author: GILES, District Judge.

text:
    Hugh M. SINCLAIR, v. INSURANCE COMPANY OF NORTH AMERICA and INA Corporation.
    Civ. A. No. 83-2649.
    United States District Court, E.D. Pennsylvania.
    Oct. 31, 1984.
    On Counsel Fees and Costs March 28, 1985.

      John C. Wright, Montgomery, McCracken, Walker & Rhoads, Philadelphia, Pa., for Hugh M. Sinclair.
    Francis M. Milone, Morgan, Lewis & Bockius, Philadelphia, Pa., for CIGNA & INA Corp.
   MEMORANDUM

GILES, District Judge.

After a trial on liability and all back pay issues, a jury answered special interrogatories finding that the plaintiff was separated from the defendants’ employ because of his age and that the termination was willful in violation of the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. (“ADEA”). The court now must mold the verdict, fashioning an equitable, “make whole” remedy.

Reinstatement

Considering all the evidence presented, I conclude that reinstatement is appropriate. No evidence was adduced that CIGNA Corporation harbors such hostility towards plaintiff that it would either-be futile or unfair to order reinstatement. The defendants’ corporate officer who terminated plaintiff, Mr. Heth, is retired. Moreover, at trial, both plaintiff and Mr. Heth, testified that they had been friends for many years. The jury’s finding of a willful violation means no more than that the defendants’ consideration of age as a determining factor in the termination was voluntary. Its finding does not equate to a finding of malice or employer hostility.

There was evidence that when the CIGNA merger came about, Mr. Heth or other óf defendants’ officials strongly urged plaintiff to retire voluntarily under the companys’ early retirement plan at age 55. The merger gave Mr. Heth, who became responsible for the elimination of duplicative and inefficient jobs, the opportunity to eliminate plaintiff’s position. The evidence suggests that had plaintiff not been eligible for early retirement, his job title would not have been eliminated. His position was not duplicative of any in the merged Connecticut General Insurance Company. Plaintiff was president of a small subsidiary of INA, responsible for the management of no more than six persons. His duties were not eliminated but delegated to others in the subsidiary and the parent company. Mr. Heth testified that he felt plaintiff was not happy with his work. Consequently he was firmly convinced that it was in the plaintiff’s and company’s best interests for plaintiff to retire early and suggested this to plaintiff as a friendly gesture. Plaintiff was given the opportunity to make other employment plans, given severance pay of one year’s salary and has received pension benefits totalling $33,586.00 from the date of separation to the present. Consequently, defendants’ actions causing plaintiff to leave the company was not with the kind of animosity which would compel a court to abandon the normal remedy for illegal discharge — reinstatement.

Defendants advised the court and plaintiff before and during trial that they would make an offer of reinstatement to a comparable job and salary should the jury determination be adverse. Likewise, before trial, plaintiff apprised the court that he would accept reinstatement to a comparable position. There was no evidence presented at trial that a comparable job no longer exists within CIGNA for which plaintiff is qualified. The court will retain jurisdiction to assure that the job offered is comparable should defendants elect not to return plaintiff to the position he last held. Reinstatement having been determined appropriate, plaintiff’s claims for future damages are deemed moot.

Back Pay

A victim of age discrimination is entitled to be made whole, that is, to be returned to the same economic status had there not been discrimination. In this case, plaintiff suffered no monetary loss between the date of termination and the present. It was stipulated that had he remained in defendants’ employ he would have earned $70,850 per year for two years or a total of $141,700 in salary, $3000 in bonuses, $1,500 in tax preparation fees (1983 only), and $1,904.99 in matched savings, for a total anticipated wage — covering the period October, 1982 through October, 1984 — of $148,104.99 or an average of $74,052.50 per year.

Plaintiff experienced no hiatus in securing other employment. From his new employer, plaintiff has earned $63,400.62 per year or $126,800.04 for the back pay period. Consequently, plaintiff had a loss of earnings of $10,652.48 per year or $21,304.96 for the two years. Immediately upon leaving the defendants, plaintiff began receiving a severance pay of $70,850.00, spread over the succeeding 52 weeks. The severance pay was not money which the plaintiff would have earned had he remained employed by defendants. It was unearned. Thus, it must be credited against the loss of earnings caused to the employee. Since the $70,850.00 exceeds plaintiffs total loss of earnings of $21,304.96, he has not suffered any back pay loss and would not until the $70,850.00 contribution of the employer was exceeded by interim earning differentials.

Plaintiff asks this court to adopt a year-by-year approach in determining back pay loss, citing Leftwich v. Harris-Stowe State College, 702 F.2d 686, 693 (8th Cir. 1983). In Leftwich, the victim of employment discrimination had suffered earning losses in the first two years following termination. In the third year in his new job, the plaintiff earned an amount which exceeded the past employer’s salary by roughly the sum lost in the first two years. The district court held that under the “make-whole” principle the employee had experienced no loss over the three year period. The Eighth Circuit disagreed and, without explanation, held that “when ... a plaintiff’s interim earnings in any year exceed the wages he or she lost due to the discrimination, that “excess” must not be deducted from any back pay for other years to which the plaintiff is entitled.” This approach may have some utility where a court cannot be certain that the subsequent year excess earnings were attributable to cost of living increases or some other factor which would negate any real excess earnings. This situation is not present in this case. Because applying Leftwich here would result in a departure from the “make-whole” principle, I will not follow it.

Even if I did follow Leftwich, its rule would not aid plaintiff here. Defendants have given plaintiff $70,850.00 in severance dollars. In Leftwich, there was no severance pay and a loss of earnings. In the instant case, by reason of the termination, plaintiff received a gain of $60,-197.48 in the first year over what he would have earned in salary had he remained employed by defendants. Plaintiff argues that he should be allowed to keep this under the Leftwich decision and still claim for a wage differential in the second year. I disagree. That rule on its face applies only to wage differentials. It anticipates that the employee will have received a loss by reason of the termination, not a gain. In applying the Leftwich rule, by its terms, it would be incongruous to treat severance pay as wages which the employee lost due to the discrimination. Had he remained employed he would not have received severance pay. Since the severance pay cannot be deemed earnings for back pay purposes, it must be treated as a voluntary contribution by the employer and credited against the employer’s back pay liability. In short, plaintiff has misread and misapplied Leftwich. As of the time of trial, two years after termination by defendants, plaintiff still had a gain of $49,545.04. This court is guided by Rodriguez v. Taylor, 569 F.2d 1231 (3d Cir.1977), cert, denied, 436 U.S. 913, 98 S.Ct. 2254, 56 L.Ed.2d 414 (1978). The Third Circuit has stated:

The make-whole standard of relief should be the touchstone for the district courts in fashioning both legal and equitable remedies in age discrimination cases. Victims of discrimination are entitled to be restored to the economic position they would have occupied but for the intervening unlawful conduct of employers.

569 F.2d at 1238. While defendants are entitled to use of the $70,850 as credit against their back pay liability, plaintiff will not have to disgorge his “gain” as a condition of reinstatement.

Because the credit exceeds the back pay claim by $49,545.04, plaintiff is not entitled to a back pay award. Consequently, plaintiff is not entitled to any liquidated damage sum. He is entitled to reasonable counsel fees and costs.

An appropriate order follows.

JUDGMENT ORDER

AND NOW, this 31st day of October, 1984, in accordance with the foregoing Memorandum, it is hereby ORDERED that Judgment is entered in favor of plaintiff and against defendants, to wit:

1. Defendants shall reinstate plaintiff within ten (10) days of the entry of this Order to the same job that he held before termination or to a comparable job.

2. Defendants shall restore plaintiff to the seniority, salary and benefit levels that he would have attained but for the termination.

3. Defendants shall restore plaintiff fully to the rights under the pension and disability plan without diminution for any interim early retirement payments which may have been received to date.

4. Pay to plaintiff reasonable counsel fees and costs in an amount to be determined.

ON COUNSEL FEES AND COSTS

In this case brought under the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. (ADEA), plaintiff seeks counsel fees and costs as the prevailing party. A jury found that plaintiff was the victim of age discrimination and that the discrimination was willful. The court molded a verdict for back pay and reinstatement. However, back pay was not part of the judgment because plaintiff received severance pay from defendants and interim pay from other comparable employment after his employment with defendant ended. Thus, plaintiff sustained no actual monetary loss despite the discharge.

The court will determine reasonable counsel fees and costs in accordance with the standards established in Lindy Brothers Builders, Inc. v. American Radiator & Standard Sanitary Corporation, 487 F.2d 161, 167-69 (3d Cir.1973) (Lindy I) and Lindy Brothers Builders, Inc. v. American Radiator & Standard Sanitary Corporation, 540 F.2d 102, 112-118 (3d Cir.1976) (Lindy II) and as reiterated in Ursic v. Bethlehem Mines, 719 F.2d 670 (3d Cir.1983). The essential factors to be determined are the hours reasonably devoted by counsel to the prosecution of the claim, the hourly rate of the- attorneys, the extent to which the plaintiffs claim is contingent and the quality of the attorney’s work. Once a “lodestar” figure has been derived by multiplying the hours reasonably spent on the matter times the applicable hourly rate, the court must then consider whether the “lodestar” should be increased or decreased by examining the quality of counsel’s efforts and the contingency of the claim.

Plaintiff’s counsel seek a “lodestar” determination of $65,090.72 for lawyer time adjusted upward by a factor of two, or $130,181.44, together with $5,050.50 for paralegal services and $8,105.87 in costs for a total of $143,337.81. Defendants respond that the claim for fees is grossly excessive for work that was unnecessary and the costs unjustified. I agree. The counsel fee claim reflects work in four principal areas which were unnecessary and contrary to reason and/or law: (1) demands for statistical information far beyond a scope reasonably calculated to lead to the discovery of evidence needed to prove the claim of individual discrimination; (2) efforts to have admitted certain newspaper or periodical articles contrary to the clear rules of evidence; (3) efforts undertaken to pursue a claim for future loss of earnings to be submitted to the jury or as part of the damage calculation by the court despite the outstanding offer of reinstatement by defendants should the jury verdict be adverse to them and plaintiff’s stated desire to accept such an offer should he prevail; and (4) counsel’s arguments, contrary to law, that the voluntary severance payments received by plaintiff should not be set off against the back pay claim. These efforts were, for the most part, not reasonable and comprise a very substantial part of the “lodestar” claim.

Hugh Sinclair was an executive with the INA defendants. At the time of his discharge, he was the president of a wholly owned subsidiary of INA which had less than five employees. This subsidiary was devoted to the underwriting of political risk insurance. Defendants stated that the reason for plaintiff’s termination was a merger of the INA defendants with Aetna Casualty Insurance Company to form the CIGNA Corporation which resulted in a reorganization of job responsibilities. Plaintiff’s position was eliminated but his job functions were distributed to others in the subsidiary who were younger. The decision to eliminate plaintiff’s position was made by an INA executive, Mr. Heth, who received complaints from plaintiff’s subordinates about his lack of managerial skill. He never confronted plaintiff with the accusations. Mr. Heth had, prior to plaintiff being asked to assume the presidency of the political risk subsidiary, suggested to plaintiff that he elect early retirement under the companys’ pension plan rather than continue in employment. Mr. Heth testified that plaintiff appeared to be unhappy because of previous company assignments. The jury could have found that rather than confront and attempt to address a managerial problem, in part created by the defendants giving plaintiff’s subordinates’ conflicting authority, Mr. Heth elected to force plaintiff into early retirement by eliminating his job and determining that there was no comparable job to which he could then move in the company.

Plaintiff characterized certain statements made to him by INA executives as illegal age commentary indicative of discriminatory intent. He also referenced as evidence of discriminatory intent, a car bumper sticker which read, “It’s Nifty Not to be Fifty,” observed on the desk of the head of the personnel department. Lastly, plaintiff’s counsel had available to him, through discovery, the tape recording and transcript of a speech given by the president and chief executive officer of INA to employees regarding the difficulties of effectuating a massive reduction in the workforce. In the speech, the executive stated, in effect, that the company would be prepared to discriminate on the basis of age in favor of persons protected under the ADEA even though persons in the non-protected group might be more qualified. A trade periodical reported that the executive, Cox, had stated just the opposite; that is, that in eliminating jobs, the company would give preferential treatment to persons under forty. Plaintiff’s efforts to have the trade periodical admitted into evidence were unsuccessful. The jury decided that plaintiff’s age played a real part in the decision to eliminate the job. This decision was supported by evidence that the defendants had arguably forced plaintiff to elect early retirement for which he was then qualified because of his age.

A review of plaintiff’s fee petition reveals that excessive time was spent on matters that reasonably could have been accomplished in substantially less time by experienced trial counsel. It also reveals that plaintiffs counsel spent considerable time pressing matters on which unreasonable positions were taken or which were simply contrary to law. Mr. Wright, plaintiff’s lead counsel, professed expertise in the field of unemployment discrimination cases which is attested to by his claimed rate of $115.00 per hour until 5/1/84 and $125.00 per hour thereafter. This court will not quarrel with the claimed hourly rates. However, having accepted the rates as indicators of competency and efficiency, this court must scrutinize, in that light, the work actually done. At my direction, plaintiff’s counsel submitted a revised fee petition which summarizes, by category of work performed, the hours devoted by each attorney and the reasons for the time expended.

1. Plaintiffs Answers to Defendant’s First Set of Interrogatories — ($1,851.00)

Plaintiff claims a total of 47.7 hours or $2,978.50 in answering defendant’s first set of interrogatories. Mr. Wright spent 2.8 hours at $115.00 per hour and his associate, Mr. Gelwan, spent 45.5 hours at $55.00 per hour and 2.2 hours at $70.00 an hour. Although it includes conferences between plaintiff and counsel, this amount of time is excessive. The questions directed to plaintiff were not so complicated as to have reasonably taken over four full days for any competent attorney to record the answers of the client. I shall reduce the 45.5 hours claimed through Mr. Gelwan to 25 hours at $55.00 per hour. Accordingly, plaintiff is entitled to $1,375.00 + $154.00 + $322.00 or $1,851 in this category of work.

2. Plaintiffs First Set of Interrogatories to Defendants — ($2,415.00)

Almost twenty-one hours (20.9 hours) were spent by Mr. Wright in drafting plaintiff’s first set of interrogatories. A senior associate of Mr. Wright’s, Mr. Goldich, spent 0.2 hours on this endeavor. Defendants argue that 21.1 hours of time expended by Mr. Wright and Mr. Goldich to draft interrogatories was excessive. Defendants .object that given the limited nature of the individual claim and the expertise of counsel, the interrogatories propounded should have been drafted in much less time. Plaintiff responds that the case was originally thought to have a broader scope since initially there was reason to believe that plaintiff was the victim of age discrimination against a group of managers similarly situated. Although I tend to agree with defendants, I will accept as reasonably necessary this initial investment of time by counsel to study, explore and test the first theories of the age discrimination claim. During this period of time, counsel learned specific information from his client and defense counsel which should have served to focus the thrust of pertinent formal discovery in the case. Plaintiff will be allowed $2,415.00 ($115. x 21) for this work.

3. Plaintiffs Motion to Compel Answers to Interrogatories (First Set) — ($1,150.00)

Despite discussions in December, 1983 between the principal counsel for the parties as to the scope of the discovery requests, plaintiff’s counsel believed it necessary to file a motion to compel answers to the first set of interrogatories and production of the documents. This motion was opposed by defendants on the basis that not only was the scope of the demanded discovery unreasonable but plaintiffs absolute insistence upon such discovery was wasteful of the resources of all counsel and the court. I agree. Defendants had offered to produce answers and documents as to the substantial surety section of the company with which plaintiff was associated and which employed some 16,000 persons. Plaintiff initially refused this offer. However, the scope of discovery permitted, and agreed upon by plaintiffs counsel at a conference with the court, was almost that proposed by defendants and plaintiffs motion to compel was denied. The time spent in the preparation and research for a motion to compel was not reasonable where amicable resolution could have been reached without resort to the court. Counsel are not to be rewarded when not careful to utilize their best efforts in resolving discovery disputes. Plaintiffs counsel spent 41.7 hours of Mr. Gelwan’s time at $55.00 per hour in preparation of the motion, supporting memorandum and responding to defendants’ answer to the motion. I shall allow only ten (10) hours of Mr. Wright’s time to this endeavor as the reasonable amount of time that would have been necessary to resolve amicably the parties’ discovery. Accordingly, $1,150 is allocated to this aspect of the work as opposed to the $2,293.50 claimed.

4. Plaintiffs Motion to Amend Complaint — ($115.00)

This work entailed a simple statement that the real employers were the INA defendants. A claim of 6.3 hours has been made. This is excessive. One hour of Mr. Wright’s time, or $115.00, is allowed.

5. Attendance at and Preparation for Depositions — ($5,4 71.50)

The claim encompasses seven depositions. Mr. Wright devoted 40.5 hours of his time in travel to and from the depositions and preparing for and attending the same. Mr. Gelwan devoted 24 hours generally to the effort. Mr. Gelwan’s time appears duplicative to a large extent of Mr. Wright’s time. I will reduce the associate time by one-half. Accordingly, the award for this aspect of the work is $5,471.50. [Mr. Wright (27.5 x $115) = $3,162.50 + (13 X $125 = $1,625.00 + Mr. Gelwan (10.4 X $55) = $572.00 + (1.6 X $70) = $112.00],

6. Plaintiffs Motion to Modify Pretrial Schedule — ($125.00)

Claim is made for 9.2 hours of associate time and 0.8 hours of partner time in the preparation and filing of a motion for a continuance of the dates of the pretrial schedule. This could have been done in one hour of partner time. Accordingly, $125.00 is allocated.

7. Plaintiffs Proposed Jury Instructions — ($704- 00)

Plaintiff claims a total of 31.8 hours in the preparation of proposed jury instructions. A review of the proposed instructions reveals that they were “boiler plate.” The only novel proposed instructions consisted of erroneous requests to have the jury assess future damages, a matter committed to the sound equitable discretion of the court. Accordingly, the court finds that the claimed time is excessive and was unnecessary given the work product. Mr. Wright claims 3.4 hours, Mr. Gelwan 22.2 hours, Ms. Otero, a summer associate, 3.4 hours, and Mr. McCoyd, a summer associate, 2.8 hours. Only Mr. Wright’s 3.4 hours and the hours of Ms. Otero and Mr. McCoyd will be allowed. [ (3.4 x $125) = $425.00 + (3.4 x $45) = $153.00 + (2.8 X $45) = $126.00]. This comes to a total of $704.00.

8. Proposed Stipulations of Fact — ($170.00)

Plaintiff’s counsel spent 1.8 hours in this endeavor and claim $170.00. This amount will be allowed.

9. Joint Proposed Pretrial Order — ($3,673.50)

Plaintiff claims a total of 48.9 hours, 5.1 by Mr. Wright, 42.6 by Mr. Gelwan and 1.2 by Ms. Otero. Defendants object to the time claimed because allegedly plaintiff’s counsel failed to comply with the court’s scheduling order which set the date by which the opposing counsel were to meet, confer and prepare the joint proposed pretrial order. Further, defendants contend that because of plaintiff’s delay, there were needless, numerous drafts of the document. Plaintiff’s counsel vehemently denies that there. was any delay or extra work occasioned by lack of preparedness. The hours devoted to this task appear out of proportion to the undertaking. Mr. Gel-wan’s time charges span the period of May 30, 1984 through August 23, 1984. However, I cannot say with any assurance that the circumstances of the case did not reasonably require the time spent. - Therefore, I will allow the claim of $3,673.50 for this work.

10. Second Set of Interrogatories — ($456.00)

The claim of time for preparation of the second set of interrogatories ($456.00) will be allowed since they generated pertinent information from the defendants.

11. Motion to Compel Answers to Interrogatories (Second Set) — (0.00)

The claim of $1,801.50 for preparing a motion to compel answers to one of the interrogatories, will be disallowed. The statistical evidence sought was irrelevant and untimely sought.

12a. Future Damages Research and Memorandum — ($0.00)

Plaintiff unsuccessfully urged the theory that he was entitled to a jury or court monetary award for back pay until his retirement age of 65. This was so, even though plaintiff, in his new employment, held a position of comparable pay, greater responsibility and potentially greater salary growth than the position he held at INA. This is borne out by plaintiff’s willingness, despite the order of reinstatement, to retain his new position. The time spent on this issue was unnecessary in view of the established law that reinstatement should be ordered unless the work environment at the former employer is so hostile as to make reinstatement unrealistic. In this case, CIGNA had made it clear that if the plaintiff prevailed, it would offer reinstatement to a position comparable to that which he held prior to termination. Plaintiff had voiced a willingness to accept. At trial there was no proof of a hostile work environment that would preclude reinstatement. Consequently, the considerable work done by plaintiff’s counsel on the claim for future damages was unnecessary and, therefore, unreasonable. The claim of $1,206.00 for work on a memorandum in this regard will be disallowed.

12b. Memorandum re Offset of Pension Benefits and Severance Pay — ($0.00)

Plaintiff claims $1,008.00 (14.4 hours of Mr. Gelwan’s time) for citing to this court a Third Circuit opinion, McDowell v. Avtex Fibers, Inc., 740 F.2d 214 (3d Cir.1984) for the proposition that prejudgment retirement benefits cannot be deducted from a damage award under the ADEA.

From Avtex, plaintiff attempted to argue that severance payments likewise should not be set off. This legal argument was contrary to the language of Avtex and the existing law of the Third Circuit with respect to the set off of interim earnings. The severance payments were voluntary substitutes for which plaintiff would otherwise have had to work. Because the interpretation of Avtex urged by plaintiff was unreasonable, the claim for $1,008.00 will be disallowed.

12c. Post Verdict Memorandum on Damages — ($1,076.50)

Plaintiff claims counsel fees of $1,076.50 for posttrial work performed at the direction of the court relative to calculation of damages. This time was reasonable and will be allowed.

13. Answer to Defendants’ Motions to Preclude Testimony of Experts — ($0.00)

Plaintiff claims $1,299.00 related to opposing a motion of defendants to preclude certain expert testimony where, upon reflection, plaintiff decided not to call any experts after all. Had there been reflection before opposing the motion, the written response would not have been necessary. Moreover, a benefits expert was hardly necessary to cover the defendants’ benefits package. The parties were able to stipulate to the pertinent perquisites. This claim is disallowed.

14. Interviewing and Preparing Expert Witnesses — ($1,030.00)

The claim of $114.00 relative to the statistical expert and $916.00 as to the benefits expert will be allowed since these interviews apprised counsel that presentation of such testimony was unnecessary or unsupported by the state of the statistical record.

15. The Insurance Advocate Article — ($0.00)

Plaintiffs counsel’s efforts relative to attempting to win admissibility of this trade article were unwarranted since inadmissibility was clear. There was no legitimate purpose articulated for its use — it was hearsay and a misstatement of the Cox speech, defendants were under no duty to rebut its misstatements, and plaintiff had a tape recording and transcript of the speech, whose admissibility defendants did not question. The claimed time of $1,014.50 will be disallowed.

16. Trial Preparation and A ttendance — ($7,556.00)

The time claimed for trial preparation and attendance is reasonable and will be allowed except as to 10 hours of Mr. Wright’s time and 10 hours of Mr. Gel-wan’s which was at a minimum devoted in this regard needlessly to admissibility of the Insurance Advocate article. Therefore, from the claim of $9,506.00 will be deducted $1,250 (10 X $125) + $700.00 (10 X $70) or $1,950.00, leaving $7,556.00.

17. Responses to Defendants’ Post Trial Motions — ($3,729.00)

Plaintiff claims 47.1 hours by Mr. Gel-wan to reply to defendants’ motion for judgment notwithstanding the verdict; 5.1 hours by Mr. Gelwan to respond to a motion for relief from judgment and 0.6 by Mr. Wright for review of defendants’ appeal. This time is considered reasonable considering the scope of defendants’ motions and the need to respond. Accordingly, the claim of $3,729.00 is allowed for this work. Plaintiff’s claim for work done in response to defendants’ appeal from the denial of their motion for a judgment notwithstanding the-verdict is premature given that the appeal is still pending. Consequently, an award for this claim will not be allowed.

18. Lodestar

Based upon the foregoing, the court finds that plaintiff’s lodestar is $29,522.50.

19. Quality of Counsel’s Work

The court is of the opinion that the quality of counsel’s work in the case is amply rewarded by the hourly rate and the time allowed. Counsel made the case much more convoluted than it had to be and was, in fact, at trial. The trail of evidence was clear in this individual discrimination case. Counsel’s unjustified positions with respect to certain aspects of law, previously discussed, confused issues and greatly increased the time that had to be expended by the court and opposing counsel. No increase in the fee is warranted. Likewise, no decrease in the lodestar is appropriate since plaintiff did work hard searching among many corporate players and papers for a motive for the termination which showed pretext and his efforts were successful, according to the jury.

20. Contingency

This was a close case on which the jury deliberated many hours. It was in the end, at most, a credibility case. The jury apparently did not believe Mr. Heth’s testimony that plaintiff’s age played no part in his decision to eliminate plaintiff’s position and that plaintiff’s termination resulted from defendants’ overall job reduction in preparation for the merger.

However, the evidence which enabled plaintiff’s attorneys to argue that defendants’ reasons for eliminating plaintiff’s position were pretextual was obvious. There was no job performance evaluation in plaintiff’s file which reflected that he was anything other than a competent manager performing within his scope of authority. Mr. Heth admitted that earlier he had encouraged plaintiff to take advantage of the early retirement program and leave the company because plaintiff appeared not to be happy. Plaintiffs job duties were not eliminated as a result of the merger, but given to younger employees. The decision to eliminate the job title came after plaintiffs managerial subordinates complained to Mr. Heth about plaintiff and asked him to keep the complaints confidential. Mr. Heth had no managerial authority over plaintiff but did have authority to decide what jobs would be essential to retain. He chose to eliminate the plaintiffs job while retaining the management of the company in a person under age 40 who, prior to plaintiffs ascension to the presidency of the small company, had reasonably expected to run it from the beginning of operations and had, indeed, run it. Mr. Heth expressed the opinion, or at least it could be inferred from his testimony, that it was very desirable and important to retain the younger more competent employee. He felt it was likely the younger employee would resign if plaintiff remained. From this scenario, there was a compelling inference that Mr. Heth seized the opportunity to force plaintiff out into early retirement under the guise of job elimination pursuant to the merger plan. I estimate, under this proof, that plaintiff had a contingency of 50% that he would lose. Accordingly, I shall increase the lodestar by a factor of 50% to $44,283.75.

21. Paralegal Work — ($980.00)

The claim of $4,668.00 for paralegal time to digest seven depositions is so excessive as to be fairly called atrocious. At $35.00 per hour this represents about 105 hours of time. The deposition transcripts were each under a hundred pages. The time devoted was duplicative of effort and wasteful of resources. Given the amount of work that had been devoted by the attorneys on preparing for, attending and reviewing the depositions there should not have been need for any paralegal assistance. Perhaps, the most crucial deposition was that of Heth, yet only 4 hours ($140.00) were necessary to digest this deposition. A standard of $140.00 shall be used for each of the paralegal deposition digests. A generous allowance then of $980.00 (7 X $140.00) is made. '

22. Preparation of the Fee Petition — ($2,460.00)

Plaintiff claims for 5.4 hours of Mr. Wright’s, 59.9 hours of Mr. Gelwan’s and 1.1 hours of Mr. Goldich’s time. The claim of $4,978.00 is explained as the value of time necessary to prepare the petition, a brief in reply to defendants’ opposing memorandum, a reply to defendant’s supplemental memorandum and attendance at oral argument. Both Messrs. Gelwan and Wright prepared for and attended the oral argument. Mr. Gelwan’s appearance at oral argument (1.8 hours) was unnecessary and will be disallowed. Plaintiff spent 47.6 hours of Mr. Gelwan’s time in responding to defendants’ answer to the fee petition and to defendants’ supplemental memorandum wherein defendants asked essentially that in view of plaintiff’s resignation from the reinstated position, that he not be considered a prevailing party. These replies were not necessary, or at least, it was not reasonable to have spent this much time responding. Plaintiff was the prevailing party and the fee petition originally submitted encompassed plaintiff’s claim for counsel fees and costs. Some of the points made by defendants in attacking the fee petition were well taken. Indeed, the fee petition was inadequate in description of services in many areas. The court was prompted to direct counsel to submit a revised petition showing the hours spent by task performed without compensation. The alternative would have been to deny the claim substantially for lack of specificity. The time necessary to prepare an adequate petition for counsel fees with supporting memorandum should not have exceeded 28 hours of associate time and 4 hours of partner time to direct and review the work. Accordingly, Mr. Wright’s time is reduced to 4 hours ($125 X 4 = $500.00) and Mr. Gelwan’s to 28.0 hours ($70 X 28 = $1960.00). The claim for fee petition work is reduced to $1960.00 + $500.00 = $2,460.00.

23. Costs — ($3,348.85)

Plaintiff claims costs totalling $8,105.87 for filing fees ($60.00); service of subpoenas ($320.00); witness fees and mileage ($376.25); copying and binding ($1,201.24); telephone and telegraph ($129.27); attorney’s meals ($40.95); deposition transcripts ($1,241.00); expedited trial transcript ($350.00); miscellaneous travel and mileage ($311.68); Lexis research ($1,001.60); delivery service ($61.00); overtime/clerical ($424.83); plaintiff’s travel, meals and miscellaneous costs ($347.05); expert witness fees ($2,241.00). The charge for expert witness fees will be denied because the experts did not testify at trial, their testimony was not reasonably necessary to the prosecution of the case and neither consultant provided information that counsel could not have developed from the known information. The plaintiff’s travel, meals and miscellaneous costs will be disallowed because he elected to bring the lawsuit in this district and it would be unfair to tax as costs his mere inconveniences in that regard. The cost of attorney’s meals will be denied as other than extraordinary expenses. The overtime/clerical costs will be denied as not shown to have been reasonably necessary, especially in view of my findings that plaintiff’s counsel expended unnecessary research and writing time on matters contrary to established principles of law. The telephone and telegraph charges and delivery costs shall be disallowed as not an extraordinary expense. The copying and binding costs are denied for the same reason and because they are not shown to fall within the statutory expenses of photocopying for trial exhibit purposes. The remaining costs for filing fees, deposition and trial transcripts, Lexis research, witness fees and mileage will be allowed. These total $3,348.85.

24. Conclusion

Plaintiff is awarded counsel fees of $44,-283.75, plus $2,460.00 for preparing the fee petition, paralegal fees of $980.00, and costs of $3,348.85. The judgment of October 31,1984 shall be amended to reflect the award of counsel fees to plaintiff in the amount of $47,723.75 and costs of $3,348.85, or a total of $51,072.60.

      . Plaintiff had been employed by defendant INA Corporation. His separation occurred after INA Corporation merged with Connecticut General Corporation to form CIGNA Corporation.

      . At trial, plaintiff failed to produce sufficient evidence from which a jury could have reasonably calculated any salary increases for the years 1982, 1983, and 1984. The parties were unable to stipulate as to the amount of any salary increase. In the record charge conference plaintiff conceded that he presented no evidence at all as to 1984. As to 1982 and 1983, there was some evidence as to salary increase guidelines ranging from 0% to 10%. Largely, any increase, if given, would be subject to company profitability and employee job performance. Plaintiff presented evidence that the insurance industry profits are cyclic or “boom” and "bust” and that 1982 was a "bust” year for defendants. He also presented evidence that apart from age considerations, plaintiff s management abilities in his last job were deficient. Plaintiff presented no evidence as to what other employees holding similar positions received in percent salary increases for 1982 and 1983. There was no evidence that the successor employer gave any wage increases in 1982 or 1983. Therefore, there was no basis for a jury to determine that plaintiff would have received any increase or by what standard any increases awarded should be calculated. Even if he had received a 10% increase in each of three years, there still would not be any back pay award.

      . The Leftwich rule may assure that employers do not benefit from employee’s "excess” earnings. However, in my opinion, it has an overriding disadvantage of discouraging mitigation.

      . This figure was achieved by adding the $63,-400.02 plaintiff received as a salary the first year and the $70,850.00 plaintiff received as severance pay for a total of $134,250.02 and then subtracting the $74,052.50 plaintiff would have received had he remained in defendants’ employ.

      . This sum was derived by calculating plaintiff s salary loss per year $10,652.48 ($74,052.50 minus $63,400.02) or $21,304.96 for the two year period from the date of termination through October, 1984 and then subtracting the $21,-304.96 from the $70,850.00 plaintiff received as severance pay.

      . Plaintiff has also received $33,586.00 in early retirement benefits. This sum has not been considered in calculating back pay. Nor will it be returned to the employer directly or indirectly as a set-off against future retirement or disability benefit entitlements.


source: Caselaw Access Project

author: IRVING, District Judge.

license: Public Domain

text:
    PENSION BENEFIT GUARANTY CORPORATION, Plaintiff, v. CENTER CITY MOTORS, INC., Center City Leasing, Inc., Warren L. Swink and Zola Beth Swink, Defendants.
    Civ. No. 82-0774-JLI(M).
    United States District Court, S.D. California.
    Nov. 5, 1984.

      Henry Rose, General Counsel, Washington, D;C., Peter W. Bowie, Chief Asst. U.S. Atty., San Diego, Cal., for plaintiff.
    Michael B. Poynor, Sternberg, Eggers, Kidder & Fox, Bruce J. MacDonald, Brown, MacDonald & Ravin, San Diego, Cal., Richard Apodac, Santa Barabara, Cal., for defendants.
   IRVING, District Judge.

This action was brought in June, 1982, by the Pension Benefit Guaranty Corporation (hereafter referred to as “PBGC”). PBGC alleges that the defendants, Center City Motors, Inc., Center City Leasing, Inc., Warren L. Swink, and Zola Beth Swink, are liable to PBGC under the provisions of the Employment Retirement Income Security Act, 29 U.S.C. §§ 1001-1461 (1976 & Supp. 1980) (hereafter referred to as “ERISA”). Specifically, PBGC alleges that the defendants are each liable for a deficiency existing in the pension plan for the employees of Center City Motors, Inc., on December 31, 1975, the date the plan was terminated.

PBGC bases this liability on 29 U.S.C. § 1362. § 1362 assesses liability, in favor of PBGC, against “any employer who maintained a plan” that was underfunded on the date the plan terminated. 29 U.S.C. § 1362(a). “Employer,” as the term is used in § 1362, is defined in § 1301. PBGC v. Ouimet Corp., 630 F.2d 4, 11 (1st Cir.1980). § 1301(b) states that “all employees of trades or businesses (whether or not incorporated) which are under common control shall be treated as employed by a single employer and all such trades and businesses as a single employer.” 29 U.S.C. § 1301(b) (1976).

PBGC alleges in its complaint that Warren L. Swink and Zola Beth Swink (hereinafter referred to as “the Swinks”) are “the former and current owners of [Center City] Motors, Inc., the current owners of [Center City] Leasing, Inc. and proprietors of certain rental property.” Complaint at ([ 10. PBGC further alleges that Center City Motors, Inc. “and the rental property business of the Swinks constituted a commonly controlled group of trades or businesses and were a single employer under 29 U.S.C. § 1301(b).” Complaint at ¶ 13.

The Swinks seek summary judgment, as to all claims against them, solely on the ground that their rental property proprietorship does not constitute a “trade or business” within the meaning of § 1301(b), and therefore, they can not be liable as part of a commonly controlled group under § 1362. In order to be entitled to summary judgment, the Swinks must demonstrate that there are no triable issues of facts that would support an inference that the Swinks property rental amounted to a “trade or business,” within the purview of § 1301. See Stansifer v. Chrysler Motors Corp., 487 F.2d 59, 63 (9th Cir.1973). The question of whether an entity is engaged in a “trade or business” is primarily a factual determination. Higgins v. Commissioner, 312 U.S. 212, 217, 61 S.Ct. 475, 477, 85 L.Ed. 783 (1941). However, the Swinks argue that first, the lease at issue is a net lease, and second, that because Congress has specifically stated that a net lease is considered not to be a trade or business for certain purposes of the tax code, Congress must have intended to exclude such a lease from consideration as a “trade or business” under'§ 1301.

A “net lease” is defined in § 163 of the Internal Revenue Code as a lease in which the lessor’s § 162 (trade or business expenses) deductions are less than 15% of the rental income, or in which the lessor is guaranteed a specified return or a guarantee against loss. 26 U.S.C. § 163(d)(4)(A). A net lease is essentially a lease in which the tenant is responsible for one or more specific expenses, such as maintenance, that are generally the primary obligation of the landlord. See Golden, Investment Interest Deduction in New Law, 33 J. Tax’n 252, 252 (1970). The property held by the Swinks in this ease was leased to Center City Motors, Inc., at the time the pension plan terminated. The lease provided for payment of taxes, repairs, and utilities by the lessee, Center City Motors, Inc. Therefore, the Swinks argue that the property was leased under a net lease, they were not engaged in a trade or business, and can not be considered part of a commonly controlled group of trades or businesses.

However, the interpretations given to the term “trade or business,” in the Internal Revenue Code are not determinative of how those terms are interpreted in ERISA. Cf. United Steelworkers v. Harris & Sons Co., 706 F.2d 1289, 1299 (3d Cir.1983) (determination of whether “partial termination” of pension plan occurs, for tax purposes, not binding on whether plan terminates for purposes of PBGC insurance). When it enacted 26 U.S.C. § 163, Congress was concerned that allowing interest deductions for property that produces little current income would allow taxpayers to use that deduction to offset other income, and avoid taxation. H.Rep. No. 533, 92d Cong., 1st Sess. 72, reprinted in 1971 U.S.Code Cong. & Ad.News 1825, 1861. Similarly, in 29 § 167, which allows the depreciation, generally, of assets used in a trade or business, Congress encouraged investment in plant and equipment, expansion of industrial capacity, and promotion of economic growth. S.Rep. No. 1622, 83d Cong., 2d Sess., reprinted in 1954 U.S.Code Cong. & Ad.News, 4629, 4656. Finally, in 26 U.S.C. § 355, Congress attempted to preclude the transformation of corporate earnings, from ordinary income into capital gains. H.Rep. No. 1337, 83d Cong., 2d Sess., reprinted in 1954 U.S.Code Cong. & Ad.News 4025, 4065.

ERISA does not contain a definition- of the term “trade or business.” Therefore, the court must construe this term in light of the purpose of the statute. See Bailey v. United States, 360 F.2d 113, 116 (9th Cir.1966). Because one of Congress’ overriding concerns when it enacted ERISA was to ensure that workers’ retirement benefits would actually be available during retirement, Nachman Corp. v. PBGC, 446 U.S. 359, 374, 100 S.Ct. 1723, 1732, 64 L.Ed.2d 354 (1980), the language of ERISA should be construed liberally to provide the maximum amount of protection to workers covered by pension plans. Connolly v. PBGC, 581 F.2d 729, 731 (9th Cir.1978). When Congress defined all members of a controlled group as a single “employer,” it clearly intended to prevent a business from limiting its responsibilities under ERISA by the fractionalization of its business operations. The Senate report explicitly states:

the committee, by [§ 1301(b) ], intends to make it clear that the coverage and anti-discrimination provisions cannot be avoided through separate corporations instead of separate branches of one corporation.

S.Rep. No. 383, 93d Cong., 2d Sess. 43, reprinted in 1974 U.S.Code Cong. & Ad. News 4639, 4890, 4928. See also H.Rep. No. 807, 93d Cong., 2d Sess. 50, reprinted in 1974 U.S.Code Cong. & Ad.News 4670, 4716.

The Conference Committee Report clarifies Congress’ intent to apply these same principles to the PBGC’s enforcement of liability for underfunded pension plans:

In determining the employer who may be liable for insurance coverage losses of corporation, all trades or businesses under common control are to be treated as a single employer.

H.Conf.Rep. No. 1280, 93d Cong., 2d Sess., reprinted in 1974 U.S.Code Cong. & Ad. News 5038, 5155.

In light of this intent, the court finds that Congress did not intend to exclude from its definition of a “trade or business” in § 1301, a rental proprietorship which leases property, under a net lease, to an entity that is under common control. The Swinks’ motion for summary judgment is based upon their assertion that their conduct does not rise to the level of a trade or business because the net lease of the property delegates responsibility for certain items, such as maintenance and taxes, to a third party. However, the lease merely delegates these responsibilities to Center City Motors, Inc., a corporation wholly-owned by the Swinks. The court finds that Congress did not intend to exempt such a business arrangement from its definition of a trade or business. On the contrary, Congress intended to prevent such fragmentation of business operation.

The court expresses no opinion on how it would regard a net lease in which the lessee was not an entity under common control. But where, as here, the net lease is between the two entities PBGC alleges are under common control, the court concludes that the fact that one of the commonly controlled entities bears the majority of responsibilities under the lease does not prevent the other entity from being considered a trade or business for purposes of § 1301. As the court stated in PBGC v. Anthony Co., 537 F.Supp. 1048, 1052 n. 6 (N.D.Ill.1982):

Section 1301(b)(1) and 1362 reflect a Congressional concern that the realities of business organization should prevail over the formalities of corporate structure in imposing liability to correct a perceived social problem: termination of employee benefits plans causing defeat of employee expectations as to their vested rights.

As an alternative basis for its decision, the court finds that PBGC has showed the existence of facts that would justify the inference that the Swinks operated the rental property proprietorship and the corporation, Center City Motors, Inc., as two separate parts of a single trade or business. PBGC has alleged that Mr. Swink used his position as an automobile dealer to obtain permanent financing for the development of the property, that his selection of the property was accomplished with the aid of corporate resources, and that his purchase and development of the property was simply a part of an overall plan for the operation of his business of operating an automobile dealership. These facts preclude summary judgment, because they would support an inference that the Swinks’ rental property proprietorship was operated as part of a trade or business carried on by the Swinks. See Tibbals v. United States, 362 F.2d 266, 272, 176 Ct.Cl. 196 (1966) (“It is appropriate, in circumstances such as these, to see whether the taxpayer uses his controlled company — for instance, as agent, co-participant, or joint venturer — to implement or further his own personal business, as he easily can.”)

Under either rationale, the Swinks are precluded from summary judgment. Their concluding statement, that Congress did not intend to subject individuals’ property to ERISA liability does not aid them here. It is precisely because the leasehold was used as a business related asset that the court is unable to find that they are entitled to summary judgment on the issue of whether their proprietorship is a “trade or business” as that term is used in § 1301. Accordingly,

IT IS ORDERED that defendants’ motion for summary judgment is denied.


author: NEALON, Chief Judge.

text:
    Raymond J. DONOVAN, Secretary of Labor, United States Department of Labor, Plaintiff, v. LOCAL 514, UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, Defendant.
    No. 82-1104-Civ.
    United States District Court, M.D. Pennsylvania.
    Nov. 8, 1984.

      James W. Walker, Asst. U.S. Atty., Scranton, Pa., T. Timothy Ryan, Jr., Sol. of Labor, Washington, D.C., Marshall H. Harris, Regional Sol., Edward T. Ellis, U.S. Dept, of Labor, Philadelphia, Pa., for plaintiff.
    Ira H. Weinstock, Harrisburg, Pa., for defendant.
   MEMORANDUM AND ORDER

NEALON, Chief Judge.

The Secretary of Labor commenced this action pursuant to 29 U.S.C. § 482(a) on September 3, 1982, seeking a declaration that the election held by the defendant on June 5, 1982, is void for the offices of Financial Secretary, Recording Secretary, Treasurer, Conductor, two Trustees, and five delegates to the Keystone District Council. The court has jurisdiction pursuant to Section 402(b) of the Act (29 U.S.C. § 482(b)). The Secretary has advanced three issues: (1) Section 401(e) of the Act was violated in that a member in good standing was improperly denied the right to be a candidate at the nominating meeting held May 18, 1982; (2) Section 401(g) was violated in that Union funds were used to promote the candidacy of a particular slate of candidates running for office in the election which took place on June 5, 1982; and (3) the Union’s membership list was made available to only one slate of candidates in violation of Section 401(c). In its answer, the Union/defendant asserted as an affirmative defense that the complaint filed by the Secretary of Labor in this case was untimely because the complaining party had failed to file his complaint with the Secretary of Labor within one month after the alleged violations by the Union as required by 29 U.S.C. § 482. On September 24, 1982, the Union filed a motion to dismiss asserting the issue of untimeliness. This motion was held in abeyance pending a long but unsuccessful attempt by the parties to agree on a Stipulation of Facts. Depositions were then taken of John Helfrieh and Edward Blazejewski, Sr., employees of the defendant, on October 19, 1983. On January 20, 1984, the Union filed a motion for summary judgment and brief in support thereof, dated January 30, 1984. Plaintiff filed an opposition brief, dated February 15, 1984, along with a cross motion for summary judgment. On February 22, 1984, defendant filed a reply brief and on March 6, 1984, plaintiff filed its reply brief. A joint stipulation of uncontested facts was filed by the parties on March 28, 1984. A conference was held April 23, 1984, and the parties agreed that four additional depositions should be taken. Accordingly, the depositions of John Zimnicky, Stanley Soboleski, Donald Purvin and Thomas Froncek were taken and supplemental briefs were filed, the last on September 19, 1984. The motion and cross motion for summary judgment are now ripe for disposition. The motion of the defendant will be granted in part and the plaintiff’s motion will be denied.

DISCUSSION

On January 1, 1982, Locals 150, 401, 414 and 768 merged into Local 514. The defendant, Local 514, governed by the Constitution of the United Brotherhood of Carpenters and Joiners of America, held nominations for the election of its local officers on May 18, 1982. On June 5, 1982, Local 514 conducted the election for the local offices of President, Vice-President, Recording Secretary, Financial Secretary, Treasurer, Conductor, Warden, and three Trustees to the District Council, Greater Wilkes-Barre Labor Council and the Building Trades Council. Section 57(G) of the International Constitution provides, inter alia, that all protests directed to the conduct of nominations, or election procedures, may be appealed to the General President, in writing, within thirty (30) days of the date of the election. Decisions of the General President shall be final.

John Zimnicky, by letter dated June 3, 1982, addressed to William Konyha, General President of the United Brotherhood of Carpenters and Joiners of America, protested the conduct of the nominations for that election, specifically the decision of the Election Committee for Local 514, declaring one John Gadomski ineligible to run for office on the ground that he was not a member in good standing. Following an investigation, the General President denied Mr. Zimnicky’s protest by letter dated June 8, 1982. By letter dated June 21,1982, and addressed to the General President, Mr. Zimnicky protested a pre-election mailing made by Edward Blazejewski, Sr., Business Representative, on behalf of one slate of candidates. By letter of June 29, 1982, the General President found no merit in Mr. Zimnicky’s June 21, 1982 letter of protest. On June 27, 1982, Mr. Zimnicky appealed to the Carpenters’ General Executive Board regarding the denial of his protest letter of June 3, 1982. Mr. Zimnicky was advised on July 1, 1982, that in accordance with the Constitution and Laws of the International, the General President’s decision was final.

On July 6, 1982, it appears Zimnicky attempted to file a complaint with the Secretary of Labor by hand-delivering a letter to the Office of the Labor Management Services Administration (LMSA) office listed in the Wilkes-Barre phone book. Unbeknownst to him, the LMSA had closed its Wilkes-Barre office in June of 1982. In attempting to locate a Department of Labor office in which to file the complaint, Zimnicky met two investigators for the Wage and Hour Division of the Department of Labor, which office was in Wilkes-Barre. He offered the complaint to one of the investigators who looked it over and then referred Zimnicky to the NLRB Office in Philadelphia. Zimnicky mailed the complaint to the NLRB, which, by letter dated July 9, 1982, referred it by mail back to the defunct LMSA Office in Wilkes-Barre. Eventually, it was forwarded to the LMSA Office in Philadelphia, arriving on July 15, 1982. The Secretary investigated the complaint, treating it as if it were filed on July 6, 1982, the date it was hand-carried to the defunct LMSA Office in Wilkes-Barre.

I. The Timeliness of Mr. Zimnicky’s Original Complaint

Regarding the timeliness issue, the Union asserts that the requirement of § 482(a) that a member of a labor organization “file a complaint with the Secretary within one calendar month of the violation” is mandatory and that the Secretary of Labor does not have standing to bring an action unless a member of the Union has filed a valid complaint challenging the Union election. The Union contends the complaint should not be deemed received for purposes of the Act until July 15, 1982, thus exceeding the one-month statutory limitation period. The Secretary maintains, however, that the complaint should be considered filed as of July 6, 1982, when Mr. Zimnicky attempted to hand-deliver it to the defunct LMSA office in Wilkes-Barre. Because Mr. Zimnicky did all he could to file his complaint on July 6, 1982, but was thwarted from reaching the proper agency due to circumstances beyond his control, the Secretary requests the court to consider the complaint as having been filed for purposes of Title IV on the date Mr. Zimnicky made contact with Wage and Hour investigators in the Wilkes-Barre Federal Building. This contact would be within the one-calendar-month time limit set forth in § 402(a).

Section 482(a) provides:

(a) A member of a labor organization—
(1) who has exhausted the remedies available under the constitution and bylaws of such organization and of any parent body, or
(2) who has invoked such available remedies without obtaining a final decision within three calendar months after their invocation,
may file a complaint with the Secretary within one calendar month thereafter alleging the violation of any provision of section 481 of this title (including violation of the constitution and bylaws of the labor organization pertaining to the election and removal of officers)____

The Third Circuit Court of Appeals in Hodgson v. United Steelworkers of America, 459 F.2d 348, 350 (3d Cir.1972), explained that the one-month filing period is mandatory. That, “[i]f the individual complainant fails to file a protest with the Secretary within one month of the exhaustion of his union remedies, an action filed in the district court must be dismissed.” Id. See also Donovan v. Local 126, International Brotherhood of Electrical Workers, 552 F.Supp. 429, 430 (E.D.Pa.1982) (citing Hodgson), Hall v. Marshall, 476 F.Supp. 262, 268 (E.D.Pa.1979) (citing Hodgson), Shultz v. United Steelworkers of America, 319 F.Supp. 1172, 1173 (W.D.Pa.1970). If a union member has not filed a valid complaint, the Secretary lacks authority to proceed under § 482 to seek a new election. See Donovan v. Local 126, 552 F.Supp. at 431.

A complaint is deemed “filed” with the Secretary upon “receipt.” See Wirtz v. Local Union 169, International Hod Carriers, Building and Common La-borers’ Union of America, 246 F.Supp. 741, 750 (D.Nev.1965). Merely placing the document in the mail would not constitute filing under the statute. However, in this case, Mr. Zimnicky actually tendered the complaint to a Department of Labor employee who gave him erroneous information as to where the complaint should be sent. It is true that the Wage and Hour employee was not the proper official to receive the complaint but if he had agreed to accept the complaint and forwarded it to the Labor Management Services Administration office in Philadelphia, the Secretary would be hard put to challenge the timeliness of the filing. Interestingly enough, if Zimnicky had mailed the complaint on July 6, 1982, to the Wilkes-Barre office, instead of hand-carrying it, it no doubt would have been forwarded to the Philadelphia office. Moreover, Zimnicky could not have received the June 8, 1982, notice of the denial of his appeal until several days after it was mailed (Fed.R.Civ.P. 6(e) allows for 3 additional days for mail delivery of a notice.) which would have given sufficient time for the notice to reach Philadelphia prior to the expiration of the one-month limitation. Recognizing the broad remedial purposes of the Act, the efforts made by Mr. Zimnicky to file the complaint, the unexpected development of the closing of the Wilkes-Barre office where service could have been effected, the lack of prejudice to defendant, and the opinion of the Secretary that the complaint was filed within the one-month statutory requirement, I conclude that the attempted delivery of the complaint to an employee of the Secretary in the Wilkes-Barre office constituted a filing within the contemplation of § 402(a) of the Act, 29 U.S.C. § 482(a). Thus, the issue that Mr. Gadomski was improperly denied of his right to be a candidate remains viable.

The protest involving the alleged illegal use of a union mailing list was made on June 21, 1982, and denied on June 29, 1982. This would fall easily within the one-month filing period and is, thus, not subject to dismissal.

II. The Campaign Mailing on behalf of the Blazejewski Slate

The Secretary contends that Union funds were used in violation of Section 401(g) of the Act (29 U.S.C. § 481(g)) because campaign literature promoting the candidacy of a particular slate of candidates was mailed by a Union employee. The Joint Stipulation of Uncontested Facts and the depositions reveal that Edward F. Blazejewski, Sr., is the Business Representative for Keystone District Council in Area No. 1. He was not a candidate in the disputed election but his son, Edward F. Blazejewski, Jr., was a candidate for the office of President of Local 514 and headed a slate of candidates hereinafter referred to as the Blazejewski slate. Mr. Blazejewski, Sr., requested Eugene Ercolani, Financial Secretary of Local 514 and a member of the Blazejewski slate, to arrange for the mailing and paid him $125.00, as well as supplying the stamps, envelopes and campaign literature. The $125.00 payment was specifically intended to reimburse Mr. Ercolani for the time he spent performing the mailing. The depositions disclose that it was the Union’s policy to mail campaign literature to the members for any candidate provided the candidate brought the material and envelopes with return addresses to the Union office and agreed to pay the person who did these mailings at time and a half of a carpenter’s wages. Plaintiff does not deny the existence of this policy but contends that a mailing required prior approval of the membership. In addition, each member is entitled to examine the Union’s mailing list but cannot copy the names and addresses. The mailing policy is included in the nomination and election procedures which are sent to each local before any election. It is to be read aloud at the Keystone District Council meetings prior to the election and by the Recording Secretary at local meetings and, according to Recording Secretary Froncek, was personally read by him to the body of members prior to the election at issue here. This mailing procedure had been utilized by other members in previous elections.

The Blazejewski slate mailings were performed by John Helfrich, the apprentice coordinator for Area No. 1 of the Keystone District Council, and not by Mr. Ercolani. Moreover, Helfrich did not receive the $125.00 paid to Ercolani by Blazejewski, Sr. Mr. Helfrich receives his salary at an hourly wage rate of $14.99 per hour for a forty-hour week and it is paid from a fund created by contributions from contractors at the rate of five cents per hour for every hour worked by a union member. Mr. Helfrich is expected to work from 8:00 A.M. to 4:30 P.M. each day but is also required to work four hours each Monday night at an apprentices’ meeting. Because he must work these four additional hours each Monday night, he is permitted four hours of “comp time” each week which may be taken at any time during his normal forty-hour work week and may be used for personal purposes Mr. Helfrich stuffed, sealed, stamped and addressed approximately 500 letters for the Blazejewski slate using the Secretary’s ledger book provided by Mr. Ercolani. At his deposition he testified that it took him 8 hours to do this work and that he did it by using “comp time” he had accumulated although some was done before his work day started, during his lunch break, and on Saturday, his day off. This testimony, on its face, would indicate that Helfrich used his own comp or personal time in carrying out the mailing and, consequently, no union funds were implicated so as to constitute a violation of Section 401(g). The. Secretary resists this conclusion on two grounds: (1) the “comp time” was part of Mr. Helfrich’s job benefit package along with his wages for a forty-hour week, and (2) prior to his deposition, Mr. Helfrich had signed a statement asserting that he addressed the envelopes “during the day when I wasn’t busy with apprenticeship committee business” which, the Secretary argues, at least created a genuine issue as to a material fact which would preclude entry of summary judgment for the defendant.

The Secretary offers no plausible explanation, except to state the conclusion, as to why comp time should be considered part of the job benefit package and, further, how this interpretation would constitute use of Union’s funds. I reject both approaches. It is true that the prohibitions of the Act refer to indirect as well as direct contributions from the Union to candidates for preparation of campaign literature as well as to minimal amounts spent on behalf of the Union, Shultz v. Local Union 6799, United Steelworkers of America, 426 F.2d 969 (9th Cir.1970), but no one has disputed the factual allegation that the Monday night obligation relieved Helfrich from four hours of work during the week which he could utilize in any way, in or out of the Union office. This was his option to use in any manner he desired and, according to his deposition, he acted voluntarily in effectuating the mailings. Indeed, he stated that he would have done the same thing for other candidates if he had the time. .This cannot be equated with use of Union funds simply by labeling it as part of a job package.

As to the alleged inconsistency between Mr. Helfrich’s deposition testimony and his prior written statement, it should be pointed out that this is the only factual dispute advanced by either side that would militate against summary judgment. In that regard, both sides conducted extensive discovery and also entered into a Factual Stipulation in an effort to flush out all possible factual controversies. The factual conflict, according to the Secretary, is between Helfrich’s deposition testimony that he acted on his “comp time” and his recorded statement that it was done during the day when he wasn’t busy with apprenticeship committee business. Yet, it is apparent that there was no reason why under his “comp time” entitlement he couldn’t perform any personal and nonwork-related task during the day when he wasn’t doing his usual apprenticeship duties. Whether he was voluntarily stuffing envelopes for a candidate or writing a letter to a friend would not make it something other than “comp time” if that is what he considered it to be. If a trial were held, I would not consider these facts as creating an inconsistency which would warrant a rejection of Mr. Helfrich’s deposition testimony. The argument that Mr. Helfrich may not have accumulated “comp time” because the Monday night classes were not consistently held is unpersuasive. This testimony was vague, remote and incidental, and would not warrant a finding that sufficient “comp time” to mail the Blazejewski literature had not been accumulated. Aside from the above, the Secretary has not represented to the court, despite extensive discovery, that any further competent evidence would be forthcoming on this issue. Consequently, I am satisfied that no genuine issue of material fact exists as to this issue and summary judgment will be entered for defendant.

III. Use of the Membership List

Finally, the Secretary maintains that the Union violated Section 401(c) of the Act (29 U.S.C. § 481(c)), which provides that labor organizations must refrain from discrimination in favor of or against any candidate with respect to the use' of lists of members. While plaintiff does not seem to contest that a policy existed which allowed each member to inspect the membership list at the local and council meetings, he points to the deposition testimony of Stanley Soboleski, the candidate who defeated Mr. Blazejewski, Jr., and was elected President, and by Mr. Donald Purvin, the elected Vice-President, who testified that there were not any announcements at any of the pre-election union meetings regarding the availability of the union membership lists. This testimony conflicts with that of the Recording Secretary, Mr. Froncek, who testified that he did make the announcements. The Secretary maintains that by allowing the use of a membership list for the Blazejewski slate mailings without advising the other eandidates of the availability of the list, the Union breached Section 402(c). It is difficult to perceive from the record whether the alleged availability of the membership lists was well known by the membership even if a specific announcement had not been made. Consequently, there appears to be a factual dispute on this issue and the effect it may have had on the election. See Schultz v. Radio Officers’ Union of United Telegraph Workers, 344 F.Supp. 58, 67-68 (S.D.N.Y.1972). As previously mentioned, if the Union discriminated in favor of or against any candidate with respect to the use or inspection of membership lists, then this would contravene Section 401(c). This issue cannot be decided on the present record and summary judgment would not be appropriate.

      . Initially, the parties believed they could agree on a Stipulation of Facts and present the matter as a case stated for determination by the court without a hearing. Apparently, because there was disagreement as to certain factual allegations, the parties decided to seek summary judgment pursuant to Rule 56, Fed.R.Civ.P.

      . The Secretary seeks to set aside the election only of the officers who purportedly benefited from the Union’s improper actions.

        . The Secretary further contends that the limitations period should not be applied more strictly than that set forth in subsection (b), which has been held not to be jurisdictional and may be extended either by equitable considerations or by agreement of the parties.

      . The mailing policies previously existing at the locals which merged into Local 514 may have varied.

      . Mr. Soboleski testified that he could have availed himself to a mailing by the Union in the 1982 election but chose not to do so. Mr. Zimnicky also admitted that he understood a mailing list would be made available to a candidate who requested it.