An ambiguity in a provision in a collective bargaining agreement may sometimes be resolved by waiving the parol evidence rule
Baff v Board of Educ. of The Fonda-Fultonville Cent. Sch. Dist., 2019 NY Slip Op 01476, Appellate Division, Third Department
Certain retired teachers [Plaintiffs], previously employed by Fonda-Fultonville Central School District
The relevant provisions in the several CBAs provided that Plaintiffs' health insurance benefits would be continue in retirement "on the same basis as they have in the past." In 2013, however, Defendants changed Plaintiffs' health insurance coverage and benefits, resulting in, among things, increased costs and expenses and changes in coverages. Plaintiffs commenced a combined CPLR Article 78 proceeding and declaratory judgment action seeking, among other things, a court order declaring that they were entitled to a continuation of the same health insurance benefits that they had been receiving at the time they retired.
The relevant provisions in the several CBAs provided that Plaintiffs' health insurance benefits would be continue in retirement "on the same basis as they have in the past." In 2013, however, Defendants changed Plaintiffs' health insurance coverage and benefits, resulting in, among things, increased costs and expenses and changes in coverages. Plaintiffs commenced a combined CPLR Article 78 proceeding and declaratory judgment action seeking, among other things, a court order declaring that they were entitled to a continuation of the same health insurance benefits that they had been receiving at the time they retired.
Supreme Court dismissed a number of Plaintiffs' causes of action and only the declaratory judgment and breach of contract causes of action survived. Plaintiffs and Defendants, respectively, moved for summary judgment on these causes of action. Supreme Court denied both Plaintiffs' motion and Defendants' cross motion for summary judgment and they, respectively, appealed and cross-appealed* the court's rulings.
As framed by the Appellate Division, the dispute here centered on the phrase, "on the same basis as they have in the past." Opining that the phrase was "susceptible of different constructions and capable of being understood in more than one sense," and thus it could be viewed as ambiguous, the Appellate Division concluded that it was "a threshold question to be resolved by the court." Accordingly, said the court, "Supreme Court correctly resorted to parol evidence**to resolve the phrase's ambiguity."
Plaintiffs had submitted affidavits attesting "it was understood" that the Defendants would continue to provide the same health insurance benefits that employees had been receiving when they retired until their deaths. Plaintiffs involved in the collective bargaining process also represented that in the course of negotiations [1] "it was understood that the health insurance benefits for retirees would not be limited in any way" and [2] such benefits would "continue for the retirees' respective lifetimes." Further, one of these Plaintiffs stated that "when there was a switch in health providers, such change applied only to current teachers and not to retirees."
On the other hand, a former school superintendent who was involved in the negotiations of the CBAs and a business administrator for the district each submitted affidavits indicating that that [1] the phrase in dispute meant that "the percentage that each plaintiff contributed during his or her last year of teaching would be the same throughout retirement" and [2] that the district was not precluded from changing health plans. The business administrator also stated that there was a prior change resulting in an increased deductible for Plaintiffs and that Plaintiffs had not then objected to that change.
In consideration of these different contentions, the Appellate Division concluded that the record discloses a triable issue of fact as to the parties' intentions regarding Plaintiffs' health insurance coverage during retirement and that Supreme Court's denial of Plaintiffs' motion for summary judgment was proper.
* The Appellate Division noted that although Defendants indicated it was withdrawing its cross motion, the necessary steps had not been taken to formally do so.
** The rule against the use of parol evidence typically prevents the introduction of evidence of prior or contemporaneous negotiations and agreements that contradict, modify, or differ from the contractual terms of a written contract. The Appellate Division held that Supreme Court was correct in not applying the rule in this instance.
The decision is posted on the Internet at: