In a recently concluded case, Parr Richey attorneys representing Clark County REMC, a southern Indiana rural electric utility, were successful in persuading the Indiana Supreme Court to reverse earlier decisions of the trial court and Court of Appeals. The case involved four former REMC directors who claimed the REMC breached a contractual obligation to provide them with free, lifetime health insurance benefits after their board service ended. Their claim was based on a longstanding company policy that obligated the company to provide free health insurance benefits to former directors who met certain age and years of service requirements before leaving the board.
After the company ended that policy in 2018, the affected former directors sued. Both the trial judge and intermediate appellate court held that that the policy constituted a contractual obligation of the REMC which had been breached. But in an issue of first impression, the Indiana Supreme Court unanimously held the policy did not form an enforceable contract and, as with other policies of the company, it was subject to change or termination at the will of the board. Hence, no benefits were due after the policy’s termination.
The Parr Richey team who worked on the case included Kent Frandsen, Katie Sheets, Erin Borissov, and John Kinney. Click here to read the Court’s opinion.