Opinion ID: 2303040
Heading Depth: 1
Heading Rank: 1

Heading: The Department's Appeal

Text: The Department first argues that the petitioners should not have been permitted to bypass the statutory administrative procedures by seeking a preliminary and permanent injunction in the superior court. The Department maintains that under the doctrine of primary jurisdiction, the trial court should have abstained from intervening and required the petitioners to exhaust their administrative remedies. Conversely, the petitioners maintain that the trial court properly exercised its authority to grant both a preliminary and permanent injunction because the Department lacks subject matter jurisdiction under RSA chapter 397-A to regulate the LLCs. Specifically, they argue that because resolution of this issue requires statutory interpretation, and the superior court has authority to issue declaratory findings on issues of law, the trial court did not err. The doctrine of primary jurisdiction provides that a court will refrain from exercising its concurrent jurisdiction to decide a question until it has first been decided by the specialized administrative agency that also has jurisdiction to decide it. Wisniewski v. Gemmill, 123 N.H. 701, 706, 465 A.2d 875 (1983). [The doctrine] is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties. It applies to claims that contain some issue within the special competence of an administrative agency. Thus, under the primary jurisdiction doctrine, courts, even though they could decide, will in fact not decide a controversy involving a question within the jurisdiction of an administrative tribunal until after that tribunal has rendered its decision. 2 Am.Jur.2d Administrative Law § 480, at 407 (2004). Where[, however,] the issue or issues ... involve purely questions of law, the matter will not be referred to an agency. 73 C.J.S. Public Administrative Law and Procedure § 77, at 270 (2004). Because the decision to refrain from exercising its jurisdiction rests in the sound discretion of the trial judge, Dolan v. Utica Mut. Ins. Co., 630 F.Supp. 305, 308 (D.Mass.1986), we review the court's decision under an unsustainable exercise of discretion standard. See Baykeeper v. NL Industries, Inc., 660 F.3d 686, 690 (3d Cir.2011) (We review a district court's decision to abstain on primary jurisdiction grounds ... for abuse of discretion.); GCB Communications v. U.S. South Communications, 650 F.3d 1257, 1262 (9th Cir. 2011) (We review a district court's denial of a request to refer a case to an agency under the primary jurisdiction doctrine for abuse of discretion.); TON Services, Inc. v. Qwest Corp., 493 F.3d 1225, 1239 (10th Cir.2007) (This court applies an abuse of discretion standard to the district court's decisions to invoke the primary jurisdiction doctrine and to either stay or dismiss the action without prejudice.); see also State v. Lambert, 147 N.H. 295, 296, 787 A.2d 175 (2001). In Wisniewski, the defendants diverted the flow of a river abutting the plaintiffs' property and theirs without prior authorization by the New Hampshire Water Resources Board. Wisniewski, 123 N.H. at 704, 465 A.2d 875. Upon learning of the defendants' actions, the board ordered them to return the river to its original flow and restore the affected area. Id. Later, however, the board voted to reconsider its order and deferred further action on the issue until the defendants submitted a permit application and detailed plans for the diversion of the river. Id. No plan was ever submitted, but the board took no further action. Id. The plaintiffs brought an action in superior court for damages caused by the river's diversion. Id. The defendants moved to dismiss the plaintiffs' claim, arguing the trial court lacked jurisdiction over the action because the board had exclusive jurisdiction over matters involving state waters. Id. at 705, 465 A.2d 875. The superior court granted the defendants' motion, and the plaintiffs appealed. Id. On appeal, we reversed, concluding that the legislature, in enacting RSA chapter 483-A, did not intend to vest exclusive jurisdiction over state waters in the board and to eliminate the common law right of a property owner to bring an action for a violation of its riparian rights when the board has not authorized the filling or dredging in state waters. Id. Moreover, we rejected the defendants' alternative argument that the trial court's order should have been affirmed under the doctrine of primary jurisdiction. Id. at 706, 465 A.2d 875. We concluded that the doctrine was inapplicable ... because RSA chapter 483-A granted the water resources board no jurisdiction over disputes between private parties involving an infringement of riparian rights when the filling and dredging was not given prior authorization by the board. Id. Similarly, if RSA chapter 397-A does not grant the Department jurisdiction over the two transactions at issue here, there is no need for the court to await the outcome of the Department's administrative proceedings centered on these transactions. See 5 G.J. MacDonald, Wiebusch on New Hampshire Civil Practice and Procedure, § 62.04, at 62-4, 62-5 (noting agencies' powers come solely and directly from the statutes that create them or give them authority and from the necessary implications of those statutes). Because a determination of the Department's jurisdiction requires statutory analysis, the trial court could properly resolve this legal issue. See 73 C.J.S., supra § 77, at 270 (noting no referral to agency where agency lacks jurisdiction over the matter). While the dissent apparently acknowledges that the doctrine of primary jurisdiction is discretionary, it nevertheless maintains that in circumstances such as those here, where agency action is pending, the trial court's discretion is limited. We do not agree that such limitation is warranted here. We conclude, therefore, that the trial court's decision not to refrain from exercising its jurisdiction did not constitute an unsustainable exercise of that discretion. We note that our decision here does not alter our law regarding exhaustion of administrative remedies. Whenever a statute provides a procedure for appeal or review of an administrative agency's decision, that procedure is exclusive and must be followed. See Nashua v. Public Utilities Commission, 101 N.H. 503, 506-07, 148 A.2d 277 (1959); 2 Am. Jur.2d. Administrative Law § 475, at 403 (2004) ([W]here a statute requires exhaustion of administrative remedies a court has no jurisdiction to review an interlocutory order and the exhaustion requirement is not a matter for the court's discretion.). Thus, before an agency decision may be reviewed, administrative remedies typically must be exhausted. See Konefal v. Hollis/Brookline Coop. School Dist., 143 N.H. 256, 258, 723 A.2d 30 (1998) (requiring plaintiff to exhaust her administrative remedies before the PELRB where her claims required resolution of disputed fact, and were therefore exclusively within administrative discretion). For example, RSA 397-A:7 provides that an applicant who is denied a mortgage lending license by the banking commissioner may appeal the decision in accordance with RSA chapter 541. See RSA 541:22 (2007) (No proceeding other than the appeal herein provided for shall be maintained in any court of this state to set aside, enjoin the enforcement of, or otherwise review or impeach any order of the [agency], except as otherwise specifically provided.). Thus, under this section, a petitioner must exhaust administrative remedies before seeking judicial review. 5 G.J. MacDonald, supra § 62.28, at 62-28 (When review under RSA chapter 541 is authorized, it is the exclusive means of challenging an agency's decision.). By contrast, RSA 397-A:17 (mortgage license revocation and suspension) does not set forth a similar review procedure. Rather, this section simply outlines the procedural steps in the revocation or suspension process. Accordingly, there is no exclusive review process that Frost was required to exhaust. Assuming, however, that RSA 397-A:17 implies exclusive administrative review remedies, here, exhaustion is not required. We have recognized that the exhaustion of administrative remedies doctrine is flexible, and that exhaustion is not required under certain circumstances. Konefal, 143 N.H. at 258, 723 A.2d 30; see Metzger v. Brentwood, 115 N.H. 287, 290, 343 A.2d 24 (1975). For example, in Pheasant Lane Realty Trust v. City of Nashua, 143 N.H. 140, 720 A.2d 73 (1998), we explained that [a] party is not required to exhaust administrative remedies where the issue on appeal is a question of law rather than a question of the exercise of administrative discretion. Pheasant Lane Realty Trust, 143 N.H. at 141-42, 720 A.2d 73 (quotation omitted); see also Bedford Residents Group v. Town of Bedford, 130 N.H. 632, 639, 547 A.2d 225 (1988) (where the issue is a question of law, such as the interpretation of a statute, exhaustion is not necessarily required). Thus, here, where an issue of law is dispositive, the trial court sustainably exercised its discretion to maintain jurisdiction. Next, the Department contends that the trial court erred in enjoining its administrative proceedings against Frost. Specifically, the Department challenges the trial court's interpretation of RSA chapter 397-A. In reaching its decision to exercise its equitable powers to grant temporary relief, the trial court concluded that the petitioners demonstrated a likelihood of success on the merits. The trial court reasoned that since none of the petitioners could be said to be in the business of making or brokering mortgage loans, by virtue of a single isolated transaction, RSA chapter 397-A was inapplicable. In addition, the trial court found that without an injunction, the petitioners had no adequate remedy at law and would suffer irreparable harm. We will uphold the issuance of an injunction absent an error of law, an unsustainable exercise of discretion, or clearly erroneous findings of fact. N.H. Dep't of Envtl. Servs. v. Mottolo, 155 N.H. 57, 63, 917 A.2d 1277 (2007). The Department argues that the trial court misinterpreted RSA chapter 397-A. The Department maintains that the chapter applies to all residential mortgage transactions that are not specifically exempt under RSA 397-A:4 (exempting certain classes of persons from licensing requirements). It argues that mortgage loans executed by the LLCs were not exempt because those companies were not... `natural person[s],' so licensure was required. See RSA 397-A:4, II (exempting [a]ny natural person making not more than 4 first mortgage loans within any calendar year with the person's own funds and for the person's own investment without an intent to resell such mortgage loans). We review the trial court's statutory interpretation de novo. Fog Motorsports #3 v. Arctic Cat Sales, 159 N.H. 266, 267, 982 A.2d 963 (2009). We are the final arbiter of the intent of the legislature as expressed in the words of the statute considered as a whole. Kenison v. Dubois, 152 N.H. 448, 451, 879 A.2d 1161 (2005). When examining the language of the statute, we ascribe the plain and ordinary meaning to the words used. Fog Motorsports #3, 159 N.H. at 268, 982 A.2d 963. We interpret legislative intent from the statute as written and will not consider what the legislature might have said or add language that the legislature did not see fit to include. Id. We also interpret a statute in the context of the overall statutory scheme and not in isolation. Id. RSA 397-A:2 provides in pertinent part that: This chapter shall provide for the department's regulation of persons that engage in the business of making or brokering mortgage loans secured by real property located in the state of New Hampshire, which is or shall be occupied in whole or in part as a place of residence by the borrower and which consists of not more than 4 living units. RSA 397-A:2, I (emphasis added). Thus, by its plain and unambiguous language, the statute grants the Department jurisdiction only over persons that engage in the business of making or brokering mortgage loans. The qualification that a person be a natural person relates not to this jurisdictional predicate, but rather to the exemption set forth in RSA 397-A:4, II. Because our analysis focuses on the scope of the Department's subject matter jurisdiction under RSA chapter 397-A, we need not consider, as the dissent suggests, the exemptions delineated in RSA 397-A:4. The question, then, is whether either of the LLCs was a person engage[d] in the business of making or brokering mortgage loans by virtue of a single isolated transaction, thereby subjecting Frost, as its agent, to the Department's administrative proceedings. We agree with the trial court's conclusion that the LLCs were not engaged in the business of making mortgage loans. The statute does not define the phrase engage in the business. Generally, however, business is defined as transactions, dealings, or intercourse of any nature. Webster's Third New International Dictionary 302 (unabridged ed. 2002) (defining business); see also Black's Law Dictionary 226 (9th ed. 2009) (defining business as [a] commercial enterprise carried on for profit; a particular occupation or employment habitually engaged in for livelihood or gain (emphasis added)). Thus, to engage in the business implies multiple transactions or dealings, rather than a single incident. Our case law supports the contention that a single mortgage lending transaction does not constitute being in the business of making mortgage loans. In Green Meadows Mobile Homes v. City of Concord, 156 N.H. 394, 397, 934 A.2d 586 (2007), we held that the petitioners were not dealer[s] because while the petitioners on occasion [sold] manufactured housing units, they [were] not in the business of selling such units, but rather [were] in the business of owning and managing manufactured housing parks. Id. (quotations and brackets omitted). Similarly, in Hughes v. DiSalvo, 143 N.H. 576, 578, 729 A.2d 422 (1999), we concluded that the plaintiff, who rented and attempted to sell her real property through a lease and sales agreement, did not violate the Consumer Protection Act because remedies under the Act are not available when the subject transaction is strictly private in nature, and not undertaken in the ordinary course of a trade or business. Thus the plaintiff's involvement in a single transaction was insufficient to constitute engagement in trade or commerce. Id. at 578-79, 729 A.2d 422 (The plaintiff was not a real estate professional engaged in the business of renting or selling properties.); cf. Currier v. Tuck, 112 N.H. 10, 12, 287 A.2d 625 (1972) (It has been held that an occasional isolated act of loaning money as an accommodation to a customer or friend is not engaging in the business of making loans under similar statutes.). Finally, the subsequent legislative history, while not controlling, supports our construction. See Franklin v. Town of Newport, 151 N.H. 508, 512, 861 A.2d 777 (2004). In response to the federal SAFE Act, the New Hampshire legislature initially narrowed the exemptions for seller-financing to exclude from the licensing requirements only [a]ny individual who offers or negotiates terms of a residential mortgage loan with or on behalf of an immediate family member of the individual, or [a]n individual who offers or negotiates terms of a residential mortgage loan secured by a dwelling that served as the individual's residence. RSA 397-A:4, III-IV (Supp.2009). Subsequently, however, section four was again amended. Effective July 1, 2011, RSA 397-A:4 (Supp.2011) was amended to provide as follows: The provisions of this chapter shall not apply to ... [a]n owner of real property who in any 12 consecutive month period makes no more than 3 mortgage loans to purchasers of the property for all or part of the purchase price of the real estate against which the mortgage is secured.... RSA 397-A:4, VI; Laws 2011, 212:1. The purpose of the amendment was to combat the excessive enforcement of the SAFE Act, see RSA 397-A (2009), and to restore common sense to New Hampshire law after the July 2009 amendments harshly eliminated any legal commerce in most private residential lending. N.H.H.R. Jour. 1579 (2011). With this amendment, the legislature has made clear that the statute applies only to persons who make numerous loan transactions per year. We conclude, therefore, that in context, engag[ing] in the business of mortgage lending requires more than a single isolated transaction. Because each of the LLCs conducted only one mortgage lending transaction, neither engage[d] in the business of making or brokering mortgage loans, RSA 397-A:2, I, and, thus, Frost had no obligation to disclose the two transactions on his license application. Moreover, neither of the LLCs was a mortgage banker or mortgage broker, see RSA 397-A:1, XII-XIII, so Frost did not work[ ] for more than one mortgage banker or mortgage broker and mortgage servicer.... Therefore, although Frost became subject to the Department's regulation when he became a licensed mortgage loan originator, after the two seller-financed transactions by the LLCs occurred, he is not subject to disciplinary action by the Department based upon those transactions. Given our holding herein, and the fact that penalties were not, in fact, imposed on Frost, we need not address the Department's argument that its application of the suspension and penalty provisions set forth in RSA 397-A:14 and RSA 397-A:17 would not have violated Part I, Article 23 of the New Hampshire Constitution. See N.H. CONST. pt. I, art. 23 (Retrospective laws are highly injurious, oppressive, and unjust. No such laws, therefore, should be made, either for the decision of civil causes, or the punishment of offenses.). We conclude, therefore, that the trial court sustainably exercised its discretion by enjoining the Department from taking disciplinary action against Frost with respect to the LLCs' single mortgage lending transactions. Our decision, however, does not otherwise limit the Department's regulatory authority over Frost as a mortgage loan originator.