Court Opinion

ID: 4085383
Source: CourtListenerOpinion
Date Created: 2016-10-08 00:00:12.476725+00
Date Added: 2024-06-11T14:35:05.045291
License: Public Domain

SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department
1250
CA 12-00171
PRESENT: SCUDDER, P.J., SMITH, CENTRA, LINDLEY, AND WHALEN, JJ.

HERBERT KOLBE, LYNNE NICHOLAS, JOANN SEEFELDT
AND PHYLLIS HARRIS, PLAINTIFFS-RESPONDENTS,

                    V                             MEMORANDUM AND ORDER

CHRISTINE J. TIBBETTS, AS SUPERINTENDENT OF
SCHOOLS OF NEWFANE CENTRAL SCHOOL DISTRICT,
JAMES REINEKE, AS PRESIDENT OF NEWFANE BOARD
OF EDUCATION, NEWFANE BOARD OF EDUCATION AND
NEWFANE CENTRAL SCHOOL DISTRICT,
DEFENDANTS-APPELLANTS.

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

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

     Appeal from a judgment (denominated judgment and order) of the
Supreme Court, Niagara County (Catherine R. Nugent Panepinto, J.),
entered October 18, 2011. The judgment, inter alia, granted the
motion of plaintiffs for summary judgment and denied the cross motion
of defendants for summary judgment.

     It is hereby ORDERED that the judgment so appealed from is
reversed on the law without costs, the motion is denied, the cross
motion is granted, the third through sixth decretal paragraphs are
vacated, and judgment is granted in favor of defendants as follows:

          It is ADJUDGED AND DECLARED that defendants are not
     obligated to maintain health insurance coverage equivalent
     to that in effect at the time each plaintiff retired.

     Memorandum: Plaintiffs, retirees of defendant Newfane Central
School District (District), commenced this breach of
contract/declaratory judgment action seeking, inter alia, a
declaration that their rights with respect to health insurance
benefits are governed by each collective bargaining agreement (CBA)
that was in effect at the time each plaintiff retired. Supreme Court
granted plaintiffs’ motion seeking summary judgment and denied
defendants’ cross motion for summary judgment.

     Each CBA in effect at the time of plaintiffs’ respective
retirements set forth a nominal copay for prescriptions in accordance
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                                                         CA 12-00171

with the health care plan that was in effect at that time. In
December 2009, each plaintiff was notified that, pursuant to the CBA
effective January 1, 2010, the copay for prescriptions would be
significantly increased. Plaintiffs alleged in their complaint that
they are not obligated to pay the higher rate but, rather, are
obligated to pay only the rate that was in effect at the time of their
respective retirements.

     The language at issue is contained in section 6.5. of each CBA,
and that section is entitled “Retirement Benefits.” In each CBA,
section 6.5.3 provides in relevant part that full-time employees who
retire from the District under the New York State Employees’
Retirement System may receive credit for group health insurance
premiums based on accumulated sick leave. In the CBAs in effect from
1990 through 1994 and 1994 through 1996, the language at issue states
that “[t]he coverage provided shall be the coverage which is in effect
for the unit at such time as it is provided to the employee.” In the
subsequent CBAs, the language at issue states that “[t]he coverage
provided shall be the coverage which is in effect for the unit at such
time as the employee retires.” Section 6.4 in each of the CBAs
provides that retired employees shall be eligible to “continue group
health insurance” upon the payment of a monthly premium to the
District. Section 6.4 also sets forth the health plans available to
the employees covered by the respective CBAs.

     We agree with defendants that the court erred in determining that
the unequivocal language of the respective CBAs required that the
prescription copay amount set forth in section 6.4 could not be
altered based upon the language in section 6.5.3, providing that
unused sick leave could be used to pay for health care coverage. The
unambiguous language in section 6.5.3 provides that, at the time of
his or her retirement, the retiree is entitled to the same coverage
that is provided to the bargaining unit. The language does not
specify that an equivalent level of coverage will continue during
retirement (cf. Williams v Village of Endicott, 91 AD3d 1160, 1161;
Della Rocco v City of Schenectady, 252 AD2d 82, 84, lv dismissed 93
NY2d 1000; see generally Hudock v Village of Endicott, 28 AD3d 923,
923). In Williams (91 AD3d at 1161), the CBA provided that the
defendant “ ‘shall keep in full force and effect medical coverage and
hospital coverage for each member of the bargaining unit, with
benefits to be of a value at least equivalent to those presently in
force’ ” (emphasis added). In Della Rocco (252 AD2d at 84), the CBA
provided that the defendant “would provide insurance coverage
‘equivalent to the plan presently in effect for each member of the
Department and his [or her] family, and for retired members and their
families’ ” (emphasis added). In Hudock (28 AD3d at 923), the CBA
provided that the annual cost toward the premium would remain the
same. Here, the respective CBAs do not provide that the level of
health coverage will not be reduced or that the annual cost will not
increase.

     Inasmuch as the benefits for represented employees were likewise
reduced, defendants have complied with the statutory requirement that
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                                                         CA 12-00171

they not reduce plaintiffs’ coverage below the level of coverage
provided to active employees (see L 1994, ch 729, as extended by L
2009, ch 30). In light of our determination, we need not address
defendants’ remaining contentions.

     All concur except LINDLEY and WHALEN, JJ., who dissent and vote to
modify in accordance with the following Memorandum: We respectfully
dissent. We disagree with the majority’s determination that the
language in section 6.5.3 of each collective bargaining agreement
(CBA) is unambiguous. The relevant language of that section provides
that full-time employees who retire from defendant Newfane Central
School District (District) under the New York State Employees’
Retirement System plan shall be entitled to credit toward group health
insurance premiums for accumulated sick leave. That section further
provides that, in the event of the retiree’s death, the benefit shall
transfer to the surviving spouse. As noted by the majority, one
version of the CBA states that “[t]he coverage provided shall be the
coverage which is in effect for the unit at such time as it is
provided to the employee,” while the other version states that “[t]he
coverage provided shall be the coverage which is in effect for the
unit at such time as the employee retires.” The language in section
6.5.3 regarding the level of coverage for retirees conflicts with
language found in section 6.4 of the CBA. Section 6.4 provides that
retired employees shall be eligible to “continue group health
insurance” upon payment of a monthly premium to the District. In
section 6.5.3, the word “benefit” is used to describe the sick-leave
accrual and the word “coverage” is used to describe the particular
plan, or health insurance. The words “benefit” and “coverage” may
have been included in the same paragraph in order to distinguish
between the two words and to establish different rights for retirees.
Section 6.5.3 may have given retirees additional rights to health
insurance coverage in addition to those provided in section 6.4. “ ‘A
contract is ambiguous if the language used lacks a definite and
precise meaning, and there is a reasonable basis for a difference of
opinion’ ” (Williams v Village of Endicott, 91 AD3d 1160, 1162).
Given the conflict between section 6.5.3 and section 6.4, we believe
that an ambiguity exists. We have held that, “[i]n the event that a
contract is ambiguous, its interpretation is still a matter for the
court unless ‘determination of the intent of the parties depends on
the credibility of extrinsic evidence or on a choice among reasonable
inferences to be drawn from extrinsic evidence’ ” (Destiny USA
Holdings, LLC v Citigroup Global Mkts. Realty Corp., 69 AD3d 212, 218,
quoting Hartford Acc. & Indem. Co. v Wesolowski, 33 NY2d 169, 172).
The parties submitted conflicting evidence regarding the intended
meaning of the provisions at issue here, and a determination as to
such intended meaning cannot be made absent additional extrinsic
evidence. We therefore conclude that the matter should be remitted to
Supreme Court for a hearing at which parol evidence may be presented
to establish the parties’ intent.

Entered:   December 21, 2012                    Frances E. Cafarell
                                                Clerk of the Court