Opinion
No. UWY-CV-06-5002597 S
May 3, 2010
MEMORANDUM OF DECISION FACTS
The plaintiff, Stephen R. Ferrucci, III, commenced this action by service of process on August 25, 2006, against the defendant, the town of Middlebury. The operative complaint is the revised amended complaint (#105) filed on March 21, 2007 (amended complaint). The amended complaint contains two counts, the first alleging a breach of contract and the second alleging a claim for promissory estoppel.
The plaintiff had originally named individual defendants as well, including: Michael W. Beldon, Edward G. Asselin and John Dibble, alleging that they were all members of the Retirement Committee of the town of Middlebury. On March 6, 2007, the court, Gilligan, J., granted the individual defendants' motion to strike all claims brought against them. After the plaintiff declined to replead any cause of action against them, the court entered judgment in the individual defendants' favor on May 14, 2007.
The material allegations contained in the amended complaint are as follows. The defendant hired the plaintiff as a police officer on December 1, 1974. As an employee, the plaintiff was a member of a union that had negotiated a series of collective bargaining agreements with the defendant including one that was in force from July 1, 1988, until June 30, 1990 (1988 agreement). The defendant's retirement plan that was effective July 1, 1967, as amended on February 14, 1973, (retirement plan) was made applicable under the terms of the 1988 agreement.
On October 24, 1988, the plaintiff retired at the age of thirty-eight after approximately fourteen years of service. The plaintiff thereafter took another job. In 1995, the plaintiff visited a financial advisor in order to determine how much he would need to save to retire completely at age sixty-five. The advisor counseled him to contact the defendant to gather specific information about his retirement benefits.
The plaintiff contacted the defendant's finance director and asked for information about the nature of his retirement benefit under the retirement plan. The retirement plan provided, inter alia, that: "[T]he `Normal Retirement Date' of a policeman means the first day of the month coincident with or next following the later of (i) the date on which he completes twenty-five (25) years of Credited Service or (ii) the date on which he attains age fifty-five (55), but in no event later than (iii) his sixty-fifth (65th) birthday." The finance director contacted the actuary of the retirement plan for a response. The actuary informed the finance director that, among other things, the plaintiff's eligibility for a normal retirement benefit would commence December 1, 2004. The finance director relayed this information to the plaintiff in writing. December 1, 2004, was the first day of the first month following the plaintiff's fifty-fifth birthday.
Based on the information provided by the finance director, the plaintiff returned to his financial advisor and adjusted his contribution to certain investments including a variable annuity contract. Furthermore, the plaintiff made plans to retire from his current job at a date certain.
Thereafter, sometime in 2004, the defendant's retirement committee informed the plaintiff that he would not be eligible on December 1, 2004, for his normal retirement benefit. It also informed the plaintiff, however, that he could receive a reduced benefit starting on that date. On October 15, 2004, the plaintiff agreed to receive a reduced benefit, while reserving his right to contest the denial of his normal benefit.
The plaintiff seeks money damages, along with costs and interest. He also seeks an order of specific performance requiring the defendant to honor the terms of the retirement plan.
The defendant filed the present motion for summary judgment on June 8, 2009, along with a memorandum of law. The plaintiff filed an objection along with a memorandum of law in opposition on March 3, 2010, to which the defendant replied on March 8, 2010. The court heard oral argument on the motion on March 8, 2010.
DISCUSSION
"Practice Book § 17-49 provides that summary judgment shall be rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." (Internal quotation marks omitted.) Provencher v. Enfield, 284 Conn. 772, 790-91, 936 A.2d 625 (2007).
"The courts are in entire agreement that the moving party for summary judgment has the burden of showing the absence of any genuine issue as to all the material facts, which, under applicable principles of substantive law, entitle him to a judgment as a matter of law . . . As the burden of proof is on the movant, the evidence must be viewed in the light most favorable to the opponent . . . Once the moving party has met its burden . . . the opposing party must present evidence that demonstrates the existence of some disputed factual issue." (Internal quotation marks omitted.) Zielinski v. Kotsoris, 279 Conn. 312, 318-19, 901 A.2d 1207 (2006).
I BREACH OF CONTRACT CLAIM-COUNT ONE
The defendant argues simply that, under the unambiguous language of the retirement plan, the plaintiff is not entitled to a normal retirement benefit because he has neither reached the age of fifty-five with twenty-five years of service nor reached the age of sixty-five. The plaintiff contends that the language of the retirement plan is ambiguous and that it is reasonable to interpret the language of the plan, when considered as a whole, as providing a police officer with a normal retirement benefit at age fifty-five if the officer has ten years of service.
"[A] contract is unambiguous when its language is clear and conveys a definite and precise intent." (Internal quotation marks omitted.) D'Amato Investments, LLC v. Sutton, 117 Conn.App. 418, 424, 978 A.2d 1135 (2009). "If the language of [a] contract is susceptible to more than one reasonable interpretation, [however] the contract is ambiguous." (Internal quotation marks omitted.) 19 Perry Street, LLC v. Unionville Water Co., 294 Conn. 611, 623, 987 A.2d 1009 (2010). "The court will not torture words to impart ambiguity where ordinary meaning leaves no room for ambiguity . . . Moreover, the mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous." (Internal quotation marks omitted.) D'Amato Investments, LLC v. Sutton, supra, 424.
"It is well settled that [w]here the language of [a] contract is clear and unambiguous, the contract is to be given effect according to its terms . . . Although ordinarily the question of contract interpretation, being a question of the parties' intent, is a question of fact . . . [w]here there is definitive contract language, the determination of what the parties intended by their contractual commitments is a question of law . . . The court's determination as to whether a contract is ambiguous is a question of law . . ." (Internal quotation marks omitted.) Electric Cable Compounds, Inc. v. Seymour, 95 Conn.App. 523, 528-29, 897 A.2d 146 (2006).
The defendant attaches a copy of the retirement plan as Exhibit B to its memorandum of law in support of its motion for summary judgment. Eligibility for retirement benefits is governed by Article V of the retirement plan. Section 1 thereof states the requirements for obtaining a "normal retirement benefit," providing in relevant part: "Any Member who on or after the Effective Date (i) shall attain his Normal Retirement Date, (ii) shall have completed at least ten (10) years of Credited Service and (iii) shall thereafter retire, shall be entitled to receive a monthly normal retirement benefit upon application therefor." (Defendant's Memorandum of Law, Exhibit B, p. 7.)
Section 2 of Article V provides for the payment of a lesser amount as an early retirement benefit provided an employee is at least age fifty-five and has at least ten years of service.
Pursuant to Article II of the retirement plan, an employee's "Normal Retirement Date" is calculated as follows: "the first day of the month coincident with or next following the Employee's sixty-fifth (65th) birthday, provided that the `Normal Retirement Date' of a policeman means the first day of the month coincident with or next following the later of (i) the date on which he completes twenty-five (25) years of Credited Service or (ii) the date on which he attains age fifty-five (55), but in no event later than (iii) his sixty-fifth (65th) birthday." (Defendant's Memorandum of Law, Exhibit B, p. 4.)
The language of the retirement plan is unambiguous. Despite the plaintiff's argument to the contrary, the retirement plan could not be read in any way to provide a police officer with a normal benefit at age fifty-five after only ten years of credited service. Section 1 of Article V provides that an employee must meet three requirements to be entitled to a normal retirement benefit: The employee must (1) reach his or her "Normal Retirement Date," (2) have at least ten years of credited service and (3) be retired. The plaintiff's interpretation of the language of Article V, Section 1 ignores the requirement that an officer must reach his or her "Normal Retirement Date." For a police officer, the "Normal Retirement Date" cannot occur before age sixty-five unless the officer both (A) attains twenty-five years of credited service and (B) is at least age fifty-five. This is because the "later" of those two events cannot, by definition, occur until after the "earlier" of those events has already occurred.
The parties do not dispute that the plaintiff was born November 2, 1949, and therefore was age fifty-five on December 1, 2004. They also do not dispute that the plaintiff, who was employed as a policeman, retired with less than twenty-five years of credited service. Therefore, the defendant has demonstrated the absence of a genuine issue of material fact as to count one. Furthermore, as a matter of law, the plaintiff was not entitled to a normal retirement benefit on December 1, 2004, because he had not reached his "Normal Retirement Date." The "later" of the two listed events, the attainment of twenty-five years of credited service, had not yet occurred as required to trigger the occurrence of the "Normal Retirement Date" prior to the age of sixty-five.
The plaintiff has failed to raise a genuine issue of material fact because he has attached no evidence disputing the material facts presented by the defendant's evidence. Furthermore, the plaintiff's interpretation of the retirement plan as ambiguous is without merit. Accordingly, it is submitted that the court should find that, as to count one, there is no genuine issue of material fact and that the defendant is entitled to judgment as a matter of law.
II PROMISSORY ESTOPPEL CLAIM-COUNT TWO
"Under the law of contract, a promise is generally not enforceable unless it is supported by consideration . . . [The Supreme] [C]ourt has recognized, however, the development of liability in contract for action induced by reliance upon a promise, despite the absence of common-law consideration normally required to bind a promisor . . ." (Internal quotation marks omitted.) Stewart v. Cendant Mobility Services Corp., 267 Conn. 96, 104, 837 A.2d 736 (2003). "[U]nder the doctrine of promissory estoppel [a] promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise." (Internal quotation marks omitted.) Id. To establish a claim for promissory estoppel, therefore, a plaintiff must establish the following three elements: (1) that the defendant made a promise, (2) that the defendant should have reasonably expected the plaintiff to rely on the promise and (3) that the plaintiff reasonably relied on the promise to his or her detriment. See also 1 Restatement (Second), Contracts § 90 (1981).
There are other considerations, however, when a promissory estoppel claim is asserted against a municipality. "An action for promissory estoppel may be brought against a public agency, such as [a] town . . . however, estoppel against a public agency is limited and may be invoked: (1) only with great caution; (2) only when the action in question has been induced by an agent having authority in such matters; and (3) only when special circumstances make it highly inequitable or oppressive not to estop the agency . . . As noted, this exception applies where the party claiming estoppel would be subjected to substantial loss if the public agency were permitted to negate the acts of its agents." (Internal quotation marks omitted.) Vollemans v. Wallingford, Superior Court, judicial district of New Haven, Docket No. CV 03 0283760 (June 26, 2007, Taylor, J.).
A Whether the Defendant Made a Promise to the Plaintiff
The defendant posits that the basis of the plaintiff's promissory estoppel claim is a representation contained in a letter drafted by Watson Wyatt (Watson Wyatt letter), an actuarial firm retained by the defendant to calculate employee benefits under the retirement plan, which the defendant's finance director merely forwarded to the plaintiff. Therefore, the defendant argues that it made no promise to the plaintiff regarding his retirement benefit and cannot be liable on a promissory estoppel theory. The plaintiff contends that the defendant made the representation in the Watson Wyatt letter because its finance director solicited the letter and then transmitted it through "official Town channels" to him. (Plaintiff's Memorandum of Law, p. 10.)
Even if the court assumed that the representation in the Watson Wyatt letter was Watson Wyatt's alone, such representation could still be imputed to the defendant under principles of agency law. "[I]t is a general rule of agency law that the [principal] in an agency relationship is bound by, and liable for, the acts in which his agent engages with authority from the principal, and within the scope of the agent's employment." (Internal quotation marks omitted.) Hudson United Bank v. Cinnamon Ridge Corp., 81 Conn.App. 557, 572-73, 845 A.2d 417 (2004).
In his deposition, reproduced in part as Exhibit A to the defendant's memorandum of law, the plaintiff explained that he contacted the defendant's finance director, James Henderson, to ask about his eligibility for a retirement benefit at age fifty-five. He also indicates in the deposition that, after contacting Watson Wyatt, the finance director obtained the Watson Wyatt letter and personally handed it to the plaintiff, telling him "[t]his is what you're getting." (Defendant's Memorandum of Law, Exhibit A, p. 32.) A copy of the Watson Wyatt letter is reproduced at Exhibit C of the defendant's memorandum of law. It was addressed to the finance director and it made a representation that on December 1, 2004, when the plaintiff turned fifty-five, he would be entitled to a life annuity of $658.89 per month, which the parties agree would be the amount of his normal retirement benefit. (See Defendant's Memorandum of Law, Exhibit C; Plaintiff's Memorandum of Law, Exhibit B.)
The finance director's act of sending the plaintiff's request to Watson Wyatt for a determination of his eligibility for a normal retirement benefit could demonstrate a delegation of express authority from the defendant to Watson Wyatt to make a representation on the defendant's behalf. The evidence also shows that Watson Wyatt was hired for the purpose of serving as the actuary of the retirement plan, so a fact finder could find that it was acting within the scope of its employment when it made the representation. Therefore, if the letter contained a representation actionable under promissory estoppel, such representation could, at the least, be imputed to the defendant under agency law. Accordingly, the defendant has not shown the absence of an issue of fact as to whether it made the representation at issue.
B Whether the Claim is Barred by the Fennell Doctrine
The defendant next argues that the promissory estoppel claim is barred by the doctrine articulated in Fennell v. Hartford, 238 Conn. 809, 681 A.2d 934 (1996). It contends that, under the Fennell doctrine, the letter cannot confer benefits not provided for in the retirement plan because only a municipality's legislative body can alter the terms of a retirement benefit package. Therefore, only the defendant's legislative body, its town meeting, could have altered the retirement plan.
The plaintiff argues that the promise is not subject to the Fennell doctrine because it is not the promise of a benefit to which he is not already entitled. Essentially, the plaintiff contends that the retirement plan could be interpreted to be consistent with the representation in the Watson Wyatt letter, and thus such representation was not a substantive modification of benefits.
The Fennell doctrine states: "[A]ll who contract with a municipal corporation are charged with notice of the extent of . . . the powers of municipal officers and agents with whom they contract, and hence it follows that if the . . . agent had in fact no power to bind the municipality, there is no liability on the express contract." (Internal quotation marks omitted.) Biello v. Watertown, 109 Conn.App. 572, 581, 953 A.2d 656, cert. denied, 289 Conn. 934, 958 A.2d 1244 (2008). In other words, a municipality cannot be contractually bound by a representation made by its agent unless the agent had actual authority to make the representation pursuant to the General Statutes, the municipal charter or another valid delegation of authority. Fennell v. Hartford, supra, 238 Conn. 813; see, e.g., Ryan v. Waterbury, Superior Court, judicial district of Waterbury, Docket Nos. CV 91 0101785, CV 93 0117015 (November 18, 1997, Vertefeuille, J.) (distinguishing Fennell in allowing implied contract claim based on provisions of city personnel policies because Waterbury charter gave official approving policies authority to approve provisions at issue on behalf of city). This doctrine has also been applied to promissory estoppel claims. See, e.g., Vollemans v. Wallingford, supra, Superior Court, Docket No. CV 03 0283760.
Under General Statutes § 7-450(a), "Any municipality or subdivision thereof may, by ordinance . . . establish pension, retirement, or other postemployment health and life benefit systems for its officers and employees and their beneficiaries . . . provided the rights or benefits granted to any individual under any municipal pension or retirement system shall not be diminished or eliminated. The legislative body of any such municipality, by resolution adopted by a two-thirds vote of its members, may provide for pensions to persons, including survivors' benefits for widows of such persons, not included in such pension or retirement system." (Emphasis added.) See also Fennell v. Hartford, supra, 238 Conn. 817 ("In order for additional retirement or pension benefits to be conferred on the plaintiffs . . . the city council must adopt ordinances in compliance with the statutory and charter mandates"). In Middlebury, the town meeting, upon recommendation of the board of selectmen, has the sole authority to enact ordinances. See Charter, Town of Middlebury, Connecticut (charter), §§ 304D, 904G. Furthermore, there is no ordinance delegating the town meeting's authority to amend the retirement plan or otherwise to confer retirement benefits upon municipal employees or retirees.
The defendant has demonstrated the absence of a genuine issue of material fact. As discussed above, under the terms of the retirement plan, the plaintiff is not entitled to a normal benefit at age fifty-five. Moreover, neither the finance director nor Watson Wyatt had the actual authority to confer eligibility for a retirement benefit upon the plaintiff. Accordingly, per the Fennell doctrine, the defendant cannot as a matter of law be estopped by the representation in the Watson Wyatt letter.
Conversely, the plaintiff has failed to establish a genuine issue of material fact. The plaintiff attaches nothing demonstrating that either Watson Wyatt or the finance director had the actual authority to promise the plaintiff eligibility for a normal retirement benefit as of December 1, 2004. Therefore, there is no genuine issue of material fact and, on this ground, the defendant is entitled to judgment as a matter of law.
Whether the Existence of the Retirement Plan Bars the Plaintiff's Claim Per Se
The defendant's third argument is that, since promissory estoppel is inapplicable where there is a valid contract governing the subject matter, the plaintiff's claim is barred by the existence of the retirement plan. The plaintiff responds by asserting that, in order to bar his claim for promissory estoppel, "the [retirement] plan would have to contain a provision restricting and defining what representations could, and could not, be relied upon" (Plaintiff's Memorandum of Law, p. 11); and it contains nothing specifically contradicting the representation in the Watson Wyatt letter.
"[A]n action for promissory estoppel generally exists when there is no written contract, or the contract cannot be enforced for one reason or another. Thus, promissory estoppel is an action outside the contract." Sekas v. Enginunity PLM, LLC, Superior Court, judicial district of Ansonia-Milford, Docket No. CV 07 5002249 (June 6, 2007, Esposito, J.). In other words, promissory estoppel is appropriate only if there is no consideration for the promise or if a contract action to enforce the promise otherwise cannot be maintained. See Stewart v. Cendant Mobility Services Corp., supra, 267 Conn. 104. Summary judgment, therefore, will be granted on a promissory estoppel claim if the evidence clearly indicates that the representation at issue is incorporated into a valid contract between the parties. See e.g., Eagle Hill Southport School v. Roberts, Superior Court, judicial district of Fairfield, Docket No. CV 99 0362604 (August 23, 2000, Melville, J.).
Under the language of the retirement plan, the plaintiff cannot receive a normal benefit until he either (1) reaches age fifty-five and has twenty-five years of credited service or (2) reaches age sixty-five. The representation at issue, as contained in the Watson Wyatt letter, indicated that the plaintiff would become entitled to a normal benefit at age fifty-five. This representation is therefore not incorporated into the retirement plan; it is in fact inconsistent with such plan. Furthermore, there is no evidence, or contention, that the parties entered into any contract based on the representation. Therefore, the defendant has failed to demonstrate that the existence of the retirement plan forecloses the plaintiff's promissory estoppel claim.
D Whether the Plaintiff Sufficiently Relied upon the Representation
The defendant lastly asserts that the plaintiff did not rely to his detriment on the representations; he merely increased his contributions to an annuity fund and abandoned plans to retire early, but only after the defendant informed the plaintiff that the Watson Wyatt letter was erroneous. The plaintiff contends that those actions constituted detrimental reliance, and that he also relied by retiring from the police force in the first place.
"To succeed on a claim of promissory estoppel, the party seeking to invoke the doctrine must have relied on the other party's promise . . . That reliance, of course, may take the form of action or forbearance . . . Nevertheless, the asserted reliance, regardless of its form, must result in a detrimental change in the plaintiff's position." (Citations omitted.) Stewart v. Cendant Mobility Services Corp., supra, 267 Conn. 112-13. In other words, "the . . . party, influenced [by the representation], must actually change his position or do something to his injury which he otherwise would not have done." W. v. W., 256 Conn. 657, 661, 779 A.2d 716 (2001).
Nothing in any of the defendant's evidence conclusively demonstrates that the plaintiff took no action in reliance on the Watson Wyatt letter. It is not entirely clear from the evidence what actions the plaintiff actually took in response to such letter. For example, it is unclear based on the deposition testimony whether the plaintiff increased his contributions to his annuity based on the Watson Wyatt letter or on the letter explaining the error, which he received in 2004. (See Defendant's Memorandum of Law, Exhibit A, p. 38-39.) Therefore, the defendant has failed to demonstrate the absence of an issue of fact as to the nature of the plaintiff's reliance.
CONCLUSION
In conclusion, there is no genuine issue of material fact as to either count. Furthermore, as to count one, the unambiguous language of the retirement plan demonstrates that the plaintiff was not entitled to a normal retirement benefit starting at age fifty-five. As to count two, per the Fennell doctrine, the defendant is shielded from liability under promissory estoppel as a matter of law for any representation made by Watson Wyatt or the finance director. Accordingly, the court will grant the motion for summary judgment as to both counts.