Foy Insurance Group, Inc. v. 101 Ocean Blvd., LLC

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2021-0500, Foy Insurance Group, Inc. v. 101
Ocean Blvd., LLC, the court on June 17, 2022, issued the
following order:

Having considered the brief and reply brief filed by the plaintiff, Foy
Insurance Group, Inc. (Foy), the memorandum of law filed by the defendant,
101 Ocean Blvd., LLC (Ocean), and the record submitted on appeal, we
conclude that oral argument is unnecessary in this case. See Sup. Ct. R. 18(1).
Foy appeals an order of the Superior Court (Messer, J.) denying Foy’s petition
for a new trial. We affirm.

The relevant facts follow. In November 2018, the Superior Court (Brown,
J.) held a jury trial on Ocean’s claim that, because of the parties’ special
relationship, Foy “had a duty to inform Ocean that it lacked sufficient law and
ordinance coverage” to rebuild its hotel to code after a 2015 fire, and that Foy
negligently failed to so inform Ocean. 101 Ocean Blvd., LLC v. Foy Ins. Grp.,
Inc., 174 N.H. 130, 135 (2021). The jury found in favor of Ocean, and Foy
appealed the verdict. See id. at 133.

One of the issues on appeal concerned the admissibility of “Exhibit 27.”
Id. at 136. Exhibit 27 is a “commercial lines checklist” that was used by a
different insurance agency, the Cross Agency, with a different insured, Cronin,
Bisson & Zalinsky, PC (the law firm representing Ocean). Exhibit 27 listed
several types of insurance coverage and, for two types of coverage, “increased
cost of construction” and “building ordinance or law,” the phrase “Higher limits
available” appeared in the comments section. (Capitalization omitted.)

At trial, Ocean used Exhibit 27 to cross-examine Foy’s expert. Id. Ocean
did not use Exhibit 27 to examine its own expert witness. Id. Foy’s expert
testified that the checklist was a mechanism to discuss available coverage with
an insured, but was not “a good way to go about examining specific coverages.”
Id. (quotations omitted). The expert testified that he did not use a similar
checklist and that the applicable standard of care did not require insurance
agents to maintain such a checklist. Id. Ocean also used Exhibit 27 to
question one of Foy’s owners, who testified that he does not use a similar form.
Id.

Exhibit 27 was admitted as a full exhibit over Foy’s objection. Id. On
appeal, Foy argued that Exhibit 27 was improperly admitted because it was
“irrelevant, improper hearsay, and highly prejudicial.” Id. (quotation omitted).
We were unpersuaded that the trial court had unsustainably exercised its
discretion by admitting the exhibit. Id.

After trial, Foy learned that Exhibit 27 may have been incomplete. Foy
was allowed to conduct limited post-trial discovery on that issue, and Foy
learned that the checklist as originally mailed to Ocean’s attorney had a third
page that had not been part of Exhibit 27. The third page contained the
following disclaimer:

THIS COVERAGE CHECKLIST DOES NOT LIST ALL POSSIBLE
COVERAGE THAT IS OR MAY BE AVAILABLE. IF YOU HAVE ANY
QUESTIONS OR CONCERNS THEY SHOULD BE DIRECTED TO
OUR AGENCY.

*Building limits are estimates only and were arrived at based on
information provided by the policyholder . . . . The actual cost to
rebuild the structure may exceed the building limit, especially in
circumstances where a catastrophic event has disrupted the
normal supply of materials, labor, and resources. The agency
makes no assurances or guarantees that the building limits
provided will be adequate to rebuild the structure. If there is
doubt about the adequacy of building limits, the policyholder
should obtain a professional appraiser or obtain the services of a
qualified company or builder who is able to provide replacement
cost estimates.

Following its discovery of the third page, Foy filed the instant petition for
a new trial pursuant to RSA 526:1. See RSA 526:1 (2021). In its petition, Foy
alleged that the missing third page demonstrated that Exhibit 27 should have
been excluded at trial as irrelevant and prejudicial. Alternatively, Foy averred
that even if Exhibit 27 with the missing third page were admissible, a new trial
was warranted because: (1) Foy was not at fault for failing to discover the third
page earlier: (2) the third page is relevant, admissible, and material to the
merits of the parties’ dispute, and was not cumulative; (3) if the third page were
admitted, a different result in the trial is probable; and (4) the third page
demonstrates that Exhibit 27 was false and misleading.

Ocean moved to dismiss Foy’s petition for a new trial, arguing that it
used Exhibit 27 at trial “only [as] any example of how an agent could have used
a form to discuss coverage with a potential client” and thus had no relevance to
the main issue at trial, which was whether the parties had a special
relationship. Ocean observed that Foy’s own expert testified that “if the jury
concluded” that the parties had a special relationship, “then [Foy] would have
breached the standard of care.” (Quotation omitted).

2
 The trial court granted Ocean’s motion to dismiss, finding that, as used
at trial, “it was clear that the checklist was not created in connection with . . .
Ocean’s policy and was not intended to establish the availability of any type of
coverage at issue in the case. Rather, Attorney Cronin’s questions indicate that
he was proposing it as a mechanism to discuss available coverage with an
insured.” The court noted that Foy’s expert “clearly testified that neither he
nor his agents universally use checklists, that the use of such checklists was
not a requirement of the standard of care, and that the use of Exhibit 27 would
not be a good method of examining specific coverages.”

The court reasoned that “[b]ecause Exhibit 27 had no direct connection
to the policy issued by Foy to . . . Ocean and was not used as a substantive
exhibit to demonstrate the availability of coverage under . . . Ocean’s policy,
any disclaimers about the accuracy of the information contained on Exhibit 27
[are] immaterial.” The court observed that, even without the third page,
Exhibit 27 included a disclaimer on its first page that provided: “This checklist
is designed to give you an overview of the current coverages carried along with
recommended coverages. Refer to your actual policies for details on coverages
and conditions.” The court concluded that given that there was no evidence
that Exhibit 27 represented the standard of care applicable to insurance agents
and had no connection to the parties or policy at issue, the fact that Exhibit 27
was missing its third page “could not have misled the jury.” The court
determined that, because the third page is not material to the merits of the
parties’ dispute, Foy was not entitled to a new trial. Foy filed a motion for
reconsideration, which the trial court denied. This appeal followed.

We first discuss our standard of review. The parties urge us to apply our
usual standard for reviewing a trial court grant of a motion to dismiss. Under
that standard, we assume that the facts alleged in the petition are true and
construe all reasonable inferences in the light most favorable to the plaintiff.
See Automated Transactions, LLC v. Am. Bankers Ass’n, 172 N.H. 528, 532
(2019). We need not assume the truth of statements that are merely
conclusions of law. Id. We then engage in a threshold inquiry that tests the
facts in the petition against the applicable law, and if the allegations constitute
a basis for legal relief, we must hold that it was improper to grant the motion to
dismiss. Id. However, the trial court in this case did not merely assume the
truth of the facts Foy alleged in its petition. Rather, the court tested the
alleged facts against the transcripts of the parties’ prior trial. Under these
circumstances, we treat the trial court’s order as an order on the merits of
Foy’s petition for a new trial and review it accordingly.

RSA 526:1 provides: “A new trial may be granted in any case when
through accident, mistake or misfortune justice has not been done and a
further hearing would be equitable.” “Whether accident, mistake, or
misfortune occurred is determined by the trier of fact, and its finding will be
conclusive unless it is unsupported by the evidence.” In the Matter of

3
Birmingham & Birmingham, 154 N.H. 51, 56 (2006). We will not disturb the
trial court’s ruling absent an unsustainable exercise of discretion. Id.

Before addressing Foy’s appellate arguments, we note that, as Ocean
aptly observes, although the trial court relied upon the transcripts from the
parties’ jury trial, Foy did not include them in the record submitted on appeal.
Accordingly, as Ocean contends, we presume that those transcripts support
the trial court’s factual findings regarding what occurred at trial. See Bean v.
Red Oak Prop. Mgmt., 151 N.H. 248, 250 (2004).

On appeal, Foy first argues that a new trial is warranted because Exhibit
27 “should have been excluded as irrelevant and prejudicial.” We rejected
Foy’s identical argument in the earlier appeal, see 101 Ocean Blvd., LLC, 174
N.H. at 136, and have no grounds to reconsider that decision in this appeal.

Foy next contends that it is entitled to a new trial because Foy has met
our established test for a new trial based upon newly-discovered evidence.
Newly-discovered evidence may justify the granting of a new trial under RSA
526:1. State v. Etienne, 163 N.H. 57, 96 (2011). To obtain a new trial based
upon newly-discovered evidence, the moving party generally must establish
that: (1) the moving party was not at fault for not discovering the evidence at
the prior trial; (2) the evidence is admissible, material to the merits of the case,
and not cumulative; and (3) the evidence is of such a character that a different
result will probably be reached upon a new trial. Id.; Rautenberg v. Munnis, 109 N.H. 25, 26 (1968).

We have recognized a “single exception” to the requirement that the
moving party establish the likelihood of a different result. Barton v. Plaisted, 109 N.H. 428, 432 (1969). Under this exception, when a party testifies falsely
and the false testimony was dishonest and concerned a material issue, “the
verdict will be set aside even if it is not found that a new trial will probably
produce a different result.” Rasquin v. Cohen, 92 N.H. 440, 442 (1943). In
order for this exception to apply, the testimony must be “of such a dishonest
nature as to strongly suggest an attempt to perpetrate a fraud on the trial
court.” Sylvain v. Estate of Sylvain, 117 N.H. 546, 548-49 (1977). The
exception applies only to the testimony of a party in the case. Cormier v.
Stevens, 107 N.H. 66, 68 (1966); see Barton, 109 N.H. at 432-33 (declining to
apply the exception to the testimony of an expert witness).

“Whether newly discovered evidence requires a new trial is a question of
fact for the trial court.” State v. Breest, 169 N.H. 640, 653 (2017) (quotation
omitted). “We will sustain the trial court’s decision unless its conclusion is
clearly unreasonable.” Id. (quotation omitted); see Rautenberg, 109 N.H. at 26
(“The issue presented by [a] motion [for a new trial based upon newly-
discovered evidence] is one of fact for the Trial Court, and its decision is
binding in this court unless it can be said to conclusively appear that a

4
different result is probable, so that the Trial Court’s conclusion is clearly
unreasonable.”).

We cannot conclude that the trial court’s denial of Foy’s petition for a
new trial based upon its post-trial discovery of the missing third page was
“clearly unreasonable.” Rautenberg, 109 N.H. at 26. As the trial court
intimated, the disclaimer on the missing third page is cumulative of the
disclaimer on the first page of Exhibit 27. The missing third page informs an
insured that the checklist does not list all possible coverage that could be
available. The disclaimer on the first page of Exhibit 27 similarly warns an
insured that the checklist provides only an overview of the insured’s current
and recommended coverages.

In addition, as the trial court found, the missing third page does not
contain information material to the issues at trial. As the trial court found, “it
was never established that such a checklist was used or should have been
used in Foy’s relationship with . . . Ocean.” Indeed, the only evidence before
the jury was that the checklist did not establish the requisite standard of care.
And, Ocean “did not attempt to use [the checklist] to establish the availability
of coverage under the policy issued by Foy. Rather, trial counsel presented the
[checklist] as a possible mechanism to discuss available coverage with an
insured.” Although Exhibit 27 refers to “building ordinance or law” coverage,
the missing disclaimer adds nothing to the triable issues in the case. Under
these circumstances, we cannot find that the trial court’s decision to deny
Foy’s petition for a new trial was “clearly unreasonable.” Id.

Foy next contends that the trial court erred when it ruled that Foy was
not entitled to a new trial even if it assumed that Ocean’s trial counsel acted
with “nefarious intent” by omitting the third page of Exhibit 27. We find no
error. At most, counsel’s supposed “nefarious intent” would relieve Foy of the
obligation to prove that, if the case were retried with the newly-discovered
evidence, the jury would probably reach a different result; it would not relieve
Foy from the requirement of establishing that the missing third page was
admissible, material to the merits of the case, and was not cumulative.
Rautenberg, 109 N.H. at 26. For all of the above reasons, we uphold the trial
court’s denial of Foy’s petition for a new trial.

Affirmed.

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

Timothy A. Gudas,
Clerk

5