Corum v. Farm Credit Services

• Decision Date: 13 February 1986
• Docket Number: No. Civ. 4-85-407.,Civ. 4-85-407.
• Parties: James M. CORUM, Plaintiff, v. FARM CREDIT SERVICES, d/b/a the St. Paul Bank for Cooperatives, the Federal Land Bank of St. Paul, and the Federal Intermediate Credit Bank of St. Paul, Defendant.
• Court: U.S. District Court — District of Minnesota

628 F. Supp. 707

James M. CORUM, Plaintiff, v. FARM CREDIT SERVICES, d/b/a the St. Paul Bank for Cooperatives, the Federal Land Bank of St. Paul, and the Federal Intermediate Credit Bank of St. Paul, Defendant.

No. Civ. 4-85-407.

United States District Court, D. Minnesota, Fourth Division.

February 13, 1986.

James M. Samples, Melissa W. McClenahan, Christine O. Merriman, Faegre & Benson, Minneapolis, Minn., for plaintiff.

Thomas P. Kane, Marko J. Mrkonich, Eleanor M. Dilkes, Oppenheimer, Wolff, Foster, Shepard & Donnelly, St. Paul, Minn., for defendant.

MEMORANDUM AND ORDER

MacLAUGHLIN, District Judge.

This matter is before the Court on defendant's motion for partial summary judgment. Also before the Court is plaintiff's appeal from the December 5, 1985 order of the United States Magistrate. The Court will affirm the Magistrate's order and will grant defendant's summary judgment motion in all respects.

FACTS

Plaintiff James M. Corum was formerly employed by defendant Farm Credit Services (FCS). Defendant states that FCS is the management organization for three banking institutions: the St. Paul Bank for Cooperatives (BC), the Federal Land Bank of St. Paul (FLB), and the Federal Intermediate Credit Bank of St. Paul (FICB). (The Court will refer to these three entities collectively as "the Banks.") Plaintiff responds that the FCS is not a "management organization" for the Banks, rather plaintiff maintains that the Banks have chosen to do business as the FCS. Accordingly, plaintiff has styled his action Corum v. FCS d/b/a BC, FLB, and FICB. The Banks are lending institutions federally chartered under the Farm Credit Act, 12 U.S.C. §§ 2001-2260. The Farm Credit Act established the Federal Credit System, and the Banks are a part of that system. The purpose of the system is to improve the income and well-being of farmers and ranchers by providing credit. See 12 U.S.C. § 2001(a).

In 1968, plaintiff was a trial attorney at the St. Paul law firm of Altman, Gerahty, Leonard & Mullally. Corum ¶ 2.¹ During that year, the president of the FICB, Andrew Lampen, approached plaintiff regarding legal employment at the FICB. While plaintiff was negotiating with Lampen regarding the position with FICB, Lampen repeatedly told plaintiff that plaintiff would not get rich working for the FICB, but plaintiff would have "job security" and a company car. Corum 68; ¶ 3.

When plaintiff started his employment with FICB in 1968, he was the only attorney on the staff. Plaintiff's title at this time was senior attorney, but he states he was performing the functions of a general counsel. Corum 314-15. In 1969, plaintiff's title changed to General Counsel. In 1971, the FICB added the corporate office of secretary to plaintiff's position. See Exh. 5, at 2.²

After approximately two years with the FICB, i.e., sometime in 1970 or 1971, plaintiff states that he began to realize that he was becoming very specialized in his legal practice. Plaintiff adds that he was becoming concerned that his narrow expertise in farm credit law would hurt his ability to obtain other legal employment. Corum 68; ¶ 5, 6. Consequently, plaintiff raised his concerns with FICB president Lampen. Plaintiff told Lampen that in order for plaintiff to remain at FICB, he would need a higher salary and assurances for his future at FICB. Lampen responded by obtaining an eight percent salary increase for plaintiff. In addition, Lampen told plaintiff that he would have job security with the FICB; and Lampen again noted that plaintiff would not get rich working for FICB, but he would not have to worry about a job. Corum 69; ¶ 6. Plaintiff states that based on the salary increase and Lampen's assurances, he decided to make a career of farm credit law. Plaintiff's understanding of his relationship with FICB, was that he had a position there until retirement, as long as he did good work. Corum ¶ 6.

Also in the early 1970's, sometime after plaintiff receive the eight percent salary increase, the head of the Farm Credit System offered plaintiff the position of general counsel for the Farm Credit Administration in Washington, D.C. Plaintiff declined this offer because he was content with his position at FICB after having received Lampen's assurances of job security. Corum 202; ¶ 7.

Subsequently, plaintiff continued to serve as general counsel and secretary for FICB. In 1980, FICB and BC consolidated their legal functions, and plaintiff became general counsel and secretary for the combined operation. Later in 1980, plaintiff assumed the title of senior vice president and general counsel. See Exh. 82. Plaintiff's responsibilities as a senior vice president were eliminated in 1982. See Amdahl 10-11. The president of FICB/BC, now Burgee Amdahl, concluded that plaintiff should not be part of the senior management team, especially since plaintiff disliked planning. Amdahl also noted that he had too many senior vice presidents at that time. Amdahl 24. Amdahl considered plaintiff's change of position to general counsel and secretary a demotion. Amdahl 11-12.

Another reorganization of defendant occurred in the spring of 1983, as the management functions of FICB/BC and the FLB were consolidated. Amdahl 5. As part of the reorganization, two new legal positions needed to be filled. FCS executive vice president Larry Williams told plaintiff that plaintiff and Wally Pearson were the two leading candidates for the position of corporate counsel. Corum 154. (The FCS selected Pearson for this position in approximately late August of 1983. See Amdahl 250, 252.) Upon learning that he was not chosen corporate counsel, plaintiff contacted FCS executive vice president Ron Gilsrud to inquire if he still had a job at FCS. Gilsrud responded that plaintiff did indeed have a job and that plaintiff did not have to worry about it. Corum 148-49; ¶ 8.

Plaintiff was concerned about not receiving the position of corporate counsel, so shortly after Pearson's appointment, plaintiff met with Amdahl (who was now chief executive officer of the combined entity). At this meeting, plaintiff states that he told Amdahl about the agreement between FCS and plaintiff which provided that plaintiff would have a position at FCS until retirement, as long as plaintiff did a good job. Corum ¶ 9. Neither party has indicated how Amdahl responded to this statement.

Just as he was for the position of corporate counsel, plaintiff was one of two finalists for the position of vice president, credit legal services. Johnson 90. On September 13, 1983, FCS named Linda Birdwell, a non-lawyer, to this position. Amdahl 252; Johnson 99. After Birdwell's appointment, a senior vice president at FCS, Dennis Johnson, informed plaintiff that his services were still needed. Corum 192; ¶ 8; cf. Johnson 99-100. Plaintiff subsequently assumed the position of director, association legal support in September of 1983. In this position, plaintiff reported directly to Birdwell. Birdwell 18-19; Exh. 126. Previously, in fact since he began his employment with FICB in 1968, plaintiff had reported directly to the top executive officer. See Amdahl 8-10; Exh. 5, at 2; Exh. 7, at 1. Plaintiff's new position had a job grade three levels lower than his prior position, but his salary and benefits remained the same. Corum 660-61; ¶ 15.

After plaintiff failed to obtain the position of vice president, credit legal services, he began exploring other employment possibilities. The FICB of Spokane, Washington offered plaintiff a position, but plaintiff declined the offer because it did not entail a salary increase, the Spokane FICB was having financial problems, and he believed that he had a job at the FCS until retirement. Corum 179-80; ¶ 12.

In March of 1984, Birdwell left her position as plaintiff's supervisor. Birdwell 19-20. Bill Zwick, an FCS senior vice president assumed this role on an interim basis. Zwick 11-12, 25. According to plaintiff, Zwick told plaintiff that Zwick was going to inform the new general counsel and secretary that FCS should retain plaintiff. Corum ¶ 8, also citing Zwick 59, Reardon 163-64.³

The new general counsel, Andrew Reardon, assumed his position in late June of 1984. Reardon 38. Upon assuming his position, Reardon decided to restructure the FCS legal department, and this reorganization included the elimination of plaintiff's position. Reardon next concluded that because of problems with plaintiff's work performance, the FCS would not retain plaintiff in another legal position. Reardon 109, 113. On August 23, 1984, the FCS' senior vice president for human resources, Don Ellenberger, sent Reardon a memorandum discussing the treatment of plaintiff's severance pay. The memorandum also states that Reardon and Ellenberger

will need to consider the reason we give plaintiff for termination. Will that reason be reorganization? or performance? or perhaps a combination of both? I believe the reason should be accurate, but also one that could be verified through documentation.

Exh. 92. Reardon testified in his deposition that both the need to reorganize and plaintiff's poor job performance were accurate reasons for discharging plaintiff. Reardon 112.

On September 4, 1984, Reardon, while in his office, handed plaintiff a document informing him that his position had been abolished because of reorganization. Corum 710; Exh. 75. Reardon informed plaintiff that he was being discharged because he did not support corporate policies. Corum 710; Reardon 123-24. Reardon allegedly told plaintiff to clear out his desk and vacate the premises as soon as possible. Plaintiff contends that he was so upset by the abrupt termination that he accidentally took the FCS Legal Procedures Manual while haphazardly clearing out his desk. Corum ¶ 14.⁴

Plaintiff states that since September 4, 1984, he has heard other explanations for his discharge. Reardon did testify in his depositions to a number of reasons for terminating plaintiff's employment, including:...