Davis v. Rutgers Cas. Ins. Co.

• Decision Date: 06 May 1997
• Docket Number: Civil No. 94-2788(JBS).
• Citation: 964 F.Supp. 560
• Parties: Derek E. DAVIS, Plaintiff, v. RUTGERS CASUALTY INSURANCE CO., Defendant.
• Court: U.S. District Court — District of New Jersey

964 F.Supp. 560

Derek E. DAVIS, Plaintiff, v. RUTGERS CASUALTY INSURANCE CO., Defendant.

Civil No. 94-2788(JBS).

United States District Court, D. New Jersey.

May 6, 1997.

As Corrected June 5, 1997.

COPYRIGHT MATERIAL OMITTED

Sidney I. Gold, Lovitz & Gold, P.C., Philadelphia, PA, for Plaintiff.

Martin Gringer, Robert G. Lipp, Franklin & Gringer, P.C., Garden City, New York, for Defendant.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

SIMANDLE, District Judge:

Plaintiff, Derek E. Davis, alleges that his former employer, defendant Rutgers Casualty Insurance Co., discriminated against him on the basis of his race when Rutgers terminated his employment, in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. Mr. Davis, who is African American, was fired from his job as a claims examiner in the defendant's Bodily Injury unit, just one week after Rutgers' President, Brian Hollander, had personally approved Davis' request for reassignment to the claims examiner position. Mr. Hollander changed his mind, citing dissatisfaction with Davis' job performance in his former role as supervisor of the PIP [Personal Injury Protection] Unit as the reason for firing Davis on December 4, 1990. Plaintiff Davis alleges that Rutgers' reasons for firing him are pretextual, and he has produced evidence that his race was a substantial factor in his firing because the defendant's reasons are make-weight or even irrational, and because he was evaluated and berated more harshly than Caucasian unit supervisors, and because several top decision makers in the company (the owner, Nacham Stein, and the retained independent advisor, Milton Kligler) had displayed racist attitudes toward African Americans.

After two days of trial without a jury, concluding on January 8, 1997, the court has considered all testimony¹ and exhibits² and arguments of counsel and deliberated to a Verdict. For the reasons stated in these Findings of Fact and Conclusions of Law, which are hereby entered under Rule 50, Fed.R.Civ.P., the Court finds that plaintiff Derek Davis has proved, by a preponderance of the credible evidence, that race was a motivating factor in defendant's decision to terminate his employment. As a remedy, the Court will award back pay and require defendant to reinstate Mr. Davis to the claims examiner position forthwith.

FINDINGS OF FACT

Derek Davis, an African American male born on February 18, 1958, graduated from Virginia State University in Petersburg, Virginia with a B.S. Degree in Business Administration in December, 1981. He returned home to New Jersey and sought employment in the insurance industry. He was hired by Allstate Insurance as a claims trainee in October, 1982, and was promoted to claims representative in the bodily injury department. He left Allstate in December, 1985, to accept the job offer of defendant Rutgers Casualty Insurance Co., because he believed prospects for career advancement would be better in the smaller company.

At Rutgers Casualty, Davis was hired by Vice President Charles Lisby and Claims Supervisor Linda Spruill, both of whom are African American. His first position for Rutgers was as Bodily Injury Claim Examiner, at a salary of $23,000 per year starting in December, 1985. (Tr. 135.) His work as a claims examiner was highly regarded within the company, according to Claims Supervisor Linda Spruill (Tr. 57-59) and President Brian Hollander. (Tr. 255.) Davis became a "team leader" among the bodily injury claims adjusters. (Tr. 57.)

Meanwhile, by 1988 Rutgers Casualty, under its prior ownership, was having financial difficulties. Nacham Stein was part of a group called the American European Group that had assembled capital and was looking to buy a company as an investment. (Tr. 242-244.) Stein asked Brian Hollander to locate a company he could buy. (Tr. 242.) Stein had been introduced to Hollander through an American European Group board member who knew Hollander when Hollander served as a governmental affairs representative of the Aetna Insurance Company in Washington, D.C., in the 1980's. (Tr. 238, 242.) Mr. Hollander, a lawyer with a substantial background from the 1960's in community legal services and thereafter as a litigating lawyer with one of New England's largest law firms, and who also has worked 7 1/2 years with Aetna at a policymaking headquarters level (Tr. 236-242), had become a private entrepreneur and he accepted the task of locating a company for Mr. Stein.

Mr. Hollander located Rutgers Casualty, an insurance provider headquartered in Cherry Hill, New Jersey, and he became intensely involved in studying this opportunity and negotiating the purchase. (Tr. 242.) As the deal was about to be consummated, the New Jersey Insurance Commissioner released a report finding Rutgers to be nearly insolvent. Hollander negotiated with the Insurance Commissioner's office, which imposed conditions on the sale. (Tr. 244.) As one such condition, the new owners of Rutgers would be required to have an experienced consultant selected by the Insurance Commissioner on the premises, paid by Rutgers, to help guide the turnaround. (Tr. 244-45.)

Mr. Milton Kligler was selected to perform this role, as a person with a long insurance background who was said to have been instrumental in turning around other failing insurance companies. (Tr. 245.) Kligler was paid directly by Rutgers Casualty.

In late 1988, the sale was consummated. Nacham Stein became the owner, Brian Hollander became the President (replacing outgoing president Robert Lipkin after a few months), and Milton Kligler worked closely with Hollander to help decide what needed to be done to improve Rutgers' financial performance. (Tr. 245-247.)

The Hollander-Kligler management team brought about organizational changes. Discrete responsibilities were assigned to four departments — Claims, Underwriting, Administrative Functions (Accounting), and Marketing. The Claims Department was placed under the supervision of Linda Spruill, and the former Vice President for Claims, Charles Lisby, was demoted to claims examiner under Spruill, with no decrease in salary. Three Claims Department sub-units were established — Property Damage, PIP, and Bodily Injury [BI] — to process the different types of claims the company received. (Tr. 248-251.)

Plaintiff Derek Davis was selected as the supervisor of the PIP Unit in June, 1989 (Tr. 53, 135), when Jim McAttee became supervisor of the Property Damage Unit and Roseann Coyle became supervisor of Bodily Injury. (Tr. 253, 310). McAtee and Coyle are Caucasian. Davis, McAtee and Coyle reported to Spruill, who reported to Hollander. Spruill, as noted, is an African American, and Hollander is a Caucasian.

The PIP Unit was new, and Davis was the first PIP Supervisor. The PIP Unit was responsible for receiving, evaluating and paying first-party claims by Rutgers' insureds for Personal Injury Protection, which under the law of New Jersey provides for payment of an insured's income loss and reasonable and necessary medical expenses incurred in treatment of personal injuries sustained in automobile accidents without respect to fault. Derek Davis was selected collectively by Hollander and Spruill (Tr. 77-78) because there was "a sense that ... he was someone who could do the job," according to Hollander. (Tr. 255.) He had received favorable evaluations as a team leader in his claims examiner role (Pl.Ex. B and Tr. 57-59).

The PIP Unit received a deluge of files, both new and old. When Davis took over, there were about 1,500 — 1,600 old PIP claims pending, plus new PIP claims arriving every day, according to Linda Spruill's recollection (Tr. 56), while Davis recalls upwards of 1,800 claims initially pending. (Tr. 136-37.) The disparity in even identifying the initial PIP caseload is not surprising, because the PIP files were in disarray when Davis took over, and one of the first tasks was to organize and catalog the backlog. Under Davis' supervision, the caseload was cut to under 1,000 PIP files during his 18-month tenure. (Tr. 138.) Davis was not given a job description (Tr. 139), and Hollander never told Davis or Spruill that Davis' job was in jeopardy. (Tr. 65, 143, 146, 262, 267.)

According to his supervisor, Ms. Spruill, Davis' duties as PIP supervisor included instructing others in proper procedures, signing checks within his authority, and approving PIP payments, while supervising the work of the 3 or 4 claims examiners in his unit. (Tr. 54.) Davis implemented new procedures, such as systematic scheduling of independent medical exams (IME's) of PIP claimants after 90 days of treatment (Tr. 140).

Originally Davis divided the 1,600 — 1,800 files among his 4 examiners and himself (Tr. 141), but 3 examiners were lost within a few months to go to other companies and the unit's work fell to Davis and one examiner. (Tr. 137-38.) New examiners were assigned to the unit, such as witness Mary Jane Melini who came to the unit in February, 1990. (Tr. 118.) Ms. Melini testified she enjoyed working with Davis and found him to be a good supervisor who coordinated the efforts of the four examiners. (Tr. 119-122.) She never heard Hollander or any fellow worker complain about Davis. (Tr. 119.) The unit disposed of many of the old files. (Tr. 128-29.)

Davis received a supervisor evaluation as PIP supervisor on December 31, 1989. (Tr. 59-61, Ex. B.) His attendance was "excellent," he "can be relied on to always follow through," and his attitude was "enthusiastic, cooperative and friendly," according to that evaluation signed by Ms. Spruill. She also testified that she had no problems with his performance, and that she never told Hollander or Kligler that Davis was causing any problems as supervisor. (Tr. 62, 74-75.)

Davis's salary as PIP supervisor was increased from $34,500 to $39,000 in 1990. (Tr. 61, 160.) As PIP unit supervisor, Davis occupied a "hot seat," because the unit was always under scrutiny to perform....