| Matter of Gooshaw v City of Ogdensburg |
| 2009 NY Slip Op 08738 [67 AD3d 1288] |
| November 25, 2009 |
| Appellate Division, Third Department |
| In the Matter of Thomas W. Gooshaw et al., Appellants, v City ofOgdensburg et al., Respondents. |
—[*1] Hancock & Estabrook, L.L.P., Syracuse (Janet D. Callahan of counsel), forrespondents.
Kavanagh, J. Appeal from a judgment of the Supreme Court (Demarest, J.), enteredSeptember 25, 2008 in St. Lawrence County, which, among other things, converted an action fordeclaratory judgment into a proceeding pursuant to CPLR article 78 and granted respondents'motion for, among other things, summary judgment dismissing the petition.
Petitioners were retired firefighters formerly employed by respondent City of Ogdensburg'sfire department. They claim that the collective bargaining agreement (hereinafter CBA) in placeat the time they retired provided that the City would pay "100 percent of the cost" of their healthinsurance.[FN1]In that regard, the City not only paid the premiums for health insurance for all retiredfirefighters, but—until January 1, 2001—also reimbursed them for any cost incurredin obtaining health coverage under Medicare Part B. In 2005, petitioners filed a complaintclaiming that the City had breached the CBA by refusing to cover the cost of these Medicare PartB premiums and sought a declaratory judgment to the effect that the City, under the CBA, wasrequired to reimburse them for these payments.[FN2]After both sides moved for [*2]summary judgment, SupremeCourt, pursuant to CPLR 103 (c), converted the action into a CPLR article 78 proceeding,applied a four-month statute of limitations and dismissed the petition as untimely (seeCPLR 217). Petitioners now appeal.
Initially, we note that the principal claim made by petitioners is that respondents breachedthe CBA by failing to honor their contractual obligation "to pay for one hundred percent (100%)of the cost of retirees' health insurance, including Medicare Part B premiums." "[W]here thefocus of the controversy is on an agency's breach of an express contractual right,. . . a contract action is the recommended remedy" (Abiele Contr. v New YorkCity School Constr. Auth., 91 NY2d 1, 8 [1997]; see Matter of Steve's Star Serv. vCounty of Rockland, 278 AD2d 498, 499-500 [2000]). Here, the "primary thrust" ofpetitioners' claim was to enforce a provision in the CBA that they alleged created a contractualobligation requiring the City to reimburse them for payments they made for Medicare Part Bcoverage (Abiele Contr. v New York City School Constr. Auth., 91 NY2d at 8). "Theproper vehicle for seeking damages arising from an alleged breach of contract by a publicofficial or governmental body is an action for breach of contract, not a proceeding pursuant toCPLR article 78" (Kerlikowske v City of Buffalo, 305 AD2d 997, 997 [2003] [citationsomitted]; see Sims v State of New York, 30 AD3d 949, 949-950 [2006]; Calfapietrav Donahue, 100 AD2d 504 [1984]). Accordingly, since this claim involves an allegation thatthe City breached its contractual obligations under the CBA, Supreme Court erred in convertingthe action to a CPLR article 78 proceeding and the six-year statute of limitations applies here(see CPLR 213). Therefore, the court erred in granting respondents' motion for summaryjudgment and dismissing the petition as untimely.
In support of their motion, petitioners claim that because an arbitrator on similar factspreviously found that the CBA required the City to make these payments, the City should beestopped here from denying the existence of this contractual obligation.[FN3]The doctrine of collateral estoppel can apply to findings rendered as the result of an arbitrationproceeding (see Mahler v Campagna, 60 AD3d 1009, 1011 [2009]), and respondents donot deny that the issue of its obligation to make these payments was before the arbitrator or thatit had a full and fair opportunity in that proceeding to litigate it (see Buechel v Bain, 97NY2d 295, 303-304 [2001], cert denied 535 US 1096 [2002]; NAMA Holdings, LLCv Greenberg Traurig, LLP, 62 AD3d 578, 579 [2009]). Instead, respondents claim that thedoctrine of collateral estoppel does not apply here because the CBA has undergone extensiverevisions as a result of ongoing negotiations between the City and the firefighters' union and thatthe contract that was before the arbitrator was not identical to the CBAs that were in effect whenall of the petitioners retired (see Jeffreys v Griffin, 1 NY3d 34, 39 [2003]; Buechel vBain, 97 NY2d at 303-304).
We note that petitioners did not all retire at the same time and the City is correct that theprovisions of the CBAs in place on the date of their respective retirements were not, in eachinstance, entirely the same. Specifically, the CBA in place when 10 of the petitioners retired[*3]provided that "the City will pay 100% of the cost for healthinsurance for retired employees together with 35% of the costs for health insurance for anydepend[e]nts of a retired employee." In 1990, the CBA was renegotiated and the followinglanguage—which was the subject of the arbitration proceeding—was in place whenthe remaining six petitioners retired: "For current active employees retiring under the terms ofthis contract, the City will pay 100% of the cost of the Lawrence Plan or the M.V.P. (HMO) Planfor retired employees together with 35% of such cost for any depend[e]nts of a retired employee,where the retired employee's coverage is the same as that for active employees . . .Retirees receiving Medicare will be eligible for Lawrence Plan coverage only, at no cost tothem."
While the CBA as renegotiated in 1990 limited the choice that retired firefighters hadregarding their health plan, it did not alter or modify the City's obligation to provide them with afully funded health insurance program. Moreover, in her determination, the arbitrator concludedthat the "City payment of Medicare reimbursement did not change with the changed languageand for many years, through several contracts, so that the meaning of the contract remained thesame after the language change." In addition, the arbitrator took specific note of the fact thatwhile these CBAs had been the subject of extensive renegotiation during the 15-year periodimmediately preceding the arbitration, the City continued its practice of reimbursing retiredfirefighters for the payment of these premiums, and at no time was a provision included in theCBA to the effect that the City was not obligated to make these payments. As such, thearbitrator's decision and her finding that the City is obligated to reimburse retired firefighters forthese payments under the CBA is dispositive of the claims raised here and the City is estoppedfrom claiming otherwise in this litigation. Summary judgment should have been granted inpetitioners' favor on their second cause of action.
Spain, J.P., Rose, Lahtinen and Malone Jr., JJ., concur. Ordered that the judgment ismodified, on the law, without costs, by reversing so much thereof as converted the matter to aCPLR article 78 proceeding, granted respondents' motion for summary judgment and deniedpetitioners' motion for summary judgment in its entirety; matter converted to a declaratoryjudgment action, respondents' motion denied and petitioners' motion granted to the extent ofawarding summary judgment in the second cause of action, and it is declared that respondentCity of Ogdensburg is required to reimburse retired firefighters for Medicare Part B premiums;and, as so modified, affirmed.
Footnote 1: Thirty-five percent of the costof health insurance for petitioners' dependents would also be paid by the City.
Footnote 2: The matter was initially filed asa class action; however, after two amendments, the same claims are now asserted on behalf ofpetitioners, in their individual capacities.
Footnote 3: The CBA only permitted thefirefighters' union, and not individuals, to submit grievances to arbitration, and the union refusedpetitioner Thomas W. Gooshaw's request to prosecute this grievance through arbitration,requiring the commencement of this matter.