from an order of the circuit court for Outagamie County No.
2014CV144: MARK J. MCGINNIS, Judge. Affirmed.
Stark, P. J., Hruz and Seidl, JJ.
The Wisconsin Education Association Council
("WEAC") and thirty-seven retirees (collectively
and with WEAC, the "Retirees") from the Little
Chute Area School District (the "District") appeal
a summary judgment in the District's favor. In 2013, the
District terminated its group long-term care
("LTC") insurance policy for the District's
active employees and retirees. The District then filed the
present declaratory judgment action, seeking a declaration
that it was permitted, under the terms of the relevant
collective bargaining agreements ("CBAs"), to
terminate the group LTC policy. After analyzing the CBAs'
provisions, the circuit court agreed with the District and
rejected the Retirees' argument that they had a
"vested right" to continuing insurance benefits
under the specific group LTC policy that had been terminated.
This case concerns a series of CBAs entered into between the
District and the Little Chute Education Association
("LCEA"), a WEAC local bargaining
unit. Each CBA was generally in force for two
years, then it expired and was supplanted by a new agreement
that oftentimes contained identical or similar provisions.
Each CBA described the compensation and benefits for current
employees during the term of the agreement. Employees
received a number of benefits, among them insurance coverage
under the District's group LTC policy. Between 1995 and
2001, the CBAs identified the specific group LTC policy under
which the employees received coverage as "WEAIT
Insurance Corporation Plan #333-235.0." This reference
to the specific policy number appears to have ceased
beginning with the 2001-2003 CBA.
The District's WEAIT group LTC policy remained virtually
unchanged between 1994 and 2013. The policy did not require
the District to keep the policy in force for any specific
length of time, but rather the District could terminate the
policy by giving WEAIT advance written notice. WEAIT, too,
was allowed to terminate the policy under certain conditions,
including premium nonpayment, the District's failure to
negotiate the terms of coverage with the local bargaining
unit, or if one-hundred percent of the employees eligible for
coverage failed to enroll.
An individual's coverage under the WEAIT group LTC policy
typically terminated when the person ceased employment with
the District. Early retirees under the relevant CBAs,
however, could elect to continue coverage, which was
effective "as long as [WEAIT] receive[d] the required
premiums and continue[d] to insure the active employees"
of the District. The policy included a "paid-up"
feature under which a covered person would owe no further
premiums if he or she: (1) was retired; (2) was at least age
sixty-five; and (3) had premium payments made on his or her
behalf for at least 360 months. Retired employees could also
elect an "accelerated paid-up" option that required
a single, lump-sum payment if certain conditions were met.
Once a person reached "paid-up" status, their
coverage was not subject to termination.
Under the terms of each CBA relevant to this case, early
retirees from the District were permitted to "continue
participation" in the District's group LTC policy,
subject to the carrier's terms and
conditions. Initially, the District agreed that early
retirees could remain covered by the group LTC policy until
age sixty-five. However, in the 2001-2003 and subsequent
CBAs, the parties agreed to cap a retired employee's
eligibility for coverage at "a maximum of ninety-six
The 2001-2003 CBA brought other changes to the group LTC
insurance benefit, which changes continued in subsequent
CBAs. In July of 2000, our supreme court had decided Roth
v. City of Glendale, 2000 WI 100, 237 Wis.2d 173, 614
N.W.2d 467, which held that retirement health benefits are
presumed to "vest" in the absence of contract
language or extrinsic evidence suggesting
otherwise. Id., ¶25. The following
year, the District and the LCEA agreed to make early
retirees' continued participation in the group LTC
program subject to "any collectively bargained changes
in those benefits and programs, " in addition to being
subject to the carrier's terms and conditions as before.
In addition, the parties inserted a clause at the end of the
section pertaining to group LTC coverage, stating: "The
benefits, premiums, and contributions under this Article are
established for the term of this collective bargaining
agreement and subject to amendment, termination or extension
through future collective bargaining."
These provisions remained in place through the 2009-2011 CBA.
Then, on the eve of the effective date of 2011 Wis. Act 10,
District and the LCEA negotiated an extension of the
2009-2011 CBA, known as the 2009-2012 Master Agreement. This
new CBA eliminated all postretirement insurance benefits,
including group LTC insurance benefits, for early
retirees. Effective July 1, 2011, Article 16 of the
CBAs, which had previously defined early retiree benefits,
was deleted entirely from the 2009-2012 Master Agreement. The
District terminated the WEAIT group LTC policy in June of
The District's termination of the WEAIT group LTC policy
triggered certain conversion provisions under the policy.
Early retirees had an opportunity to purchase an individual
"conversion policy" that featured the same coverage
as the defunct group policy, with premium payments counted
toward "paid-up" status. However, early retirees no
longer received the benefit of a group-rate premium. Rather,
these individual policies had premiums based on the
individual's actuarial factors, including the retired
employee's age, gender, and geographic location.
Qualifying early retirees could also elect the
"accelerated paid-up" option and pay a significant
On October 24, 2013, the Retirees provided the District's
board of education with a notice of injury and claim. The
Retirees asserted the District breached the relevant CBAs by
curtailing their vested benefits, including "the right
to continue to be members of the group LTC policy and to pay
the group rates until the policy was 'paid up' or the
retirees chose not to continue payments." They also
asserted they had a vested right to the District contributing
to the group LTC policy premiums.
The District filed a preemptive suit against the Retirees,
seeking declaratory relief in the form of an order stating
the District was not prohibited from terminating group LTC
insurance for current or former employees. The Retirees
counterclaimed, alleging the District had breached the
relevant CBAs and its duty of good faith and fair dealing.
The case was decided upon the parties' cross-motions for
At a hearing on the motions, the circuit court granted the
District judgment on both its declaratory action and the
Retirees' counterclaims. After reviewing standard
principles of contract interpretation and Roth, the
circuit court concluded the plain language of the relevant
CBAs did not require the District to maintain the WEAIT group
LTC policy indefinitely, "or even until the [Retirees]
achieved paid-up status." The court also rejected the
Retirees' argument that vesting occurred because the CBAs
incorporated the WEAIT group LTC policy, reasoning that even
if such incorporation occurred, the policy provision allowing
the District to terminate the policy at any time with advance
notice was incompatible with vesting. The Retirees appeal.
We review a grant of summary judgment de novo, applying the
same methodology employed by the circuit court. Burgraff
v. Menard, Inc., 2016 WI 11, ¶20, 367 Wis.2d 50,
875 N.W.2d 596. The facts in this case are undisputed.
Accordingly, the only issue is whether the District was
entitled to summary judgment as a matter of law. See
Roth, 237 Wis.2d 173, ¶¶13-14; WIS. STAT.
As in Roth, the dispute in this case "centers
on the proper interpretation of the collective bargaining
agreements" and whether they "vest" in the
Retirees' favor a legal right to continuing coverage
under the WEAIT group LTC policy. See Roth, 237
Wis.2d 173, ¶15. "Interpretation of a collective
bargaining agreement, as with other contracts, presents a
question of law that we review independently of the
determinations rendered by the circuit court ...."
Id. When we interpret a contract, our goal is to
ascertain and give effect to the contracting parties'
The three CBAs in effect between 1995 and 2001 each provided
employees with certain benefits upon early retirement.
Section H of Article 16 in each of those CBAs discussed the
LTC insurance benefit. Each such provision stated in relevant
An eligible member may continue participation in the
District's group health, dental, life ... and long term
care insurance programs subject to the terms and conditions
of the carrier until the end of the month in which he/she
reaches the age of 65. The cost of the programs to be paid by
the District will be adjusted ...