Mun. Constr. Equip. Operators' Labor Council v. Cleveland , 197 Ohio App. 3d 1 ( 2011 )

[Cite as Mun. Constr. Equip. Operators' Labor Council v. Cleveland, 197 Ohio App.3d 1, 2011-Ohio-5834.]
Court of Appeals of Ohio
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
JOURNAL ENTRY AND OPINION
No. 96673
MUNICIPAL CONSTRUCTION EQUIPMENT
OPERATORS’ LABOR COUNCIL,
APPELLANT,
v.
CITY OF CLEVELAND,
APPELLEE.
JUDGMENT:
AFFIRMED
Civil Appeal from the
Cuyahoga County Court of Common Pleas
Case No. CV-739944
BEFORE: KILBANE, A.J., ROCCO, J., and E. GALLAGHER, J.
RELEASED AND JOURNALIZED: November 10, 2011
ATTORNEYS:
Climaco, Wilcox, Peca, Tarantino & Gar and Stewart D. Roll, for appellant.
Zashin & Rich Co., L.P.A., and Jon M. Dileno, for appellee.
MARY EILEEN KILBANE, Administrative Judge.
{¶ 1} Plaintiff-appellant, Municipal Construction Equipment Operators’ Labor Council,
appeals from the orders of the trial court that struck its motion to vacate and modify an
arbitration award entered in favor of defendant-appellee, the city of Cleveland, confirmed that
award, and denied the union’s complaint for declaratory judgment. For the reasons set forth
below, we affirm.
{¶ 2} In 2007, following an election conducted pursuant to R.C. 4117.07(C), the State
Employment Relations Board (“SERB”) certified the union as the exclusive representative of a
bargaining unit composed of a group of employees in Cleveland’s water and
property-management divisions. State ex rel. Cleveland v. Sutula, 127 Ohio St.3d 131,
2010-Ohio-5039, 937 N.E.2d 88. The parties entered into a collective-bargaining agreement on
February 5, 2007.
{¶ 3} Under the parties’ collective-bargaining agreement (“CBA”), a four-step procedure
is in place to deal with individual and group grievances.1 The grievance must be reduced to
writing within ten working days of the event, but it may be amended at any time prior to the start
of Step 3 proceedings. If the grievance procedure has not resolved the parties’ dispute, the
parties may submit the matter to final and binding arbitration.
1
A grievance is defined as “a dispute or difference between the city and employee(s) or the city and the union
concerning the interpretation and/or application of and/or compliance with any provision(s) of this Contract, including any and
all disciplinary actions.”
{¶ 4} The undisputed facts indicate that on December 7, 2009, the city sent a letter to the
union requesting various wage and benefit concessions in order to help balance the city’s budget
and avert layoffs. This was followed by a counterproposal to the union membership for
ratification. The union rejected the counterproposal on December 22, 2009, and later that day,
the city announced the layoff of five water-plant operators. The union’s counsel then inquired
whether the city would rescind the layoffs in exchange for other concessions proposed by the
union.
{¶ 5} On December 23, 2009, the union filed a grievance, alleging that the layoffs were
not due to lack of work or lack of funds. On January 4, 2010, prior to the completion of Step 1
of the grievance, the union voted to accept wage and benefit concessions and signed a
memorandum of understanding that amended the collective-bargaining agreement.
{¶ 6} The city maintained that the union’s grievance had become moot, but the union
maintained that it had entered into the memorandum of understanding by duress in order to avoid
the announced layoffs.
{¶ 7} The grievance proceeded to Step 2, then to Step 3, where the union repeated its
position that the layoffs were not the result of lack of work or lack of funds and that the
memorandum of understanding was obtained by duress. The city again denied the grievance.
{¶ 8} On April 16, 2010, the union demanded arbitration and sought reinstatement of the
workers and restoration of all lost wages and benefits. The city maintained that the request for
arbitration had become moot and that by adding the issue of duress, the union had materially
altered the grievance. The issue of arbitrability was separated from the remaining issues, and,
after considering the parties’ briefs and exhibits, the arbitrator issued an opinion finding that the
matter was not arbitrable. The arbitrator wrote:
[N]o layoffs occurred; the city rescinded the layoffs on January 8, 2010.
Consequently, the union’s grievance of the matter is moot, because the
union seeks a judgment and remedy on a controversy that no longer exists.
***
The union argues that the original grievance was amended to
include the issue of duress, which remains to be decided. Article 38,
Paragraph 106 [of the collective bargaining agreement] allows the union to
amend a grievance at any time up to the start of the Step 3 meeting and the
union amended the grievance prior to the city’s Step 3 response.
The Arbitrator agrees that once the layoffs did not occur, the
original grievance was moot. There was no longer a controversy
regarding proposed layoffs. If the union believed that it had entered into
the [memorandum of understanding] on January 4, 2010, under duress, the
union had 10 working days to file a grievance on the matter. However,
the union did not reduce the issue of duress to writing until March 19,
2010, when it attempted to amend the moot grievance. Even if the
amendment is viewed as a new grievance addressing a viable controversy,
the grievance was filed approximately two months too late.
***
The issue of duress does not involve the interpretation and/or
application and/or compliance with the provisions of this Contract. The
issue of duress is an issue of law and the parties agreed the arbitrator has
no jurisdiction over issues of law.
{¶ 9} On October 26, 2010, the union filed a complaint with the court of common pleas
in which it sought an order vacating the arbitrator’s award pursuant to R.C. 2711.10 and
resolution of the duress claim by declaratory-judgment. The clerk of courts served the
complaint on the city on November 2, 2010, but it was not served on outside counsel retained by
the city in this matter, as required by R.C. 2711.13.
{¶ 10} On November 24, 2010, the union filed a notice of filing of a motion and a
memorandum to vacate and modify the arbitration award, in which it again sought vacation of the
award under the provisions of R.C. 2711.10, and argued that it had acted within the three-month
time period of R.C. 2711.13, since the arbitration award was not mailed or personally delivered
to it as required by Rule 40 of the American Arbitration Association (“AAA”).
{¶ 11} Also on November 24, 2010, the city filed a motion to confirm the arbitration
award and/or strike the union’s motion to vacate the arbitration award, claiming that the union
had not filed a motion to vacate the award and that the union’s challenge to the arbitration award
was not filed and served upon the city’s counsel within the three-month time period established
in R.C. 2711.13.2 The city additionally filed a motion to dismiss the declaratory-judgment
claim for lack of subject-matter jurisdiction, arguing that such claims are within the exclusive
jurisdiction of SERB. On December 13, 2010, the city filed a motion to strike the union’s
motion and memorandum to vacate the award of the arbitrator as untimely.
{¶ 12} On March 9, 2011, the trial court granted the city’s motion to confirm the
arbitration award and to strike the union’s motion and memorandum to vacate and modify the
arbitration award as untimely. On March 14, 2011, the trial court granted the city’s motion to
dismiss the declaratory-judgment claim for lack of subject-matter jurisdiction. The union now
appeals and assigns three errors for our review.
{¶ 13} The first assignment of error states:
2
The city maintained that the arbitrator e-mailed the decision on August 20, 2010, the AAA e-mailed it on August 23,
2010, and that the union filed its motion one day past the statutory deadline (November 24, 2010) and served it two days past the
deadline (November 25, 2010).
The trial court erred by granting Defendant/Appellee’s March 10,
2011 Civ.R. 12(F) motion to strike Plaintiff/Appellant’s motion and
memorandum to modify and strike the arbitration award.
{¶ 14} Within this assignment of error, the union asserts that the city improperly invoked
Civ.R. 12(F) to dismiss its complaint. The union additionally claims that the trial court erred by
failing to treat its complaint as a “motion to vacate the arbitration award” within the meaning of
R.C. 2711.13 and in determining that its motion and memorandum to vacate were untimely.
{¶ 15} As to the applicability of Civ.R. 12(F), proceedings involving the confirmation or
vacation of an arbitration award are special statutory proceedings. MBNA Am. Bank, N.A. v.
Anthony, Tuscarawas App. No. 05AP090059, 2006-Ohio-2032, 2006 WL 1063752. Civ.R.
1(C) provides that the civil rules are by definition not to apply to procedural matters in special
statutory proceedings “to the extent that they would by their nature be clearly inapplicable.” Id.;
Buyer’s First Realty v. Cleveland Area Bd. of Realtors (2000), 139 Ohio App.3d 772, 745
N.E.2d 1069.
{¶ 16} Under Civ.R. 12(F),
[u]pon motion * * * the court may order stricken from any pleading any
insufficient claim or defense * * *.
{¶ 17} Pursuant to R.C. 2711.09, when a motion is made to confirm an arbitration award,
the court shall grant the motion if it is made within one year of the award, unless a timely motion
for modification or vacation has been made and cause to modify or vacate is shown. The
motion to modify or vacate must be made within three months of the award, pursuant to R.C.
2711.13.
{¶ 18} Applying the foregoing, we conclude that in general, proceedings to confirm or
vacate an arbitration award involve neither pleadings nor insufficient claims in pleadings. Thus,
Civ.R. 12(F) is generally not germane to such proceedings. Nonetheless, the union filed a
complaint in this matter, and the city, though citing Civ.R. 12(F), also invoked R.C. 2711.10 and
2711.13 in support of its motion to strike. In this particular matter, therefore, in light of the
unique procedural history, we cannot conclude that the city’s brief citation of Civ.R. 12(F) was
prejudicial or erroneous.
{¶ 19} As to whether a party may file a complaint in order to challenge an arbitration
award, R.C. 2711.13 provides for “[n]otice of a motion to vacate, modify, or correct an award
[which] must be served upon the adverse party or his attorney within three months after the
award is delivered to the parties in interest, as prescribed by law for service of notice of a motion
in an action.”
{¶ 20} There is authority that permits the challenge to an arbitration award by
“complaint,” Bailey v. Ohio Dept. of Transp., Franklin App. No. 07AP-849, 2008-Ohio-1513,
2008 WL 852616, but in a word of caution that court noted, “While a trial court may have some
flexibility with procedural rules, it lacks that flexibility when a party raises the expiration of the
applicable statute of limitations as a defense.” See also Gonda & Assoc. v. Flynn, Cuyahoga
App. No. 93566, 2010-Ohio-679 (stating, without criticism, that a complaint had been used to
challenge the arbitration award).
{¶ 21} Nonetheless, unlike a complaint, the motion filed under R.C. 2711.13 does not
require that the clerk of courts issue summons and perfect service. Instead, service must be
perfected by service on the attorneys for the parties prior to filing the application. Cleveland v.
Laborers Internatl. Union Local 1099, Cuyahoga App. No. 92983, 2009-Ohio-6313, 2009 WL
4406081. Thus, the motion must “be ‘served upon the adverse party or his attorney within three
months after the award.’ ” Id.; Thomas v. Franklin Cty. Sheriff’s Office (1998), 130 Ohio
App.3d 153, 156, 719 N.E.2d 977. Galion v. Am. Fedn. of State, Cty. & Mun. Emp. (1995), 71
Ohio St.3d 620, 646 N.E.2d 813.
{¶ 22} As to the start of the three-month period, the union insists that the award must be
mailed by traditional mail under Rule 40 of the Labor Arbitration Rules. We recognize that
under the traditional view, the postmark date was deemed controlling. See Citibank S. Dakota,
N.A. v. Wood, 169 Ohio App.3d 269, 2006-Ohio-5755, 862 N.E.2d 576, citing Girard v.
AFSCME Ohio Council 8, Local Union 3356, Trumbull App. No. 2003-T-0098,
2004-Ohio-7230, 2004 WL 30901889. However, subsequent to July 1, 2005, pursuant to Rule
36 and Rule 37 of the Labor Arbitration Rules, an award is rendered when it is transmitted by
e-mail to the parties:
36. Serving of Notice
Each party to a submission or other agreement that provides for
arbitration under these rules shall be deemed to have consented and shall
consent that any papers, notices, or process necessary or proper for the
initiation or continuation of an arbitration under these rules; for any court
action in connection therewith, or for the entry of judgment on an award
made thereunder may be served upon the party by mail addressed to the
party, or its representative at the last known address or by personal service,
in or outside the state where the arbitration is to be held. The AAA and
the parties may also use facsimile transmission, telex, telegram, or other
written forms of electronic communication to give the notices required by
these rules.
37. Time of the Award
The award shall be rendered promptly by the arbitrator and, unless
otherwise agreed by the parties or specified by law, no later than 30 days
from the date of closing the hearings as provided in Section 31, with five
additional days for mailing if briefs are to be filed or other documents are
to be transmitted pursuant to Section 28.
If oral hearings have been waived, the award shall be rendered no
later than 30 days from the date of transmitting the final statements and
proofs to the arbitrator.
The award shall be deemed to be “rendered” on the date it is
postmarked or otherwise transmitted to the AAA by the arbitrator, whether
by regular mail, electronically, or by telephone facsimile.
If an award is transmitted electronically or by facsimile, the
arbitrator shall promptly deliver an original copy to the AAA.
{¶ 23} Moreover, Rule 40 states:
Parties shall accept as legal delivery of the award the placing of the award
or a true copy thereof in the mail by the AAA, addressed to the party at its
last known address or to its representative; personal service of the award;
or the filing of the award in any other manner that is permitted by law.
{¶ 24} Thus, we conclude that the decision was rendered when it was transmitted by the
arbitrator by e-mail on August 20, 2010. Accord Laborers Internatl. Union Local 1099.
Accordingly, the three-month period was triggered at the latest as of August 23, 2010, the date on
which the AAA e-mailed it to the parties. Here, the motion to vacate the arbitrator’s award was
not filed and served upon counsel for the city until November 24, 2010. Thus, because the
union failed to file and serve within the three-month time period, the trial court properly granted
the city’s motion to strike.
{¶ 25} The first assignment of error is without merit.
{¶ 26} The second assignment of error states:
The trial court erred in its dismissal of Counts I and II of the
Complaint, which respectively sought vacation of an arbitration award,
and sought declaratory relief, for lack of subject-matter jurisdiction.
{¶ 27} In this assignment of error, the union maintains that the trial court had
subject-matter jurisdiction to address both its claim to vacate the arbitrator’s award under R.C.
2711.10, and its claim that the wage concessions were obtained by duress.
{¶ 28} The three-month deadline set forth in R.C. 2711.13 for filing and serving a motion
to vacate an arbitration award is mandatory and jurisdictional. Galion v. Am. Fedn. of State,
Cty. & Mun. Emp., Ohio Council 8, AFL-CIO, Local 2243, 71 Ohio St.3d at 622, 646 N.E.2d
813. As we noted previously, this mandatory and jurisdictional deadline was not met herein.
Therefore, this claim for relief was properly dismissed.
{¶ 29} With regard to the claim for declaratory judgment on the issue of whether the
wage concessions were obtained by duress, we note, with regard to procedure, that the Galion
court additionally held, at paragraph two of the syllabus:
R.C. Chapter 2711 provides the exclusive statutory remedy which
parties must use in appealing arbitration awards to the courts of common
pleas. An action in declaratory judgment cannot be maintained to
circumvent the clear legislative intent of R.C. Chapter 2711.
{¶ 30} The court explained:
If we were to sanction the use of declaratory relief in this case, then
parties challenging arbitration awards would be able to bypass the
stringent requirements that are needed to overturn, modify, or correct an
arbitration award.
{¶ 31} Moreover, with regard to the substantive nature of the claim, SERB has exclusive
jurisdiction where the claims “arise from or depend on the collective bargaining rights created by
R.C. Chapter 4117.” Id. This includes conduct that constitutes unfair labor practices under
R.C. 4117.11. Id. Changes in compensation that are alleged to have occurred outside of the
collective-bargaining process set forth a violation of R.C. 4117.11 that prohibits the restraint or
coercion of employees in the exercise of their collective-bargaining rights.3 See Consolo v.
Cleveland, 103 Ohio St.3d 362, 2004-Ohio-5389, 815 N.E.2d 1114.
{¶ 32} In accordance with the foregoing, we are compelled to conclude that the second
claim for relief, the declaratory judgment asserting that the city obtained wage concessions from
the union through duress, was properly dismissed. The declaratory-judgment action was not the
proper procedure in which to raise that challenge. Further, the claim is dependent upon
collective-bargaining rights created by R.C. Chapter 4117 and essentially asserts that the city
engaged in an unfair labor practice by determining wages outside of the collective-bargaining
process, by coercion, in violation of R.C. 4117.11(B).
{¶ 33} The second assignment of error is therefore without merit.
{¶ 34} The third assignment of error states:
The trial court erred in its March [14, 2011] journal entry granting
Defendant/Appellee’s motion to confirm the arbitration award without
first holding a hearing.
{¶ 35} The union next asserts that pursuant to R.C. 2711.09, the trial court was required
to hold a hearing before confirming the arbitration award and that the court should have held a
hearing to probe the issues of the arbitrator’s failure to hold a hearing, and the arbitrator’s
determination that it could not decide the issue of duress.
{¶ 36} R.C. 2711.09 governs orders to confirm an arbitration award and provide for a
hearing. CACV of Colorado, L.L.C. v. Hillman, Union App. No. 14-09-18, 2009-Ohio-6235,
2009 WL 4263330. Nonetheless, where the party challenging the arbitration award has failed to
3
R.C. 4117.11(B) provides: “It is an unfair labor practice for an employee organization, its agents, or representatives,
or public employees to:
(1) Restrain or coerce employees in the exercise of the rights guaranteed in Chapter 4117. * * *
(2) Cause or attempt to cause an employer to [commit an unfair labor practice].”
comply with the statutory time limits, no hearing is necessary because the “trial court’s authority
is limited to granting or denying the application to confirm the arbitration award.” Id.{¶ 37} In this matter, because the union did not file its challenge within the three-month
limitations period, the trial court’s authority was limited to denying the application to confirm the
arbitration award, so the failure to hold a hearing does not constitute prejudicial error. CACV of
Colorado, L.L.C.; Brookdale Senior Living v. Johnson-Wylie, Cuyahoga App. No. 95129,
2011-Ohio-1243, 2011 WL 917386 (where a party is provided ample opportunity to be heard
through the pleadings process and pretrial conferences, a hearing is not required by R.C.
2711.09).
{¶ 38} The third assignment of error is without merit.
Judgment affirmed.
ROCCO and GALLAGHER, JJ., concur.
_______________________