author: MacMAHON, District Judge.

text:
    TAYLOR WOODROW PLC f/k/a Taylor Woodrow Limited, Plaintiff, v. Bernice BLITMAN and Nathan Blitman, as Co-Personal Representatives under the Last Will and Testament of Charles H. Blitman, deceased, and Howard N. Blitman, Defendants.
    No. 83 Civ. 6899 (LFM).
    United States District Court, S.D. New York.
    March 5, 1985.

      Lowenthal, Landau, Fischer & Ziegler, P.C. by Lawrence L. Ginsburg, New York City, for plaintiff.
    Spengler Carlson Gubar Brodsky & Frischling by Clinton W. Walker, New York City, for defendant Howard N. Blitman.
   OPINION

MacMAHON, District Judge.

Plaintiff moves, pursuant to Rule 56, Fed.R.Civ.P., for summary judgment against defendant Howard N. Blitman.

In 1968, plaintiff Taylor Woodrow pic. owned 50% of the common stock of Blitman Construction Company (“BCC”), and defendants Charles and Howard Blitman owned the remaining 50% of BCC’s common stock. In November 1968, plaintiff provided a $1 million letter of credit to Travelers Indemnity Company (“Travelers”), issued by European American Banking Corporation (“EAB”), as security for performance bonds issued by Travelers on behalf of BCC. Shortly thereafter, defendants agreed to indemnify plaintiff for one-half of any sum plaintiff paid under the letter of credit.

In April 1981, one of BCC’s subcontractors on the Albee Mall project, Metropolitan Steel Industries, Inc. (“Metropolitan Steel”), commenced an action in the United States District Court for the Eastern District of New York against Travelers for approximately $333,500 based on a performance bond Travelers issued on behalf of BCC. The following November, Howard Blitman resigned as president of BCC. Six months later, in June 1983, Travelers agreed to settle Metropolitan Steel’s suit out of court. In exchange for dismissal of the suit, Travelers allegedly paid Metropolitan Steel $325,000. On September 19, 1983, plaintiff filed the instant action against defendants for $162,000 (one-half of the amount allegedly paid out under the letter of credit) based on the indemnification agreement.

In April 1984, plaintiff moved before us for an order striking defendants’ second and third affirmative defenses and for summary judgment, and defendants cross-moved for summary judgment. On July 13, 1984, by Memorandum and Order, we granted plaintiff’s motion to strike the affirmative defenses but found that the following issues of material fact precluded summary judgment: (1) proof of the chain of payment extending to Metropolitan Steel from plaintiff; and (2) proof that the sum paid to settle the Metropolitan Steel claim was reasonable and negotiated in good faith.

Plaintiff contends that the instant summary judgment motion is proper because it now has documentary evidence and deposition testimony establishing the chain of the alleged settlement payment of $325,000 by plaintiff to Metropolitan Steel and the reasonableness of that amount. See Home Indem. Co. v. Famularo, 530 F.Supp. 797 (D.Colo.1982).

The contemplated method of payment under the indemnification agreement was as follows: Metropolitan Steel, the underlying claimant, was to be paid by Travelers, which was to be reimbursed by EAB under the letter of credit, which would debit the account maintained with EAB by Midland Bank, Ltd., which was in turn to be reimbursed by plaintiff. Plaintiff has submitted adequate documentary evidence tracing the chain of the $325,000 settlement payment extending from plaintiff to Metropolitan Steel. Moreover, defendant, in his answering papers, does not challenge any of plaintiff’s statements of fact as to this chain of payment.

We conclude that there is no genuine issue as to the chain of payment which must exist to find defendant liable for indemnification.

The remaining question for us is whether the settlement amount was reasonable and negotiated in good faith. In our July 13, 1984 Memorandum and Order, we noted that:

[B]ecause defendant was notified and failed affirmatively to intervene or to undertake a defense, defendant cannot now attack the validity of the Metropolitan Steel claim against Travelers. Feuer v. Menkes Feuer, Inc. [8 App.Div.2d 294, 187 N.Y.S.2d 116 (1st Dept.1959) ]; Whitaker v. Equitable Laundry Machine Corp., [131 Misc. 505] 227 N.Y.S. 233, 234 (Sup.Ct.1928), aff’d, [223 App.Div. 824] 228 N.Y.S. 922 (1st Dept.1928); see also 28 N.Y.Jur. Indemnity §§ 27, 32. Therefore, plaintiff need not establish that Travelers would have been liable and that there were no good defenses to liability or that settlement was the only reasonable course. Id.
Nevertheless, even where the indemnitor is notified of the claim giving rise to the indemnitee’s liability, the indemnitor must establish that the sum paid to settle the claim out of court was reasonable and negotiated in good faith. Delaware & H.R. Corp. v. Adirondack Farm Coop Exchange, Inc., [33 App.Div.2d 962] 306 N.Y.S.2d 1002, 1005 (3d Dept.1970); Feuer v. Menkes Feuer, Inc., supra, [187 N.Y.S.2d] at 121; see also 28 N.Y.Jur. Indemnity § 32.

Plaintiff now contends that defendant admitted, no later than March 1981, that a settlement in the range of $260,000 to $280,000 was reasonable. Given this admission, plaintiff submits that proof of the reasonableness of the settlement is merely a question of arithmetic. Application of the statutory interest rate on a judgment to the principal amount of $260,000 yields additional interest totalling $52,270, for a total of principal plus interest of $312,270 as of the actual settlement date. This amount does not take into account any costs or attorney’s fees saved by reason of the settlement.

The ultimate decision to settle the Metropolitan Steel claim was made by Richard Johnson, president of BCC. He relied on recommendations of counsel and information relayed to him by Robert Posner, a former vice president of BCC. Specifically, Johnson based his decision on the following factors: (1) the outstanding undisputed construction costs owed Metropolitan Steel were approximately $230,000; (2) Metropolitan Steel claimed that it was owed between $30,000 and $40,000 in “change orders;” (3) the value of the work performed by Metropolitan Steel which was still unpaid was approximately $30,000; (4) Metropolitan Steel had asserted additional claims totalling $100,000 to which there was some exposure; (5) the counterclaims asserted against Metropolitan Steel were essentially worthless; and (6) potential litigation costs were between $50,000 and $60,000.

In opposing the instant motion for summary judgment, defendant makes three arguments on the good faith and reasonableness of the settlement. First, he argues that settlement negotiations were not conducted in good faith because Johnson did not make a sufficient investigation of the merits of Metropolitan Steel’s claims. In essence, defendant alleges that by relying on Posner's advice, rather than seeking out the advice of individuals who had first-hand knowledge of the claims, Johnson disregarded the facts and breached his duty. Defendant also alleges that Albee Mall Associates (“Albee Mall”), the owner of the project, is ultimately liable to Metropolitan Steel, and, thus, plaintiff should have filed a third-party complaint against Albee Mall in the Metropolitan Steel suit.

Johnson’s failure to question persons directly involved in the Albee Mall project does not establish that his reliance on Posner’s information was improper. Defendant has not introduced any evidence indicating that that information was erroneous or otherwise unreliable. In the absence of such countervailing evidence, we find that Johnson’s reliance was in good faith. See, e.g., Modern Home Institute, Inc. v. Hartford Acc. & Indem. Co., 513 F.2d 102, 110 (2d Cir.1975).

We now turn to the issue of the third-party complaint against Albee Mall. At the outset of the Metropolitan Steel litigation, BCC, Travelers and Albee Mall were all represented by the same law firm. Cognizant of possible conflicts of interests, the parties agreed to defer any disputes among themselves until the conclusion of the litigation. However, after a settlement “agreement” between BCC and Albee Mall broke down, BCC commenced an action against Albee Mall in the Supreme Court of the State of New York, New York County, which is still pending. Thereafter, the law firm previously representing Travelers in the Metropolitan Steel claim was permitted to withdraw. Travelers then moved unsuccessfully on the eve of trial to assert a third-party complaint against Albee Mall in the Metropolitan Steel action. In view of the foregoing fact, we find that plaintiff’s decision not to implead Albee Mall does not reflect bad faith.

Defendant’s second argument is that the amount of the settlement was not reasonable. He contends that his earlier proposal of between $260,000 and $280,000 is in no way an admission of the reasonableness of the present settlement of $325,000. His proposal was that Albee Mall, not BCC, be liable for the full amount of the settlement. Furthermore, the ultimate settlement exceeded his proposal by $45,000 to $65,000 and failed to take into account “substantial legal fees” already expended and “substantial ‘charge backs’ ” owed to BCC by Metropolitan Steel.

The issue of Albee Mall’s ultimate liability and the outcome of the pending state action is neither before us nor relevant to the instant action. The question here is limited to the reasonableness of the settlement between BCC and Metropolitan Steel. Plaintiff has presented a clear factual showing justifying its good faith in making the particular settlement payments and the reasonableness of the sums paid. Under the circumstances, defendant is bound to come forward with proof of evidentiary facts showing the existence of a genuine and substantial issue as to the good faith and reasonableness of these payments. Gray Mfg. Co. v. Pathe Industries, Inc., 33 A.D.2d 739, 305 N.Y.S.2d 794 (1st Dept.1969).

Defendant’s bare assertions that the $325,000 amount did not take into account “substantial legal fees” and “substantial ‘charge backs’ ” are not sufficient to raise a material issue of fact. Furthermore, the fact that defendant’s proposed settlement, reached in March 1981, was exceeded by $45,000 to $65,000 in plaintiff’s final settlement agreement in June 1983, does not, in itself, establish that the final settlement was unreasonable.

It is the intrinsic nature of settlements that no party will completely fulfill its absolute goals but that, after considering all relevant circumstances, the parties resolve to terminate litigation on the basis of a reasonable compromise. Stull v. Baker, 410 F.Supp. 1326 (S.D.N.Y.1976). The Federal Rules of Civil Procedure do not preclude a defendant from offering a plaintiff more than could possibly be obtained through litigation in order to avoid the time and costs of litigation. Abrams v. Interco Inc., 719 F.2d 23 (2d Cir.1983). We are not required to substitute our own business judgment for that of plaintiff and its counsel but need only determine whether the settlement is fair and reasonable. Taking into account that under a settlement no definitive judgment is required with respect to damages, we conclude that the settlement reached here was both reasonable and fair.

Defendant’s final argument is that the entry of summary judgment against him is improper because a question of fact remains as to whether he is liable for 50% of the settlement or for 25%, the balance being owed by his co-defendant, Charles Blitman. Howard Blitman and Charles Blitman both entered into the indemnification agreement, and both were named in this action and served with process.

The New York Court of Appeals has stated that:

It is a general presumption of law that, when two or more persons undertake an obligation, they undertake jointly; words of severance being necessary to overcome this primary presumption.

United States Printing & Lithograph Co. v. Powers, 233 N.Y. 143, 152, 135 N.E. 225, 227 (1922). Moreover, it is the law of New York that an obligee may proceed against either joint obligor and that a judgment against one shall not discharge the other. N.Y.General Obligations Law § 15-102 (McKinney 1978); N.Y.Civil Practice Law and Rules § 1501 (McKinney 1976).

With due consideration for defendant’s arguments and contentions, we conclude that he has failed to show a genuine and substantial issue of fact bearing upon the good faith of plaintiff and the reasonableness of the sum sought to be recovered.

Accordingly, we grant plaintiff’s motion for summary judgment against defendant Howard Blitman for the relief demanded in the complaint. SO ORDERED.

      . The relevant portion of the indemnification agreement provides:
      The Indemnitors [Charles and Howard Blitman] hereby agree with the party of the first part [plaintiff] that they will pay and make contribution in respect of any sum or sums paid under the Irrevocable Letter of Credit to the extent of one-half of such sum or sums so paid together with one-half of the cost to the party of the first part, under Bank of England regulations on remission of such sums to European-American Banking Corporation, issuer of the Irrevocable Letter of Credit, copy of which is attached hereto.

      . Plaintiff submitted the following documentary evidence establishing the chain of payment: (1) a letter dated September 6, 1984, from Travelers to plaintiffs counsel, confirming payment of $325,000 to Metropolitan Steel by check dated June 27, 1983; (2) a release dated June 14, 1983, executed by Metropolitan Steel, releasing Travelers from liability arising out of the construction of the Albee Mall project; (3) a Stipulation and Order of Dismissal dated June 28, 1983, signed by Hon. Henry Bramwell, United States District Judge for the Eastern District of New York, and by counsel for both parties, settling the action between Metropolitan Steel and Travelers; (4) a letter dated June 24, 1983, from Travelers to European American Banking Corporation (“EAB”), and a sight draft directing payment by EAB to Travelers, in the amount of $325,000; (5) a debit advice dated June 24, 1983, from EAB to Midland Bank, Ltd. ("Midland Bank"), in the amount of $325,000, and acknowledgment of that debit by Midland Bank; and (6) a debit advice of Midland Bank, dated July 5, 1983, in the amount of $325,000, and an accompanying letter from Midland Bank setting forth the substance of the debit advice.

      . See footnote 1, supra.

      . It should also be noted that New York law provides that upon the death of a joint obligor in contract, his estate shall be bound jointly and severally with the surviving obligor. N.Y.General Obligations Law § 15-106 (McKinney 1978). Here, plaintiff is proceeding against Howard Blitman and the estate of Charles Blitman.


source: Caselaw Access Project

author: MENCER, District Judge.

license: Public Domain

text:
    Joseph GYULAY and Joan M. Gyulay, his wife, and Deborah M. Gyulay, Plaintiffs, v. Carol Ann AIUPPY, Defendant.
    Civ. A. No. 84-90 Erie.
    United States District Court, W.D. Pennsylvania.
    March 5, 1985.

      T. Warren Jones, MacDonald, Illig, Jones & Britton, Erie, Pa., for plaintiffs.
    Wallace J. Knox, Erie, Pa., for defendant.
   OPINION

MENCER, District Judge.

The plaintiffs, Ohio residents, brought suit against the defendant, a Pennsylvania resident, to recover damages for injuries sustained by them in a motor vehicle accident which occurred on March 26, 1982, in Crawford County, Pennsylvania. The plaintiffs alleged negligence on the defendant’s part in the operation of her vehicle. The accident occurred at a time when Pennsylvania, but not Ohio, had a no-fault motor vehicle insurance act in effect. 40 P.S. § 1009.101 et seq. (1984-85 Supp.). The plaintiffs made claims for and received benefits pursuant to the Pennsylvania act from the Ohio Casualty Group for medical expenses and work loss. The plaintiffs also brought suit in federal court under our diversity jurisdiction pursuant to 28 U.S.C. § 1332.

The defendant has filed a Motion for Partial Summary Judgment pursuant to Federal Rule of Civil Procedure 56 with regard to any claims for which the plaintiffs have already received payment pursuant to the Pennsylvania No-Fault Motor Vehicle Insurance Act and to bind the plaintiffs by the provision in that Act which partially abolishes tort liability. 40 P.S. § 1009.301.

It appears to this Court that part of the defendant’s position on this legal issue is essentially correct. The plaintiffs, having elected to receive benefits pursuant to the Pennsylvania No-Fault Motor Vehicle Insurance Act, should not be able to recover for these same losses again.

The accident in this case is covered by 40 P.S. § 1009.110, which deals with motor vehicles in interstate travel. Subsection (c) deals with the applicable law in such accidents and states that:

(1) The basic loss benefits available to any victim ... shall be determined pursuant to the provisions of the state no-fault plan for motor vehicle insurance in effect in the state of domicile of the victim on the date when the motor vehicle accident resulting in injury occurs. If there is no such state no-fault plan in effect ..., then basic loss benefits available to any victim shall be determined pursuant to the provisions of the state no-fault plan for motor vehicle insurance, if any, in effect in the state in which the accident resulting in injury occurs.
(2) The right of a victim ... to sue in tort shall be determined by the law of the state of domicile of such victim____

In Toter v. Knight, 278 Pa.Super. 547, 420 A.2d 676, 679-80 (1980), § 1009.110(c) was held to mean that:

If the non-resident is domiciled in a state that does not have in effect a state no-fault plan ..., then he is entitled to the basic loss benefits provided under Pennsylvania’s No-Fault Act. However, ... under section 110(c)(2) the non-resident always retains the tort remedies that are available under the law of his home state. (Emphasis added.)

If this Court follows the view expressed in Toter, which we must do in accord with the deference due to a decision by a Pennsylvania court when we are dealing with a diversity case, then the plaintiffs can recover under the Pennsylvania No-Fault Act AND can retain the tort remedies provided by Ohio law. Pennsylvania courts have admitted that § 1009.110(c) can accord nonresident plaintiffs liberal treatment but that possibility does not change the courts’ interpretation of the section. Toter at 681 and Muller v. State Farm Insurance Co., 31 D. & C.3d 87, 93 (1984).

However, the plaintiffs are not entitled to a double recovery. The plaintiffs have chosen to take their assured basic loss benefits, which are payable regardless of fault, under the Pennsylvania No-Fault Act. Having made this choice, the plaintiffs should not be able to recover the amounts paid under the Act a second time in their tort action, even though they have the right to bring this tort action under Ohio law. Flowers v. Smith, 12 D. & C.3d 434 (1979). The plaintiffs, having received the benefit of the Pennsylvania No-Fault Act, have no right to the benefit of a second recovery of those amounts from the defendant.

The plaintiffs can, in their tort action, recover amounts not covered by the basic loss benefits under the Act. They are not bound by the provisions of 40 P.S. § 1009.301, which partially abolishes tort liability, because of 40 P.S. § 1009.110(c), which specifically deals with accidents involving non-residents of Pennsylvania and reserves to these non-residents their tort remedies under their own state laws. Toter 278 Pa.Super. 547, 420 A.2d at 681. For example, the defendant would remain liable for work loss to the extent that this work loss had not been compensated due to the work loss benefit limitations under 40 P.S. § 1009.202(b) of $1,000 per month and $15,000 total. Vespaziani v. Insana, 501 Pa. 612, 462 A.2d 669, 671 (1983) and Zettle v. Donley, 18 D. & C.3d 200, 203 (1981). The plaintiffs may also be able to recover from the defendant for any medical expenditures that were not covered under “allowable expense” pursuant to 40 P.S. § 1009.202(a). And, the defendant would remain liable to the plaintiffs for damages for non-economic detriment even if the plaintiffs could not meet the threshold requirements of the Pennsylvania No-Fault Act because of the remedies available to them under Ohio law.

This Court is not persuaded by the defendant’s arguments that the plaintiffs, by making claims for and receiving benefits under the Pennsylvania No-Fault Act, are bound by its provision abolishing tort liability for “other than non-economic detriment.” Neither is this Court persuaded by the plaintiffs’ arguments regarding Ohio’s collateral source rule, which would appear to allow double recovery in this case. This Court is of the view that the defendant is entitled to credit the benefit received by the plaintiffs under the Pennsylvania No-Fault Motor Vehicle Insurance Act to the extent that the plaintiffs were paid monies under it.

An appropriate order will be issued.

ORDER

AND NOW, this 5th day of March, 1985, IT IS ORDERED that the Motion for Partial Summary Judgment filed by the Defendant, Carol Ann Aiuppy, is GRANTED IN PART and DENIED IN PART. The Motion is GRANTED as to the claims by the Plaintiffs, Joseph Gyulay, Joan M. Gyulay and Deborah M. Gyulay, for damages for medical expenses and work loss for which they have been paid sums pursuant to the Pennsylvania No-Fault Motor Vehicle Insurance Act. The Motion is DENIED as to the remaining claims.


author: WARREN, District Judge.

text:
    Wayne E. ZIMMER, Plaintiff, v. MANITOWOC SHIPBUILDING, INC., a subsidiary of the Manitowoc Company, Inc., Defendant.
    No. 84-C-0095.
    United States District Court, E.D. Wisconsin.
    March 5, 1985.
    Arthur Heitzer, Milwaukee, Wis., for plaintiff.
    Clifford B. Buelow, Davis & Kuelthau, Milwaukee, Wis., for defendant.
   DECISION AND ORDER

WARREN, District Judge.

Presently before the Court in this matter is the defendant’s motion for partial judgment on the pleadings, pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, by which it seeks dismissal of the plaintiff’s cause of action under the Wisconsin Fair Employment Act, Wis.Stat. § 111.31 et seq., and dismissal of his claims for compensatory and punitive damages. The Court has carefully considered this matter and concludes, for the reasons articulated below, that the motion must be denied in part and granted in part.

BACKGROUND

This action was initiated on January 20, 1984, when the plaintiff filed his complaint “for legal and equitable relief to remedy unlawful discrimination against him on the basis of his age....” Plaintiff’s Complaint at 1 (January 20, 1984). Invoking the remedial provisions of both the federal Age Discrimination In Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq., and the Wisconsin Fair Employment Act, Wis.Stat. § 111.37 et seq., the plaintiff charges that the defendant unlawfully terminated his employment effective January 1, 1984, on the basis of his age.

Specifically, the complaint in this action states that while the plaintiff was the oldest employee in the defendant’s sales department, his regular employment evaluation never indicated that his performance was other than satisfactory or that it had deteriorated in any manner; indeed, the plaintiff contends that his own workload and productivity at the time of his layoff exceeded that of the previous year. The complaint further alleges that in May of 1982, when the plaintiff was placed on “indefinite layoff,” other, younger employees with less seniority, experience, and job qualifications were assigned to complete those tasks previously performed by the plaintiff. Perhaps parenthetically, the complaint also charges that, “around the time” of the plaintiff’s discharge, the defendant “layed off a disproportionately large number of its salaried employees who were within the protected age category (age 40 or more).” Plaintiff’s Complaint at 3 (January 20, 1984).

In addition, the plaintiff claims that his immediate supervisor, a Mr. E. Boprey, discriminatorily harassed him and continued to deny him certain employment benefits, such as authorization to attend field trips and conferences to meet certain sales prospects. Among other things, the plaintiff charges that Mr. Boprey resented him as a potential threat because he was older and more experienced; that certain of Mr. Boprey’s comments to the plaintiff were discriminatory in nature and meant to suggest that the plaintiff consider early retirement; and that Mr. Boprey’s placement on an organizational chart indicating his position as the plaintiff’s supervisor, while inaccurate, was nonetheless used to justify the plaintiff’s discharge and that of another co-worker.

By his complaint, the plaintiff seeks, among other things, declaratory judgment that the defendant has violated the Age Discrimination In Employment Act of 1967, as amended 29 U.S.C. § 621 et seq.; a permanent injunction enjoining the defendant from continued discrimination against the plaintiff based on his age; reinstatement to a position in the defendant’s employ at a rank and pay at least comparable to that held by him at the time of his indefinite layoff, plus regular salary increases; back pay and compensation for actual economic losses, both present and future; a like amount as liquidated damages, based on the allegedly willful nature of the defendant’s actions; compensatory and punitive damages for actual intangible injuries, both present and future; and costs and reasonable attorneys’ fees.

On February 27, 1984, the defendant filed its answer to the complaint, denying all substantive allegations contained therein and raising several affirmative defense — among them, that the complaint fails to state a claim upon which relief can be granted, that the plaintiff has failed to mitigate his damages and to exhaust his administrative remedies under the Wisconsin Fair Employment Act, Wis.Stat. § 111.-31 et seq., and, significantly, that the Court lacks subject matter jurisdiction over that portion of the complaint brought under the Wisconsin Fair Employment Act, Wis.Stat. § 111.31 et seq., and that the plaintiff is not entitled to compensatory or punitive damages. By its answer, the defendant requests that the complaint be dismissed and that it be awarded those costs and attorneys’ fees incurred in the defense of this matter.

In support of its present motion for partial judgment on the pleadings, filed on August 31, 1984, the defendant argues, first, that the administrative remedies established by the Wisconsin Fair Employment Act, Wis.Stat. § 111.31 et seq., are the exclusive remedies available for violations of the Act and that a private right of action does not exist under its provisions. In support this contention, the defendant directs the Court’s attention to decisions rendered by Judges Myron L. Gordon and Terrence T. Evans in McCluney v. Joseph Schlitz Brewing Company, 489 F.Supp. 24 (E.D.Wis.1980), and Otero v. Federal Casting Division of Chromalloy American Corporation, Case No. 82-C-1484 (E.D. Wis. October 7, 1983), respectively, and by the Wisconsin Court of Appeals in Bac hand, v. Connecticut General Life Insurance Company, 101 Wis.2d 617, 305 N.W.2d 149 (1981).

In support of its companion request that the plaintiff’s claim for compensatory and punitive damages be dismissed, the defendant notes that the United States Court of Appeals for the Seventh Circuit has held unequivocally that parties suing under the federal Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq., are not entitled to recover either compensatory or punitive damages. Pfeiffer v. Essex Wire Corporation, 682 F.2d 684 (7th Cir.1982).

On November 20, 1984, the plaintiff filed its opposing brief, observing, first, that both this and other branches of this Court have recognized private causes of action under the Wisconsin Fair Employment Act, Wis.Stat. § 111.37 et seq., as has the Wisconsin Supreme Court itself in Yanta v. Montgomery Ward & Company, Inc., 66 Wis.2d 53, 224 N.W.2d 389 (1974), and Kurtz v. City of Waukesha, 91 Wis.2d 103, 280 N.W.2d 757 (1979). Perhaps most persuasively, the plaintiff cites this Court’s recent decision in Equal Employment Opportunity Commission v. Miller Brewing Company, Case No. 81-C-578 at 6 (E.D. Wis., July 24, 1984), for the proposition that a violation of the Wisconsin Fair Employment Act, Wis.Stat. 111.31 et seq., such as that alleged in this case, does “give[] rise to a civil cause of action for damages for lost wages.” In that case, as the plaintiff has accurately recounted, this Court followed the clear dictates of the Wisconsin Supreme Court in Kurtz v. City of Waukesha, 91 Wis.2d 103, 280 N.W.2d 757 (1979), while nonetheless acknowledging the apparent split of authority among the lower state courts on this issue. Parenthetically, the plaintiff also observes that both Judge John W. Reynolds and Magistrate Aaron E. Goodstein reached similar conclusions in Shanahan v. WITI-TV, Inc., 565 F.Supp. 219 (E.D.Wis.1982), and Liebenstein v. Associated Trucklines, Inc., Case No. 83-C-267 (E.D.Wis., October 17, 1983 & January 3, 1984), respectively.

In response to the defendant’s related contention that compensatory and punitive damages may not be awarded under the Age Discrimination In Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq., the plaintiff concedes the prohibitive effect of the Seventh Circuit’s ruling in Pfeiffer v. Essex Wire Corporation, 682 F.2d 684 (7th Cir.1982), but nonetheless maintains that the admonition of the Wisconsin Supreme Court in Watkins v. Labor & Industry Review Commission, 117 Wis.2d 753, 345 N.W.2d 482 (1984), that the Wisconsin Fair Employment Act, Wis.Stat. § 111.31 et seq., be liberally construed for the accomplishment of its broad, remedial purpose, dictates that the subject claims not be stricken at this time. Moreover, the plaintiff again cites Judge John W. Reynolds’ decision in Shanahan v. WITI-TV, Inc., 565 F.Supp. 219 (E.D.Wis.1982), and this Court’s holding in Equal Employment Opportunity Commission v. Miller Brewing Company, Case No. 81-C-578 (E.D.Wis., July 24, 1984), for the proposition that its recovery under state law should not be limited to lost wages alone.

In its reply brief, filed on December 11, 1984, the defendant, while not discounting the import of the cited authority on private rights of action under state law, urges this Court to reevaluate its position in the context of the Wisconsin Supreme Court’s recent decision in Watkins v. Labor & Industry Review Commission, 117 Wis.2d 753, 345 N.W.2d 482 (1984), plainly construing its earlier decision in Yanta v. Montgomery Ward & Company, 66 Wis.2d 53, 224 N.W.2d 389 (1974), as recognizing under the Wisconsin Fair Employment Act, Wis. Stat. § 111.31 et seq., a private cause of action solely with respect to the recovery of lost wages. Citing at length the relevant discussion of the Wisconsin Court of Appeals’ in Bachand v. Connecticut General Life Insurance Company, 101 Wis.2d 617, 305 N.W.2d 149 (1981), the defendant concludes that the state courts have not recognized a private cause of action with respect to the basic underlying question of liability for discrimination and that the present state claim, by which that very issue is raised, must therefore be dismissed. Alternatively, the defendant suggests that the apparent confusion on this important issue, as demonstrated by the conflicting interpretations rendered by both the state and federal courts, provides this Court with an adequate basis upon which to refuse to exercise its pendent jurisdiction.

With respect to its related request that the claims for compensatory and punitive damages be stricken, the defendant notes, among other things, that the perceived split of authority on the plaintiffs entitlement to maintain his claims under the Wisconsin Fair Employment Act, Wis.Stat. § 111.31 et seq., only underscores the impropriety of limiting the prohibitive import of the Seventh Circuit’s unequivocal ruling in Pfeiffer v. Essex Wire Corporation, 682 F.2d 684 (7th Cir.1982). Most significantly, however, the defendant contends that if the Wisconsin Supreme Court’s decision in Yanta v. Montgomery Ward & Company, Inc., 66 Wis.2d 53, 224 N.W.2d 389 (1974), is recognized as authority for the plaintiff’s state private cause of action, that ruling should likewise be controlling insofar as it limits the plaintiff’s recovery to damages in the form of lost wages.

RULE 12(c), THE PLAINTIFF’S CLAIMS UNDER THE WISCONSIN FAIR EMPLOYMENT ACT, AND THE DEFENDANT’S ENTITLEMENT TO PARTIAL JUDGMENT ON THE PLEADINGS

The obvious purpose of Rule 12(c) of the Federal rules of Civil Procedure is to promote the conservation of time and resources in cases where ultimate issues of fact are not in dispute. See Ulen Contracting Corporation v. Tri-County Electric Cooperative, 1 F.R.D. 284, 285 (W.D. Mich.1940); see also Noel v. Olds, 149 F.2d 13, 15 (D.C.Cir.1945) (rule intended to prevent piecemeal process of judicial determination). A motion under the Rule properly raises questions of law arising on the pleadings, and judgment thereon is not to be rendered unless the movant’s right thereto is clear. Friedman v. Washburn Company, 145 F.2d 715, 718 (7th Cir.1944); National Surety Corporation v. First National Bank in Indiana, 106 F.Supp. 302, 304 (D.Pa.1952).

As to the first portion of the present petition for judgment on the pleadings, the Court must conclude that the movant’s entitlement to the relief sought is far from clear. As both parties to this action properly recognize, this Court has already determined that, in sorting out the apparent conflict of authority on the existence of a private right of action under the Wisconsin Fair Employment Act, Wis.Stat. § 111.31 et seq., the position first articulated by the Wisconsin Supreme Court in Yanta v. Montgomery Ward & Company, Inc., 66 Wis.2d 53, 224 N.W.2d 389 (1974), and reaffirmed in Kurtz v. City of Waukesha, 91 Wis.2d 103, 280 N.W.2d 757 (1979), must be followed. The Court’s conclusion to that end in Equal Employment Opportunity Commission v. Miller Brewing Company, Case No. 81-C-578 (E.D.Wis., July 24, 1984), was presaged by the like findings of Judge John W. Reynolds in Shanahan v. WITI-TV, Inc., 565 F.Supp. 219 (E.D.Wis.1982), and of Magistrate Aaron E. Goodstein in Liebenstein v. Associated Trucklines, Inc., Case No. 83-C-267 (E.D.Wis., October 17, 1983 & January 3, 1984). To the extent that other branches of this Court have declined to recognize a private right of action under the Wisconsin Fair Employment Act, Wis.Stat. § 111.31 et seq., the Court feels strongly that its consistent interpretation of the statute is most faithful to both the recent opinions of the Wisconsin Supreme Court and the language of the Act itself, including the directive that it be liberally construed to effectuate its remedial purpose.

Accordingly, the only significant issue now before the Court is that presented by the movant in its reply brief — namely, whether the recent state decision in Watkins v. Labor & Industry Review Commission, 117 Wis.2d 753, 345 N.W.2d 482 (1984), necessitates the Court’s reconsideration and reversal of its position with respect to a state private right of action in favor of parties like the plaintiff. In addressing the question of whether the Wisconsin Fair Employment Act, Wis.Stat. § 111.31 et seq., authorizes the Department of Industry, Labor and Human Relations to award reasonable attorneys’ fees to a prevailing complainant in a discrimination action, the Wisconsin Supreme Court explained its holding in Yanta v. Montgomery Ward & Company, Inc., 66 Wis.2d 53, 224 N.W.2d 389 (1974), this way:

In Yanta, the plaintiff was discharged from her employment. She initially filed a complaint with DILHR, alleging a violation of the Fair Employment Act. DILHR found the discharge to be an act of sex discrimination and awarded prospective relief only, ordering the defendant to reinstate the plaintiff and to cease and desist from further discrimination. The plaintiff subsequently commenced a civil action in circuit court, alleging that her discharge was discriminatory, and seeking damages that included back pay and attorney’s fees. On appeal, the plaintiff argued that the provisions of the Fair Employment Act created a private civil cause of action to recover for injuries arising out of employment discrimination. The primary issue therefore was whether the plaintiff’s complaint stated a cause of action.
We held that the plaintiffs complaint stated a cause of action insofar as it sought damages for lost wages while the plaintiff was unemployed. We also held that the plaintiff’s right to damages was limited to the right to seek recovery for lost wages, rather than for emotional harm, harm to reputation, or attorney’s fees, stating: “The statutes [the Fair Employment Act] expressly refer to harm from loss of wages; they do not refer to emotional or reputation harm or attorney’s fees.” 66 Wis.2d at 62-63, 224 N.W.2d 389.
The concern in Yanta, therefore, was with the narrow issue of whether the plaintiff could maintain a private civil cause of action in court under the Fair Employment Act. In deciding this issue, we looked to the express language of the Act to establish the paramenters of that cause of action, including the type of damages that would be allowable in a private civil action brought in court....

Watkins v. Labor & Industry Review Commission, 117 Wis.2d 753, 759-760, 345 N.W.2d 482, 486 (1984) (emphasis added).

The Court has carefully considered the import of the state supreme court’s ruling in Watkins v. Labor & Industry Review Commission, 117 Wis.2d 753, 345 N.W.2d 482 (1984), and has, in this undertaking, reviewed again the Yanta-Kurtz-Bachand trilogy discussed at length by the parties and those branches of this Court that have addressed this issue to date. Admittedly, the private right of action recognized by the Watkins court is expressly restricted to the recovery of lost wages. Nevertheless, this Court does not interpret Justice William A. Bablitch’s recent statement in this area so narrowly as to preclude any private cause of action under the circumstances of the present case.

In the Court’s view, the mere fact that Watkins does not explicitly authorize a private cause of action with respect to the underlying issue of liability does not signal the Wisconsin Supreme Court’s intention to place so restrictive a gloss on the Wisconsin Fair Employment Act, Wis.Stat. § 111.-31 et seq., that recovery of back wages should be precluded in a case like the present. Indeed, such a restrictive construction of the statute might substantially undermine the very remedial purpose for which it was enacted.

For largely the same reasons, the Court opines that past disagreements among branches of this Court with respect to the propriety of a state cause of action is not a sufficient basis upon which to decline the exercise of pendent jurisdiction. In fact, with the addition of the Wisconsin Supreme Court’s opinion in Watkins, the Court becomes ever more convinced that any previous judicial conflicts on this important matter may now be more spurious than real and, to engage in some limited speculation, that the questions presented in McCluney v. Joseph Schlitz Brewing Company, 489 F.Supp. 24 (E.D.Wis.1980), and Otero v. Federal Casting Division of Chromalloy American Corporation, Case No. 82-C-1484 (E.D.Wis., October 7, 1983), might be resolved differently today. Accordingly, this Court must reject the defendant’s peripheral argument that treatment of its position on the plaintiff’s state claim is, in some manner, dependent upon the “luck of the draw.” Defendant’s Reply Brief at 6 (December 11, 1984).

Yet just as clearly as the Wisconsin Supreme Court’s recent decisions necessitate denial of the defendant’s Rule 12(c) motion with respect to the very existence of some cause of action under the Wisconsin Fair Employment Act, Wis.Stat. § 111.31 et seq., those recent pronouncements dictate that any recovery to which the plaintiff might be entitled under state law be limited to lost wages. As the defendant accurately observes, the most unequivocal expression of this principle is found in Yanta v. Montgomery Ward & Company, Inc., 66 Wis.2d 53, 62-63, 224 N.W.2d 389, 391 (1974), in which the state supreme court discussed the relevant policy considerations, precedential authority, and statutory language before concluding that the “plaintiff’s right to damages [must be limited] to the right to seek recovery for lost wages rather than for emotional harm, harm to reputation, or attorney’s fees.” As indicated above, that position was reaffirmed in both Kurtz v. City of Waukesha, 91 Wis.2d 103, 280 N.W.2d 757 (1979), and Watkins v. Labor & Industry Review Commission, 117 Wis.2d 753, 345 N.W.2d 482 (1984).

' In short, this Court declines to construe the Wisconsin Fair Employment Act, Wis. Stat. § 111.31 et seq., so liberally as to disregard the clear interpretation articulated by the state’s highest tribunal several contexts. This, when coupled with the clear prohibition on recovery of compensatory and punitive damages under the federal Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq., see Pfeiffer v. Essex Wire Corporation, 682 F.2d 684 (7th Cir.1982), necessitates that the defendant’s motion in this context be granted.

CONCLUSION

For the reasons stated above, the Court hereby DENIES the defendant’s motion for judgment on the pleadings, pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, insofar as it seeks dismissal of the plaintiff’s entire cause of action under the Wisconsin Fair Employment Act, Wis. Stat. § 111.31 et seq.

The Court hereby GRANTS the defendant’s motion for judgment on the pleadings pursuant to Rule 12(c) of the Federal Rules of Civil Procedure, insofar as it seeks dismissal of the plaintiff’s claims for compensatory and punitive damages under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621 et seq., and the Wisconsin Fair Employment Act, Wis.Stat. § 111.31 et seq. As to his cause of action under the state statute, the defendant shall be permitted to seek recovery of lost wages alone.


author: McLAUGHLIN, District Judge.

text:
    In re Application of John DOE, Esq., Petitioner, For an Order Pursuant to Fed.R.Crim.P. 17 Quashing Subpoenas Issued by the United States of America, Respondent.
    No. 84 CV 4718.
    United States District Court, E.D. New York.
    March 5, 1985.

      John Gutman, Brooklyn, N.Y., for petitioner.
    Raymond J. Dearie, U.S. Atty., E.D.N.Y., Brooklyn, N.Y., for respondent; Patricia A. Pileggi, Brooklyn, N.Y., of counsel.
   MEMORANDUM AND ORDER

McLAUGHLIN, District Judge.

This is a motion pursuant to Fed.R. Crim.P. 17 to quash three subpoenas served on petitioner, an attorney representing individuals Richard Roe and John Smith, and XYZ Realty, Inc. For the reasons developed below, the motion is denied.

Facts

A grand jury is investigating possible violations of the Internal Revenue Code by Roe and Smith. Petitioner represented Roe in 1978 when Roe purchased property in Rockland County, New York. He represented Smith in 1980 when Smith purchased property in New Jersey. Petitioner also represented XYZ Realty, Inc. in 1983 when that company purchased property in Bronx County, New York.

Petitioner challenges three subpoenas. The first, returnable February 28, 1984, directs petitioner to produce all business records of XYZ Realty, Inc. from 1978 through 1982, including corporate minutes, financial statements, records of Joans, banking records and corporate ledgers. The second, returnable September 25,1984, directs petitioner to testify and to produce records relating to the purchase and sale of the Rockland, New Jersey and Bronx properties, as well as records of his fee arrangements with his clients. The third subpoena, returnable November 27, 1984, directs petitioner to testify before the grand jury regarding his knowledge of the business affairs of XYZ Realty, Inc.

Discussion

Petitioner makes two arguments. First, he claims a privilege not to comply with the subpoenas based on his clients’ Fifth Amendment privileges against self-incrimination. Second, petitioner claims the records and testimony sought are protected by the attorney-client privilege.

1. The February 28, 1984 Subpoena

The first subpoena directs petitioner to produce “any and all documentation or records in your possession or subject to your control in regard to [XYZ] Realty.” Because this subpoena commands only production of corporate records, it is beyond cavil that neither petitioner nor his clients have a Fifth Amendment privilege with respect to these records. Bellis v. United States, 417 U.S. 85, 94 S.Ct. 2179, 40 L.Ed.2d 678 (1974); United States v. White, 322 U.S. 694, 64 S.Ct. 1248, 88 L.Ed. 1542 (1944). If any privilege exists with respect to this subpoena, it must be based on the attorney-client privilege.

Because this is a federal grand jury proceeding, the federal common-law rule of attorney-client privilege applies. Fed.R.Evid. 501; In re Katz, 623 F.2d 122, 124 n. 1 (2d Cir.1980). The privilege attaches when: 1) the client seeks legal advice from a professional legal advisor acting in that capacity; 2) communications relating to that purpose are made in confidence by the client; 3) at the client’s instance the communications are permanently protected from disclosure by himself or by the legal advisor; and 4) the privilege has not been waived. In re Grand Jury Subpoena Duces Tecum, 731 F.2d 1032, 1036 (2d Cir.1984). “The privilege is triggered only by a client’s request for legal, as contrasted with business, advice.” Id. at 1037 (citing In re John Doe Corp., 675 F.2d 482, 488 (2d Cir.1982).

The burden of establishing the privilege is on petitioner. In re Katz, supra, 623 F.2d at 125. Petitioner’s original set of papers entirely failed to meet this burden. After oral argument petitioner was given several weeks to submit a more detailed affidavit and to deliver for in camera inspection the documents that would be responsive to this subpoena. The affidavit subsequently filed does not meet this burden. The documents submitted are banking records, responsive to the subpoena only in part, and, because they are solely business papers, are clearly not privileged. Accordingly, the motion to quash this subpoena is denied.

2. The September 25, 1984 Subpoena

The second subpoena directs petitioner to testify and to bring with him “[a]ny and all documentation pertaining to the following transactions as attorney representing [XYZ Realty, John Smith and Richard Roe] including but not limited to” (1) cancelled checks received in 1983 for sale of the Bronx property by XYZ Realty; (2) all details of the purchase of the Bronx property by XYZ Realty; (3) amounts and dates of fees received from Smith and Roe for the closing of the New Jersey and Rockland properties; and (4) the amounts and dates of fees received from Smith and Roe for any other services rendered.

With respect to the first two categories of documents demanded, clearly XYZ Realty, Inc. has no Fifth Amendment privilege to assert. Bellis v. United States, supra; United States v. White, supra. As to the third and fourth categories of documents, petitioner has not, despite the two opportunities afforded him, made even a colorable showing that refusal to comply with this portion of the subpoena is privileged under the Fifth Amendment.

Petitioner has also failed to establish that the subpoenaed documents are protected by the attorney-client privilege. Petitioner’s two affidavits contain only conclusory assertions. Despite the Court’s suggestion, petitioner did not submit, for in camera inspection, documents that would be responsive to the subpoena.

On its face, the subpoena demands documents that are not protected by the attorney-client privilege. The first two categories are unprivileged because they relate to business, not legal, advice. In re Grand Jury Subpoena Duces Tecum, supra, 731 F.2d at 1036. The third and fourth categories relate to petitioner’s fee arrangements with his clients. An attorney and his client may not claim a privilege to refuse to disclose a fee arrangement to the grand jury, absent exceptional circumstances. In re Grand Jury Subpoena Duces Tecum Served Upon Gerald L. Shargel, Esq., 742 F.2d 61, 64-65 (2d Cir.1984). Petitioner has made no showing that exceptional circumstances exist in this case.

Accordingly, the motion to quash the September 25, 1984 subpoena is denied insofar as the subpoena commands the production of documents. To the extent the subpoena requires petitioner to testify, any ruling must await the asking of specific questions by the prosecutor.

3. The November 27, 198k Subpoena

The third subpoena directs petitioner to testify before the grand jury. In response to petitioner’s motion to quash, the government provided petitioner with a list of the questions he will be asked. Petitioner invokes the attorney-client privilege.

Once again, petitioner has failed to make the required showing to sustain the claim of privilege. At oral argument, the Court informed petitioner that the enumerated questions appeared to seek answers concerning only business advice which, though perhaps intended to be private, most certainly were not privileged. Petitioner’s post-argument affidavit does not satisfy his burden of showing the applicability of the privilege. In re Katz, supra, 623 F.2d at 125.

The government also intends to ask petitioner whether he possesses documents relating to the will and the estate of Mr. Roe’s mother. The government is clearly-entitled to ask about the fact of possession; whether petitioner may properly refuse to answer other questions on this subject need not be addressed until the questions are asked.

For the foregoing reasons, petitioner’s motion to quash the three grand jury subpoenas is denied.

SO ORDERED

      . The questions to be asked are as follows.
      1. Who were the officers of XYZ Realty, Inc.;
      2. What were their addresses;
      3. Who was employed by XYZ during the period 1977 through 1982;
      4. Do you have in your possession:
      a) copies of Forms W-2, checks, Forms 1099 provided to these employees;
      b) employment applications of those employees;
      5. What was the purpose of XYZ Realty;
      6. Who funded XYZ;
      a) How much cash was put into the corporation;
      b) Who funded the corporation;
      7. Did the officers of XYZ receive salaries;
      a) How much;
      b) During what period of time;
      8. What assets did XYZ buy during the period 1977 through 1982;
      a) What buildings did XYZ purchase during this period;
      b) How much did XYZ pay for any such assets;
      c) Where the purchases of any assets financed;
      d) If so, by whom;
      e) Who did XYZ buy the buildings from;
      f) Do you have any closing statements for such assets;
      9. Did XYZ sell any property during the period 1977-1982;
      a) To whom;
      b) What was the selling price;
      10. Did XYZ lend money during the period 1977-1982;
      a) Please provide details of any such loans;
      11. Who asked to have this corporation set up;
      12. Names of accountants for XYZ Realty.


author: NANGLE, Chief Judge.

text:
    Rod E. NOLLMAN d/b/a R.E. Nollman Company, Plaintiff, v. ARMSTRONG WORLD INDUSTRIES, INC., Lloyd Manufacturing Co., Inc., and Trans Technology Corporation, Defendants.
    No. 84-2339C(1).
    United States District Court, E.D. Missouri, E.D.
    March 6, 1985.

      Robert J. Albair, Clayton, Mo., for plaintiff.
    Barry A. Short, St. Louis, Mo., for defendant Armstrong World Industries, Inc.
    Michael B. McKinnis, Judy K. Raker, St. Louis, Mo., for defendants Lloyd Mfg. Co., Inc. and Trans Technology Corp.
   MEMORANDUM

NANGLE, Chief Judge.

This case is now before this Court, on the following motions: 1) plaintiff’s motion to compel discovery; 2) defendant Lloyd Manufacturing Company, Inc.’s (hereinafter “Lloyd”) motion to dismiss Counts III and IV of plaintiff’s complaint; and 3) defendant Transtechnology Corporation’s (hereinafter “Transtechnology”) motion to dismiss for lack of personal jurisdiction or, in the alternative, for failure to state a claim upon which relief can be granted.

Plaintiff’s cause of action arises out of his contract with Lloyd to act as a sales representative for Lloyd in the States of Missouri, Kansas and portions of Southern Illinois. The contract was entered into on or about March 30,1981, and was terminated by Lloyd effective April 1, 1984. Plaintiff alleges that after termination of his contract, Lloyd entered into a contract with defendant Armstrong World Industries, Inc., (hereinafter “Armstrong”). Lloyd is a wholly-owned subsidiary of Transtechnology-

Plaintiff’s complaint consists of four separate counts. Count I is against Armstrong and Transtechnology and alleges that they tortiously interfered with plaintiff’s contract with Lloyd. Count II is against Lloyd and alleges that it breached its contract with plaintiff. Count III is against Armstrong, Lloyd and Transtechnology, and alleges that they engaged in a civil conspiracy to breach the contract between plaintiff and Lloyd. Count IY is also against Armstrong, Lloyd and Transtechnology, and is essentially a prayer for punitive damages for the torts alleged in Counts I and III.

I. PLAINTIFF’S MOTION TO COMPEL

Plaintiff moves to compel Lloyd and Transtechnology to respond to plaintiff’s interrogatories and requests for production of documents. Said defendants’ response to plaintiff’s motion stated that said defendants shall on or before February 25, 1985, respond to plaintiff’s interrogatories and requests for production of documents. Accordingly, plaintiff’s motion is denied as moot, subject to said defendant’s compliance with their representations.

II. TRANSTECHNOLOGY’S MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION OR, IN THE ALTERNATIVE, FOR FAILURE TO STATE A CLAIM UPON WHICH RELIEF CAN BE GRANTED

Defendant Transtechnology asserts two alternative bases' for dismissing it from this action. First, it argues that this Court lacks personal jurisdiction over it. Second, it argues that Counts I, III and IV of plaintiff’s complaint, which are the only counts in which Transtechnology is named as a defendant, fail to state a claim upon which relief can be granted. Because this Court holds that it lacks in personam jurisdiction over Transteehnology, it is unnecessary to reach Transtechnology’s arguments concerning the sufficiency of plaintiff’s complaint.

In passing on a motion to dismiss for lack of jurisdiction over a non-resident, a federal diversity court is required to engage in a two-step inquiry: first, whether defendant committed one of the acts enumerated in the long-arm statute; and second, whether the exercise of personal jurisdiction over defendant violates the due process clause of the fourteenth amendment. The Land-O-Nod Company v. Bassett Furniture Industries, Inc., 708 F.2d 1338 (8th Cir.1983); Scullin Steel Co. v. National Railway Utilization Corp., 676 F.2d 309, 312 (8th Cir.1982). Plaintiff, the party that is seeking to invoke federal jurisdiction, has the burden of establishing that jurisdiction exists, and this burden may not be shifted to the party challenging the jurisdiction. Mountaire Feeds, Inc. v. Agro Impex, S.A., 677 F.2d 651, 653 (8th Cir. 1982). While the facts are viewed in the light most favorable to the plaintiffs, “there must nonetheless be some evidence upon which a prima facie showing of jurisdiction may be found to exist....” Aaron Ferer & Sons Co. v. Diversified Metals Corp., 564 F.2d 1211, 1215 (8th Cir.1977) (citations omitted). See also Data Disc, Inc. v. Systems Technology Associates, Inc., 557 F.2d 1280, 1285 (9th Cir.1977) (plaintiff need only make a prima facie showing of jurisdictional facts through submission of affidavits plus discovery materials); Greycas, Inc. v. Anderson, 584 F.Supp. 894, 895-96 (E.D.Mo.1984); 4 Wright & Miller, Federal Practice and Procedure: Civil § 1068 at 250 (1969).

Missouri’s Long-Arm statute provides:

1. Any person or firm, whether or not a citizen or resident of this state, or any corporation, who in person or through an agent does any of the acts enumerated in this section, thereby submits such person, firm, or corporation, and, if an individual, his personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any such acts:
(1) The transaction of any business within this state;
(2) The making of any contract within this state;
(3) The commission of a tortious act within this state;
(4) The ownership, use, or possession of any real estate situated in this state;
(5) The contracting to insure any person, property or risk located within this state at the time of contracting.
2. Only causes of action arising from acts enumerated in this section may be asserted against a defendant in an action in which jurisdiction over him is based upon this section.

§ 506.500, R.S.Mo. (1982).

The due process clause of the fourteenth amendment places limits upon the power of a court to exercise personal jurisdiction over a non-resident defendant. The due process clause requires that a defendant have certain minimum contacts with the forum state such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945); Land-O-Nod, 708 F.2d at 1340. Accord World Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Kulko v. California Superior Court, 436 U.S. 84, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978). “In judging minimum contacts, a court properly focuses on ‘the relationship among the defendant, the forum, and the litigation.’ ” Calder v. Jones, — U.S. —, 104 S.Ct. 1482, 1486, 79 L.Ed.2d 804 (1984) (citations omitted). See also Helicopteros Nacionales de Colombia S.A. v. Hall, — U.S. —, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404 (1984). The defendant’s contacts with the forum state must be purposeful and such that defendant “should reasonably anticipate being haled into court there.” World Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. at 567. See also Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958).

In this circuit, the due process standard has devolved into a consideration of five factors:

(1) the nature and quality of the contacts with the forum state; (2) the quantity of the contacts with the forum state; (3) the relation of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) the convenience of the parties.

Aaron Ferer & Sons Co. v. Diversified Metals Corp., 564 F.2d 1211, 1215 (8th Cir. 1977). See Land-O-Nod, 708 F.2d at 1340. The first three factors are of primary importance and the last two are of secondary importance. Id.

In the case at bar, plaintiff contends that Transtechnology was subject to service of process under Missouri’s long-arm statute, because Transtechnology transacted business within this State, made contracts within this State, and committed a tort within this State. According to affidavits submitted on behalf of Transtechnology, it has one customer in Missouri which customer represents 2.5% of its national sales. In addition, during the period from September 15, 1981, through August 17, 1984, Transtechnology maintained a sales representative in Missouri, whose sole function was to service Transtechnology’s single Missouri customer. However, to the extent that these contacts constituted transacting business within Missouri or making contracts within Missouri, the instant cause of action does not arise from the “doing” of said acts. Scullin Steel Company v. National Railway Utilization Corporation, 676 F.2d 309, 312 (8th Cir.1982); State ex rel. Newport v. Wiesman, 627 S.W.2d 874, 877 (Mo.1982). Accordingly, Transtechnology was not subject to service of process under Missouri’s long-arm statute by reason of § 506.500-1.(1) and (2), R.S.Mo. (1982), and the only way that Transtechnology was subject to long-arm service of process was if Transtechnology committed a tort within Missouri.

The torts which Transtechnology allegedly committed in Missouri, are tortious interference with contract and a civil conspiracy. Recently, this Court discussed the approach that should be taken in addressing a motion to dismiss for lack of personal jurisdiction where the claimed contact is an intentional tort, as follows:

If a non-resident defendant commits an intentional tort in Missouri, it is clear that this single contact is sufficient to meet the due process standard. Block Industries v. DHJ Industries, Inc., 495 F.2d 256, 259 (8th Cir. 1974); Elkhart Engineering corp. v. Dornier Werke, 343 F.2d 861 (5th Cir. 1965); 4 Wright & Miller, Federal Practice and Procedure: Civil § 1069 at 257 (1969). Because the jurisdictional facts, where jurisdiction is based upon a single tort, are identical to the merits of the claim, plaintiffs must make a prima facie showing that defendant has in fact committed the tort alleged in the complaint. Block Industries, 495 F.2d at 259.

Institutional Food Marketing Associates, Ltd. v. Golden State Strawberries, Inc., 587 F.Supp. 1105, 1111 (E.D.Mo.1983), aff’d, 747 F.2d 448 (8th Cir.1984). In affirming this Court’s decision, the Eighth Circuit explained that “[t]he establishment of a prima facie case requires more than the allegation that the defendant” committed the tort. Golden State Strawberries, Inc., at 454. The plaintiff must allege facts from which it could be found that all the elements of the tort are met. Id. In Golden State Strawberries, Inc., the plaintiff alleged that defendant had tortiously interfered with a contract and the basis of long-arm jurisdiction was the commission of said tort. This Court held that the plaintiffs failed to make a prima facie showing that. the defendant tortiously interfered with the contract between the plaintiffs, because the plaintiffs failed to make a prima facie showing that the defendant lacked justification for its conduct, an indispensable element of the tort.

In the case at bar, plaintiff failed to make a prima facie showing that Transtechnology in fact tortiously interfered with the contract between plaintiff and Lloyd and that Transtechnology entered into a conspiracy with Lloyd and Armstrong to breach said contract. Plaintiff simply has not alleged any facts from which this Court could find that Transtechnology had any involvement in the dealings between Armstrong, Lloyd and plaintiff, that it intentionally caused a breach of the contract between Lloyd and plaintiff or that any conduct on the part of Transtechnology was lacking in justification. Because plaintiff failed to make a prima facie showing that the alleged tortious acts were committed by Transtechnology, there is no basis upon which this Court can assume jurisdiction over the person of Transtechnology.

Accordingly, Transtechnology’s motion to dismiss plaintiff’s complaint against it for lack of personal jurisdiction is granted and said complaint is dismissed as to defendant Transtechnology. Because this Court holds that Transtechnology was not subject to service of process under Missouri’s long-arm statute, this Court need not decide whether assertion of in personam jurisdiction over Transtechnology comports with due process.

III. LLOYD’S MOTION TO DISMISS COUNTS III AND IV

Lloyd moves to dismiss Counts III and IV of plaintiffs complaint because said counts fail to state a claim against Lloyd upon which relief can be granted. Specifically, Lloyd argues that a claim of conspiracy to induce a breach of contract cannot be asserted against a party to the agreement. Lloyd relies on language to that effect in Meyer v. Bell & Howell Co., 453 F.Supp. 801, 802 (E.D.Mo.1978). Because the claim for punitive damages against Lloyd in Count IV is dependent on the civil conspiracy claim in Count III, Lloyd argues that if Count III is dismissed, then Count IV must also be dismissed as to Lloyd.

This Court’s analysis begins with the premise that a tort action does not arise from a breach of contract, unless the basis of the tort is a duty that is “superimposed by operation of law as an incident of the relationship between the parties rather than the contract.” General Dynamics Corporation v. Selb Manufacturing Company, 481 F.2d 1204, 1216 (8th Cir.1973). See also Miller v. American Insurance Company, 439 S.W.2d 238, 241 (Mo.Ct.App. 1969); State ex rel. Cummins Missouri Diesel Sales Corporation v. Eversole, 332 S.W.2d 53, 58 (Mo.Ct.App.1960). In each of these cases, the plaintiff was attempting to make a tort out of the very conduct which constituted the breach of the contract. For example, in Miller the plaintiff essentially alleged that the defendant negligently repaired her roof in violation of the contract, and in Eversole the plaintiff alleged that the defendant negligently repaired an engine in violation of the contract.

The allegations in the case at bar, however, are that Lloyd, a party to the contract, and Armstrong, a company that was not a party to the contract, wrongfully conspired to induce Lloyd to breach its contract with plaintiff. Lloyd argues that, under Meyer, it cannot be liable in tort for a civil conspiracy to induce the breach of its contract with plaintiff. In Meyer, then Chief Judge Meredith of this District held that two parties to a contract cannot be liable for a conspiracy to induce its breach. Meyer, 453 F.Supp. at 802. In the opinion of this Court, the Meyer decision is of limited value because it failed to cite any authority for its holding. Moreover, the language that “a party to a contract cannot be liable for conspiracy to induce its breach”, is actually dicta, insofar as it relates to the tort of civil conspiracy, because it was made in the context of addressing plaintiff’s allegation that two parties to the contract were liable for tortious interference with a contractual relationship. Id. Further, because Meyer dealt with a claim against two parties to a single contract, the language of Meyer is correct with respect to both the tort of intentional interference with a contract and the tort of civil conspiracy to induce a breach of contract. In this regard, Meyer is distinguishable from the case at bar, because here a civil conspiracy is being alleged against a party to a contract and a third party who was not a party to said contract.

In the opinion of this Court, plaintiff’s cause of action in Count III against Lloyd states a claim upon which relief can be granted under well-established Missouri authority. In Rosen v. Alside, Inc., 248 S.W.2d 638 (Mo.1952), the Supreme Court of Missouri held that “[a] person who by conspiring with another or by collusive agreement with him assists him to violate his contract with a third person and to obtain the benefit of that contract for himself commits an actionable wrong.” Id. at 643 (citations omitted). In Rosen, the court summarized the legal principles underlying the tort of civil conspiracy, as follows:

A civil conspiracy is an agreement or understanding between two or" more persons to do an unlawful act, or to use unlawful means to do an act which is lawful____ Strictly speaking, there has been no distinct form of writ or action of conspiracy; but the action sounds in tort, and is of the nature of an action on the case upon the wrong done under the conspiracy alleged____ The gist of the action is not the conspiracy, but the wrong done by acts in furtherance of the conspiracy or concerted design resulting in damage to plaintiff____ A combination for the purpose of causing a breach of contract has been held to be an unlawful conspiracy.

Id. (citations omitted). In Rosen, the plaintiff had an exclusive dealership contract with the defendant supplier. The plaintiff sued both the supplier and a third party who took over the plaintiff’s exclusive dealership duties, alleging a civil conspiracy between the two to breach the plaintiff’s contract with the supplier.

Rosen continues to be good law. In Mills v. Murray, 472 S.W.2d 6 (Mo.Ct.App. 1971), an employer sued his former employee and a third party alleging that the employee and the third party were liable for a civil conspiracy to cause the employee to breach his restrictive covenant with the employer. Relying on Rosen, the Mills Court affirmed a judgment for the plaintiff employer. The following discussion from the Mills opinion is particularly instructive in the case at bar:

[A] conspiracy does not give rise to a civil action unless something is done pursuant to which, absent the conspiracy, would create a right of action against one of the defendants, if sued alone.... In the case before us plaintiffs seek to vindicate their right to the performance of the restrictive covenant provision of their employment contract with [the employee] and their right to enjoy its benefits. These are rights which courts recognize and protect. “(T)he intentional interference with the contractual relation without just cause so as to effect a breach of the contract is a wrong for which the wrong doer may be held accountable in damages.” ... And a person who conspires with another to induce an unjustified violation of his contract with a third person commits an actionable wrong.... This rule has been extended in numerous cases, by persuasive reasoning, to hold one liable for conspiracy to breach his own contract.

Id. at 13 (citations omitted). Similarly, in Smith v. Welch, 611 S.W.2d 398 (Mo.Ct. App.1981), the court upheld a civil conspiracy action by a party to a contract against the other party to the contract and a third party. In Smith, a real estate broker who had an exclusive listing contract with the defendant property owner, sued another real estate broker and the property owner alleging that they engaged in a civil conspiracy to violate the property owner’s exclusive listing contract with the plaintiff real estate broker.

Applying Rosen, Mills and Smith to the facts of this case, it is the opinion of this Court that Count III of plaintiff’s complaint does state a cause of action against Lloyd. Here, as in Mills, Lloyd is alleged to have conspired with Armstrong to induce an unjustified violation of Lloyd’s contract with plaintiff. Armstrong allegedly committed an unlawful act and Lloyd may be held jointly and severally liable for his alleged participation in Armstrong’s wrongful conduct, independent of Lloyd’s liability under the contract.

Because Count III of plaintiff’s complaint states a cause of action which amounts to an independent, willful tort, plaintiff’s claim for punitive damages in Count IV also states a valid claim and will not be dismissed. Williams v. Kansas City Public Service Company, 294 S.W.2d 36, 40 (Mo.1956).


author: TELESCA, District Judge.

text:
    Rudolph WARREN, Plaintiff, v. QUALITY CARE SERVICE CORP., Defendant.
    No. CIV-81-347T.
    United States District Court, W.D. New York.
    March 6, 1985.
    As Amended March 11, 1985.

      Emmelyn Logan-Baldwin, Rochester, N.Y., for plaintiff.
    Goldberg & Goldberg, Rockville Centre, N.Y., Saperston, Day, Lustig, Gallick, Kirschner & Gaglione, P.C., Neil A. Goldberg, Buffalo, N.Y., for defendant.
   MEMORANDUM DECISION and ORDER

TELESCA, District Judge.

Plaintiff commenced this employment discrimination suit in May of 1981, alleging that his discharge was in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000e et seq. By an Order of this Court on February 3, 1984, plaintiff was allowed to amend his complaint to include an additional cause of action for a violation of 42 U.S.C. Section 1981. Presently before the Court are cross-motions for summary judgment and attorney’s fees, as well as several other motions by plaintiff. For the reasons set forth below, defendant’s motion for summary judgment is granted, and all other motions by both parties are denied.

BACKGROUND

The plaintiff was hired by defendant in July of 1979, to begin employment on August 13, 1979. He was fired slightly more than two months later, on October 26,1979. According to plaintiff’s own affidavit, both of those decisions were made by Mary Ellen DuCharme, the Area Manager for defendant.

Shortly after his termination, plaintiff filed a claim for unemployment benefits with the New York State Department of Labor. After his initial application was denied, he received a hearing before Administrative Law Judge Rosario DiLorenzo on the issue of whether his termination was the result of his own misconduct. After a full hearing, the AU found that plaintiff was discharged “as a result of his failure to comply with the employer’s instructions relating to the payroll, falsely advising the employer that he had completed the payroll, and also for not being on a 24 hour availability basis.” Plaintiff appealed that decision to the New York State Unemployment Insurance Appeals Board, and then to the New York State Appellate Division, which both affirmed the decision of the AU.

In an order issued by this Court on February 3, 1984, I held that plaintiff is collaterally estopped from challenging in this action any of the factual determinations made in the prior state proceeding as set forth in the decision of the Administrative Law Judge. For the purposes of this action, therefore, it has already been established that defendant had a legitimate, nondiscriminatory reason for discharging plaintiff. Nevertheless, plaintiff’s claims of racial discrimination could not be ruled out at that time, because Title VII forbids an employer from using even legitimate reasons to fire an employee as a pretext for discrimination. McDonnell Douglas Corporation v. Green, 411 U.S. 792, 804, 93 S.Ct. 1817, 1825, 36 L.Ed.2d 668 (1973). I therefore denied defendant’s motion to dismiss the complaint, pending further discovery to determine whether plaintiff might be able to make such a showing.

Now that discovery is virtually completed in this case, defendant has renewed its motion for summary judgment, and plaintiff has cross-moved for summary judgment. The issue to be decided is whether plaintiff has been able to raise any genuine issue of racial discrimination, notwithstanding the established fact that defendant possessed a non-discriminatory reason for his discharge.

DISCUSSION

I.

Under the federal law governing plaintiffs two causes of action, plaintiff must prove that he was the victim of intentional discrimination. Plaintiff has the initial burden of establishing a prima facie case, by proving with a preponderance of the evidence that he was discharged “under circumstances which give rise to an inference of unlawful discrimination”. Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 253, 101 S.Ct. 1089, 1093, 67 L.Ed.2d 207 (1981). Once plaintiff passes that threshold, the burden shifts to the defendant “to articulate some legitimate, nondiscriminatory reason for the employee’s rejection”. McDonnell Douglas Corporation v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973). Of course, “the defendant need not persuade the Court that it was actually motivated by the proffered reasons”, Burdine, supra, at 254, 101 S.Ct. at 1094, for the ultimate burden of proving intentional discrimination remains at all times with the plaintiff. Cooper v. Federal Reserve Bank of Richmond, — U.S. —, 104 S.Ct. 2794, 2799, 81 L.Ed.2d 718 (1984).

Once a defendant has articulated a legitimate, nondiscriminatory reason for an employee’s discharge (as defendant certainly has in this case), plaintiff has the burden of proving “that the presumptively valid reasons for his rejection were in fact a coverup for a racially discriminatory decision”. McDonnell Douglas, supra, 411 U.S. at 805, 93 S.Ct. at 1825. Plaintiff must prove that defendant’s explanation for the decision “was a pretext or discriminatory in its application”. Id. at 807, 93 S.Ct. at 1826. In other words, “it is the plaintiffs task to demonstrate that similarly situated employees were not treated equally”. Burdine, supra, 450 U.S. at 258, 101 S.Ct. at 1096. As the Supreme Court observed in describing this burden, “[e]specially relevant to such a showing would be evidence that white employees involved in acts against [the employer] of comparable seriousness ... were nevertheless retained or rehired”. McDonnell Douglas, supra, 411 U.S. at 804, 93 S.Ct. at 1825. The question now before me is whether plaintiff has produced any such evidence in the present case.

A.

The first justification offered by defendant for plaintiff’s discharge was the fact that plaintiff failed to obey his employer’s instructions relating to the payroll and deliberately misrepresented that he had completed the payroll. Plaintiff does not dispute that such allegations, if true, would constitute a legitimate basis for his discharge. Nor has plaintiff produced any evidence that any white employees deliberately lied to defendant but were nevertheless retained.

Rather, plaintiff seeks to attack defendant’s proffered explanation indirectly, by arguing that he was guilty only of an honest mistake, not deliberate falsehood, and that the AU never found to the contrary. Plaintiff’s affidavit offers the following line of reasoning (at para. 4):

On this point, the Administrative Law Judge stated that I “... misadvised the employer when ... [I] indicated that the payroll was complete when large portions of such payroll were not then completed”. In common usage, to misadvise is to incorrectly advise; to misadvise is not the same as to advise falsely, (emphasis added).

On the basis of this argument, plaintiff has repeatedly accused defendant of “mischaracterizing” the findings of the AU, as well as the earlier decision of this Court which adopted those findings.

On the contrary, it is clear that plaintiff is the party guilty of an egregious distortion of the AU’s decision. The sentence in that decision quoted by plaintiff, in which the AU stated that Warren had “misadvised” his employer, was immediately preceded by the finding of the AU that plaintiff was discharged, inter alia, “as a result of his ... falsely advising the employer that he had completed the payroll”, (emphasis added). Moreover, to avoid any possible ambiguity about that finding, the AU went on to explicitly reject as “incredible” the plaintiff’s contention that he “forgot” one portion of the payroll at the time that he informed his employer that he had completed the entire assignment. It is obvious, therefore, that the AU found plaintiff guilty of knowing and deliberate falsehood toward his employer, and plaintiff is precluded from relitigating that finding in this action.

For this reason, there is no merit to plaintiff’s argument that he was unfairly fired for “misadvising” his employer when white employees guilty of comparable or worse errors were allowed to resign under more favorable circumstances. Even if I accept plaintiff’s allegation that incompetent white employees were allowed to resign, there is a vast qualitative difference between ordinary incompetence and deliberate dishonesty, and federal civil rights law does not preclude an employer from taking note of that difference. Cf. Otis v. Inland Container Corp., 25 F.E.P. Cases 1280 (N.D.Ill.1981) (plaintiffs act of striking his supervisor qualitatively different from the act of fighting with a fellow employee). In light of that difference, plaintiffs allegations, even if true, do not “demonstrate that similarly situated employees were not treated equally”, Burdine, supra, 450 U.S. at 258, 101 S.Ct. at 1096, because he has not identified any white employees who were treated differently after committing a comparable act of dishonesty toward their supervisors.

B.

The second reason offered by defendant for plaintiffs discharge was his failure to be available for emergency calls when required by the terms of his employment. Shortly before his discharge, plaintiff had been placed by his employer on a 24 hour availability basis for a one week period for the purpose of making unexpected nursing assignments to clients of the defendant. (Quality Care Service Corporation advertises and provides 24 hour home nursing care services.) On several occasions during that week, plaintiff admits that he instructed his answering service to hold all calls between 11:00 P.M. and 7:30 A.M. Plaintiff was fired shortly after these facts came to the attention of his supervisor.

Plaintiff does not dispute the foregoing version of the facts as found by the AU. Nor does he (or could he) deny that, at least in theory, his actions were a violation of company policy and were legitimate grounds for discharge, as the AU determined. Plaintiff argues, however, that this reason for his dismissal was discriminatorily applied because many other employees who improperly put some calls on hold were not discharged.

The short answer to plaintiff’s argument is the fact, undisputed by plaintiff, that no other employee with the responsibility for being on call ever put emergency calls on hold, or advised plaintiff to do so. AU DiLorenzo made that same point:

Finally it is noted that while claimant has admitted that he was not available for taking calls certain hours of the week when he was required to be available that he contends that such was based on conversations with another employee previously handling such matter. However the evidence establishes that such other employee at least advised the claimant such person had been available for emergency calls. There is no evidence that claimant was available even on such limited basis during substantial portions of the time involved.

Now that discovery is virtually completed in this action, plaintiff has not produced the name of any other employee who was retained or rehired after putting emergency calls on hold. By definition, “emergency” calls are especially serious, as is the failure to be available for them. There is no inconsistency, either in logic or in law, for an employer to deal more seriously with the only employee who instructed his answering service to intercept even emergency calls during the night.

Nevertheless, plaintiff argues that defendant’s reliance on this cause for his discharge was “pretextual”, since the practice of putting at least non-emergency calls on hold at night was ubiquitous among the firm’s employees. Defendant concedes that putting any calls on hold during 24 hour availability assignments was technically a violation of company policy. Therefore, plaintiff reasons, consistency would require defendant to discharge every employee guilty of any infraction of those rules, however slight. In the words of his affidavit (at para. 19):

If it was against company policy for anyone to put any call on hold during the night for any purpose whatsoever, as Mrs. DuCharme testified to in the unemployment hearing, all the employees in the Buffalo, Rochester and Syracuse offices having responsibility for on call would have had to have been terminated — just like me. They of course were not.

I disagree. No inference of irregularity or pretext can be drawn from the failure of an employer to replace his entire workforce for the sake of punishing every breach, however slight, of a single company rule. Practicality prohibits such extreme measures, and consistency does not require them; an employer is entitled to differentiate extreme cases “from others involving employees who committed less serious breaches of company policy or rules of the workplace”. Otis v. Inland Container Corp., supra, 25 F.E.P. cases at 1282. (It is also noteworthy that one of the employees who was retained after putting non-emergency calls on hold was Adele Johnson, a black woman, which further undermines plaintiffs suggestion that defendant selectively enforced its rules as a pretext for racial discrimination.)

II.

In summary, plaintiff has not produced any evidence that the reasons for his discharge were discriminatorily applied, or that any white employees who had engaged in similar conduct were not discharged. Nor has plaintiff provided any other evidence sufficient to raise a genuine question as to whether his discharge may have been racially motivated. Plaintiff relies heavily upon the allegations of his affidavit in attempting to show that, even before his discharge, Ms. DuCharme always treated him worse than other employees during his two month period of employment with defendant. Yet all of those allegations, even if accepted as true, would indicate at most simply that Ms. DuCharme and plaintiff did not get along. Plaintiff has produced no evidence that her personal dislike for him was because of his race, and all the evidence points to a contrary conclusion.

Indeed, plaintiff’s suggested inference of discriminatory intent is almost conclusively belied by the basic facts of this case which lie beyond dispute. By plaintiff’s own admission, Ms. Mary Ellen DuCharme, Area Manager for defendant, was responsible for his discharge. He does not allege that any of defendant’s other employees or supervisors ever abused him or treated him unfairly in any way. Yet, according to plaintiff’s own affidavit (para. 6), Ms. DuCharme was the same person who made the decision to hire him, only two months before she fired him. Plaintiff has carefully avoided any attempts at explaining why the woman who allegedly fired him because he was black ever hired him in the first place.

Plaintiff’s allegations of racial discrimination are also substantially undermined by the testimony of Adele Johnson, a former acquaintance of plaintiff’s who was hired by defendant at his recommendation. Plaintiff relies on an affidavit taken from Adele Johnson on September 12, 1984, in which she relates that “I saw and heard loud, harsh exchanges by Mrs. DuCharme toward Mr. Warren in connection with report deadlines. Ms. DuCharme had a dislike of Mr. Warren.” (Para. 6). As Ms. Johnson subsequently clarified in her later affidavit on September 20, 1984, however, (Pg- 2):

What I wish to emphasize here, however, is that I believe that race had nothing whatsoever to do with these exchanges or the personality conflicts between Mr. Warren and Ms. DuCharme. I am black and I always felt Ms. DuCharme to be helpful and courteous to me. Mr. Warren and Ms. DuCharme just did not seem to get along, [emphasis in original]

Although summary judgment cannot be used to resolve issues of credibility, this Court is compelled to agree with the conclusion succinctly expressed above by Adele Johnson, because plaintiff has not come forward with any evidence which would call that conclusion into question.

Summary judgment must be granted with great caution in employment discrimination cases, since questions of discriminatory intent are often impossible to resolve in advance of trial. Nevertheless, I conclude that plaintiff has offered no evidence to counter the defendant’s convincing showing that he was discharged for legitimate, non-discriminatory reasons. He has likewise failed to produce any evidence that race played any part in the hostility and mistreatment he allegedly suffered at the hands of the woman who hired him. Under these circumstances, summary judgment for the employer is appropriate. Brownlow v. General Services Employees, 35 F.E.P. Cases 568 (N.D.Ill.1984); Mack v. W.R. Grace Company, 578 F.Supp. 626, 631 (N.D.Ga.1983); Otis v. Inland Container Corp., 25 F.E.P. Cases 1280 (N.D.Ill.1981); Martinez v. Bethlehem Steel Corp., 496 F.Supp. 1002 (E.D.Pa.1979). The granting of summary judgment is not precluded by plaintiff’s conclusory opinion, however sincere, that he was the victim of racial discrimination. Gatling v. Atlantic Richfield Company, 577 F.2d 185 (2d Cir. 1978), cert. denied, 439 U.S. 861, 99 S.Ct. 181, 58 L.Ed.2d 169 (1978); Fraser v. Doubleday & Co., Inc., 587 F.Supp. 1284 (S.D.N.Y.1984).

CONCLUSION

Defendant’s motion for summary judgment on both causes of action is granted, and the complaint is dismissed. Accordingly, all of plaintiff’s cross-motions are denied. The cross-motions by both parties for attorney’s fees are also denied.

ALL OF THE ABOVE IS SO ORDERED.

      . It is now settled that liability under Section 1981 requires proof of intentional discrimination. General Building Contractors Association v. Pennsylvania, 458 U.S. 375, 102 S.Ct. 3141, 73 L.Ed.2d 835 (1982).
      Under Title VII, discriminatory purpose need not be proved when one challenges “hiring and promotion practices disqualifying substantially disproportionate numbers of blacks”. Washington v. Davis, 426 U.S. 229, 246-7, 96 S.Ct. 2040, 2050-1, 48 L.Ed.2d 597 (1976). But in Title VII cases (such as this one) where there is only one plaintiff and no allegations of a custom or practice neutral on its face, the distinction between discriminatory "purpose” and "impact” collapses, and plaintiff has "the ultimate burden of persuading the Court that [he] has been the victim of intentional discrimination”. Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 256, 101 S.Ct. 1089, 1095, 67 L.Ed.2d 207 (1981).

      . Of course, with respect to defendant’s motion for summary judgment, the burden is squarely upon defendant, as the moving party, to prove that plaintiff has failed to raise any genuine issue of material fact with regard to the required elements of plaintiffs case. Federal Rules of Civil Procedure 56(c). Once the defendant has articulated a legitimate reason for plaintiffs discharge and moves for summary judgment, therefore, it becomes defendant’s burden to prove that plaintiff has failed "to counter the employer's showing with an adequate offer of proof that the employer's reasons for discharge are in fact a pretext for discrimination”. Mack v. W.R. Grace Company, 578 F.Supp. 626, 631 (N.D.Ga.1983).

      . Although McDonnell Douglas dealt with Title VII of the Civil Rights Act, the same standards governing the allocation of burdens of proof are applicable to a Section 1981 action. Hudson v. I.B.M. Corporation, 620 F.2d 351, 354 (2d Cir.), cert. denied, 449 U.S. 1066, 101 S.Ct. 794, 66 L.Ed.2d 611 (1980). Consequently, the foregoing standards are equally applicable to both of plaintiff s causes of action, and the remainder of this decision will deal with them together.

      . Indeed, plaintiff has gone so far as to file a cross-motion for an order by this Court "precluding the defendant from stating or inferring that any issue in this case has already been decided, including, the issue of credibility of the plaintiff’. (Plaintiff's Notice of Cross-Motion, at 1-2). That motion must be denied, and not merely because defendant’s statements about the AU’s findings are completely accurate. Quite apart from the extremely dubious constitutionality of the order requested by plaintiff, cf. Nebraska Press Association v. Stuart, 427 U.S. 539, 559, 96 S.Ct. 2791, 2830, 49 L.Ed.2d 683 (1976) (”[P]rior restraints on speech and publication are the most serious and the least tolerable infringement on First Amendment rights”), it is highly questionable whether the equitable powers of this Court could extend so far as to preclude the defendant from "inferring" whatever it pleases about this or any other subject. “The remedial powers of an equity court must be adequate to the task, but they are not unlimited.” Whitcomb v. Chavis, 403 U.S. 124, 161, 91 S.Ct. 1858, 1878, 29 L.Ed.2d 363 (1971).

      . Plaintiff now attempts to argue that he inadvertently "overlooked” part of the office payroll, and was guilty merely of “forgetting" that assignment when he told his employer that the job had been completed (Plaintiff's affidavit, paras. 5, 13), even though those contentions were already considered and explicitly rejected by the Administrative Law Judge ruling on his unemployment claim.

      . Plaintiff has been inconsistent in his accounts of the circumstances surrounding his termination. On January 7, 1980, while testifying under oath before an Administrative Law Judge of the New York State Department of Labor, plaintiff stated that Mrs. DuCharme had told him "you're going to have to quit or I’m going to have to terminate you," and that she fired him only after he chose not to resign. (See Exhibit "X” of defendant’s notice of motion.) Yet in plaintiff's brief filed in connection with these motions on September 17, 1984, his attorney cites as evidence of discrimination the allegation that defendant never gave plaintiff (unlike certain white employees) the option of resigning before he was fired. The same assertion also appears in the affidavit filed by plaintiff on the same day (at paragraph 38).
      Fortunately, I need not resolve this inconsistency to decide the pending motions. For the reasons stated below, defendant would be entitled to summary judgment even if I accept plaintiff’s affidavit and disregard his sworn testimony.

      . That factor, standing alone, is highly damaging to plaintiffs case, but it is not necessarily fatal. Defendant has incorrectly argued that, given the fact that defendant had cause to discharge plaintiff, "the only way" plaintiff could prove racial discrimination would be to demonstrate that similarly situated white employees committed the same acts but were not terminated. (Defendant’s Memorandum of Law, pg. 4; affirmation of defendant’s attorney, pg. 9.) On that view, a black plaintiff could never prove discrimination if he was fired for an offense which no white employees had ever committed, no matter how compelling the other evidence of discriminatory intent might be.
      Contrary to defendant’s argument, even in the absence of evidence of discriminatory application, the plaintiff must have the opportunity to demonstrate that the proffered reason was pretextual, "either directly by persuading the court that a discriminatory reason more likely motivated the employer or indirectly by showing that the employer's proffered explanation is unworthy of credence". Burdine, supra, 450 U.S. at 256, 101 S.Ct. at 1095. In the present case, however, no such evidence has been produced. Plaintiff is collaterally estopped by the findings of the AU from arguing that the defendant’s explanation is "unworthy of credence". The only question remaining, therefore, is whether plaintiff has come forward with any evidence that a discriminatory reason more likely motivated the defendant. For the reasons set forth below, I conclude that he has not.

      . In opposition to defendant's motion for summary judgment, and in support of his own cross-motion for summary judgment, plaintiff has argued that the testimony presented to the New York State Unemployment AU is inadmissible hearsay in the present action. Accordingly, plaintiff has requested an order "precluding the defendant from using as evidence any portion of the transcript of plaintiff's unemployment application proceedings” (plaintiff’s notice of motion, p. 1; emphasis added). As plaintiff argues in his affidavit, “[A]s I understand it, the hearsay rule does not permit [the] use ... of the testimony I and other witnesses have given relating to my claims.” (Plaintiff's affidavit, para. 2).
      With respect to the admissibility of his own prior testimony, plaintiff has clearly been misadvised. Plaintiff’s own statements are never hearsay when used against him. Federal Rules of Evidence 801(d)(2)(A).
      Plaintiff also argues at length that the unemployment hearing testimony given by Ms. DuCharme (now deceased) is inadmissible hearsay, and that defendant therefore has no defense to this lawsuit, or to plaintiffs motion for summary judgment. I need not decide that question, since plaintiff has failed to meet his burden of producing a genuine issue of fact for trial. Defendant’s motion for summary judgment relies only on the findings of fact and opinion reached by the AU, which are not excluded by the hearsay rule. Federal Rules of Evidence, 803(8)(C).