Derry Fire Local 4392

CONCORD - The lawyer for former East Derry fire Chief John Nadeau acknowledged in court yesterday that Nadeau had another job lined up when he was asked to resign in 2004 from the now-defunct Fire Department.

The request for Nadeau's resignation triggered an $89,000 severance package, which a Rockingham County Superior Court judge ordered him and a former fire commissioner to repay in 2005 after learning that Nadeau already had an agreement in place to take a job as the head of the Massachusetts Fire Fighting Academy.

Nadeau appealed that decision to the state Supreme Court, which heard arguments from both sides yesterday.

In his 2005 ruling, Judge Kenneth McHugh said Nadeau was the "likely aggressor" in the "scheme" to give him a package that amounted to nine months' pay. Had Nadeau resigned on his own, he would only have received about $4,700 - three weeks' pay, based on his employment contract.

All along, Nadeau had maintained that he did not have an official job offer at the time of his resignation in Derry. But in response to a question yesterday from Associate Justice James Duggan, Nadeau's lawyer, Glenn Milner, said his client was "virtually assured" that he had the job in Massachusetts.

But Milner said if the precinct hadn't asked Nadeau to resign, he would have just waited to accept the other job until after the town's two fire departments merged.

At yesterday's hearing, attorneys for Nadeau and the East Derry Fire Precinct argued over whether Nadeau should have to repay the remaining $77,000 of the $89,000 severance. Former East Derry Fire Commissioner Allan Lundblad repaid $12,000 of the severance last year.

Milner argued that Nadeau should not have been a party in the case because he did not have a responsibility to protect the interests of the taxpayers.

He "cannot breach a fiduciary duty because he doesn't owe one," Milner said. Safeguarding the interests of taxpayers, he said, is the duty of commissioners. Milner said McHugh agreed that Nadeau didn't owe that responsibility, but still ordered the severance to be repaid.

But Andru Volinsky, the East Derry Fire Precinct's lawyer, said Nadeau was named in the lawsuit because he benefited from the severance agreement the precinct wanted to rescind and Nadeau had a right to argue in the matter.

Milner called McHugh's decision to rescind the severance package an abuse of his judicial discretion. Milner said to require the severance recision, the action would have to be "unconscionable," which is a high standard.

"McHugh saw it as unconscionable," Associate Justice Richard Galway said.

"There are facts here that support that it was unconscionable," Duggan added.

Volinsky called it an equitable relief that was within the judge's discretion.

"The basis for recision was fraud," he said.

Milner also argued the case is moot because the East Derry Fire Precinct dissolved at the end of 2005. He said though Volinsky argues that the precinct has the right to wind up its affairs, the agreement to consolidate the two fire departments in town did just that. He argued that the town should have taken the responsibility for the case, but didn't.

Volinsky agreed that the town inherits the assets of the former precinct, including any returned severance, but said whether the money is returned to the precinct or the town doesn't "moot the claim."

No ruling was issued yesterday. Volinsky said it could take anywhere from three to six months for the justices to issue an opinion.

Background:

Former East Derry fire Chief John Nadeau appealed a Superior Court decision that he repay severance he received when he left the East Derry Fire Precinct in 2004. Former Commissioner Allan Lundblad was ordered to help repay the $89,000 Nadeau received. Last year, Lundblad paid the precinct $12,000, which leaves $77,000 outstanding.

What's new:

Yesterday, the Supreme Court heard the lawyers' arguments on the appeal.

What's next:

A decision from the Supreme Court, which could take several months.