Reid Burton Const., Inc. v. Carpenters Dist. Council of Southern Colorado

Decision Date31 January 1980
Docket NumberNo. 77-1458,No. 1340,AFL-CI,D,1340,77-1458
CourtU.S. Court of Appeals — Tenth Circuit
Parties103 L.R.R.M. (BNA) 2475, 88 Lab.Cas. P 11,833 REID BURTON CONSTRUCTION, INC., a Colorado Corporation, Plaintiff-Appellee, v. CARPENTERS DISTRICT COUNCIL OF SOUTHERN COLORADO, and Localof the United Brotherhood of Carpenters & Joiners of America,efendants-Appellants.

Robert I. Cohn, Denver, Colo. (Robert G. Good and Martin Semple, of Good & Stettner, Denver, Colo., were on the brief) for plaintiff-appellee.

John W. McKendree, Denver, Colo. (McKendree & Lubin, Denver, Colo., were on the brief) for defendants-appellants.

Before HOLLOWAY, DOYLE and LOGAN, Circuit Judges.

HOLLOWAY, Circuit Judge.

This appeal brings before us for the second time a dispute involving alleged breach of the no-strike clause of a collective bargaining agreement, asserted as a § 301 suit under 29 U.S.C. § 185, between plaintiff Reid Burton Construction, Inc. (Burton), and defendants Carpenters District Council of Southern Colorado (District Council) and Local 1340 of the United Brotherhood of Carpenters and Joiners of America, AFL-CIO (Local 1340 or Local).


The relevant facts are as follows. The complaint (II R. 1-6), filed July 13, 1973, and the amended complaint (II R. 73-77) 1 based jurisdiction on Section 301 of the Labor-Management Relations Act of 1947, as amended, 29 U.S.C. § 185, 2 and in paragraph 5 alleged that defendants were parties to the collective bargaining agreement and that the agreement governed the relationship between the parties. Following denial of their motions to dismiss, 3 defendants on November 9, 1973, filed an answer 4 in which they denied the allegations of paragraph 5, stating that District Council was party to an agreement with plaintiff but that Local 1340 was not a party. The answer also asserted the contract's arbitration clause as a bar to plaintiff's action and as the basis of a counterclaim for breach of the agreement and damages. 4a

Defendants maintained this position throughout pretrial and discovery proceedings. See generally I R. 115-116. On July 18, 1974, they filed a Suggestion to Dismiss, stating that the pleadings and depositions on file showed on their face "that the controversy described therein is one within the exclusive jurisdiction of an arbitrator" under the contract's arbitration clause. In the brief supporting this suggestion defendants conceded that Local 1340 was subject to the agreement's terms and that Local "would be bound by an arbitral award" issued in accordance with them. But defendants made no motion to stay the court proceedings (see Brief of Appellants at 29 n.25), and no motion for an order directing plaintiff to arbitrate. 5 Their apparently changed position was "further obfuscated," the trial judge said (I R. 91); the judge noted that five days later in their amended pretrial statement defendants pleaded that "the Defendant Local 1340 is not a party to the aforementioned collective bargaining agreement with plaintiff." (I R. 91).

The case proceeded to trial on October 1, 1974. During trial, defense counsel questioned Mr. Burton to establish the point that he had not sought arbitration under the contract. The court then asked defense counsel if he would agree that he would arbitrate the question of damages and be bound by it, and counsel so agreed. The judge then referred to the loss of time and expense to the parties and loss of the court's time. (IV R. 49-51). Counsel further responded to questions by the court that defendants did demand arbitration, and that arbitration should be ordered under Boys Markets, Inc. v. Retail Clerk's Union, 398 U.S. 235, 90 S.Ct. 1583, 26 L.Ed.2d 199. (Id. at 111).

Later in the trial in response to further questioning by the court defense counsel admitted that he first requested, by mandatory injunction, an order for plaintiff to arbitrate "when requested to do so today." (IV R. 140). Defense counsel maintained, however, that defendants' position since filing of the answers had been that the appropriate forum was arbitration. (Id. at 142).

Because of the time already invested in the case and because of his view that defendants should not be permitted to frustrate the judicial process at that late date, the judge went ahead with the trial. During the trial, evidence was presented on the issues of breach of the no-strike clause, damages, various defenses and the relationship of the union organizations.

Subsequently, the trial judge issued the original opinion in which he held, inter alia, that the dispute itself was arbitrable. (III R. 314). In addition, relying on Operating Engineers Local 150 v. Flair Builders, 406 U.S. 487, 92 S.Ct. 1710, 32 L.Ed.2d 248 (1972), he held that the preliminary question whether defendants had not waived their right to arbitration by "evasive and dilatory" brief and pleading tactics in the district court should properly be decided by an arbitrator. (Id.). He ordered a stay of the district court proceedings, then later, upon plaintiff's motion, dismissed the suit altogether so that plaintiff might perfect an appeal. (III R. 315, 320).

In the first appeal, see Reid Burton Construction v. Carpenters District Council of Southern Colorado, 10 Cir., 535 F.2d 598, cert. denied, 429 U.S. 907, 97 S.Ct. 272, 50 L.Ed.2d 188 (1976), we upheld the trial court's determination that the dispute was properly arbitrable under the terms of the contract, but found that when the actions premising plaintiff's equitable defense to defendants' asserted arbitration right occurred solely before the court, it was improper to have given the arbitrator the equitable preliminary issues to decide. Accordingly, we remanded the case to the district court for determination of whether defendants, by evasive and dilatory pleading practices before that court, were prevented from asserting any right they may have had to arbitration. 6

On remand the district court found that defendants' conduct in court established an equitable defense to defendants' arbitration right and entered judgment for plaintiff for the predetermined 7 $10,801.97 in damages, plus interest and costs. Reiterating his views that he took a "dim view of defendants' whirlygig positions during the course of the litigation" and that "such sophistry as (defendants') does not help a court in its futile efforts to keep up with an overcrowded docket," the district judge found that "advertently or inadvertently the court and plaintiff's counsel were led down a primrose path by a failure on the part of defendants' counsel to communicate to the court and opposing counsel in a timely way the argument of defendants that the dispute was one subject to arbitration." (I R. 86). Having found that "defendants acquiesced in setting the case for trial " and that "their pretrial statement cheerfully estimated the length of trial to be held" (I R. 90), the court noted that even after their suggestion to dismiss "defendants made no offer to obtain nor did they agree to submit to binding arbitration." (I R. 92) (Emphasis added).

Though observing that "the unfortunate results may have been largely inadvertent rather than intentional" (I R. 93), the court found that the "impact on the court and on plaintiff were the same no matter what the intent of defense counsel. The pleadings and briefs filed for defendants were evasive and dilatory, and whether they were so because of intent or as a result of negligence, plaintiff and the court were lulled into a belief that defendants wanted the court to try the lawsuit, and that's what the court did." (Id.).

Finally, noting that "(t)he unions played games with plaintiff and the court too long to now insist on an injunctive order requiring plaintiff to arbitrate this stale dispute," the court concluded that "the record in this case demonstrates that the conduct of defendants in this case in this court establish the equitable defenses to arbitration mentioned by Chief Judge Lewis." (Id.).

This timely appeal follows, and we focus mainly on the findings and the holding against defendants' right to arbitration.


In urging reversal of the district court, defendants argue that they did not waive their right to assert the arbitration defense either by not moving for a stay or by participating in the litigation. More specifically, defendants contend that they raised their arbitration defense in a timely and proper fashion and without intentional misrepresentation of Local 1340's contract status; that the initial denial of Local's party status was made in good faith; and that, in any event, Burton has suffered no prejudice from the delay in demanding arbitration. Mere delay, they say, does not constitute waiver, absent such a showing of prejudice; defendants were not obligated to move for a stay; and the mere filing of a counterclaim does not waive the defense.

Defendants further contend that since alternative pleading is proper, a party need not rely exclusively upon the arbitration provisions of the contract, but may also seek damages for breach in the same action. It is not the inconsistency or apparent inconsistency of these pleadings, but rather any prejudice flowing therefrom, which determines the waiver issue. Thus "the counterclaim, rather than abandoning the arbitration defense, underscored its presence as an important element in the action."

We cannot agree that these points call for reversal of the trial court's findings. Generally, the parties to a contract can agree to settle disputes arising thereunder by arbitration. Indeed, the federal policy is to promote industrial stabilization through the collective bargaining agreement, and a major factor in achieving industrial peace is the inclusion of a provision for arbitration of grievances in the agreement. United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 578, 80 S.Ct. 1347, 1350, 4 L.Ed.2d 1409. However,...

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