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Lewis, Tolman et al v. Alaska Public Employees Assoc. (6/21/91), 813 P 2d 669
Notice: This is subject to formal correction before
publication in the Pacific Reporter. Readers are
requested to bring typographical or other formal errors
to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, in order that
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THE SUPREME COURT OF THE STATE OF ALASKA
ALASKA STATE EMPLOYEES )
ASSOCIATION, ETHEL L. ) Supreme Court No. S-3665
LEWIS, MARGARET TOLMAN, )
and DOREEN SULLIVAN-GARCIA, ) Trial Court No.
) 3AN-88-12283 Civil
v. ) O P I N I O N
ALASKA PUBLIC EMPLOYEES )
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
J. Justin Ripley, Judge.
Appearances: Don Clocksin, Wagstaff,
Pope & Clocksin, Anchorage, for Appellants.
James A. Gasper, Jermain, Dunnagan & Owens,
P.C., Anchorage, for Appellee.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton, and Moore,
In 1988, appellant Alaska State Employees Association
(ASEA) was chosen by certain state employees to replace appellee
Alaska Public Employees Association (APEA) as their exclusive
bargaining representative. There was a four-month delay after
ASEA won the election until it was formally certified as the
representing union. APEA continued to collect union dues during
these months and later sent demands for delinquent dues to
members then represented by ASEA. ASEA and three individual
government employees sought to enjoin APEA from collecting union
dues for this period and to force APEA to disgorge dues allegedly
wrongfully collected. The plaintiffs also sought to enjoin the
collection of dues for other periods, dues which APEA had
allegedly waived its right to collect. The suit was eventually
dismissed,1 and APEA then filed for sanctions under Alaska Rule
of Civil Procedure 11. The superior court granted APEA's motion,
awarding $3,029.50 under Rule 11. This appeal followed. We
conclude that the superior court abused its discretion in
awarding sanctions under Rule 11 and therefore reverse the award.
APEA was the exclusive bargaining representative for
state employees in the General Government Unit (GGU). In
December 1987, ASEA and the Alaska Public Employees, Local 71
(Local 71) filed petitions challenging APEA's right to represent
the GGU employees. The State Labor Relations Agency (SLRA) held
a three-way election in May of 1988 in which ASEA received the
most votes, followed by Local 71, with APEA coming in a close
third. APEA filed objections to the election results on May 23,
1988. The SLRA dismissed these objections by an order and
decision dated June 21, 1988. ASEA defeated Local 71 in a run-
off election held on September 20 and 21, 1988. On September 28,
1988, ASEA was certified as the new exclusive bargaining
representative for GGU employees.
In November 1988, APEA sent letters to over 1,000 of
its former GGU members demanding payment of delinquent dues.
APEA claimed that it was owed dues for representation until
September 28, 1988.
In December 1988, ASEA and three members of the GGU2
filed a suit against APEA seeking injunctive and monetary relief.3
APEA had demanded $679 from plaintiff Ethel Lewis, which
apparently covered two years of back dues. Plaintiff Margaret
Tolman was asked to pay $56. After the May election, she had
contacted the state and asked that no more union dues be deducted
from her paycheck and sent to APEA. APEA sought $56 from
plaintiff Doreen Sullivan-Garcia, who was first hired after the
SLRA dismissed APEA's objections to the May election.
APEA moved to dismiss the complaint on February 24,
1989. The superior court ordered ASEA's case dismissed. APEA
then moved for Rule 11 sanctions. On October 4, 1989, the court
awarded APEA $3,029.50 under Rule 11.
STANDARD OF REVIEW
We review the award of sanctions under Rule 11 for
abuse of discretion. Keen v. Ruddy, 784 P.2d 653, 658 (Alaska
1989). In Keen, we adopted the approach of the United States
Court of Appeals for the Seventh Circuit which "reviews all
factors relevant to the issue of whether the attorney's inquiry
into facts and law was reasonable under an abuse of discretion
The version of Alaska Rule of Civil Procedure 11 in
effect when the superior court awarded sanctions against ASEA
states in part:
The signature of an attorney or party
constitutes a certificate by him that he has
read the pleading, motion, or other paper;
that to the best of his knowledge,
information, and belief formed after
reasonable inquiry it is well grounded in
fact and is warranted by existing law or a
good faith argument for the extension,
modification, or reversal of existing law,
and that it is not interposed for any
improper purpose, such as to harass or to
cause unnecessary delay or needless expense
in the cost of litigation. . . . If a
pleading, motion, or other paper is signed in
violation of this rule, the court, upon
motion or upon its own initiative, shall
impose upon the person who signed it, a
represented party, or both, an appropriate
sanction . . . .4
Under Rule 11, a court cannot impose sanctions on a
party simply for losing.5 Instead, a court imposes sanctions on
an attorney or party when it finds that the pleading signed by
him: 1) is not well grounded in fact, or 2) is not warranted by
existing law or a reasonable argument for its extension,
modification or reversal, or 3) was interposed for an improper
purpose. Keen, 784 P.2d at 658; 5A C. Wright & A. Miller,
Federal Practice and Procedure 1335, at 58-59 (2d ed. 1990).
APEA does not contend that ASEA's complaint was not well grounded
in fact, nor was there a finding by the superior court that ASEA
filed its complaint for an improper purpose.6 Thus, the only
issue in this appeal is whether ASEA's complaint was warranted by
existing law or a good faith argument for its extension,
modification, or reversal.7
APEA argues that ASEA's arguments were not justified by
the cases upon which it relied and that ASEA relied on theories
of relief which were inappropriate to prosecute a case. ASEA
concedes the general rule is that "the date of certification of
an election result is the effective date of any basic change in
the relationship of the parties resulting from the election."
Yet ASEA argues that there are several exceptions or good faith
arguments for exceptions to this general rule. ASEA also
maintains that APEA has failed to demonstrate any reason why ASEA
could not rely on the theories of estoppel, waiver, and laches.
In our view, ASEA's position was not so devoid of merit
as to justify the imposition of sanctions.
A. Were ASEA's Legal Arguments Frivolous?
1. ASEA's Argument That Dues Are Not Owed
After Members Vote To Remove A Union As Their
ASEA argues that Lyons Apparel, Inc., 218 N.L.R.B.
1172 (1975), constitutes an exception upon which it could
reasonably base its suit. In Lyons Apparel, the NLRB decided
that, after a vote to deauthorize the union,8 the union could not
demand that employees hired after the vote pay initiation fees
and dues pending certification of the election results. Id.
APEA maintains that Lyons Apparel is distinguishable
from the present case because it involved a deauthorization
election rather than a representation election. The significance
of this distinction is never clearly explained by APEA. It is
true that Lyons Apparel applies only to "new hires," i.e.,
employees hired in the period between the deauthorization
election and the certification of the results. Thus, ASEA's
argument rests on solid ground with respect to plaintiff Sullivan-
Garcia, who was hired after APEA lost the representation
election. In addition, ASEA's argument that no employee, new or
old, needs to pay dues after the date of the election, though not
directly supported by Lyons Apparel, constitutes, in our view, "a
good faith argument for the extension, modification, or reversal
of existing law"as permitted under Rule 11.9
2. ASEA's Argument That Dues Are Not Owed
Where A Dues Check-Off Authorization Is In Effect,
But The State Failed To Collect The Dues
Plaintiff Lewis apparently had a dues check-off
authorization in effect, but through miscommunication between
APEA and the state, no dues were collected. ASEA argues that
under these facts and in light of Ferro Stamping & Mfg. Co., 93
N.L.R.B. 1459 (1951), ASEA justifiably believed that APEA was not
entitled to the dues it sought to collect from Lewis.
Ferro Stamping involved an attempt by a union to secure
the discharge of an employee for failure to pay dues where the
employee had signed a dues check-off permitting the employer to
deduct the appropriate amount from each paycheck but the employer
failed to do so. Id. at 1506. The NLRB determined that by
signing the dues check-off the employee had thus fulfilled his
obligation to tender periodic dues as required to retain
membership in the union. Id. at 1461-62.
APEA dismisses Ferro Stamping as distinguishable since
it "clearly involved an employee's discharge, which was not an
element present in [ASEA's] suit." APEA fails to state the
significance of the distinction. While this distinction
ultimately may have justified the superior court in dismissing
ASEA's suit, we reiterate that merely losing is not sanctionable.
The question is whether Ferro Stamping provided a good faith
argument for ASEA's position. ASEA's argument that no dues were
owed where employees had signed a dues check-off but the state
had failed to collect the dues was not totally unfounded.
B. Were ASEA's Theories of Relief Appropriate
Theories With Which To Enjoin APEA From Collecting
Allegedly Delinquent Dues?
We now turn to APEA's contention that ASEA used
theories of relief, such as estoppel, waiver, and laches, which
are actually affirmative defenses and which cannot be used as
grounds to prosecute a case. These theories were advanced in
ASEA's effort to enjoin APEA from collecting allegedly delinquent
As for the estoppel argument, the general rule is that
equitable estoppel will not support a claim for affirmative
relief.11 Great Western Savings Bank v. George W. Easley Co.,
J.V., 778 P.2d 569, 579 (Alaska 1989). We have, however, noted
that there is contrary authority,12 and employing equitable
estoppel as a basis for monetary relief is not plain error. Id.
In the context of an injunction, we see no necessary
bar to relying on estoppel as the basis for relief.13 In
Municipality of Anchorage v. Schneider, 685 P.2d 94 (Alaska
1984), an individual sought to prevent the municipality from
revoking a building permit which it had issued. The trial court
ruled in favor of the individual, and on appeal we affirmed on
the grounds that the municipality was estopped from revoking the
permit. Id. at 98. Although the individual was the defendant
rather than the plaintiff, the case nonetheless represents an
instance in which a claim for injunctive relief was successfully
maintained on estoppel grounds. Further, in Fields v. Kodiak
City Council, 628 P.2d 927, 931 n.3 (Alaska 1981), we stated in
dictum that a claim to estop a city from enforcing a zoning
ordinance could be brought as an action for declaratory judgment.
In addition, it is our view that waiver and laches may arguably
support an action for injunctive relief. Each of these theories
is defensive in nature, and it is not unreasonable to request an
injunction seeking to preserve the status quo based on any of
For the preceding reasons, we conclude that the
superior court abused its discretion in awarding sanctions
against ASEA. REVERSED.
1 ASEA did not appeal the order dismissing the suit.
2 For the sake of simplicity, we will henceforth refer to
the plaintiffs collectively as simply "ASEA" unless otherwise
3 According to the complaint, APEA was wrongfully trying to
collect union dues covering the period between when it lost the
election in May and the time ASEA was certified as the new
bargaining representative in September. The complaint also
alleged that due to "bad management and/or practices of APEA,"
APEA waived the right to (or was estopped from) collecting
certain dues. In addition, the complaint alleged that by failing
to provide timely notice of delinquency to certain members, APEA
breached its duty of good faith and fair dealing with those
members. Also, the complaint urged the court to apply the
"equitable Doctrine of Laches"to bar APEA's attempted collection
of these dues until the court could determine if APEA was
entitled to them. Finally, the complaint alleged that APEA had
wrongfully collected more than $650,000 from GGU members after
losing the election and sought a judgment against APEA for these
4 We recently amended Rule 11 deleting the mandatory
sanction provision. See Supreme Court Order 1009 (October 12,
1989) (effective January 15, 1990). This case is decided under
the previous version of Rule 11, which was virtually identical to
its federal counterpart.
5 As the Advisory Committee Notes to the federal version of
Rule 11 state, "[t]he court is expected to avoid using the wisdom
of hindsight and should test the signer's conduct by inquiring
what was reasonable to believe at the time the pleading, motion,
or other paper was submitted."
6 In granting APEA's motion for Rule 11 sanctions, the
superior court noted that ASEA's suit was "poorly founded." The
court said nothing to indicate that ASEA had filed its complaint
with an improper purpose. Although APEA argues that the evidence
supported a finding of an improper purpose, APEA fails to cite
any language indicating where the court made such a finding. To
the extent that APEA argues that the trial court erred in failing
to find an improper purpose behind ASEA's complaint, the court's
decision was not clearly erroneous. Alaska R. Civ. P. 52(a).
Furthermore, as ASEA notes, the issue of improper motive was
raised for the first time before the superior court in APEA's
reply memorandum (in support of its motion for Rule 11
sanctions). Thus, ASEA did not have a chance to reply to the
allegation of improper motive. As a matter of fairness, the
trial court could not consider an argument raised for the first
time in a reply brief. In effect, APEA has abandoned the issue
of improper purpose.
7 The violation of this requirement alone is sufficient to
justify the imposition of sanctions. See Keen, 784 P.2d at 658.
8 "The effect of an affirmative deauthorization vote is to
relieve employees . . . of the requirements imposed by the union
security agreement." C. Morris, The Developing Labor Law 1383
(2d ed. 1983). A union security agreement requires that all
employees be members of the union (or pay to the union fees
equivalent to membership dues).
9 APEA argues that the deauthorization vote in Lyons Apparel
was based on a federal law which does not have a counterpart
under Alaska law. This, however, would not preclude Alaska
courts from adapting the Lyons Apparel approach to situations
that arise under Alaska law. APEA also suggests that West Coast
Cintas Corp., 291 N.L.R.B. No. 20 (1988) constitutes a departure
from Lyons Apparel. However, West Coast Cintas simply reaffirmed
that Lyons Apparel applies only to "new hires."
10 We note that ASEA also sought monetary relief against
APEA. However, a close examination of ASEA's complaint reveals
that ASEA's claim for monetary relief was not based on theories
of estoppel, waiver, or laches. These theories were used solely
as a basis to prevent APEA from collecting or threatening to
collect union dues. ASEA's claim for monetary relief was instead
based on the arguments discussed previously, which we have deter
mined not to be sanctionable under Rule 11. See supra Part A.1.
11 Equitable estoppel involves (1) the assertion of an
position by conduct or words, (2) reasonable reliance thereon by
an adverse party, and (3) resulting prejudice. Great Western
Savings Bank v. George W. Easley Co., J.V. 778 P.2d 569, 579
(Alaska 1989). This is distinguished from promissory estoppel
which ordinarily involves a promise which, as the promisor should
reasonably have anticipated, is relied on. Glover v. Sager, 667
P.2d 1198 (Alaska 1983). The estoppel alleged by ASEA is clearly
of the first type.
12 E.g., Oswald v. County of Aiken, 315 S.E.2d 146 (S.C. App.
13 Citing Stanton v. Fuchs, 660 P.2d 1197, 1198 n.2 (Alaska
1983), APEA maintains that equitable estoppel is an affirmative
defense. Stanton, however, did not consider whether, under any
circumstances, estoppel could serve as the basis of a claim for
an injunction. In Bubbel v. Wien Air Alaska, Inc., 682 P.2d 374,
380 n.7 (Alaska 1984), we indicated skepticism that equitable
estoppel could serve as the basis for an independent claim for
relief. However, we did not decide the issue. Moreover, Bubbel
was factually distinguishable in that the plaintiff used
equitable estoppel as the basis of a claim for monetary relief,
not an injunction.
14 In addition, the substance of ASEA's estoppel claim--as
opposed to the propriety of using it as the basis of a claim for
relief--is not frivolous. Plaintiff Ethel Lewis claims that the
$679 demanded from her by APEA stems from a mistake APEA made
after she was laid off for a short time in July of 1986. She
also claims that she was specifically told by APEA that she was a
member in good standing after that layoff. A reading of Lewis'
affidavit reveals that she has alleged facts sufficient to
support a reasonable claim for estoppel. See supra note 11.