Title: Budge v. Town of Millinocket

State: maine

Issuer: Maine Supreme Court

Document:

MAINE SUPREME JUDICIAL COURT 
 
 
 
     
    Reporter of Decisions 
Decision: 
2012 ME 122 
Docket: 
Pen-11-419 
Argued: 
April 12, 2012 
Decided: 
October 25, 2012 
 
Panel: 
SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, GORMAN, and JABAR, JJ. 
Majority: 
SAUFLEY, C.J., and ALEXANDER, LEVY, SILVER, and GORMAN, JJ. 
Dissent: 
JABAR, J. 
 
 
NORMAN E. BUDGE et al. 
 
v. 
 
TOWN OF MILLINOCKET 
 
 
GORMAN, J. 
 
[¶1]  Norman E. Budge and twenty-eight additional parties1 (collectively, 
employees) appeal from a summary judgment of the Superior Court (Penobscot 
County, Marden, J.) in favor of the Town of Millinocket.  This appeal concerns 
three issues: (1) whether a 1991 personnel policy adopted as a town ordinance 
created an enforceable contract between the Town and its employees; (2) whether 
the Town is bound to pay the employees’ retirement group hospitalization and life 
insurance premiums by virtue of promissory estoppel; and (3) whether the Town’s 
reduction in benefits resulted in a taking without just compensation in violation of 
                                         
1  The additional appellants are Ronald G. York, William Levesque, Richard L. Leavitt, Charles J. 
James, John Picard Sr., Milan Thornton, Reid Campbell, John M. MacPherson, Donald Bolduc, Bruce 
Leavitt, Joseph A. Beaulieu, Thomas Monteith, Jasper Haynes, Stephen Campbell, Ethel McVey, Warren 
Nelson, Frank C. Friel, Donald Benson, Nadine Boddy, Wayne Campbell, Louise Morey, Sarah 
Boutaugh, Jon Crawford, Jon Glidden, Basil Campbell, Robert Lander, Doris Lowell, and James Farley. 
 
2 
the Maine and United States Constitutions, U.S. Const. amends. V, XIV, § 1; 
Me. Const. art. I, § 21.  We affirm the judgment. 
I.  BACKGROUND 
 
[¶2]  On July 14, 2009,2 the employees filed a complaint for review of 
government action pursuant to M.R. Civ. P. 80B.  This complaint included four 
counts: (1) review of government action pursuant to Rule 80B, (2) breach of 
contract, (3) unconstitutional taking, and (4) promissory estoppel.  On December 8, 
2009, the Superior Court granted the Town’s motion to dismiss count one, but 
denied the Town’s motion with respect to the remaining three counts.  On April 15, 
2011, the Town filed a motion for summary judgment, a statement of material 
facts, and an affidavit of the Millinocket town manager.  The employees opposed 
the motion and, after a hearing, the court granted a summary judgment to the Town 
on all three remaining counts. 
[¶3]  The undisputed material facts establish that the Town has included a 
personnel policy in its Municipal Code since 1978.  As of 1987, the first sections 
of the personnel policy stated: 
1. 
PURPOSE 
It is the purpose of these rules and regulations to provide a 
uniform and standard system of personnel administration and to 
                                         
2  Although the employees filed their initial complaint on June 10, 2009, they amended it twice and 
filed their final complaint on July 14, 2009. 
 
3 
inform fully the non-union employees of the Town of Millinocket the 
conditions of work. 
2. 
ADMINISTRATION 
These rules shall be administered by the Town Manager.  He 
may, through the department heads and foremen, specify procedure 
for the administration of this policy to insure a minimum of disruption 
of Town operations.  However, in no way are the administrative 
procedures to alter or dilute the meaning or intent of this policy in the 
application of said procedures. 
3. 
AMENDMENTS 
Amendments to these rules shall be by order of the Town 
Council.  The Personnel Policy shall be reviewed ANNUALLY by the 
Manager and a delegate of the non-union employees.  Revisions shall 
be submitted to the Town Council for consideration. 
Millinocket, Me., Personnel Policy § 1 (Jan. 1, 1987).  This introduction states that 
the purpose of the policy is to inform employees of the Town’s uniform system for 
conditions of work.  It also announces the method by which the policy would be 
reviewed for possible revision on an annual basis. 
[¶4]  Before 1991, section 17 of the policy addressed the Town’s retirement 
plan by stating that the Town was a participating member of the Maine State 
Retirement System.3  Millinocket, Me., Personnel Policy § 17 (Jan. 1, 1987).  It 
also stated that the Town had life insurance and group hospitalization plans that 
were “funded 100 % by the Municipality for employees, spouse and children.”  
                                         
3  The Maine State Retirement System has since been renamed the Maine Public Employees 
Retirement System.  P.L. 2007, ch. 58, § 1 (codified at 5 M.R.S. § 17101(2) (2011)). 
 
4 
Millinocket, Me., Personnel Policy § 17(2) (Jan. 1, 1987).  It made no mention of 
whether or how the life or group hospitalization plans would apply to retirees. 
[¶5]  On August 8, 1991, the Town amended its personnel policy to address 
for the first time group hospitalization insurance benefits for its retirees.  The three 
paragraphs quoted above still comprised the introduction to the personnel policy in 
the Municipal Code, and the policy continued to state that the Town’s life 
insurance and group hospitalization plans were funded 100% by the Town for its 
employees, their spouses, and their children.  Millinocket, Me., Personnel Policy 
§ A128-17(B) (Oct. 25, 1991).  In the amendment made that year, the Town added 
the following language: 
Employees, other than School Department employees, who retire from 
town service and qualify for retirement or disability benefits under the 
Maine State Retirement System shall continue as members of the 
town’s group hospitalization plan, at the town’s expense, to the same 
extent as current employees.  The town shall also pay for coverage for 
the former employee’s spouse.  This benefit shall apply to former 
union employees of the town, as well as nonunion employees.  The 
town reserves the right to change this benefit in the future as 
circumstances require.  Any such changes shall apply only to 
employees hired after August 8, 1991. 
Millinocket, Me., Personnel Policy § A128-17(D) (Oct. 25, 1991) (emphasis 
added).  The emphasized language is the basis for the employees’ breach of 
contract claim in this case.  The trial court determined, however, that their 
 
5 
contract-based claim was undermined by the changes the Town Council made to 
the policy in the following years. 
[¶6]  In 1999, the three paragraphs quoted above still comprised the 
introduction to the personnel policy, but the Town amended the policy in three 
ways that affect this case.  First, it altered section A128-17(B) to reduce the portion 
of the premium the Town was obliged to pay for employee and dependent 
coverage from 100% to 90%.  Millinocket, Me., Personnel Policy § A128-17(B) 
(July 10, 1999).  Second, also in section A128-17(B), the Town included the 
following language for the first time: “The town reserves the right to discontinue 
this benefit or to change coverage and providers from time to time as well as the 
portion of the premiums paid by the town and its employees with or without prior 
notice.”  Millinocket, Me., Personnel Policy § A128-17(B) (July 10, 1999).  Third, 
the Town amended section A128-17(D), replacing the emphasized language 
quoted above from the 1991 policy with the following language: 
Employees hired prior to August 8, 1991, other than School 
Department employees, who retire from town service and qualify for 
retirement or disability benefits under the Maine State Retirement 
System shall continue as members of the town’s group hospitalization 
plan to the same extent as current employees.  The town shall also 
provide coverage for the former employee’s spouse if the employee so 
elects.  This benefit shall apply to former union employees of the 
town as well as non union employees. . . .  The town reserves the right 
to discontinue this benefit or to change providers and coverage from 
time to time as well as the portion of premiums paid by the town and 
former employee with or without prior notice. 
 
6 
Millinocket, Me., Personnel Policy § A128-17(D) (July 10, 1999) (emphasis 
added). 
[¶7]  Although pursuant to the 1999 policy, the Town reduced its payment of 
employee premiums from 100% to 90%, the Town continued making payments of 
100% for its retirees after this amendment.  See Millinocket, Me., Personnel Policy 
§ A128-17(B) (July 10, 1999).  The record does not explain why no change was 
made vis-à-vis the premiums for retirees at that time. 
[¶8]  Three years later, the Town amended its policy by including language 
that was even more explicit in explaining that no promises were being made nor 
contracts created: 
Statement of Intent.  This policy is intended as informational guidance 
only and the Town reserves the right to interpret, delete, or amend the 
provisions contained herein with reasonable notice to employees.  
This policy and its contents should not be interpreted as promises of 
specific treatment or as contractual rights for any employee. 
Millinocket, Me., Personnel Policy § A128-1(A) (Jan. 1, 2002).  The Town also 
completely revamped the retirement and group hospitalization plan provisions 
contained in section A128-17.  With reference to retirees, it stated: 
The town reserves the right to change providers and coverage from 
time to time as well as the portion of premiums paid by the town and 
former employee with or without prior notice.  This benefit will apply 
in the following manner: 
 
7 
1. 
For employees who have retired prior to January 1, 2002, 
this benefit will be provided by the Town at 100% of its 
cost. 
2. 
For employees who were employed full time by the 
Town on or before June 10, 1999 and who become 
eligible for retirement after January 1, 2002, those 
employees will make a contribution to their health 
insurance benefit (co-payment) at the same rate as that 
for current employees. 
3. 
Unionized employees hired prior to August 8, 1991 and 
not retired prior to January 1, 2002 shall be eligible for 
this benefit as described in paragraph D-2 above. 
4. 
For employees hired into full time positions on or after 
June 10, 1999, this retirement benefit shall not be 
available. 
Millinocket, Me., Personnel Policy § A128-17(D) (Jan. 1, 2002). 
[¶9]  The Town amended its personnel policy again in 2006 and 2009.  The 
Town amended section A128-17(B) of the policy to reduce the Town’s obligation 
for paying for the health insurance plan for its employees, and amended section 
A128-17(D) to establish a new policy for the health insurance offered to retirees.  
Millinocket, Me., Personnel Policy § A128-17(B), (D) (May 14, 2009).  As of 
2009, the retirees’ benefits no longer operate in tandem with current employees’ 
benefits.  After the 2009 amendment, the Town reduced its payment of the retirees’ 
premiums, which gave rise to this suit. 
 
8 
[¶10]  The employees allege that, regardless of the policy language, this 
reduction was inconsistent with promises made to them either when they were 
hired or during their tenure with the Town.4  The employees allege that it was 
common knowledge among Town employees that the Town paid 100% of group 
hospitalization insurance premiums for life.  Many of the employees allege that the 
town manager promised them this benefit when they were hired.  At least one 
employee alleges that members of the Town Council acknowledged this benefit as 
well.  They also allege that it was common knowledge that the Town paid lower 
wages than the local mill, but compensated for the wage difference by offering a 
better benefits package, which included group hospitalization insurance for life.  
Many of the union employees, especially those who served as shop steward, allege 
that, during contract negotiations, they would accept lower pay raises in exchange 
for better benefits, including group hospitalization insurance for life.  The union 
contracts, however, did not include this benefit.  The employees have not produced 
any evidence that the alleged promises were made by official action of the Town 
Council, as opposed to statements of Council members or the town manager. 
[¶11]  The Town Charter outlines the powers and duties of the town 
manager and Town Council.  Pursuant to the Town Charter, the town manager’s 
                                         
4  Although the Town contends that neither the town manager nor members of the Town Council 
promised to pay 100% of retirees’ group hospitalization insurance premiums indefinitely, we accept the 
employees’ properly supported factual assertions for purposes of their opposition to the Town’s motion 
for summary judgment.  See Inkel v. Livingston, 2005 ME 42, ¶ 4, 869 A.2d 745. 
 
9 
duties and powers include appointing officers and employees of the Town, 
preparing the Town budget, executing the laws and ordinances of the Town, 
preparing the administrative code, and performing such duties that are required by 
the Town Charter or the Town Council.  Millinocket, Me., Town Charter § C302 
(Dec. 25, 1993).  Likewise, the Town Charter gives the Town Council the power to 
appoint certain officers, and to make, alter, and repeal ordinances, but these powers 
are limited to a quorum of the council members.  Millinocket, Me., Town Charter 
§§ C203, C210 (Dec. 25, 1993). 
II.  DISCUSSION 
[¶12]  “We review the grant of a motion for summary judgment de novo,” 
and consider both the evidence and any reasonable inferences that the evidence 
produces “in the light most favorable to the party against whom the summary 
judgment has been granted in order to determine” if there is a genuine issue of 
material fact.  Inkel v. Livingston, 2005 ME 42, ¶ 4, 869 A.2d 745 (quotation marks 
omitted).  “When the moving party is the defendant, the burden rests on that party 
to show that the evidence fails to establish a prima facie case for each element of 
the cause of action.”  Wentworth v. Sebra, 2003 ME 97, ¶ 9, 829 A.2d 520. 
[¶13]  This case brings us to the heart of a long-running controversy over the 
extent to which government employers may alter the terms of future benefits for 
present employees and retirees.  The employees here have asserted, alternatively, 
 
10 
that the Town is precluded from making such alterations because language in the 
1991 employee personnel policy created a contract that the Town may not breach, 
that the Town should be estopped from altering their benefits because of the 
statements made by various members of the Town’s administration and by the 
Town’s actions in continuing to pay benefits at a level higher than that required by 
the Town’s personnel policy, or that the Town’s attempt to alter their benefits 
amounts to an unconstitutional taking of their property.  We address each 
contention below. 
A. 
Breach of Contract 
[¶14]  The first question we must answer is whether the language of the 
Town’s 1991 personnel policy contains a clear indication that the Town intended 
to bind itself contractually to continue delivering certain benefits to the employees 
in perpetuity.  This question requires us to explore the history of this type of claim 
in our state. 
[¶15]  Nearly twenty years ago, we aligned our jurisprudence with that of 
courts reluctant to conclude that a legislative enactment creates a contractual 
obligation without “language expressing an intent to create such rights.”5  See 
                                         
5  The issue of whether a legislative enactment creates a contractual obligation is central to our 
three-part analysis of claims predicated on the Contract Clause in the constitutions of Maine and the 
United States.  See Kittery Retail Ventures, LLC v. Town of Kittery, 2004 ME 65, ¶ 38, 856 A.2d 1183.  
Our decision in Spiller v. State, along with other precedent cited here, adjudicates the existence of a 
contract in that context.  627 A.2d 513, 515 (Me. 1993).  In this case, the employees did not seek relief 
 
11 
Spiller v. State, 627 A.2d 513, 516-17 (Me. 1993).  In doing so, we rejected a more 
liberal approach known as the California Rule.6  See id. at 516 (citing Betts v. Bd. 
of Admin. of the Pub. Emps.’ Ret. Sys., 582 P.2d 614 (Cal. 1978)). 
[¶16]  Pursuant to California’s approach, “a statute can create a contract in 
accordance with its express terms, by implication of its express terms, or where the 
statute essentially constitutes an offer that is accepted by performance.”  Amy B. 
Monahan, Statutes as Contracts? The “California Rule” and its Impact on Public 
Pension Reform, 97 Iowa L. Rev. 1029, 1049 (2012).  Further, once a contract is 
found, the state may make only “reasonable modifications” to it and must offset 
detrimental changes with comparative new advantages.  Id. at 1060 (quotation 
marks omitted) (citing Allen v. City of Long Beach, 287 P.2d 765 (Cal. 1955)).  
The dissenting justices in Spiller urged us to adopt the California Rule, but the 
majority nevertheless rejected that methodology.  See Spiller, 627 A.2d at 520 
(Wathen, C.J., dissenting) (citing Betts, 582 P.2d at 617; Kern v. City of Long 
Beach, 179 P.2d 799, 803 (Cal. 1947)). 
[¶17]  Nothing has changed since our rejection of the California Rule in 
Spiller to justify an endorsement of that approach in this case.  At present, only 
                                                                                                                                   
pursuant to the Contract Clauses, but our analysis is incomplete without acknowledging the influence of 
this area of constitutional law on our precedent. 
6  The United States Court of Appeals for the First Circuit also understood our decision in Spiller as a 
rejection of the alternative approach.  See Parker v. Wakelin, 123 F.3d 1, 8 (1st Cir. 1997). 
 
12 
twelve other states follow the California Rule in some form.  Monahan at 1071.  
Moreover, the same policy flaws in California’s jurisprudence continue to militate 
against adopting that rule as the law of Maine. 
[¶18]  Our principal policy concern in Spiller was that an alternative holding 
would “unduly restrict the power of the legislature.”  See 627 A.2d at 517.  We 
concluded our decision by stating: “Although one may conclude that it was 
unnecessary or even unwise for the legislature to have [made the statutory change 
at issue], it is not for this court to substitute its opinion on the merits or desirability 
of the legislation for that of the legislature.”  Id. (quotation marks omitted).   
[¶19]  Following this precedent, we must consider the 1991 language upon 
which the employees rely in light of the multiple amendments the Town made to 
its policy over the last twenty-one years in determining whether the Town ever 
clearly expressed an intent to create binding contractual rights.  See id. at 516-17. 
[¶20]  In 1991, the Town’s policy stated that retirees “shall continue as 
members of the town’s group hospitalization plan, at the town’s expense, to the 
same extent as current employees. . . .  The town reserves the right to change this 
benefit in the future as circumstances require.  Any such changes shall apply only 
to employees hired after August 8, 1991.”  Millinocket, Me., Personnel Policy 
§ A128-17(D) (Oct. 25, 1991).  That language, even when viewed alone, does not 
constitute “language expressing an intent to create [contractual] rights.”  Spiller, 
 
13 
627 A.2d at 517.  In addition, the 1991 policy cannot be viewed in a vacuum.  
Every few years after it chose the particular turns of phrase on which the 
employees rely, the Town’s legislative body amended its personnel policy and 
chose other language.  This regularly occurring activity undermines the employees’ 
position, and supports the Superior Court’s determination that the 1991 language 
was nothing more or less than a declaration of a policy to be followed until the 
Town deemed that it could no longer be pursued.  Similarly, the 2009 decrease in 
payments was the result of the Town’s determination that, despite its previously 
expressed wish to protect its retirees from increasing costs of health care, it could 
no longer do so. 
[¶21]  In Spiller we noted what we referred to as one of the “time honored 
rules of construction,” that is, that “a statute will not be presumed to create 
contractual rights, binding future legislatures, unless the intent to do so is clearly 
stated.”  627 A.2d at 515.  Given our precedent, there is a strong presumption 
against interpreting legislative acts to create contractual rights.  The Superior Court 
properly found that the employees have failed to overcome that presumption.  
Because no legislative enactment by the Town used express language to create 
contractual rights, the employees cannot prevail on their claim for breach of 
contract.  We affirm the judgment of the Superior Court on that basis. 
 
14 
B. 
Promissory Estoppel 
[¶22]  The employees argue that the trial court erred in granting a summary 
judgment to the Town on their alternative claim for relief based on promissory 
estoppel.  We previously adopted the promissory estoppel doctrine, as later set 
forth in the Restatement (Second) of Contracts § 90(1) (1981), in our decision in 
Chapman v. Bomann: 
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 enforcement of the promise.  The remedy 
granted for breach may be limited as justice requires. 
 
381 A.2d 1123, 1127 (Me. 1978).  Despite the availability of estoppel as a remedy, 
“when a party seeks to estop the government we have viewed the claim with 
caution.”  Mrs. T. v. Comm’r of the Dep’t of Health & Human Servs., 2012 ME 13, 
¶ 10, 36 A.3d 888; see also Trull Nursing Home, Inc. v. State Dep’t of Human 
Servs., 461 A.2d 490, 499 n.16 (Me. 1983) (“Estoppel against the government 
should be carefully and sparingly applied, especially where application would have 
an adverse impact on the public fisc.” (citation omitted) (quotation marks 
omitted)). 
[¶23]  The employees argue that some combination of oral statements by 
Town officials and the Town’s continued payment of 100% of premiums until 
2009 created a promise that the Town should be estopped from denying.  The 
 
15 
alleged promise is that the Town would continue making 100% payments in 
perpetuity.  On the facts of this case, however, the statements and continued 
payments are insufficient, as a matter of law, to constitute a promise by the Town.  
Here, it is critical that we focus on whether there is evidence that either (1) the 
Town itself promised the claimed benefit, or (2) the Town somehow ratified the 
unauthorized promises made by one of the Town’s agents or employees.  See 
Sirois v. Town of Frenchville, 441 A.2d 291, 294 (Me. 1982).  Absent our careful 
scrutiny of this threshold inquiry, claims of promissory estoppel in this area could 
devolve into “a case-by-case analysis for virtually every individual claiming 
reliance.”  See Andrew C. Mackenzie, Case Note, Spiller v. State: Determining the 
Nature of Public Employees’ Rights To Their Pensions, 46 Me. L. Rev. 355, 372 
(1994). 
 
[¶24]  We consider first whether the Town itself made a promise through the 
actions or statements of the town manager or members of the Town Council.  In 
Sirois, we noted that a single member of a board of selectmen “cannot bind a town 
to a contract unless his authority to act alone is proved or his actions subsequently 
ratified.”  441 A.2d at 294.  As here, the plaintiff in Sirois was opposing a motion 
for summary judgment.  See id.  We concluded that, unless the plaintiff raises a 
genuine issue of material fact as it relates to the authority of the town official or the 
ratification of a promise, summary judgment is appropriate.  Id. 
 
16 
 
[¶25]  Pursuant to the Town Charter, the town manager’s duties and powers 
do not include approving or offering retirement group hospitalization insurance 
benefits, or any kind of employee benefit.  Millinocket, Me., Town Charter § C302 
(Dec. 25, 1993).  Furthermore, with respect to any employees basing their 
promissory estoppel argument on statements made by a Town Council member, an 
individual Town Council member does not have the authority to unilaterally bind 
the Town Council as to matters of retirement benefits.  Millinocket, Me., Town 
Charter §§ C203, C210 (Dec. 25, 1993).  Therefore, the employees did not provide 
evidence that raises a genuine issue of material fact about the town manager’s or 
the Town Council’s authority to make such promises. 
[¶26]  Next, we consider whether there is evidence in the record supporting a 
determination that the Town could be “bound” to a promise made by one of its 
agents because the Town later ratified that promise.  Sirois, 441 A.2d at 294.  The 
Restatement (Third) of Agency discusses the law of ratification by governments.  
Section 4.01 states that ratification does not occur unless “the person ratifying has 
capacity as stated in § 4.04.”  Restatement (Third) of Agency § 4.01(3)(b) (2006).  
Section 4.04(1)(b) requires that, in order to have capacity to ratify, a person must 
have capacity to act as a principal, as defined in section 3.04.  Section 3.04(2) 
states that “[t]he law applicable to a person that is not an individual governs 
whether the person has capacity to be a principal.”  Comment d to section 3.04 
 
17 
explains that “[t]he legal capacity of a person that is not an individual is governed 
by the legal regime by virtue of which such person exists and functions.”  Thus, 
“the legally operative actions that may be taken by governments and subdivisions 
of governments are often specified by statute, constitution, or charter,” and this 
“limits a governmental principal’s capacity to authorize agents.”  Id.  In summary, 
only a principal can ratify, and when a principal is a government, the government 
can only ratify through a legally operative action.  
 
[¶27]  The Town is a government entity that can act only in a manner 
consistent with its authorizing document, the Town Charter.  There is no evidence 
that the authorization for the payments upon which the employees rely as part of 
their estoppel claim was given by the only body with the authority to do so, that is, 
the Town Council.  See Richmond v. Johnson, 53 Me. 437, 438 (1866) (requiring 
ratification “by the board of selectmen or the town” before recognizing a contract 
signed by one of the selectmen).  Payments of premiums made by Town officials, 
when the Town had not promised to make such payments, cannot create a promise 
or effect estoppel because the officials are not authorized to make such a promise 
on behalf of the Town. 
[¶28]  The employees failed to produce sufficient evidence to establish a 
prima facie case either that (1) the Town itself promised the claimed benefit, or (2) 
the Town somehow ratified the unauthorized promises made by one of the Town’s 
 
18 
agents or officials.  As a result, the employees’ promissory estoppel claim must fail 
as a matter of law. 
C. 
Unconstitutional Taking 
[¶29]  The Takings Clause of the Maine Constitution provides, much like its 
federal counterpart: “Private property shall not be taken for public uses without 
just compensation; nor unless the public exigencies require it.”  Art. I, § 21; see 
also U.S. Const. amends V, XIV, § 1.  In order to fit within the confines of this 
protection, however, the employees would have to establish that they had a 
contractual right to the benefits they claim.  See Parella v. Ret. Bd. of the R.I. 
Emps.’ Ret. Sys., 173 F.3d 46, 58-59 (1st Cir. 1999).  Because we have determined 
that no such contractual right exists, the Town is entitled to summary judgment on 
this count of employees’ complaint and we affirm. 
 
The entry is: 
Judgment affirmed. 
 
 
 
 
 
 
 
 
 
JABAR, J., dissenting. 
 
[¶30]  I respectfully dissent. 
 
[¶31]  Although I agree with the Court’s conclusion that the language in this 
case does not rise to the level of an express contract as mandated in Spiller v. State, 
 
19 
627 A.2d 513, 515-17 (Me. 1993), I do not agree that the employees failed to 
create a genuine issue of material fact regarding promissory estoppel.  In Spiller, 
the leading case involving legislation concerning retirement benefits for public 
employees, the Court left open the possibility that public employees could prove 
their claim to promised benefits through the concept of promissory estoppel.  Id. at 
517 n.12.  The Spiller Court indicated that retirement benefits are more than 
gratuities and in a footnote stated: “We have said that state employees have 
legitimate retirement expectations. . . . [and] the State may be estopped from 
changing certain benefit provisions in the retirement statutes.”  Id.  The Court went 
further in the footnote to intimate, without expressly deciding, that changes to the 
retirement statute could implicate the doctrine of promissory estoppel.  Id.  In 
support of the promissory estoppel theory, the Court cited a Minnesota case: 
Christensen 
v. 
Minneapolis 
Municipal 
Employees 
Retirement 
Board, 
331 N.W.2d 740 (Minn. 1983).  Spiller, 627 A.2d at 517 n.12. 
 
[¶32]  I believe that we should follow the approach taken by the Minnesota 
Supreme Court in Christensen.  As that court stated, it is “realistic, fair[,] and 
practical . . . to judge the state’s promise by the doctrine of promissory estoppel.”  
Christensen, 331 N.W.2d at 748.  The Minnesota court went on to state:  
In the realities of the modern employment marketplace, the state 
reasonably expects its promise of a retirement program to induce 
persons to accept and remain in public employment, and persons are 
 
20 
so induced, and injustice can be avoided only by enforcement of that 
promise.  Promissory estoppel, like equitable estoppel, may be applied 
against the state to the extent that justice requires. 
 
Id. at 749. 
 
[¶33]  In Christensen, the plaintiff was a participant in the Minnesota 
Municipal Employees Retirement Fund, under the age of sixty, and receiving 
pension benefits.  Id. at 742-43.  At the time the plaintiff retired, the pension plan 
did not include a minimum age requirement for elected officials.  Id. at 743-744.  
In 1980, Minnesota enacted a new requirement that imposed a minimum age for 
entitlement to benefits.  Id. at 744.  In April 1980, the plaintiff’s monthly pension 
benefits were suspended until he reached the age of sixty because the new law 
imposed a minimum age requirement as a prerequisite to receiving pension 
benefits.  Id. at 742-43.  The Minnesota court held that Christensen had a 
protectable pension entitlement and the promise of a pension to be paid when he 
retired was binding on the State.  Id. at 749. 
 
[¶34]  The Christensen court said that in applying the doctrine of promissory 
estoppel, “two factors must be kept in mind: (1) What has been promised by the 
state? and (2) to what degree and to what aspects of the promise has there been 
reasonable reliance on the part of the employee?”  Id.  Applying the rationale and 
principles set out in Christensen, the facts present in this case create genuine issues 
 
21 
of material fact regarding the Town’s promise and the employees’ reliance on that 
promise. 
A. 
Promise 
 
[¶35]  The alleged promise at issue here is the Town’s enactment of the 1991 
personnel policy stating that retired town employees would receive the same health 
insurance benefits as current town employees, which at that time was 100% of 
current employees’ health insurance costs.  The 1991 policy also stated that this 
healthcare benefit was subject to change, except for employees hired before 
August 8, 1991.  The employees argue that this provision singled out a specific 
class of employees and highlighted the Town’s intention to “grandfather” these 
employees from any future changes in the policy.  The evidence submitted by the 
employees supports this argument regarding the Town’s intent. 
 
[¶36]  The employees submitted depositions of previous Town officials in 
support of their reading of the 1991 policy.  The Town Manager at the time of the 
1991 enactment, William Ayoob, stated that his understanding of the language in 
the 1991 personnel policy was that “[w]hatever the benefits were at the time, [the 
employees hired prior to August 8, 1991,] would be grandfathered, . . . the way I 
understood it.”  Ayoob also stated that grandfathering those employees meant that 
changes to the policy would affect only employees hired on or after 
August 8, 1991.  Similarly, a Town Council member at that time, Rodney Daigle, 
 
22 
stated that “the people that were already working for [the Town], you know, prior 
to ’91, we didn’t want to involve them because we wanted to . . . grandfather them 
. . . we thought they shouldn’t be subject to . . . changes.”  Daigle clarified that he 
meant that employees hired before that 1991 date would not be governed by 
subsequent changes made to the 1991 policy. 
[¶37]  Finally, the Town’s attorney at that time, Dean Beaupain, stated that 
the provision providing that future changes would not affect employees hired prior 
to August 8, 1991, 
was put in to serve two purposes, number one, to try and keep the 
faith with people who were currently working for the Town and had 
previously retired from the Town.  This was a benefit the Town had 
offered over the years.  We wanted to maintain that, but much more 
importantly it was to send a notice to future people hired by the Town 
. . . that they should not expect a retiree benefit for health insurance 
when they retired. 
 
 
[¶38]  We have stated that the promise of a town official “cannot bind a 
town to a contract unless his authority to act alone is proved or his actions 
subsequently ratified.”  Sirois v. Town of Frenchville, 441 A.2d 291, 294 
(Me. 1982).  In Sirois, a town selectman made a promise that he did not have 
authority to make and that was not ratified by the town.  Id. at 293-94.  Here, 
however, unlike in Sirois, we have more than just the statements and promises of 
town officials.  The enactment by the Town Council of the 1991 personnel policy 
 
23 
as well as the continued payment of the benefits enumerated in that policy by the 
Town for eighteen years constitutes official action taken by the Town. 
[¶39]  In Otis v. Stockton, this Court determined that a party seeking to bind 
a town to an alleged promise made in the absence of express authority on behalf of 
town officials “must . . . affirmatively prove[] that the town [itself] has 
subsequently approved and ratified [the acts of the town officials].”  76 Me. 506, 
507-08 (1884).  The Court posited that whether a town ratified a promise is largely 
fact dependent and is to be decided on a case-by-case basis.  Id. at 508-09.  The 
Court stated:  
There must be something more than mere silence upon the part of the town 
to create an estoppel.  Of course, that fact in connection with other facts may 
become material.  There may be occasions when a town should act or speak, 
or when it does speak by the force of circumstances. . . . It would be difficult 
to formulate any general rule or definition of corporate ratification.  It must 
largely depend upon the facts peculiar to the individual case. 
 
Id. (emphasis added); see also Mason v. City of Augusta, 2007 ME 101, ¶ 30, 
927 A.2d 1146 (noting that city council ratified an agreement by authorizing 
amendments to the agreement); Sch. Admin. Dist. No. 3 v. Me. Sch. Dist. Comm’n, 
158 Me. 420, 425-28, 185 A.2d 744 (1962) (discussing ratification by 
municipalities); Lincoln v. Stockton, 75 Me. 141, 146 (1883) (“[Municipal] 
ratification may result from failure to disavow the unauthorized act of an agent.”).  
In this case, the Town Council took official action in enacting the 1991 personnel 
 
24 
policy and in approving budgets that included these benefits.  These official actions 
of the Town Council satisfy the requirement that any promises made by the Town 
must be subsequently ratified. 
 
[¶40]  The evidence submitted by the employees creates a genuine issue of 
material fact surrounding the Town’s promise to those employees hired before 
August 8, 1991. 
B. 
Reasonable Reliance 
 
[¶41]  The second factor to consider in applying the doctrine of promissory 
estoppel is whether there was reasonable reliance on the part of the employees, if 
in fact the Town made them a promise.  The employees submitted evidence 
indicating that they relied upon this alleged promise in making their decisions to 
work for the Town. 
 
[¶42]  In their answers to interrogatories and testimony during deposition, 
some of the employees stated that they relied on the promise of health insurance 
for life in making the decision to stay with the Town instead of going to work at 
the local mill, where wages were higher.  Many of the employees also stated that 
they knowingly took lower pay increases in exchange for these health insurance 
benefits.  For summary judgment purposes, these statements create a genuine issue 
of material fact as it relates to the employees’ reliance on the Town’s alleged 
 
25 
promise and whether this reliance was reasonable should be decided by a 
fact-finder, not by this Court as a matter of law. 
 
[¶43]  There is also evidence that the Town paid 100% of the retired 
employees’ health insurance costs from 1991 through 2009, a period of eighteen 
years, including the years following changes in the policy made by the Town in 
1999, 2002, and 2006.  The Court references these changes in the policy and 
asserts that this is evidence that the health insurance benefits for retirees 
established in the 1991 personnel policy were subject to change.  However, if in 
fact the Town intended to grandfather those employees hired before 
August 8, 1991, these changes were not applicable to them.  The Town’s continued 
payment of 100% of retirees’ health insurance premiums for eighteen years in spite 
of the multiple changes to the policy supports the employees’ argument that the 
Town intended to grandfather employees hired before 1991 and that the changes in 
the policy in 1999, 2002, and 2006 did not apply to them.  This evidence 
establishes the reasonableness of the employees’ reliance. 
 
[¶44]  Whether the employees actually acted in reliance on the Town’s 
promise as they assert and whether that reliance was reasonable are factual issues 
to be determined by the fact-finder.  As was said in Christensen, “[n]ot every 
promise in all its implications is necessarily enforceable under promissory 
estoppel.”  331 N.W.2d at 749.  However, at the summary judgment stage we 
 
26 
should not rule as a matter of law that the employees have not proved promissory 
estoppel. 
 
[¶45]  The trial court’s granting of summary judgment on the issue of 
promissory estoppel should be vacated.  The employees have raised genuine issues 
of material fact as to the doctrine of promissory estoppel. 
 
 
 
 
 
 
 
On the briefs: 
 
Paul W. Chaiken, Esq., and John K. Hamer, Esq., Rudman Winchell, LLC, 
Bangor, for appellants Norman E. Budge et al. 
 
Melissa A. Hewey, Esq., and Jeffrey T. Piampiano, Esq., Drummond 
Woodsum, Portland, for appellee Town of Millinocket  
 
 
At oral argument: 
 
John K. Hamer, Esq., for appellants Norman E. Budge et al. 
 
Jeffrey T. Piampiano, Esq., for appellee Town of Millinocket 
 
 
 
Penobscot County Superior Court docket number AP-2009-12 
FOR CLERK REFERENCE ONLY