Kelly et al v. Honeywell International Inc.
ORDER: The Court grants summary judgment in favor of Defendants with respect to plaintiffs who retired after the expiration of the Agreements. The parties are to refer to the attached order. The Clerk's Office is directed to close this case. Signed by Judge Vanessa L. Bryant on 02/28/2017. (Lee, E.)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
DAVID KELLY, RICHARD NORKO,
ANNETTE DOBBS, PETER DELLOLIO,
HONEYWELL INTERNATIONAL, INC.
Civil Case Number
February 28, 2017
RULING AND ORDER
Before the Court today is the question of whether former union employees
who retired after the termination of the collective bargaining agreement and its
incorporated documents (“Agreements”) are entitled to lifetime medical coverage
benefits. This case was originally brought by Plaintiffs who retired both before
and after the Agreements expired; they were notified in December of 2015 that
their former employer, Honeywell International, Inc. (“Defendant”), decided to
terminate their medical coverage benefits, which the Defendant had been
providing to them since retirement. On February 8, 2017, this Court issued a
Memorandum of Decision on the parties’ cross-motions for summary judgment.
[Dkt. 58 (Summ. J. Order)]. The Court held that the Agreements unambiguously
conferred full lifetime medical coverage benefits upon retirees who retired prior
to the expiration of the Agreements on June 6, 1997, and granted summary
judgment in favor of the Plaintiffs with respect to that subclass. [See id. at 24, 3334]. However, the Court also held that the contract language was ambiguous with
respect to union employees who retired after the expiration of the Agreements
and ordered a hearing on this limited issue. The hearing occurred on February
27, 2017. Former employee and putative class member Brad Marshall and named
Plaintiff David Kelly testified and counsel submitted documentary evidence on
behalf of the Plaintiffs. Defendant presented no evidence with the exception of
the full Agreements.1 The Court has reviewed the evidence at length and finds
that the union employees who retired after June 6, 1997, are not entitled to
lifetime medical coverage benefits.
The Court assumes the parties’ familiarity with the facts and will recite
them only where needed to explain its reasoning for this ruling. The Effects
Bargaining Agreement (“EBA”) delineates the benefits to which the Union’s
members would be entitled upon and after AlliedSignal’s acquisition of Textron.
[Dkt. 45-2, ¶ 19; Dkt. 54, ¶ 19; Dkt. 45-9]. Section 2(b) provides, “All past and
future retired employees and surviving spouses shall continue to receive their full
monthly pension, including supplements if any, and full medical coverage as
provided in the Pension Plan and Group Insurance Agreement, as now in effect or
as hereafter modified by the parties for the life of the retiree or surviving spouse.”
[Evidentiary Hearing Def.’s Ex. 1, at 2]. The duration clause of the EBA states that
the EBA “shall remain in effect until midnight on June 6, 1997, but not thereafter
unless renewed or extended in writing by the parties.” [Id. at 18].
counsel argued at the evidentiary hearing that the duration clause renders
section 2(b) a nullity and as such the Defendant had no obligation to pay medical
coverage to employees who retired after the expiration of the Agreements. [See
Previously, the parties only submitted excerpts of the Agreements.
Evidentiary Hearing (Ortelere), at 5:07 – 5:18]. Plaintiffs contend that the “past
and future” language was added to the EBA at the express request of Mr. Kelly
during union contract negations between the Union and Textron for the express
duration clause so as to ensure that employees who retired after expiration of the
EBA and the related agreements, and their surviving spouses, would be entitled
to lifetime medical coverage benefits.
For the purpose of interpreting section 2(b) of the EBA, Plaintiffs submitted
into evidence the Local 1010 UAW Decision & Effects Agreement provided to
Local 1010 members by the Union.2
Mr. Kelly testified that he created this
document for the benefit of the union members, and it is a summary of the results
from 1994 negotiation process between Textron and the Union for the union
members to review prior to ratification. [Evidentiary Hearing (Kelly), at 3:31-3:34].
Mr. Kelly testified that he circulated the document to Frank McNally, Vice
President of Labor Relations at Textron, and George Metzger, Vice President of
Human Resources at Textron, who approved of and printed the documents for
distribution. [Id.]. Mr. Kelly testified that they read the document in front of him.
[Id. at 3:34-3:35]. At the evidentiary hearing, the parties discussed at length the
provision of the summary that stated, “The Purchaser (Allied Signal) agrees to
provide the full negotiated pension and medical coverage for all Local 1010
retirees and surviving spouses who retire after the date of this agreement for the
Plaintiffs also submitted this document as an exhibit to the Opposition on the
Defendant’s Motion to Dismiss. [See Dkt. 24-11], to which Defendant did not
life of the retiree and surviving spouse.” [Evidentiary Hearing, Pls.’ Ex. 3, at 1].
Mr. Kelly addressed the meaning of this language and testified that the Union
communicated to Textron that the employees’ lifetime medical benefits would
vest immediately upon ratification of the contract. [Evidentiary Hearing (Kelly
Testimony), at 3:46-3:48].
No other evidence presented the evidentiary hearing
makes clear that retirees “who retire after the date of this agreement” includes
individuals who retire after the agreement expires as opposed to those who retire
before the agreement expires and while the agreement is in effect.
The introductory paragraph of the EBA summary makes clear that only
those employees who retire before the EBA expires and their surviving spouses
are entitled to lifetime medical coverage benefits.
The introductory section
states, “The following benefits will be provided to all Local 1010 employees and
retirees who are laid-off or retire during this agreement. [Evidentiary Hearing
Pls.’ Ex. 3, at 1]. “During” means “throughout the entire time of (an event, period,
occurrence, etc.)” or “at some time in the course of (something).”
This document is the most apt extrinsic evidence of when retiree
benefits vested, as Mr. Kelly testified that he drafted the summary to explain to
the union membership the agreements reached between Textron and the Union in
preparation for their ratification vote.
He further testified that it accurately
reflected his understanding and the understanding of the Textron Vice Presidents
for Labor Relations and Human Resources, each of whom read it in his presence,
voiced their agreement and arranged for its printing for distribution to union
members in advance of their vote to ratify the contract which Mr. Kelly had
negotiated on their behalf.
When construed in conjunction with section 2(b) of the EBA, the Court
finds that the summary sheds light as to the intent of the parties at the time of
contracting the EBA. See M&G Polymers USA, LLC v. Tackett, 135 S. Ct. 926, 937
(wherein Justice Ginsburg stated in her concurring opinion that “[w]hen the
contract is ambiguous, a court may consider extrinsic evidence to determine the
intentions of the parties”) (quoting 11 R. Lord, Williston on Contracts § 30:7, p.
116-24 (4th ed. 2012)). With the help of the summary, the language, “[a]ll past and
future retired employees,” can be interpreted to mean that past employees who
retired prior to the EBA ratification may receive lifetime medical coverage
benefits, and any future retiree who retires during this agreement is also entitled
to lifetime medical coverage benefits. Therefore, the Court concludes that the
parties intended the lifetime medical coverage benefits to extend to employees
who retired while the Agreements were in effect. As the parties do not dispute
the Agreements expired on June 6, 1997, individuals who retired subsequent to
this date are not entitled to lifetime medical coverage benefits.
The Court recognizes Plaintiffs submitted several letters from AlliedSignal
to union members who retired after the expiration of the Agreement, which
indicated that AlliedSignal would pay such individuals retiree medical coverage
benefits. [See Evidentiary Hearing Exs. 1, 2, 4]. The Court also recognized that
AlliedSignal did provide health benefits for approximately two decades; however,
AlliedSignal’s interpretation is not controlling. “The fundamental objective of
contract interpretation is to give effect to the expressed intentions of the parties,”
and as such “[w]hen interpreting the meaning of a contract, it is the objective
intent of the parties that controls.” Klos v. Lotnicze, 133 F.3d 164, 168 (2d Cir.
1997). AlliedSignal was not a party to the Agreements and the interpretation of a
third party not involved in negotiations is not controlling, particularly when
compared to the summary interpreting the intention of the Union and Textron
(who were the parties to the contract).3 See Third Party, Black’s Law Dictionary
(10th ed. 2014) (defining “third party” as “[s]omeone who is not a party to a
lawsuit, agreement, or other transaction but who is usu. somehow implicated in
it; someone other than the principal parties. – Also termed outside party; third
The Court also notes that Plaintiffs have not pleaded allegations of
detrimental reliance or that Defendants breached its fiduciary duty upon making
material misrepresentations. Therefore, for the reasons set forth in the Court’s
Memorandum of Decision on the parties’ cross-motions for summary judgment,
[Dkt. 58], the Court grants summary judgment in favor of the Defendant as to
The Court hereby VACATES its previous Order granting Plaintiffs’ Motion
to Certify Class, [Dkt. 51], and creates two subclasses: (A) Plaintiffs who retired
prior to the expiration of the Agreements, and (B) Plaintiffs who retired after the
Evidence indicates that AlliedSignal had a stake in the outcome and was heavily
involved behind the scenes, but AlliedSignal was not present at the negotiation
table and the Agreements were explicitly made between Textron and the Union.
[See Dkt. 44-10 (Kelly Dep.), at 75:16-76:11; Evidentiary Hearing Def.’s Exs. 1-3].
expiration of the Agreements. Pursuant to the Court’s previous order, [Dkt. 58],
the Court GRANTS summary judgment as to Counts I and II in favor of Subclass
A and permanently enjoins Defendant from eliminating these Plaintiffs’ lifetime
medical coverage benefits. The Court GRANTS summary judgment as to Counts I
and II in favor of Defendant with respect to Subclass B as these individuals’
rights to lifetime medical coverage benefits did not vest prior to the expiration of
the Agreements. The Court finds as moot Count III as it pertains to Subclass A
for the reasons set forth in the previous order, [id.], and GRANTS summary
judgment in favor of Defendants as to Count III, breach of fiduciary duty, as it
pertains to Subclass B.
IT IS SO ORDERED.
_ ______ /s/ ______________
Hon. Vanessa L. Bryant
United States District Judge
Dated at Hartford, Connecticut: February 28, 2017
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