Michael L. McLaughlin v. J. Martin McLaughlin

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2024-0254, Michael L. McLaughlin v. J. Martin
McLaughlin, the court on October 7, 2025, 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(3). The
defendant, J. Martin McLaughlin, appeals an order of the Superior Court
(Colburn, J.) imposing a constructive trust in favor of the plaintiff, Michael L.
McLaughlin, over fifty percent of the shares of McLaughlin Moving Company,
Inc. (MMCI or the company). On appeal, the defendant argues that the trial
court erred in determining that: (1) clear and convincing evidence supported
the imposition of the constructive trust; and (2) the statute of limitations did
not bar the plaintiff’s action. See RSA 508:4 (2010). We affirm.

I. Facts

The trial court found, or the record otherwise supports, the following
facts. The plaintiff and the defendant are brothers. Their grandfather started
a moving company during the 1930s. John H. McLaughlin (John H.) — the
father of the plaintiff and defendant — became the owner of this moving
company after the grandfather passed away.

Then, while the parties were children, John H. acquired several other
moving-related companies. In the 1980s, John H. transferred ownership of
these companies to the plaintiff and the defendant. Some of these companies
were consolidated into a larger company called McLaughlin Transportation
Systems, Inc. (MTSI). The plaintiff and the defendant jointly own MTSI.

This case concerns a dispute between the plaintiff and the defendant
over the ownership of MMCI, another family company. In 1973, the defendant
signed a purchase and sale agreement to acquire this Portsmouth-based
company from third-party sellers.

The plaintiff, however, recalled that he, the defendant, and John H.
entered into an oral agreement prior to the purchase. Pursuant to this
agreement, John H. purchased the company for his sons, placed ownership
under the defendant’s name because the plaintiff was a minor at the time, and
the defendant agreed to distribute the plaintiff’s shares at some point in the
future.

During the following decades, the companies remained separate on paper
but operated as a single entity. The plaintiff managed the operations side of
both companies, and the defendant managed the financial aspects. The
companies shared employees, insurance policies, and technology and
advertising services. Based upon this operating model and the oral agreement,
the plaintiff believed that he owned fifty percent of MMCI. In 2019, however, a
friend informed him that the defendant claimed one hundred percent
ownership of MMCI.

In July 2020, the plaintiff filed a complaint in superior court against the
defendant claiming, among other things, that the defendant’s retention of one
hundred percent of the company constituted unjust enrichment and seeking
the imposition of a constructive trust over fifty percent of MMCI’s stock. The
defendant moved to dismiss all claims. As relevant to this appeal, the trial
court denied the motion with respect to the plaintiff’s claim seeking the
imposition of a constructive trust. The defendant subsequently moved for
summary judgment and later for partial summary judgment. The trial court
denied both motions.

In November 2023, the trial court held an eight-day trial and empaneled
a jury to issue an advisory verdict with respect to, as relevant here, the unjust
enrichment claim that sought a constructive trust as a remedy. See RSA
491:16 (2010). The jury unanimously issued an advisory verdict in favor of the
plaintiff on this claim. The plaintiff filed a motion to adopt the advisory jury
verdict, while the defendant moved to set it aside.

The trial court issued an order imposing a constructive trust in favor of
the plaintiff over fifty percent of the company’s shares in April 2024.
Specifically, the trial court ruled that the plaintiff established the three
necessary elements of a constructive trust by clear and convincing evidence.
The trial court further ruled that no statute of limitations defense applied
because the plaintiff had proven by a preponderance of the evidence that he did
not discover or have the reasonable opportunity to discover the defendant’s
claim of complete ownership of MMCI until 2019.

The defendant subsequently filed a motion for partial reconsideration, to
which the plaintiff objected. The defendant also filed a motion for clarification
and, alternatively, to stay the order. Before the court ruled on these motions,
the defendant filed an appeal with this court. The trial court subsequently
denied the motion for partial reconsideration and granted the motion to stay
the order during the pendency of the appeal.

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 II. Analysis

A. Constructive Trust

We first address the defendant’s argument that the trial court erred by
finding that clear and convincing evidence supported the imposition of a
constructive trust in favor of the plaintiff over fifty percent of MMCI’s shares.
We review sufficiency of the evidence claims as a matter of law. Salisbury v.
Lowe, 140 N.H. 82, 83 (1995). We will uphold the findings and rulings of the
trial court unless they are lacking in evidentiary support or tainted by error of
law. In re Estate of Couture, 166 N.H. 101, 113 (2014).

It is within the trier of fact’s province to determine the weight to be
accorded the evidence presented. Salisbury, 140 N.H. at 83. Inquiry into the
weight of evidence is treated as a matter of fact. Id. We view the evidence in
the light most favorable to the plaintiff. In re Estate of Couture, 166 N.H. at
113. Our task is to determine whether a reasonable person could reach the
same conclusion as the trial court on the basis of the evidence presented. See
Shaka v. Shaka, 120 N.H. 780, 782 (1980).

No rigid requirements exist for imposing a constructive trust. Elter-
Nodvin v. Nodvin, 163 N.H. 678, 681 (2012). Rather, a constructive trust may
be imposed when clear and convincing evidence shows that a confidential
relationship existed between two people, that one of them transferred property
to the other, and that the person receiving the property would be unjustly
enriched by retaining the property, regardless of whether the person obtained
the property honestly. Id. The principle rests upon the doctrine that
restitution will be compelled to prevent unjust enrichment. Patey v. Peaslee, 101 N.H. 26, 29 (1957). On appeal, the parties’ dispute focuses on the trial
court’s findings and rulings with respect to the second and third elements. We
address these in turn.

1. The Oral Agreement

First, we consider whether the trial court correctly determined that clear
and convincing evidence established that John H. transferred property to the
plaintiff and defendant by entering into an oral agreement to purchase MMCI
for them with the intent that the defendant would temporarily reserve fifty
percent of the shares of MMCI to be distributed to the plaintiff in the future.
The defendant asserts that the record contained insufficient evidence to
support the trial court’s finding that the oral agreement existed. After
reviewing all the evidence in the record, we disagree.

In its order, the trial court determined that both direct evidence and
“significant circumstantial evidence” supported the existence of the agreement.
The trial court found that the “plaintiff credibly testified that in 1973, when he

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was seventeen years old and the defendant was twenty years old, they had a
conversation with John H.” at their dinner table in which “John H. said he ‘was
going to be buying [MMCI]’ and would put it under the plaintiff and defendant’s
ownership” but “couldn’t put it under [the plaintiff’s] name at first because [he]
was a minor.” Additionally, the trial court credited the plaintiff’s testimony
that John H. — during this dinner conversation — said that he wanted to place
ownership under the parties’ names rather than his own to isolate the effects of
labor disputes, mitigate general liability concerns, and expand the business’s
operating authority.

The trial court also credited the testimony of several long-term employees
that they understood that MMCI was owned by the plaintiff and the defendant.
For example, the McLaughlins’ long-time bookkeeper — who worked for the
companies for over fifty years — testified at trial that she believed that MMCI
was “owned by the McLaughlins together.” Additionally, the certified public
accountant who prepared corporate tax returns for the McLaughlins testified
that she and her firm believed that the defendant and the plaintiff equally
owned the company. She further testified that the defendant’s claim that he
did not share ownership with the plaintiff led her firm — which had provided
services to the McLaughlin companies for several decades — to terminate its
relationship with them. The testimony of these witnesses regarding the shared
ownership of MMCI is consistent with the terms of the oral agreement and
thereby supports its existence.

Evidence in the record about the McLaughlin Group, a holding company
formed by the McLaughlins in the 1980s, further supported the existence of the
oral agreement whereby the defendant agreed to share ownership of MMCI with
the plaintiff. John H.’s attorney testified that the McLaughlin Group was
formed to own all of the businesses owned by the family, including MMCI, and
to ensure these assets were distributed equally to the plaintiff and defendant.
The plaintiff and the defendant owned the McLaughlin Group in equal shares.
The defendant attended the planning meetings and at no point asserted that he
owned MMCI independently and did not want that company in the McLaughlin
Group. In fact, he sent out a memorandum to company employees after the
formation of the McLaughlin Group that stated: “[The] McLaughlin Group was
formed as a holding company and owns McLaughlin Moving Company, Inc.”
(Emphasis added.) The evidence of the defendant’s endorsement of the
McLaughlin Group’s purpose and ownership structure supports that the
defendant signed the purchase and sale agreement subject to the oral
agreement to eventually transfer fifty percent of the shares to the plaintiff.

The defendant nonetheless argues that the trial court erred by crediting
the plaintiff’s testimony over the “mountain of concrete, corporate evidence
supporting [the defendant’s] claim of sole ownership.” The evidence in the
record regarding the McLaughlins’ record-keeping practices, however, supports
the trial court’s determination that “these facts do not necessarily refute the

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existence of the oral agreement or negate the credibility of the plaintiff’s
testimony.” Specifically, Kenneth McLaughlin — John H.’s brother — testified
that John H. was “[s]uccessful, yes. Meticulous, not necessarily so.” Further,
the plaintiff testified that he asked the defendant to “fix[] . . . [the] paperwork, if
it’s not the right way” upon learning that the defendant — contrary to the
terms of the oral agreement — claimed to independently own the company.
Viewed in the light most favorable to the plaintiff, the record supports the trial
court’s conclusion that the corporate records were not consistent with the oral
agreement as a result of poor record-keeping practices and not, as the
defendant asserts, because of the absence of any such agreement.

Contrary to the defendant’s argument, we conclude that the trial court
did not err in finding that the evidence in the record satisfies the clear and
convincing evidence standard. Cf. Salisbury, 140 N.H. at 82-84 (holding that
the trial court’s determination of the credibility of the plaintiff’s testimony,
despite conflicting testimony and documentary evidence, satisfied the clear and
convincing evidence standard and upholding trial court’s imposition of a
constructive trust over stock shares). Here, our review of the record supports
the conclusion that the trial court acted reasonably when resolving the
conflicts between the parties’ testimony in favor of the plaintiff, see Drucker’s
Case, 133 N.H. 326, 331 (1990), and determining the weight to be given to the
corporate, financial, and other records. See Salisbury, 140 N.H. at 83-84.
Accordingly, we conclude that there is sufficient evidence in the record to
support the trial court’s determination that the oral agreement existed.

2. Unjust Enrichment

Next, we address the defendant’s challenge to the trial court’s imposition
of a constructive trust under the unjust enrichment element of its analysis.
More specifically, the defendant argues that the trial court’s analysis is flawed
because its finding that permitting the defendant to retain complete ownership
of the company would be unconscionable is not supported by case law or
evidence. The defendant contends that unconscionability requires that the
parties have grossly unequal bargaining power, and no such dynamic existed
here. We disagree.

The equitable principle of imposing a constructive trust rests upon the
rationale that restitution will be compelled to prevent unjust enrichment.
Lamkin v. Hill, 120 N.H. 547, 551 (1980). The doctrine of unjust enrichment is
based upon the principle that one shall not be allowed to profit or enrich
himself at the expense of another contrary to equity. Estate of Mortner v.
Thompson, 170 N.H. 625, 631 (2018). To state a claim, a plaintiff must
sufficiently allege that the defendant was enriched at the plaintiff’s expense
through either: (1) wrongful acts; or (2) passive acceptance of a benefit that
would be unconscionable to retain. Id.; see In re Estate of Couture, 166 N.H.

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at 112 (setting forth the unjust enrichment inquiry in the constructive trust
context).

To determine whether the defendant would be unjustly enriched, the trial
court relied upon evidence establishing that the plaintiff invested significant
time and labor into operating and growing MMCI. Specifically, at trial, the
plaintiff testified that he “worked for [MMCI] for 50 years . . . knowing and
understanding that [he] was 50-percent owner of the company.” See Clooney
v. Clooney, 118 N.H. 754, 758 (1978) (plaintiff’s financial contributions to real
property — made based upon her belief that she owned such property —
showed evidence of unjust enrichment). The trial court also relied on
testimony establishing that the defendant passively accepted labor and
resources from MTSI for the past fifty years at a reduced rate. Specifically, the
long-term bookkeeper for the McLaughlins testified that the low rates charged
to MMCI for services and resources were based, in part, upon the
understanding that the plaintiff and the defendant jointly owned that company.
This testimony supports that the defendant’s passive acceptance of these
reduced rates over the course of several decades without distributing the
plaintiff’s shares to him constituted “a benefit that would be unconscionable to
retain.”

The evidence in the record about the terms of the oral agreement adds
further support to the trial court’s finding that the defendant would be unjustly
enriched if he retained one hundred percent ownership of the company. As we
previously observed, the record supports the trial court’s conclusion that John
H. purchased MMCI for the parties, subject to the oral agreement that entitled
both the plaintiff and defendant to fifty percent ownership of the company. See
Clapp v. Goffstown Sch. Dist., 159 N.H. 206, 211 (2009) (observing that
“[u]njust enrichment may be available to contracting parties where the contract
was breached, rescinded, or otherwise made invalid”); cf. Cadle Co. v.
Bourgeois, 149 N.H. 411, 420 (2003) (finding no unjust enrichment in a claim
for constructive trust where the party retained funds that she collected in
accordance with enforcing the terms of a loan agreement). The record supports
the conclusion that the defendant’s retention of one hundred percent
ownership of MMCI exceeded his allocated shares under the agreement at the
plaintiff’s expense, thereby supporting the trial court’s finding of unjust
enrichment.

Contrary to the defendant’s assertion, we do not require a finding of
grossly unequal bargaining power between parties to render retention of
property unconscionable in the unjust enrichment context. See Clooney, 118
N.H. at 758; Milne v. Burlington Homes, Inc., 117 N.H. 813, 816 (1977); see
also Salisbury, 140 N.H. at 83-84. Adopting such a rigid definition of
unconscionability would be inconsistent with the court’s “broad and flexible
equitable powers which allow [the court] to shape and adjust the precise relief
to the requirements of the particular situation,” Chase v. Ameriquest Mortgage

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Co., 155 N.H. 19, 24 (2007) (quotation omitted), that underlie the constructive
trust remedy. See In re Estate of Couture, 166 N.H. at 112-13. Indeed, we
have previously observed that “[t]he specific instances in which equity imposes
a constructive trust are numberless, as numberless as the modes by which
property may be obtained through bad faith and unconscientious acts.” Id.
(quotation omitted). Accordingly, we conclude that the trial court’s
determination that the defendant would be unjustly enriched by retaining total
ownership over MMCI is supported by the evidence and not erroneous as a
matter of law.

B. Statute of Limitations

Next, we address the defendant’s argument that the trial court erred in
determining that RSA 508:4, the applicable statute of limitations, did not bar
the plaintiff’s claim seeking the imposition of a constructive trust. Specifically,
the defendant argues that the discovery rule does not apply here to enable the
plaintiff to bring his claim because the plaintiff discovered, or in the exercise of
reasonable diligence, should have discovered the defendant’s claim of complete
ownership over MMCI by 2013 at the very latest. According to the defendant,
the statute of limitations thus expired before or during 2016.

Before addressing the merits of this argument, we must consider the
defendant’s contention that the trial court should have applied the current
version of RSA 508:4, see RSA 508:4 (2010), rather than the prior version of
the statute in effect in 1973. See RSA 508:4 (Supp. 1972). Assuming without
deciding that the trial court should have applied the current version of the
statute, we conclude that whether the current or prior version is applicable is a
distinction without a difference under these circumstances because the
plaintiff prevails under both.

These versions of the statute differ, as relevant here, because the
legislature amended RSA 508:4 in 1986 to codify the common law discovery
rule. McCollum v. D’Arcy, 138 N.H. 285, 287 (1994). The prior version did not
expressly set forth a discovery rule standard. See Beane v. Dana S. Beane &
Co., 160 N.H. 708, 711-12 (2010). Instead, it merely set forth a six-year
limitations period. McCollum, 138 N.H. at 287; RSA 508:4 (Supp. 1972).
When applying this prior version of the statute, however, we have employed the
common law discovery rule to toll the statute of limitations until the plaintiff
discovers, or in the exercise of reasonable diligence, should have discovered,
both the fact of the injury and the cause thereof. McCollum, 138 N.H. at 287-
88. When determining whether to apply the common law discovery rule, a
court must identify, evaluate, and weigh the parties’ competing interests. Id. at
286-87.

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 The legislature’s 1986 amendment to RSA 508:4 established a three-year
limitations period and codified the common law discovery rule. Id. at 287. The
current version of RSA 508:4, I, provides:

Except as otherwise provided by law, all personal actions . . . may
be brought only within 3 years of the act or omission complained of,
except that when the injury and its causal relationship to the act or
omission were not discovered and could not reasonably have been
discovered at the time of the act or omission, the action shall be
commenced within 3 years of the time the plaintiff discovers, or in
the exercise of reasonable diligence should have discovered, the
injury and its causal relationship to the act or omission complained
of.

(Emphasis added.) According to RSA 508:4, I, the three-year limitations period
does not begin to run until two prongs are satisfied: first, a plaintiff must know
or reasonably should have known that he or she has been injured; and second,
a plaintiff must know or reasonably should have known that his or her injury
was proximately caused by the conduct of the defendant. Balzotti Global Grp.,
LLC v. Shepherds Hill Proponents, LLC, 173 N.H. 314, 321 (2020).

To obtain the benefit of the statutory discovery rule and overcome the
defendant’s statute of limitations defense, the plaintiff must prove that at least
one prong was not yet satisfied at a time within three years of the plaintiff’s
commencement of the action. Id.; Beane, 160 N.H. at 713 (terming the codified
discovery rule the “statutory discovery rule”). The discovery rule does not
apply unless the plaintiff proves that the plaintiff did not discover, and could
not reasonably have discovered, either the alleged injury or its causal
connection to the defendant’s alleged wrongful act or omission. Balzotti Global
Grp., 173 N.H. at 321. The rule is not intended to toll the statute of limitations
until the full extent of the plaintiff’s injury has manifested itself. Id. Rather,
that the plaintiff could reasonably discern that the plaintiff suffered some harm
caused by the defendant’s conduct is sufficient to render the discovery rule
inapplicable. Id. Further, a plaintiff need not be certain about this causal
connection; the possibility that it existed will suffice to obviate the protections
of the discovery rule. Id.

Under both the common law discovery rule, see French v. R.S. Audley,
Inc., 123 N.H. 476, 480 (1983), and the statutory discovery rule, whether the
plaintiff exercised reasonable diligence is a question of fact. See Black Bear
Lodge v. Trillium Corp., 136 N.H. 635, 638 (1993) (citing French, 123 N.H. at
476). We defer to the trial court’s findings of fact if they are supported by the
evidence and not erroneous as a matter of law. Town of Lincoln v. Chenard, 174 N.H. 762, 765 (2022); see French, 123 N.H. at 480.

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 In its order, the trial court found that the plaintiff proved by a
preponderance of the evidence that he did not discover or have a reasonable
opportunity to discover that the defendant claimed sole ownership over the
company until 2019. See Crowley v. Crowley, 72 N.H. 241, 246 (1903). The
record supports this determination. At trial, the plaintiff testified that he did
not learn that the defendant intended to retain complete ownership of the
company until a friend told him in 2019. Multiple witnesses testified that they,
too, only learned in 2019 that the defendant claimed he did not share
ownership of MMCI with the plaintiff. In particular, the accountant who
worked at the McLaughlins’ long-standing accounting firm and prepared
corporate tax returns for the companies testified that the defendant’s assertion
that he alone owned MMCI led her firm to terminate its relationship with the
companies in 2020.

Evidence regarding the plaintiff’s work responsibilities supports the trial
court’s determination that the plaintiff lacked a reasonable opportunity to
discover, nor would have discovered with reasonable diligence, that the
defendant did not intend to distribute the plaintiff’s shares to him. Multiple
witnesses testified that the plaintiff managed the operations side of the
business for MMCI and MTSI, and the defendant managed the financial side.
The plaintiff’s management of the companies’ dispatch, scheduling, shipment,
manpower and employment operations — not the financial and business
aspects of the companies — also supports the trial court’s finding that he did
not know, nor should have known in the exercise of reasonable diligence, that
the defendant asserted that he alone owned MMCI.

Nonetheless, the defendant maintains that the statutory limitations
period began to run after the plaintiff confronted the defendant in 2013 over a
newspaper article that stated that the defendant “bought his own moving firm”
in Portsmouth in the 1970s. The trial court concluded, however, that the
plaintiff credibly testified that he believed that the 2013 article was “just
puffery” and not a denial of the plaintiff’s ownership interest in MMCI.

The record supports this determination. The article primarily focused on
MTSI and indirectly referenced the defendant’s ownership of MMCI in two
sentences near the end of the article. The plaintiff testified that he became
upset after reading the article because his “whole life was dedicated to the
compan[ies]” but the article was “all about [the defendant].” He subsequently
approached the defendant to discuss the article. The defendant said nothing,
then responded that he “didn’t mention [his wife] either.” The substance of the
conversation, combined with the minimal content about MMCI in the article
itself, supports the trial court’s finding that the plaintiff did not know, and
could not have known in the exercise of reasonable diligence, that the
defendant claimed to independently own MMCI at this point.

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 The defendant also asserts that the trial court erred in determining that
the corporate documents listing the defendant as the sole shareholder of MMCI
and signed by the plaintiff did not put him on notice. At trial, however, the
plaintiff testified that he understood himself to be a shareholder in MMCI
despite the corporate documents showing otherwise because he believed his
shares had not yet been issued. He further testified that he did not receive
shares in “any other [of the family] companies that [he] owned 50-50.”
Furthermore, Kenneth McLaughlin, whose father originally owned the first
moving company that John H. acquired, testified that he did not find it strange
that the plaintiff did not hold any shares in the company in the decades after
its acquisition. The evidence in the record related to the family’s practices for
distributing corporate shares thus supports that the plaintiff did not discover
and should not have discovered, in the exercise of reasonable diligence, the
ownership claim before 2019 — despite his ratification of these records as the
corporate secretary.

In light of the foregoing considerations, we conclude that the record
supports the trial court’s determination under RSA 508:4 (Supp. 1972) that the
plaintiff did not know, and could not have known in the exercise of reasonable
diligence, that the defendant claimed sole ownership prior to 2019. We further
conclude as a matter of law that these findings of fact also satisfy the discovery
rule standard under the current version of RSA 508:4. The plaintiff brought
his action in July 2020. Therefore, the plaintiff’s claim is not barred by the six-
year limitations period under RSA 508:4 (Supp. 1972) or by the three-year
limitations period under RSA 508:4 (2010).

Finally, we address the defendant’s argument that the trial court erred
by failing to properly balance the interests at stake when applying the common
law discovery rule to toll the statute of limitations under the prior version of
RSA 508:4. Specifically, the defendant argues that “[s]uch a balancing in this
case should have resulted in a determination that the action accrued no later
than 1977, when [the plaintiff] first confirmed [the defendant’s] ownership of all
of the shares of MMCI as MMCI’s secretary.”

This argument, however, is inapposite. When the prior version of the
statute is applicable, the trial court balances the parties’ interests to determine
whether or not to apply the common law discovery rule. See McCollum, 138
N.H. at 287-88; see also Raymond v. Eli Lilly & Co., 117 N.H. 164, 170, 173-74
(1977). The determination of when the plaintiff discovered, or should have
discovered in the exercise of reasonable diligence, the fact of his injury and its
cause is a question of fact and a separate inquiry from whether to apply the
discovery rule in the first place. French, 123 N.H. at 480. Accordingly, we
decline to reverse the trial court’s determination that the plaintiff did not
discover or have a reasonable opportunity to discover that the defendant
claimed complete ownership of MMCI before 2019.

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 III. Conclusion

For the foregoing reasons, we affirm the trial court’s order imposing a
constructive trust in favor of the plaintiff over fifty percent of MMCI’s shares.
We have reviewed the record and find the parties’ remaining arguments without
merit. Vogel v. Vogel, 137 N.H. 321, 322 (1993); Sup. Ct. R. 25(8).

Affirmed.

DONOVAN and COUNTWAY, JJ., concurred; ABRAMSON, J., retired
superior court justice, specially assigned under RSA 490:3, II, concurred.

Timothy A. Gudas,
Clerk

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