1 Plaintiffs seek a declaratory judgment that they have not

defaulted on their leases and are entitled to extend them (Count

I), and assert claims of breach of contract (Counts II & III),

tortious interference with business relations (Count IV), and

violation of RSA ch. 354-A (Count V).

2 Defendants assert claims of breach of contract (Counts I &

II), breach of the implied covenant of good faith and fair

dealing (Count III), violation of RSA ch. 354-A (Count IV),

unjust enrichment (Count V), and failure to vacate, in violation

of Wisconsin statutory law (Count VI).

UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Lakeview Neurorehabilitation

Center, Inc.; Lakeview

Neurorehab Center Midwest, Inc.;

and Lakeview Management, Inc.,

Plaintiffs

v. Civil No. 07-cv-303-SM

Opinion No. 2008 DNH 111

Care Realty, LLC; and

THCI Company, LLC,

Defendants

O R D E R

This suit was removed from the New Hampshire Superior Court. 

It arises out of plaintiffs’ unsuccessful attempt to extend the

terms of leases on medical facilities in New Hampshire and

Wisconsin. Plaintiffs, lessees, assert five claims against

defendants, lessors1. The lessors, in turn, have counterclaimed

in six counts2. Before the court are defendants’ motion to

dismiss for lack of personal jurisdiction (document no. 14);

Case 1:07-cv-00303-SM Document 83 Filed 05/28/08 Page 1 of 18
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defendants’ motion to dissolve or modify a preliminary injunction

previously issued by the New Hampshire Superior Court (document

no. 15); and plaintiffs’ motion to clarify or modify that

preliminary injunction (document no. 7).

Background

Plaintiff Lakeview Management, Inc. (“LMI”) owns and

operates Lakeview Neurorehabilitation Center, Inc. (“LNC”) and

Lakeview Neurorehab Center Midwest (“LNC-M”). LNC, in turn,

operates a rehabilitation center in Effingham Falls, New

Hampshire, while LNC-M operates a rehabilitation center in

Waterford, Wisconsin. Both facilities are leased from defendants

Care Realty, LLC (“Care”) and THCI Company, LLC (“THCI”). 

Defendants acknowledge that, “[w]hile the leases [for the New

Hampshire and Wisconsin facilities] involve different properties,

different states, differen[t] contracting parties, they are

linked, both in their default and extension terms: A default

under one lease constitutes a default under the other, and one

cannot be extended without the simultaneous extension of the

other.” (Defs.’ Obj. to Pls.’ Mot. to Clarify (document no. 12)

at 3.) 

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On September 4, 2007, in the New Hampshire Superior Court,

LMI and LNC filed an application for an ex parte temporary

restraining order (“TRO”) against Care and THCI (document no. 11-

5 (N.H. Super. Ct. R.) at 11-14) along with a petition for

preliminary and permanent injunctive relief, declaratory relief,

and damages (id. at 15-26). Both requests for relief arose from

LMI’s and LNC’s unsuccessful attempt to extend the lease on the

New Hampshire facility. Care and THCI each filed general

appearances in the state litigation. The superior court issued

the requested TRO, after finding that “irreparable harm will

occur for which there is no adequate remedy at law and that

Petitioners have a reasonable likelihood of success on the

merits.” (Document no. 11-5 at 9.) Specifically, the superior

court ordered: “Respondents shall not take any action that

interferes with Petitioners’ rights to operate the facility at

244 Highwatch Road, Effingham Falls, New Hampshire. Respondents

shall not communicate to any third parties that Petitioners will

not be operating the facility or will be relinquishing their

licenses to operate same.” (Id.)

In response, defendants filed an emergency motion for

clarification and/or modification of the TRO. (Document no. 11-4

at 29-36.) In their motion, defendants noted:

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Lakeview broadly interprets the TRO as preventing

THCI from communicating with any regulatory authority –

including regulators in the State of Wisconsin

regarding a similar Center operated by Lakeview under a

similar lease with THCI there – including THCI’s

efforts to apply for and obtain licenses necessary to

operate either the New Hampshire or Wisconsin Centers.

(Id. at 33.) The motion also included a proposed order which

would authorize defendants to make any communications necessary

to proceed with licensing procedures in New Hampshire and

Wisconsin, and, direct plaintiffs to provide defendants with

information pertaining to both the New Hampshire and Wisconsin

facilities. (Id. at 28; document no. 11-5 at 2-3.) The trial

court denied defendants’ motion, at least implicitly lending

support to the claim that the TRO did not permit defendants to

communicate with Wisconsin regulators. (Document no. 11-3 at

41.)

On September 13, 2007, after a hearing, the superior court

issued an order on plaintiffs’ request for a preliminary

injunction in which it ruled that “[t]he temporary order

previously issued by the court [would remain] in full force and

effect pending further order of the Court.” The court required

plaintiffs to post a bond in the amount of $500,000, “to insure

that any damages sustained by [defendants] if [they] ultimately

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prevail[ ] will be paid.” Plaintiffs’ suit was then removed to

this court. 

Shortly after plaintiffs filed suit in the New Hampshire

Superior Court, they filed a similar suit in the Circuit Court of

Racine County, Wisconsin. That court also granted a TRO. 

(Document no. 11-3 at 39-40.) Then, plaintiffs moved the

Wisconsin court to stay its proceedings, pursuant to a Wisconsin

statute that allows its courts to stay actions that “should as a

matter of substantial justice be tried in a forum outside [that]

state.” (Document no. 7-3 (Wisc. Hearing Tr.) at 29.) After

determining, among other things, that personal jurisdiction over

defendants had already been established in New Hampshire, the

Wisconsin trial court granted “the motion . . . for stay for

trial of the [Wisconsin] cause in New Hampshire” (document no. 7-

3 at 41). The Wisconsin court further ruled:

[T]he temporary restraining order previously entered by

this Court is continued on the condition first of all

that the plaintiffs file their amended pleadings

including the motion for a temporary injunction

relating to the Wisconsin matter. That that be filed

in New Hampshire within 14 days from today. As long as

that filing is made including the motion for a

temporary injunction this Court’s temporary restraining

order would be continued until the hearing date on the

motion for temporary injunction in the state of New

Hampshire. Once that hearing date comes then the

determination of whether an injunction should or should

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not be continued or issued here will be up to the court

that is hearing the litigation.

(Id.) In so ruling, the Wisconsin court identified a number of

factors militating in favor of trying the New Hampshire and

Wisconsin claims together, including a risk of inconsistent

results. (See id. at 35-38, 40.) It does not appear that

defendants appealed the Wisconsin court’s order, and it is

presumed to be final as to that case.

After defendants removed the superior court action to this

court, plaintiffs filed a second amended verified complaint

(document no. 6), which listed LNC-M as a plaintiff along with

LMI and LNC, and which included factual allegations and claims

for relief involving both the New Hampshire and Wisconsin

facilities. At the same time, plaintiffs filed the motion to

clarify or modify the preliminary injunction currently before the

court. Defendants filed an objection to plaintiffs’ motion to

clarify; an answer to the second amended verified complaint

(document no. 13); and the motion to dismiss for lack of personal

jurisdiction currently before this court. In their answer,

defendants objected to “this Court’s exercise of personal

jurisdiction for the claims arising out of the Wisconsin Amended

Lease or related to the operation of the rehabilitation facility

Case 1:07-cv-00303-SM Document 83 Filed 05/28/08 Page 6 of 18
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in Waterford, Wisconsin.” (Answer ¶ 4; see also id. ¶¶ 5, 7.) 

However, defendants also asserted six counterclaims, no fewer

than four of which were based, at least in part, on the Wisconsin

lease. (Answer ¶¶ 77-87, 95-106.)

Document No. 14

Defendants move to dismiss, arguing that “this Court lacks

personal jurisdiction over Defendants Care [ ] and THCI [ ] with

respect to the claims arising out of the Wisconsin lease, whether

general or specific.” Plaintiffs counter that defendants have

waived any objection to personal jurisdiction in a variety of

ways and that, even absent waiver, this court may properly

exercise personal jurisdiction over defendants to adjudicate

claims arising out of the Wisconsin lease.

Plaintiffs say defendants waived any objection to personal

jurisdiction by filing a general appearance in the New Hampshire

Superior Court, rather than a special appearance limited to

contesting personal jurisdiction; by requesting relief from the

New Hampshire Superior Court pertaining to both the New Hampshire

and Wisconsin facilities; and by failing to object to personal

jurisdiction in their October 15, 2007, answer to the first

amended complaint, which was their first responsive pleading in

Case 1:07-cv-00303-SM Document 83 Filed 05/28/08 Page 7 of 18
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this court after removal. Defendants counter that all of the

acts upon which plaintiffs rely in asserting waiver took place

before LNC-M and its Wisconsin claims became part of this case

and cannot, therefore, constitute waiver of an objection they had

no cause to assert.

Plaintiffs’ contention that defendants waived any objection

to personal jurisdiction is well taken. While the proffered

arguments for and against waiver based upon the timing of

defendants assertion of a lack of personal jurisdiction stand in

rough equipoise, plaintiffs’ remaining argument – that defendants

waived objection to personal jurisdiction by affirmatively

seeking relief related to the Wisconsin lease – is persuasive. 

In their emergency motion for clarification or modification

of the TRO (document no. 11-4 at 29-36), defendants asked the

superior court to order “immediate compliance [by plaintiffs]

with the information request served upon them by [defendants] by

letter dated August 27, 2007.” Id. at 28. The referenced

letter, in turn, requested information pertaining to both the New

Hampshire facility and the Wisconsin facility. Id. at 550-53. 

By requesting affirmative relief related to the Wisconsin lease,

defendants submitted themselves to the jurisdiction of New

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Hampshire’s courts, thereby waiving any objection to personal

jurisdiction they might have had. See Druding v. Allen, 122 N.H.

823, 826-27 (1982) (holding that defendant who “filed various

pleadings with the court, including requests for substantive

findings and rulings,” waived his objection to personal

jurisdiction). Moreover, “[w]here a defendant has waived his

right under state law to contest jurisdiction, he is barred from

asserting a defense of personal jurisdiction in federal court.” 

S.M.W. Seiko, Inc. v. Howard Concrete Plumping Co., 170 F. Supp.

2d 152, 156 (D.N.H. 2001) (citing Nationwide Eng’g & Control

Sys., Inc. v. Thomas, 837 F.2d 345, 348 (8th Cir. 1988); Hakemy

v. Jackson, No. Civ.A 301CV0272P, 2001 WL 492378, at *1-2 (N.D.

Tex. May 4, 2001); Haedike v. Kodiak Research, Ltd., 814 F. Supp.

679, 681-82 (N.D. Ill. 1992); Delloma v. Consol. Coal Co., No.

90-4096-JLF, 1992 WL 510617, at *1-2 (S.D. Ill. Apr. 3, 1992)).

Not only did defendants seek affirmative relief from the

superior court pertaining to the Wisconsin lease, they also

argued that, to be entitled to a preliminary injunction relating

to their New Hampshire claims, plaintiffs had to demonstrate a

likelihood of success on the merits of their Wisconsin claims:

Lakeview also leases a health care facility from

THCI in Wisconsin. Simultaneous with this action,

Lakeview brought suit in Wisconsin to enjoin THCI from

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assuming control of that facility as well. The reason

for Lakeview’s Wisconsin action . . . is because

Lakeview’s right to extend the Lease here is

inextricably tied to its right to extend the lease of

the Wisconsin facility. On this point, the Lease

provides:

Lessee’s rights to exercise the options to extend

granted in this Section 1.4 are subject to the

further condition that concurrently with the

exercise of any extension option hereunder, the

Lessee shall have exercised its option to extend

the terms of all of the Related Leases.

Lakeview’s lease of the Wisconsin facility is a

“Related Lease” to the Lease here. Furthermore, the

parties expressly agreed that if Lakeview is in Lease

Default under any one of the Related Leases (e.g., the

Wisconsin facility lease), it is automatically in Lease

Default under all other Related Leases, including the

Lease for the [New Hampshire] Center.

When these provisions are read together,

therefore, Lakeview’s right to extend the Lease for the

[New Hampshire] Center depends upon Lakeview not being

in Lease Default at the Wisconsin facility. . . . For

Lakeview to prevail on its request for an injunction in

this action, it must demonstrate a likelihood of

success on the merits of its Wisconsin action, i.e.,

that it is entitled to extend the Wisconsin lease and

that it is not in Lease Default. Without such a

showing, Lakeview cannot demonstrate a right to extend

the Lease here and, therefore, cannot demonstrate a

likelihood of success on the merits of its claims in

this action.

(Document no. 10-1 (N.H. Super. Ct. R.) at 27-28 (citations to

the record omitted); see also document no. 7-2 (N.H. Super. Ct.

Tr.) at 50-51.) 

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Under defendants’ own characterization of the New Hampshire

lease, resolution of plaintiffs’ claims in this case, as

originally filed, required construction of the Wisconsin lease

and plaintiffs’ compliance with its terms. Thus, the essential

premise of defendants’ motion to dismiss, i.e., that claims

arising out of the Wisconsin lease are entirely distinct from

claims arising out of the New Hampshire lease, is undermined by

their argument that the New Hampshire claims cannot be fully

adjudicated absent determination of plaintiffs’ compliance with

the terms of the related Wisconsin lease. Given the integrated

nature of the two leases, specific jurisdiction extends to

adjudication of issues arising out of the related Wisconsin

lease. The two leases are, in several material respects

pertinent to this litigation, effectively one.

Defendants’ motion to dismiss for lack of personal

jurisdiction (document no. 14) is denied.

Document No. 15

Defendants move to dissolve and/or modify the preliminary

injunction issued by the New Hampshire Superior Court. They

argue that the superior court failed to make the findings

necessary under New Hampshire law to support issuance of a

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preliminary injunction, and that the injunction the court issued

was overbroad because it failed “to address the Plaintiffs’ ongoing obligations in their possession and operation of the

rehabilitation center, including their obligation to perform

fully and consistently with the terms of the lease and related

transactional documents.” Plaintiffs counter that defendants’

motion is, in reality, an untimely and unfounded request for this

court to consider the same facts and arguments that were before

the superior court when it issued its injunction, that defendants

have demonstrated no change in circumstances that would justify

dissolution or modification of the injunction, and that

defendants’ arguments are without merit.

When an action is removed from a state court, “[a]ll

injunctions, orders, and other proceedings had in such action

prior to its removal shall remain in full force and effect until

dissolved or modified by the district court.” 28 U.S.C. § 1450. 

The court of appeals for this circuit observed that:

. . . we think it evident that in the ordinary

case dissolution [of a preliminary injunction] should

depend on the same considerations that guide a judge in

deciding whether to grant or deny a preliminary

injunction in the first place. The familiar quartet

includes likelihood of success, the threat of

irreparable injury to the party seeking interim relief,

the equities and the public interest.

Case 1:07-cv-00303-SM Document 83 Filed 05/28/08 Page 12 of 18
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Knapp Shoes, Inc. v. Sylvania Shoe Mfg. Corp., 15 F.3d 1222, 1225

(1st Cir. 1994) (citing Teradyne, Inc. v. Mostek Corp., 797 F.2d

43, 51 (1st Cir. 1986); Planned Parenthood League of Mass. v.

Bellotti, 641 F.2d 1006, 1009 (1st Cir. 1981)). The court went

on to hold that “[a] decision to vacate an existing preliminary

injunction is . . . the effective equivalent of a denial of a

preliminary injunction, an event that unquestionably triggers

Rule 52(a)’s requirement of [fact] findings.” Id. at 1228. 

As a general rule, a party seeking to dissolve or modify a

preliminary injunction must provide evidence of a change in

circumstances. As the Ninth Circuit explained, “[a] district

court has inherent authority to modify a preliminary injunction

in consideration of new facts.” A&M Records, Inc. v. Napster,

Inc., 284 F.3d 1091, 1098 (9th Cir. 2002) (citing Sys. Fed’n No.

91, Ry. Employees’ Dep’t v. Wright, 364 U.S. 642, 647-48 (1961);

Tanner Motor Livery, Ltd. v. Avis, Inc., 316 F.2d 804, 810 (9th

Cir. 1963)). “[I]n modifying a preliminary injunction, a

district court is not bound by a strict standard of changed

circumstances but is authorized to make any changes in the

injunction that are equitable in light of subsequent changes in

the facts or the law, or for any other good reason.” Loudner v.

United States, 200 F. Supp. 2d 1146, 1148 (D.S.D. 2002) (quoting

Case 1:07-cv-00303-SM Document 83 Filed 05/28/08 Page 13 of 18
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Movie Sys., Inc. v. MAD Minneapolis Audio Distribs., 717 F.2d

427, 430 (8th Cir. 1983)).

Here, defendants do not point to substantial changes in

circumstances, or any other good reason for dissolving or

modifying the preliminary injunction. Their primary argument for

dissolution — that the superior court failed to make necessary

findings in its September 13 order — is unavailing in light of

the September 4 order, in which the court determined that

“irreparable harm will occur for which there is no adequate

remedy at law and that the Petitioners have a reasonable

likelihood of success on the merits.” Taken together, the orders

of September 4 and September 13 provide a sufficient factual and

legal basis for the injunction. 

Defendants’ argument for modification is similarly

unavailing. The modifications they seek do not involve lifting

any of the restraints imposed but, rather, involve placement of

various restrictions on plaintiffs – relief defendants expressly

requested from the superior court (Super. Ct. Tr. at 48), but

were denied. Absent a change in circumstances, or a persuasive

argument that the superior court ruled erroneously, or a

demonstration that money damages on defendants’ counterclaims are

Case 1:07-cv-00303-SM Document 83 Filed 05/28/08 Page 14 of 18
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insufficient to remedy any harm that might flow from the conduct

they seek to enjoin – which is not asserted here – there is no

cause to modify the preliminary injunction currently in force. 

Accordingly, defendants’ motion to dissolve or modify the

preliminary injunction is denied.

Document No. 7

In document no. 7, plaintiffs move the court for an order

that:

(1) clarif[ies] that the preliminary injunction issued

by the Carroll County Superior Court in this action on

September 13, 2007, prior to its removal to this Court

by Defendants, applies to enjoin any conduct by

Defendants in New Hampshire or Wisconsin which would

interfere with the licensing or operation of

Plaintiffs’ rehabilitation facilities in New Hampshire

or Wisconsin or (2) modif[ies] the injunction so that

it expressly restricts Defendants’ activities in

Wisconsin.

(Pls.’ Mot. to Clarify at 1.) Defendants object, arguing that

plaintiffs failed to abide by the Wisconsin court order, which

directed them to file a motion for a preliminary injunction in

the New Hampshire court, and that they did so intentionally,

because they cannot satisfy the preliminary injunction standard. 

In addition, defendants argue that if the injunction is construed

or modified to cover the Wisconsin facility, plaintiffs should be

required to double the bond amount set by the superior court

Case 1:07-cv-00303-SM Document 83 Filed 05/28/08 Page 15 of 18
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(from $500,000 to $1,000,000). Plaintiffs counter that based

upon the terms of the lease, under which they made a single

monthly rent payment for both facilities, the existing bond

already secures holdover rent for the Wisconsin facility.

As a preliminary matter, plaintiffs’ motion to clarify or

modify the existing preliminary injunction is an appropriate

vehicle for executing the directive of the Wisconsin court, which

ordered plaintiffs to move for a preliminary injunction in New

Hampshire. That said, plaintiffs are entitled to the relief they

seek, either as a clarification or a modification.

Given the arguments before the superior court, both in

pleadings and at the September 12 hearing, it is evident that the

court was aware of the existence of the Wisconsin facility and

the integration of the leases for the facilities in Wisconsin and

New Hampshire. The September 13 injunction was intended to cover

actions in New Hampshire or Wisconsin that could interfere with

plaintiffs’ right to operate the facilities in either New

Hampshire or Wisconsin. Given the integrated leases,

communication to a Wisconsin regulator that plaintiffs were

relinquishing their licenses to operate the Wisconsin facility

would, necessarily, convey that plaintiffs also intended to give

Case 1:07-cv-00303-SM Document 83 Filed 05/28/08 Page 16 of 18
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up operation of the New Hampshire facility. However, even if the

September 13 injunction is not construed to cover conduct in

Wisconsin, or conduct related to licensing or operation of the

Wisconsin facility, the addition of the Wisconsin plaintiff to

this action, following the order of the Wisconsin court and

removal to this court, was a change in circumstances justifying

modification of the injunction. Either way, plaintiffs are

entitled to the relief they seek in document no. 7.

Defendants, however, are not entitled to an increase in the

bond amount. It is plain that the monthly rental income relied

upon by defendants in seeking a bond was the amount plaintiffs

paid for both the Wisconsin and New Hampshire facilities. Pls.’

Obj. to Defs.’ Mot to Dismiss (document no. 19), Ex. A (McDermott

Aff.) ¶ 8; Ex. B, at 2. Thus, the bond required by the superior

court in its September 13 order took into account rent paid for

the Wisconsin facility. Accordingly, the bond amount requires no

modification.

Conclusion

For the reasons given, defendants’ motion to dismiss

(document no. 14) is denied, defendants’ motion to dissolve or

modify the preliminary injunction (document no. 15) is denied,

Case 1:07-cv-00303-SM Document 83 Filed 05/28/08 Page 17 of 18
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and plaintiffs’ motion to clarify or modify the permanent

injunction (document no. 7) is granted.

SO ORDERED.

____________________________

Steven J. McAuliffe

Chief Judge

May 28, 2008

cc: Christopher H. M. Carter, Esq.

Daniel M. Deschenes, Esq.

Ovide M. Lamontagne, Esq.

Jonathan M. Shirley, Esq.

Leigh S. Willey, Esq.

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