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CHAMBERS v. EUROPEAN AMERICAN BANK & TRUST CO.

January 21, 1985

DOUGLAS W. CHAMBERS, Plaintiff, against EUROPEAN AMERICAN BANK AND TRUST CO.; EUROPEAN AMERICAN BANKING CORPORATION; THE INCENTIVE SAVINGS PLAN COMMITTEE OF EUROPEAN AMERICAN BANK AND TRUST CO. AND EUROPEAN AMERICAN BANKING CORP.; THE EMPLOYEE BENEFITS COMMITTEE OF EUROPEAN AMERICAN BANKING CORP.; THE PENSION PLAN COMMITTEE OF EUROPEAN AMERICAN BANK AND TRUST COMPANY AND EUROPEAN AMERICAN BANKING CORP.; and KING F. LOWE, HARRY E. EKBLOM, FRANCIS RUSSO, JR., and DONALD A. CROWLEY, individually and as agents of EUROPEAN AMERICAN BANK AND TRUST CO., Defendants


The opinion of the court was delivered by: PLATT

PLATT, D.J.

MEMORANDUM AND ORDER

 Plaintiff filed the present suit against his former employer, European American Bank and Trust and European American Bank Corporation, collectively known as "EAB," *fn1" alleging that EAB, by discharging him, had violated the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §§ 621-634, that EAB, by withholding from him some $4,800 of EAB contributions to his EAB Incentive Savings Plan ("ISP") account, had violated certain procedural requirements of the Employment Retirement Security Act of 1974 ("ERISA"), and that EAB, both by discharging him and withholding this disputed amount, had violated several aspects of New York State contract and tort law. In response, defendant EAB has moved for summary judgment on the grounds that plaintiff's ADEA claim was untimely filed and that he failed to exhaust his internal review remedies before bringing his alleged ERISA violation to a federal court. Defendant EAB has also moved for summary judgment against all plaintiff's State contract and tort claims.

 As will be set forth, this Court finds that summary judgment may be granted in favor of the defendant concerning plaintiff's claims resting on federal law. Having decided that there are no justiciable federal claims, this Court has no jurisdiction to decide plaintiff's pendent State law claims and plaintiff's claim is hereby dismissed without prejudice to any State claims he may have.

 FACTS

 In February of 1977, plaintiff, a resident of New York, was hired by EAB following discussions with EAB's Executive Vice President, H. Newman Marsh. Plaintiff's Affidavit in Opposition to Defendant's Motion, PP6, 7 [hereinafter cited as Pl. Aff.]; Transcript of Plaintiff's Deposition, Defendant's Ex. 2, pp. 50-57 [hereinafter cited as Pl. Dep.].

 EAB is a commercial bank which has its headquarters in New York and over 90 branches in the New York Metropolitan Area. Pl. Amended Complaint PP6, 7 [hereinafter cited at Comp.]; Mykolyn Aff., pp. 2-3.

 At the time he started work at EAB, plaintiff was 56 years old, his birthdate being May 7, 1920. Pl. Attny. Hart Aff. Ex. I.

 Plaintiff claims that the reason he was "induced" to leave his former position at the Bank of New York to join EAB was because Mr. Marsh had told him he would be eligible for EAB's pension plan if he were to stay on until the age of 65, whereas at the Bank of New York he had no such possibility of attaining a pension. Pl. Aff. PP7, 8, 11. Before he went to work at EAB, plaintiff states that he "did not ask for any written materials on employee benefits" because he considered his conversations with Mr. Marsh to be a "gentlemen's agreement" and "relied on his representation." Id. P10.

 Moreover, both before plaintiff started work at EAB and after having begun work there, he admits that he never received any written employment contract. Pl. Dep. pp. 76, 83-84. Plaintiff admits that he was told by Mr. Marsh that his first six months were to be on a trial basis and that a statement to this effect appeared on the employment application which he signed. Pl. Aff. P11.

 In plaintiff's brief, he argues that he believed after this trial period was over, his employment would be secure and that he could not be dismissed without cause. Indeed, it appears that plaintiff was warmly welcomed at EAB, and while there, received excellent job evaluations, which in all likelihood explains his "shock" when he was let go apparently without cause. Pl. All. Exs. A, D, E, F-1-4; Pl. Dep. pp. 123-28.

 In sum, despite the absence of any written assurances or a written employment contract, plaintiff believed he had such a contract and expected he could work until 65 or later when he would be eligible for a pension. Pl. Aff. P12; Pl. Dep. pp. 89-99.

 In his position at EAB in charge of services to savings and thrift institutions, plaintiff was responsible for supervising and hiring employees in his section. Pl. Dep. pp. 104-07. In his deposition, he stated that he was aware that he could not discriminate on the basis of age in his hiring practices and that he had gained this awareness from his readings of common business periodicals, which had given age discrimination "so much publicity." Id. at 115. However, plaintiff denied in his deposition that he had ever seen any of the ADEA posters concerning the illegality of age discrimination which EAB was required by law to post in areas frequented by employees, although he admits to having passed through these areas where the posters were allegedly hanging. Id. at 113-14, 117-21, 345-48.

 Defendant submitted an affidavit by its Affirmative Action Officer stating that it has been EAB's policy since 1976 to have these posters hung in places like the personnel offices, the employee cafeterias, and the employee coffee rooms, and further, that since 1977, EAB's auditing department had checked to see that these ADEA posters were up as part of the inspection it conducts of each branch office every 12 to 18 months. Mykolyn Aff. pp. 1-3; Def. Ex. 5 (copies of audits conducted from 1976-Aug. 1982 showing that ADEA posters, among others, were displayed).

 Plaintiff submitted an affidavit by a former employee of EAB who had also been plaintiff's secretary, stating that when she left EAB in May of 1983, she had never seen such posters. Cruz Aff. p. 2.

 On August 2, 1982, plaintiff's supervisor, Frank Russo, told him that because of the distressed economic conditions in the savings and thrift sector, EAB was curtailing its marketing efforts in this area and a consequence, his position was being eliminated. Pl. Aff. P19; Pl. Dep. pp. 123-28. Plaintiff contends that manpower in his division was subsequently not curtailed and further claims that his job responsibilities were assumed by two men who were 40 years old or younger. Pl. Aff. PP24, 25. It might be noted, however, that according to Mr. Russo's affidavit, submitted with plaintiff's attorney Hart's affidavit as Exhibit H-1, it appears that plaintiff's section had been scaled down because now it only has one person soliciting business whereas before it had two.

 On August 2 and again on August 3, 1982, plaintiff was told that although he had no further duties at EAB, he would receive his full salary and be eligible for employee benefits for the following nine months, the final date for his compensation and benefits would be April 30, 1983. Pl. Dep. pp. 130-38. These discussions were confirmed by Mr. Crowley, a Senior Vice President at EAB. Comp. Ex. C-1, C-2. Plaintiff asserts that because of his financial responsibilities, he "accepted Russo's terms under duress and threat of loss of salary and benefits." Pl. Aff. P20. He further asserts that Mr. Crowley told him that if he were to go to work for a competitor of EAB, he would jeopardize his salary and benefit arrangement. Pl. Aff. P21; Pl. Dep. pp. 161-62. As a consequence of this conversation, plaintiff further asserts that he "did nothing during this period [i.e., August 1982-April 1983] because I was afraid of loss of salary and benefits." Pl. Aff. P21. It may be noted here, however, that plaintiff admitted that he never discussed with Mr. Crowley what would happen if he were to sue the Bank. Pl. Dep. p. 162.

 Before plaintiff left EAB, he claims that Mr. Crowley assured him that he would receive all of the Bank's contributions to his Incentive Savings Plan ("ISP") account. Pl. Aff. P21; Pl. Dep. p. 127-28. However, on March 7, 1983, EAB notified him that his right to the Bank's contributions to his savings made after January 1980 had not vested; thus, he was entitled to receive and did receive $31,757.38 consisting of all his savings and the Bank's contributions made to his account before 1980, but he was not entitled to the $4,852.34 worth of EAB contributions made after 1980. Comp. Ex. D-2. By a letter, dated October 6, 1983, plaintiff's attorney returned EAB's check for $31,757.38. Id. Ex. F.

 Although the general rule concerning the ISP was that the right to receive EAB contributions would not vest until three years after EAB had made them, plaintiff believes that he falls within one of the EAB's stated exceptions which permit 100% vesting of rights to the Bank's contributions when an employee is terminated as a result of a "reduction in force, or any other involuntary termination without cause." Comp. Ex. D-1. In a letter, dated May 3, 1983, following up his phone inquiries, plaintiff asked Mr. Timoney, a manager of Employee Benefits at EAB, to explain why his discharge did not fall within this stated exception. Comp. Ex. E-1; Def. Ex. 9. Plaintiff repeated this request for an explanation by letters, dated June 7 and July 3 of 1983. Comp. Ex. E-2, E-3; Def. Exs. 10, 11.

 Mr. Timoney claims that he responded to plaintiff's request by phone "on several occasions" in order to explain to him why he was not eligible for the EAB contributions made after 1980 and told him he could appeal the denial of his claim to the Employee Benefits Committee. Timoney Aff. P8. Mr. Timoney also plains that a letter plaintiff received in May of 1984 essentially reiterates and confirms in writing the explanations he had given to plaintiff over the phone. Id. P11.

 This letter stated that the broad language regarding the 100% vesting exception had been interpreted by the Employee Benefits Committee to apply only to two specific instances of employee discharge: one instance would occur when the Bank "initiates a specific program which results in an individual's transfer to a nonparticipating affiliate or Shareholder Bank"; the other instance would arise "when the Company [i.e., EAB], through a specific program of organizational restructuring or budgetary control, eliminates a number of positions." Def. Ex. 12; Pl. Aff. Ex. H-4. The letter concluded that since only plaintiff's position was eliminated and that he was not one of a "number of positions" being eliminated, he did not fall within these two instances in which the exception applied. Id.

 The letter further stated that it would behoove plaintiff to submit a formal appeal from his claims' denial within 60 days after the receipt of that letter, despite the Committee's belief that it had already satisfied plaintiff's request for an explanation the year before and that he had not yet in its view submitted a formal appeal. Id.

 By a letter, dated June 11, 1984, plaintiff informed the Committee that it was his position that the Committee's failure to reconsider his initial request of May 3, 1983, for an explanation was "already a year late." Def. Ex. 13.

 In addition to EAB's Employee Benefits Committee's failure to treat his request for an explanation of his claim's denial as a formal appeal, plaintiff also alleges that Mr. Timoney, on behalf of the Employee Benefits section, failed to send him copies of the ISP plan and trust within the 30-day period within which such a request should be responded to according to Section 502(c) of ERISA, 29 U.S.C. § 1132(c). Mr. Timoney claims that initially he had directed an assistant to send copies of the ISP plan and trust to plaintiff; upon later learning that plaintiff had not yet received these materials, he made sure copies were sent. Timoney Aff. PP8-10. Plaintiff alleges that he did not receive these copies until 42 days after the initial 30-day period when he made his first request [i.e., May 3, 1983] had elapsed. Comp. P88. Under Section 502(c) of ERISA, a court has discretion to hold an administrator, such as Mr. Timoney, personally liable, up to $100.00 a day, for each day that elapses ...


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