Terren v. Butler
| Decision Date | 04 October 1991 |
| Docket Number | No. 89-365,89-365 |
| Citation | 597 A.2d 69,134 N.H. 635 |
| Parties | George E. TERREN and Yacht Club Vista Condominium Association, Intervenor, v. Ella May BUTLER, Robert W. Butler and Yacht Club Vista, Inc. |
| Court | New Hampshire Supreme Court |
Wadleigh, Starr, Peters, Dunn & Chiesa, Manchester (Robert E. Murphy, Jr., on the joint brief and orally), for intervenor Yacht Club Vista Condominium Ass'n.
James O'Neill, Laconia, on the joint brief, for plaintiff George Terren.
Murphy, McLaughlin & Hemeon, Laconia (Robert L. Hemeon, on the brief and orally), for defendants.
The defendants appeal two verdicts of the Superior Court (Dickson, J.), the first in favor of Yacht Club Vista Condominium Association (Association) against Yacht Club Vista, Inc. (Declarant), Emma May Butler and Robert W. Butler in the amount of $319,428, plus costs, and the second in favor of George E. Terren against the Declarant and the Butlers for $1, plus costs and attorney's fees. We affirm the verdict in favor of the Association. We affirm damage and cost elements of the verdict in favor of Terren, but vacate the award of attorney's fees.
The Butlers, individual owners of the Saunders Bay Motel complex on Lake Winnipesaukee, incorporated the Declarant in November 1984. The corporate purpose was to hold the property for conversion into a condominium project. The Butlers were the sole shareholders and directors and also held the offices of president, vice-president and treasurer. Their attorney held the office of secretary. On January 11, 1985, the Butlers sold the motel complex to the Declarant. Following the sale and financing transaction, the complex was owned by the Declarant, encumbered by a mortgage held by Bank East of Meredith for one million dollars, and a second, purchase money mortgage held by the Butlers for 1.1 million dollars. Pursuant to RSA chapter 356-B, the condominium project was registered by the Declarant with the New Hampshire Consumer Protection and Antitrust Division of the Attorney General's office, and a public offering statement was prepared.
Based in part on this offering statement, as well as other oral representations made by the Butlers, Terren purchased six condominium units in June 1985. The construction aspects of the condominium conversion were ongoing during the summer of 1985 and were substantially completed by the end of July 1985.
George Terren's complaints about the quality of the condominium conversion began almost immediately. When his letters, sent by certified mail, were not accepted by the Butlers, he hired an engineer to document the existing problems. The engineer's report raised concerns about future damage as a result of the materials and construction techniques used. After receiving no response to his complaints, Terren filed this action in January 1986 and a complaint with the consumer protection division of the attorney general's office, seeking to have the Butlers removed as heads of the Association. In response, the Butlers made oral and written assurances that the problems would be remedied and, in fact, did make some repairs.
By June 1986, the Butlers had stepped down as heads of the Association, and the Association's new president began an investigation into defects in common areas. Again, the Butlers undertook to remedy the complaints now raised by the Association and expressed their willingness to resolve future defects.
A second comprehensive inspection by the Association's civil engineer, H. Edmund Bergeron, conducted in July 1987, questioned the foundation, support and construction of the units. A supplemental appraisal resulted in a total estimated cost of repairs to the property of $319,428. On February 25, 1988, the Association filed to intervene in this action.
At the time of trial, the condominium conversion had been completed and all units sold, or otherwise alienated, except for Unit 6, with a value of $100,000, which remained unencumbered in the hands of the Declarant. The Declarant was otherwise without assets.
Following a lengthy bench trial, the court found various instances of misrepresentation by the Declarant, in its offering statement, and by the Butlers, in various communications. The court found breach of express and implied warranties. It adopted the Association's engineer's estimate of damages as correct. Finally, it found liability in the Butlers based on their participation in the misrepresentations and due to their conduct diverting corporate assets to their benefit when substantial notice of claims were outstanding. The stated verdicts resulted.
The defendants appeal on three general bases. First, they attack the findings regarding breach of warranty. They assert that the express warranty deemed breached flows from RSA 356-B:41, II, which carries a one-year limitation that bars the Association from recovery. They contest the finding on implied warranty due to the court's reliance on Lempke v. Dagenais, 130 N.H. 782, 547 A.2d 290 (1988), which they read to apply only to new construction. Second, the defendants challenge the court's findings on individual liability of the Butlers. Lastly, the defendants claim error in the award of damages to Terren and the resulting award of attorney's fees based on the authority of RSA 356-B:65, II.
The Declarant reiterated this warranty in its public offering statement, by reference in part and expressly in part. The structural defects claimed to be warranty violations were common area defects. The record contains ample evidence to allow consideration of these defects as statutory violations and to support the trial court's finding of breach.
The defendants do not quarrel with the finding of breach. They assert that the statute and their supporting promise provide a warranty upon which an effective claim must be made within a one-year period. They point out that the Association, the plaintiff receiving the compensation for defects to the common areas, neither made an effective claim nor moved to intervene in this lawsuit during any conceivable one-year period.
We do not construe the one-year life of the statutory warranty to be a statute of limitations or even a time limit on the delivery of effective notice. The one-year period describes the life of the duty, that is, the period during which breach may occur. Effective notice of breach must be afforded within a reasonable time after discovery, and suit must be commenced within the time afforded by the appropriate statute of limitations. See Austin Co. v. Vaughn Bldg. Corp., 643 S.W.2d 113 (Tex.1983).
In the case before us, the defects accrued during the warranty period and notice was afforded the Declarant at various times, commencing with the early general complaints by Terren, followed by the detailed engineering reports. Association generated notice was delayed by the delay of the Butlers in transferring control of the Association from their hands to the condominium owners. Based on the evidence presented, the trial court would not be compelled to find the notice tardy or inadequate. RSA 508:4, I, provides the appropriate statute of limitations. Here, the cause of action accrued prior to July 1, 1986, and the appropriate limitation for suit was six years. Laws of 1986, 227:22, II (effective date for change of limitations period from six years to three years is July 1, 1986).
Since we find that...
To continue reading
Request your trial
-
U.S. v. Kattar
...or New Hampshire law, a court may pierce the corporate veil to prevent an injustice or fraud on the plaintiff. See Terren v. Butler, 134 N.H. 635, 639, 597 A.2d 69 (1991); Village Press, Inc., 120 N.H. at 471, 416 A.2d 1373 ("plaintiff must establish that the corporate entity was used to pr......
-
Dahar v. Foistner (In re Foistner)
..."disregard the fiction that the corporation is independent of its stockholders and treat the stockholders as the corporation's 'alter egos.'" Id. (citing Village Press v. Stephen Edward Co., 120 N.H. 469, 471-72, 416 A.2d 1373, 1375 (1980)). See also Terren, 134 N.H. at 639-40, 597 A.2d at ......
-
Northern Laminate Sales Inc. v. Matthews
...not `hesitate to disregard the fiction of the corporation' when circumstances would lead to an inequitable result." Terren v. Butler, 134 N.H. 635, 639, 597 A.2d 69 (1991) (brackets omitted), citing Ashland Lumber Co., Inc. v. Hayes, 119 N.H. 440, 441, 402 A.2d 201 (1979) (quoting Peter R. ......
-
Michnovez v. Blair Llc
...remedy.” LaMontagne Bldrs., Inc. v. Bowman Brook Purchase Grp., 150 N.H. 270, 274, 837 A.2d 301 (2003) (quoting Terren v. Butler, 134 N.H. 635, 640, 597 A.2d 69 (1991)). When courts pierce the corporate veil, they “assess individual liability where the owners have used the corporate identit......