Contracts

Brief

Colfax Envelope Corp. v. Local No. 458-3M

Procedural History:

• District Judge granted summary judgment for the union.
• Appealed.
• Affirmed.

Facts:

• Colfax is a manufacturer of envelopes.
• Colfax currently has two printing presses.
  • One prints 78-inch wide sheets in four colors.
  • One prints 78-inch wide sheets in five colors.
• Colfax has too few employees that it does not bother to participate in the collective bargaining negotiations between the union and the CLA.
• Instead, whenever the union and CLA sign a new CBA, the union sends Colfax a summary of the changes.
• If Colfax is content with the changes, the union sends it a copy of the complete new agreement, which Colfax signs and returns. Colfax is free to do its own bargaining with the union if it doesn’t like the agreement.
• In 1991, the union negotiated a new agreement with the CLA and sent a summary of changes to Colfax.
• The summary listed “4C 60 Press-3 Men” and “5C 78 Press-4 Men.”
• Colfax, believing that this would benefit them, thought this meant all presses operated as four-color presses would now require only three men to man them.
  • The President and majority shareholder signed the union’s letter, indicating acceptance.
• A later copy of the actual agreement arrived, but it contained a crucial typo, which supported Colfax’s’ understanding of the summary.
• It was not until a corrected copy arrived that Colfax realized the mistake and the changes did not benefit Colfax at all and therefore Colfax refused to sign.
• The union, regardless, took the position that Colfax was bound to it by its acceptance of the summary.

Issue:

• Is Colfax bound to this agreement?

Holding:

• Yes. Affirmed.

Reasoning:

• The parties disagree about the meaning of the term “4C 60 Press-3 Men.”
• Colfax believes it means four-color  presses printing sheets 60 inches and over while the union believes it means four-color presses 60 inches and under.
• The difference between this case and Konic International Corp. Spokane Computer Services Inc. and Vickery v. Ritchie is that Colfax should have realized that the contract was unclear.
• The expression “4C 60 Press” does not on its face speak to the minimum manning requirement for a 4C 78 Press.
• Colfax, if reasonable, could not have doubted from reading the summary that interpretations of the kind that the union and the district judge later placed upon it would be entirely plausible.
• Colfax had the right to hope that its interpretation would prevail but had no right to accept the offer constituted by the summary on the premise that either its interpretation was correct or it could walk away from the contract.