Frost v. New Hampshire Banking Dept.

March 17, 2012 by Justia

Respondents the Commissioner of the New Hampshire Banking Department and the New Hampshire Banking Department (collectively, the Department), appealed an order of the Superior Court that permanently enjoined the Department from pursuing an administrative proceeding against Petitioner Jeffrey Frost on the ground that the Department lacked subject matter jurisdiction. Petitioners Frost, Chretien/Tillinghast, LLC, and Frost Family, LLC, cross-appealed, arguing that the trial court erred by denying their request for attorney’s fees. Frost is a member and designated manager of Chretien/Tillinghast, LLC (Chretien), and a member of Frost Family, LLC (Frost Family). Chretien and Frost Family (collectively, the LLCs) are New Hampshire limited liability companies organized for the purpose of real estate acquisition, holding, and development. The underlying dispute arose as the result of two seller-financed real estate transactions, one conducted by Frost Family and the other by Chretien. After both instances of seller-financing, Petitioner submitted a loan originator license application to the Department. At the time the administrative proceedings were initiated, the Department notified Petitioner that he could request a hearing with the Department. Petitioner did not file such a request. Instead, all Petitioners initiated a declaratory judgment proceeding in superior court, which included a request for a temporary restraining order. The petitioners contended that Respondents lacked subject matter jurisdiction to proceed against Frost and violated the State Constitution's prohibition against retrospective laws by seeking to impose a $25,000 fine for each alleged violation. After a hearing, the trial court granted the preliminary injunction, concluding that "[w]hile the [Department] may have jurisdiction over Frost because he is now a loan originator, it [could] take no action against him based on the September 2008 or the March 2009 transactions." Further, the trial court concluded that since the Department "may not impose any penalties on Frost," it did not need to consider the issue of the retrospective nature of the sanctions. Upon review, the Supreme Court agreed that the Department lacked subject matter jurisdiction over the matter and affirmed the superior court's judgment. View "Frost v. New Hampshire Banking Dept. " on Justia Law