Carew, et al. v. State, 91-E-532-B (Merrimack Super. Ct., 1992)

8/9/2019 Carew, et al. v. State, 91-E-532-B (Merrimack Super. Ct., 1992)

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THE STATE OF NEW HAMPSHIREMERRIMACK, SS.UPERIOR COURT* * * * * * * * * * * * * * * * *

*JAMES CAREW AND ALFRED J.T.RUBEGA *

V . *STATE OF NEW HAMPSHIRE ** * * * * * * * * * * * * * * * *

ORDER

91-E-532-B

The State has filed a motion to dismiss the above-ca ptionedequity action for failure to state a claim. The pla intiffs objectto this motion and have filed a motion for summary judgment. TheState concedes that there are no issues of material fact in dispute,but asserts that if the Court does 'not dismiss this action, summaryjudgment should be entered for the State, not the plaintiffs. Ahearing on this matter was held on January 2, 1992. The undisputedfacts are as follows:

Plaintiff Al Rubega was commissioned to se rve as Director ofthe Office of Securities Regulation for a term endin g March 31,1994. Likewise, plaintiff James Carew was commissioned to serve asChief Investigator for the Office of Securities Regulation with a


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term of office ending March 31, 1992. Effective July 1, 1991Chapter 355 of the Laws of 1991 eliminated the plaintiffs' positionsmany months prior to the termination date of their respectivecommissions by abolishing the Office of Securities Regulaticnand shifting the duties of that office to other state agencies.The parties concur that pursuant to Part II, Article 5 of theState Constitution, the legislature may recognize or even abolishcertain government positions. However, the parties disagree as to

whether during such reorganization, commissioned employees may beterminated from their offices without pay.

The State maintains that no contract existed between the Stateand the plaintiffs, and therefore, the plai ntiffs have failed tostate a claim upon which relief may be granted. Additionally, theState asserts that it has not violated the wage-claim statute,RSA 275:42 et seq., because the State is not an emplo yer withinthe meaning of that statute. Finally, the State claims that thisaction is barred by sovereign immunity.

On the other hand, the plaintiffs maintain that a contractualrelationship between parties was created under RSA 400-A:43, :I and

:46. The plaintiffs contend that pursuant to RSA 4:1 commissionedofficers of the State may only be removed for cause. Thus, theplaintiffs claim that they each have a due process property interest


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in their respective job positions and a vested right to compensationtherefrom. The plaintiffs assert that providing procedural safeguards

"commensurate with the extent of [their] reliance on the expressterms of [their] commission[s] comports with the important policyof attracting and retaining qualified individuals in the serviceof this State." Blake v. State, 115 N.H. 431, 434 (1975); see alsoKing v. Thomson, 119 N.H. 219, 22 1 (1979). Additionally, the plain-tiffs claim that Chapter 355 of the Laws of 1991 which abolishesthe Office of Securities Regulation cannot be retroactively appliedbecause it affects substantive rights.

In ruling upon the motion to dismiss, "all facts properlypleaded are assumed to be true, and the reasonable inferences there-from are construed most favorably to the plaintiff." Morvay v.

Hanover Ins. Cos., 127 N.H. 723, 724-25 (1986) (quoting Lawton v.Great Southwest Fire Ins. Co., 118 N.H. 607, 610 (1978)). TheCourt will deny the motion if "the [plaintiff's] allegations arereasonably susceptible of a construction that would permit recovery."Rounds v. Standex International, 131 N.H. 71, 74 (1988) (quotingCollectramatic, Inc. v. Kentucky Fried Chicken Corp., 127 N.H.318, 320 (19 85)). Construing the facts as pleaded in the light mostfavorable t o the plaintiff, the Court finds that based o n theplaintiffs' allegations, recovery may be possible. Therefore,


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dismissal is inappropriate.However, as the parties concur on all of the material facts,

the Court must apply the applicable law and render summary judgmentfor the appropriate party. As a threshold matter, the Court mustdetermine whether the employment relationship between the plaintiffsand the State gave the plaintiffs a due process property interestin their respective positions. The State denies that any contractualrelationship exists between it and the plaintiffs and claims that

the plaintiffs, therefore, have no property interest and no entitle-ment to compensation. The State's position would essentially treatcommissioned officers as employees at will who can be stripped oftheir offices any time the legislature decides to reorganize.

Although public employment per se does not give the employeea protected property right, Burrage v. New Hampshire Police StandardsCouncil, 127 N.H. 742, 744 (1986), public employment coupled witha commission of office is a different matter. In King v. Thomson,119 N.H. 21 9 (1979), a case involving the wrongful removal of JohnKing, the director of the State board of probation, the Stateconceded that:

RSA 4:1 (1970) (amended Cum. Supp. 1978)provided Mr. King with a constitutionallycreated property interest; he was given anentitlement by the State and an expectationof the continuance of that entitlement.Board of Regents v. Roth, 408 U.S. 564, 577(1972). King, supra at 221.


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The Court finds that theplaintiffs possess a due process propertyinterest in their positions with the Office of Securities Regulation

for the tenure set forth in their respective commissions. Thespecifics of this employment relationship between the plaintiffsand the State were set forth in former RSA 400-A:43 and :46 andRSA 94:1-a,I which were repealed or amended by Chapter 355:9 2 and:93 of the Laws of 1991. The existence of an entitlement of theplaintiffs to their commissions implies the exist ence of anappropriate remedy to enforce these rights. See State Employee'sAssociation of N.H. v. Belknap County, 122 N.H. 614, 621 (1982).Consequently, the doctrine of sovereign immunity does not shieldthe State in the instant action. See id. at 621-22 .

Having determined that the plaintiffs do have a propertyinterest at stake, the Court now turns to the question of whetherthe State violated those property interests when its reorganizationscheme pursuant to Part II, Article 5 of the State Constitutioneliminated the plaintiffs' positions with the Office of SecuritiesRegulation. The State cites. Bastian v. Kennedy, 829 F.2d 1 (1stCir. 1987) in support of its contention that an unclassified,commissioned officer may be removed from her position as the resultof a government reorganization scheme.

The Bastian case, however, is distinguishable from the case athand. When Ms. Bastian accepted her commission pursuant to the terms


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of RSA 98:9, she had prospective notice that RSA 98:9 was scheduledfor repeal under the terms of the State's sunset law. Bastian, 829

F.2d at 2. The plaintiffs' commissi ons were not subject to anysuch sunset review. Moreover, when Ms. Bastian's original commissionexpired along with the expiration of her agency, pursuant to thepreexisting sunset law, Ms. Bastian accepted a new position with aone-year commission. Id. Ms. Bastian filed her suit when the Statefailed to renew her second commission after its term expired. Id.The situationinvolving the plaintiffs is quite different. Ratherthan simply failing to renew the commissions, a viable option forremoval pursuant to Part II, Articles 46 and 47 of the New HampshireConstitution, the legislature has abolished the plaintiffs' posi tionsduring the tenure of their commissions.

The Court finds that in order to strip the plaintiffs of theirproperty interests in the tenure set forth in their commissions,the State would have to utilize one of the constitutionally orstatutorily provided methods, namely not reappointing them (N.H.Const. Pt. II, Art. 46 and 47), impeachment (N.H. C onst. Pt. II,Art. 38), address for cause (N.H. Const. Pt. II, Art. 73), removalby Governor and Council for cause (RSA 4:1), or abolishment of theirpositions prospectively (N.H. Const. Pt. II, Art. 5 and Pt. I,Art. 23). The legislature did not use one of the permissible meansin removing the plaintiffs from their offices. Instead, the legislature


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reorganization scheme retrospectively stripped the plaintiffs ofthe tenure created by their respective commission s. A law cannotbe applied retrospectively when it affects substantive rights.Riesenberq v. State, 115 N.H. 12, 13 (1975); see also Norton v.Patten, 125 N.H. 413 (19 84). A retrospective law includes "everystatute which takes away or impairs vested rights, acquired underexisting laws." Norton, supra at 415 (quoting Woart v. Winnick,3 N.H. 473, 479 (1 826)). To the extent that Chapter 355 of theLaws of 1991 takes away the plaintiffs' vested p roperty rights inthe tenure of office specified in their commissions, that law isclearly retrospective in its application. In eliminating theplaintiffs' offices prior to the expiration of their commissions,the legislature improperly impaired the property rights the plaintiffshad in the tenure stated in their respective positions.

The Court is not suggesting that the legislature has no powerto remove a commissioned employee from office. However, the Courtemphasizes that when the legislature denies a commissioned employeethe full tenure of his office, the legislature must do so in accordancewith one of the c onstitutionally or statutorily prescribed meansenumerated above. The legislature may not retrospectively deprivethe plaintiffs of their commissions.

The Court finds that the plaintiffs have a property interestin their commissions which has been violated by the retrospective


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application of Chapter 355 of the Laws of 19 91. As this violationis a sufficient basis upon which to render summary judgment forthe plaintiffs, the Court need not reach the plain tiffs' claimsunder the wage claims act and the state and federal contractsclauses.

Accordingly, the State's Motion to Dismiss is DENIED, andthe plaintiffs' Motion for Summary Judgment is GRANTED. A hearingon the issue of damages shall be scheduled by the Clerk.

So Order ed .Dated: January 27, 1992George L. ManiasPresiding Justice

Documents

Carew, et al. v. State, 91-E-532-B (Merrimack Super. Ct., 1992)