Opinion ID: 3066141
Heading Depth: 2
Heading Rank: 2

Heading: reaoc’s claim to an implied contract right

Text: TO THE POOLED PREMIUM Viewing the evidence in the light most favorable to REAOC as the nonmoving party, we review de novo whether any genuine issue of material fact exists and whether the district court correctly applied the relevant substantive law. See Fed. R. Civ. P. 56(c); Balint v. Carson City, Nev., 180 F.3d 1047, 1050 (9th Cir. 1999) (en banc). In summary, REAOC’s evidentiary support for the implied contract term rests on the following: (i) that its implied pooled premium was closely connected to the express contract provisions providing health plan benefits to retirees for life; (ii) that the pooled rate was “central to the bargained-for exchange between the parties,” RUI One Corp. v. City of Berkeley, 371 F.3d 1137, 1148 (9th Cir. 2004); and (iii) that statements REAOC V. COUNTY OF ORANGE 11 made by County officials demonstrated that the implied right existed. REAOC alleges that its implied contract right stems from the MOUs adopted annually by Board resolution. These resolutions followed the same pattern year by year: the Board approved, and thereby contractually committed to, the employee and retiree health plan rate for that particular year. Yet these MOUs and resolutions only support enrollment in County health plans at a specific rate for a given year, not a right to a lifetime pooled premium. For example, REAOC posits that the Board intended Resolution 84-1460, which created the pooled premium, to not only correct the administrative error that created the budget shortfall, but also to confer a lifetime benefit to retirees. To be sure, the Boardadopted MOU included the pooled premium, but REAOC concedes that the County did not expressly commit to its continuance. More precisely, that resolution authorized “the adoption of 1985 health rates,” and says nothing about future premiums. Beyond the initial pooling resolution, REAOC points to later MOUs adopted by the Board and official statements by the County that purportedly contemplated lifetime retiree health care benefits. For instance, as evidentiary support for its implied contract right claim, REAOC highlights an MOU stating that retirees may change their health care plans at their retirement date, a declaration from a County employee benefits director explaining that retirees are eligible for general health plans as a “lifetime benefit,” and a 2007 Citizens’ Report from the County’s Auditor-Controller characterizing the pooled rate structure as part of the County’s overall compensation package. Yet REAOC provides no evidence that credibly, let alone unmistakably, 12 REAOC V. COUNTY OF ORANGE supports its claim. To the contrary, resolutions such as Resolution 84-1460 refer only to a one-year contractual obligation. Similarly, a Board presentation to the unions stating that rate pooling will continue at that time does not demonstrate that the rate is anything more than a policy decision for that specific period. A practice or policy extended over a period of time does not translate into an implied contract right without clear legislative intent to create that right—an intent that REAOC has not demonstrated here. REAOC III, 266 P.3d 289, 296. The express terms of the MOUs and resolutions that REAOC highlights fail to raise a genuine issue of material fact because they do not show any link to REAOC’s claim of an implied right to an ongoing pooled premium. REAOC’s assertions that its involvement in negotiations with the County reveal an implied contract right to the pooled premium also lack evidentiary support. REAOC states that when the Board passed the pooling resolution, the “Board and the Unions were in the midst of a years-long heated battle regarding the Unions’ demand for greater retiree medical benefits.” We acknowledge that these battles occurred, but no specific language or documentation from these negotiations suggests that REAOC entered into the claimed “bargained-for” agreement with the County. The nature of REAOC’s evidence underscores the absence of any definitive intent or commitment on the part of the County to provide for the pooled premium: a slide presented by the County’s chief negotiator that merely includes the value of the pooled premium; a negotiation document prepared by the Board that expressly uses the “assumption” that the pooled premium would continue for the purposes of making retiree benefit projections; and another REAOC V. COUNTY OF ORANGE 13 presentation slide providing that “retiree rates will continue to be pooled for rate setting purposes” for that year. REAOC also cites to the declaration of a human resources assistant director who stated that the Board was unable to remove the benefit during collective bargaining because the MOU included the “Retiree Medical Program,” a program encompassing the pooled premium. However, a supplemental statement clarified that the MOU did not contain the pooled rate structure. These limited fragments of evidence from County documents do not raise a genuine issue of material fact regarding any “bargained-for” exchange for the pooled premium. At best, this evidence simply corroborates that the unions and County continued to discuss the pooled premium; it does not raise a genuine issue of material fact regarding an implied term. The other County statements raised by REAOC refer primarily to impressions of Board policies, not official County statements or documents. For instance, a County official’s statement that the County categorized the pooled premium as an “Other Post Employment Benefit” does not mean that this accounting classification carried any contractual significance beyond the basic definition of that category being an exchange of salaries and benefits for employee services rendered. Finally, REAOC’s argument about the general nature of retirement benefits as lifetime benefits is unavailing, because entitlement to those benefits does not reveal any agreement about REAOC’s alleged implied contract right to the pooled premium. REAOC faults the district court for its narrow treatment of extrinsic evidence. Although it did not have the benefit of Sonoma Retired Employees at the time of its decision, the district court nonetheless considered some of REAOC’s 14 REAOC V. COUNTY OF ORANGE extrinsic evidence accompanying the passage of relevant resolutions and MOUs. For example, it briefly examined the circumstances surrounding the passage of Resolution 84-1460, when the pooled premium first began, stating in one line that the pooled premium “did not arise out of a bargained-for exchange with employees.” The district court then cited to later legislation that it determined did not include language suggesting an ongoing County obligation to provide the pooled premium. In a separate section on “extrinsic evidence,” the district court stated that the “extrinsic course-of-conduct evidence that [REAOC] ask[ed] this Court to consider is necessarily irrelevant,” because the resolutions were not ambiguous. Reasoning that its examination of extrinsic evidence would shift the burden of proof onto the County, the district court stated that it would not “cobble together evidence to manufacture a promise that the Board never made.” We do not cabin the role of extrinsic evidence as narrowly as the district court did. Indeed, the California Supreme Court recognized the role of “convincing extrinsic evidence,” REAOC III, 266 P.3d at 299, and in Sonoma Retired Employees, we noted that implied terms may include “testimony regarding the County’s intent,” 708 F.3d at 1116 n.4. Nonetheless, we do not need to address the precise contours for admitting and evaluating extrinsic evidence with respect to implied terms of a contract. Our review of the record reveals that REAOC’s claim to an implied contractual right to the pooled premium falls short even if we consider its extrinsic evidence. Missing here is “statutory language or circumstances accompanying its passage clearly . . . REAOC V. COUNTY OF ORANGE 15 evinc[ing] a legislative intent to create [implied] private rights of a contractual nature enforceable against [the County]” regarding the pooled health insurance premium.4 REAOC III, 266 P.3d at 296 (omission in original) (internal quotation marks omitted). We affirm the district court’s order granting the County’s motion for summary judgment. AFFIRMED. 4 REAOC also argues that its implied contractual right to the pooled premium had “vested.” Because there is no implied term with respect to the pooled premium, we need not address the vesting claim. We also need not reach REAOC’s request for reassignment to a different judge in the event of remand.