Fariss v. Lynchburg Foundry

• Citation: 769 F.2d 958
• Decision Date: 05 August 1985
• Docket Number: Nos. 84-2137,84-2169,s. 84-2137
• Parties: 38 Fair Empl.Prac.Cas. 992, 37 Empl. Prac. Dec. P 35,449, 54 USLW 2103, 2 Fed.R.Serv.3d 452, 6 Employee Benefits Ca 1989 Marguerite FARISS, Administratrix of the Estate of Ewell W. Fariss, Appellant, v. LYNCHBURG FOUNDRY, a Mead Corporation, Appellee. Ewell W. FARISS, Appellee, v. LYNCHBURG FOUNDRY, a Mead Corporation, Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (4th Circuit)

Page 958

769 F.2d 958

38 Fair Empl.Prac.Cas. 992,

37 Empl. Prac. Dec. P 35,449, 54 USLW 2103,

2 Fed.R.Serv.3d 452, 6 Employee Benefits Ca 1989

Marguerite FARISS, Administratrix of the Estate of Ewell W.

Fariss, Appellant, v. LYNCHBURG FOUNDRY, a Mead Corporation, Appellee.

Ewell W. FARISS, Appellee, v. LYNCHBURG FOUNDRY, a Mead Corporation, Appellant.

Nos. 84-2137, 84-2169.

United States Court of Appeals, Fourth Circuit.

Argued April 1, 1985.

Decided Aug. 5, 1985.

Nate L. Adams, III, Roanoke, Va. (Donald W. Huffman, Bird, Kinder & Huffman, Roanoke, Va., on brief), for appellant.

Edmund M. Kneisel, Atlanta, Ga. (Charles M. Rice, Kilpatrick & Cody, Atlanta, Ga., Robert C. Wood, III, Edmunds & Williams, Lynchburg, Va., on brief), for appellee.

Before HALL, WILKINSON and SNEEDEN, Circuit Judges.

WILKINSON, Circuit Judge:

Ewell W. Fariss, the original plaintiff in this action under the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Sec. 621 (1982) et seq., brought suit against defendant Lynchburg Foundry Company, alleging he had been terminated from employment because of his age. He sought reinstatement, back pay and punitive damages.

Mr. Fariss died and his widow, Marguerite S. Fariss, was appointed administratrix of his estate. Defendant thereafter filed a Suggestion of Death Upon the Record, serving a copy on the deceased plaintiff's attorney. Mrs. Fariss was never personally served. After obtaining new counsel, Mrs. Fariss moved to substitute herself as plaintiff, which the district court permitted over defendant's objection. As amended, her complaint alleged a "willful" violation of the ADEA, and sought only monetary relief, with a pendent state law contract claim.

The district court, 588 F.Supp. 1369, granted summary judgment for defendant. It held that plaintiff lacked a claim for monetary relief because pension benefits Mr. Fariss received from defendant after his termination exceeded defendant's liability for back wages and life insurance premiums. Plaintiff appeals from the summary judgment for defendant, while defendant cross-appeals from the substitution of Mrs. Fariss as plaintiff.

We affirm. Mrs. Fariss was properly substituted as plaintiff under Fed.R.Civ.P. 25(a). Plaintiff, however, would be entitled to no monetary relief even if she were to prevail on the merits. The proceeds of an employer-provided life insurance policy may not be claimed as the damages from a wrongful termination, but only the premiums that would have been paid to maintain coverage had the plaintiff remained employed. These premiums, together with back pay, are more than offset by the pension benefits Mr. Fariss received as a result of his termination, which must be deducted from any possible damages award. ¹

I

Before addressing the damages issues, we must determine whether Mrs. Fariss was substituted as plaintiff for her deceased husband in a timely fashion. Defendant contends that because Mrs. Fariss did not move for substitution until more than 90 days after service of the suggestion of death on Mr. Fariss's original counsel, and no "excusable neglect" has been shown, Fed.R.Civ.P. 6(b)(2), this suit must be dismissed.

We hold that service on decedent's counsel alone was inadequate to commence running of the 90-day substitution period allowed by Fed.R.Civ.P. 25(a)(1). Where, as here, a personal representative has been appointed following the death of a party, the suggestion of death must be personally served on that representative. Because Mrs. Fariss never received such service, the substitution was timely.

Rule 25(a)(1) governs substitution of the proper successor or representative of a deceased party:

If a party dies and the claim is not thereby extinguished, the court may order substitution of the proper parties. The motion for substitution may be made by any party or by the successors or representatives of the deceased party and, together with the notice of hearing, shall be served on the parties as provided in Rule 5 and upon persons not parties in the manner provided in Rule 4 for the service of a summons, and may be served in any judicial district. Unless the motion for substitution is made not later than 90 days after the death is suggested upon the record by service of a statement of the fact of the death as provided here for the service of the motion, the action shall be dismissed as to the deceased party.

The rule imposes no time limit for the substitution other than that commenced by proper service of a suggestion of death upon the record. ² 3B J. Moore & J. Kennedy, Moore's Federal Practice p 25.06 [2.-1] (2d ed. 1982). As the suggestion of death is served in the same manner as the motion to substitute, a party may be served through his attorney, Fed.R.Civ.P. 5(b), but nonparties must be personally served. Fed.R.Civ.P. 4(d)(1).

The nonparties for whom Rules 25(a)(1) and 4(d)(1) mandate personal service are evidently the "successors or representatives of the deceased party." This conclusion follows both from the language of Rule 25(a)(1), which refers to no other nonparties, and from the rule's underlying policies. Rule 25(a)(1) directs that both parties and appropriate nonparties be served with the suggestion of death to commence the 90-day substitution period, for the rule seeks "to assure the parties to the action and other concerned persons of notice of the death so that they may take appropriate action to make substitution for the deceased party." 3B J. Moore & J. Kennedy, supra. The "successors or representatives of the deceased party" contemplated by the rule are those empowered to assert any legal claims of the decedent not extinguished by death, ³ or to defend the estate against others' claims. Personal service of the suggestion of death alerts the nonparty to the consequences of death for a pending suit, signaling the need for action to preserve the claim if so desired.

Service on decedent's attorney alone was inadequate. The attorney's agency to act ceases with the death of his client, see Restatement (Second) of Agency Sec. 120(1) (1958), and he has no power to continue or terminate an action on his own initiative. Because the attorney is neither a party, nor a legal successor or representative of the estate, he has no authority to move for substitution under Rule 25(a)(1), as the courts have repeatedly recognized. See, e.g., Boggs v. Dravo Corp., 532 F.2d 897, 900 (3d Cir.1976); Rende v. Kay, 415 F.2d 983, 985 (D.C.Cir.1969); Al-Jundi v. Rockefeller, 88 F.R.D. 244, 246 (W.D.N.Y.1980). But see Yonofsky v. Wernick, 362 F.Supp. 1005, 1011-12 (S.D.N.Y.1973) (suggestion of death held properly served on decedent's attorney where successor or representative unknown only two days after death).

Personal service on the successor or representative is hardly an onerous burden where, as here, the administratrix had already been appointed when service occurred. In some instances, it may prove more difficult to determine whom to serve, see Rende, 415 F.2d at 986; Yonofsky, 362 F.Supp. at 1011-12, but it is generally appropriate to require the serving party to shoulder that burden, rather than permitting the absence of notice to decedent's representative to lead to forfeiture of the action. Absent personal service, there is no reason to presume that the successor or representative, who must decide whether to pursue the claim, is aware of the substitution requirement. The administratrix may well, as here, be represented by different counsel. Either a motion to substitute, see Ransom v. Brennan, 437 F.2d 513, 518-19 (5th Cir.), cert. denied, 403 U.S. 904, 91 S.Ct. 2205, 29 L.Ed.2d 680 (1971), or the suggestion of death should have been served on the nonparty representative of the deceased, not merely on the deceased's attorney, to satisfy Rule 25(a)(1). Because Mrs. Fariss was never personally served, the 90-day substitution period never began and the district court properly allowed the substitution.

II

The principal question before us is whether plaintiff could recover anything if she were to prove age discrimination. Thus, the substantive issue of discrimination, which the district court did not resolve, is not relevant to this appeal, and we consider only what damages may be claimed.

Mr. Fariss worked for Lynchburg Foundry from August 23, 1941 until his termination on April 30, 1981 at the age of 61. He continued to receive full salary and benefits from his employer until September 1, 1981, enabling him to retire at age 62 with no reduction in pension benefits. Had Mr. Fariss remained employed from September 1, 1981 until his death on September 13, 1983, he would have earned, according to plaintiff, approximately $42,000 in salary including projected increases. ⁴ This amount may be claimed as back pay.

Upon his retirement, however, Mr. Fariss received a lump sum pension payment of $64,742.85 from the employer-funded company retirement plan. Because Mr. Fariss declined a survivor benefit option in July 1981 in favor of the lump sum, no pension benefits would have been paid had he remained employed until his death. If the lump sum pension payment is offset from back wages, plaintiff falls $22,742.85 short of having a claim for monetary relief. To maintain this action, she must thus identify potential damages from other sources exceeding that sum. ⁵

Plaintiff attempts to identify such damages by reference to employer-provided life insurance coverage. Mr. Fariss was entitled to fringe benefits of employer-paid group medical and life insurance. Full medical coverage continued after retirement. Life insurance would have paid twice Mr. Fariss's annual salary, or $42,000 by plaintiff's estimate, had he died while employed, but declined to only $2,000 after retirement. Plaintiff seeks to recover the difference as damages. Defendant expended $5,085.28 in premiums to continue full medical and reduced life insurance coverage from September 1, 1981 until Mr. Fariss's death. Had Mr. Fariss...