City of Portsmouth v. Nash

493 A.2d 1163, 126 N.H. 464, 1985 N.H. LEXIS 304
CourtSupreme Court of New Hampshire
DecidedMay 6, 1985
DocketNo. 84-152
StatusPublished
Cited by4 cases

This text of 493 A.2d 1163 (City of Portsmouth v. Nash) is published on Counsel Stack Legal Research, covering Supreme Court of New Hampshire primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Portsmouth v. Nash, 493 A.2d 1163, 126 N.H. 464, 1985 N.H. LEXIS 304 (N.H. 1985).

Opinion

Per curiam.

This appeal stems from an action by the plaintiff, the City of Portsmouth, to recover from the defendant property owners, Gerald Nash and Samuel Tamposi, the unpaid water, sewer, and fire protection fees charged to McConnell Plastics, Inc., the tenant who occupied premises owned by the defendants.

Beginning in or about March of 1979, the City of Portsmouth supplied water, sewer, and fire protection service to McConnell. All bills for these services were forwarded every four months directly to McConnell and not to the defendants.

As of July 21, 1981, McConnell owed the City of Portsmouth $9,134.43 for the four-month period immediately preceding, made up of the following:

1. Sewer fee— $ 5,472.00

2. Water fee— 3,503.44

3. Fire services— 91.96

4. Arrears— 65.07

5. Penalty— 1.96

Total $ 9,134.43

Although McConnell did not pay this amount within thirty days as it was required to do, the city did not contact or correspond with McConnell regarding the unpaid balance. Nor did it give any notice to the property owners that their tenant had fallen behind in its water and sewer payments.

On or after October 2, 1981, the City of Portsmouth Water [466]*466Department received notice that McConnell had filed for bankruptcy. The city had, as of that date, received no payment on the July 21,1981, bill.

Although it continued to supply services, receipt of the notice of McConnell’s bankruptcy filing prompted the water department to close the McConnell account and open a new account in the name of the bankrupt. A three-month’s bill dated October 30, 1981, contained water and sewer charges totaling $7,816.82. Because the city had created a separate account for McConnell following the bankruptcy filing, the bill was prorated two-thirds to the old account and one-third to the new. Billings thereafter for service to McConnell were on a monthly basis and were posted to the new account. As of December 31, 1981, the total due for service to McConnell in both accounts for water, sewer and fire service was $23,574.17. Monthly charges were also made for January, February, March and April of 1982.

The city made no attempt to contact the trustee in bankruptcy regarding a payment schedule until approximately January 13, 1982. At that time, the trustee agreed to pay $741.70 per week to be applied to the first amounts due after the filing for bankruptcy. These payments continued for three weeks, with reduced payments being made sporadically for a short time thereafter.

By letter of January 8, 1982, the city’s water department notified the defendants for the first time of the arrearages of McConnell and the defendants’ possible liability therefor. The letter informed the defendants that McConnell’s total outstanding balance was $9,134.43, and cited RSA 38:22, which provides “[a]ll charges ... for gas, water, or electricity . . . shall become a lien upon any real estate where such ... is furnished ... .” The lien created by this statute is in'effect for one year after the last charges made. Of the $9,134.43 arrearage specified in the letter, $3,503.44 was for water.

The letter from the water department was followed on February 26, 1982, by a second letter from David R. Connell, city attorney representing the water department, requesting payment by the defendants of $9,134.43. Again, only RSA 38:22 was cited as the basis for the defendants’ liability for the unpaid utility bills of their tenant.

On March 2, 1982, the plaintiff brought suit for $9,134.43, claiming in count I the amount of $3,595.40 for water pursuant to RSA 38:22 and in count II the sum of $5,472.00 for sewer services pursuant to RSA chapter 252 (recodified at RSA 149-1:11 (Supp. 1983)) and Laws 1941, chapter 168.

The city continued to supply utility services to McConnell until April 14, 1982. On April 15, 1982, the defendants sold the premises [467]*467to First Phillips Corporation and agreed to indemnify First Phillips for any liability that might accrue to it as a result of the unpaid utility charges.

On November 18, 1982, the city filed a claim with the bankruptcy court as a priority creditor of McConnell, claiming $24,139.14 for unpaid water, sewer and fire protection services. The city did not collect on this claim since McConnell had no assets. On February 8, 1983, the plaintiff moved to amend its original complaint against the defendants by changing the amount owed from $9,134.43 to $24,239.19, which represented the total amount claimed due for water, sewer and fire services to McConnell both prior and subsequent to the declaration of bankruptcy on October 2, 1981. This amendment was the first indication that the plaintiff gave the defendants of any liability over the $9,134.43 set forth in the city’s letters to the defendants and in the original complaint. The motion to amend listed as statutory authority RSA 38:22, which addresses water, but not sewer, charges. On April 19, 1983, the plaintiff filed another motion to amend the declaration to allege a claim for sewer charges under RSA chapter 252 and Laws 1941, chapter 168.

The Superior Court (Nadeau, J.) held that the City of Portsmouth was entitled to enforce its lien against the defendants for sewer charges in the same manner as for water, and that all accrued charges for water and sewer services used by McConnell, both prior to and after its filing for bankruptcy, were chargeable to the defendant building owners up to the date of the January 8,1982, letter first notifying the defendants of any outstanding charges. The court then entered judgment for the city in the amount of $23,574.17.

On appeal, the defendants claim that the extent of their liability is $3,503.44. As the basis for their claim, they state that the only notices to them, by the city, of their possible liability — the letters of January and February 1982, and the complaint filed on March 2, 1982 — stated that the defendants owed the city $9,134.43, the total amount owed by McConnell to the city for services provided up to July 1, 1981. By setting forth only this amount, and by filing as a priority creditor with the bankruptcy court, the defendants claim that the city waived its lien and any right it might have had to an amount above $9,134.43.

The defendants further contend that they are not liable for the full $9,134.43, but only for the water fee portion, $3,503.44, because the letters to them from the city cited only RSA 38:22 as authority for charging a landlord for unpaid utility services supplied to a tenant. This statute deals with liens for water charges. Liens for sewer charges in Portsmouth are created by authority of Laws 1941, chapter 168. Since this statute has a specific notice provision, which the [468]*468defendants argue was not complied with, they reason that they may be held accountable only for those charges for which they did receive notice, the water charges, and not for the sewer charges. We agree in part with the defendants.

Assuming, arguendo, that the city had a right to collect from the defendants all unpaid utility charges owed by their tenant, we agree with the defendants that the city has waived whatever rights it had to collect more than $9,134.43, the amount which had been billed at the time McConnell filed for bankruptcy.

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Bluebook (online)
493 A.2d 1163, 126 N.H. 464, 1985 N.H. LEXIS 304, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-portsmouth-v-nash-nh-1985.