2006-382, PATRICK CANTWELL v. J & R PROPERTIES UNLIMITED, INC.

The plaintiff, Patrick Cantwell, appeals the order of the

brief and orally), for the defendant. Janson & Koppenheffer, LLP, of Lebanon (William K. Koppenheffer on the

brief and orally), for the plaintiff. to press. Errors may be reported by E-mail at the following address: Brannen, Dunn & Stewart, PLLC, of Lebanon (Barney L. Brannen on the

editorial errors in order that corrections may be made before the opinion goes No. 2006-382 Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Grafton Readers are requested to notify the Reporter, Supreme Court of New ___________________________

THE SUPREME COURT OF NEW HAMPSHIRE

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. Opinions are available on the Internet by 9:00

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as contribution to the deposit, p. 2 was entitled for its late payment of interest were equal to the amount of his

timely fashion. The defendant argued that the damages to which the plaintiff

summary judgment on the receipt claim. and admitted that it had failed to pay him interest on his security deposit in a conceded that the plaintiff was due the damages he sought for his receipt claim defendant’s failure to pay interest on his security deposit. The defendant

brought under Superior Court Rule 27-A, which provides, in pertinent part: and its later denial of discovery related to those claims. Class actions may be claim. The trial court denied class certification and granted the plaintiff partial The plaintiff first challenges the trial court’s dismissal of his class claims seeking partial summary judgment as to the defendant’s liability on his receipt

followed. sought was irrelevant, as the class claims had been dismissed. defendant’s failure to timely pay the interest. This appeal and cross-appeal the plaintiff’s assertion that he was entitled to a remedy under the CPA for the

provide him with a signed receipt. The plaintiff countered with his own motion moved for partial summary judgment on his individual claim that it failed to receipt for his deposit. The defendant objected to the plaintiff’s class claim and The plaintiff then moved for summary judgment with respect to damages individual claim against the defendant for failing to provide him with a signed

to his class claims, which the court denied, explaining that the discovery Thereafter, the plaintiff moved to compel responses to discovery related

security deposit was $537.50, which he paid by personal check. defendant $4,300 as a security deposit. The plaintiff’s contribution to the property in Hanover. Under its terms, the plaintiff and his co-tenants gave the against the defendant for failing to pay interest on security deposits and an In February 2005, the plaintiff brought individual and class claims

2004. See RSA 540-A:7, I (2007). thirty days of the termination of the tenancy, paying it instead on August 5, The defendant failed to pay interest on the plaintiff’s security deposit within The plaintiff and his co-tenants terminated their tenancy in June 2004.

others entered into an agreement with the defendant to rent residential The record supports the following: In April 2003, the plaintiff and four the claims. p. 3 the class claims and that a class action was a superior vehicle for adjudicating

and/or willfully violated the CPA. He contended that his claims were typical of

defendant’s conduct violated the CPA; and (5) whether the defendant knowingly not paid on the security deposits; (3) the measure of damages; (4) whether the for or to pay interest on security deposits; (2) the amount of interest earned but

any responses. Based upon these pleadings, the trial court denied class member: (1) whether the defendant systematically failed to account properly defendant when he submitted his memorandum of law, he had not yet received questions predominated over any question affecting only an individual class class certification. Although the plaintiff had propounded discovery to the action, to which the plaintiff responded with a memorandum in support of The defendant filed an objection to treating the plaintiff’s claim as a class

questions of law and fact common to all class members and asserted that these prospective class members” was impracticable. He identified the following was numerous and many live throughout the United States, “joinder of all contended that, as the number of present and former tenants of the defendant taken from numerous other residential tenants, similarly situated” to him. He “repeatedly failed to account properly for or to pay interest on security deposits The plaintiff alleged on information and belief that the defendant had

represent the interests of the class. (6) The attorney for the representative parties will adequately members;

fair and efficient adjudication of the controversy; and (5) A class action is superior to other available methods for the

the interests of the class; (4) The representative parties will fairly and adequately protect

typical of the claims or defenses of the class; (3) The claims or defenses of the representative parties are

which predominate over any questions affecting only individual (2) There are questions of law or fact common to the class

whether otherwise required or permitted, is impracticable; (1) The class is so numerous that joinder of all members,

if: class may sue or be sued as representative parties on behalf of all (a) Prerequisites to a Class Action. One or more members of a p. 4 4

As the Seventh Circuit has explained: arose from a certain practice or course of conduct of the defendant that would But see J.B. ex rel. Hart v. Valdez, 186 F.3d 1280, 1290 n.7 (10th Cir. 1999). typicality because he did not present “any evidence to show that his claims Machines, Inc., 2 p. 4 49 F.3d 672, 675 (7th Cir.), cert. denied, 534 U.S. 951 (2001). erred. We agree. allegations as true. See id. at 38 (citing cases); see also Szabo v. Bridgeport that this “does not mean that [a] plaintiff must rest on his pleadings.” court does not, as with a motion to dismiss, accept all of the plaintiff’s decided “as early as practicable,” most federal circuit courts of appeal agree appeal have ruled that when deciding a motion for class certification, the trial 2003), like Superior Court Rule 27-A, requires that class certification be Securities Lit., 471 F.3d at 38, 41. Therefore, most federal circuit courts of allegations of the plaintiff’s complaint. See In re Initial Public Offering (1982). Such a “rigorous analysis” ordinarily involves looking beyond the Cir. 2003); General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 161 interpreting the federal rule as analytic aids. class.” Smilow v. Southwestern Bell Mobile Systems, Inc., 323 F.3d 32, 38 (1st analysis of the prerequisites established by [the] Rule . . . before certifying a Federal Rule of Civil Procedure 23, trial courts “must conduct a rigorous Offering Securities Lit., 471 F.3d 24, 38 (2d Cir. 2006) (citing cases). Under conduct entailed.” The court concluded that the plaintiff failed to establish v. Sheahan, 370 F. Supp. 2d 704, 714 (N.D. Ill. 2005); see In re Initial Public deposits” and failed to “identify what the defendant’s [alleged] standardized discovery that would have enabled him to produce this evidence, the trial court Thomas that left his former tenants without [proper] accounting for their security evidence “that the defendant engaged in routinized procedures and practices Although Federal Rule of Civil Procedure 23 (before it was amended in

N.H. v. Belknap County, 122 N.H. 61 p. 4 4, 623-24 (1982).

this rule is similar to Federal Rule of Civil Procedure 23, we rely upon cases This is our first occasion to interpret Superior Court Rule 27-A. Because

support his class allegations and then denying his motion to compel the dismissing his class claims on the ground that he failed to produce evidence to because he “failed to substantiate this claim with any evidence,” including had already dismissed the class claims. The plaintiff contends that in class claims, the trial court denied the motion on the ground that the court When the plaintiff moved to compel responses to discovery about his

. . . give rise to similar claims among the other members of the proposed class.”

The court concluded that the plaintiff failed to establish commonality

typicality. certification, ruling that the plaintiff failed to establish commonality and p. 5 5

one is held.” presentation either in its memoranda of law or at the hearing on the motion if makes it impossible for the party seeking discovery to make an adequate

hearing, the [trial] judge must receive enough evidence, by affidavits, inadequate for resolving the relevant issues.” F.3d at 41. “But even with some limits on discovery and the extent of the and the extent of the hearing.” In re Initial Public Offering Securities Lit., 471 [trial] judge must be accorded considerable discretion to limit both discovery “the predominant view is to allow discovery before the motion for certification.” into a protracted mini-trial of substantial portions of the underlying litigation, a However, “[t]o avoid the risk that a [class certification] hearing will extend

Id.

where there are substantial factual issues relevant to certification of the class, Witmark Music, p. 5 586 F.2d 962, 966 (2d Cir. 1978). “Failure to allow discovery,

defendants.” [a] d[e]cision on certification pending discovery, if the existing record is use it in ways injurious to other class members, as well as ways injurious to Thomas, 370 F. Supp. 2d at 714 (quotation omitted). Courts generally “defer

Because class certification usually is not decided upon the pleadings,

677; Love v. Georgia Pacific Corp., p. 5 590 S.E.2d 677, 681 (W. Va. 2003). members and defendants from a spurious class action. See Szabo, 249 F.3d at (quotation omitted). In this way, the trial court protects the absent class whatever factual and legal inquiries are necessary under Rule 23. certification issues.” Unger v. Amedisys Inc., 401 F.3d 316, 321 (5th Cir. 2005) substantive law in order to make a meaningful determination of the must understand the claims, defenses, relevant facts, and applicable

Id. at 677. “[G]oing beyond the pleadings is necessary, as a court

complaint moves the court’s discretion to the plaintiff’s attorneys – who may sufficiency of a pleading. Its “Certifying classes on the basis of incontestable allegations in the Procedure] 12(b)(6) is that a motion to dismiss tests the legal

Szabo, 249 F.3d at 67 p. 5 5-76.

case to proceed as a class action, therefore, a judge should make decision’s factual premises . . . . Before deciding whether to allow a judge’s last word on the subject; there is no later test of the trial. By contrast, an order certifying a class usually is the [trial] – by a motion for summary judgment . . . , and if necessary by

ruling on motions to dismiss under [Federal] Rule [of Civil reason why judges accept a complaint’s factual allegations when cannot be found in Rule 23 and has nothing to recommend it. The complaint’s allegations when deciding whether to certify a class The proposition that a [trial] judge must accept all of the p. 6 6

for his security deposit. The version of RSA 540-A: p. 6 6, I, in effect at the time

claim. discovery for which he moved to compel responses related to his individual CPA

it ruled that the defendant failed to provide the plaintiff with a signed receipt In its cross-appeal, the defendant argues that the trial court erred when

was “denied an opportunity to conduct

show that his case is suitable for class action treatment.” claims, not his individual CPA claim. We disagree with the plaintiff that the plaintiff’s motion to compel responses to discovery pertaining to his class opportunity to conduct discovery on his CPA claim. The trial court denied the does not contain any order from the trial court denying the plaintiff the The record submitted on appeal does not support these assertions as it to discovery pertaining to his class claims. conduct discovery, we vacate its order denying his motion to compel responses Defendant’s conduct was ‘willful or knowing.’” were met. to permit him to “conduct discovery in support of his allegations that the trial court could decide whether the prerequisites to maintaining a class action summary judgment motion. He asserts, in particular, that the trial court failed

for summary judgment and dismissing his CPA claim. He contends that he The plaintiff next argues that the trial court erred in denying his motion have given the plaintiff “a fair opportunity to develop the facts necessary to action. Before the trial court ruled definitively on class certification, it should II the plaintiff to conduct discovery on the prerequisites to maintaining a class

on the plaintiff’s class claims before he had had a sufficient opportunity to Because we conclude that the trial court erred when it ruled definitively the discovery he needed to create a sufficient evidentiary record from which the Apartments, Ltd., 338 N.W.2d 892, 898 (Mich. Ct. App. 1983).

Under the circumstances of this case, the trial court erred by not permitting [his] ability to address and to meet [his] burden for class certification . . . .” Id. prerequisites for class certification, the [plaintiff was] severely hampered in

See Love, 590 S.E.2d at p. 6 681. “Without conducting discovery on the

Here, the trial court erred when it denied the plaintiff’s motion to compel

requirement has been met.” Id. documents, or testimony, to be satisfied that each [class certification] p. 7 “[t]here was no evidence . . . that [it] refused to sign the contract.” Although the defendant concedes that it did not sign the lease, it argues that

possession of the premises.

seven days, the defendant would deem the property to be in perfect condition.

possessory actions to simplify and facilitate the landlord’s recovery of summary possessory actions. RSA chapter 540 authorizes summary she failed to return the property condition report attached to the lease within apply it in cases brought under RSA chapter 540 (2007), which concerns 7 bank where the deposit would be held, and informed the tenant that if he or acknowledged the amount of the security deposit, informed the tenant of the

compliance applies to RSA 540-A:6, I. To date, however, we have declined to

that contained a provision intended to comply with this statute. This provision endorsing the plaintiff’s security deposit check and providing him with a lease N.H. 216, 218 (2005) (quotation omitted). Because RSA chapter 540 days of occupancy. The defendant asserts that it substantially complied by may be subjected under a common-law action.” Matte v. Shippee Auto, 152 should be noted on the receipt or given to the landlord in writing within five termination of a lease without suffering the delay, loss and expense to which he the tenant that any conditions in the rental unit in need of repair or correction purpose of such actions “is to permit the landlord to recover possession on security deposit; (2) specified where the deposit would be held; and (3) notified Lavoie v. Szumiez, 115 N.H. 266, 267 (1975). The

We have not previously considered whether the doctrine of substantial

(1980). We agree. A:6, I, is sufficient. See Bourgeois v. Town of Bedford, 120 N.H. 145, 148 The defendant contends that such substantial compliance with RSA 540-

on the receipt or given to the landlord in writing within 5 days of occupancy.” provide a signed receipt to the plaintiff that: (1) stated the amount of the

any conditions in the rental unit in need of repair or correction should be noted Under the plain meaning of the statute, the defendant was required to deposit . . . will be held.” RSA 540-A:6, I. It also had to “notify the tenant that amount of the deposit and [specify] the place where the deposit or bond for the the plain and ordinary meanings to the words used. Id. first examine the language found in the statute, and where possible, we ascribe Simpson v. Young, 153 N.H. 471, 475 (2006). When construing its meaning we arbiter of the intent of the legislature as expressed in the words of the statute. Adams v. Woodlands of Nashua, 151 N.H. 640, 641 (2005). We are the final We review the trial court’s interpretation of RSA 540-A:6, I, de novo. See

Id.

signed receipt for the deposit to the tenant. This receipt had to state “the required a landlord, on receipt of a security deposit from a tenant, to deliver a p. 8 8

requisites of RSA 540-A:6, I, is not required. therefore, we conclude that strict compliance by the landlord with the the landlord that did not exist at common law. Under these circumstances,

BRODERICK, C.J., and DUGGAN, GALWAY and HICKS, JJ., concurred.

receipt for his security deposit. landlord did not enjoy at common law. Rather, it imposes an obligation upon court’s ruling that the defendant failed to provide the plaintiff with a signed substantially complied with RSA 540-A:6, I. Therefore, we reverse the trial required by RSA 540-A:6, I. Under these circumstances, the defendant Here, there is no dispute that the plaintiff received all of the information is substantial compliance.” Bourgeois, 120 N.H. at 14 p. 8 8 (quotation omitted). the statutory procedure or technical violations thereof may be excused if there Thus, because strict compliance is not required, “[m]inor deviations from

RSA 540-A:6, I, by contrast, does not establish rights and benefits that a

law, strict compliance with [its] terms is required.” Lavoie, 115 N.H. at 267. “establish[es] rights and benefits which a landlord did not enjoy at common