Associated General Contractors of North Dakota v. Local No. 580 of Laborers Intern. Union of North America

• Decision Date: 17 April 1979
• Docket Number: No. 1091,I,No. 793,No. 9527,No. 4,4,1091,793,9527
• Citation: 278 N.W.2d 393
• Parties: 101 L.R.R.M. (BNA) 2894, 88 Lab.Cas. P 55,269 ASSOCIATED GENERAL CONTRACTORS OF NORTH DAKOTA, Plaintiff-Appellant, v. LOCAL NO. 580 OF LABORERS INTERNATIONAL UNION OF NORTH AMERICA, Bricklayers, Masons and Plasterers International Union of America, LocalUnited Brotherhood of Carpenters and Joiners of America, Local Unionron Workers Local Unionnternational Union of Operating Engineers, Local 49 and Teamsters Union Locals 74, 116, 123, and 581, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Defendants-Appellees. Civ.
• Court: North Dakota Supreme Court

Page 393

278 N.W.2d 393

101 L.R.R.M. (BNA) 2894, 88 Lab.Cas. P 55,269

ASSOCIATED GENERAL CONTRACTORS OF NORTH DAKOTA, Plaintiff-Appellant, v. LOCAL NO. 580 OF LABORERS INTERNATIONAL UNION OF NORTH AMERICA, Bricklayers, Masons and Plasterers International Union of America, Local No. 4 United Brotherhood of Carpenters and Joiners of America, Local Union No. 1091 Iron Workers Local Union No. 793, International Union of Operating Engineers, Local 49 and Teamsters Union Locals 74 116, 123, and 581, International Brotherhood of Teamsters Chauffeurs, Warehousemen and Helpers of America, Defendants-Appellees.

Civ. No. 9527.

Supreme Court of North Dakota.

April 17, 1979.

Vogel, Brantner, Kelly, Knutson, Weir & Bye, Fargo, for plaintiff and appellant; argued by John D. Kelly, Fargo.

Sherman, Dunn, Cohen & Leifer, Washington, D.C., John T. Schneider, Schneider & Hilden, and Lanier, Knox & Olson, Fargo, for defendants and appellees; argued by Elihu I. Leifer, Washington, D.C.

PAULSON, Justice.

This is an appeal by Associated General Contractors of North Dakota ("AGC") from the judgment of the Burleigh County District Court dismissing AGC's breach of contract action against several local unions ("Local Unions"), ¹ AGC, a contractors' association that serves as the collective bargaining agent for member contractors, brought suit against the Local Unions in district court for allegedly violating their collective bargaining agreement with AGC by entering into conflicting employment contracts on the Coyote # 1 Fossil Fuel Power Plant ("Coyote # 1) in Mercer County. AGC's prayer for relief included a request that the Local Unions be enjoined from subscribing to or operating under the terms of the allegedly conflicting labor agreements on the Coyote # 1 project. Following a hearing on AGC's request for a temporary injunction and a subsequent hearing on the Local Unions' motion to dismiss, the district court granted the Local Unions' motion to dismiss AGC's complaint and AGC has appealed.

Before the present lawsuit was commenced, AGC and the Local Unions negotiated and entered into certain local labor agreements ("Local Agreements") which were to apply to construction projects located within a certain area which includes Mercer County, North Dakota. Approximately 139 contractor-members of AGC subscribed to the various agreements with the Local Unions. The agreements with the individual Local Unions contained provisions that prohibited both employer-contractors and the Local Unions from entering into agreements that conflict with the Local Agreements on building projects within the jurisdictional area of the Local Agreements.

After the Local Agreements were in effect, Bechtel Power Corporation ("Bechtel"), one of the four main contractors on Coyote # 1, began construction on the Coyote # 1 project in Mercer County. At least two AGC members who had signed the Local Agreements obtained subcontracts on the project and employed union workers under the terms of the Local Agreements.

After construction had begun on Coyote # 1 the Local Agreements were abandoned and union workers were then employed directly by Bechtel under a National Stabilization Agreement ("Stabilization Agreement") rather than by the subcontractors. The Stabilization Agreement was entered into between Bechtel and the other major Coyote # 1 contractors and various international unions. Neither AGC nor the Local Unions were parties to this agreement.

Under the Stabilization Agreement, workers are generally paid higher wages and benefits than they would have received under the Local Agreements. However, certain subsistence benefits under the Stabilization Agreement are less desirable for some workers than they are under the Local Agreements. The higher wages paid under the Stabilization Agreement were believed to be necessary in order to induce skilled workers to work on the Coyote # 1 project which is located approximately seventy-five miles from the nearest major population center. In return for the generally higher wages, union workers relinquished certain rights regarding strikes and grievances. In essence, Bechtel paid higher wages to obtain skilled labor and to avoid labor disputes during construction. The higher labor costs under the Stabilization Agreement are paid by Bechtel, not the subcontractor, to the extent that they exceed labor costs under the Local Agreements.

The Local Unions and the two AGC members who are subcontractors on Coyote # 1 began operating under the Stabilization Agreement after it went into effect. Testimony at the April 17, 1978, hearing indicated that the two subcontractors were obligated to operate under the Stabilization Agreement in order to obtain contracts on the project.

On January 25, 1978, AGC commenced this breach of contract action against the Local Unions and requested a preliminary injunction to prevent the Local Unions from operating under the conflicting Stabilization Agreement. The Local Unions removed the case to the United States District Court but the case was remanded to the Burleigh County District Court on March 22, 1978. The Local Unions again removed the case to the United States District Court; the case was again remanded to the Burleigh County District Court; and a hearing on a preliminary injunction was scheduled for April 17, 1978.

On April 17, 1978, the Local Unions filed an alternative motion to dismiss, or to strike, or for summary judgment. At the April 17 hearing the parties agreed that the hearing would not be on the merits but would involve only AGC's motion for a temporary injunction. Both sides presented testimony of witnesses and exhibits at the hearing. No decision on AGC's request for a temporary injunction was made at the conclusion of the April 17 hearing. A subsequent hearing was scheduled for May 15, 1978, to consider the Local Unions' motion to dismiss, or to strike, or for summary judgment.

At the May 15, 1978, hearing both sides declined to present additional evidence. They argued the Local Unions' motion to dismiss, or to strike, or for summary judgment, based upon the briefs, depositions, and affidavits. Both parties referred to the testimony that was presented at the April 17 hearing.

On May 16, 1978, the district court issued a Memorandum Opinion dismissing AGC's complaint. Findings of Fact, Conclusions of Law, Order for Judgment, and Judgment were entered on June 1, 1978, and AGC has appealed.

The basis upon which the district court granted the Local Unions' motion to dismiss is found in the following excerpt from the court's memorandum decision:

"AGC, it must be remembered, is bringing this lawsuit in a representative capacity on behalf of its members. AGC as an entity has no pecuniary interest in the outcome of the proceeding. It suffers no damage or harm as an entity by reason of the activities of the local unions. Some of the members of AGC may not have signed the local agreements, and these members certainly have no direct interest in the outcome of the proceeding. Other contractors who may have signed the agreements are not involved in the project in question, so they likewise have no direct stake in the outcome of the proceeding. The entities which do have a real interest in the proceeding are the subcontractors involved in the project who signed the local agreements, but they are not parties.

"I think, therefore, that this action has not been brought by the real party in interest. This fact does not justify dismissal of the action per se, since time should be allowed to cure the objection by substitution of the real parties in interest, namely, the subcontractors in question. See: Rule 17(a), N.D.R.Civ.P."

In summary, the district court determined that AGC had no pecuniary interest in the outcome of the breach of contract action; that AGC was not the real party in interest; that AGC members who had not signed the Local Agreements were not real parties in interest; that AGC members who had signed the Local Agreements but were not involved with the Coyote # 1 project were not real parties in interest; and that AGC members who had signed the Local Agreements and were involved with the Coyote # 1 project were real parties in interest. The district court further determined that, even if the AGC members who worked on the Coyote # 1 project were substituted as the real parties in interest to comply with Rule 17(a), N.D.R.Civ.P., they would not be able to enforce the Local Agreements against the Local Unions because the AGC members were also violating the Local Agreements on the Coyote # 1 project.

The following issues have been raised on appeal:

(1) Did the district court err in denying AGC's motion for a temporary injunction?

(2) Did the district court err in determining that AGC was not the real party in interest pursuant to Rule 17(a), N.D.R.Civ.P.?

(3) Did the district court err in dismissing AGC's complaint with prejudice?

The granting or denying of a motion for an injunction is within the trial court's sound discretion, and its ruling will not be reversed on appeal unless it has abused its discretion. Eakman v. Robb, 237 N.W.2d 423 (N.D.1975); and Keller v. Keller, 158 N.W.2d 694 (N.D.1968). After reviewing the record, we conclude that the district court did not abuse its discretion in denying AGC's motion for a temporary injunction against the Local Unions.

The second issue involves the district court's determination that AGC was not entitled to bring the breach of contract action against the Local Unions because AGC was not the real party in interest pursuant to Rule 17(a), N.D.R.Civ.P. Therefore, we must consider Rule 17(a), N.D.R.Civ.P., which provides:

"Real Party in Interest. Every action shall be prosecuted in the name of the real party in interest. An executor, administrator, guardian, bailee, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another, or a party authorized by statute...