Webb v. GAF Corp.

• Decision Date: 24 January 1996
• Docket Number: No. 85-CV-777.,85-CV-777.
• Citation: 936 F. Supp. 1109
• Parties: Jack WEBB, Eugene Sterner, Fred Ryan, Alex Koulikas, Frances Kurau and William Collier, as individuals, and on behalf of a class of individuals similarly situated, Plaintiffs, v. GAF CORPORATION; GAF Employee Benefit Program for International Association of Machinists and Aerospace Workers, Johnson City Lodge # 1807; and GAF Employee Benefit Program for International Chemical Workers, Local # 306, Defendants.
• Court: U.S. District Court — Northern District of New York

936 F. Supp. 1109

Jack WEBB, Eugene Sterner, Fred Ryan, Alex Koulikas, Frances Kurau and William Collier, as individuals, and on behalf of a class of individuals similarly situated, Plaintiffs, v. GAF CORPORATION; GAF Employee Benefit Program for International Association of Machinists and Aerospace Workers, Johnson City Lodge # 1807; and GAF Employee Benefit Program for International Chemical Workers, Local # 306, Defendants.

No. 85-CV-777.

United States District Court, N.D. New York.

January 24, 1996.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Hancock & Estabrook, Syracuse, NY (David E. Peebles, Martha Berry, of counsel), for Plaintiffs Jack Webb, Eugene Sterner, Fred Ryan and "IAM" Class.

Smith, Sovik, Kendrick, Schwarzer & Sugnet, P.C., Syracuse, NY, (Lawrence F. Sovik, of counsel), for Plaintiffs Alex Koulikas, Frances Kurau, William Collier and "Chemical Workers" Class.

Carpenter, Bennett & Morrissey, Newark, NJ, (Patrick Brady, Francis X. Dees, of counsel), for Defendants.

MEMORANDUM-DECISION AND ORDER

MUNSON, Senior District Judge.

Presently before the court are cross-motions for post-trial relief from a special jury verdict rendered September 25, 1992 in a partial class action concerning retiree medical benefits. Oral argument was heard in Syracuse on December 4, 1992. In a bench decision the court decided defendant's motions to dismiss absent class members who had either failed to respond to interrogatories or indicated their desire to opt out. Transcript of Bench Decision, Dec. 4, 1992, Document ("Doc.") 208, at 3-4, 5, 8. In a subsequent order the court preliminary enjoined defendants from raising the medical plan premiums charged to the class represented by plaintiffs Webb, Sterner, & Ryan, in accordance with the special verdict of the jury. Jan. 3, 1995 Order, Doc. 216. Defendants thereafter moved to stay the injunction pending appeal. That motion was denied. March 8, 1995 Order, Doc. 221.

The court has painstakingly considered the multiple submissions of the parties and is now prepared to dispose of the remaining post-trial motions. The following constitutes the Memorandum-Decision and Order of the court.

I. BACKGROUND

The two plaintiff classes consist of early retirees from defendant GAF Corporation who were members of two labor unions: the International Association of Machinists and Aerospace Workers, Johnson City Lodge # 1807 ("IAM class") and the International Chemical Workers Union, Local # 306 ("Chemical Workers class"). The classes were certified only as to claims arising under section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1132(a)(1)(B), and section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185, also known as the Taft-Hartley Act. See Order Granting Class Certification, Doc. 56; Corrected Order Granting Class Certification, Doc. 59.

In early 1973 the IAM union and GAF commenced negotiating a new collective bargaining agreement ("CBA") to replace the one due to expire in June of that year. One of the matters discussed was health insurance for early retirees. The process resulted in the inclusion of the following provision in section 73 of the 1973-75 CBA:

Employees electing early retirement on or after 7/1/73

who are members of the active employee medical plan may continue to carry the active employee medical plan until eligible for Medicare at which time they will be covered by the existing Retiree Medical Plan. The cost to the early retiree of the active plan will be $3/month for the employee and $3/month for the spouse and/or family.

Exhibit ("Exh.") A attached to Affidavit ("Aff.") of Francis W. Gaube, Doc. 132, at 28. The CBA expired on July 1, 1975. The provision in section 73 was repeated in the agreements covering the periods 1975-77, 1977-79, 1979-81, and 1981-83, with certain eligibility changes not relevant here. For terms of the medical plans, including deductibles and benefit levels, union members were referred to certain brochures known as summary plan descriptions in ERISA terminology.

The Chemical Workers union bargained for similar early retiree medical benefits in 1974. The discussions on this point were reduced to a Memorandum of Understanding ("MOU"). Item Six of the MOU contained language identical to that portion of the IAM CBA quoted above, except the date set for the commencement of the benefits was April 4, 1974. Exh. A attached to Chemical Workers Class Notice of Motion, Doc. 191. This provision of the MOU was not incorporated into the Chemical Workers' 1974-76 CBA, nor into any subsequent two-year agreement.

GAF started instituting premium increases for early retirees in 1984. The IAM class claims that the benefits prescribed in the section 73 early retiree provisions in the five CBAs from 1973 to 1983 were intended to vest on the date of retirement, precluding any subsequent increase in premium or deductible, or decrease in benefit level. The Chemical Workers class claims the 1974 MOU manifested the same intention that medical benefits vest for the life of the retiree. After a two week trial in September of 1992, the jury found the following in its answers to interrogatories in a special verdict form:¹

1. The premiums specified in section 73 of the five IAM CBAs in question for early retirees under 65 who wished to continue their coverage under the regular employee medical plan were intended by the parties to the labor negotiations to remain fixed, vesting at the date of retirement. Jury Verdict Form, Court Exh. 3, at 1.

2. The terms of medical coverage (including deductibles) for the IAM class early retirees under 65 who elected to continue the regular medical plan were not intended to remain fixed. Id. at 2.

3. IAM class early retirees reaching age 65 were entitled to no-cost coverage under the retiree medical plan in existence at the date of retirement (including a lifetime Medicare supplement of $5,000). Id.

4. The terms, including deductibles, of the retiree medical plans insuring IAM class early retirees who had attained the age of 65 were not fixed. Id. at 3.

5. Item six of the 1974 MOU between the Chemical Workers and GAF was not intended to continue through the three Chemical Workers CBAs between 1976 and 1982. Id.

In accordance with the findings in questions 1 and 3, GAF has been preliminary enjoined from charging IAM class members greater premiums for early retiree medical benefits than those allowed in section 73 of the five IAM CBAs.² Jan. 3, 1995 Order, Doc. 216. The Chemical Workers class has received no relief. Pending in the cross-motions sub judice are: the IAM class' motions for judgment as a matter of law regarding questions 2 and 4 of the special jury verdict, for referral of the matter to a magistrate judge or special master for the calculation of damages, for discontinuance without prejudice of all nonclasswide claims of the IAM name plaintiffs, and for a permanent injunction against GAF; the Chemical Workers class' motion for judgment as a matter of law, or alternatively, for a new trial; and GAF's motion for judgment as a matter of law upon questions 1 and 3 of the special verdict, or in the alternative, for a new trial limited to those questions. Analysis commences below, beginning with the Chemical Workers' request for post-trial relief.

II. DISCUSSION

A. Chemical Workers

The Chemical Workers class move pursuant to Rules 50(b) and 59 of the Federal Rules of Civil Procedure for judgment as a matter of law or a new trial on the issues decided against them at trial. The burdens the movants bear for the two motions differ. Addressing the j.n.o.v. motion first, a party bearing the burden of proof at trial who seeks judgment as a matter of law must show that "the evidence in favor of the movant is so overwhelming that the jury could rationally reach no other result." Granite Computer Leasing v. Travelers Indemnity Co., 894 F.2d 547, 551 (2d Cir.1990).³

The "overwhelming" evidence cited by plaintiff Chemical Workers is the testimony of William Bellnier and Robert Silvanic. Chemical Workers Memorandum ("Mem.") of Law, Doc. 192, at 3. This "uncontradicted" evidence, it is said, conclusively proved that the benefits described in the 1974 MOU were intended by the negotiators to continue. Id. at 4. The jury though was not obligated to accept even uncontradicted testimony. E.g., Broadcast Music Inc. v. Havana Madrid Restaurant Corp., 175 F.2d 77, 79-80 (2d Cir.1949). Moreover, the jury could rationally have credited this evidence tending to show the early retiree benefits for the Chemical Workers were not intended to continue into perpetuity: the 1974 MOU explicitly expired on June 30, 1976; item six of the MOU was not incorporated into any CBA between GAF and the Chemical Workers; and the witness Bellnier testified on cross-examination that he did not recall any discussion between GAF and the Chemical Workers about the duration of the early retiree medical benefits described in the MOU. Testimony of William A. Bellnier, Exh. B, Doc. 197, at 223-24. The inferences the jury could reasonably draw from these observations alone negates any contention that the evidence in favor of the Chemical Workers was "overwhelming."

In their second argument the Chemical Workers claim that a new trial is required since the jury's partial special verdict in favor of the IAM class is inconsistent with their denial of all claims of the Chemical Workers. It is true that "when a jury returns a verdict by means of answers to special interrogatories, the findings must be consistent with one another," else a new trial must be ordered. E.g., Crockett v. Long Island R.R., 65 F.3d 274, 278 (2d Cir.1995). But there is no necessity for a new trial when the jury returns seemingly inconsistent verdicts with respect to separate claims. See Malm v. United States Lines Co., 269 F.Supp. 731, 731-32 (S.D.N.Y.), aff'd, 378 F.2d 941 (2d Cir.1967) (per curiam). The rule is no...