Court Opinion

ID: 9848038
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:11:44.10028+00
Date Added: 2024-06-11T09:17:56.377973
License: Public Domain

*578STEINMETZ, J.
(dissenting). I dissent from the result of the majority opinion and from its reasoning.
The bad faith claim in this case depends entirely on interpretation of the labor contract between the plaintiff, the union and Allis-Chalmers. In Kranzush v. Badger State Mut. Cas. Co., 103 Wis. 2d 56, 73, 307 N.W.2d 256 (1981), we held: “The insurer's duty of good faith and fair dealing arises from the insurance contract and runs to the insured. No such duty can be implied in favor of the claimant from the contract since the claimant is a stranger to the contract and to the fiduciary relationship it signifies.” The majority now abandons the holding in Kranzush. Because any duty allegedly violated by Allis-Chalmers in the present case was specifically created by the labor contract, and would not exist absent such contract, it must fall within the ambit of sec. 301 of the Labor Management Relations Act (LMRA), which governs labor agreements. Without the existence of the labor contract conferring disability benefits upon union members, there can be no action in this case based on a failure to pay such benefits. A finding of bad faith will necessarily be premised on a finding that a labor agreement, governed by federal law, has been violated. To do as the majority holds fragments federal labor law.
Section 301 of the LMRA provides the jurisdictional basis for any claim arising out of a contract between an employer and a labor organization. In addition to the right to maintain a sec. 301 action, an employee or union having a claim arising from a collective bargaining agreement, or believing that the employer has failed to honor the agreement in good faith, may file an unfair labor practice charge with the NLRA alleging a violation of the National Labor Relations Act (NLRA), 28 U.S.C. sec. 158(a)(5) and 158(d). Also, this plaintiff who asserts a claim arising from a labor contract has the choice of exhausting his contractual remedies and in*579stituting a lawsuit or filing a charge with the appropriate administrative agency. In either event, he has a federal claim arising under federal labor law.
If the plaintiff seeks a claim under sec. 301, he must exhaust his contractual remedies before instituting court action. Plaintiff did not so exhaust his remedies.
If plaintiff’s claim is not a federal claim under sec. 301, but rather is a state law claim, then there are overriding considerations of federal labor policy that would require its dismissal.
The bad faith violation this plaintiff is asserting depends entirely on the labor contract since his rights and remedies do not exist but for the contract. Because the activities of which plaintiff complains are of the type prohibited by the NLRA, any state cause of action based on such activity is preempted by federal labor law, since it is of major concern to such law and policy. The mere existence of a state tort of bad faith does not mean that the tort is deeply rooted in local feeling and responsibility or that the state’s interest is necessarily greater than the interest in federal uniformity. There can be no finding of bad faith here without an antecedent finding that the underlying contract has been violated. It is this agreement which created the duty of good faith that plaintiff claims was violated, and it is this agreement that must be interpreted as the threshold issue.
For these reasons, I would affirm the decision of the court of appeals dismissing the complaint as to Allis-Chalmers Corporation. For the same reasons, I would affirm the court of appeals as to dismissal of the complaint as to Aetna Life and Casualty Company.
The majority has found as a matter of law that Aetna has a fiduciary relationship with Allis-Chalmers so that “Aetna stands in the same relationship with Lueck as does A-C and, therefore, has the same fiduciary duty as the primary insurer.” (Supra, at 576.) That holding by the *580majority on this inadequate factual record as to the relationship between Aetna and A-C is not possible. Even the plaintiff asked only for more discovery to determine fully the relationship between Aetna and A-C. In regard to Aetna, at the very least, the court should have remanded the case for further discovery.
I dissent.