2007-249, RICHARD N. FOLEY v. TIMOTHY S. WHEELOCK

Richard N. Foley

No. 2007-249 Rockingham County Probate Court

The record reveals the following. In 1997, the parties purchased an office

, of Portsmouth We affirm.

(O’Neill

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 subsidize Wheelock’s rental of an off-site office during the pendency of the sale. court-ordered reserve. Foley also challenges an order requiring him to subject property after an unsuccessful public auction at a lower price than the , J.) allowing the respondent, Timothy S. Wheelock, to purchase the Richard N. Foley, appeals an order of the Rockingham County Probate Court BRODERICK, C.J. In this action to partition real property, the petitioner,

(William G. Scott on the brief and orally), for the respondent. Boynton, Waldron, Doleac, Woodman & Scott, P.A.

to press. Errors may be reported by E-mail at the following address: , by brief and orally, pro se.

editorial errors in order that corrections may be made before the opinion goes Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any 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 22 as the property. During a telephonic hearing on November 3, Foley represented to

p. 2 generally interfered with efforts to facilitate a “commercially reasonable sale” of

auctioneer, removed a sign outside the unit advertising the auction, and had Compliance,” claiming that Foley had failed to pay certain fees to the On November 1, however, Wheelock filed a “Motion to Compel

unit – to prepare for the sale. scheduled an auction for November 16 and took steps – such as advertising the June order. The court also appointed an auctioneer, who subsequently

ordered them to sell the condominium at public auction as contemplated by its

of sale for the condominium. Consequently, the following month, the court By September, the parties had not reached an agreement on the method

monthly rent at his new office space.

The $325 figure referenced by the court represented one-half of Wheelock’s

to be prorated as of the date of the sale. and $325 monthly from April 1, 2006 until the sale of the property,

share, [Wheelock] will be paid $409.55 [for overdue utility bills]

equally between the parties except that from [Foley’s] one-half 3. After the property is sold . . . the proceeds will be divided

proceeds from the sale of the property.

the commissioner’s fees to be paid equally by the parties out of the court will appoint a commissioner to sell the property at auction, agree [upon a reserve price], the reserve will be $179,000 and the

reserve and method of sale for the public auction. If they cannot

be sold through a public auction. The parties may agree upon a

2. If the parties do not agree to a private auction, the property will

price of $159,000.

1. The parties may agree to a private auction . . . with a reserve

$179,000. It entered the following order: presented by Wheelock that the fair market value of the property was

purchase the condominium for $139,000, the court credited expert testimony

opportunity to purchase the property.” While Foley had asked to be allowed to half the equity in the unit,” and that “[the parties] should both be afforded the to partition. In so doing, it found “no cause to award one party more than one-

condominium. See

In early June, following a hearing, the probate court granted the petition

Foley filed a petition requesting a court-supervised partitioning of the 2005, as an apparent result of deteriorating relations between the parties,

court acted upon the petition, Wheelock moved his office to another location.

p. 3 the next highest bid being $130,000. On that basis it is

advertising and public auction yielded a high bid of $140,000 with himself for bidding at the auction and did so. The result of the the property, but failed to do so. [Wheelock] was able to prepare

the date of the auction to seek financing so that he could bid on

than sufficient time between the court order of June 1, 2006 and November 16, 2006. The court further finds that [Foley] had more property was adequately advertised for sale by auction on

Based upon the evidence offered, the court finds that the

following findings: representation that he could acquire $145,000 from his friend, made the

On March 8, the probate court, apparently discrediting Foley’s

for an amount greater than Wheelock’s bid of $140,000. payments, and admitted that he was unable to secure financing from a bank property, Foley was, at that time, two months in arrears on his mortgage

Notwithstanding his representation that he would be able to purchase the

could not do so, the property could be sold to Wheelock for $140,000. he could produce the funds within five days. Foley agreed, however, that if he a friend of his was willing to loan him $145,000 to purchase the unit and that

to his detriment when seeking financing. He also represented to the court that

for $140,000. Foley objected, arguing that he had relied upon the reserve price market value of the condominium and that the court should let him acquire it Wheelock contended that the results of the auction revealed the actual fair

for $140,000. The probate court held a hearing on the motion in March 2007.

reserve price and requesting that the court accept his bid to purchase the unit

original order on the petition to partition, seeking a waiver of the $179,000 Wheelock subsequently filed a motion to modify the probate court’s

been sold.

court-ordered reserve, the auction concluded without the condominium having auction of $140,000 was made by Wheelock. Because this bid was below the [the reserve price] of $179,000[ ],” did not participate. The high bid at the

“was unable to obtain a loan sufficient to enable him to buy the property for

which was held outside the unit. Foley, who represents in his brief that he On November 16, five qualified bidders participated in the public auction,

Wheelock was awarded requested attorney’s fees.

clean and free of clutter and to return the sign advertising the auction. proceeds of the sale. The court further ordered Foley to ensure the unit was Foley’s share of the auctioneer’s fee could be deducted from his share of the

$400 in the bank. In its order on Wheelock’s motion, the trial court ruled that the court that he was unable to pay the auctioneer’s fee because he had just duration of the occupancy and nature of the use made of the

p. 4 maintenance, repair, [and] preservation . . . of the property; the

timeliness of Foley’s appeal of this issue. See

indirect actions and contributions of the parties to the acquisition, equitable in a case before it, the court may consider: the direct or In exercising its discretion in determining what is fair and

complete justice.” DeLucca v. DeLucca space until their condominium was sold. Wheelock, in turn, challenges the and consider the special circumstances of the case[ ] in order to achieve requiring him to pay one-half of Wheelock’s monthly rent for his new office “An action for partition calls upon the court to exercise its equity powers Foley first challenges the portion of the probate court’s June 2006 order 547-C:25; see In partition proceedings, the probate court sits as a court of equity. RSA II

sale as a whole or in such portions as may be fair and equitable. to purchase the property for $140,000.” This appeal followed.

court . . . .” Decker v. Decker equitable relief in a particular case rests in the sound discretion of the trial

in its discretion, award or assign the property or its proceeds on forth in the Court Order of June 1, 2006 is waived and . . . Wheelock is allowed discretion. Id In entering its decree [on a petition to partition] the court may,

C:29 (2007) provides:

16 (2007). untenable to the prejudice of his case. Poland v. Twomey, 156 N.H. 412, 415claim. unsustainable must demonstrate that the ruling was unreasonable or N.H. 29, 46 (2007). The party asserting that a trial court order is

.; Blagbrough Family Realty Trust v. A & T Forest Prods., 155 The court consequently entered an order stating that the reserve price “set We, in turn, review an equitable order for an unsustainable exercise of

nature”; provisions of RSA chapter 547-C to be “liberally construed in favor of

also RSA 547-C:30 (2007) (partition proceedings “remedial in

constitutes final decision ripe for appeal). We thus turn to the merits of Foley’s Heald, 147 N.H. 280, 281-82 (2001) (order which terminates matter generally assume, without deciding, that Foley’s appeal was timely. Cf. In re Estate of

auctioning or listing of the property would cause unnecessary cost the time of the auction was $140,000 and to require further its equitable division of the property. p. 5 547-C:29 when crafting its order, and there is ample support in the record for

he was unable to use freely. The trial court utilized the factors set forth in RSA

court’s decision to offset Wheelock’s ongoing mortgage payments on a property pendency of their partition action. Indeed, we find entirely sustainable the trial an amount equal to one-half of Wheelock’s rental payments during the

or untenably reduced Foley’s share of the proceeds of the condominium sale by

On this record, we cannot conclude that the probate court unreasonably

unprofessional environment.”

his phone system. In sum, Wheelock believed it was a “deteriorating,

excessive amount of furniture into his portion of the office, and “dismantled”

Wheelock also testified that Foley had monopolized his secretary, moved an

attempted to bite clients . . . .

German [Shepherd] dog into the office, who has allegedly bitten or

He would not listen to me on the subject of not bringing his

. . . .

concerned with his ethics and how his actions might affect me. Sometimes that works out. It wasn’t working here. I was very There were just – Mr. Foley and I are complete opposites.

that had occurred. . . .

registering [his] motor vehicles to the office or my suspicion that

There was my concern with . . . Mr. Foley living in Maine and

testified:

behavior necessitated Wheelock’s relocation of his law practice. As Wheelock

Moreover, the trial court had ample evidence before it to conclude that Foley’s continued to pay one-half of the mortgage on the property and utility bills. the court issued an order enabling him to purchase it. During that time, he

approximately eight months before the unit was auctioned, and one year before

The record shows that Wheelock vacated the parties’ condominium

the proceeds of [Foley’s] half of the sale of the property.” We disagree.

“no basis in fact or law to assign half of [Wheelock’s] new rent to be paid from

Foley contends that when crafting its partition decree, the probate court had

other factors the court deems relevant.

property by the actions or inactions of the parties; . . . and any property by the parties; . . . waste or other detriment caused to the acceptance of an offer. Pitchfork Ranch Co. v. Bar TL p. 6 Id

In such circumstances, a sale may still be consummated by the seller’s

auction before the acceptance of the highest bid.

return for the seller by free and fair competition among bidders.” Marten v. Marten licensed and authorized to do so and the goal is to obtain the best financial need do nothing and there is no contract between the seller and the bidder.” “An auction is a public sale of property to the highest bidder by one any time[ ] before the hammer falls, and if the bid is too low – the auctioneer 6

was not met, from subsequently accepting a sub-reserve offer for his property. a seller, after having held a “with reserve” auction at which the reserve price Conversely, Foley cites no law – and we have found none – that prevents to sell the property, and can withdraw the property from the auction held “with reserve” is that the owner reserves the right not not an offer to contract. One of the distinguishing features of an

reserve auction is that the principal may choose to withdraw the property at price he may bid. Pyles

value. But court properly relied upon the high bid at auction to establish fair market , 537 N.W.2d at 523; accord Towle v. Leavitt, 23 N.H. 360, 372 (1851). of property up for bid is an invitation to make a contract, and is

legitimate basis for awarding the property to [Wheelock] for $140,000[ ] . . . .” until he announces completion of the sale.”). “The ramification of a with reserve that he had insisted upon,” and that “[t]here was no rational or auction, the auctioneer makes an offer to sell to the highest bidder at whatever an auction with reserve the auctioneer may withdraw the goods at any time alone, maintaining that “[i]t was disingenuous for [Wheelock] . . . to not bid the. (citations and emphasis omitted); see also RSA 382-A:2-328(3) (1994) (“In

“with reserve” or “without reserve.” Pyles v. Goller

fair market value of the property. Accordingly, we need not decide whether the

[i]n an auction held “with reserve,” an auctioneer’s bringing a piece

reserve” auction). In an auction “without reserve,” also called an “absolute” determining fair market value). Instead, Foley relies upon equitable arguments Spec. App. 1996); see generally Society Hill, 139 N.H. at 256 (discussing a “no

1996). There are generally two methods of selling property at an auction: Staab, 537 N.W.2d 518, 522 (Neb. Ct. App. 1995), aff’d, 543 N.W.2d 436 (Neb.

not challenge the probate court’s conclusion that this figure represented the offer to pay $140,000 for the parties’ condominium. We note that Foley does Foley next contends that the probate court erred by accepting Wheelock’s

139 N.H. 253, 255-56 (1994) (discussing factors to be considered when

cf. Society Hill at Merrimack Condo. Assoc. v. Town of Merrimack, advertised. This suggests a “free and fair competition,” Marten

p. 7 bidders at the auction, which the probate court found to have been sufficiently

a sale to Wheelock for $140,000. Moreover, there were a number of qualified

March 2007 hearing that if he could not raise $145,000, he would not object to of the condominium would have been just $139,000. He also stated at the initial hearing on his petition, Foley himself had proposed that a fair valuation

June 2006 order to the time of the March 2007 hearing. Regardless, at the

in the Portsmouth commercial real estate market from the time of the court’s

$125,000. Wheelock also represented that his appraiser had noted a downturn the City of Portsmouth had recently assessed the unit at approximately At the hearing on the motion to modify, the court received evidence that

find ample support in the record for its decision to do so. accepted an offer below the reserve price it had initially set for the auction. We Ultimately, after the “with reserve” auction ended unsuccessfully, the court

on the high end of the spectrum proffered by the parties’ appraisers. condominium at what he then believed was its fair market value. Contrary to

to guarantee the highest price possible for the parties by setting a reserve price upon an appraiser’s opinion and simply reflected a desire to sell the equitably disposing of the parties’ condominium. In that capacity, it attempted In this case, at Foley’s request, the probate court stood charged with

undermine this conclusion. Wheelock’s request for a high reserve was based offer, even though he had proposed a reserve price of $179,000, does not The fact that Wheelock’s bid of $140,000 turned out to be the accepted

a subsequent sale to occur. Cf

decision to accept Wheelock’s offer was a sustainable exercise of discretion.

auction, while responsive to Wheelock’s motion to modify, was unnecessary for court’s order waiving the reserve price it had set for the November 2006 With these principles in mind, we note that the portion of the probate $140,000 was acceptable. Our inquiry, in turn, is whether the probate court’s 522, took place to achieve the greatest possible sale price. the stakeholders about whether Wheelock’s offer to purchase the property for, 537 N.W.2d at we view the hearing on Wheelock’s motion as, in essence, a discussion among

discretion to accept any sub-reserve offer that remained available. Therefore,

cannot subsequently accept a sub-reserve price if he so chooses. further obligation to complete the transaction, this does not mean the seller while a seller whose reserve price has not been met at auction is under no auction was terminated and the court – like any other seller – had full auction produced only bids below the $179,000 reserve, the “with reserve” (Wyo. 1980); see (2004) (discussing the fixing of a minimum price). After the November 2006

141, 144-45 (2003) (outlining principles of contract formation). In other words,

generally Chisholm v. Ultima Nashua Indus. Corp., 150 N.H. that offer. We find no grounds for overturning the court’s implicit conclusion

p. 8 the parties’ condominium would sell for, it acted sustainably when accepting

that Wheelock’s post-auction offer of $140,000 represented the maximum price Accordingly, since the probate court could have reasonably concluded

reject, see Finally, it was fully within the probate court’s discretion to discredit and

the needed financing which had consistently eluded him.

when seeking financing.

The probate court was under no obligation to believe that Foley could secure court-sanctioned public auction in November 2006 and should have done so. As the probate court observed, Foley had ample time to prepare himself for the

by the court, or that it was even possible for him to “detrimentally” rely upon it for that matter – was somehow “precluded . . . from bidding” by the reserve set into an auction. We therefore do not agree with Foley that he – or anyone else,

auction between the parties for which Wheelock was not necessarily prepared.

reserve, even if it has been publicized, cannot be viewed as prohibitive of entry

have converted the hearing on Wheelock’s motion into an impromptu private financing. Regardless, if Foley’s request had been accommodated, it would grant Foley the five additional days he requested to attempt to secure such

because it is essentially just an “asking” price the seller hopes to attain, the

claim, our review of the record reveals no agreement by the probate court to

below which bids need not be automatically accepted by the seller. Thus, immoveable minimum price at which bidding must start; it acts only as a floor price. The same was true for all potential bidders. A reserve price is not an 8

during the months leading up to the auction. In addition, contrary to Foley’s

as high a bid as was within his means – even if that bid was below the reserve

as ordered in November 2006; and (4) his inability to secure bank financing mortgage on the condominium; (3) his failure to pay Wheelock’s attorney’s fees given: (1) Foley’s repeated claims of indigence; (2) his failure to pay the condominium. See

Foley, however, from obtaining as much financing as he could and submitting that his application for a $185,000 mortgage was denied. Nothing prevented court-ordered reserve price when seeking financing prior to the auction, and

that he could suddenly obtain $145,000 to purchase the unit within five days, effectuated an artificial, and likely prohibited, “puffing” of the price of the Society Hill, 139 N.H. at 256, Foley’s post-auction representation Wheelock been compelled to bid higher than he did, this would have auction, once he stepped into the role of a potential buyer. In fact, had

We acknowledge Foley’s claims that he “detrimentally” relied upon the

to enter any particular minimum bid, unwarranted by the competition at the Foley’s argument, we see no reason why Wheelock should have been required

“underbid” are inapt. Foley’s characterizations of Wheelock’s bid as “disingenuous” and an

Affirmed

fulfilled.

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

financial return for the parties on the sale of their condominium – had been that the purpose of the auction it had ordered – to obtain the best possible