Unpublished Disposition, 869 F.2d 1498 (9th Cir. 1989)

MEMORANDUM

Ramona's Mexican Food (Ramona's) appeals the district court's dismissal of its action for failure to state a claim upon which relief can be granted. Ramona's filed its complaint pursuant to section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, alleging that Food Industrial & Beverage Warehouse Driver and Clerical Employees, Local Union 630 and its international union, Western Conference of Teamsters (collectively the Union) breached an oral contract. The complaint alleges that the Union "assured" Ramona's that it would "immediately assign men and money to organize the [non-union] competitors [of Ramona's]" in consideration for Ramona's acceptance of a collective bargaining agreement. The complaint further alleges that the Union " [has] not acted in good faith and in all diligence in seeking to organize and establish Collective Bargaining Agreements among [Ramona's] competitors" because "too few men, too few dollars and too little time was [sic] expended to be effective." The district court dismissed, reasoning that the alleged oral contract was too vague to be enforceable. We have jurisdiction pursuant to 28 U.S.C. § 1291 and we reverse.

The parties agree that we should review the district court's order as one to dismiss for failure to state a claim upon which relief may be granted rather than as one for summary judgment. The district court may choose to rule on the pleadings and exclude the other matters from consideration. See Lodge 1380, Brotherhood of Railway v. Dennis, 625 F.2d 819, 824-25 (9th Cir. 1980). There, we explained that a Rule 12(b) (6) dismissal constitutes summary judgment if "evidence outside the complaint was not excluded from the court's consideration." Id. at 824. We examined two factors to determine whether such materials were excluded. First, although the district court did not expressly exclude the materials outside the complaint from consideration, we observed the language used in the order "belies that he granted summary judgment." Id. Second, the reasons for dismissal indicated that the district judge did not consider materials outside the complaint. We pointed out that the district court expressly stated that it dismissed the complaint because it " 'fails to state a claim for which relief can be granted.' " Id. at 825. Dennis controls here.

We review independently the dismissal for failure to state a claim. Western Oil & Gas Co. v. New, 765 F.2d 1428, 1430 (9th Cir.), cert. denied, 474 U.S. 1056 (1985). Our review is limited to the contents of the complaint. All of the allegations are taken as true and viewed in the light most favorable to the nonmoving party. To affirm it must appear "beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitled him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957) (Conley) .

The procedural posture of this case requires that we take the allegations of Ramona's as true regarding both the existence and the terms of the oral contract between the Union and Ramona's. The issue is whether the contract is enforceable. An agreement between a labor union and management is unenforceable if its terms are not sufficiently specific to enable the court to determine breach and remedy. Woodworkers v. Daw Forest Products Co., 833 F.2d 789, 792 (9th Cir. 1987). In evaluating the enforceability of a contract, we seek to avoid destruction due to uncertainty and construe the terms to effectuate the reasonable intentions of the parties. Id. at 793.

The district court concluded that the alleged contract was unenforceable, reasoning that it could not determine the level of performance that would satisfy the Union's obligation. The court further concluded that it could not fashion a remedy for a breach because specific performance would be unadministrable.

The complaint, viewed in a light most favorable, intimates that the Union promised to perform the oral agreement in good faith. In Woodworkers, we held that a term in a labor contract to act in good faith is not overly vague under contract law. Id. We reasoned that the court could determine breach of this term by examining whether the parties had exercised honest judgment or whether it had met the reasonable person standard. Id. at 793-94. We further observed that courts have wide latitude in fashioning remedies in section 301 cases for breach of the duty to act in good faith. Id. at 794.

Woodworkers prevents us from concluding that Ramona's can prove no set of facts which would entitle it to some form of relief. Conley, 355 U.S. at 45-46. Ramona's could possibly prove that the Union promised to act in good faith in organizing Ramona's competition. The court would be able to inquire whether the Union honestly or reasonably believed that it satisfied this obligation. Finally, the district court, if it finds a breach, has the discretion to fashion a remedy other than specific performance. We therefore hold that the district court erred in dismissing Ramona's action for failure to state a claim upon which relief can be granted.

REVERSED.

Note: This disposition is not appropriate for publication and may not be cited to or by the Courts of this Circuit except as provided by Ninth Circuit Rule 36-3.