Cloutier v. State

• Decision Date: 30 March 2012
• Docket Number: No. 2010–714.,2010–714.
• Citation: 42 A.3d 816,163 N.H. 445
• Court: New Hampshire Supreme Court
• Parties: Raymond A. CLOUTIER and another v. STATE of New Hampshire and another.

163 N.H. 445

42 A.3d 816

Raymond A. CLOUTIER and another

v.STATE of New Hampshire and another.

No. 2010–714.

Supreme Court of New Hampshire.

Argued: Aug. 26, 2011.

Opinion Issued: March 30, 2012.

Devine, Millimet & Branch, P.A., of Manchester (Ovide M. Lamontagne and Joshua M. Wyatt on the brief, and Mr. Lamontagne orally), for the petitioners.

Michael A. Delaney, attorney general (Anne M. Edwards, associate attorney general, and Laura E.B. Lombardi, assistant attorney general, on the brief, and Ms. Edwards orally), for the State.

Douglas, Leonard & Garvey, P.C., of Concord (Charles G. Douglas, III and David M. Howe on the brief, and Mr. Douglas orally), for the Board of Trustees of the New Hampshire Judicial Retirement Plan.

David R. Connell, of Concord, Theodore E. Comstock, of Concord, and Betsy B. Miller, of Concord, on the joint brief, for New Hampshire Local Government Center, New Hampshire School Boards Association and New Hampshire Association of Counties, as amici curiae.

HORTON, J., retired, specially assigned under RSA 490:3.

The State appeals the Superior Court's ( Brown, J.) ruling that RSA chapter 100–C (Supp.2011), the Judicial Retirement Plan, violates Part I, Article 23 of the New Hampshire Constitution. The petitioner and intervenors cross-appeal the court's ruling that salary raises provided for by Laws 2003, 311:3 and Laws 2005, 177:96 should not be included in calculating benefits under the prior retirement statutes. We affirm in part, reverse in part, and remand.

The petitioner, Raymond A. Cloutier, is a retired probate court judge. The six intervenors are retired supreme, superior, probate, and district court judges. We refer to them collectively as the petitioners. In October [163 N.H. 448]2008, Cloutier submitted a written request to the Board of Trustees of the New Hampshire Judicial Retirement Plan (board) asserting that his retirement allowance was erroneously calculated pursuant to RSA chapter 100–C, and that he was entitled to benefits under the retirement statutes that were in effect when he was appointed to be a judge. The board denied his claim and Cloutier filed a petition for writ of certiorari in the superior court. The parties subsequently filed cross-motions for summary judgment.

In response to the trial court's order, the parties filed a joint stipulation containing a chart with projected lifetime retirement payouts for Cloutier. The projected payouts included several separate calculations, comparing retirement benefits under the plan enacted pursuant to RSA chapter 100–C and the previous retirement statutes repealed by Laws 2003, 311:10. The parties disputed certain assumptions underlying the calculations, but not the mathematical calculations within the projections. As the stipulation provides,

The Parties stipulate that only the mathematical calculations ... are fair and accurate, and fully reserve the right to challenge the propriety of the following assumptions as a matter of law, so that the court may find that there are no genuine issues of material fact in dispute and rule on the following questions of law ...:

a. Whether the 10% raise given by Laws 2003, 311:3 should be included in calculating and projecting retirement benefits under the old plan;

b. Whether the 1.01% raise given by Laws 2005, 177:96 should be included in calculating and projecting retirement benefits under the old plan;

c. Whether future legislative salary increases are more appropriately determined by the average of salary increases given to sitting probate judges in the period since the new plan's inception (from January 1, 2005 forward), or, alternatively, the average [of] all legislative salary increases given to sitting probate court judges from 1991 to present;

d. Whether Laws 2003, chapter 311 and subsequent amendments to RSA chapter 100–C constitute a “substantial impairment” of Petitioner's and Intervenors' retirement benefits within the meaning of Part I, Article 23 of the State Constitution.

Following a hearing, the trial court granted summary judgment for the petitioners, concluding that the application of RSA chapter 100–C to judges who accepted their positions before its enactment results in impairment of contract rights in violation of the New Hampshire Constitution. The trial court, however, rejected the petitioners' assertion that the ten percent and one percent salary increases authorized in 2003 and 2005 should be included in calculating their benefits under the prior retirement statutes. This appeal followed.

The State raises two issues on appeal: (1) whether the trial court erred in ruling that RSA chapter 100–C violates Part I, Article 23 of the New Hampshire Constitution; and (2) in the event the trial court's ruling is upheld, whether RSA chapter 100–C is unconstitutional only as applied to judges who met the service and age requirements for retirement as of January 1, 2005. The petitioners cross-appeal, arguing that the trial court erred in ruling that the 2003 and 2005 salary raises are not properly included as “currently effective annual salary” when calculating their retirement benefits.

Prior to the enactment of RSA chapter 100–C, a series of statutes provided for retirement benefits to judges who retired after meeting specific service and age requirements. SeeRSA 490:2 (1977) (repealed 2003) (supreme court); RSA 491:2 (1977) (repealed 2003) (superior court); RSA 502–A:6–a (1977) (repealed 2003) (district court); RSA 547:2–a (1997) (amended 2003) (“Full-time probate judges ... shall be entitled to the same disability and retirement benefits as full-time justices of the district court”). When the petitioners were appointed to be judges, the prior retirement statutes were in effect.

Under the prior retirement statutes, as “additional compensation for services rendered and to be rendered,” a judge who retired upon attaining the age of seventy years having served as a judge for at least seven years, or upon attaining the age of sixty-five years having served for at least ten years, was entitled to receive for the rest of his or her life an annual amount equal to seventy-five percent of “the currently effective annual salary of the office” from which the judge was retired. RSA 502–A:6–a, III (repealed 2003); RSA 490:2, II (repealed 2003); RSA 491:2, II (repealed 2003). The statutes provided that a “sum sufficient to pay any and all benefits or compensation ... is hereby continually appropriated therefor” and that the “governor is authorized to draw his warrant for the payment thereof out of any funds in the treasury not otherwise appropriated.” RSA 490:2, VI (repealed 2003); RSA 491:2, VI (repealed 2003); RSA 502–A:6–a, VI (repealed 2003).

In 2003, the prior retirement statutes were repealed and replaced with RSA chapter 100–C. See Laws 2003, ch. 311. Implementation of the new statute was delayed until the Internal Revenue Service made a favorable determination as to the tax qualified status of the plan. See Laws 2003, [163 N.H. 450]311:11. The parties have stipulated that RSA chapter 100–C took effect on January 1, 2005. Between 2006 and 2009, the petitioners retired from full-time service.

Under the new retirement statute, membership in the judicial retirement plan is mandatory for any full-time supreme, superior, district or probate court judge. RSA 100–C:3. Retirement benefits are established as follows:

I. Any member who has at least 15 years of creditable service and is at least 60 years of age, or who has at least 10 years of creditable service and is at least 65 years of age, or who has at least 7 years of service and is 70 years of age may retire on a service retirement allowance....

II. A member who is at least 65 years of age with 10 years of creditable service may retire on a service retirement allowance equal to 75 percent of the member's final year's salary.

III. A member who is 70 years of age with 7 years of creditable service may retire on a service retirement allowance equal to 45 percent of the member's final year's salary. A member who is 70 years of age shall be granted an additional 10 percent over the 45 percent level for each year of creditable service the member has over 7 years.

IV. A member who is at least 60 years of age with at least 15 years of service may retire on a service retirement allowance equal to 70 percent of the member's final year's salary. A member who has at least 15 years of service and is at least 60 years of age shall be granted an additional percent over the 70 percent level for each year of continued service over 15 years.

V. Under no circumstance shall any service retirement allowance pursuant to this section exceed 75 percent of the member's final year's salary.

VI. Any member attaining eligibility for 75 percent of the member's final year's salary shall not be required to make employee contributions to the plan pursuant to RSA 100–C:14.

RSA 100–C:5, I–VI.

The new retirement plan is self-funding, relying upon contributions from the State and the judges. SeeRSA 100–C:13. Although the new retirement statute limits benefits to seventy-five percent of the judge's final year's salary, the board has the discretion to award cost-of-living adjustments to retired judges up to an aggregate amount of $50,000 per year, and to award more than that amount with the approval of the legislature. RSA 100–C:13, III(g); RSA 100–C:17. The legislature may approve cost-of-living adjustments in excess of $50,000 only if the plan's annuity fund earns at a level greater than the actuarial assumed rate of return approved by the board and the trust is at least ninety percent funded for the calendar year. RSA 100–C:17.

The State argues that the trial court erred in finding a violation of Part I, Article 23 of the State Constitution because the prior retirement statutes did not create contractual rights and, even if they did, those rights have not been substantially altered by RSA chapter 100–C. Because the parties rely only upon...