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BARNELL v. PAINE WEBBER JACKSON & CURTIS

July 26, 1985

MARILYN BARNELL, Plaintiff,
v.
PAINE WEBBER JACKSON & CURTIS, INCORPORATED and STEVEN KRAUS, Defendants.



The opinion of the court was delivered by: KRAM

SHIRLEY WOHL KRAM, U.S.D.J.

The above-captioned action is before the Court upon the motion of defendant Paine Weber Jackson & Curtis, Incorporated ("Paine Webber") for summary judgment in its favor. For the reasons stated below, defendant's motion for summary judgment is denied.

 BACKGROUND

 Paine Webber employed plaintiff Marilyn Barnell as a stockbroker in its Park Avenue, New York City office from November, 1972 until she terminated on March 29, 1979.* On April 17, 1980, plaintiff filed a complaint with the New York State Division of Human Rights ("NYSDHR") charging Paine Webber with gender-based discrimination in violation of the New York State Human Rights Law, N.Y. Exec. Law § 290 et seq., and Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C.A. § 2000e et seq. Title VII). The NYSDHR dismissed the complaint on April 29, 1982, because it had not been filed within one year of the alleged discrimination, as required under New York law. N.Y. Exec. Law § 297 (5) (McKinney 1982). The dismissal was affirmed for the same reason on subsequent appeals to the New York State Human Rights Appeal Board, on November 3, 1983, and the New York State Supreme Court Appellate Division, First Department, on December 4, 1984.

 In addition to these state proceedings, plaintiff filed an administrative discrimination complaint with the Equal Employment Opportunity Commission ("EEOC") on or about April 17, 1980. Thereafter, she requested, and received, a Right to Sue Letter from the EEOC, and commenced the instant action on or about March 29, 1982. Paine Weber and Kraus moved for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure on the ground that plaintiff's charge of sex discrimination filed with the EEOC was not timely. On May 9, 1983, Judge Gagliardi denied the motion, holding that an issue of fact existed as to whether plaintiff's alleged mental disability was sufficient to toll the EEOC filing period limitation, and thereby render her charge timely. Kraus also moved for summary judgment on the ground that plaintiff's EEOC charge did not name him as a respondent. The Court granted that motion. Plaintiff's motion for appointment of counsel was denied without prejudice to renewal with supplemented information.

 Thereafter, plaintiff renewed her motion for appointment of counsel and provided sufficient information. Defendant moved for a separate trial on the issue of the timeliness of plaintiff's complaint with the EEOC, pursuant to Rule 42(b) of the Federal Rules of Civil Procedure. This Court recognized that a decision adverse to plaintiff on this issue would obviate the need for further proceedings and thus granted both motions by Memorandum Opinion and Order dated January 19, 1984.

 Paine Webber has now moved for summary judgment on the grounds of res judicata and collateral estoppel.

 DISCUSSION

 Relying on Kremer v. Chemical Constr. Corp., 456 U.S. 461, 72 L. Ed. 2d 262, 102 S. Ct. 1883 (1982), Paine Webber argues that the doctrines of res judicata and collateral estoppel apply to Title VII actions, requiring federal courts to give preclusive effect to a state court decision upholding a state administrative agency's dismissal of an employment discrimination claim. Here a state agency dismissed plaintiff's claim as untimely, and that decision was upheld by the state court. The state proceeding specifically involved the timeliness of plaintiff's claim, and plaintiff did litigate the issue fully. Barnell, in the state proceedings, argued that the facts did not support a finding that her claim was filed more than one year after her termination; she did not, however, argue that the limitation period should be equitably tolled because of her incapacity around the time of her termination. Paine Webber argues that plaintiff is barred, by the doctrines of res judicata and collateral estoppel, from raising the issue of an equitable tolling of the time limitation in the present action because she failed to raise that issue in her earlier state proceeding. Accordingly, defendant argues, Barnell's claim should be dismissed as untimely.

 Res judicata and collateral estoppel preclude the rehearing of any issues which "were or could have been raised" in an earlier action. Kremer, 456 U.S. at 466 n.6; Allen v. McCurry, 449 U.S. 90, 94, 66 L. Ed. 2d 308, 101 S. Ct. 411 (1980). The doctrine of res judicata, however, does not require a party to raise a futile argument in the first proceeding in order to preserve the potentially viable argument for a later proceeding. See Costello v. Pan American World Airways, Inc., 295 F. Supp. 1384, 1389 (S.D.N.Y. 1969); cf. State Farm Mutual Auto. Ins. Co. v. Duel, 324 U.S. 154, 162, 89 L. Ed. 812, 65 S. Ct. 573 (1945) (estoppel does not apply when change in law has intervened between time of first judgment and second action); Robbins v. Police Pension Fund, 321 F. Supp. 93 (S.D.N.Y. 1970) (federal constitutional issue could not be raised in state proceeding; state decision not a bar to subsequent federal action). There is no dispute that Barnell did not raise the issue of equitable tolling in the state proceedings. The question involved in this motion for summary judgment, therefore, is whether plaintiff "could" have raised the equitable tolling issue in the course of the state proceeding.

 The relevant New York statute is section 297 of the Executive Law, subdivision 5, which states: "[a]ny complaint filed pursuant to this action must be so filed within one year after the alleged unlawful discriminatory practice." New York courts have interpreted this requirement strictly. The New York Court of Appeals emphasized the word "must" and described the requirement as a "condition to be performed before the substantive right to the relief sought arises." Board of Educ. v. New York State Division of Human Rights, 44 N.Y.2d 902, 904, 407 N.Y.S. 2d 636, 637, 379 N.E.2d 163 (1978). See also Horn v. New York State Human Rights Appeal Board, 75 A.D.2d 978, 428 N.Y.S.2d 368 (3rd Dep't 1980); Consolidated Edison Company of New York, Inc. v. New York State Human Rights Appeal Board, 65 A.D.2d 546, 409 N.Y.S. 2d 141 (2d Dep't 1978). Thus, it would appear that the NYSDHR had no power to toll the statutory time limitation.

 Defendant urges that Stacey v. McDaniel, 54 A.D.2d 645, 387 N.Y.S.2d 631 (1st Dep't 1976), holds that the limitations period for filing a charge of discrimination is subject to equitable tolling in appropriate circumstances under New York law. Defendant's reliance on Stacey is misguided. In Stacey, the plaintiff claimed that he had orally made a complaint to a member of NYSDHR's staff at the NYSDHR office approximately five months after his termination. He was assured at that time, he claimed, that his oral complaint was sufficient to effect the timely filing of his complaint, but that he should follow it up with specifics. Plaintiff allegedly sent a letter containing specifics a few days thereafter, but did not submit his formal complaint until a year later. Those factual assertions were essentially verified by the NYSDHR employee he had spoken with during his initial visit to the NYSDHR office. The First Department reversed the trial court's dismissal of Stacey's complaint as untimely, holding that if the facts were as alleged, the complaint should be processed "as timely filed." 387 N.Y.S. 2d at 632.

 Stacey, therefore, does not indicate that the state limitations period is subject to equitable tolling. Rather Stacey holds that, on the facts of that particular case, the complaint had been timely filed. It was the internal procedures of the NYSDHR that had failed to adequately assure that plaintiff's oral complaint was processed properly to effect a formal complaint. Cf. e.g., Rosenberg v. Martin, 478 F.2d 520, 522 n.la (2d Cir. 1973) (Friendly, J.) (for limitations purposes, action treated as commenced when Clerk of Court receives complaint, irrespective of when formally filed following internal courthouse procedures); Simpson v. Bank of New York, Empl. Prac. Dec. (CCH) P32,114, at 22,079 (S.D.N.Y. 1981) (complaint timely filed when delivered to Pro Se Clerk within limitations period, irrespective of delay before official docketing due to internal courthouse procedures). In the final analysis, defendant does not cite a single case, and the Court has found none, in which a plaintiff successfully argued that the state limitations period should, or more importantly could, be equitably tolled.

 With regard to plaintiff's federal claim, defendant properly acknowledges that the Title VII limitations period is not a jurisdictional prerequisite, but may be equitably tolled under appropriate circumstances if necessary to honor the statute's remedial purposes. Zipes v. Trans World Airlines, 455 U.S. 385, 71 L. Ed. 2d 234, 102 S. Ct. 1127 (1982). No court in New York has adopted the reasoning of Zipes in addressing the state limitations period. Thus, as discussed above, in New York, the statute of limitations cannot be equitably tolled. Defendant argues that Barnell should, nonetheless, have raised her equitable tolling argument in the state proceedings to give the ...


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