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MERRIMACK, SS SUPERIOR COURT

Joseph Finn Co., Inc.

v.

P.H. Precision Products Corp, Paul Hoeker, and Richard Hoeker

NO. 07-C-0273

ORDER

This is an action for a breach of contract by the Plaintiff, Joseph Finn Co., Inc.

("Finn") against defendants P.H. Precision Products Corp. ("Precision"), Paul Hoeker

and Richard Hoeker. Finn seeks damages for breach of contract against all Defendants.

In addition to compensatory damages for breach of contract, Finn seeks enhanced

compensatory damages and damages pursuant to the Consumer Protection Act. It also

seeks to amend the complaint after the close of the evidence to allege counts for civil

conspiracy and intentional interference with advantageous relations.

For the reasons stated in this opinion, the Court finds for the Plaintiff Joseph

Finn, Co., Inc. on its breach of contract claim against P.H. Precision Products Corp. and

assesses damages at $68,810.22. The Court finds for Defendants Richard and Paul

Hoeker on the breach of contract claim, as they did not act in their personal capacities.

The Court awards compensatory damages only, finding that the Plaintiff has not set

forth a claim for enhanced compensatory damages, or for violation of the New

Hampshire Consumer Protection Act, RSA 358-A. Finally, the Court denies the
Plaintiff's Motion to Amend the Complaint filed after trial to add counts for civil
conspiracy and for intentional interference with advantageous contractual relations.
I. Facts

Joseph Finn, Co., Inc. is engaged in the business of running auctions. In

November of 2006, the Defendant P.H. Precision decided to close. The Defendants then
made extensive efforts to sell their machinery which included offering the machinery
equipment to equipment brokers and advertising in trade publications.
Sometime during March of 2007, the Defendants decided to sell the machinery
equipment through a public auction. The Defendants sought and received proposals for
the sale of equipment owned and leased by Precision from a number of auctioneers. Mr.
Paul Hoeker prepared a spreadsheet outlining the pros and cons relating to the various
brokers. Between April 18, 2007 and April 23, 2007 the parties exchanged a number of
draft agreements. Eventually, the parties entered into an agreement on April 24, 2007,
which all parties agree constituted a binding contract (the "Finn Contract") between the
parties. Paul Hoeker signed the agreement as President of P.H. Precision Products
Corp. Richard Hoeker did not sign the agreement.
Once the agreement was signed, the Finn contract required the Plaintiff to
deposit the sum of $225,000 with Precision. It gave the Plaintiff the right to auction
the Precision equipment in exchange for the compensation agreement in the contract.
The Finn contract guaranteed Precision a sum of $1,075,000 from the auction, while
providing that Finn would keep the next $75,000 of auction sales to cover its expenses.
Although the contract states that the parties would then split any profits above
$1,loo,000, this appears to be a typographical error that was not corrected when the
parties increased the guarantee to $1,075,000. The testimony of the parties, the

exhibits, and the pleadings, establish that parties understood that the 5% sharing would
•
occur on any sales over $1450,000, the total of the $1,075.000 guarantee and the next

$75,000 promised to Finn. 1 The Finn contract called for a 10% buyer's premium on all

sales, which would be retained by Finn. Additionally, the Finn contract contained a

liquidated damages clause which entitled Finn to $12,500 plus all out-of-pocket

expenses if the auction was cancelled for any reason other than Finn's prior to the

brochures being sent out. If the auction was cancelled after the brochures were mailed,

Finn would be entitled to $20,000 plus out-of pocket expenses.

Although the Finn contract specifies that Finn would be willing to include four

pieces of leased machinery in the auction, the contract does not state that the leased

equipment would be included in the auction. The Finn contract contemplates that if the

leased items were included in the auction, they would be subject to a reserve set by the

leasing company, but that "[t]he difference between the leasing companies' reserve

amounts and the total selling price, including the io% Buyer's Premium, will be split

5o/5o between Joseph Finn Co., Inc. and P.H. Precision." Ex. 64 (A).

The Finn contract included a confidentiality clause, which reads

All communications between the parties hereto are in strict confidence and
the parties hereto agree that no discussion or communication to a third
party concerning this agreement or the underlying basis is to be made by
one party without written approval of the other.

Ex. 64 (A). Further, the Finn contract had a confirmation clause, which stated

that after the contract was signed, Steven Finn would visit Precision on April 26,

2007 to "confirm the agreement." M. The Finn contract clarifies that "[i]f Mr

1
Specifically, Precision would retain 95% of all proceeds over $1050,000 while Finn would retain 5%.

-3
Finn is unable to confirm the agreement as written and resolution cannot be

accomplished, the deposit will be refunded within 24 hours." Id.

After the parties signed the Finn contract on April 24, 2007, Finn made the

required deposit. Nonetheless, Mr. Paul Hoeker continued to review the various

proposals received from other brokers who contacted him. Specifically, Andrew Duncan

from Go Industries had kept in contact with Precision in an attempt to keep his bid to

hold the auction alive. Mr. Duncan had submitted multiple proposals to the Hoekers

and although the Hoekers did not initiate contact with Go Industries, they were in

contact with Go Industries in the days leading up to April 26, 2007.

On April 26, 2007, after several days of intense negotiation and after both parties

had signed an agreement, Stephen Finn went to the Precision premises to begin

preparations for the auction sale. Under the contract between the parties, Finn had the

opportunity to review the inventory one last time and confirm the contract. The

Hoekers were concerned that they had received three telephone calls which suggested

Finn had breached confidentiality from Thomas Fini, an unidentified Englishman and

one Robert Levy, a Hilco principal. The unidentified Englishman and Levy indicated

that they knew that P.H. had awarded the contract to Finn. The contract between the

parties specifically required Finn to keep the transaction confidential. Both Hoekers

admitted Precision suffered no damage by Finn's breach of confidentiality but claimed

the breach caused them to have less trust in Mr. Finn. Mr. Finn admitted at trial that he

probably did breach confidentiality by disclosing the fact that he had received the

contract.

When Finn came to the Defendants' place of business to confirm on April 26,
2007, he was confronted by Richard Hoeker who told him that the Defendants would
not go forward unless Finn agreed to make further changes to the contract, including an
increased guarantee amount. Finn immediately told Hoeker that Finn had a "contract"
and "rights". Hoeker gave Finn a cancellation agreement and Finn refused to sign it. At
4:2o that day, Precision sent Finn an e-mail in which it outlined additional changes that
Finn wanted made to the contract which had already been signed. Significantly, the
despite Defendant's claim that it had "lost trust" in Finn, Mr. Hoeker told Mr. Finn that
he was still willing to proceed if Finn would increase the guarantee from $1,075,000 to
$1,150,000. At 5:06 p.m. Finn responded by requesting a conference call among the
parties and counsel. The Court finds that the purpose of Finn's email and request was
not simply to recover Finn's funds, but rather to attempt to see whether or not the
transaction could be salvaged, and if not, let Precision know that Finn intended to
protect its rights under the signed contract. The next day at 7:31 a.m. Precision notified
Finn that it believed the agreement of April 20, 2007, was not totally concluded during
the April 26, 2007 visit and the deposit would be returned at 9:oo a.m. that day.
Seventeen minutes later, the Defendants sent an email to Go Industries in which
Precision outlined the terms of an acceptable agreement, including a net guarantee in
the amount of $1,250,000 to be paid within 24 hours of the execution of the agreement.
The Defendants and Go Industries had an agreement in place by the end of the day.
Go Industry eventually conducted the auction and a subsequent online auction.
Pre-auction sales were $15,521.74, auction sales were $1,228,900.55, and online auction
sales were $64,912.57. The total proceeds were $1,309,334.86. Go Industry charged a
buyer's premium equivalent to 12.5% of that amount, as compared to the 10% buyer's
premium listed in the Finn contract. Also, the Go Industry contract called for Precision,

rather than the leasing companies, to determine the reserve amount on leased

equipment. Go Industry also sold Precision's leased equipment. The Tornos 26/6 was

sold for $192,000. After the reserves were satisfied, the proceeds of the other leased

equipment, including the buyer's premium, totaled $198,750.

II. The Breach of Contract Claim

The parties agree that there was a contract in this case. The Court rejects the

Defendant's claim that the contract was not effective because Mr. Finn did not utter the

talismanic phrase "I confirm" when he came to the Hoekers place of business on April

26, 2009 to confirm the values placed on the equipment. The confirmation clause

existed solely for his benefit, and his actions that day in refusing to cancel the contract,

and for that matter Mr. Paul Hoeker's actions in attempting to persuade him to sign a

cancellation of contract form, indicate that both parties believed a valid and binding

agreement existed. "There is no surer way to find out what the parties intended than to

see what they have done", Bogosian v. Fine, 99 N.H. 340,342 (1955), and based on the

conduct of the parties, on April 26, 2009, there is no doubt that both parties believed a

binding contract existed and all conditions were fulfilled.

There is also no doubt that the Defendant Precision breached the contract. It

refused to proceed with the written contract it had signed, advised Finn that Finn must

make changes in the guarantee in order to proceed, and returned Finn's deposit to it.

Precision's conduct constituted at least an anticipatory breach of contract which "occurs

when a promising party repudiates his obligations either through words or by

voluntarily disabling himself from performing them before the time for performance.
Syncom Industries vs. Wood, 155 N.H. 73, 83-84 (2007) (citation omitted).

Precision alleges that its breach was excused because Finn breached the contract

by disclosing the existence of the auction to two different individuals. However, as a

general rule, "[o]nly a breach that is sufficiently material and important to justify ending

the whole transaction is a total breach that discharges the injured party's duties."

McNeal v. Lebel, 157 N.H. 458, 465 (2008) (citation omitted). In determining whether a

failure to render or offer performances is material, the following circumstances are

significant:

A) the extent to which the injured party will be deprived of the benefit
which he reasonably expected; B) the extent to which the injured party can
be adequately compensated for the part of the benefit of which he will be
deprived; C) the extent to which the party failing to perform or offer to
perform must suffer forfeiture; D) the likelihood that the party failing to
perform or offer to perform will cure his failure taking into account all of
the circumstances including any reasonable insurances; E) the extent to
which the behavior of the party failing to conform or offer to perform
comports with standards of good faith and fair dealing.

Restatement (Second) of Contracts § 241 (1979). Here, the disclosure of the breach of

confidentiality resulted in no damages. While it is no doubt true that the breach could

have resulted in damages to the Plaintiff by causing other parties in negotiation with

Plaintiff to fail to purchase items in the two days before the auction became public, the

Defendants failed to point to any evidence even suggesting that this was the case. In

fact, at trial Precision did not really attempt to show that there were damages that it

suffered, but rather argued that it had "lost trust" in Mr. Finn because of a "bait and

switch" and the breach of confidentiality and could not go forward with him.

The Court does not credit the Hoekers' testimony that Precision breached because

it "lost trust." Moreover, Precision was not a victim of a "bait and switch" as Defendants
claim. At one point in the negotiations, Finn reduced its proposed guarantee, but Mr.

Hoeker continued to negotiate with Mr. Finn after Finn reduced its guarantee. The

testimony and the agreement itself indicate that there was hard bargaining between the

parties; they were obviously were not operating on a handshake, but negotiating every

term of a contract which was initialed as every change was made.

If it truly "lost trust" in Mr. Finn, Precision could have sought adequate assurance

of performance. Cf. RSA 382-A 2-609. which states: "(1) Where reasonable grounds

arise to believe that the obligor will commit a breach by non-performance that would of

itself give the obligee a claim for damages for total breach under § 243, the oblige may

demand adequate assurance of due performance. . . ." Restatement (Second) of

Contracts, § 251 (1979). In McNeal v. Lebel, the New Hampshire Supreme Court
recognized § 251 and found that there were sufficient grounds for a general contractor to

seek assurance of payment from the customer before continuing his work where the

lender withdrew funding for the project. See 157 N.H. 462-463. There is no evidence

Finn was unwilling to perform. The fact that defendants did nothing, but rather sought

to breach, is illustrative of the lack of basis for their breach. Here, the Defendants were

not even entitled to seek reassurance, because none of Finn's actions could lead the

Defendants to believe that Finn would commit a breach by non-performance or entitle

the Defendants to damages for total breach.

IV. Damages
A, Damages for Breach of Contract

Since Precision breached, Finn is entitled to damages. The measure of damages in

this contract case is straightforward; they constitute the damages that the Plaintiff

suffered by not performing the auction. The Plaintiff is entitled to compensatory

damages which will put it "in as good a position, so far as money damages can put [it], as

[it] would have occupied had the defendant[s] fully performed." Dunn & Sons. Inc. v.

Paragon Homes of New Eng., Inc., 110 N.H. 215, 218 (1970); see also Salvucci & Sons,
Inc. v. State, no N.H. 136, 154 (1970). Lost profits may be recovered "only if sufficient
relevant data supports a finding that profits were reasonably certain to result" in the

absence of the breach. Great Lakes Aircrafts Co. v. City of Claremont, 135 N.H. 27o, 296

(1992). See also (Hydraform Prods. Corp. v. American Steel & Alum. Corp., 127 N.H.

187, 198 (1985)). The law does not require mathematical certainty in computing

damages. Salvucci & Sons, Inc. v. State, (supra) at 154.

The parties are in agreement that the total proceeds of the auction, including pre-

sale and the online auction, are $1,309,334.86. Finn asserts that it is entitled to

$300,525.23 in total damages. Specifically, Finn maintains that it is owed $191,310.23

in auction sales, $9,840 for the sale of the Tornos 26/6, and $99,375 for the sale of other

leased equipment. In part, the Defendants maintain that the lost profits were not

ascertainable at the time the contract was formed because the results of an auction are

speculative and that Finn has overstated the lost profits it would be entitled to based

upon the results of the Go Industry auction. The Court finds that although the Finn

contract contemplated the inclusion of the leased equipment in the auction, the parties

never came to an agreement on this matter. Significant terms of the leased equipment
transaction remained open. Lost profits on the transaction would be speculative.

Hydraform Prods. Corp. v. American Steel & Alum. Corp. (supra) at 198. Accordingly,
Finn is not entitled to any damages from the sale of the Tornos 26/6 or the other leased

equipment.

Finn details how it produced the figure of $191,310.23 which it maintains it is

entitled to based upon the auction sales. Specifically, Finn contends that the io%

buyer's premium agreed upon in the Finn contract entitled it to $130,933.48. Next,

Finn asserts that because Go Industries charged a 12.5% buyer's premium, which is 2.5%

above the buyer's premium that Finn would have charged, the sale could be considered

to have generated additional proceeds of $32,733.37, of which Finn is entitled to 10%,

or $3,273.33. Finn also maintains that because the contract states that Finn is entitled

to keep the first $75,000 of proceeds over the guarantee to cover expenses, Finn should

recover the $35,500 that would not have been part of Finn's outlined expenses.

Additionally, Finn seeks $9,603.42 for the 5% of proceeds generated over $1,150,000.

Finally, Finn contends that the contract entitles it to $12,000 in labor charges.

Precision agrees that the contract entitled Finn to a buyer's premium of 10% of

the auction sales. However, Precision disagrees with Finn's apparent assumption that

because Go Industries charged a buyer's premium 2.5% above that which Finn would

have charged, that buyers would have spent 2.5%, or $32,733.37, more at the auction.

Precision maintains that this assumption is merely speculative, and therefore Finn is not

entitled to 10% of this amount, or $3,273 in damages.

Precision did not claim that Finn was not a competent auctioneer. The Court

finds that it is reasonable to assume that had the Finn auction taken place, the proceeds
would have been equivalent to the Go Industries auction, and will therefore use the

proceeds of that auction as the basis for calculating Finn's damages. The Court finds

much of Precisions' reasoning persuasive. However, unlike Precision, the Court finds

that Finn is entitled to 10% of the additional proceeds of $32,733.37. The fact that the

auction brought 1,309,334.86 plus a 12.5% premium reasonably establishes that if a io%

premium were charged, the auction would have generated 2.5% more for Precision. The

Court finds that the $32,733.37 should be added to the $1,309,334.86, brining the total

proceeds of the auction to $1,342,068.23. The total gross profit of the auction which

Finn may claim is AS FOLLOWS:

1). io% Buyer's Premium on the auction proceeds of 1,309,334.86: 130,933.48

2) io% of 32,733.37 (resulting from the 12.5% Buyer's premium charged by Go

Industries): 3,273.33

3) 5% of proceeds over 1,150,000 (1,342,068.23 less 1,150,000, = 192,068.33):

9,603.41

TOTAL GROSS PROFIT 143,810.22

To determine Finn's net profit, it is necessary to deduct from the gross profit

$75,000, which the Finn contract describes as covering "all advertising and labor

expenses." Ex. 64 (A). The Court does not agree with the Defendants' assertion that this

number should be further reduced to account for the auctioneers' salaries. The

testimony established that Finn would have been able to conduct the Precison auction as

well as other auctions with the staff it had, recognizing in the contract itself, that it

would incur an incremental cost of $75,000.00. Restatement (Second) Contracts § 347.

The fact that the Plaintiff had been involved in many other auctions during the same
period of time does not affect its ability to recover damages. Finn was clear that it had

the capacity, by hiring short-term help, to complete both the Precision auction and other

auctions that it performed. As a general rule, if a party could have and would have

entered into the subsequent contract even if the contract had not been broken and could

have had the benefit of both, he can be said to have lost volume and the subsequent

transaction is not a substitute for the broken contract. See Restatement (Second) of

Contracts § 347 comment f. The injured party's damages are then based on the profit
that he has lost as a result of the broken contract. Id.

Therefore, the Court finds that there is sufficient data to support a finding that

the total profit which Finn would have received from performing the auction if the

Defendants had not breached is $68, 810.22. See Great Lakes Aircrafts Co. v. City of

Claremont, (supra) at 296.

B. The Liquidated Damages Provision of the Contract

Precision argues that the damages in this case are limited to liquidated damages

as stated in the contract. The contract provides:

If for any reason other our own the auction sale is cancelled after the
signing of our auction agreement and prior the auction brochures being
mailed out...we are to receive a fee of $12,500 plus all out-of-pocket
expenses incurred at that time. If for any reason other than our own the
sale is cancelled after the mailing of the auction brochures and prior to the
auction sale, we are to receive a fee of $20,000 plus all out-of-pocket
expenses incurred until that time. Under this agreement Joseph Finn Co.,
Inc. has exclusive sales rights to this equipment and it may not be sold by
any other parties.

Ex. 64 (A). Mr. Finn testified that this liquidated damages provision applied only to the

circumstance in which the auction, rather than the contract, was cancelled because the

party whose goods were being auctioned decided not to go forward with the sale. This
testimony is consistent with the last paragraph of the clause: "under this agreement

Joseph Finn Co., Inc. has exclusive sale rights to this equipment and it may not be sold

by any other parties." Accordingly, the liquidated damage clause does not limit the

compensatory damages to which the Plaintiff is entitled.

C. Enhanced Compensatory Damages

The Plaintiff has made a claim for enhanced compensatory damages as a result of

this breach of contract. Plaintiff seeks enhanced compensatory damages, basically on a

theory that "the Defendants' deliberate, intentional, knowing, premeditated, willful and

wanton breach of the Finn contract was egregious and entitles Finn to enhanced

damages and attorneys' fees, costs and expenses." Pl.'s Requests for Findings of Fact,

Rulings of Law, pg. 9-10.

Finn, in substance, seeks punitive damages, which are forbidden by statute, RSA

507:16, and as a matter of long standing New Hampshire Constitutional law. Moreover,

enhanced compensatory damages are only available in extraordinary tort cases, and "not

even in every case involving an intentional tort". Figlioli v. R.J. Moreau Companies,

Inc., 151 N.H. 618, 621 (2005). The New Hampshire Supreme Court has held that "the

mere fact that an intentional tort is involved is not sufficient; there must be ill will,

hatred, hostility, or evil motive on the part of the defendant. Stewart v. Bader, 154 N.H.

75, 87 (2006) (quotation and citation omitted). This is not a tort case, and in any event,

the record does not support any indication of ill will or evil motive. Enhanced

compensatory damages are not available in this case.

V. Attorney's Fees
 The Plaintiff also seeks attorney fees in this matter. Superior Court Rule 59 gives

the court the power to assess costs and reasonable attorney's fees "against any party

whose frivolous or unreasonable conduct makes necessary the filing of or hearing on any

motion." Additionally, the New Hampshire Supreme Court has found that there may be

bad faith justifying an award of fees when "an individual is forced to seek judicial

assistance to secure a clearly defined and established right, which should have been

freely enjoyed without such intervention...." Indian Head National Bank v. Corey, 129

N.H. 83, 87 (1986) (citing Harkeem v. Adams, 117 N.H. 687, 691 (1977)). The Court

finds that there is nothing in the record to suggest that the Defendants acted frivolously

or in bad faith. Accordingly, the Plaintiffs request for attorneys' fees is DENIED.

VI. Plaintiff's Consumer Protections Claim

The Court has already addressed the Plaintiffs Consumer Protection claim in an

extensive order. The Plaintiff was able to prove most of the allegations it set forth in its

writ at trial, but did not provide any additiOnal basis for a finding of breach of the

Consumer Protection Act ("CPA"). Rather, after hearing all of the evidence the Court

simply concludes that the Defendants were engaged in hard bargaining and negotiation

in a very competitive industry. Even after they signed a contract which governed most,

but not all, of the equipment to be auctioned, the Defendants continued desultory

negotiations with other auctioneers, and Finn violated the contractual confidentiality

agreement.

The conduct of neither party was exemplary, but neither was it willful, wanton, or

bad faith. The Court must look to the Federal Trade Commission Act for guidance. RSA

358-A:13; State v. Moran, 151 N.H. 450, 453 (2004). The Federal Trade Commission
determines if actions are unfair or deceptive by inquiring:

"1) Whether the practice without necessarily having been previously

considered unlawful, offends public policy as it has been established by
statutes, the common law or otherwise — whether in other words it is
within at least the penumbra of some common law, statutory or other
established concept of unfairness; 2) whether it is immoral, unethical,
oppressive or unscrupulous; 3) whether it causes substantial injury to
consumers (or competitors or other businessmen). Id. at 453. (emphasis
supplied).

In cases such as this, in which the conduct alleged does not include one of the

specific types of conduct that are set forth in the statute, the Court has adopted the so-

called "rascality test", which was first articulated by the Massachusetts courts, in

Barrows v. Boles, 141 N.H. 382, 390 (1986) to determine if the conduct falls within the

purview of the act. In Barrows, the Court held that an ordinary breach of contract does

not present the occasion for remedies under the CPA, and for conduct not specifically

enumerated in the statute to violate the Consumer Protection Act, "the offending

conduct must obtain a level of rascality that would raise an eyebrow of someone inured

to the rough and tumble world of commerce." Milford Lumber Company v. RCB Realty,

147 N.H. 15, 17 (20o1), quoting Barrows v. Boles at 39o. In an unbroken line of cases

since Barrows, the New Hampshire Supreme Court has continued to follow the so-called

"rascality test" even though the Massachusetts Supreme Judicial Court, which had

originated the test, noted in Mass Employer's Association v. Pippac-Mass. Inc., 42o

Mass 39, 4 2, 648 NE 2nd 435, 438 (Mass 1995) that it found phrases such as "level of
rascality" to be uninstructive. Some lower courts in Massachusetts have, since Propac-

Mass, continued to use the rascality analysis, but the New Hampshire Supreme Court

has recently stated that in light of the Propac-Mass decision "the law in Massachusetts is

not clearly settled." Clark & Lavey Benefit Solutions v. Educational Development

-15—
Center, 157 N.H. 220, 226 (2008). Massachusetts precedents are therefore of limited

value. And certainly the phrase "rascality", if not uninstructive, is certainly not a precise

standard. Indeed, in Propac-Mass Inc., the Court stated that it focuses on "the nature of

the challenged conduct and on the purpose and effect of that conduct as the crucial

factors" in determining whether a violation has occurred. Propac-Mass. (supra) at 42o

Mass 42, 648 NE 2d 438. To determine which conduct not specifically enumerated in

the CPA constitutes a CPA violation, it is therefore helpful to look at the facts of each

particular case decided by the New Hampshire Supreme Court. The following principles

can be discerned.

First, if a consumer protection claim is made based on false representation in the

inducement, the Court has held that the use of the words "deceptive" and "unfair" in the

statute require a degree of knowledge or intent. In Kelton v. Hollis Ranch, LLC, 155

N.H. 666, 668 (2007) where defendant sold a horse as a gelding, and had no reason to

know that in fact the horse had an undescended testicle, the Court held that a CPA

violation could not be maintained. Even the existence of a deceptive act does not

constitute a consumer protection violation, per se. In Hair Excitement v. L'Oreal USA,

158 N.H. 363, 371 (2009) the Court held that false representations as to both identity

and intent of a representative of the defendant who was carrying out a so-called "loyalty

test" to determine whether or not the plaintiff was violating anti-diversion provisions in

the contract did not violate the CPA because the misrepresentations were made in the

context of a "rough and tumble business," and the defendant was exercising its rights

under the agreement to insure that the plaintiff was not diverting its product. Id. at 371.

On the other hand, direct and knowing fraud in the inducement to the contract
has been found to result in a CPA violation. For example, in State v. Moran, (supra) the
Court found that the defendant violated the Act by inducing the plaintiff to give him
$2,300 for materials when he in fact never intended to perform the work and made
continuous misrepresentations over a period of time about his willingness to do so.
State v. Moran, (supra) at 454. Similarly, in State v. Sideris, 157 N.H. 258, 263 (2008),
where the plaintiff entered into a contract and took a deposit from the plaintiff with no
intention of performing work, and made misrepresentations to avoid refunding money,
the Court held a CPA violation occurred.
Fraud in carrying out the provisions of a contract has been held to violate the
CPA. In Milford Lumber v. RCB Realty, (supra) at 19, the Court found a violation of the
CPA, because the defendants did not simply fail to pay the plaintiffs invoices, but made
intentionally vague representations regarding their relationship with another party to
facilitate the use of that other party's account with the plaintiff.
Finally, fraudulent but viable threats during negotiations by a party with superior
bargaining power have been found to violate the Act. In Beckstead v. Nadeau, 155 N.H.
615, (2007) defendants attempted to deceive the plaintiffs by inflating a legal bill sent to
the plaintiff for work done at their law firm and used that inflated bill to bargain with
the plaintiff over the size of the bill for work performed by the plaintiff. In Nadeau, the
defendant attorneys also presumably owed a fiduciary obligation to their former client,
which was plainly violated when the fraudulent inflated bill was sent.
The contrast to the instant case is stark. In this case, it appears that the
Defendants, after entering into a contract with the Plaintiff, decided that they could
negotiate a better deal with another auctioneer, and pressured the Plaintiff to make
concessions in a contract they had already signed. The Court notes that at the time of

the breach, although the contract provides a basis for a remedy, all of the terms were not

complete. The Defendant breached the contract, and ultimately entered into a contract

three days later with another party who they considered on more favorable terms.

This case appears to be similar to Barrows v. Boles (supra). In Barrows, the Court found

that there was no violation of the CPA despite the fact that the defendant "acted in an unfair or

deceptive manner at several points in their extensive negotiations by making promises and

then failing to comply with the conditions that the parties previously agreed upon and by

altering the terms of the parties' previous agreements without giving Barrows the opportunity

to object." Barrows v. Boles, (supra) at 390. The Court noted that "selfish bargaining and

business dealings will not be enough to justify a claim for damages' under the Consumer

Protection Act the defendants' conduct simply falls, within the rough edges of commercial

lending." Id (citations omitted). As in Hair Excitement v. L'Oreal (supra), the auction business

appears to be a "rough and tumble" one. Id. at 371. The New Hampshire Supreme Court has

held that:

to prove a violation of RSA chapter 358-A, a plaintiff must prove that the
defendant is a person, that the defendant used an unfair method of
competition or a deceptive act or practice, that the act occurred in trade or
commerce, and that the defendant's conduct rose to 'a level of rascality
that would raise an eyebrow of someone inured to the rough and tumble of
the world of commerce.'
Hair Excitement, Inc. v. L'Oreal USA, Inc., 158 N.H. 363, 369-370 (2009)
(quoting ACAS Acquisitions v. Hobert, 155 N.H. 381, 402 (2007)). Here, the Defendant

simply attempted to force Petitioner to make concessions to a contract already signed;

when it refused to agree, Defendant breached. The conduct of the Defendant would not

"raise the eyebrow of one inured to the rough and tumble world of commerce", if the

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phrase is interpreted by reference to the other cases in which the New Hampshire
Supreme Court has found a CPA violation. The FTC standard, approved by the Court in
State v. Moran (supra) at 453, considers whether an act "offends public policy as it has
been established by the common law...whether it is immoral, unethical, oppressive or

unscrupulous...whether it causes substantial injury to other... businessmen." (emphasis

supplied) But the majority view has always been that there is no moral quality to a
breach of contract. See, e.g., Frye v. Hubbell. 74 N.H. 358, 374 (1914) (" But the
confusion arises from the failure to distinguish between legal and moral obligations.
One may be morally bound to do precisely as he agrees, but he is legally bound to
do...only that he can be compelled by law to do... The law does not prohibit the breach of
his contract, but leaves him free to breach it if he chooses, giving the other party the
remedy of damages.") See generally, Oliver Wendell Holmes, Jr. The Path of the Law, 10
Harv.L.Rev. 457, 462 (1897) cited in Corbin on Contracts (Revised Edition 1995) § 71.12
pp. 392-393. And as a result of Defendants' conduct, no substantial injury to other
businessmen occurred. In fact, assuming the truth of Plaintiffs allegations, Defendants
apparently believed they were engaged in an efficient breach of contract. An efficient
breach of contract occurs when a party breaches a contract, recognizing that even after it
pays damages for its breach, it will still be in a better position than as if it had performed
the contract. Some commentators argue that the law should encourage efficient
breaches of contract. See, e.g. Richard A. Posner, Economic Analysis of Law 119 (6th Ed
2003).

Whether or not that proposition is correct, there is no doubt that the New
Hampshire Supreme Court has made it clear that in the ordinary case, a party who

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breaches a contract is only liable for contract damages. This is not a case where, for

example, the defendant attempted to destroy the petitioner's business by deceitful

transactions. Compare, Globe Distributors, Inc: v. Coors Brewing Co., 129 B.R. 304,309
0

(DNH 1991). Nothing at the trial suggested that the Defendants' actions would "raise the

eyebrow" of someone familiar with the rough and tumble of the auction industry.

Rather, this case simply involves a breach of contract for which the Defendants are

liable, and for which they must pay damages.

VIII. Plaintiffs Motion to Amend

After the bench trial the Plaintiff filed a motion to amend its writ by adding a

claim for intentional interference with contractual and economic relationships and a

claim for civil conspiracy, aiding and abetting. The Plaintiff asserts that it should be able

to amend its writ because the Court has already tried the issues raised by the proposed

claims during trial, and therefore, the Defendants should not be surprised or prejudiced.

The Defendants object to the Plaintiffs motion to amend. The Defendants assert that

the Plaintiffs proposed amendments should not be allowed because they seek to

introduce two new causes of action, and that they prepared and tried their case on the

causes of action alleged, not the actions Plaintiff seeks to bring by amendment.

The New Hampshire Supreme Court has held that pleadings may be amended

liberally. See Dent v. Exeter Hospital, Inc., 155 N.H. 787, 796 (2007). However,

Generally, a court should allow amendments to pleadings to correct

technical defects but need only allow substantive amendments when
necessary to prevent injustice. A substantive amendment that introduces an
entirely new cause of action, or calls for substantially different evidence, may
be properly denied.

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breaches a contract is only liable for contract damages. This is not a case where, for

example, the defendant attempted to destroy the petitioner's business by deceitful

transactions. Compare, Globe Distributors, Inc. v. Coors Brewing Co., 129 B•• 304,309

(DNH 1991). Nothing at the trial suggested that the Defendants' actions would "raise the

eyebrow" of someone familiar with the rough and tumble of the auction industry.

Rather, this case simply involves a breach of contract for which the Defendants are

liable, and for which they must pay damages.

VIII. Plaintiffs Motion to Amend

After the bench trial the Plaintiff filed a motion to amend its writ by adding a

claim for intentional interference with contractual and economic relationships and a

claim for civil conspiracy, aiding and abetting. The Plaintiff asserts that it should be able

to amend its writ because the Court has already tried the issues raised by the proposed

claims during trial, and therefore, the Defendants should not be surprised or prejudice&

The Defendants object to the Plaintiffs motion to amend. The Defendants assert that

the Plaintiffs proposed amendments should not be allowed because they seek to

introduce two new causes of action, and that they prepared and tried their case on the

causes of action alleged, not the actions Plaintiff seeks to bring by amendment.

The New Hampshire Supreme Court has held that pleadings may be amended

liberally. See Dent v. Exeter Hospital, Inc., 155 N.H. 787, 796 (2007). However, ,

Generally, a court should allow amendments to pleadings to correct

technical defects but need only allow substantive amendments when
necessary to prevent injustice. A substantive amendment that introduces an
entirely new cause of action, or calls for substantially different evidence, may
be properly denied.

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Thomas v. Telegraph Pub. Co. 151 N.H. 435, 439 (2004) (citations omitted). Absent a

showing of injustice, it is within the Court's discretion to deny a motion to amend that

seeks to add a new cause of action. See Id. at 44o. The Plaintiff originally brought

counts for breach of contract, breach of covenant of good faith and fair dealing, and a

violation of the Consumer Protection Act. The proposed claims of intentional

interference with contractual and economic relationships, and civil conspiracy, aiding

and abetting are entirely new causes of action, which call for substantially different

evidence than that in a simple breach of contract case. Because the Plaintiff has not

established that its Motion to Amend must be granted to prevent injustice, the motion is

DENIED.

IX. Conclusion

To summarize, the Defendants are to pay Finn damages in the amount of $68,

810.22. The Plaintiffs requests for enhanced damages and attorney's fees are DENIED.

Further, the Plaintiffs motions to reconsider and motion to amend are DENIED. Any

of the parties' requests for findings of fact and rulings of law that are consistent with this

opinion are GRANTED. The remaining requests are DENIED or determined to be

unnecessary for resolution of this matter. Harrington v. Town of Warner, 152 N.H. 74,

85-86 (2005).

SO ORDERED.

DATE
V/6 e citc.,QX /11-1
Richard B. McNamara,

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 Presiding Justice

RBM/mrs