author: EDWARD WEINFELD, District Judge.

text:
    Steven SINGER and Dulce Reyes Singer, Plaintiffs, v. Emily Singer BELL; Michael Bell; Sheldon M. Liebowitz; Liebowitz, Liebowitz and Clark, Esqs., a partnership; Ron Bellistri; Gary "Doe"; "Richard Roe"; "John Doe # 1"; "John Doe # 2"; and the Sheriffs Department of Bergen County, New Jersey, Defendants.
    No. 83 Civ. 5765 (EW).
    United States District Court, S.D. New York.
    July 10, 1985.

      Eagle & Fein, P.C., New York City, for plaintiffs; Patrick J. Carr, New York City, of counsel.
    Weil, Gotshal & Manges, New York City, for defendants Emily Bell and Michael Bell; R. Peyton Gibson, Robbie E.B. Narcisse, New York City, of counsel.
   OPINION

EDWARD WEINFELD, District Judge.

Defendants Emily and Michael Bell move pursuant to Rule 12(b)(6), Fed.R.Civ.P., to dismiss plaintiffs’ claims against them for failure to state a claim upon which relief may be granted. In response, plaintiffs Steven and Dulce Reyes Singer move to amend their complaint, pursuant to Rule 15(a).

This action arises out of a decree of divorce entered in the Superior Court of the State of New Jersey in November 1972 which directed plaintiff, Steven Singer (“Singer”), to pay his divorced wife, Emily Singer Bell, a defendant herein, support for the benefit of their three children. Subsequent to the issuance of the divorce decree, plaintiff Singer failed to make child support payments to his former wife. In November 1980, an order was entered in the Superior Court of the State of New Jersey directing Singer to pay arrearages to defendant Emily Bell which totalled in excess of $48,000. Upon Singer’s willful failure to comply with the order, Emily Bell applied for and was granted a warrant for his arrest. About one year after the issuance of the warrant, the validity of which is not questioned, Singer was arrested by members of the Sheriff’s Department of Bergen County, New Jersey, on August 10, 1982, in Weehawken, New Jersey. At the time, it appears he was a resident of the State of New York.

The original and proposed amended complaints are based upon Singer’s contention that his former wife, Emily Bell, with the aid of others, enticed him into the jurisdiction of New Jersey from New York for the purpose of executing the arrest warrant. Singer claims that defendant Ron Bellistri telephoned him to arrange a business meeting to take place at the Silver Fox restaurant in Weehawken, New Jersey, and that, on August 10, 1982, Bellistri and two other unknown individuals met Singer at his business premises in New York and transported him by automobile to Weehawken where he was met at the restaurant and arrested by members of the Bergen County Sheriff’s Department. He was jailed overnight and, after a hearing the next morning before a judge of the New Jersey Superior Court, was released when his former wife admitted she had lured him into New Jersey. Singer claims that the conduct of the defendants deprived him of his constitutional rights under the Fourth, Fifth, and Fourteenth Amendments, and seeks compensatory and punitive damages pursuant to 42 U.S.C. §§ 1983 and 1985. In addition, plaintiff Dulce Reyes Singer (Singer’s current wife) claims damages for emotional distress and loss of consortium.

The Court has twice previously considered the precise factual contours of Singer’s claims in connection with motions to dismiss for lack of personal jurisdiction by Emily Bell’s attorneys, who represented her in procuring the arrest warrant, and by members of the Sheriff’s Department of Bergen County who executed the warrant. Familiarity with the Court’s opinions granting those motions is assumed.

DISCUSSION

Leave to amend a pleading is to be liberally granted under Rule 15(a) and, accordingly, the Court grants plaintiffs’ motion to amend their complaint. However, the defendants contend that the amended pleading is basically a restatement of the original complaint and, accordingly, urge dismissal of the amended pleading.

At the outset, it is apparent that two of Singer’s three federal claims must be dismissed. Singer claims that the defendants’ conduct in enticing him into New Jersey constituted a violation of 42 U.S.C. §§ 1985 and 1986. To recover under either statute, however, plaintiff must allege and prove a “class-based, invidiously discriminatory animus” as the source of the alleged constitutional deprivation. No such class-based animus has been alleged, nor could such a claim be advanced. Accordingly, Singer’s claims under sections 1985 and 1986 must be dismissed.

Singer also alleges a deprivation of his constitutional rights actionable pursuant to 42 U.S.C. § 1983. To state a claim under section 1983, Singer must allege not only that defendants Emily and Michael Bell deprived him of a right secured by the Constitution or laws of the United States, but also that, in doing so, they were acting under color of state law. Thus, even assuming that plaintiff could establish a violation of his constitutional rights, he may not prevail unless the actions upon which his claims are based are “fairly attributable to the State.” Section 1983 does not prohibit purely private conduct.

To act ‘under color of’ state law for section 1983 purposes, however, does not require that a defendant be an officer of the State. “It is enough that he is a willful participant in joint action with the State or its agents. Private persons, jointly engaged with state officials in the challenged action, are acting ‘under color of’ law for purposes of § 1983 actions.” Accordingly, plaintiff alleges that defendants Emily and Michael Bell conspired with members of the Bergen County Sheriffs Department (as to whom the action has already been dismissed) to entice him into New Jersey for the purpose of executing a warrant for his arrest.

Plaintiffs allegation of a conspiracy between the Bells and state officials to entice Singer into New Jersey is insufficient to establish the requisite state action. While the Court is required to assume the truth of specific factual allegations, mere conclusory or “general allegations of cooperation” between private individuals and specific state agents do not make out a claim of action taken under color of state law. As this Court noted in its prior opinion dismissing plaintiffs complaint against the Sheriff defendants for lack of personal jurisdiction, plaintiff has “fail[ed] to set forth a single evidentiary fact upon which an inference of knowing attachment to a conspiracy by the Sheriff defendants can reasonably be drawn____”

The newly amended complaint does not alter that conclusion. Plaintiffs allege that, at the hearing following Singer’s arrest, defendant Emily Bell, who had procured the arrest warrant, admitted she had lured her former husband into New Jersey. Plaintiff also alleges that Michael Bell, immediately prior to Singer’s arrest, described him to the arresting officers and furnished photographs of him to them.

That the aggrieved former wife, having secured a warrant for her former husband’s arrest pursuant to law and he having evaded service of that judicial process by absenting himself in another state, enticed him into the State of New Jersey does not constitute state action. Emily Bell was not acting ‘under color of law’ for the purposes of a section 1983 action. Her “luring” of plaintiff Singer into the state, assuming it was unlawful, was her own independent, individual action, and was not the exercise of a state created right or privilege. There is, and can be, no claim that the order of the Superior Court of the State of New Jersey which found Singer in contempt for failure to make payments for support of his children or the warrant of arrest issued pursuant thereto was defective or unconstitutional. There is no basis to support any claim of unauthorized conduct by the State or its officials. Emily Bell’s individual action, having resulted in plaintiff’s presence within the State of New Jersey, rendered him amenable to its lawful process — in this case — the execution of the warrant of arrest. She had the right to call upon the Sheriff to perform his duty to execute the lawfully issued warrant.

So,.too, when Michael Bell identified Singer as the individual named in the arrest warrant, he was not acting ‘under color of’ state law, but as an individual who sought to invoke legal means to execute a warrant legally issued. The fact that state officials were informed as to the time and place of Singer’s arrival in New Jersey and were given proof of his identity is insufficient, in itself, to raise an inference of purposeful participation by members of the Sheriff’s Department to assist in enticing Singer into New Jersey. From such an allegation, no inference may be drawn that there was a “meeting of the minds” between state officials and the Bells to lure Singer from New York. Receipt of the information as to an outstanding warrant for Singer’s arrest and proof of his identity obligated members of the Sheriff’s Department to do what in fact they did, which was to execute a validly issued warrant for Singer’s arrest. The Court finds that plaintiffs’ amended complaint fails to “specifically present facts tending to show agreement and concerted action” between the defendants and state officials. Accordingly, it is insufficient to state a claim under 42 U.S.C. § 1983 as against Emily and Michael Bell, there being no factual basis upon which it may be claimed that any alleged infringement of Singer’s constitutional rights may fairly be attributed to the State.

While the federal claims raised by Singer fail as a matter of law, still to be considered is the general allegation in the complaint that plaintiffs’ claims arise “under the laws of the State of New York.” Diversity jurisdiction is alleged and, therefore, to prevail upon their motion, the Bells must also establish that the complaint fails to state a claim under state law.

The Court notes at the outset that the reference to state law in the complaint is only a general one and no specific claim is made as to any particular state law cause of action. The plaintiffs have provided no response to defendants’ exhaustive analysis urging the rejection of plaintiffs’ possible claims. Nevertheless, a complaint may only be dismissed where it is found that under no set of facts can plaintiff sustain a legal claim. Accordingly, the Court considers the facts as alleged to determine whether there is any state law claim to which they may give rise.

Plaintiffs’ alleged claims of false arrest, malicious prosecution, or abuse of process are thwarted at the start by Singer’s concession that he owed the sums due to his former wife and that the arrest was effected pursuant to a valid warrant issued and sought for the purpose of collecting those sums. Further, although reference is made in the complaint to Singer’s “abduction” from New York, such a conclusory allegation does not state a claim of false imprisonment where it is acknowledged that Singer was informed of and agreed to a proposed business meeting (even though feigned) in New Jersey; and where there is no allegation that any threat or force was applied either to get him to agree to the meeting or to travel to the place of the meeting, or that he was restrained or coerced in any manner to force his appearance in New Jersey. In the absence of any allegation that he was forcefully removed from New York to compel his attendance at a prearranged meeting in New Jersey, the allegation of “abduction” is conclusory and without substance. Similarly, any claim for invasion of privacy based upon the alleged publication of the arrest is unavailing for an arrest is a matter of public record.

Finally, any claim of fraud must fail, even accepting Emily Bell’s admission that she induced Singer to come into the jurisdiction. An essential element of a claim of fraud is reliance upon the fraudulent representation. There is no basis here upon which Singer can assert justifiable reliance or belief that he would be immune from the prospect of execution of an arrest warrant he had succeeded in evading by remaining outside the jurisdiction of New Jersey. He knew that upon entry into New Jersey for a business meeting, whether real or fictitious, or for whatever reason, he was subject to arrest under a lawful warrant.

The plaintiffs, for the third time in resisting various motions to dismiss their complaint, urge that they be permitted pretrial discovery of the defendants, despite the fact that they argue, as in each prior instance, that their complaint states sufficient claims to withstand defendants’ motion under Rule 12. Pretrial discovery was sought when the New Jersey attorneys who were defendants moved to dismiss for lack of personal jurisdiction; and, when the New Jersey Sheriff defendants made their motions to dismiss the complaint, the Court found that

although this action has been pending for more that a year and plaintiffs' complaint against the attorneys was dismissed more than eight months ago, during which plaintiffs were fully aware of the factual shortcomings of their claim against the Sheriff defendants, they failed to depose the Sheriff defendants or other persons on the issue.

The plaintiffs’ current motion to amend was made only after the Bell defendants made their motion to dismiss. It is evident that plaintiffs were in possession of all facts essential to assert a valid claim, federal or state, if a factual basis therefor existed. The fact is that the amended complaint is merely a “restatement of the original complaint embellished with additional eonclusory allegations and a few factual allegations.” It is evident that the suggested pretrial discovery sought by plaintiffs is a renewed plea for a “hunting license to conjure up a claim that does not exist.”

Accordingly, plaintiffs’ claims against defendants Emily and Michael Bell are dismissed in their entirety.

So ordered.

      . Singer v. Bell, 599 F.Supp. 350 (S.D.N.Y.1984); Singer v. Bell, 585 F.Supp. 300 (S.D.N.Y.1984).

      . Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962). However, to the extent the amended complaint adds as a defendant Allen Gonzalez, an investigator with the Bergen County Sheriff’s Department, the motion is denied, this Court already having determined that the complaint lacks any factual basis for the assertion of personal jurisdiction over members of the Sheriffs Department. 599 F.Supp. 350 (S.D.N.Y.1984).

      . To recover under 42 U.S.C. § 1986, a claim under section 1985 must be stated. See Landrigan v. City of Warwick, 628 F.2d 736, 739 n. 1 (1st Cir.1980).

      . Griffin v. Breckenridge, 403 U.S. 88, 102, 91 S.Ct. 1790, 1798, 29 L.Ed.2d 338 (1971) ("The language requiring intent to deprive of equal privileges and immunities, means that there must be some racial, or perhaps otherwise class-based, invidiously discriminatory animus behind the conspirators’ action.”) (emphasis in original) (footnote omitted); see also United Bhd. of Carpenters & Joiners, Local 610 v. Scott, 463 U.S. 825, 103 S.Ct. 3352, 77 L.Ed. 1049 (1983).
      Even if the Court were to accept plaintiffs’ theory that membership in a class and class-based discriminatory animus are not necessary where state action or color of state law is alleged, see Selzer v. Berkowitz, 459 F.Supp. 347, 351-52 (E.D.N.Y.1978); but see Lesser v. Braniff Airways, Inc., 518 F.2d 538, 543 (7th Cir.1975), the Court’s disposition of Singer’s section 1983 claim illustrates that this theory would not in any event save his section 1985 and 1986 claims. See also United Bhd. of Carpenters & Joiners, Local 610 v. Scott, 463 U.S. 825, 103 S.Ct. 3352, 77 L.Ed.2d 1049 (1983).

      . Rendell-Baker v. Kohn, 457 U.S. 830, 835, 102 S.Ct. 2764, 2768, 73 L.Ed.2d 418 (1982); Flagg Bros., Inc. v. Brooks, 436 U.S. 149, 156, 98 S.Ct. 1729, 1733, 56 L.Ed.2d 185 (1978); Civil Rights Cases, 109 U.S. 3, 11, 3 S.Ct. 18, 21, 27 L.Ed. 835 (1883); Annunziato v. The Gan, Inc., 744 F.2d 244, 249 (2d Cir.1984).

      . Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 937, 102 S.Ct. 2744, 2753, 73 L.Ed.2d 482 (1982).

      . Cf. United States v. Barr, 295 F.Supp. 889, 891 (S.D.N.Y.1969) (criminal counterpart of section 1983; private conduct authorized by State).

      . Dennis v. Sparks, 449 U.S. 24, 27-28, 101 S.Ct. 183, 186, 66 L.Ed.2d 185 (1980); see Adickes v. S.H. Kress & Co., 398 U.S. 144, 152, 90 S.Ct. 1598, 1605, 26 L.Ed.2d 142 (1970); United States v. Price, 383 U.S. 787, 794, 86 S.Ct. 1152, 1156, 16 L.Ed.2d 267 (1966).

      . Glaros v. Perse, 628 F.2d 679, 685 (1st Cir.1980); see Annunziato v. The Gan, Inc., 744 F.2d 244, 251 (2d Cir.1984) (citing cases); San Filippo v. U.S. Trust Co. of New York, Inc., Til F.2d 246, 256 (2d Cir.1984), cert. denied, --- U.S. ---, 105 S.Ct. 1408, 84 L.Ed.2d 797 (1985); see abo Hobson v. Wilson, 737 F.2d 1, 30 (D.C.Cir.1984), cert. denied sub nom. Brennan v. Hobson, --- U.S. ---, 105 S.Ct. 1843, 85 L.Ed.2d 142 (1985).

      . Singer v. Bell, 599 F.Supp. 350, 353 (S.D.N.Y. 1984).

      . In the amended complaint, plaintiffs also allege "upon information and belief,” that Michael Bell is a "law enforcement officer,” and that Bell was present when the Bergen County Sheriffs Department arrested Singer. Such a claim does not suffice to provide the requisite state action where there is no allegation that Bell was a state law enforcement officer, and where there are no facts alleged from which it might be inferred he was acting in any way in an official capacity, if he were a state officer. See Layne v. Sampley, 627 F.2d 12, 13 (6th Cir.1980); Robinson v. Davis, 447 F.2d 753, 758-59 (4th Cir.1971), cert. denied, 405 U.S. 979, 92 S.Ct. 1204, 31 L.Ed.2d 254 (1972); Lawson v. Wiggins, 557 F.Supp. 500 (N.D.Ala.1983).

      . Under the Supreme Court's decision in Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 937, 102 S.Ct. 2744, 2753, 73 L.Ed.2d 482 (1982), a constitutional deprivation is only fairly attributable to the State when that "deprivation is caused by the exercise of some right or privilege created by the State or by a rule of conduct imposed by the State or by a person for whom the State is responsible." Dahlberg v. Becker, 748 F.2d 85, 90 (2d Cir.1984) (“A private party’s misuse of New York's Judiciary Law that causes plaintiff to be imprisoned overnight is not fairly attributable to New York State.”), cert. denied, — U.S. ---, 105 S.Ct. 1845, 85 L.Ed.2d 144 (1985). Here, as in Dahlberg, and unlike in Lugar, there is no allegation that the procedure by which Emily Bell obtained the warrant is constitutionally defective.

      . Sooner Prods. Co. v. McBride, 708 F.2d 510, 512 (10th Cir.1983); see cases cited supra note 9.

      . See Lugar v. Edmondson Oil Co., 457 U.S. 922, 940-41, 102 S.Ct. 2744, 2755, 73 L.Ed.2d 482; Dahlberg v. Becker, 748 F.2d 85, 90, 93 (2d Cir.1984), cert. denied, --- U.S. ---, 105 S.Ct. 1845, 85 L.Ed.2d 144 (1985); see also Annunziato v. The Gan, Inc., 744 F.2d 244, 251 (2d Cir.1984); Conway v. Village of Mount Kisco, New York, 750 F.2d 205, 214 n. 12 (2d Cir.1984).

      . Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957); Goldman v. Belden, 754 F.2d 1059, 1065-66 (2d Cir.1985).

      . Despite plaintiffs’ reference in the complaint to New York law, a New York court would likely look to New Jersey law, given that the claimed torts involve execution of New Jersey process within New Jersey. See Sims v. Union News Co., 284 A.D. 335, 131 N.Y.S.2d 837 (1st Dep’t 1954). Under either New York or New Jersey law, Singer’s claims are unavailing. See infra notes 17, 18, 19 & 20.

      . See Earl v. Winne, 14 N.J. 119, 101 A.2d 535, 539-40 (1953); Gambocz v. Apel, 102 N.J.Super. 123, 245 A.2d 507, 509 (1968); Baldwin v. Point Pleasant Beach & Surf Club, 3 N.J.Super. 284, 66 A.2d 62, 63 (1949); Broughton v. State of New York, 37 N.Y.2d 451, 335 N.E.2d 310, 373 N.Y.S.2d 87, 94, cert. denied sub nom. Schanbarger v. Kellogg, 423 U.S. 929, 96 S.Ct. 277, 46 L.Ed.2d 257 (1975); Williams v. Williams, 23 N.Y.2d 592, 246 N.E.2d 333, 298 N.Y.S.2d 473, 476 (1969); Johnson v. Town of Colonie, 102 A.D.2d 925, 477 N.Y.S.2d 513, 514 (3d Dep’t 1984); Saunsen v. State, 81 A.D.2d 252, 440 N.Y.S.2d 281, 282 (2d Dep’t 1981) (per curiam).

        Although under New York law a validly issued arrest warrant will not bar a false arrest or imprisonment action where the issuing Court lacked subject matter or personal jurisdiction, see Nuernberger v. State, 41 N.Y.2d 111, 359 N.E.2d 412, 390 N.Y.S.2d 904, 906 (1976); Troutman v. State, 273 A.D. 619, 79 N.Y.S.2d 709, 711 (3d Dep’t 1948), there is no valid claim here that the New Jersey court lacked jurisdiction to issue the warrant. See Kase v. Kase, 18 N.J.Super. 12, 86 A.2d 587, 589 (1952) ("For the purpose of alimony, the court retains jurisdiction after the final decree of divorce; the parties remain in court”).

      . See Earl v. Winne, 14 N.J. 119, 101 A.2d 535, 539 (1953); Broughton v. State of New York, 37 N.Y.2d 451, 335 N.E.2d 310, 373 N.Y.S.2d 87, 93, cert. denied sub nom. Schanbarger v. Kellogg, 423 U.S. 929, 96 S.Ct. 277, 46 L.Ed.2d 257 (1975).

      . See Cox Broadcasting Corp. v. Cohn, 420 U.S. 469, 95-S.Ct. 1029, 43 L.Ed.2d 328 (1975).

      . See Deyo v. Hudson, 225 N.Y. 602, 122 N.E. 635 (1919); Harris v. Perl, 41 N.J. 455, 197 A.2d 359, 365 (1964); Lanzi v. Brooks, 54 A.D.2d 1057, 388 N.Y.S.2d 946, 948 (3d Dep't 1976), aff’d, 43 N.Y.2d 778, 373 N.E.2d 278, 402 N.Y.S.2d 384 (1977); Verschell v. Pike, 85 A.D.2d 690, 445 N.Y.S.2d 489, 491 (2d Dep’t 1981); Harris v. Camilleri, 77 A.D.2d 861, 431 N.Y.S.2d 65, 68 (2d Dep’t 1980).

      . Although Singer maintains that the warrant was procured by Emily Bell, knowing that Singer's child support obligations had been discharged in bankruptcy, such a claim is clearly contrary to law. Alimony and child support are not dischargeable in bankruptcy, see In re Spong, 661 F.2d 6 (2d Cir.1981); Golden v. Golden, 411 F.Supp. 1076 (S.D.N.Y.), aff'd on opinion below, 535 F.2d 213 (2d Cir.1976), and certainly not where the November 1980 judgment occurred almost five years after the order of the bankruptcy court was entered.

      . Singer v. Bell, 585 F.Supp. 300, 304 (S.D.N.Y.1984).

      . Singer v. Bell, 599 F.Supp. 350, 353 (S.D.N.Y.1984).

      . Salwen Paper Co., Inc., Profit Sharing Retirement Trust v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 79 F.R.D. 130, 134 (S.D.N.Y.1978).

      . Samuels v. Eleonora Beheer, B.V., 500 F.Supp. 1357, 1362 (S.D.N.Y.1980), aff’d without opinion, 661 F.2d 907, 910 (2d Cir.1981); Singer v. Bell, 585 F.Supp. 300, 304 (S.D.N.Y.1984); see Contemporary Mission, Inc. v. U.S. Postal Service, 648 F.2d 97, 107 (2d Cir.1981).

      . Because the claim of plaintiff Dulces Reyes Singer for loss of consortium is dependent upon the success of her husband’s claim, it is dismissed. In addition, any claim for "emotional distress” due to her husband’s arrest is equally unavailing. See Waite v. City of Elmira, 69 Misc.2d 962, 331 N.Y.S.2d 482 (Chemung Co. 1972).


source: Caselaw Access Project

author: BUA, District Judge.

license: Public Domain

text:
    Charles E. TAYLOR, Plaintiff, v. SUBURBAN TEAMSTERS OF NORTHERN ILLINOIS FRINGE BENEFIT FUNDS, Defendant.
    No. 83 C 7968.
    United States District Court, N.D. Illinois, E.D.
    July 10, 1985.

      Kim E. Presbrey, Presbrey, Presbrey & Swearingen, Ltd., Aurora, 111., for plaintiff.
    Stephen Feinberg, Asher, Pavalon, Gittler & Greenfield, Ltd., Chicago, 111., for defendant.
   MEMORANDUM OPINION

BUA, District Judge.

The above-captioned matter came before the Court for trial on the merits of plaintiff’s employee benefits claim. The Court, having heard the testimony of witnesses on May 3, 1985, and having reviewed the record and the exhibits submitted into evidence by the parties, does hereby enter the following findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure.

I. FINDINGS OF FACT

1. The defendant is the Suburban Teamsters of Northern Illinois Welfare Fund (“the Welfare Fund”).

2. The Welfare Fund is a multi-employer employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1002(1) and (3).

3. This is an action by plaintiff for a declaratory judgment to clarify his rights to benefits under the Welfare Fund. This Court has jurisdiction over this action under 28 U.S.C. § 1132(e)(1).

4. The Welfare Fund extends a variety of medical and insurance benefits to eligible participants and their dependents according to eligibility criteria and benefit amounts specified in a Plan of Benefits (“the Plan”).

5. Plaintiff, Charles E. Taylor, is a former participant in the Welfare Fund.

6. Plaintiff last worked for an employer making contributions to the Welfare Fund on his behalf (“a contributing employer”) on or about August 18, 1981 when he was laid off.

7. Plaintiff’s date of birth is December 24, 1927 and thus plaintiff was 53 years old at the time he last worked for a contributing employer.

8. At the time plaintiff ceased working for a contributing employer, the Welfare Fund’s Plan of Benefits dated June 1, 1981 (Ex. 1) was in effect.

9. The June 1, 1981 Plan provided in Class S an option for participants who left covered employment for various reasons, including layoffs, to continue their participation in the Fund and their eligibility for benefits under the Plan by making self-contributions to the Fund. (Ex. 1, pp. 15-19, 57-67). In addition to paying the self-contribution amounts specified in the June 1, 1981 Plan (Ex. 1, pp. 62-67), coverage under Class S required, among other things, a written application submitted to the participant’s union business office “not later than the 28th consecutive day following the last date on which he or she worked for a Contributing Employer...” (Ex. 1, p. 16, 63).

10. The June 1, 1981 Plan also specified eligibility criteria for retired employees of Contributing Employers. In pertinent part, the eligibility provision of the June 1, 1981 Basic Retirement Medical Expenses Benefits provided:

An employee who (1) has been eligible for benefits under this Plan for 10 or more calendar years and who has attained age 55, or, if later, has been eligible for 10 or more calendar years preceding the date of his or her retirement, (2) retired on or after June 1, 1981 while covered under Class A, B, C, D or S of this Plan, and (3) has made written application to the Trustees of the Welfare Fund for these Retiree and Spouse benefits, and has been found by the Trustees to have fulfilled all eligibility requirements of this Plan, shall be eligible for these Basic Retirement Medical Expense Benefits from the date such application was accepted by the Trustees. (Ex. 1, p. 79).

11. When he was laid off in August 1981, plaintiff was aware of the requirement of self-contributions to maintain his participation in the Fund. (R. 14).

12. Trustee Yenard testified that he told the plaintiff in August 1981 of the self-paid Class S and that the plaintiff could receive retiree welfare benefits when he retired if he remained a participant in the Fund by making self-contributions. (R. 34).

13. Plaintiff did not file an application to maintain his Welfare Fund eligibility under Class S on or before September 15, 1981, 28 days after his last day worked for a contributing employer, or any time thereafter. (R. 24).

14. Plaintiff did not pay self-contributions to the Welfare Fund at any time after August 18, 1981. (R. 24).

15. No contributions were received by the Welfare Fund from any contributing employer on behalf of plaintiff for any period subsequent to August 18, 1981. (R. 24).

16. Plaintiff was not eligible for the Basie Retirement Medical Expense Benefits (“Retiree Benefits”) under the June 1, 1981 Plan because he had not yet attained age 55 when he left covered employment and he retired after June 1, 1981 while not covered under Class A, B, C, D or S of the Plan. (R. 24, Ex. 1, p. 79).

17. By electing not to maintain his coverage under Class S of the Plan by making self-contributions, plaintiff ceased to be a participant in the Fund on September 15, 1981, 28 days after his last day worked for a contributing employer, in accordance with the provisions of the June 1, 1981 Plan. (R. 20; Ex. 1, p. 57).

18. The Trustees adopted a new Welfare Plan of Benefits effective September 1, 1982 (Ex. 2) and a new Retiree Plan of Benefits effective October 1, 1982. (Ex. 3, R. 33).

19. The Trustees do not dispute that, under the new eligibility provisions of the October 1, 1982 Retiree Plan, the plaintiff would have been eligible to apply for and receive the medical expense benefits available to retirees under the October 1, 1982 Plan if he had been a participant in the Welfare Fund on or after that date.

20. On August 6, 1982, plaintiff came to the office of the Welfare and Pension Funds to discuss his retirement plans. At that time, plaintiff was given Exhibit 4 by the Fund Manager, James Ewing. Exhibit 4 is a form indicating the pension benefits to which plaintiff is entitled if he retired effective January 1, 1983, a week after his 55th birthday, and the earliest date plaintiff could retire. (R. 16-18).

21. Plaintiff advised the Pension Fund in early October 1982 that he would seek an Early Pension Benefit to be effective January 1, 1983. (R. 18).

22. In a letter dated October 15, 1982 (Ex. 5), Ewing sent plaintiff the appropriate pension applications and also enclosed prepared application forms for Retiree Welfare Fund coverage. (R. 18-20). With respect to the Retiree Welfare Fund coverage, Ewing wrote:

The gold covered, booklet that is enclosed describes the current Welfare benefits available to eligible retirees. The eligibility requirements appear on page 7. You would think from reading them that you qualify for Welfare benefits after retiring, but since the book is dated October 1, 1982 it has been interpreted to apply only to those participants who were either still working at October 1, 1982 or were actually retired at that time.
You would come under the eligibility rules in effect in the previous book, which went into effect June 1,1981. The rules in that book required that you remained employed through your 55th birthday. You may want to delay your retirement for a little longer in hopes of getting these Welfare benefits. Please call me up if you want to talk about this some more. (Ex. 5).

23. Ewing testified that, if plaintiff delayed his retirement and worked in covered employment causing contributions from a contributing employer to be made to the Welfare Fund on his behalf after October 1, 1982, plaintiff would have become a participant in the Welfare Fund after October 1, 1982 and his eligibility for retiree welfare benefits upon later retirement would have been determined by the provisions of the October 1, 1982 Plan. (R. 20).

24. Plaintiff submitted his application , for an Early Pension Benefit and Retiree Welfare Fund Coverage on or about October 22, 1982. (Ex. 6).

25. On October 28, 1982, Ewing advised plaintiff by letter that his application for an Early Pension Benefit had been approved, but:

You were not approved for retirees Welfare Fund Benefits as you left active employment and coverage under the Fund at the age of 53. To be qualified for this benefit you would have to have remained covered through the age of 55 according to the terms of the Welfare Fund Summary Plan Description in effect at the time you left us. You have the right to appeal this determination on your Welfare Fund coverage. Instructions on filing an appeal are attached. (Ex. 7).

26. On April 20, 1983, the Trustees denied plaintiff’s appeal. On April 21, 1983, plaintiff was advised by letter that the appeal had been denied by the Welfare Fund trustees because:

It has been a long standing policy of the Trustees of the Fund to consider an applicant as coming under whatever Welfare Plan of Benefits was in effect when he was last covered for those benefits, either through employment or self-payments that followed a period of employment. According to our records Mr. Taylor was last employed in our jurisdiction on August 18, 1981 when he was 53 years old, and did not self-pay after that. The Plan in effect in August 1981 required a Participant to remain covered to the date of his retirement and to the age of 55 to qualify for post-retirement Welfare benefits, and that was the basis for the denial of his most recent appeal. (Ex. 8).

27. At a September 22, 1982 meeting of the Welfare Fund trustees, the issue presented by plaintiff’s Retiree Welfare Fund application had been previously considered for another applicant. (R. 22-23). The Trustees determined that the applicant, Donald Swanquist, was ineligible for the October 1, 1982 Retiree Benefits because “[i]t was the sense of the Trustees that the Plan in effect when a participant ceases to be actively engaged in Covered Employment is applicable in determining that participant’s eligibility for benefits.” (Ex. 9, p. 8).

28. The testimony of Fund Manager Ewing and Welfare Fund Trustee Yenard establishes that the Welfare Fund has consistently determined retiree benefit eligibility of former Welfare Fund participants in accordance with the Plan of Benefits in effect at the time the individual’s participation in the Fund ceased, without regard to eligibility or benefit changes effective subsequent to the termination of a particular former participant. (R. 25-26, 28, 34-35).

29. There is no evidence that plaintiff’s application for Retiree Plan coverage was treated differently than any other former participant similarly situated. The testimony establishes consistent treatment of persons similarly situated to plaintiff. (R. 25-26). Plaintiff presented no evidence and elicited no testimony to rebut this finding.

30. The Welfare Fund trustees have not acted in bad faith or in an arbitrary or capricious manner in denying plaintiff’s Retiree Welfare Plan application.

31. To the extent that any of the foregoing findings of fact are deemed to be conclusions of law, they are hereby adopted as conclusions of law.

II. CONCLUSIONS OF LAW

On the above and foregoing findings of fact, the Court makes the following conclusions of law:

1. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331, because the complaint is brought under 29 U.S.C. § 1132(e)(1). Venue is proper in this district under 28 U.S.C. § 1391(b).

2. A district court has a limited standard of review of trustees’ determinations and interpretations concerning benefit eligibility and coverage issues. A decision by the trustees may be overturned only if it was arbitrary and capricious in light of the language of the Plan. Wardle v. Central States Pension Fund, 627 F.2d 820, 823-24 (7th Cir.1980), cert. denied, 449 U.S. 1112, 101 S.Ct. 922, 66 L.Ed.2d 841 (1981).

3. It is plaintiff’s burden to prove that the Trustees’ decision was arbitrary and capricious. Bayles v. Central States, Southeast and Southwest Areas Pension Fund, 602 F.2d 97, 99 (5th Cir.1979). As noted above, plaintiff has offered no evidence and elicited no testimony to rebut the finding that the Trustees have consistently applied the same rule to applicants similarly situated to the plaintiff: the Trustees apply the Plan in effect when a particular individual’s participation in the Fund ceased. In addition, plaintiff has not shown the rule itself to be anything other than logical and fair.

4. The Court concludes that the application of the June 1, 1981 Plan of Benefits to the plaintiff’s October 1982 Retiree Benefit Plan application was proper and fair, and not arbitrary and capricious. Cf. Lehner v. Crane Co., 448 F.Supp. 1127, 1128, 1134-36 (E.D.Pa.1978) (“plaintiff’s eligibility for benefits is to be determined by the plan in effect when his employment ended and not by the plan which became effective thereafter.”) Since it is undisputed by the parties, the Court also finds that plaintiff’s application for Retiree Welfare Fund coverage was properly denied under the provisions of the June 1, 1981 Plan of Benefits.

5. Plaintiff’s estoppel argument is rejected in light of Reiherzer v. Shannon, 581 F.2d 1266, 1267 fn. 1 (7th Cir.1978). The vast majority of courts considering this argument have rejected the use of estoppel principles in cases of this sort. Id.

6. Even if the estoppel doctrine was accepted in this type of case, plaintiff has failed to show any information on which he detrimentally relied. Plaintiff's contention that Ewing initiated and encouraged the idea of early retirement for plaintiff is not supported by the trial testimony. Indeed, Ewing testified and his letter to plaintiff shows that Ewing advised a delay in retirement for plaintiff. In addition, plaintiff never testified that he was misled in any way or detrimentally relied on any information or representation by anyone.

7. Plaintiff could have continued his Welfare Fund coverage under Class S by applying for Class S coverage and making self-contributions prior to September 15, 1981 and continuing to pay until the retirement age of 55. Had he done so, plaintiff would have remained a participant in the Fund and could have qualified for Retiree Welfare Plan coverage under the July 1, 1981 Plan of Benefits, even if the October 1, 1982 Retiree Plan had not been adopted. However, since plaintiff failed to maintain covered employment either under Class S or up to the date of the October 1, 1982 Plan, his termination as a participant in the Welfare Fund on September 15, 1981 was not unfair, arbitrary or capricious.

8. To the extent that any of the foregoing conclusions of law are deemed to be findings of fact, they are hereby adopted as findings of fact.

III. CONCLUSION

Based on the foregoing findings of fact and conclusions of law, it is hereby ordered that:

1. Final judgment is hereby entered in favor of defendant and against plaintiff.

2. Pursuant to Rule 52(b) of the Federal Rules of Civil Procedure, the Court reserves the right to amend the above findings and conclusions or to make additional findings and conclusions upon motion of either party made no later than ten days from entry of this order.

IT IS SO ORDERED.


author: GUNN, District Judge.

text:
    Carol HOHE, Plaintiff, v. The MIDLAND CORPORATION, Midland Communication Systems, Inc., Midland Computer Center, Inc., Midland Mailing Corporation, the Midland Holdings Group, Midland Real Estate & Mortgage Company, Sarner, Harold, Gerchen, Gary, Gerchen, Bernard, Defendants.
    No. 84-699C(6).
    United States District Court, E.D. Missouri, E.D.
    July 10, 1985.

      Louis Gilden, St. Louis, Mo., for plaintiff.
    Gary A. Growe, Blumenfeld, Sandweiss, Marx, Tureen, Ponfil & Kaskowitz, St. Louis, Mo., for defendants.
   MEMORANDUM

GUNN, District Judge.

Plaintiff Carol Hohe brought this action pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e, et seq. Plaintiff alleges that defendants discriminated against her on the basis of sex and that she was discharged from employment in retaliation for her opposition to practices in violation of Title VII.

This case was tried to the Court and a jury on plaintiff’s three count complaint. Counts one and three, based on violations of the Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. and the Equal Pay Act, 29 U.S.C. § 206(d) were submitted to the jury on June 24, 1985. The jury rendered verdicts on both counts in favor of the defendants. Plaintiff’s second count alleging sex discrimination was tried to the Court.

This Court having considered the pleadings, the testimony of the witnesses, the documents in evidence, and being fully advised of the premises, hereby makes the following findings of fact and conclusions of law as required by Rule 52 of the Federal Rules of Civil Procedure. Fed.R.Civ.P. 52.

A. FINDINGS OF FACT

1. Plaintiff Carol Hohe is a female resident of the Eastern District of Missouri. She was employed from September 26, 1967 through January 24, 1983 by defendant Midland Corporation.

2. Defendant Midland Corporation is an employer within the meaning of 42 U.S.C. § 2000e(b).

3. Plaintiff filed a charge of sex discrimination with the Equal Employment Opportunity Commission on March 16, 1983. She received a Right to Sue letter on February 10, 1984. This action was timely filed on March 27, 1984.

4. Plaintiff commenced employment with defendant in 1967 as a part-time bookkeeper. In 1970, she became Administrative Assistant to the President and was appointed Secretary of the corporation. In 1975, plaintiff was appointed Vice President, a title she held until January 4, 1983.

5. Between 1976 and January 4, 1983, Harold Sarner and Gary Gerchen also held the title of Vice President within the Midland Corporation.

6. Gary Gerchen is the son of Bernard Gerchen, who was, until January 4, 1983, President of the Midland Corporation and Chairman of the Board. Gary Gerchen is now Chairman of the Board.

7. Harold Sarner is the son-in-law of Bernard Gerchen. Sarner currently serves as President of the Midland Corporation.

8. On January 4, 1983, Gary Gerchen and Harold Sarner purchased all of the stock of the corporation from Bernard Gerchen.

9. Plaintiffs initial complaint named Midland Communication Systems, Midland Computer Center, Inc., Midland Mailing Corporation, and Midland Real Estate and Mortgage Co. as defendants along with the Midland Corporation. These are all subsidiary corporations of defendant Midland Corporation and were dismissed as defendants for lack of subject matter jurisdiction. In the course of trial, however, the Court heard extensive testimony concerning the roles played by plaintiff, Gary Gerchen, Harold Sarner, and Eugene Devine, Vice President of Operations for the Midland Corporation, in each of these subsidiary enterprises. Harold Sarner and Gary Gerchen were President and Vice President of Midland Mailing Corporation. Plaintiff was Secretary. Gary Gerchen was President of Midland Communication Systems. Plaintiff was Secretary. Plaintiff was Vice President and Secretary of Midland Computer Center, Inc. and Secretary of Midland Real Estate. Bernard Gerchen was President of both.

10. In determining whether plaintiff was a victim of sex discrimination in her wages, the Court has considered the earnings from the various Midland Corporations for plaintiff, Gary Gerchen, Harold Sarner and Eugene Devine from 1977 through 1982. The Court finds that plaintiff has failed to. adduce substantial credible evidence from which this Court could infer that her wages and fringe benefits represented sex discrimination.

The Court finds as a matter of fact that plaintiff, Harold Sarner and Gary Gerchen did not occupy substantially equal positions in terms of their skill, effort, responsibility and authority within the corporation. Plaintiffs duties as administrative assistant to Bernard Gerchen included those of supervising the accounting and bookkeeping department and office manager. She also monitored various functions of the company for Bernard Gerchen. On the other hand, Harold Sarner and Gary Gerchen did not involve themselves directly with these areas. Their responsibilities were directed toward client development and executive level decision making. During the relevant time period, defendant had two major mailing clients. Plaintiff played no role in procuring these clients. Harold Sarner and Gary Gerchen did — and continued to have substantial responsibility in servicing these clients. The Court finds that Harold Sarner and Gary Gerchen, by virtue of their relationship to Bernard Gerchen and their position in the company, possessed the authority to direct corporate policy. Plaintiff did not. For example, the evidence established that Sarner and Gerchen could purchase needed product and materials. Plaintiff, without approval, could not. As a result, plaintiff did not occupy a substantially equal position. The Court further finds that any differential in the wages earned by Harold Sarner, Gary Gerchen and Carol Hohe were based on factors other than sex.

11. In 1979 Eugene Devine was promoted to Vice President in charge of operations of Midland Corporation and thenceforward reported primarily to Harold Sarner. In 1982 his base salary was $35,000 while that of plaintiff was $32,500. This was the only year in which Mr. Devine’s compensation exceeded that of plaintiff. The Court finds that Mr. Devine did not report to plaintiff and that the wage differential in 1982 reflected substantially differing responsibilities between the two and was based on factors other than sex.

12. In the fall of 1982 Midland requested male and female employees alike to sign a confidentiality agreement under which the employee agreed, for a three-year period following termination of employment, not to seek to sell competitive goods or services to any Midland customer or to induce any customers, suppliers, or employees of Midland to cease doing business with the corporation. Plaintiff presented no evidence at trial supporting allegations of disparate treatment with regard to this agreement.

13. Harold Sarner and Gary Gerchen were named the beneficiaries of a split-dollar life insurance policy of which plaintiff was not named as a beneficiary. The evidence did not support a finding that the difference in insurance benefits was based on sex.

14. Relations between the parties to this action deteriorated substantially prior to the time of plaintiff’s discharge. Plaintiff failed to present substantial credible evidence that her discharge was based on sex.

B. CONCLUSIONS OF LAW

This Court has jurisdiction of this case pursuant to 28 U.S.C. § 1331 and 42 U.S.C. § 2000e-5(f)(3). In a Title VII cause of action, plaintiff has the initial burden of proving a prima facie case of discrimination by a preponderance of the evidence. If plaintiff is successful, defendant must then articulate a legitimate non-discriminatory reason for its actions. In order to sustain this burden, defendant need only present evidence which raises a genuine issue of fact as to whether it discriminated against plaintiff. The burden of producing evidence then shifts back to plaintiff, who must show by a preponderance of the evidence that defendant’s explanation was merely a pretext for discrimination within the meaning of the statute. Texas Department of Community Affairs v. Burdine, 450 U.S. 248, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981); McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973); Coleman v. Missouri Pacific Railroad, 622 F.2d 408 (8th Cir.1980); Kirby v. Colony Furniture Co., 613 F.2d 696 (8th Cir.1980). The plaintiff bears the ultimate burden of proving discrimination. United States Postal Service Board of Governors v. Aikens, 460 U.S. 711, 103 S.Ct. 1478, 75 L.Ed. 403 (1983).

Considering the evidence produced at trial, this Court concludes that plaintiff Carol Hohe has failed to satisfy her burden of proof that defendant Midland Corporation discriminated against her on the basis of sex in the terms and conditions of her employment and that defendant discharged her by reason of her sex.

The ultimate “ ‘factual inquiry’ in a Title VII case is ‘whether the defendant intentionally discriminated against the plaintiff.’ ” Id. at 715, 103 S.Ct. at 1482, citing Burdine, 450 U.S. 248, 253, 101 S.Ct. 1089, 1093, 67 L.Ed.2d 207 (1981). The only direct evidence offered by plaintiff in the instant case of a discriminatory motive on the part of Midland Corporation was plaintiff’s testimony that Bernard Gerchen told her in 1979 and 1982 that she made good money for a woman and that the Midland Corporation should hire women because they could be hired at lower wages than men. Bernard Gerchen categorically denied making such statements. There was no further evidence that plaintiff complained of or acted on these alleged statements. Further, the woman employee who plaintiff claimed replaced her was hired at a salary level above that of plaintiff. The Court therefore disbelieves plaintiff’s testimony as to these statements.

Plaintiff’s Title VII complaint alleges that Midland Corporation discriminated against her on the basis of her sex in: 1) failing to provide equal pay for equal work; 2) paying her less than a male employee who she claims reported to her; 3) harassing her and forcing her to sign a non-competition agreement; 4) denying her equal insurance benefits; 5) discharging her in retaliation for her opposition to practices in violation of Title VII. Her equal pay claim is based on comparisons with Gary Gerchen and Harold Sarner. She alleges Eugene Devine reported to her.

The elements of plaintiffs prima facie case vary according to the claim asserted. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 n. 13, 93 S.Ct. 1817, 1824 n. 13, 36 L.Ed.2d 668 (1973). To make a prima facie case of wage discrimination, plaintiff must prove that she was performing work substantially equal to that of men who were compensated at a higher rate than she. Shultz v. Wheaton Glass Co., 421 F.2d 259 (3rd Cir.1970); Ridgeway v. United Hospitals-Miller Division, 536 F.2d 923 (8th Cir.1977). Upon review of the evidence adduced at trial, the Court finds that plaintiff did not occupy a position within the Midland Corporation so that her work was substantially equal to that of Gary Gerchen and Harold Sarner. Accordingly, the Court holds that plaintiff mailed to make a prima facie case on this point.

The evidence did not support a finding that Eugene Devine at any time reported to plaintiff. It further appeared that in 1982, the year in which Mr. Devine received greater compensation than plaintiff, his salary reflected an increase in responsibilities. The Bennett Amendment of Title VII, 42 U.S.C. § 2000e-2(h), incorporates the affirmative defenses of the Equal Pay Act. County of Washington v. Gunther, 452 U.S. 161, 101 S.Ct. 2242, 68 L.Ed.2d 751 (1981). Under the Equal Pay Act, a wage differential based on “any other factor other than sex” is not unlawful. 29 U.S.C. § 206(d)(1). The Court concludes as a matter of law that the 1982 salary differential between plaintiff and Eugene Devine was based on factors other than sex and was not in violation of Title VII.

With regard to plaintiffs complaints of harassment and disparate treatment surrounding her signing of a non-competition agreement in 1982, the Court concludes that plaintiff failed to make a prima facie case. A case of disparate treatment is made when “(t)he employer simply treats some people less favorably than others because of their race, color, religion, sex, or national origin.” International Brotherhood of Teamsters v. United States, 431 U.S. 324, 335 n. 15, 97 S.Ct. 1843, 1854 n. 15, 52 L.Ed.2d 396 (1977). A plaintiffs threshold burden is not onerous, see Burdine, 450 U.S. at 253, 101 S.Ct. at 1093, and will be satisfied by the introduction of evidence “showing actions taken by the employer from which one can infer, if such actions remain unexplained, that it is more likely than not that such actions were ‘based on a discriminatory criterion illegal under (Title VII).’ ” Furnco Construction Corp. v. Waters, 438 U.S. 567, 576, 98 S.Ct. 2943, 2949, 57 L.Ed.2d 957 (1978), quoting Teamsters, 431 U.S. at 338, 97 S.Ct. at 1856. The evidence at trial established that both males and females were requested to sign the agreement, and no evidence was presented from which the Court could infer disparate treatment of plaintiff on the basis of her sex.

It is also the opinion of the Court that plaintiff failed to establish a prima facie case of disparate treatment with re-gard to receipt of insurance benefits. The benefits were not uniformly made available to all male employees. The evidence thus does not support a finding that plaintiff was denied the benefits by reason of her sex.

Finally, the Court concludes as a matter of law that plaintiff was not discharged in retaliation for her opposition to employment practices in violation of Title VII. The evidence supports the conclusion that relations between plaintiff and the new management of Midland Corporation had deteriorated severely by the time of plaintiffs termination. Therefore, although plaintiff made a prima facie case under § 704(a), in that she demonstrated that she opposed practices of Midland that she believed to be in violation of Title VII and that her discharge followed closely thereafter, 42 U.S.C. § 2000e-3(a), it is the opinion of the Court that she has failed to carry the ultimate burden of proving that the reasons articulated by defendant for her termination were pretextual.

Accordingly, plaintiff’s claim that she was discriminated against on the basis of her sex must be rejected and defendant is entitled to judgment in its favor.

JUDGMENT

This action came on for trial before the Court and a jury, the Honorable George F. Gunn, Jr., District Judge presiding, and the issues having been duly tried on the claims of age discrimination and under the equal pay act, and the jury having rendered its verdicts in favor of defendants The Midland Corporation, Midland Communication Systems, Inc., Midland Computer Center, Inc., Midland Mailing Corporation, Midland Holdings Group, and Midland Real Estate and Mortgage Company and against plaintiff, Carol Hohe;

It is ORDERED and ADJUDGED that the plaintiff take nothing by her cause of action, that the action be dismissed on the merits, and that the defendants recover of the plaintiff their costs of action.

Furthermore, in accordance with the memorandum of the Court filed this day which is incorporated and made a part of this judgment;

It is FURTHER ORDERED and ADJUDGED that plaintiff recover nothing against defendants on her sex discrimination claim, that the claim be and is dismissed on the merits, and that the defendants recover of the plaintiff their costs of action.

      . The reach of Title VII into closely-held family corporations is uncertain. Plaintiff directs the Court to Bonilla v. Oakland Scavenger Co., 697 F.2d 1297 (9th Cir.1982), cert. denied, — U.S. ---, 104 S.Ct. 3533, 82 L.Ed.2d 838 (1984), for the proposition that where an employer’s size makes it subject to federal laws prohibiting employment discrimination, the national interest expressed by the law overrides any legitimate interest of the employer in protecting its family members. In Bonilla, however, the enterprise employed 500 people, 100 of whom were favored "family” members, and the Court expressly excepted the instant case from the reach of its opinion. "We emphasize that our decision by no means interferes with the capacity of the proprietors of a small family-owned business, or, for that matter, any small business, to conduct its affairs with heightened solicitude toward family or friends.” 697 F.2d at 1304. See also Green v. Edward J. Bettinger, 608 F.Supp. 35 (E.D.Pa.1984) ("In short, an employer does not violate Title VII or any other anti-discrimination statute by grooming his son to take over the business.”) The Court does not need to resolve this issue, however, since it concludes as a matter of law that the work being performed by plaintiff was not substantially equal to that performed by Gary Gerchen and Harold Sarner.


author: PEREZ-GIMENEZ, Chief Judge.

text:
    PROTANE GAS CO. OF PUERTO RICO, INC., Plaintiff, v. SONY CONSUMER PRODUCTS CO., Defendant.
    Civ. No. 85-0715(PG).
    United States District Court, D. Puerto Rico.
    July 10, 1985.

      Guillermo Nigaglioni, Hato Rey, P.R., for plaintiff.
    Arturo Trías, San Juan, P.R., for defendant.
   OPINION AND ORDER

PEREZ-GIMENEZ, Chief Judge.

On March 19, 1985, plaintiff herein, Profane Gas Co. of P.R., Inc. (PROGASO), filed a complaint in the Superior Court of Puerto Rico, San Juan Part. The complaint alleged that defendant, Sony Consumer Products Co. (SONAM), illegally terminated a distribution contract between them and that said termination was illegal under the terms of Public Law 75 of June 24, 1964, 10 L.P.R.A. §§ 278 and 278(d).

Plaintiff (PROGASO) requested a provisional remedy ordering the continuance of the distribution agreement.

A hearing scheduled for April 1, 1985, before a Superior Court Judge of the Commonwealth of Puerto Rico was not held because on March 27, 1985, a Petition of Removal was filed with this Court. 28 U.S.C. § 1446.

Thereafter, on April 10, 1985, defendant (SONAM) filed a “Motion to Dismiss or Stay Proceedings Pending Arbitration”. In said motion SONAM requests a stay of proceedings alleging that paragraph nineteen of the distribution agreement between itself and PROGASO compels arbitration. The referred paragraph provides in part as follows:

Except as hereinafter qualified, any controversy or claim arising out of or relating to this agreement or the breach thereof shall be settled by arbitration to be held in New York City in accordance with the Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitration^) may be entered in any court having jurisdiction thereof.

As evinced by the foregoing, the agreement herein certainly provides for arbitration and specifically states that said arbitration is to be held in the State of New York.

It has been alleged by plaintiff that Article 3.B of Law 75, 10 L.P.R.A. § 278b-2, declares null and void, as against public policy, any agreement to arbitrate out of Puerto Rico or subject to foreign laws any controversy arising out of a distribution contract.

The section on which plaintiff relies provides:

The dealer’s contracts referred to in this chapter shall be interpreted pursuant to and ruled by the laws of the Commonwealth of Puerto Rico, and any other stipulation to the contrary shall be void. Any stipulation that obligates a dealer to adjust, arbitrate or litigate any controversy that comes up regarding his dealer’s contract outside of Puerto Rico, or under foreign law or rule of law, shall be likewise considered as violating the public policy set forth by this chapter and is therefore null and void. (emphasis ours) 10 L.P.R.A. § 278b-2

SONAM in turn contends that the above quoted section is violative of the Supremacy Clause and of the Federal Arbitration Act. 9 U.S.C. § 1, et seq. We agree.

Section 2 of the Federal Arbitration Act, 9 U.S.C. § 2 provides:

A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

The Supreme Court has made clear that in enacting section 2 of the Federal Arbitration Act, supra, Congress declared a national policy favoring arbitration, Southland Corp. v. Keating, 465 U.S. 1, 104 S.Ct. 852, 858, 78 L.Ed.2d 1 (1984). Furthermore, the Arbitration Act creates a body of federal substantive law which is applicable in state and federal courts. Southland Corp. v. Keating, supra, 104 S.Ct., at 859.

It is thus settled that the issue of arbitrability is a question of substantive federal law and that federal law in terms of the Arbitration Act governs the issue in either the state or the federal court. Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, at p. 25, fn. 36, 103 S.Ct. 927, at p. 943, fn. 36, 74 L.Ed.2d 765 (1983). This a field preempted by federal law.

Concretely, the argument raised by PROGASO questioning the validity of the agreement to arbitrate out of Puerto Rico has been disposed of by the First Circuit in the case of Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 723 F.2d 155, 158 (1st Cir.1983). In that case it was expressly held that federal law preempts the direct application of section 278(b)(2) and that under 9 U.S.C. § 2 arbitration agreements are declared valid and enforceable as a matter of preemptive federal law. Ibid.

There being a valid arbitration agreement between the parties, an order for arbitration is appropriate under the facts of the case. Ledee v. Ceramiche Ragno, 684 F.2d 184, 186-87 (1st Cir.1982).

Although there is a valid arbitration agreement which compels arbitration in the instant case, two issues still remain before us. To wit: plaintiff’s request for an injunction pendente lite and his petition for a determination that arbitration is to be held pursuant to Puerto Rico rather than New York law.

The first of these two issues presents to us an unsettled area of law, an area of vital importance to the parties to arbitration agreements. It confronts us with a frequently litigated issue as to which the states and the federal courts are divided.

Many courts are of the view that a preliminary injunction pending arbitration should not be issued by virtue of section 3 of the Federal Arbitration Act, 9 U.S.C. § 3.

The referred section provides:

If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such one agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the term of the agreement, poviding the applicant, for the stay is not in default in proceeding with such arbitration.

It is of importance to note that in a recent case the Supreme Court of the United States denied a petition for certiorari to review the decision of the Court of Appeals of Texas, Houston (14th District) which upheld the District Court, Harris County, in its denial to grant preliminary injunctive relief pending arbitration. Merrill Lynch, Pierce, Fenner & Smith, Inc. v. McCollum, — U.S. ---, 105 S.Ct. 811, 1812, 83 L.Ed.2d 804 (1985).

On the other hand certain circuits, and in particular the Second, the Fourth and the Seventh, have held that a federal court may issue a preliminary injunction pending arbitration, i.e., Connecticut Resources Recovery Authority v. Occidental Petroleum Corporation, 705 F.2d 31, 35 (2nd Cir.1983); Guinness-Harp Corp. v. Jos. Schlitz-Brewing Co., 613 F.2d 468, 472 (2d Cir.1980); Erving v. Virginia Squires Basketball Club, 468 F.2d 1064 (2nd Cir.1972); Merrill Lynch, Pierce, Fenner & Smith v. Bradley, 756 F.2d 1048, 1053-54 (4th Cir.1985); Sauer-Getriebe K.G. v. White Hydraulics, Inc., 715 F.2d 348, 352 (7th Cir.1983).

However, we find that the denial of the preliminary injunction in a case like the instant one is more faithful to the purposes of the Federal Arbitration Act, 9 U.S.C. § 1, et seq., in view of the clear agreement to arbitrate. Scherk v. Alberto-Culver Co., 417 U.S. 506, 519, 94 S.Ct. 2449, 2457, 41 L.Ed.2d 270 (1974); Merrill Lynch, Pierce, Fenner & Smith v. Hovey, 726 F.2d 1286, 1291-92 (8th Cir.1984).

The Supreme Court of the United States has expressed its reserves as to being involved at the preliminary injunction stage of the dispute. Buffalo Forge Co. v. United Steelworkers of America AFL-CIO, 428 U.S. 397, 412, 96 S.Ct. 3141, 3149, 49 L.Ed.2d 1022 (1976). Several district courts have consistently denied preliminary injunction under such circumstances in view that this would necessitate a ruling on major factual issues which are subject to arbitration. Merrill Lynch, Pierce, Fenner & Smith v. Shubert, 577 F.Supp. 406, 407 (M.D.Fla.1983); Merrill Lynch, Pierce, Fenner & Smith v. Thomson, 575 F.Supp. 978, 979 (E.D.Mo.1983); Smith v. Merrill Lynch, Pierce, Fenner & Smith, 575 F.Supp. 904, 905 (N.D.Texas 1983); Merrill Lynch, Pierce, Fenner & Smith v. Thomson, 574 F.Supp. 1472, 1478 (E.D.Mass.1983).

In the case of Prima Paint Corp. v. Flood & Conklin Manufacturing Corp., 388 U.S. 395, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967) the parties had signed a contract containing an arbitration clause. One party alleged that there had been fraud in the inducement of the contract. The court held that the language and policies of the Act required a conclusion that the fraud issue was arbitrable. The court further stated that any doubts concerning the scope of arbitrability should be resolved in favor of arbitration.

In the instant case there is an express and valid agreement between the parties to arbitrate any or all controversies arising out of the distributorship agreement. Broad language of this nature has been held to cover contract-generated as well as contract-related disputes between the parties. Acevedo Maldonado v. P.P. G. Industries, 514 F.2d 614, 616 (1st Cir.1975). The controversy concerning the law to be applied is one falling within the scope of the agreement. Acevedo-Maldonado v. P.P.G. Industries, supra. Accordingly, such consideration is for the arbitrators and not for the courts. Prima Paint Corp. v. Flood & Conklin Manufacturing Corp., supra, 388 U.S., at 406, 87 S.Ct. at 1807.

The purpose of the Federal Arbitration Act was to compel arbitration in terms of the contract itself. Moses H. Cone Memorial Hosp. v. Mercury, supra, 460 U.S., at 22, 103 S.Ct. at 940, Scherk v. Alberto-Culver Co., supra.

Not granting the preliminary injunction will not render the process a “hollow formality” in view that if a preliminary injunction is necessary to protect a party or the status quo, the arbitrator has the power to issue an injunction. Merrill Lynch, Pierce, Fenner & Smith v. DeCaro, 577 F.Supp. 616, 622 (W.D.Mo.1983).

Thus, it is to the arbitrator rather than to the Court that plaintiff must subject its contentions. Acevedo Maldonado v. P.P.G. Industries, supra; J & R Sportswear & Co. v. Bobbie Brooks, Inc., 611 F.2d 29, 30 (3d Cir.1979); Parsons & Whittemore Overseas Co., Inc. v. Societe Generate de L'Industrie Du Papier (RAKTA), 508 F.2d 969, 974 (2d Cir.1974); Creson v. Quickprint of America, Inc., 558 F.Supp. 984, 986 (W.D.Mo.1983).

WHEREFORE, in view of the foregoing the Court hereby GRANTS defendant’s motion to stay proceedings, and FURTHER ORDERS the parties to submit to arbitration.

IT IS SO ORDERED.

      . Both of these requests have been made through the "Motion in Reply to Defendant's Motion to Dismiss or Stay Proceedings Pending Arbitration,” filed on April 22, 1985.

      . The dissenting opinion following the court’s denial of certiorari stresses that the certiorari should have been granted to put an end to the existent division among courts stemming from this issue.


author: CAHILL, District Judge.

text:
    Duane T. EVANS, Plaintiff, v. SIX FLAGS, Defendant.
    No. 85-0823C(4).
    United States District Court, E.D. Missouri, E.D.
    July 10, 1985.

      C. Clifford Schwartz, Clayton, Mo., for plaintiff.
    G. Keith Phoenix, St. Louis, Mo., for defendant.
   MEMORANDUM AND ORDER

CAHILL, District Judge.

This matter is before the Court on motion of defendant to dismiss plaintiff’s complaint. Plaintiff brings this action in two counts. In Count I, plaintiff purports to state a claim for the intentional infliction of emotional distress by reason of defendant’s suspension and subsequent termination of plaintiff. In Count II, plaintiff purports to state a claim of tortious interference with contract. For the reasons which follow, defendant’s motion will be granted.

In order for a plaintiff to recover on the theory of intentional infliction of emotional distress he must show that the defendant’s conduct was extreme or outrageous. As explained in Restatement (Second) of Torts, Sec. 46:

“It has not been enough that the defendant has acted with an intent which is tortious or even criminal, or that he has intended to inflict emotional distress, or even that his conduct has been characterized by ‘malice,’ or a degree of aggravation which would entitle the plaintiff to punitive damages for another tort. Liability has been found only where the conduct has been so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious and utterly intolerable in a civilized community. Generally, the case is one in which the recitation of the facts to an average member of the community would arouse his resentment against the actor, and lead him to exclaim, ‘Outrageous!’ ”

Mere insults, indignities, inconsiderations or petty oppressions do not rise to the level of the outrageous conduct essential to plaintiff’s right of recovery. Smith v. Standard Oil, Division of Amoco Oil Co., 567 S.W.2d 412 (Mo.App.1978); Pretsky v. Southwestern Bell Telephone Co., 396 S.W. 566 (Mo.1965); Witt v. Kansas City Area Transportation Authority, 629 S.W.2d 669 (Mo.App.1982).

The alleged outrageous conduct which “upset” plaintiff consists of his suspension from employment (pending the outcome of statutory rape charges); defendant’s refusal to reinstate plaintiff (who by now was characterized as an employee at will) following resolution of the criminal charges; and the subsequent termination of plaintiff. Such conduct does not rise to the level required in order to come within the doctrine.

Plaintiff’s claim for tortious interference with contract also fails. The Missouri courts have recognized that “one who maliciously or without justifiable cause induces a person to breach his contract with another may be held responsible to the latter for the damages resulting from such breach.” Downey v. United Weatherproofing, Inc., 363 Mo. 852, 253 S.W.2d 976, 980 (1953). The essential elements for tortious interference of contract as stated in Tri-Continental Leasing Co. v. Niedhardt, 540 S.W.2d 210, 212 (Mo.App.1976), are as follows: “(1) that a contract was in existence; (2) that the defendant had knowledge of the contract; (3) that the defendant induced or caused the breach of the contract; (4) that the defendant’s acts were not justified; and (5) that the plaintiff thereby suffered damages.” The nature of this cause of action is such that three parties are required, i.e., two parties who have entered into a valid binding contract and a third party who induces one of the parties to breach. Plaintiff’s action fails because there is no third party who was induced by defendant to breach a contract with plaintiff. Consequently, plaintiff’s cause of action for tortious interference with contract must fall. Accordingly,

IT IS HEREBY ORDERED that defendant’s motion to dismiss is GRANTED and plaintiff’s complaint is hereby DISMISSED.

      . Though plaintiff contends in his memorandum in opposition to defendant's motion to dismiss that he was never terminated in his employ with defendant, and is uncertain as to his present status with defendant, plaintiff in ¶ 14 of his complaint avers that his employment was involuntarily terminated by defendant in July 1983. For purposes of this opinion, the allegations in the complaint control.


author: DeANDA, District Judge.

text:
    FALCON CONSTRUCTION CO. v. BACON TOWING CO., INC.; Marmac Corporation; and General Stevedores, Inc.
    Civ. A. No. H-80-346.
    United States District Court, S.D. Texas, Houston Division.
    July 11, 1985.
    As Amended July 26, 1985.

      Tom Alexander and Richard Flowers, Butler & Binion, Houston, Tex., for plaintiff.
    James Ross and Montgomery English, Ross, Griggs & Harrison, Houston, Tex., for defendant Bacon Towing Co., Inc.
    William A. Durham and JoAnn Dahl, Eastham, Watson, Dale & Forney, Houston, Tex., for defendant Marmac Corp.
    R. Scott Hogarty, Fulbright & Jaworski, Houston, Tex., for defendant General Stevedores, Inc.
   FINDINGS OF FACT AND CONCLUSIONS OF LAW

DeANDA, District Judge.

This cause having been tried without a jury, the Court hereby enters the following memorandum opinion as its findings of fact and conclusions of law, pursuant to Rule 52(a), F.R.Civ.P.

The lawsuit arose out of an incident which occurred on June 11, 1979 in the Houston Ship Channel, a navigable inland waterway. Plaintiff Falcon Construction Co., Inc. leased approximately 220 sheets of metal piling for use in a construction project. The metal was loaded by Defendant General Stevedores, Inc. onto a barge (Barge MCD-267). This barge was owned by McDonough Marine, a division of Defendant Marmac Corporation, and Plaintiff chartered the barge from Marmac. The barge was towed by the M/V RAZORBACK, owned and operated by Defendant Bacon Towing Co., Inc. On June 11, 1979, the barge partially capsized and the entire load of metal piling slipped off the barge and into the Ship Channel. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1333.

We turn first to the question of whether Defendant General Stevedores, Inc. (“Stevedore”) should be held liable, in whole or in part, for the loss at issue. A stevedore has a duty to use reasonable care and ordinary diligence in the loading and stowage of cargo. E.g., Hanson & Orth v. M/V JALATARANG, 450 F.Supp. 528, 536 (S.D.Ga.1978). Plaintiff must prove a violation of this duty by a preponderance of the evidence. See Skidmore v. Grueninger, 506 F.2d 716 (5th Cir.1975); Movible Offshore, Inc. v. M/V WILKEN A. FALGOUT, 471 F.2d 268 (5th Cir.1973). The Court finds that Plaintiff has failed to show a lack of reasonable care and ordinary diligence on the part of the Stevedore.

The Stevedore completed the loading of approximately 375 tons of metal piling aboard the barge on the afternoon of June 10, 1979. The loading operations were supervised and performed exclusively by the Stevedore’s personnel. The preponderance of the evidence shows that the loading procedures were conducted in a customary, diligent and prudent fashion. Specifically, weight distributions of the cargo were made in accordance with accepted industry standards, adequate dunnage was put in place, and the pilings were appropriately “nested.” Plaintiff has argued that, even if the foregoing is true, the cargo was improperly secured. There is a paucity of competent and credible evidence to support this argument. Rather, the pertinent expert testimony establishes that the cargo was adequately lashed and secured for purposes of the intended voyage. Furthermore, in light of the fact that the loss occurred during a partial capsize, it appears to be extremely unlikely that the use of any additional lashings or other securing methods could have prevented the loss. Judgment should be entered in favor of the Stevedore.

Defendant Bacon Towing (“Bacon”) moved for judgment at the close of Plaintiff’s case and declined to offer any evidence on its own behalf. The Court took the motion under advisement. For the reasons set forth below, the Court has concluded that the motion should be granted.

Any liability which may be imposed on Bacon must be predicated on some negligent breach of the duties which flow from a towage contract. Under a towage contract, the owner of a tug (Bacon) is not a bailee of the vessel in tow nor is he a bailee of the cargo aboard the tow. Stevens v. The White City, 285 U.S. 195, 52 S.Ct. 347, 76 L.Ed. 699 (1932); Nat G. Harrison Overseas Corp. v. American Tug Titan, 516 F.2d 89, 94 (5th Cir.1975). The owner of the tow is responsible for the seaworthiness of his vessel and the owner of the tug for its safe navigation. Nat G. Harrison, supra, at 94; Curtis Bay Towing Co. v. Southern Lighterage Corp., 200 F.2d 33, 34 (4th Cir.1952). The owner of a tug is not responsible for the proper stowage of cargo on a barge, for honest errors of judgment on the part of the tug’s master, nor for nonapparent unseaworthiness of the barge in tow; further, the tug’s master has no duty to make a detailed examination of the barge. Nat G. Harrison, supra, at 94, and cases cited therein.

Plaintiff contends that the tug master failed to use reasonable judgment, failed to properly inspect the barge and its cargo, and that he improperly operated the tug-tow; further, Plaintiff contends that the tug’s master and crew were incompetent. The evidence shows that at the time the tug took the barge in tow, the barge had less freeboard at the stern than at the forward end, in accord with the way the tow was loaded. Based on virtually uncontroverted expert testimony on towage, the master’s decision to undertake the towage under these circumstances was reasonable and reflected acceptable industry standards. The master used reasonable judgment.

The evidence concerning the apparent seaworthiness (or lack thereof) of the barge was to the effect that an internal patch found in one of the barge’s compartments may have been leaking. This patch was below the waterline. Thus, there is no evidence of apparent unseaworthiness during the material time-frame. Nonetheless, Plaintiff complains that the tug was somehow responsible for failing to discover allegedly defective hatch covers on the barge. A deckhand visually inspected and kicked each of the hatch covers, and he did not find any apparent defectiveness. No further inspection was required by the applicable legal duties. See McDonough Marine Service, Inc. v. M/V Royal St., 465 F.Supp. 928, esp. at 934 (E.D.La.1979).

The tug has a duty to keep a tow under observation while under tow, and the degree of care required in relation thereto is measured with reference to the character of the tow and the condition of the seas and weather. McDonough v. Royal, supra, at 934. At the time of the loss, the waters were quite calm, no threatening weather was expected, and the tug and its tow were not going to proceed into open waters. Plaintiff has failed to establish the existence of any changed conditions (e.g., a discernable loss of the six-inch freeboard at the aft end of the barge) during the tow which should have alerted the master or crew to take any steps other than those actions which were undertaken by the master. As soon as the barge was noticeably shipping water and listing, the Coast Guard was immediately notified and the vessel attempted to proceed to shallow waters. Under the circumstances, the master and crew of the tug acted reasonably and in a nonnegligent manner. Plaintiff has shown no negligent breach of any applicable duty by the tug.

Finally, we turn to the liability issues which concern Defendant Marmac. Plaintiff’s allegations of negligence may be summarily disposed of since no specific acts or omissions have been shown by a preponderance of the evidence. However, the question as to the seaworthiness of the barge presents a more substantial question. Pre-loading inspections did not disclose any evidence of unseaworthiness. Post-loss inspections did show a possible leak of an internal patch in one of the main compartments, as noted earlier. (The barge contains six water-tight compartments of various sizes.) The only compartment found during post-loss surveys to contain significant amounts of water was the stern rake compartment. Drydock surveys failed to uncover holes, fissures or cracks in the rake compartment. Some evidence indicates a hatch cover inexplicably came loose, allowing the barge to take water. The tug master noticed a substantial list just prior to the loss. Hence, the evidence of unseaworthiness is far from conclusive or obvious, and it is conceivable that the instant loss is “an unexplained accident of the sea.” American Cement Corp. v. Healy Tibbitts Constr. Co., 249 F.Supp. 891, 894 (S.D.Cal.1966), aff'd, 371 F.2d 525 (9th Cir.1967). However, based on the fact that the rake compartment was (somehow) flooded, and based on the master’s testimony concerning the pre-loss listing of the barge’s aft, the Court finds it to be more likely than not that the barge was unseaworthy.

Defendant Marmae contends that even if the barge was unseaworthy, Plaintiff may not recover based on a provision of the private contract of charter entered into by Plaintiff and Marmae. On June 4, 1979, Plaintiff contacted a division of Marmae and requested a deck barge to transport the cargo of pilings at issue. Over a period of several years prior to the instant loss, Marmae had provided barges to Plaintiff. The customary procedure for chartering these barges has been that a customer places a telephone call to Marmae requesting a barge, and this request is memorialized on a barge rental ticket. Then, a standard form charter party is completed by Marmae and mailed to the customer to be signed, with one signed copy being returned to Marmae by the customer. This procedure is common in the relevant industry, and had been routinely followed by Plaintiff and Marmae on previous occasions. Plaintiff therefore was, or reasonably should have been, fully aware of the terms and conditions of the charter party.

The charter provides, in pertinent part, that the owner of the barge (Marmae or one of its divisions) agreed to obtain, carry and pay for full form hull and protection and indemnity insurance (“P & I”) on the barge. The charter party expressly provides that if the charterer provides insurance, the owner will be an additional assured and that subrogation rights will be waived. Further, the charterer (Plaintiff) is to protect, defend, hold harmless and indemnify the owner for any loss not covered by insurance, and P & I Insurance for cargo loss is to be carried by the charterer.

Plaintiff contends that the standard charter party discussed immediately above was not executed here, that its terms are not binding in this case, and that instead, an oral or implied charter of the barge in question was “executed” without any terms and conditions except as to price. Harry Carlton, Sr., an officer of the Plaintiff company, testified that he did not recall ordering the barge in question. He conceded that he had signed Marmac’s standard charter party forms in the past, and further testified that he had been informed that Marmae would carry insurance on the barge itself.

The standard charter party was not executed by Plaintiff on the occasion at issue, although it is uncontroverted that the charter party was provided to Plaintiff. However, the charter party provides on its face for an alternative means for acceptance of its terms, namely, by accepting the barge. It cannot be disputed that Plaintiff did in fact accept the barge. It necessarily follows that Plaintiff is bound by the terms of the charter party. Furthermore, the parties have stipulated that the loss of the steel piling cargo would have been covered by a standard marine cargo insurance policy if one had been in effect.

Plaintiffs contention that an oral or implied charter is controlling of the instant issue is contrary to the great weight of the evidence. Moreover, the contention flies in the face both of established custom in the industry and the prior dealing of Plaintiff and Marmae concerning similar transactions. Another reason for rejecting Plaintiffs contention is that it is legally untenable. For example, in the very similar case of U.S. Ore Corp. v. Commercial Transport Corp., 369 F.Supp. 792 (E.D.La.1974), the court concluded that the parties were bound by the terms of a contract for shipment even though the contract provided that the “agreement will become effective when signed” and it was never signed. The Ore court recognized the well-settled legal principle that a contract can have alternative means of acceptance, and that if an offeree fails to comply with the requested method of acceptance, but actually tenders the requested performance pursuant to the terms of the agreement, the performance itself acts as an acceptance, thereby binding the parties to the entire contract. Id., at 796. By accepting and using the barge, Plaintiff became bound by the terms of the unsigned charter party. The Bareboat Barge Charter Party dated June 6, 1979, the pertinent terms of which were outlined earlier, governs the legal rights, duties and relationship between Plaintiff and Marmac.

The law of this Circuit is clear that in a private contract of charter the parties may stipulate as to which party will carry insurance for certain risks, and may further provide that if such insurance is not carried by that party, then such party may be required to fully indemnify and hold harmless the other party to the charter contract. E.g., Hercules, Inc. v. Stevens Shipping Co., Inc., 698 F.2d 726, 737-739 and cases cited therein (5th Cir.1983). Moreover, the enforcement of charter party terms such as those at issue here is consonant with certain realities of risk-spreading and underwriting in the industry. Specifically, evidence in this case shows that Marmac cannot feasibly obtain insurance on cargo since the P & I underwriters are of the opinion that a barge owner does not have any insurable interest in the cargo. It follows that the charterer (or the owner of the cargo) should carry insurance for cargo loss or else suffer the consequences of failing to do so.

Plaintiff breached the terms of the controlling contract and therefore may not recover from Marmac “any loss which would have been covered by such insurance.” Slade, Inc. v. Samson Towing Co., 327 F.Supp. 555 (E.D.Tex.1970). It has been stipulated that the loss at issue would have been governed by a standard policy of marine cargo insurance. Plaintiff may not recover from Marmac. The provisions of the charter party not only bar any recovery by Plaintiff from Marmac, they also mandate a full indemnification of Marmac by Plaintiff for any cargo loss. This includes Marmac’s attorney fees and costs of defending the instant action. Counsel for Marmac shall submit either a stipulation as to the amounts of attorney fees and costs or an affidavit thereon within 10 days of the date judgment is entered herein. Plaintiff may file a counter-affidavit as to said amounts within 10 days thereafter. The Court will retain post-judgment jurisdiction to determine the reasonable and proper amount of attorney fees and costs recoverable by Marmac.

The Defendants’ various cross-actions are now moot.

Finally, by Order dated June 28, 1983, the third-party complaint filed by Defendant Bacon Towing against R.A. Gregg, Stafford McGuire, James Young, Proprietors Ins. Co., and Robert Ratchford, Jr. was severed from this cause and designated as CA H-80-346-A. The severed cause pertains to reinsurance issues which are not necessarily rendered moot by the entry of judgment in this main cause. A pretrial conference will be set therein by separate order.

A Final Judgment will be entered in favor of Defendants.

      . Plaintiff characterizes the evidence as showing that the barge was "listing heavily to aft” and on the verge of sinking when the master and crew inspected the barge. The Court does not concur with this characterization.

      . This is so, unless the parties have contractually agreed to do otherwise.