Sheet Metal Employers Industry Promotion Fund et al v. Absolut Balancing Co. Inc.
Filing
65
ORDER granting 45 Motion to Dismiss. Signed by District Judge Lawrence P. Zatkoff. (MVer)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
SHEET METAL EMPLOYERS INDUSTRY
PROMOTION FUND, and SHEET METAL
EMPLOYERS INDUSTRY APPRENTICESHIP
REIMBURSEMENT FUND,
Plaintiffs,
Case No. 12-10752
Hon. Lawrence P. Zatkoff
v.
ABSOLUT BALANCING CO. INC.,
ENVIRO-AIRE/TOTAL BALANCE
COMPANY, INC., AERODYNAMICS
INSPECTING CO., AIRFLOW TESTING,
INC., and BARMATIC INSPECTING CO.,
Defendants,
/
OPINION AND ORDER
AT A SESSION of said Court, held in the United States Courthouse,
in the City of Port Huron, State of Michigan, on January 30, 2013
PRESENT: THE HONORABLE LAWRENCE P. ZATKOFF
UNITED STATES DISTRICT JUDGE
I. INTRODUCTION
This matter is before the Court on Plaintiffs’ Motion to Dismiss Defendants’ Countercomplaint [dkt 45]. The Motion has been fully briefed by the parties. The Court finds that the facts
and legal arguments are adequately presented in the parties’ papers such that the decision process
would not be significantly aided by oral argument. Therefore, pursuant to E.D. Mich. L.R. 7.1(f)(2),
it is hereby ORDERED that the Motion be resolved on the briefs submitted. For the reasons set
forth below, Plaintiffs’ Motion is GRANTED.
II. BACKGROUND
The Court set forth the facts of this case in its August 1, 2012, Opinion and Order, as
follows:
Plaintiffs are trust funds that bring this action under § 301 of
the Labor Management Relations Act (“LMRA”), 29 U.S.C. §
185(c), to confirm arbitration awards against Defendants for
purported breaches of a collective bargaining agreement (“CBA”) .
...
Defendants . . . are testing and air balancing control (“TAB”)
contractors. . . . Plaintiffs claim that Defendants were bound by the
CBA, which required the payment of fringe benefits to Plaintiffs
under Sections 15 and 16 of Addendum 1 of the CBA . . . .
Plaintiffs filed grievances against Defendants for failing to
make contributions to the two funds since 2006. Pursuant to Article
X, Section 2, of the CBA, the grievances were heard by the Local
Joint Adjustment Board (“LJAB”) for final and binding arbitration on
February 15, 2011. While Defendants received notice of the
grievance hearings by letters from the LJAB, Defendants opted to not
be present at the hearings. The LJAB issued . . . decisions on
February 25, 2011, and March 9, 2011, finding that Defendants
violated the CBA by failing to contribute to the Promotion Fund and
Reimbursement Fund [“Funds”].
See dkt. #32.
III. PROCEDURAL BACKGROUND
On May 25, 2012, Plaintiffs filed a Motion for Summary Judgment arguing that the Court
should summarily enter judgment in their favor because Defendants were precluded from asserting
any defenses based on the three-month limitations period for challenging arbitration awards under
§ 301 of the LMRA. See dkt. #13. On August 1, 2012, the Court found, based on a narrow
exception, that well-defined public policy dictates against holding Defendants liable under the
LJAB decisions if Defendants are not signatories to the CBA. See dkt. #32. Because the Court
determined that there was a genuine dispute of material fact as to whether Defendants were
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signatories to the CBA, the Court denied Plaintiffs’ Motion for Summary Judgment. Plaintiffs
subsequently filed a Motion for Reconsideration, which the Court denied. See dkt. #46.
Plaintiffs filed the instant Motion requesting that the Court dismiss Defendants’ Countercomplaint. For the reasons that follow, the Court will grant Plaintiff’s Motion.
IV. STANDARD OF REVIEW
A motion brought pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon
which relief may be granted tests the legal sufficiency of a party’s claims. The Court must accept
as true all factual allegations in the pleadings, and any ambiguities must be resolved in that party’s
favor. See Jackson v. Richards Med. Co., 961 F.2d 575, 577–78 (6th Cir. 1992). While this
standard is decidedly liberal, it requires more than a bare assertion of legal conclusions. See
Advocacy Org. for Patients & Providers v. Auto Club Ins. Ass’n, 176 F.3d 315, 319 (6th Cir. 1999).
A party must make “a showing, rather than a blanket assertion of entitlement to relief” and
“[f]actual allegations must be enough to raise a right to relief above the speculative level” so that
the claim is “plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007).
“A claim has facial plausibility when the party pleads factual content that allows the court to draw
the reasonable inference the defendant is liable for the alleged misconduct.” Id. at 556. See also
Ashcroft v. Iqbal, 556 U.S. 662, 696–97 (2009).
In deciding a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), this Court may only
consider “the facts alleged in the pleadings, documents attached as exhibits or incorporated by
reference in the pleadings, and matters of which the [Court] may take judicial notice.” 2 James
Wm. Moore et al., Moore’s Federal Practice ¶ 12.34[2] (3d ed. 2000).
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V. ANALYSIS
In its August 1, 2012, Opinion and Order, the Court commenced its analysis with two Sixth
Circuit cases, stating:
The Sixth Circuit applies a three-month limitations period to
a § 301 claim brought to vacate an arbitrator’s award in a Michigan
district court. Occidental Chem. Corp. v. Int’l Chem. Workers Union,
853 F.2d 1310, 1314–15 (6th Cir. 1988); accord Bacashihua v.
U.S.P.S., 859 F.2d 402, 406 (6th Cir. 1988). The Sixth Circuit
explained that since the employer failed to timely file an action to
vacate the award, the employer could not later challenge the award
during a subsequent action brought by the union to enforce the award
on any similar grounds that could have been raised in a timely action
to vacate. Occidental, 853 F.3d at 1317; Prof’l Adm’rs Ltd. v.
Kopper-Glo Fuel, Inc., 819 F.2d 639, 642–43 (6th Cir. 1987). The
Sixth Circuit reasoned that barring defenses was consistent with the
quick resolution of arbitrated disputes and resulted in an action to
confirm an arbitration award being a summary proceeding.
Occidental, 853 F.3d at 1317. “Arbitration is meant to be a quick and
final resolution by which parties are bound. Moreover, an action to
confirm the award should be a summary proceeding, not a proceeding
in which the defendant seeks affirmative relief.” Kopper-Glo Fuel,
Inc., 819 F.2d at 642.
See dkt. #32. As such, the Court unequivocally found (1) that “Defendants’ ability to challenge the LJAB
decisions is procedurally and substantively foreclosed,” and (2) that the only remaining issue of
material fact existing in this case is whether Defendants were signatories to the CBA. See id.
Presently before the Court are Defendants’ three counts against Plaintiff: fraud; misrepresentation; and
detrimental reliance. It appears, however, that Defendants are attempting to circumvent well-settled
Sixth Circuit legal precedent and this Court’s previous Opinion and Order by now pleading—albeit
uncreatively—its affirmative defenses as counterclaims. That is, many of Defendants’ affirmative
defenses to Plaintiffs’ complaint—which the Court has already deemed waived— have evolved into
counterclaims. Though the verbiage and sentence structure used are not completely identical when
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simultaneously comparing its affirmative defenses and counterclaims, Defendants are certainly not
permitted to launch an indirect attack (i.e., via counterclaims) on the LJAB award as substitution
for its already-abandoned affirmative defenses.1 To allow such a tactic would not only violate the
spirit of Sixth Circuit case law, but also would contravene the purpose of a district court’s review
of an action seeking to confirm an arbitration award. See Occidental Chem. Corp. v. Int’l Chem.
Workers Union, 853 F.2d 1310, 1314–15 (6th Cir. 1988); Prof’l Adm’rs Ltd. v. Kopper-Glo Fuel,
Inc., 819 F.2d 639, 642–43 (6th Cir. 1987) (“[A]n action to confirm the award should be a summary
proceeding, not a proceeding in which the defendant seeks affirmative relief.”). As the Court has
repeatedly pronounced in its orders, the only issue that requires resolution in this case is whether
or not Defendants are signatories to the CBA and its arbitration provisions. Accordingly, Plaintiffs’
Motion to Dismiss Defendants’ Counter-complaint is GRANTED.
VI. CONCLUSION
Accordingly, for the above reasons, IT IS HEREBY ORDERED that Plaintiffs’ Motion to Dismiss
Defendants’ Counter-complaint [dkt 45] is GRANTED.
IT IS SO ORDERED.
Date: January 30, 2013
S/Lawrence P. Zatkoff
HON. LAWRENCE P. ZATKOFF
U.S. DISTRICT COURT JUDGE
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Defendants’ decision not to bring a proceeding to vacate the underlying arbitration
award within the 3-month period resulted in a waiver of its affirmative defenses and, now by
extension, its ability to file counterclaims.
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