Carpenters 46 Northern California Counties Conference Board v. Zcon Builders, Individually and D/B/A Sharon Hill Corporation Sharon Hill Corporation

96 F.3d 410, 96 Daily Journal DAR 11344, 96 Cal. Daily Op. Serv. 6935, 153 L.R.R.M. (BNA) 2321, 1996 U.S. App. LEXIS 24317, 1996 WL 523695
CourtCourt of Appeals for the Ninth Circuit
DecidedSeptember 17, 1996
Docket95-15124
StatusPublished
Cited by28 cases

This text of 96 F.3d 410 (Carpenters 46 Northern California Counties Conference Board v. Zcon Builders, Individually and D/B/A Sharon Hill Corporation Sharon Hill Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Carpenters 46 Northern California Counties Conference Board v. Zcon Builders, Individually and D/B/A Sharon Hill Corporation Sharon Hill Corporation, 96 F.3d 410, 96 Daily Journal DAR 11344, 96 Cal. Daily Op. Serv. 6935, 153 L.R.R.M. (BNA) 2321, 1996 U.S. App. LEXIS 24317, 1996 WL 523695 (9th Cir. 1996).

Opinions

Opinion by Judge WINMILL; Dissent by Judge PREGERSON.

WINMILL, District Judge:

Introduction

Appellant Sharon Hill Corp. appeals from a decision of the U.S. District Court, Northern District of California, granting summary judgment on a petition to confirm an arbitration award. The arbitration was undertaken pursuant to a collective bargaining agreement between Zcon Builders and Appellee Carpenters 46 Northern California Counties Conference Board (“Carpenters”). Sharon Hill argues that it was never given notice of the arbitration proceedings and is not the alter ego of Zcon Builders, and thus the arbitration award cannot be binding upon it. We reverse and remand.

Facts and Prior Proceedings

Zcon Builders is a licensed contractor, and a member of the Associated General Contractors of California, Inc. By virtue of its membership, Zcon became a signatory to the Carpenters Master Agreement (hereinafter the “Collective Bargaining Agreement” or “Agreement”). Zcon was incorporated in California in 1982, with Dennis Keating and Charles Zakskorn as its only shareholders and directors. Zcon’s only business has been general construction in California. Sharon Hill was incorporated in Nevada in 1989, and was primarily engaged in property development in Nevada. Zakskorn and Keating collectively owned 50% of the outstanding stock, with the balance owned by unrelated third parties. Sharon Hill was not a signatory to the Collective Bargaining Agreement, nor was it a member of a signatory employer association.

On April 6, 1993, the Carpenters filed a grievance which sought full compliance with the Agreement, payment of wages and fringe benefits, and an audit of both Zcon and Sharon Hill. Notice of the grievance and the hearing was sent to “Zcon Builders dba Sharon Corp. dba Windwood, Inc.” at the address where both Zcon and Sharon Hill were headquartered. The notice was sent to Keating, who was the registered agent for service of process for both Zcon and Sharon Hill. Keating attended the hearing, but argued that he was appearing only on behalf of Zcon.1 An arbitration award was entered against Zcon and Sharon Hill. Thereafter, the Carpenters filed a petition to confirm the award in the district court, as well as a motion for summary judgment, which the court granted. Sharon Hill appeals the district court’s grant of summary judgment.2

Discussion

1. Notice of the grievance proceeding

Sharon Hill first argues that it .did not receive adequate notice of the arbitration. We disagree. The arbitrator did not directly address the issue of the notice provided to Sharon Hill. The issue was, however, clearly raised before the arbitrator, and the arbitrator’s decision implicitly encom[413]*413passes a finding that Sharon Hill had received at least constructive notice of the grievance and hearing. In McKesson Corp. v. Local 150 IBT, 969 F.2d 831 (9th Cir.1992), this Court considered whether a procedural issue, implicitly submitted to the arbitrator, but not expressly decided by the arbitrator, could stand. The court stated:

Because an arbitrator has no obligation to explain the basis of his decision, he need not make an express finding on every procedural matter that bears on his award. Faced with an award that contains no discussion of a procedural issue that has, either explicitly or implicitly, been submitted to the arbitrator, we will presume that the arbitrator’s decision to issue the award carries with it whatever procedural ruling was necessary to permit its issuance.

Id. at 834. Although the arbitrator did not specifically address the issue, McKesson allows us to presume that he made the necessary decision in order to issue the award.

We next consider the district court’s treatment of the notice issue during the confirmation proceedings. At the hearing before the district court, Sharon Hill argued the issue of notice almost exclusively. In announcing its decision, however, the district court did not specifically address that issue. Instead, the court concluded that it was required by our decision in Gateway Structures v. Carpenters 46 N. Cal. Counties Conf. Bd., 779 F.2d 485, 489 (9th Cir.1985), to give broad deference to the arbitrator’s findings on all issues. E.R. at 281.

Since the Labor Management Relations Act of 1947 was codified in 29 U.S.C. § 185, the courts have fashioned a policy of extremely limited review of an arbitrator’s decision. This is a direct consequence of the fundamental principles surrounding the concept of arbitration. The Act reflects a “decided preference for private settlement of labor disputes without the intervention of government....” United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 37, 108 S.Ct. 364, 370, 98 L.Ed.2d 286 (1987). The Misco ease also noted that were the courts to readily intervene, “the speedy resolution of grievances by private mechanisms would be greatly undermined.” Id. at 38, 108 S.Ct. at 371. In furtherance of these principles, the courts have adopted a policy of deference to the arbitrator’s factual and legal findings. This Circuit has held that “[j]udicial scrutiny of an arbitrator’s decision is extremely limited. The arbitrator’s factual determinations and legal conclusions generally receive deferential review as long as they derive their essence from the [collective bargaining agreement.].” Sheet Metal Workers Int’l Assoc. v. Arizona Mechanical & Stainless, Inc. 863 F.2d 647, 653 (9th Cir.1988).

In addition to the benefit of limited review, labor arbitrations do not need to provide the same procedural protections as do judicial proceedings. However, an arbitrator must grant the parties a fundamentally fair hearing. Sunshine Mining Co. v. United Steelworkers, Local 5089, 823 F.2d 1289, 1295 (9th Cir.1987). A hearing is fundamentally fair if the minimal requirements of fairness — adequate notice, a hearing on the evidence, and an impartial decision by the arbitrator — are met. Id. (citing Ficek v. Southern Pacific Co., 338 F.2d 655, 657 (9th Cir.1964), cert. denied, 380 U.S. 988, 85 S.Ct. 1362, 14 L.Ed.2d 280 (1965)). Although deference must be given to an arbitrator’s decisions concerning procedural issues, it is generally recognized that the courts may consider a claim that a party to an arbitration has been denied a fundamentally fair hearing. Bowles Financial Croup v. Stifel, Nicolaus & Co., 22 F.3d 1010, 1012-13 (10th Cir.1994). See also Forsythe Int’l, S.A. v. Gibbs Oil Co., 915 F.2d 1017

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96 F.3d 410, 96 Daily Journal DAR 11344, 96 Cal. Daily Op. Serv. 6935, 153 L.R.R.M. (BNA) 2321, 1996 U.S. App. LEXIS 24317, 1996 WL 523695, Counsel Stack Legal Research, https://law.counselstack.com/opinion/carpenters-46-northern-california-counties-conference-board-v-zcon-ca9-1996.