Halifax-American Energy Company, LLC & a. , 170 N.H. 569 ( 2018 )

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THE SUPREME COURT OF NEW HAMPSHIRE
___________________________
Rockingham
No. 2016-0241
HALIFAX-AMERICAN ENERGY COMPANY, LLC & a.
v.
PROVIDER POWER, LLC & a.
Argued: June 1, 2017
Opinion Issued: February 9, 2018
Hinckley, Allen & Snyder, LLP, of Concord (Christopher H.M. Carter and
Daniel M. Deschenes on the brief, and Mr. Carter orally), for the plaintiffs.
Bernstein, Shur, Sawyer & Nelson, P.A., of Manchester (Andru H.
Volinsky and Talesha L. Saint-Marc on the brief, and Mr. Volinsky orally), for
the defendants.
BASSETT, J. The plaintiffs are four companies with common owners and
operators: Halifax-American Energy Company, LLC; PNE Energy Supply, LLC
(PNE); Resident Power Natural Gas & Electric Solutions, LLC (Resident Power);
and Freedom Logistics, LLC d/b/a Freedom Energy Logistics, LLC. Collectively,
they are referred to as the “Freedom Companies.” The defendants are three
companies and their owners: Provider Power, LLC; Electricity N.H., LLC d/b/a
E.N.H. Power; Electricity Maine, LLC; Emile Clavet; and Kevin Dean.
Collectively, they are referred to as the “Provider Power Companies.”
The Freedom Companies and the Provider Power Companies are engaged
in the same business — arranging for the supply of electricity and natural gas
to commercial and residential customers in New Hampshire and other New
England states. The parties’ current dispute concerns a Freedom Company
employee whom the defendants hired, without the plaintiffs’ knowledge,
allegedly to misappropriate the plaintiffs’ confidential and proprietary
information. According to the plaintiffs, the defendants used the information
obtained from the employee to harm the plaintiffs’ business by improperly
interfering with their relationships with their customers and the employee.
After a seven-day jury trial in Superior Court (Anderson, J.), the jury
returned verdicts in the plaintiffs’ favor on many of their claims, including
those for tortious interference with customer contracts, tortious interference
with economic relations with customers, tortious interference with the
employee’s contract, and misappropriation of trade secrets. The jury awarded
compensatory damages to the plaintiffs on each of these claims, except the
misappropriation of trade secrets claim, and included in the damages award
$93,000 for the attorney’s fees incurred by the plaintiffs in prior litigation
against the employee for his wrongful conduct. The jury’s total damages
award, including the attorney’s fees, was $556,208. Subsequently, the trial
court awarded attorney’s fees to the plaintiffs under the New Hampshire
Uniform Trade Secrets Act (NHUTSA), see RSA ch. 350-B (2009).
On appeal, the defendants challenge: (1) the jury’s verdicts on the
plaintiffs’ claims for tortious interference with customer contracts and the
employee’s contract; (2) the jury’s award of damages for tortious interference
with customer contracts and tortious interference with economic relations, and
its inclusion in that award of the attorney’s fees incurred in the plaintiffs’ prior
litigation against the employee; and (3) the trial court’s award of attorney’s fees
to the plaintiffs under the NHUTSA. We affirm.
Before addressing the defendants’ numerous appellate arguments, we
highlight the following principles. First, we decline to review any argument
that the defendants did not raise before the trial court. See State v. Blackmer,
149 N.H. 47, 48 (2003). “The general rule in this jurisdiction is that a
contemporaneous and specific objection is required to preserve an issue for
appellate review.” Id. (quotation omitted). “This rule, which is based on
common sense and judicial economy, recognizes that trial forums should have
an opportunity to rule on issues and to correct errors before they are presented
to the appellate court.” Id. (quotation omitted). As the appealing parties, it is
the defendants’ burden to provide this court with a record demonstrating that
they raised their appeal arguments before the trial court. See Bean v. Red Oak
Prop. Mgmt., 151 N.H. 248, 250 (2004). Moreover, although the plain error
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rule allows us to consider errors not brought to the attention of the trial court,
see Sup. Ct. R. 16-A, in this case, we exercise our discretion to consider plain
error only when the defendants specifically argue under that rule.
Second, we confine our review to only those issues that the defendants
have fully briefed. See Blackmer, 149 N.H. at 49. “[I]n the realm of appellate
review, a mere laundry list of complaints regarding adverse rulings by the trial
court, without developed legal argument, is insufficient to warrant judicial
review.” Id. (quotation omitted).
Third, we will not review any issue that the defendants address in their
brief, but did not raise in their notice of appeal. See id. An argument that is
not raised in a party’s notice of appeal is not preserved for appellate review. Id.
For example, although the defendants purport to challenge the jury’s verdict on
the plaintiffs’ misappropriation of trade secrets claim, the argument is not
preserved for our review because the defendants did not include that issue in
their notice of appeal.
Similarly, we will not address any issue that the defendants raised in
their notice of appeal, but did not brief. The defendants raise 27 questions in
their notice of appeal, but have briefed far fewer. Any issue that the
defendants raised in their notice of appeal, but did not brief, is deemed waived.
See In re Estate of King, 149 N.H. 226, 230 (2003).
With these principles in mind, we address only a fraction of the
defendants’ arguments. We do not address other arguments either because
they were not preserved, were not sufficiently developed for appellate review,
were not raised in the defendants’ notice of appeal, or were raised in the notice
of appeal but not briefed.
I. The Defendants’ Challenges to the Jury Verdicts
A. Tortious Interference with Customer Contracts
1. PNE
After trial, the defendants moved for judgment notwithstanding the
verdict (JNOV) as to the plaintiffs’ tortious interference with certain of PNE’s
customer contracts on the ground that the plaintiffs had failed to prove that
those contracts remained valid after February 2013. According to the
defendants, in February 2013, PNE “failed financially because it was unable to
maintain its required financial sureties with ISO [New England],” which the
defendants assert, manages the “wholesale power transmission market,
sometimes referred to as ‘the grid.’” The defendants contend that, as a result,
ISO New England “suspended PNE’s participation in the power market and
directed the host utility,” Public Service of New Hampshire (PSNH), “to assume
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responsibility” for the electricity used by PNE’s customers by February 20,
2013. The defendants state that, on February 20, “all of PNE’s customers were
transferred to PSNH for their electricity needs, and PNE stopped buying
electricity and re-selling the electricity to its customers.” The defendants
concede that “PNE was released from its suspension[ ] . . . in late March 2013,”
but contend that PNE “was not able to immediately recover financially and was
not back up and running until June.” The defendants argued that they were
entitled to JNOV with regard to PNE’s contracts with the customers that
transferred to PSNH because the plaintiffs failed to prove that PNE maintained
contracts with those customers after it was suspended.
The trial court denied the defendants’ motion, finding that “there was
sufficient evidence for the jury to find that the [challenged] contracts continued
even after the customers were transferred to PSNH.” For instance, the trial
court noted, the employee “testified that, on behalf of [the] [p]laintiffs, he would
maintain the relationships with customers even after they were transferred to a
utility during periods of market volatility.” The trial court stated that the
employee also testified that, as part of the service that the plaintiffs provided to
customers, the employee “would keep the customers abreast of market
conditions and forecasts, so that when rates went down customers could
return to [the] [p]laintiffs for their service.” According to the employee, “this
service was part of the contractual relationship.” The trial court also
determined that there was sufficient evidence from which the jury could have
found that the plaintiffs and their customers “contemplated this sort of short-
term transfer.” The defendants argue that the trial court erred in so ruling.
A motion for JNOV relates to the sufficiency of the evidence and presents
a question of law. Murray v. McNamara, 167 N.H. 474, 478 (2015). A party is
entitled to JNOV only when the sole reasonable inference that may be drawn
from the evidence, which must be viewed in the light most favorable to the non-
moving party, is so overwhelmingly in favor of the moving party that no
contrary verdict could stand. Id. at 478-79. The court cannot weigh the
evidence or inquire into the credibility of the witnesses, and if the evidence
adduced at trial is conflicting, or if several reasonable inferences may be
drawn, the motion should be denied. Id. at 479.
Although in the past we have stated that we will not overturn the trial
court’s decision absent an unsustainable exercise of discretion, id., in fact,
because a motion for JNOV presents a question of law, our review is de novo,
see Ellis v. Candia Trailers & Snow Equip., 164 N.H. 457, 463 (2012)
(explaining that “[w]e review questions of law de novo”).
Based upon our review of the record, we cannot conclude that the trial
court erred by denying the defendants’ motion for JNOV. As the trial court
aptly observed, the evidence adduced at trial was conflicting, and while the
defendants’ evidence “may have cast doubt” on the plaintiffs’ evidence, it “did
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not prevent a reasonable jury” from finding that “the contractual relationships
continued after the suspension.”
2. Resident Power
The defendants argue that they were entitled to JNOV with regard to
certain of Resident Power’s customers because, although Resident Power was
not suspended, it “suffered significant reputational damage because it was so
closely linked to PNE, which was suspended.” Moreover, the defendants assert,
Resident Power’s contracts with certain customers provided for automatic
termination of the contract if a party ceases conducting business “in the
ordinary sense,” and, following PNE’s suspension, Resident Power ceased
conducting business “in the ordinary sense.” According to the defendants,
“Resident Power effectively ceas[ed] to conduct business in the ordinary sense”
because it “could not transfer the customers placed with PNE to a new supplier
without the customers’ permission or without facing slamming allegations.”
In denying the defendants’ motion for JNOV, the trial court determined
that the phrase “to conduct business in the ordinary sense” is ambiguous “as it
could be reasonably understood to mean either a significant disruption in
business, however fleeting in length, or the permanent shutdown of
operations.” (Quotation omitted.) The trial court concluded that, given the
provision’s ambiguity, “the jury was entitled to decide [its] meaning and
application.”
Because the defendants do not argue otherwise, we assume without
deciding that the meaning of the provision was a fact question for the jury to
decide. Viewing the evidence in the light most favorable to the plaintiffs, we
cannot say that the sole reasonable inference is that Resident Power ceased to
“conduct business in the ordinary sense” when PNE was suspended. See
Murray, 167 N.H. at 478-79. Accordingly, we conclude that the trial court’s
denial of the defendants’ motion for JNOV on this ground was not erroneous.
B. Tortious Interference with the Employee’s Contract
The defendants assert that the trial court erred when it declined their
request for “an instruction that required the jury to find” that the non-compete
provision in the employee’s contract with the plaintiffs “was backed by
consideration.” The defendants argue that, without such an instruction, “[t]he
jury was conclusively required to presume the validity of [the employee’s] non-
compete agreement.” They further argue that, in fact, the non-compete
provision lacked consideration and, therefore, that “the trial court’s refusal to
instruct the jury as requested was error because the jury could have been
misled into basing its verdict on a misperception of the law, that is, that there
can be interference with an invalid contract.” (Quotations omitted.)
5
The purpose of jury instructions is to identify issues of material fact, and
to explain to the jury, in clear and intelligible language, the proper standards of
law by which it is to resolve them. N.H. Ball Bearings v. Jackson, 158 N.H.
421, 433-34 (2009). The scope and wording of jury instructions, however, are
within the sound discretion of the trial judge and are evaluated as a reasonable
juror would have interpreted them. Id. at 434. A trial court need not use the
exact words of any party’s jury instruction request. Peterson v. Gray, 137 N.H.
374, 377 (1993). A jury charge is sufficient as a matter of law if it fairly
presents the case to the jury such that no injustice is done to the legal rights of
the parties. Jackson, 158 N.H. at 434. In a civil case, we review jury
instructions in context. Id. We will reverse if the charge, taken in its entirety,
fails to explain adequately the law applicable to the case in such a way that the
jury could have been misled. Id.
We disagree with the defendants’ assertion that the jury instructions did
not require the jury to find that the employee’s non-compete agreement was
supported by consideration. Viewing the instructions in context and as a
whole, we conclude that they adequately explained to the jury that for the jury
to find that the employee’s non-compete agreement existed, the jury had to find
that it was supported by consideration.
When the court instructed the jury on the plaintiffs’ tortious interference
with customer contracts claim, it told the jury:
Onto the second claim, intentional interference with
customer contract. Plaintiffs alleged the Defendants knew that the
Plaintiffs entered into contractual agreements with certain
customers and intentionally and improperly induced these
customers to breach those existing contracts and enter into
agreements with the Defendants.
In order to prevail on this claim the Plaintiffs must prove by
a balance of the probabilities as I’ve explained that term too [sic] in
these four elements; one, one or more of the Plaintiffs had a
contract with a customer; two, the Defendants knew of that
contractual relationship; three, the Defendants intentionally,
improperly, wrongfully induced the third party to breach its
agreement with the Plaintiffs[;] and four, the Plaintiffs were
damaged by the interference.
Because the Plaintiffs allege intentional interference of
customer contracts as to all of the Defendants, they must establish
these four elements as to each and every Defendant. They must
also show which of the Plaintiffs was harmed by the conduct of any
Defendant. I’ll now explain these elements to you.
6
The first element that the Plaintiffs must prove is that they
had an existing contract. To prove the existence of a contract the
Plaintiffs must prove the following four elements of a binding
contract[:] one, there was an offer that the Plaintiffs were legally
entitled to make; two, there was an acceptance of the offer; three, it
was accurate [sic] consideration[;] and four, there was a meeting of
the minds as to the essential terms of the contract.
The Plaintiffs are not required to prove that the contract is
enforceable. In other words, a voidable contract is still a contract
on which Plaintiffs may base a claim. In evaluating whether the
Plaintiffs had a contractual relationship with certain customers,
you must determine that the contracts existed at the time the
Defendants elected to interfere.
(Emphases added.)
When the court instructed the jury as to the claim for tortious
interference with the employee’s contract, the court specifically referenced its
prior instruction:
I’ll now move onto the third claim, intentional interference
with the [employee’s] contracts.
Plaintiffs allege that one or more of the Defendants knew
that one or more of the Plaintiffs entered into . . . contractual
agreements with [the employee], which required [him] to preserve
the confidentiality of Plaintiffs[’] confidential proprietary
information. In order to prevail in this claim, the Plaintiffs must
prove by a balance of the probability that one[,] one or more of the
Plaintiffs had a contract with [the employee]; two, the Defendants
knew of that contractual relationship; three, the Defendants
intentionally, improperly, wrongfully and in bad faith induced [the
employee] to breach his agreement with the Plaintiffs[;] and four,
the Plaintiffs were damaged by the interference.
As [with] Claim 2, you must determine whether any of the
Plaintiffs entered into a valid or voidable contract with [the
employee]. Defendants argue that no contract was in force at the
time they were alleged to have engaged [the employee], because the
Plaintiffs[’] contract with [the employee] terminated when one of the
parties ceases to conduct business in the ordinary sense.
You may consider whether the Plaintiffs[’] suspension from
operations sufficed to trigger this provision and terminate the
agreement. You must then determine based on the law I previously
7
described to you whether any of the Defendants intentionally and
improperly induced [the employee] to breach his contract with the
Plaintiffs.
And as with Claim 2, the Plaintiffs must prove that they
suffered damages and that the Defendants[’] interference was a
substantial factor in bringing about their harm.
(Emphasis added.) The court also instructed the jury that, as with the tortious
interference with customer contracts claim, for the tortious interference with
the employee’s contract claim, “[t]he Plaintiffs are not required to prove that the
contract is enforceable; in other words, a voidable contract is still a contract on
which Plaintiffs may base a claim.” In its written instructions, the court
explained that, to prove the existence of a contract, the plaintiffs had to
establish that the contract was supported by “adequate consideration.”
Reading the jury instructions as a whole, we conclude that the trial court
correctly instructed the jury that “[t]o prove the existence of a contract,”
including the employee’s contract, the plaintiffs had to prove that the contract
was supported by adequate consideration.
To the extent that the defendants argue that they were entitled to JNOV
because the plaintiffs failed to prove that the non-compete agreement was
supported by consideration, we disagree. The trial court determined that the
plaintiffs’ continuation of the employee’s at-will employment constituted
consideration for the covenant not to compete. See Smith, Batchelder & Rugg
v. Foster, 119 N.H. 679, 683 (1979). The trial court also found that the
agreement was supported by consideration because it allowed the employee to
use company e-mail and to receive commissions. Although the defendants
asserted that the continuation of the relationship did not furnish consideration
because the employee obtained no additional benefit by continuing the
relationship, the trial court disagreed. The court observed that the defendants’
argument was “predicated on their assertion that [the employee] had already
earned the commissions on the customers he signed.”
The trial court determined that, in fact, the original agreement between
the plaintiffs and the employee was unclear as to when the employee earned
commissions. In light of the ambiguity in the original agreement and “the
uncertain business environment in February 2013,” the court determined that
the employee and the plaintiffs could have had a good faith dispute over his
entitlement to commissions. The non-compete agreement, the court ruled,
resolved that good faith dispute, and the resolution of such a dispute furnished
adequate consideration.
We find no error in the trial court’s analysis. See Foster, 119 N.H. at 683
(explaining that “[c]ontinued employment after signing an employment contract
8
constitutes consideration for a covenant not to compete therein”). On appeal,
the defendants do not address the trial court’s analysis, and, therefore, they
have failed to persuade us that the trial court erred when it denied their motion
for JNOV as to whether the employee’s non-compete agreement was supported
by consideration.
II. The Defendants’ Challenges to the Jury’s Damages Award
A. Duplicate Recovery
The defendants contend that the trial court erred by failing to instruct
the jury that it could not award damages to the plaintiffs for both tortious
interference with customer contracts and tortious interference with economic
relations because those claims were alternative theories of recovery. The
defendants concede that they did not request that instruction, but assert that
because “the error did not arise until the trial court accepted . . . verdicts” on
both claims, their motion for JNOV properly preserved their argument for our
review.
“A contemporaneous objection is necessary to preserve a jury instruction
issue for appellate review.” Clark & Lavey Benefits Solutions v. Educ. Dev.
Ctr., 157 N.H. 220, 223 (2008) (quotation omitted). Absent a contemporaneous
objection, the trial court is not afforded the opportunity to correct, in a timely
fashion, an error it may have made. Id. “This long-standing requirement is
grounded in common sense and judicial economy, and applies equally to civil
and criminal matters.” Id. (quotation omitted). Generally speaking, “[a]ll
objections to a jury charge are waived unless taken on the record before the
jury retires.” Snelling v. City of Claremont, 155 N.H. 674, 688 (2007); see
Transmedia Restaurant Co. v. Devereaux, 149 N.H. 454, 458-59 (2003)
(holding that challenge to trial court’s failure to provide a jury instruction was
not preserved by post-trial motions). Thus, the defendants’ motion for JNOV
failed to preserve their jury instruction argument.
Alternatively, the defendants assert their jury instruction argument
under our plain error rule. See Sup. Ct. R. 16-A. The plain error rule allows
us to consider errors not brought to the attention of the trial court. Clark &
Lavey Benefits Solutions, 157 N.H. at 225. However, the rule should be used
sparingly, its use limited to those circumstances in which a miscarriage of
justice would otherwise result. Id. “For us to find error under the rule: (1)
there must be an error; (2) the error must be plain; (3) the error must affect
substantial rights; and (4) the error must seriously affect the fairness, integrity
or public reputation of judicial proceedings.” Id. (quotation omitted). Because
the plaintiffs do not argue otherwise, we assume without deciding that plain
error review of the trial court’s jury instruction is available. See id.
9
We conclude that the trial court did not err. Under New Hampshire law,
“a plaintiff cannot claim multiple recoveries for the same loss even though
different theories of liability are alleged.” Snelling, 155 N.H. at 690. When a
plaintiff’s theories of recovery “arise from the same set of operative facts,” the
plaintiff “is entitled to only a single recovery.” Id. at 691.
In the instant case, the trial court instructed the jury that the plaintiffs
could not “recover more than once for the same loss even if they allege different
theories of legal fault on the part of the [d]efendants.” The trial court further
instructed the jury that “if the [p]laintiffs’ claims arise out of a common core of
facts[,] only a single recovery will be made, even if you find for the [p]laintiffs on
more than one of their claims.” Viewing the jury instructions as a whole, we
cannot conclude that it fails to explain adequately New Hampshire’s law about
double recovery. See Jackson, 158 N.H. at 434. Thus, we hold that the
defendants cannot prevail on their jury instruction claim under our plain error
rule.
To the extent that the defendants argue that the jury, in fact, awarded
the plaintiffs a double recovery by awarding damages on both the tortious
interference with customer contracts claim and the tortious interference with
economic relations claim, we disagree. We must presume that the jury
followed the trial court’s instructions, which precluded the jury from allowing
the plaintiffs to “recover more than once for the same loss.” See Nilsson v.
Bierman, 150 N.H. 393, 403 (2003).
B. Damages for Tortious Interference with Customer Contracts and
Tortious Interference with Economic Relations
The defendants moved to set aside the jury’s award of damages on the
tortious interference with customer contracts and tortious interference with
economic relations claims. The trial court denied the motion, ruling that the
jury’s award was neither conclusively against the weight of the evidence nor
wholly unreasonable. The court observed that the plaintiffs proved their
damages largely through the testimony of Bart Fromuth, the son of the owner
of the Freedom Companies. Fromuth estimated damages based upon each
customer’s average electricity usage, the plaintiffs’ commission or marginal
profit per kilowatt hour, and the average retention length for the customers.
From those variables, Fromuth calculated what each lost customer would have
spent on electricity, and, consequently, what the plaintiffs would have earned,
over the duration of the contract or economic relationship.
The trial court acknowledged that, as the defendants asserted, Fromuth’s
calculations were based upon the following assumptions: Fromuth assumed
“that the customer’s usage going forward would have been consistent with its
average usage; that each lost customer would have stayed with [the] [p]laintiffs
as long as the estimated average; and that market conditions like those in
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February 2013 would not have occurred and caused [the] [p]laintiffs to lose
customers.”
The trial court determined that “the jury could credit Fromuth’s
testimony regarding damages despite the assumptions underlying his
calculations” because his assumptions were “reasonable.” The court explained:
Where variables could be determined by reference to the particular
customer’s information, they were[,] . . . and where they could not,
Fromuth used reasonable assumptions based on historical data
[the] [p]laintiffs possessed. Since the question of how long lost
customers would have stayed if not for [the] [d]efendants’
interference was hypothetical, such assumptions were necessary in
order to come to a reasonable assessment of damages.
The trial court observed that, as the defendants contended, Fromuth’s
methodology did not account for the reputational harm that the plaintiffs
suffered when PNE was suspended or the possibility that customers would
have terminated their contracts or economic relationships with the plaintiffs
prematurely. Those considerations, the court ruled, “could bear on the jury’s
assessment of Fromuth’s testimony, but . . . are not so weighty that they
should have compelled the jury to reject [it].”
The court also declined to find the award “unreasonable simply because
[it] did not exactly correspond with [the] [p]laintiffs’ requested damages.” The
trial court explained: “The jury’s task was not to blindly accept or reject [the]
[p]laintiffs’ request.” Rather, it was “to determine based on the evidence
presented to [it] the damages to which [the] [p]laintiffs were entitled.”
“New Hampshire law does not require that damages be calculated with
mathematical certainty, and the method used to compute them need not be
more than an approximation.” Blouin v. Sanborn, 155 N.H. 704, 707 (2007).
Direct review of a damages award is the responsibility of the trial judge, who
may disturb a verdict as excessive (or inadequate) if its amount is conclusively
against the weight of the evidence. Id. The court may also order remittitur if
the verdict is “manifestly exorbitant.” Id. (quotation omitted). The amount of a
verdict is conclusively against the weight of the evidence only if no reasonable
jury could have reached it. Id. Once the trial court has reviewed the amount
of the verdict under this standard, we will not disturb its finding unless no
reasonable person could have made it. Id. Our task upon review is not to
attempt to ascertain the one and only correct verdict. Id.
On appeal, the defendants repeat the arguments that they made in the
trial court. We do not find those arguments sufficient grounds for us to disturb
the trial court’s decision. See id.
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C. Attorney’s Fees as Damages
Before the trial court instructed the jury, the parties discussed whether
the plaintiffs could recover as damages the attorney’s fees they incurred when
they sued the employee for his wrongful conduct. The defendants contended
that such fees were not recoverable because there was insufficient evidence
that they were the “natural necessary consequence” of the defendants’ allegedly
tortious conduct. See Symetra Life Ins. Co. v. Rapid Settlements, Ltd., 775
F.3d 242, 251 (5th Cir. 2014) (explaining that, under Texas law, attorney’s fees
incurred in prior litigation may be recovered as damages in a later suit based
upon tortious interference with contract “where the natural and proximate . . .
consequences of prior wrongful acts had been to involve a plaintiff in litigation’’
(quotation and ellipsis omitted)); Hubbard v. Gould, 74 N.H. 25, 28 (1906) (“If it
is established that the defendants and not the plaintiff are responsible for the
injury to [the third party’s] horse, the expenses reasonably incurred in good
faith by [the plaintiff] in litigating the questions raised by [the third party’s]
claim are part of his damages . . . .”).
The trial court disagreed and instructed the jury as follows:
Plaintiffs request damages for the attorney[’s] fees which they
incurred in their prior litigation against [the employee]. In order
for Plaintiffs to be entitled to such an award, they must prove
that[:] one, they incurred reasonable attorney[’s] fees in the
prosecution of the action against [the employee]; two, the litigation
must have been against [the employee] and not against any of the
Defendants in this case[;] and three, they became involved in such
litigation because of some tort[i]ous act of the Defendants.
Therefore, if you find the Plaintiffs were forced to institute
the litigation against [the employee] because of the Defendants[’]
tort[i]ous conduct you may award Plaintiffs the fees incurred in
that prior litigation.
If you find the Defendants committed no tort[i]ous conduct
or the Defendants[’] tort[i]ous conduct did not force Plaintiffs to
institute the litigation against [the employee], you should not
award Plaintiffs their requested fees.
Consistent with that instruction, the jury’s damage award included $93,000 in
attorney’s fees the plaintiffs incurred in their prior lawsuit against the
employee.
Thereafter, the defendants moved for JNOV arguing, first, that
the evidence failed to establish that the litigation against the employee was the
“natural consequence” of the defendants’ allegedly tortious conduct. The trial
12
court ruled that “there was sufficient evidence to show that [the] [d]efendants’
misconduct forced [the] [p]laintiffs to institute the suit against [the employee].”
Specifically, the trial court observed that the plaintiffs presented evidence that
they sued the employee so as to enforce his contractual promises. The trial
court also observed that the plaintiffs presented evidence that the defendants
caused the employee to breach his agreements with the plaintiffs: the
employee testified that the owners of Provider Power Companies encouraged
him to take the plaintiffs’ customer information and sales leads to use for the
defendants’ benefit. Although the trial court acknowledged that, as the
defendants contended, the employee “was the primary perpetrator of the torts,”
the court ruled that this fact “did not prevent the jury from assessing fees
against [the] [d]efendants” given that the jury found that they conspired with
the employee “to engage in the tortious misconduct.”
In their motion for JNOV, the defendants also argued, for the first time,
that the plaintiffs failed to prove that their attorney’s fees were reasonable. The
trial court ruled that the argument was waived because the defendants did not
raise it before the jury deliberated. The trial court observed that the
defendants did not include this argument in their motions for a directed verdict
or in their objections to the jury instructions.
On appeal, the defendants reiterate their trial court assertion that the
plaintiffs are not entitled to recover the fees as damages in the instant action
because the evidence failed to demonstrate that the lawsuit against the
employee “was . . . the natural consequence of [the] [d]efendants’ purportedly
tortious conduct.” Viewing the evidence, including that upon which the trial
court relied, in the light most favorable to the plaintiffs, we cannot say that the
sole reasonable inference is that the lawsuit was not the natural consequence
of the defendants’ purportedly tortious conduct. See Murray, 167 N.H. at 478-
79. Accordingly, we conclude that the trial court’s denial of the defendants’
motion for JNOV on this ground was not erroneous.
The defendants next assert that the trial court erred when it instructed
the jury that it could include the previously incurred attorney’s fees in the
damages award. The defendants contend that the trial court’s instruction is
error because, according to the defendants, New Hampshire has not adopted
the “tort of another” doctrine as an exception to the general rule that each
party is responsible for his or her own attorney’s fees. See Shelton v. Tamposi,
164 N.H. 490, 501 (2013). Under that doctrine, “[o]ne who through the tort of
another has been required to act in the protection of his interests by bringing
or defending an action against a third person is entitled to recover reasonable
compensation for . . . attorney fees . . . thereby suffered or incurred in the
earlier action.” Restatement (Second) of Torts § 914(2), at 492 (1979).
However, as the plaintiffs correctly observe, the defendants have not
preserved this argument for our review. The record demonstrates that the
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defendants did not argue before the trial court that the court’s proposed jury
instruction was inconsistent with New Hampshire law. Thus, we decline to
consider that argument on appeal.
The defendants next contend that the trial court committed plain error
when it concluded that they waived their argument regarding the plaintiffs’
failure to prove that the attorney’s fees were reasonable. See Sup. Ct. R. 16-A.
We disagree that the trial court’s ruling constituted error.
“The well-established rule is that an objection to the sufficiency of
evidence is waived unless taken at a time when there may still be an
opportunity to supply the deficiency,” i.e., before the court instructs the jury.
Carlisle v. Frisbie Mem. Hosp., 152 N.H. 762, 767 (2005) (quotation omitted).
Here, as the trial court aptly noted, the defendants did not argue, prior to the
court instructing the jury, that the plaintiffs’ proof of reasonableness was
insufficient. Thus, the trial court’s determination that the defendants waived
that argument is consistent with New Hampshire law and does not constitute
error.
III. Attorney’s Fees Under the New Hampshire Uniform Trade Secrets Act
The defendants contend that the trial court erred when it awarded the
plaintiffs’ prevailing party attorney’s fees under the NHUTSA. A prevailing
party may be awarded attorney’s fees when recovery of fees is authorized by
statute, an agreement between the parties, or an established judicial exception
to the general rule that precludes recovery of such fees. In the Matter of Mason
& Mason, 164 N.H. 391, 398 (2012). We will not overturn the trial court’s
decision concerning attorney’s fees absent an unsustainable exercise of
discretion. Id. at 399. We give substantial deference to the trial court’s
decision on attorney’s fees. Id.
We review the trial court’s interpretation of the NHUTSA de novo. See
Petition of State Employees’ Assoc., 161 N.H. 476, 478 (2011). We are the final
arbiter of the intent of the legislature as expressed in the words of the statute
considered as a whole. Id. When examining the language of a statute, we
ascribe the plain and ordinary meaning to the words used. Id. We interpret a
statute in the context of the statutory scheme and not in isolation. Id. at 479.
Our goal is to apply statutes in light of the legislature’s intent in enacting them,
and in light of the policy sought to be advanced by the entire statutory scheme.
Id.
To interpret the NHUTSA, we also rely upon the official comments to the
Uniform Trade Secrets Act. See In the Matter of Ball & Ball, 168 N.H. 133, 137
(2015) (discussing interpretation of the Uniform Interstate Family Support Act).
When interpreting a uniform law, such as the NHUTSA, “the intention of the
drafters of a uniform act becomes the legislative intent upon enactment.” Id.
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(quotation omitted). In addition, we consider the interpretation of the Uniform
Trade Secrets Act by other jurisdictions. See id. “The opinions from courts in
other jurisdictions are relevant because uniform laws should be interpreted to
effect their general purpose to make uniform the laws of those states that enact
them.” Id. (quotation omitted); see RSA 350-B:8 (stating that the NHUTSA
“shall be applied and construed to effectuate its general purpose to make
uniform the law with respect to the subject [of trade secrets] among states
enacting it”).
RSA 350-B:4, III provides, “The court may award reasonable attorney’s
fees to the prevailing party when . . . [w]illful and malicious misappropriation
exists.” The pertinent official comment to the Uniform Trade Secrets Act
explains that this provision “allows a court to award reasonable attorney fees to
a prevailing party . . . as a deterrent to . . . willful and malicious
misappropriation.” Unif. Trade Secrets Act § 4 Comment (amended 1985). The
comment states that, when willful and malicious appropriation is at issue, “the
court should take into consideration the extent to which a complainant will
recover exemplary damages in determining whether additional attorney’s fees
should be awarded” and the court should rely upon patent law “to determine
whether attorney’s fees should be awarded even if there is a jury.” Id.; see, e.g.,
Clearone Communications, Inc. v. Biamp Systems, 653 F.3d 1163, 1186 (10th
Cir. 2011) (concluding that interpretation of patent law fee-shifting provision
“provides persuasive guidance” in interpreting the attorney’s fee provision of
Utah’s Uniform Trade Secrets Act).
The Patent Act authorizes an award of attorney’s fees to the prevailing
party “in exceptional cases.” 35 U.S.C. § 285 (2012); see Octane Fitness v.
ICON Health & Fitness, 134 S. Ct. 1749, 1752 (2014). A case is considered to
be “exceptional” when it “stands out from others with respect to the
substantive strength of a party’s litigating position (considering both the
governing law and the facts of the case) or the unreasonable manner in which
the case was litigated.” Octane Fitness, 134 S. Ct. at 1756. To determine
whether a case is “exceptional,” the court applies a totality of the
circumstances test. Id. One of the factors that may bear upon this
determination is “the need in particular circumstances to advance
considerations of compensation and deterrence.” Id. at 1756 & n.6 (quotation
omitted).
Here, the trial court used a totality of the circumstances test to
determine whether to award attorney’s fees to the plaintiffs under the NHUTSA.
The court considered the fact that the jury did not award the plaintiffs damages
for their misappropriation claim, but concluded that the extent of the
defendants’ malice and willfulness outweighed that fact. The court also
observed that awarding fees in this case furthered the goals of the NHUTSA to
maintain standards of commercial ethics and deter intentional
misappropriation of trade secrets. As the court explained:
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The jury could have reasonably found that [the] [d]efendants
exploited [the employee’s] position to siphon confidential customer
information and sales leads in order to secure a competitive
advantage in the same market in which [the] [p]laintiffs operated.
This is not a case where the misappropriated information was put
to some use that could only indirectly harm [the] [p]laintiffs; it was
wielded in the exact manner [that the] UTSA was enacted to
discourage.
Upon consideration of the record and the trial court’s order, we conclude that
the trial court did not unsustainably exercise its discretion when it awarded
the plaintiffs their attorney’s fees under the NHUTSA.
In arguing for a contrary result, the defendants invite us, in construing
the NHUTSA, to apply case law developed under 42 U.S.C. § 1988 (2012)
(Section 1988). See Farrar v. Hobby, 506 U.S. 103, 114, 115 (1992)
(concluding that, in a Section 1988 case, there are “some circumstances” when
a prevailing party’s victory for purposes of Section 1988 is so “technical” that
the plaintiff should not recover any attorney’s fees (quotation omitted)). We
decline their invitation.
The defendants next assert that, even if the plaintiffs are entitled to fees
under the NHUTSA, the trial court was required “to apportion the attorney time
consumed in preparing and proving [the] misappropriation [claim]” from that
consumed preparing and proving the plaintiffs’ other claims. The defendants
contend that “[a]lthough a number of fundamental facts were essential” to all of
the plaintiffs’ claims, “that does not mean they all required the same research,
discovery, proof, or legal expertise.” (Quotation omitted.) The defendants
argue that the plaintiffs’ misappropriation of trade secrets claim is analytically
severable from the plaintiffs’ other claims, observing, for instance, that “the law
regarding misappropriation of trade secrets and tortious interference is not the
same.”
Under New Hampshire law, when a party prevails on some claims and
not others, and the successful and unsuccessful claims are analytically
severable, any fee award should be reduced to exclude time spent on
unsuccessful claims. Appeal of the Local Gov’t Ctr., 165 N.H. 790, 814 (2014).
The defendants imply that a different standard should apply in this case
because it involves a claim for which attorney’s fees are statutorily authorized
(misappropriation of trade secrets) and claims for which there is no such
statutory authorization. They cite Tony Gullo Motors I, L.P. v. Chapa, 212
S.W.3d 299, 313 (Tex. 2006), for the proposition that “[i]ntertwined facts[,]
alone, do not make unrecoverable fees recoverable.” Under Texas law, “if any
attorney’s fees relate solely to a claim for which such fees are unrecoverable, a
claimant must segregate recoverable from unrecoverable fees.” Chapa, 212
S.W.3d at 313. However, “when discrete legal services advance both a
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recoverable and unrecoverable claim[,] . . . they are so intertwined that they
need not be segregated.” Id. at 313-14. The record does not demonstrate that
the defendants argued before the trial court that the trial court should adopt
the Texas standard. Therefore, we conclude that their argument is not
preserved for our review, and we apply our traditional standard to this case.
Under New Hampshire law, claims are “analytically severable” when they
seek different relief, see Funtown USA, Inc. v. Town of Conway, 129 N.H. 352,
356 (1987); claims are not “analytically severable” when they constitute
alternative theories of recovery and the evidence necessary to prove liability
under one theory is relevant to prove liability under the other theory, see
LaMontagne Builders v. Brooks, 154 N.H. 252, 261 (2006).
Here, the court determined that all of the plaintiffs’ “claims share a
common core of facts that make severance impracticable and unreasonable.”
The court determined that “[t]he facts relevant to each claim overlap
significantly, and the investigation and work performed to prosecute one claim
necessarily related to the others.” Because there is record support for those
determinations, we uphold them, and conclude, therefore, that the trial court
did not unsustainably exercise its discretion when it declined “to apportion the
attorney time consumed in preparing and proving [the] misappropriation” claim
from that consumed preparing and proving the plaintiffs’ other claims.
Affirmed.
DALIANIS, C.J., and HICKS and LYNN, JJ., concurred.
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