Attorneys Michael Ryan and Jonathan Zellner Obtain Judgment for Municipality in Breach of Contract Case

April 21, 2021

On April 19, 2021, Attorneys Michael Ryan and Jonathan Zellner obtained judgment for a municipal client in an action for breach of contract brought by a former employee of the municipality. The plaintiff worked for the municipality for the better part of thirty years and retired in the early 2000’s pursuant to a written separation agreement. In accordance with the separation agreement, the plaintiff began receiving monthly benefits under the defendant’s pension plan several months after he retired. Years later, the municipality discovered that the plaintiff was being overpaid under the pension. The municipality recouped some of the overpayments through reductions to the plaintiff’s monthly benefit, and the plaintiff thereafter made a lump sum payment of the balance.

The plaintiff then sued the municipality and alleged a claim of breach of contract, asserting that the municipality, by its actions, had breached the parties’ separation agreement. The parties agreed to a bench trial of the case on written briefs, stipulating to the pertinent facts and documents. Following receipt of the parties’ trial briefs, the Superior Court, Honorable Dan Shaban, issued a memorandum of decision finding for the municipality. The court found that the municipality’s ability to provide unreduced retirement benefits was contingent upon the pension plan allowing for such benefits. Because the unreduced benefit payments made to the plaintiff were not consistent with the terms of the plan, the court observed that the defendant was obligated to seek return of the overpayments and noted that there was no provision in the separation agreement that prohibited it from doing so. As a result, the court concluded that the defendant did not breach the separation agreement by reducing the plaintiff’s monthly retirement benefit and seeking recovery of the overpayments.