City of Gadsden v. Boman

143 So. 3d 695, 2013 WL 5966767
CourtSupreme Court of Alabama
DecidedNovember 8, 2013
Docket1120579 and 1120633
StatusPublished
Cited by11 cases

This text of 143 So. 3d 695 (City of Gadsden v. Boman) is published on Counsel Stack Legal Research, covering Supreme Court of Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Gadsden v. Boman, 143 So. 3d 695, 2013 WL 5966767 (Ala. 2013).

Opinions

BRYAN, Justice.

The City of Gadsden (“Gadsden”) and certain members of the State Employees’ Insurance Board (“the Board”) appeal two orders of the Etowah Circuit Court, in which the court granted injunctive relief to John Boman. We reverse the orders and remand the cause for further proceedings.

In City of Gadsden v. Boman, 104 So.3d 882 (2012) (hereinafter referred to as “Boman I ”), this Court set forth many of the relevant facts related to the action underlying these consolidated appeals:

“John Boman worked as a [Gadsden] police officer from 1965 until he retired in 1991. At the time of his retirement, police officers were operating under provisions of the ‘City of Gadsden Employee Handbook: Police Department (ed. 1989-1992)’ (‘the handbook’). In § 26, entitled ‘employee benefit plan,’ the handbook listed ‘Major Medical benefits — 80% UCR [usual, customary, and reasonable charges] for the first $10,000 with 100% of covered expenses ... each year after $2,000 annual out-of-pocket per person.’ The employee-benefit plan was issued and administered by Blue Cross and Blue Shield of Alabama (‘Blue Cross’).
“In 2000, Gadsden elected to join the ‘Local Government Health Insurance Plan’ (‘the [State] plan’), a ‘self-insurance health benefit plan administered by the State Employees’ Insurance Board’ (‘the Board’). The claims administrator for the [State] plan was Blue Cross. The [State] plan stated, in pertinent part:
“ ‘Retired Employees
‘Health benefits will be modified when you or your dependent becomes [698]*698entitled to Medicare. Coverage under this plan will be reduced by those benefits payable under Medicare, Parts A and B....
“ ‘The [State plan] remains primary for retirees until the retiree is entitled to Medicare. Upon Medicare entitlement, the member’s coverage under the [State plan] will complement his/ her Medicare Parts A and B coverages. Medicare will be the primary payer and the [State plan] will be the secondary payer. A Medicare retiree and/or Medicare dependent should have both Medicare Parts A and B to have adequate coverage with the [State plan].’
“(Some emphasis added; some emphasis omitted.)
“When Boman turned 65 in 2011, he was receiving medical care for ‘congestive heart failure’ and ‘severe osteoarthritis of the spine.’ After his 65th birthday, Blue Cross began denying his claims for medical treatment based on the failure to provide Blue Cross with a ‘record of the Medicare payment.’ However, Boman had no Medicare credits....
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“... [Although Gadsden did begin participation in the Medicare program in 2006, Boman’s employee group had not opted to obtain Medicare coverage before Boman retired. Consequently, Bo-man never paid Medicare taxes and does not claim to have Medicare coverage.
“When the dispute over coverage arose, Boman sought review by the Board. In response, he received a letter dated March 30, 2011, from James J. Bradford, general counsel for the Board, which stated, in pertinent part:
“ ‘The [State plan] becomes secondary when a retiree becomes entitled to Medicare. In order to have no gaps in coverage a retiree must have both Parts A and B. This requirement is published in the benefits handbook that every employee and retiree receives each year. All employees and retirees are, therefore, on notice of this requirement.
“ ‘Although I can appreciate Mr. Bo-man’s situation, the [Board] must strictly enforce the [State] plan provisions. If the [Board] granted an exception to the [State plan’s] Medicare secondary provisions for retirees of units, who for their own financial purposes decided not to participate in Medicare, it would result in all units who do participate in Medicare subsidizing the cost of the retirees of those units who do not participate. As fiduciaries of the [State plan] the [Board] cannot allow such a practice. Accordingly, your request for the [State plan] to remain Mr. Boman’s primary coverage cannot be granted.
“ ‘Appeals are limited to exclusions or exceptions to coverage based on extenuating or extraordinary circumstances or policy issues not recently addressed or previously contemplated by the [Board]. The Medicare secondary provisions of the [State plan] have been in place since the inception of the [State] plan in 1993 and have been enforced without exception since that time, regardless of whether the employer unit participates in Medicare. The fact that the City of Gadsden did not begin its participation in Medicare until 2006 does not meet the criteria necessary to allow an appeal of the application of the [State plan’s] Medicare secondary provisions. Mr. Boman’s request for an appeal is, therefore, denied.’
“Meanwhile, as early as November 3, 2009, Boman and 18 other active and retired Gadsden police officers sued Gadsden, alleging, among other things, [699]*699that they had ‘been deprived of Social Security and Medicare protection which other police officers have been provided’ and that, after 20 years of service, they were being required to pay a higher pension charge or percentage of base pay than their counterparts who were hired after April 1, 1986. On May 2, 2011, Boman filed a ‘motion for immediate relief for medical care.’ He alleged that, when he was hired, Gadsden ‘provided police and firemen a 20 year retirement program whereby police and firemen would receive 50% retirement benefits after 20 years of service and lifetime medical care.’ He averred that Gadsden had ‘breached its contract with [him] to provide continuing medical insurance,’ and he requested ‘immediate relief by ordering [Gadsden] to pay for [his] medical care or in the alternative ordering [Gadsden] to pay for Medicare coverage for ... Boman so he will have continuing medical insurance as agreed by [Gadsden].2 On July 8, 2011, Gadsden filed a ‘motion for joinder of indispensable parties,’ pursuant to Rule 19, Ala. R. Civ. P. The motion alleged, in pertinent part[, that the Board and the State plan should be joined to the action].
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“... [0]n August 1, 2011, Boman and the other officers filed a 12th amended complaint. It named as additional defendants the Board and the [State] plan. It also added distinct claims by Boman ‘for benefits’ and alleged the torts of bad faith and outrage against Gadsden. Central to this appeal is the allegation in the complaint that
“ ‘the Defendants have interpreted the State’s medical plan as secondary to Medicare even though the City of Gadsden never gave Plaintiff Boman the opportunity to participate in Medicare. Therefore, Plaintiff Boman is not Medicare eligible. Plaintiff Bo-man is not eligible for medical care because the State medical plan is secondary to Medicare and Boman does not have Medicare.’
“(Emphasis added.) Boman alleged that his ‘rights to medical care [had] vested and [could not] be modified or reduced.’ He sought ‘injunctive emergency relief requiring [Gadsden] and Defendants to provide continuing medical care and a judgment for any unpaid medical bills which [were] due and owing.’

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Bluebook (online)
143 So. 3d 695, 2013 WL 5966767, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-gadsden-v-boman-ala-2013.