Corbesco, Inc. v. Local No. 542, Intern. Union

Decision Date22 October 1985
Docket NumberCiv. A. No. 83-180-JLL.
Citation620 F. Supp. 1239
PartiesCORBESCO, INC., a corporation, and Robert R. Sturm, an individual, Plaintiffs, v. LOCAL NO. 542, INTERNATIONAL UNION OF OPERATING ENGINEERS, an unincorporated association, Defendant.
CourtU.S. District Court — District of Delaware

Stanley William Balick, Wilmington, Del., and Peter R. Spanos and Dudley C. Rochelle of Summers, Hendrick, Spanos & Phillips, Atlanta, Ga., of counsel, for plaintiffs.

Robert Jacobs of Jacobs & Crumplar, P.A., Wilmington, Del., and Robert Tim Brown of Kirschner, Walters, Willig, Weinberg & Dempsey, Philadelphia, Pa., of counsel, for defendant.

OPINION

LATCHUM, Senior District Judge.

Plaintiff, Corbesco, Inc. ("Corbesco"), a corporation organized under the laws of the State of Louisiana with its principal place of business in that state, and Robert R. Sturm ("Sturm") filed a complaint on March 30, 1983, against the defendant in this case, Local No. 542, International Union of Operating Engineers ("Local 542"), alleging violation of sections 8(b)(4)(D) and 303 of the Labor-Management Relations Act, 29 U.S.C. §§ 158(b)(4)(D), 187, seeking damages resulting to Corbesco in its business and personal injuries to Sturm, intentional interference with Corbesco's collective bargaining agreement, and various state law tort claims.1 The parties reached agreement on the terms of a settlement, which was reflected in a letter written by plaintiffs' counsel on May 30, 1985. Plaintiffs' counsel subsequently drafted a detailed Settlement Agreement, the terms of which the defendant later claimed differ from those in the letter of May 30. The defendant by letter (Docket Item "D.I." 32) informed the Court that due to rejection of the agreement2 by the Executive Council of the defendant Local 542, no settlement in fact had been reached. The plaintiffs have moved to enforce the agreement to settle and to enter judgment thereon. (D.I. 33.) Pursuant to 29 U.S.C. §§ 101, 107 and United Telegraph Workers, AFL-CIO et al. v. Western Union Corp., 771 F.2d 699 (3d Cir.1985) the Court on September 9, 1985, ordered an evidentiary hearing for the benefit of the defendant (D.I. 41), which the defendant has specifically waived (D.I. 42). Thus, again before this Court, after another flurry of briefing by the parties, is plaintiffs' motion to enforce the agreement to settle and enter judgment.3

Sitting in equity, the Court decides this case without a jury upon consideration of the entire record, all documents, affidavits, and legal memoranda submitted by the plaintiffs and the defendant, and enters the following findings of fact and conclusions of law which are embodied in this opinion as permitted by Rule 52(a), Fed.R.Civ.P.

I. THE FACTS

Because this Court has before it only the narrow issue of the enforceability of an agreement allegedly reached during settlement negotiations between the parties, the events which resulted in the litigation will be only briefly recounted.

Corbesco was a subcontractor on a construction project for Getty Oil Company. The project was located approximately twelve miles from Wilmington, Delaware. (D.I. 1, ¶ 11.) Corbesco entered into a subcontract agreement with Henkels & McCoy, Inc., the main contractor for a certain portion of the project. (Id. at ¶ 12.)

A piece of equipment called a "modified hand crab winch" was required to raise siding panels to the scaffolding for installation by Corbesco employees. (D.I. 1, ¶ 13.) The Corbesco employees who were installing these siding panels by means of the crab winch were covered by a collective bargaining agreement between Corbesco and Local Union No. 626, United Brotherhood of Carpenters and Joiners of America ("Local 626"). (Id. at ¶ 14.) For a period of about two weeks, beginning approximately on January 4, 1983, the members of Local 542 began to intimidate members of Local 626 working for Corbesco. The actions began with threats, but ended with personal injuries to the individual plaintiff, Sturm, and destruction of property, including the crab winch, such that work on the project was substantially delayed. (D.I. 18, 61-158).

During and after the discovery phase of this case, all of the parties pursued settlement negotiations which resulted in a formal offer of settlement made by the defendant on October 16, 1984. (D.I. 20, ¶ 3.) Tim Brown, counsel for the defendant, told Dudley C. Rochelle, counsel for plaintiffs, that he had been authorized by Local 542 to make an offer of $25,000, to be paid in two installments, "to set negotiations in motion," a commitment by the defendant to allow Corbesco to use the crab winch, and a confidentiality agreement by Corbesco and Sturm not to advertise the settlement. (D.I. 35, ¶ 9.) On November 28, 1984, Brown transmitted plaintiffs' counteroffer of $50,000, payable in two equal installments over a two-year period with interest, with security or co-signature by the defendant-union. Brown stated that he felt they were "still in the ballpark" and would get back to Rochelle in two or three days after talking to his client. (Id. at ¶ 11.)

On April 4, 1985, Brown called Rochelle to report on the results of a meeting with John Kirschner of Brown's law firm, John Arnone, Business Agent for Local 542, other representatives of Local 542, and Brown himself. Brown stated that the previous offer of the defendant of $25,000 was still open but that there was yet no definite response to plaintiffs' offer of $50,000. (D.I. 35, ¶ 14.) Brown called Rochelle again on April 12 to inform her that Ed Foy, Local 542's general counsel, would join the settlement negotiations. Foy then called Rochelle the same day to discuss various matters concerning the settlement. Brown called Rochelle again on April 25 to report that both he and Foy were hopeful that the matter would be settled. Rochelle responded that plaintiffs were still waiting for a counteroffer by the union. (Id. at ¶¶ 17-18.) Brown then called Rochelle on May 7 to set up a conference call with Foy to make a "slightly higher offer." During the conference call, in which Brown, Foy, Rochelle, and Peter Spanos, another attorney for the plaintiffs, participated, Brown and Foy communicated the defendant's proposal to settle the case for $30,000, with two equal installments. (Id. at ¶ 19.) On May 14, Rochelle called Brown and made a counteroffer of $40,000 on behalf of the plaintiffs. (Id. at ¶ 20.)

On May 23, Brown called Rochelle with another offer from Local 542, which would eventually form the basis of the agreement to settle, of a total payment of $35,000, with $20,000 payable within sixty days of the settlement and $15,000 payable one year later, backed up by a security interest in a building owned by the defendant. Local 542 agreed to issue a letter disclaiming jurisdiction over the work of operating the crab winch for eight years within the State of Delaware. (D.I. 35, ¶ 21.) Rochelle called Brown on May 28 with a counteroffer of $37,500 with an initial payment of $20,000 and $17,500 payable one year later with security. She stated that the $2500 above the defendant's offer represented interest on the later installment. Plaintiffs also requested a disclaimer by the union concerning the winch for fifteen years, and notification of the settlement to the union but would agree to some plan concerning confidentiality. (Id. at ¶ 23.) Brown called Rochelle the next day to report that his client would not budge from its previous offer of $35,000, $20,000 initial payment within sixty days, and $15,000 one year later and that it would not extend the disclaimer beyond eight years. During the same discussion, Brown stated that Foy had confirmed to him earlier that day that the union's last offer of $35,000 was still open. (Id. at ¶¶ 24-25.)

Rochelle in her affidavit stated that throughout the settlement negotiations she understood that Local 542's counsel was acting with Local 542's authority, "as he (Brown) so stated." In fact, Brown "often referred specifically to having conferred with and received instructions from Business Agent John Arnone." (Id. at ¶ 26.)

Rochelle called on May 30 to confirm plaintiffs' acceptance of Local 542's offer of $35,000. She also sent a letter the same day to the defendant giving the details of the negotiated agreement. (D.I., 33, Ex. J.) The terms stated in this letter restated those agreed to over the telephone. The essential terms required the defendant union to do the following: (1) to pay total damages to Corbesco and Sturm of $35,000, with $20,000 to be paid within sixty days of execution of the settlement and $15,000 payable one year after execution of the settlement; (2) to deliver a first mortgage on an office building in New Castle, Delaware, which the union owned free and clear, sufficient to secure the latter installment; (3) to issue a written disclaimer of jurisdiction over operation of Corbesco's crab winch, so described as to allow some improvements or modifications but to exclude "tugger winch work," for a period of eight years in the State of Delaware; and (4) to post a notice at the union hiring hall, similar to the type required by the NLRB in settlement agreements, for sixty days, the standard NLRB period, stating that the union would not inhibit others from assigning work to employees in a particular trade.4 For its part, Corbesco and Sturm agreed not to "take the initiative in publicizing or disseminating information about the outcome of this lawsuit to the construction industry or the public at large."5 In the letter, the plaintiffs stated their understanding of the defendant's difficulty in financing a certain property, which explains their agreeing to a delay of the first installment for sixty days.6

Rochelle did not receive any communication from either Brown or Foy concerning her May 30 letter. (D.I. 35, ¶ 28.) Rochelle called Brown on June 7. Brown told her that he had talked to Foy who agreed that the May 30 letter seemed to be "in line with...

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