Opinion
No. C0-97-430.
Filed September 2, 1997.
Appeal from the District Court, Hennepin County, File No. 93-8552.
Martin J. Costello, Hughes Costello, (for Respondent).
James P. Young, Lundquist Law Offices, P.A., (for Appellant).
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
Respondent Over-The-Road, City Transfer, Cold Storage, Grocery Market Drivers, Helpers Inside Employees Union, Local No. 544 (Union) brought this action in district court to confirm an arbitration award. The award upheld three grievances filed by Union member Steven Dillenburg against his former employer, Al Golden, Inc. The district court confirmed the award against Al Golden, Inc. and against appellant Golden, Inc., as the alter ego of Al Golden, Inc. Because Golden, Inc. received sufficient notice and an opportunity to be heard and because the evidence supports the district court's determination that Golden, Inc. is the alter ego of Al Golden, Inc., we affirm.
Al Golden, Inc. ceased operations in December 1991 and was statutorily dissolved in December 1994. It does not appear separately in this appeal.
DECISION I.
In reviewing an arbitration award, this court must independently determine the scope of the arbitrators' authority, which is a matter of contract interpretation determined from a reading of the agreement. County of Hennepin v. Law Enforcement Servs., Inc. , 527 N.W.2d 821, 824 (Minn. 1995). We must affirm the award unless the objecting party establishes that the arbitrators have clearly exceeded the powers granted to them in the arbitration agreement. Id. ; see also Minn. Stat. § 572.18 (1996) ("[u]pon application of a party, the court shall confirm an award").
Golden, Inc. argues that the arbitrator, the Joint Area Committee (Committee), violated due process by failing to notify Golden, Inc. that its interests were at stake. We disagree. In January 1993, the Union brought this action to confirm the March 1992 arbitration award against both Al Golden, Inc. and Golden, Inc., as Al Golden, Inc.'s alter ego. Golden, Inc. argued that it had not received adequate notice, and the district court granted Golden, Inc. relief in the form of a rehearing before the Committee.
The Committee scheduled the rehearing for September 1994 and mailed two notices, both addressed to "Ms. Cheryl Golden, Al Golden, Inc." Those notices were returned unopened and marked "refused," presumably because Al Golden, Inc. was no longer in business. At the September 1994 rehearing, based on the employer's failure to appear, the Committee invoked the agreement's default provision and reaffirmed its previous decision upholding the grievances. After several attempts to enforce the award, the Union brought this second motion to confirm the award. Golden, Inc. again argued that it did not receive notice. In this instance, however, the district court disagreed and concluded that Golden, Inc. had intentionally disregarded the notices.
Cheryl Golden is one of the owners of Golden, Inc. She was designated by her mother, Eunice Golden, to represent Al Golden, Inc.'s interests in this matter.
Article 45 of the collective bargaining agreement is entitled "Grievance Machinery and Union Liability." Section 1(g) of that article covers defaults and specifically provides that "refusal of either party to submit to or appear at the grievance procedure at any stage, or failure to comply with any final decision, withdraws the benefits of Article 45."
The notices given by the Committee of the rehearing were sufficient to apprise Golden, Inc. that its interests were at stake. Cheryl Golden, one of the owners of Golden, Inc., was authorized to represent Al Golden, Inc.'s interests in the Dillenburg grievances. In addition, Golden, Inc., through Cheryl Golden, knew that the district court had referred the matter back to the Committee for rehearing because Golden, Inc. had requested this relief in connection with the Union's first confirmation motion. Finally, Golden, Inc. was aware that the Union would seek to hold it liable for any award based upon its status as Al Golden, Inc.'s alter ego. Under these circumstances, the district court properly concluded that Cheryl Golden intentionally evaded notice and that Golden, Inc. had actual and constructive notice of the Committee proceedings, particularly the September 1994 rehearing. See McIntee v. State, Dep't of Pub. Safety , 279 N.W.2d 817, 820 (Minn. 1979).
Golden, Inc. also argues that the award is unenforceable against it because it does not conform to Minn. Stat. § 572.15(a) (1996) (award shall be in writing, signed by arbitrators, and delivered to each party). Again, we disagree. While a copy of the award was not personally delivered to either Al Golden, Inc. or Golden, Inc., under the agreement's default provision, the right to that delivery was waived by their failure to appear at any of the Committee hearings. Moreover, the award fully conforms to standard practice in arbitration proceedings and is enforceable even though it fails to specify an exact amount; arbitration awards granting reinstatement with back pay and benefits are often stated without a specific dollar figure, leaving the ministerial calculation of total amount to the parties. See, e.g., Kewanee Mach. Div. v. Local Union No. 21 , 593 F.2d 314, 316 (8th Cir. 1979) (employee directed to pay grievant back pay of unspecified amount).
II.
A non-signatory employer may be held to the terms of a collective bargaining agreement signed by another employer under the alter ego doctrine. See Local No. 359 v. Arizona Mech. Stainless, Inc. , 863 F.2d 647, 651 (9th Cir. 1988). The question of whether an employer adopted a collective bargaining agreement's arbitration provision or was bound by that agreement is a question for the district court, not for the arbitrators. Id. at 653.
The focus of the alter ego doctrine is on the existence of a disguised continuance or an attempt to avoid the obligations of a collective bargaining agreement through a sham transaction or technical change in operations. A. Dariano Sons, Inc. v. District Council No. 33 , 869 F.2d 514, 518 (9th Cir. 1989); Carpenters Local Union No. 1846 v. Pratt-Farnsworth, Inc ., 690 F.2d 489, 508 (5th Cir. 1982), cert. denied , 464 U.S. 932 (1982). Factors to consider in determining whether alter ego status exists include: whether the two enterprises have substantially identical management, business purpose, operation, equipment, customers, supervision, and ownership. See Iowa Express Distribution, Inc. v. N.L.R.B. , 739 F.2d 1305, 1310 (8th Cir. 1984), cert. denied , 469 U.S. 1088, 105 S.Ct. 595 (1984). Other "critical inquiries" may include anti-union sentiment or avoidance of a labor contract. Id.
On appeal, Golden, Inc. argues that the alter ego determination involves fact issues inappropriate for resolution on summary judgment. Before the district court, however, Golden, Inc. argued that it was entitled to summary judgment on this issue because "the law clearly establishes that [it] is not a successor corporation with respect to the union and Steven Dillenburg." In addition, because both parties were given ample opportunity to be heard on the issue and both agreed to submit the issue on the record, they essentially waived their right to a trial or evidentiary hearing on the matter. See McKinnon v. McKinnon , 352 N.W.2d 530, 531 (Minn.App. 1984). Finally, while the alter ego determination often may involve fact issues, when only one inference can be drawn from undisputed facts, summary judgment is appropriate. See L H Transp., Inc. v. Drew Ag., Inc. , 403 N.W.2d 223, 227 (Minn. 1987). Under these circumstances, the district court properly decided the issue on the merits.
Golden, Inc.'s primary position on the alter ego issue is that Al Golden, Inc.'s demise and Golden, Inc.'s subsequent formation had nothing to do with the collective bargaining agreement. Golden, Inc. argues that Al Golden, Inc. ceased operations because of financial and management difficulties caused by shareholder litigation that began two years before Dillenburg's termination and by the death of founding shareholder, Al Golden, in December 1991.
The facts and the reasonable inferences that may be drawn from those facts, however, sufficiently support the district court's determination that Golden, Inc. was Al Golden, Inc.'s alter ego for the purposes of these grievances. Those facts include: (1) Cheryl Golden, although not an officer or owner of Al Golden, Inc., was actively involved in its management from 1989 to 1991: she was employed as one of its managers, involved in reaching an agreement with the Union regarding strict work rules, consulted on a regular basis regarding Dillenburg's performance problems, and eventually designated as Al Golden, Inc.'s representative in the Dillenburg grievances; (2) Cheryl Golden and Dillenburg exhibited a great deal of personal animosity toward each other; (3) Al Golden, Inc. ceased operations in December 1991, after Al Golden's death; (4) in January 1992, Golden, Inc. was incorporated by Cheryl Golden and Eunice Golden, the sole remaining shareholder of Al Golden, Inc.; (5) five days later, Eunice Golden sold her interest in Golden, Inc. to two former Al Golden, Inc. employees; (6) Golden, Inc. purchased equipment and leased space from Eunice Golden; (7) Golden, Inc.'s primary service included moving heavy machinery, which was Al Golden, Inc.'s primary service; (8) Golden, Inc. took over Al Golden, Inc.'s phone number, address, and building; and (9) Golden, Inc. placed an ad in the yellow pages referring Al Golden, Inc. customers to Golden, Inc. Given these facts, particularly the timing of Al Golden, Inc.'s demise and the rapid start-up of Golden, Inc., the poor relationship between Cheryl Golden and Dillenburg, the common management and similar operations, equipment, and customers between the two corporations, as well as Cheryl Golden's actions in avoiding the dispute resolution process, the district court could easily infer intent to avoid the collective bargaining agreement by incorporating Golden, Inc., and conclude that Golden, Inc. is the alter ego of Al Golden, Inc. for the purposes of this matter. See A. Dariano , 869 F.2d at 518.
The district court's confirmation of the arbitration award against Al Golden, Inc. and Golden, Inc., as Al Golden, Inc.'s alter ego, is affirmed.