OPERATIVE PLASTERERS & CEMENT MASONS v. Benjamin

• Decision Date: 03 February 1993
• Docket Number: No. S91-293M.,S91-293M.
• Parties: OPERATIVE PLASTERERS & CEMENT MASONS INTERNATIONAL ASSOCIATION OF THE UNITED STATES AND CANADA, AFL-CIO, et al., Plaintiffs, v. James E. BENJAMIN, Defendant.
• Court: U.S. District Court — Northern District of Indiana

843 F. Supp. 1267

OPERATIVE PLASTERERS & CEMENT MASONS INTERNATIONAL ASSOCIATION OF THE UNITED STATES AND CANADA, AFL-CIO, et al., Plaintiffs, v. James E. BENJAMIN, Defendant.

No. S91-293M.

United States District Court, N.D. Indiana, South Bend Division.

February 3, 1993.

COPYRIGHT MATERIAL OMITTED

Barry A. Macey, Macey Macey and Swanson, Indianapolis, IN, Robert J. Henry, R. Richard Hopp, Charles W. Gilligan, O'Donoghue and O'Donoghue, Washington, DC, for plaintiffs.

Charles L. Berger, Berger and Berger, Evansville, IN, for defendant.

MEMORANDUM AND ORDER

MILLER, District Judge.

The plaintiffs, an international union and its affiliated local, seek summary judgment as to liability on three counts of their seven count complaint against the defendant, a former officer of the local. The defendant has moved the court to reconsider the October 15, 1992 order, 144 F.R.D. 87 granting the plaintiffs' motion to compel production of documents and awarding expenses pursuant to Fed.R.Civ.P. 37(d). The plaintiffs have filed a motion for expenses incurred in obtaining the October 15, 1992 order. Finally, the plaintiffs have filed a motion for protective order pursuant to Fed.R.Civ.P. 26. For the following reasons, the court denies the plaintiffs' partial summary judgment motion, denies the defendant's motion for reconsideration, grants the plaintiffs' motion for expenses, and grants the plaintiffs' motion for protective order. The court will address each motion in turn.

I. Motion for Partial Summary Judgment

The plaintiffs, the Operative Plasterers' and Cement Masons' International Association ("OP & CMIA") and its affiliated Local ("Local 101"), seek summary judgment as to liability on Counts II, III, and VII of their complaint. Count II alleges a claim for breach of the OP & CMIA Constitution and the Local 101 Constitution pursuant to § 301 of the Labor Management Relations Act (the "LMRA"), 29 U.S.C. § 185. Count III alleges a claim for breach of fiduciary duty pursuant to § 501 of the Labor-Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. § 501, and Count VII alleges a breach of fiduciary duty claim under Indiana common law.

A. Background

Defendant James Benjamin held elected offices in Local 101 for twenty-six of the thirty years in which he was a member of the OP & CMIA. He was president of Local 101 from 1964 to 1972; from 1972 until his resignation in June 1991, he was business manager (the equivalent of chief executive officer) of Local 101.

The OP & CMIA contends Mr. Benjamin violated his contractual and fiduciary duties to the union from April to June 1991. By his own admission, Mr. Benjamin engaged in the following activities during that period.

In April 1991, in his position as trustee of the health and welfare funds of Local 101, Mr. Benjamin proposed an amendment to the union pension plan that would allow a union member who left the OP & CMIA to continue to make contributions to the OP & CMIA fund, "so that the trust fund would never go belly up." The Local 101 Executive Board adopted this proposal on June 5, 1991.

Also in April 1991, Mr. Benjamin learned of rumors of a possible merger between the OP & CMIA and the Bricklayers' union. In May, he participated in various meetings with representatives of a third labor organization, the Laborers International Union of North America ("Laborers"), and officers of other OP & CMIA locals. At those meetings, the parties discussed potential job opportunities with the Laborers for Mr. Benjamin and other Local 101 members, and discussed procedures for obtaining the resignations of Local 101 members from the OP & CMIA. None of the participants informed the OP & CMIA of these meetings.

At a June 5 executive board meeting of Local 101, Mr. Benjamin explained his efforts to amend the pension plan, explained the membership offer from the Laborers, presented resignation forms, and announced his expectation that Local 101 would be placed under trusteeship by the OP & CMIA the next day. At that evening's general membership meeting, Mr. Benjamin told the general membership that the Laborers offered opportunities that would provide more work, cheaper insurance, and a better pension. He made forms available to the Local 101 membership for the purpose of resigning from Local 101. Mr. Benjamin indicated that he was going to seek employment with the Laborers, but recommended to the Local 101 membership not to resign from Local 101. Carl Wolfe, the Secretary of Local 101, recorded none of the June 5 events on the Local 101 minutes.

On June 9, while playing golf with Mr. Benjamin, Carl Wolfe tendered his resignation from Local 101 to Mr. Benjamin. After finishing eighteen holes, Mr. Benjamin returned to Local 101's office and signed his own resignation. He left the resignation letter on the desk in what soon would be his former office, and did not inform anyone in the OP & CMIA of his resignation until several days later. Mr. Benjamin's resignation became effective at 12:01 on June 10; he went to work for the Laborers on the morning of June 10.

On June 13, pursuant to the terms of the OP & CMIA Constitution, General President Vincent Panepinto placed Local 101 under trusteeship and ordered Mr. Benjamin to turn over all of Local 101's property to the lawfully appointed trustee.

On June 17, Mr. Benjamin attended a meeting between representatives of the Laborers and the OP & CMIA. At that meeting, the Laborers' representatives indicated that Mr. Benjamin was not alone in his defection from the OP & CMIA. As of June 17, no Local 101 members other than James Benjamin and Carl Wolfe had defected to the Laborers. On June 18, Mr. Benjamin and other former business managers of OP & CMIA locals in Indiana met in Terre Haute, Indiana and drafted a letter addressed to all OP & CMIA members in Indiana explaining the business managers' actions. The letter explained:

We have been inundated by letters from the International condemning the action which we have taken.

The action which we have taken was precipitated by the changing of International Presidents and the lack of concern for the welfare of the Cement Masons by joining into an agreement with the Bricklayers International.

We sincerely believe that the benefits that are to be gained by all the members will be far superior to those we have experienced in the past.

On June 25, the OP & CMIA and Local 101, under the International's trusteeship, filed a seven-count complaint against Mr. Benjamin in this court. The court denied Mr. Benjamin's motion to dismiss the complaint for lack of subject matter jurisdiction. See OP & CMIA v. Benjamin, 776 F.Supp. 1360 (N.D.Ind.1991). On August 7, 1992, the plaintiffs moved for partial summary judgment as to Mr. Benjamin's liability on Counts II, III, and VII of the complaint. The parties have requested oral argument on the motion, but the court finds that oral argument is not warranted; accordingly, the motion is now ripe for ruling.

B. Standard of Review

A party seeking summary judgment must demonstrate that no genuine issue of fact exists for trial and that the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Duane v. Lane, 959 F.2d 673, 675 (7th Cir.1992). A genuine factual issue exists only when there is sufficient evidence for a jury to return a verdict for the motion's opponent. Harbor House Condominium Ass'n v. Massachusetts Bay Ins. Co., 915 F.2d 316, 320 (7th Cir.1990); Hines v. British Steel Corp., 907 F.2d 726, 728 (7th Cir.1990). Summary judgment should be granted if no reasonable jury could return a verdict for the motion's opponent. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Brownell v. Figel, 950 F.2d 1285, 1289 (7th Cir.1991); Visser v. Packer Engineering Associates, Inc., 924 F.2d 655, 660 (7th Cir.1991).

The parties cannot rest on mere allegations in the pleadings, Hughes v. Joliet Correctional Center, 931 F.2d 425, 428 (7th Cir.1991); McCarthy v. Kemper Life Ins. Companies, 924 F.2d 683, 687 (7th Cir.1991), or upon conclusory allegations in affidavits. Cusson-Cobb v. O'Lessker, 953 F.2d 1079, 1081 (7th Cir.1992); Mestayer v. Wisconsin Physicians Service Ins. Corp., 905 F.2d 1077, 1079 (7th Cir.1990). The court must construe the facts as favorably to the non-moving party as the record will permit, Brennan v. Daley, 929 F.2d 346, 348 (7th Cir.1991), and draw any permissible inferences from the materials before it in favor of the nonmoving party, Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); Prince v. Zazove, 959 F.2d 1395, 1398 (7th Cir.1992), as long as the inferences are reasonable. Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir.1991). The non-moving party must show that the disputed fact is material, or outcome-determinative, under applicable law. Kizer v. Children's Learning Center, 962 F.2d 608, 611 (7th Cir. 1992).

C. Analysis

The plaintiffs contend that from April 1991 until his June 1991 resignation, Mr. Benjamin used his position of authority within Local 101, as well as the power of other local leaders across Indiana, to produce the wholesale defection of OP & CMIA members to the Laborers, a rival labor organization. The plaintiffs contend that Mr. Benjamin's own deposition testimony conclusively demonstrates that his actions violated provisions of the OP & CMIA and Local 101 constitutions and violated his fiduciary duty to the OP & CMIA.

According to Mr. Benjamin, he attempted to act in the best interests of Local 101 and its members. He contends he acted in response to rumors of a possible merger between the OP & CMIA and the Bricklayers, as well as other actions taken by the OP & CMIA leadership that would have been detrimental to the interests of Local 101.

1. Breach of Contract/Constitution

The plaintiffs' claim that Mr. Benjamin's actions violated the terms of the OP & CMIA and Local 101...