Rousseau v. Eshleman

• Decision Date: 28 May 1987
• Docket Number: No. 84-545,84-545
• Citation: 129 N.H. 306,529 A.2d 862
• Parties: Pierre ROUSSEAU v. Maris ESHLEMAN.
• Court: New Hampshire Supreme Court

Page 862

529 A.2d 862

129 N.H. 306

Pierre ROUSSEAU v. Maris ESHLEMAN.

No. 84-545.

Supreme Court of New Hampshire.

May 28, 1987.

Hamblett & Kerrigan P.A., Nashua (John P. Griffith, on brief and orally, and Linda J. Argenti on brief), for plaintiff.

Sheehan, Phinney, Bass & Green P.A., Manchester (Peter F. Kearns, on brief and orally, and Marc W. McDonald, on brief), for defendant.

Fred L. Potter and Stephen L. Tober (Mr. Potter, on brief and Mr. Tober on brief and orally), for New Hampshire Bar Ass'n, as amicus curiae.

Stephen E. Merrill, Atty. Gen. (Amy L. Ignatius, Sr. Asst. Atty. Gen., on brief, and Terry L. Robertson, Asst. Atty. Gen., on brief and orally), for the State, as amicus curiae.

PER CURIAM.

This case is before us on the attorney general's motion to reconsider the opinion in Rousseau v. Eshleman, 128 N.H. 564, 519 A.2d 243 (1986). For the reasons that follow, we deny the motion.

In Rousseau v. Eshleman supra, the court determined that attorneys in this State are exempt from the application of the consumer protection act, RSA chapter 358-A, and therefore reversed the Trial Court's (C. Flynn, J.) ruling on the defendant's motion that the consumer protection act applied to an attorney who had advertised his services to the public. The case was remanded for a new trial based on the trial court's erroneous submission to the jury of questions concerning the consumer protection act. Brock, J. writing for the majority, with whom King, C.J. and Souter, J., joined, held that attorneys are per se exempt from the consumer protection act, pursuant to RSA 358-A:3, I, which exempts "[t]rade or commerce otherwise permitted under laws as administered by any regulatory board or officer acting under statutory authority of this state or of the United States." The majority exempts attorneys from the purview of the consumer protection act, implicitly interpreting the word "trade," in the phrase "trade or commerce," as referring to an occupation, or the business of one who engages in the activity of trade or commerce. Further, because the members of this occupation act under the supervision of a regulatory body, the professional conduct committee of this court, they are exempt from the act, pursuant to RSA 358-A:3, I.

Johnson, J., with whom Batchelder, J., joined, asserted in dissent that the professional conduct committee is not the type of regulatory board envisioned by the act and, therefore, that attorneys should not be per se exempt from the consumer protection act. The dissent recommends that the "commercial" activities of attorneys be subject to the act's proscriptions, while the "noncommercial" activities of attorneys be beyond its purview.

Since the oral argument and decision in this case, the composition of the court has changed with the retirement of King, C.J., and the appointment of Thayer, J. By order of December 19, 1986, we granted the attorney general's motion to intervene as amicus curiae on the ground that the attorney general was not given timely notice of this action, in violation of RSA 358-A:10, II, and set down for briefing and argument his motion for reconsideration. The New Hampshire Bar Association also was granted leave to participate as amicus curiae. The plaintiff's motion for rehearing was denied in the same order. The plaintiff and defendant were permitted to brief, and argue orally, the issues raised in the attorney general's motion to reconsider.

The principal facts of this case, as more fully set forth in the October 3, 1986, opinion, are that during the fall of 1980, the plaintiff, Pierre Rousseau, was contemplating the purchase of five residential duplexes and sought the advice of the defendant, Maris Eshleman. The defendant recommended investment in commercial real estate in lieu of the residential real estate in which the plaintiff was originally interested. The defendant then informed the plaintiff that the customary fee for attorneys practicing in the area of real estate law would be one percent of the purchase price for the closing of a sale on any property, and one to two percent of the purchase price for assistance in securing financing. The plaintiff agreed and requested that the defendant gather information concerning potential commercial properties for the plaintiff's consideration.

In December, 1980, the plaintiff, at the defendant's suggestion, decided to purchase a small shopping center in Merrimack. The defendant prepared a letter of intent, and the plaintiff and the seller entered into a purchase and sale agreement. The plaintiff believed, on the defendant's representation, that the mortgage on the property was assumable by the buyer once the property was purchased.

At trial, the defendant testified that at some point before the closing, he discovered that the mortgage was not assumable, and that the note was a demand note due and payable at the option of the bank upon the plaintiff's purchase of the property. The plaintiff did not become aware of these facts until after the April, 1981, closing. In the fall of 1981, the plaintiff realized that he could no longer afford the monthly payments on the property. In February, 1982, the former owner agreed to buy the property back from the plaintiff, who, by this time, had sustained a substantial loss on his investment.

In May, 1982, the plaintiff filed suit against the defendant, alleging three causes of action: legal malpractice, negligent misrepresentation, and unfair and deceptive trade practices in violation of the consumer protection act. The plaintiff sought damages amounting to $200,000 and claimed that the defendant had committed a willful and knowing violation of the consumer protection act; plaintiff therefore asserted a right to treble damages pursuant to RSA 358-A:10.

On rehearing, the attorney general, as amicus curiae, asserts that the legal profession should not be per se exempt from the application of the consumer protection act because the existence of the professional conduct committee should not, in itself, exempt all transactions of the profession from claims of unfair or deceptive trade practices. The attorney general asserts that paragraph I of RSA 358-A:3 exempts "[t]rade or commerce otherwise permitted under laws as administered by any regulatory board or officer...." (Emphasis supplied.) Thus, he argues that attorney conduct which is consistent with the regulatory scheme administered by the conduct committee would not give rise to an action by the attorney general or a private action, even if such conduct seemingly violates RSA 358-A:2. Conduct not consistent with that regulatory scheme, or not expressly permitted by the conduct committee, would give rise to a cause of action under the act.

The defendant contends that the practice of law is per se exempt from the consumer protection act because it is a "regulated" profession pursuant to RSA 358-A:3, I. He argues, contrary to assertions in his original brief, that (1) the practice of law constitutes "trade or commerce" for purposes of the consumer protection act, and (2) the "commercial" versus "noncommercial" distinction is inapplicable to the legal profession. Alternatively, he asserts that, if the practice of law is not exempt from the act pursuant to RSA 358-A:3, this case should not serve as precedent for the act's application.

The plaintiff, in his original brief, asserted that the practice of law constitutes "trade or commerce" and, further, that it should not be per se exempt from liability under the act because this court is not a regulatory body acting under statutory authority of the State within the meaning of RSA 358-A:3, I. Alternatively, the plaintiff asserted that the consumer protection act should apply, at a minimum, to attorneys engaged in the "commercial" aspects, as opposed to the "noncommercial" aspects, of the practice of law. On rehearing, the plaintiff contends that the attorney general's interpretation of the exemption provision is unfounded, and asserts that the mere fact that an occupation is licensed cannot mean that it is licensed to use unfair and deceptive practices.

The New Hampshire Bar Association, as amicus curiae, argues that the application of the consumer protection act to the practice of law constitutes a violation of the constitutional principle of separation of powers. N.H. CONST. pt. I, art. 37. The Bar Association also contends that the "commercial" versus "noncommercial" distinction is unworkable and subjective, and should therefore not be applied to the practice of law.

The consumer protection act "is a comprehensive statute designed to regulate business practices for consumer protection by making it unlawful for persons engaged in trade or commerce to use various methods of unfair competition and deceptive business practices." Chase v. Dorais, 122 N.H. 600, 601, 448 A.2d 390, 391 (1982). See generally, RSA chapter 358-A (Supp.1986). The act does not specifically make reference to or exempt the practice of law from its purview. However, the statute does exempt "[t]rade or commerce otherwise permitted under laws as administered by any regulatory board or officer acting under statutory authority of this state or of the United States." RSA 358-A:3, I. In the October 3, 1986, opinion, a majority of the court determined that attorneys are per se exempt from the consumer protection act,...