Pio v. Kelly
| Decision Date | 22 July 1976 |
| Citation | 552 P.2d 1301,275 Or. 585 |
| Parties | , 93 L.R.R.M. (BNA) 2168, 81 Lab.Cas. P 55,012 Charles W. PIO, as Assignee of E. A. Schlecht et al., Respondents, v. Lonnie J. KELLY, dba Kelly's Ideal Insulation, and Kelly's Insulation, Inc., an Oregon Corporation, Appellants. H. A. ANDERSON et al., as Trustees of the Construction Industry Advancement Fund of Oregon and Southwest Washington, Respondents, v. Lonnie J. KELLY, dba Kelly's Ideal Insulation, and Kelly's Insulation, Inc., an Oregon Corporation, Appellants. |
| Court | Oregon Supreme Court |
[275 Or. 586-A] James B. Ruyle, Portland, argued the cause for appellants. With him on the briefs were Wayne D. Landsverk and Sabin, Newcomb, Sabin & Meyer, Portland.
Paul T. Bailey, Portland, argued the cause for respondents. With him on the brief were Bailey, Doblie & Bruun, Portland.
These are two consolidated suits by the trustees of trust funds established under the terms of a labor agreement to enforce payment by an employer of contributions to such funds and for an accounting to determine the amounts due under the terms of that agreement. Defendants appeal from a judgment requiring payment of contributions, liquidated damages, attorney and auditor fees and costs in the sum of $38,197.42. We affirm.
Defendants contend on this appeal that the trial court erred in sustaining demurrers to affirmative defenses alleging: (1) that defendants signed the agreement under duress by the union; (2) that at the time of signing the agreement the union 'led defendant(s) to believe' that it applied only to union members; and (3) that the union failed to notify defendants of any intent to modify the agreement, as required by it, and that defendants never agreed to any such modification. Defendants also contend that the circuit court erred in accepting plaintiffs' audit as the basis for the amount awarded by its judgment.
Summary of the evidence and proceedings.
On December 12, 1969, defendants signed a memorandum agreement with the Oregon State Council of Carpenters agreeing to comply with all the terms of the Carpenter's Master Labor Agreement dated May 1, 1968, and of agreements establishing various trust funds and to pay into such funds the amounts provided for in such agreements. 1 Those agreements required that employers pay into such trust funds certain specified sums for 'each compensable man-hour' worked by their employees.
Beginning with the month of February 1970 and continuing, with interruptions, through May 1974, defendants submitted 'remittance reports' to the trustees of the trust funds. No reports, however, were filed for some months during which defendants employed employees for which contributions should have been made, as shown by a later audit report submitted by defendants. In addition, reports were filed for some months which stated affirmatively that no such employees had been employed for such months, when in fact such employees had been employed, as shown by defendants' subsequent audit. Finally, these reports showed fewer employees and fewer hours worked by such employees than shown by defendants' subsequent audit. The contributions made by defendants for the entire period totaled $2,265.62.
On June 11, 1973, the trustees of the trust funds made a request of defendants for an accounting and for an audit of defendants' records. No response was received from defendants and plaintiffs' auditor was unable to contact the defendants. Defendant Kelly testified that he had previously received no communications of any kind from plaintiffs or from the union concerning trust fund contributions.
On September 12, 1973, plaintiffs filed these lawsuits. On August 8, 1974, after a hearing on plaintiffs' complaint and one of defendants' affirmative defenses, 2 the trial court entered an order directing defendants to make their records available for audit by plaintiffs.
An auditor engaged by plaintiffs then audited such records as were then made available to him by defendants and also talked with defendant Kelly, who provided additional information. He then prepared an audit report which showed that defendants owed contributions totaling $30,203.62, not including liquidated damages. A trial was then held, at which defendants made various objections to plaintiffs' audit report and requested additional time for the submission of an accounting of their own. That request was granted.
Defendants then prepared and submitted an audit report prepared by their accountant which showed that defendants owed additional contributions totaling $12,574.76. The trial was then resumed for the taking of further testimony relating to the two audit reports. Defendants' objections to plaintiffs' audit report will be discussed in some detail in connection with defendants' assignment of error relating to that report.
After considering the evidence and arguments submitted by both parties, the trial court entered judgment in amounts based upon plaintiffs' audit report.
Defendants allege as their first affirmative defense that:
[1,2] In order for duress to be a defense in an action to enforce a contract the conduct complained of as constituting duress must be wrongful. 3 The same is true in actions to enforce a collective bargaining agreement. 4 Both parties discuss the problem arising under this affirmative defense in terms of threats of strikes or picketing.
Thus, plaintiffs contend that the threat of a strike or picketing is not such duress as to constitute a defense in such an action because strikes and picketing are not unlawful as economic pressure to induce employers to sign collective bargaining agreements. 5
To the contrary, defendants contend that a strike or picketing to induce them to sign the agreement involved in this case would be unlawful because it is a 'pre-hire' contract and that strikes and picketing in the construction industry to force the execution of 'pre-hire' contracts have specifically been held to be unlawful, based on the legislative history of § 8(f) of the National Labor Relations Act, 29 U.S.C. § 158(f), which authorizes such agreements in that industry despite the fact that the 'majority status' of the union has not been established at the time of the signing of such contracts. 6 Such conduct would be unlawful, according to defendants, because it would constitute an unfair labor practice under § 8(b)(7)(C) of the National Labor Relations Act, 29 U.S.C. § 8(b)(7)(C).
To this contention plaintiffs respond that even if such a strike or picketing would have been unlawful as an unfair labor practice in this case, defendants' exclusive remedy in such an event was by the filing of an unfair labor practice charge with the National Labor Relations Board under § 10(b) of that Act, 29 U.S.C. § 160(b), within six months from the alleged violation, as required by the terms of that Act. 7 Plaintiffs also cite cases holding that in actions to enforce contracts for contributions to union pension funds in which defendants contend that such contracts are unenforceable because of duress, as well as misrepresentations, such contentions will be rejected when it appears that such defendants have made contributions to such funds for some time and have failed to take steps promptly to rescind such contracts for duress. 8
Defendants contend, however, that there could be no ratification of this contract 'so long as the duress continues,' and that 'it will require proof by plaintiffs to establish that the duress ceased and ratification then took place.' 9
Assuming, however, as a matter of pleading, that defendants alleged sufficient facts to constitute a defense and that the trial court erred in sustaining plaintiffs' demurrer to that defense, it does not necessarily follow that we must reverse this case and remand it for a trial on the issues raised by that affirmative defense. A trial court will not be reversed for an error in a ruling on a motion or demurrer to pleadings if the case has proceeded to trial and if it appears affirmatively from the record as a whole that no prejudice resulted from such a ruling. 10 This is particularly true where, as in this case, the proceeding is in equity, with the result that we try the case De novo on appeal on the record as made in the trial court.
In this case we are satisfied that no prejudice resulted from the sustaining of plaintiffs' demurrer to defendants' affirmative defense of duress because it affirmatively appears from the record that defendants could not have prevailed with that defense by reason of the following facts:
(1) Defendants' affirmative defense alleged that the defendant Kelly 'signed the document referred to in the amended complaint as Exhibit A' under duress.
(2) That contract, as signed on December 12, 1969, included the following provision:
'This memorandum Agreement shall remain in full force and effect until May 31, 1971 and shall continue from year to year thereafter unless either party shall give written notice to the other of a desire to change or cancel it at least sixty days prior to May 31, 1971, or May 31, of any succeeding year. * * *'
(3) Evidence offered on trial showed that defendants made 'remittance reports' to the trustees of the pension funds in question, with payments of contributions to such funds for at least some employees, and at least intermittently, during the period February 1970 to and including May 1974.
It thus appears to be clear from the record that defendants filed such reports and paid contributions to the pension...
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