Plaintiff Pontiac Police
& Fire Retiree Prefunded Group Health & Insurance Trust was organized
to pay healthcare benefits for retirees from the Pontiac fire and police departments. The trust agreement required the defendant
City of Pontiac to make annual contributions to the trust. This case concerns Pontiac’s contribution to
the trust for the fiscal year July 1, 2011 to June 30, 2012 in the amount of
$3,473,923. Pontiac, which was in
financial straits and operating under an emergency manager, did not make the
payment by June 30, 2012. Rather, the emergency
manager issued Executive Order No. 225 (EO 225) that amended the trust
agreement to remove Pontiac’s obligation “to continue to make contributions” to
the trust. The plaintiff trust promptly
sued. The circuit court granted summary
disposition to Pontiac and dismissed the case.
In a published per curiam opinion, the Court of Appeals reversed,
holding that the language of the EO did not change Pontiac’s obligation to contribute
to the trust for the 2011-2012 fiscal year.
Pontiac appealed to the Supreme Court, arguing that the Court of Appeals
misinterpreted EO 225 and did so based on an argument that the plaintiff trust
never advanced. On September 30, 2015,
the Supreme Court ordered oral argument on the application, to address the
meaning and applicability of the language “to continue to make contributions”
in EO 225.