Chace v. Champion Spark Plug Co.

• Decision Date: 09 March 1990
• Docket Number: Civ. No. PN-88-95.
• Citation: 732 F. Supp. 605
• Parties: Mrs. Richard P. CHACE, Executrix of the Estate of Mr. Richard P. Chace, et al. v. CHAMPION SPARK PLUG COMPANY.
• Court: U.S. District Court — District of Maryland

732 F. Supp. 605

Mrs. Richard P. CHACE, Executrix of the Estate of Mr. Richard P. Chace, et al. v. CHAMPION SPARK PLUG COMPANY.

Civ. No. PN-88-95.

United States District Court, D. Maryland.

March 9, 1990.

Robert B. Fitzpatrick, Mark D. Laponsky, David B. Fishman, Fitzpatrick & Verstegen, Washington, D.C., and Alan Serrins, Deinst & Serrins, New York City, for plaintiffs.

Russell H. Gardner, Jeanne M. Phelan, Whiteford, Taylor and Preston, Baltimore, Md. (John A. Garwood, Toledo, Ohio, of counsel), for defendant.

OPINION

NIEMEYER, District Judge.

Richard P. Chace, Samuel H. Posner and Richard D. Via sued Champion Spark Plug Company alleging that Champion had violated the Age Discrimination in Employment Act (the "ADEA"), 29 U.S.C. §§ 621-634 (1982), by terminating their employment because of their age. Their complaint seeks back pay with prejudgment interest, liquidated damages because they contend the termination was willful, reinstatement or, alternatively, an amount for the loss of future income known as front pay.

Prior to trial on motions raised by the parties, the Court determined that the issues of back pay, willfulness and liquidated damages would be submitted to the jury. The issue of front pay and its amount was determined to be "part of the panoply of remedies that can be considered in carrying out the equivalent of the equitable remedy of reinstatement" and was reserved for an equitable trial which was to follow the jury trial. Chace v. Champion Spark Plug Co., 725 F.Supp. 868, 871 (D.Md.1989).

The Court also ruled that prejudgment interest could be included as part of the award of a jury so long as its proof was presented separately. The parties agreed before trial that in the event the Court determined that prejudgment interest would not be allowable, it could be deducted by the Court from the verdict of the jury. Id. at 872.

Following a nine-day jury trial, the jury returned a verdict on November 3, 1989, in favor of the plaintiffs awarding $140,000 to Chace, $71,000 to Posner and $92,500 to Via. These amounts included prejudgment interest of $17,679 for Chace, $8,961 for Posner and $11,151 for Via. The jury also found that Champion had acted willfully in considering age as a determining factor in its termination decisions. This finding requires that liquidated damages be awarded in an amount equal to the back pay and benefits awarded by the jury. See 29 U.S.C. § 626(b) (incorporating the remedies of 29 U.S.C. § 216(b) (1982)).

The Court conducted the equitable portion of the trial on December 8 and 12, 1989, receiving evidence from the parties in connection with reinstatement and front pay. Thereafter, the parties filed proposed findings of fact and conclusions of law, as well as proposed judgments.

The Court now is presented with the issues (1) whether Posner and Via should be reinstated to their employment at Champion (Chace died before the commencement of the trial); (2) whether Posner and Via alternatively should be awarded front pay in lieu of reinstatement; and (3) whether the judgment should include both prejudgment interest and liquidated damages.

To the extent that this Opinion resolves equitable issues, it will constitute the findings of fact and conclusions of law required by Fed.R.Civ.P. 52(a).

I. FINDINGS OF FACT

Samuel H. Posner

Champion Spark Plug Company advised Posner on January 15, 1986, that as a result of a corporate reorganization, his position as territory manager was among those to be eliminated. As territory manager he called on dealers and jobbers to sell Champion's automotive products. He remained in the active employ of Champion until February 1, 1986. Thereafter he was placed on leave with pay, and he continued to receive pay through December 31, 1986. At that time he was 53 years old and was earning $41,520 plus fringe benefits.

When Posner was removed from the payroll in December 1986, he was placed in retirement status which gave him the option to elect a lump sum settlement of his retirement benefits in lieu of amounts otherwise payable under the retirement income plan of Champion. Posner elected to receive the lump sum payment and was paid $111,383. As a retired employee, he has continued to receive medical insurance coverage from Champion.

Posner was born on March 15, 1933, and he began work with Champion on January 1, 1956. At the time of his termination, he had been with Champion 30 years and had planned to continue work until retirement at age 65.

Following termination by Champion, Posner obtained a position similar to the position he held at Champion as a sales agent with Bob White and Associates. That business was just beginning and he and Mr. White worked together to build it. They have succeeded and the sales made by Posner, which in 1986 were $350,000, have increased to over $2 million in 1989. Under the arrangement reached between Posner and Mr. White, Posner receives a commission on sales, which he shares with Mr. White. Posner's gross income before deducting normal business expenses was $34,810 in 1987. This increased to $44,634 in 1988 and was expected to approximate $50,000 in 1989.

The Court finds that Mr. Posner is happily situated in his new position with Mr. White and plans to work in that position until his retirement at age 65. Although he testified that he has made a personal commitment to Mr. White that he will continue in the business until that time and that Mr. White has made a similar commitment to Posner, he acknowledged that "we are going to be together until I decide I want to go or until he decides he wants to go."

During his last couple of years with Champion, Mr. Posner's relationship with his superiors, J. Dan Nicholson and Fred Gage, became somewhat strained. Gage and Nicholson contended that Posner was not performing and gave him job performance ratings that were unlike any that he had received in the prior years with Champion. Posner believes that the reasons given were a subterfuge; he feels a hostility to these two persons and feels that through them he was mistreated by Champion. This, he believes, was manifested in Champion's selection of him for termination and in its job performance rating of him. Before the strained relationship with Gage, Posner's relationship with Champion was a good one. He testified that he "loved" the company and that his wife commented how he was married to Champion and she was only his mistress. As the result of his relationship with Gage, his termination, and this litigation, Posner testified he no longer had any "real love" for Champion and that he did not have the heart to go out and sell the product again. He summed it up by saying to Champion at trial "I don't love ya any more."

Posner contends that there are no comparable jobs for him to take if reinstatement were ordered and that Champion has not stepped forward with a specific job offer. He contends that reinstatement is not feasible and should not be ordered because to do so would unreasonably disrupt the parties. He believes that an effective employer-employee relationship cannot again be reestablished. In lieu of reinstatement, he prays for "front pay" in the amount of $282,881 consisting of lost future earnings of $177,916, lost life insurance of $6,052, lost disability insurance of $22,131 and lost retirement benefits of $76,782. He notes that each one of those figures has been reduced to present value.

Richard D. Via

As was the case with Posner, Via was terminated as a territory manager on January 15, 1986. He was put on leave with pay on February 1 and was paid until December 1, 1986, when he was put on retirement status. At that time he was 58 years old and was earning $34,020 plus fringe benefits. He, too, elected a lump sum payment for his retirement benefits and was paid the sum of $119,073. As a retired employee, he continues to receive medical insurance coverage.

Via was born on March 23, 1927, and began work with Champion on March 1, 1954. When he was terminated in 1986, he had been with Champion almost 32 years and had planned to retire on April 1, 1990, at age 63.

Following his termination by Champion, Via sought employment in April 1986 with automobile parts distributors in the Roanoke, Virginia, area. In a few instances, he was offered employment on a commission basis. Because his income would be entirely based on commission, he testified that he rejected each of those offers. In June 1986 Via abandoned his efforts in locating a position selling automobile parts and began a new career in landscape design and horticulture. He began a training program at the Western Virginia Community College and received a certificate in June 1988. In the interim, he accepted employment with the National Park Service maintaining trails and parks in Virginia. The work is seasonal and his income has been between $12,000 and $13,000 per year.

Via testified that by being out of the automobile parts business since 1986, there would be a re-learning process for him to reenter the business were he to be reinstated. He testified that in his judgment it would take him "several years" to regain the knowledge to put him back where he was. He stated, however, he was prepared to return to Champion. He expressed concern about the possibility of hostility, and he felt that the company needed to prove itself to him again in order to regain his loyalty. He urges that the short period that remains until his retirement date of April 1, 1990, justifies an award of front pay in lieu of reinstatement. He claims "front pay" in the amount of $121,768 consisting of lost future earnings of $12,088, lost life insurance of $527, lost disability insurance of $1,392 and lost retirement benefits of $107,761. He notes that each of those figures has been reduced to present value.

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