Sheridan Fire Fighters Local No. 276, Iaff v. City of Sheridan

303 P.3d 1110

SHERIDAN FIRE FIGHTERS LOCAL NO. 276, IAFF, AFL–CIO, CLC, Appellant (Plaintiff),

v.CITY OF SHERIDAN, Wyoming, Appellee (Defendant).

No. S–12–0108.

Supreme Court of Wyoming.

March 20, 2013.

Representing Appellant: Thomas B. Buescher, Buescher, Goldhammer, Kelman and Dodge, PC, Denver, Colorado; H.W. Rasmussen, Sheridan, Wyoming. Argument by Mr. Buescher.

Representing Appellee: Jodi D. Shea and Michael G. Weisz, Pence and MacMillan, LLC, Laramie, Wyoming; Gregory A. Von Krosigk, Pence and MacMillan, LLC, Sheridan, Wyoming. Argument by Mr. Weisz.

Before KITE, C.J., and HILL, VOIGT, BURKE, and DAVIS, JJ.

BURKE, Justice.

[¶ 1] Appellant, Sheridan Fire Fighters Local No. 276, IAFF, AFL–CIO, CLC, filed suit in district court against the City of Sheridan alleging breach of their collective bargaining agreement. Local 276 claimed that the City breached the Agreement when it failed to provide pay raises to five firefighters who had qualified for a “step increase” in salary. The City contended that the raises were not required and that, under the terms of the Agreement, it retained discretion in the award of pay raises. Both parties filed motions for summary judgment, and the district court granted summary judgment in favor of the City. Local 276 challenges that decision in this appeal. We will reverse the district court's decision and remand for entry of summary judgment in favor of Local 276.

ISSUES

[¶ 2] Local 276 presents these issues:

1. Whether the Trial Court erred as a matter of law in determining that the provision regarding step increases in the 2010–2011 Collective Bargaining Agreement between the parties is not ambiguous, therefore not warranting the consideration of extrinsic evidence.

2. Whether the Trial Court erred as a matter of law in concluding that the provisionregarding step increases in the 2010–2011 Collective Bargaining Agreement between the parties unambiguously allowed the City to unilaterally decide not to pay out step increases.

The City's statement of the issues is as follows:

I. Whether a collective bargaining agreement is ambiguous as to qualification for a “step” increase when the collective bargaining agreement contains the parties' express agreement that the City retained the power to determine all employee qualifications.

II. Whether an implied term can be added to a collective bargaining agreement when doing so would violate statutory budgeting provisions.

III. Whether an integral and material item such as a guaranteed pay raise can be added to a collective bargaining agreement by implication and without additional consideration therefore, and assuming arguendo such a material term can be added by implication would such an amendment be in contravention of Wyoming law concerning the contracting ability of a governing body.

FACTS

[¶ 3] Local 276 and the City have been parties to annual collective bargaining agreements for more than thirty years. The collective bargaining agreement now at issue became effective on July 1, 2010, and expired on June 30, 2011. It covered all full-time firefighters and medical personnel of the Sheridan Fire–Rescue Department. It covered a broad array of employment-related topics, including work hours, vacations, sick leave, holidays, uniforms and clothing allowances, residency requirements, and medical insurance. In the article entitled “Wages,” the Agreement contained a detailed table setting forth pay grades for the various positions, and a range of salaries or “steps” for each pay grade.¹ The basic thrust of the pay grade and step table was, as explained by the City, “if a firefighter moves up one step or one grade, he or she will get a pay raise.”

[¶ 4] Facing budget issues in 2010, the City Council voted to freeze the salaries of all City employees. In a memorandum dated September 27, 2010, the City's Human Resources Director and the Fire Chief informed all fire department personnel that,

Due to the continued decrease in sales and use tax revenue as a result of the economic downturn that affects general fund expenditures, the City is suspending the 5% annual step increases for those employees who are not stepped out.² This suspension is in effect for the fiscal year beginning July 1, 2010.

Local 276 objected. The Union contended that, under the collective bargaining agreement, every covered employee who received a satisfactory performance rating would automatically move up one step, and thereby get a pay raise. It identified five firefighters who had received satisfactory evaluations and were not “stepped out,” and claimed that the City owed them additional pay in the total amount of $6,651.78. Following the procedures set forth in the collective bargaining agreement, Local 276 filed a grievance with the City on behalf of the five employees. The City denied the grievance, maintaining that the collective bargaining agreement “does not contain any requirement for ... mandatory 5% annual wage increases.” It asserted that the City was “in a state of financial crisis,” and could not afford “to give any raise to any City employee.”

[¶ 5] After the grievance was denied, Local 276 filed a complaint against the City in district court, claiming breach of the collective bargaining agreement. Both parties moved for summary judgment. In support of its motion, Local 276 presented evidence that the consistent practice under previous collective bargaining agreements was that employees who received satisfactory performance ratings automatically received salary increases. It also provided evidence demonstrating that, when the City wanted to freeze salaries in the past, it negotiated with Local 276 to include language in the Agreement specifically allowing for a pay freeze. Local 276 recognized that this evidence was extrinsic to the contract, but asserted that the evidence was admissible and should be considered because the collective bargaining agreement was ambiguous.

[¶ 6] The City contended in its summary judgment motion that the Agreement was clear and unambiguous, and did not mandate automatic salary increases. It asserted that the extrinsic evidence offered by Local 276 was inadmissible, and could not be used to contradict the unambiguous collective bargaining agreement. In addition, the City relied on Mariano & Assocs., P.C. v. Board of County Comm'rs, 737 P.2d 323, 331–32 (Wyo.1987) to assert that Wyoming law prohibited the City Council from contracting away the discretion of future councils. Because the City could not lawfully agree to automatic raises in the future, it claimed that the collective bargaining agreement could not be interpreted to mandate automatic raises.

[¶ 7] After considering the competing summary judgment motions, the district court issued a two-page order containing these findings and conclusions:

1.) The contract is silent on the issue of step increases.

2.) The contract is not ambiguous because of this silence and, therefore, the consideration of extrinsic evidence is not permitted.

3.) The Court rejects the City's argument under the Mariano Doctrine.

4.) The Court rejects the City's argument of failure of consideration.

5.) The City of Sheridan, Wyoming is entitled to summary judgment.

On this basis, the district court denied Local 276's motion for summary judgment, and granted summary judgment to the City. Local 276 appealed that decision.

STANDARD OF REVIEW

[¶ 8] Because summary judgment involves a purely legal determination, we undertake de novo review of a trial court's summary judgment decision. Glenn v. Union Pacific R.R. Co., 2008 WY 16, ¶ 6, 176 P.3d 640, 642 (Wyo.2008).

Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. W.R.C.P. 56(c); Metz Beverage Co. v. Wyoming Beverages, Inc., 2002 WY 21, ¶ 9, 39 P.3d 1051, 1055 (Wyo.2002). “A genuine issue of material fact exists when a disputed fact, if it were proven, would establish or refute an essential element of a cause of action or a defense that the parties have asserted.” Id.

Jacobs Ranch Coal Co. v. Thunder Basin Coal Co., LLC, 2008 WY 101, ¶ 8, 191 P.3d 125, 128–29 (Wyo.2008).

DISCUSSION

[¶ 9] “Our purpose in interpreting any contract is to ascertain the true intent of the parties.” Sutherland v. Meridian Granite Co., 2012 WY 53, ¶ 8, 273 P.3d 1092, 1095 (Wyo.2012).

One of the “settled rules of contract interpretation” is to “begin with the language of the contract.” Wyoming Bd. of Land Comm'rs v. Antelope Coal Co., 2008 WY 60, ¶ 8, 185 P.3d 666, 668 (Wyo.2008).

[T]he words used in the contract are afforded the plain meaning that a reasonable person would give to them. Doctors' Co. v. Insurance Corp. of America, 864 P.2d 1018, 1023 (Wyo.1993). When the provisions in the contract are clear and unambiguous, the court looks only to the “four corners” of the document in arriving at the intent of the parties. Union Pacific Resources Co. [ v. Texaco], 882 P.2d [212,] 220 [ (Wyo.1994) ]; Prudential Preferred Properties [ v. J and J Ventures], 859 P.2d [1267,] 1271 [ (Wyo.1993) ]. In the absence of any ambiguity, the contract will be enforced according to its terms because no construction is appropriate. Sinclair Oil Corp. v. Republic Ins. Co., 929 P.2d 535, 539 (Wyo.1996).

Amoco Prod. Co. v. EM Nominee Partnership Co., 2 P.3d 534, 540 (Wyo.2000).

Hunter v. Reece, 2011 WY 97, ¶ 17, 253 P.3d 497, 501–02 (Wyo.2011).

[¶ 10] When the contract is ambiguous, however, extrinsic evidence and rules of contract construction may be used in an effort to ascertain the parties' intention. Davison v. Wyoming Game and Fish Comm'n, 2010 WY 121, ¶ 27, 238 P.3d 556, 565 (Wyo.2010). “An ambiguous contract ‘is an agreement which is obscure in its meaning, because of indefiniteness of expression, or because a double meaning is present.’ ” State Farm Fire and Casualty Co. v. Paulson, 756 P.2d 764, 766 (Wyo.1988), quoting Bulis v. Wells, 565 P.2d 487, 490 (Wyo.1977). Whether a contract is...