2016-0212, City of Rochester v. Marcel A. Payeur, Inc. & a.

defendant Whitman & Howard n/k/a AECOM Technical Services, Inc. Parent and Nicholas F. Casolaro on the brief, and Ms. Parent orally), for McLane Middleton, Professional Association, of Manchester (Jennifer L.

for defendant Chicago Bridge & Iron n/k/a CB&I, Inc. Rubinstein and Nathan R. Fennessy on the brief, and Mr. Rubinstein orally), Preti, Flaherty, Beliveau, & Pachios LLP, of Concord (Kenneth E.

Pappas orally), for the plaintiff. Pappas, Matthew J. Delude, and Adam R. Mordecai on the brief, and Mr. Primmer Piper Eggleston & Cramer PC, of Manchester (Thomas J.

No. 2016 - 0212 Strafford

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 to press. Errors may be reported by E - mail at the following address: editorial errors in order that corrections may be made before the opinion goes Hampshire, One Charles Doe Drive, Concor d, 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 p. 2 22 as 2

nearby residents, drain the Tank, and remove it from service. The City In December p. 2 2011, the Tan k developed a leak. The City had to evacuate

modification, under Wright - Pierce’s supervision, in November p. 2 2009. design work for the modification project. Payeur substantially completed the Defendant Wright - Pierce, a Maine corporation, performed the engineering and installing a mixer, and modifying the Tank to accommodate the mixer. (Payeur) to service the Tank by recoating the Tank’s interior and exterior, In June 2009, the City contracted defendant Marcel A. Payeur, Inc.

year. CB&I completed the T ank in 1985, and it was placed into serv ic e that same Tank). AECOM designed the Ta nk and oversaw its construction by CB&I. water storage tanks, one of which is the Rochester Hill Water Storage Tank (the System, whi ch provides water to residents of the City. The C ity operates three The City’s Department of Public Works owns and operates the Rochester Water The following facts are drawn from the interlocutory appeal statement.

remand. with the City. See RSA 508:4, I (1983) (amended 1986). We affirm and was in effect when CB&I and AECOM substantially completed th eir contract Services, Inc. (AECOM) from the bar of the six - year statute of limitations that n/k/a CB&I, Inc. (CB&I) and Whitman & Howard n/k/a AECOM Technical so as to exempt the City’s claims against defendants Chicago Bridge & Iron doctrine of n ullum t empus occurrit regi (“time does not run against the king”) appeal, the City asserts that the trial court erred in refusing to apply the the City’s claim s against two of the four defendants it sued for damages. On Rochester (City), from an order of the Superior Court (Houran, J.) dismissing LYNN, J. This is an interlocutory appeal by the plaintiff, the City of

Hampshire/Vermont Chapter, as amicus cur i ae. Gagliuso on the bri ef), for Associated Builders and Contractors, New Gagliuso & Gagliuso Professional Ass ociatio n, of Merrimack (Richard C.

for defendant Wright - Pierce, filed no brief. Sheehan, Phinney, Bass & Green, P.A., of Manchester (Peter S. Cowan),

Marcel A. Payeur, Inc., filed no brief. Morrison Mahoney, LLP, of Manchester (Ralph N. Suozzo), for def endant p. 3 3

State v. Franklin Falls Co., 49 N.H. 240, 252 (1870). Sovereigns are impersonal and thus are sovereigns) cannot be expected to be as vigilant as individuals are in preserving their rights. The historical justification for the doctrine is that the king (and, by analogy, modern day 1

in New Hampshire,” id., our case law applying the doctrine is spars e. We 1 N.H. at 45. Although “n ullum tempus endures as a recognized d octrine of law sovereign from general limitations periods.” Lake Winnipesaukee Resort, 159 “The doctrine of nullum tempus is a common law rule excepting the

claims here.” doctrine of nullum tempus bars the application of RSA 508:4 to the City’s limitation [s] to claims brought by a municipality”; and (2) “Whether the nullum tempus applies to municipalities to bar the application o f statutes of T he City submits two issues for our review: (1) “Whether the doctrine of

limitations defense as a matter of law, our review is de novo.”). Resort, 159 N.H. 42, 45 (2009) (“Because the trial court rejected the statute of AECOM. Therefore, our review is de novo. See State v. Lake Winnipesaukee and that the statute of limitations barred the City’s claims against CB&I and ruled as a matter of law that the doctrine of nullum t empus was inapplicable the trial court assumed the factual allegations of the complaint to be true, and Bruk, 140 N.H. 180, 181 (1995). However, in ruling on the motion to dismiss, to which defendants CB&I and AECOM bear the burden of proof. Glines v. The statute of limitations is an affirmative defense and thus a matter as

interlocutory appeal. motions to dismiss. Thereafter, the trial court approved, and we accepted, this from running against the City. The trial court granted CB&I and AECOM’s arguing that the doctrine of nullum tempus precluded the statute of limitations arguing that the claims were time - barred by RSA 508:4. The City objected, CB&I and AECOM moved to dismiss the City’s claims against them,

with AECOM’s design, and AECOM had failed to adequately monitor CB&I. that, in 1985, CB&I had failed to properly construct the Tank in accordanc e failed to properly supervise Payeur’s 2009 modification work; it also alleged defendants. The City ’s amended complai nt alleged that Wright - Pierce had 2014, t he City named CB& I, AECOM, and Wright - Pierce as additional contract, breach of warranty, negligence, and unjust enrichment. In April The City filed suit against Payeur in November 2012, alleging breach of

the modifications in accordance with Wright - Pierce’s design. inspected the Tank and discovered that Payeur had failed to properly construct p. 4 4

rights”). declining to apply nullum tempus to municipalities with regard to “contracts or mere private t empus to municipalities with regard to “public rights” and “property held for public use,” but limitations.”); Brown v. Trustees of Sch ools, 79 N.E. 579, 579 - 80 (Ill. 1906) (applying nullum within its delegated governmental capacity, is not impliedly bound by the ordinary statute of activity.”); State v. Goldfarb, 278 A.2d 818, 822 (Conn. 1971) (“[A] subdivision of the state, acting the action involves a public or governmental activity, as opposed to a private or proprietary exempt actions by municipalities and counties in Iowa from a general statute of limitations unless Mach ine & Tool Co., 728 N.W.2d 163, 170 (Iowa 2006) (“[N]ullum tempus doctrine does not limited fashion, using a variety of tests to determine when it applies. See, e.g., Fennelly v. A – 1 The remaining states that have addressed the issue apply nullum tempus to municipalities in a nullum tempus applies to state and all political subdivisions of state, including municipalities). at Gulfport, 566 So. 2d 202, 206 (Miss. 1990) (recognizing that, by state constitution and statute, extent that they apply the doctrine to their state government. See, e.g., Enroth v. Memorial Hosp. ....” (quotation omitted)). Other states extend nullum tempus to municipalities to the same o nly applies in favor of the sovereign power, and has no application to municipal corporations Windstream Nebraska, Inc., 800 F. Supp. 2d 1030, 1035 (D. Neb. 2011) (“[N]ullum tempus... nullum tempus to municipalities in any circumstances. See, e.g., City of Lincoln, Neb. v. Other states faced with this issue have dealt with it in different ways. Some states do not extend 2 p. 4 45 (quotation omitted). injury and loss, by the negligence of public officers.” Lake Winnipesaukee Resort, 159 N.H. at to further “the great public policy of preserving the public rights, revenues, and property from fully occupied with the regular routine of official duties.” Id. Therefore, the doctrine is thought limited to acting through agents such as state officials, who “are generally few in number and

tempus to a municipality’s contract claims is not supported by the public claims against the defendants. We decline to do so because applying nullum The City urges us to apply the doctrine of nullum tempus to its contract

claims asserted by municipalities. 2 We have not previously determined whether nullum tempus applie s to

(2007) (prohibiting adverse possession of state lands). (prohibiting the acquisition of prescriptive rights in public grounds); RSA p. 5 539:6 acquisition of prescriptive rights in state waters); RSA p. 4 477:34 (2013) public highways); RSA 477:33 (2013) (p rohibiting, in some circumstances, t he See RSA 236:30 (2009) (prohibiting prescriptive periods from running against the doctrine with respect to adverse possession and prescriptive easements. period). Additionally, we note that t he New Hampshi re legislature has codified government agency from asserting its claim after the running of the limitations 192, 194 (1956) (holding that a non - claim statute did not preclude a federal care from his estate. But see Reconstruction &c. Corp. v. Faulkner, 100 N.H. non - claim statute of limitations to a s tate action to recover an inmate’s cost of 80, 82 (1967), we declined to apply nullum tempus to bar the application of a Winnipesaukee Resort, 1 59 N.H. at 45 - 49. In In re Dockham Estate, 108 N.H. statute of limitations for personal actions, RSA 508:4, I (2010). Lake tempus exempted a state civil enforcement action from the current three - year applied the doctrine in Lake Winnipesaukee Resort, when we held that nullum 5

ultimate right at issue test, discretionary function test, or another test would be proper. doctrine applies. However, in light of our holding, we need not decide at this time whether the use either an “ultimate right at issue” test or a “discretionary function” test to determine when the The City argues that if we apply nullum tempus to municipalities on a limited basis, we should 3

which it may legally enter into in the same manner as a private corporation or municipal corporation is bound by, and may sue and be sued on, all contracts a municipality enters into a contract, it acts as does any private party: “[A] vigilant ly enforce their contract rights in a timely fashion. Furthermore, when Rather, municipalities generally are as equipped as private individual s to undertakings are un likely to lead to unknown violation s of public rights. contracts into which they enter. Thus, a municipality ’s contractual Conversely, public bodies such as municipalities are aware of the

in governmental bodies’ enforcement prowess, to the detriment of public rights. good by preventing wrongdoers from benefitting from the limitations inherent Id. Thus, again in this context, nullum tempus operates to protect the public aware of a very large proportion of the infringements on the rights of the state.” (1870). As a result, “i t may b e doubted whether [government officials] are ever at the instigation of individuals.” State v. Franklin Falls Co., 49 N.H. 240, 2 p. 5 52 “do not generally institute proceedings to punish violations of the laws, except always able to promptly discover the existence of such violations. S tate agents for violations of state statutes or local ordinances, governmental agents are not Similarly, in the case of enforcement actions to recover fines or penalties

failure to detect unknown encroachments. protecting public property rights from loss that could otherwise result from nullum tempus to adverse possession claims serves the important purpose of duties, to detect encroachments on these rights, application of the doctrine of universe of public employees, who are otherwise occupied with their regular and easement rights, as well as governmental bodies’ need to rely on the finite omitted). Given the vast extent and wide variety of publicly - owned land, water Wolfeboro, 143 N.H. 481, 484 (1999) (emphasis added; brackets and quotati on permission, but without regard to the owner’s consent.” Sandford v. Town of right was being exercised, not in reliance upon the owner’s toleration or been such as to show that the owner knew or ought to have known that the Kazmirchuk, 146 N.H. 640, 642 (2001). “[T]he nature of the use must have continued for the applicable limitations period. See, e.g., Bonardi v. has committed a trespassory invasion of the owner’s property rights that cases of adverse possession, the very basis for the claim is that the claimant does not support extending the doctrine to a municipality’s contract claims. In possession claims against public property and state civil enforcement actions T he public policy supporting application of nullum t empus to adverse

statutes of limitations. 3 policy underlying nullum tempus and undermines the public policy underlying p. 6 6

action. these cases provide no support for the application of nullum tempus to a municipality’s contract adverse possession of public highways or lands, which is prohibited by statute. Consequently, (1908); Thompson v. Major, 58 N.H. 242, 244 (1878). However, each of these cases in volved Windham v. Jubinville, 92 N.H. 102, 104 (1942); see also Manchester v. Hodge, 74 N.H. 4 p. 6 68, 470 principle that “[a] public right once acquired cannot be lost to an individual by adverse use.” generally and as applied to contract actions. The City also relies up on our case law for the nullum tempus, the statutes are silent regarding the common - law nullum tempus doctrine, both acquiring prescripti ve rights against public lands and state waters, which mirrors the effects of reasons stated in the text. Although RSA 477:33 and RSA 477:34 prohibit individuals from support the application of nullum tempus to a municipality’s contract actions, we disagree for the nullum tempus t o municipalities. To the extent that the City contends that these authorities The City argues that RSA 477:33, RSA 477:34, and our case law support the application of 4

during which plaintiffs may seek recovery on otherwise sound causes of defendants generally against stale claims and in insuring a reasonable perio d a balance among State interests in protecting both forum courts and p. 6 629 (1974). “Such statutes thus represent the legislature’s attempt to achieve fraudulent claims. Id. at 14; Dupuis v. S mith Properties, I nc., 114 N. H. 625, timely notice of actions against them and protect defendants from stale or N.H. 6, 14 (1988). Statute s of limitations both insure that defendants receive memories fade with the passage of t ime.” Keeton v. Hustler Magazine, Inc., 131 consuming both to defend against and to try claims as evidence disappears and Statutes of limitation s “reflect the fact that it becomes more difficult and time - 508:4 would undermine the public policy behind statutes of limitations. Allowing a municipality to bring contract claims notwithstandin g RSA

the public ’s interest in those rights. 4 their contract rights, the doctrine of nullum tempus is not necessary to protect are private parties. Because municipalities are not at a disadvantage to assert private parties, and they are equally equipped to assert their contract rights as In sum, municipalities enter into contracts in the same manner as

sovereign. municipality ent ers a contract, it is acting as does a private party and not as a immunity as a defense to contract claims demonstrat es that when a 115 N.H. 340, 342 (1975). Thus, a municipality’s inability to raise sovereign sovereignty. See Lake Winn i pesaukee Resort, 159 N.H. at 45; Sousa v. State, tempus are distinct doctrines, both have their origin s as incidents of to local governmental units.”). Although sovereign immunity and nullum of government from liability on contracts has never been regarded as applicable defense to contract claims. See Great Lakes, 135 N.H. at 279 (“The immunity Additionally, municipalities cannot raise sovereign immunity as a

municipalities may sue and be sued). municipal corporations to make contracts); RSA 31:1 (2000) (stating that 2 p. 7 78 - 79 (1992) (quotat ion omitted); see also RSA 31:3 (2000) (authorizing an individual.” Great Lakes Aircraft Co. v. City of Claremont, 135 N.H. 270, 7

DALIANIS, C.J.