FOR PUBLICATION
ATTORNEY FOR APPELLANTS: ATTORNEYS FOR APPELLEE:
WILLIAM R. GROTH D. LUCETTA POPE
Fillenwarth Dennerline Groth & Towe, LLP JENNIFER BICKLEY HULL
Indianapolis, Indiana AMY M. STEKETEE
Faegre Baker Daniels LLP
South Bend, Indiana
FILED
Jan 22 2013, 9:13 am
IN THE
CLERK
COURT OF APPEALS OF INDIANA of the supreme court,
court of appeals and
tax court
LULA L. JENKINS, et al., )
)
Appellants-Plaintiffs, )
)
vs. ) No. 71A03-1206-PL-260
)
SOUTH BEND COMMUNITY SCHOOL )
CORPORATION, )
Appellee-Defendant. )
APPEAL FROM THE ST. JOSEPH CIRCUIT COURT
The Honorable Michael G. Gotsch, Judge
Cause No. 71C01-1008-PL-163
January 22, 2013
OPINION - FOR PUBLICATION
KIRSCH, Judge
Lula L. Jenkins (“Jenkins”), American Federation of State, County and Municipal
Employees Council 62, and AFL-CIO Local 686 (collectively “the Union”) appeal from the
trial court’s order entering summary judgment in favor of South Bend Community School
Corporation (“SBCSC”) in Jenkins and the Union’s action seeking an independent
determination of whether Jenkins was discharged for just cause from her position with
SBCSC. On appeal, we are asked to decide if the trial court erred by granting summary
judgment in favor of SBCSC instead of making an independent determination of whether
Jenkins was discharged for just cause.
We reverse and remand.
FACTS AND PROCEDURAL HISTORY
On September 9, 2008, SBCSC discharged Jenkins from her employment as a school
bus driver for SBCSC after it was determined that she allowed a child to ride her school bus
past the child’s destination and into SBCSC’s maintenance facility. SBCSC cited the
violation of two work rules when discharging Jenkins: rule number 10 (insubordination or
refusal to carry out orders) and rule number 13 (failure to meet reasonable work standards).
Appellants’ App. at 21.
SBCSC is a public school corporation which employs school bus drivers such as
Jenkins, operates a vehicle maintenance facility, and among other things, provides
transportation of students to and from school. SBCSC voluntarily recognized and negotiated
a collective bargaining agreement (“CBA”) with the Union, which represented SBCSC
employee bus drivers including Jenkins. The CBA provides that SBCSC shall discipline or
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discharge employees only for just cause, and the items setting forth what can constitute just
cause, including those in the rules mentioned above, are enumerated in a non-exhaustive list.
Id. at 20-21. Article 4 of the CBA sets forth the four-step grievance procedure and defines a
grievance as “any controversy arising out of or over the interpretation, application, or claim
of alleged violations of the provisions” of the CBA. Id. at 15. Article 4 further provides that
“[t]he grievance and arbitration provisions of this article are an exclusive remedy. With
respect to every arbitration, the decision of the arbitrator shall be advisory to the
Superintendent and not binding on either party.” Id. at 16-17.
Following Jenkins’s termination by SBCSC, Jenkins and the Union filed a grievance
protesting her discharge. In particular, they argued that her termination was not for just cause
under the CBA. The grievance proceeded through the arbitration process. On June 11, 2009,
the neutral arbitrator held a hearing on the grievance and after that hearing and briefing by
the parties determined that just cause did not exist to support Jenkins’s discharge. The
arbitrator issued an order that SBCSC reinstate Jenkins with full back pay, benefits, and
seniority. SBCSC refused to comply with the arbitrator’s order to reinstate Jenkins’s
employment, relying instead on the provision of the CBA that the arbitrator’s order was
merely advisory to the SBCSC Superintendent. When SBCSC refused to reinstate her
employment, Jenkins and the Union filed a complaint seeking a de novo judicial review of
whether SBCSC violated the CBA by terminating her employment without just cause.
The trial court denied SBCSC’s motion to dismiss the complaint for lack of subject
matter jurisdiction. However, on May 10, 2012, the trial court granted SBCSC’s motion for
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summary judgment without conducting a de novo review of whether SBCSC violated the
CBA by terminating Jenkins’s employment without just cause. Instead, the trial court
concluded that the SBCSC Superintendent was not contractually compelled to follow the
advisory opinion of the arbitrator, and that SBCSC was within its contractual rights in
terminating Jenkins’s employment. Jenkins and the Union now appeal from this order
granting summary judgment in favor of SBCSC.
DISCUSSION AND DECISION
According to the directives of Rule 56(C) of the Indiana Rules of Trial Procedure,
summary judgment is appropriate when there are no genuine issues of material fact and the
moving party is entitled to judgment as a matter of law. On review of a trial court’s grant or
denial of summary judgment, this court applies the same standard as the trial court. Best
Homes, Inc. v. Rainwater, 714 N.E.2d 702, 705 (Ind. Ct. App. 1999). We must make the
determination whether there is a genuine issue of material fact requiring trial, and whether
the moving party is entitled to judgment as a matter of law. Id. Just as the trial court could
not look beyond the evidence specifically designated to the trial court, our review is likewise
so limited. Id.; see also Ind. Trial Rule 56(C), (H).
The party seeking summary judgment bears the burden of making a prima facie
showing that there are no genuine issues of material fact and that it is entitled to judgment as
a matter of law. Am. Mgmt., Inc. v. MIF Realty L.P., 666 N.E.2d 424, 428 (Ind. Ct. App.
1996). Once the movant satisfies this burden through evidence designated to the trial court
pursuant to Trial Rule 56, the non-movant may not rest on its pleadings, but must designate
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specific facts demonstrating the existence of a genuine issue for trial. Id. The court must
accept as true those facts alleged by the non-moving party, construe the evidence in favor of
the non-movant, and resolve all doubts against the moving party. Shambaugh & Son, Inc. v.
Carlisle, 763 N.E.2d 459, 461 (Ind. 2002).
On appeal, we will assess the trial court’s decision to ensure that the parties were not
improperly denied their day in court. Id. A genuine issue of material fact exists where facts
concerning an issue that would dispose of the litigation are in dispute or where the
undisputed material facts are capable of supporting conflicting inferences on such an issue.
U-Haul Int’l, Inc. v. Nulls Mach. and Mfg. Shop, 736 N.E.2d 271, 274 (Ind. Ct. App. 2000).
We have addressed the application of Indiana’s Uniform Arbitration Act (“the UAA”)
and have stated the following about the UAA:
Indiana’s Uniform Arbitration Act provides a mechanism for enforcing
agreements to arbitrate and for securing judicial review and enforcement of
arbitration awards. The purpose of arbitration is to afford parties the
opportunity to reach a final disposition of differences in an easier, more
expeditious manner than by litigation. To facilitate this purpose, judicial
review of arbitration awards is very narrow in scope. We set aside an award
only when one of the grounds specified by the Uniform Arbitration Act for
vacation of an award is demonstrated. A party who seeks to vacate an
arbitration award under the Act bears the burden of proving the grounds to set
the award aside. . . . The Uniform Arbitration Act does not declare which
issues are subject to arbitration. Rather, arbitration arises through contract,
and the parties are essentially free to define for themselves what questions may
be arbitrated, remedies the arbitrator may afford, and the extent to which a
decision must conform to the general principles of law. Thus, an arbitrator is
limited by the bounds of the agreement from which he draws his authority and
an arbitrator is expected to be aware of those limits.
Bopp v. Brames, 677 N.E.2d 629, 631-32 (Ind. Ct. Ap. 1997) (internal citations omitted). In
this appeal, however, we are not confronted with a challenge to the actions of the arbitrator,
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but rather the actions of one of the parties, SBCSC, in declining to follow the arbitrator’s
award in reliance upon one of the provisions of the CBA. We are also asked to determine
whether the trial court’s decision not to conduct an independent review of whether just cause
existed under the CBA to terminate Jenkins’s employment was erroneous.
“No obligation to arbitrate a labor dispute arises solely by operation of law. The law
compels a party to submit his grievance to arbitration only if he has contracted to do so.”
Litton Fin. Printing v. NLRB, 501 U.S. 190, 200 (1991) (quoting Gateway Coal Co. v. Mine
Workers, 414 U.S. 368, 374 (1974)); see also St. John Sanitary Dist. v. Schererville, 621
N.E.2d 1160, 1161 (Ind. Ct. App. 1993). Generally, contractual obligations under a
collective bargaining agreement cease upon termination of the agreement. Litton, 501 U.S. at
207. However, parties are free to agree that the terms of an expired agreement, including
arbitration provisions, will remain in effect during the hiatus period between the effective
dates of the old and the new collective bargaining agreement. United Paperworkers Int’l v.
Wells Badger Indus., 835 F.2d 701, 704 (7th Cir. 1987); Post Tribune Publ’g, Inc. v. Am.
Arbitration Assoc., 767 F. Supp. 935, 947 (N.D. Ind. 1991). The parties must have
manifested an intent to be bound by the arbitration provision during the hiatus period. Int’l
Bhd. of Teamsters v. Pepsi-Cola, 958 F.2d 1331, 1334-35 (6th Cir. 1992); Cumberland
Typographical Union 244 v. The Times, 943 F.2d 401, 405 (4th Cir. 1991). Although the
CBA was scheduled to expire at the end of 2006, SBCSC and the Union agreed to extend the
CBA on an annual basis, and neither party disputes that it was in effect at the time of the
2008 incident leading to Jenkins’s discharge.
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In general the construction of a written contract is a question of law for the court,
making summary judgment particularly appropriate in contract disputes. City of
Lawrenceburg v. Milestone Contractors, L.P., 809 N.E.2d 879, 883 (Ind. Ct. App. 2004),
trans. denied. Because the interpretation of a contract presents a question of law it is
reviewed de novo by this court. Bailey v. Mann, 895 N.E.2d 1215, 1217 (Ind. 2008). When a
trial court has entered summary judgment in a contract dispute, implicitly it has determined
either that: 1) the contract is not ambiguous or uncertain as a matter of law and the trial court
need only apply the terms of the contract; or 2) the contract is ambiguous, but the ambiguity
may be resolved without the aid of factual determinations. Bicknell Minerals, Inc. v. Tilly,
570 N.E.2d 1307, 1310-11 (Ind. Ct. App. 1991) (citations omitted).
Here, Jenkins and the Union received a favorable ruling from the arbitrator who, after
hearing the disputed evidence, determined that just cause did not exist for Jenkins’s
termination from her employment. We have held that “[o]nce a factual question is
determined in arbitration, it is finally adjudicated and cannot be relitigated.” Bopp, 677
N.E.2d at 634. The UAA sets forth the grounds upon which an award in arbitration may be
vacated. Ind. Code § 34-57-2-13. SBCSC chose not to challenge the award on any of those
grounds. The dispute here involves two seemingly conflicting provisions of the CBA.
On the one hand, Article 4 of the CBA sets forth the four-step grievance procedure
and defines a grievance as “any controversy arising out of or over the interpretation,
application, or claim of alleged violations of the provisions” of the CBA. Appellants’ App. at
15. Article 4 further provides that “[t]he grievance and arbitration provisions of this article
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are an exclusive remedy. With respect to every arbitration, the decision of the arbitrator shall
be advisory to the Superintendent and not binding on either party.” Id. at 16-17. The conflict
between the terms is apparent in a case such as this where one party receives a favorable
award, and the other party chooses to exercise the non-binding nature of the award.
Furthermore, when Jenkins sought a de novo judicial review of whether just cause existed,
SBCSC relied upon the CBA’s “exclusive remedy” language.
Under the argument advanced by SBCSC and applied by the trial court, if non-binding
arbitration is the exclusive remedy, a prevailing aggrieved party after receiving a favorable
award would have no remedy, and the “exclusive remedy” in the CBA would be no remedy
at all. Such a conclusion is contrary to the Indiana Constitution. Article 1, section 12 of the
Indiana Constitution provides as follows:
All courts shall be open; and every person, for injury done to him in his person,
property, or reputation, shall have remedy by due course of law. Justice shall
be administered freely, and without purchase; completely, and without denial;
speedily, and without delay.
Moreover, the CBA provides in Article 11:
In the event any federal or state law, government regulation or court decision
conflicts with any provision of this Agreement, the provision or provisions so
affected shall no longer be operative or binding on the parties, but the
remaining portion of the Agreement shall continue in full force and effect.
Id. at 25.
A long-standing principle of contract interpretation is that a court on review must
accept an interpretation of a contract that harmonizes all the various parts, so that no
provision conflicts with, is repugnant to, or neutralizes any other contractual provision. Ryan
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v. Lawyers Title Ins. Corp., 959 N.E.2d 870, 875 (Ind. Ct. App. 2011). We must reconcile
seemingly conflicting provisions to give effect to all contractual provisions. Id.
In this case, we conclude that the “exclusive remedy” provision of the CBA at issue
here was intended to function only as an exhaustion-of-administrative-remedies provision
and not as a bar to Jenkins’s exercise of her right to free and open courts and their remedies.
Thus, under this CBA Jenkins must proceed through the grievance procedure prior to
resorting to judicial review of her claims. The advisory nature of the arbitrator’s award
allows the non-prevailing party, here SBCSC, to reject the award, thus triggering judicial
review, either under the UAA’s provisions or for a determination whether the facts found by
the arbitrator support the award. Consequently, we find that the trial court erred by declining
to make that determination and by entering summary judgment in favor of SBCSC.
Therefore, we reverse the trial court’s entry of summary judgment and remand this matter to
the trial court for a determination of whether the facts found by the arbitrator constitute just
cause under the CBA.
Reversed and remanded.
NAJAM, J., and MAY, J., concur.
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