Eligibility for health insurance benefits provided by the New York State Employees' Health Insurance Program [NYSHIP] upon retirement where there is a lapse in NYSHIP coverage prior to retirement

In 1976 the City of Mount Vernon adopted the following resolution:

"RESOLVED, that the City of Mount Vernon hereby elects to contribute one hundred per cent (100%) of the cost of individual and dependent health insurance coverage as the city's rate of contribution in the New York State Government Employees' Health Insurance Program [NYSHIP] for those employees not members of a negotiating unit who shall retire on and after January 1, 1977."

In 1979, the then-Mayor of the City of Mount Vernon allegedly told the Plaintiff in this action that if she voluntarily left her position at that time she would be eligible to receive full retirement medical benefits when she reached the age of 55, even though she would not continue working for the City.* Plaintiff agreed to the Mayor's proposal and resigned from her position with the City in December 1980. Thereafter Plaintiff did not receive health insurance benefits pursuant to NYSHIP.

Plaintiff was unsuccessful in her subsequently efforts to obtain NYSHIP health insurance coverage upon her retirement at age of 55 as represented by the City's former mayor. Ultimately Supreme Court's dismissed Plaintiff's lawsuits seeking to recover damages from the City for "breach of contract, fraudulent inducement, and fraudulent misrepresentation". Plaintiff appealed the Supreme Court's decision.

The Appellate Division affirmed Supreme Court's ruling, holding that "To the extent that the [Plaintiff] otherwise submitted evidence tending to substantiate her allegation that City officials made verbal and written representations that she would be eligible for retirement health benefits despite her undisputed lapse in coverage, such evidence was insufficient to raise a triable issue of fact, since at best it showed that the City's officials made promises that the City lacked the authority to fulfill."

* See 4 NYCRR 73.2, in general, and 4 NYCRR 73.29(a)(3), in particular, with respect to "Eligibility" for participation in NYSHIP and 4 NYCRR 73.2(e), "Disqualification", with respect to such participation.

The Appellate Division's decision is set out below.

 

Johnson v City of Mount Vernon

2023 NY Slip Op 01502

Decided on March 22, 2023

Appellate Division, Second Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on March 22, 2023 SUPREME COURT OF THE STATE OF NEW YORK Appellate Division, Second Judicial Department
BETSY BARROS, J.P.
VALERIE BRATHWAITE NELSON
CHERYL E. CHAMBERS
LILLIAN WAN, JJ.

2019-13093
(Index No. 51304/15)

Amelia Politi Johnson, appellant,

v

City of Mount Vernon, respondent.

Nancy A. Luongo, Harrison, NY, for appellant.

Coughlin & Gerhart, LLP, Binghamton, NY (Paul J. Sweeney, Steven L. Foss, and Devin M. Dilts of counsel), for respondent.

 

DECISION & ORDER

In an action, inter alia, to recover damages for breach of contract, the plaintiff appeals from an amended order of the Supreme Court, Westchester County (Sam D. Walker, J.), dated October 11, 2019. The amended order, insofar as appealed from, granted those branches of the defendant's motion which were for summary judgment dismissing the causes of action to recover damages for breach of contract, fraudulent inducement, and fraudulent misrepresentation.

ORDERED that the amended order is affirmed insofar as appealed from, with costs.

In June 1969, the plaintiff began working as a nonunion employee for the defendant, City of Mount Vernon. After approximately 10 years, the then-Mayor of the City allegedly told the plaintiff that if she voluntarily left her position at that time she would be eligible to receive full retirement medical benefits when she reached the age of 55, even though she would not continue working for the City. City officials allegedly represented to the plaintiff that she would be eligible for such benefits pursuant to a resolution the City had adopted on November 24, 1976 (hereinafter the 1976 resolution). The 1976 resolution provided: "RESOLVED, that the City of Mount Vernon hereby elects to contribute one hundred per cent (100%) of the cost of individual and dependent health insurance coverage as the city's rate of contribution in the New York State Government Employees' Health Insurance Program for those employees not members of a negotiating unit who shall retire on and after January 1, 1977." The plaintiff agreed to the Mayor's proposal and resigned from her position with the City in December 1980. The plaintiff did not receive medical benefits under the New York State Health Insurance Program (hereinafter NYSHIP) directly or as a dependent at any time after ending her employment with the City.

Upon reaching the age of 55, the plaintiff filed an application for retirement benefits on or about August 15, 2005. However, by letter dated December 11, 2014, the City informed the plaintiff that it had determined that she was not eligible to enroll in NYSHIP as a retiree.

The plaintiff commenced this action against the City and amended the complaint to assert causes of action, among other things, to recover damages for breach of contract, fraudulent inducement, and fraudulent misrepresentation, alleging in essence that the City breached its promise to provide her with postretirement health insurance coverage. The City moved, inter alia, for summary judgment dismissing the breach of contract, fraudulent inducement, and fraudulent misrepresentation causes of action. In an amended order dated October 11, 2019, the Supreme Court, among other things, granted those branches of the motion. The plaintiff appeals.

The Supreme Court properly granted those branches of the City's motion which were for summary judgment dismissing the breach of contract causes of action. The breach of contract causes of action are premised upon the plaintiff's assertion that the 1976 resolution entitled her to retirement health benefits, based on the text of the 1976 resolution and the representations of City officials as to the effect of the 1976 resolution. Resolving the issue of whether the plaintiff is entitled to retirement health benefits "requires examination of the relevant . . . plan documents" (Matter of Parrino v Albertson Water Dist., 118 AD3d 802, 802; see Matter of Consolidated Mut. Ins. Co., 77 NY2d 144, 147). The plain language of those documents, as well as the applicable statutes and regulations, provide for postemployment health insurance benefits only for vested employees who, upon termination of their employment with a participating agency, continue coverage under NYSHIP as an enrollee or a dependent of an enrollee while in vested status with no lapse in NYSHIP coverage (see Retirement and Social Security Law § 2[18]; Civil Service Law § 163[3]; 4 NYCRR 73.1[e]; 73.2[a][3][iv]). The City established, prima facie, that the plaintiff experienced a lapse in coverage and was therefore not eligible for retirement health benefits.

In opposition, the plaintiff failed to raise a triable issue of fact. The plain language of the 1976 resolution does not affect the plaintiff's eligibility for retirement health benefits in the event of a lapse in coverage. To the extent that the plaintiff otherwise submitted evidence tending to substantiate her allegation that City officials made verbal and written representations that she would be eligible for retirement health benefits despite her undisputed lapse in coverage, such evidence was insufficient to raise a triable issue of fact, since at best it showed that the City's officials made promises that the City lacked the authority to fulfill (see Matter of Parrino v Albertson Water Dist., 118 AD3d at 803; Mans Constr. Oversite, Ltd. v City of Peekskill, 114 AD3d 911, 911; International Merchants v Village of Old Field, 203 AD2d 247, 248). Moreover, contrary to the plaintiff's further contention, the doctrine of estoppel is inapplicable (see Matter of Parkview Assoc. v City of New York, 71 NY2d 274, 282; International Merchants v Village of Old Field, 203 AD2d at 248).

The Supreme Court also properly granted that branch of the City's motion which was for summary judgment dismissing the causes of action alleging fraudulent misrepresentation and fraudulent inducement. The City established, prima facie, that the alleged untrue representations underlying those causes of action are the same as those underlying the breach of contract causes of action (see Stangel v Zhi Dan Chen, 74 AD3d 1050, 1052). In opposition, the plaintiff failed to raise a triable issue of fact.

The plaintiff's remaining contentions are either not properly before this Court or without merit.

BARROS, J.P., BRATHWAITE NELSON, CHAMBERS and WAN, JJ., concur.

ENTER:

Maria T. Fasulo

Clerk of the Court

 

An autopsy of an arbitration award

As a rule, where the parties agreed to resolve disputes by submitting the issue to arbitration, courts typically have a "limited role" resolving the dispute. In the instant appeal, however, the Appellate Division observed that "Even with a limited role '[a] court may vacate an [arbitration] award when it violates a strong public policy, is irrational or clearly exceeds a specifically enumerated limitation on an arbitrator's power.'"

Two members of a County Sheriff's Department separately applied for personal leave, but their requests were denied due to operational needs. The Union filed a joint grievance on their behalf, and the matter proceeded to arbitration. The arbitrator found that the County had violated the applicable terms of the relevant collective bargaining agreement [CBA] and the County commenced a combined CPLR Article 75 proceeding and declaratory action seeking to vacate the arbitrator's award. Supreme Court vacated the arbitration award and the Union appealed.

Here the relevant collective bargaining agreement [CBA] provided that although an arbitrator's award was final, any party could seek judicial redress if "the arbitrator has varied the terms or illegally interpreted the terms of the bargaining agreement between the parties." §5.08 of the relevant CBA provided that "[t]he granting of a personal business day shall be at the discretion of the Sheriff ..., with the work of the [d]epartment taking priority."

In ruling against the County, the arbitrator found that the County's discretion was "not unlimited and must be exercised in a reasonable fashion" and concluded that §5.08 should be interpreted as "presum[ing] that a timely request for a personal leave day will be granted absent a showing that pressing and current [d]epartment needs exist that may take precedence over any such leave request" (emphasis in the decision). Further, the arbitrator found that "it is the County's burden to demonstrate that such a need exists and but for the denial of a personal leave day request, the [d]epartmental needs could not be met."

The Appellate Division opined that by construing §5.08 as presuming that leave "will be granted" unless a departmental need was shown, the arbitrator did not rationally interpret the CBA's provisions. While the arbitrator noted that the County did not have unfettered discretion to determine when a personal leave request should be granted, the Arbitrator's ruling did not define the limits of that discretion. The arbitrator, instead, eliminated any discretion on the part of the County and replaced it with a burden-shifting standard.

Inasmuch as that burden-shifting standard is not a rational construction of §5.08, the Appellate Division, citing Matter of Albany County Sheriffs Local 775 of N.Y. State Law Enforcement Officers Union, Dist. Council 82, AFSCME, AFL-CIO [County of Albany], 27 AD3d 979 and other decisions, concluded that the County's petition/complaint seeking vacatur of the arbitrator's award was correctly granted by Supreme Court.

Click HERE to access the Appellate Division's decision posted on the Internet.

 

Retired employees sue Town seeking reimbursement of certain health insurance premiums they paid following retirement

It is well settled that, "when an employer and a union enter into a collective bargaining agreement that creates a grievance procedure, an employee subject to the agreement may not sue the employer directly for breach of that agreement but must proceed, through the union, in accordance with the contract" (Matter of Board of Educ., Commack Union Free School Dist. v Ambach, 70 NY2d 501, 508 [1987], cert denied 485 US 1034 [1988]; see Clark v County of Cayuga, 212 AD2d 963, 963 [4th Dept 1995]). There are two exceptions to that rule.

"The first exception applies when the contract provides otherwise . . . , i.e., the contract either expressly allows such suits or implicitly does so by excluding the dispute at issue from, or not covering it within the ambit of the contractual dispute resolution procedures" (Buff v Village of Manlius, 115 AD3d 1156; see Ledain v Town of Ontario, 192 Misc 2d 247, 251 [Sup Ct, Wayne County 2002], affd 305 AD2d 1094 [4th Dept 2003]).

"The second exception applies when the union fails in its duty of fair representation . . . , but the employee must allege and prove that the union breached its duty to provide fair representation to the employee" (Buff, 115 AD3d at 1157 [internal quotation marks omitted]; see Ambach, 70 NY2d at 508).

In this action Plaintiffs, retired employees of the Town, did not allege or show that the union breached its duty of fair representation (see Clark, 212 AD2d at 963), and therefore only the first exception is at issue, namely "did the contract either expressly allows such suits or implicitly does so by excluding the dispute at issue from, or not covering it within, the ambit of the contractual dispute resolution procedures."

Although Supreme Court held that the grievance procedure set out in the collective bargaining agreement [CBA] was the exclusive procedure by which Plaintiffs, retired employees of the Town, could seek redress and that they were required to bring their claims through the grievance procedure despite their status as retirees, the Appellate Division disagreed and "unanimously reversed" Supreme Court's order "on the law" and reinstated the retired employees' complaint.

Inasmuch as Plaintiffs were not aggrieved until after they had retired, and inasmuch as the CBAs "expressly limit[] the availability of the grievance procedure to current employees," the Appellate Division concluded that "the clear and unambiguous terms of the [CBAs]" establish that the grievance process was not available to Plaintiffs at the time they became aggrieved, citing Matter of DeRosa v Dyster, 90 AD3d 1470, and other decisions.

Accordingly, Plaintiffs' may go forward with their efforts seeking a court order compelling the Town to reimburse certain health insurance premiums which Plaintiffs contend they are entitled to pursuant to the terms of a CBA between Town and the Union that represented Plaintiffs during their employment by the Town.

Click HERE to access the Appellate Division's decision posted on the Internet.

Preventing a court's judgment or order which is unreviewable for mootness from "spawning any legal consequences or precedent"

The Petitioner discontinued efforts to enforce the judgment of Supreme Court and obtain the documents it had requested pursuant to New York State's Freedom of Information Law [FOIL] from Respondents. This rendered Respondents' instant appeal challenging Supreme Court's judgment and the report of the Referee moot. Further, Respondents did not establish an exception to the mootness doctrine.

The Appellate Division, noting the Respondents had not establish an exception to the mootness doctrine* and that the general rule in New York State is simply to dismiss an appeal that has been rendered moot, opined that "vacatur of an order or judgment may be an appropriate exercise of [the discretion of the court] when necessary to prevent a judgment or order which is unreviewable for mootness from spawning any legal consequences or precedent."

Explaining that a Supreme Court's orders could be used as precedent in future cases, "causing confusion of the legal issues raised", the Appellate Division found that "the circumstances presented in this case warrant the exercise of [its] discretion" and vacated the orders and judgment of Supreme Court and sealed the Referee's report.

* The Merriam-Webster.com Legal Dictionary defines the mootness doctrine as "A doctrine in judicial procedure: a court will not hear or decide a moot case unless it includes an issue that is not considered moot because it involves the public interest or constitutional questions and is likely to be repeated and otherwise evade review or resolution."

Click HERE to access the Appellate Division's decision posted on the Internet.

 

Applicant for accidental disability retirement benefits has the burden of showing the claimed disability was causally connected to the alleged line of duty injury

Plaintiff challenged the Board of Trustees of the New York City Police Pension Fund [Trustees] denial of her application for accidental disability retirement benefits. The Appellate Division unanimously affirmed the Trustees' decision,  dismissing Plaintiff's CPLR Article 78 petition.

The court said that the Trustees' determination that "there was no causal connection" between Plaintiff' line of duty injury and her disability was supported by credible evidence. The Appellate Division then observed that the Pension Fund's Medical Board recommended that Plaintiff receive ordinary disability retirement benefits rather than accidental disability retirement benefits.

The Appellate Division's decision noted that Plaintiff "was on full duty" for most of the period after experiencing her line of duty injury; had qualified with a firearm until her service retirement; and her "subjective complaints did not match the objective medical findings."

Further, said the court, although Plaintiff's surgeon stated that her disability resulted from a work-related accident, the Trustees' Medical Board disagreed, and conflicts in the evidence are to be resolved solely by the Medical Board and the Trustees.

Click HERE to access the text of the Appellate Division's decision posted on the Internet.