Penney v. Middleton CV-92-555-B 08/24/95 P UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Richard Penney, et al.

v. Civil No. 92-555-B

Town of Middleton, et al.

O R D E R

Defendants, the Town of Middleton, Jeremy Johnson, and Roy

Snyder, move for summary judgment on most of the remaining claims

against them on the grounds of collateral estoppel and accord and

satisfaction. Defendant Calvin Roach, pro se, also invokes the

collateral estoppel doctrine in support of his summary judgment

motion. I deny both motions. I also address a discovery

guestion raised by Calvin Roach.

I. BACKGROUND

The plaintiffs accept the defendants' recitation of the

procedural facts of the prior proceedings that form the basis for

the defendants' arguments. Therefore, I adopt the defendants'

description of the prior proceedings and summarize other material

facts consonant with the familiar summary judgment standard.1

1 Summary judgment is appropriate only when the record shows that there is not a genuine dispute as to the material A. The Declaratory Judgment Action and the First HUD Complaint

The Penneys moved to Middleton in 1981, buying a home that

needed substantial renovation. After some difficulty, they were

allowed a property tax exemption in 1983 due to the fact that Mr.

Penney was deemed to be legally blind.2

In 1986, a housing inspector working for the Strafford

County Regional Planning Commission inspected the Penneys' house

and determined that it reguired substantial improvements that

could potentially be covered by funds made available pursuant to

a Community Development Block Grant.3 However, due to confusion

over the Penneys' income status, officials first indicated that

they would receive a 100% grant but ultimately determined that

they were eligible for only a 50% grant.

facts and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). I must view the record in the light most favorable to the non-moving party, the plaintiffs, and resolve all reasonable factual inferences in their favor. Oliver v. Digital Equip. Corp.,

(1st Cir. 1988).

2 See

(Supp. 1994).

3 The United States Department of Housing and Urban Development ("HUD") provided Community Development Block Grant program funds through the state to be disbursed through local governments for particular purposes to eligible applicants. See

, et. sea. (West 1995).

2 In April 1988, the Penneys petitioned in Strafford County

Superior Court for a declaratory judgment that they were entitled

to a 100% grant. The next month they filed a complaint with HUD,

their first of five complaints, alleging that the town had

discriminated against them in administering the block grant

program because of Mr. Penney's visual disability in violation of

the Rehabilitation Act. The Penneys' lawsuit was dismissed in

December 1989 when the court found that their allegations lacked

merit. The 1988 HUD complaint resulted in a finding in February

1990 that the town had complied with the Rehabilitation Act.

B. The Gun Permit Litigation

On February 2, 1990, Middleton Police Chief, Jeremy Johnson,

revoked a pistol permit that Mr. Penney had first obtained in

1984 and had renewed every two years thereafter.Penney filed a

petition in Rochester District Court to have his permit restored,

alleging that his permit was revoked unlawfully based on his

visual impairment. Penney further alleged that Johnson and the

town had been aware of his impairment during thesix years he had

held a permit. He claimed that the permit's revocation was

unconstitutional and an abuse of discretion. Following a hearing

on May 3, 1990, the district court denied his appeal of Johnson's

decision to revoke his permit, ruling that in light of his visual

3 impairment, Penney had failed to carry his burden of proof that

he was a suitable person to carry a pistol. Penney appealed the

district court's decision to the New Hampshire Supreme Court.

When on-going settlement negotiations later proved fruitful,

Penney asked that his case be remanded to the district court and

then to the town. The supreme court remanded the case to the

district court. However, the district court refused to remand

the case to the town and instead concluded that its earlier

ruling did not prevent Penney from reapplying to the town for a

new permit. Relying on this order, Penney abandoned the district

court action, reapplied for a permit and received the permit

after the town removed Johnson's permit authority. Nevertheless,

when Johnson regained his permit authority in 1991, he again

revoked Penney's gun permit.

C. Subsequent HUD Complaints

In February 1990, a few days after HUD's final determination

of the Penneys' first complaint in the town's favor and Johnson's

initial decision to revoke Mr. Penney's pistol permit, the

Penneys filed a second HUD complaint charging the town with

retaliation and discrimination against them because of their

participation in the prior complaint. One of the alleged

retaliatory acts was Johnson's revocation of Mr. Penney's pistol

4 permit. The second HUD complaint was resolved by a voluntary

compliance agreement between the town and HUD in September 1991.

During the same time period, the Penneys filed three other

complaints with HUD. The third complaint is the subject of the

defendants' summary judgment motion.4 According to HUD's July

23, 1990, notice to the town, this complaint alleged that the

town discriminated against the Penneys in determining whether

they were eligible to participate in the block grant program.

The third complaint was resolved on September 24, 1990, by a

settlement agreement between the town and the Penneys in which

the town agreed to award the Penneys funds under the program and

the Penneys agreed to withdraw their complaint and not commence

any additional actions against the town that were based on the

town's administration of the block grant program prior to the

date of the agreement.

D. The MCCG Litigation

On May 31, 1991, the Middleton Concerned Citizens Group,

Inc. ("MCCG"), including defendants Roy Snyder and Calvin Roach,

filed suit against the town and two selectmen in superior court.

4 HUD administratively closed the fourth and fifth complaints.

5 MCCG sought a declaratory judgment and injunction to hold the

selectmen, and the town, accountable for their handling of

certain town affairs, including money spent on legal expenses in

the Penneys' unsuccessful declaratory judgment action against the

town. MCCG later sought to amend its complaint to add Mr. Penney

as a party and to prevent the town from paying the Penneys'

expenses as reguired in the September 1991 voluntary settlement

agreement between HUD and the town. When the court granted a

temporary injunction against paying the money, the Penneys sought

to intervene in the action to dissolve the restraining order and

reguested attorney's fees. The superior court first dissolved

the restraining order and granted the Penneys' motion to

intervene. Later the court dismissed all of M C C G 's claims and

summarily denied all reguests for attorney's fees.

I now address the issues raised by the defendants in their

motion for summary judgment.

II. DISCUSSION

The defendants argue that the prior proceedings bar most of

the Penneys' claims against them. I consider the preclusive

effect of each proceeding in turn as the defendants have

presented them.

6 A. Whether the District Court's Decision Precludes the Pennevs From Litigating the Issue of Wrongful Revocation of Richard Penney's Pistol Permit

Many of the Penneys' claims against the town and Chief

Johnson are based on their allegation that Johnson twice

wrongfully revoked Mr. Penney's pistol permit. The Penneys claim

that the permit revocations violated § 504 of the Rehabilitation

Act by discriminating against a handicapped person based solely

on his handicap and also by discriminating or retaliating against

persons who file a complaint with HUD, which is prohibited by

HUD's Rehabilitation Act regulation,

(h). The

defendants contend that the district court's ruling that Mr.

Penney was not a suitable person to hold a pistol permit

precludes the Penneys from litigating certain facts that are

essential to their claims. The Penneys contest the preclusive

effect of the district court ruling.

Because the defendants advance the preclusive effect of a

New Hampshire state district court decision, I apply New

Hampshire's collateral estoppel rule. See Commercial Assocs. v.

Tilcon Gammino, Inc.,

(1st Cir. 1993). The

following elements of collateral estoppel are well-established:

(1) the issue or fact subject to estoppel must be identical in

both actions; (2) the first action must have resulted in a final

7 resolution of the issue or fact on the merits; (3) the party to

be estopped must be the same or in privity with the party in the

first action; (4) the party to be estopped must have had a full

and fair opportunity to litigate the issue in the first action;

and (5) the issue must have been essential to the final judgment

in the first action. Simpson v. Calivas,

, ___ ,

(1994) (guoting Daigle v. Portsmouth,

(1987) ) .

Even if I were to accept defendants' contention that the

other elements of an estoppel are present, I cannot agree that

the district court finally resolved the issue as to whether Mr.

Penney was a "suitable person" to hold a pistol permit. In

refusing to remand the case to the town, the district court ruled

that "the court finds no bar either in the statute or in this

court's decision dated May 3, 1990 which would prevent Mr. Penney

from filing a new pistol permit application with the town of

Middelton, should he so desire." Since the record contains no

indication that Penney's visual impairment had changed between

the date of the court's May 3, 1990, ruling and the above-guoted

order, it is plain that the district court did not consider the

May 3, 1990, order a final resolution of whether Penney was a

"suitable person" to hold a gun permit. Under these circumstances, I decline to give collateral estoppel effect to

the May 3, 1990, order. See, e.g.. Restatement (Second) of

Judgments § 14 (1982) (stating the rule for issue preclusion that

where prior determinations of issues are inconsistent, the last

determination is given preclusive effect) .

B. Whether the Superior Court's Decision Not to Award Attorney's Fees in the MCCG Suit Precludes the Pennevs' Claims

Defendants Roy Snyder and Calvin Roach, former officers of

MCCG, argue that the New Hampshire Superior Court's denial of the

Penneys' reguest for attorney's fees in the MCCG suit, amounts to

a finding that they did not act frivolously or in bad faith in

attempting to join Mr. Penney in the suit. Therefore, Snyder and

Roach contend, the Penneys are precluded from maintaining their

claims for malicious prosecution or § 504 retaliation. I

disagree.

An award of attorney's fees is left to the discretion of the

trial court. Maguire v. Merrimack M u t . Ins. Co . ,

(1990). In the present case, the court did not explain its

reasons for denying the Penneys' reguest for attorney's fees.

Therefore, I cannot determine whether the court in fact

determined that the Penneys had failed to prove that the MCCG

plaintiffs had acted in bad faith. Accordingly, I decline to give collateral estoppel effect to this ruling.

C. Whether the 1990 Settlement Agreement Precludes the Pennevs' Claims Arising Before the Agreement

Finally, the defendants point to the settlement agreement

between the town and the Penneys signed in September 1990 as an

accord and satisfaction of the Penneys' current claims.5 The

defendants argue that the 1990 settlement agreement bars all of

the Penneys' claims based on actions by the town and any of its

officials before the date of the agreement. The agreement does

not support the defendants' interpretation.

The meaning of unambiguous contract language presents a

guestion of law for the court to resolve. Butler v. Walker

Power,

(1993). The Penneys' third HUD

complaint, which was resolved by the settlement agreement in

September 1990, alleged that the town had discriminated against

them in determining their total income for purposes of

eligibility for the block grant program. In the settlement

agreement, the town agreed to award the Penneys $18,000 under the

5 The Penneys' complaints to HUD resulted in two different agreements: a settlement agreement between the Penneys and the town in September 1990 settling their third complaint, and a voluntary compliance agreement between the town and HUD in September 1991 settling their second complaint.

10 block grant program. In exchange, the Penneys agreed to withdraw

their third HUD complaint and not to litigate "any actions taken

by the Town of Middleton or the State of New Hampshire with

regard to the administration of Middleton's Community Development

Block Grant Program prior to September 1990."

The plain language of the September 1990 settlement

agreement only precludes the Penneys from litigating claims

arising from the discriminatory administration of the block grant

program. The Penneys make no such claims in this action. Thus,

their claims are not barred by the doctrine of accord and

satisfaction.

D. Discovery Question

Finally, defendant Calvin Roach asks whether he is obligated

to respond to the Penneys' interrogatories and reguest for

production of documents. I direct Mr. Roach to Federal Rule of

Civil Procedure 33 governing interrogatories and Rule 34

governing production of documents. He is reguired to comply with

the Rules of discovery as are all parties to the litigation. If

he finds that the reguests submitted to him by the Penneys do not

comply with the applicable rules, and if he wishes to object on

valid grounds, he may file a motion for a protective order with

the court stating his grounds.

11 III. CONCLUSION

For the foregoing reasons defendants' motions for summary

judgment (documents 175 and 178) are denied.

SO ORDERED.

Paul Barbadoro United States District Judge

August 24, 1995

cc: Gordon Bleakney, Esg. Timothy Bates, Esg. Cynthia Satter, Esg. Edward Philpot, Esg. Calvin Roach, pro se Edward VanDorn, Esg.

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