Patricia Botelho v. City of Pawtucket School Department , 2016 R.I. LEXIS 4 ( 2016 )

Supreme Court
No. 2014-303-Appeal.
(PC 08-7136)
(Dissent begins on page 9)
Patricia Botelho et al. :
v. :
City of Pawtucket School Department et al. :
NOTICE: This opinion is subject to formal revision before
publication in the Rhode Island Reporter. Readers are requested to
notify the Opinion Analyst, Supreme Court of Rhode Island, 250
Benefit Street, Providence, Rhode Island 02903, at Telephone 222-
3258 of any typographical or other formal errors in order that
corrections may be made before the opinion is published.
Supreme Court
No. 2014-303-Appeal.
(PC 08-7136)
(Dissent begins on page 9)
Patricia Botelho et al. :
v. :
City of Pawtucket School Department et al. :
Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.
OPINION
Chief Justice Suttell, for the Court. The City of Pawtucket, its school department, and
its school committee (collectively, defendants)1 appeal from a grant of summary judgment in
favor of the plaintiffs,2 sixteen retirees from nonteaching union positions with the school
department. The plaintiffs had sought reimbursement of the health insurance co-payments that
they paid after the defendants allegedly breached a series of collective-bargaining agreements
(CBAs). This case came before the Supreme Court pursuant to an order directing the parties to
appear and show cause why the issue raised in this appeal should not be summarily decided.
After considering the parties’ written and oral submissions and reviewing the record, we
conclude that cause has not been shown and that this case may be decided without further
1
The City of Pawtucket School Department was named a defendant by and through its
superintendent, Patricia DiCenso; the Pawtucket School Committee was named a defendant by
and through its members Michael Araujo, Gerard Charbonneau, Katherine McQuade, Kimberly
Grant, Joseph Knight, and Erin Dube; and the City of Pawtucket was named a defendant by and
through its finance director, Ronald F. Wunschel.
2
The sixteen plaintiffs were: Patricia Botelho, Walter Byrnes, Joan Calabro, Karen Carrell,
Matilda Correia, Mary Jane Dion, Diane Drywa, Dolores Flanagan, Margaret Garant, Estelle
Petit, Linda Ruddy, Louise Shea, Margaret Silva, Beverly Walsh, Glenn Watson, and Mary Ellen
Zuba.
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briefing or argument. For the reasons set forth in this opinion, we vacate the judgment of the
Superior Court.
I
Facts and Travel
Each of the sixteen plaintiffs in this case was a member of Rhode Island Council 94,
A.F.S.C.M.E., AFL-CIO, Local 1352 (union), and retired between 1999 and 2007 after having
rendered at least fifteen years of service to the school department. At the time of each plaintiff’s
retirement, a CBA was in place between the union and the school committee. Because the
sixteen plaintiffs retired over a period of eight years, they retired while four different CBAs were
in effect.3 The health insurance benefits were provided in Article 19, and these benefits did not
change from one CBA to the next. Article 19.5 of each CBA stated, in its entirety:
“Upon retirement, an employee who has reached the age of fifty-
eight (58) years or more, and has been a member of the Pawtucket
School Department staff fifteen (15) years or more shall receive
Family coverage under Blue Cross/Blue Shield and Delta Dental
plans. This benefit shall extend until the retired employee is
eligible for coverage under Medicare.”
Until August 2007, plaintiffs were not required to contribute any co-payments related to
their health insurance benefits. Individuals who were actively employed by the school
department also received fully-paid health insurance until August 2007, when an arbitrator ruled
that active nonteaching employees should contribute to the cost of the health insurance policies.
An arbitrator had been brought in to resolve an impasse that had been reached during the
negotiations between the union and the school department for the CBA covering the period from
3
The collective bargaining agreement (CBA) in effect when the first plaintiff retired covered
July 1, 1999 to June 30, 2002. The next CBA was in effect from July 1, 2002 to June 30, 2004,
the next CBA from July 1, 2004 to December 31, 2005, and the final CBA was in effect from
January 1, 2006 to June 30, 2007.
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July 1, 2007 to June 30, 2010 (2007-2010 CBA). Article 19 of 2007-2010 CBA contained a new
provision; pursuant to Article 19.10, “bargaining unit employees” were required to contribute co-
payments toward their health and dental insurance. Article 19.5 remained the same in the 2007-
2010 CBA, but the school department began billing plaintiffs for health insurance co-payments,
and at least ten plaintiffs paid the co-payments billed to them.
The plaintiffs filed a complaint in Superior Court on November 12, 2008, seeking a
declaratory judgment pursuant to G.L. 1956 chapter 30 of title 9 that: (1) they were entitled to
free health insurance coverage until eligible for Medicare pursuant to the CBA that was in effect
at the time of each plaintiff’s respective retirement, (2) defendants breached the CBAs by
requiring plaintiffs to contribute to the cost of the health insurance coverage, and (3) defendants
were obligated to reimburse plaintiffs for all co-payments paid since August 2007 (collectively,
count 1). The complaint also set forth a count for breach of contract, seeking damages in the
amount of the co-payments each plaintiff had paid since August 2007 (count 2) and a count for
promissory estoppel (count 3).4 After the parties submitted memoranda of law addressing
plaintiffs’ request for a declaratory judgment, a hearing justice of the Superior Court issued a
decision in April 2010 declaring that “[p]laintiff[s’] rights to retiree health insurance benefits
vested under the terms of the CBA in effect at the time of each individual’s retirement.” In light
of the record before him, however, the hearing justice declined to declare that defendants had
breached the CBAs when they billed plaintiffs for the co-payments.
Thereafter, plaintiffs filed a motion for summary judgment on their claims for declaratory
judgment and breach of contract, and included, inter alia, a copy of each complete CBA in effect
4
The complaint named only the City of Pawtucket School Department (by and through its
superintendent) and the school committee (by and through its members) as defendants, but was
later amended to include defendant City of Pawtucket (by and through its finance director). The
allegations and claims in the amended complaint remained the same as in the original complaint.
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when each plaintiff retired as exhibits in support of their motion. The defendants objected to
plaintiffs’ motion and filed a cross-motion for summary judgment. A second hearing justice of
the Superior Court rendered a decision on January 5, 2012, concluding that the CBAs
unambiguously provided plaintiffs with free health and dental insurance as offered at the time of
each plaintiff’s respective retirement until each plaintiff reached the age of eligibility for
Medicare. The hearing justice granted plaintiffs’ motion, denied defendants’ cross-motion, and
ordered a future hearing to assess plaintiffs’ damages. The parties subsequently entered a
stipulation regarding the assessment of damages for each plaintiff. Soon thereafter, plaintiffs
filed a motion seeking a supplemental order from the court that enjoined defendants from
requiring any further payments from them for the maintenance of their health insurance benefits.
The court granted plaintiffs’ motion. Final judgment entered in favor of plaintiffs on September
2, 2014 on their motions for: (1) summary judgment on the breach of contract and declaratory
judgment claims, (2) assessment of damages, and (3) injunctive relief.5 The defendants timely
appealed from the portion of the judgment granting plaintiffs’ motion for summary judgment.
II
Standard of Review
“The grant of a motion for summary judgment is reviewed by this Court de novo,
employing the same standards and rules used by the hearing justice.” The Law Firm of Thomas
A. Tarro, III v. Checrallah, 60 A.3d 598, 601 (R.I. 2013) (quoting Great American E & S
Insurance Co. v. End Zone Pub & Grill of Narragansett, Inc., 45 A.3d 571, 574 (R.I. 2012)). “It
is a fundamental principle that [s]ummary judgment is a drastic remedy, and a motion for
summary judgment should be dealt with cautiously.” Id. (quoting Employers Mutual Casualty
5
The final judgment also stated that plaintiffs had dismissed their claim for promissory estoppel.
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Co. v. Arbella Protection Insurance Co., 24 A.3d 544, 553 (R.I. 2011)). “We will affirm a lower
court’s decision only if, after reviewing the admissible evidence in the light most favorable to the
nonmoving party, we conclude that no genuine issue of material fact exists and that the moving
party is entitled to judgment as a matter of law.” Id. (quoting Great American E & S Insurance
Co., 45 A.3d at 574). “[T]he nonmoving party bears the burden of proving by competent
evidence the existence of a disputed issue of material fact and cannot rest upon mere allegations
or denials in the pleadings, mere conclusions or mere legal opinions.” Id. (quoting Great
American E & S Insurance Co., 45 A.3d at 574).
III
Discussion
Our analysis of a CBA “is guided by long-established rules of contract interpretation.”
State v. Rhode Island Employment Security Alliance, Local 401, SEIU, AFL-CIO, 840 A.2d
1093, 1096 (R.I. 2003). “The determination of whether a contract’s terms are ambiguous is a
question of law to be decided by the court.” JPL Livery Services, Inc. v. Rhode Island
Department of Administration, 88 A.3d 1134, 1142 (R.I. 2014). We review questions of law de
novo. Id. A term in a contract is ambiguous when it is “reasonably and clearly susceptible to
more than one rational interpretation.” Miller v. Saunders, 80 A.3d 44, 49 (R.I. 2013) (quoting
DiPaola v. DiPaola, 16 A.3d 571, 576 (R.I. 2011)). In determining whether language in a
contract is ambiguous, “we give words their plain, ordinary, and usual meaning. * * * The
subjective intent of the parties may not properly be considered by the Court; rather, we consider
the intent expressed by the language of the contract.” JPL Livery Services, Inc., 88 A.3d at 1142
(quoting Furtado v. Goncalves, 63 A.3d 533, 537 (R.I. 2013)). “[I]n situations in which the
language of a contractual agreement is plain and unambiguous, its meaning should be determined
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without reference to extrinsic facts or aids.” Id. (quoting Furtado, 63 A.3d at 537). However,
“[w]hen reviewing contracts, it is clear that this Court ‘should not * * * stretch its imagination in
order to read ambiguity into a [contract] where none is present.’” City of East Providence v.
United Steelworkers of America, Local 15509, 925 A.2d 246, 251-52 (R.I. 2007) (quoting
Garden City Treatment Center, Inc. v. Coordinated Health Partners, Inc., 852 A.2d 535, 542 (R.I.
2004)).
In the case at bar, each CBA in effect at the time of plaintiffs’ individual retirement dates
contained the identical Article 19 entitled “Medical Insurance.” The plain and unambiguous
language of Article 19.5 provided that employees “shall receive [f]amily coverage under Blue
Cross/Blue Shield and Delta Dental plans” starting when the employee retired and continuing
until the retired employee was eligible for Medicare, as long as the employee was at least fifty-
eight years old at the time of retirement and had been “a member of the Pawtucket School
Department staff” for at least fifteen years. That plaintiffs received this benefit at no cost to
them until August 2007 is an undisputed fact. Article 19.5, however, does not contain any
language to indicate whether this was a benefit to which retirees were expected to contribute a
co-payment if requested, or whether the benefit was intended to provide retirees with free health
insurance until they became eligible for Medicare.
In plaintiffs’ memorandum of law in support of their motion for summary judgment, they
argued that the absence of language in Article 19 indicating that the terms of retiree benefits
could change to match a negotiated or arbitrated change to the terms of the active employees’
benefits unambiguously meant that plaintiffs were entitled to free health insurance upon meeting
the conditions in Article 19.5. In support of their argument, plaintiffs provided eleven affidavits
attesting to the understanding by ten plaintiffs and the union’s business agent that the benefits
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were intended to be provided to retirees at no cost, and had been provided at no cost until August
2007. In defendants’ memorandum of law in opposition to the motion for summary judgment,
they argued that the CBAs had not promised plaintiffs free health insurance upon retirement and
that past practice demonstrated that retirees were simply entitled to receive benefits according to
the same terms as the benefits for active employees. In support of their argument, defendants
provided two affidavits from Thomas Conlon, the longtime business administrator for the
Pawtucket School Department. Mr. Conlon averred that, from 1996 to 2007, retirees had been
permitted to participate in the same health insurance plans offered to the active employees,
including plans from companies other than Blue Cross/Blue Shield (e.g., United Health). Mr.
Conlon also averred that neither the union nor the school department ever expressed an intent to
provide retirees with free medical benefits, but also that, to the best of his recollection, the issue
of co-payment had not arisen during negotiations. Since the language of Article 19.5 is silent
with respect to whether retirees were to be provided with free health insurance benefits or were
expected to pay a co-payment for the benefit, coupled with evidence that the benefits actually
provided to plaintiffs did not follow Article 19.5 to the letter, we conclude that Article 19 is
“reasonably and clearly susceptible to more than one rational interpretation,” and is, therefore,
ambiguous. Miller, 80 A.3d at 49 (quoting DiPaola, 16 A.3d at 576).
“[A]lthough contract interpretation is a question of law, when the contract terms are
ambiguous, interpretation of the terms becomes a question of fact.” Inland American Retail
Management LLC v. Cinemaworld of Florida, Inc., 68 A.3d 457, 464 (R.I. 2013). We have
often recognized that “[a]n ambiguity in a contract cannot be resolved on summary judgment.”
Garden City Treatment Center, Inc., 852 A.2d at 541 (quoting Rubery v. Downing Corp., 760
A.2d 945, 947 (R.I. 2000)); see also Rotelli v. Catanzaro, 686 A.2d 91, 95 (R.I. 1996). “When a
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contract is ambiguous, and the pleadings, discovery materials, and affidavits indicate a dispute in
respect to the parties’ intent, there exists a genuine issue of material fact that must be resolved by
the trier of fact.” Rotelli, 686 A.2d at 95. For example, “[i]f the affidavit of [a] nonmoving party
alleges facts that, if believed, would constitute a valid defense, the affidavit must be taken as true
and the motion denied.” Plainfield Pike Gas & Convenience, LLC v. 1889 Plainfield Pike Realty
Corp., 994 A.2d 54, 57 (R.I. 2010) (quoting Rotelli, 686 A.2d at 93).
After considering the affidavits that both parties submitted with their memoranda in
support of their respective positions on the cross-motions for summary judgment, it is apparent
that the union and the school committee, as the parties to the CBAs, had conflicting intents with
respect to the level of payment expected from retirees for the health insurance benefits. It is our
opinion, therefore, that an issue of material fact exists regarding whether the defendants breached
the CBAs when they billed the plaintiffs in 2007 for the health insurance co-payments. See
Inland American Retail Management LLC, 68 A.3d at 465 (“summary judgment is inappropriate
where references to extrinsic evidence and the surrounding circumstances must be relied on to
discern the intent of the contracting parties”). Since “[t]he purpose of the summary-judgment
procedure is to identify disputed issues of fact necessitating trial, [and] not to resolve such
issues,” the issue of material fact in this case should have precluded the grant of summary
judgment in favor of the plaintiffs. See Plainfield Pike Gas & Convenience, LLC, 994 A.2d at 58
(quoting Rotelli, 686 A.2d at 93).
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IV
Conclusion
For the reasons stated herein, we vacate the judgment entered in favor of the plaintiffs
and remand this case to the Superior Court to conduct further proceedings consistent herewith.
Justice Robinson, dissenting. I dissent; I do so respectfully, but nonetheless most
vigorously. I am entirely unable to reconcile the holding of the majority with fundamental
principles of the Anglo-American law of contracts. The agreement before us is, in my judgment,
completely clear and totally unambiguous. As such, I read it as imposing absolutely no co-
payment requirement on the retirees who are the plaintiffs in this lawsuit.
Upon perusing the majority’s opinion, it quickly became clear to me that the underlying
premise of the majority’s reasoning is that silence connotes ambiguity. However, there is no
warrant in our law for saying that silence somehow creates ambiguity in a case such as the one
presently before us. I am not aware of any opinion from this Court that stands for such a
proposition, but I am aware that there is explicit language in cases from other jurisdictions that
rejects that notion. See, e.g., Consolidated Bearings Co. v. Ehret-Krohn Corp., 913 F.2d 1224,
1233 (7th Cir. 1990) (“Silence creates ambiguity * * * only when the silence involves a matter
naturally within the scope of the contract as written. A contract is not ambiguous merely
because it fails to address some contingency; the general presumption is that the rights of the
parties are limited to the terms expressed in the contract.”) (internal quotation marks omitted);
Nissho Iwai Europe PLC v. Korea First Bank, 782 N.E.2d 55, 60 (N.Y. 2002) (“[A]mbiguity
does not arise from silence, but from what was written so blindly and imperfectly that its
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meaning is doubtful.”) (internal quotation marks omitted).1 Accordingly, I am simply unable to
reconcile the majority’s approach with settled principles of the law of contracts. We are not
confronted with a case where the maxim of “necessary implication” applies. The agreement at
issue is fully self-explanatory in and of itself. It says what it says; and, it says nothing about a
co-payment.
Since I consider the agreement at issue to be unambiguous, I next turn to one of the most
basic principles of contract law which has been summarized as follows: “Under established
contract law principles, when there is an unambiguous contract and no proof of duress or the
like, the terms of the contract are to be applied as written.” Gorman v. Gorman, 883 A.2d 732,
739 n.11 (R.I. 2005) (emphasis added); see also Rivera v. Gagnon, 847 A.2d 280, 284 (R.I.
2004). When the terms of the contract at issue are applied as written, it is immediately clear that
there is no requirement that plaintiffs pay a co-payment for their medical care.
The City of Pawtucket may have belatedly come to believe that its agreement with the
retirees was overly generous. But the demotic saying that “a deal is a deal” is plainly applicable
in such a situation. As this Court has declared: “It is a basic tenet of contract law that the
contracting parties can make as ‘good a deal or as bad a deal’ as they see fit * * *.” Rodrigues v.
DePasquale Building and Realty Co., 926 A.2d 616, 624 (R.I. 2007) (quoting Durfee v. Ocean
State Steel, Inc., 636 A.2d 698, 703 (R.I. 1994)); see Grady v. Grady, 504 A.2d 444, 447 (R.I.
1986) (“That a contract’s performance becomes more difficult or expensive than originally
1
It should be borne in mind that we are not confronted with something entirely extraneous
to what was agreed to (e.g., whether payment should be made in cash or by check). Rather the
co-payment provision materially adds to the financial burden on the retirees; the change from no
co-payment to the requirement that they make a co-payment constitutes a new contractual term
that was never the subject of bargaining.
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anticipated does not justify setting it aside.”); see also Mansolillo v. Employee Retirement Board
of Providence, 668 A.2d 313, 317 (R.I. 1995).
For the reasons stated herein, I would affirm the judgment of the Superior Court.
Accordingly, I must record my respectful but forceful dissent with respect to the majority’s
opinion in this case.
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RHODE ISLAND SUPREME COURT CLERK’S OFFICE
Clerk’s Office Order/Opinion Cover Sheet
TITLE OF CASE: Patricia Botelho et al. v. City of Pawtucket School Department et
al.
CASE NO: No. 2014-303-Appeal.
(PC 08-7136)
COURT: Supreme Court
DATE OPINION FILED: January 13, 2016
JUSTICES: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.
WRITTEN BY: Chief Justice Paul A. Suttell
SOURCE OF APPEAL: Providence County Superior Court
JUDGE FROM LOWER COURT:
Associate Justice Sarah Taft-Carter
ATTORNEYS ON APPEAL:
For Plaintiffs: Carly B. Iafrate, Esq.
Gerard P. Cobleigh, Esq.
For Defendants: Jon M. Anderson, Esq.
Frank J. Milos, Jr., Esq.
Stephen M. Robinson, Esq.
Vicki J. Bejma, Esq.