School district must fund retiree health benefit years after resignation

He passed the five-year mark. In March 2014, he resigned and moved to another school district. He retired in April 2020 and applied for his benefits. When he asked Clarkstown to pay the promised 85%, the District refused. 

The District’s reasoning was simple: once he resigned, his contract ended, and every obligation inside it ended too. 

The former employee sued for breach of contract in December 2022. Both sides asked the court to decide the case without a trial. In February 2025, a judge in Rockland County ruled for him on liability and denied the District’s request to throw the case out. The District appealed. 

The Appellate Division, Second Department, was not persuaded. It affirmed the lower court, with costs. Nothing in the contract, the court found, ended the retiree-benefit promise when the employment relationship ended. A retiree health contribution, the judges pointed out, can only ever kick in after someone stops working – so reading it to disappear the moment he resigned would leave the promise “illusory.” 

The District had argued the benefit only vested if the employee stayed on and retired straight from the District. The court rejected that. The District, it said, was trying to bolt on a condition the contract never contained, and judges cannot rewrite a deal to add terms that were never there.