Joseph W. Turner, Individually and as Trustee
Shared Towers VA, LLC & a
Argued November 12, 2014.
[Copyrighted Material Omitted]
Under New Hampshire procedural rule this decision is subject to motion for rehearing, as well as formal revision before publication in the New Hampshire reports.
Cook, Little, Rosenblatt & Manson, p.l.l.c., of Manchester ( Arnold Rosenblatt and Kathleen M. Mahan on the brief, and Ms. Mahan orally), for the petitioner.
Bernstein, Shur, Sawyer & Nelson, P.A., of Manchester ( Christopher G. Aslin and Gregory E. Michael on the brief, and Mr. Michael orally), for the respondents.
DALIANIS, C.J. HICKS, CONBOY, LYNN, and BASSETT, JJ., concurred.
The respondents, Shared Towers VA, LLC (Shared Towers) and N.H. Note Investment, LLC (NH Note), have appealed, and the petitioner, Joseph W. Turner, individually and as trustee of the Routes 3 and 25 Nominee Trust, has cross-appealed, orders of the Superior Court ( O'Neill, J.) following a bench trial on the petitioner's petition for a preliminary injunction enjoining a foreclosure sale and for damages and reasonable attorney's fees. The parties' dispute centers around a commercial construction loan agreement and promissory note secured by a mortgage, pursuant to which the petitioner was loaned $450,000 at 13% interest per annum to
build a home. The respondents argue that the trial court erred when it: (1) determined that they would be unjustly enriched if the court required the petitioner to pay the amounts he owed under the note from November 2009 until April 2011; (2) applied the petitioner's $450,000 lump sum payment to principal; (3) excluded evidence of the petitioner's experience with similar loans; (4) ruled that, because the [167 N.H. 199] promissory note failed to contain a " clear statement in writing" of the charges owed, as required by RSA 399-B:2 (2006), the respondents could not collect a $22,500 delinquency charge on the petitioner's lump sum payment of principal; and (5) denied the respondents' request for attorney's fees and costs. The petitioner contends that the trial court erroneously concluded that the respondents' actions did not violate the Consumer Protection Act (CPA). See RSA ch. 358-A (2009 & Supp. 2013). We affirm in part, reverse in part, vacate in part, and remand.
The trial court found, or the record establishes, the following facts. The petitioner owns property on Marks Island in Gilford and, in 2009, sought financing to construct a home on one of his lots. Because the home was to be constructed on an island, he was unable to obtain a construction loan with conventional financing. Financial Resources Mortgage, Inc. (FRM) procured a construction loan for the petitioner from Mark Butler, a private lender. On April 9, 2009, the petitioner and Butler executed: (1) a commercial construction loan agreement; (2) a promissory note; (3) a mortgage security agreement and assignment; and (4) a collateral assignment of rents and leases. Under the loan agreement, Butler agreed to loan the petitioner $450,000 as " a bridge loan to facilitate the completion of construction" of the home. The agreement required the petitioner to " pay [Butler] in monthly installments on interest only on the total amount of funds loaned." The loan was secured by the mortgage and the collateral assignment of rents and leases. The promissory note required the petitioner to repay the loan in full, with 13% interest, in one year. The note obligated him to pay Butler " interest only in Twelve (12) consecutive monthly payments of $4,875.00 each." The first payment was due on June 1, 2009. The final payment, consisting of all principal, accrued interest, and charges, was due May 1, 2010. The note provided that if the petitioner defaulted on the payment of interest and principal due under the note, and failed to cure the default within a specified period of time, " the entire unpaid balance of principal and interest shall, at the option of the Holder, become due and payable at once without demand or notice."
The mortgage and note associated with the loan were assigned three times. They were first assigned in May 2009 by Butler to Dodge Financial, Inc., the then-trustee of BD 2009 Realty Trust. In November 2009, Kamal Doshi, another trustee of BD 2009 Realty Trust, assigned the mortgage and note to Shared Towers. Finally, in June 2011, Shared Towers assigned the mortgage and note to N.H. Note.
From April to October 2009, the petitioner made payments consistent with the terms of the loan agreement and note. He stopped making [167 N.H. 200] payments in November 2009. In December 2009, the petitioner received a letter from the trustee appointed in the involuntary bankruptcy of FRM, which stated, in pertinent part:
We understand that you may have borrowed money from FRM ... or an
entity or individual affiliated or related to [FRM]. If you make or are obligated to make monthly payments to any such entity or individual, you are hereby directed to make all such future payments directly to [the bankruptcy trustee].
Please note that any payments made directly [to] any other entity or individual, will NOT count as a credit to your underlying obligations. All such payments must be made to this office in order for you to receive appropriate credit. You will NOT receive credit for any payments even if a new Trustee has purportedly been appointed for any Trust that may hold the mortgage on your property.
A few weeks later, the petitioner received another letter from the trustee enclosing a bankruptcy court order. This letter stated, in pertinent part: " If you have borrowed money from FRM ... or from any trust or entity affiliated or related to FRM ..., the Order requires that you make all monthly payments, all payments of principal, and all principal payoffs to" the bankruptcy trustee. However, having also received demands from Butler and Doshi, the petitioner did not make any payments.
In April 2011, a settlement was reached among Butler, Doshi, Shared Towers, and the bankruptcy trustee (who was also the bankruptcy trustee for Dodge Financial, Inc. and BD 2009 Realty Trust), pursuant to which, Doshi, on behalf of Shared Towers and N.H. Note, ...