author: NORTHROP, Senior District Judge.

text:
    Mazie KELLER v. PRINCE GEORGE’S COUNTY DEPARTMENT OF SOCIAL SERVICES, et al.
    Civ. A. No. N-85-793.
    United States District Court, D. Maryland.
    Aug. 19, 1985.

      Michael H. Feldman, and Ashcraft & Gerel, Washington, D.C., for plaintiff.
    Stephen H. Sachs, Atty. Gen., and Mark J. Davis, and Nancy B. Shuger, Asst. Attys. Gen., Baltimore, Md., for defendant Prince George’s County Dept. of Social Services.
   NORTHROP, Senior District Judge.

Mazie Keller, a black woman, instituted this law suit after denial of a promotion by the Prince George’s County Department of Social Services (“Department”) and the State of Maryland. She was employed by the Department, and beginning in approximately 1980, was classified as a Case Worker Associate II. In September, 1983, she applied for promotion to the higher salaried position of Case Worker Associate III. Plaintiff claims she was denied the position because of her race.

Plaintiff asserts two causes of action in her suit: Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and section 1 of the Civil Rights Act of 1871, 42 U.S.C. § 1983. The underlying facts for both actions are identical.

The Department has moved to dismiss the section 1983 claim arguing that it is preempted in this instance by the Title VII claim. The Department contends that a 1983 action cannot be maintained for employment discrimination where Title VII provides a concurrent and more comprehensive coverage of the matter. The Department relies on a series of relatively recent decisions to support its position. The plaintiff disputes the application of these holdings to the facts of this case.

Section 1 of the Civil Rights Act of 1871 forbids any person acting under color of state law or regulation from depriving a citizen of rights secured by the Constitution and federal laws. 42 U.S.C. § 1983.

Title VII of the 1964 Civil Rights Act prohibits an employer (of at least 15 persons) to hire, discharge or discriminate against any individual with respect to any of the conditions of employment because of such individual’s, race, color, religion, sex or national origin. 42 U.S.C. § 2000e-2.

The plaintiff, Mazie Keller, alleges that she was denied a promotion by her employer because of her race or color (black). This allegation, of course, falls within the scope of Title VII. She further alleges, however, that her employer’s action was also a violation of the equal protection guarantee or clause of the Fourteenth Amendment, and that this constitutional violation is a sufficient and separate predicate deprivation of right giving rise to a section 1983 claim.

Previously, this Court has allowed a plaintiff to bring both a Title VII action for denial of promotion and a section 1983 action for violation of the equal protection clause of the Fourteenth Amendment even though both actions were based on the same alleged facts underlying the denial of promotion. Cussler v. University of Maryland, 430 F.Supp. 602 (D.Md.1977) (Northrop, C.J.). The Court is now required, however, to reconsider this holding in the light of subsequent decisions.

In Great American Fed. S. & L. Ass’n. v. Novotny, 442 U.S. 366, 99 S.Ct. 2345, 60 L.Ed.2d 957 (1979) the Supreme Court considered the concurrent application of the Civil Rights Acts of 1871 and 1964. The appellee Novotny had brought a suit under 42 U.S.C. § 1985(3) against his employers for conspiracy to deprive him of equal protection under the laws. Id. at 369, 99 S.Ct. at 2347. He alleged his company had discharged him discriminatorily because he had complained about the company’s disparate treatment of female employees. Because section 1985(3) provides remedial framework only for unequal treatment, Novotny was first required to prove a deprivation of the equal protection of a specific law. Novotny, supra at 373, 99 S.Ct. at 2349. The law under which Novotny claimed he suffered unequal treatment was Title VII of the 1964 Civil Rights Act. The question before the Court was thus “whether the rights created by Title VII may also be asserted within the remedial framework of § 1985(3).” Id. at 377, 99 S.Ct. at 2351 (emphasis in original).

The Supreme Court noted that an employee could assert separate statutory remedies for the same underlying factual occurrence if the remedies vindicated separate and distinct rights. Novotny, supra at 377-78, 99 S.Ct. at 2351-52, relying on Alexander v. Gardner-Denver Co., 415 U.S. 36, 49-50, 94 S.Ct. 1011, 1020-21, 39 L.Ed.2d 147 (1974). The Court, however, found no separate and distinct rights present in the assertion of a Title VII claim and a § 1985(3) claim based on Title VII. Furthermore, the Court found that allowing a § 1985(3) claim to proceed predicated on Title VII would effectively defeat Congress’ intention to proscribe and rectify employment discrimination through the specific procedures and remedies of Title VII. “Unimpaired effectiveness can be given to the plan put together by Congress in Title VII only by holding that the deprivation of a right created by Title VII cannot be the basis for a cause of action under § 1985(3).” Novotny, supra 442 U.S. at 378, 99 S.Ct. at 2352.

Novotny has exerted a continuing influence over subsequent decisions construing the relationship of the two civil rights acts. Whether, however, constitutional claims for equal protection that arise out of alleged employment discrimination, and are also specifically remedied by Title VII, can be the basis for a concurrent action under § 1983 has yet to be directly addressed by the Supreme Court.

Section 1983 alone cannot withstand preemption by a more specific and comprehensive statutory scheme. In Middlesex City Sewerage Auth. v. National Sea Clammers, 453 U.S. 1, 101 S.Ct. 2615, 69 L.Ed.2d 435 (1981) the Supreme Court held that “when [the state] is alleged to have violated a federal statute which provides its own comprehensive enforcement scheme, the requirements of that enforcement procedure may not be bypassed by bringing suit directly under § 1983.” National Sea Clammers, supra at 20, 101 S.Ct. at 2626, quoting with approval, Chapman v. Houston Welfare Rights Organization, 441 U.S. 600, 673 n. 2, 99 S.Ct. 1905, 1945 n. 2, 60 L.Ed.2d 508 (1979) (Stewart, J.) (dissent).

In Hall v. Board of County Commissioners of Frederick County, 509 F.Supp. 841 (D.Md.1981), this District Court’s Judge Miller indicated that in the light of Novotny “it is arguable that rights secured by Title VII may not be used as the basis for a section 1983 suit.” In a decision following Hall by seven months, and with the benefit of the National Sea Clammers holding, Judge Murray unequivocally found Title VII, because of its own comprehensive administrative mechanism, could not be the predicate violation for a cause of action under § 1983. H.R. v. Hornbeck, 524 F.Supp. 215, 222-23 (D.Md. 1981). This Court accepts without reservation this conclusion of Hornbeck. See also Irby v. Sullivan, 737 F.2d 1418, 1427-29 (5th Cir.1984); Daisernia v. State of New York, 582 F.Supp. 792, 797 (N.D.N.Y.1984). Again, however, in the instant case the state is alleged to have violated for purposes of § 1983 not Title VII, but the equal protection clause of the Fourteenth Amendment.

In Hall, supra, Judge Miller had allowed the Title VII plaintiff to continue his § 1983 claim for alleged violations of the First Amendment. Judge Miller did not apply Novotny where the plaintiff “sought redress of constitutional rights only ____ [because] [although the alleged First Amendment violation may have arisen in the same setting as plaintiff’s Title VII claims, this fact does not operate to divest plaintiff of any other claims she might have.” Hall, supra at 848.

In Hornbeck, supra, however, Judge Murray was presented with a claim of denial of equal protection under the Fourteenth Amendment in pari materia with other actions brought under the Rehabilitation Act of 1973, 29 U.S.C. § 794, the Education for All Handicapped Children Act of 1975, 20 U.S.C. § 1401, and the Civil Rights Act of 1871, 42 U.S.C. § 1983 (predicated on Title VII). Finding plaintiffs failed to exhaust the administrative procedures set out in the handicap discrimination statutes, Judge Murray, relying on Novotny, turned down all the claims, including the one based on the Fourteenth Amendment. “To assert as a constitutional claim the selfsame rights which Congress endeavored to protect through specific statutory schemes [is impermissible] until the remedies provided by the administrative process are exhausted.” Hornbeck, supra at 222.

This Court, without hesitation, agrees with this aspect of Judge Murray’s holding. In the case at bar, however, the plaintiff has concededly exhausted her administrative remedies under Title VII. Survival of her § 1983 action will, however, entitle her to a jury trial and the legal remedy of damages. There is much merit to defendant’s contention that the statutory scheme of Title VII in its entirety, with its exclusively equitable remedies and concomitant non-jury trial is defeated by allowing plaintiff to proceed on the identical factual occurrence as asserted under Title VII, complaining again of essentially employment discrimination, under the rubric of a § 1983 claim of Fourteenth Amendment unequal treatment.

Certainly there is language in the Novotny decision to support such a finding. Justice Stewart specifically discussed the ability of an employment discrimination plaintiff to circumvent “most if not all of [the] detailed and specific provisions of [Title VII]” by asserting a concurrent action under the Civil Rights Act of 1871. Novotny, supra 422 U.S. at 375-76, 99 S.Ct. at 2351. For instance, “[s]ection [1983] expressly authorizes compensatory damages; punitive damages might well follow. The plaintiff or defendant might demand a jury trial.” Id. at 376, 99 S.Ct. at 2351.

Recently, Judge Young of this District Court applied Novotny to dismiss a case identical to the instant one. In Weide v. Mass Transit Administration, No. 84-4524 (D.Md. June 28, 1985), Judge Young dismissed a § 1983 action alleging employment discrimination in violation of the Fourteenth Amendment, where the matter was concurrently covered by Title VII. Judge Young held that a “[pjlaintiff is not relieved of the obligation to follow the detailed remedy provided by Congress in Title VII [even if] the exact same conduct which she claims violates Title VII is the conduct which she claims also violates the Fourteenth Amendment.” Weide, supra, at 12.

This Court adopts Judge Young’s holding. It is not enough that plaintiff has exhausted Title VII administrative remedies. Title VII creates a comprehensive remedial framework in equity that does not provide for a jury trial or damages. Novotny, supra 422 U.S. at 375-76, 99 S.Ct. at 2350-51. Allowing § 1983 actions for employment discrimination to proceed solely under the Fourteenth Amendment would effectively eclipse the detailed procedures and remedies Congress specifically enacted for employment discrimination under Title VII merely because the plaintiff can show state action. But discriminatory state action as alleged by plaintiff is also covered under Title VII. In reality, there are no separate and distinct rights present when the Fourteenth Amendment is so invoked by plaintiff Keller. A mere assertion that constitutional rights have been violated does not ipso facto defeat the exclusivity of comprehensive statutory remedies. It is not the rights asserted that determine separateness of remedies—otherwise, no rights or remedies could be preempted. It is the underlying conduct the law is asked to redress that determines what remedies can be asserted. Smith v. Robinson, — U.S. —, 104 S.Ct. 3457, 82 L.Ed.2d 746 (1984); Brown v. General Services Administration, 425 U.S. 820, 96 S.Ct. 1961, 48 L.Ed.2d 402 (1976). In this case, the underlying conduct—employment discrimination—is exclusively redressed by Title VII. This decision would not effect the holding in Hall, supra, where the § 1983 claim was predicated on the First Amendment.

For these reasons, the Court concludes that plaintiff’s claim under 42 U.S.C. § 1983 must be dismissed. A separate order confirming the within rulings will be entered. The demand for a jury trial will consequently be stricken.

      . In her first complaint, plaintiff inadvertently assumed Prince George’s County rather than the State of Maryland was responsible for the Prince George’s County Department of Social Services. Apprised of her mistake, plaintiff has filed a motion to amend the complaint pursuant to Federal Rule 15(c) to substitute Maryland for Prince George’s County. The Court grants the motion, joins the State of Maryland and dismisses Prince George's County as a defendant.


source: Caselaw Access Project

author: LATCHUM, Senior District Judge.

license: Public Domain

text:
    DERRY FINANCE N.V., a Netherlands Antilles corporation, Plaintiff, and C.F.S. Planning Corporation and Richard Klein, Residents of California, Intervening Plaintiffs, v. The CHRISTIANA COMPANIES, INC., a Delaware corporation, AARK Enterprises, Inc., a Delaware corporation, and AARK Enterprises, a New York partnership, Defendants. The CHRISTIANA COMPANIES, INC., a Delaware corporation, Defendant-Cross-Plaintiff, v. AARK ENTERPRISES, INC., a Delaware corporation, and AARK Enterprises, a New York partnership, Defendants-Cross-Defendants.
    Civ. A. No. 82-412-JLL.
    United States District Court, D. Delaware.
    Aug. 19, 1985.

      Lawrenee C. Ashby of Ashby, McKelvie & Geddes, Wilmington, Del. (Jerry J. Strochlic and Stuart A. Krause of Sage Gray Todd & Simms, New York City, of counsel), for plaintiff.
    Aubrey B. Lank and Steven Goldberg of Theisen, Lank, Mulford and Goldberg, P.A., Wilmington, Del. (Lester A. Katz and Frances F. Rogala of Baskin and Steingut, P.C., Washington, D.C., of counsel), for intervening plaintiffs.
    William J. Wade of Richards, Layton & Finger, Wilmington, Del. (Jerome Wiener and Mark K. Thomas of Antonow & Fink, Chicago, Ill., of counsel), for defendants The Christiana Companies, Inc.
   OPINION

LATCHUM, Senior District Judge.

This diversity case is presently before the Court on the cross-motions of plaintiff Derry Finance N.V. (“Derry”) (Docket Item [“D.I.”] 164), and defendant The Christiana Companies, Inc. (“Christiana”) (D.I. 161) for summary judgment on Derry’s second amended complaint. (D.I. 87.) The complaint demands judgment against Christiana for $4,720,000 plus interest at the rate of thirteen and one-half percent per annum running from July 15, 1981. (Id.) This is the debt Derry claims Christiana owes to it on six promissory notes. Because the Court holds that an exculpatory clause in the notes relieves Christiana of any obligation to pay on them, Christiana’s motion for summary judgment in its favor will be granted and Derry’s motion for summary judgment in its favor will be denied.

BACKGROUND

The facts underlying this dispute have been set forth in previously published opinions. See 102 F.R.D. 892, 893 (D.Del.1984); 555 F.Supp. 1043, 1044 (D.Del.1983). For present purposes, it is sufficient to highlight the following undisputed facts. Derry acquired the notes on which it is suing from defendant AARK Enterprises (“AARK”) as security for a loan that Derry made to AARK in May of 1981. (D.I. 87 at 4-5.) The notes had originally been executed by Christiana payable to AARK in December of 1979 as part of a so-called “Participation Agreement,” a complicated tax-avoidance scheme which involved several businesses and was based on the repeated sale and leasing-back of two jet aircraft. (D.I. 90 at 11-14.) A participant with AARK and Christiana in the scheme was AIG 737-1, Inc. (“AIG”). (Id.) The concocted tax shelter called, among other things, for AIG to sell the jets to AARK, who would in turn sell them to Christiana, who would then lease them back to AIG. (Id. at 12-13.) Christiana, recognizing that the value to it of these transactions could only be realized if all the parties involved fulfilled their obligations fully and on schedule (D.I. 166A at A112-13), wanted some escape from liability in the event that any party’s default brought the whole shelter tumbling down. (See id. at A4-5.) Remarkably, it got what it wanted. AARK agreed to include (D.I. 167A at A36), and there is included, this clause in each of the promissory notes which Christiana executed and on which this suit is based:

Payor and Payee, among others, are parties to a certain Participation Agreement of even date herewith concerning a certain Boeing 737-100, S/N 19769 [or 19770] (“Participation Agreement”). Anything herein to the contrary notwithstanding, payor shall not have any obligation to pay this note nor shall payor have any liability hereunder if, on the maturity date of this note, a default exists under the Participation Agreement or any note, lease, agreement or document contemplated therein, including, without limitation, the Loan Certificates, the Lease and the Overlease (as those terms are defined in the “Participation Agreement”).

(E.g., id. at A48.) The meaning and effect of this clause, particularly of the word “default”, are the dispositive issues in the cross-motions before the Court. Christiana asserts that certain undisputed failures by AIG and AARK to perform or pay are defaults excusing it from liability. (D.I. 166 at 2.) Derry argues that the failures do not constitute defaults as that term is used in the notes and that Christiana accordingly remains liable. (D.I. 167 at 2-3.) In the alternative, Derry argues that the doctrines of waiver or equitable estoppel should be applied to defeat Christiana’s defense to liability. (Id. at 27-29.)

LAW

A. Choice of Law

The promissory notes state that they “shall be construed in accordance with and governed by the laws of New York....” (E.g., D.I. 166A at A48.) Because this Court sitting in diversity is bound to apply the laws of Delaware, including its conflict of laws rules, Klaxon Co. v. Stentor Electric Mfg. Co., Inc., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941), and because Delaware has recognized a right of contracting parties to choose the law that governs their relationship, Wilmington Trust Co. v. Wilmington Trust Co., Del.Supr., 24 A.2d 309, 313 (1942); Falcon Tankers, Inc. v. Litton Systems, Inc., Del.Super., 300 A.2d 231, 235 (1972), this Court turns to New York law to guide its resolution of the case at bar.

B. Meaning of “Default” in the Notes’ Exculpatory Clauses

New York has long held to the standard dictionary definition of “default” as “ ‘the non-performance of a duty whether arising out of a contract or otherwise.’ ” Greco v. S.S. Kresge Co., 277 N.Y. 26, 12 N.E.2d 557, 561 (1938) (quoting 1 Bouv. Law Dict., Rawles 3d Rev. at 814). Christiana avers (D.I. 166 at 16), and Derry does not deny (D.I. 167 at 25-27), that on the date payment came due on the notes, AARK had not fulfilled its duty under its contracts with AIG for the purchase of the jets, in that it had failed to pay sums required by those contracts. (D.I. 167B at A485.) Under the ordinary meaning of the word “default” and hence under New York law, that non-performance by AARK of its contractual duty to AIG would constitute a default and, by the plain terms of the exculpatory clause, excuse Christiana from all liability on the notes. The question for the Court to consider, then, is whether the word “default” should be given a construction at variance with its ordinary meaning.

Derry argues vehemently but not persuasively that the word “default” must be construed according to the various documents executed in connection with the Participation Agreement and, more particularly, according to the interpretation held by the parties to each document as to that document’s meaning. The practical effect of such a construction is that a default releasing liability on the notes could only exist if an aggrieved party chose to take action on a default under a connected contract. (D.I. 167 at 21-23, 25-27.) According to this reasoning, AARK’s failure to pay AIG scheduled sums on the jet sales agreement did not constitute a default on that contract because AARK and AIG reached a separate, oral agreement granting AARK temporary forgiveness of the debt, and hence the failure to pay was also not a default triggering a release from liability on Christiana’s notes. (Id. at 25-27; D.I. 167A at A117.) But Derry cannot point to anything in the notes which leads to such a construction, nor is there anything inherently ambiguous about the word “default” which leads to such a construction. New York law plainly states that “before the rules governing the construction of ambiguous contracts are triggered, the court must first find ambiguity in the [contract]^]” Breed v. Insurance Co. of North America, 46 N.Y.2d 351, 413 N.Y. S.2d 352, 354, 385 N.E.2d 1280, 1282 (1978), and this Court finds none. The language is plain; “the words in the paragraph[ ] of the [contract] under examination have a definite and precise meaning, unattended by danger of misconception in the purport of the [contract] itself, and considering which there is no reasonable basis for a difference of opinion.” (Id.) (Emphasis added.)

Christiana and AARK knew how to incorporate the meaning of other documents into the notes; they did so in the exculpatory clause itself. At the end of the clause, these words appear: “any note, lease, agreement or document contemplated therein, including, without limitation, the Loan Certificates, the Lease and the Overlease (as those terms are defined in the “Participation Agreement”).” (E.g., D.I. 166A at A48.) Specific reference is .made to the Participation Agreement for a specialized definition of the three capitalized terms. In contrast, the words “note,” “lease,” “agreement,” and “document” are not capitalized or otherwise set apart, prompting the conclusion that they are not intended to have any meaning peculiar to the transactions flowing from the Participation Agreement. That is the same conclusion which must be drawn about the word “default.” It is used in an ordinary fashion, without reference to any idiosyncratic definition, and thus bears its ordinary meaning. See Carpenter v. Machold, 86 A.D.2d 727, 447 N.Y.S.2d 46, 47 (1982).

Derry complains that to so construe the clause runs directly counter to New York law as explained in an unreported opinion of the Supreme Court of New York County, Special Term, in Recife Realty Co., N.V., Inc. v. Marine Midland Bank, N.A., C.A. No. 01422/84 #66 (Mar. 23, 1984) (reproduced in D.I. 167B at A524-29). (D.I. 173 at 9-10.) That opinion, however, is not at all the important precedent Derry apparently believes it to be. The court in Recife was dealing with the provisions of a single contract. (Recife, supra, slip op. at 1-2.) The court held that when a contract contains a requirement that notice and an opportunity to cure be given a defaulting party before legal action is taken on the default, the aggrieved party may not proceed to court in derogation of that requirement. Id. at 5-6. Far from being significant, Recife is not even pertinent to this case, the obvious distinction being Derry’s effort to lift a definition of default from one contract and impose it on the provisions of an entirely different contract between different parties. The other cases Derry cites on this issue can be similarly distinguished.

Supporting the “plain-meaning” interpretation of the clause urged by Christiana and accepted by this Court is the commonsense observation that someone so concerned about the reliability of his business associates that he negotiates a liability-release stipulation against the possibility of their defaulting is not then going to accept, let alone design, an arrangement giving those associates power to declare whether and when there has been a default. Were the Court to accept the construction suggested by Derry the exculpatory clause would become self-defeating. A logical reading of the provision will not be rejected in favor of one that presumes irrational drafting.

C. Equitable Estoppel and Waiver

Derry’s final arguments against Christiana’s motion for a favorable summary judgment are that Christiana should, in equity, be estopped from raising AARK’s default on the jet sales agreement as a defense to liability on the notes or should be held to have waived that defense. (D.I. 167 at 27-29; D.I. 173 at 10-14.)

The waiver argument requires little attention. Under New York law, a waiver is “the intentional relinquishment of a known right with both knowledge of its existence and an intention to relinquish it.” City of New York v. State, 40 N.Y.2d 659, 389 N.Y.S.2d 332, 357 N.E.2d 988, 995 (1976) (quoting Whitney, Contracts at 273 (4th ed. 1946)). Derry does not contend, nor could it, that Christiana waived the defense embodied in the exculpatory clause. By Derry’s own account, Christiana continually refused requests that the clause be stricken. (D.I. 167 at 13.) Instead, the argument seems to be that Christiana should be held to have waived any right to assert particular defaults, including the AARK default, as a defense to liability because of its business-as-usual conduct and its silence about the default until July of 1981, despite its allegedly having known of the problems for some time. (Id. at 27.) Derry acknowledges that in so arguing it is using the concepts of waiver and estoppel interchangeably, and it asserts that such usage is consonant with New York law. (Id.) But Derry has cited no cases to that effect and the Court’s own research indicates that New York does not regard estoppel and waiver as equivalents. See, e.g., Horne v. Radiological Health Service, P.C., 83 Misc.2d 446, 371 N.Y.S.2d 948, 960 (N.Y.Sup.Ct.), aff’d, 51 A.D.2d 544, 379 N.Y.S.2d 374 (1976) (“A waiver, unlike estoppel, is dependent solely on what one party intends to do and there is no need to show reliance by the party asserting it.”). Recognizing the general reluctance of courts to grant summary judgment in eases involving a question of intent, Look Magazine Enterprises, S.A. v. Look, Inc., 596 F.Supp. 774, 779 (D.Del.1984), and bearing in mind the responsibility to draw every reasonable inference in Derry’s favor while considering Christiana’s summary judgment motion, Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970), the Court nevertheless holds without hesitation that Derry has failed to demonstrate any intent on Christiana’s part to waive a defense based on AARK’s default. There is nothing in the record showing an intentional waiver, and, by New York’s definition, there is no such thing as an unintentional waiver. Derry’s failure to spend more than a two-sentence paragraph on this topic {see D.I. 167 at 27) indicates that even it does not regard its argument as worthy of serious consideration.

The estoppel argument, on the other hand, Derry presses with vigor. “Christiana deliberately misled all parties ... into believing it would not assert any claim of default excusing payment under the recourse notes.” (Id. at 29.) There is, however, a fatal lack of factual support for that assertion.

New York law requires a party seeking to invoke the doctrine of equitable estoppel to demonstrate the following:

[A]s related to the party estopped ...[,] (1) [cjonduct which amounts to a false representation or concealment of material facts, or, at least, which is calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (2) intention, or at least expectation, that such conduct shall be acted upon by the other party; (3) knowledge, actual or constructive, of the real facts[;] [a]s related to the party claiming estoppel, ... (1) [l]ack of knowledge and of the means of acquiring knowledge of the truth as to the facts in question; (2) reliance upon conduct of the party estopped; (3) action based thereon of such a character as to change his position prejudicially.

State Bank of Albany v. Fioravanti, 70 A.D.2d 1011, 418 N.Y.S.2d 202, 203-04 (1979), aff’d, 51 N.Y.2d 638, 435 N.Y.S.2d 947, 417 N.E.2d 60 (1980). Derry’s whole argument is that Christiana remained silent after it knew of AARK’s default on the jet sales agreement, that Christiana carried on with its participation in the sales-leaseback arrangement without comment on the default, and that when inquiries were made to Christiana, it stated that it intended to pay off the notes. (D.I. 167 at 28.) But even assuming the truth of these allegations, Derry has failed to demonstrate all of the essential elements just listed.

For example, it has not shown any false representation or concealment of material fact. If Christiana at some point stated an intention to pay off the notes, that is irrelevant without proof, lacking here, that the statement was a lie when made, because “a truthful statement as to the present intention of a party with regard to his future acts is not the foundation upon which an estoppel may be built. The intention is subject to change. Here it was changed.” Metropolitan Life Ins. Co. v. Childs Co., 230 N.Y. 285, 130 N.E. 295, 298 (1921). For the same reason, Christiana’s business-as-usual attitude, on which Derry lays such stress, is without relevance. Christiana had no obligation to make immediate objection to defaults, and it had no right to claim the benefit of a default any earlier than it did. The terms of the notes provide that if, on the date a note fell due, a default existed somewhere in the Participation Agreement’s network of transactions, then Christiana was released from liability on that note. (Eg., D.I. 166A at A48.) It is not a misrepresentation or concealment of material fact for a party entitled to remain silent to do so. Cf. Joseph Shultz & Co. v. Camden Fire Ins. Ass’n, 304 N.Y. 143, 106 N.E.2d 273, 275 (1952); Hartford Accident and Indemnity Co. v. Oles, 152 Misc. 876, 274 N.Y.S. 349, 354 (N.Y.Sup.Ct.1934).

Neither has Derry shown that Christiana intended for it to rely on any conduct or representation of Christiana’s. It is undisputed that Derry never had direct contact with anyone from Christiana before taking assignment of the notes. A Mr. Weymouth, a mutual, personal friend of an officer of Christiana and a principal of Derry, inquired about the notes during a telephone conversation with the Christiana officer. All that the Christiana officer apparently knew was that Mr. Weymouth was curious because his family “had been offered a participation in the notes through some friends of theirs in Bermuda.” (D.I. 167A at A43.) The “friends of theirs,” turned out to be the principal of Derry who subsequently relied on Mr. Weymouth’s report of his phone call with the Christiana officer to consummate a five million dollar loan, taking the notes as security. There is nothing in the record, however, that suggests Christiana even knew of Derry’s existence, let alone that it intended for Derry to rely on something a company officer said in a phone conversation with a personal friend who otherwise has no connection with Christiana.

Furthermore, the very fact that Derry would lend money and take the notes on the basis of assurances supposedly given by someone without official connection to Christiana is in itself sufficient reason to reject Derry’s argument for equitable estoppel. “An estoppel rests upon the word or deed of one party upon which another rightfully relies,” Metropolitan Life Ins. Co., supra, 130 N.E. at 298 (N.Y.1921) (emphasis added), and there can be no claim of right or reasonableness in doing business based on the kind of through-the-grapevine information Derry appears to have relied on in this case.

CONCLUSION

The short of this whole matter is that Derry can blame no one but itself for its decision to take notes so obviously and easily rendered worthless at the option of the debtor. The transactions underlying this lawsuit were all undertaken by presumably sophisticated businesses with access to competent financial and legal advice. Given that, it is surprising indeed that one of them would agree to the inclusion of the exculpatory clause in the first instance; it’s more surprising still that another would accept such notes to secure a multimillion dollar loan. But having accepted them, that party must bear the loss.

An order will be entered in accordance with this opinion.

      . Questions concerning the existence of jurisdiction have already been resolved in earlier rulings by this Court. (See Docket Item [“D.I.”] 65; D.I. 84.)

      . It is a common sense rule that promissory notes are a variety of contract and are to be so construed and enforced. See Swift & Co., Inc. v. Bankers Trust Co., 280 N.Y. 135, 19 N.E.2d 992, 994 (1939); accord Hartford Federal Savings and Loan Ass’n v. Green, 36 Conn.Sup. 506, 412 A.2d 709, 713 (1979); Sabine v. Leonard, 322 S.W.2d 831, 837 (Mo.1959); 11 Am.Jur.2d, Bills and Notes § 1.

      . Derry and Christiana are at odds about whether two or all of the notes became due on July 15, 1981. (D.I. 170 at 2-3.) That is the payment date scheduled for two of the notes, but the notes provide that failure to pay a note when due automatically accelerates liability on all the notes. (E.g., 166A at A47-48.) Therefore, because all the notes became due when Christiana refused to pay on the first two notes, the Court’s disposition of the summary judgment motions now before it applies to liability on all of the notes. AARK notified Christiana of the acceleration (see D.I. 173A at A3-4) and Derry has likewise taken the position that the notes have been accelerated. (D.I. 173 at 3 n. *.)

      . Christiana has alleged other defaults which might excuse it from liability (D.I. 166 at 16-17; D.I. 170 at 11-12), but, again, these need not be addressed because of the Court’s determination on the AARK-AIG default discussed in this opinion.

      . Derry makes much of the fact that the notes’ exculpatory clause was drafted by Christiana (see D.I. 173 at 4-5), and calls for application of "the well-settled rule that contract language is to be construed against the draftsmen!.]” (Id- at 4.) But Derry ignores a significant point of fact and of law. The fact is that the clause was a subject of negotiation between the parties; it was not a piece of boilerplate from a form contract. (D.I. 170A at A135.) The law is that, in any case, the rule cited by Derry applies only when there is an ambiguity in the contract. See 67 Wall St. Co. v. Franklin Nat’l Bank, 37 N.Y.2d 245, 371 N.Y.S.2d 915, 333 N.E.2d 184, 187 (1975).

      . This statement of the law is not inconsistent with the Court’s cursory remarks on New York law in the case of Process & Storage Vessels, Inc. v. Tank Service, Inc., 541 F.Supp. 725 (D.Del. 1982), aff’d, 760 F.2d 260 (3rd Cir.1985). In that case, the Court conjectured,
      "there may possibly [be] ... a case for waiver of the ... limitation period or estoppel to enforce it. Under New York law, a misrepresentation by a defendant or his agent upon which a plaintiff relies to his detriment may be sufficient to defeat an otherwise valid limitation defense, even though the misrepresentation may have been innocently made, viz., without any intent to deceive.” 541 F.Supp. at 732 (footnote and citations omitted).
      The Court at that time did not distinguish between waiver and estoppel, but the statement of law relates to estoppel only. Waiver does require a showing of intent, i.e., the intent of the defendant to forego the potential defense. See Horne, supra, 371 N.Y.S.2d at 960.

      . On this point and others in its briefs, Derry’s confidence in the correctness of its own position appears to have carried it beyond the bounds of ordinary argument and into ad hominem -style attacks on Christiana. It ought to go without saying that dispassionate and careful reasoning is more helpful to the Court than is the constant labeling of the opposition’s arguments or actions as “ludicrous,” (D.I. 167 at 22), "preposterous,” (id.), “cynical,” (D.I. 167 at 30), "tortuous,” (D.I. 173 at 5 n. *), "absurd,” (id.), “outrageous," (D.I. 167 at 26), or a show of “gall.” (D.I. 167 at 30.)

      . At oral argument, counsel for Derry cited this Court’s opinion in Process & Storage Vessels, Inc., the relevant portion of which is quoted at n. 6, supra. The Court is satisfied that its brief rendition in that case of the law governing estoppel in statute of limitations cases and the language quoted above from Albany v. Fioravanti are both accurate statements of New York law. Application of the doctrine of equitable estoppel to cases in which the asserted defense is the statute of limitations is exceptional in that the ordinary requirement of fraud or bad faith as a prerequisite for estoppel, see Rothschild v. Title Guarantee & Trust Co., 204 N.Y. 458, 97 N.E. 879, 880-81 (1912), is relaxed and even unintentional misrepresentation is sufficient to support the invocation of the doctrine. See Dupuis v. Van Natten, 61 A.D.2d 293, 402 N.Y.S.2d 242, 243 (1978); Gross v. Newburger, Loeb & Co., Inc., 103 Misc.2d 417, 426 N.Y.S.2d 667, 676 (N.Y.Sup.Ct.1980), modified on other grounds, 85 A.D.2d 709, 445 N.Y.S.2d 830 (1981); Fraud, Misrepresentation, or Deception as Estopping Reliance on the Statute of Limitations, 43 A.L.R.3d 429, § 4(b). This more generous application of estoppel is apparently grounded in the belief that the statutory provisions for preventing stale claims should not be employed as offensive or tactical weapons. See Gross, supra, 426 N.Y.S.2d at 676. That concern is unique to statute of limitations cases and does not affect the case before the Court. The statement of law quoted from Albany v. Fioravanti, supra, has been approved by the New York Court of Appeals and it is controlling.


author: HADEN, Chief Judge.

text:
    Sylvia J. MILLER, Plaintiff, v. ELEGANT JUNK, et al., Defendants.
    Civ. A. No. 84-A036.
    United States District Court, S.D. West Virginia, Parkersburg Division.
    Aug. 20, 1985.
    Elizabeth Pyles, Parkersburg, W.Va., for plaintiff.
    James W. St. Clair, Marshall & St. Clair, Huntington, W.Va., for Public Indus.
    Thomas C. Scott, Scott, Walker & Kuehnle, Columbus, Ohio, for Elegant Junk.
   MEMORANDUM OPINION AND ORDER

HADEN, Chief Judge.

Pending before the Court is the motion of the Defendant, Public Industrial Loan Company (Public Finance), for summary judgment in this action brought under the Equal Credit Opportunity Act, 15 U.S.C. § 1691 et seq.

I. Background

The Plaintiff, Sylvia J. Miller, is a married woman. She is a resident of Parkersburg, West Virginia. On or about June 15, 1983, Mrs. Miller visited a retail furniture store in Parkersburg named Elegant Junk. Seeing a couple of loveseats in the. store which appealed to her, she sought to buy them. An employee informed Mrs. Miller that the store would arrange credit for her through Public Finance. Mrs. Miller then completed an application with the understanding that it would be forwarded to Public Finance. The next day an employee of Elegant Junk told Mrs. Miller that her application was denied unless her husband signed as co-debtor. Upon calling Public Finance, Mrs. Miller was told that her application had been approved. Accordingly, she went back to the store that day and signed the credit application. Later that day, however, an employee of Public Finance called to tell her that her application was in fact denied unless her husband cosigned. Still wanting to purchase the loveseats, Mrs. Miller arranged for her husband to sign the credit application. The application was then approved and Mrs. Miller took possession of the loveseats. She later paid off the finance debt in six timely installments.

Alleging that she was discriminated against because of her sex and marital status, Mrs. Miller has brought this suit against Elegant Junk and Public Finance. As a result of Elegant Junk’s petition in bankruptcy, the proceedings against it have been stayed. Public Finance now wishes to exit by way of the summary judgment motion.

II. Discussion

A. The Statute.

This action is entirely a creature of 15 U.S.C. § 1691. That section prohibits creditors from discriminating against credit applicants “on the basis of race, color, religion, national origin, sex or marital status, or age.” 15 U.S.C. § 1691(a)(1). A proviso to that section allows a creditor “to make an inquiry of marital status if such inquiry is for the purpose of ascertaining the creditor’s rights and remedies applicable to the particular extension of credit and not to discriminate in the determination of credit worthiness.” 15 U.S.C. § 1691(b)(1). Another section, 15 U.S.C. § 1691(d), permits a creditor to consider to a certain extent the applicability of state law in, say, requiring the signatures of both parties to a marriage for the purposes of creating a valid lien. Otherwise, Section 1691 evinces a legislative intent to prohibit extensions of credit which take into consideration sex or marital status. The intent is clearly spelled out in the congressional findings and statement of purpose accompanying this statute.

“The Congress finds that there is a need to ensure that the various financial institutions and other firms engaged in the extensions of credit exercise their responsibility to make credit available with fairness, impartiality, and without discrimination on the basis of sex or marital status____It is the purpose of this Act to require that financial institutions and other firms engaged in the extension of credit make that credit equally available to all credit worthy customers without regard to sex or marital status.”

Equal Credit Opportunity Act, Pub.L. No. 93-495, § 502, 88 Stat. 1511 (1974).

B. The Defendant’s Motion.

Public Finance submits two arguments in support of its motion for summary judgment. First, it contends generally that it did not violate the Equal Credit Opportunity Act. Second, Public Finance argues that even if it did violate the Act, Mrs. Miller did not suffer any resulting damages. The Court’s disposition of this case on the Defendant’s first argument negates the need to discuss the second.

In support of its motion, Public Finance attached thereto a copy of Mrs. Miller's deposition and a copy of the credit application. It did not attach a copy of the letter from Public Finance informing Mrs. Miller that her credit application had been denied or a copy of the letter from Public Finance entitled “Reasons for Adverse Action Concerning Credit.” These two letters, however, were attached to the integrated pretrial order submitted by both parties’ counsel on the day of the pretrial conference. The question is whether the Court can consider these two exhibits to the pretrial order in ruling on Public Finance’s summary judgment motion.

Rule 56(c) of the Federal Rules of Civil Procedure, provides that summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Given the above categories, the exhibits would appear to fall outside the scope of review for a summary judgment motion, but a closer examination indicates the contrary.

The pretrial order submitted to the Court at the pretrial conference is an integrated document. By “integrated” it is meant that the order was the combined work of counsel for both parties. Although the order is a joint effort, it does contain, by its nature, opposing viewpoints by counsel on various issues. As to the exhibits, however, the order is silent. Neither party objects to their inclusion nor expresses doubt as to their authenticity. Although the order does not reflect which side initiated their inclusion, the Plaintiffs counsel does indicate in the pretrial order that she will use the two letters as exhibits at trial. The defense counsel does not so indicate. In any event, the exhibits having been submitted in such a manner as to indicate no controversy between the parties on the question of their accuracy, the Court deems them to have the characteristics of stipulated material, or, in the alternative, to be of the nature of an admission. A summary judgment may be based on matter deemed admitted. Home Indemnity Co. v. Famularo, 530 F.Supp. 797 (D.Col.1982); see also Brown v. Ford Motor Co., 57 F.Supp. 825 (E.D.Mich.1944) (summary judgment can be based on admissions on file, including the admissions incorporated in formal pretrial order).

If the exhibits were appended at the behest of the Plaintiff, counsel cannot complain of the Court’s review since “Rule 56(c) does not exclude the grant of summary judgment on the basis of materials originating entirely with the opponent of the motion.” In Re Japanese Electronic Products, 723 F.2d 238 (3d Cir.1983). Neither is it objectionable that the Defendant’s counsel did not specifically single out for the Court’s attention the two exhibits. Higgenbotham v. Ochsner Foundation Hospital, 607 F.2d 653 (5th Cir.1979). Rule 56 “does not limit the Court’s examination to issues raised in affidavits or to record evidence pinpointed in the parties’ memorandum.” Stepanischen v. Merchants Despatch Transportation Corp., 722 F.2d 922 (1st Cir.1983).

Turning to the contents of the exhibits, the Court notes their relevance to Public Finance’s claim that it did not discriminate against the Plaintiff, Mrs. Miller. The letter giving the reasons for Mrs. Miller’s denial of credit is a form letter. It lists 19 possible reasons for denying credit to an applicant. In Mrs. Miller’s case, the boxes opposite “Insufficient income” and “Excessive obligations” are marked as applicable. At the bottom of the page, the Defendant notes, also in a form manner, that the information pertaining to excessive obligations was reported by a “consumer reporting agency.” This information is relevant because it goes to Mrs. Miller’s credit worthiness. If Public Finance denied Mrs. Miller’s credit application on the basis of creditworthiness instead of her marital status or sex, it would have an absolute defense to this action.

The basis for the defense of creditworthiness can be found in the regulations issued by the Board of Governors of the Federal Reserve System pursuant to the Equal Credit Opportunity Act.

“Except as provided in this subsection, a creditor shall not require the signature of an applicant’s spouse or other person, other than a joint applicant, on any credit instrument if the applicant “qualifies under the creditor’s standards of credit worthiness for the amount in terms of the credit requested.”

12 C.F.R. 202.7(d)(1) (1985) (emphasis added).

This defense is also reflected in the congressional intent of making “credit equally available to all creditworthy customers without regard to sex or marital status.” Equal Credit Opportunity Act, Pub.L. No. 93-495, § 502, 88 Stat. 1511 (1974) (emphasis added).

Public Finance has thus raised the issue of the credit worthiness of Mrs. Miller. Furthermore, it submits that it based that creditworthiness on information received from a credit reporting agency. These facts, if uncontroverted, would entitled Public Finance to summary judgment as a matter of law in this discrimination-based action. Hence, Public Finance having raised the issue, the burden shifts to Mrs. Miller to show that summary judgment is inappropriate. Stepanischen, supra, 722 F.2d at 929.

To controvert the claimed reliance of Public Finance on the credit reporting agency, Mrs. Miller has submitted an affidavit detailing her income and obligations. The figures reflected in the affidavit may indeed have some bearing on the credit worthiness of Mrs. Miller; however, because she is claiming discrimination on the part of Public Finance, Mrs. Miller must do more than show her good financial state. She must make some showing that the credit reporting agency accurately reported her financial state to Public Finance. This is not requiring the Plaintiff to prove her case prior to trial. The point of the matter is that the record now reflects an uncontroverted fact presented by the Defendant—a fact which provides the Defendant an absolute defense to a claim of discrimination. If the fact is not controverted, summary judgment is appropriate.

Congress has explicitly recognized the reliance which credit institutions place upon credit reporting agencies. “The banking system is dependent upon fair and accurate credit reporting. Inaccurate credit reports directly impair the efficiency of the banking system and unfair credit reporting methods undermine the public confidence which is essential to the continued functioning of the banking system.” 15 U.S.C. § 1681(a)(1). Consequently, Congress has provided guidelines to be followed by consumer credit reporting agencies. In particular, Congress has dictated that the preparers of consumer reports must follow reasonable procedures to assure maximum possible accuracy of the information reported on an individual. 15 U.S.C. § 1681e(b). The statutory scheme also provides for “a complete and accurate disclosure of the nature and scope of the investigation requested” to the consumer. 15 U.S.C. § 1681d(b). Furthermore, upon request the consumer can obtain the nature and substance of all information on the consumer in the files of the reporting agency. 15 U.S.C. § 1681g(a)(l). These references to portions of the Fair Credit Reporting Act are relevant on three points: First, the Act reinforces the propriety exhibited by a lending institution, such as Public Finance, in relying upon information supplied by a credit reporting agency. Second, under the Act Mrs. Miller is provided with the right to gain access to information which could put Public Finance’s reliance on the reporting agency in issue. Third, the Act suggests what may be the appropriate remedy for Mrs. Miller: an action against the reporting agency for supplying inaccurate information to a lending institution.

III. Conclusion

This Court is cognizant of modern procedure’s abhorrence for the pitfalls of pleading as suffered under the old common law form of pleading. It may appear that the Plaintiff has succumbed to a like predicament here; however, the basis for the burden placed upon the Plaintiff is explicitly set forth in the Federal Rules of Civil Procedure. Rule 56(e) states that “[w]hen a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response ... must set forth specific facts showing that there is a genuine issue for trial.” The rule goes on to say that if a party “does not so respond, summary judgment, if appropriate, shall be entered against him.” The Plaintiff not having controverted the fact of Public Finance’s reliance upon the credit reporting agency in evaluating her creditworthiness, the Court holds summary judgment to be appropriate in this instance. The Defendant’s motion for summary judgment is hereby granted.

The Clerk is directed to send a certified copy of this Memorandum Opinion and Order to counsel of record.

       This action is also dismissed as to the bankrupt Defendant, Elegant Junk. It is clear that the actions it took in regard to Mrs. Miller were at the direction of Public Finance. Any defense asserted by Public Finance would also inure to the benefit of Elegant Junk.


author: EDWARD WEINFELD, District Judge.

text:
    Janet Walter BERMAN, Plaintiff, v. NEW YORK CITY BALLET, INC., Defendant.
    No. 85 Civ. 5875 (EW).
    United States District Court, S.D. New York.
    Aug. 20, 1985.

      Blank & Blank, P.C., New York City, for plaintiff; Diane Serafín Blank, New York City, of counsel.
    Proskauer Rose Goetz & Mendelsohn, New York City, for defendants; Minna Schrag, New York City, of counsel.
   OPINION

EDWARD WEINFELD, District Judge.

Plaintiff, presently employed by the defendant New York City Ballet, Inc. as Acting Principal second violinist of the ballet orchestra, moves for a preliminary injunction to enjoin the defendant from selecting another person for the position, pending investigation and determination by the Equal Employment Opportunity Commission (EEOC) of plaintiff’s current charge that on account of her sex,.and in retaliation for a previous Title VII action against defendant, she has been denied permanent promotion to the position.

As a threshold question, defendant contends that this court lacks jurisdiction to entertain an application for a preliminary injunction where, as here, plaintiff has not been granted a “right to sue” letter by the EEOC. Decisions by our Court of Appeals, however, firmly establish that in cases in which a plaintiff alleges significant retaliatory conduct by the employer, this Court has jurisdiction to entertain applications for preliminary injunctive relief for the purpose of preserving the status quo pending the EEOC’s investigative and conciliatory processes. In such situations, the Court’s jurisdiction is not dependent upon the issuance by the EEOC of a “right to sue” letter.

In order to succeed in her application for such relief, the plaintiff must meet the traditional requirements for the issuance of a preliminary injunction. Thus, she must establish: (1) the threat of irreparable harm in the absence of an injunction, and (2) either (a) a likelihood of success on the merits, or (b) sufficiently serious ground for litigation and a balance of hardship that tips decidedly in her favor. There is no presumption of irreparable injury created by the allegations of retaliatory conduct. As in all other preliminary injunction cases, the plaintiff must show the threat of irreparable injury as an absolute requirement.

At the outset, as already noted, plaintiff presently holds the position, as Acting Principal second violinist, as to which she seeks to enjoin the defendant from considering fellow employees, a requirement of the collective bargaining agreement. Plaintiff asserts that a decision to designate another member of the orchestra as principal second violinist would result in irreparable harm to her in three ways: damage to her reputation as a musician, loss of other employment opportunities which traditionally come to principal orchestral players, and the deprivation of the only position for plaintiffs promotion within the orchestra.

As to the allegation of damage to reputation, the Supreme Court has said in the context of the discharge of civil service employees that damage to reputation caused by discharge will not support the issuance of a preliminary injunction. In the present case, plaintiff has not been discharged; she not only retains the salary and benefits that would accrue to her as principal second violinist, but is also described in the employer’s publicity materials as Acting Principal of the second violin section. If plaintiff prevails upon the merits of her claim, the harm, if any, done to her reputation can be compensated in damages; a harm that can be remedied by payment of damages is not irreparable.

The same defect appears in plaintiff’s assertion that loss of other employment opportunities will result from failure to make plaintiff the principal second violinist. If plaintiff prevails on the merits, any claimed loss of income from other employment opportunities can be compensated in damages. Plaintiff argues that the damages for the interim period are impossible of calculation; the record as here presented does not support this claim. Past experience of plaintiff, as well as other principal players, as to additional income claimed to be earned by reason of the position is readily ascertainable, and would furnish a yardstick to measure damages. Without deciding the question of the appropriate measure, the court is satisfied that a fair determination of alleged deprivation of additional income can be made.

Plaintiff also argues that irreparable harm will be caused if defendant is allowed to proceed with auditions to fill the position of principal second violinist because this Court will not be in a position to award plaintiff this “unique position” should she prevail upon the merits. This contention too must be rejected. As the Supreme Court has said, one of the central purposes of Title VII is “to make persons whole for injuries suffered on account of unlawful employment discrimination.” The broad equitable power vested in the federal courts to fashion remedies in accordance with this purpose includes, of course, remedies which may indirectly burden other employees. If plaintiff prevails upon the merits, the remedial powers of the court are entirely adequate to grant her any relief to which she may be entitled. Accordingly, the court finds that plaintiff has not made the requisite showing of irreparable harm.

Moreover, there is serious doubt as to the substantiality of plaintiffs claim on the merits. The process for the selection of a new principal second violinist called for in the collective bargaining agreement between plaintiff’s employer and plaintiff’s union requires the convening of a committee at which plaintiff, to be appointed without an open audition, needed to receive seven of the ten votes cast. Instead, plaintiff received only six votes. The undisputed testimony of Robert Irving, the orchestra’s music director, is that he, on behalf of the orchestra management, cast all five of its votes for plaintiff. Plaintiff was thus deprived of the position she sought not by her employer, but by her orchestra colleagues. Plaintiff contends, however, that this outcome was the result of a “setup,” whereby the orchestra management sought to get itself “off the hook” by voting for her while simultaneously arranging her defeat. She has introduced not the slightest credible evidence in support of this conjectural charge of “express or implied conspiracy,” other than the repetition of unattributed hearsay statements that “the word was out” that the orchestra management would act in this way.

Such speculative charges do not rise to the level of a serious ground for litigation, and do not establish that plaintiff is likely to succeed on the merits. Upon the totality of the record in this case, the court finds that plaintiff has not established that she will be irreparably harmed if an injunction does not issue, and further finds that plaintiff has established neither a likelihood of success on the merits nor a balance of hardships tipping sharply in her favor. Indeed plaintiff, currently the Acting Principal second violinist seeks to acquire the position permanently, which is of course her right; however, an injunction would freeze out other potential applicants who are entitled to be considered under the union contract. Accordingly, the motion for a preliminary injunction is denied.

So ordered.

      . This is the second EEOC complaint and federal lawsuit commenced by plaintiff; the prior proceedings were withdrawn when it was determined that the collective bargaining agreement between the defendant and the union of which plaintiff is a member provided for a procedure for the appointment to the position at issue. It is the orchestra’s implementation of that procedure which plaintiff now seeks to enjoin.

      . Sheehan v. Purolator Courier Corp., 676 F.2d 877 (2d Cir.1982); Holt v. Continental Group, Inc., 708 F.2d 87, 91 (2d Cir.1983), cert. denied, — U.S. —, 104 S.Ct. 1294, 79 L.Ed.2d 695 (1984).

      . Sheehan, 676 F.2d at 887.

      . Buckingham Corp. v. Karp, 762 F.2d 257 (2d Cir.1985); Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc., 596 F.2d 70 (2d Cir.1979).

      . Holt v. Continental Group, Inc., 708 F.2d 87, 91 (2d Cir.1983), cert. denied, — U.S. —, 104 S.Ct. 1294, 79 L.Ed.2d 695 (1984).

      . Holt, 708 F.2d at 90; Triebwasser & Katz v. American Tel. & Tel. Co., 535 F.2d 1356, 1359 (2d Cir.1976).

      . Sampson v. Murray, 415 U.S. 61, 91-92, 94 S.Ct. 937, 953, 39 L.Ed.2d 166 (1974).

      . Stromfeld v. Smith, 557 F.Supp. 995, 998 (S.D. N.Y.1983); Patterson v. United Federation of Teachers, 480 F.Supp. 550, 553 (S.D.N.Y.1979); see also Buffalo Courier-Express v. Buffalo Evening News, 601 F.2d 48, 58 (2d Cir.1979).

      . Albermarle Paper Co. v. Moody, 422 U.S. 405, 418, 95 S.Ct. 2362, 2372, 45 L.Ed.2d 280 (1975).

      . Franks v. Bowman Trans. Co., 424 U.S. 747, 774-75, 96 S.Ct. 1251, 1268-70, 47 L.Ed.2d 444 (1976).

      . See EEOC v. Kallir, Philips, Ross, Inc., 420 F.Supp. 919 (S.D.N.Y.1976), aff’d mem., 559 F.2d 1203 (2d Cir.), cert. denied, 434 U.S. 920, 98 S.Ct. 395, 54 L.Ed.2d 277 (1977).

      . Plaintiffs Reply Memorandum at 2.


author: TOM S. LEE, District Judge.

text:
    Ray LIGHT, Jr., and Barbara J. Light, Plaintiffs, v. BLUE CROSS AND BLUE SHIELD OF ALABAMA, INC., An Insurance Company Not Licensed to Do Business In the State of Mississippi, Defendants.
    Civ. A. No. H84-0114(L).
    United States District Court, S.D. Mississippi, Hattiesburg Division.
    Aug. 20, 1985.

      Robert F. Drake, Hattiesburg, Miss., for plaintiffs.
    W. Joel Blass, Mize, Thompson & Blass, Gulfport, Miss., for defendants.
   MEMORANDUM OPINION

TOM S. LEE, District Judge.

This cause is before the court on motion by the defendant, Blue Cross and Blue Shield of Alabama, Inc. (Blue Cross), for summary judgment pursuant to Rule 56(b) of the Federal Rules of Civil Procedure. Plaintiffs Ray Light, Jr. and Barbara J. Light have filed timely response in opposition to defendant’s motion.

Plaintiff Ray Light, Jr. was an employee of South Central Bell in January 1982. On January 1, 1982, as part of a collective bargaining agreement between South Central Bell and the Communications Workers of America, a comprehensive medical expense plan (Plan) became effective to cover all employees of South Central Bell. At that time, Blue Cross entered into a service contract with South Central Bell to administer benefits under this Plan. Blue Cross did not underwrite the Plan and assumed responsibility only to pay benefits and adjudicate claims in exchange for reimbursement from South Central Bell at a rate of 1.55 percent of benefits paid. Plaintiffs became plan participants as of January 1, 1982.

On June 1, 1983, plaintiff Ray Light, Jr. was laid off from his employment with South Central Bell. His wife, Barbara J. Light, was some three months pregnant at that time and had previously received medical attention for her pregnancy. Maternity benefits were included within the coverage of the Plan. When her pregnancy came to term in December 1983, the Lights presented the bill for all medical expenses incurred, approximately $2,000.00, to Blue Cross for payment under the Plan. The claim was denied by Blue Cross on the ground that Mr. Light’s coverage under the Plan had terminated as of July 1, 1983, or approximately on the last day of the month in which his employment with South Central Bell was terminated, as provided for in the Plan.

Plaintiffs brought this suit against Blue Cross alleging tortious or bad faith refusal to pay claims, intentional infliction of severe emotional distress, negligent infliction of emotional distress, breach of fiduciary duties and deceit. For each individual tort alleged, plaintiffs seek $200,000 in compensatory damages and $1,000,000 in punitive damages. Each cause of action, with the possible exception of breach of fiduciary duties, arises under the substantive law of Mississippi.

A) Coverage

By the express provisions of the Plan, benefits and coverage cease on the last day of the month in which the employee’s employment with South Central Bell terminates. The Plan further provides that only in the case where the employee is hospitalized at the time the coverage terminates will the benefits be extended past the last day of the month of his termination. Furthermore, under the Plan and the Summary Plan Description (Summary), an employee who is terminated is provided with options to ensure continued medical coverage. The employee may either extend coverage for himself and his dependents for a period of not more than 90 days by paying all of the premium due or convert his coverage to non-group, individual coverage upon termination. It is undisputed that plaintiff failed to exercise either of these options to continue coverage.

Plaintiffs have wholly failed to allege facts sufficient to imply a waiver by defendant to assert the express terms of the contract as a defense to the contractual and extra-contractual claims. Nor have the plaintiffs pled facts or law upon which this court could arguably rely in finding that the defendant is estopped from asserting the express terms of the contract as a defense. Plaintiffs claim that they detrimentally relied upon continued coverage under the Plan when they decided to start their family. Although sympathetic with their plight, this court concludes that if there were detrimental reliance in this case, it was Ray Light, Jr.’s reliance on his continued employment with South Central Bell and not on any representations or actions of Blue Cross, whose coverage agreement remained intact throughout the times at issue here.

Given the briefs, exhibits and affidavits submitted in this cause, this court finds that there are no genuine issues of material fact relative to the claim of coverage and that defendant is thus entitled to judgment as a matter of law on the issue of coverage alone. The effect of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., also provides a basis, for granting summary judgment.

B) Preemption of State Law

The Plan at issue here falls within the definition of an “employee welfare benefit plan” regulated by ERISA. ERISA establishes general criteria for determining which plans administered by employers for the benefit of employees are within its exclusive purview:

The terms “employee welfare benefit plan” and “welfare plan” mean any plan, fund, or program which was ... established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund, or program was established or is maintained for the purpose of providing for its participants or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment ... 29 U.S.C. § 1002(1) (emphasis added).

In Donovan v. Dillingham, 688 F.2d 1367, 1373 (11th Cir.1982), the Eleventh Circuit stated that to be an employee welfare benefit plan,

[T]he intended benefits must be health, accident, death, disability ...; the intended beneficiaries must include union members, employees, former employees or their beneficiaries; and an employer or employee organization, or both, and not individual employees or entrepreneurial businesses, must establish or maintain the plan, fund, or program.

Thus, it is clear that South Central Bell’s Plan is subject to the federal statutory guidelines set out in ERISA. It is likewise clear that the remedial scheme provided in the statute for aggrieved claimants, 29 U.S.C. §§ 1109, 1131, 1132, 1140 and 1141, is the exclusive remedy available to such claimants.

ERISA was promulgated by Congress in recognition of “the increasing growth, scope and complexity of private employee benefit plans throughout the United States and the inadequacy of the existing standards governing these plans.” Russell v. Massachussetts Mutual Life Ins. Co., 722 F.2d 482, 487 (9th Cir.1983). It reflects Congress’ determination that a comprehensive legislative scheme was necessary to provide uniform and equitable administration of such plans to remedy previous problems. To this end, the act includes a provision preempting state law in the enforcement and regulation of employee welfare benefit plans. 29 U.S.C. § 1144 provides in pertinent part:

(a) Except as provided in subsection (b) of this section, the provisions of this sub-chapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title____

Preemption is not limited to state statutes governing employee welfare benefit plans but has also been consistently construed to apply to state common law, including tort and extra-contractual damage actions and awards of punitive damages under state law. Russell v. Massachusetts Mutual Life Ins. Co., 722 F.2d 482, 487 (9th Cir.1983); Dependahl v. Falstaff Brewing Corp., 653 F.2d 1208, 1216 (8th Cir.1981).

Plaintiffs have failed to invoke the remedies provided in ERISA in either their complaint or in their response to defendant’s motion for summary judgment, as they have continued to rely on state law causes of action. This court is of the opinion that plaintiffs’ state law causes of action relating to the denial of coverage by defendant are preempted by ERISA. Therefore, defendant is entitled to judgment as a matter of law on preemption grounds as well as on the question of coverage.

Summary judgment would also be appropriate on all of plaintiffs’ claims had they properly invoked ERISA remedies. With regard to the emotional distress causes of action alleged in plaintiffs’ complaint, ERISA “confers no right to sue for mental suffering caused by a violation of the terms of [an employee benefit] plan.” Bittner v. Sudoff & Rudoy Inc., 728 F.2d 820, 825 (7th Cir.1984). See also Hurn v. Retirement Fund Trust, 424 F.Supp. 80, 82 (C.D.Cal.1976). On the question of recovery of extra-contractual damages by a beneficiary of an employee benefit plan for tortious or bad faith refusal to pay claims—and peripherally the question of punitive damages—the United States Supreme Court has recently held that ERISA contains no express authority for an award of such damages. Massachusetts Mutual Life Ins. Co. v. Russell, — U.S. —, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985). Using the four-factor analysis of Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 2087, 45 L.Ed.2d 26 (1975), for implying a private right of action from a federal statute, the Court held that the legislative intent was to limit a plaintiff’s remedies to “[t]he six carefully integrated civil enforcement provisions found in [29 U.S.C. §§ 1132(a) and 1133].” Id., — U.S. at —, 105 S.Ct. at 3093. Plaintiffs’ state law cause of action for deceit has no counterpart in ERISA and is clearly not available as a remedy. Thus, because plaintiffs have failed to invoke the ERISA remedies properly, and indeed have stated causes of action which would not be cognizable under ERISA, summary judgment is proper.

The facts supporting plaintiffs’ claim of breach of fiduciary duties are very generally averred, and no statutory or case authority is cited in the pleadings supporting their claim of entitlement to compensatory and punitive damages. ERISA does, however, specifically grant a cause of action and impose liability for breach of fiduciary duty. 29 U.S.C. § 1109 states:

(a) Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed on fiduciaries by this subchapter shall be personally liable to make good to such plan any losses to the plan resulting from each such breach ..., and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary.

While it is plain from a reading of the statute that Blue Cross was a fiduciary with respect to the Plan, plaintiffs have failed to plead any set of facts which could arguably be interpreted as establishing a breach of the duties that attach to fiduciaries under ERISA. Furthermore, the statutory remedies to which plaintiffs are limited, (see Massachusetts Mutual Life Ins. Co. v. Russell, — U.S. —, 105 S.Ct. 3085, 87 L.Ed.2d 96 (1985), do not include payment to a beneficiary of compensatory or punitive damages. ' The statutory remedies include only removal of the fiduciary or restitution to the plan. Even if plaintiffs had properly asserted their cause of action for breach of fiduciary duties under ERISA, the substantial compensatory and punitive damages plaintiffs seek would not be available, and defendants are entitled to judgment as a matter of law on this issue as well.

Accordingly, there being no genuine issues of material fact to be found or fairly inferred which support plaintiffs’ claims, it is the opinion of this court that the motion of defendant for summary judgment should be granted. A separate judgment shall be submitted in accordance with the local rules.

      . Plaintiffs' complaint does not address the applicability to their cause of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1003. In their response to defendant’s motion for summary judgment, plaintiffs do not request the remedy provided in ERISA for breach of fiduciary duties set out in 29 U.S.C. § 1132. Rather, they contend that their state law remedy for breach of fiduciary duties is not limited by ERISA, a position this court finds to be incorrect. See Dependahl v. Falstaff Brewing Corp., 653 F.2d 1208 (8th Cir.1981) cert. denied, 454 U.S. 968, 102 S.Ct. 512, 70 L.Ed.2d 384 (1981).

      . Paragraph F(l)(b) of the Plan and the Summary Plan Description (Summary) provides that coverage under the Plan shall cease on the last day of the month in which an employee’s employment with the company is terminated. Page 23 of the Summary states "Coverage, of course, stops if you leave the company before retirement. It also terminates on the last day of the month in which your employment ends." (emphasis original). Paragraph F(4) of the Medical Expense Plan states: "No benefits will be paid by this Plan for any expenses incurred or treatment received after cessation of insurance as provided in paragraphs 1 or 2 of this section, except that in the event of hospital confinement at that time, ...”

      . Paragraphs F and G of the Plan; pages 24-25 of the Summary.

      . In their response to defendant's motion for summary judgment, plaintiffs rely on the statements of public policy by the Mississippi Supreme Court in Brown v. Blue Cross & Blue Shield of Miss., 427 So.2d 139 (Miss.1983), which is distinguishable from the case before this court. In Brown, the employer’s group policy . was cancelled by agreement between the employer and the insurer, rather than by termination of employment, and the employee was unable to secure other insurance. Id. at 141.

      . The preemption provisions have limited exceptions that are inapplicable to the instant case. 29 U.S.C. § 1144(b)(2)(A) provides that ERISA does not exempt "any person from any law of any State which regulates insurance, banking or securities.” § 1144(b)(4) preserves state regulation of “generally applicable criminal law[s] of a state.” Lastly, where state law is coextensive with federal laws and provides a means of enforcing federal law, there is no preemption (e.g. discrimination laws); see Shaw v. Delta Airlines, 463 U.S. 85, 103 S.Ct. 2890, 77 L.Ed.2d 490 (1983).


author: ARCENEAUX, District Judge.

text:
    Harold CHILDRESS v. Margaret M. HECKLER, etc.
    Civ. A. No. 83-272.
    United States District Court, E.D. Louisiana.
    Aug. 20, 1985.
    Kim A. Barkan, New Orleans, La., for plaintiff; Barkan & Neff Co., L.P.A., Columbus, Ohio, of counsel.
    W. Glenn Burns, Asst. U.S. Atty., New Orleans, La., for defendants.
   OPINION

ARCENEAUX, District Judge.

This matter comes before the Court on plaintiff’s objections to the Magistrate’s recommendation denying attorney’s fees under the Equal Access to Justice Act, 28 U.S.C. § 2412 (EAJA).

In 1979, plaintiff applied for disability benefits under the Social Security Act (Tr. 50). After denials on the initial application and on reconsideration, on March 14, 1980, the Administrative Law Judge decided in favor of plaintiff finding September 13, 1978 to be the date of disability (Tr. 135, 136). On July 15, 1981, plaintiffs benefits were terminated based on a review of his file which indicated he could return to work in July 1981 (Tr. 137). On April 23, 1982, the Administrative Law Judge found plaintiff was still disabled and reinstated his benefits (Tr. 13-16). The Office of Disability Operations requested review by the Appeals Council (Tr. 176) and on November 15, 1982, the Appeals Council found plaintiffs disability ended effective October 31, 1981. Plaintiff filed suit for judicial review in the District Court on January 20, 1983. Plaintiff moved for summary judgment that the Secretary’s determination of no disability was not supported by substantial evidence primarily because plaintiff had disabling pain corroborated by objective findings. The Secretary filed a cross motion that its decision was supported by substantial evidence.

On March 12,1984, the Magistrate issued his findings and recommendation. The Magistrate denied the cross motion but found the council’s conclusion that the claimant’s pain did not preclude him for performing sedentary work activity was not supported by substantial evidence in the record and remanded for further proceedings. This Court entered judgment in accordance with the recommendation on May 17, 1984.

On September 12, 1984, the Administrative Law Judge awarded benefits to plaintiff and on January 8, 1985, the Appeals Council adopted that decision.

Plaintiff then filed his motion for attorney’s fees under the EAJA. The Magistrate denied the motion reasoning: 1) attorney’s fees are not awardable following an order to remand because plaintiff has not yet “prevailed,” McGill v. Secretary of Health and Human Services, 712 F.2d 28 (2d Cir.1983) cert. denied — U.S. —, 104 S.Ct. 1420, 79 L.Ed.2d 745 (1984); and 2) the award of benefits at the agency level is not the required final judicial action, Guthrie v. Schweiker, 718 F.2d 104 (4th Cir. 1983).

The EAJA provides in part:

(d)(1)(A) ... a court shall award to a prevailing party other than the United States fees and other expenses ... incurred by that party in any court ... unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.
(B) A party seeking an award of fees and other expenses shall, within thirty days of final judgment in the action, submit to the Court an application for fees and other expenses ...

Attorney’s fees are awardable under the EAJA for judicial review of decisions of the Secretary under the Social Security Act but not for proceedings at the agency level. Clifton v. Heckler, 755 F.2d 1138, 1142 (5th Cir.1985). Plaintiff seeks attorney’s fees attributable only to the proceedings in the District Court.

“Prevailing party” is not defined in the act but the legislative history indicates the interpretation is the same as that developed by jurisprudence under existing fee shifting statutes. U.S. v. 329.73 Acres, Grenada and Yalobusha Counties, 704 F.2d 800, 808 (5th Cir.1983). The term is not limited to parties who obtain a final judgment.

[T]he phrase “prevailing party” should not be limited to a victory only after entry of a final judgment following a full trial on the merits. A party may be deemed prevailing if he obtains a favorable settlement of his case, Foster v. Boorstein, 561 F.2d 340 (D.C.Cir.1977); if the plaintiff has sought a voluntary dismissal of a groundless complaint, Corcoran v. Columbia Broadcasting System, Inc., 121 F.2d 575 (9th Cir.1941); or even if he does not ultimately prevail on all issues, Bradley v. School Board of the City of Richmond, 416 U.S. 696 [94 S.Ct. 2006, 40 L.Ed.2d 476] (1974).
In cases that are litigated to conclusion, a party may be deemed “prevailing” for purposes of a fee award in a civil action prior to the losing party having exhausted its final appeal. A fee award may thus be appropriate where the party has prevailed on an interim order which was central to the case, Parker v. Matthews, 411 F.Supp. 1059, 1064 (D.D.C.1976) or where an interlocutory appeal is “sufficiently significant and discrete to be treated as a separate unit”, Van Hoomissen v. Xerox Corp., 503 F.2d 1131, 1133 (9th Cir.1974).

House Report at 11 reprinted in 1980 U.S. Code Gong. & Ad.News 4953, at 4990; McGill 712 F.2d at 30, U.S. v. 329.73 Acres, 704 F.2d 800. See also Hanrahan v. Hampton, 446 U.S. 754, 100 S.Ct. 1987, 64 L.Ed.2d 670 (1980) (a favorable final judgment after a full trial is not necessary to be “prevailing” and fees pendente lite are awardable, but success on some important issue is a prerequisite); Brown v. Culpepper, 559 F.2d 274 (5th Cir.1977) (a party is “prevailing” even where the litigation is settled by voluntary agreement).

A plaintiff who obtains only an order of remand for further evidence has not succeeded on the merits so as to be a prevailing party entitled to fees. McGill, 712 F.2d 28, 31. The instant case is distinguishable from McGill because plaintiff has been awarded benefits at the agency level and clearly is a prevailing party. Further, McGill seems to approve an award under the circumstances of this case. In holding the remand order alone did not entitle the plaintiff to fees the Court noted, “[s]he will not become a prevailing party unless and until she is awarded benefits, at which time her application for appropriate attorney’s fees may again be considered.” McGill, 712 F.2d 32. In a similar fact situation, Guthrie, 718 F.2d 104, the appellate court refused to award fees because the Secretary had not filed the transcript and findings and the District Court had not entered a final judgment as required by 42 U.S.C. § 405(g), but the Court indicated the plaintiff could reapply for fees after this was done. On remand the District Court awarded fees, Guthrie v. Heckler, 587 F.Supp. 1471 (M.D.N.C.1984).

The Court elects not to follow the principal holding of Guthrie 718 F.2d 104, that a final judgment must be entered before fees are awarded believing this to be inconsistent with the legislatively approved definition of prevailing party discussed above.

Because of his finding, the Magistrate did not determine whether the Secretary’s position whs substantially justified or that there were special circumstances making an award unjust. The Court remands this matter for further findings and recommendation.

IT IS SO ORDERED.


author: NANGLE, Chief Judge.

text:
    Angela BOND, et al., Plaintiffs, v. Daniel B. KECK, et al., Defendants.
    No. 84-0292C(1)
    United States District Court, E.D. Missouri, E.D.
    Aug. 21, 1985.

      Charles R. Oldham and Anne V. Maloney, St. Louis, Mo., for plaintiffs.
    Norman C. Parker, Thomas M. Blumenthal, St. Louis, Mo., for defendants.
   MEMORANDUM

NANGLE, Chief Judge.

This is a suit brought by Angela Bond, a minor, and her parents, Walker and Rubye Bond, against the Ferguson-Florissant School District, Daniel B. Keck, Superintendent, and certain members of the Board of Education of the Ferguson-Florissant School District, individually and in their official capacity. Count I is a complaint by Angela Bond that she was discriminated against on the basis of her race with respect to her placement in an instructional math class of predominantly black students and retaliated against because of her complaint of discrimination in violation of 42 U.S.C. §§ 1981 and 1983. Count II is a similar complaint by her parents.

This case was tried to this Court sitting without a jury. This Court having considered the pleadings, the testimony of the witnesses, the documents in evidence, and the stipulations of the parties, and being fully advised in the premises, hereby makes the following findings of fact and conclusions of law, as required by Rule 52 of the Federal Rules of Civil Procedure. Fed.R.Civ.P. 52.

A. FINDINGS OF FACT

1. Plaintiffs Walker Bond, Rubye Bond and Angela Bond are residents of St. Louis County, Missouri. Angela Bond is a minor black female enrolled in the Commons Lane School of the Ferguson Reorganized School District, R-II, a public school in the State of Missouri. Angela Bond was enrolled in the Commons Lane School as a first grade student during the 1982-83 school year.

2. Defendants are members of the Board of Education of the Ferguson-Florissant School District and various other employees or representatives of the Ferguson Reorganized School District R-II.

3. During the first semester of the 1982-83 school year, there was a combined first and second grade in which three (3) teachers were assigned for the first and second grade classes. These three (3) teachers were Rosella Branch, Carolyn Hack and Nancy Arnold. The students were divided into three (3) homerooms and, during the course of the day, they were divided and mixed into different classrooms according to subject matter. The combined first and second grades consisted of a total enrollment of 80 students. The racial composition of these 80 students was 37 black students and 43 white students.

4. During the first semester of the 1982-83 school year, Angela Bond was placed in Rosella Branch’s math class which consisted of twenty-five (25) first and second grade students. The racial composition of these twenty-five (25) students was ten (10) black students and fifteen (15) white students.

5. In January of 1983, the administration of the Commons Lane School decided that the class size of the. first and second grade necessitated the addition of a fourth teacher to the staff. On February 3, 1983, a fourth teacher, Terry Finn, was added to the staff and the three (3) homerooms were divided into four (4) homerooms. In addition, the individual subject matter classes were divided from three (3) into four (4) rooms. This reduced the student/teacher ratio in each instructional class from an average of 27/1 to an average of 20/1. Thus, the three (3) math classes were divided into four (4) math classes.

6. On February 3, 1983, Angela Bond was moved from the math class being taught by Rosella Branch to the new math class taught by Terry Finn. Ms. Finn’s new math class consisted of seventeen (17) students. The racial composition of Ms. Finn’s new math class was fourteen (14) black students and three (3) white students.

7. The grouping of students in the four (4) math classes was determined by the four (4) teachers of the first and second grade. Race did not play any part in the grouping decisions made by the four (4) teachers. The students were assigned to their particular math classes based on classroom performance, the teachers’ observation and “time at task”.

8. Prior to the arrival of Ms. Finn, there were three (3) math classes, of which Mrs. Branch’s class was the “highest”. After the arrival of Ms. Finn, Mrs. Branch continued to teach the “highest” math class, but Ms. Finn taught the second highest math class. During the fall of 1982, Angela Bond ranked tenth out of ten among the first graders in Mrs. Branch’s math class. Following her transfer to Ms. Finn’s math class, Angela Bond ranked fifth out of ten among first graders in Ms. Finn’s math class.

9. This Court credits Mrs. Branch’s testimony that Angela Bond’s work/study habits were not suitable for the highest math class. She testified that Angela Bond had trouble staying in her seat, was always interested in the work being done by the other students, and was often careless about not completing her work. This Court agrees with Mrs. Branch’s judgment that Angela Bond would benefit most from the group teaching method utilized by Ms. Finn, as opposed to the individualized style of teaching utilized by Mrs. Branch. This Court also credits Ms. Finn’s testimony that, given Angela Bond’s poor time on task and short attention span, Angela Bond was not misplaced in her math class.

10. The time spent by Angela Bond in her math class is approximately 45 minutes per school day.

11. The legitimate, non-diseriminatory reasons given for Angela Bond’s placement in Ms. Finn’s math class are not pretextual. Angela Bond was properly assigned to Ms. Finn’s math class.

12. Angela Bond’s race was not a factor in her failure to be chosen as student of the month.

13. Angela Bond was not, in any way, shape or form discriminated against on account of her race.

14. Walker and Rubye Bond complained to various defendants about the placement of their daughter in Ms. Finn’s math class. Defendants did not cause any acts to be taken against Walker, Rubye or Angela Bond in retaliation for their complaints. The classroom observation of Angela made by Mr. Paul Buenneman was merely an effort by defendants to investigate plaintiffs’ complaints and to review the propriety of Angela Bond’s placement in Ms. Finn’s math class. Moreover, this Court credits the testimony of several defendants that the Bonds did not initially object to Angela Bond’s placement in Ms. Finn’s math class on the grounds of racial discrimination. Initially, Angela Bond’s parents objected on the ground that their daughter deserved to be in the “highest” math class. When the Bonds did finally assert race as a basis for their objection to Angela Bond’s placement in Ms. Finn’s math class, defendants did not subsequently take any actions against plaintiffs in retaliation for said complaint of racial discrimination.

15. Defendants did not treat Angela Bond, an eventual participant in the “Probe” program, differently than other participants in said program, because at the time of the incidents in question, first graders had not yet been selected for participation in the Probe program.

16. Plaintiffs have not been damaged by any action taken by any defendant.

17. Plaintiffs’ complaints, arising primarily from the hypersensitivity of both plaintiffs, have resulted in several confrontations between plaintiffs and defendants. As a result, the administration, faculty and staff of the Commons Lane School are understandably apprehensive in their efforts to provide Angela with an appropriate education. Nevertheless, Commons Lane is a public school. Its rules and regulations encourage parental involvement in the education of their students. The school has the authority and the ability to regulate or restrict the conduct of parents to the extent that they interfere with the ability of the school to teach. Defendants failed to prove that the Bonds were or are interfering with the functioning of the Commons Lane School to a degree that warrants federal court equitable intrusion.

B. CONCLUSIONS OF LAW

This Court has subject matter jurisdiction over plaintiffs’ claims and personal jurisdiction over the parties. Venue is proper in this District.

Plaintiffs claim that defendants violated 42 U.S.C. §§ 1981 and 1983. To recover on their claims, plaintiffs must prove purposeful discrimination on the basis of race. General Building Contractors v. Pennsylvania, 458 U.S. 375, 102 S.Ct. 3141, 73 L.Ed.2d 835 (1982); Williams v. Anderson, 562 F.2d 1081 (8th Cir. 1977); MacDonald v. Ferguson Reorganized School District R-2, 530 F.Supp. 469 (E.D.Mo.1981). Plaintiffs’ claims must be denied because race did not play any part in any of the actions taken by defendants. See Findings of Fact No. 13. Angela Bond was properly transferred to Ms. Finn’s math class on the basis of legitimate, non-discriminatory criteria. See Findings of Fact Nos. 7 and 9. While there is a subjective component to these criteria, Angela Bond’s numerical scores in her math class can hardly be described as a subjective criteria and therefore provided an objective basis for Angela Bond’s transfer. Moreover, the simple statistical fact that the math class to which Angela Bond was transferred consisted of considerably more black students than white students does not, without more, rise to the level of a violation of Angela Bond’s constitutional rights. This is especially true in view of the fact that Angela spent a mere 45 minutes out of each day in her math class. See Findings of Fact No. 10. Plaintiffs do not challenge her placement in any other class. Angela Bond was properly placed in Ms. Finn’s math class on the basis of her ability and such grouping does not violate the Constitution. McNeal v. Tate County School District, 508 F.2d 1017, 1020 (5th Cir.1975). Plaintiffs’ other claims concerning the student of the month program and the Probe program are equally without merit. See Findings of Fact Nos. 12 and 15. Moreover, defendants did not retaliate against plaintiffs at all or in response to their complaint of race discrimination. See Findings of Fact No. 14. Accordingly, defendants are entitled to judgment in their favor on plaintiffs’ complaint.

Defendants counterclaimed for injunctive relief against Angela Bond’s parents. The order requested by defendants would enjoin Walker and Rubye Bond from entering the premises of the Commons Lane School and from communicating with any employee of the Ferguson Reorganized School District R-II “during school class hours in any manner which disrupts the daily educational functions of the school district of the peaceful and orderly operation of any school in the district which Angela Bond attends.’’ In the opinion of this Court, the relief sought by defendants is not warranted. See Findings of Fact No. 17. This Court has no doubt that Angela Bond’s parents have made life more difficult for everyone at Commons Lane School. To the extent that the Bonds exceed their rights with respect to the education of Angela Bond, defendants have many avenues of relief available to them which are both adequate to deal with any potential situation and are less intrusive than a federal court order. In addition, this Court finds the proposed order submitted by defendants to be so vague as to require constant interpretation and application by this Court over a long period of time. Angela Bond will soon enter the fourth grade at Commons Lane School. She could possibly spend the next eight (8) years in Ferguson-Florissant public schools. Defendants’ proposed order would have this Court supervise the relationship between the school district and Angela Bond’s parents over the next eight (8) years. The facts presented to this Court do not depict a situation that warrants such intervention by this Court. Accordingly, plaintiffs are granted judgment in their favor on defendants’ counterclaim for injunctive relief.

Costs are taxed against the plaintiffs. Defendants have requested an award of attorney’s fee under 42 U.S.C. § 1988. Defendants are granted leave to file, in writing and within ten (10) days of this date, a memorandum and affidavit supporting their right to an award of attorney’s fees and the amount of said award. Plaintiffs shall have five (5) days thereafter to oppose defendants’ request for an award of attorney’s fees.