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THE SUPREME COURT OF NEW HAMPSHIRE
___________________________
Rockingham
No. 2004-816
Barry Cohoon & a.
v.
IDM Software, Inc. & a.
Argued: October 20, 2005
Opinion Issued: December 15, 2005
Cleveland, Waters and Bass, P.A., of Concord (William B. Pribis on the brief and orally), for the plaintiffs.
Cook, Little, Rosenblatt & Manson. P.L.L.C., of Manchester (Arnold Rosenblatt and Michael S. Owen on the brief, and Mr. Rosenblatt orally), for defendant IDM Software, Inc.
McLane Graf Raulerson & Middleton, P.A., of Manchester (Wilbur A. Glahn, III and Andrea L. Daly on the brief, and Mr. Glahn orally), for defendants John H. Leggett and Stuart J. Sheppard.
NADEAU, J. The defendants, IDM Software, Inc. (IDM), John H. Leggett (Leggett), Stuart J. Sheppard (Sheppard), J. Tracy Emerick, Dana W. Leggett and Robert Sheppard appeal orders of the Trial Court (McHugh, J.) granting summary judgment to the plaintiffs, Barry Cohoon and Joseph McCarran. The plaintiffs cross appeal. We affirm in part, reverse in part, vacate in part and remand.
The following facts were either found by the trial court or are supported in the record before us. Leggett is the president and majority shareholder, as well as a director, of IDM. Sheppard is also a director and shareholder of IDM. Cohoon and McCarran purchased shares of IDM, each paying $30,000. The shares had not been registered or properly noticed in compliance with RSA 421-B:11 (Supp. 2005). As a result of errors made in registering its shares, IDM sued its prior counsel for malpractice (the malpractice suit). Among the damages asserted by IDM in that action was "exposure to shareholder claims." In its pretrial statement, IDM elaborated on this element of damages, alleging "[l]iability for claims of rescission pursuant to N.H. RSA 421-B:25 totaling $635,000, plus interest, costs and attorneys