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Laws-info.com » Cases » New Hampshire » Supreme Court » 2007 » 2006-382, PATRICK CANTWELL v. J & R PROPERTIES UNLIMITED, INC.
2006-382, PATRICK CANTWELL v. J & R PROPERTIES UNLIMITED, INC.
State: New Hampshire
Court: Supreme Court
Docket No: 2006-382
Case Date: 06/08/2007
Preview:NOTICE: This opinion is subject to motions for rehearing under Rule 22 as well as formal revision before publication in the New Hampshire Reports. Readers are requested to notify the Reporter, Supreme Court of New Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any editorial errors in order that corrections may be made before the opinion goes to press. Errors may be reported by E-mail at the following address: reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00 a.m. on the morning of their release. The direct address of the court's home page is: http://www.courts.state.nh.us/supreme. THE SUPREME COURT OF NEW HAMPSHIRE ___________________________ Grafton No. 2006-382 PATRICK CANTWELL v. J & R PROPERTIES UNLIMITED, INC. Argued: April 3, 2007 Opinion Issued: May 30, 2007 Brannen, Dunn & Stewart, PLLC, of Lebanon (Barney L. Brannen on the brief and orally), for the plaintiff. Janson & Koppenheffer, LLP, of Lebanon (William K. Koppenheffer on the brief and orally), for the defendant. DALIANIS, J. The plaintiff, Patrick Cantwell, appeals the order of the Superior Court (Houran, J.) dismissing his class action claims brought against the defendant, J & R Properties Unlimited, Inc., and denying his motion to compel discovery responses. He also appeals the order of the Superior Court (Burling, J.) dismissing his New Hampshire Consumer Protection Act (CPA) claim. See RSA ch. 358-A (1995 & Supp. 2006). The defendant cross-appeals the order of the Superior Court (Houran, J.) granting partial summary judgment to the plaintiff on his claim that the defendant violated RSA 540-A:6, I (1997) (amended 2006) by failing to give him a signed receipt for his security deposit. We affirm in part, reverse in part, vacate in part and remand.

The record supports the following: In April 2003, the plaintiff and four others entered into an agreement with the defendant to rent residential property in Hanover. Under its terms, the plaintiff and his co-tenants gave the defendant $4,300 as a security deposit. The plaintiff's contribution to the security deposit was $537.50, which he paid by personal check. The plaintiff and his co-tenants terminated their tenancy in June 2004. The defendant failed to pay interest on the plaintiff's security deposit within thirty days of the termination of the tenancy, paying it instead on August 5, 2004. See RSA 540-A:7, I (2007). In February 2005, the plaintiff brought individual and class claims against the defendant for failing to pay interest on security deposits and an individual claim against the defendant for failing to provide him with a signed receipt for his deposit. The defendant objected to the plaintiff's class claim and moved for partial summary judgment on his individual claim that it failed to provide him with a signed receipt. The plaintiff countered with his own motion seeking partial summary judgment as to the defendant's liability on his receipt claim. The trial court denied class certification and granted the plaintiff partial summary judgment on the receipt claim. Thereafter, the plaintiff moved to compel responses to discovery related to his class claims, which the court denied, explaining that the discovery sought was irrelevant, as the class claims had been dismissed. The plaintiff then moved for summary judgment with respect to damages for his receipt claim and with respect to liability and damages for the defendant's failure to pay interest on his security deposit. The defendant conceded that the plaintiff was due the damages he sought for his receipt claim and admitted that it had failed to pay him interest on his security deposit in a timely fashion. The defendant argued that the damages to which the plaintiff was entitled for its late payment of interest were equal to the amount of his contribution to the deposit, i.e., $537.50. The trial court agreed, and rejected the plaintiff's assertion that he was entitled to a remedy under the CPA for the defendant's failure to timely pay the interest. This appeal and cross-appeal followed. I The plaintiff first challenges the trial court's dismissal of his class claims and its later denial of discovery related to those claims. Class actions may be brought under Superior Court Rule 27-A, which provides, in pertinent part:

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(a) Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all if: (1) The class is so numerous that joinder of all members, whether otherwise required or permitted, is impracticable; (2) There are questions of law or fact common to the class which predominate over any questions affecting only individual members; (3) The claims or defenses of the representative parties are typical of the claims or defenses of the class; (4) The representative parties will fairly and adequately protect the interests of the class; (5) A class action is superior to other available methods for the fair and efficient adjudication of the controversy; and (6) The attorney for the representative parties will adequately represent the interests of the class. The plaintiff alleged on information and belief that the defendant had "repeatedly failed to account properly for or to pay interest on security deposits taken from numerous other residential tenants, similarly situated" to him. He contended that, as the number of present and former tenants of the defendant was numerous and many live throughout the United States, "joinder of all prospective class members" was impracticable. He identified the following questions of law and fact common to all class members and asserted that these questions predominated over any question affecting only an individual class member: (1) whether the defendant systematically failed to account properly for or to pay interest on security deposits; (2) the amount of interest earned but not paid on the security deposits; (3) the measure of damages; (4) whether the defendant's conduct violated the CPA; and (5) whether the defendant knowingly and/or willfully violated the CPA. He contended that his claims were typical of the class claims and that a class action was a superior vehicle for adjudicating the claims. The defendant filed an objection to treating the plaintiff's claim as a class action, to which the plaintiff responded with a memorandum in support of class certification. Although the plaintiff had propounded discovery to the defendant when he submitted his memorandum of law, he had not yet received any responses. Based upon these pleadings, the trial court denied class

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certification, ruling that the plaintiff failed to establish commonality and typicality. The court concluded that the plaintiff failed to establish commonality because he "failed to substantiate this claim with any evidence," including evidence "that the defendant engaged in routinized procedures and practices that left his former tenants without [proper] accounting for their security deposits" and failed to "identify what the defendant's [alleged] standardized conduct entailed." The court concluded that the plaintiff failed to establish typicality because he did not present "any evidence to show that his claims arose from a certain practice or course of conduct of the defendant that would . . . give rise to similar claims among the other members of the proposed class." When the plaintiff moved to compel responses to discovery about his class claims, the trial court denied the motion on the ground that the court had already dismissed the class claims. The plaintiff contends that in dismissing his class claims on the ground that he failed to produce evidence to support his class allegations and then denying his motion to compel the discovery that would have enabled him to produce this evidence, the trial court erred. We agree. This is our first occasion to interpret Superior Court Rule 27-A. Because this rule is similar to Federal Rule of Civil Procedure 23, we rely upon cases interpreting the federal rule as analytic aids. See State Employees' Ass'n of N.H. v. Belknap County, 122 N.H. 614, 623-24 (1982). Although Federal Rule of Civil Procedure 23 (before it was amended in 2003), like Superior Court Rule 27-A, requires that class certification be decided "as early as practicable," most federal circuit courts of appeal agree that this "does not mean that [a] plaintiff must rest on his pleadings." Thomas v. Sheahan, 370 F. Supp. 2d 704, 714 (N.D. Ill. 2005); see In re Initial Public Offering Securities Lit., 471 F.3d 24, 38 (2d Cir. 2006) (citing cases). Under Federal Rule of Civil Procedure 23, trial courts "must conduct a rigorous analysis of the prerequisites established by [the] Rule . . . before certifying a class." Smilow v. Southwestern Bell Mobile Systems, Inc., 323 F.3d 32, 38 (1st Cir. 2003); General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 161 (1982). Such a "rigorous analysis" ordinarily involves looking beyond the allegations of the plaintiff's complaint. See In re Initial Public Offering Securities Lit., 471 F.3d at 38, 41. Therefore, most federal circuit courts of appeal have ruled that when deciding a motion for class certification, the trial court does not, as with a motion to dismiss, accept all of the plaintiff's allegations as true. See id. at 38 (citing cases); see also Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 675 (7th Cir.), cert. denied, 534 U.S. 951 (2001). But see J.B. ex rel. Hart v. Valdez, 186 F.3d 1280, 1290 n.7 (10th Cir. 1999). As the Seventh Circuit has explained:

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The proposition that a [trial] judge must accept all of the complaint's allegations when deciding whether to certify a class cannot be found in Rule 23 and has nothing to recommend it. The reason why judges accept a complaint's factual allegations when ruling on motions to dismiss under [Federal] Rule [of Civil Procedure] 12(b)(6) is that a motion to dismiss tests the legal sufficiency of a pleading. Its factual sufficiency will be tested later
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