Frazier v. Ford Motor Co.

112 N.W.2d 80, 364 Mich. 648, 1961 Mich. LEXIS 410
CourtMichigan Supreme Court
DecidedNovember 30, 1961
DocketDocket 72, Calendar 48,426
StatusPublished
Cited by18 cases

This text of 112 N.W.2d 80 (Frazier v. Ford Motor Co.) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Frazier v. Ford Motor Co., 112 N.W.2d 80, 364 Mich. 648, 1961 Mich. LEXIS 410 (Mich. 1961).

Opinions

Souris, J.

{dissenting). This matter is before us by claim of appeal from an order dismissing plaintiff’s declaration on defendants’ motions after answer but before trial on the merits.

Plaintiff had been employed by the defendant Ford Motor Company for 36 years when he was discharged for stealing company property. The labor union which represented defendant company’s employees filed a grievance in plaintiff’s behalf with the company and processed that grievance in conformance with the collective bargaining agreement then in force between the union and the company through all grievance procedures to and including a hearing-before the impartial umpire provided by the agreement for final arbitration of grievances. The umpire’s award was adverse to plaintiff.

Several years after the umpire’s adverse award, plaintiff made application for benefits under an agreement between the union and the company providing for monthly retirement benefits for qualified employees. The agreement included provision for payment of such benefits in the event of total and permanent disability, and it was plaintiff’s [650]*650claim that he was physically disabled from continued employment. The defendant retirement board denied plaintiff’s application on the ground that he was ineligible for benefits by virtue of his prior discharge by the defendant company.

Plaintiff’s declaration, as amended by leave of the trial court, seeks damages in assumpsit for loss of wages from the time of his discharge to the date he claims he became eligible for retirement benefits and for loss of retirement benefits from the date of his application therefor to the commencement of suit. Ancillary to the claim for money damages in assumpsit, plaintiff seeks a declaration of the extent of his rights under the agreement between the union and the defendant company providing for retirement benefits.

Plaintiff’s theory, as reflected in his amended declaration, is that his discharge by defendant company was wrongful because, contrary to the company’s claim, he did not steal its property and, indeed, was acquitted by a jury in a criminal case brought against him on that charge; that the umpire’s adverse determination is a nullity because of fraud, bad faith, and arbitrary action by the umpire in the conduct of the arbitration proceeding; that the defendant retirement board’s adverse determination of his application for retirement benefits is a nullity because it was based solely upon his wrongful discharge by defendant company; and that he is, therefore, entitled to back pay and to retirement benefits, past and future. In short, in order to assert his claims upon the employment contract and the retirement agreement, plaintiff sought to attack the umpire’s award collaterally on the ground of fraud, bad faith, and arbitrary action in this suit at law in assumpsit.

Dismissal of the amended declaration was based upon the trial judge’s determination that plaintiff’s allegations were either conclusionary in form or [651]*651otherwise legally insufficient as allegations of fraud, bad faith, or arbitrary action. It is evident from the opinions filed below that the trial judge approached his task on the premise that had plaintiff properly pleaded such conduct, his declaration would have set forth a cause of action cognizable at law. With this premise we do not agree.

An arbitration award, either at common law or as provided for by statute (CL 1948, § 645.1 et seq. [Stat Ann §27.2483 et seq.]), bars recourse to the courts for judicial determination of the dispute submitted to arbitration so long as the presumptively valid award is permitted to stand. “Courts of justice have long manifested a strong inclination to support the decisions of arbitrators, who are judges of the parties’ own choosing.” Fennimore v. Childs, 6 NJL 386. Werne1 puts it this way:

“A person who initiates arbitration under a collective agreement may not challenge the arbitrator’s jurisdiction after an adverse award and by recourse to judicial process remedy the identical grievance. * * *
“The general rule at common law is that an arbitration award, rendered under an agreement that it is to be final and binding, is not appealable to any court. However, there are certain exceptions. For example, where an award is obtained by fraud, where it is outside the scope of the submission, or where there is some collusion or other irregularity on the part of the arbitrators, a court may vacate an award.”

In short, arbitration awards are regarded as final and binding upon the parties as the judgment of a court.

We have found only one prior case before this Court in which a labor arbitration award was sought [652]*652to be avoided.2 But there have been many such cases involving commercial arbitration awards. Many of those prior cases involved statutory arbitration proceedings, but others were proceedings governed by the common law, as is this.3 In those cases, we have held that the power to vacate awards, on certain limited grounds, reposes in equity.

Port Huron & Northwestern R. Co. v. Callanan, 61 Mich 22, is a leading case on the subject. Chief Justice Campbell, writing for the Court, discussed vacation of arbitration awards in the following terms-(p 26) :
“There is power in a court of equity to relievo against awards in some cases where there has been fraud and misconduct in the arbitrators, or they have acted under manifest mistake, and perhaps in some defined and undefined cases. But it is evident that there are great objections to any general interference by courts with awards. They are made by a tribunal of the parties’ own selection, who are, usually at least, expected to act on their own view of law and testimony more freely and less technically than courts and regular juries. They are also generally expected to frame their decisions on broad views of justice, which may sometimes deviate from the [653]*653strict rules of law. It is not expected that after resorting to snch private tribunals either party may repudiate their action and fall back on the courts. And equity, on whatever pretext it may intervene in such cases, does so upon the reason that the tribunal has not really acted within the lines of the duty laid upon it, and has not in fact carried out the agreement under which it has obtained authority to proceed.”

In Palmer v. Patrons’ Mutual Fire Ins. Co., 217 Mich 292, a case bearing remarkable procedural similarity to the case at bar, plaintiff sought judgment in assumpsit for a loss on an insurance policy after an adverse arbitration award against him. Mr. Justice Steere, writing for the Court, said (p 299):

“In the instant case plaintiff submitted to an award and exhausted that remedy. Leaving the award against him standing, he commenced an action at law in assumpsit to recover on his policy of insurance, and when the award was interposed as a defense sought to attack it collaterally on the ground of fraud. This he may not do. His primary remedy is by direct proceedings against the award in a court of equity where rests special jurisdiction in matters of fraud, accident, mistake, et cetera.”

Quoted in the Court’s opinion in the Palmer Case (p 299) is the following from Michels v. Western Underwriters’ Ass’n,

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Bluebook (online)
112 N.W.2d 80, 364 Mich. 648, 1961 Mich. LEXIS 410, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frazier-v-ford-motor-co-mich-1961.