Guerrucci v School Dist. of the City of Niagara Falls, N.Y.
Annotate this CaseDecided on October 4, 2013
Supreme Court, Niagara County
Ralph Guerrucci, on behalf of himself and all other persons similarly situated, Plaintiff,
against
School District of the City of Niagara Falls, New York, Defendants.
145480
Edward P. Perlman, Esq.
Attorney for the Plaintiff
James C. Roscetti, Esq.
Angelo Massaro, Esq.
Attorneys for the Defendant
Richard C. Kloch, J.
Plaintiffs are a group of retired employees who were school board administrators for the School District of the City of Niagara Falls and were members of the Administrative and Supervisory Council of the Public Schools (ASC), Niagara Falls, New York. Plaintiffs commenced this class action lawsuit claiming that the School District of the City of Niagara Falls (District) breached provisions of certain Collective Bargaining Agreements (CBAs) by unilaterally altering the health insurance plans provided to plaintiffs. All plaintiffs retired in or after 1984 and all retired under a CBA. In December 1993, the District adopted a new health insurance plan for ASC members called a flexible spending plan. Under this system, the active and retired ASC members receive benefit dollars to purchase health insurance coverage from a list compiled by the District. This system remained in effect until the 2010-11 fiscal school year, when the ASC and District entered into a new CBA, which would commence on July 1, 2010.
Under the new system, the District would provide a health insurance plan to active administrators and retirees under the age of sixty-five through New York 44 Health Benefits Plan Trust, effective July 1, 2011. Retirees aged sixty-five and older would receive their health insurance plan through Blue Cross/ Blue Shield PPO 779 Medicare Advantage Plan. Also, retirees aged sixty-five and older would receive $600, annually, in flexible spending dollars for single individual or $1,200, annually, for a family. This plan was also set to commence July 1, 2011. Plaintiffs' claim that the District unilaterally breached the prior CBAs when the District changed the health insurance plans provided to plaintiffs in the 2011 CBA.
[*2]In a summary judgment motion, the moving party must make a prima facie showing of entitlement to judgment as a matter of law, setting forth the sufficient evidence to demonstrate the absence of any material issues of facts. Alverz v. Prospect Hosp., 68 NY2d 320, 324 (1986). Failure to make such showing requires denial of the motion, regardless of the sufficiency of the opposing papers. Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851, 853 (1985). Once the moving party has made this showing, however, the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action. Zuckerman v. City of New York, 49 NY2d 557, 562 (1980).
It is clear that on a motion for summary judgment involving a written contract, the court must determine the rights of the parties in accordance with the unambiguous provisions of the contract and give the words employed their plain meaning. See, Sanabria v. American Home Assurance Co., 68 NY2d 866, 868 (1986). Whether a contract is ambiguous is a question of law to be resolved by the court. See, W.W.W. Assoc. v. Giancontieri, 77 NY2d 157, 162 (1990); Schreiber v. Cimato, 281 AD2d 961, 961(4th Dept 2001). To be entitled to summary judgment, the moving party must establish that its construction of the agreement is the only construction which can fairly be placed thereon. Lipari v. Maines Paper & Food Serv., Inc., 245 AD2d 1085, 1086 (4th Dept 1997). On a motion for summary judgment based upon a written contract, the construction of an unambiguous provision is for the court to rule on and circumstances extrinsic to the agreement will not be considered. See, W.W.W. Assocs, 77 NY2d at 162-63; West, Weir & Bartel v. Mary Carter Paint Co., 25 NY2d 535, 540 (1969).
When a CBA contains unambiguous language that provides that upon his retirement, the retiree is entitled to the same coverage that is provided to the bargaining unit, the retiree is not guaranteed an equivalent level of coverage that he received when he retired. Kolbe v. Tibbetts, 101 AD3d 1623, 1624 (4th Dept 2012). In Kolbe, retirees of the defendant Newfane Central School District (Newfane) claimed that Newfane breached the CBAs plaintiffs retired under. Id. at 1623. The language in the CBA at issue stated, "[t]he coverage provided shall be the coverage which is in effect for the unit at such time as it is provided to the employee." Id. at 1624. A later CBA stated, "[t]he coverage provided shall be the coverage which is in effect for the unit at such time as the employee retires." Id. In December 2009, plaintiffs were informed that, as stipulated in the new CBA, their copayments for prescription drugs would greatly increase. Id. at 1623. Plaintiffs claimed that based on the language of the CBAs they were not required to pay any increased amount in copayments. Id. The Fourth Department held that the language in both CBAs was unambiguous. Id. Furthermore, the provisions meant that a retiree is entitled to the same coverage that is provided to the bargaining unit; not that a retiree will receive the same amount of coverage he received when he retired. Id. at 1624. The Court concluded that defendant did not unilaterally breach any CBAs when it required higher copayments because the CBAs did not guarantee that the levels paid by retirees would remain the same throughout retirement.
When a CBA contains unambiguous language that states that retirees shall receive benefits equivalent to those in effect at the time of their retirement, the level of benefits provided cannot be reduced below the level present at retirement. In Della Rocco v. City of Schenectady, a group of retired City of Schenectady police officers and firemen sued the City of Schenectady (City) for breach of contract in two different suits. Della Rocco v. City of Schenectady, 252 AD2d 82, 83 (3d Dept 1998). Each group of plaintiffs retired under a CBA that stated in relevant parts, "[defendant] at its own expense shall provide hospitalization and major medical [*3]insurance with coverage equivalent to the plan presently in effect for each member of the Department and his family and for retired members and their families." Id. (emphasis added). In 1990, the City amended the contracts and required increased copayments. Id. The Court held that this was an impermissible change to the health benefits of the retirees. Id. The Third Department held that the contract clearly stated that the retirees were entitled to the same or equivalent coverage during retirement as was in effect at the time each member retired. Id. at 84; see also, Hudock v. Vill. of Endicott, 28 AD3d 923, 924 (stating that a provision of a CBA that said the annual cost towards a premium would remain the same meant that the village could not require the retirees to contribute more for their annual medical insurance than they did upon retirement).
Here, the entire class of plaintiffs retired on or after 1984 and only the language of these CBAs are at issue. The relevant part of the 1984-87 CBA Article 18(F) states,
"[a]ny administrator who retires under the provisions of Article 11 of the New York State Education Law shall continue to receive the Blue Cross/ Blue Shield coverage in effect at the time of his or her retirement, excluding dental coverage and major medical insurance, until the administrator becomes eligible for Medicare, at which time the Board shall no longer provide such coverage." Perlman Aff. Ex. A, at 5.
The 1987-90 CBA contains similar language in Article 19(F). Id.
The 1990-94, 1994-97, 1997-2000, 2000-03, and 2003-06 CBAs state:
"any administrator that retires under the provisions of Article 11 of the New York State Education Law shall continue to receive the Blue Cross/ Blue Shield coverage in effect at the time of his or her retirement, excluding dental, vision and major medical coverage, until the administrator becomes eligible for Medicare, at which time the Board shall no longer provide such coverage, except as provided in Section I. below." Id. at 5-6.
Section I is entitled Lifetime Supplemental Benefits for Retirees and states,
"The Board of Education shall provide insurance coverage as set forth in Section E. for member of the bargaining unit lawfully retiring in the future provided that such member has completed a minimum of twenty (20) years of service in the employ of this school district or ten (10) years of service as an administrator in this school district at the time of retirement. When the retiree reaches his or her sixty-fifth (65th) birthday and qualifies for medical insurance under Social Security, the coverage shall be changed to that which is supplement to Medicare." Id. at 6.
The specific language contained in these provisions of the CBAs is unambiguous. Neither party disputes the fact that plaintiffs who retired under Article 11 of the New York State Education Law are entitled to certain health insurance plans. However, plaintiffs argue that defendant breached these CBAs when in 2011, defendant unilaterally changed the health insurance plans provide to plaintiffs. Pl's Mem. at 2. Plaintiffs argue that they are entitled to the same level of health care benefits as were in place when they retired. Id. However, a plain reading of the CBAs' provisions in issue provides otherwise.
The language used in each CBA does not guarantee that retirees will receive the same or an equivalent level of coverage during retirement. The language in the CBAs only states that the retirees will receive some type of medical insurance plan until that retiree is eligible for Medicare. In Kolbe, the Court was faced with similar provisions in two CBAs and concluded that the provisions in question did not state that the level of coverage must remain the same throughout the plaintiffs' retirement. Kolbe, 101 AD3d at 1624. Similarly, the provisions of the CBAs in question here, do not specifically state that the level of health insurance coverage [*4]provided by defendant will remain the same as it was at the time of the plaintiffs' retirements. Unlike Della Rocco, where the CBA specifically stated that retirees would receive coverage "equivalent to the plan presently in effect," the CBAs at issue do not contain such language. Della Rocco, 252 AD2d at 82. Plaintiffs are not entitled to the same or an equivalent health insurances plan that they received upon retirement. Therefore, defendant did not breach any terms of the CBAs when it changed the health insurance plans that plaintiffs would receive.
The court disagree with plaintiffs' claim that qualified administrators, those who retire with at least twenty years of employment by the District, or ten years employment by the District as administrators, once reaching the age of 65, are entitled to a health insurance plan that coupled with Medicare equals the coverage they received upon retirement. Section I of the CBAs from 1990-2006 and section L of the 2006-10 CBA contain a provision entitled "Lifetime Supplement Benefits for Retirees." Perlman Aff. Ex. A at 5-6. A plain reading of these sections cannot reasonably be read to say that these qualified retirees are entitled to a health insurance plan that when added to their Medicare plan equals the level of coverage they received upon retirement. These sections only state that qualified retirees will receive a health care plan that is supplemental, not equivalent, to their Medicare plan. Id. Plaintiffs admit that these qualified plaintiffs did receive some type of supplemental benefits provided by defendant. Farley Aff. at 7; Lojek Aff. at 7. Defendant has not breached the contract because it has supplied qualified retirees with supplemental health insurance plans.
Plaintiffs' argues that the term "supplemental" as stated in the provisions of the CBAs in question means equivalent based on a 1989 Memorandum of Understanding entered into by the ASC and defendant. However, on a motion for summary judgment based on a written contract, the construction of an unambiguous provision is for the court to rule on and circumstances extrinsic to the agreement will not be considered. See, W.W.W. Assocs, 77 NY2d at 162-63. Since the CBAs are unambiguous, the court will not consider outside evidence to determine their terms. Therefore, the 1989 Memorandum of Understanding will not be considered by the court.
Even if the Memorandum of Understanding is consider by the court, the result would not change. The Memorandum of Understanding defines the term "supplementary," not "supplemental." Def.'s Cross-Mot., Ex. 2. In the relevant CBAs, the language states that qualified retirees will receive a plan that is supplemental to Medicare, not supplementary. Perlman Aff. Ex. A at 5-6. Furthermore, the Memorandum of Understanding provides supplementary health insurance benefits to a select group of retirees, who met certain criteria. The Memorandum of Understanding gives these supplementary benefits to ASC members who either:
"A. give irrevocable written notice to the Board of Education of their prospective retirement date by February 24, 1988, and B. whose prospective retirement date falls between July 1, 1988 and February 1, 1989 inclusive, and C. who will be age fifty-five (55) or older by the date of their prospective retirement" or " those who will be fifty five (55) after February 1, 1989 but prior to the expiration of the 1987-90 Board- ASC negotiated agreement, shall be eligible for the above benefits provided they give irrevocable one year's written notice of their prospective retirement and (2) the date of such prospective retirement shall be no later than July 1, 1990." Def's Cross-Mot. Ex. 2
The supplementary coverage provided under the Memorandum of Understanding is reserved for a select group of retirees who meet all the general requirements. Plaintiffs have not given any evidence to show that any of its members qualify for the supplementary benefits under [*5]the Memorandum of Understanding. Therefore, even if the court takes the Memorandum of Understanding into consideration, the court still concludes that it has no bearing on this motion.
Finally, the statutory moratorium that was enacted in 1994, which prevents schools from unilaterally reducing benefits for retirees without a commensurate diminution of benefits for active members, has not been violated. The statute requires that School Districts do not reduce retiree's coverage below the level of coverage of active employees. L. 1994, Ch. 729. It is clear that the health insurance plans provided to active employees was changed in the same manner that the retirees' plans were changed. Plaintiffs' claim that the active union members received a wage increase in return for the change in health insurance plans and that this type of "horse-trading" is against the statutory purpose of the moratorium. Pl's Mem., at 13. However, this claim is wholly speculative and unsupported. The agreement entered into by defendant and the active members of the ACS was in compliance with the statutory requirements, and thus, statute has not been violated.
The Court finds that the CBAs entered into from 1984through 2010 were unambiguous as to the relevant provisions. Further, it finds that these CBAs do not require that defendant provides health insurance plans that are equivalent to the health insurance plans plaintiffs' received when they retired. Therefore, defendant did not breach the CBAs when it offer different health insurance plans to retirees than the plans they received upon retirement. The plaintiffs' motion for summary judgment is denied and defendant's cross motion for summary judgment is granted.
Submit Order.
HON. RICHARD C. KLOCH, SR.
Acting Supreme Court Justice
October 4, 2013
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