The Military Retiree Medical Care Broken Promise Issue
THE COURT RULED THAT WE HAD A CONTRACT
- The retirees entered active duty in the armed forces and completed at least twenty years service on the good faith belief that the government would fulfill its promises. The terms of the contract were set when the retirees entered the service and fulfilled their obligation. The government cannot unilaterally amend the contract terms now. “In contracts involving the government, as with all contractual relationships, rights vest and contract terms become binding when, after arms length negotiation, all parties to the contract agree to exchange real obligations for real benefits.” Winstar, 64 F.3d at 1546. Because failure to perform a contractual duty when it is due is a breach, see Restatement (Second) of Contracts § 235(2) (1981), the government breached its implied-in-fact contract with the retirees when it failed to provide them with health care benefits at no cost.[3] The district court therefore erred in granting summary judgment to the government and, on the record before us, abused its discretion in denying the retiree’s motion for summary judgment of liability.
- Conclusion
- Accordingly, the judgment of the United States District Court for the Northern District of Florida is reversed and the case is remanded for determination of damages.
- This 8 Feb 2001 decision was appealed by the Government.
- NOTE: [3] In light of Sebastain, we decline to address the retirees’ claim under the Fifth Amendment of the Constitution.