Woollett v. Bankers Life Co.

• Citation: 572 F. Supp. 650
• Decision Date: 30 September 1983
• Docket Number: Civ. No. 82-72562.
• Parties: Jeffrey T. WOOLLETT and Amanda S. Woollett, Plaintiffs, v. BANKERS LIFE CO., et al., Defendants.
• Court: U.S. District Court — Western District of Michigan

572 F. Supp. 650

Jeffrey T. WOOLLETT and Amanda S. Woollett, Plaintiffs, v. BANKERS LIFE CO., et al., Defendants.

Civ. No. 82-72562.

United States District Court, E.D. Michigan, S.D.

September 30, 1983.

Nancy L. Kahn, Southfield, Mich., for plaintiffs.

James E. Baiers, Detroit, Mich., for Data 100 & Sycor.

Kim A. Siegfried, Allen Park, Mich., for United Steelworkers.

Sharon McPhail-West, Detroit, Mich., for Bankers Life.

John W. Conlin, Ann Arbor, Mich., for Nix.

MEMORANDUM OPINION

RALPH M. FREEMAN, Senior District Judge.

This action is an employee suit against, inter alia, the employer and a union, alleging the employer's breach of a collective bargaining agreement and the union's breach of its duty of fair representation with respect to the ensuing grievance proceeding. 29 U.S.C. § 185; Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967). The five count complaint asserts other causes of action which the Court will address. The complaint was filed on June 21, 1982 in Wayne County Circuit Court and was removed to this Court on July 12, 1982 by defendant Northern Telecom, Inc.

The plaintiffs in this litigation are Jeffrey T. Woollett and his wife Amanda S. Woollett. Jeffrey Woollett was employed by defendant Sycor, Inc. from May 8, 1978 to May 31, 1979 at which time Sycor, Inc. merged into Data 100 Corp. and, at the same time, changed its name to Northern Telecom Systems Corp. (Northern Telecom). Mr. Woollett continued in the employ of Northern Telecom until December 17, 1979. Amanda Woollett was employed by defendant Sycor, Inc. from June 27, 1978 to May 31, 1979, and following the merger, remained in the employ of Northern Telecom until December 10, 1979. While in the employ of Sycor, and subsequently Northern Telecom, plaintiffs were members of the United Steelworkers, Local 8579 (Union). The Union, during the time of plaintiffs' employment, had a collective bargaining agreement with Sycor and subsequently Northern Telecom. Pursuant to the agreement, Sycor and Northern Telecom (hereinafter simply Northern Telecom) agreed to provide medical, hospitalization and disability insurance to their employees and their families. Northern Telecom then contracted with defendant Bankers Life Co. to provide the medical and hospitalization insurance coverage called for under the collective bargaining agreement.

On August 19, 1978, Jeffrey Woollett married Amanda Long. Subsequent to the marriage, Mrs. Woollett became pregnant and later gave birth to twin daughters. Also subsequent to the marriage, Mrs. Woollett required extensive medical treatment and hospitalization for arteriovenous malformation of the brain. The plaintiffs submitted their medical and hospital bills to Banker's Life seeking total reimbursement for the medical and hospital costs incurred as a result of pregnancy and the arteriovenous malformation of the brain. Bankers Life refused to reimburse plaintiffs for all costs incurred.

Plaintiffs contacted the Union and informed them of their problem with Bankers Life. On or about March 5, 1979, the Union filed a grievance on behalf of Amanda Woollett "protesting the refusal of the employer to pay A & S benefits and medical bills relating to medical complications following the birth of her child." (affidavit of John Claya). Plaintiffs were represented by John Claya, counsel for the Union, during the grievance proceedings in this matter. At one point in these proceedings, following the exhaustion of the initial grievance procedures, this matter was scheduled for arbitration on October 18, 1979. Plaintiffs claim that arbitration was adjourned when the Union and Northern Telecom entered into a settlement agreement pursuant to which Northern Telecom agreed to reimburse plaintiffs in full for the medical and hospital expenses incurred. The Union contends that arbitration was adjourned because it wanted to attempt to settle this matter. The Union contends that the collective bargaining agreement precludes arbitration of matters relating to the provisions of any insurance program.

Plaintiffs claim that when it became apparent that the "settlement" would not be honored, they requested arbitration. At this point, after some correspondence between the Union and Northern Telecom, the Union informed plaintiffs that this matter would not be taken to arbitration. Subsequent to this time, plaintiffs commenced this action.

Count I of the complaint is a breach of contract claim against Bankers Life under a third party beneficiary theory. Count II is a breach of collective bargaining agreement claim against Northern Telecom. Count III is a breach of contract claim against Northern Telecom for breach of the purported "settlement contract" agreed to prior to the adjournment of the arbitration scheduled for October 18, 1979. Count IV is a breach of fair representation claim against the Union. Count V is an intentional infliction of emotional distress claim against Bankers Life, Northern Telecom, and Susan Nix, who is allegedly an agent or employee of Northern Telecom and Bankers Life.

On January 31, 1983, Northern Telecom filed a motion for summary judgment claiming that Counts II, III and V are time-barred by the six month limitations period set forth in section 10(b) of the National Labor Relations Act, 29 U.S.C. § 160(b), as applied to § 301 actions, 29 U.S.C. § 185, in Michigan by the Sixth Circuit in Badon v. General Motors Corp., 679 F.2d 93 (6th Cir. 1982). On February 1, 1983, the Union filed a motion urging the granting of summary judgment in its favor on Count IV on the same grounds. On April 22, 1983, defendant Susan Nix filed a motion seeking the granting of summary judgment in her favor on Count V on the same grounds. Plaintiffs responded to the motions of Northern Telecom and the Union on April 3, 1983 and to the motion of Susan Nix on April 28, 1983. Argument was scheduled for and heard on May 4, 1983 at which time this matter was taken under advisement.

The question presented by these motions with respect to Counts II and IV concerns the statute of limitations for employee suits against the employer and union, alleging the employer's breach of the collective bargaining agreement and the Union's breach of its duty of fair representation. 29 U.S.C. § 185; Vaca v. Sipes, 386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967). Northern Telecom assumes, without addressing the issue, that the statute of limitations applicable to § 301 actions, such as Count II, is also applicable to the straight breach of contract action asserted against it in Count III and the intentional tort asserted against it in Count V. The Court notes that each count in the complaint alleges a separate cause of action. Neither Count III nor Count V assert a claim for breach of the collective bargaining agreement. Therefore, the six month limitations period spelled out in Badon cannot possibly apply to Counts III and V. For these reasons, Northern Telecom's motion for summary judgment on Counts III and V will be denied.

The motion of defendant Susan Nix suffers from the same flaw. Plaintiffs allege that she committed an intentional tort, intentional infliction of emotional distress, in Count V. Nix contends that this cause of action is barred by the six month limitations period per Badon. As noted above with respect to the summary judgment motion of Northern Telecom, Badon is simply not applicable to Count V. Therefore, defendant Nix's motion for summary judgment will be denied.

Thus, the only issue remaining for the Court is the applicability of the holding in Badon to Counts II and IV. Badon held that § 301 actions arising in Michigan are subject to a six month limitations period adopted from § 10(b). The issue addressed during the arguments and in some of the briefs is the effect of the Sixth Circuit's decision in Pitts v. Frito-Lay, Inc., 700 F.2d 330 (6th Cir.1983) (decided February 24, 1983) on the case at hand. Pitts held that the "six-month statute of limitations adopted in Badon for suits of this nature should not be given retroactive effect." Id. at 334. However, the Sixth Circuit had held, one month earlier, that United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 101 S.Ct. 1559, 67 L.Ed.2d 732 (1981), the case on which the Badon court relied, applied retroactively. Lawson v. Truck Drivers, Chauffeurs & Helpers, Local 100, 698 F.2d 250 (6th Cir. 1983) (decided January 17, 1983). Both Pitts and Lawson applied the principles set forth in Chevron Oil Co. v. Hudson, 404 U.S. 97, 92 S.Ct. 349, 30 L.Ed.2d 296 (1971) in determining retroactivity.

Complicating matters further in this case is the very recent decision of the Supreme Court in DelCostello v. International Brotherhood of Teamsters, ___ U.S. ___, 103 S.Ct. 2281, 76 L.Ed.2d 476 (1983). In DelCostello, the Supreme Court held that the provisions of § 10(b) of the National Labor Relations Act establishing a six month limitations period for the filing of unfair labor practice charges with the National Labor Relations Board should be borrowed and applied to actions alleging the employer's breach of the collective bargaining agreement and the union's breach of its duty of fair representation.¹ In an earlier decision, United Parcel Service, Inc. v. Mitchell, 451 U.S. 56, 101 S.Ct. 1559, 67 L.Ed.2d 732 (1981), the Supreme Court held that the appropriate limitations period for an employee's claim against the employer was to be found by looking to the state statute of limitations for actions seeking to vacate arbitration awards rather than by looking to the state statute of limitations for actions alleging breach of contract. The Court in DelCostello was quick to note the limited review of this issue afforded them by the questions posed in Mitchell:

First, our holding was limited to the employee's claim against the employer; we did not address what state statute should govern the claim against the union. Second, we expressly limited our consideration to a choice

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