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Mike & Sons Construction, Inc. v. International Union of Bricklayers

August 25, 2009

MIKE & SONS CONSTRUCTION, INC., AN ILLINOIS CORPORATION, AND DJOKIC MASONRY CONSTRUCTION COMPANY, A DISSOLVED ILLINOIS COMPANY, PLAINTIFFS/COUNTER DEFENDANTS,
v.
INTERNATIONAL UNION OF BRICKLAYERS AND ALLIED CRAFTWORKERS, DISTRICT COUNCIL #1, DEFENDANT/COUNTERCLAIMANT.



The opinion of the court was delivered by: Magistrate Judge Susan E. Cox

MEMORANDUM OPINION AND ORDER

On August 11, 2008, an arbitration award was issued in favor of the defendant, the Illinois District Council No. 1 of the International Union of Bricklayers and Allied Craftworkers ("the Union"), finding that plaintiffs, Mike and Sons Construction, Inc. ("Mike and Sons") and Djokic Masonry Construction Company ("Djokic Masonry") - along with two individuals- failed to follow the terms of a collective bargaining agreement ("CBA"). On September 9, 2008, plaintiffs filed this action to vacate that award. Then eight months later, on April 30, 2008, plaintiffs moved for leave to file an amended complaint to add as plaintiffs the two individuals: (1) Mladin Djokic ("Mladin"), the owner of a now defunct business, Djokic General Masonry Company ("General Masonry"); and, (2) Milenko Djokic ("Milenko"), Mladin's son and the owner of Mike and Sons. That motion is now before the Court [dkt. 21].

The Court must determine whether, pursuant to Rule 15 of the Federal Rules of Civil Procedure, the complaint may be amended to add Mladin and Milenko as plaintiffs. There is a liberal policy of granting amendments under Rule 15.*fn1 But in this case the 90-day statute of limitations to challenge arbitration awards complicates the application of that rule.*fn2

I. Facts

On March 15, 1989, Mladin signed a CBA with the Union on behalf of General Masonry, a corporation which ceased operation around 1997 and was dissolved in 2000. The CBA incorporated agreements between the Union and employers and provided that employers utilize eligible members of the bargaining unit, pay specified wages, and make fringe benefit contributions for that work.*fn3 Ten years later, on November 16, 1998, Mladin's son, Milenko, created Mike and Sons. Mike and Sons did not enter into a CBA with the Union.

After another ten years, on March 26, 2008, the Union informed Mladin, Milenko, Djokic Masonry, and Mike and Sons that they had violated the terms of the CBA and that the Union had filed a grievance with a Joint Arbitration Board ("JAB"). On June 24, 2008, the JAB heard evidence and testimony on the alleged violations. On August 11, 2008, the JAB granted the Union's grievance and held that Mike and Sons, General Masonry, Milenko and Mladin were all "one and the same" and "jointly responsible" for the obligations of each other.*fn4 The JAB specifically found that they, as a group, disregarded the CBA and used ineligible employees to perform bargaining work.*fn5 The JAB assessed damages to be paid to the Union in the amount of $41,904.16. The next month, the two companies, Mike and Sons and Djokic Masonry, filed a motion to vacate the JAB's award.

II. Analysis

This case arises under section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, to vacate the JAB's award. Section 301, however, does not provide a statute of limitations to challenge an arbitration decision. We look, therefore, to the statute of limitations for "a comparable action in the forum state."*fn6 The Illinois Arbitration Act prescribes a 90-day statute of limitations.*fn7 Here, plaintiffs filed their motion to vacate the arbitration award within the 90-day limit. But when plaintiffs' filed their motion to amend the complaint, more than 90 days had already passed. So we are left with the following issue: whether it is considered timely to allow plaintiffs to amend their original motion to vacate by adding two additional plaintiffs, outside the 90 day period, when the original motion was timely. We turn to this question knowing that the Seventh Circuit has not addressed this precise issue.

The Union argues that the Court should follow Seventh Circuit case law that strictly applies the 90-day statute of limitations to arbitration cases and bar plaintiffs' amendment. Plaintiffs, however, assert that Mladen never operated a business called General Masonry, the company that signed the CBA in 1989, so the CBA is void ab initio. In fact, plaintiffs claim that the company General Masonry never even existed (despite Mladen signing the CBA as its representative). Finally, plaintiffs argue that either way, Rule 15 allows the amendment to relate back to the date of the original pleading and, thus, the motion to amend should be granted.

We first address the Union's argument that the 90-day statute of limitations should be strictly applied, even here. In support, the Union first cites to Sullivan v. Gilchrist.*fn8 In that case, the Seventh Circuit ruled that the expiration of the 90-day statute of limitations barred a challenge that, like this case, called into question the very existence of a CBA.*fn9 The rule established was that the "failure to challenge an arbitration award within the applicable limitations period renders the award final."*fn10

The Union next cites International Operating Union of Engineers, Local 150 v. Rabine, where the Seventh Circuit reaffirmed its holding in Sullivan and held that the 90-day limit applies to even those parties that assert that they are not bound to the arbitration award because they did not sign the CBA.*fn11

But here, because the action was already filed, the only issue is whether an amendment is allowed after the 90-days have passed, not whether the motion itself is too late. In both Sullivan and Rabine, no party to the arbitration award filed a motion to vacate at all prior to the expiration of the 90-day period.*fn12 The Seventh Circuit's rule, therefore, is that when parties "sit on their collective hands," they waive "the right to challenge the outcome later."*fn13 This is not exactly what happened in this case. At least two of the parties against whom the arbitration award was issued timely filed a motion to vacate the arbitration award.

This brings us to the district court cases that the Union cites. These cases involve parties that have filed a motion within 90 days, but then seek to amend their complaints to add, for the first time, a claim to vacate an arbitration award outside of the 90 days.*fn14 For this analysis courts apply the 90-day statute of limitations and address how it works with Rule 15's relation back provision. Specifically, Rule 15(c)(2) and (3), provide that an amended complaint "chang[ing] the party or the naming of the party against whom the claim is asserted" relates back to the date of the original pleading "when the claim or defense asserted in the amended pleading arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleading."*fn15 The

Advisory Committee Notes to Rule 15 explain that these provisions governing the addition of defendants by amendment "extends by analogy to amendments changing plaintiffs."*fn16 The rule is designed to allow parties to add new claims only if there is no unfair surprise or prejudice. Rule 15(c), for example, does not allow a new party ...


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