Hughes v. N.H. Div. of Aeronautics

• Decision Date: 22 March 2005
• Docket Number: No. 2004–378.,2004–378.
• Citation: 871 A.2d 18,152 N.H. 30
• Court: New Hampshire Supreme Court
• Parties: Donald G. HUGHES and another. v. NEW HAMPSHIRE DIVISION OF AERONAUTICS and another.

152 N.H. 30

871 A.2d 18

Donald G. HUGHES and another.

v.NEW HAMPSHIRE DIVISION OF AERONAUTICS and another.

No. 2004–378.

Supreme Court of New Hampshire.

Argued: Dec. 9, 2004.

Opinion Issued: March 22, 2005.

Nelson, Kinder, Mosseau & Saturley, P.C., of Manchester (William C. Saturley and Catherine M. Costanzo on the brief, and Mr. Saturley orally), for the plaintiffs.

Kelly A. Ayotte, attorney general (Daniel J. Mullen, associate attorney general, on the brief and orally), for the defendants.

DALIANIS, J.

The plaintiffs, Donald G. Hughes and Robert W. Hughes, appeal the order of the Superior Court (McGuire , J.) granting the defendants' motion for summary judgment. The plaintiffs sued the New Hampshire Department of Transportation, Division of Aeronautics (the State), Mark P. Hodgdon, individually and in his capacity as senior assistant attorney general, and Kathryn M. Bradley, individually and in her capacity as assistant attorney general, for their involvement in the plaintiffs' efforts to purchase land in Wolfeboro. We affirm in part, reverse in part and remand.

The plaintiffs allege the following facts. On February 17, 1999, they entered into a purchase and sale agreement with KS Realty (transaction one) to purchase land, on part of which was located the Wolfeboro/Lakes Region Airport, for $2 million. The purchase and sale agreement was set to expire on March 30, 1999, but was extended to March 31, 1999.

In early March, the plaintiffs became aware of RSA 422:46, which grants the State a right of first refusal in the sale of any airport. RSA 422:46 (2002). The plaintiffs notified the director of aeronautics and requested that the State either exercise or waive its right of first refusal. The State did neither before the purchase and sale agreement expired on March 31, 1999. The State admits that as of March 1, 1999, it had only $1,116,740.50 available to exercise its right of first refusal.

The plaintiffs then entered into a second agreement with KS Realty (transaction two). By the terms of this agreement the plaintiffs loaned $900,000 to Donald Satterfield, the principal of KS Realty; he executed a promissory note and gave a mortgage on the property to the plaintiffs to secure the loan. The agreement required the plaintiffs to operate the airport. It also required them to obtain approval to subdivide the land necessary to the airport from the rest of the property and obtain an appraisal. Two sales contracts were then to be executed: one for the airport parcel and one for the remaining parcel. The State sought the details of the second agreement. The plaintiffs assured the State that it was not a purchase and sale agreement, and that if a purchase and sale agreement were signed, they would notify the State; the plaintiffs did not provide the defendants with a copy of the second agreement at this time. The plaintiffs applied for subdivision of the property.

On July 27, 1999, the State filed suit against the plaintiffs and KS Realty in the Carroll County Superior Court, seeking to enjoin the subdivision of the property, and seeking a declaration that it had ninety additional days to evaluate and exercise its right of first refusal with respect to transaction one. The plaintiffs provided the defendants with a copy of the second agreement in August 1999. Transaction two expired on October 31, 1999. The plaintiffs do not allege any continuing interest in the property; it is still owned by KS Realty.

On December 23, 1999, Hodgdon sent a letter to counsel for KS Realty detailing a plan to purchase the entire parcel, contingent upon the State obtaining financing. The plan included the provision that KS Realty would "convey the entire property to the State or an entity of the State's designation ...." At a meeting held on February 24, 2000, Bradley conceded that if the State were successful in its suit in Carroll County, a group of private investors would reimburse the State for its initial investment in the land. This group would then give the portion of the property necessary to run the airport to the State, and develop the remaining lakefront portions. The Carroll County Superior Court (Fauver , J.) issued an order on June 22, 2000, denying the State the right to exercise its right of first refusal on transaction one.

The plaintiffs then brought suit against the defendants seeking: (1) a declaration that RSA 422:46 is unconstitutional on its face and as applied; (2) an injunction preventing the State from using or threatening to use RSA 422:46 in connection with the potential sale of the airport property; (3) damages for tortious interference with contractual relations; and (4) damages for violation of 42 U.S.C. § 1983 (2000). The trial court dismissed the state law claims against Hodgdon and Bradley individually, as it found they were at all times acting as agents, employees or officials of the State. The plaintiffs do not appeal the dismissal of Hodgdon and Bradley as defendants on these claims. The trial court then granted the defendants' motion for summary judgment on all claims, effectively denying the petition for injunctive relief. The plaintiffs do not appeal the denial of their request for injunctive relief.

On appeal the plaintiffs argue that the trial court erred in granting the defendants' summary judgment motion because RSA 422:46 is unconstitutional both on its face, and as applied; and because there are genuine issues of material fact: (1) concerning whether the individual defendants were acting within the scope of their authority; (2) concerning whether the individual defendants are entitled to immunity for the tortious interference with contractual relations and 42 U.S.C. § 1983 claims; (3) concerning whether the State is entitled to immunity for the tortious interference with contractual relations and 42 U.S.C. § 1983 claims; and (4) sufficient to bring the tortious interference with contractual relations and 42 U.S.C. § 1983 claims to a jury. Finally the plaintiffs argue that the defendants' motion was procedurally flawed.

We will analyze these issues in turn and as necessary. We will begin by addressing the plaintiffs' claim that RSA 422:46 is unconstitutional on its face and as applied. The constitutionality of a statute involves a question of law, which we review de novo . Webster v. Town of Candia, 146 N.H. 430, 434, 778 A.2d 402 (2001).

We will then analyze the claims under 42 U.S.C. § 1983 and the state law tortious interference with contractual relations claims, which require separate analyses of the defendants' possible immunity. If we find the defendants are not immune from suit, or if there is a genuine issue of material fact as to their immunity, we will analyze the substance of the claim. Where we find immunity on a claim, we will not analyze its substance.

In reviewing the trial court's grant of summary judgment, we consider the affidavits and other evidence, and all inferences properly drawn from them, in the light most favorable to the non-moving party. If our review of that evidence discloses no genuine issue of material fact, and if the moving party is entitled to judgment as a matter of law, we will affirm the grant of summary judgment. We review the trial court's application of the law to the facts de novo . Big League Entm't v. Brox Indus., 149 N.H. 480, 482, 821 A.2d 1054 (2003).

I. Facial Constitutional Challenge to RSA 422:46

The plaintiffs argue that RSA 422:46 is unconstitutional on its face. First, they argue that RSA 422:46 permits an unconstitutional taking because it allows the State to purchase an airport at the price agreed upon by the parties, which is not necessarily the "just compensation" required by the State and Federal Constitutions. See U.S. CONST. amend. V ; N.H. CONST. pt. I, art. 12 ; Burrows v. City of Keene, 121 N.H. 590, 596, 432 A.2d 15 (1981). Second, they argue that RSA 422:46 constitutes a direct taking because it grants the State a right of first refusal in airport purchases without requiring the State to pay for this right.

We decide cases on constitutional grounds only when necessary. Appeal of Wintle, 146 N.H. 664, 666, 781 A.2d 995 (2001). In this case, we need not decide the facial challenges to the statute because the plaintiffs lack standing to assert them. Although no party disputes the plaintiffs' standing, a party's standing to bring suit is a question of subject matter jurisdiction, which may be addressed at any time. See Asmussen v. Comm'r, N.H. Dep't of Safety, 145 N.H. 578, 588, 766 A.2d 678 (2000) ; Route 12 Books & Video v. Town of Troy, 149 N.H. 569, 575, 825 A.2d 493 (2003).

The plaintiffs lack standing because they cannot raise the constitutional claims of another. Silver Brothers, Inc. v. Wallin, 122 N.H. 1138, 1140, 455 A.2d 1011 (1982). The general rule in New Hampshire is that a party has standing to raise a constitutional issue only when the party's own rights have been or will be directly affected.

Petition of Burling, 139 N.H. 266, 272, 651 A.2d 940 (1994). Both of the plaintiffs' theories assert the rights of the property owner, for the plaintiffs have no constitutionally protected rights in the property at issue.

"For any Fifth Amendment takings claim, the complaining party must show it owned a distinct property interest at the time it was allegedly taken ...." Cienega Gardens v. United States, 331 F.3d 1319, 1328 (Fed.Cir.2003). Property, in the constitutional sense, is not the physical thing itself, but a group of rights which the owner of the thing has with respect to it. Burrows, 121 N.H. at 597, 432 A.2d 15. The term refers to a person's right to possess, use, enjoy and dispose of a thing and is not limited to the thing itself. Id. The just compensation principle applies if these rights are abridged by a government regulation. Id.

The right to just compensation, for any part of a property taken, belongs to the owner of the property. See U.S. CONST. amends. V, XIV, § 1 ; N.H. CONST. pt. I, art. 12 ; Burrows, 121 N.H. at...