Local Union 2-2000,United Steel v. Coca-Cola Refreshments USA, Inc. , 547 F. App'x 707 ( 2013 )


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  •                         NOT RECOMMENDED FOR PUBLICATION
    File Name: 13a0965n.06
    No. 12-2630
    UNITED STATES COURT OF APPEALS
    FOR THE SIXTH CIRCUIT
    LOCAL UNION 2-2000 UNITED STEEL, PAPER              )
    AND     FORESTRY,          RUBBER,                  )                FILED
    MANUFACTURING, ENERGY, ALLIED-                      )          NOV 8, 2013
    INDUSTRIAL, CHEMICAL AND SERVICE                    )      DEBORAH S. HUNT, Clerk
    WORKERS INTERNATIONAL UNION; UNITED                 )
    STEEL, PAPER AND FORESTRY, RUBBER,                  )
    MANUFACTURING, ENERGY, ALLIED-                      )
    INDUSTRIAL, CHEMICAL AND SERVICE                    )
    WORKERS INTERNATIONAL UNION                         )
    )
    Plaintiffs-Appellees,                        )   ON APPEAL FROM THE UNITED
    )   STATES DISTRICT COURT FOR
    v.                                                  )   THE WESTERN DISTRICT OF
    )   MICHIGAN
    COCA-COLA REFRESHMENTS USA, INC.,                   )
    )
    Defendant-Appellant.                         )   OPINION
    Before: ROGERS and DONALD, Circuit Judges; ANDERSON, District Judge.*
    BERNICE BOUIE DONALD, Circuit Judge. Plaintiff unions sued employer Coca-Cola
    for breach of their collective bargaining agreement, claiming that Coca-Cola failed to fulfill its
    obligation to implement certain wage increases on the agreed-upon dates. The parties filed cross-
    motions for summary judgment, offering competing interpretations of the collective bargaining
    agreement. Coca-Cola also moved for summary judgment on grounds that the unions’ action was
    *
    The Honorable S. Thomas Anderson, United States District Judge for the Western District
    of Tennessee, sitting by designation.
    No. 12-2630
    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    time-barred. The district court granted summary judgment in favor of the unions, and Coca-Cola
    appeals the judgment. For the following reasons, we AFFIRM the judgment of the district court.
    I.
    Plaintiffs, United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied-
    Industrial and Service Workers International Union, AFL-CIO-CLC (“USW”) and its local union
    affiliate, Local 2-2000, were parties to a collective bargaining agreement (“CBA”) with Defendant
    Coca-Cola that governed Coca-Cola’s Paw Paw, Michigan facility from March 25, 2006 to
    September 30, 2009. In September 2009, the parties engaged in extensive negotiations over an
    agreement to replace the 2006 CBA. The negotiations resulted in an agreement to the following
    wage increases:
    Year 1:        0% increase
    Year 2:        2% increase
    Year 3:        3% increase
    The specific effective dates for these increases were not discussed in the negotiations.
    This agreement was documented in a Tentative Settlement Agreement (“TA”) by an officer
    of Coca-Cola on September 28, 2009. The TA provided for an agreement duration from October
    1, 2009 through September 30, 2012, with all terms of the prior CBA to remain in effect “except as
    modified herein.” The TA further provided for three increases in fringe benefits, effective May 2,
    2010; May 1, 2011; and May 6, 2012. The TA also provided for two Retirement Plan increases,
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    No. 12-2630
    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    effective March 25, 2010 and March 25, 2011, and three “sick and accident insurance” increases,
    effective April 1, 2010; April 1, 2011; and April 1, 2012.
    The TA was signed by Coca-Cola and union officials the same day, signifying that a deal had
    been reached subject to ratification by the local union’s membership. Coca-Cola’s labor relations
    manager prepared a red-lined document for the local union, highlighting the changes from the prior
    CBA. This document had an Appendix A, which provided the graduated rate increases as follows:
    Year 1:        0% increase
    Year 2:        2.0 % increase
    Year 3:        3.0 % increase
    Appendix A did not specify the effective dates or wage rates. The local union membership reviewed
    the red-lined document and voted to ratify the agreement on September 30, 2009. Coca-Cola then
    presented a draft based on the red-lined document to the local union for proofreading. The union
    returned the draft to the company with very minor corrections.
    At some point after the effective date of the agreement, Coca-Cola prepared a chart titled
    “Appendix A” which listed March 21, 2010; March 20, 2011; and March 25, 2012 as the effective
    dates for the agreed-upon wage increases, to align with the March wage increase dates in the
    previous CBA.
    Local union negotiators signed signature pages supplied by the company with the
    understanding that Coca-Cola would attach them to the corrected final CBA draft. Coca-Cola
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    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    appended the various signature pages to a corrected draft and forwarded this to the parent union for
    signature. The parent union representative, after a cursory review and with the assumption that the
    local union had thoroughly proofread the final draft, obtained the necessary signatures.
    Coca-Cola had the executed agreement printed in booklet form, and the local union
    distributed that booklet to its employees on July 17, 2010, over six months after the effective date
    of the agreement. It was greeted with “immediate protests” in response to the inclusion of the
    modified “Appendix A.” The local union president emailed the plant general manager, indicating
    that a “mistake has been found . . . in Appendix A which has to do with our wage increase.” Coca-
    Cola proceeded with the wage increases according to the Appendix A it had drafted, and declined
    to arbitrate the matter.
    The local union filed suit for breach of contract on March 23, 2011, and the parent union
    joined in the amended complaint filed January 3, 2012. The parties filed cross-motions for summary
    judgment. The district court granted summary judgment in favor of the unions. Coca-Cola timely
    filed the present appeal.
    II.
    The amended complaint’s sole cause of action against Coca-Cola is breach of the CBA. The
    district court had jurisdiction under § 301 of the Labor Management Relations Act (LMRA), which
    grants federal court jurisdiction over “[s]uits for violation of contracts between an employer and a
    labor organization representing employees in an industry affecting commerce.” 29 U.S.C. § 185(a).
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    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    Coca-Cola argues both that the unions’ action was time-barred and that the district court erred when
    it reformed the wage increases provision of the agreement under the doctrine of mutual mistake of
    fact to grant summary judgment to the unions. We address these arguments in turn, applying a de
    novo standard of review. Dye v. Office of the Racing Comm’n, 
    702 F.3d 286
    , 294 (6th Cir. 2012)
    (“We review de novo a district court’s grant of summary judgment.”).
    A.
    Because the LMRA does not set a specific limitations period, federal courts must apply the
    most closely analogous state statute of limitations. Int'l Union, United Auto., Aerospace & Agr.
    Implement Workers of Am. (UAW), AFL-CIO v. Hoosier Cardinal Corp., 
    383 U.S. 696
    , 703-04
    (1966). Coca-Cola argues that the six-month limitation period contained in § 10(b) of the National
    Labor Relations Act (NLRA), 29 U.S.C. § 160(b), applies to this case because, while presented as
    a LMRA-based “breach of contract” action, the claim is actually more analogous to an unfair labor
    practice claim.
    The company asserts that, because the unions became aware of the contractual dispute at
    issue in July 2010 but only filed suit in March 2011, their claims are outside of the six-month
    limitations period and are therefore time-barred. Coca Cola asserts that the local union’s filing of
    an unfair labor practice charge based on the same subject matter as the amended complaint amounts
    to a concession that § 10(b) of the NLRA applies.
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    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    The unions counter that their suit was timely filed within Michigan’s six-year limitations
    period for contract actions applicable to LMRA § 301 actions to recover wages under the terms of
    a CBA. The unions emphasize that the parties agree that the controversy before the court is a matter
    of contract interpretation as to whether Coca-Cola discharged its duties under the 2009 CBA. The
    unions point out that many, if not most, unilateral failures to meet CBA obligations result in both
    an unfair labor practice charge before the National Labor Relations Board and a breach of contract
    suit in district court. Finally, the unions argue that even if the NLRA six-month statute of
    limitations were applied here, their action is not time-barred.
    For support of its statute of limitations argument, Coca-Cola relies primarily upon Cummings
    v. John Morrell & Co., 
    36 F.3d 499
    (6th Cir. 1994), whereas the unions look to the holdings in UAW
    v. Hoosier Cardinal Corp., 
    383 U.S. 696
    (1966), and Central States Southeast & Southwest Areas
    Pension Fund v. Kraftco, Inc., 
    799 F.2d 1098
    (6th Cir. 1986) (en banc). We will look to
    Cummings—which analyzed both Kraftco and Hoosier—for guidance in determining whether to
    apply the six-month limitations period set forth in § 10(b) of the NLRA or Michigan’s six-year
    statute of limitations for breach of contract actions.
    The Cummings court acknowledged Supreme Court precedent from DelCostello v.
    International Brotherhood of Teamsters, 
    462 U.S. 151
    (1983), establishing that “hybrid” suits
    combining § 301 and fair representation claims are subject to the abbreviated limitations period of
    § 10(b) “since it would be impractical to apply different statutes of limitations to different elements
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    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    of a single cause of 
    action.”1 36 F.3d at 503-04
    (citing 
    DelCostello, 462 U.S. at 170-71
    ). The
    hybrid characteristic distinguished this line of cases from the earlier Hoosier decision which applied
    the state statute of limitations. 
    Id. at 502.
    Because the gravamen of the complaint was “essentially
    an action for damages caused by an alleged breach on an employer's obligation embodied in a
    collective bargaining agreement,” the Hoosier court applied the applicable state statute of limitations
    for breach of 
    contract. 383 U.S. at 696
    , 705 n.7.
    Although DelCostello held that hybrid complaints are subject to the NLRA limitations
    period, it made clear that application of a federal statute of limitations will only be appropriate in
    unusual cases, and “resort[ing] to state law remains the norm for borrowing of limitations 
    periods.” 462 U.S. at 171
    . The Supreme Court underscored this point several years later in Reed v. United
    Transportation Union, 
    488 U.S. 319
    (1989), when it called DelCostello a “closely circumscribed
    exception” to “the general rule that statutes of limitation are to be borrowed from state law.” 
    Id. at 324.
    Cummings also examined our en banc decision in Kraftco, in which a union-sponsored
    pension fund sued an employer under the LMRA, alleging that the employer violated the terms of
    a CBA by failing to make required payments into the pension 
    fund. 36 F.3d at 505
    . Although the
    employer attempted to portray the claim as substantially similar to an unfair labor practices claim,
    1
    The local union originally filed this action as a hybrid case, suing the parent union for unfair
    representation and Coca-Cola for breach of the CBA. (PageID 1-2.) The two unions then jointly
    filed an amended complaint against Coca-Cola for breach of contract. (PageID 228.) The parent
    union was removed as defendant. (PageID 228-29.)
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    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    we held that it was closer to a breach of contract action: “[T]he issues in Kraftco boiled down to
    what the contract said and whether the employer discharged its duties under it.” 
    Id. (citing Kraftco,
    799 F.2d at 1108). The court, therefore, held that the state statute of limitations should be applied.
    
    Id. Finally, Cummings
    examined two non-hybrid cases where we invoked the “closely
    circumscribed exception” of DelCostello to hold that the § 10(b) limitations period applied to claims
    brought under the LMRA. In McCreedy v. Local 971, UAW, 
    809 F.2d 1232
    (6th Cir. 1987),
    involving an action seeking to compel an employer to submit to arbitration, we held that “an action
    to compel arbitration is not readily analogous to a traditional breach of contract suit where damages
    are sought.” 
    Id. at 1238.
    Such an action, which “seeks only to enforce the grievance and arbitration
    procedures” under the CBA is, like an employee’s unfair representation claim, “a creature of labor
    law.” 
    Id. The second
    case, Woosley v. Avco Corp., 
    944 F.2d 313
    (6th Cir. 1991), addressed the
    claims of individual employees to entitlement to a particular job under a CBA; we applied the §
    10(b) time period because the case involved “day-to-day employment and grievance issues” and
    “collective bargaining processes [that] might be disturbed.” 
    Id. at 318.
    Armed with this wealth of case law, the Cummings court applied a three-element test adapted
    from the Supreme Court’s decision in DelCostello, looking at (1) whether federal law clearly
    provides a closer analogy than available state statutes, (2) whether the importation of state law
    would frustrate or interfere with the implementation of national policies, and (3) the “practicalities
    of litigation.” 
    Cummings, 36 F.3d at 506
    . The court found that the union’s claim bore a “strong
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    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    family resemblance” to an unfair labor practice charge because the union filed such a charge with
    the NLRB concerning the same employer conduct at issue in the complaint. 
    Id. The court
    further
    found that, because the claim rested on the conduct of collective bargaining between the parties and
    federal law favors collective bargaining, application of the state statutes would frustrate or interfere
    with federal policies. 
    Id. The court
    also emphasized that, under our precedents, application of the
    §10(b) statute of limitations is appropriate where a § 301 suit relates to entitlement to employment.
    
    Id. at 507.
    Finally, because the union was a sophisticated claimant, it would work “no unfairness
    against such a party to impose a six-month time limit.” 
    Id. Consequently, the
    court concluded that
    the practicalities of litigation did not favor the use of a longer state limitations period. 
    Id. Coca-Cola argues
    that, like Cummings, the union in this case filed an unfair labor practices
    complaint with the NLRB regarding the same subject matter, and this case, like Cummings, rests
    in large part “on the conduct of collective bargaining between the parties.” 
    Id. at 506.
    These
    similarities are superficial, however, in contrast to what matters most: the nature of the claim and
    whether it is more closely analogous to a state law breach of contract or a federal labor law claim.
    The unions’ amended complaint does not assert that Coca-Cola engaged in unfair dealings
    in the aftermath of the CBA negotiations. Instead, the unions claim that the terms of the 2009 CBA
    obligated Coca-Cola to implement a 2% wage increase on October 1, 2010 and a 3% wage increase
    on October 1, 2011, and that Coca-Cola, by repudiating the terms of the agreement, was liable for
    damages for breach of contract. Thus the sole claim in this case is most analogous to Hoosier,
    Kraftco, and a state law claim for breach of contract. Hoosier addressed a claim that the employer
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    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    breached a CBA by terminating the employment of employees without paying them accumulated
    vacation pay as provided in the 
    agreement. 383 U.S. at 698
    . Kraftco dealt with a union’s failure
    to make payments into a pension plan as provided in a 
    CBA. 799 F.2d at 1100
    . The unions’ very
    similar claim here is that Coca-Cola breached the CBA by failing to provide wage increases at the
    appropriate time.
    The local union’s filing of an unfair labor practice charge and initial filing a hybrid complaint
    suing the parent union as well as Coca-Cola does not make this an appeal of a hybrid case. The en
    banc court’s reasoning in Kraftco supports this conclusion. Here, as in Kraftco, the amended
    complaint “did not allege a breach of the duty of fair representation . . . .” 
    Id. at 1106.
    The duty of
    fair representation “has primarily been associated with contract negotiation and the enforcement of
    that contract through grievance processing.” 
    Id. (quoting NLRB
    v. Local 299, Int’l B’hood of
    Teamsters, 
    782 F.2d 46
    , 50 (6th Cir. 1986)) (internal quotation marks omitted). That duty is
    “implicated only when an individual or group is treated differently by a union than another
    individual, group, or the collective.” 
    Id. (quoting Local
    299, 782 F.2d at 51-52
    ) (internal quotation
    marks and alterations omitted). No allegations in the second amended complaint implicate this duty,
    so applying the Michigan six-year limitations period will not frustrate or interfere with the
    implementation of federal labor law policies. See 
    Cummings, 36 F.3d at 506
    . Furthermore, as all
    the parties are sophisticated litigants, the “practicalities of litigation” do not favor the choice of one
    statute of limitations over the other. See 
    id. at 507.
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    No. 12-2630
    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    Accordingly, this is a breach of contract claim governed by Michigan’s six-year statute of
    limitations. Because the CBA took effect on September 30, 2009 and the local union filed suit on
    March 23, 2011, the action was timely filed.
    B.
    We now turn to the merits question of whether the district court erred when it reformed the
    contract under the doctrine of mutual mistake and granted summary judgment to the unions. The
    unions argue that the CBA unambiguously provided for effective dates for the wage increases of
    October 1, 2010 and October 1, 2011 in its “Year 1,” “Year 2, ” “Year 3” terminology. They
    contend that a wage freeze went into effect on the effective date of the agreement and lasted for the
    entire “Year 1” of the three-year agreement term. Accordingly, the two increases were intended by
    the parties to go into effect on day one of “Year 2 ” and “Year 3,” respectively. The unions assert
    that the CBA was—in contrast—explicit where the parties intended mid-contract year effective
    dates, as they did with the fringe benefits, and that lack of specificity on this issue in the TA
    supports the union’s common-sense reading of the contract. The unions conclude that Coca-Cola
    should not be allowed to profit from their own mistake in the drafting of the agreement and that the
    court should reform the agreement to reflect the intent of the parties.
    Coca-Cola counters that the language of the final, signed agreement, which includes the
    company-drafted Appendix A, unambiguously provides for March wage increase dates and that,
    without clear and convincing evidence of mutual mistake, this language must govern the contractual
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    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    relations of the parties. The company argues that because the four corners of the properly executed
    contract unambiguously provide for March dates, our inquiry should proceed no further.
    While parol evidence is inadmissible to show additional terms, such evidence is always
    admissible to show that there has been a mistake in reducing the agreement of the parties to writing
    as grounds for seeking reformation of a contract. Armistead v. Vernitron Corp., 
    944 F.2d 1287
    ,
    1295 (6th Cir. 1991); RESTATEMENT (SECOND) OF CONTRACTS §214(e) (1981). Additionally, the
    courts have the power to reform a contract to make it conform to the agreement the parties actually
    made. Casey v. Auto Owners Ins. Co., 
    729 N.W.2d 277
    , 284-85 (Mich. Ct. App. 2006). To obtain
    reformation of a contract, the plaintiff must prove a mutual mistake of fact by clear and convincing
    evidence. 
    Id. The showing
    of a unilateral mistake is not sufficient to obtain reformation. 
    Id. Because the
    plaintiffs have shown that the parent union did not closely review the amended
    Appendix A we may look to the agreement ratified by the union in order to determine that actual
    intent of the parties.
    The only factual support for Coca-Cola’s position is that the prior agreement commenced
    in March of 2006, and, thus, its wage increases took effect in March of each relevant year. This
    argument is a double-edged sword, however, for another, and perhaps more, sensible interpretation
    of the 2006 CBA’s relevance is that the initial 0% wage increase of the 2009 CBA should take
    effect, just as it did in 2006, on the effective date of the agreement, with successive increases taking
    effect on the respective anniversaries of the agreement.
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    As the unions contend, the “Year 1,” “Year 2, ” “Year 3” language of the agreement, the
    specific dates provided for other elements of the CBA, and the lack of evidence that the March dates
    were ever contemplated by the negotiating parties support this interpretation. These facts further
    support the conclusion that this dispute was not a matter of the unions simply misunderstanding what
    they were bargaining for but was rather a mutual mistake of the parties: a mistake on the part of
    Coca-Cola in failing to embody in the writing the actual agreement reached and a mistake on the part
    of the unions in not identifying this error before executing the agreement. When “terms are used
    in or omitted from the instrument which give it a legal effect not intended by the parties, . . . equity
    will always grant relief unless barred on some other ground, by correcting the mistake so as to
    produce a conformity of the instrument to the agreement.” Johnson Family Ltd. P'ship v. White Pine
    Wireless, LLC, 
    761 N.W.2d 353
    , 363 (Mich. Ct. App. 2008) (quoting Schmalzriedt v. Titsworth, 
    9 N.W.2d 24
    , 28 (Mich. 1943)) (internal quotation marks omitted).
    III.
    The district court thus correctly determined that “[t]he record, viewed as a whole, . . .
    indicates that the parties intended to establish wage increases concomitant with the CBA
    anniversaries, and that the resulting document does not adequately reflect their agreement.”
    Accordingly, we AFFIRM the district court’s grant of summary judgment.
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    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    S. THOMAS ANDERSON, District Judge, concurring in part and dissenting in part,
    While I concur with the majority’s opinion on the statute of limitations issue, I write
    separately to state my disagreement with the majority’s holding on the contract issues. There is
    simply a lack of clear and convincing evidence that a mutual mistake occurred when Coca-Cola
    reduced the parties’ 2009 Collective Bargaining Agreement (“CBA”) to writing. As to the issue of
    whether the parties agreed to annual wage increases in October as opposed to the March dates
    included in the final signed CBA, the evidence supporting each party’s position on the wage
    increases was fairly balanced. Accordingly, the union was not entitled to reformation of the
    contract. Because the union was not entitled to judgment as a matter of law and Coca-Cola was, I
    would reverse the judgment of the district court on the contract reformation and breach of contract
    issues.
    Under Michigan law, a party seeking reformation of a contract on the basis of mutual mistake
    must prove the mutual mistake by clear and convincing evidence. Casey v. Auto–Owners Ins. Co.,
    
    729 N.W.2d 277
    , 285 (Mich. Ct. App. 2006). As the party seeking reformation, the union has the
    burden of proof. Theophelis v. Lansing Gen. Hosp., 
    424 N.W.2d 478
    , 486–87 (Mich. 1988) (“[T]he
    burden of proof is upon one seeking reformation of a written instrument.”). The Michigan Supreme
    Court has described the clear and convincing evidence standard as “the most demanding standard
    applied in civil cases.” In re Martin, 
    538 N.W.2d 399
    , 410 (Mich. 1995) (citation omitted). Clear
    and convincing evidence is that proof which “produce[s] in the mind of the trier of fact a firm belief
    or conviction as to the truth of the allegations sought to be established, evidence so clear, direct and
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    weighty and convincing as to enable [the factfinder] to come to a clear conviction, without
    hesitancy, of the truth of the precise facts in issue.” 
    Id. (citation omitted).
    Put another way, evidence
    of mutual mistake must be so “clear and satisfactory, so as to establish the fact beyond cavil.”
    Crane v. Smith, 
    220 N.W. 750
    , 751 (Mich. 1928) (citations omitted). A court of equity should not
    reform a written instrument “upon a probability, nor even upon a mere preponderance of evidence,
    but only upon a certainty of the error.” Holda v. Glick, 
    20 N.W.2d 248
    , 251 (Mich. 1945) (citing
    Restatement of the Law of Contracts, § 504) (other citations omitted).
    Based on the record before the district court, the union failed to prove by clear and
    convincing evidence that the parties actually agreed to annual wage increases on the October
    anniversary date of the 2009 CBA. The district court began by correctly finding that Appendix A’s
    use of the terms “Year 1,” “Year 2,” and “Year 3” was ambiguous, stating “[t]he unions’ October
    interpretation is as plausible as Coca-Cola’s March interpretation.” See Local Union 2-2000 v.
    Coca-Cola Refreshments USA, Inc., 
    906 F. Supp. 2d 731
    , 742 (W.D. Mich. 2012). And yet the
    district court went on to hold that the Tentative Settlement Agreement (“TA”) containing the same
    ambiguous language constituted “clear and convincing evidence that both sides reached an
    agreement that the percentage wage increases would likewise occur on the anniversaries of the 2009
    CBA.” 
    Id. at 743
    (“[T]he TA in this case, viewed in its larger context, is clear and convincing
    evidence that both sides reached an agreement that the percentage wage increases would likewise
    occur on the anniversaries of the 2009 CBA.”).
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    The district court based its conclusion on two features of the TA. First, the three-year CBA
    ran from October 1, 2009, through September 30, 2012, suggesting that the annual wage increases
    in “Year 1, Year 2, Year 3” took effect on the October anniversary dates of the 2009 CBA. 
    Id. Second, other
    fringe benefit increases took effect on non-anniversary dates listed in the 2009 CBA,
    “indicat[ing] a different treatment of the wages in the parties’ agreement” and implying that the
    wage increases coincided with the anniversary date. 
    Id. These facts
    are certainly relevant to divining the meaning of the TA and tend to support the
    union’s position. However, they do not constitute clear and convincing evidence of a mutual
    mistake or demonstrate “a certainty of the error” in the final written contract. 
    Holda, 20 N.W.2d at 251
    . Each parties’ interpretation of the ambiguous terms “Year 1, Year 2, and Year 3” is equally
    plausible and finds support in the record. Although the evidence cited by the district court is
    persuasive (and perhaps even preponderates), the finding of mutual mistake is simply not clear and
    convincing in light of other record evidence, which the district court failed to consider.
    For instance, the previous CBA provided for annual wage increases in March. Union
    members had just received an annual raise in March 2009 and, generally speaking, were not due for
    another annual raise until March 2010. The TA unambiguously stated that “[a]ll terms and
    conditions of the [2006 CBA] shall remain in full force and effect except as modified herein.”
    (PageID 489.) The TA supports Coca-Cola’s position then that annual wage increases in the 2009
    CBA would continue to take effect in March just as they did under the 2006 CBA. The provision
    also casts doubt on the union’s position about the October dates for the wage increases.
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    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    The union argues that if “Year 1” commenced in March 2010, the “Year 1” wage freeze was
    to last from March 2010 to March 2011. As a result, bargaining unit members would actually go
    eighteen months from October 2009 until March 2011 without a raise. This argument ignores the
    fact that members had just received an annual bump in March 2009, six months before the 2009
    CBA took effect, and would not expect another annual raise until March 2010. Thus, assuming
    March dates for wage increases with “Year 1” running from March 2010 through March 2011,
    members would, in fact, experience a twelve-month wage freeze. The union’s position also ignores
    other evidence that Coca-Cola agreed to make two special payments to union members, a $500
    “ratification bonus” in October 2009 and a $500 “lump sum payment” in January 2010, as a
    concession for the one-year wage freeze. See Dietrich Decl. ¶ 8, PageID 1060 (“Coca-Cola
    proposed the [payments] . . . to partially balance Coca-Cola’s proposal for the ‘Year 1’ wage
    freeze . . . .”). Therefore, there is evidence from the TA to support Coca-Cola’s position about the
    March dates for wage increases.
    Furthermore, the 2009 CBA included dates certain for increases in fringe benefits, but the
    district court failed to consider evidence showing that the TA simply carried over the same dates
    from the 2006 CBA. E.g. 2006 CBA, PageID # 449 (providing for annual increases, which would
    take effect in May, in Coca-Cola’s match for employee 401k contributions); Local Union 
    2-2000, 906 F. Supp. 2d at 734
    –35 (noting that the 2009 CBA provided for annual 401k matching increases
    in May as well). This is hardly surprising in light of the parties’ agreement that the terms of the
    2009 CBA would default to the terms of the 2006 CBA “except as modified.” The fact then that the
    - 17 -
    No. 12-2630
    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    parties agreed in the 2009 CBA to annual benefits increases and on the same dates provided in the
    2006 CBA support Coca-Cola’s position (as much as the union’s) and suggests that the parties
    assumed wage and benefit increases under the 2009 CBA would continue to occur annually and on
    the same dates provided in the 2006 CBA.
    The district court also placed weight on the three-year duration of the 2009 CBA. 
    Id. at 743
    (“The TA provided that the ‘agreement duration’ was ‘October 1, 2009—September 30, 2012.”).
    This aspect of the TA is arguably the most compelling evidence for the union’s position that wage
    increases were due on the October anniversary dates of the 2009 CBA. Even so, whether wage
    increases were due in October or the following March, wage increases would still take effect during
    “Year 1” or “Year 2” or “Year 3” of the CBA. For example, if “Year 1” ran from October 2009
    through October 2010, then a wage increase due in March 2010 would take effect during “Year 1.”
    The union retorts that the notion of a six-month “Year 1” or an eighteen-month “Year 3” is
    incomprehensible. Union’s Br. 39 (“In Wonderland, a ‘year’ may last 18 months on some occasions
    and six months on others, depending on Humpty Dumpty’s mood.”).
    However, the union’s own course of dealing undercuts its argument on this point. During
    the negotiations, the union made the initial offer on wage increases, proposing that the new CBA
    run from October 1, 2009, through March 27, 2013, and that bargaining unit members receive a 3%
    raise in “Year 1,” a 3.5% raise in “Year 2,” and a 4% raise in “Year 3.” (PageID 458.)1 Assuming
    1
    Similarly, the 2006 CBA ran from March 25, 2006, to September 30, 2009, a term of three
    years and six months. The fact that the parties’ previous CBA included only a portion of a year
    - 18 -
    No. 12-2630
    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    that “Year 1” began in October 2009, the union’s offer of a three and a half-year term obviously
    meant that “Year 3” would run from October 2011 through March 2013, a span of eighteen months.
    Thus, the union itself proposed the very Carrollian treatment for “the word ‘year’ as sometimes
    meaning 18 months” that it so colorfully derides in this appeal. See also Union’s Br. 37 (“The
    parties never agreed to treat the word ‘year’ as sometimes meaning 18 months and sometimes six
    months. The parties never agreed that contract years should run inconsistently, from October 2009
    until mid-March 2011 for ‘Year 1,’ from mid-March 2011 until mid-March 2012 for ‘Year 2,’ and
    from mid-March 2012 through September 2012 for ‘Year 3.’”).
    The union’s bargaining also runs counter to the union’s position on appeal that the only
    possible, intended meaning of “Year 1, Year 2, Year 3” was the three-year term of the 2009 CBA.
    The union introduced the “Year 1, Year 2, Year 3” concept into the negotiations on September 28,
    2009, the parties’ last day at the bargaining table. Local Union 
    2-2000, 906 F. Supp. 2d at 735
    . The
    parties signed the TA only hours after the union first proposed the ambiguous “Year 1, Year 2, Year
    3” language and did so in such a way that “Year 3” actually meant eighteen months, and not twelve.
    This is hardly clear and convincing proof that the parties could only have understood the TA’s “Year
    1, Year 2, Year 3” to be literal, twelve-month years.
    Perhaps more importantly, the union’s initial offer arguably assumed March wage increases,
    with the 3% raise in “Year 1” taking effect in March 2010, the 3.5% raise in “Year 2” in March
    further undercuts the inference that “Year 1,” “Year 2,” and “Year 3” clearly and necessarily refer
    to full twelve-month periods and not some fraction of a year covered by the CBA.
    - 19 -
    No. 12-2630
    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    2011, the 4.0% raise in “Year 3” in March 2012, and the CBA expiring in March 2013. Otherwise,
    the union’s proposed “Year 1, Year 2, Year 3” language makes less sense. If the union was
    bargaining for October wage increases, as it now claims, the 3% raise in “Year 1” would take effect
    October 2009, the 3.5% raise in October 2010, and the final 4% raise in October 2011. Bargaining
    unit members would then go from October 2011 through the expiration of the CBA in March 2013
    without a raise. In other words, the union was proposing the ambiguous “Year 1” approach to the
    wage increases under terms that would leave its membership without any raise for the final eighteen
    months of a forty-two month CBA. Therefore, the union’s initial offer with the “Year 1, Year 2,
    Year 3” language plausibly shows that the union assumed wage increases in March and calls into
    doubt the district court’s conclusion that the TA’s use of “Year 1, Year 2, Year 3” constituted clear
    and convincing evidence of October wage increases.
    In sum, none of the features of the TA cited by the district court amount to clear and
    convincing evidence of a mutual mistake in the final signed writing. I do not mean to say that the
    evidence clearly proves that the parties reached a final agreement for March wages increases.
    Indeed the parties’ final signed writing suffices to prove the March dates. The district court
    highlighted the lack of evidence showing that the parties ever agreed to the March dates for the wage
    increases. Local Union 
    2-2000, 906 F. Supp. 2d at 744
    . However, because the union seeks
    reformation of a signed contract, the relevant inquiry is whether there is clear and convincing
    evidence of an agreement on the October dates. As the party seeking reformation, it is the union’s
    burden to prove that the parties actually agreed on the October dates for annual wage increases, and
    - 20 -
    No. 12-2630
    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    not Coca-Cola’s to prove the March dates. 
    Theophelis, 424 N.W.2d at 486
    –87. For the reasons
    already discussed, the union failed to carry its burden to show a mutual mistake in the final signed
    writing.
    Having concluded that the union failed to show by clear and convincing evidence that the
    March dates were a mistake, the district court’s reformation of the CBA should be reversed.
    Without proof of an agreement as to the October dates, reformation was improper. Hunt v. Triplex
    Safety Glass Co. of N. Am., 
    60 F.2d 92
    , 94 (6th Cir. 1932) (“Before a contract may be reformed to
    express the true agreement of the parties, they must have so agreed, and we fail to find sufficiently
    cogent proof of such agreement.) (emphasis added and internal citation omitted); 
    Casey, 729 N.W.2d at 284
    –85 (“A court of equity has the authority to reform a contract to make it conform to the
    agreement actually made by the parties to the contract.”) (emphasis added).2
    Notably the district court reached the reformation issue on the parties’ cross-motions for
    summary judgment. In order to prevail at summary judgment, the union had the burden to prove a
    mutual mistake in the final signed writing by clear and convincing evidence, Michigan’s “most
    demanding standard” in civil cases, and to do so in such a way that reasonable minds could not
    differ. In re 
    Martin, 538 N.W.2d at 410
    . In other words, the union had a doubly-demanding burden
    2
    Without proof of an actual agreement on dates certain for the annual wage increases, the
    TA’s default term, i.e. that “[a]ll terms and conditions of the [2006 CBA] shall remain in full force
    and effect,” would arguably control.
    - 21 -
    No. 12-2630
    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    to make its case at summary judgment. When viewed from this perspective, the district court
    misapplied the Rule 56 standard by granting the union judgment as a matter of law.
    Federal Rule of Civil Procedure 56(a) provides that a party is entitled to summary judgment
    if the moving party “shows that there is no genuine dispute as to any material fact and the movant
    is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 
    477 U.S. 317
    , 322 (1986). The precise issue presented to the district court in the union’s Rule 56 motion
    was whether the union could “prove by clear and convincing evidence to the degree that no rational
    finder of fact could conclude otherwise” that a mutual mistake had occurred where the final writing
    included March dates for annual wage increases. Hanover Ins. Co. v. Am. Eng’g Co., 
    33 F.3d 727
    ,
    730 (6th Cir. 1994) (applying Kentucky law and reversing the reformation of a contract based on
    mutual mistake at summary judgment). Viewing the evidence in the light most favorable to Coca-
    Cola, as the district court was required to do in deciding the union’s Rule 56 motion, the union failed
    to carry its burden. The evidence before the district court was insufficient to grant the union’s
    request for reformation because the union did not show a mutual mistake “by clear and convincing
    evidence to the degree that no rational finder of fact could conclude otherwise,” an essential element
    of the union’s reformation claim on which it alone bore the burden of proof. Therefore, the district
    court misapplied the summary judgment standard and erroneously granted the union judgment as
    a matter of law on the reformation issue.
    What is more, the district court also failed to apply the correct standard in denying Coca-
    Cola’s Rule 56 motion. We have held that “any heightened burden of proof required by [governing]
    - 22 -
    No. 12-2630
    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    substantive law for an element of the [non-moving party]’s case, such as proof by clear and
    convincing evidence, must be satisfied by the [non-moving party]” in order to survive summary
    judgment. Beal ex rel. Putnam v. Walgreen Co., 408 F. App’x 898, 902 (6th Cir. 2010) (quoting
    Street v. J.C. Bradford & Co., 
    886 F.2d 1472
    , 1479 (6th Cir. 1989)). In other words, the non-
    moving party must “show in opposition to the motion for summary judgment that [it] can produce
    evidence which, if believed, will meet the higher standard.” Inge v. Rock Fin. Corp., 
    388 F.3d 930
    ,
    938 (6th Cir. 2004).
    Not only was the union not entitled to judgment as a matter of law, summary judgment in
    favor of Coca-Cola was proper because the union did not carry its “higher” burden. Even under the
    most favorable view of the proof, the union failed to adduce clear and convincing evidence of
    mutual mistake to support its plea for reformation. Rather the parties have essentially litigated to
    a draw. Instead of evaluating whether the union could meet its “higher” burden at summary
    judgment, the district court apparently shifted the burden to Coca-Cola to produce evidence in
    support of its claim about the March dates for wage increases. See Local Union 2-2000, 906 F.
    Supp. 2d at 744 (finding that Coca-Cola “fails to provide evidence of agreement to the contractual
    language, other than to proffer the subsequent statements of Coca-Cola’s negotiators that Coca-Cola
    did not consider the March dates a ‘mistake’ . . . .”).3 The district court improperly allocated the
    3
    The majority takes a similar approach, holding Coca-Cola to the burden to prove the
    absence of mistake as opposed to requiring the union to prove mutual mistake by clear and
    convincing evidence. In fact, the majority never states that the union adduced clear and convincing
    evidence of mutual mistake or that it did so “to the degree that no rational finder of fact could
    conclude otherwise.” Hanover Ins. 
    Co., 33 F.3d at 730
    .
    - 23 -
    No. 12-2630
    Local Union 2-2000 v. Coca-Cola Refreshments USA, Inc.
    burden to Coca-Cola and then weighed Coca-Cola’s failure to prove the March dates in arriving at
    its conclusion to reform the contract. The district court should have focused on whether the union,
    as the party seeking reformation, had adduced clear and convincing evidence of the October dates,
    and not faulted Coca-Cola for failing to prove up the March dates in the final writing. In the absence
    of clear and convincing evidence of a mutual mistake, Coca-Cola was entitled to judgment as a
    matter of law on the reformation claim.
    Both parties present cogent positions, which is exactly the problem with the district court’s
    decision to reform the 2009 CBA. The roughly equal strength of both arguments highlights the fact
    that the union did not carry its burden to establish a mutual mistake in the final writing by clear and
    convincing evidence. Rather than being “weighty and convincing” proof of a mutual mistake, the
    TA does not clearly and convincingly point to October dates for the wage increases in the 2009
    CBA. In re 
    Martin, 538 N.W.2d at 410
    . The union has merely shown that the parties’ TA provided
    for wage increases in “Year 1, Year 2, and Year 3.” This proof is not clear and convincing evidence
    that the parties had actually agreed on October wage increases. 
    Hunt, 60 F.2d at 94
    ; 
    Casey, 729 N.W.2d at 284
    –85. Therefore, I would reverse the judgment of the district court on the contract
    issues.
    - 24 -
    

Document Info

Docket Number: 12-2630

Citation Numbers: 547 F. App'x 707

Filed Date: 11/8/2013

Precedential Status: Non-Precedential

Modified Date: 1/13/2023

Authorities (18)

central-states-southeast-and-southwest-areas-pension-fund-and-daniel-j , 799 F.2d 1098 ( 1986 )

Hunt v. Triplex Safety Glass Co. of North America, Inc. , 60 F.2d 92 ( 1932 )

Latonya Inge, Jody Holman v. Rock Financial Corporation , 388 F.3d 930 ( 2004 )

Sherman Woosley Edward Carmack Lester Blue, Jr. Stonnie ... , 944 F.2d 313 ( 1991 )

Virginia Armistead, Cross-Appellants v. Vernitron ... , 944 F.2d 1287 ( 1991 )

ernest-leon-cummings-v-john-morrell-company , 36 F.3d 499 ( 1994 )

Theophelis v. Lansing General Hospital , 430 Mich. 473 ( 1988 )

Johnson Family Ltd. Partnership v. White Pine Wireless, LLC , 281 Mich. App. 364 ( 2008 )

william-h-mccreedy-bernard-ashley-augustin-j-aviles-thomas-d-cloudt , 809 F.2d 1232 ( 1987 )

Crane v. Smith , 243 Mich. 447 ( 1928 )

Holda v. Glick , 312 Mich. 394 ( 1945 )

Schmalzriedt v. Titsworth , 305 Mich. 109 ( 1943 )

National Labor Relations Board v. Local 299, International ... , 782 F.2d 46 ( 1986 )

hanover-insurance-company-intervening-security-insurance-company-of , 33 F.3d 727 ( 1994 )

International Union, United Automobile, Aerospace & ... , 86 S. Ct. 1107 ( 1966 )

Celotex Corp. v. Catrett, Administratrix of the Estate of ... , 106 S. Ct. 2548 ( 1986 )

Reed v. United Transportation Union , 109 S. Ct. 621 ( 1989 )

DelCostello v. International Brotherhood of Teamsters , 103 S. Ct. 2281 ( 1983 )

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