2015 WI 12
SUPREME COURT OF WISCONSIN
CASE NO.: 2012AP2490
COMPLETE TITLE: Susan Schwegel and Susan Jaskulski,
Plaintiffs,
Wisconsin Federation of Nurses and Health
Professionals ,
Local 5001, AFT, AFL-CIO and Association of
Milwaukee
County Attorneys,
Plaintiffs-Respondents-Petitioners,
v.
Milwaukee County,
Defendant-Appellant.
REVIEW OF A DECISION OF THE COURT OF APPEALS
(Reported at 351 Wis. 2d 421, 839 N.W.2d 869)
(Ct. App. 2013 – Published)
PDC No: 2013 WI App 134
OPINION FILED: February 12, 2015
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: October 1, 2014
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Milwaukee
JUDGE: Christopher R. Foley
JUSTICES:
CONCURRED: PROSSER, J., concurs. (Opinion filed.)
DISSENTED: ABRAHAMSON, C.J., BRADLEY, J., dissents.
(Opinion filed.)
ATTORNEYS:
For the plaintiffs-respondents-petitioners, there were
briefs by Jeffrey P. Sweetland and Hawks Quindel, S.C.,
Milwaukee, and oral argument by Jeffrey P. Sweetland.
For the defendant-appellant, there was a brief by Alan M.
Levy and Lindner & Marsack, S.C., Milwaukee. Oral argument by
Alan M. Levy.
2
2015 WI 12
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2012AP2490
(L.C. No. 2012CV1528)
STATE OF WISCONSIN : IN SUPREME COURT
Susan Schwegel and Susan Jaskulski,
Plaintiffs,
Wisconsin Federation of Nurses and Health
Professionals, Local 5001, AFT, AFL-CIO and FILED
Association of Milwaukee County Attorneys,
FEB 12, 2015
Plaintiffs-Respondents-Petitioners,
Diane M. Fremgen
v. Clerk of Supreme Court
Milwaukee County,
Defendant-Appellant.
REVIEW of a decision of the Court of Appeals. Affirmed;
cause remanded to the circuit court to dismiss the complaint.
¶1 PATIENCE DRAKE ROGGENSACK, J. We review a published
decision of the court of appeals1 reversing an order of the
circuit court2 that granted summary judgment to the Wisconsin
1
Wis. Fed'n of Nurses & Health Prof'ls, Local 5001 v.
Milwaukee Cnty., 2013 WI App 134, 351 Wis. 2d 421, 839 N.W.2d
869.
2
The Honorable Christopher R. Foley of Milwaukee County
presided.
No. 2012AP2490
Federation of Nurses and Health Professionals (Wisconsin
Federation), the Association of Milwaukee County Attorneys
(County Attorneys), Wisconsin Federation member Susan Schwegel,
and County Attorneys member Susan Jaskulski. Our review focuses
on the interpretation of a Milwaukee County General Ordinance
(MCGO), § 17.14(7)(ee)(1) (2011), that prospectively eliminated
Medicare Part B premium reimbursement upon retirement for
employees who did not retire before retirement dates established
by Milwaukee County.
¶2 Plaintiffs claim a vested contract right to
reimbursement of Medicare Part B premiums upon retirement, even
though they have not yet retired.3 We conclude that Milwaukee
County did not abrogate a vested contract right when it
prospectively modified a health insurance benefit it offered for
employees who had not yet retired. We further conclude that
County employees have a vested contract right to Medicare Part B
premium reimbursement when they fulfill all three criteria for
its payment: (1) reaching retirement age; (2) providing 15 or
more years of credited county service; and (3) retiring before
3
In their complaint, plaintiffs claim that MCGO
§ 17.14(7)(ee)(1) (2011) is unconstitutional as applied to them
because it impairs a vested contract right, contrary to Article
I, Section 12 of the Wisconsin Constitution, and is a
deprivation of property without just compensation, contrary to
Article I, Section 13 of the Wisconsin Constitution. However,
before us, plaintiffs contend they have a vested contract right,
without continuing that contention in the context of a
constitutional claim. Therefore, we too limit our discussion to
whether plaintiffs have a vested contract right to reimbursement
of Medicare Part B premiums when they retire.
2
No. 2012AP2490
the dates established by Milwaukee County. Employees who do not
meet all three criteria have not fulfilled the requirements
necessary to establish a vested contract right to reimbursement.
Therefore, we affirm the decision of the court of appeals that
granted summary judgment to Milwaukee County.
I. BACKGROUND4
¶3 Plaintiffs claim that MCGO § 17.14(7)(ee)(1) (2011)
impairs their vested contract right to reimbursement of Medicare
Part B premiums when they retire.5 Accordingly, we must decide
whether § 17.14(7)(ee)(1) (2011)'s prospective modification of
the County's obligation to reimburse Medicare Part B premiums at
retirement for Susan Schwegel, Susan Jaskulski, members of
Wisconsin Federation and members of County Attorneys who were of
retirement age, had 15 years of credited service to the County,
but who did not retire by the dates established in
§ 17.14(7)(ee)(1) (2011), breached a vested contract right.
¶4 Plaintiffs moved for summary judgment enjoining the
application of MCGO § 17.14(7)(ee)(1) (2011) and requiring the
County to continue to reimburse Medicare Part B premiums for
affected plaintiffs when they retire and become Medicare-
4
The parties entered into a Stipulation of Facts for
purposes of summary judgment. Facts employed herein were taken
from that stipulation.
5
A vested contractual right is one that cannot be abrogated
without breaching the contract from which it arises. See
Society Ins. v. LIRC, 2010 WI 68, ¶69, 326 Wis. 2d 444, 786
N.W.2d 385.
3
No. 2012AP2490
eligible. The County moved for summary judgment dismissing the
plaintiffs' action.
¶5 The facts relevant to the parties' cross-motions for
summary judgment are not in dispute.6 In 1937, the legislature
instructed counties with populations of 500,000 or more to
establish retirement systems for their employees. Ch. 201, Laws
of 1937.
¶6 Effective January 1, 1938, Milwaukee County created
the Milwaukee County Employees Retirement System (MCERS)
pursuant to Chapter 201 of the Laws of 1937. Although MCERS was
created by the County, it was then controlled by the State. The
Laws of 1945 again addressed the State-controlled MCERS. Ch.
138, Laws of 1945. Those laws provided in relevant part:
(2) CONTRACTS TO ASSURE BENEFITS. The benefits
of members . . . and of beneficiaries of deceased
members . . . shall be assured by benefit contracts as
herein provided:
(a) . . . [E]ach member and beneficiary having
such a benefit contract shall have a vested right to
such annuities and other benefits and they shall not
be diminished or impaired by subsequent legislation or
by any other means without his consent.
¶7 Effective January 1, 1955, Milwaukee County first
participated in health insurance for its employees. The County
did so under Chapter 17 of the Milwaukee County General
Ordinances. MCGO § 17.14(8) (1955). In the years following,
§ 17.14 was amended many, many times. We relate only those
amendments that bear on the dispute before us. One such
6
See note 4 above.
4
No. 2012AP2490
amendment occurred in 1967, when Milwaukee County began
providing health insurance for retired employees. § 17.14(7)
(1967).
¶8 In 1965, the legislature granted home rule authority
over MCERS to Milwaukee County. Ch. 405, Laws of 1965.7 The
1965 shift to home rule empowered Milwaukee County "to make any
changes in such retirement system which hereafter may be deemed
necessary or desirable for the continued operation of such
retirement system." Id. at § 2. Chapter 405 of the session
laws also provided that "no such change shall operate to
diminish or impair the annuities, benefits or other rights of
any person who is a member of such retirement system prior to
the effective date of any such change." Id.
7
Section 2 of Chapter 405, Laws of 1965, provides:
For the purpose of best protecting the employes
subject to this act by granting supervisory authority
over each retirement system created hereunder to the
governmental unit most involved therewith, it is
declared to be the legislative policy that the future
operation of each such retirement system is a matter
of local affair and government and shall not be
construed to be a matter of state-wide concern. Each
county which is required to establish and maintain a
retirement system pursuant to this act is hereby
empowered, by county ordinance, to make any changes in
such retirement system which hereafter may be deemed
necessary or desirable for the continued operation of
such retirement system, but no such change shall
operate to diminish or impair the annuities, benefits
or other rights of any person who is a member of such
retirement system prior to the effective date of any
such change.
5
No. 2012AP2490
¶9 In 1989, the County limited those employees who
qualify for continuation of health insurance benefits upon
retirement at County expense: "The County shall pay the full
monthly cost of providing such coverage for employes who
commenced their employment with Milwaukee County prior to
July 31, 1989." MCGO § 17.14(7)(a) (1989). The County also
limited the continuation of retiree health insurance benefits at
County expense through a years-of-service requirement: "[t]he
provisions of (a) shall apply to retired members of [MCERS] with
15 or more years of creditable pension service as a County
employe." § 17.14(7)(h) (1989). At the time both individual
plaintiffs began employment with Milwaukee County, the County's
retirement health insurance benefits included Medicare Part B
premium reimbursement for those employees who had met the
criteria set out in § 17.14(7)(h) (1989).8
¶10 In 1996, MCGO § 17.14(7)(h) was again amended. The
amendment provided: "The provisions of this subsection are
8
Susan Jaskulski began County employment on June 15, 1989.
Susan Schwegel began County employment March 19, 1990. Although
MCGO § 17.14(7)(h) (1989) internally references a date
limitation for continuation of health insurance at County
expense, by 2011, this start-of-employment limitation was no
longer present in Chapter 17. Instead, in 2011, § 17.14(7)(dd)
(2010), provided the conditions required for continuation of
health insurance benefits at County expense.
6
No. 2012AP2490
considered a part of an employee's vested benefit contract as
more fully set forth in 201.24(5.91)."9
¶11 In 2011, an amendment adding language to MCGO
§ 17.14(7)(ee)(1) (2010) restricted the applicability of
paragraph (ee) that addressed payment of Medicare Part B
premiums for retired employees. After the 2011 revision,
§ 17.14(7)(ee)(1) read:
The provisions of section (ee) shall not apply to
members not represented by a collective bargaining
unit who retired and began receiving benefits from the
Milwaukee County Employees Retirement System after
April 1, 2011, nor to members represented by the . . .
Association of Milwaukee County Attorneys . . . who
retired and began receiving benefits from the
Milwaukee County Employees Retirement System after
December 31, 2011, nor to members represented by the
Federation of Nurses and Health Professionals who
retired and began receiving benefits from the
9
Plaintiffs note the reference to "201.24(5.91)" appears to
have been a drafting error and should have been "201.24(5.10)."
The County does not dispute plaintiffs' contention; accordingly,
hereinafter, we refer to § 201.24(5.10), rather than
§ 201.24(5.91).
MCGO § 201.24(5.10) (1996), provided: "Members who retire
with sufficient pension service credit as noted in chapter 17 of
the Code, or the appropriate labor agreement, shall be provided
with paid health insurance as noted in chapter 17 of the Code,
however such benefit shall not be funded via the pension fund."
7
No. 2012AP2490
Milwaukee County Employees Retirement System after
December 31, 2012.10
¶12 In summary, after the 2011 amendment to MCGO
§ 17.14(7)(ee)(1), the Medicare Part B reimbursement
modification required that members of County Attorneys had to
retire on or before December 31, 2011, and members of Wisconsin
Federation had to retire on or before December 31, 2012, in
order to secure County reimbursement for Medicare Part B
premiums upon retirement.
¶13 Both parties moved for summary judgment. The circuit
court granted plaintiffs' motion, concluding that qualifying
employees have a vested benefit contract requiring Medicare Part
B premium reimbursement, and the County's refusal to reimburse
premiums upon those employees' retirements would constitute a
material breach of their vested rights. The circuit court noted
that it relied on Welter v. City of Milwaukee, 214 Wis. 2d 485,
571 N.W.2d 459 (Ct. App. 1997), and Rehrauer v. City of
Milwaukee, 2001 WI App 151, 246 Wis. 2d 863, 631 N.W.2d 644,
which may have conflicted with Loth v. City of Milwaukee, 2008
WI 129, 315 Wis. 2d 35, 758 N.W.2d 766.
10
Wisconsin Federation and the County were parties to a
collective bargaining agreement covering Wisconsin Federation's
wages, hours, and conditions of employment, including coverage
under the County's group health insurance program. The
Wisconsin Federation-County collective bargaining agreement
expired December 31, 2012. County Attorneys and the County were
parties to a collective bargaining agreement covering County
Attorneys' wages, hours, and conditions of employment, including
coverage under the County's group health insurance program. The
County Attorneys-County collective bargaining agreement expired
December 31, 2011.
8
No. 2012AP2490
¶14 The court of appeals reversed and granted summary
judgment to Milwaukee County. Wis. Fed'n of Nurses & Health
Prof'ls, Local 5001 v. Milwaukee Cnty., 2013 WI App 134, ¶16,
351 Wis. 2d 421, 839 N.W.2d 869. The court of appeals reasoned
that it was bound by Loth. Id., ¶11. The court of appeals
agreed with the circuit court "that Loth appears at odds with
both Welter . . . and Rehrauer . . ., and that Loth discussed
neither decision." Id. The court of appeals, however, declined
to "discuss or distinguish either Welter or Rehrauer." Id.
Rather, applying Loth, the court of appeals concluded that
employees were merely eligible for vested benefits until they
had completed all prerequisites, including actually retiring,
and that the County was not restricted from modifying Medicare
Part B premium reimbursement until employees' eligibility
matured into entitlement by employees fulfilling all the
conditions necessary to receipt of the benefit.11 Id., ¶14.
¶15 We granted plaintiffs' petition for review and now
affirm the decision of the court of appeals.
II. DISCUSSION
¶16 Plaintiffs claim that MCGO § 17.14(7)(ee)(1) (2011),
which prospectively modifies the County's obligation to
reimburse Medicare Part B premiums upon retirement for
plaintiffs who were of retirement age, had 15 years of credited
11
The court of appeals did note "It is true, of course,
that once eligibility matures into entitlement, a benefit may
not be retroactively modified or eliminated." Wis. Fed'n, 351
Wis. 2d 421, ¶14. The County does not dispute the court of
appeals' conclusion.
9
No. 2012AP2490
service to the County, but who had not retired by the dates
established in § 17.14(7)(ee)(1) (2011), impairs their vested
contract right to be reimbursed for Medicare Part B premiums
when they retire. This contention requires us to focus on
legislative enactments and County ordinances.
A. Standard of Review
¶17 Plaintiffs claim their vested contract right arises
from their employment by Milwaukee County. They rely on laws
that they assert preclude the enactment of MCGO
§ 17.14(7)(ee)(1) (2011) and on their interpretations of prior
ordinances, which they claim Milwaukee County was not free to
amend.
¶18 The interpretation and application of session laws or
statutes present questions of law that we independently review,
while benefitting from previous court discussions. Spiegelberg
v. State, 2006 WI 75, ¶8, 291 Wis. 2d 601, 717 N.W.2d 641.
Likewise, construction of an ordinance under undisputed facts is
a question of law for our independent review. Browndale Int'l,
Ltd. v. Bd. of Adjustment for Dane Cnty., 60 Wis. 2d 182, 200,
208 N.W.2d 121 (1973).
¶19 The court of appeals granted summary judgment to
Milwaukee County. When we review summary judgment, we
independently apply the same methodology as the court of appeals
and the circuit court, benefitting from their discussions.
Loth, 315 Wis. 2d 35, ¶9; Richards v. Badger Mut. Ins. Co., 2008
WI 52, ¶14, 309 Wis. 2d 541, 749 N.W.2d 581.
10
No. 2012AP2490
¶20 We begin with the complaint to determine whether it
arguably states a claim; if it does, we then review the answer
to see whether issues of material fact or law have been joined.
Hoida, Inc. v. M&I Midstate Bank, 2006 WI 69, ¶16, 291 Wis. 2d
283, 717 N.W.2d 17. If we conclude that the complaint and
answer are sufficient to join issue, we examine the moving
party's affidavits to support the motion and the affidavits that
oppose the motion. Id. Summary judgment is appropriate when
there are no genuine disputes of material fact. Admanco, Inc.
v. 700 Stanton Drive, LLC, 2010 WI 76, ¶28, 326 Wis. 2d 586, 786
N.W.2d 759. The parties do not dispute material facts giving
rise to plaintiffs' claims.12
B. Contractual Rights
¶21 Plaintiffs claim MCGO § 17.14(7)(ee)(1) (2011)
abrogated a vested contractual right. Section 17.14(7)(dd) and
(ee)(1) (2011) are relevant to plaintiffs' claims. They
provide:
(dd) The county shall pay the full monthly cost
of providing such coverage to retired members of the
county retirement system with fifteen (15) or more
years of creditable pension service as a county
employe. . . .
(ee) Retired members of the county retirement
system who are eligible for continuing their health
insurance benefits at county expense under the
provision of this section shall be eligible for
reimbursement of the cost of their Medicare Part B
premiums, as well as the Medicare Part B premiums of
their eligible spouse and dependents.
12
See note 4 above.
11
No. 2012AP2490
(1) The provisions of section (ee) shall not
apply to members not represented by a collective
bargaining unit who retired and began receiving
benefits from the [MCERS] after April 1, 2011, nor to
members represented by . . . the Association of
Milwaukee County Attorneys . . . who retired and began
receiving benefits from [MCERS] after December 31,
2011, nor to members represented by the Federation of
Nurses and Health Professionals who retired and began
receiving benefits from [MCERS] after December 31,
2012.
The question we must decide is whether earlier versions of
§ 17.14(7), in combination with certain session laws or
statutes, vested a contractual right to reimbursement of
Medicare Part B premiums at retirement such that the County was
not free to modify it prospectively for employees who had not
yet retired.13
¶22 Plaintiffs rely on laws and ordinances that apply to
MCERS; we consider them as well. We apply rules of statutory
interpretation to the interpretation of ordinances. Marris v.
City of Cedarburg, 176 Wis. 2d 14, 32, 498 N.W.2d 842 (1993).
"[T]he purpose of statutory [and ordinance] interpretation is to
determine what the statute [or ordinance] means so that it may
be given its full, proper, and intended effect." State ex rel.
Kalal v. Circuit Court for Dane Cnty., 2004 WI 58, ¶44, 271
Wis. 2d 633, 681 N.W.2d 110. If a statute's [or ordinance's]
13
Although plaintiffs do not allege abrogation of their
rights because of other modifications of health insurance under
MCGO § 17.14(7), we note that in 2010, (7)(d) increased the
amount of employees' part-payment of premiums; (7)(n) increased
employees' deductibles; (7)(o) increased employees' co-pays for
office visits; (7)(q) increased employees' out-of-pocket
payments; and (7)(r)-(u) increased employees' co-pays for many
other services such as visits to the emergency room.
12
No. 2012AP2490
meaning is plain, "we ordinarily stop the inquiry." Id., ¶45
(quoting Seider v. O'Connell, 2000 WI 76, ¶43, 236 Wis. 2d 211,
612 N.W.2d 659). "Statutory [and ordinance] language is given
its common, ordinary, and accepted meaning, except that
technical or specially-defined words or phrases are given their
technical or special definitional meaning." Id.
¶23 Plaintiffs contend that their vested contract right
arises in MCGO § 17.14(7)(h) (1996) that provides: "The
provisions of this subsection are considered a part of an
employee's vested benefit contract as more fully set forth in
201.24(5.[10])." Plaintiffs refer to MCGO Chapter 201, which
contains MCERS, to employ earlier statutory language that
applies to pension and death benefits addressed in MCGO Chapter
201, which they now contend applies to health insurance.
Plaintiffs attempt to engraft the MCGO pension and death benefit
restrictions onto § 17.14(7) (1996) to prevent the County from
prospectively modifying health insurance benefits contained in
§ 17.14(7) (1996).
¶24 An understanding of the history underlying both MCERS
and County paid health insurance is helpful in resolving the
claim plaintiffs propose. In that regard, we note that Chapter
201 of the Laws of 1937 is the starting point from which MCERS
was developed. It provided for the establishment of pension and
death benefits for county employees in counties with populations
of 500,000 or more:
Retirement System in Populous Counties;
Definitions. In each county having a population of
13
No. 2012AP2490
five hundred thousand or more a retirement system
shall be established and maintained for the payment of
benefits to the employes of such county and to the
widows and children of such employes, except employes
who are contributory to, participants in, or
beneficiaries of a pension fund in operation in the
state, or any municipal subdivision thereof. The
funds of the retirement system shall be derived,
administered and disbursed in accordance with the
provisions of this act.
§ 1, ch. 201, Laws of 1937. In 1938, in accord with the Laws of
1937, Chapter 201, Milwaukee County created MCERS, which was
then controlled by the State.
¶25 Laws promulgated in 1945, specifically Chapter 138 of
the Laws of 1945, again addressed the State-controlled MCERS.
Chapter 138 described retirement annuities and death benefits as
being "benefit contracts." Those laws provided in relevant
part:
(2) CONTRACTS TO ASSURE BENEFITS. The benefits
of members . . . and of beneficiaries of deceased
members . . . shall be assured by benefit contracts as
herein provided:
(a) . . . [E]ach member and beneficiary having
such a benefit contract shall have a vested right to
such annuities and other benefits and they shall not
be diminished or impaired by subsequent legislation or
by any other means without his consent.
Ch. 138, Laws of 1945.
¶26 Plaintiffs rely heavily on the legislative statement
that in MCERS, members "shall have a vested right to such
annuities and other benefits and they shall not be diminished or
impaired by subsequent legislation or by any other means without
his consent." Their reliance is misplaced because the quoted
legislative language of Chapter 138, Laws of 1945 set forth
14
No. 2012AP2490
above referred solely to pension and death benefits. The cited
legislative language could not have referred to health insurance
because in 1945 Milwaukee County did not pay health insurance
for its employees or for its retired employees. Therefore, the
"vested right" referred to by the legislature in (2)(a) above
and relied on by plaintiffs referred only to pension and death
benefits, which Milwaukee County then set out in Chapter 201
(1945).
¶27 In Chapter 405 of the Laws of 1965, the legislature
granted Milwaukee County specific home rule authority over
MCERS. It provided in relevant part:
(2) . . . Each county . . . is hereby empowered,
by county ordinance, to make any changes in such
retirement system which hereafter may be deemed
necessary or desirable for the continued operation of
such retirement system, but no such change shall
operate to diminish or impair the annuities, benefits
or other rights of any person who is a member of such
retirement system prior to the effective date of any
such change.
§ 2, ch. 405, Laws of 1965.
¶28 Plaintiffs rely on the restrictive legislative
language, "no such change shall operate to diminish or impair
the annuities, benefits or other rights of any person who is a
member of such retirement system prior to the effective date of
any such change." Id. They contend that although the home rule
statute granted Milwaukee County authority to change benefits,
Milwaukee County could not eliminate or reduce benefits
subsequent to an employee's membership in MCERS because of the
1965 legislative restriction.
15
No. 2012AP2490
¶29 However, at the time of the home rule delegation,
MCERS had nothing to do with health insurance. MCERS was
contained solely within MCGO Chapter 201. The 1967 MCGO that
set out Milwaukee County's rights and responsibilities under
home rule powers of MCERS contains not one word about health
insurance. MCGO ch. 201 (1967). Therefore, the statutory
admonishment that plaintiffs contend prevented Milwaukee County
from changing its employee health insurance actually had no
application to health insurance. Stated otherwise, the home
rule statute does not support plaintiffs' contention that the
County violated a vested contract right when reimbursement of
Medicare Part B premiums for retired employees was prospectively
eliminated. Backing up just a bit in our chronologic
consideration of ordinances will help further to explain why
that is so.
¶30 Effective January 1, 1955, Milwaukee County first
began to provide health insurance to employees. MCGO § 17.14(8)
(1955). The provision of health insurance was not part of
MCERS, which was enacted in 1938. In 1955, MCERS was still
controlled by the State. However, Milwaukee County health
insurance was an independent action by the County, not one
controlled by the State, and it did not apply to retired
employees as MCERS did. Stated otherwise, County health
insurance was on a totally separate and independent track from
MCERS. Health insurance was provided in MCGO Chapter 17, the
"Classification and Salary Standardization Ordinance," not
16
No. 2012AP2490
through the "Milwaukee County Employees Retirement System"
ordinance, MCGO Chapter 201.
¶31 Furthermore, as is apparent from the dates, in 1955,
Milwaukee County independently began providing health insurance
to its employees before the State granted Milwaukee County home
rule powers over MCERS in 1965. In addition, as the County
points out in its brief, the home rule amendment was "passed
years before the County had any retiree health insurance
program."
¶32 The County's assertion is correct because it was not
until 1967 that Milwaukee County first began including retired
employees in its health insurance program. MCGO § 17.14(7)
(1967). Milwaukee County explained that its 1967 ordinance was,
"To repeal and recreate section 17.14(7) of the General
Ordinances of Milwaukee County, as amended . . . relating to the
Blue Cross-Medicare Programs so as to make such programs fully
paid for both employes and persons on the retirement rolls."
¶33 Once again, the County's provision of health insurance
was not part of MCERS, which was set out in MCGO Chapter 201.
Health insurance, controlled by the County, was on a separate
and independent track from pension and death benefits addressed
in MCERS. Stated otherwise, the State never controlled health
insurance as it once controlled the pension and death benefits
found in MCGO Chapter 201; therefore, the home rule amendment
had no effect on whether the County could alter the terms under
which it would reimburse working employees for Medicare Part B
premiums when they retire.
17
No. 2012AP2490
¶34 Terms on which Milwaukee County has provided health
insurance to its employees and retired employees have been
modified many, many times since 1967.14 As we earlier mentioned,
plaintiffs rely heavily on the 1996 amendment to MCGO
§ 17.14(7)(h). We now consider that amendment.
¶35 The 1996 amendment to MCGO § 17.14(7)(h) provides:
"The provisions of this subsection are considered a part of an
employee's vested benefit contract as more fully set forth in
201.24(5.[10])." MCGO § 201.24(5.10) (1996) provides:
Members who retire with sufficient pension
service credit as noted in chapter 17 of the Code, or
the appropriate labor agreement, shall be provided
with paid health insurance as noted in chapter 17 of
the Code, however such benefit shall not be funded via
the pension fund.
¶36 We are unpersuaded that MCGO § 17.14(7)(h) (1996)
accords plaintiffs a vested contract right requiring Milwaukee
County to pay Medicare Part B premiums upon plaintiffs'
retirement for a number of reasons.
¶37 First, although MCGO § 201.24(5.10) is part of MCERS,
it does not cause health insurance to become part of MCERS as
pension and death benefits are. Rather, § 201.24(5.10) confirms
and maintains the separate tracks of MCERS and health insurance
that they have always had. Section 201.24(5.10) plainly states
that health insurance is controlled by MCGO Chapter 17. It
explains that health insurance is "as noted in chapter 17 of the
Code." Section 201.24(5.10) does not provide that health
14
See, e.g., note 13.
18
No. 2012AP2490
insurance comes within the restrictions of MCERS, but rather it
comes within the restrictions of "chapter 17 of the Code." In
addition, § 201.24(5.10) affirms that Milwaukee County's funding
of health insurance will not be an obligation of the MCERS
pension fund, again separating the provision of health insurance
from pension and death benefits accorded in MCERS.
¶38 Second, prior to amending MCGO § 17.14(7)(h) in 1996,
the director of human resources for Milwaukee County summarized
the proposed ordinance revisions in a memorandum provided to
members of the personnel committee. The summary explained that
the "revisions related to the provision of health insurance
after retirement to retirees with 15 or more years of pension
service credit is being proposed only to clarify the fact that
the benefit is a vested benefit." (Emphasis added). Stated
otherwise, the revision's reference to "an employee's vested
benefit contract" related only to retired employees, because
once employees retired with the requisite years of pension
service credit, health insurance was a vested benefit for them.
¶39 Third, the County unilaterally offered to continue to
reimburse retired employees for Medicare Part B premiums after
they retire if they: (1) reached retirement age; (2) provided
15 or more years of credited county service; and (3) retired
before the dates established by Milwaukee County in its offer.
The plaintiffs did not convert this offer into a bilateral
contract by accepting the County's terms.
¶40 To explain: When one party makes a promise to provide
a benefit and only that party is subject to a legal obligation
19
No. 2012AP2490
arising from the promise, no bilateral contract is made.
Paulson v. Olson Implement Co., 107 Wis. 2d 510, 517 n.6, 319
N.W.2d 855 (1982). A bilateral contract arises when the
promisee accepts the offer by performing the acts requested by
the promisor. Loth, 315 Wis. 2d 35, ¶28.
¶41 As we have explained, "the terms of an employer's
unilateral offer are important in determining how an employee
may accept the offer and give rise to a binding contract." Id.,
¶31. Stated otherwise, upon an employer's conditional promise
of a benefit, an employee becomes eligible for the benefit. The
eligibility for the benefit vests as a contract right when the
employee meets all the conditions the employer established to
confer the benefit. Id., ¶47.
¶42 Plaintiffs had an opportunity to receive Medicare Part
B reimbursement upon retirement, but they chose not to avail
themselves of that opportunity. In this regard, we concur with
the conclusion of the court of appeals that plaintiffs were
required to take three steps in order to secure the opportunity
of MCGO § 17.14(7)(dd): (1) reach retirement age; (2) provide
15 or more years of credited county service; and (3) retire
before the dates established by Milwaukee County. Simply
stated, plaintiffs were eligible for the benefit they seek;
however, they chose not to satisfy the necessary conditions to
cause the opportunity Milwaukee County provided to ripen into a
vested contract right during the period of time the opportunity
was available.
20
No. 2012AP2490
¶43 Our conclusion in this regard is consistent with our
opinion in Loth, wherein we held that in order to receive the
health insurance Loth sought, he had to reach retirement age,
provide 15 years or more of credited City service, and retire.
Id., ¶6.
¶44 Fourth, County payment for health insurance premiums
is not defined in a fixed way such that a County payment is tied
to a specified benefit that always will follow. For example, an
employee could not understand that the dollar amount of County-
paid premiums will accord the same benefits to employees, or
retired employees, year after year. Rather, by their nature,
health insurance benefits have always been fluid opportunities
available for a limited period of time, which an employee may
realize if he or she takes all actions necessary to convert the
opportunity into an entitlement during the period in which it is
available. Id. (explaining that Loth had to meet the conditions
necessary to obtaining the health insurance plan he sought
before the plan was amended). Accordingly, health insurance
benefits and the premiums necessary to achieve them can be
changed prospectively, as they have many, many times through the
health insurance that Milwaukee County has offered to both
employees and retirees since 1967.
¶45 Fifth, County health insurance payments are not earned
in increments as employees continue their employment. Rather,
the insurance provides opportunities that the County makes
available for limited periods of time. Id.
21
No. 2012AP2490
¶46 Plaintiffs have attempted to distinguish Loth by
arguing that entitlement to retiree reimbursement for Medicare
Part B premiums vests immediately upon commencing employment in
three primary ways: (1) applicability of session laws; (2)
characterizing health insurance as a vested contract right that
the County is not free to abrogate; and (3) offering alternative
theories found in Rehrauer and Welter. We have addressed the
effect of the session laws and the nature of the contractual
opportunity for reimbursement of Medicare Part B premiums for
retirees in regard to plaintiffs' claim. We now take up
plaintiffs' remaining argument.
C. Welter and Rehrauer
¶47 Plaintiffs argue that instead of Loth, Welter and
Rehrauer control. The court of appeals declined to discuss or
distinguish these cases, except to agree with the circuit court
"that Loth appears at odds with both Welter . . . and Rehrauer,
and that Loth discussed neither decision." Wis. Fed'n, 351
Wis. 2d 421, ¶11. Welter reasoned that statutory provisions
that created duty disability pension rights for police officers
vested those pension rights immediately upon an employee's
membership in the City of Milwaukee's retirement system.
Welter, 214 Wis. 2d at 488. Rehrauer concluded that the
firefighters acquired vested duty disability pension rights that
were contractually established during the course of their
employment. Rehrauer, 246 Wis. 2d 863, ¶1.
¶48 In Welter, police officers eligible for duty
disability pensions claimed that the applicable service
22
No. 2012AP2490
retirement allowance conversion age was the age that was in
effect when they began employment. Welter, 214 Wis. 2d at 488.
They argued that application of a lower conversion age, enacted
by municipal ordinance after the officers began employment, was
a breach of the vested contract right to the higher conversion
age. Id. at 488. The court of appeals rejected the City's
argument that an officer's right to a disability pension does
not vest until he or she becomes disabled and agreed with the
police officers. Id. at 494-95.
¶49 In Rehrauer, a contract in effect from 1972 to 1977
established lifetime duty disability pensions, allowing
firefighters to avoid an eventual conversion to the lesser
service retirement allowance. Rehrauer, 246 Wis. 2d 863, ¶¶2, 3
n.3. After that period, duty disability pensions were again
converted to service retirement allowances. Id., ¶3 n.3.
Firefighters hired before the 1972 contract period and beginning
receipt of duty disability pension after 1977 claimed vested
rights in the lifetime duty disability pension, which was the
highest level of pension benefits contractually established at
any time during the course of plaintiffs' active duty. Id.,
¶¶2-3 n.3, 5, 7. The court of appeals held the firefighters
gained "vested rights in subsequently-negotiated benefits, at
the highest level contractually established at any time during
the course of active duty." Id., ¶11.
¶50 Before us, plaintiffs characterize Welter and Rehrauer
as directly supporting the immediate vesting of rights to health
insurance terms and conditions upon hiring, asserting that they
23
No. 2012AP2490
involved bilateral contracts founded on statutory language
substantially identical to chs. 138 and 405 that plaintiffs
claim is applicable here. Although we could draw many
distinctions between plaintiffs' claims and those presented in
Welter and Rehrauer, it is sufficient to say, as the County has
argued, that both Welter and Rehrauer are pension cases, rather
than health insurance cases and the rights asserted in Welter
and Rehrauer arose from the City of Milwaukee's pension plan,
not a Milwaukee County health insurance plan. Stated otherwise,
neither Welter nor Rehrauer involves health insurance, the
nature of which as we have explained, is a fluid opportunity for
a limited period of time.
¶51 Health insurance, found in MCGO § 17.14 is on a
separate and independent track from pension rights established
in MCERS. As we have detailed above, the laws relied on by
plaintiffs that arguably could be applicable to MCERS do not
apply to or affect Milwaukee County's provision of health
insurance.
III. CONCLUSION
¶52 We conclude that Milwaukee County did not abrogate a
vested contract right when it prospectively modified a health
insurance benefit it offered for employees who had not yet
retired. We further conclude that County employees have a
vested contract right to Medicare Part B premium reimbursement
when they fulfill all three criteria for its payment: (1)
reaching retirement age; (2) providing 15 or more years of
credited county service; and (3) retiring before the dates
24
No. 2012AP2490
established by Milwaukee County. Employees who did not meet all
three criteria have not fulfilled the requirements necessary to
establish a vested contract right to reimbursement. Therefore,
we affirm the decision of the court of appeals that granted
summary judgment to Milwaukee County.
By the Court.—The decision of the court of appeals is
affirmed and the cause remanded to the circuit court to dismiss
the complaint.
25
No. 2012AP2490.dtp
¶53 DAVID T. PROSSER, J. (concurring). This case is
more difficult than Loth v. City of Milwaukee, 2008 WI 129, 315
Wis. 2d 35, 758 N.W.2d 766, and Stoker v. Milwaukee County, 2014
WI 130, ___ Wis. 2d ___, 857 N.W.2d 102. Because the result
here appears to be unfair, I have attempted to find some
reasonable ground to distinguish this case from Loth and Stoker
in order to preserve a right——at least for some county
employees——to receive the promised benefit of Medicare Part B
premium reimbursement sometime in the future.
¶54 This good faith effort has failed. Without resort to
the surrounding statutes and ordinances, this case is governed
by Loth. Turning to those statutes and ordinances, there is a
disconnect between the language of the statutes and ordinances
and the reality of the situation. It is not possible to
conclude that county employees like Schwegel and Jaskulski have
vested rights to Medicare Part B premium reimbursement before
they retire——indeed from the time they were hired——without
gravely impairing a county government's ability to manage its
fiscal affairs.
¶55 In 1945 the legislature approved Chapter 138, Laws of
1945. The statement of LEGISLATIVE POLICY in the act reads as
follows:
Employes have been attracted to and have remained
in the public service in counties of more than 500,000
population despite the prevailing higher wages in
other employments because of the deferred compensation
for their services promised to them in the form of
retirement annuities and death benefits in the
retirement system to which they have been admitted as
contributing members. The purpose of this act is to
strengthen the public service in the most populous
1
No. 2012AP2490.dtp
counties of the state by establishing the security of
such retirement and death benefits.
¶56 Some of the premises in this statement of policy are
no longer accurate. Prevailing wages in other employments are
not always higher than in county service. Public employee
benefits are no longer limited to retirement and death benefits
and may reach very substantial amounts. Some more modern
benefits, like those in question here, might be obtained only
after 15 or more years of service. Thus, the protections
outlined in 1945 may not square with the reality of contemporary
benefits, as those protections do not fully contemplate modern
benefit innovations. As a result, the legislature's policy of
providing security to public employee benefits——declared some
seven decades ago——appears to have been greatly complicated and
undermined by modern developments.
¶57 What is so frustrating today is that there appears to
be no middle ground for courts between jeopardizing the public
fisc by expansive, unreasonable interpretations of outdated
statutes and permitting counties to break faith with many public
employees by relying strictly upon technical rules.
¶58 Years ago, Congress passed the Employee Retirement
Income Security Act (ERISA) to protect private employees who
participate in pension plans. Something similar may be
necessary in Wisconsin so that we can step back from the
immediacy of the fiscal crises faced by public employers and
develop a strategy to protect public finances without betraying
the trust owed to loyal public employees.
¶59 For the foregoing reasons, I respectfully concur.
2
No. 2012AP2490.ssa
¶60 SHIRLEY S. ABRAHAMSON, C.J. (dissenting). When the
plaintiffs in the present case began their employment with
Milwaukee County, they became members of the Milwaukee County
Employees' Retirement System (MCERS).1 MCERS is governed by
Chapter 201 of the Milwaukee County General Ordinances (MCGO).
¶61 The language of the state session laws and the
Milwaukee County ordinances governing MCERS assures that County
employees' right to receive MCERS benefits becomes vested when
the employees are hired. "Vested" means the County cannot
renege on its promises.
¶62 Since at least 1989, MCGO § 17.14(7)(c) has provided
certain employees with no-premium-cost coverage under Medicare
Part B when they retire.2
¶63 In 1996, MCGO § 17.14(7)(h) was amended to provide
explicitly that "[t]he provisions of this subsection are
considered a part of an employee's vested benefit contract as
more fully set forth in 201.25(5.91) [sic]."3 Section 201.25 is
part of MCGO ch. 201, which governs MCERS.
1
See § 2(c), ch. 138, Laws of 1945.
2
The majority opinion explains that provisions in MCGO
§ 17.14(7) have been renumbered since 1989. For ease of
reading, I refer to the numbering used at the time the relevant
provisions were adopted.
3
As the majority opinion notes, the reference in MCGO
§ 17.14(7) to MCGO § 201.24(5.91) appears to be a drafting
error. See majority op., ¶10 n.9. There is no MCGO
§ 201.24(5.91). The reference in MCGO § 17.14(7) should be to
MCGO § 201.24(5.10).
1
No. 2012AP2490.ssa
¶64 The "vested benefit contract" referred to in MCGO
§ 17.14(7)(h) is the MCERS benefit contract that Milwaukee
County enters with its employees at the time of their initial
hire.
¶65 In 2011, the County changed its position and amended
MCGO § 17.14(7) to provide that certain categories of Milwaukee
County employees (including the plaintiffs4) will be ineligible
for reimbursement of their post-retirement Medicare Part B
premiums upon their retirement in or after 2011 or 2012.
¶66 The instant case revolves around the parties' dispute
about the effect and validity of the 2011 amendment. The issue
presented is whether County employees who began working for the
County after it agreed to reimburse employees for their post-
retirement Medicare Part B premiums and before it changed its
position have the right to reimbursement of their post-
retirement Medicare Part B premiums. The circuit court decided
that they do. I agree.
¶67 The majority opinion rules that the County need not
keep its promise to employees.
¶68 Justice David T. Prosser concurs in the majority
opinion, stating that a determination that the plaintiffs have a
vested right to reimbursement of their post-retirement Medicare
MCGO § 201.24(5.10) provides: "Members who retire with
sufficient pension service as noted in chapter 17 of the Code,
or the appropriate labor agreement, shall be provided with paid
health insurance as noted in chapter 17 of the Code, however
such benefit shall not be funded via the pension fund."
4
The plaintiffs were hired by Milwaukee County in 1989 and
1990.
2
No. 2012AP2490.ssa
Part B premiums would "gravely impair[] a county government's
ability to manage its fiscal affairs."5
¶69 For the County (or anyone) to pay expenses, including
employee benefits, is burdensome. But despite Justice Prosser's
opining without any financial data that upholding the
plaintiffs' vested right to the benefits at issue in the instant
case would gravely impair Milwaukee County's ability to manage
its finances, the fact is that Milwaukee County does not defend
the disputed 2011 amendment to MCGO § 17.14(7) on the grounds of
"public economic emergency,"6 "great public calamity,"7
"extraordinary conditions,"8 or "urgent public need."9 The
instant case therefore differs from Home Bldg. & Loan Ass'n v.
Blaisdell, 290 U.S. 398, 420 (1934), in which the United States
Supreme Court upheld a Minnesota statute that allowed for the
5
Concurrence, ¶54.
6
See Home Bldg. & Loan Ass'n v. Blaisdell, 290 U.S. 398,
420 (1934).
7
See id. at 439.
8
See id.
9
See id. at 440.
3
No. 2012AP2490.ssa
retroactive impairment of mortgage contracts due to "public
economic emergency."10
¶70 Milwaukee County does not rely on a Blaisdell defense.
Rather, Milwaukee County defends the 2011 amendment on the
grounds that the benefits it affects were not vested. The
majority opinion errs in accepting this argument. It undermines
the state legislature's recognition of the hardship imposed on
County employees unless the employees can make retirement plans
with certainty about the retirement benefits they will receive
from the County. To give employees certainty and to avoid
imposing unnecessary hardship on them are the reasons the state
legislature vested County employees' retirement benefits in the
first place. See § 1, ch. 138, Laws of 1945 ("The purpose of
this act is to strengthen the public service by establishing the
security of such retirement and death benefits" (emphasis
added)).
10
The Blaisdell Court determined that while the Contract
Clause of the federal constitution generally prohibits states
from enacting laws that retroactively impair contracts, "the
prohibition is not an absolute one." Blaisdell, 290 U.S. at
428. The Court declared that the police power indisputably
enables states to interfere with contracts when such
interference is "made necessary by a great public calamity such
as fire, flood, or earthquake." Blaisdell, 290 U.S. at 439
(emphasis added). The Court further declared that "[t]he
reservation of state power appropriate to such extraordinary
conditions" is necessarily "a part of all contracts."
Blaisdell, 290 U.S. at 439 (emphasis added). Finally, the Court
concluded that "if state power exists to give temporary relief
from the enforcement of contracts in the presence of [natural]
disasters . . . [then] that power cannot be said to be
nonexistent when the urgent public need demanding such relief is
produced by [] economic causes." Blaisdell, 290 U.S. at 439-40
(emphasis added).
4
No. 2012AP2490.ssa
¶71 The majority opinion is wrong on the law in three
primary respects.
¶72 First, instead of focusing on the state session laws
and the Milwaukee County ordinances that govern the benefits
provided by the County's retirement system (including
reimbursement for retirees' Medicare Part B premiums), the
majority opinion digresses and emphasizes an unsupported
distinction between health benefits and other forms of
retirement benefits.
¶73 The majority opines that the County's retirement
system and its system of providing health benefits are on two
completely separate tracks.11 The majority comes to this
sweeping but unconvincing conclusion without any support in the
governing state session laws, Milwaukee County ordinances, or
cases (and ignoring contrary language within them) and without
the benefit of adversarial briefs or argument. Milwaukee
County's argument in the instant case centers on a trilogy of
cases described in Part III of this opinion.
¶74 Try as it might, the majority opinion is not credible
in its attempt at separating reimbursement of Medicare Part B
premiums from the other benefits provided by MCERS or in its
attempt at circumventing the text of the governing state session
laws and Milwaukee County ordinances.
¶75 Second, the majority opinion disregards the clear
language of the governing state session laws and Milwaukee
11
See majority op., ¶¶23-37, 44, 45.
5
No. 2012AP2490.ssa
County ordinances. The text of these laws and ordinances is
dispositive of the instant case.
¶76 The language of the state session laws makes it
abundantly clear that upon becoming County employees, the
plaintiffs gained a vested right to the annuities and "all other
benefits" provided by MCERS.12 This broad language does not
exclude reimbursement of post-retirement Medicare Part B
premiums. The Milwaukee County ordinances incorporated
reimbursement of post-retirement Medicare Part B premiums into
MCERS.
¶77 The state session laws and the Milwaukee County
ordinances say what they mean and mean what they say. They
explicitly grant the plaintiffs a vested right at the
commencement of their employment to reimbursement at retirement
of their Medicare Part B premiums.
¶78 Third, the majority opinion fails to reconcile three
decisions regarding the vesting of employee benefits that the
circuit court and the court of appeals found confusing and
inconsistent: Welter v. City of Milwaukee, 214 Wis. 2d 485, 571
N.W.2d 459 (Ct. App. 1997); Rehrauer v. City of Milwaukee, 2001
WI App 151, 246 Wis. 2d 863, 631 N.W.2d 644; and Loth v. City of
Milwaukee, 2008 WI 129, 315 Wis. 2d 35, 758 N.W.2d 766.13
12
§ 2(c), ch. 138, Laws of 1945.
13
While the majority opinion focuses on distinguishing
health insurance from pension and death benefits (tackling Loth
v. City of Milwaukee, 2008 WI 129, 315 Wis. 2d 35, 758
N.W.2d 766, as a mere afterthought), the County's brief focuses
primarily on these three employee benefit cases.
6
No. 2012AP2490.ssa
¶79 A careful reading of the three cases demonstrates that
each turns on the language of the provisions governing the
particular employee benefits at issue and that the provisions in
Loth are significantly different from the provisions in Welter,
Rehrauer, and the instant case.
¶80 The language of the laws and ordinances protecting
reimbursement of the plaintiffs' post-retirement Medicare Part B
premiums from diminishment by the County in the instant case is
substantially the same as the language of the state session law
protecting the employees' disability benefits from diminishment
by the City in Welter and Rehrauer. The disability benefits in
Welter and Rehrauer were part of the City of Milwaukee's
retirement system and were governed by a state session law and
City enactments, just as reimbursement of Medicare Part B
premiums in the instant case is part of the County's retirement
system and is governed by state session laws and County
enactments.
¶81 In contrast, the language of the City of Milwaukee
enactment governing the employee health benefits at issue in
Loth is entirely different. In Loth, the health benefits at
issue were not governed by state session laws and were not part
of the City's retirement system; the City enactment at issue in
Loth made no reference to the City's retirement system or to the
vesting of benefits.
¶82 Thus, the Loth opinion and the Loth briefs do not cite
Welter or Rehrauer because the provisions governing the benefits
at issue in Loth were significantly different from the
7
No. 2012AP2490.ssa
provisions governing the benefits at issue in Welter and
Rehrauer.
¶83 The state session law at issue in Welter and Rehrauer
(governing the City's retirement system) is substantially the
same as the state session laws governing Milwaukee County's
retirement system in the instant case. Both Welter and
Rehrauer, relying on the language of the governing state session
law, held that the City police officers and firefighters had a
vested right to the disability benefits at issue that could not
be diminished by city enactment. Welter and Rehrauer govern the
instant case; Loth does not.
¶84 By declaring that it will not reimburse the post-
retirement Medicare Part B premiums of future retirees, the
County has, in my opinion, breached the plaintiffs' vested
benefit contracts in violation of state session laws, Milwaukee
County ordinances, and case law precedent.
¶85 Accordingly, I dissent.
I
¶86 To reach its desired result, the majority opinion has
concocted an unsupported distinction between health benefits and
other forms of retirement benefits provided by MCERS. It raises
this alleged distinction sua sponte and addresses it without the
benefit of briefs or argument by the parties. It cites no
authority in the governing state session laws, Milwaukee County
ordinances, or case law to support its position, and it
overlooks language in the governing state session laws, the
Milwaukee County ordinances, and the cases that contradicts its
8
No. 2012AP2490.ssa
position. Finally, it speaks in overly broad terms that are
likely to have unanticipated consequences.
¶87 The majority opinion raises, analyzes, and adopts this
"discreteness" theory sua sponte, without giving the parties an
opportunity to participate in the discussion. When a court
raises an issue sua sponte, "fairness requires that the parties
have the opportunity to develop the relevant facts and to
present legal arguments on the issue."14 The majority apparently
sees no reason to provide such an opportunity in the instant
case.
¶88 Thus, once again, I write to decry the court's failure
to give counsel the opportunity to represent their clients
before this court. The majority's position shows disrespect for
the litigants and counsel.
¶89 I recognize that some justices prefer to reach
decisions without the benefit of arguments or briefs by the
parties and apparently perceive that the rule of law is advanced
by the court's sua sponte approach. I do not. I prefer greater
restraint by the court and greater respect for litigants and
their counsel. As I have stated in the past:
[T]he rule of law is generally best developed when
matters are tested by the fire of adversarial briefs
and oral argument.
. . . .
Indeed, a court's sua sponte determination of an issue
may raise due process considerations: A court may
14
Hydrite Chem. Co. v. Aetna Cas. & Sur. Co., 220
Wis. 2d 26, 49, 582 N.W.2d 423 (Ct. App. 1998) (Roggensack, J.,
dissenting).
9
No. 2012AP2490.ssa
be depriving parties of their right to a meaningful
appeal, to due process notice, and to adversary
counsel.15
¶90 I agree with Justice Ann Walsh Bradley that this
court's role is to weigh the arguments of counsel, not to make
arguments as counsel:
By raising sua sponte a brand new outcome-
determinative issue, an appellate court tends to blur
the lines between the role of the lawyer as advocate
and the role of the judge as impartial decision maker.
In contrast to the other branches of government, the
judicial branch's role seems better fitted to respond
to issues presented rather than creating issues to
present.16
15
Maurin v. Hall, 2004 WI 100, ¶¶119-121, 274 Wis. 2d 28,
682 N.W.2d 866 (Abrahamson, C.J. & Crooks, J., concurring),
overruled on other grounds by Bartholomew v. Wis. Patients Comp.
Fund, 2006 WI 91, 293 Wis. 2d 38, 717 N.W.2d 216. In Maurin,
Justice Crooks and I criticized the majority opinion for
deciding the case on the basis of a "novel interpretation of the
statutes" without first requesting supplemental briefs or
reargument. Maurin, 274 Wis. 2d 28, ¶120 (Abrahamson, C.J., &
Crooks, J., concurring). Our concurrence stated: "We are at a
loss to understand why the majority refuses to call for
additional briefs." Maurin, 274 Wis. 2d 28, ¶121 (Abrahamson,
C.J., & Crooks, J., concurring).
16
Attorney's Title Guar. Fund, Inc. v. Town Bank, 2014 WI
63, ¶56, 355 Wis. 2d 229, 850 N.W.2d 28 (Bradley, J.,
dissenting).
See also Bartus v. DHSS, 176 Wis. 2d 1063, 1073, 501
N.W.2d 419 (1993) ("We therefore urge the courts to exercise
caution when determining an issue sua sponte without the
assistance of supplemental briefs and to ask for briefs unless
the matter is quite clear."); Cemetery Servs., Inc. v. Wis.
Dep't of Regulation & Licensing, 221 Wis. 2d 817, 831, 586
N.W.2d 191 (Ct. App. 1998) ("We cannot serve as both advocate
and court. For this reason, we generally choose not to decide
issues that are not adequately developed by the parties in their
briefs."). Accord Day v. McDonough, 547 U.S. 198, 210 (2006)
("Of course, before acting on its own initiative, a court must
accord the parties fair notice and an opportunity to present
their positions.").
10
No. 2012AP2490.ssa
¶91 The majority opinion's sua sponte approach is
especially galling considering the lack of support for the
distinction the majority opinion draws within MCERS between
health insurance and pension and death benefits.
¶92 The infirmity of the majority opinion's distinction is
readily apparent in the many gratuitous, hollow-sounding
comments it offers without any citation or explanation of their
relevance to the parties' dispute. See, e.g., majority op., ¶44
("County payment for health insurance premiums is not defined in
a fixed way such that a County payment is tied to a specified
benefit that always will follow. . . . [B]y their nature, health
insurance benefits have always been fluid opportunities
available for a limited period of time . . . ."); majority op.,
¶45 ("[H]ealth insurance payments are not earned in
increments . . . ."); majority op., ¶50 ("[P]ension cases
[differ from cases involving] health insurance, the nature of
which . . . is a fluid opportunity for a limited period of
time.").
¶93 The majority opinion's detour from the parties'
arguments distorts the text of the 1996 amendment to MCGO
§ 17.14(7)(h) and the language of § 2, ch. 138, Laws of 1945,
one of the state session laws governing the County's retirement
system.
¶94 The 1996 amendment contradicts the majority opinion's
assertion that health insurance for Milwaukee County employees
11
No. 2012AP2490.ssa
has been "on a separate and independent track from pension and
death benefits . . . ."17
¶95 Both before and after the 1996 amendment, MCGO
§ 17.14(7)(h) provided that the "County shall pay the full
monthly cost of providing such coverage to retired members of
the County Retirement System with 15 or more years of creditable
pension service as a County employee . . . ."
¶96 The text added to MCGO § 17.14(7)(h) by the 1996
amendment, which remains in the current version of the
ordinance, reads as follows: "The provisions of this subsection
are considered a part of an employee's vested benefit contract
as more fully set forth in 201.24(5.91) [sic]."18
¶97 The "vested benefit contract" to which the 1996
amendment refers is the vested benefit contract the County must
enter with each employee when the employee is hired. See § 2,
ch. 138, Laws of 1945. These contracts assure County employees
a vested right to all benefits provided by MCERS at the
employees' time of hire, rather than at the time of the
employees' retirement.19
¶98 Thus, the 1996 amendment expressly puts health
insurance and pension and death benefits on the same track by
explicitly stating that the health insurance provided by MCGO
§ 17.14(7) is part of the "vested benefit contract" MCERS
members enter at the commencement of their employment with the
17
Majority op., ¶33.
18
MCGO § 17.14(7)(h) (1996) (emphasis added).
19
§ 2(c), ch. 138, Laws of 1945.
12
No. 2012AP2490.ssa
County.20 MCGO § 17.14(7)(h) affirms that the particular health
benefit at issue in the instant case comes within the
restrictions of MCERS. The majority opinion's conclusion at ¶37
that the 1996 amendment means that health insurance is part of
MCERS but not subject to the restrictions imposed on MCERS is
specious.
¶99 The director of human resources' summary of the 1996
amendment (cited in ¶38 of the majority opinion to support its
position) states:
The revisions related to the provisions of health
insurance after retirement to retirees with 15 or more
years of pension service credit is being proposed only
to clarify the fact that the benefit is a vested
benefit.
¶100 The majority opinion emphasizes the word "retirees"
and misinterprets the sentence to give employees vested rights
to the health benefits at issue only at retirement. Read
rationally in the context of MCGO § 17.14(7)(h) and in the
broader context of MCERS, the 1996 amendment and the director's
comment can mean only one thing for the plaintiffs: They gained
a vested right to reimbursement of their post-retirement
Medicare Part B premiums when they began their employment; to
take advantage of this benefit, they must meet the enumerated
prerequisites at retirement.
¶101 The majority opinion also garbles the language of
§ 2(c), ch. 138, Laws of 1945. This state session law, which
governs MCERS, explicitly states that future MCERS members
20
MCGO § 17.14(7)(h) (1996).
13
No. 2012AP2490.ssa
"shall have a . . . vested right in the annuities and all other
benefits . . . as provided in the law under which [MCERS] was
established as such law shall have been amended and be in effect
at the date of commencement of his [or her] membership."21
¶102 The broad and inclusive reference in Chapter 138, Laws
of 1945, to "all other benefits" and the broad language in
Chapter 138 acknowledging that the benefits provided by MCERS
will change over time demonstrate clearly that the benefits
provided by MCERS can include newly adopted health benefits.
The majority opinion's contrary conclusion at ¶26 is unsupported
by the governing state session laws.22
¶103 In 2011, MCGO § 17.14(7) was again amended. The
instant case revolves around the parties' dispute about the
effect and validity of this 2011 amendment. The 2011 amendment
states, among other things, that certain categories of County
employees (including the plaintiffs) will be ineligible for
reimbursement of their post-retirement Medicare Part B premiums
upon their retirement in or after 2011 or 2012.
¶104 The majority opinion upholds the 2011 amendment
without a convincing analysis of the applicable state session
laws and the Milwaukee County ordinances protecting the
plaintiffs.
21
§ 2(c), ch. 138, Laws of 1945 (emphasis added).
22
See also ch. 405, Laws of 1965, granting Milwaukee County
home rule and empowering it to make changes to the retirement
system "by county ordinance" so long as no change "diminish[es]
or impair[s] the annuities, benefits or other rights of any
person who is a member of such retirement system prior to the
effective date of such change."
14
No. 2012AP2490.ssa
¶105 Finally, reimbursement of qualified retirees' Medicare
Part B premiums is not the only health benefit granted by
Milwaukee County to retirees. The majority opinion is broadly
written. Such a broad opinion is apt to have unanticipated
ramifications.
¶106 In sum, the majority opinion's attempt at
distinguishing health benefits at retirement from other kinds of
benefits at retirement falls flat. The majority opinion's
failure to give the parties an opportunity to address this
alleged distinction, the lack of support for its position in the
governing state session laws and Milwaukee County ordinances,
its failure to acknowledge contradictory language in those laws
and ordinances, and its sweeping characterization of health
insurance as separate and distinct from MCERS render the
majority opinion wholly unconvincing.
II
¶107 The majority opinion's disregard for the clear
language of the governing state session laws and Milwaukee
County ordinances extends beyond its discussion of the
supposedly inherent difference between health insurance and
pension and death benefits. The laws and ordinances governing
reimbursement for retired County employees' Medicare Part B
premiums are in fact dispositive of the instant case.
¶108 The governing state session laws and the Milwaukee
County ordinances make it abundantly clear that upon joining the
County's retirement system, the plaintiffs gained a vested right
to reimbursement of their post-retirement Medicare Part B
15
No. 2012AP2490.ssa
premiums. Further, under the clear language of the laws and
ordinances, Milwaukee County may change MCERS so long as no
change diminishes or impairs the vested rights of MCERS members.
¶109 The 2011 Milwaukee County ordinance amendment at issue
in the instant case states, among other things, that certain
categories of County employees (including the plaintiffs) will
be ineligible for reimbursement of their post-retirement
Medicare Part B premiums upon their retirement in or after 2011
or 2012. The 2011 amendment diminishes or impairs the vested
rights of then active MCERS members (including the plaintiffs)
and is therefore invalid as applied to them.
¶110 The texts of the governing state session laws and
Milwaukee County ordinances are dispositive. I first summarize
the state session laws and Milwaukee County ordinances in
chronological order and then discuss them more fully. The
Milwaukee County ordinances govern MCERS and have made
reimbursement of Medicare Part B premiums part of MCERS (see E,
below), but the ordinances must comport with the state session
laws dating back to 1937 that protect Milwaukee County
employees' vested contract rights (see A-D, below).
A. Chapter 201, Laws of 1937, required Milwaukee County
to develop a retirement system for its employees.
Pursuant to this law, Milwaukee County created
MCERS.23
23
Stoker v. Milwaukee Cnty., 2014 WI 130, ¶5, ___
Wis. 2d ___, 857 N.W.2d 102.
16
No. 2012AP2490.ssa
B. Chapter 138, Laws of 1945, declared that the
legislative policy underlying MCERS is to recruit and
retain County employees by establishing the security
of their retirement and death benefits.24 "[T]he
legislature required employee benefits under MCERS to
'be assured by benefit contracts.'"25 Chapter 138
also provided that at the commencement of their
employment with the County, County employees become
members of MCERS and have a "vested right in the
annuities and all other benefits . . . [provided by]
the law under which [MCERS] was established as such
law shall have been amended and be in effect at the
date of commencement of [their] membership [in
MCERS]."26
C. Chapter 326, Laws of 1957, provided that "a member of
MCERS has a 'vested right . . . to all increases in
benefits covered by amendments subsequent to the date
his [or her] membership [in MCERS] is effective.'"27
D. Chapter 405, Laws of 1965, granted "home rule"
authority to Milwaukee County over MCERS and provided
that "the future operation of each [county] benefit
fund is a matter of local affair and
24
See id., ¶5 n.7.
25
Id., ¶5 (quoting and citing ch. 138, Laws of 1945).
26
Id. (quoting and citing ch. 138, Laws of 1945).
27
Id., ¶6 (quoting and citing § 6, ch. 326, Laws of 1957).
17
No. 2012AP2490.ssa
government . . . ." It also "empowered Milwaukee
County 'to make any changes in [its employee] benefit
fund which hereafter may be deemed necessary or
desirable for the continued operation of [MCERS],"
but limited the County's authority by providing that
"no such change shall operate to diminish or impair
the annuities, benefits or other rights of any person
who is a member of [MCERS] prior to the effective
date of any such change."28
E. MCERS is also governed by Milwaukee County
ordinances. As I discussed previously, the 1996
amendment to MCGO § 17.14(7)(h) incorporated
reimbursement of the premium costs of Medicare Part B
into MCERS by clarifying that such health benefits
are "part of an employee's vested benefit contract."
As part of MCERS, the benefits provided by MCGO
§ 17.14(7)(c) and (h) are subject to the vesting
provision in Chapter 138, Laws of 1945; Chapter 326,
Laws of 1957; and the home rule limiting provision in
Chapter 405, Laws of 1965.
A
¶111 Chapter 201, Laws of 1937, required Milwaukee County
to develop a retirement system for its employees for payment of
benefits. Pursuant to this law, Milwaukee County created the
Milwaukee County Employees' Retirement System (MCERS).29
28
Id., ¶7 (quoting and citing § 6, ch. 405, Laws of 1965).
29
See id., ¶5.
18
No. 2012AP2490.ssa
B
¶112 I turn to the vesting provisions in Chapter 138, Laws
of 1945. This state session law provides that Milwaukee County
employees become members of MCERS at the commencement of their
employment with the County and gain a vested right at that time
in "the annuities and all other benefits . . . as provided in
the law under which [MCERS] was established as such law shall
have been amended and be in effect at the date of commencement
of [their] membership [in MCERS]."30
¶113 The most important aspects of Chapter 138, Laws of
1945, for the instant case are its use of the phrase "vested
rights" and its recognition that MCERS will change over time
with future benefits inuring to employees.
¶114 The phrase "vested rights" has a common usage in the
law; it is a technical legal phrase. Under the general rules of
statutory interpretation adopted by the legislature, the phrase
is interpreted in conformance with its common usage (here, in
The relevant text of Chapter 201 is as follows:
In each county having a population of five hundred
thousand or more a retirement system shall be
established and maintained for the payment of benefits
to the employes of such county and to the widows and
children of such employes . . . . The funds of the
retirement system shall be derived, administered and
disbursed in accordance with the provisions of this
act.
30
Stoker, ___ Wis. 2d ___, ¶5 (quoting and citing ch. 138,
Laws of 1945). See also id., ¶22.
19
No. 2012AP2490.ssa
the law) and is given its technical legal meaning.31 The
majority opinion offers a legal meaning, stating that "[a]
vested contractual right is one that cannot be abrogated without
breaching the contract from which it arises."32 The majority
opinion fails, however, to apply the definition it provides.
¶115 Despite the clear language in Chapter 138 providing
the plaintiffs with a vested right to the benefits provided by
MCERS at the commencement of their employment, the majority
opinion concludes that the plaintiffs' right to reimbursement of
their post-retirement Medicare Part B premiums never vested.
¶116 The relevant text of Chapter 138, Laws of 1945, is as
follows (emphasis added):
(2) CONTRACTS TO ASSURE BENEFITS. The benefits of
members, whether employes in service or retired as
beneficiaries, and of beneficiaries of deceased
members in the retirement system created by ch. 201,
Laws of 1937, as amended, shall be assured by benefit
contracts as herein provided:
31
See Wis. Stat. § 990.01(1) (2011-12) ("All words and
phrases shall be construed according to common and approved
usage; but technical words and phrases and others that have a
peculiar meaning in the law shall be construed according to such
meaning."). All subsequent references to the Wisconsin Statutes
are to the 2011-12 version unless otherwise indicated. See also
Volvo Trucks N. Am. v. DOT, 2010 WI 15, ¶36, 323 Wis. 2d 294,
779 N.W.2d 423 ("Technical words or phrases in a statute should
be given their technical or specialized meaning.").
32
See majority op., ¶3, n.5. According to Black's Law
Dictionary, a vested right is also one that is "complete and
consummated, and of such character that it cannot be divested
without the consent of the person to whom it belongs." Black's
Law Dictionary 1564 (6th ed. 1990). The 1999 edition of Black's
Law Dictionary defines vested as "a completed, consummated right
for present or future enjoyment; not contingent, unconditional;
absolute."
20
No. 2012AP2490.ssa
(a) . . . The annuities and all other
benefits . . . shall be obligations of such benefit
contract on the part of the county . . . and each
member and beneficiary having such a benefit contract
shall have a vested right to such annuities and other
benefits and they shall not be diminished or impaired
by subsequent legislation or by any other means
without his [or her] consent.
. . . .
(c) Every future entrant who shall become a member of
this retirement system after the effective date of
this act shall have a similar benefit contract and
vested right in the annuities and all other
benefits . . . as provided in the law under which the
retirement system was established as such law shall
have been amended and be in effect at the date of
commencement of his [or her] membership.
C
¶117 In 1957, the legislature again affirmed Milwaukee
County employees' vested right to MCERS benefits. Chapter 326,
Laws of 1957, provides that a member of MCERS has a "vested
right . . . to all increases in benefits covered by amendments
subsequent to the date his [or her] membership [in MCERS] is
effective."33
D
¶118 Chapter 405, Laws of 1965, grants "home rule"
authority to Milwaukee County over MCERS and empowers Milwaukee
County "to make any changes [by county ordinances] in [its
employee] benefit fund which hereafter may be deemed necessary
or desirable for the continued operation of [MCERS]." Chapter
405 of the 1965 Laws limits this grant of home rule authority by
33
Stoker, ___ Wis. 2d ___, ¶6 (quoting and citing § 6, ch.
326, Laws of 1957). See also id., ¶22.
21
No. 2012AP2490.ssa
providing that "no such change shall operate to diminish or
impair the annuities, benefits or other rights of any person who
is a member of [MCERS] prior to the effective date of any such
change."34
¶119 In other words, Milwaukee County has authority to
reduce the benefits provided to future employees but not to
reduce the vested benefits of persons in the County's employ
prior to the effective date of the reduction. This court held
in Stoker v. Milwaukee County, 2014 WI 130, ___ Wis. 2d ___, 857
N.W.2d 102, that the limit on Milwaukee County's home rule
authority allows it to reduce a benefit that has not vested but
does not allow the County to reduce a benefit that has vested.35
¶120 The relevant text of Chapter 405, Laws of 1965, is as
follows:
Each county which is required to establish and
maintain a benefit fund pursuant to this act is hereby
empowered by county ordinance, to make any changes in
such benefit fund which hereafter may be deemed
necessary or desirable for the continued operation of
such benefit fund, but no such change shall operate to
diminish or impair the annuities, benefits or other
rights of any person who is a member of such benefit
fund prior to the effective date of any such change.36
E
34
Stoker, ___ Wis. 2d ___, ¶7 (quoting and citing § 6, ch.
405, Laws of 1965). See also id., ¶22.
35
Id., ¶¶24, 25, 27, 28, 29.
36
§ 1, ch. 405, Laws of 1965 (emphasis added).
22
No. 2012AP2490.ssa
¶121 In addition to the aforementioned state session laws,
Milwaukee County ordinances govern MCERS.37
¶122 The significant ordinance is MCGO § 17.14(7). As I
explained previously, in 1996, MCGO § 17.14(7)(h) was amended to
clarify that the health benefits provided by subsection (7)
(including MCGO § 17.14(7)(c) governing reimbursement of post-
retirement Medicare Part B premiums) are part of the "vested
benefit contract" MCERS members enter upon commencing their
employment with the County, "as more fully set forth in
201.25(5.91) [sic]."
¶123 In sum, the laws and ordinances at issue in the
present case could not be clearer: The plaintiffs' right to
reimbursement of their post-retirement Medicare Part B premiums
vested at the commencement of their employment with the County.
Chapter 138, Laws of 1945, and Chapter 405, Laws of 1965,
prohibit Milwaukee County from diminishing or impairing vested
rights. Yet the 2011 amendment to MCGO § 17.14(7) does just
that. Consequently, the 2011 amendment breached the plaintiffs'
vested benefit contracts, violated the governing laws and
ordinances, and is invalid.
¶124 As in Stoker, the majority opinion in the instant case
is able to reach its conclusion that no breach of contract or
violation of law exists only "by repeatedly ignoring the
language of the governing session laws."38
37
See Stoker, ___ Wis. 2d ___, ¶¶8, 10, 11, 12 (discussing
Milwaukee County ordinances relating to MCERS).
38
Stoker, ___ Wis. 2d ___, ¶48 (Bradley, J., dissenting).
23
No. 2012AP2490.ssa
III
¶125 The third significant legal error in the majority
opinion is its failure to reconcile three precedential opinions
regarding the vesting of employee benefits. The circuit court
and the court of appeals characterized the following three
opinions as confusing and inconsistent: Loth v. City of
Milwaukee, 2008 WI 129, 315 Wis. 2d 35, 758 N.W.2d 766; Welter
v. City of Milwaukee, 214 Wis. 2d 485, 571 N.W.2d 459 (Ct. App.
1997); and Rehrauer v. City of Milwaukee, 2001 WI App 151, 246
Wis. 2d 863, 631 N.W.2d 644.
¶126 The County's position and argument in this court
revolve around these three cases.
¶127 A careful examination of this trilogy demonstrates
that the three opinions are consistent with each other, support
the position I espouse, and govern the instant case.
¶128 The majority opinion claims it is following Loth, but
it is in fact inconsistent with Loth. The majority opinion is
also inconsistent with Welter and Rehrauer. The majority
opinion in the instant case errs when it concludes that the
plaintiffs' rights under MCGO § 17.14(7) do not vest until the
plaintiffs reach retirement age, provide 15 years or more of
credited County service, and retire.39
¶129 I begin by examining Loth, the only case the majority
views as controlling. Loth is instructive and supports my
position.
39
See majority op., ¶¶42-43.
24
No. 2012AP2490.ssa
¶130 Loth turns on the language of a City of Milwaukee
resolution that governs the particular employee health benefits
at issue in that case. Loth correctly insists that "the terms
of an employer's . . . offer are important in determining how an
employee may accept the offer and give rise to a binding
contract."40
¶131 In Loth, a city resolution extended paid retiree
health insurance coverage to employees who fulfilled enumerated
prerequisites. The City never incorporated its retiree health
insurance program into vested benefit contracts or otherwise
indicated at any time or in any other way during Loth's
employment that he had a contractual (let alone vested) right to
paid retiree health insurance before he fulfilled the
prerequisites set forth in the resolution.
¶132 The Loth court interpreted the City resolution as
dictating that the City's offer of paid retiree health insurance
could be accepted only by an employee's retiring at the
appropriate age with the requisite years of service. The court
stated: "The City and Loth never formed a contract obligating
the City to provide Loth with no-premium-cost retirement health
insurance benefits before Loth retired."41
¶133 The majority opinion proclaims its consistency with
Loth and concludes that because the plaintiffs in the instant
case had not retired at the time of the 2011 amendment to MCGO
40
Loth v. City of Milwaukee, 2008 WI 129, ¶31, 315
Wis. 2d 64, 758 N.W.2d 766.
41
Id., ¶43.
25
No. 2012AP2490.ssa
§ 17.14(7), the County's offer to reimburse the plaintiffs'
post-retirement Medicare Part B premiums could still be revoked
(as the offer of paid retiree health insurance was in Loth).42
¶134 The majority opinion overlooks the differences between
Loth and the instant case and misreads Loth. Loth turns on the
specific language used by the City employer to offer the
particular health benefits at issue in that case. Loth
correctly insists that "the terms of an employer's . . . offer
are important in determining how an employee may accept the
offer and give rise to a binding contract."43
¶135 Loth is relevant to the instant case, but not because
it involves health benefits and not because the employee in Loth
was required to fulfill enumerated prerequisites before
receiving those health benefits at retirement. Rather, Loth is
relevant because of the contrast between the language used by
the City to offer the benefits at issue in that case and the
language used by the County to offer the benefits at issue in
the instant case.
¶136 In the instant case, Milwaukee County offered
employment to the plaintiffs according to the terms set forth in
the state session laws and the Milwaukee County ordinances
governing MCERS. As I explained previously, these laws and
ordinances provide that by accepting County employment, the
plaintiffs enter into a vested benefit contract with the County.
In the instant case, unlike in Loth, a binding bilateral
42
Majority op., ¶¶42-43.
43
Loth, 315 Wis. 2d 64, ¶31.
26
No. 2012AP2490.ssa
agreement was created when the plaintiffs were hired by the
County.
¶137 I turn to the other two cases in the trilogy: Welter
and Rehrauer. These opinions of the court of appeals have
statewide precedential effect under Wis. Stat. § 752.41(2),
which provides that "[o]fficially published opinions of the
court of appeals shall have statewide precedential effect."
These two opinions played no role in the Loth case. They were
not cited or argued and are not referenced in the Loth decision.
¶138 In Welter,44 the court of appeals considered a state
session law and provisions of Chapter 36 of the Milwaukee City
Charter relating to the City of Milwaukee Employees' Retirement
System. The issue presented was whether City police officers
were entitled to the disability benefits provided by the City's
retirement system when they were hired, that is, whether their
right to post-retirement disability benefits vested at hire or
could be reduced by the City prior to the police officers'
retiring.45
¶139 The language of the governing state session law,
Chapter 441, Laws of 1947, is substantially similar to the
44
For additional discussion of Welter v. City of Milwaukee,
214 Wis. 2d 485, 489, n.2, 13 N.W.2d 459 (Ct. App. 1997), see
Justice Bradley's dissent in Stoker, ___ Wis. 2d ___, ¶¶51-52,
61.
45
The precise benefit at issue in Welter was the police
officers' right to the conversion age in effect when they were
hired. The conversion age is the age at which a disabled police
officer's retirement allowance is reduced from the more
favorable Duty Disability Retirement Allowance level to the less
favorable Service Retirement Allowance level.
27
No. 2012AP2490.ssa
language of the state session laws at issue in the instant case.
Chapter 441, Laws of 1947 provides:
Every such member . . . shall thereby have a benefit
contract in said retirement system of which he [or
she] is such member or beneficiary as of the effective
date of this act . . . . Each member and beneficiary
having such a [retirement system] benefit contract
shall have a vested right to such annuities and other
benefits and they shall not be diminished or impaired
by subsequent legislation or by other means without
[the officer's] consent. . . . Every future entrant
who shall become a member of this retirement system
after the effective date of this act shall have a
similar benefit contract and vested right in the
annuities and all other benefits . . . .46
¶140 After considering the text of Chapter 441, Laws of
1947, the court of appeals in Welter determined that the
disability benefits at issue vested when the plaintiff police
officers became employees. Thus, the City could not amend
Chapter 36 of the Milwaukee City Charter to deprive the police
officers of those vested benefits.
¶141 The Welter court reasoned that the language of the
governing state session law "[is] not ambiguous; [its] meaning
is plain."47 The same can be said of the state session laws
governing the instant case. The Welter court went on to say:
"Under [Chapter 441], retirement-plan benefits in effect when a
Milwaukee police officer becomes a member of the retirement
system are vested as to that officer unless the officer agrees
to a change."48
46
See Welter, 214 Wis. 2d at 489 n.2 (emphasis added).
47
Id. at 491.
48
Id.
28
No. 2012AP2490.ssa
¶142 The court of appeals rejected the City's argument that
the employees' right to the disability benefits at issue vested
at some later date, stating that "[t]his argument . . . ignores
the legislative command that the critical date is not that of
the duty-related disability but the date the officer becomes a
member of the retirement system——the date he or she was first
employed by the City as a police officer."49
¶143 Rehrauer, involving disability benefits for City of
Milwaukee firefighters,50 presented substantially similar issues
as Welter. As in Welter, the benefits at issue were post-
retirement disability benefits. As in Welter, the beneficiaries
were City of Milwaukee employees. The same state session law
(Chapter 441, Laws of 1947) and the same chapter of the
Milwaukee City Charter (Chapter 36) governed the benefits at
issue in Rehrauer as in Welter. The Rehrauer court concluded,
as did the Welter court, that the City employees' benefits
vested at the date of hire.
¶144 The terms of employment in the instant case are set
forth in the state session laws and Milwaukee County ordinances
discussed above, just as the terms of employment in Welter and
Rehrauer were set forth in the state session law and City
Charter provisions at issue in those cases. The language of the
state session law at issue in Welter and Rehrauer is in all
49
Id. at 494-95.
50
The precise benefit at issue in Rehrauer was the
firefighters' right to receive the Duty Disability Retirement
Allowance for life rather than for a limited time.
29
No. 2012AP2490.ssa
material respects the same as the language of the state session
laws governing the instant case.
¶145 Welter and Rehrauer are directly on point and should
guide this court's decision in the instant case. The majority
opinion is dismissive of Welter and Rehrauer, characterizing
them as disability pension cases and the instant case and Loth
as health benefit cases. Without further explanation or
citation to any authority, the majority opinion simply asserts
that pension benefits are a different type of benefit than
health insurance, which is "a fluid opportunity for a limited
period of time."51
¶146 Contrary to the majority opinion's assertion, health
insurance, like a pension, can be a retirement benefit. The
instant case is not a Loth case; it is a Welter/Rehrauer case.
Unlike in Loth, Milwaukee County's offer to reimburse its
employees' post-retirement Medicare Part B premiums in the
instant case was not a unilateral offer. Unlike in Loth, the
benefits at issue in the instant case are part of the County's
retirement system.
¶147 Of course, the plaintiffs could not receive post-
retirement benefits upon commencing their employment with the
County. They first had to retire, complying with any enumerated
prerequisites. But not immediately receiving post-retirement
benefits simply does not mean the plaintiffs' right to
reimbursement of their post-retirement Medicare Part B premiums
51
Majority op., ¶50.
30
No. 2012AP2490.ssa
did not vest when they commenced their employment with the
County.
¶148 In sum, the majority opinion is unpersuasive in its
attempt at circumventing the language of the governing state
session laws and the Milwaukee County ordinances. That language
is clear: The plaintiffs have a vested right to reimbursement
of their post-retirement Medicare Part B premiums. The 2011
amendment to MCGO § 17.14(7) constituted a breach of the
plaintiffs' vested benefit contracts and a violation of the
governing state session laws and Milwaukee County ordinances.
The circuit court properly granted the plaintiffs' motion for
summary judgment, and the court of appeals decision reversing
the circuit court's order should be reversed.
¶149 For the reasons set forth, I dissent.
¶150 I am authorized to state the Justice ANN WALSH BRADLEY
joins this opinion.
31
No. 2012AP2490.ssa
1
Wisconsin Federation of Nurses and Health Professionals v. Milwaukee County
Court: Wisconsin Supreme Court
Date filed: 2015-02-12
Citations: 360 Wis. 2d 654, 2015 WI 12, 859 N.W.2d 78, 2015 Wisc. LEXIS 13
Copy CitationsCombined Opinion