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December 17, 1992

CHARLES A. JOYCE, JOSEPH C. MATESIC, RICHARD A. SAMER and VERNON P. TAYLOR, for themselves and all other persons similarly situated, Plaintiffs,


The opinion of the court was delivered by: JOHN T. CURTIN

This class action is brought by retirees of defendant Curtiss-Wright Corporation ("Curtiss-Wright"). Plaintiffs bring suit under section 502 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132, and section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185. The suit stems from a unilateral decision made by Curtiss-Wright to terminate health insurance benefits for retirees of the company between May 1 and July 27, 1987. The central question in this case is whether these health insurance benefits were vested for the life of plaintiff retirees. If the benefits were vested, they could not be terminated unilaterally by defendant. If they were not vested, then the suit must be dismissed. Both sides have moved for summary judgment, arguing that the intent of the parties in contracting for retiree health benefits may be decided as a matter of law.


 In 1968, Curtiss-Wright and the Steelworkers International Union of North America, AFL-CIO, CLC, Local 4533 ("Steelworkers") negotiated a collective bargaining agreement ("contract") which gave paid health insurance to retirees. The contract stated:

 Group Life, Hospital and Surgical, and other applicable insurance benefits are covered in a separate Insurance Agreement which will be attached to and become part of the Agreement as Exhibit 'A'.

 The attached group insurance agreement ("insurance agreement"), provided coverage for retirees as follows:

 3. Post Retirement Group Health Insurance - Effective November 4, 1968, this insurance, which was formerly referred to as Post Retirement Group Hospital-Medical-Surgical Insurance, will be provided for employees receiving or becoming entitled to receive pension payments under The Curtiss-Wright Pension Plan by reason of the normal, automatic, early or disability retirement provisions of such Plan. This insurance will be identical to that described in the terms and provisions in paragraphs 1(A), 1(B), 1(C), 1(D), 1(E), 1(F), 1(I), 1(J) and 1(K) of this Exhibit B with the following additional provisions: . . . .

 Item 28, Exh. 1 at B-11. The "additional provisions" spelled out three conditions under which health coverage would not be provided: (1) to the extent a retiree was covered under another group policy, including Medicare; (2) in the event the retiree moved to a foreign country; and (3) in the event the retiree died. Id. at B-11-12.

 With one brief exception in 1984, the Steelworkers and Curtiss-Wright entered into three-year contracts from 1968 to 1987. The insurance agreement clauses concerning retiree benefits remained essentially unchanged between 1968 and 1984, providing continuous coverage for the retirees. See Item 28, Exh. 2 at B-17-18, Exh. 3 at B-17-18, Exh. 4 at B-18-19, Exh. 5 at B-18-19; and Item 40, Exh. L (citing Item 28, Exh. 7 at 51). In the 1984-87 insurance agreement, the language was changed to limit retiree health coverage for persons retiring after October 31, 1983, to those who had attained at least fifteen years of credited service. Item 40, Exh. H at B-14. The expiration date was changed for each agreement, although the 1971-74 and 1974-77 agreements simply stated that they "shall continue in effect until midnight," without providing a date or period at the end of the sentence. See id.

 In 1974, the contract expired without the parties' reaching a new agreement, and the active employees went out on strike. At that time, Curtiss-Wright notified the active employees of its intention to cancel their benefits but never attempted to cancel the benefits of the retirees. Item 39, P 11.

 Curtiss-Wright made both written and oral representations concerning the nature of retiree health benefits between 1968 and 1987. A written proposal for retiree health benefits offered to the Steelworkers during the 1968 contract negotiations stated:

 All current retirees and their dependents and all future retirees and their dependents will be covered for Hospital Surgical Medical Insurance benefits fully paid by the Company. Such benefits will be the same as the benefits for active employees, except for drugs, dental care and major medical. For retirees and dependents over age 65, the benefits will be integrated with Medicare Parts A and B.

 Item 40, Exh. D.

 Defendant also published a series of summary plan descriptions ("SPDs"), many of which appear to be undated. One undated pension plan SPD states, under the heading "Medical Benefits:" "Medical benefits are not provided by the Curtiss-Wright Pension Plan and are not vested benefits, thus such benefits are subject to modification or termination. Item 29, Exh. 22 at 7. Another booklet, entitled "Your Plan of Group Post Retirement Health Insurance" and stamped 6/70, states under the heading "Termination of insurance." "Your insurance, or that of a dependent, will terminate in the event of your death, or if the Group Policy terminates." Item 29, Exh. 24 at 8. Yet another undated booklet entitled "Employee Benefit Plan," states: "During your retirement, you and your covered dependents will have the same Basic Health Care coverage as you had while active at no cost to you." Item 29, Exh. 20 at 53. This booklet goes on to provide:

 Plan Continuation--The Company expects and intends to continue this Plan indefinitely but reserves the right to end or amend it. The benefits in this booklet are of a contractual nature, and they may be modified from time to ...

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