Herschel Marshall v. The City of Huntington and Steve Williams ( 2020 )

STATE OF WEST VIRGINIA
SUPREME COURT OF APPEALS
Herschel Marshall,
Plaintiff Below, Petitioner FILED
December 7, 2020
vs.) No. 19-0973 (Cabell County 17-C-154) EDYTHE NASH GAISER, CLERK
SUPREME COURT OF APPEALS
OF WEST VIRGINIA
The City of Huntington, a municipal corporation,
and Steve Williams, Mayor,
Defendants Below, Respondents
MEMORANDUM DECISION
Petitioner Herschel Marshall, by counsel Bert Ketchum, appeals the Circuit Court of Cabell
County’s October 31, 2019, order granting summary judgment to respondents. Respondents the
City of Huntington, a municipal corporation, and Steve Williams, Mayor of the City of Huntington,
by counsel, Ancil Ramey, filed a response to which petitioner submitted a reply.
This Court has considered the parties’ briefs and the record on appeal. The facts and legal
arguments are adequately presented, and the decisional process would not be significantly aided
by oral argument. Upon consideration of the standard of review, the briefs, and the record
presented, the Court finds no substantial question of law and no prejudicial error. For these reasons,
a memorandum decision is appropriate under Rule 21 of the Rules of Appellate Procedure.
Petitioner worked for twenty-four years as a firefighter for the City of Huntington (“City”)
before retiring on October 20, 2000. During his tenure as a firefighter, the City and the
International Association of Firefighters Local Union 289 (“the Union”) entered into a Collective
Bargaining Agreement (“CBA”) that went into effect on November 1, 1999, and terminated on
December 31, 2003. Under that CBA, “[t]he firefighter upon retirement will have the option to
participate in any or all available health benefits and choose family or individual coverage.” When
petitioner retired, he executed the City’s “Agreement for Continuation of Health Insurance”
pursuant to the CBA. The CBA provides, in part, as follows:
a. Article X, Section 7. Hospitalization:
The City shall maintain and pay the applicable cost of a family/single medical
insurance plan, comparable to the plan presently in existence and in conformity
with Article X, Section 11 and any increased costs to the City of said plan while this
Contract is in effect.
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b. Article X, Section 9. Prescription and Eye Care Programs:
The City shall maintain prescription and eye care programs comparable to the
present coverage and benefit levels and in conformity with Article X, Section 11 of
the CBA and will pay any increased costs to the City while this Contract is in effect.
Article X, Section 10. Retirement Health Benefits:
(A) Upon retirement, any and all sick time accumulated and not converted to
additional vacation time (pay out) may be converted towards a 40% reduction
of premium paid by the retired firefighter for Major Medical, prescription care,
eye care and any additional benefits added in the future. Reduction of said
premiums may continue for up to 10 years or until accumulated sick time is
exhausted, whichever comes first. The firefighter upon retirement will have the
option to participate in any or all available health benefits and choose family or
individual coverage.
Article X, Section 11. Cooperation for Cost Efficient Benefits:
In an effort to provide cost efficient options or changes in health and major medical
plan, including, but not limited, health, major medical plan, prescription drug plan
and eye care plan, including but not limited to, co-pays, deductibles and premiums,
etc. the Union agrees to meet with the City to negotiate said modifications for its
members.
The Union agrees to accept the following changes in insurance coverage should the
City agree to said changes for all city employees:
(1) Up to, but not exceeding co-pays on prescription drugs . . . .
(2) Prescription drug reimbursement will be removed from the medical insurance.
(3) Use of a “Preferred Provider Option” in medical insurance coverage.
(4) A $150.00 monthly co-pay stop loss per individual shall apply to the
prescription coverage.
(5) The City will maintain a mail order prescription service . . . .
(6) The City shall provide an open enrollment period of not less than ninety (90)
days for fire department retirees/pension beneficiaries who are not currently
enrolled in the prescription drug program. Retirees . . . with a monthly pension
of less than $750.00 and with an annual income of less than $12,000.00 shall
be entitled to enroll in the prescription drug program without monthly premium
costs. All co-pays, deductibles and other costs of the program remain
applicable.
(7) The City shall permit hardships and special circumstances regarding
prescription insurance to be appealed to the Insurance Appeals Board of the
City.
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According to petitioner, it is undisputed that he received the retirement health benefits he elected
until the City unilaterally and substantially changed the health insurance plan on April 1, 2017. 1
On March 7, 2017, petitioner filed a complaint for declaratory judgment asserting five
claims: (1) the City would be breaching its contractual obligations under the CBA that was in force
when he retired in August of 2000 by making changes to his retiree health insurance benefits
effective on April 1, 2017; (2) the changes to petitioner’s retiree health insurance benefits would
violate West Virginia Code § 8-12-8; (3) the changes to his retiree health insurance benefits would
constitute an impairment of his contractual rights in violation of Article III, Section 4 of the West
Virginia Constitution; (4) the changes to his retiree health insurance benefits would violate his
right to due process in violation of Article III, Section 10 of the West Virginia Constitution; and
(5) the changes to his retiree health insurance benefits would violate his right to equal protection
in violation of Article III, Section 10 of the West Virginia Constitution.2
Petitioner filed a motion for summary judgment, attaching a “Wage and Benefit Agreement
Between the City . . . and the International Association of Firefighters Local Union 289,” the CBA.
That CBA was in effect when petitioner retired in 2000 but undisputedly expired on December 31,
2003. The CBA provides, in relevant part, that “[t]he City shall maintain and pay the applicable
cost of a family/single medical insurance plan, comparable to the plan presently in existence and
in conformity with Article X, Section 11 and any increased costs to the City of said plan while this
contract is in effect.” With regard to the eyecare program, the CBA provides that “[t]he City will
maintain prescription and eye care programs comparable to the present coverage and benefit levels
and in conformity with Article X, Section 11 and will pay any increased costs to the City while
this contract is in effect.” According to the circuit court, there is no evidence in the record regarding
the health insurance benefits or eye care programs in effect at the time of petitioner’s retirement
in 2000. The CBA further addressed “RETIREMENT HEALTH BENEFITS” by providing that
during the term of the CBA, (1) retirees could convert accumulated vacation and sick leave towards
1
Petitioner alleges that under Super Blue Plus 2010, the benefit plan enacted in 2017: “a.
changed [his] major medical/hospitalization insurance coverages, prescription drug coverages and
optical insurance coverages; b. increased [his] Premium payments to $285.00 per month for major
medical coverage; c. increased [his] Deductibles to $2,000.00 per individual/$4,000.00
collectively for major medical and hospitalization in-network; d. increased [his] Co-Insurance
payment to $2,000.00 per individual/$4,000.00 collectively for major medical and hospitalization
in-network; e. increased [his] Out-of-Pocket expenses to $6,850.00 individual/$13,700.00
collectively for major medical and hospitalization in-network; and f. increased [his] Prescription
Drug costs for generic, formulary, non-formulary and specialty brands.” He further asserts that
based on his life expectancy, his lifetime costs will increase from $554,615 to $993,234 on a net
value basis. He does not, however, provide information regarding what these costs/expenses were
prior to the change.
2
On April 1, 2017, the City switched its retirement health plan to Blue Cross Blue Shield
Health Care Benefits. Petitioner asserts that this change resulted in substantial and material
changes to his retirement health benefits, including increased costs and reduced benefits. He argues
that that change materially breached the 1999 CBA, depriving him of his vested retirement health
benefits.
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a premium reduction “for Major Medical, prescription card, eye care and any additional benefits
added in the future”; and (2) the City would fund a “Fire Department Retiree’s Insurance Fund
Settlement,” which was expressly limited to “the life of the agreement.” The circuit court found
that at the time the CBA was executed, petitioner’s Union and the City had not reached a meeting
of the minds but were still negotiating changes to the health insurance plans:
In an effort to provide cost effective options or changes in health and major medical
plan, including but not limited to, health, major medical plan, prescription drug plan
and eye care plan, including but not limited to, co-pays, deductibles and premiums,
etc. The Union agrees to meet with the City to negotiate said modifications for its
members. The Union agrees to accept the following changes in insurance coverage
should the City agree to said changes for all city employees.
Petitioner argued below, and stated in an affidavit, that “[a]lthough the CBA expired on or
about December 31, 2003, the agreements in the CBA relating to [his] retirement health benefits
are still binding on the City.” The circuit court found that petitioner’s affidavit “does [not] identify
what his health insurance benefits were in 2000 when he retired.” However, an affidavit from
Sherry Lewis, The Human Resources Director of the City, provides that “[a]s of the effective date
of [petitioner’s] retirement, no CBA or other separate contract had been executed between the City
. . . and [the Union] setting the terms and conditions of the health, major medical, prescription, and
eye care plans for active and retired member of the [Union] or their spouses and/or dependents.”
She further set forth in her affidavit that
[d]uring the time period the 1999 CBA was in effect, several changes to the terms
and conditions of the health, major medical, prescription, and eye care plans for
active and retired members of the [Union] or their spouses and/or dependents were
implemented by the City . . . . After the time period the 1999 CBA was in effect,
several changes to the terms and conditions of the health, major medical,
prescription, and eye care plans for active and retired members of the [Union] or
their spouses and/or dependents were implemented by the City . . . . These changes
were implemented by the City [] in the exercise of its right to provide whatever
fringe benefits it chose to provide to its employees and retirees, including
[petitioner] and his fellow retired [Union] members.
According to Ms. Lewis’s affidavit, the CBA did not address the amount of premiums to be paid
by retirees for health, major medical, prescription, or eye coverage; the amount of co-pays to be
paid by retirees for health, major medical, prescription, or eye coverage; the amount of deductibles
to be paid by retirees for health, major medical, prescription, or eye coverage; or the scope of major
medical, prescription drug, or optical coverage. Her affidavit also addressed specific portions of
petitioner’s complaint and/or affidavit asserting claims for coverage, pointing out that there was
no record evidence that any of those terms existed during the term of the CBA or at the time of
petitioner’s retirement. Finally, her affidavit provides that “[d]uring 2017, the City . . . resolved
any disputes with its active police officers, retired police officers, and active firefighters regarding
the City[]’s exercise of its right to provide whatever fringe benefits it chooses to provide to its
employees and retirees,” leaving petitioner as the only litigant challenging the changes
implemented by the City in 2017.
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In its June 7, 2019, order, the circuit court found that there is no dispute regarding
petitioner’s use of accumulated sick and vacation time, the supplemental insurance fund, or his
election upon retirement to participate in any and all available health benefits and choose family
or individual coverage available to him at the time of his retirement. It further found that at the
time the CBA was executed and when petitioner retired, the City’s obligation to maintain and pay
“comparable” plans was subject to continued negotiations between the Union and the City. It
specifically found that petitioner’s argument in his summary judgment motion that “‘[t]he CBA
also does not permit the City or Union to bargain away a retired firefighter’s elected retirement
benefits,’ is unavailing where to maintain a cause of action for breach of contract, he is required
to identify the terms of the contract at the time of its formation.” The circuit court further
determined that
the only agreement between the City and the Union in the CBA was to continue to
negotiate and there is no record evidence that there was any meeting of the minds
regarding any health insurance benefits with the terms sought to be imposed on the
City by [petitioner]; indeed, [the] only record evidence is that those terms did not
exist either during the CBA or at the time of [petitioner’s] retirement. The record
indicates [that petitioner] received health insurance benefits from the City while the
CBA was in effect, but any details or terms related to these benefits and whether
they were incorporated into the CBA are not part of the record. Thus, the [c]ourt
concludes that a question of fact exists with regard to whether the changes to
[petitioner’s] health insurance benefits in 2017 violated contractual obligations by
the City . . . to [petitioner], precluding summary judgment in favor of [petitioner].
The circuit court also found that West Virginia Code § 8-12-8 permits, but does not require,
municipalities to provide health insurance to its employees or retirees; and that statute also permits,
but does not require, municipalities to pay all or any portion of health insurance premiums for its
employees or retirees. In further considering the statute, the court found that when a municipality
provides group insurance for its employees, it must permit retirees to remain members of the group
insurance plan if the retirees elect to do so and pay the premium for coverage. The circuit court
also concluded that “should W. Va. Code § 8-12-8 apply to the group policy at issue here,
[petitioner] has not produced evidence showing that the benefits he now receives are inconsistent
with the statute’s requirement. Thus, [petitioner] has failed to establish he is entitled to summary
judgment on this point.” The circuit court denied petitioner’s motion for summary judgment.
Petitioner then filed a motion to alter or amend that judgment. In its October 1, 2019, order
denying that motion, the circuit court concluded that neither Rule 59(e) nor Rule 60(b) of the West
Virginia Rules of Civil Procedure were applicable to the motion. After finding that its prior
findings were supported by the evidence presented following the close of discovery and by
applicable law, the circuit court addressed a number of factual assertions made by petitioner in his
motion that were disputed by the circuit court’s June 7, 2019, order. The circuit court also pointed
out inconsistencies between petitioner’s counsel’s arguments and the substance of petitioner’s
affidavit. The circuit court further found that
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the findings of fact in [its o]rder were not only supported by the evidence, the
evidence was undisputed relative to all matters material to the legal issues involved,
and the conclusions of law in [the court’s o]rder were well-supported by the
applicable law. . . . [T]here is no genuine issue of material fact regarding
[petitioner’s] lack of entitlement to judgment as a matter of law relative to his
claims of breach of contract or unilateral modification of long-standing policies
without notice where it is undisputed that pre-modification notice was provided and
no previously-earned, vested, and fixed rights in any specific retiree health care
benefits were retroactively impaired.
Respondents filed a motion for summary judgment, and the circuit court granted that
motion in its final judgment order, also entered on October 1, 2019. The circuit court incorporated
by reference its findings of fact from its June 7, 2019, order and its October 1, 2019, order denying
petitioner’s motion to alter or amend that June 7, 2019, judgment. It found that the 1999 CBA did
not obligate the City to do anything for the Union’s members relative to the health insurance
benefits, including members who retired during its term, beyond the three years it was in effect.
The circuit court also found that effective April 1, 2017, changes were made to the City’s health
plans that included increases in cost-sharing requirements and copayments, causing the plans to
lose their status as grandfathered health plans as of April 1, 2017. Finally, it held that
[a]n order reinstating the City’s health plans to terms that were in effect prior to
April 1, 2017, would cause the plans not to comply with the ACA, exposing the
City to governmental enforcement action and monetary penalties under the ACA,
which is an additional reason in support of the legislative grant to West Virginia
municipalities to adopt, modify, and change health insurance plans is ‘plenary.’ . .
. [T]here is no genuine issue of material fact regarding [respondents’] entitlement
to judgment on a matter of law finding that those changes violated no constitutional,
statutory, or common law rights of those retirees.
It, therefore, granted respondents’ motion for summary judgment by order entered on October 1,
2019. Petitioner appeals from those orders.
Initially, we note that “[a] circuit court’s entry of a declaratory judgment is reviewed de
novo.” Gastar Exploration Inc. v. Rine, 239 W. Va. 792, 798, 806 S.E.2d 448, 454 (2017) (footnote
omitted). Further, “[a] circuit court’s entry of summary judgment is reviewed de novo.” Syl. Pt.
1, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994). In conducting our de novo review,
we apply the same standard for granting summary judgment that is applied by the circuit court.
Under that standard,
“‘[a] motion for summary judgment should be granted only when it is clear
that there is no genuine issue of fact to be tried and inquiry concerning the facts is
not desirable to clarify the application of the law.’ Syllabus Point 3, Aetna Casualty
& Surety Co. v. Federal Insurance Co. of New York, 148 W.Va. 160, 133 S.E.2d
770 (1963).” Syllabus Point 1, Andrick v. Town of Buckhannon, 187 W.Va. 706,
421 S.E.2d 247 (1992).
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Painter, 192 W. Va. at 190, 451 S.E.2d at 756, syl. pt. 2. In other words,
[s]ummary judgment is appropriate where the record taken as a whole could
not lead a rational trier of fact to find for the nonmoving party, such as where the
nonmoving party has failed to make a sufficient showing on an essential element
of the case that it has the burden to prove.
Id. at 190, 451 S.E.2d at 756, syl. pt. 4. Additionally, we note that “[t]he circuit court’s function at
the summary judgment stage is not to weigh the evidence and determine the truth of the matter,
but it is to determine whether there is a genuine issue for trial.” Id. at 190, 451 S.E.2d at 756, syl.
pt. 3. Finally, we note that “the party opposing summary judgment must satisfy the burden of proof
by offering more than a mere ‘scintilla of evidence’ and must produce evidence sufficient for a
reasonable jury to find in a nonmoving party’s favor. Anderson [v. Liberty Lobby, Inc.], 477 U.S.
[242,] 252, 106 S.Ct. [2505,] 2512, 91 L.E.2d [202] at 214 [1986].” Williams v. Precision Coil,
Inc., 194 W. Va. 52, 60, 459 S.E.2d 329, 337 (1995).
On appeal, petitioner sets forth three assignments of error. First, he contends that the circuit
court erred in granting summary judgment to respondents by finding that the City’s unilateral
change to petitioner’s retirement health insurance benefits did not breach the collective bargaining
agreement between the City and The International Association of Firefighters, Local Union 289.
In support of this argument, petitioner asserts that the terms of the 1999 CBA contractually
obligated the City and its firefighters during the contractual period of November 1, 1999, to
December 31, 2003. He contends that the CBA “covered” active firefighters and firefighters who
retired while the CBA was in force between those dates. Without citing any law, petitioner argues
that a firefighter who retired during the CBA’s contractual period became vested in the retiree
benefits if he/she elected continuation of the City’s health care benefits available at the time of
retirement as long as the retiree elected on the “Agreement for Continuation of Health Insurance”
provided by the City. He asserts, however, that the January 27, 2017, memorandum from the City
to petitioner notified him that the new benefit plan would “materially modify” petitioner’s
retirement health insurance benefits. He argues that the changes constituted a material breach of
the CBA because they deprived petitioner of his vested retirement benefits granted under the CBA.
As this Court has found,
[i]n the absence of a contractual obligation providing otherwise, a public
employer is permitted to unilaterally modify a longstanding policy affecting the
rights of employees where notice is provided to such employees and where the
modification of policy does not retroactively impair previously earned and vested
rights, such as pension benefits.
Syl. Pt. 4, Boggess v. City of Charleston, 234 W. Va. 366, 765 S.E.2d 255 (2014). As the circuit
court noted, “[a]t the time the CBA was executed and at the time [petitioner] retired, the City’s
obligation to maintain and pay ‘comparable’ plans was subject to continued negotiations between
the Union and the City.” The circuit court further found that, in 1999, the City and the Union
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never reached an agreement on the terms of active or retiree firefighters health
insurance benefits, but merely agreed to continue to negotiate; [] there is no record
evidence of any post-execution of the 1999 CBA as to the terms of active or retiree
health insurance benefits that would have been in effect when [petitioner] retired;
and [] there is nothing in the CBA which provided that ‘the same levels that existed
prior to April 1, 2017,’ which was eighteen years later, would somehow be
incorporated into a 1999 CBA.
In addition, West Virginia Code § 8-12-8 provides plenary power and authority to
municipalities to negotiate for a policy or policies of group insurance written by a carrier or
carriers. 3 Respondents argue that the record evidence is undisputed that at the time of the 1999
3
West Virginia Code § 8-12-8 provides as follows:
Every municipality shall have plenary power and authority to negotiate for, secure
and adopt for the regular employees thereof (other than provisional, temporary,
emergency and intermittent employees) who are in employee status with such
municipality on and after the effective date of this section and for their spouses and
dependents, a policy or policies of group insurance written by a carrier or carriers
chartered under the laws of any state and duly licensed to do business in this state
and covering life; health; hospital care; surgical or medical diagnosis, care, and
treatment; drugs and medicines; remedial care; other medical supplies and services;
or any other combination of these; and any other policy or policies of group
insurance which in the discretion of the governing body bear a reasonable
relationship to the foregoing coverages. The provisions and terms of any such group
plan or plans of insurance shall be approved in writing by the insurance
commissioner of this state as to form, rate and benefits.
The municipality is hereby authorized and empowered to pay the entire premium
cost, or any portion thereof, of said group policy or policies. Whenever the above-
described regular employees shall indicate in writing that they have subscribed to
any of the aforesaid insurance plans on a group basis and the entire cost thereof is
not paid by the municipality, the municipality is hereby authorized and empowered
to make periodic premium deductions of the amount of the contribution each such
subscribing employee is required to make for such participation from the salary or
wage payments due each such subscribing employee as specified in a written
assignment furnished to the municipality by each such subscribing employee.
When a participating employee shall retire from his employment, he may, if he so
elects, remain a member of the group plan and retain coverage for his spouse and
dependents, by paying the entire premium for the coverage involved. Spouses and
dependents of any deceased member may remain a member of the group plan by
paying the entire premium for the coverage: Provided, That nothing herein shall be
construed as prohibiting the municipality from paying a portion or all of the cost of
any coverage. In the event that a municipality changes insurance carriers, as a
condition precedent to any such change, the municipality shall assure that all
retirees, their spouses and dependents, and the spouses and dependents of any
deceased member are guaranteed acceptance, at the same cost for the same
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CBA and petitioner’s retirement, the City had no policy (or policies of group insurance) written
by a carrier chartered under the laws of any state and duly licensed to do business in West Virginia
covering life; health; hospital care; surgical or medical diagnosis, care, and treatment; drugs and
medicines; remedial care; other medical supplies and services; or any other combination of these
based on “similar age groupings.” Therefore, under the statute, the City had the right, in the
absence of a written contract, to modify those fringe benefit programs.
In Summers v. West Virginia Consolidated Public Retirement Board, 217 W. Va. 399, 405,
618 S.E.2d 408, 414 (2005), this Court found that
Booth [v. Sims, 193 W. Va. 323, 456 S.E.2d 167 (1995)] concerned substantive
amendments to existing provisions governing the state troopers’ pension system
such as an increase in the monthly payroll deduction from state troopers’ salaries;
a prohibition on the troopers’ use of accumulated but unused annual and sick leave
as credit toward years of service in determining eligibility for retirement benefits;
and a reduction in the public safety retirement annual cost of living adjustment. In
other words, promises of future benefits were actually altered. In contrast, in the
instant case the Teacher Retirement System pension plan never contained a
provision permitting the inclusion of lump-sum vacation pay in employees’ final
year salary calculations for the purpose of determining retirement benefits. Thus,
unlike in Booth, the Teachers’ Retirement System had not made a promise on
which the teachers had relied. Therefore, the detrimental reliance principle set forth
in Booth is not applicable to the present facts.
Respondents argue that, like Summers, in the instant action the City never entered into a contractual
relationship with petitioner in which it agreed to provide any specific level of fringe benefits in the
form of health, major medical, prescription, and/or eye care plans. We agree. At no point did the
City guarantee that it would be able to provide the same insurance benefits from 1999 until the
death of both petitioner and his spouse. Neither petitioner nor his spouse were deemed ineligible
to participate in the insurance benefits provided to both active and retired employees. Instead, the
co-pays and similar portions of the insurance benefits were changed for petitioner and all
individuals similarly situated. For these reasons, we find that the circuit court did not err in finding
that the City did not breach any contract with petitioner by making changes to the substance of
petitioner’s health, major medical, prescription, and/or eye care plans.
In his second assignment of error, petitioner asserts that the City’s unilateral changes to his
retirement health insurance benefits violated a longstanding policy that substantially and materially
affects petitioner’s rights to those benefits. Petitioner argues that because he executed the
Agreement for Continuation of Health Insurance on October 20, 2000, he became vested in the
benefits bargained for in the CBA upon retirement. He then received those benefits for seventeen
years, in conformity with that agreement, until the City unilaterally changed those benefits without
input from petitioner or the Union. Petitioner contends that even if this Court finds that the
unilateral changes did not breach the CBA, he is still entitled to relief because West Virginia law
coverage as regular employees of similar age groupings, their spouses and
dependents.
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provides that a public employer is not permitted to unilaterally modify a longstanding policy
affecting the rights of employees, even if they are not retired, when the modification of the policy
retroactively impairs previously earned and vested rights. Petitioner bases his argument on
Boggess, including syllabus point 4 as set forth above. Petitioner asserts it is undisputed that he
provided substantial service to the City as a firefighter or that he elected to continue health
insurance upon retirement under the CBA.
Respondents do not appear to dispute the fact that petitioner provided substantial service
to the City as a firefighter for over twenty years. However, respondents argue that Boggess
undermines petitioner’s alternative theory of recovery, as he conceded in his motion for summary
judgment that there is no dispute that notice was given. In addition, as the circuit court discussed,
petitioner had no vested right to benefits in place on March 31, 2017, under a 1999 CBA that
expressly reserved the terms of any retiree health insurance benefits to be provided that expired in
2003. Citing a litany of out of state authority, respondents assert that other courts have held that
retired firefighters, police officers, and other public employees have no vested rights to unchanged
healthcare benefits, which is what the circuit court found below. For many of the same reasons
addressed in petitioner’s first assignment of error, we find that the circuit court did not err in
finding that the City was “permitted to unilaterally modify a longstanding policy affecting the
rights of employees where notice is provided to such employees and where the modification of
policy does not retroactively impair previously earned and vested rights, such as pension benefits.”
Syl. Pt. 4, in part, Boggess at 368, 765 S.E.2d at 257.
Finally, petitioner argues that West Virginia Code § 8-12-8 does not grant municipalities
the authority to unilaterally change the terms of a collective bargaining agreement that provides
for retirement health insurance benefits. He argues that nothing in that statute “prevents a
municipality from contractually providing retirees with better and less costly benefits than required
under W. Va. Code § 8-12-8” and that nothing in the statute allows the City to unilaterally change
a retiree’s health insurance benefits that the City contractually obligated itself to provide in the
CBA. Petitioner asserts that under the CBA there would be no future reduced benefits or increased
costs to him. He continues to argue that it is clear he had contractual property rights under the CBA
and that such rights cannot be impaired or diminished by the City. Petitioner further contends that
the circuit court was “plainly wrong in finding that W. Va. Code § 8-12-8 allows the City to impair
the vested property rights of [petitioner], a retired employee, which are provided by the 1999
CBA.”
As addressed above, West Virginia Code § 8-12-8 provides plenary power and authority
to municipalities to negotiate for a policy or policies of group insurance written by a carrier or
carriers. Respondents criticize petitioner’s reliance on State ex rel. City of Wheeling Retirees
Association, Inc. v. City of Wheeling, 185 W. Va. 380, 407 S.E.2d 384 (1991). As this Court set
forth in the syllabus of that case:
W.Va. Code, 8-12-8 [1986] provides, in part, that “[i]n the event that a
municipality changes insurance carriers, as a condition precedent to any such
change, the municipality shall assure that all retirees, . . . are guaranteed acceptance,
at the same cost for the same coverage as regular employees of similar age
groupings[.]” However, because W.Va. Code, 8-12-8 [1986] is remedial, and,
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therefore, to be liberally construed, even though the municipality does not change
insurance carriers, retirees who are insured under the provisions of this section are
to be insured at the same cost for the same coverage as regular employees of similar
age groupings where the present insurance carrier changes its rates and such change
results in retirees being charged different rates for the same coverage as regular
employees.
Respondents argue, therefore, that all that was required of the City when it changed its health
insurance benefits in 2017 was that all retirees, including petitioner, be offered the same benefits
as one another. Respondents conclude that because that was done, none of the retirees’ rights were
violated. Again, we agree with respondents. Petitioner is being afforded the same benefits that are
being offered to other retirees. Therefore, under § 8-12-8, the City had the right, in the absence of
a written contract, to modify the health insurance benefits offered to its retirees, including
petitioner. For these reasons, we affirm the circuit court’s grant of summary judgment to petitioner.
Affirmed.
ISSUED: December 7, 2020
CONCURRED IN BY:
Chief Justice Tim Armstead
Justice Elizabeth D. Walker
Justice Evan H. Jenkins
Justice John A. Hutchison
DISSENTING:
Justice Margaret L. Workman
Justice Workman would set for oral argument in accordance with Rule 19 of the West Virginia
Rules of Appellate Procedure.
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