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Property Portfolio Group, LLC v. Town of Derry

Supreme Court of New Hampshire

November 2, 2012

Property Portfolio Group, LLC
v.
Town of Derry

ORDER

The defendant, Town of Derry (Town), appeals an order of the trial court that awarded attorney's fees in the amount of $30, 000 to the plaintiff, Property Portfolio Group (PPG). The Town argues that the trial court's award "is unsustainable under any bad faith/fee award standard" and that its analysis "contains fundamental errors of fact and law." We reverse and remand.

We review a trial court's award of attorney's fees under our unsustainable exercise of discretion standard. Holloway Automotive Group v. Lucic, 163 N.H. 6, 12 (2011). If there is some support in the record for the trial court's determination, we will uphold it. Id. That being said, because the trial court in this case decided the case on offers of proof and based upon the certified record, and could not have observed the credibility and demeanor of witnesses, the "customary deference accorded to a trial court's findings must be slackened." Hillside Assocs. of Hollis v. Maine Bonding & Cas. Co., 135 N.H. 325, 330-31 (1992).

"An award of attorney's fees must be grounded upon statutory authorization, a court rule, an agreement between the parties, or an established exception to the rule that each party is responsible for paying his or her own counsel fees." In the Matter of Hampers & Hampers, 154 N.H. 275, 289 (2006) (quotation omitted). Here, the trial court awarded fees based upon the Town's conduct in this litigation. See Harkeem v. Adams, 117 N.H. 687, 690-91 (1977); Keenan v. Fearon, 130 N.H. 494, 501-02 (1988).

Under this exception, an award of attorney's fees to one party is permissible where the other party has "acted in bad faith, vexatiously, wantonly, or for oppressive reasons, where the litigant's conduct can be characterized as unreasonably obdurate or obstinate, and where it should have been unnecessary for the successful party to have brought the action." Harkeem, 117 N.H. at 691 (quotation and citations omitted). "[B]efore a Harkeem exception may be carved out, it must be supported by a specific finding of bad faith, such as obstinate, unjust, vexatious, wanton or oppressive conduct." Pugliese v. Town of Northwood, 119 N.H. 743, 752 (1979).

With regard to finding "bad faith" on the part of a town, we have held that "when a town is simply defending the actions of a body acting in a quasi-judicial capacity, there are no grounds for awarding attorney's fees, even if the town subjectively believed that the position of the quasi-judicial body was legally incorrect." Taber v. Town of Westmoreland, 140 N.H. 613, 617 (1996). However, "bad faith" fees may be awarded against a town "if the administrative body acts outside the scope of its jurisdiction or is not acting in a quasi-judicial capacity" or "if the town causes unnecessary delay or uses tactics such as excessive discovery to run up its opponent's attorney's fees while defending the [administrative body], that type of bad faith could warrant the award of attorney's fees." Id.

The matter for which the trial court awarded fees concerned PPG's appeal of a decision by the Town's zoning board of adjustment (ZBA) not to assume jurisdiction of PPG's appeal of the Town's code enforcement officer's refusal to enforce a twenty-foot buffer requirement. In October 2008, the superior court decided that, in fact, the ZBA had jurisdiction to hear PPG's appeal of the code enforcement officer's decision. See RSA 674:33, I(a) (2008). The Town appealed the superior court's decision, and we affirmed.

In deciding that PPG was owed attorney's fees because of the Town's conduct during this litigation, the trial court reviewed not only the certified record in this case but also information concerning other litigation between the parties. The Town argues that the trial court erred in this respect, and we agree. The sole issue before the trial court was whether the Town acted in bad faith in this particular case, not whether the Town may have acted in bad faith in other litigation between the parties. Accordingly, we limit our review to the certified record in the instant matter to determine whether it supports the trial court's finding of bad faith on the part of the Town.

In the instant matter, when the ZBA decided that it could not assume jurisdiction of PPG's appeal of the code enforcement officer's decision, it was acting in a quasi-judicial capacity. See Appeal of City of Keene, 141 N.H. 797, 800 (1997) (act is judicial if officials are bound to notify, and hear the parties, and can only decide after weighing and considering such evidence and arguments as the parties choose to lay before them). Accordingly, under Taber, there are no grounds for awarding attorney's fees against the Town merely because it defended the ZBA's decision. Taber, 140 N.H. at 617. Nor does the certified record establish that the Town caused unnecessary delay or used tactics such as excessive discovery to "run up its opponent's attorney's fees" or that the ZBA acted outside of its jurisdiction. Id. Under these circumstances, we conclude that the trial court unsustainably exercised its discretion when it awarded PPG $30, 000 in attorney's fees.

Reversed and remanded.

HICKS, CONBOY and LYNN, JJ., concurred. ...


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