STATE OF NEW HAMPSHIRE

SUPREME COURT

2013-0406

______________________________________________________

APPEAL OF DAVID ESKELAND

(New Hampshire Retirement System)

___________________________________________________

Appeal By Petition For Certiorari

____________________________________________________

BRIEF FOR RESPONDENT

NEW HAMPSHIRE RETIREMENT SYSTEM

____________________________________________________

Andrew R. Schulman, Esq.

NH Bar 2276

GETMAN, SCHULTHESS

& STEERE, P.A.

1838 Elm Street

Manchester, NH 03104

(603) 634-4300

(603) 626-3647 (fax)

ASchulman@gss-lawyers.com

Counsel for New Hampshire Retirement System

Fifteen Minutes Oral Argument Requested

Andrew R. Schulman, Esq. to argue

TABLE OF CONTENTS

Table Of Authorities ....................................................................................................................... ii 

Questions Presented ........................................................................................................................ 1 

Statement Of The Facts ................................................................................................................... 6

I. NHRS Service Retirement Pensions And Accidental Disability Pensions ........................................................................................................................ 6

II. Automatic And Optional Survivors’ Allowances ......................................................... 9

III. David Eskeland’s Application ................................................................................... 11  Summary Of Argument................................................................................................................. 18

Argument ...................................................................................................................................... 20

I. STANDARD OF REVIEW .......................................................................................... 20

II. A BENEFICIARY OF THE NEW HAMPSHIRE RETIREMENT SYSTEM, WHO PREVIOUSLY RETIRED WITH A FULL SERVICE RETIREMENT PENSION, IS BARRED BY STATUTE FROM APPLYING FOR AN ACCIDENTAL DISABILITY PENSION .................................................................. 21

A. An Applicant Must Be Both A “Member” And “In Service” ............................... 21

B. Eskeland Was Not A “Member” When He Applied For A Disability Pension ................................................................................................. 22 

C. There Is No Statutory Exception To The “Membership” Requirement .......................................................................................................... 25

III. NHRS DID NOT BREACH ITS FIDUCIARY DUTY TO ESKELAND ............................................................................................................... 30

IV. ESKELAND’S MISTAKE OF FACT ARGUMENT IS WIHTOUT MERIT .................................................................................................... 33

Conclusion .................................................................................................................................... 36 

Certificate Of Service ................................................................................................................... 36 

ii

TABLE OF AUTHORITIES

Cases: 

Appeal of Ann Miles Builder, Inc. (Compensation Appeals Bd.), 150 N.H. 315 (2003) ............. 26

Appeal of Malouin (Compensation Appeals Board.), 155 N.H. 545 (2007) ................................ 26

Bailey v. Musumeci, 134 N.H. 280 (1991) ................................................................................... 34

Board of Trustees of the New Hampshire Judicial Retirement Plan v.

Secretary of State, 161 N.H. 49 (2010) ....................................................................................... 31

Brechteen Company v. United States, 854 F.2d 1301 (Fed. Cir. 1988) ....................................... 27

Brizica v. Trustees of Dartmouth College, 147 N.H. 443 (2002) ................................................ 31

Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546 (2005) ....................................... 27

In Re State Employees Association Of New Hampshire, 161 N.H. 476 (2011) ........................... 7

Milette v. New Hampshire Retirement System, 141 N.H. 342 (1996) ......................................... 21

New Hampshire Retirement System v. Sununu, 126 N.H. 104 (1985) ....................................... 31

Petition of Barney, 142 N.H. 798 (1998) .................................................................... 22, 30, 31, 34

Petition of Carrier (New Hampshire Retirement System), ___ N.H. ___,

82 A.3d 917 (Nov. 7, 2013) ........................................................................................................ 21

Schneider v. Plymouth State College, 144 N.H. 458 (1999) ........................................................ 31

State Employees' Association of New Hampshire v. State, 161 N.H. 730 (2011) ................. 21, 23

Union Leader Corporation v. New Hampshire Retirement System, 162 N.H. 673 (2011) .......... 26

iii

Statutes:

2011 N.H. Laws Ch. 224:161 et. seq. (2011 HB 2) ........................................................................ 7

RSA 21-I:30 .................................................................................................................................... 9

RSA 98:1 ....................................................................................................................................... 13

RSA Chapter 100-A ........................................................................................................ 6, 7, 22, 25

RSA 100-A:1,IV through VIII ........................................................................................................ 7

RSA 100-A:1, X............................................................................................................ 7, 18, 22, 25

RSA 100-A:1, XI .......................................................................................................... 4, 17, 18, 22

RSA 100-A:1, XVII ........................................................................................................................ 7

RSA 100-A:1, XVIII ....................................................................................................................... 7

RSA 100-A:2 .................................................................................................................................. 6

RSA 100-A:3 ................................................................................................................................ 21

RSA 100-A:3, V..................................................................................................................... passim

RSA 100-A:4 ................................................................................................................................ 28

RSA 100-A:5 .......................................................................................................................... 2, 6, 7

RSA 100-A: 6 ................................................................................................................................. 6

RSA 100-A:6, II ..................................................................................................................... passim

RSA 100-A:6, III ................................................................................................................ 9, 24, 25

RSA 100-A:6, V..................................................................................................................... passim

RSA 100-A:7 .......................................................................................................................... 13, 25

RSA 100-A:8. ................................................................................................................................. 6

RSA 100-A:9. ................................................................................................................................. 6

RSA 100-A:10 ............................................................................................................................ 6, 7

RSA 100-A:12 ........................................................................................................................ 10, 13

RSA 100-A:13 .................................................................................................................. 10, 11, 13

RSA 100-A:16 ........................................................................................................................ 10, 26

RSA 100-A:52 et seq ...................................................................................................................... 6

RSA 281-A:2 .................................................................................................................................. 2

RSA 281-A:17 ................................................................................................................................ 2

RSA 281-A:37 .............................................................................................................................. 24

RSA 541:13 ................................................................................................................................... 21

iv

26 U.S.C. §72 .................................................................................................................................. 7

26 U.S.C. 401(a) ............................................................................................................................. 6

26 U.S.C. 414(d) ............................................................................................................................. 6

29 U.S.C. §2601 et seq.................................................................................................................. 28

Rules: 

26 C.F.R. 1.104-1(b) ....................................................................................................................... 8

N.H. Code of Administrative Rules, Ret. 305.02 ......................................................................... 29

N.H. Code of Administrative Rules, Ret. 305.05 .................................................................. passim

Other Authorities: 

N.H. Senate Insurance Committee, 96-2660, 3339L (1996) ........................................................ 26

Restatement (Second) of Contracts, §153 ..................................................................................... 34

U.S. IRS Revenue Ruling 85-104, 1985-2 C.B. 52 ........................................................................ 8

U.S. IRS Revenue Ruling 85-105, 1985-2 C.B. 53 ........................................................................ 8 Wald, Some Observations on the Use of Legislative History in the 1981

Supreme Court Term, 68 Iowa L. Rev. 195, 214 (1983) ........................................................ 27

1

QUESTIONS PRESENTED

I. DOES RSA 100-A:6 ALLOW A NEW HAMPSHIRE RETIREMENT

SYSTEM BENEFICIARY, WHO IS ALREADY RETIRED AND RECEIVING A SERVICE RETIREMENT PENSION, TO APPLY FOR AN ACCIDENTAL DISABILITY RETIREMENT PENSION?

II. DID THE NEW HAMPSHIRE RETIREMENT SYSTEM

TRUSTEES BREACH A FIDUCIARY DUTY TO PETITIONER BY FAILING TO PRE-EMPTIVELY ADVISE HIM THAT HE WOULD NO LONGER BE ELIGIBLE TO APPLY FOR AN ACCIDENTAL DISABILITY PENSION AFTER HE BEGAN TO RECEIVE HIS SERVICE RETIREMENT PENSION WHEN:

(A) NHRS STAFF DID NOT GIVE PETITIONER

INACCURATE ADVICE PRIOR TO HIS RETIREMENT; AND

(B) PETITIONER DID NOT WISH TO PURSUE AN

ACCIDENTAL DISABILITY RETIREMENT WHEN HE MET WITH NHRS STAFF PRIOR TO HIS RETIREMENT?

III. SHOULD PETITIONER BE EXCUSED FROM THE

STATUTORY REQUIREMENTS THAT APPLY TO ALL APPLICANTS FOR NHRS DISABILITY PENSIONS, WHEN:

(A) PETITIONER CLAIMS THAT A “MISTAKE OF

FACT” JUSTIFIES HIS NON-COMPLIANCE WITH THE STATUTE;

(B) PETITIONER WAS NOT MISTAKEN ABOUT ANY

“FACT,” BUT WAS RATHER IGNORANT OF THE LAW; AND

(C) PETITIONER GAVE EQUIVOCAL TESTIMONY

WITH RESPECT TO WHETHER HE WOULD HAVE APPLIED FOR AN ACCIDENTAL DISABILITY PENSION HAD HE BEEN AWARE OF THE LAW?

2

STATEMENT OFTHE CASE1

This case began when a retired state conservation officer, who was already receiving a

lifetime pension from the New Hampshire Retirement System (“NHRS”), filed an application to

retire again from the same job, this time as a result of an accidental disability. A, 80. The

applicant, petitioner David Eskeland, wanted to replace his existing “service retirement

allowance,” see, RSA 100-A:5, with an “accidental disability allowance.” See, RSA 100-A:6,

II(c).

As mandated by RSA 100-A:6, II(a) an “accidental disability retirement allowance”

(sometimes referred to below as an “accidental disability pension”) is available only to NHRS

members who:

(A) Become “totally and permanently incapacitated for duty,”

(B) “As the natural and proximate result of” a work related injury.2

1Citations to the administrative record are made as follows:

“CR” refers to the Certified Record.

“PA” refers to the Appendix to the Petitioner’s Brief.

“T-I,” “T-II,” and “T-III” refer to the transcript of the evidentiary hearing before the NHRS Hearings Examiner on petitioner’s motion for reconsideration held on June 26, July 24 and August 10, 2012.

2The non-statutory term “injury” is used as shorthand for the statutory requirement that

an applicant’s “total and permanent incapacity” be proximately caused by: (A) An accident occurring while in the actual performance of duty at some

definite time and place; or

(B) Repeated trauma or gradual degeneration occurring while in the actual performance of duty, or arising out of and in the course of employment; or

(C) Any occupational disease arising out of or in the course of employment as defined by RSA 281-A:2, XI, RSA 281-A:2, XIII, or RSA 281-A:17.

RSA 100-A:6, II(c)(1).

3

Eskeland retired in October, 2010 and immediately began receiving his service retirement

pension. In January, 2011 he filed an application for an accidental disability pension. Eskeland

claimed that he was “totally and permanently incapacitated” due to work related injuries that

occurred six and eight years earlier in 2002 and 2004. CR, 7. His application was processed by

NHRS staff in the usual manner. See, N.H. Code of Administrative Rules, Ret. (“Admin. Rules,

Ret.’) 305.05.

Pursuant to NHRS practice, Eskeland’s application and supporting documentation were

submitted to the NHRS medical advisor for a records review, physical examination and report to

the NHRS Board of Trustees. T-1, 2; See, Admin. Rules, Ret. 305.05(g). The medical advisor

recommended denial of accidental disability benefits. CR, 7. This recommendation was

grounded on a finding that “petitioner was not permanently incapacitated by a work-related

injury because he worked full-time without accommodations for 6 years following his most

recent accepted workers’ compensation injury.”3 CR, 7. The Trustees adopted the Hearings

Examiner’s recommendation and denied Eskeland’s application for an accidental disability

pension. CR, 7.

Eskeland moved for reconsideration. CR, 7, 14; T-1, 22. The matter was referred to the

NHRS Hearings Examiner for a full-scale evidentiary hearing on the questions of whether (a)

Eskeland was “permanently and totally incapacitated for duty” and (b) if so, whether this

incapacity was caused by his six and eight year old work related injuries. CR, 7; T-1, 22.

3There was no dispute that Eskeland suffered two work related injuries. NHRS makes no

independent determination regarding the existence vel non of a work related injury. Rather, RSA 100-A:6, II(c)(2)(C) requires a finding of a compensable injury by the member’s “employer, the employer’s insurance carrier or the commissioner of labor[.]” However, the NHRS Board of Trustees has the obligation to determine whether, as the proximate result of such an injury, a member has become “totally and permanently incapacitated for duty.” RSA 100-A:6, II(c).

4

This hearing on the merits never took place. Instead, the Hearings Examiner sua sponte

raised the jurisdictional question that is at issue in this appeal. CR, 7, 24. In a letter to counsel

for Eskeland and NHRS staff, the Hearings Examiner noted that:

A. RSA 100-A:6 provides that only NHRS “members” may apply for accidental

disability benefits;

B. Eskeland was a “member” until he started to receive his regular service retirement

annuity, at which point he became a “beneficiary” rather than a “member.” See, RSA 100-A:3,

V (providing that membership terminates when a member becomes a beneficiary) and RSA 100-

A:1, XI (defining “beneficiary” to mean any person receiving a retirement allowance); and

C. Eskeland applied for accidental disability benefits after his “membership” terminated.

CR, 24. Thus, the Hearings Examiner questioned whether the Trustees had statutory authority to

entertain his application:

As Mr. Eskeland was a beneficiary when he applied for disability retirement, his membership appears to have terminated and the Board of Trustees appears to lack jurisdiction to award him a disability retirement.

CR, 24. The Hearings Examiner scheduled a pretrial conference to discuss this issue. CR, 24.

Thereafter, an evidentiary hearing was held over parts of three separate days. CR, 7. Eskeland

and his wife both testified as to their interactions with NHRS staff regarding Eskeland’s

retirement planning and application for a regular service retirement annuity. CR, 7-8. Two of

the staff members they spoke with testified as well. The Hearings Examiner also considered

documentary exhibits and written argument from both Eskeland and NHRS staff.

The Hearings Examiner then issued an eight page narrative report and recommendation.

CR, 7-12. The Hearings Examiner first found that RSA 100-A:6 prohibits beneficiaries, such as

5

Eskeland from applying for accidental disabilities benefits. CR, 9. The Hearings Examiner then

rejected Eskeland’s arguments for an exception to this rule. More particularly, the Hearings

Examiner concluded that:

A. The Trustees could not grant Eskeland a waiver under RSA 100-A:6, V. CR, 9. That

statute allows the Trustees to “waive the requirement that a…member be in service at the time

the application is made” for an accidental disability pension, so long as the application is made

within one year of the member’s last contribution to NHRS. The Hearings Examiner

distinguished between: (i) “members” who were no longer “in service” but who had yet to

become beneficiaries, on the one hand and (ii) former members who not only stopped working,

but who also chose to become beneficiaries by applying for and receiving service retirement

pensions. CR, 9. The Hearings Examiner concluded that only the former were eligible for a

waiver under RSA 100-A:6, V. CR, 9.

B. Eskeland was not entitled to some sort of estoppel based remedy grounded on either

(a) his claim of an alleged breach of fiduciary duty based or (b) his claim of a unilateral or

mutual mistake of fact. CR, 9.

The Trustees adopted the Hearings Officer’s recommendation and denied Eskeland’s

motion for reconsideration of the denial of an accidental disability pension. CR, 7. Eskeland

filed a second motion for reconsideration and rehearing. CR, 73. The Hearings Examiner issued

a narrative report recommending denial of the motion, CR, 66-71, and Trustee’s adopted her

recommendation. CR, 66.

This appeal followed.

6

STATEMENT OF THE FACTS

I. NHRS Service Retirement Pensions And Accidental Disability Pensions The New Hampshire Retirement System is a tax qualified pension trust and governmental

pension plan established by RSA 100-A:2.4 NHRS provides defined benefit retirement annuities

and other post-employment benefits for New Hampshire’s full-time police officers, firefighters,

teachers, and state employees as well as many political subdivision employees.5

NHRS’ benefit scheme is controlled entirely by RSA Chapter 100-A. Detailed statutory

formulae dictate whether, when and to what extent members and other beneficiaries are eligible

for benefits. See, RSA 100-A:5, 6, 8, 9, and 52 et seq. NHRS plays a purely administrative and

ministerial role with respect to the payment of these benefits—it must faithfully apply the

statutory algorithms to the facts presented in each individual case.

This dispute involves two mutually exclusive NHRS benefits: (A) Service Retirement

Allowances (commonly called service retirement pensions or regular pensions), as provided for

in RSA 100-A:5, and (B) Accidental Disability Retirement Allowances (commonly called

accidental disability pensions), as provided for in RSA 100-A:6. These are two entirely

different “products” that are offered to NHRS members in the alternative:

Service Retirement Allowances: NHRS members become eligible for service retirement

pensions by meeting certain age and length of service requirements. RSA 100-A:5. Group II

4See, 26 U.S.C. 401(a) (defining the criteria for federal tax qualified pension trusts) and

26 U.S.C. 414(d) (defining the term “governmental plan”).

5See, RSA 100-A:1 (definitions), 100-A: 3 (NHRS membership), 100-A:5 and 6

(annuities) and 100-A:8, 9, 10 and 52 et seq. (other post-employment benefits).

7

members such as Eskeland,6 must have twenty years of creditable service and be at least 45 years

old to receive a regular pension. The amount of a Group II member’s service retirement pension

is equal to 2.5% of the member’s “average final compensation,” multiplied by the number of

years of creditable service, up to a maximum of 100% of “average final compensation.” RSA

100-A:5.7 Thus, because Eskeland had twenty years and three months of creditable service (i.e.

20.25 years), CR, 7, his service retirement pension was equal to 50.625% of his “average final

compensation.”8

Service retirement pensions are taxed as “income” by the federal government except to

the extent that a pension includes the return of a member’s post-tax contributions. See 26 U.S.C.

§72.

6The NHRS membership is divided by statute into two “groups.” Pursuant RSA 100-A:1,

X, Group I consists of “employees and teachers” and Group II consists of “permanent policemen and permanent firemen,” as those terms are defined by RSA 100-A:1, IV through VIII. See generally, In Re State Employees Association Of New Hampshire, 161 N.H. 476, 477 (2011). The two groups have different contribution and benefit schemes. The benefit schemes for both groups were recently modified for members with less than ten years of creditable service as of January 1, 2012. See, 2011 Laws Ch. 224:161 et. seq. (2011 HB 2) amending various provisions of RSA 100-A. The statutory provisions cited in this brief, and the benefit scheme described in this brief, relate to the Group II variant that applies to Eskeland based on his service record.

7“Average Final Compensation” is defined by RSA 100-A:1, XVIII as the average of a

member’s three highest earning years of “earnable compensation.” “Earnable compensation” is defined by RSA 100-A:1, XVII, subject to certain exceptions and limitations, as including base pay, overtime pay, holiday pay, payments for unused sick time and vacation time and most forms of other compensation that are federally taxable as income. There are alternative statutory definitions of both “average final compensation” and “earnable compensation” for members with less than ten years of creditable service as of January 1, 2012.

8It should be noted that, while not applicable in Eskeland’s case, a Group II member with

at least ten years of creditable service, who leaves employment for reasons other than retirement or death, is eligible for a vested, deferred retirement allowance after (a) the member turns 45 and (b) sufficient time has passed such that had he stayed employed he would have twenty years of creditable service. RSA 100-A:10. Such a vested deferred retirement allowance would be equal to 2.5% of the member’s “average final compensation” times the number of years of creditable service.

8

Accidental Disability Retirement Allowances: NHRS members become eligible for

accidental disability pensions regardless of their age and years of service. RSA 100-A:6, II(d).

Eligibility is instead triggered by “total[] and permanent[] incapacit[y] for duty” caused by a

work related injury. RSA 100-A:6, II. Thus, for example, a Group II member who becomes

permanently disabled for duty as a result of a workplace slip and fall in his first year of service

would be eligible for a lifetime accidental disability pension.

All accidental disability pensions are equal to two thirds of the member’s “average final

compensation.” RSA 100-A:6, II(d). Thus, if Eskeland were given an accidental disability

pension in place of his regular pension, he would receive an additional 15.375% of his “average

final compensation” every year (because his regular pension was equal to 50.625% of “average

final compensation.”).

Of perhaps greater importance to Eskeland, under the U.S. Internal Revenue Code

governmental accidental disability pensions that are not determined by age and length of service

are treated as non-taxable workers’ compensation. See, 26 U.S.C. §104(a)(1); 26 C.F.R. 1.104-

1(b); and U.S. IRS Revenue Rulings 85-104, 1985-2 C.B. 52 and 85-105, 1985-2 C.B. 53.

Although not concerns for Eskeland, the following attributes of accidental disability

pensions should be also noted:

-A retiree who receives an accidental disability pension will also receive a taxable

“supplemental disability retirement allowance” if he would otherwise receive, based on his age

and length of service, a service retirement pension greater than his accidental disability pension.

RSA 100-A:6, II(d)(1). Because Eskeland’s regular pension is less than an accidental disability

pension, he would not be eligible for a supplemental disability pension.

9

-A State retiree who receives an accidental disability pension will receive State medical

insurance for himself, his spouse and certain members of his family, subject to a modest

copayment, even if he does not otherwise meet the age and length of service requirements for

retirement. RSA 21-I:30, II, III, IV and VI. Eskeland already qualified for State health

insurance when he retired on a regular pension. Id.

-A retiree who has less than twenty years total of (a) creditable service plus (b) status as

accidental disability retiree, may see his accidental disability pension reduced if he can be

gainfully employed. RSA 100-A:6, III. In broad strokes, the total of the retiree’s pension plus

the amount the retiree can earn cannot be greater than the amount of compensation he would

receive if he were still employed in the position he held at the time of his accidental disability

retirement. RSA 100-A:6, III. This so-called “gainful occupation” reduction was not a concern

for Eskeland because he had twenty years of creditable service.

Ordinary Disability Retirement Allowances: For the sake of completeness, and to avoid

confusion, it must be noted that there is a third, alternative type of NHRS pension known as an

“ordinary disability retirement allowance.” RSA 100-A:6, II(a). Because Eskeland did not apply

for this benefit, it is not discussed in detail. Ordinary disability pensions are available to Group

II members with at least ten years of creditable service who have become medically

incapacitated for duty (but not as a result of a work related injury). RSA 100-A:6, II(a). The

size of the pension is equal to 2.5% of “average final compensation” multiplied by the number of

years of creditable service. RSA 100-A:6, II(b).

II. Automatic And Optional Survivors’ Allowances

NHRS pensions of all types continue for the lifetime of the retiree. After a Group II

retiree dies, his or her surviving spouse receives a lifetime annuity equal to half of the retiree’s

10

pension. RSA 100-A:12. This Group II spousal benefit is automatic and requires neither a pre-

retirement election by the retiree nor a reduction in the amount of the annual retirement pension

paid to the retiree during his or her lifetime. Additionally, based on Eskeland’s date of hire, his

named beneficiary will automatically receive a lump sum payment of $3,600 after his death.

RSA 100-A:12.

NHRS members may also choose to receive certain other “optional allowances” for the

benefit of spouses and children. RSA 100-A:13. These optional allowances are paid for by

reducing the amount of the retiree’s lifetime pension. Id. RSA 100-A:13 allows a NHRS

member who applies for any type of pension (i.e. service retirement, accidental disability or

ordinary disability) to designate a spouse and/or children as beneficiaries to receive, after the

member’s death:

A. A lump sum representing the actuarial value of the member’s contributions to NHRS,

less the amount of those contributions that have been returned to the member as part of his

pension during his lifetime. See, RSA 100-A:16,I and 100-A:1

B. The full amount of the member’s reduced retirement annuity each year for the

beneficiary’s lifetime;

C. Fifty percent of the amount of the member’s reduced retirement annuity each year for

the beneficiary’s lifetime; or

D. Other benefits as may be approved by the NHRS Board of Trustees.9

9The Board of Trustees has approved (a) a 100% survivorship “pop-up” option under

which the retiree’s beneficiary will receive 100% of the retiree’s reduced annuity upon the retiree’s death but, if the beneficiary predeceases the retiree, the retiree’s pension will “pop-up” to what it would have been without the survivorship option, (b) a 50% survivorship “pop-up” option and (c) a customized percentage option that provides the beneficiary with an pension equal to some percentage other than 100% and 50% of the retiree’s reduced pension.

11

By statute, members may elect, change or cancel an optional allowance within 120 days

of retirement. RSA 100-A:13, I. This 120 day grace period has nothing to do with a member’s

choice of what sort of pension to apply for in the first place. Thus, the statute does not provide a

means for a retiree to switch from a service retirement pension to an accidental disability

pension. It only provides a brief window of time for a recent retiree to revisit his or her choice of

“optional allowances” concerning post-death benefits to spouse and/or children.

III. David Eskeland’s Application

Petitioner David Eskeland began employment as a New Hampshire Fish & Game

conservation officer in July of 1991. T-I, 7. As such he became a mandatory Group II member

of the New Hampshire Retirement System. RSA 100-A:3. Eskeland was still employed by Fish

& Game as a Group II member nineteen years later when in December, 2009 he first spoke with

a NHRS representative concerning retirement. T-I, 9.

The December, 2009 Phone Call And Meeting: Eskeland spoke by phone with NHRS

Benefit Specialist Stacey Weaver in December, 2009. T -III, 129. Weaver’s contemporaneous

notes show that Eskeland was contemplating a regular service retirement pension. T-III, 129;

CR 100. Weaver checked the box for “service [retirement]” on the “internal contact sheet” she

filled out during the phone call. T-III, 129; CR, 100. Weaver then set up an in-person meeting

“strictly on the service retirement.” T-III, 123. Had Eskeland suggested that he was considering

an accidental disability pension, Weaver would have arranged for a meeting with a different

benefit specialist because she did not conduct meetings with prospective retirees seeking

accidental disability retirement benefits or eligibility. T-III, 139.

Eskeland gave Weaver two possible service retirement dates. CR,100; T-I, 9. The first

was approximately nine months away, when Eskeland would have a full twenty years of

12

creditable service (suggesting that Eskeland did not consider himself incapacitated for duty for

those nine months). CR, 100; T-I,9. The second was two years after that. CR, 100; T-I,9.

A few weeks after this initial phone call, Eskeland and his wife met with Weaver in-

person. T-III, 123. Weaver went through a NHRS checklist that she and Eskeland signed to

memorialize the meeting. T-III, 123-124; CR, 44. At the top of the checklist that Eskeland

signed there was a checked box indicating that he was pursuing a “service” retirement pension.

Neither the “accidental disability” nor the “ordinary disability” box was checked. CR, 44; T-III,

123. The “disability retirement” portions of the checklist were marked “not applicable” by

Weaver. CR, 44.

Weaver gave Eskeland the “Service Retirement Brochure” but not the “Disability

Retirement Brochure.” CR, 44; T-III, 78. Weaver testified that had there been an inquiry

regarding a possible disability retirement, she would have (a) provided Eskeland with the

brochure and (b) arranged for him to meet with a different benefits specialist. T-III, 138-139.

See also, T-III, 154 (“I would get somebody else to discuss… I would not answer any questions

on accidental disability.”); CR, 10 (Hearings Examiner’s finding that Eskeland did not seek

advice at this meeting regarding disability retirement).

Indeed, at the time Eskeland wanted nothing to do with a disability retirement, although

his wife thought that he should pursue one:

…[M]y wife and I had many colorful conversations about whether I should just go out on service retirement or disability. I dug in just because of my pride and disability was more than I could swallow at the time.

T-I, 8. See also, T-III, 79:

Q: Do you know why there would be any reason if you were thinking about disability retirement why you would not have been given a disability retirement brochure at the December 2009 meeting?

13

A: Because I had dug in and wanted to do service retirement. My wife felt quite differently than that but that’s why I wasn’t given one because I said I was going with service retirement.

Eskeland’s wife acknowledged that he was adamantly opposed to seeking a disability

retirement. T-III, 104. However, she strongly disagreed with his decision. T-III, 102-103. She

believed that Eskeland could no longer perform his job due to a series of work related injuries

that occurred at various times over the course of his career. T-III, 103. She also believed that in

the future Eskeland “was going to have a really hard time doing anything,” T-III, 103. This latter

belief was proven incorrect because within days of retiring on service disability, Eskeland

returned to Fish & Game as an administrative lieutenant on a four day a week basis.10 T-III, 83.

In any event, when Eskeland and his wife met with Weaver, she “broached the subject”

of a disability retirement while being “respectful of his wishes.” T-III, 104. Eskeland’s wife

asked a single general question about disability retirement, but did not ask for any details. T-

III,104. She recalls that Weaver told her “that would be a route he could take if he chose to.” T-

III, 104. Nothing more was said about disability retirement for the remainder of the meeting.

During this meeting, Weaver went over the “optional allowances” established by RSA

100-A:13 for spouses and children. CR,44; T-III, 127-128. (As noted above, under RSA 100-

A:13 a NHRS member may elect to receive a lower annuity in order to provide his or her spouse

or children survivor’s benefits above and beyond those allowed under RSA 100-A:12.) Weaver

10Presumably, because he works only four days a week Eskeland approaches but does not exceed the number of hours required to be classified as a full-time Fish & Game Lieutenant. See, RSA 98:1, IV (defining “full-time” employment for all State job classifications). If Eskeland worked full-time instead of part-time, he would not be eligible to receive any NHRS pension. See, RSA 100-A:3 (providing that all full-time New Hampshire police officers are mandatory members of NHRS) and RSA 100-A:7 (requiring cessation of NHRS pension benefits to retirees who are restored to service). As it stands, Eskeland is receiving his full service retirement pension plus State wages for his four day per week job.

14

advised Eskeland of the statutory 120 day post-retirement grace period for electing, cancelling

and changing these options. CR,44; T-III, 127-128.

Eskeland claims that Weaver told his wife that he could make any changes to his pension

within 120 days after retirement “including going to disability.” T-1,10. Weaver disputed this.

She testified that if Eskeland or his wife had asked (and she had no specific memory of the

conversation), she would have never said that the 120 day grace period could be used for this

purpose. T-III, 141. Although Weaver did not meet with disability retirement applicants, she

knew that the absolute deadline for a member’s application for a disability retirement pension is

one year from the date of the member’s last contribution. See, T-III, 141:

…[I]f there was a general question asked…as to how long would he have to file for a disability…I wouldn’t have said 120 days to begin with. It was one year from the date of last contribution.

See also, T-III, 180 (Weaver testifying she is “certain” she did not advise Eskeland that he had

120 days after retirement to switch to an accidental disability retirement allowance).

Weaver provided Eskeland with a form letter that included an estimate of his service

retirement benefits. PA, 40. Per her practice, Weaver annotated the letter in ink by circling two

deadlines. T-III, 132-133; PA, 40. The first was the deadline for applying for a pension, i.e. not

less than thirty nor more than ninety days from the effective date of retirement. PA, 40; T-III,

132. The second was the 120 grace period for electing, canceling or changing options. PA, 40;

T-III, 132-133.11 Although—as explained above—this grace period applies only to the election

11The form letter was further annotated by a post-it note authored by Eskeland for the

purpose of litigation. PA, 40. In that note, Eskeland stated that Weaver handed him the letter during an August, 2010 meeting. However, Eskeland appears to concede in his brief that the letter was annotated at the December, 2009 meeting. See, Petitioner’s Brief at p. 1. As explained below (see, footnote 12), Weaver did not even meet with Eskeland in August, 2010. Instead, as found by the Hearings Examiner, Eskeland met Benefits Specialist Ann Forrestall.

Continued on next page

15

of survivor’s benefits, Eskeland and his wife both believed that it also applied to the election

between a service retirement pension and an accidental disability pension. T-III, 106.

The August, 2010 Meetings: In August, 2010, after completing twenty years of service

and earning the right to a service retirement allowance, Eskeland met with NHRS benefits

specialist Mary Lehnart for the limited purpose of “pre-selecting” his service retirement options.

T-III, 3, 84-85. Eskeland claims his wife raised the possibility of a disability pension and

Lehnart suggested he contact Weaver if he had disability retirement questions. T-III, 86-87.

However, Eskeland testified that he did not follow up with Weaver or anybody at NHRS prior to

his retirement because “I was not convinced I wanted to apply for disability.” T-III, 89.

Eskeland returned to NHRS a few days later on a walk-in basis. T-III,148. He met

briefly with Benefits Specialist Ann Forrestall.12 Forrestall testified that Eskeland wished to

obtain an updated estimate of his service retirement allowance based on a retirement date of

January 1, 2011. T-III, 184-186. Forrestall relayed this request to Weaver who calculated a new

estimate and mailed it to Eskeland. T-III, 148-151.

Forrestall testified there was no discussion of switching to an accidental disability

pension during her brief meeting with Eskeland in August, 2010. T-III, 188. She testified that if ________________________

Continued from previous page

CR,8. Forrestall did not provide Eskeland with a letter. However, at Forrestall’s request, Weaver prepared an updated estimate of Eskeland’s service retirement allowance and mailed it to him. T-III, 150-151. The issue of whether Weaver annotated the form letter in December, 2009 or August, 2010 is not material to this appeal.

12Eskeland believes that he met for a second time with Benefits Specialist Weaver and

that during this meeting his wife once again broached the possibility of a disability retirement pension. T-III, 43; T-II, 35. However, Weaver testified that she did not meet with the Eskelands at all after December, 2009. T-III, 147-151. Weaver testified that her role in August, 2010 was limited to preparing an updated estimate of Eskeland’s service retirement benefits based on a retirement date of January 1, 2011, which she provided to Eskeland by mail. T-III, 150-151, 184-186. The Hearings Examiner found that Eskeland met with Forrestall. CR, 8.

16

the Eskelands indicated they were considering a disability retirement, “[she] would have

recommended a follow-up appointment because the disability appointments are scheduled in

[sic] an hour and half. …[I]t’s a little more complex process than the service retirement.” T-III,

188.

Eskeland, however, believes his wife at least mentioned the possibility of pursuing a

disability retirement at this and every other meeting with NHRS staff. T-III, 85. The Hearings

Examiner did not directly address this claim, but she accepted Forrestall’s testimony. CR, 8.

The Hearings Officer, at least implicitly, found that neither Eskeland’s wife nor Eskeland raised

the issue of a disability retirement to the extent that Forrestall needed to address it. CR, 8 See

also, CR, 10 (Hearings Examiner’s finding that Eskeland never sought pre-retirement advice

from NHRS regarding a disability retirement).

Eskeland’s Pre-Retirement Review Of The NHRS Website: In addition to speaking with

Benefits Specialists Weaver and Forrestall (who both denied advising Eskeland of the time frame

for applying for an accidental disability pension), Eskeland also reviewed a NHRS web page

intended to give working members some quick facts about disability pensions. PA, 44; T-II, 35;

T-III, 55. The web page stated that “A member may apply for accidental disability

retirement…Provided the application for disability retirement is filed within one year of the date

the member’s contributions to NHRS cease.” (emphasis added). PA, 44.

This particular web page did not define the term “member.” However, as the links at the

top of the web suggest, the NHRS website contains separate sections for “Employers,”

17

“Retirees” and “Members.” A, 44.13 The web page that Eskeland consulted was located in the

“member” section of the website (and not the “retiree” section). Eskeland does not claim that

any NHRS web page stated that a retiree may apply for disability retirement.

Eskeland’s Retirement: Eskeland submitted his application for a service retirement

allowance in August, 2010 and began receiving his pension on October 1, 2010. CR, 7, 10, 66,

67; T-I, 46. Once he began to receive his pension, Eskeland crossed the line that separates

NHRS members from retirees and beneficiaries. See, RSA 100-A:3, V (membership terminates

upon becoming a beneficiary) and RSA 100-A:1, XI (defining “beneficiary” as “a person

receiving a retirement allowance or other [NHRS] benefit[.]”)

Post-Retirement Representations By NHRS: Two months after his membership

terminated and his retirement began, Eskeland contacted NHRS because he changed his mind

and wanted to apply for an accidental disability retirement pension. T-III, 49. The reason for

Eskeland’s volte-face was that his retired supervisor told him he should pursue a disability

retirement due to his continuing “back issues.” T-III, 48.

Three months after he retired, Eskeland met with Benefits Specialist Forrestall to apply

for accidental disability benefits. T-III, 49. Nothing that was said at this post-retirement

meeting could have influenced Eskeland’s pre-retirement decision to apply for and accept a

service retirement allowance.

Forrestall believed that Eskeland’s status as a retiree did not preclude consideration of his

application for accidental disability benefits and, therefore, she accepted his application and

processed it as if it were timely filed. T-III, 205-206.

13There are also links to sections of the website that would be of interest to all three sets

of stakeholders as well as the general public, i.e. “About NHRS,” “Funds & Investments,” “News” and “Events.” A,44.

18

Forrestall also provided Eskeland with the NHRS Disability Retirement Brochure. T-III,

82. Eskeland had not received this brochure earlier. T-III, 82. Therefore, nothing that he read in

the brochure in January, 2011 could have affected his decision to become a retiree three months

earlier. The brochure included a disclaimer stating that it was “intended to provide general

information only and should not be construed as legal opinion or as legal advice.” CR, 94. The

brochure stated that a disability retirement application can be filed “with approval of the NHRS

Board of Trustees, within one year of the date contributions to NHRS cease.” CR, 94.

Based substantially on this evidence, the Hearings Examiner recommended and the

NHRS Board of Trustees determined that petitioner David Eskeland’s application for an

accidental disability retirement allowance was untimely because he was not a NHRS “member”

at the time he applied.

SUMMARY OF ARGUMENT

I. This court reviews decisions by the NHRS Trustees on certiorari and must uphold

those decisions unless they are clearly unreasonable or unlawful. This court resolves questions

of statutory construction de novo but considers the Trustee’s findings of fact to be prima facie

lawful and reasonable.

II. The NHRS Trustees cannot consider an application for an accidental disability

pension unless the applicant is both (a) a NHRS “member” and (b) “in service” at the time the

application is filed. RSA 100-A:6. The term “member” is defined by RSA 100-A:1, X, which

incorporates by reference RSA 100-A:3, V. The latter statute provides that membership

terminates when the “member” becomes a “beneficiary.” The term “beneficiary” is defined by

RSA 100-A:1, XI to include “any person receiving a retirement allowance.” Thus, according to

19

the plain and ordinary language of the statute, a person cannot simultaneously be a “member”

and a “beneficiary.”

Eskeland’s claim that RSA 100-A:6, V creates an exception to the “membership”

requirement should be rejected. That statute provides a limited exception to the requirement that

an applicant for disability benefits be “in service” at the time of the application. As the

grammar, language and text of RSA 100-A:6, V make clear, however, the statute does not alter

the requirement that an applicant be a “member” rather than a “beneficiary.”

The exception to the “in service” requirement, protects “members” who leave

employment due to their disabilities but who do not apply for any sort of NHRS retirement

allowance while they focus on medical issues, perhaps intending to return to work. Their

“membership” continues for life unless they (a) withdraw their accumulated contributions from

NHRS or (b) retire and become NHRS “beneficiaries.” However, their “in service” status may

terminate shortly after leaving employment To remedy this, RSA 100-A:6, V allows such

“members” to apply for disability benefits within one year of their last NHRS contribution,

regardless of whether they are still “in service” at the time.

Because Eskeland was a “beneficiary” rather than a “member” when he applied for an

accidental disability pension, the Trustees correctly rejected his application.

III. Eskeland’s claim for breach of fiduciary duty is without merit because (a) NHRS has

no general fiduciary duty to provide members with advice regarding the consequences of their

retirement planning decisions, (b) NHRS never undertook a specific duty to advise Eskeland that

he could not apply for a disability pension once he became a service retirement beneficiary and

(c) NHRS gave Eskeland accurate advice prior to his retirement.

20

IV. Eskeland’s “mistake of fact” argument should be rejected for the following reasons:

A. Eskeland did not prove that he would have applied for disability benefits prior to

becoming a “beneficiary” if he knew that he could not do so thereafter. He testified that when he

applied for a service retirement pension he was “99%” certain his decision would be “final.” T-

III, 34. With perfect knowledge, Eskeland might have “reconsidered” his decision, T-III, 16, 34,

but he did not say where “reconsideration” would have lead. He remained opposed to disability

benefits until he had a post-retirement discussion with a former supervisor. T-III, 48-49.

B. The doctrine of unilateral mistake does not apply in this context. Eskeland is

precluded from applying for a disability pension by operation of statute. What he calls a

“mistake of fact,” is nothing more than ignorance of the law. Regardless of whether some

retirement decisions might be rescinded due to bona fide mistakes of fact, Eskeland’s disregard

of RSA 100-A:6, II(c) is not such a mistake.

C. Eskeland has not asked to rescind his application for service retirement benefits. The

remedy for a mistake of fact is rescission. Thus, Eskeland would be required to repay NHRS for

the retirement allowance and medical subsidies he received. Yet, he has never offered to do so.

D. Eskeland’s claimed “mistake of fact” is the result of a willful ignorance. Had he

diligently followed up on his wife’s comments and spoken with a disability benefits specialist, he

would have learned that the prudent course was to apply for both service and accidental

disability pensions at the same time, while still a NHRS member.

ARGUMENT

I. STANDARD OF REVIEW

Decisions of the New Hampshire Retirement System Board of Trustees are reviewed by

writ of certiorari. Petition Of Concord Teachers (New Hampshire Retirement System), 158 N.H.

21

529, 533 (2009). This court must uphold the decision unless “the board of trustees has acted

illegally with respect to jurisdiction, authority, or observance of the law, has abused its

discretion, or has acted arbitrarily, unreasonably, or capriciously.” Concord Teachers, 158 N.H.

at 533. Petition Of Farmington Teachers Association-NEA (New Hampshire Retirement

System), 158 N.H. 453 (2009); Milette v. New Hampshire Retirement System, 141 N.H. 342,

344 (1996). In determining whether this deferential standard has been met, the Trustees’

findings of fact are considered to be “prima facie lawful and reasonable.” Concord Teachers,

158 N.H. at 533, citing RSA 541:13 (2007). Ultimately, “[t]he petitioners' burden is to

demonstrate that the board's decision ‘is clearly unreasonable or unlawful.’” Id.

The central issue in this case is whether the Trustees correctly construed the term

“member” as used in RSA 100-A:6, V and 100-A:3, V. The interpretation of a statute is always

a question of law that is reviewed de novo. State Employees' Association of New Hampshire v.

State, 161 N.H. 730, 738 (2011); Petition of Carrier (New Hampshire Retirement System), ___

N.H. ___, 82 A.3d 917, 920 (Nov. 7, 2013). However, the other issues in the case, relating to the

petitioner’s claims for breach of fiduciary duty and mistake of fact involve issues of fact,

credibility and discretion, as well as issues of law.

II. A BENEFICIARY OF THE NEW HAMPSHIRE RETIREMENT SYSTEM, WHO PREVIOUSLY RETIRED WITH A FULL SERVICE RETIREMENT PENSION, IS BARRED BY STATUTE FROM APPLYING FOR AN ACCIDENTAL DISABILITY PENSION

A. An Applicant Must Be Both A “Member” And “In Service”

As Eskeland apparently concedes, absent a statutory exception, the NHRS Trustees

cannot consider an application for an accidental disability pension unless the applicant is both (a)

a NHRS “member” and (b) “in service” at the time the application is filed. See, Petitioner’s

Brief at p. 6 (“To apply and have an application considered there are arguably two requirements:

22

the applicant must be a member and in service.”). See also, CR, 9 (NHRS Hearings Examiner’s

report, adopted by the Trustees, discussing the separate “membership” and “in service”

requirements); Petition of Barney, 142 N.H. 798 (1998) (upholding the Trustees’ denial of an

accidental disability pension because the applicant was no longer a “member.”). This is so

because the plain language of RSA 100-A:6, II(c)(1) limits the class of applicants to “member[s]

in service:”

Upon the application of a group II member in service or of the member's employer, any member shall be retired by the board of trustees on an accidental disability retirement allowance… B. Eskeland Was Not A “Member” When He Applied For A Disability Pension

Eskeland had terminated his qualifying employment by retirement and was receiving a

service retirement pension at the time he applied for an accidental disability pension. CR, 7. In

NHRS parlance he had become a “beneficiary” and was no longer a “member:”

A. RSA 100-A:1, XI provides that, as used in RSA Chapter 100-A, the term

“beneficiary” includes “any person receiving a retirement allowance;”

B. RSA 100-A:1, X provides that the term “member,” as used in RSA Chapter

100-A, means “any person included in the membership of the retirement

system, as provided in RSA 100-A:3;”

C. RSA 100-A:3,V provides that, “A member shall cease to be a member if (a) he

or she withdraws his or her accumulated contributions; or (b) he or she

becomes a beneficiary or dies.”

23

The plain meaning of these statutes make it impossible for a person to be a “member” and

a “beneficiary” at the same time.14 There is no need for a textual or contextual exegesis, or for

the consultation of legislative history, in order to conclude that a retiree’s receipt of a retirement

allowance terminates his or her NHRS membership. See e.g., State Employees Association, 161

N.H. at 738 (In determining “the intent of the legislature as expressed in the words of the

statute,” this court “first look[s] to the language of the statute itself, and, if possible, construe[s]

that language according to its plain and ordinary meaning,” without “consider[ing] what the

legislature might have said or add language that the legislature did not see fit to include.).

Thus, there is a syllogistic, if not geometric proof that Eskeland was not a member at the

time he applied for a disability pension:

First Premise: One who receives a retirement allowance is a “beneficiary” and no longer a “member;”

Second Premise: Eskeland was receiving a retirement allowance at the time he

applied for disability benefits; Conclusion: Eskeland was not a “member” when he applied for disability

benefits.

Eskeland’s brief challenges the first premise of this syllogism. He does this by arguing that the

statutorily defined term “member” should be read to mean the precise opposite of its statutory

definition. Thus, while RSA 100-A:3, V provides that “a member shall cease to be a member

if…he or she becomes a beneficiary[,]” Eskeland asks this court to hold that “a beneficiary might

also be a member.” See, Petitioner’s Brief at p. 8. He arrives at this point, by first arguing that

the Legislature’s use of the phrase “member or retired member” in a different context, makes the

14This case does not involve the situation in which an active NHRS member who is not

retired becomes a beneficiary by virtue of receiving survivor’s benefits for a deceased spouse or parent who was a NHRS retiree. In that unique and limited circumstance, the statutory definitions are ambiguous.

24

term “member” ambiguous in the present context and then suggesting that this alleged ambiguity

can only be resolved by effectively redacting the definition of “member” from the statute.

Eskeland finds ambiguity by looking to RSA 100-A:6, III(c) and (d). Those statutory

provisions deal with NHRS’ obligation to reduce disability pensions by the amount of workers’

compensation and employer funded disability insurance payments, other than lump sum

settlements under RSA 281-A:37, which are “paid or payable to or on account of any member or

retired member” for the same disability. Eskeland claims that the use of the phrase “member or

retired member” suggests that the Legislature views retirees as members.

However, a closer look at these statutory provisions suggests that the Legislature used the

phrase “members or retired members,” to sweep as wide as needed. With respect to the set-off

required by RSA 100-A:6, III(c), it is entirely possible for a statutory “member” to apply for an

accidental disability pension while he or she is still both a “member” and “in service” while

receiving workers’ compensation (see, Admin. Rules, Ret. 305.05(i)). In the absence of RSA

100-A:6, III(c) such an individual could inadvertently or by design end up concurrently receiving

both periodic workers’ compensation payments and a disability retirement allowance for the

same injury. The use of the phrase “member or retired member” simply removes all doubt that

the statute refers to workers compensation benefits that became payable at the time the individual

was a “member” or a “retired member.” The latter phrase—“retired member”—stands on its

own to signify somebody who was once a “member” and then retired.

RSA 100-A:6, III(d) allows NHRS to recoup funds improperly advanced as accidental

disability benefits when the disabled party failed to disclose the receipt of workers’

compensation payments that would have led to a reduced payment under RSA 100-A:6, III(c).

The statute allows NHRS to seek recoupment from “any member or retired member” who failed

25

to disclose workers’ compensation payments. The use of the term “member” in this context is

understandable because disability retirees are sometimes able to return to service as active NHRS

members. When that occurs, the retiree ceases to be a “beneficiary” and once again becomes a

“member.” See, RSA 100-A:7. Such a “member,” having been restored to service, would still

be liable for recoupment under RSA 100-A:6, III(d).

In any event, even if the Legislature spoke imprecisely in RSA 100-A:6, III(c) and (d),

that would be no reason to completely ignore the statutory definition of “member” when

construing the rest of RSA 100-A. The statutory definitions in RSA 100-A:1, including the

definition of “member” in RSA 100-A:1, X (which incorporates RSA 100-A:3, V), apply “unless

a different meaning is plainly required by the context.” No change in meaning is required in the

context of RSA 100-A:6, II(c), relating to the application for disability benefits.

C. There Is No Statutory Exception To The “Membership” Requirement Eskeland next argues that RSA 100-A:6, V allows non-members to apply for accidental

disability retirement pensions if they do so within a year of their last contribution to NHRS. This

argument is without merit. RSA 100-A:6, V provides a narrow exception to the “in service”

requirement but no exception to the “membership” requirement. The statute was enacted in 1996

and provides as follows:

The provisions of this paragraph shall apply, notwithstanding any other provision of RSA 100-A:6 to the contrary. The board of trustees, as the interests of justice may require, may waive the requirement that a group I or group II member be in service at the time application is made for ordinary and accidental disability retirement benefits under this section, provided that application for disability retirement benefits is made within one year of the date the member's contribution to the New Hampshire retirement system ceases.

RSA 100-A:6, V. See also, Admin. Rules, Ret. 305.05(k):

The requirement that an application for disability retirement benefits be filed while a member is in service shall be waived in accordance with RSA 100-A:6, V

26

for a member who files an application for… accidental disability retirement benefits within one year of the member's last date of creditable service for which the retirement system has received and posted, on behalf of the member, full retirement contributions pursuant to RSA 100-A:16. Certainly, the grammar, language and text of this “in-service” exception does nothing to

extend the application deadline beyond the termination of the applicant’s NHRS “membership.”

RSA 100-A:6, V speaks of waiving “the requirement that a…member be in service.” Had the

Legislature wished to waive the requirement that the applicant be a member, it would have

written a different statute. The Administrative Rule adopted by the Trustees to implement the

“in service” exception, clearly indicate the Trustee’s belief that the exception only applies to “a

member who files an application.” Admin. Rules, Ret. 305.05(k). Thus, based on the plain

language of RSA 100-A:6,V, current membership remains an immutable requirement for

applicants seeking NHRS accidental disability benefits.

Eskeland invites this court to consider the legislative history of the “in service” exception

established by RSA 100-A:6, V. This court should decline the invitation because the statute is

not ambiguous. See e.g., Union Leader Corporation v. New Hampshire Retirement System, 162

N.H. 673, 676 (2011) (“When interpreting a statute, we first look to the plain meaning of the

words used and will consider legislative history only if the statutory language is ambiguous.”);

Appeal of Malouin (Compensation Appeals Board.), 155 N.H. 545, 549 (2007) (same); Appeal

of Ann Miles Builder, Inc. (Compensation Appeals Bd.), 150 N.H. 315, 318 (2003) (same).

Moreover, the legislative history cited in Eskeland’s brief is not really legislative history

at all. It is a one paragraph quote from a memorandum sent by a New Hampshire Senate staffer

to members of the Senate Insurance Committee. See, Petitioner’s Brief at p. 10, citing N.H.

Senate Insurance Committee, 96-2660, 3339L (1996). The quote in Eskeland’s brief was neither

adopted by the Insurance Committee nor uttered by a Senator or Representative. Moreover, the

27

staffer’s quote shows nothing more than his personal confusion regarding the existing state of

affairs. The staffer suggested that—contrary to RSA 100-A:3, V—a person would be

“automatically removed from membership in the system” after leaving employment for thirty

days due to an illness. In fact, at the time (and presently) membership continues until the

member dies, becomes a beneficiary or takes back his contributions after leaving employment.

What might terminate after thirty days is the member being “in service,” and that is the only

issue addressed by RSA 100-A:6, V.15 Cf: Brechteen Company v. United States, 854 F.2d 1301,

1307 (Fed. Cir. 1988) (“It is absurd to attribute the mistake of one staffer…to the entire

Congress”). See generally, Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546, 568

(2005):

Extrinsic materials have a role in statutory interpretation only to the extent they shed a reliable light on the enacting Legislature's understanding of otherwise ambiguous terms. Not all extrinsic materials are reliable sources of insight into legislative understandings, however, and legislative history in particular is vulnerable to two serious criticisms. First, legislative history is itself often murky, ambiguous, and contradictory. Judicial investigation of legislative history has a tendency to become, to borrow Judge Leventhal's memorable phrase, an exercise in "'looking over a crowd and picking out your friends.'" See Wald, Some Observations on the Use of Legislative History in the 1981 Supreme Court Term, 68 Iowa L. Rev. 195, 214 (1983). Second, judicial reliance on legislative materials like committee reports, which are not themselves subject to the requirements of Article I, may give unrepresentative committee members—or, worse yet, unelected staffers and lobbyists—both the power and the incentive to attempt strategic manipulations of legislative history to secure results they were unable to achieve through the statutory text.

(emphasis added).

15As explained on the following page, it is very unlikely that a member would find

himself or herself no longer “in service” just thirty days after a work related injury. A member remains “in service,” for the purpose of applying for a NHRS disability pension, while on sick leave, while using vacation and personal days, while on FMLA leave and during such time as he or she receives workers compensation. See, Admin. Rules, Ret. 305.05(h) and (i).

28

The problem addressed by RSA 100-A:6, V is that members who leave employment due

to accidents or injuries might spend months or years hoping to return to work, without intending

to retire, while they focus on medical issues. This is especially true for young workers who

suffer work related accidents early in their careers and, therefore, may be far more concerned

with matters such as physical therapy and employment focused education, than with the thought

of applying for a retirement pension. Such members might be denied disability retirement

pensions if they were no longer “in service” at the time of their application for benefits.

There is no statutory definition or explanation of what it means for a member to be “in

service.” However, the NHRS Trustees adopted an Administrative Rule that clarifies the “in

service” requirement for the purpose of applying for disability benefits under RSA 100-A:6. The

Rule begins with a general definition that essentially equates being “in service” with being

employed and contributing to NHRS:

A member shall be “in service” if the member as a result of employment with a retirement system participating employer is both receiving earnable compensation…and earning retirement system creditable service for which the retirement system receives payment of employer and member retirement contributions…

Admin. Rule Ret. 305.05(h). The Rule then expands this general definition to also include any

period in which the member receives workers’ compensation benefits (unless his or her

employment has been formally terminated), and any time spent on leave pursuant to the federal

Family and Medical Leave Act, 29 U.S.C. §2601 et seq. See, Admin. Rules, Ret. 305.05(i) and

(j). Cf: RSA 100-A:4, III and III-b.

RSA 100-A:6, V allows a “member” to apply for a disability pension even if he is no

longer “in service” under these rules, provided that no more than one year has passed since the

member’s last contribution to NHRS. This one year grace period is an alternative to the “in

29

service” requirement. Thus, a “member” may apply for a disability pension either (a) while still

“in service,” even if more than a year has passed from the date of the “member’s” last

contribution (as could be the case if the member took serial leaves including FMLA leave, or if

the member is receiving workers’ compensation) or (b) within a year from the member’s last

contribution to NHRS.

As the foregoing makes clear, RSA 100-A:6, V neither expands the concept of

“membership” nor provides an alternative to “membership” for the purpose of applying for a

disability pension. Nothing in the statutory text, and nothing in the purported legislative history

proffered by Eskeland, suggests a legislative intent to allow existing retirees, who are already

receiving NHRS pensions, to file post-retirement applications for disability pensions.

It is not too much to expect a member who actually applies for retirement pension to

decide, at that time, whether he is retiring due to a work related injury that has left him

permanently and totally disabled. Indeed, members in Eskeland’s position, who qualify for a

service retirement pension but believe they may also qualify for an accidental disability pension

are encouraged to apply for both simultaneously, before their membership lapses. See, Admin.

Rules, Ret. 305.02 (f); T-III, 208 (NHRS Benefits Specialist explaining that, “[I]f somebody is

eligible for a service retirement at the time that they are indicating that they’re permanently

disabled from the job…they would typically file both applications together[.]”). In such cases,

the service retirement pension is approved as a matter of course forthwith and, if the accidental

disability pension is later approved by the Trustees, the accidental disability benefit will be

retroactive to the date of the service retirement benefit. Admin. Rules, Ret. 305.02(f).

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The Legislature has yet to create an exception to the “membership” requirement for an

able minded and experienced law enforcement officer who refuses to apply for an accidental

disability pension because, “I dug in and wanted to do service retirement.” T-III, 79.

III. NHRS DID NOT BREACH ITS FIDUCIARY DUTY TO ESKELAND Eskeland argues that NHRS breached its fiduciary duty to him by failing to advise him

that he could not apply for a disability retirement pension once he became a NHRS beneficiary.

Eskeland’s argument should be rejected because (a) The NHRS Trustees have no general

fiduciary duty to provide members with advice regarding the consequences of their retirement

planning decisions; (b) NHRS never undertook a specific duty to advise Eskeland regarding the

fact that he could not apply for a disability pension once he became a service retirement

beneficiary; and (c) NHRS gave Eskeland accurate advice prior to his retirement.

NHRS Did Not Breach A General Fiduciary Duty: NHRS’ fiduciary duties to its

members are spelled out in Petition of Barney (New Hampshire Retirement System), 142 N.H.

798 (1998). The petitioner in that case was a Group II corrections officer who left employment

following a serious work related injury. Thereafter, she terminated her NHRS membership by

withdrawing her accumulated retirement contributions. She later sought to reinstate her

membership and apply for an accidental disability pension. The Trustees denied her application

on the grounds that she was no longer a “member.” The petitioner argued that “NHRS owed her

a fiduciary duty to inform her of her eligibility for disability retirement benefits before she acted

to her detriment.” Petition of Barney, 142 N.H. at 802. For reasons set forth below, this court

held that the NHRS had no such fiduciary duty.

In Petition of Barney, this court explained that, under the common law of trusts the

NHRS trustees “have a fiduciary obligation to manage the NHRS for the benefits of its members

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and beneficiaries.” Petition of Barney, 142 N.H. at 802, citing New Hampshire Retirement

System v. Sununu, 126 N.H. 104, 109 (1985). See also, Board of Trustees of the New

Hampshire Judicial Retirement Plan v. Secretary of State, 161 N.H. 49, 57 (2010). Although this

fiduciary duty applies to the management of NHRS’ trust funds, it does not require the NHRS

Trustees to “intervene and counsel” each member regarding the consequences of his or her

retirement decisions. Petition of Barney, 142 N.H. at 802. “To read RSA chapter 100-A as

placing such an obligation on the NHRS would effectively render it a financial counseling and

investment service, a service far more comprehensive than that required of the board in its

capacity as trustee.” Id.

Thus, NHRS has no general duty to interrogate and counsel applicants for service

retirement pensions about their eligibility for accidental disability benefits. Certainly, absent a

direct request, NHRS would not be expected to tell a service retirement applicant that once he

begins to receive his pension he can no longer apply for an accidental disability pension.

NHRS Did Not Undertake A Specific Fiduciary Duty: It is conceivable, depending on

the circumstances, that NHRS could undertake a special fiduciary duty to a member with respect

to specific advice rendered to that member. In general, a fiduciary relationship exists if one

gains the confidence of another and purports to act or advise that person with his interest in

mind. Brizica v. Trustees of Dartmouth College, 147 N.H. 443, 447 (2002); Schneider v.

Plymouth State College, 144 N.H. 458, 462 (1999). The party reposing confidence then

becomes dependent on the fiduciary for a particular service. Schneider, 144 N.H. at 462.

In this case, however, NHRS never undertook to advise Eskeland regarding his potential

eligibility for an accidental disability pension. He called NHRS in December, 2009 requesting

an appointment to discuss a service retirement pension. T-III, 129; CR, 100. He went to that

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appointment while he was “dug in” and adamantly opposed to applying for any sort of disability

benefit. To the extent that his wife lightly “broached the subject” of a disability retirement, T-

III, 104, she said nothing so specific as to warrant even a notation on the Benefit Specialist’s

checklist. CR, 44. The items on the list relating to disability benefits were all checked as being

“not applicable.” CR, 44. The Disability Retirement Brochure was not handed out and the

Benefits Specialist did not arrange for a meeting with somebody who could provide advice

regarding disability retirement. CR, 44, T-III, 138-139, 154. At most, at a time when Eskeland’s

planned retirement was months or years away, see, CR, 100, T-I, 9, the Benefit Specialist may

have told Eskeland’s wife that a disability retirement was “a route he could take if he chose to.”

T-III, 104.

Eskeland and his wife claim they were led to believe that the120 day grace period for

making survivorship options also applied to switching from service retirement to accidental

disability retirement. But that idiosyncratic belief was not the result of anything the Benefits

Specialist said. T-III, 141, 180. The Benefits Specialist testified she was “certain” she did not

convey that the120 day grace period could be used to apply for a disability retirement pension.

T-III, 180. Indeed, Eskeland himself conceded that there may have been a “misunderstanding”

on his part regarding what “options” the Benefits Specialist was talking about. T-III, 74-75.

Eskeland met with a second Benefits Specialist on a walk-in basis several months later.

T-III, 148. He requested nothing more than updated estimate of his service retirement pension

based on a retirement date of January 1, 2011. T-III, 184-186. He was still opposed to the idea

of applying for an accidental disability pension. To the extent that Eskeland’s wife might have

again brought up the topic, the Benefits Specialist did not make note of it or address it. T-III,

188.

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Finally, Eskeland consulted the “Members” section of the NRHS website and read that

“A member may apply for accidental disability retirement…Provided the application for

disability retirement is filed within one year of the date the member’s contributions to NHRS

cease.” (emphasis added). PA, 44.

None of these bits and whispers constitutes the type of specific, inaccurate advice that

could form the basis for a breach of fiduciary duty claim based on confidence reposed and

betrayed.

Eskeland Cannot Assert An Equitable Claim Based On Post-Retirement Advice:

Because Eskeland’s NHRS “membership” terminated as soon as he became a beneficiary, he

cannot claim detrimental reliance on any later advice he received from NHRS. He first received

the Disability Retirement Brochure in January, 2011, some three months after his retirement. T-

III, 82. Thus, nothing that Eskeland read in that brochure played a role in his decision three

months earlier to (a) apply for a service retirement pension and (b) accept service retirement

benefits.16 Likewise, Eskeland’s critical pre-retirement decisions could not have been influenced

by the fact that a Benefit Specialist later accepted Eskeland’s post-retirement application and

personally believed it was timely. T-III, 205-206.

IV. ESKELAND’S MISTAKE OF FACT CLAIM IS WITHOUT MERIT Eskeland argues that he should be allowed to apply for an accidental disability retirement

due to a unilateral or mutual mistake of fact. As a threshold matter, it is not clear how Eskeland

16The brochure included a disclaimer stating that it was “intended to provide general

information only and should not be construed as legal opinion or as legal advice.” CR, 94. Therefore, while it is true that the brochure did not include a detailed analysis of the “membership” and “in service” requirements, it made no claim to cover all of the nuances regarding disability retirement applications. Even if Eskeland had received the brochure before he retired, it would be a very thin reed upon which to ground a claim of breach of fiduciary duty.

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can claim a mutual mistake of fact when NHRS approved his application for a service retirement

benefit based solely on the undisputed facts that established his age, length of service and

average final compensation. Rather, the only mistake of fact that Eskeland alleges is his own,

i.e. that he mistakenly believed that he had 120 days after retirement, or one year from his last

contribution to apply for an accidental disability retirement pension.

Eskeland’s mistake of fact claim can be summarily rejected because the record does not

clearly establish that he would have applied for an accidental disability pension had he not been

mistaken. He testified that if he were told that he had to apply for accidental disability benefits

before retirement, “I would have stopped and reconsidered at that point.” T-III, 16. But

Eskeland conceded that at the time he applied for a service retirement pension he was “99%”

certain that would be his final decision. T-III, 34. Eskeland did not opine on where

reconsideration would have led him. After all, he was adamantly opposed to seeking disability

benefits and it was a post-retirement discussion with a former supervisor that changed his mind.

One can only speculate on what Eskeland and his wife would have said to each other and to

NHRS if they knew that Eskeland had to make a pre-retirement choice.

Further, the doctrine of unilateral mistake of fact, which in limited circumstances may

support rescission of a contract, see, Bailey v. Musumeci, 134 N.H. 280, 284 (1991);

Restatement (Second) of Contracts, §153, has no application with respect to the mistaken

application of a statute. Eskeland is not precluded from applying for accidental disability

benefits because of an uninformed bargain he struck with NHRS, he is precluded by statute.

What he calls a “mistake of fact,” is nothing more than ignorance of the law. In Petition of

Barney, 142 N.H. at 803, this court reserved the question of whether a unilateral mistake could

ever entitle a former NHRS member who withdrew her accumulated contributions to rescind her

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withdrawal. Regardless of whether some retirement decisions might be rescinded due to bona

fide mistakes of fact, Eskeland’s disregard of RSA 100-A:6,II(c) is not such a mistake.

Moreover, Eskeland has not even asked to rescind his application for service retirement

benefits. The remedy for a unilateral mistake of fact would be rescission, and Eskeland would be

required to repay NHRS for the retirement allowance and medical subsidies he received. Yet, he

has never offered to repay what he gained as a beneficiary.

Finally, for all of the reasons discussed in connection with Eskeland’s breach of fiduciary

duty claim, his mistake is the result of a willful ignorance. Had Eskeland followed up on his

wife’s comments and spoken with a disability benefits specialist, he would have learned that the

prudent course is to apply for both service and accidental disability pensions at the same time,

while still a NHRS member. Instead, he remained “dug in” and heard only what he wanted to

hear (rather than what was said) about the 120 day grace period for survivorship options.

CONCLUSION

This court should affirm the decision of the New Hampshire Retirement System Trustees

denying petitioner’s application for an accidental disability retirement allowance.

Respectfully Submitted

New Hampshire Retirement System By Its attorneys

_________________________________ Andrew R. Schulman, Esq., NH Bar 2276 GETMAN, SCHULTHESS & STEERE, PA 1838 Elm Street Manchester, NH 03104

(603) 634-4300 ASchulman@gss-lawyers.com

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CERTIFICATE OF SERVICE

I, Andrew R. Schulman, hereby certify that I have served two copies of this brief by mailing same, first class mail, postage prepaid, to counsel for petitioner, John Vanacore, Esq., 19 Washington Street, Concord, NH 03301 on March 20, 2014, and I also served a copy by email attachment on March 20, 2014.

________________________ Andrew R. Schulman