Hastie v. JC Penney Co., Inc., 88-CV-1062A.

• Decision Date: 28 October 1994
• Docket Number: No. 88-CV-1062A.,88-CV-1062A.
• Citation: 886 F. Supp. 1017
• Parties: Charles E. HASTIE, Plaintiff, v. J.C. PENNEY COMPANY, INC., Defendant.
• Court: U.S. District Court — Western District of New York

886 F. Supp. 1017

Charles E. HASTIE, Plaintiff, v. J.C. PENNEY COMPANY, INC., Defendant.

No. 88-CV-1062A.

United States District Court, W.D. New York.

October 28, 1994.

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Falk & Siemer, Buffalo, NY (Donald G. McGrath, of counsel), Williams, Glover, Walton & McAlilly, Meredian, MS (Stephen L. McAlilly, of counsel), for plaintiff.

Hodgson, Russ, Andrews, Woods & Goodyear, Buffalo, NY (Paul I. Perlman, of counsel), Nicholas A. O'Kelly, J.C. Penney Company, Inc., Legal Dept., Dallas, TX, for defendant.

ORDER

ARCARA, District Judge.

This case was referred to Magistrate Judge Leslie G. Foschio, pursuant to 28 U.S.C. § 636(b)(1), on December 17, 1991. On November 20, 1992, defendant filed a motion for summary judgment and on February 4, 1993, plaintiff filed a cross-motion for summary judgment on defendant's counterclaims. On January 25, 1994, Magistrate Judge Foschio filed a Report and Recommendation recommending that defendant's motion for summary judgment on the amended complaint be denied; that defendant's motion for partial summary judgment on its counterclaims be denied; that plaintiff's motion for summary judgment on the counterclaims be denied as untimely; and that summary judgment on defendant's counterclaims be granted sua sponte in favor of plaintiff.

On February 8, 1994, defendant filed objections to those portions of the Report and Recommendation recommending denying its motion for summary judgment as to plaintiff's claim under § 510 of ERISA, 29 U.S.C. § 1140 and recommending denying its motion for summary judgment based on plaintiff's failure to mitigate damages. Plaintiff filed a response thereto on February 22, 1994.

Pursuant to 28 U.S.C. § 636(b)(1), this Court must make a de novo determination of those portions of the Report and Recommendation to which objections have been made. Upon a de novo review of the Report and Recommendation, and after reviewing the submissions and hearing argument from the parties, the Court adopts the proposed findings of the Report and Recommendation.

Accordingly, for the reasons set forth in Magistrate Judge Foschio's Report and Recommendation, defendant's motion for summary judgment on the amended complaint is denied, and defendant's motion for partial summary judgment on its counterclaims is denied. Further, the Court denies plaintiff's motion for summary judgment on the counterclaims as untimely, and grants summary judgment sua sponte on defendant's counterclaims in favor of plaintiff.

This matter is referred back to Magistrate Judge Foschio for further pretrial proceedings.

IT IS SO ORDERED.

REPORT and RECOMMENDATION

FOSCHIO, United States Magistrate Judge.

JURISDICTION

This matter was referred to the undersigned by the Hon. Richard J. Arcara on December 17, 1991 for report and recommendation on any dispositive motions. The matter is presently before the court on Defendant's motion for summary judgment, filed November 20, 1992, and Plaintiff's cross-motion for summary judgment on Defendant's counterclaims, filed February 4, 1993.

BACKGROUND

Plaintiff, Charles E. Hastie, initially filed this action in New York State Supreme Court, Erie County, on August 29, 1988. Defendant, J.C. Penney ("Penney") removed the action to this court on October 3, 1988. Hastie filed an amended complaint on June 16, 1989, and Penney filed an amended answer with counterclaims on June 30, 1989. Hastie has asserted two claims: a claim for unlawful age discrimination under New York State Executive Law § 296(1)(a), and a second claim under Section 510 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1140. Penney has asserted three counterclaims for fraudulent misrepresentation, breach of fiduciary duty, and unjust enrichment.

Following extensive discovery, Penney filed a motion for summary judgment on Hastie's causes of action, and for partial summary judgment on liability on Penney's counterclaims on November 20, 1992. In response, on February 4, 1993, Hastie filed a motion for summary judgment on Penney's counterclaims. Oral argument on the matter was held on March 25, 1993.

For the reasons as set forth below, Defendant's motion for summary judgment on the amended complaint should be DENIED. Defendant's motion for partial summary judgment on Defendant's counterclaims should be DENIED. Plaintiff's motion for summary judgment on Defendant's counterclaims should be DENIED as untimely, however, the court sua sponte recommends that Defendant's counterclaims be dismissed.

FACTS

Hastie began his employment with Penney, a large retailer of consumer merchandise, as a sales trainee in 1954. (TH. 109).¹ In February, 1955, Hastie was promoted to the position of Department Manager, Men's Division, at Penney's Germantown, Pennsylvania store. (TH. 110). Eventually, Hastie was promoted to Floor Manager at that store. In 1960, Hastie took a position as an Assistant Store Manager/General Merchandise Manager at Penney's store in Richmond, Virginia. (TH. 113). Hastie was then promoted, in 1962, to Sales and Merchandise Manager of a "B" Group, responsible for supervising the types of merchandise offered at three stores. (TH. 124). He was subsequently promoted, in 1965, to Merchandise manager of an "A" Group, responsible for supervising the types of merchandise offered for sale at approximately twenty stores. (TH. 126). In 1967, Hastie became Sales and Merchandise Manager of the "A" Group, (TH. 127), and, in 1968, Hastie was promoted to Store Manager at Penney's Germantown, Pennsylvania store. (TH. 128). In 1971, Hastie became the Store Manager at a larger Penney's store located in Lakewood, New York, (TH. 138-139), and, in 1974, Hastie was promoted to Store Manager at Penney's West Seneca, New York store, a store approximately 2½ times larger than the Lakewood store. (TH. 147). In 1982, Hastie became the leader of the District's Women's Fashion Team, responsible for planning and coordinating meetings with other managers to discuss buying strategies. (TH. 236). In 1984, Hastie was offered the position of Store Manager at the Eastern Hills Mall store in Amherst, New York, but he declined the offer. (TH. 219-221).

Throughout this employment history, Hastie's performance was favorably appraised, and, as a result, he received salary increases and promotions. (TH. 112-113, 116, 125, 127-128). Penney had a rating system for evaluating store managers, with a "1" being the highest rating, and a "5" being the lowest. Additionally, performance appraisals of store managers were also reviewed by the Regional Personnel Manager and the Regional Vice President. (TM. 271).² Hastie was evaluated as a "2" (above average) and a "3" (average) at different times. (TH. 137, 144, 154-155, 158, 209). Certain later performance appraisals contained notations regarding Hastie's age as of the date of the performance review.

For the first year of Hastie's employment as the Store Manager at Lakewood, he was supervised by Donald Mustaine, the district manager. (TM. 171). Mustaine appraised Hastie's performance at a level "3" at that time. (TH. 144). After Hastie transferred to the West Seneca store, Karl Scheffer became Hastie's district manager in 1979. (TH. 177). Prior to Scheffer's arrival, Hastie had been given an appraisal of "4" (below average), (TH. 178), however, Hastie claimed that, after Scheffer's inspection of the West Seneca store, he told Hastie that, "I was given some very bad and misleading information about you ... but I'm very, very pleased with the way the store is going, I'm very happy to have you in my district and I look forward to working with you." (TH. 179, 183). In 1980, 1981, 1982, 1983, and 1984, Scheffer gave Hastie a "2" rating. (TH. 210, 214, 222, 224). During Hastie's performance appraisal in 1984, Scheffer criticized Hastie's handling of markdowns in the store, i.e. merchandise sale priced for quicker sale, stating that he wanted lower store mark-downs. (TH. 226).

Earlier, in 1984, Scheffer offered Hastie the Store Manager position at Eastern Hills Mall, stating that Hastie had worked very hard throughout his career, and that Hastie should manage a store that was easier to manage than the West Seneca store since he "had only a couple of years to go to retirement." (TH. 219). At that time, Hastie was 56 years of age. (TH. 219). Hastie, however, did not plan to retire at 60 years old as Scheffer apparently assumed. (TH. 220).

In the fall of 1984, Mustaine became employed as Penney's District Manager in the district in which the West Seneca store was located, replacing Scheffer. (TH. 248). In his first appraisal of Hastie for 1984, Mustaine appraised Hastie's performance as a "3," (TH. 230), stating that Hastie needed to bring his inventories in line with company guidelines. (TH. 232-233). Mustaine informed Hastie that he did not want an overstocked store, and that correcting the situation would be a priority. (TH. 299).³

In 1985, Hastie claimed that a pattern of harassment against him began. Members of Mustaine's management team began visiting Hastie at his store for routine inspections. (TH. 257). Salary increases due to Hastie were not processed timely. (TH. 277). Mustaine would call Hastie, asking him technical questions, expecting immediate answers. (TH. 278). Mustaine would also telephone Hastie, stating that he would be coming to the store to see him, and then would not appear. (TH. 295). Additionally, sometime in 1985, Bill Columbo, the operations manager for the district, informed Hastie that Mustaine had instructed him to investigate the buying practices in Hastie's store, and to report directly to Mustaine any of his findings. (TH. 261-262).

In December, 1985, a week before Christmas, the West Seneca area was hit by a significant snow storm, causing the store to virtually close, resulting in a high overstock of inventory because of the lack of Christmas sales. (TH. 170). During the same month,...