2004-576, 2004-716, CHARLES L. GREENHALGH, ESQ., TRUSTEE UNDER THE ROBERT W. HALLMAN IRREVOCABLE LIFE INSURANCE TRUST v. PRESSTEK, INC.

obligations under a “Split Dollar Agreement.” The defendant, Presstek, Inc., denying his request for declaratory judgment regarding the parties’ rights and the Superior Court (Hicks, J.) rejecting his claim for breach of contract and The Robert W. Hallman Irrevocable Life Insurance Trust, appeals an order of DALIANIS, J. The plaintiff, Charles L. Greenhalgh, Esq., Trustee Under

the brief, and Ms. Rice orally), for the defendant. Orr & Reno, P.A., of Concord (Emily Gray Rice and Martha Van Oot on

brief and orally), for the plaintiff. The Law Office of Wayne J. Rice, of Poway, California (Wayne J. Rice on the Godward LLP, of San Diego, California (Amy Hallman Rice on the brief), and Hamblett & Kerr igan, of Nashua (J. Daniel Marr on the brief), Cooley

2004 - 716 Nos. 2004 - 576 Hillsborough – s outhern judicial district

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. O pinions are available on the Internet by 9:00 Errors may be reported by E - mail at the following address: errors in order that corrections may be made before the opinion goes to press. Hampshire, One Noble Drive, Concord, New Hampshire 03301, of any editorial Readers are requested to notify the Reporter, Supreme Court of New well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule p. 2 22 as 2

premiums on the Policy. Presstek rejected this suggestion and the parties did Agreement and Release to reflect that Presstek would continue to pay the Hallman’s counsel requested that Presstek add a clause to the Separation Agreement and Release and proposing various changes. In the letter, Hallman sent a letter to the Board responding to the draft Separation made the April p. 2 2002 premium payment. On April 12, 2002, counsel for Agreement and Release for his review and acceptance. Presstek nonetheless prior to the meeting, the Board presented Hallman with a draft Separation president and CEO, but did not otherwise address his employment. However, On April 3, 2002, the Board voted to remove Hallman as Presstek’s

his employment with Presstek, Inc. for any ot her reason but retirement.” receivership or dissolution of Presstek; or (c) “Robert W. Hallman terminates of the following events: (a) cessation of operation by Presstek; (b) bankruptcy, Agreement provided for its termination upon the occurrence of any one or more the death benefit under the policy. Article IV, section 4.1 of the Split Dollar payments made, and the Trust beneficiaries were to receive the remainder of Hallman died, Presstek was entitled to reimbursement for all premium amount of $35,645.00. The Split Dollar Agreement provided that wh en Agreement, Presstek paid the annual premium on the policy each April in the plaintiff’s “right, title and interest in” the policy. Under the Split Dollar plaintiff also executed a collateral as signment assigning to Presstek the trustee of the Trust, entered into a Split Dollar Agreement with Presstek. The Hallman’s wife, children and grandchildren. That same day, the plaintiff, as (policy). Under the Trust terms, the only beneficiaries of the Trust were holding a life insurance policy from Sun Life Assurance Company of Canada the Robert W. Hallman Irrevocable Life Insurance Trust (Trust) as a means of July 9, 1999, Hallman, as grantor, and the plaintiff, as trustee, entered into officer, to acquire split dollar whole life insurance policies for Hal lman. On On December 8, 1998, the Board authorized Neil Rossen, chief financial

required by law. compensation or other benefits for any period after termination, except as employment agreement provided that Hallman had n o right to receive by the preceding June 30. If Presstek terminated Hallman for cause, the renewed for successive one - year periods unless either party gave written notice employment agreem ent ended on September 30, 1999, but was automatically 17, 1998 employment agreement. The term of employment under the employment were initially set forth in a July p. 2 29, 1998 letter and a September of directors (Board) on or about September 21, 1998. The terms of his as Presstek’s chief executive officer (CEO) and as a me mber of Presstek’s board The trial court found the following facts. Robert W. Hallman began work

payments it made pursuant to the Split Dollar Agreement. We affirm. cross - appeals th e trial court’s denial of its request to recover premium p. 3 3

recover the premium payments it made pursuant to the Split Dollar Agreement. appeal, Presstek contends that the trial court erred by denying its request to Agreement when he signed the Separation A greement and Release. On cross by its terms; and (2) Hallman released the Trust’s rights under the Split Dollar trial court erred by concluding that: (1) the Split Dollar Agreement terminated Presstek’s motion for recons ideration. On appeal, the plaintiff argues that the denied this motion and on September 22, 2004, the trial court denied pursuant to the Split Dollar Agreement. On August 2 p. 3 3, 2004, the trial court Presstek filed a post - trial motion to recover premium payments it made

failed to present evidence in support o f it. trial court also concluded that Presstek had waived its counterclaim as it had contractual obligation to make annual premium payments on the policy. The had not bre ached the Split Dollar Agreement, and had no present or future contract. By order dated July 27, 2004, the trial court concluded that Presstek duty of good faith and fair dealing. Presstek filed a counterclaim for breach of The plaintiff also asserted claims for breach of contract, and breach of implied the annual premium payments in accordance with the Split Dollar Agreement. judgment that Presstek had a present and future contractual obligation to pay On May 9, 200 p. 3 3, the plaintiff brought a petition for a declaratory

provision in the policy. However, the policy is still in place pursuant to an automatic loan p remium 2002.” Presstek did not make the premium payments for 200 p. 3 3 or 2004. stated that Hallman “resigned from all positions of the Company on April 30, The proxy statement from Presstek’s June 17, 2002 shareholder meeting also Hallman’s termination was “voluntary,” and that the reason was “resignation.” Presstek noted on a personnel change form, dated May 3, 2002, that

H allman’s employment by Presstek and the cessation of said employment.” and assigns” for all claims, including “any and all matters arising out of own behalf, and on behalf of “his heirs, executors, administrators, successors Agreement and Release, Hallman granted a general release to Presstek on his the Employment Agreement or otherwise.” In sect ion 10 of the Separation payable to Hallman, or to which Hallman might otherwise be entitled, under of any other payments, including severance, which might otherwise by [sic] Hallman also agreed t hat “the foregoing payments and benefits shall be in lieu vesting and an extended deadline for exercise of certain stock options. the promises he made therein including, among other things, immediate not have received but for his execution of the agreement and the fulfillment of acknowledged that he was receiving monies and other benefits th at he would In section p. 3 3 of the Separation Agreement and Release, Hallman

Agreement and Release, and it became effective on April p. 3 30, 2002. not add any s uch clause. Both Hallman and Presstek signed the Separation p. 4 4

varying interpretations and is, consequently, ambiguous. Therefore, we review involuntarily. We thus conclude that subsection p. 4 4.1(c) is reasonably subject to Hallman ended his working relationship with Presstek even if he did so employment with Presstek “for any other reason but retirement” be cause that Presstek fired Hallman, one could argue that Hallman terminated his (unabridged ed. 2002) (emphasis added). Moreover, even if the facts showed intransitive form. Webster’ s Third New International Dictionary 2359 an end in time,” depending upon whether the verb is used in its transitive or “Terminate” can mean “to bring to an ending . . . in time” or “to come to

“ter minates” expresses an action or describes the condition of the subject. retirement.” Thus, the parties’ disagreement relates to verb usage – whether when Hallman’s employment with Presstek ends “for any other reason but language of subsection p. 4 4.1(c) means that the Split Dollar Agreement terminates perform the verb, “terminates.” In contrast, Presste k argues that the plain retirement.” In other words, Hallman, as the subject of the clause, must decision to end his employment with Presstek “for any other reason but Split Dollar A greement terminates only when Hallman makes a unilateral plaintiff argues that the plain language of subsection 4.1(c) means that the his employment with Presstek, Inc. for any other reason but retirement.” The receivership or dissolution of Presstek; or (c) “Robert W. Hallman terminates following events: (a) cessation of operation by Presstek; (b) ban kruptcy, the Split Dollar Agreement upon the occurrence of any one or more of the 4.1 of the Split Dollar Agreement. Section 4.1 provided for the termination of The parties disagree as to the correct i nterpretation of article IV, section

p. 4 41 (2001). language to mean. N.A.P.P. Realty Trust v. CC Enterprises, 147 N.H. 137, 140 parties, under an objective standard, mutually understood the ambiguous 429. If the contract language is ambiguous, we must determine what the contract’s language to be ambiguous. See Appeal of State of N.H., 147 N.H. at when the parties reasonably disagree as to its meaning will we deem the person. See ELCA of N.H., Inc. v. McIntyre, 129 N.H. 114, 116 (1987). Only contract based upon the meaning that would be given to it by a reas onable their common meaning, and we will ascertain the intended purpose of the p. 5 566, 569 (1995). The words and phrases used by the parties will be assigned language used. Echo Consulting Services v. North Conway Bank, 140 N.H. ambiguity, the parties’ intent will be determined from the plain meaning of the de novo. Appeal of State of N.H., 147 N.H. 426, 429 (2002). In the absence of ultimately a quest ion of law for this court, we review the Split Dollar Agreement premiums. Because the proper interpretation of a written agreement is by its terms, thus ending Presstek’s present and future obligation to pay the trial court erroneously concluded that the Split Dollar Agreement terminated We first address the plaintiff’s appeal. The plaintiff first argu es that the 5

the annual premiums on the policy. by its own terms, and that Presstek had no present or future obligation to pay trial court did not err by concluding that the Split Dollar Agreement terminated employment with Presstek “for any other reason but retirement.” As such, the record s upports the trial court’s finding that Hallman terminated his support. Appeal of State of N.H., 147 N.H. at 429. We conclude that the will sustain the trial court’s findings unless they are lacking in evidential retired rather than resigned nor that it was Hallman’s intention to retire.” We testimony at trial, the trial court found “no evidence indicatin g that Hallman contemporaneously made the decision to retire. Contrary to Hallman’s argues that Hallman accepted the Separation Agreement and Release and undisputed that Hallm an’s employment with Presstek ended. The plaintiff other reason but retirement” in the context of our holding above. It is We next address whether “Hallman terminated his employment for any

employment with Presstek ended “for any other reason but retirement.” under the Split Dollar Agreement would expire i f and when Hallman’s expected and understood subsection 4.1(c) to mean that Presstek’s obligations to the record before us, we conclude that the parties should have reasonably on the policy under the Sp lit Dollar Agreement. Applying an objective standard termination benefits, Hallman could still require Presstek to pay the premium his employment agreement, thus eliminating Hallman’s right to post incompatible result that if Presstek had terminated Hallman for cause under However, the plaintiff’s construction of subsection 4.1(c) lead s to the aware of this fact at the time the parties executed the Split Dollar Agreement. after termination, except as required by law. Hallman was or should have been Hallman had no right to receive compensation or other benefits for any period Presstek terminated Hallman for cause under his employment agreement, wife and an incentive to persuade him not to return to his former employer. If intended to be p art of Hallman’s compensation package for the benefit of his Hallman was president and CEO of the company. The parties agree that it was subsection 4.1(c). Presstek procured the Split Dollar Agreement in 1999 when Agreement prior to Presstek’s signing as to Presstek’s intent regarding provided no testimony from witnesses who had reviewed the Split Dollar about the meaning of subsection 4.1(c) at the time of execution. Presstek The plaintiff testified that he had no discussions with anyone at Presstek

findings of fact, if supported by the evidence. Id. the intention of the parties. Id. at 141. We will defer to the trial court's object intended by the agreement, keeping in mind our goal of giving effect to the contract as a whole, the circumstances surrounding its execution and the applying this objective standard, we consider the parties' intent by examining employment” to mean. See N.A.P.P. Realty Trust, 147 N.H. at 140 - 41. In mutually understood the ambiguous phrase “Hallman terminates his the record to deter mine what the parties, under an objective standard, p. 6 6

Dollar Agreement. request to recover the premium payments that were made pursuant to the Split Thus, we conclude that the trial court did not err in denying Presstek’s initial argument to support its claim for immediate rei mbursement of the premiums. that Presstek failed to introduce sufficient evidence or even assert any legal 147 N.H. at 429. After reviewing the record before the trial court, we conclude lacking in evidential support or ta inted by error of law. Appeal of State of N.H., We will sustain the trial court’s findings and conclusions unless they are

rejected Presstek’s argument. reconsider, raising its equity argument for the first time. The trial court any support for Presstek’s request. Presstek moved the trial court to relevant documents submitted in this case, the trial court was unable to find the trial court stated that upon review of the Split Dollar Agreement and resignation did not entitle Presstek to recover its premium payments. In fact, to make payments under the Split Dollar Agreement as of the date of Hallman’s court stated that its finding that Presstek was no longer contractually obligated Pr esstek offered no factual or legal support for its request. In addition, the trial The trial court denied Presstek’s request as “without merit,” noting that

1999 through 2002. retain the benefit of the cash value of the premiums paid by Presstek from the trial court also should have found that it was inequitable for the Trust to would be “inequitable to enforce the Split Dollar Agreement against Presstek,” payments. Rather, Presstek contends that because the trial court found that it assignment to support its claim for immediate reimbursement of premium Presstek offers no language in the Split Dol lar Agreement or collateral the premium payments it made pursuant to the Split Dollar Agreement. Finally, Presstek appeals the denial of its post - trial motions to recover

address the plaintiff’s assertion. present or future right to have Presstek pay policy premiums, we need not terminated by its terms and, consequently, the Trust beneficiaries have no interest in its assets. Since we have concluded that the Split Dollar Agreement Agreement since t he Trust is a separate legal entity and Hallman has no power to release the rights of Trust beneficiaries under the Split Dollar said employment.” On appeal, Hallman contends that he did not have the matters arising out of Hallman’s employment by Presstek and the cessation of administrators, successors and assigns” for all claims, includi ng “any and all granted a general release to Presstek on behalf of “his heirs, executors, Release. In section 10 of the Separation Agreement and Release, Hallman Split Dollar Agreement whe n Hallman signed the Separation Agreement and Hallman released the rights and claims of the Trust beneficiaries under the Next, the plaintiff argues that the trial court erred by concluding that p. 7 7

assigned under RSA 490:3, concurred. NADEAU and DUGGAN, JJ., concurred; HORTON, J., retired, specially

premium payments. sufficient evidence of its entitlement to immediate reimbursement of the motion for r econsideration because Presstek, again, failed to introduce conclude that the trial court acted within its discretion by denying Presstek’s Mall Assocs. v. Municipality of Conway, 144 N.H. 642, 654 (2000). We reconsideration absent an unsustainable exercise of discretion. See Mt. Valley We will also uphold a trial court’s decision on a motion for