Baxter Lake Recreation Area Association v. Thomas Connelly

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2018-0378, Baxter Lake Recreation Area
Association v. Thomas Connelly, the court on May 17, 2019,
issued the following order:

The defendant’s motions for extensions of time to file a reply
memorandum and motion for late entry are granted in part. Accordingly, the
defendant’s motion for permission to respond to the plaintiff’s objection is
moot, and we have not considered the defendant’s reply to the plaintiff’s
objection. The defendant filed his reply memorandum on April 9, 2019. We do
not, however, consider the documents attached to the reply memorandum that
were not presented to the trial court. See Lake v. Sullivan, 145 N.H. 713, 717
(2001).

Having considered the brief, memoranda of law, and record submitted on
appeal, we conclude that oral argument is unnecessary in this case. See Sup.
Ct. R. 18(1). We affirm in part, vacate in part, and remand.

The defendant, Thomas Connelly, appeals the order of the Circuit Court
(Gardner, J.) entering judgment for the plaintiff, Baxter Lake Recreation Area
Association, on its claim for past due assessments, taxes, and costs of
collection, including attorney’s fees. We construe the defendant’s brief to argue
that the trial court erred in approving the plaintiff’s request for attorney’s fees
and other costs of collection arising from: (1) claims against his predecessor-
in-interest, given the court’s finding that the plaintiff failed to prove that the
defendant was personally liable on such claims; and (2) the delay caused by an
apparent conflict of interest on the part of the plaintiff’s attorney. We will not
overturn the trial court’s award of attorney’s fees absent an unsustainable
exercise of discretion. Appeal of Local Gov’t Ctr., 165 N.H. 790, 813 (2014).
Under this standard, the defendant must show that the trial court’s decision
was clearly untenable or unreasonable to the prejudice of his case. Id.

The plaintiff is a campground association that requires its campsite
owners to pay dues, approximately $1,000 annually, for property maintenance
and taxes. The record shows that in 2013, the defendant’s predecessor-in-
interest acquired the subject campsite for $17,488. The defendant acquired
title on February 18, 2016. On that date, there was a balance due of
$1,172.26. Prior to the transfer, the defendant’s predecessor-in-interest
executed a promissory note to the plaintiff in the amount of $1,193.75 and
gave the plaintiff a mortgage to secure the indebtedness. On June 10, 2016,
despite the mortgage and property transfer, the plaintiff brought an action
against the defendant’s predecessor-in-interest, seeking a pre-judgment
attachment against the property in the amount of $2,500. On September 2,
2016, apparently realizing its error, the plaintiff moved to add the defendant as
a party to the case. The court denied the motion.

The plaintiff subsequently filed a new action against the defendant. In
its writ, the plaintiff alleged that, as of February 1, 2017, the defendant was in
arrears on his taxes, assessments, and costs of collection, including attorney’s
fees, in the amount of $3,887. On October 25, 2017, the court held a hearing
on the merits. During the defendant’s cross-examination of the plaintiff’s
representative, the court interrupted the testimony to ask the plaintiff’s
attorney whether he had a conflict of interest in this case. The attorney
explained that, “In the course of my representing the [plaintiff] sometimes I
conduct closings.” He stated that the defendant, “at some point called me and
asked me to prepare a deed conveying the property from [his predecessor-in-
interest] to him. I did that for him, and sent it to him and that was the last I
knew of it.” The court suspended the hearing and, in a November 14, 2017
order, required the plaintiff to submit a legal memorandum to address two
issues: (1) whether the attorney’s involvement with the real estate transaction
between the defendant and his predecessor-in-interest presented a conflict of
interest such that he could not continue to represent the plaintiff in this case;
and (2) the legal basis for the plaintiff’s claim against the defendant for
amounts due from his predecessor-in-interest.

On March 1, 2018, more than two months later, the plaintiff’s new
attorney submitted the requested memorandum, declaring that the conflict
issue “has been resolved” because the prior attorney had withdrawn. On
March 16, 2018, the court, in light of its docket “and the length of time it took
plaintiff to file its memorandum,” scheduled a new hearing on the merits before
a different judge. Following the new hearing, the new judge found the evidence
insufficient to prove that the defendant had assumed personal liability for the
property-related debts of his predecessor-in-interest. The court gave the
plaintiff leave to file a revised statement of past due assessments and costs of
collection consistent with its order. On or about May 3, 2018, the plaintiff
submitted its revised statement, and on May 30, 2018, the trial court, over the
defendant’s objection and without a hearing, entered judgment for the full
amount requested, $11,421.07.

The defendant first argues that the trial court erred in approving the
plaintiff’s request for attorney’s fees and other costs of collection arising from
its claims against his predecessor-in-interest, given the court’s finding that the
plaintiff failed to prove that he was personally liable on such claims. The
plaintiff counters that there was no error because the association’s by-laws and
covenants provide that the person owning the site when the fees and costs
become due is the person liable for them, and that the fees and costs were not
imposed until after the defendant acquired the property. The plaintiff further

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asserts that “substitute counsel had to be brought current with the facts and
theories implicated in the case, including investigation and research into the
type and quantum of evidence by which to prove that [the defendant] had in
fact agreed to assume, or should be deemed to have assumed, or should be
held to vicarious liability for, [his predecessor’s] arrearages.”

We have held that “[a] prevailing party may be awarded attorney’s fees
when that recovery is authorized by statute, an agreement between the parties,
or an established judicial exception to the general rule that precludes recovery
of such fees.” Kessler v. Gleich, 161 N.H. 104, 106 (2010) (quotation omitted).
In this case, however, the plaintiff did not prevail on its claims against the
defendant for the debts of his predecessor-in-interest. Therefore, the defendant
is not liable for the attorney’s fees and other collection costs that the plaintiff
incurred in pursuing these claims. We note that such recovery would be
inconsistent with the trial court’s prior order.

The defendant next argues that the trial court erred in awarding
attorney’s fees and other collection costs arising from the delay caused by the
plaintiff’s attorney’s apparent conflict of interest. “[A]n attorney may not
charge a fee that is unreasonable.” McCabe v. Arcidy, 138 N.H. 20, 29 (1993).
The plaintiff concedes that “the suspension resulted in unavoidable delay and
contributed to the mounting costs of the [plaintiff] to pursue collection of the
arrearages,” but asserts that it is nevertheless reasonable to require the
defendant to pay for the resulting fees and costs because, “[d]espite his
sensitivity to [the attorney’s] potential conflict of interest,” the defendant did
not file a pretrial motion to recuse the attorney. Thus, the plaintiff argues, the
defendant’s “snowballing dues arrearage (and related costs) that accrued while
awaiting the resumption of trial was entirely within his capacity to prevent;
they fell due in the ordinary course during ongoing collection efforts.” At the
outset, we note that the court, not the defendant, raised the apparent conflict
of interest issue. Moreover, we conclude that it is not reasonable to require the
defendant to pay for the additional attorney’s fees and collection costs,
including the memorandum requested by the court, necessitated by the
plaintiff’s retention of an attorney who failed to recognize an apparent conflict
of interest, and who withdrew from the case after the court raised the issue.
See id.

“Where a party prevails on some claims and not others, and the
successful and unsuccessful claims are analytically severable, any fee award
should be reduced to exclude time spent on unsuccessful claims.” Van Der
Stok v. Van Voorhees, 151 N.H. 679, 685 (2005) (quotation omitted). Claims
are analytically severable when they seek different relief. Halifax-American
Energy Company, LLC v. Provider Power, LLC, 170 N.H. 569, 589 (2018).
Based upon this record, we conclude that it is not reasonable to require the
defendant to pay the fees incurred by the plaintiff’s prior attorney or associated
with the delay resulting from that attorney’s apparent conflict of interest. Nor

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is it reasonable to require the defendant to pay attorney’s fees or collection
costs of the plaintiff’s prior suit against his predecessor-in-interest, or for any
claims in this case seeking to impose personal liability upon him for the debts
of his predecessor-in-interest.

We affirm the trial court’s order only to the extent that it imposed taxes
and assessments upon the defendant that first became due after he acquired
the property. We vacate the award of costs and attorney’s fees and remand for
further proceedings consistent with this order, including a determination of the
reasonable attorney’s fees, if any, and other costs of collection relating solely to
the taxes and assessments that first became due after the defendant acquired
the property.

Affirmed in part; vacated in
part; and remanded.

Lynn, C.J., and Hicks, Bassett, Hantz Marconi, and Donovan, JJ.,
concurred.

Eileen Fox,
Clerk

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