Brannon v. Warn Bros., Inc., 73-1367

• Decision Date: 29 November 1974
• Docket Number: No. 73-1367,73-1367
• Citation: 508 F.2d 115
• Parties: 88 L.R.R.M. (BNA) 2084, 75 Lab.Cas. P 10,580 Joseph E. BRANNON, Plaintiff-Respondent-Appellee, v. WARN BROS., INC., a California corporation, Individually and doing business as Crescent Truck Lines, et al., Defendants-Petitioners-Appellants,
• Court: U.S. Court of Appeals — Ninth Circuit

Page 115

508 F.2d 115

88 L.R.R.M. (BNA) 2084, 75 Lab.Cas. P 10,580

Joseph E. BRANNON, Plaintiff-Respondent-Appellee, v. WARN BROS., INC., a California corporation, Individually and doing business as Crescent Truck Lines, et al.,

Defendants-Petitioners-Appellants,

No. 73-1367.

United States Court of Appeals, Ninth Circuit.

Nov. 29, 1974.

Richard H. Harding (argued), Littler, Mendelson & Fastiff, San Francisco, Cal., for defendants-petitioners-appellants.

Eugene B. Shapiro (argued), Shapiro & Maguire Law Corp., Beverly Hills, Cal., for plaintiff-respondent-appellee.

Before ELY and WALLACE, Circuit Judges, and THOMPSON, ^* District judge.

OPINION

WALLACE, Circuit Judge:

After two separate grievance proceedings, Brannon brought this action in state court against his employer, Warn Bros., Inc., dba Crescent Truck Lines, and George Warn and Frank J. Warn (collectively referred to as Crescent). After the case was removed to the federal district court, Crescent moved to dismiss or, in the alternative, to stay the action pending the outcome of further grievance proceedings. Crescent appeals from the denial of these motions. We dismiss Crescent's appeal from the order denying its motion to dismiss. We reverse and remand the order denying its motion to stay.

Crescent was a party to certain collective bargaining agreements with Line Drivers Union Local No. 468, an affiliate of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. Brannon was a member of Local 468 and was employed by Crescent from February 19, 1968, to March 21, 1971. Three of Brannon's seven causes of action allege breaches of the collective bargaining agreements between Crescent and Local No. 468. His four remaining claims arise independently of the collective bargaining agreements but concern matters connected with his employment: failure to perform an agreement with Brannon for the replacement of a truck used in the course of Crescent's business; failure to pay workmen's compensation benefits; and two counts of failure to pay money due on open account.

Before commencing this action, two grievances were filed by or on behalf of Brannon asserting claims related to those contained in his complaint. ¹ The first grievance resulted in a hearing on October 20, 1970, before the California Bay Area Labor-Management Committee (the Joint State Committee), a grievance committee composed of union and trucking association representatives. Because Crescent failed to appear at this hearing, the committee deprived Crescent of the benefit of the grievance provisions of the collective bargaining agreement then in effect. The second grievance also culminated in a hearing before the Joint State Committee on April 20, 1971. The committee dismissed this grievance as untimely filed.

I. Jurisdiction Over the Appeal from the Denial of the Motion to Dismiss

Crescent's motion to dismiss was founded upon the outcome of the grievance hearing of April 20, 1971. Crescent claims that the dismissal of Brannon's grievance at that hearing precludes any recovery in the present action. The district court rejected this argument and denied Crescent's motion to dismiss. An order denying a motion to dismiss is not appealable. Catlin v. United States, 324 U.S. 229, 236, 65 S.Ct. 631, 89 L.Ed. 911 (1945); Spruill v. Cage, 262 F.2d 355, 356 (6th Cir. 1958); C. Wright, Law of Federal Courts 101, at 453 (2d ed. 1970). We therefore dismiss Crescent's appeal from this order.

II. Jurisdiction Over the Appeal from the Denial of the Motion to Stay

Crescent also appeals from the denial of its motion to stay the present action pending further grievance proceedings. An appeal lies from an interlocutory order granting or denying a stay if

(a) the action in which the motion for a stay was made could have been maintained as an action at law before the merger of law and equity, and (b) the stay was sought to permit prior determination of an equitable defense or counterclaim.

Danford v. Schwabacher, 488 F.2d 454, 455 (9th Cir. 1973). See 28 U.S.C. 1292(a)(1). Brannon's appeal easily satisfies part (b) of this test. 'Reliance upon an arbitration agreement to avoid immediate litigation is deemed an equitable defense . . ..' Danford v. Schwabacher, supra, 488 F.2d at 456 (dictum). Part (a) presents more difficulties.

Brannon's claim for damages for breach of contract (first cause of action) is clearly an action at law. Ross v. Twentieth Century-Fox Film Corp., 236 F.2d 632, 633 (9th Cir. 1956). His claims for damages for fraudulent and malicious breach of contract (third and fourth causes of action) may sound in contract or tort, W. Prosser, Law of Torts 616, 619-20, 685-86 (4th ed. 1971), but in any case they are actions at law. Brannon's claim for an accounting for damages resulting from Crescent's breach of the collective bargaining agreements (second cause of action) is equitable. Baltimore Contractors, Inc. v. Bodinger, 348 U.S. 176, 75 S.Ct. 249, 99 L.Ed. 233 (1955). The pre-merger status of his remaining claims is uncertain. Brannon's cause of action for workmen's compensation benefits (fifth cause of action) is neither legal nor equitable but statutory. Danford, supra, 488 F.2d at 456-457. His common counts for money due on open account (sixth and seventh causes of action) may be either legal or equitable. 9 J. Moore & B. Ward, Federal Practice P110.20 (3), at 242-43 (1973); 5 id. P38.25 (1974). Judging from Brannon's theories of recovery alone, the legal or equitable character of his complaint is difficult to determine. However, the only equitable relief he seeks is the accounting in his third cause of action. He otherwise seeks damages. We, therefore, conclude that Brannon's action is 'basically and predominantly an action at law' satisfying part (a) of the preceding test. Alexander v. Pacific Maritime Ass'n, 332 F.2d 266, 267 (9th Cir.), cert. denied, 379 U.S. 882, 85 S.Ct. 150, 13 L.Ed.2d 88 (1964) (dictum).

III. Merits of the Motion to Stay

The basic question raised by Crescent's motion to stay is the validity of the hearing of October 20, 1970. A derivative question, but one also before us on this appeal, is whether that question should be decided by the district court or whether it should first be decided through the contractual grievance procedures.

When no representative of Crescent appeared at the hearing of October 20, 1970, the Joint State Committee deprived Crescent of the benefit of the following provision of the collective bargaining agreement:

The Union and the Employers agree that there shall be no strike, lockout, tie-up or legal proceedings without first using all possible means of settlement as provided for in this Agreement and in the National Agreement if applicable of any controversy which might arise.

Western States Over-the Road Motor Freight Supplemental Agreement of April 1, 1970, to June 30, 1973 (the Western States Agreement), art. 45, 1. The agreement specifically authorized the Joint State Committee to take this action:

Refusal of either party to submit to or appear at the grievance procedure at any stage . . . withdraws the benefits of Article 45 (quoted in part above).

Western States Agreement art. 45, 1(f).

Crescent claims that it did not receive prior notice of the October 20 hearing, that consequently the hearing is void and that Brannon is relegated to the contractual remedies specified in article 45 of the Western States Agreement. Crescent therefore seeks to stay the present action pending further grievance proceedings. We agree that a stay should issue but not for the reasons suggested by Crescent.

Federal labor policy requires the use of the contractual grievance procedures to the fullest extent possible:

An order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage.

United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-583, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960). The grievance provisions of the Western States Agreement apply to 'any controversy which might arise.' Western States Agreement art. 45, 1. While we leave the precise scope of this phrase to the district court, ² we must interpret it at least to include disputes over the interpretation and application of the collective bargaining agreement. See Warrior & Gulf, supra, 363 U.S. at 582-583, 80 S.Ct. 1347.

Whether the October 20 hearing was efficacious cannot be resolved without determining whether the validity of that hearing is still open to dispute and, if so, whether Crescent was given sufficient notice to permit the hearing to proceed. Each of these questions requires interpretation of the collective bargaining agreement. The first requires interpretation of the provisions governing finality of grievance hearings. ³ The second cannot be decided without setting standards for adequate notice of hearings conducted pursuant to the agreement. By referring these questions to the contractual grievance procedures, we follow the requirements of the collective bargaining agreement. We also fulfill our obligation to permit questions of contract interpretation to be decided by those best acquainted with the industrial practices that supplement the agreement. Warrior & Gulf, supra,363 U.S. at 580-581, 80 S.Ct. 1347; see John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 554-555, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964).

Additional considerations support referral of these questions to the contractual grievance procedures. Collateral attack upon prior grievance hearings is much more easily and quickly accomplished through grievance proceedings rather than litigation. Moreover, review through a second grievance proceeding does not suffer from the limited scope accorded judicial review of grievance awards. See United Steelworkers...