author: YOUNG, District Judge.

text:
    BEAVER BUILDERS, Plaintiff, v. SCHNIP BUILDING, et al., Defendants.
    Civ. A. No. 85-0881-Y.
    United States District Court, D. Massachusetts.
    Dec. 5, 1985.

      Lawrence M. Slater, Peter A. Johnson, Lane & Altman, Boston, Mass., for plaintiff.
    Robert J. Sherer, Roche, Carens & De-Giacomo, Boston, Mass., for Schnip.
    Barbara Levine, Sullivan & Worcester, Boston, Mass., for Charles Burd.
    William A. Horne, Goulston & Storrs, Boston, Mass., for State Properties of New England, Inc.
   MEMORANDUM AND ORDER

YOUNG, District Judge.

This case arises out of the alleged breach of two construction contracts. Jurisdiction exists under 28 U.S.C. § 1332. The plaintiff, Beaver Builders (“Beaver”), alleges that the defendant Schnip Building company (“Schnip Corp.”) failed adequately to perform two contracts covering construction work in Connecticut. The defendants John Schnip and Charles Burd are sued as guarantors of one of the contracts. Schnip and Burd each have moved to dismiss pursuant to Fed.R.Civ.P. 12(b)(2), alleging that they are not amenable to suit in Massachusetts. For the reasons discussed below the motions are denied.

I.

At all times relevant to this matter Schnip and Burd were chairman of the board and president, respectively, of Schnip Corp., a Connecticut corporation with its principal place of business at Norwichtown, Connecticut. In addition, Schnip owned stock in the corporation. Both Burd and Schnip were, and continue to be, residents of Old Lyme, Connecticut. Beaver is a Massachusetts corporation with its principal place of busines in Newton Centre, Massachusetts.

Sometime prior to June, 1983 Schnip Corp., through Burd and Schnip, entered into negotiations with Beaver concerning certain construction work to be performed at the Crystal Mall site in Waterford, Connecticut. Both Burd and Schnip actively pursued these negotiations, and it is undisputed that each of them came to Beaver’s Massachusetts office at least once to negotiate the terms of the construction contracts. Evidently, a major objective of Beaver in these negotiations was to secure personal guarantees from Schnip and Burd for any contracts that might be awarded. The parties’ affidavits are in disagreement as to where the negotiations were taking place when the subject of personal guarantees arose. Burd and Schnip swear that the guarantees were negotiated entirely in Connecticut. Thomas McCaffary, Beaver’s vice president, and Frank Barnhill, Beaver’s project manager, swear that the guarantees were negotiated, at least in part, in Massachusetts.

Ultimately the parties’ negotiations resulted in Beaver awarding two contracts to Schnip Corp. The first, referred to in the complaint as the “Mall Agreement,” was signed in Connecticut by Burd, for Schnip Corp., on June 21, 1983. On June 22, 1983 Burd and Schnip each executed, in Connecticut, a personal guarantee of Schnip Corp.’s performance under the Mall Agreement. All the work required under the Mall Agreement was to be performed in Connecticut. On October 28,1983 Burd signed the second agreement for Schnip Corp., referred to in the complaint as the “Penny Agreement.” This too he signed in Connecticut. No personal guarantees were given in connection with the Penny Agreement. All the work required under the Penny Agreement also was to be performed in Connecticut.

II.

A federal court sitting in diversity must apply the law of the forum state to determine the amenability to suit of a nonresident. Hahn v. Vermont Law School, 698 F.2d 48, 49 (1st Cir.1983). Under Massachusetts law a court may exercise personal jurisdiction over a nonresident defendant only if the following two questions can be answered in the affirmative:

(1) is the assertion of jurisdiction authorized by statute, and (2) if authorized is the exercise of jurisdiction under State law consistent with basic due process requirements mandated by the United States Constitution.

Good Hope Industries v. Ryder Scott Co., 378 Mass. 1, 5-6, 389 N.E.2d 76 (1979).

The Massachusetts Long Arm Statute authorizes jurisdiction over a nonresident defendant as to a cause of action that arises out of that person’s “transacting any business” in the commonwealth. Mass. Gen.Laws ch. 223A, § 3(a). Burd and Schnip argue that the cause of action on the guarantee arises out of transactions wholly separate and distipct from any business they transacted in Massachusetts concerning the construction contracts. Thus, they argue, since the guarantees were negotiated in Connecticut, signed in Connecticut, and related to work to be performed in Connecticut, chapter 223A does not authorize jurisdiction in this case. The argument fails for two reasons.

To begin, the Court is not persuaded that the guarantees were negotiated entirely outside of Massachusetts. As noted above, the affidavits submitted by the parties contradict each other on this point. The Court finds that given the importance of the guarantees to Beaver, it strains common sense to believe that Burd and Schnip meticulously avoided discussing the guarantees whenever they negotiated the other provisions of the construction contracts in Massachusetts. The Court finds credible the affidavits of Barnhill and MeCaffery which state that the personal guarantees were negotiated in Massachusetts. Jurisdiction is authorized under the Massachusetts Long Arm Statute where a nonresident defendant is physically present to either negotiate or execute a contract. Carlson Corp. v. University of Vermont, 380 Mass. 102, 402 N.E.2d 483 (1980); First National Bank of Boston v. Bergreen, 11 Mass.App. 956, 417 N.E.2d 50 (1981).

But even if the Court was not persuaded that the guarantees were negotiated partly in Massachusetts, this ease still would come within the literal language of the Long Arm Statute. This is because the negotiation and execution of the guarantees in fact was not the transaction of business separate and distinct from the negotiation of the underlying construction contracts. The guarantees are tied inextricably to the obligations and performance of the Mall Agreement. Breach of the former can not be proved without reference to the latter. Moreover, it is obvious that Burd’s and Schnip’s purpose in executing the guarantees was to provide an economic benefit to Schnip Corp., with whose future their own prosperity was tied. Therefore, the Court rules that the activities undertaken by Burd and Schnip to procure the Mall Agreement properly are considered in determining whether jurisdiction exists in this case.

This Court’s determination of the statutory question is controlled to a large degree by the First Circuit’s recent decision in Bond Leather Co. v. Q.T. Shoe Mfg. Co., 764 F.2d 928 (1st Cir.1985). There the defendant quarantor was an Ohio corporation whose agents were never physically present in Massachusetts. The guarantor executed the guarantee in order to enable its president’s brother to obtain credit from the plaintiff, a Massachusetts corporation. The defendant guarantor’s contacts with Massachusetts, other than the execution of a guarantee to a Massachusetts resident, consisted of mailing four letters to Massachusetts in the course of negotiating the guarantee. The court of appeals found these actions to be “within the reach of § 3(a).” Id. at 932. In so holding the court specifically “reject[ed] the argument that the assertion of jurisdiction under § 3(a) is unauthorized here simply because [the Ohio guarantor] has transacted no business other than the execution of the guarantee in question.” Id. at 932 (emphasis in original). In this case, the negotiation of the guarantee and the underlying contract in Massachusetts, along with the execution of the guarantee itself, satisfies the literal requirement of § 3(a) that the cause of action arise out of the defendants transacting business in Massachusetts.

Having determined that the “literal” requirements of § 3(a) are satisfied, the question of whether jurisdiction is “authorized” by the statute “tend[s] to converge” with the constitutional question. Good Hope Industries v. Ryder Scott Co., 378 Mass at 6, 389 N.E.2d 76. This, is because “§ 3 cannot authorize jurisdiction which is constitutionally unacceptable, even though the fact pattern asserted in support of jurisdiction apparently satisfies the statute’s literal requirements.” Id. at 6, 389 N.E.2d 76.

The Due Process clause of the 14th Amendment dictates that a state may exercise in personam jurisdiction over a nonresident defendant only if “maintanence of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). This now familiar test often is referred to as “minimum contacts” analysis. The label is misleading, however. For it is not only the number of contacts, but also the “quality and nature of the activity” that determines whether due process is satisfied. Id. at 319, 66 S.Ct. at 160; cf. McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957) (delivery of one insurance contract in forum state a sufficient contact). Where a defendant “purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws,” Hanson v. Denkla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958), he “should reasonably anticipate being hauled into court there.” World-Wide Volkswagen v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980).

Where an out-of-state party contracts with a resident of the forum state, that contract alone does not establish sufficient minimum contacts. Burger King Corp. v. Rudzewicz, — U.S. -, 105 S.Ct. 2174, 2185, 85 L.Ed.2d 528 (1985). But where the out-of-state party’s actions are “purposefully directed” towards residents of the forum state, and he has “created ‘continuing obligations’ between himself and residents of the forum ... he manifestly has availed himself of the privilege of conducting business there, and ... it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well.” Id., 105 S.Ct. at 2184 (citations omitted). Applying these standards to the case at bar, the Court rules that exercise of jurisdiction over Burd and Schnip is consistent with the due process clause because they have availed themselves of the benefits and privileges of doing business in the commonwealth. In their attempts to bind Beaver into a complex contractual relationship with Schnip Corp. both were physically present in Massachusetts, both directly negotiated the terms of the guarantees and the underlying contracts, and both executed their personal guarantee to the Massachusetts plaintiff.

This case is distinguishable from Bond Leather, where the requisite contacts between the defendant guarantor and Massachusetts were found to be lacking. There the defendant did not participate directly in negotiating the terms of the guarantee. 764 F.2d at 934. Nor did any commercial benefits flow to it as a result of the guarantee. Id. at 934. Thus, no intent on the part of the defendant to exploit the local economy was shown. Here, Burd and Schnip executed the guarantees because it would benefit them in their business. They “deliberately chose to do business with a Massachusetts resident, presumably because it was to [their] advantage.” Carlson Corp. v. University of Vermont, 380 Mass at 109, 402 N.E.2d 483.

Accordingly, the motions to dismiss are DENIED.

      . Burd and Schnip argue that any activities they engaged in as officers of Schnip Corp. should not be considered transacting business for purposes of a suit brought against them personally. The "general rule is that jurisdiction over the individual officers of a corporation may not be based merely on jurisdiction over the corporation.” Escude Cruz v. Ortho Pharmaceutical, 619 F.2d 902, 906 (1st Cir.1980). This does not mean, however, that a court may not look to the officer’s actual activities, or the personal economic benefit the officer may expect to derive from the transactions.


source: Caselaw Access Project

author: FELDMAN, District Judge.

license: Public Domain

text:
    CANADIAN UNIVERSAL INSURANCE COMPANY and American Universal Insurance Company v. THIBAUT OIL COMPANY, Kenneth Laurent, T. Floyd Jarreau, Kate Rice Thibaut, Jane Thibaut Boyce, Mary Elizabeth Thibaut Rives, John Edgar Thibaut, Margaret Thibaut Watson, James Henry Thibaut, Thomas A. Thibaut, David A. Thibaut, Mercedes Thibaut Smith, Carl W. Cleveland, Trustee, Trust in Favor of the Children of David D. Thibaut, R. and United States Fidelity & Guaranty Company.
    Civ. A. No. 84-3504.
    United States District Court, E.D. Louisiana.
    Dec. 5, 1985.

      Adams & Reese, Thomas J. Wyllie, Philip 0. Bergeron, New Orleans, La., for plaintiffs.
    L. Phillip Canova, Jr., Plaquemine, La., Chaffe, McCall, Phillips & Toles, Jonathan C. McCall, New Orleans, La., Chris Siegrist, Houma, La., Sidney Marchand, III, Donaldsville, La., Lloyd Bourgeois, Napoleonville, La., for defendants.
   ORDER AND REASONS

FELDMAN, District Judge.

Defendants filed a joint motion to dismiss, or, in the alternative, to stay plaintiffs’ pending declaratory judgment action.

The facts are not in dispute. This controversy arises out of an explosion of liquid propane gas which occurred on or about December 30, 1982, in the vicinity of rural Assumption Parish. Several lawsuits resulted from the accident. The first was filed in the Civil District Court for the Parish of Orleans in June, 1983. ’Two other lawsuits were subsequently filed in state court for damages resulting from the explosion, and were consolidated with the original suit pending in the Orleans Parish Civil District Court. The consolidated state court suits are set for trial on June 2, 1986.

On July 31, 1984, more than one year after the original state action was filed, certain defendants or third-party defendants in the state court action brought the instant federal suit for declaratory judgment. In this diversity action, plaintiffs seek a declaration of their rights and obligations regarding certain insurance policies they issued and which are presently at issue in the pending state court proceedings. Essentially, plaintiffs here seek a declaration as to whether the allegations asserted against their alleged insured in state court are beyond the scope of coverage provided by the insurance policies at issue.

It is uncontested that the identical claim of no coverage presented here, as well as other insurance related issues, are now being litigated in the consolidated state proceedings. It is also uncontested that all of the parties joined as defendants or third-party defendants in the state court consolidated actions have also been named in the federal suit. Also, all issues, not just the coverage issue, can be resolved in state court, but only the coverage issue is controverted here.

Finally, several parties have not yet filed responsive pleadings and at least some of the parties have not yet even been served in the federal action. Some of the defendants have moved to continue the trial date of the federal action, and have indicated that they wish to add additional parties to the suit.

It is against this background that this Court must decide the instant motion to dismiss or, alternatively, to stay the federal action.

This Court holds that this case falls squarely within the decision of the Supreme Court in Brillhart v. Excess Insurance Co. of America, 316 U.S. 491, 62 S.Ct. 1173, 86 L.Ed. 1620 (1942), cited with approval by the Supreme Court in Colorado River Water Conservation District v. United States, 424 U.S. 800, 819, 96 S.Ct. 1236, 1247, 47 L.Ed.2d 483 (1976), and in Will v. Calvert Fire Insurance Co., 437 U.S. 655, 664-5, 98 S.Ct. 2552, 2558-59, 57 L.Ed.2d 504 (1978), and by the Fifth Circuit in Hollis v. Itawamba County Loans, 657 F.2d 746, 750 (5th Cir.1981). See also, Sonnenshein, “Abstention: The Crooked Course of Colorado River”, 59 Tulane L.Rev. 651 (1985).

In Brillhart, the Excess Insurance Co. of America brought a diversity action under the Federal Declaratory Judgment Act, seeking a declaration of its obligations under a reinsurance agreement, because of a determination of liability of an alleged insured and subsequent garnishment proceedings which were instituted in state court in which Excess was named as a party. After the garnishment action in the state court was commenced, but before it had been served with process, Excess filed a declaratory judgment action in federal district court. The defendant moved to dismiss on the ground that the issues in the federal action could be decided in the prior pending state garnishment proceeding. In reviewing the Circuit Court’s reversal of the order of dismissal of the District Court, Justice Frankfurter, writing for the Court, held:

“Although the District Court had jurisdiction of the suit under the Federal Declaratory Judgments Act, ..., it was under no compulsion to exercise that jurisdiction. The petitioner’s motion to dismiss the bill was addressed to the discretion of the court, (citations omitted) The motion rested upon the claim that since another proceeding was pending in a state court in which all the matters in controversy between the parties could be fully adjudicated, a declaratory judgment in the federal court was unwarranted. The correctness of this claim was certainly relevant in determining whether the District Court should assume jurisdiction and proceed to determine the rights of the parties. Ordinarily, it would be uneconomical as well as vexatious for a federal court to proceed in a declaratory judgment suit where another suit is pending in a state court presenting the same issues, not governed by federal law, between the same parties. Gratuitous interference with the orderly and comprehensive disposition of a state court litigation should be avoided____ Where a district court is presented with a claim such as was made here, it should ascertain whether the questions in controversy between the parties to the federal suit, and which are not foreclosed under the applicable substantive law, can better be settled in the proceeding pending in the state court. This may entail inquiry into the scope of the pending state court proceeding and the nature of defenses open there. The federal court may have to consider whether the claims of all parties in interest can satisfactorily be adjudicated in that proceeding, whether necessary parties have been joined, whether such parties are amenable to process in that proceeding, etc.” (emphasis added)

316 U.S. at 494-95, 62 S.Ct. at 1175-76. The Supreme Court reversed and remanded.

The rule of law nurtured in Brillhart has been aptly stated in practical terms as follows:

“Thus, where a contemporaneous state proceeding will resolve expeditiously all issues in controversy, this Court should defer to the state court proceeding by declining to exercise jurisdiction under 28 U.S.C. § 2201, especially in a matter interpreting state law.”

Ohio Cas. Co. v. Jackson County Bank, 562 F.Supp. 1165, 1168 (W.D.Wisconsin 1983).

In Ohio Cas Co., the court held that jurisdiction over an action for declaratory relief would not be exercised in light of a contemporaneous state proceeding, where the state proceedings were entirely adequate to resolve the issues also presented in the federal suit, and where, as here, no federal interests whatsoever were involved in the ultimate determination of the issues in the case.

In this case, neither party disputes that the state court is fully able to adjudicate all of the issues (and more) in dispute in the federal action. Moreover, it is clear that a federal interest is not involved, and federal law is not implicated in the controversy giving rise to the action. Not only is the underlying controversy purely one of state law, but, in addition, it is uncontested the question of law presented in the declaratory judgment action is unsettled in the Louisiana courts. Accordingly, this Court holds that it would be inappropriate for it not to decline jurisdiction under the circumstances. In the setting here, notions of comity counsel that the state courts ought to have the first opportunity to settle matters of purely state law. It is this Court’s opinion that if this Court were to exercise its jurisdiction, it would be committing precisely the kind of “gratuitous interference with the orderly and comprehensive disposition of a state court litigation” which Justice Frankfurter cautioned was to be “avoided”. Brillhart, supra.

In reaching its conclusion, this Court is also guided by the principle that “[t]he Declaratory Judgments Act must not be used to resolve only particular issues without settling the entire controversy, ... especially where the entire controversy may be settled by a suit in state court____ The purpose of 28 U.S.C. § 2201 is not served by trying a case piecemeal.” Ohio Cas. Co., supra at 1169. Here, not only are the plaintiffs in the state actions not parties to the federal action, but it is clear that in any event the underlying controversy will have to be resolved by the state courts. Here, it is clear that the consolidated state action is a far more efficient vehicle for resolving the entire controversy than a federal action which can fashion only limited piecemeal relief.

The federal litigation has made little progress. Various motions for continuance are pending and several defendants have yet to answer; some have not even been served. Thus, this Court deems that it is in the interest of “ ‘[w]ise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation’ ”, that this Court dismiss the instant action. Colorado River, supra, 424 U.S. at 818, 96 S.Ct. at 1246.

In conclusion, this Court joins in the sentiments expressed by the District Court in Ohio Cas. Co., supra at 1170, that “[w]here the whole controversy may be heard in contemporaneous state court proceedings, [the plaintiff] has no right to an adjudication of its interests (under state law) in this Court. The public interest demands that the time of the federal courts be more judiciously spent.” See also Moses Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983); Doby v. Brown, 232 F.2d 504 (4 Cir.1956), cert. den. 352 U.S. 837, 77 S.Ct. 57, 1 L.Ed.2d 55 (1956).

For all of the foregoing reasons,

IT IS ORDERED:

The Joint Motion for Dismissal by defendants is hereby GRANTED, this Court abstains from exercising its jurisdiction, and the case is dismissed without prejudice to proceed in the state courts of competent jurisdiction. Judgment will be entered accordingly.


author: La PLATA, District Judge.

text:
    Dawn GLAMBIN, Plaintiff, v. J.C. PENNEY COMPANY, a foreign corporation, and Equitable Life Assurance Society of the United States, Defendants.
    No. 85-CV-71489-DT.
    United States District Court, E.D. Michigan, S.D.
    Dec. 5, 1985.
    Michael R. Osaer, Sterling Heights, Mich., for plaintiff.
    Edward A. Batchelor, III, Southfield, Mich., for defendants.
   ORDER DENYING DEFENDANT EQUITABLE LIFE’S MOTION FOR SUMMARY JUDGMENT

La PLATA, District Judge.

On December 30, 1984, Plaintiff, Dawn Glambin, instituted a slip and fall action in the Wayne County Circuit Court against two Defendants, a department store at a shopping mall and an entity which she believed was the owner of the mall. Therein, she pleaded that she sustained injuries on December 30, 1981, when she fell on a slippery stairway leading to the entrance of a J.C. Penney retail outlét at the Northland Mall.

After discovering that Equitable Life Assurance Society of the United States (Equitable Life), rather than Northland Mall, was the corporate entity which owned the shopping center, Plaintiff filed an amended complaint in the circuit court on March 25, 1984. This Court acquired jurisdiction over the dispute on April 4, 1985, when one of the Defendants, J.C. Penney Company, filed a petition for removal, pursuant to 28 U.S.C. § 1441.

On August 8, 1985, Defendant Equitable Life filed a Motion for Summary Judgment, asserting that Plaintiff’s claim against it is barred by the three year period of limitations applicable to personal injury actions, M.C.L.A. § 600.5805(8). Equitable Life argues that the amended complaint, which was filed more than two months after the expiration of the three year period of limitations, does not relate back to the date the original Complaint was filed.

In opposition to the Motion for Summary Judgment, Plaintiff maintains that her action against Equitable Life is not barred, since the amended Complaint solely corrected an error in the nomenclature of the owner of the shopping center. Plaintiff argues that Equitable Life was not prejudiced by the amended Complaint, for it was aware of the lawsuit when an employee of the mall was served with a copy of the original Complaint in January, 1985.

In numerous cases, the Michigan Court of Appeals has discussed whether a Defendant who was not named in the original pleading was entitled to an accelerated judgment when it was named in the amended Complaint subsequent to the expiration of the statute of limitations. In Fazzalare v. Desa Industries, Inc., a products liability action, the Court, in a split decision, held that the manufacturer of the allegedly defective product was entitled to an accelerated judgment when it was added as a Defendant after the expiration of the three year limitations period. The Fazzalare Court held that the use of a “John Doe” Defendant in the original Complaint did not toll the limitations period, even though Plaintiffs exercised due diligence in attempting to ascertain the identity of the manufacturer.

In Amer v. Clarence A. Durbin Associates, the Plaintiff was injured when she fell on a concrete floor of a building. He instituted a personal injury action in the Wayne County Circuit Court within three years of the incident, naming the owner of the building and “John Doe Corporation,” the unknown manufacturer of materials used in the construction of the building. More than three years after the event, Plaintiff, having discovered the name of the manufacturer, filed an amended Complaint that specifically named the manufacturer as a Defendant. Reversing and remanding the trial court’s denial of the added Defendant’s Motion for Accelerated Judgment, the Amer Court held, among other things, that the manufacturer was not a necessary party to the lawsuit, but that Plaintiff’s Motion to Amend his Complaint, filed prior to the expiration of the three year period of limitations, may have tolled the statute.

In Forest v. Parmalee (On Rehearing), the Court affirmed the trial court’s entry of an Order granting Accelerated Judgment to a Defendant added to the lawsuit subsequent to the expiration of the applicable period of limitations. The Forest Court enunciated the general rule that the statute of limitations continues to run in favor of an alleged joint tortfeasor until he is made a party to the lawsuit:

“Where a defendant is brought into an action for the first time upon the filing of an amended or supplemental complaint, the filing of the amendment constitutes the commencement of the action in so far as such new defendant is concerned. The statutory period runs until the time of the filing of the amendment, and if at that time the action is barred, a party thus subsequently brought in may avail himself of the plea.”

The Forest Court enumerated three exceptions where a Defendant may be included in a lawsuit after the expiration of the statute of limitations: (1) where the Defendant is a necessary party to the action; (2) when it acquired an interest in the subject matter of the lawsuit during the pend-ency thereof; and (3) where the amended Complaint merely corrects a defect in the original Complaint.

The Court finds that the circumstances herein fall under the third exception delineated in Forest, supra, namely that the amended Complaint rectified, or clarified, a defect in the original pleading. Even though Equitable Life was not included in the original Complaint, Plaintiff, in effect, named it by virtue of her improper designation of “Northland Mall” as the entity which she believed was the owner of the shopping center. Soon thereafter, Plaintiff effectuated service of process upon an employee of the shopping center’s administrative office.

Equitable Life was not misled by Plaintiff’s erroneous designation. Shortly after the Complaint was filed, Equitable Life discovered the existence of the lawsuit; the attorney representing it in this action filed a Motion to Dismiss on behalf of “North-land Mall.” The facts surrounding the incorrect designation of the shopping center’s owner are similar to the corresponding facts, in Arnold v. Schecter, where the Michigan Court of Appeals, relying upon Wells v. The Detroit News, Inc., held that the trial court should have permitted the Plaintiff to amend her Complaint to name a corporation, rather than the corporate officers, as the concern which owned the allegedly defective premises:

At issue in this appeal is whether the trial court erred in refusing to allow the plaintiff to correct her complaint by naming Micor Company, Inc., as defendant rather than its corporate officers. In so holding, the trial court relied upon Price v. Delano, 187 Mich. 49, 153 N.W. 7 (1915), and Apple v. Solomon, 12 Mich.App. 393, 163 N.W.2d 20 (1968).
We find, however, that the procedural and factual circumstances in the present case are more logically covered by the opinion in Wells v. The Detroit News, Inc., 360 Mich. 634, 104 N.W.2d 767 (1960). In that case the Michigan Supreme Court reversed a trial court’s determination that the plaintiff could not amend his declaration. The plaintiff had named as defendant The Detroit News, Inc. In fact, the suit should have been brought against The Detroit News which was owned by The Evening News Association, a different Michigan corporation than The Detroit News, Inc.
* * * * * *
All three of these factors are satisfied in the present case. Service of process was made upon proper representatives of the corporation under GCR 1963, 105.4(1), (2). Myron Schecter, president of Micor Company, Inc., was served personally. Allan H. Schecter, director of the corporation, was served by serving Mrs. Allan H. Schecter, the person in charge'of the office. Both were served at the corporation’s legal address. Second, both the individuals and the corporation are in the same business and were represented by the same law firm. Finally, it is clear that the officers of Micor Company, Inc., were informed of the fact that the plaintiff wished to sue the landlord of the premises. No one was misled to his detriment.

Consequently, the Court DENIES Equitable Life Assurance Society of the United States’ Motion for Summary Judgment. The amended Complaint relates back to the date the original Complaint was filed, December 31, 1984, resulting in the avoidance by Plaintiff of the three year statute of limitations.

      . Service of process was effectuated upon Equitable Life on July 22, 1985.

      . See, e.g., Forest v. Parmalee (On Rehearing), 60 Mich.App. 401, 231 N.W.2d 378 (1975), aff'd on other grounds, 402 Mich. 348, 262 N.W.2d 653 (1978); Charpentier v. Young, 83 Mich.App. 145, 268 N.W.2d 322 (1978), rev’d 403 Mich. 851, 291 N.W.2d 926 (1978); and Cobb v. Mid-Continent Telephone Service Corp., 90 Mich.App. 349, 282 N.W.2d 317 (1979).

      . Prior to the promulgation of the 1985 Michigan Court Rules, a Motion to Dismiss based on the expiration of the statute of limitations, or other defenses such as res judicata, statute of frauds, or a release, was known as a “Motion for Accelerated Judgment.” See G.C.R. 1963, 116.1. Under federal procedural rules, the motion, governed by Fed.R.Civ.P. 56, is described as a Motion for Summary Judgment.

      . 135 Mich.App. 1, 351 N.W.2d 886 (1984).

      . Fazzalare 351 N.W.2d at 888.

      . 87 Mich.App. 62, 273 N.W.2d 588 (1978).

      . Amer 273 N.W.2d at 590-591.

      . 60 Mich.App. 401, 231 N.W.2d 378 (1975), aff'd on other grounds, 402 Mich. 348, 262 N.W.2d 653 (1978).

      . Forest 231 N.W.2d at 381.

      . Forest 231 N.W.2d at 381.

      . 58 Mich.App. 680, 228 N.W.2d 517 (1975).

      . Had Plaintiff named John Doe Corporation, "rather than ‘Northland Mall,'” as the entity which owned the shopping center, this Court may have reached a different result on the instant motion to dismiss based on the expiration of the statute of limitations. The Court notes that a failure to commence an action until the final day of the period of limitations is fraught with danger.

      . 360 Mich. 634, 104 N.W.2d 767, 769 (1960).

      . Arnold 228 N.W.2d at 518.


author: GUNN, District Judge.

text:
    Kathleen FLOOD, Plaintiff, v. BLEST COMPANY, d/b/a the St. Louis Magazine, Defendant.
    No. 85-243C(6).
    United States District Court, E.D. Missouri, E.D.
    Dec. 6, 1985.
    Michael J. Hoare, St. Louis, Mo., for plaintiff.
    Michael P. Casey, Lewis & Rice, St. Louis, Mo., for defendant.
   MEMORANDUM

GUNN, District Judge.

Plaintiff brings this Title VII action, 42 U.S.C. § 2000e, et seq., alleging sex discrimination as the underlying cause for her employment discharge by defendant. Specifically, plaintiff contends that she was fired because of her pregnancy. Defendant denies the allegation, asserting, instead, the plaintiff’s insubordination as the cause for the job termination.

Finding the credibility of fact issues in favor of the defendant and after consideration of the applicable law, the Court renders judgment for defendant and against plaintiff.

FINDINGS OF FACT

The defendant is a family-owned Missouri corporation which publishes for distribution in the St. Louis metropolitan area a magazine known as St. Louis Magazine. Mrs. Elizabeth S. Ferguson is the publisher of the magazine, and her daughter, Linda Ferguson Benoist, formerly advertising manager, is now president.

The plaintiff’s first association with defendant was in the summer of 1978 as a student intern. In August 1979 she commenced full time work as an associate editor and about four months later was promoted to senior editor. In October of 1981, plaintiff married Greg Holzhauer, who was to become the editor of St. Louis Magazine in 1982.

When Greg Holzhauer became editor, plaintiff, as senior editor, was to assist him as co-overseer for publication of the magazine.

In April 1983, Mrs. Ferguson raised plaintiff’s salary from $20,000 to $30,000 per year. At the time the raise was given, Mrs. Ferguson made the statement to plaintiff and her husband that “Kathy better not get pregnant.” Mrs. Ferguson’s defense of her statement was that it was made in a spirit of jocose. It was shortly thereafter, in April 1983, that plaintiff learned of her pregnancy which she announced to the magazine staff.

Plaintiff contends that upon learning of the pregnancy, Mrs. Ferguson became distant and the friendship that once existed between them faded noticeably. Mrs. Ferguson, on the other hand, professes that she had known plaintiff and her husband for many years and had a paternalistic feeling about them. She asserts that she had assumed from the time of the marriage that plaintiff and Greg Holzhauer would have children and that upon learning of the pregnancy she was delighted and wished the best for plaintiff and her forthcoming family. The Court finds Mrs. Ferguson’s testimony to be credible in this regard.

The good relationship that had once existed between plaintiff and Mrs. Ferguson became somewhat tenuous. However, the Court finds this to be so by reason of plaintiff’s attitude and action. For example, after Mrs. Ferguson had verbally reprimanded plaintiff’s husband for a failure in performance of his editorial duties, plaintiff asserted that the publisher — her boss— was putting too much pressure on Mr. Holzhauer. There was also credible evidence that plaintiff was critical of Mrs. Ferguson’s personal appearance and expressed an intense dislike for her to other employees, particularly Michaele Gold, a former managing editor.

Whatever bond existed between plaintiff and Mrs. Ferguson was completely riven on July 1, 1983. July 1 was press day — the hectic time of the month which the magazine was to go to press. Greg Holzhauer had been requested by Linda Ferguson Benoist to include in the publication an article which coincided with and related to certain advertising which had been sold. At the time, Mrs. Benoist was the advertising manager. Mr. Holzhauer had not provided for Mrs. Benoist’s article, and she had become extremely upset. At Mrs. Benoist’s urging, John Hoskins, the marketing manager, conferred with Mr. Holzhauer concerning the latter’s dereliction to order. A heated discussion ensued between the two men. Mrs. Ferguson heard of the argument and intervened in an attempt to settle the dispute. At approximately the same time, plaintiff, obviously rankled, came into the room. According to her own testimony, she was in high dudgeon and with arms raised to display her ire, demanded to know why the parties were debating a matter on press day. According to the credible evidence, plaintiff told Mrs. Ferguson that she was putting too much pressure on her husband and that she should “get off his back.” Plaintiff’s actions brought immediate reproval from Mrs. Ferguson, who told the plaintiff “to shut up.” Plaintiff’s response to Mrs. Ferguson was: “No, Libby, you shut up.” This expression of animus directed against her employer was made within hearing of other employees of the magazine.

Mrs. Ferguson was sufficiently upset over the exchange so as to leave the premises. She was advised by Mr. Hoskins that she should not have to endure such abuse. She also discussed the matter with her husband, an officer in the defendant corporation. His advice was to the effect that Mrs. Ferguson’s authority had been challenged by plaintiff’s act of insubordination in the presence of other employees. As a consequence, working with plaintiff would be difficult, if not impossible.

Three days later, on July 4, 1983, Mrs. Ferguson made telephone contact with plaintiff and advised her that she was being dismissed from the staff. Plaintiff, who at no time expressed regret for her actions, was told that she could continue to write for the magazine but could not work in the office.

Plaintiff places great stress on a comment made by Mrs. Ferguson regarding Julia Gaebe, a former employee who had quit working for defendant a few weeks after giving birth to a child. There is no dispute that some time after learning of plaintiff’s pregnancy, Mrs. Ferguson stated that she “did not want another Julie Gaebe on her hands.” This was in particular reference to Ms. Gaebe’s practice of bringing her baby to work with her and not performing her assigned tasks in an efficient manner.

This, of course, would be a legitimate concern for an employer and does not reflect an antagonistic attitude by defendant toward plaintiffs pregnancy. The Court also finds that the defendant’s policy regarding its employees who became pregnant and its working mothers was one of solicitude and absolutely without antagonism.

The Court finds from the credible evidence that the cause of plaintiff's dismissal was insubordination and that there was no discriminatory motive by reason of pregnancy behind defendant’s termination of plaintiff from employment.

CONCLUSIONS OF LAW

This action is brought under Title VII of the 1964 Civil Rights Act, as amended, 42 U.S.C. § 2000e, et seq. This Court has jurisdiction pursuant to 28 U.S.C. § 1343 and 42 U.S.C. § 2000e-5(f)(e). In a Title VII case alleging sex discrimination, the burden is upon the plaintiff to allege and prove that she was the victim of intentional or purposeful discrimination on the part of the defendant. The Supreme Court has clearly articulated the basic allocations of burdens and order of presentation of proof in a case alleging intentional employment discrimination under Title VII:

“First, the plaintiff has the burden of proving by the preponderance of the evidence a prima facie case of discrimination. Second, if the plaintiff succeeds in proving the prima facie case, the burden shifts to the defendant to ‘articulate some legitimate, nondiscriminatory reason for [his action]____’ Third, should the defendant carry this burden, the plaintiff must then have an opportunity to prove by a preponderance of the evidence that the legitimate reasons offered by the defendant were not its true reasons, but were a pretext for discrimination— The ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff.” Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 252-53 [101 S.Ct. 1089, 1093, 67 L.Ed.2d 207] (1981) (citation omitted).

To establish a prima facie case of discriminatory discharge, a plaintiff must show that (1) she was a member of a protected class, (2) she was capable of performing the job, and (3) she was discharged from the job. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973); Smith v. Monsanto Chemical Co., 770 F.2d 719, 722 n. 2 (8th Cir.1985); Johnson v. Bunny Bread Co., 646 F.2d 1250, 1253 (8th Cir.1981).

Plaintiff seeks recovery specifically under 42 U.S.C. 2000e(k) which prohibits discrimination against women on the basis of pregnancy.

The plaintiff also asserts — and correctly so — that in a Title VII case such as this, the “plaintiff proves [her] claim of unlawful discrimination by showing that ‘a discriminatory reason more likely [than not] motivated the employer.' ” Bibbs v. Block, 749 F.2d 508, 511 (8th Cir.1984) (rehearing en banc April 29, 1985) (quoting Texas Department of Community Affairs v. Burdine, 450 U.S., at 256, 101 S.Ct., at 1095).

Thus, plaintiff argues, asserting Bibbs, that if her discharge was motivated in any way by her pregnancy, she has made her case.

However, the Court finds that plaintiff’s pregnancy was not a discernible factor in the decision to terminate her employment. There is no credible evidence for a contrary finding.

The sole reason for plaintiff’s discharge was her positive action of insubordination on July 1. That reason for discharge is not pretextual and serves as an absolutely legitimate basis for terminating her employment. Guy v. Swift & Co., 612 F.2d 383, 386 (8th Cir.1980) (single incident of insubordination serving as basis for discharge); Kellin v. AFC Industries, 629 F.2d 532, 534 (8th Cir.1980); Patkus v. Sangamon-Cass Consortium, 769 F.2d 1251, 1259-60 (7th Cir.1985).

Plaintiff’s pregnancy had nothing to do with her discharge. She was terminated because of her insubordination. Richardson v. Circle K Corp., No. LR-C-83-1069, (E.D.Ark.Mar. 28, 1985), aff'd 782 F.2d 1049 (8th Cir.1985) (unpublished per curiam). She had challenged her employer’s authority in the presence of other employees in a manner which was not in the best interest of the employer. There was no credible evidence that plaintiff’s conduct was generally accepted or could be expected to be tolerated.

Plaintiff’s contention that she was discriminated against on the basis of her pregnancy is rejected.

Judgment for defendant.


author: HADEN, Chief Judge.

text:
    Sherman L. HANDLEY, et ux, Plaintiffs, v. UNION CARBIDE CORPORATION, Defendant.
    Civ. A. No. 84-2270.
    United States District Court, S.D. West Virginia, Charleston Division.
    Dec. 6, 1985.

      Alfred B. McCuskey, II, St. Albans, W.Va., for plaintiffs.
    W.T. Shaffer, Jackson, Kelly, Holt & O’Farrell, Charleston, W.Va., for defendant.
   ORDER

HADEN, Chief Judge.

Pending before the Court are the motions of the Plaintiffs for leave to proceed on appeal in forma pauperis and for an order staying enforcement of the judgment entered by this Court on October 17, 1985, 620 F.Supp. 428.

Turning first to the matter of an in forma pauperis appeal, the Court notes that the Plaintiffs’ motion is essentially in two parts. First, the Plaintiffs ask leave to proceed on appeal in forma pauperis without prepayment of fees or costs or giving security therefor, pursuant to the provisions of 28 U.S.C. § 1915(a). Second, the Plaintiffs’ request that the cost of a transcript of the proceedings be paid by the United States, pursuant to the provisions of 28 U.S.C. § 753(f).

Section 1915(a) provides as follows:
“Any court of the United States may authorize the commencement, prosecution or defense of any suit, action or proceeding, civil or criminal, or appeal therein, without prepayment of fees and costs or security therefor, by a person who makes affidavit that he is unable to pay such costs or give security therefor. Such affidavit shall state the nature of the action, defense or appeal and affiant’s belief that he is entitled to redress.
An appeal may not be taken in forma pauperis if the trial court certifies in writing that it is not taken in good faith.”

The test for determining whether the appeal is taken in good faith is addressed to the issues raised on appeal. They must not be frivolous. Miranda v. U.S., 458 F.2d 1179 (2d Cir.) cert. denied, 409 U.S. 874, 93 S.Ct. 207, 34 L.Ed.2d 126 (1972): Gordon v. Secretary of State of Wisconsin, 462 F.Supp. 307 (E.D.Wis.1978). Although a court may sub silentio make a finding that nonfrivolous issues are raised, the Court here will affirmatively note that this appeal appears to be brought in good faith within the meaning of Section 1915(a).

Addressing the threshold question of financial eligibility, the Court finds the Plaintiffs to meet the requirements of Section 1915(a). The following factors were considered by the Court in making such a finding:

1. Both Handleys are unemployed.

2. Their checking and savings accounts total approximately $100.00.

3. Mr. Handley states that his monthly gross income from Social Security disability and a disability insurance policy is approximately $1,400.00 per month; however, he also asserts that his monthly expenses exceed that amount. The Court does not know what kind of health benefits Handley receives, such as medical insurance, but assumes that his condition produces some added expense for his family.

4. The Handleys do own a home with approximately $30,000.00 of its value in equity. The Handleys’ income, however, would not appear to allow for interest or principal payments on any loan against such equity. Moreover, it is unlikely if a lending institution would advance a loan with no reliable income stream available. In any event, in Adkins v. duPont Company, 335 U.S. 331, 69 S.Ct. 85, 93 L.Ed. 43 (1948), the Supreme Court impliedly rejected the notion that an appellant should have to mortgage her home to pay the cost of appeal. As the Second Circuit recently noted in Potnick v. Eastern State Hospital, 701 F.2d 243 (2d Cir.1983): “Section 1915(a) does not require a litigant to demonstrate absolute destitution; no party must be made to choose between abandoning a potentially meritorious claim or foregoing the necessities of life.” Id. at 244.

Section 753(f) provides, in pertinent part, that “[f]ees for transcripts furnished in ... proceedings to persons permitted to appeal in forma pauperis shall ... be paid by the United States if the trial judge ... certifies that the appeal is not frivolous (but presents a substantial question).” This section differs from Section 1915(a) in that it requires a court to affirmatively find that the appeal is not frivolous. Moreover, although the standard of review would appear to be the same as Section 1915(a), it is not. Moon v. U.S., 422 F.2d 692 (D.C.Cir.1969). Before allowing a free transcript, a court must determine that the appeal presents a substantial question. A “substantial question” within the meaning of Section 753(f) has been defined as one which is “reasonably debatable”. Harlem River Consumers Co-Op, Inc. v. Associated Grocers of Harlem, Inc., 71 F.R.D. 93, 97 (S.D.N.Y.1976) (citing Ortiz v. Greyhound Corporation, 192 F.Supp. 903 (D.M.D.1959)). Further elaboration was offered in Linden v. Harper & Rowe, Inc., 467 F.Supp. 556 (S.D.N.Y.1979):

“An appeal may not be frivolous under the ‘good faith’ test of Section 1915 and Rule 24 ‘good faith,’ and yet may be frivolous as not presenting a ‘substantial question’ for the purposes of Section 753(f). ‘An appeal not taken in “good faith” as described in § 1915(a) is not the same as a “frivolous” appeal, for bad faith imports a consciousness of frivolity as distinct from frivolity, simpliciter.’ ”

Id. at 558 (quoting Jaffe v. U.S., 246 F.2d 760, 761 (2d Cir.1957) (J. Hand)).

In deciding whether this appeal will raise substantial questions, the Court recognizes the unique nature of this case. This is a case which arises under the new Mandolidis statute of West Virginia. The Memorandum Opinion and Order of this Court granting the Defendant’s motion for a judgment n.o.v. appears to be the first judicial interpretation of that statute. This consideration persuades the Court that the appeal will raise substantial questions, such as the operative definitions of “commonly accepted and well-known safety standard within the industry” and “specific unsafe working condition.”

The Plaintiffs have also moved the Court for orders staying enforcement of the judgment and fixing the amount of the supersedeas bond. The Court does not find it necessary to grant these motions. The judgment entered against the Plaintiffs did not contain any element of monetary or injunctive relief. Consequently, the Court finds nothing to stay. Plaintiffs, however, are welcome to reapproach the Court at a later time if they can identify with greater specificity any matter flowing from the October 17 judgment which threatens to cause them irreparable harm. Moreover, because the October 17 judgment required no monetary transfer, the Court finds that a supersedeas bond is unnecessary.

In consideration of the foregoing, the Court hereby ORDERS as follows:

1. The Plaintiffs’ motion to proceed in forma pauperis pursuant to 28 U.S.C. § 1915(a) is granted. The Plaintiffs may proceed on appeal without prepayment of fees and costs or security therefor. In the event, however, that the Plaintiffs receive any recovery from this action, such recovery shall be paid into the hands of the Clerk of the Court, who shall pay therefrom all fees and costs unpaid by the Plaintiffs because of their pauperis status. The Clerk shall then remit the balance to the Plaintiffs or their attorney.

2. The Plaintiffs’ motion to have the cost of the transcript paid by the United States is granted. The Court certifies that this appeal is not frivolous but will raise substantial questions.

3. The Plaintiffs’ motion for a stay of the enforcement of the October 17, 1985, order is denied as unripe.

4. The Plaintiffs’ motion for an order fixing the amount of the supersedeas bond is denied.

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

      . Mandolidis v. Elkins Industries, Inc., 161 W.Va. 695, 246 S.E.2d 907 (1978).

      . W.Va.Code, § 23-4-2 (Effective date: May 8, 1983).

      . The wording of the statute makes clear that a court has to certify that a transcript is needed to decide the issue presented on appeal only in proceedings brought under 28 U.S.C. § 2255. 28 U.S.C. § 753(f). Nevertheless, to remove any doubt, the Court certifies that a transcript is necessary in this appeal because of the Court’s earlier determination that the evidence at trial was insufficient to support the verdict.


author: CAFFREY, Chief Judge.

text:
    Paul A. BRESLIN, Plaintiff, v. SCHOOL COMMITTEE OF QUINCY, Defendant.
    Civ. A. No. 85-1160-C.
    United States District Court, D. Massachusetts.
    Dec. 10, 1985.
    Paul A. Breslin, pro se.
    Arthur Murphy, Murphy, Lamere and Murphy, Regina W. Tate, Braintree, Mass., for defendant.
   MEMORANDUM

CAFFREY, Chief Judge.

This is a civil action filed pro se by Paul A. Breslin, a former principal of a junior high school in Quincy, Massachusetts. Mr. Breslin has brought his action against the School Committee of Quincy alleging various violations of Mass.Gen.Laws c. 71 and the Fourteenth Amendment to the United States Constitution. An amended complaint was filed herein on April 28, 1985 and the matter is now before the Court on defendant’s motion for judgment on the pleadings pursuant to Federal Rules of Civil Procedure, Rule 12(c). The grounds of the motion are that the instant case is barred under the doctrine of res judicata by two previous suits Mr. Breslin filed in the Norfolk Suprerior Court, Commonwealth of Massachusetts.

This Court will treat defendant’s motion as a motion for summary judgment pursuant to Rule 56(c) of the Federal Rules of Civil Procedure because defendant is relying on copies of the state court pleadings which have been appended to defendant’s motion.

A review of the record establishes that both of Mr. Breslin’s Superior Court cases were consolidated for trial by Judge Kelly and were tried by Judge Jacobs in July of 1983. After several days of non-jury trial, Judge Jacobs issued a written opinion and order dismissing both of Mr. Breslin’s cases, after which counsel who represented Mr. Breslin in the state court took an appeal to the Massachusetts Appeals Court. In May of 1985 the Appeals Court filed an opinion written by Judge Kass which analyzed and rejected Mr. Breslin’s claims in the state court litigation including his claim that the Quincy School Committee had denied him due process by voting to restructure the junior high schools into middle schools.

It is clear from the record that, although Mr. Breslin, acting pro se, seeks to process this case as a civil rights case for due process violations under the Fourteenth Amendment, the case is based completely on the identical fact situation which was considered by the Norfolk Superior Court and the Massachusetts Appeals Court. Accordingly, trial of this case in this Court is precluded by settled principles of res judicata as well as principles of issue preclusion. Allen v. McCurry, 449 U.S. 90, 101 S.Ct. 411, 66 L.Ed.2d 308 (1980); Rose v. Town of Harwich, 778 F.2d 77 (1st Cir.1985); Capraro v. Tilcon Gammino, Inc., 751 F.2d 56 (1st Cir.1985); Isaac v. Schwartz, 706 F.2d 15 (1st Cir.1983); Manego v. Orleans Board of Trade, 598 F.Supp. 231 (D.Mass.1984). The opinion of the Massachusetts Appeals Court makes it abundantly clear that Mr. Breslin has had a full and fair opportunity to fully litigate his contentions in the courts of the Commonwealth. It follows that the final judgment on the merits directed by the opinion of the' Massachusetts Appeals Court extinguishes all rights or claims of Mr. Breslin to any legal remedy against the defendant, School Committee of Quincy, with respect to any and all parts of the transactions which gave rise to both the state court litigation and this case.

Order accordingly.


author: LUONGO, Chief Judge.

text:
    Sylvester PAGANO v. Margaret M. HECKLER, Secretary of Health and Human Services.
    Civ. A. No. 84-4254.
    United States District Court, E.D. Pennsylvania.
    Dec. 13, 1985.

      Karen Kress Weisbord, Philadelphia, Pa., for plaintiff.
    James G. Sheehan, Asst. U.S. Atty., Philadelphia, Pa., for defendant.
   OPINION

LUONGO, Chief Judge.

Plaintiff Sylvester Pagano filed this social security action in September of 1984, seeking judicial review of the decision of the Secretary of Health and Human Services denying his application for disability benefits. The parties submitted cross-motions for summary judgment. In an order dated August 8, 1985 I granted plaintiffs motion, entered judgment in his favor and directed the Secretary to award him benefits. Plaintiff thus became a “prevailing party” within the meaning of the Equal Access to Justice Act (EAJA), 28 U.S.C. § 2412(d). He now requests an award of attorney’s fees.

Under the EAJA, a party who prevails against the United States is entitled to attorney’s fees “unless the court finds that the position of the United States was substantially justified.” 28 U.S.C. § 2412(d)(1)(A). The position of the United States includes both its litigation position and the agency action that made the lawsuit necessary. Washington v. Heckler, 756 F.2d 959, 961 (3d Cir.1985). The government bears the burden of proving substantial justification and, to meet its burden, must make a strong showing that its position had a reasonable basis in fact and law. Id.; Tressler v. Heckler, 748 F.2d 146, 150 (3d Cir.1984).

The standard for what constitutes substantial justification is easier to state than it is to apply. Chief Judge Aldisert, concurring in Washington v. Heckler, stated: “As it stands today, ‘substantially justified’ is too amorphous, too fluid, and too devoid of direction to guide the legal profession and the courts in cases where the claimant prevails because no substantial evidence in the record sustained the agency’s position.” 756 F.2d at 969. After the Third Circuit’s decisions in Washington and Dennis v. Heckler, 756 F.2d 971 (3d Cir.1985), it seems to me that the district courts have little room to deny attorney’s fees to a prevailing social security claimant. Again in the words of Chief Judge Aldisert, the district courts are left to wonder, “ ‘Do we do what the Court of Appeals does, or what it says?’ ” Washington, 756 F.2d at 968.

After reviewing the administrative record in light of the recent Third Circuit cases, I must conclude that the Secretary’s decision denying Pagano benefits was not substantially justified. Pagano is a 60 year old man with a third grade education. He cannot read or write. He has held a variety of jobs since 1939, all involving heavy manual labor. For 24 years he worked as a truck driver, but he was fired in 1977 after failing a Department of Transportation physical examination. His disability insured status expired in September of 1979.

Pagano applied for disability benefits on May 4, 1983, claiming that he had been disabled since 1977 because of a heart condition, diabetes, high blood pressure and arthritis. In a hearing before an Administrative Law Judge, Pagano testified that his ailments significantly limit his activities and are not adequately controlled by medication. He can do no lifting because of his previous back injuries and he spends most of his time lying around the house. He testified that exertion and excitement cause him to suffer chest pains.

As the AU noted, the record contains no detailed medical evidence concerning Pagano’s condition prior to 1982. The evidence submitted, however, supports Pagano’s testimony. The record contains a Department of Transportation physical examination form, dated November 12,1976, which stated that Pagano had a permanent defect from illness, disease or injury. Dr. Meyer B. Winokur, who treated Pagano from 1976 to 1983, reported that Pagano has been suffering from diabetes and a severe arthritic condition and has been unable to be gainfully employed in his vocation. Dr. Paul Sedacca, Pagano’s present treating physician, corroborated Pagano’s testimony concerning his heart condition, activity limitations and chest pains.

The ALT failed to give proper weight to the opinion of Dr. Winokur, who treated plaintiff both before and after his insured status expired. The AU also erred in discounting Pagano’s subjective complaints, which were supported at least to some degree by medical findings, and in relying on his own lay observations as evidence that Pagano was not severely impaired. See Dennis, 756 F.2d at 974-76; Green v. Schweiker, 749 F.2d 1066 (3d Cir.1984). Finally, because Pagano introduced sufficient evidence to support a finding of disability, it was improper for the AU to reject his claims on the ground that the medical documentation was incomplete. See, e.g., Ferguson v. Schweiker, 765 F.2d 31 (3d Cir.1985).

In light of the AU’s violations of Third Circuit precedent, I cannot conclude that the Secretary’s position at the agency level or in the ensuing litigation had a reasonable factual basis. See Dennis, 756 F.2d at 976. I therefore hold that her position was not substantially justified and that plaintiff is entitled to attorney’s fees under the EAJA.

Plaintiff’s attorney has submitted a detailed time sheet, which, according to my calculations, represents that she has spent a total of 25.17 hours on this case at the district court level. She seeks to be compensated at a rate of $125 per hour. The Secretary has not challenged the time spent, and I conclude that it is reasonable. I will not, however, grant the request for a $125 hourly rate. The EAJA generally limits fees to $75 per hour, 28 U.S.C. § 2412(d)(2)(A), and plaintiff has shown no special factors which would justify a higher fee. Accordingly, I will award plaintiff attorney’s fees of $1887.75, for 25.17 hours of work at $75 per hour.

      . Plaintiff also argues that the Secretary’s position is contrary to her own regulations, which the AU failed to apply. Because I conclude that the decision to deny plaintiff benefits was not factually justifiable, I need not reach this issue.