author: SPIEGEL, District Judge.

text:
    David A. YUNGKAU, Plaintiff, v. DEAN WITTER REYNOLDS, INC., Defendant. Danielle Ann YUNGKAU, Plaintiff, v. DEAN WITTER REYNOLDS, INC., Defendant.
    Nos. C-1-83-1532, C-1-84-0184.
    United States District Court, S.D. Ohio, W.D.
    May 9, 1985.
    W. Joseph Dehner, Cincinnati, Ohio, for plaintiff.
    Roger J. Makley, Dayton, Ohio, for defendant.
   ORDER DENYING MOTION TO DISMISS

SPIEGEL, District Judge.

This matter came on for consideration of defendant’s motion to dismiss, or in the alternative, for summary judgment (doc. 25), which is opposed by plaintiffs’ memorandum (doc. 30), to which defendant has replied (doc. 36). The motion goes to the complaints in both the above-captioned cases, which have been consolidated for pretrial purposes.

In this action, plaintiff, David A. Yungkau, brings several claims against Dean Witter Reynolds, Inc., including one for intentional or reckless infliction of emotional distress (see Count IV of complaint in Case No. C-l-83-1532). Subsequently, plaintiff, Danielle Ann Yungkau, David A. Yungkau’s wife, filed a separate action against Dean Witter, alleging that its conduct towards her husband caused him “physical symptoms ..., anxiety, nervousness, and mental distress,” which in turn caused her severe emotional distress, nervous shock, and mental anxiety (see paragraph 5 of the complaint in Case No. C-l-84-0184). Mrs. Yungkau alleges two separate claims in her complaint; first, that Dean Witter was guilty of extreme and outrageous conduct toward her husband, and the second alleging that Dean Witter owed her a duty to refrain from conduct toward her husband which would cause her the aforementioned emotional distress.

Dean Witter, by its motion, challenges those claims seeking relief for emotional distress, which comprise Count IV of David A. Yungkau’s complaint and both claims of his wife Danielle’s complaint because neither of the plaintiffs have alleged any threat of physical violence by Dean Witter. Defendant considers an allegation of such threats necessary to state a claim for which relief can be granted under Ohio law.

Initially, plaintiffs resist the motion on procedural grounds. Plaintiffs argue that if defendant’s motion is considered a Rule 12 motion to dismiss, it is out of time and should be denied. However, we conclude that defendant’s motion may be considered as a Rule 56 motion for summary judgment since that rule provides that such a motion may be made with or without supporting affidavits.

Next, we confront the issue drawn by defendant’s motion and plaintiffs’ response: whether Ohio law permits an action to recover for intentional or reckless emotional distress to proceed absent an allegation of threats of physical violence;

Since the recognition of the cause of action for intentional infliction of emotional distress in Yeager v. Local Union 20, Teamsters, Chauffeurs, Warehousemen & Helpers, 6 Ohio St.3d 369, 453 N.E.2d 666 (1983) , Ohio courts have consistently referred to the Restatement of Law (2d) Torts, 346 (1) (1965) to define actionable conduct. Yeager, 6 Ohio St.3d at 374-75, 453 N.E.2d 666; Reamsnyder v. Jaskolski, 10 Ohio St.3d 150, 153, 462 N.E.2d 392, 395 (1984) , per curiam; Pyle v. Pyle, 11 Ohio App.3d 31, 34, 463 N.E.2d 98, 101 (1983). The Restatement delineates the cause of action as follows:

One who by extreme and outrageous conduct intentionally or recklessly causes severe emotional distress to another is subject to liability for such emotional distress, and if bodily harm to the other results from it, for such bodily harm.

Restatement of Law (2d) Torts, § 46(1) at 71. The Restatement defines outrageous conduct in comment (d) which provides in pertinent part:

Liability has been found only where the conduct had been so outrageous in character, and so extreme in degree as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. Generally, the case is one in which the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him to exclaim “outrageous.”

Id. Comment (d) at 73. Nowhere does the Restatement or the comments relevant thereto specifically require a threat of physical violence as necessary to a well pleaded claim for intentional infliction of emotional distress.

Similarly, we find no such threat of physical violence requirement in Ohio case law. Defendant contends that the case law reflects a pattern in which plaintiffs subjected to threats of physical violence were permitted to proceed on their claims, whereby plaintiffs spared such threats found their claims barred as a matter of law. See Yeager, 6 Ohio St.3d 369, 453 N.E.2d 666 (plaintiff submitted to threats of physical violence entitled to reversal of entry of summary judgment against him); Reamsnyder, 10 Ohio St.3d 150, 462 N.E.2d 392 (In per curiam opinion, Court held, without significant discussion, that telephone negotiations with insurance agent which did not include threats of physical violence were not “extreme and outrageous” as a matter of law. Conversely, as to another defendant who threatened plaintiff with physical violence, the Court permitted the action to proceed); Pyle v. Pyle, 11 Ohio App.3d 31, 463 N.E.2d 98 (held that defendant’s conduct in moving children from Cleveland area to Columbus without notice to plaintiff, and allowing child to purchase gift for plaintiff with knowledge of plaintiff’s allergy to said gift was not extreme and outrageous actionable conduct). Undeniably, the pattern perceived by defendant exists; however, we are reluctant to say that this pattern is the product of jurisprudential design.

To our knowledge, no Ohio court of appeals has squarely addressed the issue of whether a threat of physical violence is the only type of outrageous conduct actionable under an intentional infliction of emotional distress theory. Setting aside the per curiam opinion in Reamsnyder, 10 Ohio St.3d 150, 462 N.E.2d 392 as devoid of significant discussion, all indications from Ohio courts suggest that no such requirement exists. Justice Holmes’ dissent in Yeager, 6 Ohio St.3d at 376, 453 N.E.2d 666, suggests that, were actionable outrageous conduct limited to threats, the Yeager majority would have had no reason to overrule Bartow v. Smith, 149 Ohio St. 301, 70 N.E.2d 735 (1948). Furthermore, in Pyle, 11 Ohio App.3d at 34, 463 N.E.2d 98, the Court of Appeals cited Agis v. Howard Johnson Co., 371 Mass. 140, 355 N.E.2d 315 (1976) as a useful source for definition of outrageous conduct. Agis, like the instant case, involved allegedly wrongful termination of employment unaccompanied by threats of physical violence.

Based on these indicia from the developing case law, we are convinced that Ohio courts have not yet limited the definition of actionable outrageous conduct to threats of physical violence as suggested by defendant. Rather, we agree with the plaintiffs that the wrongful interference or termination of an employment relationship may be so extreme and outrageous as to constitute the egregious conduct necessary to support the tort of intentional infliction of emotional distress.

Accordingly, at this time, we hereby deny defendants’ motion to dismiss, or in the alternative, for summary judgment. However, we will reconsider our position should an Ohio court of last resort clearly announce, before trial of this matter, that a threat of physical violence is a requirement for the tort of intentional infliction of emotional distress.

SO ORDERED.

      . Document references are to Case No. C-1-83-1532.

      . In Agis, a restaurant manager fired waitresses in alphabetical order in attempt to discover a dishonest employee.


source: Caselaw Access Project

author: DILLIN, District Judge.

license: Public Domain

text:
    Warren H. DAVIS, Plaintiff, v. INGERSOLL JOHNSON STEEL COMPANY, INC., Defendant.
    No. IP 82-793-C.
    United States District Court, S.D. Indiana, Indianapolis Division.
    June 28, 1985.

      Raymond J. Hafsten, Jr., Indianapolis, Ind., for plaintiff.
    William P. Wooden, Indianapolis, Ind., Michael C. Towers, Benjamin B. Culp, Jr., Atlanta, Ga., for defendant.
   MEMORANDUM OF DECISION

DILLIN, District Judge.

This case came before the Court for trial on November 2, 1984. For the following reasons, judgment will be entered in favor of the plaintiff and damages will be awarded in the amount of $11,987.66 plus costs.

Background

This case was initiated by the plaintiffs against the defendant alleging a violation of the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. The present trial concerned only the alleged wrongful discharge of plaintiff, Warren H. Davis, from his employment as a security guard for defendant Ingersoll Johnson Steel Company, Inc. (hereafter Ingersoll Johnson).

Davis was employed in a variety of positions with Ingersoll Johnson from 1945 to 1981 with the exception of eight years, from 1959 to 1967, when Davis was granted leave to act as Sheriff of Henry County. Prior to Davis’s term as Sheriff, he worked in various positions within the union bargaining unit, accumulating 21 vested years of seniority in the unit. Upon seeking rehiring in 1967, Davis was offered and accepted a management position as assistant foreman in shipping and receiving.

Davis remained in a supervisory position, with no complaints about his job performance until 1971. At that time, Ingersoll Johnson’s cold rolling facility was closed and Davis was asked if he would accept a position in plant protection. • He accepted the job and worked as a security guard on the second (evening) shift for the next 10 years. Davis’s duties as security guard included checking all personnel entering and leaving the plant, picking up bills of lading for after hours deliveries, and performing periodic safety inspections of the plant.

Throughout Davis’s employment at Ingersoll Johnson, he received regular salary increases and was not criticized in his job performance except in December, 1980. On a performance appraisal dated December 15, 1980, Davis was rated lower than he had been in the past by Roy Bovender, a personnel assistant. Davis testified that he protested the low rating and that Bovender told him he had done only what he was told to do and that he had rated all of the security guards alike. The evidence showed that Davis’s name appeared on a list of “Possibles” compiled in August 1980 by the company president, Grant John, which list contained the names of older employees who were eligible for retirement, many of whom were ultimately discharged by the end of 1981.

In late summer and fall of 1981, Ingersoll Johnson suffered a business downturn which continued through 1982 and required a reduction in the company’s work force. On November 19, 1981, at age 60, Davis was notified of his impending termination and was offered early retirement. Davis objected to this action by the company and requested a transfer to another supervisory position or a position within the bargaining unit for which he was qualified. He was refused both. Davis was terminated effective November 30, 1981 and ultimately, in July, 1983, he elected early retirement to obtain needed medical insurance and other benefits.

Ingersoll Johnson’s president, Grant John, testified that as part of the November, 1981 reduction in force, management decided to utilize the security guard jobs as “holding” positions to retain more valued employees whose skills might be needed if business improved or who could perform other functions while also doing security guard duties. Three of the four security guards then employed by Ingersoll Johnson were replaced in November, 1981. E.M. Poynter, age 56, was retained as a guard and the three replacement guards were Roy Bovender, age 61; Phillip Orr, age 52; and Don Wallace, age 30. Bovender had previously been a guard before moving to the position of personnel assistant and could perform some of his personnel assistant duties during idle time as a guard. Orr had been a rolling mill supervisor and was retained in anticipation of a future need for his skills in that area. Wallace had been employed at Ingersoll Johnson for only six months as a receiving clerk. Wallace was retained to perform receiving clerk duties during idle time as a security guard.

Davis showed that he had prior supervisory experience in the shipping and receiving department and had performed some receiving clerk duties as a part of his duties as security guard. Davis also presented evidence that his name appeared on a second list of employees who were targeted for termination or retirement which was compiled in November, 1981. Wallace and Orr were also on this list but were not terminated.

In May, 1982, Orr was moved back to his former position as rolling mill supervisor. As a guard, Orr had been on the third (overnight) shift. Davis was offered reinstatement as a guard to fill this vacancy but Davis refused the offer because he could not work the third shift because of family circumstances.

In a prior trial in this case, involving separate plaintiffs, statistical evidence was presented showing that a greater percentage of Ingersoll Johnson’s older employees were terminated in 1981. Further evidence at the prior trial disclosed that company managers stated that they wanted “young and aggressive” and “youthful, hard hitting employees,” and that older employees should be terminated to make way for younger blood. The evidence presented at the prior trial was stipulated into evidence in the Davis trial.

Discussion

In an age discrimination case, the plaintiff has the ultimate burden of proving that he was discharged because of his age. La Montague v. American Convenience Products, Inc., 750 F.2d 1405, 1409 (7th Cir.1984). To meet this burden, the plaintiff must show that his age was “a determining factor” in the defendant’s decision to terminate him. Id.; Golomb v. Prudential Insurance Co., 688 F.2d 547 (7th Cir. 1982). The plaintiff need not show that his age was the sole motivating factor in the termination decision but he must be able to show that the defendant would not have discharged him “but for” its motive to discriminate against him due to his age. La Montagne v. American Convenience Products, Inc., supra; Golomb, supra. The plaintiff may prove discrimination directly, by presenting direct or circumstantial evidence, or he may prove his claim indirectly, through the use of the standard set forth and explained in the two United States Supreme Court cases of McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973), and Tex as Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981). La Montagne v. American Convenience Products, Inc., supra, at 1409. Under the McDonnell Douglas or Burdine standard, as stated by the Seventh Circuit Court of Appeals in La Montagne, the plaintiff must first “prove a prima facie case of discrimination, by showing (1) that he was in the protected class, (2) that he was doing his job well enough to meet his employer’s legitimate expectations, (3) that in spite of his performance he was discharged, and (4) that the employer sought a replacement for him.” 750 F.2d at 1409. The Court of Appeals noted with regard to the second factor listed above that in discriminatory hiring cases, the plaintiff would be required to show that he was qualified for the job but that in termination cases, the plaintiff’s job performance was the appropriate measure of his qualification for the position.

If the plaintiff is successful in establishing a prima facie case, a rebuttable presumption of discrimination arises and the defendant then has the burden of articulating lawful reasons for the discharge. Id. at 1409. The burden of persuasion, however, remains at all times on the plaintiff. If the defendant sets forth lawful reasons for the discharge, the plaintiff must prove that the proffered reasons are a mere pretext for discrimination. Id.

In the present case, the plaintiff, Davis, showed that his name appeared on a possible termination or retirement list as early as August, 1980, that he was performing his job satisfactorily until he received a low performance rating in December, 1980 by Bovender, who was only “doing what he was told to do;” that his name also appeared on a termination/retirement list prepared in the fall of 1981 along with the names of other employees who were not ultimately separated from the company including Don Wallace and Phillip Orr; and that a disproportionate percentage of older employees were separated from the company in 1981. Not only is this direct evidence highly suggestive that age was a determining factor in the decision to terminate Davis, but Davis has otherwise clearly met his burden of proving age discrimination under the McDonnell Douglas standard.

Davis showed that at age 60 he was in the protected class, that he was meeting his employer’s legitimate expectations as a security guard, that in spite of his performance he was discharged, and that he was replaced.

Ingersoll Johnson attempted to show a legitimate business reason for terminating Davis by showing that a severe business downturn necessitated a reduction in force in November, 1981 and that more valuable employees were moved into the three guard positions. Nevertheless, Davis showed that he was targeted for termination as early as August, 1980, that he received a low performance rating upon orders of Ingersoll Johnson management, that he was qualified to perform the duties of receiving clerk which were performed by Wallace after Wallace’s move to the security guard position, and that a disproportionate number of older employees were selected to be terminated in the reduction of force. The evidence shows that Ingersoll Johnson considered terminating Davis as an older employee prior to the business downturn in November, 1981 and continued to terminate older employees over younger employees in its decisions regarding work force reductions. Therefore, Davis has met his burden of showing that Ingersoll Johnson’s proffered business reasons for terminating the plaintiff are a mere pretext and that age was a determining factor in the decision to terminate him.

In the event liability on the part of Ingersoll Johnson was found, the parties stipulated to the amount of damages incurred by the plaintiff with the exception of certain issues. Ingersoll Johnson argues that the calculation of damages should be made only from the date of Davis’s termination on November 30, 1981 through the date the company offered to reinstate the plaintiff to a guard position on May 15, 1982. Although the offer of reemployment was vague as to what shift Davis would work, the offer was for reinstatement to a security guard position. The record shows that when Davis was employed as a security guard, he could have been transferred to another shift at any time. The offer for any shift, therefore, constituted an offer of reemployment to Davis’s original position or to a substantially similar position.

The United States Supreme Court, in Ford Motor Co. v. EEOC, 458 U.S. 219, 102 S.Ct. 3057, 73 L.Ed.2d 721 (1982), found that an unconditional offer of employment to the plaintiff’s original position or to a substantially similar position would toll the accrual of back pay liability. Id. at 232, 102 S.Ct. at 3065-66, 73 L.Ed.2d at 732-33. Ingersoll Johnson’s offer to Davis was unconditional. He would not have forfeited his claims with regard to this lawsuit if he had accepted the proffered employment. Therefore, Ingersoll Johnson’s offer of May 15, 1982 effectively tolls the accrual of back pay liability to Davis, and damages accordingly will be calculated to that date.

The stipulated damages, calculated through May 15, 1982, include back wages of $8,531.95 and lost pension benefits of $2,513.68. In addition, we find that he should recover medical bills of $965.27 incurred during such period. But for his termination said bills would have been covered by the defendant’s group insurance policy.

Lastly, a dispute exists as to whether the plaintiff’s income as a bail bondsman following his termination should be applied to reduce his damages from loss of wages. We think not. Davis operated his bail bonding business from his home as a part-time job both before and after his separation from Ingersoll Johnson. The income from his bail bonding did not increase following his termination from the company in November, 1981. Davis would have earned the income from that business during the years 1981 and 1982 regardless of his employment status at Ingersoll Johnson. Therefore, the income from Davis’s bail bonding business will not be deducted from the back pay liability of Ingersoll Johnson.

Judgment will therefore be entered for the plaintiff in the amount of $11,987.66, plus attorneys fees and costs. We do not find the defendant’s violation of the ADEA to have been willful. The parties are directed to attempt agreement as to the attorneys fees, but in any event plaintiff’s claim for such fees must be filed within 30 days if no agreement is reached.


author: CARRIGAN, District Judge.

text:
    UNITED STATES of America, Plaintiff, v. Gerald H. WILKINSON, First National Bank of Boulder, and the County of Boulder, State of Colorado, Defendants.
    Civ. A. No. 81-C-2061.
    United States District Court, D. Colorado.
    July 25, 1985.

      Robert S. Horwitz, Trial Atty., Tax Div. Dept, of Justice, Washington, D.C., Nancy E. Rice, Asst. U.S. Atty., Denver, Colo., for plaintiff.
    William Ahlstrand, Boulder, Colo., for First Nat. Bank of Boulder.
    Peter Van Zante and William Meyer, Boulder, Colo., for Boulder County.
   ORDER

CARRIGAN, District Judge.

On June 11,1980, officers from the Boulder County, Colorado, Sheriff’s Department discovered 340 pounds of marijuana, other narcotics, $605,000 in cash and sixteen precious stones at Gerald H. Wilkinson’s house in Boulder County, Colorado. On June 2, 1980, the Boulder County District Attorney filed a civil action in Boulder County District Court pursuant to Colo. Rev.Stat. § 16-13-303 (1973) seeking seizure and forfeiture of the property. On June 13, 1980, Judge Richard Dana entered an appropriate order and the Boulder County Sheriff executed that order by seizing the property and cash. The $605,000 cash was deposited in the First National Bank of Boulder.

The Internal Revenue Service (IRS) assessed $2,331,675.55 in income taxes against Wilkinson for the period from January 1, 1980 to June 30, 1980. On June 19, 1980, the United States filed a notice of federal tax lien with the Boulder County Recorder. On October 14, 1980, Judge Dana issued an order declaring that the property was forfeited as of June 13, 1980. Judge Dana’s order placed $300,000 of the cash in an escrow account to be used to pay “the Internal Revenue Service of the United States of America for income tax liability of the defendant resulting from this circumstance only.”

The United States filed this action on November 27, 1981, seeking to foreclose on its revised tax lien of $700,000. The government can only enforce its tax lien against the seized cash and property if Wilkinson had property rights in it at the time the lien was filed. Aquilino v. United States, 363 U.S. 509, 513, 80 S.Ct. 1277, 1280, 4 L.Ed.2d 1365 (1960). Because no Colorado law existed regarding when Wilkinson’s property rights terminated, the following question was certified to the Colorado Supreme Court:

“What is the nature and extent of the property interest, if any, retained by a person subsequent to the seizure of his property pursuant to § 16-13-303, C.R.S. 1973, as effective on June 13, 1980, but prior to judicial determination pursuant to §§ 16-13-307, et seq., C.R.S.1973?”

The State Supreme Court thus resolved the issue on August 27, 1984:

“We hold that a person is divested of all rights and interests in property upon its seizure under the Colorado Abatement of Public Nuisance statute (Public Nuisance statute), sections 16-13-301 to -316, 8 C.R.S. (1978 & 1983 Supp.). Therefore, our answer to the certified question is that there is no property interest retained during the period in question.”

The parties have submitted cross motions for summary judgment. Defendant County of Boulder, also seeks attorneys’ fees from the plaintiff. The parties have briefed the issues thoroughly, and oral argument would not assist in resolving them. Jurisdiction is based on 28 U.S.C. §§ 1340 and 1345 (1982).

Under the rule announced by the Colorado Supreme Court, Wilkinson’s property rights ended on June 13, 1980, the date of the seizure. Thus on June 19, 1980, when the IRS filed notice of its tax lien against Wilkinson’s property Wilkinson had no property interest in the contested funds and property. It had been forfeited to Boulder County, nunc pro tunc. The tax lien cannot be enforced because it is a lien against nothing.

The government agrees that Colorado property law governs the issue of Wilkinson’s ownership rights. However, it argues that the “legal fiction” of terminating Wilkinson’s ownership on the date of the seizure cannot cut off the federal tax lien. The government relies on two cases: United States v. Acri, 348 U.S. 211, 75 S.Ct. 239, 99 L.Ed. 264 (1955); and United States v. Security Trust & Savings Bank, 340 U.S. 47, 71 S.Ct. 111, 95 L.Ed. 53 (1950). In both Acri and Security Trust, a competing creditor had obtained an attachment lien prior to the date the tax lien arose, but did not obtain a judgment against the taxpayer until after the tax lien’ arose. Under applicable state law, the judgment lien related back to the time the attachment arose. The Supreme Court held that the “relation back doctrine” would not defeat the priority of the federal tax lien.

Those cases are unlike the present case because they involved the competing priority of liens. Here, the issue does not involve the priority of Boulder County’s “lien” or the date on which Wilkinson encumbered his property rights with a lien, but rather the date on which Wilkinson surrendered all his ownership rights.

The government contends that even if Judge Dana’s forfeiture order related back to June 13, 1980, and thereby avoided the government’s tax lien, the government is still entitled to the $300,000 that Judge Dana escrowed for the express purpose of paying Wilkinson’s federal tax liability. The government argues that even if it cannot enforce its tax lien, Judge Dana granted them part of their claim in his forfeiture order.

Colorado Revised Statute § 16 — 13— 311 (1973), in effect at the time Judge Dana considered this matter, set forth how property obtained in § 16-13-303 forfeiture proceedings was to be distributed. Section 16-13-311 does not allow distribution of forfeiture proceeds to lien creditors or to pay tax liability. Judge Dana simply did not have the authority to grant the seized property to the federal government to pay Wilkinson’s unpaid taxes.

Boulder County has moved for attorneys’ fees against the government. Because this action involved very close legal questions presented without guidance of any established precedents, and because the briefs on both sides competently argued the issues, it would not be appropriate to assess attorneys’ fees against the government.

Accordingly, IT IS ORDERED that

1. Defendant’s motion for summary judgment is granted; the plaintiff’s complaint is dismissed with prejudice;

2. Plaintiff has no interest in the funds and personal property held by the First National Bank of Boulder; and

3. Defendant’s motion for costs and attorneys’ fees is denied.

      . The government was not even a lien creditor.


author: SCOTT O. WRIGHT, Chief Judge.

text:
    Phyllis T. JOHNSTON, Plaintiff, v. SPECIALTY RESTAURANTS CORP., Defendant.
    No. 83-0462-CV-W-5.
    United States District Court, W.D. Missouri, W.D.
    Aug. 20, 1985.

      James F. Ralls, Jr., Olsen & Talpers, Inc., Kansas City, Mo., for plaintiff.
    Karen Iverson, Irwin E. Blond, Lathrop, Koontz, Righter, Clagett & Norquist, Kansas City, Mo., for defendant.
   ORDER

SCOTT O. WRIGHT, Chief Judge.

Pending before the Court are various post-trial motions. The Court will make the following rulings:

1. Defendant’s motion for judgment notwithstanding the verdict and alternative motion for a new trial must be overruled. Defendant has raised four points in support of these motions, none of which have merit.

First, defendant claims that the jury’s damage award of $21,115.60 on plaintiff’s retaliatory discharge claim was not supported by the evidence. Specifically, defendant argues that the maximum backpay award to which plaintiff was entitled was $14,396.00. The $14,396.00 figure reflects the sum plaintiff would have earned as a second-desk auditor during the thirty months between her discharge and the day of trial ($1,000.00 per month X 30 months = $30,000.00), minus the amount plaintiff received in wages and unemployment benefits over that time period ($15,604.00). Thus, defendant contends that the jury’s damage award on plaintiff’s retaliatory discharge claim exceeded the maximum allowable under the evidence by nearly $7,000.00.

The critical flaw in defendant’s argument is its assumption that plaintiff would have earned only the second-desk auditor wage of $1,000.00 per month if she had not been wrongfully discharged. As the jury implicitly found in the instant case, however, plaintiff would have been promoted to first-desk auditor if she had not been discharged in retaliation for her protected activity. The first-desk auditor position carried a starting salary of $1,200.00 per month. In addition, there was evidence that every six months plaintiff received regular salary increases of $50.00 per month while she worked for defendant. Thus, the evidence supported a jury finding that plaintiff would have earned up to $39,-000. 00 if she had not been wrongfully discharged. Subtracting the $15,604.00 plaintiff received as interim earnings and unemployment benefits, it becomes evident that the maximum damage award supported by the evidence was $23,396.00. Accordingly, defendant’s contention that the jury’s award of $21,115.60 was beyond the maximum allowed by the evidence must be rejected.

Defendant’s second point is that the Court erred in admitting testimony concerning statements made by Nancy Hamilton, the manager of the restaurant where plaintiff worked. These statements by Nancy Hamilton — to the effect that plaintiff should be punished for turning defendant in to the Department of Labor — were crucial to plaintiffs case. Defendant claims that there was no foundation to establish that Hamilton’s statements were made in the scope of her employment or were communicated to other management employees of defendant who were in a position to affect plaintiff’s employment. Defendant is absolutely wrong on this point. Defendant’s own evidence was that Linda Kinney Osterbrook was responsible for employment decisions concerning first and second-desk auditors such as plaintiff. Dan Kramer testified that Nancy Hamilton made her disparaging and retaliatory statements concerning plaintiff in the presence of Linda Kinney Osterbrook. Thus, Kramer’s testimony concerning Hamilton’s extrajudicial statements clearly was predicated on a proper foundation. Before trial, defendant filed a motion in limine to exclude Dan Kramer’s testimony concerning statements by Nancy Hamilton. At trial, notwithstanding Kramer’s testimony that Hamilton had made the statements in front of Linda Kinney Osterbrook, defendant renewed its objection. Now, after the jury has implicitly found that Kramer’s testimony was more credible than that of Osterbrook, defendant still contends that plaintiff did not lay an adequate foundation. Defendant’s argument is wholly without merit.

Defendant’s third point is that the Court “erred in permitting plaintiff to adduce evidence intended to show that plaintiff was the victim of racial discrimination or retaliation.” There is simply no substance behind this allegation of error. The evidence to which defendant refers was introduced only as background information and certainly was not “intended to show” that plaintiff was a victim of racial discrimination.

Defendant’s final point of error is that the Court abused its discretion by excluding evidence that the Wage and Hour Division of the Department of Labor investigated plaintiff’s claim of retaliatory discharge and found no basis for her claim. As defendant acknowledges, the admissibility of that finding is a matter of discretion for the trial court. E.g., Briseno v. Central Technical Community College Area, 739 F.2d 344, 347 (8th Cir.1984). Here, the Court exercised its discretion to exclude this evidence for the basic reason that it has no probative value and tends to undermine the province of the jury.

Accordingly, defendant’s motion for judgment notwithstanding the verdict and alternative motion for a new trial will be overruled.

2. Plaintiff’s motion for a new trial on the issue of punitive damages under her service letter claim will be overruled. Under Missouri law, it is well-settled that the decision of whether to award punitive damages lies wholly within the discretion of the trier of facts. E.g., DeBow v. Higgins, 425 S.W.2d 135, 143 (Mo.1968).

3. Plaintiff’s motion for an award of liquidated damages in the amount of $22,-606.94 will be sustained. Plaintiff recovered two independent damage awards under the Fair Labor Standards Act (FLSA) in this case: $21,115.60 on her retaliatory discharge claim, and $1,491.34 on her unpaid overtime claim. Under 29 U.S.C. § 216(b), a prevailing plaintiff on a FLSA claim is presumptively entitled to her lost wages and an equal amount as liquidated damages. Under 29 U.S.C. § 260, an award of liquidated damages is mandatory unless the Court finds that the employer had a reasonable, good faith belief that it was not in violation of the FLSA.

Here, the Court finds that defendant did not have a reasonable, good faith belief that it was not in violation of the FLSA. To the contrary, defendant’s violations of the FLSA were willful. Defendant disputed plaintiff’s entitlement to overtime compensation up to the first day of trial. This “stonewalling” effort does not manifest good faith. In addition, the jury found that defendant intentionally discharged plaintiff in retaliation for her protected activity. Defendant relied on the testimony of Linda Kinney Osterbrook in contending that the decision to discharge plaintiff was not motivated by any unlawful purpose. That testimony was implicitly rejected by the jury as not credible. Instead, the jury expressly found that defendant terminated plaintiff’s employment because she had engaged in protected activity. The Court does not understand how such an intentional unlawful act could have been undertaken in good faith. Accordingly, plaintiff’s motion for liquidated damages will be sustained.

4. Plaintiff’s motion for an award of prejudgment interest on her FLSA will be conditionally overruled. The Eighth Circuit has held that a prevailing plaintiff in a FLSA case may not recover both liquidated damages and prejudgment interest. See Gibson v. Mohawk Rubber Co., 695 F.2d 1093, 1102 (8th Cir.1982). Consequently, in light of the Court’s decision to award plaintiff liquidated damages on both of her FLSA claims, prejudgment interest will be withheld. In the event that the Court of Appeals should disturb the liquidated damages awards, however, this Court would be inclined to award plaintiff prejudgment interest in the amount of 9 percent per annum. See Hodgson v. American Can Co., 440 F.2d 916, 921-22 (8th Cir.1971); Folz v. Marriott Corp., 594 F.Supp. 1007, 1016-17 (W.D.Mo.1984.)

5. Plaintiff’s motion for an award of attorney’s fees under 29 U.S.C. § 216(b) in the amount of $31,832.50 will be sustained. The Court has reviewed the itemized statement submitted by plaintiff’s attorneys and finds that the number of hours spent by plaintiff’s attorneys to be reasonable. In addition, the Court believes that the hourly rates of compensation listed by plaintiff’s attorneys are reasonable. Accordingly, under all of the relevant circumstances, see Clymore v. Far-Mar-Co., Inc., 576 F.Supp. 1161 (W.D.Mo.1983), the Court finds that the attorney’s fee award of $31,-832.50 sought by plaintiff is very reasonable.

6. Plaintiff’s motion for an award of her costs will be overruled without prejudice as being premature. Because she prevailed in this lawsuit, plaintiff is, of course, entitled to her costs. 29 U.S.C. § 216(b). Pursuant to local custom, however, the Court does not take the initial responsibility for preparation or approval of the bill of costs. Instead, the Clerk of the Court ordinarily prepares the bill of costs and sends it to the parties. At that time, the parties may object or propose additions to the bill prepared by the Clerk. Only after a dispute has been crystallized in that fashion does the matter become ripe for review by the Court.

In accordance with the foregoing, it is hereby

ORDERED that defendant’s motion for judgment notwithstanding the verdict and alternative motion for a new trial are overruled. It is further

ORDERED that plaintiff’s motion for a new trial on the issue of punitive damages on her service letter claim is overruled. It is further

ORDERED that plaintiff’s motion for an award of liquidated damages is sustained. It is further

ORDERED that the judgment herein is amended and judgment is now entered in the amount of $45,214.88 in favor of plaintiff and against defendant. This judgment reflects the following components: $21,-115.60 as actual damages on plaintiff’s retaliatory discharge claim; $21,115.60 as liquidated damages on plaintiff’s retaliatory discharge claim, $1,491.34 as actual damages on plaintiff’s overtime claim; $1,491.34 as liquidated damages on plaintiff’s overtime claim; and $1.00 as nominal damages on plaintiff’s service letter claim. It is further

ORDERED that plaintiff’s motion for prejudgment interest is overruled. It is further

ORDERED that plaintiff’s motion for an award of attorney’s fees in the amount of $31,832.50 is sustained. It is further

ORDERED that plaintiff’s motion for an award of costs is overruled without prejudice.

      . It was undisputed that, at approximately the same time plaintiff was discharged from her position as second-desk auditor, Dan Kramer was hired as first-desk auditor at a monthly salary of $1,200.00. Although there was disputed evidence on the issue, there clearly was sufficient evidence to support a jury finding that plaintiff would have been promoted to fill the first-desk vacancy but for her wrongful discharge. Indeed, the greater weight of the evidence tended to show that Dan Kramer-was far less qualified for the first-desk position than plaintiff and that plaintiff would have been promoted to the first-desk position but for defendant’s retaliatory animus.
      Defendant does not dispute the sufficiency of the evidence to support a finding that plaintiff would have been promoted but for her wrongful discharge; instead, defendant contends that the promotion issue was never pleaded as a theory of damages and was not mentioned in the damages instruction. The short answer to defendant's contention is that, under the Federal Rules of Civil Procedure, the pleadings are deemed to conform to the evidence adduced at trial. See Fed.R.Civ.P. 15(b) (when issues not raised by pleadings are tried by implied consent of the parties, they shall be treated as if they had been raised in the pleadings); see also Vogrin v. Hedstrom, 220 F.2d 863, 866 (8th Cir.1955). This rule is to be applied liberally to achieve substantial justice. E.g., Robbins v. Jordan, 181 F.2d 793, 794 (D.C.Cir.1950). The determination of whether an issue was tried by implied consent rests within the discretion of the trial court. E.g. Hardin v. Manitowoc-Forsytke Corp., 691 F.2d 449, 457 (10th Cir.1982). Here, the issue of retaliatory failure to promote as an element of damages clearly was tried by the implied consent of the parties. Defendant never objected to evidence concerning the relative qualifications of plaintiff and Dan Kramer as being beyond the scope of the pleadings, despite the fact that this evidence obviously reflected on plaintiff's measure of damages. Indeed, defendant spent a substantial amount of time attempting to show that plaintiff was not qualified for the first-desk auditor position. Under these circumstances, the Court is compelled to hold that the issue of retaliatory failure to promote as an element of damages was tried by the implied consent of the parties and that the pleadings are deemed to be amended to raise that issue. See, e.g., Troutman v. Modlin, 353 F.2d 382, 384-85 (8th Cir.1965) (upholding jury award of $10,000 even though plaintiffs complaint prayed for only $2,000 where evidence at trial indicated additional element of damages); see also Peterson v. Auto Wash Mfg. & Supply Co., 676 F.2d 949, 954 (8th Cir. 1982) (issue was tried by implied consent where testimony on the issue was adduced without objection). Although the damages instruction submitted to the jury did not explicitly mention retaliatory failure to promote, the Court believes that it was broad enough to encompass the issue. The instruction, which was based on Mo. Approved Instr. 4.01, generically stated that the jurors were to "... award the plaintiff such sum as [they] believe will fairly and justly compensate the plaintiff for any lost wages [they] believe she sustained...” Instruction No. 10 (emphasis added).

      . The following chart reflects how this $39,-000.00 figure was calculated:
      Six-Month Period Monthly Salary Maximum Salary Supported by the Evidence Balance
      1-6 $1200 $7200 $ 7,200
      7-12 $1250 $7500 $ 14,700
      13-18 $1300 $7800 $22,500
      19-24 $1350 $8100 $ 30,600
      25-30 $1400 $8400 $ 39,000

      . Osterbrook testified on behalf of defendant and categorically denied that Hamilton had made any disparaging remarks to her concerning plaintiff. Dan Kramer’s testimony — that Hamilton made the disparaging remarks in Osterbrook's presence — was equally unequivocal. Thus, the case boiled down to a credibility dispute to be resolved by the jury. By its verdict, the jury has indicated that Kramer was a credible witness and that Osterbrook was not. The Court concurs with the jury’s credibility finding. Dan Kramer was forthright and candid on the witness stand. Moreover, he had no motive to falsify or forget what had occurred. In contrast, Linda Kinney Osterbrook appeared tentative, hesitant, and worried on the witness stand. In addition, if she had been influenced in her employment decisions by Hamilton’s disparaging remarks concerning plaintiff, she would not be particularly inclined to reveal that fact in open Court.

      . See note 3 supra.


author: JOHN H. MOORE, II, District Judge.

text:
    AMOCO OIL COMPANY, Plaintiff, v. SOUTHEASTERN MAIL TRANSPORT, INC., a corporation, et al., Defendants. T.E. MOYER TRUCK SERVICES, INC., a Florida corporation, Plaintiff, v. SOUTHEASTERN MAIL TRANSPORT, INC., a corporation, et al., Defendants. JACKSONVILLE MACK TRUCKS, INC., a corporation, Plaintiff, v. T.E. MOYER TRUCK SERVICES, INC., a corporation, et al., Defendants.
    Nos. 82-961-Civ-J-JHM, 82-962-Civ-J-JHM and 82-1026-Civ-J-JHM.
    United States District Court, M.D. Florida, Jacksonville Division.
    Aug. 20, 1985.
    William D. Brinton, Jacksonville, Fla., for Amoco Oil Co.
    Dorothea Beane, Asst. U.S. Atty., Jacksonville, Fla., for Southeastern Mail Transport, Inc.
    Travis T. Lynch, Asst. Regional Counsel, U.S. Postal Service, Atlanta, Ga., for U.S. Postal Service.
   ORDER

JOHN H. MOORE, II, District Judge.

The above-styled causes are garnishment actions brought by judgment creditors of Southeastern Mail Transport, Inc. (Southeastern) to satisfy their judgments out of the $359,582.25 debt owed to Southeastern by the United States Postal Service. For the reasons that follow, the Court has determined that the Postal Service’s debt is not subject to garnishment and that the writs of garnishment must therefore be dissolved.

Southeastern, a contract mail carrier for the Postal Service, encountered financial difficulties and defaulted on its contracts with the Postal Service in 1981. An investigation conducted by the Department of Labor also revealed that Southeastern had underpaid its employees and violated the Service Contract Act. Consequently, on July 2, 1981, the Wage & Hour Division of the Department of Labor requested the Postal Service to withhold all funds due to Southeastern pursuant to 41 U.S.C. § 352(a) and 39 U.S.C. § 410(b)(5)(B). The Postal Service complied with this request, but did not deposit the withheld sum in a deposit fund.

Plaintiffs, AMOCO OIL COMPANY and T. E. MOYER TRUCK SERVICES, INC., thereafter obtained final judgments against Southeastern. Amoco Oil Company recovered and recorded a final judgment for unpaid fuel oil in the amount of $281,653.00 on October 19, 1981. T.E. Moyer Truck Services, Inc. obtained and recorded final judgments for unpaid repair bills in the amount of $14,950.00 and $91,026.00 on December 22, 1981 and March 25, 1982, respectively. To collect on these judgments, Plaintiffs served writs of garnishment on the Postal Service in July and September of 1982.

In November, 1982, the Department of Labor initiated administrative proceedings to obtain judgment against Southeastern for its underpaid employees. This administrative action is still pending.

The issue to be decided is whether funds withheld at the Department of Labor’s request pursuant to the Service Contract Act are subject to garnishment prior to the commencement of an administrative proceeding to reduce the Department of Labor’s claim to judgment.

The Service Contract Act provides that a government agency must withhold funds from a contractor whom the Department of Labor believes has violated the Act in order to compensate underpaid employees. 41 U. S.C. § 352(a), The regulations further provide that contract funds may be withheld prior to the institution of administrative proceedings by the Secretary. 29 C.F.R. § 4.187(a). Finally, the regulations unequivocally state that the contractor has no property rights to amounts withheld from the contract to cover underpayments of workers that violate the law and the terms of the contract. Id. at § 4.187(b)(4).

The law is well-established that a garnishor stands in the shoes of the debtor and can assert only those rights that the debtor could assert to the garnished funds. Southeastern is not entitled to the funds withheld at the Department of Labor’s request until the administrative proceedings are concluded and until any underpaid employees are compensated in accordance with the Service Contract Act. Thus, Plaintiff’s inability to establish that Southeastern has an unfettered right to the funds presently held by the Postal Service precludes them from garnishing those funds.

Accordingly, the Court now

ORDERS and ADJUDGES:

That the writs of garnishment served and filed in the above-styled causes be and the same are hereby DISSOLVED.


text:
    UNITED STATES of America, Plaintiff, v. Theodore James COOK, Defendant.
    Crim. A. No. 84-CR-293.
    United States District Court, D. Colorado.
    Aug. 27, 1985.

      Dawn Bowen, William Welch, Asst. U.S. Attys., Denver, Colo., for plaintiff.
    Ira M. Long, Jr., Denver, Colo., for defendant.
   MEMORANDUM ORDER ON APPLICATION FOR ATTORNEY FEES

JOHN P. MOORE, Circuit Judge, Sitting by Designation.

This matter is before me upon the application of defendant’s counsel for attorney fees pursuant to the provisions of the Criminal Justice Act. Counsel originally sought fees in the amount of $16,628.00, plus reimbursement of costs in the amount of $7,550.11, for a total award of $24,178.11. While these are not the figures reflected on the CJA form 20 originally filed by counsel, they are the figures arrived at after consideration of the amended documents filed pursuant to the Court’s order of July 16, 1985. A reexamination of costs subsequent to the hearing on this application has resulted in counsel’s reduction of costs by $1,160.00.

At the outset, it is necessary to observe that the application on its face suggests a misperception of the nature of an appointment under the Criminal Justice Act. Such appointments are to protect the rights of the indigent accused, and they are neither to be sought nor made for the purpose of providing income to attorneys. United States v. Moore, 258 F.Supp. 790 (D.C.1966); United States v. James, 301 F.Supp. 107 (W.D.Tex.1969); United States v. Harper, 311 F.Supp. 1072 (D.C.1970); United States v. Tutino, 419 F.Supp. 246 (S.D.N.Y.1976). Indeed, acceptance of an appointment under the Act is tantamount to acceptance of a public service. The Congress has seen to it, in the passage of the Act, that the service is not completely onerous, but from the fees authorized by law, it should be abundantly clear to even the novice lawyer the Congress has not intended that the service be remunerative. By the same token, the spirit of public service involved in such an appointment cannot be avoided by increasing the expenditure of hours simply to obtain a fee in keeping with the standards of private practice.

In short, I view this application with the foregoing notions in mind, bent upon the task the Congress has assigned trial courts to award fees and reimbursement within the strictures of the statute. As a notable patina to these strictures, there is also to be observed a need to avoid a mindless parsimony as well as a vicarious generosity with the taxpayers’ money.

Under the terms of 18 U.S.C. § 3006A(d)(l), the guidelines to be applied here are that compensation be based upon time “reasonably expended” and reimbursement be for expenses “reasonably incurred.” The ultimate goal to be achieved is “fair compensation” for counsel. 18 U.S.C. § 3006A(d)(3). Given the nature of this case, I must also determine whether it was “complex” or “extended.” Id. As one might expect, these terms are not without definition..

Considering first whether compensation in excess of the statutory limit should be allowed, I must deal with the concepts of time and difficulty embodied in the terms “complex” and “extended.” Of the two, the latter is the less complex, and it simply refers to a temporal gauge. United States v. Bailey, 581 F.2d 984 (D.C.Cir.1978) The former deals with the legal problems encountered in the case and whether they are “significantly greater” than those encountered in the ideal of an “average case.” Id. Suffice for this case, counsel endured for a period of more than six months. Under any measure, that must 'meet the temporal standard. As for the complexity of this case, I am less certain; and, but for the disjunctive test posed by the statute, I would be more hesitant.

This case did involve a number of issues — some I judge contrived and some I judge real. There was a lot of paper and other materials disclosed by the government; but given this was a drug conspiracy case in which the investigative techniques of wire and oral interceptions were used, the legal complexity of this suit was not great. Yet, as the decision here is discretionary, United States v. Bailey, supra, I believe the case was “complex” if measured against the standard of gárden variety federal criminal cases.

This decision leaves only the examination of the time and expenses claimed in light of the standard of reasonability. Unfortunately, what is reasonable is not subject to strict measure. It is to be determined within the facts of the individual case, considering the time spent, the results achieved, and other factors which the court’s judgment lends meaning to the test. See Ramos v. Lamm, 713 F.2d 546 (10th Cir.1983).

Upon examination of the application in this case, one is immediately impressed with the number of hours spent outside the court. Indeed, counsel’s memorandum respecting fees indicates the expenditure of 323.3 hours. When one considers trial in this case consumed only 27.75 hours, and the voluminous evidentiary hearings and arguments on pretrial motions consumed only another 33.5 hours, the time spent in preparation therefore seems grossly disproportionate. Upon reflection, I believe this may in part be a function of the fact that this was the first criminal trial of any kind conducted by counsel, who has been a member of the practicing bar since October 1982. It is evident here, that counsel spent a great deal of time in educating himself in subject areas a more experienced practitioner would have been familiar with without lengthy study. Notwithstanding the expenditure of time, with which I neither quarrel nor find disputed, the fundamental purposes of the Criminal Justice Act interdicts countenance of the payment of attorney fees for the furtherance of counsel’s education. Moreover, it is the duty of the applicant to provide the court with satisfactory evidence thé expenditure of time meets the standard of reasonability. Ramos v. Lamm, supra. That was not done here even though my order of July 16 specifically requested such information. The onus must fall upon counsel, and not the Court. Ramos v. Lamm, supra.

Examination also discloses time was spent upon unproductive activity. I also believe the spirit of the Criminal Justice Act prevents compensation for pursuit of avenues that are in concept clearly unsupportable from the beginning. This is not to say the inventiveness of appointed counsel is to be stifled, but it does mean that the taxpayers’ money should not be spent either in idle pursuits or in chasing the will-o-the-wisp. United States v. James, supra. After examination of the details of the time logs submitted (which are not particularly helpful in understanding what was really done here), I have concluded not more than 75 hours would have been reasonable to expend outside the courtroom. In addition, there is no doubt that 61.25 hours were actually expended in the courtroom. While some of those hours were not productive, I find they were reasonably spent within the context of this case. Applying the statutory rates to these hours, I conclude a fee of $6,675.00 is reasonable.

That brings us to consideration of the claim for reimbursement. The first item is the claim of $5,250.00 for 150 hours of law clerk time billed at the rate of $35.00 per hour. I note initially that rate is not the cost incurred by counsel but the rate which his firm normally bills its clients for the services of the firm’s law clerks. Thus, at the very outset we have a tension between what is sought and what the Criminal Justice Act allows; that is, what is essentially a fee as opposed to an expense actually incurred. 18 U.S.C. § 3006A(d)(l).

Since the Criminal Justice Act is itself silent on the subject of whether law clerk services are costs which are recoverable, I shall take my guidance from Ramos v. Lamm, supra, in which the court of appeals held the costs of law clerks are assumed to be in the overhead of the billing attorney which must be subsumed within the fee. The only exception recognized in Ramos to this principle is one allowing for local custom. When that custom is to separately bill for these costs, the court held they are allowable. The only evidence before me in this instance is that counsel’s firm bills its clients separately, but despite my suggestion in the order of July 16 to follow the Ramos guidelines, no evidence was presented to establish the local custom. This failure falls upon the applicant, and I must disallow the reimbursement.

In no way do I suggest the Criminal Justice Act provides for this kind of a cost as sought here, however. Despite what an attorney customarily bills clients for the services of a law clerk, the “cost” concept embodied in the Criminal Justice Act requires that an attorney’s recovery for law clerk costs — if the incurrence of the cost is reasonable — must be limited to counsel’s out-of-pocket expenditure for this service.

The next item submitted as a cost is “computer assisted research” in the amount of $1,660.00. After the hearing, at the request of the court, counsel returned to his office records and discovered he had inflated the amount originally sought, and he amended his application to request reimbursement of $500.00 for this claimed expense. Unfortunately, there was only a minimum effort expended to establish the necessity for this form of research over the more traditional, or that the amount of research done was appropriate to the case. This leaves me to speculate, and that is not my function. Accordingly, this cost will be disallowed.

The next cost addressed is a charge for photocopies in the amount of $483.18. This figure represents the total for copies at the rate of 13$ each. The rate is that which is customarily billed to clients, and it does not represent the actual expense incurred by counsel. While the incurrence of this expense was not unreasonable in light of the number of papers exchanged in this case, once again I am constrained to observe the amount sought bears no evident relationship to the concept of expenses referred to in 18 U.S.C. § 3006A(d)(l). Accordingly, this expense will be disallowed.

Counsel has submitted receipts for telephone calls and for the delivery of items to other counsel in the case. I have examined these items and find that the expenses were reasonably incurred. Except for the 10 percent “fee” added to the delivery charges, these costs will be allowed.

In accordance with these findings, it is ordered that Ira M. Long, Jr., be allowed the sum of $6,871.93 representing fees in the amount of $6,675.00 and reimbursement of expenses in the sum of $199.43. This order shall serve as my certification required under 18 U.S.C. § 3006A(d)(3).

      . While Ramos deals with attorney fees under the Civil Rights Attorney's Fee Act, its precepts are equally applicable here.

      . Counsel was unable to provide the information because his record keeping methods do not lend themselves to the production of information in a format that is meaningful.

      . As a parenthetical, this was not the only error of calculation discovered by counsel upon prompting by the court, and it and the other errors in an affidavit and application for payment cannot do other than lend a quality of impeachment to the papers that care, in the first instance, could have avoided.


author: NEALON, Chief Judge.

text:
    Elizabeth GOBLA, Plaintiff, v. CRESTWOOD SCHOOL DISTRICT, et al., Defendants.
    Civ. No. 82-0699.
    United States District Court, M.D. Pennsylvania.
    Sept. 19, 1985.

      See also 609 F.Supp. 972.
    Francis G. Wenzel and Ralph Kates, Wilkes Barre, Pa., for plaintiff.
    Harry P. Mattern and Joseph Farrell, Wilkes Barre, Pa., for defendants.
   MEMORANDUM AND ORDER

NEALON, Chief Judge.

This action was originally filed by plaintiff on June 4, 1982, in which she alleged violations of 42 U.S.C. §§ 1983, 1985 and the Pennsylvania Equal Rights Amendment pursuant to her discharge as a school teacher from the Crestwood School District. Trial by jury began March 4, 1985 and on March 18, 1985, the jury returned a verdict in favor of plaintiff in the amount of $135,000.00. In special interrogatories, the jury found that plaintiff’s exercise of her First Amendment right of free speech was a substantial or motivating factor in her discharge, and that, although she was sexually harassed, the harassment was not a substantial or motivating factor in her discharge on November 1, 1978. By Motion dated March 25, 1985, defendants filed for a judgment notwithstanding the verdict alleging, inter alia, that there was insufficient evidence to support a verdict.

During this period, the United States Supreme Court handed down the decision of Wilson v. Garcia, — U.S. -, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985). Because the court believed that the Wilson case was dispositive of the issue in the instant action, the parties were requested to file supplemental briefs addressing the applicability of Wilson. The briefs having been filed, defendants’ motion is now ripe for disposition. For the reasons set forth below, the motion for judgment notwithstanding the verdict will be granted and the verdict entered in favor of plaintiff will be vacated.

I. FACTS

Because the issue presented involves the affirmative defense of the Statute of Limitations, a recitation of the factual background of the case is necessary. Plaintiff was suspended from her teaching position at Crestwood High School on March 13, 1978. After a hearing, the Board of School Directors voted to dismiss plaintiff on November 1, 1978. The stated grounds for dismissal, all related to her teaching duties, were, inter alia, insubordination, failure to submit medical certification for absence, and failure to submit lesson plans. The majority of charges related to incidents of insubordination. Plaintiff took an appeal to the Pennsylvania Secretary of Education who sustained the dismissal. Plaintiff then appealed the decision of the Secretary to the Pennsylvania Commonwealth Court which upheld the Secretary’s decision by an opinion rendered May 27, 1980. See 51 Commw.Ct. 539, 414 A.2d 772 (1980). On June 2, 1982, plaintiff sought relief in this court alleging that she was dismissed for exercising her First Amendment right of free speech and that she had been sexually harassed up until October, 1977 while teaching at Crestwood High School. See Affidavit of Elizabeth Gobla, Document 124 of the Record, Exhibit B at 38. Defendants responded to the complaint by filing a Motion to Dismiss arguing that plaintiff’s cause of action was barred by the Pennsylvania Statute of Limitations, 42 Pa.Cons.Stat.Ann. § 5522(b)(1), and that her action was barred by the doctrines of estoppel and res judicata.

By Memorandum and Order dated September 30, 1983, this court denied defendants’ Motion to Dismiss. . The court held, inter alia, that defendants’ statute of limitations argument failed in light of the recent decision handed down by the Court of Appeals for the Third Circuit in Knoll v. Springfield Township School District, 699 F.2d 137 (3d Cir.1983). In Knoll, our Court of Appeals determined that Pennsylvania’s residuary six-year statute of limitations should be applied because it would better serve the federal policy underlying federal civil rights actions than would the shorter six-month statute of limitations governing employment discrimination actions brought against government officials. Knoll, how.ever was vacated and remanded by the Supreme Court, see 105 S.Ct. 2065, in light of the Court’s recent decision, Wilson v. Garcia.

II. DISCUSSION

This court must consider the effect of the Supreme Court’s decision in Wilson. In Wilson, the Court held that claims brought pursuant to 42 U.S.C. § 1983 are best characterized as personal injury actions and, thus, the state statute of limitations for personal injury actions must be applied uniformly to all Section 1983 actions. In Pennsylvania, the statute of limitations for personal injury actions is two years. 42 Pa.Cons.Stat.Ann. § 5524(2).

After Wilson v. Garcia, our Court of Appeals addressed the issue of retrospective application of Wilson in Smith v. City of Pittsburgh, 764 F.2d 188 (3d Cir.1985). After careful consideration, our Court of Appeals determined that Wilson v. Garcia should be applied retrospectively. In Smith, the court concluded that:

Given the uncertainty of the Pennsylvania limitations provisions, the absence of a definitive holding of this court applying the six-year statute to a claim of termination of employment without due process, and the support in the district court opinions for concluding that the six-month or two-year Pennsylvania limitations periods might apply, there was no clear precedent on which it would have been reasonable for [plaintiff] to rely in delaying filing suit for more than two years.

Fitzgerald v. Larson, 769 F.2d 160, 163 (3d Cir., 1985) (citing Smith, supra at 194-95). In Smith, the plaintiff had argued that he had been dismissed in violation of his right to procedural due process. In the case, sub judice, however, plaintiff has alleged she was discharged in violation of her First Amendment rights. Our Court of Appeals has addressed this issue as well in Fitzgerald v. Larson, supra and held that Wilson v. Garcia applied retrospectively to claims alleging wrongful discharge for exercise of First Amendment rights.

With the law clearly set forth, the court turns to plaintiff’s arguments which resist a finding that her claim is time-barred. Plaintiff’s first argument is that Wilson v. Garcia should not be given retrospective application. This argument is clearly foreclosed by the Third Circuit’s decisions in Smith and Fitzgerald, supra.

Plaintiff’s remaining arguments require more discussion. First, it is argued that defendants did not raise the affirmative defense of the Statute of Limitations in a timely manner, and second, that plaintiff filed her complaint within the two-year Pennsylvania personal injury statute of limitations. See 42 Pa.Cons.Stat.Ann. § 5524(2). The court will address these issues seriatim.

Plaintiff argues that defendants have waived raising the two-year statute of limitations pursuant to 42 Pa.Cons.Stat.Ann. § 5524 because defendants only raised the six-month statute of limitations pursuant to 42 Pa.Cons.Stat.Ann. § 5521(b). See Document 3 and 8 of the Record. Thus, plaintiff’s argument is that by raising only that a six-month statute of limitations was applicable to the action, defendants are now precluded from asserting that a two-year limitations period should be applied.

The court is not persuaded by this argument. The cases plaintiff cites in support are inapposite in that those cases involved a situation in which the defendant failed to plead the affirmative defense at all or failed to raise the defense until just before or during trial. See e.g., Peterson v. Air Line Pilots Assoc. Internat., 759 F.2d 1161 (4th Cir.1985); Trio Process Corp. v. L. Goldstein’s Sons, Inc., 461 F.2d 66 (3d Cir.1972); Evans v. Syracuse City School District, 704 F.2d 44 (2d Cir.1983).

Before Wilson was decided, the first step in selecting the applicable state statute of limitations was to characterize the essential nature of the federal action. Wilson v. Garcia, 731 F.2d 640, 642 (10th Cir.1984), aff'd. — U.S. -, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985) (citations omitted). The court then has to determine which state limitations period is applicable to this characterization. Id. This court does not interpret the analysis as restricting the court to choose only the limitations period advanced by the parties. Rather, once the issue of the statute of limitations period has been raised, the court makes the determination of the appropriate limitations period. For example, the defendants in Garcia raised a two-year limitations period as a defense in the district court. The district court, however, held that a four-year limitations period was more appropriate. Wilson, supra 731 F.2d at 651. On appeal, the Tenth Circuit court held a three-year personal injury limitations period should apply in Section 1983. Thus, the court is not bound to choose only the particular limitations period advanced by the parties. Rather, the court chooses the applicable period after appropriate analysis, once the issue has been raised. Because defendants raised the statute of limitations as a defense immediately, they are free to re-assert that defense in light of the fact that the precedent this court relied upon has been vacated. See Knoll, supra. The court rejects plaintiff’s argument that defendants are limited to asserting only a six-month limitations period.

Having concluded that defendants are not barred from raising the statute of limitations period, the court turns to plaintiffs second argument that her claims were timely filed.

A. First Amendment

As stated infra, the Third Circuit Court of Appeals held that the two-year statute of limitations should be applied retrospectively to claims of wrongful discharge. Plaintiff urges this court to find that her First Amendment claim was timely filed, in that she did not discover she was fired for outspokenness until February 13, 1981. According to plaintiff, she was unaware of any First Amendment issue until it was disclosed to her by Mary Redgate on February 13, 1981. A careful review of Redgate’s trial testimony, however, reveals that Redgate offered no support to plaintiff’s theory that she was fired for exercising her right to free speech, viz. speaking out on kick-backs of school rings or writing to the newspaper criticizing the School Board. Rather, Redgate’s testimony did not even address these issues and was directed principally to her part in collecting harmful data on plaintiff’s teaching activities which ultimately were utilized by the School Board to support plaintiff’s discharge. Thus, the court does not find persuasive evidence that the statute of limitations period should be tolled under these circumstances. The burden of establishing that the statute of limitations should be tolled is placed upon the party asserting it. Plaintiff has not set forth any factual support for her allegation that she was unaware of her First Amendment claim. As a result, her cause of action accrued on the date of her discharge, November 1, 1978. Because plaintiff did not file her federal action until June 4, 1982, her action is time-barred pursuant to Wilson v. Garcia and Fitzgerald v. Larson, supra.

B. Sexual Harassment

Plaintiff’s claim for sexual harassment is also time-barred in that by plaintiff’s own account, all harassment stopped in October, 1977. See Affidavit of Elizabeth Gobla, Document 124 of the Record, Exhibit B at 38. Thus, her claim for sexual harassment is barred as well. Moreover, the jury decided against the plaintiff on the issue of sexual harassment, finding that the harassment was not a substantial or motivating factor in her discharge.

C. Conspiracy

To the extent plaintiff may be arguing that her conspiracy claim is still viable, that argument is rejected. Defendants are correct in maintaining that plaintiff is foreclosed from advancing this claim. Because testimony was minimal on this issue, the court did not submit the issue to the jury. Plaintiff did not object and pursuant to Fed.R.Civ.P. 49(a), she is precluded from asserting the conspiracy claim is still viable. Additionally, the verdict in favor of plaintiff was premised solely on the free speech issue which was unrelated to any class-based or gender-based animus.

III. CONCLUSION

In conclusion, the court finds that defendants timely asserted the defense of the statute of limitations. In light of Wilson v. Garcia and Fitzgerald v. Larson, supra, plaintiffs claims of First Amendment violations and sexual harassment are time-barred. It is unfortunate that after a verdict is entered by a jury, it must be set aside. This court is constrained, however, to follow controlling case law of the United States Supreme Court and United States Court of Appeals for the Third Circuit. The verdict in favor of plaintiff and against defendants will be vacated.

An appropriate Order will enter.

      . See Documents 205, 207 and 209.

      . Plaintiff had never raised these issues before the School Board, the Secretary of Education or the Commonwealth Court. Her principal argument before the Commonwealth Court was that because some of the incidents charged in her dismissal proceedings occurred prior to her ear-Her March, 1978 suspension hearings, those incidents could not form part of the basis for her dismissal. These items, plaintiff contended, were unlawful double punishment for the same conduct. 51 Commw.Ct. 539, 414 A.2d 772 (1980).

      . Plaintiff also contends that only the individual defendants, as individuals and members of the Crestwood School Board, raised the defense of the Statute of Limitations and Crestwood School District, as a defendant, did not raise the defense. The court notes, however, that any Iiability that could be imposed upon the School District is necéssarily dependent upon the liability of the individual defendants. If no action may be sustained against the individual defendants and the Crestwood School Board, then there is no viable action left against the School District.

      . This conclusion is buttressed by the reasoning of the Wilson v. Garcia court in holding that all Section 1983 actions should be subject to the state’s personal injury statute. The purpose of the decision was to establish uniformity, at least within a state, regarding civil rights actions — a purpose clearly defeated by plaintiffs reasoning.

      . Plaintiff seizes on the language in the Memorandum and Order dated September 30, 1983, see Document 29 of the Record, in which the court stated, with regard to defendants’ res judicata argument: "The plaintiffs allegations, as well as the Redgate deposition, indicate that plaintiff was not aware of the alleged constitutional violations until 1981, well after the Commonwealth had rendered its decision.” Id. at 7 (emphasis added). That statement, however, was in the context of a motion for summary judgment whereby all the well-pleaded allegations of plaintiff were taken as true and all doubts resolved in favor of plaintiff. At this point in time, however, a trial has been completed and the parties have presented all of their evidence. The evidence presented at trial demonstrated that the free speech issue, upon which plaintiff prevailed before the jury, was fully known to her at the time of her discharge. The ring incident occurred in May, 1976, see Gobla Affidavit and Chronology, Volume 1, Document 124 of the Record at 19 and the newspaper article on March 28, 1978, id. at 74, well in advance of her discharge on November 1, 1978. There is simply no evidence that Mary Redgate’s discussion with plaintiff in February, 1981 informed plaintiff of a First Amendment claim.

       Plaintiff in oral argument maintained that the court cannot consider this information because it was not introduced at trial. There is no merit to this argument. Plaintiff cannot urge the court to disregard submissions filed by the plaintiff as of record which were entitled “Gobla Affidavit, Chronology and Exhibits.”


author: McCUNE, District Judge.

text:
    Stanley F. MICHAELS, Plaintiff, v. JONES & LAUGHLIN STEEL CORPORATION, Defendant.
    Civ. A. No. 84-2652.
    United States District Court, W.D. Pennsylvania.
    Oct. 9, 1985.

      Gregory Gleason, Pittsburgh, Pa., for plaintiff.
    John Unkovic, Pittsburgh, Pa., for defendant.
   MEMORANDUM

McCUNE, District Judge.

Plaintiff brings this action pursuant to the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621 et seq. and § 16 of the Fair Labor Standards Act (FLSA) 29 U.S.C. § 216, claiming that he was demoted, laid off, and finally terminated as a result of willful age discrimination in violation of the ADEA and FLSA. All discovery has closed and pretrial statements have been filed. We consider the defendant’s motion for summary judgment. For the reasons stated below, we will grant the motion.

Discussion

Plaintiff was born December 10, 1923. He was 59 years old when he was demoted and laid off by the defendant. He was 61 years old when he was terminated.

The parties are in agreement as to the plaintiff’s chronogical work history. He was initially hired by the defendant on October 20, 1952. Prior to his demotion, he served in the Industrial Engineering Department of the defendant’s Pittsburgh works as a project industrial engineer. While serving as such, he was also the “group leader” responsible for supervising individuals working as maintenance standard applicators. He was demoted from project industrial engineer and group leader to the position of maintenance standard applicator on July 1, 1982. Subsequently, on October 15, 1982, he was laid off with “recall likely.” His status was changed to “recall unlikely” on May 25, 1984, and he was notified that he was terminated from employment effective June 1, 1984.

Plaintiff filed a charge of discrimination with the Equal Employment Opportunity Commission (EEOC) on April 30, 1983, contending that the “most recent or continuing discrimination” by the defendant took place on July 1, 1982, the date of his demotion to maintenance standard applicator. The EEOC notified the plaintiff by a letter dated September 5, 1984, that it would not proceed any further with the processing of his charge.

Plaintiff filed the instant suit on November 2, 1984, alleging:

“... The defendant retained and promoted employees who are less than forty years of age in positions for which the plaintiff is qualified before, at the time of, during and after the plaintiff's demotion, layoff and termination. The defendant offered employment opportunities, transfers and promotions for which the plaintiff is qualified to employees who are less than forty years of age. The actions are willfull violations of ADEA and FLSA because the defendant decided to demote, layoff and terminate the plaintiff solely because of his age

The plaintiff contends that although the defendant claims to use a neutral evaluation system of which age is not a factor, his allegation is supported by the following statistical data. He contends that as of July 1982, there were 17 professional non-bargaining unit employees in the Industrial Engineering Department at the Pittsburgh works, and 8 of the 17 were no longer working for the defendant, and all not working were 50 years of age or older. The plaintiff avers that of the employees retained since July, 1982, 2 were in their twenties, 3 were in their thirties, 1 was 45 years old and 4 were in their fifties. (Apparently 10, not 9 were retained or there were 18 in the department). These employees were not maintenance standard applicators, however, and as will be noted, the plaintiff does not contend that he was qualified outside of his department. He does not identify any of the retained jobs for which he was qualified.

The defendant denies that it discriminated against the plaintiff because of his age. It contends that its actions were based on economic conditions and other work related factors totally unrelated to the plaintiffs age.

The defendant points out that at the time of its initial shutdown (April 30, 1982) it had a decreased need for maintenance standard applicators. With this decreased need for maintenance standard applicators plaintiffs supervisory position was no longer needed and was eliminated. Instead of letting the plaintiff go at this point, defendant transferred him to the position of maintenance standard applicator at no loss of pay.

However, in October of 1982, the defendant reached an interim incentive agreement with its unionized steelworkers which eliminated the need for any maintenance standard applicators whatsoever and laid off the plaintiff with “recall likely.” The defendant contends that it was only after it became apparent that the plaintiff had no possibility of being recalled due to the curtailed status of the Pittsburgh works that it terminated him.

The motion for summary judgment contends that plaintiffs suit should be barred from proceeding any further on three grounds. First, the suit was commenced beyond the running of the applicable statute of limitations. Secondly, the plaintiff has failed to set forth a prima facie case of age discrimination and there does not exist any question of material fact as to this issue. Thirdly, even if the plaintiff can establish a prima facie case of age discrimination, no question of material fact exists from which a factfinder could conclude that it’s legitimate, non-discriminatory explanation was pretextual.

We address the statute of limitations question first. The statute of limitations for an action brought under the ADEA is found in 29 U.S.C. § 626(e)(1) which states that §§ 6 and 10 of the Portal to Portal Act of 1947, 29 U.S.C. §§ 255(a) and 259 apply to ADEA actions. § 255(a) states:

Any action ... may be commenced within two years after the cause of action accrued, and every such action shall be forever barred unless commenced within two years after the cause of action accrued, except that a cause of action arising out of a willful violation may be commenced within three years after the cause of action accrued.

The threshold question is whether the two-year or three-year statute of limitation applies in the instant case. The plaintiff alleges that the defendant willfully discriminated against him and that the three-year period should apply. The defendant contends that there is no evidence of a willful violation of the ADEA and that the two-year period is applicable in this case. A violation is willful if an employer knew or showed reckless disregard for the matter of whether its conduct was prohibited by the ADEA. Trans World Airlines, Inc. v. Thurston, 469 U.S. 111, 105 S.Ct. 613, 83 L.Ed.2d 523 (1985).

The plaintiff alleges that the defendant knew that the ADEA applied but willfully discriminated against him by including age as a factor in making its employment decisions. As evidence of the defendant’s knowledge of the applicability of the ADEA and the willfullness of defendant’s alleged discrimination, the plaintiff points to Exhibits Bl, DI, and D2 found in “Defendant’s Response to Plaintiff’s First Interrogatories and First Request for Production.” While we agree with the plaintiff that exhibit Bl makes it clear that the defendant was aware of the possible legal ramifications of using age as a factor in employment decisions, we find no merit in his contention that these exhibits demonstrate that age was considered in making employment decisions. Exhibit Bl states in part:

“...It is the responsibility of every supervisor involved in the process of identifying affected employees to insure that, in addition to offering continued employment to the most capable person, the selection procedure operates in a manner that complies with our legal obligations ... With respect to matters of age discrimination, your attention is called to the fact that personnel decisions, such as terminations, lay offs, transfers, demotions, etc., cannot be based upon an individual’s eligibility or ineligibility for pension. . Decisions to eliminate jobs or to lay off or terminate individuals should be based on the needs of the company and not on pension eligibility. Decisions based upon pension eligibility may be in violation of age discrimination legislation and also extremely costly ... The persons in these categories may have special skills, contacts, etc, in addition to many years of experience, the loss of which can be a severe handicap to the company. ..”

Exhibits DI and D2 speak only of plaintiff’s work performance and do not mention age. We find no evidence of defendant willfully violating the ADEA. Accordingly, the two-year statute of limitations will be applied.

The next question is at what date the statute of limitations began to run. Plaintiff contends that it should begin to run as of May 25, 1984, the date his status was changed to “recall unlikely.” The defendant asserts that it should be deemed to have begun to run on October 15, 1982, when the plaintiff was originally laid off. The defendant cites case law for the proposition that the statute of limitations should begin to run when a claimant is notified of upcoming termination and not at the date of actual termination. See Chardon v. Fernandez, 454 U.S. 6, 102 S.Ct. 28, 70 L.Ed.2d 6 (1981) (per curiam); Delaware State College v. Ricks, 449 U.S. 250, 101 S.Ct. 499, 66 L.Ed.2d 431 (1980); United Air Lines, Inc. v. Evans, 431 U.S. 553, 97 S.Ct. 1885, 52 L.Ed.2d 571 (1977). We find these cases unpersuasive in the instant case to support the proposition that the statute of limitations should be viewed as beginning to run on October 15, 1982. On this date, plaintiff’s status was “recall likely” which does not equate with notice of termination, nor was the plaintiff told he would be let go at a certain specified date in the future. Accordingly, we find that the statute of limitations should run in the instant case from May 25, 1984, and this suit is not barred on this ground.

We are left with the defendant’s argument that the plaintiff has failed to make out a prima facie case, and that even if he did, there is no question of material fact that would suggest its non-discriminatory explanation for its action to be a pretext for unlawful discrimination.

In an ADEA case, the plaintiff is required to set forth a prima facie case of discrimination. The defendant must then articulate a non-discriminatory rationale for its actions. At this point, the plaintiff is allowed to present evidence that the defendant’s rationale is pretextual and that its real reasons for its actions are discriminatory. The ultimate burden of proof in the case remains with the plaintiff who must show by a preponderance of the evidence that age was a determinative factor in the defendant’s actions. See Texas Department of Community Affairs v. Bur- dine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981); Smithers v. Bailar, 629 F.2d 892 (3d Cir.1980).

A plaintiff alleging a discriminatory layoff need only show that he was laid off from a job for which he was qualified while others not in the protected class received more favorable treatment. Duffy v. Wheeling Pittsburgh, 738 F.2d 1393 (3d Cir.1984) cert. denied, — U.S. -, 105 S.Ct. 592, 83 L.Ed.2d 702 (1984), citing Massarsky v. General Motors, 706 F.2d 111 (3d Cir.1983), cert. denied 464 U.S. 937, 104 S.Ct. 348, 78 L.Ed.2d 314 (1983). A plaintiff in a workforce reduction case can establish a prima facie case of age discrimination by showing: 1) he was within the protected age group and that he was adversely affected-discharged or demoted by defendant’s employment decision; 2) that he was qualified to assume another position at the time of discharge or demotion; and 3) producing evidence, circumstantial or direct, from which a factfinder might reasonably conclude that the employer intended to discriminate in reaching the decision at issue. Williams v. General Motors Corp., 656 F.2d 120 (5th Cir.1981), cert. denied 455 U.S. 943, 102 S.Ct. 1439, 71 L.Ed.2d 655 (1982).

Plaintiff clearly meets the first element as he belongs to the class of individuals protected by the ADEA, those 40 but less than 70 years of age, 29 U.S.C. 631(a). He has not, however, presented any evidence to show that he was laid off from a job for which he was qualified while others not in the protected class received more favorable treatment. At the time of his layoff through the time of his discharge, the interim incentive agreement was in effect. In fact, all maintenance standard applicators were placed on layoff status. Plaintiff has failed to allege that he was qualified to assume some other position, i.e., a position other than maintenance standard applicator, at the time of his demotion or discharge. As for his statistical evidence, half of the employees he claims were retained by the defendant since July 1972 were within the protected class of ADEA. We find that the plaintiff has failed to make out a prima facie case of age discrimination.

Assuming arguendo that plaintiff could establish a prima facie case of age discrimination, we find no evidence in the record that would permit a conclusion that defendant’s non-discriminatory rationale was pretextual. It is clear that the defendant's actions were based on economic conditions alone and that the plaintiff’s age was not a determinative factor in its employment decisions.

Accordingly, the defendant’s motion for summary judgment will be granted.

      . The plaintiff has mistakenly characterized his age as 58 years old when he was demoted and laid off and 60 years old when he was terminated. This discrepancy, however, does not affect our review of his claim.

      . Maintenance standard applicators, supervised by the plaintiff, evaluated and administered incentive wage rates for hourly employees working in the Pittsburgh Works General Maintenance Department.

      . Of the 8 individuals no longer working for the defendant, 7 were laid off and one retired.

      . The defendant has characterized its operating schedule at the Pittsburgh works from April 30, 1982 to the present as follows:
      Effective Date Status
      April 30, 1982 Total Shutdown
      March 2, 1983 One electric furnace in operation
      May 28, 1983 Total shutdown
      January 17, 1984 One electric furnace in operation
      January 29, 1984 Both electric furnaces in operation
      May 31, 1984 Total shutdown
      February 20, 1985 One electric furnace in operation
      April 19, 1985 to
      present Total shutdown


author: ORINDA D. EVANS, District Judge.

text:
    MACEY & SIKES v. UNITED STATES of America.
    Civ. No. C85-3420.
    United States District Court, N.D. Georgia, Atlanta Division.
    Dec. 20, 1985.

      John M. Sikes, Jr., Macey & Sikes, Atlanta, Ga., pro se.
    Richard F. Mitchell, Trial Atty., Tax Div., U.S. Dept, of Justice, Washington, D.C., Amy D. Levin, Asst. U.S. Atty., Atlanta, Ga., for defendant.
   ORDER

ORINDA D. EVANS, District Judge.

This action to quash a notice of levy issued by the Internal Revenue Service is before the court on Plaintiff’s motion for leave to amend their complaint, Defendant’s motion for partial summary judgment, and Plaintiff’s cross motion for summary judgment.

Motion to Amend the Complaint

Plaintiff has moved to amend its complaint in order to add allegations in paragraph 6 that the filing of Defendant’s lien against the property of taxpayers John E. and Cheryl S. Hayes was without “notice and demand” on them. The amendment would also add allegations of events that occurred subsequent to the filing of the complaint, but prior to Defendant’s filing of its answer. It appears to the court that Plaintiff’s amendment is filed in good faith, with no dilatory motive or undue delay, and would not unduly prejudice Defendant. See Bamm, Inc. v. GAF Corp., 651 F.2d 389 (5th Cir. Unit B, 1981). Plaintiff’s motion to amend is thus granted.

Motions for Summary judgment

The following undisputed facts are before the court. On May 16, 1985, Plaintiff, a law firm, took possession of 15 items of artwork as collateral security for legal services to be rendered to John E. and Cheryl S. Hayes. On the same date, Plaintiff and Mr. and Mrs. Hayes signed a security agreement with respect to these 15 pieces of artwork.

On June 3, 1985, the Internal Revenue Service made an assessment for unpaid 1979 and 1980 federal income taxes against Mr. and Mrs. Hayes, in the amount of $3,947,792.26.

On June 4, 1985, at approximately 1:20 p.m., IRS agents went to the Hayeses’ residence in Fulton County, Georgia, to serve formal demand for payment of the allegedly unpaid taxes and a notice of jeopardy assessment. The security gates of the premises were locked, and efforts to reach the Hayeses through an intercom system were unsuccessful. The agents placed the demand for payment and notice of jeopardy assessment in a sealed envelope taped to the mailbox. An hour or so later, IRS filed a notice of federal tax lien with respect to the assessment in the Superior Court of Fulton County. This was the correct place to file the lien notice.

At approximately 2:30-3:00 p.m. that same day, the Hayeses returned home and opened the envelope from IRS. Mr. Hayes contacted the Plaintiff law firm at 3:00 p.m. concerning this development.

On June 7 and 11,1985, Plaintiff received possession of 75 additional items of artwork from Mr. and Mrs. Hayes, for the same security uses and purposes (hereinafter referred to as the “Exhibit C artwork”). On June 19, 1985, Plaintiff filed and recorded a “UCC-1 Financing Statement,” covering all 90 artworks, in the office of the Clerk of the Superior Court of Fulton County, Georgia.

On June 26, 1985, the IRS delivered a notice of levy to Plaintiff, in an attempt to seize the 90 works of art belonging to Mr. and Mrs. Hayes which were in Plaintiffs possession. On July 2, 1985, Plaintiff filed this action, challenging Defendant’s right to levy. On August 22, 1985, IRS filed a second notice of federal tax lien in the Superior Court of Fulton County.

Defendant’s motion for partial summary judgment pertains solely to the Exhibit C artworks, i.e., the artworks turned over to Plaintiff on June 7 and 11, 1985. Defendant contends that it has a valid and enforceable statutory lien on this art which has priority over Plaintiff’s lien. Plaintiff argues that Defendant’s June 4, 1985 tax lien was invalid because it was not preceded by the Hayeses’ receipt of IRS’s demand for payment. Instead, the lien was filed (so far as the instant record reflects) contemporaneously with the Hayeses' receipt of the written notice which had been taped to their mailbox. Because the Hayeses had no opportunity to pay the taxes before the lien was filed, Plaintiff argues that the June 4 tax lien was invalid and that Defendant did not obtain a valid lien against the Hayeses’ property until August 22, 1985, when it filed a second lien claim with the Clerk of the Superior Court of Fulton County, Georgia.

The court agrees with the general thrust of Plaintiff’s argument that in order for a federal tax lien to be enforceable in the face of a third party claim, it must be valid as against the taxpayers themselves. Further, it is clear that in order for a federal tax lien to be enforceable as against a taxpayer, IRS must make a demand for payment. Myrick v. United States, 296 F.2d 312, 314 (5th Cir.1961) (no tax lien will arise until there is a demand for payment); Phillips & Jacobs, Inc. v. Color-Art, Inc., 553 F.Supp. 14 (N.D.Ga.1982) (tax lien arises upon assessment and demand); Goldstein v. Barkers Commercial Corp., 152 F.Supp. 856 (S.D.N.Y.1957). The court finds no authority, however, supporting Plaintiff’s argument that if IRS’s demand for payment coincides with or post dates the filing of the lien notice, that the tax lien is void. Instead, the correct rule is that the validity of the federal tax lien, insofar as validity depends on the adequacy of the taxpayer’s opportunity to pay, is to be judged as of the date when enforcement of the tax lien is sought. In this case, that date is June 26, 1985, when IRS served the notice of levy on Plaintiff.

None of the relevant statutes expressly support Plaintiff’s position. 26 U.S.C. § 6321 provides in pertinent part:

If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount ... shall be a lien in favor of the United States upon all property ... belonging to such person.

26 U.S.C. § 6322 provides in pertinent part:

Unless another date is specifically fixed by law, the lien imposed by section 6321 shall arise at the time the assessment is made and shall continue until the liability for the amount so assessed ... is satisfied or becomes unenforceable by reason of lapse of time.

26 U.S.C. § 6323 then provides that the lien imposed by § 6321 is not valid as against certain third parties until a notice of tax lien has been properly filed.

The only case cited by Plaintiff which provides any possible support for its position is L.O.C. Industries v. United States, 423 F.Supp. 265 (M.D.Tenn.1976), and cases .cited therein. In that case, the taxpayer sought an injunction against the government, which had levied on the taxpayer’s bank account. The government had levied and obtained the bank account proceeds before the taxpayer had received any demand for payment from IRS. The court held that the taxpayer was entitled to an opportunity to pay the tax prior to any levy, and that in the absence of such opportunity, there had been no “neglect or refusal to pay after demand” as required by § 6321. It required that the money seized from the taxpayer’s bank account be returned pursuant to an injunctive order.

The court finds that L.O.C. Industries is not factually similar to the instant case. In L. O. C., the problem was the timing of the levy in relation to notice of assessment to the taxpayer, not the timing of the assessment notice versus the timing of filing of the tax lien notice. It is clear that the court in L.O.C. was concerned about the possible damage to the taxpayer which might result from an improper levy, when the taxpayer had had no chance to dispute the government’s claim. In essence, the government had taken the taxpayer’s bank account without giving it notice and an opportunity to be heard. In the instant case, the contemporaneous service of the demand for payment and the filing of the notice of tax lien portended no such drastic possibilities. IRS was merely freezing the status quo, so that the Hayeses could not transfer property in avoidance of IRS’s position. The Hayeses had an abundant opportunity to pay IRS or challenge its claim before the June 26 levy. Moreover, the Hayeses had an adequate opportunity to pay even before the Plaintiff obtained its lien position. For example, on June 5 and 6, 1985, IRS’s position was clearly valid as against the Hayeses and was perfected as against third parties. Accordingly, Plaintiff’s lien in the Exhibit C artwork is inferior to Defendant’s lien.

Accordingly, Plaintiff’s motion to amend is GRANTED; Defendant’s motion for partial summary judgment is GRANTED; Plaintiff’s motion for summary judgment is DENIED.

      . It is not clear from the record exactly what the parties anticipated these legal services would consist of.

        . The notice of jeopardy assessment essentially advised the Hayeses that IRS was making an emergency tax assessment against them, with no prior notice, because IRS had determined that the Hayeses were liquidating their property in order to place it beyond the reach of the government.

      . It is not clear whether the filing of the tax lien came first, or the Hayeses’ receipt of the demand notice. In any event, only a few minutes separated the two events.

      . The record does not disclose whether the Hayeses had reason to know of an impending tax assessment.

      . The parties’ briefs hint that Plaintiff’s possession of the Exhibit C artworks on June 7 and 11 might be significant to the perfection of Plaintiffs security interest, but the briefs do not directly address this matter. The court need not address this issue in light of its other findings.