Justia Business Law Opinion Summaries

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.

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.

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.

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.

Plaintiff Carleton, LLC appealed a superior court order finding that the Defendants' notice of intention to adopt articles of dissolution was timely filed. In 1995, Bukk Carleton and Defendant Richard Balagur formed defendant MTS Corporation (MTS) for the purpose of purchasing land and operating as a real estate holding company. In 2004, Carelton brought an action agains MTS and Richard Balagur to dissolve MTS, obtain payment of rent due MTS, and to remove Richard Balagur as an officer and director of MTS. Richard Balagur brought an action to compel MTS to transfer certain real estate to him, and to pay him certain funds. Adrienne Balagur, Richard's mother and a shareholder in MTS, successfully moved for leave to file an election to purchase shares in lieu of dissolving MTS pursuant to state law. The parties sued over how to value the shares in MTS. Concluding that the trial court did not err in its determination of the terms and conditions of purchase of the shares, the Supreme Court appointed a commissioner to sell MTS' real estate holdings should Mrs. Balagur not comply with the Court's order. One month after the Supreme Court issued its holding, the Balagurs and MTS filed a notice of intention to adopt articles of dissolution. Carelton objected, contending that the notice was not timely filed. The trial court held that the notice was timely filed and Carelton appealed. Upon review of the trial court record and the applicable legal authority, the Supreme Court agreed with the trial court that the notice of intent to adopt articles of dissolution was timely filed.

Respondent Parade Residence Hotel, LLC (Parade) appealed and Petitioner Harborside Associates, L.P. (Harborside) cross-appealed a superior court decision that partially affirmed and partially reversed the decision of the Portsmouth Zoning Board of Adjustment (ZBA) to grant Parade variances to install two parapet and two marquee signs on its hotel and conference center site. Upon review, the Supreme Court found evidence in the record to support the ZBA’s factual findings: "[b]ecause the ZBA used the correct test to determine whether the public interest and spirit of the ordinance factors were met and because there is evidence to support the ZBA’s findings on these factors, to the extent that the trial court ruled that the ZBA acted unlawfully when it found that the factors were met, the trial court erred." Further, the Court found there was evidence in the record supporting the ZBA’s finding that the signs would not "negatively impact surrounding property values ... the ZBA was also entitled to rely upon its own knowledge, experience and observations." The Court partially affirmed and partially reversed the superior court's decision, and remanded the case back for further proceedings.

Plaintiff Yvette Bouffard appealed a trial court's denial of her request for a declaratory judgment that she was entitled to uninsured motorist (UM) insurance coverage under her umbrella insurance policy issued by Defendant State Farm Fire & Casualty Company. Plaintiff was injured in 2006 from a car accident. She recovered $250,000 from the other party's insurer and her UM coverage under her personal automobile policy. Because her damages exceeded this sum, Plaintiff sought UM coverage under her umbrella policy. State Farm denied the claim because UM coverage was rejected on her original insurance application. The trial court found that Plaintiff authorized her husband to go to the insurance agency to purchase insurance for both of them, and that because the husband did not elect UM coverage, Plaintiff ratified his decision when she failed to object after reviewing the application in the car or after the policy arrived in the mail. Upon review, the Supreme Court found that the record supported the trial court's conclusion that the husband acted as Plaintiff's agent in rejecting UM coverage and affirmed the court's decision to deny Plaintiff declaratory relief.

Respondents North of the Border Tobacco, LLC (Tobacco) and Roll Your Own, LLC (RYO) appealed decisions of the Superior Court that enjoined them from allowing customers to use on-site cigarette-making machines to make rolled cigarettes with loose tobacco unless they make required escrow payments as required by law. An escrow fund was set up by the state to share the burden from damages for smoking-related health care costs. Respondents own tobacco shops that sell various tobacco products. At some point, for a rental fee, cigarette-making machines were installed for on-site customer use. The State filed suit in 2009 and sought an injunction against Respondents to stop selling or rolling cigarettes until they paid into the fund. Tobacco denied that it manufactured cigarettes and argued that it did not have to contribute to the fund. The trial court disagreed and issued the injunction. Upon review, the Supreme Court affirmed the trial court's decision to issue the injunction against Tobacco. However, the Court vacated the trial court's decision against RYO, holding that a preliminary injunction was premature prior to resolving several constitutional issues pertaining to RYO's business operations. Accordingly, the Court affirmed part, reversed part of the trial court's ruling, and remanded the case for further proceedings.