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Nicholas and Marion Sarapuchiello, Individually and As Guardians For v. City of Hackensack


June 3, 2011


On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-9759-09.

Per curiam.


Submitted May 16, 2011 -

Before Judges Reisner and Sabatino.

By leave granted, defendants the City of Hackensack (City) and the Hackensack Fire Department (Department) appeal from a May 24, 2010 order, granting partial summary judgment directing the City to reinstate plaintiff Nicholas Sarapuchiello's wife and daughter to the City's Group Health Benefits Plan and to restore their health insurance coverage retroactive to the date of their removal from the plan.*fn1 Because we conclude that this matter was not ripe for summary judgment, we vacate the May 24, 2010 order and remand this matter to the Law Division for further proceedings.


The trial court may grant summary judgment only where legally competent evidence establishes that "there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law."

R. 4:46-2(c); accord Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). The trial court cannot decide disputed factual issues but must decide whether there are any factual disputes. Agurto v. Guhr, 381 N.J. Super. 519, 525 (App. Div. 2005). We review the trial court's decision de novo, employing the same standard. Ibid.

Significantly, in reviewing an appeal from a summary judgment motion, "we are obliged to view the facts in the light most favorable to the non-moving party." Estate of Hanges v. Met. Prop. & Cas. Ins. Co., 202 N.J. 369, 374 (2010). Moreover, on occasion, a case will not be ripe for summary disposition even if both sides move for summary judgment. See Driscoll Const. Co., Inc. v. State, Dep't of Transp., 371 N.J. Super. 304, 317-18 (App. Div. 2004). We have independently reviewed the record with these principles in mind.


Nicholas Sarapuchiello (plaintiff) was hired as a firefighter for the City in 1969. After serving for eleven years, he retired on an ordinary disability pension in June 1980, at age thirty-eight. Immediately prior to his retirement, plaintiff's employment was covered by a collective bargaining agreement (CBA) between the City and the Hackensack Fire Fighters Association, Local No. 2081 (union). The CBA covered the years l977 to 1980. The provisions of that agreement are at issue in this appeal.

Article XV of the CBA provides that retired union members are entitled to specified health benefits for themselves and their eligible family members. The provision includes union members who retire on a disability pension.*fn2 The relevant section reads as follows:


15.1 All members covered by this Agreement and eligible members of their families shall be entitled to the following coverage:

(1) Hospitalization, Major Medical and Rider "J" or its equivalent.

(2) Hospitalization coverage for all member retirees and eligible members of their families to commence at age fifty-six (56) until such time as he becomes eligible for Medicare. Effective January 1, 1978, the eligible age will be fifty-five (55) years of age.

(3) Fire Fighters who are forced to submit for a disability pension must have been on the force five (5) or more years to be eligible for those benefits.

15.2 At age sixty-five (65), coverage to be for employee's (not spouse or eligible members of their family) Medicare only.

1. Each retiree shall be responsible to notify the City when he becomes fifty-six (56) or age fifty five (55) and again when he becomes age sixty-five (65) for the inclusion in the subject insurance coverage. [Emphasis added.]

There is no dispute that some years after he retired, plaintiff had a child, who was added to his City-provided health benefits plan in 1996. On June 14, 2007, the City sent plaintiff a letter notifying him that once he turned sixty-five, the City would reimburse plaintiff for his Medicare Part B premiums, but his dependents' health coverage would end after a six-month grace period. At that point, his family members could pay for continued coverage under the federal COBRA program for up to three years.

In July 2007, plaintiff applied for family health insurance through the Retired Group of the State Health Benefits Program (SHBP), but his application was rejected because the City, as his former employer, was reimbursing his Medicare premiums. Apparently, plaintiff did not appeal from the SHBP's determination. Plaintiff also attempted to pursue a grievance under the CBA, but the union declined to file a grievance because he was no longer an employee. On March 26, 2009, the Public Employment Relations Commission rejected his unfair practice charge against the union, confirming that a retired employee was not entitled to arbitrate a grievance under the CBA.

In November 2009, plaintiff and his family sued the City and the Department in the Law Division, asserting that the CBA entitled plaintiff's wife to "medical benefits for life" and entitled their daughter to medical benefits "until she is no longer eligible." The complaint asserted, among other theories, breach of contract and equitable estoppel. In the complaint, plaintiff alleged that he had been the president of the union "for years" starting in 1974 and that the City had drafted the version of the CBA that was in effect at the time he retired. But the complaint was not supported by a certification or otherwise verified.

It is unclear what, if any, discovery the parties exchanged thereafter, but on February 4, 2010, the Department filed a motion to dismiss the complaint.*fn3 That motion was supported by a certification of the Department's counsel, accompanied by copies of the CBA, the complaint, and the June 14 letter. On April 21, 2010, plaintiffs filed a cross-motion for summary judgment against both defendants. That motion was likewise supported only by a certification from plaintiffs' counsel, with several attached documents.

Those documents included a copy of a Prudential health insurance policy effective as of 1967, and a pamphlet entitled "Group Insurance City of Hackensack." The pamphlet indicated that it was an edition from September 1966, the year before plaintiff was hired. However, plaintiff did not provide any evidence concerning the terms of the union contract that was in effect as of 1966 or 1967. Further, the motion was not supported by any legally competent evidence showing that plaintiff received, or relied upon, any of the documents attached to his attorney's certification. See R. 1:6-6 (requiring motion evidence to be on personal knowledge).

Although plaintiff claims to have been the union president, he did not provide any evidence concerning the negotiation of the CBA covering 1977 to 1980. Nor was there any certification from plaintiff attesting to any actions he may have taken to his detriment in reliance on the City's alleged promise to provide his family with lifetime health insurance coverage.

In arguing the motions, plaintiff contended that the CBA unambiguously entitled him to family coverage. In the alternative, he argued that if the CBA was ambiguous, it should be construed with reference to the insurance policy and the pamphlet. Defendants argued that the CBA was unambiguous in terminating family coverage when the covered retiree became eligible for Medicare. They also contended that, if the CBA was ambiguous, the insurance policy and pamphlet were irrelevant, because they were generic documents, not drafted by the City, and not drafted with reference to any particular collective bargaining agreement. Rather, defendants contended that if parol evidence were to be considered, the relevant evidence would be contemporaneous documents from the time period when the CBA was being negotiated. Defendants also argued that there was no proof that plaintiff retired in reliance on the availability of family health insurance benefits.

In a written decision, the trial judge found that the CBA was ambiguous. In resolving the ambiguity, she gave significant weight to the insurance pamphlet, which indicated that family members were covered until they qualified for Medicare. She also relied on a section of the 1967 insurance policy, which stated that the fact that an employee's coverage terminated due to Medicare eligibility, would not necessarily mean that his dependents would be terminated from coverage. The judge concluded that the ambiguous terms of the CBA should be construed in favor of the employee, especially in light of the insurance policy terms.

The judge also concluded that the City was equitably estopped from terminating family coverage, where by its actions it led plaintiff to believe that his family coverage would continue. She further considered that the City had prevented plaintiff from getting coverage through the State Health Benefits Plan by telling the SHBP that he was entitled to "lifetime benefits even though the only benefit he would receive was Medicare reimbursement."


Having reviewed the record, we conclude that the parties asked the trial judge to decide this case summarily without providing sufficient legally competent evidence to support either of their respective positions. On this appeal, the City once again argues that the CBA is unambiguous in providing family coverage only until the retired employee becomes eligible for Medicare. Plaintiffs respond that the CBA unambiguously supports their position. We disagree with both sides on this point.

By any fair reading, the CBA is poorly drafted and ambiguous. It can be read as terminating benefits to a sixty-five-year-old retiree, with the exception of Medicare reimbursements, but as not terminating benefits to the retiree's family members. Alternatively, it can be construed as terminating all benefits to the employee's family when the retiree reaches age sixty-five. Or, it can be read as terminating all benefits to any covered person who reaches age sixty-five, except that Medicare reimbursement shall be paid for the retiree only. See Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997) ("[a]n ambiguity in a contract exists if the terms of the contract are susceptible to at least two reasonable alternative interpretations" (citations omitted)).

Neither party provided the motion judge with the kinds of extrinsic evidence that would be relevant to resolve the ambiguity. We agree with defendants that the insurance policy is not a useful aid to interpretation for several reasons. First, there is no evidence that the 1967 insurance policy terms remained in effect at the time the 1977-80 CBA was negotiated. The 1966 insurance pamphlet is irrelevant as an interpretive aid for the same reason. Second, there is no evidence that the 1977-80 CBA was negotiated with regard to the pertinent provisions of the 1967 insurance policy. Third, the insurance policy rider concerning "Effect of Medicare on Coverage Under the Group Policy" does not guarantee that dependent coverage will continue after a member qualifies for Medicare.

This rider provides that no person, whether an employee or a dependent, shall be covered under the policy "on or after the first day he is or could be covered under Medicare." The rider then provides that a dependent's coverage "shall not be terminated solely because the Employee's insurance terminates [under the rider's provisions], provided the Policyholder and the Insurance Company have arranged . . . for not so terminating such insurance on qualified dependents." [emphasis added]. There is no record evidence as to whether the City paid for such coverage. And, more importantly, this generic insurance policy cannot answer the question whether the CBA required the City to "arrange" for such extended coverage.

Neither side provided the motion judge with the type of contemporaneous evidence that might assist in construing the CBA. They did not, for example, provide legally competent evidence concerning the negotiation of the CBA. Nor did they provide evidence of prior or later CBA's to show how, if at all, the pertinent terms may have changed or stayed the same. See Driscoll, supra, 371 N.J. Super. at 316-18; Great Atlantic & Pacific Tea Co., Inc. v. Checchio, 335 N.J. Super. 495, 501-02 (App. Div. 2000).

They also provided no evidence as to how the 1977-80 CBA language was implemented. See Savarese v. Corcoran, 311 N.J. Super. 240, 248 (Ch. Div. 1997) (the parties' behavior in implementing an agreement may be indicative of their intent in forming it), aff'd o.b., 311 N.J. Super. 182 (App. Div. 1998). It seems unlikely that plaintiff would have been the only employee who retired between 1977 and 1980 and had a family. Did the City terminate coverage for dependents of those other retirees once the retirees reached age sixty-five? If not, when and why did the City decide that it was not going to provide health benefits to dependents of retirees who reached age sixty-five? The record answers none of these critical questions, and the record we have, viewed in the light most favorable to defendants, does not entitle plaintiffs to judgment as a matter of law. See Estate of Hanges, supra, 202 N.J. at 374; Driscoll, supra, 371 N.J. Super. at 317-18.

Finally, plaintiff produced no evidence that would entitle him to relief under the doctrine of equitable estoppel. Generally, a party may be equitably estopped by its own conduct from pursuing a course of action if another party has detrimentally relied upon that conduct. Summer Cottagers' Ass'n of Cape May v. City of Cape May, 19 N.J. 493, 503-04 (1955). Equitable estoppel is seldom applied against public entities, Middletown Twp. Policemen's Benevolent Ass'n v. Twp. of Middletown, 162 N.J. 361, 367 (2000), although in appropriate circumstances, it may be invoked "to prevent manifest wrong and injustice," so long as "invocation of the rule would not hinder or prejudice essential governmental functions." Vogt v. Belmar, 14 N.J. 195, 205 (1954).

In Middletown, for example, township officials assured the employee prior to his retirement that his purchased service credits would count toward his eligibility for post-retirement health benefits. 162 N.J. at 372. The township extended him those benefits for ten years before terminating them on the basis that only actual service counted toward his eligibility. Ibid. The Court held that the township was estopped from doing so, because the employee had specifically relied on officials' assurances of coverage in deciding to retire and, after ten years of retirement, was "effectively foreclosed" from seeking suitable coverage from another employer. Id. at 372-73.

In this case, there is no certification or other proof that plaintiff relied on the CBA in expecting that his family coverage would continue. More importantly, there is no proof of any detrimental change in his position that would justify the application of estoppel. There is no evidence, for example, that he accepted a disability retirement because he believed that his family would receive lifetime health care coverage. See Middletown, supra, 162 N.J. at 372. Moreover, there is no proof that the City did anything wrong in truthfully advising the State Health Benefits Program that plaintiff was entitled to some continuing benefits. The City cannot be held accountable for the SHBP's interpretation of the law concerning health benefits for retirees, a construction plaintiff did not challenge. See N.J.A.C. 17:9-6.9(c) (excluding from the SHBP retiree program those retirees whose employers reimburse them for Medicare Part B premiums).

For these reasons, we vacate the May 24, 2010 order granting partial summary judgment and remand this case to the Law Division for completion of discovery and other proceedings consistent with this opinion.*fn4


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