Opinion ID: 480737
Heading Depth: 2
Heading Rank: 1

Heading: The Lawsuit and the Statute-of-Limitations Rulings

Text: 8 After several years of trying to obtain his pension through administrative channels, Baskin commenced the present suit in 1980. The initial complaint named the Trustees of the Pension Fund and others not involved in these appeals; Local 449 and Stright were added as defendants in 1981. Baskin alleged that Stright had breached its collective bargaining agreement when, after it became a union employer in 1967, it failed to make required contributions to the Pension Fund. He claimed that the Union had breached its fiduciary duties and its duty of fair representation by sending him to Stright as a nonunion employer for a period of time, 1958 to 1967, which rendered him ineligible for a pension. 9 Throughout the proceedings, Local 449 and Stright maintained that Stright had not been bound to a collective bargaining agreement prior to 1968. In his deposition in April 1982, DeLuca testified in part as follows: 10 Q How would you find out whether the contractor is union or nonunion? 11 A If any contributions are being paid into the funds. 12 Q Would that be welfare funds and pension funds? 13 A Welfare funds, whatever funds--. 14 Consistent with their position that Stright was not party to a contract with Local 449 prior to 1968, Local 449, in sworn answers to interrogatories, stated that Stright had not made any contributions to the Union's Welfare Fund prior to 1968. The Union also stated that its records as to any pre-1968 contributions had been destroyed. 15 In July 1982, Baskin's attorneys discovered documents in the files of the Fund indicating that in fact Stright had made contributions on Baskin's behalf to Local 449's Welfare Fund annually from 1958 to 1970. On the strength of this discovery Baskin promptly moved for and eventually received permission to file another amended complaint (the Eighth Amended Complaint). To the extent pertinent to the present appeals, this complaint alleged that Stright had been a union employer covered by a collective bargaining agreement from 1958 to 1970; that Stright had breached its obligation to make pension contributions on Baskin's behalf from 1963, when the Pension Fund for Local 449 members was formed, until 1970, when Baskin retired; and that Local 449 had breached its duty of fair representation by failing to compel Stright to make such contributions. Baskin also alleged that until 1982 Local 449 and Stright had fraudulently concealed from him Stright's payments to the Welfare Fund. Baskin sought, inter alia, an award of his past and future pension benefits in an amount based on his years of service from 1949 through 1970 and computed from the date of his initial pension application, plus $500,000 in damages against Local 449 to compensate him for the damages, including severe emotional suffering, distress, anxiety and grief inflicted upon him by the acts and omissions of Local 449, such acts and omissions having been intentional and without cause and without regard for the contractual and fiduciary obligations owed to Baskin. 16 Prior to the filing of the Eighth Amended Complaint, all defendants had moved for summary judgment dismissing the action on the ground, inter alia, that the statute of limitations had run on Baskin's claims. Baskin opposed the motions on the ground that the statute had been tolled by the concealment of material information from him until 1982. The district court granted these motions in part and denied them in part. To the extent pertinent here, the court, which had before it the newly discovered information (which led it to permit the filing of the Eighth Amended Complaint), granted Stright's motion on the ground that Baskin had learned in 1972 that Stright had been bound by a collective bargaining agreement since 1968 and had failed to make contributions to the Pension Fund on Baskin's behalf from 1968 to 1970. The court reasoned from this that the information Baskin claimed was concealed from him did not conceal his cause of action against Stright. The court denied the summary judgment motions of Local 449 and other defendants, finding that Baskin had come forward with evidence suggesting that Stright had been a union employer prior to 1968, that this information was in the possession of the defendants and was not disclosed to him until 1982, and that he could not have obtained the information through the exercise of reasonable diligence. Thus, the court concluded that there were genuine issues of fact as to whether there was fraudulent concealment of material information from Baskin sufficient to toll the statute of limitations.B. The Trial Evidence and the Motion for Directed Verdict 17 The trial proceeded against Local 449, the Fund, and others in 1985. At the close of the evidence, the claims against all defendants except Local 449 were dismissed. Since Baskin has not appealed from the dismissals of the other defendants, we summarize only the evidence that pertains to the claims against Local 449. 18 Walter Jakubowski, owner of Stright from 1955 to 1982, testified that in 1958, when Stright was working on a large construction project in Stamford, Connecticut, a union delegate had asked two of Stright's workers whether they were union members. Upon learning that they were not, the union delegate chased them from the jobsite. To replace one of the banished nonunion workers, Joseph DeLuca, business agent for Local 449 since 1958, sent Baskin to Stright. DeLuca testified that it was Local 449's practice to send its members only to unionized employers, i.e., employers who had signed collective bargaining agreements with Local 449. 19 DeLuca also testified that prior to 1968, employers who were not bound to collective bargaining agreements were permitted to make voluntary contributions to the Welfare Fund. He conceded that if the employer's contributions were not voluntary, the proper conclusion would be that that employer was bound by a contract with Local 449. 20 Baskin introduced documentary evidence that Stright had made contributions to the Local 449 Welfare Fund on behalf of Baskin from 1958 to 1970. The evidence consisted of the periodic remittance forms supplied to Stright by Local 449 and returned by Stright to the Union. Though the Union had served interrogatory answers denying that any such payments had been made by Stright prior to 1968 and representing that all records of any pre-1968 contributions had been destroyed, these forms had been produced from the Union's files pursuant to a trial subpoena. DeLuca testified that he had been aware of Stright's pre-1968 payments at least since 1969, and had attended meetings of the Welfare Fund from 1958 through 1970 at which these contributions were discussed. Indeed, it was DeLuca's responsibility to contact delinquent employers regarding their contributions, and he testified that in 1969 he had become aware of Stright's remittance reports dating back to 1958 while investigating a claim for health benefits filed by Baskin. 21 Both DeLuca and Jakubowski testified that Stright did not sign a collective bargaining agreement until 1968. Jakubowski stated that he had told Baskin that Stright was not a union employer and that it paid less than union scale wages. Though the reason Stright paid less than union scale was that it had a thin profit margin, Jakubowski said that he had made the Welfare Fund contributions for Baskin from 1958 to 1968 because he was a nice guy. He also testified that Stright simply paid whatever amount the union forms instructed it to pay: we remitted whatever the Union asked us to do, that's what we did. Indeed, at some point, the Union increased the amount of the employer's contributions by 50%; apparently Stright paid the increased amount without question. 22 Though Jakubowski linked Stright's failures to pay union scale and to make pension contributions prior to 1968 to its not being bound by a union contract, Baskin introduced evidence that Stright had also paid less than union scale wages and had failed to make pension contributions after 1968 when Stright admitted to being bound by a collective bargaining agreement. He also introduced a December 1980 affidavit of Jakubowski which stated, inter alia, that Jakubowski was never advised by Mr. DeLuca or any other representative of Local 449 or anyone else that [he] was obligated to make payments to the Local 449 Pension Plan on behalf of James Baskin, and that he had made contributions to the Pension Plan on behalf of [his] other employees for whom [he] was notified that payments should be made. 23 Pension Fund officials testified that if Stright had been identified as a party to a collective bargaining agreement during the 1963-1967 period, Baskin would have been found qualified for a pension. The Pension Fund, however, would have no way of knowing that an employer had an obligation to make contributions unless the Union told the Fund of the employer's obligations. A Fund official stated that if a union, when asked for information in connection with an application, produced records showing that the employer had been making contributions to the union's welfare fund, the Fund would conduct further inquiry. Though the making of such contributions would not necessarily mean that the employer was bound by a collective bargaining agreement, it would technically be unlawful for an employer to make payments to this Welfare Fund if it were not a party to a contract with Local 449; the fact that Stright had been making contributions to the Local 449 Welfare Fund from 1958 to 1970 could have been helpful to the Fund in determining whether Stright was a party to a collective bargaining agreement in 1963-1967. 24 In 1971, after receiving Baskin's application, the Fund asked Local 449 to identify Baskin's employer and to send whatever other pertinent information it had. DeLuca identified Stright as the employer but provided no other information. Thereafter, the Fund requested in writing that Stright furnish copies of its payroll records with regard to Baskin. Stright ignored these requests, and, though copies were sent to Local 449, apparently the Union did nothing to prompt Stright to comply. Eventually, both Local 449 and Stright responded that Stright had not become a party to the collective bargaining agreement until the end of 1967. Neither told the Fund about Stright's contributions from 1958 to 1970 to the Local 449 Welfare Fund. 25 At no time during Baskin's attempts to secure his pension did DeLuca tell Baskin that Stright had been contributing to the Welfare Fund on Baskin's behalf since 1958. Indeed, Baskin, whose trial testimony consisted of his videotaped deposition, testified that in 1969 DeLuca had informed him that he could not receive sick pay because Stright had not been contributing to the Welfare Fund. 26 Baskin also put in evidence Local 449's Constitution, which charged Local 449 with the responsibility ... [t]o conduct its affairs in a manner which would most tend to enhance, conserve and protect the welfare and interest of ... its ... members. DeLuca confirmed that one of Local 449's duties after the Pension Fund's creation in 1963 was to see that employers made the contributions that were due. To enforce an employer's pension obligations, the standard collective bargaining agreements in force during the relevant period gave Local 449 the power to strike, to resort to court action, or to take other action. 27 With respect to his claim for emotional distress, Baskin testified that except for Social Security benefits, the union pension represented his sole means of support, and that its denial had caused him aggravation, depression, rising blood pressure, and loss of sleep, and that he was in bad shape. These problems had not, however, led him to consult a psychologist or a physician. 28 At the close of the evidence, Local 449 moved for a directed verdict on a variety of grounds, including: (1) that Baskin had not proven that the statute of limitations was tolled by fraudulent concealment, because there was insufficient evidence of (a) fraud, (b) the exercise by Baskin of reasonable diligence to discover his cause of action, and (c) the signing or acceptance of a collective bargaining agreement by Stright prior to 1968; (2) that Baskin had not proven that the Union's actions were undertaken in bad faith; and (3) that because Baskin was retired at the time of his pension application, the Union owed him no statutory duty of fair representation and hence was not required to reveal to him any evidence that Stright had been a union employer in 1963-1967. The motion was denied and the case was submitted to the jury. C. The Instructions and the Jury's Verdict 29 The court instructed the jury that in order to return a verdict in favor of Baskin, it would have to find (1) that Stright was bound by a collective bargaining agreement for at least four consecutive years during the period from April 1963 through April 1967, (2) that Local 449 breached its duty of fair representation by failing to require Stright to make pension contributions on behalf of Baskin, (3) that Local 449 fraudulently concealed facts relating to Baskin's cause of action and that Baskin could not have learned of the information concealed through the exercise of reasonable diligence, and (4) that the Union's breach of its duty of fair representation caused Baskin to be denied his pension. The court elaborated on each of these components. 30 The court explained that the jury could not find that Stright had been bound by a collective bargaining agreement simply because Stright voluntarily complied with certain of its provisions, if Stright demonstrated an intent not to be bound by the agreement in its entirety. Rather, in order to find that Stright was bound by the agreement, the jury would have to be persuaded that it was more likely than not that Stright either signed the agreement or had adopted or ratified it by demonstrating a clear intent to be bound by it in its entirety. 31 As to a union's duty of fair representation, the court instructed the jury that the duty is breached only if the union acts arbitrarily, discriminatorily, or in bad faith; the duty is not breached by mere negligence or ineptitude. The jury was instructed that, if Stright was bound by an agreement with Local 449, Local 449 had an obligation not to fail arbitrarily, discriminatorily, or in bad faith to require Stright to make pension contributions on behalf of Baskin. 32 In connection with the statute-of-limitations defense and Baskin's fraudulent-concealment argument, the court told the jury that, because of the special relationship between a union and its members, Local 449 had had an obligation to disclose to Baskin information that it knew might give him a claim against the union. 33 Finally, the court instructed the jury on damages. As to the claim of mental anguish, the court stated that 34 [t]he law recognizes mental anguish as an injury properly compensated by a damage award. It is the plaintiff's burden to show that he actually suffered such mental anguish and if you find that the plaintiff has met this burden by the same fair preponderance of the evidence which we previously indicated is the standard of proof, then you may award him damages to compensate for his mental anguish, 35 adding only that the damages awarded should be fair, just, and reasonable. 36 The jury returned a verdict and answers to special interrogatories. It found that Stright became a signatory to collective bargaining agreements in 1963 and 1965 and that Stright also was bound by virtue of its adoption or ratification of such an agreement for each year from 1963 through 1967. It found that Local 449 had breached its duty of fair representation in failing to require Stright to make pension contributions during that period; that this breach caused Baskin to fail to qualify for his pension; that Local 449 had fraudulently concealed facts giving rise to plaintiff's cause of action; and that Baskin could not have discovered the grounds for his cause of action through reasonable diligence. For his mental anguish, the jury awarded Baskin $650,000. D. The Posttrial Decisions 37 By agreement of the parties, the amount to be awarded to Baskin for lost pension benefits was calculated by the court, which determined that Baskin was entitled to $22,784.16 in past pension benefits, including prejudgment interest, plus $88 per month, commencing June 1, 1985, for the remainder of his life. Judgment was entered awarding Baskin these sums, plus the $650,000 awarded by the jury for his emotional distress. 38 Local 449 moved for judgment n.o.v. or a new trial on the grounds, inter alia, that there was insufficient evidence to support any of the jury's findings in favor of Baskin. The district court denied the motion insofar as most of the liability issues were concerned, concluding that the evidence on those issues, viewed in the light most favorable to Baskin, was sufficient. The Union also argued that the judgment against it and the order dismissing Stright from the case should be set aside because it was unfair to impose on Local 449 the entire burden of compensating Baskin for his lost pension. The court rejected this argument because Local 449 had not opposed the dismissal of Stright or moved for reconsideration of the dismissal; nor had it objected to the court's instructions to the jury that the Union could be held responsible for the entire amount of damages suffered by Baskin. 39 The court found merit, however, in the Union's contention that the jury's award of $650,000 for emotional distress should be set aside. It held that there was insufficient evidence of outrageous conduct on the part of the Union to allow this claim to go to the jury and that Local 449 was thus entitled to judgment dismissing this claim. The court also found that there was insufficient evidence of distress on the part of Baskin to support a judgment in the amount awarded by the jury. Accordingly, the court ruled that if its judgment n.o.v. dismissing this claim were set aside on appeal, Local 449 would be entitled to a new trial on the amount of such damages unless Baskin agreed to remit $600,000 and consent to a judgment of $50,000. E. The Issues on Appeal 40 In this Court, Local 449 contends that the district court erred to the extent that it did not grant the Union judgment n.o.v., arguing principally that (1) there was insufficient evidence to permit the jury to find that Stright became bound to a collective bargaining agreement prior to 1968 either by signing or through adoption or ratification, (2) Local 449 was not required, as part of its duty of fair representation, to enforce Stright's obligation to make pension contributions for Baskin, (3) the evidence was insufficient to establish the tolling of the statute of limitations by fraudulent concealment, and (4) Local 449 cannot be held liable for the total amount of Baskin's damages. 41 Plaintiff's appeals challenge (1) the court's summary dismissal of Baskin's claim against Stright on statute-of-limitations grounds, arguing that fraudulent concealment tolled the statute as to Stright as well as Local 449, and (2) the judgment n.o.v. in favor of Local 449 on the claim for emotional distress, arguing that Local 449 had not moved for a directed verdict as to that claim and that the evidence was sufficient to support both the imposition and the amount of damages. 42 For the reasons below, we reject all of the contentions advanced by Local 449 on its cross-appeal; we find merit in plaintiff's contention that the claim against Stright should not have been summarily dismissed; and we conclude that the court did not err in setting aside the jury's verdict for emotional distress but that it erred in granting judgment n.o.v. instead of ordering a new trial on that claim. 43