STATE OF MAINE SUPERIOR COURT KENNEBEC, ss CV-I0-63 1" , i : f J,;1 ~ 1-\ t I 'J f i ' : ,\ \ -
SARAH H. SPRING, Plaintiff ORDER ON DEFENDANT'S v. MOTION TO DISMISS
BOARD OF TRUSTEES OF Maine Public Employees Retirement System, Defendant
In an order dated February 10, 2011, this court dismissed the plaintiff's 80C appeal by
agreement of the parties and deferred judgment on the defendant's motion to dismiss the
plaintiff's complaint which alleged equitable estoppel, pending submissions from the parties
regarding the applicability of promissory estoppel to the plaintiff's complaint. The plaintiff
responded by pleading the appositeness of promissory estoppel to her case and noting the court's
flexibility in fashioning an appropriate remedy under that doctrine. The defendant argues that
dismissal is appropriate on the plaintiff's promissory estoppel claim as upon the equitable
estoppel claim. For the reasons that follow, the motion to dismiss is DENIED as to promissory
estoppel and GRANTED as to equitable estoppel.
A "motion to dismiss pursuant to M.R. Civ. P. 12(b)(6) tests the legal sufficiency of the
allegations in a complaint, not the sufficiency of the evidence the plaintiffs are able to present."
Barnes v. McGough, 623 A.2d 144, 145 (Me. 1993) (citation omitted). The court is required to
"consider the material allegations of the complaint as admitted and review the complaint in the
light most favorable to the plaintiffs to determine whether it sets forth elements of a cause of
action or alleges facts that would entitle the plaintiff to relief pursuant to some legal theory."
Bussell v. City ofPortland, 1999 ME 103, ~ 1, 731 A.2d 862. "A dismissal is appropriate only when it appears beyond doubt that a plaintiff is entitled to no relief under any set of facts that he
might prove in support of his claim." Dexter v. Town ofNorway, 1998 ME 195,' 7,715 A,2d
169, 171 (quotations omitted).
The complaint alleges the following. The plaintiff is a member of the MPERS and has
contributed funds to be held by it in trust. Members who had accumulated at least ten years of
service prior to July 1, 1993, are eligible to participate in a favorable "age 60" retirement plan.
As of July 1, 1993, the plaintiff had nine years of creditable service with MPERS. On multiple
occasions, and particularly on or about December 5, 2007, the defendant informed the plaintiff
that she could purchase one year of out-of-state credits for service performed in another school
system, which would count towards the years that she had acquired before July 1, 1993. On May
2,2008, she was informed of the cost of purchasing the past year of service and that the result of
purchasing it would be to make her eligible for retirement at age 60.
In reliance upon this information, she withdrew $17,279 from savings to purchase the
year of service, and incurred costs in doing so. She also told her employer that she would retire
in July of 2009 and committed resources to building a business for her second career. On or
about October 31, 2008, she was informed that the year of service could not be credited toward
the "age 60" plan and hence she would not be eligible for normal retirement at that age. She
canceled her notice of retirement. Following an administrative hearing, on March 16, 2010,
MPERS adopted the position that the plaintiffs purchased year of service was not creditable.
On or about April 7, 2010, the petitioner timely filed a civil complaint, alleging that
equitable estoppel required enforcement of MPERS' s original promise of the plaintiffs
retirement category, or other relief that would make her whole. The complaint also included an
80C appeal to assure this court's jurisdiction. MPERS moved to dismiss. By order of February
2 10, 2011, this court granted the motion to dismiss as to the 80C appeal by agreement of the
parties. Prior to issuing an order on MPERS's motion to dismiss the plaintiff's equitable
estoppel claim, however, the court invited the parties to brief the issue of promissory estoppel,
including its availability against state entities and the range of remedies available thereunder.
The plaintiff argues that promissory estoppel is applicable to her case against MPERS; MPERS
moves to dismiss the claim of promissory estoppel as well as the claim of equitable estoppel.
The court will address the applicability of both forms of estoppel.
Equitable Estoppel
The defendant argues that no viable claim for equitable estoppel exists because equitable
estoppel can be used only as a defense, not as an affirmative cause of action.
The court notes that "equitable estoppel is a principle of law, and should be carefully and
sparingly applied." Chrysler Credit Corp. v. Bert Cote's LIA Auto Sales, Inc., 1998 ME 53, ~ 27,
707 A.2d 1311, 1318 (quotations and citations omitted). In Grande v. St. Paul Fire and Marine
Insurance Company, the Court of Appeals for the First Circuit stated, "Estoppel is not ordinarily
viewed as an independent cause of action, but as a set of rules preventing someone in specified
circumstances from altering or contesting a proposition." Grande v. St. Paul Fire and Marine
Ins. Co et al. 436 F.3d 277,279 n.1 (1 st Cir. 2006) (citing Prosser & Keeton on Torts, 105 at 733
(5 th Ed. 1984»). The Court further noted: "Maine law is unclear." Id. l To this point, the First
Circuit cited for comparison two Maine cases: Waterville Homes, Incorporated v. Maine
Department of Transportation, 589 A.2d 455, 457 (Me. 1991) and Martin v. Prudential
Insurance Company, 389 A.2d 28, 30-32 (Me. 1978). In the former, the Law Court noted the
I Any hopes expressed by the parties that a case which was pending before the Maine Supreme Court at the time of oral argument in this matter might make things a bit clearer for this court were dashed when the Law Court in Tenant's Harbor General Store, LLC v. Department ofEnvironmental Protection, 2011 ME 6, ~ 18, 10 A.3d 722, 728, found the petitioner's claim based on equitable estoppel moot.
3 "well-settled principle that estoppel is available only for protection, and cannot be used as a
weapon of assault." Waterville Homes, 589 A.2d at 457 (quotations omitted). The Law Court
defined equitable estoppel as an
equitable affirmative defense that operates to absolutely preclude a party "from asserting rights which might have otherwise existed, either of property, of contract, or of remedy, as against another person who has in good faith relied upon such conduct, and has been led thereby to change his position for the worse, and who on his part acquires some corresponding right, either of property, of contract, or of remedy.
Id. (quoting Martin v. Me. Central R.R. Co., 83 Me. 100,104,21 A. 740 (1890)); see also Guay
v. Kennedy, 2011 Me. Super. LEXIS 22, at *12 ("The Court is not convinced that 'equitable
estoppel' constitutes an independent claim for relief.") However, in an earlier case, the Court did
not disallow a plaintiffs estoppel claim, but upheld a jury instruction, given over the plaintiffs
objection, which required the plaintiff to prove that the plaintiffs reliance caused actual
detriment or prejudice, as opposed to the plaintiffs proposed instruction that allowed estoppel if
prejudice would occur unless the estoppel was given effect. Martin v. Prudential Insurance
Company, 389 A.2d at 30-31.
In more recent cases involving claims against municipalities, the Law Court has
expressly stated that equitable estoppel may be asserted defensively, rather than affirmatively.
Tarason v. Town ofS. Berwick, 2005 ME 30, ~ 16, 868 A.2d 230,234 (plaintiff could not
affirmatively estop the town from bringing an enforcement action, since equitable estoppel can
be used against a municipality only defensively); Buker v. Town ofSweden, 644 A.2d 1042, 1044
(Me. 1994) ("We have held that equitable estoppel can be asserted against a municipality only as
a defense and 'cannot be used as a weapon of assault."') (quoting Waterville Homes v. Dept. of
Transp., 589 A.2d 455, 457 (Me. 1991)).
4 The plaintiff relies upon a series of cases in which claims for equitable estoppel were
brought affirmatively in response to agency action. See Berry v. Bd. a/Trustees, Maine State
Retirement Sys., 663 A.2d 14 (Me. 1995); Hall v. Bd. ofEnvtl. Prot., 498 A.2d 260 (Me. 1985);
Crummett v. Bd. ofTrustees, Maine State Retirement Sys., 424 A.2d 1102 (Me. 1981); Maine
Sch, Admin. Dist. #14 v. Raynolds, 413 A.2d 523 (Me. 1980). However, these cases do not
expressly contradict the principle articulated in Waterville Homes, as none of these cases
contains any indication that the argument regarding the doctrine's use as "sword" versus a
"shield" was made or considered. In Reynolds, the Law Court first held that "under the law of
Maine the application of equitable estoppel is not absolutely precluded solely because it is
invoked against activity by a governmental official or agency in the discharge of a governmental
function," but rather that the applicability of equitable estoppel would depend "on the totality of
the particular circumstances involved, which will include the nature of the particular
governmental official or agency acting and of the particular governmental function being
discharged as precipitating particular considerations of public policy," and remanded for the trial
court to determine the pertinent facts and public policy arguments in the first instance. Reynolds,
413 A.2d at 533. The Crummett court likewise remanded the case to the Board for expansion of
the record, after the Superior Court erroneously concluded estoppel could not lie against a
governmental agency, see Crummett, 424 A.2d at 1104, because the Justice did not have the
benefit of the Raynolds holding permitting such an action under certain circumstances. In Hall,
the Law Court upheld the trial court's dismissal of the plaintiffs equitable estoppel claim,
noting, "Although equitable estoppel may be invoked against a governmental entity in
appropriate circumstances, there must be a valid reason to believe that the person making the
relied upon representation had authority to represent the agency's position," and finding that
5 such reason did not exist in that case. Hall, 498 A.2d at 267. And in Berry, the Law Court
remanded a Rule 80C petition which had been joined with an independent equitable estoppel
claim because the Superior Court had confined itself to the administrative record in granting
summary judgment to the defendant, noting that the administrative agency lacked equitable
jurisdiction to apply the doctrine. Berry, 663 A.2d at 18-20. It is not clear from the holdings of
any of these cases whether the "sword" v. "shield" argument was made or considered, and it is
not clear the extent to which the doctrine was being asserted affirmatively rather than
defensively.
This court would note that a recent Superior Court decision, Chase v. Southern Maine
Economic Development District, et ai, 2008 Me. Super. LEXIS 47, concluded its review of
Maine law in this area by stating that apart from Martin v. Prudential Ins. Co., 389 A.2d 28 (Me.
1978), essentially all Maine cases involving estoppel "allow it to be used as a defensive
mechanism. That is, a defendant can use it against the assertion of a plaintiff s claim, or a
plaintiffcan use it against the assertion ofa party's defense. " Chase, 2008 Me. Super. LEXIS
47, at *9 (emphasis added).
The Plaintiff in the case at bar relies directly upon the above-quoted and emphasized
clause in Chase to argue that in fact she is using it defensively, despite the fact that she has
brought this equitable action for estoppel in a single count complaint. She argues that it would
be "elevating form over substance" for the Court to accept MPERS' argument that the Court
must consider when, chronologically speaking, the words "equitable estoppel" are first
mentioned. That is, she claims that her assertion of the doctrine is defensive because she raised it
at the administrative level only when the Executive Director of MPERS tried to move her into
the age 62 category, after having assured her that she was eligible for the age 60 category, and
6 therefore she is attempting to defend against the loss of a right to which she had become entitled.
This assertion at the administrative hearing, and in response to the defendant's motion to dismiss,
she claims are both "defensive."
The Court agrees with the Petitioner's argument that chronology cannot completely drive
the Court's analysis. However, a more fundamental problem exists for the Plaintiff, in the
Court's view. In another recent Superior Court case, Garnett v. Commissioner, 2009 Me. Super.
LEXIS 65, a petitioner brought a claim based on this doctrine. The petitioner had been granted a
license to offer bison and boar for harvest, and asserted the doctrine to shield the license from
later being restricted. The rationale was that the doctrine could be appropriately asserted because
the petitioner was protecting a right that he already held. This rationale is consistent with the
Law Court's language in Waterville Homes language that the party asserting estoppel must
"acquire some corresponding right, either of property, of contract, or of remedy" resulting from a
misrepresentation, and the established principle that estoppel is available only as protection
against such a right. Waterville Homes, 589 A.2d at 457. Put another way, "[t]he doctrine of
equitable estoppel, as distinguished from the doctrine of promissory estoppel, ordinarily is used
defensively and requires a misrepresentation as to a past or present fact." Chrysler Credit Corp.,
1998 ME 53, ~ 28, 707 A.2d at 1318-19 (citing Chapman v. Bomann, 381 A.2d 1123, 1127 (Me.
1978)).
As a general rule, and apart from circumstances calling for application of the doctrine of promissory estoppel, "a representation or assurance, in order to furnish the basis of an estoppel, must relate to some present or past fact or state of things, as distinguished from mere promises or statements as to the future." 28 AM. JUR. 2D Estoppel and Waiver B 46 (1966); see 31 c.J.S. Estoppel B 92 (1996) (where a party seeks to employ the affirmative defense of equitable estoppel based on another party's false representations, the doctrine is ordinarily applicable "only to representations as to facts either past or present, and not to representations or promises concerning the future"). Id., 707 A.2d at 1319.
7 In this case, the plaintiff is seeking to enforce a promise, or recover damages for her
expenditures incurred in reliance upon that promise, regarding the timing and classification of
her future retirement. To the extent she alleges a "false representation of past or present facts,"
the fact alleged is that she would be able to enter the "age 60" retirement plan and thus retire at
age 60. There is no indication that the defendant's letter or the Plaintiffs purchase of the year of
service resulted in her receiving an actual right to full benefits retirement at age 60; she had not
reached age 60, and she did not actually retire. More weighty in the court's analysis is the fact
that the plaintiff is not asserting estoppel as an affirmative defense to prevent "the assertion of an
otherwise unequivocal right," Jd., 707 A.2d at 1318, (i. e., the right to retirement at age 60, which
she had not yet attained), but rather as a cause of action and basis for recovery based upon "an
otherwise unenforceable agreement." !d. Because the plaintiff has not established facts that
would permit a proceeding based upon equitable estoppel, the defendant's motion to dismiss is
GRANTED as to equitable estoppel.
Promissory Estoppel
The court remains bound by the standard of a motion to dismiss, wherein "[t]he
complaint's material allegations are treated 'as admitted to determine whether it alleges the
elements of a cause of action against the defendant or alleges facts that could entitle the plaintiff
to reliefunder some legal theory.'" Richardson v. Winthrop Sch. Dep't, 2009 ME 109, ~ 5,983
A.2d 400, 402 (quoting Dragomir v. Spring Harbor Hosp., 2009 ME 51, ~ 15, 970 A.2d 310,
3 14-15). In 1978, the Law Court adopted the cause of action of promissory estoppel based upon
the Restatement (Second) of Contracts, § 90:
A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by
8 enforcement of the promise. The remedy granted for breach may be limited as justice requires.
Chapman v. Bomann, 381 A.2d 1123, 1127 (Me. 1978); see also, e.g., Panasonic Commc 'ns &
Sys. Co. v. State ofMaine, 1997 ME 43, ~ 17, 691 A.2d 190, 195-96. The differing applications
of equitable and promissory estoppel been explained as follows:
Promissory estoppel is a contract doctrine invoked to enforce promises which are otherwise unenforceable so as to avoid injustice. . . . Equitable estoppel, sometimes referred to in our cases as estoppel in pais does not invoke promises. Instead, it involves misrepresentations, including misleading statements, conduct, or silence, that induce detrimental reliance.
Cottle Enters., Inc. v. Town ofFarmington, 1997 ME 78, ~ 17 n. 6, 693 A.2d 330, 335-36 n.6
(1997)) (quotations and citations omitted); see also, e.g., Chrysler Credit Corp., 1998 ME 53, ~
28, 707 A.2d 1311, 1318-19 ("The doctrine of equitable estoppel, as distinguished from the
doctrine of promissory estoppel, ordinarily is used defensively and requires a misrepresentation
as to a past or present fact. "). MPERS now advances several arguments to supplement its
original motion to dismiss, which the court will address in tum.
1. The Plaintiff s Claim Sounds in Equitable Estoppel, Not Promissory Estoppel
MPERS first asserts that the doctrine of promissory estoppel is not implicated in the
present case, and that the plaintiffs independent claim is in fact equitable estoppel alone. While
MPERS recognizes that equitable estoppel may in some cases be applied against the government,
citing Dep 't ofHealth and Human Servs. v. Pelletier, 2009 ME 11, ~ 17, 964 A.2d 630, 635
("Equitable estoppel may be applied to the activities of a governmental official or agency in the
discharge of governmental functions."); Fitzgerald v. City ofBangor, 1999 ME 50, 726 A.2d
1253; H E. Sargent v. Town ofWells, 676 A.2d 920 (Me. 1996); and Hart v. County of
Sagadahoc, 609 A2d 282 (Me. 1992), MPERS avers that it did not find a Law Court decision
9 applying promissory estoppel either defensively or offensively against a state agency.2 MPERS
asserts that the representations its staff made regarding the plaintiff s retirement class status were
statements of a present state of affairs, rather than a promise regarding future events, and
therefore fall within the definition of equitable, rather than promissory, estoppel. Blue Star
Corp. v. CKF Props., 2009 ME 101,980 A.2d 1270; Chrysler Credit Corp., 1998 ME 53, 707
A.2d 1311; Berry v. Bd of Trustees, 663 A.2d 14, 18 (Me. 1995).
MPERS points to a letter that states as follows: "the purchase of the above listed service
will give you enough service, 10 years to be vested prior to July 1, 1993. That being the case,
your retirement age will be 60" (R. 1.28). MPERS also claims that the letter constitutes an
incorrect factual representation of the plaintiff s creditable service, rather than a promise to
perform. In its letter of October 31, 2008, MPERS explains, it corrected its error upon which the
plaintiff had allegedly relied, explaining that the plaintiff did not have sufficient years of service
prior to July 1, 1993 and that the purchase of her private/ parochial service therefore could not be
used towards vesting her under the "age 60" plan. (R. 713.) Promissory estoppel is
distinguished from equitable estoppel in that equitable estoppel concerns the misrepresentation
of an existing fact. See, e.g., Chrysler Credit Corp., 1998 ME 53, ,-r 27, 707 A.2d at 1318.
MPERS thus seeks to distinguish the numerous cases of promissory estoppel cited by the
plaintiff on the ground that the plaintiffs cases involve a promise of a future event. See Harvey
v. Dow, 2008 ME 192,962 A.2d 322 (promise to convey real property in the future); Nappi v.
Nappi Distributors, 1997 ME 54, 691 A.2d 1198 (promise to construct an addition in the
2 But see, e.g., Panasonic Commc 'ns & Sys. Co. v. State ofMaine, 1997 ME 43, ~~17-20, 691 A.2d at 195-196 (evaluating a claim of promissory estoppel against the state on its merits before concluding the claim against the state was defeated by a lack of reliance).
10 future)3; Stone v. Waldoboro Bank, 559 A.2d 781 (Me. 1989) (promise to sell real property to
plaintiff in the future); Wilson v. Strong, 474 A.2d 176,178 (Me. 1984) (agreement to lease a
building in the future)4; Chapman v. Bowmann, 381 A.2d 1123 (Me. 1978) (promise that
defendants would sign and return real estate document forwarded to them); and GMAC
Commercial Mortgage Corp. v. Gleichman, 84 F.Supp.2d 127, 138 (D. Me. 1999) (promise to
provide construction financing in the future). MPERS was particularly careful to distinguish
Faunce v. American Can Co., Inc., 407 A.2d 733 (Me. 1979), because it concerned the
application of promissory estoppel in the context of a retirement plan. MPERS characterizes that
case as follows:
Defendant was closing its plant, and Faunce did not have enough accredited service time to retire. Aware of Faunce's situation, the manager promised to ignore the deficiency and to recognize him as eligible when he retired. Faunce was deliberately induced to retire, and then a future event[,] the recognition of eligibility, was promised.
(Def.'s Supp. to Mot. to Dismiss 5.) In contrast to those cases, MPERS asserts that no promise
was made to the plaintiff, but that its letter was informational, not promising future conduct, and
did not seek to induce any action on the part of the plaintiff.
The court is not persuaded that MPERS' s correspondence with the plaintiff was of a
present nature only and did not represent a future promise sufficient to invoke the doctrine of
promissory estoppel. The May 2, 2008 letter that MPERS quotes to support its argument (which
is at least the second letter the plaintiff received, after a letter indicating that she would be
3 The court has reservations about characterizing th is case as referring to "future" construction, as the Nappi court cited Tozier v. Tozier, 437 A.2d 645, 648 (Me. 1981) for the proposition that, "In the context of the transfer ofland, when the donee has made substantial improvements to the land in reliance upon the promise to convey the land, courts will enforce the promise to convey," and the construction and reliance appeared to be contemporaneous. Nappi, 1997 ME 54, f19, 691 A.2d at 1200. 4 The court notes that this case was not decided on the merits of the prom issory estoppel claim, and the Law Court reversed the trial court's decision to send such claim to the jury. Wilson, 474 A.2d at 180.
11 eligible for the "age 60" retirement group upon purchase of her year of service) provided in
pertinent part:
Please be advised with the purchase of the above listed credit will give you enough service, 10 years, to be vested prior to July 1, 1993. That being the case, your service retirement will be 60. Please be advised with the purchase of the above listed service, the estimated increase to your monthly benefit is $98.66.
(Def.'s Supp. to Mot. to Dismiss 6, quoting R. 7.17.) The statement informs the plaintiff that if
she purchases the year of service, then she will be eligible for retirement at 60, and she will
receive an increase to her monthly benefit. Though MPERS seeks to characterize this
correspondence as reflecting only the present status of the petitioner, one's present status in a
retirement track refers to the future; the statement "your service retirement will be 60," means
not only that she is currently (or will be, upon purchase of service) in the age 60 retirement
category, but also that when she is 60, which she is not yet, then she will be able to retire. This
case is thus similar to all of the other cases which concern promises regarding future events.
MPERS's attempts to distinguish Faunce, where promissory estoppel bound an employer
who promised his employees their retirement two months early, are unavailing. See Faunce, 407
A.2d at 734-35. The difference between the plaintiffs situation and Faunce's is not the status of
the promise or representation made as future or present, but rather the timing of the intervention
of the retirement provider: Faunce retired and then the provider attempted to renege on its
promise, whereas plaintiff Spring had made preparations for retirement but had not yet ceased
work at the time that the retirement provider informed her of her ineligibility for her expected
retirement. See id. 5 This argument does not merit dismissal of the plaintiff s claim in
promissory estoppel.
5 This is the essence of the equitable estoppel! promissory estoppel distinction-for equitable estoppel purposes, Faunce and the plaintiff have established very different sets of rights, since Faunce retired based on the representations of his employer. For the purposes of promissory estoppel, where the court's concern is the damage
12 2. Lack of Consideration
MPERS next contends that the promissory estoppel claim should be dismissed because
no consideration was given to MPERS. It explains that the payment to purchase creditable
service is actuarially calculated to be the actual cost of the enhanced benefit, such that the
payment does not amount to a net gain or benefit to MPERS.
This argument has no applicability to a claim of promissory estoppel. "It has often been
said that promissory estoppel is the principle by which contract law avoids injustice through
recognition ofa substitute for traditional consideration." Chapman v. Bomann, 381 A.2d 1123,
1126 (Me. 1978) (citing Williston on Contracts §§ 116, 139; Allegheny College v. National
Chautauqua County Bank ofJamestown, 246 N. Y. 369, 159 N.E. 173 (1927)); see also id.
("Several Maine cases mention that reasonable and detrimental reliance on the promise of
another may act as a substitute for consideration."); Carr v. Bartlett, 72 Me. 120 (1881)).
Since the analysis of promissory estoppel does not consider the benefit to the recipient,
but rather the reliance of the performing party, see Restatement (Second) of Contracts, §90, the
court accordingly considers that this argument does not support dismissal of the plaintiff's claim.
3. The MPERS Staff Member Corresponding With the Plaintiff Lacked the Authority to Bind MPERS in Contract
MPERS next contends that a claim in promissory estoppel should be dismissed because
the staff person who made the representation to the plaintiff lacked the authority to bind MPERS
in contract. It notes that "[p]romissory estoppel is a contract doctrine invoked to enforce
promises which are otherwise unenforceable so as to avoid injustice," citing Chapman, 381 A.2d
at 1127. MPERS asserts that it was umeasonable for the plaintiff to rely upon any contract
created by her correspondence with MPERS, because Debra J. Bernier, the senior MPERS
or detriment to the plaintiff incurred in reliance upon the defendant's promises, Faunce and the plaintiff are in an analogous position.
13 technician who issued the May 2, 2008 letter upon which the plaintiff relied (R. 7.16), did not
have the authority to bind MPERS in contract. 6 MPERS cites Bates v. Maine State Retirement
System, KENSC-CV-2007-292 (Me. Super. Ct., Ken. Cty., luI. 6,2009) (labar, 1.), for the
premise that 5 M.R.S. §17103(6) precluded an MPERS staff member's authority to bind MPERS
in any contract or agreement. 7
MPERS adds that a contract with a governmental entity is void if the government official
who executed the contract lacked the authority to do so, regardless of the lack of knowledge of
these limitations by the person contracting with the official. 8 While MPERS concedes it has
found no Maine case regarding the extent to which a state agency would be responsible for a
contract executed by an employee lacking the requisite authority, it analogizes to cases holding
that a contract with a municipality is void under such circumstances, regardless of the private
party's awareness of the official's lack of authority. See Hallissey v. School Administrative
District No. 77,2000 ME 143,-[12 n.5, 755 A.2d 1068, 1072; People's Heritage Bank v. City of
Saco, 566 A.2d 745 (Me. 1989); State v. Town ofFranklin, 489 A.2d 525, 528 (Me. 1985); Sirois
v. Town ofFrenchville, 441 A.2d 291 (Me. 1982); State v. Deschambault, 159 Me. 223, 228,191
A.2d 114, 118 (1963); School Admin. Dist. No.3 v. Maine School District Comm 'n, 158 Me.
420,425-26, 185 A.2d 744, 747 (1962).
6 The reasonableness of the plaintiffs reliance upon MPERS's employee's statements is not appropriate for analysis on a motion to dismiss. See MacImage v. Hancock County, 2009 Me. Super. LEXIS 89 at "'9 n. 5. 7 That provision states in pertinent part, "The board shall in all cases make the final and determining administrative decision in all matters affecting the rights, credits and privileges of all members of all programs of the retirement system whether in participating local districts or in the state service." 5 M.R.S. §17103(6) (2010). 8 MPERS supports its assertion by reference to Fed. Crop Ins. Corp. v. Merrill, 332 US 380, 383-84 (1947); Shlay v. Montgomery, 802 F.2d 918, 921-22 (7th Cir. 1986); Cottle Enters., Inc. v. Town ofFarmington, 1997 ME 78, 693 A.2d 330-35 (Town's authority to issue moratorium on sewer permits); Orange v. District afColumbia, 320 A.2d 301,303 (D.C. 1974); Alexandropolous v. New Hampshire, 174 A.2d 417, 418 (N.H. 1961); Lien v. Northwestern Engineering Co., 54 N.W.2d 472, [476] (S.D. 1952); Dep't ofPub lie Safety and Correctional Servs. v. ARA Health Servs., Inc., 668 A.2d 960, 969 (Md. Ct. Spec. App. 1995) ("In the absence of actual authority, the State may avoid the contract, regardless of the reasonableness of the beliefs of the other party .").
14 While MPERS cites compelling authority to support the proposition that a state agency is
not bound by the representations of an agent acting outside of his or her authority, under the
standard of a motion to dismiss, the court finds no basis on which to dismiss the present case. 9
When the court "examine[s] the complaint in the light most favorable to the plaintiff to
determine whether it sets forth elements of a cause of action or alleges facts that would entitle
the plaintiffto relief pursuant to some legal theory" (Moody v. State Liquor & Lottery Comm 'n,
2004 ME 20, '7, 843 A.2d 43, 46 (quoting In re Wage Payment Litig., 2000 ME 162, '3, 759
A.2d 217, 220)), the court finds no evidence that Senior Retirement Technician Debra L. Bernier
was not authorized to inform the plaintiff of the cost of purchasing her year of service, or that
Senior Retirement Technician Bernier exceeded the scope of her authority within MPERS by
explaining that such a purchase would place the plaintiff in the "age 60" retirement group. On
the contrary, the complaint alleges that the ability to purchase the year of service was represented
to her by multiple MPERS agents, such that Senior Retirement Technician Bernier's letter of
May 2, 2008, served only to solidify the terms of such a purchase. See Compi. '4 ("At various
times, and particularly, on or about December 5, 2007, the defendant, through duly authorized
employees and agents, informed the plaintiff that she could purchase one year of out-of-state
service that she had performed for another school system and that the year of service, if
purchased, would count towards the years of service that she had acquired before July 1, 1993.")
The plaintiff does not now dispute that Senior Retirement Technician Bernier's statement was in
error. See Order of February 10,2011 (dismissing the SOC appeal by agreement of the parties).
9 See, e.g., AFAB, Inc. v. Old Orchard Beach, 639 A.2d 103, 105 (Me. 1994) (listing "cases ... consistent with the law protecting municipalities from liability under illegal, void, or unauthorized contracts," before deciding, "Although courts are reluctant to impose contractual liability on a municipality when the contract on which the liability is based has not been properly authorized, or is void or illegal, in other contexts we have moved away from complete immunization of municipalities under the common law from liability in every case regardless of the circumstances," and upholding an unjust enrichment claim against the municipality).
15 However, Senior Retirement Technician Bernier's miscalculation does not mean that her
correspondence with the plaintiff was undertaken in excess of her actual authority. The
complaint amply alleges that MPERS, through various agents, represented that the plaintiff could
purchase a year of service and thereby become eligible for the "age 60" retirement group. To the
extent that MPERS suggests that Senior Retirement Technician Bernier's letter, including
providing the plaintiff the contract by which to make such a purchase, was in excess of her actual
authority at MPERS, that is a factual issue inappropriate for consideration at this juncture. 10
3-A. MPERS's Employee Could Not Make a Contract in Violation of Statute
Relatedly, MPERS asserts that even if Senior Retirement Technician Bernier had the
requisite authority to bind MPERS in contract, the plaintiff's claim still fails because
enforcement of the promise would be contrary to law, and Senior Retirement Technician
Bernier's promise cannot override state law.
The court again agrees that there is ample authority supporting the position that a promise
contrary to law is not enforceable by estoppel. See, e.g., Thurber v. W. Conference of Teamsters
Pension Plan, 542 F.2d 1106, 1109 (9th Cir. 1976) (where employee made supplemental
payment to pension plan at direction of plan administrator to qualify for early retirement
benefits, but where such payment was not authorized by law, estoppel could "not be invoked to
compel an illegal act," specifically, the payment of benefIts in violation of federal labor law);
10 Bates likewise does not mandate dismissal of this case. There, the allegation was that the MPERS representative was acting as an agent for Bates's employer while making representations about his retirement plan. The statute cited in Bates provides that "The board shall in all cases make the final and determining administrative decision in all matters affecting the rights, credits and privileges of all members of all programs of the retirement system whether in participating local districts or in the state service." 5 M.R.S. § 171 03(6) (2010). However, the same statute next provides, in a subsection governing communications between the board and members of the retirement system, "All retirement information provided to retirement system members must be provided by highly competent individuals well-trained and knowledgeable about the benefits and requirements of the retirement system in both law and rules.... The board shall provide applicants for retirement ... with materials summarizing the most significant requirements and restrictions in state laws and rules," suggesting that the board may be responsible for the reliability of statements made by its "highly competent individuals." 5 M.R.S. §17103(6-A) (2010).
16 Atria Assoc. v. County ofNassau, 181 AD.2d 847,850 (N.Y. App. Div. 1992) ("estoppel cannot
be utilized to enforce a municipal contract that violates express statutory provisions"). 11
However, the plaintiff has requested remedies for her damages other than enforcement of
MPERS's original promise.
Addressing the relief available on a claim of promissory estoppel, the Restatement provides:
[T]he same factors which bear on whether any relief should be granted also bear on the character and the extent of the remedy. In particular, relief may sometimes be limited to restitution or to damages or specific relief measured by the extent of the promisee's reliance rather than by the terms of the promise. Unless there is unjust enrichment of the promisor, damages should not put the promisee in a better position than performance of the promise would have put him. In the case of a promise to make a gift it would rarely be proper to award consequential damages which would place a greater burden on the promisor than performance would have imposed.
Restatement (Second) of Contracts 13 90 cmt. d (citations omitted).
Harvey v. Dow, 2011 ME 4, ~12, 11 A3d 303, 308. "In fashioning a remedy, the court may look
to this provision for direction." ld.
The plaintiff's complaint alleges that she incurred fees and costs in reliance upon the
representations she received from MPERS. A remedy based upon these reliance-based
expenditures would not offend the statute establishing the plaintiff's proper retirement class.
Where the court may make the plaintiff whole by "damages or specific relief measured by the
extent of the promisee's reliance rather than by the terms of the promise," id., there is no
contravention of state law. This argument thus does not weigh in favor of dismissal. 12
11 But cf County ofHancock v. Teamsters Union Local 340, 2010 ME 135, ~ 13, 10 A.3d 670, 673 (estopping a county from disputing the application of a grievance procedure to certain employees, although the employees may not have been entitled to that process). 12 Nor is denial mandated under principles of sovereign immunity. As MPERS noted, estoppel may be applied against a governmental entity. See, e.g., A.F.A.B., Inc., v. Town of Old Orchard Beach, 639 A.2d 103, 105-06 (Me.
17 4. Promissory Estoppel Was Not Raised Below
MPERS's final argument in favor of dismissal is that a party to an administrative
proceeding must raise any objections it has before the agency in order to preserve the issue for
appeal, and since promissory estoppel was not raised below, it has not been preserved.
The petitioner's "action in equity" for estoppel was not before MPERS, since MPERS
"does not have equitable jurisdiction to apply the doctrine of estoppel to its own decisions."
Berry v. Bd ofTrs., Me. State Ret. Sys., 663 A,2d 14,19 (Me. 1995). It is an independent action,
separate and distinct from any 80C review. It was docketed as an independent civil action, rather
than an appeal from an agency decision. This court's order of February 10,2011, dismissed any
80C appeal portion of the plaintiff's complaint based upon the plaintiff's agreement that her
complaint was one in equity, rather than an appeal from MPERS's decision below. Therefore,
the fact that promissory estoppel was not raised before the agency has no bearing on this court's
ability to consider that claim.
Conclusion
As the First Circuit has noted, "Maine case law is unclear" as to whether equitable
estoppel may be "viewed as an independent cause of action," or is limited to use as "as a set of
rules preventing someone in specified circumstances from altering or contesting a proposition."
Grande, 436 F.3d at 279 n.1. However, because the court finds that, viewed "in the light most
favorable to the plaintiff," Richardson, 2009 ME 109, ~ 5, 983 A,2d at 402 (quotation omitted),
the complaint alleges promises on the part of MPERS that could reasonably be expected to
1994) (equitable estoppel); City ofAuburn v. Desgrosseilleurs, 578 A.2d 712, 714-16 (Me. 1990) (same); Maine School Administrative District No. 15 v. Raynolds, 413 A.2d 523, 533 (Me. 1980) (overruling the common law presumption that estoppel cou Id not apply against a governmental agency in the exercise of its governmental function). Also, this is an area where the state (as we are assuming MPERS is a state agency) is given leave to contract, and is therefore eligible for suit upon breach of its contract. See, e.g., Knowlton v. AG, 2009 ME 79, " 16 17,976 A.2d 973, 979; Profit Recovery Group, USA, Inc. v. Comm'r, Dep't ofAdmin. & Fin. Serv., 2005 ME 58,11 28,871 A.2d 1237, 1244.
18 induce action on the part of the plaintiff, which promises did indeed induce such action, to the
plaintiffs detriment, the plaintiff has successfully pled the elements of promissory estoppel, and
her claim should not be dismissed.
The entry will be:
The defendant's Motion to Dismiss the plaintiff s complaint in full is DENIED.
The defendant's Motion to Dismiss the equitable estoppel portion of the claim is
GRANTED.
This ORDER may be noted on the docket by reference pursuant to Rule 79(a) of the Maine
Rules of Civil Procedure.
DATE SUPERIOR COURT JUSTICE
19 SARAH P SPRING - PLAINTIFF SUPERIOR COURT KENNEBEC, ss. Attorney for: SARAH P SPRING Docket No AUGSC-CV-2010-00063 DONALD FONTAINE - RETAINED 04/07/2010 LAW OFFICES OF DONALD FONTAINE 97 INDIA STREET DOCKET RECORD PO BOX 7590 PORTLAND ME 04112
vs BOARD OF TRUSTEES, MPERS - DEFENDANT 46 STATE HOUSE STATION AUGUSTA ME 043330046 Attorney for: BOARD OF TRUSTEES, MPERS CHRISTOPHER MANN - RETAINED ATTORNEY GENERAL OFFICE OF AG 111 SEWALL STREET 6 STATE HOUSE STATION AUGUSTA ME 04333-0006
Filing Document: COMPLAINT Minor Case Type: OTHER EQUITABLE RELIEF Filing Date: 04/07/2010
Docket Events: 04/08/2010 FILING DOCUMENT - COMPLAINT FILED ON 04/07/2010 Plaintiff's Attorney: DONALD FONTAINE
04/08/2010 Party(s): SARAH P SPRING ATTORNEY - RETAINED ENTERED ON 04/07/2010 Plaintiff's Attorney: DONALD FONTAINE
04/14/2010 Party(s): BOARD OF TRUSTEES, MPERS SUMMONS/SERVICE - CIVIL SUMMONS SERVED ON 04/08/2010 ORIGINAL SUMMONS WITH RETURN SERVICE MADE UPON PAM MCARTHUR ON BEHALF OF MAINE PUBLIC EMPLOYEES RETIREMENT SYSTEM.
05/04/2010 party(s): BOARD OF TRUSTEES, MPERS OTHER FILING - ENTRY OF APPEARANCE FILED ON 04/26/2010 Defendant's Attorney: CHRISTOPHER MANN
05/04/2010 Party(s): BOARD OF TRUSTEES, MPERS ATTORNEY - RETAINED ENTERED ON 04/26/2010 Defendant's Attorney: CHRISTOPHER MANN
05/04/2010 Party(s): BOARD OF TRUSTEES, MPERS OTHER FILING - OTHER DOCUMENT FILED ON 04/27/2010 Defendant's Attorney: CHRISTOPHER MANN ADMINISTRATIVE RECORD
05/04/2010 Party(s): BOARD OF TRUSTEES, MPERS MOTION - MOTION TO DISMISS FILED ON 04/28/2010 Defendant's Attorney: CHRISTOPHER MANN
OS/21/2010 Party(s): SARAH P SPRING Page 1 of 4 Printed on: 06/14/2011 AUGSC-CV-2010-00063 DOCKET RECORD
OTHER FILING - OPPOSING MEMORANDUM FILED ON OS/21/2010 Plaintiff's Attorney: DONALD FONTAINE TO RESPONDENT'S MOTION TO DISMISS
06/04/2010 Party(s): BOARD OF TRUSTEES, MPERS OTHER FILING - OPPOSING MEMORANDUM FILED ON 06/04/2010 Defendant's Attorney: CHRISTOPHER MANN TO PETITIONER'S MOTION TO SPECIFY FUTURE COURSE OF PROCEEDINGS
06/04/2010 HEARING - MOTION TO DISMISS SCHEDULED FOR 07/08/2010 @ 9:30
06/04/2010 HEARING - MOTION TO DISMISS NOTICE SENT ON 06/04/2010
06/10/2010 Party(s): SARAH P SPRING MOTION - MOTION TO CONTINUE FILED ON 06/09/2010 Plaintiff's Attorney: DONALD FONTAINE CONSENT MOTION TO WAIVE ORAL ARGUENT OF IN THE ALTERNATIVE TO CONTINUE ORAL ARGUMENT ON MOTION FAXED TO JUSTICE BRADFORD
06/14/2010 Party(s) SARAH P SPRING MOTION - MOTION TO CONTINUE GRANTED ON 06/11/2010 CARL 0 BRADFORD , JUSTICE COPIES TO PARTIES/COUNSEL
06/14/2010 HEARING - MOTION TO DISMISS CONTINUED ON 06/11/2010 TO NEXT MOTION LIST.
07/23/2010 HEARING - MOTION TO DISMISS SCHEDULED FOR 09/09/2010 @ 9:00 in Room No. 4
07/23/2010 HEARING - MOTION TO DISMISS NOTICE SENT ON 07/23/2010
10/05/2010 HEARING - MOTION TO DISMISS HELD ON 09/09/2010 M MICHAELA MURPHY JUSTICE NO COURTROOM CLERK
10/15/2010 Party(s): SARAH P SPRING MOTION - MOTION TO STRIKE FILED ON 10/15/2010 Plaintiff's Attorney: DONALD FONTAINE PLAINTIFF'S RESPONSE TO DEFENDANT'S ARGUMENT AND PROPOSED ORDER.
01/05/2011 Party(s): BOARD OF TRUSTEES, MPERS OTHER FILING - OTHER DOCUMENT FILED ON 10/01/2010 Defendant's Attorney: CHRISTOPHER MANN COPY OF CASE FOR COURT'S DELIBERATION
01/05/2011 Party(s): SARAH P SPRING MOTION - DETERMINE COURSE PROCEEDINGS FILED ON OS/21/2010 Plaintiff's Attorney: CAROLINE WILSHUSEN MOTION TO SPECIFY THE FUTURE COURSE OF PROCEEDINGS
01/05/2011 Party(s): SARAH P SPRING OTHER FILING - OTHER DOCUMENT FILED ON 09/15/2010 Plaintiff's Attorney: DONALD FONTAINE Page 2 of 4 Printed on: 06/14/2011 AUGSC-CV-2010-00063 DOCKET RECORD
LETTER RE: COURT'S REQUEST TO COMMENT RE: DOCTRINE OF EQUITABLE ESTOPPEL
01/05/2011 Party(s): BOARD OF TRUSTEES, MPERS OTHER FILING - OTHER DOCUMENT FILED ON 09/16/2010 Defendant's Attorney: CHRISTOPHER MANN RE: REVIEW OF APPELLEE'S LAW COURT BRIEF AND ISSUE OF EQUITABLE ESTOPPLE
01/05/2011 Party(s): SARAH P SPRING OTHER FILING - REPLY MEMORANDUM FILED ON 10/15/2010 Plaintiff's Attorney: DONALD FONTAINE PLTF'S RESPONSE TO DEFT'S ARGUMENT
02/11/2011 Party(s): SARAH P SPRING MOTION - MOTION TO STRIKE DENIED ON 01/06/2011 M MICHAELA MURPHY , JUSTICE THE FILING OF THE DEFT ATTACHED TO ITS LETTER OF 9/29/10 IS NOT STRICKEN, BUT PLTF CAN REPLY AS SHE HAS THROUGH FILIG DOCKETED 10/15/10. COPY TO ATTY FONTAINE AND ~GMANN
02/11/2011 party(s): SARAH P SPRING MOTION - DETERMINE COURSE PROCEEDINGS DENIED ON 02/10/2011 M MICHAELA MURPHY , JUSTICE COpy TO ATTY FONTAINE AND ~G MANN
02/11/2011 Party(s): BOARD OF TRUSTEES, MPERS MOTION - MOTION TO DISMISS OTHER DECISION ON 02/10/2011 M MICHAELA MURPHY , JUSTICE THE COURT RESERVES FINAL RULING ON THE DEFT'S MOTION TO DISMISS WITH RESPECT TO ANY CLAIM OF EQUITABLE OR PROMISSORY ESTOPPEL. HOWEVER, THE COURT GRANTS THE MOTION TO DISMISS IN PART, GIVEN THE PLAINTIFF'S CONCESSION THAT SHE DOES NOT INTEND TO PURSUE A CLAIM UNDER RULE SOC OF THE MAINE RULES OF CIVIL PROCEDURE. COPY TO ATTY FONTAINE AND ~G MANN
02/11/2011 NOTE - OTHER CASE NOTE ENTERED ON 02/11/2011 COPY OF J. MURPHY ORDER OF 2/10/11 SENT TO REPOSITORIES
03/09/2011 Party(s): SARAH P SPRING OTHER FILING - OPPOSING MEMORANDUM FILED ON 03/09/2011 Plaintiff's Attorney: DONALD FONTAINE PLTF'S SUPPLEMENTARY MEMORANDUM OF LAW IN OPPOSITION TO DEFT'S MOTION TO DISMISS.
03/09/2011 ASSIGNMENT - SINGLE JUDGE/JUSTICE ASSIGNED TO JUSTICE ON 03/09/2011 M MICHAELA MURPHY , JUSTICE
04/13/2011 Party(s): BOARD OF TRUSTEES, MPERS OTHER FILING - OTHER DOCUMENT FILED ON 04/11/2011 Plaintiff's Attorney: CHRISTOPHER MANN SUPPLEMENTAL ARGUMENT IN SUPPORT OF MOTION TO DISMISS
04/20/2011 Party(s): SARAH P SPRING OTHER FILING - REPLY MEMORANDUM FILED ON 04/20/2011 Plaintiff's Attorney: DONALD FONTAINE PLTF'S REPLY MEMORANDUM TO DEFT'S SUPPLEMENTAL ARGUMENT IN SUPPORT OF MOTION TO DISMISS Page 3 of 4 Printed on: 06/14/2011 AUGSC-CV-2010-00063 DOCKET RECORD
06/13/2011 Party(s): BOARD OF TRUSTEES, MPERS MOTION - MOTION TO DISMISS DENIED ON 06/09/2011 M MICHAELA MURPHY , JUSTICE THE DEFT'S MOTION TO DISMISS THE PLAINTIFF'S COMPLAINT IN FULL IS DENIED. COpy TO ATTY FONTAINE AND AAG MANN
06/13/2011 Party(s): BOARD OF TRUSTEES, MPERS MOTION - MOTION TO DISMISS GRANTED ON 06/09/2011 M MICHAELA MURPHY , JUSTICE THE DEFT'S MOTION TO DISMISS THE EQUITABLE ESTOPPEL PORTION OF THE CLAIM IS GRANTED. COpy TO ATTY FONTAINE AND AAG MANN COpy TO REPOSITORIES
A TRUE COPY ATTEST: Clerk
Page 4 of 4 Printed on: 06/14/2011