Benson v. SRT Commc'ns, Inc., 20110164.

• Citation: 2012 ND 58,813 N.W.2d 552
• Decision Date: 15 March 2012
• Docket Number: No. 20110164.,20110164.
• Parties: Richard and Elaine BENSON, Bill and Mary Bliven, Don and Annette Feist, Pat Lynch, and Lloyd and Donna Tribitt, Plaintiffs and Appellants v. SRT COMMUNICATIONS, INC., Defendant and Appellee.
• Court: United States State Supreme Court of North Dakota

813 N.W.2d 552

2012 ND 58

Richard and Elaine BENSON, Bill and Mary Bliven, Don and Annette Feist, Pat Lynch, and Lloyd and Donna Tribitt, Plaintiffs and Appellants

v.SRT COMMUNICATIONS, INC., Defendant and Appellee.

No. 20110164.

Supreme Court of North Dakota.

March 15, 2012.

Lynn M. Boughey, Bismarck, N.D., for plaintiffs and appellants.

David J. Hogue, Minot, N.D., for defendant and appellee.

SANDSTROM, Justice.

[¶ 1] Richard and Elaine Benson, Bill and Mary Bliven, Don and Annette Feist, Pat Lynch, and Lloyd and Donna Tribitt (“Bensons”) appeal from a summary judgment dismissing their claim that SRT Communications, Inc., is contractually obligated to provide them post-retirement health and medical benefits. We affirm the judgment, concluding the Bensons' action is governed by federal law and they failed to raise a disputed issue of material fact.

I

[¶ 2] Northern States Power (“NSP”) owned a telephone business in Minot, North Dakota, which it sold in 1991 to Minot Telephone Company (“Minot Telephone”), a wholly-owned subsidiary of Rochester Telephone Company (“Rochester”). In 1990, through Minot Telephone, Rochester contracted to purchase NSP's assets for the telephone business under an asset purchase agreement (“NSP–Rochester asset purchase agreement”), and the North Dakota Public Service Commission approved the sale in 1991. In 1993, Souris River Telecommunications Cooperative (“Souris River”) contracted to purchase Minot Telephone from Rochester, and the North Dakota Public Service Commission approved the sale in 1994. That same year, Minot Telephone became a wholly-owned subsidiary of Souris River, and Souris River changed Minot Telephone's name to SRT Communications. In 2000, Souris River merged into SRT Communications.

[¶ 3] The Bensons are four retired employees of the Minot telephone business, their spouses, and Pat Lynch, the widow of a deceased retiree, Thomas Lynch. Richard Benson, Bill Bliven, Don Feist, Lloyd Tribitt, and Thomas Lynch worked for NSP before it sold its telephone business to Minot Telephone in 1991, and they all retired from Minot Telephone between 1991 and 1994, before Souris River purchased Minot Telephone from Rochester. With the exception of Don Feist, the retired employees belonged to Local Union No. 949 of the International Brotherhood of Electrical Workers when the labor union and NSP entered into a collective bargaining agreement in 1991. Feist previously had been a member of the labor union, but did not belong to the union when it entered into the 1991 collective bargaining agreement with NSP.

[¶ 4] The 1991 collective bargaining agreement included a medical expense benefit plan for NSP employees, which took effect on January 1, 1991, and remained in effect until December 31, 1993. Minot Telephone assumed the 1991 collective bargaining agreement under the NSP–Rochester asset purchase agreement. SRT Communications did not deny paying the Bensons' health insurance premiums and other medical benefits (“post-retirement health benefits”) after their respective retirements, and SRT Communications continued to provide the benefits through December 31, 2009. In mid–2009, SRT Communications informed the Bensons, effective January 1, 2010, it would no longer offer health or other medical benefits to retired SRT Communications employees, their spouses, or their dependents once the retiree reached the age of Medicare eligibility.

[¶ 5] The Bensons sued SRT Communications, seeking a continuation of their post-retirement health benefits, and they sought an ex parte restraining order, requiring SRT Communications to continue its coverage of their post-retirement health benefits until the district court resolved the case. The district court granted the Bensons' request for an ex parte restraining order. SRT Communications moved for summary judgment under N.D.R.Civ.P. 56(b) and (c), contending that, as a matter of law, its 2009 decision to terminate post-retirement health benefits for its retired employees, including the Bensons, did not violate a contractual obligation or any federal law governing the Bensons' claims. Relying on the Labor Management Relations Act (“LMRA”) and the Employee Retirement Income Security Act (“ERISA”), the district court granted SRT Communications summary judgment, concluding the 1991 collective bargaining agreement and the NSP–Rochester asset purchase agreement were clear and unambiguous and raised no genuine issue of material fact. The court concluded the 1991 collective bargaining agreement expired on December 31, 1993, and although SRT Communications continued to provide post-retirement health benefits to the Bensons for over fourteen years after the expiration of the collective bargaining agreement, it did so as a matter of business discretion and not because of a contractual obligation. The district court dismissed the Bensons' claims against SRT Communications.

[¶ 6] The district court had jurisdiction under N.D. Const. art. VI, § 8, and N.D.C.C. § 27–05–06. The Bensons timely appealed under N.D.R.App.P. 4(a). This Court has jurisdiction under N.D. Const. art. VI, §§ 2 and 6, and N.D.C.C. § 28–27–01.

II

[¶ 7] The Bensons argue the district court erroneously granted SRT Communications summary judgment. They argue their action is not based upon the 1991 collective bargaining agreement, but is based on a separate contractual agreement between themselves and Minot Telephone, which was created the day they retired and provided for post-retirement health benefits throughout their retirement. They also argue SRT Communications purchased all of the telephone business's liabilities, including the liability to pay its retirees post-retirement health benefits, when it purchased Minot Telephone from Rochester. Additionally, the Bensons argue SRT Communications must continue providing post-retirement health benefits to them because they detrimentally relied on SRT Communications' payment of the benefits for over fourteen years.

[¶ 8] “Summary judgment is a procedure for promptly resolving a controversy without a trial if the evidence shows there are no genuine issues as to any material fact and any party is entitled to judgment as a matter of law.” Gratech Co., Ltd. v. Wold Eng'g, P.C., 2003 ND 200, ¶ 8, 672 N.W.2d 672;N.D.R.Civ.P. 56(c). “ ‘Even if a factual dispute exists, summary judgment is proper if the law is such that resolution of the factual dispute will not change the result.’ ” Id. (quoting Koapke v. Herfendal, 2003 ND 64, ¶ 11, 660 N.W.2d 206). We review a district court's grant of summary judgment de novo. Lucas v. Riverside Park Condominiums Unit Owners Ass'n, 2009 ND 217, ¶ 16, 776 N.W.2d 801. We review the evidence in the light most favorable to the party opposing summary judgment. Makeeff v. City of Bismarck, 2005 ND 60, ¶ 12, 693 N.W.2d 639.

A

[¶ 9] The Bensons argue their claims are based upon a separate contractual agreement between themselves and Minot Telephone that was created the day they retired and that provided for post-retirement health benefits throughout their retirement. The Bensons argue SRT Communications is contractually obligated to provide them with post-retirement health benefits because of the separate contractual agreement and not because of the 1991 collective bargaining agreement. They contend NSP and Rochester informed them before Minot Telephone purchased NSP that they would continue receiving the same post-retirement health benefits from the company for the remainder of their lives. As a result, the Bensons contend they chose to retire early to obtain the same post-retirement health benefits that NSP provided at that time. Relying on an unsigned and unsworn “ANDERSON Memo to File” claiming that on September 22, 2009, Ernie Selland allegedly made an oral statement that “there is no doubt in [my] mind whatsoever that the agreement was that the retirees would have the same benefits they had under the labor contract, for life,” the Bensons argue their action is based on separate contractual agreements created the day each of them retired and therefore federal law does not apply. See Appendix of Appellants at 209. Selland had been the principal manager of NSP in 1990. The record contains no competent, admissible evidence to support the Bensons' assertion of fact. See Klimple v. Bahl, 2007 ND 13, ¶ 4, 727 N.W.2d 256 (“The party resisting a motion for summary judgment must present competent admissible evidence which raises an issue of material fact.”).

[¶ 10] SRT Communications responds that the Bensons' claims are based upon the 1991 collective bargaining agreement between NSP and Bensons' labor union, not upon a separate contractual agreement. SRT Communications contends federal law preempts the Bensons' claims.

[¶ 11] Collective bargaining agreements are subject to the LMRA. 29 U.S.C. § 185 (2008). “[A] collective-bargaining agreement is much more than traditional common law employment terminable at will. Rather, it is an agreement creating relationships and interests under the federal common law of labor policy.” Bowen v. United States Postal Serv., 459 U.S. 212, 220, 103 S.Ct. 588, 74 L.Ed.2d 402 (1983). The LMRA “pre-empts any ‘state-law claim [whose resolution] is substantially dependent upon the analysis of the terms of an agreement made between the parties in a labor contract.’ ” Pilot Life Ins. v. Dedeaux, 481 U.S. 41, 55, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987). Because the Bensons' claim emanates from the 1991 collective bargaining agreement, we consider the claim within the framework of federal law under the authority of the LMRA, or in the case of an ERISA plan, under the authority of ERISA. See Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 454–57, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957); Pilot Life Ins., 481 U.S. at 55–56, 107 S.Ct. 1549.

[¶ 12] Two categories of ERISA employee benefit plans are welfare plans and pension plans. 29 U.S.C. §§ 1002(1)–(2) (2008). SRT Communications argues the...