Case Name: DENVER ASSOCIATION OF EDUCATIONAL OFFICE PERSONNEL, Plaintiff-Appellant and Cross-Appellee, v. SCHOOL DISTRICT NO. 1 IN the CITY AND COUNTY OF DENVER, State of Colorado; and the Board of Education of School District No. 1, Defendant-Appellee and Cross Appellant
Court: Colorado Court of Appeals
Jurisdiction: Colorado
Decision Date: 1998-05-14
Citations: 972 P.2d 1047
Docket Number: No. 96CA1491
Parties: DENVER ASSOCIATION OF EDUCATIONAL OFFICE PERSONNEL, Plaintiff-Appellant and Cross-Appellee, v. SCHOOL DISTRICT NO. 1 IN the CITY AND COUNTY OF DENVER, State of Colorado; and the Board of Education of School District No. 1, Defendant-Appellee and Cross Appellant.
Judges: TAUBMAN, J., concurs.
Reporter: Pacific Reporter 2d
Volume: 972
Pages: 1047–1057

Head Matter:
DENVER ASSOCIATION OF EDUCATIONAL OFFICE PERSONNEL, Plaintiff-Appellant and Cross-Appellee, v. SCHOOL DISTRICT NO. 1 IN the CITY AND COUNTY OF DENVER, State of Colorado; and the Board of Education of School District No. 1, Defendant-Appellee and Cross Appellant.
No. 96CA1491.
Colorado Court of Appeals, Div. II.
May 14, 1998.
Rehearing Denied June 11, 1998.
Certiorari Granted March 8, 1999.
William J. Maikovich, Aurora, Colorado; Martha R. Houser, Gregory J. Lawler, Shar-yn E. Dreyer, Cathy L. Cooper, Bradley C. Bartels, Colorado Education Association, Denver, Colorado, for Plaintiff-Appellant and Cross-Appellee
Semple & Mooney, P.C., Martin Semple, Patrick B. Mooney, Denver, Colorado, for Defendant-Appellee and Cross-Appellant

Opinion:
Opinion by
Judge JONES.
In this action alleging breach of a collective bargaining agreement, plaintiff, Denver Association of Educational Office Personnel (DAEOP), appeals from a judgment finding that it was not entitled to damages. Defendants, School District No. 1 in the City and County of Denver and its governing body, the Board of Education of School District No. 1 (collectively the School District), cross-appeal from a summary judgment entered in favor of DAEOP as to the issue of breach of contract. We reverse the summary judgment and, thus, need not address plaintiffs appeal.
This dispute concerns DAEOP's contention that the School District violated the parties' multi-year collective bargaining agreement and reclassification plan when it unlawfully denied DAEOP members a wage increase in September 1993.
DAEOP is the exclusive bargaining representative of a unit of noncertified employees of the School District. It entered into a collective bargaining agreement with the School District effective January 1, 1991, through August 31, 1994. The agreement governed the wages, salaries, hours, and other terms and conditions of employment of DAEOP members.
Article 14 of the agreement contains provisions regarding salaries. This article provides that then existing salaries of DAEOP members would be increased by 3.5% each year. It also provides that, if the parties should agree on a reclassification plan, the provisions of the plan would be in lieu of the scheduled salary increases for successive periods commencing, respectively, September 1991, 1992, and 1993. Following the execution of the collective bargaining agreement, the parties agreed upon such a reclassification plan.
In April 1993, the School District attempted to reopen negotiations concerning salary and wage provisions scheduled to take effect September 1, 1993. In a letter to DAEOP, dated April 8,1993, the School District stated that it was requesting that the parties reopen negotiations because of an unexpected financial shortfall caused by the impact of Colo. Const, art. X, § 20 (TABOR Amendment), and the failure of the General Assembly fully to fund the School Finance Act for the 1993-1994 school year. The letter indicated that the need possibly to maintain "current salary levels by not implementing any salary increases for the 1993-1994 budget" was noted on April 1, 1993, in a meeting to review "the current status of the budget process" held by the district superintendent and the school board. While the record does not reflect that it challenged the underlying reasons for the School District's perceived need to reopen negotiations, DAEOP refused to negotiate pursuant to the request of the School District.
The School District subsequently adopted the previous year's salary schedules for the 1993-1994 school year instead of the schedule provided for in the reclassification agreement.
DAEOP filed suit, claiming that the School District had breached the collective bargaining agreement and school board policies by unlawfully refusing to pay the salary increases for the 1993-1994 school year.
The School District responded with a motion for summary judgment, arguing that its attempt to negotiate complied with the agreement and, therefore, that DAEOP had waived its right to relief by refusing to negotiate. DAEOP filed a cross-motion for partial summary judgment, arguing that the School District's request for negotiations was untimely and that, therefore, the School District's noncompliance with the salary provisions constituted a breach of contract.
The trial court granted DAEOP's motion and denied the School District's motion, finding that the School District had breached the collective bargaining agreement as a matter of law. A trial was held on the issue of damages, resulting, in part, in a finding that salaried employees were not entitled to damages. DAEOP subsequently filed a motion for a new trial, which the trial court denied.
On appeal, DAEOP asserts that the trial court erréd in finding that DAEOP salaried members were not entitled to damages, in denying a motion to compel its request for discovery, and in denying its motion for a new trial. On cross-appeal, the School District contends that the trial court erred in granting DAEOP's motion for summary judgment. We agree with the School District and, therefore, do not reach the merits of DAEOP's contentions.
The School District contends that the trial court erred in granting summary judgment in favor of DAEOP on the issue of breach of contract. It argues that the trial court erroneously found that the School District did not comply with the collective bargaining agreement provisions concerning the reopening of negotiations and thereby breached the agreement by not instituting the agreed upon salary increase. We agree with the School District.
Article 4 of the collective bargaining agreement, governing annual negotiations, provides:
Request for negotiations will be made by the Association to the Board, or by the Board to the Association, between March 1 and March 7 of each year during the term of this Agreement.
4.1.10 Tentative agreements reached as a result of such negotiations will be reduced to writing and will have conditional written approval of both parties pending final .adoption and approval of the School District budget. After such adoption and approval, the final Agreement will be signed by the Board and Association and will become an addendum to this Agreement. If changes in this tentative Agreement are necessary as a result of a legal budget adoption process, the Agreement will be subject to negotiation, (emphasis added)
The trial court relied on the introductory language of this article to conclude that the School District was required to request negotiations between March 1 and March 7, and that, by failing to make a timely request, it waived its rights to bargain over wages.
The School District maintains that the provision in the agreement for a March 1 to March 7 negotiation period does not comply with § 22-32-110(5), C.R.S.1997, which requires that provisions for reopening negotiations as to compensation be included in all multi-year collective bargaining agreements, and that, consequently, under certain circumstances, this language in the agreement cannot restrict the School District's ability to initiate negotiations regarding salaries past the March 7 deadline. Instead, the School District relies on the last sentence of § 4.1.10 as authorization to initiate negotiations after March 7 based on necessary changes in the budget. Again, we agree with the School District.
A Standard of Review
Summary judgment is a drastic remedy and will be granted only when the record clearly establishes the absence of any genuine issue of material fact. Dominguez Reservoir Corp. v. Feil, 854 P.2d 791 (Colo.1993). See C.R.C.P. 56. The parties contend, and we agree, that there are no genuine issues as to any material facts with respect to the issues before us and, thus, that this dispute may be determined by resolution of the parties' duties under the collective bargaining agreement.
The construction of an unambiguous contract is a question of law for the court. Fibreglas Fabricators, Inc. v. Kylberg, 799 P.2d 371 (Colo.1990). In order to determine whether the trial court properly interpreted the collective bargaining agreement, we look primarily to the language of the agreement to determine and give effect to the intentions of the parties. See USI Properties East, Inc. v. Simpson, 938 P.2d 168 (Colo.1997).
Written contracts that are complete and free from ambiguity will be found to express the intention of the parties and will be enforced according to their plain language. Extraneous evidence is admissible to prove that intent only when there is ambiguity in the terms of the contract. Moreover, ambiguity is not created merely because the parties disagree on the interpretation of the contract. USI Properties, Inc. v. Simpson, supra.
B. Construction of the Collective Bargaining Agreement
Agreements reached between teachers' associations and school districts are intertwined with the public policy regarding public school spending, as codified in § 22-1-101, et seq., C.R.S.1997, because such agreements must yield to that legislatively established policy. See Littleton Education Ass'n v. Arapahoe County School District No. 6, 191 Colo. 411, 553 P.2d 793 (1976). Therefore, we must construe the collective bargaining agreement here in harmony with the codified public policy.
The guiding policy behind the statutes regarding school district funding is that of the prevention of deficit spending. Section 22-44-115(1), C.R.S.1997. Accordingly, the statute mandates that no school district may commit funds by contract which are in excess of an annual appropriation. See § 22-44-115(3), C.R.S.1997. In addition, school districts are required to adopt salary schedules and budgets on an annual basis. See § 22-63-401, C.R.S.1997.
The General Assembly has ensured that school districts comply with the requirements of § 22-44-115(3) and § 22-63-401 by requiring them to include a provision mandating annual negotiations in any contract concerning wages and salaries that exceeds one year in duration. This requirement, which is at the heart of the present dispute, is set forth at § 22-32-110(5), C.R.S.1997, and provides:
No board of education shall enter into an agreement with any group, association, or organization representing employees of the district which commits revenues raised or received pursuant to Article 53 of this title for a period of time in excess of one year unless such agreement includes a provision which allows for the reopening of the portion of the agreement relating to salaries and benefits.
This statute was recently interpreted by a division of this court in Denver Classroom Teachers Ass'n v. School District No. 1, 911 P.2d 690 (Colo.App.1995)(DCTA). Though written after the court here had acted, nevertheless, the opinion's interpretation of the statute is instructive in this case.
The dispute in the DCTA case arose from a factual situation that, in some respects, is similar to the one here. The teachers association filed suit against the school district and board of education, alleging breach of a collective bargaining agreement caused by the school district's failure to adopt a wage increase. As here, the school district attempted to renegotiate the salary provisions but the teachérs association refused.
There, the court granted the school district's cross-motion for summary judgment on the ground that language in the contract complying with § 22-32-110(5) permitted the school district to initiate negotiations concerning salaries and benefits. As to the requirements of § 22-32-110(5), the court stated:
These provisions of state law [§ 22-63-401 and § 22-44-115(3)] made it incumbent upon the parties to allow for annual reopening of salary and benefit provisions that could result from changes in the funds available to, or the needs of, the District.
DCTA supra, 911 P.2d at 695 (emphasis added).
The holding in DCTA suggests that in order to further the legislative intent behind § 22-32-110(5), contractual provisions allowing for annual negotiations must do more than simply provide for the reopening of negotiations during some agreed upon period each year. Rather, as specifically indicated in DCTA the negotiation provision must have the flexibility to allow for adjustments in the agreement based on "changes in the funds available to, or needs of, the district." These "changes" are those produced by the budget adoption process at the state and local level, which process is, generally, outside of the control of either party to these kinds of collective bargaining agreements.
Furthermore, a restriction on the requirements necessary to satisfy § 22-32-110(5) is inconsistent with the legislative intent of the statutory scheme regarding school financing, to wit: to ensure that the state and the individual school districts maintain fiscal integrity and that they, in effect, not write a check in one year that they cannot cash iñ a future year. Consequently, contractual negotiation provisions which do not provide the flexibility envisioned by the General Assembly, with respect to compensation and benefits, fail to promote the object of the law and, therefore, do not satisfy § 22-32-110(5). See In Interest of R.C., 775 P.2d 27 (Colo.1989).
Here, the trial court found that the above-quoted language of Article 4 of the collective bargaining agreement, specifying the March 1 to March 7 period for requesting negotiations, complied with § 22-32-110(5).
However, the record reflects that the allotted negotiation period of March 1 to March 7 does not take into consideration that the annual budget of the school district typically is adopted after March 7, and indeed, after the General Assembly appropriates funding for the public schools. Hence, because this provision requires the school district to initiate negotiations regarding salaries and benefits before being apprised of any changes in its available funds, it cannot comply with the requirements of § 22-32-110(5).
We find, however, that the above-quoted language specifying that the agreement will be subject to negotiation as to compensation and benefits if changes are the result of a "legal budget adoption process" is consistent with the School Finance Act.
By its plain meaning, this language contemplates negotiations which necessarily result from changes in the budget. Furthermore, this language is identical to the contractual provision which the DCTA court found to be in compliance with § 22-32-110(5). Accordingly, we conclude that this provision permits either party to initiate negotiation of salaries and benefits when budget changes so require.
In addition, this provision permits the parties to initiate negotiations as to salaries and benefits in the narrow circumstance of budget changes. Therefore, it may be construed harmoniously with the introductory language in Article 4, which we interpret as a restriction on negotiations involving issues other than salary and benefits. See Pepcol Manufacturing Co. v. Denver Union Corp., 687 P.2d 1310 (Colo.1984).
The record here indicates that the School District sought to reopen the agreement as to salaries after weighing the impact of the TABOR amendment, and after budget realities revealed that anticipated financial support would not be forthcoming, both of which factors made it extremely difficult for the School District to comply with the wage increase as contemplated by the agreement. Because we find that the School District's initiation of these negotiations was permissible pursuant to the language in Article 4.1.10 read in pari materia with relevant statutes, we conclude that, in refusing the School District's reasonable request to reopen negotiations, DAEOP waived its right to negotiate and that it must abide by the School District's determination of salaries for the 1993-94 school year.
In summary, based on the relevant statutes respecting School District budgeting and matters of salaries, wages, and benefits, we conclude that any provision of a multi-year collective bargaining agreement is void as against public policy and, therefore, unenforceable, if it limits any party to such agreement from requesting in good faith to reopen negotiations concerning issues of compensation and benefits within a reasonable period after that party becomes aware of the need therefor as a consequence of the legal budget adoption process at either the state or local level. The limitations set forth in such provisions, however, remain enforceable as to issues subject to negotiation other than compensation and benefits.
DAEOP's contentions are rendered moot by our reversal of the trial court's denial of the school district's motion for summary judgment and, therefore, we do not consider them.
The judgment is reversed, and the cause is remandéd for entry of summary judgment in favor of the school district and against DAEOP, and for further proceedings consistent with this opinion.
TAUBMAN, J., concurs.
CRISWELL, J., dissents.