Della Rocco v. City of Schenectady , 683 N.Y.S.2d 622 ( 1998 )

Carpinello, J.

(dissenting). In my view, there is no contractual impediment to defendant changing the health insurance plan for retired police officers and firefighters as long as all retirees receive the same coverage as active employees. The clause at issue provides: “[Defendant] at its own expense shall provide hospitalization and major medical insurance with coverage equivalent to the plan presently in effect for each member of the Department and his family, and for retired members and their families.” Notably, defendant has not terminated health insurance benefits to its retired employees nor discontinued paying the premiums for said coverage. Rather, the plans through which defendant currently provides health insurance for its active and retired employees now require increased deductibles and copayments to which plaintiffs object.

Contrary to the majority’s interpretation of the contract provision at issue, I do not read it as evincing an intent to guarantee retired members’ health benefits at the same level as those in effect at the time of retirement. Had the parties intended to fix the right to health coverage as of the retirees’ respective retirement dates such that these rights would remain unchanged for the duration of their lives, they could have clearly stated such intention in the agreement. Rather, in my view, this provision requires defendant to provide retirees with health insurance coverage equivalent to that currently being provided to active employees.

The provision at issue in this case has been contained in collective bargaining agreements between the parties since 1969. In 1970, the interpretation of this provision was the subject of arbitration; the issue at that time was whether retirees should share in the cost of health insurance premiums, as they had prior to collective bargaining, or whether defendant was obligated to pay the full cost of such coverage. Interpreting the phrase “[defendant] at its own expense”, the arbitrator determined that defendant must bear the entire premium expense. Significantly, in its July 6, 1972 order confirming the award, Supreme Court (Aulisi, J.) required defendant to provide retired employees “health and hospital insurance of the same value and with the same coverage as [it] is presently providing to the active employees” (Schenectady Patrolmen’s Benevolent Assn. v City of Schenectady, Sup Ct, Schenectady County, July 6, 1972, Aulisi, J.). The court did not order the same coverage as was in effect as of the date of each employee’s retirement. As did Supreme Court in 1972, I read this provision as merely requiring defendant to provide the same health insurance coverage as it presently provides to its active employees.

I acknowledge that the provision clearly reflects an intent that retired employees continue to be provided with health insurance coverage during the entire term of their retirement. Nevertheless, at the very least, the provision at issue is ambiguous as to the level of benefits and a factual issue exists as to the parties’ intent with respect to that issue; to wit, did the parties intend to set the benefit level at the time an employee retired such that it could never be modified and a retiree might indeed be conferred with benefits in excess of the those enjoyed by current employees or did the parties intend that a retiree’s benefit level could fluctuate commensurate with those enjoyed by active employees? The former interpretation may require defendant to obtain an innumerable number of different health insurance plans to accommodate different classes of retirees.

On a motion for summary judgment based upon a written contract, the construction of an unambiguous provision is for the court to rule on and circumstances extrinsic to the agreement will not be considered (see, W. W. W. Assocs. v Giancontieri, 77 NY2d 157, 162-163; West, Weir & Bartel v Mary Carter Paint Co., 25 NY2d 535, 540). Where, however, interpretation of a contract provision is susceptible to at least two reasonable interpretations and the intent of the parties therefore must be gleaned from disputed evidence or inferences outside the written document, an issue of fact is presented (see, Amusement Bus. Underwriters v American Intl. Group, 66 NY2d 878, 880-881; Mallad Constr. Corp. v County Fed. Sav. & Loan Assn., 32 NY2d 285, 291). I believe that, on this record, summary judgment in favor of plaintiffs was inappropriate and I would therefore reverse Supreme Court’s order and judgment.

As a final point, I am also unconvinced that our decision in Myers v City of Schenectady (244 AD2d 845, lv denied 91 NY2d 812) mandates a contrary result. In that case, the collective bargaining agreement specifically identified the health insurance plan to be provided to retirees.

Cardona, P. J., Mercure and Spain, JJ., concur with White, J.; Carpinello, J., dissents in a separate opinion.

Ordered that the order and judgment are affirmed, with costs.