{1} This сase requires us to analyze the legal consequences of a written personnel policy provision enacted by a city ordinance that required the City of Portales (“the city”) to offer to its retiring employees the option of continuing their health care coverage under the city’s group plan at the active employee premium reimbursement rate. The Petitioners (“Retirees”) accepted the city’s offers at the time each of them retired, before the city council enacted an ordinance deleting the retirement insurance provision from the city’s “Personnel Policy Manual” (“the Manual”).
{2} The question before us is whether the city is correct in its position that the later change in the Manual necessarily extinguished any enforceable rights Retirees may continue to have under the terms that were applicable when they retired and accepted the city’s offers. We hold that thе circumstances of this case present genuine issues of material fact as to whether the city’s offers and Retiree’s acceptances constituted binding contracts, and we reverse the district court’s entry of summary judgment in favor of the city.
I. BACKGROUND
{3} In 1994, the Portales city council enacted an ordinance adopting a comprehensive personnel policy manual governing its relationships with its employees. Section 629 of the Manual, “Retiree Health Care Insurance,” provided:
The City of Portales shall offer employees upon their retirement the option of continuing their group health and life insurance coverage through the City’s group plan, provided they are enrolled in the group plan at least one year prior to retirement. The cost of the insurance for the retiree shall be the same as the cost for regular employees. If the City is paying 75% of the premium for employees, the City shall pay 75% of the premium for the retiree and shall be budgeted out of the department from which the employee retires. Retirees shall be responsible for paying their portion of the premium on a monthly, timely basis, in order to avoid the lapse of their policy coverage.
Conditions of the policy coverage shall apply in accordance with the retiree’s age and circumstances on an individual basis.
Between 1995 and 2000, nine of the fourteеn Retirees retired and elected to accept the city’s offer to continue receiving health care benefits and reimbursements on the same terms as active employees.
{4} In 2000, the city council adopted an ordinance opting into the New Mexico Retiree Health Care Act, NMSA 1978, §§ 10-7C-1 to -19 (1990) (“NMRHCA”), an act providing an alternative retiree health care benefit program for government employers and employees, which the Portales сity council expressly had rejected for its employees in 1990. Even after the city’s adoption of NMRHCA, the nine Retirees who had already retired continued receiving health coverage and reimbursements from the city under the Section 629 personnel policy option, which had not yet been repealed. Over the next several years, the remaining five Retirees retired and also accepted the city’s still-continuing offers to receive health cаre coverage under its still-applicable terms.
{5} In 2005, city officials began to reconsider Retirees’ rights to the reimbursement rates embodied in Section 629, in light of increasing health care costs and the city council’s provision in 2000 of alternative retiree health care benefits through NMRHCA. In March, the city manager and the city’s finance and administration committee agreed that Retirees should continue receiving coverage and reimbursements under the terms of Sеction 629. In May, the city council adopted a new ordinance that modified
{6} After elimination of the Section 629 policy, Retirees met with the city attorney and others regarding the continuing rights of those who had previously accepted the city’s Section 629 health insurance offer. After no consensus was reached, the city attorney submitted a resolution to the city council that would hаve interpreted its 2000 ordinance opting into NMRHCA as having rescinded Section 629 and as having terminated the rights of any retirees to its health care reimbursement provisions. The city council, in a divided vote, refused to adopt the resolution. Despite the city council’s rejection of the resolution, the city manager notified Retirees that the city would discontinue reimbursing their health care insurance premiums on the terms contained in former Section 629 and offered to Retirees at the time of their retirement.
{7} Retirees filed suit in the district court of Roosevelt County to determine and enforce their rights. The district court granted summary judgment against Retirees on the ground that no vested or contractual rights could have been created by the terms of the ordinance adopting the health care policies.
{8} The Court of Appeals affirmed the grant of summary judgment in a divided opinion. Beggs v. City of Portales,
{9} This case is now before us on Retirees’ petition for writ of certiorari. Beggs v. City of Portales,
II. STANDARD OF REVIEW
{10} On appeal, the grant of a motion for summary judgment is a question of law that is reviewed de novo. Tafoya v. Rael,
{11} In employing this test, all reasonable inferences from the record are construed in favor of the non-moving party. Garcia v. Underwriters at Lloyd’s, London,
III. DISCUSSION
{12} There are two separate lines of authority that have been argued to be applicable to this case, and each leads to different analyses and different potential results. The city relies on a line of authority that rejects finding personal contractual or vested rights in general statutory policies. See Whitely v. New Mexico State Pers. Bd.,
{13} Retirees, on the other hand, point to decisions recognizing that government employees can rely on the terms of employment contracts with their governmental employers, including implied-in-fact employment contracts based on provisions in personnel manuals and on other representations and conduct of the parties. See Garcia v. Middlе Rio Grande Conservancy Dist., 1996— NMSC-029, ¶ 11,
{14} We conclude that this case is controlled by Garcia and Whittington, and not by Pierce and Whitely. The general policy provisions in the statutes in Pierce and Whitely did not purport to create an employment manual that would control the terms of the employer-employee relationship, as this Court found existed in Garcia.
{15} The record contains substantial evidentiary support for Retirees’ contractual claims, including evidence to support findings (1) that the city council had specifically authorized the comprehensive terms of its ordinance to be considered a “Personnel Policy manual ... to inform employees of policies that affect their employment with the City of Portales” and to “ensure that the personnel system provides ... policies and procedures for ... fringe benefits ... retirement, and other related activities”; (2) that еmployees were required to be provided with, and to sign acknowledgments of receipt of, the Manual; (3) that employees were bound by terms of the Manual; (4) that the city itself felt bound to comply with the terms of its Manual; (5) that city officials made representative admissions by statements and conduct that the city was obligated to continue paying health insurance premiums for those Retirees who had accepted the city’s offer to do so after they had mеt the requirements of the ordinance existing at the time of their retirements; and (6) that city officials made representative admissions that provisions of the Manual became terms of an “employee contract” and that Retirees had a “vested interest” in continued health insurance benefits.
{16} The city’s course of conduct, as alleged over a period of many years, easily distinguishes the present case from Pierce and Whitely. Here, a jury could reasonably conclude that the city not only promised to make an offer for a contract, but actually engaged in a course of conduct over an extended
{17} New Mexico case law has emphasized the importance of precisely that kind of evidence in determining the existence of contractual obligations in public employment contexts. See Garcia,
{18} In arguing against any finding of contractual or vested rights, the city points to a number of factors that would be inconsistent with the creation of the contractual rights Retirees are seeking to enforce. One of those is that the Manual and its creating ordinance provided that “[n]othing shall restrict or prohibit the City Council from making changes in this manual as it determines necessary at any time.” Another is the argument that “it makes no sense that all retirees [who satisfied the Manual’s minimum one-yeаr premium payment requirement before retiring] would receive the same benefit regardless of their years of service, and that they would receive it for life.” While those arguments may be relevant, admissible, and perhaps even ultimately successful in persuading a jury that the city in fact neither intended to nor did enter into the contracts alleged by Retirees, they do not foreclose a fact finder’s decision that the city actually did enter into such contracts, in light of the totality of the evidence that may be presented at trial.
{19} With regard to the city’s reliance on the right to amend its ordinance creating the Manual, it is important to note that nothing in either the Manual or the ordinance contained language stressing that no contractual rights would be created between the city and its employees during the time the Manual’s provisions were in effect, nor that later amendments would be argued to void obligations
{20} Moreover, it is important to remember that this case does not involve simply the interpretation of a change of benefits in an ordinance, it involves also the terms of a personnel manual and statements and actions of the parties surrounding the alleged formation of a contract at the time Retirees allege that they accepted an offer made by their employer in connection with their retirement. As this Court observed in Cockrell v. Board of Regents оf New Mexico State University, “employers are certainly free to issue no personnel manual at all or to issue a personnel manual that clearly and conspicuously tells them employees that the manual is not part of the employment contract____”
{21} The fundamental dispute in this case relates to exactly what, if anything, the city and Retirees contractually agreed to at the time Retirees retired and accepted the city’s offer that was authorized by Section 629 of the Manual, in its direction that the city “shall offer” retiring employees certain health insurance benefits. The city did not appear to dispute Retirees’ evidentiary showings that there was an offer of health benefits of some kind by the city at the time of their retirement, that Retirees manifested their acceptance, that there was consideration in the form of their required participation in the health plan for the minimum one-year period befоre retirement, in declining other employment and staying employed by the city until retirement, and in paying Retirees’ portions of the premiums after retirement. However, the city and Retirees vigorously dispute whether the offer made to Retirees and accepted by them was for permanent health benefits or was for monthly benefits only during the time the city chose to continue providing them, and both sides point to substantial evidentiary support for their respective thеories.
{22} We are persuaded that this record shows that the evidence submitted in opposition to the city’s motion for summary judgment, while not conclusive either way, was sufficient to show the existence of genuine issues of material fact regarding the existence of contractual rights on behalf of Retirees to continue receiving health insurance benefits at the rate they allege they and the city agreed upon at the time of their retirement. Those disputеd factual issues are inappropriate for determination by summary judgment, and they should be submitted to a jury. “Reviewing this evidence in the light most favorable to [Retirees], we conclude that [Retirees are] entitled to have the factual issue of whether an implied contract exists resolved by a fact-finder at a trial on the merits.” Gormley v. Coca-Cola Enters.,
{23} Plaintiffs also relied on a theory of promissory estoppel in support of their complaint and in opposition to the city’s summary judgment motion in the district court. The district court did not separately address that theory at all in relying on Pierce and Whitely in granting summary judgment in favor of the city. The Court of Appeals majority addressed the theory only briefly, holding that it did not have to decide whether promissory estoppel would apply against a city, because its decision on the central contract issue led it to conclude that Retirees could not have legitimately relied on any promises or offers a city agent may have made that, as the court determined, were unauthorized by law. Beggs,
IV. CONCLUSION
{24} Because we determine that there were genuine issues of material fact regarding whether a contract was formed and the scope of its terms, we hold that the district court’s entry of summary judgment was error. We reverse the Court of Appeals and the district court, and we remand this matter to the district court for further proceedings consistent with this opinion.
{25} IT IS SO ORDERED.
Notes
. The New Mexico Retiree Health Care Act contains language that clearly does not crеate contractual rights:
The legislature declares that the expectation of receiving future benefits may be modified from year to year in order to respond to changing financial exigencies, but that such modification must be reasonably calculated to result in the least possible detriment to the expectation and to be consistent with any employer-employee relationship established to meet that expectation. The legislature does not intend for the Retiree Health Care Act to create trust relationships among the participating employees, retirees, employers and the authority administering the Retiree Health Care Act nor does the legislature intend to create contract rights which may not be modified or extinguished in the future; rather the legislature intends to create, through the Retiree Health Care Act, a means for maximizing health care services returned to the participants for their participation under the Retiree Health Care Act.
NMSA 1978, § 10-7C-3(B) (1990).