author: H. FRANKLIN WATERS, District Judge.

text:
    Larry G. BULL and Gayle A. Bull, Plaintiffs, v. Andrew James GREENWOOD, Michael Scott Lee and State Farm Mutual Automobile Insurance Company, Defendants.
    Civ. No. 84-2349.
    United States District Court, W.D. Arkansas, Fort Smith Division.
    June 4, 1985.
    William T. Morris, Fort Smith, Ark., for plaintiffs.
    Thomas B. Pryor, Fort Smith, Ark., for State Farm Mut. Auto. Ins. Co.
    Ernie Witt, Paris, Ark., for Michael Scott Lee.
   MEMORANDUM OPINION

H. FRANKLIN WATERS, District Judge.

INTRODUCTION

Plaintiffs commenced this action on November 16, 1984, in the Circuit Court of Sebastian County, Arkansas, against the individual defendants and State Farm Mutual Automobile Insurance Company (“State Farm”), plaintiffs’ “uninsured motorist” insurance carrier.

Plaintiffs are citizens of the State of Arkansas, as are the individual defendants. Defendant, State Farm, is a citizen of the State of Illinois.

The action arises from an automobile accident which occurred in Fort Smith, Arkansas, on October 29, 1983, involving the plaintiffs’ vehicle and a vehicle owned by defendant Greenwood and driven by defendant Lee.

Plaintiffs allege in Count I of their complaint that defendant Lee operated the vehicle in a negligent or reckless manner and that he was either the agent of defendant Greenwood at the time of the accident, or was engaged in a joint enterprise with defendant Greenwood. Plaintiffs also allege that defendant Greenwood negligently entrusted his vehicle to defendant Lee.

In Count II, plaintiffs state a contractual claim against defendant State Farm based on their “uninsured motorist” coverage under a policy of insurance issued by State Farm on July 3, 1983.

In Count III plaintiffs state what has come to be known as a “bad faith” tort against State Farm, based upon State Farm’s “dishonest and oppressive conduct in withholding disability payments when due.”

Count III was later dismissed without prejudice upon motion of the plaintiffs on March 25, 1985.

State Farm removed the action to this court by petition dated December 14, 1984, pursuant to 28 U.S.C. § 1441(c).

On May 9, 1985, plaintiffs moved this court to remand the proceedings to state court. Defendant State Farm duly responded and the matter is now ripe for resolution.

Discussion

28 U.S.C. § 1441(c) states:

(c) Whenever a separate and independent claim or cause of action, which would be removable if sued upon alone, is joined with one or more otherwise nonremovable claims or causes of action, the entire case may be removed and the district court may determine all issues therein, or, in its discretion, may remand all matters not otherwise within its original jurisdiction.

State Farm contends that Counts II and III of plaintiffs’ complaint are claims which would be removable if sued upon alone, and that Counts II and III are “separate and independent” from the claim asserted in Count I. Therefore, State Farm concludes that the entire case is properly removable and within the removal jurisdiction of this court.

Although the “bad faith” tort alleged in Count III of the complaint has now been dismissed, it is clear that in making the “separate and independent” determination, it is the status of plaintiffs’ complaint at the time that the removal petition is filed that controls. American Fire & Cas. Co. v. Finn, 341 U.S. 6, 71 S.Ct. 534, 95 L.Ed. 702 (1951); In re Carter, 618 F.2d 1093 (5th Cir.1980); Her Majesty Industries, Inc. v. Liberty Mutual Ins. Co., 379 F.Supp. 658 (D.S.C.1974).

Therefore, for purposes of plaintiffs’ motion for remand the court must consider the complaint in its entirety as of December 14, 1984.

It is well settled that the “separate and independent” requirement restricts removal more than the “separable controversy” terminology of former 28 U.S.C. § 71. In Finn the Supreme Court made clear that “the addition of the word ‘independent’ gives emphasis to congressional intention to require more complete disassociation between the federally cognizable proceedings and those cognizable only in state courts before allowing removal.” Finn, supra, 341 U.S. at 12, 71 S.Ct. at 539.

For purposes of section 1441(c), the court held “that where there is a single wrong to plaintiff, for which relief is sought, arising from an interlocked series of transactions, there is no separate and independent claim or cause of action____”

In subsequent cases various courts have further refined the meaning of “separate and independent” in the context of causes purportedly falling within the removal jurisdiction conferred by section 1441(c).

In Snow v. Powell, 189 F.2d 172 (10th Cir.1951), the court stated “the word ‘independent’ means ‘not resting on something else for support; self-sustaining; not contingent or conditioned.’ ” “Separate” was defined as “distinct; apart from; not united or associated.” See also Calhoun v. Calhoun, 482 F.Supp. 347 (E.D.Okla.1978).

Other courts have made clear that the claims must be entirely separate and independent to satisfy the requirements of section 1441(c). See Her Majesty, supra.

With regard to Counts I and II of plaintiffs’ complaint, plaintiffs allege claims in tort arising from an automobile collision and a claim ex contractu under “uninsured motorists” coverage. The contractual claim seeks recovery for the damages sustained in the automobile collision up to the policy limits. The claim in tort seeks essentially the same form of relief arising from the same event.

In Calhoun, supra, the court was faced with an identical situation. The court in Calhoun held that causes of action in tort for an automobile collision and causes of action against an “uninsured motorist” carrier sounding in contract based upon damages sustained in the automobile collision are not “separate and independent” for section 1441(c) purposes.

The court has carefully reviewed the holding and reasoning of Judge Daugherty in Calhoun, and finds his analysis particularly persuasive and compelling:

A pleading which alleges but one wrong for which singular relief is sought cannot constitute a separate and independent claim, no matter how many different defendants are said to be liable therefor, or how diverse their basis of liability (citation omitted). Furthermore, plaintiffs recovery under both his second and third causes of action is contingent upon his proving his first cause of action against the motorists and thus plaintiffs three causes of action are not “independent” as defined by Snow v. Powell, supra, within the meaning of 28 U.S.C. § 1441(c).

Calhoun, supra, at 350. See also Hay v. Gilbert, 461 F.Supp. 669 (W.D.La.1978).

Therefore, the court concludes that Counts I and II of plaintiffs’ complaint do not state “separate and independent” claims under section 1441(c).

Plaintiffs admit this to be correct in their brief filed in support of their motion for remand. Plaintiffs and State Farm go further and agree that plaintiffs’ third count constitutes a “separate and independent” claim. Plaintiffs argue, however, that their dismissal of Count III on March 25, 1985, mandates remand because “this court does not now have before it a matter which the federal courts had original jurisdiction.”

This proposition is incorrect. Once a case has been properly removed a plaintiff cannot successfully do anything to defeat federal jurisdiction and force a remand. See St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845 (1938); Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d § 3721.

Plaintiffs primarily rely upon Comstock v. Morgan, 165 F.Supp. 798 (W.D.Mo.1958), for the contrary assertion. However, careful analysis reveals Comstock to be inapplicable to the case at bar.

In Comstock a claim jurisdietionally based upon diversity of citizenship was properly removed to federal court. Following removal a cross-claim was asserted between two Kansas defendants. Plaintiff’s claim was then dismissed with prejudice, leaving the cross-claim between co-citizens. The district court ordered remand because the jurisdictional foundation had been destroyed.

The instant case presents a different situation. Even with the dismissal of Count III, plaintiffs’ action ex contractu in Count II continues to be a claim which would be removable if sued upon alone. The problem is not that this court lacks jurisdiction over such a claim, but that it is joined with a nonremovable claim which is not “separate and independent.” In Comstock, however, after the dismissal of the diversity claim, the only remaining “case” was a state law claim between two co-citizens of which the federal courts would have neither original nor removal jurisdiction. In the instant ease, had plaintiffs dismissed both Counts II and III, a situation similar to the one presented in Comstock would have arisen.

Thus, the resolution of the issue presented depends upon whether the allegations of Count III constitute a “separate and independent” claim.

The allegations of Count III can be briefly summarized as follows: that State Farm refused to honor plaintiffs’ claims; that State Farm refused to consider or investígate their claims; that State Farm conspired with the individual defendants to defeat plaintiffs’ claims; that State Farm refused to discuss settlement; that State Farm failed to file an accident report; and that State Farm unjustifiably withheld payment. Plaintiffs seek compensatory damages in the amount of $50,000.00 for emotional distress, and punitive damages of $100,000.00.

Thus, it is arguable that plaintiffs seek recovery for a distinct “wrong” from that alleged in Count I in that they seek to recover for additional mental distress caused by willful conduct not contained in Count I.

In Frontier Enterprises, Inc. v. ICA Corp., 319 F.Supp. 1156 (D.Minn.1970), the court was faced with allegations of breach of contract, fraud, and' conspiracy in an action seeking punitive damages arising from the fraud and conspiracy. Because there was but one essential “wrong,” and because the claims arose from an interlocked series of events, the court held that the claims were not “separate and independent.” The court added that although only one of the defendants “could be held liable to [plaintiff] on the basis of a breach of contract, it still cannot be said that this is a separate and independent claim from those founded on fraud and conspiracy____”

In the instant case, Count I of the complaint sets forth plaintiffs’ damages arising from the automobile collision. Count II seeks recovery ex contractu for the same injuries and losses up to the policy limits. Count III sets forth additional damages for distress based upon State Farm’s “oppressive” conduct in failing to comply with its contractual obligations set forth in Count II.

Therefore, the three claims may fairly be said to be dependent, contingent, and interrelated. Without the occurrence of the automobile accident alleged in Count I, State Farm would have had no duty to perform under the contract alleged in Count II. In the absence of either the collision alleged in Count I, or the duty allegedly arising therefrom set forth in Count II, there could be no claim or cause of action based upon the willful or oppressive failure to perform those contractual obligations, as alleged in Count III.

A “bad faith” insurance tort will not normally stand alone. In order to give rise to this cause of action there must be an underlying event which “triggers” an obligation or liability on the part of the insurer. The insurer must then maliciously or oppressively refuse to honor its obligation. Thus, it follows that a claim based upon an insurance “bad faith” tort is dependent upon and interrelated with any claims arising from the underlying “triggering” event and any contractual obligation “springing” therefrom.

Therefore, the court concludes that the claims alleged in plaintiffs’ complaint are not “separate and independent” for purposes of section 1441(c).

Section 1441(c) is a restrictive statute and is to be strictly construed. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 61 S.Ct. 868, 85 L.Ed. 1214 (1941) (removal statutes generally); Illinois v. Kerr-McGee Chem. Corp., 677 F.2d 571 (7th Cir.1982); Bradley v. Maryland Cas. Co., 382 F.2d 415 (8th Cir.1967); First Nat’l Bank of Lake Providence v. American Marine & General Insurance Co., 1:181 F.Supp. 285 (E.D.Ark.1960). Several courts require all doubts to be resolved against removal. Greenshields v. Warren Petroleum Corp., 248 F.2d 61 (10th Cir.1957); Butler v. Polk, 592 F.2d 1293 (5th Cir.1979); Jones v. General Tire & Rubber Co., 541 F.2d 660 (7th Cir.1976).

This is doubtless because “[t]he jurisdiction of the federal courts is carefully guarded against expansion by judicial interpretation____” Finn, supra, 341 U.S. at 17-18, 71 S.Ct. at 541-42.

... To permit a federal trial court to enter a judgment in a case removed without right from a state court where the federal court could not have original jurisdiction of the suit ... would ... work a wrongful extension of federal jurisdiction____

Finn, supra, at 18, 71 S.Ct. at 542.

To do so would occasion an extreme unfairness of exposing the parties to a possibility of obtaining a favorable final judgment in federal court, only to have it determined that the court lacked jurisdiction. Cowart Iron Works, Inc. v. Phillips Construction Co., 507 F.Supp. 740 (S.D.Ga.1981).

Because a remand to state court pursuant to 28 U.S.C. § 1447(c) is not a reviewable order, see 28 U.S.C. § 1447(d), the court has cautiously and carefully reviewed the pending motion and response so as not to erroneously deprive the defendant of a right to a federal forum. See Gravitt v. Southwestern Bell, 430 U.S. 723, 97 S.Ct. 1439, 52 L.Ed.2d 1 (1977).

The court concludes that any judgment entered by this court in the pending case would be wholly without subject matter jurisdiction and therefore void.

The court finds and concludes that this “case was removed improvidently and without jurisdiction” within the meaning of section 1447(c), and accordingly, must remand this case to the Circuit Court of Sebastian County, Arkansas, Greenwood District, to be reinstated on that court’s docket.

A separate order in accordance herewith will be concurrently entered.


source: Caselaw Access Project

author: GERRY, District Judge.

license: Public Domain

text:
    William POLLOCK and Catherine, h/w, and Catherine Bauer, Administratrix of the Estate of Harry E. Bauer, Dec’d., Plaintiffs, v. Richard D. BARRICKMAN and Austino’s Lift Trucks Co., Inc., Defendants.
    Civ. A. No. 84-3693.
    United States District Court, D. New Jersey.
    June 4, 1985.

      Benedict A. Casey, Collingswood, N.J., for plaintiffs.
    Ralph A. Catalano, Montano, Summers, Mullen, Manuel & Owens, Westmont, N.J., for defendants.
   GERRY, District Judge.

This is a diversity automobile accident case. The decedent, Harry Bauer, died in this accident, and his wife, Catherine Bauer, administratrix of his estate, is bringing these wrongful death and survival actions. The question is whether these actions should be governed by Pennsylvania or New Jersey law. The decedent was a citizen of Pennsylvania; the defendant Barrickman, whose car struck the decedent’s, is a citizen of New Jersey, as is his employer, co-defendant Austino’s Lift Trucks Co., Inc. The accident occurred in New Jersey.

The parties agree that the wrongful death statutes of Pennsylvania and New Jersey are identical, and it therefore makes no difference which statute is applied. The real issue concerns the Survival Acts. The New Jersey courts have construed the New Jersey Act, N.J.S.A. 2A:15-3, to permit damages only for the decedent’s pain and suffering between injury and death, as well as for any lost earnings between injury and death. Pennsylvania’s Act permits these elements of damages but also permits recovery for decedent’s prospective lost earning capacity.

Predictably, the plaintiff therefore seeks to have Pennsylvania law applied, and defendant seeks to have New Jersey law applied.

As a federal court sitting in diversity, this court must resolve this choice of law question applying the choice of law theory adopted by the New Jersey courts. Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941).

New Jersey, of course, has abandoned the old choice of law rule that the site of the accident provides the law of the case. This rule has been supplanted by a governmental interest analysis. Under this approach,

the court determines first the governmental policies evidenced by the laws of each related jurisdiction and second the factual contacts between the parties and each related jurisdiction. A state is deemed interested only where the application of its law to the facts in issue will foster that state's policy.

Henry v. Richardson-Merrell, Inc., 508 F.2d 28, 32 (3d Cir.1975). Further, under this approach, the laws of different states may apply in the same case to different issues in the case. White v. Smith, 398 F.Supp. 130 (D.N.J.1975). Undeniably, in the instant case, for example, New Jersey law will govern any consideration of negligence, based on the rules of the road. Id.

In Foster v. Maldonado, 315 F.Supp. 1179 (D.N.J.1970), a case involving identical facts to those here — Pennsylvania plaintiff, New Jersey defendant, accident in New Jersey — the court applied the Pennsylvania Survival Act. The Foster court believed that the case presented a false conflict. Pennsylvania, the court reasoned, had a strong interest in the administration of its decedents’ estates, and New Jersey had no interest in the administration of the estates of non-resident decedents. Thus, the court concluded, Pennsylvania law should apply as Pennsylvania was the only interested jurisdiction.

In Colley v. Harvey Cedars Marina, 422 F.Supp. 953 (D.N.J.1976), the court was again faced with these identical facts. The Colley court, however, analyzed this case as a true conflict. Against Pennsylvania’s interest in compensation to decedents’ estates, the court purported to recognize New Jersey’s interest, as reflected in its Survival Act, in protecting its resident defendants from large recoveries by estates. Thus, the Colley court concluded, each jurisdiction was interested in the application of its law.

A true conflict presents the court with a true dilemma. The Colley court understood that there was really no way, in the evaluation of the interests enunciated above, to say that Pennsylvania’s interest was stronger than New Jersey’s, or vice versa; or that Pennsylvania’s interest was more valuable and worthy of recognition, or vice versa. Brainerd Currie, a leading scholar to whom the court turned for guidance, argued that when faced with such a conflict, the court should simply apply the law of the forum; in this instance, New Jersey law. Id.

The Colley court adopted the approach of another scholar, D.F. Cavers, who argued that:

Where the liability laws of the state in which the defendant acted and caused an injury set a lower standard of ... financial protection than do the laws of the home state of the person suffering the injury, the laws of the state of conduct and injury should determine the standard of ... protection applicable to the case.

Id. Expounding on this principle, the Colley court explained:

By entering the state ..., the visitor has exposed himself to the risks of the territory and should not expect to subject persons living there to a financial hazard that their law had not created.

Id. This makes good sense, we believe, although only where the state of injury is truly interested in protecting the defendant.

Upon careful reflection, this court believes that the instant case does not present a true conflict, and we will therefore follow Foster in applying the Pennsylvania Survival Act. We disagree with the Colley court’s reading of the intent of the New Jersey Legislature in passing its Survival Act.

At common law, in England and New Jersey, a personal right of action did not survive the death of the injured party and pass to his estate. Cooper v. Shore Electrie, 63 N.J.L. 558, 44 A. 633 (E & A 1899). This situation was remedied in 1855, when the New Jersey Legislature enacted the predecessor of N.J.S.A. 2A:15-3. Seven years earlier, in 1848, the Legislature passed a wrongful death statute.

The wrongful death act created a new cause of action in order to afford redress to those who were dependent on the decedent. Kern v. Kogan, 93 N.J.Super. 459, 226 A.2d 186 (Law Div.1967). The Survival Act merely permitted the estate to recover for the loss that accrued between injury and death. Id.

The Survival Act is remedial in nature, see Cooper, supra, designed to alleviate what the Legislature considered an unjust result. The Foster court stated that the Act was designed principally to benefit creditors of the estate. In any event, this court believes that, when enacting the statute, the Legislature was principally, if not solely, concerned with the plight of the decedent and his estate, not with the defendant tort-feasor.

The common law rule, after all, cannot be considered to have been designed as a protection for the defendant, but only to have represented a narrow view of the rights of a decedent and the consequences of death. And the remedial legislation, likewise, cannot seriously be viewed as a reduction in the protection to be afforded a defendant, but must be viewed simply as an extension of the injured party’s right of recovery beyond death.

Of course, it may be argued that the interests of the defendant are implicitly recognized, since recovery is limited in New Jersey in a way it is not so limited in Pennsylvania; and that- it must be assumed, therefore, that the New Jersey Legislature balanced interests and decided to weigh that balance to some extent in favor of the decedent’s tort-feasor. This court does not accept this argument, however. Rather, we believe that the Legislature did not consider the tort-feasor at all, hut simply decided what elements of damage it was fair to permit the recovery of, in order to make whole the decedent.

Consider, for example, any other cause of action in tort. We start with the idea that damages are designed to make the injured party whole. If, then, the Legislature (or the courts) determine not to permit recovery, for example, for emotional distress absent a demonstrable physical injury (see Falzone v. Busch, 45 N.J. 559, 214 A.2d 12 (1965)), or for lost earnings (past or future) absent a demonstration of earning capacity, this determination is not designed to protect the defendant (although it has this effect). Rather, this determination simply recognizes that to permit recovery would do more than make the injured party whole.

So, here too, the Legislature has reached a decision about what damages the estate is fairly entitled to. In this regard, it must be remembered that the 1855 Survival Act was “passed as supplementary to the Death Act [of 1848] and to fill the gap left open [by the latter Act].” Kern, supra, 226 A.2d at 193 (emphasis added). Having decided to permit next of kin to recovery for loss of future wages, the Legislature did not believe it was fair or necessary to also allow this recovery to the estate, which only recovers for “loss that accrued ... between injury and death.” Id.

In sum, then, because we do not believe the Survival Act was enacted with resident defendants in mind, but only in the interests of resident decedents, we believe that the facts of this case present a false conflict. Accordingly, we will grant the motion of plaintiffs for the application of Pennsylvania law. The accompanying order will be entered.

ORDER

AND NOW, this 4th day of June 1985, upon consideration of Plaintiff’s Motion to Apply Pennsylvania Wrongful Death & Survival Acts, it is hereby ORDERED and DECREED that the Pennsylvania Wrongful Death & Survival Acts shall be applied to the issue of damages in this action.

      . There is something unsatisfying about this resolution because it means that, had this case been brought in Pennsylvania, and assuming Pennsylvania also employed an interest analysis approach, then Pennsylvania law would apply.


author: OBERDORFER, District Judge.

text:
    Linwood Jerome FOSTER, Jr., Plaintiff, v. NATIONAL RAILROAD PASSENGER CORPORATION, et al., Defendants.
    Civ. A. No. 83-2702.
    United States District Court, District of Columbia.
    June 4, 1985.

      Matthew S. Watson, Washington, D.C., for plaintiff.
    Christopher M. Klein and Theodore M. Kerrine, Washington, D.C., for defendants.
   MEMORANDUM

OBERDORFER, District Judge.

On October 16, 1973, the National Railroad Passenger Corporation (“Amtrak”) hired the plaintiff as a station passenger service representative. Due to a reduction-in-force, plaintiff was removed from that position on June 30, 1974. Plaintiff later filed a complaint with the Baltimore Community Relations Commission (“Baltimore Commission”), alleging race discrimination.

The race discrimination charge was settled on March 30, 1976, when Amtrak and the Baltimore Commission entered into a Memorandum of Understanding (“Memorandum”). The Memorandum provided that plaintiff would be promoted to the position, pay and benefits of Station Supervisor, effective November 10, 1975. See Defendants’ Motion for Summary Judgment, Exhibit A. The plaintiff accepted the terms of this Memorandum on July 4, 1976. See Defendants’ Exhibit B. The Equal Employment Opportunity Commission (“EEOC”) later reviewed the Memorandum and concluded that the matter had been successfully settled. See Defendants’ Exhibit C.

On September 5, 1977, plaintiff’s Station Supervisor position was abolished in another reduction-in-force. Plaintiff alleges that he and other employees slated to be removed met with Edward Blair, a supervisor, on or about September 5, 1977. Blair allegedly told them that they could continue their employment with Amtrak if they “bumped” other, less senior employees in union positions. According to plaintiff, Blair also promised that those who stayed with Amtrak would automatically be considered for future management positions. Plaintiff claims that he relied on this representation and bumped into a union position, becoming a timekeeper in Baltimore.

Plaintiff alleges that Amtrak breached Blair’s oral promise in February 1978, when Thomas Rao, an employee with less seniority than plaintiff, was placed in a management position. Plaintiff alleges that Rao, who is a member of a racial minority, was appointed before plaintiff because of race discrimination. Plaintiff also implies that other, white employees were selected ahead of him, but does not dispute that Rao’s appointment triggered the breach of contract claim.

Plaintiff eventually filed a discrimination complaint with the EEOC. On February 24, 1983, the EEOC concluded that no reasonable cause existed to credit plaintiffs claim of race discrimination and issued a Notice of Right to Sue. Defendants’ Exhibit D. Plaintiff then brought this action pro se, alleging breach of the 1976 Memorandum, breach of an asserted 1977 oral contract, and employment discrimination.I. This action is now before the Court on defendants’ motion for summary judgment.

By Memorandum and Order of April 24, 1985, the Court scheduled oral argument and an evidentiary hearing on defendants’ motion for summary judgment. The purpose of the hearing was to resolve the apparent factual dispute about what Mr. Blair said to the plaintiff and other employees at the meeting that took place on or about September 5, 1977. See Foster v. National Railroad Passenger Corporation, No. 83-2702 slip op. at 2 (D.D.C. April 24, 1985).

I.

Plaintiff alleges that the defendants breached the 1976 Memorandum and a 1977 oral contract that was allegedly created by plaintiff’s reliance on Mr. Blair’s promises. He seeks damages for breach of contract and for alleged violations of 42 U.S.C. § 1981. The testimony adduced at the evidentiary hearing establishes that Amtrak undertook a reduction-in-force because of budget cutbacks, that Mr. Blair met with the employees who were to be removed in the reduction-in-force, and that he advised them that Amtrak would try to restore them to their management positions. Mr. Payne, plaintiff’s witness, added that he understood that those removed would be brought back automatically, without having to reapply or watch for postings announcing the availability of new management positions.

However, the plaintiff offered no evidence to prove that Amtrak had entered into a contract guaranteeing that plaintiff’s seniority would entitle him to be reappointed to a management position as soon as one became available. First, the testimony of Jean Hughes and A1 Bellow established that there is no such thing as seniority for a management position. Rather, as Mr. Blair explained, experience — which is measured by job performance rather than time in the position — is the primary criterion for promotion to a management level job.

Second, plaintiff failed to prove that Mr. Blair made a promise upon which the plaintiff reasonably relied to his detriment. The testimony establishes only that Mr. Blair told the removed employees that they would remain on the payroll until the end of September 1977. During that time, they could either try to find another management job at Amtrak or they could exercise their seniority rights to move into a union position. The testimony of those present at the meeting proves that Mr. Blair did not promise to reappoint those employees who remained with Amtrak instead of going elsewhere.

The testimony of defendants’ witnesses was credible, consistent and essentially uncontradicted by the testimony of plaintiff’s witness. Considering the testimony as a whole, the Court finds that no contract was formed in September of 1977 because there was no bargained for exchange between the purported parties to the contract. In the course of breaking the news of the reduction-in-force to those concerned, Mr. Blair stated his personal intention to assist the removed employees in obtaining management positions with Amtrak. Mr. Blair apparently failed to keep his word after the affected employees were removed. Nevertheless, there is absolutely no evidence that Amtrak promised to reappoint the plaintiff provided that he did not take a job with someone else. See also Foster Deposition at 156-57. There is, in short, no reason to believe that a contract was formed.

Plaintiff also alleges a separate contract claim arising out of the asserted breach of the 1976 Memorandum. The plaintiff cannot state a claim based on the Memorandum because that agreement was fully performed long before this action was brought. The Memorandum required only that plaintiff be appointed to the position of Station Supervisor and that he receive pay and benefits appropriate to that position retroactive to November 10, 1975. There is no dispute that these obligations were carried out. See Foster Deposition at 8, 17 & 67. Indeed, the plaintiff approved the Memorandum in July of 1976. See Defendants’ Exhibit B. Neither the Memorandum nor plaintiff’s approval of it suggest the presence of an implied term binding Amtrak to keep plaintiff employed as a Station Supervisor even though all of the other employees who held that position were to be removed. The Memorandum made plaintiff a Station Supervisor, and it conferred on him the pay and benefits that he would have received had he been appointed to that position on November 10, 1975. Amtrak did not employ plaintiff in a special job that was to be insulated from legitimate reductions-in-force. Similarly, nothing in the Memorandum obligated Amtrak to restore plaintiff to a management position once he had been removed from his job as a Station Supervisor.

Moreover, the plaintiff’s contract claims are time barred. Contract claims against Amtrak are governed by the laws of the District of Columbia. See 45 U.S.C. § 546(d). D.C.Code § 12-301(7) requires that contract actions be brought within three years of an alleged breach. Plaintiff asserts that the 1976 Memorandum and the alleged 1977 oral contract were breached when Thomas Rao was appointed to a management position in 1978. Defendants’ Statement of Material Facts as to Which There is No Genuine Issue at j| 12; Foster Deposition at 12. At best, plaintiff’s contract claim arose in May of 1978, when Jean Hughes was allegedly selected for a management position. Complaint at j[ 9. Nevertheless, plaintiff did not file this suit until 1983, five years after the alleged breach.

In response to the defendants’ motion for summary judgment, the plaintiff “claims that he is prepared to show that breaches of the 1976 agreement have occurred as late as 1984.” Memorandum of Points and Authorities at 3. This proffer plainly fails to “to set forth specific facts showing that there is a genuine issue for trial.” Fed.R. Civ.P. 56(e). The plaintiff has never moved to amend his complaint, nor does he offer the slightest explanation of the incidents to which he refers. The defendants should not be put to the expense of a trial when the plaintiff fails to allege facts sufficient to make out a claim that falls within the statute of limitations.

Similarly, plaintiff’s section 1981 claim is barred by the one year limitation period applicable to actions brought under the District of Columbia’s Human Rights Law. See Parker v. Baltimore and Ohio Railroad Company, 555 F.Supp. 1182, 1187 (D.D.C.1983). The only incidents of discriminatory breach of contract sufficiently pleaded by plaintiff are the 1978 appointments of Thomas Rao and Jean Hughes. These incidents occurred five years before the complaint was filed and cannot save the plaintiff’s claims from the applicable statute of limitations.

Plaintiff argues that the statute of limitations does not apply because the 1978 appointment was only the first in a series of discriminatory breaches' of contract that have continued through 1984. However, the plaintiff has failed to allege with specificity any incidents occurring within the limitations period. Moreover, the plaintiff has completely failed to allege that there is any connection between the original incident of alleged discrimination and more recent occurrences. As our Court of Appeals has observed, “a series of allegedly discriminatory actions against the same employee, even with the same alleged motive such as sex discrimination, is not enough.” Stoller v. Marsh, 682 F.2d 971, 975 (D.C.Cir.1982), cert. denied, 460 U.S. 1037, 103 S.Ct. 1427, 75 L.Ed.2d 787 (1983).

II.

Plaintiff also alleges that he was removed from his Station Supervisor position and not reappointed to management because of race discrimination. He seeks relief from this alleged discrimination under Title VII. There is no dispute that in 1977, Amtrak had to abolish several positions because of cutbacks in its budget. Defendants’ Statement of Material Facts as to Which There is No Genuine Issue at 9; Plaintiff’s Response to Defendants’ Motion for Summary Judgment at 2. Plaintiff theorizes, however, “that the decision to eliminate his post was motivated by illegal considerations of race.” Plaintiff’s Response at 2.

But the plaintiff has conceded that his position was abolished because of reductions in Amtrak’s funding. See Complaint at 7; Foster Deposition at 10. The defendants emphasized this apparent concession in their motion for summary judgment, see Memorandum of Points and Authorities at 11-12, but plaintiff has never offered to clarify his position on the point. Assuming that plaintiff could make out a prima facie case of race discrimination, the undisputed facts establish that Amtrak had a legitimate, nondiscriminatory reason for abolishing plaintiff’s Station Supervisor position. Plaintiff’s conclusory assertions and the allegations in his complaint do not give rise to a factual issue on this point, see Fed.R.Civ.P. 56(e), nor do they sufficiently allege that Amtrak’s reason for removal was a mere pretext for race discrimination. To the contrary, the undisputed facts establish that both whites and blacks, in roughly equal numbers, were removed from positions comparable to plaintiff’s during the reduction-in-force. Defendants’ Statement of Material Facts as to Which There Is No Genuine Issue at 10; Foster, supra, slip op. at 1-2.

Plaintiff also alleges “racial discrimination regarding his failure to receive certain promotions on the basis of seniority.” Memorandum of Points and Authorities at 1. Plaintiff’s argument on this point is based on the assumption that seniority entitles him to a management post. But the testimony adduced at the evidentiary hearing convincingly established that seniority does not control selection for management positions. In any event, the allegations in plaintiff’s complaint and the pleadings on the motion for summary judgment are wholly conclusory. The plaintiff has obtained counsel since the filing of his pro se complaint and has had the benefit of discovery. Nevertheless, he has failed to allege with specificity or proffer evidence about any occasion on which he was denied a management position because of race discrimination. Accordingly, he has failed to state a claim under Title VII.

For these reasons, an order will grant the defendants’ motion for summary judgment and dismiss the complaint.

      . Deposition of Linwood J. Foster (Foster Deposition) at 69; Defendants’ Statement of Material Facts as to Which There is No Genuine Issue at IT 14.

      . Plaintiff retained counsel after commencing this action. He has already conceded that he has no claim under 42 U.S.C. § 1985. See Memorandum of Points and Authorities in Support of Plaintiffs Response to Defendant’s Motion for Summary Judgment at 5-6. He has also abandoned his claims under 42 U.S.C. § 1983 and the Fourth.and Fourteenth Amendments. See Foster v. National Railroad Passenger Corp., No. 83-2702, slip op. at 1 n.* (D.D.C. February 23, 1984).


author: CALDWELL, District Judge.

text:
    COMMONWEALTH OF PENNSYLVANIA In Its Own Behalf, Plaintiff, v. The LAKE ASPHALT AND PETROLEUM COMPANY OF PENNSYLVANIA and Robert W. Ehrhart, Defendants.
    Civ. A. No. 85-0413.
    United States District Court, M.D. Pennsylvania.
    June 5, 1985.

      David P. Cole, Deputy Atty. Gen., Harrisburg, Pa., for plaintiff.
    Ronald M. Katzman, Harrisburg, Pa., Donald T. Bucklin, Wald, Harkrader & Ross, Washington, D.C., for defendants.
   MEMORANDUM

CALDWELL, District Judge.

I. Introduction

Defendants, Lake Asphalt and Petroleum Company (Lake) and Robert W. Ehrhart, President of Lake, filed a motion to dismiss plaintiffs complaint. Subsequently, plaintiff, the Commonwealth of Pennsylvania, filed an amended complaint, mooting some of the issues raised by defendants. Defendants dealt with this amended complaint in their reply brief to plaintiff’s brief in opposition to the motion to dismiss. Defendants’ motion is accordingly ripe for disposition.

II. Background

Plaintiff’s complaint has two federal causes of action: (1) an antitrust claim for violation of the Sherman Act, 15 U.S.C. § 1; and (2) a claim under the Racketeer Influenced and Corrupt Organizations Act (RICO), pursuant to 18 U.S.C. §§ 1962(a) and (b). Pendent state claims are also made for fraud and breach of contract.

All the claims arise from a series of transactions entered into by Pennsylvania and Lake between 1979 and 1981 for the purchase of bituminous emulsion, used in the repair and resurface of roadways. The Commonwealth alleges, inter alia, that the defendants and other co-conspirators agreed to allocate among Lake and other suppliers the sale of bituminous emulsion to the state. The co-conspirators, among other things, submitted collusive, non-eompetitive bids in support of their scheme.

In connection with the fraud and contract claims, plaintiff claims that defendants illegally charged it higher prices for emulsion purchased from certain suppliers. The RICO claim is predicated upon the use of the mails in obtaining the higher prices.

III. Discussion.

We must bear in mind the following standard of review in disposing of the motion.

n a motion to dismiss, we must accept as true all well pleaded allegations of the complaint and resolve all reasonable inferences drawn from the allegations in the light most favorable to the plaintiff as the non-moving party. See Rogin v. Bensalem Township, 616 F.2d 680, 685 (3d Cir.1980). We can dismiss plaintiff’s claims only if it appears beyond a reasonable doubt that plaintiff cannot prove facts in support of its claim sufficient to entitle it to relief. Bogosian v. Gulf Oil Corp., 561 F.2d 434, 444 (3d Cir.1977).

Pennsylvania v. Emulsion Marketing, Inc., No. 84-1551, slip op. at 3 (M.D.Pa. May 6,1985) (Caldwell, J.) (brackets added).

A. Statute of Limitations Defense.

Defendants first contend that any antitrust claim accruing before March 27, 1981 is barred by the four year statute of limitations in the Clayton Act. 15 U.S.C. § 15b. Plaintiff asserts that the statute was tolled by defendants’ fraudulent concealment of their illegal activities. To establish fraudulent concealment that would toll the statute, plaintiff must show that the defendants concealed the conduct complained of, and that plaintiff failed, despite the exercise of due diligence on its part, to discover the facts forming the basis of its claim. See In re Beef Industry Antitrust Litigation, 600 F.2d 1148 (5th Cir.1979). Paragraph 18 of the amended complaint sets forth the alleged acts of concealment: (1) certification to the Commonwealth by the co-conspirators that bids had been made in an independent and non-collusive manner by the execution of the standard bid package; (2) submission of complementary bids; (3) meetings and phone calls prior to bid lettings to allocate the supply of bituminous emulsion to the Commonwealth; and (4) phone calls subsequent to the bid lettings to further the allocation process.

Defendants argue that none of this conduct constitutes fraudulent concealment. Citing Overfield v. Pennroad Corp., 146 F.2d 889, 896 (3d Cir.1944), they contend that “concealment which tolls the statute must be an affirmative, independent act of concealment; mere silence or nondisclosure, even by corporate officials is not enough.” Here, defendants argue the alleged concealment consists only of acts in furtherance of the conspiracy itself. Further, the certification of non-collusion is a mere denial of wrongdoing, insufficient to toll the statute. Plaintiff takes the opposite position. It claims, citing Ingram Corp. v. J. Ray McDermott and Co., Inc., 495 F.Supp. 1321 (E.D.La.1980), rev’d on other grounds, 698 F.2d 1295 (5th Cir.1983), that it “is unnecessary to show affirmative acts of concealment independent of the antitrust conspiracy.” Plaintiffs Brief at 4. Plaintiff also asserts that the certification of non-collusion in the bid package can constitute fraudulent concealment.

In connection with the requirement of independent acts of concealment, Ingram, supra, does support plaintiffs position in that there the court relied, in part, upon conduct in furtherance of the conspiracy to find fraudulent concealment. Plaintiffs in Ingram also alleged, however, that defendants had falsified, destroyed and concealed records and had bribed employees in concealing the conspiracy. Obviously, these were affirmative, independent acts of concealment sufficient to toll the statute. Significantly, the court in Ingram never explicitly held that acts in furtherance of the conspiracy alone would be sufficient to toll the statute. Under these circumstances, we conclude that the correct statement of the rule requires that the fraudulent concealment consists of affirmative acts independent of the underlying conspiracy. See General Aircraft Corp. v. Air America, Inc., 482 F.Supp. 3 (D.D.C.1979). Otherwise, the statute of limitations would be tolled indefinitely until plaintiff discovered its cause of action. See Campbell v. Upjohn Co., 498 F.Supp. 722 (W.D.Mich.1980), affd 676 F.2d 1122 (6th Cir.1982). Consequently, we cannot consider the conduct of defendants in furtherance of the conspiracy in connection with the tolling of the statute.

In connection with the significance of the certification of non-collusion in the bid package, plaintiff cites Rutledge v. Boston Woven Hose and Rubber Co., 576 F.2d 248 (9th Cir.1978). There, discussing fraudulent concealment, the Ninth Circuit Court of Appeals stated:

To avoid the bar of limitation by invoking the concept of fraudulent concealment, the plaintiff must allege facts showing affirmative conduct upon the part of the defendant which would, under the circumstances of the case, lead a reasonable person to believe that he did not have a claim for relief. Silence or passive conduct of the defendant is not deemed fraudulent, unless the relationship of the parties imposes a duty upon the defendant to make disclosure. The affirmative act of denying wrongdoing may constitute fraudulent concealment where the circumstances make the plaintiffs reliance upon the denial reasonable ____

Id. at 250.

Plaintiff claims that the circumstances of the instant case make its reliance upon the non-collusion provision reasonable. First, it asserts that it had no knowledge of bid rigging in the highway construction industry at the time it did business with Lake. Second, Pennsylvania passes upon so many bids in a year that it would be unreasonable to require it to investigate each bid for legality.

We fail to see the connection between plaintiff’s ignorance of bid rigging in general and the reasonableness of its reliance upon Lake’s assertion of non-collusion. The court in Rutledge was speaking of conduct on the part of a defendant that would lead a reasonable person to believe that there was no claim. Conduct of the industry in general is therefore simply not probative of any fraudulent concealment here. Similarly, whether or not it would be reasonable to require the Commonwealth to investigate each bid submitted to it does not relate to any conduct of the defendants but, rather, to limitations upon the procedure for obtaining supplies in highway construction.

In re Fertilizer Antitrust Litigation, 1979-2 Trade Cases (CCH) K 62,894 (E.D.Wash.1979) disposes of the plaintiff’s position in this case. In In re Fertilizer, the plaintiff states, including some private individuals, filed antitrust claims against the defendant companies, alleging that the defendants tried to restrain trade in fertilizer. Plaintiffs relied upon the doctrine of fraudulent concealment to keep alive claims arising four years before the filing of the complaint. As affirmative acts of concealment, plaintiffs alleged, inter alia, the following: (1) the submission of bids which by their submission were represented to be competitive when in fact they were not; (2) the false signing of non-collusion affidavits and/or certificates of regularity; (3) the making of false and misleading statements concerning prices, price increases and the existence of shortages. Rejecting the claim that these acts could constitute fraudulent concealment, the court stated:

Bids that had the appearance of regularity and their submission, which allegedly inferred that the bids were complete and regular, are not affirmative acts aimed at fraudulent concealment of anti-competitive conduct; such acts are at best passive conduct of concealment, if not simply silence. The submission of bids is merely failure to disclose the existence of a possible claim for relief, and that does not constitute an affirmative act of concealment. [citation omitted]____ Similarly, falsely signing non-collusion affidavits or the like is not sufficient to permit an inference that the plaintiffs, who are not insensitive to the implications of the antitrust law nor naive about the conduct of antitrust violators, would be significantly influenced by a single denial of wrongdoing. In short, under the circumstances of the present case, such conduct would not lead a reasonable person to believe that he did not have a claim for relief and, therefore, cannot serve as a basis for invoking the doctrine of fraudulent concealment. See Rutledge v. Boston Woven Hose and Rubber Co., 576 F.2d 248, 250 (9th Cir.1978). In addition, signing non-collusion affidavits or certificates of regularity amount to no more than a denial of wrongdoing which does not constitute fraudulent concealment. King & King Enterprises v. Champlin Petroleum Co., 446 F.Supp. 906, 912 (E.D.Okla.1978).

Id. K 62,894 at 79,178-79.

Other cases, cited by plaintiff, have reached the opposite conclusion concerning conduct similar to that alleged to have been done by the defendants here. See Massachusetts v. Ashland Warren, Inc., 1983-2 Trade Cases (CCH) K 65, 682 (D.Mass.1983); Illinois v. Ralph Vancil, Inc., 1976-2 Trade Cases (CCH) 1(61,025 (S.D.Ill.1976). In Massachusetts, however, the conduct complained of has not been described in enough detail to be of assistance to plaintiff here and the court there noted that a contrary decision on fraudulent concealment could result after a fuller record had been developed. In Illinois, in addition to conduct similar to defendants here, affirmative, independent acts of concealment of the conspiracy were alleged including payment of bribe money to the state’s Secretary of State and concealment of the sources and destination of that money. We conclude that In re Fertilizer, supra, should control here. Accordingly, we hold that any claims for antitrust damages accruing before March 27, 1981, four years before the filing of the complaint, are barred by the statute of limitations.

In any event, we must also agree with defendants that the Commonwealth has failed to plead that it acted with due diligence in this case. Paragraph 19(a) of the amended complaint alleges that the Commonwealth first learned in July of 1982 of industry wide irregularities in the highway construction industry from a federal investigation. There is no allegation of when this investigation began. While paragraph 19(b) alleges that a “joint investigation” was immediately commenced, subparagraph (c) asserts that the Commonwealth first discovered possible irregularities in Engineering District 1, where defendant Lake bid for sales, from a federal indictment filed on March 11, 1983. Further, facts implicating defendants in particular were only discovered from a federal trial held in June of 1983. Paragraph 19(d). Finally, plaintiff alleges that prior to March of 1983, it simply “had no reason to suspect” that bid rigging was going on. Paragraph 19(e). Although these allegations reveal extensive federal activity, none of them indicate what the plaintiff did itself to uncover its claim. Paragraph 19(e) is merely a statement of ignorance which is insufficient to avoid the statute. See Charlotte Telecasters, Inc. v. Jefferson-Pilot Corp., 546 F.2d 570 (4th Cir.1976).

B. The Complaint Makes A State Law Claim For Fraud.

Defendants contend that the complaint fails to allege a state law claim for fraud because there is no allegation of misrepresentation. The fraud claim arises from Lake’s contractual right to pass on price increases in bituminous emulsion from its suppliers to the Commonwealth. When such a price increase occurred, Lake was to supply written evidence of its supplier’s price increase. Plaintiff alleges that Lake submitted such proof as to only one supplier, Bituminous Emulsion Company (BEC), but, without telling the Commonwealth, proceeded to bill the higher price for supplies received from other companies which did not increase their prices. Plaintiff argues that, by the documents submitted, Lake implicitly represented that it was increasing its charges for BEC supplies alone and that this representation was false as evidenced by Lake’s subsequent billings.

Defendants contend that the documents make no false representations. They clearly show a price increase only to BEC from its own supplier, BEC’s notification of an increase to Lake, and Lake’s increase to the Commonwealth. Moreover, the invoices submitted by Lake to the Commonwealth clearly indicated the identity of the particular supplier of that quantity of emulsion. The prices charged for emulsion obtained from its two suppliers other than BEC were increased but only because of a contract term requiring Lake to charge a uniform price for all emulsion supplied to the state. Defendants argue that the Commonwealth cannot complain about its own contract terms.

Under Pennsylvania law, fraud consists of: (1) a misrepresentation; (2) a fraudulent utterance or non-disclosure; (3) an intention by the maker that the recipient will thereby be induced to act; (4) justifiable reliance by the recipient upon the misrepresentation; and (5) damage to the recipient as the proximate result. Marian Bank v. International Harvester Credit Corp., 550 F.Supp. 456 (E.D.Pa.1982), affd mem. 725 F.2d 668 (3d Cir.1983) (citing Neuman v. Corn Exchange National Bank & Trust Co., 356 Pa. 442, 51 A.2d 759 (1947)). In connection with fraudulent non-disclosure, “[i]t is a well-established rule that deliberate non-disclosure of a material fact amounts to culpable misrepresentation no less than an intentional false affirmation.” Marian Bank, supra at 461.

In the instant ease, viewing the allegations of the complaint in the light most favorable to plaintiff, Lake’s failure to disclose that it considered BEC’s price increase, and Lake’s subsequent compliance with the contract notification terms, as justification for increasing prices on its other two suppliers could be construed as a material omission. In turn, it could also be considered fraudulent regardless of whether Lake’s conduct is construed as a factual omission, silence as to its opinion as to its rights under the contract, or silence as to its existing intentions in performing under the contract. See Seligson v. Plum Tree, Inc., 361 F.Supp. 748 (E.D.Pa.1973). Accordingly, at this stage of the proceeding we must conclude that plaintiff has stated a valid claim for fraud.

C. Plaintiff Has Stated A Valid Breach of Contract Claim.

Plaintiffs contract claim is based upon Lake’s alleged violation of the escalation clause in charging the increased BEC price for emulsion received from its other suppliers. Defendants raise the uniform pricing provision discussed in section B above as a defense but, just as in dealing with the fraud claim, we must reject their position. This is only a motion to dismiss. A good cause of action has been pleaded. Defendants contractual defense is better presented when a fuller record has been developed.

Additionally, defendants raise the four year statute of limitations found in the Uniform Commercial Code, 13 Pa.C.S. § 2725, and at 42 Pa.C.S. § 5525(2). Plaintiff correctly points out, however, that a statute of limitations does not apply to the Commonwealth unless the Commonwealth is specifically covered by the statute. See Commonwealth v. Rockland Construction Co., 498 Pa. 531, 448 A.2d 1047 (1982). These statutory sections do not refer to the Commonwealth. Accordingly they do not bar the contract claim.

D. The RICO Claim.

Defendants originally contended that plaintiff’s RICO claim must be rejected because plaintiff failed to allege: (1) the necessary predicate acts; (2) injuries stemming from a pattern of racketeering activity; (3) that defendants have been convicted of the underlying predicate offenses; (4) a connection between defendants and organized crime; (5) a claim under section 1962(a) or (b) of RICO. After review of our memorandum in Pennsylvania v. Emulsion Marketing, Inc., No. 84-1551 (M.D.Pa. May 6, 1985), in which we deferred ruling on similar objections until the United States Supreme Court issued definitive rulings in two RICO cases recently argued before it, Sedima, S.P.R.L. v. Imrex Company, Inc., 741 F.2d 482 (2d Cir.1984) and Haroco Inc. v. American National Bank & Trust Co. of Chicago, 747 F.2d 384 (7th Cir.1984), defendants withdrew their objections pending the outcome of the Supreme Court decisions. They still maintain, however, that, because no fraud claim can be asserted against them, the RICO claim must fail for lack of predicate offenses. We ■ have rejected defendants’ argument on the insufficiency of the fraud claim. Accordingly, we will not dismiss the RICO claim but defendants will be permitted to renew their motion to dismiss the RICO count after the Supreme Court has issued its rulings in Sedima, supra and Haroco, supra.

We will issue an appropriate order.

      . In their reply brief, defendants requested that they be granted an opportunity to answer the amended complaint if we denied their motion. We do not have to rule on this request since Fed.R.Civ.P. 12(a)(1) permits defendants to answer the amended complaint within ten days after we deny their motion.