Court Opinion

ID: 9348145
Source: CourtListenerOpinion
Date Created: 2022-12-19 22:10:37.870197+00
Date Added: 2024-06-11T16:41:25.628626
License: Public Domain

IN THE SUPREME COURT OF NORTH CAROLINA

                                  2022-NCSC-22

                                  No. 436PA13-4

                               Filed 11 March 2022

I. BEVERLY LAKE, JOHN B. LEWIS, JR., EVERETTE M. LATTA, PORTER L.
MCATEER, ELIZABETH S. MCATEER, ROBERT C. HANES, BLAIR J.
CARPENTER, MARILYN L. FUTRELLE, FRANKLIN E. DAVIS, ESTATE OF
JAMES D. WILSON, ESTATE OF BENJAMIN E. FOUNTAIN, JR., FAYE IRIS
Y. FISHER, STEVE FRED BLANTON, HERBERT W. COOPER, ROBERT C.
HAYES, JR., STEPHEN B. JONES, MARCELLUS BUCHANAN, DAVID B.
BARNES, BARBARA J. CURRIE, CONNIE SAVELL, ROBERT B. KAISER,
JOAN ATWELL, ALICE P. NOBLES, BRUCE B. JARVIS, ROXANNA J. EVANS,
JEAN C. NARRON, and all others similarly situated

             v.
STATE HEALTH PLAN FOR TEACHERS AND STATE EMPLOYEES, a
corporation, formerly known as the North Carolina Teachers and State
Employees’ Comprehensive Major Medical Plan, TEACHERS’ AND STATE
EMPLOYEES’ RETIREMENT SYSTEM OF NORTH CAROLINA, a corporation,
BOARD OF TRUSTEES of the TEACHERS’ AND STATE EMPLOYEES’
RETIREMENT SYSTEM OF NORTH CAROLINA, a body politic and corporate,
DALE R. FOLWELL, in his official capacity as Treasurer of the State of North
Carolina, and the STATE OF NORTH CAROLINA

      On discretionary review pursuant to N.C.G.S. § 7A-31 of a unanimous decision

of the Court of Appeals, 264 N.C. App. 174 (2019), reversing and remanding an order

of summary judgment entered on 19 May 2017 by Judge Edwin G. Wilson, Jr. in

Superior Court, Gaston County. Heard in the Supreme Court on 4 October 2021.

      Gray, Layton, Kersh, Solomon, Furr & Smith, P.A. by Michael L. Carpenter,
      Christopher M. Whelchel, Marcus R. Carpenter, and Marshall P. Walker; Tin,
      Fulton, Walker & Owen, PLLC, by Sam McGee; and The Law Office of James
      Scott Farrin, by Gary W. Jackson and J. Bryan Boyd, for plaintiff-appellants.
                                  LAKE V. STATE HEALTH PLAN

                                          2022-NCSC-22

                                        Opinion of the Court

           Joshua H. Stein, Attorney General, by Ryan Y. Park, Solicitor General, and
           Marc Bernstein, Special Deputy Attorney General, for defendant-appellees.

           The McGuinness Law Firm, by J. Michael McGuinness; and North Carolina
           Association of Educators, by Verlyn Chesson Porte, for amicus curiae North
           Carolina Association of Educators.

           The Sumwalt Group, by Vernon Sumwalt; and AARP Foundation, by Ali
           Naini, for amicus curiae AARP and AARP Foundation.

           EARLS, Justice.

¶1         In this case, a class of more than 220,000 former State employees (the Retirees)

     sued the State of North Carolina and various officials and agencies (the State) after

     the General Assembly enacted a statute that eliminated their option to remain

     enrolled in a premium-free preferred provider organization health insurance plan

     which allocated eighty percent of the costs of health care services to the insurer and

     twenty percent to the insured (the 80/20 PPO Plan). According to the Retirees, the

     State had undertaken a contractual—and thus constitutional—obligation to provide

     them with the option to remain enrolled in the 80/20 PPO Plan or one of equivalent

     value, on a noncontributory basis, for life. In response, the State argues that it never

     promised the Retirees the benefit of lifetime enrollment in any particular premium-

     free health insurance plan and that, even if it had done so, the noncontributory plan

     the State continues to offer provides the Retirees with a benefit of the same or greater

     value than the one available to them prior to 2011, when the statute eliminating the

     noncontributory 80/20 PPO Plan option was enacted (the 2011 Act).
                                 LAKE V. STATE HEALTH PLAN

                                         2022-NCSC-22

                                       Opinion of the Court

¶2         The trial court agreed with the Retirees and entered partial summary

     judgement in their favor. A unanimous panel of the Court of Appeals reversed and

     remanded for entry of summary judgment in favor of the State. See Lake v. State

     Health Plan for Tchrs. & State Emps., 264 N.C. App. 174, 189 (2019). On

     discretionary review before this Court, we must answer a threshold question that

     divided the lower tribunals and which the parties vigorously contest: Did the State

     assume a contractual obligation to provide the Retirees the benefit of lifetime

     enrollment in the premium-free 80/20 PPO Plan or its substantive equivalent, such

     that the Retirees possessed a constitutionally protected vested right?

¶3         This Court has stated and reaffirmed that “[a] public employee has a right to

     expect that the retirement rights bargained for in exchange for his loyalty and

     continued services, and continually promised him over many years, will not be

     removed or diminished.” Bailey v. State, 348 N.C. 130, 141 (1998) (quoting Simpson

     v. N.C. Local Gov’t Emps.’ Ret. Sys., 88 N.C. App. 218, 224 (1987), aff’d per curiam,

     323 N.C. 362 (1988)). We have recognized that this right protects state employees’

     pensions and also encompasses other forms of benefits. See, e.g., N.C. Ass’n of

     Educators v. State, 368 N.C. 777 (2016) (NCAE) (holding that teachers possessed a

     protected right in their status as “career teachers”). It is understandable that the

     Retirees—who, before 2011, were eligible to remain enrolled in the 80/20 PPO Plan

     without paying a premium—would perceive being required to pay a premium to
                                  LAKE V. STATE HEALTH PLAN

                                           2022-NCSC-22

                                         Opinion of the Court

     remain enrolled in the 80/20 PPO Plan as diminishing their bargained-for rights. For

     the reasons explained below, we agree with the trial court that the Retirees enjoyed

     a constitutionally protected vested right in remaining enrolled in the 80/20 PPO Plan

     or its substantive equivalent on a noncontributory basis.

¶4         Nonetheless, the Retirees are entitled to receive only the benefit of the bargain

     they struck with the State and nothing more. To prevail on their claims arising under

     Article I, Section 10 of the United States Constitution (the Contracts Clause), the

     Retirees must also demonstrate that the General Assembly “substantially impaired”

     their contractual rights when it eliminated the option of enrolling in the premium-

     free 80/20 PPO Plan. Bailey, 348 N.C. at 151. And even if the Retirees meet this

     burden, the State must be afforded the opportunity to show that the impairment was

     “reasonable and necessary to serve an important public purpose” and was thus not in

     violation of the Contracts Clause. Id. at 141 (citing U.S. Tr. Co. of N.Y. v. New Jersey

     (U.S. Trust), 431 U.S. 1 (1977)).

¶5         These latter two questions—whether a contract has been “substantially

     impaired” and whether any such impairment is “reasonable and necessary”—are

     particularly fact-intensive. Answering them requires a careful examination of the

     plans made available to the Retirees when their respective rights to health insurance

     coverage vested and a comparison of those plans to the ones the State currently offers.

     Although the 2011 Act plainly requires the Retirees to pay a premium to remain
                                  LAKE V. STATE HEALTH PLAN

                                           2022-NCSC-22

                                         Opinion of the Court

     enrolled in a plan previously offered on a noncontributory basis, many variables

     besides a premium—such as the size of a plan member’s deductibles and co-pays, and

     the scope of coverage the plan affords—affect the value of a health insurance plan.

     Furthermore, in a rapidly changing world of dramatic medical advances and

     evolutions in how health care is financed, including changes to the State’s overall

     health insurance offerings that provide new options for retired state employees, it

     would be unreasonable to expect that the State would maintain the precise terms of

     the plans it offered in an entirely different era.

¶6         Accordingly, we hold that the trial court correctly determined there were no

     genuine issues of material fact relating to whether the Retirees possessed a vested

     right protected under the Contracts Clause. The trial court correctly concluded that

     the Retirees had obtained such a right. Therefore, the Court of Appeals erred in

     concluding that the Retirees possessed no vested rights within the meaning of the

     Contracts Clause. But numerous genuine issues of material fact needed to be resolved

     in order to answer the latter two questions—whether the 2011 Act worked a

     substantial impairment of the Retirees’ vested rights and whether any such

     impairment was reasonable and necessary. Thus, the trial court erred in summarily

     concluding as a matter of law on the record before it that the General Assembly

     violated the Retirees’ state or federal constitutional rights. Accordingly, we affirm the

     Court of Appeals’ decision to reverse the trial court’s grant of partial summary
                                  LAKE V. STATE HEALTH PLAN

                                             2022-NCSC-22

                                           Opinion of the Court

     judgment in favor of the Retirees, reverse the Court of Appeals’ decision to remand

     this case for entry of summary judgment in favor of the State, and remand this matter

     to the trial court for further proceedings not inconsistent with this opinion, including

     our holding that the Retirees possess a vested right.

                                      I.      Background

     A. Health insurance benefits for retired state employees.

¶7         In 1972, the State of North Carolina began offering all state employees and

     retirees the opportunity to enroll in a health insurance plan. Act of July 20, 1971, ch.

     1009, 1971 N.C. Sess. Laws 1588. Initially, the State provided coverage via group

     insurance contracts it purchased on its employees’ behalf. Id. § 1 at 1588. In 1982 the

     General Assembly altered this approach when it established a “Comprehensive Major

     Medical Plan” offered directly by the State. Act of June 23, 1982, ch. 1398, § 6, 1981

     N.C. Sess. Laws (Reg. Sess. 1982) 288, 289-311 (Establishing Act). The Establishing

     Act codified the Major Medical Plan’s terms of coverage and provided that members

     would be “eligible for coverage under the Plan[ ] on a noncontributory basis.” Id. at

     295. The plan was to be overseen by a Board of Trustees housed within the Office of

     State Budget and Management, id. at 298 (enacting N.C.G.S. § 135-39 (1982)), who

     were directed to contract with and supervise an outside entity selected by the State

     Budget Officer to serve as the Plan Administrator, id. at 290-91 (enacting N.C.G.S.

     §§ 135-39.4 to -39.5A (1982)). A few years later, the General Assembly enacted
                                    LAKE V. STATE HEALTH PLAN

                                             2022-NCSC-22

                                          Opinion of the Court

     another statute providing that, going forward, retired employees would need to have

     been employed by the State for at least five years before becoming eligible to receive

     benefits under the Major Medical Plan. Act of Aug. 14, 1987, ch. 857, § 9, 1987 N.C.

     Sess. Laws 2098, 2101.

¶8          In 2005 the General Assembly enacted a law providing state employees and

     retirees with the option of enrolling in various PPO plans, while continuing to offer

     the option of enrolling in the Major Medical Plan. Act of Aug. 13, 2005, ch. 276

     § 29.33(a), 2005 N.C. Sess. Laws 1003. The General Assembly also increased the

     eligibility requirements for new hires to participate in noncontributory retirement

     health insurance plans from five years of service to twenty years, although the change

     was only made applicable prospectively. S.L. 2006-174, § 1, 2005 N.C. Sess. Laws

     (Reg. Sess. 2006) 630, 630. Effective in 2008, the State discontinued the Major

     Medical Plan it had offered since 1982 and replaced it with a State Health Plan for

     Teachers and State Employees. Current Operations and Capital Improvements

     Appropriations Act of 2007, S.L. 2007-323, § 28.22A(a)-(b), 2007 N.C. Sess. Laws 616,

     892. By this time, the State was also offering two premium-free PPO plans—the 80/20

     PPO Plan1 and a 70/30 PPO Plan.

            1The Retirees refer to the Major Medical Plan as the “Regular State Health Plan” and
     contend that the premium-free 80/20 PPO Plan was its “continuation.” Put another way, they
     argue that the State satisfied its obligation to offer a premium-free health insurance plan of
     equivalent value to the initial Major Medical Plan (or Regular State Health Plan) until the
     General Assembly eliminated the option of enrolling in the premium-free 80/20 PPO Plan.
                                    LAKE V. STATE HEALTH PLAN

                                            2022-NCSC-22

                                          Opinion of the Court

¶9           In 2011, the General Assembly authorized the State Health Plan2 to charge

       employees and retirees a monthly premium to enroll in the 80/20 PPO Plan. S.L.

       2011-85, § 1.2(a), 2011 N.C. Sess. Laws 119, 120 (the 2011 Act). The General

       Assembly did not eliminate the option for retirees to enroll in a noncontributory

       health insurance plan—the State continued to offer retirees the option of

       participating in the premium-free 70/30 PPO Plan. However, retirees who had

       previously been enrolled in the premium-free 80/20 PPO Plan were required to either

       pay a premium to remain in their same plan or choose a different premium-free plan

       containing different terms and, the Retirees assert, offering a less valuable benefit.

       See id.

       B. Trial court proceedings.

¶ 10         In response to the 2011 Act, the Retirees filed suit on behalf of themselves and

       all other similarly situated former state employees against the State Health Plan for

       Teachers and State Employees, the Teachers’ and State Employees’ Retirement

       System and its trustees, the State Treasurer, and the State of North Carolina. They

       alleged claims for breach of contract, unconstitutional impairment of contracts in

       violation of the Contracts Clause, and unconstitutional violation of their rights to due

       process and equal protection under article I, section 19 of the North Carolina

             2  The phrase “the State Health Plan” refers both to the package of health benefits
       offered to State employees and retirees and to the agency that manages those benefits.
       See N.C.G.S. § 135-48.1(14) (2021).
                                   LAKE V. STATE HEALTH PLAN

                                           2022-NCSC-22

                                         Opinion of the Court

       Constitution (the Law of the Land Clause). They sought (1) a writ of mandamus

       requiring the State to “reinstate and continue” the premium-free 80/20 PPO Plan for

       all class members, or a preliminary and permanent injunction requiring the same;

       (2) declaratory relief; and (3) the creation of a trust or common fund for the payment

       of damages. The State initially moved to dismiss the complaint on the basis of

       sovereign immunity. After the trial court denied that motion, the State appealed. The

       Court of Appeals affirmed, holding that the Retirees “sufficiently alleged a valid

       contract between them and the State in their complaint to waive the defense of

       sovereign immunity.” Lake v. State Health Plan for Tchrs. & State Emps., 234 N.C.

       App. 368, 375 (2014).

¶ 11         On remand, the trial court certified a class composed of:

                    (1) All members (or their Estates or personal
                    representatives if they have deceased since July 1, 2009) of
                    the N.C. Teachers’ and State Employees’ Retirement
                    System (“TSERS”) who retired before January 1, 1988; (2)
                    TSERS members (or their Estates or personal
                    representatives if they have deceased since July 1, 2009)
                    who retired on or after January 1, 1988, were hired before
                    October 1, 2006 and have 5 or more years of contributory
                    service with the State and (3) surviving spouses (or their
                    Estates or personal representatives if they have deceased
                    since July 1, 2009) of (i) deceased retired employees,
                    provided the death of the former plan member occurred
                    prior to October 1, 1986; and (ii) deceased teachers, State
                    employees, and members of the General Assembly who are
                    receiving a survivor’s alternate benefit under any of the
                    State-supported retirement programs, provided the death
                    of the former plan member occurred prior to October 1,
                    1986
                                       LAKE V. STATE HEALTH PLAN

                                                2022-NCSC-22

                                             Opinion of the Court

       All class members were either former employees who had become eligible to enroll in

       a premium-free State health insurance plan upon retirement because they satisfied

       the eligibility requirements in existence when they were hired or those deceased

       employees’ beneficiaries.3 The parties proceeded to discovery.

¶ 12          On 14 September 2016, the Retirees filed a motion for partial summary

       judgment. They alleged that “[t]he [State’s] own documents and testimony prove that

       they offered the Retiree Health Benefit as a lifetime contractual benefit ‘earned’

       through a defined period of employment service.” In support of their motion, the

       Retirees relied on depositions of class members as well as former State benefits

       counselors, the Executive Director and Deputy Director for the State Health Plan,

       the Director of the Fiscal Research Division of the North Carolina General Assembly

       and its pension analyst, the Deputy Director of Operations for the State Retirement

       System, actuaries for the State Health Plan, a representative of the health insurance

       plan administrator (Blue Cross Blue Shield of North Carolina), and the then-serving

       elected North Carolina State Treasurer. They also relied on statements in legislation

       governing the State Health Plan, press releases pertaining to the State Health Plan,

              3 Notably, the class only includes retirees who would have satisfied the eligibility
       requirements for enrolling in the premium-free Major Medical Plan or subsequent 80/20 PPO
       Plan prior to the 2011 Act taking effect. This case only addresses changes applied
       retroactively to the health insurance options available to retirees already eligible to enroll in
       the plan the 2011 Act eliminated. The Retirees do not challenge the State’s authority to
       change its employment benefit offerings prospectively.
                                    LAKE V. STATE HEALTH PLAN

                                            2022-NCSC-22

                                          Opinion of the Court

       training manuals used by customer service personnel to advise State employees and

       retirees, benefits handbooks provided to State employees and retirees, and

       presentations regarding the State Health Plan’s fiscal outlook.

¶ 13         The undisputed evidence elicited from these sources and presented in support

       of the Retirees’ summary judgment motion included descriptions of retirement health

       insurance coverage as a part of their “total package of compensation”; explanations

       that employees would become eligible for “noncontributory (no cost to you)” health

       insurance coverage upon retirement and “for life” after working for the State for at

       least five years; statements that employees would be eligible for retiree health

       coverage “for life” when they “vested”; descriptions of the State’s “liability” arising

       from its ongoing “obligation” to continue paying the premiums for retirees who had

       “already earned” the right to enroll in the State Health Plan on a noncontributory

       basis; and class members’ own statements that they relied on the promise of lifetime

       enrollment in a premium-free health insurance plan when deciding to accept or

       continue in employment with the State.

¶ 14         In response, the State filed its own motion for summary judgment as to liability

       in which it argued that the evidence presented by the Retirees demonstrated that

       “[t]he State never undertook, nor was any state agency authorized, to offer Plaintiffs

       any such contracts. . . . that would lock-in any terms of the [State Health] Plan for

       fifty-plus years into the future.” The State further contended that even if the Retirees
                                    LAKE V. STATE HEALTH PLAN

                                             2022-NCSC-22

                                          Opinion of the Court

       had established the existence of some contractual right to remain enrolled in a health

       insurance plan of a particular value, the Retirees’ assertion that the premium-free

       70/30 PPO Plan was substantially less valuable than the premium-free 80/20 PPO

       Plan “fail[ed] to address the terms of a complete and enforceable contract for

       healthcare benefits,” given that “[c]oinsurance is one of many healthcare terms and

       it accounts for only a fraction of healthcare costs.”

¶ 15         On 19 May 2017, the trial court entered an Order Granting Plaintiffs’ Motion

       for Partial Summary Judgment and Denying Defendants’ Motion for Summary

       Judgment as to Liability. The trial court found as a factual matter that the State had

       promised its employees the benefit of enrolling in a plan at least as valuable as the

       premium-free 80/20 PPO Plan as part of their overall compensation package, that

       these employees relied on this promise, and that the promised benefit formed “a part

       of the contract between Class Members and the Defendants.” Accordingly, the trial

       court determined that the Retirees’ employment contracts with the State gave rise to

       “an entitlement to a non-contributory (premium-free) health plan equivalent to the

       80/20 regular state health plan that had long been offered and provided to Class

       Members.” The trial court further concluded that the 2011 Act eliminating the

       premium-free 80/20 PPO Plan “substantially impaired the[se] contracts” because the

       only noncontributory option thereafter available to the Retirees was the 70/30 PPO

       Plan. Finally, the court concluded that the State’s action “was neither reasonable nor
                                    LAKE V. STATE HEALTH PLAN

                                            2022-NCSC-22

                                          Opinion of the Court

       necessary to serve an important public purpose.” As a result, the trial court concluded

       that the 2011 Act violated both the federal Contracts Clause and the state Law of the

       Land Clause. The State again appealed.

       C. The Court of Appeals’ decision.

¶ 16         On appeal, the Court of Appeals unanimously reversed and remanded for the

       entry of summary judgment in favor of the State. Lake v. State Health Plan for Tchrs.

       & State Emps., 264 N.C. App. 174 (2019).

¶ 17         The Court of Appeals began with the Retirees’ claim that the 2011 Act violated

       the Contracts Clause, which provides in relevant part that “[n]o State shall . . . pass

       any . . . Law impairing the Obligation of Contracts.” U.S. Const. art. I, § 10. According

       to the Court of Appeals, Contracts Clause claims are governed by a three-part test

       articulated by the United States Supreme Court in United States Trust Co. of New

       York v. New Jersey (U.S. Trust), 431 U.S. 1 (1977), and subsequently adopted by this

       Court. Under the U.S. Trust test, a court must “ascertain: (1) whether a contractual

       obligation is present, (2) whether the state's actions impaired that contract, and

       (3) whether the impairment was reasonable and necessary to serve an important

       public purpose.” Lake, 264 N.C. App. at 179–80 (quoting Bailey, 348 N.C. at 141). The

       Court of Appeals concluded that the Retirees’ claims failed the first prong of the U.S.

       Trust test: they could not demonstrate that the State had undertaken a “specific

       contractual financial obligation” to continue providing the 80/20 PPO Plan on a
                                    LAKE V. STATE HEALTH PLAN

                                              2022-NCSC-22

                                            Opinion of the Court

       noncontributory basis. Id. at 189.

¶ 18         To determine if any contractual right existed, the Court of Appeals compared

       the Retirees’ asserted right to health insurance coverage with the pension benefits

       this Court held protected by the Contracts Clause in Bailey. According to the Court

       of Appeals, pension benefits were granted the status of a constitutionally protected

       “vested contractual right because they were a form of ‘deferred compensation.’ ” Id.

       at 181 (quoting Bailey, 348 N.C. at 141). By contrast, the “benefit” of being eligible to

       enroll in a particular health insurance plan was categorically different. Whereas

       pension benefits are funded through “mandatory” deductions “from the employee’s

       paycheck” and are “calculated based upon the employee’s salary and length of

       service,” state employees “are not required to” contribute anything to become eligible

       to enroll in a premium-free health insurance plan. Id. at 182. Additionally, “the level

       of retirement health care benefits is not dependent upon an employee’s position,

       retirement plan, salary, or length of service. All eligible participants, active and

       retired, have equal access to the same choices in health care plans.” Id. Thus, health

       insurance benefits and pension benefits are “[n]ot [a]nalogous.” Id. at 181.

¶ 19         The Court of Appeals next examined the statutes governing the State Health

       Plan to determine if the General Assembly had evinced an express intent to

       undertake a contractual obligation. The Court of Appeals noted that “[t]he statutes

       governing the State Health Plan do not refer to a ‘contract’ between the employees
                                    LAKE V. STATE HEALTH PLAN

                                            2022-NCSC-22

                                          Opinion of the Court

       and the State,” even though “[t]he term ‘contract’ is used in the statute to describe

       the relationship between the State Health Plan and its service providers.” Id. at 185.

       Moreover, the Court of Appeals found it salient that the General Assembly had, on

       numerous occasions, exercised its statutorily reserved right to “alter” the State

       Health Plan by changing its terms, which the court concluded “support[s] a holding

       that the establishment and maintenance of the North Carolina State Health Plan is

       a legislative policy, which is ‘expressly and, inherently subject to revision and repeal’

       by the General Assembly.” Id. at 187 (quoting Nat’l R.R. Passenger Corp. v. Atchison,

       Topeka & Santa Fe Ry. Co., 470 U.S. 451, 466 (1985)). The Court of Appeals concluded

       that the Retirees had failed to overcome the “presumption” against construing

       statutes “to create contractual rights in the absence of an expression of unequivocal

       intent.” Id. at 180–81.

¶ 20         The Court of Appeals also rejected the Retirees’ effort to prove the State’s

       intent to contract by looking to statements in “pamphlets, distributed by the State to

       its employees to explain the retirement benefits.” Id. at 185. The Court of Appeals

       stated that this kind of extrinsic evidence was relevant only in cases involving

       “mandatory and contributory retirement benefits.” Id. It reasoned that the General

       Assembly’s “use of contractual language in the statute in reference to service

       providers indicates the General Assembly specified situations and knew when to use

       the word ‘contract,’ and it did not intend to form a contractual relationship between
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                                            Opinion of the Court

       the State and its employees related to health care insurance benefits.” Id. at 186.

¶ 21            Having concluded that the Retirees had failed to demonstrate the existence of

       any vested right in a premium-free 80/20 PPO Plan or its substantive equivalent, the

       Court of Appeals determined that the Retirees’ Contracts Clause argument

       necessarily failed. Id. at 188. For the same reason, the Court of Appeals overruled the

       trial court’s conclusion that the 2011 Act “violated Article I, section 19 of the

       Constitution [by] tak[ing] Plaintiffs’ private property without just compensation. . . .

       Without a valid contract, Plaintiffs’ state constitutional claims also fail.” Id. (citing

       Adams v. State, 248 N.C. App. 463, 469–70 (2016), disc. rev. denied, 370 N.C. 80

       (2017)). Accordingly, the court “reverse[d] the grant of partial summary judgment

       and remand[ed] for entry of summary judgment in favor of Defendants and dismissal

       of Plaintiffs’ complaint.” Id. at 189.

¶ 22            Plaintiffs filed a Petition for Discretionary Review and Writ of Certiorari on

       9 April 2019. This Court allowed discretionary review in an order dated 26 February

       2020.4

                By order dated 18 August 2021 this Court, mindful of the quorum requirement of
                4

       N.C.G.S. § 7A-10(a), invoked the Rule of Necessity to decide this matter in light of the fact
       that a majority of the members of the Court have one or more persons within the third degree
       of kinship by blood or marriage not residing in their households who could be plaintiff class
       members. See, e.g., Boyce & Isley, PLLC v. Cooper, 357 N.C. 655, 655–56 (2003) (invoking
       the Rule of Necessity to permit the making of a decision to grant or deny a petition for
       discretionary review in an important case by more than a bare quorum of the Court); Long v.
       Watts, 183 N.C. 99, 102–03 (1922) (determining that the Court must hear a case challenging
       the application of a statewide income tax to judicial salaries despite the potential effect of
       that case upon the members of the Court).
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                                          Opinion of the Court

                                   II.   Standard of Review

¶ 23         “When the party bringing the cause of action moves for summary judgment, he

       must establish that all of the facts on all of the essential elements of his claim are in

       his favor. . . .” Steel Creek Dev. Corp. v. James, 300 N.C. 631, 637 (1980). The movant

       “must show that there are no genuine issues of fact; that there are no gaps in his

       proof; that no inferences inconsistent with his recovery arise from his evidence; and

       that there is no standard that must be applied to the facts by the jury.” Kidd v. Early,

       289 N.C. 343, 370 (1976). This Court reviews a grant of summary judgment de novo.

       Charlotte-Mecklenburg Hosp. Auth. v. Talford, 366 N.C. 43, 47 (2012). In undertaking

       de novo review, we consider the affidavits, depositions, exhibits, and other

       submissions of the parties to determine if the material facts are uncontested and

       whether there is a genuine issue for trial. See, e.g., Dobson v. Harris, 352 N.C. 77, 83

       (2000) (citing Koontz v. City of Winston-Salem, 280 N.C. 513, 518 (1972)).

¶ 24         In this case both parties moved for summary judgment on the merits.

       Nevertheless, as we explained in Dobson,

                    [s]ummary judgment is properly granted when the forecast
                    of evidence reveals no genuine issue as to any material fact,
                    and when the moving party is entitled to a judgment as a
                    matter of law. . . . The movant’s papers are carefully
                    scrutinized . . . those of the adverse party are indulgently
                    regarded. All facts asserted by the adverse party are taken
                    as true, and their inferences must be viewed in the light
                    most favorable to that party.

       352 N.C. at 83 (cleaned up). Thus, even though both parties in this case asserted that
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       there were no disputes of material fact and that they were entitled to judgment as a

       matter of law, if our review of the evidence submitted at summary judgment reveals

       a genuine material factual dispute, we must remand to the trial court. See Forbis v.

       Neal, 361 N.C. 519, 530–31 (2007) (remanding after review of cross-motions for

       summary judgment).

                          III.     The Federal Contracts Clause Claim

¶ 25         The Court of Appeals correctly stated the legal framework applicable to claims

       arising under the Contracts Clause of the United States Constitution. As we have

       explained,   when         “determining   whether     a      contractual   right   has   been

       unconstitutionally impaired, we are guided by the three-part test set forth in U.S.

       Trust Co. of N.Y. v. New Jersey.” Bailey, 348 N.C. at 140. This test requires us to

       “ascertain: (1) whether a contractual obligation is present, (2) whether the state's

       actions impaired that contract, and (3) whether the impairment was reasonable and

       necessary to serve an important public purpose.” Id. at 141. An impairment only

       implicates the Contracts Clause if it is “substantial” as opposed to “[m]inimal.” Id. at

       151 (quoting Allied Structural Steel Co. v. Spannaus, 438 U.S. 234, 244–45 (1978)).

       We apply this familiar “tripartite test” in analyzing the Retirees’ claim. Simpson v.

       N.C. Local Gov’t Emps.’ Ret. Sys., 88 N.C. App. 216, 224 (1987), aff’d per curiam, 323

       N.C. 362 (1988).
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       A. Relevant North Carolina precedents interpreting and applying the U.S.
          Trust test.

¶ 26         This Court has interpreted and applied the U.S. Trust test to determine

       whether state employees or retirees possessed a vested right to an employment

       benefit on numerous occasions. At its core, this case centers on the proper

       interpretation of four of those cases: Simpson v. North Carolina Local Government

       Employees’ Retirement System, 88 N.C. App. 218 (1987), aff’d per curiam, 323 N.C.

       362 (1988); Faulkenbury v. Teachers’ & State Employees’ Retirement System of North

       Carolina, 345 N.C. 683 (1997), Bailey v. State, 348 N.C. 130 (1998), and North

       Carolina Association of Educators v. State (NCAE), 368 N.C. 777 (2016) (NCAE).

       According to the Retirees, these cases establish a universal framework for assessing

       when state employees obtain a vested right in any kind of employment benefit.

       According to the State, these cases explain why statutes providing pension benefits

       create vested rights; however, the State asserts that the reasons justifying this

       Court’s treatment of pension benefits do not pertain to the kind of claimed health

       insurance benefits at issue here.

¶ 27         We agree with the Retirees, to an extent. Collectively, Simpson, Faulkenbury,

       Bailey, and NCAE establish that a state employee can obtain a vested right in an

       employment benefit that is not a pension and that treatment of a benefit as a

       contractual right does not depend on how closely that benefit resembles a pension.

       These cases further illustrate that the State may assume a contractual obligation to
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       provide a benefit even if the statute creating the benefit “did not itself create any

       vested contractual rights.” NCAE, 368 N.C. at 789. Because many of the issues in this

       case were examined in these four prior cases, we begin with a brief review of these

       precedents.

          1. Simpson v. Local Government Employees’ Retirement System.

¶ 28         In Simpson, two firefighters who were vested members of the North Carolina

       Local Governmental Employees’ Retirement System challenged a law modifying how

       disability retirement benefits were calculated. 88 N.C. App. at 219–21. As a result of

       the General Assembly’s actions, the firefighters would “receive, upon disablement

       after vesting, a smaller retirement allowance under the modified statute than under

       prior law.” Id. at 220. The firefighters claimed that the decrease “constitute[d] an

       impairment of contractual rights” in violation of the Contracts Clause of the United

       States Constitution. Id. at 221. The Court of Appeals agreed, and this Court affirmed

       per curiam.

¶ 29         According to the Court of Appeals, “the relationship between plaintiffs and the

       Retirement System is one of contract.” Id. at 223. In support of this holding, the Court

       of Appeals identified two related but distinct justifications for characterizing the

       plaintiffs’ disability benefits as vested contractual rights:

                     If a pension is but deferred compensation, already in effect
                     earned, merely transubstantiated over time into a
                     retirement allowance, then an employee has contractual
                     rights to it. The agreement to defer the compensation is the
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                     contract. Fundamental fairness also dictates this result. A
                     public employee has a right to expect that the retirement
                     rights bargained for in exchange for his loyalty and
                     continued services, and continually promised him over
                     many years, will not be removed or diminished.

       Id. at 223–24 (emphasis added). The firefighters had vested rights in their pension

       benefits because (1) they earned the benefits as compensation while they were

       working and deferred receipt until retirement, and (2) the promise of disability

       retirement benefits allocated in a particular way was part of the bargain they struck

       with the State when they entered into an employment contract. Id. Notably, the Court

       of Appeals pointedly rejected the State’s argument that the General Assembly’s

       inclusion of a “right-to-amend” clause in the statute providing benefits to the

       firefighters defeated the firefighters’ claim.5 Id. at 221.

¶ 30          Next, without analysis, the Court of Appeals concluded that the challenged law

       substantially impaired the firefighters’ vested rights “inasmuch as plaintiffs stand to

       suffer significant reductions in their retirement allowances as a result of the

       legislative amendment under challenge.” Id. at 225. But the Court of Appeals

       concluded that a “genuine issue[ ] [remained] as to a[ ] material fact in this action,”

       namely, whether the State had demonstrated that the legislative changes to the

              5 For reasons explained more fully below, given the fact that Simpson established that
       a statutory provision containing a right-to-amend clause could give rise to contractual
       benefits, it was not unreasonable for the Retirees to believe that the statutory provisions
       granting retirement health insurance coverage could give rise to contractual benefits
       notwithstanding the legislature’s inclusion of a right-to-amend clause.
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       retirement plan were “reasonable and necessary to serve an important state interest.”

       Id. at 226. Accordingly, the Court of Appeals held that summary judgment for the

       State had been “improvidently entered” and remanded the case to the trial court for

       further proceedings. Id.

          2. Faulkenbury v. Teachers’ & State Employees’ Retirement System of
             North Carolina.

¶ 31          In Faulkenbury we considered whether a statute “which reduced plaintiffs’

       disability retirement payments[ ] violates Article I, Section 10 of the Constitution of

       the United States.” 345 N.C. at 690. Noting that the case was “almost on all fours

       with” Simpson, we affirmed “that the relation between the employees and the

       governmental units was contractual.” Id. Because “[a]t the time the plaintiffs’ rights

       to pensions became vested, the law provided that they would have disability

       retirement benefits calculated in a certain way,” we concluded that “[t]hese were

       rights [the plaintiffs] had earned and that may not be taken from them by legislative

       action.” Id.

¶ 32          After declining the defendants’ invitation to overrule Simpson, we considered

       and rejected various arguments purporting to explain why the plaintiffs lacked a

       contractual right in disability benefits calculated in the manner provided at the time

       their benefits vested. We expressly rejected the argument that the plaintiffs’ rights

       were not contractual because “the statutes upon which the plaintiffs rely . . . only

       state a policy which the General Assembly may change.” Id. Instead, we concluded
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       that these statutes “provided what the plaintiffs’ compensation in the way of

       retirement benefits would be” at the time the plaintiffs “started working for the

       state.” Id. Thus, when the plaintiffs accepted their offers of employment and

       subsequently vested in the retirement system, the statutes outlining disability

       benefits became part of their contracts. Id.

¶ 33         We reached this conclusion notwithstanding our recognition that “nothing in

       the statutes” indicated the General Assembly “intended to offer the benefits as a part

       of a contract.” Id. at 691. Instead of restricting our analysis to the four corners of the

       statute, we considered how a reasonable person offered employment with the State

       would interpret what the benefits provided by the statute represented:

                    [W]hen the General Assembly enacted laws which provided
                    for certain benefits to those persons who were to be
                    employed by the state and local governments and who
                    fulfilled certain conditions, this could reasonably be
                    considered by those persons as offers by the state or local
                    government to guarantee the benefits if those persons
                    fulfilled the conditions. When they did so, the contract was
                    formed.

       Id. We concluded it was reasonable for a prospective employee to believe the statutes

       providing retirement disability benefits were part of the compensation package

       promised, even though these statutes provided that the General Assembly “reserved

       the right to amend the retirement plans for state and local government employees.”

       Id.

¶ 34         Regarding the second prong of the U.S. Trust test, we reasoned that even if
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       other changes to the plaintiffs’ overall retirement benefits meant they were “receiving

       more than any reasonable expectation they had for disability benefits,” the plaintiffs

       were “entitled to what they bargained for when they accepted employment with the

       state and local governments. They should not be required to accept a reduction in

       benefits for other benefits they have received.” Id. at 693. Regarding the third prong,

       we rejected the defendants’ argument that the changes were “reasonable and

       necessary to accomplish [the] important public purpose” of discouraging employees

       from “tak[ing] early retirement.” Id. at 693–94. Accordingly, we held that the statute

       changing how retirement benefits were calculated violated the Contracts Clause. Id.

       at 694.

          3. Bailey v. State.

¶ 35         In Bailey a class of state and local government employees challenged a state

       law capping the amount of retirement benefits that were exempted from state

       taxation at $4,000. 348 N.C. at 139. Prior to the law, all benefits paid out to retirees

       under any state or local retirement system were entirely tax-exempt. Id. Every

       member of the class had “ ‘vested’ in the retirement system” before the law took effect,

       meaning they had met “the requirement that employees work a predetermined

       amount of time in public service before [becoming] eligible for retirement benefits.”

       Id. at 138. Ultimately, we agreed with the plaintiffs that they had “a contractual right

       to an exemption of their benefits from state taxation that has been impaired by the
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       Act.” Id. at 139.

¶ 36          Once again, the defendants invited this Court to overrule Simpson. Once again,

       we declined. Id. at 142 (“[T]he contractual relationship approach taken by the Court

       of Appeals in Simpson and our subsequent decisions is the proper one.”). Instead, we

       affirmed the underlying principle that North Carolina law has “long demonstrated a

       respect for the sanctity of private and public obligations from subsequent legislative

       infringement.” Id. We explained that “[t]his respect for individual rights has

       manifested itself through the expansion of situations in which courts have held

       contractual relationships to exist, and in which they have held these contracts to have

       been impaired by subsequent state legislation.” Id. at 143. We noted that this

       principle has been extended to cases protecting vested rights that were not created

       by statute. Id. at 144 (citing Pritchard v. Elizabeth City, 81 N.C. App. 543, disc. rev.

       denied, 318 N.C. 417 (1986)). Indeed, we explained that “[t]he basis of the contractual

       relationship determinations in these and related cases is the principle that where a

       party in entering an obligation relies on the State, he or she obtains vested rights that

       cannot be diminished by subsequent state action.” Id. (emphasis added). The

       employees’ “expectational interests upon which [they] have relied through their

       actions” in entering into and maintaining employment with the State were the source

       of the vested right “safeguarded by the Contract Clause protection.” Id. at 144–45.

¶ 37          With respect to the first prong of the U.S. Trust test, we framed the question
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       as “whether the tax exemption was a condition or term included in the retirement

       contract.” Id. at 146. We found dispositive the trial court’s finding of fact that “[a]

       reasonable person would have concluded from the totality of the circumstances and

       communications made to plaintiff class members that the tax exemption was a term

       of the retirement benefits offered in exchange for public service to state and local

       governments.” Id. Moreover, we concluded that this finding was amply supported by

       the evidence produced at trial, including the

                    creation of various statutory tax exemptions by the
                    legislature, the location of those provisions alongside the
                    other statutorily created benefit terms instead of within
                    the general income tax code, the frequency of governmental
                    contract making, communication of the exemption by
                    governmental agents in both written and oral form, use of
                    the exemption as inducement for employment, mandatory
                    participation, reduction of periodic wages by contribution
                    amount (evidencing compensation), loss of interest for
                    those not vesting, establishment of a set time period for
                    vesting, and the reliance of employees upon retirement
                    compensation in exchange for their services.

       Id. Based on this finding and the supporting evidence, we concluded that “in exchange

       for the inducement to and retention in employment, the State agreed to exempt from

       state taxation benefits derived from employees’ retirement plans.” Id. at 150. This

       was a sufficient basis for us to hold that “the right to benefits exempt from state

       taxation is a term of [every eligible State employee’s] contract” with the State. Id.

¶ 38         After rejecting the defendants’ arguments that             other statutes and

       constitutional provisions forbade the State from entering into a contract to provide a
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tax exemption, we held that the plaintiffs had also satisfied the second and third

prongs of the U.S. Trust test. With respect to the second prong, we concluded that the

imposition of a $4,000 annual exemption cap—which would produce “losses to retirees

in expected income . . . in excess of $100 million”—was a substantial impairment of

the employees’ contractual right to tax-exempt retirement benefits. Id. at 151. With

respect to the third prong, we rejected the State’s effort to justify the $4,000 cap as a

“reasonable and necessary” means to equalize the tax treatment of state and federal

retirement benefits, as was required under a recent United States Supreme Court

decision. Id. at 152 (citing Davis v. Mich. Dep’t of Treasury, 489 U.S. 803 (1989)). We

held that the $4,000 cap “was not necessary to achieve the state interest asserted”

because the State could have equalized the tax treatment of state and federal

retirement benefits in “numerous ways . . . without impairing the contractual

obligations of plaintiffs.” Id. (emphasis added). We held that the impairment was “not

reasonable under the circumstances” merely because the impairment would allow the

General Assembly to comply with Davis by enacting “revenue neutral” legislation. Id.

(emphasis added). Accordingly, we concluded that the law capping state retirement

benefits tax exemptions for the plaintiffs violated the Contracts Clause of the United

States Constitution and was an impermissible taking under the Law of the Land

Clause of the North Carolina Constitution.
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          4. North Carolina Association of Educators v. State.

¶ 39         Finally, in NCAE a class of North Carolina public school teachers claimed that

       the General Assembly violated both the Contracts Clause and the Law of the Land

       Clause when it enacted a statute eliminating North Carolina’s career status system,

       “creat[ing] a new system of employment,” and “retroactively revok[ing] the career

       status of teachers who had already earned that designation.” 368 N.C. at 779. Under

       the career status system, teachers who had been employed for a statutorily fixed

       number of years became eligible to enter into a “career teacher” contract with the

       teacher’s local school board; having attained career status, the teacher would “no

       longer [be] subject to an annual appointment process and could only be dismissed for

       . . . grounds specified [by] statute.” Id. (internal citation omitted). This Court

       concluded that the law eliminating career status was unconstitutional “to the extent

       that the Act retroactively applies to teachers who had attained career status as of”

       the date the change took effect. Id.

¶ 40         Once again, the Court turned to the three-prong U.S. Trust test. To determine

       if the State had undertaken a contractual obligation to maintain the career status

       system, the Court first considered “whether any contractual obligation arose from the

       statute making up the now-repealed Career Status Law.” Id. at 786. Noting the

       “presumption” against construing state statutes to create private contractual or

       vested rights, id., the Court concluded that the law itself was not the source of any
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       such rights, id. at 788. In reaching this conclusion, the Court found it “critical” that

       the legislature had chosen not to use the word contract in the Career Status Law. Id.

       at 787.

¶ 41         Nonetheless, the Court explained that there were other ways to prove the

       existence of a vested right. The first was through a statute providing benefits in the

       form of deferred compensation. In these circumstances “vested contractual rights

       were created by the statutes at issue because, at the moment the plaintiffs fulfilled

       the conditions set out in the two benefits programs, the plaintiffs earned those

       benefits.” Id. at 788. This scenario did not describe the statutes creating the career

       status system because teachers who met the eligibility requirements for becoming a

       career teacher did not automatically become a career teacher; rather, they needed to

       “enter a career contract with the school board.” Id. Accordingly, the Court held that

       “the Career Status Law did not itself create any vested contractual rights.” Id. at 789.

¶ 42         Yet the Court’s analysis “d[id] not end here.” Id. Instead, the Court explained

       that “[l]aws which subsist at the time and place of the making of a contract . . . enter

       into and form a part of it, as if they were expressly referred to or incorporated in its

       terms.” Id. at 789 (second alteration in original) (quoting Home Bldg. & Loan Ass’n

       v. Blaisdell, 290 U.S. 398, 429–30 (1934)). When teachers entered into contracts with

       local school boards to become career teachers, the “statutory system that was in the

       background of the contract between the teacher and the board set out the mechanism
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       through which the teachers could obtain career status.” Id. After the teacher

       “complet[ed] several consecutive years as a probationary teacher and then receiv[ed]

       approval from the school board,” the teacher’s contractual right to career status

       protections “vested.” Id. “At that point, the General Assembly no longer could take

       away that vested right retroactively in a way that would substantially impair it.” Id.

       Thus, we concluded that “vesting stems not from the Career Status Law, but from

       the teacher’s entry into an individual contract with the local school system.” Id.

¶ 43         In support of this conclusion, the Court relied on evidence in the record

       indicating that the opportunity to attain career status was offered to teachers as part

       of the compensation package used to attract them to public sector employment and

       that teachers considered the benefit to be an important incentive to remain in their

       positions. Id. (stating that the record “demonstrates the importance of those

       protections to the parties and the teachers’ reliance upon those benefits in deciding

       to take employment as a public school teacher”). Relying principally on affidavits

       submitted by the plaintiffs, the Court explained that public school teachers

                    were promised career status protections in exchange for
                    meeting the requirements of the law, relied on this promise
                    in exchange for accepting their teacher positions and
                    continuing their employment with their school districts,
                    and consider the benefits and protections of career status
                    to offset the low wages of public school teachers.

       Id. at 789–90. Thus, “although the Career Status Law itself created no vested

       contractual rights, the contracts between the local school boards and teachers with
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       approved career status included the Career Status Law as an implied term upon

       which teachers relied.” Id. at 790.

¶ 44          The Court then examined the two remaining prongs of the U.S. Trust test.

       Because the law repealing career status eliminated protections that had previously

       been afforded to the teachers under the Career Status Law, the Court had no trouble

       concluding that repeal of the law effected “a substantial impairment of the bargained-

       for benefit promised to the teachers who have already achieved career status.” Id.

       Addressing the third prong—whether the impairment was “reasonable and

       necessary”—the Court explained that the burden shifted back to the State to “justify

       an otherwise unconstitutional impairment of contract” in light of “the interest the

       State argues is furthered.” Id. at 791. Although the Court agreed with the State that

       “maintaining the quality of the public school system is an important purpose . . . [and]

       that alleviating difficulties in dismissing ineffective teachers might be a legitimate

       end justifying changes to the Career Status Law, no evidence indicates that such a

       problem existed.” Id. Furthermore, the Court could not discern how retroactively

       repealing career status for all teachers who had already earned it was a “reasonable”

       way of advancing the State’s asserted interest in light of “several alternatives . . . that

       would allow school boards more flexibility in dismissing low-quality teachers.” Id. at

       792. Accordingly, the Court held that the repeal of the Career Status Law was

       unconstitutional as applied to teachers who had entered into contracts with school
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       boards which granted them career status protections. Id.

       B. Whether a contractual obligation is present.

¶ 45          The facts regarding the language chosen by the General Assembly in the

       statutes creating the State Health Plan, and the language regarding the plan utilized

       by the State and its agents in communications with employees, retirees, and the

       public, are not in dispute. The sole question before us in resolving this issue is a legal

       one: the facts being what they are, do state employees have a vested right in lifetime

       enrollment in a premium-free health insurance plan offering coverage that is of

       equivalent or greater value than the plan offered at the time they became eligible to

       enroll in the State Health Plan on a noncontributory basis? We conclude that they do.

¶ 46          As our precedents illustrate, a state employee can prove the existence of a

       vested right in numerous ways. An employee can show that the statute conferring a

       benefit is itself the source of the right. Generally, proving that the statute is itself the

       source of a right requires an employee to point to language in the statute plainly

       evincing the General Assembly’s intent to undertake a contractual obligation. Based

       on the uncontested facts, we agree with the State that the Establishing Act is not

       itself the source of the Retirees’ contractual right. The Establishing Act declares that

       the State “undertakes to make available a Comprehensive Major Medical Plan . . . to

       employees, retired employees, and certain of their dependents,” but it stipulates that

       the State “will pay benefits in accordance with the terms hereof.” Act of June 23, 1982,
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       ch. 1398 § 6, 1981 N.C. Sess. Laws (Reg. Sess. 1982) at 292 (emphases added)

       (enacting N.C.G.S. § 135-40 (1982), repealed by S.L. 2008-168 § 3(b), 2007 N.C. Sess.

       Laws. (Reg. Sess. 2008) 649, 661)). In addition, the Establishing Act contains a “right-

       to-amend” clause which expressly reserves to the General Assembly the authority to

       change the “terms” of coverage. Id. Accordingly, the Establishing Act does not

       expressly indicate an intent to create a contractual obligation to provide health

       insurance coverage of a certain value.

¶ 47         But state employees can also prove the existence of a vested right by

       demonstrating that they reasonably relied upon the promise of benefits provided by

       a statute when entering into an employment contract with the State. See, e.g., Bailey,

       348 N.C. at 145. If a statute provides benefits in the form of immediate compensation

       deferred until retirement, then the employee’s right to the benefit vests when the

       contract is formed. Cf. NCAE, 368 N.C. at 788 (“Though the benefits would be

       received at a later time, the plaintiffs’ right to receive them accrued immediately,

       became vested, and a contract was formed between the plaintiffs and the State.”

       (citing Bailey and Faulkenbury)). By contrast, if a statute provides benefits for which

       an employee only becomes eligible after certain conditions are met, then the

       employee’s right to the benefit vests when he or she satisfies the relevant eligibility

       criteria. Id. at 788–89.

¶ 48         The Court of Appeals went awry in three important ways when interpreting
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and applying our Contracts Clause precedents. First, as detailed above, the Court of

Appeals ignored our cases recognizing that vested rights can arise even in the absence

of a statute demonstrating the General Assembly’s express intent to undertake a

contractual obligation. As NCAE illustrates, vested rights may arise from a source

other than an express statutory provision even in circumstances involving benefits

that are not pensions. Second, the Court of Appeals overstated the importance of the

distinction between pension benefits and other kinds of retirement benefits. Although

it is relevant that some of the factors which have led this Court to recognize pension

benefits as vested rights are not present with regard to lifetime enrollment in a

premium-free health insurance plan, these distinctions do not preclude a finding that

public employees obtained a vested right to the latter.6 Third, the Court of Appeals

was wrong to disregard the Retirees’ extrinsic evidence regarding the State’s

communications about the health insurance benefit and what employees reasonably

understood that benefit to be. On a different set of facts in which a statute providing

benefits unambiguously disclaimed any intent to provide any benefits that could be

       6 For example, it is correct that public employees are required to contribute to and
enroll in the pension system but that they can opt out of health insurance coverage.
Regardless, even if an employee does not choose to enroll in the State Health Plan, the
availability of such a plan to an employee—and the employee’s lifetime eligibility to become
a plan member—confers a material benefit which could reasonably influence an individual’s
decision to accept or remain in employment with the State.
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       incorporated into the terms of a contract,7 the importance of the State’s subsequent

       communications with employees might be diminished. But we are not presented with

       such a circumstance in this case.

¶ 49          Here, the undisputed evidence establishes that, as the trial court found, “[t]he

       [State] offered [the Retirees] certain premium-free health insurance benefits in their

       retirement if they worked for the State . . . for a requisite period of time” and that the

       “promise” of this benefit was “part of the overall compensation package” state

       employees reasonably expected to receive in return for their services. The undisputed

       evidence

                     reveals that often the [benefit of lifetime eligibility for
                     premium-free health insurance] was communicated to
                     prospective employees with the intent of inducing
                     individuals to either begin or continue public service
                     employment. Moreover, . . . innumerable communications
                     were made to plaintiff public employees throughout their
                     careers, both orally and in writing (including multiple
                     unequivocal written statements in official publications and

              7  Notably, the General Assembly has enacted statutes containing right-to-amend
       provisions which explicitly and unmistakably stated that any benefits provided by statute
       would not be contractual in nature. See N.C.G.S. § 135-113 (2021) (“The benefits provided in
       this Article as applicable to a participant who is not a beneficiary under the provisions of this
       Article shall not be considered as a part of an employment contract, either written or implied,
       and the General Assembly reserves the right at any time and from time to time to modify,
       amend in whole or in part or repeal the provisions of this Article.”); see also N.C.G.S. § 128-
       38.10(j) (2021) (“The General Assembly reserves the right at any time and, from time to time,
       to modify or amend, in whole or in part, any or all of the provisions of the QEBA. No member
       of the Retirement System and no beneficiary of such a member shall be deemed to have
       acquired any vested right to a supplemental payment under this section.”). The fact that the
       legislature chose not to include this kind of explicit clause in the right-to-amend provision at
       issue here is further support for the conclusion that the Retirees reasonably relied on the
       State’s promise of retirement health insurance coverage.
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                      employee handbooks) [regarding the availability of the
                      benefit]. . . .

       Bailey, 348 N.C. at 138. The undisputed evidence demonstrates that this benefit was

       an important component of state employees’ acceptance of and continuation in

       employment with the State. NCAE, 368 N.C. at 789. These undisputed facts are

       sufficient to establish the legal proposition that a vested right arose from employees’

       reasonable “expectational interests” and their actions in reliance thereon. Bailey, 348

       N.C. at 145.

¶ 50         For example, multiple class members testified to the impact the promise of

       retirement health insurance coverage had on their decision to accept employment

       with and continue working for the State. As we explained in NCAE, such evidence

       can “demonstrate[ ] the importance of those protections to the parties and the

       [employees’] reliance upon those benefits in deciding to take [public] employment.”

       368 N.C. at 789. The State does not meaningfully dispute the fact that class members

       understood the promise of eligibility to enroll in health care after retirement to be a

       benefit they earned through their service to the State—indeed, multiple of the

       defendants or their agents agreed in deposition testimony that they understood

       themselves to have “vested in the retiree health benefit.” This undisputed evidence

       establishes that the promise of health insurance coverage in retirement was “an

       implied term upon which [the employees] relied.” Id. at 790.

¶ 51         Of course, one party’s reliance does not give rise to a contractual obligation if
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                                             Opinion of the Court

       their reliance is unreasonable. But, in this case, undisputed evidence illustrates that

       all parties understood the State to have undertaken an obligation to provide

       continued premium-free health insurance coverage to retirees who had satisfied the

       statutory eligibility requirements.8 While this evidence does not prove that the

       General Assembly acted with an express intent to contract, it demonstrates the

       reasonableness of the Retirees’ belief that lifetime eligibility for enrollment in a

       premium-free health insurance plan was an inducement to employment and a part of

       their overall compensation package.

¶ 52           The short title of the final version of the 2006 bill requiring retired employees

       to have worked for the State for at least twenty years before becoming eligible for

       noncontributory retirement health insurance benefits was “State Health Plan / 20-

       Year Vesting.” S.837 (3d ed.), S.L. 2006-174, § 1, 2005 N.C. Sess. Laws (Reg. Sess.

       2006) at 630 (emphasis added). An actuarial study commissioned by the General

       Assembly to analyze the fiscal impact of changing the service requirement stated that

              8 Although the question of whether a party’s reliance is reasonable “is ordinarily a
       question of fact,” Olivetti Corp. v. Ames Bus. Sys., Inc., 319 N.C. 534, 544 (1987), the question
       of whether there exists a “genuine issue of material fact” with respect to the reasonableness
       of a party’s reliance is a “question[ ] of law,” Ellis v. Williams, 319 N.C. 413, 415 (1987)
       (emphasis added). Thus, we have on numerous prior occasions recognized that the question
       of whether a party’s reliance has been “established as a matter of law” to be reasonable can
       be resolved on a party’s appeal from a summary judgment order when the underlying
       material facts are undisputed. Cummings v. Carroll, 866 S.E.2d 675, 2021-NCSC-147, ¶ 38;
       see also Ussery v. Branch Banking & Tr. Co., 368 N.C. 325, 336 (2015) (concluding on review
       of summary judgment order that debtor “cannot . . . claim he reasonably relied on” creditor’s
       representation, and citing Court of Appeals decision for proposition that a party’s reliance
       can be “unreasonable as a matter of law”).
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                                          Opinion of the Court

       “current non-contributory premiums paid on behalf of current retirees . . . will

       continue to be a State obligation for some time until these retirees exit the Plan.” Staff

       of N.C. Gen. Assembly Fiscal Rsch. Div., Legislative Actuarial Note on S. 837 (2d ed.):

       State Health Plan / 20-Year Vesting, 2005 Sess. (Reg. Sess. 2006) (June 30, 2006) at

       3 (emphasis added). The fiscal note further explained that the bill increasing the

       minimum number of years of service “requires its application to be prospective” and

       reiterated that the State would still have an “obligation” to pay the premiums of

       retirees and current employees who had already vested. Id. (emphasis added). This

       legislative history, including the General Assembly’s frequent use of the terms

       “vested” and “obligation” in reference to its future payment of retirees’ health

       insurance premiums, is further support for the proposition that the Retirees have

       demonstrated that they and the State shared a common understanding of what this

       benefit represented.

¶ 53         Indeed, on numerous occasions, State officials and agents involved in

       administering retirement benefits told State employees they could rely on the

       promise of health insurance coverage in retirement. In press releases, benefits

       booklets, and training materials, the State conveyed to its employees that after

       completing the applicable service eligibility requirements they would be entitled to

       health insurance coverage “for life.” Customer service personnel were instructed that

       “[i]n order for the retiree to have paid health insurance, he [or she] must have 5 years
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                                          Opinion of the Court

       of contributing membership in the State System, and be in receipt of a monthly

       retirement benefit with the State. . . . With growing concern about health insurance

       in our society today, this is an important piece of information that the member should

       know if he [or she] is vested . . . .” Again, the State does not dispute the existence of

       these materials or the words they contained. As this evidence makes clear, the State

       believed it had undertaken an ongoing commitment to provide health insurance

       benefits to retired employees who had satisfied eligibility requirements and,

       frequently and in numerous ways, communicated that fact to its employees; it is not

       unreasonable for these employees to have taken the State at its word.

¶ 54         For years, employees entering into public employment “relie[d] on” the State’s

       promise of future health insurance benefits. Bailey, 348 N.C. at 144. Prior cases

       recognizing that this kind of reliance gives rise to vested rights are, like this case,

       “rooted in the protection of expectational interests upon which individuals have relied

       through their actions.” Id. at 145. “The statutory system that was in the background

       of the contract between” the Retirees and the State “set out the mechanism through

       which the [employees] could obtain” the health insurance benefit. NCAE, 368 N.C. at

       789. Once state employees met the applicable statutory eligibility requirements and

       became eligible to enroll in a noncontributory health insurance plan, their right

       vested to enroll in a plan offering equivalent or greater value to the one offered to

       them at the time the contract was formed. Accordingly, we overrule the Court of
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                                          Opinion of the Court

       Appeals’ determination that the Retirees had failed to prove the existence of a vested

       right subject to protection by the Contracts Clause.

       C. Whether the contract was substantially impaired.

¶ 55         The trial court’s sole legal conclusion addressing the second prong of the U.S.

       Trust test was its determination that “[t]he [State] substantially impaired the

       contracts with the [Retirees].” The Court of Appeals did not reach this prong because

       it held that the Retirees possessed no vested right to health insurance benefits upon

       retirement which the State could unconstitutionally impair. Regardless, in reviewing

       the trial court’s order resolving the parties’ competing motions for summary

       judgment, we review de novo the trial court’s findings of fact and conclusions of law

       addressing this issue. Forbis, 361 N.C. at 523–24.

¶ 56         At the outset, we reject the State’s argument that the existence of the right-to-

       amend provision in the Establishing Act automatically negates the Retirees’

       argument that the 2011 Act substantially impaired their vested rights. This

       argument suggests that because the General Assembly reserved the right to make

       (and regularly has made) changes to the terms of the health insurance plans available

       to retirees, any such changes are necessarily consistent with the Retirees’ “objectively

       reasonable reliance interests.” The absurdity of this argument is apparent if taken to

       its logical conclusion. Under the State’s reasoning, the General Assembly would not

       substantially impair the Retirees’ vested rights as long as the legislature continued
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                                         Opinion of the Court

       offering a premium-free 80/20 PPO Plan, even if the State imposed a $1 million copay

       for covered services or a similarly exorbitant deductible. Yet obviously, under these

       circumstances the Retirees would rightly perceive that they were being denied the

       benefit of their bargain. Their vested right is more than just the right to enroll in a

       health insurance plan: this right has a substantive component relating to the value

       of the plans being offered by the State.

¶ 57         Nonetheless, recognizing that the Retirees’ vested rights have a substantive

       component does not resolve whether those rights were substantially impaired. To

       answer that question, the Retirees needed to (1) demonstrate a method for objectively

       determining the value of a health insurance plan, one that accounted for the

       numerous variables influencing the “value” of a health insurance plan to a plan

       member; (2) establish the baseline value of the health insurance plan offered to each

       Retiree when his or her right to retirement health insurance benefits vested; and

       (3) show that the plans currently offered by the State are substantially less valuable

       than those baseline plans. We agree with the State that the trial court erred in

       resolving these issues on summary judgment.

¶ 58         The trial court entered three findings of fact of particular relevance to its

       conclusion that the 2011 Act substantially impaired the Retirees’ vested rights:

                    27. The currently offered 80/20 “Enhanced” Plan (formerly
                        called the standard plan) [i.e., the 80/20 PPO Plan] was
                        the continuation of the primary “regular state health
                        plan” [i.e., the Major Medical Plan] that had been
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                                          Opinion of the Court

                       offered premium-free from 1982 until August 31, 2011.

                    ....

                    29. The most appropriate way to measure the value of a
                        health plan received by a member of that plan and to
                        compare the value between offered plans is through the
                        calculation and use of a plan’s actuarial value. Through
                        the use of actuarial values, it can be determined
                        whether a given plan is equivalent to another plan or
                        not – the effective actuarial equivalency (hereinafter
                        such calculation methodology referred to as
                        “Equivalent”).

                    ....

                    31. The health plan(s) offered by the State Health Plan at
                        the 70/30 level and referred to by the State Health Plan
                        as the “Basic” and “Traditional” Plans from 2011-2016
                        is of a lesser value than the 80/20 Standard Plan and
                        was not and is not Equivalent to the 80/20 Standard
                        Plan.

       Contrary to the trial court’s characterization of these findings as “[u]ndisputed,” each

       was and remains vigorously contested. The State disagrees that the 80/20 PPO Plan

       is the continuation of the Major Medical Plan, disputes the validity of the “actuarial

       equivalency” method for determining the relative value of different health insurance

       plans, and asserts that “the State has always offered plaintiffs a health plan with an

       actuarial value” “that mirrors the Major Medical Plan.” There is evidence in the

       record to support both parties’ positions on each of these determinative issues.

¶ 59         The “facts alleged” by the State “are of such nature as to affect the result of the

       action,” and “question[s] as to . . . the weight of evidence” have been brought forth by
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                                         Opinion of the Court

       the parties. Kessing v. Nat’l Mortg. Corp., 278 N.C. 523, 535 (1971). For example, the

       State argued at summary judgment that the evidence showed that “over 75% of

       retirees who are enrolled in the State Health Plan are eligible for Medicare” and that

       for those individuals, the cost difference between the 70/30 and 80/20 PPO Plans is

       just “slightly over $3 per month.” Thus, the State contends that even after 2011 the

       Retirees could remain in a premium-free health insurance plan providing essentially

       the same or greater value as the plan offered to them when their rights vested. The

       State also presented evidence disputing the Retirees’ assertion that a sizeable portion

       of the class was paying premiums as high as $100 per month to maintain their

       coverage.

¶ 60         At the same time, the Retirees have offered evidence that supports the

       conclusion that their rights were substantially impaired, including that the plans

       currently offered cost members, on average, an additional $400 per year, and that the

       total impairment to the Retirees’ contractual rights may exceed $100 million in back

       premiums. Thus, there are “genuine issues [of] . . . material fact” with respect to the

       second prong of the U.S. Trust test, and these issues are “triable.” N.C Nat’l Bank v.

       Gillespie, 291 N.C. 303, 310 (1976). Although some of the material evidence is

       undisputed, the parties do not agree on the central questions of how to value health

       insurance plans and whether the health insurance plans offered to retirees after the

       effective date of the 2011 Act are comparable to or of substantially lesser value than
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                                            Opinion of the Court

       the plans they bargained for. Accordingly, “summary judgment was improperly

       granted.” N.C. Farm Bureau Mut. Ins. Co. v. Sadler, 365 N.C. 178, 182 (2011).

¶ 61          Moreover, we note that even if the trial court’s findings had been undisputed,

       the findings would be inadequate to support the conclusion that there was a

       substantial impairment. The trial court largely based its conclusion that the State

       substantially impaired class members’ contracts on its finding that “[t]he health

       plan[s] offered by the State Health Plan at the 70/30 level . . . is of a lesser value than

       the 80/20 Standard Plan and was not and is not Equivalent to the 80/20 Standard

       Plan.” But, in addition to finding that the value of a vested right has been diminished,

       the trial court also needed to determine the magnitude of the decline in value in order

       to ascertain whether any impairment was “substantial.” As we explained in Bailey,

       “[w]hen examining whether a contract has been unconstitutionally impaired, the

       ‘inquiry must be whether the state law has, in fact, operated as a substantial

       impairment of a contractual relationship. . . . Minimal alteration of contractual

       obligations may end the inquiry at [this] stage.’ ” Bailey, 348 N.C. at 151 (alterations

       in original) (quoting Allied Structural Steel Co., 438 U.S. at 244–45 (footnote

       omitted)).9 Given the complexities inherent in determining the comparative value of

              9 In assessing whether an impairment is minimal or substantial, courts may consider
       the “overall impact” of the impairment when measured in the aggregate provided they do so
       in the context of the size of the class. Bailey v. State, 348 N.C. 130 (1998). For example, the
       $100 million impairment at issue in Bailey would likely not have established the existence of
       a “substantial” impairment if the class had been comprised of one hundred million people.
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                                         Opinion of the Court

       different health insurance plans, it was not self-evident that eliminating the

       premium-free 80/20 PPO Plan while maintaining the premium-free 70/30 PPO Plan

       worked a substantial impairment.

¶ 62         Further, the parties agreed to defer consideration of the extent of damages, but

       that evidence may be relevant to whether the contractual impairment was

       substantial. Different class members vested at different times, and the terms of the

       Major Medical Plan and the PPO plans the State began offering later have changed

       over time. These evolutions matter in the Contracts Clause analysis—the terms of

       the plan offered when each class member vested establish the baseline value of what

       each individual bargained for. Yet the trial court’s findings do not address these

       nuances, and the evidence at summary judgment indicates that the value of the

       benefits the Retirees could expect at the time they vested remains hotly contested. It

       may be that the Retirees can obviate the need to engage with these complexities by

       proving that all of the noncontributory plans offered to class members who vested

       before 2011 were more valuable than any of the noncontributory plans offered to class

       members today—or, vice versa, that the State can prevail by proving that the value

       of a noncontributory plan offered to every class member today is equivalent to or more

       generous than the most valuable noncontributory plan available to all class members

       when they vested. But neither side has met its burden of doing so on summary

       judgment. This information is actually disputed and is crucial to measuring whether
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                                         Opinion of the Court

       there was an impairment and, if so, whether the impairment was substantial.

¶ 63         The trial court’s determination that there was a substantial impairment of the

       Retirees’ contracts was based on an overly simplified characterization of what the

       Retirees were entitled to when they vested and what they were receiving after the

       2011 Act took effect. The trial court’s order masks important disputes of material fact

       that must be resolved before a decision on liability can be made. In Simpson this

       Court held that the plaintiffs “had a contractual right to rely on the terms of the

       retirement plan as these terms existed at the moment their retirement rights became

       vested.” 88 N.C. App. at 224. In Faulkenbury, we explained further that the plaintiffs

       “expected to receive what they were promised at the time of vesting. They may not

       have known the exact amount, but this was their expectation. The contract was

       substantially impaired when the promised amount was taken from them.” 345 N.C.

       at 692–93. Therefore, the crucial factual matters relevant to this issue are the value

       of the plan in which the Retirees were vested and the value of what was offered to

       them after the 2011 Act took effect. While it is understandable that the parties and

       the trial court were not eager to wrestle with the factually complex assessment of

       which class members suffered what damages, in this case that assessment of

       damages may be crucial to determining whether, in fact, the impairment of the state

       employees’ contract was substantial and thus constitutionally salient.
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                                           Opinion of the Court

       D. Whether the impairment was reasonable and necessary.

¶ 64          If the trial court determines that the 2011 Act substantially impaired the

       Retirees’ contractual rights, the final question is whether the impairment was “a

       reasonable and necessary means of serving a legitimate public purpose.” NCAE, 368

       N.C. at 791. “This portion of the inquiry involves a two-step process, first identifying

       the actual harm the state seeks to cure, then considering whether the remedial

       measure adopted by the state is both a reasonable and necessary means of addressing

       that purpose.” Id. (citing Energy Rsrvs. Grp. v. Kan. Power & Light Co., 459 U.S. 400,

       412 (1983)). At this stage of the analysis, “[t]he burden is upon the State . . . to justify

       an otherwise unconstitutional impairment of contract.” Id. (citing U.S. Trust, 431

       U.S. at 31).

¶ 65          In its order granting the Retirees’ partial motion for summary judgment, the

       trial court found that the State’s impairment “was neither reasonable nor necessary

       to serve an important public purpose.” However, underlying this determination are

       genuine disputes about material facts which require further development at trial. In

       particular, should it need to reach this question on remand, the trial court must

       closely examine the State’s asserted interest in avoiding an “estimated thirty-five

       billion dollars in unfunded future outlays” and the Retirees’ rejoinder that “there

       were a multitude of methods to stabilize the State Health Plan without impairing

       vested rights.”
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                                          Opinion of the Court

¶ 66         Although answering this question primarily requires resolving disputed issues

       of fact, certain applicable legal principles can be discerned from our case law. First,

       the existence of the problem the State asserts it seeks to address by impairing a

       contract cannot be assumed. Instead, the State must present “evidence [which]

       indicates that such a problem existed.” Id. Second, the State’s interest in not

       expending resources is not, standing alone, sufficient to render an impairment

       reasonable. Many contracts commit a party to expending resources in the future, even

       if the party would prefer not to when the time comes to pay; the party’s obligation to

       do so anyway makes it a contract. The fact that disallowing an impairment might

       require the General Assembly to make difficult choices regarding how to allocate

       resources to best manage its fiscal obligations does not necessarily justify abrogating

       the legislature’s contractual obligations. Bailey, 348 N.C. at 152. Similarly, the fact

       that certain trends have caused an increase in the State’s cost of maintaining the

       promised benefits does not, on its own, justify an impairment. See Faulkenbury, 345

       N.C. at 694 (“We do not believe that because the pension plan has developed in some

       ways that were not anticipated when the contract was made, the state or local

       government is justified in abrogating it.”). Finally, the State “is not free to impose a

       drastic impairment when an evident and more moderate course would serve its

       purposes equally well.” U.S. Trust, 431 U.S. at 31. The existence of “alternative[ ]”

       methods of advancing the State’s asserted interest other than imposing an
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                                           Opinion of the Court

       impairment tends to detract from the State’s contention that the impairment is

       necessary. NCAE, 368 N.C. at 792. At the same time, we recognize that “the

       [e]conomic interest of the state may justify . . . interference with contracts,” Home

       Bldg. & Loan Ass’n, 290 U.S. at 437, and that the State always retains the authority

       to act to protect the public should it be faced with a grievous fiscal emergency. On

       remand, these principles should guide the trial court’s effort to ascertain whether any

       impairment of the Retirees’ rights, if proved, was “reasonable and necessary” and

       thus permissible under the Contracts Clause.

                       IV.    The State Law of the Land Clause Claim

¶ 67          In addition to their Contracts Clause claim, the Retirees also alleged that the

       2011 Act constituted an impermissible taking of private property in violation of

       article I, section 19 of the North Carolina Constitution. The trial court agreed,

       concluding that “[i]mposing premiums on the 80/20 Standard Plan . . . constituted a

       ‘taking’ under state law of Class Members’ private property by restricting and/or

       eliminating Class Members’ contractual right to the non-contributory 80/20 Standard

       plan and reducing a vested retirement benefit.” The Court of Appeals reversed based

       on its conclusion that the Retirees had failed to demonstrate the existence of any

       rights implicated by the 2011 Act. Lake, 264 N.C. App. at 188.

¶ 68          The Law of the Land Clause of the North Carolina Constitution guarantees in

       relevant part that “[n]o person shall be . . . in any manner deprived of his . . . property,
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                                          Opinion of the Court

       but by the law of the land.” N.C. Const. art. I, § 19. As the Court of Appeals correctly

       explained, “[a] contractual right is a property right, and the impairment of a valid

       contract is an impermissible taking of property.” Lake, 264 N.C. App. at 188; see also

       Bailey, 348 N.C. at 154 (“[V]alid contracts are property . . . .” (quoting Lynch v. United

       States, 292 U.S. 571, 579 (1934))). Thus, in holding that the Retirees do have a vested

       right in retirement health insurance coverage, we necessarily overrule the Court of

       Appeals’ conclusion that the Retirees lack a colorable state constitutional claim. Of

       course, even if there is a property right, there can be no constitutionally

       impermissible taking if there is no taking. Cf. Dep’t of Transp. v. Adams Outdoor

       Advert. of Charlotte Ltd. P’ship, 370 N.C. 101, 106 (2017) (“When the State takes

       private property . . . the owner must be justly compensated.”) (cleaned up) (emphasis

       added). Accordingly, on remand, the trial court must reassess the Retirees’ Law of

       the Land Clause claim in light of its resolution of the parties’ dispute regarding the

       value of the noncontributory plans offered by the State to Retirees at various times.

                                         V.    Conclusion

¶ 69         This case raises significant questions relating to the State’s efforts over the

       years to attract and retain talented employees while responsibly managing its fiscal

       obligations. This dispute also raises issues of profound importance to the hundreds of

       thousands of dedicated public employees who devoted their lives to serving their

       fellow North Carolinians, often for less immediate remuneration than would have
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                                          Opinion of the Court

       been available to them in the private sector. Although our decision in this case does

       not end this controversy, it narrows the issues and, hopefully, moves the parties

       closer to a just resolution.

¶ 70          Today we hold that the Retirees who satisfied the eligibility requirements

       existing at the time they were hired obtained a vested right in remaining eligible to

       enroll in a noncontributory health insurance plan for life. These Retirees reasonably

       relied on the promise of this benefit in choosing to accept employment with the State.

       They are entitled to the benefit of their bargain, which includes eligibility to enroll in

       a premium-free plan offering the same or greater coverage value as the one available

       to them when their rights vested. Nevertheless, we also hold that the trial court erred

       in concluding that the Retirees brought forth undisputed facts demonstrating that

       their vested rights were substantially impaired when the General Assembly

       eliminated the premium-free 80/20 PPO Plan in 2011. In particular, the trial court

       overlooked genuine issues of material fact regarding the proper way to assess the

       relative value of different health insurance plans and potential differences in the

       value of the bargain struck by class members whose rights vested at different times.

       The trial court also erred in entering summary judgment against the State on the

       issue of whether any such impairment was reasonable and necessary.

¶ 71          Accordingly, we overrule the portion of the Court of Appeals decision holding

       that the Retirees lacked any right which triggered the protections of the Contracts
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                                   Opinion of the Court

Clause of the United States Constitution and the Law of the Land Clause of the North

Carolina Constitution. We affirm the decision of the Court Appeals to the extent it

reversed the trial court’s grant of partial summary judgment in the Retirees’ favor,

reverse that court’s decision with respect to its conclusion that the State was entitled

to summary judgment on liability, and remand this action to the trial court for

proceedings not inconsistent with this opinion.

      AFFIRMED IN PART; REVERSED IN PART AND REMANDED.

      Chief Justice NEWBY did not participate in the consideration or decision of

this case.
             Justice BARRINGER concurring in part and dissenting in part.

¶ 72         I agree with the majority that we must remand this case for factual

       determinations on whether the State substantially impaired a contract and whether

       such impairment was reasonable and necessary. However, because the evidence in

       the record, when viewed in the light most favorable to the State, creates a genuine

       issue of material fact as to whether any contractual obligation is present, we should

       also remand that issue to the trial court for resolution by the fact-finder. Accordingly,

       I respectfully concur in part and dissent in part.

                                              Analysis

¶ 73         In determining whether the State has unconstitutionally impaired a contract,

       North Carolina courts follow a three-part test involving “(1) whether a contractual

       obligation is present, (2) whether the state’s actions impaired that contract, and (3)

       whether the impairment was reasonable and necessary to serve an important public

       purpose.” Bailey v. State, 348 N.C. 130, 141 (1998). The trial court granted summary

       judgment in plaintiffs’ favor on all three of these inquiries. The Court of Appeals

       reversed the trial court’s grant of summary judgment, ruling in the State’s favor on

       the first inquiry that no contractual obligation was present. Lake v. State Health Plan

       for Tchrs. & State Emps., 264 N.C. App. 174, 188 (2019). Based on the evidence the

       parties have put forward, I cannot conclude that either court properly resolved, at the

       summary judgment stage, the issue of whether a contractual obligation was present.
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                           Barringer, J., concurring in part and dissenting in part

       A. Standard of Review

¶ 74                        When there is a motion for summary judgment
                     pursuant to Rule 56, the court may consider evidence
                     consisting of admissions in the pleadings, depositions,
                     answers to interrogatories, affidavits, admissions on file,
                     oral testimony, and documentary materials. . . . The
                     motion shall be allowed and judgment entered when such
                     evidence reveals no genuine issue as to any material fact,
                     and when the moving party is entitled to a judgment as a
                     matter of law.

                            An issue is material if the facts alleged would
                     constitute a legal defense, or would affect the result of the
                     action, or if its resolution would prevent the party against
                     whom it is resolved from prevailing in the action. The issue
                     is denominated “genuine” if it may be maintained by
                     substantial evidence.

                            Summary judgment provides a drastic remedy and
                     should be cautiously used so that no one will be deprived of
                     a trial on a genuine, disputed issue of fact. The moving
                     party has the burden of clearly establishing the lack of
                     triable issue, and his papers are carefully scrutinized and
                     those of the opposing party are indulgently regarded.

       Koontz v. City of Winston-Salem, 280 N.C. 513, 518 (1972); see also N.C. R. Civ. P.

       56(c).

¶ 75            “This Court reviews appeals from summary judgment de novo.” Ussery v.

       Branch Banking & Tr. Co., 368 N.C. 325, 334–35 (2015). “When considering a motion

       for summary judgment, the trial judge must view the presented evidence in a light

       most favorable to the nonmoving party.” Dalton v. Camp, 353 N.C. 647, 651 (2001).

       “[I]f a review of the record leads the appellate court to conclude that the trial judge
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                                               2022-NCSC-22

                           Barringer, J., concurring in part and dissenting in part

       was resolving material issues of fact rather than deciding whether they existed, the

       entry of summary judgment is held erroneous.” Alford v. Shaw, 327 N.C. 526, 539

       (1990).

       B. Whether a contractual obligation is present

¶ 76         I agree with the majority that the statute does not expressly indicate an intent

       to create a contractual obligation. Yet, under our past precedent, plaintiffs can still

       establish that a contractual obligation is present if plaintiffs demonstrate that they

       reasonably relied upon the promise of retirement benefits provided by statute in

       entering into or continuing employment with the State. Bailey, 348 N.C. at 145.

       However, plaintiffs’ reliance must have been reasonable, and reasonableness is a

       question of fact. Id. at 146; see also Olivetti Corp. v. Ames Bus. Sys., Inc., 319 N.C.

       534, 544 (1987) (“Ordinarily, the question of whether an actor is reasonable in relying

       on the representations of another is a matter for the finder of fact.”).

¶ 77         As evidence of the reasonableness of their reliance, plaintiffs primarily point

       to booklets distributed by the North Carolina Retirement System. However, multiple

       booklets contained explicit disclaimers, in boldface type, on the first page that stated:

                          DISCLAIMER: The availability and amount of all
                    benefits you might be eligible to receive is governed by
                    Retirement System law. The information provided in this
                    handbook cannot alter, modify or otherwise change the
                    controlling Retirement System law or other governing legal
                    documents in any way, nor can any right accrue to you by
                    reason of any information provided or omission of
                    information provided herein. In the event of a conflict
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                                              2022-NCSC-22

                          Barringer, J., concurring in part and dissenting in part

                    between this information and Retirement System law,
                    Retirement System law governs.

       (Emphasis added.) Recent booklets, like the one dated 2009, described themselves as

       “summariz[ing] the benefits available to [employees] as a member of the retirement

       system, including: [b]enefits [employees] will receive at retirement once [they] meet

       the service and age requirements . . . .]” The 2009 booklet further explained that a

       public employee in North Carolina was part of a “defined benefit plan,” meaning that

       when a public employee retired the employee’s “life long benefits [we]re guaranteed

       and protected by the Constitution of the State of North Carolina.” The booklets also

       indicated that after satisfying certain criteria an employee became “vested in the

       Retirement System,” making that employee “eligible to apply to lifetime monthly

       retirement benefits.” This emphatic language, however, was referring to Retirement

       System benefits in general, as opposed to the State Health Plan.

¶ 78         When discussing the State Health Plan for retirees, the booklets used different

       language. The booklets stated only that employees “may also be eligible for retiree

       health coverage as described on page 20.” (Emphasis added.) On page 20, the booklets

       stated:

                           When you retire, you are eligible to enroll in the
                    State Health Plan, with the costs determined by when you
                    began employment and which health coverage you select,
                    if you contributed to the Teachers’ and State Employees’
                    Retirement System for at least five years . . . while
                    employed as a teacher or State employee.
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                                              2022-NCSC-22

                          Barringer, J., concurring in part and dissenting in part

                           At the time you complete your retirement
                    application, be sure to complete an application to enroll in
                    the retiree group of the State Health Plan.

                           Under current law, if you were first hired prior to
                    October 1, 2006, and retire with five or more years of State
                    System membership service, the State will pay either all or
                    most of the cost, depending on the plan chosen, for your
                    individual coverage under one of the Preferred Provider
                    Organization (PPO) plans. . . .

       (Emphasis omitted.) Accordingly, the description of benefits was expressly recognized

       as conditional and further conditioned as representing the state of health benefits as

       they existed “[u]nder current law.” In addition, the booklets described pensions as

       “continu[ing] for the rest of [one’s] life” and “vested” but did not use the same

       language to describe health benefits.

¶ 79         Similarly, in older booklets, the language used to describe retirement benefits

       was not the same as the language used to describe retiree health insurance. The 1988

       retirement booklet did not mention the State Health Plan until the very last section,

       labeled “Remember,” which also discussed programs like Social Security and

       Medicare. Specifically, the booklet stated, “When you retire, if you have at least 5

       years of service as a contributing teacher or State employee, you are eligible for

       coverage under the State’s Comprehensive Major Medical Plan with the State

       contributing toward the cost of your coverage.” (Emphasis omitted.)

¶ 80         Furthermore, the booklets distributed by the State Health Plan to employees

       explicitly stated on the first or second page that “[t]he North Carolina General
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                                               2022-NCSC-22

                           Barringer, J., concurring in part and dissenting in part

       Assembly determines benefits for the State Health Plan and has the authority to

       change benefits.” The 1983 booklet warned that “[s]ince the Plan was established by

       law, benefits and policies can be changed only through new legislation.” The 1986

       booklet cautioned that “the level of benefits and claims service have varied from time

       to time” and that “[g]iven the continued rise in health care costs and utilization (some

       12% to 14% a year in this plan alone!) further benefit changes may be necessary.” The

       2004 booklet included a boldface type section which stated that the “Benefits for the

       North Carolina Teachers’ and State Employees’ Comprehensive Major Medical Plan

       are based upon legislation enacted by the North Carolina General Assembly.” Finally,

       the booklets repeatedly noted that “[i]f any information in [the booklets] conflict[ed]

       with . . . the General Statutes . . . the General Statutes . . . w[ould] prevail.”

¶ 81          As for the General Statutes, one section contains language noting that the

       State “undertakes to make available a State Health Plan . . . for the benefit of . . .

       eligible retired employees,” but that statement is modified in the same sentence with

       a clause explaining that the plan “will pay benefits in accordance with the terms of

       this Article.” N.C.G.S. § 135-48.2(a) (2021). The very next section of the statute

       contains an explicit disclaimer that the terms of the article are subject to alteration

       and termination, stating, “The General Assembly reserves the right to alter, amend,

       or repeal this Article.” N.C.G.S. § 135-48.3 (2021).

¶ 82          While under our precedent the presence of a right-to-amend provision does not
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                                              2022-NCSC-22

                          Barringer, J., concurring in part and dissenting in part

       necessarily prevent a contractual obligation from arising from a statute, see Simpson

       v. N.C. Loc. Gov’t Emps.’ Ret. Sys., 88 N.C. App. 218, 221, 223–24 (1987), aff’d per

       curiam, 323 N.C. 362 (1988), a right-to-amend provision is relevant to the plaintiffs’

       reasonable reliance. As the Supreme Court of the United States has observed,

       reserving the “rights to repeal, alter, or amend, [an a]ct at any time” is “hardly the

       language of a contract.” Nat’l R.R. Passenger Corp. v. Atchison Topeka & Santa Fe

       Ry. Co., 470 U.S. 451, 467 (1985) (cleaned up).

¶ 83         Further, not only did the General Assembly explicitly reserve the right to alter,

       amend, or repeal the State Health Plan, the undisputed evidence in the record reveals

       that the General Assembly frequently exercised this amendment power. Since the

       inception of the State Health Plan, the State has regularly amended it, raising

       coinsurance amounts from 5% to 10% to 20%, increasing the deductible from $100 to

       $150 to $250 to $350 to $450, and enlarging the out-of-pocket maximum from $100 to

       $300 to $1,000 to $1,500 to $2,000. In the twenty-nine years between 1982 and 2011,

       the record reflects that the General Assembly passed at least twenty-nine bills

       amending the State Health Plan, making almost two hundred individual changes.

¶ 84         In short, when plaintiffs’ evidence is “carefully scrutinized” and the State’s

       evidence is “indulgently regarded,” Koontz, 280 N.C. at 518, and when all inferences

       are drawn in the light most favorable to the State, Dalton, 353 N.C. at 651, there is

       a genuine issue of material fact as to plaintiffs’ reasonable reliance. The record does
                                     LAKE V. STATE HEALTH PLAN

                                               2022-NCSC-22

                           Barringer, J., concurring in part and dissenting in part

       not evidence “multiple unequivocal written statements in official publications and

       employee handbooks” promising plaintiffs lifetime noncontributory health insurance

       in exchange for their public service as state employees. Bailey, 348 N.C. at 138, 146.

       While certainly some materials supporting plaintiffs’ position exist, plaintiffs must

       also admit the existence of other materials that directly contradict the reasonableness

       of their reliance. When the entirety of the record is viewed in the light most favorable

       to the State, the right-to-amend provision, the disclaimers in the booklets, and the

       constant statutory changes are substantial evidence that could support a finding that

       plaintiffs did not reasonably rely on a promise of health benefits provided by statute

       in entering into or continuing employment with the State.

¶ 85         Additionally, as part of the determination of whether a contractual obligation

       exists, the fact-finder must also determine what the terms of a contractual obligation

       produced by plaintiffs reasonable reliance would be. On appeal, the plaintiffs asked

       this Court to reinstate the term of the contractual obligation found by the trial court;

       namely, a contract for “the 80/20 ‘Enhanced’ Plan (as offered by the State Health Plan

       in September 2011), or its Equivalent, premium-free to all non-Medicare-eligible

       Class Members for the duration of their retirements.” The majority, however, now

       recognizes a different contractual obligation, one that requires the State to provide a

       health plan of “equivalent or greater value to the one offered” at the time each

       individual plaintiff “met the applicable statutory eligibility requirements and became
                                     LAKE V. STATE HEALTH PLAN

                                               2022-NCSC-22

                           Barringer, J., concurring in part and dissenting in part

       eligible to enroll in a noncontributory health insurance plan.” Yet for the entirety of

       the State Health Plan’s thirty-year existence, retirees have never received a health

       plan at a locked-in, unchanging value. Rather, retirees received whatever plan the

       State was then offering to current employees, which varied from year to year. Given

       this constant variance, the question of what terms would attach to a contractual

       obligation arising out of plaintiffs’ reasonable reliance is also a genuine issue of

       material fact, one that the fact-finder should resolve in this case.

                                               Conclusion

¶ 86         In adherence to this Court’s admonition that summary judgment should be

       “used cautiously . . . so that no one will be deprived of a trial on a genuine, disputed

       issue of fact,” Koontz, 280 N.C. at 518, I have no choice but to conclude that this case

       should be remanded to the fact-finder. Based on the evidence in the record, the

       question of whether a contractual obligation could have arisen through plaintiffs’

       reasonable reliance and what terms would apply to such a contractual obligation is a

       genuine issue of material fact. Accordingly, I would remand that issue to the trial

       court for further proceedings not inconsistent with this opinion. Otherwise, I concur

       in the majority’s opinion.

             Justice BERGER joins in this concurring in part and dissenting in part

       opinion.