Wright v. City of Gary

BRADFORD, Judge,

dissenting.

I conclude that I cannot concur with the approach taken by the majority. I cannot agree with either the conclusion that we may not reach the legality of the CBA or the conclusion that the CBA’s conflict with Gary Ordinance 5882 should be resolved in favor of enforcing the CBA. Consequently, I respectfully dissent.

I agree with the majority that the arbitrator was bound by the terms of the CBA and could not take Ordinance 5882 into account when rendering his decision. The arbitrator is a creation of the contract whose powers are absolutely limited by the contract. This does not mean, however, that we cannot take Ordinance 5882 into account. The enforceability of the CBA is a different question than whether the arbitrator exceeded his authority under the CBA. The Florida Court of Appeals has recognized this distinction in two eases I believe to be on point. See Jupiter Med. Ctr., Inc. v. Visiting Nurse Ass’n of Florida, Inc., 72 So.3d 184, 186 (Fla.Dist.Ct.App.2011), reh’g denied (Nov. 10, 2011) (“If the contract is found to be illegal, a prior arbitration will not prevent the trial court from vacating the award.”); Party Yards, Inc. v. Templeton, 751 So.2d 121, 123 (Fla.Dist.Ct.App.2000) (“A claim that a contract is illegal ... is not a matter which can be determined by an arbitrator. An arbitrator cannot order a party to perform an illegal act.”). In my view, the City can challenge the underlying CBA on appeal just like any other contract, and if it runs afoul of Ordinance 5882, we should refuse to enforce it to that extent.

The test for evaluating such questions was provided by the Indiana Supreme Court in the case of Continental Basketball Ass’n, Inc. v. Ellenstein Enterprises, Inc., 669 N.E.2d 134 (Ind.1996). Although there is a strong presumption of the enforceability of contracts in Indiana, “courts have refused to enforce private agreements on public policy grounds in three types of situations: (i) agreements that contravene statute[ 4 ]; (ii) agreements that clearly tend to injure the public in some way; and (iii) agreements that are otherwise contrary to the declared public policy of Indiana.” Id. at 139 . If a contract contravenes a statute or ordinance, it (or the offending provisions) is declared void. However, “because we value the freedom to contract so highly, we will not find that a contract contravenes a statute unless the language of the implicated statute is clear and unambiguous that the legislature intended that the courts not be available for either party to enforce a bargain made in violation thereof.” Id. at 140 .

Here, Ordinance 5882, despite making it abundantly clear that the GFCSC may choose its own secretary, nonetheless contains no clear or unequivocal language indicating that contracts made contrary to its terms are void or unenforceable. As such, we are required to analyze the CBA using the following considerations: “(i) the nature of the subject matter of the contract; (ii) the strength of the public policy underlying the statute; (iii) the likelihood that refusal to enforce the bargain or term will further that policy; (iv) how serious or deserved would be the forfeiture suffered by the party attempting to enforce the *653 bargain; and (v) the parties’ relative bargaining power and freedom to contract.” Id. at 140 .

This is where my path diverges again from the majority’s, who conclude that the CBA should be enforced instead of Ordinance 5882. Applying the Ellenstein factors, I would conclude that Ordinance 5882 trumps the CBA. While some of the factors do not seem to lean one way or the other in this case, as a general rule I do not believe that it is for us to say that enforcement of a duly-enacted and constitutional ordinance is against public policy when the ordinance is, in fact, the embodiment of public policy. Put another way, because the stated public policy of Gary is that the GFCSC may hire the secretary of its choice, to rule in favor of enforcement of the CBA is to thwart public policy rather than to serve it. “[Pjublic policy is a matter for the General Assembly subject only to constitutional limitations on legislative authority.... In the absence of any constitutional challenge, the wisdom of the policy reflected in the statute is not for us to resolve.” Murray v. Conseco, Inc., 795 N.E.2d 454, 457 (Ind.2003). While this result may seem slightly unfair to Wright, who was merely following the bumping procedure provided for in the CBA, in my view that unfairness is not nearly enough to overcome the public policy as stated in Ordinance 5882. I believe it should be a very rare case in which we conclude that a contractual provision be enforced despite conflicting with a statute or ordinance, and I see nothing in the record to suggest that this should be one of those cases.

I respectfully dissent.

. "Municipal ordinances have the same local force and effect as statutes[,]” French v. Bristol Myers Co., 574 N.E.2d 940, 943 (Ind.Ct.App.1991), and so law relating to statutes has equal applicability to ordinances. For purposes of this dissent, the terms will be used interchangeably.