Bahl v. Royal Indem. Co.
| Citation | 115 F.3d 1283 |
| Decision Date | 28 May 1997 |
| Docket Number | No. 96-1810,96-1810 |
| Parties | 74 Fair Empl.Prac.Cas. (BNA) 1060, 70 Empl. Prac. Dec. P 44,767 Dharam V. BAHL, Plaintiff-Appellant, v. ROYAL INDEMNITY COMPANY and Royal Insurance Company of America, Defendants-Appellees. |
| Court | United States Courts of Appeals. United States Court of Appeals (7th Circuit) |
James V. Daffada, George LaCorte, Karacic & Daffada, James A. Roth (argued), Chicago, IL, for Plaintiff-Appellant.
Michael T. Roumell, Tracey L. Truesdale (argued), Murphy, Smith & Polk, Chicago, IL, for Defendants-Appellees.
Before POSNER, Chief Judge, EASTERBROOK and RIPPLE, Circuit Judges.
After he was fired as a property underwriter for Royal Indemnity Company ("Royal Indemnity"), Dharam Bahl brought this suit alleging that his former employer willfully discriminated against him and terminated his employment on the basis of his age and national origin. The district court granted the defendants' motion for summary judgment on both claims. Mr. Bahl now appeals the entry of summary judgment on his claim of discrimination based on national origin pursuant to Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. For the reasons set forth in the following opinion, we affirm the judgment of the district court.
Dharam Bahl was born in India in 1944. He earned his bachelor's and master's degrees in the United States and worked as a property underwriter in this country for more than fifteen years. From 1987 until his discharge on April 14, 1994, he was employed by Royal Indemnity in its Royal Global Division ("Royal Global") office in Chicago, Illinois. 1 His primary responsibility was underwriting international or global property insurance for companies with facilities in two or more foreign countries. As a property underwriter, Mr. Bahl was required to evaluate the risk of insuring a particular piece of property. This responsibility required that he analyze such factors as the construction of the building, its occupancy, fire protection, internal and external exposures to hazards and loss, and the property's history of loss at that site. Based on this information, he determined whether it was desirable to insure the property. Once he found the property insurable, he then determined both the rates to be used in setting the insurance premium and the amount of deductibles allowed. For policies that carried a deductible of less than $100,000, state insurance laws regulated the rate to be charged. When a policy's deductible was $100,000 or more, however, Mr. Bahl, as the underwriter of the policy, determined the rate of insurance. In those cases, he was required by state law to document his method for determining the rate in the policy file. This documentation was required so that the insurance company could demonstrate that it was not pricing risks arbitrarily or unfairly.
Mr. Bahl's title in the Chicago office of Royal Global was first Midwest Regional Property Manager and later Global Account Executive; however, his duties remained the same under both appellations. His supervisor in that office was Raymond L. Trahant, Jr., the Midwest Regional Manager. Mr. Bahl also reported to the North American Underwriting Manager in New York concerning his underwriting duties. The two individuals who held that position during Mr. Bahl's employment were Joe Gray and Al Colosimo. The reporting senior of Gray, Colosimo and Trahant was the Vice President for North American Operations, Alan Driscoll. Driscoll joined Royal Indemnity in 1991 and became its Vice President in 1993; he was charged with overseeing the Royal Global operations of the New York, Chicago and Los Angeles offices.
Within months of Driscoll's arrival at Royal Indemnity in 1991, the two underwriting managers complained to Driscoll that Mr. Bahl would not take direction and was uncooperative. They also stated that, at times, Mr. Bahl's submissions to the New York office for approval were incomplete and lacking critical details. Shortly thereafter, when Driscoll and Trahant were discussing Mr Mr. Bahl's performance was reviewed on an annual basis by his supervisor, Trahant. His performance reviews during the first five years of employment were satisfactory. 3 In the 1992 performance review, Trahant commented that Mr. Bahl R.23 at 11 para. 34. He also noted that an action point agreed upon by Trahant and Mr. Bahl was that "all business will be in compliance with state, Royal USA regulations." Id. at 145. His overall comments, however, were positive:
Bahl's abilities, Trahant assured Driscoll that, although compliance had been an issue at one time, it no longer was a problem, and that all of the Chicago office's policy files had been brought into compliance. Driscoll himself recounted two occasions on which he questioned Mr. Bahl's work and lacked confidence in his abilities as a result of those discussions. 2
[Mr. Bahl] continues to do a very good job. Respected by all the brokers for his professional approach. Has exceeded his premium goals. He is very dependable and loyal. His performance is consistent with time in job and responsibilities. He grows to the demands made on his job.
However, Mr. Bahl's performance review for 1993 was rated "needs improvement." According to Trahant, Driscoll directed him to give Mr. Bahl that rating, but Trahant did not agree that it was appropriate. In the written text of Trahant's review, Trahant separately rated Mr. Bahl's job knowledge as very good and commented that Mr. Bahl was dependable and worked well with co-workers to accomplish the company's and the regional department's goals. About one week later, on April 14, 1994, Driscoll told Mr. Bahl that his employment was terminated. In the following section, we shall examine in greater detail the circumstances that preceded that termination.
According to Royal Indemnity, it was the company's examination into the rating and underwriting practices of the Royal Global division that led to Mr. Bahl's lower 1993 evaluation and eventual termination in 1994. Royal Indemnity, concerned about the compliance of its insurance practices with state insurance laws, had its Market Conduct Compliance Department conduct an examination of the rating and underwriting practices in Royal Global. This review of policies written by Royal Global was meant to simulate an examination conducted by a state insurance department and to identify potential violations so that Royal Global could take corrective action. The examination was led by the Regulatory Compliance Division Manager, Richard Ballantine.
Following this examination in November 1992, the findings were distributed to members of Royal Global's management, including Tom Brown, Managing Director, and I have to view these findings as a serious failure on the part of Management. It typifies the hands off style which I abhor. I need to know the following by urgent return fax:
Driscoll, who was about to become Vice President of North American Operations for Royal Global. On January 29, 1993, upon receipt of the report, Brown wrote to Driscoll of his disappointment and concern with the findings of the market conduct examination. He believed that there had not been strict adherence to statutory requirements and ordered Driscoll to bring the files into compliance:
Are there grounds for immediate termination for the responsible Underwriters and Underwriting Management? If not, why not?
I presume that compliance is a feature of job descriptions and authority levels. If not, why not?
I want your immediate concentrated efforts applied to rectifying all non compliance issues. I do not care if you work nights and weekends, but I want your assurances that these will be rectified immediately, and I want a guaranteed deadline by which you will meet compliance totally.
R.26 at 361-62. Once Driscoll received this letter, he issued a memorandum to Royal Global's Underwriting and Rating staff to review all their new and existing policy files to ensure that the files were in compliance. He also arranged for a mandatory seminar on compliance issues for all underwriters. In early 1994, Royal Global conducted internal audits of its offices in New York, Chicago and Los Angeles.
The audit of the Chicago office, conducted between January 31 and February 4, 1994, reviewed property and casualty account files and examined both compliance and underwriting issues. The audit team included Driscoll; Ballantine, Regulatory Compliance Division Manager; and John Dugan, Underwriting Account Executive in Royal Global's New York office. Ballantine reviewed the accounts for compliance with state law, and Driscoll and Dugan reviewed them from an underwriting standpoint. The Chicago office had prior notice of the audit and the auditors prepared written work sheets documenting their findings for each account file they reviewed. Mr. Bahl criticized the audit procedure, however. He claimed that there was no notice of the audit format, no work sheets provided, no list of the accounts to be reviewed and no checklist of the elements the auditors were checking.
The auditors were quite critical of Mr. Bahl's files. Ballantine noted, on his work sheets and in the summary of his findings, that most of the property files he reviewed did not contain the necessary rates documentation and that the lack of documentation was a serious violation. Ballantine's section of the summary, entitled "Compliance," stated:
Property--it appears that most files did not have the necessary documentation from a regulatory perspective. No full process for rate development was in the file as required. The majority of the files reviewed were eligible for various rating plans[;] however, no documentation...
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