Opinion
NO. 217-2010-CV-5006
04-25-2012
Ansel Grandmaison v. Kevin Slattery, Bernard N. Plante, Edgebrook Heights, LLC, and Melton Associates, LLC
ORDER
This action involves former partners in a joint venture and was brought in five counts: (1) breach of partnership and/or joint venture; (2) intentional and/or fraudulent misrepresentation; (3) breach of fiduciary obligation; (4) conversion; and (5) violation of New Hampshire's Consumer Protection Act ("CPA") RSA 358-A. In substance, the Plaintiff, Ansel Grandmaison ("Grandmaison"), seeks an accounting of his share of partnership assets. For the reasons stated in this Order, the Court finds for Grandmaison and assesses his share of the partnership interest at $143,552, plus interest at the lawful rate on judgments under RSA 336:1 II from August 15, 2006 until Grandmaison filed this action.
I
Grandmaison and Defendants, Bernard Plante ("Plante") and Kevin Slattery ("Slattery"), all knew each other for many years. Grandmaison was a scrap metal dealer and the Defendants were in the real estate development business. The parties had worked together on various business transactions through the years. On January 15, 2006, Grandmaison approached Plante and Slattery and told them he had learned of two unassembled commercial buildings stored in Massachusetts, owned by Cisco Systems ("Cisco"). Apparently, Cisco had purchased steel in order to build two office buildings, and then Cisco decided not to complete the structures. Cisco wanted to sell the steel as scrap and have it removed. Cisco contacted Grandmaison for this. Grandmaison came up with the idea of buying the unassembled steel building components and then re-selling them.
He contacted Plante and Slattery. The three had a general discussion and agreed that they would set up a partnership under which they would each have a one-third ownership interest in the steel. The parties then put together a rough outline of the business deal. They secured use of the name "Burch Street Steel, LLC" ("Burch Street") for their joint venture. The parties eventually drafted an operating agreement, but none of them ever executed it, and none of the parties ever registered the partnership with the Secretary of State. Rather, evidence of the terms of the parties' agreement is by stipulation and admission only. The purpose of the partnership was to sell the steel retrieved from Cisco as two whole unassembled buildings. The partners agreed that all of the expenses and profits would be shared equally. The partners understood that Grandmaison would be responsible for managing and organizing removal of the steel from Cisco's warehouse, and Plante and Slattery would "front" the costs for that effort. Pl.'s Am. Post-Trial Mem. 1-2.
Although the three participants never formally became a partnership, as discussed infra, they can be treated as a partnership. Accordingly, they will be referred to herein as partners, and the entity they utilized will be referred to as "Burch Street."
Within days of this initial discussion, the partners struck a deal with Cisco that required the 1,400 tons of steel be removed by March 15, 2006. As part of their agreement, Melton Associates, LLC ("Melton"), an entity organized and owned exclusively by Plante and Slattery, executed a Bill of Sale and Agreement for the purchase of Cisco's steel. The actual purchase price for the steel was $135,000. In addition, Burch Street paid $75,000 for the HVAC units for the two unassembled buildings.
The purchase price started at $205,000 but Cisco refunded $50,000 when the parties removed the steel by Cisco's pre-set deadline of March 15, 2006. It also paid Scrap Metal Inc., Grandmaison's business, $20,000 when the transportation was completed according to the terms of the transportation agreement. Grandmaison worked consistently from January until March of 2006 to transfer all the steel out of Cisco's warehouse by the Cisco-imposed deadline. The parties dispute how this relocation was financed.
Cisco returned this $20,000 directly to Grandmaison because Scrap Metal Inc. contracted with Cisco to transport the steel. Grandmaison returned this $20,000 to the partnership, but none of the parties claim this money constitutes part of Grandmaison's contribution to the partnership because the entire steel relocation actually cost somewhere between $350,000 and $ 450,000.
According to Grandmaison, because Melton already carried insurance, Plante simply added the vehicles used by Grandmaison to Melton's existing insurance policy. Melton paid movers through its existing personnel system, and it financed transportation costs. Additionally, the parties rented space to store the steel and insured it. From Plante's testimony, it appears that that the cost of moving the steel was mostly borne by the partnership through Melton, by Plante's relatives, and by Plante's other businesses, which reimbursed his and Slattery's employees involved in relocating the steel. Nonetheless, Grandmaison represents, and the partners do not dispute, that he used his own equipment and man hours from his business to move the steel. Grandmaison never billed for his time, equipment, or fuel spent in transporting the steel to a leased storage location. Pl.'s Am. Post-Trial Mem. 4-5. Grandmaison never billed for this time because the partners had agreed they would not bill Burch Street for their individual labor. Grandmaison could not quantify the expense, but testified that the move cost his business six weeks of time and some equipment use.
In April of 2006, Burch Street believed it would be able to sell or lease-to-sell one or both of the buildings to Cabot, Cabot, and Forbes (CC&F), a real estate company. The approximate value of this deal was $1.7 million and included further transportation of the structures. This deal did not go through, and Burch Street was left with the continuing carrying costs of storing and insuring the steel. Shortly after this deal fell through, in May of 2006, with no buyer in sight and carrying costs mounting, Plante and Slattery began discussing the possibility of a deal with Gutierrez Construction Co. ("Gutierrez").
By that time, it was apparent to Plante and Slattery that Grandmaison would not be able to honor his agreement to contribute to the partnership's expenses. In fact, Grandmaison admitted that he "did not, at any time during 2006, have the financial capacity to contribute his 1/3 share of the costs to purchase, transport and store the Cisco Buildings." Pl.'s Resp. to Req. for Admis. ¶ 22. Between April 10, 2006 and June 12, 2006, Grandmaison had transferred $90,000 to Melton as his contribution to Burch Street. Grandmaison had to borrow part of this $90,000. By the summer of 2006, Plante and Slattery had both invested approximately $250,000 in the deal, and Burch Street was paying storage costs on a monthly basis. Plante and Slattery approached Grandmaison on several occasions attempting to buy him out or settle his debt to the partnership. Grandmaison rebuffed all such attempts. The parties introduced settlement negotiations, without objection, to establish Plante and Slattery's good faith attempts to negotiate or settle.
Grandmaison claims that "[a]ccording to the Defendants' accounting records . . . Grandmaison's contribution of cash, time and labor closely approximated the investments made by Slattery and Plante as of June 1, 2006." Pl.'s Am. Post-Trial Mem. 4. The Court does not credit this testimony. What is undisputed is that Grandmaison had invested only $90,000, far less than the $250,000 contributed by Plane and Slattery, and he did not have the ability to invest further funds despite his representations to the contrary.
Eventually, Plante and Slattery met with Gutierrez about selling the steel. Gutierrez declined to buy the steel but offered to swap it for approximately 32 acres of commercial property Gutierrez owned in Merrimack, New Hampshire ("Merrimack properties"). By June 8, 2006, Plante was actively negotiating with Gutierrez. Slattery and Plante are experienced real estate developers but are not in the business of building, owning, or selling commercial buildings. Thus, they believed the best opportunity they had to get out of the steel business was to swap the steel with Gutierrez for property. In fact, Grandmaison agreed with this decision; "Grandmaison did not object to the Gutierrez transaction, instead he thought it was a good idea." Pl.'s Am. Post-Trial Mem. 11.
On July 18, 2006, Slattery met with Grandmaison and told him that the he was not welcome to remain in the partnership. Slattery testified that he explained to Grandmaison that it made no sense for Grandmaison to remain in the partnership as the only avenue left for sale of the steel was likely via a land swap transaction. Moreover, Grandmaison did not have the financial resources necessary to contribute to a land development venture. On July 27, 2006, Plante and Slattery formed Edgebrook Heights, LLC ("Edgebrook").
Some time shortly after Grandmaison and Slattery met in July of 2006, Plante offered Grandmaison $500,000 on behalf of himself and Slattery to give up his interest in Burch Street. This offer is significantly higher than a one-third interest in $967,500, the stipulated value of the real estate on August 15, 2006, even excluding the expenses of $538,423 the parties hae stipulated were incurred by that date. The parties also stipulated that the partnership expenses incurred by Burch Street as of August 15, 2006 totaled $538,423. Grandmaison did not accept Plante's $500,000 offer and told Plante he would think about it for a while.
On August 15, 2006, Edgebrook transferred the steel to Gutierrez in exchange for the Merrimack properties. Pl.'s Am. Post-Trial Mem. 5. Edgebrook took title to the Merrimack properties. Three years later, on July 22, 2009, Edgebrook sold 50 percent of the property to Peter Nash, another developer. Edgebrook grossed $450,000 on the deal. In addition, Edgebrook earned half of $12,000 in timber proceeds from logging activities on the Merrimack properties.
II
Grandmaison's claim as to his share of partnership assets is twofold. First, he argues that under RSA 304-A:18 his "sweat equity" in arranging for the transport of the property should be considered as part of his contribution. Second, he asserts that Plante and Slattery violated their fiduciary obligations to him. Grandmaison argues that the "unilateral expulsion" from the partnership violated the appropriate standard of behavior for partners in a joint venture. Pl.'s Am. Post-Trial Mem. 11. He also seeks damages under the consumer protection act, RSA 358-A, attorneys' fees, and punitive damages.
Plante and Slattery, on the other hand, argue that they never breached their fiduciary duties to Burch Street or Grandmaison. They believe Burch Street ended when they transferred the only asset of the venture, the steel, on August 15, 2006. They argue, "Grandmaison's failure to disclose his inability to fulfill his financial obligations to the partnership was a breach of his fiduciary obligations to the defendant partners." Defs.' Post-Trial Mem. 8. "Mr. Grandmaison materially breached the partnership agreement by his failure to pay his share of overhead costs." Id.
A
Grandmaison cannot succeed on the theories he asserts. Plante and Slattery did not breach the partnership agreement because they acted in the best interests of Burch Street in dissolving and winding up Burch Street's assets. There is insufficient evidence to find that there was any intentional or fraudulent misrepresentation. Grandmaison cannot maintain his conversion claim because he has not properly brought it on behalf of Burch Street. Finally, the swap transaction at issue does not fall under the CPA.
What appears to have occurred is that the parties decided to enter into an agreement based on an opportunity Grandmaison found because the parties had successfully done business together in the past. Grandmaison claims that Plante and Slattery intentionally deceived him into providing them with information about the availability of the Cisco assets. Decl. ¶ 34. Grandmaison further alleges that he was tricked into spending time, labor, and capital to transport and secure ownership of the Cisco steel on a timely basis. Grandmaison even claims it was part of Plante and Slattery's intention to coerce him into storing the steel at a facility the parties jointly controlled. Decl. ¶¶ 34-37.
However, Grandmaison presented no evidence of fraud and certainly no evidence that would satisfy the standard of clear and convincing proof. Hair Excitement v. L'Oreal, 158 N.H. 363, 369 (2008). Rather, it appears that this unfortunate case arises from the failure of the parties to reduce their agreements to writing, and Grandmaison's inability to meet his capital commitments. The parties were long time acquaintances and had done business together before. The Court credits the argument by Plante and Slattery that Grandmaison probably believed the property would be sold quickly before he had to perform on his agreement to share expenses.
B
The fiduciary duties owed in this case are those created under partnership law. Although the parties in this case never formally executed their partnership agreement and never filed with the Secretary of State, "[p]arties in a joint venture stand in the same relationship to each other as partners in a partnership." Royal Oak Realty Tr. v. Mordita Realty Tr., 146 N.H. 578, 581 (2001) (citing Coe v. Watson, 126 N.H. 456, 458 (1985)) (quotation and citation omitted). RSA 304-A:21, I, states:
Every partner must account to the partnership for any benefit, and hold as trustee for it any profits derived by him without the consent of the other partners from any transaction connected with the formation, conduct, or liquidation of the partnership or from any use by him of its property.In addition, each partner owes the partnership and other partners the duty of loyalty in all matters. See e.g., Miami Subs Corp. v. Murray Family Tr., 142 N.H. 501, 513 (1997). A partner is a fiduciary as to his other partners. RSA 304-A:21. Grandmaison argues that the partners' agreement "required that [Plante and Slattery] hold Grandmaison's partnership interest in trust, by, among other things, including him as a member of Edgebrook." Pl.'s Post-Trial Mem. 12. The Court is not persuaded.
The partnership was dissolved on August 15, 2006 when its assets were conveyed and Grandmaison was, in substance, expelled. In New Hampshire, when reviewing dissolution, a court must first determine "whether the partnership was at will, for a definite term, or for a particular undertaking. A partnership at will is a partnership that is not formed for a particular undertaking or a specific duration of time." Miami Subs, 142 N.H. at 508 (emphasis in original). For purposes of the Uniform Partnership Act, a "particular undertaking" must be capable of being accomplished in some definite time. Id. at 509. When a partnership is "at will," a partner may dissolve the venture at any time. Miami Subs, 142 N.H. at 501; RSA 304-A:31. That dissolution is not wrongful, and the partners are entitled to their share of the partnership assets and their contribution to the venture upon dissolution. RSA 304-A:38, I. Courts are reluctant to interpret a joint venture's term when the parties themselves are uncertain about it. See Stone v. Stone, 292 So. 2d 686, 691 (La. 1974) (noting that public policy favors freedom of individuals, and "the partnership relationship is essentially founded on mutual trust and confidence and terminable when such cease . . . so that a construction favoring freedom to dissolve should be given as against one limiting the right to do so, in the absence of specific intention to the contrary.").
In this case, the parties each assert that Burch Street existed to dispose of the Cisco steel. Initially when the parties undertook the venture, they did not know how long the endeavor would last. Certainly, the parties hoped the venture would end shortly after it began, but they could not be sure when or if it would be sold. The steel was eventually swapped for land and not sold. Thus, it is apparent that the parties were uncertain about how they would dispose of the steel and how long it would take. Because the parties here were uncertain about the duration of the venture, this partnership must be considered a partnership at will.
Alternatively, when Grandmaison knew he could not contribute an equal amount of capital to that contributed by Plante and Slattery, yet he repeatedly told Plante and Slattery he would, he breached his fiduciary duties to the joint venture. RSA 304-A:20; see Miami Subs, 142 N.H. at 513 (parties have a duty to "render on demand true and full information of all things affecting the partnership to any partner . . . ."). Because Grandmaison was not participating in the joint venture to the extent the parties had agreed and because he was withholding information regarding his finances, judicial dissolution would have been proper. RSA 304-A;38; see also, Cobin v. Rice, 823 F.Supp. 1419, 1425-26 (N.D. Ind. 1993) (finding that failure to contribute to "cash call" constituted grounds for dissolution of partnership under similar partnership statute as New Hampshire); Hansford v. Maplewood Station Bus. Park, 621 N.E.2d 347, 351-52 (Ind. Ct. App. 1993) (finding dissolution appropriate when partner refused to input equal amount of capital or to participate in venture).
Under either analysis, Burch Street dissolved on August 15, 2006, when the land swap transaction occurred and the partnership assets were conveyed. Although Plante and Slattery should have sought judicial dissolution, Grandmaison is not blameless in the dissolution of Burch Street. See RSA 304-A:31, VI; RSA 304-A:32, I(b); RSA 304-A:38, I (discussing the rights of partners to finances of partnership when dissolution is not wrongful). He is not entitled to damages for Plante and Slattery's dissolution.
2 ALAN R. BROMBERG & LARRY E. RIBSTEIN, BROMBERG & RIBSTEIN ON PARTNERSHIP § 7.03(g) (2007) ("BROMBERG ON PARTNERSHIP") (partners should "seek a judicial decree of dissolution rather than to exercise self-help by expelling the misbehaving partners or dissolving by express will. This may be the only way the wronged partners may obtain the benefit of the full remedies for the wrongful conduct.").
Nonetheless, Plante and Slattery still owed Grandmaison certain fiduciary duties during the winding up of the partnership business. Plante and Slattery's actions converting Burch Street's sole asset certainly constituted a breach of their fiduciary obligations. See RSA 304-A:21. When Plante and Slattery disposed of Burch Street's asset by swapping it with Gutierrez, they were required to share the benefit derived with Grandmaison via Burch Street. Instead, Plante and Slattery kept this benefit for themselves by way of Eastbrook. Plante and Slattery never transferred money from Edgebrook back to Burch Street to represent the cost of the steel or the value of Burch Street's sole asset. They never notified Grandmaison that they had taken possession of Burch Street's sole asset to be sold in this manner. When Plante and Slattery sold part of the Merrimack properties in 2009, they never offered Grandmaison or Burch Street their share of the proceeds from that sale. They never transferred the value of the steel transaction back to Burch Street, and they never accounted for the value of the transaction to Burch Street or Grandmaison. At each of these transactions, Plante and Slattery breached their fiduciary duties to Burch Street and Grandmaison.
Plante and Slattery's actions amount to conversion of partnership assets. However, this does not mean that Grandmaison's conversion claim succeeds. "The gist of the action of conversion is the proof of wrongful deprivation of property to one entitled to possession." Pac. & Atl. Shippers, Inc. v. Schier, 109 N.H. 551, 554 (1969). Grandmaison, Plante, and Slattery, as partners in Burch Street, each had the right to possession of the partnership property; the steel. When Plante and Slattery transferred this property to Gutierrez through an unrelated partnership, Eastbrook, and then the unrelated partnership took possession of the swap proceeds, they converted the Burch Street property to their own property. Burch Street no longer had possession of the steel or proceeds from the swap. See RSA 304-A:25. Because the true aggrieved party is Burch Street and because the individual partners only have the right to possess the property by virtue of it being partnership property, Grandmaison has no standing to bring a conversion action on his own behalf. 2 BROMBERG ON PARTNERSHIP § 5.05(b). He may only bring it derivatively on behalf of the joint venture. Grandmaison therefore cannot maintain this cause of action against Plante and Slattery.
Nonetheless, by engaging in an act of conversion of partnership property, Plante and Slattery breached their fiduciary obligations to Burch Street and Grandmaison. The remedy for a fiduciary duty breach is an accounting for the benefit derived. 2 BROMBERG ON PARTNERSHIP § 6.07(i).
IV
The remaining issue is thus what Grandmaison's share of the partnership is worth. In the absence of any contrary agreement, on dissolution of the joint venture, each member is entitled to the value of his contribution and an equal share in any net profit or surplus. Coe, 126 N.H. at 458 (citing RSA 304-A:18). The parties stipulated prior to trial that the value of Merrimack properties was $967,500 as of August 15, 2006—the date the Defendants conveyed the steel to Gutierrez and received title to the Merrimack properties. The parties also stipulated that the expenses and costs incurred by Burch Street as of August 15, 2006 totaled no less than $538,423. This information produces the following:
+----------------------------------------+ ¦ ¦Total ¦ +-------------------------------+--------¦ ¦Stipulated Value of Real Estate¦$967,500¦ +-------------------------------+--------¦ ¦Stipulated expenses ¦$538,423¦ +-------------------------------+--------¦ ¦Gross Profit ¦$429,077¦ +-------------------------------+--------¦ ¦1/3 Share per partner ¦$143,026¦ +----------------------------------------+ Each partner would have been entitled to profits of approximately $143,026, assuming all other factors were equal. However, all other factors are not equal.
Each partner originally agreed to share profits and losses equally. This would require each partner to contribute $179,474. Grandmaison only contributed $90,000. Any recovery to which Grandmaison might be entitled must contemplate the amount of capital he never contributed. This amount is the difference between $179,474 and $90,000 or $89,474. Grandmaison's recovery must be reduced by this amount. Grandmaison is entitled to recover $143,026 minus $89,474 or $53,552 as his share of Burch Street gross profits. In addition, Grandmaison is entitled to a return of his investment. Thus, his final recovery totals $90,000 plus $53,552 or $143,552.
Grandmaison argues that he should also be credited with, at minimum, an additional $50,000 because this is the amount of money refunded to the partnership by Cisco for timely removal of the steel. As will be discussed infra, the Court rejects this argument as unsupported by the record.
While Plante and Slattery did not account to Grandmaison for his interest, it is undisputed that they offered him $500,000 in 2006. This offer is more than three times the amount the parties agreed his interest in the asset was worth on that date, yet Grandmaison rejected the offer. Grandmaison does not have clean hands because he admits that the parties agreed to share expenses and that, despite his representations to the contrary, he did not have the financial ability to invest his one-third of the expenses. Nonetheless Plante and Slattery have had the use of Grandmaison's $143,552—his $90,000 capital contribution and share of the profits—since 2006.
Under the circumstances, the principles of equity require that Plante and Slattery pay Grandmaison interest on his asset from the date of the dissolution, August 15, 2006. In re Guardianship of Dorson, 156 N.H. 382, 386 (2007) ("Equitable remedies are particularly within the sound discretion of the trial court."); In re Nyhan, 147 N.H. 768, 771 (2002) (discussing equitable powers of court to charge interest to account for the time value of money in divorce distribution). The interest awarded shall be simple interest at the lawful rate. See Metropolitan Property & Liability Ins. Co. v. Ralph, 138 N.H. 378, 384-85 (1994). Such an order does not punish Plante and Slattery or reward Grandmaison. It merely puts them in the position they would have been had Plante and Slattery accounted for Grandmaison's interest in Burch Street in 2006, as required by New Hampshire's Uniform Partnership Act.
Grandmaison, however, argues that he is also entitled to his "sweat equity" for transporting the steel between January and March of 2006. Alternatively, Grandmaison requests that the $50,000 he secured for Burch Street, as a return of the steel purchase price, be credited as part of his partnership contribution. Neither of these claims is supported by the evidence.
Grandmaison might be entitled to some compensation for his sweat equity, but he has not established that he actually bore any cost other than that which was agreed to. Slattery testified that during the six weeks it took for Grandmaison to move the steel, his other businesses continued operating. This was a point of emphasis for Grandmaison at trial. He alleges that because his business stood still while he relocated the steel, but Plante and Slattery's businesses continued operating, he should be reimbursed for his time and effort. As already discussed, the parties dispute the details of the steel relocation. Plante testified that Melton financed much, if not all, of the steel move. Grandmaison admits that Melton facilitated the relocation but still claims he was not reimbursed for labor or fuel. Grandmaison contradicted himself at trial when he admitted that Melton paid for fuel.
Although the parties dispute the details of the steel transaction, it is clear that Grandmaison was not the only individual, and his business was not the only entity, involved in moving the steel. Melton, some of Plante and Slattery's employees, and truckers and movers hired by Melton, also helped move the steel. Thus, at best, some portion of the $50,000 is attributable to Grandmaison. Because he has not shown that he was responsible for securing more than one-third of the $50,000, Grandmaison is not entitled to bolster his capital contribution with the purchase-price refund or any portion thereof. Grandmaison bears the burden of proving how much he contributed to the partnership, and he has not met this burden.
V
Grandmaison also seeks damages for violation of the Consumer Protect Act, RSA 358-A ("CPA"). Whether the CPA is applicable to a transaction is a question of law because the issue to be determined is whether the activity engaged in is "trade or commerce" within the meaning of RSA 358-A:2. Green Mt. Realty Corp. v. Fifth Estate Tower, LLC, 161 N.H. 78, 82-83 (2010); Chase v. Dorais, 122 N.H. 600, 601 (1982). The CPA only applies to business transactions and not to transactions that are "strictly private in nature, and [are] in no way undertaken in the ordinary course of a trade or business." Hughes v. DiSalvo, 143 N.H. 576, 578 (1999) (quoting Lantner v. Carson, 373 N.E.2d 973, 975 (Mass. 1978)). The purpose of the CPA "is to ensure an equitable relationship between consumers and persons engaged in business." Hughes, 143 N.H. at 578-89 (quoting McGrath v. Mishara, 434 N.E.2d 1215, 1222 (Mass. 1982)).
The Massachusetts Supreme Judicial Court has recently stated, in interpreting the Massachusetts CPA statute, that to determine whether a transaction is a personal or business transaction, a court must consider the nature of the transaction, the character of the parties involved, the activities of the parties, whether similar activities have been undertaken in the past, whether the transaction is motivated by business concerns, and whether the participant played an active role in the transaction in the past. Milliken & Co. v. Duro Textiles, LLC, 887 N.E.2d 244, 260 (Mass. 2008) (citing Begelfer v. Najarian, 409 N.E.2d 167, 176 (Mass. 1980)). Applying these standards, the Court held that Plaintiff's one-time effort to secure the payment of its trade debt were not within the ambit of the statues. Id.
Similarly, the New Hampshire Supreme Court has emphasized that a transaction is private or personal if it is an isolated event, not conducted in the ordinary course of business, or if the parties are on equal footing. See Hughes, 143 N.H. at 578-79. In Hughes, the Court held that a failed real estate sale was a personal transaction where it was an isolated event and the plaintiff was not a real estate professional in the business of renting or selling property. Id. In Snierson v. Scruton, 145 N.H. 73, 81 (2000) the Court noted that while a seller of real estate cannot be held liable for an isolated transaction, "a realtor engaging in deceptive or misleading actions while conducting his business falls within the purview of the statute."
Here, the formation of the partnership and the purchase of the unassembled steel buildings involved a personal sale, like the Hughes transaction. 143 N.H. at 578-79. Plante and Slattery were not in the business of selling steel buildings. The parties were on equal footing when the formed the partnership because they were all experienced businessmen. Though this was a "business transaction," in that, it involved the transfer of property and agreements, between businessmen, it was not a "business transaction" for the purpose of the CPA. Milliken & Co., 887 N.E.2d at 564-565. The CPA is intended to protect consumers from unscrupulous business practices. It is not intended to protect experienced businessmen, on equal footing, from one another. Plante and Slattery have substantial amounts of experience developing real estate, but they had no prior experience selling steel buildings that would give them an advantage over Grandmaison. Indeed, Grandmaison ran his own scrap metal business. Considering the "activity involved, the nature of the transaction, and the parties" involved, the Court finds that the steel venture involved in this case was not a "business transaction" within the meaning of the CPA. Hughes, 143 N.H. at 578. Under these circumstances, the CPA is inapplicable. Even if the CPA applies, the facts of this case do not support a CPA claim, because there is no evidence of deceit or misrepresentation by Plante or Slattery. See Beckstead v. Nadeau, 155 N.H. 615, 619 (2007).
VI
Grandmaison is not entitled to attorney's fees or punitive damages. Conduct that justifies an award of attorneys fees under New Hampshire law involves circumstances where one party acted in bad faith vexatiously, wantonly, or for oppressive reasons where the litigant's conduct has been characterized as unreasonably obdurate or obstinate, or where it should have been unnecessary for the successful party to have brought the action. See Harkeem v. Adams, 117 N.H. 687, 690-91 (1977).
Plante and Slattery made good faith efforts to settle with Grandmaison both before and after the land swap transaction. They also tried to pay him his share of the partnership assets, which he rebuffed. Grandmaison failed to live up to his obligation to share equally in the partnership expenses. Plante and Slattery did not act in bad faith by expelling him from the partnership. Because Plante and Slattery had already tried to pay Grandmaison his share of the partnership assets and more, and he refused to accept this offer, it was not unreasonable for Plante and Slattery to move forward with the steel swap without Grandmaison. Because Grandmaison refused to accept any settlement or monetary offers from Plante and Slattery, the parties would have been forced to come to court to resolve this dispute at some point. Thus, Plante and Slattery did not act unreasonably or in bad faith, and Grandmaison is not entitled to attorney's fees.
Finally, it has been settled for over 140 years that the New Hampshire constitution forbids punitive damages. See Faye v. Parker, 53 N.H. 342, 397 (1872); see also, Vratsenes v. N.H. Auto, Inc., 112 N.H. 71, 73 (1972). Grandmaison's recovery is limited to his portion of the land swap proceeds, less the capital he never invested, and his original investment, amounting to $143,552, plus interest on judgments under RSA 336:1 II at the lawful rate from August 15, 2006 to the date Grandmaison filed this action.
Grandmaison is entitled to interest from the date of the institution of suit under RSA 524:1-a.
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SO ORDERED.
_________________
Richard B. McNamara,
Presiding Justice
RBM/mrs