Loth v. City of Milwaukee

Decision Date30 December 2008
Docket NumberNo. 2007AP587.,2007AP587.
Citation2008 WI 129,758 N.W.2d 766
PartiesAlbert LOTH, Plaintiff-Appellant, v. CITY OF MILWAUKEE, Defendant-Respondent-Petitioner.
CourtWisconsin Supreme Court

For the defendant-respondent-petitioner there were briefs by Alan M. Levy and Lindner & Marsack, S.C., Milwaukee, and oral argument by Alan M. Levy.

For the plaintiff-appellant there was a brief by James W. Greer, Jr., Barbara J. Janaszek, and Whyte Hirschboeck Dudek S.C., Milwaukee, and oral argument by James W. Greer, Jr.

¶ 1 SHIRLEY S. ABRAHAMSON, C.J

The City of Milwaukee seeks review of a published court of appeals decision reversing an order and judgment of the Circuit Court for Milwaukee County, Patricia D. McMahon, Judge.1 The circuit court granted summary judgment to the City and dismissed Albert Loth's complaint.

¶ 2 The single issue posed on review is which City health insurance plan covers Loth, who had 15 years of service with the City in 1999, reached the age of 60 in 2005, and retired in 2005:

(1) The pre-2004 City health insurance plan, which provided for no-premium-cost health insurance for City employees between ages 60 and 65 with 15 years of service who retired from City service; or

(2) The post-2004 City health insurance plan (enacted in 2002 to take effect in 2004), which provides for shared-premium-cost health insurance for City employees between ages 60 and 65 with 15 years of service who retire from City employment after January 1, 2004.

¶ 3 Loth contends that he is entitled to the pre-2004 no-premium-cost health insurance upon retirement because the pre-2004 no-premium-cost provision was in effect when he completed 15 years of service with the City in 1999. Loth's position is that when a management employee completes 15 years of service the employee is entitled to the no-premium-cost provision under the health insurance benefit in effect at that time, even if the management employee has not attained the specified retirement age and has not retired. In sum, Loth argues that although he could not receive a retiree's health insurance benefit until he retired at age 60, he earned the retiree benefit upon his completion of 15 years of service. According to Loth, attaining the retirement age of 60 and retiring are mere conditions precedent to receipt of the free health insurance benefit.

¶ 4 In contrast, the City contends that Loth is entitled to the post-2004 shared-premium-cost health insurance because Loth did not attain the age of 60 and did not retire until 2005 when the post-2004 resolution was in effect for persons who retired after January 1, 2004.2

¶ 5 The only point of dispute between Loth and the City is whether Loth has to pay a premium for the health insurance benefit. Loth wants all the health insurance options and benefits available to retirees each year but wants them according to what he views as the City's promise that he would be entitled to the no-premium-cost health insurance benefits in effect when he was in City service for 15 years.

¶ 6 We agree with the City and the circuit court: The pre-2004 City health insurance plan does not govern Loth's health insurance on his retirement in 2005. The pre-2004 City health insurance plan clearly provided health insurance to management employees who met three qualifications: The management employee had to retire; had to be between the ages of 60 and 65; and had to have 15 or more years of city service.3 Before 2004, Loth had met only one of the pre-2004 qualifications for no-premium-cost health insurance: he had 15 years of employment with the City. Loth had neither attained the age of 60 nor retired when the pre-2004 health insurance plan was in effect. Thus Loth had not satisfied all three requirements under the pre-2004 health insurance plan before the health insurance plan was amended to take effect in 2004.

¶ 7 Accordingly, Loth's health insurance plan is governed by the post-2004 City resolution that was in effect when Loth became 60 years of age and retired with more than 15 years of service with the City.

¶ 8 We therefore reverse the decision of the court of appeals and affirm the order and judgment of the circuit court granting summary judgment to the City and dismissing Loth's complaint.

I

¶ 9 We review the circuit court's grant of summary judgment in the present case independently, applying the same methodology that is used by the circuit court.4 Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.5 There is no genuine issue of material fact in the instant case.

¶ 10 The present case raises only a question of law, namely the interpretation and application of a municipal resolution to undisputed facts. This court determines this legal question independently of the circuit court and court of appeals but benefitting from their analyses.6

II

¶ 11 The relevant facts of Loth's employment are not disputed. The City hired Loth as an accountant on November 19, 1984. He was a management employee and was not covered by any collective bargaining agreement between the City and its employees. By November 1999 he had been in the City's service for 15 years. He did not attain the age of 60 or retire until April 2005.

¶ 12 Upon Loth's retirement on April 25, 2005, the City provided him with health insurance benefits according to the terms of a 2002 City of Milwaukee Resolution effective for employees who retire on or after January 1, 2004. The City deducted health insurance premiums from his retirement check. Loth objects to the City's deducting the premiums.

¶ 13 Loth contends that a binding contract was formed between him and the City in 1999 when he completed his 15th year of service to the City, that under that contract the City is obligated to provide no-premium-cost health insurance to him under the health insurance plan in effect in 1999, and that the City cannot alter this 1999 no-premium-cost agreement.

¶ 14 Loth brought an action against the City, alleging that the City had breached its contract with Loth by refusing to provide him with free health insurance benefits according to the terms of the plan that was in effect in 1999 when he had put in his 15 years of service.7 To prevail on a breach of contract theory, Loth must establish that a contract exists, the terms of the contract, and the breach of a duty under the contract. In the instant case, the City has made a unilateral offer of health insurance benefits that requires an employee to perform the requested acts to accept the offer and give rise to a binding contract.

¶ 15 Both parties moved for summary judgment. The circuit court granted summary judgment to the City. A divided court of appeals reversed the circuit court's order granting summary judgment to the City and remanded the cause to the circuit court for a determination of Loth's damages and a declaration of Loth's rights.

¶ 16 The precise wording of the applicable City resolution in effect in 1999 governing a retiree's health insurance benefits is not in the record. We shall rely on the resolutions and handbooks that the parties recite and upon which they rely. We therefore start by examining the applicable documents for the terms of the City's unilateral offer of health insurance benefits.

¶ 17 Loth and the City agree that City of Milwaukee Resolution 020479, enacted on July 16, 2002 (and effective in 2004), accurately describes the substance of the City's health insurance plan in effect in 1999 as providing no-premium-cost health insurance to certain retirees. The Resolution states in one of its "whereas" clauses that the City "currently provides that General City Management employees who select retirement, those 55 years of age with 30 years of service or those 60 years of age with 15 years of service, can select any health insurance plan the City offers at no cost until they reach age 65...."8

¶ 18 This language explicitly states that a management employee has to select retirement to get no-premium-cost City health insurance. In addition, the management employee also has to be 60 years of age, with 15 years of service. This reading of the City's plan is also supported by various documents in the record that both parties recite and rely upon relating to the City's health insurance plan over the years.

¶ 19 Loth, the City, the circuit court and the court of appeals refer to a 1973 resolution adopted by Milwaukee's common council, City of Milwaukee Resolution 73-216. This resolution was one of the City's early health insurance plans for management employees who retire.9

¶ 20 The 1973 resolution provides for no-premium-cost insurance to City management employees who retire after January 1, 1974, and meet three qualifications set forth in the resolution, namely that the employee is between the ages of 60 and 65, has been in City service for 15 or more years, and retires with an unreduced retirement allowance.

¶ 21 City of Milwaukee Resolution 73-216 states in relevant part as follows:

Resolution relating to coverage for retirees with respect to health insurance.

Whereas. The City is desirous of extending without cost to retirees health insurance provided by Blue Cross-Blue Shield and Major Medical to certain retirees; now, therefore, be it

Resolved. By the Common Council of the City of Milwaukee that there shall be and is extended all present health insurance provided by Blue Cross-Blue Shield and Major Medical to general city employees who retire after January 1, 1974, and who meet all of the following qualifications:

1) Are between the ages 60-65;

2) Who have 15 or more years of city service; and

3) Who retire under the general city retirement system with an unreduced "retirement allowance;" and, be it

....

Further Resolved. That all benefits for such coverage as provided for in this resolution shall be paid for by the City.10

¶ 22 Two handbooks available when Loth was...

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