RITA KENDZIERSKI, BONNIE HAINES, GREG DENNIS, LOUISE BERTOLINI, JOHN BARKER, JAMES COWAN, VINCENT POWIERSKI, ROBERT STANLEY, ALAN MOROSCHAN, and GAER GUERBER, on Behalf of Themselves and All Others Similarly Situated, Plaintiffs-Appellants/Cross-Appellees,
MACOMB COUNTY, Defendant-Appellee/Cross-Appellant.
Circuit Court LC No. 2010-001380-CK
Before: Fort Hood, P.J., and Jansen and Hoekstra, JJ.
class action, plaintiffs, acting as class representatives,
appeal as of right the trial court's opinion and order
denying their motion for summary disposition and request for
a permanent injunction with regard to defendant's
unilateral modification of retiree healthcare benefits. On
cross-appeal, defendant challenges the same order, asserting
that the trial court's finding that plaintiffs'
healthcare retirement benefits were vested or comprised an
entitlement to lifetime benefits constituted error. We affirm
in part, reverse in part, and remand for further proceedings
consistent with this opinion.
case presents the issue whether defendant was permitted to
make unilateral changes to retiree healthcare benefits
outlined in several collective bargaining agreements (CBAs).
Plaintiffs represent a class of retirees covered under
various CBAs with defendant. The parties dispute (1) whether
plaintiffs have a vested right to lifetime healthcare
benefits, and (2) if so, whether defendant was permitted to
make unilateral changes to the healthcare benefits. The trial
court concluded that plaintiffs have a vested right to
lifetime healthcare benefits. However, the court then
concluded that defendant could reasonably modify the scope
and level of the benefits. The court, therefore, granted
summary disposition in favor of defendant.
STANDARD OF REVIEW
moved for summary disposition pursuant to MCR 2.116(C)(10).
Defendant moved for summary disposition under MCR
2.116(C)(7), (8), and (10). We review de novo a trial
court's ruling on a motion for summary disposition.
Stephens v Worden Ins Agency, LLC, 307 Mich.App.
220, 227; 859 N.W.2d 723 (2014). Because the trial court
clearly relied on documents outside of the pleadings,
including the CBAs, deposition testimony, and other
documentation submitted by the parties, we conclude that
summary disposition was granted to defendant under MCR
2.116(C)(10). See Cuddington v United Health Servs,
Inc, 298 Mich.App. 264, 270; 826 N.W.2d 519 (2012)
("The trial court did not indicate whether it granted
defendant's motion pursuant to MCR 2.116(C)(8) or (10);
however, because the trial court considered documentary
evidence beyond the pleadings, we construe the motion as
having been granted pursuant to MCR 2.116(C)(10).").
A motion for summary disposition under MCR 2.116(C)(10) tests
the factual sufficiency of the complaint. In reviewing a
grant of summary disposition under MCR 2.116(C)(10), this
Court considers the pleadings, admissions, and other evidence
submitted by the parties in the light most favorable to the
nonmoving party. Summary disposition is appropriate if there
is no genuine issue of material fact and the moving party is
entitled to judgment as a matter of law. [Williams v
Enjoi Transp Solutions, 307 Mich.App. 182, 185; 858
N.W.2d 530 (2014) (citations omitted).]
addition, "A written contract's interpretation is
also reviewed de novo." Reicher v SET Enterprises,
Inc, 283 Mich.App. 657, 664; 770 N.W.2d 902 (2009).
We enforce contracts according to their terms, as a corollary
to the parties['] liberty to enter into a contract. We
examine contractual language and give the words their plain
and ordinary meanings. An unambiguous contractual provision
reflects the parties['] intent as a matter of law, and
[i]f the language of the contract is unambiguous, we construe
and enforce the contract as written. Courts may not create
ambiguity when contract language is clear. Rather, this Court
must honor the parties' contract, and not rewrite it.
[Id. at 664-665 (citations and quotation marks
omitted; third alteration in original).]
argues that the trial court improperly concluded that
plaintiffs are entitled to lifetime healthcare benefits. We
determine whether plaintiffs' right to healthcare
benefits had vested, we first examine the CBA language at
issue in the context of accepted principles of contract
interpretation. "Under established contract principles,
vested retirement rights may not be altered without the
[retiree]'s consent." Harper Woods Retirees
Ass'n v Harper Woods, 312 Mich.App. 500, 511; 879
N.W.2d 897 (2015) (citation and quotation marks omitted;
alteration in original). Our Supreme Court in Arbuckle v
Gen Motors, LLC, 499 Mich. 521, 539; 885 N.W.2d 232
(2016), recently observed that "a union may represent
and bargain for already-retired employees, but only with
respect to nonvested benefits. By contrast, when an
employer explicitly obligates itself to provide vested
benefits, that promise is rendered forever unalterable
without the retiree's consent."
determine whether the right to the healthcare benefits
vested, a plaintiff must establish that "(1) he or she
had a contractual right to the claimed benefit that was to
continue after the agreement's expiration, and (2) the
right was included in his or her respective contract at the
time of retirement." Harper Woods, 312
Mich.App. at 511. Before the United States Supreme Court
issued its opinion in M & G Polymers USA, LLC v
Tackett, 574 U.S. __; 135 S.Ct. 926; 190 L.Ed.2d 809
(2015), a presumption existed in the United States Court of
Appeals for the Sixth Circuit that retiree benefits outlined
in a CBA are vested lifetime benefits. Harper Woods
Retirees Ass'n, 312 Mich.App. at 511-512. In
Tackett, the United States Supreme Court concluded
that this presumption was inconsistent with the traditional
rules of contract law. Tackett, 574 U.S. at __; 135
S.Ct. at 937; 190 L.Ed.2d at 821. The Court indicated that
ordinarily, a contractual obligation ceases when the CBA
terminates. Id. at __; 135 S.Ct. at 937; 190 L.Ed.2d
at 820. "[W]hen a contract is silent as to the duration
of retiree benefits, a court may not infer that the parties
intended those benefits to vest for life." Id.
at __; 135 ...