Pontiac Police & Fire Retiree Prefunded Group Health & Insurance Trust Board of Trustees v. City of Pontiac No 2

873 N.W.2d 783, 309 Mich. App. 611, 2015 Mich. App. LEXIS 560
CourtMichigan Court of Appeals
DecidedMarch 17, 2015
DocketDocket 316680
StatusPublished
Cited by69 cases

This text of 873 N.W.2d 783 (Pontiac Police & Fire Retiree Prefunded Group Health & Insurance Trust Board of Trustees v. City of Pontiac No 2) is published on Counsel Stack Legal Research, covering Michigan Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pontiac Police & Fire Retiree Prefunded Group Health & Insurance Trust Board of Trustees v. City of Pontiac No 2, 873 N.W.2d 783, 309 Mich. App. 611, 2015 Mich. App. LEXIS 560 (Mich. Ct. App. 2015).

Opinion

PER CURIAM.

Plaintiff Board of Trustees of the City of Pontiac Police and Fire Retiree Prefunded Group *614 Health and Insurance Trust (board of trustees or trustees) appeals by right Oakland Circuit Judge Shalina D. Kumar’s order granting defendant’s motion for summary disposition under MCR 2.116(C)(5) (lack of standing), (C)(8) (failure to state a claim), and (C)(10) (no genuine issue of material fact). We affirm.

I. FACTS AND PROCEEDINGS

The Board of Trustees of the City of Pontiac Police and Fire Retirement System (retirement system trustees) and plaintiff trustees filed a complaint in circuit court asserting that defendant funded the City of Pontiac Police and Fire Retirement System, which provided retirement benefits to retired police and firefighters. Plaintiffs also asserted that defendant funded the City of Pontiac Police and Fire Retiree Prefunded Group Health and Insurance Plan (the trust), a tax-exempt voluntary employees’ beneficiary association, 26 USC 501(c)(9), which provided health, optical, dental, and life-insurance benefits to police and firefighters who retired on or after August 22,1996. The trust’s board of trustees is composed of five members: the city’s mayor, the city’s finance director, a firefighter, a police officer, and a fifth trustee whom the other trustees would select and who could participate in the trust. 1

During the fiscal year ending June 30, 2012, the city’s emergency manager (EM), Louis Schimmel, entered into termination collective bargaining agree *615 ments (CBAs) with the various police and firefighter unions. The EM acted under the authority of § 19(l)(k) of 2011 PA 4, MCL 141.1519(l)(k). 2 The city also contracted to receive police services from Oakland County effective August 1, 2011, and fire services from Waterford Township, effective February 1, 2012. As of April 24, 2012, the CBAs outlining benefits funded by the trust included the Police Supervisors Contract Termination Agreement, the Police Non-Command Contract Termination Agreement, the Fire Contract Termination Agreement, the Police Supervisors Collective Bargaining Agreement, the Police Non-Command Collective Bargaining Agreement, and the Fire Collective Bargaining Agreement. On April 25, 2012, the city’s EM issued Executive Orders 206 and 207, which modified the healthcare benefits set forth in the various CBAs. The executive orders were identical, with Executive Order 206 applying to firefighter retirees and Executive Order 207 applying to police retirees. Executive Orders 206 and 207 took effect on July 1, 2012, and modified retirees’ healthcare benefits by requiring pre-Medicare-aged retirees to enroll in a Humana PPO-08 Plan, limiting Medicare-aged retirees to a Medicare Advantage Plan G, eliminating defendant’s reimbursement of retirees’ Medicare Part B premium, and requiring pre-Medicare-aged retirees to pay the amount above the “hard cap” of 2011 PA 152 or pay 20 percent of annual rates, whichever is greater.

*616 On August 29, 2012, a stipulated order of dismissal was entered as to the claim of the retirement system trustees because of Executive Order 224, which memorialized a settlement. On the same day, a stipulated order was entered authorizing plaintiff board of trustees 3 to file an amended complaint alleging that the city improperly reduced retiree healthcare benefits through Executive Orders 206 and 207. Count I alleged a violation of Const 1963, art 9, § 24; Count II alleged that through Executive Order 225 the city improperly sought to amend the trust by eliminating its obligation to financially contribute to the trust, 4 and Count III alleged a breach of contract claim. Plaintiff sought a declaratory ruling, an injunction, and monetary damages.

On February 13, 2013, the city moved for summary disposition under MCR 2.116(C)(5), (C)(8), and (C)(10). In its supporting brief the city argued that plaintiff trustees lacked standing to sue for a certain level of healthcare benefits because it was not responsible for the level of retirees’ healthcare benefits. Rather, the city argued, the board of trustees was only responsible for ensuring compliance with the Internal Revenue Code, managing and investing trust funds, and providing health, optical, dental, and life-insurance benefits to police and firefighters who retired on or after August 22, 1996, as required by the various CBAs. The city also argued that Count I was meritless because of our Supreme Court’s holding in Studier v Mich Pub Sch Employees Retirement Bd, 472 Mich 642; 698 NW2d 350 (2005), that healthcare *617 benefits are not protected by Const 1963, art 9, § 24, and that Count III was meritless because the emergency manager had the authority under 2011 PA 4 to unilaterally modify collective bargaining agreements.

On May 22, 2013, the trial court entered its opinion and order granting defendant’s motion for summary disposition. The trial court first concluded that the trustees had standing:

Pursuant to the language of the Trust Agreement, Plaintiff is responsible for ensuring the Trust’s compliance with the Internal Revenue Code, as well as investing, managing, and controlling the Trust’s assets. In addition, Plaintiff has the “right and duty to enforce . . . the performance of all obligations provided in th[e] Trust.” As Plaintiff is the entity responsible for the Trust’s assets and required to enforce each obligation set forth in the Trust, Plaintiff has standing to bring the instant lawsuit.

The trial court then concluded that Count I was meritless because healthcare benefits are not protected by Const 1963, art 9, § 24. The trial court also concluded that Count III was meritless because the emergency manager validly amended the various CBAs pursuant to the authority granted by 2011 PA 4.

II. STANDARD OF REVIEW

Although the trial court did not identify under which subrule it granted summary disposition, we review the trial court’s decision under the standard applicable to MCR 2.116(0(10) “because the trial court’s consideration went beyond the parties’ pleadings.” Kosmalski v St John’s Lutheran Church, 261 Mich App 56, 59; 680 NW2d 50 (2004). We review de novo a trial court’s decision regarding a motion for summary disposition under MCR 2.116(0(10), which tests the factual sufficiency of a claim. Corley v Detroit Bd of Ed, 470 Mich *618 274, 277-278; 681 NW2d 342 (2004). In deciding the motion, the trial court must view the substantively admissible evidence submitted up to the time of the motion in a light most favorable to the party opposing the motion. Maiden v Rozwood, 461 Mich 109, 120-121; 597 NW2d 817 (1999). Summary disposition may be granted “if there is no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law.” West v Gen Motors Corp, 469 Mich 177, 183; 665 NW2d 468 (2003).

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873 N.W.2d 783, 309 Mich. App. 611, 2015 Mich. App. LEXIS 560, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pontiac-police-fire-retiree-prefunded-group-health-insurance-trust-michctapp-2015.