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Ambrose v. City of White Plains

United States District Court, S.D. New York

April 2, 2018

JOSEPH AMBROSE, et al., Plaintiffs,
v.
CITY OF WHITE PLAINS, et al., Defendants.

          Joseph A. Maria Frances Dapice Marinelli Joseph A. Maria, P.C. White Plains, New York Counsel for Plaintiffs

          John M. Flannery Peter A. Meisels Lalit K. Loomba Eliza M. Scheibel Wilson, Elser, Moskowitz, Edelman & Dicker LLP White Plains, New York Counsel for Defendants

          Richard K. Zuckerman Matthew J. Mehnert Lamb & Barnosky, LLP Melville, New York Counsel for Defendants

          OPINION & ORDER

          CATHY SEIBEL, U.S.D.J.

         I. BACKGROUND

         Before the Court is Defendants' Motion for Summary Judgment. (Doc. 375.) For the following reasons, the Motion is GRANTED.

         The following facts, which are from the parties' Local Rule 56.1 submissions and supporting materials, are undisputed unless otherwise noted.[1]

         A. The Parties

         Plaintiffs are former City of White Plains (“City”) police officers who were hired prior to July 1, 1995 and retired prior to May 24, 2010. (56.1 Stmt. & Resp. ¶ 25; Ps' 56.1 Counterstatement ¶ 1.) Defendants are the City; the City's mayor, Thomas Roach, (56.1 Stmt. & Resp. ¶ 17); the City's Chief of Staff/Corporation Counsel, John Callahan, (id. ¶ 18); and John Kirkpatrick, Benjamin Boykin, II, Dennis E. Krolian, Milagros Lecuona, John Martin, and Beth N. Smayda, who are members of the City's Common Council, (id. ¶¶ 19-24).

         B. The Collective Bargaining Agreements

         Throughout their employment with the City, Plaintiffs were represented by the Police Benevolent Association of the City of White Plains, Inc. (“PBA”). (Id. ¶ 26.) Plaintiffs are not represented by the PBA in retirement. (Id. ¶ 27.) Between 1968 and the present, the City and the PBA were parties to a series of collective bargaining agreements (“CBA”s). (Id. ¶¶ 27, 28.) Pursuant to New York's Taylor Law and the CBAs, all CBA provisions conferring economic benefits to union members are subject to separate and independent approval by the City's Common Council. (Id. ¶ 29.)[2] The CBAs do not contain a provision regarding health insurance for retirees hired prior to July 1, 1995. (Id. ¶ 40; see Doc. 377 (“Loomba Decl.”) Exs. 2(a)-(v).) The CBAs do, however, contain a provision discussing health benefits for current and some retired employees; it is now codified as Section 11, entitled “Benefit Plans.” Also relevant is what is now codified as Section 29(5), under the heading “General Provisions.”

         1.Section 11

         Section 11 of the recent CBAs - which formerly was codified in other sections - contains three subsections addressing health benefits that are relevant here. First, Section 11(A) states that “[t]he existing employee benefit plans provided for the employees of the City with respect to health insurance, Section 208-b of the General Municipal Law, and Sections 3 and 4 of Chapter 1005 of the Laws of 1965 shall remain in full force and effect.” (56.1 Stmt. & Resp. ¶¶ 43-44; Loomba Decl. Ex. 2(s) at 11.)[3] This section has remained essentially unchanged since 1968. (56.1 Stmt. & Resp. ¶ 42.)

         Second, the substantive provision regarding current employees' health insurance, now-Section 11(C), has changed minimally since 1968. (Id. ¶ 44.) The City and the PBA agreed in the 1970-72 CBA that, “Effective July 1, 1971, the City shall contribute 100% of the cost of family coverage under the ‘State-Wide Plan.' An equivalent dollar amount shall be contributed on behalf of those employees electing G.H.I. family plan.” (Id. ¶ 45; Loomba Decl. Ex. 2(b) at 4.) During the negotiations for the 1972-1973 CBA, the PBA urged that the CBA be amended to read, “Effective July 1, 1972, the City shall provide identical health insurance coverage to all previously retired members of the Police Department not covered under our present insurance plan. The City shall assume [the] full cost of this benefit.” (56.1 Stmt. & Resp. ¶ 48 (alteration in original); Loomba Decl. Ex. 8 § 9.) The City rejected the proposed addition. (56.1 Stmt. & Resp. ¶ 49.) In the 1989-1991 CBA, the city and PBA agreed that employees appointed on or after January 1, 1990 would contribute 25% towards the cost of their health insurance premiums for the first five years of employment. (Id. ¶ 50; Loomba Decl. Ex. 2(m) at 7.) Section 11(C) of the 2005-2008 CBA, reads “Health Insurance. The City shall continue to contribute 100% of the cost of family coverage under the ‘N.Y.S. Empire Health Insurance Program.'” (See Loomba Decl. Ex. 2(s) at 11.) “Employees appointed on or after January 1, 1990, shall contribute twenty- five (25%) perfect of the cost of the health insurance plan in which they are enrolled until they have completed five (5) years of service within the Police Department.” (Id.)[4]

         Third, during negotiations for the 1993-1997 CBA, the City and the PBA negotiated a provision addressing retiree health insurance. (56.1 Stmt. & Resp. ¶ 51.) The provision - which is now Section 11(D) entitled “Retiree Health Insurance” - provides, in relevant part:

         Employees hired on or after July 1, 1995 and who are otherwise eligible to receive health insurance benefits in retirement from the City shall be entitled to maintain the level of health insurance benefits (individual or family) enjoyed by the employee at the time of retirement and to have the City contribute premiums pursuant to the following schedule:

COMPLETED YEARS OF CITY SERVICE

CITY CONTRIBUTION

20 OR MORE

100%

15-19

80%

10-15

50% (INDIVIDUAL) 35% (FAMILY)

LESS THAN

10 0%

(Loomba Decl. Ex. 2(o) at 3-4; Doc. 384 (“Marinelli Aff.”) Ex. 17 at 11.) The provision did not have an effect on employees or retirees who were hired before July 1, 1995. (56.1 Stmt. & Resp. ¶ 55.)[5]

         In 2015, the Common Council adopted a Stipulation of Agreement reached between the City and the PBA after negotiations, which extended for a period of six years the CBA that had expired on June 30, 2012. (56.1 Stmt. & Resp. ¶¶ 136-37; Loomba Decl. Ex. 2(v) at 1.) The Stipulation of Agreement made certain changes to the existing CBA, including the addition of the following provision:

Employees hired before July 1, 1995, who retire on or after July 1, 2015 and who are otherwise eligible to receive health insurance benefits in retirement from the City, shall continue to be entitled to maintain the level of health insurance benefits (individual or family) enjoyed by the employee at the time of retirement and to have the City contribute 100% of the appropriate percentage of premiums charged by the New York State Empire Health Insurance Program under any of the health insurance programs the City makes available to its employees.

(Loomba Decl. Ex. 2(v) at 13.) The same negotiations resulted in other changes to the CBA, including changes to salary for newly-hired police officers, Municipal Law § 207-c procedures, and drug testing procedures. (56.1 Stmt. & Resp. ¶¶ 141-42.)

         2. Section 29(5)

         Since 1968, all CBAs have contained a paragraph under the “General Provisions” section that addresses other employee “rights and benefits.” (56.1 Stmt. & Resp. ¶ 57.)[6] In the 1968-1970 CBA, the provision provided: “It is likewise understood and agreed that all employees' rights, benefits and prerogatives which presently are or may be enjoyed by an employee not specifically conceded in this agreement are reserved to the employee.” (Id. ¶ 58; Loomba Decl. Ex. 2(a) at 7.) During the negotiations for the 1970-1972 CBA, the PBA sought to add a paragraph to the clause, which stated:

Notwithstanding any provision contained in this Agreement, nothing herein shall be deemed to limit, restrict, or remove any benefit, right or other thing which each police officer of the City of White Plains may now have or be entitled or may hereafter be entitled, pursuant to rules, regulations or other directives heretofore established, nor shall it be in derogation of any right or remedy which any member may now be entitled to or may hereafter be entitled to pursuant to any rule, regulation or other directive heretofore established.

(56.1 Stmt. & Resp. ¶ 59.) Ultimately, the City and the PBA limited the clause to read, “It is understood and agreed that all employees' rights and benefits which are presently enjoyed but not specifically covered in this Agreement shall be maintained.” (Loomba Decl. Ex. 2(b) at 9; see 56.1 Stmt. & Resp. ¶ 61.)

         During the 1972-1973 bargaining, the PBA sought to add after “rights and benefits” in the first sentence the phrase “and all existing practices and procedures, ” as well as an additional paragraph, stating:

Furthermore, notwithstanding any provision contained in this agreement, nothing herein shall be deemed to limit, restrict, remove, revoke, or diminish any benefit, right, or other thing which each employee of the Police Department may now have or be entitled or may hereafter be entitled or which may exist by reason or usage. Furthermore, the provisions of this agreement and of this section shall supersede any present or hereafter adopted rule or regulation or other formal Department directive or any other City action present or future.

(56.1 Stmt. & Resp. ¶ 62.) The 1972-1973 CBA did not change the preexisting language. (Id. ¶ 64.)

         During the 1975-1976 negotiations, the City sought to remove the clause altogether, (Id. ¶ 65; Marinelli Aff. Ex. 11 at 6), while the PBA demanded that the clause be expanded to read, “The City shall not eliminate any rights or benefits all practices of the past which were previously, and are presently, enjoyed by the members which are not specifically covered in this agreement, ” (56.1 Stmt. & Resp. ¶ 65 (emphasis omitted)). The dispute went before an arbitrator, who, after a Findings of Fact and Recommendations, decided in a Final and Binding Opinion and Award that there would be no change to the clause. (Id. ¶¶ 66-67.)

         In the negotiations for 1978-1980, the PBA demanded that the following language be added to the agreement:

All benefits enjoyed in the previous agreement shall be continued until such time as a successor agreement is reached. It is hereby stipulated and agreed by and between the City of White Plains and the White Plains PBA that any and all rights, benefits and privileges which are presently in effect under the last contract or by incorporation of past practices, shall be continued in full force and effect until such time as a new contract is signed. All terms of the previous agreement shall be continued unless expressly amended by the terms of the new agreement.

(Id. ¶ 68; Loomba Decl. Ex. 13 at 5.) During these negotiations, the PBA and the City agreed that they were conducted on a “package basis and unless a mutually agreeable package resulted both parties would revert back to their original demands upon declaring an impasse.” (Loomba Decl. Ex. 13 at 3.) The clause remained unchanged. (56.1 Stmt. & Resp. ¶ 69.)

         During negotiations for the 1983-1985 CBA, the City and the PBA agreed to narrow the scope of the clause; it was changed to read: “It is understood and agreed that all employees' rights and benefits which are terms and conditions of employment and which are presently enjoyed but not specifically covered in this Agreement shall be maintained.” (Id. ¶¶ 71-72; Loomba Decl. Ex. 2(j) at 24.) The clause, which is now codified as Section 29(5), (see Loomba Decl. Exs. 2(1)-(s)), has remained unchanged since the 1983-1985 CBA. (56.1 Stmt. & Resp. ¶ 73.)

         C. History of Resolutions and Ordinances

          Until May 10, 2010, the City had a practice of covering 100% of the cost of health insurance premiums for retired police officers, including Plaintiffs. (Id. ¶ 31.)[7] This practice was reflected in a Common Council Resolution on November 20, 1967 (“1967 Resolution”), which stated “that the City of White Plains, as a participating employer in the State Employees Health Insurance Plan, elects to pay the full cost of premium or subscription charges for the coverage of city employees and retired city employees who are enrolled in the basic state-wide health insurance plan and the city will pay one-half of the cost of premium or subscription charges for the coverage of the dependents . . . of such city employees and retired employees.” (Loomba Decl. Ex. 3; 56.1 Stmt. & Resp. ¶ 32.)[8]

         In 1996, the City adopted an ordinance, codified at Section 2-5-54 of the White Plains Municipal Code, providing that employees hired on or after July 1, 1995 were required to contribute to the cost of health insurance in retirement according to a schedule set forth in the ordinance. (56.1 Stmt. & Resp. ¶ 34.) On April 5, 1999, the City adopted an ordinance, which added a provision to Section 2-5-54 of the City Code, which stated:

Notwithstanding any of the foregoing provisions to the contrary, the above schedule shall not apply to employees whose positions are designated in Appendix 1, Appointed Officials and Appendix 1c, Elected Officials. Such employees who are otherwise eligible to receive health insurance benefits in retirement from the City, shall continue to be entitled to maintain the level of health insurance benefits (individual or family) enjoyed by the employee at the time of retirement and have the City contribute 100% of the premium.

(Marinelli Aff. Ex. 5 at 2.)

         On May 24, 2010, the City passed the ordinance at issue, (the “2010 Ordinance”), which for the first time addressed retirement health benefits for retirees hired prior to July 1, 1995, and stated in pertinent part:

Employees hired before July 1, 1995, who are otherwise eligible to receive health insurance benefits in retirement from the city, shall continue to be entitled to maintain the level of health insurance benefits (individual or family) provided by the city to current employees and to have the city contribute eighty-five percent of the premium charged by the New York State Empire Health Insurance Program toward the cost of providing individual or family coverage under any of the health insurance programs the city makes available to its employees. The provision of this section shall not apply to retired employees covered by a collective bargaining agreement at the time of their retirement, during the term said collective bargaining agreement is in effect.

(56.1 Stmt. & Resp. ¶ 36; Loomba Decl. Ex. 5 at 4.) The 2010 Ordinance capped the City's contribution toward the health insurance of retirees who were hired before July 1, 1995 at 85% of the cost of the New York State Empire Health Insurance Program (“NYSHIP”). (56.1 Stmt. & Resp. ¶ 37.) The retirees, including Plaintiffs, “are required to contribute the difference, if any, between (i) the figure equal to 85% of the cost of the NYSHIP premium and (ii) the premium cost of the health insurance plan in which the retiree is enrolled.” (Id. ¶ 38.) If an employee or retiree opts to receive health insurance under NYSHIP, they would be responsible for paying 15% of the cost of premiums, which, as of January 2017, ranges from $63.21 per month for individual coverage for Medicare-eligible retirees and to $324.10 per month for family coverage for employees or retirees not eligible for Medicare coverage. (Id. ¶ 103.)

         In addition to NYSHIP, the City offers five alternative plan for retirees, including: (1) Empire Blue Cross and Blue Shield Medicare plan, (2) Emblem Health Insurance - Access 1 plan, (3) Emblem Health - Prime HMO plan, (4) Emblem Health HIP - VIP Medicare plan, and (5) Benistar/TransAmerica (“Benistar”). (Id. ¶ 120; Doc. 379 (“Guzman Aff.”) ¶ 2.) Benistar provides coverage for retirees and their family members who are Medicare eligible with a premium cost of $438.83 per family member, or $877.66 for a family of two. (56.1 Stmt. & Resp. ¶¶ 122-23; Guzman Aff. ¶ 4-5.) Comparatively, 85% of the NYSHIP premium for a family of two Medicare eligible persons is $947.44 per month. (Guzman Aff. ¶ 6.) Thus, a family of two Medicare-eligible persons could obtain coverage under Benistar for no cost. (Id. ¶ 7.) Benistar may be more expensive than NYSHIP on an individual basis. (See Marinelli Aff. Ex. 155 at 3.) Plaintiff John Bonner testified that in 2012 or 2013 he switched to a plan “where you didn't have to pay a premium [and] it would be covered in full by the City, ” but that he later switched back to NYSHIP because the plan was “a disaster” because he “had to use doctors in New York and had to get services - hospitals had to be . . . in New York.” (Id. Ex. 25 at 20:18-21:25.) He did not recall what plan it was. (Id. Ex. 25 at 20:18-21:2, 24:16-18.) In any event, Plaintiffs admit that both NYSHIP and Benistar provide nationwide coverage, (56.1 Stmt. & Resp. ¶ 127), the office visit co-payment and co-payments for prescriptions for both plans is the same, (id. ¶¶ 128-29), and neither plan charges a deductible for hospitalization or doctors' visits as long as the patient uses in-network providers, (id. ¶ 130).[9]

         D. Alleged Promises by Municipal Employees

         During the Plaintiffs' respective depositions, Plaintiffs were asked to describe the basis for their promissory estoppel claims - specifically, whether they were relying on any oral statements as a basis for their claim - and to describe the damages that they are seeking. (Id. ¶¶ 144-45.) Based on the Court's request at the pre-motion conference on September 26, 2016, Defendants grouped Plaintiffs into five categories for purposes of this motion: Plaintiffs who claim to have relied on: (1) statements by PBA representatives; (2) statements by Police Commissioners; (3) statements by Mayors or members of the Common Council; (4) statements by lower-level City employees; and (5) documents. (Id. ¶ 146; see Ds' 56.1 Appendix A (“Appendix A”).)[10] Each of the deposed Plaintiffs claimed reliance on one or more of the above categories. (56.1 Stmt. & Resp. ¶ 147.)[11]

         E. The City's Financial Distress

         In the wake of the Great Recession, the City has been experiencing fiscal distress and decreased revenues. (Id. ¶¶ 81-82.) For example, the City's General Fund decreased by about $9 million. See Office of the Commissioner of Finance, The Comprehensive Annual Financial Report for the Fiscal Year July 1, 2008 - June 30, 2009, at 40, https://www.cityofwhiteplains. com/ArchiveCenter/ViewFile/Item/80 (“2008-2009 Annual Report”).[12]

         On December 18, 2009, Moody's Investors Service gave the City a credit rating of Aa1, but projected a “negative outlook [that] reflects [a] narrowed financial position that is expected to narrow further in fiscal 2010.” (56.1 Stmt. & Resp. ¶ 111; Genito Aff. Ex. A at 2.) At the start of the 2009-2010 fiscal year, the City's revenue budget lines were overestimated by almost $5.2 million, and expenditures - including salaries and wages - were underestimated. (56.1 Stmt. & Resp. ¶ 85.) In the 2010-2011 proposed budget, the 2009-2010 fiscal year deficit was projected to be as high as $13 million. (Id. ¶ 86.)

         In January 2010, the Mayor and Common Council took steps to reduce the City's expenditures, including consolidating management positions, implementing two rounds of layoffs in February and April, making $939, 000 in cuts to other personnel costs, and changing the timing of health insurance payments. (Id. ΒΆ 87.) After these changes, the ...


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