Arcurio v. Greater Johnstown School District

630 A.2d 529, 157 Pa. Commw. 525, 1993 Pa. Commw. LEXIS 503

• Court: Commonwealth Court of Pennsylvania
• Decided: August 6, 1993
• Docket: No. 2045 C.D. 1992
• Status: Published

Opinions

NARICK, Senior Judge.

Greater Johnstown School District (District) appeals from the order of the Court of Common Pleas of Cambria County that awarded Robert Arcurio damages for an improper furlough. We affirm in part and reverse in part.

In 1985, Arcurio filed a declaratory judgment action against the District and the Greater Johnstown Education Association, contending that he was improperly furloughed from his teaching position with the District. After a long procedural history, the trial court eventually determined that Arcurio had been improperly furloughed. The trial court then held a hearing on damages. Arcurio and the District mutually agreed on all aspects of damages owed because of the improper furlough, with the exception of damages because of the District’s failure to provide Arcurio with health, life, dental and vision insurance during the furlough. Arcurio contended that he was entitled to a monetary award in the amount which the District would have expended to procure insurance for Arcurio had he not been furloughed. Conversely, the District contended that the proper measure of damages for loss of insurance coverage was the amount which Arcurio actually spent 1) to obtain replacement insurance coverage; and 2) for medical expenses which would have been covered by the District’s insurance policies had Arcurio remained covered.

By order dated September 3, 1992, the trial court awarded Arcurio the following damages: 1) that amount which the District would have expended during the period of Arcurio’s furlough to include Arcurio in the District’s health, life, vision and dental insurance policies; and 2) those amounts which Arcurio actually spent either to obtain replacement insurance coverage or in payment of medical expenses during the period of his furlough.

On appeal,¹ the District argues that the proper measure of damages for a loss of insurance benefits to an improperly furloughed employee is reimbursement of the employee’s expenditures for alternative insurance coverage or those medical expenses the employee expended which would have been covered by the employer’s insurance policies. However, Arcurio asserts that the damages necessary to make him whole must include payment for lost “compensation” caused by his improper furlough, citing Woodland Hills Education Association v. Woodland Hills School District, 96 Pa.Commonwealth Ct. 502, 508 A.2d 365 (1986). Arcurio asserts that under the terms of his collective bargaining agreement his health benefits should be considered lost compensation, thereby entitling him to reimbursement for the amounts the District would have expended had Arcurio not been improperly furloughed. However, in Woodland Hills, we determined only that the provision of insurance coverage to employees during a strike constituted “compensation” within the meaning of the Public Employee Relations Act, Act of July 23, 1970, P.L. 563, 43 P.S. §§ 1101.101-1101.2301, which prohibits the provision of compensation to striking employees. Woodland Hills does not involve the issue of the proper measure of damages for lost insurance benefits.

Courts have consistently rejected claims to recover the employer’s cost of lost insurance benefits, holding instead that the employee is entitled only to 1) premiums paid by the employee to obtain alternative insurance coverage; and 2) medical expenses paid by the employee which would have been covered by the employer’s insurance plan. See Kossman v. Calamet County, 800 F.2d 697 (7th Cir.1986); Galindo v. Stoody Co., 793 F.2d 1502 (9th Cir.1986); McAleer v. McNally Pittsburgh Manufacturing Co., 329 F.2d 273 (3rd Cir.1964).

In Kossman, the court explained that:

Including the cost of insurance coverage in a back pay award when the victim of discrimination fails to secure alternative coverage allows the victim to recover an unwarranted windfall unless he or she can demonstrate that they were unable to secure coverage and had a medical ex-pense____ [Plaintiffs] must establish that in fact they incurred expenses in securing alternative insurance coverage or incurred medical expenses that would have been covered under the [employer’s] insurance program had they not been terminated____

800 F.2d at 703-04.

Therefore, we hold that the proper measure of damages is limited to Arcurio’s actual losses, i.e., his out-of-pocket expenses for insurance premiums or those medical expenses which would have been covered by the District’s insurance program.

Accordingly the order of the trial court is affirmed in part and reversed in part in accordance with the foregoing opinion.

ORDER

AND NOW, this 6th day of August, 1993, the order of the Court of Common Pleas of Cambria County in the above-captioned matter is hereby affirmed in part and reversed in part in accordance with the foregoing opinion.

1 . Our scope of review from the trial court's order is limited to a determination of whether the trial court abused its discretion or committed an error of law. Mann v. City of Philadelphia, 128 Pa.Commonwealth Ct. 499, 563 A.2d 1284, appeal denied, 525 Pa. 622, 577 A.2d 892 (1989).