TQM CONSTRUCTION CO. v. NEW JERSEY BUILDING CONSTRUCTION LABORERS DISTRICT COUNCIL LOCAL 394

Filing 17

OPINION fld. Signed by Judge Jose L. Linares on 6/15/11. (sr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
___________________________________
:
TQM CONSTRUCTION CO.,
:
:
Petitioner,
:
v.
:
CIVIL ACTION NO. 11-831 (JLL)
:
:
OPINION
NEW JERSEY BUILDING
:
CONSTRUCTION LABORERS DISTRICT :
COUNCIL, LOCAL 394
:
:
Respondent.
:
____________________________________:
LINARES, District Judge.
Currently before the Court is Plaintiff’s motion for reconsideration of this Court’s denial
of Plaintiff’s motion to vacate Bernard Suskewicz’s arbitration award dated December 17, 2010.
The Court has considered the submissions of the parties and decides this matter without oral
argument pursuant to Rule 78 of the Federal Rules of Civil Procedure. For the reasons set for
below, Plaintiff’s motion for reconsideration is denied.
I.

BACKGROUND
The facts of this case are more fully detailed in this Court’s April 4, 2011 Opinion. Only

those facts relevant for the present motion are included here.
In or around Summer 2010, TQM Construction Co. (“TQM”) was awarded a contract by
the Elizabeth Board of Education to perform general contracting work at Roosevelt School in
Elizabeth, New Jersey (the “Elizabeth Job”). Brief in Support of Petitioner’s Motion to Vacate
And/Or Limit the Arbitration Award (“Pet. Brief”) at 1. In connection with the Elizabeth Job,

TQM hired various subcontractors prior to commencing work. Id. On or about July 28, 2010,
construction began on the Elizabeth Job. On that date, Alfred Castagna (“Castagna”) a business
manager from Local 394 contacted TQM’s president, Bill DeVre (“DeVre”), to see if TQM
would hire union workers. Devre informed Castagna that the Elizabeth Job was not a significant
project, but that he would be willing to hire a single Local 394 worker in a limited capacity for
the Elizabeth Job. Pet. Brief at 1.
On or about July 28, 2010, DeVre executed a Short Form Agreement, which incorporated
the Collective Bargaining Agreement — entitled the 2007-12 Building, Site and General
Construction Agreement (the “CBA”) — in full. See Short Form Agreement at Pet. Brief, Ex. A
(“The undersigned Employer and Unions hereby agree to be bound by the terms and conditions
set forth in the 2007-12 Building Site and General Construction Agreement, which agreement is
incorporated herein as if set forth in the full.”). Petitioner contends that DeVre only signed the
agreement because Castagna represented that it was necessary to get the worker paid. Pet. Brief
at 1. Further, Petitioner alleges that the CBA was not provided with the Short Form agreement,
nor did it ever receive a copy, despite repeated requests, until this matter was submitted to
arbitration. Pet. Brief at 2. Article 7.10(a) of the CBA provides in relevant part:
On every job where laborers are employed by an Employer bound by this Agreement,
there shall be a laborer Job Steward who shall be a member of the territorial local
union where the job is located and who shall be competent in the work to be
performed . . . The Job Steward Shall be the first laborer hired and the last laborer to
be laid off. No laborer shall be permitted to work without a Job Steward on the job.
The Job Steward shall not be discharged except for just cause and upon twenty-four
hours prior written notice to the business manager.
See CBA, Cross- Motion to Confirm Arbitration Award and in Opposition to Plaintiff’s Motion
to Vacate (“Resp. Brief”), Ex. A.
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James Collins (“Collins”) was assigned to the Elizabeth Job by Castagna. After Collins
had worked at the project for two days, on or about August 2, 2010, a dispute arose at the jobsite
whereby DeVre complained about the sufficiency of Collins’ work. Id. Accordingly, on or about
August 3, 2010, Castagna, DeVre and Collins met at the jobsite. Id. At that time it was agreed
between Castagna and DeVre that Collins’ work would be limited to: (1) fixing a plastic
partition; (2) cleaning concrete in the bathroom area; and (3) digging a single hole in the ground.
Id. Collins worked on these tasks on August 3 and August 9, 2010. Collins was paid for a full
days work on July 28, August 2, August, 3, and August 9, 2010. Id.
TQM was noticed on November 15, 2010 of arbitration of a claim alleging that Petitioner
had failed to use Union labor for the remaining performance of the CBA-covered work and
cleanup work at the Elizabeth Job. Resp. Brief at 3-4. A hearing was held on December 8, 2010
during which TQM was not represented by counsel. After a hearing, on December 17, 2010,
Arbitrator Suskewicz issued a decision in favor of the Union.
On February 8, 2011, TQM Construction filed a petition with this Court to vacate the
arbitrator’s award. On March 7, 2011, Respondents filed a cross-motion to confirm the
arbitration award and opposition to Petitioner’s motion to vacate the arbitration award to which
Petitioner filed its reply brief. On March 16, 2011, Respondent requested permission to file a
surreply, which Petitioner opposed. On April 4, 2011, this Court denied Petitioner’s motion to
vacate the arbitration award and granted Respondent’s motion to confirm the arbitration award.
In its Order, this Court wrote that, “Petitioner’s request to file a surreply is denied as moot.” In
actuality, this Order should have read “Respondent’s request to file a surreply is denied as moot.”
This oversight was merely a typo and was not intended to imply that Petitioner’s reply brief was
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not filed out of right, or that the Court failed to receive Petitioner’s reply brief.
II.

LEGAL STANDARD
“Reconsideration is an extraordinary remedy” and should be “granted ‘very sparingly.’”

See L.Civ.R. 7.1(I) cmt.6(d); see also Fellenz v. Lombard Investment Corp., Nos. 04-3993, 045768, 04-3992, 04-6105, 2005 WL 3104145, at *1 (D.N.J. Oct. 18, 2005). A motion for
reconsideration must “set[] forth concisely the matter or controlling decisions which the party
believes the Judge or Magistrate Judge has overlooked.” L.Civ.R. 7.1(I). When the assertion is
that the Court overlooked something, the Court must have overlooked “some dispositive factual
or legal matter that was presented to it.” McGovern v. City of Jersey, No. 98-5186, 2008 WL
58820, at *2 (D.N.J. Jan. 2, 2008). The Court will reconsider a prior order only where a different
outcome is justified by: (1) intervening change in law; (2) availability of new evidence not
previously available; or a (3) need to correct a clear error of law or manifest injustice
(“reconsideration elements”). N. River Ins. Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218
(3d Cir. 1995).
III.

ANALYSIS
Plaintiff avers that the Court either did not consider or appreciate the arguments

highlighted in Petitioner’s reply brief. Brief in Support of Petitioner’s Motion for
Reconsideration (“Pet. Rec. Brief”) at 2. Namely, Plaintiff claims that 1) any alleged agreement
between the parties is void on the ground of fraud in the execution; 2) that the August 3, 2010
Agreement of the parties operated as a novation of any previous alleged agreement; and 3) that
the Union waived its right to relief before the New Jersey State Board of Mediation. Id. at 1-2.
However, even when a Court does not explicitly treat and reject a particular argument in an
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opinion, it does not follow that said argument was not considered. See Black v. Romano, 471
U.S. 606, 616 (1985) (“The procedures required by the Due Process Clause [] were afforded in
this case, even though the [] judge did not explain on the record his consideration and rejection of
alternative [arguments].”). To the contrary, the Court considered all of the arguments presented
by the parties before rendering a decision, albeit an unfavorable one for Petitioner. In any event,
for the purposes of clarity, the Court will specifically address the arguments raised in the instant
motion.
A. The Agreement is Void on the Grounds of Fraud in the Execution
Petitioner argues that the Union made false representations to TQM regarding the CBA
and Short Form Agreement, and therefore the contract is void due to fraud in the contract’s
execution. Pet. Rec. Brief at 8-10. Petitioner is correct that, “fraud in the execution” occurs
when a party enters into an agreement that contains markedly different terms than the agreement
it believes it has entered into. Electrical Workers Local 58 Pension Trust Fund v. Gary’s Electric
Service Co., 227 F.3d 646, 656 (6th Cir. 2000) (internal citations omitted). To have a plausible
“fraud in the execution” claim, the challenging party must demonstrate the he or she was
prevented in some way from knowing or having a reasonable opportunity to know of the
agreement’s character or essential terms. Hetchko v. Woodlawn at Grassmere, Inc., 116 F.3d 28,
31-32 (2d Cir. 1997). A party asserting a defense of “fraud in the execution” must demonstrate
“excusable ignorance” of the terms of the contract. That is, Petitioner must demonstrate a
legitimate reason for failing to discover the terms of the contract.
Petitioner argues that TQM was told it needed to sign the Short Form Agreement merely
so that Collins could get paid, and that, despite repeated requests, the Union never provided the
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CBA to TQM. Pet. Rec. Brief at 10. Plaintiffs maintains that there is no “more compelling case
of fraud in the execution.” Id. This Court disagrees. Rather, there was nothing preventing
Petitioner, under these circumstances, from declining to sign the Short Form Agreement until it
had an opportunity to review the terms of the CBA. Petitioner’s refusal to sign the contract until
the full version could be provided would not have resulted in any injury to petitioner. By its own
admission, Petitioner concedes that it had not intended to hire any additional workers for the
Elizabeth Job, and in fact, it was the Union who had approached them about doing so. Pet. Brief
at 4. (“DeVre informed Castagna that the Elizabeth Job was not a significant project and that he
had already had subcontractors in place for the majority of the work, but that TQM would be
willing to hire a single Local 394 worker in a limited capacity for the Elizabeth Job.”). Any
delay that might have resulted from demanding the full contract before entering into it would
have injured Respondent, not Petitioner. Failure to demand that the Union provide the contract
before entering into it does not constitute “excusable ignorance.” To hold otherwise would allow
parties to escape their contractual obligations under all types of circumstances.
Petitioner further argues that “this very Union has a history of preying on the
unsuspecting contractor.” Pet. Rec. Brief at 9. The Court takes no position on the merits of this
statement other than to note that, if Petitioner believed this statement to be true, it should have
exercised additional caution before entering into a contract with the Union. Suffice to say that
entering into a contract with a party bearing a reputation for committing fraud without first
demanding that the full contract be provided does not constitute “excusable ignorance.” The
Court declines to void a contract based on Petitioner’s failure to do their due diligence. As such,
the Court finds that there was no fraud in the execution of the contract.
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B. The August 3, 2010 Agreement Operated as a Novation of the Previous Alleged
Agreement
Petitioner argues that the parties’ August 3, 2010 Agreement to limit Collins’ work to
three specific tasks acted as a novation to the July 28, 2010 Agreement. There is a substituted
contract or novation if: 1) there is a valid former contract; 2) the parties agree to a new contract;
3) the parties form a valid new contract; and 4) the parties intend to extinguish the old contract.
T & N v. Pennsylvania Ins. Co., 44 F3d 174, 186 (3d Cir. 1994). In contrast, a contract
modification only alters certain portions of the contract but leaves the original agreement intact.
In re Barrett, 417 B.R. 471 (N.D. Oh. 2009).
In this case, while it is clear there was a valid former contract, that is the only element of
a novation that is present here. There is nothing on the record to demonstrate that the parties
intended to extinguish or supersede the original contract. Neither party has represented that any
of the other contract terms, beyond Collins’ responsibilities, were even discussed on August 3rd,
much less superseded. In fact, during the original negotiation, the Union explicitly represented to
TQM that the parties needed to effectuate the Short Form Agreement in order for Collins to get
paid. Therefore, it would be illogical for TQM to have assumed that, without additional
discussions regarding payment, the August 3rd modification superseded the entire July 28th
agreement.
Further, any argument that Petitioner intended that the August 3rd discussions would
supersede the July 28th agreement, is wholly inconsistent with Petitioner’s argument that it was
not aware of the terms of the original agreement. Petitioner could never have possessed the
requisite intent to adjust the terms of the original agreement when it maintains that it was never

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even aware of the terms of same. The facts of this case repeatedly demonstrate Petitioner’s
failure to do their due diligence upon both entry into and modification of the contract with the
Union. Said failures should not now invalidate an otherwise valid contract. Accordingly, this
Court finds that the August 3rd discussion constitutes a modification of the contract, and not a
novation.
C. The Union Waived Its Right to Seek Relief Before the New Jersey State Board of
Mediation
Petitioner maintains that the Union waived its right to arbitrate because, pursuant to the
CBA, the Union never expressed its grievances to a company officer prior to seeking an
administrative remedy. However, procedural arbitrability is for the arbitrator to decide.
Operating Engineers, Local 150 v. Flair Builders, 406 U.S. 487 (1972). Abitrator Suskewicz
ultimately issued a ruling on the matter; thus, it is clear that he found the claim to be properly
arbitrable. As stated in an earlier opinion, this Court must extend great deference to an
arbitrator’s authority to fashion appropriate remedies to fit particular situations. An award must
be confirmed so long as that arbitrator’s interpretation can in any rational way be derived from
the facts and agreement. Roberts & Schafer Co. v. Mine Workers, Local 1846, 812 F.2d 883,
885 (3d Cir. 1987).
In its argument, Petitioner highlights the following language from the CBA:
21.20 Arbitration Procedure
(c) In the event an Employer unjustifiably fails to pay wages or fringe benefits when due,
the Union has the absolute right to strike and picket the delinquent individual contractor.
Economic hardship shall not be a justification for nonpayment
(d) All other questions or grievances involving the interpretation and application of this
Agreement, or any grievance concerning any term or condition of work, other than trade
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jurisdictional disputes arising under Article II, shall be handled under the following
procedures:
Step I

Between the business manager of the Union or his designee and a
company officer at the job site. The meeting shall be arranged as soon as
practical but in no event later than seven (7) working days.

Step II

If the controversy is not settled pursuant to Step II [sic] either party may
then submit the matter within ten (10) working days to arbitration pursuant
to the rule and procedures of the New Jersey State Board of Mediation for
final and binding decision. Only the Union or the Association may submit
a dispute to arbitration.

Petitioner claims that this language dictated that Respondent complete “Step I” before proceeding
to “Step II” in order for the matter to be arbitrable. Although the Petitioner raised this argument
in its reply brief in support of its motion to vacate the arbitration award, there is no indication
that petitioner raised this argument during the arbitration. As such, Arbitrator Suskewicz does
not explicitly treat this argument in his arbitration award. However, as Arbitrator Suskewicz
ultimately issued an opinion on the matter, it is clear that he determined that the matter was
arbitrable. As such, the Court will not disturb his determination as long as there are rational
bases for this decision, and in light of the language of the CBA, there are.
This Court finds that, upon reading the CBA, there is a rational argument that parts C and
D are distinct. That is, Steps I and II constitute the proper procedure for “all other grievances ”
as described in Part D; exclusive of the failure to pay wages and benefits, which is treated in Part
C. Therefore, it was not necessary for the Union to confer with a company official prior to
initiating arbitration. Such an action would only be required if their grievance was not regarding
a failure to pay wages or benefits. Nor was it necessary, as Petitioner argues, for the Union to
picket the job site. Part C makes clear that taking such an action was merely an option, not a
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requirement. Given this reading, it is clear there was a rational basis for the Arbitrator to
determine that this dispute was arbitrable. As such, the Court is not in the position to overturn
the Arbitrator’s determination.

IV.

CONCLUSION
In light of the foregoing, Petitioner’s motion for reconsideration is denied. An

appropriate order accompanies this opinion.

DATED: June 15, 2011

/s/ Jose L. Linares
JOSE L. LINARES
U.S. DISTRICT JUDGE

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