Hughes v. New Hampshire Division of AeronauticsHughes v. New Hampshire Division of Aeronautics
The plaintiffs, Donald G. Hughes and Robert W. Hughes, appeal the order of the Superior Court (McGuire, J.) granting the defendants’ motion for summary judgment. The plaintiffs sued the New Hampshire Department of Transportation, Division of Aeronautics (the State), Mark P. Hodgdon, individually and in his capacity as senior
The plaintiffs allege the following facts. On February 17, 1999, they entered into a purchase and sale agreement with KS Realty (transaction one) to purchase land, on part of which was located the Wolfeboro/Lakes Region Airport, for $2 million. The purchase and sale agreement was set to expire on March 30,1999, but was extended to March 31,1999.
In early March, the plaintiffs became aware of
The plaintiffs then entered into a second agreement with KS Realty (transaction two). By the terms of this agreement the plaintiffs loaned $900,000 to Donald Satterfield, the principal of KS Realty; he executed a promissory note and gave a mortgage on the property to the plaintiffs to secure the loan. The agreement required the plaintiffs to operate the airport. It also required them to obtain approval to subdivide the land necessary to the airport from the rest of the property and obtain an appraisal. Two sales contracts were then to be executed: one for the airport parcel and one for the remaining parcel. The State sought the details of the second agreement. The plaintiffs assured the State that it was not a purchase and sale agreement, and that if a purchase and sale agreement were signed, they would notify the State; the plaintiffs did not provide the defendants with a copy of the second agreement at this time. The plaintiffs applied for subdivision of the property.
On July 27,1999, the State filed suit against the plaintiffs and KS Realty in the Carroll County Superior Court, seeking to enjoin the subdivision of the property, and seeking a declaration that it had ninety additional days to evaluate and exercise its right of first refusal with respect to transaction one. The plaintiffs provided the defendants with a copy of the second agreement in August 1999. Transaction two expired on October 31, 1999. The plaintiffs do not allege any continuing interest in the property; it is still owned by KS Realty.
On December 23, 1999, Hodgdon sent a letter to counsel for KS Realty detailing a plan to purchase the entire parcel, contingent upon the State
The plaintiffs then brought suit against the defendants seeking: (1) a declaration that
On appeal the plaintiffs argue that the trial court erred in granting the defendants’ summary judgment motion because
We will analyze these issues in turn and as necessary. We will begin by addressing the plaintiffs’ claim that
In reviewing the trial court’s grant of summary judgment, we consider the affidavits and other evidence, and all inferences properly drawn from them, in the light most favorable to the non-moving party. If our review of that evidence discloses no genuine issue of material fact, and if the moving party is entitled to judgment as a matter of law, we will affirm the grant of summary judgment. We review the trial court’s application of the law to the facts de novo. Big League Entm’t v. Brox Indus.,
I. Facial Constitutional Challenge to
The plaintiffs argue that
We decide cases on constitutional grounds only when necessary. Appeal of Wintle,
The plaintiffs lack standing because they cannot raise the constitutional claims of another. Silver Brothers, Inc. v. Wallin,
“For any Fifth Amendment takings claim, the complaining party must show it owned a distinct property interest at the time it was allegedly taken____” Cienega Gardens v. United States,
The right to just compensation, for any part of a property taken, belongs to the owner of the property. See U.S. Const, amends. V, XIV, § 1; N.H. CONST, pt. I, art.'12; Burrows,
The right of first refusal conferred by
II. Constitutional Challenge to RSA I22A6 as Applied
The plaintiffs next argue that
Purchase and sale agreements are executory contracts. 17 C. Szypszak, New Hampshire Practice, Real Estate § 3.02[B], at 46 (2003). As such, these agreements “contain conditions that buyers set to their obligation to pay the purchase price in exchange for the real estate.” Id. One condition commonly imposed in purchase and sale agreements, see id. § 3.02[B][1], at 48, and imposed by the parties here, is that the seller possess clear title to the property. A right of first refusal has been found to affect the title to an interest in real estate, creating an equitable restriction binding on subsequent purchasers. Smith v. Wedgewood Builders Corp.,
Before the plaintiffs’ contract rights became vested, the seller was obligated to provide clear title. The seller was unable to accomplish this feat, due to the State’s right of first refusal granted by
III. Tortious Interference with Contractual Relations
We next turn to the plaintiffs’ claims against the defendants under RSA chapter 541-B, addressing first whether sovereign immunity bars the tortious interference with contractual relations claim. We note that the trial court dismissed Hodgdon and Bradley from claims arising out of state law, pursuant to
The plaintiffs first argue that the State is not entitled to sovereign immunity on this claim. Though the trial court did not directly address this issue, we do so because sovereign immunity is a question of subject matter
Pursuant to the doctrine of sovereign immunity, the State may not be sued in State court without its consent. Mahan v. N.H. Dep’t of Admin. Services,
[a]ny claim arising out of an intentional tort, including ... interference with contractual relations, provided that the employee whose conduct gives rise to the claim reasonably believes, at the time of the acts or omissions complained of, that his conduct was lawful, and provided further that the acts complained of were within the scope of official duties of the employee for the state.
The plaintiffs argue that Hodgdon and Bradley exceeded the scope of their official duties with respect to transaction one by refusing to exercise or waive the State’s right of first refusal and by attempting to invoke
In order to determine whether Hodgdon and Bradley reasonably believed they were acting lawfully and within the scope of their official duties, we must examine the statute governing their authority to act. As in all cases involving statutory interpretation, the starting point is the language of the statute. We construe each statute as a whole, and if the statute’s language is clear and unambiguous, we do not look beyond the language to discern legislative intent. If a statute is ambiguous, however; we consider legislative history to aid our analysis. Our goal is to apply
The statute at issue does not offer much detail. It does not explain what is meant by “offered for sale,” whether it means a purchase and sale agreement has been signed, or merely that the owner of the airport has posted a notice expressing his desire to sell.
Absent helpful guidance from the legislative history, we will interpret the statute in light of the plain and ordinary meanings of the words used. Estate of Ireland v. Worcester Ins. Co.,
The statute does not give an indication of how much time the State has to exercise its right of first refusal. Because no time for performance is specified, we hold under general principles of contract law, that the State must exercise or waive its right of first refusal within a reasonable time. Belleau v. Hopewell,
Regarding transaction one, we conclude that Hodgdon and Bradley had a reasonable belief their conduct was lawful, and were acting -within the scope of their official duties. Both Hodgdon and Bradley, after being notified of the pending transaction little more than twenty days before it was to be consummated, asked the parties for more time to review it before coming to a decision. We hold that the failure to exercise or waive the right of first refusal between March 8,1999, and March 31,1999, does not amount to failure to exercise the right within a reasonable time. Further, we conclude that Hodgdon’s and Bradley’s invocation of the statute, despite lacking sufficient liquid funds, does not belie a reasonable
Regarding transaction two, however, we find that there are genuine issues of material fact as to whether Hodgdon and Bradley believed they were acting lawfully and whether they were acting within the scope of their duties when they invoked
It may be the case that Hodgdon and Bradley sought to enjoin the subdivision of the property, which was one of the steps of transaction two, in a good faith attempt to exercise the State’s right of first refusal as to transaction one. However, that transaction had expired more than three months before the State sought the injunctive relief from the trial court, and it is not clear what the State knew about transaction two — especially since the plaintiffs’ actions concerning that transaction are not stipulated.
The plaintiffs have alleged that the defendants were working with private investors to finance the purchase of the airport under the terms of transaction one. The State denies this. In any event, there is no authorization for, or prohibition against, private financing in the statute. There are sufficient allegations to warrant a hearing on the issue of whether the defendants reasonably believed they were acting lawfully and within the scope of their duties, and, thus, whether the State is entitled to immunity on the plaintiffs’ claim of tortious interference with contractual relations. We remand this case to the trial court for a determination of these facts.
The trial court’s grant of summary judgment on the tortious interference with contractual relations claim is flawed because there are unresolved factual questions surrounding the State’s immunity to suit on this claim. If the State is not immune from suit, however, it still may be entitled to summary judgment on the merits of the claim. We therefore examine the trial court’s grant of summary judgment to the State on the merits of the tortious interference with contractual relations claim.
To establish liability for intentional interference with contractual relations, a plaintiff must show: (1) the plaintiff had an economic relationship with a third party; (2) the defendant knew of this relationship;
The trial court found that the State did not tortiously interfere with contractual relations because it was asserting a legally-protected interest, ie., the State’s right of first refusal granted by
However, we conclude that there are genuine issues of material fact concerning whether the State tortiously interfered with transaction two. The affidavits submitted by the plaintiffs allege that they had an economic relationship with the owner of the airport, that the State was aware of this relationship and that the plaintiffs were damaged by its interference. The State claims the law suit was filed to prevent the subdivision of the property in order to exert its right of first refusal under transaction one. The plaintiffs claim the law suit was filed to prevent the subdivision of the property so the State could pursue a third-party financing arrangement, which is neither explicitly allowed nor explicitly prohibited by
There are genuine issues of material fact as to whether the State’s actions amounted to intentional and improper interference. These issues of fact must be decided by the trial court in the first instance. Therefore, we reverse the trial court’s grant of summary judgment on the issue of tortious interference with contractual relations regarding transaction two. If the State is not entitled to sovereign immunity, the plaintiffs may proceed with this claim against it.
IV. 1,
Next we address the plaintiffs’ claims against the defendants under
Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceedings for redress----
The plaintiffs argue that the State is not immune from suit because
The plaintiffs also brought a
The plaintiffs also pursued an action under
We have employed a three-part test to determine whether a public official is entitled to qualified immunity: (1) whether a plaintiff has established a constitutional violation; (2) whether that right was clearly established at the time of the violation; and (3) whether a similarly situated reasonable official would have understood that the challenged action violated the constitutional right at issue. Porter v. City of Manchester,
As discussed above, the plaintiffs were not able to establish that they were unconstitutionally deprived of their contract rights by the defendants. The plaintiffs have not established any other violation of their constitutional rights. Therefore, Hodgdon and Bradley are entitled to qualified immunity; they cannot be sued under
V Procedural Flaw in the Defendants’ Motion
Finally, the plaintiffs argue that the defendants’ motion for summary judgment was procedurally flawed, as it was not supported by an affidavit, but instead was supported by a copy of the decision of the Carroll County Superior Court in the State’s suit against the plaintiffs. However, we do not need to decide this issue, as we are reversing the trial court’s motion for summary judgment on the only claim that can proceed. Since we hold that the trial court erred in granting summary judgment in the tortious interference with contractual relations claim against the State, if the State is not immune, we need not address the plaintiffs’ argument regarding the procedural flaws in the defendants’ motion.
VI. Conclusion
We hold that the plaintiffs lack standing to assert that
Affirmed in part; reversed in part; and remanded.