Rabbia v. Rocha
162 N.H. 734
N.H.2011Background
- Harvard Auto Sales, Inc. d/b/a Hitcars.com and its principals had floor-plan financing from Automotive Finance Corp (intervenor) securing a security interest in Harvard’s inventory and proceeds.
- The plaintiff Salvatore Rabbia had a long-running dispute with Harvard settled in March 2008; the settlement funds were placed in escrow in summer 2008 totaling $37,000 plus interest.
- The escrow funds were to be paid to Rabbia upon settlement; the trial court enforced the settlement and ordered disbursement to Rabbia with interest, staying during appeals.
- The intervenor sought to intervene to recover the escrow funds, asserting a perfected security interest; Rabbia contended his title predated the intervenor’s security interest.
- Eventually, the trial court ruled the escrowed funds belonged to the intervenor; the instant appeal questions whether Rabbia or the intervenor should receive the funds and whether fees should be awarded.
- The appellate court ultimately held that Rabbia acquired title to the escrow funds free of the intervenor’s security interest, denied Rabbia’s request for attorney’s fees, and remanded on fee-related issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rabbia acquired title to the escrow funds free of the intervenor’s security interest | Rabbia argues transfer extinguished intervenor’s interest | Intervenor asserts its perfected security remained viable | Yes; Rabbia took funds free of intervenor’s interest |
| Whether the trial court properly denied attorney’s fees to Rabbia | Fees should be awarded under Rule 59 or Harkeem exception | Defense counsel conduct not in bad faith | Yes; denial of fees affirmed |
| Whether the escrow transfer affected the intervenor’s rights on remand or appeal | Transfer bars intervenor’s claim | Intervenor retains security interests | Affirmed that transfer to Rabbia precluded intervenor’s claim to the funds |
Key Cases Cited
- McCarthy Bldg. Companies v. St. Louis, 81 S.W.3d 139 (Mo. Ct. App. 2002) (escrow rules: ownership transfers upon performance of escrow conditions)
- In re Hathaway Ranch Partnership, 127 B.R. 859 (Bankr. C.D. Cal. 1990) (escrow title transfer upon condition satisfaction; equitable title precedes legal title)
- In the Matter of Scott & Pierce, 160 N.H.354 (N.H. 2010) (statutory interpretation guiding how courts read UCC provisions; reliance on official comments)
- Bendetson v. Killarney, Inc., 154 N.H.637 (N.H. 2006) (interpretation of statutory and case law in relation to transfers and priorities)