Court Opinion

ID: 2711561
Source: CourtListenerOpinion
Date Created: 2014-08-05 20:08:45.510129+00
Date Added: 2024-06-11T13:10:43.004701
License: Public Domain

No. 16	                         April 11, 2013	431

               IN THE SUPREME COURT OF THE
                     STATE OF OREGON

                         Neil JAMES,
                     Petitioner on Review,
                               v.
                  CLACKAMAS COUNTY,
                Jon Montay (official capacity),
                Nancy Drury (official capacity),
              Martha Schrader (official capacity),
               Lynn Peterson (official capacity),
             and Bill Kennemer (official capacity),
                   Respondents on Review.
          (CC CV07040292; CA A143772; SC S059680)

    On review from the Court of Appeals.*
  Argued and submitted May 1, 2012; resubmitted January 7,
2013.
   Thomas K. Doyle of Bennett Hartman Morris & Kaplan,
Portland, argued the cause and filed the brief for petitioner
on review.
   Susan D. Marmaduke of Harrang Long Gary Rudnick
P.C., Portland, argued the cause and filed the brief for
respondents on review. With her on the brief were Jona J.
Maukonen and John Cathcart Rake
  Before Balmer, Chief Justice, and Kistler, Walters, Linder,
Brewer, and Baldwin, Justices.**
    BALMER, C. J.
   The decision of the Court of Appeals is affirmed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.

______________
	**  Appeal from the limited judgment dated October 9, 2009, of the Clackamas
County Circuit Court, Eve L. Miller, Judge. 243 Or App 453, 259 P3d 995 (2011).
	   **  Landau, J., did not participate in the consideration or decision of this case.
432	                                          James v. Clackamas County

     Plaintiff was a long-time employee of the Clackamas County Sheriff ’s Office.
A contract between the county and Sheriff ’s Office command officer employees
(including plaintiff) required the county to use a particular fund to pay for a
certain level of health insurance benefits to those employees after they retired. The
contract added, however, that the obligation to pay benefits was “contingent upon
the availability of sufficient funding in said fund to pay for the same.” After plaintiff
retired, the cost of health insurance premiums increased to the point where the
fund was and would for the foreseeable future continue to be insufficient to pay
for the benefits required. The county entered into a new contract with certain
union employees to provide lesser benefits from a more stable fund, and plaintiff
(a retired officer, not a union employee) also was provided those lesser benefits.
Plaintiff brought an action against the county, asserting (among other claims)
breach of contract. He maintained that the first contract required the county to
pay him full health insurance benefits and argued that the contingency provision
did not apply because of the creation of the new fund, which had sufficient money
to pay for those benefits. The trial court entered judgment in favor of plaintiff,
but the Court of Appeals reversed. Held: (1) The new fund is not “said fund” for
purposes of the contingency provision in the original contract; (2) the new fund
is the product of a contract that is separate and independent from the earlier
contract; and (3) because the prior fund was insufficient to provide the agreed level
of benefits, the county did not breach its contractual obligation to provide that
level of benefits. The decision of the Court of Appeals is affirmed.
    The judgment of the circuit court is reversed, and the case is remanded to the
circuit court for further proceedings.
Cite as 353 Or 431 (2013)	433

	        BALMER, C. J.
	        This case concerns the scope of Clackamas County’s
contractual obligation to provide health insurance benefits to
command officer retirees of the Clackamas County Sheriff’s
Office. A contract between the county and command officers,
including plaintiff, Neil James, required the county to use a
particular fund to pay for a certain level of health insurance
benefits to command officers after they retired. The contract
added, however, that the obligation to pay benefits was
“contingent upon the availability of sufficient funding in
said fund to pay for the same.” After plaintiff retired, the cost
of health insurance premiums increased to the point where
the fund was and would for the foreseeable future continue
to be insufficient to pay for the benefits required. The county
entered into a new contract with certain union employees
to provide lesser benefits from a more stable fund, and
plaintiff (a retired officer, not a union employee) also was
provided those lesser benefits. Plaintiff brought an action
against the county, asserting (among other claims) breach
of contract. He maintained that the first contract required
the county to pay him full health insurance benefits and
argued that the contingency provision did not apply because
of the creation of the new fund, which had sufficient money
to pay for those benefits. The trial court entered judgment in
favor of plaintiff, but the Court of Appeals reversed. James
v. Clackamas County, 243 Or App 453, 259 P3d 995 (2011).
On review, we conclude that the new fund is the product of
a contract that is separate and independent from the earlier
contract. Because the prior fund was insufficient to provide
the agreed level of benefits, the county did not breach its
contractual obligation to provide that level of benefits.
Accordingly, we affirm the decision of the Court of Appeals.
	        We take the facts from the trial court’s findings and
from the uncontroverted evidence and concessions by the
parties at trial. We construe all facts in favor of plaintiff
as the prevailing party. See ORCP 62 F (“In an action tried
without a jury, except as provided in ORS 19.415(3), the
findings of the court upon the facts shall have the same
force and effect, and be equally conclusive, as the verdict
of a jury.”); Jacobs v. Tidewater Barge Lines, 277 Or 809,
811, 562 P2d 545 (1977) (“We are required to accept as being
434	                                    James v. Clackamas County

true all evidence and inferences therefrom in the light most
favorable to the party who prevailed before the jury.”).
	        Plaintiff was a long-time employee of the Clackamas
County Sheriff’s Office who retired in 1999 after 25 years of
service. He began working for the Sheriff’s Office as a “rank-
and-file” employee, first as a deputy, then as a sergeant. In
1988, plaintiff was promoted to lieutenant, a position in the
Sheriff’s command staff.
	        In the early 1980s, the county and the union
representing the rank-and-file employees of the Sheriff ’s
Office negotiated a contract to provide health insurance
benefits to members of the collective bargaining unit—the
rank-and-file employees—from the time they retired until
they qualified for Medicare. An employee would be entitled
to those benefits only if he or she retired as a member of the
bargaining unit. The benefits would be paid for from a fund
created by county contributions (the Peace Officers Fund).
	        Command officers, who were not represented by
the union, had no similar retirement benefit. Because
most command officers were hired from the rank-and-file
employees, that discrepancy discouraged regular employees
from accepting command positions. To make command
positions more attractive to rank-and-file employees, the
Board of County Commissioners (board) undertook to
provide similar post-retirement and pre-Medicare health
insurance benefits to command officer retirees.
	        The terms and conditions of the county’s obligation
to pay those benefits were established by a 1985 order by
the board. The board order stated that it was creating “the
Medical Benefits Trust Fund for Sheriff ’s Management
Groups I and II Retirees *  * subject to the rules and
                                * 
regulations on the attachment.” We follow the parties’
convention and refer to that fund as the Command Officers
Fund. The rules and regulations referred to in the board
order provided that retirees would receive health insurance
benefits equivalent to what they had had while employed.1

	   1
       Specifically, the rules and regulations state:
    	 “1. [Qualifying retirees] shall, upon retirement *  *, have provided to
                                                            * 
    them and their eligible dependents the same medical plan they held when
    they retired, until employees become eligible for Medicare benefits.”
Cite as 353 Or 431 (2013)	435

Those benefits would be paid for by the Command Officers
Fund and financed by the county regularly paying into the
fund an amount equal to one percent of the compensation
being paid to current command officers.2
	        The county’s obligation to provide those health
insurance benefits, however, was expressly contingent on the
availability of sufficient funds to pay for them. Specifically,
the relevant provision of the rules and regulations states:
    	 “5. The County shall keep those funds as a separate
    fund for the purpose of funding the benefits described * * *.
    It is understood that said benefits are contingent upon the
    availability of sufficient funding in said fund to pay for the
    same.”
(Emphasis added.) The parties agree that the 1985 order
became a binding contract with those command officers who
retired under its provisions.3
	        As early as 1989, the increased cost of health
insurance created budgetary problems for the Command
Officers Fund. By board order, the county temporarily
increased the amount that it contributed to the Command
Officers Fund to four percent of compensation for two
months and permanently increased the contribution rate to
three percent. At trial, the county conceded that the 1989
board order increasing contributions modified the original
1985 contract.
	        As noted, plaintiff retired in 1999. At the time of
his retirement, he was not required to pay any premiums
for his health insurance benefits; the premiums were paid
entirely by the Command Officers Fund pursuant to the
1985 contract, as modified by the 1989 order.
	        Shortly after plaintiff retired, the cost of health
insurance benefits for the Command Officers Fund and
the Peace Officers Fund began to skyrocket. Between fiscal

	   2
        The relevant provision of the rules and regulations states:
    	 “4. The trust fund is funded by the Sheriff ’s Department budget at the
    rate of one percent (1%) of the covered Sheriff’s members’ compensation.”
	   3
        Because the parties have agreed that the 1985 order constituted a binding
and enforceable contract, we express no view as to whether we agree or disagree
with that conclusion or whether the county had the authority unilaterally to
change or modify its terms.
436	                              James v. Clackamas County

year 2000-2001 and fiscal year 2003-2004, costs necessary
to provide benefits for command officer retirees more
than doubled, increasing from $51,000 to $107,000. Those
increases outstripped the three-percent contribution being
made by the county. By the beginning of the 2003-2004 fiscal
year, the Command Officers Fund had a balance of less than
$44,000, down from $126,421 just three years earlier.
	       Because of increasing costs, unless the county
increased its contribution level above the amount set in
the 1989 order, the Command Officers Fund would have
been unable to pay benefits in February 2004. The county
authorized a one-time payment of an additional $83,630 into
the fund in addition to its three-percent contribution. Even
that extra infusion was insufficient, however. By March
2005, the balance in the Command Officers Fund was only
$4,000, which was not sufficient to pay the premium for that
month’s benefits.
	        At that point, given the terms of the order establishing
the Command Officers Fund, there was no prospect that the
fund would be sufficient to pay for the required benefits in
the foreseeable future. A 2004 actuarial study of the fund
concluded that, to maintain a balance in the fund sufficient
to provide the required level of benefits for 10 years, the
county would have to more than double its three-percent
contribution rate and pay into the fund an annual amount
equal to 7.89 percent of command officer payroll.
	        There were multiple causes of the financial
problems with the Command Officers Fund. We have already
noted one: the steadily increasing cost of health insurance
benefits. Another problem, however, was the separation
between the Command Officers Fund and the Peace Officers
Fund. Most of the command officers began as rank-and-file
employees, so most of the contributions that the county had
made on their behalf during their careers had been paid
into the Peace Officers Fund. Those contributions, however,
were not transferred to the Command Officers Fund when
the employee was promoted. At the same time, county
contributions into the Command Officers Fund were limited
because they generally occurred only in the last few years of
an officer’s service.
Cite as 353 Or 431 (2013)	437

	        There also were financial problems with the Peace
Officers Fund, although they were not as severe. Accordingly,
the county and the union began negotiations to change
the financing of both funds and the insurance benefits
provided in order to make both funds more stable and to
continue to provide health insurance benefits to all retirees.
The resulting contract between the county and the union,
entered into in 2005, provided: “The [Command Officers
Fund] and the [Peace Officers Fund] will be combined into
a single fund known as the Sheriff’s Office Retiree Medical
Fund.” The stipulation of facts presented to the trial court
characterized this as “merging the two [f]unds into a new
‘Sheriff’s Office Retiree Medical Fund.’ ” (For brevity, we will
refer to the new fund as the Retiree Medical Fund.)

	        Under the 2005 contract, the county agreed to
increase its contribution for rank and file employees to
2.5 percent of base salary, with contributions for command
officers at the rate of three percent. The county would pay
those amounts into the Retiree Medical Fund, together with
a one-time contribution of $150,000. The contract provided
that all retirees would be able to choose between either the
medical plans then available to active employees (the terms
of which were not identified in the contract itself) or “a new
high deductible plan *  * with $1,000 common deductible.”
                         * 
If a retiree chose the high deductible plan, then the fund
would pay 100 percent of the retiree’s premiums (though not
100 percent of premiums for a spouse or covered children).
If a retiree chose the other plan, then the retiree would be
required to pay a portion of the premiums.

	         The county provided to plaintiff the health
insurance benefits set out in the 2005 contract. Plaintiff did
not choose the high deductible plan. As a result, plaintiff was
required to pay a portion of his health insurance premiums.
Plaintiff’s share of premium payments varied from year to
year: $244.03 per month in late 2005 and 2006, $370.26 per
month in 2007, and $336.58 per month in 2008. During the
period in question, the Retiree Medical Fund had sufficient
money that it could have paid the full health insurance
premiums for plaintiff and other existing command officer
retirees.
438	                                          James v. Clackamas County

	        In April 2007, plaintiff filed an action against the
county and several individual defendants in their official
capacities. Plaintiff’s first amended complaint asserted four
claims for relief: breach of contract, breach of fiduciary duty,
and two separate statutory wage claims. Among other relief,
plaintiff sought damages in the amount of the insurance
premiums that he had paid and requested an injunction
prohibiting defendants from breaching the 1985 contract.
Plaintiff also sought to certify the case as a class action on
behalf of all similarly situated retirees.
	        The trial court held a bench trial on January 21,
2009. After taking the matter under advisement, the court
sent the parties a letter explaining its conclusion that the
county had breached its 1985 contract with plaintiff. In
relevant part, the letter stated:
    	 “*  * [T]he Court concludes [that the county] breached
          * 
    the contract with Plaintiff by failing to pay Plaintiff
    benefits from the Retiree Medical Fund. The merger of
    the [Command Officers Fund] with the [Peace Officers
    Fund] * * * has created one fund that can adequately pay all
    insurance premiums to Plaintiff. Since there are adequate
    funds available in the merged fund, the County can fulfill
    its contract with Plaintiff.”
The trial court found it unnecessary to decide the claim for
breach of fiduciary duty. In October 2009, the court entered
a limited judgment in favor of plaintiff, memorializing its
decision.4
	        The county appealed to the Court of Appeals. The
county argued that its obligation to provide retirement
benefits to command officers under the 1985 contract was,
pursuant to the terms of the 1985 order and the applicable
rules and regulations, contingent on the availability of
funds in “said fund.” Because the Command Officers
Fund was entirely depleted, the county maintained that it
	    4
         Although the trial court’s letter announcing its ruling referred only to breach
of contract, the limited judgment ruled in favor of plaintiff both on the breach-of-
contract claim and one of the statutory wage claims (under ORS 652.610). No party
asserts on review that the statutory wage claim provides any independent basis
for upholding the limited judgment, and both parties conceded below (plaintiff in
the trial court, the county in the Court of Appeals) that the wage claim depended
on the breach-of-contract claim. Accordingly, we do not consider the statutory wage
claim separately.
Cite as 353 Or 431 (2013)	439

had been relieved of its obligation to provide the level of
health insurance benefits otherwise required by the 1985
contract. The county argued that the trial court had erred in
concluding that the Retiree Medical Fund counted as “said
fund” for purposes of the contingency provision in the 1985
contract.
	        Plaintiff agreed that the critical question was what
“said fund” meant under the terms of the 1985 contract.
Because the Retiree Medical Fund resulted from a merger
of the Command Officers Fund and the Peace Officers Fund,
plaintiff asserted that the contingency provision in the 1985
contract referred to the Retiree Medical Fund. For that
reason, plaintiff maintained, the contingency provision did
not relieve the county of its obligation to provide the full
level of benefits required by the 1985 contract.
	        The Court of Appeals agreed with the county. The
court noted that the contingency provision in the 1985
order unambiguously referred to “said fund,” which could
only refer to the Command Officers Fund created by that
order. James, 243 Or App at 462. The Retiree Medical
Fund did not exist when the 1985 order had been drafted,
so it could not have been the “said fund” referred to by the
contingency provision. Id. The insolvency of the Command
Officers Fund meant that “the county’s obligation to provide
benefits on the same terms ended,” and so “the Command
Officers Fund no longer exists.” Id. at 462-63. Furthermore,
the parties’ stipulation of facts specifically recognized that
the Retiree Medical Fund, although the product of a merger
of the Command Officers Fund and the Peace Officers
Fund, was a “new fund.” Id. at 463. For those reasons, the
Court of Appeals concluded that the contingency provision
had relieved the county of its obligation to pay the benefits
prescribed by the 1985 contract and, accordingly, the trial
court had erred in concluding that the county breached
its contract by not paying the full coverage that plaintiff
had under the Command Officers Fund out of the Retiree
Medical Fund. Id.
	       On review, plaintiff challenges the Court of Appeals
decision and presents two issues. First, plaintiff asserts that
the Court of Appeals erred in holding that any triggering of
440	                             James v. Clackamas County

the contingency provision terminated the county’s obligation
to pay benefits. Even if the Command Officers Fund was
briefly insolvent, plaintiff maintains, the county’s obligation
to provide 1985-level health insurance benefits was merely
suspended; it resumed when the county created the Retiree
Medical Fund. Second, plaintiff renews his contention that
the Retiree Medical Fund qualifies as “said fund” for the
purpose of evaluating whether the insufficient funding
contingency provided for by the 1985 contract has been met.
Because the trial court found that the Retiree Medical Fund
contained enough money to pay 1985-level health insurance
benefits to plaintiff (and similarly situated command officer
retirees), he asserts, the trial court correctly concluded that
the county had breached its contract.
	        Unless plaintiff is correct that the Retiree Medical
Fund qualifies as “said fund” for purposes of the contingency
provision of the 1985 contract, there is no need for us to reach
plaintiff’s first issue. Even if the insolvency of the Command
Officers Fund suspended rather than terminated the
contractual obligation, as plaintiff asserts, the undisputed
facts at trial demonstrated that, by 2005, the Command
Officers Fund was insufficient to pay the benefits provided
for in the 1985 contract and that that insufficiency would
continue indefinitely into the future. Unless the Retiree
Medical Fund qualifies as the fund from which the 1985
contract benefits should be paid, the county did not breach
its contractual obligation to pay 1985-level benefits; there
was not sufficient funding in the Command Officers Fund
to pay 1985-level benefits. Accordingly, we begin with the
second question: whether “said fund” in the contingency
provision of the 1985 contract refers to the Retiree Medical
Fund.
	        Plaintiff’s primary argument that “said fund” in the
1985 contract refers to the Retiree Medical Fund is based on
an alleged concession by the county. Plaintiff maintains that
the county conceded in the trial court that it had modified
the contract in 2005 to make “said fund” refer to the Retiree
Medical Fund. That argument relies entirely on a statement
in a post-trial brief in which the county noted that a board
order can be modified only by action of the board. The
county went on to assert that the board had modified its
Cite as 353 Or 431 (2013)	441

1985 order just twice: in 1989 when the board increased
its contribution to the Command Officers Fund, and “again
in 2004 [sic] when it merged the [C]ommand and [P]eace
[O]fficer [F]unds.”5
	        Plaintiff, however, takes that statement out of
context. Although the county acknowledged adopting new
board orders in 1989 and 2005 that affected retiree health
benefits, the county did not concede that the board had
modified the contract.6 Moreover, plaintiff does not explain
why we should ignore his own concession, made in the
stipulation of facts, that the two merged funds constituted
a “new” fund. The resolution of this case requires us to
interpret the contracts at issue, not simply to pick and
choose among those competing alleged “concessions.”
	        In interpreting a contract, we seek to implement
the intent of the parties to the contract by considering the
contract terms in their context. Anderson v. Jensen Racing,
Inc., 324 Or 570, 575-76, 931 P2d 763 (1997) (citing cases).
Specifically, we first consider the text of the contractual
provision at issue in the context of the contract as a whole.

	    5
        The paragraph relied on by plaintiff reads as follows (italicized sentences
mark portion quoted by plaintiff):
     	    “Plaintiff argues that after he entered the command staff the contract was
     modified by the actions and statements of county employees so as to impose
     upon the county the obligation to provide benefits regardless of the balance in
     the fund. Such is not the case. Plaintiff is charged with the knowledge of the
     content of the Board order. An order of the Board of Commissioners can only
     be modif[ied] by action of the Board. This was done in 1989 when the Board
     increased the amount to be paid into the command officer fund. It was done
     again in 2004 [sic] when it merged the command and peace officer funds. At
     no other time has the Board taken such action. He could not reasonably rely
     upon any statements or actions of county employees that were contrary to the
     express terms of the order.”
	    6
        The county made the statement at issue, quoted above, in the context of
challenging plaintiff’s assertion that the county’s employees had modified the
contract by their representations to him. The assertion that only the board could
modify its prior orders is not the same thing as a concession that the board had
modified its contract with plaintiff. See Bennett v. Farmers Ins. Co., 332 Or 138,
148, 26 P3d 785 (2001) (modification of contract requires both mutual assent and
consideration). Furthermore, context undermines the meaning that plaintiff seeks
to attribute to the statement. In the same post-trial brief, the county specifically
disputed plaintiff’s claim that the Retiree Medical Fund had been substituted for
the Command Officers Fund under the terms of the 1985 contract. “The new fund
is not the old fund in different dress, but a totally new contract offered to deput[ies]
and command staff as substitute performance when the purpose of the old contract
could no longer be met.”
442	                                        James v. Clackamas County

Yogman v. Parrott, 325 Or 358, 361, 937 P2d 1019 (1997).
“If the [meaning of the disputed] provision is clear, the
analysis ends.” Id.7 The interpretive issue in this case is the
meaning of the term “said fund” as used in the contingency
provision of the 1985 contract. We quote again the text of
the contingency provision at issue here:
    “It is understood that said benefits are contingent upon the
    availability of sufficient funding in said fund to pay for the
    same.”
	        Plaintiff essentially contends that “said fund”
means any fund from which the county pays health
insurance benefits for command officer retirees, such as
plaintiff. We conclude that that interpretation is not correct.
To the contrary, “said fund” refers to the fund described in
the contract created by the 1985 order. That fund consisted
of the original one-percent contribution, plus the later
contributions and changes by the 1989 board order—the
$83,000 one-time contribution, the four-percent contribution
for two months, and the permanent change to a three-
percent contribution. All of those contributions were made
pursuant to the 1985 contract, as modified in 1989.
	        The words “said fund” in the 1985 contract, however,
cannot reasonably be understood to refer to the fund created
by a different contract that did not exist in 1985. The 2005
contract is not between the county and command officers,
as was the 1985 contract. The 2005 contract is between
different parties—between the union and the county—
and the command officers were, at best, only third-party
beneficiaries. The 2005 contract benefits different people
than the 1985 contract—it provides health insurance
benefits primarily to rank-and-file retirees, and command
officer retirees are provided insurance benefits because
the county wanted to provide them with some coverage.
The 2005 contract provides for a different fund from which
benefits will be paid—one that is composed of county

	   7
       The Court of Appeals noted that a higher standard of proof is used to
determine the meaning of a contract created by legislation, but that court found it
unnecessary to decide whether the 1985 contract fell within that classification. See
James, 243 Or App at 460 (discussing cases). That issue has not been presented on
review. Regardless, our disposition also makes it unnecessary for us to reach that
question.
Cite as 353 Or 431 (2013)	443

contributions equal to 2.5 percent of base salary for rank-
and-file employees and three percent for command officer
employees. And the 2005 contract provides for different
health insurance benefits—benefits that are less generous
than those granted by the 1985 contract. Moreover, the 2005
contract contains no express mention of the 1985 contract
or its terms, benefits, or parties, other than a reference to
combining the existing Command Officers Fund and Peace
Officers Fund into a new Sheriff’s Office Retiree Medical
Fund.
	        In short, the 2005 contract was a separate,
independent contract that addressed all necessary
contractual terms. There was no legal basis for the trial
court to conclude that “said fund” under the 1985 contract
referred to a different fund under a different contract
between different parties that provided for different
benefits. The 1985 contract and the 2005 contract each form
separate wholes. The provisions of the contracts are in no
way dependent.
	        Nor can we accept plaintiff’s argument that the
2005 contract modified the 1985 contract to make “said
fund” refer to the new fund created by the 2005 contract. The
modification of an existing contract requires both mutual
assent and consideration. Bennett v. Farmers Ins. Co., 332
Or 138, 148, 26 P3d 785 (2001). Here, the union—the party
that entered into the 2005 contract with the county—was
not a party to the 1985 contract. In addition, nothing in
the 2005 contract indicates any assent by the county or by
the officer retirees to a modification of the 1985 contract.
There is no evidence that either the county or the union
intended for the fund created by the 2005 contract to be
used to provide 1985 levels of health insurance benefits to
current command officer retirees. To the contrary, the 2005
contract contemplates that retirees will receive only the
lesser benefits provided under that contract.
	        In summary, we conclude that the 1985 contract
created a fund to provide insurance benefits to certain
retirees and that it expressly made the obligation to pay
the 1985 level of benefits contingent on the availability of
“sufficient funding in said fund” to provide those benefits.
444	                                         James v. Clackamas County

The source of that “funding,” according to the contract,
was the county’s payment into the fund of one percent of
compensation paid to current command officers, increased
to three percent by the 1989 county board order. By March
2005, the Command Officers Fund did not have sufficient
funds to pay the next month’s insurance premium under the
1985 contract. Because the funding in the Command Officers
Fund was not sufficient to provide the 1985 level of benefits,
the county was not contractually obligated to provide those
benefits. Accordingly, the county’s failure to provide that
level of benefits was not a breach of its contract.8
	        In conclusion, we hold that the 2005 contract is
completely separate from the 1985 contract. Plaintiff does
not claim that the county has breached its obligations under
the 2005 contract. The county did not breach its obligations
under the 1985 contract by failing to provide plaintiff the
health insurance benefits referred to in that contract, and
the trial court erred in concluding otherwise.
	       The decision of the Court of Appeals is affirmed.
The judgment of the circuit court is reversed, and the case
is remanded to the circuit court for further proceedings.

	    8
        For the reasons noted, we need not address plaintiff’s argument that the
inadequacy of the Command Officers Fund merely suspended the obligation to pay
benefits under the 1985 contract without terminating it. Even if plaintiff is correct,
there was no breach of contract in 2005. The event that excused the county from
performing has existed continuously since March 2005. Whether the county has an
obligation to continue to make contributions to the Command Officers Fund and
whether the county could have an obligation to pay benefits from that fund, were
it ever to become sufficient, are questions that are not before us.