author: EDWARD C. REED, Jr., District Judge.

text:
    Paul J. WOLBER, Plaintiff, v. SERVICE CORPORATION INTERNATIONAL, a Texas corporation, dba Ross, Burke & Knobel Mortuary; Douglas B. Miller, an individual, Defendants.
    No. CV-R-85-44-ECR.
    United States District Court, D. Nevada.
    June 25, 1985.

      John N. Schroeder, Reno, Nev., for plaintiff.
    Lionel Sawyer & Collins, Reno, Nev., for defendants.
   MEMORANDUM DECISION AND ORDER

EDWARD C. REED, Jr., District Judge.

The defendants have moved to dismiss the complaint for failure to state a claim upon which relief can be granted (Fed.R. Civ.P. 12(b)(6)). They insist that the allegations of the pleading don’t set forth the prima facie elements required for an Age Discrimination in Employment Act (ADEA) claim for relief.

The particular allegations of the complaint that must be considered in deciding this motion are: The action is based on age discrimination in employment; the plaintiff was hired as an embalmer-funeral director on a part-time basis in the Spring of 1981 and changed to full-time in April 1982; in addition to specific acts of age discrimination, the corporate defendant has engaged in a pattern of discriminatory conduct in terminating older employees; defendant Miller manages a local business for the corporate defendant, he dislikes older people, and it was he who terminated the plaintiff; at the time of termination the plaintiff attempted to contact defendant Miller’s supervisor, but the latter did not return the plaintiff’s calls; and the plaintiff was fifty years of age at the time of termination.

The case of Douglas v. Anderson, 656 F.2d 528 (9th Cir.1981) is instructive in that it emphasizes the variety and flexibility of approaches that may be utilized in an ADEA action to establish that age was the likely reason for the plaintiff’s termination. For example, discrimination may be shown by either a disparate treatment or a disparate impact theory. Id. at 531. Also, the essential elements of the claim for relief may vary according to the circumstances. Id. at 531-532.

In Oxman v. WLS-TV, 595 F.Supp. 557, 562 (N.D.Ill.1984), the claim for relief under the ADEA read: “On or about January 27, 1984, Plaintiff, Jonah Oxman, was terminated by Defendant WLS-TV on the basis of his age which was 60.” The complaint was held to satisfy the notice pleading standards of Fed.R.Civ.P. 8(a)(2). Id. The allegation that Mr. Oxman had been fired on the basis of his age, sixty, tracked the language of the ADEA itself, as found in 29 TJ.S.C. § 623(a). The opinion points out that there is no exclusive list of essential elements that must be proved; it follows that elements need not be listed in the complaint. 595 F.Supp. at 563.

Appropriate standards for ruling on a motion to dismiss are listed in Kuhlmeier v. Hazelwood School Dish, 578 F.Supp. 1286, 1291 (E.D.Mo.1984): The facts alleged in the complaint must be viewed in the light most favorable to the plaintiff; the pleading need not state every element of a claim for relief with precision; a complaint is sufficient if it contains allegations from which an inference fairly may be drawn that evidence on the material points will be introduced at trial; and a complaint should not be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts which would entitle him to relief. The ADEA claim for relief in the instant action passes muster when tested by these standards.

The plaintiff’s second claim for relief is based on the Nevada Equal Employment Act. The operative section, NRS 613.-330(1), declares that it is an unlawful employment practice for an employer to discharge any person because of his age. The same reasoning would apply as to the sufficiency of the allegations as has been discussed above in connection with the ADEA.

The third claim for relief is based on breach of express and implied employment contract. The defendants point out that the plaintiff’s employment was “at-will”, and the “at-will” rule is that either employer or employee may terminate with or without reason and without legal liability therefor. However, there is a “strong public policy” exception to this rule. See Hansen v. Harrah’s, 100 Nev.Adv.Op. 8, 675 P.2d 394, 396 (1984). Here the plaintiff’s position is that his firing was motivated by his employer’s discriminatory bias against older employees. When a state’s legislature has enacted legislation that forbids certain conduct, that conduct is against public policy. Lucas v. Brown & Root, Inc., 736 F.2d 1202, 1205 (8th Cir.1984); Tameny v. Atlantic Richfield Co., 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330, 1332-2 (Cal.1980). NRS 233.010(1) specifically declares that it is the public policy of the State of Nevada to foster the right of all persons to hold employment without discrimination because of age. Further, NRS 613.330(1) makes it an unlawful employment practice for an employer to discharge any person because of his age. It seems safe to conclude that Nevada has a strong public policy against age discrimination in employment. In light of the Hansen v. Harrah’s opinion, this Court predicts that the Nevada Supreme Court, if and when it faces the question, will recognize that age discrimination fits into the public policy exception to the “at-will” employment doctrine.

The implied covenant of good faith and fair dealing is the basis of the plaintiff’s fourth claim for relief. The defendants argue that this theory is recognized in an insurance context, but not in an employment scenario. Again, the Nevada Supreme Court seems to support the position of the plaintiff herein. In Aluevich v. Harrah’s, 99 Nev. 215, 660 P.2d 986, 987 (1983) the opinion states:

The dissent correctly notes that an implied covenant of good faith and fair dealing has mainly been implied in contractual relations which involve a special element of reliance such as that found in partnership, insurance and franchise agreements. The case relied on by the dissent concerned a situation where one party has traditionally held vastly superi- or bargaining power—the termination of a salesperson’s “at will” employment contract. Fortune v. National Cash Register Co., 373 Mass. 96, 364 N.E.2d 1251, 1253 (Mass.1977).

The need to show the existence of the special element of reliance, before the implied covenant of good faith may be applied to the termination of an “at-will” contract, is emphasized again in Dalton Properties, Inc. v. Jones, 100 Nev.Adv.Op. 88, 683 P.2d 30, 31 (1984). Both Aluevich and Dalton Properties determined that the evidence had failed to prove the special element of reliance. Nevertheless, it should be noted that the above-quoted portion of the Aluevich opinion acknowledges that traditionally the employer holds vastly superior bargaining power when negotiating an “at-will” employment contract. The implied covenant has been applied elsewhere in employment contexts. See Garibaldi v. Lucky Food Stores, Inc., 726 F.2d 1367, 1374 (9th Cir.1984); Cancellier v. Federated Department Stores, 672 F.2d 1312, 1318 (9th Cir.1982). At the present stage of the instant action it cannot be said that it appears beyond doubt that the plaintiff can prove no set of facts which would entitle him to relief.

The fifth claim for relief herein sounds in the tort of intentional infliction of emotional distress. The plaintiff alleges he has suffered mental anguish and has become sick and ill. The defendants argue that the Nevada Industrial Insurance Act is the exclusive remedy available to an employee against his employer in connection with “any accident sustained arising out of and in the course of the employment” (NRS 616.370). They contend that distress due to discharge from employment is covered by the Act, thereby precluding a claim based on tort.

“ ‘Accident’ means an unexpected or unforeseen event happening suddenly and violently, with or without human fault, and producing at the time objective symptoms of an injury.” NRS 616.020. In order for an incident to qualify as an “accident,” the following elements must be present: (1) an unexpected or unforeseen event; (2) happening suddenly and violently; and (3) producing at the time objective symptoms of injury. State Indus. Ins. System v. Buckley, 100 Nev.Adv.Op. 81, 682 P.2d 1387, 1389 (1984); American Intern. Vacations v. MacBride, 99 Nev. 324, 661 P.2d 1301, 1303 (1983). The MacBride opinion gives broad interpretations of elements (1) and (2) that could encompass the situation of the plaintiff herein. However, “injury” is defined by statute as meaning “a sudden and tangible happening of a traumatic nature____” NRS 616.110(1). What happened to the plaintiff does not pertain to a wound or physical injury as seems to be required for the happening to be deemed “traumatic.” See Periss v. Nevada Industrial Commission, 55 Nev. 40, 24 P.2d 318, 319 (1933); American Intern. Vacations, v. MacBride, supra at 661 P.2d 1304. Workmen’s compensation laws aren’t designed to relieve the consequences of losing one’s job; other social legislation and recognized torts provide remedy. Kern v. Ideal Basic Industries, 101 N.M. 801, 689 P.2d 1272, 1273 (N.M.1984). In any event, the plaintiff’s allegations that his sickness and illness lie outside the purview of the Nevada Industrial Insurance Act is sufficient to avoid dismissal for failure to state a claim for relief. McGinnis v. Consol. Casinos Corp., 94 Nev. 640, 584 P.2d 702, 703 (1978). A claim will not be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts which would entitle him to relief. United States v. City of Redwood City, 640 F.2d 963, 966 (9th Cir.1981).

IT IS, THEREFORE, HEREBY ORDERED that the defendants’ motion to dismiss is DENIED.


source: Caselaw Access Project

license: Public Domain

text:
    Robert J. MOYER and Gloria G. Moyer, Plaintiffs, v. UNITED STATES of America, Defendant.
    No. CV-R-82-327-ECR.
    United States District Court, D. Nevada.
    June 25, 1985.

      Durney, Guinan & Brennan by Peter D. Burney, Reno, Nev., for plaintiffs.
    Lamond R. Mills, U.S. Atty. by Shirley Smith, Asst. U.S. Atty., Reno, Nev., for defendant.
   MEMORANDUM DECISION AND ORDER

EDWARD C. REED, Jr., District Judge.

The plaintiffs have filed a motion for an order resolving disputes and to compel defendant United States to pay the judgment entered against it, together with interest. The defendant is requiring the plaintiffs to execute release and satisfaction of judgment forms and to execute a written acknowledgment that their attorney is not collecting more than 25% of the judgment, before it will pay. Further, the United States contends that the plaintiffs are not entitled to interest because its appeal has been withdrawn and also by reason of the failure of the plaintiffs to file a transcript of the judgment with the Comptroller General.

The release forms submitted by the defendant for the plaintiffs’ signatures state: “It is understood that this settlement is a compromise of a doubtful and disputed claim____” The plaintiffs point out that their claim has been litigated to judgment, so that the quoted portion is inappropriate. In response, the United States merely notes that other claims that may arise in the future out of the “facts and circumstances surrounding the events that gave rise to the litigation” may constitute a doubtful and disputed claim.

The doctrine of res judicata protects the defendant from future claims by the plaintiffs that might have been litigated in this lawsuit. If the litigation had ended with a compromise settlement, the defendant could have insisted on executed releases as partial consideration for payment. That was not the case here, however. The plaintiffs have obtained an enforceable judgment the hard way, so that they need not sign releases.

The United States also has demanded that the plaintiffs sign satisfaction of judgment forms as part of the payment transaction. The plaintiffs indicate no objection to signing satisfaction forms, but think that the costs awarded to them should be mentioned in the documents. Since the costs awarded are part of the judgment, the plaintiffs are technically correct. Therefore they are entitled to have the satisfaction of judgment forms amended to reflect that costs were included in the judgment being satisfied.

The plaintiffs’ attorney has represented, via affidavit, that he is aware of the 25% limit on attorney fees imposed by 28 U.S.C. § 2678 and will not charge or collect any fees in excess thereof. His affidavit further declares that he has invited the U.S. Attorney to contact the plaintiffs directly by telephone to confirm that their fee contract does not violate the statute. He sees no authority for the defendant’s demand that compliance be acknowledged in writing. The United States, in turn, argues that it is reasonable to require formal acknowledgment of compliance with the law as a protection to the plaintiffs.

Violation of § 2678 subjects an offending attorney to fine or imprisonment or both. The legislative history of the 1966 amendment to the statute notes that it did away with the requirement of court allowance of the amount of attorney fees, and that: “The actual amount of attorneys fees within the statutory limits, therefore, is made a matter for determination between the litigant and his attorney.” 1966 U.S.Code Cong. & Ad.News 2515, 2521. As a result, a court should not get involved in such a fee arrangement absent a showing of special reasons. Frazier v. United States, 550 F.Supp. 203, 204 (W.D.Okla.1982). No special reasons have been shown here. It necessarily follows that the U.S. Attorney may not hold up payment of a judgment when there is no indication that § 2678 is being violated. This Court need not decide the question whether payment could be delayed if there were circumstances suggesting breach of the statute.

The plaintiffs contend that they are entitled to interest on their judgment from the date of its entry. They point out that 28 U.S.C. § 1961 provides for allowance of interest on any money judgment in a civil case. The defendant urges, among other things, that 31 U.S.C. § 1304(b)(1)(A) precludes interest unless a transcript of the judgment has been filed with the Comptroller General. It is acknowledged by the plaintiffs that it was their responsibility to file a transcript and that they have not done so. However, they feel that a letter sent by their attorney to the Assistant U.S. Attorney representing the Government should be deemed to satisfy the transcript of judgment filing requirement. The letter indicated a belief that the Assistant U.S. Attorney would make the General Accounting Office aware that interest is to be computed daily under § 1961.

§ 1304(b)(1)(A) reads, in pertinent part: “Interest may be paid ... on a judgment of a district court ... only from the date of filing of the transcript of the judgment with the Comptroller General____” A statute providing for interest on a judgment against the United States constitutes a waiver of sovereign immunity and must be strictly construed in a manner favorable to the Government. Hammond Co. v. United States, 568 F.Supp. 309, 312 (S.D.Cal.1983). The requirement that a transcript be filed is not satisfied by the fact that the Comptroller General might have actual knowledge of the judgment. Reminga v. United States, 695 F.2d 1000, 1003 (6th Cir.1982). Nor will any “constructive” filing of the transcript suffice. Rooney v. United States, 694 F.2d 582, 583 (9th Cir.1982). Both Rooney and Reminga hold that failure to file the transcript precludes recovery of interest by the judgment creditor. This rule is controlling here.

IT IS, THEREFORE, HEREBY DECLARED AND ADJUDICATED that:

1. The plaintiffs need not sign any release forms to be entitled to payment of their judgment;
2. The satisfaction of judgment forms shall reflect that costs are a part of the judgment, if the plaintiffs so desire;
3. The plaintiffs and their attorney need not acknowledge in writing that their attorney fee arrangement is in compliance with 28 U.S.C. § 2678;
4. The plaintiffs are not entitled to any interest on their judgment;
5. The defendant is entitled to executed satisfaction of judgment forms; and
6. The plaintiffs are entitled to immediate payment of their judgment.

IT IS, THEREFORE, HEREBY ORDERED that the $52,039.15 heretofore deposited in a money market account, together with all interest accrued thereon, shall be released forthwith to the Clerk of Court, who shall disburse the same to the plaintiffs and their attorney upon being furnished executed satisfaction of judgment forms. Said executed forms shall be delivered by the Clerk to the Reno office of the United States Attorney.


author: MATSCH, District Judge.

text:
    Maria ESPARZA, Eudesimo Arteaga, Reyes Nunez-Ortega, and Bahman Zanjani, individually and on behalf of all others similarly situated, Plaintiffs, v. Ruben VALDEZ, Executive Director, Colorado Department of Labor; John Kezer, Director, Division of Employment and training, and Industrial Commission of Colorado, (Ex-Officio the Unemployment Compensation Commission), in their official capacities, Defendants.
    Civ. A. No. 84-M-1180.
    United States District Court, D. Colorado.
    June 25, 1985.
    Order Amending Order July 5, 1985.

      Margaret Gleason, David Steinhoff, Colorado Rural Legal Services, Inc., Denver, Colo., for plaintiffs.
    Christa D. Taylor, Asst. Atty. Gen., Denver, Colo., for defendants.
    Richard K. Willard, Allen W. Hausman, Office of Immigration Litigation—Civil Division, Dept, of Justice, Washington, D.C., James W. Winchester, Asst. U.S. Atty., Denver, Colo., amicus curiae.
   MEMORANDUM OPINION AND ORDER

MATSCH, District Judge.

The plaintiffs in this civil action are citizens of countries other than the United States. They claim that the Colorado Department of Labor has illegally denied and requested repayment of unemployment insurance benefits to which they are entitled under federal law. The plaintiffs seek declaratory and injunctive relief for themselves and for others similarly situated. The plaintiffs filed a motion for class certification pursuant to F.R.Civ.P. 23(a) and (b)(2), and they moved for a preliminary injunction. The class certification question was deferred and the preliminary injunction motion was heard on December 6, 1984, at which time evidence was taken. Following the hearing, the plaintiffs moved for final determination of the issues on the basis of that hearing. The parties have filed extensive briefs, and the United States Immigration and Naturalization Service (“INS”) was granted leave to file a brief amicus curiae.

The unemployment compensation program is a cooperative federal-state effort to provide financial assistance for unemployed workers. 42 U.S.C. §§ 501-504 (1983) provides for federal funding for unemployment compensation programs with certain requirements for states to be eligible for such funding. 26 U.S.C. §§ 3301-3311 (1979 and 1984 supp.) imposes a duty on states to tax employers at prescribed rates to establish a fund for the payment of benefits to eligible workers. In 1976, Congress amended the Federal Unemployment Tax Act (“FUTA”) by adding subsection (a)(14) to 26 U.S.C. § 3304. That new subsection directed the states to include laws forbidding the payment of unemployment compensation to aliens unless the alien met certain immigration status requirements. The federal statute now reads as follows:

compensation shall not be payable on the basis of service performed by an alien unless such alien is an individual who was lawfully admitted for permanent residence at the time such services were performed, was lawfully present for purposes of performing such services or was permanently residing in the United States under color of law at the time such services were performed (including an alien who was lawfully present in the United States as a result of the application of the provisions of section 203(a)(7) or section 212(d)(5) of the Immigration and Nationality Act.)

26 U.S.C. § 3304(a)(14) (emphasis added).

The central issue in this case is the legal interpretation to be given to the underscored language which is common to both the state and federal statutes. The plaintiffs contend that the language and legislative history support the conclusion that entitlement to benefits may be earned by any aliens whose presence in the United States is known to the INS and that agency has acquiesced in the continued residence of the worker by some action or inaction. The INS, in its amicus brief, urges a very restrictive interpretation, limiting the category to aliens who have a lawful immigration status —conditional entrants, refugees and certain parolees. Essentially, coverage would be provided only to those who fall within the explanatory parenthetical in the statute. The defendants agree with the INS’ position but also recognize that “color of law” is an indefinite phrase often used to permit consideration of individual circumstances. Accordingly, the defendants make the following suggestion at page 15 of their brief:

The broadest possible construction which could be given to this phrase consistent with legislative intent and case law, would make eligible those aliens who, after review of their particular factual circumstances pursuant to a specific statutory or regulatory procedure, have been granted an immigration status which allows them to remain in the United States for an indefinite period of time.

That suggested construction is consistent with the language of the act, the legislative history, and the complexity of the policy considerations involved. The determination of what persons shall be admitted to the United States for what purposes are matters which are fundamental questions of national sovereignty, and these are peculiarly questions of federal law. The Congress has enacted a complex set of statutes on the subject and has created the INS as an agency with broad powers, both regulatory and adjudicatory. The Supreme Court has recently recognized the importance of giving due deference to the INS in alien matters. Immigration and Naturalization Service v. Rios-Pineda, — U.S. -,-, 105 S.Ct. 2098, 2103, 85 L.Ed.2d 452 (1985). What appears clear to this court is that in amending FUTA, Congress recognized the many ways in which an alien may have some status to continue indefinite residence in the United States as a result of statute, regulation or adjudicative proceedings, where that status does not fall within some classification which could be the basis for statutory reference in defining the exclusion from coverage for unemployment benefits.

The case emphasized by the plaintiffs is illustrative of the point. Holley v. Lavine, 553 F.2d 845 (2d Cir.1977), cert. denied, 435 U.S. 947, 98 S.Ct. 1532, 55 L.Ed.2d 545 (1978). There, the INS informed a Canadian citizen with six American citizen children that she would not be deported at least until her children are grown. That discretionary act by the INS gave “color of law” to her status as a resident of the United States.

Adoption of the plaintiffs’ position would seriously erode the government’s ability to deal with the problem of illegal aliens. It would permit any alien, without regard to the legality of his entry, to obtain a job, make his presence known to the INS by the filing of some application, and, in the absence of deportation, claim that his residence was “under color of law.” Congress has not indicated an intention to place such persons into the unemployment compensation benefits program.

Jurisdiction in this case depends upon the plaintiffs’ common claim to the broad construction of the statute. If color of law is given the meaning which plaintiffs urge, then all of the plaintiffs and the class they seek, to represent would come within it, and injunctive relief should be granted. The adoption of the state’s alternative suggestion gives a different result. While the plaintiffs’ claim has presented a case or a controversy requiring interpretation of federal law under 28 U.S.C. § 1331, and presents a claim for relief under 42 U.S.C. § 1983 for the denial by the state officials of benefits to which the plaintiffs claim entitlement under federal law, the court’s more limited construction of the statute requires individual consideration of the status of each applicant. That is a matter to be decided under the adjudicative processes provided by statute and regulation. Here none of the plaintiffs have alleged that they have been injured by state officials because of a violation of the federal statute as interpreted by this court, i.e. that a state administrative tribunal, after a review of the factual circumstances of each case, denied unemployment benefits during a period in which plaintiffs held an immigration status which allows them to remain in the United States indefinitely. This court under § 1983 has jurisdiction to review actions of persons operating under color of state law; it has no power to conduct a de novo review of the immigration status of the individual plaintiffs. It is the view of this court that there is no basis for an award of attorney’s fees to any party to this action.

Upon the foregoing, it is

ORDERED, that the court declares that the correct construction of the disputed phrase “was permanently residing in the United States under color of law at the time such services were performed (including an alien who was lawfully present in the United States as a result of the application of the provisions of section 203(a)(7) or section 212(d)(5) of the Immigration and Nationality Act,” is that the phrase makes eligible those aliens who, after review of their particular factual circumstances pursuant to a specific statutory or regulatory procedure, have been granted an immigration status which allows them to remain in the United States for an indefinite period of time. And it is,

FURTHER ORDERED, that plaintiffs’ motions for class certification, for leave to amend the complaint, to supplement the complaint, and to add or join party plaintiff Consuelo Sandoval are denied, and it is

FURTHER ORDERED, that determinations of eligibility are individual adjudicative decisions which must be made pursuant to the established processes which do not involve this court, and that, therefore, the individual claims for injunctive relief are denied, without prejudice to the merits of their claims, and it is

FURTHER ORDERED, that the Clerk of this court shall forthwith enter a final judgment as a declaratory judgment interpreting the subject statute, and dismissing the plaintiffs’ claims without prejudice.

ORDER AMENDING ORDER AND JUDGMENT

Pursuant to the plaintiffs’ motion of July 3, 1985, to alter or amend judgment, and it appearing that an inadvertent error was made in the order and the judgment following this court’s Memorandum Opinion and Order of June 25, 1985, it is now

ORDERED, that the order in such Memorandum Opinion and Order is amended to provide that the declaratory judgment include “or adjudicative proceedings,” and in all other respects the Motion to Alter or Amend Judgment is denied.


author: BATTISTI, Chief Judge.

text:
    Betty Jean NEMMERS, Trustee, Plaintiff, v. Richard S. TRUESDALE, Defendant.
    No. C84-2038.
    United States District Court, N.D. Ohio, E.D.
    June 25, 1985.
    William C. Hofstetler, Chardon, Ohio, for plaintiff.

      Frank Leonetti, Jr., Cleveland, Ohio, for defendant.
   ORDER

BATTISTI, Chief Judge.

On April 3, 1985, Defendant moved for a change of venue pursuant to 28 U.S.C. § 1404 from the United States District Court, Northern District of Ohio to United States District Court for the Middle District of Florida. For the reasons set forth below, Defendant’s motion is denied.

I.

On June 22, 1984, plaintiff, who was then a resident of the state of Ohio, filed a complaint seeking to collect the sum of $135,000 plus interest on a portion thereof on a promissory note. The note was executed on November 3, 1983 in Clearwater, Florida between plaintiff as trustee for Robert James Nemmers and defendant, a resident of Florida. Under the terms of the note, defendant was to pay $100,000 plus 10% interest per annum to plaintiff two years from the date of maturing. The payment date was contingent on the payment of a note dated August 21, 1980 in the amount of $500,000 from George Heaton to Richard Z. Truesdale.

Plaintiff filed her complaint in this Coiirt. Counsel stipulated on March 4, 1985 to complete all discovery by April 30, 1985.

II.

A district court may transfer a case to any other district where it might have been brought “for the convenience of parties and witnesses [and] in the interest of justice.” 28 U.S.C. § 1404(a). It is not disputed that this action could have been brought in the United States District Court for the Middle District of Florida since the contract was made therein and defendant resides there. The burden of showing the necessity of a transfer under 28 U.S.C. § 1404(a) is substantial and rests on the party seeking the transfer. Holiday Rambler Corp. v. American Motors Corp., 254 F.Supp. 137 (W.D.Mich.1966). The movant must support his allegations by proof or affidavit. Hostetler v. Baltimore & O.R. Co., 164 F.Supp. 72 (D.C.Pa.1958). The decision to transfer lies in the District Court’s sound discretion. Pennsylvania R. Co. v. Connell, 295 F.2d 32 (6th Cir.1961).

In the instant case, the Defendant, by both motion and counsel’s own affidavit, lists the following reasons for transfer: (1) the promissory note in question was executed in Clearwater, Florida; (2) at the time the note was made, defendant resided in Tampa, Florida; (3) at the time the note was signed, plaintiff resided in Seminole, Florida; (4) Florida law applies to the note; (5) all witnesses to the transaction except plaintiff currently reside in Florida; and (6) all of the physical evidence (documents) are in Tampa, Florida.

In order to transfer to another venue, the district court must find the balance of convenience strongly in favor of the moving party. Schmidt v. American Flyers Airline Corp., 260 F.Supp. 813 (S.D.N.Y.1966). The plaintiff’s choice of forum is to be given great weight. Norwood v. Kirkpatrick, 349 U.S. 29, 75 S.Ct. 544, 99 L.Ed. 789 (1955). In the instant case, plaintiff has chosen to file in the district in which she resides; there is no evidence she sought to forum-shop or to harass the defendant. The forum chosen was simply the closest to her home.

For change of venue purposes, it is irrelevant where the promissory note was made. It is also irrelevant what the choice of law is, i.e. whether Florida law governs the note, since the federal court here or in the transferee district must apply the same law. Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964). While a district court in the Central District of Florida will have more experience applying Florida law, if that is the law which governs, this Court does not regard this experience to be sufficiently significant to merit transfer. More important than where the contract was made is the place where it is to be performed. Les Schwimley Motors, Inc. v. Chrysler Motors Corp., 270 F.Supp. 418 (E.D.Cal.1967). Defendant in the instant case has merely asserted that the place of payment of the promissory note was “anticipated” to be Florida although admitting that the note itself is “silent in that regard.” Brief in Support of the Defendant’s Motion for Change of Venue at 3. Since defendant has failed to produce any evidence either within the note itself or outside it establishing Florida as the place of performance, it is permissible to conclude the note was to be paid wherever plaintiff/the payee was to be found. Hence, the Northern District of Ohio, which was plaintiff’s current residence at the time suit was brought, was as much the location of performance as Florida.

Defendant contends that all witnesses and evidence are in Florida. However, the defendant has not shown that the location of witnesses and evidence outside the Northern District of Ohio will result in witnesses not testifying and attending or severe inconvenience. It is not enough to simply state that witnesses and evidence are elsewhere without showing hardship or prejudice to either the witnesses or the moving party. Weltmann v. Fletcher, 431 F.Supp. 448 (N.D.Ohio 1976). Nor should defendant be concerned about difficulties plaintiff will have in obtaining evidence. Plaintiff has already decided to assume these “burdens” by bringing this action in the Northern District of Ohio.

Finally, this Court is unwilling to grant defendant’s motion after the date all discovery was to be completed. Although delay in making a change of venue motion is not a sufficient ground for denial, Adler v. McKee, 92 F.Supp. 613 (S.D.N.Y.1950), much of any hardship defendant may have faced has already passed since discovery is complete.

Defendant has failed to demonstrate that the balance of convenience lies in his favor. The Court is therefore unwilling to upset plaintiff’s choice of forum.

III.

Accordingly, defendant’s motion for change of venue is denied; this action is retained by the United States District Court, Northern District of Ohio.

IT IS SO ORDERED.


author: WHITMAN KNAPP, District Judge.

text:
    Russell KLEIN, et al., Plaintiffs, v. CHURCHILL COAL CORPORATION, et al., Defendants. Henry ACCARINO, et al., Plaintiffs, v. CHURCHILL COAL CORPORATION, et al., Defendants. Eli BALLAN, et al., Plaintiffs, v. CHURCHILL COAL CORPORATION, et al., Defendants. Earl ADLER, et al., Plaintiffs, v. CHURCHILL COAL CORPORATION, et al., Defendants. John BLUME, et al., Plaintiffs, v. CHURCHILL COAL CORPORATION, et al., Defendants.
    Nos. 84 Civ. 6509 (WK), 84 Civ. 7326 (WK), 84 Civ. 7327 (WK), 84 Civ. 7350 (WK), and 84 Civ. 7351 (WK).
    United States District Court, S.D. New York.
    June 26, 1985.
    As Amended July 16, 1985.

      Sheber, Pomerantz, Slotnik & Hamburg by Sol V. Slotnik, New York City, for plaintiffs.
    Newman, Tannenbaum, Helpern, Syracuse and Hirschtritt by Ralph A. Siciliano, New York City, for defendant Haber.
    Schwarzfeld, Ganfer, Shore & Rosenblum by Neil Schwarzfeld, New York City, for defendants Gordon and Churchill Coal.
   MEMORANDUM & ORDER & ORDER OF REFERENCE

WHITMAN KNAPP, District Judge.

In each of these five related complaints, plaintiffs allege, among other things, a variety of federal securities law violations. The actions are before us on several motions. Larry Haber (“Haber”), a defendant in only one of the cases (Klein v. Churchill Coal Corp., et al., 84 Civ. 6509), moves to disqualify Sheber, Pomerantz, Slotnik & Hamburg (“Sheber Pomerantz”), the law firm representing plaintiffs, on the ground that a member of that firm, Michael J. Sheber (“Sheber”), previously represented him in a matter substantially related to the Klein action. Larry Gordon (“Gordon”), a defendant in all five cases, similarly moves to disqualify plaintiffs’ counsel from participating in each of them. Plaintiffs cross-move for a protective order and sanctions.

HABER DISQUALIFICATION MOTION

Pursuant to Canon 4 of the Code of Professional Responsibility, an attorney should be disqualified if he has accepted employment adverse to the interests of a former client on a matter substantially related to the prior representation. NCK Organization, Ltd. v. Bregman (2d Cir.1976) 542 F.2d 128, 132-34; Hull v. Celanese Corp. (2d Cir.1975) 513 F.2d 568, 571; Emle Industries, Inc. v. Patentex, Inc. (2d Cir.1973) 478 F.2d 562, 570. Once the substantial relationship is established, the court need not inquire whether the attorney in fact received confidential information. Rather, where “it can reasonably be said that in the course of the former representation the attorney might have acquired information related to the subject matter of his subsequent representation, ... it is the court’s duty to order the attorney disqualified.” (Emphasis in original.) Emle Industries v. Patentex, Inc., 478 F.2d at 571, quoting T.C. Theatre Corp. v. Warner Bros. Pictures (S.D.N.Y.1953) 113 F.Supp. 265, 269.

We believe that the instant case falls within this strictly enforced rule. In March 1982 Haber retained Sheber (who was then a sole practitioner) to represent him in the Court of Claims to contest an Internal Revenue Service assessment. The Internal Revenue Service had notified Haber that, as a former officer of Churchill Coal Corporation (“Churchill Coal”), he was liable for approximately $150,000 of unpaid withholding taxes for Churchill Coal employees. As we understand it, the issue in that proceeding was whether Haber had in 1979 been a “responsible officer” of the corporation. To enable his attorney to address that issue, Haber asserts, he spoke with him at length about his role and activity as vice president of Churchill Coal.

In the instant Klein action, plaintiffs allege that from November 1978 to the present, defendants (including Haber) violated federal securities laws in connection with the offer, purchase and sale of working interests and pooling interests in mining land. A major component of plaintiffs’ allegations is that defendants made material misrepresentations and omissions in a memorandum used in connection with the purchase and sale of the working interests. In 1145 of the Klein complaint, plaintiffs allege:

The defendants [including Haber] ... willfully and deliberately, or recklessly, misrepresented, or failed to disclose:
******
(d) that some of the corporations and individuals named in the North and South Programs as having been retained to perform services for the North and South Programs were controlled by one another and/or under common control with defendant Churchill Coal and its affiliates, and the nature of the relationships among them, and the background of the individual defendants, Gordon, Haber, and Bloom and their lack of any experience in the coal industry, including the fact that defendants Gordon and Bloom were professional photographers and that defendant Haber had formerly been a bank officer at Bankers Trust Company with which Churchill Coal had a banking relationship;
(1) that defendant Churchill Coal and its affiliates and controlling persons would receive additional compensation, directly or indirectly, by virtue of their relationship to defendants Delta Energy Corp. and C & C Mining Corp. and the fees to be paid to Delta Energy Corp. and C & C Mining Corp. under the Programs;

Without going into the details of the allegations, it is obvious that it will be necessary—or at the very least helpful— for the plaintiffs, in making out a case against Haber, to establish the extent of his involvement with Churchill Coal. As that was the very issue before the Court of Claims, it inexorably follows that a reasonable probability exists that Haber relayed confidential information to Sheber which could be used against him in the instant action. See Trone v. Smith (9th Cir.1980) 621 F.2d 994, 1000 (“The relationship is measured by the allegations in the complaint and by the nature of the evidence that would be helpful in establishing those allegations”).

Ordinarily such a finding of substantial relationship and the possibility that confidential information has been conveyed would end the inquiry. However, plaintiffs assert that Haber, aware of a possible conflict of interest between himself and the present plaintiffs, deliberately concealed from Sheber facts giving rise to that conflict for the precise purpose of inducing him to undertake a representation he would otherwise decline.

The facts giving rise to that potential conflict are as follows. In February, 1982 —a month prior to his retention by Haber—Sheber had been retained by Coal Pool Management Corporation (“Coal Pool”) to represent investors in twenty different coal partnerships and programs, which partnerships and programs were offered and sold to the investors by (among others) Churchill Coal in the years 1976, 1977, and 1978. The investors were at risk because the Internal Revenue Service was seeking to disallow deductions claimed by them. Plaintiffs now assert that in March 1982, at the time Haber requested that Sheber assist him in the defense of a proposed assessment by the Internal Revenue Service relating to his activities as an officer of Churchill Coal (which action was unrelated to the Internal Revenue Service action with respect to deductions by investors of the Churchill Coal properties), Haber was fully aware that Sheber had been retained by Coal Pool to represent the investors in Churchill Coal’s shelter offerings. See Sheber Affidavit dated March 18, 1985, ¶ 6. Furthermore, Sheber asserts that at his initial meeting with Haber—pri- or to being retained—he asked Haber to outline his involvement with Churchill Coal precisely so he could make an intelligent decision as to whether a future conflict might arise. Id. at ¶ 7. Sheber contends that at this meeting and during subsequent discussions Haber deliberately misrepresented his involvement with Churchill Coal:

Unfortunately, Mr. Haber, among other things, deliberately did not disclose to me that he was an officer of C & C Mining Corporation, one of the front operating corporations of Churchill, nor did he disclose to me his other involvements with Churchill[.]

Id. at ¶7, see also Transcript of Oral Argument dated May 3, 1985, 14-29; Memorandum of Law in Opposition to Motion by Certain Defendants to Disqualify Plaintiffs’ Counsel and For Sanctions, 2-5.

Sheber asserts that by November, 1983, he began to learn of the true relationship between Haber and Churchill Coal and immediately moved to withdraw as counsel, which motion was granted in January, 1983. Sheber contends that had Haber been forthright from the outset, he would never have accepted Haber’s case because of the potential future conflict with his newly acquired major client. Haber, on the other hand, flatly denies that he misrepresented his role with Churchill Coal or that he misled Sheber in any way at all.

We think it obvious that a person may not immunize himself from suit by a lawyer by fraudulently maneuvering the lawyer into a position where he might be said to have a conflict of interest. This motion cannot be decided without resolving the factual dispute surrounding these claims. We therefore refer this case to the Honorable Michael Dolinger, United States Magistrate, to conduct hearings and recommend a finding on the issue of whether or not Haber, in inducing Sheber to accept a retainer, deliberately misled him by concealing facts which might have led him to reject employment on the ground of possible conflict of interest.

GORDON AND CHURCHILL COAL MOTION

Defendants Gordon and Churchill Coal also move for disqualification of plaintiffs’ firm. They, however, face the initial hurdle of showing that they were once represented by plaintiffs’ counsel. Defendants put forth two arguments to show this “pri- or representation:” First, that Sheber Pomerantz indirectly represented the defendants by a prior representation of an alleged affiliate of Churchill Coal, and second, that Churchill Coal itself was formerly represented by Sheber Pomerantz. We find both assertions to be without merit.

Defendants first argue that Coal Pool, a client of Sheber’s since February 1982, was an affiliate of Churchill Coal, and that representation of the alleged affiliate in a tax litigation initiated by the Internal Revenue Service in 1982 was tantamount to representation of defendants Gordon and Churchill Coal. Coal Pool was formed in 1981 to replace Delta Energy Corporation (“Delta”) as the operating manager for the various partnerships and programs at issue in this case. Although there is some evidence that Delta was an affiliate of Churchill Coal, there is no evidence that such a relationship existed between Coal Pool and Churchill Coal.

Defendants base their claim of the existence of the relationship on Gordon’s claim that, because of Sheber’s representation of Coal Pool, Gordon “regarded Mr. Sheber as my attorney.” Gordon Affidavit dated February 8, 1985, ¶11. He there states:

Because Mr. Sheber required information concerning the prior offerings of the various programs and partnerships, he sought all of Churchill Coal’s files relating to the various program’s [sic] and partnership’s [sic] properties. Since I regarded Mr. Sheber as my attorney, I caused all of my files regarding the programs and partnerships to be delivered to him without making any copies. The files have not yet been returned.

Plaintiffs, however, refute Gordon’s assertion with a detailed account of their frustrating efforts to obtain those files. See Affidavit of Michael J. Sheber dated March 18, 1985, ¶¶ 13-18. Such account—which has not been disputed—hardly comports with Gordon’s claim that he regarded Sheber as his attorney by virtue of the alleged affiliated relationship.

Defendants next argue that Sheber directly represented Churchill Coal. Their contention appears to us to be based on two theories: First, that certain mailings were made from Coal Pool to Churchill Coal and that certain confidential attorney/client documents were found in Gordon’s files, and second, that Churchill had a limited partnership interest in three of the twenty coal programs and partnerships which Sheber was retained to represent in February 1982 by Coal Pool.

As to the first, defendants have presented two envelopes addressed to Churchill Coal, sent from Coal Pool (Exhibit A to affidavit of Neal Schwarzfeld dated April 26, 1985, and Exhibit F to affidavit of Larry Gordon dated April 10,1985) and a variety of documents, some of which are claimed to have been sent in those envelopes, and some of which merely came from Gordon’s files without explanation. The envelopes clearly show that Coal Pool—not Sheber Pomerantz—sent material to Churchill Coal. The items claimed to have been contained within an envelope postmarked April 13, 1983 are not privileged and suggest no attorney/client relationship. The other envelope appears to have had some kind of ballot enclosed. Although one document found in Gordon's file comes from Sheber Pomerantz and is clearly marked as subject to the attorney/client privilege, Gordon offers no sound explanation for how he got it.

Defendants’ second theory is that Sheber Pomerantz, through its representation of the twenty partnerships and programs with respect to IRS deficiencies, directly represented Churchill Coal as it was a limited partner in three of those programs (Beaver Creek Coal Co., Butex Mining Co. and Tabor Mining Co.). We think this representation too attenuated to be characterized as direct representation of Churchill, and too attenuated even to create an appearance of impropriety.

The lack of any relationship or representation between the attorneys and defendants Gordon and Churchill Coal is buttressed by the fact that on October 27, 1983 a deposition took place in the United States Bankruptcy Court in In the Matter of Churchill Coal, a different but obviously somewhat related action; the person being deposed was Gordon, and the attorney conducting the examination, representing Coal Pool, was Sheber. Neither Gordon nor his attorneys, either at that time or subsequently, have ever suggested the need for disqualification of Sheber Pomerantz in that action.

Even if, however, we were to strain the meager evidence and find a prior representation, Gordon and Churchill Coal would still be required to show: (1) a substantial relationship between the subject matter of the prior representation and the issues in the present lawsuit, and (2) that the attorney whose disqualification is sought had access to, or was likely to have access to, relevant privileged information in the course of his prior representation of the client. Even if we assume a substantial relationship, defendants are unable to show even a possibility that confidential information could have been conveyed. At oral argument on the motion, counsel for Gordon and Churchill Coal stated on the record and in open court that absolutely no confidential information had ever been conveyed from his clients to Sheber Pomerantz. This admission, of course, comports with our understanding that the claimed representation was so attenuated that the alleged clients never spoke to their attorneys and the attorneys had no idea that they were retained by these clients.

Finally, Churchill Coal and Gordon argue for Sheber Pomerantz's disqualification on the ground that they intend to call Sheber as a fact witness. Although we think it highly improbable that Sheber will be so called, if such a problem arises, we will deal with it prior to trial.

We note in closing that our decision may create a situation in which Sheber Pomerantz would be disqualified from only one of the related actions. If this should occur we will then consider what action to take with respect to defendants’ request to consolidate.

In summary, defendant Haber’s motion to disqualify is held in abeyance pending a Report and Recommendation from Magistrate Dolinger. Defendants Gordon and Churchill Coal’s motion for disqualification is denied. And, in accordance with our rulings at oral argument, plaintiffs’ motion for a protective order is denied and Haber’s motion to dismiss pursuant to Rule 12(b)(6) is adjourned to a date to be set by the Court. All pending motions to dismiss are similarly adjourned; a briefing schedule will be set by the Court after a final determination of Haber’s motion to disqualify.

SO ORDERED.

      . In February of 1983 Haber filed a complaint against Sheber based on his withdrawal as counsel. The Departmental Disciplinary Committee of the Supreme Court, Appellate Division, First Judicial Department dismissed the complaint.

      . For no apparent reason Churchill Capital Corporation joins in the motion as well.

      . Such a showing is necessary for disqualification. See Allegaert v. Perot (2d Cir.1977) 565 F.2d 246, 251 ("[B]efore the substantial relationship test is even implicated, it must be shown that the attorney was in a position where he could have received information which his former client might reasonably have assumed the attorney would withhoid from his present client.” Emphasis in original).


author: WILLIAM C. LEE, District Judge.

text:
    Ronnie L.R. NIXON, Plaintiff, v. The INDIVIDUAL HEAD OF ST. JOSEPH MORTGAGE CO., INC., et al., Defendants.
    Civ. No. S 85-202.
    United States District Court, N.D. Indiana, Fort Wayne Division.
    June 26, 1985.

      Ronnie L.R. Nixon, pro se.
    Mark J. Phillipoff, Jones, Obenchain, Johnson, Ford, Pankow & Lewis, South Bend, Ind., Frank A. Baldwin, Deputy Atty. Gen., Indianapolis, Ind., for defendants.
   ORDER

WILLIAM C. LEE, District Judge.

This matter is before the court on the court’s own sua sponte analysis of this cause. For the following reasons, this cause will be dismissed on the court’s own motion.

Plaintiff is proceeding pro se. Pro se pleadings are to be liberally construed. Haines v. Kerner, 404 U.S. 519, 92 S.Ct. 594, 30 L.Ed.2d 652 (1972). The district court’s role is to ensure that the claims of pro se litigants are given “fair and meaningful consideration.” Matzker v. Herr, 748 F.2d 1142, 1146 (7th Cir.1984); Caruth v. Pinkney, 683 F.2d 1044, 1050 (7th Cir.1982). This court also recognizes that federal courts have historically exercised great tolerance to ensure that an impartial forum remains available to plaintiffs invoking the jurisdiction of the court without the guidance of trained counsel. Pro se motions and complaints such as the plaintiff’s are held to less stringent pleading requirements; rigor in the examination of such motions, complaints and pleadings is inappropriate.

This is an action for a declaratory judgment and a preliminary injunction based upon an alleged “land patent.” According to the amended complaint filed in this cause, plaintiff is a defendant in a mortgage foreclosure action in the LaPorte Superior Court in LaPorte County, Indiana. Plaintiff moved to dismiss that foreclosure action on the basis of a “land patent” which he drafted, executed, and recorded in the County Recorder of Deeds Office. Plaintiff filed this action to have this court declare his rights under the “land patent.”

This ease bears more than a passing resemblance to another case recently decided by this court. In Hilgeford v. Peoples Bank, Portland, Indiana, 607 F.Supp. 536 (N.D.Ind.1985), this court dismissed sua sponte a case based upon an alleged “land patent” drafted by the plaintiffs. The land patent in the Hilgeford case and the land patent in this case are identical in every aspect except for the names and property description contained in each. In Hilgeford, this court held that an action based upon a land patent drafted by a party in order to give that party rights within property is a legal nullity. The patent cannot support federal jurisdiction because it is a patently obvious attempt to create superior title in land through personal fiat. Any pro se litigant who can read or write knows that one cannot give oneself better title to land by simply saying so on a piece of paper. As this court said in Hilgeford, “the court cannot conceive of a potentially more disruptive force in the world of property law than the ability of a person to get ‘superior’ title to land by simply filling out a document granting himself a ‘land patent’ and then filing it with the Recorder of Deeds. Such self-serving, gratuitous activity does not, cannot and mil not be sufficient by itself to create good title.” 607 F.Supp. at 538. It is therefore obvious that this ease must fail because the basis of the case—the “land patent”—cannot provide an adequate legal basis upon which plaintiff can claim any interest in the mortgaged property.

Even if the purported “land patent” in this ease could somehow be considered sufficient to pass muster as a land patent under the statutes setting forth the statutory machinery for federal land patents, 43 U.S.C. § 1, et seq., the existence of this land patent would not be sufficient to create federal jurisdiction in this court. Case law clearly establishes that controversies about land do not present federal questions or federal question jurisdiction, even when one of the parties derived his title through an act of Congress. See State of Wisconsin v. Baker, 698 F.2d 1323, 1327 (7th Cir.), cert. denied, 463 U.S. 1207, 103 S.Ct. 3537, 77 L.Ed.2d 1388 (1983). As the Supreme Court itself has said:

A suit to enforce a right which takes its origin in the laws of the United States is not necessarily, or for that reason alone, one arising under those laws, for a suit does not so arise unless it really and substantially involves a dispute or controversy respecting the validity, construction, or effect of such a law, upon which the determination of the result depends. This is especially so of a suit involving rights to land acquired under a law of the United States. If it were not, every suit to establish title to land in the central and western states would so arise, as all titles in those states are traceable back to those laws.

Shulthis v. McDougal, 225 U.S. 561, 569-70, 32 S.Ct. 704, 706, 56 L.Ed. 1205 (1912). Plaintiff here attempts to argue that his patent falls under the federal laws concerning land patents issued by the United States, and that his rights arise out of the original patentee to the land, one George Pearson Buell, who received the original land patent in March, 1837. However, neither plaintiffs present land patent nor the original land patent can give rise to federal jurisdiction over this cause.

Finally, this court does not have the power to enjoin the state court mortgage foreclosure proceedings. The Anti-Injunction Act, 28 U.S.C. § 2283, prohibits the granting of injunctions to stay state court proceedings, including mortgage foreclosure actions. Ungar v. Mandell, 471 F.2d 1163 (2d Cir.1972); First National Bank & Trust Co. of Racine v. Village of Skokie, 173 F.2d 1 (7th Cir.1949).

Thus, this court is without jurisdiction to hear this cause, and lacks the power to order the injunctive relief sought. The case will therefore be dismissed for lack of jurisdiction pursuant to Fed.R.Civ.P. 12(h)(3).

In Hilgeford, this court made clear that the sanction provisions of Rule 11 of the Federal Rules of Civil Procedure apply with full force and effect to frivolous claims under a purported “land patent” such as the plaintiffs. A “land patent” suit such as this falls squarely within the parameters of the type of frivolous claims that Rule 11 is designed to deter because “it is based upon a purported land patent which indicates on its face that it is a self-serving document, drafted by the plaintiffs to grant themselves title to land, and which do not invoke any federal law or constitutional provision precisely because it is a blatant attempt by private land owners to improve title by personal fiat.” 607 F.Supp. at 539. Because such a land patent suit is a waste of precious judicial resources, this court specifically stated in Hilgeford that the Hilgeford order would stand as public notice to all future litigants that this court will issue Rule 11 sanctions for such frivolous lawsuits. Plaintiff in this cause received a copy of the Hilgeford opinion, and was specifically alerted to the possibility of Rule 11 sanctions by the court during a telephone conference held May 15, 1985. In blatant disregard of such notice, the plaintiff has persisted in this litigation despite its obvious lack of merit, including the filing of a motion for an emergency injunction and a request for oral argument. This type of activity in the face of clear warnings justifies the imposition of sanctions in this case.

The attorneys for the three named defendants have worked diligently to defend against this frivolous suit. They filed five motions. They travelled from South Bend, Indiana and Indianapolis, Indiana to attend a status conference in Fort Wayne, Indiana, a conference which the plaintiff did not attend because of the expense involved. In short, defendants’ counsel have spent a significant amount of time and money in order to defend a case which should never have been filed. The court therefore finds that an appropriate Rule 11 sanction is the award to the defendants of attorney’s fees of Two Hundred Fifty Dollars ($250.00) for each of the two attorneys involved in defending this case.

The court wishes to reiterate its warning in Hilgeford that the filing of lawsuits based upon land patents which purport to grant a land patent unto one’s self will draw immediate and severe sanctions from this court. The identical language of the “land patent” in this case and in the Hilgeford case suggest to this court that some party is responsible for the broad dissemination of the obviously false and frivolous legal concepts which have led to this suit and the suit in Hilgeford. If in fact someone has provided the plaintiff here with these spurious materials and arguments, the court notes that the plaintiff would have a solid claim for damages in the amount of the sanctions issued here for the misrepresentations which resulted in this frivolous lawsuit. The judicial waste occasioned by the continuous dissemination of these incorrect legal concepts will continue to draw the swift response of this court. The court hopes that this clear signal will discourage others from following such false prophets.

For the reasons stated above, the defendants’ motion to dismiss is hereby GRANTED, and this cause dismissed in its entirety. Plaintiff is hereby ORDERED to pay Two Hundred Fifty Dollars ($250.00) each to defendants St. Joseph Mortgage Company and Donald D. Martin for attorney’s fees incurred in this case as a sanction for filing this lawsuit.

      . Defendant Martin filed a motion to dismiss while this order was nearly completed. It plays no significant role here.


text:
    Osama ABDULRAHIM, Plaintiff, v. GENE B. GLICK COMPANY, INC., Defendant.
    Civ. No. F 84-337.
    United States District Court, N.D. Indiana, Fort Wayne Division.
    June 26, 1985.

      Ernest M. Beal, Steven L. Jackson, Parrish, Knight, Jackson & Beal, Fort Wayne, Ind., for plaintiff.
    Virginia Dill McCarty, James W. Beatty, Landman & Beatty, Indianapolis, Ind., Richard J. Thonert, Romero & Thonert, Fort Wayne, Ind., for defendant.
   ORDER

WILLIAM C. LEE, District Judge.

This matter is before the court on defendant’s (“Glick”) motion to dismiss and to strike certain paragraphs in plaintiff’s (“Abdulrahim”) complaint. In essence, Glick seeks to have these paragraphs and certain other claims dismissed for failure to state a claim upon which relief can be granted. For the following reasons, the motion to dismiss will be granted in part and denied in part.

This cause arises out of Abdulrahim’s employment with Glick during the summer of 1982, and his attempt to be reemployed by Glick during the summer of 1983. Abdulrahim sues under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2(a), and 42 U.S.C. § 1981, for alleged discrimination on the basis of his race, color, and national origin, as well as Indiana common law theories of fraud and negligent misrepresentation. Glick has moved to dismiss several claims and paragraphs in the complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure.

In deciding a motion to dismiss for failure to state a claim, this court must take the well pleaded factual allegations of plaintiff’s complaint as true. Ashbrook v. Hoffman, 617 F.2d 474 (7th Cir.1980). A complaint should be dismissed for failure to state a claim only if it appears “beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957). However, Conley has never been interpreted literally. Sutliff, Inc. v. Donovan Companies, 727 F.2d 648, 654 (7th Cir.1984). The test is whether a complaint contains either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory. Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir.1984). This court must consider the complaint in the light most favorable to the plaintiff and must resolve every reasonable doubt in favor of the claimant. Henry C. Beck Co. v. Fort Wayne Structural Steel, 701 F.2d 1221 (7th Cir.1983). “The heavy costs of modern federal litigation ... counsel against launching the parties into pretrial discovery if there is no reasonable prospect that the plaintiff can make out a cause of action from the events narrated in the complaint.” Sutliff, 727 F.2d at 654.

Taking the allegations of the complaint as true, the relevant facts of this case are as follows. Abdulrahim is a United States citizen of Syrian descent whose “skin pigmentation is such that he may be perceived as ‘non-white.’ ” In June, 1982, he began working for Glick as a maintenancegroundsperson at Glick’s Cambridge Square I apartment complex. He worked there until September 14, 1982. During the course of that employment, he was subjected to ethnic jokes and remarks by two members of Glick’s management staff.

In September, 1982, Abdulrahim applied for two open maintenance-ground staff positions with Glick, but was not hired. He then spoke with Becky Altmanshofer, an executive manager of Glick, about future employment with Glick. Ms. Altmanshofer told Abdulrahim that she would take steps to insure that he was hired the following summer.

In the summer of 1983, Abdulrahim tried repeatedly to obtain summer employment with Glick, but was not rehired despite the fact that Glick had a past record of keeping summer help on their payroll year round and rehiring those people as summer workers the following year. While Abdulrahim was not rehired, other employees were rehired, and new employees were hired as well.

On June 21, 1983, Abdulrahim filed a charge with the Fort Wayne Metropolitan Human Rights Commission alleging discrimination on the basis of national origin. A right to sue letter issued on August 31, 1984, and Abdulrahim filed this suit on November 1, 1984. The suit alleges violations of Title VII in Count One, violations of § 1981 in Count Two, and fraud and negligent misrepresentation in Count Three.

Glick’s motion to dismiss offers several grounds for dismissing particular portions of the complaint. The first seeks dismissal of the Title VII claim as it relates to the actions of Glick during Abdulrahim’s 1982 employment on the grounds that the EEOC charge filed June 21, 1983 was untimely filed with respect to those claims. The second seeks dismissal of the § 1981 claim as it relates to the events of 1982 on the grounds of untimeliness as well. The third ground argues that charges of race and color discrimination in Count One should be dismissed because they were not alleged in the EEOC charge filed in June, 1983. The fourth ground urges dismissal of any Title VII or § 1981 claims arising out of the ethnic jokes and remarks directed at Abdulrahim on the grounds that there are no allegations of Glick involvement in or knowledge of the activity. The fifth ground seeks dismissal of the national origin claim under § 1981 because national origin is not a valid basis for a § 1981 claim, while the sixth ground argues that the race claim under Count Two fails because of a failure to allege that race was actually involved in Abdulrahim’s ease. Finally, the seventh ground challenges the common law counts, arguing that fraud cannot be based on a promise to perform in the future, while negligent representation is not a common law cause of action.

The court will consider each of these arguments in turn.

Timeliness of the EEOC Charge and the 1982 Incidents

Glick has spent a large portion of its briefs arguing that the EEOC charge filed June 21, 1983 was beyond all applicable time limits for filing a Title VII claim about the discrimination occurring during Abdulrahim’s 1982 employment, thus justifying dismissal of Count One’s Title VII claim as to those 1982 events.

As Glick correctly points out, the EEOC charge was filed on June 21, 1983, approximately 280 days after his last date of employment, September 14, 1982. Indiana is a deferral state; it requires that a complaint be filed with the local civil rights commission within ninety days of a discriminatory employment practice, I.C. 22-9-1-3. Abdulrahim's filing was clearly untimely if he wished to press a Title VII claim as to the 1982 events. While Title VII allows for a filing with the EEOC up to 300 days after the discriminatory practice occurred in a deferral state, 42 U.S.C. § 2000e-5(e), the failure to file a timely charge with the local commission prevents the 300 day limitation period from applying, so that the usual 180 day limitation for non-deferral states would apply. Battle v. Clark Equipment, 524 F.Supp. 683, 686 (N.D.Ind.1981); Gunn v. Dow Chemical Co., 522 F.Supp. 1172 (S.D. Ind.1981). Thus, if Abdulrahim were asserting that the events of 1982 give rise to Title VII claims, the claims arising out of those events would be time-barred, and thus would be dismissed.

However, it is apparent that Abdulrahim does not seek to present the 1982 events as Title VII claims, but as events which are relevant background information to the May, 1983 failure to rehire, which is the substance of Abdulrahim’s Title VII claim. He admits as much in his brief in opposition, and the EEOC charge indicates this as well. Several courts, including those cited by Glick, hold that time-barred claims can be used as “relevant background” to a timely-filed claim:

A discriminatory act which is not made the basis for a timely charge is the legal equivalent of a discriminatory act which occurred before the statute was passed. It may constitute relevant background evidence in a proceeding in which the status of a current practice is at issue, but separately considered, it is merely an unfortunate event in history which has no present legal consequences.

United Airlines, Inc. v. Evans, 431 U.S. 553, 558, 97 S.Ct. 1885, 1889, 52 L.Ed.2d 571 (1977) (emphasis supplied). See Valentino v. United States Postal Service, 674 F.2d 56, 66 n. 11 (D.C.Cir.1982) (“employment practices in the time barred period may serve as relevant background evidence”); Hooker v. Tufts Univ., 581 F.Supp. 98, 101 (D.Mass.1983); James v. KID Broadcasting Corp., 559 F.Supp. 1153, 1155 (D.Idaho 1983). Some courts speak of the time-barred claims as useful in establishing a “continuing violation” of Title VII, see Hazlewood School Disk v. United States, 433 U.S. 299, 310 n. 15, 97 S.Ct. 2736, 2742 n. 15, 53 L.Ed.2d 768 (1977); Stewart v. CPC International, Inc., 679 F.2d 117, 120-21 (7th Cir.1982); Valentino; others speak of the evidence as assisting in establishing a discriminatory intent or a pattern of discrimination, see Hooker; Hunter v. Westinghouse Elec. Corp., 576 F.Supp. 704, 722 n. 16 (S.D.Ohio 1983); Cormier v. P.P.G. Industries, Inc., 519 F.Supp. 211, 216 (W.D.La.1981), aff'd, 702 F.2d 567 (5th Cir.1983).

The message of this line of cases is that time-barred incidents of discrimination are not to be erased from a case because of their tardiness. Certainly, no relief can be obtained for those acts; the paragraphs alleging the 1982 events must be dismissed as Title VII claims. However, those events may be used as background to Abdulrahim’s Title VII claim for failure to rehire; they may be probative evidence of Gliek’s intent. Thus, the court will grant the motion to dismiss those portions of the Title VII claim of Count One which pertain to the summer, 1982 events, but the court will deny the motion to strike the paragraphs setting forth the 1982 events.

Timeliness of § 1981 Claim for the 1982 Incidents

Glick argues that this action was filed November 1, 1984, more than two years after Abdulrahim’s last date of employment during summer, 1982, and therefore Abdulrahim’s § 1981 claim for the incidents during his summer employment is 1982 is time-barred.

In Movement for Opportunity and Equality v. General Motors Corp., 622 F.2d 1235 (7th Cir.1980), the Seventh Circuit applied the Indiana two year statute of limitations for personal injuries (I.C. 34-1-2-1.5) to a § 1981 action. Id. at 1241-44. Abdulrahim concedes that this two year statute applies here. Therefore, any § 1981 claims arising out of the incidents occurring during the summer of 1982 are time-barred, and therefore will be dismissed. This ruling effectively moots the issue, raised in Glide’s fourth ground for dismissal, of Glide’s involvement in or knowledge of the ethnic jokes and remarks directed at Abdulrahim.

Count One and the Scope of the EEOC Charge

Glick urges dismissal of the race and color discrimination aspects of the Title VII claim in Count One because they were not alleged in the EEOC charge that Abdulrahim filed.

It is clear that the Seventh Circuit limits a Title VII plaintiff’s civil action to discrimination “like or reasonably related to the allegations of the [EEOC] charge and growing out of such allegations.” Jenkins v. Blue Cross Mutual Hospital Ins., Inc., 538 F.2d 164, 167 (7th Cir.1976), quoting Danner v. Phillips Petroleum Co., 447 F.2d 159, 162 (5th Cir.1971). The net result of this rule is that, if a particular type of discrimination is not alleged in the EEOC charge and cannot be inferred from it, then the plaintiff may not allege that theory in his Title VII suit. See Clark v. Chrysler Corp., 673 F.2d 921, 931 (7th Cir.), cert. denied, 459 U.S. 873, 103 S.Ct. 161, 74 L.Ed.2d 134 (1982); Movement for Opportunity, 622 F.2d at 1253.

An examination of the EEOC charge reveals that Abdulrahim checked only the box for national original as the basis for the alleged discrimination against him. This, of course, is not dispositive, Jenkins, 538 F.2d at 168. However, Abdulrahim again recites national origin when he says in paragraph III of the charge: “I believe I have been discriminated against on the basis of my National Origin (Palestinian) inasmuch as____” The only references to race or color occur in paragraphs 111(A) and III(D) of the charge: “A. ... Approximately September 7, 1982, I had been promised a transfer to Respondent’s Farrington Apartments. On September 14, 1982, I learned that a white had been newly hired to fill the position”; “D. During May, 1983, Respondent hired a white employee to fill the position to which I should have been recalled.”

The court concludes that the two references to white employees are insufficient to allege race or color discrimination in the charge. In Carrillo v. Illinois Bell Tel. Co., 538 F.Supp. 793 (N.D.Ill.1982), the court reviewed a claim by a Hispanic woman in which the only possible allusion to race was her allegation that she was replaced by a “Caucasian woman.” The Carrillo court found this reference insufficient to raise a race discrimination claim, but sufficient to raise a national origin claim, “because it is the only allegation in the charge that in any way relates to Carrillo’s charge of national origin discrimination.” Id. at 798. Here, Abdulrahim’s reference to white employees serves the same function—it provides a factual basis for the claim that Glick discriminated against him because of his national origin and selected a white employee. Take away the fact that the employee hired was white, and there is nothing to indicate that Glick had a discriminatory motive—it simply hired a new employee. But when one adds the fact that the employee was white and not Palestinian, then the possibility of discriminatory intent (on the basis of national origin) appears. In short, the intent manifest in the charge is the desire to press a national origin claim, and the reference to white employees is, in this case, more correctly read as a reference to “non-Palestinians.” Therefore, the EEOC charge does not contain or infer allegations of race or color discrimination, so that those aspects of Abdulrahim’s Title VII claim in Count One must be dismissed.

Count Two National Origin Claim

Glick’s fifth ground for dismissal is that § 1981 does not recognize claims based on national origin, so that Count Two should be dismissed to the extent that it alleges discrimination on the basis of national origin.

The Seventh Circuit has held that discrimination on the basis of national origin does not support a § 1981 claim. Anooya v. Hilton Hotels Corp., 733 F.2d 48, 50 (7th Cir.1984). Thus, the national origin aspect of Count Two must be dismissed.

Abdulrahim does not contest this conclusion, but rather tries to argue that the discrimination was in fact directed towards his alienage because he was not a United States citizen at the time of the discriminatory acts. However, the fact that one is not a citizen at the time of alleged discrimination does not mean that the discrimination is done because of one’s alienage. Abdulrahim points to the allegations concerning the ethnic remarks and comments as evidence of “animus towards his alienage,” yet those incidents (which are time-barred and do not support a claim in themselves) strongly indicate that the animus was towards Abdulrahim’s nationality and not his status as an alien. The Glick management personnel who called Abdulrahim a “camel jockey” would not do so because he was an alien, but rather because he was a Syrian. The court doubts that those personnel would have avoided calling Abdulrahim ethnic names simply because he had a certificate of naturalization. There is nothing in the complaint which indicates that the alleged discrimination was premised upon or directed toward Abdulrahim’s alienage at the time of the discriminatory acts. The national origin and alienage aspects of Count Two will therefore be dismissed.

Count Two Race Discrimination Claim

Glick argues that the race discrimination aspect of Count Two should be dismissed because Abdulrahim has failed to allege that race was really involved here, and that Syrians and/or Palestinians are not a separate race which can claim racial discrimination under § 1981.

In Anooya, the Seventh Circuit specifically declined to decide whether to adopt the expansive definitions of “racial discrimination” set forth in Manzanares v. Safeway Stores, Inc., 593 F.2d 968, 971 (10th Cir.1979), and Gonzalez v. Stanford Applied Engineering, 597 F.2d 1298, 1300 (9th Cir.1979), because “plaintiff does not plead special facts that equate the evil of racial discrimination as understood by the drafters of section 1981 to the alleged national-origin animus experienced by persons of Iraqi descent.” 733 F.2d at 50 n. 5. The Anooya plaintiff apparently had referred only to his Iraqi background in making his § 1981 claim.

However, the concurring opinion of Anooya states that “[a] reference in the allegation to skin color would, of course, change the case.” 733 F.2d at 51 n. 1 (Cudahy, J., concurring). This does not conflict with the majority, as the majority itself states that “The legislative history of the statute [§ 1981] ‘clearly indicates that Congress intended to protect a limited category of rights, specifically defined in terms of racial equality’ ... One such category of rights afforded a federal remedy is discrimination in employment on the basis of race or color.” 733 F.2d at 50, 50 n. 2, quoting Georgia v. Rachel, 384 U.S. 780, 791, 86 S.Ct. 1783, 1789, 16 L.Ed.2d 925 (1966). Thus, Anooya stands for the proposition that an allegation concerning national origin alone is insufficient for § 1981 purposes, but an allegation of discrimination on the basis of skin color is enough.

The cases cited by Glick do not alter this conclusion. In Ibrahim v. N. Y. State Dept. of Health, 581 F.Supp. 228 (N.D.N.Y. 1984) and Saad v. Burns Internal Security Services, Inc., 456 F.Supp. 33 (D.D.C.1978), the Arab plaintiffs made no allegation concerning their skin color. Those courts rejected the proposition that Arab ethnic groups are a separate race. In Budinsky v. Corning Glass Works, 425 F.Supp. 786 (W.D.Pa.1977), a Slavic plaintiffs claim of racial discrimination was rejected because Slavs are not commonly subject to a “racial” identification as a “nonwhite.” The essential factor missing in all three cases is an allegation concerning skin color.

Here, Abdulrahim alleges that his skin color is such that he may be perceived as “non-white.” This provides the element missing in the previous cases involving Arabs, and invokes the Anooya concurring opinion’s analysis that an allegation referring to skin color is sufficient to make out a § 1981 case. Whether the case is one of discrimination on the basis of race, or simply one on the basis of color, is an interesting legal question that has little impact on the case because Abdulrahim has adequately alleged a § 1981 claim. Because color is so closely tied to racial identity (note that although courts interpret § 1981 as banning “racial” discrimination, the statute itself speaks in color terms: “all persons ... shall have the same rights ... as is enjoyed by white citizens”), the court believes that the motion to dismiss must fail. Even if Glick’s motion was granted, and the race discrimination aspect of Count Two was dismissed, the victory would be pyrrhic at best, as the claim based on color is clearly adequate.

State Common Law Claims

Glick seeks dismissal of the state common law claim because the basis of the claim—Becky Altmanshofer’s promise to help Abdulrahim get rehired the following summer—is a promise to do a future act. Promises to do an act in the future do not constitute fraud. Sachs v. Blewett, 206 Ind. 151, 185 N.E. 856 (1934); Rempa v. LaPorte Production Credit Union, 444 N.E.2d 308, 314 (Ind.App.1983). Abdulrahim agrees with this analysis, and so the fraud claim will be dismissed.

Nor can the fraud claim survive under a “constructive fraud” theory. Indiana courts define constructive fraud as acts from which a defendant derives an unconscionable advantage, Beecher v. City of Terre Haute, 235 Ind. 180, 132 N.E.2d 141 (1956), a breach of confidence coupled with an unjust enrichment which shocks the conscience, Voelkel v. Tohulka, 236 Ind. 588, 141 N.E.2d 344 (1957), a breach of duty which the law declares fraudulent because of a tendency to deceive, injure the public interest, or violate public or private confidence, Blaising v. Mills, 176 Ind.App. 141, 374 N.E.2d 1166 (1978), or the making of a false statement in the context of a confidential relationship, Coffey v. Wininger, 156 Ind.App. 233, 296 N.E.2d 154 (1973). None of those situations are present here. A constructive fraud theory would fail as well.

Glick argues that Abdulrahim’s negligent misrepresentation claim must fail because “Glick knows of no such separate Indiana common law claim or cause of action.”

The elements of the tort of negligent misrepresentation are set forth in Restatement (Second) of Torts, § 552(1):

One who, in the course of his business, profession, or employment, or in any other transaction in which he has a pecuniary interest, supplies false information for the guidance of others in their business transactions, is subject to liability for pecuniary loss caused to them by their justifiable reliance upon the information, if he fails to exercise reasonable care or competence in obtaining or communicating the information.

Three Indiana courts have held that Indiana does not recognize the tort of negligent misrepresentation. See Wilson v. Palmer, 452 N.E.2d 426, 429 (Ind.App.1983) (claim against title company for failure to discover demolition order in title search); Essex v. Ryan, 446 N.E.2d 368, 372 (Ind.App. 1983) (claim against surveyor for inaccurate survey); English Coal Co. v. Durcholz, 422 N.E.2d 302, 310 (Ind.App.1981) (counterclaim by mineral leaseholder against coal strip miner). However, in a case more factually analogous to this one, the court held that an employer who offered a job in Florida to an employee which was not available when the employee reported to work there could be liable for negligent misrepresentation. Eby v. York-Division, Borg-Warner, 455 N.E.2d 623, 629 (Ind.App.1983).

From the facts of this case, it is possible that Glick “supplied false information” (through its agent, Becky Altmanshofer) to Abdulrahim that steps would be taken to insure his reemployment the following summer, and that Abdulrahim relied on that information to his detriment. The Eby case convinces this court that such a tort can be a viable legal theory in cases arising out of statements made in the course of an employment relationship. Therefore, the motion to dismiss the negligent misrepresentation claim must fail.

A review of the consequences of this court’s ruling on the motion to dismiss reveals that Abdulrahim has the following-claims remaining: a Title VII claim for discrimination on the basis of national origin for the failure to rehire him in 1983; a § 1981 claim for race and color discrimination for that failure to rehire; and a negligent misrepresentation claim for the promise to take steps to ensure rehiring in 1983 allegedly made by Becky Altmanshofer.

For the above stated reasons, the court hereby GRANTS the defendants’ motion to dismiss all Title VII claims in Count One and all § 1981 claims in Count Two for any incidents of discrimination occurring during plaintiff’s 1982 summer employment; the Title VII claims of Count One for race and color discrimination in the 1983 failure to rehire; the national origin discrimination claim of Count Two; and the fraud claim of Count Three. The motion is hereby DENIED in all other respects.

      . Glick’s motion is premised on the erroneous assumption that dismissal of a claim or paragraph also justifies striking it. However, motions to strike are governed by Rulel2(f), which allows a court to strike from any pleading "any insufficient defense or any redundant, immaterial, impertinent or scandalous matter.” Rule 12(f) motions are disfavored and are ordinarily not granted unless the language in the pleading at issue has no possible relation to the controversy and is clearly prejudicial. Morrow v. South, 540 F.Supp. 1104 (S.D.Ohio 1982); Lirtzman v. Spiegal, Inc., 493 F.Supp. 1029 (N.D.Ill.1980); 5 Wright & Miller, Federal Practice and Procedure § 1380 (1969). Here, the material is potentially relevant to the timely Title VII claim, and so is not the type of matter which this court can strike. For this same reason, the court will not strike any parts of the complaint despite granting some aspects of the motion to dismiss.

        . Despite its reliance on Carrillo, the court specifically rejects Glick's interpretation oí the case. Glick has misread Carrillo to hold that an allegation by a Hispanic concerning a "Caucasian" means that the court will always view the allegation as referred to a "non-Hispanic" woman. The Carrillo court found that Hispanics may be subject to race discrimination for § 1981 purposes, 538 F.Supp. at 796, and the holding that the allegation about the Caucasian in Carillo’s charge would be treated as alleging facts about a “non-Hispanic" was only because the court could find no allegation in the charge to support the national origin claim if it were to view the reference as implicating race. Glick is wrong to suggest that any sort of universal rule is implied in that analysis.