author: DOUMAR, District Judge.

text:
    HUMPHREYS RAILWAYS, INC., Plaintiff, v. F/V NILS S, her engines, tackle, etc., in rem, Defendant.
    Civ. A. No. 84-19-N.
    United States District Court, E.D. Virginia, Norfolk Division.
    Dec. 12, 1984.

      G.W. Birkhead, Vandeventer, Black, Meredith & Martin, Norfolk, Va., for plaintiff.
    John D. Padgett, Jett, Agelasto, Berkley, Furr & Price, William B. Eley, Willcox & Savage, R.M. Hughes, Seawell, Dalton, Hughes & Timms, Norfolk, Va., for intervenors.
   ORDER

DOUMAR, District Judge.

The plaintiff Humphreys Railways, Incorporated (Humphreys) and intervenors Eirik’s Dock (Eirik’s), Nils Sletten, and Bernice Isaksen, are parties in this in rem admiralty action brought to enforce various maritime liens against the defendant, a 120 foot fishing vessel called the NILS S. The vessel was arrested and sold at auction by the U.S. Marshal on March 16, 1984 to Mr. Nils Sletten, the owner of a V2 interest in the vessel at the time of the attachment. The resulting fund of $115,000.00 was held by the Court for disbursement to competing claimants. Upon the stipulation of the parties, $33,309.51 was disbursed to Humphreys as compensation for its prior repairs to the NILS S, and $844.50 was disbursed to Eirik’s for fuel oil supplied the vessel. A remaining fund of $80,845.99 is being held by the Court with the following maritime claims outstanding in no particular hierarchy:

F/V NILS S
1. Humphreys Railways - wharfage fees or custodial fees of $100/day as substitute custodian for 152 days (11-29-83 to 5-1-84) $30,400.00
2. Eirik’s Dock wharfage fees at $100/day for 118 days (4-12-83 to 8-5-83) $11,800.00
TOTAL CLAIMS: $42,200.00

Mrs. Isaksen, the owner of ½ of this vessel, brought another action against Mr. Sletten, the other ½ owner, seeking to enforce or to claim damages by virtue of an alleged contract of sale. This action resulted in a jury verdict of no contract.

We are here concerned only with the lien claims against the vessel and the corresponding claims against the funds of the vessel after its sale by the Court.

I. EIRIK’S CLAIM

In April 1983, the NILS S was owned by a joint venture or partnership of Mr. Kristian Isaksen and Nils Sletten. Mr. Sletten was the absentee owner and Mr. Isaksen, either for himself, or through his sons, operated the vessel. Mr. Isaksen met his untimely death on April 12, 1983. Mrs. Bernice Isaksen, his widow, inherited and apparently succeeded to his interest in the NILS S. At her husband’s death, she asked a friend, Eirik Kirkeberg, owner of Eirik’s Dock, if the vessel could be moored at his dock in Wildwood, New Jersey, which he owned and operated. The NILS S had previously been docked at Eirik’s in the past and the Kirkebergs and Isaksens evidently had a social relationship. Mrs. Isaksen, a nurse, had previously cared for Mrs. Kirkeberg. With respect to said prior occasions that the vessel was docked at Eirik’s, it was not fishing out of nor being repaired there. However, there was no charge for the wharfage.

Mr. Kirkeberg testified that he agreed to allow the NILS S to be docked at his facility upon Mr. Isaksen’s death. At the time of its docking, there was no charge set for wharfage. Mr. Kirkeberg felt that he was entitled to a reasonable fee for the wharf-age for keeping the vessel, and this Court finds that no specific contract was entered into between Mr. Kirkeberg and Mrs. Isaksen for wharfage.

The vessel remained at Eirik’s Dock from April 12, 1983 to August 5, 1983, or a total of 118 days. The Court finds as a fact that there was neither an express written, nor oral agreement, as to a wharfage charge. Indeed, there was no understanding whether a wharfage charge would be charged or when the charge, if any, was to commence or to end. After the death of her husband and the docking of the vessel, Mrs. Isaksen was contemporaneously negotiating with Nils Sletten on a possible sale of her interest therein to Mr. Sletten, or to one of Mrs. Isaksen’s sons through Mr. Sletten. Mrs. Isaksen herself, it was indicated, did not desire to operate the vessel, or be in any way responsible for its operation.

In any event, it was agreed by Mr. Sletten and Mrs. Isaksen that the vessel would leave Eirik’s Dock in Wildwood, New Jersey, and be transported to Weems, Virginia. The fuel for that trip, by agreement of the parties, was and has been disbursed from the amount of the monies held by the Court. Humphreys’ Railways performed certain repairs on the vessel and ultimately brought an attachment on the vessel in this matter. It is Humphreys’ attachment for its repairs that ultimately brought about the sale.

After the attachment, Eirik’s made a claim for the fuel and claimed $100 per day wharfage charges running from April 12, 1983, the day of Mr. Isaksen’s death, until the NILS S left for Weems, Virginia on August 5, 1983. In addition, Eirik’s has also claimed 24 percent interest under “custom and usage” for the account since the facility claims it is beyond thirty days overdue.

Mr. Kirkeberg testified that a “laid up” vessel was essentially occupying valuable dock space which would otherwise yield profits. Further, he asserted that no other dock wanted to accept a “laid up” vessel such as the NILS S at any fee because it was a losing proposition. Mr. Kirkeberg testified that in Wildwood, New Jersey, if a vessel wanted to be laid up for one day, and occupy space which would otherwise be working, that it would likely be charged $100 for that particular day. There was no testimony concerning any other normal rates other than that offered by Mr. Kirkeberg which discussed $100 a day for a working day. The testimony overall indicated that there were five working days in a week insofar as wharfage is concerned.

Wharfage contracts are within the maritime jurisdiction of this Court, Ex Parte Easton, 95 U.S. (5 Otto) 68, 24 L.Ed. 373 (1877), and subject to a maritime lien under the general maritime law and the statutory provisions of 46 U.S.C. § 971; The Western Wave, 1935 A.M.C. 985, 77 F.2d 695 (5th Cir.1935), cert. denied, 296 U.S. 633, 56 S.Ct. 156, 80 L.Ed. 450 (1935); 1935 A.M.C. 1444; The William Leishear, 21 F.2d 862 (D.Md.1927). 46 U.S.C. § 971 states:

Persons entitled to lien. Any person furnishing repairs, supplies, towage, use of dry dock or marine railway, or other necessaries, to any vessel, whether foreign or domestic, upon the order of the owner of such vessel, or of a person authorized by the owner, shall have a maritime lien on the vessel, which may be enforced by suit in rem, and it shall not be necessary to allege or prove that credit was given to the vessel.

There was no oral or written contract between the NILS S and Eirik’s. On April 12, 1983, Eirik was performing a service out of good neighborliness to his friend and his wife’s nurse. On a previous occasion, Eirik had kept the NILS S for a period of approximately two months without any charges whatsoever even though the vessel was not then operating out of his wharf. In this case, the Court finds that Eirik intended to allow the NILS S to remain for a reasonable period of time without charge. By virtue of the previous conduct of the parties, the Court finds that a reasonable period of time without charge would be approximately two months until a period beginning June 12. The Court finds as a fact that Eirik did not expect payment nor did the widow expect to pay, at the inception of the arrangement.

Any contract between the parties would be one implied at law under a quantum meruit theory. Ordinarily, when one person renders services for another which are requested and accepted by him, the law creates an obligation, which is an implied-in-law contract, on his part to pay a reasonable compensation, unless something in the relationship of the parties indicates otherwise. Marine Development Corp. v. Radak, 225 Va. 137, 300 S.E.2d 763 (1983); Burke v. Gale, 193 Va. 130, 67 S.E.2d 917, 919 (1951). The crux of a quantum meruit cause of action lies in the unjust enrichment of one party. Kern v. Freed Co., 224 Va. 678, 299 S.E.2d 363, 363-64 (1983). Merely rendering services alone does not create a contract implied-in-law, nor is such a contract implied when one officiously confers benefits upon another. Weitzel v. Brown-Neil Corp., 152 F.Supp. 540, 549 (N.D.W.Va.1957); United States v. Lias, 154 F.Supp. 955, 958 (N.D.W.Va.1957). See also Annot. 54 A.L.R. 548. Thus, a promise will not be implied by law to pay a lifelong friend and neighbor for unsolicited services as a nurse during a last illness. Teawalt v. Ramey, 103 Va. 42, 48 S.E. 505 (1904). Further, even though one may have benefitted from another’s services, the latter cannot recover unless he can show sufficient additional facts that imply a promise to pay. Mullins v. Mingo Lime Co., 176 Va. 44, 10 S.E.2d 492, 494-95 (1940).

This Court finds as a fact that the plaintiff gave and the widow expected gratuitous services for a reasonable time, without compensation under the circumstances of this case at least until June 12. On the 12th of June, the NILS S was accruing benefits and was the recipient of valuable services for which in equity it should pay. Certainly, it is not to be expected that Eirik’s would continue indefinitely to provide free services of a valuable nature to this vessel, as it had to be moored at some place or spot, and the widow’s testimony buttresses this fact. The Court finds that weekends, that is, Saturdays and Sundays, would not be reasonably charged since no business was conducted then and the testimony during this trial indicates that a five-day week is generally considered a work week even in the fishing industry. Eirik Kirkeberg testified that the charge levied was based on what the dock space would yield in the way of fishing business on a one day basis. This Court has no other basis upon which to find a charge other than the $100 a day for an average working day over a 5 day weekly period, which is $500.00 per week, or a total of $4,000.00 for 8 weeks.

Eirik’s has also claimed 24 percent interest under “custom and usage” for the account since it was over thirty days overdue. Insofar as any claim for the 24 percent interest is concerned, the law does not imply interest unless one bargains for interest. Normally, for interest to be charged, there must be an understanding prior to the time service is rendered for payment at a particular time and rate. The first bill was sent in this case upon the attachment of the vessel. There was no understanding with regard to an interest payment, much less payment at a particular time. At best there was an implied contract that valuable services may have been rendered after June 12, and payment would therefore be received out of the vessel itself on some occasion in the future. Since no interest was contemplated or considered in any way by any of the parties, it cannot be determined when to start implying such even if awarded. Moreover, this Court finds as a fact that the plaintiff is entitled to no interest.

II. HUMPHREYS’ CLAIM

While the NILS S was at Eirik’s Dock, Mrs. Isaksen and Mr; Sletten arrived at a decision to transport it to Weems, Virginia, where Humphreys was to carry out a conversion of the vessel from a clamming vessel with some scalloping capabilities, to an exclusively scalloping vessel. There was no agreement nor any plan by Mrs. Isaksen and Mr. Sletten to keep the NILS S as a “going concern”. Mrs. Isaksen desired to sell the vessel and Mr. Sletten desired to get the vessel into operation. Mrs. Isaksen thought that Mr. Sletten was purchasing the vessel. Indeed, Mr. Sletten’s conduct was such as to indicate that he was going to purchase the vessel, although no contract was ever entered into between the parties because specific terms were never agreed upon. In any event, certain repairs were made to the NILS S by Humphreys which benefitted the vessel.

On November 29, 1983, the Eastern District of Virginia-Richmond Division entered an order appointing Humphreys as substitute custodian of the NILS S on its libel of the vessel. On filing its petition to serve as substitute custodian, Humphreys averred, inter alia, that it had “adequate facilities and supervision for the proper safekeeping of the vessel ...” and agreed to “release the U.S. Marshal from any and all liability and responsibility ...” for such wharfage. Humphreys sought $200 per day, seven days a week, from the order’s entry until the vessel’s sale, asserting that the U.S. Marshal would charge “at least $180 per day.” Subsequently, the matter was transferred to the Eastern District of Virginia-Norfolk Division, on January 6, 1984.

In the final pretrial order and at trial, several of the plaintiffs attacked the $200 per day substitute custodial fee claimed by Humphreys. The fee was labeled as unreasonable and excessive as the custodial service claim spanned 152 days and the claim totaled $30,400. On the other hand, Humphreys defends its wharfage charges on the grounds that (1) a federal district court order already authorized the charge, and (2) the plaintiffs received a benefit from Humphreys’ protective services, never complained initially, and thus have waived their objections and are therefore estopped.

A. Services Rendered

Reviewing the relevant events, the Eastern District of Virginia, Richmond Division, acting on Humphreys’ petition, entered its order on November 29, 1983, permitting $200 per day for the substitute custodian. The petition asserted that the U.S. Marshal’s own costs would run “at least $180 per day”, and that their costs of $200 per day relieved the Marshal of all responsibility and were allegedly a bargain.

The statute which permits the U.S. Marshal’s custodial fees, and accordingly any substitute custodial charges, states:

On the following fees of United States marshals shall be collected and taxed as costs, except as otherwise provided:
* * * * * *
For the keeping of property attached (including boats, vessels, or other property attached or libeled) actual expenses incurred, such as storage, moving, boat hire, or other special transportation, watchmen’s or keepers’ fees, insurance, and $3 per hour for each deputy marshal required for special services, such as guarding, inventorying, moving, and so forth. The marshals shall collect, in advance, a deposit to cover the initial expenses for such services and periodically thereafter such amounts as may be necessary to pay such expenses until the litigation is concluded.

28 U.S.C.S. § 1921 (1979). See New River Yachting Ctr., Inc. v. M/V Little Eagle II, 401 F.Supp. 132, 135 (S.D.Fla.1975). It is apparent the custodian may be compensated for “actual expenses incurred” and the district court, applying equitable principles in admiralty routinely looks into the reasonableness of maritime claims in such an in rem action.

Evidence in this case revealed that $22 per day for a five-day week ($110.00 per week) was charged by Humphreys for the wharfage of vessels in general, and for the NILS S itself prior to the entry of the court order. This $22 per day fee included water, electricity, watchman services, and the insurance required by Humphreys. After the court order allowing $200 per day, there was no additional insurance coverage, watchmen or the like provided to the boat, according to the Humphreys’ manager. (See Deposition of George Thomas Edwards, May 24, 1984, at pp. 22-24). This Court finds as a fact that no service of any kind, nature or description was rendered to the NILS S subsequent to November 29, 1983, the date of attachment, that was not rendered prior to the attachment of the vessel. Humphreys’ manager attempted to testify to some different services contrary to his prior deposition. He testified at the hearing that a dockside pump was present; however, the vessel did not leak, and the only water leakage would have come through the hatches if there were open hatches. He testified that on occasion, he may have pumped out the vessel. However, the vessel was equipped with automatic pumps which would have pumped out any water that came into the hatches. The Court rejects the testimony by Humphreys’ manager about the necessity to pump water, and finds as a fact that no services of any kind, nature or description were rendered to the vessel after November 29, 1983, that were in any way different from the services being rendered before the vessel was attached. Any pumping of water was clearly unnecessary as the vessel’s own pumps could take care of any rain water.

B. Reasonableness, Waiver, Estoppel

The amount of any wharfage fees declared as an administrative expense must be reasonable. See New York Dock Co. v. S.S. Poznan, 274 U.S. 117, 122-23, 47 S.Ct. 482, 484-85, 71 L.Ed. 955 (1927). No parties in this matter, including Humphreys itself, introduced evidence that $200 per day was a reasonable charge for wharfage in Weems, Virginia. The Court, sua sponte, attempted to look into the justification of a nearly 1000% increase in wharf-age charges upon entry of a court order from $110 to $1,400 per week.

Apparently, Humphreys was prepared to literally “bank” on the validity of the court order and forego entry of “reasonableness” evidence at trial. The doctrine of waiver was asserted by Humphreys because at no time for the months prior to the sale of the NILS S did the complaining parties raise the issue of excessive fees while receiving the benefits of the substitute custodian’s protection. See P.C. International, Inc. v. Vessel SUSAN, 1980 A.M.C. 2062, 2069 (S.D.Fla.). For support of its waiver argument, Humphreys’ reliance on United Virginia Bank/Citizens and Marine v. Oil Screw SEA QUEEN, 1971 A.M.C. 1880 (E.D.Va.1971) (MacKenzie, D.J.) is not well taken. There, the court dealt with a belated attack against the allegedly negligent substitute custodian’s arrangement, as the plaintiff argued that the U.S. Marshal should have retained custody of the vessel. The Eastern District of Virginia revealed a sensitivity to high wharfage fees in noting that the Marshal would have required $75 per day whereas the substitute only sought $18 per day. Since the substitute fee and arrangement was completely reasonable under the circumstances the court repelled the late attack. Id.

The Court agrees that the complaining parties could have challenged the substitute custodian wharfage fees at an earlier date. Nonetheless, sitting by idly and enforcing exorbitant wharfage fees is not a proper course of conduct for any court. Humphreys’ itself was forwarding bills monthly to the defendants as seen in the exhibits. The monthly billing indicated a $22.00 per working day, $110.00 per week charge, for custodial care of the vessel. A regular customer would not have expected to owe more than they were billed. Here, the owners would have not have expected that Humphreys was actually going to claim $1,400 a week when it was concurrently billing $110.00 a week for the same services. Certainly Humphreys cannot claim a waiver by the intervenors when its own conduct was such as to completely mislead any normal recipient of such bills into believing that Humphreys itself was only claiming $110.00 weekly, instead of $1,400.00 weekly. This Court finds that no waiver nor any estoppel has been shown by Humphreys as to the vessel or its owners and indeed, this Court holds that the owners have not relinquished their right to argue that the Humphreys’ wharfage charges were excessive under the circumstances of this case. The wharfage charges were attacked at the final pretrial conference and at trial. Accordingly, the Court has examined the reasonableness of the wharfage charges sought by Humphreys.

One of the parties called attention to Pouch Terminal v. M/V Atra, et al., 1982 A.M.C. 2268 (S.D.N.Y.1982). This case involved a challenge against substitute custodian wharfage charges rendered to a vessel of indeterminate length. The court there reviewed the charges and stated:

The parties to this action have registered several objections to the amounts claimed by Pouch. The principal objection is to the reasonableness of the $600 per day rate. Certain claimants argue that, although this rate was established by contract before the Atra was seized, the contract is not controlling on the issue of reasonableness. It is urged that $100 per day would be more reasonable because that is what the Port Authority of New York and New Jersey charges for vessels of a size comparable to the Atra’s. Claimant crew members argue that wharfage fees for a comparable vessel docked in Brooklyn would cost only $260 per day and that therefore Pouch should receive less than half of what it is asking. Finally, it is argued that Pouch has not submitted proof of the additional guard services which it rendered between September 11 and 17.
* * * * * *
It appears to me that Pouch should be entitled at the very least to that rate which it had established prior to the arrival of the Atra. That rate is $500/day for a vessel of the size of the Atra. This court is not bound by the $600 per day contractual rate.

Id. at 2274. The salient comment of the New York court regards the reduction of the wharfage charge to the amount normally charged for a vessel of similar size.

This Court finds as a fact that a normal, fair, reasonable rate for wharfage and custodial expenses that Humphreys would charge would be that which Humphreys itself set. That fee is $22 a day per work day or $110 per calendar week. A fee of $1,400 per week in rural Weems, Virginia is in no way fair nor reasonable nor will it be condoned or accepted by the Court. The custodial fees requested are such as to shock the conscience of this Court under the circumstances of this case. This is not to say that such fees would not be reasonable in another case with different circumstances.

Accordingly, Humphreys is entitled to thirty-six (36) weeks of custodial fees at $110.00 a week, or the sum of $3,960.00 as custodial fees.

Thus, it is hereby ORDERED Eiriks’ shall receive $4,000 for wharfage and Humphreys shall receive $3,960.00 for custodial fees.

IT IS SO ORDERED.


source: Caselaw Access Project

author: DUPREE, District Judge.

license: Public Domain

text:
    Delia R. DICKEY v. Willie GREENE, Individually and as Executive Director of Region P. Human Development Agency, Inc.; Alice Faye Baker, Individually and as Chairman of Head Start Policy Council and Eulus G. King, Individually and as Chairman of the Board of Region P. Human Development Agency, Inc.
    No. 82-26-CIV-4.
    United States District Court, E.D. North Carolina, New Bern Division.
    Dec. 19, 1984.

      John H. Harmon, New Bern, N.C., for plaintiff.
    Jill R. Howard, Earl C. Collins, Jacksonville, N.C., for defendants.
   ORDER

DUPREE, District Judge.

Complaining of sexual harassment by her supervisor, plaintiff Delia R. Dickey brought the present action on March 12, 1982 alleging defendants, all officials of the Region P Human Development Agency, Inc., had engaged in unlawful discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq. The case is now before the court on defendants’ motion for summary judgment. The motion will be granted as to defendants Alice Faye Baker and Eulus G. King but denied as to defendant Willie Greene.

Plaintiff began working at Region P Human Development Agency, Inc. in September, 1975 under the immediate supervision of defendant Willie Greene, the executive director of the agency. Approximately three weeks after she began work, plaintiff alleges that Greene began making “lustful and obscene gestures” toward her. Plaintiff resisted his overtures, but she contends that he continued to harass her and eventually asked her to accompany him to a hotel. Although plaintiff refused to acknowledge Greene’s advances and requested that he leave her alone, she claims that Greene continued to sexually harass her until September of 1976 when he terminated her employment, explaining that there was not enough work to support her position. Plaintiff asserts that Greene’s reasons for dismissing her were fabricated, since he later hired another person to do the same work.

Plaintiff filed a timely charge of discrimination with the Equal Employment Opportunity Commission (EEOC) on October 18, 1976 alleging that she had been wrongfully discharged for refusing to succumb to Greene’s sexual advances. It is unclear what, if anything, occurred at the agency level between 1976 and 1981. In any event, plaintiff submitted a second charge of discrimination on August 8,1981, a copy of which is attached to this order, and apparently received a right-to-sue letter sometime thereafter. She then filed the present action on March 12, 1982 against Greene, Alice Faye Baker and Eulus G. King. At the time of suit, Baker was Chairman of the Head Start Policy Council and King was Chairman of the Board of Region P Human Development Agency, Inc. All defendants were sued in their individual and representative capacities.

Defendants answered plaintiffs complaint by generally denying all of her allegations and moving to dismiss the complaint on the ground that the court lacked subject matter jurisdiction. Defendants contended that plaintiff had only identified Region P Human Development Agency, Inc., in the charge of discrimination and had not listed any of their names as respondents. By failing to do so, defendants argued, plaintiff had not satisfied the jurisdictional prerequisites for bringing suit under Title VII.

The case was initially referred to a magistrate who granted defendants’ motions to dismiss for lack of subject matter jurisdiction, citing the Fourth Circuit Court of Appeals’ decision in Mickel v. South Carolina State Employment Service, 377 F.2d 239, 242 (4th Cir.1967). Plaintiff did not object to the magistrate’s memorandum and recommendation and the court adopted it as its order on July 28, 1982 thereby dismissing plaintiff’s Title VII suit against the three defendants.

On appeal to the Fourth Circuit, plaintiff argued for the first time that since she referred to defendant Greene in the narrative portion of the charge form, her suit, at least as far as Greene was concerned, should have been allowed to proceed. This court’s order dismissing the case was initially affirmed by a panel of judges over a vigorous dissent by Judge Murnaghan. Dickey v. Greene, 710 F.2d 1003 (4th Cir. 1983) . Plaintiff filed a petition for a rehearing en banc and the case was heard a second time by the full Court of Appeals. Dickey v. Greene, 729 F.2d 957 (4th Cir. 1984) . Writing for a five-four majority, Chief Judge Winter concluded that the case was not properly before the Fourth Circuit since it appeared that a copy of the charge of discrimination had never been made a part of the record and therefore had not been considered by this court or the magistrate. Accordingly, the case was remanded for supplementation of the record and reconsideration.

As Chief Judge Winter surmised, plaintiff's charge of discrimination was never submitted for inclusion in the record and was not considered by this court or the magistrate. Plaintiff’s complaint generally alleged that the jurisdictional prerequisites for a suit under Title VII had been satisfied. Defendants answered by moving to dismiss the case because

[t]he only respondent named in plaintiff’s formal charge of discrimination with the EEOC is “Region P. Human Development Agency, Inc.” Therefore, plaintiff has failed to satisfy the jurisdictional prerequisites to filing suit pursuant to 42 U.S.C. [§] 2000e-2(a)(1) as against any defendant other than the corporate entity known as Region P. Human Development Agency, Inc. (Emphasis added.)

Plaintiff failed to respond to defendants’ motions to dismiss and the magistrate apparently, and understandably, concluded from the above-quoted passage that the only name appearing anywhere on the face of the charge of discrimination was that of “Region P. Human Development Agency, Inc.” Relying upon the clear factual and legal precedent of Mickel v. South Carolina State Employment Service, supra, the magistrate dismissed plaintiffs Title VII claim and the court adopted this portion of the magistrate’s memorandum and recommendation for the same reason.

Neither plaintiff nor defendants brought to the court’s attention the fact that Greene’s name appeared elsewhere on the charge of discrimination and made no effort to make the form a part of the record. Thus, the form was not in the record simply because there had been nothing to alert the court that it was needed for a full adjudication of the case.

Following the case’s remand by the Fourth Circuit the court by order filed June 19, 1984 directed plaintiff to submit a copy of the charge of discrimination and allowed both parties the opportunity to make whatever additional submissions and arguments they deemed necessary. Plaintiff responded by providing the court with a copy of the charge. The court will consider defendants’ motions to dismiss as renewed but they will be treated as motions for summary judgment since matters outside the pleadings have been submitted. See Rule 12(b)(6), F.R.Civ.P.

The names of defendants Baker and King do not appear anywhere on plaintiff’s charge of discrimination. In Mickel v. South Carolina State Employment Service, 377 F.2d 239 (4th Cir.1967), plaintiff alleged that defendant South Carolina State Employment Service and Exide Battery Company had discriminated against her on the basis of her race. Affirming the district court’s dismissal of the case against Exide, the Fourth Circuit Court of Appeals held that by not listing Exide anywhere on the face of her charge of discrimination filed with the EEOC, plaintiff had failed to satisfy the statutory requirements of Title VII. Id. at 242. She had not, the court reasoned, “avail[ed] herself of the services of the Commission in an endeavor to effect, through ‘conference, conciliation and persuasion,’ the elimination by Exide of any alleged unlawful employment practices.” Id.; see 42 U.S.C. § 2000e-5(b).

The Fourth Circuit’s decision in Mickel is dispositive of plaintiff’s case against defendants Baker and King. As in Mickel, plaintiff failed to list Baker or King anywhere on her charge of discrimination. This deprived the EEOC of the opportunity to resolve her dispute with these defendants. Accordingly, she has not satisfied the requirements of Title VII and the motion of defendants Baker and King for summary judgment must be granted. See Dickey v. Greene, 710 F.2d 1003, 1005-1006 (4th Cir.1983); id. at 1009 (Murnaghan, J., dissenting).

Plaintiff’s case against defendant Willie Greene is not controlled by Mickel. Unlike the plaintiff in Mickel, Dickey listed Greene’s name on her charge of discrimination form in the narrative section of the form denominated “THE PARTICULARS ARE:” The question presented is whether a plaintiff’s suit is barred for failure to satisfy the jurisdictional requirements of Title VII when the plaintiff does not place a defendant’s name in the space designated on the charge of discrimination form for listing the employer or employers who discriminated against her, but does list defendant’s name elsewhere on the form. The court holds that the jurisdictional requisites of Title VII are satisfied if the party or parties alleged to have discriminated against plaintiff are clearly identified by plaintiff anywhere on the face of the charge of discrimination form.

Title VII is a broad remedial statute designed “to make persons whole for injuries suffered on account of unlawful employment discrimination.” Albemarle Paper Company v. Moody, 422 U.S. 405, 418, 95 S.Ct. 2362, 2372, 45 L.Ed.2d 280 (1975). Consistent with the purpose of the Act, it is generally accepted that complaints filed with the EEOC should be liberally construed since they are framed by persons unfamiliar with the pleading requirements of the Act. See, e.g., Shehadeh v. Chesapeake & Potomac Telephone Company, 595 F.2d 711, 727 (D.C.Cir.1978); Tillman v. City of Boaz, 548 F.2d 592, 594 (5th Cir.1977); Cox v. United States Gypsum Company, 409 F.2d 289, 290 (7th Cir. 1969); Pittman v. Anaconda Wire and Cable Company, 408 F.Supp. 286, 290 (E.D.N.C.1976). Moreover, the Supreme Court has unequivocally stated that “technicalities are particularly inappropriate in a statutory scheme in which laymen, unassisted by trained lawyers, initiate the process.” Love v. Pullman Company, 404 U.S. 522, 527, 92 S.Ct. 616, 619, 30 L.Ed.2d 679 (1972).

The filing of a timely charge of discrimination with the EEOC is a jurisdictional prerequisite to the institution of a lawsuit in federal court. Alexander v. Gardner-Denver Company, 415 U.S. 36, 47, 94 S.Ct. 1011, 1019, 39 L.Ed.2d 147 (1974); Dickey v. Greene, 710 F.2d 1003, 1005 (4th Cir.1983). The charge must be in writing and “contain such information and be in such form as the [EEOC] requires.” 42 U.S.C. § 2000e-5(b). The EEOC requires, through its regulations, that the charge contain “[t]he full name and address of the person against whom the charge is made, if known....” 29 C.F.R. § 1601.12(a)(2).

The charge of discrimination form has spaces for specific information about the plaintiff and the details of plaintiffs claim of discrimination. The gravamen of defendant Greene’s motion to dismiss is that plaintiff failed to satisfy the statutory requirements for a suit under Title VII because Greene’s name does not appear in the space entitled “NAMED IS THE EMPLOYER, LABOR ORGANIZATION, EMPLOYMENT AGENCY, APPRENTICESHIP COMMITTEE, STATE OR LOCAL GOVERNMENT AGENCY WHO DISCRIMINATED AGAINST ME.” Defendant’s name does appear on the charge of discrimination form in the “THE PARTICULARS ARE:” section but this, defendant argues, falls short of the requirements for a suit under Title VII. The court does not agree.

A substantial number of circuit and district courts have held that the jurisdictional requisites of Title VII are satisfied if the charge of discrimination fairly apprises the EEOC of the party or parties alleged to have discriminated against the plaintiff. See, e.g., Eggleston v. Chicago Journeymen Plumbers' Local Union No. 130, 657 F.2d 890, 905 (7th Cir.1981), cert. denied, 455 U.S. 1017, 102 S.Ct. 1710, 72 L.Ed.2d 134 (1982); Romero v. Union Pacific Railroad, 615 F.2d 1303, 1311-12 (10th Cir. 1980); Shehadeh v. Chesapeake & Potomac Telephone Company, supra, 595 F.2d at 728; Glus v. G.C. Murphy Company, 562 F.2d 880, 888 (3d Cir.1977); Kaplan v. International Alliance of Theatrical and Stage Employees, 525 F.2d 1354, 1359 (9th Cir.1975); Friedman v. Weiner, 515 F.Supp. 563, 565 (D.Col.1981). This approach to determining whether a charge of discrimination passes jurisdictional muster makes both practical and legal sense in light of the generally accepted policy of liberally construing charges of discrimination. Love v. Pullman Company, 404 U.S. at 527, 92 S.Ct. at 619.

In addition to the policy considerations inherent in any case arising under Title VII of the Civil Rights Act of 1964, it would be unfair for the court to penalize an unsuspecting plaintiff who failed to list a name in a particular section of the charge of discrimination form, since the form itself is somewhat misleading. The very phrasing of the section in which an aggrieved employee is to name those who discriminated against him or her suggests that only the name of the institutional employer is to be listed. This section seeks the name of “THE EMPLOY##, LABOR ORGANIZATION, EMPLOYMENT AGENCY, APPRENTICESHIP COMMITTEE, STATE OR LOCAL GOVERNMENT AGENCY” (emphasis added) who discriminated against the employee. Although the term “employer” is defined by the Act to include an agent of the employer, the unschooled plaintiff would likely conclude that by the use of the word “employer” instead of “employee” the EEOC was seeking the name of the business institution for which the plaintiff worked. See 42 U.S.C. § 2000e(b); 29 C.F.R. § 1601.2. It would certainly be fortunate if aggrieved employees read the wording of the section more broadly to seek the names of every individual and institution discriminating against them, but as the present case illustrates the form is not read in this manner.

Adding to the confusion is the fact that the charge of discrimination form also seeks the address and telephone number of the business or agency which committed the discriminatory acts. It would stretch reason to believe that the EEOC intended for the aggrieved employee to list in these spaces the home address and telephone number of an employee or employees. These facts are unlikely to be known by the person filing the charge and the EEOC surely could not expect the employee to obtain this information from the very person or persons against whom the charge of discrimination is filed. The EEOC obviously intended for the person filing the charge to provide the telephone number and address of an institutional employer. Assuming this to be true, it would be illogical for the court to require that the complaining employee list the specific employee’s name in this section or face the risk that his or her action will be dismissed for failure to satisfy the jurisdictional mandates of Title VII. This is especially true since the EEOC itself finds the charge of discrimination sufficient if it contains “a written statement sufficiently precise to identify the parties, and to describe generally the action or practices complained of.” 29 C.F.R. § 1601.12(b).

The charge of discrimination form contains a section entitled “THE PARTICULARS ARE:” which provides a substantial amount of space within which the plaintiff can note the details pertinent to his claim of discrimination. Plaintiff in the present case appears to have used this space for its intended purpose when she gave specifics relating to her claim of sexual harassment and named defendant Greene as the perpetrator. Thus, both the EEOC and Greene had notice of plaintiff’s claim because she fully described its substance in this section. Dismissal of plaintiff’s action under these circumstances would be an extreme measure unsupported by any practical or legal basis.

A final commonsense reason exists for not dismissing plaintiff’s case because she failed to meet the jurisdictional requirements of Title VII. In filling out the charge of discrimination form, plaintiff followed, to the letter, the instructions contained in the “NAMED IS THE EMPLOYER ....” section. This section required her to list the name of the “STATE OR LOCAL GOVERNMENT AGENCY WHO DISCRIMINATED” against her. Although it is unclear from the record, it is apparent that the Region P Human Development Agency, Inc., is at least tangentially related to state government. Even if it were not, it would probably appear to be so connected to its employees. Plaintiff therefore was doing exactly what she thought the form requested her to do: listing the name of the agency which employed the person who discriminated against her. Again, it would be unfair to this or any other plaintiff to allow a defendant to use the technical requirements of Title VII in this manner to thwart attempts to remedy discrimination.

Aside from the broad policy considerations accompanying a suit brought under Title VII and the fact that the charge of discrimination form as presently written is ambiguous, a recent Supreme Court decision suggests that were the Court to be presented with the issue in this case it would hold that the requisites of Title VII are satisfied if the name of the party to be charged clearly appears anywhere on the face of the charge of discrimination form. In EEOC v. Shell Oil Company, — U.S. —, 104 S.Ct. 1621, 80 L.Ed.2d 41 (1984), Shell Oil Company moved to quash an EEOC subpoena on the ground, inter alia, that the EEOC’s charge of discrimination supporting the subpoena did not meet the requirements of 42 U.S.C. § 2000e-5(b) because it failed to contain “[a] clear and concise statement of the facts, including pertinent dates, constituting the alleged unlawful employment practices....” 29 C.F.R. § 1601.12(a)(3). The Supreme Court rejected a reading of Section 1601.12(a)(3) which would require the Commissioner to “specify the persons discriminated against, the manner in which they were injured, and the dates on which the injuries occurred.” — U.S. at —, 104 S.Ct. at 1632. The Court held that such a requirement would cut short most of the EEOC’s investigations and would be manifestly inconsistent with the Congressional intent behind Title VII. Id. Instead, the Court held that the requirements of 29 C.F.R. § 1601.12(a)(3) would be satisfied if the Commissioner identified the groups of persons believed to have been discriminated against, the categories of position from which they had been included, the methods by which the discrimination may have been effected, and the periods in which discrimination is alleged to have been practiced. Id. at 1633. Thus, consistent with the remedial purpose of Title VII and the liberal construction afforded to charges filed under the Act, the Court chose to impose less stringent requirements on charges of discrimination filed by the EEOC in “pattern or practice” cases.

The Supreme Court’s decision in Shell Oil Company is not directly on point to the present case but the similarity between the two is readily apparent. Both cases involve the sufficiency of information contained in a charge of discrimination form. Although the eases deal with separate subsections of 29 C.F.R. § 1601.12, the court is of the opinion that this does not serve to distinguish the cases. The Court in Shell Oil Company skillfully blended the policy considerations of Title VII with the EEOC regulations promulgated under the Act to arrive at a practical and equitable solution by adopting a broader interpretation of what information is required to satisfy the requirements of 29 C.F.R. § 1601.12(a)(3). This court has little doubt that if the Supreme Court were presented with the facts of this case, it would interpret a companion provision, in this case 29 C.F.R. § 1601.-12(a)(2), in the same manner. This would be consistent with the Court’s observation in Love v. Pullman Company, 404 U.S. at 527, 92 S.Ct. at 619, that “technicalities are particularly inappropriate [in Title VII cases because] laymen, unassisted by trained lawyers, initiate the process.”

In summary, the court finds that plaintiff’s failure to place the names of defendants Baker and King anywhere on her charge of discrimination form bars her action against these defendants. Because plaintiff clearly noted defendant Greene’s name on the face of the form and gave specifics as to the alleged discrimination, her action against this defendant will be allowed to proceed. Accordingly, the motions for summary judgment on behalf of defendants Baker and King are granted and the motion for summary judgment on behalf of defendant Greene is denied.

SO ORDERED.

      . Defendants do not contend that plaintiff failed to file her complaint within ninety days of receiving the right-to-sue letter as required under the Act. See 42 U.S.C. § 2000e-5(f)(1).

      . Plaintiff had also based her action on 42 U.S.C. § 1983, 28 U.S.C. §§ 2201-02, and race discrimination in violation of 42 U.S.C. § 2000e-2(a)(1). These claims were not pressed on appeal to the Fourth Circuit and the court therefore considers them to have been abandoned.

      . The court notes in passing that the Fourth Circuit Court of Appeals has recently held that the failure to file timely objections to a magistrate’s report waives appellate review of the substance of the report, provided that the parties were notified of the need to file timely objections. Carr v. Hutto, 737 F.2d 433, 434 (4th Cir.1984); United States v. Schronce, 727 F.2d 91, 94 (4th Cir.), cert. denied, — U.S. —, 104 S.Ct. 2395, 81 L.Ed.2d 352 (1984). The question of whether appellate review has been waived in this case is not, of course, for this court to decide.

      . As defined by the Act, the term "employer" not only means private employers but includes "governments, governmental agencies ... [and] labor unions.” 42 U.S.C. § 2000e(b) and (a). Thus, the EEOC’s listing of governmental entities and labor organizations in the section title is redundant since these entities are covered by the definition of "employer.” The EEOC apparently decided that the form would be more clear if it listed the names of these institutions. If the EEOC had taken the additional step of listing the word "employee” in the section much confusion could be avoided and the present case would probably not have arisen.

      . A further distinction might be drawn between Shell Oil Company and the present case on the ground that the Supreme Court was faced with a "pattern or practice” case whereas plaintiff's action is an individual suit alleging discrimination unique to her. This distinction lacks substance, however, since 29 C.F.R. § 1601.12 applies to both kinds of charges. — U.S. at —, 104 S.Ct. at 1630 n. 19. The Supreme Court noted that application of a single regulation to both charges causes “considerable awkwardness when complainants try to fit allegations of systemic discrimination into a mold designed primarily for individual claims.” Id. Similarly, this court has difficulty in applying the regulation because it lacks the specificity necessary to dispose of the present case. If the regulations had delineated more thoroughly the information required on'an individual charge of discrimination, the answer to the present case would likely have been more clearcut.


author: MANSMANN, District Judge.

text:
    Albert A. KAISER, Plaintiff, v. DIALIST COMPANY OF TEXAS, Defendant.
    Civ. A. No. 83-393.
    United States District Court, W.D. Pennsylvania.
    Dec. 19, 1984.
    Albert A. Kaiser, plaintiff, pro se.
    W. Thomas Laffey, Jr., Pittsburgh, Pa., for defendant.
   MEMORANDUM OPINION

MANSMANN, District Judge.

This action is before the Court on the Plaintiffs Motion for Summary Judgment and on two issues raised by the Defendant in both its Answer and the Pretrial Stipulation. The Plaintiff responded to both issues in his Motion. The matters raised by the Defendant can be construed as a Motion for Summary Judgment founded on arguments that the Court lacks jurisdiction and that the Plaintiff failed to state a claim upon which relief can be granted, and the Court so construes them now. In any event, where one party moves for summary judgment, the Court may enter judgment in favor of the non-moving party so long as the parties have had an opportunity to address the issues. For'the reasons set forth below, the Defendant’s Motion is denied with respect to the jurisdictional question and granted with respect to the failure to state a claim issue. The Plaintiff’s Motion is, therefore, denied.

The Defendant claims that the Plaintiff has not met the $10,000 jurisdictional minimum which is required in diversity jurisdiction cases. 28 U.S.C. § 1332. The Court notes that the Plaintiff has alleged damages in excess of $10,000. The test to determine the existence of the jurisdictional minimum is the sum demanded by the Plaintiff in good faith. Accordingly, the Defendant’s argument that this Court lacks jurisdiction because the Plaintiff failed to meet the jurisdictional minimum is rejected.

The Defendant also contends that the Plaintiff has no private right of action under section 5 of the Federal Trade Commission Act (“FTCA”), 15 U.S.C. § 45. The FTCA does not provide such a private right of action. Holloway v. Bristol-Myers Corp., 485 F.2d 986, 987-1002 (D.C.Cir. 1973); accord Pan American World Airways v. United States, 371 U.S. 296, 306, 83 S.Ct. 476, 482, 9 L.Ed.2d 325 (1963) (dictum); Federal Trade Comm’n v. Klesner, 280 U.S. 19, 25, 50 S.Ct. 1, 2, 74 L.Ed. 138 (1929); Polansky v. Trans World Airlines, Inc., 523 F.2d 332, 339 (3d Cir.1975). “A fair reading of the statute and its legislative history evinces a plain intent by Congress to make the administrative program for enforcing the Federal Trade Commission Act an exclusive one.” Holloway, 485 F.2d at 1002. Consequently, the portion of the Defendant’s summary judgment motion relating to failure to state a claim is granted.

The Court notes that the Plaintiff in the instant case is not represented by counsel. He is a pro se plaintiff. For this reason and because the Defendant did not submit a formal summary judgment motion, the Court construes the Plaintiff’s pleadings liberally. The Court finds that the Plaintiff has stated a common law contract claim in his Complaint. That cause of action is not dismissed as a result of this opinion.

The Plaintiff’s Motion for Summary Judgment, which addresses the two issues outlined above, is denied because the Court concludes that he has no private right of action.

An appropriate Order shall issue.


author: TIDWELL, District Judge.

text:
    UNITED STATES of America v. COWETA COUNTY HOSPITAL AUTHORITY.
    Civ. A. No. C84-57N.
    United States District Court, N.D. Georgia, Newnan Division.
    Dec. 21, 1984.
    Nina L. Hunt, Asst. U.S. Atty., Edga-Swindell, Asst. Regional Atty., D' HHS, Atlanta, Ga., for plaintiff.

      Charles Van S. Mottola, Sanders, Motto-la, Haugen & Goodson, Newnan, Ga., for defendant.
   ORDER

TIDWELL, District Judge.

The above-styled matter is presently before the court on cross-motions for summary judgment by the plaintiff and defendant. This is a Hill-Burton recovery action, 42 U.S.C. § 291i, in which the United States seeks recovery of funds representing its proportionate share of the value of a public hospital which was constructed with federal assistance. Under 42 U.S.C. § 291i the United States is entitled to recover a percentage of the value of the facility commensurate with the federal funds contributed if the public facility within twenty years after the completion of construction:

(a) be sold or transferred to any person, agency, or organization (1) which is not qualified to file an application under section 605 [42 USCS § 291e], or (2) which is not approved as a transferee by the State agency designated pursuant to section 604 [42 USCS § 291d], or its successor, or
(b) cease[s] to be a public health center or a public or other nonprofit hospital, outpatient facility, facility for long-term care, or rehabilitation facility, unless the Surgeon General [now the Secretary of Health and Human Services under 80 Stat. 1610 (1966); 93 Stat. 677 (1979)] determines, in accordance with regulations, that there is good cause for releasing the applicant or other owner from this obligation.

The federal recovery action in this case arose as a result of the sale of Coweta General Hospital to General Hospitals of Humana, Inc., a for-profit corporation which does not qualify to file an application under 42 U.S.C. § 291e, within twenty years after the completion of the Hill-Burton construction project. Defendant admits that the statute applies and that the United States is entitled to recover $300,-049 plus accrued interest. The narrow issue that is the only contention before this court is whether the defendant may request a waiver of liability from the Secretary of Health and Human Services under § 291i(b).

In United States v. First Georgia Bank, 529 F.Supp. 384 (N.D.Ga.1982) the defendant in a similar recovery action argued that the waiver provisions found in § 291i(b) applied to § 291i(a) because subsection (b)’s reference to the waiver of liability for “the applicant ...” must refer to persons in subsection (a) situations. The court dismissed defendant’s contention that the waiver provision applied to § 291i(a) as well as § 291i(b), finding that the waiver of liability applied only to liability founded on § 291i(b). Id. at 385-86.

Defendant in this case makes a related but slightly different argument. Defendant contends that while the transaction involved fits within subsection (a) in that the public hospital facility was transferred to a private for-profit hospital corporation, it also comes within subsection (b) in that defendant has “cease[d] to be a public health center.” The facility has ceased to be public in that it is now private. Because this is also a subsection (b) situation the waiver provision applies. Defendant attempts to buttress its argument by contending that § 291i’s language providing that the United States “shall be entitled to recover” is permissive and since it applies to both subsections “there must, then, be some 291i(a) situations which are included in § 291i(b). By definition it has to be those situations in which a facility ceases to be public but is still devoted to some extent to a public or nonprofit purpose which promotes Hill-Burtonism as required by 42 C.F.R. § 53.-154(a).” Defendant’s Brief for Summary Judgment.

While defendant’s argument is linguistically logical and imaginative the court finds it unpersuasive. Under defendant’s interpretation of the statute any transfer to an ineligible entity could be considered a subsection (b) situation as the organization will cease to be a public health center. This interpretation would render the separate recovery provision of § 291i(a) virtually superfluous. It is a fundamental rule when construing statutes that effect must be given, if possible, to every part of a statute such that no provision will be inoperative, superfluous, void or insignificant. Weinberger v. Hynson, Westcott and Dunning, Inc., 412 U.S. 609, 633, 93 S.Ct. 2469, 2485, 37 L.Ed.2d 207 (1973); Duke v. University of Texas at El Paso, 663 F.2d 522, 526 (5th Cir.1981). Defendant’s literalism risks strangulation of the obvious separate recovery provision and such an interpretation cannot be used to defeat the plain purpose of the statute. Bob Jones University v. United States, 461 U.S. 574,103 S.Ct. 2017, 76 L.Ed.2d 157 (1983); Espinoza v. Farah Manufacturing Co., 462 F.2d 1331 (5th Cir.1972), aff’d 414 U.S. 86, 94 S.Ct. 334, 38 L.Ed.2d 287 (1973). Unduly literal arguments interpreting this statute have been rejected at least twice before. See First Georgia Bank, supra; United States v. Brady, 385 F.Supp. 1347 (S.D.Fla.1974). The present transaction clearly falls within the scope of § 291i(a) and for the reasons succinctly stated in First Georgia Bank, supra, there is no good cause waiver provision applicable to § 291i(a).

Further this construction is consistent with the new changes in the Hill-Burton area which continues the distinction between subsection (a) and (b) situations. See Deficit Reduction Act of 1984, Division B (Spending Reduction Act of 1984) Title III. § 2381, Pub.L. 98-369 (July 18, 1984). The amended § 609 of the Public Health Service Act now explicitly provides for a waiver in a subsection (a) situation but it is a different waiver criteria than used in subsection (b). Id. at § 609(d)(1) and (d)(2). Because a distinction is drawn between subsection (a) situations and subsection (b) situations and defendant is not entitled to a waiver under § 291i(a) and has declined to pursue waiver under the new Public Health Service Act, the defendant’s motion for summary judgment is denied and plaintiff’s motion for summary judgment is granted.


text:
    Carol E. FORBUS v. ALLSTATE INSURANCE COMPANY.
    Civ. A. C84-29N.
    United States District Court, N.D. Georgia, Newnan Division.
    Dec. 21, 1984.

      David B. Kitchens, R. Dennis Withers, Hurt, Richardson, Garner, Todd & Cadenhead, Atlanta, Ga., for plaintiff.
    Dennis J. Webb, Brian A. Boyle, Dennis, Corry, Webb & Carlock, Atlanta, Ga., for defendant.
   ORDER

TIDWELL, District Judge.

The above-styled matter is presently before the court on motions for partial summary judgment by both the plaintiff and the defendant. Plaintiff has also made a motion in limine. In March 1983 the plaintiff’s home was destroyed by fire. At the time of the fire, the plaintiff was insured under a policy issued by defendant. One of the insurance company’s defenses is that the fire might have been caused by arson. Plaintiff moves for summary judgment on the issues of whether plaintiff has a full insurable interest in the damaged property and whether defendant established an arson defense. Defendant opposes these motions and in turn moves for summary judgment on the issue of bad faith penalties and attorney’s fees.

Insurable Interest

Plaintiff initially asks for summary judgment on the issue of whether she has a full insurable interest in the property under the insurance policy. Defendant concedes that plaintiff has some insurable interest in the property but contends plaintiff is not entitled to the face amount of the Allstate policy for two reasons. First, defendant argues that because plaintiff owes her ex-husband $23,000 under a divorce decree, and plaintiff intended to repay the majority of that debt from the proceeds of the sale of her house, her ex-husband has an interest in the house. This argument is unpersuasive. Under the divorce decree plaintiff received complete title to the house. Plaintiff has no legal duty to pay the money to her ex-husband from the proceeds of any sale of the property. The cases of Allstate Ins. Co. v. Ammons, 160 Ga.App. 257, 286 S.E.2d 765 (1981) and Allstate Ins. Co. v. Thompson, 164 Ga.App. 508, 297 S.E.2d 520 (1982) are inapposite on this point as in those cases the divorce decree specifically granted both spouses an interest in the property. Such is not the situation in this ease. Defendant asks this court to look beyond the language of the divorce decree to determine the intent of the parties, however the language is clear and the court need look no further to determine the interests conveyed. Undercofler v. Whiteway Neon Ad., Inc., 114 Ga.App. 644, 152 S.E.2d 616 (1966).

Defendant also relies on Ammons and Thompson for the proposition that because plaintiff attempted to sell her property before the fire, she is limited to that sale price as the amount of her insurable interest. Ammons and Thompson involved divorce settlements in which as part of the settlement the spouses contracted to sell their property either for a minimum price or at fair market value. The Georgia Court of Appeals in those cases limited the insurable interest to the price established in the divorce decree. In the present case because plaintiff has independently contracted to sell her property, defendant asserts that plaintiff is also limited to that value as insurable interest.

The facts of this case are distinguishable. In the Ammons and Thompson cases the divorce decree determined what each party’s interest was in the property. Here there is an agreement with a third party, which, based on prior dealings between the parties, is unlikely to materialize. No value on plaintiff’s house was determined in the divorce decree. In fact in the Thompson case, where the decree ordered a sale but not a fixed price, the court used the policy limits to determine insurable interest.

Even if the facts of this case were determined to be indistinguishable from the cases cited by defendant, the cases would not be controlling as there is a statute directly on point. The Georgia Valued Policy Statute, O.C.G.A., § 33-32-5 states that whenever any insured residential building is wholly destroyed by fire “the amount of insurance set forth in the policy relative to the building or structure shall be taken conclusively to be the value of the property except to the extent of any depreciation in value occurring between the date of the policy or its renewal and the loss.” The insurance policy in question explicitly provides that any policy provisions in conflict with state statutes are amended to conform to such statutes.

None of the cases defendant cites dis cusses this provision. Indeed, this court has not been able to discover and counsel has not directed the court to any Georgia cases that addressed this issue. However, numerous other jurisdictions have uniform ly held that when a state has a value policy law an insured with a possible ownership less than the whole policy limits may recover the entire policy amount under such a statute. See Dewitt v. American Family Mutual Insurance Company, 667 S.W.2d 700, 707 (Mo.1984); Smith v. Nationwide Mutual Fire Insurance Company, 564 F.Supp. 350 (N.D.Fla.1983); Holden v Hanover Fire Insurance Company, 128 F.Supp. 527 (W.D.S.C.1955); Hilltop Bowl. Inc. v. USF & G Company, 259 F.Supp 649, 653 n. 14 (W.D.La.1966); Roberts v Houston Fire and Casualty Company, 168 So.2d 457 (C.A.La.1964); Tedford v. Security State Fire Insurance Company. 224 Ark. 1047, 278 S.W.2d 89 (1955); Hensley v. Farm Bureau, 243 Ark. 408, 420 S.W.2d 76 (1967); Board of Trustees v. Cream City Mutual Insurance Company, 255 Minn. 347, 96 N.W.2d 690, 695 (1959); Hight v. Maryland Ins. Co., 69 S.D. 320, 10 N.W.2d 285 (1943); Bright v. Hanover Insurance Company, 48 Wash. 60, 92 P. 779 (1907). While these cases are helpful, they are not decisive as this court must consider how this statute would be interpreted by Georgia courts. This court is of the opinion that a Georgia state court alerted to this statute would enforce its provisions Until an indication is given to the contrary this court concludes that the valued policy statute controls and that plaintiff is entitled to summary judgment on this issue.

Arson Defense

The plaintiff asserts that the de fendant, as a matter of law, is unable to establish the elements required to success fully assert an arson defense to the policy. While the question of arson is usually decided by the jury, where the evidence is insufficient to raise even an inference of arson, under Georgia law summary judgment is appropriate. Southern Trust Company v. Braner, 169 Ga.App. 567, 314 S.E.2d 241 (1984). Plaintiff refers this court to the three-part test enunciated in Southern Trust at 568, 314 S.E.2d 241, that defendant must show incendiary origin, motive by the suspect, and unexplained surrounding circumstantial evidence implicating the suspect in order to establish an arson defense. Defendant refers this court to another Georgia case, Fortson v. Cotton States Mutual Insurance Company, 168 Ga.App. 155, 308 S.E.2d 382 (1983), for its three-part test, on what is necessary in order to establish an arson defense.

An examination of Georgia law in this area does not indicate which formula should be followed. The two cases were decided four months apart by different panels of the Georgia Court of Appeals. The later decision, Southern Trust, does not refer to the earlier one. Neither Southern Trust nor Fortson cite prior Georgia authority in support of the wording of its formula. Previous cases blur any distinction the two formulas appear to possess. See, e.g., Rollins v. Great Southwest Fire Insurance Company, 162 Ga.App. 139, 290 S.E.2d 353 (1982). Whether phrased as “opportunity” (the Fortson language) or “unexplained circumstantial evidence” the Georgia courts are insisting that evidence of incendiary origin and motive by themselves are not sufficient to establish an arson defense; there must be in addition some evidence which would link the suspect to the arson.

The evidence presented thus far is that the fire occurred during the middle of the night and was probably of incendiary origin. Cans of charcoal lighter fluid were kept in the house although plaintiff gives conflicting testimony as to the quantity. Plaintiff was at home that evening as were her children. Plaintiffs and her son’s testimony conflict over the location and progress of the fire. It is unclear whether there were any pets inside when the fire began and whether any personal belongings had been removed. The automobile was left in the carport. Plaintiff had been trying to sell the house since June 1981 as she was out of work and concerned about her bills. She owes her ex-husband $23,-000. Plaintiff had one offer on her house but a sales contract had not been completed. The insurance value exceeded the sales price. Plaintiff does not know of any person who would have reason to burn the house.

Viewing the evidence presented in the light most favorable to the party opposing the motion, the court cannot say that as a matter of law defendant has not raised even an inference of arson. There is evidence of incendiary origin and some evidence of motive. Although there is no direct evidence linking plaintiff to the cause of the fire, there is circumstantial evidence of opportunity and a number of inconsistencies in plaintiff’s testimony as to the events in question. Summary judgment on this issue at this time is improper.

Bad Faith

Defendant moves for summary judgment on plaintiff's claim of bad faith penalties and attorney’s fees under O.C.G.A. § 33-4-6. The issues of bad faith penalties and attorney’s fees are generally resolved by the jury. National Casualty Company v. Tanner, 100 Ga.App. 618, 112 S.E.2d 232 (1959). Penalties though are not authorized where the insurance company has any reasonable ground to contest the claim. Fortson, supra 168 Ga.App. at 158, 308 S.E.2d 382.

It appears that a reasonable dispute exists as to whether arson destroyed plaintiff’s property. Nevertheless “the faith of the company should not be judged by the preliminary proofs or other ex parte affidavits but at the case made at trial.” Interstate Life & Acc. Ins. Co. v. Williamson, 220 Ga. 323, 325, 138 S.E.2d 668 (1964). Defendant’s motion is therefore denied.

Plaintiff’s motion in limine seeks certain rulings on evidentiary questions concerning the price offered to purchase the dwelling prior to the fire and the effect of that on the defendant’s liability under the insurance policy. Defendant has not responded to this motion. In light of the court’s ruling granting plaintiff summary judgment on the insurable interest question, the motion appears moot. If the issue is still relevant, counsel for plaintiff is directed to resubmit the motion to which defendant will respond within ten days.

In summary, plaintiff’s motion for partial summary judgment as to the issue of insurable interest is granted; all other motions for summary judgment by either party are denied.


author: DONALD J. PORTER, District Judge.

text:
    BLACK HILLS ALLIANCE, Plaintiff, v. UNITED STATES FOREST SERVICE; and Raymond Housley, Acting Chief, U.S. Forest Service, Defendants.
    Civ. No. 80-5068.
    United States District Court, D. South Dakota, W.D.
    Dec. 28, 1984.

      Phyllis R. Girouard, Broken Plow Law Offices, Chadron, Neb., for plaintiff.
    Ted McBride, Asst. U.S. Atty., Rapid City, S.D., for defendants.
   MEMORANDUM OPINION

DONALD J. PORTER, District Judge.

Plaintiff Black Hills Alliance seeks pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. § 552 (1982), certain uranium exploration drill hole information submitted by Union Carbide Corporation to the United States Forest Service. The Forest Service refuses to disclose this information, contending that it is exempt from disclosure under exemptions four and nine of the FOIA, 5 U.S.C. § 552(b)(4), (b)(9). This court exercises subject matter jurisdiction under § 552(a)(4)(B). By agreement of counsel, the case is submitted and can properly be resolved by the court on the basis of countermotions for summary judgment. For the reasons following, the court concludes that the Forest Service has failed to sustain its burden of proving that the requested information falls within exemptions four or nine. Plaintiff’s motion for summary judgment is granted and defendants’ motion is denied. Judgment will be entered accordingly.

I

On April 16, 1980, plaintiff, a non-profit, public interest environmental organization, requested disclosure by the Forest Service of a copy of the 1980 Environmental Assessment Report of the Union Carbide proposed uranium exploration drilling program in the Black Hills National Forest. The Forest Service furnished plaintiff a copy of the report but deleted, at the request of Union Carbide, information respecting the precise number, locations and depths of the proposed uranium exploration drill holes. Having exhausted its administrative remedies, plaintiff now sues in this court to compel the Forest Service to disclose the deleted information.

II

The FOIA, 5 U.S.C. § 552 (1982), “requires federal agencies to disclose records that do not fall into one of nine exempt categories.” United States v. Weber Aircraft Corporation, — U.S. —, 104 S.Ct. 1488, 79 L.Ed.2d 814 (1984) (footnotes omitted). These nine exemptions “must be narrowly construed.” Department of Air Force v. Rose, 425 U.S. 352, 361, 96 S.Ct. 1592, 1599, 48 L.Ed.2d 11 (1976); see State of North Dakota v. Andrus, 581 F.2d 177, 179 (8th Cir.1978) (FOIA policy in favor of disclosure mandates that the exemptions be construed narrowly). Once suit is filed challenging agency action in withholding particular information, “the burden is on the agency to sustain its action.” 5 U.S.C. § 552(a)(4)(B). Moreover, an agency invoking a claim of exemption from disclosure must provide specific justifications in support of its claim; conclusory allegations are insufficient. Vaughn v. Rosen, 484 F.2d 820, 826-27 (D.C.Cir.1973), cert. denied, 415 U.S. 977, 94 S.Ct. 1564, 39 L.Ed.2d 873 (1974). The only issues before this court are whether the Forest Service has sustained its burden of proving that the withheld drill hole information is confidential within the meaning of exemption four, 5 U.S.C. § 552(b)(4), or geological or geophysical information and data within the meaning of exemption nine, 5 U.S.C. § 552(b)(9).

Ill

Exemption four applies to “trade secrets and commercial or financial information obtained from a person and privileged or confidential.” 5 U.S.C. § 552(b)(4). The Forest Service does not contend that trade secrets are involved or that the information is privileged. Consequently, in order that exemption four apply, the information must be (1) commercial or financial, (2) obtained from a person outside the government, and (3) confidential. National Parks and Conservation Association v. Morton, 498 F.2d 765, 766 (D.C.Cir.1974) (.National Parks I). All three elements must be satisfied. See Brockway v. Department of Air Force, 518 F.2d 1184, 1186 (8th Cir.1975). Plaintiff concedes that the requested information is financial or commercial and obtained from a person outside the government. Therefore, the only issue to be resolved is whether the information is confidential. The parties agree that the drill hole data qualifies as confidential for purposes of exemption four “if disclosure of the information is likely to have either of the following effects: (1) to impair the Government’s ability to obtain necessary information in the future; or (2) to cause substantial harm to the competitive position of the person from whom the information was obtained.” National Parks I, 498 F.2d at 770 (footnote omitted). Plaintiff contends that defendants have satisfied neither prong of this test.

A.

Under the first prong of the National Parks I test for confidentiality, defendants must establish at the outset that the drill hole information is necessary. Necessary information means information that would be “particularly helpful” to an agency in carrying out its mandate; it is not required that the information be “absolutely essential” to agency operations and procedures. 9 to 5 Organization for Women Office Workers v. Board of Governors of Federal Reserve System, 721 F.2d 1, 10 (1st Cir.1983).

The Forest Service pursuant to 36 C.F.R. § 228.1 (1983) regulates the “use of the surface of National Forest System lands” by mineral explorers such as Union Carbide “so as to minimize adverse environmental impacts on National Forest System surface resources.” In accordance with these regulations (36 C.F.R. § 228.4(a)), Union Carbide submitted a “plan of operations” to the Forest Service for approval. Union Carbide included in its plan of operations the drill-hole data at issue in this case. Defendants concede that the drill-hole information is not specifically required as part of the plan of operations. See 36 C.F.R. § 228.4(c). They also concede that such information is not necessary in order for the Forest Service (1) to adequately protect both surface and ground water resources; (2) to ensure adequate reclamation activities — specifically the isolation, removal and control of toxic materials and the reshaping and revegetation of disturbed areas, or (3) to perform inspections of the exploration project. See Defendants’ Replies to Interrogatories Listed in Court Order of August 31, 1982 and Amended Order of September 2, 1982 at 4-5, interrogatories nos. 9, 11, 15. Defendants nevertheless contend that “it is pursuant to 36 C.F.R. § 228.13(b) necessary to know the approximate number and depths of drill holes proposed and the general location of operations to prepare an estimate of the reclamation costs, which estimate is used to determine the amount of the reclamation bond.” Id. at 5, interrogatory no. 13. They also contend the drill-hole data is necessary in order for the Forest Service to discharge its day-to-day responsibilities over surface resources and to promote long-term planning obligations.

Although courts normally will defer to the judgment of the agency in determining what information is particularly helpful in fulfilling its statutory obligations, see 9 to 5 Organization, 721 F.2d at 10, here it is uncontroverted that the drill hole data submitted by Union Carbide “went beyond the requirements” of 36 C.F.R. § 228, Affidavit of Kenneth K. Smallwood, U.S. Forest Service, at 3; see Affidavit of Raymond M. Housley, Associate Deputy Chief, U.S. Forest Service, at 3, ¶¶ 7, 8, and is therefore not particularly helpful to the Forest Service. Union Carbide included the drill hole data in its submissions primarily to further the Forest Service processing of and eventual approval of the Union Carbide plan of operations. The allegations of need put forth by defendants are general and conclusory in scope. See Defendants’ Replies to Interrogatories, supra, at 5, interrogatory no. 13, (necessary to know “approximate” number and depths of proposed drill holes and “general” location of holes in order to estimate relocation costs); Affidavit of defendant Raymond M. Housley, supra, at 3, ¶ 7: (such information “is extremely useful for effective planning for surface protection and management of all forest resources”); Affidavit of Kenneth K. Smallwood, supra, at 4 (this data has “significant value to the Forest Service during the land and resource management planning process.”) On this record the court concludes that precise drill hole information such as that submitted to the Forest Service by Union Carbide is not particularly helpful, and therefore not necessary, to the Forest Service in fulfillment of its statutory responsibilities, as specified in 36 C.F.R. §§ 228.1-15.

Even assuming the drill hole data satisfies the threshold test of necessity under the first prong of the National Parks I test for confidentiality, defendants have failed to sustain their burden of proving that disclosure will likely impair the ability of the Forest Service to obtain similar information in the future. The only evidence supplied by defendants in support of their motion for summary judgment on this point is the affidavit of Raymond Housley. That affidavit alleges that “release of the information covered by this action would risk a severe hardship to the Forest Service by potentially crippling its ability to obtain vital information, which a mineral explorer is not legally required to supply.” Affidavit of Raymond M. Housley, supra, at 3, ¶¶ 7, 8. This conclusory allegation of impairment is insufficient to support defendants’ claim of confidentiality under the first prong of the National Parks I test. See Washington Post Co. v. U.S. Department of Health, Etc., 690 F.2d 252, 269 (D.C.Cir. 1982), (conclusory affidavit of agency official provides insufficient factual basis for agency claim of confidentiality under first prong of National Parks I test). See also Orion Research, Inc. v. E.P.A., 615 F.2d 551, 554 (1st Cir.), cert. denied, 449 U.S. 833, 101 S.Ct. 103, 66 L.Ed.2d 38 (1980) (conclusory allegations by agency of impairment to obtain similar information in future — not “plausibly supported in some detail” — are insufficient).

Finally, this court notes that any fears entertained by the Forest Service that disclosure of the drill hole data will likely impair its ability to obtain similar information in the future can be remedied by amending 36 C.F.R. § 228.4(c) to specifically require inclusion of the precise drill hole locations, numbers and depths. In this way the Forest Service can condition the approval of a mineral explorer’s operating plan on the submission of precise drill hole data. See Comstock International v. Export-Import Bank of U.S., 464 F.Supp. 804, 809 (D.C.D.C.1979) (agency’s fears that disclosure of certain progress reports will impair ability of agency to obtain similar, candid information in future may be valid but if so, agency can remedy problem by making reporting requirements more specific.)

B.

Under the second prong of the National Parks I test for confidentiality, defendants must present “specific factual or evidentiary material,” Pacific Architects and Engineers, Inc. v. Renegotiation Board, 505 F.2d 383, 385 (D.C.Cir.1974), establishing that (1) Union Carbide “actually face[s] competition, and (2) substantial competitive injury would likely result from disclosure.” National Parks and Conservation Association v. Kleppe, 547 F.2d 673, 679 (D.C.Cir. 1976) (National Parks II).

The Court in relation to these two elements “need not conduct a sophisticated economic analysis of the likely effects of disclosure.” Public Citizen Health Research Group v. F.D.A., 704 F.2d 1280, 1291 (D.C.Cir.1983). However, “[c]onclusory and generalized allegations of substantial competitive harm ... are unacceptable and cannot support an agency’s decision to withhold requested documents.” Id.

Defendants in support of their motion for summary judgment on the second prong of the National Parks I test present this court with no evidence other than two affidavits signed by officials of the Forest Service. The affidavit of Kenneth Small-wood, a geologist in the Forest Service, states:

[T]he confidential information could, if released, clearly cause competitive harm to [Union Carbide]. This is because trained persons after acquiring information on proposed drillhole locations, spacings, and the planned hole-depths, have thereby gained clues as to the results of preliminary work and of possible economic potential. That is, an increasing density of drillholes indicates that an ore deposit of apparent economic value has been discovered and its extent is being defined.
Competitors, then, with a knowledge of the density and depths of drill-holes and their alignment can project possible ore trends both laterally and vertically. They can proceed to locate claims along these projections. Thus, competitors may gain control over a substantial part of the mineral resources at the expense of the company doing the initial work.

Affidavit of Kenneth K. Smallwood at 4-5.

Likewise, the affidavit of defendant Raymond Housley, Associate Deputy Chief, U.S. Forest Service, declares:

[I]t is my opinion that release of the requested data would place [Union Carbide] in an extremely vulnerable, and consequently risky position with regard to competitors in the industry. Because categorical legal rights to the minerals being sought have not attached to these explorers, other interested companies could still locate claims within the same areas subject to this action. Such companies would have great advantage in knowing the locational information obtained by [Union Carbide] because they would be saved the expenditure and effort, and still could proceed rapidly with locations to mineral claims.

Affidavit of Raymond M. Housley at 3, ¶ 6.

After carefully reviewing these affidavits the court is unable to conclude that defendants have met their burden of proof by specific factual or evidentiary material that: (1) Union Carbide faces actual competition, and (2) Union Carbide would likely suffer substantial competitive harm from disclosure. For the most part, these affidavits contain conclusory and generalized allegations of competitive harm. Cf. Washington Post Co. v. U.S. Dept. of Health, Etc., 690 F.2d at 269. They do not sufficiently apprise the court of the nature and extent of competition in the mineral exploration industry, especially with respect to exploration on public lands, title to which lies in the United States. It is significant that Union Carbide itself has not submitted an affidavit addressing these matters. The affidavits of Smallwood and Housley furthermore fail to conform to the rules governing the form of affidavits submitted in support of a motion for summary judgment. Federal Rule of Civil Procedure 56(e) provides that with respect to a motion for summary judgment “[supporting ... affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.” The Smallwood and Housley affidavits fail to address the issue whether Union Carbide faces actual competition over uranium ex; ploration locations in the Black Hills. To the extent they address the competitive aspects of uranium exploration drilling on public lands, these affidavits are not based on the affiants’ personal knowledge of the industry. Finally, these affidavits fail to show affirmatively that the affiants are competent to testify as to whether disclosure would likely result in substantial competitive harm to Union Carbide.

IV.

Defendants lastly contend that the drill-hole data is exempt from disclosure under exemption nine of the FOIA, which applies to “geological or geophysical information and data, including maps, concerning wells.” 5 U.S.C. § 552(b)(9). There appears to be no relevant case law authority defining the scope of this exemption. Based on the plain language and legislative history of exemption nine, the court concludes that defendants have failed to sustain their burden of proving that the drill-hole information falls within the exemption.

The exemption nine reference to “geological and geophysical information and data” suggests to this court that the exemption applies only to well information of a technical or scientific nature. Moreover, the available legislative history suggests that exemption nine was intended to be limited in scope to scientific or exploratory findings concerning well drillings. A 1966 House of Representatives report declares the purpose of exemption nine as follows:

This category was added after witnesses testified that geological maps based on explorations by private oil companies were not covered by “trade secrets” provisions of present laws. Details of oil and gas findings must be filed with Federal agencies by companies which want to lease Government-owned land. Current regulations of the Bureau of Land Management prohibit disclosure of these details only if the disclosure “would be prejudicial to the Government” (43 CFR, pt. 2). Witnesses contended that disclosure of seismic reports and other exploratory findings of oil companies would give speculators an unfair advantage over the companies which spent millions of dollars in exploration.

H.R.Rep. No. 1497, 89th Cong.2d Sess. 11 (1966), U.S.Code Cong. & Admin.News 1966, p. 2418, reprinted in Freedom of Information Act Source book: Legislative Materials, Cases, Articles, Subcomm. on Administrative Practice and Procedure of the Comm, on the Judiciary, 93d Cong. 2d Sess. 32 (1974).

Plaintiff seeks to discover only the number, locations, and depths of Union Carbide’s proposed exploration drill-holes. This sort of information falls short of the technical and scientific information envisioned by Congress. In keeping with the command that FOIA exemptions be construed narrowly, the court concludes that the drill-hole information falls outside exemption nine.


author: GESELL, District Judge.

text:
    William E. HOLMES, et al., Plaintiffs, v. LEON N. WEINER & ASSOCIATES, INC., Defendant.
    Civ. A. No. 81-1239.
    United States District Court, District of Columbia.
    Jan. 7, 1985.

      Dana Lee Dembrow, Howard M. Rensin, Hyattsville, Md., for plaintiff.
    Roger S. Mackey, Rockville, Md., for intervening plaintiff.
    David F. Grimaldi, Washington, D.C., for defendant.
   MEMORANDUM

GESELL, District Judge.

This diversity suit for negligence was brought by a construction worker injured in a job site accident. His cause of action is brought under the District of Columbia Workers’ Compensation Act of 1928, D.C. Code § 36-501 et seq. (1973 ed.) (“the 1928 Act”), which while in effect made applicable to the District the Longshoremen’s and Harbor Workers’ Compensation Act, 33 U.S.C. § 901 et seq. The case is before the Court on defendant’s renewed motion for summary judgment.

The uncontested facts are that plaintiff William Holmes at the time of the accident was an employee of Blake Construction Co., and that Leon N. Weiner & Associates was the general contractor on a project for which Blake was the principal subcontractor of Weiner. It is also uncontested that Blake paid the premiums for workers’ compensation insurance for its employees, a policy under which the plaintiff duly filed for and received compensation.

Weiner contends that plaintiff’s third-party action must be dismissed because as a general contractor it is immune under sections 4(a) and 5(a) of the Longshoremen’s Act as applied to the District by the 1928 Act. In WMATA v. Johnson, — U.S. —, 104 S.Ct. 2827, 81 L.Ed.2d 768 (1984), the Supreme Court held that “[s]o long as general contractors have not defaulted on [their] statutory obligation to secure backup compensation for subcontractor employees, they qualify for § 5(a)’s grant of immunity.” Id. at 2836. This Court applied Johnson under circumstances similar to the instant case, holding that subcontractors who had not defaulted on their contingent liability under the statute, even though that liability had never been triggered by a subcontractor’s default on its insurance obligations, were entitled to the immunity recognized by the Supreme Court. In re Metro Subway Accident Referral, Misc. No. 82-306, Memorandum Opinion at 5 (D.D.C. Sept. 19,1984).

The instant case is likewise controlled by Johnson. Weiner had a contingent obligation to Blake’s employees, including plaintiff Holmes. It did not default on that obligation because Blake from the outset met its duty to provide insurance coverage for its employees injured on the job. Plaintiff’s contention that Weiner can obtain immunity only if it shows it actually paid for the workers’ compensation coverage of Blake’s employees is irrelevant, because under Johnson a general contractor obtains immunity even if its contingent liability is never invoked and even if it never obtains or pays for the coverage of its subcontractors’ workers, so long as the subcontractor meets its obligation under the 1928 Act to provide insurance.

The defendant’s motion for summary judgment therefore must be granted.

      . Plaintiffs injury occurred in 1979. Workers injured after 1982 are subject to the new D.C. workers’ compensation statute, D.C.Code § 36-301 et seq. (1981 ed. & 1984 supp.).

      . Defendant first moved for summary judgment in January 1984. The motion was denied by Judge Hart on the ground that material facts remained in dispute as to who was the employer of the alleged tortfeasor employee. The case was reassigned to this Court, further facts were developed, and the motion was renewed on grounds set out below that were not considered by Judge Hart. Action on the renewed motion was delayed pending the decision discussed in footnote 4 below.

      . Article 16.4 of the construction contract between 1120 Vermont Ave. Associates as owner and Weiner as contractor provided that "Blake Construction Co., Inc. will act as the Construction Manager for the Work and will represent the Contractor with regard to all aspects of the project administration. The Construction Manager will coordinate the work.” There was no written contract between Weiner and Blake.

      . Congressional concern over the application of Johnson nationwide does not affect this case. In a subsequent opinion in the Metro Subway multi-case docket, Judge Pratt of this Court held that the September 28, 1984 amendments to the Longshoremen’s Act, Pub.L. No. 98-426, that effectively overruled Johnson did not apply to the 1928 D.C. Act. In re Metro Subway Accident Referral, Misc. No. 82-306, Memorandum Opinion (D.D.C. Dec. 18, 1984). Since the complaint herein was brought under the 1928 Act, which expired before Congress amended the federal statute in 1984, Johnson still provides the controlling interpretation of the statutory language applicable here.


author: HAROLD H. GREENE, District Judge.

text:
    Eleanor JEHLE, Plaintiff, v. Margaret M. HECKLER, Defendant.
    Civ. A. No. 83-1189.
    United States District Court, District of Columbia.
    Jan. 9, 1985.

      Joseph B. Scott, William S. Aramony, Kator, Scott & Heller, Washington, D.C., for plaintiff.
    Diane M. Sullivan, Asst. U.S. Atty., Washington, D.C., for defendant.
   MEMORANDUM ORDER

HAROLD H. GREENE, District Judge.

Plaintiff, a female employee of the Department of Health and Human Services, filed this action alleging that the defendant had breached a personnel agreement to settle her grievances and had violated the Equal Pay Act, 29 U.S.C. § 206. Plaintiff sought retroactive promotion to a GS-14, backpay, liquidated damages, injunctive relief to enforce the agreement, and reasonable costs and attorney’s fees.

On March 8,1984, the parties agreed to a partial settlement: plaintiff withdrew the breach of contract claim and defendant agreed to pay plaintiff a sum of backpay and liquidated damages for the period between June 1980 to November 1981, and attorney’s fees through January 3, 1984. Cross-motions for summary judgment were to be and have been filed on the remaining issues in this case, all of which relate to the Equal Pay Act. These motions are now before the Court.

The principal facts of the case are undisputed. Plaintiff has been employed as a GS-345-13 Program Analyst in the Office of Legislation and Policy, Health Care Financing Administration, of the Department of Health and Human Services since June 1980. From that time on until November 1981, one Robert Logan was employed as a GS-345-14 Program Analyst in the same Office. According to the parties’ stipulation, plaintiff and Logan “performed substantially equal work under similar working conditions, during the time-period June 1980 to November 1981 and that plaintiff continues to perform substantially the same work as she did from July 1980 to November 1981.” It was also stipulated that “Logan left in November 1981 and has performed work substantially different from plaintiff.”

Logan’s position was originally a GS-13, but in January 1981, the position was subjected to an audit and, as a result of that audit, it was classified retroactively to a GS-14. However, an audit of plaintiff’s job in April 1981 resulted in a GS-13 position description.

The issues to be decided in this case are (1) whether defendant’s refusal to pay plaintiff at the GS-14 rate constitutes a continuing violation of the Equal Pay Act even though there is presently no male in the office receiving the higher salary, and (2) if the answer is in the affirmative, what remedy is appropriate.

I

As noted, the parties have stipulated that a male employee received higher pay than a female employee performing substantially equal work under similar working conditions from June 1980 to November 1981. The defendant has offered no legitimate justification for this pay discrepancy, and a violation of the Equal Pay Act for the period of June 1980 to November 1981 is thus established. Indeed, the question of liability for this time period was resolved in the partial settlement and is therefore no longer before the Court. Rather, the question now is whether Logan’s departure in November 1981 “cures” the Equal Pay Act violation. The Court concludes that it does not.

The Department of Labor has issued regulations directed at enforcing the Equal Pay Act which clearly state that violations of the Act are not limited to jobs performed concurrently by employees of both sexes. According to these regulations, payment of a lower wage rate based upon sex for equal work is a prohibited wage differential even “if all employees of one sex are removed from a particular job (by transfer or discharge) so as to retain employees of only one sex in a job previously performed interchangeably or concurrently by employees of both sexes.”

This appears to be exactly the situation presented in this suit. A violation of the Act occurred when plaintiff and Logan performed substantially equal work but plaintiff was paid at a lower rate. Logan has since departed, leaving only female employees to perform the identical work, and plaintiff, in fact, continues to perform substantially the same work without any increase in pay to the Logan level. The purpose of the statute, the language of the regulation, and common sense lead the Court to conclude that the Equal Pay Act violation is continuing and will continue until plaintiff receives the same pay that Logan received for performing substantially equal work. But see p. 127 infra.

II

An employer who violates the Equal Pay Act is liable to the employee in the amount of unpaid wages, and plaintiff therefore clearly has a right to recover the difference in salary between that paid to her since November 1981 and that which she would have received had she been a GS-14.

Beyond that, the employer may be liable for an additional, equal amount of liquidated damages. The Court has discretion not to award liquidated damages if the employer shows that the act or omission giving rise to the action was done in good faith and that he had reasonable grounds for believing that his act or omission was not a violation. The Court finds that liquidated damages are not appropriate in this case. There is no evidence that the Department of Health and Human Services was doing anything other than following what it regarded as routine classification regulations. There likewise is no evidence that the Department persisted in its course of conduct after it had become apparent, as a result of court or administrative decision, that such a course was improper. There is therefore no basis for liquidated damages.

III

Plaintiff also seeks promotion to a GS-14 position, claiming that only a promotion will remedy the continuing violation of the Equal Pay Act. Defendants respond that the Act does not explicitly provide for the remedy of a promotion, and that the Court is therefore limited to awarding backpay and liquidated damages.

As stated above, defendants are continuing to violate the Equal Pay Act, and plaintiff’s claim for relief accrues each pay period, that is, whenever she receives the lower salary for substantially equal work. If defendants’ theory were correct, plaintiff could remedy the violation only by filing new lawsuits every two weeks, or, in the alternative, this Court would have to retain jurisdiction over the action and make continual backpay awards. Such a process clearly conflicts with the need for judicial economy and it imposes an unreasonable and unnecessary burden on plaintiff. Furthermore, since the Court has the authority to award liquidated damages and attorney’s fees, this process would ultimately be more expensive for the government than an order requiring the promotion of plaintiff to a GS-14. Accordingly, in order to provide plaintiff with a complete remedy, the Court orders her promotion to a GS-14.

It should be noted that the government has not argued that Logan’s position was overgraded. If in the course of a bona fide full-fledged classification review, it is ultimately determined that the position should be classified at a different GS-level, the government may prospectively change the position rating. But until there has been a classification review, plaintiff is entitled to the rating which has been established, for this position at least for Equal Pay Act purposes, by the classification awarded to Logan, the male employee — a GS-14.

      . Plaintiff disputes the characterization of the April audit, claiming that it was not a full-fledged desk audit.

      . Coming Glass Works v. Brennan, 417 U.S. 188, 195, 94 S.Ct. 2223, 2228, 41 L.Ed.2d 1 (1974); Hodgson v. Behrens Drug Co., 475 F.2d 1041, 1049 (5th Cir.1973); Schultz v. Wheaton Glass Co., 421 F.2d 259, 265 (3d Cir.1970). See also 29 C.F.R. § 800.122 (1984).

      . These regulations are, of course, entitled to deference here. See Laffey v. Northwest Airlines, 567 F.2d 429, 449 (D.C.Cir.1976).

      . The regulation goes on to state that "if a prohibited sex-based differential had been established or maintained in violation of the Act when the same job was being performed by employees of both sexes, the employer's obligation to pay the higher rate for the job cannot be avoided or evaded by the device of confining the job to members of the lower paid sex. Compliance with the Act in such circumstances can be achieved only by increasing the wage rate to the higher rate paid for the job when performed by employees of the opposite sex." 29 C.F.R. § 800.114(c).

      . The statute of limitations does not operate to bar or limit recovery in this case. The parties have settled with respect to the Equal Pay Act violations which occurred between June 1980 and November 1981. The violations before this Court are those which occurred from November 1981 to the present time. In such circumstances, a violation occurs each pay period when plaintiff is paid less than a male employee for the same work. Jenkins v. Home Insurance Co., 635 F.2d 310 (4th Cir.1980).

      . 29 U.S.C. § 216(b). Attorney’s fees and costs are also allowed. 29 U.S.C. § 216(b).

      . 29 U.S.C. § 260.

      . The usual procedure for challenging a reclassification would then be available to an aggrieved employee.