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Mittleider v. Dakota, Minnesota, and Eastern Railroad

United States District Court, D. South Dakota, Southern Division

March 19, 2014



KAREN E. SCHREIER, District Judge.

Plaintiff, Clyde F. Mittleider, brought suit against defendants, Dakota Minnesota, and Eastern Railroad (DM&E), Canadian Pacific Railway Company (CP Company), and Canadian Pacific Railway Ltd. (CP Ltd.), claiming he is entitled to damages arising from promises made to him by DM&E. Defendants move for summary judgment, arguing that DM&E did not make an enforceable promise to Mittleider or, alternatively, that performance has been discharged. Separately, defendants CP Company and CP Ltd. (collectively, CP defendants) argue that they cannot be held liable for promises made by DM&E. For the following reasons, defendants' motion for summary judgment is denied.[1]


The facts, viewed in the light most favorable to Mittleider, the nonmoving party, are as follows:

Mittleider began working as a conductor and brakeman for DM&E in 1987. In 1990, DM&E entered into a collective bargaining agreement setting out seniority rules for union members with the United Transportation Union (Union). At that time, Mittleider held brakeman, conductor, and engineer seniority. In 1996, DM&E promoted Mittleider to manager of train operations in Huron, South Dakota, which was a non-union position but still allowed Mittleider to retain and accumulate seniority.

In 2002, DM&E, through its wholly-owned subsidiary, Cedar American Rail Holdings, acquired the assets of I&M Rail Link and formed a new corporate entity called Iowa, Chicago, and Eastern Railroad (IC&E). During this acquisition period, DM&E was actively involved in recruiting and staffing employees who would work for IC&E.[2] Mittleider was one of these employees. Kevin Schieffer, DM&E's then-president, and Robert Brownell, DM&E's thenvice-president of operations, [3] approached Mittleider and offered him a position with IC&E as a superintendent in Mason City, Iowa. Mittleider was reluctant to accept the position because he feared he would lose his seniority status if he left DM&E and began working at IC&E. Believing Mittleider was the right person for the job, Schieffer and Brownell attempted, on multiple occasions, to convince Mittleider to accept the job offer. They promised Mittleider that if he accepted the IC&E position he would not lose his seniority status.[4] They also promised Mittleider that if he ended up losing his seniority status, he would be made whole. Based on these promises, Mittleider accepted the superintendent position with IC&E by signing an employment contract, [5] and he moved to Mason City, Iowa. Mittleider remained in that position until 2004, when he moved to Sioux Falls, South Dakota, after he was promoted to assistant chief transportation officer. This position had responsibilities associated with both DM&E and IC&E.[6]

After Mittleider accepted the position with IC&E, the Union demanded DM&E remove Mittleider from the seniority roster. DM&E refused, and the Union initiated a grievance that resulted in an arbitration proceeding, consistent with the collective bargaining agreement between DM&E and the Union, before Public Law Board Number 6820 (PLB). In August 2005, the PLB ruled that Mittleider's name would be removed from the seniority roster.

Following the PLB's decision, Mittleider again engaged in discussions regarding his seniority status with Schieffer, who was still acting as DM&E's president. Schieffer assured Mittleider that DM&E would honor its promise to him. At that time, Mittleider was working in a management position in which his seniority status did not matter, making immediate action unnecessary. Nonetheless, Schieffer, recognizing the commitment made by DM&E, Docket 74-3 at 6, told Mittleider that DM&E would continue to negotiate with the Union in an effort to have Mittleider placed back on the seniority roster and, if DM&E was unsuccessful, then Mittleider would be "taken care of." Docket 74-3 at 6.

Between 2007 and 2008, CP defendants acquired control of DM&E, IC&E, and Cedar American Rail Holdings. In a letter addressed to all DM&E, IC&E, and Cedar American employees from Fred Green, president and CEO of Canadian Pacific, Green stated, "CP purchased the equity of the DM&E, IC&E and Cedar American. The equity includes all contracts and all agreements, not just the assets of your organization." Docket 43-1 at 1. At some point during the acquisition period but before receiving approval from the Surface Transportation Board, CP defendants were informed of DM&E's "outstanding commitment that was made by Mr. Schieffer to Mr. Mittleider." Docket 74-4 at 7.

In 2010, Mittleider was informed that his position in Sioux Falls, South Dakota, would be terminated, and he was offered a management position in Minneapolis, Minnesota. Mittleider refused to accept the offer because he did not want to relocate to Minneapolis and because he believed he would forfeit his rights to be made whole for losing his seniority status if he accepted the position. Docket 74-2 at 6-7. Mittleider was also told that he could apply for a conductor position, which he refused for the same reasons. Shortly thereafter, Mittleider's employment with defendants ended.

Upon ending his employment, Mittleider asked defendants to compensate him for losing his seniority status as was promised under the agreement he had with DM&E. Defendants refused, and Mittleider filed suit, alleging claims for breach of contract and promissory estoppel.


Summary judgment is appropriate if the movant "shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The moving party can meet this burden by presenting evidence that there is no dispute of material fact or that the nonmoving party has not presented evidence to support an element of his case on which he bears the ultimate burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). "The nonmoving party may not rest on mere allegations or denials, but must demonstrate on the record the existence of specific facts which create a genuine issue for trial.'" Mosley v. City of Northwoods, Mo., 415 F.3d 908, 910 (8th Cir. 2005) (quoting Krenik v. County of Le Sueur, 47 F.3d 953, 957 (8th Cir. 1995)).

Summary judgment is precluded if there is a dispute in facts that could affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). For purposes of a summary judgment motion, the court views the facts and the inferences drawn from such facts "in the light most favorable to the party opposing the ...

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