New Hampshire's Consumer Protection Act Does Not Impose Strict  
Liability For Misrepresentations Made in Good Faith
 Kelton v. Hollis Ranch, LLC, No.2006-743 (July 17, 2007)

Facts:   The defendant, Hollis Ranch, purchased a horse named "Magic" as a gelding at an auction. Hollis Ranch then sold Magic as a gelding to the plaintiff, Kelton. Soon after purchasing the horse, Kelton noticed that Magic, while stabled next to a mare, began to display "stud-like" behavior. Kelton brought Magic to a veterinarian who, upon examining the horse and conducting a testosterone test, found that Magic had an undescended testicle, which he surgically removed.

The plaintiff filed suit against Hollis Ranch seeking to recover the cost of the veterinary procedure, other related medical and travel expenses, and attorneys' fees. Kelton claimed that Hollis Ranch violated the Consumer Protection Act, RSA 358-A:2, VII, which prohibits "representing that goods or services are of a particular standard, quality or grade, or that goods are of a particular style or model, if they are of another", and RSA 358-A:2, V which prohibits "representing that goods have....characteristics....that they do not have."

The trial court found that Hollis Ranch did not violate the Consumer Protection Act since it had justifiably relied on representations of a third party and had no reason to know that the horse was not a gelding when it was sold to Kelton. The court ruled that in order for a misstatement to constitute a violation of the Consumer Protection Act the defendant "must be aware of or, at a minimum, have a reasonable basis to suspect that its representation is unreliable or untrue." The plaintiff appealed.

Held:     Affirmed.

The Consumer Protection Act Prohibits only practices which are "deceptive" or "unfair". In order for conduct to constitute a violation of the Consumer Protection Act, there must be a degree of knowledge or intent. The Consumer Protection Act does not impose strict liability where, as here, the defendant has made a good faith mistake.

Regards,

Mike Wallenius

603-634-4300
mwallenius@gss-lawyers.com