Bernstein v. Aetna Life & Cas.

• Decision Date: 31 March 1988
• Docket Number: No. 86-2358,86-2358
• Citation: 843 F.2d 359
• Parties: 46 Fair Empl.Prac.Cas. 824, 3 Indiv.Empl.Rts.Cas. 380 Marvin BERNSTEIN, Plaintiff-Appellant, v. AETNA LIFE & CASUALTY; Aetna Casualty and Surety Company, a Connecticut corporation; Aetna Casualty and Surety Company of America, a Connecticut corporation; Aetna Casualty and Surety Company of Illinois, a Connecticut corporation; Aetna Fire Underwriters Insurance Company, a Connecticut corporation; Aetna Life Insurance and Annuity Company, a Connecticut corporation; Aetna Life Insurance Company, a Connecticut corporation; Aetna Life Insurance Company of Illinois, an Illinois corporation; Greg M. Fischer, husband; Jane Doe Fischer, wife, Defendants-Appellees
• Court: U.S. Court of Appeals — Ninth Circuit

Page 359

843 F.2d 359

46 Fair Empl.Prac.Cas. 824,

3 Indiv.Empl.Rts.Cas. 380

Marvin BERNSTEIN, Plaintiff-Appellant, v. AETNA LIFE & CASUALTY; Aetna Casualty and Surety Company, a

Connecticut corporation; Aetna Casualty and Surety Company

of America, a Connecticut corporation; Aetna Casualty and

Surety Company of Illinois, a Connecticut corporation;

Aetna Fire Underwriters Insurance Company, a Connecticut

corporation; Aetna Life Insurance and Annuity Company, a

Connecticut corporation; Aetna Life Insurance Company, a

Connecticut corporation; Aetna Life Insurance Company of

Illinois, an Illinois corporation; Greg M. Fischer,

husband; Jane Doe Fischer, wife, Defendants-Appellees

No. 86-2358.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Dec. 16, 1987.

Decided March 31, 1988.

Grace McIlvain, Miller & Pitt, P.C., Tucson, Ariz., for plaintiff-appellant.

David J. Hamilton, O'Melveny & Myers, Los Angeles, Cal., for defendants-appellees.

Appeal from the United States District Court for the District of Arizona.

Before FLETCHER, WIGGINS and NOONAN, Circuit Judges.

WIGGINS, Circuit Judge:

Marvin Bernstein appeals partial summary judgment for Aetna Life & Casualty ("Aetna") and summary judgment for Greg Fischer. Bernstein was fired by Aetna, and he sued the company and his immediate supervisor, Fischer. Bernstein claimed (1) age discrimination under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Secs. 621-634 (1982), and the Arizona Civil Rights Act (ACRA), Ariz.Rev.Stat.Ann. Secs. 41-1461-1465 (1985 & Supp.1987), (2) religious discrimination under Title VII, 42 U.S.C. Secs. 2000e et seq., and the ACRA, (3) wrongful discharge, (4) breach of an implied employment contract, and (5) tortious interference with a business relationship. The district court granted summary judgment to defendant Fischer on all counts, and to Aetna on counts 3, 4 and 5. We reverse and remand.

BACKGROUND

Bernstein worked for Aetna 24 years. His last position was as the District Manager of the Tucson District Office of the Phoenix Career General Agency. Bernstein claims he was told when he joined Aetna that it was a lifetime career and there would always be a position at Aetna for someone who did well. These alleged promises were reinforced by later statements by superiors and others. Since Bernstein had previously held a supervisory position with Aetna, he claimed to know of Aetna's personnel policies and practices. He alleged it was Aetna's policy or practice that long-term employees who encountered performance difficulties would be counseled, transferred, or offered a demotion, but would not be terminated unless they were guilty of wrongdoing such as embezzling or misallocating funds. Bernstein claims he relied on Aetna's written personnel policies setting forth detailed procedures for warning and probation periods.

In May, 1980, Greg Fischer became the General Agent in Phoenix and thus Bernstein's supervisor. Bernstein claims Fischer was prejudiced against him as a Jew and as an older employee. In October, 1982, Fischer put Bernstein on written warning. This was, Aetna claims, prompted by Bernstein's failure to meet certain standards in the years 1980, 1981, and the first half of 1982. After the warning period, Bernstein was put on probation. He was again given a ninety-day goal to meet. Bernstein was fired on April 29, 1983.

On October 11, 1983, Bernstein filed a charge of age and religious discrimination with the Equal Employment Opportunity Commission ("EEOC") and the Arizona Civil Rights Division ("ACRD"), naming Aetna as the sole respondent and alleging that John Michael, a vice-president of Aetna, was responsible for his termination. Greg Fischer was not mentioned by name or title. The ACRD investigated the matter and found that there was "no cause" to believe that Aetna had discriminated against Bernstein.

On October 4, 1984, Bernstein and his wife filed a five-count complaint against Aetna, as well as against Greg Fischer and his wife. The district court later dismissed the wives from this action. The district court also dismissed the age and religious discrimination claims against Greg Fischer, under both Arizona and federal law. The court also dismissed the common law claims (counts 3, 4, and 5) against Fischer for lack of pendent jurisdiction. Upon motion, the district court permitted Bernstein to amend his complaint to allege diversity jurisdiction in addition to federal question

jurisdiction, thus, in effect, reinstating the state-law claims against Fischer. Bernstein filed an amended complaint to this effect. Thereafter, the district court granted summary judgment to Aetna and Fischer on counts 3, 4, and 5, and to Fischer alone on counts 1 and 2. The district court entered final judgment, pursuant to Fed.R.Civ.P. 54(b), on these counts. As a result, only the age and religious discrimination claims against Aetna remain in the district court. Bernstein timely appeals.

ANALYSIS

A. Standard of Review.

A district court's grant of a motion for summary judgment is reviewed by the appellate court de novo. The general standard an appellate court applies in reviewing the grant of such a motion is the same as that employed initially by the district court under Fed.R.Civ.P. 56(c). Allen v. A.H. Robins Co., 752 F.2d 1365, 1368 (9th Cir.1985). Rule 56(c) states that summary judgment is proper when the pleadings and discovery, read in the light most favorable to the non-moving party, show 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.

B. Failure to Name Fischer in the Administrative Charge.

The district court granted Fischer's motion to dismiss on counts 1 and 2 for lack of subject matter jurisdiction. The basis for this dismissal was that Bernstein's charge of discrimination filed with the ACRD did not name Fischer. There is no question that Fischer is not mentioned by name in the charge.

The court below ruled that Bernstein had failed to allege facts in the charge from which the court could infer that the unnamed party violated Title VII or the ADEA. See Chung v. Pomona Valley Community Hosp., 667 F.2d 788, 792 (9th Cir.1982). A reading of the charge filed with the ACRD undermines this finding. Bernstein stated that the reason for his firing was that he "failed to meet the probationary period requirements." He then wrote, in his discrimination statement, that "the rationale given by [Aetna] to justify my termination is pretextual." Aetna has conceded that Fischer established the terms of Bernstein's probation. This satisfies the requirement of alleging facts from which the court could infer that the unnamed party violated Title VII or the ADEA. See Bratton v. Bethlehem Steel Corp., 649 F.2d 658, 666 (9th Cir.1980); Wasilchuk v. Harvey's Wagon Wheel, Inc., 610 F.Supp. 206, 208 (D.Nev.1985). ¹

We rule that even using the standard employed by the district court, Fisher's dismissal was not warranted because even though not named in the administrative charge, the facts alleged therein make out a claim against him.

C. Retroactivity of Arizona Court Decisions Allowing Common Law Actions for At-Will Employees.

The district court granted summary judgment on counts 3, 4, and 5 on two rationales. The first ground was that each of these counts was erroneously premised on two Arizona Supreme Court cases, Leikvold v. Valley View Community Hosp., 141 Ariz. 544, 688 P.2d 170 (1984), and Wagenseller v. Scottsdale Memorial Hosp., 147 Ariz. 370, 710 P.2d 1025 (1985), that were decided after Bernstein's cause of action arose and had only prospective effect. The district court, apparently relying on previous cases raising this issue, decided that Wagenseller and Leikvold should not be applied retroactively. We find, however, that Wagenseller and Leikvold have retroactive effect.

In Arizona, there is a presumption that decisions relating to civil matters have retroactive effect. Hawkins v. Allstate Ins. Co., 152 Ariz. 490, 504, 733 P.2d 1073, 1087, cert. denied, --- U.S. ----, 108 S.Ct. 212, 98 L.Ed.2d 177 (1987); Chevron Chemical The parties vigorously dispute whether the decisions in Wagenseller and Leikvold were foreshadowed in previous decisions by Arizona courts. Aetna suggests that the previous rule of an at-will employer's complete freedom to discharge employees, established in Dover Copper Mining Co. v. Doenges, 40 Ariz. 349, 357, 12 P.2d 288, 291-92 (1932), controlled until it was explicitly overruled by Wagenseller. It seems, however, that Arizona courts have themselves admitted that the rule in Dover Copper had been disintegrating for years. The Arizona Supreme Court in Wagenseller approvingly cited the language in Vermillion v. AAA Pro Moving & Storage, 146 Ariz. 215, 216, 704 P.2d 1360, 1361 (Ct.App.1985), arguing that its ruling upholding a public policy exception for at-will employment was the "logical conclusion" drawn from previous decisions of the court of appeals. Wagenseller, 147 Ariz. at 378, 710 P.2d at 1033 (citing the earlier appeals decisions in Daniel v. Magma Copper Co., 127 Ariz. 320, 620 P.2d 699 (Ct.App.1980), and Larsen v. Motor Supply Co., 117 Ariz. 507, 573 P.2d 907 (Ct.App.1977)). Moreover, the Wagenseller court approved of the rule in Leikvold as "merely a reiteration of employment law as it has existed for centuries." Wagenseller, 147 Ariz. at 383, 710 P.2d at 1038. See also Wagner v. City of Globe, 150 Ariz. 82, 85 n. 3, 722 P.2d 250, 253 n. 3 (1986) ("Despite the growing trend to create exceptions to the at-will doctrine, which may eventually swallow the rule, employers continue to cling to the doctrine. Exactly why is uncertain...."). It seems clear, therefore, that Arizona courts have themselves decided that the decisions in Leikvold and Wagenseller were foreshadowed by earlier case law.

                Co. v. Superior Court, 131 Ariz. 431, 435-36, 641 P.2d 1275, 1279-80 (1982).  To overcome this

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