        SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

1346
CA 14-00767
PRESENT: CENTRA, J.P., FAHEY, VALENTINO, WHALEN, AND DEJOSEPH, JJ.


IN THE MATTER OF ROBERT A. ANDERSON, JR.,
PATRICIA E. BETTIS, AS EXECUTOR OF THE ESTATE
OF RUSSELL F. BETTIS, DECEASED, DANIELLE D.
FAMA, SARA N. FORGIONE, MARIO RICOTTA, AND
DONNA M. GILREATH, AS EXECUTOR OF THE ESTATE
OF NINA M. SPACONE, DECEASED, ON BEHALF OF
THEMSELVES AND CERTAIN OTHER RETIRED EMPLOYEES
OF NIAGARA FALLS CITY SCHOOL DISTRICT, FORMERLY
IN THE CSEA BARGAINING UNIT,
PETITIONERS-RESPONDENTS,

                    V                             MEMORANDUM AND ORDER

NIAGARA FALLS CITY SCHOOL DISTRICT, CYNTHIA A.
BIANCO, AS SUPERINTENDENT, AND NIAGARA FALLS
CITY SCHOOL DISTRICT BOARD OF EDUCATION,
RESPONDENTS-APPELLANTS.


ROSCETTI & DECASTRO, P.C., NIAGARA FALLS (JAMES C. ROSCETTI OF
COUNSEL), FOR RESPONDENTS-APPELLANTS.

STEVEN A. CRAIN AND DAREN J. RYLEWICZ, CIVIL SERVICE EMPLOYEES
ASSOCIATION, INC., ALBANY (PAUL S. BAMBERGER OF COUNSEL), FOR
PETITIONERS-RESPONDENTS.


     Appeal from a judgment (denominated order) of the Supreme Court,
Niagara County (Ralph A. Boniello, III, J.), entered July 15, 2013 in
a CPLR article 78 proceeding. The judgment granted the petition.

     It is hereby ORDERED that the judgment so appealed from is
unanimously affirmed without costs.

     Memorandum: Petitioners, retirees of respondent Niagara Falls
City School District (District), commenced this CPLR article 78
proceeding after respondents transferred them from one health
insurance plan to another, i.e., from a Blue Cross/Blue Shield
Traditional Plan (Traditional Plan) to a Blue Cross/Blue Shield
Forever Blue Medicare Plan (Forever Blue Plan), thereby reducing their
health insurance benefits while failing to effectuate a similar
reduction in benefits for active employees. While they were employed
by the District, petitioners, some of whom are now deceased, were
covered by a collective bargaining agreement (CBA) between the
District and the Civil Service Employees Association, Inc., Local 1000
(CSEA), but the CBA does not provide what kind of health insurance
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                                                         CA 14-00767

plan would be available to petitioners during retirement. Prior to
July 1, 2011, the Traditional Plan was available to petitioners, but
on or about that date, respondents ceased to offer the Traditional
Plan and transferred petitioners to the Forever Blue Plan.
Petitioners alleged that respondents’ actions were arbitrary,
capricious, and unlawful, and in violation of chapter 504 of the Laws
of 2009 (hereafter, moratorium statute), and sought, inter alia, to
compel respondents to make the Traditional Plan available to them
again. In opposition to the petition, respondents asserted that the
coverage provided under the Forever Blue Plan is the “exact same
coverage” as the Traditional Plan, with the exception of “one
difference, there is a minor increase in the co-pays under the new
current plan.” In order to compensate for that increase, respondents
deposited $600 per year into a medical reimbursement account for each
petitioner. Supreme Court granted the petition in its entirety, and
we affirm.

     Citing Kolbe v Tibbetts (22 NY3d 344), respondents contend that
petitioners do not have a viable cause of action under the moratorium
statute. Specifically, respondents contend that the holding of the
Court of Appeals in Kolbe precludes a cause of action under the
moratorium statute where the disputed benefit stems from a CBA or
other contract. We reject that contention. The moratorium statute
sets a minimum baseline or “floor” for retiree health benefits, and
that “floor” is measured by the health insurance benefits received by
active employees (see id. at 357-358). In other words, the moratorium
statute does not permit an employer to whom the statute applies to
provide retirees with lesser health insurance benefits than active
employees (see Matter of Jones v Board of Educ. of Watertown City Sch.
Dist., 30 AD3d 967, 970). As relevant herein, we perceive two factors
that distinguish this case from Kolbe. First, here, unlike in Kolbe
(id. at 357-358), petitioners allege that their health insurance
benefits have been diminished below the “floor” of the corresponding
benefits for active employees. In our view, that distinguishing
factor is the precise trigger that permits petitioners to assert a
cause of action under the moratorium statute. Second, the issue in
Kolbe was whether the respondents therein could reduce or eliminate
retiree benefits regardless of the language in the governing CBAs, so
long as they made the same modification to active employees (id. at
357), and resolving that issue involved an interpretation of the
contractual provisions of the governing CBAs. In rejecting the
respondents’ position in Kolbe, the Court of Appeals held that the
moratorium statute was “not meant to eviscerate contractual
obligations” (id. at 358). In the instant case, however, petitioners
do not allege that respondents have violated a provision of their CBA
and, thus, no issue of contract interpretation is presented here. In
sum, the petitioners in Kolbe were attempting to vindicate the
negotiated rights bestowed on them in the governing CBAs; here,
petitioners are attempting to vindicate the rights bestowed on them
under the moratorium statute.

     With respect to the merits of the instant case, the court
properly determined that respondents’ actions were arbitrary,
capricious, and unlawful, and in violation of the moratorium statute,
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                                                         CA 14-00767

because there was a substantial reduction in health insurance benefits
for petitioners or their dependents without a corresponding reduction
of benefits for active employees (see Jones, 30 AD3d at 970).
Contrary to respondents’ contention, we conclude that petitioners met
their burden of establishing the unlawful reduction of their benefits
by the affidavit of a health insurance benefits specialist who
reviewed the two plans at issue, set forth a table comparing their
benefits, and opined that, while active employees experienced an
improvement in their health insurance benefits starting July 1, 2011,
petitioners concomitantly experienced a “substantial diminution” in
their health insurance benefits (cf. Matter of Bryant v Board of
Educ., Chenango Forks Cent. Sch. Dist., 21 AD3d 1134, 1137-1138). In
opposition, respondents merely asserted in conclusory fashion that the
Forever Blue Plan provided the “exact same coverage” as the
Traditional Plan, and such conclusory assertions were insufficient to
overcome petitioners’ proof.

     Respondents’ remaining contention is improperly raised for the
first time on appeal and we therefore do not address it (see NYCTL
1997-1 Trust v Vila, 19 AD3d 382, 382).




Entered:   February 6, 2015                     Frances E. Cafarell
                                                Clerk of the Court
