Georgia A. Tuttle, M.D. & a. v. New Hampshire Medical Malpractice Joint Underwriting Association & a.; In The Matter of The Winding Down of the New Hampshire Medical Malpractice Joint Underwriting Association

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2017-0427, Georgia A. Tuttle, M.D. & a. v. New
Hampshire Medical Malpractice Joint Underwriting Association
& a.; In The Matter of The Winding Down of the New Hampshire
Medical Malpractice Joint Underwriting Association, the court,
on March 13, 2018, issued the following order:

We accepted this interlocutory transfer without ruling pursuant to
Supreme Court Rule 9 on August 10, 2017. The claims in these cases arise in
the aftermath of our decision in Tuttle v. New Hampshire Medical Malpractice
Joint Underwriting Association, 159 N.H. 627 (2010), in which we held that
any excess surplus funds held by the New Hampshire Medical Malpractice
Joint Underwriting Association (Association) belonged to the healthcare
provider policyholders who had paid the malpractice insurance premiums that
generated the surplus, and that the surplus therefore could not be transferred
to the State. The lead plaintiffs, Georgia A. Tuttle, M.D., LRGHealthcare, and
Derry Medical Center, thereafter brought suit to compel disbursement of the
excess surplus, and the trial court has been involved in ongoing proceedings
related both to those claims and to the legislatively mandated winding down of
the Association.

The issues presently before the court relate to the proposed
disbursement of certain excess surplus funds of the Association. Pursuant to
RSA 404-C:17 (Supp. 2017), Insurance Commissioner Roger A. Sevigny, in his
capacity as Receiver of the Association, filed a motion in which he sought to
interplead with the court the sum of $50 million to be distributed to
policyholders. The Receiver indicated that, in connection with his duties in
winding down the affairs of the Association, he has determined that the $50
million constitutes excess proceeds that can be safely distributed to
policyholders, but that he also is maintaining as a reserve $36 million to
address the remaining costs and obligations of the receivership. The lead
plaintiffs assented to the Receiver’s motion and also filed an unopposed
renewed motion for class certification (a class had previously been certified in
connection with an earlier distribution to policyholders of approximately $110
million of excess surplus). The Superior Court (McNamara, J.) denied the
motion for class certification without prejudice, and directed the lead plaintiffs
to prepare an interlocutory transfer without ruling pursuant to Supreme Court
Rule 9, which it approved, certifying the following two questions to this court:
 (1) Whether, in the circumstances of this case, it is a sustainable
exercise of the Court’s discretion to adjudicate the
Policyholders’ claims as a limited fund class action against the
funds the Receiver seeks to tender to the Court in accordance
with RSA 404-C:17, III, in a manner akin to Fed. R. Civ. P.
23(b)(1)(B), whether at law, in equity, and/or pursuant to
Superior Court Rule 16; and

(2) If yes, whether the court may proceed in substantially the
same manner it did in the prior Policyholder Class Action;
alternatively, what procedure should be utilized by the Court to
ensure fair adjudication of the claims of identified claimants.

(Brackets omitted.)

Before turning to the merits, we first address the plaintiffs’ argument
that the interlocutory transfer may in actuality be seeking an improper
advisory opinion from this court inasmuch as there is no dispute among the
parties or members of the putative class as to how the trial court should
proceed. Indeed, everyone, including the trial court, appears to be in
agreement that the court should employ the limited fund class action
procedure utilized by federal courts pursuant to Federal Rule of Civil Procedure
23(b)(1)(B). Because there is not presently any adversity between any parties in
interest, and because we are not authorized to issue advisory opinions at the
behest of anyone other than the legislature or the Governor and Council, the
plaintiffs suggest that we may not have subject matter jurisdiction to answer
the questions tendered to us by the trial court. See Duncan v. State, 166 N.H.
630, 640, 645-46 (2014). Although we acknowledge that the procedural
posture of this case is unusual, we conclude that the plaintiffs do have
standing to pursue this appeal. The trial court’s denial of the renewed motion
for class certification had the practical effect of precluding the Receiver from
making the proposed distribution and, thus, precluding the plaintiffs from
receiving their respective shares of the same. This constitutes a sufficiently
“concrete and particularized” injury to give the plaintiffs standing to appeal the
trial court’s ruling. See id. at 646 (quotation omitted).

Turning to the merits, we answer the first certified question in the
affirmative. Although we appreciate the trial court’s concern that Superior
Court Civil Rule 16 does not contain a specific provision analogous to Federal
Rule 23(b)(1)(B), we conclude that the superior court has sufficiently broad
equitable powers to certify a mandatory class action — that is, one in which no
putative member of the class may “opt out” — to resolve claims to the limited
fund of $50 million the Receiver desires to implead with the court. See Smith
v. Bank, 69 N.H. 254, 257 (1897) (holding that trial court could use “the best
inventible procedure” to require that all potential claimants “who, upon proper
notice, fail to appear as plaintiffs on or before the time set for trial, or other

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specified time, shall be forever barred from participating in any of the trust
funds or in any damages that may be awarded by reason of the defendants’
negligence, and from [thereafter] bringing any action” (quotation omitted)).

We note that the effect of our 2010 Tuttle decision, when combined with
the subsequent legislation providing for the wind-down and dissolution of the
Association, already establishes the liability of the Association for the return to
policyholders of excess surplus funds. Thus, the only matter to be determined
by the court is damages; that is, the share of the $50 million to which each
policyholder is entitled. In these circumstances, Superior Court Civil Rule
16(h) is applicable. It provides:

If the court renders judgment in favor of a plaintiff class, the court
may, in its discretion, order the defendant to pay damages into the
court and require each member of the class to file a claim with the
court, or order payment of damages in any other manner it deems
appropriate.

Super. Ct. Civ. R. 16(h). We also note that Superior Court Civil Rule 16(d)
permits the court to limit class membership to those members who do not
request exclusion from the class “[w]hen appropriate.” Super. Ct. Civ. R. 16(d).
By implication, this rule gives the court discretion to deny the ability to “opt
out” in situations, such as that presented here, where the litigation involves a
limited fund.

For the reasons stated above, we have no hesitancy in ruling that the
trial court has ample authority to employ a procedure analogous to that
utilized under Federal Rule of Civil Procedure 23(b)(1)(B) in this case.

The second certified question asks whether the trial court may proceed in
substantially the same manner as it did when it made the earlier $110 million
disbursement to policyholders, or, if not, what alternative procedures it should
use. We answer that the court may use substantially the same procedures it
used in connection with the earlier distribution of excess surplus funds. As he
did previously, the experienced trial judge has wide discretion to fashion
suitable procedures to ensure that appropriate class counsel is appointed, that
all putative class members receive adequate notice, and that all claims of class
members are fairly adjudicated.

Remanded.

HICKS, LYNN, and HANTZ MARCONI, JJ., concurred.

Eileen Fox,
Clerk

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