author: THEIS, District Judge.

text:
    Shirley A. HOLLOWAY, Plaintiff, v. Margaret HECKLER, Secretary of Health and Human Services, Defendant.
    Civ. A. No. 84-1148.
    United States District Court, D. Kansas.
    Feb. 12, 1985.

      Michael H. Morgan, Legal Aid Society of Wichita, Inc., Wichita, Kan., for plaintiff.
    Stephen Lester, Asst. U.S. Atty., Wichita, Kan., for defendant.
   OPINION AND ORDER

THEIS, District Judge.

This action is an appeal pursuant to 42 U.S.C. § 405(g) of a denial of Social Security disability benefits by Margaret M. Heckler, Secretary of Health and Human Services [the Secretary], The case is currently before the Court on the motion of the Secretary to affirm the Secretary’s decision and the cross-motion of plaintiff Shirley A. Holloway for an order reversing the decision of the Secretary. For the reasons that follow, the decision of the Secretary shall be reversed and this case remanded to the Secretary for further proceedings in accord with this opinion and order.

Holloway filed an application for disability insurance benefits pursuant to 42 U.S.C. § 423 on January 18,1983. The application was denied. On September 12, 1983, a hearing was held before an administrative law judge [AU], at which Holloway appeared with counsel and testified. The AU rendered a decision on October 25, 1983, finding that Holloway was not suffering from a disability and therefore was not entitled to disability benefits. In addition, the AU denied Holloway’s request for a consultative medical examination. On January 24, 1984, the Appeals Council denied plaintiff’s request for review. Thus, the decision of the AU stands as the final decision of the Secretary.

The Court is familiar with the standards to be applied when reviewing a decision of the Secretary. The standard of review in this case is established by 42 U.S.C. § 405(g), which provides that “the finding of the Secretary as to any fact, if supported by substantial evidence, shall be conclusive.” Substantial evidence is that evidence which a reasonable mind might accept as adequate to support a conclusion. Richardson v. Perales, 402 U.S. 389, 402, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971). It is not the duty of this Court to reweigh the evidence. Garrett v. Califano, 460 F.Supp. 888, 890 (D.Kan.1978); Manigan v. Califano, 453 F.Supp. 1080, 1086 (D.Kan.1978). This Court cannot affirm the Secretary’s decision by isolating a few facts and calling them “substantial evidence.” Cline v. Califano, No. 78-4166 (D.Kan., unpublished, August 31, 1979). It is this Court’s duty to scrutinize the entire record to determine whether the Secretary’s conclusions are rational. Keef v. Weinberger, 404 F.Supp. 1193, 1196 (D.Kan.1975); Mitchell v. Weinberger, 404 F.Supp. 1213, 1215 (D.Kan.1975). In applying these standards, the Court must keep in mind that the purpose of the Social Security Act is to ameliorate some of the rigors of life for those who are disabled or impoverished. Dvorak v. Celebrezze, 345 F.2d 894 (10th Cir.1965).

The procedural history of the case is important to á resolution of the issues. When Holloway filed her application for supplemental security income benefits, she provided the Secretary with the authorization to obtain medical information from her treating physicians, Tr. 56, the name and address of the chiropractor who then was treating her back condition, Tr. 81, and the name and address of Dr. Val Brown, her treating physician since 1967, from whom x-rays of her back and chest could be obtained. Apparently, at no time did the Secretary or the AU gather or obtain medical information from Holloway’s treating physicians.

On February 18,1983, the Secretary sent Holloway to Dr. Larry Birch for a consultative examination. Tr. 95. On April 6, 1983, the Secretary sent the plaintiff for another consultative examination of her back condition to Dr. P. Odulio. Tr. 107. Plaintiff’s attorney requested a mental evaluation at the government’s expense, Tr. 118, which request was denied by the AU in his decision on October 25, 1983. Tr. 22.

Although Holloway complained of sub-sternal chest pain brought on by emotion, in his decision the AU repeated the findings of the consulting physicians that an electrocardiogram exhibited no irregular heart action or extensive cardiac damage. The AU also reiterated the consulting physician’s notations that the claimant could bend her back, flexing it 70 degrees, and could side bend 20 degrees. From this evidence, the AU concluded that Holloway could perform a wide range of sedentary work. Considering in addition her age and level of education, under Rule 201.24, Table No. 1 of Appendix 2 of 20 C.F.R. Subpart P, the AU concluded that Holloway is not disabled.

It is important to note that the AU considered only the reports of the consulting physicians and not the medical evidence from her treating physicians that Holloway offered to the AU. Although the Appeals Council examined questionnaires completed by her treating physicians and submitted by Holloway in her request for review of the AU’s decision, the Appeals Council discounted the forms filled out by Doctors Wilbeck and Brown because no medical records accompanied the questionnaires. In the present appeal, Holloway contends that the decision of the Secretary is not supported by substantial evidence because the AU did not afford her a full and fair hearing.

First, Holloway claims that she was not given a full and fair hearing because her request for a consultative psychiatric examination was denied. The regulations adopted by the Secretary provide that the AU shall “loo[k] fully into the issues ... and aceep[t] as evidence any documents that are material to the issues.” C.F.R. § 404.944. Numerous cases have interpreted that the AU “must fully and fairly develop the facts.” Ford v. Secretary of Health and Human Services, 659 F.2d 66, 69 (5th Cir.1981). In Echevarria v. Secretary of Health and Human Services, 685 F.2d 751, 755 (2d Cir.1982), the court held that in a social security benefits proceeding, an administrative law judge, unlike a judge in a trial, must himself affirmatively develop the record.

Holloway requested a consultative mental examination, which request was denied by the AU. Holloway contended that the psychiatric examination was necessary because she claimed many of her physical symptoms emanated from and were amplified by her psychological difficulties. In addition, she argued that the extent of her physical symptomology was underestimated due to a failure to evaluate the underlying psychological causes.

Holloway testified that she had “bad nerves,” suffered from shaking hands and arms, lost her hair recently due to nerves, and was prescribed bénadryl by Dr. Brown for her nerves. Tr. 38. She further testified that she saw a doctor for her nerves two years prior to the hearing, Tr. 43, and that she was given shots for her nerves seven years prior to the hearing. Tr. 44. One of the consulting physicians, Dr. Larry Birch, determined that some of Holloway’s chest pains were emotionally induced. Tr. 97. In addition, Dr. Val Brown concluded that Holloway suffered from extreme somatic pains, emotional instability and chronic anxiety. Tr. 122.

In his rejection of Holloway’s request for a mental examination, the AU stated:

[T]he Administrative Law Judge finds no good reason in the record to believe that the claimant suffers from severe emotional anxiety and apprehension. She has not been treated intensively with any kind of psychiatric or psychological care either on an inpatient or outpatient basis. Further consultative evaluation is not necessary to this decision.

Tr. 22 (emphasis added).

Although faced with enough evidence to warrant questioning the existence and extent of psychosomatic illness, the AU put Holloway in a Catch-22 position: she was not allowed a consultative mental examination because she had not had psychiatric help in the past. Not only did the AU ignore the evidence from Holloway, Dr. Birch and Dr. Brown that the claimant was in need of psychiatric care, but the AU further failed to consider that Holloway could not afford to pay for her own psy-chiatrict evaluations. Tr. 50.

A number of cases have held that consultative psychiatric examinations were necessary to enable the AU to make an informed decision. See, e.g., Ford, 659 F.2d at 69; Davis v. Califano, 599 F.2d 1324, 1326 (5th Cir.1979). In the instant case, given the evidence adduced by the plaintiff that her claims may have been underestimated because of the failure to obtain a consultative psychiatric examination, the Court holds that the AU improperly denied Holloway’s claim for benefits without first obtaining a consultative examination by a psychiatrist.

Second, Holloway contends that she was not afforded a full and fair hearing because the AU failed to obtain information from her treating physicians. As noted above, the AU has an affirmative duty to develop the factual record. See Echevarria, 685 F.2d at 755. The AU must make a full inquiry into the claimant’s condition. Espinosa v. Secretary of Health and Human Services, 565 F.Supp. 810, 814 (D.Kan.1983). Holloway gave the AU the names and addresses of her two treating physicians and a release of information form. Dr. Yal Brown had treated Holloway since 1967. Dr. Brown concluded that Holloway was illogical, poorly motivated, had paranoid tendencies, and was ill equipped to deal with problems and come to correct conclusions. Tr. 24, 123. Although Holloway informed the AU at the hearing that Dr. Brown would be submitting a report, the AU rendered its decision on October 25, 1983, two months before he received Dr. Brown’s report on December 21, 1983.

The opinion of the treating physician must be entitled to great weight by the trier of fact. Broadbent v. Harris, 698 F.2d 407 (10th Cir.1983); Marshall v. Schweiker, No. 81-1536 (D.Kan., unpublished, April 21, 1983). Reports of government consultative physicians who examine a disability claimant only once are accorded little weight, especially when they are inconsistent with the reports of treating physicians. Espinosa, 565 F.Supp. at 813. The consulting physicians, after each had examined Holloway once, concluded that she had a wide range of motion, but failed to discuss any psychological difficulties in depth. Holloway’s treating physicians, whose records the AU did not consider, determined that Holloway may have severe and potentially incapacitating emotional and psychosomatic difficulties. Where relevant, probative and available evidence is not explicitly weighed in arriving at a decision on a plaintiff's claim for disability benefits, the reviewing court may remand for consideration of such evidence. Dobrowlsky v. Califano, 606 F.2d 403, 407 (3d Cir.1979). In the present case, the evidence is simply insufficient to support a denial of benefits.

The AU failed to consider evidence from Holloway’s treating physicians. In addition, the AU failed to order a consultative psychiatric examination although the facts warranted that a complete medical record be built. Because the record is deficient, the case shall be remanded for further proceedings.

IT IS THEREFORE ORDERED that the motion of the Secretary for an order affirming the decision of the Secretary is denied.

IT IS FURTHER ORDERED that since there is insufficient evidence to support the findings of the Secretary and because the claimant was not afforded a full and fair hearing, this case is hereby remanded to the Secretary for further proceedings consistent with this opinion and order.


source: Caselaw Access Project

author: TOM S. LEE, District Judge.

license: Public Domain

text:
    Linda SHEPHERD, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant.
    Civ. A. No. J84-0520(L).
    United States District Court, S.D. Mississippi, Jackson Division.
    Feb. 19, 1985.
    Joseph E. Roberts, Cothren, & Pittman, Jackson, Miss., for plaintiff.
    Jerome B. Steen & William C. Griffin, Steen, Reynolds, Dalehite & Currie, Jackson, Miss., for defendant.
   MEMORANDUM OPINION

TOM S. LEE, District Judge.

This cause is before the court on the Motion for Summary Judgment filed by the defendant, State Farm Mutual Automobile Insurance Company (State Farm). After consideration of the memoranda with attachments submitted by the parties, this court is of the opinion that the defendant’s motion is well taken and should be granted.

The plaintiff, Linda Shepherd, was injured when the vehicle which she was driving was struck from the rear by a car operated by Mohammad Esmail Amini. She allegedly sustained severe injuries to the head, neck, cervical spine and shoulders and required treatment by an orthopedic surgeon for several months. The automobile driven by Amini was insured by Stonewall Insurance Company (Stonewall). Linda Shepherd was the named insured of an insurance policy issued by State Farm with a policy limit of $10,000 and her mother, Juanita Atkins, also held a policy issued by State Farm with a policy limit of $25,000. After the accident, Stonewall paid Shepherd $10,000.00 on behalf of Amini and, in return, Shepherd executed a covenant not to sue by which she agreed not to sue or “make any claim against Mohammad Es-mail Amini, Stonewall Insurance Company, or Dixie Insurance Company....” The agreement further provided that “the execution of this Covenant Not to Sue ... does not in any way prejudice the rights of the undersigned to assert or make a claim against the undersigned’s automobile liability insurance carrier, State Farm Mutual Automobile Insurance Company...

Shepherd alleges that her damages exceed the $10,000.00 paid to her by Amini’s insurer and that she is entitled to recover from State Farm pursuant to the provisions of policies issued to her and her mother and the Mississippi uninsured motorist statutes.

State Farm asserts that it is entitled to summary judgment because Shepherd’s execution of the covenant not to sue without the consent of State Farm was in violation of the uninsured motorist provisions of the policy which state in part:

This insurance does not apply: (a) to bodily injury to an insured ... with respect to which such insured ... shall, without written consent of the company, make any settlement with any person or organization who may be legally liable therefor....

The covenant not to sue, according to State Farm, furthermore abrogated its subrogation rights against Amini.

In United States Fidelity & Guaranty Company v. Hillman, 367 So.2d 914 (Miss.1979), Hillman, the insured, had sustained injuries when a truck, driven by an uninsured motorist, collided with Hillman’s automobile. Without the knowledge of U.S.F. & G., Hillman executed a release of the uninsured motorist. The U.S.F. & G. policy stated that the uninsured motorist coverage did not apply “to bodily injury to an Insured with respect to which such insured ... shall, without written consent of [U.S.F. & G.], make any settlement with any person or organization who may be legally liable therefor”. The court held that) since Hillman had violated an unambiguous provision of the policy and had, in releasing the uninsured motorist, foreclosed U.S.F. & G.’s subrogation rights guaranteed by Mississippi’s uninsured motorist statutes, recovery from U.S.F. & G. must be denied. Id. at 922.

The plaintiff has attempted to distinguish the release in Hillman from the covenant not to sue executed by her. Shepherd contends that the covenant not to sue is personal to her and not prejudicial to the subrogation rights of the defendant. Subrogation, however, “is the substitution of one person in place of another ... so that he who is substituted succeeds to the rights of the other in relation to the debt or claim, and to its rights, remedies or securities”. Indiana Lumberman’s Mutual Insurance Co. v. Curtis Mathes Mfg. Co., 456 So.2d 750, 754 (Miss.1984) (quoting Lyon v. Colonial United States Mortgage Co., 129 Miss. 54, 91 So. 708 (1922)). State Farm’s ability to recover from Amini or his insurer is dependent entirely on Shepherd’s rights. By foreclosing her own right to sue, Shepherd has also abrogated State Farm’s rights. Furthermore, since the covenant not to sue executed by Shepherd constitutes a “settlement” in violation of the policy, the court finds that the legal distinctions between a release and covenant not to sue are immaterial.

For the reasons stated herein, it is the court’s opinion that the defendant’s motion for summary judgment should be granted. A separate judgment shall be submitted in accordance with the local rules.

      . Section 83-11-103, Miss.Code Ann., defines an uninsured motor vehicle as, inter alia, "An insured motor vehicle, when the liability insurer of such vehicle has provided limits of bodily injury liability for its insured which are less than the limits applicable to the injured person provided under his uninsured motorist coverage.” Although the automobile driven by Amini was covered by an insurance policy, it is an uninsured motor vehicle for purposes of the statutes because Shepherd alleges her damages exceeded the amount of coverage.

      . Miss.Code. Ann. § 83-11-107 (1972) provides in part:
      An insurer paying a claim under the endorsement or provisions required by section 83-11-101 shall be subrogated to the rights of the insured to whom such claim was paid against the person causing such injury, death, or damage to the extent that payment was made, including the proceeds recoverable from the assets of the involvent insurer.

      .In Dancy v. State Farm Mutual Automobile Insurance Co., 324 F.Supp. 964 (S.D.Ala.1971), the insured executed a covenant not to sue in favor of a man against whom he' had a tort claim, as well as the man’s insurance company, and then sought recovery under the uninsured motorist provision of his policy with State Farm. The court, in granting summary judgment for the insurer, found that the covenant not to sue, like a release, breached the policy provision prohibiting settlement without the insurer’s consent and interfered with the insurer’s subrogation rights. Id. at 965.


author: WILLIAM T. HART, District Judge.

text:
    Norton SARNOFF and Carl Fletcher, Plaintiffs, v. AMERICAN HOME PRODUCTS CORP., a Delaware corporation, Defendants.
    No. 83 C 0647.
    United States District Court, N.D. Illinois, E.D.
    Feb. 20, 1985.
    Lionel G. Gross, Robert K. Blain, Al-theimer & Gray, Chicago, Ill., for plaintiffs.
    Lewis Perkiss, Kenneth J. Petrine, New York City, for defendants.
   MEMORANDUM OPINION AND ORDER

WILLIAM T. HART, District Judge.

Plaintiffs Norton Sarnoff and Carl Fletcher brought this action against their former employer, American Home Products Corporation (“AHP”), in an effort to recover profit-sharing benefits awarded to them under AHP’s Management Incentive Plan (the “Plan”) during their employment. AHP, through its Incentive Compensation Committee (the “Committee”), declared a forfeiture of these benefits when it determined that Sarnoff and Fletcher were employed by a competitor, in violation of the Plan’s noncompetition provision. The parties do not dispute the facts surrounding these events and have filed cross-motions for summary judgment on the issues of whether the Plan’s noncompetition provision is valid- under applicable law and whether Sarnoff and Fletcher were in violation of the Plan’s noncompetition provision. These are the matters currently before the Court.

FACTS

AHP is a Delaware corporation headquartered in New York and selling AHP sells products in a variety of industries {e.g,, drugs, foods, paints, household products, housewares) on a worldwide basis. AHP adopted its Management Incentive Plan in 1967 and since then has administered the Plan from its New York headquarters. The Plan covers present and former AHP employees worldwide.

Plaintiffs Sarnoff and Fletcher became AHP employees during 1979, when AHP acquired their former employer, EZ-Por Corporation (“EZ-Por”). Prior to its acquisition by AHP, EZ-Por produced and sold aluminium cookware items. EZ-Por maintained its sole place of business in Illinois, where it was incorporated. Sarnoff served as Vice-President of EZ-Por and owned shares in the company while Fletcher worked as EZ-Por’s plant manager and salesman. After the acquisition both Sarnoff and’ Fletcher continued to work in Illinois in their former positions for AHP’s EZ-Por subsidiary (“AHP-EZ-Por”).

On January 29, 1981, AHP sent letters to Sarnoff and Fletcher informing them that AHP’s Incentive Compensation Committee had granted them “contingent” stock awards of 600 and 150 shares, respectively, of AHP stock. These letters state that the awards would be paid out at a future date under certain conditions. The letter also requested award recipients to sign and return to AHP a copy of the letter “as ac-knowledgement of receipt of both this notification and a copy of the Plan, and your acceptance of New York Law as governing Plan interpretations.” Both Sarnoff and Fletcher signed and returned copies of the letter as requested.

After resigning from AHP-EZ-Por in January of 1981, Sarnoff formed Ensar Corporation (“Ensar”) as an Illinois corporation. Fletcher joined Sarnoff at Ensar after leaving AHP-EZ-Por during February, 1981.

In December of 1981, Sarnoff and Fletcher received questionnaires from AHP, which they completed and returned as requested, attaching Ensar’s product list. At its January 27, 1982 meeting, AHP’s Committee determined that several of Ensar’s products were in competition with products sold by AHP’s Ekco Housewares Division. Consequently, the Committee determined that Sarnoff and Fletcher had forfeited their awards. By letter dated February 3, 1982, AHP’s Treasurer notified Sarnoff and Fletcher of the Committee’s decision. This action ensued.

DISCUSSION

AHP argues that New York law governs this action, that New York law recognizes the validity of the Plan’s noncompetition clause and that since the plaintiffs breached the noncompetition clause, the Committee properly declared the forfeiture. Sarnoff and Fletcher contend that Illinois substantive law governs this action, and that under Illinois law the AHP’s noncompetition clause is void as overbroad. Alternatively, Sarnoff and Fletcher assert that AHP’s noncompetition clause is similarly void under New York law. They also maintain that they have not breached the non-competition clause and that, in any event, AHP should be estopped from asserting a breach.

Because there is no real conflict between the substantive law of New York and that of Illinois as to the validity of AHP’s non-competition clause, the choice of law issue is not controlling. Even assuming that New York and Illinois differ on this issue, however, Illinois’ conflict of law principles indicate that Illinois’ substantive law governs this controversy. Thus Illinois law must be applied in any event and its application precludes enforcement of the Plan’s noncompetition clause.

The courts of Illinois disfavor non-competition clauses, enforcing only such provisions as are “reasonably necessary to protect a legitimate business interest or to prevent improper and unfair competition.” Rao v. Rao, 718 F.2d 219, 223 (7th Cir.1983). See also American Hardware Mutual Insurance Co. v. Moran, 705 F.2d 219, 221 (7th Cir.1983); Akhter v. Shah, 119 Ill.App.3d 131, 74 Ill.Dec. 730, 733, 456 N.E.2d 232, 235 (1st Dist.1983); MBL (USA) Corp. v. Diekman, 112 Ill.App.3d 229, 67 Ill.Dec. 938, 944-45, 445 N.E.2d 418, 424-25 (1st Dist.1983) (“restrictive covenants are closely scrutinized”). These principles have been applied by Illinois courts to a forfeiture of deferred compensation based on breach of a noncompetition clause. Johnson v. Country Life Insurance Co., 12 Ill.App.3d 158, 300 N.E.2d 11 (4th Dist.1973) (forfeiture of renewal premiums resulting from former insurance agent’s breach of noncompetition clause).

AHP does not contest the adherence of the New York courts to this same restrictive view of noncompetition clauses; when found in employment contracts. See American Institute of Chemical Engineers v. Reber-Friel Co., 682 F.2d 382, 386-87 (2nd Cir.1982). Rather, AHP maintains that New York courts do not evaluate the reasonableness of noncompetition provisions where such clauses operate only to forfeit deferred compensation and such clauses do not actually prohibit competition by a former employee.

In support of its argument AHP cites Kristt v. Whelan, 4 A.D.2d 195, 164 N.Y.S.2d 239 (1st Dept.1957), aff'd w/o opinion 5 N.Y.2d 807, 181 N.Y.S.2d 205, 155 N.E.2d 116 (1958). In Kristt, the New York Supreme Court, Appellate Division articulated the so-called “employee choice” rule: that a noncompetition clause is enforceable where the former employee has “the choice of preserving his rights [to deferred compensation] by refraining from competition with [his former employer] or risking forfeiture of such rights by exercising his right to compete.” 164 N.Y.S.2d at 243. However, in Bradford v. New York Times Co., 501 F.2d 51 (2nd Cir.1974), the Second Circuit stated that in light of subsequent decisions by the Court of Appeals of New York:

We do not agree that Kristt represents the law of the state if it be construed to eliminate any inquiry into reasonableness because of some purported doctrine of ‘employee choice.’ The inquiry remains whether or not the restraint was reasonable and the contract was breached.

501 F.2d at 57.

Although the Second Circuit in Bradford had apparently interred the much criticized “employee choice” rule, at least three district court decisions within the Second Circuit have since concluded that Kristt remains alive and well. Murphy v. Gutfreund, 583 F.Supp. 957, 962-65 (S.D.N.Y.1984) (recognizing the “employee choice” rule but refusing to apply the rule to non-competition clause imposed after former employee agreed to work for a competitor); Diakoff v. American Re-Insurance Co., 492 F.Supp. 1115, 1121-23 (S.D.N.Y.1980); Kelsey v. American Home Products Corp., CV 82-0448, Slip Op. at 7-8 (E.D.N.Y.1983). Each decision declined to follow Bradford as a result of the intervening decision by the Court of Appeals of New York in Post v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., 48 N.Y.2d 84, 421 N.Y.S.2d 847, 397 N.E.2d 358 (1979).

In Post, the New York court refused to apply the “employee choice” rule whenever the employer had discharged its former employee, then went on to find that forfeiture of pension benefits based on a non-competition clause was “unreasonable as a matter of law ... where an employee is involuntarily discharged by his employer without cause.” 421 N.Y.S.2d at 849, 397 N.E.2d at 361 (emphasis added). In the course of its opinion, the New York court, citing Kristt, noted that where the employee had voluntarily terminated the employment relation, “effect has been given to the forfeiture-for-competition provision.” Id. Each of the subsequent district court opinions cited above read this approving language, admittedly dicta, as breathing new life into Kristt.

This court must respectfully disagree. A rule which is honored only through its breach is not much of a rule, and this seems to be the state of the Kristt rule in the courts of New York. Post itself enunciated a major limitation of the rule stated in Kristt. Such limitations often presage the reversal of a rule rather than its reaffirmation. That Post did not disavow Kristt in cases of voluntary termination is not decisive, since the issue of voluntary termination was not before the Post court. Further, the parties have not cited to this court and research has failed to disclose a single reported decision by the Court of Appeals of New York or the Appellate Division interpreting Post as reaffirming the “employee choice” rule. Therefore, the Second Circuit’s assessment in Bradford must be adopted as an accurate reading of New York law. Since the Second Circuit’s view of New York law accords with Illinois law, no conflict exists.

Moreover, Illinois conflict of law rules would preclude application of the “employee choice” rule in this case were that rule embodied in current New York law. The Illinois courts have adopted the rules of the Restatement (Second) of Conflicts (1971), which dictate that the law of the state with the “most significant relationship to the transaction” be applied. Florida Risk Planning Consultants v. Transport Life Insurance, 732 F.2d 593, 595 (7th Cir.1984); Dr. Perkins School, 741 F.2d at 1515 n. 19. Both Sarnoff and Fletcher lived and worked in Illinois during their employment by AHP and later when they competed with AHP. Thus, Roesgen v. American Home Products Corp., 719 F.2d 319 (9th Cir.1983) (New York law governed validity of noncompetition clause for former AHP employees who worked in New York, then moved to California for employment with competing companies), cited by AHP, is distinguishable. The reasoning in Roesgen actually supports application of Illinois law in this action, since here Sarnoff and Fletcher earned their Plan credits while employed in Illinois.

Florida Risk Planning Consultants further supports the application of Illinois law. There an insurance brokerage firm sought commissions on the sale of insurance contracts. The defendant insurer claimed that since the broker was unlicensed, the contracts were illegal in the states in which they were sold. The Seventh Circuit applied the law of the states in which the plaintiff rendered performance (sold the insurance contracts) to evaluate the defendant’s asserted defense of illegality. Plaintiffs’ claim here, that the noncom-petition clause violates Illinois’ public policy, is closely akin to a defense of illegality. Accordingly, the law of the state where the contract was substantially performed governs.

AHP contends that since Sarnoff and Fletcher have agreed to the application of New York law, this court should honor that choice of law. See Lloyd v. Loeffler, 694 F.2d 489, 495 (7th Cir.1982) {reasonable choice of law by the parties controls). However, this stipulation cannot be honored for two reasons. First, the plaintiffs argue persuasively that since they received no consideration for their acceptance of New York law, they cannot be bound by that choice. See United States v. Meadors, 753 F.2d 590 (7th Cir.1985) (defendants’ gratuitous guarantee was without consideration where loan made before guarantee made). Since AHP awarded Sarnoff and Fletcher their shares before requesting that they “agree” to the application of New York law and without conditioning the award upon such an agreement, there is no consideration for that agreement.

Moreover, contracting parties cannot avoid the public policies of the state in which the contract is to be performed by simply stipulating to the law of a state which does not embody that policy. Restatement (Second) of Conflicts, § 182(2)(b). See also § 202 comment (d). Even if AHP had correctly interpreted the law of New York to enforce forfeiture-for-competition clauses, the plaintiffs’ agreement to the application of New York law stands on no different footing than would their agreement to a forfeiture with no stipulation of governing law, since the stipulation would not have been “reasonable” if contrary to the law of the state with the most significant contacts with the contract. In other words, to say that plaintiffs stipulated to New York law is to say no more than that they agreed to a forfeiture; it simply begs the question of whether the forfeiture is contrary to the public policy of Illinois.

Hence, the Court turns to the question of whether the noncompetition agreement here is valid under Illinois law (and New York law as well) as reasonably necessary to protect AHP’s legitimate business interests or to prevent improper and unfair competition. See Rao v. Rao, supra. AHP’s noncompetition clause operates for the ten year period during which Sarnoff and Fletcher were to receive payouts of their previously earned AHP shares. It is unrestricted geographically and it applies to a wide range of industries (medical instrumentation, paints and coatings, food preparation equipment, drugs and medicines, grocery products, specialty foods and candies, household cleaners, housewares and kitchen products). The breadth of industries to which AHP’s restriction applies is its most troubling feature. Former AHP employees are restrained from competing in fields where they could not possibly possess AHP’s confidential information. Here, Sarnoff and Fletcher did not compete directly with AHP-EZ-Por. Rather, they forfeited their Plan interests by competing with an AHP division for which they had never worked and with which they presumably had no contact. Consequently, the Plan’s forfeiture-for-competition clause is impermissibly overbroad and cannot be enforced. Plaintiffs’ motion for summary judgment must be granted and the defendant's cross-motion is denied.

As damages, Sarnoff and Fletcher seek the market value of their AHP shares as of the date they filed their motion for summary judgment, $34,467.08 and $8,579.36 respectively. AHP has requested an opportunity to respond in the event of an adverse ruling on the question of liability. Consequently, the court reserves ruling as to the amount of damages to be awarded.

IT IS THEREFORE ORDERED that:

(1) The claim of plaintiff Fletcher is dismissed for want of jurisdiction.

(2) Plaintiff Sarnoff s motion for summary judgment is granted and the defendant’s cross-motion for summary judgment is denied.

(3) A status hearing is set for February 28, 1985 at 9:00 a.m. to address the issue of damages.

(4) The defendant is directed to file by February 22, 1§85 any written response to plaintiff Sarnoff s damage calculations.

      . Plan Section VI(4)(d)(i) provides in part:
      [No] delivery from a Contingent Award Account shall be made to any Employee after termination of employment unless he shall have ... (i) refrained from becoming or serving as an officer, director or employee ... or owner of a business in competition with the Company._ If these conditions are not fulfilled ... all [of the employee’s] rights with respect to this Contingent Award Account shall thereupon be forfeited.

      . On December 19, 1984 this court directed the parties to address the application of federal law to this action. See Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq. The parties have stipulated that the AHP Plan at issue is exempted from ERISA as an unfunded plan maintained to provide deferred compensation to a selected group of management employees. See 29 U.S.C. §§ 1051(2), 1081(a)(3), 1101(a)(1).

      . Grich v. Wood & Hyde Leather Co., Inc., 74 A.D.2d 183, 427 N.Y.S.2d 96 (3rd Dept.1980), comes closest to this position. Citing Post for the proposition that ERISA manifests a strong policy against forfeiture, Grich remanded for consideration of whether plaintiff had competed, without addressing the reasonableness of the noncompetition clause.

      . This court must apply the conflict of law principles of the forum state, Illinois, in this diversity case. Dr. Franklin Perkins School v. Freeman, 741 F.2d 1503, 1515 n. 19 (7th Cir.1984).

      . In the December 19, 1984 order, the parties were advised that plaintiff Fletcher could be dismissed for failure to allege the minimum jurisdictional amount in the absence of a federal claim. See Hixon v. Sherwin Williams Co., 671 F.2d 1005, 1007 (7th Cir.1982). In response, the parties have stipulated to the exercise of this court’s pendent jurisdiction over Fletcher’s claim. However, the parties cannot confer subject matter jurisdiction upon the court by stipulation. The exercise of pendent jurisdiction is ordinarily a matter for trial court’s discretion. Based on that stipulation, the late stage of the proceedings, the identity of the issues presented (and largely decided), the court would find that judicial economy would be disserved by dismissing Fletcher’s claim. Nonetheless, the mandate of Hixon clearly deprives this Court of its usual discretion; "a pendent party must meet the amount in controversy requirement of the diversity jurisdiction.” 671 F.2d at 1009 (emphasis added). Accordingly, Fletcher's claim must be dismissed.


text:
    Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, Plaintiff, v. DERBY REFINING COMPANY, Defendant.
    Civ. A. No. 85-1176.
    United States District Court, D. Kansas.
    Feb. 20, 1985.

      Michael A. Stabler, Kansas City, Mo., Benjamin L. Burgess, Wichita, Kan., for plaintiff.
    Joseph W. Kennedy, Wichita, Kan., Mary K. Higginnotham, Houston, Tex., for defendant.
   MEMORANDUM AND ORDER

THEIS, District Judge.

On March 30, 1984, plaintiff, Raymond J. Donovan, filed suit against defendant, Derby Refining Company, alleging that Derby had violated the overtime and recordkeep-ing provisions of the Fair Labor Standards Act, 29 U.S.C. § 201 et seq., with regard to payment of a number of its service station managers. By way of affirmative defense, Derby contended that the service station managers were independent contractors and not employees of Derby.

The case is currently before the Court on the motion of the Secretary of Labor for partial summary judgment and an order holding that these contractors are employees of Derby within the meaning of the Act, 29 U.S.C. § 203(e). Derby filed no memorandum in opposition to plaintiffs motion. For the reasons that follow, the motion of the Secretary shall be granted.

The underlying facts are not disputed. Each individual that became one of Derby’s contractors was required to sign an agreement entitled “Agreement Between Derby Refining Company and Contractor Concerning Provision of Personnel Services,” a copy of which was attached to the Secretary’s motion as Exhibit 2. Dk. no. 22. The Agreement provides that Derby retains ownership and control of the station and the land upon which it was located. (Article 1(A)). Derby also retains ownership of all equipment at the station. (Article 1(A)). Ownership of all products remains with Derby until sold to the public. (Article 1(A)).

The Agreement prohibits the contractor from operating any other related or unrelated business at the station. (Article 1(C)). The contractor pays no rental to Derby. (Article 1(A)). Derby supplies all products to be sold at the station. (Article 11(B)). Derby pays all real property and personal property taxes and all public utility charges. (Article 11(C)). Derby pays all occupational and business licenses. (Article 11(C)). The authority to develop advertising and promotional materials is retained by Derby. (Article 11(D)). The contractor is required-to deposit funds on a daily basis in a Derby bank account, using a form supplied by Derby. (Article 11(B), (C)). Derby retained the right to alter the manner in which the contractor collected and remitted such funds. Dk. no. 22, Exhibit no. 1, p. 26. Derby determines the hours of operation for the station. (Article 111(D)). The contractor could not vary those hours without Derby’s approval. Exhibit no. 1, pp. 40-42. Derby requires the contractor to receive and store gasoline and other products in a manner established by it, and Derby requires the contractor to provide station personnel with uniforms bearing Derby’s trademark. (Article III(G), (K)).

Derby determines the required number of man hours to be worked at the station each month, (Article IV(C)), and increases or decreases the contractor s compensation accordingly. (Article IV(D)). Derby retains all opportunity for profit and risk of loss from the operation of the station, other than loss due to the contractor’s negligence. (Article V(C)). Derby retains the right to audit each contractor’s records every two to six weeks. (Article VII). Defendant retains the right to terminate the contract if, in the sole discretion of Derby, it was determined that the contractor was in default and such default remained uncured for seven days. (Article VI). Finally, Derby requires each contractor to give Derby a security deposit. (Article VIII).

The Secretary’s contention is that the above factors all point to the conclusion that the alleged independent contractors were in fact employees of Derby within the meaning of 29 U.S.C. § 203(e). In determining whether a worker is an independent contractor or an “employee” under the Fair Labor Standards Act, the general rule is that the courts must look at the economic realities of the activities being performed. Rutherford Food Corp. v. McComb, 331 U.S. 722, 67 S.Ct. 1473, 91 L.Ed. 1772 (1947). A number of considerations must be examined as guides in the determination of whether an employment relationship exists: the degree of control, opportunity for profit or loss, investment in the facility, permanency of the relationship, and the amount of skill required. See, e.g., Donovan v. Tehco, 642 F.2d 141 (5th Cir.1981). An analysis of the above factors establishes that the station managers in this case may be considered employees, and not independent contractors, of Derby.

First, regarding the element of control, it is apparent from the facts that Derby, and not the managers, controlled . the operation of the various stations. Derby retained ownership of the building, the land, and the products sold at the station. Derby set hours, conducted advertising, determined prices, and required the station managers to report and deposit funds into a Derby account daily. Under very similar facts, the court in Usery v. Pilgrim Equipment Co., Inc., 527 F.2d 1308 (5th Cir.1976), held that control .was vested in the company. The right of control was vested in Derby.

Second, since Derby’s contractors had neither an investment nor an ownership interest in the products sold at the station, they had no opportunity for profit or loss. In addition, their monthly compensation was fixed under the Agreement. (Article IV(A)). Furthermore, Derby bore all risks of loss not occasioned by the contractor’s negligence.

The third factor identified by the court in Tehco was whether the alleged independent contractor made an investment in the company. 642 F.2d at 143. In the present case, the station managers made no investment in the building or in the equipment or in the merchandise sold. All risk capital was provided by Derby and Derby paid all the bills.

Fourth, the station managers’ skill is at issue. Although little evidence is adduced on this issue, the Agreement does provide that the contractor’s only requirement was to afford customers normal self-service operations according to Derby’s policies. (Article 1(B)). The apparent amount of skill required does not lend support to the argument that the station managers were independent contractors.

Finally, Tehco requires an examination of the permanency of the relationship between the worker and the company. Id. By the terms of the Agreement, the contractor was not allowed to have any other business at the station. In addition, Derby retained the right of termination under the Agreement. Furthermore; the Agreement appears to afford the contractors no job security. The Court finds little permanency in the relationship between the station managers and Derby.

A cumulative reading of the above factors establishes that the station managers/contractors were employees of Derby and not independent contractors. Therefore, the motion of the Secretary for partial summary judgment and an order holding that the contractors are employees of Derby rather than independent contractors within the meaning of 29 U.S.C. § 203(e) shall be granted. This opinion, however, does not purport to address Derby’s fourth or fifth defenses regarding categorization of the employees.

IT IS THEREFORE ORDERED that plaintiff’s motion for partial summary judgment shall be granted.


author: ARCENEAUX, District Judge.

text:
    Ersel BOGAN v. BARGE T-13315B, etc., et al.
    Civ. A. No. 84-1992.
    United States District Court, E.D. Louisiana.
    Feb. 21, 1985.

      Leger & Mestayer, Michael J. Mestayer, New Orleans, La., for plaintiff.
    Lemle, Kelleher, Kohlmeyer, Hunley, Moss & Frilot, David A. Olson, T.A., John F. Nevares, New Orleans, La., for Marine Equipment Co.
   OPINION

ARCENEAUX, District Judge.

This lawsuit arises out of a personal injury sustained by the plaintiff while moving the barge covers of a grain barge during unloading operations. Plaintiff has sued his employer ITO Corporation (“ITO”) (formerly Atlantic & Gulf Stevedores, Inc.) under 46 U.S.C. § 688 (the “Jones Act”) and § 905(b) of the Longshoremen’s and Harbor Workers’ Compensation Act, 33 U.S.C. § 905(b); plaintiff also sued the grain barge owner Marine Equipment Company, the bareboat charterer of the grain barge United Barge Company, and “Certain Underwriters at Lloyds” (collectively “United”), all under 33 U.S.C. § 905(b). ITO and United moved for summary judgment, and after hearing oral argument on January 16, 1985, the Court granted ITO’s motion under the Jones Act, with written reasons to be assigned later, and took ITO’s other motion, and United’s motion under consideration, and ordered supplemental memo-randa. Having considered the memoranda of counsel, the record and the applicable law, the Court hereby GRANTS ITO’s motion for summary judgment under 33 U.S.C. § 905(b) and DENIES United’s motion under 33 U.S.C. §. 905(b).

REASONS FOR GRANTING ITO’S MOTION FOR SUMMARY JUDGMENT UNDER 46 U.S.C. § 688

To qualify as a Jones Act seaman the plaintiff must be “assigned permanently to a vessel” or perform a substantial part of his work on the vessel, and contribute to the function of the vessel, or its mission or operation. Offshore Company v. Robison, 266 F.2d 769, 779 (5th Cir.1959).

Summary judgment in Jones Act cases is rarely appropriate and the determination should ordinarily go to the jury. Buras v. Commercial Testing & Engineering Co., 736 F.2d 307 (5th Cir.1984), White v. Valley Line Co., 736 F.2d 304 (5th Cir.1984). However, summary judgment is proper where “the underlying facts are undisputed and the record reveals no evidence from which reasonable persons might draw conflicting inferences about these facts.” White, supra at 305, quoting Bertrand v. International Mooring & Marine, Inc., 700 F.2d 240, 244 (5th Cir.1983), cert. denied, — U.S. -, 104 S.Ct. 974, 79 L.Ed.2d 212 (1984).

The facts before the Court are contained in a portion of plaintiff’s second deposition. The plaintiff stated he has been doing long-shoring work for at least 14 years, is a member of the longshoreman’s union which classifies him as a longshoreman, and he carries an “A” card entitling him to priority in work assignments. The plaintiff obtains work by going to the union hall to determine what is available on a given day, he is hired for a particular day, and when the job ends he returns to the union hall to be hired out again. All of his longshoring work for the past 15 years has been for stevedoring companies where the work order has come through the union hall. (Deposition pp. 7-10). Before his accident plaintiff was a “regular” on “Robertson’s” gang, but on the day of the accident Robertson wasnt working so plaintiff “went looking for work” which he found with “Bowman’s” gang. (Deposition pp. 41-42). Plaintiff does not consider himself to be a member of the crew which mans ITO’s crane barge. (Deposition p. 20). Plaintiff’s work as a longshoreman is performed on the grain barges, and once he gets off the grain barge he is not working. (Deposition p. 28).

The facts as presented to the Court are that plaintiff worked on a day to day basis wherever the union hall assigned him to work. Plaintiff usually worked with Robertson’s gang but if his gang did not have work plaintiff worked wherever he could. Plaintiff only worked on the grain barges and he did not work on ITO’s crane barge.

A summary judgment motion requires that the adverse party not “rest upon the mere allegations or denials of his pleadings, but his response, by affidavits or as otherwise provided in this rule; must set forth specific facts showing that there is a genuine issue for trial.” Fed.R.Civ.P. 56. Plaintiff has produced no facts in support of his contention that he was “assigned to [ITO’s crane barge, the] DENISE M as a work base,” (memorandum in opposition p. 2) “on a more or less permanent basis” (memorandum in opposition p. 15).

The Fifth Circuit has repeatedly held that seaman status requires a "... vessel relationship that is substantial in point and time and not merely spasmodic”. White, supra at 306, Bertrand, supra at 247, Jones v. Mississippi River Grain Elevator, 703 F.2d 108 (5th Cir.1983). Because the plaintiff in the instant case received his employment through the union hall on a day to day basis, on any given day he might work for ITO with the DENISE M, or at some other place, or for some other stevedoring company. This does not constitute a “substantial” vessel relationship.

In addition, the Court notes the Fifth Circuit decision which affirmed the denial of seaman status where the plaintiff’s primary responsibilities were only incidental to a vessel. Prinzi v. Keydril Co., 738 F.2d 707 (5th Cir.1984), Longmire v. Sea Drilling Corporation, 610 F.2d 1342 (5th Cir.1980). Mr. Bogan’s responsibilities were only on the grain barge and his relationship to the crane barge was incidental.

REASONS FOR GRANTING ITO’S MOTION FOR SUMMARY JUDGMENT UNDER 33 U.S.C. § 905(b).

Plaintiff stated in his deposition that when the accident happened “... we had just finished unloading one section where we had covers. Then we was pulling the covers for the next cargo to be loaded to the ship.” Plaintiff claims the crane operator employed by ITO and on ITO’s crane barge started pulling the second set of barge covers before he was signaled to do so, and thus was a contributing cause of his injury. (Deposition p. 44). This allegation is the basis of ITO’s liability under § 905(b).

33 U.S.C. § 905(b) provides in part:

In the event of injury to a person covered under this chapter caused by the negligence of a vessel, then such person, or anyone otherwise entitled to recover damages by reason thereof may bring an action against such vessel as a third party in accordance with the provisions of 933 of this title....
If such person was employed by the vessel to provide stevedoring services, no such action shall be permitted if the injury was caused by the negligence of persons engaged in providing stevedoring services to the vessel.

Assuming plaintiff’s allegations as true for purposes of this motion, the negligence of the crane operator is clearly “the negligence of persons engaged in providing stevedoring services” and plaintiff’s claim against ITO is barred by 905(b).

The instant case is controlled by Durr v. Global Marine, Inc., 673 F.2d 740 (5th Cir.1982) and Cavalier v. T. Smith & Sons, Inc., 668 F.2d 861 (5th Cir.1982).

In Durr the crane operator negligently injured the plaintiff while moving equipment with a crane, and despite plaintiff’s argument that the crane operator’s negligence was ship related and not that of a stevedore, the Court held plaintiff and the operator were acting as stevedores and the 905(b) limitation applied. Similarly, Cavalier held the plaintiff longshoreman could not recover under § 905(b) for injuries sustained where either the crane operator, or the flagman signalling the operator, negligently allowed suspended cargo to fall on the plaintiff.

Plaintiff attempts to show vessel negligence by alleging the accident was caused by movement of the barge, which is analogous to movement of a barge in navigation, but this is not supported by plaintiffs deposition, nor by the portions of the deposition of David Lyons cited by thé plaintiff.

Plaintiff incorrectly cites Chiasson v. Rogers Terminal and Shipping Corporation, 679 F.2d 410 (5th Cir.1982) as support for his theory that movement of the barge constitutes vessel negligence. In Chias-son, the Fifth Circuit held there was sufficient evidence from which the jury could find the injury caused by movement of a barge could have been prevented by a stern winch, therefore the vessel owner was negligent in not outfitting its vessel with a stern winch.

Plaintiff urges the Court to reject the “single mission”. analysis as the Second Circuit rejected it in Smith v. Eastern Seaboard Pile Driving, Inc., 604 F.2d 789 (2nd Cir.1979). This Court agrees with the Second Circuit that merely because longshor-ing activities are being conducted it does not follow that all persons at the site are engaged in longshoring activities. However, in this case the allegedly negligent party was a stevedore operating the crane unloading the barge, and not supervisory personnel as in Smith. It is hot necessary to decide here where the line should be drawn in a close case between those engaged in stevedoring services and those whose activities constitute vessel negligence, because the Court has no difficulty finding ITO’s crane operator was engaged in stevedoring services at the time of the accident.

REASONS FOR DENYING UNITED’S MOTION FOR SUMMARY JUDGMENT

The Court finds there are genuine issues as to material facts which preclude granting a motion for summary judgment. Specifically, it is unclear precisely how the accident occurred, which defects in the barge allegedly caused the accident, whether the defects which caused the accident existed prior to the commencement of cargo operations and whether the barge owner or charterer knew of these defects, whether the defects which caused the accident were open and obvious, and whether the alleged open and obvious defects had to be faced notwithstanding knowledge of the plaintiff.

Accordingly,

IT IS ORDERED that the motion for summary judgment by ITO Corporation is GRANTED and the motion for summary judgment by Marine Equipment Company, United Barge Company and “Certain Underwriters at Lloyds” is DENIED.


author: CEREZO, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. Angel PÉREZ-CASILLAS, Jaime Quiles-Hernández, Rafael Moreno-Morales, Rafael Torres-Marrero, Luis Reverón-Martínez, Juan Bruno-González, Nelson González-Pérez, William Colón-Berrios, Jose Ríos-Polanco, and Nazario Mateo-Espada, Defendants.
    CR. 84-0070CC.
    United States District Court, D. Puerto Rico.
    March 19, 1985.

      See also 593 F.Supp. 794.
    Daniel F. López-Romo, U.S. Atty., Gary H. Montilla, Asst. U.S. Atty., Federal Building, Chardón Avenue, Hato Rey, P.R., Stephen Clark, Criselda Ortiz, Atty. Civil Rights Div., U.S. Dept, of Justice Washington, D.C., for plaintiff.
    Federico Delgado-Torres, Hato Rey, P.R., for defendant Pérez-Casillas.
    Teodoro Méndez-Lebrón, Santurce, P.R., for defendant Quiles-Hernández.
    William Arias, Río Piedras, P.R., for defendant Moreno-Morales.
    Carlos M. Mangual-López, Hato Rey, P.R., for defendant Torres-Marrero.
    José M. Ortiz-Miller, Hato Rey, P.R., for defendant Reverón-Martínez.
    José C. Aponte, Hato Rey, P.R., for defendant Bruno-González.
    José A. Torres-Martinez, Hato Rey, P.R., for defendant González-Pérez.
    Gerardo Ortiz-del-Rivero, Federal Public Defender, David W. Román, First Asst. Federal Public Defender, Old San Juan, P.R., for defendant Colón-Berrios.
    Francisco M. Dolz-Sánchez, Old San Juan, P.R., for defendant Ríos-Polanco.
    Eduardo Caballero-Reyes, Hato Rey, P.R., for. defendant Mateo-Espada.
   ORDER

CEREZO, District Judge.

The most recent evidentiary matter has been raised by defendant William Colón-Berrios in his memorandum of law filed on March 15, 1985 urging the Court to allow evidence that Arnaldo Dario-Rosado and Carlos Soto-Arrivi had a reputation for violence and aggression. Although couched in terms of testimony of reputation for violence, movant goes beyond the reputation form of proof contemplated in Rule 405(a) and into the method of proof by specific instances of conduct provided in the more restrictive framework of Rule 405(b), Federal Rules of Evidence. The government opposes any method of proof of character of these two persons basically contending that the offenses set out in the indictment are victimless crimes, thus making Rule 404(a)(2) inapplicable and that, even assuming this rule were to apply, evidence of their violent character is irrelevant for “[a]ll the evidence already in the record shows that the two men were the aggressors in the initial shootout.” Addressing a possible 405(b) situation, it argues that “self defense is not an issue in this case.”

To determine the relevance of character evidence in the factual context of this case, one must take into account the events that triggered the indictment and the circumstances surrounding those events. Those circumstances are extensively described in the multicount indictment. The paramount event, however, is the alleged brutal assault and illegal killing by police officers of Arnaldo Dario-Rosado and Carlos Soto-Ar-rivi. This conspiracy and perjury prosecution begins and ends there. Whether you call the killing manslaughter, homicide or murder, the fact is that the illegal deprivation of human life is the central issue of this case. The conspiracy charged is to conceal “that Arnaldo Dario-Rosado and Carlos Soto-Arrivi had been unlawfully brutalized and killed by officers of the Police of Puerto Rico in the vicinity of the Channel 7 television tower at Cerro Maravilla in the Toro Negro area of Puerto Rico on July 25, 1978.” All of the perjury charges are based on alleged false versions of the killing given under oath by the several officers during depositions and before a grand jury. The United States requested and was allowed time and again to probe into the details of the scene of the killing and of' the killing itself. The Court recognized that this was necessary to meet its burden of proof on the conspiracy and penury counts. It was so stated in the order denying severance and repeated throughout the government’s case in chief upon ruling on objections raised by defendants on evi-dentiary matters. The United States was allowed to probe into the why, who, how, when and where of the killing itself in proving the charges. The defense was admonished that the United States could not meet its burden of proof by presenting this case in a vacuum. The Court now confronts the same attempts from the government that were made by the defense. They argue that the conspiracy and perjury offenses are “victimless” crimes.

One cannot read this indictment and still hold that the particular conspiracy and perjury charges filed in this case are victimless crimes. The indictment and the presentation of evidence by the government during the past two weeks focus on one thing only: the brutal and illegal deprivation of human life. Carlos Soto-Arrivi and Arnaldo Dario Rosado are undisputably portrayed as the victims of these defendants, charged as co-conspirators and as perjurers because in one way or another they are alleged to have been linked with the killings. The underlying, uncharged offense is the killings; the charged offenses the concealment and lying about those killings. The main question behind it all is whether the killing of Dario-Rosado and Soto-Arrivi was a brutal and illegal killing or in self defense. The government must show that the first is the true version as opposed to the theory presented in deposition and grand jury testimony that the police acted to repel an aggression. In proving their theory the government cannot avoid depicting as victims the two persons allegedly killed while in a state of inde-fense, in custody and on their knees. And rightly so. But the government cannot do that and at the same time claim a victimless crime.

This, notwithstanding, the admissibility of character evidence of a victim under Rule 404(a)(2) depends, as all evidence must, on its relevance. The United States contends that “there is no issue in this case as to which evidence of the violent character of victims is relevant.” It also urges that all the evidence already in the record shows that Soto-Arrivi and Dario-Rosado were the aggressors in the initial shootout and that there is no dispute that those defendants who were involved in the initial shootout acted at that time in self-defense. The flaw in this reasoning is that by adopting it the Court would be allowing the government to impose its view of the case on the defense with the concomitant restriction on the scope and force of the evidence. To begin with one cannot accurately state that all evidence of record shows the deceased as the aggressors. There was a remark to that effect by one of several key government witnesses. There has been substantial evidence which could well cast doubt on that in the jury’s mind. Again, if we were to adopt the argument that self-defense was a situation present only in the first shootout, the Court would, in effect, be cornering the defendants to develop their defense departing, not from their own theory of the case as reflected by their original version set forth in depositions and grand jury appearances, but from the government’s own view of the facts. If the Court rules on questions of relevance and admissibility of evidence proffered by the accused taking into consideration only the evidence already admitted in support of the government’s theory while disregarding the defendants’ theory and the relevant issues flowing therefrom, the defendants would be bound by what the United States dictates is relevant.

The cases cited by the government in its brief involve factual situations which are totally different from ours. In United States v. Kelley, 545 F.2d 619 (8th Cir.1976), there was no evidence proffered by defendant related to self-defense or justification and those issues were not before the Court. In United States v. Housewright, 568 F.2d 516, 519 (7th Cir.1977), the Court’s ruling on the matter of the decedent’s bad reputation was based on the fact that there was not “a shred of evidence to suggest that what happened was to any degree in self-defense, regardless of what a bad character the decedent may have been known to be.” In the case before us the situation of self-defense, forms a part of the officers’ version of what happened at Cerro Maravil-la on July 25, 1978 and evidence of it is already before the finder of fact in the form of depositions and grand jury testimony given by defendants and presented in the case by the government itself, albeit to show that such versions were false and fabricated as compared to the version given by government witnesses that signal brutality and illegality.

We find that the evidence of violent disposition or violent acts by the deceased are relevant on the issue, already raised, of self-defense and on the questions of whether or not they were the first aggressors, the likelihood that the deceased may have surrendered and the need for the defense measures taken by the defendants to confront them. The deceased themselves and their character are important elements to be considered in reconstructing the situation at the time of the killing. Needless to say, concerning a self-defense issue, a group of Boy Scouts is not the same as a group of Hell’s Angels. If there is evidence such as the one offered by defendant William Colón-Berrios, it is relevant to the development of various aspects of their defenses and to the credibility of their version of how things happened.

Under the general and unlimited mandate of Rule 404(a)(2) and the broad definition of relevance in Rule 401, the defendants may introduce evidence in form of reputation or opinion testimony given by a witness with sufficient personal knowledge that the deceased were violent or dangerous persons. As to the form of proof by using specific instances of past conduct of the deceased to demonstrate their aggressiveness or dangerousness, the Court finds that it too can be properly utilized for these traits of the victims are pertinent and essential to an evaluation of the situation of self-defense claimed. Although the Court finds that Rule 405(b) means no proof ought to be allowed as having forceful probative value in support of' self-defense that substantially outweighs its prejudicial effect, precisely because of its potential for prejudice the Court will not allow presentation of specific instances of conduct “unless defendants first make a proffer out of the presence of the jury of such evidence in order to show a good faith basis and thus avoid the possibility of fabrication or false instances going before the jury.

SO ORDERED.

      . Paragraph 2 of the conspiracy count which states the purpose of the conspiracy.

      . In our order of February 27, 1985 denying severance we said:
      Although none of the defendants are charged with murder they are accused of conspiring to conceal a murder. The government cannot meet its burden and rest its case by merely proving that defendants combined and ‘conspired to obstruct justice.’ The underlying premise behind the charges described in the indictment requires proof that the government’s version of how things happened is the true one. It must prove beyond a reasonable doubt that the events in Cerro Maravilla occurred as it alleges they did occur and that all defendants knowingly conspired to hide this from the authorities conducting investigations. Proof of such events would have to be presented against each defendant even if each one were to be tried separately. Proof of the government's version of what occurred at Cer-ro Maravilla on July 25, 1978 is an essential trier in establishing the charges in this case against defendants whether tried separately or jointly. In our August 22, 1984 Order we clearly stated that the Cerro Maravilla scenario would have to be reenacted in this case. (Page 3)

      . Page 3 of its trial brief filed on March 15, 1985.


author: DAVID L. RUSSELL, District Judge.

text:
    John Dale HARRIS, Plaintiff, v. FARMERS INSURANCE COMPANY, INC., a Kansas corporation, Defendant.
    No. Civ. 84-1133-R.
    United States District Court, W.D. Oklahoma.
    March 20, 1985.

      Clifton D. Naifeh, Miller & Naifeh, Norman, Okl., for plaintiff.
    David W. Edmonds, Niemeyer, Edmonds, Noland, Alexander & Hargrave, Oklahoma City, Okl., for defendant.
   ORDER

DAVID L. RUSSELL, District Judge.

The Plaintiff brought this action for bad faith refusal to pay “med pay” benefits against the Defendant, his automobile insurance carrier. The Defendant filed a Motion for Summary Judgment in its favor pursuant to Fed.R.Civ.P. 56, asserting that the policy in question does not afford med pay coverage to the Plaintiff’s accident. The motion has been fully briefed and the Court is now prepared to dispose of it with this Order.

The facts relevant to the Motion for Summary Judgment are undisputed. On July 31, 1983 the Plaintiff was operating his motorcycle on Shields Boulevard in Moore, Oklahoma, when the vehicle encountered a defect in the roadway. The Plaintiff apparently lost control of the motorcycle and was thrown to the street. While he was lying on the street, the Plaintiff was struck by an automobile. As a result of the injuries sustained the Plaintiff incurred medical expenses allegedly in excess of ten thousand dollars.

At the time of the accident the Plaintiff was the holder of three automobile insurance policies issued by the Defendant, two of which are relevant to this case. One policy, which covered a 1976 Chevrolet Monza owned by the Plaintiff, afforded med pay coverage in the amount of five thousand dollars under the following provision:

[Allstate agrees] to pay all reasonable expenses actually incurred within one year from the date of the accident for necessary medical services:
(D) to or for a named insured or a relative who sustains bodily injury, caused by accident,
(1) while occupying the described automobile or a non-owned automobile, provided the actual use of such automobile is with the permission of the owner, or
(2) through being struck by a motor vehicle while not occupying any other motor vehicle, [emphasis added].

The term “occupying” is defined in the policy as “in or upon or entering into or alighting from.” The other policy relevant to this case covered the Plaintiff’s motorcycle, and afforded no med pay coverage.

There were two potential questions of fact which have since been resolved during the course of briefing the motion. First, the Defendant apparently disputed that the Plaintiff had been injured by being “struck by a motor vehicle.” However, the Defendant has now abandoned this position, recognizing in its reply brief that the issue of coverage had been “narrowed” to the extent that the Plaintiff’s ability to recover is “dependent upon a resolution of whether the plaintiff was injured while not occupying a motor vehicle.” Second, the Plaintiff initially asserted that he had purchased med pay coverage on two different vehicles, and was thus entitled to stack and recover ten thousand dollars in coverage. However, the Plaintiff presented nothing to support this contention, while the Defendant presented evidence which shows that the Plaintiff did not purchase the second med pay coverage until two weeks after the accident. Thus, the Plaintiff is entitled to receive, if at all, the benefits of only one med pay provision.

These factual questions having been resolved, the material facts are undisputed and this case is ripe for disposition, at least as to the liability questions in the suit. The Court therefore proceeds to address the issues raised in the Defendant’s Motion for Summary Judgment.

I.

As the language quoted above demonstrates, the policy in question affords med pay coverage in either of two situations: (1) when the insured is injured while occupying the insured vehicle, the 1976 Chevrolet Monza; or, (2) when the insured is struck by an automobile while not occupying another vehicle. It is the Defendant’s contention that the Plaintiff herein falls into neither category. The Defendant argues that provision (D)(2) is inapplicable because the Defendant was occupying, or “alighting from,” the motorcycle, a vehicle not covered by the policy, at the time of the accident. And the Defendant finds provision (D)(1) inapplicable because the Defendant was not occupying the covered vehicle, the 1976 Chevrolet Monza, at the time of the accident. The Court will consider the applicability of each of these policy provisions seriatim.

A.

The Defendant’s first assertion is that the Plaintiff was “alighting from” the motorcycle at the timé of the accident. While the Defendant does not dispute that the Plaintiff was thrown from the motorcycle involuntarily before being struck by an automobile, the insurer nevertheless contends that such activity amounts to “alighting from” the motorcycle. The Plaintiff on the other hand, argues that the phrase “alighting from” is limited to a voluntary exit from a vehicle, and that the Plaintiff was therefore not “alighting from” the motorcycle.

The Defendant’s policy does not define the phrase “alighting from.” Many courts have considered the phrase and applied a judicial definition. E.g., St. Paul-Mercury Indemnity Co. v. Broyles, 230 Miss. 45, 92 So.2d 252 (1957). See generally 42 A.L.R.3d 501, 518 (1972). Typical is the following:

A person is not in the process of alighting if, at the time of the accident, he has completed all acts normally performed bjr persons getting out and away from the automobile under similar circumstances and if he has embarked on conduct entirely distinct from acts reasonably incident to making an exit out of and away from the car.

Tyler v. Insurance Co. of North America, Inc., 381 F.Supp. 1356, 1360 (N.D.Ala.1974), rev’d. on other grounds, 539 F.2d 1072 (5th Cir.1976). However, the cases in which the term “alighting” has been defined are inapposite and provide no guidance to the Court for two reasons. First, not one case of which the Court is aware involves an injured party who has been thrown involuntarily from a vehicle. In each of the cases studied by the Court the injured party voluntarily exited a vehicle before being struck. Second, it is axiomatic that ambiguity in an insurance policy must be construed in favor of the insured. E.g., Unigard Insurance Co. v. Studer, 536 F.2d 1337, 1339 (10th Cir.1976). The courts which have defined “alighting from” have done exactly that: They have construed broadly a policy provision which affords coverage to one alighting from a vehicle, to the benefit of the insured. However, a broad construction of the phrase “alighting from” in this case would work to the insurer’s benefit, as the policy provision in question denies coverage to one alighting from a vehicle. Thus, the Court declines to adopt the judicial definitions of the phrase previously expounded by other courts.

It is the opinion of the Court that the phrase “alighting from” is ambiguous. The policy fails to define the term, and it is impossible for either of the parties to determine whether incidents such as the one in the ease at bar are covered by the policy. Accord, Nelson v. Iowa Mutual Insurance Co., 163 Mont. 82, 515 P.2d 362, 364 (1973). This being so, the term must be construed in favor of the insured and against the insurer. Studer, 536 F.2d at 1339; Tipton v. Pike, 550 F.Supp. 191, 194 (W.D.Okla.1982), quoting Dayton Hudson Corp. v. American Mutual Liability Insurance Co., 621 P.2d 1155, 1158 (Okla.1980); Wilson v. Travelers Insurance Co., 605 P.2d 1327, 1329 (Okla.1980). The Court therefore concludes that the Plaintiff, who was involuntarily thrown from a motorcycle into the path of an oncoming automobile, was not alighting from the vehicle, for purposes of the policy, when struck by the automobile. As the Plaintiff was not alighting from a vehicle at the time of the injury, he was not occupying “any other motor vehicle” and provision (D)(2) affords med pay coverage for the Plaintiffs injuries.

B.

Assuming arguendo that the Plaintiff was alighting from the motorcycle, and therefore occupying it, at the time of the accident, he is nevertheless' entitled to med pay coverage in this case. Provision (D)(1) affords such coverage to a named insured injured while occupying the covered vehicle, a 1976 Chevrolet Monza. Although the Plaintiff was occupying a different vehicle at the time of the accident, the legal mechanism of stacking allows him to aggregate all med pay coverage afforded by the policies issued to him as a named insured by the Defendant. See Duckett v. Allstate Insurance Co., 607 F.Supp. 727 (W.D.Okla.1984) (per Russell, J.); Gray v. Allstate Insurance Co., No. CIV-82-1173-W (W.D.Okla. May 17, 1983) (per West, J.). Cf. Aetna Casualty & Surety Co. v. State Board of Property & Casualty Rates, 637 P.2d 1251, 1256 (Okla.1981) (“[I]t is unjust to permit the insurer to avoid liability by asserting other insurance clauses denying the insured from receiving that for which he paid a premium.”). Thus, the Plaintiff is entitled to the med pay coverage afforded by provision (D)(1) notwithstanding the fact that he was occupying his motorcycle, rather than the covered vehicle, at the time of the accident.

C.

As the reasoning above demonstrates, the Plaintiff is entitled to five thousand dollars worth of med pay coverage whether or not he was alighting from his motorcycle at the time of the accident. It is thus clear that the Defendant is not entitled to summary judgment on this part of the Plaintiff’s claim, and its Motion for Summary Judgment is denied to that extent. The Plaintiff is, however, entitled to summary judgment on the liability portion of the claim, notwithstanding the fact that he has not motioned the Court for such relief. Accordingly, judgment is granted in favor of the Plaintiff as to liability on the availability of med pay coverage.

II.

The remaining issue raised by the Defendant’s Motion for Summary Judgment is whether, on the facts of this case, the Plaintiff can maintain his claim for the tort of bad faith. Because the Court concludes that he cannot, the Defendant’s motion is granted to that extent.

The Plaintiff argues that the Defendant failed to deal fairly, and in good faith with him by denying med pay coverage. The Plaintiff asserts that, as he is clearly entitled to coverage under provision (D)(2) directly, or under provision (D)(1) through stacking, the Defendant acted in bad faith by refusing to reimburse him for medical expenses incurred in the accident and forcing him to bring this action.

The Court does not agree. Although the Court has determined that the Plaintiff is entitled to med pay coverage under the policy, “[rjesort to a judicial forum is not per. se bad faith or unfair dealing on the part of the insurer regardless of the outcome of the suit.” Christian v. American Home Assurance Co., 577 P.2d 899, 905 (Okla.1978). See also McCorkle v. Great Atlantic Insurance Co., 637 P.2d 583, 587 (Okla.1981). The reasonableness of the insurer’s conduct in denying the insured’s claim must be determined in light of the law applicable to the claim at the time of denial. Timmons v. Royal Globe Insurance Co., 653 P.2d 907, 914 (Okla.1982).

The Court is satisfied that only an inference of reasonableness can be drawn from the Defendant’s conduct herein, given the current state of the law. As this Court has previously noted, an insurer does not act in bad faith simply by refusing to stack med pay coverage, as there is no controlling authority governing the stacking issue. Duckett v. Allstate Insurance Co., 607 F.Supp. 728, 731-732 (W.D.Okla.1985). And the Defendant cannot be deemed to have acted in bad faith by litigating the meaning of the phrase “alighting from”, as the Court has found it ambiguous. The parties herein had a legitimate dispute as to the construction of that phrase, and the Defendant “had a right to have this dispute settled in a judicial forum.” Manis v. Hartford Fire Insurance Co., 681 P.2d 760, 762 (Okla.1984). Thus, regardless which theory justifies the Plaintiff’s recovery, the Defendant did not act in bad faith by denying the claim. Accordingly, the Defendant’s Motion for Summary Judgment is granted insofar as it challenges the Plaintiff’s claim for the tort of bad faith.

III.

In summary, the Court determines the following:

1. The Defendant’s Motion for Summary Judgment is denied insofar as it seeks judgment on the med pay issue.
2. Summary judgment is granted in favor of the Plaintiff on the med pay issue.
3.. Unless the parties reach an agreement concerning the amount of medical expenses incurred by the Plaintiff, a hearing on damages will be held on the Court’s motion docket of April 3, 1985.
4. The Defendant’s Motion for Summary Judgment is granted insofar as it challenges the Plaintiff’s claim for the tort of bad faith.


author: JARVIS, District Judge.

text:
    Walter K. BUSH, Plaintiff, v. Christine L. JOHNSON, City Manager for the City of Norris; Armond Arnurius, Mayor for the City of Norris; Theron J. Fields, Robert Gregory, Dean Hackler, Drew Hammond, Members of the City Council for the City of Norris; and The City of Norris, Tennessee, Defendants.
    No. CIV. 3-84-765.
    United States District Court, E.D. Tennessee, N.D.
    March 20, 1985.

      David A. Stuart, Clinton, Tenn., for plaintiff.
    Robert H. Watson, Jr., Richard T. Sowell, Knoxville, Tenn., for defendants.
   MEMORANDUM

JARVIS, District Judge.

This cause of action for violation of civil rights pursuant to 42 U.S.C. § 1983 came on for trial before a jury on Thursday, March 14, 1985. At the close of plaintiff’s case, the Court granted defendants’ motion for directed verdict.

Plaintiff alleged in his Complaint and attempted to prove at trial that he had a property interest in his job as Public Safety Director for the City of Norris, Tennessee; that he had a legitimate claim of entitlement to continued employment; and that he was fired from his job without any notice of the reasons for dismissal or opportunity for a hearing. Plaintiff alleged that these acts of defendants deprived him of property without due process of law, in violation of the Fourteenth Amendment to the United States Constitution, giving rise to a cause of action under 42 U.S.C. § 1983.

On motion for directed verdict, defendants asserted that plaintiff had proved no property interest in his employment. In response, plaintiff asserted that he had proved a property interest in employment: (1) as a probationary employee under the personnel policy; (2) as a contractual employee under the personnel policy; and (3) under an oral contract with the City Manager.

Property interests are created and their dimensions are defined by existing rules or understandings that stem from an independent source such as state law. Board of Regents v. Roth, 408 U.S. 564, 577, 92 S.Ct. 2701, 2709, 33 L.Ed.2d 548 (1972). To have a property interest in employment, a person must have more than an abstract need or desire for it. Id. “He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it.” Id. Such a legitimate claim of entitlement can arise from mutually explicit understandings. Id. Perry v. Sindermann, 408 U.S. 593, 601, 92 S.Ct. 2694, 2699, 33 L.Ed.2d 570 (1972).

Whether plaintiff had a property interest in employment depends on whether one was created by or under Tennessee law. “The State of Tennessee does not-grant, by statute or otherwise, a right to continued public employment.” Duncan v. The City of Oneida, 564 F.Supp. 425, 426 (E.D.Tenn.1983), aff'd 735 F.2d 998 (6th Cir.1984). However, “[c]ity charter provisions and ordinances may give rise to proprietary rights in employment in Tennessee, [citations omitted] The courts of this State have looked to those provisions in determining whether employees have attained sufficient tenure to be entitled to requested hearings.” Id. See also, Blackwell v. Quarterly County Court of Shelby County, 622 S.W.2d 535, 539 (Tenn.1981) (dicta) (Except as affected by a tenure or civil service system, a public employee ordinarily is not deemed to have a contract of employment within the meaning of the “impairment of contracts” provisions of the state and federal constitutions.)

The proof in this case showed that the City of Norris had in force a personnel policy which provided that “each new employee shall be considered a probationary employee for the first 12 months” and may be removed by the City Manager after the first month if the employee in the Manager’s opinion is not performing the duties satisfactorily. (Exh. # 1). The personnel policy provided for no pre-termination hearing or notice of reasons for discharge. (Id.). The Tennessee Supreme Court has held that a probationary employee under a civil service system which provides that the employee can be dismissed if he has not shown sufficient aptitude to continue in his position and that such dismissal can be made without a formal hearing has no proprietary interest in continued employment. See, State v. City of Memphis, 224 Tenn. 180, 452 S.W.2d 346 (1970). Cf. Huddleston v. City of Murfreesboro, 635 S.W.2d 694 (Tenn.1982) (A probationary employee has a proprietary interest in public employment where the city charter provides that any person removed from office or dismissed from employment by the City Manager can appeal to the City Council and is entitled to a hearing as to the reasons or justifications for his removal or discharge.) In this case, the proof showed that under the personnel policy plaintiff could be discharged without a hearing if in the opinion of the City Manager he was not performing his job satisfactorily. .Therefore, under the law of Tennessee, plaintiff had no property interest in his employment.

Alternatively, plaintiff argued that the proof showed that he was a contractual employee pursuant to § 1.1801(d) of the personnel policy. That section provides that all city employees are subject to the personnel policy provisions except the City Manager, the City Council and persons hired on a contractual basis. (Exh. # 1). The proof showed that the only persons hired on a contractual basis were the city attorney and garbage collectors. Plaintiff testified that he believed he was a department head and therefore not subject to the personnel policy. However, no proof was introduced to show that this was any more than a mere belief of plaintiff. The Court is of the opinion that there was no proof on which reasonable minds could differ to show that plaintiff was the type of employee who would be employed on a contractual basis under § 1.1801(d). Further, even assuming plaintiff was employed on a contractual basis pursuant to § 1.1801(d), there was no proof that plaintiff could not have been terminated at the will of the City Manager. Indeed, Bob Gregory, a member of the City Council at the time of plaintiffs discharge, testified that the city attorney, who was employed on a contractual basis, was employed at the pleasure of the City Council and the City Manager. Therefore, persons employed on a contractual basis with the City are employees at will and have no property interest in their employment. See, Duncan v. The City of Oneida, Tennessee, 735 F.2d 998, 1000 (6th Cir.1984) (“Furthermore, even if the job was classified as ‘permanent’ it still could have been terminable at will.”)

Finally, plaintiff argues that notwithstanding the personnel policy, he was employed pursuant to an oral contract for a term of employment of two years. Viewing the evidence in the light most favorable to the plaintiff, as is required on a motion for directed verdict, the proof showed that the City Manager told plaintiff that his contract of employment would coincide with the two-year term of the newly elected City Council. Therefore, plaintiff argues that he had a mutually explicit understanding which gave rise to a legitimate claim of entitlement sufficient to create a property interest. The Sixth Circuit Court of Appeals has held that a nontenured individual employed pursuant to public civil service system has no “ ‘expectancy’ of continued employment, whatever may be the policies of the institution, where there exists a statutory tenure system.” Ryan v. Aurora City Bd. of Ed., 540 F.2d 222, 227 (6th Cir.1976), cert. den. 429 U.S. 1041, 97 S.Ct. 741, 50 L.Ed.2d 753 (1977). The Tennessee Supreme Court also has stated in dictum that ordinarily a public employee has only those rights which are granted by the tenure system. See, Blackwell, 622 S.W.2d at 539. In this case, the personnel policy provides for a probationary period of one year after which time the employee becomes a permanent employee with specified rights under the personnel policy. Therefore, the City of Norris, at the time of plaintiff’s employment, had in effect a tenure system, and plaintiff’s rights in continued employment must be determined by the tenure system. As previously discussed, the tenure system gave plaintiff no property interest in his employment. At most, plaintiff had a unilateral expectation of entitlement which is insufficient to create a property interest. See, Board of Regents v. Roth, 408 U.S. at 577, 92 S.Ct. at 2709. Since plaintiff has failed to prove that he had a protected property interest, the requirements of procedural due process do not apply. See, City of Oneida, 564 F.Supp. at 427.

Plaintiff also alleged that defendants violated his First Amendment right to religious freedom by making a condition of continued employment that he attend a church of his supervisor’s choice. Even if a public employee is without tenure or otherwise has no property interest in his employment, plaintiff may establish a claim if the decision not to rehire him was based on his exercise of constitutionally protected First Amendment freedoms. See, Daulton v. Affeldt, 678 F.2d 487, 490 (4th Cir.1982). Plaintiff must establish by a preponderance of the evidence that his exercise of religious freedom (i.e. his failure to attend his supervisor’s church) was a substantial or motivating factor in the decision to terminate him. Id. If defendant produces evidence that the reason for plaintiff’s termination was not his failure to attend his supervisor’s church but rather was for other legitimate reasons, the burden is on plaintiff to show that the stated reasons for termination were pretext and that the actual reason was the exercise of a constitutionally protected right. See, Watts v. Board of Curators, University of Missouri, 495 F.2d 384, 389 (8th Cir.1974). In this case, the proof showed that plaintiff had allowed on-duty police officers to shoot pool and play poker in his home in violation of city policy. Defendants testified that the reason for plaintiffs termination was this violation of city policy. Plaintiff, offered proof to show that the real reason for his termination was his refusal to route traffic through the City of Norris on Celebration Day. Plaintiff offered no proof to show that the real reason for his termination was his failure to attend his supervisor’s church. Therefore, no proof exists on which reasonable minds could differ to show that plaintiff was terminated for a constitutionally protected right.

For the foregoing reasons, it is ORDERED that the jury is directed to return a Verdict in favor of defendants. It is further ORDERED that this case be and the same hereby is DISMISSED.

Order accordingly.


author: DITTER, District Judge.

text:
    Richard L. DERAMO, Plaintiff, v. CONSOLIDATED RAIL CORPORATION, Defendant.
    Civ. A. No. 83-2423.
    United States District Court, E.D. Pennsylvania.
    March 21, 1985.
    Jeffrey L. Pettit, Perrin C. Hamilton, Hepburn, Willcox, Hamilton & Putman, Philadelphia, Pa., for plaintiff.

      Hermon M. Wells, John R. Jenchura, Dennis J. Morikawa, Philadelphia, Pa., for defendant.
   MEMORANDUM AND ORDER

DITTER, District Judge.

In this action plaintiff alleges defendant, Consolidated Rail Corporation (Conrail), improperly terminated his employment. Plaintiffs attack advances on two fronts. First, plaintiff claims his termination was a breach of contract. In support of this theory, plaintiff asserts he was the beneficiary of an implied employment contract, a contract which resulted from plaintiff’s relocating to Philadelphia from New York in justifiable reliance upon Conrad’s promises of promotion and/or continued employment. Secondly, plaintiff, a man in his mid-50’s, contends his termination constituted age discrimination under both state and federal law. Presently before me is Conrad’s motion for summary judgment on the breach of contract claim. In its motion, defendant maintains there existed no implied employment contract but even if there was such a contract, recovery for its breach would be barred because plaintiff’s exclusive remedy is under the age discrimination statutes. For the reasons that follow, defendant’s motion will be refused.

In support of its claim that plaintiff’s exclusive remedy is the one available under the age discrimination statutes, defendant has cited an impressive array of cases starting with Bonham v. Dresser Industries, Inc., 569 F.2d 187 (3rd Cir.1977), cert. denied, 439 U.S. 821, 99 S.Ct. 87, 58 L.Ed.2d 113 (1979), and culminating in Bruffett v. Warner Communications, Inc., 692 F.2d 910 (3d Cir.1982). This line of authority has been followed almost without question. See Kamens v. Summit Stainless, Inc., 586 F.Supp. 324 (E.D.Pa.1984); Watkinson v. Great Atlantic and Pacific Tea Co., Inc., 585 F.Supp. 879 (E.D.Pa.1984). Superficially, the holding of these cases appears both clear-cut and supportive of defendant’s position. However, when reduced to their most common denominator, it becomes evident that the situation in the case sub judice is quite different from that presented in the above cited cases. An analysis of the strict holding in Bruffett, the most recent Third Circuit decision, is helpful.

In Bruffett, the plaintiff was hired by the defendant as a temporary employee. Later, plaintiff was informed he would be given permanent employment upon “successful completion of both medical and security examinations.” Bruffett, 692 F.2d at 911. When the required medical exam uncovered that plaintiff faced the significant probability of serious, future medical problems, defendant reneged on its offer of permanent employment, whereupon plaintiff filed suit claiming, inter alia, violation of the Pennsylvania Human Relations Act, Pa.Stat.Ann. tit. 43, §§ 951 et seq. (Purdon 1964 & Supp.1982) (“PHRA”) and “wrongful termination of an at-will contract of employment.” Bruffett v. Warner Communications, Inc., 534 F.Supp. 375, 377 (E.D.Pa.), aff'd, 692 F.2d 910 (1982). It was the plaintiff’s position that to permit employee termination because of a medical handicap would be to permit violations of the “public policy as reflected in the [PHRA].” Bruffett, 534 F.Supp. at 378.

In addressing Bruffett’s public policy argument, the Court of Appeals did not disagree with the existence of the public policy alleged by plaintiff. However, because the PHRA was a comprehensive legislative scheme, the court held an aggrieved party must look to the remedies available under the legislation announcing the public policy. In essence, the court recognized the existence of the public policy advanced by plaintiff but held that a judicially created cause of action was not necessary to promote the policy, there being an adequate rémedy created by the legislature. Furthermore, allowing a judicially created cause of action to proceed would be to permit an intentional bypass of the legislative remedy for the perceived problem.

Bruffett and the cases which came both before and after it refused to expand what has been called a “public policy” exception to the at-will employment doctrine. Recovery under this exception is recognized as having its roots in tort theories. See Pierce, Mann & Roberts, Employee Termination at Will: A Principled Approach, 28 Vill.L.Rev. 1, 25-36. To succeed, a plaintiff invoking the public policy exception must show his discharge was not for an employment related reason but rather for a reason violative of public policy. For example, in Reuther v. Fowler & Williams, Inc., 255 Pa.Super. 28, 386 A.2d 119 (1978), the Pennsylvania Superior Court found the plaintiff had stated a claim by alleging his dismissal resulted not from inadequate job performance but because of his performance of jury duty, there being a public policy in favor of jury duty that would be jeopardized if such dismissals were permitted. In the Bonham line of cases, however, the “jeopardy” aspect of the public policy exception was lacking because there existed an adequate statutory cause of action. Stated briefly, the “Bon-ham cases” stand for the proposition that courts will not expand the common law public policy exception to the at-will employment doctrine to promote a public policy already benefitting from statutory protection. Indeed, in Bruffett, 692 F.2d 910, Bonham, 569 F.2d 187, Kamers, 586 F.Supp. 324, and Watkinson, 585 F.Supp. 879, the common thread is that the plaintiffs were complaining of discrimination vi-olative of state and federal anti-discrimination statutes.

Turning to the case at bar, it is true that plaintiff, like the plaintiffs in Bonham and its progeny, has alleged causes of action grounded in violations of anti-discrimination legislation and breach of contract. However, in contrast to Bonham, Mr. DeRamo’s allegations of age discrimination are independent of the allegations for his breach of contract claim. In other words, Mr. DeRamo is not asserting a violation of public policy as the sole source of both a tort exception and an implied-comtract exception to the at-will, employment doctrine. To the contrary, Mr. DeRamo’s breach of contract claim is based on his detrimental reliance upon representations made by defendants. The detrimental reliance-breach-of-implied-contract theory has been accepted by the Pennsylvania courts. See, O’Neill v. ARA Services, Inc., 457 F.Supp. 182 (E.D.Pa.1978). Furthermore, commentators have recognized the public policy tort exception as being separate and distinct from the detrimental reliance-breach of contract exception. See, Peirce, Mann & Roberts, Employee Termination At Will: A Principled Approach, 28 Vill.L. Rev. 1, 19-24. When viewed in this context, the “Bonham cases” are inopposite in that those cases deal only with the public policy tort exception. Similarly, unlike the plaintiffs in the Bonham line of cases, it is entirely possible for Mr. DeRamo to succeed on his breach of contract claim without proving discrimination. In short, plaintiff’s age discrimination claim and his breach of contract claim are factually different.

The foregoing result has been implicitly adopted by the Third Circuit Court of Appeals. See Wolk v. Saks Fifth Avenue, Inc., 728 F.2d 221 (3d Cir.1984) (Adams, J.). In Wolk, Judge Adams, after expressing his view that the Bonham court’s proclamation of the exclusivity of remedies “appears to have been tactitly rejected by the Pennsylvania Supreme Court in Fye v. Central Transportation Inc., 487 Pa. 137, 140-41, 409 A.2d 2, 4 (1979),” stated that Bruffett, which was decided after Fye, was “binding precedent”. Wolk, 728 F.2d at 223-24 & n. 3. Nonetheless, Judge Adams considered the merits of plaintiff’s breach of contract claim, apparently viewing it as separate and distinct from plaintiff’s breach of public policy claim.

In sum, I find the line of cases starting with Bonham, bars only causes of action whose factual underpinnings are grounded exclusively in the public policy tort theory of wrongful discharge. They do not bar recovery for claims grounded in the contract theory, a theory which requires a factual predicate independent of any alleged breach of public policy. Any other view of the law would limit the avenues of relief available to litigants suffering from both a discriminatory discharge and a contractual breach discharge. Surely this would not be in keeping with the intent of the Pennsylvania legislature in passing the PHRA. See Bruffett, 692 F.2d at 920-24 (Gibbons, J. dissenting).

ORDER

AND NOW, this 19th day of March, 1985, for the reasons expressed in the attached memorandum, defendant’s motion for partial summary judgment grounded in the exclusivity of remedies argument is denied. It is further ordered that defendant’s other arguments for summary judgment are denied because as to them there exists material issues of fact.