Chase Cutts Brigham Neighborhood Association, Inc. & a. v. City of Portsmouth

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2022-0457, Chase Cutts Brigham Neighborhood
Association, Inc. & a. v. City of Portsmouth, the court on May
21, 2024, issued the following order:

The court has reviewed the written arguments and the record submitted
on appeal, has considered the oral arguments of the parties, and has
determined to resolve the case by way of this order. See Sup. Ct. R. 20(2). The
plaintiffs, Chase Cutts Brigham Neighborhood Association, Inc., Marilee Clark,
Hal Clark, Eldon Collymore, Carolyn O’Connor Collymore, Mary Anne Gauthier,
Natasha Karlin, Jason Karlin, Bernice Kowalski-Richards, Edward W.
Richards, and Diane Chalifour, appeal a decision of the Superior Court
(Honigberg, J.) dismissing their complaint requesting declaratory and
injunctive relief against the defendant, the City of Portsmouth (City), on the
ground that the suit is barred by res judicata. We affirm.

I. Background

The record supports the following facts. In 2016, the City proposed a
citywide rezoning initiative to establish three zoning “Gateway Districts.” The
three proposed zoning districts would range from allowing greater density and
larger and taller buildings to allowing less density, lower building heights, and
smaller mixed uses. In August 2017, the City identified several properties on
Chase Drive and Cutts Avenue to be rezoned as part of this initiative. Those
properties included 200 Chase Drive, which is owned by the intervenor, Bethel
Assembly of God, Inc. (the Church), and three residential properties abutting
200 Chase Drive. The City Council approved the Gateway Districts rezoning
initiative in December 2017.

Subsequently, the Church sought approval from the City’s planning
board to subdivide its property and construct a 22-unit apartment building,
which the planning board granted in 2020. All the plaintiffs in the instant
action — except Chalifour — timely appealed that decision to the superior
court (the planning board appeal). In January 2021, the superior court
affirmed the planning board’s decision, and all the present plaintiffs, save
Chalifour, appealed that decision to this court. See Chase Cutts Brigham
Neighborhood Association, Inc. & a. v. City of Portsmouth, No. 2021-0196
(non-precedential order at 1), 2022 WL 1416502 (N.H. Apr. 25, 2022). We
affirmed — our decision became final in June 2022.
 On July 7, 2021, while that appeal was pending before this court, the
plaintiffs filed in superior court the instant action seeking declaratory and
injunctive relief against the City. In their complaint, the plaintiffs allege that
the zoning initiative approved in 2017 was void because they were not given
proper notice of the public hearings leading to its approval, and that the
rezoning of 200 Chase Drive and abutting properties constituted illegal spot
zoning. The plaintiffs sought an injunction preventing the City from issuing a
final construction permit to the Church for its proposed apartment building.
The trial court ultimately dismissed the action, concluding that under the
doctrine of res judicata, the plaintiffs’ claims were barred by the January 2021
decision of the superior court that affirmed the 2020 planning board decision
approving the Church’s application to subdivide its property and construct the
apartment building. This appeal followed.

II. Analysis

Generally, when reviewing a trial court’s ruling on a motion to dismiss,
we consider whether the plaintiffs’ allegations are reasonably susceptible of a
construction that would permit recovery. Graham v. Eurosim Constr., 175
N.H. 633, 636 (2023). However, when a litigant moves to dismiss based
exclusively upon res judicata, which is an affirmative defense, the movant —
here, the City — bears the burden of proving its application. See id. at 636-37.
Because the trial court determined that res judicata applied as a matter of law,
our review is de novo. Id. at 637.

Res judicata is a judicial doctrine that prevents a losing party from
obtaining a second review of a claim after having failed to obtain relief in its
first attempt. It is rooted in a policy that those who have litigated a dispute are
bound by the results of the first litigation and that issues that were or could
have been resolved in the first case are settled as between the parties. See
Christian Camps & Conferences v. Town of Alton, 118 N.H. 351, 353-54 (1978);
Baldwin v. Traveling Men’s Assn., 283 U.S. 522, 525 (1931). The doctrine
applies when three elements are met: (1) the parties must be the same or in
privity with one another; (2) the same cause of action must be before the court
in both instances; and (3) a final judgment on the merits must have been
rendered in the first action. Kalil v. Town of Dummer Zoning Bd. of
Adjustment, 159 N.H. 725, 730 (2010). The plaintiffs challenge the trial court’s
rulings on elements one and two.

We begin by considering whether the parties were the same or in privity
with one another. It is undisputed that all of the parties in the instant action,
other than plaintiff Chalifour, are the same parties as in the previous action.
The issue is whether Chalifour is in privity with the plaintiffs from the first
action.

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 Here, the trial court stated that Chalifour is similarly situated to the
plaintiffs in the previous action “in every imaginable way: she resides in the
same neighborhood, has the same quarrels with the City’s actions, and like
many of the other Plaintiffs, took part in the planning board process.” Her
claims, as the trial court noted, “are not unique as compared to the other
plaintiffs.”

While the term “privity” includes a variety of pre-existing substantive
legal relationships such as that between a property owner and the property
owner’s successor in interest, Sleeper v. Hoban Family P’ship, 157 N.H. 530,
534 (2008), “we have used the term more broadly to refer to a functional
relationship, in which, at a minimum, the interests of the non-party were in
fact represented and protected in the prior litigation,” id. (quotation omitted).
Having reviewed the record before us, we agree with the trial court’s conclusion
that, in this case, “a ‘functional relationship’ exists between Plaintiff Chalifour
and the plaintiffs in the [previous litigation], because her interests were in fact
represented and protected in the prior litigation.” (Quotation omitted.) Thus,
the trial court did not err by concluding that Chalifour was in privity with the
plaintiffs in the previous litigation.

We next address whether the instant suit advances the “same cause of
action” as the prior litigation. A “cause of action” is “the underlying right that
is preserved by bringing a suit or action.” Finn v. Ballentine Partners, LLC,
169 N.H. 128, 147 (2016) (quotation omitted). It encompasses “all theories on
which relief could be claimed on the basis of the factual transaction in
question.” Sleeper, 157 N.H. at 534 (quotation omitted). Our primary inquiry
“in determining whether two actions are the same cause of action for the
purpose of applying res judicata” is to “consider whether the alleged causes of
action arise out of the same transaction or occurrence.” Id. (quotation and
brackets omitted). We have relied on the factors identified in the Restatement
(Second) of Judgments § 24 to guide our determination as to whether the facts
constitute a single transaction or occurrence. See Finn, 169 N.H. at 147-48.
The Restatement provides that such a determination should be made
“pragmatically” by “giving weight to such considerations as whether the facts
are related in time, space, origin, or motivation, whether they form a
convenient trial unit, and whether their treatment as a unit conforms to the
parties’ expectations or business understanding or usage.” Restatement
(Second) of Judgments § 24(2), at 196 (1982).

As we have long recognized, res judicata rests, inter alia, “upon
considerations of . . . public policy favoring the establishment of certainty in
legal relations.” Christian Camps & Conferences, 118 N.H. at 354. “Whether a
claim is barred by res judicata is determined on a case by case basis.” Hallisey
v. DECA Corp., 140 N.H. 443, 445 (1995).

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 Viewed pragmatically, the two suits here involve the same cause of
action. As the trial court concluded, the plaintiffs’ allegations “make clear that
the crux of their claims seeks to undo the [planning] board’s approval of the
Church’s proposed 22-unit apartment building.” This objective evidence of the
plaintiffs’ motivation supports applying the doctrine of res judicata. The trial
court further noted that the plaintiffs were aware of the claims in the instant
action prior to appealing the planning board’s approval of the Church’s
proposal, and concluded that those claims could, and should, have been
brought when the plaintiffs appealed the planning board’s approval of the
Church’s proposal. Thus, consideration of all of the plaintiffs’ claims was
possible in the superior court, where they could have formed a convenient trial
unit.

Application of the doctrine of res judicata on the facts of this case
furthers the public policy that underlies the doctrine — the establishment of
certainty in legal relations. Promoting certainty applies with special force in
this area of the law. In 2019, the legislature declared that “[a]n adequate
supply of housing that is affordable to a range of incomes is essential to New
Hampshire’s economic and community development goals. Laws 2019,
346:259, I. The legislature further found that among the factors that inhibit
the ability to meet the demand for new housing are practices that impose costly
delays as well as the costs of litigation. Laws 2019, 346:259, V. This case
amply illustrates those concerns: the planning board approved the Church’s
proposal in February 2020, over four years ago. The appeals from that
decision were concluded in June 2022, nearly two years ago. Further delay
and further litigation seeking to undo the planning board’s approval of the
proposed apartment building based upon claims that were known, or should
have been known, to the plaintiffs and that could have been brought in the
initial litigation will undermine the certainty that our judicial system should
strive to promote. In sum, res judicata is a judicial doctrine to be applied, on a
case-by-case basis, pragmatically, so as to further the public policy favoring
the establishment of certainty in legal relations. Because the trial court did not
err by applying that doctrine here, we affirm its decision.

Affirmed.

MACDONALD, C.J., and DONOVAN and COUNTWAY, JJ., concurred;
BASSETT and HANTZ MARCONI, JJ., dissented; HICKS, J., sat for oral
argument but did not participate in the final vote, see N.H. CONST. pt. II, art.
78.

Timothy A. Gudas,
Clerk

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 BASSETT and HANTZ MARCONI, JJ., dissenting. Because we believe
that the present suit does not constitute the same cause of action as the prior
suit, we would reverse the trial court’s ruling and allow the plaintiffs’ suit to
proceed. We therefore respectfully dissent.

We agree with the law of res judicata as set forth by the majority, see,
e.g., Kalil v. Town of Dummer Zoning Bd. of Adjustment, 159 N.H. 725, 730
(2010), and with its articulation of the relevant factors we should consider
when determining whether two suits constitute the same cause of action:
whether the facts underlying each action “are related in time, space, origin, or
motivation, whether they form a convenient trial unit, and whether their
treatment as a unit conforms to the parties’ expectations or business
understanding or usage,” Restatement (Second) of Judgments § 24(2), at 196
(1982); see also Finn v. Ballentine Partners, LLC, 169 N.H. 128, 147-48 (2016).
We also agree with the majority that the plaintiffs’ motivation in pursuing this
suit is the same as the motivation of the planning board appeal: to prevent
construction of the Church’s proposed apartment building. However, the
motivation of the suit is but one factor to be considered, see Restatement
(Second) of Judgments § 24(2), at 196, and we disagree with how the majority
applies the remaining Restatement factors to the facts of this case. Upon
considering the relevant factors, we would conclude that this suit does not
“arise out of the same transaction or occurrence” as the prior litigation. Finn,
169 N.H. at 147.

The two suits do not originate from the same set of facts. The plaintiffs’
current claim that the citywide rezoning initiative should be invalidated arises
from the factual allegation that, in August 2017, the City failed to provide
written notice to affected property owners regarding the public hearings on the
rezoning initiative that was later approved in December 2017. Similarly, the
plaintiffs’ spot zoning claim arises out of the City’s 2017 approval of the
rezoning initiative. By contrast, the planning board appeal arose out of the
planning board’s approval in February 2020 of the Church’s proposed project.
Specifically, the first suit challenged the planning board’s decisions “to grant
conditional use permits and preliminary and final subdivision approval to the
[Church].” Chase Cutts Brigham Neighborhood Association, Inc. & a. v. City of
Portsmouth, No. 2021-0196 (non-precedential order at 1), 2022 WL 1416502
(N.H. Apr. 25, 2022). In short, the two suits challenge two different decisions
by two distinct municipal bodies: the planning board’s decision to approve a
discrete project on one hand, and the process utilized by the City Council to
approve a citywide rezoning initiative on the other hand. See Goffin v. Tofte, 146 N.H. 415, 417 (2001) (holding two suits did not arise from same factual
transaction because first suit arose out of contractual relationship between the
parties and second suit originated from defendant-contractor’s negligent
conduct towards plaintiff while working at her home pursuant to that contract).
Further, the facts underlying each suit are not temporally related — the
conduct giving rise to each suit occurred over two years apart.

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 Finally, although we share the majority’s concern about ensuring the
establishment of certainty in legal relations, we do not think that treating these
two suits as arising out of distinct factual transactions would be contrary to
“the parties’ expectations or business understanding or usage.” Restatement
(Second) of Judgments § 24(2), at 196. In the instant suit, the plaintiffs assert
their statutory right to notice of public hearings on the Gateway Districts
rezoning initiative. See RSA 675:7, I-a (Supp. 2023) (requiring notice of public
hearings regarding proposed zoning ordinance amendment to be sent by first
class mail to affected property owners under certain circumstances). Such a
challenge to an ordinance amendment may be brought anytime within five
years of the enactment. See RSA 31:126 (2019) (“Any claim that municipal
legislation is invalid for failure to follow statutory enactment procedure . . . may
be asserted within 5 years of the enactment of the legislation and not
afterward.”). Given the five-year period provided for in RSA 31:126, the City —
and any private parties relying upon the ordinance terms — were on notice that
the rezoning initiative was subject to challenge based upon any procedural
infirmities by the plaintiffs or other interested parties for five years after its
enactment in December 2017. See Blue Jay Realty Trust v. City of Franklin,
132 N.H. 502, 512 (1989) (“[A]s long as [certain individuals] can collaterally
attack the validity of the ordinance, towns and parties to real estate
transactions will have to live with the possibility of supposedly unforeseeable
attacks.”).

In sum, we believe that a consideration of the relevant Restatement
factors supports the conclusion that the two suits arose out of distinct factual
transactions and therefore constitute different causes of action. See Cook v.
Sullivan, 149 N.H. 774, 777 (2003) (application of res judicata is “determined
on a case-by-case basis”). Because it is the City’s burden to prove that all
three res judicata elements have been met, see Graham v. Eurosim Constr., 175 N.H. 633, 636-37 (2023), we need not consider the privity issue. We would
conclude that the instant action is not barred by res judicata and reverse the
trial court’s dismissal of the suit. Accordingly, we respectfully dissent.

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