Porter v. General Boiler Casing Co.

Smith, J., delivered the opinion of the Court. We shall here hold that a trial judge erred in granting a motion for summary judgment in that he failed to note that inferences could be drawn from that which was before him contrary to the position of the party in whose favor summary judgment was entered. Thus, the matter could only be resolved by trial. Appellant, Richard M. Porter (Porter), was injured on the job while employed by appellee, General Boiler Casing Co., Inc. (General).

General has its headquarters in North Carolina. 1 It specializes in “lagging” boilers in power plants. (“Lagging” consists in covering a boiler with heat-insulating material.) It was a subcontractor in connection with the construction of the nuclear power plant at Calvert Cliffs in Calvert County. General wrote to Local Union No. 602 of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada ⁴⁰⁴ (AFL-CIO) (the union) on April 25,1978, requesting a supply of current reporting forms for that union together with “a copy of the Current Agreement.” The letter advised, “Our Company will begin work in your State in the near future and will have need of this information.” On May 21, 1974, it addressed another letter to the union stating that General was “a subcontractor for Bechtel Corporation at the Calvert Cliffs Nuclear Power Plant,” that the schedule called for it “to start on June 20, 1974,” and that General desired a copy of the local’s “current contract regarding wages, fringes, subsistence, if any, and reporting forms.” The then current contract of the union was supplied in each instance. This contract was one between the Mechanical Contractors D. C. Association, Inc., and the union covering the period September 1, 1972, through April 31, 1975.

This union had jurisdiction over steamfitters working in Calvert County. In July 1974 General sent a superintendent and an assistant superintendent to the Calvert Cliffs job site. In accordance with its usual practice of hiring through local unions in the area in which the current jobsite was located, workmen were hired by General through the union. Wages, both regular and overtime, were paid pursuant to the provisions of the collective bargaining contract previously forwarded to General.

General also paid money into various fringe benefit funds established by the union for its members, including health and welfare, pension, apprenticeship, industry, and vacation funds. Most of these contributions were not deducted from hourly wages of employees, but were amounts required by the terms of the collective bargaining agreement to be paid over and above such hourly wages. Porter was injured on the job. He sought and was awarded compensation under the Maryland Workmen’s Compensation Act.

Employers by the terms of the agreement with the union are required “to carry adequate workmen’s compensation insurance written in such a manner as to provide the same benefits as provided by the District of Columbia Workmen’s Compensation Act,” which is more generous in its provisions than the Maryland statute. Porter sued General in equity when he did not receive ⁴⁰⁵ compensation as specified in the District of Columbia law. He sought damages on the basis of the difference between the District of Columbia and Maryland rates for two periods of time. His final prayer was for “an order of specific performance requiring [General] to pay [Porter] what [had] accrued ... and to continue paying [Porter] at [the District of Columbia rate] until his temporary partial disability ceasefd].” The bill of complaint included an allegation that on the date of Porter’s injury General “was party to a valid and binding contract with Steamfitters Local Union # 602,” and that under “a so-called excess coverage agreement in effect on the date of [Porter’s] injury between [General] and the said union, of which [Porter] was at the time of his injury and still is a member, [Porter] became entitled to receive compensation payments at the same rates as if he was injured in the District of Columbia.” The answer of General denied all allegations in the bill of complaint other than the injury by Porter in the course of his employment.

General moved for summary judgment. In addition to the usual allegation “[t]hat there [was] no genuine dispute as to any material fact as to the issues giving rise to [the] Motion” and that General was “entitled to judgment as a matter of law,” the motion said that General was not a party to any contract with the union in question as alleged in the bill of complaint. Appended to the motion was an affidavit by General’s president saying that he was aware of all contracts between his company and labor unions; that his company was not a party to any contract with this particular union and had never been a party to such contract; that the union was based in the District of Columbia; that the union’s contract, as would appear by photostats attached, was with the Mechanical Contractors District of Columbia Association, Inc.; that General was not a signatory to the contract; that General had never been a member of the association; and “that at the time of [Porter’s] injury, he was employed by [General] solely for work in the State of Maryland, specifically on a project at Calvert Cliffs, Lusby, Maryland.” Porter immediately countered by serving notice of his intention to take the deposition of the comptroller of General. ⁴⁰⁶ Porter then petitioned for an extension until January 11,1978, in which to answer the motion for summary judgment. He gave as his reason the scheduling of the deposition on December 9,1977.

Oddly enough, the record does not disclose that any extension was granted. However, the deposition was filed on January 6. Appended as exhibits to the deposition of General’s comptroller, in addition to the two letters which we have already mentioned, was correspondence between the comptroller and the attorney for Porter. The first was a letter from Porter’s attorney to the comptroller dated November 7, 1974.

It referred to Porter’s injury on September 6,1974; the amount he was receiving under the Maryland Workmen’s Compensation Act; the benefits specified in the union agreement “even where his injury occurs in Maryland or Virginia”; the amount to which Porter would have been entitled under the District of Columbia act; that counsel had “been advised by [General’s] insurance carrier that the policy does not carry an endorsement providing for these excess benefits”; and that as a consequence Porter was obliged to look directly to General. The letter indicated it was intended to confirm a recent telephone conversation and that it was the attorney’s “understanding that [the comptroller] intended] to discuss this matter with [General’s] insurance agent____” Counsel requested a reply after this conversation had taken place. January 9, 1975, brought a second letter from the attorney to the comptroller seeking advice as to “what position General ... or [its] insurer intend[ed] to take with regard to the excess benefits to Mr. Porter.” Thereafter the attorney wrote yet another letter to the comptroller saying that after his most recent telephone conversation with the comptroller the attorney “advised the local office of Lumbermens Mutual Casualty Company that [General’s] local agent had written the excess benefits policy retroactive,” but that “[i]n checking this matter [it was] learned the policy was written but to begin on January 11, 1975. ” The comptroller was advised that obviously “Porter would not be covered by such a policy” and thus it would be necessary to look to General “for payment of these excess ⁴⁰⁷ benefits.” The comptroller was requested to review his file and to “giv[e counsel the comptroller’s] thoughts on this matter as soon as possible.” Counsel twice wrote to the comptroller asking whether he had had the opportunity to discuss the matter with General’s insurance agent. Finally, on April 11 the comptroller replied: Regarding the retro-insurance for Mr. Porter, our insurance agent informed us that it did not start until January 1, 1975.

We need to establish a settlement with Mr. Porter for his losses from September 6,1974, to the time he was able to return to work or January 1,1975 whichever was first. We need a certified doctor's statement informing us when Mr. Porter was able to return to work. The loss settlement will be the difference between what the law requires and the actual payment our insurance company paid. Also, please send proof that Mr. Porter is entitled to the maximum payment under the workmens compensation law.

Counsel forwarded the requested information but this apparently brought no response because on June 30 he advised the comptroller that he had heard nothing from him subsequent to counsel’s letters of April 15 and April 18. He then requested information “as to [the] company’s position on payment of temporary total disability benefits,” with the statement then made that it was his intent to sue if payments were not begun within the next 20 days. The comptroller’s deposition disclosed that he was responsible for “all the financial aspects” of General. He said that General customarily hired local steamfitters and other craftsmen needed for its projects at the time its participation in a specific project began.

He described the process: Well, usually a job steward [of the union local] is on the job and [General’s job superintendent] just go[es] up there and [he] tell[s] him [General] need[s] a certain amount of men, and the men come to the job and we hire them. ⁴⁰⁸ One of the comptroller’s duties was to prepare cost estimates for bids on projects. In this regard he would contact union locals and determine what the applicable wage rates would be. His purpose in examining such local agreements was to calculate what it would cost General, including fringe benefits, to hire these men. He referred to certain union forms filled out by payroll clerks relative to this particular job and checked by the comptroller each month.

These disclosed payments “for the fringe benefits [about which the comptroller had been] speaking ..., welfare, pension, industry funds.” He said that when the company goes into an area to do work where there is an existing local collective bargaining agreement General does not sign the agreement but obtains copies of the local agreements with the intention of abiding by the wage rates, the welfare fund rates, the pension fund rates, the apprentice fund rates, and other payroll fringe benefits. He was asked why his company would voluntarily contribute these amounts and replied, “[B]ecause the men would walk off the job, probably____I would guess they would strike, we are dealing with union people.” The record also reflects from the examination of the comptroller by Porter’s counsel: Q So, essentially, you are aware that in order to get these union employees to come out and work for you on the job site, you have to pay them the wages and the fringes provided for in the union contract, is that correct? A Yes. Q That if you were to stop paying it or cut their wages, zip, you would lose them, is that correct?

A Sure. Q Now, if the union were to find out that you weren’t deducting these amounts and contributing them into their funds, they would withdraw their employees, wouldn’t they? A Sure, I guess. In due season Porter filed an answer to the motion for ⁴⁰⁹ summary judgment.

It alleged that there was a genuine dispute between the parties as to a material fact and: That although the signature of the defendant was never affixed to the contract upon which this suit is based, the defendant, by its conduct, clearly manifested its intention to be bound by the terms of the contract, and subsequently adhered to the same in all material respects, save the clause upon which this suit is based. The trial judge at the hearing on the motion for summary judgment asked counsel to tell him “where [there] was ever an implied meeting of the minds between [Porter] and [General]. Between the union and [General].” Ultimately, in granting General’s motion for summary judgment, he said: The company did everything they could to comply with the union contract, was not in my thinking, impliedly, make them impliedly a party to the contract that existed long before they even came to this state. I do not — I just don’t see that they have adopted that contract.

They are not a party to it. They tried to comply with it so they could use union members, that is fine. But I just don’t see how that creates a contract between them and the union without some sort of signature, without some sort of, more of a formative statement we intend to adopt your contract. Before we reach the issue of summary judgment here, we must first take a look at contract law.

The general rule is that one cannot be held to a