CONNECTICUT CO. v. DIVISION 425

147 Conn. 608 (1960) | Cited 34 times | Supreme Court of Connecticut | July 29, 1960

The plaintiff, the Connecticut Company,brought this action in the Superior Court

[147 Conn. 610]

     by writ dated May 12, 1959, against local unionsof its employees. These unions are divisions ofthe Amalgamated Association of Street, ElectricRailway and Motor Coach Employees of America,A.F.L. - C.I.O. The plaintiff seeks a declaratoryjudgment that an agreement of October 26, 1955,between it and the defendants was terminated as ofSeptember 30, 1958, and is no longer in effect.See General Statutes 52-29; Practice Book 276-280.The plaintiff also sought a temporary and a permanentinjunction restraining the defendants frombringing or prosecuting any action in any court tocompel the specific performance of the agreementfor any period of time beyond September 30, 1958.A temporary injunction issued on June 11, 1959. OnJuly 31, 1959, the plaintiff amended its complaintby adding a second count in which it again soughta temporary and a permanent injunction againstany court action by the defendants to compelarbitration concerning any basic wage scales orworking conditions under the contract. OnSeptember 28, 1959, the defendants answered andcounterclaimed, seeking a declaratory judgmentthat the plaintiff was obligated to arbitrate theterms of a new collective bargaining agreement, anorder that the plaintiff proceed to arbitration,and an order that the injunction be dissolved.On October 7, 1959, the defendants amended theiranswer and alleged that a controversy existedbetween them and the plaintiff which constituteda labor dispute under General Statutes 31-112(c) and that the Superior Court did not havejurisdiction to issue an injunction by reason ofGeneral Statutes 31-113. The answer also allegedthat the plaintiff had an adequate remedy at law.The trial court rendered judgment declaring thatthe agreement between the parties was

[147 Conn. 611]

     terminated as of September 30, 1958, and that theplaintiff was not under any obligation by virtueof that agreement to arbitrate basic wage scalesand working conditions, and permanently enjoiningthe defendants from bringing any action to compelspecific performance of the agreement. The defendantshave appealed.

The plaintiff is a motorbus carrier operating,under a franchise from this state, in and betweenHartford, Meriden, New Haven, Stamford, Middletownand Norwich. It serves an area with a populationof approximately one million people and carriesannually about fifty-five million passengers. Itsgross annual revenue from operations in this stateexceeds $1,000,000 annually. It operates bussesfor exclusive charter service outside the state,but its revenue from this source is less than $50,000a year. The defendants represent, for thepurpose of collective bargaining through a stateconference board, 1100 employees of the plaintiffwho are paid by the hour. The plaintiff hasrecognized the defendants as the sole bargainingagencies for its employees in the classificationsof drivers and mechanics. During the past fiftyyears, the plaintiff and representatives of itsemployees have bargained collectively concerningwages, hours and other terms and conditions ofemployment, originally through a committee of theemployees and, since 1939, through the defendants.Uniform contracts covering all divisions representedby the defendants have been negotiated for theemployees. These contracts took the form of memorandaof agreement before 1939 and formal agreementsthereafter. Each agreement dealt with basic wagesand working conditions for its term and constitutedthe entire agreement between the parties forthe employees covered. There have been twelve

[147 Conn. 612]

     such agreements from 1939 to 1958. During thisperiod rates of pay and working conditions havebeen fixed five times in arbitration proceedingsunder an agreement.

The agreement concerned in the present litigationwas made on October 26, 1955. It provided thatthe rates of pay and working conditions containedin an agreement dated May 3, 1950, should becontinued for a period of thirty-six months beginningOctober 1, 1955, and ending September 30, 1958,except as modified by the agreement of October26, 1955. The two agreements, together with asupplemental agreement which was executed onNovember 1, 1957, and modified the cost of livingescalator clause in the 1955 agreement, constitutethe last contract of the parties. Parenthetically,it is of some importance to note the compositionof these documents. The agreement of May 3, 1950,contains three parts. Part one deals with rates ofwages and "working conditions" for operators; parttwo, with rates of wages and "working conditions"for hourly rated shop and garage employees; partthree, with general provisions relating to busoperators and hourly rated shop and garageemployees. The agreement of October 26, 1955,similarly contains a part one, a part two and apart three, each dealing with the items covered inthe corresponding part of the 1950 agreement. Thesections decisive of the present controversy, 92(c) and 96, are included in part three of the 1950agreement. Section 96, as amended, is repeated inpart three of the 1955 agreement, while 92(c)remained in force without change during the periodof the 1955 agreement. The determination of theinstant case revolves around the properinterpretation of these two sections.

Section 96 provides as follows: "This Agreement

[147 Conn. 613]

     shall remain in effect until and including September30, 1958 [in the 1950 agreement, September 30,1951], and unless terminated by written noticegiven by either party to this Agreement to theother party at least sixty (60) days prior to saiddate, shall continue in effect from and after saiddate until terminated by such notice given byeither party to the other." Section 92(c) readsas follows: "Should written notice terminatingeither the basic wage scales, or any of theseWorking Conditions, or both, be given inaccordance with Section 96 hereof, then anydifference or differences concerning the basicwage scales or these Working Conditions, or both,as the case may be, shall be submitted toarbitration as provided in paragraph (e) ofthis section, unless an adjustment be made bynegotiations between the parties." Subsection (e)of 92 provides that the company will choose onearbitrator and the employees another, and, ifagreement upon a third cannot be reached, he is tobe chosen by alternately striking one name from alist of nine submitted by the Federal Mediationand Conciliation Service or the AmericanArbitration Association. Prior to the 1955agreement, it was necessary for the parties toreach agreement upon the third arbitrator, whowas to act as chairman.

On July 24, 1958, the plaintiff gave to thedefendants timely notice of a resolution of itsdirectors authorizing its director of laborrelations and its general manager "to prepare anew contract for the negotiating committeeof . . . [the defendant unions] for the periodbeginning October 1, 1958," and authorizing itsproper officers to notify the unions "that thepresent contract dated October 26, 1955, and asamended is to be terminated and all of itsprovisions cancelled at midnight September 30,

[147 Conn. 614]

     1958." The notice stated that: "In accordance withthese resolutions, we hereby cancel said agreementand terminate all of its provisions as of September30, 1958. We have prepared a proposed newcontract which we will submit at our firstnegotiation meeting." Prior to July 24, 1958, thedefendants had given written notice of theirdesire to "change the agreement." In a letterunder the date of August 5, 1958, theyacknowledged receipt of a letter from theplaintiff dated July 28, 1958, setting August 25,1958, as "the date and time to commencenegotiations." In the letter of August 5, they setout, in detail, the "contract changes" which theydesired to have made in part one (operators), parttwo (repair and maintenance employees), and partthree of the existing contract. There was alsoincluded a "self-administered, trusted, funded andactuarially sound Old-Age Retirement and DisabilityPlan . . . for all employees." The partiesheld their first meeting on August 26, 1958, tonegotiate the rates of pay and working conditionsin a new agreement to take effect October 1, 1958.The plaintiff presented its proposal, using thegeneral form of the May 3, 1950, contract. Theproposal omitted any provision for arbitration.The defendants submitted their proposals, whichincluded the arbitration clause, 92(c), asbefore. Negotiations continued through September,1958, the plaintiff insisting that the arbitrationclause be omitted and the defendants, that it beincluded.

On September 30, 1958, the defendants requestedin writing that the unresolved issues between theparties "be submitted to arbitration in accordancewith section 92 of our agreement," appointed DavidZimring as their arbitrator, and requested the plaintiffto appoint its arbitrator. On October 3, 1958, the

[147 Conn. 615]

     plaintiff notified the defendants that J. J.Gaherin would act as its arbitrator and thatGaherin would call Zimring. These two begannegotiations in an attempt at amicable settlement,but they were unable to resolve the issues, theplaintiff insisting that the arbitration clause beeliminated in favor of mediation Or some form ofvoluntary arbitration, and the defendants urgingthat arbitration be included. The parties werealso at issue over the matter of a funded pensionsystem. The plaintiff was willing to submit wagesand working conditions to arbitration, but itrefused to submit the matter of the arbitrationclause and pensions. A majority of the defendants'conference board as well as the plaintiff proposeda new agreement on November 26, 1958. Itsubstituted mediation or voluntary arbitration for92(c) of the old contracts and eliminated thepension plan proposed by the defendants. The unionmembership rejected this proposed agreement.Negotiation continued to be fruitless. Thedefendants maintained that the contract of May 3,1950, as adopted in the contract of October 26,1955, had not been terminated and that theplaintiff must arbitrate all unresolveddifferences concerning the terms of a newcontract. The plaintiff maintained that its noticeterminated the life of the entire agreement andthat it was under no contractual duty to arbitrateanything. The resolution of this issue hangs uponthe intent expressed in 92(c) and 96 of thecontract.

This litigation was precipitated by negotiationsbetween the plaintiff and the defendants. Speakinggenerally, the dispute before the court maybe said to be a labor dispute in that theprotagonists are management and labor,respectively. But the question for decisionis the interpretation of the provisions of acontract governing the relationship of the

[147 Conn. 616]

     parties. We have to determine the intent expressedby 92(c) and 96, two provisions contained in acontract made by parties in this state as to theirrespective rights and duties concerning an enterprisecarried on, almost entirely, in this state. Thisis an issue for the court. Chase Brass & CopperCo. v. Chase Brass & Copper Workers Union, 139 Conn. 591,595, 96 A.2d 209; M. Shapiro & Son ConstructionCo. v. Battaglia, 138 Conn. 238, 243,83 A.2d 204. It is an issue properly cognizable in thecourts> of this state. McCarroll v. Los AngelesCounty District Council of Carpenters, 49 Cal.2d 45,60, 66, 315 P.2d 322, cert. denied, 355 U.S. 932,78 S.Ct. 413, 2 L.Ed.2d 415; Coleman Co. v.International Union, 181 Kan. 969, 977, 317 P.2d 831;Philadelphia Marine Trade Assn. v.International Longshoremen's Assn., 382 Pa. 326,333, 336, 115 A.2d 733, cert. denied, 350 U.S. 843,76 S.Ct. 84, 100 L.Ed. 751; General BuildingContractors' Assn. v. Local No. 542, 370 Pa. 73,82, 87 A.2d 250; General Electric Co. v.International Union, 93 Ohio App. 139, 148, 156,108 N.E.2d 211, appeal dismissed,158 Ohio St. 555, 110 N.E.2d 424; Local 756 International Unionv. Le Roi Division, 274 Wis. 538, 540,80 N.W.2d 285; see Textile Workers Union v. Lincoln Mills,353 U.S. 448, 457, 77 S.Ct. 912, L.Ed.2d 972;Assn. of Westinghouse Salaried Employees v.Westinghouse Electric Corporation, 348 U.S. 437,449, 456, 459, 75 S.Ct. 489, 99 L.Ed. 510;Ferguson-Steere Motor Co. v. InternationalBrotherhood, 223 F.2d 842, 843.

In ascertaining intent, we consider not only thelanguage used in the contract but also thecircumstances surrounding the making of the contract,the motives of the parties and the purposes whichthey sought to accomplish. Amalgamated Assn. v.

[147 Conn. 617]

     Connecticut Co., 142 Conn. 186, 192, 112 A.2d 501;United Aircraft Corporation v. O'Connor, 141 Conn. 530,538, 107 A.2d 398; Colonial Discount Co. v.Avon Motors, Inc., 137 Conn. 196, 200,75 A.2d 507; Restatement, 1 Contracts 235. The practicalconstruction indicated by the conduct of theparties over a period of time is evidence ofintent. Beach v. Beach, 141 Conn. 583, 591,107 A.2d 629; Volk v. Volk Mfg. Co., 101 Conn. 594,601, 126 A. 847; 3 Williston, Contracts (Rev. Ed.)623. It cannot, however, prove an intent contraryto the plain meaning of the language used. Dornev. Williams, 140 Conn. 193, 200, 98 A.2d 796;Trumbull Electric Mfg. Co. v. John Cooke Co.,130 Conn. 12, 16, 31 A.2d 393; 3 Williston, loc. cit.;3 Corbin, Contracts, p. 147. Every provision ofthe contract must be given effect if it canreasonably be done, because parties ordinarily donot insert meaningless provisions in theiragreements. Byram Lumber & Supply Co. v. Page,109 Conn. 256, 264, 146 A. 293; Chase Brass & CopperCo. v. Chase Brass & Copper Workers Union,139 Conn. 591, 596, 96 A.2d 209. With these principlesfor guidance, we consider first the language usedby the parties in 92(c) and 96 of their agreements.Section 92 in the contract of May 3, 1950,remained unchanged in the 1955 version, except asto the provisions of subsection (e) concerning theselection of a third arbitrator. Section 92provides generally for the manner of settlingdifferences between the parties "regardinginterpretation of these Working Conditions orregarding discipline." Subsection (c) states that,"[s]hould written notice terminating either thebasic wage scales, or any of these WorkingConditions, or both, be given in accordance withSection 96 hereof," any differences concerningthem shall be submitted to arbitration.

[147 Conn. 618]

     Section 96 is contained in full in both the 1950and the 1955 contracts. The 1950 version states:"This Agreement shall remain in effect until andincluding September 30, 1951 [the 1955 versioncontains the date September 30, 1958], and unlessterminated by written notice given by either partyto this Agreement to the other party at leastsixty (60) days prior to said date, shall continuein effect from and after said date untilterminated by such notice given by eitherparty to the other."

The written contract before us contains manyprovisions, most of them separable. Eachprovision is an agreement as to a particularfeature of the contractual relationship. Section96 fixes the term of the entire contract. Itallows an automatic renewal of the entire contractunless written notice of termination is given. Itis a necessary, indeed an essential, provision,separate and distinct from any other. It containsno statement of any cause for a termination butleaves it to the will of either party. Section 92(c), however, gives to each party during the termof the contract the power to prevent the automaticrenewal of any of its provisions relating to "thebasic wage scales, or any of these Working Conditions,or both," by giving a sixty-day writtennotice as set up in 96. It is significant that thecontract contains in part one a basic wage scaleand sixty-one paragraphs dealing with what aredescribed as "Working Conditions" for operators,and in part two a wage scale for hourly rated andgarage employees and twenty-five paragraphs of "WorkingConditions." It is a clear assumption from the languageused in these sections that either party could terminatethe entire contract by giving the notice requiredin 96, or, by proceeding under 92(c), preventthe automatic renewal of any of the basic

[147 Conn. 619]

     wage scales or working conditions and inducearbitration on these features while the contractcontinued in operation according to all its otherterms. This interpretation gives to 92(c) and 96their full effect. Chase Brass & Copper Co. v.Chase Brass & Copper Workers Union, Supra; ByramLumber & Supply Co. v. Page, supra.

The interpretation urged by the defendants iscontrary to the clear intent expressed by thelanguage used. However, they claim that a noticeunder 92(c) and 96 could lead only to anegotiation, and, if agreement failed, toarbitration of all issues in dispute. Aninterpretation such as this could result in thecompulsory arbitration of an entirely new contractto cover future relations. It could also make thecontract of 1955 interminable at the will ofeither party. The trial court heard evidence ingreat detail concerning the negotiations had andagreements made between the plaintiff and therepresentatives of its employees. The defendantsargue that these negotiations and agreements showconduct of the parties supporting a practicalinterpretation of the contract and that thisinterpretation is the proper one. While theconduct of the parties cannot compel aconstruction contrary to an intent expressed inthe plain language of a contract, we have,nevertheless, considered the conduct here.

From 1916 until 1939, the plaintiff negotiatedagreements with its employees acting through acommittee, and after 1939, with a state conferenceboard composed of representatives of the defendants.The facts concerning these negotiations andagreements are for the most part unchallenged. Thedefendants claim that the conclusions drawn fromthem by the trial court were unwarranted. We haveexamined the finding, the exceptions to it, and all

[147 Conn. 620]

     of the exhibits which are made a part of thefinding. It is unnecessary, for the purpose ofthis opinion, to trace, as the finding, with theaid of the exhibits, traces, the development andapplication of 92(c) and 96. While thepredecessors of these sections in earliercontracts dealt with changes and modifications in"wage scales" and "working conditions," thecontract of June, 1941, altered, in a significantway, the provisions of 96 as it had appearedtheretofore. Prior to 1941, 96 had stated that"these basic wage scales" should remain in effectunless terminated by notice. In 1941, however, thephrase "[t]hese basic wage scales" was changed tothe phrase "[t]his agreement." This change isentirely consistent with the clearly expressedintent that the parties, by giving notice under 92(c), could terminate the operation of the wagescales, or, by giving notice under 96, couldterminate the entire contract. Beginning in 1942and continuing through 1952, the plaintiff and thedefendants from time to time served writtennotices upon each other of their desires to changeprovisions in the contract. These changes related,for by far the most part, to wage scales and workingconditions. All of the submissions to arbitrationwere made by separate written contracts ofsubmission and dealt with one or more specificmatters, never with the entire contract.

The trial court found that until the notice oftermination of the agreement was given by the companyon July 24, 1958, the notices given by both partieswere notices of proposed changes in the contract inforce and were not treated by the parties as noticesto terminate the entire existing contract. Rather,these notices expressed a desire of one orthe other that the agreement be "modified" or"changed in part" as to basic wages and working

[147 Conn. 621]

     conditions. Such notices would prevent the automaticrenewal of the provisions in which thechanges were sought but would not prevent theautomatic renewal of the contract as to all otherprovisions. The defendants have assigned error inthese findings. We consider them to be logical andreasonable inferences to be drawn from the conductof the parties. When arbitration was resorted to,as it was on five different occasions, theemployees, for aught that appears, stayed at work,abiding, as the company did also, by the terms ofthe contract which were not in question. Later,the parties incorporated the changes made as aresult of arbitration or negotiation in a modifiedagreement.

As stated hereinbefore, the interpretation urgedby the defendants would mean that any notice oftermination could lead only to the arbitration ofa new or modified agreement. They say that thearbitration provisions amount to an impliedno-strike agreement. See W. L. Mead, Inc. v.International Brotherhood, 126 F. Sup. 466. Theintent of the parties to a contract cannot befound by implication unless a contrary intentioncannot be supposed or any other inference made.The implication must be a necessary one and quiteas obvious from the terms of the contract asthough the intent implied was expressed in fact.First Ecclesiastical Society v. Besse, 98 Conn. 616,623, 119 A. 903; Ives v. Willimantic, 121 Conn. 408,411, 185 A. 427; Rabinowitz v. ConnecticutImporting Co., 136 Conn. 468; 472, 72 A.2d 485. Ifthe defendants had intended to agree that there wouldbe no strike, the contract could have clearly sostated. Public policy favors negotiation andsettlement of labor-management disputes withoutstrikes, but it also favors a reasonable freedomof action for both sides. If the parties to this

[147 Conn. 622]

     litigation cannot themselves negotiate a new contract,our statutes require fair collective bargainingand provide the means of mediation and arbitration.General Statutes 31-105 (6), 31-117, 52-408 -52-424.

If it was the intent of the parties that 92(c)and 96 require compulsory arbitration of the termsof a new contract, the requirement would applywith equal force to both parties. The trial courthas found that the defendants' proposals forinclusion in a new contract, if granted by thecompany or allowed by the arbitrators, wouldamount to an additional expenditure of $2,750,000in a year. The plaintiff's offer would requirean additional expenditure of $440,000 over a two-yearperiod. The plaintiff has continued, on aday-to-day basis, the wage scale and workingconditions contained in its recent contract. Theparties have continued negotiations in good faith.There has been no strike or lockout on thisoccasion, nor was there any during the previousfifty years. If arbitration is compulsory, theparties must submit their respective fates tothree arbitrators, two of whom are admittedlypartial because each represents one of theparties. The decision of the third would becontrolling. The plaintiff claims that anyinterpretation of this contract which wouldrequire compulsory arbitration is unlawful underthe rule of Boston Printing Pressmen's Union v.Potter Press, 141 F. Sup. 553, aff'd, 241 F.2d 787,cert. denied, 355 U.S. 817, 78 S.Ct. 21, 2 L.Ed.2d34; see Local 170 v. Genesee Circuit Judge,322 Mich. 332, 347, 34 N.W.2d 71. It is not necessary todiscuss this claim because the contract, as we interpretit, contains no provision requiring compulsoryarbitration when, as was the case here, one of theparties has exercised the power conferred by 96

[147 Conn. 623]

     to terminate the contract. It necessarily followsthat there is no need to discuss three cases whichthe defendants claim completely reject the conceptsof the Potter Press case, supra: UnitedSteelworkers v. American Mfg. Co., 363 U.S. 564,80 S.Ct. 1343, 1363, 4 L.Ed.2d 1403, 1432; UnitedSteelworkers v. Warrior & Gulf Navigation Co.,363 U.S. 574, 80 S.Ct. 1347, 1363, 4 L.Ed.2d 1409,1432; United Steelworkers v. Enterprise Wheel &Car Corporation, 363 U.S. 593, 80 S.Ct. 1358,1363, 4 L.Ed.2d 1424, 1432.

The clause (96) providing for the continuanceof the life of the contract, unless notice oftermination is given, is a common one in labor-managementagreements. See United Electrical Radio &Machine Workers v. Union Mfg. Co., 145 Conn. 285,286, 289, 141 A.2d 479. The terms of thenotice given by the plaintiff brought thecontractual relationship of the parties to an end.It is true that it envisaged a continuation oflabor-management relationships, but under anentirely new contract which was thereafter to benegotiated. Paterson Parchment Paper Co. v.International Brotherhood, 191 F.2d 252, 254,cert. denied, 342 U.S. 933, 72 S.Ct. 376, 96 L.Ed.694, rehearing denied, 342 U.S. 956, 72 S.Ct. 625,96 L.Ed. 710; Flores v. Barman, 130 Cal.App.2d 282,289, 279 P.2d 81; Local 756 v. Le RoiDivision, 274 Wis. 538, 544, 80 N.W.2d 285; note,17 A.L.R.2d 754, 758. The notice of July 24,1958, in plain terms severed all contractualrelationships. We conclude that 92(c) and 96 wereseparate and distinct clauses of the contract andthat the notice given by the plaintiff on July 24,1958, terminated the contract between the partiesso that the provisions of 92(c) becameinoperative.

One further claim made by the defendants

[147 Conn. 624]

     concerning 92(c) and 96 requires brief discussion.They rely on International Brotherhood v. Trudon &Platt Motor Lines, Inc., 146 Conn. 17, 20,147 A.2d 484, and Batter Building Materials Co. v.Kirschner, 142 Conn. 1, 10, 110 A.2d 464, insupport of their proposition that a duty toarbitrate survives the life of the contract. Thesecases involve disputes which arose during the termof the contract. The dispute here arose out ofprovisions of the contract, but we haveinterpreted those provisions as not beingapplicable to the arbitration of issues arisingout of the negotiation of an entirely new contractafter notice of termination is given by one of theparties to the other under 96. Therefore, thedefendants' claim is without merit.

The defendants claim that the court had nojurisdiction to issue a permanent injunction torestrain them from proceeding with an action tocompel arbitration. They allege that there is acontroversy between the parties which constitutesa "labor dispute" under General Statutes 31-112(c). The case at bar was begun by writ, summonsand complaint dated May 12, 1959. The defendantsalso brought an action against the plaintiff inthe Superior Court to compel arbitration, but thetrial court has permanently enjoined theprosecution of that action. In the action broughtby the defendants as well as in the presentaction, the interpretation of 92(c) and 96 wouldhave been in issue. A resolution of that issue isnecessary to a disposition of either case. Thepleadings in the instant case raise the issue, ithas been fully tried, and the declaratory judgmentof the trial court disposed of it. It is inconceivablethat the plaintiff or the defendants would havequestioned that judgment except, as is done here, bythe process of an appeal. Under these circumstances

[147 Conn. 625]

     there was no clear need for the issuance of aninjunction because there was another adequateremedy. Holt v. Wissinger, 145 Conn. 106, 113-116,139 A.2d 353, and cases cited therein. The samecan be said as to the issuance of the temporaryinjunction on June 11, 1959.

The trial court was correct in concluding thatthe contract between the plaintiff and thedefendants had been legally terminated and thatthe plaintiff was under no obligation to arbitrateissues arising out of the negotiation of a newcontract. The trial court was in error, however,in granting injunctive relief.

There is error in part, the judgment is setaside and the case is remanded with direction torender judgment as on file except as modified toaccord with this opinion.

In this opinion the other judges concurred.

Back to top