The opinion of the court was delivered by: John T. Curtin, United States District Judge.
Defendants Exchange Insurance Company, Selective Insurance Company of
America, and Selective Insurance Group, Inc. (collectively, defendants)
have filed a motion for partial summary judgment, Item 58, seeking
dismissal of plaintiff Vincent Townsend's claims for back pay, front
pay, and punitive damages under the Age Discrimination in Employment Act
("ADEA") and the New York Human Rights Law ("HRL"), as well as dismissal
of his compensatory damages claims under
the ADEA. In addition,
defendants seek dismissal of any claim of age discrimination that Mr.
Townsend may have based on the hiring of James Chavanne as a Team
Leader, a position for which Mr. Townsend had applied. Mr. Townsend has
opposed defendants' motion. Items 67-69. Oral argument took place on
January 4, 2001.
In 1964, Vincent Townsend began his career in the insurance industry.
Item 60, Ex. 3, ¶ 13. After holding a number of positions with different
insurance companies, mainly in Central and Western New York, he was hired
by Exchange Insurance Company in April 1987 as Agri Business Manager.
Id., ¶ 18. He was promoted to Senior Marketing Representative, and was
later made Team Leader of the Lower Hudson Valley and Western New York
Commercial Underwriting Teams. Id. In 1992, Exchange was acquired by
Selective Insurance Company, and Townsend became employed by Selective.
Id., ¶ 21. In 1996, the Buffalo office of Selective was restructured, and
the number of Underwriting Team Leader positions was reduced from three
to two. Item 60, Ex. 1, pp. 1, 2. In addition, the Marketing
Representative positions were eliminated and replaced with six Agency
Management Specialist (AMS) positions. The employees were told to reapply
for the positions they desired. Item 60, Ex. 11, p. 14. Townsend, who was
53 years old at the time, applied for one of the Team Leader positions
and for two of the AMS positions. Id., p. 2. He was interviewed for those
positions in July 1996. Item 60, Ex. 11, pp. 291-92. Townsend became ill
during the second week of August 1996, and underwent heart surgery that
same month. Id., p. 307. He was out of work on paid disability leave
until he returned to work on December 23, 1996. Id., p. 308. Prior to his
return, he was told in a telephone conversation in early December that
when he came back, he would have a job. Id., p. 148. Also in early
December, through a conversation his wife had with one of his
co-workers, Townsend learned he was not selected as a Team Leader and
would return as an underwriter. Id., p. 312. The company policy was
explained by its Director of Human Resources: "Selective's policy was
that employees who were not able to work within 12 weeks of the start of
a disability were not guaranteed a return to their former or similar
positions. . . . Selective's policy was to work with such employees to
identify any openings for which they might be qualified at the time they
were able to return to work." Item 60, Ex. 8, ¶ 5. By the time he
returned to work, Townsend had been on disability leave for over 16
In September 1996, the Team Leader positions were filled by Anthony
Morano, age 61, and Arlene Callahan, age 46.*fn1 The AMS positions were
also filled by others. Item 61, ¶ 8. In October 1996, Mr. Morano was
removed as Team Leader. On December 5, 1996, James Chavanne, age 35, was
selected to fill Morano's former Team Leader position. Id., ¶¶ 9, 10.
On January 3, 1997, Townsend told his supervisors that he wished to
resign. He asked whether Selective would provide him with the
displacement package that employees displaced in the restructuring had
received. Id., p. 322. He submitted a letter of resignation on that
date. He testified that he requested the displacement package because "I
didn't think it was proper that I hadn't received one of the jobs since I
was more qualified than the other people." Id., p. 321. On January 20,
1997, Townsend signed a separation agreement, containing the terms of his
displacement package. Townsend would receive twenty weeks of pay, and his
last day of work would be March 29, 1997. Id., p. 329. Selective provided
Townsend with one additional week of pay, without his having to work, to
make his separation effective April 6, 1997. This would insure his
eligibility for a pension. Id., p. 330.
On June 19, 1997, Townsend swore to a charge, submitted to the Equal
Employment Opportunity Commission (EEOC). Item 60, Ex. 9. He asserted:
At the time of my termination, I was a Team Leader for
two underwriting teams serving the Western New York
and Lower Hudson Valley regions. I was qualified for
the position I held and was qualified for other
positions that were created to supplant or replace the
Team Leader position, including Agency Management
Specialist. . . .
On or about September 1, 1996, I was effectively
terminated from my position as Team Leader because of
my age, in violation of the Age Discrimination in
Employment Act and the New York State Executive Law.
Following its investigation, the EEOC found no reasonable cause that
the ADEA had been violated. The letter, dated January 21, 1998, stated:
You alleged that you were terminated from your
position as a Team Leader . . . because of your age. . . .
. . . You were not selected for the [Team Leader] position and the
Respondent instead selected a 61 year-old individual and a 47
year-old-individual. You were offered and accepted a position as an
Underwriter which had not [sic] reduction in salary. The facts do not
support your allegation that you were terminated from your position as
a Team Leader especially in light of the fact that the Respondent
selected a 61 year-old to retain the position.
On November 3, 1997, Mr. Townsend filed a complaint in federal court
alleging age discrimination in employment under the ADEA and HRL,
constructive discharge, compelled self-defamation, and a violation of
§ 510 of ERISA. Item 1. He asserted that in September 1996, he was
demoted, constructively discharged, and replaced because of age
discrimination while he was on disability leave. Id., ¶ 18. He claimed he
was "replaced as Team Leader by a younger, less experienced employee and
was denied alternative employment positions solely because of his age."
Id., ¶ 20. In his responses to Defendants' First Set of Interrogatories,
Townsend had identified only Arlene Callahan as "the
person alleged in
paragraph 20 of the Complaint to be the `younger, less experienced
employee' who replaced Plaintiff as Team Leader. . . ." Item 60, Ex. 6,
pp. 5-6. He also noted that Morano's appointment as Team Leader was
"intended to be interim in nature only while `more important' positions
were staffed as part of the corporate restructuring." Id., p. 6.
Defendants filed a motion for summary judgment in April 1999, Item 14,
seeking to dismiss plaintiff's complaint. On March 29, 2000, United
States Magistrate Judge Hugh B. Scott issued a Report and Recommendation
granting defendants' summary judgment motion on the constructive
discharge, compelled self-defamation, and ERISA claims, and denying the
motion on the age discrimination claims under ADEA and HRL. Item 26. The
Report and Recommendation noted that "Townsend admits that he voluntarily
resigned from his position as a Commercial Lines Underwriter so that he
could take advantage of the displacement package offered to individuals
who lost their jobs as a result of the 1996 reorganization. . . ." Item
60, Ex. 1, p. 5. The Report and Recommendation also pointed out, with
regard to the Underwriter Team Leader positions, that just a few months
after the appointments of Morano and Callahan were made, "Morano was
demoted and replaced by James Chavanne who was 35 years old at the
time. . . . Despite the fact that Townsend had formerly held the
Underwriter Team Leader position, it appears that he was not considered
as a replacement for Morano." Id., pp. 7-8. This finding suggested that
the Magistrate Judge considered the demotion of Mr. Morano and his
replacement by Chavanne may be part of Townsend's age discrimination
On May 17, 2001, this court affirmed the findings in the Report and
Recommendation. Item 37. This court then issued an Order requiring
plaintiff's counsel to inform defense counsel whether Townsend would raise
an additional claim of age discrimination based on the hiring of
Chavanne, as suggested in the Report and Recommendation. Item 41.
Plaintiffs counsel responded via letter that "We would, therefore, agree
with the Magistrate's Report and Recommendation that the appointment of
James Chavanne after Mr. Morano's extremely brief stint as Team Leader
was an act of age discrimination." Item 42. Discovery was reopened, and
Mr. Townsend was deposed again. During his deposition, Townsend testified
that, with regard to the paragraph in his complaint wherein he asserted
that he was replaced as a team leader by a "younger, less experienced
employee," he was referring to both Arlene Callahan and James Chavanne.
Item 60, Ex. 11, p. 444. Subsequently, defendants filed the instant
partial summary judgment motion.
I. Summary Judgment Standard
A motion for summary judgment may be granted only when it is shown that
"there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c);
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The party seeking
summary judgment "bears the initial responsibility of informing the
district court of the basis for its motion, and identifying [which
materials] . . . it believes demonstrate the absence of a genuine issue
of material fact." Celotex Corp., 477 U.S. at 323. The substantive law
governing the case will identify those facts which are material, and
"[o]nly disputes over facts that might affect the outcome of the suit
under the governing law will properly preclude the entry of summary
judgment." Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986).
II. Front Pay, Back Pay, Punitive Damages, Compensatory Damages
The purpose of awarding damages in employment discrimination cases is
to make the victim whole. See Landgraf v. USI Film ...