, whether the dismissal was prejudicial

The defendant, Paul Bedell, appealed his convictions on two counts of aggravated felonious sexual assault.

The NH Supreme Court explained the relevant facts as follows. During the juror selection process, the trial court asked prospective jurors whether “you or a close family member [has] ever been accused of [sexual assault].” One prospective juror informed the court that “my cousin’s son [has] also been accused and is preparing to go to trial.” The state further questioned the juror “so the fact that this 10-year-old [in your relative’s case] made up a story about sexual assault, wouldn’t that color your views when listening to another child if they were to say that they were sexually assaulted by someone?”

The prospective juror responded by stating that it depended on how the child was raised. At the conclusion of the questioning, the prospective juror testified that she would have to take what was said at face value. The state, out of peremptory challenges, asked the trial court to dismiss the prospective juror for cause. The court asked the prospective juror if she would still be able to evaluate the credibility of the alleged victim and every witness based on the factors in the present case, to which the juror responded affirmatively. The court found the prospective juror to be qualified and declined to dismiss her for cause.

The state next asked the trial court to dismiss the juror during a pre-trial evidentiary hearing, because the state had learned that the attorney representing the juror’s relative had worked in the same public defender’s office as the defendant’s attorney. The trial court denied the request and observed that the juror was not aware and had no reason to be aware of the professional relationship between the attorneys.

On the second day of trial, the state next asked the trial court to dismiss the juror for cause and alleged that defense counsel made a direct appeal to this particular juror during her opening statement, including, “This case is about a little girl who wanted attention and boy did she get it. We all know, we’ve all met, we’ve all had first-hand information of people who make things up for reasons that aren’t all together clear.” The trial court granted the state’s request on the grounds that defense counsel’s opening statement was an appeal to the juror’s personal experiences with her relative, including the defense counsel’s theory that the victim made up the allegations.

On appeal, the defendant argued that the trial court erred in dismissing the juror on the second day of trial. The defendant argued that there was no evidence that the juror’s impartiality had been affected. The state argued that even if the dismissal was in error, the defendant cannot show that he was prejudiced, and therefore a reversal would not be warranted.

The Supreme Court held that the trial court erred in dismissing the juror for cause in the middle of trial, because the record did not establish an objective basis sufficient to sustain the trial court’s finding. However, the Court held that the trial court’s erroneous dismissal of the juror did not require reversal of the defendant’s convictions, as there was no prejudice.

Joseph A. Foster, attorney general, (Colleen Laffin, attorney, and Stephen D. Fuller, senior assistant attorney general, on the brief) for the state. Christopher M. Johnson, chief appellate defender, of Concord, on the brief and orally, for the defendant.


Property

Paul Lynn & a. v. Wentworth By The Sea Master Association
No. 2015-0333
May 27, 2016
Affirmed

  • Whether an easement was validly created that provides members of the defendant association beach access

The plaintiffs appealed a Superior Court order of summary judgment in favor of the defendant association and denial of their motion for summary judgment.

The NH Supreme Court explained the relevant facts as follows. The defendant association governs a residential development of common areas and more than 100 homes in New Castle. The plaintiffs purchased their property, Lot 17, by warranty deed dated June 30, 2011. The easement at issue is a walkway that provides beach access to association members and their guests and runs along Lot 17 and the neighboring lot, before cutting across Lot 17 to the water. Lot 17 was the first house constructed in the development and was sold by the developer by warranty deed dated April 28, 1995, which states: “This Conveyance is subject to all utility and other applicable easements or restrictions of record, or which may be recorded in the future with respect to the [association].”

The next deed, to the plaintiffs, also includes this language. A site plan for the development, which predated the 1995 deed, did not show the easement. Thirteen days after the date of the 1995 deed, a revised site plan, which depicted the easement, was recorded. An easement plan that showed the easement was filed in 1996. The record established that the plaintiffs had actual notice of the site plan, revised site plan, declaration of easement, easement plan, and the easement itself prior to purchasing the property, and that the easement plan was specifically mentioned in their deed.

In January 2014, the plaintiffs filed suit and sought injunctive relief to prevent the association from using the easement and a declaratory judgment that the easement was invalid and unenforceable. The defendant association counterclaimed, and both parties moved for summary judgment. In the defendant’s motion for summary judgment, documents that were not previously disclosed to the plaintiffs and affidavits from the previous owners were submitted. The court re-opened discovery for the limited purpose of taking the depositions of the previous owners and a representative of the developers.

The trial court denied the plaintiffs’ motion for partial summary judgment and granted summary judgment to the association. The trial court ruled that an easement by implication was created when the previous owners purchased the property from the developer. The court noted that the deed had a catch-all provision and that the previous owner’s conduct was indicative of the existence of an easement. The trial court rejected the plaintiffs’ argument that the previous owners had agreed only to a revocable license because the previous owners consistently testified that an easement went over their land.

On appeal, the plaintiffs argued that the trial court erred when it concluded that a valid easement was created by implication. After a de novo review, the Supreme Court held that an easement was validly created. The court held that this easement was created by the deed from the developer to the previous owners by the true meaning and real intention of the parties. The court noted that the deed that created the easement was not as artfully drafted as it could have been, but it created an easement nonetheless.

The court held that a) the trial court did not err by admitting evidence produced after the initial close of discovery, because no prejudice was demonstrated and b) the plaintiffs’ argument that issues of material fact were resolved in favor of the defendant association failed because they were not material to the outcome.

Daniel M. Deschenes, Hinckley, Allen & Snyder, of Concord, (with Richard Y. Uchida on the brief only) for the plaintiffs. Michael C. Harvell, Sheehan Phinney Bass + Green, of Concord, (with Megan C. Carrier on the brief only), for the defendant.


Trusts

Attorney General Director of Charitable Trusts v. Loreto Publications, Inc.
No. 2015-0220
May 27, 2016
Affirmed

  • Whether the defendant was exempt from the statutory reporting requirements to the NH Attorney General as a qualified religious organization

The respondent, Loreto Publications Inc., appealed a NH Circuit Court order, which ruled that Loreto failed to establish it was statutorily exempt from filing annual reports with the Attorney General’s Office and that it must file reports for fiscal years 2010 to 2014. The petitioner is the director of the Charitable Trusts Unit at the NH Attorney General’s Office.

The NH Supreme Court explained the relevant facts as follows. Loreto is a nonprofit corporation with the stated purpose of promoting the Roman Catholic Religion through sales of communication media. In 2003, the IRS granted Loreto a tax exemption under section 501(c)(3) of the Internal Revenue Code. In 2008, the Charitable Trust Unit of the Attorney General’s Office learned Loreto was operating a tax-exempt organization in New Hampshire and that under state law, Loreto must register with and submit annual reports to the Attorney General’s Office. In 2009, Loreto registered with the Charitable Trust Unit, but did not file an annual report for 2010 or any subsequent fiscal year.

The Charitable Trust Unit sought an order in the circuit court for Loreto to file its delinquent reports. Loreto moved to dismiss and argued that it is not a charitable trust, but rather a church/religious organization, and challenged subject matter jurisdiction. The court held an evidentiary hearing. A representative of the Roman Catholic Diocese of Manchester testified she was unaware of a relationship between Loreto and the Roman Catholic Church. A representative from the Charitable Trust Unit testified to Loreto’s status as a 501(c)(3) tax-exempt organization. Loreto argued that it was a “religious organization” or an “integrated auxiliary” of a religious organization under RSA 7:19 and exempt from the reporting requirements. The trial court rejected this argument and ordered Loreto to file the delinquent reports.

On appeal, Loreto challenged subject matter jurisdiction, the relevancy and admissibility of the testimony admitted at the circuit court evidentiary hearing, and the finding that it was not statutorily exempt from the Attorney General’s reporting requirements because it is a “religious organization” or an “integrated auxiliary” of a religious organization. Both terms are not defined by the applicable statute; Loreto argued for a broader definition.

The Court rejected Loreto’s arguments on appeal, holding that the term “religious organization” under RSA 7:19 was intended to be consistent with the term “church” as the IRS interprets it in the federal tax code.

The Court concluded that Loreto failed to show that it was a “religious organization” or an “integrated auxiliary” of a religious organization entitled to the statutory exemption from filing annual reports. The Court further held that Loreto had the burden to show it was entitled to the statutory exemption and not the petitioner.

Joseph A. Foster, attorney general, (Thomas J. Donovan, director of charitable trusts, on the brief) for the petitioner. Douglas Bersaw, non-lawyer representative appearing by approval of the Supreme Court under Rule 33(2), on the brief for the respondent.

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