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THE SUPREME COURT OF NEW HAMPSHIRE
___________________________
Hillsborough-northern judicial district
No. 97-416
GEORGE TSIATSIOS & a.
v.
JANICE TSIATSIOS
December 13, 1999
Douglas, Robinson, Leonard & Garvey, P.C, of Concord (Charles G. Douglas, III on the brief and orally), for the plaintiffs.
McLaughlin, Hemeon & Lahey, P.A., of Laconia (Matthew J. Lahey on the brief and orally), for the defendant.
THAYER, J. The defendant, Janice Tsiatsios, appeals from four separate orders of the Superior Court (Groff, J.) resulting in a finding of a fraudulent transfer of real estate. We affirm.
The underlying facts are fully set forth in Tsiatsios v. Tsiatsios, 140 N.H. 173, 663 A.2d 1335 (1995). In 1961 and later years, Paul Tsiatsios promised his children, George, Charles, Paula (the plaintiffs), and John that if they worked without compensation on his farm and at his motel, he would bequeath those properties to them upon his death. The children promised to do the work, and they fulfilled this promise during the ensuing years. Paul Tsiatsios never provided his children with monetary compensation for their work on the farm or at the motel.
In 1982, the defendant began working as a nurse to Tina Tsiatsios, Paul's wife, who was terminally ill. Upon Tina's death, the defendant worked as Paul's housekeeper. Paul and the defendant became romantically involved. The defendant divorced her husband, and Paul executed a will bequeathing her a car and $5000, with the remainder of his estate to go to his children. The defendant married Paul in 1989. In February 1990, Paul executed a new will which named the defendant as executrix of his estate and directed her to sell the farm and divide the proceeds of the sale among his children. The children were not advised of the existence or the terms of this will. In March 1990, Paul conveyed the motel to himself and the defendant as joint tenants with rights of survivorship. Paul Tsiatsios died on December 10, 1990. Title to the motel vested in the defendant as survivor.
In 1991, Paul's children brought an action against Janice Tsiatsios as executrix of Paul Tsiatsios' estate (the contract action). The children sought damages for breach of contract, quantum meruit, and specific performance of their father's promise to bequeath the farm and the motel. On March 15, 1994, a jury found "by clear and convincing evidence that there was an oral promise by Paul Tsiatsios to leave the family farm in Hooksett and the Beachcomber Motel in Hampton to his children in his will in return for their uncompensated work" and that "more likely than not, the children of Paul Tsiatsios performed their part of the bargain to provide uncompensated work." Verdicts were returned on behalf of three of the children for $106,000, $95,000, and $49,000. The court ordered the defendant to convey the farm to the children, and she did so. The verdict and decree were affirmed by this court in Tsiatsios, 140 N.H. at 174, 663 A.2d at 1336.
On March 8, 1994, the plaintiffs brought this petition to set aside the transfer of the motel as fraudulent under RSA chapter 545-A. The fraudulent transfer action was brought against Janice Tsiatsios as a defendant in her individual capacity. On March 10, 1994, just after the trial for the contract action had begun, the plaintiffs filed two motions. The plaintiffs moved to add Janice Tsiatsios individually in the contract action and also to join the fraudulent transfer action with the contract action. These motions were denied as untimely.
In the fraudulent transfer action, the Superior Court (Groff, J.) granted the plaintiffs' motion to collaterally estop the defendant from relitigating the existence of an enforceable oral promise by Paul Tsiatsios to convey the motel property to the plaintiffs. The court also denied the defendant's motions to dismiss for failure to name a necessary party and for lack of subject matter jurisdiction, naming the wrong defendant and/or impossibility of relief. Finally, the court granted the plaintiffs' petition to set aside the transfer of the motel as fraudulent under RSA chapter 545-A.
On appeal, the defendant argues that the trial court erred in: (1) giving the preclusive effect of collateral estoppel to the jury's finding in the contract case that Paul Tsiatsios made an enforceable oral promise to bequeath the motel to his children; (2) denying her two motions to dismiss; and (3) setting aside the fraudulent transfer of the motel.
I. Collateral Estoppel
"[T]he doctrine of collateral estoppel bars a party to a prior action, or a person in privity with such a party, from relitigating any issue or fact actually litigated and determined in the prior action." Daigle v. City of Portsmouth, 129 N.H. 561, 570, 534 A.2d 689, 693 (1987). In order for the doctrine of collateral estoppel to apply in a particular proceeding, the following conditions must be satisfied:
the issue subject to estoppel must be identical in each action, the first action must have resolved the issue finally on the merits, and the party to be estopped must have appeared in the first action, or have been in privity with someone who did so. Further, the party to be estopped must have had a full and fair opportunity to litigate the issue, and the finding must have been essential to the first judgment.
Bruzga's Case, 142 N.H. 743, 745, 712 A.2d 1078, 1079 (1998) (quotation omitted). We hold that the trial court did not err in applying collateral estoppel to this case.
Janice Tsiatsios argues that she was neither a party nor in privity with a party in the prior breach of contract action. "[A] finding of privity between a party and a non-party is tantamount to `virtual representation' and `substantial identity.'" Day v. N.H. Retirement System, 138 N.H. 120, 122-23, 635 A.2d 493, 495 (1993). This implies "not a formal but a functional relationship in which, at a minimum, the interests of the non-party were in fact represented and protected in the prior litigation." Id. at 123, 635 A.2d at 495 (quotation omitted). "[A] finding of privity is simply a conclusion that something in the relationship of party and non-party justifies holding the latter to the result reached in litigation in which only the former is named." Daigle, 129 N.H. at 572, 534 A.2d at 694. Privity may exist between a beneficiary and an executor:
A person who is not a party to an action but who is represented by a party is bound by and entitled to the benefits of a judgment as though he were a party. A person is represented by a party who is . . . .
. . . .
(c) The executor, administrator, guardian, conservator, or similar fiduciary manager of an interest of which the person is a beneficiary.
Restatement (Second) of Judgments