Justia New Hampshire Supreme Court Opinion Summaries

Petitioner David Ellis appealed a superior court order that rescinded a non-compete agreement and ordered partial restitution as a remedy. Respondents Candia Trailers and Snow Equipment, Inc. and its principals Jeffrey and Suzanne Goff, cross-appealed the rescission of the non-compete agreement. Ellis signed an asset purchase agreement (APA), non-compete agreement (NCA) and an inventory purchase agreement (IPA) in relation to the sale of Precision Truck, a business the Goffs owned. The Goffs executed the NCA with regard to Ellis' operation of Precision Truck to remain in effect for seven years. However, the NCA could end sooner if Ellis breached terms of the IPA. One of the terms of the IPA was that Ellis would pay for Precision Truck's inventory by June 1, 2007. Within weeks of signing the NCA, Goff began competing with Precision Truck. Ellis thereafter failed to purchase all of Precision Truck's inventory by June 1, 2007. Ellis subsequently sued for breach of contract and violation of the Consumer Protection Act. The trial court found the NCA, IPA and APA as three separate agreements, each with its own terms and remedies for breach, and that Ellis breached the IPA and Goff breached the NCA. Both parties argued that the trial court abused its discretion when rescinding the NCA and awarding partial restitution to Ellis. Upon review, the Supreme Court concluded the trial court erred in determining that the three agreements were severable, and as such, the NCA could not be rescinded without rescinding the IPA and the APA too. Accordingly, the Court reversed the restitution award and remanded to the trial court for a determination of what remedies were available. View "Ellis v. Candia Trailers & Snow Equipment, Inc." on Justia Law

Carleton, LLC appealed a superior court order that denied its motion to vacate and set aside articles of dissolution filed by MTS Development Corporation (MTS) and that denied its renewed motion to enforce creditor status. At issue at trial was the valuation of Carleton, LLC's half ownership interest in MTS which Adrienne Balagur sought to acquire. After the trial court valued the ownership interest, Balagur moved to terminate Carleton, LLC's rights and status as a shareholder of MTS. The trial court granted this motion, and held that Carleton, LLC would be considered a creditor of MTS until it received money for the shares purchased. MTS then filed a notice of intention ot adopt article of dissolution. Carleton objected, moving to vacate or set aside the articles. Carleton argued that Adrienne Balagur's election to purchase Carleton's shares was irrevocable, and that the shareholders could not validly authorize the articles of dissolution. The trial court denied Carleton's motion, but agreed that an accounting of MTS' books and records should occur. On appeal, Carleton contended that the trial court erred in decision denying its motion and making it an MTS creditor. Finding no error, the Supreme Court affirmed the trial court's decision. View "Carleton, LLC v. Balagur" on Justia Law

The petitioners, Bretton Woods Telephone Company, Inc., Dixville Telephone Company, Dunbarton Telephone Company, Inc., and Granite State Telephone, Inc., four exempt incumbent rural local exchange carriers (RLECs), appealed an order of the New Hampshire Public Utilities Commission (PUC) that denied their motion to rescind or declare null and void registrations of competitive local exchange carriers (CLECs) authorized by the PUC to engage in business as telephone utilities in the service territories of RLECs. Citing RSA 374:26 and RSA 374:22-g, among other statutes, the petitioners alleged that the PUC, before issuing the registrations, had failed to provide notice, hold hearings, and determine whether allowing such competition would be consistent with the public good. In light of the Supreme Court's decision in "Appeal of Union Tel. Co.," the petitioners specifically argued that federal law did not preempt these requirements. The PUC ultimately denied the petitioners' request and ruled that section 253(a) of the Telecommunications Act preempted RSA 374:26 and RSA 374:22-g, II. Upon review, the Supreme Court affirmed, finding that section 253(a) preempted state and local laws, regulations, and requirements that "prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service." View "Appeal of Bretton Woods Telephone Company, Inc." on Justia Law

Plaintiff Regina Mbahaba, individually and as next friend of her minor daughter, Benita Nahimana, appealed a superior court order that dismissed her direct claims against Defendant Thomas Morgan, and granted him summary judgment in her action seeking to pierce the limited-liability veil of the company he managed. Defendant owned Property Management Services a/k/a Property Services Company, a limited liability company that managed an apartment building where Plaintiff and her family rented an apartment from 2005-2006. Plaintiff’s daughter, Benita, was poisoned by lead while living in the apartment, prompting an inspection by the New Hampshire Department of Health and Human Services, which revealed "lead exposure hazards" in the home. As a result of the alleged injury to Benita caused by the lead contamination, Plaintiff filed lawsuits against Defendant and Biren Properties. Shortly after Plaintiff filed Suit, Defendant formed another property management LLC, which Plaintiff alleged he created in an attempt to avoid liability from her suit. Defendant moved to dismiss the action against him personally, arguing that, because he supervised the property on behalf of the LLC, he could not be "held personally liable for the debts or actions of the company." Ultimately, the claims against Defendant individually were dismissed, but the trial court allowed the plaintiff’s claims against the LLC to proceed. Upon review, the Supreme Court concluded that Defendant's management of the apartment and his superior knowledge of its hazardous condition suffice to established an individual tort duty to avoid "exposing [the plaintiff] to an unreasonable risk of harm." Thus, because these allegations stated facts entitling Plaintiff to relief, her negligence claim survived Defendant’s motion to dismiss. With regard to Plaintiff's attempt to disregard Defendant's LLC to hold him liable, the Court concluded that Defendant correctly argued that he had every right to establish a new LLC and to transfer the original LLC’s clients to it. "However, that Defendant made this 'fresh start' when his company remained a party to this case, could permit a finding that the limited-liability identity was used to promote an injustice upon the plaintiff. Thus, based upon our review of the depositions and other evidence in the light most favorable to the plaintiff, we cannot conclude that Defendant is entitled to judgment as a matter of law." The Court affirmed in part, and reversed in part the trial court's decision, and remanded the case for further proceedings. View "Mbahaba v. Morgan" on Justia Law

Plaintiff Robert Pelkey appealed a superior court’s decision that granted partial summary judgment in favor of Defendant Dan’s City Used Cars, Inc., d/b/a Dan’s City Auto Body. In 2009, Plaintiff brought suit against his landlord and Defendant alleging Defendant towed his car pursuant to a parking policy at his apartment complex. At the time, Plaintiff was confined to bed due to a serious medical condition and did not realize that his car had been towed. Soon thereafter, he was admitted to the hospital for a procedure to amputate his left foot, during which he suffered a heart attack. Plaintiff’s attorney had learned that Defendant had possession of the car and had scheduled to sell it a public auction two days later. After the attorney informed Defendant that his client wished to arranged for the return of the vehicle, Defendant falsely told the attorney that the car had already been sold. Defendant later traded the car to a third party, but Plaintiff received no remuneration for his loss. Plaintiff brought this lawsuit alleging that Defendant violated: (1) the Consumer Protection Act; (2) RSA chapter 262(a statute permitting a towing company to place a lien on a vehicle for reasonable charges incident to towing and storage and prescribing the requirements for collection of those charges by selling the vehicle at auction); and (3) the common law duty of a bailee to exercise reasonable care while in possession of a bailor’s property. The trial court granted Defendant’s motion for summary judgment on the grounds that a provision of the Federal Aviation Administration Authorization Act of 1994 (FAAAA) preempted Plaintiff’s claims. Finding that Plaintiff’s claims were not preempted, the Supreme Court reversed the superior court’s grant of partial summary judgment in favor of Defendant and remanded the case for further proceedings. View "Pelkey v. Dan's City Used Cars, Inc." on Justia Law

The New Hampshire Department of Revenue Administration (DRA) appealed a superior court order that reversed its decision assessing a real estate transfer tax against Petitioners Say Pease, LLC and Say Pease IV, LLC. Two International Group, LLC (TIG) is a real estate holding company. It owned a ground lease on property near Pease International Tradeport that it wanted to use to secure a mortgage loan. To obtain the loan, TIG’s prospective lender required that TIG, and all of its members, be "single purpose bankruptcy remote entities." To comply with the lender’s requirement, the members of Say Pease formed Say Pease IV, a new limited liability company (LLC) with the same members. Say Pease IV’s LLC agreement provides that it was "formed for the sole purpose of being a Managing Member and Member of [TIG]" and was not authorized "to engage in any other activity[,] business or undertaking so long as [TIG] shall be indebted under any mortgage or other securitized loan." Say Pease’s interest in TIG was transferred to Say Pease IV, and Say Pease IV replaced Say Pease as TIG’s managing member. As a result of these transactions, Say Pease IV owned a 47.5% interest in TIG as a sole purpose remote bankruptcy entity, Say Pease held no interest in TIG, and TIG obtained the loan. Based upon this transfer, DRA issued notices assessing the real estate transfer tax against Say Pease and Say Pease IV. After appealing unsuccessfully through DRA’s administrative appeal process, Say Pease and Say Pease IV appealed to the superior court. The parties filed cross-motions for summary judgment, and the trial court reversed DRA's order, ruling that the transfer at issue was not a "[c]ontractual transfer," RSA 78-B:1-a, II (2003), and, therefore, the real estate transfer tax did not apply. Upon review, the Supreme Court found that the parties did not employ a business entity as a shield for an otherwise taxable exchange of value for an interest in property. Instead, those that executed Say Pease IV’s LLC agreement sought to maintain TIG’s original ownership while placing it in a suitable financing vehicle; the promises exchanged related to the creation of the financing vehicle, Say Pease IV, not the subsequent property transfer. Thus, the substance of the transaction here failed to create a bargained-for exchange because there was no "exchange of money, or other property and services, or property or services valued in money for an interest in real estate." View "Say Pease IV, LLC v. New Hampshire Dept. of Rev. Admin. " on Justia Law

In 1989, Richard Cormier conveyed property to CF Realty Trust by warranty deed, and CF Realty Trust recorded the conveyance in the registry of deeds shortly thereafter. In 1993, CF Realty Trust and Plaintiff C F Investments both filed for Chapter 11 bankruptcy. Pursuant to a proposed plan of reorganization, CF Investments succeeded to all of CF Realty Trust's assets, including the property, and the bankruptcy court entered a final decree approving the proposed plan in 1995. However, C F Investments never recorded its interest in the Property in the registry of deeds. Notwithstanding the bankruptcy plan, CF Realty Trust continued to conduct real estate business after 1995. In 2002, Robert Fuller, acting as trustee of CF Realty Trust, conveyed the property to himself as an individual and duly recorded the transaction in the registry of deeds. He then borrowed $219,000, secured by a mortgage on the property, from First Eastern Mortgage Corporation, and First Eastern recorded its interest. First Eastern then assigned its interest to Defendant Option One Mortgage Corp, and Option One duly recorded. In 2008, counsel for CF Investments notified defendant Option One of its competing claim to the Property, alleging that Fuller had acquired title to it unlawfully and had no authority to borrow money against it. In June 2008, Defendant Wells Fargo notified CF Investments of its intent to conduct a foreclosure sale of the property because Fuller had defaulted on his promissory note. CF Investments brought this action in superior court to enjoin the foreclosure sale, arguing that CF Realty Trust did not own the property at the time of its purported conveyance, that such conveyance was therefore invalid, and that consequently Fuller could not lawfully have granted a mortgage to First Eastern. The trial court disagreed, concluding that First Eastern was protected as a bona fide purchaser without notice of CF Investments' claims. After a bench trial, the Superior Court ruled in favor of Option One and Wells Fargo, concluding that the claim of First Eastern had priority over CF Investments' claim. Upon review, the Supreme Court affirmed. View "C F Investments, Inc. v. Option One Mortgage Corp." on Justia Law

Plaintiff Hansa Consult of North America, LLC (HCNA), appealed an order of the Superior Court that dismissed its complaint against Defendant Hansaconsult Ingenieurgesellschaft, mbH. HCNA, an American company based in Portsmouth, and hansaconsult, a German company, are both involved in the business of detecting fuel leaks at airports. The two companies began their relationship on cooperative terms, having entered into a distribution agreement in 2001 that made HCNA the exclusive distributor of hansaconsult's products and services throughout the United States and Canada. That relationship broke down, however, and the parties terminated their agreement on December 31, 2005. In 2006, hansaconsult commenced litigation against HCNA in New Hampshire and Germany. After years of fruitless settlement efforts, in January 2009 hansaconsult again sued HCNA for breaching the 2001 distribution agreement, but this time only in Germany. Believing this lawsuit to violate its settlement agreement protocol (SPA), HCNA moved in superior court, in June 2009, to enjoin hansaconsult's German lawsuit and to enforce the SPA. Before the superior court responded to that motion, apparently out of concerns that the statute of limitations would run on its claims, HCNA filed its own lawsuit against hansaconsult in New Hampshire asserting the same claims it had brought as counterclaims in its original 2006 New Hampshire action. Upon review, the Supreme Court affirmed the superior court's dismissal of Plaintiff's misappropriation-based claims, but reversed the dismissal of Plaintiff's market representations-based claims. The case was remanded for further proceedings. View "Hansa Consult of North America, LLC v. hansaconsult Ingenieurgesellschaft mbH " on Justia Law

Defendants Sedo, Inc. ad its founder, president and sole shareholder Goran Lucic, appealed a district court ruling that held both the company and Mr. Lucic liable to Plaitiff Holloway Automotive Group d/b/a Holloway Motor Cars of Manchester for breach of contract. Upon review, the Supreme Court affirmed the trial court's enforcement of a liquidated damages provision in the parties' contract, but concluded that the district court lacked jurisdiction to "pierce the corporate veil." Accordingly, the Court reversed the district court's award against Lucic as well as the award of attorney's fees. View "Holloway Automotive Group v. Lucic" on Justia Law

Plaintiff Salvatore Rabbia appealed a superior court order that ordered $37,000 held in escrow be dispersed to Intervenor Automotive Finance Corporation instead of to him. Plaintiff was a principal in the corporate Defendant Harvard Auto Sales (d/b/a "Hitcars.com"). The company was in the business of salvaging motor parts; Automotive Finance Corporation and Plaintiff were two of Harvard Motors' creditors. AFC financed Harvard's purchase of inventory. Plaintiff was involved in a long-standing dispute with Harvard. The issue before the Supreme Court invovled Plaintff's and AFC's competing claims to funds Harvard gave to their counsel to hold in escrow in the summer of 2008 while settlement discussions with Plaintiff were ongoing. Upon careful review of the superior court record, the Supreme Court concluded that a "transfer" occurred when the Court affirmed an earlier trial court decision requiring disbursement of the escrowed funds to Plaintiff. As a result, Plaintiff acquired both legal and equitable title to the escrowed funds, entitling him to take them free of any perfected security interest AFC may have had in them. The Court reversed the superior court decision with respect to release of the funds to AFC. The Court affirmed the superior court with respect to all other matters in this case. View "Rabbia v. Rocha" on Justia Law