2004-354, GULF INSURANCE CO. v. AMSCO, INC.

$14,000 in attorney’s fees and expenses Gulf incurred on two bond claims; and that the trial court erred by: (1) ruling that it had agreed to pay Gulf over D. Clark (collectively referred to as “AMSCO”). AMSCO cross - appeals, arguing William D. Clark, Fernande Clark, Anthony C. Clark, Mark S. Clark and Laura The defendants are AMSCO, Inc., English Wood Associates, Inc., Sara L. Clark, the indemnity agr eement with its principal for its pursuit of the present case. indemnity agreement; and (3) rejecting Gulf’s request for attorney’s fees under incurred by Gulf on certain bond claims were not recoverable under the parties’ Peter Hermes to testify; (2) ruling that attorney’s fees and other expenses the decision of the Superior Court (Coffey, J.): (1) permitting defense expe rt BRODERICK, C.J. The plaintiff, Gulf Insurance Company (Gulf), appeals

the brief and orally), for defendant AMSCO, Inc. Hinckley, All en & Snyder, LLP, of Concord (Christopher H.M. Carter on

Boston, Massachusetts, orally, for the plaintiff. Duncan J. MacCallum, of Portsmouth, on the brief, and Louis Movitz, of

No. 2 004 - 354 Rockingham

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

incurred in the Beacon and Panciocco matters, over $3,000 in expenses in the amount sought by Gulf included over $ p. 2 21,000 in expenses Gulf allegedly before it would allow AMSCO to assume Gulf’s defense in the Brita action. The who appeared on its behalf, and demanded that AMSCO pay Gulf $84,131.06 appeared for both Gulf and AMSCO. Thereafter, Gulf hired its own attorney, suit against Gulf and AMSCO. AMSCO retained legal counsel who initially performance on a construction project. Gulf denied the claim, and Brita filed performance bond for damages allegedly associated with AMSCO’s substandard Finally, in June 2000, Brita Corporation made a claim against a Gulf

and COP. charged by three different law firms, an independent engineering consultant, in excess of $ p. 2 20,000 it allegedly incurred. The amount sought include d fees demanded indemnification from AMSCO for legal fees and adjustment expenses without Gulf making any payments under the bond. Subsequently, Gulf represent them both. Ultimat ely, AMSCO and Panciocco settled the suit AMSCO to handle the defense, and AMSCO promptly retained legal counsel to Panciocco brought suit against Gulf and AMSCO. Again, Gulf permitted AMSCO for the contract between AMSCO and Panciocco, and in 1999, Panciocco Builders also made a claim against a bond G ulf had issued to

investigate and adjust bond claims. Contract Operations Planning, Inc. (COP), a company hired by Gulf to $1,443. p. 2 23 it allegedly incurred in loss adjustment expenses generated by payments under the bond. Gulf then sought indemnif ication from AMSCO for ultimately settled without Beacon filing suit and without Gulf making any and AMSCO retained legal counsel to represent them both. The dispute was construction proje ct. Gulf assented to AMSCO handling the Beacon defense, performance bond issued by Gulf for AMSCO’s alleged failure to complete a In the fall of 1999, Beacon Properties made a claim against a

for costs and expenses it incurred related to the three bond claims. involves a lawsuit Gulf brought against AMSCO seeking recovery under the GAI Corporation. These disputes have since been resolved, and the present matter companies: Beacon Properties, Panciocco Builders, Inc., and Brita mad e against three bonds involving disputes between AMSCO and three performance on various construction projects. At different times, claims were with a series of performance bonds issued by Gulf guaranteeing AMSCO’s principal, entered into a general agreement of indemnity (GAI) in connection not disputed by the parties. In January 1997, Gulf, as surety, and AMSCO, as The following facts either were found by the trial court or are otherwise

RSA chapter p. 3 358 - A. We affirm. Gulf’s alleged breach of contract and violation of the Consumer Protection Act, ( p. 2 2) refusing to allow it to amend its pleadings to pursue c ounterclaims for 3

Under that rule, “only witnesses listed in the Pre - trial Statement [are] allowed witnesses expected to testify at trial pursuant to Superior Court Rule 62. p. 3 35, AMSCO filed a pretrial statement in which it was required to list all claim that it specifically requested expert disclosure under Superior Court Rule N.H. 30, 54 (2004); see Super. Ct. R. 35(b)(3), (f), 62. While Gulf makes no to testify and the basis of [their] opinions.” Porter v. City of Manchester, 151 experts, the substance of the facts and opinions about which they are expected “In superior court, a party is entitled to disclosur e of the opposing party’s

is not supported by the record. finding that AMSCO’s expert disclosure did not come as “any surprise” to Gulf never offered any good cause to excuse its late disclosure, and the trial court’s disclose an intent to rely upon expert testimony. According to G ulf, AMSCO eighteen months prior to trial, did not list any expert witness or otherwise trial. Gulf contends that AMSCO’s pretrial statement, which was filed about witness, Peter Hermes, to testify because h e was disclosed only one week before Gulf first argues that the trial court erred in permitting AMSCO’s expert

refusing to permit it to pursue certain counterclaims. loss adjustment expenses in the Beacon and Panciocco matters, and by had entered into a contract to pay Gulf in excess of $14,000 for legal fees and the GAI. AMSCO cross appeals, arguing that the trial court erred by ruling it Panciocco and Brita matters, and its failure to award it attorney’s fees under rejection of certain claimed attorney’s fees and loss adjustment expenses in the appeals, challenging the trial court’s admission of defense expert testimony, its The trial court conducted a multi - day trial on the indemnity action. Gulf

however, between AMSCO and Gulf for indemnity payments under the GAI. AMSCO and Brita settled Brita’s claim for $50,000; the dispute continued, $121,768. p. 3 37 in the Brita matter and the indemnity action. In September 2003, $1,443.23 in the Beacon matter, $20,502.83 in the Panciocco matter, and its right to indemnity. The expenses, which totaled $143,714.43, inc luded Brita matters, as well as to recover attorney’s fees under the GAI for pursuing and adjustment expenses allegedly incurred in the Beacon, Panciocco and In January 2001, Gulf filed suit agains t AMSCO to recover attorney’s fees

counsel. and the parties continued their defense to the underlying action with separate mention of the demand for collateral. AMSCO did not make payment to Gulf, expenses allegedly associate d with the Beacon and Panciocco matters, without to assume Gulf’s defense up on AMSCO’s payment of the fees and adjustment Gulf’s subsequent correspondence conditioned its willingness to allow AMSCO Br ita case, and $60,000 for collateral, representing Brita’s settlement demand. p. 4 4

burden - shifting provision requiring AMSCO to prove that Gulf’s claimed to indemnify Gulf only for “reasonable” expenses, and that the GAI contained a The trial court ruled that the plain language of the GAI required AMSCO

that the trial court’s decision is legally sound and sup ported by the evidence. compelled recovery of its claimed fees and expenses under the GAI. We hold lesser standard such as subjective or objective reasonableness, the evidence acted in “bad faith” in incur ring them. According to Gulf, even under some adjustment expenses and associated attorney’s fees by establishing that Gulf that AMSCO may only avoid its obligation to indemnify Gulf for its loss terms of the GAI when it denied Gulf’s request for indemnity. Gulf contends Gulf next argues that the trial court erred by failing to apply the express

testify at trial. See id. we cannot conclude that it was error to permit AMSCO’s defense expert to and the deference we accord to the trial court in the exercise of its discretion, curriculum vitae in September 2002, a year prior to trial. Given this record reply, however, AMSCO contended that it had provided Gulf with Hermes’ testimony, it was unable to depose Hermes or obtain a rebuttal expert. In contended that, due to the late disclosure of the specific nature of the expected specific facts related to its claim about which AMSCO’s expert would testify. It Gulf acknowledged the discussion, it denied that they had discussed the expert testimony as well as the sub ject area of the expected testimony. While conference it had discussed with the parties AMSCO’s intended reliance upon not list Hermes as a witness, the court recalled that during a pretrial moti on to preclude Hermes’ testimony. While AMSCO’s pretrial statement does the parties engaged in a colloquy with the court concerning the merits of Gulf’s expert testimony through Peter Hermes came as no surprise to Gulf. At trial, The trial court ruled that AMSCO’s late disclosure of its intent to present

unreasonable to the prejudice of [i ts] case.” Id. Gulf must show that the trial court’s ruling was “clearly untenable or discretion standard). Under the unsustainable exercise of discretion standard, v. La mbert, 1 p. 4 47 N.H. 29 p. 5 5, 296 (2001) (explaining unsustainable exercise of order to determine whether it unsustainably exercised its discretion, see State Matter of Letendre & Letendre, 149 N.H. 31, 37 (2002), we review its decision in Because the trial court retains discretion to admit expert testimony, In the information.” Wong v. Ekberg, 148 N.H. 369, 372 (2002) (quotatio n omitted). reduces surprise at trial by giving both parties the maximum amount of witnesses rests upon the premise that “justice is best served by a system that appears and as justice may requi re.” The policy of disclosure of expert Rules, the trial court may waive the application of any rule “[a]s good cause to testify” absent good cause. Further, under the Preface to the Superior Court 5

amount disbursed, or that such payment or compromise was reasonable under same was made by [Gulf] in the reasonable be lief that it was liable for the demand, suit, judgment or expense arising out of any [bond]” so long as “the states that Gulf may recover for any payment or compromise of “any claim, expenses. This comprehensive provision is modified by paragraph 3(A), which including the fees and disbursements of counsel,” and for other enumerated indemnify Gulf “for losses and expenses of whatsoever kind or nature, nature of Gulf’s indemnity rights. Paragraph 2(A) provides that AMSCO must Several paragraphs of the GAI must be read toget her to discern the

N.H. 119, 121 (200 p. 5 5). thus we review the trial court’s decision de novo. Sherman v. Graciano, 152 N.H. 214, 215 (2004). The interpretation of a contract is a question of law, and by a reasonable person, N.H. Water Res. Council v. Steels Pond Hydro, 151 phrases used by the parties the common meaning that would be given to them Commercial Union Assurance, 120 N.H at 623, and assign the words and limit our search for the parties’ intent to the express words of the contract, v. Bristol Steel & Iron Works, Inc., 722 F.2d 1160, 1163 (4th Cir. 1983). W e letter of the contract for indemnification. Fidelity and Deposit Co. of Maryland surety are not to be determined by general indemnity principles, but by the (1980). When there is an express contract for indemnity, the rights of the made. Commercial Union Assurance Co. v. Brown Co., 120 N.H. 620, 623 generally, seeking to discern the parties’ intent at the time the contract was interpret an indemnity contract in the same manner as we do contracts than incurred in bad faith, to avoid indemnification under the GAI. We requiring AMSCO to prove Gulf’s claimed expenses were unreasonable, rather We first examine whether the trial court properly interpreted the GAI as

$10,774.73 in monitoring fees in the Brita case,” plus interest. Gulf “$8 p. 5 52 in pre - lawsuit and monitoring fees in the Panciocco case and purpose other than to monitor the litigation. Accordingly, the court awarded counsel on both the Panciocco and Brita matters was unreasonable for any under the GAI. The court further ruled that Gulf’s retention of its own legal with Gulf’s ordinary cost of doing business and were not otherwise recoverable normal and expected administrative and housekeeping expenses associated require AMSCO to pay for fees charged by COP because such costs constituted for counsel retained by Gulf. The trial court ruled that it was unreasonable to and GAI claim. These costs represented expenses for COP and attorney’s fees Panciocco matter, and over $121,700 in fees and expenses in th e Brita matter the reasonableness of approximately $7,500 in fees and expenses in the to pay more than $14,000 of the Beacon and Panciocco expenses, it reviewed trial court already had ruled that AMSCO had agreed under a separate contract matters and whether the amounts of the fees [were] reasonable.” Because the was reasonable for [Gulf] to retain separate counsel in the Panciocco and Brita expenses were unreasonable. It delineated two areas of inquiry: “whether it p. 6 6

American jurisdiction.” The cases cited by Gulf, however, do not support its subjecti ve good faith standard is supported by “the law in virtually every interest or ill will. To support its position, Gulf contends that application of the dishonest purpose, conscious wrongdoing, or breach of duty motivated by self the GAI expressly required AMSCO to prove subjective “bad faith” through Gulf argues that in order to rebut the presumption for indem nification,

Id. We agree with this plain reading of the contract language.

circumstances, or that its belief in that respect was unreasonable. the incurrence of the fees) was reasonable under all the not actually believe that the payment of such fee (as opposed to its belief in that respect was unreasonable; and [the surety] did believe that it was liable for the attorney’s fees disbursed, or that the bu rden of proving both that: [the surety] did not actually

bore nearly the precise language at issue in this matter. It held that the indemnitor In Fallon Electric, the Third Circuit reviewed an indemnity contract with

avoid payment under the GAI. and AMSCO bore t he burden of proving that such costs were unreasonable to matters created a rebuttable presumption of its entitlement to indemnification, Gulf’s proper presentment of losses and expenses it incurred on the bond Accordingly, reading the contractual provisions together, we conclude that burden of proof, not the standard by which the standard i s proved). 125, 129 (3d Cir. 1997) (“prima facie” evidence provision establishes who bears unreasonable. See Fallon Electric Co., Inc. v. Cincinnati Ins. Co., 121 F.3d merely transfers the burden to AMSCO to prove that Gulf’s claimed costs were and amount of the liability of [AMSCO] under this Agreement.” This provision certain verification requirements, constitutes “prima facie evidence of the fact itemized stat ement” of any payment or compromise of any claim, along with Furthermore, paragraph 3(B) provides that Gulf’s presentment of “an

does the phrase “good faith,” “bad faith” or similar language appear. subjective belief and that such belief be objectively sound). Nowhere in the GAI p. 6 649, 653 (2005) (“reasonable belief” in insurance con tract requires both a as well. Cf. Progressive N. Ins. Co. v. Concord Gen. Mut. Ins. Co., 151 N.H. incurred were reasonable, but the belief must have been objectively reasonable other words, Gulf must not only have subjectively believed that the expenses as Gulf contends, the term “reasonable” contains an objective component. In paragraph 3(A) applies to this case and incorporates some subjective element indemn ification from AMSCO. Even assuming the “reasonable belief” clause in must be “reasonable under all the circumstances” for Gulf to secure all the circumstances.” Therefore, Gulf’s claimed loss adjustment expenses p. 7 7

covenants and conditions of this Agreement” or “in enforcing any of the incurred “by reason of the failure of [AMSCO] to perform or comply with the the GAI extends comprehensive indemnity coverage for losses and expenses respe ct to the recoverability of such expenses under the GAI, we recognize that (finding of fact upheld unless unsupported by the evidence). Furthermore, with nature. See Crown Paper Co. v. City of Berlin, 142 N.H. 563, 566 (199 p. 7 7) conclusion that such expenses were administrative and housekeeping in expenses. Distinct entity or not, ample evidence supports the trial court’s Fireman’s Fund Insurance Co., 352 F.2d 410 (10th Cir. 1965), to disallow COP entity from Gulf and challenges the trial court’s reliance on Wagner v. With respec t to the COP expenses, Gulf argues that COP is a distinct

counsel. Gulf challenges both rulings, and we address each in turn. unreasonable for Gulf to hire counsel where AMSCO had provided it with with monitoring the litigation were not recoverable because it was recoverable under the GAI. Second, it deter mined that legal fees not associated housekeeping expenses, which were an ordinary cost of doing business and not expenses was unreasonable because they constituted administrative and to support it s decision. First, it concluded that Gulf’s recovery of the COP monitoring, were unreasonable. The trial court identified two principal reasons in the Panciocco and Brita matters, other than legal expenses for case burden. The trial court ruled that Gulf’s claimed attorney’s fees and expenses W e next examine the trial court’s conclusion that AMSCO sat isfied its

provide indemnification under the GAI. adjustment expenses were unreasonable in order to avoid its obligation to appropriate standard when it required AMSCO to prove that Gulf’s claimed loss paid “in good faith”). Accordingly, we conclude that the trial court applied t he required indemnity for all liability of “whatever kind or nature” and for monies Constr. Co., 19 p. 8 8 p. 7 7 WL 488767 *1 n.1 (Va. Cir. Ct. Nov. 17, 1987) (contract 376 (Sup. Ct. 1960) (same regarding “good faith”); Fairfax County v. Culbertson faith”); Continental Casualty Co. v. Marman Develop. Corp., 198 N.Y.S.2d 375, Horton, 622 N.E.2d 283, 284 (Mass. App. Ct. 1993) (same regarding “good App. Ct. 1981) (same regarding “good faith”); American Employers’ Ins. Co. v. Hartford Acc. and Indem. Co. v. Millis Roofing, 418 N.E.2d 645, 646 (Mass. Elec., 571 S.W.2d 644, 646 (Ky. Ct. App. 1978) (same regarding “good faith”); (no refer ence to specific contract language); U.S. Fidelity & Guar. Co. v. Napier faith”); Elmore v. Morrison Assur. Co. Inc., 502 So. 2d 378, 379 - 80 (Ala. 1987) Inv. Corp., 732 F. Supp. 834, 836 (E.D. Tenn. 1989) (same regarding “good liability of “whatever kind or nature”); Safeco Ins. Co. of America v. Criterion 558 F.2d 948, 953 n.4 (9th Cir. 1977) (contract required indemn ity for all monies paid in “good faith”); Com’l Ins. Co. of Newark v. Pacific - Peru Const., Deposit Co. of Maryland, 722 F.2d at 1163 (contract required indemnity for contain “reasonable” language like that in the GAI before us. See Fidelity & position because they do not address indemnity contract provisions that 8

necessary for it to retain professiona ls, independent of Gulf’s legal counsel, to reason but to monitor the case.” Gulf points to no evidence suggesting it was own attorney after tendering defense of the Panciocco suit to [AMSCO] for any claim. The trial cour t concluded that “it was unreasonable for [Gulf] to hire its legal fees and a construction expert, it helped resolve Panciocco’s $ p. 8 84,000 incurring more than $20,000 in loss adjustment expenses, including COP, Concerning the Panciocco matter, Gulf contends that as a result of

see Jackson, 6 p. 8 85 F.2d at 9 66 n.15 (same). Towers Apartments, Inc. v. Martin, 453 S.W.2d 789, 800 (Tenn. App. 1970)); Perkins v. Thompson, 551 So. 2d 204, 210 (Miss. 1989) (quoting Central

diligence of the attorney hired by the surety.” cooperativeness of the s urety; and the amount charged and conflict of interest between the parties; the attitude and principal and his attorney in the defense; whether there is a the attorney hired by the principal; the diligence displayed by the notified the surety of the hiring of the attorney; the competency of attorney for both himself and the surety; whether the principal defend for itself and the surety; whether the principal hired the principal was notified of the action and given opportunity to the amount of the cl aim has refused to do so; whether the whether the principal on demand by the surety to deposit with it principal to deposit with it funds to cover the potential liability; principal was solvent; whether the surety has called on the “the amount of risk to which the surety was exposed; whether the

various factors, including: surety’s retention of separate legal counsel is “reasonable,” courts review that its retention of legal counsel was unreasonable. To determine whether a Turning to Gulf’s legal e xpenses, Gulf challenges the trial court’s ruling

expenses of surety company). recovery of certain expenses as ordinary housekeeping and administrative costs); Wagner, 352 F.2d at 413 - 15 (affirming trial court’s decision denying (disallowing indemnity rec overy for proportional part of corporate overhead Co. v. Davison Fuel & Dock Co., 3 p. 9 96 N.E.2d 1071, 1074 (Ohio Ct. App. 197 p. 8 8) contractual recovery provisions, such as the ones before us. See Sentry Ins. suff ered on a bond as to fall outside of the intended bounds of generally stated expenses, such as administrative services, are so remotely connected to losses F.2d 961, 966 (5th Cir. 1982). We therefore conclude that corporate overhead incurred or paid by it in its sole discretion. See, e.g., Jackson v. Hollowell, 685 not extend a “blank check” for a surety to recover all fees and expenses agree with courts that hold that indemnity contracts, even broadly stated, do covenants and conditions of this Agreement against [AMSCO].” We, however, 9

of its own separate legal counsel, see Crown Paper Co., 142 N.H. at 566, we do AMSCO’s failure to post collateral did not serve as the basis for Gulf’s retention sufficient evidence exists to support the trial court’s factual finding that expenses it had incurred in the Beacon and Panciocco matters.” Because to demand for collateral,” but focused on securing “the loss adjustment while Gulf i nitially requested collateral, “subsequent letters [made] no reference AMSCO failed to post any collateral to cover the Brita claim. It concluded that Gulf’s claim at trial that it refused to tender defense to AMSCO because cover the claim or demand and interest,” the trial court was unpersuaded by right to collateral “in an amount reasonably deemed by [it] to be sufficient to While the language in paragraph 3(C)(ii) establishes Gulf’s contractual

claim. and fees of defense, or take over the resistance and litigation of the satisfactory to [Gulf] in an a mount sufficient to cover the expenses (iii) deposit simultaneously with [Gulf] cash or collateral

the probable date of disposition; and be sufficient to cover the claim or demand and interest thereon to s atisfactory to [Gulf] in an amount reasonably deemed by [Gulf] to (ii) deposit simultaneously with [Gulf] cash or collateral in a form

(i) give notice thereof to [Gulf];

resisted and litigated, [AMSCO] shall If [AMSCO] desire[s] that a claim or demand against [Gulf] be

under paragraph 3(C): Concerning AMSCO’s obligation to p ost collateral, the GAI provides

costs on the Beacon and Panciocco matters. between the parties caused by AMSCO’s refusal to pay the loss adjustment have had much incentive” to pursue; and (3) a conflict of interest existed (2) Gulf had unique defenses in the underlying claim that AMSCO “would not hire its own counsel because: (1) AMSCO failed to post collateral as demanded; contends that it was entitled to refuse to tender its defense to AMSCO and to Regarding the att orney’s fees it incurred in the Brita matter, Gulf

Perkins, 551 So. 2d at 2 p. 10 10. Accordingly, the trial court’s ruling stands. reasonableness of a surety’s decision to retain separate legal counsel, see competency and diligence of AMSCO’s legal counsel, factors pertinent to the them both in the defense against Panciocco. It does not chal lenge the with Gulf’s approval, had retained and paid for legal counsel who represented resolve the Panciocco claim and pass on these costs to AMSCO when AMSCO, 10

or at law, [AMSCO] authorizes and empowers [Gulf] to . . . assert the rights that [Gulf] migh t otherwise have under this Agreement Upon the happening of an Event of Default . . . [w]ithout limiting

to seek indemnity for retaining separate counsel: “event of default.” Gulf identifies paragraph 7(B)(iv) as the linchpin for its right occur, and paragraph 6 specifically identifies occurren ces that constitute an 6. In particular, paragraph 7 outlines Gulf’s rights should an “event of default” Gulf’s rights under paragraph 7 are intrinsically connected to paragraph

re Thayer, 146 N.H. 342, 347 (2001). however, fails to sufficiently develop its argument for appellate review. S ee In any claim in AMSCO’s name and choose an attorney to defend AMSCO. Gulf, GAI, and that under paragraph 7(B)(iv) of the GAI, it had the right to litigate that AMSCO’s failure to indemnify it in any amount co nstituted a default of the upon payment of [the] disputed expenses” in the prior matters. Gulf contends allows [Gulf] to condition [AMSCO’s] assumption of the defense of the Brita suit and hire its own legal counsel. The t rial court ruled that “[n]othing in the GAI Panciocco matters justified its refusal to tender the defense in the Brita action for the loss adjustment expenses Gulf allegedly incurred in the Beacon and Finally, we address Gulf’s argument that AMSCO’s failure to indemnify it

it to retain its own legal counsel. court’s ruling that Gulf’s claim of unique defenses provided no viable basis for conflict of interest exists between parties). Therefore, we uphold the trial reasonableness of surety’s reten tion of separate legal counsel include whether unique to Gulf. See Perkins, 551 So. 2d at 2 p. 10 10 (factors to determine between the parties that would have thwarted AMSCO’s pursuit of any defense chal lenge the trial court’s finding by identifying an actual conflict of interest incentive to press legal issues that would only benefit Gulf.” It fails to contractors, and generally suggests that AMSCO “would not have [had] much references only an inherent conflict of interest common between sureties and could have pursued these unique defenses on Gulf’s behalf. On appeal, Gulf position AMSCO took in the Brita action, and that absent a conflict, AMSCO evidence to suggest that its unique defenses actually conflicted with any finding. Further, the trial court observed that Gulf did not argue or present based upon any unique defenses it may have had. Gulf does not challenge this counsel, the trial court found that Gulf’s refusal to tender its defense was not AMSCO stated it had unique defenses that required it to retain separate have pursued on its behalf. Because none of the correspondence from Gulf t o AMSCO because it had unique defenses to Brita’s claim that AMSCO would not We reject Gulf’s contention that it refused to tender its defense to

collateral. not review Gulf’s arguments concerning AMSCO’s contractu al obligation to post p. 11 11

propriety of hiring individual legal counsel). 143, 150 (D.C. Cir. 1997) (reasonableness of amount of legal fees separate from counsel generated. Ideal Electronic Sec. Co. v. Intern. Fidelity Ins., 129 F.3d pertaining to the reasonableness of the amount of the attorney’s fees its legal counsel in the Brita action, we do not add ress Gulf’s arguments unreasonable for Gulf to seek indemnification from AMSCO for its separate Finally, because we uphold the trial court’s decision that it was

Gulf’s claim in this regard. independent legal counsel in the Brita actio n. Accordingly, we will not consider Panciocco matters as a separate legal basis for Gulf having retained AMSCO’s failure to make any indemnification payments in the Beacon and court’s consideration of a conflict of interest between the parties created by testimony, without more, do not sufficiently establish that Gulf sought the trial simultaneously resisting indemnity obligations. These isolated portions of principal insisted upon retaining counsel to represent both parties while other, the Gulf expert testified that he never witnessed an occ asion in which a surety and a contractor inherently contains an adversarial component. In the one, a defense expert generally acknowledged that the relationship between demonstrate a conflict of interest as a ba sis for retaining separate counsel. In appellate review). Gulf relies upon two isolated portions of testimony to 880 A.2d 388, 394 (2005) (argument not raised in trial court not preserved for this contention before the trial court. See Broughton v. Proulx, 152 N.H. __, __, the Brita action. The record, however, does not demonstrate that Gulf pursued the prior matters as creating some conflict of interest between it and AMSCO in Gulf also attempts to characterize AMSCO’s nonpayment of the fees in

Brita suit upon payment of [the] disputed expenses” in the prior matters. the GAI allows [Gulf] to condition [AMSCO’s] assumption of the defense of the argument for it, and thus we uphold the trial court’s ruling that “[n]othing in explain how the two paragraphs are intertwined. We elect not to make Gulf’s makes no effort, however, to identify relevant portions of paragraph 6 or paragraph 6. Both paragraphs are detailed and somewhat lengthy. Gulf occurred to trigger Gulf’s rights under paragraph 7 is dictated by the terms of those identified in paragraph 6. Certainly, whether an “event of default” has It would appear that the right or claim Gulf is permitted to pursue is limited to

reasonable under the circumstances. settle any such right or cl aim on such terms as [Gulf] considers conveyed in the name of the Principal and to compromise and and prosecute any right or claim hereby assigned, transferred or p. 12 12

entitled to attorney’s fees for pursuing the indemnity action. trial court ruled that AMSCO did not breach the GAI, and thus Gulf was not fees under the GAI for its pursuit of the present indemnity action, however, the Panciocco matters. When addressing whether Gulf was entitled to att orney’s AMSCO to pay Gulf $14,393.56 of the expenses incurred in the Beacon and frame, the trial court ruled that the parties had entered into an agreement for engaged in settlement negotiations that ul timately failed. For the 2002 time Regarding the 2001 discussions, the trial court ruled that the parties had which the parties discussed resolving Gulf’s claims for fees in those matters. and Panciocco bon ds.” The trial court reviewed separate time frames during regarding partial payment of [its] loss adjustment expenses under the Beacon order, Gulf alleged that “the parties [had] entered into two separate agreements mo tion itself is not part of the appellate record. According to the trial court’s Prior to trial, Gulf filed a motion to enforce partial agreement. The

(1988) (arguments not adequately raised below not addressed on appeal). the record before us. See Holyoke Mut. Ins. Co. v. Carr, 130 N.H. 698, 699 the parties’ 2002 communications not properly presented to the trial court on however, because it attempts to assert a new argument regarding the nature of for more than $14,000. We do not address the merits of Gulf’s arguments, opposing counsel wh ich would have established AMSCO’s admission of liability former counsel, Ralph Suozzo, about certain communications between argues that the trial court erred in precluding it from questioning AMSCO’s incurred for pursuing its indemnity rights in the present action. Gulf further breach of the GAI which, under the contract, entitled it to at torney’s fees according to Gulf, AMSCO’s failure to pay that undisputed sum constituted a adjustment fees due in the Beacon and Panciocco matters. Therefore, the conclusion that A MSCO admitted liability for over $14,000 in loss AMSCO did not breach the GAI. It argues that the evidence at trial compelled contractually entitled to attorney’s fees incurred in the present action because Gulf next challenges the trial court’s decision that Gulf was not

Jackson, 685 F.2d at 966.

separate legal defense to protect its interests. indemnitor even when the surety company does not require a surety] to retain counsel and to charge attorney’s fees against the unreasonab le or unnecessary. To hold otherwise would allow [a the surety company to reimbursement for legal expenses which are an indemnity agreement is not a blank check; it does not entitle

In closing, we note our agreement with the Fifth Circuit in that p. 13 13

claim, yet it failed to do so for the eighteen - month time frame prior to trial. payment, Gulf could have chosen to pursue the depositions and additional make partia l payment. AMSCO contends, however, that after it failed to make against AMSCO constituted valuable consideration for AMSCO’s promise to to refrain from conducting two depositions and pursuing an additional claim supported by sufficient consideration. The trial court ruled that Gulf’s promise Second, AMSCO argues that any promise it made to pa y Gulf was not

Accordingly, we uphold the trial court’s decision. record. Estate of Younge v. Huysmans, 127 N.H. 461, 465 (1985). concerning the scope of the parties’ intended agreement is supported by the supporting AMSCO’s view of the negotiations, the trial court’ s ruling settlement agreement exists is question of fact). Although evidence exists see Appeal of Land Acquisition, 145 N.H. 492, 494 (2000) (whether binding contract. Chisholm v. Ultima Na shua Indus. Corp., 150 N.H. 141, 145 (2003); shoes of the trial court on factual matters, such as the existence and terms of a assume Gulf’s defense in the Brita case. We, however, do not stand in the Beacon and Panciocco matters for payment of a compromised sum in order to refused to issue a release, and a release was its sole motivation in resolving the contends that no enforceable agreement could have existed because Gulf court’s ruling that it entered into a contract to pay the $14,393.56. First, it On cross - appeal, AMSCO advances three arguments challeng ing the trial

and Panciocco matters. arguments that AMSCO conceded partial liability under the GAI on the Beacon correct any errors in first instance). Accordingly, we do not address Gulf’s possible time to give trial court opportunity to come to soun d conclusions and Inc. v. Sullivan, p. 14 140 N.H. 583, 590 (1995) (issues should be raised at earliest understanding of the legal basis for Gulf’s claim for $14,393.56. See Penrich, lacks any motion for reconsideration contending that the trial court erred in its that the parties had entered into a contract independent of the GAI, the record consideration. Thus, while the trial court decided Gulf’s motion on the premise contract formation and rule d that the contract was supported by sufficient Gulf’s argument. Further, the court expressly reviewed the legal elements of motion, we cannot review the validity of the trial court’s characterization of a nd Panciocco bonds. Because the record does not contain the underlying regarding partial payment of Gulf’s loss adjustment expenses under the Beacon seeking a ruling that the parties had entered into two separate agreements in its motion before the trial court. The trial court characterized the motion as pay the fees. The record before us fails to show that Gulf pur sued this position $14,000 in loss adjustment fees, and thus breached the GAI when it failed to separate contract, AMSCO conceded liability under the GAI for the more than We do not address Gulf’s arg ument that, rather than entering into a 14

consumption of the court’s time, and injustice b y resolving all controversies circuity of action, multiplicity of suits, inconvenience, expense, unwarranted While c ounterclaims are generally permitted where appropriate to “avoid

court denied AMSCO’s motion to amend as “untimely.” the counterclaims shared the same core facts with Gulf’s claims. The tri al the billing records from Gulf for the first time just one week before trial, and should permit its amendment because it had received a substantial portion of counterclaims based upon certain billing records. It arg ued that the trial court Two days prior to trial, AMSCO moved to amend its pleadings to file

unsustainable exercise of discretion standard). Dev. Corp., p. 14 144 N.H. 298, 303 (1999); cf. Lambert, 147 N.H. at 296 (explaining an unsustainable exercise of discretion, see Bezanson v. Hampshire Meado ws Square Feet of Land, 121 N.H. 170, 172 (1981), and we review its decision for discretion to decide whether to allow a counterclaim, City of Concord v. 5,700 Consumer Protection Act, RSA chapter 358 - A. T he trial court retains the counterclaims against Gulf for breach of contract and for violation of the court erred in rejecting its request to amend its pleadings and assert Fina lly, we turn to AMSCO’s argument on cross - appeal that the trial

disturb the trial court’s decision. See Younge, 127 N.H. at 465. 1.5. Because the factual findings are supported by the record, we will not “they do not rise to the level of being ‘illegal or clearly excessive’” under Rule may have been “unreasonable” under the contractua l standard in the GAI, when negotiating a sum. It ruled that while the fees in the Panciocco matter court found that the parties considered the alleged excessive nature of the fees agreement for, charge, or collect a n illegal or clearly excessive fee.” The trial Professional Conduct. Rule 1.5 states: “A lawyer shall not enter into an unenforceable as a violation of Rule 1.5 of the New Hampshire Rules of excessive and unreasonable attorney’s fees and expenses would be Third, AMSCO contends that any agreement compelling it to pay

adequate consideration is supported by both the record and the law. Accordingly, the trial court’s conclusion that the contract was supported by p. 14 145 (c onsideration pre sent when benefit to promisor or detriment to promisee). litigation avenues that it had the right to pursue. See Chisholm, p. 15 150 N.H. at pay, Gulf exchanged meaningful consideration by refraining from pursuing meaningful consideration for the contract. At the time AMSCO promised to negates neither AMSCO’s breach of its promise to pay nor the exch ange of contract. We disagree. Gulf’s decision to uphold its portion of the bargain to pay and thus no consideration supported the existence of a separate According to AMSCO, Gulf could not h ave detrimentally relied upon its promise 15

NADEAU, DALIANIS, DUGGAN and GALWAY, JJ., concurred.

date except by leave of court). Sup. Ct. R. 33 (party can not file counterclaim after thirty days from the return AMSCO’s request to amend, we will not disturb the trial court’s decision. See records in a timely manner. Based upon this record and the lateness of that AMSCO failed to conduct any formal discovery to seek out its billing exercise of discretion. AMSCO did not dispute Gulf’s proffer to the trial court cannot conclude that the trial court’s decision constituted an unsustainable and granting full relief in one proceeding,” Concord, 121 N.H. at 172, we