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Pike Industries v. Bigelow

Supreme Court of New Hampshire

December 23, 2013

Pike Industries
v.
Todd Bigelow & a.,

Issued the following order:

Defendant TRB Development Group, Inc. (TRB) appeals the trial court's order following an evidentiary hearing requiring it to pay the plaintiff, Pike Industries, Inc., $50, 152.25. TRB argues that the court erred in ruling that it was required to determine the amount subject to the plaintiff's trustee process attachment as of the date on which it was served with the trustee writ. In the alternative, TRB argues that if the trial court ruled correctly, then the court erred in ruling that the amount was $50, 152.25 because: (a) there was no evidence to support a finding that it owed its subcontractor $50, 152.25 on that date; (b) a trustee defendant may not be charged for funds it receives after service of the trustee writ; and (c) the amount due on the date of service should have been reduced by other priority claims to the subcontractor's money. TRB also argues that the court erred in admitting an October 18, 2011 letter from its attorney and related e-mail correspondence, asserting that the documents evidence an offer of settlement inadmissible pursuant to Rule 408 of the New Hampshire Rules of Evidence. We affirm.

TRB first argues that the trial court erred in ruling that TRB was required to determine the amount subject to the plaintiff's trustee process attachment as of May 13, 2011, the date on which TRB was served with the trustee writ. TRB asserts that, by agreement, the parties "moved the date that TRB was accountable for funds held . . . from the date of service [of the trustee writ] . . . to the date of completion of the construction contract, the following October."

The record shows that TRB was the general contractor on a construction project. Kyco Construction Technology, LLC (Kyco) was the site subcontractor, and the plaintiff supplied labor and materials as a subcontractor to Kyco. During construction, the plaintiff brought suit against Kyco for amounts past due on this project and others. The plaintiff obtained an ex parte attachment against Kyco and a trustee process attachment against TRB to secure amounts due and payable by TRB to Kyco as of the time of service of the trustee writ, see RSA 512:3, :9-d (2010). The trustee writ was served on TRB on May 13, 2011. TRB objected to the trustee process attachment, and the court scheduled a hearing for June 13, 2011. On June 7, 2011, attorneys for the plaintiff, TRB, and Kyco reached an agreement, the terms of which were set forth in an e-mail from the plaintiff's attorney, regarding TRB's obligations as trustee defendant.

The agreement provides, in relevant part, that:

TRB will, after completion of Kyco's subcontract, determine on the basis of documentation furnished by Kyco how much is owed by Kyco to all suppliers and sub-subs who still have lien rights against the . . . project, and will withhold from Kyco an amount to satisfy those potential liens. Any remaining amount due to Kyco after holdback to satisfy those potential lienors shall be the subject of [the plaintiff's] trustee process order, and shall be so disclosed in TRB's Trustee Disclosure.

TRB did not file its trustee disclosure until June 2012. In its disclosure, TRB acknowledged that the trustee writ had been served on May 13, 2011, and stated that the parties had agreed that the date for completion and filing of the disclosure would be stayed until after the completion of Kyco's subcontract and a final accounting. TRB further stated that as of the date of its disclosure, June 14, 2012, it held no money due, or property belonging to, Kyco.

The plaintiff then moved to charge the trustee. See RSA 512:20 (2010). The court held an evidentiary hearing on the motion. At the hearing, TRB's representative admitted that, except for "punch list" items and warranty work, Kyco had completed its subcontract in July 2011, or shortly thereafter, and that the "punch list" items were completed in the Fall of 2011. The plaintiff also introduced an accounting prepared by an employee of TRB which, as TRB's representative admitted, showed a $50, 152.25 balance due Kyco as of October 31, 2011.

The trial court interpreted the parties' agreement to require TRB "to file the trustee disclosure as soon as the amount[ ] owed by Kyco to other subcontractors with lien rights was made known to the parties." The court noted that although the plaintiff argued for an August disclosure date, "an argument can be made based upon the evidence received by the Court that the disclosure could have been delayed until October, 2011." The court found the October 31, 2011 accounting to be the "operative document" upon which it based its determination that the amount due Kyco as of May 13, 2011, was $50, 152.25.

The interpretation of a contract is a question of law for this court to decide. Birch Broad. v. Capitol Broad. Corp., 161 N.H. 192, 196 (2010). When interpreting a written agreement, we give the language used by the parties its reasonable meaning, considering the circumstances and the context in which the agreement was negotiated, and reading the document as a whole. Id. We uphold the trial court's factual findings unless they lack evidentiary support or constitute clear error of law. Axenics, Inc. v. Turner Constr. Co., 164 N.H. 659, 675 (2013). In this case, we agree with TRB that the parties' agreement required TRB to determine the amount due Kyco not as of May 13, 2011, but as of the completion of its subcontract, which the court found to be October 31, 2011. However, since the trial court relied upon the amount due Kyco on the date of the completion of its subcontract, October 31, 2011, in order to determine the amount due on May 13, 2011, we conclude that TRB has failed to demonstrate that it was prejudiced by the court's error. See McIntire v. Lee, 149 N.H. 160, 167 (2003) ("[W]here it appears that an error did not affect the outcome below, or where the court can see from the entire record that no injury has been done, the judgment will not be disturbed." (quotation omitted)).

We note that TRB's representative testified that the $50, 152.25 balance due Kyco on October 31, 2011, did not account for potential lien claims asserted after that date by "material men, subcontractors, and the like." However, TRB introduced no evidence of any specific claimant or claim amount, and we reject TRB's assertion that it was the plaintiff's burden to establish whether the amount due Kyco on October 31, 2011, was subject to lien claims asserted after that date.

TRB next argues that if the trial court ruled correctly that TRB was accountable for amounts it owed Kyco as of the date of service of the trustee writ, May 13, 2011, then the court erred in ruling that it owed Kyco $50, 152.25 because: (a) there was no evidence to support a finding that it owed Kyco $50, 152.25 on that date; (b) under RSA 519:20, a trustee defendant may not be charged for funds it receives after service of the trustee writ; and (c) the amount due Kyco on the date of service should have been reduced by "amounts alleged or determined not to belong to [Kyco] or other priority claims to [Kyco's] money, goods, chattels, rights, or credits." See RSA 512:20. As previously noted, we interpret the parties' agreement, which constituted a modification of their rights and obligations under the trustee process statute, to require TRB to account for the amount due Kyco not on the date of service of the trustee writ, but as of the completion of its subcontract. Given our interpretation of the agreement, we need not address these arguments.

TRB next argues that the trial court erred in admitting an October 18, 2011 letter from its attorney and related e-mail correspondence concerning the status of mechanics liens on that date, asserting that the documents should have been ruled inadmissible pursuant to Rule 408 of the New Hampshire Rules of Evidence. We need not decide whether the trial court erred in admitting these documents because the issue of potential lien rights existing prior to October 31, 2011, has no bearing on our analysis, given the absence of any evidence as to the amount of such claims. Accordingly, any error was harmless. See McIntire v. Lee, 149 N.H. at 167.

Finally, we note that trustee process is a form of attachment by which a plaintiff may secure funds owed to the principal defendant by the trustee defendant. See DeLellis v. Burke, 134 N.H. 607, 610-11 (1991). Therefore, in affirming the trial court's order, which requires TRB to pay the plaintiff $50, 152.25, we assume, as did the trial court, that the plaintiff has established Kyco's unsatisfied ...


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