SUPREME COURT OF THE STATE OF NEW YORK

Appellate Division, Fourth Judicial Department

1250 

CA 12-00171 

PRESENT: SCUDDER, P.J., SMITH, CENTRA, LINDLEY, AND WHALEN, JJ.

 

 

HERBERT KOLBE, LYNNE NICHOLAS, JOANN SEEFELDT 

AND PHYLLIS HARRIS, PLAINTIFFS-RESPONDENTS,

V MEMORANDUM AND ORDER

 

CHRISTINE J. TIBBETTS, AS SUPERINTENDENT OF 

SCHOOLS OF NEWFANE CENTRAL SCHOOL DISTRICT, 

JAMES REINEKE, AS PRESIDENT OF NEWFANE BOARD 

OF EDUCATION, NEWFANE BOARD OF EDUCATION AND 

NEWFANE CENTRAL SCHOOL DISTRICT, 

DEFENDANTS-APPELLANTS. 

 

HODGSON RUSS LLP, BUFFALO (JEFFREY T. FIUT OF COUNSEL), FOR

DEFENDANTS-APPELLANTS. 

REDEN & O’DONNELL, LLP, BUFFALO (TERRY M. SUGRUE OF COUNSEL), FOR

PLAINTIFFS-RESPONDENTS. 

 

Appeal from a judgment (denominated judgment and order) of the

Supreme Court, Niagara County (Catherine R. Nugent Panepinto, J.),

entered October 18, 2011. The judgment, inter alia, granted the

motion of plaintiffs for summary judgment and denied the cross motion

of defendants for summary judgment. 

It is hereby ORDERED that the judgment so appealed from is

reversed on the law without costs, the motion is denied, the cross

motion is granted, the third through sixth decretal paragraphs are

vacated, and judgment is granted in favor of defendants as follows: 

It is ADJUDGED AND DECLARED that defendants are not

obligated to maintain health insurance coverage equivalent

to that in effect at the time each plaintiff retired. 

Memorandum: Plaintiffs, retirees of defendant Newfane Central

School District (District), commenced this breach of

contract/declaratory judgment action seeking, inter alia, a

declaration that their rights with respect to health insurance

benefits are governed by each collective bargaining agreement (CBA)

that was in effect at the time each plaintiff retired. Supreme Court

granted plaintiffs’ motion seeking summary judgment and denied

defendants’ cross motion for summary judgment. 

Each CBA in effect at the time of plaintiffs’ respective

retirements set forth a nominal copay for prescriptions in accordance
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with the health care plan that was in effect at that time. In

December 2009, each plaintiff was notified that, pursuant to the CBA

effective January 1, 2010, the copay for prescriptions would be

significantly increased. Plaintiffs alleged in their complaint that

they are not obligated to pay the higher rate but, rather, are

obligated to pay only the rate that was in effect at the time of their

respective retirements.

The language at issue is contained in section 6.5. of each CBA,

and that section is entitled “Retirement Benefits.” In each CBA,

section 6.5.3 provides in relevant part that full-time employees who

retire from the District under the New York State Employees’

Retirement System may receive credit for group health insurance

premiums based on accumulated sick leave. In the CBAs in effect from

1990 through 1994 and 1994 through 1996, the language at issue states

that “[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.” In the

subsequent CBAs, the language at issue states that “[t]he coverage

provided shall be the coverage which is in effect for the unit at such

time as the employee retires.” Section 6.4 in each of the CBAs

provides that retired employees shall be eligible to “continue group

health insurance” upon the payment of a monthly premium to the

District. Section 6.4 also sets forth the health plans available to

the employees covered by the respective CBAs. 

We agree with defendants that the court erred in determining that

the unequivocal language of the respective CBAs required that the

prescription copay amount set forth in section 6.4 could not be

altered based upon the language in section 6.5.3, providing that

unused sick leave could be used to pay for health care coverage. The

unambiguous language in section 6.5.3 provides that, at the time of

his or her retirement, the retiree is entitled to the same coverage

that is provided to the bargaining unit. The language does not

specify that an equivalent level of coverage will continue during

retirement (cf. Williams v Village of Endicott, 91 AD3d 1160, 1161;

Della Rocco v City of Schenectady, 252 AD2d 82, 84, lv dismissed 93

NY2d 1000; see generally Hudock v Village of Endicott, 28 AD3d 923,

923). In Williams (91 AD3d at 1161), the CBA provided that the

defendant “ ‘shall keep in full force and effect medical coverage and

hospital coverage for each member of the bargaining unit, with

benefits to be of a value at least equivalent to those presently in

force’ ” (emphasis added). In Della Rocco (252 AD2d at 84), the CBA

provided that the defendant “would provide insurance coverage

‘equivalent to the plan presently in effect for each member of the

Department and his [or her] family, and for retired members and their

families’ ” (emphasis added). In Hudock (28 AD3d at 923), the CBA

provided that the annual cost toward the premium would remain the

same. Here, the respective CBAs do not provide that the level of

health coverage will not be reduced or that the annual cost will not

increase. 

Inasmuch as the benefits for represented employees were likewise

reduced, defendants have complied with the statutory requirement that
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CA 12-00171 

they not reduce plaintiffs’ coverage below the level of coverage

provided to active employees (see L 1994, ch 729, as extended by L

2009, ch 30). In light of our determination, we need not address

defendants’ remaining contentions. 

All concur except LINDLEY and WHALEN, JJ., who dissent and vote to

modify in accordance with the following Memorandum: We respectfully

dissent. We disagree with the majority’s determination that the

language in section 6.5.3 of each collective bargaining agreement

(CBA) is unambiguous. The relevant language of that section provides

that full-time employees who retire from defendant Newfane Central

School District (District) under the New York State Employees’

Retirement System plan shall be entitled to credit toward group health

insurance premiums for accumulated sick leave. That section further

provides that, in the event of the retiree’s death, the benefit shall

transfer to the surviving spouse. As noted by the majority, one

version of the CBA states that “[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,” while the other version states that “[t]he

coverage provided shall be the coverage which is in effect for the

unit at such time as the employee retires.” The language in section

6.5.3 regarding the level of coverage for retirees conflicts with

language found in section 6.4 of the CBA. Section 6.4 provides that

retired employees shall be eligible to “continue group health

insurance” upon payment of a monthly premium to the District. In

section 6.5.3, the word “benefit” is used to describe the sick-leave

accrual and the word “coverage” is used to describe the particular

plan, or health insurance. The words “benefit” and “coverage” may

have been included in the same paragraph in order to distinguish

between the two words and to establish different rights for retirees. 

Section 6.5.3 may have given retirees additional rights to health

insurance coverage in addition to those provided in section 6.4. “ ‘A

contract is ambiguous if the language used lacks a definite and

precise meaning, and there is a reasonable basis for a difference of

opinion’ ” (Williams v Village of Endicott, 91 AD3d 1160, 1162). 

Given the conflict between section 6.5.3 and section 6.4, we believe

that an ambiguity exists. We have held that, “[i]n the event that a

contract is ambiguous, its interpretation is still a matter for the

court unless ‘determination of the intent of the parties depends on

the credibility of extrinsic evidence or on a choice among reasonable

inferences to be drawn from extrinsic evidence’ ” (Destiny USA

Holdings, LLC v Citigroup Global Mkts. Realty Corp., 69 AD3d 212, 218,

quoting Hartford Acc. & Indem. Co. v Wesolowski, 33 NY2d 169, 172). 

The parties submitted conflicting evidence regarding the intended

meaning of the provisions at issue here, and a determination as to

such intended meaning cannot be made absent additional extrinsic

evidence. We therefore conclude that the matter should be remitted to

Supreme Court for a hearing at which parol evidence may be presented

to establish the parties’ intent. 

Entered: December 21, 2012 Frances E. Cafarell

Clerk of the Court