Scheele v. Village Dist. of Eidelweiss, 81-351

• Decision Date: 10 December 1982
• Docket Number: No. 81-351,81-351
• Citation: 453 A.2d 1281,122 N.H. 1015
• Parties: George R. SCHEELE et al. v. VILLAGE DISTRICT OF EIDELWEISS et al.
• Court: New Hampshire Supreme Court

Page 1281

453 A.2d 1281

122 N.H. 1015

George R. SCHEELE et al. v. VILLAGE DISTRICT OF EIDELWEISS et al.

No. 81-351.

Supreme Court of New Hampshire.

Dec. 10, 1982.

Sulloway, Hollis & Soden, Concord (Stephen M. Duprey on brief and orally, and Robert M. Larsen, Concord, on brief), for plaintiffs.

Cooper, Hall, Whittum & Shillaber, (Peter A. Handy, Rochester, on brief and orally), for defendant intervenor Great Northern Land Corporation.

Dickson, Fauver & Cooper, North Conway, filed no brief for the defendant Village Dist. of Eidelweiss.

BATCHELDER, Justice.

This appeal involves a long-standing dispute between these parties, primarily the plaintiffs George and Doris Scheele and the company from which they bought their residential-recreational property, Great Northern Land Corporation (Great Northern). The Superior Court (Wyman, J.) ruled (1) that the refusal of the Village District of Eidelweiss (district) to supply water to some of its residents (the Scheeles) until receiving a release from the previous supplier of water (Great Northern) was an unconstitutional violation of 42 U.S.C. § 1983 (1976), (2) that the plaintiffs owed Great Northern the sum of $1,250 as the reasonable value of the water services previously supplied, and (3) that the reasonable value of the attorney's fees owed the plaintiffs under 42 U.S.C. § 1988 (1976) was $1,500. We affirm the first ruling; we reverse the court's decision on the quantum meruit claim; and remand for the recalculation of attorney's fees.

The plaintiffs purchased a lot in the Eidelweiss subdivision in 1968 from Great Northern. Unlike later deeds from Great Northern, the plaintiffs' deed contained no provision for payment of a maintenance fee for roads, snow removal, water services, community recreational areas and other services provided by Great Northern. In 1971, Great Northern began billing the residents of Eidelweiss, including the plaintiffs, a unified maintenance fee. The plaintiffs refused to pay the fee, but instead sent Great Northern $50 per year, which they believed was the reasonable value of the water services provided. In September 1976, Great Northern discontinued the plaintiffs' water service for non-payment of the maintenance fee.

In October 1976, the plaintiffs instituted an action in Massachusetts, alleging the wrongful termination of water service. Great Northern counterclaimed on a theory of express or implied contract, alleging that the plaintiffs owed it money for maintenance services rendered. The Massachusetts trial court denied the relief requested by both parties, finding that no contract existed and, thus, the plaintiffs had no contractual right to demand water service and Great Northern had no contractual right to payment. This verdict was upheld on appeal.

In 1980, Great Northern sold many of its assets, including roads and the water system, to the district. Although there is evidence in the record that the value of these assets was in excess of $600,000, the purchase price was $200,000. Included in the sale agreement was a clause prohibiting the district from providing water to certain residents, including the plaintiffs, until a release was obtained from Great Northern. Another provision in the agreement required Great Northern to indemnify the district for any liability incurred as a result of the prohibition clause. The district thereafter refused to supply water to the plaintiffs because of the provisions of the sale agreement.

In June 1980, the plaintiffs filed the present suit for declaratory judgment for a determination of their right to water service from the district. The Superior Court (Temple, J.) issued a temporary order requiring restoration of water service conditioned on the posting of a cash bond. Great Northern then intervened as a defendant and counterclaimed for the value of the services earlier provided on a theory of unjust enrichment. Shortly before trial, the plaintiffs sought a voluntary non-suit so that they could institute a section 1983 action instead. The Superior Court (Wyman, J.) denied the motion for a non-suit and instead consolidated the section 1983 action with the other pending actions. After a trial on the merits, the plaintiffs and the defendant Great Northern took these appeals.

The plaintiffs argue that Great Northern's counterclaim for maintenance fees and water services, is barred by either the doctrines of res judicata or collateral estoppel. The trial court held that although the previous Massachusetts litigation barred the claim for maintenance fees, it did not bar Great Northern from bringing suit for the value of the water provided. We disagree. The doctrine of res judicata prevents the parties from relitigating matters actually litigated and matters that could have been litigated in the first action. Town of Durham v. Cutter, 121 N.H. 243, 246, 428 A.2d 904, 906 (1981). "The heart of the doctrine of res judicata is that a final judgment by a court of competent jurisdiction is conclusive upon the parties in subsequent litigation involving the same cause of action." Concrete Constructors, Inc. v. The Manchester Bank, 117 N.H. 670, 672, 377 A.2d 612, 614 (1977). Modern usage of the term res judicata is broad, covering all the various ways in which a judgment in one action will have binding effect in another. Bricker v. Crane, 118 N.H. 249, 252, 387 A.2d 321, 323 (1978).

Collateral estoppel, although not applicable to this case, is an extension of res judicata which prevents the same parties, or their privies, from contesting in a subsequent proceeding on a different cause of action any question or fact actually litigated in a prior suit. Id. at 253, 387 A.2d at 323; cf. Cutter v. Town of Durham, 120 N.H. 110, 111, 411 A.2d 1120, 1121 (1980) (mutuality of parties not always required under the doctrine of collateral estoppel). Considerations of judicial economy and a policy of finality in our legal system have resulted in the development of the doctrines of res judicata and collateral estoppel to avoid repetitive litigation. Id. at 252, 387 A.2d at 323. "The decisions in this state, in the final analysis, have always turned on whether there had been a full and fair opportunity to the party estopped to litigate the issue barring him ...." Sanderson v. Balfour, 109 N.H. 213, 216, 247 A.2d 185, 187 (1968).

The Massachusetts action was instituted by the plaintiffs alleging wrongful termination of water service. Although Great Northern counterclaimed on theories of express and implied contract, the trial court denied relief to both parties. Under Rule 13(a) of the Massachusetts Rules of Civil Procedure (compulsory counterclaims) the defendants were required to state as a counterclaim "any claim for relief the court has power to give which at the time of serving the pleading the pleader has against...