Milliman, Inc. v. Maryland State Retirement & Pension System

HARRELL, J., dissenting, in which MURPHY and ADKINS, JJ., join.

The Maryland Code requires the Maryland State Retirement and Pension System (“the System”) to employ the services of an actuary to “give technical advice ... on the operation of the funds,” among other duties. Maryland Code (1993, 2009 Repl.Val., 2010 Supp.), State Personnel and Pensions Article, § 21-125(a).1 Pursuant to the statute, each year, the State contributes to an “accumulation fund,” which the System stewards and uses to meet obligations to employee-members. See §§ 3-501, 21-302-308. The State bases these contributions on the actuary’s estimates.

In the present case, the actuary hired by the System, Milliman, Inc. (“Milliman”), committed a long-running mathematical error that caused a contribution shortfall of $34 million. In addition to this shortfall, the System alleges (and the Board of Contract Appeals’s and the Majority’s opinions agree) that the total damages should include an additional $39 million, representing the interest the System would have reaped through investment of the contribution shortfall. That total—$73 million—is not a proper or accurate calculation of damages as a matter of law, as I see it. Although I grant that the System is a “special” appendage of State government, vested with a somewhat unique degree of independence, for purposes of calculating damages here (if not more), there is no legally- or logically-sound reason to treat the System and the State as separate entities.

Because the System and Milliman did not specify how damages should be calculated in the instance of a breach of *175the contract, we should put the parties in the position they would have been but for the breach. To do so, we should not blind ourselves to the reality that the State and the System are part of a single government and that, together, they did not suffer a contributory loss, as the State continued to collect and enjoy the same amount of revenue, irrespective of Milliman’s error. The fact that the System was unable to invest the $34 million simply leaves open the possibility of limited damages—the difference in the rate of investment return attributable to the two governmental units. According to Milliman, that amounts to $24.7 million.

I.

Before this Court, Milliman argues that any damages calculation should take into account that the State and the System are one entity, even though the State, as such, was not a named party to this litigation. The facts of the present case indicate that the State did not change its behavior, save for retaining the $34 million in other areas of the government and not the System. Stated another way, the State collected the same amount of revenue, but simply used the money in other contexts, outside the retirement system. Thus, Milliman posits that there must be more limited damages than was awarded by the Board of Contract Appeals.

A. The State and the System’s Ineradicable Interconnectedness

To “determin[e] whether a statutorily-established entity is an agency!,] instrumentality,” or mere appendage, “of the State for a particular purpose,” like the calculation of damages, we have “repeatedly recognized that there is no single test....” A.S. Abell Pub. Co. v. Mezzanote, 297 Md. 26, 35, 464 A.2d 1068, 1072 (1983). Instead, “[a]ll aspects of the interrelationship between the State and the statutorily-established entity must be examined in order to determine its status.” Id. (citations omitted); see e.g., A.S. Abell Pub. Co., 297 Md. at 39, 464 A.2d at 1074 (“After examining all aspects of the interrelationship between the State and [the Maryland *176Insurance Guaranty Association (“MIGA”) ], including the degree of control exercised by the State over MIGA’s operation, we are persuaded that MIGA is an agency or instrumentality of the State [and, therefore,] within the scope of the Public Information Act.”).2

Through Title 21 of the State Personnel and Pensions Article, the Legislature created a “State Retirement and Pension System” to “provide benefits ... for [State-employee] participants in the several systems.” § 21—101(b). Although the Legislature created an uncompensated Board of Trustees to run much of the System, it retained significant managerial oversight and discretion. Maryland State Retirement and Pension System, Comprehensive Annual Financial Report 24 (2010), http://www.sra.state.md.us/Agency/Downloads/CAFR/CAFR-2010.pdf (“The System is fiscally dependent on the State by virtue of the legislative and executive controls exercised with respect to its operations, policies, and administrative budget.”). Indeed, under the statute, the State is obliged to “pay[ ] ... all allowances and other benefits”; to “creat[e] and maint[ain] ... reserves in the accumulation fund[ ]”; to “credit[ ] ... regular interest to the annuity savings fund[ ]” and to “pay[all] ... expenses for administration and operation of the several systems.” § 21-302(a)(1)-(4) (emphasis added). To that end, the Governor and the Legislature require the Board to submit an annual budget report, § 21-109, which they consult discretionarity in their preparation of the *177State Budget.3 Moreover, while the Board is empowered to hire an actuary, like Milliman, the General Assembly reserved the power to hire its own “Legislative Auditor” to “conduct an annual or biennial fiscal and compliance audit of the [System’s] accounts and transactions....” § 21-127.

The State’s paternal role with regard to the System does not end there. The General Assembly designated the State Treasurer, not the Board of Trustees, “fa]s the custodian of ... the accumulation, annuity savings, and expense funds of the several systems ... and the assets of the Board of Trustees.” Payments from these funds must follow regulations formulated by the Board, but approved ultimately by the State Treasurer. § 21-124(a)(2). The Legislature also entrusted the State Treasurer with the job of physically “safeguarding]” the System’s assets. § 21-124(b). The State discloses these assets in its own financial statements. See Comprehensive Annual Financial Report at 24.

Such oversight and reservation of authority is understandable, given that the General Assembly—rather than the Board of Trustees, employees, or any other group(s)—is responsible for the welfare of the System. The State pays into the System not only as an “employer,” but also as the only guarantor of risk and loss. Indeed, as a last resort, the statute requires the State to “pay to the accumulation fund ... at least an amount that when combined with the amount in the accumulation fund ... is sufficient to provide the allowances and other benefits payable out of the fund .... ” § 21-*178302(c). The System does not have a separate power to raise funds, outside of investing profitability the State’s- and employees’ contributions. § 21-108(c).

This scheme reveals that the System is merely an extension of the State (i.e., part of a single government), not simply because it was created by the Legislature, but because of the close, ongoing, and managerial presence of the State in the activities of the System. To refer to the System at large is to refer to the State, at least for the purpose of calculating damages. Los Angeles County Employees Retirement Association v. Towers, Perrin, Forster & Crosby, 2002 WL 32919576, at *15, 2002 U.S. Dist. LEXIS 27916, at *50 (C.D.Ca.2002) (“[W]hile the separateness of [a retirement system] and [a c]ounty is recognized for a number of purposes, this separateness is not absolute and does not pervade every aspect of the relationship. For certain functions [including the calculation of damages], [the retirement system] and the [c]ounty should be considered the same entity.”).4

*179B. The Extent of the System’s Damages

Any measure of damages resulting from a contractual breach must be based on the facts at hand and the realities of the parties’ situations. In the present case, Milliman misstated the amount that the State should provide to the System under statutory contribution formulae. As a result, the State did not contribute an extra $34 million, spread out over twenty-two years.5 For purposes of context, those contributions would be $1.5 million per year if spread out evenly. In response to Milliman’s faulty underestimation, the State did not seem to change accordingly its revenue-collection practices. This is not surprising, considering that the State, in the same timespan, contributed many billions of dollars—$1.3 billion in fiscal year 2010 alone. Such a minuscule annual amount of “missing” contributions did not affect the System’s target funding goal and, therefore, did not alter the State’s behavior.

Although an appendage of the State, i.e., the System, did not possess for its immediate use the $34 million, the State at large did. The true impact of the calculation error was that the State, and not the System, retained and invested (or applied) the $34 million elsewhere. Thus, proper damages would be the difference in the investment return only.

The story of damages would be written differently, of course, if the error had caused the employee-members not to make $34 million worth of contributions. In that instance, no one would enjoy the use of the $34 million—that is to say, the State’s financial statements would be missing $34 million. That is not the case here.

When calculating damages flowing from a contractual breach (absent a contractual agreement governing the calculation of damages in the event of breach), courts endeavor to put *180the parties in the position that they would have been but for the breach. St. Paul at Chase Corp. v. Manufacturers Life Ins. Co., 262 Md. 192, 250, 278 A.2d 12, 40 (1971) (“The Court should endeavor to place the injured person, so far as possible, by monetary award, in the position he would have been if the contract had been properly performed.” (internal quotation marks and citation omitted)). As this Court stated:

The damages which a plaintiff is entitled to recover for a breach of contract should be such as may fairly and reasonably be considered as either arising naturally, i.e., according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of a breach of it.

St. Paul at Chase Corp., 262 Md. at 240, 278 A.2d at 35 (internal quotation marks and citation omitted). To do so, we must judge not what the non-breaching party wants to recover, but what he/she/it should recover in light of the facts at hand.

In the present case, the parties did not establish in their contract how damages would be calculated in the event of a breach. As such, we must determine how to make the non-breaching party whole, in light of what “may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract....” Id. Given that the State, as a single government, was not deprived of the use of the $34 million, the proper damages amount—i.e., the amount needed to fulfill the State’s expectations—is the difference in the investment return. Such a calculation has the added benefit of approximating what the parties would have expected reasonably. Milliman was being paid $100,000 a year for its actuarial services and would not have expected reasonably to pay for damages, totaling almost $100 million, for damages not suffered actually as a result of its actions. If the State/System thought a breach should lead to a windfall, whereby the actuary would match sums already in the State coffers, then it should have specified as much in the contract; it did not.

*181II. The Majority Opinion’s Main Underpinnings

A. The State Is Not a Party to the Proceeding

The Majority opinion dispatches with any consideration of the State’s role by pointing out that “[t]he State ... was not a party before us, nor before the Board [of Contract Appeals]. ...” Majority op. at 162, 25 A.3d at 1007. The Majority finds supportive in this regard a medical malpractice case in which, according to the Majority opinion, “we precluded a physician who had been adjudicated as negligent from seeking contribution from the three alleged ‘joint tortfeasors’ who were not joined as parties in the original action, because the [three tortfeasors] did not have an opportunity to participate in the primary case.” Majority op. at 163, 25 A.3d at 1007 (analyzing Hashmi v. Bennett, 416 Md. 707, 7 A.3d 1059 (2010)).

The instructive value of Hashmi is far from evident. Here, we confront a breach of contract, involving a government claim against a private contractor. Hashmi was also a medical malpractice case, involving only private and distinct (legally and biologically) parties. Moreover, in Hashmi, we held that a tortfeasor-physician could not seek contribution from other alleged tortfeasors primarily because the hospital release protected them. See Hashmi, 416 Md. at 724-25, 7 A.3d at 1069-70. We then stated in the alternative (and, thus, arguably in dicta) that a post-trial “judicial determination” of contribution would deprive the alleged tortfeasors of “notice or ... an opportunity to defend,” in violation of the Maryland Rules. Hashmi, 416 Md. at 725, 7 A.3d at 1070 (“Even if we were to determine that the ... [r]elease was ambiguous, we would not countenance the separate, post-trial proceeding Dr. Hashmi proposes [of the other alleged tortfeasors]....”); Hashmi, 416 Md. at 729, 7 A.3d at 1072 (citation omitted).

In the present case, Milliman is not trying to reduce possible damages by seeking contribution from the State as a joint tortfeasor; it is arguing that there are little to no damages in the first instance, given the fact that the non-breaching party did not suffer, in fact, an actual loss. Indeed, Milliman is asking this Court (fairly in my estimation) and the Board of *182Contract Appeals not to blind itself to certain facts when determining the proper measure of damages to make a non-breaching party whole. Ordinarily, I would rebuff contentions that the State lacked notice and an opportunity to defend itself, but doing so credits Hashmi with an unjustifiable amount of applicability—comparing the present case to Hash-mi is like forcing a round peg into a square hole. Rather, I will address the premise of the Majority opinion’s damages calculation—that the State and the System are not part of a single entity.

B. The State and the System Are Not One Legal Entity.

Acknowledging that “we have never had occasion to consider the identity of the System and the State,” the Majority opinion considers in depth two foreign cases—Day v. New Hampshire Retirement System, 138 N.H. 120, 635 A.2d 493 (1993), and Traub v. Board of Retirement of the Los Angeles County Employees Retirement Association, 34 Cal.3d 793, 195 Cal.Rptr. 681, 670 P.2d 335 (1983). Both cases involve a government employee who was awarded, by an administrative adjudication, workers’ compensation benefits and then attempted to use that decision to estop collaterally the retirement system from denying similar benefits. Day, 635 A.2d at 494; Traub, 195 Cal.Rptr. 681, 670 P.2d at 337. In each case, the respective court concluded that, for purposes of collateral estoppel, the workers’ compensation board and the retirement system were not “in privity.” Day, 635 A.2d at 497; Traub, 195 Cal.Rptr. 681, 670 P.2d at 338. They noted that any payout to the government employee would come not just from the State, but also the employees who contributed to the retirement system. Day, 635 A.2d at 497; 670 P.2d at 338. Those employees were not represented in the initial workers’ compensation decision. See Day, 635 A.2d at 497.

The present case does not involve the sometimes perplexing world of collateral estoppel. Rather, we confront the issue of contractual damages flowing to the State/System (including *183employees, who contributed voluntarily to a State-created and -managed fund). We need not concern ourselves with “privity”; we need only determine (as we did supra) that the State and System are one entity for purposes of evaluating the true financial injury in this case. See A.S. Abell Pub. Co., 297 Md. at 35, 464 A.2d at 1072. Nevertheless, even if the “oneness” of the State and System—for purposes of calculating damages—depends on a finding of privity, such evidence exists in the record. The State, System, and employees all possessed the same interest in the $34 million. The State is obliged to make up any shortfalls in the System; the System has a duty to govern toward fiscal solvency; and, the employees want to secure their retirement future.6 In short, their interests are aligned sufficiently.

*184C. Maryland Has Not Adopted the “Unitary Creditor” Doctrine.

Milliman argues that the State and the System are one legal entity and that, as a result, it “should be allowed to recoup or offset the benefit of the funds retained by the State against any damages claimed by the System....” (Emphasis added.) As part of this claim, Milliman refers to the federal “unitary creditor” doctrine, a principle which allows federal agencies to “set off debts owed by one agency against claims that another has against a single debtor.” Turner v. Small Bus. Admin., 84 F.3d 1294, 1296 (10th Cir.1996) (en banc). A classic illustration is where Agency 1 owes money to a person, but that person owes money simultaneously to Agency 2. The agencies and individual debtor are permitted to setoff those claims.

Transposed to the present context, such a claim fits awkwardly, as we are not dealing with a company that simply owes money to the government, whether we define that government as the State or the System. I believe that the “set-off’ claim may be better understood under ordinary contract law and damages canons, as explained swpra. Nonetheless, the argument may be made that, should the System receive a judgment for all contributions and investment interest, Milliman would be able to assert a claim against the State. Thus, Milliman should be able to skip a step and simply have its own claim heard in the same action.

Indeed, in a case remarkably similar to the one at bar, the U.S. District Court for the Central District of California allowed an actuary who committed mathematical errors, which caused a county government to underpay its retirement system, to argue for such a setoff. Towers, Perrin, Forster & Crosby, 2002 WL 32919576, at *9, 2002 U.S. Dist. LEXIS 27916, at *29. The actuary, in particular, claimed that:

[A]ny recovery by [the retirement system] must be reduced based on the amounts that allegedly should have been contributed by the [c]ounty but were not, because [the retirement system] and the [c]ounty are effectively a “closed *185system.” [The actuary] contends that it is ... entitled to offset ... any funds, including any earnings on such funds, the [cjounty did not contribute ... and thus retained for other uses____

Towers, Perrin, Forster & Crosby, 2002 WL 32919576, at *1, 2002 U.S. Dist. LEXIS 27916, at *3. “Even in the absence of the precise articulation of the claim to be setoff against [the one at hand],” the court held that a setoff defense is appropriate in light of the ultimate goal of “eliminatf ing] a superfluous exchange of money between the parties.... ” Id. (internal quotation marks omitted).

To so conclude, the court needed to find sufficient mutuality between the actuary and the government—enter the unitary creditor doctrine. This reliance, the Majority opinion concludes, renders the decision whofly-inapplicable to the present case, as “we have not ascribed” to that doctrine. Majority op. at 163, 25 A.3d at 1008 n. 10.1 disagree respectfully.

In Lomax v. Comptroller of Treasury, 323 Md. 419, 420, 593 A.2d 1099, 1100 (1991), we considered a case where a state school teacher, Mary Lomax, received retirement benefits from the System. The Comptroller of the Treasury (“Comptroller”) obtained a judgment and lien against Lomax for unpaid income tax. Id. “In an attempt to satisfy this judgment against Lomax, the Comptroller filed with the Clerk of the Circuit Court for Baltimore County a request for writ of garnishment to be served on the ... System[ ]....” Id. We held that the State could effectuate such an inter-governmental maneuver, explaining that:

In the instant case, the Retirement System and the Comptroller are both agencies under the control of the same sovereign, the State. Maryland Code (1957, 1988 Repl.Vol., 1990 Cum.Supp.), Art. 73B, § 16 provides that payment of all pensions, as well as all expenses for the administration and operation of the state retirement systems are obligations of the State. The [administrative] inconveniences enumerated in City of Baltimore [v. Comptroller, 292 Md. 293, 439 A.2d 1095 (1982) ] and Hughes [v. Svboda, 168 Md. *186440, 178 A. 108 (1935), dealing with a local government paying benefits to the State rather than local-government employees] clearly do not apply here since the Comptroller and the Retirement System work within the same governmental unit and both are even represented by the same attorney, the Attorney General. The public affairs of the State government would in no way be disrupted if these two agencies of the same government were permitted to cooperate in the garnishment of Lomax’s pension benefits. City of Baltimore is clearly inapposite.
It is a fundamental principle of creditors’ rights that creditors have a right to set-off and may apply moneys owed to debts due. See United States v. Munsey Trust Co., 332 U.S. 234, 67 S.Ct. 1599, 91 L.Ed. 2022 (1947): “The government has the same right ‘which belongs to every creditor, to apply the unappropriated moneys of his debtor, in his hands, in extinguishment of the debts due to him.’ ” Id. at 239, 67 S.Ct. at 1602, 91 L.Ed. at 2027 (quoting Gratiot v. United States, 40 U.S. (15 Peters) 336, 370, 10 L.Ed. 759, 771 (1841)). We doubt that the Legislature intended to extinguish the State’s right to accomplish through the legal process of garnishment that which it might be entitled to do by a self-help mechanism such as set-off.

Lomax, 323 Md. at 426-27, 593 A.2d 1099 (emphasis added).

This is the most classic form of the unitary creditor doctrine, where one agency (i.e., the System) owes money to a debtor, but that debtor owes money to another agency (i.e., the Comptroller). Indeed, these were similar to the facts of the case in which the U.S. Supreme Court adopted originally the unitary creditor doctrine—Cherry Cotton Mills v. United States, 327 U.S. 536, 105 Ct.Cl. 824, 66 S.Ct. 729, 90 L.Ed. 835 (1946). See Turner, 84 F.3d at 1296-97 (“[T]he Court’s language [in Cherry Cotton Mills ] clearly indicates that agencies of the United States government are deemed a unitary creditor.... ”); Turner, 84 F.3d at 1296 (“[I]n Cherry Cotton Mills ... the Supreme Court made clear that the United States has a right to effect interagency setoffs.”). As a further indication that this Court adopted the unitary creditor concept in Lo-*187max, we quoted there Munsey Trust Co., a case which relies explicitly on Cherry Cotton Mills to conclude that an agency need not pay a contractor who owed a greater sum of money to another agency. See Munsey Trust Co., 332 U.S. at 240, 67 S.Ct. at 1602, 91 L.Ed. at2028.7,8,9

*188III.

My reservation with the Majority opinion steins from its disregard of otherwise accessible and dispositive contract axioms, the polestars of the damages question. When a party claims a loss, it must demonstrate the reality of that loss—the State asks for another $84 million, despite previously collecting and enjoying the same. Moreover, I fail to see how the set-off and unitary creditor principles—if necessary to bring into focus the full damages issue—are not applicable to the present case. I harbor also some hesitation regarding our eagerness to declare agencies, especially those that depend on State Government funds, as separate and unique entities, approximating corporate subsidiaries. But see Maryland Transportation Authority v. Maryland Transportation Authority Police Lodge # 34 of the Fraternal Order of Police, 420 Md. 141, 21 A.3d 1098 (2011) (holding that the Maryland Transportation Authority did not have total autonomy such that it could bargain collectively, even though the Legislature delegated to it a great deal of authority, including the ability to raise revenues through tolls).

In my opinion, we should direct a remand to the Board of Contract Appeals with instructions to recalculate damages to reflect the fact that the State and the System are a single entity. Practically speaking, the Board of Contract Appeals should determine and then limit damages to the difference between what the State earned, in fact, and what the System would have earned, with respect to a return on investment of the $34 million in “missing” contributions.

*189Judge Murphy and Judge Adkins authorize me to state that they join the views expressed in this dissenting opinion, except that Judge Adkins does not subscribe to footnote 8.

. All code citations refer to the State Personnel and Pensions Article, unless otherwise indicated.

. Engaging this analysis, this Court should not apply, as the Majority opinion does, a deferential standard of review. The Majority opinion concedes that the relevant question here is “how to measure damages caused by errors in actuarial recommendations related to pensions systems....” Majority op. at 157, 25 A.3d at 1004. Stated another way, the issue is whether the State and the System should be considered one entity for purposes of calculating damages. This is a question of law, deserving a de novo standard of review. See L.A. County Employees Ret. Ass’n v. Towers, Perrin, Forster & Crosby, Inc., 2002 WL 32919576, at *10, 2002 U.S. Dist. LEXIS 27916, at *31 (C.D.Cal.2002) ("Whether government agencies should be deemed a single entity for purposes of setoff is a question of law.” (citing United States v. Maxwell, 157 F.3d 1099, 1102 (7th Cir.1998))).

. For fiscal year 2012, the State passed a $14.6 billion operating budget (which refers to the General Fund as opposed to debt obligations), wherein it allocated $1.5 billion for the pension system. Maryland Department of Budget and Management, Reforming Maryland’s Pension System: A Path to Sustainability 3 (2011), http://www.governor. maryland.gov/documents/RetirementReform.pdf. In the last decade, with the retirement of 40,000 additional members (along with myriad other factors), the State has increased its contribution amount by 178%. See Maryland State Retirement and Pension System, Comprehensive Annual Financial Report 101 (2010), http://www.sra.state.md.us/Agency/ Downloads/CAFR/CAFR-2010.pdf; Reforming Maryland’s Pension System 4. Nevertheless, the State faces currently $35 billion in unfunded liabilities. Reforming Maryland’s Pension System 2.

. Although I use the word "agency,” I do not mean to invoke the relationship between a corporate parent and its legally-recognized subsidiary. I agree with the U.S. District Court for the Central District of California and the U.S. Bankruptcy Appellate Panel of the Ninth Circuit that:

"[T]he more appropriate analogy is that of separate departments within a single corporation. Just as a large corporation has different departments—marketing, sales, accounting, personnel, etc.,—with individual, budgets and separate interests, so does the federal government. In both situations, each separate department must compete against the others for its share of the overall budget. Such is not necessarily the case with corporate subsidiaries, who are often expected to be self-sustaining and whose fortunes are not necessarily tied to the parent’s profitability.”
In the instant case, the relationship between [a county retirement system] and the [c]ounty [government] is more akin to that of separate departments within a single corporation than to the relationship between a parent-corporation and a wholly-owned subsidiary. [The retirement system] is not self-sustaining, and [its] fortunes are indisputably tied to the [c]ounty's "profitability.”

See Towers, Perrin, Forster & Crosby, Inc., 2002 WL 32919576, at *13, 2002 U.S. Dist. LEXIS 27916, at *31 (quoting HAL, Inc. v. United States, 196 B.R. 159, 165 (9th Cir. BAP 1996)); HAL, Inc., 196 B.R. at 163 (finding that the organization of federal agencies supported a *179finding of mutuality, in part, because “all federal agencies draw from or contribute to a common pool of money, the U.S. Treasury”).

. The System claims it would have invested the money so wisely as to reap another $39 million.

. The Majority opinion describes the question at hand as "how to measure damages caused by errors in actuarial recommendations related to pensions systems....” Majority op. at 157, 25 A.3d at 1004. It determines that we must "place the [System] in the position it would have been in but for the breach.” Majority op. at 159, 25 A.3d at 1005. I agree; however, the Majority opinion strays too far from that premise.

It concludes that, despite the State Government possessing the $34 million in question, the State (through its appendage, the System) is owed another $34 million. To do so, the Majority opinion spends considerable time (as it must) arguing that the State and (he System are separate legal entities. In particular, as noted supra, it analyzes at length Day v. New Hampshire Retirement System, 138 N.H. 120, 635 A.2d 493 (1993) and Traub v. Board of Retirement of the Los Angeles County Employees Retirement Association, 34 Cal.3d 793, 195 Cal.Rptr. 681, 670 P.2d 335 (1983). It also refers to Dardaganis v. Grace Capital, Inc., 889 F.2d 1237 (2d Cir.1989) and Board of Trustees v. Mercer, 2003 WL 21481021, 2003 Cal.App. Unpub. LEXIS 6236 (Cal.Ct.App.2003), which I shall discuss here.

In Dardaganis and Mercer, the question decided was whether the lost use of contribution—that is, the difference in the rate of return between a government and its retirement system—was included appropriately as "damages." The Dardaganis court held that "[i]f, but for the breach, (he [f]und would have earned even more than it actually earned, there is a ‘loss’ for which the breaching fiduciary is liable.” Dardaganis, 889 F.2d at 1243 (emphasis added). The Mercer court ruled that the “use of lost investment income [is] a reasonable basis on which to calculate damages.” Mercer, 2003 WL 21481021, at *5, 2003 Cal.App. Unpub. LEXIS 6236, at *14 (emphasis added). Neither court declared precedential law on the matter of contributions, despite favorable dicta in Mercer.

. The Majority opinion disagrees with the notion that, in Lomax v. Comptroller of Treasury, 323 Md. 419, 420, 593 A.2d 1099, 1100 (1991), this Court adopted substantively the unitary creditor doctrine, arguing that "[wjhere the unitary creditor doctrine has been embraced, it has been in explicit terms: '[T]he United States is treated as a unitary creditor, and agencies of the Untied States government ... may set off debts owed by one agency against claims that another agency has against a single debtor.” Majority op. at 164, 25 A.3d at 1008 n. 10 (emphasis added) (quoting Turner v. Small Bus. Admin., 84 F.3d 1294, 1296 (10th Cir.1996) (en banc)). The case on which the Majority opinion relies, Turner, acknowledges that the Supreme Court adopted the unitary creditor doctrine in Cherry Cotton Mills v. United States, 327 U.S. 536, 66 S.Ct. 729, 90 L.Ed. 835 (1946). See Turner, 84 F.3d at 1296-97 ("[T]he Court’s language [in Cherry Cotton Mills] clearly indicates that agencies of the United States government are deemed a unitary creditor .... ”); see also Hi. Airlines, Inc. v. United States, 122 F.3d 851, 852-853 (9th Cir.1997) ("The Supreme Court clearly adopted the unitary setoff rule for government agencies in the nonbankruptcy context in Cherry Cotton Mills....”); In re Nuclear Imaging Sys. Inc., 260 B.R. 724, 733 (Bankr.E.D.Pa.2000) (“The decision most often cited in support of the unitary creditor’ principle is Cherry Cotton Mills....”). The Supreme Court adopted this doctrine in Cherry Cotton Mills despite never using the talismanic words "unitary” or "creditor.” See generally Cherry Cotton Mills, 327 U.S. at 536, 66 S.Ct. at 729, 90 L.Ed. at 835.

. The Majority opinion concludes that the System is entitled to damages, “no matter whether the fund’s assets grew as a whole....” Majority op. at 159, 25 A.3d at 1005. I disagree. According to the record, one Milliman error caused underpayment to the System. Another, unrelated Milliman error, however, caused the System to take in more money than required actually. In particular, Milliman overestimated the amount required to meet the Cost of Living Adjustment ("COLA”), resulting in a $160 million addition to the three retirement plans at bar. This is twice the amount the System seeks in damages. Had Milliman presented more evidence before the Board of Contract Appeals of the overfunding issue, I would be more inclined to tether my dissent to these grounds.

. Milliman also argues that there are no damages because the State is obliged to pay any liabilities in the System. The Board of Contract Appeals rejected this averment because to do otherwise would leave the State or System without any effective recourse against a breaching *188actuary. Like the Board of Contract Appeals, I do not find Milliman’s claim particularly persuasive, but I will comment briefly.

As explained in this dissent, an actuary faces monetary consequences if it breaches the contract—the amount of actual loss suffered by the State. If Milliman did not inflict any damages in fact, then, like any other breaching party, it should not be required to provide recompense at law. If the State is not satisfied with this result, it could have—and, in my opinion, should have—detailed in the contract how damages would be calculated.