text:
    UNITED STATES of America v. Al PALMIERI.
    No. 85 Cr. 640 (SWK).
    United States District Court, S.D. New York.
    Dec. 3, 1985.

      Rudolph Giuliani, U.S. Atty., for S.D. N.Y. by Henry Pitman, Asst. U.S. Atty., New York City, for U.S.
    Jeffrey Hoffman, Hoffman, Pollok & Gusthalter, New York City, for defendant.
   MEMORANDUM OPINION AND ORDER

KRAM, District Judge.

On the morning of November 21, 1984, as the Court was about to select a jury in the above-captioned matter, William Marinelli, a prospective government witness, walked into the courtroom and told Assistant United States Attorney Henry Pitman that if anyone seated in the courtroom was the defendant, Marinelli could not identify him. Defendant A1 Palmieri was seated in the courtroom at the time.

The United States Attorney notified the Court, and sought permission to introduce Marinelli’s pretrial photograph identification of Palmieri. The defendant objected, claiming that the circumstances surrounding the photo identification were so suggestive that introduction of this identification evidence would violate his right to due process of law guaranteed by the Fifth Amendment to the United States Constitution. The following constitutes the Court’s findings of fact and conclusions of law.

On December 11,1984, William Marinelli, acting as an informant for the King’s County District Attorney’s (“DA’s”) office, arranged, by telephone, a meeting with Joseph Prelli at which Marinelli would purchase false credit cards. Marinelli and a detective from the DA’s office, Raymond Ruggiero, met with Prelli at the Mulberry Bush Restaurant on Mulberry Street in Manhattan at 3:00 p.m., on what Marinelli testified was a sunny day. Marinelli and Prelli then went outside and Marinelli asked Prelli if Prelli could supply him with phony credit cards. Prelli said he could.

Prelli and Marinelli then entered Marinelli’s ear, and Marinelli drove to 166 Mulbery Street. Prelli exited the ear, went into the building, came back, and told Marinelli to wait as another person would be coming down soon. Before the person arrived, Prelli told Marinelli that Baby John DeLutro was asleep and his uncle would be coming down.

According to Marinelli’s testimony, a man then came out'of the building and got into the back seat of the car. Prelli introduced him to Marinelli as Al, and Marinelli, who was seated in the driver's seat, turned around and shook Al’s hand. The exchange took only a few seconds. Marinelli then drove a few blocks, which took a few minutes, and dropped Al off. Marinelli did not see Al as Al exited the car. Marinelli and Prelli then drove off, and returned to pick up Al ten minutes later: According to Marinelli’s testimony, Al entered the back seat on the passenger’s side and they drove off. All the while Marinelli was driving and looking forward. The three then returned to 166 Mulberry Street where Al exited the car. Sometime during the trip, Marinelli learned that Al had recently been arrested on drug charges. Prelli and Marinelli then returned by car to the Mulberry Bush Restaurant.

Marinelli and Ruggiero returned to the DA’s office approximately two hours later. Marinelli was brought to see Detective Kenneth McCabe in the squad room. McCabe was seated at a desk and Marinelli sat down on a chair on the other side of the desk. Marinelli told McCabe that he had just met with Prelli and a man named Al. Marinelli stated that Al had gray hair, that he had been described to Marinelli as Baby John DeLutro’s uncle, and that Al had recently been arrested on a narcotics charge. This is the sum total of the description Marinelli gave to McCabe. McCabe had the complaint in the DeLutro case in his desk. He took it out of a drawer and. looked for the name “Albert” on the caption. McCabe found it next to the surname Palmieri. With Marinelli by his side McCabe then went to a file cabinet in the room, retrieved a file from a drawer marked “Al Palmieri”, and opened the file to Palmieri’s photo. Marinelli testified on cross-examination that McCabe then told him that this is a picture of Al Palmieri whom McCabe knew as Baby John’s uncle. Although McCabe denied saying this, the Court credits Marinelli’s testimony. Marinelli, who was still standing next to McCabe, snapped his- fingers and exclaimed, “that’s him”. McCabe then closed the folder. The viewing took only a few seconds.

At the hearing, the United States Attorney introduced a photograph that Marinelli stated was the same one he saw on December 11, 1984, at the Brooklyn DA’s office. Marinelli also stated that he had previously identified the person in the photograph as the same person who got into his car on December 11, 1984, but is not sure now whether the person in the photograph is the person who was in his car. The photograph has the name Al Palmieri written on the back. Marinelli did not see the name at the time of the identification, but did see the name when testifying at the hearing. Marinelli also testified that he did not recognize the person sitting at the defendant’s table in court, who was in fact, Al Palmieri, as the person whom he met on December 11, 1984.

Based on the foregoing, the Court finds that the photograph in question is of the defendant, Al Palmieri, that the photograph in question is the same one previously shown to Marinelli, that Marinelli previously identified the person in the photograph as the same Al who got into his car on December 11,1984, but can no longer do so, and that Marinelli cannot identify defendant Albert Palmieri as the person who got into his car carrying the credit cards.

The question before the Court is whether Marinelli’s identification of Palmieri’s photograph as depicting the same person who got into the car on December 11, 1984 is sufficiently reliable to be introduced as evidence at trial.

In Manson v. Brathwaite, 432 U.S. 98, 97 S.Ct. 2243, 53 L.Ed.2d 140 (1977), the Supreme Court articulated five factors to be applied in assessing the reliability of identification testimony. These are:

the opportunity of the witness to view the criminal at the time of the crime, the witness’ degree of attention, the accuracy of his prior description of the criminal, the level of certainty demonstrated at the confrontation, and the time between the crime and the confrontation.

Manson, 432 U.S. at 114, 97 S.Ct. at 2253.

Along with these factors is to be weighed the corrupting influence of a suggestive identification. The Court thus will assess these factors and weigh them along with the suggestiveness, if any, of the identification at issue.

1. The opportunity to view: Marinelli directly observed Al only once, for a few seconds, when Al entered the back door of the car and Marinelli turned around and shook his hand. On four other occasions, Marinelli had a partial view of Al—as Al entered and left the car a total of four times. The government failed to prove that Marinelli saw Palmieri directly on these occasions. Marinelli’s testimony shows that he did not speak with Palmieri, did not look at him while driving with him, and shook hands with him only once. Marinelli saw Al at approximately 3:30 p.m. on a sunny day.

2. The degree of attention: Marinelli was not a casual observer. Rather, as a government informant, under heavy pressure to identify criminals, Marinelli knew he would have to describe the people whom he met while purchasing counterfeit credit cards. There is no evidence, however, that Marinelli was specially trained to provide descriptions, although he had been a government informant for a number of months. Furthermore, Marinelli was concentrating on driving his car during virtually the entire time he was with Al, and Al was sitting in the back seat of the car. Based on Marinelli’s testimony, he failed to give that degree of attention expected of an informant. For example, he did not view Palmieri through his rear view mirror.

3. The accuracy of the description: Marinelli stated he told McCabe that Al had gray hair. The Court notes that the defendant, Al Palmieri, is almost completely bald. This is the only physical description Marinelli gave of Al. Marinelli did not estimate Al’s height, weight, or age, nor did he describe any outstanding physical characteristics.

4. The witness’ level of certainty. Marinelli immediately identified the photograph as depicting the person he picked up at 166 Mulberry Street.

5. The time between the crime and the confrontation. The photographic identification was given to McCabe only two hours after Marinelli met Al.

Consideration of these five factors indicates that Marinelli’s identification was not reliable. Marinelli did not observe Al for more than a few seconds, and even when he did, his degree of attention was not very high, as he was concentrating on driving. This case is thus distinguishable from Gonzalez v. Hammock, 639 F.2d 844, 847 (2d Cir.1980), cert. den., 449 U.S. 1088, 101 S.Ct. 880, 66 L.Ed.2d 815 (1981), where the Court held that a few seconds was a sufficient amount of time for a reliable observation. In Gonzalez, the Court found that the identification witness was paying very careful attention and actually observed the defendant for more than a few seconds.

In addition to a limited observation and lack of attentiveness, Marinelli never provided a sufficient physical description of Al. The only description he gave was inaccurate, and his description certainly did not provide the police officers with enough information to enable them to develop a fair array of photographs for the identification. There is thus no independent means to measure the accuracy of the identification. Only the short period of time between the incident and the photo identification of the defendant weighs in favor of reliability.

The absence of a physical description of A1 contributed to an unduly suggestive identification procedure. Based only on the information that A1 was Baby John DeLutro’s uncle and that he had recently been arrested on a drug charge, Detective McCabe showed Marinelli a photograph of Albert Palmieri, telling Marinelli that the photograph was of A1 Palmieri, known as Baby John’s uncle. McCabe’s linkage of the A1 whom Marinelli had met with the Albert Palmieri of the drug charges, based only on the information that A1 was Delutro’s uncle, was unduly suggestive that Palmieri and A1 were the same person. The undue suggestiveness of the photo identification procedure also taints Marinelli’s certainty at the time of the identification.

Other factors surrounding the identification suggest a corrupting influence as well. Detective McCabe showed Marinelli only one photograph, Marinelli was under great pressure—as a government informant acting with a cooperation agreement and receiving large sums of money from the government—to identify criminals, and McCabe was in the room at the time of the identification.

Based on the Court’s conclusion that the photograph identification was unreliable and that Detective McCabe created an unduly suggestive photo identification procedure, the Court concludes that there is a very substantial likelihood of irreparable misidentification'. Admission of evidence of the photo identification would thus unduly taint the trial and violate the defendant’s right to a fair trial as guaranteed by the Due Process Clause of the Fifth Amendment to the Constitution of the United States. Accordingly, it is hereby ORDERED that the government be precluded from introducing any evidence as to the photograph identification by William Marinelli of Albert Palmieri.

SO ORDERED.

      . Marinelli, a government informant, is apparently the only government witness who can identify Palmieri as the person who allegedly transmitted a bag of counterfeit credit cards.
      Marinelli’s presence in the courtroom remains unexplained. Although the Court is very skeptical about his claim that he cannot identify Palmieri, Marinelli’s credibility on this issue is not relevant to the Court's analysis of the reliability of his photo identification and the suggestiveness of the identification proceeding. Marinelli’s testimony regarding his encounter with Palmieri is generally credible, based on the Court’s observation of his demeanor and the similarity of his testimony on cross-examination and direct. Marinelli’s testimony about the identification proceeding is generally credible, as it is corroborated in large part by the testimony of Detective McCabe.

      . The Court held a hearing during which it heard testimony from five witnesses and received two exhibits. The Court's findings of fact are based on the evidence adduced at the hearing, as the Court’s assessment of the witness’ credibility, and its resolution of inconsistencies in the testimony. The Court also requested the parties to brief the issue, and they did.

      . Marinelli agreed to be an informant in return for the District Attorney’s agreement not to prosecute him for charges of buying merchandise with false credit cards that had been filed against him. In his first four months as an informant, Marinelli received $300.00 a week and a car. In the next two to three months, Marinelli received $150.00 a week and $500.00 a month for rent. Marinelli testified he received a total of $13,000.00 from the DA.

      . The United States argues that the Court should consider circumstances other than those surrounding the identification which bear on its reliability. The United States points to two statements: one by Joseph Prelli, which indicated that an Albert had mixed the credit cards and a post-arrest statement by Palmieri in which he implied that he knew about the credit cards, as evidence of the reliability of Marinelli’s identification. In Manson, 423 U.S. at 116, 97 S.Ct. at 2253, the Supreme Court stated that circumstances other than those surrounding the identification played no part in analyzing the reliability of the photo identification. However, the Court indicated that other criteria of reliability in that case did not undermine the reliability of the identification. Here, Palmieri’s arresting officer testified that he did not recall Palmieri making any statement regarding credit cards. Only a back-up officer, who at the time was searching Palmieri’s apartment, testified that he heard the statement. The record does indicate that Prelli referred to Albert as having mixed the credit cards. An additional circumstance weighs against the reliability of the identification. Marinelli could not identify Palmieri as the person who was in his car. All of this evidence, although it does not play a part in the Court’s analysis, actually weighs against the reliability of the identification.
      The Court also notes that the Government, in its brief, failed to address the accuracy of the physical description and the degree of attention.


source: Caselaw Access Project

author: GLEN M. WILLIAMS, District Judge.

license: Public Domain

text:
    Daniel G. THOMPSON, Plaintiff, v. AMERICAN MOTOR INNS, INC., Defendant.
    Civ. A. No. 83-0013-A.
    United States District Court, W.D. Virginia, Abingdon Division.
    Dec. 4, 1985.

      Mary Lynn Tate, Abingdon, Va., for plaintiff.
    S.D. Roberts Moore, Roanoke, Va., for defendant.
   MEMORANDUM OPINION

GLEN M. WILLIAMS, District Judge.

Daniel G. Thompson, plaintiff, a resident of Virginia, brought this action against his former employer, American Motor Inns, Inc., a Virginia corporation, alleging breach of contract and unlawful discrimination based upon age. Plaintiff contends that he was given no warning notice as provided for in defendant’s Employee Handbook and alleges that age was the motivating factor in the decision to fire him. Defendant contends that plaintiff was an at-will employee, and, therefore, its termination of plaintiff’s employment was not a breach of contract nor was the decision based on age.

The court has jurisdiction pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 626(c). The parties chose not to have the case heard before a jury as provided for in 29 U.S.C. § 626(c)(2). The court agreed to await the presentation of evidence concerning the amount of damages pending the outcome of the breach of contract claim. At the close of plaintiff’s evidence defendant made a motion for a directed verdict on the breach of contract claim on grounds that plaintiff was . an at-will employee. The court stated that based on the testimony it could not grant defendant’s motion. After all the evidence had been presented, this court ruled from the bench that Thompson failed to prove a meritorious claim of unlawful age discrimination. The court found that although plaintiff had made a prima facie case of discrimination, defendant had shown a legitimate nondiscriminatory reason for firing which plaintiff had failed to rebut by a showing of pretext. The parties were given time to brief the remaining issue.

The remaining issue concerns (1) plaintiffs status as an employee at will or as an employee under a contract, and (2) if a contract governs the working relationship, whether defendant breached the contract when it fired Thompson. The court must determine whether in these circumstances the policies and procedures incorporated into the employee handbook, which was distributed to each new employee, constituted a binding agreement on the part of this employer to follow its own policy for firing employees. In essence, the court must determine if this employee handbook is contractually binding on American Motor Inns.

I.

Thompson was hired on May 8, 1978 as a full time desk clerk for the Marion, Virginia Holiday Inn and later assumed the additional duties of a night auditor. American Motor Inns, Inc. (AMI) operates Holiday Inns throughout Virginia, and other states. AMI gives each new employee an employee handbook when hired and requires that it be read. Each new employee is required to sign a copy of the Benefit Checklist (in the back of the handbook) and a copy of the Employee Conduct Code. The signed cop-. ies are then placed in the employee’s personnel file. The purpose served by this procedure is to indicate to AMI that the employee understands the rules, regulations and benefits associated with AMI employment. Ms. Lowe, the General Manager of the Marion Holiday Inn, was responsible for ensuring that each new employee was aware of and understood AMI policies. She also was responsible for hiring Thompson and instructing him in the requirements and procedures of his job.

The employee handbook provides, inter alia, that new employees have probationary status for ninety (90) days after which they become permanent employees. The handbook specifically sets out a warning procedure which is to be used to give an employee verbal and/or written notice that he has committed an infraction of the employee conduct code. This notice-warning procedure serves two purposes. First, it gives an employee notice of what type of conduct will not be tolerated by AMI. Second, it gives AMI “just cause” for firing an employee who has demonstrated that he cannot comply with AMI policies.

The employee conduct code is given to the new employee on a separate one page printed form and is incorporated by reference into the employee handbook. The first section lists ten acts which may give rise to “just cause for immediate dismissal.” The second section, which is the notice-warning section, lists seventeen acts which “may be considered just cause for remedial action which could range from oral or written reprimand to suspension from work without pay to dismissal.” The conduct policy also states that “these rules are placed in written form for the benefit of you and your fellow employees so that all employees will receive the same fair treatment.” According to the employee handbook, this conduct policy was to be posted in several locations within each Inn.

This conduct policy, incorporated into the AMI Employee Handbook at pages 3 and 4, is followed by the warning procedure section. That section provides:

Your Inn uses a written and verbal warning notice system to make certain you receive a full explanation of any shortcomings and that you understand the seriousness of the matter.
Employees who fail to meet performance standards; who violate company policy; or who fail to follow company rules will be given verbal and/or written warning notices.
Three (3) warning notices will result in dismissal.
Severe infractions, such as dishonesty, drunkeness [sic], insubordination, or immorality will not be tolerated and are grounds for immediate dismissal without a warning notice.

The course of events which led to Thompson’s firing is as follows.

On the night of January 11, 1982, Mr. McColliam, houseparent for the Mount Rogers Shelter Home for Children, was forced to remove five children from the home and find other accommodations. Thompson was on duty when McColliam came to the Inn. McColliam filled out the registration form for two rooms but did not indicate the number of people in his party. At no time did McColliam mention that children were in his party. When McColliam attempted to pay for the rooms with a personal check, Thompson told him that company policy required proper identification in order to accept payment by personal check. McColliam had neither his driver’s license nor any type of identification with him. Thompson called other area motels to inquire if they would accept McColliam’s personal check without identification. The responses were negative. McColliam left with no mention of who he was or why he needed the rooms.

On January 16, five days later, Mrs. Rosamond McCarty, a member of the board for the Mount Rogers Home, wrote a letter to Mr. Adolph Krisch, chairman of the board of AMI, copying to Mr. Bill Lemmon, owner of the property leased to AMI, complaining of the incident. (Exhibit # 1) On January 18, Krisch wrote to Mr. Poff, Senior Vice President and Regional Supervisor, instructing him to immediately fire Thompson. (Exhibit # 2) A copy of this letter was sent to Mrs. McCarty, Mr. Lemmon and Ms. Lowe. Ms. Lowe questioned Thompson about the incident, and determined he had followed company policy and had done nothing wrong when he turned McColliam away.

Poff referred the matter to Mr. Graham, the area supervisor. Graham met with Mr. Lemmon, and then with both Ms. Lowe and Mr. Thompson. He determined the incident had occurred essentially as stated in Mrs. McCarty’s letter. However, he did not talk with Mrs. McCarty or Mr. McColliam. Graham reported back to Poff, who told him to tell Thompson he was fired as of January 22.

II.

As a preliminary matter, the court notes that it retains jurisdiction over the breach of contract claim despite dismissal of plaintiff’s claim under 29 U.S.C. § 621, et seq. Cf., United Mine Workers of America v. Gibbs, 383 U.S. 715, 725-726, 86 S.Ct. 1130, 1138-1139, 16 L.Ed.2d 218 (1966) (Court retained jurisdiction over pendant state law claim when federal claim was dismissed before trial). In the case sub judice, both issues were tried and this court now assumes pendant jurisdiction over the breach of contract claim.

A. THE ERODING DOCTRINE OF EMPLOYMENT AT-WILL

In order to determine if plaintiff has a cognizable claim, this court must look to the law of Virginia to establish whether plaintiff was merely an at-will employee or an employee working pursuant to a contract. The law in Virginia concerning employment at-will is undergoing change just as it is in many, if not all, states. The anachronistic doctrine of employment at-will has not been blindly followed. Instead, many courts, including the Virginia Supreme Court, have limited its application. Courts which have considered the issue of whether terms within employee handbooks or company policy manuals are contractually binding on the employer are split in their decisions. However, exceptions have been carved out of the antiquated doctrine of employment at-will in order to recognize that employment relationships in certain circumstances are often subject to terms and conditions of implied contracts.

The precise issue, as presented by the facts of this case, has not yet been resolved by the Virginia Supreme Court. But the path followed by the Virginia Supreme Court—that of traditional contract analysis—in cases touching on the doctrine of employment at-will will guide this court in determining whether the AMI Employee Handbook contains enforceable contract provisions as will the principles gleaned from other cases that dealt with the same issue.

B. THE LAW IN VIRGINIA

Virginia follows the doctrine of employment at-will. Conrad v. Ellison-Harvey Co., 120 Va. 458, 466, 91 S.E. 763, 766 (1917); See Barger v. General Electric Co., 599 F.Supp. 1154 (W.D.Va.1984). Virginia also recognizes that a general hiring is terminable at the will of either party in the absence of a statute, custom or contract fixing the term and the conditions. Cales v. Chesapeake & Ohio Ry. Co., 300 F.Supp. 155, 157 (W.D.Va.1969) (citing Title Ins. Co. v. Howell, 158 Va. 713, 718, 164 S.E. 387, 389 (1932)). And similarly, it is settled doctrine in Virginia that where no specific time is fixed for the duration of an employment, there is a rebuttable presumption that it is an employment at-will, terminable at any time by either party. Norfolk Southern Ry. Co. v. Harris, 190 Va. 966, 976, 59 S.E.2d 110, 114 (1950). The court in Norfolk Southern, 59 S.E.2d at 115, recognized that an employer’s agreement not to dismiss without just cause rebutted the presumption and, thereby, fixed the duration of the employment.

Recently in Barger, at 1156, the district court applied Virginia law and concluded that where there was an employment policy in effect, the duration of that employment was fixed. The plaintiff had challeged the company’s reduction in force policy contending that G.E. did not offer him a position that was within his path of progression and to which he was entitled under the terms of the Employee Handbook. The issue presented in Barger, at 1158, was whether the employee handbook provisions could be construed as enforceable and contractually binding. One conclusion drawn from the very thorough analysis of the at-will doctrine in Virginia by the court was that the at-will doctrine is not a substantive rule of law but is merely a rebuttable presumption. Barger, at 1159. The court further stated, at 1161, that courts may find that an employer has contractually surrendered his right to terminate at-will when, e.g., the circumstances create an implied unilateral contract.

The court in Barger, at 1161, summarized the important principles of Virginia law in connection with the at-will doctrine.

First, an employer may make several different promises in addition to a promise of salary in exchange for the employee’s single promise to faithfully render his services; there is no failure of consideration so long as both parties have made some obligation. Second, an employer can contractually surrender his power to terminate at-will. Even if the employee can still quit at will, the contract is not void for lack of consideration; there is no requirement of complete mutuality of obligation. Third, an employee’s continued service and his failure to exercise his power to terminate his employment is sufficient consideration for an additional promise by the employer which modifies the terms of the employment contract.

C. RECENT DEVELOPMENTS IN OTHER JURISDICTIONS

Courts in other jurisdictions faced with the question of the enforceability of provisions in employee handbooks resorted to rules of construction to find implied and enforceable contractual rights. The analysis developed in cases such as Toussaint v. Blue Cross and Blue Shield, 408 Mich. 579, 292 N.W.2d 880 (1980), Cleary v. American Airlines, 111 Cal.App.3d 443, 168 Cal.Rptr. 722 (1980), Weiner v. McGraw-Hill, 57 N.Y.2d 458, 457 N.Y.S.2d 193, 443 N.E.2d 441 (1982), and the cases discussed below, is applicable to the facts before this court. Those cases are also illustrative of the issue to be decided in the case sub judice.

Recently the New Jersey Supreme Court in Woolley v. Hoffmann-LaRoche, Inc., 99 N.J. 284, 491 A.2d 1257 (1985), heard a case similar to the one at bar. In his action for breach of contract,- plaintiff claimed that the express and implied promises in defendant’s employment manual created a contract under which he could not be fired at-will, but rather only for cause, and then only after the procedures outlined in the manual were followed. Hoffman-LaRoche had distributed an “apparently carefully thought-out policy manual” intended to cover all of its employees. The court stated that when such a policy manual is involved there is no individual lifetime contract, rather, if there is a contract, it is one for a group of employees for an indefinite term and one that when fairly read may not be terminated by the employer without good cause. Woolley, 491 A.2d at 1263.

The court discussed controlling case law and found that those cases had dealt only with individual contracts for lifetime or long-term employment for particular employees. It distinguished those cases on the basis that none involved a contract put forth by the employer applicable to all employees, such as the company promulgated policy manual at issue. The court pointed out that the at-will rule has been severely criticized by commentators who argue that the rule no longer works in today’s economic climate, and it made clear its intention not to adhere to rules regularly leading to the conclusion that an employer can fire an employee at-will, with or without just cause. Woolley, at 1261. The court opined that the underlying interests involved in the relationship between the employer and its workforce call for compliance by the employer with certain rudimentary agreements voluntarily extended to the employees.

One of the court’s justifications for finding that the terms in the Personnel Policy Manual were binding on Hoffman-LaRoche was that in light of the context of the manual’s preparation and distribution it would be almost inevitable that an employee would regard it as a binding, legally enforceable commitment due to the appearance of corporate legitimacy. The court concluded that

unless the language contained in the manual were such that no one could reasonably have thought it was intended to create legally binding obligations, the termination provisions of the policy manual would have to be regarded as an obligation undertaken by the employer. It will not do for the company to say it did not mean the things it said in its manual to be binding. Our courts will not allow an employer to offer attractive inducements and benefits to the workforce and then withdraw them when it chooses no matter how sincere its belief that they are not enforceable.

Woolley, at 1265-66.

Another justification for finding an implied contract from the terms and conditions set forth in the manual concerned the job security provisions. The court stated that

the reasons for giving such provisions binding force are particularly persuasive. Wages, promotions, conditions of work, hours of work, all of those take second place to job security, for without that all other benefits are vulnerable____ Job security is the assurance that one’s livelihood, one’s family future, will not be destroyed arbitrarily; it can be cut off only for good cause, fairly determined. Hoffman-LaRoche’s commitment here was to what working men and women regard as their most basic advance. It was a commitment that gave workers protection against arbitrary termination____ Whatever Hoffman-LaRoche may have intended, that which was read by its employees was a promise not to fire them except for cause.

Woolley, at 1266.

The court applied traditional rules of contract interpretation in analyzing the terms and conditions in the employee manual in light of the surrounding circumstances. It concluded that the employee manual was a binding unilateral contract. The court found (1) that the manual was an offer seeking continued work in compliance with company policy; (2) that acceptance was manifested by the employees’ continued work; and (3) that consideration was provided by the employees’ continued work when they had no obligation to continue. The court adhered to the principle that as long as some consideration is furnished the quantity or quality is of no consequence to the binding effect of a promise.

This court agrees with the reasoning in Woolley. Cf. Norfolk Southern Ry. Co. v. Harris, 59 S.E.2d at 115 (where the court discussed consideration for employer’s promise not to fire without just cause). See also Kiser v. Amalgamated Clothing Workers, 169 Va. 574, 583-85,194 S.E. 727, 731 (1938) and Twohy v. Harris, 194 Va. 69, 81, 72 S.E.2d 329, 336 (1952) (where the court discussed consideration being furnished by an employee’s foregoing of his right to quit). See also, Barger v. General Electric, at 1161 (where the court summed up the at-will doctrine in Virginia).

In another recent and persuasive ease the Washington Supreme Court used an implied contract analysis to construe terms in an employment policy manual. The court in Thompson v. St. Regis Paper Co., 102 Wash.2d 219, 685 P.2d 1081, 1087 (1984) adopted the approach taken by a number of courts that

an employer and employee can contractually obligate themselves concerning provisions found in an employee policy manual and thereby contractually modify the terminable at-will relationship____ Under this approach the requisites of contract formation, offer, acceptance and consideration are necessary predicates to establishing that policies in an employment manual are part of the employees’ original employment contract as modified by the parties. Accord, Toussaint v. Blue Cross & Blue Shield, 408 Mich. 579, 292 N.W.2d 880 (1980); Pine River State Bank v. Mettille, 333 N.W.2d 622 (1983).

The court in Thompson held in part:

that if an employer, for whatever reason, creates an atmosphere of job security and fair treatment with promises of specific treatment in specific situations and an employee is induced thereby to remain on the job and not actively seek other employment, those promises are enforceable components of the employment relationship.

Denial of defendant’s motion for summary judgment in Thompson, however, was premised on a public policy exception to the at-will doctrine for wrongful discharge. The court recognized a cause of action in tort if the discharge of the employee “contravened the clear mandate of public policy.” Thompson, 685 P.2d at 1089.

III.

Upon evaluation of Virginia law and the relevant state and federal cases, the court concludes that the employee at-will doctrine is merely a rebuttable presumption and not a substantive rule of law. In absence of an express provision or specific contract setting a definite period of employment, the presumption of an employee’s at-will status may be rebutted by presenting evidence which shows that the parties intended and/or understood that the term of employment was fixed by reference to some articulable standard or procedure. There must be evidence of a custom, practice or policy that governs the employer-employee relationship. Evidence sufficient to establish an implied contract concerning duration of employment effectively rebuts the presumption of at-will status and binds the employer to the terms of such a contract.

A. IMPLIED UNILATERAL CONTRACT

By offering fair treatment pursuant to its warning procedure, AMI impliedly promised to abide by its own policy for disciplining and discharging employees who commit infractions of AMI’s conduct policy. AMI has listed specific types of misconduct that are grounds for issuing warnings and types of misconduct which give AMI just cause for immediate dismissal. And AMI has set out the procedures for implementing the warning and dismissal policies. Therefore, AMI has gone beyond merely agreeing not to dismiss without just cause; it made specific promises to its employees not to dismiss without three warnings or just cause. For these reasons, the court finds that the term of employment was not at-will, and, therefore, holds that AMI has fixed the duration of employment according to the procedures articulated in the employee handbook.

The court further finds that the facts of the case at bar warrant application of traditional rules of contract analysis. It is apparent that AMI, through its employee handbook, is seeking performance of duties in accordance with its stated goals. To induce the employees to carry out their duties in the manner desired by AMI, AMI has spelled out terms and conditions of employment and promised fair treatment and additional benefits. From the tenor of the language in the employee handbook, AMI has created an implied unilateral contract to govern the working relationship between it and its employees.

The language of the AMI employee handbook, which also incorporates the official AMI conduct code, is clear and unambiguous. It is reasonable to construe an offer from the provisions in the handbook. AMI offers, in addition to salary, continued employment, fair treatment and other benefits to those employees who follow its policies. An employee accepts the terms of the offer by reading the handbook, signifying that he understands the terms and conditions of employment, and is aware of what is expected from him so that he may benefit from all that AMI is offering. Thompson accepted AMI’s offer by doing that and by working according to those terms and conditions. Consideration for AMI’s implied promise to follow its own policies was furnished by Thompson’s continued work. Thompson was not under any obligation to continue working for AMI, but he did continue-thereby forfeiting his right to quit. Since mutual obligation is not required for there to be a binding and enforceable unilateral contract, Thompson’s continued service was sufficient consideration to make the provisions in the employee handbook binding on AMI. AMI through its employee handbook set the tone for the employment relationship. The court finds it difficult to believe that AMI would make false promises of job security and deliberately mislead employees. AMI has created a relationship “instinct with obligation,” Toussaint, 292 N.W.2d at 892, and it would be patently unfair to allow AMI to offer with one hand what it takes away with the other.

AMI created a sense of job security when it modified the at-will status of its employees. This sense of job security was enhanced by AMI when it distinguished between probationary and permanent employees and when it stated its official policy for firing employees. Employees were essentially instructed that as long as they abided by AMI policy their continued employment was guaranteed. In accordance with Hercules Powder Co. v. Brookfield, 189 Va. 531, 540, 53 S.E.2d 804, 808 (1949) and Dulany Foods, Inc. v. Ayers, 220 Va. 502, 508-09, 260 S.E.2d 196, 201 (1979), the court finds that the job security provisions in the AMI handbook were more than a mere gratuity, terminable at will; they are contractually binding on AMI.

B. BREACH OF CONTRACT

Since the court has found that the working relationship between AMI and its employees was governed by an implied unilateral contract, the second issue of whether AMI breached that contract when Thompson was fired is ready to be addressed.

Briefly, the court has determined that: (1) AMI, on its own volition, wrote and distributed an employee handbook in which it spelled out official company policies; (2) “permanent” employment was contingent upon compliance with company policies; (3) employees were made aware of the terms, conditions and policies of their employment; and (4) AMI was contractually obligated to abide by its own policies. The record shows that Thompson had been an excellent employee and had never before been given notice that he had not complied with AMI policies.

The evidence clearly shows that Thompson was wrongfully discharged. AMI has ironically contended that Thompson was fired for violating a provision of its employee conduct policy that gave AMI just cause for immediate dismissal. The policy AMI relies on states that AMI has just cause for immediate dismissal if an employee is disrespectful or discourteous to customers or supervisors. The court finds nothing in the record which shows Thompson acted in such a manner. It appears to the court that Thompson was fired for following company policy regarding his request for proper identification from McColliam. The record is totally lacking in evidence of any disciplinary problems with Thompson.

AMI’s act of firing him was clearly unjust and uncalled for in light of the circumstances which precipitated the decision and in light of AMI’s promises of fair treatment. AMI simply failed to follow its own policies and procedures for firing Thompson. Therefore, the court finds that AMI wrongfully discharged Thompson and thereby breached the provisions of its contract regarding the employee conduct code and the warning procedures. Because AMI was bound by its agreement, it is liable for damages incurred by Thompson as a result of the wrongful discharge.

IV.

Based on the foregoing discussion, the court holds that the provisions in the AMI Employee Handbook regarding the notice-warning and termination procedures in particular constitute an implied unilateral contract legally binding and enforceable upon AMI. The court further holds that AMI breached its contract when it fired Thompson without just cause and without the required warnings.

An Order will be entered accordingly based upon the above and the record before the court.

      . See Ellis v. International Playtex, Inc., 745 F.2d 292 (4th Cir.1982).

      . AMI Employee Handbook, at 2.

      . See Defendant's Exhibit #5. AMI Employment Conduct Policy A. 1-10.

      . See Defendant’s Exhibit # 5, AMI Employment Conduct Policy B. 11-27.

      . The reason they were forced to leave was that the electricity had gone off and the temperature outside was around ten degrees below zero.

      . Thompson testified that he saw two vehicles drive under the carport, but was unable to see inside either vehicle.

      . The record shows that AMI did not dispute that it was company policy to require proper identification upon registration when a guest indicated payment was to be by personal check.

      . Ms. Lowe further testified that Thompson was an excellent employee and that his personnel file contained no complaints or warnings.

      . The effective date of Thompson’s termination was February 8, 1982 due to accumulated sick leave and vacation time.

      . For an interesting discussion and analysis of the evolution of the employment at-will doctrine, see Note, Employee Handbooks and Employment At-Will Contracts, 1985 Duke L.J. 196. The author states that as of 1983, twenty-nine states had granted some form of common law exceptions to the at-will doctrine; five other states, as well as the District of Columbia, have indicated their willingness to do so (at 199).

      . For cases demonstrating courts’ unwillingness to give contractual force to such documents see cases cited in Woolley v. Hoffmann-LaRoche, Inc., 99 N.J. 284, 491 A.2d 1257, 1262 (1985) and in Barger v. General Electric, at 1161, n. 8, and 1985 Duke L.J. 196, 205 at n. 48. For cases in which enforceable contract rights have been found see Barger, at 1164, n. 8, and 1985 Duke L.J. 196, 205 at n. 48.

      . Over the years the courts have generally recognized three types of modifications of the employment at-will rule; (1) public policy exception; (2) tort theory exception (or the duty of good faith and fair dealing); and (3) implied contract exception. Comment, Protecting Employees At-Will Against Wrongful Discharge: The Public Policy Exception, 96 Harv.L.Rev. 1931, 1935 (1976).

      . See, e.g. Hercules Powder Co. v. Brookfield, 189 Va. 531, 540, 53 S.E.2d 804, 808 (1949), Dulany-Foods, Inc. v. C.A. Ayers, 220 Va. 502, 508-09, 260 S.E.2d 196, 201 (1979) and Fraizer v. Colonial Williamsburg Found., 574 F.Supp. 318, 320 (1983) and Barger v. General Elec., at 1161 (both relying on Virginia law to hold provisions binding on employer).
      The recent case of Bowman v. State Bank of Keysville, 229 Va. 534, 331 S.E.2d 797, 801 (1985), upon which AMI has placed much reliance, is inapposite for this case. That case recognized an exception to the at-will doctrine by acknowledging a cause of action in tort for violation of established public policy in connection with Bowman’s wrongful discharge.

      . The court found that
      the employment was, by the terms of the contract, to continue until the plaintiff gave to the defendants just cause to end it ... The defendant’s agreement that it would not discharge plaintiff without just cause was a thing of value to him, a safeguard against the loss and embarrassment to be expected from an arbitrary discharge. The defendant’s agreement that it would not be done was a term of plaintiffs employment, compensation for his work which he had earned along with his wages. The defendant ought not to take that promised reward from him without incurring a penalty for violating its agreement. It was a promise in return for services which plaintiff performed and which furnished sufficient consideration for a binding contract.

      . Although the doctrine of promissory estoppel was not raised by Thompson, it could be relied upon as a rationale for enforcing AMI’s promises in its employee handbook. AMI should have expected its employees to act or to forebear to act in reliance on those promises.

      . The irony of this matter is that AMI first contends it can fire at-will, without reason; yet contends that it fired Thompson according to its policies. Such a capricious stance comports neither with the spirit nor with the plain meaning of the AMI Employee Handbook.

      . Employee Conduct Policy, #6 (Exhibit #5).


author: CALEB M. WRIGHT, Senior District Judge.

text:
    BUTCHER & SINGER, INC., a Pennsylvania corporation, Fronefield Crawford, Wilfred Coleman and L.W. Coleman, Plaintiffs, v. Lloyd J. KELLAM, Defendant.
    Civ. A. No. 83-505 CMW.
    United States District Court, D. Delaware.
    Dec. 4, 1985.

      David J. Ferry, Jr. of Trzuskowski, Kipp, Kelleher & Pearce, Wilmington, Del., (Edward C. Mengel, Jr. of While & Williams, Philadelphia, Pa., of counsel), for plaintiff, Butcher & Singer, Inc.
    Richard W. Pell and Anne L. Naczi of Tybout, Redfearn, Casarino & Pell, Wilmington, Del., for plaintiffs-intervenors, Fronefield Crawford, Wilfred Coleman and L.W. Coleman.
    Victor F. Battaglia and Pamela S. Tikellis of Biggs & Battaglia, Wilmington, Del., for defendant.
   OPINION

CALEB M. WRIGHT, Senior District Judge.

The Court, by its own motion, has raised the issue of whether it has subject matter jurisdiction in this diversity case, as a result of the intervention of Fronefield Crawford, Wilfred Coleman, and L.W. Coleman, Trustees of the Anita C. Robb Trust (the “Trustees”). All of the Trustees and the plaintiff, Butcher & Singer (“B & S”), are citizens of Pennsylvania; defendant, Lloyd Kellam, is a citizen of Virginia. Although the Trustees and B & S have aligned themselves as plaintiffs, their interests may be sufficiently adverse such that one of them should be realigned as a defendant, thereby destroying diversity.

I. THE FACTS

In April, 1983, defendant Kellam contacted the Wilmington, Delaware, office of B & S to inquire whether it would handle the sale of bonds belonging either to Kellam or to an undisclosed third party. Kellam had been a customer of the B & S Wilmington office for twelve years. B & S agreed to handle the sale and, in several transactions during April and May 1983, delivered to Kellam a total of $83,668.01 as proceeds from the sale of the bonds.

The bonds involved in this transaction originally were owned by the Anita C. Robb Trust and were stolen from the office of Trustee Crawford on January 27, 1983. After learning that the bonds were stolen, B & S repurchased them from the third parties to whom they were sold and demanded that Kellam reimburse it for losses suffered in the repurchase. When Kellam refused to pay reimbursement, B & S filed suit. B & S apparently sought damages under the theory that Kellam had breached certain warranties under the Uniform Commercial Code, Del.Code Ann. tit. 6, § 8-306(2) (Supp.1984). Kellam filed counterclaims which alleged that B & S was negligent in advising him about the saleability of the bonds, had breached its fiduciary duty to a customer, and was estopped from relying on the fact that the bonds were stolen.

Kellam moved for summary judgment on the grounds that B & S had no obligation to repurchase the bonds from its customers and thus had suffered no legally cognizable injury. Kellam’s brief raised the possibility that B & S would receive a double recovery if it retained possession of the repurchased bonds and also was able to assert a claim for damages for the entire value of the bonds. The Court then convened a conference to solicit the views of the parties regarding what damages, if any, B & S would be entitled to recover if the Court determined that B & S were the lawful owner of the bonds. In other words, if B & S were a bona fide purchaser of the bonds, it would have no obligation to return the bonds to their original owner and, moreover, it would have the legal right to compel payment of principal and interest in accordance with the terms of the bonds. In response to the Court’s concerns, the parties decided to solicit the participation of the original owner of the bonds in the lawsuit.

The Trustees moved to intervene as plaintiffs in February 1985. The Trustees’ motion to intervene did not state whether they sought to intervene of right or permissively, and the Court’s order allowing intervention also did not address the Trustees’ status as intervenors. See Motion to Intervene and Order Allowing Intervention, Docket No. 60. In conjunction with the order permitting intervention, the Court sent a letter to the parties that expressly reserved judgment on the questions of whether the parties were aligned properly and whether the Court would continue to have subject matter jurisdiction if the parties were realigned. See Letter from Court to Counsel (Mar. 5, 1985).

After permitting limited discovery by Kellam against the Trustees, the Court, sua sponte, moved to consider the issue of its subject matter jurisdiction. Prior to briefing, the Court requested additional information from B & S about its asserted interest in the bonds. B & S submitted a verified response that disclaimed any interest in the bonds but only if it successfully recovered any losses from Kellam. The obvious inference was that B & S was asserting a conditional interest in the bonds, in the event that it could not recover damages from Kellam. In fact, B & S expressly reserved the right to assert an interest in the bonds. See Butcher & Singer’s Verified Response to Directed Question, Docket No. 68.

Based on the response of B & S, the parties were to brief three questions:

1. In light of Indianapolis v. Chase National Bank, 314 U.S. 63 [62 S.Ct. 15, 86 L.Ed. 47] (1941), does complete diversity exist, i.e., do the respective interests of plaintiff Butcher & Singer and plaintiff Trustees in the bonds require the Court to realign them as adverse parties?
2. Assuming arguendo the Court requires realignment of the párties such that complete diversity is defeated, are the plaintiff Trustees dispensable parties whom the Court should dismiss to preserve diversity jurisdiction? [NOTE: Although the decision Provident Trademens Bank & Trust Co. v. Patterson, 390 U.S. 102 [88 S.Ct. 733, 19 L.Ed.2d 936] (1968) addressed this issue in the context of joinder, it may also be applicable to situations involving intervention. Accordingly, I hope the parties’ briefs address the relevance of the Provident case in this context].
3. Assuming arguendo that the Court determines it is necessary to dismiss the plaintiff Butcher & Singer’s claims for lack of complete diversity, is the Court also required to dismiss defendant Kellam’s counterclaims against Butcher & Singer?

Letter from Court to Counsel (Apr. 26, 1985).

Upon review of the submissions of the parties, the Court has determined that the current alignment of the parties, with B & S and the Trustees as plaintiffs, is improper, and that the Court will realign B & S as a defendant. This destroys complete diversity. Because the Court has also determined that the Trustees are an indispensable party to this action, it must dismiss this action for lack of subject matter jurisdiction.

II. DISCUSSION

A. General Principles

The sole basis for the Court’s jurisdiction over this matter is diversity of citizenship. Under the relevant statute, 28 U.S.C. § 1332, complete diversity of citizenship must exist between the parties to invoke the diversity jurisdiction of the Court. That is, all parties on one side of the controversy must be citizens of different states from all parties on the other side. E.g., Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806). The parties cannot confer jurisdiction on a federal court by their own determination of who are plaintiffs and who are defendants. Instead, the Court has the duty to “look beyond the pleadings and arrange the parties according to their sides in the dispute.” Dawson v. Columbia Trust Co., 197 U.S. 178, 180, 25 S.Ct. 420, 421, 49 L.Ed. 713 (1905). The parties must be arranged by ascertaining the “principle purpose of the suit” and the “primary and controlling matter in dispute.” Indianapolis v. Chase National Bank, 314 U.S. 63, 69, 62 S.Ct. 15, 16, 86 L.Ed. 47 (1941). Where there are multiple parties to a lawsuit, as in the current litigation, the Court can realign the parties according to their true interests. If the requisite complete diversity is lacking after realignment, the Court must dismiss the case for lack of jurisdiction. See, e.g., id.

The status of a proposed intervenor affects the Court’s ability to retain subject matter jurisdiction over a diversity case. A party entering through permissive intervention must establish a jurisdictional basis independent of the Court’s jurisdiction over the claims in the original action. See, e.g., Beach v. KDI Corp., 490 F.2d 1312 (3d Cir.1974); Pierson v. United States, 71 F.R.D. 75, 81 (D.Del.1976). If the proposed intervenor, when properly aligned, destroys diversity, then the Court cannot allow the intervenor to enter. Jet Traders Inv. Corp. v. Tekair, Ltd., 89 F.R.D. 560, 566-67 (D.Del.1981); Coca-Cola Bottling Co. of Elizabethtown, Inc. v. Coca-Cola Co., 98 F.R.D. 254, 280 (D.Del.1983); but see, e.g., Telefest, Inc. v. VU-TV, Inc., 591 F.Supp. 1368, 1370 n. 1 (D.N.J.1984) (permissive intervention of non-diverse, non-indispensable party does not oust court’s jurisdiction).

If the intervenor enters by intervention of right, however, it need not establish an independent source of jurisdiction because the court has ancillary jurisdiction over its claims. Jet Traders, 89 F.R.D. at 567 n. 31; Pierson, 71 F.R.D. at 81. As a result, the entry of non-diverse intervenor of right usually does not divest the court of subject matter jurisdiction. See, e.g., Omni Dev., Inc. v. Porter, 459 F.Supp. 930 (S.D.Fla.1978). However, when a non-diverse party intervening of right is indispensable within the meaning of Fed.R.Civ.P. 19, the court must dismiss the entire suit for lack of jurisdiction. See, e.g., Carlton v. BAWW, Inc., 751 F.2d 781 (5th Cir.1985); CRI, Inc. v. Watson, 608 F.2d 1137 (8th Cir.1979). In the present case, a determination that the proper alignment of B & S and the Trustees destroys complete diversity, coupled with a finding that the Trustees are indispensable parties, would require this Court to dismiss the action for want of subject matter jurisdiction.

B. Alignment

The present controversy involves a dispute regarding liability for damages arising from the sale and purchase of stolen bonds. On the face of the complaint, the consideration paid to Kellam for the bonds appears to be the measure of damages alleged by B & S. The existence of the primary injury arising from the sale, however, turns on a determination of who legally owns the bonds. If B & S is legally entitled to the bonds, then it may not have suffered any damages. The Court must address the question of alignment from this perspective.

In Indianapolis v. Chase National Bank, 314 U.S. 63, 62 S.Ct. 15, 86 L.Ed. 47 (1941), a divided Supreme Court determined that the validity of a lease between two defendants was the “primary and controlling matter is dispute” in a suit ostensibly brought to recover overdue interest. The Court found it necessary to realign the parties, a step which defeated federal jurisdiction in the case. Just as the validity of the lease was primary and controlling in Chase National Bank, a determination of ownership of the bonds may be primary and controlling here.

The intervening Trustees have aligned themselves with plaintiff B & S. Both claim that the principle purpose of the lawsuit is to recover damages from defendant Kellam for his participation in the sale of the stolen bonds. They argue that the issue of Kellam’s liability is severable from the issue of damages and that the ownership issue is secondary because it only becomes important if and when Kellam’s liability is established. Under this view, complete diversity exists, because citizens of one state, Pennsylvania, are suing a citizen of another state, Virginia.

Kellam, on the other hand, claims that the lawsuit turns on the current ownership of the stolen bonds, because the question of who owns the bonds is determinative of whether B & S has suffered any injury. Because the Trustees have asked the Court to declare them owners of the bonds and B & S also may assert an ownership interest in the bonds, Kellam argues that the interests of B & S and the Trustees are adverse. Under Kellam’s theory, the proper alignment of the parties would have the Trustees as plaintiffs, B & S as a defendant-third-party plaintiff, and Kellam as third-party defendant and counter-claimant against B & S. This alignment, of course, would destroy diversity.

The question of which of these theories, if either, captures the “principle purpose of the suit” is difficult. The Court could find no case precisely on point. Upon careful consideration of the positions of the parties and the legal theories involved in the case, the Court has concluded that the proper alignment of parties places the Trustees as sole plaintiff and B & S and Kellam as defendants.

First, in contrast to what B & S and the Trustees argue, the question of B & S’s possible ownership of the bonds is present in the determination of Kellam’s liability to B & S on the warranty claim. The obligation of B & S to return the bonds depends on whether B & S can be considered a bona fide purchaser (BFP). Under § 8-302 of the Uniform Commercial Code, Del. Code Ann. tit. 6, § 8-302, the BFP of a security acquires his interest in the security free of any adverse claim. Section 8-302(1) defines a BFP as a “a purchaser for value in good faith and without notice of any adverse claim.” This definition requires the following four elements: (1) a purchaser, (2) value, (3) good faith, and (4) no notice of any adverse claim. Id.; Insurance Co. of North America v. United States, 561 F.Supp. 106, 112 (E.D.Pa.1983).

The parties here do not (and cannot) dispute that B & S was a “purchaser” of the bonds and gave “value” for them. See, e.g., Insurance Co. of North America, 561 F.Supp. at 113. Two elements of B & S’s entitlement to BFP status have already been proven. The issue of B & S’s ownership thus will turn on whether B & S acted in good faith and had any notice of adverse claims.

These questions also are relevant to the merits of B & S’s warranty claim and, more particularly, Kellam’s affirmative defenses. Successful proof by B & S of good faith and lack of notice of adverse claims, in rebutting Kellam’s affirmative defenses, also will serve to defeat the Trustees’ claim of ownership. As a result, resolution of the factual issues regarding ownership must logically precede a determination of liability for breach of warranty. The issue of ownership, in which the Trustees and B & S have adverse interests, thus appears primary and controlling in the .lawsuit.

Secondly (and similarly), Kellam argues in his counterclaim against B & S that B & 5 was negligent in investigating the saleability of the bonds and in advising Kellam about the transaction. Resolution of this counterclaim will require inquiry into what information Kellam gave B & S about how he came into contact with the bonds and whether B & S complied with reasonable commercial standards in determining 'if the bonds were valid. Cf. Miriani v. Rodman 6 Renshaw, Inc., 358 F.Supp. 1011 (N.D. Ill.1973) (broker could be held liable to purchaser of stolen bonds and to original owner of bonds for negligence in verifying saleability of bonds). As a result, Kellam’s counterclaim also implicates the issues of whether B & S had notice of any adverse claim to the bonds and whether it acted in good faith in the transaction. Resolution of Kellam’s counterclaim thus could establish the status of B & S as a BFP, regardless of whether B & S claims such status at this point. If B & S has BFP status, then it would be entitled to the bonds free of any adverse claims. The issue of ownership once again appears primary and controlling.

Finally, the ambivalent position which B & S has taken regarding the question of who owns the bonds shows the adversity between the Trustees and it. The Trustees are concerned almost exclusively with the issue of ownership. B & S, on the other hand, has tried to hedge its bets on the ownership issue by arguing, with respect to Kellam, that it is not the rightful owner, while refusing to renounce totally any claim to the bonds in the event it cannot recover from Kellam. Unfortunately, B & S cannot play possum until after the issue of damages is resolved with respect to Kellam.

B & S, of course, could argue that the Trustees are the rightful owners of the bonds. If B & S made such an argument without any qualification, and in the form of a stipulation of facts that would support such a finding, then there would be no adversity betwen B & S and the Trustees. B & S instead has insisted on maintaining alternative pleading positions: either it owns the bonds or Kellam is required to reimburse it for their cost.

While a party is permitted to plead alternative theories, B & S’s position is more problematic. It seeks a determination of the latter alternative prior to a determination of the former. This simply is not possible. Because B & S insists on maintaining alternative positions, the Court must look, for the purpose of determining its jurisdiction, to the first of the alternative positions (that is, the alternative which is unconditional) to be resolved. ' In this case, the issue of ownership clearly must be resolved first. Therefore, the adverse interests of B & S and the Trustees in the title to the bonds must be regarded as primary and controlling.

In summary, the issue of who owns the bonds is primary and controlling in this lawsuit. The adverse interests of B & S and the Trustees on this issue require that they be aligned on opposite sides.

The current situation is analogous to that faced by the court in Jet Traders Inv. Corp. v. Tekair, Ltd., 89 F.R.D. 560 (D.Del.1981). In that case, an alien corporation sought to intervene in an action brought by a Florida corporation against another alien corporation and other defendants. To avoid the lack of diversity that would occur if it intervened as a plaintiff (aliens would have been on both sides of the action), the intervenor asked to be aligned as a defendant and contended that its interests were more closely aligned with those of the existing defendants. The Court examined the similarity of interests between the intervenor and the existing parties and determined that the intervenor had more interests adverse to each existing party than it had interests in common with any of them. As a result, the court concluded that, “if the parties were realigned according to their real interests, [the intervenor] would be the sole plaintiff. In such a case, there would be no diversity of citizenship____” 89 F.R.D. at 567.

In the current matter, the Trustees and B & S share some interests. The Trustees share with B & S the interest in proving that Kellam acted wrongfully in arranging the sale of the bonds for the purpose of establishing their respective causes of action based on breach of warranty and conversion. To the extent that B & S abides by its promise to disclaim any interest in the bonds if it recovers its losses from Kellam, the Trustees share B & S’s interest in establishing Kellam’s liability.

On the other hand, as discussed above, the Trustees have interests adverse to B & 5 regarding the title and ownership of the bonds. In fact, the Trustees share with Kellam an interest in proving B & S’s negligence in relation to the transaction, to the extent that such negligence regarding notice and investigation of adverse claims might defeat B & S’s status as a BFP of the stolen bonds as well as preclude any recovery by B & S against Kellam. See, e.g., Insurance Co. of North America, 561 F.Supp. at 114; Oscar Gruss & Son v. First State Bank of Eldorado, 582 F.2d 424 (7th Cir.1978). Although there is much animosity between B & S and Kellam, it seems clear that the claims and counterclaims between the two relate to allocating between themselves liability arising from a wrong suffered by a third party. Both B 6 S and Kellam could be liable to the Trustees under U.C.C. § 8-315 and the common law of conversion. The two would have no dispute if none of their actions were wrongful vis-a-vis the Trustees. The Court concludes that the Trustees have more interests adverse to B & S and Kellam than they have in common with either. Therefore, the correct alignment of the parties places the Trustees as sole plaintiff against B & S and Kellam as defendants. Cf. U.S. Fidelity & Guar. Co. v. Welco Constr. & Utils. Co., 463 F.Supp. 510 (D.S. C.1978) (basic controversy arose from cross-claim in which plaintiff surety actually aligned with defendant construction company).

C. Indispensability

This alignment of parties means that complete diversity does not exist. The next question the Court must face is the Trustees’ status as intervenors. As noted above, the Court did not rule explicitly on whether the Trustees were intervening permissively or of right at the time it allowed intervention. If the Trustees are intervening permissively, then the lack of diversity created by their presence requires the Court to dismiss them from the action. If they are indispensable parties intervening of right, then the Court must dismiss the entire action. Fed.R.Civ.P. 19(b), which addresses the question of indispensability, lists four factors which a court should consider in determining whether a party is indispensable:

first, to what extent a judgment rendered in the person’s absence might be prejudicial to him or those already parties; second, the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person’s absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder.

In Provident Tradesmens Bank & Trust Co. v. Patterson, 390 U.S. 102, 88 S.Ct. 733, 19 L.Ed.2d 936 (1968), the U.S. Supreme Court found that Rule 19(b) suggests four “interests” that a court must examine to determine whether it should proceed in the absence of a party. Those interests are: (1) whether a satisfactory alternative forum is available to the plaintiff; (2) whether the defendant may face multiple litigation, inconsistent relief, or sole responsibility for a liability he shares with another; (3) whether the interests of the absent party may be impaired by the court’s decision; and (4) whether a judgment rendered in the absence of the party will provide a complete, consistent, and efficient settlement of the controversy. 390 U.S. at 109-11, 88 S.Ct. at 737-39. The court also should consider the possibility of shaping any relief to accommodate these four interests and thus avoid dismissing the case. Id. at 111-12, 88 S.Ct. at 738-39.

Assessing the current case in light of these factors, the Court concludes that the Trustees are an indispensable party to this lawsuit. First, at least one alternative forum exists for B & S to present its claims; the Delaware state courts presumably could obtain jurisdiction over the case and all the parties. As for the second interest, defendant Kellam does face the possibility of multiple litigation and inconsistent relief. Regardless of whether B & S is successful in its suit against Kellam, Kellam may have to defend a second suit brought by the Trustees relating to the sale of the stolen bonds. In addition, if both the Trustees and B & S are successful in their claims, Kellam might have to compensate both parties for the value of the bonds. This is surely an inconsistent result.

Regarding the third interest, the discussion of the alignment issue above pointed out how the status of B & S as a BFP of the bonds is before the Court. A determination by this Court that B & S was a BFP of the bonds could impair, as a practical matter, the Trustees’ ability to protect their interest in the subject matter. The stare decisis effect of such a determination constitutes sufficient impairment to meet the rule’s requirement because, if the Trustees are not parties in the suit between B & S and Kellam, they “might be forced to present identical issues of law and fact to the same court in a later action.” Jet Traders, 89 F.R.D. at 569; see CRI, Inc. v. Watson, 608 F.2d 1137, 1140. (8th Cir, 1979). In particular, an action by the Trustees against Kellam under U.C.C. § 8-315 could be brought in federal court in Delaware and would involve many of the same legal and factual issues involved in the claim of B & S against Kellam under U.C.C. § 8-306.

The next interest to be considered is whether a judgment rendered without the Trustees will provide a complete and efficient settlement of the controversy. A decision by this Court in the absence of the Trustees will by no means completely settle this matter. As mentioned above, the Trustees may bring a second suit against Kellam because of his participation in the sale of the bonds. They also could sue B & S on the same grounds. B & S has made it clear that it will institute proceedings against the Trustees to validate its title to the bond if it is unsuccessful in winning compensation for its losses here. With all these additional lawsuits possible, it is obvious that resolution of all these matters in one lawsuit would be much more efficient, and would settle the controversy more completely.

The Court finally must consider the possibility of tailoring the relief it grants to minimize prejudice to the absent party and to avoid dismissal of the case. The Court has determined that it is impossible to tailor the relief in this case to minimize prejudice to the Trustees. The question of the ownership of the bonds, although not the immediate issue in the litigation between B & S and Kellam, “assumes such commanding importance [that] it is difficult to conceptualize a form of relief or protective provisions which would not require as a preliminary matter the determination of the question of title with all the resulting potential for prejudice.” Haas v. Jefferson Nat’l. Bank of Miami Beach, 442 F.2d 394, 399 (5th Cir.1971) (Aldisert, J., sitting by designation).

For all the foregoing reasons, the Court concludes that the Trustees are indispensable parties to this action and that it cannot, in equity and good conscience, proceed in this action without them. Because complete diversity between the parties is lacking, the Court must dismiss this action. An order will issue in accordance with this Opinion.

      . The parties are in dispute whether Kellam was the owner of the bonds. The Court need not decide that question for the purposes of this Opinion.

      . Such damages presumably would be based on the theory that B & S repurchased the bonds out of some legal obligation as a broker or from efforts to minimize any commercial injury to its business.

      . The Court directed B & S to answer the following questions:
      1. Will Butcher & Singer surrender any interest it has in the bonds to the plaintiff Trustees even if the Court determines that Butcher & Singer is without any legal obligation to do so?
      2. If the first question is answered in the affirmative, then why has Butcher & Singer not already assigned any and all interest it has in the bonds to the plaintiff Trustees?

        See Letter from Court to Counsel (Apr. 26, 1985).

      . Strictly speaking, Rule 19 deals with joinder, not intervention. However, courts have utilized the four factor test of indispensability outlined in the rule to determine how to proceed when a party who destroys diversity seeks to intervene of right. See CRI, Inc. v. Watson, 608 F.2d at 1140; Carlton, 751 F.2d at 785.

      . Indeed, B & S and the Trustees admit that they have adverse interests in the title and ownership of the bonds in the event that B & S does not recover its losses from Kellam. See Butcher & Singer’s Opening Brief at 11; Intervenors’ Answering Brief at 10-11, Docket Nos. 70, 71.

      . The promise by B & S to surrender any interest in the bonds to the Trustees if it is successful against Kellam is simply beside the point. Such a promise seems to stem more from a desire to minimize any adversity between the putative plaintiffs in order to retain a federal forum than from any magnaminity on the part of B & S. Regardless of its motivation, however, the conditional nature of the promise serves only to highlight the underlying adversity between the two parties rather than to dispel the existence of any adversity.

      . The complaint filed by the Trustees does not characterize explicitly the nature of their cause of action against Kellam. The Court notes that the allegations might support a common law conversion claim, as well as a claim based on U.C.C. § 8-315 (allowing action by any person against whom transfer of security is “wrongful”). See Complaint of the Intervenors, Docket No. 61.

      . The Court takes note of the fact that it could find no case with facts similar to the current situation in which the original owner of stolen bonds was aligned on the same side of a lawsuit with a broker/dealer involved in a subsequent transaction with the bonds. See, e.g., New Jersey Bank, N.A. v. Bradford Securities Operations, Inc., 690 F.2d 339 (3d Cir.1982) (bank which accepted stolen bonds as security for loan sued original owner of bonds); Fidelity & Casualty Co. of New York v. Key Biscayne Bank, 501 F.2d 1322 (5th Cir.1974) (original owner of stolen stock sued bank which accepted stock as loan collateral; bank sued, as third-party defendant, man who presented stock to bank); Morgan Guaranty Trust Co. v. New England Merchants Nat’l. Bank, 438 F.Supp. 97 (D.Mass.1977) (original owner of stolen Treasury bills sued bank which negotiated stolen bills; defendant bank sought indemnity in third-party action from bank for whom it served as correspondent in transaction).

      . Two possible obstacles to suit in state court— the statute of limitations and personal jurisdiction over out-of-state defendants—do not appear to pose problems here. The claims of B & S in this litigation would be governed by Del.Code Ann. tit. 10, § 8106 (1975), which provides a three-year limitations period for actions based on a statute (in this case, the U.C.C.). The transactions at issue here occurred in April and May of 1983, so any state court action brought before May 1986 should be timely.
      In addition, Kellam did not claim that the Court lacked personal jurisdiction over him in this action, and it is very doubtful that he could argue successfully that he falls outside the coverage of Delaware’s long-arm statute, Del.Code Ann. tit. 10, § 3104 (Supp.1984). See Wilmington Supply Co. v. Worth Plumbing & Heating, Inc., 505 F.Supp. Ill (D.Del.1980) (out-of-state defendant which had open-running credit account with Delaware plaintiff for at least four years had purposely availed itself of privilege of acting in Delaware and was subject to jurisdiction there).

      . Jet Traders dealt with the practical impairment requirement under Rule 24(a)(2) intervention of right. The requirement in relation to Rule 19 indispensability is similar. See supra note 4.

      . Because of the Court’s resolution of this matter, the third question which the Court asked the parties to brief is moot. Kellam has stated that he will voluntarily dismiss his counterclaim against B & S without prejudice in the event that the Court dismisses B & S’s claims for lack of complete diversity. See Defendant Kellam’s Answering Brief at 18, Docket No. 72.