Court Opinion

ID: 6928113
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:39:12.086289+00
Date Added: 2024-06-11T16:07:00.609297
License: Public Domain

JOSEPH, P. J.
dissenting.
The parties and the majority denominate this as a suit in equity. I do not agree, but I will tolerate that because it was tried that way. Treating it as a suit in equity and, therefore, it being before us on de novo review, I would reach quite a different result. Beginning in January, 1978, if not sometime earlier, the loyalties of the defendant, acting through its president, Herrle, began to be seriously divided. It is pretty clear to me that Herrle from that point on was constantly engaged in a series of maneuvers designed to protect his company by finding ways to keep in the plaintiffs’ employment and secure employment by the dissident unions. On March 2 the Pension Trust and the Welfare Trust gave notice of their intention to discharge the defendant as of May 1. Nine days later, on March 11, while maintaining its right to keep possession of all of the plaintiffs’ books, records and documents, defendant, again through Herrle, prepared fraudulent documents on behalf of the dissident unions.
If the defendant’s actions up to March 2 did not rise to the level of chicanery sufficient to warrant a conclusion that it was guilty of disloyalty, its actions in refusing to turn over the records and in preparing the fraudulent documents were acts of disloyalty, however lenient a definition one would choose to employ. Unfortunately, plaintiffs did not know about the fraudulent documents when they filed their lawsuit.
The trial judge concluded that both parties had unclean hands but that the plaintiffs’ hands were dingiest of all. I can find nothing in the record to sustain any *460conclusion that the plaintiffs’ hands were unclean with respect to this defendant.
Up to the time of the discovery of the fraudulent documents, defendant was claiming a right to continue to be compensated by both trusts (actually four trusts, two of which are not involved in this appeal). When the fraudulent documents were uncovered, defendant dropped its claim against the Welfare Trust, whose interests were directly affected by the fakery. The majority, note 5, supra, describes that withdrawal "as a form of self-punishment for its wrongdoing.” That characterization is far more charitable than one I would make. Knowing that the trial judge had already tentatively decided in the defendant’s favor, it was surely the better part of wisdom to drop a claim against a plaintiff it had tried to cheat. I would award no bonus points for that.
According to the trial court and the majority, the Welfare Trust does not have to pay defendant anything more, but gets back none of the money it paid defendant up to June 30. The Pension Trust, on the other hand, has to pay the defendant some $10,000 and does not get back any of the compensation it paid the defendant. Both results are unfair. The act of the defendant in dropping its claim for damages against the Welfare Trust was simply an acknowledgment that it had been caught cheating. I would permit the Welfare Trust to recover any and all stuns paid the defendant after April 11, the date of the making of the fraudulent documents.
I would also hold that the Pension Trust, even though it was not the direct victim of the faked documents, was not required to treat the defendant as loyal to it in the face of the defendant’s disloyalty to its related trust. Even if on March 2 the known acts of disloyal tendency were not sufficient cause for termination, the Pension Trust is entitled to benefit from the consequences of the defendant’s undoubted direct disloyalty to the Welfare Trust on March 11. I would, therefore, disallow the defendant any compensation after March 11 and would allow the Pension Trust to recover any compensation paid after that date.