author: BARTLETT, District Judge.

text:
    Jerome James ANSELMO, Plaintiff, v. MANUFACTURERS LIFE INSURANCE COMPANY, Defendant.
    No. 83-0449-CV-W-9.
    United States District Court, W.D. Missouri, W.D.
    Sept. 19, 1984.

      Hollis H. Hanover, Popham, Conway, Sweeny, Fremont & Bundschu, Kansas City, Mo., for plaintiff.
    Edwin L. Noel, Jordan B. Cherrick, Francine C. Israel, Armstrong, Teasdale, Kramer & Vaughan, St. Louis, Mo., John A. Vering, III, Dietrich, Davis, Dicus, Row-lands & Schmitt, Kansas City, Mo., for defendant.
   ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT ON ALL COUNTS

BARTLETT, District Judge.

Defendant, Manufacturers Life Insurance Company, has moved for summary judgment on all counts of plaintiff’s complaint. Defendant asserts that it is entitled to summary judgment as a matter of law:

1) On plaintiff’s breach of contract for wrongful discharge claim (Count I) because a) plaintiff was an employee-at-will; and b) plaintiff’s asserted oral agreement for a definite term of employment violates Missouri’s statute of frauds, Mo.Rev.Stat. § 432.010 (1978);

2) On plaintiff’s prima facie tort claim (Count II) because no such cause of action exists for the termination of an employee-at-will contract and plaintiff has failed to plead all the essential elements of a prima facie tort;

3) On plaintiff’s claim of fraudulent misrepresentation (Count III) because any promise by defendant to employ plaintiff for three years was not a representation of fact; and

4) On each of plaintiff’s claims because plaintiff released defendant from any liability for the claims made in this lawsuit.

Rule 56(c), Federal Rules of Civil Procedure, provides that summary judgment shall be rendered if the “pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” In ruling on a motion for summary judgment, it is the Court’s obligation to view the facts in the light most favorable to the plaintiff and to allow plaintiff the benefit of all reasonable inferences to be drawn from the evidence. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970); Inland Oil and Transport Co. v. United States, 600 F.2d 725, 727-28 (8th Cir.1979), cert. denied, 444 U.S. 991, 100 S.Ct. 522, 62 L.Ed.2d 420 (1979).

If there is no genuine issue about any material fact, summary judgment is proper because it avoids needless and costly litigation and promotes judicial efficiency. Roberts v. Browning, 610 F.2d 528, 531 (8th Cir.1979); United States v. Porter, 581 F.2d 698, 703 (8th Cir.1978). However, summary judgment is an extreme remedy which should not be granted unless defendant has established his right to judgment beyond controversy. Ozark Milling Co. v. Allied Mills, Inc., 480 F.2d 1014, 1015 (8th Cir.1973); Oskey Gasoline and Oil Co. v. Continental Oil Co., 534 F.2d 1281, 1285 n. 9 (8th Cir.1976).

Although defendant disputes plaintiff’s version of the facts in the case, defendant bases its motion for summary judgment on the facts stated by plaintiff in his deposition. The Court adopts plaintiff’s version of the facts for purposes of ruling on this motion.

Plaintiff (Anselmo) began employment discussions with defendant (Manufacturers Life) in the spring of 1980. After a series of conversations and interviews, plaintiff went to work for defendant on July 15, 1980.

Plaintiff received a letter dated August 18, 1980, from a representative of defendant which detailed the terms of plaintiff’s compensation. Plaintiff received a second letter dated June 25, 1981, which addressed the same subject. Plaintiff received another letter dated January 12, 1982, which addressed his income package. Plaintiff contends that these three letters are the employment contract.

On June 28, 1982, Iain Scott, an employee of defendant, told plaintiff that his employment was ended. Scott told plaintiff not to return to defendant’s office and gave him a letter of resignation to sign. The resignation letter provided, in part, that “[a]ll payments agreed to in this letter are in complete discharge of all obligations under your Branch Manager’s appointment, except as may be accrued under the company’s Pension Plan.” Plaintiff was told that if he signed the resignation letter he would receive severance pay amounting to four months salary. If he did not sign the letter, plaintiff was told that he would receive no severance pay and that the company would not give him references for future employment. Anselmo contacted his attorney about the letter before he signed it on the following day. When he signed the letter, he understood it. The relevant provisions of the resignation letter provide:

In accordance with our discussions, this is to confirm that you will receive four months’ compensation at your present guaranteed monthly rate beginning July 1, 1982, and ending October 31, 1982. You may elect to receive the compensation monthly, or in one lump sum. Please indicate your choice below.
All payments agreed to in this letter are in complete discharge of all obligations under your Branch Manager’s appointment, except as may be accrued under the Company’s Pension Plan.

Thereafter, plaintiff received from defendant a check in the amount of $13,938.33 which he cashed.

This Court’s jurisdiction is based solely upon diversity of citizenship, 28 U.S.C. § 1332 (1983). In such cases, the appropriate choice of law is “the law of the state where the cause arose.” Gabauer v. Woodcock, 520 F.2d 1084, 1094 (8th Cir. 1975). Plaintiff was employed in Missouri, any employment contract that existed was executed in Missouri, and plaintiff’s employment was terminated in Missouri. Therefore, this Court will apply Missouri law in ruling the issues raised by defendant’s motion.

BREACH OF CONTRACT

Count I of plaintiff’s petition alleges that defendant arbitrarily, unreasonably and without cause terminated Anselmo’s employment with defendant.

“[I]n the absence of a contract for employment for a definite term or a contrary statutory provision, an employer may discharge an employee at any time, without cause or reason, or for any reason and, in such cases no action can be obtained for wrongful discharge.” Amaan v. City of Eureka, 615 S.W.2d 414, 415 (Mo. banc 1981), cert. denied, 454 U.S. 1084, 102 S.Ct. 642, 70 L.Ed.2d 619 (1981) quoting from Christy v. Petrus, 365 Mo. 1187, 1189, 295 S.W.2d 122, 124 (en banc 1956). Therefore, unless there was an employment contract which provided either a term of employment or that plaintiff could only be dismissed with cause or unless there was a statute providing similar rights, plaintiff’s wrongful discharge claim must be dismissed for failure to state a cause of action. Cooper v. City of Creve Coeur, 556 S.W.2d 717, 720 (Mo.App.1977); Culver v. Kum, 354 Mo. 1158, 193 S.W.2d 602, 603 (Mo.1946).

Plaintiff asserts that the employment agreement consisted of the letters from defendant to plaintiff which are dated August 18, 1980; June 25, 1981; and January 12, 1982, together with commercially reasonable implicit terms. For purposes of this motion, defendant agrees that these letters constitute the employment contract. Accordingly, for the purpose of ruling on the motion for summary judgment, it will be assumed, as plaintiff asserts, that the employment contract in effect when he was terminated was the three letters.

Employment Term

If the three letters are unambiguous the Court may construe them to determine whether, as a matter of law, they provided for a specific term of employment. Harber v. Ohio National Life Ins. Co., 512 F.2d 170 (8th Cir.1975); Commerce Trust Co. v. Howard, 429 S.W.2d 702 (Mo.1968). Whether a contract is ambiguous is a question of law for the Court. Slotkin v. Willmering, 464 F.2d 418, 422 (8th Cir. 1972) . “A contract is ambiguous only when it is reasonably susceptible of different constructions. In determining whether or not there is such an ambiguity ... the whole instrument must be considered.” J.E. Hathman, Inc. v. Sigma Alpha Epsilon Club, 491 S.W.2d 261, 264 (Mo. en banc 1973). Presumptively, the intent of the parties to a contract is expressed by the natural and ordinary meaning of the language. Even seeming contradictions must be harmonized away if that is reasonably possible. State Mutual Life Assur. Co. of Worchester v. Dischinger, 263 S.W.2d 394, 401 (Mo.1953).

Each of the three letters comprising the employment contract describes Anelsmo’s “income package” or “compensation agreement.” Each letter provides that Anselmo would receive a base or “guaranteed salary” plus a potential bonus. For instance, the relevant portion of the January 12, 1982, letter provides:

Pursuant to our telephone conversation of January 6, the following will form the basis of your 1982 and 1983 compensation agreement.
Effective January 1, 1982 you will be compensated at a level annual salary of $55,000. This level of compensation is effective through the end of 1982 and 1983. In addition to the guaranteed salary in both years, you will be eligible for a potential bonus. In 1982, the potential bonus would be equal to $10,000 and in 1983, the potential bonus would be equal to $20,000. The respective maximum salary in each year would be $65,000 in 1982 and $75,000 in 1983. At the end of the 1983 year, you will effectively be on the full contract.
The following visualizes your 1982 and 1983 income arrangements:
1982 Guaranteed Salary $55,000
Potential Bonus 10,000
$65,000
1983 Guaranteed Salary $55,000
Potential Bonus 20,000
$75,000
1984 Full Contract
You may decide at anytime to go on full formula without the benefit of the guaranteed base or bonus at any point during the 1982 or 1983 year____

Plaintiff contends that defendant employed him for a three year term, because the contract projects salary over three years and because it states that a specific salary is “guaranteed.” Defendant argues that the term “guaranteed” is used to distinguish defendant’s base salary from additional compensation plaintiff could receive from bonuses and that a writing projecting salary over three years does not establish a contract for that term.

Plaintiff’s employment contract was not ambiguous simply because the parties disagree about the meaning of “guarantee” as it is used in the contract and about the significance of projected salary figures. Mickelberry’s Food Products Co. v. Haeussermann, 247 S.W.2d 731, 738 (Mo. 1952); J.E. Hathman, 491 S.W.2d at 264.

The term “guaranteed salary” used in the contract does not mean that plaintiff’s employment is guaranteed for a specified number of years, but rather addresses the level of salary which plaintiff would receive regardless of his level of performance. “Guarantee” distinguishes Anselmo’s base salary from the bonus he would receive if warranted by his performance.

Furthermore, an agreement which merely sets out levels of salary over a period of years does not amount to a contractual undertaking to employ that person for those years. In Campbell v. Sheraton Corp. of America, 363 Mo. 688, 253 S.W.2d 106, 110 (1952), the Court addressed an employment letter which provided that “[t]he salary is to be $12,000 per year and maintenance for yourself and family.” Id. 253 S.W.2d at 107. The Supreme Court of Missouri held that the letter fixed the salary but did not fix the duration of employment. Id. 253 S.W.2d at 110. Similarly, in Young v. A-T-O, Inc., 484 F.Supp. 626, 628 (E.D.Mo.1980), the Court concluded that language in an employment agreement charting pay levels for five years did not amount to an agreement to employ Young for that length of time. Therefore, in the instant case, the description in the three letters of Anselmo’s future compensation did not imply that defendant had agreed to employ plaintiff for any term.

Oral Agreement for Definite Term

Anselmo contends that Manufacturers Life orally agreed to a three-year contract of employment. This agreement was purportedly made at a pre-employment luncheon meeting with Gordon Woodward of Manufacturers Life. Defendant asserts that proof of such an oral contract would violate the statute of frauds.

Mo.Rev.Stat. § 432.010 (1952) provides that “[n]o action shall be brought ... upon any agreement that is not to be performed within one year from the making thereof, unless the agreement ... shall be in writing.” In Satterfield v. Missouri Dental Ass’n., 642 S.W.2d 110, 112 (Mo. App.1982), the Court held that an employment agreement for a definite term in excess of one year was subject to the statute of frauds. A motion to dismiss should be granted if it “appears that the contract in question is unwritten and the plaintiff fails to plead facts which would take the contract out of the operation of the statute.” Id.

The alleged oral agreement to hire plaintiff for three years could not be performed within one year. Therefore, unless the statute of frauds is complied with, plaintiff cannot sue on the alleged oral agreement.

The three letters relied upon by plaintiff do not satisfy the requirements for the statute of frauds. In Young, 484 F.Supp. at 628, the Court held that to comply with the statute of frauds a writing must contain all of the essential terms of the agreement, one of which is the duration of the employment relation. Here, the writings relied upon by plaintiff do not include the duration of the employment relationship.

Anselmo cannot supply this missing term by proof of the alleged oral agreement. “The omission of an essential term of an agreement within the statute of frauds cannot be supplied by oral testimony because the statute requires not only a portion but all of the specified essential elements of the agreement to be in writing.” Campbell, 253 S.W.2d at 110.

For the reasons stated above, defendant’s motion for summary judgment on plaintiff’s wrongful discharge cause of action (Count I) will be granted.

PRIMA FACIE TORT

Count II of plaintiff’s complaint alleges that:

2. Defendant, by and through its agents, in terminating plaintiff intended to inflict and did inflict injury on plaintiff in addition to and in excess of actual termination of plaintiff’s employment.
3. That said additional injury was intentionally, knowingly and willfully inflicted upon plaintiff by defendant’s agents in furtherance of the business interests of defendant and in the course and scope of said agent’s employment by defendant.

The parties agree that plaintiff is attempting to allege a prima facie tort. The elements of a prima facie tort are:

1) an intentional lawful act by the defendant;
2) an intent to cause an injury to the plaintiff;
3) injury to the plaintiff; and
4) an absence of any justification or an insufficient justification for the defendant’s act.

Porter v. Crawford & Co., 611 S.W.2d 265, 268 (Mo.App.1980).

In his complaint, plaintiff did not plead the element of “absence of justification or insufficient justification.” In Lohse v. St. Louis Childrens Hospital, Inc., 646 S.W.2d 130, 131 (Mo.App.1983), the Court held that failure to plead this element was fatal to a cause of action for prima facie tort and that dismissal of the court by the trial court was appropriate.

However, even if plaintiff had pled absence of justification or insufficient justification in his complaint, plaintiff cannot establish this element as a matter of law. In Lundberg v. Prudential Ins. Co. of America, 661 S.W.2d 667, 671 (Mo.App.1983), the Court stated that prima facie tort would not be used to convert an employment-at-will into a relationship which could be terminated only for cause. The Court stated that

[jjudicial invasion of management decisions and impingement upon agreed terms of employment emerge, when, as here, the prima facie tort doctrine is resorted to by a discharged employee to impose liability against an employer where the employment is terminable at will. Under an unadulterated ‘balancing of interests’ process, conversion of employment relationships terminable only for good cause under the guise of prima facie tort will have to be postulated on facts vastly different from those presented by the instant case.

Id.

In both Lundberg and this case, the plaintiff was a staff sales manager for an insurance company. Neither plaintiff had an employment contract for a specific term. Although Lungberg was demoted to Sales Agent, while Anselmo was terminated, both plaintiffs contend that the action was wrongful and without cause.

Therefore, for the reasons stated above, defendant’s motion for summary judgment on plaintiff’s prima facie tort cause of action (Count II) will be granted.

FRAUDULENT MISREPRESENTATION

In Count III of plaintiff’s Second Amended Complaint, plaintiff seeks to allege a cause of action for fraudulent misrepresentation based on his contention that he was told at the time he was hired that he would be guaranteed a salary for three years.

“The general rule is that fraud must relate to a present or pre-existing fact, and cannot ordinarily be predicated on representations or statements which involve mere matters of futurity or things to be done or performed in the future.” Yerington v. Riss, 374 S.W.2d 52, 58 (Mo. 1964). Also, an action for fraud cannot be based upon a mere promise. Reed v. Cooke, 331 Mo. 507, 55 S.W.2d 275 (banc 1932).

The Supreme Court of Missouri in Godwin v. Dinkier St. Louis Mgt. Corp., 419 S.W.2d 70 (Mo.1967), squarely addressed the consequences of an allegedly false promise to employ someone for a term. In that case, defendant told plaintiff that he would be employed for at least five years. The Court characterized such a representation as a “mere promise” and affirmed the trial court’s summary judgment. “Fraud cannot be predicated upon a mere promise even though accompanied by a present intention not to perform it on the ground that even under such circumstances the promise is not a misrepresentation of an existing fact.” Id. at 72-73.

In the instant case, defendant allegedly promised to employ plaintiff for three years. Based on Godwin, this is not a representation of fact. Therefore, plaintiff cannot use it as the basis of a fraudulent misrepresentation claim.

For the reasons stated, defendant’s motion for summary judgment on plaintiff’s fraudulent misrepresentation cause of action will be granted.

THE RELEASE

Plaintiff does not deny that he signed a letter of resignation and that the letter discharges defendant from any liability arising out of his employment. However, plaintiff contends that the release is invalid because no consideration was given for the release and because the release was obtained by duress.

Where there is no dispute as to the execution of a release, the burden is on the party attacking the release to establish his invalidity. McMahon v. Meredith Corp., 595 F.2d 433, 438 (8th Cir.1979); Jenkins v. Simmons, 472 S.W.2d 417, 420 (Mo.1971).

Consideration for the Release

A release is a “written contract of compromise and settlement.” Stahly Cartage Co. v. State Farm Mutual Auto. Ins. Co., 475 S.W.2d 438, 441 (Mo.App. 1971); Foster v. Aetna Life Ins. Co. of Hartford, Conn., 352 Mo. 166, 176 S.W.2d 482, 485 (Mo.1943). It must be supported by consideration and once executed “the releasee’s cause of action is barred and he is estopped from proceeding against the releasor____” Lugena v. Hanna, 420 S.W.2d 335, 340 (Mo.1967); Gee v. Nieberg, 501 S.W.2d 542, 544 (Mo.App.1973). Grand Motors, Inc. v. Ford Motor Co., 564 F.Supp. 34, 39 (W.D.Mo.1982).

Plaintiff contends that there was no valid consideration because he had been employed for three years. Therefore, according to plaintiff, at the time he signed the resignation letter, he had a liquidated claim to $80,000, the amount remaining to be paid on his three-year contract. Plaintiff relies on Western Life Ins. Co. v. White, 331 S.W.2d 19, 26 (Mo.App.1959) for the proposition that release of a liquidated claim is not binding without independent consideration. Plaintiff’s statement of the law is correct, but his application of this principle to this case is erroneous.

A claim is unliquidated if (1) the parties do not agree on the amount of the alleged claim; or (2) the alleged claim is based on the disputed or doubtful interpretation of a contract. Hall v. Knapp, 552 S.W.2d 299, 303 (Mo.App.1977). Anselmo’s claim to the balance allegedly due him under his interpretation of the employment contract is unliquidated under either of the Hall tests. The parties do not agree on the amount of plaintiff’s claim. In his complaint, Anselmo requested $200,000 in actual damages under Counts I and II. In his opposition to defendant’s motion for summary judgment, plaintiff states that his claim is approximately $80,000. In response to interrogatories by defendant, plaintiff states that the amount of his loss of income due to loss of guaranteed amounts under the contract is not yet computed. Defendant contends that it owes Anselmo nothing.

Furthermore, plaintiff's claim is based on a disputed interpretation of the employment contract. Plaintiff contends that there was an employment contract that guaranteed employment for a specified term. Defendant contends that the parties never agreed to the length of time plaintiff would be employed. Therefore, plaintiff’s contention that he had a liquidated claim to more money than was paid to him after he signed the letter is without merit.

Duress

According to plaintiff’s version of what happened on June 28, 1982, and June 29, 1982, he was forced to sign the release because of the pressure created by defendant. Defendant’s representative, Scott, had come from Toronto. After the meeting between Scott and plaintiff, plaintiff was forbidden to return to the branch office. Plaintiff was offered the resignation letter and told to sign it. If plaintiff signed the resignation letter, he would receive four months severance pay. If he refused to sign the release, he would not receive severance pay and he would be denied references for future employment. Scott then went to the branch office and told the employees that Anselmo had resigned. This made it too embarrassing for Anselmo to return to work. Anselmo did contact a lawyer but he received no legal advice. Anselmo delivered the signed release to defendant on the following day.

This Court may decide on a motion for summary judgment whether certain facts are sufficient to constitute duress. In Oskey Gasoline & Oil Co., Inc. v. Continental Oil Co., 534 F.2d 1281, 1286 (8th Cir.1976), the Court stated that “[i]n general, whether the particular facts, as alleged, are sufficient to constitute a defense of duress is a matter of law for the Court while the question of whether the facts alleged actually exists is a jury issue.” Having accepted as true plaintiff’s version of the facts for purposes of this motion, the legal issue of whether these facts constitute duress is properly presented.

Whether sufficient duress exists to invalidate a release depends on “whether or not the victim was so acted on by threats of the person claiming the benefit of the contract as to be bereft of the quality of mind essential to the making of a contract, and whether or not the contract was thereby obtained.” Wolf v. St. Louis Public Service Co., 357 S.W.2d 950, 954-55 (Mo.App.1962). The party tendering the release must have engaged in some wrongful act which rendered releasor unable to exercise his free will. Grant Renne & Sons, Inc. v. J.E. Dunn Const. Co., 633 S.W.2d 166 (Mo.App.1982). Acceptance of a settlement offer as a result of circumstances and conditions over which the defendant had no control, such as the releasor’s “financial necessities,” does not constitute duress. McCormick v. City of St. Louis, 166 Mo. 315, 65 S.W. 1038, 1043-44 (1901).

Here, plaintiff’s termination was not wrongful because plaintiff was an employee-at-will. The lawful termination of an employee may generate stress but not legal duress. The refusal of defendant to grant severance pay unless the release was signed is not a wrongful act because plaintiff had no right to severance pay. Similarly, defendant’s refusal to provide a favorable referral letter was not a wrongful act that constituted duress because plaintiff had no right to a favorable referral letter.

Even if Scott had informed the other employees that Anselmo had resigned before the release was executed, duress has not been shown. Anselmo may have suffered some embarrassment as a result of Scott’s actions, but this was not a coercive act directed at forcing defendant to sign the release.

Plaintiff contends that Scott told him that he must sign the release. This would not amount to duress because plaintiff did not sign the release until the following day. Plaintiff had ample opportunity to consider whether he would sign the release during this period. In fact, he even took the release to an attorney although he denies that he got any legal advice. Plaintiff’s facts do not indicate that whatever pressure Scott exerted deprived him “of the quality of mind essential to making of a contract” as required by the Wolf case. Plaintiff has not alleged any facts which would constitute wrongful or oppressive acts by the defendant. If defendant acted wrongfully in this case, it could only be because it wrongfully terminated plaintiff’s employment. That alone cannot support a finding of duress. Although plaintiff may have signed the release because he desperately needed money, McCormick makes it clear that the financial necessities of the plaintiff are not a sufficient basis for the Court to find duress.

Voluntary settlement of disputes, accompanied by releases, must be encouraged. Not only are the parties to the dispute benefitted by knowing where they stand and by avoiding litigation expenses, but our strained judicial system need not provide a method for resolving the dispute.

In this case, defendant attempted to resolve this dispute in June, 1982, by offering to pay to plaintiff a substantial amount of money. Plaintiff accepted the money without reservation. The circumstances presented by plaintiff for wanting to avoid the release do not justify interfering with the parties’ joint efforts to settle their disputes.

Accordingly, even if summary judgment were inappropriate on some of plaintiff’s counts, plaintiff’s release effectively foreclosed defendant’s liability on all counts in this lawsuit.

Order

For the reasons stated, defendant’s motion for summary judgment is granted and judgment is rendered in favor of defendant and against plaintiff on all counts of plaintiff’s complaint. This case is hereby dismissed with prejudice at plaintiff’s cost. The pretrial conference scheduled for September 26, 1984, at 2:30 p.m., is cancelled.

IT IS SO ORDERED.

      . Although defendant contends that Anselmo’s employment contract is the "Branch Manager’s Agreement” which was signed by plaintiff on April 2, 1981, as supplemented by the compensation letter dated April 2, 1981, defendant concedes plaintiffs position for purposes of ruling on this motion that the contract is made up of the documents suggested by plaintiff.

      . Defendant asserts that the $13,933.33 was paid only for the release and not because Anselmo was entitled to any severance pay as a matter of right. Plaintiff does not contend that he had any claim for severance pay except as a result of the resignation letter.


source: Caselaw Access Project

author: CARL B. RUBIN, Chief Judge.

license: Public Domain

text:
    FEDERAL NATIONAL MORTGAGE ASSOCIATION, Plaintiff, v. Dominga P. RATHGENS, et al., Defendants.
    No. C-1-83-575.
    United States District Court, S.D. Ohio, W.D.
    Sept. 20, 1984.
    Richard D. DeBlasis, Cincinnati, Ohio, for plaintiff.
    Stephen H. Olden, Legal Aid Society, Cincinnati, Ohio, for defendant Rathgens.
    Nicholas J. Pantel, Asst.U.S.Atty., Cincinnati, Ohio, for HUD.
   MEMORANDUM OPINION AND FINAL JUDGMENT

CARL B. RUBIN, Chief Judge.

This case originally arose out of a foreclosure action brought in the Common Pleas Court of Hamilton County, Ohio. Defendant mortgagor impleaded the United States Department of Housing and Urban Development (“HUD”) as insurer of the mortgage. HUD then removed the entire case to this Court under 28 U.S.C. § 1441 (1982). The case is properly before the Court pursuant to 28 U.S.C. § 1331 (1982) since resolution of the dispute requires the application of the National Housing Act (NHA), 12 U.S.C. § 1701 et seq. (1982). The facts are not in dispute.

Rathgens purchased her home in 1975 for $17,500. Her $17,000 mortgage was insured by HUD under section 203 of the NHA. 12 U.S.C. § 1709 (1982). Mortgage payments were $175 per month.

On August 18, 1981, Rathgens began a marriage that ended in divorce in August, 1982. During the first four months of their marriage, Rathgens’s husband amassed substantial debt in her name, including the purchase of a 1981 Ford pickup truck, a 1981 Grand Prix and credit card debts. The couple separated in late January, 1982.

In the divorce proceedings, Probate Court found Rathgens’s husband guilty of gross neglect and extreme cruelty. The property settlement gave him the truck and held him liable for the credit card debts. Rathgens received the house and the Grand Prix. The truck was returned to Ford in August, 1982 creating a deficiency of $1,382.15 for which Rathgens is liable. The divorce decree ordered Rathgens’s ex-husband to defend and indemnify Rathgens on that debt.

Four months into their short marriage, the husband’s “extreme cruelty” resulted in injuries that forced Rathgens to take sick leave from work for January through May of 1982. It was in January, 1982 that Rathgens began to fall behind in her mortgage payments. February’s payment was never fully paid.

The mortgagee sent Rathgens a Notice of Intent to Foreclose on June 18, 1982. In August, Rathgens petitioned HUD to accept assignment of her mortgage under the provisions of the NHA. At the time, she was making $135 a week as a bookkeeper at Sears and $90 a week in child support. HUD held a conference with Rathgens September 22, 1982 and denied her request September 30. On December 6, 1982, the mortgagee filed a foreclosure action in Common Pleas Court. Rathgens requested reconsideration by HUD on January 13, 1983 and submitted additional documentation. After reviewing the additional information, HUD again denied her request on January 31 and February 2, 1983.

The goal of the NHA is to provide a decent home and a suitable living environment for every American family. 12 U.S.C. § 1701t (1982). In furtherance of that goal, Congress established a Mortgage Insurance Program that enabled lenders to offer essentially risk-free mortgages to low income families at terms more favorable than they could get on the market. See e.g., 12 U.S.C. § 1709(b)(5) (1982). Congress also provided a Foreclosure Avoidance Program whereby HUD could help a mortgagor avoid foreclosure by acquiring the mortgage, suspending payments for up to 36 months, and refinancing the debt over an extended period of up to 10 years. Id. at § 1715u; 24 C.F.R. § 203.650 (19.83). Consistent with its Congressional mandate, HUD is required to acquire mortgages from mortgagors who meet six well-defined criteria. Brown v. Lynn, 385 F.Supp. 986, 998-99 (N.D.Ill.1974); Ferrell v. Pierce, 560 F.Supp. 1344, 1350 (N.D.Ill. 1983).

(a) The Secretary will accept assignments of mortgages insured under this part in order to avoid foreclosure when the following conditions are met:
(1) The mortgagee has informed the mortgagor that it intends to foreclose the mortgage;
(2) At least three full monthly installments due on the mortgage are unpaid after application of any partial payments which may have been accepted but not yet applied to the mortgage account.
(3) The property is the mortgagor’s principle place of residence. This criterion may be waived by the Secretary if the property has been leased or rented and the rental income has been applied to the mortgage delinquency or to effect repairs necessary to maintain the property in a safe and habitable condition or if such waiver is determined to be in the best interests of the Department.
(4) The mortgagor does not own other property subject to a mortgage insured or held by the Secretary. This criterion may be waived by the Secretary if the income from such other property is the mortgagor’s principle source of income.
(5) The mortgagor’s default has been caused by circumstances beyond the mortgagor’s control which render the mortgagor unable to correct the delinquency within a reasonable time or make full mortgage payments.
(6) There is a reasonable prospect that the mortgagor will be able to resume full mortgage payments after a period of reduced or suspended payments not exceeding 36 months and will be able to pay the mortgage in full by its maturity date extended, if necessary, by up to 10 years.

24 C.F.R. § 203.650 (1983).

HUD based its denial of Rathgens’s assignment request on criteria five and six. HUD stated in its initial rejection letter of September 30, 1982 that:

[Y]ou did not meet the criterion that the default has been caused by circumstances beyond your control which rendered you financially unable to cure the delinquency within a reasonable time or make full mortgage payments. Overuse of credit and improper priorities appear to be the real problem.
You do not meet the criterion that there is a reasonable prospect that you will be able to resume full mortgage payments after a temporary period of reduced or suspended payments, not exceeding 36 months, and will be able to pay the mortgage in full by its original maturity date extended, if necessary, up to 10 years. Large deficiency on truck repossession, car payments and other credit obligation are prohibitive. A substantial increase in earnings cannot be projected.

Through counsel, Rathgens submitted additional documentation and a proposed repayment plan. The additional evidence showed that.her wages had increased to $185 per week, that she had unsuccessfully gone to great lengths to reduce her $286.71 per month car payments by trading in or trading down her Grand Prix, and that her son was graduating from vocational school and would likely be employed soon. Her proposed repayment plan involved reduced payments of $125 per month for 12 months, resumption of full payments thereafter, and a short extension of time to cover whatever deficiency remained.

HUD rejected Rathgens’ proposed plan stating that after reviewing the entire file again, its position was unchanged. The January 31 letter stated:

There was no new evidence submitted that we were not aware of. We can accept the fact that her personal injuries were due to circumstances beyond her control. However, our decision was based on the apparent overuse of credit. This account was already delinquent when the qualifying circumstances occurred. Our analysis indicates that even if she remained on the job, her income was not sufficient to cover living expenses and credit accounts, let alone mortgage payments. The car payments alone were $286.00 and were current at the time of her office conference, whereas her mortgage payment of $175.00 was six months in arrears. Her request that HUD suspend the mortgage payments for 12 months while she pays for the car indicates improper priorities.

In reviewing HUD’s decision to deny Rathgens’s mortgage assignment request, the first task incumbent upon this Court is to determine the appropriate standard of review. The Administrative Procedure Act (APA) provides that “[a] person suffering legal wrong because of agency action, is entitled to judicial review thereof.” 5 U.S.C. § 702 (1982). “Agency action” includes “the whole or a part of an agency grant of money, assistance, license, authority, exemption, exception, privilege, or remedy.” Id. §§ 551(11), 551(13), 702. See Newbury Local School District Board of Education v. Geauga County Metro. Housing Authority, 732 F.2d 505, 507 (6th Cir.1984). HUD’s continued subsidy of Rathgens’s mortgage qualifies as “assistance.” Such informal agency action is reviewable under 5 U.S.C. § 706(2)(A) (1982). See Federal Property Management Corp. v. Harris, 603 F.2d 1226, 1230 (6th Cir. 1979); Anderson v. United States Dept. of Housing and Urban Development, 701 F.2d 112, 113 (10th Cir.1983).

Under section 706(2)(A), an agency action must be upheld unless it is found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A) (1972). “Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The Court is not empowered to substitute its judgment for that of the agency.” Citizens To Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971). The Court is to decide only whether the agency’s decision was based on a consideration of relevant factors and whether there has been a clear error of judgment. Id.; National Steel Corp. v. Gorsuch, 700 F.2d 314, 320 (6th Cir.1983).

HUD denied Rathgens’s request because it found that she failed to meet two of its eligibility criteria. First, HUD found Rathgens’s default was not caused by circumstances beyond her control. 24 C.F.R. § 203.650(5) (1983). While acknowledging that Rathgens’s injuries were “qualifying circumstances” under the regulations, and while noting that the account was not in default at their inception, HUD stated that “even if she remained on the job, her income was not sufficient to cover living expenses and credit accounts, let alone mortgage payments.” HUD thus considered overextension of credit the cause of the default. Rathgens on the other hand, argued that the default was caused by her injuries.

Determining the specific cause of a particular event is always a difficult proposition. It demands especially close attention to relevant facts. Both parties have pointed out a cause for the default but they have overlooked the cause of both their causes and the cause most relevant to Congressional intent. It was Rathgens’s torturous four-month marriage that caused the divorce, caused the injuries, caused the over-extension of credit, and caused the default. For seven years prior to her unfortunate marriage, Rathgens by herself was able to raise three children and make her house payments on an income that approached the poverty level. Along came a man who, in four short months, plunged her deeply into debt and beat her so badly she could not work for 14 weeks. These “circumstances” were the Congressionally mandated terminus of HUD’s inquiry.

When Congress enacted the NHA, it intended to provide a decent home and suitable living environment for every American family. 12 U.S.C. § 1701t (1982). When Congress enacted the Foreclosure Avoidance Program, its intent in imposing the condition that the default be caused by circumstances beyond the mortgagor’s control was to direct the Secretary’s attention to “deserving homeowners in hardship cases.” S.Rep. No. 924, 86th Cong., 1st Sess. Reprinted in 1959 U.S.Code Cong. & Ad.News 2844, 2853. Instead of finding its directive in the intention of Congress, HUD has adopted a “prudent lender” standard for administering the foreclosure avoidance program. Brown v. Lynn, 385 F.Supp. 986, 1000 (N.D.Ill.1974). This standard is contrary to the plain desires of Congress. Administration of the NHA in a “prudent lender” fashion subverts the very purpose of the Mortgage Insurance and Foreclosure Avoidance programs. “Prudent lenders” service credit-worthy mortgagors. It is HUD’s role under the NHA to insure the risky mortgages of low-income mortgagors that “prudent investors” will not take, and to accept assignment of risky mortgages whose mortgagors are experiencing temporary problems. Rathgens is such a “deserving” mortgagor experiencing temporary hardship.

Read in light of Congress’s intent and HUD’s mandate, Rathgens’s default was clearly caused by circumstances beyond her control and HUD made a clear error in judgment by focusing solely on her honeymoon spending spree. HUD’s own guidelines direct it to examples of “qualifying reasons for default” of which “losses of income due to divorce, illness or death” are included. HUD Handbook No. 4330.2 at 2-3.

As reflected in the HUD guidelines, the program apparently contemplated the necessary flexibility to deal with the inevitable temporary crises such as illness, temporary unemployment, etc., which all involved in the program knew would occur. Extensions, recasting of mortgages, purchase of the mortgages by the FHA prior to foreclosure and their subsequent recasting, all were obviously necessary to carry out the Congressional purpose as the guidelines recognize.

Brown v. Lynn, 385 F.Supp. 986, 1000 (N.D.Ill.1974). HUD ignored the effect of Rathgens’s divorce on the default and discounted the effects the loss of 14 weeks’ wages can have on a low-income family’s savings and financial stability. HUD’s mishandling of these relevant factors no doubt contributed to its error in judgment.

HUD’s second ground for denying Rathgens’s mortgage assignment was that there was not a reasonable prospect that Rathgens could resume full mortgage payments if the payments were reduced or suspended for up to 36 months and if the maturity date were extended up to 10 years. The reasons stated in the September 13 letter were (1) the large deficiency on the truck repossession, (2) car payments and other credit obligations, and (3) no projected substantial increase in earnings.

In her request for reconsideration, Rathgens submitted evidence on each of the cited reasons. She submitted the decree of divorce ordering her husband to defend and indemnify her on the truck deficiency and on 28% of her credit obligations. By Affidavit, she testified to an increase in monthly income of 22%. Finally, she listed several sources from which income could arise in the next 36 months. Her son was to graduate soon from vocational school with mechanic skills relieving her of substantial tuition and book expenses and providing a second income when he found work. Car payments were to end in less than 36 months. And she was trying to work more hours or find a second job.

To counter HUD charges .of “improper priorities,” Rathgens stated that she needed a car for transportation to work and for care of a diabetic child. Exhaustive attempts at trading in or trading down had not resulted in payments substantially lower than her present payments.

HUD’s only response to Rathgens’s new evidence of prospective repayment was that it had reviewed the information and found no reason to change its position. The only evidence in the administrative record that HUD considered the new evidence was a reduction in its income and expenses analysis sheet of the amount of Rathgens’s credit obligation by the amount owed to her by her ex-husband. Nowhere does it appear that HUD considered Rathgens’s substantial increase in income and her various prospects for even greater increases in the next 36 months. HUD’s own guidelines state:

Household Composition. Both the income and expenses of a household will change as members are added to or leave the household. Living expenses may decrease as teen-age children leave home or increase as new members are added. Income may decrease as children reach the legal adult age and AFDC or Social Security payments are terminated; conversely, income could increase as these members remain in the house and obtain full-time jobs.
Life Style: Each household distributes its income according to its own priority of needs. Some households prefer to hold housing expense to a minimum and spend a larger proportion of their income on recreation or non-essential items while others will forego non-essential items and invest a high percentage of their income in a home. The mortgagor’s past spending pattern should be reviewed carefully. If the mortgagor has demonstrated the ability to make regular mortgage payments, even when those payments represented a large percentage of his or her income, the mortgage should be given the benefit of doubt when evaluating ability to resume full payments and pay in full by the maturity date.

HUD Handbook No. 4330.2 at 2-6, 2-7 (emphasis added). These guidelines are mandatory on HUD, Ferrell v. Pierce, 560 F.Supp. 1344 (N.D.Ill.1983), but nowhere does it appear that HUD addressed these factors. HUD apparently did not consider Rathgens’s past spending patterns that included seven years of full mortgage payments. Nor did it consider her increased income or the list of prospective sources of new income.

Even if HUD had considered these factors off the record and rejected them, such rejection would be an abuse of its own guidelines that require that, “the mortgagor should be given the benefit of the doubt.” HUD Handbook No. 4330.2 at 2-6. Rathgens’s offer of reduced payments of $125 per month for 12 months followed by full payments and an extension of time to cover the deficiency was quite realistic and reasonable. Instead of giving Rathgens the benefit of the doubt, HUD’s accusation of “improper priorities” leads this Court to believe that HUD was penalizing Rathgens for a car purchase that she had little control over and no power to rescind. In evaluating Rathgens’s case under HUD’s own criteria, this Court holds that HUD again abused its discretion by not considering the relevant factors and committed a clear error of judgment if it had considered those factors.

In summary, this Court finds that HUD abused its discretion in denying Rathgens’s requested mortgage assignment. Rathgens’s Motion for Summary Judgment (doc. no. 11) is therefore GRANTED. HUD’s Motion for Summary Judgment (doc. no. 10) is, conversely, DENIED. Plaintiff, Mortgagee’s, Motion to Dismiss (doc. no. 5) is DENIED and HUD is ORDERED to accept assignment of the mortgage.

IT IS SO ORDERED.

      . A mortgage account is delinquent any time a payment is due and not paid. If the mortgagor fails to make any payment, or to perform any other obligation under the mortgage, and such failure continues for a period of 30 days, the mortgage shall be considered in default for the purposes of this part. 24 C.F.R. § 203.330 (1983). Rathgens finally paid the January 1 payment, so in her case, the 30-day period began February 1st thus making the default date March 3, 1982. See, Ferrell v. Pierce, 560 F.Supp. 1344 (N.D.Ill.1983).


author: ASPEN, District Judge:

text:
    Jonah OXMAN, on behalf of himself and numerous others who are similarly situated, Plaintiff, v. WLS-TV, Defendant.
    No. 84 C 4699.
    United States District Court, N.D. Illinois, E.D.
    Sept. 24, 1984.

      Gilbert Feldman, Cornfield & Feldman, Chicago, 111., for plaintiff.
    Daniel J. King, Richard C. Bollow, Jenner & Block, Chicago, 111., for defendant.
   MEMORANDUM OPINION AND ORDER

ASPEN, District Judge:

Jonah Oxman (“Oxman”) has brought this class action against his former employer WLS-TV (“WLS”) alleging religious and race discrimination under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and age discrimination under the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq. (“the ADEA”). WLS has asked that the Court dismiss the complaint or at least strike Oxman’s class allegations. For the reasons stated below, WLS’s motion is denied.

1. Facts

The facts recited below are taken from the complaint, which we assume to be true for the purposes of this opinion. Oxman, a 61 year old Jewish man, worked for WLS from July 1967 until January 27, 1984, when he was discharged. Shortly after being fired, Oxman filed a charge with the Equal Employment Opportunity Commission (“EEOC”). On the EEOC form titled “Charge of Discrimination,” Oxman checked the boxes for “religion” and “other” (for “age”) as the types of discrimination he was charging. The complete text of the “particulars” of his charge stated:

1. On the above date my I6V2 years of continuous employment with the employer was involuntarily terminated. Said action was religious and/or age based. My religion is Jewish. My age is 60.
2. The above discriminatory employment practice against me is part of a current pattern of discriminatory conduct against employees similarly situated based upon religion, race, and age.

On May 8, 1984, the EEOC sent Oxman a “right to sue” notice, and he filed the two-count complaint in this action on June 4, 1984.

Oxman’s complaint is about as brief and conclusory as his EEOC charge. Count I defines a purported plaintiff class of “Jewish and Black individuals employed by ... WLS-TV, in various management, on-camera, or other positions exempt from the unit of employees represented in collective bargaining pursuant to the Labor-Management Relation Act.” Oxman then copies without factual support, the four requirements for class certification of Fed.R.Civ.P. 23(a). Finally, he alleges that WLS discharged him on January 27, 1984, because he is Jewish, and that his termination was part of a WLS policy and practice of terminating or “constructively” terminating employees because of religion and race. Ox-man also alleges that WLS has a discriminatory policy with respect to job assignments, although his EEOC charge contained no such explicit allegations. Finally, in Count II Oxman raises an individual claim that WLS fired him because of his age, violating the ADEA.

WLS’s motion to dismiss can be divided into four general issues. The first two contentions challenge our subject matter jurisdiction: first, WLS argues that Ox-man’s allegations of discrimination based on race and job assignments exceed the scope of his charge to the EEOC, and thus he has not exhausted his administrative remedies with respect to those claims. Second, WLS asserts that Oxman, a White, lacks standing to raise a claim of discrimination against Blacks. Next, WLS postures its motion as one under Fed.R.Civ.P. 23(c)(1) and asks that the Court strike Ox-man’s class allegations for not complying with the prerequisites of Rule 23. Finally, WLS attacks Oxman’s age discrimination claim, arguing that his complaint fails to allege all of the essential elements of an ADEA claim. We will consider WLS’s arguments in order.

2. Exhaustion

The parties agree that the Seventh Circuit’s en banc opinion in Jenkins v. Blue Cross Mutual Hospital Insurance, Inc., 538 F.2d 164 (1976), cert. denied, 429 U.S. 986, 97 S.Ct. 506, 50 L.Ed.2d 598 (1976), defines how this Court should approach the exhaustion issue. Jenkins held that we should not dismiss allegations of discrimination so long as they are “ ‘like or reasonably related to the allegations of the [EEOC] charge and grow [...] out of such allegations.’ ” Id. at 167, quoting Danner v. Phillips Petroleum Co., 447 F.2d 159, 162 (5th Cir.1971). It is well established that this “like or reasonably related” test is broad and liberal, as it grows out of the policy of being “solicitous of the Title VII plaintiff.” 538 F.2d at 168 (citations omitted); see also Bowie v. Veteran’s Administration, 565 F.Supp. 81, 84 (N.D.Ill.1983) (Shadur, J.); Aponte v. National Steel Service Ctr., 500 F.Supp. 198, 201 (N.D.Ill.1980) (Moran, J.); Petty v. Peoples Gas Light and Coke Co., 86 F.R.D. 336, 341-342 (N.D.Ill.1979) (Bua, J.). But a counter vailing consideration sets a boundary for this liberal policy: the EEOC serves a conciliatory function and when a plaintiff’s complaint exceeds the scope of an EEOC charge, it denies the EEOC a chance to mediate between the parties. See, e.g., Carter v. Container Corporation of America, No. 79 C 3786, slip op. at 3 (N.D.Ill.1980) (Aspen, J.). This respect for exhaustion no doubt underlies the “reasonably related” test, which can be viewed as ensuring some initial EEOC involvement with a discrimination claim while removing technical obstacles from a Title VII plaintiff’s path to federal court. Essentially, the Jenkins test parallels the concept of notice pleading under Rule 8 and requires that the EEOC be put on general, broad notice of a claim.

With this standard in mind, we can easily dispose of WLS’s argument that Oxman’s allegation of race discrimination is not “like or reasonably related to” his EEOC charge. The EEOC charge explicitly alleges that WLS has a discriminatory policy based on race. Oxman’s complaint is plainly “reasonably related” to the EEOC charge on that score, and the EEOC certainly had general notice of that claim. Of course, Oxman’s allegation of race discrimination raises a host of other issues, which we discuss in the next two sections.

WLS’s argument that Oxman’s allegation of discriminatory job assignments exceeds the scope of the EEOC charge is more difficult. Unlike the race allegation, job assignments are not mentioned in the EEOC charge. Oxman concedes, and we agree, that a discriminatory pattern of job assignments not connected to a general discharge policy falls outside the scope of his EEOC charge. But Oxman argues that WLS has aimed its job assignment practices at the purported class of Blacks and Jews as part of its overall plan of discharging class members. In effect, he argues that the job assignment policy is one of WLS’s means to its end of discharging class members. Oxman implies that because the assignment scheme is a component of the broad race and religion policy, it is reasonably related to the EEOC charge which does mention that policy. Oxman stretches the Jenkins test to its limit, but given the breadth of the Jenkins standards, we hold that the allegation of job assignment discrimination is like or reasonably related to the EEOC charge of class-wide discrimination. See Aponte v. National Steel Service Ctr., 500 F.Supp. 198, 201 (N.D.Ill.1980) (Jenkins satisfied where court can construct a set of facts which can show a reasonable relation between the charge and the complaint); Bowie v. Veteran’s Administration, 565 F.Supp. 81, 84 (N.D.Ill.1983) (although plaintiff’s EEOC charge did not mention performance evaluations, it did mention promotion policy and thus Jenkins was satisfied because performance evaluation was one component of the accused policy). As in Aponte, the court has constructed a set of facts showing a reasonable relation between the job assignment allegation and the broad EEOC allegation; similarly, as in Bowie the present allegation of job assignments is one component of the policy accused in the EEOC charge. In sum, we hold that Ox-man has exhausted his administrative remedies.

3. Standing

WLS’s second challenge to the Court’s jurisdiction states that Oxman, a White, lacks standing to raise the claim of race discrimination. As WLS points out, standing is an issue of constitutioal dimension, as it touches the Article III judicial power:

[T]he standing question is whether the plaintiff has “alleged such a personal stake in the outcome of the controversy” as to warrant his invocation of federal court jurisdiction and to justify exercise of the court’s remedial powers on his behalf. [Citations omitted.] The Art. Ill judicial power exists only to redress or otherwise to protect against injury to the complaining party, even though the court’s judgment may benefit others collaterally. A federal court’s jurisdiction therefore can be invoked only when the plaintiff himself has suffered “some threatened or actual injury resulting from the putatively illegal action____” [Citation omitted.]

Warth v. Seldin, 422 U.S. 490, 498-99, 95 S.Ct. 2197, 2204-05, 45 L.Ed.2d 343 (1975). We agree with WLS that normally Oxman would have no standing to claim that WLS had discriminated against Blacks; their injury does not injure him directly. See, e.g., Badillo v. Central Steel & Wire Co., 495 F.Supp. 299, 305 (N.D.Ill.1980) (Shadur, J.) (white, hispanic male lacks standing to assert claims based on discrimination against women and Blacks). However, Ox-man asserts that WLS fired him as part of a comprehensive plan directed at both Blacks and Jews. Assuming this to be true, the “putatively illegal action” did work on actual injury on him, and he has standing to raise the race discrimination claim. As in the exhaustion context, we emphasize that this holding rests on the assumption that Oxman was fired as part of a single, comprehensive plan. This is the fact that distinguishes this case from the cases WLS cites. In addition, we note that this holding only addresses the Article III standing issue; the Court does not imply that Oxman, as a White, will necessarily satisfy the requirements of Rule 23(a) for class certification.

4. Opposition to Class Certification

WLS has styled its opposition to class certification under Rule 23(c)(1) as a “motion to dismiss.” Essentially, it challenges the class action allegations of the complaint, and we will treat this part of its motion as one to strike the class allegations.

The parties’ memoranda skirmish over whether a Rule 12 motion is a proper method to oppose class certification. Oxman has not yet moved for class certification and has only begun discovery to substantiate his class allegation. The class allegations of his complaint are skeletal, as they do little more than recite the requirements of Rule 23(a). Oxman predicts that discovery will add muscle to the skeletal class allegations. WLS argues that the class allegations are themselves deficient, and we need not wait for discovery to deny class certification.

Neither party argued in terms of Rule 23(c)(1), which commands the Court to rule on class certification “as soon as practicable after the commencement of an action brought as a class action.” A “practicable” time varies from case to case, and the district court has broad discretion to determine when the time is ripe. See generally 7A C. Wright and A. Miller, Federal Practice and Procedure: Civil, § 1785 (hereafter cited as “Wright & Miller”). “Sometimes the issues are plain enough from the pleadings to determine whether the interests of the absent parties are fairly encompassed within the named plaintiff’s claim, and sometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question.” General Telephone Co. of Southwest v. Falcon, 457 U.S. 147, 160, 102 S.Ct. 2364, 2372, 72 L.Ed.2d 740 (1982). While WLS raises some valid concerns about the appropriateness of class certification, we believe that its motion is, for the most part, premature. The lawsuit is in its infancy, as WLS has not filed an answer or responded to Oxman’s initial discovery requests. Virtually all of the cases cited by WLS concern challenges to class certification brought later in a suit, usually on a motion for class certification relying upon some affidavits and discovery. Oxman should be given a short amount of time to add meat to his class allegations. See, e.g., Eggleston v. Chicago Journeymen Plumbers, 657 F.2d 890, 895 (7th Cir. 1981), cert. denied, 455 U.S. 1017, 102 S.Ct. 1710, 72 L.Ed.2d 134 (1982).

We emphasize that our holding that it is too early to deny class certification does not necessarily mean we will later certify a class. WLS does raise some valid concerns which will have to be addressed in a forthcoming motion for class certification. For instance, the class definition in the complaint (Count I, ¶ 2) might prove to be too broad, as it seems to include WLS’s policy makers, as well as those employees affected by the alleged policy. We also wonder whether WLS’s alleged policy can have adversely affected enough Blacks and Jews to satisfy the numerosity requirement of Rule 23(a). Finally, WLS legitimately questions whether Oxman, a White, can alone prove to be an adequate representative for a class which purportedly includes many Blacks.

We anticipate that the parties will move expeditiously to complete discovery con-

ceming class certification. Accordingly, Oxman is ordered to move to certify the class on or before the next status hearing of this Court on October 26, 1984, at 10:30 a.m., assuming, as we do, that WLS will cooperate fully in discovery. We also expect that the parties will expeditiously complete discovery on the merits of the complaint, with an eye to a possible motion for summary judgment shortly after the class certification issue is resolved.

5. The ADEA Claim

WLS argues that Count II of Ox-man’s complaint fails to state a claim for relief under the ADEA because it does not allege all of the elements of a prima facie case. The relevant paragraph of the complaint merely alleges: “On or about January 27, 1984, Plaintiff, Jonah Oxman, was terminated by Defendant WLS-TV on the basis of his age which was 60.” Despite the brevity of the complaint, we believe it satisfies the minimal standards of notice pleading of Fed.R.Civ.P. 8(a)(2).

It is well established that a court should not grant a motion to dismiss unless it appears beyond doubt that a plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Hishon

v. King & Spalding, — U.S. -, -, 104 S.Ct. 2229, 2233, 81 L.Ed.2d 59 (1984); Conley v. Gibson, 355 U.S. 41, 45-46, 79 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). We must take as true, moreover, all material allegations of fact in the complaint. With these lax standards in mind, we consider WLS’s attack on Count II of Oxman’s complaint.

Plaintiff alleges that he was fired “on the basis of his age,” sixty. This alone is adequate, as it tracks the relevant language of the ADEA, which provides that an employer shall not “discharge any individual ... because of such individual’s age.” 29 U.S.C. § 623(a). The four elements which WLS cites are not mandated by statute; nor does WLS point to any cases which hold that the elements must be listed in a complaint. The elements are judicially created, originating in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973). See also Monroe v. United Air Lines, Inc., 736 F.2d 394, 403 (7th Cir.1984) (McDonnell-Douglas applies to the ADEA). If a plaintiff satisfies the four elements, he or she is entitled to an inference — based on common sense — of unlawful discrimination. But that does not mean that a plaintiff must always prove all four elements to prevail. McDonnell-Douglas, 411 U.S. at 802 n. 13, 93 S.Ct. at 1824. The McDonnell-Douglas prima facie case is neither “rigid, mechanized or ritualistic,” Furnco Construction Corp. v. Walters, 438 U.S. 567, 577, 98 S.Ct. 2943, 2949, 57 L.Ed.2d 957 (1978), nor the exclusive method for proving a claim of discrimination. See International Brotherhood of Teamsters v. United States, 431 U.S. 324, 358, 97 S.Ct. 1843, 1866, 52 L.Ed.2d 396 (1977). As the First Circuit has stated:

We think too that an individual complainant in some cases may be entitled to his day in court without having proven each element of the McDonnell Douglas prima facie case — as, for example, where he has presented direct evidence (other than the McDonnell Douglas elements) that supports an inference of discrimination. In short, McDonnell Douglas points to one, but surely not the only, way of establishing a legally sufficient prima facie case and of organizing and analyzing the evidence in a private discrimination case.

Loeb v. Textron, 600 F.2d 1003, 1017 (1979) (footnote omitted). Because Oxman does not necessarily have to prove the four elements later in the case, we believe that Oxman is not required to allege them in his complaint.

WLS’s argument confuses the minimum of what is usually necessary to survive a directed verdict or summary judgment motion with the minimum of what needs to be alleged in a complaint. It is conceivable that Oxman may later prove a set of facts entitling him to relief, under either a McDonnell Douglas theory or under a more direct theory. Cf. Home v. New England Patriots Football Club, 489 F.Supp. 465, 468-69 (D.Mass.1980) (plaintiff’s failure to allege facts supporting prima facie case not fatal, as it was not beyond doubt that he could prove no set of facts to support his claim). Accordingly, we deny WLS’s motion to dismiss Count II.

6. Conclusion

WLS’s motion to dismiss is denied. We also decline to deny class certification or strike the class action at this time. Discovery on the issue of class certification is to proceed forthwith and with all due diligence. Plaintiff is directed to file his motion for class certification, with supporting brief, on or before the next status hearing of the Court, which is hereby set for October 26, 1984, at 10:30 a.m. It is so ordered.

      . WLS makes much of the fact that Oxman did not check the box marked “race" on the EEOC form. This omission is not fatal, as the facts of Jenkins make clear. 538 F.2d at 168 (plaintiffs failure to check box for "sex" in EEOC charge not fatal because the particulars of her charge could be fairly read to allege sex discrimination). As the Fifth Circuit has punned:
      [W]e decline to hold that the failure to place a check mark in the correct box is a fatal error. In the context of Title VII, no one — not even the unschooled — should be boxed out.

        Sanchez v. Standard Brands, Inc., 431 F.2d 455, 463 (5th Cir.1970).

      . We emphasize that this allegation satisfies Jenkins only so long as the job assignment scheme forms an integral part of a general discharge policy aimed at the purported class. The complaint alleges the job assignment policy in more general terms, but our opinion here construes the meaning of that allegation narrowly. We also note that this exhaustion issue is jurisdictional in nature. Should discovery reveal that a discriminatory job assignment policy exists, but is unrelated to the alleged discharge policy, WLS may renew its motion to strike the job assignment allegation.

      . Our unpublished opinion in Carter v. Container Corp. of America, No. 79 C 3786 (N.D.Ill.1980), relied upon by WLS, is not on point. The charges which Carter had omitted in the EEOC but raised later in her complaint were not components of a broader comprehensive scheme, as alleged in this case. Rather, they were allegations of distinct types of discrimination practiced on her as an individual.

      . But cf. Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205, 209-10, 93 S.Ct. 364, 366-67, 34 L.Ed.2d 415 (1972) (white tenants have standing under Title VIII of Civil Rights Act to allege discrimination against black tenants, because they are denied "important benefits from interracial associations”).

      . Our decision here in part rests on the sound principle that early in the action the court should try to uphold the availability of the Rule 23 procedure. “[I]f there is to be an error made, let it be in favor [of] and not against the maintenance of the class action, for it is always subject to modification should later developments during the course of trial so require.” Esplin v. Hirschi, 402 F.2d 94, 99 (10th Cir. 1968), cert. denied, 394 U.S. 928, 89 S.Ct. 1194, 22 L.Ed.2d 459 (1969); Lewis v. Goldsmith, 95 F.R.D. 15, 18 (D.N.J.1982); Wright & Miller, § 1785. Since we are not certifying a class now, it is even more appropriate to keep the Rule 23 avenue available at this stage of the lawsuit.

      . In general, a plaintiff may make out a prima facie case of age discrimination by proving the following four elements:
      (1) The plaintiff is within the age group protected by the ADEA;
      (2) He was doing satisfactory work;
      (3) He was discharged despite the adequacy of his work; and
      (4) After he was discharged, his position remained open and the employer continued to seek applications from persons of plaintiffs qualifications.

        Smith v. World Book-Childcraft International, Inc., 502 F.Supp. 96, 99 (N.D.Ill.1980); see also Huhn v. Koehring Co., 718 F.2d 239, 243 (7th Cir.1983).

      . Rule 8(a)(2) requires only that a complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief.”


author: SHADUR, District Judge.

text:
    Emmaline KINDRED, Plaintiff, v. Margaret HECKLER, Secretary of Health and Human Services, Defendant.
    No. 84 C 1354.
    United States District Court, N.D. Illinois, E.D.
    Sept. 24, 1984.

      Helen R. Rogal, Chicago, 111., for plaintiff.
    Edward J. Moran, Asst. U.S. Atty., Chicago, 111., for defendant.
   MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

Emmaline Kindred (“Kindred”) has sued for judicial review of a final decision of the Secretary of Health and Human Services (“Secretary”) (1) reversing the denial of disability insurance benefits to Kindred for a closed period beginning April 29, 1981 but (2) finding that as of December 29, 1982 she was no longer disabled in the terms of Social Security Act (“Act”) § 223, 42 U.S.C. § 423 and therefore no longer entitled to receive benefits. Administrative- Law Judge Irving Stillerman (“AU Stillerman” or simply the “AU”) issued his decision March 7, 1983. Kindred then exhausted her administrative remedies in proper sequence (a process that resulted in the AU’s decision becoming Secretary’s) and brought this action against Secretary pursuant to Act § 205(g), 42 U.S.C. § 405(g).

Following the almost unvarying pattern in these cases, which come to this Court on the administrative record and a decision by Secretary, the parties have filed cross-motions for summary judgment. In a less frequent variation of the customary sequence of events, Kindred has moved alternatively for remand of her case to Secretary for the purpose of taking additional evidence. Kindred’s alternative attack rests on alternative premises:

1. No substantia] evidence supports the AU’s finding that Kindred was no longer disabled as of December 29, 1982 and could resume her past relevant work (this of course is the claimed predicate for summary judgment).
2. New evidence requires additional consideration at the administrative level (this is the reason asserted for remand).

Kindred’s first contention cannot be sustained on a careful review of the record as a whole. But the new evidence offered by Kindred, especially when viewed in combination with record evidence suggesting the chronic nature of her impairment, necessitates remand to Secretary for further consideration. Accordingly the parties’ cross-motions for summary judgment are denied and Kindred’s alternative motion for remand is granted.

Facts

Kindred, who was 28 years old at the time of the AU hearing, is a divorced woman with two years of college education. She was forced to leave her job as a payroll clerk in April 1981 because of severe back pain. In June 1981 and again in September 1981 she was admitted to Evanston Hospital for back surgery. Since then she has continued to undergo treatment for recurrent back pain.

On the question whether Kindred was no longer disabled as of December 29, 1982 AU Stillerman had before him Kindred’s testimony and several medical opinions:

1. Dr. Jack L. Robbins examined Kindred on March 31, 1982 and filed a report (R. 185) in which he stated her flexibility and mobility were essentially within normal limits. Dr. Robbins went on to say lumbosacral spine x-rays showed “no bony abnormality or disc narrowing at all at this time, no sclerosis is associated with reactive bone formation and in themselves they offer a very good prognosis” (R. 186). But Dr. Robbins also observed (R. 186) that despite the favorable prognosis Kindred:
is one of those people with more than one disc problem who has really disc disease as an ongoing phenomenon____ She will have some recurrent mild symptomatology interspersed with periods of more discomfort, but like the dictator, himself, there is no real reason for her to be disabled for more than the real acute periods of her illness.
2. Dr. Tomasz Helenowski examined Kindred in the course of treatment at the Evanston Hospital neurology clinic on July 23, 1982. He filed a Spinal Disorders report (R. 188), in which he indicated Kindred had low back pain radiating to the right leg as well as some corresponding sensory loss. He noted she was capable of unassisted ambulation for about two hours.
3. Dr. Helenowski also examined Kindred on August 27 and September 3, 1982. On November 3,1982 he described the course of her treatment and observed she continued to suffer back pain. At that time her most recent x-rays showed “mild” disc narrowing and some calcification of soft tissues in the area of Kindred’s prior surgery. Dr. Helenowski concluded (R. 193):
Due to the long course of continued pain and since the patient has had two lumbar laminectomies in the past, her prognosis for significant improvement is guarded.

Based upon those reports the AU found that as of the time of the hearing there was no evidence of continuing severe pathology. Additionally he noted Kindred’s testimony that she does the cooking and other light items around the house, helps with the shopping and drives an automobile for short distances. Moreover he observed during the hearing that she moved about with no apparent restriction or difficulty. His conclusion was succinctly stated (R. 16):

[A]n evaluation of the claimant’s complaints of pain in light of the observations of the Administrative Law Judge at the hearing, the medical evidence of record, the motivation and demeanor of the claimant, and the claimant’s own testimony as to her usual activities leads to the conclusion that the claimant’s complaints of pain are not entirely credible and that the claimant does not suffer from pain severe enough to preclude her past relevant sedentary clerical work.

On April 28, 1983 Kindred sought review of the AU’s decision by the Appeals Council (R. 5). She submitted in connection with her request a CT scan report (R. 8) as well as an additional medical report from Dr. Helenowski (R. 9) based on examinations of Kindred in January, March and April 1983. Dr. Helenowski then stated (a) Kindred’s pain had not diminished under the various drug therapies he had attempted and (b) he was considering hospitalizing her for a myelogram and perhaps further surgery. Dr. Helenowski concluded (R. 9):

[Kindred] presently cannot be expected to work, since she would need frequent periods of rest during which she would need to lie down to relieve her low back and leg pain.

On December 20, 1983 the Appeals Council denied Kindred’s request for review.

Substantial Evidence

It is standard lore that Secretary’s decision cannot be upheld unless it is supported by substantial evidence “considering the record as a whole.” Strunk v. Heckler, 732 F.2d 1357, 1359 (7th Cir.1984). Substantial evidence “means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971), quoting from Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 216, 83 L.Ed. 126 (1938). Kindred contends the AU’s finding that she was no longer disabled on December 29, 1982 fails that test because it did not properly take account of (1) Dr. Helenowski’s conclusion that Kindred continues to suffer severe back pain and (2) Kindred’s testimony that since her second surgery she has not had significant relief from her pain.

As to the first point, Kindred contends Dr. Helenowski is her treating physician, entitling his assessment of her condition to more weight than that of Dr. Robbins. See Allen v. Weinberger, 552 F.2d 781, 786 (7th Cir.1981). Nonetheless our Court of Appeals has recognized the real-world likelihood that a patient’s regular treating physician “might have been leaning over backwards to support the application for disability benefits.” Cummins v. Schweiker, 670 F.2d 81, 84 (7th Cir.1982).

ALJ Stillerman admirably accommodated those opposing principles. He observed that the physicians agreed in large part as to Kindred’s physical condition. Both found (1) her flexibility and mobility were essentially within normal limits and (2) x-rays evidenced the substantial success of her spinal surgery. Their disagreement lay in their estimates of the pain she continued to suffer. Faced with such opposing conclusions deriving from similar clinical findings, the AU properly declined simply to credit Dr. Helenowski’s opinion over Dr. Robbins’. Rather he looked to other evidence, including Kindred’s testimony as to her daily activities and his own observation of her movements at the hearing. On the basis of all that evidence considered together, the AU reasonably decided Kindred was not suffering from disabling pain.

In short the AU “merely balanced conflicting evidence as any factfinder must do, and found that the medical evidence against a finding of disability outweighed the showing that the claimant was disabled.” Strunk, 732 F.2d at 1364, quoting Peppers v. Railroad Retirement Board, 728 F.2d 404, 406 (7th Cir.1983). This Court is not free to reweigh that evidence de novo. Cummins, 670 F.2d at 84.

As to the second point, AU Stiller-man concluded Kindred’s own testimony that she continued to suffer severe back pain was not credible, again based upon her description of her daily activities and his observation of her movements at the hearing. Findings as to a claimant’s credibility are even less open to review by this Court than findings with respect to medical evidence. Cummins, 670 F.2d at 84. But even on a less deferential standard, the AU’s findings would surely survive review. AU Stillerman quite permissibly credited Kindred’s accounts of her daily activities plus his direct observation of her physical capabilities with greater weight than her own estimates of the severity of her pain — estimates that were open to question, given Kindred’s natural interest in obtaining disability benefits.

New Evidence

It is clear enough Kindred’s motion for summary judgment must be denied. That does not however mean Secretary’s motion must be granted — at least where as here there is good cause for remand to Secretary for the taking of additional evidence. There is a particular need to investigate the possibility of such remand in a case like this one where the record, while sustaining a finding of no disability as of a specific date, also contains strong evidence the claimant suffers from a chronic disease and future acute episodes are likely.

Act § 205(g), 42 U.S.C. § 405(g) provides: The court ... must at any time order additional evidence to be taken before the Secretary, but only upon a showing that there is new evidence which is material and that there is good cause for the failure to incorporate such evidence into the record in a prior proceeding____

In support of her motion for remand under that provision, Kindred submits the CT scan report and the letter from Dr. Helenowski (both of which accompanied her application to the Appeals Council), together with physicians’ notes from January and March 1983 and hospital records indicating two admissions for exacerbated back pain in May and August 1983.

There is a reasonable possibility such strong evidence of the continuation and worsening of Kindred’s condition may alter Secretary’s determination. Accordingly Kindred has met the statutory requirement of materiality. See Czubala v. Heckler, 574 F.Supp. 890, 901 (N.D.Ind.1983). Moreover, Kindred has met her burden of showing good cause for failing to incorporate the evidence into the prior record. All the events giving rise to the new evidence occurred after the AU hearing. Some of the items nevertheless became part of the record because Kindred, then acting without assistance of counsel, included them as part of her application for Appeals Council review. True enough the evidence of Kindred’s hospitalizations was not submitted, but they occurred after Kindred (acting on her own behalf) had filed her application for review. It is not unreasonable that Kindred was insufficiently informed in procedural terms to make a supplemental submission to the Appeals Council. See Czubala, 574 F.Supp. at 901-02.

Because Kindred has met the standard of Act § 205(g), her alternative motion for remand is granted. On remand the AU should consider any new evidence presented by Kindred in the context of a reevaluation of the record as a whole. It is entirely possible the new evidence will show the record (even as it stood on December 29, 1982) in a different light, prompting the AU to reweigh the reports of Drs. Helenowski and Robbins or to revise upward his estimate of Kindred’s credibility. In either instance a change in the December 29 determination might be appropriate.

Alternatively the AU might find, for example, that by the middle of 1983 Kindred’s condition had deteriorated sufficiently to requalify her for disability benefits. That finding might lead to no more than a brief gap in Kindred’s disability payments (between December 29, 1982 and the newly determined date).

Conclusion

Both parties’ motions for summary judgment are denied. Kindred’s alternative motion for remand for reconsideration in the light of new evidence is granted. Because ALJ Stillerman is familiar with this case, and because both his conduct of the hearing and his report reflect the open-mindedness essential to a hearing officer, there is no reason for the further hearing to be conducted by a different ALJ.

      . Kindred does not seek review of Secretary's disability decision as it affected her right to receive supplemental security income under Act § 1614(a)(3)(A), 42 U.S.C. § 1382c(a)(3)(A). See R. 10.

      . Kindred also argues remand is necessary because she lacked effective assistance of counsel at the hearing. It is true that a considerable portion of the hearing transcript is given over to wrangling between the AU and Kindred’s counsel, who arrived late for the hearing. Their dispute focused on the AU’s refusal to grant a continuance in the case. It does not appear to this Court either (a) that the AU was prejudiced in his evaluation of the record by that interchange or (b) that the attorney's late arrival impaired Kindred’s opportunity to develop the evidence on her behalf. This opinion therefore focuses upon Kindred’s two stronger arguments.