Monarch Fire Protection District v. Professional Fire Fighters of Eastern Missouri Local 2665, of the International Association of Fire Fighters (I.A.F.F.), Andy Stecko, Nick Smith, and Chris Gelven, Defendants/Respondents.

In the Missotrri Cotrrt of Appeals
Easterzt District
DIVISION THREE
MONARCH FIRE PROTECTION ) No. EDl 03728
DISTRICT, )
) Appeal from the Circllit Cotlrt
Plaintiff/Appellant, ) of St. Louis County
)
Vs. ) Honorable joseph L. Walsli, lIl
)
PROFESSIONAL FIRE FIGHTERS OF )
EASTERN MISSOURI LOCAL 2665, OF )
THE INTERNATIONAL ASSOCIATION )
OF FIRE FIGI~ITERS (I.A.F.F.), ANDY )
S'[`ECKO, NICK SMITH, AND CHRIS )
GELVEN, )
)
Defendaiits/Respondents. )
Filed: July 26, 2016
The plaintiff, Monarcli Fire Protection District, appeals the grant of summary judgment
entered by the Circuit Court of St. Louis County in favor of the defendants, Professioiial Fire
Figliters of Eastern Missoliri Local 2665, of the Iiiternational Association of Fire Fighters, Andy
Stecko, Nick Smitli, and Chris Gelven (collectively "the tiltiolr"), and the corresponding denial of
the district’s own motion for summary judgment in this case interpreting the parties’ collective-
bargaining agreement
Because the agreement has a fixed duration and does not intperniissibly delegate the
legislative function of the district’s publicly elected board_of directors, we affirm the trial court’s §
judgment
Fczctzzal and Proceciumf Bcrckgrourid
Monarch Fire Protection District is a fire-protection district, duly organized and existing
pursuant to Missotiri statute and operating within St. Louis County. In accordance with section
321 .20() RSMo. (Supp. 2014), the district has a board of directors that meets regularly and
exercises all powers of the board. The board consists of three directors, and elections for the
board are held every two years. The board’s powers include the po\,vei' to adopt fire protection
and prevention ordinances, and any other rules and regulations necessary to carry out the
business, objects, and affairs of the board and the district. Section 321 .600(12) RSMO. (2000).‘
The board’s powers also include rnanageinerrt, control, and supervision of all business affairs of
the district; liiring and retaining agents, ernpioyees, erigineers, and attorneys, including part-time
or volunteer firefighters; and exercising all rights and powers necessary or incidental to or
implied frorn the specific powers granted by Statute. See generally sections 321 .22O RSMo.
(Supp. 2013) and 321.600.
The union is an unincorporated association, certified by the State Board of Mediation as
the collective bargaining representative for the district’s privates, engineers, firefighters/
paramedics, captains, paramedic shift supervisors, probationary frrefighters/paramedics, fire
inspectors, secretaries, and rnainteriaxice personnel
After rnontlrs of good-faith negotiation, the district and the union reached a collective-
bargaining agreement that took effect January l, 2011 for a period of three years, up to and
including December 31, 2013. Section 5.02 of the agreement states:
This Collectively Bargained Agreernent shall take effect as of Jantlary l, 201 1, and shall
continue in full force and effect for a period of approximately three (3) years to and
including December 3 l, 2013.
‘ All statutory references are to RSMo. (2000) except as otherwise indicated
2
any time the niembership of its legislative body changes.z This would mean, for example, that
the einployineitt of first responders would be subject to the whim of the newest alderperson. No
individual or organization could conduct business with a public entity that repudiates its
agreements. Id.
The Missouri legislature has left no doubt as to what formalities a public entity should
observe to create a binding contract. Section 432.070 RSl\/Io. (Supp. 2013) provides the guide:
No county, city, town, village, school township, school district or other rnunicipal
corporation shall make any contract, unless the sarne shall be within the scope of its
powers or be expressly authorized by law, nor unless such contract be made upon a
consideration wholly to be performed or executed subsequent to the making of the
contract; and such contract, including the consideration, shall be in writing and dated
when made, and shall be subscribed by the parties thereto, or their agents authorized by
law and duly appointed and authorized in writing.
Here, the district’s board adopted the agreement as Ordinance No. 28. Here, the requirements
for a binding contract under section 432.070 were scrupulously followed. lndeed, no one
contends otherwise. Yet the district perseveres in asserting that it can tlnilaterally repudiate a
contract it entered into in accord with Missotlri law. With this argument, the district’s house of
cards careens toward its inevitable collapse.
Because the agreement does not delegate any legislative authority or po\vei' to the union,
we deny the district’s third, fourth, and fifth points
Corrcfus:'on
We conclude that the agreement has a fixed duration and does not impermissibly delegate
to the union the legislative function of the district’s publicly elected board of directors We
affirm the trial court’s grant of suinmaryjudgineiit in favor of the union, and its corresponding
denial of stunniary judgment to the district
2 Ironically, the district would exempt legislative bodies, which itormatly promulgate laivs, from the usual reach of
contract law.
ll
<.,W,..»W
LAWRENCE E. MOO Y, J
ROBERT M. CLAYT()N III, P.J. and
JAMES M. DOWD, J., concur.
Should a single significant issue arise that one oi' both parties believe warrants the
reopening of tlie agi'eement, the agreement inay be reopened for re-negotiation of specific
items, on such terms, as loiig as both parties in writing give forty-five (45) days’ n0tice.
This Agreement shall remain in effect during good faith negotiations and shall continue
to reinain in full force and effect until such time as a new Agreement is agreed upoii.
The agreement was presented to the district’s board of directors, and a majority of the board
adopted the agreement as Oi'dinance No. 28.
At the heart of the parties’ dispute lies section 5.02, paragraph 3 of the collective-
bargaining agreenient_laiiguage added at the insistence of the district~»»tliat provides as follows:
This Agreement shall reinaiii in effect duriiig good faith negotiations and shall continue
to remain in full force and effect until such time as a new Agreeinent is agreed upon.
On Deceinber l l, 2013, the district filed its petition seeking a declaratory judgment that section
5.02, paragraph 3 of the agreement is void, unenforceable, and against public policy and that the
section renders the agreement a contract of indefinite duratioii, which would hence be terminable
at will by either party. The union filed a counterclaim, seeking a declaratory judgment that
section 5.02 of the agreement is enforceable
The parties filed cross-inotioiis for suininary judginent. The trial court granted the
union’s motion for suinmary judgment, and denied the district’s inotioii. T he trial court
concluded that section 5.02 does not render the agreement a contract for an indefinite term
because it provides that the agreement terminates when either party fails to negotiate in good
faith to reach a new agreeineiit. The trial court also determined that section 5 .02, paragraph 3 of
the agreement does not impermissibly delegate the district’s legislative function to the union,
again because both parties are required to act in good faith to reach an agi'eement. The district
appeals
In five points on appeal, the district claims the trial court erred in granting the union’s
motion for summary judgment and in denying its contrary motion for summary judgment The
district makes two broad claims First, the district contends that section 5.02, paragraph 3
renders the agreement a contract ofindet`niite, indeterminate, and ttnlirnited duration, which
would then be terminable at the will of either party. Second, the district contends that section
5.02, paragraph 3 is void as contrary to law and public policy because it impermissibly delegates
the district’s legislative function to the union, impermissibly vesting the union with veto power
over district legislation, and purporting to bind successor district boards.
Discussion
Suininary judgment allows a trial court to enter judgment for the moving party where the
party demonstrates a right to judgment as a matter of law based on facts about which there is no
genuine dispute ITT Coznrnercz`cll Firt. Co)y). v. Micl'-A)n. Mai'ine Szlpply Corp., 854 S.W.Zd 37],
376 (Mo. banc 1993). Ou1' review is essentially de novo. Id.; Balfnzan v. O’Fallon Fz`re
Protection Dist., 459 S.W.Bd 465, 466 (Mo. App. E.D. 2015). When considering an appeal from
summary judgment, we review the record in the light most favorable to the party against whom
the court entered judgment. ]TT, 854 S.W.?.d at 376; Ballrrzcrn, 459 S.W.?)d at 466.
Generally, the denial of sunnnary judgment does not constitute a final, appealable
judgment Car'dz'rzal Pc.'r'tirer'.s‘, LLC v. Desco Inv. Co. L.L.C., 301 S.W.3d 104, 111 (Mo. App,
E.D. 2010). Atltliority exists, however, for the proposition that we may review the denial of
summary judgment where the inerits of the denial are intertwined with the propriety of an
appealable grant of summary judgment to the opposing party. Ia'.
Article I, section 29 of the Missouri Constitution announces that "einployees shall have
the right to organize and to bargain collectively through representatives of their own choosing."
This guarantee applies to employees in both the private and public sectors. Anz. Feclemtiori of
Teaclrers v. Ledbetter, 387 S.W.3d 360, 363 (l\/lo. banc 2012). Wheli bargaining, proposals are
made, and the other party either accepts or rejects them. Id. While the employer remains free to
reject any proposal, the right to bargain collectively still requires negotiations between the
employer and employee representatives to determine the conditions of employment. Id.
More particularly, section 105.520 provides that employees are granted the right to
present proposals to their employer through employee representatives; the employer is required
to meet, confer, and discuss the proposals; and the results of these discussions are to be placed in
writing and presented to the appropriate adininistrative, legisiative, or other governing body in
the form of an ordinance, resolution, bill, or other form required for adoption, Inodificatioii, or
rejection. Independence-Nctf’l Educ. As.s' ’11 v. Irtdepende:tce Schoo] Dist., 223 S.W.3d 131, 138
(Mo. banc 2007). “Tlie law makes clear that a public einployer is not required to agree to
anything." Id.
in its first two points, the district contends that section 5.02, paragraph 3 renders the
agreement a contract of indet`mite, indeterminate, and unlimited duration, which would be
terminable at the will of either party. In Point I, the district contends that the agreement is
terminable at will as a contract of indeftnite, indeterminate, and unlimited duration because
section 5.()2, paragraph 3 purports to bind the parties until they have agreed on a new collective-
bargaining agreement. The trial cotn't concluded that the section at issue does not render the
agreeineiit a contract for an indefinite term, but rather provides that either party may terminate
the agreement by acting in bad faith.
The first paragraph of section 5.02 provides that the agreement shall remain in effect
through December 31, 2013. But the third paragraph of section 5.02, which is at issue, states that
"[t]his Agreenierlt shall remain in effect during good faith negotiations and shall continue to
reinain in full force and effect until such time as a new Agreeinent is agreed upon." The plain
ineaniiig of the first phrase_“[t]his Agreenient shall remain in effect during good faith
iiegotiations"-is that if either pa1'ty ceases to engage in negotiations in good faith, then the
agreement will no longer be in effect.
The district argues that given the conjunctive "and" linking the first and second phrases
of the disputed paragraph, even if bad-faith bargaining occurs, the agreement remains in full
force and effect until such time as the parties reach a new collective-bargaining agreement. in
other words, the district would have us interpret the language of section 5.02, paragraph 3 to
mean that the agreement forever binds the parties unless they reach a new agreement. We reject
this iriterpretation.
First, we must read a contract in its entirety and give effect to each part. Dzzbir/sky v.
Cliemz`cal Bank, 748 S.W.2d 957, 959 (Mo. App. E.D. 1988). A construction that gives a
reasonable meaning to all provisions will be preferred to one that leaves a portion ofthe contract
useless or inexplicable Id. The first phrase "{t]liis Agreeinent shall reinain in effect during good
faith negotiations" must have some meaning of its own, apart from the second phrase that states
"[this agreement] shall continue to remain in full force and effect until such time as a new
Agreenient is agreed tipoli." If the second phrase were intended to fully subsume the first
phrase-in other words if the agreement is meant to reinaiii in effect regardless of the lack of
good~faith negotiations#then the first phrase serves no purpose whatsoever.
Wliile the second phrase cannot completely subsume the first, at the same time the two
phrases are not completely independent of one another. The word "and" here does not link two
wholly distinct, independent elenients. We do not have Phrase l (this agreement shall remain in
effect during good faith iiegotiations) plus an independent and overriding phrase 2 (this
agreement shall continue to remain in fuli force and effect until such time as a new agreement is
agreed upon). The second phrase stating that this agreement shall coritinue to rentaiir in full
force and effect until such time as the parties reach a new agreement depends upon the first
pln'ase, which states that this agreement shall reinahi in effect during good~faith negotiations,
The agreement can only continue to remain in effect if the agreement is still in effect because the
parties are engaged in good-faith negotiations, Thus, if either party ceases to negotiate in good
faith, the agreement would no longer remain in effect, and it certainly would not continue to
remain in eff`ect.
The district argues that even were the agreement terminable solely upon a failure to
engage in good~faith negotiations, this end point is not sufficiently definite because “‘good faith
bargaining’ is assessed on a case-by~case basis and is far from easy to define." We disagree.
Under Missotlri law, ‘°good faith" is not an abstract concept, but is a concrete quality describing
the motivating purpose of one’s act or conduct when called into question Ledbetter, 387 S.W.3d
at 367. “‘[G]ood faith’ is more than a state of mind. . . . A breach of good faith is not so wholly
within the realm of the mind that it cannot be reasonably inferable." Krone v. Srrcrpou! For)ns
Co., 230 S.W.Zd 865, 869 (Mo. 1950). A party’s state of inind is reasonably inferable from what
the party says, or fails to say, and from what the party does, or fails to do. Ia'. Parties act in
"good faith" when they act without pretense, when they act innocently and with an attitude of
trust and confidence Ledbetrer, 387 S.W.?»d at 367. Parties acting in good faith act "holiestly,
openly, sincerely, without deceit, covin, or any form of fraud." ld. (citing Stcite ex rel. Wesr v.
Kier)ze)', 164 S.W. 517, 521 (1914)). "Conseqtterttly, the course of a negotiation between parties
acting in good faith should reflect that both parties sincerely undertook to reach an agreement."
Id. We agree with the trial court that a failure to negotiate in good faith is a sufficiently definite
point that terminates the agreement. When either the union or the district fails to negotiate in
good faith to reach a new agreement, the agreement terminates.
Finally, the district contends that because the agreement has no fixed duration either party
can terminate the agreement at Will. Again, we disagree As discussed earlier, the agreement has
a fixed duration, a duration that ends either when the parties reach a new agreement or when a
party ceases to negotiate in good faith. We deny the district’s first point.
ln its second point, the district contends that section 5.02, paragraph 3 is void and
tlnenforceable as contrary to pubhc policy because its unlimited duration is unreasonable as a
matter of iaw. We have already determined that section 5.02, paragraph 3 does not render the
agreement a contract of indefmite, indeterminate, and unlimited duration. We deny the district’s
second point.
in its third, fourth, and fifth points, the district contends that section 5.02, paragraph 3 is
void as contrary to law and to public policy because it impermissibly delegates the district’s
legislative function to the union. In its third point, the district contends that the disputed
language delegates to the union a legislative function by purporting to bind the parties until they
have agreed upon a new collective-bargaining agreement. The district argues that this section
requires the district to first obtain the union’s consent to legislate and to set the wages and
working conditions of its employees, and that the union controls how long this delegation will
last. ln its fourth point, the district niailitaiiis that the disputed language impermissibly vests the
union with veto power over legislation by purporting to bind the parties until they have reached a
new collective-bargaining agreement The district argues that section 5.02, paragraph 3 has the
impermissible effect of prohibiting the current board from approving and enacting a new
ordinance to replace the existing agreeinent-inipleriienting ordinance unless the union first
approves the new ordinance. In its fifth and final point, the district contends that section 5.02,
paragraph 3 impairs the district’s successor board of directors by purporting to bind successor
boards until they reach a new collective-bargaining agreement with the union. The district
argues that while a public entity is bound by labor contracts its board enters, a subsequent board
must lrave the power to rescind such contracts.
As we have already expiaitred, section 5.02, paragraph 3 does not render the agreement a
contract of indefmite, indeterminate, and tlnlinrited duration. Nor does the disputed language
forever bind the parties unless they reach a new agreement, as the district contends, because the
agreement provides for an alternative termination point resulting when either party ceases to
engage in negotiations in good faith.
Moving now to the district’s contention that the agreement impermissibly impairs its
legislative authority, the district’s overarching argument in these three points is that the union
possesses all the power. Wlrether' called the union’s "veto power,” a requirement for the tinion’s
"conseiit," or the union’s "holding the district hostage," the district essentially argues that the
union can exercise complete control through its power to reject the district’s proposals. The
district ignores, however, that it enjoys the same power to reject the union’s proposals, and it
ignores the requirement for good-faith rregotiations. Notiiiiig in the law requires a public entity
to agree to a proposal by its employee tlnions. Independerrce, 223 S.W.3d at 136.
The district’s argument might best be understood as a house of cards. Its foundation rests
"on the now largely defunct nondelegation doctrine, which holds that it is unconstitutional for
the legislature to delegate its rule-inaking authority to another body." Id. at 135. Missotlri,
however, has largely abandoned the nondelegation doctrine. Id. Our Supreme Court has
repeatedly recognized that the public-sector labor law allows eniployers to reject all employee
proposals so long as the employer has met and conferred with employee representatives. Ial. at
136. As our Supreme Court cogently asked and answered in Ina'epencieitce:
Under this interpretation, what legislative power or prerogative is being delegated? The
answer today, of course, is none. lf the public employer is free to reject any proposals of
employee organizations, and thus to use its governing authority to prescribe wages and
working conditions, none of the public entity’s legislative or governing authority is being
delegated
Ia’. 'I`o allow employees to bargain collectively does not require that the employer agree to any
terms. Id. at 137. The employer is free to reject any and all employee proposals, and "[I]Ive
einpt'oyer' is tlzer'efore not delegating or bargaining cn-vay any of its legislative po\ver." Ia'. at
137-38 (emphasis added). “The nondelegatioii doctrine is no impediinent to applying the plain
meaning of this explicit constitutional conimand [that employees shall have the right to organize
and to bargain collectively]," Id. at 138. Thus, a public employer that negotiates an agreement
with its employee groups may not unilaterally impose a new employment agreement that
contradicts the terms of the one then in effect. Id. at 133. Wliile a public employer is not
required to reach an agreement with its employees as to working conditions, once it has done so,
the employer is bound by the terms of that agreement Id. And while a contract executed by a
public entity is the subject of legislative action by the entity, this does not mean that the entity is
free to repudiate its agreements at will. Ici. at 140.
lt is not merely that that the district has built its argument on a faulty base. Tlte district
seeks to raise this house of cards to tmsustainable heights. The district theorizes that it possesses
the power to repudiate this contract at its will. Of course, acceptance of this would render any
contract with a public entity tlnenforceable. The district believes it can repudiate this contract
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