2008-689, DIANE CLAPP v. GOFFSTOWN SCHOOL DISTRICT

The respondent, Goffstown School District (district), appeals

and orally), for the respondent. Sulloway & Hollis, P.L.L.C., of Concord (William D. Pandolph on the brief

memorandum of law and orally), for the petitioner. Molan, Milner & Krupski, PLLC, of Concord (Glenn R. Milner on the to press. Errors may be reported by E-mail at the following address:

page is: http://www.courts.state.nh.us/supreme. DIANE CLAPP

No. 2008-689 editorial errors in order that corrections may be made before the opinion goes Hillsborough-northern judicial district Hampshire, One Charles Doe Drive, Concord, New Hampshire 03301, of any Readers are requested to notify the Reporter, Supreme Court of New ___________________________

THE SUPREME COURT OF NEW HAMPSHIRE

a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as pursuant to RSA 100-A:20.

p. 2 voted to enroll all support staff employees in the NHRS (the 2001 vote)

NH Retirement System as of July 1, 2001.” On March 13, 2001, the district for retroactive payments by the School district. We just want to be part of the to the district budget committee, “[a]t this time we [the union] are not asking

district to pay for any retroactive credit. As stated in a January 2001 address district, on the grounds that the 1950 vote entitled the employees to retirement the circumstances of the 1950 vote and did seek prior service credit from the

themselves. RSA 100-A:22. Clapp and the union did not initially ask the bargaining agreements between the union and the district. [accrued liability] contributions,” employees may petition to purchase the credit staff. Thereafter, Clapp’s employment contracts were subject to collective (2001). In other cases, when an employer is “unable or unwilling to make After the 2001 vote, the committee that Clapp joined began researching

1, 2001, as the effective participation date. Id. the modern NHRS. Goffstown, 150 N.H. at 796. The district set July

In the late 1980s, a union started bargaining on behalf of the district’s support service credit is split between employer and employee. RSA 100-A:3, VI(d)(1) v. City of Berlin, 145 N.H. 467, 472 (2000). In some cases, the cost of prior RSA 100-A:3, VI (Supp. 2008); RSA 100-A:22 (Supp. 2008); see, e.g., McKenzie system). The prior system was established in 1945 and was the predecessor to employees to purchase retirement benefits credit for their years of prior service. enroll support staff. because, in addition to prospective retirement benefits, enrollment allows Enrollment in the NHRS is important to the district’s support staff

1950 vote was rescinded. of the 1950 vote at the time Clapp discovered it. There is no indication that the The record does not indicate that the parties, or the NHRS, had any knowledge Consequently, the district support staff were never enrolled. See id. at 801. enrollment in the prior system was never established. Id. at 797. retirement saving plan, to which Clapp contributed through payroll deductions. 795, 796 (2004). However, for reasons unknown, a participation date for

1950 vote) to include support staff in the prior state retirement system (prior mandatory for teachers in this state, school districts may choose whether to 1999, Clapp discovered that the district had voted on March 18, 1950 (the enrolling district support staff in the NHRS. Sometime before December 20, In 1999, Clapp joined a committee to investigate the possibility of

619 (1982). Sometime in the 1980s, the district established a non-NHRS (2001); cf. State Employees’ Ass’n of N.H. v. Belknap County, 122 N.H. 614,

Although enrollment in the New Hampshire Retirement System (NHRS) is

neither expected nor received pension or retirement benefits. “fringe benefits.” When Clapp started working for the district in 1971, she p. 3 [her].” and flexible equitable powers” because “[t]he equities of this case plainly favor

voted to spend on behalf of the support staff.

trial court, and now argues that the trial court’s decision was within its “broad

unjust enrichment on the theory that the district retained funds it previously

unconscionable for it to retain. Clapp did not cross-appeal any decision of the court failed to address whether the district received a benefit that it would be (3) Clapp was paid all she was contractually entitled to receive; and (4) the trial

inform the NHRS of the 1950 vote. The trial court granted Clapp’s petition for and attorney’s fees, and declined to address whether the district had a duty to The trial court denied Clapp’s petitions for declaratory judgment, negligence,

July 1, 2001; (2) there was insufficient evidence of any wrongdoing on its part;

specifically sought the full cost of the credit she purchased plus attorney’s fees.

arguing that: (1) it made no contributions to the NHRS for any employee before “[we] may review the matter without any deference to the trial court’s findings argues that because the trial court did not conduct an evidentiary hearing, We first address the proper standard of review. On appeal, the district

recovery under theories of negligence and unjust enrichment. Clapp 2002, 2004, 2006) or ask their employer to purchase it. refused. Clapp then brought this suit seeking declaratory judgment and and sought reimbursement from the district for half of the cost. The district The district appeals the trial court’s ruling that it was unjustly enriched,

could purchase the credit themselves under RSA 100-A:22 (2001) (amended Clapp subsequently purchased twenty-eight years of prior service credit

added). provision, school district for failing to notify the NHRS of the 1950 vote.” Id. (emphasis employer oversight provision, they may have equitable remedies against the for review. infirm, we said that, “[a]lthough the support staff have no remedy under the that Part I, Article 14 of the State Constitution rendered RSA chapter 100-A constitutional right to a remedy. Id. In the course of rejecting the argument held that the board’s decision did not deprive the employees of their

district could not be forced to pay for the credit, we pointed out that employees not entitle the employees to retroactive credit. Id. at 800-01. Although the

RSA 100-A:3, VI(d) (2001), did not apply to the union and thus did

We affirmed the board’s ruling, holding that the employer oversight

Id. at 798.

(board) of the NHRS upheld the decision, and the union petitioned this court eligible for NHRS membership until July 1, 2001. Id. The Board of Trustees participation date was ever set, and thus the union employees had not become the union’s request because the NHRS had no record of the 1950 vote, no refused, and the union petitioned the NHRS for assistance. The NHRS denied benefits for each year that they worked after 1950. See id. at 797. The district express contract covering the subject matter at hand.

p. 4 have been at fault to find unjust enrichment. allow recovery under a theory of unjust enrichment where there is a valid, behalf of the support staff.” The court correctly ruled that the district need not passively accepted the benefit of retaining funds it voted in 1950 to spend on

contract.”). It is a well-established principle that the court ordinarily cannot

that the district “was unjustly enriched in this case, because, at least, it terms of an agreement.

pay to the NHRS on behalf of the support staff.” words ‘unjust enrichment’.”

Roebuck & Company, 391 F.3d 364, 369 (1st Cir. 2004) (applying New meets the demands of equity.” See J.G.M.C.J. v. Sears, if ‘equity and good conscience’ requires, this does not mean that a moral duty

enrichment . . . is not a means for shifting the risk one has assumed under receives “a benefit which would be See 42 C.J.S. Implied Contracts § 38 (2007) (“[U]njust according to the circumstances and exigencies of the case.” The court ruled One general limitation is that unjust enrichment shall not supplant the

Enrichment § 1 comment b at 2 (Discussion Draft, 2000). that the district was unjustly enriched because it “kept the money it agreed to Restatement (Third) of Restitution and Unjust more predictable, and more objectively determined than the implications of the Unjust enrichment is not a boundless doctrine, but is, instead, “narrower,

added; quotation omitted). However, “[w]hile it is said that a defendant is liable v. Cedars of Portsmouth Condo. Assoc., 146 N.H. 130, 133 (2001) (emphasis

Unjust enrichment is an equitable remedy, found where an individual equitable remedies, stating that a grant of relief is properly “exercised

passively accepts it”). The court erred, however, in ruling that it was sufficient accordance with, established principles of law.” follow from wrongful acts or where one “innocently receives a benefit and Butterfield, 122 N.H. 120, 127 (1982) (holding that unjust enrichment may case. See Petrie-Clemons v.

sound discretion of the trial court.” The trial court’s order acknowledged its own broad discretion in granting

of the particular situation.” Edwards, 151 N.H. 497, 499-500 (2004) (quotation omitted).

court, that “discretion must be exercised, not in opposition to, but in Id. Although awarding equitable relief is within the authority of the trial court’s ruling was clearly unreasonable or untenable to the prejudice of its unsustainable exercise of discretion, the district must demonstrate that the award of damages for an unsustainable exercise of discretion. Id. To show an (2008) (quotation omitted). Consequently, we review a trial court’s equitable

“The propriety of affording equitable relief in a particular case rests in the Attorney’s Fees), 144 N.H. 590, 594 (1999) (quotation and ellipsis omitted).

powers which allow it to shape and adjust the precise relief to the requirements and rulings.” We disagree. The trial court has “broad and flexible equitable substantial part of an employee’s compensation.”

p. 5 enrichment.

contracts. Clapp’s non-NHRS retirement plan was a part of her employment whether Clapp’s retirement benefits are within the scope of her employment

erred in allowing Clapp to recover damages under a theory of unjust

contract was valid and fully enforceable. Nor is there any dispute about BRODERICK, C.J., and DALIANIS and DUGGAN, JJ., concurred.

subject matter as Clapp’s unjust enrichment claim, we hold that the trial court contract. and because those contracts were valid and enforceable, covering the same made invalid, or where the benefit received was outside the scope of the Because the parties defined the employment relationship by contract,

enrichment and receive more than that to which she was contractually entitled. an unjust enrichment [claim].”). Clapp simply cannot sue for unjust express, enforceable contest the validity of Clapp’s employment contracts, and we assume that each contract that controls the parties ’ relationship will defeat School Dist. enrichment cannot coexist with a valid contract applies. The parties do not, 564 F. Supp. 2d 312, 315 (D. Del. 2008) (“[T]he existence of an Clapp’s unjust enrichment claim must therefore fail. See Tolliver v. Christina [include] pension plans, and group health, life, and disability insurance.”). 651, 654 (2006) (“[F] ringe benefits that complete a pay package . . . typically 621; see Howard Delivery Service, Inc. v. Zurich American Ins. Co., 547 U.S.

contracting parties where the contract was breached, rescinded, or otherwise

Based upon the record before us, the general rule that unjust

elements is present here. Restitution and Unjust Enrichment § 2 comment c at 16. None of these

See Restatement of Restitution § 107(1); Restatement (Third) of

is fixed exclusively by the contract.”). Unjust enrichment may be available to a valid and enforceable contract, the recipient’s liability to make compensation (Discussion Draft, 2000) (“Where a benefit is conferred within the framework of Restatement (Third) of Restitution and Unjust Enrichment § 2 comment c at 16 . . . or unless the other has failed to perform his part of the bargain.”); accordance with the terms of such bargain, unless the transaction is rescinded contract with another . . . is not entitled to compensation therefor other than in Restitution § 107(1) (1937) (“A person of full capacity . . . pursuant to a express contractual relationship exists between the parties”); Restatement of liability for unjust enrichment may accrue, “[w]here, as in the present case, no Pella Windows and Doors v. Faraci, 133 N.H. 585, 586 (1990) (holding that “acted in full compliance with a valid, express contract” (citations omitted)); Hampshire law and rejecting claim of unjust enrichment where defendant