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Wood v. Unified Government of Athens-Clarke County

United States District Court, M.D. Georgia, Athens Division

January 22, 2018

DAVID A. WOOD, on behalf of himself and all persons similarly situated, et al., Plaintiffs,
v.
UNIFIED GOVERNMENT OF ATHENS-CLARKE COUNTY, GEORGIA, Defendant.

          ORDER

          CLAY D. LAND CHIEF U.S. DISTRICT COURT JUDGE.

         Plaintiffs, who are retirees of Defendant Unified Government of Athens Clarke-County, Georgia (“ACC”), believe they had a deal. If they worked for ACC for the requisite number of years, they would receive premium-free health insurance benefits throughout retirement at the same level they had on their last day of employment with ACC, including dependent coverage. ACC maintains that any such deal is unenforceable because it was made without the degree of formality required under Georgia law; and if an enforceable deal does exist, ACC argues that it is different than the one Plaintiffs rely upon. As explained in the remainder of this Order, the Court finds that an enforceable deal was made but that a genuine factual dispute exists as to the terms of the deal. Accordingly, the parties' motions for summary judgment (ECF Nos. 53 & 55) are denied.

         SUMMARY JUDGMENT STANDARD

         Summary judgment may be granted only “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). In determining whether a genuine dispute of material fact exists to defeat a motion for summary judgment, the evidence is viewed in the light most favorable to the party opposing summary judgment, drawing all justifiable inferences in the opposing party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A fact is material if it is relevant or necessary to the outcome of the suit. Id. at 248. A factual dispute is genuine if the evidence would allow a reasonable jury to return a verdict for the nonmoving party. Id.

         FACTUAL BACKGROUND

         I. The Health Insurance Plans

         Before January 1, 1991, the City of Athens and Clarke County, Georgia operated as separate government entities with separate health insurance plans for their employees and retirees.

         A. City of Athens Retiree Benefits

         The Mayor and City Council were the governing body for the City of Athens. In 1975, the City Council passed a resolution stating, “[t]he requirements for hospitalization and life insurance coverage for retired employees shall be 15 or more continuous years of service with the City.” Spratlin Decl. Ex. B, Resolution re Life and Hospitalization Insurance Coverage to Retired Employees (Feb. 4, 1975) (“1975 City Resolution”), ECF No. 55-4 at 56. In 1990, the City Council passed a motion adopting a finance committee recommendation stating that “employees hired July 1, 1990 or after will receive 100% health insurance coverage upon retirement with 15 years service, and will have option to obtain dependent coverage at 100% cost to retiree.” Spratlin Decl. Ex. H, Council Minutes (Mar. 6, 1990) (“1990 City Motion”), ECF No. 55-4 at 217. Plaintiffs assert that this motion establishes that the City paid for retirees' dependent coverage prior to 1990 and that this practice was discontinued in 1990.

         B. Clarke County Retiree Benefits

         The governing authority for Clarke County was the Board of Commissioners. In 1981, the County Commissioners approved a motion that stated: “after January 1, 1982, the County will pay the cost of the Health Insurance the individual has in effect at the time of retirement.” Spratlin Decl. Ex. L, Cty. Comm'n Minutes (Nov. 24, 1981) (“1981 County Motion”), ECF No. 55-4 at 290. In 1984, the County Commissioners passed an amendment to its health insurance plan, which stated: “An employee who qualified for Benefits under the county Employees' Retirement Plan and retires from active employment will be eligible to continue as a member of the Health Care Program without cost.” Spratlin Decl. Ex. M, Cty. Comm'n Minutes (Aug. 14, 1984) (“1984 County Motion”), ECF No. 55-4 at 292. The amendment further provided: “As soon as the retiree is eligible for Medicare, the retiree and/or spouse must enroll. At this time, the Program will be excess over Medicare.” Id. Finally, the amendment stated: “An employee obtains vested rights after 10 [continuous] years of service with Clarke County.” Id.

         C. ACC Governance and Retiree Benefits

         1. ACC Governance

         The City and County consolidated to form ACC, effective January 1, 1991. ACCs Charter contains a number of relevant provisions:

♦ “No permanent full-time employee of the City of Athens or Clarke County shall suffer any diminution of compensation resulting from the adoption of this charter. The definition of compensation includes, but is not limited to, salary, insurance and retirement benefits, annual and sick leave, and rights provided by a merit system.” Charter of the Unified Gov't of Athens-Clarke Cty. (“ACC Charter”) § 9-104(b), 1990 Ga. Laws 3560, 3626, ECF No. 55-2 at 16, 49.
♦ Requires ACC to ensure that all employees performing the same functions and having the same responsibilities receive uniform compensation by the end of the fourth year of ACC s operations. Id. § 9-104(c), ECF No. 55-2 at 49.
♦ The existing ordinances and resolutions of the City and County and their agencies that are not inconsistent with the Charter “shall continue in effect as ordinances, resolutions, rules, or regulations of Athens-Clarke County, Georgia . . . until they have been repealed, modified, or amended.” Id. § 9-109, ECF No. 55-2 at 50.
♦ “Except as otherwise provided by this charter, all contracts . . . and other obligations or instruments entered into by Clarke County [or the City] or for its benefit prior to the effective date of this charter shall continue in effect according to the terms thereof as obligations and rights of the unified government[.]” Id. §§ 9-110(a) & (b), ECF No. 55-2 at 50.

         2. ACC Retiree Benefits

         After unification in 1991, ACC employees and retirees “received health care benefits without payment of any portion of the costs of said benefits in the form of premiums, though said employees [and retirees] have paid deductibles, co-pays, non-covered costs and other such traditional charges which are usually found in employer sponsored group health insurance programs.” Spratlin Decl. Ex. S, 2002 ACC Ordinance § 1-9-19 (June 4, 2002), ECF No. 55-4 at 641. Until 2002, ACC had only one insurance plan at a time, and that plan applied to both employees and retirees.

         In 2002, ACC enacted Ordinance § 1-9-19. See generally id., ECF No. 55-4 at 641-47. It provided that ACC would “continue to offer premium free health care benefits” to retirees hired before December 1, 2001 who were “under the age of 65 and not receiving Medicare B benefits.” Id. at 645. It further provided that retirees hired before December 1, 2001 who were eligible for Medicare or “whenever they become eligible for Medicare, shall be required to elect Medicare in order to receive Athens-Clarke County health insurance coverage which will be secondary to Medicare.” Id. at 646. Those retirees enrolled in Medicare Part B would still receive premium-free secondary health insurance through ACC. Id. Dependents of retirees who were hired before December 31, 1993 were “treated in the same manner as the retiree; thus, such dependents shall receive premium free insurance once said dependent qualifies and enrolls in Medicare Part B so that his or her insurance with Athens-Clarke County becomes secondary to Medicare Part B.” Id. The 2002 ordinance stated that the premium-free secondary insurance for “retirees who were hired after December 1, 2001” and “dependents of retirees who were hired after December 31, 1993” “shall be subject to termination or modification in any respect by the Mayor and Commission in its sound discretion.” Id. (emphasis added). The ordinance did not make a similar statement regarding retirees who were hired before December 31, 1993.

         In 2013, ACC replaced Ordinance § 1-9-19. Under the new ordinance, retirees were no longer enrolled in ACC's health insurance program. Instead, retirees (and dependents of retirees hired before January 1, 1994) received contributions to healthcare reimbursement accounts so they could purchase their own insurance from a marketplace. Spratlin Decl. Ex. U, 2013 ACC Ordinance § 1-9-19 (June 4, 2013), ECF No. 55-4 at 663. To receive this ...


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