The stage is set for a Supreme Court battle over the whether there is even a scintilla (i.e., a tiny trace) of evidence in an employment-related estoppel claims against the City of Columbia. In Bishop v. City of Columbia, 738 S.E.2d 255 (Ct. App. 2013), retirees allege they relied on promises of free post-employment health insurance made by their employer, the City of Columbia. The trial court granted summary judgment. The Court of Appeals reversed. The city has petitioned the South Carolina high court to review the case.
The Court of Appeals considered “whether a private party may rely on the representations of municipal employees for estoppel claims when the authority to make those representations can be traced back to the legislation that granted the municipal authority.” Generally, the elements of promissory estoppel are: (1) a promise unambiguous in its terms; (2) the party to whom the promise is made reasonably relies on it; (3) the reliance is expected and foreseeable by the party who makes the promise; and (4) the party to whom the promise is made must sustain injury in reliance on the promise. To prove a claim of estoppel against a city, the relying party must prove: (1) lack of knowledge and of the means to obtain the knowledge of the truth as to the facts in question; (2) justifiable reliance upon the government’s conduct; and (3) a prejudicial change in position. Similarly, the elements of promissory estoppel are: (1) a promise unambiguous in its terms; (2) the party to whom the promise is made reasonably relies on it; (3) the reliance is expected and foreseeable by the party who makes the promise; and (4) the party to whom the promise is made must sustain injury in reliance on the promise.
The Court of Appeals concluded that retirees in fact “provided a scintilla of evidence that they reasonably relied upon the representations and promises of the City’s human resource employees’ explanations of the health insurance benefits to their detriment. … The City Manager indicated that human resource employees were authorized to inform Retirees about their insurance benefits, and the City’s ordinances support this testimony.” Among other communications, retirees cite a July/August 2004 city newsletter stating
To continue your Health Insurance upon retirement you must meet two criteria: 1) Retire with the South Carolina Retirement System and 2) Be employed by the City of Columbia for 20 (not necessarily consecutive) years. You will be eligible to continue your health insurance at the same rates you are currently paying. Free for single coverage, and the same rates you currently pay for your dependents. (Emphasis supplied).
In it petition, the City of Columbia argued that the Court of Appeals erred in allowing the estoppel claims to survive and cited Ahrens v. State, 392 S.C. 340, 709 S.E.2d 54 (S.C. 2011). In Ahrens, the Supreme Court ruled that even retirees who prejudicially relied on representations by state retirement officials that the retirees would be exempt from making retirement contributions after returning to work could not assert estoppel claims after changes in the law. In replying to the city’s Supreme Court petition in Bishop, however, attorneys for the City of Columbia retirees argued that while Ahrens involved representations made outside the authority of those making the representations, Bishop involves the city manager and human resource staff acting within their authority making representations concerning health insurance. So, we shall watch with interest whether the Supreme Court will allow the City of Columbia to be held responsible for its statements.