Roland Killian & Dennis Bailey v. International Union Of Operating Engineers, Resp ( 2016 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
ROLAND KILLIAN; DENNIS BAILEY and
DEBRA BAILEY, No. 74024-5-1
Appellants, DIVISION ONE
v. PUBLISHED OPINION
INTERNATIONAL UNION OF
OPERATING ENGINEERS LOCAL 609-A,
Respondent,
SEATTLE PUBLIC SCHOOLS, a
municipal corporation,
Defendant. FILED: August 22, 2016
Appelwick, J. — The trial court dismissed Killian and Bailey's lawsuit
against Local 609 for breach of the duty of fair representation and the
unauthorized practice of law as time barred. It denied their motion to amend the
pleadings to add a Consumer Protection Act1 claim. Killian and Bailey's claims
against Local 609 all flow from conduct of the union representative in the course
of the grievance procedure provided in their collective bargaining agreement.
Chapter 19.86 RCW.
No. 74024-5-1/2
These claims are subsumed in the duty of fair representation. The claims were
not timely filed. We affirm.
FACTS
Roland Killian and Dennis Bailey (appellants) were employed by Seattle
Public Schools (SPS). Killian worked as a grounds foreman, overseeing school
grounds personnel and other gardeners. Bailey was a grounds worker and
gardener. The appellants were both members of the International Union of
Operating Engineers, Local 609-A (Local 609). Local 609 is the collective
bargaining unit for employees of SPS, including grounds employees.
On September 7, 2011, SPS sent the appellants letters informing them
they were being placed on administrative leave because of allegations that they
were misusing SPS resources. On December 18, 2012, SPS informed the
appellants that it concluded there was proper cause to terminate their
employment for misconduct. It told the appellants that their employment would
be terminated effective December 27, 2012. SPS noted that the appellants could
appeal the termination decision through the grievance procedure provided in the
collective bargaining agreement (CBA).2
Local 609 filed grievances on behalf of the appellants, alleging they were
disciplined without just cause and progressive discipline in violation of the CBA.
2 Article XVIII of Local 609's CBA outlines the grievance procedure. The
grievance process is divided into steps—Step 1, Step 2, Step 3, and Step 4. If a
grievant remains unsatisfied and reaches Step 4, the grievant may request
mediation or alternative dispute resolution. If the grievance is not settled to the
grievant's satisfaction, the grievance may then be submitted to final and binding
arbitration. The arbitration is conducted by an arbitrator under the rules of the
Public Employment Relations Commission.
No. 74024-5-1/3
Local 609 representative Mike McBee represented the appellants during the CBA
grievance process. In March 2013, the appellants sought the assistance of
outside counsel to pursue individual civil claims against SPS. SPS denied the
grievances at Steps 1 through 3. After SPS denied the grievances at Step 3,
McBee proposed mediation. The appellants expressed concern to McBee about
how the mediation would affect their individual civil claims. McBee told the
appellants that the mediation was intended to address only the union claims. He
also told them that their outside counsel was not allowed to participate in the
mediation.
On June 13, 2013, SPS and Local 609 filed a joint grievance mediation
request with the Washington Public Employment Relations Commission (PERC).
The parties proceeded to mediation with PERC. McBee was present at the
mediations. Mediation began on August 5, 2013. The first day of mediation
ended without settlement after SPS offered a monetary settlement much lower
than what was sought. On September 9, 2013, the second day of mediation,
SPS made higher monetary offers to the appellants, but the appellants rejected
them. That same day, McBee presented SPS's monetary offers to settle the
grievances to Local 609's executive board. At this time, the board voted to move
the grievances to arbitration, but it reserved the right to rescind that decision if
SPS improved its settlement offer. McBee informed the appellants that the board
had voted to proceed to arbitration, but that Local 609 would consider accepting
a higher settlement offer from SPS in the future.
No. 74024-5-1/4
On September 17, 2013, after the two unsuccessful mediation attempts,
SPS offered to settle Local 609's grievances and pay $100,000 to Killian and
$75,000 to Bailey if each of them would agree to release all legal claims against
SPS. That day, McBee suggested to board members that Local 609 should
accept SPS's offer and not proceed to arbitration. He noted that the settlement
offer was the largest offer he had seen from SPS for one of its members.
McBee's e-mail also stated:
I have calls into both grievants but remember, the grievance
belongs to the union and we decide to proceed or not. I will be
recommending to both of them that they consult their attorney
before deciding to accept o[]r reject their individual offers. If they
reject, and it's up to them, they can pursue their claims in court.
The board voted to settle the grievances and not proceed to arbitration in
exchange for SPS extending the offer to the appellants.
That same day, outside counsel for the appellants, Chellie Hammack,
wrote to counsel for Local 609, Kathleen Phair Barnard, summarizing various
conversations that the two attorneys had in the past regarding the appellants'
claims. Hammack also summarized conversations she had with her clients.
Hammack stated that she had previously expressed concern that SPS might
attempt to engage the appellants in a discussion that included settlement of all of
their claims during the mediation process. She noted that she reviewed a draft
settlement agreement after one of the mediation sessions, and it was clear that
SPS was attempting to resolve the appellants' individual civil claims. Hammack
stated that McBee never told her clients to notify her when the issue of waiver of
civil claims arose at the mediation. She further stated that McBee had informed
No. 74024-5-1/5
her clients that if they did not accept the settlement offer from SPS, Local 609
would decline to represent them further and would not pursue arbitration on their
behalf. And, that the appellants felt pressured to accept the offers. She stated
she believed that Local 609's conduct was inappropriate, and that she had the
right to be contacted if and when her clients' individual civil claims were involved
in the settlement discussions.
Local 609 and SPS entered into a settlement agreement on September
24, 2013. The appellants refused SPS's final settlement offers. When Hammack
contacted SPS to discuss the possible settlement of the appellants' individual
civil claims, SPS indicated that it had already extended an offer of resolution of
those claims to Local 609, and it was not interested in pursuing further
discussions.
On May 29, 2014, Bailey and Killian filed complaints against both Local
609 and SPS, and the cases were later consolidated. The appellants brought a
claim of unlawful discrimination3 and a claim of breach of contract against SPS.
And, they alleged that Local 609 had breached its duty of fair representation
(DFR) and had negligently engaged in the unauthorized practice of law. On May
29, 2015, Local 609 moved for summary judgment, alleging that all of the
appellants' causes of action were encompassed by Local 609's DFR claim. It
asserted that the statute of limitations period for DFR claims is six months and
that the appellants' claims were consequently time barred. On June 29, 2015,
the appellants moved to amend their complaint to include a Consumer Protection
3 Bailey's complaint also included a claim of retaliation against SPS.
No. 74024-5-1/6
Act4 (CPA) claim. On August 4, 2015, the trial court granted Local 609's motion
for summary judgment. The trial court also denied the appellants' motion to
amend, reasoning that any CPA claim would in substance be a DFR claim that
would be barred by the applicable statute of limitations.
The appellants appeal.
DISCUSSION
The appellants argue that the trial court erred when it granted Local 609's
motion for summary judgment based on the statute of limitations. They assert
that even iftheir claims are all effectively DFR claims, the statute of limitations for
those claims is two years, rendering their lawsuit timely. Finally, they contend
that even if the statute of limitations period is six months, summary judgment is
improper. They maintain this is so, because there are genuine issues of material
fact about whether the appellants failed to file their action within the statute of
limitations period.
The trial court granted Local 609's summary judgment motion as to all of
the appellants' claims on the basis of the statute of limitations. Therefore, it was
presumably persuaded by Local 609's argument that the appellants'
unauthorized practice of law claims were subsumed by their DFR claims as a
matter of law and that a six month statute of limitations applied to all of the
claims.
This court reviews summary judgment orders de novo. Hadlev v. Maxwell,
144 Wash. 2d 306, 310-11, 27 P.3d 600 (2001). Summary judgment is appropriate
Chapter 19.86 RCW.
No. 74024-5-1/7
only where there are no genuine issues of material fact and the moving party is
entitled to judgment as a matter of law. CR 56(c); Peterson v. Groves, 111 Wn.
App. 306, 310, 44 P.3d 894 (2002). When considering the evidence, the court
draws reasonable inferences in the light most favorable to the nonmoving party.
Schaafv. Hiqhfield. 127 Wash. 2d 17, 21, 896 P.2d 665 (1995).
I. Unauthorized Practice of Law and CPA Claims
The appellants argue that their unauthorized practice of law and CPA
claims are not subsumed in their DFR claims, because those causes of action
are separate and distinct from their DFR claims. Consequently, they argue that
applying the statute of limitations for a DFR claim is not appropriate. Instead, the
appellants cite to RCW 4.16.080(2) and contend that the statute of limitations for
their negligent and unauthorized practice of law claim is three years. And, they
cite to RCW 19.86.120 and claim that the statute of limitations for their CPA claim
is four years. Thus, whether the appellants' other claims are subsumed in their
DFR claim determines which statute of limitations applies and whether the
appellants' claims are time barred.
In Washington, the Public Employees' Collective Bargaining Act (PECBA),
chapter 41.56 RCW, governs CBAs with state public employers. Navlet v. Port of
Seattle, 164 Wash. 2d 818, 828, 194 P.3d 221 (2008). Unions have a duty under
Washington state law to fairly represent their members—the duty of fair
representation (DFR). Lindsev v. Mun. of Metro. Seattle, 49 Wash. App. 145, 148,
741 P.2d 575 (1987). In the context of grievance processing, the DFR prohibits a
union from ignoring a meritorious grievance or processing that grievance
No. 74024-5-1/8
perfunctorily. Jd., at 149. A union must exercise special care in handling a
grievance that concerns a discharge, because it is the most serious sanction an
employer can impose, jd However, unions need not arbitrate every case. jd.
Courts should accord substantial deference to a union's decisions regarding
grievance processing, because a union must balance collective and individual
interests in making these decisions. \_± The collective bargaining system by its
very nature subordinates the interest of an individual employee to the collective
interests of all the employees in the bargaining unit. jd. The DFR is breached
when a union's conduct is discriminatory, arbitrary, or in bad faith. Id. at 148.
While federal law generally preempts the field of labor law, it does not
govern over CBAs with state public employers. Navlet, 164 Wash. 2d at 828. But,
this court may look to the interpretation of federal labor law where the law is
similar to state law. Id. at 828-29: Allen v. Seattle Police Officers' Guild, 100
Wash. 2d 361, 372, 670 P.2d 246 (1983). Here, the parties rely predominantly on
federal case law.
Local 609 cites to the Ninth Circuit case, Peterson v. Kennedy, 771 F.2d
1244 (9th Cir. 1985), to support its assertion that the appellants' claims are
subsumed in their DFR claims. Peterson concerned a legal malpractice claim
against a union-employed attorney. Id. at 1251. The plaintiff-employee claimed
that the union attorney remained subject to liability for professional malpractice
independent of the union's potential liability for breach of its DFR. Id. at 1256.
The Peterson court rejected this argument, and held that legal malpractice claims
against union attorneys were subsumed as DFR claims against the union. Id.
8
No. 74024-5-1/9
In holding that the plaintiffs legal malpractice claims against the union
attorney were subsumed, the Peterson court began with a discussion of the
Atkinson5 rule. Id In Atkinson, the United States Supreme Court held that
individual damage claims may not be maintained against union officials for acts
that are undertaken on behalf of the union. Peterson, 771 F.2d at 1256. The
basis of the rule is that historically, only the union was to respond for union
wrongs. Atkinson v. Sinclair Refining Co., 370 U.S. 238, 247-48, 82 S. Ct. 1318,
8 L. Ed. 2d 462 (1962). And, in Peterson, the court stated that the Atkinson rule
applies to and bars malpractice claims against attorneys representing the union.
]g\ at 1258. The court reasoned that where the attorney performs a function in
the collective bargaining process that would otherwise be assumed by the
union's business agents or representatives, the rationale behind the Atkinson
rule is applicable, jd.
The appellants claim that Peterson is not applicable in this case, because
the issue before the court in that case was different. In Peterson, the plaintiff-
employee brought DFR claims against the union, but the legal malpractice claims
against only the union attorney in his individual capacity. See id. at 1251, 1256.
Therefore, the Peterson court's discussion and reasoning surrounding whether
the plaintiff's legal malpractice claim was subsumed was in response to a
different question. The court was considering whether a legal malpractice claim
against an individual union attorney is subsumed in a DFR claim against a union
5 Atkinson v. Sinclair Refining Co., 370 U.S. 238, 82 S. Ct. 1318, 8 L. Ed.
2d 462 (1962).
No. 74024-5-1/10
that alleges the union, through its representatives, gave erroneous advice. Id at
1251.
We acknowledge that Peterson is factually distinguishable in this regard.
Here, the appellants' lawsuit was filed against the union itself rather than an
individual union employee. Still, we find the Peterson court's reasoning
instructive here. The Peterson court specifically based the rule it was adopting—
that a union attorney is not subject to individual liability for acts performed on
behalf of the union in the collective bargaining process—on a functional
assessment of the attorney's role as a union representative within the collective
bargaining process. Id at 1259. Notably, the court went on to say:
Our decision does not mean that union members are
necessarily without a remedy when attorneys employed by the
union fail to process grievances adequately. If an attorney's
conduct falls within the "arbitrary, discriminatory or bad faith"
test... the union member may sue the union for breach of the duty
of fair representation.
|d at 1259. Thus, when the union attorney is performing acts on behalf of the
union in the collective bargaining process, the plaintiff's cause of action lies
against the union itself and it is a DFR claim.
The appellants also attempt to distinguish Peterson, by claiming that Local
609's actions were not within the scope of the collective bargaining process,
because they were not authorized by the CBA.6 In a light most favorable to the
6 The only authority the appellants cite to support this assertion is an
unpublished Ninth Circuit opinion issued in 2000. Therefore, we do not consider
it. See GR 14.1(b) (a party may cite an unpublished opinion as authority only if
citation to that opinion is permitted under the law of the jurisdiction of the issuing
court); FRAP 36.3 (stating that unpublished dispositions in the Ninth Circuit
10
No. 74024-5-1/11
appellants, the allegations for the unauthorized practice of law claim amount to
the following: Local 609 engaged in the unlawful practice of law when it
negotiated a settlement of the appellants' civil claims, advised the appellants that
the amount offered for resolution of those claims was fair and reasonable,
advised the appellants to accept the settlement offer, and participated in and/or
approved the drafting of the settlement agreement that provided for resolution of
all of the appellants' claims and set out an amount of damages and costs
associated with their individual civil claims. The basis of the appellants' CPA
claim is that the allegations supporting the unauthorized practice of law claim
also support a CPA claim.
Like in Peterson, McBee represented the union. All of the allegedly
improper acts by Local 609 occurred within the collective bargaining mediation
process between the appellants and SPS. Any alleged harm flowed from Local
609's settlement with SPS and the termination of the grievance process. The
unauthorized practice of law claim is a legal negligence claim as was the claim in
Peterson. What is different is that McBee was not an attorney. We hold that
when a nonattomey union representative is alleged to have engaged in the
unauthorized practice of law in the course of the grievance process under the
CBA, the Peterson rule applies.
Therefore, any unauthorized practice of law claim arising in the course of
the grievance procedure is subsumed in a DFR claim against the union. And,
issued before January 1, 2007 may not be cited except in limited circumstances
that do not apply here).
11
No. 74024-5-1/12
because the appellants' CPA claim is based on the appellants' unauthorized
practice of law claim, we conclude that their CPA claims are also subsumed in
the DFR claim against the union.7 All of the appellants' claims are subject to the
statute of limitations for DFR claims.
II. DFR Statute of Limitations
The appellants cite to RCW 4.16.1308 and assert that the proper statute of
limitations period for DFR claims is two years. By contrast, Local 609 cites to
Imperato v. Wenatchee Valley College, 160 Wash. App. 353, 247 P.3d 816 (2011)
and contends that the applicable statute of limitations period is six months.
In Imperato, Imperato filed an action in superior court almost eight months
after he was discharged, alleging breach of contract against his employer and a
DFR claim against his former union, jd at 356. The defendants filed a motion
for summary judgment, claiming that Imperato's action was barred by the statute
of limitations. Id at 357. The trial court granted summary judgment in favor of
the defendants. Id
In determining the applicable statute of limitations for Imperato's claims,
the Imperato court noted that the DFR claims should be treated as unfair labor
claims under Washington law. Id at 360. It noted that unfair labor practice
7 Because we reach this conclusion, the trial court did not abuse its
discretion when it denied the appellants' motion to amend their complaint to add
CPA claims. See Ino Ino. Inc. v. City of Bellevue, 132 Wash. 2d 103, 142, 937 P.2d
154, 943 P.2d 1358 (1997) (stating that a trial court does not abuse its discretion
when it denies a motion to amend because the new claim is futile or untimely).
8 RCW 4.16.030 is a catch-all provision that provides a two year statute of
limitations for those claims not referenced elsewhere by the legislature. Imperato
v. Wenatchee Valley College, 160 Wash. App. 353, 360, 247 P.3d 816 (2011).
12
No. 74024-5-1/13
claims are addressed by a six month statute of limitations set forth in RCW
41.56.160(1) and RCW 41.80.120(1). id at 360-61. But, that those statutes only
establish the statute of limitations for unfair labor practice claims that are
specifically filed with PERC. Id at 355-56, 361. Thus, the Imperato court was
tasked with deciding which statute of limitations applies when a union employee
files directly in superior court instead of with PERC. Id at 361.
The court noted that the statutes were silent as to whether unfair labor
practice claims filed in superior court were subject to the statute of limitations
contained in RCW 41.56.160(1) and RCW 41.80.120(1). jd at 362. But, the
Imperato court ultimately held that the six month statute of limitations applies to
DFR claims filed directly in superior court. Id at 364. It reasoned that
application of the six month statute of limitation period to DFR claims would serve
several important policies: (1) It would prevent piecemeal litigation; (2) Applying a
different statute of limitations to DFR claims filed in superior court would frustrate
the role of PERC in promptly resolving labor disputes; and (3) It would provide
consistency, because federal law also establishes a six month statute of
limitations, jd In so holding, the Imperato court rejected the argument that it
should apply the three year statute of limitations in RCW 4.16.080, the six year
statute of limitations for breach of a written agreement in RCW 4.16.040, or the
two year statute of limitations in RCW 4.16.130. ]d at 362, 364.
The appellants do not attempt to distinguish Imperato. Instead, they
merely argue that "the two year statute of limitations [in RCW 4.16.130] is the
most appropriate and . . . [the] Imperato decision is in error." They argue that
13
No. 74024-5-1/14
had the legislature intended DFR claims to be subject to the six month statute of
limitations, it would have done so explicitly by statute. We adhere to Imperato.
To the extent the appellants' claims are considered DFR claims, they are subject
to a six month statute of limitations period.
III. Expiration of the Statute of Limitations
The appellants argue that even accepting the six month statute of
limitations period, there are issues of material fact surrounding when the statute
of limitations period began. They assert that a discovery rule applies and when
they knew or reasonably should have known of all the essential elements of their
causes of action is a question of fact for the jury.
The appellants cite to Ninth Circuit case law to support their assertion.
Federal law dictates that the statute of limitations begins to run when an
employee knows or should know of the alleged breach of DFR. Harris v. Alumax
Mill Prod., Inc., 897 F.2d 400, 404 (9th Cir. 1990). In Harris, the court
determined that this date for a federal DFR claim was no later than the date on
which the employee was informed by a union representative that the union would
not be pursuing a grievance on his behalf. Id. The appellants do not cite to any
Washington state cases explicitly discussing when state DFR causes of action
accrue. But, they assert that under Washington law, the common law discovery
rule applies to all statutes of limitations in the absence of legislation limiting the
application of the rule. Under Washington's common law discovery rule, a cause
of action accrues when a claimant knows, or in the exercise of due diligence,
should have known all the essential elements of the cause of action. Funkhouser
14
No. 74024-5-1/15
v. Wilson, 89 Wash. App. 644, 666-67, 950 P.2d 501 (1998), affirmed by C.J.C. v.
Corp. of Catholic Bishop of Yakima, 138 Wash. 2d 699, 985 P.2d 262 (1999).
The appellants emphasize that there are issues of material fact
surrounding when they had reasonable notice that Local 609 was no longer
pursuing their grievances and when they knew of all essential elements of the
cause of action. The appellants point the court to several facts in the record that
they claim show they were confused about whether Local 609 was going to
advance the grievances to arbitration.
Local 609 responds that Hammack's September 17, 2013 letter to Barnard
illustrates that the appellants and Hammack knew on that date. In that letter,
Hammack stated,
Today, after meeting with both my clients to discuss the issues, and
after our discussion, Mr. McBee called my clients again extending
an offer made by SPS. Further, Mr. McBee told both of my clients
that if they did not accept the offers extended the union would
decline to represent them further and would not pursue an
arbitration on their behalf.
But, Hammack also noted that McBee was trying to pressure the appellants into
settling their civil claims without the benefit of counsel. And, she noted that
Barnard had promised to make sure that Hammack was notified if settlement of
the civil claims was involved. Consequently, she concluded the letter by stating
that she needed clarification of the union's position. Local 609 maintains that
even if the September 17 letter is insufficient to establish knowledge, October 12,
2013 would be the next appropriate date—when Bailey heard the final
announcement that Local 609 would not be advancing their claims to arbitration.
15
No. 74024-5-1/16
But, the appellants claim that, to date, they have not received a written
notice about the status of their grievance. The appellants cite to no legal
authority to support their implicit assertion that only written notice triggers the
knowledge required for the statute of limitations to run. And, even if written
notice was required, on October 18, 2013, Barnard wrote to Hammack and
stated,
In my letter of October 16, 2013, I detail the two
communications191 you sent me on September 17, 2013,
acknowledging that you knew that Local 609 had decided not to
proceed to arbitration. Your assertions establish your knowledge.
Your latest letter asks that the Union put its position in writing. My
October 16I101 letter did that already.
This written communication left no room for doubt about notice of the union's
position.
Therefore, even assuming the statute of limitations did not begin to run
until Local 609 provided the appellants with written notice, and even assuming
that written notice was not adequately provided until October 18, 2013, the
appellants' action is still untimely. The appellants filed their complaints on May
29, 2014. At the very least, the appellants' complaints were filed over a month
after the expiration of the six month statute of limitations period.11
9 The second September 17 communication referenced in the October 16
letter is a voicemail from Hammack.
10 This letter told Hammack that she had known since September 17, 2013
that Local 609 had decided to accept SPS's offer to settle the two grievances.
And, that the appellants were notified on that date that whether or not they
agreed with the settlement, Local 609 had agreed to the settlement and would
not proceed to arbitration.
11 By October 18, 2013, Local 609 had already engaged in all of the
allegedly improper legal advice. Therefore, to the extent the appellants had
viable DFR causes of action against the union based on earlier "unauthorized"
16
No. 74024-5-1/17
Finally, the appellants assert that the statute of limitations is subject to
tolling based on a provision in the CBA. And, the appellants assert that even if
the statute of limitations in this case ran, equitable tolling and/or estoppel applies
here. The appellants base these arguments on the contention that Local 609's
actions in pursuing their grievances were contradictory. And, that they were
never provided with any written notices of any deadlines or the outcome of their
grievances despite repeated requests. Again, the appellants cite to no authority
to support the proposition that Local 609 had to provide written notice of its
decision about the grievances. And, Barnard's October 18 letter unequivocally
reiterated that Local 609 would not be pursuing arbitration. Therefore, we reject
the appellants' arguments regarding tolling.
We affirm.
WE CONCUR:
L~Jj.
legal advice, the statute of limitations for those claims would also have certainly
expired prior to the filing of the appellants' complaints.
17