Margie Reliford, Administratrix of the Estate of Henderson G. Reliford, Deceased v. Eastern Coal Corporation

260 F.2d 447, 42 L.R.R.M. (BNA) 2526, 1958 U.S. App. LEXIS 5104

• Court: Court of Appeals for the Sixth Circuit
• Decided: November 10, 1958
• Docket: 13284_1
• Status: Published

Opinions

ALLEN, Circuit Judge.

This appeal attacks a judgment of the District Court entered in an action based upon a contract executed July 5, 1941, by the United Mine Workers, hereinafter called UMW, and defendant Eastern Coal Corporation, hereinafter called Eastern, which covered the rights of all miners employed by Eastern. Plaintiff’s decedent, hereinafter called Reli-ford, worked in Eastern’s coal mine at Stone, Pike County, Kentucky, from July 7, 1936, until June 28, 1951. During the entire time, as required by the contract between UMW and Eastern, Reliford was a member of UMW and that union was his bargaining agent. He filled various mine occupations, such as motorman, boom man, and for a number of years was “shooting” coal. On June 28, 1951, Reli-ford retired because he was advised by several doctors that he had contracted silicosis.

The contract, executed July 5, 1941, between The Operators Association of The Williamson Field, of which Eastern was a member, and the local and international unions UMW, covered the general field of problems between labor and management in the coal industry. While it was denominated “Wage Agreement,” it contained detailed provisions not only for wages but also for numerous subjects, such as management of mines, preparation of coal, safety practices, duties of engineers and pumpers, seniority, holidays, and adjustment of house rents. It contained a no-strike provision under which the miners were individually obligated to assist in preventing local strikes.

The particular provision involved herein required the employer to provide its employees with the benefits of the Kentucky Workmen’s Compensation Act. In 1941 in Kentucky these benefits did not cover occupational diseases. However, in 1944 the Workmen’s Compensation Act was amended to provide that in silicosis cases employers and employees could voluntarily subject themselves to the Act by filing a joint, voluntary application with the Workmen’s Compensation Board, KRS 342.005(2). On July 1, 1947, the wage agreement of Eastern and the unions was amended to conform to the change in the statute and the provision obligating employers to provide the benefits of the Act to employees was changed to read as follows:

“Workmen’s Compensation and Occupational Diseases”

“Each Operator who is a party to this Agreement will provide the protection and coverage of the benefits under Workmen’s Compensation and Occupational Disease Lavra, whether compulsory or elective, existing in the states in which the respective employees are employed. Refusal of any Operator to carry out this direction shall be deemed a violation of this Agreement. Notice of compliance with this section shall be posted at the mine.”

The situation that resulted for employees was that if they registered under the Workmen’s Compensation Act they were automatically protected as to accidental injuries or death. As to disability or death resulting from silicosis, however, the filing of the joint, voluntary application by both employer and employee was an indispensable prerequisite to securing the benefits of the Act. KRS 342.005. In a silicosis case, absent the election by either the employer or the employee to operate under the Act, the Workmen’s Compensation Board had no jurisdiction. The fact that the application was voluntary left the claimant who asserted that he was suffering from an occupational disease free, either to sue at common law subject to the usual defenses of contributory negligence, the fellow-servant rule, and assumption of risk, or to proceed under the Workmen’s Compensation Act. In 1956 this section was amended in material respects. Some of these amendments are considered in the ruling upon the petition for rehearing.

In adoption of this contract each party, if both elected to comply with the amended Act, obtained a substantial advantage as to claims arising from silicosis. The employer would not be subject to the possible burden of a large recovery. It would be relieved of further liability. KRS 342.015(1). The employee would have the advantage of a swifter and less technical remedy than that given by litigation at common law, although he would also have the possibility of a smaller recovery. There thus was a mutual advantage and consideration for the employer’s agreement to provide the benefits of the Workmen’s Compensation Act as to silicosis for all employees.

The contract covering silicosis was executed July 1, 1947. At no time prior to March 1, 1952, did Eastern elect to operate under the amended statute nor did it post any notice that it had so elected. On that date it addressed a letter to the Workmen’s Compensation Board of Kentucky in which it stated that it voluntarily subjected itself to the provisions of KRS 342.316. Possibly this letter, so long delayed, substantially complied with the statute (see KRS 342.390) but it did not comply with the contract. Notice of the employer’s letter was not posted at the mine nor served upon Reliford or the UMW agent who was urging Reli-ford’s claim with Eastern’s claim agent.

It is contended that Reliford did not give notice of his disability within the time limitations of various provisions of the applicable statute. The District Court so held. KRS 342.005(2) and KRS 342.316(2), under familiar rules, are read into and become a part of the contract. However, in certain respects we think the statute has been misinterpreted on the question of notice. The paragraph cited requires that notice of disability or death due to silicosis be given “the employer” as soon as practicable after the employee has knowledge and requires that claim be made “upon the employer” within three years from the last injurious exposure to silica dust. Unless such notice is given, right to compensation for silicosis is forever barred.

Reliford, within a short time after he left Eastern’s employ, was examined by three physicians and X-rayed at four hospitals. He was told by all doctors that he was suffering from silicosis. Prompt notice of this fact was given to Eastern by Reliford himself, who talked personally with Eastern’s claim agent a number of times. His claim upon the employer was supported by UMW’s agent who, as the District Court stated, “importuned the defendant in behalf of the plaintiff.” During 1951, Eastern arranged to have Reliford take a physical examination with its own doctor, who reported that Reliford did not have silicosis. At the hearing herein the company doctor stated under oath that Reliford’s symptoms, as shown by various X-rays introduced in evidence, taken in 1951, were consistent with the first stages of the disease. Eastern’s agent, after receiving a number of letters from the UMW agent, in a letter sent October 23, 1952, refused Reliford’s claim on behalf of Eastern. The letter did not rely upon the point that the claim was not timely filed, but merely declared that Reliford was not disabled because of silicosis. When the letter of rejection from Eastern’s claim agent was sent the one year provided for asking a hearing before the Workmen’s Compensation Board had already expired. KRS 342.270.

At a point not definitely fixed in time Reliford’s attorney made application to the Workmen’s Compensation Board of Kentucky, but was informed by the Board that it did not have jurisdiction because Eastern had not filed an election to operate under the silicosis provision of the Workmen’s Compensation Act. The action of the Workmen’s Compensation Board in refusing to take jurisdiction of the case is in accord with Kentucky decisions under KRS 342.005 (2). The Court of Appeals of Kentucky under this provision holds that if either the employer or employee does not manifest his election in accordance with the terms of the statute they are not applicable, even though both intended to operate and believed they were covered. McNeese Construction Co. v. Harris, Ky., 273 S.W.2d 355. Both employer and employee had to register. McCune v. Wm. B. Pell & Bros., 192 Ky. 22, 232 S.W. 43. Reliford therefore took no further steps before the Workmen’s Compensation Board and this action was filed March 6, 1956. On April 8, 1957, plaintiff died of silicosis and his wife, Margie Reliford, as administratrix of plaintiff’s estate, was substituted in the action.

The District Court denied relief and dismissed the complaint for two principal reasons. One, it held that plaintiff and defendant were under an equal obligation to enter into the voluntary joint application in writing required under KRS 342.-316 and that, since plaintiff had failed to make application for benefits of the statute, defendant was not bound by its contract. Two, the court also held that Reliford’s claim was barred by the one year provision of the statute of limitations applicable to personal injury.

We think that ReHford’s obligation under this record was not equal to that of Eastern. Eastern, in an express written agreement intended to apply to hundreds of employees, had promised that it would “provide” the protection and coverage of the benefits under the Workmen’s Compensation and Occupational Diseases Law, whether compulsory or elective. The indispensable first step in fulfilling its agreement was that Eastern itself should elect to be governed by the silicosis provisions of the Workmen’s Compensation Act. A statutory form was provided for the employer for that purpose. KRS 342.390. Eastern could not obtain the result that it had promised unless and until it applied for coverage under the occupational diseases provisions of the Workmen’s Compensation Act. If Reliford did not join in the election, Eastern would be released from its promise as to Reliford. But Eastern was bound under the contract to attempt to perform its positive obligation.

The District Court held in effect that, since Reliford had not filed his election after being apprised of his physical condition, Eastern was released from the necessity of making timely election. We think this ruling is erroneous. Under the contract Eastern was placed under a positive obligation by its promise to several hundred employees to proceed under the Workmen’s Compensation statute immediately after July 1, 1947. The way to proceed was promptly to file an election to operate under the Act.

Moreover, Reliford had already performed his essential obligations under the contract. He had joined the union and in so doing had assented to the manifold provisions of the contract which would govern his working conditions, including even the rent that he might pay for housing, and an obligation to help prevent local strikes.

Under the silicosis statute, KRS 342.-005(2), Reliford was not required to file his election (if he did elect), first or simultaneously with Eastern. The use of the words “joint, voluntary application” in 342.005(2) does not affect this conclusion.

The statute does not contemplate simultaneous election by employer and employee. Neither the word “joint,” which Webster defines as “united; combined,” prescribes the precise time at which the union or combination shall take place, nor is the time elsewhere stated. The form required of the employer under KRS 342.390 states “This election is effective as of the day of......and covering (here insert name of industry, business or operation on which the election is made).” This form contemplates an election which shall cover not merely one controversy between an employer and one employee, but a number of controversies between the employer and all his employees. It is filed by the employer when he subjects himself to the Act. But the individual employees will hardly have silicosis simultaneously with the employer’s election nor simultaneously with each other. Thus, in this case, if Eastern, as it promised, had subjected itself to the Act within a month of the execution of the contract of July 1, 1947, Reli-ford could not have joined in the election at that time for he did not contract silicosis until 1951.

“Joint” in the statute means that the employee who has contracted silicosis, if he chooses, shall join in electing to proceed under the Act to which the employer has already subjected himself. There may be years between the act of the employer and the act of the employee, but when the election is filed by the employee, as to him it becomes “joint.”

Eastern prevented any joint election by Reliford (1) by not filing an election in accordance with its promise prior to Reliford’s contracting silicosis; (2) by not notifying Reliford, either by posting at the mine or other notice, when it did file. It follows that neither under the contract nor under the statute had Reliford failed to perform. Since no time for performance was specified in the labor contract Eastern was required to file its election within á reasonable time. Four and one-half years we think was not a reasonable time in which to fulfill a promise of this nature.

The contract declares that refusal “shall be deemed a violation of this Agreement.” Eastern contends that it did not refuse to carry out the contract, that there could be no refusal without demand, and that neither Reliford nor the union demanded performance. We think Eastern’s failure for four and one-half years from July 1, 1947, to March 1, 1952, to take the steps required by the contract was tantamount to a refusal. While an obligation for the payment of money in certain cases arises only upon demand, when a party is obligated to perform a certain act or acts, failure to act is often held equivalent to a refusal. As held in Hicks v. Conn, 270 Ky. 344, at page 348, 109 S.W.2d 811, 813:

“The word ‘refuses,’ like many other words in our language, is elastic and is of somewhat varied signification according to the context in which it is found and the nature of the subject-matter to which it refers. Refusal usually implies a previous demand or request or the existence of circumstances equivalent thereto. But, as stated in Mackey v. United States, 6 Cir., 290 F. 18, to ‘refuse’ does not necessarily imply to deny deliberately a previous demand. One of the general definitions of ‘refuse’ is to ‘withhold.’ Webster’s New International Dictionary. The word has been given judicial construction as being a synonym of failure. We held in Thomas v. Commonwealth, 74 S.W. 1062, 25 Ky.Law Rep. 201, that it was not error to instruct that, if defendant ‘failed’ to leave the house of deceased, the latter had the right to use such force as was necessary to eject him instead of using the word ‘refused.’ The failure to give bond in a bastardy proceeding was held equivalent to a refusal to do so. Rudulph v. State, 16 Ga.App. 353, 85 S.E. 365. Where a municipal board took no action upon a claim against the county, it was held to be a refusal to allow it. Board of Supervisors of Jefferson County v. Lessing, 129 Miss. 1, 91 So. 697. Failure to file a corporation’s report in time required by law constitutes a refusal to do so. Sherman v. Finance Corporation, 78 Colo. 330, 241 P. 722. The failure of a property owner to lay sidewalks within the time prescribed in an order requiring their construction and with which he had been served was held to amount to a refusal within the meaning of the statute providing that the city could have same done if the owner refused to lay the sidewalk. City of Bluefield v. McClaugherty, 64 W.Va. 536, 63 S.E. 363.”

See also Ennis v. Adkins, 274 Ky. 121, 118 S.W.2d 175.

Under the contract demand was required neither from Reliford nor from the union in order to establish violation of the contract by Eastern.

Eastern was also in default in carrying out the second important provision of the paragraph involved. It failed to fulfill its promise to post “at the mine” notice of compliance with this section of the contract. It did not, as it had under the original Workmen’s Compensation Act, make it easy for employees to signify their acceptance of the statute by signing the proper form of assent.

The purpose of contracting for posting at the mine notice of the employer’s compliance, that is, of its election to be subject to the silicosis Act, was not only to inform the employees of the compliance, but also to alert the employees to the action required from individual miners. The notice, properly posted, would have put the employees upon inquiry as to their rights and obligations. This would have secured the cooperation between employer and employee called for by KRS 342.316. The notices and forms arranged to be put out by the Workmen’s Compensation Board would naturally have been made available at the plant. KRS 342.430.

If Eastern had posted notice as required by the contract this case might have had a very different history. As a result of Eastern’s complete failure to perform from July 1, 1947, to March 1, 1952, neither its own claim agent nor the union agent proceeded in Reliford’s case on the basis of the application of the silicosis provisions of the Workmen’s Compensation Act. Eastern’s agent said he did not know of the posting of notice under the agreement. So far as this record shows Eastern, after its communication of March 1, 1952, to the Workmen’s Compensation Board, said nothing either to Reliford or to his union representative to the effect that Eastern had subjected itself under the Act. The record shows without dispute that both specific provisions of the. contract were breached by Eastern. When, in March, 1952, Eastern decided to take action, it wrote an informal letter to the Workmen’s Compensation Board to that effect. Reli-ford’s claim had then been pending in its office since the summer of 1951. Eastern sent a copy of this letter to the executive secretary of The Operators’ Association, to its claim agent at the mine, and to the general manager at Eastern. This record shows that the matter was never called to Reliford’s attention nor to the attention of the union agent negotiating with Eastern’s claim agent. This was not the equivalent, either in purpose or effect, of a proper posting of notice at the mine that Eastern was subjecting itself to the silicosis provisions of the law. Eastern’s excuse for the long delay, made by its president, is that it “overlooked” the provision of the contract involved here. This constitutes no legal justification.

The District Court held that Reliford was barred under the silicosis statute because he did not make a claim before the Workmen’s Compensation Board within one year of his having silicosis and within three years of his last injurious exposure. But these provisions have no application here because, as the Court of Appeals of Kentucky held in McNeese Construction Co. v. Harris, supra [273 S.W.2d 357] “If either the employer or the employee rejected or did not manifest his election in accordance with the terms of the statute, they were not applicable. * * * ”

A more difficult question is presented as to the holding that the case is barred because it is an action for personal injury and the Kentucky-one year statute applies. Injuries to the person which are joined with or grow out of certain forms of contract have been held by the Court of Appeals of Kentucky to be barred under this provision of the statute of limitations. KRS 413.140. This is under the general rule that all actions, the real purpose of which is to recover for an injury to the person, whether based upon contract or tort, are governed by the statute of limitations which limits the time in which actions “for an injury to the person” may be brought. This doctrine has been applied in a number of Kentucky decisions. Howard v. Middlesborough Hospital, 242 Ky. 602, 47 S.W.2d 77; Scott Tobacco Co. v. Cooper, 258 Ky. 795, 81 S.W.2d 588, including a silicosis case, Columbus Mining Co. v. Walker, Ky., 271 S.W.2d 276. The same conclusion was reached by this court in Finck v. Albers Super Markets, Inc., 6 Cir., 136 F.2d 191, 193, construing the Kentucky statute of limitations for damages growing out of physical injuries. Unquestionably the complaint, with its reliance upon the express contract and its allegations, sustained by the record, that Eastern has violated this agreement, is an action on a contract, but Reliford prays for money recovery for disability arising from silicosis.

We see considerable difference between the situation presented here and those presented in cases of claimed malpractice or negligence which were the gist of the several actions as in the cases cited. Reliford had performed under the contract and might well have filed an election to operate under the Act if he had received notice, through posting at the mine or otherwise, that Eastern had elected so to operate. Reliford’s futile inquiry to the Workmen’s Compensation Board certainly indicated his desire to take advantage of the Workmen’s Compensation procedures. Due to Eastern’s failure until March 1, 1952, to elect and its failure at any time here involved to post notice at the mine as required under the contract, Reliford was misled by Eastern as to his remedy. When on March 1, 1952, Eastern mailed its letter of election to subject itself to the silicosis provisions of the Workmen’s Compensation Act the bar of the one-year limitation had not yet fallen. On October 23, 1952, the date when Eastern’s claim agent denied the claim made to Eastern, the bar of the one-year statute had fallen. The inquiry that Reliford’s counsel made to the Board was made to a Board without jurisdiction (1) because Eastern had failed to make timely election to come under the Act; (2) because Eastern had failed to notify Reliford of its election in time for him to act.

We think that the contract between Eastern and its employees involved more than a mere action for personal injuries. It involved the adoption at the Hardy mine of a particular method of dealing with a situation vital to labor and management. The method of swift and flexible administrative hearing made available in occupational disease cases was planned to supersede the clumsy process of the common law and the unsatisfactory use of continually delaying negotiations between the union steward and company claim agent, such as those demonstrated herein. Moreover, the purpose of the Workmen’s Compensation enactments included, so far as practicable, the elimination of common-law actions for personal injury growing out of industrial operations. 58 Am.Jur., Workmen’s Compensation, 572, Section 2. Reliford’s claim was not only for the modest compensation provided by the Act. It was for medical, surgical and hospital services which Eastern would have been required to afford Reliford after it complied with the Act and Reliford joined. KRS 342.020. It was for the payment of the moderate recovery allowance under the Act, not in a lump sum after the miner had died, but in weekly payments beginning on the first payday after seven days after the occupational disease disability. KRS 342.040. It was for the right to have a hearing of the case in a specific nontechnical manner before a Board specially chosen for this purpose, which would control and make allowance for attorneys’ fees. Reliford was seeking as to himself the enforcement of the contract solemnly entered into by Eastern for the benefit of several hundred men at the mine and also for Reliford, a contract not carried out for at least four and one-half years.

We think the employer’s admitted conduct amounted to a breach of the collective bargaining contract which had been made for employee Reliford’s benefit, and that payments which would have accrued under the Workmen’s Compensation Act if the employer’s obligation had been performed provide a minimum measure of provable damages proximately resulting from the breach. Therefore, the 15-year statute of limitations applies.

The instant case was tried before Textile Workers Union of America v. Lincoln Mills of Alabama, 353 U.S. 448, 77 S.Ct. 923, 1 L.Ed.2d 972, decided June 3, 1957, was announced. A previous Supreme Court decision, Association of Westinghouse Salaried Employees v. Westinghouse Electric Corporation, 348 U.S. 437, 75 S.Ct. 488, 99 L.Ed. 510, decided March 28, 1955, had held that the federal court did not have jurisdiction of an action for unpaid salaries claimed to be due under a collective bargaining agreement.

We recognize that the Lincoln Mills ease, supra, held that an action by a union to compel specific performance of an arbitration clause in a collective bargaining agreement constitutes an action to enforce federal rights and that the substantive law to be applied under Section 301(a) of the Labor Management Relations Act of 1947, 29 U.S.C.A. § 185(a) is federal law. If, under the doctrine of the Lincoln Mills case, federal substantive law for the enforcement of collective bargaining contracts, fashioned “from the policy of our national labor laws,” is properly to be applied in the case at bar instead of the contract law of the state, our conclusion would not be changed. [See 71 Harv.L.Rev. 1169 (1958).]

The case turned upon the statute of limitations which, although it was the statute of Kentucky, was required by long settled federal law to be resorted to herein.² In the absence of federal limitations established by Congress, the Supreme Court of the United States has repeatedly held that the state statute of limitations controls. Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U.S. 390, 27 S.Ct. 65, 51 L.Ed. 241; Rawlings, Receiver, v. Ray, 312 U.S. 96, 61 S.Ct. 473, 85 L.Ed. 605; Cope v. Anderson, 331 U.S. 461, 67 S.Ct. 1340, 91 L.Ed. 1602.

Since the Congress embodied in Section 301(a) of the Labor Management Relations Act no statute of limitations, under the established federal rule the appropriate state statute would in any event be applied. The District Court’s error was not in applying the Kentucky statute but, in our opinion, for reasons given above, in applying the one-year limitation covering injuries to the person rather than the fifteen-year limitation applicable to written contracts.

The judgment of the District Court is reversed and the case is remanded for further proceedings in accordance with this opinion.

2 . Bridges v. F. H. McGraw & Company, Ky., 302 S.W.2d 109, and Dick v. International Harvester Company, Ky., 310 S.W.2d 514, do not involve any question of limitations. The Dick case also construes an amendment to the Kentucky Workmen’s Compensation Act enacted subsequently to the sections involved herein.