Spiegel v. Ferguson-Florissant Sch. Dist.

625 S.W.3d 800

Jeffrey SPIEGEL, Appellant,

v.FERGUSON-FLORISSANT SCHOOL DISTRICT, Respondent.

No. ED 109274

Missouri Court of Appeals, Eastern District, DIVISION THREE.

FILED: May 25, 2021

For Appellant: Lynette M. Petruska, 2010 S. Big Bend Blvd., St. Louis, MO 63117.

For Respondent: James C. Hetlage, Julie Z. Devine, 714 Locust St., St. Louis, MO 63101.

KURT S. ODENWALD, Judge

Introduction

This appeal addresses the intersection of Section 432.070 and Section 169.590.3 of the Revised Statutes of Missouri¹ as they apply to school district contracts. Section 432.070 allows a school district to make contracts only within the scope of its powers or as expressly authorized by law. Section 169.590.3 prohibits a school district from paying the health insurance premiums for retired district employees who choose to retain their health insurance coverage through the school district. Jeffrey Spiegel ("Spiegel") appeals the trial court's dismissal of his petition for breach of contract against the Ferguson-Florissant School District (the "School District") relating to a negotiated provision in which the School District was obligated to provide and pay for lifetime health insurance benefits for Spiegel and his dependents (the "Provision"). The School District maintains dismissal was proper because the Provision rendered the contract ("Contract") illegal in violation of Section 169.590.3 and was, therefore, beyond the School District's authority under Section 432.070. The School District farther argues that neither Spiegel nor his Spouse ("Spouse," collectively the "Spiegels") are entitled to equitable remedies as a result of the School District's failure to pay for continued health insurance coverage as provided under the Contract.

We hold the Provision is subject to the express mandate of Section 169.590.3 which prohibits the School District from paying the health insurance premiums for retired School District employees. Because the Provision violates Section 169.590.3, the Contract is void and unenforceable under Section 432.070 and we must affirm the trial court's dismissal of Spiegel's breach-of-contract claim. Similarly, because the School District cannot be held liable on the equitable claims asserted by the Spiegel, we deny the remaining points of Spiegel's appeal and affirm the judgment of the trial court.

Factual and Procedural History

Since we are reviewing the trial court's dismissal of Spiegel's amended petition, we take as true the facts as alleged by Spiegel in the petition.

The School District is a public school district located within St. Louis County. Spiegel served as superintendent of the School District from 2004 to June 30, 2011. In the summer of 2009, Spiegel notified the School District that he planned to retire at the conclusion of the 2009-2010 school year. In an effort to retain Spiegel as superintendent through the 2010-2011 school year, the School District offered to increase his salary. When Spiegel declined that offer, the School District asked Spiegel what it would take for him to agree to remain as superintendent through the 2010-2011 school year. Spiegel responded that he would continue as the School District's superintendent if the School District paid for health insurance coverage for him and his dependents for the remainder of their lives. The School District offered Spiegel a contract memorializing a provision to that effect. In April 2010, Spiegel and the School District entered into the Contract containing the following Provision under Benefits 8(B):

Provided that [Spiegel] remains employed until June 30, 2011, the School District shall allow [Spiegel] to participate in the School District's group health plan for active employees for the remainder of his life to the same extent, except as noted below, that the participation is available for similarly situated active employees. Similarly, [Spiegel's] dependents shall be eligible to participate in the School District's group health plan for active employees to the same extent, except as noted below, that participation is available for dependents of similarly situated active employees. After June 30, 2011, neither [Spiegel] nor his dependents shall pay any premiums for any group health insurance coverage described in this paragraph. [Spiegel] and his dependents, as applicable, shall be responsible for any and all taxes associated with such coverage.

Spiegel served as superintendent as agreed through June 2011. Consistent with the Provision, the School District paid for the Spiegels’ health insurance premiums from the date of Spiegel's retirement through November 2019, when Spiegel became eligible for Medicare. In his amended petition, Spiegel maintains that at no time after his retirement did he elect, or was asked by the School District to elect, to become or remain a member of any health plan offered by the School District.

In November 2019, the School District stopped paying Spiegel's health insurance premiums when Spiegel turned sixty-five and became eligible for Medicare. The School District then provided Spiegel the opportunity to participate in one of two Medicare supplement health plans: one plan administered by United Healthcare, which would cost Spiegel nothing, and the other plan administered by Monumental Life Insurance Co. ("Benistar"), which required monthly premium payments. Spiegel applied for coverage through United Healthcare, but was deemed ineligible. Spiegel then began making monthly insurance premium payments to both Medicare and Benistar. The School District continued to pay the insurance premiums for Spouse through March 31, 2020. The School District stopped paying Spouse's monthly health insurance premium when Spouse turned sixty-five and became eligible for Medicare.

Spiegel brought this breach-of-contract action against the School District in January 2020. In his amended petition filed September 2020, Count I alleged the School District breached the Contract when it stopped paying for the cost of the Spiegels’ health insurance consistent with the Provision. Count II sought specific performance of the Contract. Count III sought a declaratory judgment as to his rights, status, and/or the parties’ legal relations under the Contract. Lastly, Count IV raised a claim of promissory estoppel, alleging the School District should be estopped from terminating payments of the Spiegels’ health insurance premiums because Spiegel detrimentally relied on the promise of free lifetime health insurance and injustice resulted from the School District's failure to honor the Contract.

The School District moved to dismiss Spiegel's amended petition for failure to state a claim upon which relief could be granted. The School District reasoned that because Section 169.590.3 requires retired employees to pay their own health insurance premiums, the Provision obligating the School District to pay the Spiegels’ health insurance premiums for the rest of their lives rendered the Contract invalid and unenforceable. The School District also argued that Section 432.070 ’s limitations of the School District's powers to enter into contracts not expressly authorized by law barred Spiegel's claim for promissory estoppel.

The trial court held a hearing on the School District's motion to dismiss. Subsequently, the trial court granted the School District's motion and dismissed all four counts in Spiegel's petition, granting judgment to the School District. Spiegel now appeals.

Points on Appeal

Spiegel raises four points on appeal. Point One asserts the trial court erred in dismissing his petition because the prohibitory language of Section 169.590.3 applies only to retiree health insurance, whereas the Provision provides for active employee health insurance. Relatedly, Point Two contends the trial court thus erred in finding Section 432.070 required dismissal of his petition because the Contract did not exceed the School District's powers. Point Three argues the trial court erred in dismissing his claim for promissory estoppel due to the exceptional circumstances of the case. Point Four maintains the trial court erred in dismissing his claim for specific performance because not requiring the School District to perform its obligations under the Provision would harm the Spiegels, for whose benefit Section 169.590 was enacted.

Standard of Review

"We review de novo the grant of a motion to dismiss and the interpretation of the statute on which that dismissal was based." Epice Corp. v. Land Reutilization Auth. of City of St. Louis, 608 S.W.3d 725, 727 (Mo. App. E.D. 2020) (citing Miller v. Frank, 519 S.W.3d 472, 475 (Mo. App. E.D. 2017) ); see also G.B. v. Crossroads Acad.-Cent. St., 618 S.W.3d 581, 588 (Mo. App. W.D. 2020) (citing D.E.G. v, Juv. Officer of Jackson Cnty., 601 S.W.3d 212, 216 (Mo. banc 2020) ).

"In determining the appropriateness of the trial court's dismissal of a petition, an appellate court reviews the grounds raised in the defendant's motion to dismiss." Goldsby v. Lombardi, 559 S.W.3d 878, 881 (Mo. banc 2018) (internal quotation omitted). "A motion to dismiss for failure to state a cause of action is solely a test of the adequacy of the plaintiff's petition." Id. (internal quotation omitted). "When considering whether a petition fails to state a claim upon which relief can be granted, this Court must accept all properly pleaded facts as true, giving the pleadings their broadest intendment, and construe all allegations favorably to the [petitioner]." G.B., 618 S.W.3d at 588 (quoting R.M.A. by Appleberry v. Blue Springs R-IV Sch. Dist., 568 S.W.3d 420, 424 (Mo. banc 2019) ). However, "[c]onclusory allegations of fact and legal conclusions are not considered in determining whether a petition states a claim upon which relief can be granted." Willamette Indus., Inc. v. Clean Water Comm'n of State of Mo., 34 S.W.3d 197, 200 (Mo. App. W.D. 2000).

We will affirm a trial court's dismissal of a petition if it is correct on any ground raised in the motion...