Renovest Co. v. Hodges Development Corp., 89-559
| Decision Date | 06 December 1991 |
| Docket Number | No. 89-559,89-559 |
| Citation | 135 N.H. 72,600 A.2d 448 |
| Parties | RENOVEST COMPANY v. HODGES DEVELOPMENT CORPORATION. |
| Court | New Hampshire Supreme Court |
Upton, Sanders & Smith, Concord (Gilbert Upton and James F. Raymond on the brief, and Gilbert Upton orally), for plaintiff.
Cleveland, Waters and Bass P.A., Concord (Craig L. Staples on the brief, and Roger Burlingame orally), for defendant.
The plaintiff has taken appeal from the Superior Court's (Dickson, J.) order granting the defendant's motion to dismiss made at the close of the plaintiff's case during a jury-waived trial. Two questions are raised on appeal: (1) by what standard should we review the evidence when a judge grants a motion to dismiss during a jury-waived trial; and (2) whether the court erred in its findings and in its order of dismissal based thereon. We find no errors and affirm.
The plaintiff, Renovest Company (Renovest), entered into a purchase and sale agreement with the defendant, Hodges Development Corporation (Hodges), on June 30, 1986, for a two-building apartment complex in Franklin. The agreed-upon purchase price was $1,476,000 and the initial deposit paid to Hodges at the signing of the contract was $65,000. The contract specified that the deposit would serve as liquidated damages if Renovest failed to close on or before September 3, 1986.
Three conditions precedent to the buyer's obligation to perform were contained in the contract. At issue here are paragraph 3(b), relating to physical inspection of the property, and paragraph 3(d) relating to the buyer's obtaining financing at certain rates and terms. No portion of the contract stated expressly that time was of the essence. The provision relating to inspection called for the inspection to be completed within fourteen working days, and specified that if the inspection was unsatisfactory, the "Buyer shall have three (3) days from the date of completion of such inspection in which to notify Seller of his disapproval, and this Agreement shall be null and void and all deposits hereunder shall be refunded in full." The outside date on this condition was July 24. The financing provision contained a forty-five-day limit, after inspection of the seller's business records, in which the buyer was required to notify the seller of an intention to invoke the financing condition clause. Paragraph 9 of the contract required that all notices be given in writing.
Renovest first inspected the buildings on July 10, 1986, sending a partner and a building inspector. It was during this inspection that Renovest discovered a crack in the exterior of one building, and it consulted with Hodges the next day. Whether Hodges agreed to extend the deadline in order to allow further inspection by Renovest is disputed. Further investigation was performed on July 17 and 23 by another engineer, and his report on August 6 contained his opinion that the building would require "underpinning" of the foundation in order to prevent further settling of the building. Underpinning involves stabilization of the building's foundation. Based on this report, Renovest wrote to Hodges on August 7, terminating the transaction and demanding return of the $65,000 deposit. Hodges undertook its own engineering study, which commenced with borings on August 12 and culminated in an evaluation report dated August 26. This report described the cracking as cosmetic, found the problem building structurally sound, and rejected the need for underpinning. Hodges shared this report with Renovest.
Renovest did initially undertake to secure the financing by approaching four banks. Two of these, the Bank of New England and the Shawmut Bank, were favorably disposed toward the financing application, up to the time that Renovest notified them of the results of the engineer's report about the building's structural problems. Upon receipt of this information, the banks indicated they would not continue to process the loan applications until the issue of the building's structural soundness was resolved. Although time still remained in which to meet the financing deadline, Renovest never pursued the applications further. A second letter sent by Renovest to Hodges on August 12 asserted the failure to obtain financing, as well as an unsatisfactory result of the inspection of Hodges's books and records, as additional grounds for the termination of the contract. Renovest no longer asserts the books and records contingency as a ground for the termination.
At trial on its suit to obtain return of its deposit, Renovest presented three witnesses and introduced the deposition of a fourth witness. After Renovest rested, Hodges moved to dismiss, both orally and in writing, and the judge granted the motion based on the court's findings of fact. Rather than making a determination of whether the plaintiff established a prima facie case, the judge specifically concluded that Renovest's objection to the building's structure was untimely, and that Renovest prematurely terminated its attempts to obtain financing. He therefore ruled that the plaintiff had failed to carry its burden of proof, and granted the defendant's motion to dismiss. Renovest appeals the findings of the court, and asserts that, viewing the evidence presented to the judge in the light most favorable to it, Renovest had met its initial burden of presenting a prima facie case.
In most circumstances, the appropriate standard of review for a motion to dismiss (or nonsuit) is to take the evidence presented and determine if, viewed most favorably to the non-moving party, it establishes a prima facie case. Morrill v. Tilney, 128 N.H. 773, 777, 519 A.2d 293, 295 (1986). This standard has previously been applied, at least in one instance, in a bench trial case. See Auclair v. Bancroft, 121 N.H. 393, 395, 430 A.2d 169, 171 (1981).
The defendant, Hodges, urges that, although it would prevail under either standard, this court should adopt a standard recognizing that when the judge is the trier of fact, that judge may make findings of fact at the close of the plaintiff's case, which findings are entitled to deference upon review, unless clearly erroneous.
In Auclair, a case appealed from an order issued during a jury-waived trial at the same trial juncture as the present case, we applied the standard of viewing all evidence in the light most favorable to the plaintiff. Auclair supra. Auclair arose in a different procedural setting from the case before us today. Rather than dismissing the case on the basis of findings of fact made against the plaintiff, as in the present case, the trial judge in Auclair declined to make findings of fact at the close of the plaintiff's case, and instead chose to hear the defendant's case. Indeed, the trial judge ultimately made findings of fact in favor of the plaintiff. Id. In reviewing the decision not to make findings of fact, we applied the standard of a prima facie case to justify having the case proceed, as we had no findings of fact to review. If faced with a prima facie case presented by the plaintiff, and if uncertain as to the propriety of making factual findings from the evidence, the trial judge, acting without a jury, certainly has the discretion to require the defendant to proceed. If the defendant is secure in its assessment of the evidence, it may rest its case.
Our standard of review is a common-law, court-developed, doctrine based upon a weighing of the benefits of an expedited trial, and the resulting judicial efficiencies, against the risk of losing what might be developed in extended proceedings. As a court-developed doctrine, an appropriate standard may be established by this court in circumstances where no separate trier of fact exists and we are not, therefore, obligated to preserve a separate prerogative. See Briere v. Briere, 107 N.H. 432, 434, 224 A.2d 588, 590 (1966); Dean v. Smith, 106 N.H. 314, 317, 211 A.2d 410, 412-13 (1965).
We believe the better view is that supported by Hodges. The purpose behind the highly deferential "prima facie " standard for evaluating the plaintiff's evidence is to permit the issue to go to the jury if it is possible for the jury to resolve the issue in the plaintiff's favor, to preserve all factual matters that reasonably might be determined against the moving party. See Page v. Parker, 43 N.H. 363, 366 (1861). Therefore, the issue must go to the jury upon the presentation of a prima facie case, regardless of the judge's view of the weight of the evidence. R. Wiebusch, 5 New Hampshire Practice, Civil Practice and Procedure § 1585, at 298 (1984).
A motion to dismiss, made to the judge in a jury-waived trial at the close of the plaintiff's case, can challenge the plaintiff's case in either of two ways. Although both types of motion are referred to as "motions to dismiss" in many jurisdictions, they serve two very separate purposes. One, directed at the judge in his role as judge, is used to assess the legal sufficiency of the case, and is measured by the familiar prima facie standard, taking all evidence introduced and resolving all conflicts in the plaintiff's favor. The second, however, is a broader one, asking the judge, as the trier of facts, for an expedited disposition. On such a motion, the judge is permitted to render a verdict for the defendant, on the merits, at the close of the plaintiff's case. Should the judge choose to address the case on the merits at that time, the judge should make findings of fact and assess whether the plaintiff has carried his or her burden by a preponderance of the evidence.
The plaintiff has had the chance to prove his or her case, tested by cross examination, but unchallenged by the defendant's case-in-chief. The plaintiff has no right to rely on the defendant's witnesses or exhibits to supply essential elements of his or her case. An alert defendant, perceiving a fatal hole in the plaintiff's case or satisfied with the state of...
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