Opinion ID: 175175
Heading Depth: 2
Heading Rank: 2

Heading: The district court must determine whether Bemis breached its agreement.

Text: Bemis also argues that even if the parties intended to create a lifetime retiree employee medical benefit, Bemis is not in breach of its agreement to provide this benefit. Bemis argues it had reserved the right to modify or terminate benefits at any time as § 9.01 and § 9.02 state that the benefits are subject to the terms and conditions of an insurance contract. Bemis claims that the master insurance contract to which the CBA refers has an explicit reservation of rights stating that the employer can modify the conditions of the plan as long as it gives written notification to the other party, and that it gave the required notice here. See, e.g., Bland, 401 F.3d at 786; Vallone v. CNA Fin. Corp., 375 F.3d 623, 633 (7th Cir.2004). In Vallone, we observed that a reservation-of-rights clause could mean that even an unambiguous term such as lifetime could mean good for life unless revoked or modified. Vallone, 375 F.3d at 633. If the master insurance contract contained an express reservation of rights, it is possible that Hayssen could have drastically modified the level of benefits provided to its employees while the CBA controlled the terms of the relationship between Hayssen and its employees. But, the fact that a final closing agreement incorporated or relied on language in a previous collective bargaining agreement does not mean it adopted, unmodified, any language in any underlying insurance contract. Cf. Diehl, 102 F.3d at 306-07 ([T]he Shutdown Agreement itself was an independent contract, supported by separate consideration and capable of modifying or supplanting prior contractual arrangements.). If the parties intended lifetime medical benefits for retirees, then that promise could have abrogated any right Bemis may have had to terminate coverage under its master insurance contract. Moreover, as proof that this reservation of rights clause existed, Bemis points to a 1990 insurance contract and deduces that the relevant 1984 master contract included the same reservation of rights. Haberman Aff. ¶¶ 4-6. The 1984 contract itself however, is not the record. Temme disputes the existence of any such clause in the relevant contract. Pl.'s Br. in Resp. to Def.'s Motion for Summ. J. at 12-13. Whether the 1984 master insurance contract included a reservation-of-rights clause and whether the parties intended the clauseif any existsto be abrogated or modified by the vested nature of the medical benefits are issues to be decided by a factfinder. These factual disputes do not help us answer the question of what benefits the retirees are entitled to, and whether Bemis breached that agreement through its actions in 2005 and 2007. This is a question best resolved by a factfinder in the first instance. See Zielinski, 463 F.3d at 621; Diehl, 102 F.3d at 309. The plaintiffs argue that although they understand that some benefits might have to be modified, the specific benefits laid out in the CBA must remain exactly the same. This would mean, by today's standards, an extremely generous 100% prescription drug coverage and $50 per year deductibles, as well as a perhaps low maximum Major Medical payout amount of $500,000. More likely, the parties intended that Bemis would continually provide medical coverage to retirees at a level substantially commensurate with the benefits provided under the CBA, but with some freedom to impose cost-saving measures that did not substantially reduce benefits. See Diehl, 102 F.3d at 310 ([W]e see nothing to indicate that the Shutdown Agreement established a right to a particular insurance carrier, or even to a particular plan. . . . We therefore would read the Shutdown Agreement as requiring [defendant] to expend reasonable efforts to secure coverage at a level substantially commensurate with the benefits provided under the 1983 Insurance Agreement.). The language in the CBA and Closing Agreement also reflect this likely intentthe CBA discusses newly added benefits effective in 1982 and states that retiree benefits are subject to a Medicare Carve-out program; and the Closing Agreement discusses the yearly re-evaluation of premium prices by the medical plan. Because Temme insists on the coverage provided for in the CBA, and Bemis insists that no coverage is required, neither party has explained the impact of the exact changes in the plan or their significance upon the retirees' vested rights to insurance coverage. As we did in Diehl and Zielinski, we remand the case to the district court for further proceedings. Our discussion in those cases should offer significant guidance for the district court as it moves forward in determining the precise nature of the modifications that were implemented in 2005 and 2007, and whether the plaintiffs can meet the burden of demonstrating that the changes brought their benefits below a level reasonably commensurate with the coverage they had enjoyed for the period of time between 1985 and 2005. Zielinski, 463 F.3d at 619-21; Diehl, 102 F.3d at 310-11.