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TOWNSEND v. EXCHANGE INS. CO.

February 9, 2002

VINCENT E. TOWNSEND, PLAINTIFF,
V.
EXCHANGE INSURANCE COMPANY; SELECTIVE INSURANCE COMPANY OF AMERICA; AND SELECTIVE INSURANCE GROUP, INC., DEFENDANTS.



The opinion of the court was delivered by: John T. Curtin, United States District Judge.

  INTRODUCTION

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.

BACKGROUND

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 weeks.

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.

Upon returning from disability leave on December 23, 1996, Townsend was reassigned to a Commercial Underwriter position with the same salary and benefits he had received in his former position as Team Leader.*fn2 Item 60, Ex. 11, p. 334. He also filled in for an AMS in Syracuse who had resigned. He handled calls from agents regarding anything that that AMS had quoted which was in the computer. Id., pp. 316, 318. He was never given a reason why he had not been selected for the Team Leader and AMS positions. Id., p. 318.

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.

Id., p. 1.

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.

Item 60, Ex. 10.

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 claim.

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.

DISCUSSION

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 ...


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