Under New Hampshire law RSA 115-A:29, employers are required to permit any veteran who has been honorably discharged from the United States armed forces to take the day off on Veterans Day, November 11, without penalty. Even if a company does not recognize Veterans Day as a holiday, the company must allow veterans to take the day off. Employers may require a veteran wishing to take the day off to provide advance notice in accordance with the employer’s policies and procedures.
New Hampshire Superior Court rules that Consumer Protection Act does not apply to the sale of a business where buyer and seller were both businessmen without prior experience selling a business.
Precision Truck Body Equipment Company, Inc. v. Candia Trailers and Snow Equipment, Inc.
Seller, the owner of a company, sold his business to Buyer. As part of their agreement, Seller agreed not to compete with the Buyer’s “new” business. Seller later admitted that he competed with Buyer’s business, and Buyer sued, alleging that Seller breached the parties’ agreement and violated the New Hampshire Consumer Protection Act (“CPA”).
In analyzing Buyer’s CPA claim, the Court had to first determine whether the parties’ agreement constituted a business transaction involving “trade or commerce” within the meaning of the CPA. The Court looked to a recent Massachusetts Supreme Judicial Court decision interpreting the similar Massachusetts CPA. The SJC reasoned that in determining whether a transaction is a personal or business transaction, a court must consider the nature of the transaction, the character of the parties involved, the activities of the parties, whether similar activities have been undertaken in the past, whether the transaction is motivated by business concerns, and whether the participant played an active role in the transaction in the past. Similarly, the New Hampshire Supreme Court has recently emphasized that a transaction is personal if it is an isolated event, not conducted in the ordinary course of business, or if the parties are on equal footing.
The Merrimack County Superior Court determined that although this was a business transaction in that it involved the sale of a business and occurred between businessmen, it was not a business transaction for purposes of the CPA. In reaching this conclusion, the Court relied upon the fact that Seller had no prior experience selling businesses that would give him an advantage over Buyer, and both parties had owned businesses in the past. Thus, the Court held, because Seller was not in the business of selling his business and the parties were on equal footing in the sale, this was not a “business transaction” and the CPA did not apply.
The takeaway: Courts will look beyond the identity of the parties when analyzing whether a transaction is governed by the CPA. A transaction will not be classified as a business transaction merely because it occurs between two businessmen.
Court considers whether a breach of the covenant of good faith and fair dealing can be used as a basis to award attorney’s fees.
Birch Broadcasting, Inc., et al. v. Capitol Broadcasting Corporation, Inc., et al.
The parties entered into an agreement for the sale of a radio station. When the Defendants, the sellers, advised the Plaintiffs that they would no longer close on the transaction, the Plaintiffs sued for specific performance. The trial court found that the Defendants had violated the implied obligation of good faith and fair dealing by abandoning the obligations that they had undertaken and had led the Plaintiffs to believe that they would honor. The trial court ordered the Defendants to specifically perform the contract within a reasonable period of time, and the New Hampshire Supreme Court affirmed the order.
The Plaintiffs then moved to recover attorney’s fees from the Defendants. The Plaintiffs’ argued that the breach of the implied covenant of good faith and fair dealing is equivalent to the bad faith conduct which would entitle the Plaintiffs to attorney’s fees. The trial court denied this request, explaining that proof of malice or ill will is not necessary to find a breach of the implied covenant of good faith and fair dealing. However, such conduct is required for a party to demonstrate that it is entitled to recover an award of attorney’s fees. Specifically, attorney’s fees may only be awarded when one party acts “in bad faith vexatiously, wantonly, or for oppressive reasons,” where the party’s conduct is “unreasonably obdurate or obstinate, or where it should have been unnecessary for the successful party to have brought the action.” Thus, a mere breach of contract does not constitute bad faith, and the Plaintiffs were not entitled to recover attorney’s fees.
The takeaway: When a party breaches the implied covenant of good faith and fair dealing, the other party is not automatically entitled to recover its attorney’s fees.