James R. Gammon & a. v. David N. Valentino & a. ( 2018 )

THE STATE OF NEW HAMPSHIRE
SUPREME COURT
In Case No. 2016-0630, James R. Gammon & a. v. David N.
Valentino & a., the court on January 12, 2018, issued the
following order:
Having considered the brief, memorandum of law, and record submitted
on appeal, we conclude that oral argument is unnecessary in this case. See
Sup. Ct. R. 18(1). We affirm.
The defendants, David Valentino and his former distribution business,
Chelmsford Snacks, appeal a final order of the Superior Court (Wageling, J.),
following a bench trial, on a petition filed by the plaintiffs, James Gammon and
Alisha Patrick, for an accounting and dissolution of a partnership. The
defendants argue that the trial court erred in: (1) denying their request for a
jury trial; (2) exercising jurisdiction over a Massachusetts partnership; and (3)
determining damages without an expert.
The defendants first argue that the trial court erred in denying their
request for a jury trial, asserting that the parties’ claims and counterclaims
constituted actions at law, rather than matters in equity. A party has a right to
a jury trial in actions at law, as they existed in 1784, when the New Hampshire
Constitution was adopted. Gilman v. Lake Sunapee Props., 159 N.H. 26, 30-31
(2009). Before and after 1784, equity matters in New Hampshire were tried to
the bench. Id. at 32. The plaintiffs filed a petition for an accounting,
dissolution, and windup of a partnership, and for damages. A petition for an
accounting of partnership affairs and damages is an equitable action. McElroy
v. Gaffney, 129 N.H. 382, 387 (1987). The defendants denied that their
business relationship with the plaintiffs constituted a partnership.
Accordingly, the trial court held a jury trial on the issue of whether a
partnership existed. After the jury found that a partnership existed, the court
held a bench trial on the remaining issues. On appeal, the defendants argue
that the court deprived them of their right to a jury trial on the remaining
issues.
In McElroy, the plaintiff joined his claim for intentional infliction of
emotional distress, a tort claim, with his shareholders’ derivative action, an
equitable claim. Id. at 386-87. We held that the defendants were entitled to a
jury trial on the tort claim because it was independent of the corporate
matters. Id. Claims involving the corporation were properly tried to the bench.
Id. In this case, all of the parties’ claims and counterclaims involve
partnership affairs. Although the defendants assert that their claim for
fraudulent misrepresentation constitutes an independent tort claim, the
allegations in that claim — that Gammon concealed his failure to charge his
brother-in-law for snack foods obtained from the partnership’s inventory —
involve Gammon’s conduct in partnership affairs, an equitable matter. See id.
at 387. Accordingly, we conclude that, once the jury had determined that a
partnership existed, the trial court did not err in ruling that the defendants
were not entitled to a jury trial on the parties’ remaining issues.
The defendants next argue that the trial court lacked jurisdiction to order
an accounting, windup, and dissolution of the partnership because the
partnership was governed by Massachusetts law. Although the defendants cite
the partnership chapter of the Massachusetts statutes, they do not cite, and we
have not identified, any specific provision in that chapter that supports their
position. There is no claim that the parties formed a corporation; therefore,
cases cited by the defendants regarding the regulation of internal affairs of
corporations are inapposite. The defendants do not challenge the court’s
exercise of personal jurisdiction over them or the court’s subject matter
jurisdiction over “the affairs of partners.” RSA 498:1 (2010); see also Univ. Sys.
of N.H. Bd. of Trs. v. Dorfsman, 168 N.H. 450, (2015) (superior court is a court
of general jurisdiction with authority over actions in equity). The mere fact that
Massachusetts law may have governed the dissolution of the partnership does
not mean that the superior court, a court of general jurisdiction with
unchallenged personal jurisdiction over the defendants, lacked authority to
dissolve the partnership. For these reasons, we conclude that the defendants
have failed to demonstrate that the court lacked jurisdiction over this action.
See Coyle v. Battles, 147 N.H. 98, 100 (2001) (on appeal, appellants have the
burden to demonstrate error).
Finally, the defendants argue that the trial court erred in awarding
damages that, they assert, were not reasonably certain or supported by expert
testimony. In reviewing damage awards, we consider the evidence in the light
most favorable to the prevailing parties, in this case, the plaintiffs. Gallentine
v. Geis, 145 N.H. 701, 703 (2001). We will not disturb the trial court’s damage
award unless it is clearly erroneous. Id. “The law does not require absolute
certainty for recovery of damages.” Id. (quotations omitted). Expert testimony
is required “where the subject presented is so distinctly related to some
science, profession or occupation as to be beyond the ken of the average
layperson.” Lemay v. Burnett, 139 N.H. 633, 634, 660 A.2d 1116 (1995)
(quotation omitted).
The trial court did not award any damages for lost future profits, which
might have required the forecasting argued by the defendants. The court found
that the partnership ended in August 2008, when Valentino sold its
distribution rights to another distributor, and that its value as of that date
should be divided equally. The court determined that value to be $51,666, the
sum Valentino received from the other distributor. Separately, Valentino sold
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the remaining inventory, which the court valued at $25,000. Relying upon
Valentino’s own records, and profit and loss statements prepared by his
accountant, the court found that he retained $23,080 in profits from 2007 and
$6,763 in profits from 2008. The court found that the plaintiffs were entitled
to 50 percent of: (a) the amount received from the other distributor; (b) the
inventory sale proceeds; and (c) the retained profits, for a total of $53,254.50.
To this figure, the court added $3,000 for the six weeks in which Gammon was
not paid the $500 weekly draw he was due. From this figure, $56,254.50, the
court subtracted the $150 payment that Gammon received directly from a
customer and did not deliver to the partnership, resulting in a total damage
award of $56,104.50, the components of which were contained in the evidence
before the trial court. The court awarded no attorney’s fees. Based upon this
record, we conclude that the defendants have failed to show that the damages
were uncertain or that the trial court erred in determining damages without an
expert. See Gallentine, 145 N.H. at 703; Lemay, 139 N.H. at 634.
Affirmed.
Dalianis, C.J., and Hicks, Lynn, Bassett, and Hantz Marconi, JJ.,
concurred.
Eileen Fox,
Clerk
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