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BAAKE v. GENERAL AMERICAN TRANSPORTATION CORP.

November 14, 1972

JAMES BAAKE ET AL., PLAINTIFFS,
v.
GENERAL AMERICAN TRANSPORTATION CORPORATION, A CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Parsons, District Judge.

MEMORANDUM OPINION AND ORDER

This case is before me today for ruling on cross motions for summary judgment by plaintiffs and defendant.

The facts of the case have been stipulated to by all parties concerned and are, therefore, well documented.

The defendant, is a New York corporation, which maintained a facility in Milwaukee, Wisconsin for the maintenance and repair of railroad refrigerator cars until July 12, 1968 (hereinafter referred to as the "Milwaukee car repair shop"). Plaintiffs are former employees of the defendant at that shop and were at all relevant times, members of Local Lodge No. 390, Brotherhood Railway Carmen of the United States and Canada (hereinafter referred to as the "Union").

Plaintiffs were in a collective bargaining unit represented by the Union and were covered by a collective bargaining agreement dated June 13, 1967 between the defendant and the Union.

On September 13, 1966, defendant and the Union entered into a Pension Agreement which became effective November 1, 1966, and which provided that it would remain in effect until midnight, December 31, 1969 and thereafter from year to year until written notice of termination was given by either party not more than ninety days, nor less than sixty days prior to December 31, 1969 or on or before any annual expiration date thereafter.

During the period November 1, 1966 through July 1, 1968 plaintiffs retired under the said Pension Agreement and began to receive monthly pensions. The benefits under the Pension Agreement were provided by contributions made by the Company to a trust fund held by the First National Bank of Chicago. The amount of the contributions was determined by an actuarial firm.

On April 29, 1968 defendant notified the Union that it was considering curtailment of work at its Milwaukee car repair shop and on June 7, 1968 its decision to do so was announced. Defendant and the Union entered into negotiations concerning the effect of curtailment of operations at the Milwaukee car repair shop and held meetings pursuant to that end in May, June, July, October and November of 1968. When the defendant and the Union were unable to reach agreement on the subject of pensions the dispute was referred to counsel for the defendant and the Union.

The Union's position was that pensions should be paid to employees who retired under the Pension Agreement for their lifetime. The defendant's position was that it ought to be required only to pay pensions from the trust until amounts contributed by defendant during the term of the Pension Agreement were exhausted.

On October 8, 1969 representatives of the defendant notified the Union that defendant elected to terminate the Pension Agreement as of December 31, 1969. On December 19, 1969 the defendant and the Union entered into a written "Termination Agreement" dated December 19, 1969. Plaintiffs were notified on July 28, 1970 that amounts available in the trust fund would be sufficient to provide monthly pensions only for a portion of 1970. Plaintiffs received pensions in full for all months up to and including August of 1970 and partial pensions for the month of September of 1970. Since the latter date plaintiffs have not received any further pension benefits. Plaintiffs then brought an action under Section 301 et seq. of the Labor Management Relations Act of 1947, as amended, 29 U.S.C. § 185 et seq., claiming that the defendant had breached its Pension Agreement with the Union and asking for specific performance of that Agreement. Thereafter, the cross motions for summary judgment that are before the Court on this date were filed.

Plaintiffs allege two grounds for their right to summary judgment. The first ground is that "The unambiguous terms of the Pension Agreement, specifically vest in them an absolute right to a lifetime pension once all the conditions have been fulfilled." The second ground is that "The doctrine of equitable estoppel prohibits the defendant from now denying that plaintiffs are entitled to full pension."

Despite the compassion that I feel for the plaintiffs' plight I find I must hold for the defendant for the reasons that follow.

It is obvious beyond any need for explanation that a contract must be construed so as to give effect to all of its provisions. Thus, all portions of the Pension Agreement must be read in the light of all other provisions of that Agreement and the Termination Agreement. It would be well at this time to elucidate ...


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