Budge v. Town of Millinocket
2012 ME 122
| Me. | 2012Background
- Employees and retirees challenge a 2009 reduction in Town health insurance premiums under a longstanding 1987-1991 personnel policy; dispute centers on whether 1991 policy language created contractual rights; Town amended policy in 1999, 2002, 2006, 2009; court reviewed contract, promissory estoppel, and takings claims de novo; Town argued no contract and no estoppel, and no taking since no contractual right; trial court granted summary judgment on three counts; opinion affirms on contract and takings, reverses on promissory estoppel for further factual development; Town’s charter limits authority of town officials to bind the town; evidence over whether promises were ratified constitutes genuine issues of material fact; language prior to 1991 suggested a policy, not binding rights, but later amendments and conduct may support estoppel in the trial court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 1991 policy created contract rights | Budge argues 1991 language bound Town to 100% retiree coverage | Town contends no contractual intent; amendments show policy only | No contractual rights established by 1991 language |
| Whether promissory estoppel applies to retirees’ benefits | Promissory estoppel due to promises by Town officials and 18-year premium payments | Official promises not binding; no authority or ratification shown | Promissory estoppel claim not resolved at summary judgment; genuine issues of material fact exist to be decided later |
| Whether there was an unconstitutional taking | Reduction in retiree benefits constitutes taking | No contractual right; no taking without compensation | Takings claim rejected due to lack of contractual right |
Key Cases Cited
- Spiller v. State, 627 A.2d 513 (Me. 1993) (statutory rights not presumed to create contracts without express intent)
- Chapman v. Bomann, 381 A.2d 1123 (Me. 1978) (promissory estoppel adopted in Maine; caution with government estoppel)
- Sirois v. Town of Frenchville, 441 A.2d 291 (Me. 1982) (agency/ratification requirements; official authority needed)
- Otis v. Stockton, 76 Me. 506 (Me. 1884) (ratification of promises requires official action by municipality)
- Richmond v. Johnson, 53 Me. 437 (Me. 1866) (require ratification by town to bind government)
- Mason v. City of Augusta, 927 A.2d 1146 (Me. 2007) (ratification and executive action can bind municipality)