Gallagher v. Town of Fairfield

• Court: Connecticut Supreme Court
• Writing for the Court: KAHN, J.
• Citation: Gallagher v. Town of Fairfield, 339 Conn. 801, 262 A.3d 742 (Conn. 2021)
• Decision Date: 28 July 2021
• Docket Number: SC 20533
• Parties: James G. GALLAGHER v. TOWN OF FAIRFIELD et al.

339 Conn. 801

262 A.3d 742

James G. GALLAGHER

v.TOWN OF FAIRFIELD et al.

SC 20533

Supreme Court of Connecticut.

Argued January 14, 2021

Officially released July 28, 2021^*

Catherine L. Creager, Fairfield, with whom was James T. Baldwin, for the appellants-cross appellees (defendants).

William J. Ward, for the appellee-cross appellant (plaintiff).

Robinson, C. J., and McDonald, D'Auria, Mullins, Kahn, Ecker and Keller, Js.

KAHN, J.

This case requires that we construe a collective bargaining agreement between the named defendant, the town of Fairfield, and its police union. The agreement took effect in 1985, at a time when federal law did not permit municipal employees to participate in the Medicare system. The agreement provides that union members who retired early due to disability, such as the plaintiff, James G. Gallagher, as well as their eligible dependents, would be entitled to town paid private health insurance. The question presented is whether, following an intervening change in federal law that permits the plaintiff and other similarly situated retirees to enroll in Medicare upon reaching the age of sixty-five, the town may terminate their private health insurance, provide them with comparable town paid Medicare supplemental insurance, and require that they bear the costs of their Medicare premiums. The defendants have appealed, and the plaintiff has cross appealed, from the judgment of the trial court, which concluded that the town may require the plaintiff and his wife to enroll in Medicare but, in addition to paying for their Medicare supplemental insurance and any uncovered medical expenses, must also reimburse the costs of their Medicare Part B premiums. We agree with the former conclusion but hold that the town is not required to reimburse the Gallaghers for their Medicare premium costs. Accordingly, we affirm in part and reverse in part the judgment of the trial court.

I

The following facts, which were either found by the trial court or are undisputed, and procedural history are relevant to our disposition of the parties’ claims. The plaintiff began working as a police officer for the town in 1974. In October, 1986, after twelve years of service, and after the plaintiff had sustained a serious injury in the course of his employment, he successfully petitioned the defendant Police and Fire Retirement Board of the Town of Fairfield to retire on disability. The plaintiff was thirty-five years old at that time.

At all relevant times, the plaintiff was a member of the Fairfield Police Union International Brotherhood of Police Officers, Local 530 (union), which is not a party to the present action. The union and the town entered into a three year collective bargaining agreement in 1985 (1985 CBA) that was in effect at the time of the plaintiff's retirement. Pursuant to that agreement, the relevant terms of which are set forth in part II of this opinion, the town was required to provide and subsidize the cost of private health insurance coverage for disability retirees, such as the plaintiff, and their eligible dependents.

On March 24, 2016, upon reaching the age of sixty-five, the plaintiff became eligible to receive Medicare benefits. Around that time, the town's risk manager, Eileen Kennelly, informed the plaintiff that the town would continue to subsidize his private health insurance costs and those of his since deceased wife, Joy Gallagher, and that they would not be required to enroll in Medicare. The following year, however, Emmet P. Hibson, Jr., the town's human resources director and an employee of the defendant Town of Fairfield Personnel Department, notified the plaintiff that, effective July 1, 2017, he and his wife would be required to enroll in Medicare and to each pay the $134 monthly cost¹ of their Medicare Part B premiums. Hibson indicated that the town would transfer the Gallaghers to a private Medicare supplemental insurance plan and cover the costs of that plan. The town agrees that it is required to reimburse any medical costs not covered by Medicare, beyond a $100 annual deductible. Under the town's view of the agreement, then, the plaintiff was responsible for paying his own Medicare premiums, and it was responsible for paying the costs of his Medicare supplemental insurance, as well as any uncovered medical costs.

The plaintiff filed the present action in 2017. He alleged that the town was bound to continue to provide the Gallaghers with town paid private health insurance, both by the terms of the 1985 CBA and by the defendants’ prior representations to him and through their course of performance, and, in the alternative, that the town was obligated to subsidize the costs of their Medicare Part B premiums.

Following a bench trial, the trial court concluded that the 1985 CBA does not bar the town from requiring that the Gallaghers transition from private health insurance to Medicare. The court also concluded that the doctrine of municipal estoppel did not apply because it determined that the Gallaghers did not rely to their detriment on the defendants’ earlier representations that they would be permitted to remain enrolled in private insurance. The trial court also concluded, however, that the town was contractually bound to subsidize the costs of the Gallaghers’ Medicare Part B premiums. The court rendered judgment accordingly, awarding $10,184 to reimburse the Gallaghers for the costs of their Medicare premiums paid through March 1, 2019, and ordering the town to reimburse them for the costs of premiums incurred after that date.

The defendants appealed and the plaintiff cross appealed from the judgment of the trial court to the Appellate Court, and we transferred the appeal and cross appeal to this court pursuant to General Statutes § 51-199 (c) and Practice Book § 65-1. Additional facts will be set forth as relevant.

II

The plaintiff's primary argument on appeal is that the town was contractually obligated to continue to provide the Gallaghers with town paid private health insurance throughout their lifetime and, therefore, that the trial court incorrectly concluded that the town was permitted to terminate the Gallaghers’ private health insurance and require that they, instead, enroll in Medicare.² The plaintiff also contends that the defendants illegally transferred the Gallaghers from private health insurance to Medicare without their signatures or consent.³ We consider each claim in turn.

A

"Principles of contract law guide our interpretation of collective bargaining agreements. ... When, as in the present case, the trial court based its interpretation solely on the language of the contract, our standard of review is plenary." (Citation omitted; internal quotation marks omitted.) Russo v. Waterbury , 304 Conn. 710, 720, 41 A.3d 1033 (2012).

The following additional facts are relevant to the plaintiff's central claim that the town was contractually bound to maintain the Gallaghers’ private health insurance. The relevant portions of the 1985 CBA⁴ provide:

"ARTICLE IX—INSURANCE

"Section 1. The town shall provide and pay for the following insurance for each employee and his enrolled dependents:

"a. The Connecticut Hospital Service (Blue Cross) semi-private room credit rider and out-patient benefits credit rider plan.

"b. The town will provide and pay the cost of a major medical policy which shall contain a one hundred dollar ($100.00) deductible ($200.00 family maximum) and 80/ 20 [percent] co-insurance to $2,000.00 of covered charges per member per calendar year and 100 [percent] thereafter to the policy maximum of one million dollars ($1,000,000.00).

"c. In the event the town changes insurance carriers, i.e., Blue Cross/Blue Shield, the town agrees the present coverages and benefits shall remain in effect without any additional qualifications. For example, no employee, covered under the collective bargaining agreement, shall suffer any loss or reduction in coverages and benefits because of such change. Sixty (60) days prior to the implementation of any change in carrier, the town shall submit to the union the new coverage so that the union can ascertain that in fact the coverage is as set forth above.

* * *

"Section 7.—Insurance for Retirees. Effective 7-1-84, employees with at least twenty-five years of service who retire under the normal retirement provisions of the police and firemen's retirement plan and their enrolled dependents shall be entitled to town paid health insurance coverage. Employees who retire under the disability provisions of the retirement plan and their enrolled dependents shall also be entitled to town paid health insurance coverage. The benefits to be provided are listed in article IX Insurance, [§] 1 a, b, c .... Employees who retire with at least twenty-five (25) years of service but who are less than fifty-one (51) at the time of retirement, other than retirees under the disability provisions of the retirement plan, shall, upon attaining the age of fifty-one (51) be entitled to the benefits listed in article IX, [§] 1a., b., c. ... in effect at the time of their retirement. ..."

The plaintiff also entered into evidence a copy of the collective bargaining agreement between the town and the successor to the union that was in effect between 2010 and 2013 (2010 CBA). Article IX, § 9.03, of the 2010 CBA provides in relevant part: "Except as otherwise provided for below, employees entitled to the retiree medical insurance benefits under this section shall continue to receive in retirement the same medical insurance benefits they received as an active employee, with the understanding that if the active employees switch to a new plan which is substantially equivalent to or better than the plan the employee retired under, the retiree will be switched to the new plan. ... Such coverage shall change to the Medicare carve out plan at age 65, in accordance with current practice. ...

"Employees eligible for Social Security Medicare benefits shall be required to participate in...