No. 13767 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1977 

AUDIT SERVICES, INC., a Montana 

Corporation, 

Plaintiff and Appellant, 

BRASEL & SIMS CONSTRUCTION COMPANY, 

Defendant and Respondent. 

Appeal from: District Court of the Eiahth Judicial District, 

Honorable Joel G. Roth, District Judge presiding. 

Counsel of Record: 

For Appellant: 

Cure and Borer, Great Falls, M.ontana 

Maxon R. Davis argued, Great Falls, Montana 

For Respondent: 

Smith, Emmons, Baillie and Walsh, Great Falls, 

Montana 

Robert J. Emmons argued, Great Falls, Montana 

Vidakovich, Pappas and Hooper, Lander, Wyoming 

Submitted: December 6, 1977 
Mr. Justice Gene B. Daly delivered the Opinion of the Court: 

Audit Services, Inc., appeals from the order for summary 

judgment and final judgment entered in favor of Brasel & Sims 

Construction Company by the District Court, Cascade County. 

Audit Services, Inc., (Audit Services) is a nonprofit 

Montana corporation created to assist various union trust funds 

in the collection of employer fringe benefit contributions. These 

trust funds were created pursuant to the Labor Management Relations Act, 29 U.S.C. §186(c)(5) and the Employee Retirement 

Income Security Act of 1974, 29 U.S.C. QlOOl et seq. Audit 

Services is suing in its capacity as assignee of eight Montana 

employee benefit trust funds. These trust funds provide health 

and welfare, pension, apprenticeship and vacation benefits to 

Montana laborers, operating engineers and teamsters. The trusts 

are funded ,by employer contributions based on hours worked by 

union and nonunion employees within the particular crafts. 

Employer contribution rates for each of the trust funds are determined by collective bargaining agreements negotiated between 

the unions and individual employers or between the unions and 

associations of employers. 

Brasel & Sims Construction Company (Brasel & Sims) is a 

Wyoming construction firm. During the period May 1972 through 

August 1974, Brasel 6 Sims was performing under a road construction contract with the state of Montana, on a project located 

in southeastern Montana, on the Northern Cheyenne Indian Keservation. At the time Brasel & Sims commenced doing business in 

Montana it ratified the existing collective bargaining agreements 

with the Montana Laborers, Operating Engineers, and Teamster 
Unions, negotiated in 1971 and effective from May 1, 1971 

through April 30, 1974. 

On May 8, 1972, Brasel & Sims executed an instrument 

assigning its bargaining rights to the Montana contractors' 

, Association for the purpose of negotiating and executing future 

collective bargaining labor agreements with the Montana Laborers, 

Operating Engineers, and Teamsters Unions. The instrument of 

assignment specifically provided: 

" * * * This authority * * * shall continue from 

year to year unless notice of cancellation of this 

authority is given to the Montana Contractors' 

Association at least sixty (60) days prior to the 

expiration dates of each of the existing aforesaid 

labor agreements. Cancellation of this authority 

shall not relieve any contractor of the legal responsibilities it may have accrued by virtue of the 

execution of any labor agreements on its behalf by 

this Association. Contractor further understands 

that it can be released from the multi-employer 

bargaining unit of which it constitutes a part, and 

thereafter negotiate and execute individual labor 

agreements only with the consent of the labor unions 

involved. " 

The present controversy arose when Audit Services filed 

a complaint in the District Court, Cascade County, on April 11, 

1974, alleging Brasel & Sims had failed to pay employer contributions due under certain collective bargaining agreements. 

Brasel & Sims filed an answer denying liability. Plaintiff 

filed an amended complaint on September 26, 1974, incorporating 

those claims previously asserted, and prayed for judgment and 

an award of trust fund contributions in the sum of $14,175.64 

plus interest; liquidated damages in the sum of $580.78 plus 

interest; interest in the sum of $18.25; audit fees in the sum 

of $799.12 plus interest; reasonable attorney fees in the sum 

of $4,000; and costs of suit. Brasel & Sims filed an answer to 
the amended complaint renewing its denial of liability. The 

parties commenced discovery and pretrial briefs were filed. 

On November 10, 1976, Brasel & Sims filed a motion for 

summary judgment. A stipulation of facts for defendant's motion 

for summary judgment was executed by the parties. On December 

30, 1976, the District Court issued an order for summary 

judgment and final judgment, granting defendant's motion for 

summary judgment and dismissing plaintiff's complaint with 

prejudice. On January 7, 1977, Audit Services filed a motion 

to alter judgment on the grounds: (1) The District Court's 

order granting defendant's motion for summary judgment was based 

on an affidavit which was never filed with the District Court; 

(2) newly discovered evidence; and, (3) insufficiency of the 

evidence. A different judge assumed jurisdiction of the matter 

for the purpose of hearing and ruling on Audit Services' motion 

to alter judgment. On January 24, 1977, the court issued its 

order granting Audit Services' motion to alter judgment-. 

" * * * to the extent that the reference in the order 

granting summary judgment referring to the affidavit * * * is stricken on the grounds that at the time the 

order was made granting summary judgment, that the 

affidavit was not on file at that time." 

Except for the exclusion of the unfiled affidavit, which the 

court concluded was not the basis for granting the summary 

judgment, Audit Services' motion to alter the judgment was 

denied. 

\ The principal issue on appeal is whether the District 

Court erred when it granted Brasel & Sims' motion for summary 

judgment. Rule 56(c), M.R.Civ.P., provides: 

" (c) * * * The judgment sought shall be rendered 

forthwith if the pleadings, depositions, answers 

to interrogatories, and admissions on file, together 
with the affidavits, if any, show that there is 

no genuine issue as to any material fact and that 

the moving party is entitled to.a judgment as a 

matter of law * * *." 

For an extensive discussion of the principles of summary judgment 

under Rule 56(c), M.R.Civ.P., see Harland v. Anderson, (1976), 169 

Mont. 447, 548 P.2d 613. 

Audit Services challenges the District Court's order granting 

Brasel & Sims' motion for summary judgment and final judgment 

on these grounds: (1) That genuine issues of fact remain to be 

determined; (2) that matters accepted as undisputed fact remain 

merely allegations of the defendant; (3) that no basis has been 

put forth why the complaint should have been dismissed in its 

entirety; and (4.) that the District Court misconstrued the law. 

Brasel & Sims, on the other hand,.contends summary judgment 

was properly granted in its favor, since there were no genuine < 

issues of material fact and ft was entitled to a judgment as a 

matter of law. Brasel & Sims argues: (1) Its notices to the 

unions effectively communicated Brasel & ~ims' intent to withdraw from collective bargaining; (2) at the time Brasel & Sims 

gave notice of its intent to withdraw llunusual circumstances" 

existed which permitted unilateral withdrawal; and (3) the 

unions consented to Brasel & Sims' unilateral withdrawal. 

All parties agree federal labor law is controlling since 

a dispute involving a collective bargaining agreement falls within 

the purview of Section 301 of the Taft-Hartley Act, 29 U.S.C. 5185. 

While the Taft-Hartley Act provides for concurrent jurisdiction in 

state courts, in Dowd Box Co. v. Courtney, (1962), 368 U.S. 502, 

82 Sect. 519, 7 L ed 2d 483, the United States Supreme Court held 

that state courts must apply federal law in the exercise of that 

jurisdiction. Teamsters Union v. Lucas Flour Co., (1962), 369 
U.S. 95, 82 S.Ct. 571, 7 L ed 2d 593. See Lowe v. O'Conner, 

(1973), 163 Mont. 100, 515 P.2d 677. 

At the outset, we hold the District Court's order granting 

summary judgment and final judgment must be vacated as to those 

contributions sought for the period November 1, 1972 through 

April 30, 1974, involving approximately 409 112 working hours. 

During this period of time, Brasel & Sims was bound by the 1971- 

1974 collective bargaining agreement, effective from May 1, 1971 

through April 30, 1974. Before this Court, in its written briefs 

and oral argument, counsel for Brasel & Sims admitted liability 

for these contributions. 

The remainder of the monetary relief sought by Audit 

Services is for contributions involving approximately 15,010 

working hours performed after April 30, 1974, when the 1974-1977 

collective bargaining agreement was in effect. Sixty days prior 

to the expiration of the 1971-1974 collective bargaining agreement the unions gave timely notice of their intent to renegotiate 

the 1971-1974 agreement. Good faith bargaining between the unions 

and the Montana Contractors' Association commenced, but no new 

agreements were reached by May 1, 1974. At that time members 

of the operating engineers set up a picket line and picketed 

Brasel & Sims' work site. The laborers and teamsters refused to 

cross the picket line, leaving Brasel & Sims with only nonunion 

employees. 

On May 3, 1974 and May 6, 1974 Brasel & Sims dispatched 

notices of termination to the Montana Operating Engineers, 

Laborers,and Teamster Unions. Although each of the memorandums 

is drafted in a different form, they individually reiterate 

the phrase "As of this date we are terminating our agreement with * * *" 
the respective unions. Two of the notices contain the phrase 

"Therefore, since the present contract expired on May 1, 1974, 

we are exercising our right to terminate at this time." The 

third notice contains the phrase "We, therefore are terminating 

our agreement as of this time." Neither a written notice similar 

to the type Brasel & Sims dispatched to the unions nor any oral 

communication evidencing an intent to withdraw from collective 

bargaining was given to the Montana Contractors ' Association. 

Meanwhile, the Montana Contractors' Association and 

the unions continued negotiations. New collective bargaining 

agreements were negotiated by the various unions and the 

Montana Contractors' Association on June 11, 1974. In its 

final executed form, the 1974-1977 collective bargaining agreement related back to May 1, 1974, the termination date of 

the 1971-1974 collective bargaining agreement. In the meantime, Brasel & Sims had hired nonunion employees to complete 

its road construction project. It is the employer contributions for the period May 1, 1974 through completion of Brasel 

& Sims' road construction project which Audit Services seeks, 

involving approximately 15,010 hours. 

The United States Court of Appeals, in N.L.R.B. v. Beck 

Engraving Co., Inc.(3rd Cir. 1975), 522 F.2d 475, summarized 

federal law controlling an employer's attempted withdrawal from 

a multi-employer bargaining unit, as announced in Retail 

Associates, Inc., (1958), 120 NLRB No. 66, pp. 388-400: 

'"Trimmed to its essentials, the Retail Associates 

rule may be briefly stated: prior to negotiations, 

either the union or an employer in a multi-employer 

bargaining unit may unilaterally (i.e., without the 

consent of the other party) withdraw if adequate written 

notice is given which evidences an unambiguous intent 

to withdraw; during negotiations, withdrawal is permissible upon mutual consent or may occur unilaterally in 
the event of unusual circumstances. The Courts of 

Appeals of several circuits have adopted and approved 

this formula. '" 522 F. 2d 481, 

Brasel & Sims contends its withdrawal from Montana Contractors' Association during collective bargaining negotiations was effective under the "unusual circumstances" test 

discussed in N.L.R.B. v. Beck Engraving Co., Inc,, supra, 

However, such a conclusion must be premised on a finding that 

Brasel & Sims sufficiently communicated to the unions and to 

the multi-employer bargaining unit an intent to withdraw. 

Otherwise, an employer might choose to remain silent until 

new bargaining agreements are negotiated, evaluate the economic 

benefit or detriment associated with declaring withdrawal, and 

then contend unusual circumstances as a basis for releasing 

the employer from contributions based upon man hours worked 

after termination of the prior collective bargaining agreement. 

In the present fact situation, we fail to find Brasel & 

Sims communicated to either the unions or to the Montana Contractors' Association an unambiguous or unequivocal notice of 

intent to withdraw from the multi-employer bargaining unit. 

See N.L.R.B. v. Hi-Way Billboards, Inc., (6th Cir. 1973), 473 F.2d 

649; N.L.R.B. v. John J. Corbett Press, Inc, (2nd Cir. 1968), 

401 F.2d 673,675. The notices dispatched by Brasel and Sims 

were only sent to the unions, not to Montana Contractors' 

Association, Further, the notices only evidenced an intent 

to terminate agreements with the unions, i.e. the 1971-1974 

collective bargaining agreements which expired on May 1, 1974. 

In no specific terms do the notices dispatched by Brasel & Sims 

communicate an intent to withdraw from the multi-employer bargaining unit. Nor is the unions' failure to respond to or protest 
such notices equivalent to acquiescence or consent to a 

purported withdrawal from the multi-employer bargaining unit. 

Such a finding of insufficient notice of withdrawal defeats 

Brasel & Sims' argument avoiding liability for employer contributions under the 1974-1977 collective bargaining agreements. 

The District Court erred when it granted judgment for Brasel 

& Sims as a matter of law. 

The order of the District Court granting Brasel & Sims' 

motion for summary judgment and final judgment is reversed and 

the cause remanded to the District Court for further proceedings 

consistent with this Opinion. 

~us tice i 

We Concur: