Thomas N.T. Mullen & a. v. Public Service Company of New Hampshire & a.

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2014-0797, Thomas N.T. Mullen & a. v. Public
Service Company of New Hampshire & a., the court on July 16,
2015, issued the following order:

Having considered the briefs and record submitted on appeal, we conclude
that oral argument is unnecessary in this case. See Sup. Ct. R. 18(1). We affirm.

The plaintiffs, Thomas Mullen, Walter Lankau, Jr., and Owl Street
Associates, LLC, d/b/a Owl’s Nest Resort & Golf Club (Owl’s Nest), appeal an
order of the Superior Court (MacLeod, J.) dismissing their amended complaint
against the defendants, Public Service Company of New Hampshire (PSNH),
Northern Pass Transmission, LLC, and Northeast Utilities for failure to state a
claim. The plaintiffs contend that the trial court erred by: (1) finding that they
had not adequately pleaded their claims for unreasonable interference and
encroachment on easements, fraudulent misrepresentation, and slander of title;
(2) making “impermissible findings on material issues of fact that the trial court
refused to allow plaintiffs to discover”; and (3) “refus[ing] to enforce Superior
Court discovery rules.”

At the outset, we note that the plaintiffs concede that they “lost Owl’s Nest
to foreclosure [after the trial court dismissed their claims]; therefore the demands
for injunctive relief and quiet title are moot.” We further note that, with respect
to their claim for “unreasonable interference and encroachment on easements,”
the plaintiffs argue that “[t]he uncertainty of the Northern Pass plans and the
potential impact on Owl’s Nest is what ruined [their] business”; they have not
asserted that the defendants in fact used the easements unreasonably at any
time when the plaintiffs owned the burdened property. Because the plaintiffs do
not claim that the defendants have used the easements unreasonably, but only
that they will at some point, and because the plaintiffs concede that their claims
for quiet title and injunctive relief are moot, we need not address whether the
trial court erred by dismissing their claim for unreasonable interference and
encroachment on easements. Cf. Jolicoeur v. Conrad, 106 N.H. 496, 498 (1965)
(“It is well settled in this jurisdiction . . . that there can be no recovery for future
damages unless there is evidence from which it can be found to be more probable
than not that they will occur.”).

Furthermore, to the extent that the plaintiffs argue that the defendants
breached the easement by planning to install transmission-only lines, we note
that they have not appealed the trial court’s dismissal of that claim. Accordingly,
we decline to address it. See State v. Blackmer, 149 N.H. 47, 49 (2003) (stating
issues not raised in notice of appeal are not preserved for review).

In reviewing the trial court’s grant of a motion to dismiss, we consider
whether the allegations in the plaintiffs’ pleadings are reasonably susceptible of a
construction that would permit recovery. England v. Brianas, 166 N.H. 369, 371
(2014). We assume that the plaintiffs’ factual allegations are true and construe
all reasonable inferences in the light most favorable to the plaintiffs. Id. We need
not, however, assume the truth of statements that are merely conclusions of law.
Id. We then engage in a threshold inquiry, testing the facts alleged in the
pleadings against the applicable law. Id. We will uphold the trial court’s grant of
a motion to dismiss if the facts pleaded do not constitute a basis for legal relief.
Id.

The first count in the plaintiffs’ amended complaint alleged fraudulent
misrepresentation by PSNH. The tort of intentional misrepresentation, or fraud,
must be proved by showing that the representation was made with knowledge of
its falsity or with conscious indifference to its truth and with the intention of
causing another person to rely upon the representation. Tessier v. Rockefeller, 162 N.H. 324, 332 (2011). In order to withstand a motion to dismiss, a plaintiff
cannot allege fraud in general terms, but must specifically allege the essential
details of the fraud and the facts of the defendant’s fraudulent conduct. Id.

In this case, the plaintiffs alleged that during negotiations to replace two
existing easements over the Owl’s Nest property with a new easement, which led
to a January 2007 easement deed (new easement), PSNH “assured [them] that
the only plans for the right of way were to maintain the existing poles and that if
new lines were ever installed, they would be mounted on H-shaped wooden poles
like the ones that occupied the right of way for many years.” However, the
plaintiffs did not allege facts that, when construed most favorably to them, would
support an inference that PSNH knew this statement was false or was
consciously indifferent to its truth at the time PSNH made it.

Instead, they alleged various events relating to high voltage direct current
transmission (HVDC) that occurred before and after the execution of the new
easement and involved entities other than PSNH. These events included a 2008
power purchase agreement between a Northeast Utilities subsidiary and HQ
Energy Services (US) and a 2008 Northeast Utilities petition to the Federal
Energy Regulatory Commission (FERC), both of which the plaintiffs alleged were
“developed over an extended period of time, a period plaintiffs believe pre-dated
the [new] Easement Deed.” (Emphasis added.) We agree with the trial court that
these allegations do not establish that, at the time of the statement, “PSNH
actually knew it would itself be involved in any HVDC transmission project, or
that it actually knew of any specific route that would transverse its easement

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over [the plaintiffs’] property,” so as to satisfy the heightened pleading
requirement for intentional misrepresentation.

The plaintiffs argue that the events alleged, involving entities other than
PSNH and occurring before and after the new easement was executed, show that
“planning [for an HVDC project] had to have been underway for a period pre-
dating the [new] Easement Deed.” (Emphasis added.) They state that their
“claim rested on the belief that the HVDC project, eventually named the Northern
Pass, was planned before the execution of the [new] Easement Deed.” Regardless
of whether the allegations would support an inference that there was planning
“underway” for an HVDC project, we conclude that the allegations lack sufficient
details of the fraud and the facts of the defendants’ fraudulent conduct to satisfy
the specificity requirement for pleading fraud. See Tessier, 162 N.H. at 332.

We disagree with the plaintiffs’ assertion that the trial court made an
improper finding of fact that no plan for an HVDC project existed at the time the
new easement was executed. Rather, the trial court ruled that the plaintiffs
failed to allege that “such specific plan [was] even proposed at the time the
parties entered the Easement Deed.” See Fischer v. Superintendent, Strafford
County House of Corrections, 163 N.H. 515, 519 (2012) (stating interpretation of
court order is question of law, which we review de novo). Even if the trial court
“erroneously characterize[d] [the plaintiffs’] allegation that [sic] an April[ ] 2007[ ]
presentation about the issues and opportunities for the import of HVDC power
from Canada as an ‘admission’ that that date was the ‘earliest’ that Northeast
Utilities was ‘aware’ of import ‘opportunities,’” this does not rectify the plaintiffs’
failure to allege specific facts showing that PSNH knew at the time the alleged
representation was made that it was false. See Tessier, 162 N.H. at 332.

The plaintiffs argue that they “sought to discover why the usage in the
. . . [new] Easement Deed was expanded to grant PSNH [the right] to add
additional lines . . . [and] also sought to discover evidence when the plan to bring
electricity from Canada on the old PSNH easements was conceived.” We note
that the plaintiffs conducted discovery in connection with their original
complaint. They state that their “claim rested on the belief that the HVDC
project, eventually named the Northern Pass, was planned before the execution of
the [new] Easement Deed.” The plaintiffs were required to plead a factual basis
for this claim at the time they filed suit. See Brzica v. Trustees of Dartmouth
College, 147 N.H. 443, 450 (2002) (holding plaintiffs’ broad allegation that at
some time defendant trustees made and concealed decision failed to meet
requirement that petition specify essential details of fraud). There is no support
for allowing the plaintiffs to assert fraud claims without a factual basis and
search for support for those claims later. See id.

We next address whether the trial court properly dismissed the plaintiffs’
claim against all the defendants for slander of title. “In an action for slander of
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title . . . the plaintiff must prove that the defendant acted maliciously in
publishing the words in question.” 50 Am. Jur. 2d Libel and Slander § 544
(2006). Malice, within the meaning of this tort, is an intention to vex, injure, or
annoy. Wilko of Nashua, Inc. v. TAP Realty, Inc., 117 N.H. 843, 848 (1977)
(citing 50 Am. Jur. 2d Libel and Slander § 544 (1970)). “Malice is established by
showing that a party made a false statement, with full knowledge of its falsity, for
the purpose of injuring the complainant.” 50 Am. Jur. 2d Libel and Slander §
531 (2006). “To infer the existence of malice, for the purpose of establishing
slander of title, the evidence must support a reasonable inference that the
representation not only was without legal justification or excuse, but also was not
innocently or ignorantly made.” Id.

The plaintiffs alleged various ways in which the defendants published the
plan to construct an HVDC project over existing PSNH easements, including
those over the Owl’s Nest property. We note that they did not allege that the
defendants published any statements specifically referring to the plaintiffs’ title to
the Owl’s Nest property. Rather, the allegations are that the defendants
published statements about their intended use of their easement rights.

The plaintiffs argue that

Defendants knew that the construction of the Northern Pass with its
high steel transmission structures carrying multiple high voltage
lines mounted on massive concrete foundations posed the threat of
unreasonable use of the easements . . . but, in reckless disregard of
the law and in reckless disregard of the impacts that the Northern
Pass would have on Owl’s Nest, relentlessly promoted the Northern
Pass.

The plaintiffs alleged that the defendants “published the claims of right without
having obtained the required state and federal permits.” However, we note that
at least one of the publications alleged to be slanderous involved a permit
application. The plaintiffs also alleged that the defendants “published the claims
of right without a critical examination of New Hampshire law governing the
easements” and “without obtaining an appraisal of Owl’s Nest.” They alleged that
the defendants acted “with malice, in reckless disregard for the truth or falsity of
the claims of right.” However, we agree with the trial court that “none of the
alleged facts support the finding that the Defendants had full knowledge that
they did not have the right to use the easements for the Northern Pass project or
that they published that information with the purpose of injuring the Plaintiffs.”

The plaintiffs argue that “[t]he trial court found [the] plaintiffs’ factual
allegations [regarding slander of title] in the pleadings insufficient on the very
issues that the court prevented [the] plaintiffs from discovering . . . . The
plaintiffs could not know what knowledge [the] defendants had. The trial court
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would not permit discovery.” However, to withstand a motion to dismiss, a
complaint must include factual allegations that are reasonably susceptible of a
construction that would permit recovery. England, 166 N.H. at 371. There is no
support for allowing plaintiffs to plead claims deficiently and to search for the
missing facts later. See Brzica, 147 N.H. at 450. To the extent that the plaintiffs
argue that “[t]he Amended Complaint raises factual issues that must be
determined by a jury, not by the trial court on the pleadings,” our standard of
review requires that we uphold the trial court’s grant of a motion to dismiss if the
facts pleaded do not constitute a basis for legal relief. See England, 166 N.H. at
371.

Having tested the facts alleged in the amended complaint against the
applicable law, we conclude that the trial court correctly dismissed the amended
complaint for failure to state a claim upon which relief may be granted. See id.
In light of this conclusion, we need not address the plaintiffs’ arguments that its
allegations regarding damages were adequate.

The plaintiffs do not develop their argument that “the trial court refused to
enforce the discovery rules,” beyond arguing that they were entitled to discovery
to supplement their inadequate factual allegations. Accordingly, we decline to
address this argument further. See Blackmer, 149 N.H. at 49.

Affirmed.

Dalianis, C.J., and Hicks and Lynn, JJ., concurred.

Eileen Fox,
Clerk

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