Petition of Randall Burns et al.

In 2012, the Keene School District (“District”) unilaterally moved the date it paid retiring teachers their Early Full Retirement Benefit (EFRB) to November 1. Keene School District v. Keene Education Association, NEA-NH, 174 N.H. 796 (2022) also at Apx. II at 11-17. 2 The EFRB is awarded to qualifying teachers who apply to retire early. Id. It was bargained for by the Keene Education Association, NEA-NH (the union representing Keene teachers) and the District. In 2022, in a separate but related action, this Honorable Court found that the District unilaterally moving the payment date was contrary to the plain language of the a (“CBA”). Id. This Honorable Court found that the District had no right to make this change without negotiating with the union representing the teachers. See Appeal of State of N.H., 138 N.H. 716 (1994). Because the payments were made in violation of the CBA, the Petitioners sought recalculation of their pensions at the New Hampshire Retirement System based on the fact the District should have paid a portion of their EFRB payments within 120 days of retirement. The NHRS denied this request based on an incorrect determination of law regarding fraud and consent. Petitioners appealed to this Court.

It is undisputed that the Keene School District unilaterally moved the initial payment date of the EFRB to November 1 to take advantage of the “120-day rule” contained in NH RSA 100-A: 1 XVII (a)3. Apx. II at 13- 14. Historically, the District had failed to consider the EFRB payments as Earnable Compensation and it wanted to ensure the payments were not included going forward. Id. The District reasoned that despite the plain language of Article 14.1 of the CBA setting the date of payment as July 1, Article 14.4 prohibited any NHRS contribution for early retirement stipend recipients. Id at 15, 17. Notably, the District did not share its interpretation of the CBA with the union representing the retiring teachers. Id at 16-17. By delaying its EFRB payments owed to Petitioners until November 1, the District experienced a one-time cost savings per petitioner while each Petitioner was harmed by losing up to hundreds of dollars in retirement compensation each month for the rest of their lives. Id. at 14. In February 2022 this Honorable Court disagreed that the CBA supported the District’s interpretation. See Apx. II at 11.

At the time of their retirement the District convinced the Petitioners to agree with its interpretation of the CBA by knowingly making three independent false statements to the Petitioners via a letter granting them the benefit and also in the EFRB agreement they were required to sign: (1) the

3“Earnable compensation is the compensation paid to a member that may be included in calculating Average Final Compensation (AFC).” https://www.nhrs.org/members/plan- details/earnable-compensation (last accessed January 23, 2024). Compensation paid after te achers retire can be Earnable Compensation provided the payment is made within 120 days of retirement, any later and the payment will not count (the “120-day rule”). If the payment is outside of 120 days, then the employer and employee do not need to make their statutory pension contributions into the pension system. The Petitioners would have contributed 7% and the District would have contributed 11.3%-15.67% if payments had been made starting July 1.

District asserted it was complying with the CBA; (2) it described the payment delay as a benefit to the Petitioners when it was actually a detriment; and (3) it portrayed the delay as a mutual benefit when it was really only a benefit to the District. Apx. II at 11, 12. 4 Based upon the District’s misrepresentations in the letter and the agreement, Petitioners agreed to these terms of the EFRB without consulting with their union or otherwise questioning the District’s representations. Apx. II at 13-14. Had the Petitioners known the truth, or had the District notified the union, Petitioners would have learned that the delay in payments benefitted the District only and significantly decreased Petitioner’s pension payments for life. Petitioners never would have agreed to the delay had they known the truth. Apx. II at 13-14.5 The District has stipulated that the delay in payment of the EFRB occurred through no fault of the retirees. Apx. II at 16.

After learning of the District’s misrepresentations, a group of eight retired teachers 6 who were harmed by the District’s actions petitioned the New Hampshire Retirement System Board of Trustees (“NHRS”) for Contribution and Earnable Compensation Adjustment. Petitioners asserted that they should have received the payment within 120 days of retirement under the CBA, but as a result of the District’s misrepresentations, “through no fault of their own, ” and “without [their] consent, ” they received it after 120 days. R 7. at 1-18; N.H. RSA 100-A:1, XVII(a). Abohatab, Meehan, and Sharron filed their petitions in 2020 and Corwin, Greenwald, Morris, Ohlson and Stitham filed their petitions in 2022. The petitions were eventually combined and the NHRS scheduled a due process hearing in front of its Hearings Examiner to hear the Petitioners request in accordance with Ret. 200 and Ret. 304. After a series of preliminary procedural steps and continuances, the parties determined to proceed on written arguments, stipulated facts, affidavits of the Petitioners, and oral argument rather than an evidentiary hearing. Apx. I at 10-11. The District ultimately withdrew its objection to the petitions prior to the hearing but remained an Intervenor. R. at 210-212. There were no objections from the District or the attorney for the NHRS Staff to the stipulated facts and the affidavits. The Hearings Examiner accepted all evidence into the record.

The Hearings Examiner ignored the clear evidence of fraud and misrepresentation and the Petitioner’s inability to actually consent to a change in the CBA and determined, which the NHRS Board affirmed, that “[it was] not persuaded that the statute requires proof that [Petitioners] were informed of the consequences of the delay” and that mere written notice of the date being moved was sufficient to obtain consent. Apx. I at 16. The Petitioners moved for reconsideration. R. at 410-411. The Hearings Examiner denied reconsideration on July 11, 2023, which the Board affirmed the same day, stating that “there was no evidence of either an untruthful representation or lie.” Apx. I at 9. Additionally, the NHRS erroneously held that there was no fraud by omission because the District did not have any more information than the Petitioners about the consequences of the delay. Apx. I at 8. This appeal followed.

The NHRS ignored the inability of the Petitioners to consent to waiving terms of the CBA and the misrepresentations of the District and its bad faith actions and erroneously found that the Petitioners both consented to having their EFRB payments delayed and that the delay was their fault, unreasonably holding there was “no [other] reasonable interpretation” of these circumstances. Apx. I at 17. First, the Petitioners had no power to consent to the late payments because they are not parties to the CBA which governs the benefit’s terms. There can be no doubt the District knew the CBA governed the timing of these payments and any change to these terms needed to be negotiated with the union. The District ignored that fact, failed to contact or negotiate with the union, and induced the Petitioners to circumvent the CBA. Second, the Petitioners’ “consent” to the delayed payments was the product of fraud insofar as the District represented to Petitioners that the proposed change in timing of the EFRB complied with the CBA, it was a mutual benefit to both parties and that the employee and employer contributions were something to be avoided like a penalty. Because Petitioners “consent” was induced by fraud it is invalid.

The NHRS found that because the District provided some technically true information to the Petitioners, there was no misrepresentation. However, once the District undertook to provide some information to the Petitioners, they were required to provide all relevant information. If the Petitioners had known the whole story they never would have agreed to the delayed payments. Even if this Honorable Court finds the District’s actions were not fraudulent, this “half-truth” is a material misrepresentation which voids the “consent” of the Petitioners. At the very least, the District’s actions amount to bad faith. All contracts include an implied covenant of good faith and fair dealing. Here, the District illegally approached the Petitioners directly without their union and falsely stated the terms of the CBA in order to induce the Petitioners to waive the benefit they were entitled to under that contract. Accordingly, the District’s bad faith negotiations invalidate any consent given by Petitioners. Lastly, the EFRB contracts were contracts of adhesion which are unconscionable by reason of public policy.

The NHRS’ decision denying an earnable compensation adjustment should be overturned. The Petitioners request that this Honorable Court order that the payments that should have been made to the Petitioners from July 1- October 31 of their retirement year are earnable compensation and order notices of contribution adjustment for that amount be issued by the

Individuals whose employment is governed by a CBA are not parties to that agreement and therefore cannot make any changes to or waive its terms. NH RSA 273-A:11 (granting the exclusive right to collectively bargain on behalf of employees to the exclusive representative certified by the PELRB) Any changes to a CBA have to be negotiated by the union and employer whether through a traditional contract negotiation or some kind of side agreement. NH RSA 273–A:1, XI; :3, I; and:5, I(e); See also Appeal of Franklin Educ. Ass'n, NEA-New Hampshire, 136 N.H. 332, 336 (1992) (“Together, RSA 273–A:1, XI; :3, I; and:5, I(e) compel the school board to negotiate wages in good faith with the association's exclusive representative.”) When an employer approaches an individual employee about accepting changes to the CBA, it is called “direct dealing” and is an unfair labor practice. Appeal of State of N.H., 175 N.H. 327, 335 (2022). This is because “[i]If an employer can negotiate directly with its employees, then the statute's purpose of requiring collective bargaining is thwarted.” Franklin Educ. Ass'n, NEA-New Hampshire, 136 N.H. at 336. The NHRS decision is unreasonable and arbitrary because it holds that individual Petitioners can agree to terms of employment which are contrary to the CBA. This holding is untenable and a violation of the basic tenants of labor law and state statute. In prior related case involving these facts, this Honorable Court found that the District never negotiated with the union over changing the payment date to November 1. Apx. II at 11. The District approached the Petitioners directly, seeking their assent to a change in the CBA terms, although they were not explicit about what they were doing. The Petitioners have no authority to change those terms and therefore it was impossible for them to consent to the delayed payment. The Petitioners’ “consent” to the late payments is therefore void as a matter of law and the NHRS decision holding that they consented to the payment cannot stand.

This Honorable Court’s holding in Farmington is consistent with this argument. In Farmington, the Court held that the NHRS is not bound to affirm payments are earnable compensation just because the union and employer negotiated they would be. Petition of Farmington Teachers Assoc., 158 N.H. 453 (2009). Here, the CBA did not say the payments were earnable compensation. The CBA simply named the payment date as July 1. It is RSA 100-A:1, XVII(a)’s “120-day rule” which defines payments made to employees within 120 days of retirement are earnable compensation. Had the District made the payments commencing on the day the union and the District negotiated pursuant to the CBA, the payments would have been earnable compensation, and this would have been consistent with the law.

In order for the late payments to count toward the Petitioners’ pensions, they must prove that they did not consent to the late payments and that the late payment was not their fault. NH RSA 100-A:1, XVII(a). Although the legislature included the necessity to prove both consent and fault in the statute, they are not separate concepts in this matter but fundamentally intertwined. The Petitioners had no authority to consent to the late payments at all. But, even if they did, they still would not have consented because it was consent induced by fraud. Consent which is the product of fraud is not consent. Jones v. Emery, 40 N.H. 348, 350 (1860).

Petitioners allowed the late payments because they were duped into providing consent. Accordingly, the “consent” was not freely given. Since consent was not freely given, then it follows that it is also not their fault the payment was made late. Further, the Petitioners and the District stipulated that the delayed payments were not the fault of Petitioners. Apx. II at 16.

(a) Petitioners’ consent is invalid because it was fraudulently induced

“The principle of the common law is well and distinctly settled, that positive fraud vitiates everything--contracts, obligations, deeds of conveyance, and even the records and judgments of courts, incontrovertible as they are on every other ground; and contracts entered into upon fraudulent representations are voidable at the election of the party defrauded.” Jones v. Emery, 40 N.H. 348, 350 (1860); See also Bursey v. Clement, 118 N.H. 412, 414 (1978) (When a party makes an affirmative representation of a material fact intended to induce the other party to enter into a contract, the party making the representation has a legal duty to tell the truth). The Petitioners do not call the District’s actions fraud in an effort at hyperbole or drama. Fraud is the accurate legal name for the District’s conduct in this case.

“New Hampshire law recognizes that the procuring of a contract or conveyance by means of fraud or negligent misrepresentation is an actionable tort and hence can be raised as a defense to a claim based on the agreement.” Van Der Stok v. Van Voorhees, 151 N.H. 679, 681–82, (2005). The EFRB Agreement was a contract the District required employees to sign in order to receive the EFRB. The Petitioners allege they were fraudulently induced to enter into the contract with the District and the NHRS has upheld the District’s contract, contrary to these allegations. Therefore, the framework of the defense of fraud in a breach of contract action is instructive. And on the facts of this case, fraud is evident. Elements of Fraud “The party seeking to prove fraud must establish that the other party made a representation with knowledge of its falsity or with conscious indifference to its truth with the intention to cause another to rely upon it…[and] must demonstrate justifiable reliance. Van Der Stok, 151 N.H. at 681–82. See also Restatement (Second) of Contracts §162 (1981) (“A misrepresentation is fraudulent if the maker intends his assertion to induce a party to manifest his assent and the maker (a) knows or believes that the assertion is not in accord with the facts or (b) does not have the confidence that he states or implies in the truth of the assertion.”) Element 1: False Representations Made by the District

The District made three false representations in its letter to the Retirees about the terms of their EFRB (and upheld the same in the EFRB Agreement itself). First, the District represented that the EFRB followed the CBA when it did not. Second, the District represented that the purpose of the deduction was to benefit both the District and the Petitioners when that was not the case. Third, the District called the Employer and Employee Contributions “NHRS wage deductions” when it was well aware these were not simply “deductions.”

The District said in both the acceptance letter and the EFRB Agreement that it was paying the benefit in compliance wi th the CBA. It was not. The CBA’s plain language said the benefit was to be paid from July 1. Apx. II at 11. The District had never asked the union whether it agreed to its interpretation of the CBA, in the face of plain language saying the opposite. Id. at 16-17. Rather, the District made the change unilaterally, yet it reassured Petitioners in multiple writings that this payment was unequivocally in compliance with the CBA. Moreover, when asked why it delayed the payment, the District defended its action to this Honorable Court saying that not paying contributions was a “past practice” that had to be upheld. Apx. II at 6-7. But, by their very nature, past practices are ancillary terms of employment which are not explicitly present in the CBA. See Appeal of N.H. Dep't of Corrections, 164 N.H. 307, 309 (2012). Because at the time the District reasoned they should move the payment because of a past practice, it means the District knew the delayed payment date was not a term of the CBA yet it represented to the Petitioner’s that it was. Additionally, at the time, the District reasoned that it made the decision to move the payments because it had not budgeted for them and because, in its reading of the CBA, the CBA prohibited retirees from receiving any additional benefits upon retiring with the EFRB. Apx. II at 15-16. Yet, the District did not tell the Petitioners that they made the payments in

8 “The School District does not argue that the language in Section 14.3 is ambiguous or silent in establishing July 1 as the date on which early retirement payments begin.” Apx. II at 6.”

November for the purpose of denying a benefit or to save money. Instead, the District asserted that it was moving the payment for the purpose of benefiting both the Petitioners and the District saying the payments would start November 1 “so you and the Board [of Education] do not incur additional NHRS wage deductions from your stipend.” Apx. II at 13. (emphasis added). This was not true. The District delayed the payment for its benefit, not the benefit of the Petitioners. Even if the District believed that the fact that Petitioners would not need to make a contribution was a benefit, it failed to disclose that this unauthorized change in the CBA would also result in significant harm and financial loss to Petitioners in the form of reduced retirement payments.

Lastly, the District claimed that the Employer and Employee Contributions were “NHRS wage deducti ons.” Employer and Employee Contributions are not simply “wage deductions.” Wage deductions is the name for the broad category of wages withheld from an employee’s total earnings for any purpose, either mandatory or voluntary, such as income, Medicare, and Social Security taxes, garnishments, and health insurance benefits. Employee NHRS contributions would fit under the broad category of wage deductions, but Employer contributions would not. Employer contributions are additional payments made by the Employer based on a statutory percentage of the employees’ wages (RSA 100-A:16, I) which is what the District was trying to avoid. Apx. II at 11. More importantly though, by lumping in the NHRS contributions with the name for other unpopular deductions like taxes, and not being specific about what it was doing, the District purposefully muddied the waters.

Additionally, the waters were especially muddy because the District couched the avoidance of the deductions as if it were doing the employee a favor (“this is so you and the Board [of Education] do not incur additional NHRS wage deductions from your stipend”). In case there is any doubt about the District’s commitment to this deception, when asked to explain this by the first retiree to notice it, the District’s HR representative said “The [School] District, and you as the retired member do not want to incur any earnable compensation penalties.” Id. at 14, 17. (emphasis added). Of course, employees would like to avoid unnecessary taxes, and certainly any “penalties” but the same cannot necessarily be said for a “deduction” that would increase their pension substantially.

The NHRS unreasonably found that “the statement that the delay would result in no contributions being made on the payments was in fact a true statement and not a misrepresentation or a lie.” Apx. I at 8. The NHRS’ decision is arbitrary and unreasonable on this point. First, it rewrites what the District said. The District never used the word contribution. As discussed above, the District’s use of the word “deduction” without more information changes the impact of that statement to the Petitioners. Apx. II at 13. For the NHRS to reinterpret the statement to fit its decision creates an unjust and unreasonable result. The words used by the District were chosen specifically and so these are the words on which this decision must be made.

Second, in holding that “no contributions being made on the payments was in fact a true statement” the NHRS decision ignores the obvious misstatements which were made at the same time, namely that the Petitioners would avoid a deduction or a penalty, that the delay complied with the CBA, and that the delay was to benefit both the District and the Petitioners. The “actual notice” of the delay (that no contributions would be made) cannot be read in a vacuum so as to excuse the other affirmative fraudulent statements. This is not a principle upheld by this Honorable Court which has held that “[t]he law does not temporize with trickery or duplicity. The law should not, and does not, permit a covenant of immunity to be drawn that will protect a person against his own fraud. Such is not enforceable because of public policy.” Van Der Stok, 151 N.H. at 682–83 (internal citations omitted).

Element 1 Continued: Conscious Indifference to the Truth

Alternatively, if this Honorable Court does not agree that the District made positive fraudulent statements, the Distr ict’s actions were still fraudulent because they were consciously indifferent to the truth. “The party seeking to prove fraud must establish that the other party made a representation with knowledge of its falsity or with conscious indifference to its truth with the intention to cause another to rely upon it…[and] must demonstrate justifiable reliance. Van Der Stok, 151 N.H, at 681–82 (emphasis added). Conscious indifference was present here because, when the District only told part of the story to the Petitioners (by saying that deductions would be avoided, as if that was a good thing) and disregarded the rest, it was completely indifferent to the fact or possibility that this was not a good thing for Petitioners. See Black’ s Law Dictionary 11 th Ed. 2019 (defining conscious indifference a conscious disregard for the harm one’s actions would cause the interests and rights of another).

First, the District knew when it made these representations that the delay was not a positive outcome for the Petitioners because the District’s motivation for moving the payment date was to purposefully deny them a “benefit.” Apx. II at 15; See also R. 276. The District believed that article 14. 4 of the CBA excluded the NHRS contributions because the provision said retirees “shall not be entitled to any benefits whatsoever except the stipend.” Id. (emphasis added). Therefore, at the very least, the District knew these contributions were beneficial to the Petitioners and by not telling them, completely disregarded the harm it would cause the Petitioners.

Additionally, even if the District was not sure the extent of the harm this could cause Petitioners, it did not tell the m and rather acted only in its self-interest by couching the benefit in a way to ensure the Petitioners accepted it. The District wanted the Petitioners to accept these terms so they left out anything about how the delay might actually be more significant than it was letting on or that the Petitioners should consult the NHRS or their union.

The NHRS unreasonably held that it was not fraudulent when the District left out these potential harms because “[d]istrict employees do not have the expertise to provide advice on the effect of the delay on an individual teacher’s pension.” First, it is unreasonable to hold that the office that is charged with assisting employees with their benefits would not know, at a base level, that less money contributed toward an employee’s pension in their last year of employment means their pension would be lower than if they had gotten more money in their last year. This is particularly the case because the District was moving the payment to avoid any additional benefit to the Petitioners. Id.

Further, the District need not know how this would affect each individual teacher to be consciously indifferent to the truth of the fact it might affect them. “If the maker, lacking confidence in the truth of his assertion that he states or implies, nevertheless chooses to make it as one of his own knowledge rather than one merely of his opinion” then it is a fraudulent statement. Restatement (Second) of Contracts §162 (1981) Comment (b). “Representations made by one who is conscious that he has no sufficient basis of information to justify them are as actionable as representations made with positive knowledge of their falsity, because in making them the speaker misrepresents not only the external facts but also the extent of his own information.” Mertens v. Wolfeboro Nat. Bank, 119 N.H. 453, 456 (1979). The District confidently proclaimed the purpose of the delay to the Petitioners when it had no need to do so, and according to the NHRS, did not even have the knowledge to make such a pronouncement. The District wanted the Petitioners to agree to the arrangement, so it fashioned a letter that would induce that agreement regardless of whether it was the whole truthful story or not. At the very least, that action is consciously indifferent.

Element 2: Justifiable Reliance The third element of fraud is justifiable reliance. Justifiable reliance is determined by (1) whether a reasonable person would have regarded the facts misrepresented by the District to be important in determining their course of action and (2) whether the District knew or had reason to know that the Petitioners were likely to rely on the misrepresentation. See Tessier v. Rockefeller, 162 N.H. 324, 333 (2011). “The requirement of justification is usually met unless, for example, the fact to which the misrepresentation relates is of only peripheral importance to the transaction or is one as to which the maker's assertion would not be expected to be taken seriously.” Restatement (Second) of Contracts §164 (1981). “The recipient's fault makes his reliance unjustified only in extreme cases where he has failed to act in good faith and in accordance with reasonable standards of fair dealing.” Restatement (Second) of Contracts §172 (1981).

The facts misrepresented by the District were that the payment delay was a benefit to both the District and the Petitioner, that these “NHRS wage deductions” were something to be avoided, and that the District’s actions followed the CBA. On their face, all three of these facts are relevant and important to a person deciding whether to accept the EFRB. The representation that the CBA was being followed signaled that the terms presented were mandatory and were agreed upon by the Petitioners’ representative. Of course, the District knew the Petitioners were likely to rely on this. It was shorthand for, “this has already been decided for you and you must comply.”

Further, the assertion that the “deductions” were something to be avoided would induce reliance because a reasonable person would want to avoid a “penalty” such as an unnecessary wage deduction if given the opportunity. And, the assertion that the payment date benefited both the District and the Petitioners created the illusion that if it was good for both parties, it must be a good thing. The District had reason to know the Petitioners were likely to rely on their representations because they were generally positive things a reasonable person would rely upon in making their decision. Of course, there was no decision to be made since the terms were presented to the Petitioners as the nonnegotiable terms of the CBA. Apx. II at 13.

Additionally, the Petitioners’ reliance on the representation of the District’s Human Resources representatives was justified because it is the function of HR to be knowledgeable about employee pay and benefits. See SAU 29 Human Resources Department webpage.

9; see also Bergeron v. Dupont, 116 N.H. 373, (1976). (A purchaser generally is justified in relying on material statements of fact concerning matters peculiarly within the seller's own knowledge); Dawe v. American Universal Ins. Co., 120 N.H. 447 (1980) (insured justifiably relied on the representations of an insurance adjuster hired by her insurance company regarding a settlement for injury). The Petitioners relied on the District to administer their pay and benefits for decades; it is perfectly reasonable that they would assume their employer, through their Human Resources professionals would be giving them information in good faith which they could rely upon. Even though there is sometimes an adversarial relationship between the HR department and the union because of differences of opinion, that does not discharge the HR department, as an agent of the District, from its duty to operate in good faith. See also NH RSA 273-A:3, I; Appeal of Sanborn Reg’l Sch. Bd., 133 N.H. 513, 518 (1990) (finding that all CBAs contain an implied duty of good faith and fair dealing).

9 https://www.sau29.org/apps/pages/index.jsp?uREC_ID=1437187&type=d&pREC_ID=1475640 (b) Fraud Voids Consent Upholding the NHRS’ decision that despite these fraudulent representations, there was valid consent woul d allow deception and reward dishonesty. “Fraud destroys all consent. It is the purpose of the law to shield only those whose armor embraces good faith.” Van Der Stok, 151 N.H. at 682–83 (emphasis added) (internal citations omitted). It would also be inconsistent with other diverse areas of New Hampshire law which hold that consent cannot be achieved through fraud. See Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 68 (2010) (forced arbitration or forum selection clauses are invalid when fraud is used to generate consent, even in light of strong public policy reasons favoring these provisions.); RSA 170- B:10; see also In re: Adoption of Baby C., 125 N.H. 216, 224 (1984) (Natural parents can challenge an adoption if consent for the adoption was originally the result of fraud.); and Wyle v. Lees, 162 N.H. 406, 412 (2011) (Misrepresentations aimed at getting a buyer to purchase property are actionable as torts). For all the forgoing reasons, finding that the Petitioners consented to the late payments despite the District’s fraud would upend one of the very core tenants of legal reasoning in New Hampshire: consent through fraud is no consent at all.

If the Court determines the District's conduct was not fraudulent, the lesser tier of deceit is misrepresentation. A contract can still be avoided if the maker makes a material misrepresentation. Restatement (Second) of Contracts §162 (1981) (“Although a fraudulent misrepresentation need not be material in order to entitle the recipient to relief under the rule stated in §164, a non-fraudulent misrepresentation will not entitle him to relief unless it is material”). A material misrepresentation is “an assertion that is not in accord with the facts” which is capable of influencing an outcome. Id. §159; Kungys v. United States, 485 U.S. 759, 786–87 (1988). It was a material misrepresentation for the District to say it was complying with the CBA. The Petitioners affirmed that this misrepresentation induced them to accept the EFRB. Apx. II at 13-14. Additionally, it was a material misrepresentation to assert that the pension contributions were “NHRS wage deductions” to be avoided and that the payment delay was a mutual benefit. The NHRS held that these statements were technically true and therefore could not be false. Apx. I at 8. But, these kinds of half-truths or partial disclosures have been found to be material misrepresentations. Smith, 103 N.H. at 559. The NHRS also erred by holding that, in the face of the NHRS’ half-truths, the Petitioners had an obligation to verify whether it was true or not. Id. That is not the law. Once the District provided some information, it was obliged to provide complete information and the Petitioners own failure to verify the truth does not excuse the misrepresentation. Id. (holding that "had the defendant made no representations concerning the water her position would be well taken. But in this case, the defendant undertook to describe the quality of the water, and did so in an accurate, but findably incomplete manner. The Trial Court found that her failure to state the probable cause of the contamination was ‘somewhat less than candid, ’ or in effect a half-truth, tantamount to falsehood. Since she undertook to speak, the circumstances imposed upon her a duty not to mislead."); See also Murphy v. Cartwright, 202 F.2d 71 (1953)(executor of estate perpetrated a fraud on beneficiary when he did not disclose the value of the estate and the full extent of her interest therein before convincing her to sign a quit claim deed disclaiming her interests); c.f. Ingaharro v. Blanchette, 122 N.H. 54, 57 (1982) (Holding that sellers made no statements about the adequacy of their home’s water supply to buyer and therefore buyers could not claim misrepresentation because no representation was made). The District could have chosen to provide no reason at all for the delay in which case there would have been no representation for the Petitioners to rely on. But instead, the NHRS chose to tell only half of the story to Petitioners. The NHRS unreasonably held that it was “not persuaded that the statute requires proof that [the Petitioners] were informed of the consequences of the delay by the District.” Apx. I at 17. However, once the District undertook to provide some information to Petitioners, it was required to provide complete information and therefore obtain Petitioners “informed consent.” Consent cannot be achieved through fraud, misrepresentation, or bad faith. See Rethinking Informed Consent, by Professor Peter Schuck, 103 Yale LJ 899 (1994) (Writing that notice and consent are only valid when they are the result of truthful representations) See generally U.S. Const. Amend. XIV, § 1; Folger v. Corbett, 118 N.H. 737, 738 (1978) (Doctors have a duty to obtain informed consent prior to providing care); Miranda v. Arizona, 384 U.S. 436 (1966) (People cannot be forced to provide information against themselves without being both informed of their rights and waiving them). In this case, the consent required by RSA 100-A:1, XVII(a) is synonymous with informed consent because otherwise the Court would be condoning consent obtained through purposeful misinformation.

The NHRS held it was “not persuaded that the District was in any better position than the retiring teachers to understand the potential consequences of any individual teacher’s pension of delaying payments.” Apx. I at 8. If that was in fact the case, then the District should not have provided any information at all for the Petitioners to rely on. By providing a reason why the delay was good, the District took on the duty of accurately and completely informing the Petitioners about the delay and why it was being instituted. Alternatively, it could have suggested that the Petitioners consult the NHRS, their union, or their financial advisors before deciding to accept the terms of the EFRB. But, the District did not do that because they did not want the Petitioners to object.

The NHRS unreasonably held that because two early retirees, Randall Burns and Scott Hyde, received the same letter and protested the delay, the Petitioners and all the other retirees should have been able to identify that they should have objected as well. Apx. I at 17. The NHRS places the fault squarely on the Petitioners for not sniffing out the misrepresentations (while also finding no misrepresentations were made) and says that the fact the other teachers figured out the deceit means the Petitioners could have also figured it out and were therefore at fault for the delay. This is unreasonable and not the law because if it were, it would lead to unjust results and shift the burden to victims of fraud. See Smith v. Pope, 103 N.H. 555 (1961). Just because one person recognized a fraud, does not make prior fraud any less fraudulent.

Moreover, inexplicably, the NHRS unreasonably held that there was no misrepresentation because the District did not stipulate that it misrepresented anything. Apx. I at 8. But there need not be an admission of a misrepresentation for the recipient to meet its burden as demonstrated by the case law cited throughout this brief where those accused of fraudulent misrepresentation of denied it throughout their proceedings. Here, the record shows clear misrepresentations on the part of the District regardless of whether it admits that's what it was doing.

IV.

Every contract contains the implied covenant of good faith and fair dealing which requires the District to act in good faith in administering both the CBA and the EFRB. Dawe v. American Universal Ins. Co. 120 N.H. 447, 449-50 (1980); Appeal of Sanborn Reg’l Sch. Bd., 133 N.H. 513, 518 (1990). The District illegally approached the Petitioners directly without their union and falsely stated the terms of the CBA in order to induce the Petitioners to waive the benefit they were entitled to under that contract. The District never included the union on any communications it was having with the Petitioners which demonstrates its efforts to conceal its actions. Instead, it claimed it was complying with the CBA when it clearly was not. These are bad faith acts and the agreement of the Petitioners to accept the delay should be voided because of them. “The law does not temporize with trickery or duplicity... It is the purpose of the law to shield only those whose armor embraces good faith.” Van Der Stok, at 682–83 (internal citations omitted).

The Early Retirement Stipend Agreements that were required to be signed by each Petitioner are void because they are directly contrary to the CBA. But, to the extent the Petitioners are held accountable for their “consent” because they accepted the District’s terms, the Petitioners had no choice in the terms of the agreement. The EFRB Agreements were essentially “contracts of adhesion.” Contracts of adhesion are “standard- form contract[s] prepared by one party, to be signed by another party in a weaker position, usually a consumer, who adheres to the contract with little choice about the terms.” Black's Law Dictionary (11th Ed. 2019). Contracts of adhesion are void as unconscionable because the imbalance of power is so great that there can be no genuine choice to enter into the contract terms and therefore there is no true contract. See Colonial Life Ins. Co. of Am. v. Elec. Data Sys. Corp., 817 F. Supp. 235, 241 (D.N.H. 1993). Without a genuine choice, there can be no consent.

The form contract was presented to the Petitioners as the standard terms to receive the benefit. Apx. II at 13-14. There was no offer to negotiate or discuss the terms. The District did not inform the retirees that they had an option as to when the payment was made, whether in compliance with the CBA or on the District’s delayed schedule. Apx. II at 16. None of the Petitioners thought that these terms were negotiable. Therefore, any consent to be gleaned from the Petitioners signing the EFRB Agreements or accepting the benefit payment date cannot stand, as there was never true consent by the Petitioners.

Contracts of adhesion disadvantage individual teachers due to the imbalance of power between them and their employer. The union is on a more equal footing. However, the District was hiding their actions from the union, so they were never able to step in and assist. Apx. II at 6-7.

For the aforementioned reasons, it is clear that none of the Petitioners consented for the EFRB payments to be made outside the 120- day window. In addition to these legal arguments though, it is plainly obvious that no reasonable person would knowingly agree to reduce a guaranteed lifetime financial benefit just so they could avoid a few one- time contributions. These Petitioners earned the EFRB through hard work and dedication to the District and their students. It is only fair that these Petitioners receive what they earned.

The Petitioners request this Honorable Court:

2. Find that the Petitioners did not consent to the delayed payments and that the delayed payments were not their fault.

3. Order that payments that should have been made between July 1- October 31, but were made after November 1, are earnable compensation.

4. Order that the NHRS accordingly issue notices of contribution adjustment to the Petitioners.

The Plaintiff, Randall Burns, et. al., requests 15 minutes of oral argument before the full Court, argument to be presented by Attorney Esther K. Dickinson.

The undersigned certifies that: (1) each appealed decision that is in writing is being submitted at the time of brief filing in Appendix I in accordance with Supreme Court Rule (16)(3)(i); (2) pursuant to New Hampshire Supreme Court Rule 26(7) that this brief complies with New Hampshire Supreme Court Rules 26(2)–(4) and 16(11). Counsel also certifies that the portion of the brief from “Questions for Review” to “Request for Oral Argument” does not exceed 9, 500 words.

(3) the undersigned have complied with Supreme Court Rule 16(10) and 26(2) by forwarding a copy of the foregoing BRIEF OF PETITIONERS through the e-filing system of this Court on this 12 the day of February, 2024, to the Defendant’s counsel, to the Intervenor’s counsel, and to the Attorney General, at the following addresses: Peter Foley, Esq. (Counsel for the NH Retirement System) NH Bar #828 P.O. Box 2753 Concord, NH 03302-2753 (603) 303-8176 foleypt@comcast.net Peter Phillips, Esq. (Counsel for Keene School District) N.H. Bar #11030 Soule, Leslie, Kidder, Sayward & Loughman, PLLC 220 Main Street Salem, NH 03079 (603) 898-9776 phillips@soulefirm.com)

Office of the Attorney General 33 Capitol Street Concord, NH 03301 attorneygeneral@doj.nh.gov