Borofsky, Amodeo-Vickery & Bandazian, P.A., lawyers in Manchester, NH, New Hampshire

123 N.H. 512, 464 A.2d 288

July 18, 1983

Shute, Engel & Morse P.A., of Exeter (Mark S. Gearreald on the brief and orally), for Clifford A. and Carole A. Heath.

Wadleigh, Starr, Peters, Dunn & Kohls, of Manchester (John A. Lassey on the brief and orally in No. 82-170, and Theodore Wadleigh on the brief and orally in No. 82-314), for Sears, Roebuck & Co.

Law Offices of James J. Kalled, of Ossipee (Robert G. Whaland on the brief and orally), for Charles and Marilyn Eastman.

Kearns, Colliander, Donahue & Tucker P.A., of Exeter (David S. Brown on the brief and orally), for Chase Machinery & Supply Co., Inc.

Holland & Aivalikles, of Nashua (William E. Aivalikles on the brief), by brief for Michael Welch.

Devine, Millimet, Stahl & Branch P.A., of Manchester (Lee C. Nyquist on the brief and orally), for American Honda Motor Co., Inc.

Craig, Wenners, Craig & McDowell P.A., of Manchester (Vincent A. Wenners, Jr., on the brief and orally), for William Cunningham.

Stark & Peltonen P.A., of Manchester (John E. Peltonen on the brief and orally), for Invacare.

Upton, Sanders & Smith, of Concord (Gilbert Upton and Gary B. Richardson on the brief, and Mr. Richardson orally), for Roger S. and Edith Kidder.

Sulloway, Hollis & Soden, of Concord (John W. Mitchell on the brief and orally), for Jean-Guy�s Used Cars and Parts, Inc.

Wadleigh, Starr, Peters, Dunn & Kohls, of Manchester (Ronald J. Lajoie on the brief, and Katherine M. Hanna orally), for Jordan-Milton Machinery, Inc.

Burns, Bryant, Hinchey, Cox & Shea, of Dover (James H. Schulte on the brief and orally), for Norman and Sandra Mallett.

Ransmeier & Spellman, of Concord (Brian T. McDonough on the brief and orally), for Bridgeport Machines, Division of Textron, Inc.

Ouellette, Hallisey, Dibble & Tanguay P.A., of Dover (William L. Tanguay on the brief and orally), for White Rogers Division, Emerson Electric Co.

Hamblett & Kerrigan P.A., of Nashua, for George D. Linehan, administrator of the estate of Francis A. Linehan.

Devine, Millimet, Stahl & Branch P.A., of Manchester, for Clark Equipment Corp.

Wiggin & Nourie, of Manchester, for International Harvester Co.

Ahlgren & Smith, of Manchester, and Laflamme, Champagne & Moquin, of Manchester, for Ethel L. and William R. Holt.

Law Offices of Emile Bussiere, of Manchester, for Raiche Mobile Homes, Inc.

Brown & Nixon P.A., of Manchester (Edward W. Stewart, Jr., on the brief), by brief for Chirstine Burnett & a., as amici curiae.

Stephen R. Fine, of Manchester, and Jerome L. Silverstein, of Nashua, by brief for Steven Tate, as amicus curiae.

Perkins, Phillips & Waters P.A., of Concord (Edmund J. Waters, Jr., on the brief), by brief for Roderick LeFort, administrator of the estate of Jeanne Ann LeFort, as amicus curiae.

Mulvey, Noucas & Sullivan P.A., of Portsmouth (William A. Mulvey, Jr., on the brief), by brief on behalf of toxic substance tort victims, as amici curiae.

Aeschliman & Tober, of Portsmouth, and Howard A. Specter, of Pittsburgh, Pennsylvania (Stephen L. Tober on the brief), by brief for the Association of Trial Lawyers of America and the New Hampshire Trial Lawyers Association, as amici curiae.

Leahy, Denault & Moody, of Claremont (Thomas P. Connair on the brief), by brief, pro se, as amicus curiae.

Myers & Laufer, of Concord (Howard B. Myers and Peter J. Duffy on the brief), by brief for Volkswagen of America, Inc., and Volkswagenwerk, A.G., as amici curiae.

AUTHOR: DOUGLAS

The plaintiffs in these consolidated appeals challenge the constitutionality of RSA chapter 507--D (Supp. 1979), governing suits for injuries caused by defective products.

In case No. 82-170, Clifford Heath was using a Sears drive ratchet to tighten the lug-bolt nuts while changing a rear tire on a logging skidder. The direction-change lever on the ratchet head snapped in two and a piece of the lever struck him, causing the near total loss of sight in one eye. The lever previously had been removed and reattached, allegedly because the metal used by the manufacturer was not suitable for northern climates and contracted in extremely cold weather. The United States District Court for the District of New Hampshire (Loughlin, J.), where the complaint was filed, transferred two questions to us by certification under Supreme Court Rule 34 : Whether a "foreseeable repair" is a "modification or alteration" within the meaning of RSA 507-D:3 (Supp. 1979), and whether that statutory section violates the equal protection provisions of either the State or the Federal Constitution.

In case No. 82-203, Roger Kidder was injured and permanently disabled after an accident involving a crane manufactured in 1958. Writs were brought against two prior owners and sellers of the crane for failure to disclose certain defects. The case was dismissed below by the Superior Court (Cann, J.), acting upon the recommendation of a Master (Frank B. Clancy, Esq.), because of the twelve-year statute of limitations contained in RSA 507-D:2, II(a) (Supp. 1979).

In case No. 82-275, Norman Mallett was severely injured when his hand was drawn into a vertical rotary cutting disc attached to a milling machine. Both his action and the separate loss of consortium action filed by his wife were dismissed by the Superior Court (Dunn, J.) under the three-year limitation provision of RSA 507-D:2, I and :5 (Supp. 1979). The plaintiffs challenge the three-year limitation as well as the "state of the art" defense set forth in RSA 507-D:4 (Supp. 1979).

In case No. 82-314, Sears, Roebuck & Co., as a defendant in another products liability case not presently before this court, seeks indemnity against the White Rogers Division of Emerson Electric Co., alleging that the latter�s defective gas control valve caused an explosion in a wall heater which injured a Hampton, New Hampshire resident. This case was dismissed by the Superior Court (Bean, J.) as not timely filed under RSA 507-D:2, III and :5 (Supp. 1979).

In case No. 82-458, Charles Eastman, a New Hampshire resident, was injured in 1979 when a piece of a saw blade broke off and struck him in the eye. Because suit was filed more than twelve years after the Massachusetts manufacturer parted with control of the saw, the United States District Court for the District of New Hampshire (Devine, C.J.) transferred to us the question whether RSA 507-D:2, II(a) (Supp. 1979) violates part one, article fourteen of the New Hampshire Constitution.

In case No. 82-485, Michael Welch was injured in an accident involving a Japanese motorcycle. His case was also transferred here by the Federal District Court (Loughlin, J.) for a determination of the constitutionality of the statute of limitations for products liability actions.

In case No. 82-497, William Cunningham, a paraplegic patient at the Veteran�s Administration Hospital in Manchester, was sitting on a portable commode when it collapsed, causing his leg to fracture. Again, the case was transferred here by the Federal District Court (Loughlin, J.) to determine the constitutionality of RSA 507-D:2, I (Supp. 1979).

All of these cases were consolidated for oral argument, and briefs from amici were filed as well. After the above cases were argued orally, cases Nos. 83-053 and 83-093 were filed in this court and consolidated for decision, without briefs or oral argument.

In case No. 83-053, Ethel Holt suffered permanent injuries from an explosion and fire in a mobile home that had been purchased from Raiche Mobile Homes, Inc., in March 1968. The suit was filed in June 1982, alleging that a defective bottled-gas cooking system in the mobile home caused the explosion and fire. The case was dismissed by the Superior Court (Flynn, J.) on the basis of the twelve-year limitation period provided in RSA 507-D:2, II(a) (Supp. 1979), the constitutionality of which is being challenged on appeal.

Finally, in case No. 83-093, Francis Linehan was killed in December 1979 in an accident involving a forklift manufactured by Clark Equipment Corp. and a tractor-trailer manufactured by International Harvester Co. Wrongful death actions were filed in December 1981, within the two-year limitation period of RSA 556:11. Nevertheless, based on a Master�s (Charles T. Gallagher, Esq.) recommendation, the Superior Court (Nadeau, J.) dismissed the suits because they were instituted more than twelve years after the defendants parted with possession or control of their machines or sold them. The decendent�s administrator argues that RSA 507-D:2, II(a) (Supp. 1979) is unconstitutional.

I. The Evolution of Products Liability Law.

The law of products liability is of relatively recent origin. It has been noted, in fact, that a scholarly commentator could remark as late as 1955 "�[p]roducts liability does not rank as a term of art in the courts of law.�" W. KEETON, D. OWEN, AND J. MONTGOMERY, PRODUCTS LIABILITY AND SAFETY, CASES AND MATERIALS 19 (1980) (hereinafter cited as PRODUCTS LIABILITY AND SAFETY) (quoting Wilson, Products Liability (pt. 1), 43 CALIF. L. REV. 614, 614 (1955)). Under Roman law at the time of Justinian, the vendor�s liability turned upon whether he knew of the defect. DIG. JUST. (Book 19, 533 A.D.), reprinted in PRODUCTS LIABILITY AND SAFETY, at 21. By the thirteenth century in England, the growth of crafts in a feudal agricultural society led to concern in the law for "quality good after the fashion of the day." Hamilton, The Ancient Maxim Caveat Emptor, 40 YALE L.J. 1133, 1142 (1931).

The maxim "caveat emptor" first appeared in Moore v. Hussey, 80 Eng. Rep. 243 (K.B. 1601). For the next few centuries in this country and in England, the buyer had best beware. PRODUCTS LIABILITY AND SAFETY, at 24. Even during the early years of this century, an action generally could not lie against a "remote" manufacturer with whom the buyer had not directly entered into a contract (lack of "privity"). W. PROSSER, HANDBOOK OF THE LAW OF TORTS � 93 , at 622 (4th ed. 1971). Where privity existed, negligence was the standard for recovery for personal injuries.

The Industrial Revolution during the nineteenth century led to the products liability revolution in this century, which began when a Scotsman named Donald MacPherson was injured after a wheel fell off his new 1910 Buick automobile. His $5,000 verdict was appealed on the ground that, because MacPherson had bought the Buick from a dealer instead of from Buick Motor Company, he should not be allowed to sue the manufacturer with whom he did not stand in privity. In the famous opinion by Justice Cardozo, then of the New York Court of Appeals, the manufacturer who placed the item into the stream of commerce was held to be "responsible for the finished product." MacPherson v. Buick Motor Co., 217 N.Y. 382, 394, 111 N.E. 1050, 1055 (1916).

In New Hampshire, we adopted the doctrine of strict liability in tort fourteen years ago in Buttrick v. Arthur Lessard & Sons, Inc., 110 N.H. 36, 39, 260 A.2d 111, 113 (1969).

The reasons for the evolution of the law in the area of products liability are many. We live in an era of national advertising and of nationwide distribution which can add or remove a product from our store shelves in a matter of days. Many of those nationally sold products contain chemical compounds and synthetics the side effects of which clearly cannot be anticipated. It is believed that if today�s products are capable of causing illness or physical injury, the risk of liability is best borne by the companies that profited from their sale, rather than by the unfortunate individual consumers. Buttrick v. Lessard, 110 N.H. at 39, 260 A.2d at 113; Greenman v. Yuba Power Products, Inc., 59 Cal. 2d 57, 63-64, 377 P.2d 897, 901, 27 Cal. Rptr. 697, 701 (1963).

As Justice Holmes noted, the life of the law is experience, and the modern experience with consumer products has been one of ever improving technology and rising standards of living, but also of injury and death:

"Americans--20 million of them--are injured each year in the home as a result of incidents connected with consumer products. Of the total, 110,000 are permanently disabled and 30,000 are killed. A significant number could have been spared if more attention had been paid to hazard reduction...

The exposure of consumers to unreasonable consumer product hazards is excessive by any standard of measurement."
PRODUCTS LIABILITY AND Safety, at 2 (quoting from National Commission of Product Safety, Final Report 1 (June 1970). Deterrence is also a valid consideration; without the stimulus of plaintiffs� products liability actions, the incentive to improve products and make them safer would not exist. See generally Cowan, Some Policy Bases of Products Liability, 17 STAN. L. REV. 1077 (1965).

The recent rise in products liability claims and lawsuits has resulted in a corresponding increase in insurance rates for those making or selling products. This, in turn, led our own legislature in 1978 to enact a "products liability" law in the interest of protecting manufacturers who, it was believed, were being unduly burdened by rapidly rising insurance rates. See N.H.S. JOUR. 1020-29 (1977). It is significant that, during debate, a number of legislators expressed skepticism about the fairness of a State products liability law and about its effectiveness in stabilizing insurance rates for New Hampshire manufacturers. This concern about the legislation�s effectiveness was based on the fact that most products manufactured in New Hampshire are sold in other States, and on the belief that the high insurance premiums paid by in-State manufacturers were attributable to the proliferation of lawsuits in larger industrialized States. See, e.g., Id. at 1016-17 (remarks of Sens. Preston and Bossie); N.H.S. JOUR. 593-94 (1978) (remarks of Sen. Bossie).

In fact, in conjunction with the enactment of RSA chapter 507-D (Supp. 1979), the New Hampshire Legislature authorized the creation of a fifteen-member Commission to Study Product Injury Reparations (commission) for the purpose of evaluating the legislation�s effect on products liability insurance rates. Laws 1978, 31:2. The legislature directed the commission to issue a final report by January 1, 1980, on the following matters: (1) the effectiveness of RSA chapter 507-D (Supp. 1979) "in improving the availability and affordability of products liability insurance"; (2) "other existing laws and practices which bear on the availability and affordability of such insurance"; and (3) "such changes as may be necessary to increase availability and affordability of such insurance, while at the same time allowing just compensation to those suffering injury from products." Laws 1978, 31:2.

The commission issued its final report on December 21, 1979, finding that it was "very difficult to assess the impact of RSA 507-D on the problems of availability and affordability" of products liability insurance. At the time of the report, the commission found that the "panic" rise in manufacturers� insurance rates had ended nationwide, and not just in New Hampshire, thereby tending to show that the State legislation was not the cause of the stabilization of rates. In conclusion, the commission stated that "[t]he problems of product liability insurance affordability and availability have eased, but it seems unlikely that this relaxation is attributable to the enactment of RSA 507-D."

Against this background, we now turn to the specific challenges raised by these consolidated cases.

II. The Statutes of Limitations for Products Liability Actions.

The constitutional challenges in these cases focus principally upon the twelve-year "statute of repose" in RSA 507-D:2, II(a) (Supp. 1979) and the three-year limitation provision of RSA 507-D:2, I (Supp. 1979). Generally, both federal and State courts recognize the power of legislative bodies to enact statutes of limitations which prescribe a reasonable time within which a party is permitted to bring suit for the recovery of his rights. The United States Supreme Court has stated:

"It may be properly conceded that all statutes of limitation[s] must proceed on the idea that the party has full opportunity afforded him to try his right in the courts. A statute could not bar the existing rights of claimants without affording this opportunity; if it should do so, it would not be a statute of limitations, but an unlawful attempt to extinguish rights arbitrarily, whatever might be the purport of its provisions."
Wilson v. Iseminger, 185 U.S. 55, 62 (1902).

The concept of allowing a reasonable period of time for suit to be brought after the cause of action arises is not new in our law, for along with "substantive rights, the first settlers brought over the incidental rights of adequate remedy and convenient procedure." State v. Saunders, 66 N.H. 39, 74, 25 A. 588, 589 (1889). Thus, the "right to an adequate remedy [exists] for the infringement of a right derived from the unwritten law." Id., 25 A. at 589. When it came time to establish a post-revolution form of government, the first part of our Constitution was devoted to chronicling our inherent rights. Part one, article fourteen of the New Hampshire Constitution provides:

"Every subject of this state is entitled to a certain remedy, by having recourse to the laws, for all injuries he may receive in his person, property, or character; to obtain right and justice freely, without being obliged to purchase it; completely, and without any denial; promptly, and without delay; conformably to the laws."
(Emphasis added.)

In an effort to facilitate the vindication of tort victims� rights, legislatures and courts have developed the "discovery" rule, under which a cause of action does not accrue until the plaintiff discovers or, in the exercise of reasonable diligence, should have discovered both the fact of his injury and the cause thereof. Raymond v. Eli Lilly & Co., 117 N.H. 164, 171, 371 A.2d 170, 174 (1977); see United States v. Kubrick, 444 U.S. 111, 117-25 (1979). The rule is premised on "the manifest unfairness of foreclosing an injured person�s cause of action before he has had even a reasonable opportunity to discover its existence." Brown v. Mary Hitchcock Memorial Hosp., 117 N.H. 739, 741-42, 378 A.2d 1138, 1139-40 (1977).

Although the legislature�s power is broad in determining how long a plaintiff may have to initiate a cause of action and when that limitation period begins to run, this power may not be exercised in an unconstitutional manner. In Carson v. Maurer, 120 N.H. 925, 424 A.2d 825 (1980), we held that, although not a fundamental right, "the right to recover for personal injuries is... an important substantive right." Id. at 931-32, 424 A.2d at 830. Thus, the classifications there at issue were required to be "reasonable" and to "rest upon some ground of difference having a fair and substantial relation to the object of the legislation... " Id. at 932, 424 A.2d at 831.

In Carson, we ruled that the legislature�s extension of the discovery rule to some medical injury plaintiffs, while denying its applicability to others, constituted an impermissible discrimination between classes of plaintiffs. We therefore held that RSA chapter 507-C (Supp. 1979) violated the equal protection provisions of our Constitution to the extent that it limited application of the rule to only a narrow class of medical-malpractice plaintiffs. Id. at 936, 424 A.2d at 833.

More recently, in Henderson Clay Products, Inc. v. Edgar Wood & Associates, Inc., 122 N.H. 800, 451 A.2d 174 (1982), we struck down RSA 508:4-b insofar as it precluded application of the discovery rule against architects, but allowed its application against materialmen and suppliers of labor. Relying upon Carson, we concluded:

"It is difficult to rationally permit a situation to exist whereby the supplier of labor and material has a liability exposure for a period of six years after the injury has been discovered or, in the exercise of due care, should have been discovered when, at the same time, the designers of the premises can be immunized from the liability before the cause of action even accrues or can be factually asserted."
Id. at 801-02, 451 A.2d at 175; see 26 ATLA L. Rep. 152-53 (1983).

Here, too, our standard of review is whether the statute-of-limitations provisions contained in RSA 507-D:2 (Supp. 1979) are reasonable and are substantially related to the legislative objective of reducing products liability insurance rates.

RSA 507-D:2, II(a) (Supp. 1979), the twelve-year "statute of repose," requires a products liability action to be brought not "later than 12 years after the manufacturer of the final product parted with its possession and control or sold it, whichever occurred last." The effect of this absolute limitation on suits against manufacturers is to nullify some causes of actions before they even arise. As compared with non-products liability causes of action, which generally must be brought within six years after they accrue, whenever that may be, see RSA 508:4 (Supp. 1981), we hold that the twelve-year bar imposed by RSA 507-D:2, II(a) (Supp. 1979) is neither reasonable nor substantially related to the object of the legislation.

The twelve-year limit is unreasonable because the mere purchase of pills produced by a drug manufacturer in California, or of a defective automobile made in Michigan, does not place the consumer on notice of a hidden defect injurious to his health or safety. When product defects lead to injury, our law has long provided for recovery without regard to when the substance or object was made or placed into the national or international stream of commerce. This is particularly important in cases where the injuries may not clearly manifest themselves until years later, such as the clear-cell adenocarcinomas found in the daughters of mothers who twenty or more years previously took a female estrogen pill commonly known as DES (diethylstilbestrol). See, e.g., Bichler v. Eli Lilly and Co., 55 N.Y.2d 571, 577-78, 436 N.E.2d 182, 184, 450 N.Y.S.2d 776, 778 (1982).

The unreasonableness inherent in a statute which eliminates a plaintiff�s cause of action before the wrong may reasonably be discovered was noted by Judge Frank in his dissent in Dincher v. Marlin Firearms Co., 198 F.2d 821, 823 (2d Cir. 1952), in which he condemned the "Alice in Wonderland" effect of such a result:

"Except in topsy-turvy land, you can�t die before you are conceived, or be divorced before ever you marry, or harvest a crop never planted, or burn down a house never built, or miss a train running on a non-existent railroad. For substantially similar reasons, it has always heretofore been accepted, as a sort of logical �axiom,� that a statute of limitations does not begin to run against a cause of action before that cause of action exists, i.e., before a judicial remedy is available to a plaintiff."
(Footnotes omitted.)

Nor do we think that the twelve-year "statute of repose" is substantially related to a legitimate legislative object. As previously noted, the crisis in products liability insurance had abated nationwide independent of RSA chapter 507-D (Supp. 1979). Nonetheless, persons injured by defective products are deprived arbitrarily of a right to sue the manufacturers responsible for those defective products by virtue of a statute that has become entirely divorced from its underlying purpose. Cf. Boucher v. Sayeed, 459 A.2d 87, 92-93 (R.I. 1983) (medical malpractice crisis existing at time of enactment but not at time of suit was insufficient basis to uphold statute against equal protection challenge). We do not believe that the legislature may constitutionally bar suits against manufacturers by products liability plaintiffs, as a class, twelve years after the manufacturer sold or parted with control of the product, while allowing other plaintiffs to recover for personal injuries not related to a defective product, at any time within six years after the cause of action accrues.

Our sister States of Alabama, Florida, and North Carolina have come to the same conclusion under similar provisions of their State Constitutions. Lankford v. Sullivan, Long & Hagerty, 416 So. 2d 996, 1003-04 (Ala. 1982) (ten-year statute void under ALA. CONST. art. I, � 13); Battilla v. Allis Chalmers Mfg. Co., 392 So. 2d 874, 874 (Fla. 1980) (relying upon Overland Const. Co., Inc. v. Sirmons, 369 So. 2d 572 (Fla. 1979)) (twelve-year statute void under FLA. CONST. art. I, � 21); Bolick v. American Barmag Corp., 54 N.C. App. 589, 592-95, 284 S.E.2d 188, 191-92 (1981), modified and aff�d, 306 N.C. 364, 293 S.E.2d 415 (1982) (six-year statute void under N.C. CONST. art. I, � 18). See generally Birnbaum, " First Breath�s" Last Gasp: The Discovery Rule in Products Liability Cases, 13 FORUM 279 (1977); Massery, Date-of-Sale Statutes of Limitation--A New Immunity for Product Suppliers, 1977 INS. L.J. 535; Phillips, An Analysis of Proposed Reform of Products Liability Statutes of Limitations, 56 N.C.L. REV. 663 (1978); Note, The Utah Product Liability Limitation of Action: An Unfair Resolution of Competing Concerns, 1979 UTAH L. REV. 149.

The plaintiffs also challenge the three-year statute of limitations established in RSA 507-D:2, I (Supp. 1979). This three-year period begins to run from the "time the injury is, or should, in the exercise of reasonable diligence, have been discovered by the plaintiff." As previously mentioned, personal actions generally must be brought within six years of the time they accrue, with the exception of libel or slander actions, to which a three-year limit applies. RSA 508:4 (Supp. 1981). We do not think that merely because a manufactured product causes the injury, or because the cause of action is legislatively defined as a "product liability action," see RSA 507-D:1, I (Supp. 1979), a plaintiff�s injury is therefore different from any other injury.

For instance, in the context of an automobile collision case, it makes no sense to say that for that part of an injury caused by another driver�s alleged negligence a six-year statute applies, while a product defect that may have been a factor in causing the harm to the plaintiff is subject to a three-year statute. Libel and slander were and are separate common-law torts which may reasonably be distinguished for statute of limitations purposes; however, there is no tort called "products liability."

For the reasons stated in our analysis of the twelve-year "statute of repose," we hold that RSA 507-D:2, I (Supp. 1979) also denies products liability plaintiffs equal protection of the laws. This is not to say that the legislature could not constitutionally establish a statute of limitations of three years for all personal injury actions if it so desired. However, it may not constitutionally discriminate against one class of plaintiffs for the purpose of protecting manufacturers by means of a statute of limitations which is neither reasonable nor substantially related to a legitimate legislative object.

The last statute-of-limitations provision under attack in these cases, RSA 507-D:2, III (Supp. 1979), requires third-party claims in products liability cases to be initiated within ninety days of the end of the time periods set forth in paragraphs I and II of that section. To the extent that the statute of limitations for third-party actions is dependent upon RSA 507-D:2, I and II(a) (Supp. 1979), which we have already ruled invalid, we further hold that RSA 507-D : 2, III (Supp. 1979) is unconstitutional.

Although the validity of the remaining provisions of RSA 507-D:2 (Supp. 1979) has not been questioned in the cases before us, these provisions would appear to be subject to the same constitutional infirmity as the provisions actually challenged on appeal. Nor are the provisions of the section severable from one another, due to their interrelationship. Accordingly, we must void RSA 507-D:2 (Supp. 1979) in its entirety.

III. Modification or Alteration of Products.

Next, we turn to RSA 507-D:3 (Supp. 1979), which provides that a "defendant may be held liable only for harm that would have occurred if the product had been used in its unaltered and unmodified condition and shall not be held liable for harm arising in any part from alteration and modification of the product by another." Alterations or modifications based on the manufacturer�s specifications or instructions do not bar the plaintiff�s cause of action.

The plaintiffs maintain that this section violates the equal protection provisions of our State Constitution in two respects. First, they argue that the challenged provision denies persons injured by modified or altered products the same right to recover for personal injuries that is available to other products liability plaintiffs. Second, they contend specifically that RSA 507-D:3 (Supp. 1979) impermissibly distinguishes between persons injured as a result of product modification and persons injured as a result of product misuse. For the reasons stated below, we rule section three of the products liability statute to be unconstitutional.

Under our decision in Thibault v. Sears, Roebuck & Co., 118 N.H. 802, 395 A.2d 843 (1978), the parties to a products liability action are entitled to have the jury " compare the causal effect of the defect in the product or design with the affirmative defense of misconduct of the plaintiff and allocate the loss... " Id. at 813, 395 A.2d at 850 (emphasis added). RSA 507-D:3 (Supp. 1979), however, provides that a defendant "shall not be held liable for harm arising in any part from alteration and modification of the product by another." (Emphasis added.) This provision thus operates to establish an absolute defense in products liability cases where the modification or alteration of the product contributes in any way to the plaintiff�s injury, regardless of the dangerousness of the product or the insignificance of the modification. Consequently, RSA 507-D:3 (Supp. 1979) denies to persons injured by modified products the same right of apportionment and at least partial recovery provided to all other products liability plaintiffs in Thibault.

Moreover, RSA 507-D:3 (Supp. 1979) distinguishes impermissibly between plaintiffs injured by modified products and plaintiffs injured by misused products. Under current New Hampshire law, a plaintiff may recover some percentage of his damages where his misuse of a product did not contribute more to the accident than did the manufacturer�s conduct, and the misuse is found to have been foreseeable to the manufacturer. This holds true whether the product is misused by the plaintiff, see Thibault v. Sears, Roebuck & Co., 118 N.H. at 809, 395 A.2d at 847, or by a third party, see Reid v. Spadone Mach. Co., 119 N.H. 457, 465, 404 A.2d 1094, 1099 (1979). In contrast, RSA 507-D:3 (Supp. 1979) by its own terms bars recovery altogether by plaintiffs whose "misconduct" takes the form of modification or alteration not in accordance with the manufacturer�s specifications or instructions, irrespective of how foreseeable such a modification may have been.

The overall effect of RSA 507-D:3 (Supp. 1979) is both arbitrary and inequitable. For example, the statute would totally bar recovery by the plaintiff in case No. 82-170, who was injured when using a modified Sears tool, simply because a modification contributed to the injury. Yet if the same plaintiff had received the identical injury as a result of actually misusing an unmodified wrench, he would be entitled to sue the manufacturer and have the jury consider the foreseeability of such misuse in the balance of comparative responsibility. As we noted in Thibault, the term "plaintiff�s misconduct" includes, "where applicable, product misuse or abnormal use" as well as the older concept of "assumption of the risk" or "voluntarily and unreasonably proceeding to encounter a known danger." 118 N.H. at 812, 395 A.2d at 849. Obviously, whether modified or not by a plaintiff, a product may be misused or altered from its foreseeable use to such a degree as to absolve the manufacturer of liability. But these are questions of fact to be resolved by the trier of fact.

While RSA 507-D:3 (Supp. 1979) may result in some slight benefit to manufacturers, such an effect is clearly outweighed by the severe restriction of plaintiff�s rights to recover for injuries caused by modified or altered products. See Carson v. Maurer, 120 N.H. at 936-37, 424 A.2d at 833-34. We conclude that RSA 507-D:3 (Supp. 1979) denies equal protection of the laws under the New Hampshire Constitution and is therefore invalid.
IV. The State of the Art Defense.

RSA 507-D:4 (Supp. 1979) codifies what is known in products liability law as the "state of the art" defense. Under this section of the statute,

"it is an affirmative defense that the risks complained of by the plaintiff were not discoverable using prevailing research and scientific techniques under the state of the art and were not discoverable using procedures required by federal or state regulatory authorities charged with supervision or licensing of the product in question. Discoverability of risks shall be measured as of the time the manufacturer parted with possession and control of, or sold the product in question, whichever occurred last."
The plaintiffs have raised a general objection to this provision on equal protection grounds. One assertion raised by the plaintiffs is that RSA 507-D:4 (Supp. 1979) codifies current industry practice as the standard by which "discoverability of risk" is to be measured. We find this contention to be without merit.

It has long been recognized that because entire industries may lag behind in the development of safer and technologically feasible alternatives, "custom and usage" is an unsound standard of liability. See The T. J. Hooper, 60 F.2d 737, 740 (2d Cir.), cert. denied, 287 U.S. 662 (1932); Hancock v. Paccar, Inc., 204 Neb. 468, 479-80, 283 N.W.2d 25, 35 (1979). The legislativehistory of RSA 507-D:4 (Supp. 1979) indicates the legislature�s intent to reject mere compliance with current industry practice as a defense to liability. See N.H.S. JOUR. 1028-29 (1977) (remarks of Sen. Bradley). Instead, RSA 507-D:4 (Supp. 1979) holds a defendant in a products liability action to the standard of technological feasibility at the time of sale or distribution. See Phillips, The Standard for Determining Defectiveness in Products Liability, 46 U. CIN. L. REV. 101, 115 & n.71 (1977).

In recent years, some courts have held manufacturers liable for defects which, at the time of sale, were "scientifically unknowable." See, e.g., Beshada v. Johns-Manville Products Corp., 90 N.H. 191, 202-09, 447 A.2d 539, 545-49 (1982). By imposing what amounts to "absolute" liability upon manufacturers, such judicial decisions sever the traditional connection between tort liability and fault. To hold Ford Motor Company to today�s standard of scientific knowledge when determining liability for an injury caused by a Model T bought in 1921 appears to us to be clearly unreasonable.

We view a properly worded "state of the art" defense as being a rational means of addressing manufacturers� reasonable objection to application of modern legal concepts and scientific knowledge to products made decades ago. We therefore find it both reasonable and constitutionally permissible to raise an affirmative defense based upon "discoverability of risk" as measured by the "state of the art" at the time of distribution or sale.

We note that the standard enunciated in RSA 507-D:4 (Supp. 1979) is consistent with our decision in Thibault v. Sears, Roebuck & Co., 118 N.H. at 807, 395 A.2d at 846, as well as with the judicial actions of many of our sister States. See, e.g., Hancock v. Paccar, Inc., 204 Neb. at 479-80, 283 N.W.2d at 35; Boatland of Houston, Inc. v. Bailey, 609 S.W.2d 743, 746 (Tex. 1980). As we stated in Thibault, "strict liability is not a no-fault system of compensation. The common-law principle that fault and responsibility are elements of our legal system applicable to corporations and individuals alike will not be undermined or abolished" solely by a concept of spreading of risk and cost in this State. 118 N.H. at 806 , 395 A.2d at 845-46.

Despite the constitutional validity of RSA 507-D:4 (Supp. 1979) viewed in isolation, the question of its severability, from the portions of the products liability statute which have been stricken, remains. Indeed, the plaintiffs have asserted that if we find enough of RSA chapter 507-D (Supp. 1979) to be unconstitutional, we should follow our decision in Carson v. Maurer and strike down the statute in its entirety. We agree.

In Carson, we addressed the severability of the unconstitutional provisions of RSA chapter 507-C (Supp. 1979), the medical-malpractice statute, from the remainder of that statute. We stated that we were "not sure that the remaining provisions of RSA ch. 507-C (Supp. 1979) would have been enacted without the rest." 120 N.H. at 946, 424 A.2d at 839. Accordingly, the entire statute was stricken.

Here, too, we are not sure whether the legislature would have enacted a "state of the art" defense in the absence of all of the unconstitutional provisions of the products liability statute. We must therefore leave that question to the legislature. Because we have stricken the remainder of the substantive sections of the statute, we void the entire chapter.

In light of our holding that RSA chapter 507-D (Supp. 1979) is void in its entirety, the plaintiffs� argument that the retrospective application of the chapter under RSA 507-D:5 (Supp. 1979) is unconstitutional is moot.

Nos. 82-203, 82-275, 82-314, 83-053, and 83-093 are reversed and remanded; Nos. 82-170, 82-458, 82-485, and 82-497 are remanded to the United States District Court.

All concurred.

NANCY PHELPS AND RICHARD PHELPS
vs.
HASKELL KINGSTON, D.M.D.

No. 87-036

130 N.H. 166, 536 A.2d 740

December 7, 1987

The Legal Clinics P.A., of Manchester (Stephen E. Borofsky on the brief and orally), for the plaintiffs.

Devine, Millimet, Stahl and Branch P.A., of Manchester (George R. Moore and Thomas Quarles, Jr., on the brief, and Mr. Quarles orally), for the defendant.

AUTHOR: JOHNSON

The plaintiffs, Nancy Phelps and her husband Richard Phelps, appeal from the Superior Court�s (Gray, J.) dismissal of their complaint for lack of in personam jurisdiction over the defendant, Haskell Kingston, D.M.D. For the reasons stated below, we hold that the superior court does have in personam jurisdiction over the defendant, and therefore reverse and remand.

During the late winter or early spring of 1985, plaintiff Nancy Phelps, a New Hampshire resident, developed what she later found to be a cancerous parotid gland tumor at the corner of the right side of her jaw. In late March of that year, while visiting her regular dentist, Dr. James Malloy, in Portsmouth, she mentioned the then undiagnosed lump and accompanying pain in her jaw to attending staff. The receptionist, who worked both part-time for Dr. Malloy in Portsmouth and part-time for the defendant, Dr. Kingston, offered to make the plaintiff an appointment with Dr. Kingston, who she allegedly said had experience with such problems, at his office in Eliot, Maine. The plaintiff agreed, and the receptionist arranged an appointment for April 8, 1985. On that date Nancy Phelps saw Dr. Kingston at his Eliot, Maine office. As a result of that visit, she now sues him for dental malpractice, alleging that he failed reasonably and properly to diagnose and treat her condition, failed properly to follow-up her case, and prematurely discharged her from his care. She contends that, as a result of this alleged malpractice, the cancerous tumor grew and spread. This, she says, ultimately necessitated radical surgery, which caused serious nerve damage and disfigurement to the right side of her face. It also created the danger of the cancer�s terminal recurrence. In a separate but related action, the plaintiffs also sue Dr. Ira Schwartz, a Portsmouth internist who apparently lacks any contact with the State of Maine, for malpractice arising out of his examination of Nancy Phelps regarding the same jaw condition.

Dr. Kingston is a resident of South Berwick, Maine, with his sole office in Eliot, Maine. He holds a valid New Hampshire dental license and has been licensed to practice dentistry in this State since 1982. He thus continues to be subject to regulation by the board of dental examiners of New Hampshire. See RSA ch. 317-A. Indeed, Dr. Kingston was a New Hampshire resident from 1981 through 1983 and practiced dentistry in this State from 1981 through 1984. Of the 1350 families that he treats, approximately 100 reside in New Hampshire, as do two of his eight employees. Dr. Kingston also advertises his practice in the Yellow Pages for the Portsmouth, Exeter, Dover, Somersworth and Rochester area.

On the defendant�s motion to dismiss the action against him, the trial court issued the following order dismissing the plaintiffs� complaint for lack of personal jurisdiction:

"The Court finds that the tortious act complained of happened, if at all, in Maine and therefore RSA 510:4(I) does not apply. The fact that the Defendant has contacts with N.H. is not determinative. RSA 510:4(I) states that jurisdiction arises out of the �acts enumerated above� and one of the �acts enumerated above� is the commission of a �tortious act within this state.� Non relevant contacts with N.H. are therefore insufficient to give rise to jurisdiction. The Motion to Dismiss is granted."
The plaintiffs now appeal this decision, contending that New Hampshire may exercise personal jurisdiction over the defendant consistent with RSA 510:4, I , and the United States Constitution.

In determining whether or not it may exercise in personam jurisdiction over a foreign defendant, a court must typically engage in a two-part inquiry. It must first determine whether the State�s long-arm statute authorizes such jurisdiction. Weld Power Industries v. C.S.I. Technologies, 124 N.H. 121, 125, 467 A.2d 568, 570 (1983); Tavoularis v. Womer, 123 N.H. 423, 426, 462 A.2d 110, 112 (1983); Cove-Craft Industries v. B. L. Armstrong Co. Ltd., 120 N.H. 195, 198, 412 A.2d 1028, 1030 (1980). If the long-arm statute would establish jurisdiction over the defendant, the court must further ask whether the defendant has "minimum contacts" with the State sufficient to insure that suit against him there does not offend "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (citation omitted); see Hall v. Koch, 119 N.H. 639, 644, 406 A.2d 962, 965 (1979). The plaintiff bears the burden of demonstrating facts sufficient to establish personal jurisdiction over the defendant. Weld Power Industries, supra at 123, 467 A.2d at 469; Kibby v. Anthony Industries, Inc., 123 N.H. 272, 274, 459 A.2d 292, 293-94 (1983). In determining whether this burden has been met, the court will take facts that the plaintiff has properly pleaded as true and will construe reasonable inferences therefrom in the manner most favorable to the plaintiff. Weld supra; Lawton v. Great Southwest Fire Ins. Co., 118 N.H. 607, 610, 392 A.2d 576, 578 (1978); Bell v. Pike, 53 N.H. 473, 475 (1873).

RSA 510:4, I , the New Hampshire long-arm statute that confers jurisdiction over individuals, provides that:

"Any person who is not an inhabitant of this state and who, in person or through an agent, transacts any business within this state, commits a tortious act within this state, or has the ownership, use, or possession of any real or personal property situated in this state submits himself, or his personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from or growing out of the acts enumerated above."

The question whether RSA 510:4, I , provides for jurisdiction over a foreign defendant in a malpractice suit, when all examination and treatment occurred outside the State, is not one that this court has previously addressed. However, we have held that the legislature intended RSA 510:4, I , "to be construed in the broadest legal sense to encompass personal, private and commercial transactions." Leeper v. Leeper, 114 N.H. 294, 297, 319 A.2d 626, 628 (1974) (citations omitted). We have further held that the legislature�s purpose in enacting the statute was to provide resident plaintiffs a convenient forum in which to sue for injuries attributable to foreign defendants. Tavoularis, supra at 425, 462 A.2d at 112. In light of these legislative purposes, we have further construed both RSA 510:4, I , and its corporate parallel, RSA 293-A:121 , to provide jurisdiction over foreign defendants to the full extent that the statutory language and due process will allow. Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984); Tavoularis, supra at 426, 462 A.2d at 112; Roy v. Transairco, Inc., 112 N.H. 171, 176, 291 A.2d 605, 608 (1972); Seymour v. Parke, Davis & Company, 294 F. Supp. 1257, 1259 (D.N.H. 1969), aff�d, 423 F.2d 584 (1970); Roy v. North American Newspaper Alliance, Inc., 106 N.H. 92, 94-95, 205 A.2d 844, 845-46 (1964).

As noted above, a court�s principal inquiry in determining whether the due process clause permits personal jurisdiction over a foreign defendant is whether the defendant maintains minimum contacts with the forum State. Absent such contacts, the fourteenth amendment forbids the State to exercise jurisdiction. Williams v. Williams, 121 N.H. 728, 732, 433 A.2d 1316, 1319 (1981); Kulko v. California Superior Court, 436 U.S. 84, 91-93, reh�g denied, 438 U.S. 908 (1978).

The question whether sufficient contacts exist to warrant jurisdiction is one that can be answered only in light of the facts of the particular case:

"Like any standard that requires a determination of �reasonableness,� the �minimum contacts� test of International Shoe is not susceptible of mechanical application; rather, the facts of each case must be weighed to determine whether the requisite �affiliating circumstances� are present. We recognize that this determination is one in which few answers will be written �in black and white. The greys are dominant and even among them the shades are innumerable.�"
Kulko, supra at 92 (quoting Estin v. Estin, 334 U.S. 541, 545 (1948)) (citations omitted). Nevertheless, the United States Supreme Court has frequently stated that the minimum contacts inquiry is best informed by asking whether the defendant�s "conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). The Supreme Court has further elucidated this inquiry by stating that, where the litigation in question arises out of or relates to the defendant�s forum contacts, the minimum contacts requirement is satisfied provided the defendant "has �purposefully directed� his activities at residents of the forum." Burger King v. Rudzewicz, 471 U.S. 462, 472 (1985); Kenerson v. Stevenson, 604 F. Supp. 792, 793-94 (D. Me. 1985); Hanson v. Denckla, 357 U.S. 235, 253 (1958). However, even where the litigation does not "arise out of or relate to" forum contacts, those contacts directed at New Hampshire citizens may satisfy due process for jurisdictional purposes provided they are substantial. Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414-15 (1984); Perkins v. Benguet Mining Co. 342 U.S. 437, 445-47 (1952).

Whether the defendant�s contacts with the forum are sufficient to support jurisdiction is the consideration most critical to the due process inquiry. However, it is not the only one which the court should take into account. Rather:

"Once it has been decided that a defendant purposefully established minimum contacts within the forum State, these contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with �fair play and substantial justice.� Thus courts in �appropriate case[s]� may evaluate �the burden on the defendant,� �the forum State�s interest in adjudicating the dispute,� �the plaintiff�s interest in obtaining convenient and effective relief,� �the interstate judicial system�s interest in obtaining the most efficient resolution of controversies,� and the �shared interest of the several States in furthering fundamental substantive social policies.� These considerations sometimes serve to establish the reasonableness of jurisdiction upon a lesser showing of minimum contacts than would otherwise be required."
Burger King, supra at 476-77 (citations omitted). Thus, where litigation relates to the defendant�s activities purposely directed at the forum State, the sufficiency of these activities or contacts reasonably to forewarn him of the possibility of suit in the forum, weighed in combination with other factors relevant to affording substantial justice, will determine whether the State may constitutionally exercise personal jurisdiction over the defendant.

We hold that, in this case, the defendant does have sufficient forum contacts related to the litigation in question to raise in him the reasonable expectation of being haled into a New Hampshire court. First, plaintiffs� suit seeks damages from Dr. Kingston in tort. The acts allegedly constituting the tort (examination, diagnosis, treatment, failure to follow up, and early discharge) arguably occurred entirely in Maine. However, the injury or damage for which the plaintiff now seeks recovery (the growth and spread of cancer necessitating radical surgery and resulting in nerve damage, disfigurement, and risk of recurrence) apparently occurred predominantly in New Hampshire. Many courts have held that in personam jurisdiction over a foreign defendant in tort suits does not offend due process merely because the injury alone occurred in the forum State. Due process concerns may be satisfied provided that it was reasonably foreseeable that the consequences of the defendant�s out-of-state activities would manifest themselves in the forum. Tavoularis, 123 N.H. at 425-27, 462 A.2d at 113-14. Moreover, this court has specifically held that: "[b]ecause the long-arm statute must be construed in its broadest legal sense to give effect to legislative intent... the fact that only the alleged injury occurred within the State does not preclude New Hampshire courts from subjecting a non-resident to their jurisdiction under the long-arm statute." Id. at 426, 462 A.2d at 112.

In examining and counseling Nancy Phelps at his Maine office before sending her home to New Hampshire, the defendant could have had no doubt that any injurious consequences of his actions would be felt in New Hampshire. Such a result of treating a New Hampshire resident is in no sense fortuitous or unexpected. While we do not hold that defendant�s conduct could by itself confer jurisdiction simply because the plaintiff is a New Hampshire resident, it is nevertheless a contact relevant to the jurisdictional inquiry.

Moreover, defendant�s relevant contacts with New Hampshire are not limited to the fact that it was reasonably foreseeable that the injuries allegedly resulting from his care would ultimately become apparent in this State. Dr. Kingston, who had lived and practiced in New Hampshire for approximately three years, continued to hold a valid New Hampshire dental license even after he moved to South Berwick, Maine and set up a practice in Eliot, Maine, directly across the New Hampshire border. He voluntarily placed an advertisement in the Yellow Pages, which he knew or should have known circulated in Portsmouth and the surrounding towns of New Hampshire, as well as in Eliot, Maine, as follows:

"�ALL PHASES OF DENTISTRY�
PRACTICED WITH GENTLENESS
FAMILY & PREVENTIVE DENTISTRY
COSMETIC DENTISTRY
TMJ & MYOFACIAL PAIN DISFUNCTION IMMEDIATE EMERGENCY CARE
DAY, EVENING AND SAT. APPTS AVAIL.
NEW PATIENTS ALWAYS WELCOME"

Presumably at least in part as a result of his advertising, his New Hampshire license, his previous New Hampshire practice, and his close proximity to the border, approximately 7 12% of the defendant�s patients were New Hampshire residents. However, it should be made clear that Dr. Kingston�s Yellow Page advertisement, by itself, would not subject him to New Hampshire jurisdiction. Rather, it is the totality of his contacts with New Hampshire that determines that he is subject to suit in New Hampshire.

The fact that Nancy Phelps happened to visit the defendant as a result of a conversation with his receptionist, as opposed to having read his paid Yellow Pages advertisement, is unimportant. The defendant, through various means, purposely sought and made himself attractive to New Hampshire residents who, in the ordinary course of their day-to-day activities, found it necessary to seek a dentist possessing particular skills. Nancy Phelps was not the resident of some remote State (with which the defendant had no related contacts) who, finding herself suddenly in need of dental services, arrived on his doorstep solely by happenstance. She was precisely the type of person whose business the defendant actively sought to obtain. In short, the effects of the alleged malpractice were felt in New Hampshire by a plaintiff of the type that defendant�s forum contacts sought to attract. See Soares v. Roberts, 417 F. Supp. 304, 307 (D.R.I. 1976). It is therefore neither fortuitous nor in any way surprising that the defendant is now asked to appear to defend charges in New Hampshire that arise out of his treatment of Nancy Phelps, and it is entirely just that we require him to do so.

While we need not address the issue, in light of our holding above, we note in passing that, contrary to the plaintiffs� contentions, the fact that defendant�s part-time receptionist suggested his name to Nancy Phelps and made her an appointment with him does not constitute a forum contact out of which this litigation arises. Plaintiffs do not allege that the defendant made patient solicitation part of his receptionist�s duties. The receptionist does not appear to have been employed as an agent for this purpose, and to hold that her actions, in and of themselves, constitute contacts relevant to the due process inquiry would be to construe as purposeful an event over which the defendant apparently had no control.

In addition to the defendant�s New Hampshire contacts related to this litigation, other factors support our decision that the exercise of personal jurisdiction over him comports with the "fair play and substantial justice" requirement of International Shoe. Particularly relevant are the short distance between the defendant�s home and office and the Rockingham County Superior Court in New Hampshire, where this case would be tried, the fact that by according personal jurisdiction over the defendant in New Hampshire we enable the plaintiff to consolidate two related malpractice actions, and the fact that the State of New Hampshire has a significant interest in affording injured New Hampshire plaintiffs a forum in which to litigate the question of liability for their injuries.

Therefore, because of the significant connection among Dr. Kingston, this State, and the litigation in question, we hold that the United States Constitution and the laws of this State permit the New Hampshire courts to exercise in personam jurisdiction over the defendant. In view of this result, we need not address the plaintiffs� equal protection argument.

Reversed and remanded.

All concurred.

KEVIN DAVIS, Plaintiff, Appellee,

BROWNING-FERRIS INDUSTRIES, INC., Defendant, Appellant.

No. 89-1943.

898 F.2d 36

UNITED STATES COURT OF APPEALS,

FIRST CIRCUIT.

Heard Feb. 6, 1990.

Decided March 27, 1990.

In jury trial on issue of damages in personal injury action, the United States District Court for the District of New Hampshire, Martin F. Loughlin, J., refused defendant's request to charge on matter of discounting future earnings and refused post verdict relief. On appeal, the Court of Appeals, Bailey Aldrich, Senior Circuit Judge, held that: (1) even if refusal to charge jury on discounting lost earnings damages was error under New Hampshire law, error was not prejudicial, and (2) under applicable federal law, plaintiff's counsel could not state amount of ad damnum to jury.

Affirmed.

Matthias J. Reynolds with whom James M. Costello and Devine, Millimet, Stahl & Branch, Manchester, N.H., were on brief for defendant, appellant.

Stephen E. Borofsky with whom John M. Lewis, Jennifer Rood and The Legal Clinics, Professional Ass'n, Manchester, N.H., were on brief for plaintiff, appellee.

JUDGES: BREYER, ALDRICH and SELYA, Circuit Judges.

AUTHOR: BAILEY ALDRICH, Senior Circuit Judge.

Plaintiff Kevin Davis, a laborer, was injured when a platform on which he was standing came out from under him, leaving him with a permanent disc problem. The basis of defendant's liability does not appear, but it was conceded after a summary trial. Thereafter damages were tried to a jury. The jury answered special questions, reaching a total figure of $238,000, $136,000 being for lost earnings over a 26 year work expectancy. While, in every area--e.g., swimming fee expense the rest of his life, although plaintiff had already stopped swimming for over a year--plaintiff presented his damages in day-glo paint, we would not overrule the court's finding that they were not unacceptably excessive. We do, however, have one difficulty. Plaintiff pinned his lost earnings figure on the difference between the hourly rate of a full-time job he was holding down and the rate for a new job he did not receive because of his injury, multiplied, without discounting, for 26 years. No economic experts had been called by either party. Plaintiff argued to the jury in favor of straight multiplication. Defendant argued there must be discounting, saying, not only forcefully, but in violation of a basic rule of attorney's conduct, "I'm going to tell you that I think this is outrageous for many reasons." [FN1] The court refused defendant's request to charge as to discounting, and refused post verdict relief, either to perform a discounting itself, or to grant a new trial. Defendant appeals. We affirm.

FN1. Cf. Willey v. Ketterer, 869 F.2d 648, 650 (1st Cir.1989), a New Hampshire case, citing long-existing, and uniform, bar associations' rules of ethics, that counsel must not express personal opinions.

In the matter of discounting future earnings, we remarked in Brochu v. Ortho Pharmaceutical Corp., 642 F.2d 652, at 664 n. 17 (1st Cir.1981), that this was a difficult subject, adding, "New Hampshire has apparently not examined the issue of discounting in recent years." This is still the case. The court got off, long ago, to a somewhat confusing start. In Humphreys v. Ash, 90 N.H. 223, 6 A.2d 436 (1939), the court charged the jury it "should award only the present worth of any element of damages." The supreme court reversed, saying, at page 230, "It is not to be assumed that average jurors have mathematical knowledge sufficient for an understanding of the words, or enough skill to calculate present worth." Seven months later, in Roussin v. Blood, 90 N.H. 391, 10 A.2d 224 (1939), the court said, at 393-94,

They were told to discount, but not at what rate, nor was specific evidence given to them regarding the standard rate. However the jury may have been supposed to have some knowledge of current interest rates. Most men know something about savings accounts and about the rates at which towns are able to borrow money. With such common knowledge the jury could have calculated the discount with approximate accuracy, and the verdict that they gave is conformable to the rule laid down in Humphreys v. Ash.

We get little more help out of the more recent cases. At the same time, there is none that holds it is not error to refuse altogether to charge that recovery is to be limited to the present worth of future damages. Our question is whether refusal was prejudicial error in this particular case.

As a matter of arithmetic, plaintiff's straight calculations for 26 years, undiscounted, produced the figure of $174,803. The jury returned $136,000. Accordingly, while there could be other explanations, seemingly it did discount. Although on straight interest tables, even this figure was large, there could be other discounting methods. See Roussin; Ortho. Any concern we might have to pursue this subject further, or to find the court's failure to charge on the matter prejudicial, is offset by our noting that the jury had the benefit of defendant's improper summation. We leave it at that.

We will deal, however, with plaintiff's disclosing the ad damnum to the jury. Following the New Hampshire state practice, the court charged the jury,

[W]e apply New Hampshire law in this case; an attorney can state the amount of the ad damnum, but I must caution you in this regard. This is not evidence in this case. But you can consider it.

Defendant did not except, and we do not consider it plain error, but we do state that this charge was error. Since, by the very hypothesis, this is a matter of procedure, the federal law applies, even though a diversity case. Morris v. Getscher, 708 F.2d 1306, 1309 (8th Cir.1983); Smith v. Mill Creek Court, Inc., 457 F.2d 589 (10th Cir.1972); cf. Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965). The ad damnum is, blatantly, an opinion of counsel. Cf. Waldorf v. Shuta, 896 F.2d 723 (3d Cir.1990) (plaintiff's counsel may not, in closing argument, request a dollar figure for pain and suffering). Indeed, it is even less; it is a mere psychological expression of hope. In addition to the opinion rule, it could well be said to violate Fed.R.Civ.P. 11, as not being "well grounded in fact." It was error for the court to inform the jury, "[Y]ou can consider it." On what basis was it to consider it? It would still be wrong to have the ad damnum disclosed to the jury and tell it it could not consider it; plaintiff hoping, meanwhile, that it, nevertheless, would do so, which it well might. The jury should not know the ad damnum. As we said in Ouelette v. Champagne, 296 F.2d 636, 638 (1st Cir.1961), "[There is a] general impression among laymen that the amount of the ad damnum measures the importance of the case." Cf. Aggarwal v. Ponce School of Medicine, 745 F.2d 723, 727 (1st Cir.1984). At that time we failed to note that we were not bound by the state rules of pleading. We now exclude it.

Affirmed.

APPEAL OF DONNA L. HURST

No. 93-862

139 N.H. 702, 660 A.2d 1143, 1995 N.H. LEXIS 74

July 6, 1995, Decided

Released for Publication August 2, 1995.

Engel, Gearreald & Gardner, P.A., of Exeter (Mark S. Gearreald on the brief and orally), for the petitioner.

Roussos, Hage & Hodes, P.A., of Manchester (Edward F. Patch and John B. FitzGerald, III on the brief, and Mr. Patch orally), for Arthur�s Market.

Jeffrey R. Howard, attorney general (Mark P. Hodgdon, assistant attorney general, on the brief), for the State, as amicus curiae.

McLane, Graf, Raulerson & Middleton, P.A., of Portsmouth (J. Kirk Trombley and Kevin M. Leach on the brief), for the New Hampshire Trial Lawyers Association, as amicus curiae.

AUTHOR: JOHNSON

The petitioner, Donna L. Hurst, appeals a decision by a panel of the New Hampshire Department of Labor Compensation Appeals Board (the panel) denying her claim for workers� compensation benefits. We reverse and remand.

The petitioner was employed as a meat cutter for Arthur�s Market when she injured herself. Arthur�s Market maintained that the petitioner�s condition bore no causal relation to her employment and refused to provide benefits. The petitioner�s case was heard by a hearings officer, who ruled in favor of Arthur�s Market. The petitioner appealed to the compensation appeals board.

Before the board hearing began, the petitioner filed a motion requesting the disqualification of any panel members who were "represented in the adjusting of cases by counsel hired to represent the employer in this matter." Nicholas Georges, an adjuster for the New Hampshire Auto Dealers Association, was a member of the panel. The following colloquy ensued:

[Chairperson]: Mr. Georges, what is your relationship to Attorney Fitzgerald [counsel for Arthur�s Market, the employer of Donna Hurst]?

Mr. Georges: They do, or perform defense work for my company at various times.

[Chairperson]: I believe the standard required of this panel is actual bias not appearance of impropriety and I�m inclined to continue the prior practice.

The petitioner�s motion was denied. The panel held a hearing and concluded that the petitioner had failed to prove that her injury was work-related or that it was an occupational disease. The petitioner filed a motion for a rehearing, which was denied.

On appeal she argues: (1) that the panel chairperson should have disallowed Georges� participation in her case; (2) that the panel erred in finding that she did not sufficiently establish legal and medical causation; and (3) that the panel erred in holding that she did not have an occupational disease.

Because we remand for a new hearing, we need only address the first issue. We base our decision on RSA 281-A:42-a, I (Supp. 1993) (amended 1993), which requires that "no person who is an interested party or an employee of an interested party shall participate as a member of [a compensation appeals board panel]."

The panel chairperson found that the statutory requirement that panel members have at least five years experience in the area of workers� compensation creates an "inevitable" situation where panel members often "know or have previously been in a professional relationship with persons presenting matters to a Board Panel." See RSA 281-A:42-a, I. He therefore concluded that "the standard applied to qualify a juror was not the appropriate standard with which to test a Board member�s qualification to sit with a panel," and denied the petitioner�s motion to disqualify Georges.

"We do not overturn agency decisions or orders, absent an error of law, unless the court is satisfied, by a clear preponderance of the evidence before it, that such order is unjust or unreasonable," Appeal of Stetson, 138 N.H. 293, 295, 639 A.2d 245, 247 (1994) (quotation omitted); RSA 541:13 (1974).

The petitioner argues that Georges� presence on the panel created an appearance of impropriety in violation of her right to a fair and impartial hearing under the State and Federal Constitutions. Arthur�s Market argues that the standard for disqualification is actual bias, which can be established only by proving that the panel member has a direct interest, either personal or pecuniary, in the outcome of the case.

An administrative official acting in a quasi-judicial capacity must be disqualified if he or she "is an interested party or an employee of an interested party." RSA 281-A:42-a, I. An official is an "interested party" if he or she cannot satisfy two requirements. First, the official must not have a direct personal or pecuniary interest that is immediate, definite, and capable of demonstration. State ex rel. Thomson v. State Bd. of Parole, 115 N.H. 414, 422,342 A.2d 634, 639 (1975). Second, the official must not have any "connection with the parties in interest, as would be likely, improperly, to influence [his or her] judgment." N.H. Milk Dealers� Ass�n, 107 N.H. 335, 338,222 A.2d 194, 198 (1966) (quotation omitted); see Totty v. Grantham Planning Board, 120 N.H. 388, 390, 415 A.2d 687, 688 (1980). Whether a direct interest or a connection requires disqualification depends upon the particular circumstances of the case. N.H. Milk Dealers� Ass�n, 107 N.H. at 339, 222 A.2d at 198.

The petitioner contends that Georges had a business connection to Arthur�s Market�s counsel that would be likely to affect his judgment. We hold that the current and ongoing relationship between Georges and the attorney was such that it "would be likely" to influence his opinion and thus necessitated his removal from the panel. See Id. at 338, 222 A.2d at 198.

We note that in recent years certain quasi-judicial administrative boards have been accorded the final fact-finding voice in determining important rights between litigants, subject only to this court�s review for conclusions "affected by an error of law or clearly erroneous." Appeal of Swift, 134 N.H. 177, 179, 589 A.2d 590, 592 (1991); see RSA 282-A:67, V (Supp. 1994); RSA 281-A:43, I(c) (Supp. 1994). The members of these administrative bodies are paid reasonably on a daily basis for their services, unlike various town and city planning boards and zoning boards of adjustment. See, e.g., RSA 282-A:62, I (Supp. 1994); RSA 281-A:42-a, III. In the past, appeals from these administrative agencies were made in the first instance to the superior court, which would conduct a de novo review. See, e.g., RSA 282:5(G) (1977) (repealed 1981); RSA 281:37, I (1977) (repealed 1988).

We need not base our decision in this case on constitutional grounds. We conclude, however, that a board, such as the one in this case, should carefully consider the words of this court in New Hampshire Milk Dealers� Association, 107 N.H. 335, 222 A.2d 194, in which we said:

Since 1784, Article 35th, Part I of our Constitution has provided that "It is the right of every citizen to be tried by judges as impartial as the lot of humanity will admit." We subscribe to what was said in that respect by this court as far back as 1851 that it is an obvious principle of justice that all persons who are to act as judges, should be impartial, without any interest of their own in the matter in controversy, and without any such connection with the parties in interest, as would be likely, improperly, to influence their judgment. There is no doubt that these principles apply to the members of [an administrative board] acting in a quasi-judicial capacity . . . .

Id. at 338-39, 222 A.2d at 197-98 (quotation omitted).

Reversed and remanded.

All concurred.

APPEAL OF MARK S. GRIFFIN

140 N.H. 650

February 12, 1996

Engel, Gearreald & Gardner, P.A., of Exeter (Mark S. Gearreald on the brief and orally), for the petitioner.

Devine, Millimet & Branch, P.A., of Manchester (Julie A. Quigley on the brief, and Douglas N. Steere orally), for the respondent, Kidder Building & Wrecking, Inc.

AUTHOR: BROCK, C.J.

The petitioner, Mark S. Griffin, appeals a decision by the New Hampshire Compensation Appeals Board (the board) denying his claim for workers' compensation benefits. We reverse and remand.

The petitioner was employed as a laborer for the respondent, Kidder Building & Wrecking, Inc. (Kidder). His work entailed the duties associated with wrecking and demolition at various locations, including Maine, Massachusetts, and Rhode Island. On May 21, 1992, the petitioner had been on a demolition job for Kidder in Warwick, Rhode Island, for approximately two weeks. This job required that the petitioner and other Kidder employees remain overnight in Rhode Island. They received daily meal allowances and motel accommodations provided by Kidder and were permitted to use the company vehicle for transportation.

After dinner at a restaurant on May 21, the petitioner was driving the company truck. He had had four or five beers with dinner. His foreman, Ronald Davis, was in the front passenger seat, and co-workers Brian White and Bill Darling were seated in the back. At some point, for reasons the participants dispute, Davis and the petitioner argued, and Davis removed the keys from the vehicle while the petitioner was driving. An altercation between the two men ensued at the side of the road outside the vehicle. Punches were thrown, and White hit the petitioner on the head with a two-by-four piece of wood, causing injury.

The board, which included as a member Nicholas Georges, an adjuster employed by the New Hampshire Automobile Dealers Association, ruled that the petitioner's injury did not arise out of and in the course of employment, see RSA 281-A:2, XI (Supp. 1995). On appeal the petitioner argues that: (1) Mr. Georges should have been removed from the board because of his business connection to Kidder's counsel, see Appeal of Hurst, 140 N.H. ___, 660 A.2d 1143 (1995); (2) the board improperly applied New Hampshire Administrative Rules, Lab 207.02 and 207.03 (Labor Rules) to deny the petitioner's request for a rehearing; and (3) the board erred as a matter of law in deciding that his injury did not arise out of and in the course of his employment. The employer notes that the petitioner did not request Mr. Georges' removal prior to or during the hearing, and contends that this issue is therefore not preserved for appeal. Because we reverse on the merits, we need not address the first issue. We first address the petitioner's procedural argument.

Labor Rules 207.02 and 207.03 correspond to RSA 541:3 (1974) (amended 1994) and :4 (1974). They deal with the time and specificity requirements, respectively, for a motion for rehearing of the board's decision. The petitioner had twenty days after the board's decision within which to "apply for a rehearing in respect to any matter determined in the . . . proceeding . . . specifying in the motion for rehearing the ground therefor." N.H. Admin. Rules, Lab 207.02; see RSA 541:3 (1974) (amended 1994). The motion was required to "set forth fully every ground upon which it is claimed that the decision or order complained of is unlawful or unreasonable." N.H. Admin. Rules, Lab 207.03; see RSA 541:4.

The board rendered its decision on February 28, 1994. On March 18, 1994, the petitioner filed a letter with the department of labor, stating: "I would like to file an appeal for reconsideration on the decision rendered on the Appeals hearing which was held on February 28, 1994 based on the discrepancies found between this Appeals hearing and the hearing held on March 25, 1993." The letter indicated that the attorney who had represented the petitioner at the hearing had informed him on March 16, with four days remaining in the period for filing a request for rehearing, that he would no longer represent him. In addition, according to the letter, it was only on March 17, when the attorney's paralegal called the petitioner to explain the procedure, that the petitioner learned of the twenty-day window for filing a motion for rehearing. After retaining new counsel, the petitioner filed a motion to amend motion for rehearing on April 18, 1994, alleging the specific grounds now before this court.

On August 1, 1994, the board denied the request for rehearing. Relying on Labor Rules 207.02 and 207.03, the board held that the petitioner's initial pro se letter did not meet the specificity requirement and that the subsequent motion was untimely. The board further stated that it "has carefully reviewed its decision dated February 28, 1994 and believes that a rehearing would be a re-hashing of evidence already presented and decided on."

RSA 541:4 provides:

Such motion [for rehearing] shall set forth fully every ground upon which it is claimed that the decision or order complained of is unlawful or unreasonable. No appeal from any order or decision of the commission shall be taken unless the appellant shall have made application for rehearing as herein provided, and when such application shall have been made, no ground not set forth therein shall be urged, relied on, or given any consideration by the court, unless the court for good cause shown shall allow the appellant to specify additional grounds.

(Emphasis added.) We find "good cause" to allow the petitioner to pursue the specific argument he makes on appeal in the following particular facts of his case: the late withdrawal of his first attorney without apprising him of the procedures for rehearing; his timely pro se motion for rehearing; and a motion to amend the motion for rehearing, containing the specific ground here raised, that was filed over three months prior to the board's rendering a decision on the motion for rehearing. In these circumstances the petitioner's argument that the board erred in ruling his injury did not arise out of and in the course of employment is properly before us.

To be compensable under the Workers' Compensation Law, the petitioner's injury must have "aris[en] out of and in the course of employment." RSA 281-A:2, XI. We construe the statute liberally, resolving all reasonable doubts in statutory construction in favor of the injured employee in order to give the broadest reasonable effect to the remedial purpose of workers' compensation laws. Petition of Abbott, 139 N.H. 412, 416, 653 A.2d 1113, 1115 (1995); Whittemore v. Sullivan Cty. Homemakers Aid Serv., 129 N.H. 432, 435, 529 A.2d 919, 920-21 (1987). "Accordingly, the employee can expect a liberal interpretation of when the employment begins or ends." Heinz v. Concord Union School Dist., 117 N.H. 214, 220, 371 A.2d 1161, 1165 (1977) (quotation, brackets, and ellipses omitted).

To meet this scope-of-employment test, the petitioner must prove:

(1) that the injury arose out of employment by demonstrating that it resulted from a risk created by the employment; and (2) that the injury arose in the course of employment by demonstrating that (A) it occurred within the boundaries of time and space created by the terms of employment; and (B) it occurred in the performance of an activity related to employment, which may include a personal activity if reasonably expected and not forbidden, or an activity of mutual benefit to employer and employee.

Murphy v. Town of Atkinson, 128 N.H. 641, 645-46, 517 A.2d 1170, 1172-73 (1986) (citations omitted).

The petitioner's situation, that of the so-called "traveling employee" whose business requires that he be away from home, presents us with a case of first impression. We do not, however, write on a clean slate: "With respect to perils of travel, . . . th[is] court has held that special travel risks imposed by special duties are properly considered hazards of the employment," R. Galway, New Hampshire Workers' Compensation Manual 2.04, at 2-8 (1993), and thus arise out of employment, Id.; see Heinz, 117 N.H. 214, 371 A.2d 1161 (teacher's death on roadway while traveling home before returning to work for extra duty held to have arisen out of and in the course of employment); Henderson v. Sherwood Motor Hotel, 105 N.H. 443, 201 A.2d 891 (1964) (waitress's roadway death while returning home from extra duty held to have arisen out of and in the course of employment). The question here is whether by virtue of being a traveling employee the petitioner was subject to special travel risks as a result of his employment such that his injury is compensable. Cf. Henderson, 105 N.H. at 445, 201 A.2d at 894.

The traveling employee is generally considered to be within the scope of his employment throughout his sojourn:

Employees whose work entails travel away from the employer's premises are held in the majority of jurisdiction[s] to be within the course of their employment continuously during the trip, except when a distinct depart[ure] on a personal errand is shown. Thus, injuries arising out of the necessity of sleeping in hotels or eating in restaurants away from home are usually held compensable.

1A A. Larson, The Law of Workmen's Compensation 25.00, at 5-275 (1995) (footnote omitted); see, e.g., Boyce v. Potter, 642 A.2d 1342, 1344 (Me. 1994) (employer's control in assigning employees to different work sites and travel requirement that increases normal risk renders any injury during travel compensable).

The traveling employee rule comports with our test in Murphy for determining the compensability of injuries suffered during activities peripheral to employment. "Where the employment requires travel, the employee is consequently exposed to hazards [he or] she would otherwise have the option of avoiding. Thus the hazards of the route become the hazards of the employment." Whittemore, 129 N.H. at 436, 529 A.2d at 921. Because the petitioner was required by his employment to live away from home, the risk of injury to him during travel necessary to take his meals was created by his employment. See Chandler v. Nello L. Teer Co., 281 S.E.2d 718, 720 (N.C. Ct. App. 1981) (employee on business trip going to or returning from meal "is performing an act incident to his employment"), affirmed, 287 S.E.2d 890 (N.C. 1982). The first prong of the Murphy test is therefore satisfied.

The second Murphy criterion -- that the injury occur within the boundaries of time and space created by the employment -- is also met here. "[W]here the job requires extensive travel, the time and space criteria cannot be applied in a conventional manner." Whittemore, 129 N.H. at 436, 529 A.2d at 922. The petitioner was not injured while driving home from a voluntary "pick-up ball game," Murphy, 128 N.H. at 647, 517 A.2d at 1173, but was returning from a meal on the road necessitated by the condition of being employed away from home. See Brown v. Palmer Construction Company, Inc., 295 A.2d 263, 266 (Me. 1972) (meals out of state not merely necessity of traveling employee but necessity of employer in furtherance of out-of-state contract).

Finally, relative to proof that the injury "occurred in the performance of an activity related to employment," Murphy, 128 N.H. at 645, 517 A.2d at 1173, Kidder's furnishing a meal allowance to its employees while out of state, as well as allowing use of a company vehicle for personal travel, indicates that the petitioner's personal activity of dining out was reasonably expected and not forbidden by the employer, see Id. The petitioner's injury thus arose in the course of his employment. See Frassa v. Caulfield, 491 N.E.2d 657, 660 (Mass. App. Ct.) (employees receiving meal allowance were acting in the course of their employment when traveling for meals, "travel clearly impelled by the nature and conditions of the employment"), review denied, 495 N.E.2d 310 (Mass. 1986).

Kidder argues that this case is controlled by LaBonte v. National Gypsum Co., 110 N.H. 314, 269 A.2d 634 (1970), and Newell v. Moreau, 94 N.H. 439, 55 A.2d 476 (1947), in which we looked at the nature of the quarrel between co-workers to determine whether benefits were recoverable. Because, Kidder argues, the petitioner's injury grew out of a personal quarrel unrelated to employment, it did not arise out of the employment. See LaBonte, 110 N.H. at 316, 269 A.2d at 636; Newell, 94 N.H. at 441, 55 A.2d at 478.

This argument rests on too narrow a view of what is "related to employment." As we have held above, the activity of driving to and from the employees' dinner meal arose out of and in the course of their employment. According to Davis, he removed the keys from the vehicle while the petitioner was driving because "his driving wasn't all that great." It was this event that caused the quarrel resulting in the petitioner's injury. The injury was thus work-related because the driving was work-related. See Whittemore, 129 N.H. at 435, 529 A.2d at 921 ("activity related to employment may include personal activity if reasonably expected and not forbidden").

The question is whether the risk of injury to the petitioner was reasonably within the risks of his particular employment situation. The petitioner and his co-workers, in addition to working long hours together during the day, were required to reside together at a motel for an extended period. With no dining facilities at the motel and only one vehicle for all four men to use after working hours, Kidder should reasonably have expected that these employees would be spending a significant amount of time together. Moreover, according to the foreman, Davis, it was even acceptable and typical for employees on a job out of state to have a few drinks after work. An altercation in such a context is not entirely unforeseeable.

"If the friction and strain arises [sic] . . . because of the enforced contacts resulting from the duties of the employment . . . and quarrels develop," LaBonte, 110 N.H. at 316-17, 269 A.2d at 636 (quotation omitted), the quarrels arise out of the employment, cf. Id. Here, because the petitioner's injury resulted "from the conditions and obligations of the employment," Id. at 317, 269 A.2d at 636 (quotation omitted), it was compensable. Accordingly, we hold that the board erred in ruling that the petitioner's injury did not arise out of and in the course of his employment.

Reversed and remanded.

BRODERICK, J., did not sit; the others concurred.

APPEAL OF JUDY LALIME

(New Hampshire Compensation Appeals Board)

141 N.H. 534

December 31, 1996

Engel, Gearreald & Gardner, P.A., of Exeter (Mark S. Gearreald on the brief and orally), for the petitioner.

Wiggin & Nourie, P.A., of Manchester (Andrew A. Merrill on the brief, and Thomas Aylesworth orally), for the respondent, K-Mart Enterprises of New Hampshire.

AUTHOR: JOHNSON

The petitioner, Judy Lalime, appeals the decision of the New Hampshire Compensation Appeals Board (board) that her medical treatments subsequent to April 28, 1992, were not the responsibility of her former employer, K-Mart Enterprises of New Hampshire (respondent), and that she was not entitled to temporary partial disability payments. We affirm in part, vacate in part, and remand.

The petitioner was employed, in various capacities, by the respondent at its Rochester store from August 1989 through September 1992. In August 1991, while working as a sales associate in the appliance department, the petitioner injured her right elbow and wrist by moving several television sets from a storeroom to the showroom floor. She returned to work in the appliance department that fall but reinjured her elbow, and again left work, in December 1991. The petitioner returned to K-Mart in March 1992 in a light duty capacity, initially as a cashier and later as a "door greeter." In April 1992, her hours as a door greeter were reduced from forty hours per week to thirty-two. The petitioner left K-Mart in September 1992 and began working at Easy Street Shoe Company (Easy Street). She then sought temporary partial disability benefits for reductions in pay resulting from her position as door greeter, her decreased hours, and her lower earnings at Easy Street. The respondent denied her request.

Following her injury in August 1991, the petitioner sought treatment from a number of doctors to determine the nature and extent of her injuries, and for pain management therapy. Notably, the petitioner's last appointment with her initial treating physician, Dr. Robert H. Harrington, was on April 28, 1992, at which time Dr. Harrington believed that she had reached "a point of maximum medical improvement." While the petitioner continued to seek diagnostic and rehabilitative treatment for continued pain in her elbow through December 1992, the respondent refused to reimburse the petitioner for medical expenses incurred after April 28, 1992.

The petitioner sought compensation for medical expenses related to her arm injury pursuant to RSA 281-A:23 (Supp. 1992) (amended 1994, 1995, and 1996), and temporary partial disability payments under RSA 281-A:31 (Supp. 1992) (amended 1994). The hearing officer denied both claims, and the petitioner appealed this decision to the board. See RSA 281-A:43, I(b) (Supp. 1996). The board ruled that the respondent was not responsible for any medical costs incurred after April 28, 1992 -- the date that Dr. Harrington determined that the petitioner had reached a point of maximum medical improvement. The board also denied the petitioner's request for temporary partial disability payments. The petitioner's motion for rehearing was denied, and this appeal followed.

Medical Reimbursement

The petitioner first argues that the board erred in finding that the respondent was not responsible for medical costs incurred after April 28, 1992. In so ruling, the board held that

the claimant has not met her burden of proof. From the medical records, all objective tests yielded negative results. The medical evidence distinctly shows that on April 28, 1992 Dr. Harrington, her own treating physician states that "he feels that she has reached a point of maximum medical improvement."

We will not overturn the board's decision, except for errors of law, unless the petitioner has shown it to be clearly unreasonable or unjust. Appeal of Cote, 139 N.H. 575, 578, 660 A.2d 1090, 1093 (1995); see RSA 541:13 (1974). The petitioner argues that the board erred as a matter of law in finding that she had not carried her burden of proof with respect to the requirements of RSA 281-A:23, I (Supp. 1996). We agree.

"To obtain workers' compensation benefits, a claimant has the initial burden to establish a prima facie case. Once the claimant has met this burden, the burden of production shifts to the respondent to rebut the claims made." Cote, 139 N.H. at 578, 660 A.2d at 1093 (citation omitted). The burden of persuasion remains with the claimant, however. See Appeal of Stetson, 138 N.H. 293, 297, 639 A.2d 245, 248 (1994). RSA 281-A:23, I, provides that "[a]n employer subject to this chapter . . . shall furnish or cause to be furnished to an injured employee reasonable medical, surgical, and hospital services, [and] remedial care . . . for such period as the nature of the injury may require." We have interpreted this statute to require that: "(1) the treatment must be reasonable; and (2) the treatment may continue only so long as required by the nature of the injury." Appeal of Levesque, 136 N.H. 211, 214, 612 A.2d 1333, 1334 (1992).

Thus, in order for a claimant to receive reimbursement, the treatment in question must be "reasonable." The board found that the petitioner failed to carry her burden of proof because all the objective tests revealed no further injury. We must determine, therefore, whether the fact that the petitioner's test results were negative renders the cost of testing and treatment unreasonable. "We construe the [workers' compensation] statute liberally, resolving all reasonable doubts in statutory construction in favor of the injured employee in order to give the broadest reasonable effect to [its] remedial purpose . . . ." Appeal of Griffin, 140 N.H. 650, 654, 671 A.2d 541, 543 (1996). A determination of the "reasonableness" of the treatment should not be outcome dependent. Rather, the proper analysis is whether the petitioner presented objective evidence showing, that at the time the tests were ordered, it was reasonable for her to seek further treatment, be it diagnostic or palliative. Therefore, the board's finding that reimbursement was not warranted because the tests yielded negative results is not sufficient to support their conclusion that the petitioner has failed to meet her burden of proof.

We also find that the board improperly relied on a finding of "medical endpoint" to deny the petitioner's request for reimbursement. It is well settled that the fact that a patient has reached a "medical endpoint" is not conclusive as to whether the treatments have extended beyond the period required by the nature of the injury. See Levesque, 136 N.H. at 214, 612 A.2d at 1334-35. Reimbursable medical care may include treatments that are both curative and palliative in nature. Id. While determination of a "medical endpoint" may indicate that the curative value of further treatments is nil, it does not establish that there would be no palliative benefits to be reaped from further medical care.

Therefore, we vacate the ruling of the board with respect to reimbursement of the petitioner's medical costs. Because "it is the board's role, and not ours, to weigh all relevant factors in the first instance," Appeal of Normand, 137 N.H. 617, 621, 631 A.2d 535, 537 (1993) (citations omitted), we remand for a determination of reimbursable medical costs consistent with the standards set forth in this opinion.

II. Temporary Partial Disability Payments

The petitioner next argues that the board erred as a matter of law in not awarding her temporary partial disability benefits under RSA 281-A:31 and New Hampshire Administrative Rules, Lab 506.02(g). A claimant is entitled to benefits if the disability resulting from the injury is such that the claimant is able to return to work, but at a lower earning capacity because of that injury. See RSA 281-A:31; N.H. Admin. Rules, Lab 506.02(g). "The test used to determine entitlement to compensation is whether the claimant is now able to earn, in suitable work under normal employment conditions, as much as he or she earned at the time of the injury." Normand, 137 N.H. at 621, 631 A.2d at 536-37 (quotations omitted). Workers' compensation benefits are intended to compensate for loss of earning capacity due to a work-related injury, however, and will not be awarded if the loss in income is due to another cause. Id. at 620, 631 A.2d at 537.

The petitioner sought temporary partial disability benefits for the loss in pay attributable to: (1) her transfer from a position in the appliance department to door greeter; (2) her subsequent reduction in hours as a door greeter; and (3) her new position at Easy Street. The board found that the petitioner voluntarily reduced her hours as a door greeter and then left K-Mart for a forty-hour-per-week position at Easy Street without first requesting an increase in her hours at K-Mart. The board concluded that "[t]herefore the employer has met all its responsibilities with regard to compensation in this matter." We will not overturn the board's findings of fact unless they are clearly unlawful or unreasonable. See RSA 541:13. "Our task is not to determine whether we would have found differently than did the board, or to reweigh the evidence, but rather to determine whether the findings are supported by competent evidence in the record." Appeal of Gamas, 138 N.H. 487, 490, 642 A.2d 925, 927 (1994) (quotations omitted).

The first basis of the petitioner's claim for temporary partial disability benefits is that her earnings for a forty-hour work week in the appliance department were more than those earned for a forty-hour work week as a door greeter. At the hearing before the board, the petitioner testified that while the hourly rate of pay was the same for both jobs, her average weekly salary was lower as a door greeter because she received commissions, in addition to her base salary, as a salesperson in the appliance department. The board, however, failed to specifically rule on whether the petitioner earned less at forty hours as a door greeter. The board inexplicably denied the petitioner's request for a finding of fact that she did indeed earn less "both at K-Mart and the [Easy] Street Sales Corporation" after her injury, while at the same time granting the request for a finding that the petitioner's average weekly wage before her injury was $253.20. Notably, this figure, according to the petitioner, includes commissions earned. While it is well settled that we will not overturn a decision of the board if based upon findings supported by the record, "[t]hese principles . . . rest on the presumption that the board has made findings of fact sufficient to form the basis for meaningful judicial review." Appeal of Kehoe, 139 N.H. 24, 27, 648 A.2d 472, 474 (1994). The board's decision fails to address coherently this segment of the petitioner's claim, and we accordingly remand for a determination of whether the petitioner is entitled to compensation for any difference in pay attributable to her transfer from the appliance department to door greeter.

There is ample evidence, however, to support the board's finding that the petitioner voluntarily reduced her hours as door greeter, and never attempted to increase her hours before leaving K-Mart. For example, the petitioner signed a document indicating that she requested a reduction in hours in order to allow a co-worker to increase her hours. Furthermore, this same document indicated that the petitioner could return to a forty-hour work week at her own request. Testimony of the petitioner's supervisor at K-Mart further supported the finding that the reduction in hours was voluntary and that she never asked to have her hours increased. While there was conflicting testimony with respect to these findings, we will not overturn a determination of the fact finder who is in the best position to weigh the competing evidence. Cf. Tzimas v. Coiffures By Michael, 135 N.H. 498, 501, 606 A.2d 1082, 1083 (1992).

The petitioner argues that because we construe the workers' compensation statute liberally, and resolve all reasonable doubts with respect to statutory construction in favor of the claimant, see Griffin, 140 N.H. at 654, 671 A.2d at 543, she is entitled to have all reasonable factual inferences construed in her favor. This simply is not true. "[T]hat maxim applies to the construction of the statute involved, not to the task of weighing evidence." Gamas, 138 N.H. at 491, 642 A.2d at 928 (citations omitted). Therefore, we affirm the board's ruling with respect to the petitioner's decline in earnings as a result of the reduction in hours as door greeter since there is ample evidence that it did not arise from her injury.

As for the petitioner's final argument, the board's insufficient findings again prevent us from properly reviewing the issue. See Kehoe, 139 N.H. at 27, 648 A.2d at 474. The petitioner argues that because of her injury, her overall earning capacity has decreased. The proper analysis is whether a subsequent reduction in income is due to her physical injury or the result of another cause. See Normand, 137 N.H. at 620, 631 A.2d at 537. With respect to her position at Easy Street, the board's only finding was that the petitioner sought employment there; the board did not address whether this position was necessitated by her injury or was the result of some other factor. Therefore, we remand for a new hearing with respect to this issue as well.

Consequently, while we affirm the ruling of the board that the petitioner is not entitled to benefits arising from her voluntary reduction in hours as door greeter, we remand the case to the board for a determination of whether there are benefits due arising from any reduction in pay attributable to the change in employment from the appliance department to door greeter and the circumstances surrounding her departure from K-Mart.

Affirmed in part; vacated in part; remanded.

All concurred.

APPEAL OF JAMAR d/b/a DUNKIN DONUTS & a.

145 N.H. 152

July 17, 2000

Wadleigh, Starr & Peters, P.L.L.C., of Manchester (Michael R. Mortimer on the brief and orally), for the petitioners.

Borofsky, Lewis & Amodeo-Vickery, P.A., of Manchester (Mark S. Gearreald and Stephen E. Borofsky on the brief, and Mr. Borofsky orally), for the respondent.

AUTHOR: NADEAU

The petitioners, JAMAR d/b/a Dunkin Donuts and its workers' compensation insurance carrier, Liberty Mutual Insurance Company, appeal a 1997 decision by the New Hampshire Compensation Appeals Board (board) granting the respondent, Elizabeth Farley, a rehearing before the board. The petitioners concede that at the rehearing the board had sufficient evidence to support its finding that the respondent's repetitive use of a cream dispensing machine at work caused carpal tunnel syndrome in her right hand and wrist. Thus, the sole issue on appeal is whether the board had authority to grant a rehearing to review its initial conclusion regarding the nature of the respondent's injury. We affirm.

The respondent applied for workers' compensation benefits, which were denied by the petitioners. After a hearing before the department of labor, the hearing officer concluded that she was not entitled to workers' compensation benefits. She appealed to the board, see RSA 281-A:43, I(b) (1999), and was granted a hearing on March 15, 1996. At this hearing, the respondent argued, among other things, that her carpal tunnel syndrome was caused by repetitive use of the cream dispensing machine. Five months after the hearing, the board denied the respondent's appeal without addressing her repetitive-use argument. The board's decision stated only that the claimant had "failed to establish that her [carpal tunnel syndrome] was related to her slip and fall at work on December 23, 1993."

On August 23, 1996, the respondent timely moved for rehearing, see RSA 541:3 (1997), which the board denied on November 21, 1996. Four days after the supreme court thirty-day appeal period had expired, see RSA 281-A:43, I(c) (1999) and RSA 541:6 (1997), the respondent sent a letter to the department of labor expressing dissatisfaction with the board's decision and requesting that it reconsider its denial of her motion. The letter alleged that the board "simply failed to deal with the matter in controversy," due, in part, to the five months that had elapsed between the hearing and the decision. The letter also indicated that the respondent had not appealed the board's decision because of financial constraints.

On February 3, 1997, the board reversed its prior denial of the respondent's request for a rehearing. After the rehearing, the board found in favor of the respondent, reversing its prior decision. The petitioners unsuccessfully moved for a rehearing and filed the instant appeal.

The petitioners argue that the board erred by granting the rehearing because: (1) the respondent did not timely appeal, and thus, the board's earlier decision was final and binding; (2) the board violated the New Hampshire Department of Labor rules by granting the rehearing; (3) the board lacked jurisdiction to grant the rehearing; and (4) the board's earlier denial collaterally estopped the respondent from relitigating the causal relationship between her injury and her employment.

"We will overturn the board's decision only for errors of law, or if we are satisfied by a clear preponderance of the evidence before us that the order is unjust or unreasonable." Appeal of Wausau Ins. Cos., 143 N.H. 478, 480, 727 A.2d 988, 989 (1999) (quotation omitted).

Under the Workers' Compensation Law, unless a party appeals to the supreme court, the decision of the board shall become final thirty days after the application for a rehearing is denied. See RSA 281-A:43, II (1999 & Supp. 1999); RSA 541:6. "In view of the practical protective function of workers' compensation, the desirability of preserving a right to reopen for genuine mistake seems too self-evident for argument." 8 A. Larson & L. Larson, Larson's Workers' Compensation Law � 131.05[2][b], at 131-60 (2000). Consequently, the finality of RSA 281-A:43, II is not absolute. Rather, our legislature has included a provision in the Workers' Compensation Law � RSA 281-A:48 (1999) � that specifically serves to "preserv[e] a right to reopen for genuine mistake." Id.

RSA 281-A:48, I, provides that within a specified time period, any party at interest may petition the commissioner of labor (commissioner) to review a denial or an award of compensation on the basis of, among other things, a "mistake as to the nature or extent of the injury or disability."

In Johnson v. Aetna Life & Casualty Co., 131 N.H. 698, 702, 559 A.2d 838, 841 (1989) (decided under prior law), we held that while, generally, the commissioner has "no jurisdiction to modify an award it has previously rendered" if the award is final under RSA 281:37, II (predecessor to RSA 281-A:43, II), RSA 281:40 (predecessor to RSA 281-A:48) provides an "exception" to such finality. See also Laws 1988, 194:1 (legislature's intent in enacting RSA chapter 281-A was to preserve the content of RSA chapter 281). Thus, although the board's decision becomes final thirty days after the board denies the motion for rehearing, see RSA 281-A:43, II, we hold that RSA 281-A:48 provides an exception to the finality otherwise accorded board decisions. See Johnson, 131 N.H. at 702, 559 A.2d at 841.

While RSA 281-A:48 provides that a party may petition the commissioner to review a decision for mistake, a de novo appeal from an adverse decision by the commissioner can be taken to the board. See RSA 281-A:48, V, :42-a, I (1999). We consider whether RSA 281-A:48 provides the board with the authority to review a decision for mistake in the first instance when the mistake is alleged to have been committed by the board.

In this case, the board was certainly in the best position to review the respondent's petition because the petition alleged that the board had inadvertently failed to consider one of her arguments. Requiring that the commissioner first conduct a hearing and issue an order on the question of whether the board made a mistake before permitting review by the board itself would be inefficient.

In addition to furthering the purpose of judicial economy, allowing the board to review its own mistake in the first instance is consistent with the purpose of the Workers' Compensation Law, which is "to afford employees a sure remedy when they are injured on the job and to provide for a fair resolution of disputed claims." Buyer v. Abundant Life Farm, Inc., 127 N.H. 345, 348, 499 A.2d 1011, 1012 (1985) (decided under prior law). Moreover, we construe the Workers' Compensation Law liberally, "resolving all reasonable doubts in statutory construction in favor of the injured employee in order to give the broadest reasonable effect to its remedial purpose." Appeal of Rainville, 143 N.H. 624, 627, 732 A.2d 406, 410 (1999) (quotation omitted).

Finally, because the legislature cannot anticipate all of the problems incidental to the carrying out of administrative duties, administrative entities generally have the implied or incidental powers reasonably necessary to carry out the powers expressly granted to them. See 2 Am. Jur. 2d Administrative Law � 62, at 83-84 (1994). When the mistake is alleged to have been committed by the board, we conclude that RSA 281-A:48 provides the board with the limited authority to review its own decisions for mistakes in the first instance. Cf. State v. Haycock, 139 N.H. 610, 611, 660 A.2d 1115, 1115-16 (1995) (affirming the trial court's continuous discretionary powers to correct errors prior to final judgment notwithstanding that the motion to reconsider was untimely).

Although the board did not explain its decision to grant the rehearing, there can be little doubt that the board's intent was to consider whether it had made a mistake in its first decision. At the first board hearing, the respondent argued that her carpal tunnel syndrome was caused by the repetitive use of the cream dispensing machine. The board denied her appeal, stating that she had failed to establish a causal relationship between her carpal tunnel syndrome and a work fall, but not addressing her repetitive-use argument. In her initial request for a rehearing, the respondent complained that the claim rejected by the board was "not the claim that [she had] presented to the Board at all." Finally, in its letter granting the rehearing, the board stated that it "will consider the matter of the creamer pumping repetitive motion," suggesting that it had failed to do so at the first hearing.

RSA 281-A:48 does not grant the board unlimited authority to review mistakes, however. Instead, the potential mistake must be of the type set forth in the statute: "a mistake as to the nature or extent of the injury or disability." RSA 281-A:48, I. "It is clear that an allegation of mistake should not be allowed to become a back-door route to retrying a case because one party thinks he or she can make a better showing on the second attempt." Larson & Larson, supra at 131-57.

The respondent argues that the board made a mistake as to the nature or extent of the respondent's injury or disability because in its first decision the board limited its review to whether the respondent's carpal tunnel syndrome was caused by the trauma of a work fall. At the rehearing, however, the board considered the respondent's argument that her injury was caused by the repetitive use of the cream dispensing machine. The respondent argues that by initially focusing on the respondent's injury as traumatic carpal tunnel rather than repetitive-use carpal tunnel the board made a mistake as to the nature of the respondent's injury that resulted in the board's erroneous finding of no work-related injury. The petitioners argue that the board's mistake does not relate to the "nature" of the respondent's injury because the board's essential finding, that the respondent suffered from carpal tunnel syndrome, was correct and remained consistent in both of the board's decisions.

We conclude that the board's error in failing to identify the respondent's injury as repetitive-use carpal tunnel syndrome was a mistake as to the nature of the respondent's injury: that is, a mistake relating to the "essential character or constitution" or the "distinguishing qualities or properties" of the injury. See Webster's Third New International Dictionary 1507 (unabridged ed. 1961); cf. Wausau, 143 N.H. at 480, 727 A.2d at 989 (describing the nature of the injury as a cumulative trauma injury). The board had evidence before it that traumatic carpal tunnel syndrome and repetitive-use carpal tunnel syndrome have different physical manifestations, which are identifiable through an electro-diagnostic study. Accordingly, we conclude that traumatic carpal tunnel syndrome has different "properties" or a different "constitution" than repetitive-use carpal tunnel syndrome.

We conclude that the board's error constitutes a mistake as to the "nature" of the injury under RSA 281-A:48 which the board had authority to correct. We decline to reach the question of whether the board's error as to the cause of the respondent's injury, alone, would have been sufficient to warrant a rehearing under RSA 281-A:48.

The petitioners argue that this case is controlled by Magoon v. New England Power Co., 103 N.H. 366, 172 A.2d 366 (1961), and Petition of Ellis, 138 N.H. 159, 636 A.2d 62 (1993). We disagree. In Ellis, the issue was whether the party's petition for writ of certiorari was timely filed. Ellis, 138 N.H. at 159, 636 A.2d at 63. In the instant case, however, we consider the board's authority to reopen and correct its own decision under RSA 281-A:48, a statute that did not apply in Ellis. We find Magoon similarly inapplicable. We decided Magoon under the statutory provision governing new trials, not the predecessor to RSA 281-A:48. See Magoon, 103 N.H. at 368, 172 A.2d at 368. The petitioners' remaining arguments are premised on the assumption that the board's conduct was not statutorily authorized, and we find them without merit in light of the above opinion. See Vogel v. Vogel, 137 N.H. 321, 322, 627 A.2d 595, 596 (1993).

Affirmed.

BROCK, C.J., and HORTON and BRODERICK, JJ., did not sit; GRAY, J., retired superior court justice, and McHUGH and GROFF, JJ., superior court justices, sat by special assignment pursuant to RSA 490:3; all who sat concurred.

APPEAL OF HEIDI L. MIKELL

145 N.H. 435

November 28, 2000

Borofsky, Lewis & Amodeo-Vickery, P.A., of Newington (Mark S. Gearreald and Stephen E. Borofsky on the brief, and Mr. Gearreald orally), for the petitioner.

Devine, Millimet & Branch, P.A., of Manchester (Paul L. Salafia on the brief and orally), for the respondent.

AUTHOR: DALIANIS

The petitioner, Heidi L. Mikell, appeals a decision of the New Hampshire Compensation Appeals Board awarding her benefits at the diminished earning capacity rate retroactive to October 11, 1996. We vacate and remand.

The petitioner was employed by the respondent, Autofair Toyota, on June 27, 1995, as an auto-reconditioner. For nine weeks she worked part-time. Starting on September 2, 1995, she began working full-time. On November 30, 1995, after working twelve weeks full-time, the petitioner slipped and fell, injuring her lower back.

The petitioner initially went to a chiropractor for treatment. She then sought treatment from her family physician, Dr. Gustavson, who advised that she cease work in December 1995. Early in January 1996, Dr. Gustavson approved her return to light duty work. The petitioner also consulted Dr. Levy, who prescribed physical therapy and light duty work restrictions. On January 11, 1996, the petitioner stopped working for the respondent entirely.

On January 22, 1996, the petitioner contacted Dr. Graf, who had treated her years earlier for an unrelated injury. Dr. Graf advised that she be taken out of work as of January 22. The petitioner also saw Dr. Polivy on February 9, 1996, for an independent medical examination. Dr. Polivy stated that the petitioner was capable of performing light duty work, with the limitation that she be able to alternate among sitting, standing, and walking.

On May 29, 1996, after examining the petitioner, Dr. Graf wrote to the respondent's general manager, stating that

[b]ased upon my most recent visit with [the petitioner] and also reflecting my knowledge of her condition of intervertebral disc herniation, I feel that she is not presently able to attempt employment, even on a part-time basis.

On October 11, 1996, in one of three decisions issued by the New Hampshire Department of Labor (DOL), a hearing officer determined that the petitioner failed to submit competent medical evidence that she was either temporarily totally disabled or residually disabled as a result of her fall on November 30, 1995. The hearing officer also found that the respondent had attempted to provide the petitioner with light duty work as suggested by Drs. Polivy and Levy but that the petitioner had decided not to return to work. Thus, the hearing officer concluded that the petitioner had "voluntarily withdrawn from work that fit within her limitations" and granted the respondent's insurance carrier permission to terminate the petitioner's temporary partial disability benefits of $71.79 per week, which had been based upon an average weekly wage of $202.90. See RSA 281-A:31 (1999). On June 19, 1997, the DOL ruled that RSA 281-A:15, I(a) (1999) was the correct method of calculating the petitioner's average weekly wage. In applying RSA 281-A:15, I(a), the hearing officer divided the petitioner's cumulative gross earnings of $4,261.00 by the twenty-one weeks that she had worked, for a gross average weekly wage of $202.90.

The petitioner appealed both decisions to the board. The board upheld the average weekly wage calculation of $202.90. The board, however, concluded that the petitioner was entitled to temporary partial disability benefits from the date of the injury. In reaching this decision, the board relied upon medical records of Drs. Graf and Levy, including Dr. Graf's May 29, 1996, letter. The board stated that it gave more weight to Dr. Graf's opinion because he had been the petitioner's primary treating physician.

Both parties requested clarification of the board's award of "temporary partial disability benefits." The petitioner also asked that

[p]ending clarification and any reconsideration in this matter, . . . the carrier be required to pay [the petitioner] at least the diminished earning capacity rate retroactive to October 11, 1996 [the date of the DOL decision terminating benefits] and prospectively, without prejudice to any party's position.

Pending the board's response, the petitioner filed a motion and a revised motion for rehearing. On December 9, 1998, the board issued a letter in which it stated:

After a careful review of the file and current correspondence, the Panel has decided to amend the September 18, 1998 decision to include the following:

"The carrier shall pay the claimant benefits at the Diminished Earning Capacity Rate retroactive to October 11, 1996."

Additionally, the board denied the petitioner's motions for rehearing.

On appeal, the petitioner argues that the board erred by: (1) computing her average weekly wage under RSA 281-A:15, I(a); (2) denying her motion to compel wage schedules of comparable employees to help determine her average weekly wage under RSA 281-A:15, I(c) (1999); and (3) awarding her benefits at the diminished earning capacity rate.

"On appeal, we will uphold an order of the board unless it is erroneous as a matter of law or the petitioner has demonstrated that the order is unjust or unreasonable." Appeal of HCA Parkland Medical Ctr., 143 N.H. 92, 93, 719 A.2d 619, 621 (1998) (quotation and brackets omitted); see RSA 541:13 (1997).

The petitioner first contends that the board erred when it computed her average weekly wage under RSA 281-A:15, I(a), because she worked for the respondent for fewer than twenty-six weeks before being injured and because of other circumstances related to her employment.

RSA 281-A:15 provides, in pertinent part:

I. Except as provided in paragraphs II and III and subject to RSA 281-A:28, 281-A:28-a and RSA 281-A:31-a, an average weekly wage shall be computed by using the method in subparagraph (a) or (b), or (c) that yields the result more favorable to the injured employee:

(a) By dividing the gross earnings of the injured employee in the service of the same employer during the preceding 26 weeks by that number of weeks; or

(b) By dividing the gross earnings of the injured employee in the service of the same employer during a period exceeding 26 weeks but not exceeding 52 weeks by the appropriate number of weeks.

(c) If, however, by reason of the shortness of time during which the employee has been in the employment of the employer or because of the nature or term of the employment, it is inequitable to compute the average weekly wage using the method in subparagraph (a) or (b), regard may be had to the rate of pay designated in the injured employee's agreement of employment or to the gross earnings of persons in the same grade employed at the same work by the same employer or, if there are no persons so employed, by persons of the same grade employed in the same class of employment in the same locality.

RSA 281-A:15, I (1999).

"This court is the final arbiter of the meaning of a statute, as expressed in the words of the statute itself. We interpret statutes not in isolation, but in the context of the overall statutory scheme. Although we give undefined language its plain and ordinary meaning, we must keep in mind the intent of the legislation, which is determined by examining the construction of the statute as a whole, and not simply by examining isolated words and phrases found therein." Appeal of HCA Parkland, 143 N.H. at 94, 719 A.2d at 621 (quotations and citations omitted). We "construe workers' compensation law liberally . . . resolv[ing] all reasonable doubts in favor of the employee." Appeal of Cote, 144 N.H. ___, ___, 737 A.2d 1114, 1117 (1999).

Construction of RSA 281-A:15, I, is made difficult by the confusing language in subparagraph (a). Subparagraph (a) requires the computation of an injured employee's average weekly wage by dividing the employee's gross earnings "during the preceding 26 weeks by that number of weeks." RSA 281-A:15, I(a) (emphasis added). The petitioner argues that as a matter of law the board was precluded from applying subparagraph (a) because she had not yet worked twenty-six weeks. The respondent counters that subparagraph (a) can apply to an employee who has worked fewer than twenty-six weeks by dividing the gross earnings of the employee during his or her employment by the number of weeks actually worked.

The petitioner's interpretation of subparagraph (a) would require an injured employee's gross earnings to be divided by twenty-six even if the employee has worked for the employer for fewer than twenty-six weeks. Although this interpretation is plausible, it is not the most reasonable because its practical implication is that subparagraph (a) would rarely, if ever, apply to an individual who worked fewer than twenty-six weeks. This is because, in almost all factual scenarios, dividing the individual's gross earnings by twenty-six, when the individual has worked fewer than twenty-six weeks, would be inequitable, requiring application of subparagraph (c).

While there may be more than one way to construe this language, "[w]e reject any strictly literal construction if it contravenes the legislature's intended purpose." Nashua Y.W.C.A. v. State, 134 N.H. 681, 684-85, 597 A.2d 535, 537 (1991). The most reasonable interpretation of "that number of weeks" is, as the respondent contends, the number of weeks the employee actually worked.

If the legislature intended subparagraph (c) to apply whenever an injured employee worked fewer than twenty-six weeks, it could have said so clearly. Additionally, it defies logic that the legislature would use the phrase "by reason of the shortness of time" in subparagraph (c) if it intended subparagraph (c) to apply all but automatically when an injured employee worked any amount of time less than twenty-six weeks.

It is more probable that the legislature intended subparagraph (a) to apply to an employee who has worked twenty-six weeks or fewer and to divide that employee's gross earnings by the amount of time actually worked. When considering the overall workers' compensation statutory scheme, the legislature could hardly have intended that the phrase "average weekly wage" not mean "average weekly wage" as that term is commonly understood.

Thus, the application of subparagraph (c) would be triggered only in those limited situations where subparagraph (a) is inequitable, instead of almost automatically, when an employee has worked fewer than twenty-six weeks.

Because we give substantial deference to the board's interpretation of the statute which it is charged with interpreting, see Littky v. Winchester School Dist., 129 N.H. 626, 629, 529 A.2d 399, 402 (1987), we interpret the phrase "that number of weeks" in subparagraph (a) to refer to the amount of time the petitioner actually worked. We reject the petitioner's argument that it was per se inequitable for the board to apply subparagraph (a) because she worked for the respondent for twenty-one weeks.

RSA 281-A:15, I, specifically directs the board, however, to compute benefits "by using the method in subparagraph (a) or (b), or (c) that yields the result more favorable to the injured employee." "When . . . more than one period is more favorable [to the employee], the [board] must use the most favorable period, i.e., that which produces the highest average weekly wage." Appeal of Gilbert, 142 N.H. 842, 844, 714 A.2d 216, 217 (1998).

Apparently, the board applied subparagraph (a) without considering whether doing so was inequitable in light of the nature of the petitioner's employment. This was error. Accordingly, we vacate and remand for the board to determine whether applying subparagraph (a) was inequitable because of the nature of the petitioner's employment. If the board so finds, then it should compute the petitioner's average weekly wage under subparagraph (c). See RSA 281-A:15, I.

The respondent contends that subparagraph (c) cannot apply because the respondent employs no similarly situated employees, an allegation that the petitioner disputes. Subparagraph (c), however, sets forth three factors that may be used to determine an injured employee's average weekly wage: (1) the rate of pay set forth in the employee's employment agreement; (2) the gross earnings of others in the same grade employed at the same work by the same employer; or (3) if no such persons exist, the gross earnings of persons employed in the same grade in the same class of employment in the same locality. See RSA 281-A:15, I(c). Thus, even assuming that no similar employee works for the respondent, the statute provides alternative means for determining the petitioner's average weekly wage.

Next, the petitioner contends that the board erred in denying her motion to compel discovery of comparable employees' earnings. In light of our ruling above, we vacate the board's ruling on the motion to compel.

Finally, the petitioner argues that the board erred in awarding her benefits at the diminished earning capacity rate retroactive to October 11, 1996.

The board initially ruled that the petitioner was "entitled to temporary partial disability benefits from the date of injury and continuing." Temporary partial disability benefits are suitable for an employee who is partially disabled but still able to work. See RSA 281-A:31; Appeal of Lalime, 141 N.H. 534, 538, 687 A.2d 994, 997 (1996). Upon the parties' requests for clarification, but without any explanation, the board amended its decision, ruling that the petitioner was entitled to benefits at the diminished earning capacity rate from October 11, 1996. N.H. Admin. Rules, Lab 510.03. We assume that the board, by amending its initial decision, concluded that the petitioner was entitled to temporary partial disability benefits from the date of her injury until October 11, 1996, after which time she was entitled to benefits at the diminished earning capacity rate.

The amended decision indicates that the board agreed with the DOL decision of October 11 that the petitioner was capable of performing at least light duty work. This conflicts with the findings of the board's initial decision, which relied upon Dr. Graf's letter stating that the petitioner was incapable of working at that time. The respondent contends that "there was substantial justification to give the . . . opinion by Dr. Graf no weight whatsoever." Nonetheless, the board did rely upon Dr. Graf's opinion and thus presumably found it credible.

Absent an explanation for the board's amended ruling, we are unable to review it. Accordingly, we vacate both the board's initial and amended rulings.

On remand the board shall support its ruling concerning the application of either subparagraph (a) or subparagraph (c) and its ruling concerning temporary disability benefits by findings of fact and rulings of law sufficient to permit meaningful judicial review. See Appeal of Kehoe, 139 N.H. 24, 27, 648 A.2d 472, 474 (1994).

Vacated and remanded.

NADEAU, J., concurred; GRAY, J., retired superior court justice, and McHUGH and GROFF, JJ., superior court justices, specially assigned under RSA 490:3, concurred.

APPEAL OF THOMAS WINGATE

No. 2001-400

SUPREME COURT OF NEW HAMPSHIRE

Opinion Issued: December 27, 2002

COUNSEL

Borofsky, Amodeo-Vickery & Bandazian, P.A., of Manchester (Mark S. Gearreald and Christopher Bandazian on the brief, and Mr. Gearreald orally), for the claimant. Desmarais, Ewing & Johnston, P.L.L.C., of Manchester (Scott A. Ewing and Heather G. Silverstein on the brief, and Mr. Ewing orally), for the respondent.

AUTHOR: BRODERICK

OPINION

The claimant, Thomas Wingate, appeals a decision of the New Hampshire Compensation Appeals Board (board) denying his request for payment of a medical bill incurred more than a decade after his 1988 workplace injury. He argues that the respondent, Hansen Fox Company, Inc., should have been estopped from contesting the causal relationship between his back condition treated in 2000 and his 1988 compensable work injury. We vacate inpart, reverse in part and remand.

We recite the facts found by the board, presented in the record, or undisputed by the parties. In January 1988, the claimant injured his lower back while employed as a pipe fitter for the respondent. His workers� compensation claim was accepted and benefits were paid. The claimant was treated by Dr. James M. Shea, an orthopedic physician, who diagnosed a "central bulging or herniation of a mild to moderate degree at L5-S1." The claimant participated in physical therapy for three months and took disability leave from work in 1988 and 1989. Dr. Shea recommended that he perform daily back exercises and use a back support in his car. The doctor also prescribed pain medication.

The claimant was last examined by Dr. Shea in 1990. Thereafter, he experienced low back pain several times per year, for which he took a prescribed pain medication. Dr. Shea last renewed the claimant�s prescription in August 1996. After Dr. Shea retired, the claimant was treated by Dr. Michael J. O�Connell. In February 1999, Dr. O�Connell concluded that the claimant suffered from "[d]egenerative L5-S1 disc disease with chronic recurrent lower back pain."

When the respondent�s insurance carrier denied payment for Dr. O�Connell�s 1999 bill, the claimant requested a hearing before the New Hampshire Department of Labor (DOL) pursuant to RSA 281-A:23 (1999). While his hearing request was pending, the claimant suffered another episode of back pain and, in early March 2000, he saw Dr. Louis Candito, who diagnosed "[d]egenerative disc disease lumbar spine."

In late March, the DOL conducted a hearing to determine the respondent�s obligation to pay Dr. O�Connell�s medical bill. It found that the bill was the employer�s responsibility because Dr. O�Connell�s treatment was a consequence of "[the claimant�s] recurring lower back problem stemming from the 1988 work injury." It ruled that the claimant had met his burden of proof by demonstrating that the bill was "causally related, reasonable, and necessary treatment for [his] lower back condition." The respondent took no appeal from this decision.

The respondent subsequently refused to pay Dr. Candito�s bill, again contending that the claimant�s back condition, for which he sought treatment, was not caused by the 1988 work injury. The claimant requested a hearing before the DOL, which found the bill compensable, reasoning that "the claimant has suffered no new injury since January 8, 1988, that his back condition has never stabilized, and that Dr. Candito found the claimant�s condition causally related to the original injury." The respondent appealed to the board.

Prior to the hearing before the board, the claimant filed a motion for summary judgment asserting that the earlier unappealed decision of the hearing officer concerning Dr. O�Connell�s 1999 bill estopped the respondent from disputing the causal relationship between that same back condition treated by Dr. Candito in 2000 and the 1988 work injury. The board denied the motion and after a hearing, found Dr. Candito�s bill unrelated to the original work injury treatment. It reasoned:

In coming to this conclusion, the Panel relies on the competent medical evidence of Dr. O�Connell and Dr. Candito, two treating physicians of the claimant. In both doctors� reports, they state that the claimant�s current problems are degenerative in nature and they do not relate the claimant�s injury in 1988 to his current condition. Further, the Panel is troubled by the fact that the claimant had failed to treat with any physician for a period of approximately eight or nine years.

The claimant�s motion for reconsideration was denied, and this appeal followed.

The claimant argues that the respondent should not have been allowed to relitigate the causal relationship between his 1988 work injury and his back treatment by Dr. Candito in March 2000 because the DOL had previously ruled compensable Dr. O�Connell�s 1999 bill for treatment involving the same degenerative condition. He contends that in the earlier proceeding involving O�Connell�s bill, the respondent fully contested the causal relationship between his back condition and the 1988 work injury, and failed to appeal the DOL�s adverse ruling. Because the respondent offered no evidence of a superseding injury involving his back since Dr. O�Connell�s 1999 treatment, the claimant argues that the board erred as a matter of law in considering the causal relationship between his back condition treated in 2000 by Dr. Candito and his 1988 work injury.

"We will [not] overturn the board's decision [unless we find] errors of law, or if we are satisfied by a clear preponderance of the evidence before us that the order is unjust or unreasonable." Appeal of Jamar, 145 N.H. 152, 154 (2000). The issue of whether the respondent should have been collaterally estopped from litigating causation is a matter of law, Farm Family Mut. Ins. Co. v. Peck, 143 N.H. 603, 605 (1999), that we review de novo, Byblos Corp. v. Salem Farm Realty Trust, 141 N.H. 726, 729 (1997).

This case involves the respondent�s responsibility to pay Dr. Candito�s bill for treating the claimant�s back condition as it existed in March 2000. Under RSA 281-A:23, I:

An employer subject to this chapter, or the employer's insurance carrier, shall furnish or cause to be furnished to an injured employee reasonable medical, surgical, and hospital services, remedial care, nursing, medicines, and mechanical and surgical aids for such period as the nature of the injury may require.

"Thus, an employer has a continuing obligation to provide or to pay for medical, hospital, and remedial care for as long as is required by an injured employee�s condition where it bears liability for the initial injury that necessitated the subsequent health care." Appeal of Bergeron, 144 N.H. 681, 684 (2000) (quotation omitted). The injured employee bears the burden of proving that the subsequent medical treatment is reasonable and required as a result of the injury. Appeal of Levesque, 136 N.H. 211, 214 (1992). A claimant is entitled to compensation for medical treatment only so long as the condition or disability requiring the treatment is causally related to the initial compensable injury. See Appeal of Sutton, 141 N.H. 348, 350 (1996); cf. Appeal of Hiscoe, 147 N.H. 223, 231 (2001).

The board denied coverage for Dr. Candito�s medical bill, ruling not only that the claimant�s back condition was not causally related to his 1988 work injury, but also that the bill was not reasonable or necessary. Ordinarily, the latter grounds for rejecting the bill would be sufficient. The only issue properly before the board, however, was causation. In the respondent�s denial letter regarding Candito�s bill, it solely contested the causal relationship between the treatment underlying the medical bill and the 1988 work injury. There is no evidence on the record before us that the respondent presented any other issue to the DOL. Indeed, in its decision, the DOL rendered specific findings on causation and offered no discussion on the reasonableness or necessity of Candito�s bill, and no other document involving the DOL proceeding is before us. Finally, during the hearing before the board, the respondent did not dispute the reasonableness or necessity of Candito�s bill. Accordingly, we vacate the board�s ruling concerning the reasonableness and necessity of Dr. Candito�s bill, and turn to the propriety of its causation ruling.

The doctrine of collateral estoppel precludes parties, or those in privity with them, from relitigating in a subsequent action any issue that was actually litigated in a prior proceeding where they were also parties. Appeal of Manchester Transit Auth., 146 N.H. 454, 461 (2001). For collateral estoppel to apply, "the issue subject to estoppel must be identical in each action, the first action must have resolved the issue finally on the merits, and the party to be estopped must have appeared in the first action, or have been in privity with someone who did." Simpson v. Calivas, 139 N.H. 1, 7 (1994) (quotation omitted). "Further, the party to be estopped must have had a full and fair opportunity to litigate the issue, and the finding must have been essential to the first judgment." Id. (citation omitted).

The identity of parties and finality of judgment components of estoppel are easily satisfied in this case. See RSA 281-A:43, I(b) (1999) (party has thirty days from decision of DOL to appeal to board). The parties dispute, however, whether the claimant satisfied his burden to prove that the causation issue related to the 2000 medical bill was identical to the causation issue determined in connection with the 1999 medical bill. See Appeal of Hooker, 142 N.H. 40, 44 (1997) (party asserting estoppel bears burden of proof). To resolve this dispute, we must first determine whether the causation issue that was actually litigated in relation to the 1999 bill was essential to the DOL�s ruling, and compare it to the causation issue disputed in relation to the 2000 bill.

The DOL found that the claimant treated with Dr. O�Connell "for a recurring lower back problem stemming from the 1988 work injury," and that "the claimant met his burden of proof that the medical bill submitted . . . [was] causally related, reasonable, and necessary treatment for the claimant�s lower back condition."

We conclude that the respondent actually litigated and the DOL necessarily decided the causal relationship between the claimant�s 1988 work injury and his 1999 back condition diagnosed and treated by Dr. O�Connell. The respondent disputed causation by asserting that the claimant had not undergone treatment for ten years prior to his visit with Dr. O�Connell and that he must have suffered a new injury in the interim. The DOL rejected this argument, and the respondent makes no assertion that it was deprived of an opportunity to fully and fairly litigate the causal relationship between the degenerative disc disease diagnosed by Dr. O�Connell and the 1988 work injury.

Further, the DOL�s ruling that the claimant�s "recurring lower back problem stemm[ed] from the 1988 work injury" necessarily related Dr. O�Connell�s diagnosis of "degenerative L5-S1 disc disease" to the initial compensable injury. In its factual findings, the DOL referenced the 1988 work injury and medical test showing a "bulging or herniation" at the L5-S1 spinal area. It found that when the claimant last saw Dr. Shea in 1990, his herniated disc condition was considered "under control" but that he continued to obtain prescriptions for pain relief from Dr. Shea�s office throughout the 1990s. It noted Dr. O�Connell�s diagnosis of "degenerative L5-S1 disc disease with chronic recurrent lower back pain" and cited no other source for the claimant�s back problem. It also specifically found that "[t]here is no evidence that the claimant has ever suffered a new injury and no evidence that his symptoms have ever resolved except for brief periods." Because an employer, and its carrier, are not responsible for subsequent health care precipitated by a disability or condition unrelated to the job injury, see Appeal of Sutton, 141 N.H. at 350-51, the causal relationship between the claimant�s diagnosed degenerative condition with recurring back pain and the 1988 work injury was essential to the DOL�s ruling. Therefore, the doctrine of collateral estoppel precludes the respondent from relitigating that issue.

For the DOL�s causation ruling concerning Dr. O�Connell�s 1999 bill to have a preclusive effect upon the proceeding involving Dr. Candito�s 2000 bill, however, the same back condition must have been treated by Dr. Candito. See Appeal of Hooker, 142 N.H. at 44. Thus, we next consider the nature of theclaimant�s back condition diagnosed by Dr. Candito.

Dr. Candito reviewed the same medical history as outlined by the DOL when it ruled upon Dr. O�Connell�s bill. Dr. Candito noted the 1988 work injury, the 1988 medical test indicating that the claimant suffered a central bulging of a mild to moderate degree at the L5-S1 level, and his periodic episodes of back pain occurring for more than a decade following his work injury. Ultimately, Dr. Candito diagnosed the claimant as suffering from "[d]egenerative disc disease lumbar spine," and recommended that the claimant take steps "to help prevent episodes of recurrence." A workers� compensation medical form signed by Dr. Candito refers to his diagnosis as, in part, "[d]egen[erative] disc disease L5-S1."

While worded slightly differently than Dr. O�Connell�s diagnosis of "degenerative L5-S1 disc disease with chronic recurrent lower back pain," the record and the board�s findings establish that the two doctors� diagnoses are identical in substance. Dr. Candito noted that the back pain precipitating his examination occurred "spontaneously," and made no mention of any separate event or independent source causing the claimant�s symptoms. Further, the board determined that both O�Connell and Candito described the claimant�s back problem as "degenerative in nature," and made no distinction between the two doctors� diagnoses. While an independent medical examiner, Dr. David Publow, opined that the claimant has an "underlying degenerative disc disease, possibly with an additional mild congenital malformation of the lower lumbar spine" which was not caused by the 1988 work event, and that his back problems, as recorded by Drs. O�Connell and Candito, were not related to the 1988 work event, he did not differentiate the claimant�s back condition as treated by both physicians. Indeed, the board expressly found that Dr. Publow "[did] not distinguish between Claimant�s compensable degenerative L5-S1 disc disease [evaluated by Dr. O�Connell] and [his] degenerative L5-S1 disc disease when he saw Dr. Candito [in March 2000]." There is no evidence in the record indicating that the claimant�s back condition treated by Dr. Candito differed from the condition diagnosed by Dr. O�Connell which the DOL found causally related to the 1988 work injury. The claimant testified without contest before the board that between doctor visits, he did not incur any new injury or exertion causing a problem to his back, and the respondent made no claim that the 2000 back condition resulted from an independent cause. See Appeal of Bergeron, 144 N.H. at 684. While the board stated that Drs. O�Connell and Candito did not "relate the claimant�s injury in 1988 to his current [degenerative disc disease] condition," the DOL conclusively established this causal connection concerning Dr. O�Connell�s diagnosis, and the board was not at liberty to review this unappealed decision. Further, the board�s statement that it was "troubled by the fact that the claimant had failed to treat with any physician for a period of approximately eight or nine years" (between treatment with Dr. Shea in 1990 and with Dr. O�Connell in 1999), standing alone, cannot serve as a basis for distinguishing the claimant�s 1999 and 2000 back conditions. See Id. at 686.

Finally, the existence of the independent medical examiner�s report opining that the claimant�s degenerative disc disease was not caused by the 1988 work event does not create an opportunity for the respondent to relitigate an issue finally determined by a DOL hearing officer in a prior proceeding. Its opportunity to contest the relationship between the claimant�s degenerative disc disease and the 1988 work injury, through an independent medical examiner or otherwise, occurred in connection with Dr. O�Connell�s 1999 bill, when the DOL hearing officer heard the issue and the respondent had the opportunity to appeal de novo to the board. See Appeal of Levesque, 136 N.H. at 214 (appeals to board are heard de novo).

Therefore, we conclude that the record establishes that the claimant suffered from the same back condition in 2000 when he treated with Dr. Candito as the DOL found he suffered in 1999 when he saw Dr. O�Connell. Accordingly, the board erred as a matter of law in permitting the respondent to relitigate whether the claimant�s degenerative disc disease was causally related to his 1988 work injury.

Vacated in part; reversed in part; and remanded.

BROCK, C.J., and NADEAU, DALIANIS and DUGGAN, JJ., concurred.

Green Mountain Insurance Company
vs.
Jan and Gary George

No. 92-683

138 N.H. 10, 634 A.2d 1011, 1993 N.H. LEXIS 154

December 3, 1993

Wiggin & Nourie, P.A., of Manchester (Doreen F. Connor on the brief and orally), for the plaintiff.

Engel, Gearreald & Gardner, PA, of Exeter (Mark S. Gearreald on the brief and orally), for the defendants.

Brennan, Caron, Lenehan & Iacopino, of Manchester (Ronald J. Caron on the brief), by brief for the New Hampshire Trial Lawyers Association, as amicus curiae.

AUTHOR: THAYER

This is an appeal from a ruling by the Superior Court (Manias, J.) on a petition for declaratory judgment. The plaintiff, Green Mountain Insurance Company (Green Mountain), brought the declaratory judgment action to determine whether the uninsured motorist benefits provisions of its New Hampshire motor vehicle liability policy applied to an automobile collision that occurred in Massachusetts involving the insured, defendant Jan George, and a Massachusetts automobile owner. The trial court ruled that: (1) New Hampshire law governs the construction of the insurance contract; (2) the Georges were "legally entitled to recover" for injuries, including pain and suffering, proximately caused by the alleged tortfeasor; and (3) the alleged tortfeasor�s vehicle was "uninsured" for purposes of Green Mountain�s insurance policy. Green Mountain appeals the trial court�s rulings. For the reasons that follow, we affirm.

In lieu of an evidentiary hearing, the parties to the declaratory judgment petition submitted an agreed statement of facts. On April 17, 1990, Jan George, a New Hampshire resident, was driving her automobile when she was injured in a two-car accident in Amesbury, Massachusetts. Jan George alleges that Lorraine Castonguay, driver of the second vehicle and a resident of Massachusetts, was legally at fault. At the time of the accident, Jan George and her husband, Gary George, were insured by a Green Mountain motor vehicle liability policy that provided uninsuredunderinsured motorist coverage of $50,000 per person, with a limit of $100,000 per occurrence. Lorraine Castonguay was insured by Commerce Insurance Company with liability limits of $50,000 per person, up to $100,000 per occurrence, but subject to the provisions of the Massachusetts "no fault" insurance coverage cap. Mass. Gen. Laws Ann. ch. 231, � 6D (West Supp. 1993).

In June 1990, the Georges filed a complaint in the United States District Court for the District of Massachusetts against Lorraine Castonguay, alleging negligence and seeking damages for Jan George�s medical expenses, lost wages, and pain and suffering, and for Gary George�s loss of consortium. The district court granted summary judgment against the Georges because Jan George�s medical bills totaled less than the $2,000 threshold required under Massachusetts law for a plaintiff to recover damages for pain and suffering.

After Green Mountain reimbursed the Georges for Jan George�s medical treatment, the Georges initiated an arbitration claim against Green Mountain for uninsured motorist benefits, in accordance with the terms of the insurance policy. Green Mountain then brought its declaratory judgment action in the superior court, and now appeals that court�s ruling.

This dispute centers mainly on the interpretation of the phrase "legally entitled to recover," as found in the parties� insurance contract. In requiring insurance companies to provide uninsured motorist coverage in all motor vehicle policies, the legislature determined that such benefits should be available "for the protection of persons... who are legally entitled to recover damages from owners or drivers of uninsured motor vehicles." RSA 264:15, I (1993). The Georges� insurance policy with Green Mountain incorporates the same "legally entitled to recover" phrase:

"[The insurer is obligated] [t] o pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury... sustained by the insured, caused by the accident and arising out of the ownership, maintenance or use of such uninsured automobile...."

Both the statute and the insurance policy are silent as to which State�s laws apply to a determination of "legally entitled to recover." This omission is of particular importance where, as here, the underlying accident involves residents of more than one State.

The parties do not contest the fact that Massachusetts law prevents the Georges from recovering damages for pain and suffering against the alleged tortfeasor. Green Mountain relies primarily on a Rhode Island Supreme Court decision, Blais v. Aetna Casualty & Sur. Co., 526 A.2d 854 (R.I. 1987), to insist that the Georges� inability to pursue a tort action in Massachusetts against the alleged tortfeasor means that the Georges are not "legally entitled to recover" New Hampshire uninsured motorist benefits. We disagree.

We have held that "while the underlying action against the tortfeasor is a tort action, the underinsured coverage claim is based in contract." Metropolitan Prop. & Liabil. Ins. Co. v. Walker, 136 N.H. 594, 596, 620 A.2d 1020, 1022 (1993). In contract cases, we apply "the law of the State with the most significant relationship to the contract [to] govern questions regarding the contract�s performance." Glowski v. Allstate Ins. Co., 134 N.H. 196, 198, 589 A.2d 593, 595 (1991). When the interpretation of insurance policy language is at issue, our interpretation is governed by the law of the State that is the "principal location of the insured risk." Id. (quotation omitted). We note that our choice-of-law test for insurance contracts differs substantially from the test applied by the Rhode Island Supreme Court in Blais supra. We refuse to effectively create a no-fault law in this State, where our legislature has refused to enact no-fault legislation, despite the constitutional ability to do so. Opinion of the Justices, 113 N.H. 205, 212-13, 304 A.2d 881, 886-87 (1973). In this case, because the Georges� car was garaged in New Hampshire, New Hampshire law governs.

New Hampshire law mandates that insurance carriers provide coverage to insureds for accidents involving uninsured motorists in an amount not less than the amount of liability insurance provided to the insured. RSA 264:15, I. This coverage must be provided to insured New Hampshire motorists whether the accident occurs within the boundaries of this State or beyond them. See Gay v. Preferred Risk Mut. Ins. Co., 114 N.H. 11, 15, 314 A.2d 644, 646 (1974). As a general rule, we construe insurance policy language with the purpose of honoring the reasonable expectations of the policyholder. Town of Epping v. St. Paul Fire & Marine Ins. Co., 122 N.H. 248, 252 , 444 A.2d 496, 498 (1982). If the policy�s terms are clear and unambiguous, the language "must be accorded its natural and ordinary meaning." Trombley v. Blue CrossBlue Shield, 120 N.H. 764, 770, 423 A.2d 980, 984 (1980) (quotation omitted). If, however, the policy language is reasonably susceptible of at least two different interpretations, one of which favors coverage, the language is ambiguous. See Coakley v. Maine Bonding & Cas. Co., 136 N.H. 402, 410, 618 A.2d 777, 781-82 (1992); see also 3 A. Widiss, Uninsured and Underinsured Motorist Insurance � 34.1, at 31 (2d ed. 1992). Such ambiguities must be "construed in favor of the insured and against the insurer." Trombley, 120 N.H. at 771-72, 423 A.2d at 985.

With these bedrock legal principles in mind, we turn to the task of applying New Hampshire law to determine whether the Georges are "legally entitled to recover" and whether the Massachusetts tortfeasor�s vehicle qualifies as "uninsured."

The phrase "legally entitled to recover" is not expressly defined in the applicable statute. See RSA 264:15, I. Although the insurance policy similarly does not expressly define the phrase, the Georges urge us to examine the following policy language:

"[P] rovided, for the purposes of this coverage, determination as to whether the insured... is legally entitled to recover such damages, and if so the amount thereof, shall be made by agreement between the insured... and the company or, if they fail to agree, by arbitration."
The Georges submit that the alternative forms of dispute resolution agreed to by the parties under this insurance policy are designed to determine matters of fact, such as who is at fault in a collision and how much the wronged party is entitled to recover from the party at fault. Under such an interpretation, they argue, the "legally entitled to recover" phrase refers to whether the owner or operator of the uninsured automobile was at fault. On the other hand, Green Mountain argues that the phrase refers only to the Georges� entitlement as a matter of law to pursue damages against the alleged tortfeasor. We find the phrase "legally entitled to recover" susceptible of both interpretations propounded by the parties and, therefore, hold that it is ambiguous. Coakley, 136 N.H. at 410, 618 A.2d at 781-82. Because the Georges� interpretation would favor coverage, we must construe the phrase in favor of the Georges and against Green Mountain. Trombley, 120 N.H. at 771-72, 423 A.2d at 985. We note that other jurisdictions agree with this interpretation. See, e.g., State Farm Mutual Automobile Ins. Co. v. Baldwin, 470 So. 2d 1230, 1233 (Ala. 1985); Uptegraft v. Home Ins. Co., 662 P.2d 681, 685 (Okla. 1983). Accordingly, we hold that the Georges� right to recover will depend on their ability to establish fault on the part of the alleged tortfeasor at a subsequent uninsured motorist arbitration hearing.

Green Mountain insists that, even under New Hampshire law, the Georges cannot proceed to arbitration because they failed to exhaust their liability claim against the alleged tortfeasor. We reject this contention. The exhaustion requirement in Green Mountain�s policy states:

"The company shall not be obligated to make any payments... until after the limits of liability under all bodily injury liability bonds or insurance policies applicable at the time of the accident have been exhausted by payments of judgements or settlements."
(Emphasis added.) Under the facts of this case, due to the restrictions of the Massachusetts "no fault" statute, the alleged tortfeasor effectively had no applicable insurance policy for the Georges to exhaust. The Georges proceeded as far as they could with their claim against the alleged tortfeasor by filing suit in the federal district court in Massachusetts, only to have that claim dismissed as a matter of Massachusetts law. We hold that the Georges did exhaust their legal claim against the alleged tortfeasor, and therefore are not precluded, on the basis of the exhaustion requirement, from proceeding to uninsured motorist arbitration in accordance with the terms of the insurance contract.

Lastly, Green Mountain argues that the Massachusetts tortfeasor�s vehicle cannot qualify as an "uninsured" or "underinsured" automobile because her policy with Commerce Insurance had liability limits of $50,000 per person and, subject to this per person limitation, $100,000 per occurrence, thereby equalling the Georges� coverage. This argument does not withstand close analysis. Green Mountain defines an underinsured motor vehicle as

"a motor vehicle with respect to the ownership, maintenance, or use of which the sum of the limits of liability under all bodily injury liability bonds and insurance policies applicable at the time of the accident is less than the sum of the applicable limits of bodily injury liability under this and any other similar insurance available to the insured."
(Emphasis added.) As we stated in our discussion of the exhaustion requirement, the alleged tortfeasor had only limited insurance applicable to this collision that would afford any coverage to the Georges, because Jan George�s medical bills did not meet the Massachusetts threshold requirement for recovery of damages for pain and suffering. For the purposes of interpreting the Georges� insurance policy, therefore, the alleged tortfeasor was effectively "uninsured." To hold otherwise would undermine the Georges� reasonable expectation that their insurance carrier would cover them for losses sustained in an accident with a tortfeasor who cannot compensate them for their injuries. We will not override the reasonable expectations of the policyholder in this case, see Town of Epping, 122 N.H. at 252 , 444 A.2d at 498, especially in light of our affirmation that "[t] his State�s paramount interest is to see that accident victims receive some kind of compensation for their injuries." LaBounty v. American Insurance Co., 122 N.H. 738, 743, 451 A.2d 161, 164 (1982).

Under the rule established in Vigneault v. Travelers Insurance Co., 118 N.H. 75, 79, 382 A.2d 910, 913 (1978), the Georges may recover the difference between their uninsured motorist coverage and that which they can recover from the alleged tortfeasor. Because, from the Georges� perspective, the alleged tortfeasor effectively has no liability coverage, the Georges may be entitled to the full extent of their uninsured motorist coverage. Green Mountain�s assertion that this holding poses a potential detriment to the insurance industry, due to an effective preclusion of subrogation rights, is disingenuous. The fact that Green Mountain cannot assert a claim in Massachusetts against the alleged tortfeasor actually legitimizes the Georges� claim that the alleged tortfeasor is "uninsured." Green Mountain cannot now seek to avoid coverage for which it has already charged the Georges a premium. Moreover, nothing in the parties� insurance contract conditions coverage on Green Mountain�s opportunity to exercise its subrogation rights. We hold that the Georges� claim may proceed to arbitration.

Affirmed.

All concurred.

Metropolitan Property & Liability Insurance Company
vs.
Joyce K. and Wilbur Ralph

No. 92-250

138 N.H. 378, 640 A.2d 763

March 31, 1994

Wiggin & Nourie, P.A., of Manchester (Gordon A. Rehnborg, Jr. and Doreen F. Connor on the brief, and Mr. Rehnborg orally), for the plaintiff.

Engel, Gearreald & Gardner, P.A., of Exeter (Mark S. Gearreald on the brief and orally), for the defendants.

JUDGES

BATCHELDER, J., concurred; JOHNSON, J ., concurred specially in Part I and concurred in Part II; THAYER, J., with whom BROCK, C.J., joined, dissented.

AUTHOR: HORTON

The plaintiff, Metropolitan Property & Liability Insurance Company (Metropolitan), appeals an order of the Superior Court (Perkins, J.) requiring it to pay more than $48,000 in prejudgment interest to its insureds, Joyce K. and Wilbur Ralph. The Ralphs cross-appeal, arguing that the trial court erred in calculating prejudgment interest at a simple rate under RSA 336:1 (1984). We affirm.

In 1979, Joyce K. Ralph was injured when her car was struck by a vehicle driven by Raymond J. Clark. Clark was insured by National Grange Mutual Insurance Company (National Grange) under an automobile liability policy that provided $100,000 in coverage. Mrs. Ralph and her husband brought suit against Clark in 1983. The Ralphs were insured by Metropolitan under a policy that provided uninsured motorist coverage of $250,000 per person. In 1985, the Ralphs demanded arbitration against Metropolitan, but the parties agreed to delay arbitration until after the suit against Clark was resolved.

Because of delay in scheduling a trial date, the Ralphs, Clark, and National Grange agreed in 1989 to binding arbitration in the Ralphs� action against Clark. The Ralphs� attorney repeatedly asked Metropolitan to participate in the arbitration of the underlying liability action, but Metropolitan declined based on its determination that the Ralphs� damages would not exceed Clark�s $100,000 policy limit. The Ralphs and National Grange discussed adding interest to the arbitration award from the date of the writ, as would have happened pursuant to RSA 524:1-b (1974) if the case had proceeded to a jury trial in superior court.

In early 1990, the three-member arbitration panel awarded judgment for the Ralphs "in the combined amount of NINETY THOUSAND DOLLARS ($90,000). Said judgment does not include any interest which shall be calculated and added to the judgment pursuant to R.S.A. 524:1-b , or as agreed to by counsel for the parties." Interest was calculated at $58,245. Metropolitan consented to the Ralphs� settlement with National Grange for the $100,000 liability limit of Clark�s policy. The Ralphs then renewed their demand for arbitration against Metropolitan, seeking to recover the balance of the interest, $48,245.

Metropolitan filed a petition for declaratory judgment asking that the Ralphs� demand for uninsured motorist arbitration be rejected. Metropolitan argued that the Ralphs were bound by the liability arbitration, and because the Ralphs� damages were only $90,000, an amount within the tortfeasor�s policy limits, the Ralphs could not make a claim against their uninsured motorist policy. Metropolitan also moved for summary judgment asserting that the Ralphs were bound by the underlying arbitration award, that they were precluded from asserting additional damages in further arbitration by the doctrine of collateral estoppel, and that they are entitled only to interest accruing since the date of the liability arbitrator�s award.

On Metropolitan�s motion for summary judgment, the Superior Court (McHugh, J.) ruled that the Ralphs "had a full and fair opportunity to litigate the amount of damages for which the tortfeasor was responsible and they are thus barred by the doctrine of collateral estoppel from relitigating that issue." With regard to the question of whether Metropolitan was liable for the $48,245 in prejudgment interest, the court found a dispute of material fact as to whether the Ralphs and National Grange agreed that interest on the arbitrator�s award would run from the date of the writ. A hearing was held, and the Superior Court (Perkins, J.) ruled that the Ralphs and National Grange "did agree prior to entering into arbitration that interest on the arbitrator�s award would run from the date of the writ."

Metropolitan argued that it was not bound by a private agreement between the Ralphs and National Grange because it was not a party to the agreement. The court ruled:

"Defendants note that [Metropolitan�s] position is inconsistent: on the one hand, it seeks to bind defendants to the arbitration award, while on the other hand [Metropolitan] seeks to exclude prejudgment interest from that award, asserting that it is not bound by the agreement between defendants and National Grange.

The Court finds that [Metropolitan] is responsible for payment of prejudgment interest. [Metropolitan] cannot simultaneously accept the arbitration award and reject the agreement regarding interest upon which the award was premised."
The court also denied the Ralphs� motion to amend their requests to increase the balance of interest owed from $48,245 to $80,910.34 based on a claim of right to compound interest. Both parties appealed.

I. Prejudgment Interest

At the conclusion of the liability arbitration proceedings, Metropolitan was in a position to either accept the results of those proceedings, or reject them and move to fresh arbitration on liability and damages under the terms of its uninsured motorist coverage. This election existed because the Ralphs were bound by the factual findings of that award, including damages, by the doctrine of collateral estoppel. See Caouette v. Town of New Ipswich, 125 N.H. 547, 554, 484 A.2d 1106, 1111 (1984); Sanderson v. Balfour, 109 N.H. 213, 216, 247 A.2d 185, 187 (1968). On the other hand, Metropolitan was not bound by these findings since the liability arbitration proceedings were not "an action prosecuted by the insured or his legal representative with the written consent of METROPOLITAN," as required under part 3 of the Ralphs� policy, nor was Metropolitan otherwise asserted to be in privity with the Ralphs in those proceedings. Nat�l Grange Mut. Ins. Co. v. Smith, 133 N.H. 279, 280, 574 A.2d 1386, 1387 (1990); see also U.S. Fire Ins. Co. v. Millard, 847 S.W.2d 668, 674 (Tex. Ct. App. 1993). Faced with this election, Metropolitan chose to assert the binding effect of the liability arbitration. This choice was made in the face of the Ralphs� demand for fresh arbitration on the uninsured motorist claim. Having made this election, Metropolitan has consented to be bound, after the fact, to the proceedings and to the award. Thus, as found by the trial court, "[Metropolitan] cannot simultaneously accept the arbitration award and reject the agreement regarding interest upon which the award was premised." Metropolitan�s election was made with full knowledge of the award and the interest component thereof.

We have recognized that the timemoney element may be proper for inclusion in an uninsured motorist arbitration award, both retrospectively and prospectively. See Leach v. O�Neill , 132 N.H. 665, 667, 568 A.2d 1189, 1190 (1990). In Leach, we could not determine whether the timemoney element was included in the bulk award; we held that the provisions of RSA 524:1-b , regarding interest on verdicts, do not apply to such awards. Id . at 669, 568 A.2d at 1191-92. We have also recognized that the manner in which the timemoney element is to be handled in arbitration may be established by the parties to the arbitration, including using RSA 524:1-b as the measuring stick. Major v. Acorn Investment Co. , 134 N.H. 86, 90, 588 A.2d 811, 813 (1991). Since the parties agreed to use RSA 524:1-b as a measuring stick for the timemoney element in the underlying liability arbitration, the interest calculated according thereto is properly considered part of the arbitration award. This holding does not affect the general rule that interest runs from the date of an arbitration award. Ellis v. Royal Ins. Co. , 129 N.H. 326, 341, 530 A.2d 303, 312 (1987); Hackman v. American Mut. Liab. Ins. Co. , 110 N.H. 87, 94, 261 A.2d 433, 438 (1970). We continue to presume that the timemoney factor is included in an arbitration award, absent explicit indication of the contrary.

Metropolitan next argues that even if it is bound by the liability arbitration award, the award assessed damages and interest separately. Under the terms of its contractual insurance obligation, Metropolitan contends that it is liable only for damages, not pre-award interest. Since damages were assessed at $90,000, and that sum was paid by the liability carrier, there is no coverage on which to base an interest payment order. This argument is based on a recent decision of this court, National Grange Mutual Insurance Co. v. Smith, 133 N.H. 279, 281-82, 574 A.2d 1386, 1387-88 (1990). In National Grange, the court was faced with an uninsured motorist claim based on a superior court verdict that bound the uninsured motorist carrier. The carrier was relieved of the obligation to pay prejudgment interest by virtue of the terms of its coverage. The court analyzed the policy, finding that the uninsured motorist coverage provided payment for an "amount that "the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle because of bodily injury. . .including death. . . .� " Id . at 281, 574 A.2d at 1387. The court found no definition provided for "damages," but, reading the policy as a whole, found, in the context of the liability coverage section, a distinction between "damages" and "interest on the judgment." Finding no reason to ignore this distinction in its interpretation of "damages" under the uninsured motorist section, it found no contractual obligation to pay prejudgment interest. Nor did it find any obligation to pay prejudgment interest extraneous to the policy.

The policy language at issue in National Grange does not materially differ from the policy language before us now. The uninsured motorist coverage (section II, part 3) is essentially the same. Part 3 expressly incorporates the liability section (part 1) definition of "damages." The definition is hardly helpful: " "damages� with respect to bodily injury includes damages for care and loss of services resulting therefrom...." In part 1, Metropolitan agrees to pay "all sums which the insured shall become legally obligated to pay as damages because of bodily injury...." It makes no mention of prejudgment interest on the entire amount of any judgment [in any suit defended by Metropolitan] which accrues after the entry of judgment...." The National Grange distinction clearly exists.

It is troubling to ruminate on where the National Grange holding takes us. We have said that because the liability coverage of these policies distinguishes between "damages" and "interest," the obligation to pay damages does not include an obligation to pay prejudgment interest, at least under the terms of uninsured motorist coverage. But the distinction is drawn under the terms of liability coverage. Does not the logic of the holding drive us to say that prejudgment interest is not covered under liability coverage? The case of the well-insured individual, who suffers a verdict at the end of a long-delayed liability action and faces paying more in interest than the "damages" covered by the policy, is not pleasant to contemplate.

So we revisit the prejudgment interest holding of National Grange. That holding found that the "damages" measure of coverage in uninsured motorist claims did not include prejudgment interest, since the damages covered by liability coverage was distinguished from post-judgment interest. The policy in National Grange, and in the case before us, does not specifically address prejudgment interest. Therefore, the question to be revisited is whether "damages" in the liability, and by extension in the uninsured motorist, parts of the policy includes prejudgment interest provided by RSA 524:1-b on verdicts (as in National Grange) or prejudgment interest awarded under an arbitration award. We hold that the policy�s use of "damages" necessarily includes prejudgment interest. See A. Windt, Insurance Claims and Disputes � � 6.15 , at 321 (1988). Prejudgment interest is added, pursuant to RSA 524:1-b , to the amount of damages determined by verdict, prior to judgment. The legislature has provided, in RSA 412:1 (1991) regarding bodily injury liability policies, that such policies "shall contain an agreement in clear and explicit terms binding the insurer, to the extent of the liability assumed by the policy, to pay and satisfy any such judgment, and to protect the assured against the levy of any execution issued upon the same." We interpret the clause "to the extent of the liability assumed by the policy" to limit the statutory insurance obligation to the policy limits. The policy at issue, where possible, must be interpreted to comply with this statutory mandate. Thus, the damages payment promised includes all elements of the judgment or award, see RSA 542:9 (1974), absent provision for payment elsewhere in the policy. We would overrule the prejudgment interest rule in National Grange and affirm the trial court�s finding of an obligation in Metropolitan�s policy to pay this interest. Because our colleagues Chief Justice Brock and Justice Thayer dissent from this opinion and Justice Johnson concurs only in the result, however, there is no majority opinion in this case. The trial court�s finding is affirmed, but the validity of National Grange is left for another day.

II. Simple v. Compound Interest

The Ralphs have cross-appealed, asserting that prejudgment interest should have been calculated by compounding. They seek an award of $80,910.34, rather than the $48,245 calculated by simple interest that the trial court awarded.

Pursuant to RSA 524:1-b , prejudgment interest is added to the amount of the prevailing party�s damages at the time a verdict or finding is made. The applicable interest rate is set forth in RSA 336:1 : "The annual rate of interest on judgments and in all business transactions in which interest is paid or secured, unless otherwise agreed upon in writing, shall equal 10 percent." The defendants contend that the phrase "annual rate of interest" requires that interest be compounded each year on the anniversary of the date of the writ. RSA 524:1-b , however, provides for interest only on the verdict or finding; the plain language of the statute does not provide for interest on accrued interest. Moreover, the prevailing view in other jurisdictions with similar interest statutes is that interest is to be calculated on a simple basis in the absence of an express authorization from the legislature. See William W. Thomas�s Case, 25 Mass. App. Ct. 964, 965, 519 N.E.2d 786, 788 (1988); Restatement (Second) of Torts� � 913 comment b (1977). Inasmuch as the New Hampshire Legislature has not expressly provided for compound interest under RSA 336:1 , we cannot accept the defendants� argument. See R. Wiebusch, 5 New Hampshire Practice, Civil Practice & Procedure � � 1694 (1984).

The Ralphs further argue that the term "annual rate" in RSA 336:1 is synonymous with compounding. Other jurisdictions have rejected this interpretation, holding that "per annum," "per year," or "annual rate" provides for simple interest. See Stovall v. Illinois Central Gulf R. Co., 722 F.2d 190, 192 (5th Cir. 1984); Republic Sec. Corp. v. Puerto Rico Aqueduct & Sewer Authority, 674 F.2d 952, 958-59 (1st Cir. 1982); Lee v. Volkswagen of America, Inc. , 743 P.2d 1067, 1069 (Okla. 1987); Schwartz v. Piper Aircraft Corp., 90 Mich. App. 324, 327-28, 282 N.W.2d 306, 309 (1979). The defendants argue that these cases are distinguishable because these jurisdictions have two distinct statutes, one specifying a compound or actuarial rate, and the other providing for an annual rate of interest. More persuasively, these cases support the position that interest is computed on a simple basis in the absence of express authorization from the legislature.

Our holding that RSA 336:1 provides for simple interest is also consistent with past applications of the statute. In Mast Road Grain & Building Materials Co. v. Piet, 126 N.H. 194, 198, 489 A.2d 143, 146 (1985), this court applied both RSA 336:1 and RSA 524:1-a to grant the plaintiff "an interest rate of 10% upon the total amount of the debt owing from the commencement of the suit." It appears that this court computed the interest on the judgment based upon a simple rate of interest.

The defendants further challenge the trial court�s award of simple interest on the grounds that awarding the prevailing plaintiff simple interest contravenes the legislative intent of RSA 524:1-b , to accelerate settlement and provide compensation for the loss of use of money damages. See Chagnon v. Union-Leader Co., 104 N.H. 472, 476, 190 A.2d 721, 724 (1963). Assuming the language of RSA 524:1-b is ambiguous, cf. Union Leader Corp. v. Fenniman, 136 N.H. 624, 626, 620 A.2d 1039, 1040 (1993), our examination of the legislative history leads us to the contrary conclusion. As this court has noted, "[i] n each case, the Court must seek the specific intent of the lawmakers in the particular legislation, and once disclosed, it controls any generalized statements elsewhere as to the meaning of the words used." Chagnon, 104 N.H. at 477, 190 A.2d at 724. In this case, an examination of the legislative history of RSA 524:1-b and RSA 336:1 reveals that the intent of the legislature was to calculate interest on a simple basis under RSA 336:1. In its original form, RSA 524:1-b applied only to personal injury awards, awards for wrongful death, consequential damages, and damage to property. See Chagnon, 104 N.H. at 473, 190 A.2d at 722. In 1963, the legislature amended the statute to encompass all money damage awards. During a discussion of the amendment, Senator Green described the purpose of RSA 524:1-b as follows:

"[T]o provide that in all cases, interest was to be added to the judgment, not only in personal injuries, but in all other cases. This amendment would provide that interest is added only at the time of the final verdict when the case is heard and over with so it is not compounded interest on interest ."

N.H.S. Jour. 705 (1963) (emphasis added). Subsequent to this amendment the legislature also rejected a house bill proposing the application of a compound rate under RSA 524:1-b. See N.H.S. Jour. 1139-41 (1967). Accordingly, we find that the legislative history buttresses our holding that RSA 336:1 provides for simple interest.

We have considered the defendants remaining arguments in support of compound interest and have found them unpersuasive. See Vogel v. Vogel, 137 N.H. 321, 322, 627 A.2d 595, 596 (1993). We affirm the trial court�s award as calculated.

Affirmed.

CONCURRENCE

Johnson, J.,concurring specially in part: I would affirm the trial court in this case, but would not reach the issue of whether there is continuing vitality in National Grange Mutual Insurance Co. v. Smith , 133 N.H. 279, 574 A.2d 1386(1990). Hence, I concur in the result reached by my colleagues justices Horton and Batchelder, but I do not conclude that National Grange should be overruled.

The trial court made significant findings of fact that lead me to this conclusion. The trial court found as follows:

"Metropolitan is now seeking to renege on its position, expressed in Mr. Auth�s [Metropolitan�s claim service representative] letter of August 3, 1988 (Plaintiffs� exhibit 24), that it would participate should the arbitration hearing result in a verdict in excess of National Grange�s policy limit, which did occur here by virtue of Pre-Judgment interest being part of the arbitrators� award as per agreement of the Ralphs and National Grange.

The record supports the trial court�s findings of fact. see Renovest Co. v. Hodges Development Corp., 135 N.H. 72, 79, 600 A.2d 448, 452 (1991). Finally, the trial court in its written order concluded:

"Defendants note that the plaintiff�s position is inconsistent: On the one hand, it seeks to bind defendants to the arbitration award, while on the other hand plaintiff seeks to exclude prejudgment interest from that award, asserting that it is not bound by the agreement between defendants and National Grange.

The court finds that plaintiff is responsible for payment of prejudgment interest. Plaintiff cannot simultaneously accept the arbitration award and reject the agreement regarding interest upon which the award was permised."

I concur with the trial court�s ultimate findings. I conclude that metropolitan is estopped to deny coverage for the entire award granted to the Ralphs based on its conduct prior to and after the arbitration award. The arbitration award was made in January 1990. On April 4, 1990, Mr. Auth, on behalf of metropolitan, wrote to the Ralphs� attorney, "I have reviewed this matter quite closely and in view of the fact that the American Arbitration Association places a value of $90,000.00 on this case I must deny any claims for underinsured motorist coverage as you failed to obtain a verdict either equal to or in excess of the underlying carriers policy limit." (emphasis added.) Mr. Auth, however, who at this time was surely aware of the parties� agreement as to pre-judgment interest, did state that "metropolitan property and liability insurance company hereby grants its consent to settle the third party liability claim with national grange insurance company for their $100,000 policy limit." The Ralphs attempted to have the arbitration with Metropolitan proceed, but Metropolitan refused. This case then followed.

Simply put, metropolitan refused to take part in the original arbitration proceedings with Clark�s Insurance Company, yet insisted that the Ralphs were bound by the results of the very arbitration proceeding in which it declined to participate. As the trial court aptly found, "Metropolitan cannot have it both ways: On the one hand seeking to bind the Ralphs to the arbitration award while on the other hand seeking to exclude from that award prejudgment interest on grounds that Metropolitan did not agree to any of the terms of the arbitration proce[E] dings." In my view, Metropolitan had to accept all of the arbitration award--that is, damages plus interest from the date of the writ--or none of it. Metropolitan cannot accept that portion of the award that it likes and reject that portion of the award it dislikes.

My colleagues have engaged in an interesting discussion of National Grange. Two of my colleagues would overrule that case, which was decided only three years ago by a unanimous court; Two of my colleagues believe it mandates a finding in favor of Metropolitan. I see no cause to reach the issue as this case can be decided as set forth above.

This court has repeatedly extolled the virtues of stare decisis. see, A.2d 1232, 1233 (1991); Petition of Correia , 128 N.H. 717, 721-22, 519 A.2d 263, 266 (1986). I see no reason, whatsoever, for an appellate court to go out of its way to overrule a case when ample grounds exist upon which to decide the case without doing violence to the doctrine of Stare Decisis. There may be a case in the future where National Grange must be revisited. When, and if, that time comes I will approach the case with Stare Decisis firmly in mind. of course, if the Legislature addresses the problem which confronts us today, there will be no need to revisit National Grange. This case, however, does not call for such an examination at this time; Hence, to that extent I can not join my colleagues justices Horton and Batchelder in their call to overrule National Grange.

DISSENT

Thayer, J., dissenting: I would reverse the trial court�s award of prejudgment interest to the insureds. Although I agree with the plurality that the parties to an arbitration may consent to include interest as calculated by RSA 524:1-B (1974) in an arbitration award, see Major v. Acorn Investment Co., 134 N.H. 86, 90, 588 A.2d 811, 813 (1991), I DISAGREE THAT Metropolitan can be bound to the terms of a private agreement to pay prejudgment interest to which it was not a party and which was entered without its knowledge.

The plurality concedes that while the Ralphs could be bound by collateral estoppel to the damages awarded by the arbitration panel, Metropolitan could not be so bound because it was neither a party to nor otherwise in privity with the Ralphs for the purposes of the arbitration proceedings. The plurality then does an abrupt aboutface, finding that Metropolitan, by properly seeking to estop the Ralphs from relitigating the $90,000 damages award, was bound to the parties� privare agreement on the addition of prejudgment interest. Effectively the plurality requires under the facts of this case one of two untenable results: (1) That the Ralphs be given a second opportunity to litigate their damages claim, this time against their own insurer; or (2) that Metropolitan be given no opportunity to challenge whether prejudgment interest should be included in the award against clark. Not surprisingly, the opinion cites no authority to support this result.

I additionally disagree with my colleagues who would overturn National Grange Mutual Insurance Co. v. Smith , 133 N.H. 279, 574 A.2d 1386(1990). As we recognized in Brannigan v. Usitalo, 134 N.H. 50, 53, 587 A.2d 1232, 1233 (1991), Stare Decisis "Is essential if case-by-case judicial decision making is to be reconciled with the principle of the rule of law, for when governing legal standards are open to revision in every case, deciding cases becomes a mere exercise of judicial will, with arbitrary and unpredictable results." (quotation omitted.) see also Providence Mut. Fire Ins. Co. v. Scanlon, 138 N.H. 301, 303-04, 638 A.2d 1246, 1248 (1994). This rule seems particularly applicable in the realm of contracts, where parties rely on previous interpretations of statutes and contractual provisions in conducting their ongoing business. see, E.G., Payne v. Tennessee, 111 S. CT. 2597, 2609-10 (1991). Because I feel that the National Grange decision provides a workable and reasonable interpretation of the statute, I would not now overturn it, but would instead laave to the legislature the responsibility to amend the statute if our National Grange Interpretation did not meet with their intent in enacting it. As my colleagues concede, were the court to follow National Grange, the Ralphs would not be entitled to recover the prejudgment interest, and I would so rule.

BROCK, C.J., joins in the dissent.

NAUTILUS OF EXETER, INC. & a.
vs.
TOWN OF EXETER AND EXETER HOSPITAL

No. 94-159

SUPREME COURT OF NEW HAMPSHIRE

139 N.H. 450, 656 A.2d 407, 1995 N.H. LEXIS 28

March 23, 1995, Decided

COUNSEL

Brown and LaPointe, P.A., of Exeter (Page Brown on the brief and orally), for the plaintiffs.

Holland, Donovan, Beckett & Hermans, of Exeter (Stephen G. Hermans on the brief and orally), for defendant Exeter Hospital.

Engel, Gearreald & Gardner, P.A., of Exeter (Mark S. Gearreald on the brief and orally), for defendant Town of Exeter.

AUTHOR: HORTON

OPINION

Pursuant to RSA 677:4 (1986), the plaintiffs, Nautilus of Exeter, Inc., Amy Kaufman, Dale Boenisch, Gerard Poulin, and Shiro, Inc., dba Great Bay Athletic Club, appealed to the superior court the decision of the Exeter Zoning Board of Adjustment (ZBA) denying them standing under RSA 676:5 (Supp. 1994). The plaintiffs now appeal the order of the Superior Court (McHugh, J.) granting summary judgment in favor of the defendants, the Town of Exeter (town) and Exeter Hospital. We affirm.

In July 1993, the Exeter Planning Board conditionally approved Exeter Hospital�s site plan for the construction of an addition that would house, among other facilities, an exercise and rehabilitation center open to both patients and the public. Plaintiffs Nautilus of Exeter, Inc. and Shiro, Inc. operate health clubs located 1.7 and six miles from the hospital, respectively. The remaining plaintiffs, shareholders of the corporations owning the health clubs, own property in Exeter located between .8 and 2.5 miles from the hospital.

The plaintiffs requested certiorari from the superior court seeking review of the planning board�s approval of the site plan. See RSA 677:15 (1986 & Supp. 1994). They named both the town and the hospital as defendants, claiming standing to appeal on the basis that they owned property within the town and because the fitness center would compete against their businesses. The superior court denied certiorari, ruling that the plaintiffs were not "persons aggrieved" entitled to court review under RSA 677:15.

In a separate action, the plaintiffs also appealed the site plan approval to the ZBA. See RSA 676:5. The ZBA ruled that the plaintiffs were not "persons aggrieved" entitled to appeal under RSA 676:5. Their motion for rehearing was denied by the ZBA, and the plaintiffs appealed to the superior court under RSA 677:4 (1986), arguing that their status as citizens of the town, property owners, taxpayers, and owners of a business within the commercial district gave them standing to raise issues concerning the proper application and use of zoning districts. The plaintiffs also argued that the site plan approval violated the town�s zoning ordinance by placing a commercial fitness center in a hospital zone.

The trial court found that since standing to appeal planning board decisions either to the superior court under RSA 677:15, or to the ZBA under RSA 676:5 and from there to the superior court pursuant to RSA 677:4, is limited to "persons aggrieved," that term must have the same definition in both cases. Noting its prior decision that the plaintiffs were not "persons aggrieved" entitled to certiorari review of the planning board�s decision, the trial court concluded "that the plaintiffs do not fit the category of �persons aggrieved� for purposes of either their planning board appeal or their zoning board appeal." The trial court granted the defendants� motions for summary judgment on that basis. The plaintiffs appeal.

Only "persons aggrieved" have standing to appeal planning and zoning board decisions to the superior court. See RSA 677:4, :15. "Whether a party has a sufficient interest in the outcome of a planning board or zoning board proceeding to have standing is a factual determination" for the trial court. Weeks Restaurant Corp. v. City of Dover, 119 N.H. 541, 544-45, 404 A.2d 294, 296 (1979). In making this determination, the trial court may consider "factors such as the proximity of the plaintiff�s property to the site for which approval is sought, the type of change proposed, the immediacy of the injury claimed, and the plaintiff�s participation in the administrative hearings." Id. at 545, 404 A.2d at 296. Standing exists when these factors lead the trier of fact to conclude that the plaintiff has a sufficient interest in the outcome of the proposed zoning decision, but standing will not be extended to "all persons in the community who might . . . feel that they are hurt by the board�s decision on a site plan approval pertaining to land quite remote from their own." Id. at 544, 404 A.2d at 296 (quotation omitted).

The trial court granted the defendants� motions for summary judgment based upon its determination that the plaintiffs failed to sustain "their burden of showing that as a matter of law they are �persons aggrieved� under the statutes." "The trial court must grant summary judgment when it finds no genuine issue of material fact, after considering the affidavits and other evidence presented in a light most favorable to the non-moving party, . . . and when the moving party is entitled to judgment as a matter of law." Phillips v. Verax Corp., 138 N.H. 240, 243, 637 A.2d 906, 909 (1994) (quotation omitted).

A review of the record supports the trial court�s conclusion that the plaintiffs� properties are too remote from the proposed hospital addition to be sufficiently affected by the ZBA�s decision so as to confer standing. We agree with the trial court that the only adverse impact that may be felt by the plaintiffs as a result of the ZBA�s decision is that of increased competition with their businesses. This type of harm alone is insufficient to entitle the plaintiffs to standing to appeal the ZBA�s decision: "Injury resulting from competition is rarely classified as a legal harm but rather is deemed a natural risk in our free enterprise economy." Weeks,119 N.H. at 545, 404 A.2d at 296 (quotation omitted). Accordingly, we hold that the defendants� motions for summary judgment were properly granted. See Phillips, 138 N.H. at 243, 637 A.2d at 909.

Affirmed.

All concurred.

TOWN OF NOTTINGHAM

ROBERT A. BONSER AND

CEDAR WATERS VILLAGE, INC.

146 N.H. ___

May 21, 2001

Borofsky, Lewis & Amodeo-Vickery, P.A., of Newington (Mark S. Gearreald on the brief and orally), for the plaintiff.

William Dewhurst, of Nottingham, by brief and orally, for the intervenor,

Cedar Waters Village Partnership (1994).

Terry L. Bonser and Mary L. Bonser, by brief and Ms. Bonser orally, as intervenors, pro se.

AUTHOR: BRODERICK

The intervenors, Cedar Waters Village Partnership (1994), Terry L. Bonser and Mary L. Bonser, appeal a Superior Court (McHugh, J.) ruling that certain land owned by the partnership is subject to levy for the fines assessed against the defendants, Robert A. Bonser and Cedar Waters Village, Inc., in favor of the plaintiff, Town of Nottingham. We affirm.

The history leading up to the present dispute is lengthy, and many of the details can be found in Bonser v. Courtney, 124 N.H. 796 (1984), Town of Nottingham v. Bonser, 131 N.H. 120 (1988), and Knox Leasing v. Turner, 132 N.H. 68 (1989). We recite only those facts necessary for an understanding of the present appeal.

In 1981, the Town of Nottingham (town) brought suit against the defendants, Cedar Waters Village, Inc. (corporation) and Robert A. Bonser, its principal, to compel compliance with a zoning ordinance governing the placement of certain mobile homes on the corporation�s property. After a hearing, the court issued a ruling in the town�s favor ordering the defendants to comply with the relevant zoning regulations and ordinances by September 1, 1982. The court also authorized the town to remove the homes from the property for noncompliance. After prolonged litigation, in May 1986, the court found the defendants in civil contempt for their failure to remove the mobile homes and assessed a fine against them of $1,000 for each day the homes remained in place.

Over the ensuing months, the fine accrued, and in March 1987, the town sought to attach the corporation�s real estate to ensure collection. The defendants objected, and a hearing was set for May 1987. Approximately one week before the scheduled hearing, Robert Bonser dissolved the corporation and, with his wife, Mary T. Bonser, took title to all of the corporation�s realty, including the land upon which the offending mobile homes were located. The next day, the Bonsers transferred the property to a newly formed entity, Cedar Waters Village Partnership (partnership), consisting of Robert, his wife and their son, Terry L. Bonser. In June 1987, the court granted the town�s motion and ordered attachments against both the corporation and Robert Bonser. By that time, however, the partnership had taken title to all of the corporation�s real estate.

When the town learned of the conveyances, it filed a motion to set them aside on the basis of fraud.It alleged that the corporation had not received fair consideration for the property and that no provision had been made to satisfy its outstanding fine.Copies of the town�s motion were forwarded to corporation counsel, Robert Bonser, Mary T. Bonser and their son, Terry. The partners, who identified themselves as intervenors, and the corporation each objected to the town�s motionand asserted that the conveyances were not fraudulent and, in fact, had been made for good and lawful consideration and for valid business reasons.

By January 1988, the partnership, which had moved to intervene in the fraudulent conveyance proceeding, was permitted to do so.In August 1989, the trial court also permitted the partnership to intervene in the underlying zoning litigation.

In July 1990, after a hearing, the court determined that the total fine then due to the town by the corporation and Robert Bonser was $1,453,000. It ordered an attachment not only against the defendants, but also against the partnership, which held title to the mobile home property. The court based the attachment against the partnership on the fact that its property was the subject of the pending fraudulent conveyance motion. In the same order, ruling that there was substantial identity between the partnership and the corporation, the court denied the partnership�s motion to dismiss itself from the suit. The defendants and intervenor partnership appealed this order, and we remanded the case to the trial court solely to review the amount of the fine.

In 1993, following the remand, the trial court conducted a new hearing and ordered the corporation and Robert Bonser to pay the town $183,850, plus $122,364.98 in attorney�s fees. On appeal, we summarily affirmed the trial court�s order. Following further litigation throughout 1994 and 1995, the trial court issued writs of execution against the corporation, Robert Bonser and the partnership in January 1996. At this point, the partnership consisted of Terry L. Bonser and his wife, Mary L. Bonser (apparently the same person as "Mary L. Parks Bonser") as individual partners. Documents filed with the secretary of state show that Mary L. Bonser replaced Mary T. Bonser in 1991 and that Robert A. Bonser died in 1994.

In March 1997, the partnership and the individual partners, Terry L. Bonser and Mary L. Parks Bonser, filed suit in federal court. They alleged that the writ of execution issued against the partnership violated due process because there was no superior court order subjecting the partnership and its partners to liability for civil contempt and no judgment in favor of the town on its motion to set aside the 1987 conveyances for fraud. During the same month, the partnership and the partners, Terry L. and Mary L. Bonser, sought a hearing in the trial court to have the court identify the judgment or order that supported the 1996 execution against the partnership�s real estate.

In July 1997, the federal court ruled that it would abstain from the case for the time being because it was "satisfied . . . that [the trial court would] fully and fairly consider and rule upon [the federal] plaintiffs� apparent claims" that no existing court order supported the writ of execution against the partnership. It identified specific concerns to be addressed by the trial court, including whether any judgment existed declaring the 1987 transfers voidable for fraud, and thus subject to levy to discharge the court-ordered fine and attorney�s fees.

In November 1997, the trial court issued an order in response to the federal court�s ruling and the motion for hearing filed by the partnership and the individual partners. It acknowledged that it found the partnership or the partners liable for the contemptuous actions of the corporation and Robert Bonser, and that it had never held the partnership or the partners in contempt. The trial court conceded that it had never directly ruled on the town�s fraudulent conveyance motion. The court explained, however, that a hearing on the merits never occurred because, in response to the town�s motion to set aside the conveyances, "the Bonsers" pledged Robert Bonser�s personal assets and the partnership�s real estate upon which the mobile homes sat to satisfy any future judgment secured by the town. In its November order, the court stated that it would review the merits of the fraudulent conveyance matter because "the Bonsers" were now arguing that the town could not reach the real estate to satisfy the contempt judgment. After detailing the relevant history, which included the fact that the corporation�s property was conveyed without consideration, the court made a prima facie finding that the 1987 conveyances were fraudulent. It allowed "the Bonsers" sixty days to present contrary evidence.

In their response, the partnership and the partners, Terry L. Bonser and Mary L. Parks Bonser, essentially claimed that the trial court�s order exceeded the intended scope of the July 1997 federal court ruling because it provided new findings rather than simply responding to inquiries about the existence of an order to justify the 1996 execution against the partnership. They did not, however, offer any evidence to counter the court�s prima facie finding of fraud. The trial court issued a final order concluding that the undisputed facts clearly established that the 1987 conveyances were fraudulent. It set aside the 1987 transfers, making the real estate available to satisfy the judgments against the corporation and Robert Bonser, and re-issued the attachment against the partnership.

The intervenors, consisting of the partnership and Terry L. and Mary L. Bonser, then appealed to this court and filed a motion in federal court to bring their earlier action forward. In June 1998, the federal court elected to abstain until the State appeal was concluded. In its order, the federal court observed that the trial court "clearly agreed that no findings, rulings, or judgments were ever issued or entered against the . . . partnership, Mary [L.] Parks Bonser, or Terry Bonser that would require them, personally, to pay money to the court or to the town, or to pay the obligations of the prior owners." It noted that the trial court proceeded sua sponte in ruling that the 1987 property transfers were fraudulent, and that "without [a] hearing or trial involving the [partnership, Terry L. Bonser or Mary L. Parks Bonser,]" the trial court declared the property to be subject to levy for the fine issued against the corporation and Robert Bonser. The federal court left us to decide whether the trial court�s decision, and "the unique process that produced it, comport[ed] with New Hampshire law, and state and federal constitutional guarantees . . . ."

The principal issue in this case is whether the intervenors� due process rights under the New Hampshire and United States Constitutions were violated when in 1997 the court ruled on the fraudulent conveyance matter and reissued the attachment against the partnership. The intervenors argue they were not given sufficient notice and an opportunity to be heard before the trial court set aside the conveyances.

We consider first the defendant's arguments under Part I, Article 15 of the New Hampshire Constitution, see State v. Ball, 124 N.H. 226, 231 (1983), employing federal cases only to aid in our analysis. Because the New Hampshire Constitution is at least as protective as the Federal Constitution in this area, we need not make a separate federal analysis. See State v. Newcomb, 140 N.H. 72, 78 (1995). The Due Process Clause of the State Constitution requires that, prior to any proceeding involving the deprivation of significant property rights, "the State must provide notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." White v. Lee, 124 N.H. 69, 75-76 (1983) (quotation omitted). After reviewing the record, we conclude that the intervenors suffered no constitutional deprivation.

The record reflects that after the town filed its motion to set aside the questioned conveyances in 1987, the partnership, with Robert, Terry and Mary T. Bonser as its partners, subsequently intervened and filed a detailed objection. For various reasons, the trial court did not directly address the town�s motion until 1997, after the intervenors had pursued an action in federal court. Although the zoning matter apparently concluded in 1996 with the issuance of writs of execution, the trial court docket was revived by the intervenors� 1997 motion for a hearing.

In its November 1997 order, the trial court noted that it had previously indirectly addressed the fraudulent conveyance claims but had not formally ruled on the town�s motion. Accordingly, it addressed the merits of the fraud claim. As part of its order that the evidence established a prima facie case of fraud, the trial court gave "the Bonsers" sixty days to establish that the 1997 conveyance to the partnership was lawful. In context, the court�s reference to "the Bonsers" collectively referred to the partnership, Terry L. Bonser and Mary L. Bonser, because the partnership had filed the hearing motion, which led to the court�s ruling. Additionally, the November 1997 order was mailed only to partnership counsel, Terry Bonser, Mary L. Parks Bonser and town counsel.

The intervenors claim that such notice was insufficient since they were not parties to the litigation, and no notice was sent to the corporation or to Robert Bonser. We conclude that notice to the intervenors was sufficient because, by definition intervenors have a direct and apparent interest in the subject matter of the litigation, Clipper Affiliates v. Checovich, 138 N.H. 271, 277 (1994), and by virtue of their status, they were parties to the case. See, e.g., Labrecque v. Town of Salem, 128 N.H. 455, 457 (1986) (court referring to intervenor as "party defendant"). Therefore, the court properly provided notice to the intervenors of its intent to rule on the fraud matter. We do not address the sufficiency of the notice to Robert Bonser and the corporation because the intervenors have no standing to assert any due process violations on their behalf. See Petition of Burling, 139 N.H. 266, 272 (1994) (person generally has standing to raise constitutional violation when individual�s own personal rights have been or will be directly and specifically affected).

Contrary to the intervenors� claim, the trial court did not violate their due process rights by failing to conduct a hearing on the town�s fraudulent conveyance motion. An actual hearing is not required to satisfy due process. Rather, a party must be given an adequate opportunity to present objections and make its case. See White, 124 N.H. at 75-76. Here, the court provided the intervenors sixty days to present evidence to counter its prima facie finding of fraud. The court instructed the parties that no hearing would be scheduled unless the intervenors offered contrary evidence establishing such a need. Because the intervenors offered no contrary evidence and did not request a hearing, the trial court decided the matter on the pleadings and rendered a decision adverse to them. Under these facts, the intervenors were afforded an adequate opportunity to oppose the town�s allegations and the court�s prima facie finding but chose not to avail themselves of it.

We recognize, as did the federal court, that the procedural roadmap in this case is unique. Certainly, it is not typical for a substantive order supporting a writ of execution to be issued after the execution is issued. The trial court, however, outlined the various circumstances that delayed a formal ruling, including representations made to it in 1987 that the partnership property would be available to satisfy the outstanding contempt judgments. In the corporation�s objection to the town�s fraudulent conveyance motion, the corporation represented that "the partners are willing to assume full liability and responsibility for the obligations of the corporation," and that the partners took the property "subject to the attachment that was ultimately granted . . . ." While not authored by the partnership itself, these representations were fairly attributable to it because the corporation certified that it provided the individual partners with an official copy of its objection and neither the partnership nor its partners made any effort to correct any perceived misstatement. Apparently, the partnership did not truly contest the fraudulent conveyance claim, and decided to concentrate its efforts on appealing the merits of the zoning matter and the related contempt judgments. Accordingly, given the peculiar circumstances of this case, we cannot say that the unique procedural path followed by the trial court violated due process when, as noted, the intervenors received ample notice and had an opportunity to be heard before the court formally ruled on the town�s motion to set aside the real estate in 1997.

III

The intervenors argue that the trial court erred in reviving the town�s fraudulent conveyance motion which had been pending for more than three years without any action on the docket and that it should have been dismissed under Superior Court Rule 168.

Rule 168 provides, in pertinent part, that "[a]ll non-jury cases, civil and equity, . . . which shall have been pending . . . three years, without any action . . . other than being placed on the trial list, shall be marked �non-suit� or �dismissed� as the case may be, and notice thereof sent to the attorneys."

The trial court noted that Rule 168 exists "to enable the Court to dismiss cases in which neither party has sought a hearing for an extended period of time." It stated, "The Court has found from past experience that inaction on the part of the parties in these cases generally means they have settled their dispute but have failed to so inform the Court." It ruled that the fraud case constituted "an exception" to Rule 168 because the inactivity was the result of the parties� election to concentrate on the merits of the underlying case, and because the parties treated the fraud claim and underlying case as one despite their separate docket numbers.

We agree with the trial court that the fraud action did not lapse under Rule 168. By its terms, the rule is a termination mechanism for truly dormant cases. Although the fraud case and the underlying zoning matter with its related contempt issues were assigned separate docket numbers, the cases more closely resembled bifurcated issues of a single matter. In fact, the record reflects that the court and the parties treated the fraud and zoning actions as a single case and simply addressed the related issues in a sequential manner. For example, in the same 1993 order in which the court granted the attachment against the partnership in the zoning case, it awarded the town reimbursement for "all expenses related to the bringing of the fraudulent conveyance case." As a single case for purposes of Rule 168, the dispute between the parties, which included issues of zoning compliance, contempt and fraudulent conveyances, never lay dormant for a single year from 1981 through the present. Therefore, we hold that under the unique facts of this case, Rule 168 did not preclude the court from addressing the fraud matter.

The intervenors next argue that the partnership�s title to the real estate formerly owned by the corporation cannot be defeated by the trial court�s fraudulent conveyance ruling because the partnership was a "subsequent transferee" under RSA 545-A:8 (1997). They assert that several transfers occurred after the 1987 conveyances and before they obtained title to the property. As a result, they conclude that they are "subsequent transferees" and cannot be disgorged of the property.

The intervenors rely on changes to the composition of the partnership as evidence that the real estate changed ownership. Namely, in 1991, Terry�s wife, Mary L. Bonser, replaced Robert�s wife, Mary T. Bonser, as a partner. In 1994, Robert Bonser died,leaving Terry and Mary L. Bonser as the remaining partners. The intervenors assert that such changes resulted in a new partnership entity and a property transfer to the reformed partnership.

The intervenors� "subsequent transferee" argument fails regardless of which version of the fraudulent conveyance statute is applied. Under the version in effect at the time of the 1987 conveyance, see RSA 545:9, I (1974), a creditor with a matured claim could not set aside a conveyance to "a purchaser for fair consideration without knowledge of the fraud at the time of the purchase, or one who . . . derived title immediately or mediately from such a purchaser." Similarly, the present version of the statute provides: "A transfer or obligation is not voidable under RSA 545-A:4, I(a) against a person who took in good faith and for a reasonably equivalent value or against any subsequent transferee or obligee." RSA 545-A:8, I (1997). According to the plain language of both versions of the statute, see Snedeker v. Snedeker, __ N.H. __, __, 749 A.2d 315, 316 (2000), to enjoy the protected status of "subsequent transferee," one must obtain the property from an owner who has paid fair consideration without knowledge of any fraud. The intervenors present no evidence that any of the partnerships, assuming their divisibility, or Robert and his wife ever gave fair consideration for the property. Moreover, Terry Bonser remained a partner from the time of the 1987 conveyances, and thus any subsequent partnership could not have taken the property without knowledge of the prior fraud. See RSA 304-A:12 (1995) (knowledge of partner attributable to partnership). Because there is no evidence establishing that anyone in the chain of transfers provided fair value for the property without knowledge of fraud, no one in the chain could have obtained the property as a "subsequent transferee."

The intervenors further argue that the trial court erred in placing the burden of proof on them to defend against the town�s claim of fraudulent conveyance. Relying on RSA 511-A:6 (1997), they assert that the defendant transferor, the corporation, and not the partnership, was required to prove that the conveyance was not made to hinder or impede the collection of a judgment.

RSA 511-A:6 provides in pertinent part that: "In any proceeding brought by the plaintiff under RSA 545:10, the burden shall be upon the defendant to show that any conveyance made or obligation incurred by him during this period was not made to hinder or impede collection of any judgment."

In its November 1997 order, the trial court identified the "triple burden of proof" that the intervenors needed to meet in order to counter its prima facie finding of fraud. It stated that:

[The intervenors] must first submit evidence that the transfer itself is not fraudulent; in other words, that there was a good-faith purpose for the conveyance of the real estate from the corporation to the partnership and that it was made for reasonable consideration. Secondly, they must present evidence as to why the timing of the transfer, given the pending Petition to Attach, was not in violation of RSA 511-A:6. Finally, they must show that notwithstanding the transfer, the original defendants had sufficient assets to satisfy the eventual contempt findings of the Court.

We need not decide whether the trial court erroneously placed the burden outlined under RSA 511-A:6 on the intervenors. The trial court articulated a three-part burden of proof for the intervenors to meet in order to counter its prima facie finding of fraud. The intervenors challenged only one component, and made no attempt to present evidence as to the remaining components. Therefore, even if the court incorrectly expected the intervenors to meet the burden identified in RSA 511-A:6, their failure to attempt a showing under the remaining two components of the burden constituted an independent ground to uphold the court�s final fraudulent conveyance ruling. Accordingly, we do not address the intervenors� specific claim of error. Cf. State v. Monroe, 142 N.H. 857, 873 (1998), cert. denied, 525 U.S. 1073 (1999).

The intervenors next contend that the fraudulent conveyance claim is barred by the statute of limitations, see RSA 545-A:9, because the property was transferred several times after 1987, the original fraud action lapsed under Superior Court Rule 168, and any new challenge would be time barred. The town, however, filed its motion to set aside the 1987 conveyances approximately one month after they occurred, see RSA 545-A:9 (1997), and as we concluded earlier, the fraud action did not lapse under Rule 168. Further, the intervenors cite no authority for the proposition that a new action must be filed each time the property is subsequently transferred. Accordingly, we reject the argument that the fraudulent conveyance claim was time barred.

VII

The intervenors also argue that the town lost the right to collect fines and penalties, and the court no longer retained jurisdiction, because no named defendants remain in the matter. They assert that once Robert Bonser died in 1994, the town failed to add his estate as a party defendant and file as a creditor in probate court. As a result, they contend that the town is now time barred from pursuing an attachment against the real estate pursuant to RSA 556:29 (1997).

The court orders on appeal address a single issue: whether the 1987 transfers of the corporate property to Mary T. and Robert Bonser, and ultimately to the partnership, were fraudulent and voidable. The collectibility of the contempt fines against the corporation and Robert Bonser, judgments which have long since been final, does not fall within the appellate scope of the orders before us. To the extent the intervenors argue that the corporation and Robert Bonser were necessary parties to the fraud action, and thus their non-existence undermines the validity of the fraud orders on appeal, we reject it. We have previously decided that transferors are not necessary parties to a fraudulent conveyance action. See Tsiatsios v. Tsiatsios, 144 N.H. 438, 444 (1999). It is sufficient to assert a claim solely against the recipient to secure the fraudulently conveyed property. See id. Accordingly, the intervenors� claim of error fails.

VIII

The intervenors next argue that the trial court abused its discretion by sua sponte reviving the lapsed fraudulent conveyance action. They assert that the superior court "appears to have been acting as advocate for the town . . . to protect their sizeable monetary interests," and that its action was "arbitrary, unreasonable, unconscionable, and deeply offends the spirit of comity that must exist between the various courts."

The trial court did not act sua sponte to revive the fraud matter. It responded to the intervenors� motion for a hearing and the federal court�s abstention order which suggested that the trial court rule on various issues, including the apparent lack of a formal ruling and the order on the fraudulent conveyance motion. We cannot say that it was unreasonable for the trial court to interpret the federal abstention order as inviting it "to explain how the real estate . . . titled to [the partnership] could be used to satisfy the outstanding judgments in the absence of a formal finding of contempt as against Terry L. Bonser, Mary L. Bonser and the partnership." At the federal court�s invitation, the trial court issued a formal ruling on the fraud matter affording the partnership its due process rights to notice and an opportunity to present its case. We need not address the intervenors� concerns about the court�s alleged partiality, arbitrariness and capriciousness because we have already rejected their specific challenges to the due process afforded them and the substantive rulings of the court.

Finally, we do not specifically address various discrete arguments made by the intervenors because we addressed them in the context of our analysis of other arguments. The intervenors� remaining contentions are not addressed because they either were not preserved below, Quirk v. Town of New Boston, 140 N.H. 124, 128 (1995), or lack merit and warrant no further review, Vogel v. Vogel, 137 N.H. 321, 322 (1993). All issues raised in the notice of appeal but not briefed are deemed waived. See State v. Mountjoy, 142 N.H. 648, 652 (1998).

For the reasons stated above, we affirm the trial court�s fraudulent conveyance ruling and its order authorizing the attachment of partnership property.

Affirmed.

JOHNSON, J., sat for oral argument but retired prior to the final vote; THAYER, J., sat for oral argument but resigned prior to the final vote; BROCK, C.J., concurred; HORTON, J., retired, specially assigned under RSA 490:3, concurred.

PETITION OF FLOYD W. HOYT, N.D.

PETITION OF CAROLE E. ROBINSON, N.D.

143 N.H. 533

April 21, 1999

Borofsky, Lewis & Amodeo-Vickery, P.A., of Portsmouth (John M. Lewis on the brief and orally), for the petitioners.

Philip T. McLaughlin, attorney general (Douglas N. Jones assistant attorney general, on the brief and orally), for the State, as amicus curiae.

AUTHOR: JOHNSON.