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District No. 8 v. Clearing

decided: December 9, 1986.


Appeals from the United States District Court for the Northern District of Illinois, Eastern Division, No. 85 C 3151-John F. Grady, Judge.

Author: Ripple

Before CUMMINGS, EASTERBROOK and RIPPLE, Circuit Judges.

RIPPLE, Circuit Judge. District No. 8, International Association of Machinists & Aerospace Workers, AFL-CIO (District 8), brought this action under section 301 of the Labor Management Relations Act, 29 U.S.C. ยง 185, to enforce two arbitration awards rendered in favor of its members. Clearing, Inc. (Clearing), filed both an answer and a counterclaim in which it alleged that the two arbitration awards, as well as a number of other outstanding grievances, were compromised and settled as part of a February 1985 collective bargaining agreement which was orally agreed upon by the parties. According to Clearing, since the arbitration awards had already been settled by this contract, they cannot now be judicially enforced. District 8, in responding to the counterclaim, denies the two arbitration awards were settled in the February 1985 agreement.

After trial, the district court ruled in favor of District 8 on both its complaint and Clearing's counterclaim. The court found that the parties had not come to a "meeting of the minds." Therefore, since there was no agreement, the parties had not validly bound themselves to either a contract or a grievance/arbitration settlement. Accordingly, the district court ordered Clearing to comply with the union's two finalized arbitration awards and to arbitrate the remaining grievances. Thereafter, the district court assessed attorneys' fees against Clearing. This appeal followed.

We hold that the district court did not err in finding that the parties failed to form a valid contract. Accordingly, we affirm the portion of the district court's judgment that orders arbitration of the outstanding grievances and compliance with the finalized arbitration awards. However, we vacate that portion of the district court's judgment that assessed attorneys' fees. Nonetheless, having found that the present appeal is "both frivolous and an appropriate case for imposition of sanctions," Hilgeford v. Peoples Bank, 776 F.2d 176, 179 (7th Cir. 1985), cert. denied, 475 U.S. 1123, 106 S. Ct. 1644, 90 L. Ed. 2d 188 (1986), we exercise our discretion under Fed. R. App. P. 38 and assess costs and attorneys' fees on appeal.


The Contract Formation Issue

In 1985, District 8 and Clearing began negotiations for a new collective bargaining agreement. As part of that agreement, Clearing proposed a settlement of $4000 for tow outstanding arbitration awards and a number of unresolved grievances. This proposed settlement, if accepted, would have resolved these matters permanently.

At the close of the negotiations, District 8 presented Clearing's final benefit proposal to its membership. However, according to their own testimony, the District 8 officials unilaterally withdrew the grievance/arbitration settlement provision for the package. Thus, the proposal, as presented to District 8's membership. was identical to Clearing's offer except for the omission of the grievance/arbitration settlement clause. When this proposal was put to a vote, District 8's membership refused to ratify it. As a result of that rejection, District 8's leadership called for a strike vote. However, that proposition was also defeated. By virtue of the voting procedure established in District 8's constitution, this defeated strike vote served to ratify the benefit package as proposed. Thereafter, District 8's leadership conveyed the results of the membership meeting to Clearing. The conversations between District 8 and Clearing officials, as well as the context in which they arose, are at the heart of this litigation.

Clearing has argued in both the district court and this court that District 8's officials unequivocally conveyed to Clearing their acceptance of the agreement. According to Clearing's president, District 8 officials came to his office after the failed strike vote and told him that the parties had a contract. While District 8 officials also discussed the status of the grievance/arbitration proposal at the time, Clearing contends that its president did not understand that conversation to affect, in any way, the fact that the parties had unconditionally agreed to a contract on the terms as offered by Clearing.

The district judge, in his findings of fact, rejected Clearing's interpretation of the conversation. After reviewing all of the evidence and making a number of credibility determinations, the district court held that: "There was no agreement here. There was a failure of a meeting of minds." Tr. Vol. II at 46. Simply put, after reviewing District 8's evidence concerning the membership meeting, the negotiations, and the conversations with Clearing-and after reviewing the rebuttal evidence offered by Clearing-the district court determined, as a finding of fact, that the parties had never actually reached an agreement: Clearing thought that the settlement was part of the contract, and District 8 thought that the settlement had been removed from the contract.

The scope of our review of the district court's findings of fact is quite narrow. As the Supreme Court has recently noted:

If the district court's account of the evidence is plausible in light of the record viewed in its entirety, the court of appeals may not reverse it even though convinced that had it been sitting as the trier of fact, it would have weighted the evidence differently. Where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous.

Anderson v. City of Bessemer City, 470 U.S. 564, 573-74, 84 L. Ed. 2d 518, 105 S. Ct. 1504 (1985). The district court's findings were not clearly erroneous. There is ample evidence in the record to support the conclusion of the trial judge. He simply performed the fact-finding which, under our system of adjudication, is solely his to perform. He made credibility determinations; he evaluated the relative merit of the parties' factual ...

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