ROWRY v UNIVERSITY OF MICHIGAN
Docket Nos. 91292, 91293
Supreme Court of Michigan
Decided September 22, 1992
441 Mich 1
Argued April 7, 1992 (Calendar No. 2).
While the grievance was pending, the plaintiff filed a workers’ compensation petition, alleging that he was unable to work because of an aggravated hernia condition, blood pressure, and an ulcer condition due to the stress of the job. The petition was denied. Thereafter, he filed another grievance, which resulted in another three-step hearing and a denial of that grievance.
The plaintiff then brought an action in the Court of Claims, seeking to enforce the arbitration award. The court, Peter D. Houk, J., granted summary disposition for the defendant on the ground that the lawsuit was barred by a six-month period of limitation. The plaintiff brought a second action in the Court of Claims, alleging breach of contract, discrimination under the Workers’ Disability Compensation and the Civil Rights Acts, and wrongful discharge. The court again granted summary disposition for the defendant, finding the action barred by the decision in the first case.
The plaintiff appealed both decisions. The Court of Appeals, CAVANAGH, P.J., and JANSEN and T. J. LESINSKI, JJ., consolidated the appeals and affirmed in an unpublished opinion per curiam, relying on Walkerville Ed Ass‘n v Walkerville Rural Communities School, 164 Mich App 341 (1987), applying the six-month period of limitation of the public employees relations act (Docket Nos. 114413, 118325). The plaintiff appeals.
In an opinion by Chief Justice CAVANAGH, joined by Justices LEVIN, BRICKLEY, and MALLETT, the Supreme Court held:
The plaintiff‘s cause of action to enforce the arbitration
1.
2. Two time limitations are applicable to the enforcement of arbitration awards: the six-year period of limitation for breach of contract, and the equitable doctrine of laches, requiring the exercise of due diligence to ensure the timely prosecution of the claim to avoid undue prejudice. Ordinarily, a plaintiff has six years to seek enforcement of an arbitration award. In certain cases this period may be diminished substantially if the arbitration award grants equitable relief and a delay in its enforcement is shown to prejudice the defendant in a way that evokes laches to bar the claim. In this case, because the defendant failed to raise laches in its responsive pleadings or by motion, this affirmative defense was waived. As a result, the claim is governed solely by the six-year period of limitation applicable to a breach of contract. Because the plaintiff‘s complaint was within this six-year period, he may seek enforcement of the arbitration award.
Justice GRIFFIN, joined by Justice BOYLE, concurring, stated that application of the six-year limitation period in this case will seriously undermine state and federal policies favoring the prompt resolution of labor disputes. Involved here is more than a simple breach of contract or a straightforward refusal to comply with an arbitration award. The plaintiff‘s cause of action arises out of a collective bargaining agreement between his union and his employer, and includes a grievance procedure designed to effect prompt resolution of disputes. If a policy of prompt resolution of labor disputes is to have meaning, a
Justice RILEY, concurring, stated that because the labor mediation act, the collective bargaining agreement, and the arbitration award do not provide a period of limitation for enforcement of an arbitration award, the six-year period of limitation for breach of contract must apply.
MCR 2.116(C)(6) is designed to stop parties from litigating matters involving the same questions and claims presented in pending litigation. In this case, the plaintiff filed a second lawsuit against the same party, alleging exactly the same events. Because the same claim was being litigated by the plaintiff in the Court of Appeals and in the Court of Claims, the defendant was entitled to summary disposition pursuant to MCR 2.116(C)(6).
Reversed and remanded.
LABOR RELATIONS — ARBITRATION — LIMITATION OF ACTIONS — LACHES.
An action for enforcement of an arbitration award is limited by the six-year period for breach of contract and by the equitable doctrine of laches; application by analogy of the six-month period of limitation provided by the public employees relations act is inappropriate (
Hurbis, Cmejrek, Clinton & Fernandez (by James R. Cmejrek) and Kurt Berggren for the plaintiff.
Butzel, Long (by Virginia F. Metz and Lynne E. Deitch) for the defendant.
Amici Curiae:
Dickinson, Wright, Moon, Van Dusen & Freeman (by Noel D. Massie) and Miller, Canfield, Paddock & Stone (by Diane M. Soubly) for the American Society of Employers and Greater Detroit Chamber of Commerce.
CAVANAGH, C.J. The plaintiff has appealed to this Court raising two issues: (1) whether the
I
The plaintiff, employed by the University of Michigan as a bus driver since 1973, was discharged in November 1986 for negligently operating his bus. He filed a grievance under his collective bargaining agreement. The agreement has a three-step grievance procedure. The first step requires an employee to notify his immediate supervisor of the particular problem. If an unsatisfactory oral answer is received, step two permits the employee to file a written grievance to the department head, or designated representative, for a written answer. If an unsatisfactory written answer is received, step three requires the submission of a written grievance from the chairperson of his union bargaining committee to the university review committee for a hearing and a written answer. After a grievance has proceeded through the three-step procedure, the grievance may be
While the plaintiff‘s grievance was pending, in December 1986, the plaintiff filed a workers’ compensation petition, alleging that he was unable to work because of an “aggravated hernia condition, blood pressure and ulcer condition due to stress of job.” The plaintiff listed three doctors who had treated him for his condition, Dr. Person-Brown, Dr. Dew, and Dr. Strasius. On May 5, 1987, the defendant‘s doctor, Dr. Stunz, examined the plaintiff and concluded that “[o]n the basis of my evaluation of this man‘s hypertension, peptic ulcer disease and hiatus hernia, I do not believe he is disabled from performing any and all duties which might be involved in the performance of his job as a bus driver for the University of Michigan.”
Following the examination by the defendant‘s doctor, the plaintiff sought reinstatement by the university. On May 12, 1987, the university informed the plaintiff that he would have to submit a university physician‘s statement from the three physicians listed on his workers’ compensation petition before he could return to work. The plaintiff submitted a release from Dr. Person-Brown, but not from the other two doctors. Although the defendant had successfully subpoenaed the records of Drs. Strasius and Dew, a further attempt by the plaintiff to be reinstated was again denied. As a result of this denial, the plaintiff filed another grievance on July 24, 1987, which resulted in a third-step hearing being held on August 6, 1987,
[t]he delays in assessing his ability to return to work are the result of his unwillingness to coöperate in providing the University with necessary medical information on his medical condition. There has been no violation of our Agreement. Therefore, this grievance and requested remedy are denied.
On February 29, 1988, the plaintiff filed a complaint in the Court of Claims to enforce the April 23, 1987, arbitration award. The defendant filed a motion for summary disposition on the ground that the lawsuit was barred by a six-month limitation period. The plaintiff responded with two arguments: First, there was no statutory basis for the six-month period of limitation; and second, even if a six-month period of limitation applied, the lawsuit was brought within six months of the September 18, 1987, decision by the university review committee. The Court of Claims granted the defendant‘s motion for summary disposition.
The plaintiff filed a second complaint in the Court of Claims, alleging breach of contract, discrimination under the Workers’ Disability Compensation Act, discrimination under the Civil Rights Act, and wrongful discharge. The defendant responded with a motion for summary disposition, claiming that another action had been initiated involving the same parties and the same underlying claim.1 The court granted the defendant‘s motion for summary disposition of the plaintiff‘s second complaint.
The plaintiff appealed both decisions. The Court of Appeals consolidated the appeals and affirmed
II
The dispositive issue before this Court is whether the plaintiff‘s cause of action is barred by a six-month period of limitation. We hold that it is not.
The labor-mediation act,
An arbitration proceeding, being based on an agreement, is contractual in nature. Bay City School Dist [v Bay City, 425 Mich 426; 390 NW2d 159 (1986)]. The difficulty in this case arises because of
MCL 423.9d ; MSA 17.454(10.3), which, while allowing public labor disputes to be resolved
by arbitration, does not specify a limitation period for enforcing the arbitration award. Rather, the award rendered “shall be enforceable at law or in equity as the agreement of the parties.”
MCL 423.9d(4) ; MSA 17.454(10.3)(4). This requirement suggests that an arbitration award in the public sector should be subject to the six-year limitation period for contracts contained in the Revised Judicature Act,MCL 600.5807(8) ; MSA 27A.5807(8). This limitation period, although perhaps applicable under strict rules of statutory construction, appears to be an unduly lengthy period for enforcing an arbitration award. This is particularly so when viewed with the statutory declaration that the best interests of the people of this state are served by the prompt settlement of labor disputes.MCL 423.1 ; MSA 17.454(1). Similar policy considerations, under federal labor law, along with a consideration of competing interests affected by the limitation period, have led federal courts to adopt the six-month limitation period contained in § 10(b) of the National Labor Relations Act,29 USC 160(b) , for arbitration purposes. See McCreedy v Local Union No 971, UAW, 809 F2d 1232 (CA 6, 1987).We conclude that the trial court did not err in adopting the six-month limitation period. A six-month period is part of PERA; it effectuates the state‘s express policy in favor of the prompt resolution of labor disputes in the public sector. Adoption of the six-month limitation period also contributes to statute of limitation uniformity. [Walkerville, p 345.]
We disagree. By its terms, the PERA limitation only applies to actions filed with the Michigan Employment Relations Commission.5 Additionally,
Rather than seeking money damages for breach of contract, the plaintiff in this case seeks specific performance of the arbitration award that orders his reinstatement as an employee of the defendant. In Keys v Hopper, 270 Mich 504, 507; 259 NW 319 (1935), this Court recognized that “[a] suit for the specific performance of a contract [is] a purely equitable remedy....” (Citation omitted.) As this Court stated in Lothian v Detroit, 414 Mich 160, 170; 324 NW2d 9 (1982),
[C]ourts traditionally have not bent to the strictures of a statute of limitations where the law does not supply relief analogous to that afforded in equity. Thus, it is said that ... “where the relief sought is in its nature one of equitable and not of legal cognizance, and the remedy is of a purely equitable nature, equity follows its own rules,” Michigan Ins Co [v Brown, 11 Mich 265, 272 (1863)].
Consequently, we find that the Court of Appeals erred in applying the PERA six-month period of limitation “by analogy” in this case.
III
We do not suggest that an arbitration award can be enforced without limitation. We find two time
issue and cause to be served upon the person a complaint stating the charges in that respect, and containing a notice of hearing before the commission or a commissioner thereof, or before a designated agent, at a place therein fixed, not less than 5 days after the serving of the complaint. No complaint shall issue based upon any unfair labor practice occurring more than 6 months prior to the filing of the charge with the commission ....
The first time restriction applicable to the enforcement of an arbitration award is the six-year period of limitation for breach of contract.6 As this Court has previously recognized, arbitration is a matter of contract.7 It is the agreement that dictates the authority of the arbitrators and the disputes to be resolved through arbitration.8 In this case, the arbitration agreement provides that “[t]he arbitrator‘s decision when made in accordance with his/her jurisdiction and authority established by this Agreement, shall be final and binding upon the University, the Union, and the employee or employees.” The university has never challenged the authority of the arbitrator to resolve this labor dispute. Therefore, the university‘s alleged failure to comply with the arbitrator‘s decision would constitute a breach of that contractual provision and would be subject to the six-year limitation period for breach of contract.
The second time restriction applicable to this case is the equitable doctrine of laches. As previously noted, the plaintiff is seeking specific performance of his arbitration award and specific performance is a “purely equitable remedy.” In defining the scope of the various limitation periods contained in the Revised Judicature Act,
The prescribed period of limitations shall apply equally to all actions whether equitable or legal relief is sought. The equitable doctrine of laches
shall also apply in actions where equitable relief is sought. [Emphasis added.]
In the context of this case, we interpret this statutory provision to require all actions seeking judicial enforcement of arbitration awards to be commenced within six years after the award is granted. Where the award purports to grant relief that is traditionally equitable in nature, the equitable doctrine of laches also applies, requiring the exercise of due diligence to ensure the timely prosecution of the plaintiff‘s claim to avoid unduly prejudicing the defendant.
While we find authority for this approach in
The omission to do what one is by law required to do to protect his rights, and which justifies a fair presumption that he has abandoned the same, under circumstances which misled or prejudiced an adverse party, may in equity operate as laches which bar[s] the assertion of such right later under changed conditions, even though the statute of limitations has not run.
IV
We hold that a plaintiff ordinarily has six years to seek enforcement of an arbitration award. We also recognize that in certain cases this time period may be substantially diminished if a plaintiff‘s arbitration award grants equitable relief and a delay in its enforcement is shown to
In failing to raise laches in its responsive pleadings or by motion, the defendant has waived this affirmative defense.10 As a result of this waiver, the plaintiff‘s claim in this case is governed solely by the six-year period of limitation applicable to a breach of contract. Because the plaintiff filed his complaint with the Court of Claims well within this six-year period, the plaintiff is entitled to seek enforcement of his arbitration award. Accordingly, we reverse the judgments of the lower courts, and we remand this matter to the trial court for further proceedings consistent with this opinion.
LEVIN, BRICKLEY, and MALLETT, JJ., concurred with CAVANAGH, C.J.
GRIFFIN, J. Reluctantly, I concur in the result reached by the majority. I write separately to express my concern that application of a limitation period of six years, rather than six months, will seriously undermine state and federal policies favoring the prompt resolution of labor disputes.
In its analysis, the majority concludes that the six-year period generally applicable to contract actions1 is the appropriate limitation period to apply to this plaintiff‘s action to “enforce” a labor
When it adopted the labor mediation act,3 our Legislature stated:
It is hereby declared as the public policy of this state that the best interests of the people of the state are served by the prevention or prompt settlement of labor disputes .... [
MCL 423.1 ; MSA 17.454(1).]
This act encourages use of arbitration in the settlement of disputes by providing that an agreement to arbitrate “shall be binding upon the parties,”4 and stating that the arbitration award “shall be enforceable at law or in equity as the agreement of the parties.”5
Concern at the state level for rapid resolution of labor disputes is consistent with established policy at the federal level. In DelCostello v Int‘l Brother-
“This system, with its heavy emphasis on grievance, arbitration, and the ‘law of the shop,’ could easily become unworkable if a decision which has given ‘meaning and content’ to the terms of an agreement, and even affected subsequent modifications of the agreement, could suddenly be called into question as much as [three] years later.” [462 US 169, quoting United Parcel Service, Inc v Mitchell, 451 US 56, 64; 101 S Ct 1559; 67 L Ed 2d 732 (1981).]
Recognizing the importance of stable relationships in the workplace and the need for finality in a collectively bargained grievance procedure, the Court elected to apply the six-month limitation period of § 10(b) of the Labor-Management Relations Act,
limitations actually designed to accommodate a balance of interests very similar to that at stake here....” DelCostello, 462 US 169.
In Samples v Ryder Truck Lines, Inc, 755 F2d 881, 888 (CA 11, 1985), the United States Court of Appeals for the Eleventh Circuit applied the DelCostello rationale to an employee‘s action to enforce a labor arbitration award. The court found Georgia‘s six-year contract limitation period inapplicable because “a grievance arising during the term of a collective bargaining agreement bears little likeness to a common law breach of contract claim.” Similarly, in Int‘l Ass‘n of Machinists v Allied Products Corp, 786 F2d 1561, 1564 (CA 11, 1986), the Eleventh Circuit applied the six-month limitation period to a union‘s action to compel arbitration, explaining that Alabama‘s six-year limitation period for contract actions “contravenes the federal policy of the prompt resolution of labor disputes.”
As I see it, the same rationale counsels against application of a six-year contract limitation period in the instant case. The defendant did not expressly refuse to comply with the arbitration award. Rather, defendant claimed that because plaintiff filed a workers’ compensation petition shortly after his discharge, he could not be returned to active employment unless he was physically able to work. Defendant insisted that plaintiff should provide statements from the three physicians listed on his petition.8 Whether defendant
Our public employee relations act,
was justified in imposing such conditions may depend upon the interpretation to be given to the collective bargaining agreement. Surely, if a policy of prompt resolution of labor disputes is to have meaning, a relatively short limitation period should govern resort to the courts after exhaustion of a grievance procedure.9
Although the Legislature has taken pains to declare that it is the public policy of this state to encourage prompt resolution of labor disputes, unfortunately, it has failed to provide suitable statutes of limitations for the implementation of that policy.
I agree with the reasoning set forth in Walkerville Ed Ass‘n v Walkerville Rural Communities School, 165 Mich App 341; 418 NW2d 459 (1987),10
All other personal actions shall be commenced within the period of 6 years after the claims accrue and not afterwards unless a different period is stated in the statutes. [
MCL 600.5813 ; MSA 27A.5813.]
It is at least arguable that
Rather than allow a wide disparity to develop in the treatment of similar claims presented by public and private employees, I urge the Legislature to address this issue and to provide a more appropriate period of limitation in keeping with its stated policy of encouraging expeditious resolution of labor disputes.
BOYLE, J., concurred with GRIFFIN, J.
RILEY, J. (concurring). I agree with the majority that the Court of Appeals erred in applying the six-month period of limitation to dismiss plaintiff‘s
165 Mich App 344. However, the panel found MCR 3.602 inapplicable because the Legislature has provided that chapter 50 “shall not apply to collective contracts between employers and employees or associations of employees in respect to terms or conditions of employment.”
An award rendered in a proceeding hereunder shall be enforceable at law or in equity as the agreement of the parties. [
MCL 423.9d(4) ; MSA 17.454(10.3)(4).]
Two factors contribute to the conclusion that the six-year provision for breach of contract must apply here. First, as the majority recognized, the Legislature did not provide for an express time frame to enforce arbitration awards in the labor mediation act itself. Therefore, we are left with the belief that the Legislature intended for us to apply the existing six-year period of limitation for breach of contract actions to govern this issue. Second, we have held that “[a]n arbitrator‘s jurisdiction and authority to resolve a particular dispute concerning the appropriate interpretation of a collective bargaining agreement derives exclusively from the contractual agreement of the parties . . . .” Port Huron Area School Dist v Port Huron Ed Ass‘n, 426 Mich 143, 151; 393 NW2d 811 (1986). Given that an arbitrator is bound by the terms of the collective bargaining agreement, there is nothing that would have precluded the
Because neither the labor mediation act nor the collective bargaining agreement (nor the arbitration award itself) provides a statute of limitation to enforce an arbitration award, the six-year period of limitation for breach of contract must apply.
I write separately, however, to indicate my agreement with the decision of the trial court and the Court of Appeals to dismiss plaintiff‘s second lawsuit, which arose out of the same facts that are involved in the instant case, pursuant to MCR 2.116(C)(6).
I
After plaintiff was fired from his job as a bus driver with the University of Michigan, he took the matter to arbitration and won reinstatement without back pay. However, the university did not immediately reinstate him because, while the discharge grievance was pending, plaintiff had filed a workers’ compensation petition and another grievance. Plaintiff filed a claim in the Court of Claims, seeking to enforce the arbitrator‘s decision ten months after that decision was made. In granting defendant‘s motion for summary disposition, the Court of Claims applied the Walkerville six-month statute of limitation and concluded that the statute had begun to run at the time the award was rendered, and that, therefore, he had missed his opportunity to file this claim and enforce the arbitration award. Plaintiff then appealed that decision. While the appeal was pending, plaintiff
Defendant then moved for summary disposition pursuant to MCR 2.116(C)(6), which provides for dismissal of a subsequent lawsuit when there is another lawsuit that has been initiated between the same parties involving the same claims as the first suit.3 The Court of Claims concluded that because the same claims were raised in the first case as in the second, plaintiff‘s second claim is precluded. The Court of Appeals joined both appeals, dismissed the first on the basis of the six-month Walkerville statute of limitation, and the second pursuant to MCR 2.116(C)(6) for the reasons stated by the Court of Claims.4
II
MCR 2.116(C)(6), a revision of GCR 1963, 116.1 and former Court Rule No. 18, § 1(d) (1945), is a codification of the former plea of abatement by prior action. Chapple v Nat‘l Hardwood Co, 234 Mich 296, 297; 207 NW 888 (1926); Darin v Haven, 175 Mich App 144, 148; 437 NW2d 349 (1989). The rule is designed to stop parties from endlessly litigating matters involving the same questions and claims as those presented in pending litigation. Pinel v Campsell, 190 Mich 347, 351-352; 157 NW 271 (1916); Chapple, supra at 298; Rene J
As noted above, plaintiff filed his second lawsuit against the same party, alleging exactly the same events in both suits, while his first lawsuit was pending before the Court of Appeals. Plaintiff argues that the two lawsuits could not involve the same claim “when the first Complaint sought only enforcement of an arbitration award, and the Second Complaint sought damages for breach of contract, wrongful discharge, discrimination under the Civil Rights Act, and discrimination under the Workers’ Disability Compensation Act.” I disagree.
A review of both complaints clearly demonstrates that in each case, plaintiff is in fact making the same claim, i.e., that the university wrongfully refused to reinstate him following the arbitration award.5
when a court of competent jurisdiction has become possessed of a case, its authority continues, subject only to the appellate authority, until the matter is finally and completely disposed of; and no court of co-ordinate authority is at liberty to interfere with its action. [Maclean v Wayne Circuit Judge, 52 Mich 257, 259; 18 NW 396 (1884).]
See also Detroit Trust Co v Manilow, 272 Mich 211, 214; 261 NW 303 (1935); Zimmer v Byers, 319 Mich 410, 416; 29 NW2d 838 (1947).
In this case, the Court of Appeals had not disposed of plaintiff‘s first claim when he filed the second lawsuit asserting the same claim. Because the same claim as was filed in the Court of Claims was being litigated by the plaintiff in the Court of Appeals, defendant was entitled to summary disposition pursuant to MCR 2.116(C)(6) on the authority of Maclean, Manilow, and Zimmer.
In sum, I agree with the majority that the Court of Appeals erred in applying Walkerville‘s six-month period of limitation, but did not err in affirming the Court of Claims dismissal of plaintiff‘s second lawsuit under MCR 2.116(C)(6).
Notes
Whenever it is charged that any person has engaged in or is engaging in any such unfair labor practice, the commission, or any agent designated by the commission for such purposes, may
The present trend is to see claim in factual terms and to make it coterminous with the transaction regardless of the number of substantive theories, or variant forms of relief flowing from those theories, that may be available to the plaintiff; regardless of the number of primary rights that may have been invaded; and regardless of the variations in the evidence needed to support the theories or rights. [Id. at 197. Emphasis added.]The Restatement‘s position is consistent with our broad approach to claim preclusion, Gose v Monroe Auto Equipment Co, 409 Mich 147, 160; 294 NW2d 165 (1980), Gursten v Kenney, 375 Mich 330; 134 NW2d 764 (1965), and applicable in this issue.
This informs you and Mr. Rowry that Mr. Rowry has been reinstated, but that Mr. Rowry has a petition pending under the Worker‘s Compensation Act in which he alleges that he is, and has been, unable to work because of an “aggravated hernia condition, blood pressure and ulcer condition.” He also alleges as of December 1, 1986 his disablement is continuing. . . .As a result, and under these circumstances, the University is in no position to return Mr. Rowry to active work status until such time as his medical condition permits. This determination will be made in the same manner as all other similar type cases.