author: SUSAN H. BLACK, District Judge.

text:
    Gail S. BRILL, James R. Whitley, III, and Ellis National Bank of Jacksonville, a national banking association, successor in interest to Jacksonville National Bank, as Co-Trustees of the Testamentary Trusts of Barry L. Green, deceased, Plaintiffs, v. INDIANAPOLIS LIFE INSURANCE COMPANY, a mutual insurance company chartered under the laws of Indiana, Defendants.
    No. 84-1-Civ-J-14.
    United States District Court, M.D. Florida, Jacksonville Division.
    March 14, 1985.

      William E. Kuntz and Timothy W. Volpe, Smith & Hulsey, Jacksonville, Fla., for plaintiffs.
    Lawrence J. Hamilton, II, and Dana G. Bradford, II, Jacksonville, Fla., for defendants.
   OPINION AND ORDER

SUSAN H. BLACK, District Judge.

This case came on to be heard on cross-motions for summary judgment. The defendant’s motion was filed on October 2, 1984, and the plaintiffs responded in opposition on October 23, 1984. The plaintiffs’ Motion for Summary Judgment was filed on October 3, 1984, and the defendant responded in opposition on October 15, 1984. A hearing was held on these motions on December 21, 1984.

This action was commenced by plaintiffs to recover as beneficiaries under two policies insuring the life of Barry L. Green. The policies, numbers 0846982 and 1005892, were issued by Indianapolis Life Insurance Company [hereinafter “defendant”]. Each policy contains a clause providing that the accidental death benefit to be paid will be doubled:

If such proof also shows that the death was the result of an injury sustained while the insured was a fare-paying passenger in a public conveyance then being operated by a licensed common carrier for passenger service____

The facts relevant to the decedent’s death are not disputed. The only issue remaining for the Court’s determination is whether the accident falls within the purview of the above-stated clause requiring that the defendant pay the plaintiffs double the accidental benefit payments provided in the policies.

FINDINGS OF FACT

At the hearing held on these motions, the parties agreed to the following facts:

1. On July 29, 1982, Mr. Barry L. Green [hereinafter “decedent”] died when the helicopter carrying him and three of his business colleagues, all executives with The Charter Company [hereinafter “Charter Company”] or its wholly-owned subsidiary, Charter Oil Company [hereinafter “Charter Oil”] crashed near Galway, Ireland.

2. The helicopter was to transport the decedent and his colleagues from the Ballynahinch Castle Hotel to the Shannon Airport. At the airport, they were to board a private company plane for a business flight to France.

3. The helicopter was owned by Irish Helicopters Ltd. [hereinafter “IHL”] and the pilot was an employee of IHL.

4. IHL is the sole helicopter air service company in Ireland and is a subsidiary of the national airline of Ireland.

5. IHL is licensed by the Irish government as a Class C authorization holder to carry passengers, cargo, and mail. As a Class C, IHL can provide only non-scheduled service, passengers receive no ticket and their baggage is not checked. The Irish government has the authority to regulate charges but has not done so. See Transcript of Motion for Summary Judgment [hereinafter “Tr.”] at 21-22.

6. IHL charges its customers a flat rate per flying hour. Flying time begins when the helicopter leaves IHL’s hangar and ends when the helicopter returns to IHL’s hangar.

7. IHL regularly advertises its charter flight services to the public including advertisements in the Irish equivalent of the yellow pages, business and trade journals, as well as newspapers of general circulation.

8. Charter Company verbally leased the helicopter through LUQA, Inc., its wholly-owned subsidiary in charge of providing airplane and other travel related services to Charter Company.

9. The service provided to the decedent was not a part of IHL’s contract business but was a part of its general passenger transportation business. (Tr. at 9-10). An example of IHL’s contract business would be the lease of a helicopter for several months. Id.

10. On July 28,1982, the evening before the flight, the helicopter had been piloted from Shannon Airport carrying one passenger. The pilot and the aircraft remained at Ballynahinch Castle Hotel overnight in anticipation of the early morning flight the next day.

11. IHL was to provide helicopter service for the specific flights to the airport (including picking the decedent up on his return the same day from France for transportation back to the hotel) and when each flight concluded, the helicopter was free to service other customers.

12. The helicopter was not hired for a specific length of time but for the transportation already reviewed.

CONCLUSIONS OF LAW

The Court will examine these undisputed facts in the context of the provisions of the double accident benefit clause to determine whether the plaintiffs are entitled to the relief they seek. In order to fall within the purview of the clause, the plaintiffs must show that at the time of the accident: (1) the decedent was a fare-paying customer, (2) the IHL helicopter was being operated as a public conveyance, and (3) the IHL helicopter was a common carrier. See Exhibit A to plaintiff’s Complaint at paragraph 2.

Fare-Paying Customer

The first issue to be addressed in determining whether this accident falls within the purview of the double accident benefit clause is whether the decedent was a fare-paying customer of IHL at the time of the accident. The defendant’s position is that under the agreement with IHL, the charge for the flight was computed solely on the number of flying hours and the size of the helicopter, not on a per passenger basis. Since IHL did not charge on an individual basis for its service, the defendant concludes that a “rate” was paid to IHL for the flight rather than a “fare.”

The Court agrees with plaintiffs that the defendant reads the term fare too narrowly. Terms used in an insurance policy are to be construed in light of the skill and experience of ordinary people. Morrison Assurance Company v. School Board of Suwanee County, 414 So.2d 581 (Fla. 1st DCA 1982); see also Midwest Mutual Insurance Company v. Santiesteban, 287 So.2d 665 (Fla.1973). In construing terms appearing in insurance policies, Florida courts commonly adopt the meaning of words contained in legal and non-legal dictionaries. See Mikos v. Early, 453 So.2d 402 (Fla.1984).

Fare is defined in Webster’s Third International Dictionary as “[t]he price charged to transport a person or persons____” Id. at 824. Likewise, Webster’s Third New Twentieth Century Dictionary, Unabridged Second Edition defines fare as “the sum paid or due for transportation____” Id. at 664. Construed in the light of the skill and experience of an ordinary person, the term fare as it appears in the clause of this policy, without further limitation, includes the pay arrangement in this case.

The helicopter flight was not gratuitously provided to the decedent. The Court is aware that an individual whose business flight is arranged and paid for by his employer will often board an air carrier without having actually handed over ticket fare. When a business concern arranges its employee’s flight, any combination of pay arrangements may be made, depending on such variables as prior dealings with the particular carrier and group and other discount rates. See, e.g., O’Connell v. Mutual of Omaha Insurance Company, 6 111. App.3d 698, 286 N.E.2d 773 (1972). The clear import of the requirement that the insured be a fare-paying customer is that a sum be paid or promised to the air carrier in exchange for the transportation. The Court finds that in this case the decedent was to be transported to Shannon Airport in IHL’s helicopter as a result of a sum having been paid or promised to IHL; therefore, the decedent was a fare-paying customer.

Public Conveyance

The defendant relies on Greyhound Rent-A-Car, Inc. v. Carbon, 327 So.2d 792 (Fla. 3d DCA), cert. denied, 336 So.2d 1182 (Fla.1976), to support its contention that the double accident benefit clause is not applicable because the IHL helicopter was not a public conveyance. In Carbon, a couple were injured while driving a rented automobile. They sued the car rental agency under a Florida statute which provided personal injury benefits. The statute excluded recovery for injuries involving a motor vehicle used as a public conveyance. The trial court having found the statute applicable granted summary judgment and the car rental agency appealed.

In determining whether the rental ear was a public conveyance, the appellate court referred to the definitions given the term by legal authorities. Based upon these definitions, the court concluded that the rental car was not a public conveyance “since it was not subject to indiscriminate use by the general public without limitation to particular persons, particular times or special terms.” Id. at 793. If the Court were to accept this ruling on its face, then even a taxi service would not be a public conveyance.

The United States Supreme Court in Terminal Taxi Cab Company v. Kutz, 241 U.S. 252, 36 S.Ct. 583, 60 L.Ed. 984 (1916), reviewed a taxi service which catered solely to certain hotels at specific times, limiting its service to the hotel’s guests. The Supreme Court held that the public character of the taxi service was not removed by the operation’s limitation to certain hotel guests. The Supreme Court distinguished this service from a car rental agency, stating that the passenger of the taxi was in “control” of the vehicle “as to contents, direction and time of use, although not so far as indicated, in such a sense as to make the driver of the machine his servant.” Id. at 254, 36 S.Ct. at 584.

The focus on control as the determinative factor in defining a public conveyance is evident in Gillespie v. Traveler’s Insurance Company, 486 F.2d 281 (9th Cir.1973). Mr. Gillespie was killed while a passenger on a helicopter leased by his employer. The arrangement was pursuant to the helicopter company’s “contract” service as opposed to its air taxi service. In accordance with the written lease agreement, the plaintiff’s employer had exclusive use of the helicopter for a two-month period with an option to extend. The employer provided the helicopter’s fuel and lubrication as well as room and board for the pilot. The appellate court relied on the exclusivity of the lessee’s use of the helicopter for the two-month period provided in the written lease agreement as its basis for finding the helicopter was not in use as a public conveyance at the time of the accident. Id. at 284.

The IHL helicopter in this case was not leased pursuant to a formal, written lease agreement for a specified period of time as was the case in Gillespie. In fact, the helicopter in this case was not “leased” at all. IHL was paid to transport the decedent and his colleagues from Ballynahinch Castle Hotel to Shannon Airport. Before and after that trip IHL was free to transport whomever it chose under IHL’s terms. This arrangement is analogous to the taxi service distinguished in Gillespie, rather than the exclusive “contract” service which places the air carrier at the disposal of the lessee for an extended period of time. The facts agreed upon show that IHL offered “contract” service in addition to its air taxi service and that the decedent’s flight was a part of this latter service.

The Court finds upon its review of the record in this case that neither the decedent nor his employer exercised the degree of exclusive control over IHL’s helicopter which would warrant removal of the helicopter from the realm of a public conveyance. The service arranged between the two parties did place limitations on IHL’s operation; however, the limitations as to time, place and passengers were those expected and necessary to effecting any taxi service. For purposes of that one, fateful flight to Shannon Airport, the decedent and his employer were in “control” of the helicopter as to contents, direction and time of use. Their control was not so pervasive, however, as to remove the public character from IHL’s service. The Court finds that the helicopter was being operated as a public conveyance at the time of the accident.

Common Carrier

As a general rule, air charter or taxi services have been judicially defined as common carriers. See Speiser, Light Aircraft Litigation, 13 AmJur.Trials § 15, at 579; Krause, Helicopter Accident Litigation, 22 AmJr.Trials § 42, at 612. The preeminate Florida case that defines common carrier states that a common carrier (1) holds itself out to the public generally for the transportation of persons or property for compensation, (2) undertakes to carry for all people indifferently, and (3) by its public profession or holding out by word or by course of conduct, represents itself as serving the public. Ruke Transport Lines, Inc. v. Green, 156 So.2d 176 (Fla. 1st DCA 1963).

The Court will briefly discuss the first and third elements, finding that upon a review of the facts in this case these elements have been met. IHL publicly advertises its air services in the Irish equivalent of the yellow pages, business and trade journals, as well as newspapers of genera] circulation. IHL is licensed by the Irish government as a Class C authorization holder able to carry passengers, cargo and mail for a fee on a non-scheduled basis. Significantly, IHL is the sole helicopter service in Ireland and is a subsidiary of the national airline of Ireland. Having found these two elements of a common carrier are present, the Court will examine whether IHL undertakes to carry for all people indifferently.

Relying on Ruke, the defendant alleges that the service provided the decedent was so particularly focused to meeting his needs that IHL at the time of the fateful flight was a contract rather than a common carrier. In Ruke, the state appellate court was presented with the issue of whether a trucking company was a common carrier so as to avail itself of quoting Circle Express Company v. Commerce Commission, 249 Iowa 651, 658, 86 N.W.2d 888, 893 (1957). Therefore, the Court finds that the IHL helicopter meets the three characteristics of a common carrier as set forth in Ruke.

In sum, this case is one of first impression, involving a transportation service reflecting the changes in our society and the business community. The faster pace of our lives has created a public demand for a quick, accessible means of getting about. The traditional taxi service has been unable to meet this demand in every circumstance. When it cannot, the public has taken to the air via air taxis which, though different in form and method than the taxi cab, provide the same type of service — transportation that caters to the individual passenger. Air taxis are increasingly becoming an integral part of our daily lives, transporting people between and within cities, airports and outlying areas. The helicopter in this case was servicing the public as both a common carrier and a public conveyance. To judicially find otherwise would be to ignore the realities of today’s “public” transportation.

For the reasons stated in this Opinion, it is

ORDERED:

1. That plaintiffs’ Motion for Summary Judgment, filed herein on October 3, 1984, is granted.

2. That defendant’s Motion for Summary Judgment, filed herein on October 2, 1984, is denied.

3. That the Clerk of the Court shall enter summary judgment for the plaintiffs.


source: Caselaw Access Project

author: TOM S. LEE, District Judge.

license: Public Domain

text:
    Lynette PERRY and Karen Perry, Plaintiffs, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.
    Civ. A. No. J84-0192(L).
    United States District Court, S.D. Mississippi, Jackson Division.
    March 15, 1985.

      W. Scott Welch, III, Butler, Snow, O’Mara, Stevens & Cannada, Jackson, Miss., for plaintiffs.
    William M. Dalehite, Steen, Reynolds, Dalehite & Currie Firm, Jackson, Miss., for defendant.
   MEMORANDUM OPINION AND ORDER

TOM S. LEE, District Judge.

This cause is before the court on the motion of the plaintiffs for partial judgment on the pleadings, and the court has considered the memoranda of authority with attachments submitted by both parties. On March 16, 1983, Darwin D. Perry, his wife, Sally Ann Perry, and his stepson, Roger Legg, were driving a rented vehicle in Yalobusha County, Mississippi and were involved in a collision with an automobile driven by Terry Van Goss, an alleged uninsured motorist. Darwin D. and Sally Ann Perry died and Roger Legg suffered injuries as a result of the accident. Lynette Perry and Karen Perry, plaintiffs and daughters of Darwin D. Perry, contend in their motion for summary judgment that they are entitled to stack uninsured motorist coverage of four policies issued by State Farm Mutual Automobile Insurance Company (State Farm) in which Darwin D. Perry was the named insured. The defendant argues that California law is applicable and does not permit the stacking of uninsured motorist coverage.

The plaintiffs argue that Mississippi law is applicable under the terms of the policy. The policy states:

If an insured under the liability coverage is in another state or Canada and, as a non-resident, becomes subject to its motor vehicle compulsory insurance, financial responsibility or similar law:
(a) the policy will be interpreted to give the coverage required by law; ...

A motor vehicle liability policy is defined in the Mississippi Motor Vehicle Safety Responsibility Law (Safety Responsibility Law) as:

An owner’s or an operator’s policy of liability insurance, certified as provided in section 68-15-39 or section 63-15-41, as proof of financial responsibility, and issued, except as otherwise provided in section 63-15-41, by an insurance company duly authorized to write motor vehicle liability insurance in this state, to or for the benefit of the person named therein as the insured.

Miss.Code Ann. § 63-15-43(1) (Supp.1984). Section 63-15-11(1) and (2) provides the circumstances under which a person is required to furnish proof of financial responsibility. Section 63-15-11(4) makes the requirements of subsections 1 and 2 inapplicable to persons who, at the time of the accident, have a liability policy in effect. Accordingly, a policy issued prior to an accident is not a “motor vehicle liability policy” as defined by section 63-15-43(1), which is limited to those policies issued following an accident and certified as proof of financial responsibility.

In Universal Underwriters Insurance Company v. American Motorist Insurance Company, 541 F.Supp. 755 (N.D. Miss.1982), the court stated that all insurance policies, regardless of the date of issuance, are subject to the Safety Responsibility Law. The court drew inferences from Mississippi Supreme Court cases which, while not unreasonable, are, in the opinion of this court, in conflict with the language of Miss.Code Ann. § 63-15-43. The Universal Underwriters court considered statements in Vaughn v. State Farm Mutual Automobile Insurance Company, 359 So.2d 339 (Miss.1978); United States Fidelity and Guaranty Company v. Stafford, 253 So.2d 388 (Miss. 1971); and State Farm Automobile Insurance Company v. Moore, 289 So.2d 909 (Miss.1976), wherein the Mississippi Supreme Court found the Safety Responsibility Law to be applicable. The Universal Underwriters court concluded that the policies in question were not certified even though the Mississippi Supreme Court did not indicate whether they were certified in any of the cases cited. This court is hesitant to draw inferences from a court’s silence that appear to be in conflict with the plain language of a statute. Accordingly, this court is of the opinion that the plaintiffs’ decedent was not subject to the Safety Responsibility Law and, accordingly, Mississippi law is not applicable under the terms of the policy.

The Mississippi Supreme Court has adopted the “center of gravity test” for resolving conflict of laws questions. See Bluebird Body Company v. Ryder Truck Rental, Inc., 583 F.2d 717, 723 (5th Cir.1978). In Mitchell v. Craft, 211 So.2d 509 (Miss.1968), two Mississippi residents were killed when their automobiles collided in Louisiana. The court noted that the law of the forum is presumed to apply absent an express showing that “non-forum contacts are of greater significance.” Id. at 512. Application of the law of the place of injury, the traditional rule, may produce predictable results, but often bears little relationship to a particular case. Id. at 513. Accordingly, the court cited with approval general principles set out in sections 145 and 6 of the Restatement Second Conflict of Laws (Proposed Official Draft, adopted May 24, 1968) which provide:

§ 145: THE GENERAL PRINCIPLE

(1) The rights and liabilities of the parties with respect to an issue in tort are determined by the local law of the state which, as to that issue, has the most significant relationship to the occurrence and the parties under the principles stated in § 6.
(2) Contacts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include:
(a) the place where the injury occurred,
(b) the place where the conduct causing the injury occurred,
(c) the domicil, residence, nationality, place of incorporation and place of business of the parties, and
(d) the place where the relationship, if any, between the parties is centered. These contacts are to be evaluated according to their relative importance with respect to the particular issue.

§ 6: CHOICE OF LAW PRINCIPLES.

(1) A court, subject to constitutional restrictions, will follow a statutory directive of its own state on choice of law.
(2) When there is no such directive, the factors relevant to the choice of the applicable rule of law include
(a) the needs of the interstate and international systems,
(b) the relevant policies of the forum,
(c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue,
(d) the protection of justified expectations,
(e) the basic policies underlying the particular field of law,
(f) certainty, predictability and uniformity of result, and
(g) ease in the determination and application of the law to be applied.

In Mitchell, “Louisiana’s sole relationship with the occurrence is the purely adventitious circumstance that the collision happened there.” 211 So.2d at 513. The relationship with Mississippi, however, was substantial, since “both decedents were domiciled in Mississippi, their estates are being administered here, and whatever expectations they might have had were centered in Mississippi.” Id. at 510. Accordingly, Mississippi law was applicable.

In Vick v. Cochran, 316 So.2d 242 (Miss.1975), an Alabama resident brought suit against another Alabama resident for injuries resulting from an automobile accident which occurred in Mississippi. The court, after considering the factors set out in Mitchell, held that the ease’s “center of gravity” was certainly Alabama. 316 So.2d at 246. The court noted that, “the interstate trip on which they were engaged began and was to end in the State of Alabama.” Id. Additionally, the relationships of the parties “were established under agreements ... arrived at in the State of Alabama.” Id. Mississippi’s sole connection with the case, the location of the accident, was “ ‘purely adventitious.’ ” Id., quoting Mitchell, 211 So.2d at 513.

Analysis of the instant case must begin with the presumption stated in Mitchell that the law of the forum is applicable unless “non-forum contacts are of greater significance.” Mitchell, 211 So.2d at 512. In this case, it is clear that the occurrence of the accident in Mississippi is “purely adventitious” and, because California’s contacts are more significant than those of Mississippi, California law should be applied. The plaintiffs’ decedent was a resident of California and his relationship with the defendant arose from an agreement entered into in California, where the stacking of policies was not a reasonable expectation for either party. As in Vick, the plaintiffs’ decedent’s excursion to Mississippi began and was to end in the non-forum state of California.

The plaintiff argues that application of California law will contravene the public policy of Mississippi. In Mitchell, the decedents were Mississippi residents and any recovery would be for the benefit of their estates in Mississippi. The court stated: “This court is especially concerned with the protection of its injured domiciliaries and their families and the distribution of its domiciliaries’ estates____ The comparative negligence statute of this State has been effectively administered for many years and we have an interest in applying it to Mississippi residents.” 211 So.2d at 514. This Erie -bound court likewise has an interest in applying this state’s uninsured motorist laws regarding stacking to Mississippi residents. The opportunity to do so, however, is not present in the instant case since the plaintiffs are not residents and their decedent was not a resident of Mississippi. Accordingly, public policy does not require the application of Mississippi law and this court concludes that California law governs.

The defendant argues that stacking of uninsured motorist coverage is not available under California law. The plaintiffs cite California Casualty Indemnity Exchange v. Deardorff, 203 Cal.Rptr. 725,157 Cal.App.3d 548 (4 Dist.1984), a California case wherein stacking was allowed. In Deardorff, California Casualty Indemnity Exchange issued a liability policy with uninsured motorist coverage on four automobiles owned by the Deardorffs. The Deardorffs were involved in an accident in Minnesota and sought to stack uninsured motorist coverage. The court acknowledged that stacking is prohibited under California law but found that the defendant had incurred an obligation to comply with Minnesota law, which allows stacking, by executing a Minnesota No-Fault Certification form. Id. at 726-27, 157 Cal.App.3d 548. Additionally, the policy’s out of state clause provided that the “defendants would be covered to the extent required by the law of [another] state.” Id. at 727, 157 Cal.App.3d 548. The Deardorffs became subject to the Minnesota No-Fault Automobile Insurance Act and, pursuant to the terms of the policy, were entitled to stack coverage under Minnesota law. Darwin D. Perry, however, was not subject to the Mississippi Motor Vehicle Responsibility Law and stacking, consequently, is not available.

For the reasons expressed hereinabove, it is hereby ordered that the plaintiffs’ motion for partial judgment on the pleadings is denied and that the defendant’s motion for a ruling that California law be applied in this case is granted.

      . Lynette Perry is an adult citizen of Texas and Karen Perry is an adult citizen of California.

      . State Farm has its principal place of business in Illinois.

      . The court also applied sections 175 and 164 of the Restatement which deal with specific issues in Mitchell. Section 175 applies to the right of action for death, and section 164, to contributory fault. The applicable law of contributory fault was of primary significance because Mississippi had a comparative negligence statute, whereas under Louisiana law, contributory negligence barred recovery. Mitchell, 211 So.2d at 510.

      . In Broadman v. United Services Automobile Association, 742 F.2d 847 (5th Cir.1984), the plaintiff sought a declaratory judgment that uninsured motorist coverage existed and could be stacked following an automobile accident in Mississippi. The district court determined that the “center of gravity” was Mississippi and not Nebraska. The Fifth Circuit Court of Appeals certified to the Mississippi Supreme Court questions regarding the applicability of §§ 188 and 193 of the Restatement (Second) of Conflict of Laws.
      Section 188 provides: Law Governing the absence of Effective Choice by the Parties
      (1) The rights and duties of the parties with respect to an issue in contract are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the transaction and the parties under the principles stated in § 6.
      (2) In the absence of an effective choice of law by the parties (see § 187), the contracts to be taken into account in applying the principles of § 6 to determine the law applicable to an issue include:
      (a) the place of contracting,
      (b) the place of negotiation of the contract,
      (c) the place of performance,
      (d) the location of the subject matter of the contract, and
      (e) the domicil, residence, nationality, place of incorporation and place of business of the parties.
      These contacts are to be evaluated according to their relative importance with respect to the particular issue.
      (3) If the place of negotiating the contract and the place of performance are in the same state, the local law of this state will usually be applied, except as otherwise provided in §§ 189-199 and 203.
      Section 193 provides: Contracts of Fire, Surety or Casualty Insurance
      The validity of a contract of fire, surety or casualty insurance and the rights created thereby are determined by the local law of the state which the parties understood was to be the principal location of the insured risk during the term of the policy, unless with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6 to the transaction and the parties, in which event the local law of the other state will be applied.
      It is the opinion of this court that, if presented with the issue, the Mississippi Supreme Court would, as it has in the past, look “to Restatement (Second) of Conflict of Laws for guidance.” Spragins v. Louise Plantation, Inc., 391 So.2d 97 (Miss.1980). It is clear that, under the principles of §§ 188 and 193 of the Restatement, California law is applicable in the case sub judice. It is also apparent that California is the "center of gravity” pursuant to the analysis of the Mississippi Supreme Court in earlier cases.


author: NANGLE, Chief Judge.

text:
    Joan LAWRENCE, Plaintiff, v. Carl L. WESTERHAUS, et al., Defendants.
    No. 84-1840C(1).
    United States District Court, E.D. Missouri.
    March 20, 1985.

      Raymond Howard, St. Louis, Mo., for plaintiff.
    Robert Stewart, St. Louis, Mo., for defendants.
   MEMORANDUM

NANGLE, Chief Judge.

This matter is before this Court on de- ■ fendants’ motion for summary judgment. This is an action under Section 502 of the Employee Retirement Income and Security of 1974 (ERISA), to set aside the decision by defendants to deny plaintiff disability pension benefits. The defendants are the members of the Board of Administration of the Pension Plan. For the reasons to follow, defendants’ motion is granted and the complaint, therefore, is dismissed.

A. STANDARD OF REVIEW

This Court is limited in its review of the prior proceedings to whether defendants’ decision was arbitrary, capricious or an abuse of discretion. Bueneman v. Central States, Southeast and Southwest Areas Pension Fund, 572 F.2d 1208, 1209 (8th Cir.1978); Phillips v. Kennedy, 542 F.2d 52, 55 (8th Cir.1976). Plaintiff contends that the Board’s decision was arbitrary and capricious for five separate reasons. Defendants now present much evidence including affidavits and the record below to refute plaintiff’s allegations. Plaintiff in contrast has submitted little in rebuttal.

Under Rule 56 of the Federal Rules of Civil Procedure, a movant is entitled to summary judgment if he can “show that there is no genuine issue as to any material fact and that [he] is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). See also Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962). In passing on a motion for summary judgment, a court is required to view the facts and inferences that may be derived therefrom in the light most favorable to the non-moving party. Butter v. Buechler, 706 F.2d 844, 846 (8th Cir.1983); Vette Co. v. Aetna Casualty and Surety Co., 612 F.2d 1076, 1077 (8th Cir.1980). The burden of proof is on the moving party and a court should not grant a summary judgment motion unless it is convinced that there is no evidence to sustain a recovery under any circumstances. Butter, 706 F.2d at 846. However, under Rule 56(e), a party opposing a motion for summary judgment may not rest upon the allegations of his pleadings but “must set forth specific facts showing that there is a genuine issue for trial.” Fed.R.Civ.P. 56(e). See also 10A Wright, Miller and Kane, Federal Practice and Procedure: Civil 2d, § 2739 (1983).

B. INSUFFICIENCY OF EVIDENCE

Plaintiff’s first allegation of error in the Board’s proceedings is that “[n]o witness refuted [her] evidence that she was mentally ill and unable to perform gainful employment.” Defendants have presented extensive evidence to refute this charge, however.

Plaintiff claims she is entitled to disability benefits under the terms of the Pension Plan because she is a manic depressive. The Plan provides such benefits to participants “found to be wholly and permanently prevented from engaging in any occupation or employment during the remainder of his life.” Article 5, § 3(b) of the Lincoln St. Louis Pension Plan For Certain Of Its Hourly Employees. In addition, disability benefits are available under the Plan for only those employees who have completed ten years of service with the employer before commencement of the permanent disability. Finally, the Plan provides that an appeal from the denial of such benefits can be taken by addressing a written communication to one of the Company and one of the Union members of the Board. Plaintiff failed to follow this procedure.

Defendants first argue that they were justified in denying plaintiffs claim because she did not adhere to the required procedure for taking an appeal. Plaintiff did not file the requisite communications with the Company and Union members of the Board. Contrary to plaintiffs assertion, the Board did rely upon this procedural defect in denying plaintiff benefits. This Court, therefore, concludes that defendants’ decision to deny benefits to plaintiff was not arbitrary or capricious for this reason alone.

The Board, however, went on to address the substantive merits of plaintiff’s claim. Thus, this Court shall follow suit. Defendants maintain that plaintiff was not entitled to benefits because she had not completed ten years of service before the onset of her disability. This conclusion was drawn from a finding by an Administrative Law Judge that plaintiff was entitled to Social Security Disability Benefits for her disability which commenced on April 1, 1976. Yet, plaintiff has submitted a letter from defendant Westerhaus wherein such defendant acknowledges that plaintiff had been employed with the Company for ten years and two months. This Court concludes that a question of fact remains as to the commencement of plaintiff’s disability, and thus refrains from relying upon this ground in granting the motion.

Finally, defendants argue that plaintiff’s allegation that the record contains insufficient evidence in support of the Board’s finding is false. The Court agrees. Defendants have presented much evidence which was before the Board, including statements from plaintiff’s own psychiatrist that plaintiff’s mental condition did not necessarily preclude her from future gainful employment. The sole question before the Board was whether plaintiff’s disability served as a permanent bar to her employment capabilities. Plaintiff has not discredited defendants’ evidence or produced anything to the contrary. This Court has examined the record before the Board, as well as the evidence presented by the parties, and concludes that no question of fact remains as to the arbitrariness or capriciousness of defendants’ decision. All of the medical evidence leads to one conclusion: that the hope of future employment for plaintiff is by no means extinguished by her disability. Conversely, the record is devoid of medical evidence that plaintiff’s mental condition is permanently debilitating. Under Torimino v. United Food and Commercial Workers International Union Industry Pension Fund, 548 F.Supp. 1012, 1014 (E.D.Mo.1982), aff'd, 712 F.2d 882 (8th Cir.1983), where “[tjhere is medical evidence supporting the Trustee’s decision, it is not arbitrary, capricious or an abuse of discretion.” Because plaintiff has not come forward with any evidence to inflict a question of fact into defendants’ strong showing, this Court concludes that defendants are entitled to summary judgment on plaintiff’s first allegation regarding the arbitrariness and capriciousness of the Board’s decision.

C. PREJUDICIAL EVIDENCE

Plaintiff’s second allegation is that the Board’s decision was arbitrary and capricious because defendants admitted into evidence their own exhibits which were irrelevant, immaterial, incompetent and hearsay. Defendants have submitted the objectionable exhibits to the Court, and this Court concludes that they are not so objectionable as to render the decision arbitrary or capricious. The technical rules of evidence do not apply to hearings before the Board. The Board members attest via affidavits that two such exhibits were not relied upon in the decision-making process. Two additional exhibits are Interrogatory answers, while the remainder of the exhibits were extracted from plaintiff’s personnel file, and are hence business records. This Court has examined the contested exhibits and agrees with defendants that none is so objectionable as to taint the Board’s decision.

D. RACE AND GENDER DISCRIMINATION

Plaintiff’s next allegation of error is that the Board’s decision was motivated by racial and gender concerns. Defendants, however, have attested to the Court in their affidavits that neither plaintiff’s race nor sex was mentioned during the deliberations. Moreover, each of the Board members affirm that they did not subjectively consider plaintiff’s sex or race in arriving at their decision. Plaintiff has not come forward with a single iota of evidence to refute these statements. Plaintiff merely points to the fact that the Board was composed of four “middle-aged” white males. This factor, standing alone, is not evidence of discrimination. In this Court’s judgment, plaintiff has not presented evidence to even create a question of fact concerning the allegations of discrimination.

Defendants argue that plaintiff has not preserved its claim of discrimination. In reading the hearing transcript, however, the Court takes note that plaintiff did not raise the question of the potential bias of defendant members, given their race and gender.

E. THE PRESENCE OF DEFENDANTS’ ATTORNEY AT THE HEARING

Plaintiff additionally attacks the decision on the basis that defendants’ attorney, who had represented the Board against plaintiff for a number of years preceding the hearing, was present during the hearing, advised defendants and recommended rulings to defendants. The affidavits submitted by defendants combined with the hearing transcript, however, reflect that said attorney did not render any legal advice to the Board members during the hearing. The same evidence likewise reveals that the attorney did not participate in the Board’s deliberations or recommend any particular outcome to the Board. Plaintiff has not produced any counter evidence to interject a question of fact into the current proceedings. Plaintiff has elected to stand upon her pleadings, which she cannot do under Rule 56. Fed.R.Civ.P. This Court, therefore, concludes that the attendance of defendants’ attorney at plaintiff’s hearing did not taint the challenged decision, or render it arbitrary, capricious or an abuse of discretion.

F. SITUS OF THE ADMINISTRATIVE HEARING

Defendants’ final attack upon the decision below is that the hearing was conducted at a non-neutral location. The hearing occurred in the office of defendants’ attorney. The evidence before the Court clearly indicates that plaintiff objected to the location but did not suggest an alternative site. Defendants offered to hold the hearing in a hotel room, and to share the expense of such with plaintiff. Plaintiff rejected this proposal, however. It is clear that the Board members conducted their deliberations at a separate location, as well. Furthermore, the record clearly indicates that plaintiff’s counsel was not deterred from vigorously representing his client at the hearing. Counsel vehemently objected to a number of matters, including the attendance of defendants’ attorney at the hearing and the racial composition of the Board. Counsel went so far as to accuse the Board Chairman of bias. Based upon these undisputed facts, this Court concludes that the location of plaintiffs hearing did not render the ensuing decision defective. In the absence of a minimal showing by plaintiff that the situs was prejudicial to her, conducting the hearing in the office of defendants’ attorney is not a matter which affected the decision’s validity-

Therefore, this Court concludes that no question of fact remains and that defendants are entitled to summary judgment. Plaintiff has not presented any evidence to counter defendants’ material showing that plaintiff’s allegations are either untrue or are not so serious as to render the decision below arbitrary; capricious or an abuse of discretion.


author: SWEET, District Judge.

text:
    Donald ROBINSON, Richard Hill, Charles M. Adams, James Wolfanger, Karl Rahn, and Ronald Fregara, Plaintiffs, v. PAN AMERICAN WORLD AIRWAYS, INC., Defendant.
    No. 84 Civ. 4094 (RWS).
    United States District Court, S.D. New York.
    March 20, 1985.

      Bernstein & Arfa, New York City, for plaintiffs; Stephen G. Eisenberg, New York City, of counsel.
    Ernest L. Garb, Richard Schoolman, Andrew M. Upton, New York City, for defendant.
   SWEET, District Judge.

Plaintiffs Donald Robinson, Richard Hill, Charles Adams, James Wolfanger, Karl Rahn, and Ronald Fregara, former employees of defendant Pan American World Airways, Inc. (“Pan Am”) brought this action pursuant to the Railway Labor Act, 45 U.S.C. § 151 et seq. (the “R.L.A.”) asserting that they were dismissed because of their union organizing efforts in violation of § 2, Fourth of the R.L.A. Pan Am subsequently moved to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a claim and for untimeliness. In an opinion dated November 6, 1984 and reported at 597 F.Supp. 1063 (S.D. N.Y.1984), this court granted the motion for failure to state a claim with respect to plaintiff Hill and denied the motion with respect to the remaining plaintiffs. Pan Am has now moved to renew its motion to dismiss the complaint on the grounds that it is untimely or in the alternative for reargument of that portion of the opinion discussing untimeliness. Despite the untimeliness of Pan Am’s request, this court waived the requirements of Local Rule 3(j) governing the timeliness of motions for reargument and oral argument was heard on January 4, 1985. Upon consideration of counsel’s arguments and the papers submitted by both parties, Pan Am’s motion for reargument is denied.

In its motion, Pan Am takes issue with that portion of the prior opinion which declined to apply the six month statute of limitations in § 10(b) of the National Labor Relations Act that was applied in Del Costello v. International Brotherhood of Teamsters, 462 U.S. 151, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983) to the plaintiff’s cause of action. In support of its motion, Pan Am cites recent cases suggesting that the Del Costello reasoning is applicable to more than just hybrid § 301/fair representation claims against employees and unions and also cites a case from the Eastern District of Michigan in which the District Court summarily applied Del Costello to a case in which the plaintiff was discharged in retaliation for union organizing activities in violation of the Railway Labor Act. Atkins v. Zantop Int. Airlines, Inc., 18 Aviation Reptr. 18,290 (E.D.Mich. Aug. 28, 1984). In addition, it argues that there are particularly compelling reasons to treat R.L.A. claims uniformly because under the R.L.A. labor organizations may be certified to represent employees only in system-wide, national “crafts or classes,” and that therefore the application of diverse state statutes would allow employees suing in different states on identical claims to wait different periods of time. Pan Am contends that this result would be inconsistent with the statutory scheme of the R.L.A.

Pan Am’s arguments do not affect the reasoning of my prior opinion. That opinion did not hold Del Costello is applicable solely on the ground that this case is not a hybrid § 301/fair representation claim, although that position has been asserted by other courts, see, e.g., Gordon v. Winpisinger, 581 F.Supp. 234 (E.D.N.Y.1984), but instead held that unlike the situation in Del Costello this was not a case in which the state statute of limitations conflicted with the federal policy underlying the relevant substantive statute. As the Third Circuit noted in Steelworkers Local 1897 v. USA, 117 LRRM 3115 (1984), one of the cases cited by Pan Am in support of its motion, the Del Costello court based its decision on the “close similarity in policy considerations relevant to the choice of limitations periods for an unfair labor practice charge and for a ‘hybrid’ section 301 action.” 117 LRRM at 3117. In explaining its decision to apply the Del Costello reasoning to a suit brought under § 102 of the Labor-Management Reporting and Disclosure Act, 29 U.S.C. § 412 (1982), the Third Circuit summarized the Del Costello court’s analysis of the policies underlying both unfair labor cases and hybrid § 301 cases as follows:

In both situations, the federal labor policy in promoting stable bargaining relationships necessitates prompt resolution of disputes between an individual and his union or an individual and his employer, disputes that may affect the bargaining relationship between union and employer. This interest in prompt resolution, however, must be balanced in both situations against the individual employee’s legitimate interest in attacking what he believes to be an unfair action taken against him. Recognizing that Congress adopted a six-month limitations period as an appropriate balance between these considerations in the unfair labor practice context, the Del Costello Court accepted that same balance for “hybrid” section 301 suits.

117 LRRM 3117. The Del Costello court found that this balance carried out the policies underlying the federal labor laws while application of the shorter state statutes would conflict with these policies.

As stated in the prior opinion, the application of the New York State statute of limitations in this case does not conflict with any of the policies underlying the relevant section of the R.L.A. Shortening the applicable limitations period would not carry out any of the policies of section 2, Fourth of the R.L.A. The fact that courts have been willing to apply Del Costello to situations other than cases involving hybrid § 301/fair representation claims, therefore, does not affect the reasoning of my prior opinion, since the reasoning of Del Costello seems equally applicable to any case in which a state statute would be at odds with the purpose of substantive federal law. Because this case does not involve such a situation, however, Del Costello should not apply. But see Atkins v. Zantop Int. Airlines, Inc., supra, 18 Aviation Reptr. 18,-290 (E.D.Mich. Aug. 28, 1984).

Pan Am’s arguments as to the necessity for uniformity in the limitations period relating to claims brought under section 2, Fourth of the R.L.A. are more compelling. Maintaining diverse statutes of limitations encourages forum shopping and allows inequities, and is at odds with “[t]he importance of uniformity in the labor law field.” See Del Costello, 462 U.S. at 156, 103 S.Ct. at 2286; Burnett v. Grattan, — U.S. -,-, n. 14,104 S.Ct. 2924, 2931, n. 14, 82 L.Ed.2d 36 (1984). However, as I noted in my earlier opinion, the Del Costello court expressly stated that its decision “should not be taken as a departure from prior practice in borrowing limitations periods for federal causes of action, in labor law or elsewhere.” 462 U.S. at 156. Congress did not choose to impose a uniform statute of limitations on all federal labor cases or on all cases arising under section 2, Fourth of the R.L.A., and the court’s decision in Del Costello was not a mandate to create by court order uniformity in the labor law field. Instead, the court’s decision requires a rejection of a state limitations period only where it would conflict with relevant federal policy. Where, as here, the applicable state statutes would not conflict with the policies behind the enactment of section 2, Fourth of the R.L.A., it would be inappropriate to interfere with Congress’ decision not to impose a uniform statute of limitations on such cases.

Pan Am has also requested that, in the event its motion for reargument is denied, this court signify that the timeliness question is suitable for interlocutory review pursuant to 28 U.S.C. § 1292. Although the specific question at issue in this opinion does not appear to have been addressed by this jurisdiction, at least one court has reached a different conclusion from the one that I have reached, see Atkins v. Zantop Int. Airlines, Inc., 18 Aviation Reptr. 18,290 (E.D.Mich. Aug. 28, 1984), and the question of the scope of the Del Costello opinion has engendered considerable discussion. Compare Steelworkers Local 1397 v. USA, supra, 117 LRRM 3115 (3d Cir.1984) (applying § 10(b) limitation to suit under § 102 of LMRDA) and Ranieri v. United Transp. Union, 743 F.2d 598 (7th Cir.1984) (applying § 10(b) limitation to non-hybrid fair representation suit) with Gordon v. Winpisinger, 581 F.Supp. 234 (E.D.N.Y.1984) (Del Costello applicable only to hybrid § 301/fair representation claims) and Bernard v. Delivery Drivers, 587 F.Supp. 524, 525 (D.Co.1984) (Del Costello not applicable to LMRDA claims because of different policies). I conclude that the decision as to the applicable statute of limitations in cases arising under section 2, Fourth of the R.L.A. involves a controlling question of law as to which there is substantial ground for difference of opinion, and that because this question is dispositive, an immediate appeal from the order may materially advance the ultimate termination of the litigation.

For the reasons discussed above, Pan Am’s motion for reargument is denied. Discovery shall be completed by September 3, 1985 and a joint pretrial order shall be submitted by September 12, 1985.

IT IS SO ORDERED.


text:
    Leonard MEYERSON and William Gross, as Chairman and Co-Chairman, respectively, and Trustees of the Joint Plumbing Industry Board and Funds Administered by the Joint Plumbing Industry Board, Plaintiffs, and John Daly, Peter Salzarulo, Strat Scarlatos and Michael Eustace, individually, and as Officers and Members of Local Union No. 2, United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, Plaintiffs-Intervenors, v. The CONTRACTING PLUMBERS ASSOCIATION OF BROOKLYN & QUEENS, INC., Defendant. v. Leonard MEYERSON, Lawrence Felder, William Greenblatt, and Herbert Greenberg, individually, and as Trustees of the Joint Plumbing Industry Board of the City of New York and all Trust Funds Administered by the Joint Plumbing Industry Board of the City of New York, and the Association of Contracting Plumbers of the City of New York, Inc., Additional Defendants on Counterclaims. LOCAL UNION #2, UNITED ASSOCIATION OF JOURNEYMEN AND APPRENTICES OF the PLUMBING AND PIPEFITTING INDUSTRY OF the UNITED STATES AND CANADA, Plaintiff, v. The CONTRACTING PLUMBERS ASSOCIATION OF BROOKLYN & QUEENS, INC., Alumni Plumbing & Heating Corp., Jodinan Plumbing & Heating Corp., and Richard Plumbing & Heating Corp., Defendants.
    Nos. 84 Civ. 7009 (RWS), 84 Civ. 7239 (RWS).
    United States District Court, S.D. New York.
    March 21, 1985.

      Kennedy & Casey, P.C., Garden City, N.Y. (Stanley Q. Casey, Garden City, N.Y., of counsel), for plaintiffs-intervenors.
    Kaming & Kaming, New York City (Joseph S. Kaming, Elizabeth C. Kaming, New York City, of counsel), for plaintiff Joint Plumbing Industry Bd.
    Cooperman, Levitt & Winikoff, P.C., New York City (William M. O’Connor, New York City, of counsel), for defendants.
   OPINION

SWEET, District Judge.

The parties in this consolidated action, before the court on crossing motions for summary judgment and motions to dismiss, seek to determine the status of various contractual obligations between differing plumbing contractor organizations and Local #2. The dispute in its present form centers on the validity of the collective bargaining agreement between the “Brooklyn Association” and Local #2. I conclude that this contract is void.

Prior Proceedings and Parties

Plaintiffs, Joint Plumbing Industry Board (“PIB”) and Local Union # 2 United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada (“Local #2”) and its officers, moved for summary judgment pursuant to Fed.R. Civ.P. 56 against defendant, The Contracting Plumbers Association of Brooklyn & Queens, Inc., (the “Brooklyn Association”).

Local # 2 is the plumbers local union with jurisdiction in Manhattan and the Bronx. The Joint Plumbing Industry Board is a collection agent for plumbing industry funds and day-to-day administrator of certain Local # 2 trusts pursuant to 29 U.S.C. § 186. The Association of Contracting Plumbers of the City of New York, Inc. (the “New York Association”) is a plumbing contractor trade association and has been the management collective bargaining agent with Local # 2 for the Local # 2 jurisdiction, Manhattan and the Bronx. The Brooklyn Association is a plumbing contractor trade association and has been the management bargaining agent with plumbers Local # 1, which has jurisdiction in Brooklyn and Queens. Local # 1 is not a party to this action.

PIB and Local #2 seek a declaration that there is no collective bargaining agreement between Local # 2 and the Brooklyn Association and that the purported agreement of January 11, 1984 between Local # 2 and the Brooklyn Association is null and void and the dissolution of a temporary stay, issued by the Honorable Eugene Nickerson in Local Union #2 v. The Contracting Plumbers Association of Brooklyn & Queens, Inc., and Alumni Plumbing and Heating Corp., Jodinan Plumbing & Heating Corp., and Richard Plumbing & Heating Corp., 84 Civ. 7239 (RWS), as follows:

IT IS HEREBY ORDERED:
a) All arbitration proceedings commenced, or to be commenced, by the plaintiff against the defendants, or against any member of the defendant, The Contracting Plumbers Association of Brooklyn & Queens, Inc. (the “Brooklyn Association”), based upon alleged violations of the New York Agreement, including the noticed arbitration procedure against Saf-Tee Plumbing Corp. are stayed; until further order of this court; and ...

Order of Judge Nickerson in Local #2 v. Brooklyn Association, 84 Civ. 7239 (RWS), Cv-84-3848 (EHN). This action was by the consent of all concerned transferred to this court and consolidated with the action pending here.

The defendants have sought a declaration by summary judgment that the Brooklyn Agreement is valid and the dismissal of PIB. In its answer, the Brooklyn Association also brought counterclaims against certain trustees of the PIB and the New York Association. By stipulation, the Brooklyn Association has agreed to extend the time to answer the counterclaims until twenty days after resolution of the motions currently before the court. All parties recognize that the dispositive issue is the validity of the alleged Brooklyn Association— Local # 2 agreement.

Facts

Facts sufficient to resolve these motions are undisputed. The New York Association and Local # 2 are bound by a sixty-one page collective bargaining agreement, effective June 30, 1982 to June 25, 1985, which details all aspects of the relationship between the parties. Among the terms of this contract were:

105. NO OTHER CONTRACTS TO BE MADE: No contracts or understandings inconsistent with or contrary to the terms of this Agreement shall be made between the Association and the Union either as individuals or groups.
106. NO OTHER AGREEMENTS EXIST: No other understandings or agreements exist between the parties hereto or their members, and this agreement contains the complete understanding between and among them. All prior agreements and understandings, oral or written, shall terminate upon the taking effect of and shall be superseded by this Agreement. No amendments or modifications of this Agreement shall be valid unless it is agreed to by the Association and the Union and reduced to writing.

The Brooklyn Association contends that Local # 2 entered into a Brooklyn Association — Local # 2 collective bargaining agreement on January 11, 1984. This agreement states in totality:

1. All of the terms and conditions of the collective bargaining agreement between the Union and the Association of Contracting Plumbers of the City of New York, Inc. (“New York Association”) (the “Local 2 Agreement”) are hereby agreed to and adopted subject to the following provisions.
2. References in the Local 2 Agreement to the “Association” shall mean the Association defined in this Agreement (i.e. the Contracting Plumbers Association of Brooklyn and Queens, Inc.). Any dispute between the Union and a member of the Association shall be resolved in the same manner as provided for in the Local 2 Agreement except that the management (or employer) representatives of the various joint arbitration, executive committees, etc. shall be designated by the Association.
3. Reference in the Local 2 Agreement to the Plumbing Industry Promotion Fund of Manhattan and Bronx shall be changed to read the “Metro New York Plumbing Industry Promotion and Education Fund” or other similar fund created by the Association.
4. The Union agrees that it has no objection for the Association to arrange to designate such number of the management trustees of the Joint Plumbing Industry Board (“JPIB”) approximately proportional to the number of man-hour contributions of the members of the Association to the JPIB.
5. This agreement shall be effective immediately and shall remain in effect for the duration of the Local 2 Agreement.

This agreement was signed by William Gross (“Gross”), president of Local # 2; Fred Brenner, President of the Brooklyn Association, President of Saf-Tee Plumbing, and a member of the New York Association from September, 1982 to September 1984; George Whalen, the Managing Officer of the Brooklyn Association; James Whalen, a member of the Executive Board of the Brooklyn Association, and President of Alumni Plumbing & Heating Corp., who was bound by the New York Association— Local # 2 agreement (PIB 19-21; O’Donnell Aff. Exhibit D; J. Whalen dep. at 7-11); and Salvatore Gamba, a member of the Executive Board of the Brooklyn Association and President of Olympic Plumbing and Heating Corp., who admits to being bound by the New York — Local # 2 agreement (Gamba dep. at 31).

The Brooklyn — Local # 2 agreement was negotiated at two meetings, held on January 5 and 11, 1984. The only representatives of the union with knowledge of the negotiation were Gross and Brian O’Dwyer (“O’Dwyer”), an attorney for Local # 2. No union meeting was called immediately subsequent to the signing of the agreement in order to notify the union of the agreement and to vote on ratification of the agreement, and on March 14, 1984, the agreement was voted down by the Local #2 membership. On January 1, 1985, Gross was replaced as president by Peter Salzarulo (“Salzarulo”).

The Local # 2 constitution defines the powers and responsibilities of the president and the Arbitration Board as follows:

Section 14. President.
(A) The duties of the President shall be to preside over the Local Union’s interests, affairs and all officers, see that the Constitution, By-Laws and Rules of Order, are observed, decide all questions of order, subject to any appeal to the Local.
Section 24. Arbitration Board
(A) The Arbitration Board shall negotiate all trade agreements and sit as a judicial body with representatives of our employers in the hearings of cases in violation of such agreements.
(B) In negotiations of a new agreement between the Master Plumbers and the Local Union they shall make a full and complete report at the membership meeting after every Arbitration Board meeting pending approval of the minutes of their meetings.

Further, the By-Laws of Local #2 state that:

(F) All voting on the ratification or changes of our collective bargaining agreement must be made by voting machine. There must be a special meeting held for such voting on a regular meeting night, and all members must be notified by mail. All members eligible to vote must have their dues books stamped before voting. The chairman must appoint tellers to supervise and count the •votes. Half of the tellers appointed must be for the proposition and the other half against.

Salzarulo, now president of Local #2, asserts that:

9. The By-Laws and Constitution of Local 2 provide that all negotiations by representatives of Local 2 with respect to collective bargaining agreements between Local 2 and employers or their collective bargaining representatives, must be conducted by an Arbitration Board (See Sect. 24, By-Laws of Local 2 attached hereto as Exhibit “2”). As long as I have been a member of Local 2, the correct procedure has always been that Local 2, acting through its Arbitration Board, negotiates the “Master Agreement” with the New York Association. Although the Arbitration Board may appoint one spokesperson to convey Local 2’s demands and responses to the employers’ association, all negotiations are conducted by Local 2 with the consent and presence of the Local 2 Arbitration Board. Further, no officer of Local 2, including the President, is authorized to engage in negotiations with any employer association regarding a new collective bargaining agreement or any changes in the existing Master Agreement without the consent and presence of the Arbitration Board.
10. The By-Laws and Constitution of Local 2 also provide that after the Arbitration Board has arrived at a tentative “understanding” with the Employers Association regarding a new contract or any modifications or changes in the existing Master Agreement, the membership must be afforded an opportunity to review and affirmatively ratify the new agreement or any change in the existing master agreement. (Salzarulo aff.)

The Brooklyn Association asserts, nonetheless, that at the January 5 meeting, the Brooklyn Association’s attorney asked the Union’s attorney “Does Willy Gross have proper authority to negotiate and. sign a collective bargaining agreement on behalf of the Union?” and that O’Dwyer replied “Yes,” stating that under the Union’s constitution and by-laws, Gross had the authority as President to sign the contract: The Brooklyn Association also asserts that Gross asked O’Dwyer whether any other signatures or procedures had to be completed in order to effectuate the agreement and that O’Dwyer repeated that no further action was required.

Gross, however, denies that the Brooklyn Association — Local # 2 document is a binding agreement or collective bargaining agreement:

Q. Is this document an agreement?
A. No. I have papers before a judge saying it isn’t.
Q. Is this document a collective bargaining agreement?
A. No.

Gross Tr. 75; see similar statements Gross Tr. 19, 55, 56, 73.

And O’Dwyer similarly claims that Gross’ signature did not create a legally binding contract:

Q. In other words, then what you represented is that Mr. Gross could sign a paper called an agreement, but that wouldn’t make that a legally binding document as far as the union was concerned; is that right?
A. As you are aware, Mr. Earning, and we are, in labor relations, it is customary for a President or Chief Executive Officer to sign a piece of paper and then submit it to his membership for ratification.
Q. When you answered that question, was that the import of your answer, from the point of your giving information at that meeting?
A. That’s the information I gave. I was with sophisticated legal counsel on the other side.

O’Dwyer at 22.

Conclusions

Determination of the legal effect of the Brooklyn Association — Local 2 agreement focuses on two distinct issues: the necessity that any collective bargaining agreement be ratified by the Local # 2 membership, and the authority, or apparent authority, of Gross to negotiate a collective bargaining agreement within the Brooklyn Association.

Ratification

A collective bargaining agreement must be ratified by a union’s membership only if the union’s constitution, by-laws or rules and regulations create such a requirement. There is no independent requirement in federal law of ratification by a union. Deboles v. Transworld Airlines, Inc., 552 F.2d 1005, 1018 (3d Cir.), cert. denied, 434 U.S. 837, 98 S.Ct. 126, 54 L.Ed.2d 98 (1977) (“[Fjederal law does require a ratification vote if the union constitution or by-laws require it.”); Texaco, Inc. v. N.L.R.B., 722 F.2d 1226 (5th Cir.1984); United Broth, of Carpenters v. Albany, 553 F.Supp. 55 (N.D.N.Y.1982).

In determining whether the constitution or by-laws of a union mandate ratification, a court must pay great deference to a union’s interpretation of its own governing documents, and a reasonable interpretation of those documents will ordinarily be upheld. Newman v. Local 1101, 570 F.2d 439 (2d Cir.1978); Gurton v. Arons, 339 F.2d 371 (2d Cir.1964); United Broth, of Carpenters, supra; Lenfest v. Boston & Maine Corp., 537 F.Supp. 324 (D.Mass. 1982).

The current president of Local # 2, Peter Salzarulo, in his affidavit, supra, stated that the constitution and by-laws require ratification of new agreements. Gross also contends that any alteration of existing contracts are not binding until ratified by the union:

Q. With respect to the collective bargaining agreement in existence between Local 2 and the Manhattan contractors, is it a fact that the bylaws require that any changes to this collective bargaining agreement would require ratification by the membership of Local 2?
A. I imagine they would have to. In a general sense, yes.

Gross, 11/2/84, p. 44.

Q. That means if this contract is changed, the itsy-bitsy bit — that’s is— itsy-bitsy, tiniest bit, that it would require ratification by the membership? A. If it was going to be changed in writing, yes.

Gross, 11/2/84, p. 45.

And Brian O’Dwyer, the former attorney for Local #2, also testified, supra that Gross’ signature on the Brooklyn Association — Local # 2 agreement did not signify that the agreement was a binding contract, but only that he would present that document to the membership for a ratification vote.

This interpretation of the constitution and by-laws of Local # 2 is reasonable. Although By-law 31(F), supra, could be interpreted as setting forth procedures which must be followed only after a decision had been made to seek ratification of a particular contract, the more reasoned interpretation of the mandatory language in 31(F) is that expressed by the current and former presidents of Local # 2, as well as by counsel for the union. Moreover, if ratification were necessary only for certain contracts, the constitution’s and by-law’s silence on the issue of which contracts required ratification would be surprising, in view of the specific procedures defined for ratification. Because the union’s own interpretation is reasonable, and the court’s jurisdiction to intervene in interposing an alternative interpretation is limited, Navarro v. Gannon, 385 F.2d 512, 516 n. 6 (2d Cir.1967), cert. denied, 390 U.S. 989, 88 S.Ct. 1184, 19 L.Ed.2d 1294 (1968); United Brotherhood of Carpenters, supra, I conclude that the union’s interpretation of the ratification requirement is proper.

Representatives of the Brooklyn Association were aware of the ratification requirement and thus could not justifiably rely upon an apparent assertion that Gross’ signature created a binding contract. James Whalen, a Brooklyn Association executive member, and one of the negotiators of the agreement, testified:

Q. So, in other words, it is your understanding that, according to the bylaws and constitution of the United Association, that an agreement would require ratification by the membership, is that right?
A. yes.
(J. Whalen 48)
Q. Regarding changes, is it your understanding the delegates do not have the authority to change the agreement?
A. I would assume so.
(J. Whalen 66).

Salvatore Gamba, a member of the Brooklyn Association executive committee and a signator of the agreement, testified:

Q. Am I correct in saying, Mr. Gamba, a standard operating procedure when a new agreement is entered into, it would be ratified by the membership of the local?
A. Yes.
Q. Is that based upon your years of experience as a member of the UA, United Association Local 1, and also as a contracting employer plumber?
A. Yes.
(S. Gamba 17)

Lawrence Felder, Chairman of the New York Association negotiating committee for the 1982-85 New York Association— Local # 2 agreement, testified as follows with respect to the knowledge of Richard Farrell, the President of the Brooklyn Association until January 10,1984 and a member of the New York Association negotiating committee for the 1982-85 agreement:

A. I think I answered that in a previous question when I told you, counselor, at every single negotiating committee meeting I made an opening statement that nothing, even though we agreed upon a paragraph, it is not agreed upon until it is ratified by both labor and management.
Q. Would you have an opinion with regard to whether or not Mr. Farrell knew that any new collective bargaining agreement would need ratification?
A. Counselor, Richard Farrell is a very intelligent person and sitting in every single meeting practically and I have to assume he was totally aware of the fact it had to be ratified.
(Felder at 102-03).

And Fred Brenner, who became president of the Brooklyn Association on January 10, 1984 and who signed the Brooklyn Association — Local # 2 agreement, testified that:

Q. Mr. Brenner, you testified previously today that it was your understanding that agreements were generally ratified in the industry, is that not correct?
A. I did not say that. I said agreements pertaining to the changes insofar as wages, benefits, and working conditions would require ratification.
(Brenner at 63).

The knowledge of these Brooklyn Association officers and Executive Board members can, as a matter of law, be imputed to the Brooklyn Association. Phelan v. Middle States Oil Corp., 210 F.2d 360, 365-6 (2d Cir.1954); American Industries Corp. v. M. V. MARGARITE, 556 F.Supp. 206 (S.D.N.Y.1981); In Re Investors Funding Corp., 523 F.Supp. 533 (S.D.N.Y.1980); Restatement of Agency (Second) § 272.

The Brooklyn Association — Local # 2 agreement was a new contract which made changes relating to matters of wages, benefits, and working conditions, and therefore required ratification before it became effective. Although the Brooklyn Association has attempted to assert that the contract does not affect wages, benefits, or working conditions, the new agreement does so in several respects: 1) by substituting a new party as the representative of the contracting employers; 2) by substituting a new authority for creation and management of the apprenticeship program; and 3) by creating a different body with jurisdiction over grievance and arbitration procedures. These are changes affecting wages, hours, and working conditions, and are thus matters which even the representatives of the Brooklyn Association recognized required membership ratification. In the absence of such ratification the agreement cannot be enforced against the union.

Gross’ Authority to Negotiate

A union can limit the authority of its officers to negotiate collective bargaining agreements. Houchens Market v. NLRB, 375 F.2d 208 (6th Cir.1967). Section 24 of Local # 2’s constitution, supra, vested authority to negotiate trade agreements in an Arbitration Board. Salzarulo in his affidavit stated that the Arbitration Board has always conducted negotiations, and no individual officer was authorized to engage in negotiations with an employer association without the consent or presence of the Arbitration board. It is uncontested that only Gross and O’Dwyer were aware that negotiations with the Brooklyn Association were occurring, and Gross had not obtained the consent of the Arbitration Board for the specific terms of the agreement he signed or the holding of negotiations with the Brooklyn Association at all. Gross was without actual authority to conduct the negotiations or to bind Local # 2.

Gross also lacked apparent authority to negotiate the agreement. Under common law agency principles, controlling here, Carbon Fuel Co. v. Mine Workers, 444 U.S. 212, 216-17, 100 S.Ct. 410, 413-14, 62 L.Ed.2d 394 (1979), the union is not bound by Gross’ signing the contract. The apparent authority of an agent is created only by manifestations of such authority by the principal. “Professor Mechem stated many years ago that ‘[t]he authority of an agent, and its nature and extent ... can only be established by tracing it to its source in some word or act of the alleged principal. The agent cannot confer authority upon himself or make himself agent only by saying that he is one.’ 1 Mechem, Agency § 285, at 205 (1914 ed.)” Karavos Compañía v. Atlántica Export Corp., 588 F.2d 1, 10 (2d Cir.1978); N.L.R.B. v. Don-kin’s Inn, Inc., 532 F.2d 138 (9th Cir.), cert, denied, 429 U.S. 895, 97 S.Ct. 257, 50 L.Ed.2d 179 (1976). No actions on the part of the principal, Local #2, are alleged to support the impression of apparent authority. Moreover, representatives of the Brooklyn Association have testified that they knew the president alone was not authorized to negotiate a collective bargaining agreement. See Pretrial examination of G. Whalen at 66-69; Pretrial Examination of J. Whalen at 76. The Brooklyn Association could not have relied reasonably upon any authority claimed by Gross, in view of the Brooklyn Association’s knowledge of Local #2’s actual distribution of authority.

In the absence of any authority by which Gross could bind Local #2, the Brooklyn Association cannot enforce the alleged agreement against Local # 2.

Pending Arbitration

Arbitration based upon alleged violations of the New York agreement by members of the Brooklyn Association who were also party to the New York — Local # 2 agreement were stayed by Judge Nickerson. Since I have found that the Brooklyn Agreement is void, no reason to stay the arbitration will exist if the parties to the arbitration are subject to the terms of the New York agreement. James Whalen, President of Alumni Plumbing and Salvatore Gamba, President of Olympic Plumbing, conceded in their depositions that they were still bound by the New York Agreement. (J. Whalen at 17, 32; Gamba at 27-31).

Saf-Tee Plumbing was a member of the New York Association. (See PIB Exhibit IB and ID). This agreement is effective until June 25, 1985, and Saf-Tee has given no notice of termination or withdrawal. Saf-Tee is consequently still bound by the New York — Local # 2 agreement. See 29 U.S.C. § 158(d); O’Hare v. General Marine Transp. Corp., 534 F.Supp. 120, 128 (S.D.N.Y.1981), aff'd, 740 F.2d 160 (2d Cir. 1984); Irwin v. Carpenters Health and Welfare Trust Fund, 745 F.2d 553 (9th Cir.1984). Consequently, no basis for staying arbitration proceedings has been presented and the stay will be dissolved.

The alleged Brooklyn Association — Local # 2 agreement is void. Consequently, the stay entered by Judge Nickerson is dissolved, and the plaintiffs’ motion for summary judgment is granted. Judgment will be entered for the plaintiff in Local 2 v. Contracting Plumbers, 84 Civ. 7239. Leonard Meyerson and William Gross, et al. v. Contracting Plumbers Association, 84 Civ. 709 remains open pending resolution of the counterclaims. The plaintiffs are directed to submit a proposed judgment in 84 Civ. 7239.

IT IS SO ORDERED.

      . The Plumbing Industry Board has standing in this action. See Nedd v. United Mine Workers, 556 F.2d 190, 197 (3d Cir.1977), cert. denied, 434 U.S. 1013, 98 S.Ct. 727, 54 L.Ed.2d 757 (1978); Livolsi v. City of New Castle, 501 F.Supp. 1146 (W.D.Pa.1980).


author: HUNGATE, District Judge.

text:
    TEXTILE PROCESSORS, SERVICE TRADES, HEALTH CARE, PROFESSIONAL AND TECHNICAL EMPLOYEES INTERNATIONAL UNION LOCAL 108 and Roy Suarez, Plaintiffs and Counter-Defendants, v. MORGAN SYSTEMS, INC., Defendant and Counter-Plaintiff.
    No. 83-2508C(3).
    United States District Court, E.D. Missouri, E.D.
    March 21, 1985.

      Robert E. Ahrens, St. Louis, Mo., for plaintiffs and counter-defendants.
    Sarah J. Herrin & Gerald Tockman, St. Louis, Mo., for defendant and counter-plaintiff.
   MEMORANDUM

HUNGATE, District Judge.

This matter is before the Court for a decision on the merits of the counterclaim of defendant/counter-plaintiff, Morgan Systems, Inc. (hereinafter Company) against plaintiffs/counter-defendants Textile Processors, Service Trades, Health Care, Professional and Technical Employees International Union Local 108 (hereinafter Union) and Roy Suarez.

This action was originally brought by the Union to enforce an arbitrator’s award and the Company counterclaimed for an order vacating the arbitrator’s award and seeking damages for breach of the union contract.

The Court granted summary judgment for the Union as to the enforceability of the arbitrator’s award, 583 F.Supp. 403, and held a nonjury trial on the Company’s counterclaim on November 19, 1984, allowing the parties a full opportunity to present evidence.

Having considered the pleadings, trial testimony, exhibits, stipulations, and memoranda of the parties, and being fully advised in the premises, the Court hereby makes and enters the following findings of fact and conclusions of law.

Findings of Fact

1. The Company’s principal place of business is located at 3124 Olive Street in the City of St. Louis, Missouri. The Company supplies linens, industrial garments, and dust control items to commercial, industrial, and institutional customers.

2. The Union is a labor organization with its office and principal place of business in the City of St. Louis, Missouri, and represents employee-members in this judicial district.

3. Roy Suarez, Thomas W. Smith, and Josephine Odom were officers and agents of the Union at all times material herein.

4. At all times material, the Union has been recognized as the sole and exclusive collective bargaining representative for all inside laundry production employees. At all times material hereto, the route servicemen at the St. Louis facility have been represented by Teamsters Local 682 (hereinafter Teamsters).

5. At all times material, the Company and the Union have been parties to a collective bargaining agreement. This agreement provides, in pertinent part:

ARTICLE X MANAGEMENT RIGHTS
Except as specifically limited by the express provisions of this Agreement, the Company has and maintains the sole and exclusive right to control its properties, manage its business and direct the working force including by way of example but not in any way limited to, the right to hire, promote, demote, transfer or assign and direct employees; to make, change, amend and enforce posted plant rules and regulations; to increase or decrease the working force, determine the number of job operations, the work to be performed therein, the services to be performed, the methods to be employed in performing them and the quality and production standards applicable thereto; to decide the number and location of its plants and the closing down of the plant, or any part thereof; to alter, combine, transfer, assign or cease any job, department, operation or service; to decide the products to be manufactured, the work to be contracted out or purchased, including parts, components or assemblies and the required machinery and equipment; and to maintain safety, efficiency, order and compliance with federal and state regulation in and within the plants. It is further agreed that management maintains and retains all of its managerial rights and that they are vested solely and exclusively in the Company unless specifically contracted away by this Agreement.
ARTICLE XI NO STRIKE
It is agreed that no officer or official of the Union or any of its locals shall assist or encourage and there shall be no picketing, company or product-derogation handbilling, supporting strikes, strikes, sit-downs, slow-downs, work stoppage, or any other activity which interferes with the Company’s operations in the production, distribution, or sale of the products of the Company during the life of this Agreement. If any employee, or group of employees represented by the Union in this unit, should violate the intent of this paragraph, the Union shall take immediate affirmative action and use every means available to prevent such illegal acts and take all necessary steps to the end that work will be properly and orderly resumed. Violation of the provisions or intent of this paragraph shall be grounds for disciplinary action or discharge. The Company agrees that it will not lock out the employees during the life of this Agreement.

The agreement does not specify the duties of the inside laundry production employees. Article VI (“Wages”), Section 2 provides:

Job classifications (job titles) are listed for the purpose of determining the rates payable to the individuals, if any, who from time to time permanently occupy those classifications, and this listing shall not be deemed to constitute any restriction upon the Company’s rights under Article X hereof to create or discontinue classifications, to assign and reassign work, and to determine the number and abilities of employees required.

6. The operation of the Company’s services entails a continual cycle of distributing laundered items and the retrieving of soiled items for cleaning and redistribution. The members of the Union are responsible for the sorting, washing, mending, pressing, and bundling of the items brought in by the drivers.

7. Soiled linen, which is contained in laundry bags and wheeled baskets (also referred to as hampers or trucks), is unloaded from trucks in the receiving area by the route drivers or servicemen. The soiled linen in the wheeled baskets is taken directly to the “wash floor” area for laundering. The bagged soiled linen is then placed on conveyors by the receiving and taken to the “soil sort” area for counting and sorting. The sorted linens are then put on another conveyor with hampers along the side. The receivers check to see that the contents of the hampers are kept at a low level and they replace the hampers if necessary. The receivers then use the hampers to transport the soiled linens to the “wash floor” area where they are laundered. After the linen has been washed, it is finished (i.e., dried and ironed). The finished linen is then transported to the “load make-up” area where it is put in bags, baskets, or hangers or wrapped. It is then moved to the “staging” area for loading onto trucks for delivery to customers.

8. In the spring of 1982, Calvin Armstrong, an inside laundry production employee, was told by his supervisor, Francis Griffin, to unload a truck from the Springfield branch containing “late soil” (soiled linen which is picked up later than usual and requires special handling so that it can be returned to the customer) because the driver of the truck was the Springfield branch manager. Washroom and Receiving Supervisor Griffin left the receiving area. When he returned, he discovered that Armstrong had not unloaded the truck. Supervisor Griffin asked why the truck had not been unloaded, and Armstrong replied that he had been told by the Union not to unload trucks. Supervisor Griffin issued a verbal warning to Armstrong, telling him that the next time he was instructed to unload a truck, he would have to do it or he would be terminated.

9. The union steward, Josephine Odom, was advised of the statement of the supervisor and a meeting was held at the Company’s plant. Roy Suarez represented the Union at the meeting while the Company was represented by Scott Morgan. Suarez explained to Morgan that the Union had been advised by the Teamsters that the loading and unloading of trucks was their jurisdiction and that they did not want members of the Union on the trucks. Morgan informed Suarez that he would keep the members of the Union from unloading the trucks. Morgan testified at trial, however, that he did not guarantee that Union members would not be expected to unload the trucks in occasional emergencies. Odom and Suarez testified that the purpose of the meeting-'was to reiterate a longstanding practice in the plant and industry custom that the loading and unloading of trucks was to be performed by the Teamsters.

10. It was and remained the position of the Union that its members were not to unload the trucks, and Suarez, Smith, and Odom instructed the members accordingly.

11. There was at the time this dispute arose an agreement between the Union and the Teamsters that loading and unloading of trucks was the exclusive jurisdiction of the Teamsters. The established practice in the linen industry for many years had been that the loading and unloading of trucks was Teamster work. This was also the ordinary practice at the Company’s facility and in the years preceding the incidents giving rise to this action. Union members had on occasion assisted in unloading trucks and had on occasion refused to help unload trucks.

12. On February 24, 1983, Armstrong was working with another inside laundry production employee, Barbara Mason, when a truck loaded with twelve hampers of rags arrived at the facility. The truck was driven by a company mechanic. The Company wanted these rags unloaded so they could be cleaned and bundled for immediate delivery to a customer. Supervisor Griffin instructed Mason to unload the hampers and Mason began unloading the hampers. When Griffin returned to the area, only one hamper had been unloaded from the truck. Griffin asked Mason why she had not unloaded the rest of the hampers. Mason replied that an employee told her not to unload the truck. Griffin ordered her to unload the truck or face termination. Mason agreed to unload the truck. Griffin told Armstrong to help Mason. Armstrong refused. Griffin repeated the order and Armstrong again refused. Mason left the area to get shop steward Odom. Griffin and Armstrong went to the office whereupon Griffin discharged Armstrong in the presence of Odom. Both Armstrong and Odom told Griffin that Union officials had instructed them not to load or unload trucks and this was the reason Armstrong refused to unload the truck. The refusal of inside laundry production employees to unload the truck caused a delay in the processing of the soiled linen of one or two hours at most.

13. Calvin Armstrong filed a grievance which was submitted to arbitration. The arbitrator awarded Armstrong reinstatement with full backpay, including fringe benefit contributions, which totalled $9,009.77.

14. The Company incurred $2,779.06 in costs and attorneys’ fees in arbitrating Armstrong’s grievance.

Conclusions of Law

1. This action is for an alleged breach of a collective bargaining agreement arising under and jurisdiction is conferred on the Court by Section 301 of the Labor Management Relations Act (LMRA) of 1947, as amended, 29 U.S.C. § 185 and under 28 U.S.C. §§ 1331 and 1337.

2. The Company is an employer within the meaning of Section 2(2) of the LMRA, 29 U.S.C. § 152(2) and is engaged in an industry which affects commerce within the meaning of Section 2(6) and (7) of the LMRA, 29 U.S.C. § 152(6) and (7).

3. The Union is a labor organization within the meaning of Section 2(5) of the LMRA, 29 U.S.C. § 152(5).

4. The specific terms of the collective bargaining agreement do not detail the duties of the members of the Union as to the loading and unloading of trucks. The parties further dispute the terms of an oral agreement arising out of the meeting between representatives of the Union and the Company after the first incident involving Calvin Armstrong in the spring of 1982. “In interpreting a collective bargaining agreement it is often necessary to go outside the four corners of the contract itself and examine the agreement history to ascertain the intent of the agreement and determine the rights and duties of the parties.” International Union, United Auto., Aerospace and Agr. Implement Workers of America v. White Motor Corp., 505 F.2d 1193, 1197 (8th Cir.1974), cert. denied, 421 U.S. 921, 95 S.Ct. 1588, 43 L.Ed.2d 789 (1975); see also Barrett v. Safeway Stores, Inc., 538 F.2d 1311, 1313 n. 2 (8th Cir.1976) (“a dispute under § 301 is governed by federal substantive law, Textile Workers v. Lincoln Mills, 353 U.S. 448, 456-57, 77 S.Ct. 912, 917-18, 1 L.Ed.2d 972 (1957), ‘and construed with reference to the particular practices, background and millieu which give rise to its use’ ”) (citation omitted). The Court finds, in light of past practice in the Company’s facility, the Union’s consistent, long-standing and well-known policy, custom within the industry, as well as the testimony of the witnesses, that the Company could not properly require members of the Union to unload trucks under the collective bargaining agreement.

5. The substance of the Company’s claim for damages in this action is the amount of money the Company spent pursuing and losing the arbitration of Armstrong’s grievance. Assuming, for the sake of argument, that there is merit to the Company’s claim that the Union violated the contract, the Court has great difficulty accepting the Company’s claim that the Union caused the Company’s loss in regard to the Armstrong arbitration.

6. The Union challenged the Company’s decision to terminate Armstrong, insisted upon his reinstatement and, when the Company refused, pursued the grievance to arbitration. The arbitrator decided in favor of the Union and ordered the Company to reinstate Armstrong with backpay. The Court finds it inconsistent to hold the Union financially responsible for losses incurred by the Company because the Company refused to accept the Union’s position. Such a result in these circumstances would operate to penalize a labor union for aggressively representing the interests of its members and, therefore, run contrary to the goals of the national labor policy. See Anderson v. Alpha Portland Industries, Inc., 727 F.2d 177, 181 (8th Cir.1984) (en banc) (“a union’s duty of fair representation arises from its status as exclusive representative of the employees within the bargaining unit, which deprives individual employees of the ability to deal directly with their employer.”)

7. The only other damages allegedly suffered by the Company would have resulted from the one or two-hour delay in unloading the truck caused by Armstrong’s refusal to unload. That the Company in fact suffered a loss because of the delay was not proven at trial.