Opinion
06-1695.
Decided June 25, 2007.
James R. Sandner, Esq. (James D. Bilik, Esq., of counsel), for Plaintiff.
Mitchell, Goris Stokes, LLC (Brendan J. Reagan, Esq., of counsel), for Defendants.
Plaintiff is a retired teacher formerly employed by the defendant school district. At the time of his retirement on June 30, 2004, being single and without any dependents, he continued his "individual" health insurance coverage as part of his retiree benefits under the collective bargaining agreement then in effect between the Cazenovia Central School District and the Cazenovia Central School Teachers' Association. Thereafter, in 2006, he married and notified his former employer that he wanted to change his coverage to "family" coverage to include his wife. Defendants' assistant superintendent of schools responded that, as a retiree, plaintiff had no contractual right to make any changes in his health insurance and, therefore, denied his request.
Plaintiff has commenced this hybrid action and Article 78 proceeding alleging that, under the collective bargaining agreement, he had a contractual right to change his health insurance coverage notwithstanding his retirement and that defendants' actions (1) violate Retiree Health Insurance Moratorium enacted as Chapter 27 of the Laws of 2006, (2) constitute a breach of his contract rights, and (3) were arbitrary, capricious and unlawful.
The defendants have moved, and plaintiff has cross-moved, for summary judgment, each arguing that the terms of the collective bargaining agreement clearly entitle it/him to judgment.
Article XXII ("Health Insurance") of the collective bargaining agreement states:
All bargaining unit personnel currently employed or retired from the Cazenovia Central School who are legally eligible may participate in the Regionwide Plan, Option II, health insurance program under Blue Cross / Blue Shield. . . . Effective June 29, 1998, the cost of coverage shall be paid at a rate of 85% for the individual and 85% for family coverage for then current employees and for those retiring on June 29, 1998 or after.
Additionally, the collective bargaining agreement contains "Appendix G" which also addresses health insurance benefits with the following pertinent provisions:
RETIREMENT. If you were hired after April 1, 1975, you are eligible to continue coverage after retirement if you have completed ten years of service with the District and are either qualified for retirement as a member of a retirement system or are at least 55 years of age, and you are enrolled in the program at the time of retirement.
ENROLLMENT CHANGES. Changes in your family status may make it necessary or desirable for you to change the coverage for which you are enrolled. . . . You may request a change from individual coverage to family coverage for one of the following reasons: To provide coverage for a newly acquired spouse. . . .
The Court of Appeals has recently summarized the law governing the interpretation of a contract:
"Whether a contract is ambiguous is a question of law and extrinsic evidence may not be considered unless the document itself is ambiguous" ( South Road Assoc., LLC v. International Business Machines Corp., 4 NY3d 272, 278 [2005] [citing Greenfield v. Philles Records, 98 NY2d 562, 569 (2002) ]). However, "when parties set down their agreement in a clear, complete document, their writing should . . . be enforced according to its terms" ( Vermont Teddy Bear Co. v. 538 Madison Realty Co. , 1 NY3d 470, 475 [2004] [quoting W.W.W. Assoc., Inc. v. Giancontieri, 77 NY2d 157, 162 (1990) ]); see Springsteen v. Samson, 32 NY 703, 706 [1865] ["where the language is clear, unequivocal and unambiguous, the contract is to be interpreted by its own language"]). Such agreements should be read as a whole to ensure that undue emphasis is not placed upon particular words and phrases ( see South Road Assoc., 4 NY3d at 277 [citing Matter of Westmoreland Coal Co. v. Entech, Inc., 100 NY2d 352, 358 (2003) ]). Moreover, courts "may not by construction add or excise terms, nor distort the meaning of those used and thereby make a new contract for the parties under the guise of interpreting the writing" ( Vermont Teddy Bear, 1 NY3d at 475 [quoting Reiss v. Financial Performance Corp., 97 NY2d 195, 199 (2001) ]). Bailey v. Fish Neave, ___ NY3d ___, ___ (May 8, 2007), 2007 WL 1319268.
Defendants cite the language found in Appendix G which provides that retirees "are eligible to continue coverage after retirement (emphasis added)" as support for their argument. Under this interpretation, the particular coverage ("individual" or "family") in effect at the time of the employee's retirement would continue into his retirement but without any right to change coverage. This strikes the court as an unduly restrictive interpretation. If applied as defendants urge, it would prohibit a retired teacher from changing to individual coverage from family coverage if his spouse were to die. Both the school district and the retiree would thus be obligated to pay for family coverage even though the retiree no longer had a family to support.
The difficulty in attempting to interpret the health insurance provisions of this collective bargaining agreement is that the agreement uses the terms "enrollment" and "coverage" interchangeably. Rather than consistently using "enrollment" to mean participation in the plan and "coverage" to refer to the individual or family option, the language of the agreement is less discriminating. Article XXII, which authorizes participation in the health insurance plan by retirees, provides that school district will pay the same 85% of the cost of coverage regardless of whether individual or family coverage is chosen. Then, in Appendix G, when the agreement purports to address "enrollment changes", it actually addresses changes in coverage, i.e., from "individual" to "family", and vice-versa. In this light, defendants' reliance on the provision that retirees are permitted to continue coverage is misplaced. The more sensible interpretation is that retirees are permitted to continue enrollment in the plan.
This would be far more consistent with the overall provisions of the agreement which, once establishing the retiree's eligibility to continue participation in the health insurance plan, appear to make no other distinction between retirees and current employees. The district pays the same rate (85%) for both current employees and retirees and, it seems to be sufficiently clear, current employees and retirees have the same right to make changes in their coverage. Nothing in the collective bargaining agreement makes any express distinction between current employees and retirees, though that certainly could have been done had that been the intent of the parties.
Defendants' counsel argues in paragraph 7 of his affirmation that if the intent had been to treat retirees the same as current employees, "they would have been explicitly included in the definition of eligible employees and Appendix G would not contain a separate, subsequent clause defining retirees' rights which differ from those provided to eligible employees." This was the situation in the Odorizzi case, cited infra. In fact, it is the manifest intent of the provisions of Appendix G to treat retirees the same as current employees by expressly giving them the right to continue to participate in the health insurance plan after the date of their retirement.
Another inconsistency in the draftsmanship of the collective bargaining agreement is the shift from the use of the third person in Article XXII to the use of the second person in Appendix G. There, it contains a provision addressed to retirees which says "you are eligible to continue coverage after retirement", and then, in the provision addressing "Enrollment Changes", it continues in the second person when it says, "You may request a change from individual coverage to family coverage. . . ." There is no third person distinction made allowing current employees but not retirees to change coverage. Instead, Appendix G uses the second person in both addressing retirees and in making provision for changes in coverage. Thus, the collective bargaining agreement must be construed precisely as it reads, allowing "you" to both continue coverage and to change coverage.
In denying plaintiff's request to change his coverage from individual to family, defendants' assistant superintendent cited not only the provisions of the collective bargaining unit but "past practice" as well. However, when given the opportunity to cite a particular instance when the school district actually denied a retiree's request for a change in coverage, defendants failed to do so. Thus, defendants have failed to demonstrate that any such practice exists. Even if it did, it would have to yield to the provisions of the collective bargaining agreement contained in Article IV ("Implementation and Amendment"):
B. This Agreement shall supersede any rules, regulations or practices of the Board which shall be contrary to or inconsistent with its terms. The provisions of this Agreement shall be incorporated into and be considered a part of the established policies of the Board (emphasis added).
Defendants argue that the case of Odorizzi v. Otsego Northern Catskills BOCES, 307 AD2d 490 (3d Dept 2003) is controlling. In fact, it is not. In Odorizzi, plaintiff, at the time of her retirement, changed her coverage from "family" to "individual" and then, some years later, sought to return to "family" coverage for the benefit of her husband. The Appellate Division ruled in favor of the employer's denial of that request under the unique provisions of that collective bargaining agreement which expressly denied a retiree the right to change coverage. The Odorizzi collective bargaining agreement provided for three distinct health care coverages, individual, family and retiree. Additionally, so as to specifically distinguish between current employees and retirees, the agreement contained a specific definition of "employee". Here, by contrast, current employees and qualified retirees are treated the same.
Therefore, without the need to resort to extrinsic evidence, it seems sufficiently clear that, under the provisions of the collective bargaining agreement, plaintiff was authorized to change his coverage from "individual" to "family" to include his new wife. Because this court finds that the provisions of the collective bargaining agreement provide for this, that renders academic the plaintiff's argument that there is a violation of the Moratorium (L. 2006, ch. 27).
By denying plaintiff's timely request to change his health insurance coverage, defendants have breached the collective bargaining agreement. Plaintiff is entitled to injunctive relief directing defendants to honor his request, nunc pro tunc. Plaintiff has not alleged what sum, if any, he was required to expend to obtain other health insurance coverage for his wife, so no relief is granted to him in that respect. Plaintiff is entitled to costs and disbursements herein.
Accordingly, plaintiff's cross-motion for summary judgment is granted to the extent herein stated and defendants' motion for summary judgment is denied.
This Decision shall constitute the Order of the Court.
Plaintiff is directed to submit judgment on notice to defendants within sixty (60) days. See, 22 NYCRR § 202.48.