source: Caselaw Access Project

license: Public Domain

text:
    HAPPY DACK TRADING COMPANY, LIMITED and Main Fair Trading Company, Limited, Plaintiffs, v. AGRO-INDUSTRIES, INC., Mayer Rooz and Joshua Sternhell, Defendants. AGRO-INDUSTRIES, INC., Mayer Rooz and Joshua Sternhell, Third-Party Plaintiffs, v. CHONG KING FAN, Kenneth S.K. Li and Edward Wu, Third-Party Defendants.
    No. 83 Civ. 3134 (RLC).
    United States District Court, S.D. New York.
    Dec. 12, 1984.

      Cleary, Gottlieb, Steen & Hamilton, New York City, for plaintiffs and third-party defendants; Richard F. Ziegler, Lawrence B. Friedman, New York City, of counsel.
    Mandel, Weiss, Campise, Eisenberger & Mandel, New York City, for defendants and third-party plaintiffs; Steven Norman Weiss, New York City, of counsel.
   OPINION

ROBERT L. CARTER, District Judge. nonconforming resin was delivered under the

This is a motion by plaintiffs for summary judgment in a breach of contract action, and for dismissal of defendants’ RICO counterclaim.

These are the facts, according to plaintiffs:

Between July and November, 1982, plaintiff Main Fair Trading Company, Ltd. (“Main Fair”), a Hong Kong trading company, entered into six contracts with two trading agencies of the People’s Republic of China requiring Main Fair to provide the People’s Republic with two types of low-density polyethylene resin manufactured by ARCO Polymers, Inc. (“ARCO”), specifically, 14,000 metric tons of the resin known as ARCO 2020F and 3,000 metric tons of the resin known as ARCO 1000F.

Each time Main Fair entered into a contract with the People’s Republic, plaintiff Happy Dack Trading Company, Ltd. (“Happy Dack”) another Hong Kong trading company and Main Fair’s joint venture partner, entered into a corresponding contract with defendant Agro-Industries, Inc. (“Agro”), a New York export-import company wholly owned by defendants Mayer Rooz and Joshua Sternhell, under which Agro agreed to supply Happy Dack with the resin that Main Fair would sell to the People’s Republic. Between July and November, 1982, Agro and Happy Dack entered into five agreements by telex, stating that Agro would sell Happy Dack 14,-000 metric tons of ARCO 2020F and 3,000 metric tons of ARCO 1000F for shipment to the People’s Republic. These telexes also state that payment to Agro under each agreement was to be made by drawings under an irrevocable letter of credit opened by Main Fair in Agro’s favor, confirmed by a bank in New York; that the resin would be shipped directly to the People’s Republic in five-ply paper bags with a one-ply polyethylene liner; that each shipping bag would be marked with the number of the contract between Main Fair and the People’s Republic to which the shipment related; and that for each shipment Agro would supply a certificate of quality, quantity and weight issued by ARCO.

On November 30, 1982, representatives of Happy Dack, Main Fair and Agro met in Agro’s offices in New York and executed five written contracts on Agro letterhead memorializing the agreements already reached by telex. Each contract identifies the telexes on which it is based, and the terms of the contracts parallel the terms of the telexes.

Under the first contract, Agro shipped 1,000 metric tons of resin to Shanghai and 913.544 metric tons to Dalian in late October, 1982. The next month, Agro shipped to Shanghai 2,189.82 of the 3,000 metric tons called for in the second contract. As required by the contracts, Agro delivered manufacturer’s certificates of quality, quantity and weight with each shipment. The certificates, which appear to be on ARCO letterhead, purport to be ARCO’s representation that the product shipped to the People’s Republic was ARCO 2020F, with a uniform melt index of 2.0 and a density of 0.918.

Agro was paid $1,044,527.12 for the amounts it shipped under the first contract and $1,393,271.26 for the amounts it shipped .under the second contract, upon presentation of the required documents (including the ARCO certificates) to the New York bank which had confirmed the letters of credit.

The shipments sent under the first contract arrived in Dalian on January 7, 1983, and in Shanghai two days later. On January 17, Agro sent Happy Dack a telex stating Agro would not be able to ship any more resin under the third, fourth or fifth contracts because ARCO had stopped manufacturing low-density polyethylene resin and had sent Agro a claim of force majeure under Agro’s existing contracts with ARCO.

Happy Dack replied by telex that it would hold Agro to the contracts since Agro had told Happy Dack that Agro had pre-existing commitments from ARCO for the delivery of the full amount of the resin. Happy Dack also notified Agro in this telex that it had received advance word from the People’s Republic that the resin already shipped did not conform to specifications.

The first shipments of resin had been inspected shortly after they arrived in the People’s Republic. Analysis showed that the resin varied substantially from the product specifications for ARCO 2020F. The Chinese inspectors found that the melt indices diverged widely even within small samples, the density was not as specified, the resin was discolored, the bags were improperly marked, and the shipments were damaged because of poor packaging. The People’s Republic notified Main Fair that the resin could not be used for its intended purpose and that they were rejecting it. Happy Dack notified Agro of the People’s Republic’s rejection and itself rejected the product. Agro replied by telex that Happy Dack’s claims were speculative and unfounded, and warned Happy Dack to stop “harassing [Agro] with all these lies and inuendos [sic].” To date, Agro has not shipped the balance of resin due on the second contract, or any resin under the third, fourth or fifth contracts.

After learning of the People’s Republic’s rejection of the resin, Kenneth Li, assistant manager of Main Fair, traveled to Beijing, Dalian, Shanghai and Xian to investigate the claims made by the Chinese inspectors. Li inspected the shipments and collected samples which he then submitted for analysis to a Hong Kong laboratory. Li’s findings and the laboratory report confirmed the Chinese inspectors’ findings.

Main Fair investigated the possibility of mitigating damages by taking the off-grade resin back from the People’s Republic for resale in international markets and repurchasing conforming resin for delivery to the People’s Republic. This alternative proved very costly, however, so Main Fair negotiated a settlement with the People’s Republic under which the People’s Republic agreed to keep the resin shipped and Main Fair agreed to pay the People’s Republic $895,148.49 over eight months as compensation for the nonconformities.

Plaintiffs are now suing to recover the $895,148.49 plus interest, $15,441.17 in travel and incidental expenses, and $130,-800 in lost profits on the resin not delivered under the second, third, fourth and fifth contracts.

Defendants admit that they exchanged telexes with Happy Dack between July and November, 1982 for sale of ARCO 2020F and ARCO 1000F. (Defendants’ Rule 3(g) Statement ¶ 3). They concede that the telexes state the contract terms and conditions asserted by the plaintiffs, (id.), and that on November 30, ' 1982, the parties signed five written documents which purport to be contracts. (Defendants’ Rule 3(g) Statement ¶ 4). Defendants also admit that the resin they shipped to the People’s Republic of China was not manufactured by ARCO and did not conform to the specifications included in the Agro-Happy Dack telexes or contracts. (Sternhell Deposition at 156). They admit that they forged the ARCO manufacturer’s certificates of quality, quantity and weight, (Rooz Deposition at 144-46), and that they were paid $2,437,-798.38 for the off-grade resin they shipped. (Defendants’ Rule 3(g) Statement 118).

Defendants contend, however, that their conduct was in furtherance of a prior oral agreement they had entered into with Happy Dack and Main Fair to sell the People’s Republic non-ARCO off-grade resin while telling the People’s Republic that the resin was ARCO 2020F and ARCO 1000F. Defendants assert that plaintiffs told them that off-grade resin was perfectly acceptable to the ultimate users in the People’s Republic, but that government officials in Beijing insisted on documentation indicating that only prime virgin resins were being shipped.

Defendants state that the telexes sent by Agro to Happy Dack showing that Agro had agreed to ship to the People’s Republic quantities of ARCO 2020F and ARCO 1000F were actually dictated to Agro by Happy Dack and Main Fair personnel in the course of several telephone conversations. Defendants claim that Happy Dack and Main Fair told them they wanted those telexes in their files in case the Chinese agencies ever sought to review Main Fair’s and Happy Dack’s records. Similarly, defendants state that the documents they signed on November 30, 1982, were not contracts at all, but rather an elaborate cover for the actual oral contract between Agro and Happy Dack to ship off-grade resin to the People’s Republic. Though defendants admit forging the ARCO certificates, they state that Happy Dack and Main Fair personnel suggested the forgery, supplied Agro with blank ARCO letterheads, and provided Agro with a model ARCO certificate with the names of ARCO officials to forge.

In short, defendants contend that the type of resin they shipped to the People’s Republic was precisely the type of resin actually ordered by Happy Dack and that there was no breach of contract. They argue that the motion for summary judgment should be denied since a genuine issue of fact remains as to whether the telexes and written documents constitute the true meeting of the minds between the parties.

Defendants have also filed a RICO counterclaim against plaintiffs and three of their employees, alleging that they engaged in a pattern of racketeering activity, 18 U.S.C. § 1961, using mail fraud, 18 U.S.C. § 1341, and wire fraud, 18 U.S.C. § 1343, to injure Agro and the People’s Republic.

Plaintiffs deny that there ever was a prior oral agreement to ship low-grade resin to the People’s Republic.

DISCUSSION

1. Parol Evidence

Ordinarily, where, as here, the parties dispute material facts, summary judgment is inappropriate. See Heyman v. Commerce and Industry Co., 524 F.2d 1317, 1319-20 (2d Cir.1975). However, plaintiff here argue that defendants’ version of the facts is barred by the parol evidence rule, so that plaintiffs are entitled to summary judgment as a matter of law.

The parol evidence rule is a rule of substantive law of the State of New York. Under the parol evidence rule the clear and unambiguous terms of a valid, integrated written instrument cannot be contradicted or varied by prior or contemporaneous extrinsic oral or written evidence. Barclays Bank of New York v. Goldman, 517 F.Supp. 403, 411 (S.D.N.Y.1981) (Cannella, J.).

In determining whether the parol evidence rule applies to this case the first issue to be resolved is whether the AgroHappy Dack telexes and written agreements were integrated. I find that they were. “[UJnder New York law a contract which appears complete on its face is an integrated agreement as a matter of law.” Battery S.S. Corp. v. Refinería Panama, S.A., 513 F.2d 735, 738 n. 3 (2d Cir.1975). The telexes on their face purport to express the complete agreement of the parties. They include provisions covering the nature of the product, quantity, unit price, total value, packing requirements, manufacturer, date of shipment, port of loading, method of payment, and certificate of quality, quantity and weight. The November, 1982 written contracts likewise appear complete; they track the telexes provision by provision, and each contract refers to the telex on which it is based. Even defendants have not argued that the writings do not appear to be complete.

The court also finds that the terms of the writings are clear and unambiguous. Defendants argue that two of the contracts dated November 30, 1982, are unclear in that they call for shipments to occur in August and September, 1982, respectively, before the contract date. Defendants assert that parol evidence is necessary to explain this back-dating. The August and September delivery dates do not render the contract terms unclear or ambiguous, especially in light of the fact that the contracts memorialize and refer specifically to agreements contained in telexes exchanged before the delivery dates.

Defendants’ offered defense thus falls squarely within the scope of the parol evidence rule. Defendants seek to introduce evidence of prior oral agreements to alter clear and unambiguous terms — chiefly, the terms concerning specifications and manufacturer of the resin — in integrated writings.

Defendants argue, however, that the parol evidence rule does not bar their defense. They note, quite rightly, that the rule does not keep out parol evidence offered to show that a writing which purports to be a contract is not a contract at all, but merely a sham. See, e.g., Bernstein v. Kritzer, 253 N.Y. 410, 415-16, 171 N.E. 690, 242 N.Y.S.Appdx. (1930); Arner v. Arner, 89 App.Div.2d 899, 453 N.Y.S.2d 716 (2d Dept.1982). Defendants contend that the real Agro-Happy Dack agreement was oral, and that the telexes and written contracts were merely shams. They argue that parol evidence offered to prove that should not be barred.

While New York courts have held that parol evidence is admissible to show that a contract is not a contract but a sham, “that principle is predicated on proof of the intention of the parties that the entire contract was to be a nullity, not as here that only certain provisions of the agreement were not to be enforced ... but that other provisions were to be enforcible.” Bersani v. General Accident Fire & Life Assurance Corp., 36 N.Y.2d 457, 461, 369 N.Y.S.2d 108, 112, 330 N.E.2d 68, 72 (1975). See also Kirtley v. Abrams, 299 F.2d 341, 345 (2d Cir.1962) (although parol evidence is admissible to show that “there never was any agreement such as the writing purported to be,” parol evidence is inadmissible to vary certain terms of a written agreement); Meinrath v. Singer Co., 482 F.Supp. 457, 460 (S.D.N.Y.1979) (Weinfeld, J.), Aff'd mem., 697 F.2d 293 (2d Cir.1982) (although parol evidence is admissible to prove fraud, proof must be offered to show intention of the parties that the entire contract was to be a nullity and not that certain provisions were not to be enforced).

Defendants do not contend that there was no contractual relationship at all between the parties. They concede “that contracts existed between Agro and Happy Dack requiring shipment of polyethylene resin____” (Answer at 1119). In effect, defendants seek to leave intact some terms of the writings — the general subject matter, the prices, the destinations — while -altering several other terms — the manufacturer and specifications of the resin. In fact, defendants acted on the terms of the written contracts in shipping to Dalian and Shanghai and in receiving payment through Main Fair’s letter of credit. Since defendants seek to introduce parol evidence to alter a handful of terms in the contracts and not to demonstrate that the entire contracts are nullities, defendants’ offered defense is barred as a matter of law. See Lewis v. Owens, 338 F.2d 740 (6th Cir.1964) (parol evidence inadmissible to show that wage agreements were shams where plaintiff already acted on the agreements by making wage payments).

In the absence of defendants’ offered defense, there is no dispute as to any fact material to plaintiffs’ breach of contract claim. There is no dispute that (1) contracts were formed between Happy Dack and Agro, (2) Happy Dack performed by having Main Fair establish the letter of credit in Agro’s favor, (3) Agro shipped non-conforming resin and then shipped no resin at all, and (4) Happy Dack and Main Fair were damaged as a result of Agro’s action. Consequently, plaintiffs are entitled to summary judgment as a matter of law. See, e.g., United States v. Wallace & Wallace Fuel Oil Co., 540 F.Supp. 419 (S.D.N.Y.1982) (Duffy, J.) (parol evidence barred defense in contract action, entitling plaintiff to summary judgment).

2. Damages

Plaintiffs are claiming damages {or the delivery of the nonConforming resin, for incidental expenses, and for lost profits on the contracts under which Agro shipped no resin at all.

Damages for delivery of nonconforming resin are measured by the “difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount.” N.Y.U.C.C. § 2-714(2). “The buyer’s direct damages are not limited to the measure of damages set forth in UCC § 2-714(2). Official Comment 3 makes clear that UCC § 2-714(2) describes the usual standard and a reasonable method for calculating damages in the event of a breach, but is not intended as an exclusive measure of damages. Read together, subsections (1) and (2) of § 2-714 provide that plaintiff may recover for its direct damages in any manner which is reasonable.” American Electric Power Co. v. Westinghouse Electric Corp., 418 F.Supp. 435, 454 n. 34 (S.D.N.Y.1976) (Carter, J.).

Here, plaintiffs are seeking to recover $895,148.49, the amount they paid the People’s Republic of China in compensation for retaining the nonconforming resin. Since this amount was fixed pursuant to arm’s length bargaining (Li Declaration ¶ 17), it may be considered the difference in fair market value between conforming and nonconforming resin. Moreover, relying on § 2-714(2), this court has held that under New York law when a seller delivers nonconforming goods to ultimate buyers, the intermediate buyer may claim as damages the amount it had to pay the ultimate buyers to compensate them for the delivery of the defective goods. Rite Fabrics, Inc. v. Stafford-Higgins Co., Inc., 366 F.Supp. 1 (S.D.N.Y.1973) (Levet, J.). Accordingly, plaintiffs are entitled to recover $895,-148.49, plus interest. Since the loss plaintiffs incurred in this case was pecuniary loss from having to pay People’s Republic’s compensation, interest should be computed from the date payment was made. Mount Sinai Hospital v. Borg-Warner Corp., 527 F.Supp. 922, 925-26 (S.D.N.Y.1981) (Weinfeld, J.). See also Re Estate of Kummer, 93 App.Div.2d 135, 461 N.Y.S.2d 845 (2d Dept.1983); Gelco Builders and Bur jay Construction Corp. v. Simpson Factors Corp., 60 Misc.2d 492, 301 N.Y.S.2d 728 (Sup.Ct.N.Y.Co.1969). As payment to the People’s Republic of China was made in installments, interest will be computed separately for each installment from the date it was paid. NYCPLR § 5001(b).

Pursuant to N.Y.U.C.C. § 2-715(1), which allows “expenses reasonably incurred in inspection ... of goods rightfully rejected”, plaintiffs are also entitled to the $15,441.17 in travel and testing expenses incurred by Li after the People’s Republic of China rejected the resin.

In addition, plaintiffs seek $130,800 in lost profits as a result of defendants’ failure to complete their shipments under the second contract and to make any shipments whatsoever under the third through fifth contracts. “[I]n appropriate cases of contract breach, New York law will grant lost profits in its computation of damages.” Joneil Fifth Avenue, Ltd. v. Ebeling & Reuss Co., 458 F.Supp. 1197, 1201 (S.D.N.Y.1978) (Weinfeld, J.). Where, as here, the buyer seeks to recover profits lost when the seller failed to deliver goods that the buyer had intended to resell at a profit, the buyer must show that “the seller at the time of contracting had reason to know” that buyer would lose profits, and that the lost profits “could not be reasonably prevented by cover or otherwise,” for instance, by purchasing substitute goods in the open market for resale. N.Y.U.C.C. § 2-715(2)(a), cited in Bende & Sons, Inc. v. Crown Recreation, Inc., 548 F.Supp. 1018, 1022 (E.D.N.Y.1982), aff'd mem., 722 F.2d 727 (2d Cir.1983) and in Harbor Hill Lithographing Corp. v. Dittler Brothers, Inc., 76 Misc.2d 145, 348 N.Y.S.2d 920 (Sup.Ct.Nassau Co.1973). In this case, the first requirement of § 2-715(2)(a) is satisfied: defendants admit they knew plaintiffs meant to resell the resin to the People’s Republic of China at a profit; defendants even shipped the resin directly to People’s Republic ports. Moreover, Comment 6 to § 2-715 provides: “In the case of sale of wares to one in the business of reselling them, resale is one of the requirements of which the seller has reason to know within the meaning of subsection (2)(a).” The second requirement of § 2-715(2)(a), however, is not satisfied in this case. Plaintiffs could have prevented — at least partially— the loss of profits by purchasing conforming resin in the open market and reselling it to the People’s Republic. The difference between the market price and the contract price with Agro, if any, would have been recoverable as standard contract damages. N.Y.U.C.C. § 2-713. But plaintiffs do not allege that they tried and were unable to cover by buying conforming resin for resale. Consequently, lost profits cannot be awarded.

3. RICO

Defendants’ RICO counterclaim must fail in light of the Second Circuit’s recent rulings in Sedima, S.P.R.L. v. Imrex Co., Inc., 741 F.2d 482 (2d Cir.1984) and Bankers Trust Co. v. Daniel Rhoades, 741 F.2d 511 (2d Cir.1984). In those cases, the Second Circuit held that RICO requires “that the plaintiff show injury different in kind from that occurring as a result of the predicate acts themselves, or not simply caused by the predicate acts, but also caused by an activity which RICO was designed to deter.” Sedima, supra, at 496. (The type of activity RICO was designed to deter is the use of a pattern of racketeering activity “to invest in, control, or conduct, a RICO enterprise.” Bankers Trust, supra, at 516.) In this case, defendants have alleged that they were injured not by the use of the pattern of racketeering activity in connection with a RICO enterprise, but rather by the predicate acts — the individual alleged acts of mail fraud and wire fraud that comprised the pattern of racketeering activity. Consequently, defendants have failed to state a RICO claim.

Moreover, the Second Circuit held in Sedima, supra, at 496, that a prior criminal conviction is a prerequisite to a civil RICO action. Defendants have not claimed that plaintiffs have been criminally convicted for any of the acts upon which the RICO claim is based. For this reason, too, defendants’ RICO claim must fail.

CONCLUSION

Plaintiffs’ motion for summary judgment on the breach of contract claim is granted. Plaintiffs’ claim for lost profits is denied. Defendants’ RICO counterclaim is dismissed.

IT IS SO ORDERED.

      . The principal terms of these contracts may be summarized as follows:
      Amount (in Ship Ship
      Contract No. Date Product metric tons) From To
      82XMK769328MR 7/19/82 Arco 2020F 1000 Houston Shanghai
      82XEK769329MR 7/19/82 Arco 2020F 1000 Houston Dalian
      82RX-6062K 9/6/82 Arco 2020F 3000 Houston Shanghai
      83XEK769024CK 9/25/82 Arco 2020F 3000 Houston Hsinkang
      83XEK769144MR 10/31/82 Arco 1000F 3000 U.S.ports Shanghai
      83XEK769145MR 10/31/82 Arco 2020F 6000 U.S.ports Whampoa

      . The six Main Fair-People’s Republic contracts correspond to only five Happy Dack-Agro contracts because the first Happy Dack-Agro contract refers to the first two Main Fair-People’s Republic contracts,

      . The principal terms of these contracts may be summarized as follows:
      Amount (in
      Date Product metric tons) Price Contract No.
      July 1982 Arco 2020F 2000 $1,091,720 82XMK769328MR and
      "First Contract” 82XEK769329MR
      Sept. 1982 Arco 2020F 3000 $1,899,240 82RX6062K
      "Second Contract”
      Sept. 1982 Arco 2020F 3000 $1,928,640 83XEK769024CK
      “Third Contract”
      Nov. 1982 Arco 1000F 3000 $1,960,200 83XEK769144MR
      "Fourth Contract”
      Nov. 1982 Arco 2020F 6000 $3,920,400 83XEK769145MR
      "Fifth Contract"

      . Agro said it would try to ship the balance due under the second contract.

      . The People’s Republic had intended to convert the resin into a thin film, for agricultural purposes. Because of the large variance in the melt index even within individual samples of the resin shipped by Agro, substantial portions of the resin either could not be made into film at all, or the resulting film would have holes, carbonized spots and blobs of resin that would not melt. (Li Declaration ¶ 5).

      . The parties agree that New York law applies in this case. Under Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed.2d 1477 (1941), we must apply New York’s choice-of-law rules. In contract disputes, New York courts apply the law of "that state which has the greatest interest in or most significant relationship to the transaction and the parties." Index Fund, Inc. v. Insurance Co. of North America, 580 F.2d 1158, 1162 (2d Cir.1978), cert. denied, 440 U.S. 912, 99 S.Ct. 1226, 59 L.Ed.2d 461 (1979); Intercontinental Planning, Ltd. v. Daystrom, Inc., 24 N.Y.2d 372, 382-85, 300 N.Y.S.2d 817, 825-28, 248 N.E.2d 576, 584-87 (1969). In the instant case, New York is the only jurisdiction with which both defendants and plaintiffs have had contacts. The written contracts were executed in New York. Defendants arranged for the shipment of resin to the People’s Republic in New York with New York suppliers. Moreover, New York as an international financial capital has a great interest in having its law applied to this case. J. Zeevi and Sons, Ltd. v. Grindlays Bank (Uganda) Ltd., 37 N.Y.2d 220, 227, 371 N.Y.S.2d 892, 898, 333 N.E.2d 168, 174, cert. denied, 423 U.S. 866, 96 S.Ct. 126, 46 L.Ed.2d 95 (1975).

      . There are two other possible grounds for deciding that defendants’ offered defense is not sufficient to prevent summary judgment for the plaintiffs. _____________ . ___
      First, the New York Court of Appeals has held that "when the outcome of the admission of parol evidence, to the effect that the parties to the written contract ... did not intend it to be an agreement of any force or efficacy, would be contrary to law and public policy, such proof would be inadmissible and the written contract ... would be enforced according to its terms....” Bersani, supra, 36 N.Y.2d at 460-61, 369 N.Y.S.2d 108, 330 N.E.2d 68 (citations omitted) (emphasis added). Plaintiffs in this case argue that the parol evidence is being offered to demonstrate that there existed a scheme to defraud People’s Republic. Since such a scheme would be against law and public policy of New York, they claim, the parol evidence should be barred. This court, interpreting New York case law, has recently suggested that parol evidence will be barred on grounds of public policy only in cases which “involve the deception of a public institution and the contravention of clear public policy,” and not in cases which “involve the deception of a private third party who consequently suffer[s] harm that is either negligible or uncertain.” Bank of America National Trust and Savings Association v. Gillaizeau, 593 F.Supp. 239, 244 (S.D.N.Y.1984) (Goettel, J.). Since we have already held that the parol evidence is barred as a matter of law on other grounds, we need not reach the question whether the parol evidence in this case would be barred under the Gillaizeau standard or whether the Gillaizeau standard should be respected.

        The second alternative grounds on which to award plaintiffs summary judgment is that defendants’ offered defense, even if admissible, would not be sufficient to bar summary judgment. Defendants have offered no documentary evidence, no testimony from non-party witnesses, no affidavits — nothing beyond their own conclusory allegations — to support their story. "When, as here, the movant for summary judgment introduces evidence demonstrating that his adversary’s claim is baseless, the opposing party cannot rely on mere conclusory allegations to defeat that motion. Rather, he must offer specific facts showing that there is a genuine issue for trial.” Ritz v. United States, 573 F.Supp. 234, 235 (S.D.N.Y.1983) (Carter, J.). What is more, defendants' “claim is effectively repelled by documentary evidence including [defendants’] own writings.” Meinrath v. Singer, supra, 482 F.Supp. at 460. For example, if, as defendants contend, the real agreement was to ship approximately 4,000 metric tons of resin to the People’s Republic (Defendants' Rule 3(g) Statement ¶ 6), why would defendants exchange telexes and sign contracts for the sale of 17,000 metric tons — even if these documents were meant as window dressing to protect Happy Dack and Main Fair, as defendants claim? Similarly, if both Agro and Happy Dack knew that the resin did not conform to ARCO specifications, why would Agro respond to Happy Dack’s notification of the resin’s nonconformity by accusing Happy Dack of uttering "lies and inuendos [sic]?’’ Again, since we have found defendants’ assertions inadmissible as a matter of law, we need not reach the question whether, if admitted, defendants’ allegations would be sufficient to prevent summary judgment for plaintiffs.

      . Defendants do not contend, as their January 17, 1983 telex to Happy Dack might suggest, that their non-performance should be excused because of ARCO’s claim of force majeure with respect to the resin due under the second through fifth contracts. Defendants do not argue here that ARCO really made a claim of force majeure (which might excuse non-performance, though we do not reach the question). In fact, defendants do not state they ever really had a contract with ARCO at all. Rather, defendants claim that plaintiffs dictated the force majeure message to them, and asked defendants to send that message for plaintiffs to have in their files. (Sternhell Deposition at 225-26).

      . In their Rule 3(g) Statement, defendants dispute plaintiffs’ claims regarding damages (¶¶ 10-13). Defendants, however, offer no specific facts; they merely state that they lack firsthand knowledge of plaintiffs’ dealings with the People’s Republic and therefore dispute the claims of damage. This is insufficient to defeat a motion for summary judgment. See, e.g., Ritz v. United States, supra n. 7.

      . Main Fair’s Kenneth Li does state that after first and part of the second contracts, he considered taking the nonconforming resin back from the People’s Republic for resale and repurchasing conforming resin for delivery to the People’s Republic, but rejected this idea because of "the high cost of collecting the nonconforming resin and transporting it to the People’s Republic coast, the low price of offgrade resin in international markets and the rising price of conforming resin.” (Li Declaration ¶ 16). Significantly, Li does not state that conforming resin was unavailable to substitute under the second through fifth contracts where no resin was delivered. The fact that the price of conforming resin was "rising” does not-mean that it would have been impossible to prevent or mitigate the loss of profits. Even if the market price had been greater than the Agro-Happy Dack contract price, plaintiffs could have mitigated damages, so long as market price remained less than the Main Fair-People’s Republic contract price. Without open market quotations, an award of lost profits on this motion for summary judgment would be improper.


author: NEESE, Senior District Judge,

text:
    James CLARK, et ux., Plaintiffs, v. AETNA CASUALTY AND SURETY COMPANY, Defendant.
    Civ. A. No. 3:84-0922.
    United States District Court, M.D. Tennessee, Nashville Division.
    Dec. 12, 1984.

      H. Stanley Allen, Nashville, Tenn., for plaintiffs.
    Darrell G. Townsend, Nashville, Tenn., for defendant.
   MEMORANDUM

NEESE, Senior District Judge,

Sitting by Designation and Assignment.

The defendant contends that, as a matter of law, the claim of the plaintiffs for the statutory bad-faith penalty, T.C.A. § 56-7-105, is barred because the attorney for the plaintiffs attempted on July 13, 1984 to revoke the proof-of-loss which his clients had submitted previously. The Court finds such argument unpersuasive.

In order to justify the bad-faith penalty, inter alia, there must have been a demand on the insurer for payment, and the insurer must have refused to pay the claimed loss within 60 days therefrom. Squires v. Republic Insurance Company, 572 F.2d 560, 561-562[2] (6th Cir.1978); Tyber v. Great Central Insurance Company, 572 F.2d 562, 456[1, 2] (6th Cir.1978). Here, as the defendant recognizes, the plaintiffs’ proof-of-loss constituted such a demand, and such demand was rejected unqualifiedly by the defendant on July 29, 1984, which, it is noticed, was within 60 days of its submission.

The Court is not cited to, nor has it located, any authority holding that an insured may revoke retroactively a proof-of-loss after it has been acted upon by the insurer. At the time these plaintiffs attempted to revoke their proof-of-loss, their claim had been refused by the defendant and their right to sue under the policy had accrued. If the defendant acted in bad-faith in refusing such claim, the Court fails to see how any subsequent conduct of the plaintiffs could affect their right to sue for the bad-faith penalty.


author: BRIMMER, Chief Judge.

text:
    UNITED STATES of America, Plaintiff, v. William C. PETTY, Gina L. Petty, Darrell Robinson, Adon Jaramillo, Nell Wilson, Karen Singleton and Sandra Pastor, Defendants.
    No. CR84-086-B.
    United States District Court, D. Wyoming.
    Dec. 18, 1984.
    On Motions in Limine, to Suppress Evidence and to Sever Jan. 30, 1985.

      David A. Kern, Asst. U.S. Atty., Cheyenne, Wyo., for plaintiff.
    Daniel C. Hale, Denver, Colo., and Richard Wolf, Cheyenne, Wyo., for W. Petty.
    Richard H. Honaker, Rock Springs, Wyo., for G. Petty.
    James H. Barrett and Louis E. Epps, Cheyenne, Wyo., for Robinson.
    John J. Metzke, Cheyenne, Wyo., for Jaramillo.
    Daniel G. Blythe, Cheyenne, Wyo., for Wilson.
    Kay Snider Coffman, Cheyenne, Wyo., for Singleton.
    Janet McElhaney, Cheyenne, Wyo., for Pastor.
   ORDER ON MOTIONS

BRIMMER, Chief Judge.

The above-entitled matter came before the Court pursuant to defendants’ motions to sever the trials and suppress evidence. The Court, having reviewed the pleadings and the evidence offered, and being fully advised in the premises, FINDS and ORDERS as follows:

At the evidentiary hearing held before this Court on December 17, 1984, no evidence was presented which in anyway showed that anyone tampered with the tapes involving defendant Nell Wilson. Turning off the tape when the informer was alone, and switching it back on when anyone else entered the room does not constitute selective editing or inaccurate recording.

The Court also concludes that there is no need to sever the trial because of the marital relationship between defendants William and Gina Petty. Should either of them care to testify at trial, that is their privilege as the witness spouse, and the other spouse cannot prevent the testimony. Trammel v. United States, 445 U.S. 40, 100 S.Ct. 906, 63 L.Ed.2d 186 (1980). Furthermore, where both spouses participated in a common unlawful enterprise, the privileged marital communications doctrine does not apply. See e.g. United States v. Entrekin, 624 F.2d 597 (5th Cir.1980), cert. denied, 451 U.S. 971, 101 S.Ct. 2049, 68 L.Ed.2d 350 (1981); and United States v. Van Drunen, 501 F.2d 1393 (7th Cir.1974), cert. denied 419 U.S. 1091, 95 S.Ct. 684, 42 L.Ed.2d 684 (1974). The Court also notes that when asked, counsel for neither defendant could give one concrete example as to why the marital privilege would even be in issue at trial. For these reasons, there is no reason for the United States to go to the expense of providing separate trials for William and Gina Petty.

There is also no reason to suppress the evidence discovered in the search of the Petty residence conducted by police officers under a warrant obtained sometime after entrance into the residence to secure it. No evidence surfaced in the evidentiary hearing to show that the police did anything wrong. The supervising officer, Lt. Meacham, had good cause to believe that suspects in the same crime arrested earlier, would try to get word to the Pettys that they should destroy any evidence. Due to these exigent circumstances, the officers made the decision to enter the Petty residence, and then made a cursory check for other occupants, and waited in the living room with the Pettys until the warrant arrived. Under the recent Supreme Court case, Segura v. United States, _ U.S. _, 104 S.Ct. 3380, 82 L.Ed.2d 599 (1984), such a course of action is entirely proper.

The Court concludes that the officers had probable cause to enter the residence and secure it in light of the exigent circumstances caused by the earlier arrest of other suspects. Furthermore, the later obtained search warrant, which validated a nighttime search, was adequately supported by the accompanying affidavit. Thus the subsequent search and seizure of contraband was entirely valid, even had the earlier entrance been illegal. Segura, 35 Cr.L. at 3299. Any problems with the return and inventory occurred after the fact and have no bearing on the validity of the warrant itself. Furthermore, we see no problem with using identical affidavits to support the search of two different residences. The Pettys and occupants of the Robinson residence were suspects in the same case, and the same fact situations established probable cause for the search of both residences. Finally, under Wyoming law a County Court Commissioner is empowered to issue a search warrant. W.S. § 5-5-167(a)(iii). Since the Court finds no defects in the initial entrance to secure the residence, or in the search conducted under warrant or the warrant itself, there is no reason to suppress the evidence seized. Therefore it is

ORDERED that defendant Nell Wilson’s motion to suppress and motion in limine, be and the same hereby are, denied. It is further

ORDERED that defendants William and Gina Petty’s motions to sever the trial be and the same hereby are, denied. It is further

ORDERED that defendants William and Gina Petty’s motions to suppress evidence and return property be and the same hereby are, denied.

ON MOTIONS IN LIMINE, TO SUPPRESS EVIDENCE AND TO SEVER

The above-entitled matter came before the Court pursuant to defendants’ motions, made during trial, on January 22, 1985. The Court, , having reviewed the pleadings and the evidence offered, and being fully advised in the premises, FINDS and ORDERS as follows:

The Court denied said motions orally on January 23, 1985. Although the oral record is clear, the Court feels that some supplementation is needed of a necessarily brief oral record, to explain fully the decisions of the Court.

In United States v. Petty, et al., CR84-086, over objections of counsel for defendants Wilson and Pastor, the Government attempted to enter evidence of prior statements by these defendants made to an undercover police officer. The Court recessed early to allow counsel to brief the issues, and on the morning of January 23, 1985, ruled that the statements were admissible against both defendants. The undercover police officer, Mr. Heath, testified that defendant Pastor told him that she and another woman had been “busted” when they went to Green River “to do a drug deal.” The other woman’s name was not mentioned. Mr. Heath also testified that after having been invited to defendant Wilson’s premises, she told him that she and defendant Pastor had been “busted by a cop with a wire” while making a drug deal in Green River. Defendant Pastor was present when this statement was made, and although Mr. Heath is not certain that Pastor orally agreed with the statement, he testified that she did not contradict Wilson, and further that she “patted him down”, to make sure he was not wearing a wire.

There were several objections to this testimony. First, defendants Wilson and Pastor claim that the Government failed to produce Mr. Heath’s statements in violation of the Jencks Act, 18 U.S.C. § 3500, and Rule 16(a)(1)(A) of the Federal Rules of Criminal Procedure. The Government maintained an open-file policy throughout this entire case, and defendants knew Mr. Heath would testify, and before trial had ample opportunity to interview him. The Court also recessed early to allow further opportunity to interview Mr. Heath, an opportunity of which counsel finally took advantage. Also, since no written statements or transcripts were involved, the Court ruled that there were no violations of Rule 16(a) or the Jencks Act.

Counsel also objected that since the surrounding circumstances of Mr. Heath’s testimony involved additional criminal charges against defendants Wilson and Pastor now pending in Wyoming state court, introduction of this testimony would violate Rule 609 of the Federal Rules of Evidence. Since the Court did not allow Mr. Heath to testify to surrounding circumstances, but rather contained his testimony to the statements made by the defendants, this objection was overruled.

Although not contained in their briefs, counsel for Wilson and Pastor each made a further, different objection to Mr. Heath’s testimony. Counsel for defendant Pastor objected that the statements made by defendant Wilson were hearsay as to her, and thus not admissible. However, since Pastor did not deny Wilson’s statements, and further proceeded to search Mr. Heath for a wire, the Court had no problem concluding that Pastor’s silence and further actions constituted adoptive admission, thus -rendering the statements admissible under Rule 801(d)(2)(B) of the Federal Rules of Evidence. The Court agrees with the Eighth Circuit, which stated in United States v. Lilley, 581 F.2d 182, 187 (8th Cir.1978):

It is well established that, as a general rule, when an accusatory statement is made in the defendant’s presence and hearing, and he understands it and has an opportunity to deny it, the statement and his failure to deny it are admissible against him.

See also, United States v. Sears, 663 F.2d 896 (9th Cir.1981), cert. denied, Werner v. United States, 455 U.S. 1027, 102 S.Ct. 1731, 72 L.Ed.2d 148 (1982); and United States v. Moore, 522 F.2d 1068 (9th Cir.1975), cert. denied, 423 U.S. 1049, 96 S.Ct. 775, 46 L.Ed.2d 637 (1976).

Counsel for defendant Wilson objected that the first statement, made by Pastor alone, and not in the presence of Wilson, was improperly admitted as violating Wilson’s rights under the Confrontation Clause. Counsel relied on Bruton v. United States, 391 U.S. 123, 88 S.Ct. 1620, 20 L.Ed.2d 476 (1968). The jury was admonished by the Court that statements testified to by Mr. Heath could only be used against those who made them. Furthermore, the Court did not allow Mr. Heath to mention Wilson’s name in connection with the first statement. In adopting this procedure the Court relied on Carpenter v. United States, 463 F.2d 397 (10th Cir.1972), cert. denied, 409 U.S. 985, 93 S.Ct. 337, 34 L.Ed.2d 251 (1972), which dealt with a similar situation. The Tenth Circuit held that introduction of statements made by a co-defendant did not violate defendant’s rights under Bruton because the other evidence against him was overwhelming, and

(i)n addition, and we believe importantly, Carpenter’s name was never mentioned by Morris in his admission. He was not, accordingly, subjected to a powerfully incriminating extrajudicial statement with which the defendant was confronted in Bruton. Id. at 399.

Therefore, the Court ruled that under Carpenter, Mr. Heath’s statements were admissible. The Court further admonished the jury, both orally and in written instructions, that these statements could not be considered against the other five defendants in the case. Denial of the renewed motions for severance in the face of Mr. Heath’s testimony was based on the same reasons as earlier cited by the Court. To force the Government to conduct seven separate trials would not only have taken up a vast amount of this Court’s limited time, and been prohibitively expensive, but it would have also caused great hardship in the towns of Green River and Rock Springs because many of the members of the small police departments of these towns were witnesses in this case, held over 250 miles northeast in Cheyenne. Since jury instructions and admonitions by the Court fully informed the jury as to the necessity of judging each defendant separately; and indeed the jury rendered different verdicts for the several defendants, the Court is convinced that denying severance did not prejudice the defendants.

Counsel for defendants had one final objection to Mr. Heath’s testimony based on Massiah v. United States, 377 U.S. 201, 84 S.Ct. 1199, 12 L.Ed.2d 246 (1964). Massiah and the later case of United States v. Henry, 447 U.S. 264, 100 S.Ct. 2183, 65 L.Ed.2d 115 (1980), held that the Government may not deliberately elicit evidence from a defendant without counsel present, once the right to counsel under the Sixth Amendment has attached. In denying the motion to suppress, the Court relies, inter alia, on United States v. Franklin, 704 F.2d 1183 (10th Cir.1983), cert. denied, _ U.S. _, 104 S.Ct. 146, 78 L.Ed.2d 137 (1983); and United States v. DeWolf, 696 F.2d 1 (1st Cir.1982).

In Franklin the Tenth Circuit held that although the FBI had contacted the informant, the Government did not deliberately elicit the information because the informant was a “passive listener” who did not aggressively question the defendant. Franklin at 1190. Mr. Heath testified that he was not aware that defendants had been charged with prior crimes, and that he asked no questions, but rather the information was volunteered by defendants without any prompting. Thus, he was even more of a passive listener than the Franklin informant. This is a case much like the one in United States v. DeWolf, supra, in which the First Circuit stated that “Massiah is not a magic cloak with respect to future conduct.” DeWolf, 696 F.2d at 3. While the Court recognizes that in Mealer v. Jones, 741 F.2d 1451 (2d Cir.1984), the Second Circuit reached a seemingly contradictory conclusion, we note that even in Mealer the court said that statements blurted out voluntarily, especially to a government agent who did not even know of the impending indictment, do not violate Massiah. The Court goes on to cite its earlier case of United States v. Garcia, 377 F.2d 321 (2d Cir.1967), as still being good law. In Garcia, the court stated that Massiah does not apply

in a case in which the questioner was completely unaware of the existence of the indictment and was not seeking information about the crime the indictment charged had been committed. Massiah does not immunize a defendant from normal investigation techniques after indictment. Id. at 324.

Mr. Heath was not only unaware of the prior charges, but he was investigating further crimes in good faith, and it was without any questioning or elicitation on his part, that defendants volunteered admissions as to their guilt in this case. We agree with the courts in Franklin, DeWolf, and Garcia that such conduct does not amount to “deliberate elicitation”, and thus defendants’ Sixth Amendment—Massiah rights were not violated.

Finally, in regard to defense counsels’ continuing objections to the admission of co-conspirator statements, the Court would only note that it followed precisely the guidelines set out by the Tenth Circuit in United States v. Andrews, 585 F.2d 961 (10th Cir.1978), United States v. Petersen, 611 F.2d 1313 (10th Cir.), cert. denied, 447 U.S. 905 (1980), and United States v. Monaco, 700 F.2d 577 (10th Cir.1983). Therefore, it is, and was

ORDERED that defendants Pastor and Wilson’s motions in limine and to suppress, as orally directed by the Court be, and the same hereby are, denied. It is, and was, further

ORDERED that the motions of all defendants to sever, or for mistrial based on failure to sever or on the admission of co-conspirator statements, as orally directed by the Court, be, and the same hereby are, denied.


author: ROSENBERG, District Judge.

text:
    William G. ANKROM, Plaintiff, v. The COMMONWEALTH OF PENNSYLVANIA, et al., Defendants.
    Civ. A. No. 79-336.
    United States District Court, W.D. Pennsylvania.
    Dec. 28, 1984.

      James Hecht, Pittsburgh, Pa., for plaintiff.
    Joseph L. McCann, Deputy Atty. Gen., Harrisburg, Pa., for defendants.
   OPINION

ROSENBERG, District Judge.

This action was brought by the plaintiff, William G. Ankrom, against the defendants, The Commonwealth of Pennsylvania; Richard L. Thornburg, Governor; and the Department of Community Affairs of the Commonwealth of Pennsylvania, Shirley M. Dennis, Secretary, for damages and reinstatement to employment. It is based upon Title VII of the Civil Rights Act, 42 U.S.C. § 2000e et seq.

The plaintiff had been employed in the Department of Community Affairs of the Commonwealth as a technical level employee. His duties were such as required him to travel to the various cities for the purpose of checking and ascertaining the needs of the community in regard to the program for which the defendant was responsible. He was employed on November 4, 1974. He asserts that he was dismissed by reason of the fact that his superior officer was a black man and that he was prejudiced against him, a white man, personally, and further, because it had been the policy of the Commonwealth to further the occupational positions of the black people as against the white.

The plaintiff charges that Theodore Paige, the immediate black superior, did not like him and was prejudiced against him and that he had in every way attempted to find fault with the plaintiff, and that eventually he caused his dismissal. The plaintiff also charges that the motive for Paige’s communications with the plaintiff’s wife was to get him out of Harrisburg; and that when the plaintiff was dismissed, the Commonwealth retained three black employees to fill his position.

He further charges that the Affirmative Action Committee was overdone, and that the affirmative action was in aid of the blacks and against the whites. He stated that Paige was harassing his wife by calling her by phone in Pittsburgh where she resided, in trying to get the plaintiff to move back to Pittsburgh.

The plaintiff presented a great deal of statistical evidence, none of which was persuasive in view of all the evidence and authority as a whole which were presented. Counsel for the plaintiff also exerted a great deal of effort in enumerating each of the many exhibits and presenting his own conclusions, in an effort to show accumulated prejudice by the Commonwealth and by Paige. The difficulty with the plaintiff’s attempt at persuasion is that I cannot find the same conclusions to each of the exhibits as they were presented by the plaintiff, nor can I disregard the fact that the main object of the action was not supported by the evidence itself, and on the whole, that the plaintiff a white man was discriminated by one black man and the State government officials, topped by the Governor.

After a trial to the court, and from the evidence in the case, I find that the plaintiff was in a department in which both black and white people intermixed in the performance of their functions. The immediate superior of the plaintiff was Theodore Paige, a black man. His two superiors were Michael Fried, Director and Albert Hydeman, Executive Deputy Secretary, white officials. They had ultimate powers to the point of dismissals.

I do find that the plaintiff had begun to drink to a noticeable extent but it is not indicated when he commenced to drink intoxicating liquors during the time of his employment. I find that the plaintiffs performance was justifiably criticized on two occasions; in February, 1976 when the plaintiffs disruptive and inappropriate behavior adversely affected negotiations with the United States Department of Labor; and in September, 1976 through an improper correspondence with the same department. (This criticism of the plaintiff from Fried, a white male).

The drinking problem of Ankrom became so bad that he was recommended to obtain Alcoholic Annonymous (AA) treatment by his superiors. Paige was instrumental in his being accepted for such treatment in the Gateway Rehabilitation Center in Beaver County in November, 1976. However, the plaintiff was not cured, and by his own admissions in evidence he continued to drink intoxicating liquor, after returning from the AA treatment. On one occasion he and a drinking companion had consumed a fifth of vodka over a short period of time. The obviousness of his drinking was noticeable and he was encouraged constantly to conquer the habit by Community Affairs employees, Dennis Farley and Karl Smith, but without avail.

On October 8, 1976, Ankrom failed to report for an assignment at the Greater Erie Community Action Agency in Erie, Pennsylvania, without informing his supervisors until well after the time for the appointment. At this time Paige ordered the plaintiff to take a day of leave without pay, and based on the facts in evidence, this treatment of Ankrom was not unduly harsh or prejudicial.

Despite the allegations of prejudice by Paige, the evidence reflects that Paige attempted to assign the plaintiff to conduct audits in Western Pennsylvania where Ankrom could see his wife and family more often, and with the intention of thereby decreasing the plaintiffs disposition to drink alcohol.

After reviewing all of the testimony from the numerous employees of the Department of Community Affairs, I find it highly significant that no other employee perceived Paige acting in a prejudicial manner toward Ankrom or any other white individual. Paige was a credible witness, and I believe he was sincerely attempting to help Ankrom overcome his drinking problem, and the effect that drinking was having on his job performance.

On another occasion, when he was instructed to go to Allentown for the purpose of performing his duties, he failed to do so. There is evidence that he had been drinking at the YMCA in his room with one other individual. This was ascertained by Paige and Adonis J. Flute, a white male employee of the Bureau, who went to the YMCA to see the plaintiff. When they went to his room, he was not there. They did see an empty liquor bottle in the wastebasket. They found him in the restroom and talked to him about his not being in Allentown. He made the excuse that he could not go because he did not have a State automobile. He seemed at that time to be affected by alcohol. They told him to clean himself up and come into the office. When he came into the office, he was given an opportunity to explain his failure to make the Allentown meeting and was suspended. Thereupon, the plaintiff returned to his office and immediately began tearing up certain papers for the Migrant Workers’ program. After questioning Diane Dubovsky and Eldred Lowman, staff members of the Migrant Workers’ program, Fried learned that the work papers had been torn up and after consulting with Hydeman, the plaintiff was dismissed for insubordination particularly in destroying what they concluded were important records.

The Supreme Court has set forth the procedure to be followed in this class of cases in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973):

“The complainant in a Title VII trial must carry the initial burden under the statute of establishing a prima facie case of racial discrimination. This may be done by showing (i) that he belongs to a racial minority; (ii) that he applied and was qualified for a job for which the employer was seeking applicants; (iii) that, despite his qualifications, he was rejected; and (iv) that, after his rejection, the position remained open and the employer continued to seek applicants from persons of complainant’s qualifications.”

While the plaintiff was allowed wide latitude in presenting his case and in proposing the various components for the purpose of amalgomating them, all the evidence as a whole does not support his contentions. This action was originally started as a class action; but after I originally examined all the pleadings as filed, I could not find a basis or reason enough to certify this as a class action. After trial, the evidence as a whole bears out the correctness of my finding because there was no concerted action against white persons as a class, while the plaintiff simply attempted to show but only to infer that discrimination was aimed by one black man and the Commonwealth of Pennsylvania against the plaintiff, a white man.

The evidence shows and .I so find that the white and black employees in the Department of Affairs worked amicably together, and that no one discerned any prejudice by the defendants against the plaintiff.

I am well aware of the fact that with the decisions of the United States Supreme Court that black people had early and long ago been discriminated against. Thus, there was an effort on the part of the Supreme Court (without any necessity on my part to cite these cases) to re-establish the equality of persons and workers in employment, irrespective of race, color, creed or sex.

The Supreme Court set a pendulum moving in the direction of black persons to right wrongs and to bring them into a status quo with white persons. Under these circumstances, the pendulum swung in favor of black persons. Legislators, courts, federal, district and appellate, then made findings with leanings towards correcting discrimination against black persons in order to give them equality status.

It is obvious that the Commonwealth by its Affirmative Action Plan made an effort to repair its lack of equality in past hirings. Yet there is no evidence in this case that affirmative action was prejudicial in any way to white persons. Thus, while some statistics are quoted by the plaintiff for the purpose of showing preferences for hiring black people, there are not similar statistics with regard to dismissals in the Commonwealth. The plaintiff here attempts to apply the same principles to dismissals as to hirings, only, as they may here have been enumerated in these cases.

The difficulty with this contention is that the plaintiff was not innocent of any action which could cause his dismissal and no authority is cited for this class of dismissals. I find the plaintiff was an alcoholic. He did not abate his drinking habit. He permitted it to interfere with his functions as an employee so that any dismissal which occurred, occurred directly because of the actions of the plaintiff, himself, and not because of Paige, or what Paige might have said or done.

So, too, it is uncontradicted that white supervisors, who were responsible for the plaintiff’s continuance as an employee, were the direct source of his dismissal, and it was not the prejudice of a black man, Paige. The plaintiff’s case falls on that count under the law.

Also, it must be remembered as I find from all the evidence in the case as a whole, that there was no friction or discrimination between any black and white employees in the Department, and particularly none with Paige. Thus, I am not persuaded by the plaintiff’s statements that Paige had discriminated against him. Rather I find that Paige attempted to help the plaintiff, particularly with his drinking habit, and that it was of no avail in trying to help him do so.

It is difficult to believe that any man who would submit himself to AA treatment and thereafter consume as large a quantity of liquor as he admitted doing, had conquered his drinking habit and discontinued drinking alcohol. The plaintiff has not persuaded me that he even tried to refrain from drinking. The admission therefore is evidence contributing to the reasons presented by the defendants on the whole for his dismissal by white superiors in that dismissal was caused by him, himself, and not by a black man, Paige.

The plaintiff raises another objection that he had not been given sufficient time to answer the charges for his dismissal. While civil service rules did not apply and while there was no formal writing by which he was dismissed, it is evident that he was given an opportunity to comply and plenty of time to conform after the many warnings he had received, and especially after the suspension he had received. His conduct thereafter showed his disdain for his employment when he went into the office and tore up papers and records. His answer was that he was not drunk and that the papers he tore up and threw away were matters of his personal concern. This is not persuasive in view of the fact that he tore up State records belonging to his employers. He did not show that there was any need for him to tear up the records without explaining to his co-workers, after he was suspended. I do not accept the plaintiffs testimony as being credible.

Pursuant to McDonnell Douglas, supra, at page 802, 93 S.Ct. at page 1824, the burden then must shift to the employer to articulate some legitimate, nondiscriminatory reasons for the employee’s rejection. The Supreme Court indicates that there are many details “which could be recognized as a reasonable basis for a refusal to hire”. In this case it was the claimant’s participation in unlawful conduct against the employer as a cause for his rejection. The Court said, “that this suffices to discharge petitioner’s burden of proof at this stage and to meet respondent’s prima facie case of discrimination.”

The court further stated “Nothing in Title VII compels an employer to absolve and rehire one who has engaged in such deliberate unlawful activity against it.” Further, “Respondent admittedly' had taken part in a carefully planned ‘stall-in’, designed to tie up access and egress from petitioner’s plant at a peak traffic hour”.

The Court went on to say that even so where the employee’s reason for rejection suffices to meet the prima facies case, it does not end there. “Title VII does not, without more, compel rehiring of respondent, neither does it permit petitioner to use respondent’s conduct as a pretext for the sort of discrimination prohibited by § 703(a)(1) ... Especially relevant to such a showing would be evidence that white employees involved in acts against petitioner of comparable seriousness to the ‘stall-in’ were nevertheless retained or rehired. Petitioner [employer] may justifiably refuse to rehire one who was engaged in unlawful, disruptive acts against it, but only if this criterion is applied alike to members of all races.” (page 804, 93 S.Ct. page 1825)

In Furnco Construction Corp. v. Waters, 438 U.S. 567, 98 S.Ct. 2943, 57 L.Ed.2d 957 (1978) the McDonnell Douglas case, supra, was re-affirmed by the Supreme Court. The Court said “The central focus of the inquiry in a case such as this is always whether the employer is treating ‘some people less favorable than others because of their race, color, religion, sex, or national origin.’ Teamsters v. United States, supra [431 U.S. 324], at 335, n. 15 [97 S.Ct. 1843, 1854 n. 15].” (at page 577, 98 S.Ct. at page 2949).

The Court explains that the formula enunciated in McDonnell Douglas was merely “a sensible, orderly way to evaluate the evidence in light of common experience as it bears on the critical question of discrimination.” (at page 577, 98 S.Ct. at page 2949). The Court further states, “the employer must be allowed some latitude to introduce evidence which bears on his motive. Proof that the work force was racially balanced or that it contained a disproportionately high percentage of minority employees is not wholly irrelevant on the issue of intent when that issue is yet to be decided.” (at page 580, 98 S.Ct. at page 2951). The Court then said, “such proof neither was nor could have been sufficient to conclusively demonstrate that Furnco’s actions were not discriminatorily motivated, the District Court was entitled to consider the racial mix of the work force when trying to make the determination as to motivation.” (at page 580, 98 S.Ct. at page 2951).

The Supreme Court again re-emphasized its formula, stated in McDonnell Douglas, supra, in Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981), as set forth in the syllabus under (a) (page 248, 101 S.Ct. at page 1089):

“First, the plaintiff has the burden of proving by the preponderance of the evidence a prima facie case of discrimination. Second, if the plaintiff succeeds in proving the prima facie case, the burden shifts to the defendant ‘to articulate some legitimate, nondiscriminatory reason for the employee’s rejection.’ Id. at 802. Third, should the defendant carry this burden, the plaintiff must then have an opportunity to prove by a preponderance of the evidence that the legitimate reasons offered by the defendant were not its true reasons, but were a pretext for discrimination. The defendant need not persuade the court that it was actually motivated by the proffered reasons, but it it sufficient if the defendant’s evidence raises a genuine issue of fact as to whether it discriminated against the plaintiff. To accomplish this, the defendant must clearly set forth, through the introduction of admissible evidence, the reasons for the plaintiff’s rejection.”

After identifying and considering the reasons by the Commonwealth for the dismissal of Ankrom, I then considered the statistical evidence offered. I find that the defendant’s expert witness, Dr. Neil H. Timm, was more credible than the expert testimony of Chauncey W. Smith for the plaintiff. In examining the statistical information, it does not appear that white males were adversely impacted by the employment practices of the Department of Community Affairs between 1973 and 1979.

Finally, the plaintiff’s contention that the Department of Community Affairs hired three black employees into the same job held by Ankrom. The evidence establishes that Diane Dubovsky, a white female, assumed the position and duties of the plaintiff. Timothy Warfield, a black male, did not assume Ankrom’s position and he had already been hired before the events leading to the plaintiff’s dismissal for insubordination.

SUMMARY

In the case before me, the plaintiff charged that a black man was instrumental in having him dismissed because he was white, and that the Commonwealth of Pennsylvania was prejudiced by its imbalance of employment of blacks as against whites. None of the charges were proved by a preponderance of the evidence. The defendants responded by an uncontradicted showing that all employees, black and white, were treated equally, and that the immediate superior of the plaintiff indeed attempted to help the plaintiff with his habit of alcoholism. The plaintiff continued the habit even though he had submitted himself to AA treatment, and when he was admonished for failure to perform because of his drinking habit, he was suspended by white supervisors from employment. But after being suspended, he showed his scorn by tearing up what was stated to be important public records. The plaintiff actually presented no rebuttal to counteract the preponderance of the evidence presented by the defendants, but relied on his unconvincing case in chief.

Wherefore the plaintiff’s claim must fall for failure to produce credible supports to substantiate his claim, and submitting much inferential evidence which presented no persuasion in support of his claim or even presenting a prima facie case, clear of no self-condemnitory proof. Having so failed, judgment must be entered for the defendants.

Findings of Fact and Conclusions of Law are incorporated in this Opinion in accordance with Federal Rule of Civil Procedure 52.

      . Rule 52. Findings by the Court
      (a) Effect. In all actions tried upon the facts without a jury ... the court shall find the facts specially and state separately the conclusions of law thereon, ... If an opinion or memorandum of decision is filed, it will be sufficient if the findings of fact and conclusions of law appear therein.