Opinion
226-2022-CV-00218 [1]
06-17-2024
Curtis Commons, LLC, by and through its co-manager, Cliff Williams v. Melissa Arel, et al.
OMNIBUS ORDER
David A. Anderson, Associate Justice
Plaintiff Curtis Commons, LLC, by and through its co-manager, Cliff Williams, brings this consolidated action against Defendants Matthew Arel ("Matthew"), Melissa Arel ("Melissa"), Better Built Homes, LLC ("BBH"), Better Built Homes Construction Management, LLC ("BBHCM"), and Parrinello Real Estate, Inc. ("Parrinello"), alleging several claims arising from the breakdown of a business relationship. Several motions are currently pending before the Court. The Court addresses all four motions below.
Because both Matthew Arel and Melissa Arel are being sued individually in this case, the Court will refer to these parties by their first names.
By way of brief background, the Court notes the interconnectedness of the various parties involved in this case. Matthew and Williams are co-managers of their joint venture, Curtis Commons, formed for the purpose of building a residential development ("the Project") in Milford. Additionally, both Matthew and Williams are involved with managing other business entities. Matthew is a manager for co-defendants, BBH and BBHCM, and Williams is a manager of Ian James, LLC. Melissa is Matthew's wife. At all times relevant, Melissa worked as a realtor employed by Parrinello, a broker. Melissa and Parrinello provided services on behalf of Curtis Commons. Curtis Commons utilized BBH as a vendor to install roads and construct housing.
As the work was ongoing, significant disputes related to their various business dealings-both as individuals and as members of multiple interacting LLCs-arose between Matthew and Williams. In short, the parties have had considerable difficulty resolving their disputes, leading to the filing of several lawsuits involving contract, tort, and statutory claims. Those suits are now consolidated under the above listed docket.
I. Confirm, Modify, or Vacate Arbitration (Docs. 80, 82-85)
The Court first addresses the competing motions filed by Matthew and Curtis Commons, by and through its co-manager Williams, regarding the arbitration decision rendered on February 20, 2024. (See generally Docs. 80, 84.) On February 26, 2024, Matthew filed his motion to confirm the entire arbitration decision pursuant to RSA 542:8. (Doc. 80.) Williams objects to Matthew's motion to confirm, (Doc. 83), and filed a countermotion to modify and vacate certain portions of the arbitration award pursuant to RSA 542:8. (Doc. 84.) Matthew objects to Williams' motion to modify or vacate portions of the arbitration decision. (Doc. 85.)
Because both Matthew and Williams are co-managers of Curtis Commons and the concerns raised in Doc. 84 pertain to the arbitration award to Williams, the Court will refer to Williams as the movant when speaking about this motion.
By way of further background, Matthew initiated arbitration against Williams on or around February 28, 2022, in relation to their shared venture, Curtis Commons. (Doc. 80 ¶ 1.) Attorney Walter McDonough served as the appointed arbitrator and the parties held hearings before him on November 28-29, 2023. In his final award, McDonough issued findings of fact, conclusions on the claims and counterclaims brought before him, and made a final accounting of awards to both parties. (Id., Ex 1 at 15-16.)
RSA 542:8 provides:
At any time within one year after the award is made any party to the arbitration may apply to the superior court for an order confirming the award, correcting or modifying the award for plain mistake, or vacating the award for fraud, corruption, or misconduct by the parties or by the arbitrators, or on the ground that the arbitrators have exceeded their powers. Where an award is vacated and the time within which the agreement required the award to be made has not expired, the court may in its discretion, direct a rehearing by the arbitrators or by new arbitrators appointed by the court.Judicial review of an arbitrator's award is limited. Keene Sch. Dist. v. Keene Educ. Ass'n, 174 N.H. 796, 801 (2022). The Court considers arbitral awards with great deference to the arbitrator, who serves as the trier of fact. Finn v. Ballentine Partners, LLC, 169 N.H. 128, 145 (2016) (quotation omitted); Merrill Lynch Futures, Inc. v. Sands, 143 N.H. 507, 509 (1999). "Plain mistake" is defined as "an error that is apparent on the face of the record and which would have been corrected had it been called to the arbitrators' attention." Finn, 169 N.H. at 145. Plain mistakes can include mistakes of law or fact. Masse v. Com. Union Ins. Co., 136 N.H. 628, 632 (1993). In evaluating plain mistake, the Court looks to the arbitrator's decision to see if evidence on the face of the record supports it. See id.; Merrill Lynch Futures, 143 N.H. at 509. If plain mistake is found, this Court may correct it and modify the award accordingly. RSA 542:8.
If a party successfully argues that the award arises from fraud, misconduct, corruption, or was otherwise beyond the scope of the arbitrator's powers to decide, the Court may instead vacate the award. RSA 542:8. The scope of an arbitrator's authority is a question of contract interpretation. Keene Sch. Dist., 174 N.H. at 801.
In his motion to modify and vacate, Williams challenges five parts of the arbitrator's final decision. As such, the burden rests on Williams to demonstrate that parts of the arbitrator's decision should be set aside or altered. See Hoolahan v. IBC Advanced Alloys Corp., 947 F.3d 101, 110 (1st Cir. 2020) (quoting Dialysis Access Ctr., LLC v. RMS Lifeline, Inc., 932 F.3d 1 (placing the burden of proof on the party seeking to modify or vacate an arbitration agreement). The Court addresses each in turn.
A. Award Calculations for Fuel Charges
First, Williams argues that the arbitrator committed plain error and miscalculated the award to Williams resulting from improper fuel charges from Rymes Oil. The arbitrator awarded $19,229.16 for fuel charges that both parties agree were double-billed and required adjustment. However, Williams contends that the total fuel charges as reflected in Exhibit T add up to $48,458.24, and that the arbitrator accidentally failed to add the charges reflected beyond those listed on page 4 of Exhibit T. (Doc. 84 ¶ 8.) Accordingly, Williams argues that the award was a plain mistake due to mathematical error and should accordingly be increased by $29,229.08. Matthew disagrees, instead arguing that the sum was reflective of the arbitrator's evaluation of the evidence submitted, including Exhibit T. Further, he suggests that some of the Rymes Oil charges Williams alleges that the arbitrator neglected were properly charged to the project.
While this document is attached to Williams' motion (Doc. 84) as Exhibit A and Exhibit B, the Court will refer to it as Exhibit T in this order for the sake of continuity and to avoid confusion. The attachments include portions of Exhibit T from the arbitration proceedings and are referred to as such at various relevant points in the arbitration decision.
In order to find plain mistake here, there would need to be evidence in the record indicating that the arbitrator found that all of the Rymes Oil charges included in Exhibit T were valid double-charges that had not been subsequently adjusted. See Merrill Lynch Futures, Inc., 143 N.H. at 509. However, the face of the record instead shows that the arbitrator found both Exhibit T and the testimony tied to it were not entirely accurate or relevant. (Doc. 80, Ex. 1 at 5-6, 9, 14.)
Exhibit T included a financial analysis prepared by Michelle Mayo, who reviewed the accounting documents for Williams to determine which charges were proper. Mayo testified about her analysis on behalf of Williams before the arbitrator. In his written assessment of Mayo, the arbitrator found her to be "generally credible" despite not being an expert or otherwise trained as an accountant. (Id., Ex. 1 at 9.)
However, he also notes that Mayo's analysis, including Exhibit T, is limited to years up to 2021 and had not been updated to include additional accounting from 2022 or 2023. (Id.) This is of particular note because the arbitrator found Rick Hendershott, an experienced construction accountant BBH hired, had been making adjustments and reconciliations during those years to offset some of the prior problematic accounting. (Id., Ex 1 at 9.) Indeed, the arbitrator plainly states in his findings of fact that many of the elements Mayo referenced in her analysis are "not relevant" to the arbitrator's decision because the documents she reviewed did not include accounting completed after 2021. (Id., Ex 1 at 9.) Later in his decision, he goes on to describe Mayo's analysis as "a snapshot in time, prior to the reconciliation and adjustments prepared and implemented by Hendershott." (Id., Ex 1 at 9, 14.)
"[A]rbitrators, as the triers of fact, [a]re not obligated to accept any witness's testimony as true, even if the testimony was uncontradicted." Merrill Lynch Futures, 143 N.H. at 509-10 (citing Masse, 136 N.H. at 632). Here, the arbitrator made clear that only "[c]ertain of Ms. Mayo's criticisms of BBH's Costs are valid and require adjustment in the final project accounting, which will be incorporated into the Award," indicating that he also discredited portions of her analysis that would not be included in his decision. (Id., Ex 1 at 9.) (emphasis added). Further, the record shows he accepted as true evidence of at least some of Hendershott's subsequent adjustments. (See id., Ex 1 at 9, 14.)
Given that the arbitrator has unambiguously stated that he would only be incorporating Mayo's analysis, including Exhibit T, to the extent it was relevant to his final award, it is not plain mistake that the arbitrator only included some charges flagged in Mayo's analysis in his final award. (Id., Ex 1 at 9.) Williams points to no evidence, nor has the Court found any evidence apparent in the decision, that indicates that the omission of the additional Rymes Fuel charges was not an intentional adjustment made by the arbitrator. Nor has any information been offered that would imply the decision was otherwise without factual support. Accordingly, Williams' motion on this point is DENIED. See Masse, 136 N.H. at 632-33.
The Court notes that the arbitrator provided "Addendum A" in support of his decision, but the parties have not included the addendum in their filings. According to the arbitrator, Addendum A is his own "modified version of the proposed accounting summaries that [Matthew] and Williams each submitted post-hearing." (Doc. 80, Ex.1 at 8).
B. Disgorgement of Real Estate Commissions
Williams next argues that the arbitrator made a plain mistake by misapplying the law and failing to order the disgorgement of $297,730.09 in real estate commissions paid in accordance with an oral agreement between Matthew and Parrinello. (Doc. 84 ¶¶10, 15-17.) (Id. at ¶¶ 10-17.) Matthew disagrees, arguing that the caselaw Williams relies on is distinguishable from facts at hand and there is no legal authority authorizing disgorgement of fees paid under these facts. As such he asserts that the arbitrator properly exercised his judgment. The Court agrees.
On this issue, the arbitrator found there was no law that supported Williams' argument that a written agreement was absolutely required by the statute and that the case law Williams provided was factually distinct from the case at hand. (See Doc 80, Ex 1 at 12-13.) However, the arbitrator found that the brokerage agreement was nevertheless a violation of Matthew's fiduciary duty and exercised his judgment by awarding Williams with one third of the fees paid, or $99,243.36, for that breach. (See id.)
In support of both his argument here and before the arbitrator, Williams relies on RSA 331-A:25-b and Blackthorne Grp., Inc. v. Pines of Newmarket, Inc., 150 N.H. 804 (2004). In relevant part, RSA 331-A:25-b holds that "I. A licensee engaged by a seller or landlord shall: (a) Perform the terms of the written brokerage agreement made with the seller or landlord." Williams argues that this portion of the statute renders oral agreements for real estate illegal in New Hampshire, and disgorgement of the entire fee is the proper remedy laid out in Blackthorne. (Doc. 84 ¶¶ 11-13, 15-17.) By failing to find the same, he believes the arbitrator made a plain mistake of law. (Id. at ¶¶ 15-17.) The Court disagrees.
In Blackthorne, the plaintiff was a company licensed as a real estate broker in New York, but not in New Hampshire, and the defendant was an assisted living facility in New Hampshire seeking to sell the business. 150 N.H. at 805. The plaintiff entered into an oral agreement with the defendant, the essence of which provided that the defendant would hire the plaintiff to locate a buyer, assist in due diligence, negotiations, and closing in exchange for three percent of the ultimate sale price. Id. Despite requests for the oral agreement to be memorialized in writing, no such document was made. Id. When the plaintiff fulfilled their end of the bargain, the defendant did not pay the three percent fee. Id. The plaintiff sued to recover its fee, but the case was dismissed for failure to state a claim. When the plaintiff subsequently appealed, the New Hampshire Supreme Court affirmed the trial court's dismissal, relying significantly on RSA 331-A:32, which prevents persons acting as brokers without the appropriate license from bringing a civil suit to recover fees. See id.
The arbitrator was not plainly mistaken in finding Blackthorne was distinguishable from the case at hand. (See Doc. 80, Ex 1 at 12.) The Blackthorne Court declined to enforce an oral contract for any portion of unpaid broker fees because plaintiff acted as a broker without proper licensure in direct violation of RSA 331-A. Blackthorne, 150 N.H. at 808. As the arbitrator indicated in his decision, the case focused on a broker's violation of an explicit requirement of the statute relating to a lack of proper licensure. See generally id. at 805. Here, Parrinello was licensed as a broker in New Hampshire at the time and the arbitrator did not find that any explicit requirement of RSA 331-A had been violated. Further, in Blackthorne, the plaintiff sought unpaid fees from an oral contract, and here the fees have already been paid. Id.
Finally, the Court does not find the arbitrator's assessment that there is no express requirement that a brokerage agreement be in writing to be contrary to the statutory language. (Id.) The Court agrees with the arbitrator that the statute does imply that a written agreement between the broker and the seller would exist, and that parties must adhere to that agreement. However, the statute does not explicitly require that such an agreement exist in writing. Nothing in the law Williams points to, nor the arbitrator's assessment of it, indicates that the arbitrator misapplied the law by declining to order complete disgorgement due to an oral agreement. Accordingly, the Court finds no plain mistake, and Williams' motion on this matter is DENIED.
C. Other Double-Billing and Excess Charges
Williams' next argument is similar to his first argument. He claims that the arbitrator made a plain mistake by finding that the items flagged as being double-billed had already been addressed and ordering no further award be made beyond those for Rymes Fuel, Kent's Towing, and the purchase of a hydraulic hammer. (Doc. 84 ¶18.) In support of his position, he points to the analysis completed by his witness, Mayo, which he asserts the arbitrator found credible and the charges uncontested. (Id. at ¶¶19-20.) As such, Williams contends that the arbitrator should have awarded him $319,997.09 in credit for double-billing as calculated by Mayo in Exhibit T instead of finding the accounting had been adequately addressed. (See Doc. 84, Ex. B). Matthew disagrees, arguing that the arbitrator found Mayo's testimony "mostly unreliable" because it does not cover accounting after 2021. (Doc. 85 ¶ 20.) Further, he claims that many of the charges flagged by Williams and Mayo had since been reconciled after 2021. (Id. at ¶ 21.)
Williams provides this figure based on what he has found to be the total figure of double billed line items ($357,885.17) minus the awards already granted by the arbitrator for double billed charges to Rymes Fuel, Kent's Towing, and the purchase of a hydraulic hammer. (See Doc. 80, Ex. 1 at 12-13.)
As a preliminary matter, the Court addresses the conflicting readings of the arbitrator's assessment of Mayo and her financial analysis. As discussed in greater detail above, the arbitrator made clear that he found Mayo to be generally credible but found that the relevance of her analysis was limited because it did not include the subsequent adjustments Hendershott made. (Doc. 80, Ex 1 at 5-6, 9, 14.) Accordingly, he accepted and rejected portions of her analysis in rendering his final award. (See id., Ex 1 at 9, 14.)
The Court also reiterates its earlier point that arbitrators are under no obligation to accept any witness' testimony as true, "even if the evidence is uncontradicted." Merrill Lynch Futures, 143 N.H. at 509-10. Although Williams points to specific charges he believes the arbitrator overlooked he does not offer any evidence or support in the record that indicates that the arbitrator did not intentionally omit those charges in his adjustment. (See generally Doc. 84 ¶¶ 18-20; see also Doc. 84, Ex. B (reflecting portions of Exhibit T where Mayo found double-billing).) In his motion, Williams simply asserts that Mayo was credible, points to a number of charges addressed by Mayo but not the arbitrator, and concludes their omission was therefore plain mistake. (See Doc. 84 ¶¶ 18-20, Ex. B.)
Admittedly, the arbitrator offered very little analysis on this issue in his decision. (See id., Ex 1 at 13). However, this Court is "bound to grant the arbitrator a great deal of deference," particularly in regard to the arbitrator's assessment of the evidence the parties put before him. See Masse, 136 N.H. at 632 (internal quotations omitted). Indeed, the Court may not "set aside the decision merely because it believes the arbitrator's decision is against the weight of the evidence." Id.; see also White Mountains Railroad v. Beane, 39 N.H. 107, 109 (1859) ("An award is not to be disturbed because the arbitrators have come to a mistaken conclusion upon a question of fact, upon which the parties have presented and discussed their evidence and proofs, and upon which the referees have exercised their judgments.") In accordance with the standard, and absent evidence to the contrary, the Court will not infer plain mistake by the arbitrator when he omitted charges highlighted in Mayo's analysis and has indicated that much of that analysis had already been addressed by Hendershott. See id. at 632- 33.
As both parties suggest, the arbitrator had access to ample evidence to consider whether the charges were double-billed, including Williams' post-trial memorandum, Mayo's analysis and testimony, Hendershott's testimony, and all of the invoices and payment receipts submitted by Arel. (See id. ¶¶19-20; Doc. 85 ¶ 21.) With so much evidence before him, the arbitrator was in a position to serve in his role as a fact-finder and consider what, if any, part of that evidence he accepted as true. See Merrill Lynch Futures, 143 N.H. at 509 (finding that arbitrators are fact finders that are not obligated to accept evidence from any witness). As discussed above, the arbitrator exercised his discretion and declined to accept all of the evidence contained in Exhibit T or Mayo's testimony as relevant because it did not include accounting adjustments by Hendershott made in 2022 or 2023. (Id., Ex. 1 at 5-6, 9, 14) (demonstrating that the arbitrator found the relevance of Mayo's testimony and analysis was limited by virtue of being out of date). He similarly rejected portions of Williams' post-trial motion related to double-billing, which the arbitrator found were repeated in other claims by Williams. (Id., Ex. 1 at 13.) Then, having reviewed all of the evidence put before him, including but not limited to the parties' memoranda, testimony from witnesses, and the accounting documents, the arbitrator was able to incorporate his findings of fact into a final accounting that "reflect[ed] adjustments that [he] found are fair and reasonable." (Id., Ex. 1 at 15.)
As referenced by the Court in footnote 5, the arbitrator prepared a final accounting in support of his award in Addendum A. (Doc. 80, Ex. 1 at 15). Neither party included Addendum A with their respective filings.
Taken altogether, the Court finds that arbitrator's ultimate conclusion that the issue of double-billing had been resolved with no further award necessary has factual support in the record. Although the arbitrator did not provide extensive analysis in his decision describing the adjustments he made or which costs he found were double-billed in 2021 but adjusted prior to arbitration, he made clear that he rejected some evidence related to Williams' claims of double-billing and that his final accounting included the adjustments he deemed necessary.
Because the arbitrator unambiguously indicated that he did not find all of the evidence from Mayo or Williams to be valid, the Court is unpersuaded by Williams' argument that the omission of certain charges flagged by Mayo in the final award is clearly plain mistake. See Hoolahan, 947, F.3d at 110 (placing the burden of proof on the party challenging the arbitration award). Further, the fact that the arbitrator considered all of the accounting materials and rendered a final accounting reflecting his own adjustments indicates that there was evidence supporting his conclusion that the double-billing had already been addressed. Where there is evidence in the record supporting the arbitrator's decision, the Court defers to the arbitrator. Merrill Lynch Futures, 143 N.H. at 509 (citing Masse, 136 N.H. at 632). Accordingly, Williams' motion to modify on this issue is DENIED.
D. House Deposits
Next, Williams argues that the house deposits Parrinello paid to BBH and BBHCM were beyond the scope of arbitration and should be decided at trial. (Doc. 84 ¶¶ 21-22.) In the alternative, Williams argues the arbitrator's finding of no damages on this issue constituted a plain mistake and that he should have been awarded $538,852.52 for misdirected deposits that should have been paid to Curtis Commons. (Id. at ¶¶ 23-24.) Matthew responds that, regardless of whether the issue of the deposits would have initially been beyond arbitration, Williams submitted the issue to the arbitrator himself and cannot now claim that it is outside the arbitrator's authority when he voluntarily agreed to have it considered. (Doc. 85 at ¶¶ 23-24.) Furthermore, Matthew indicates this issue arose because funds that should have been paid from Parrinello to Curtis Commons so Curtis Commons could then pay BBH were instead paid directly from Parrinello to BBH on Curtis Commons' behalf. (See Doc. 85 at ¶ 28.) As such, he asserts that the arbitrator properly concluded that although the accounting was "sloppy," Williams did not suffer any damages because the full value of the deposits were still properly applied to Curtis Commons. (Id.) Accordingly, Matthew argues that the decision was both within the scope of arbitration and that there was no plain mistake.
This motion and subsequent motions addressed in this order refers to the "trial in June." When the motions were filed, trial in this case was scheduled for June 2024 but has since been continued to October 2024.
As a preliminary matter, the Court notes that a question of whether Williams contested that the deposits issue was within the scope of arbitration was raised at the hearing on March 28, 2024. At that time, Williams believed he had challenged whether this issue could be decided by arbitration in prior pleadings to the arbitrator or in his post-hearing memo before the final decision was issued. (See Hr'g at 11:40-11:46 AM). Matthew contested that suggestion. (Id.) The Court gave Williams until April 11, 2024, to locate and file any supplemental documentation demonstrating that he had challenged whether this issue could be heard by the arbitrator prior to issuance of the final decision. (Id.) No such documentation was filed to the Court and the Court accordingly assumes that no such challenge was brought by Williams.
The scope of an arbitrator's authority is generally a matter of contract interpretation. Keene Sch. Dist., 174 N.H. at 801. "An arbitrator's jurisdiction over an issue depends upon the voluntary agreement of the parties." Id. Although Williams now claims the deposits issue is outside the authority of the arbitrator, there is evidence suggesting he submitted the issue to arbitration. (See Doc. 80, Ex 1 at 14-15) (addressing the deposits under the heading "B. Williams' Claims"). In Keene Sch. Dist., the New Hampshire Supreme Court addressed a similar situation and found that a party could not argue that an issue it brought before the arbitrator was beyond the arbitrator's authority after receiving a final decision. Id. at 802 ("[T]he School District cannot now complain that the arbitrator lacked the authority to address an argument the School District had raised."). Given that there is no evidence he attempted to retract the deposits issue from arbitration prior to receiving a final decision on the matter, Williams may not now claim that an issue he brought before the arbitrator was beyond the arbitrator's authority. See id. As such, the issue was properly within the arbitrator's authority to decide.
The Court turns to the issue of plain mistake raised in the alternative. The arbitrator found that Matthew did not breach his fiduciary duty. (Doc. 80, Ex 1 at 15.) The arbitrator also determined that Curtis Commons was properly credited with the revenues for the deposits and the deposits were correctly reflected in the HUD settlement statements. (Id.) Despite again noting that the accounting was completed poorly, the arbitrator did not find that Williams suffered damage as a result and therefore awarded no funds. (Id.)
Williams offers Exhibit D as evidence of plain mistake, arguing that it shows the deposits provided to BBH were not used to offset any costs Curtis Commons owed BBH. (See Doc 84, Ex. D.) Exhibit D as presented to the Court by Williams includes (1) a tally of deposits for the housing lots and (2) photocopies of checks to BBH from Parrinello. (Id., Ex. D.) The content in the exhibit does not apparently demonstrate Williams' premise that the payments were never credited back to Curtis Commons, but rather shows the uncontested fact that Parrinello paid the deposits directly to BBH. (See id.) The Court finds Williams' argument conclusory and generally unsupported by Exhibit D. (See id. at ¶ 23, Ex. D.)
Submitted at least in part before the arbitrator as Exhibit O.
Further, the Court is unpersuaded that Williams' argument or exhibit demonstrates plain mistake by the arbitrator-particularly where the arbitrator pointed to the evidence he reviewed and relied on in reaching his conclusion about the deposits. See Hoolahan, 947 F.3d at 110 (holding that the burden is on moving party "to establish that the arbitrator's award should be set aside."). In his analysis of this issue, the arbitrator describes how Curtis Commons did not receive the deposits directly but still received the appropriate credit for those deposits in other accounting documents. (Doc. 80, Ex. 1 at 15.) More specifically, the arbitrator based his conclusion on the fact that deposits were properly "reflected on the HUD settlement statements as part of the full purchase price for each lot." (Id.) He further relies on evidence that the full purchase price, including the deposit, "rolls up to the total revenues" for Curtis Commons from the home sales. (Id.) While the arbitrator found the actual accounting process to be below standard, he simultaneously concluded that the outcome of the accounting was correct on balance based on the evidence he reviewed. (Id.)
Therefore, where the arbitrator points directly to evidence he relied on in making his decision and ultimately found that Williams suffered no damage in his final accounting, the Court defers to the arbitrator's decision on this issue. Merrill Lynch Futures, 143 N.H. at 509 (holding the Court should defer to the arbitrator's decision "if the record reveals evidence supporting it"); Masse, 136 N.H. at 632 (indicating that the Court should grant great deference to the fact-findings of the arbitrator). Accordingly, Williams' motion on this issue is DENIED.
E. Initial Contributions
Lastly, Williams argues that the arbitrator made a plain mistake in finding that Matthew submitted his full $120,000 initial capital contribution. More specifically, Williams alleges that the date associated with the contribution was wrong, and that it was improper to credit any portion of the capital contribution made as an offset in costs through BBH.
As Matthew points out in his response, Williams appears to acknowledge that Matthew provided contributions adding up to $120,000 to Curtis Commons. (Doc. 85 ¶ 29; see Doc. 84 ¶ 27.) In fact, Williams includes an image of a ledger in his motion that reflects Matthew paying various costs for Curtis Common, totaling to $120,000 in capital contributions. (Doc. 84 ¶ 27.) Further, Williams indicates this ledger was submitted by Matthew to the arbitrator to show he had made those contributions, which supports the arbitrator's ultimate finding that Matthew paid $120,000 in capital contributions through offset costs. (Id.) See Merrill Lynch Futures, 143 N.H. at 509 (holding that the Court should defer to the arbitrator's decision when it is supported by evidence on the record). Williams does not offer any evidence that the arbitrator was incorrect in finding that Matthew contributed these funds. (See generally Doc. 84 ¶ 27, Ex. D.)
However, the image of the ledger does suggest that plain mistake may have occurred as to the date the arbitrator found Matthew made his contribution. Williams argues that the arbitrator found that Matthew made his capital contributions on January 12, 2019, but the ledger shows the last payment towards the $120,000 being made on June 4, 2020. (Id.) In his decision, the arbitrator relied on a journal entry made by Matthew stating he would make capital contributions totaling $120,000 on January 12, 2019. (See Doc. 80, Ex. 1 at 11) This journal entry was submitted to the arbitrator as Exhibit A-6. (See id.)
Although the Court has some doubts about whether the arbitrator found that the $120,000 contributions were made on January 12, 2019, or merely relied on evidence generated on that day, the Court considers whether there is plain mistake as to the date. (See id.) ("[Matthew] demonstrated payment of his capital contribution through a journal entry created on January 12, 2019.") Assuming without deciding that the arbitrator meant that the contributions were made on the same date of the journal entry, the Court agrees with Williams that the date referenced would constitute a plain mistake of fact.
However, even in finding that the date of the contributions is plain mistake, there is no indication that the mistake affected the arbitrators award. Indeed, the arbitrator provided no analysis beyond stating his conclusion that Matthew demonstrated payment of his capital contribution through Exhibit A-6, therefore disposing of Williams' claim that Matthew had not paid. The date that the contribution was made is irrelevant to the final award, which in this case was nothing. In situations where plain mistake exists but the court concludes that the mistake alleged had no effect on the arbitrator's ultimate award, the court "must refrain from altering the arbitrator's decision." Masse, 136 N.H. at 633. As such, the Court DENIES Williams' motion on this issue.
In accordance with the above, Matthew's Motion to Confirm Arbitration is GRANTED and Williams' Motion to Modify or Vacate Arbitration is DENIED.
II. Scope of Trial (Docs. 87, 89)
The Court next addresses Williams' motion regarding the scope of the pending trial. (Doc. 87.) Matthew, BBH, and BBHCM (jointly "Defendants") object to the motion. (Doc. 89.) Williams moves to include several issues at the upcoming trial, including any pending arbitration issues. (Doc. 87 ¶¶1-2.) Defendants object, arguing that this motion is outside of accepted motion practice, improperly includes arbitration issues, and attempts to bring new issues forward after the close of discovery. (Doc. 89 ¶¶ 1-2, 7.)
To the extent that Williams' motion seeks to include the arbitration issues pursuant to RSA 542:8 for consideration at trial, the Court incorporates its analysis supra and finds no outstanding issues related to arbitration pursuant to RSA 542:8. Cf. Antosz v. Allain, 163 N.H. 298, 302 (2012) (declining to address parties' other arguments where the court's holding on one issue was dispositive). Beyond the arbitration issues, Williams requests the Court address the following issues at trial:
A. All issues concerning the Barrington, NH project;
B. All issues concerning the bulldozer claims;
C. All issues concerning the liability of [BBH] and [BBHCM] (with a credit for the awards in arbitration against Matt Arel for breach of fiduciary duty in the Curtis Commons project);
D. Claims against Melissa Arel for real estate commission concerning both the Curtis Commons project and Barrington project; and
E. Claims against [Parrinello] for both the Curtis Commons project and Barrington project commissions and deposits (with a credit for the award in arbitration against Matt Arel for the Curtis Commons project commissions"(Doc. 87 ¶ 1.) The Court declines to consider Williams' request as presented at this time. The trial in this case will cover four cases which were consolidated into a single docket in May 2023 after several years of pending litigation and motion practice. For the sake of judicial efficiency, the Court requests the parties each submit a pre-trial memorandum outlining the remaining issues to be determined at trial. The memoranda will be due on September 23, 2024, thirty days before the start of trial, with responses due on October 7, 2024.
Accordingly, Williams' motion is DENIED to the extent it presently requests affirmative relief. The Court will address any further issues following receipt of the pre-trial memoranda.
III. Contempt and Substituted Surety (Docs. 88, 90)
Finally, the Court addresses BBH's motion for contempt and substituted surety against Williams and Ian James LLC ("Ian James"), to which Williams objects.
BBH alleges that Williams and Ian James violated a joint attachment stipulation ("joint stipulation") the parties entered under docket number 216-2021-CV-00139. Better Built Homes, LLC v. Clifford James Williams, et al, No. 216-2021-CV-00139, Doc. 14. In relevant part, that joint stipulation agreement acknowledges that (1) Williams and Ian James have "not conveyed the subject CAT Bulldozer with serial number 0D5KVKW200351" and (2) Williams and Ian James "agree and stipulate that they will not convey or further encumber the subject CAT Bulldozer until this matter has been resolved, either through settlement or following a trial." (Id. at 1.) The Court (Messer, J.) approved the stipulation on May 26, 2021. (Id. at 2.)
BBH now alleges that in violation of their stipulation agreement, Williams and Ian James have sold the CAT Bulldozer before the matter has been settled or tried. (Doc. 88.) Accordingly, it requests the Court find Williams and Ian James in contempt and order they post surety in the amount of $120,000 pursuant to New Hampshire Superior Court Civil Rule 52. (Id. at 2.) In his objection, Williams does not deny that the CAT Bulldozer with serial number 0D5KVKW200351 has been sold. (Doc. 90 at ¶ 5.) Instead, he argues that BBH has never had an ownership interest in the CAT Bulldozer. (Id. at ¶¶1-5.) He further suggests he believed he had been permitted to sell the CAT Bulldozer because BBH indicated it had no interest in the equipment during a previous negotiation between the parties. (Id. at ¶ 5.)
As a preliminary matter, stipulation agreements are considered contractual in nature and are accordingly subject to contract law. Kilroe v. Troast, 117 N.H. 598, 599 (1977). Stipulations may be converted into court orders upon their approval by the Court. In re Goulart, 158 N.H. 328, 330 (2009) ("The superior court's . . . approval of the parties' stipulated parenting plan made the stipulation an order"); cf. id. (indicating that the court adopted the stipulation "as the court's decree"). Here, where the Court approved the stipulation agreement between Williams/Ian James and BBH, the stipulation agreement became a court order on May 26, 2021.
N.H. Super. Ct. CIV. R. 52(b), provides in relevant part that:
Attachments for contempt may be issued by the court at any time upon evidence of the violation of any injunction or other order, . . . and commitment may be made thereon. Parties may be arrested upon order of court and required to give bonds for appearance and to abide the order of court in any case where it shall be deemed necessary."An individual subject to a court order must obey that order until it is reversed on direct appeal, stayed or dissolved by the court." City of Lebanon v. Townsend, 120 N.H. 836, 839 (1980). Failure to comply with the court order can result in a finding of contempt. Town of Epping v. Harvey, 129 N.H. 688, 691 (1987). "The difference between civil and criminal contempt is the character of the punishment." In re Brownell, 163 N.H. 593, 601 (2012). "In civil contempt, the punishment is remedial, coercive, and for the benefit of the complainant." (Id.)
Here, the joint stipulation provided that Williams and Ian James possessed the Cat Bulldozer and would not sell or encumber it until the case was resolved through trial or settlement. Better Built Homes, LLC, No. 216-2021-CV-00139, Doc. 14 at 1. As mentioned above, Docket 216-2021-CV-00139 has since been consolidated into the above-captioned case and has not been settled or gone to trial. Further, there is no evidence that the joint stipulation has been otherwise reversed, stayed, or dissolved by the Court. Cf. Townsend, 120 N.H. at 839. Accordingly, the Court finds Williams and Ian James are clearly in violation of the joint stipulation. Cf. Harvey, 129 N.H. at 691.
Williams' arguments pertaining to the BBH's alleged ownership interest is not persuasive. Notably, the joint stipulation arose out of BBH's disputed motion to attach the CAT Bulldozer. See generally Better Built Homes, LLC, No. 216-2021-CV-00139, Docs. 2, 6, 9, 14. The Court (Messer, J.) adopted the parties' joint stipulation in lieu of issuing its own order, essentially attaching the property as security for future judgment. See Better Built Homes, LLC, No. 216-2021-CV-00139, Doc. 14. A creditor does not need to have an interest in the property to attach it as a security. See 7 C.J.S. Attachment § 1 ("Attachment is an ancillary or provisional remedy that seizes property in advance of trial to aid in collecting on a judgment. It allows a creditor to levy a security interest on the debtor's property in an effort to secure its claim against the debtor in the event that a judgment is entered. Attachment thus conserves property for eventual post judgment execution.") In other words, the fact that BBH may not have an interest in the CAT Bulldozer did not relieve Williams/Ian James of their duty to comply with the Court order.
Accordingly, Williams and Ian James were still obligated to maintain possession of the CAT Bulldozer until resolution of the matter. Therefore, the Court finds Williams and Ian James have willfully and intentionally refused to comply with the Court's order and are in civil contempt. This contempt ruling may be purged by posting a bond with the court in the amount received for the sale of the CAT Bulldozer with serial number 0D5KVKW200351. In accordance with the above, the Court GRANTS in part and DENIES in part BBH's motion for contempt.
SO ORDERED.