Jeffrey Frost & A. v. Michael Delaney & A
168 N.H. 353
| N.H. | 2015Background
- Plaintiffs Jeffrey Frost, Frost Family, LLC, and Chretien/Tillinghast, LLC challenged actions by NH officials arising from a Department investigation and a search warrant executed in Feb. 2010 alleging unlicensed mortgage lending under RSA ch. 397‑A. Frost was arrested; the district court later suppressed evidence and dismissed criminal charges for lack of probable cause based on a material misrepresentation in the warrant affidavit.
- The Department then initiated administrative proceedings; plaintiffs obtained a preliminary injunction in superior court, and this Court affirmed that Frost, Frost Family, and Chretien were not mortgage bankers/brokers under RSA ch. 397‑A in Frost v. Comm’r, N.H. Banking Dep’t, 163 N.H. 365 (2012).
- Plaintiffs sued State officials under 42 U.S.C. § 1983 (Fourth and Fourteenth Amendment claims) and brought negligent‑supervision claims against supervisory officials (Hildreth, Desfosses, Delaney, the State, and the Banking Department).
- The superior court granted summary judgment for defendants on § 1983 claims, finding qualified immunity for bank examiner Kathleen Sheehan, and dismissed negligent‑supervision claims against Hildreth and Desfosses as barred by absolute prosecutorial immunity.
- On appeal, plaintiffs challenged the qualified immunity ruling for Sheehan (arguing incompetence, recklessness, misapplication of standards, and that her statements were ministerial) and the dismissal of negligent‑supervision claims; defendants cross‑appealed but did not brief issues.
- The Supreme Court of New Hampshire affirmed: qualified immunity applied to Sheehan because the law was not “clearly established” that equating “mortgage banker” with “mortgage lender” violated constitutional rights at the time; and prosecutorial immunity properly barred the negligent‑supervision claims against Hildreth and Desfosses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Sheehan is entitled to qualified immunity for statements in warrant application | Sheehan misrepresented material facts and was plainly incompetent; immunity should not apply | A reasonable official could have believed "mortgage banker" equated with "mortgage lender" given Department practice | Qualified immunity applies; law was not clearly established that her conduct violated rights |
| Whether Sheehan’s alleged incompetence or reliance on Department policy defeats immunity | Incompetence and ignorance of the law render qualified immunity unavailable | Reliance on an understood departmental policy is objectively reasonable | Court rejects incompetence argument; officials of reasonable competence could disagree |
| Whether the court applied an objective standard (vs. subjective good‑faith) | Trial court relied on Sheehan’s subjective good faith rather than objective reasonableness | Trial court considered Department policy and applied objective analysis of reasonableness | Court finds the trial court applied correct objective standard |
| Whether negligent‑supervision claims against Hildreth and Desfosses are barred by prosecutorial immunity | Plaintiffs: supervisors’ failure to supervise should not be protected because Sheehan lacked immunity | Defendants: their conduct was analogous to prosecutorial functions and is absolutely immune | Dismissal affirmed; absolute prosecutorial immunity shields Hildreth and Desfosses |
Key Cases Cited
- Harlow v. Fitzgerald, 457 U.S. 800 (1982) (establishes modern qualified immunity standard)
- Anderson v. Creighton, 483 U.S. 635 (1987) (objective legal‑reasonableness inquiry for qualified immunity)
- Malley v. Briggs, 475 U.S. 335 (1986) (qualified immunity protects reasonable but mistaken judgments)
- Pearson v. Callahan, 555 U.S. 223 (2009) (flexible two‑pronged qualified immunity framework)
- Tolan v. Cotton, 134 S. Ct. 1861 (2014) (summary judgment and qualified immunity review must view facts in light most favorable to non‑movant)
- Van de Kamp v. Goldstein, 555 U.S. 335 (2009) (absolute prosecutorial immunity protects traditional prosecutorial functions)
- Frost v. Comm’r, N.H. Banking Dep’t, 163 N.H. 365 (2012) (NH Supreme Court held plaintiffs were not mortgage bankers under RSA ch. 397‑A)