429 F.2d 249 (8th Cir. 1970), 19811, Sandobal v. Armour & Co.

Docket Nº:19811.
Citation:429 F.2d 249
Party Name:Francisco E. SANDOBAL, Also Known as Francisco E. Sandoval, Appellant, v. ARMOUR AND COMPANY, a Corporation, Appellee.
Case Date:July 13, 1970
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

Page 249

429 F.2d 249 (8th Cir. 1970)

Francisco E. SANDOBAL, Also Known as Francisco E. Sandoval, Appellant,


ARMOUR AND COMPANY, a Corporation, Appellee.

No. 19811.

United States Court of Appeals, Eighth Circuit.

July 13, 1970

Page 250

         Ralph R. Bremers and Edward A. Mullery, Omaha, Neb., on brief for appellant.

         William J. Riedmann, of Kennedy, Holland, DeLacy & Svoboda, Omaha, Neb., on brief for appellee.

         Before BLACKMUN, [a1] GIBSON and LAY, Circuit Judges.

         GIBSON, Circuit Judge.

         Plaintiff Francisco E. Sandobal filed suit in the United States District Court for the District of Nebraska for breach of a contract of employment, claiming substantial loss of wages and pension rights for an alleged wrongful discharge by defendant Armour & Company. Jurisdiction was originally claimed on the basis of diversity of citizenship and an amount in controversy exceeding $10,000. It is unclear whether jurisdiction is also claimed under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185. Summary judgment was entered against plaintiff on the basis of the Nebraska statute of limitations on oral contracts. A timely appeal in forma pauperis followed. The facts of the controversy are as follows.

         Plaintiff was employed with Armour & Company for over 20 years as a meatcutter and during that time had an exemplary record, except for one brief suspension in 1947 for absenteeism. In July 1962, plaintiff, while working on the 'streamline gang' which performed an assembly line operation of trimming and cutting up beef carcasses, was involved in a disturbance with a fellow employee, James Davis, in which Davis was severely injured with a knife. The facts of this disturbance are the subject of substantial controversy. Following the disturbance, Davis was immediately discharged, and plaintiff was suspended and subsequently discharged. A criminal prosecution was brought against plaintiff in the Nebraska District Court, which resulted in a hung jury, and the State then dropped the charges.

         Plaintiff Sandobal contends that he was completely without fault in the disturbance and his discharge as a result of it was wrongful. Plaintiff is of Mexican descent and does not read or write English. His claim is based upon a written collective bargaining agreement between the Union and the Company which provides in effect that employees may only be discharged 'for proper cause.' The agreement also provides that employee grievances are to be processed through a four-step grievance procedure between the Union and the Company culminating in arbitration.

         Following Sandobal's suspension and subsequent discharge, he complained a number of times to various union members about not being allowed to return to work. Plaintiff also made complaints to the Company. There were several casual conversations between the Union and the Company regarding his case, but no action was forthcoming. Sandobal

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then requested an attorney, Ralph Bremers, to take charge of his complaint. Bremers wrote two letters to the Company regarding Sandobal's discharge, but received no answer. He then contacted the International Union with which the local was affiliated and also received no action. The Company took the position that it was only required to negotiate with the Union on Sandobal's behalf and that it would do nothing as long as there was an attorney in the case. The Union's position on the matter is unclear. The Company contends that the Union refused to represent Sandobal so long as there was an attorney representing him. Affidavits filed by union officials are ambiguous on the issue. Sandobal's attorney contends the only thing the Union told him was that the Company refused to negotiate as long as there was a suit pending against it, and he told them there was no suit, as of course there wasn't at that time.

         The discharge occurred July 26, 1962.

         The complaint in this case was filed on July 25, 1967, a summons issued that day and was served the following day. The Company then filed a motion for summary judgment which was granted.

         There were four grounds for the motion for summary judgment: (1) the action was barred by the statute of limitations; (2) the action was barred by the plaintiff's laches; (3) the plaintiff failed to exhaust his remedies under the grievance procedure of the collective bargaining agreement; (4) the Union is a necessary and indispensable party. The trial court's ruling was based solely on the first ground, and that is our primary concern here. However, since defendant also relies on the other grounds on this appeal, we will also deal with them.

         Whether jurisdiction is based upon diversity of citizenship or § 301 of the LMRA, the law of Nebraska relative to the appropriate statute of limitations applies. See International Union, United Automobile, etc. v. Hoosier Cardinal Corp., 383 U.S. 696, 86 S.Ct. 1107, 16 L.Ed.2d 192 (1966) (holding that, absent an applicable federal statute of limitations, state statutes of limitations should be applied in § 301 cases if they are not in conflict with federal policy). Nebraska has a statute of limitations of four years on actions upon a contract not in writing, Neb.Rev.Stat. § 25-206 (Reissue 1964), and one of five years on actions upon a written contract, Neb.Rev.Stat. § 25-205 (Reissue 1964). Thus the immediate question in whether Nebraska would view this action as one based upon a written or an oral contract. Defendant contends that since extrinsic evidence must be used to prove both Sandobal's employment and a job covered by the collective agreement, it must be viewed as an action on an oral contract. Plaintiff contends that since the breach of contract arises from the written agreement not to discharge without proper cause, and he is a third party beneficiary of that contract, it is an action on a written contract.

         Before dealing with this question specifically, it is necessary to dispose of defendant's contention that even the five-year statute has run. For purposes of this appeal, the parties agree that the date of the discharge was July 26, 1962, and the cause of action accrued on that date. This suit was filed July 25, 1967, summons issued on that date and was served on the defendant the following day. Defendant contends that under Nebraska law, a suit is not commenced until the service of summons, citing Gorgen v. County of Nemaha, 174 Neb. 588, 118 N.W.2d 758 (1962), and since the summons in this case was not served until July 26, this was one day past the five-year period. Nebraska law, of course, requires the summons be served, but the applicable statute specifically states that the date the action is commenced is the date of the summons, provided that the summons is served. Neb.Rev.Stat. § 25-219 (Reissue 1964). The Nebraska Supreme Court, in a case directly in point, has held on this issue:

         'A summons issued within the time authorized by statute will give the court jurisdiction, although served

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after the expiration of such period. But in all cases the summons must be issued before the bar of the statute is complete.' Omaha Loan & Trust Co. v. Ayer, 38 Neb. 891, 57 N.W. 567, 568 (1894).

         The Gorgen case involved the issuance of a defective summons, which was then followed by an alias summons. The Nebraska Supreme Court held that the date of the alias summons did not relate back to the original summons, and since the date of the alias summons was past the time limit, the action was barred. That is obviously not the case here. We conclude that if the five-year statute is applicable, this suit was timely brought.

         In determining the question of the applicable statute of limitations, we note that there is no Nebraska ruling on the precise question involved. Therefore, in order to reach a decision on this issue, we will examine Nebraska law on related issues, and decisions on the limitations issue in cases arising in other jurisdictions.

         We first examine Nebraska law with the case of Rentschler v. Missouri Pac. Ry. Co., 126 Neb. 493, 253 N.W. 694 (1934), a case relied on extensively by the trial court. The case was decided in 1934, a time in which it was not at all clear that collective bargaining agreements were contracts which could be enforced at law and, more specifically, whether they could be enforced by individual employees against the employer. The case was exhaustive in its review of the law at that time and was significant in being one of the earliest to hold that the agreement was binding on the employer and could be enforced by the employees as third-party beneficiaries. The case was also significant in holding that the terms of such an agreement should be broadly construed. The trial court considered this case to reflect an attitude that 'a collective bargaining agreement is merely an ingredient to be considered along with the employees individual contract.' We do not view Rentschler as restrictive toward collective bargaining agreements, but as recognizing and according legal significance to them. As stated by the Nebraska Supreme Court in Rentschler at 699-700:

         'Recently in several cases the theory has been advanced that a collective agreement is a valid contract. * * * There is good ground for the adoption of this conclusion, for the parties on each side, through their organizations as agents, have bound themselves to certain specific rights and duties. * * *

         'The claim is made on behalf of the railroad company that the contract is void for lack of mutuality, yet Nebraska has gone as far as any court in protecting a third person's rights...

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