Allen Park Retirees Ass'n, Inc. v. City of Allen Park

329 Mich.App. 430

942 N.W.2d 618

ALLEN PARK RETIREES ASSOCIATION, INC., and Russell Pillar, on behalf of himself and others similarly situated, Plaintiffs-Appellants,

v.CITY OF ALLEN PARK and Joyce A. Parker, Defendants-Appellees.

No. 341567

Court of Appeals of Michigan.

Submitted May 8, 2019, at Detroit.

Decided August 13, 2019, 9:10 a.m.

Mark A. Porter & Associates PLLC (by Mark A. Porter ) for plaintiffs.

Dana Nessel, Attorney General, Fadwa A. Hammoud, Solicitor General, and Erik A. Graney, Assistant Attorney General, for Joyce A. Parker.

Secrest Wardle (by Dennis R. Pollard and Mark S. Roberts ) for the city of Allen Park.

Before: Sawyer, P.J., and Cavanagh and Servitto, JJ.

Per Curiam.

Plaintiffs appeal an order of the circuit court granting summary disposition on plaintiffs' claims for retiree healthcare benefits under a collective-bargaining agreement. We affirm in part, reverse in part, and remand.

Plaintiff Pillar was a command officer employed by the Allen Park Police Department and a member of the Allen Park Police Lieutenants and Sergeants Association collective-bargaining unit. He retired from employment in July 1993. At the time of his retirement, Pillar's employment was governed by a collective-bargaining agreement (CBA) in effect for the period of July 1, 1991 to June 30, 1994. That CBA provided for retiree healthcare benefits. The CBA provided for specific coverages, though those coverages varied somewhat depending on the age at retirement and date of hire. The CBA provides that the city "reserves the right to change any and/or all insurance company(ies) and/or plan(s), providing the replacement program is equal to or better than the program available from the present company, subject to the mutual agreement of the City and the Union."

Defendant Parker was appointed emergency manager (EM) of the city before March 28, 2013. At that time, the EM's rights and duties were governed by the Local Government Fiscal Responsibility Act, formerly MCL 141.1201 et seq. The Local Financial Stability and Choice Act (LFSCA), 2012 PA 436 (PA 436), became effective March 28, 2013. MCL 141.1541 et seq. EM Parker continued her duties as the city's EM under the new legislation. EM Parker notified city retirees in correspondence dated March 8, 2013, that she was "proposing changes in our healthcare program in an effort to reduce our expense, while making every effort to minimize the impact on retirees." She requested the retirees' "support of the changes that are proposed and outlined in this letter." The letter stated:

Effective July 1, 2013, the health insurance for all retirees and dependents will be changing. The coverage you will be afforded as of our fiscal year is Blue Cross Blue Shield of Michigan (BCBSM) Community Blue PPO Option 2. Community Blue PPO features an extensive network of doctors, hospitals and other health care providers that agree to accept BCBSM's benefit and payment policies. The Blue Cross PPO operates nationwide and allows members to receive services from any health care provider that accepts the Community Blue PPO ID card. This plan does not require the selection of a primary care doctor or other health care provider. Your out-of-pocket expenses are less when health care services are rendered by PPO network providers.

Parker issued Order No. 2013 – 015 (Order 15), which declared:

1. All Medicare Part A and B enrolled/eligible retirees and their Medicare enrolled/eligible spouses and dependents.

Section 1. Health Coverage

Effective July 1, 2013, the City will provide enrolled/eligible retirees and dependents the following health coverage plan:

i. Blue Cross Blue Shield of Michigan Medicare Plus Group PPO with a $100.00 annual deductible, $1,000.00 annual In-Network out-of-pocket maximum, and with $10/20/30 copay prescription drug coverage.

ii. Plan coverage will be subject to the coverage terms and regulations of the carrier[.]

2. All Non-Medicare enrolled/eligible retirees and their enrolled/eligible spouses and dependents.

Section 1. Health Coverage

Effective July 1, 2013, the City will provide enrolled/eligible retirees and dependents the following health coverage plan:

i. Blue Cross Blue Shield of Michigan Community Blue PPO Option 2 with $100/$200 annual deductible, $500/$1,000 annual In-Network out-of-pocket maximum, and with $10/20/30 co-pay prescription drug coverage.

ii. Plan coverage will be subject to the coverage terms and regulations of the carrier.

The city's receivership was terminated on January 27, 2017. Although EM Parker asserts that Order 15 was terminated when the receivership terminated, the city indicates that the modification to plaintiffs' healthcare remains in effect.

Plaintiffs filed an action in the Ingham Circuit Court against the city, the state of Michigan, the Department of Treasury, and Parker acting in her capacity as EM. Plaintiffs described Allen Park Retirees Association (APRA) as "a non-profit corporation registered in the State of Michigan, whose membership is exclusively comprised of the employee pensioners, their beneficiary spouses, and qualified dependents." The claims against the state and the Department of Treasury were transferred to the Court of Claims. Plaintiffs' claims against the city and EM Parker remained pending in the Ingham Circuit Court. The city and EM Parker moved for a change of venue to Wayne County. The Ingham Circuit Court granted those motions. The Wayne Circuit Court granted the city's motion to stay proceedings pending resolution of the Court of Claims action.

The Court of Claims granted summary disposition for the state defendants. The Court of Claims remarked that the only change to plaintiffs' healthcare insurance was the imposition of deductibles and copays in the amounts of $500 to $1,000 each year for retirees and dependents. The Court of Claims stated that it was "undisputed that the retirees will be provided health care insurance with the premiums paid by the City. However, as a consequence of changing insurance policies, the retirees will be responsible for some co-pays and deductibles. There is no allegation that the actual coverage has changed." The Court of Claims indicated that plaintiffs' first amended complaint in the Court of Claims asserted claims that PA 436 violated the Contracts Clause of the Michigan Constitution and violated constitutional due-process protections.

The Court of Claims acknowledged the state defendants' argument that they were entitled to summary disposition under MCR 2.116(C)(8) because plaintiffs failed to demonstrate that the state defendants were responsible for the healthcare plan modifications. The Court of Claims agreed that the EM's actions could not be imputed to the state. However, the Court of Claims decided that plaintiffs' constitutional claims were too important for the court to "rest its decision on the non-imputation of an emergency manager's actions to the State...." The Court of Claims agreed with the state defendants' substantive arguments that plaintiffs' constitutional challenges to PA 436 were without legal merit. With respect to plaintiffs' Contracts Clause challenge, the Court of Claims concluded that there was no impairment of contract. The Court of Claims based this analysis on the United States Supreme Court's decision in M & G Polymers USA, LLC v. Tackett , 574 U.S. 427, 135 S. Ct. 926, 190 L. Ed. 2d 809 (2015) ( Tackett ), in which the Court held that the CBA in that case was subject to the traditional principle that contractual obligations cease upon termination of the CBA. The Court of Claims also rejected various constitutional arguments raised by plaintiffs.

Plaintiffs appealed the Court of Claims order granting summary disposition for the state defendants in this Court in Docket No. 329593. This appeal was consolidated with plaintiffs' earlier appeal in Docket No. 327470. In Docket No. 327470, this Court held that the Court of Claims properly transferred the claims against EM Parker back to the Wayne Circuit Court. Allen Park Retirees Ass'n, Inc v. Michigan , unpublished per curiam opinion of the Court of Appeals, issued November 29, 2016 (Docket Nos. 327470 and 329593), pp. 4–5, 2016 WL 6992174. In Docket No. 329593, this Court rejected plaintiffs' argument that the Court of Claims erred by issuing judgment without first ruling on their motion for class certification. Id. at 5–6. This Court held that all of plaintiffs' claims, in both the original complaint and their amended complaint, were barred by MCL 600.6431. Id. at 6–7. This Court did not address the substance of plaintiffs' constitutional claims. This Court explained:

Thus, the record establishes that plaintiffs failed to comply with MCL 600.6431. In consequence, summary dismissal of all of plaintiffs' claims against defendants was appropriate, see Rusha [v. Dept. of Corrections] , 307 Mich. App. [300] at 307 [859 N.W.2d 735 (2014) ], and we need not analyze the remaining issues raised by plaintiffs on appeal, Fisher v. Blankenship , 286 Mich. App. 54, 70, 777 N.W.2d 469 (2009) ("[T]his Court will affirm where the trial court came to the right result even if for the wrong reason."). Indeed, as a matter of judicial restraint we refuse to do so. See In re Forfeiture of 2000 GMC Denali and Contents , [316] Mich. App. [562, 570] n. 3, (2016) (noting "the fundamental principle of judicial restraint that courts should neither anticipate a question of constitutional law in advance of the necessity of deciding it nor formulate a rule of constitutional law broader than is required by the precise facts to which it is to be applied.") (quotation marks and citations omitted); see also In re M.S. , 291 Mich. App. 439, 442, 805 N.W.2d 460 (2011) ("[W]e will not address constitutional issues when, as here, we can resolve an appeal on alternative grounds."). [ Allen Park Retirees Ass'n , unpub. op. at 7-8.]

On September 7, 2017, plaintiffs moved to amend their complaint in the Wayne Circuit Court action. Plaintiffs stated...