Concrete Constructors, Inc. v. Manchester Bank, 7587

• Decision Date: 29 August 1977
• Docket Number: No. 7587,7587
• Citation: 377 A.2d 612,117 N.H. 670
• Parties: CONCRETE CONSTRUCTORS, INC. v. The MANCHESTER BANK.
• Court: New Hampshire Supreme Court

Page 612

377 A.2d 612

117 N.H. 670

CONCRETE CONSTRUCTORS, INC. v. The MANCHESTER BANK.

No. 7587.

Supreme Court of New Hampshire.

Aug. 29, 1977.

Decker & Hemeon, Laconia (David R. Decker, Laconia, orally), for the plaintiff.

McLane, Graf, Greene, Raulerson & Middleton and Bruce W. Felmly, Manchester, for the defendant.

LAMPRON, Justice.

This is an action by plaintiff by writ dated July 23, 1975, to recover the value of labor and materials provided from October 1973, through June 1974, in the construction of concrete footings, foundations, and floors for Mad River Condominiums, Inc., a real estate development company. This concrete construction work was performed for a condominium apartment unit project in Waterville Valley. Defendant was a mortgagee of Mad River Condominiums (hereinafter "developer") for these condominium apartment units. In this action defendant is alleged to have acted in a joint venture or partnership with the developer, to have preferred itself over other creditors when the developer was in financial difficulty, and to have participated in the business decisions of the developer. Through these allegations plaintiff seeks to have defendant, which foreclosed on May 9, 1975, the development property under the terms of the mortgage, held liable for the unpaid balance of $35,910.00 due on the construction work plaintiff performed for the developer.

When plaintiff brought this action, defendant filed a motion to dismiss on the grounds of res judicata or collateral estoppel. The basis for defendant's motion was that plaintiff had earlier brought against defendant and the developer a petition for an injunction against foreclosure of unit 7A which had been settled by agreement and the following docket markings entered: "Neither party. No further action for the same cause. No costs. No interest."

A hearing on defendant's motion to dismiss was held before a Master (Mayland H. Morse, Jr., Esq.), who found that the second action was barred under the principles of res judicata and recommended that the motion be granted. His report and recommendation were approved by the Superior Court (Keller, C. J.), and an order in accordance with the master's recommendation was entered. Plaintiff's exception to this ruling was reserved and transferred by Batchelder, J.

We hold that this action by plaintiff is not barred under the principles of either res judicata or collateral estoppel, and that it was error for the trial court to grant defendant's motion to dismiss.

On March 14, 1974, the developer and plaintiff had entered into a purchase and sale agreement by which plaintiff agreed to purchase condominium unit 7 in building A for the total price of $39,900.00. Plaintiff paid $3,990 and it was agreed that the remaining $35,910.00 of the purchase price was to be charged against the balance in that amount owed by the developer for plaintiff's concrete construction work. Although the president of plaintiff construction company moved into condominium unit 7A, title to the unit was not transferred from the developer to plaintiff in accordance with the agreement.

In the meantime, the developer defaulted on its mortgage note obligation and defendant started foreclosure proceedings, the foreclosure sale being scheduled for 9:00 A.M., on May 9, 1975. In order to preserve the rights it had in unit 7A, plaintiff negotiated with defendant, seeking a transfer of this unit on the same terms as it had with the developer. Because the developer had run out of money, defendant refused to transfer the unit on these terms as that would have amounted to a further extension of funds to the developer. Plaintiff then offered to pay in cash the balance due under the purchase and sale agreement entered into with the developer. Through unexplained delays plaintiff did not receive the deed it needed to conduct a title search in order to secure financing for its purchase of unit 7A.

On May 7, 1975, due to the imminence of the foreclosure sale and the continued delay in obtaining a deed to unit 7A, plaintiff brought an equity action against the developer and defendant, seeking a temporary and permanent injunction against defendant from foreclosing on unit 7A, seeking conveyance of title to unit 7A upon payment of the balance of the purchase price by plaintiff, and asking for "such other, further and different relief as to the Court may seem just." On May 8, 1975, the date set for the hearing on plaintiff's petition, the parties settled the matter by...