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ELLIS v. PROVIDENT LIFE & ACCIDENT INS. CO.

May 22, 1996

JAMES R. ELLIS, Plaintiff, against PROVIDENT LIFE & ACCIDENT INSURANCE COMPANY, and PROVIDENT LIFE & CASUALTY INSURANCE COMPANY, Defendants.


The opinion of the court was delivered by: POLLACK

 FINDINGS OF FACT AND CONCLUSIONS OF LAW

 Milton Pollack, Sr. U.S. District Judge

 This case was tried to the Court at a Bench trial. Few witnesses were called to the stand; the remainder of the testimony came from extensive depositions largely taken on behalf of the plaintiff.

 The plaintiff also presented at the trial as an aid to the Court pursuant to Rule 702 Fed. Rules of Evidence, a witness versed in statistical analysis, to present what purported to be a statistical age correlation between the various changes in territorial assignments of Provident's branch managers. That witness, of course, had no personal knowledge on the issues; she could only raise questions, not answer them from any actual knowledge of the facts.

 This Opinion and the facts found herein, together with its Conclusions, accompany the detailed additional Findings of Fact and the Conclusions of Law set forth separately.

 Overview

 Upon evaluating all the relevant facts and circumstances, including the basic realities which are set forth in detail and in the Findings of Fact and Conclusions of law, the Court is convinced and so decides that plaintiff failed to sustain his burden of proof by a preponderance of the credible evidence that he was the victim of intentional age discrimination in his employment.

 The decision of the defendants to split-off the two burgeoning Nassau-Suffolk and Westchester County district offices from the New York Branch Office and to create therefrom a separate branch office, was a reasonable exercise of informed judgment, not based in any part on intentional age discrimination against the plaintiff, and the reason therefor given to the plaintiff was not a false pretext. The credible evidence amply supported the defense that the plaintiff's age had no role in the employment decision involved, and no illegal discriminatory criteria entered into the determination.

 The record

 As evidenced by the record, the senior officers of Provident genuinely believed that the decision to split-off two district offices, with their meager personnel under the former configuration, and restructure them into a full-fledged Branch Office, created in Long Island under branch management and staffing, was conducive to increasing the services and further growth of the business of the two district offices.

 The age of the plaintiff (52) -- himself domiciled in metropolitan New York City and ultimately averse to moving to Long Island-- played no role in this view of the suburban district offices. Provident believed that the growing business in the satellite district offices had outgrown the skeletal district office organizations in those suburban counties, and had reached the point where they were too large to be handled most efficiently out of a metropolitan branch office located in Manhattan. Provident then concluded, after lengthy consideration, that those suburban counties could be serviced more efficiently and effectively by a fully staffed Branch Office and resident manager located in the suburbs. Defendants' belief was reasonable, reached in good faith and justified under all the facts and circumstances, even in the face of Ellis' excellent record as the New York Branch manager -- a factor which could have been and was validly considered by Provident under all the facts and circumstances.

 That Ellis believed that the move represented a flawed business judgment is understandable, since it meant to Ellis a contraction of part of his source of incentive compensation. Ellis nonetheless acknowledged Provident's right to change territory and incentive compensation.

 
"The Court: Did you find anything in the Chandler Papers that gave you an implied contract?
 
The Witness: Other than what is stated here and the layout of the commission schedules, no, but they did -- and they also say, which I agree, they had the right to change it down the road. That they did have a right to do." (R. 246.)

 Ellis, acting on his natural disappointment, retaliated by filing this suit under the Age Discrimination in Employment Act (ADEA), while he continued to remain employed as Provident's Branch Manager in the New York office, with his salary remaining untouched and his incentive compensation now stemming from metropolitan New York. In bringing this claim, Ellis expressed his belief that a territory could not become too large for a branch manager like himself to manage effectively -- even if it took in the entire United States, he said. (R. 145-46.)

 It is not the role of this Court to second guess untainted managerial decisions that fall within Provident's full discretion.

 The record is replete with evidence that the defendants genuinely believed the business reasons they communicated to the plaintiff as explanations for the split. Robert Fowler, the regional manager of the plaintiffs urban and suburban territory, explained in his deposition that the former configuration -- in which a broker on Long Island would have to turn in an application for insurance to the Westbury, Long Island district office, which would then have to send it to the Manhattan, New York branch office, which would then enter it into the New York City computer system, send it to the Home Office in Chattanooga, Tenn. for processing, have it sent back to Manhattan, and finally out to Westbury -- was highly inefficient, created a significant time constraint, and placed an undue administrative burden on the New York Branch Office. This concept was reinforced by Mr. Christiana, the executive-in-charge, who stated in his deposition that the decision was "market driven...we felt we could write, over time, more business in that area with those kinds of services." *fn1" (Dep. at 348.) In contrast to the limitations placed on district offices which had to clear their business through a branch office, Provident's branch offices were staffed differently, and were able to print and issue policies, pay claims, settle controversies, pay commissions and deal directly with the Home Office. (Id. at 54.)

 Ellis was informed in November, 1990, that management was considering substituting a branch office in Long Island for the district office set-up in the suburbs of New York. He was offered the opportunity to manage the Long Island branch, which he later declined, preferring to remain in Manhattan.

 Corroboration

 The defendants' intentions and purposes were corroborated (apparently unexpectedly) by Eugene McCarthy, called as a witness on behalf of plaintiff. McCarthy testified that he, like the plaintiff, had been told by management that Provident was creating a new branch office in order to allow more efficient servicing of brokers and their business, (R. 442), and because the suburban territory had become too large for a New York City based branch manager to cover effectively. (R. 448-49.) McCarthy confidently estimated he could produce business in an amount that was well-above the region's past record. He also testified that he believed that Christiana was creating a branch office in Long Island for those reasons. (R. 442.)

 Conclusion

 In sum, according to plaintiff's testimony, Ellis' sole claim was that the split of the district offices in the suburbs from the New York Branch Office located in Manhattan, in order to create a new branch, was undertaken with discriminatory age intent. (R. 206-07.)

 Having seen and heard the witnesses, observed their demeanor, considered the documentary evidence and the voluminous depositions and the contradictions therein of trial testimony and the necessary inferences and probabilities flowing therefrom, the Court has resolved the issues of credibility in favor of defendants and against the plaintiff and his expert. No statistically significant evidence adduced presented against the totality of the evidence in this record credibly supports an illegal relationship or purpose between the age of defendants branch managers and the territorial splits that occurred in the Provident branch offices. The credible proof fails to establish that the defendants acted out of intentional age discrimination against Provident's branch office managers from time to time in the decisions to split and upgrade territory.

 The foregoing, together with the detailed findings filed herewith, shall constitute the findings of fact, in accordance with Rule 52(a) of the Federal Rules of Civil Procedure.

 SO ORDERED

 Dated: May 22, 1996

 Milton Pollack

 Senior United States District Judge

 ADDITIONAL FINDINGS OF FACT

 1. On December 11, 1991, James Ellis filed a complaint against his employer, the Provident Life & Casualty Insurance Co. and its parent company, the Provident Life & Accident Insurance Company (collectively "Provident"), alleging claims of age discrimination proscribed by the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. §§ 621-34a, and N.Y. Exec. Law § 296.

 2. Ellis started working for Provident in 1967 as a sales consultant in Miami, Florida, and Provident assigned him to be New York branch sales office manager in 1972, the position he holds today. (R. 3-4.) ...


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