David Eldridge & a. v. Ocwen Loan Servicing, LLC & a.

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2016-0328, David Eldridge & a. v. Ocwen Loan
Servicing, LLC & a., the court on October 12, 2017, issued the
following order:

Having considered the briefs and oral arguments of the parties, the court
concludes that a formal written opinion is unnecessary in this case.

The plaintiffs, David Eldridge and Mary Ellen McNeill, appeal orders of
the Superior Court (Colburn, J.) granting summary judgment to defendant
Ocwen Loan Servicing, LLC (Ocwen) and denying their motion to amend their
complaint to add claims against defendants The Rolling Green at Whip-Poor-
Will Condominium Owners’ Association (COA) and The Rolling Green at Whip-
Poor-Will Condominium Townhouse Owners’ Association (TOA) (collectively, the
Associations). The Associations cross-appeal, asserting that the trial court
should have granted them summary judgment on the basis of res judicata and
should have awarded them attorney’s fees. We affirm in part, reverse in part,
and remand for further proceedings.

The following facts are recited in the trial court’s orders or appear on the
record before us. On September 25, 2004, the plaintiffs granted a mortgage to
New Century Mortgage Corporation (New Century) on a townhouse unit (the
Unit) they owned in the Whip-Poor-Will Condominium complex. New Century
later assigned the mortgage to U.S. Bank N.A., for which Ocwen was the loan
servicer. Section 9 of the mortgage provides, in part, that if the borrower fails
to perform the covenants or agreements contained therein or if “there is a legal
proceeding that might significantly affect Lender’s interest in the Property
and/or rights under” the mortgage, “then Lender may do and pay for whatever
is reasonable or appropriate to protect Lender’s interest in the Property and
rights under” the mortgage.

From 2001 through 2009, the plaintiffs failed to pay all mandatory
Association fees, and the Associations successfully sued them for the
outstanding dues (the Assessment Action). Thereafter, the COA’s board of
directors voted to cancel the plaintiffs’ common area privileges, and sought an
injunction to enforce the cancellation of privileges. Meanwhile, a writ of
execution issued in the Assessment Action and, on November 3, 2011, a
sheriff’s sale was conducted, at which the COA purchased the Unit, subject to
the plaintiffs’ one-year right of redemption.
 On January 6, 2012, the Associations informed Ocwen that the COA had
purchased the Unit and had terminated the plaintiffs’ common area privileges.
Ocwen expressed interest in paying off the outstanding assessments and
inquired as to the amount owed. The Associations provided Ocwen with a
quote, consisting of unpaid dues and late fees, plus attorney’s fees the
Associations had incurred to date, that totaled $43,443.08 (the Quoted
Amount).

Simultaneously, however, the Associations were also negotiating with the
plaintiffs to reach what the trial court termed a “global resolution.” On March
21, 2012, the plaintiffs and the Associations executed a stipulated agreement
(Stipulated Agreement) that obligated the plaintiffs to pay outstanding
condominium fees totaling $3,204.52. The trial court approved the Stipulated
Agreement on March 30, 2012.

Two days prior to approval of the Stipulated Agreement, Ocwen sent the
Associations full payment of the Quoted Amount, thereby redeeming the Unit
from the sheriff’s sale. The mortgage provides that “[a]ny amounts disbursed
by Lender” to protect its security interest as set forth in Section 9 “shall
become additional debt of Borrower secured by this Security Instrument” and
“shall bear interest at the Note rate from the date of disbursement and shall be
payable, with such interest, upon notice from Lender to Borrower requesting
payment.” Thus, the trial court presumed, and neither party now disputes,
that “[a]t some point thereafter, Ocwen . . . added $43,443.08 to the plaintiffs’
outstanding mortgage balance.” A quitclaim deed to the plaintiffs, and a
discharge and/or release of various liens, were executed on the Associations’
behalf on April 16, 2012, and were recorded by the plaintiffs on May 7, 2012.

The plaintiffs suspected “that the $43,443.08 figure was grossly inflated,”
and, on May 16, 2012, they requested, through their attorney, “a breakdown of
the $43,443.08 amount.” They “were told that the Associations would address
their request at [the Associations’] July meeting.”

The plaintiffs subsequently filed a motion for contempt on the basis that
the payment of $43,443.08 violated the Stipulated Agreement. On August 29,
2012, the Trial Court (Nicolosi, J.) denied the motion, apparently without
prejudice, indicating that while the plaintiffs might have a separate cause of
action if there had been an overpayment, she considered the case before her to
be concluded.

On February 25, 2013, the plaintiffs’ counsel reviewed accounting
documents supplied by the Associations and concluded that the amount
required to redeem the Unit “from the sheriff’s sale should only have been
about $13,000, which, when added with the $3,204.52 from the Stipulated
Agreement, would only total $16,204.52, and not the $43,443.08 quoted by the
Associations and subsequently paid by Ocwen.” (Quotation and citations

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omitted.) He notified the Associations of the discrepancy, but “received no
substantive response.”

The plaintiffs brought this action against the defendants alleging
breaches of fiduciary duty by both Ocwen and the Associations, and seeking
both enforcement of the Stipulated Agreement and an accounting from the
Associations. Ocwen and the Associations moved separately for summary
judgment. The trial court granted summary judgment in favor of Ocwen, and
in favor of the Associations with respect to the fiduciary duty and accounting
claims, and dismissed, for failure to state a claim, the count seeking
enforcement of the Stipulated Agreement. On March 14, 2016, the plaintiffs
moved to amend their complaint, which the trial court denied. The trial court
also denied the plaintiffs’ motion for reconsideration.

On appeal, the plaintiffs argue that the trial court erred in: (1) finding, as
a matter of law, that Ocwen did not owe the plaintiffs a fiduciary duty; (2)
finding that the statute of limitations had run on new claims against the
Associations that the plaintiffs sought to add, by amendment, to their
complaint; and (3) denying their motion to amend “when the case was still
open.” The Associations, on cross-appeal, contend that: (1) summary judgment
in their favor should have been granted on the basis of res judicata; and (2) the
trial court erred in denying their claim for attorneys’ fees.

We first address the plaintiffs’ challenge to the grant of summary
judgment in Ocwen’s favor, and we begin with our standard of review:

In reviewing the trial court's grant of summary judgment, we
consider the affidavits and other evidence, and all inferences
properly drawn from them, in the light most favorable to the non-
moving party. If our review of that evidence discloses no genuine
issue of material fact, and if the moving party is entitled to
judgment as a matter of law, we will affirm the grant of summary
judgment. We review the trial court’s application of the law to the
facts de novo.

Pike v. Deutsche Bank Nat’l Trust Co., 168 N.H. 40, 42 (2015) (citations
omitted).

The plaintiffs concede that, “ordinarily[,] . . . [t]he relationship between
lender and borrower” is not a fiduciary one, but “is contractual under New
Hampshire law.” Thus, as the trial court recognized, a tort claim “for purely
economic or commercial losses associated with the contract relationship” is
generally barred under the economic loss doctrine. Wyle v. Lees, 162 N.H. 406,
410 (2011) (quotation omitted). The plaintiffs contend, however, that they fall
within a recognized exception to the economic loss doctrine. Specifically, they
“argue that there existed a special relationship between the plaintiffs and

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[Ocwen] that created a duty owed by [Ocwen].” See id. (noting that “economic
loss recovery may be permitted” when there is “a ‘special relationship’ between
the plaintiff and the defendant that creates a duty owed by the defendant”).

The plaintiffs assert that they “placed their confidence in [Ocwen] and
that confidence was betrayed.” (Bolding omitted.) They appear to rely,
therefore, upon the doctrine that “[a] fiduciary relationship has been defined as
a comprehensive term and exists wherever influence has been acquired and
abused or confidence has been reposed and betrayed.” Lash v. Cheshire
County Savings Bank, 124 N.H. 435, 438 (1984) (quotation and brackets
omitted). In Lash, for instance, we held that a jury reasonably could have
found a breach of fiduciary duty where the defendant bank “retained the
plaintiffs’ funds, disbursed them without authorization, and [then] demand[ed]
that the plaintiffs repay the loan.” Id. at 439. Lash made clear, however, that
“[i]n doubtful cases, whether the conduct of two parties was such that a
fiduciary relationship existed between them is a question of fact for the trier of
fact.” Id. at 438.

Here, the trial court found that the plaintiffs “neither alleged, nor put
forth evidence showing, that [Ocwen] assumed a duty beyond that traditionally
associated with a money lender.” Specifically, it concluded:

[N]either the plaintiffs’ allegations, nor the record viewed in the
light most favorable to them, supports a finding that Ocwen
engaged in any extra contractual conduct giving rise to an
independent duty. There is no evidence that Ocwen acquired
influence over the plaintiffs outside of the contractual relationship
and thereafter abused it or that the plaintiffs’ confidence was
otherwise reposed and then betrayed. Indeed, there is no evidence
that the plaintiffs and Ocwen ever communicated with one another
at any time.

(Citation omitted.)

The plaintiffs challenge the trial court’s final statement, asserting that
“[t]here were factual allegations in the pleadings that the plaintiffs did
communicate with Ocwen on th[e] very subject [of overpayment].” They do not,
however, refute the trial court’s crucial finding that there was “no evidence that
Ocwen acquired influence over the plaintiffs outside of the contractual
relationship.” Indeed, they appear to rely solely upon the contractual
relationship in arguing that a special relationship existed, asserting that they
“did repose their confidence in Ocwen by entering into a mortgage with [it].”
(Emphasis added.) Accordingly, the plaintiffs have failed to show that the trial
court erred in discerning no support for finding an extra-contractual duty in
this case.

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 The plaintiffs also attempt to fit this case within the ambit of a line of
New Hampshire precedent “impos[ing] a duty on [a] mortgagee to exercise good
faith and due diligence in certain situations.” With one exception — namely,
Lash, 124 N.H. at 439, which we addressed above — the cases cited by the
plaintiffs involved foreclosure by the mortgagee. See First NH Mortgage Corp.
v. Greene, 139 N.H. 321, 323 (1995); Wheeler v. Slocinski, 82 N.H. 211, 212
(1926). In that situation, we have held mortgagees executing a power of sale to
a duty that is “essentially that of a fiduciary” under the “often-repeated rule
that a mortgagee executing a power of sale is bound both by the statutory
procedural requirements and by a duty to protect the interests of the
mortgagor through the exercise of good faith and due diligence.” Murphy v.
Financial Development Corp., 126 N.H. 536, 540-41 (1985). We note, as did
the trial court, that Ocwen is not the mortgagee itself, but the mortgagee’s loan
servicer. Nevertheless, for ease of analysis, we will assume, without deciding,
that Ocwen stands in the shoes of the mortgagee (U.S. Bank N.A.).

Relying upon the foreclosure cases, the plaintiffs assert that the trial
court erred in apparently concluding that “because the redemption situation
was contemplated in the contract, . . . any activity with regard to the
redemption was contractual in nature.” This is so, the plaintiffs argue,
because, like the lender’s power to redeem here, “[t]he power of sale is generally
included in a mortgage instrument.” Be that as it may, however, the plaintiffs
fail to persuade us to recognize an “essentially . . . fiduciary,” id. at 541, duty
on the part of a mortgagee exercising its contractual right to redeem the
mortgaged property as we have on the part of a mortgagee exercising its
contractual power of sale. They argue:

The common thread in the cases in which a fiduciary duty is
imposed is that the mortgagee is, in some way, acting on behalf of
the mortgagor by authorization from the mortgage. . . . Generally
speaking, when a bank is “spending” a borrower’s money, or
increasing its debt, or at least not mitigating the amount due as in
a foreclosure, then the bank has taken on an act as a sort of
“trustee” for the borrower. In those instances, the laws and courts
impose a duty upon the lender.

Assuming, without deciding, that the plaintiffs have identified a “common
thread” in these cases, we disagree that “acting on behalf of the mortgagor by
authorization from the mortgage” is, by itself, enough to justify the imposition
of an extra-contractual duty as a matter of law.

Ocwen argues, to the contrary, that “the policy behind imposing such a
fiduciary duty [on a foreclosing mortgagee] is to curb the possibility that a
mortgagee-bank might act in its own self-interest at the expense of the
mortgagor-borrower.” We agree that it is the conflicting or divergent interests
at play in a foreclosure sale that necessitate the imposition of an “essentially

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. . . fiduciary” duty “to protect the interests of the mortgagor.” Murphy, 126
N.H. at 540-41. Accordingly, we examine those interests, and those involved in
this case, to determine whether to extend the foreclosure sale line of cases to
the situation presented here.

The mortgagor has the right to have the proceeds of the sale first credited
against the mortgagor’s debt, see Carrols Equities Corp. v. Della Jacova, 126
N.H. 116, 119 (1985), and then to receive “all the proceeds of the sale above the
amount necessary” to repay the debt in full, Wheeler, 82 N.H. at 212. Thus,
the mortgagor has an interest in maximizing the price at which the property is
sold. The foreclosing mortgagee, however, has no reason to promote that
interest; it “has the right to sell the property for the payment of the mortgage
debt,” Wheeler, 82 N.H. at 212, but it has no incentive to obtain a higher price.
Nor, certainly, is the mortgagor’s interest protected by the purchaser, who
seeks to buy the property as cheaply as possible, and who has the lawful right
to do so. Id. at 214. Thus, the interests of the mortgagor and the purchaser
are directly adverse, as we have noted when the mortgagee itself is a potential
purchaser. See Murphy, 126 N.H. at 541 (recognizing the “conflicting interests
involved” when a foreclosing mortgagee occupies “dual role[s] as seller and
potential buyer at the foreclosure sale”); Wheeler, 82 N.H. at 214 (noting that
“[t]he situation created by the statute authorizing the mortgagee to buy . . .
permit[s] the exercise of personal interest conflicting with fiduciary duty”). In
addition, the mortgagee’s ability to control the sale heightens the risks to the
mortgagor’s interest. See Wood River Development v. Armbrester, 547 So. 2d
844, 847 (Ala. 1989) (noting that when a “mortgagee is selling the property, . . .
his interest is diametrically opposed to the interest of the mortgagor, especially
if he is the purchaser of the property at the foreclosure sale” because he “is in a
better position to hinder the sale and render it self-serving”); cf. Wheeler, 82
N.H. at 213 (noting that the mortgagee “had control over the conduct of the
auction, and in such control represented the mortgagor as well as himself”).
Thus, foreclosure under power of sale presents the mortgagee with an
opportunity to profit at the mortgagor’s expense by buying-in at less than fair
value (perhaps even by manipulating the circumstances of the foreclosure sale
itself) and then reselling the property at a higher price.

The situation in this case did not present similarly conflicting interests.
Ocwen paid an additional, out-of-pocket sum of money merely to retain and
protect the security interest it had already been given, and thereby activated a
promise by the plaintiffs to repay the additional amount advanced, with
interest, but also subject to the attendant risk of default. Ocwen had little
incentive to pay more than the actual amount of fees due and did not stand to
profit unfairly at the plaintiffs’ expense.

Furthermore, we agree with Ocwen that the contractual and other legal
constraints already imposed upon its “discretionary authority” make
“recognition of a fiduciary duty in this context . . . unnecessary.” In particular,

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Ocwen points to language in the mortgage authorizing the lender to “do and
pay for whatever is reasonable or appropriate to protect Lender’s interest in the
[Unit]” (emphasis added), and to the implied covenant of good faith and fair
dealing recognized by New Hampshire law “[i]n every agreement,” Birch Broad.
v. Capitol Broad. Corp., 161 N.H. 192, 198 (2010). Ocwen concludes, and we
agree, that “[i]n light of the . . . contractual[] . . . language and the existing
implied covenant of good faith and fair dealing, to the extent that the [plaintiffs]
argue [Ocwen] did not act in a ‘reasonable or appropriate manner,’ the contract
itself provides a basis for relief.” Accordingly, we affirm the grant of summary
judgment in favor of Ocwen.

The plaintiffs next challenge the trial court’s denial of their motion to
amend their complaint to more particularly state their previous claims and to
add new claims and new parties. Our standard of review is well-settled:
“Amendment of pleadings is liberally permitted, and the decision to grant or
deny a motion to amend rests in the sound discretion of the trial court. We will
not overturn that decision unless it is an unsustainable exercise of discretion.”
Kalil v. Town of Dummer Zoning Bd. of Adjustment, 159 N.H. 725, 729 (2010)
(citations omitted). Thus, to prevail, the plaintiffs “must demonstrate that the
ruling was unreasonable or untenable to the prejudice of [their] case.” Id.

The plaintiffs’ motion to amend, as the trial court noted, sought to “add
claims for intentional misrepresentation, negligent misrepresentation, and
breach of contract against the Associations,” as well as “to add several new
parties for these claims, including individual board members of the
Associations.” With respect to the new misrepresentation claims, the court
noted that “the plaintiffs concede [they] are ‘new causes of action.’” The court
concluded that the statute of limitations had run on both of the new claims,
and, accordingly, denied the plaintiffs’ motion as to those claims.

With respect to the breach of contract claim, the court found that it was
“a technical, rather than substantive, amendment in which the plaintiffs seek
to clarify and/or correct the deficiencies in their existing count to enforce the
stipulated agreement.” The court indicated that it “would have been inclined to
permit” amendment if it “[h]ad . . . been brought sooner,” but concluded that
“permitting the proposed amendment [would be] neither just nor reasonable”
given the plaintiffs’ unexplained delay in bringing it. Accordingly, the motion to
amend was also denied as to that claim. The plaintiffs challenge both rulings.

We first address the court’s ruling that the new misrepresentation claims
are barred by the statute of limitations. The motion to amend was brought on
March 14, 2016, and the applicable limitations period is three years. See RSA
508:4, I (2010) (three-year statute of limitations applicable to all personal
actions other than libel or slander).

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 The plaintiffs argue that the claims are not barred because, under the
discovery rule, the statute of limitations did not begin to run until December
2014. The plaintiffs concede that, because the defendants met their burden to
show that this action was not brought within the applicable statute of
limitations, the plaintiffs bore the burden to prove the applicability of the
discovery rule to their claims. See Glines v. Bruk, 140 N.H. 180, 181 (1995).
They assert that they met that burden.

The discovery rule is a two-pronged rule requiring both
prongs to be satisfied before the statute of limitations begins to
run. First, a plaintiff must know or reasonably should have known
that it has been injured; and second, a plaintiff must know or
reasonably should have known that its injury was proximately
caused by conduct of the defendant. Thus, the discovery rule
exception does not apply unless the plaintiff did not discover, and
could not reasonably have discovered, either the alleged injury or
its causal connection to the alleged negligent act.

Beane v. Dana S. Beane & Co., 160 N.H. 708, 713 (2010) (quotations and
citations omitted). The discovery rule does not require “the full extent of the
plaintiff’s injury [to have] manifested itself” or that a plaintiff “be certain of th[e]
causal connection [between the harm he has suffered and the defendant’s
negligent or wrongful act]; the possibility that [the causal connection] existed
will suffice to obviate the protections of the discovery rule.” Id. (quotation
omitted). Thus, “that the plaintiff could reasonably discern that he suffered
some harm caused by the defendant's conduct is sufficient to render the
discovery rule inapplicable.” Id. (quotation omitted).

The trial court found that the “alleged misrepresentations . . . were made
in March of 2012” and that the plaintiffs knew of them “[a]t the very latest, . . .
when they brought a related contempt motion on August 29, 2012.” The
plaintiffs contend, however, that “[t]he events in 2012 should not be the focus
for an analysis . . . [of] the discovery rule exception.” Specifically, they argue
that although “the overpayment occurred [in 2012], [and] thus, the plaintiffs
were injured and they were aware of their harm[,] . . . [they] were unaware that
the cause of their injury was the misrepresentations of the defendants.” They
did not discover that “missing critical information,” they assert, “until
December of 2014 when they finally received discovery that they had been
requesting for years.” At that time, they “discovered . . . emails containing . . .
communications between Ocwen and the Associations which were in direct
contradiction to what the Associations had represented to the plaintiffs years
earlier.” In other words, discovery revealed, according to the plaintiffs, that
“the Associations had, unbeknownst to the plaintiffs, been communicating with
Ocwen with regard to a payoff amount[,] . . . in plain contradiction to” the
Associations’ representations that no such communications with Ocwen had
occurred.

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 In essence, the plaintiffs’ argument is that they did not know, and
reasonably should not have known, that the Associations had misrepresented
the extent of their communications with Ocwen in March of 2012, and that
such misrepresentation was the cause of their injury, until they obtained,
through discovery, copies of the actual e-mails between the Associations and
Ocwen in December of 2014. As the Associations point out, however, that
contention is belied by the record.

In their petition to “bring forward to enforce the [Stipulated] Agreement
and for contempt,” dated June 26, 2012, the plaintiffs alleged that “[o]n or
about, March [2012], without consent from the [plaintiffs], discussions
commenced between Ocwen and the [Associations] regarding the amount owed
by [the plaintiffs] to [the Associations], and on or about March 27, 2012, Ocwen
paid the [Associations] a total of $43,443.08.” (Bolding and capitalization
omitted.) The petition also alleged that the plaintiffs “ma[de] inquiries [as] to
the amount paid by Ocwen,” that they had difficulty obtaining that
information, and that by June 22, 2012, the plaintiffs “believ[ed] . . . that the
[Associations] were purposefully withholding the breakdown of the
$43,443.08.” It cited an attached e-mail of that date, from the plaintiffs’
counsel to Rolling Green Condominiums’ Senior Property Manager, in which
counsel stated that he could “only assume that the reason for delay is that
Rolling Green is hiding the fact that they requested [Ocwen] pay monies that
went beyond the stipulated amount.”

The foregoing allegations demonstrate that by the time they brought their
petition to enforce the Stipulated Agreement and for contempt, the plaintiffs
were aware of the “communications and their secretive nature” that they now
argue “caused [them] to enter into [the] Stipulated Agreement without complete
knowledge of the facts and the context in which they were doing so.”
Furthermore, in a letter dated February 25, 2013, still more than three years
prior to the March 14, 2016 motion to amend, the plaintiffs’ lawyer chided the
Associations’ lawyer for making “misrepresentations” about his
communications with Ocwen:

It is unclear on how you arrived at the number sent to
Ocwen. More importantly, I am disturbed at the
misrepresentations that you have made to the Court and . . .
myself during the settlement negotiations. Upon documents
provided by Ocwen, it is clear that you knew, at the time of
negotiating the settlement that you had already provided Ocwen
with an amount the check(s) should be made out for.

Even if the plaintiffs did not know the actual content of the
communications until, as they allege, December 2014, the discovery rule does
not toll the statute of limitations until that date. The plaintiffs’ position is
substantially equivalent to one we rejected in Bricker v. Putnam, 128 N.H. 162,

9
165-66 (1986). At issue in Bricker was a twelve-page transcript of a portion of
the minutes of the May 22, 1969 meeting of the House of Delegates of the New
Hampshire Medical Society. See Bricker, 128 N.H. at 163. Bricker sought to
review the meeting minutes shortly after the meeting, but was informed they
had not yet been transcribed. Id. at 165. In late 1970 or early 1971, he
reviewed what would appear, by pagination, to have been the entire minutes,
but did not see the twelve pages at issue, which had been filed separately. Id.
In 1975, he sought to obtain, by subpoena, all documents relating to him, but
“allege[d] that the twelve pages were not produced.” Id. Bricker finally “came
upon the twelve pages at issue” on May 16, 1978, and contended that the
statute of limitations did not begin to run until that date. Id. at 164. We
disagreed, explaining:

Although the actual discovery of the twelve pages did not occur
until 1978, the record indicates that Bricker was fully apprised of
the substance of the discussion recorded therein shortly after the
meeting of the house of delegates in 1969, when a member of the
house informed him of everything that had taken place. Thus, it
cannot be said that [Bricker] was prejudiced because he was
unaware of the cause of his injury or did not know his adversary.

Id. at 166. We concluded that Bricker “did not need the actual minutes to have
the facts essential to his cause of action.” Id. Similarly, here, the plaintiffs
were aware, more than three years prior to March 14, 2016, that the
Associations had engaged in payoff “discussions” with Ocwen and had
“misrepresent[ed]” the extent thereof. Accordingly, the discovery rule does not
toll the statute of limitations on the plaintiffs’ misrepresentation claims.

The plaintiffs also cite the fraudulent concealment rule, although it is
unclear whether they rely upon it as a separate ground for tolling the statute of
limitations. To the extent they do, the Associations contend that argument was
not raised before the trial court and is, therefore, not preserved. While the
plaintiffs’ motion for reconsideration cited only the discovery rule by name, it
also asserted that the Associations were “intentionally deceptive” and
“intentionally withheld material information from [them].” Accordingly, and
particularly where “[t]he discovery rule and fraudulent concealment rule serve
[a] common purpose” and entail a similar analysis, id. at 165, we will assume,
without deciding, that the plaintiffs preserved a fraudulent concealment
argument. Nevertheless, because of the similarities between the discovery and
fraudulent concealment rules, the plaintiffs cannot prevail on the latter for the
same reasons they cannot prevail on the former.

“[T]he fraudulent concealment rule states that when facts essential to the
cause of action are fraudulently concealed, the statute of limitations is tolled
until the plaintiff has discovered such facts or could have done so in the
exercise of reasonable diligence.” Id. As discussed above, and notwithstanding

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any alleged fraudulent concealment by the Associations, the plaintiffs could
have reasonably discerned the cause of their alleged injury more than three
years prior to March 14, 2016 — the date they brought their motion to amend.
We conclude that here, as in Bricker, “[n]o unfairness has resulted from [the
plaintiffs’] failure to discover” the actual e-mails between Ocwen and the
Associations. Id. at 167. “The equitable considerations that govern the
operation of the discovery rule and the fraudulent concealment rule dictate
that these rules not be applied to prevent the running of the statute of
limitations in this case.” Id. (citation omitted). Having determined that neither
the discovery rule nor the fraudulent concealment rule applies to the plaintiffs’
new misrepresentation claims, we conclude that their motion to amend was
properly denied as to those time-barred claims. See Thomas v. Telegraph
Publ’g Co., 151 N.H. 435, 440 (2004) (finding trial court’s denial of motion to
amend “after the statute of limitations had run” sustainable).

Before addressing the plaintiffs’ arguments regarding their breach of
contract claim, we first consider the Associations’ assertion, on cross-appeal,
that the trial court should have granted them summary judgment on the
plaintiffs’ claim seeking to enforce the Stipulated Agreement because that claim
is barred under the doctrine of res judicata. They note that the trial court
declined to address the applicability of res judicata to that claim because it had
already been dismissed on other grounds. They contend, however, that
because the plaintiffs “now seek to revive the enforcement of the Stipulated
Agreement claim and the proposed breach of contract/enforcement of
Stipulated Agreement claims through this appeal,” the applicability of res
judicata is once again at issue. They then assert that the trial court’s “denial of
the Motion to Amend to resurrect such claims may be upheld on these
alternative grounds.” Accordingly, if we were to agree with the Associations on
this issue, the plaintiffs’ appeal with respect to their amended breach of
contract claim would be rendered moot.

“The doctrine of res judicata prevents parties from relitigating matters
actually litigated and matters that could have been litigated in the first action.”
Gray v. Kelly, 161 N.H. 160, 164 (2010) (quotation omitted). It applies if three
elements are satisfied: “(1) the parties are the same or in privity with one
another; (2) the same cause of action was before the court in both instances;
and (3) the first action ended with a final judgment on the merits.” Id.

We need not determine whether the first two elements are satisfied,
because we conclude that the third is not. The Associations assert that there
was a “final judgment” in the contempt proceeding because the plaintiffs did
not appeal the denial of their motion for contempt in which the trial court
found, the Associations assert, “that the [p]laintiffs had failed to show a
violation of the Stipulated Agreement as a result of the payment by Ocwen.”
We cannot conclude, however, that the court’s order on the motion for
contempt was a decision on the merits entitled to preclusive effect. See id. The

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denial appears to have been granted without prejudice. More broadly, the trial
court specifically noted the possibility that another action — “some sort of
equitable proceeding” such as “an action for a constructive trust or a fraud
action” — could be brought challenging the overpayment by Ocwen.
Accordingly, we reject the Associations’ contention that res judicata bars the
plaintiffs’ breach of contract claim.

The plaintiffs next argue, with respect to that claim, that the trial court
“erred when it denied [their] request to amend the complaint even though the
case was still pending and no final judgment had been made.” They contend
that ERG, Inc. v. Barnes, 137 N.H. 186 (1993), “requires that a trial court allow
plaintiffs at least one opportunity to amend a writ prior to dismissal for failure
to state a claim,” and note that, with respect to their claim for enforcement of
the Stipulated Agreement, the trial court treated the Associations’ motion for
summary judgment as a motion to dismiss for failure to state a claim and
granted it as such. As a whole, then, we interpret the plaintiffs’ argument as
contending that the trial court erred in imposing a time limit upon their ability
to amend under ERG when the deadline imposed by our case law is the entry
of final judgment. See Arsenault v. Scanlon, 139 N.H. 592, 594 (1995).

The Associations assert that this argument is not preserved because “the
[p]laintiffs did not urge that the [trial court’s] decision was contrary to the ERG
holding in [their] motion for reconsideration.” We agree that ERG is not cited
in the plaintiffs’ motion for reconsideration; nevertheless, we decline to find the
plaintiffs’ argument not preserved for appellate review. The trial court was well
aware of ERG — it is cited in the court’s order. Cf. State v. Gross-Santos, 169
N.H. 593, 598 (2017) (“We have often explained that the purpose of our
preservation rule is to insure that trial forums have an opportunity to rule on
issues and to correct errors before parties seek appellate review.”). Moreover,
while the holding of ERG constitutes a subsidiary element of the plaintiffs’
argument as we have framed it above, their primary contention is that the trial
court erred in imposing an arbitrary deadline — and doing so without prior
notification — while the case was still open. That contention is made with
sufficient clarity in the motion to reconsider. Accordingly, we consider the
plaintiffs’ argument preserved and will address it on its merits.

The Associations also argue:

While the [p]laintiffs asserted that their Motion to Amend, in part,
served to correct perceived deficiencies and the [trial court]
described the proposed breach of contract claim as a ‘technical’
rather than substantive amendment, both treated the breach of
contract claim as a substantive amendment with their reliance
upon RSA 514:9 and the standards thereunder.

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We agree that the trial court may have blurred the distinction between
technical and substantive amendments when it stated that permitting
amendment of the Stipulated Agreement claim would be “neither just nor
reasonable.” See Pesaturo v. Kinne, 161 N.H. 550, 556 (2011) (distinguishing
between the “opportunity to correct perceived deficiencies in [a plaintiff’s]
original claims” pursuant to ERG, and substantive amendments, which “[a]
court need only allow . . . when necessary to prevent injustice”). Nevertheless,
the trial court clearly stated that it considered the proposed amendment to be
“technical, rather than substantive,” and specifically cited ERG for the “well-
settled” rule “that plaintiffs are permitted to amend their complaints following
dismissal for failure to state a claim.” Thus, we conclude that, notwithstanding
the manner in which the plaintiffs may have presented or argued their request,
the trial court treated the proposal, at least as to the Associations, as a
technical amendment under ERG.

The Associations nevertheless argue that the “the proposed breach of
contract claim did represent a substantive amendment to the [c]omplaint.”
They first contend that the proposed breach of contract claim asserted a new
cause of action because the original claim for enforcement of the Stipulated
Agreement remained in the amended complaint as a renumbered count. Thus,
they argue, “the [p]laintiffs did not cure deficiencies so much as they added a
new claim.” While we again agree that the Associations’ argument is factually
accurate as to the contents of the original and amended complaints, it elevates
form over substance. The trial court noted that it had analyzed the original
claim for enforcement of the Stipulated Agreement as a claim for breach of
contract. Thus, the trial court correctly viewed the proposed breach of contract
claim in the amended complaint as an attempt to “clarify and/or correct the
deficiencies in [the plaintiffs’] existing count to enforce the stipulated
agreement” rather than a new cause of action. That the original, dismissed
count remained in the amended complaint is of no moment.

The Associations also note that the amended complaint sought to assert
the breach of contract claim “not only against the Associations, but against
officers of the Associations.” We agree with the Associations that adding the
breach of contract claim against these new parties is a substantive
amendment. Thus, to prevail on appeal as to the claims against these parties,
the plaintiffs would have to demonstrate that “the trial court could [not] have
reasonably found that th[is] substantive amendment[] w[as] not necessary to
prevent injustice.” Id. at 557. We conclude that they have not done so. Their
brief does not explicitly address their breach of contract claims against the new
individual defendants and, in fact, it is unclear whether they challenge that
aspect of the trial court’s ruling. They argue that “[t]he denial of [their] motion
to amend their complaint was unreasonable and prejudiced their case in that
they were unable to pursue valid claims against the defendant Associations
and are left with no recourse against the Associations’ wrongdoing.” Although
the trial court also did not differentiate between assertion of the proposed

13
breach of contract claim against the new individual defendants, as opposed to
the Associations, and, although it analyzed the proposed claim as a technical
amendment, it also found that “permitting the proposed amendment [was]
neither just nor reasonable.” As that finding effectively forecloses approval of a
substantive amendment, see id., and the plaintiffs fail to demonstrate that it
was an unsustainable exercise of discretion with respect to the individual
defendants, we affirm the trial court’s denial of the motion to amend as to the
breach of contract claim against those defendants.

Returning to the amended claims with respect to the Associations, the
Associations next assert that denial of the motion to amend is sustainable
because the proposed breach of contract claim in the amended complaint “fails
to cure the deficiencies as the [p]laintiffs merely alleged payments of legal fees
without tying the same to an action covered by the Stipulated Agreement.” The
original claim to enforce the Stipulated Agreement alleged that “[a] permanent
stipulation was entered into and approved by the Court” and that “[t]he
[p]laintiffs are entitled to have the terms of the Stipulation enforced, and that
the [Associations] should be bound by such terms.” Treating the claim as one
for breach of contract, the trial court dismissed it for failure to state a claim,
concluding that “the plaintiffs have not cited any provision of the Stipulated
Agreement that has been violated.”

The proposed breach of contract claim in the amended complaint alleges
that the parties entered into the Stipulated Agreement, in which they “agreed
that they would be responsible for their own legal fees.” It further alleges that
“[d]espite the Stipulat[ed] [Agreement], the [Associations], without legal excuse
continued to charge the [p]laintiffs legal fees and costs.” The Associations
appear to contend that this proposed amendment still “fail[s] to cite a provision
being violated.” We disagree. The Stipulated Agreement consists of thirteen
separately-numbered paragraphs set forth on three pages. Although the
amended complaint does not identify the allegedly violated provision by
paragraph number, the substance of the provision is clearly alleged and is
easily found within the three-page document. Accordingly, we conclude that
“[t]his claim cured the defect that required dismissal of the plaintiff’s initial
writ.” Lamprey v. Britton Constr., 163 N.H. 252, 265 (2012). “[W]e decline to
address, [however,] in the first instance, whether the [plaintiffs’] allegations are
reasonably susceptible of a construction that would permit recovery,”
Sanguedolce v. Wolfe, 164 N.H. 644, 648 (2013) (quotation omitted), or, in
other words, whether the claim would survive a motion to dismiss brought
upon a ground other than failure to identify the provision alleged to have been
violated.

Having found that the plaintiffs’ proposed amendment corrected the
deficiency that prompted the earlier dismissal, we would ordinarily conclude
that “the trial court unsustainably exercised its discretion by dismissing the
[breach of contract claim] . . . without giving the plaintiff[s] an opportunity to

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add the [curative] allegation[s].” Lamprey, 163 N.H. at 265. This case,
however, presents the question whether a trial court can deny a curative
amendment solely upon the basis of the plaintiffs’ delay in bringing the motion
to amend.

The trial court noted, and the plaintiffs do not dispute, that if its order on
the Associations’ motion for summary judgment was a final judgment, “then
the Court would not have the ability to allow any amendments as to claims
against the Associations as the case would be over.” See Arsenault, 139 N.H.
at 594. The court considered it “questionable whether [that order] was a ‘final
judgment’ subject to mandatory appeal,” but determined that it “need not
decide [that] issue.” The plaintiffs, however, must establish on appeal that the
order was not a final judgment to preclude affirmance on that alternative
ground. See, e.g., Doyle v. Comm’r, N.H. Dep’t of Resources & Economic Dev.,
163 N.H. 215, 222 (2012) (noting that “where the trial court reaches the correct
result on mistaken grounds, we will affirm if valid alternative grounds support
the decision” (quotation omitted)).

Generally, when a trial court issues an order that does not
conclude the proceedings before it, for example, by deciding some
but not all issues in the proceedings or by entering judgment with
respect to some but not all parties to the action, we consider any
appeal from such an order to be interlocutory . . . .

Germain v. Germain, 137 N.H. 82, 84 (1993). Here, the Associations and
Ocwen filed separate motions for summary judgment, which the court decided
in separate orders dated August 25, 2015, and April 1, 2016, respectively. The
August 25, 2015 order, which disposed of all claims against the Associations,
“decid[ed] some but not all issues in the proceedings” and “enter[ed] judgment
with respect to some but not all parties to the action,” id., leaving claims
pending against Ocwen. Thus, where the August 25, 2015 order did not
bifurcate the proceedings, it was not a “decision on the merits” for purposes of
appeal, but, rather, was interlocutory. Id. (quotation omitted) (concluding that
where court bifurcated proceedings, issuing “a divorce decree deciding property
issues but leaving child custody and permanent support to be decided after
final hearing,” that order was a “decision on the merits” for purposes of appeal
(quotation omitted)). Accordingly, no “final judgment . . . [terminating] the trial
court’s power to allow amendment to the [complaint]” was issued or rendered.
Arsenault, 139 N.H. at 594.

Having concluded that the trial court had jurisdiction to allow an
amendment to the plaintiffs’ complaint, we now address whether it
unsustainably exercised its discretion by imposing a time limit upon the filing
of a technical amendment under ERG. We will assume, without deciding, that
a trial court has the authority to impose such a limit. The Superior Court Civil
Rules provide that “[a]mendments may be made to the Complaint or Answer

15
upon the order of the court, at any time and on such terms as may be
imposed.” Super. Ct. Civ. R. 12(a)(4). We will assume that this language
means that amendments may be made “at any time” unless the court imposes
the additional “term” of a deadline by which to file. Id. We conclude, however,
that implicit in the meaning of “on such terms as may be imposed,” id., is that
the affected party be provided notice of the terms imposed. Cf. People v. Allen,
815 N.E.2d 426, 432 (Ill. App. Ct. 2004) (holding that “it is arbitrary for a court
to summarily reject [a plea agreement tendered before trial] as late unless the
court told the parties, in advance, what ‘late’ meant” in that respect; “[t]o fairly
and reasonably enforce a deadline for tendering plea agreements, a court must
first give the parties advance notice of the deadline”).

Here, it appears, and was asserted by the plaintiffs in their motion for
reconsideration, that the trial court did not notify the plaintiffs of a time limit
for filing a motion to amend. The court’s order states:

The Court generally allows parties thirty days to amend when the
complaint fails to state a viable claim. While the Court did not
explicitly afford the plaintiffs an opportunity to amend in its
August [25], 2015 order, it is well-settled in this State that
plaintiffs are permitted to amend their complaints following
dismissal for failure to state a claim. See ERG, Inc. v. Barnes, 137
N.H. 186, 189 (1993). The Court therefore presumed that the
plaintiffs knew of their right to amend. The plaintiffs, who are
represented by counsel, do not now claim otherwise.

We conclude that because the trial court failed to notify the plaintiffs of a
deadline for moving to amend their complaint, its denial of their motion to
amend on timeliness grounds constituted an unsustainable exercise of
discretion. Cf. id. at 431-32 (holding trial court abused its discretion in
refusing to consider, on ground of untimeliness, plea agreement tendered on
day of trial when court had failed to give parties advance notice of a filing
deadline). Accordingly, we reverse the court’s denial of the plaintiffs’ motion to
amend with respect to the breach of contract claim against the Associations.

Finally, the Associations cross-appeal the trial court’s denial of their
request for attorney’s fees. “We give substantial deference to a trial court’s
decision on attorney’s fees, and will not overturn it absent an unsustainable
exercise of discretion.” Bosonetto v. Town of Richmond, 163 N.H. 736, 746
(2012) (quotation omitted); see also Bianco, P.A. v. Home Ins. Co., 147 N.H.
249, 251-52 (2001) (explaining review of trial court’s discretion when an award
of attorney’s fees is mandated by statute).

The Associations argue that they are entitled to attorney’s fees on the
basis of the plaintiffs’ bad faith conduct, see Harkeem v. Adams, 117 N.H. 687,
690-91 (1977), and under RSA 507:15 (2010) (authorizing award of costs and

16
reasonable attorney’s fees plus $1,000 to prevailing party in contract or tort
action if court finds “the action or any defense is frivolous or intended to
harass or intimidate the prevailing party”). The trial court, however, implicitly
found that the plaintiffs’ action was not frivolous, as it noted that “[h]ad the
plaintiffs pursued relief under a different legal theory the outcome may have
been different.” In addition, the court stated that it was “not unsympathetic to
the plaintiffs’ plight” and noted, “[i]n particular, [that] it appear[ed] the
Associations [had] dodged the plaintiffs’ reasonable requests for information.
For this reason, the Associations’ request for attorney’s fees is DENIED.” We
interpret this as a ruling that fees were not justified on the basis of bad faith.
See In the Matter of Sheys & Blackburn, 168 N.H. 35, 39 (2015) (noting that
“interpretation of a court order is a question of law, which we review de novo”).

In support of their claim on appeal, the Associations recount a
“continuing series of litigation” that the plaintiffs have waged against them, as
well as other actions the plaintiffs have taken, in alleged bad faith. They
nevertheless fail to demonstrate, or even argue, that the factual finding
underpinning the trial court’s ruling — i.e., that “the Associations have dodged
the plaintiffs’ reasonable requests for information” — is clearly erroneous.
Accordingly, we conclude that they have not shown an unsustainable exercise
of discretion. Bosonetto, 163 N.H. at 746.

The Associations also contend that they are entitled to attorney’s fees
under: (1) RSA 356-B:15 (Supp. 2016), which provides a cause of action for
failure to comply with condominium instruments, see RSA 356-B:15, I, and
further states that “[t]he prevailing party shall be entitled to all costs and
attorneys’ fees incurred in any proceeding under RSA 356-B:15, I,” RSA 356-
B:15, II; and (2) a provision in the TOA’s bylaws, which provide that “[i]n any
proceeding arising out of any alleged default by an Owner, the prevailing party
shall be entitled to recover the costs of the proceeding, and such reasonable
attorneys’ fees as may be determined by the court.” The Associations contend
that the trial court’s decision “was clearly untenable or unreasonable as its
focus was misplaced.” As we read their argument, the Associations contend
that the trial court failed to appreciate that the instant action: (1) “presented a
continuing issue on the enforcement of the provisions of the condominium
documents and the Associations prevailed below”; and (2) “arose out of prior
litigation involving defaults by the [p]laintiffs” and “the Associations were the
prevailing party.” As such, the Associations implicitly contend, this action is
one for which a prevailing party fee award is a statutory, and a contractual,
entitlement.

We need not address this argument further, however, given our reversal
— with respect to the breach of contract claim against the Associations — of
the order denying the plaintiffs’ motion to amend their complaint and our
remand of that remaining potential claim for further proceedings. In other
words, it is as yet undetermined, as between the plaintiffs and the

17
Associations, which will ultimately be the “prevailing party.” Thus,
consideration of any claim to fees under either RSA 356-B:15, II or the TOA’s
bylaws would be premature.

Affirmed in part; reversed
in part; and remanded.

DALIANIS, C.J., and HICKS and BASSETT, JJ., concurred.

Eileen Fox,
Clerk

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