Decker v. Decker

• Court: New Hampshire Supreme Court
• Writing for the Court: HORTON
• Citation: Decker v. Decker, 660 A.2d 1112, 139 N.H. 588 (N.H. 1995)
• Decision Date: 09 June 1995
• Docket Number: No. 93-711,93-711
• Parties: David DECKER v. Marshall N. DECKER and another.

Page 1112

660 A.2d 1112

139 N.H. 588

David DECKER v. Marshall N. DECKER and another.

No. 93-711.

Supreme Court of New Hampshire.

June 9, 1995.

Normandin, Cheney & O'Neil, Laconia (Duncan J. Farmer, on the brief and orally), for plaintiff.

Douglas & Douglas, Concord, and Marshall N. Decker, pro se (Susanna G. Robinson and Charles G. Douglas, III, on the brief, and Mr. Douglas and Mr. Decker orally), for defendants.

HORTON, Justice.

The defendants, Marshall Decker and J.E.D. Associates, Inc. (JED), appeal a decision of the Superior Court (McHugh, J.) holding that the plaintiff, David Decker, owns a ten percent equity interest in the defendants' real estate venture, and awarding him $70,000 in damages, $15,000 in accounting fees, and ten percent of future profits. We affirm the ten percent equity interest and the award of accounting fees, and reverse and remand for a complete accounting of the venture's operations to determine the damages to be awarded.

In 1978, JED, a corporation controlled by defendant Marshall Decker, purchased a 122-acre tract of land in Danville with the intention of developing it for residential use. JED financed the $100,000 purchase price with a $2,000 downpayment and a $98,000 mortgage. In 1979, JED sold David Decker, defendant Marshall Decker's brother, a ten percent equity interest in the property to be developed for $15,000. David Decker borrowed $20,000 from a bank and delivered $15,000 to JED. David Decker expressed concern that he might not be able to make the monthly payments on the loan, and Marshall Decker offered to help with the payments. JED made all of the payments on David Decker's $20,000 note.

From 1981 through 1985, JED developed the property into a manufactured housing site called Cotton Farm Village (CFV). JED built improvements such as roadways, water and septic systems, and twenty apartment units, at a total cost of approximately $1.17 million, and incurred an additional $1.26 million in operating expenses. These expenditures were financed from three sources. First, JED refinanced CFV so that when it was fully developed at the end of 1985, the mortgage was approximately $800,000. Second, JED invested approximately $1.28 million it generated from selling 140 manufactured homes, most or all of which were placed on CFV's rental lots. Finally, the rental lots and CFV's twenty apartment units generated about $350,000 in rents through 1985. CFV became profitable in 1986. Since then, JED has taken out approximately $1,000,000 in additional mortgage debt, largely for purposes unrelated to CFV, and serviced this debt with CFV revenues.

In 1986, David Decker initiated a bill in equity, seeking: (1) the imposition of a constructive trust on property owned by the defendants; (2) an order enjoining the defendants from selling, transferring, or otherwise divesting CFV or any other of their assets; (3) an accounting of the financial dealings relating to CFV; and (4) partition of the property so that in the future, his ten percent share would be handled solely by him. The trial court determined that David Decker owned a ten percent equity interest in CFV, awarded him damages of $100,000, less $30,000 for payments the defendants made on his note, awarded him $15,000 in accounting fees, and made a series of orders directed at protecting David Decker's ten percent equity interest and share of profits thereafter. On appeal, the defendants argue that the trial court erred: (1) by ruling that their payment of David Decker's note did not extinguish his equity interest; and (2) by refusing to reduce David Decker's damages by his share of the losses CFV suffered during its initial years of development.

"The propriety of affording equitable relief in a particular case rests in the sound...