36th Dist. Court v. Mich. Am. Fed'n of State, Cnty. & Municipal Emps. Council 25, Local 917

295 Mich.App. 502

815 N.W.2d 494

36TH DISTRICT COURT

v.Michigan AMERICAN FEDERATION OF STATE, COUNTY & MUNICIPAL EMPLOYEES Council 25, LOCAL 917.

Docket No. 298271.

Court of Appeals of Michigan.

Submitted Jan. 4, 2012, at Detroit.

Decided Feb. 28, 2012, at 9:05 a.m.

Kotz, Sangster, Wysocki & Berg, P.C. (by Matthew S. Derby and Heather Gelfand Ptasznik), for plaintiff.

Miller Cohen, P.L.C. (by Robert D. Fetter and Austin W. Garrett), for defendant.

Before: MURRAY, P.J., and TALBOT and SERVITTO, JJ.

MURRAY, P.J.

Plaintiff, the 36th District Court, appeals as of right from an order granting a motion for summary disposition filed by defendant, Michigan American Federal of State, County and Municipal Employees Council 25, Local 917, with respect to the 36th District Court's request to vacate an arbitration award. We affirm in part, vacate in part, and remand.

I. FACTUAL AND PROCEDURAL BACKGROUND

The 36th District Court and AFSCME Local 917 were parties to a collective-bargaining agreement (CBA) that applied to court officers and had a term of June 30, 2003–June 30, 2006. This case arises from the decision of the 36th District Court chief judge to not reappoint four individuals as court officers. Two of the individuals, Bobby Jones and Carlton Carter, were not reappointed in 2004. The other two individuals, Richard Weatherly and Roderick Holley, were not reappointed in 2007.

Each of the four individuals challenged the termination of his employment by filing (at different times) grievances and demands for arbitration. With respect to the expiration of the CBA, Article 27 provided that it would be effective until June 30, 2006, but also stated:

This Agreement shall continue in effect for consecutive yearly periods after June 30, 2006, unless notice is given, in writing, by either the Union or the Employer, to the other party at least ninety (90) days prior to June 30, 2006, or any anniversary date thereafter, of its desire to modify, amend or terminate this Agreement.

If such notice is given, this Agreement shall be open to modification, amendment or termination, as such notice may indicate on June 30, 2006, or the subsequent anniversary date, as the case may be.

The 36th District Court had given notice 90 days before June 30, 2006, indicating a desire to modify, amend or terminate the agreement, and so took the position that the grievances were not subject to any arbitration agreement since the CBA had expired under Article 27. Additionally, it was and is the position of the 36th District Court that the appointment of court officers is governed by MCR 3.106, which provides that court officers are to be appointed by the chief judge of a court for terms not to exceed two years.

A. BACKGROUND FACTS FROM THE 2007 WAYNE CIRCUIT COURT CASE

In 2007, AFSCME Local 917 filed an action against the 36th District Court in the Wayne Circuit Court, seeking to compel the 36th District Court to arbitrate the termination of the employment of the four individuals in accordance with the CBA. On June 12, 2008, the circuit court entered an order requiring that an arbitration hearing be held within 60 days. The 36th District Court appealed that order, which was assigned Docket No. 286432 in this Court.

While the appeal in Docket No. 286432 was still pending, the arbitrator rendered two decisions. In his first decision the arbitrator determined that the grievances were arbitrable, while in the second decision issued six months later, the arbitrator determined that the 36th District Court did not have just cause for terminating, or more precisely for not reappointing, the four grievants. Each grievant was to be reinstated to his former position and receive back pay effective from the date of termination or nonreappointment.

In August 2009, the 36th District Court filed a motion to remand in Docket No. 286432, requesting that the case be remanded to the trial court for a judicial decision on the issue of arbitrability. This Court granted the motion and ordered that the two lower court cases (the second case is discussed immediately below) be consolidated. AFSCME v. 36th Dist. Court, unpublished order of the Court of Appeals, entered September 2, 2009 (Docket No. 286432).

B. THE INSTANT CASE

Before the motion to remand was filed in the prior case, the 36th District Court filed this action to vacate the arbitration decisions and awards on the ground that they violated the law and public policy as set forth in MCR 3.106, that the awards exceeded the arbitrator's contractual authority, and that the awards did not draw their essence from the CBA. The 36th District Court also alleged that the CBA did not apply to the grievances of Weatherly and Holley because their claims accrued after the CBA expired.

AFSCME Local 917 eventually moved for summary disposition on the ground that the disputed grievances were arbitrable, and also sought to enforce the arbitration awards. Less than a month later, the 36th District Court moved to vacate the arbitration decisions and awards or, alternatively, for an evidentiary hearing to determine the issue of arbitrability. After a hearing and the filing of supplemental briefs the trial court determined in a written opinion and order that the claims raised by AFSCME Local 917 were arbitrable and granted its motion for summary disposition. This case is now before us on an appeal of right.

II. STANDARD OF REVIEW

We review de novo a trial court's ruling on a motion for summary disposition. Coblentz v. City of Novi, 475 Mich. 558, 567, 719 N.W.2d 73 (2006). Although the trial court did not specify the particular subrule of MCR 2.116(C) under which it granted the motion for summary disposition, review is appropriate under MCR 2.116(C)(10) because the parties relied on evidence outside the pleadings. Spiek v. Dep't of Transp., 456 Mich. 331, 338, 572 N.W.2d 201 (1998). A motion under MCR 2.116(C)(10) should be granted only if the submitted evidence fails to establish a genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Allison v. AEW Capital Mgt., LLP, 481 Mich. 419, 424–425, 751 N.W.2d 8 (2008).

We also review de novo a trial court's decision to enforce, vacate, or modify an arbitration award. Ann Arbor v. AFSCME Local 369, 284 Mich.App. 126, 144, 771 N.W.2d 843 (2009). Labor arbitration falls within the realm of the common law, id., where judicial review of an arbitration decision is limited, City of Ferndale v. Florence Cement Co., 269 Mich.App. 452, 460, 712 N.W.2d 522 (2006). A court may not review an arbitrator's factual findings, Ann Arbor, 284 Mich.App. at 144, 771 N.W.2d 843;Lenawee Co. Sheriff v. Police Officers Labor Council, 239 Mich.App. 111, 118, 607 N.W.2d 742 (1999), but may review whether the arbitrator acted within the scope of his or her contractual authority, Lenawee Co. Sheriff, 239 Mich.App at 118, 607 N.W.2d 742. A court may also review an arbitrator's award for an error of law that clearly appears on the face of the award or in the reasons stated by the arbitrator for the decision. DAIIE v. Gavin, 416 Mich. 407, 441–443, 331 N.W.2d 418 (1982). The error must be “so material or so substantial as to have governed the award, and but for which the award would have been substantially otherwise.” Id. at 443, 331 N.W.2d 418. “ [A]rbitrators can fairly be said to exceed their power whenever they act beyond the material terms of the contract from which they primarily draw their authority, or in contravention of controlling principles of law.” Id. at 434, 331 N.W.2d 418.¹

III. CONTRACT PERIOD OF THE CBA

Although the 36th District Court argues that the trial court failed to decide on remand whether the grievances were arbitrable, i.e., whether the CBA expired before the chief judge declined to reappoint Weatherly and Holley in 2007, the record belies this assertion.² The trial court unquestionably complied with the remand order, and clearly decided the arbitrability issue. The 36th District Court's real beef is the rationale utilized by the trial court, which we shall now examine.

An individual's right to arbitrate must be based on a viable contractual right to arbitration. Ottawa Co. v. Jaklinski, 423 Mich. 1, 13, 377 N.W.2d 668 (1985). “The existence of a contract to arbitrate and the enforceability of its terms is a judicial question which cannot be decided by an arbitrator.” Arrow Overall Supply Co. v. Peloquin Enterprises, 414 Mich. 95, 99, 323 N.W.2d 1 (1982). Absent a binding contract, the parties cannot be required to arbitrate issues that arise between them. Florence Cement, 269 Mich.App. at 460, 712 N.W.2d 522;AFSCME Council 25 v. Wayne Co., 290 Mich.App. 348, 350, 810 N.W.2d 53 (2010).³

The parties never disputed that the CBA contained an arbitration provision for grievances. Indeed, Article 8, § 1 of the CBA specifies:

In the event differences should arise between the Employer and the Union during the term of this Agreement as to the interpretation and application of any of its provisions, the parties shall act in good faith to promptly resolve such differences in accordance with the following procedure. [Emphasis added.]

Article 8, § 10 provides for arbitration to resolve

unresolved grievances which relate to the interpretation, application, or enforcement of any specific Article and Section of this Agreement, or any written Supplementary Agreement, which have been fully processed through the last step of the Grievance Procedure as herein provided may be submitted to arbitration.... [Emphasis added.]

The material question instead is whether the term of the CBA had ended, and therefore no contract to arbitrate existed, when court officers Weatherly and Holley were not reappointed in 2007. As noted earlier, Article 27 of the CBA provides:

This Agreement shall become effective and binding on date of signing and remain in full force and effect until June 30, 2006.

This Agreement shall continue in effect for consecutive yearly periods after June...