Editor’s note: this article was updated to add a quote from the appellate court’s opinion on its decision for clarification.
California’s 6th Appellate District Court reversed a judgment April 19 and declared that retired San Benito County employees Normandy “Mandy” Rose and Margie Riopel “do not have a vested right to receive the same health insurance premium contributions as the county provides its active, unrepresented employees” and ordered that “plaintiffs recover nothing on their claims.” The order awarding plaintiffs’ attorney fees was also reversed and “the parties shall bear their own costs on appeal.”
Rose said she and Riopel are contemplating an appeal but must speak with their attorney first.
The appeals court decision is the latest in a long legal battle against the county after it was ordered to provide 100% medical benefits to Rose and Riopel. The county filed its notice of appeal on Dec. 15, 2020.
Superior Court Judge Robert O’Farrell ruled in favor of Rose and Riopel, who sued the county in 2017 claiming they entered into an implied contract in which they agreed to provide the plaintiffs with the same health insurance premium contributions as the county’s active employees receive.” O’Farrell said the county must reimburse Rose $1,845 and Riopel $6,061 for premiums they paid through November 2020.
While Rose and Riopel’s case has been reversed, over 70 other retired county employees are still butting heads with the county Board of Supervisors to recover all their out-of-pocket costs going back to 2015, when the county stopped paying 100% of their benefits.
A dozen or so of the former employees appeared at the Feb. 18, 2020, supervisors meeting to submit a petition, signed by 72 former employees, demanding full healthcare coverage.
The five-year battle has been costly to the county. The county’s attorney’s fees were $572,000 for the original case, and an additional $98,000 for the appeal, according to County Counsel Barbara Thompson.
“However, this will be vastly offset by future savings due to reduced OPEB (Other Post-Employment Benefits), liability and lower annual costs,” she told BenitoLink. “In February 2020, the county estimated that it was saving more than $300,000 per year because of the 70% cap, not including the OPEB savings. Additionally, the county now does not have to pay the attorney’s fee award of $315,437 ordered by the trial court.”
Rose told BenitoLink that after speaking with their attorney she and Riopel agreed with the appellate court’s comment that it recognized “the significance of the judgment, and the painful impact of its reversal, on those county retirees who have experienced increased health insurance premiums in retirement and reduced benefit contributions paid by the county.”
It went on to state: “There is no dispute that Rose and Riopel understood, through the course of their employment and derived from communications with human resources or other county administrative staff, that the county would cover their medical premiums in retirement as during employment. While we are sympathetic to the unfairness of the result here, our Supreme Court has articulated a rigorous presumption against inferring implied, vested contractual rights, except where manifest in the language of the relevant government resolutions and related, admissible extrinsic evidence.”
A second lawsuit on behalf of 35 retired employees concerning the health benefits had been put on hold by San Benito County Superior Court Judge Omar Rodriguez, pending the outcome of the Rose and Riopel suit.
Thompson said the county was pleased with the appellate court’s decision because it followed the law that was established by the California Supreme Court.
“The court of appeals has approved the county’s decision, which was made in conjunction with the county’s unions, to establish the health insurance benefit contribution for Medicare-eligible retirees at 70% of what is paid toward active employees,” she said.
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