Many municipalities seek enforcement of land use ordinances and regulations in court. At times, the local code enforcement officer may proceed to district court without consulting town counsel. The result in this case shows the importance of researching the facts and the law with great care before starting a lawsuit. Although the court found that the legal claims of this plaintiff were not frivolous, and refused to award the lumber company reimbursement for its legal fees, the plaintiff, a private landowner on a Class VI road, still ended up on the wrong end of a substantial damage award.
This is the second opinion of the New Hampshire Supreme Court in this matter. A lumber company sought to log a parcel of land it owned and made arrangements with the town to use a Class VI road to remove timber. An abutting landowner sought and received an injunction in the superior court preventing the timber company’s use of the road, alleging that the road was private. Following a trial, the court concluded that the road was in fact public and lifted the injunction. The lumber company sought an award of damages from the landowner for the losses it had suffered during the five-month delay between the grant of the injunction and the conclusion of the trial.
In its original opinion, found at 150 N.H. 148 (2003), the New Hampshire Supreme Court upheld the lower court’s finding that the road was a Class VI road, not private, and held that a party subject to a wrongfully issued injunction is entitled to recover damages that were incurred or suffered as a result of the injunction. The party claiming damages has the burden of proof to show that the damages were caused by the wrongful act, as well as the extent and amount of the damages, by a preponderance of the evidence. The party must also show that it attempted to minimize its damages where possible and that its expenses were reasonable.
In this opinion, the Court stated that it would review damage awards in the light most favorable to the prevailing party—in this case, the timber company. The Court sustained an award of over $33,000 in lost profits to the lumber company resulting from a difference in the market price actually received for the wood products when compared to the price that could have been received if the harvest had occurred when originally attempted. In addition, the Court remanded the case to the trial court to calculate an award of overhead expenses incurred by the timber company that could have been avoided had the injunction not originally been granted.