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Bonzella v. Monroe Township

March 29, 2004


On appeal from the Superior Court of New Jersey, Law Division, Gloucester County, L-1995-00.

Before Judges King, Braithwaite and S. L. Reisner.

The opinion of the court was delivered by: S. L. Reisner, J.A.D.


Argued March 10, 2004

Monroe Township (Township) appeals from a trial court order granting summary judgment in favor of respondents Thomas and Theresa Bonzella (Thomas and Theresa) on their claim that as retired township employees with twenty-five years of service, they were each separately entitled to a policy of health insurance covering themselves and their dependents. Respondents cross-appeal the dismissal of their breach of contract, emotional distress, Equal Protection, and Law Against Discrimination claims.

After an evidentiary hearing, the trial judge held that the applicable Township resolution uniformly guaranteed individual and dependent coverage for each retired employee with twenty five years of service and that the Township business administrator had no authority to deny Theresa's application for such coverage. Because we conclude that the trial judge correctly interpreted the resolution, we affirm the judgment ordering the Township to provide the benefits sought by respondents. Pursuant to N.J.S.A. 40A:10-23, health care coverage for retired municipal employees can only be provided on a uniform basis, by ordinance or resolution; benefits cannot be denied on the basis of budget-driven ad hoc determinations by municipal officials. We further hold that because Thomas and Theresa each worked the required twenty-five years, they now each have a contractual right to the promised benefits, which the Township cannot unilaterally abrogate. Since our decision provides respondents with the relief they sought, it is unnecessary to address the remaining issues raised on their cross-appeal.*fn1


The statute governing health care benefits for municipal retirees provides, in relevant part:

The employer may, in its discretion, assume the entire cost of such coverage and pay all of the premiums for employees... b. who have retired after 25 years or more of service credit in a State or locally administered retirement system and a period of service of up to 25 years with the employer at the time of retirement, such period of service to be determined by the employer and set forth in an ordinance or resolution as appropriate,... including the premiums on their dependents, if any, under uniform conditions as the governing body of the local unit shall prescribe.

[N.J.S.A. 40A:10-23.]

Pursuant to the statute, the Township Council adopted two resolutions related to health insurance coverage for retired Township employees during the time of respondents' employment. The first resolution, R-50-82, was adopted in April 1982, while the Township was enrolled in the State Health Benefits Program. That resolution, entitled"Resolution to adopt the provisions of Chapter 88, Public Laws of 1974 to permit local public employers to pay the premium charges for certain eligible pensioners and their dependents and to pay Medical charges for such retirants and their spouses covered by the New Jersey State Health Benefits Program," included the following language:

We hereby agree to pay the premium or periodic charges for the benefits provided to all eligible retired employees and their dependents covered under the program, but not including survivors, if such employees retire from a [s]tate or locally-administered retirement system effective after the date the employer adopted the State Health Benefits Program on a benefit based on 25 years or more of service credited in such retirement system....

The second resolution, R-62-93, adopted by the Town Council in March 1993, stated that the Township was withdrawing from the New Jersey State Health Benefits Program, but intended to continue to provide health benefits to its retirees as follows: [T]he Township of Monroe shall provide...

insurance coverage for all employees retired after 25 years or more of service with Monroe Township under the sames [sic] terms and conditions ...

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