Tile, Marble, Terrazzo, Finishers, Shopworkers & Granite Cutters International Union v. Ceramic Tile Finishers Union, Local 25

972 F.2d 738
CourtCourt of Appeals for the Seventh Circuit
DecidedAugust 11, 1992
DocketNos. 90-3101, 90-3189
StatusPublished
Cited by1 cases

This text of 972 F.2d 738 (Tile, Marble, Terrazzo, Finishers, Shopworkers & Granite Cutters International Union v. Ceramic Tile Finishers Union, Local 25) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tile, Marble, Terrazzo, Finishers, Shopworkers & Granite Cutters International Union v. Ceramic Tile Finishers Union, Local 25, 972 F.2d 738 (7th Cir. 1992).

Opinion

RIPPLE, Circuit Judge.

This case involves an appeal and a cross-appeal from an order of the district court apportioning the assets of a local union after the local was put under trusteeship by its international. The Tile, Marble, Terrazzo, Finishers, Shopworkers and Granite Cutters International Union, AFL-CIO (the “TMT” or the “International”) contends that the court erred in finding that assets placed in a mortuary fund by Ceramic Tile Finishers Union, Local 25 (“Local 25” or “the Local”) were not assets within the scope of the trusteeship. The International also contends that the district court erred in upholding a payment by the Local to its attorney. The Local, in its cross-appeal, argues that the district court erred in finding that its one-half interest in its union hall is an asset covered by the trusteeship. For the following reasons, we affirm in part and vacate in part the judgment of the district court.

I

BACKGROUND

A. Facts

This case was tried to the bench, and the district court entered findings of fact and conclusions of law, as required by Fed. R.Civ.P. 52(a). Because neither party contests the accuracy of the district court’s findings of the basic facts, we accept them for the purposes of this appeal. Fed. R.Civ.P. 52(a) (“Findings of fact ... shall not be set aside unless clearly erroneous”); Forum Corp. of N. Am. v. Forum, Ltd,., 908 F.2d 434, 438 (7th Cir.1990); Jennings v. Tinley Park Community Consol. Sch. Dist. No. U6, 864 F.2d 1368, 1372-73 (7th Cir.1988). A summary of the facts found by the district court follows.

At all times material to this case, Local 25, which is based in Chicago, was affiliated with the International. Until October 1987, defendants Robert Douglas, Joseph Willekens, William Lichtenstein, John McKenna, and Donald Fischer were officers and executive board members of Local 25. Edward Miller, a nonparty to this suit, was the Local’s business agent. Since at least 1970, a number of officers and members of Local 25 believed that their interests would be better served by affiliating with another union, the International Union of Bricklayers and Allied Craftsmen (“the BAC”). Apparently, this view was shared by persons in other TMT-affiliated locals. See Tile, Marble, Terrazzo, Finishers v. Tile, Marble, Terrazzo, Helpers and Finishers Local 32, 896 F.2d 1404 (3d Cir.1990) (detailing the defection of the members of the Philadelphia and Harrisburg local from the TMT to the BAC).

Around August 1987, representatives of Local 25 and at least four other TMT locals met at Newark Airport with representatives of the BAC. During this meeting the BAC representatives stated that their union would not accept a local that sought as an organization to disaffiliate from the TMT and then to reaffiliate with the BAC. However, if individual members and officers chose to resign from the TMT, they would be accepted for BAC membership. The BAC would charter new locals for the former TMT members, if there were sufficient applications for membership in a particular place. If there were insufficient applications, those members who wished to switch to the BAC would be placed into existing BAC locals. One issue of concern was the disposition of the locals’ assets. It was feared that, when the membership left, these assets would become the property of the TMT, or would otherwise remain behind with the locals. Another concern was that the TMT would place the locals (and their assets) under trusteeship. Several possible ways to avoid the loss of these assets were discussed, including placing some or all of the locals’ assets in “mortu[741]*741ary funds” which would pay death benefits to the locals’ members’ survivors.

On September 14, 1987, the executive board of Local 25 held a regularly scheduled meeting. The minutes reflect that the board discussed disaffiliating from the International and joining the BAC. The board also voted to present several recommendations to the Local’s membership related to disaffiliating, including (1) paying $20,000 to the Local’s then attorney, Lawrence J. Weiner and (2) establishing a Mortuary Fund in the amount of $500 per member. The next evening, September 15, Local 25 held a regularly scheduled general membership meeting during which affiliation with the BAC was discussed. In this meeting, the membership unanimously voted to accept the minutes containing these recommendations to pay Weiner and to set up the Mortuary Fund. According to the district court the effect of this vote was to ratify and adopt the actions recommended by the executive board. Just before the membership meeting was to begin, the TMT International president, Gerald Bom-bassaro, and two International vice-presidents arrived at Local 25’s meeting hall. Bombassaro, who had travelled from Virginia, wanted to speak to the meeting about the BAC, and the effect of disaffiliating on existing collective bargaining agreements. The Local’s officers did not allow him to talk.

On October 3, 1987, Bombassaro filed charges under the International constitution, apparently as a first step towards putting Local 25 under the International’s trusteeship. On October 5, 1987, the Local made the $20,000 payment to Weiner that the membership had approved.1 On or about October 16th, an agreement setting up the Mortuary Fund was executed by its trustees, who were the six officers of Local 25, and some of whom are individual defendants in this suit. This agreement provided for the fund to have $117,500, of which $20,000 would be for legal and administrative fees, and $97,500 would provide a $500 contribution per member. On October 18, the International held a hearing on the International’s trusteeship in a Chicago-area hotel; although several of the Local’s officers were present in the building, they did not attend. On October 20th in the early afternoon, Bombassaro moved to put Local 25 under trusteeship by appointing a trustee and by removing all of the Local’s officers. Shortly after 3 p.m., Eastern time, Bombassaro arranged for mailgrams to be sent to the Local’s officers. The parties stipulate that, for the purposes of this litigation, this trusteeship was validly imposed.

Throughout this period, the Local officers/Mortuary Fund trustees had been arranging for the Local’s assets to be placed in the name of the Mortuary Fund. On October 15th, the day before the trust agreement was signed, defendant Robert Douglas contacted a securities brokerage firm and asked that the name on a certificate of deposit worth approximately $53,-000 be changed from Local 25 to the “Local 25 Mortuary Fund.” A representative of the firm advised Douglas that additional paperwork would be required to change the name, and Douglas provided this additional documentation by letter of October 27. The name on the account was changed shortly afterwards.

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