In re Sweeney, Bankruptcy No. B86-03747

• Citation: 113 BR 359
• Decision Date: 17 April 1990
• Docket Number: Adv. No. B87-0610.,Bankruptcy No. B86-03747
• Parties: In re James G. SWEENEY, Debtor. James G. SWEENEY, Plaintiff, v. AMERITRUST COMPANY, N.A., Defendant.
• Court: United States Bankruptcy Courts. Sixth Circuit. U.S. Bankruptcy Court — Northern District of Ohio

113 B.R. 359 (1990)

In re James G. SWEENEY, Debtor.

James G. SWEENEY, Plaintiff, v. AMERITRUST COMPANY, N.A., Defendant.

Bankruptcy No. B86-03747, Adv. No. B87-0610.

United States Bankruptcy Court, N.D. Ohio, E.D.

April 17, 1990.

Steven B. Potter of Dinn, Hochman, King & Melamed, Mayfield, Ohio, for plaintiff.

Hilary S. Taylor of Weston, Hurd, Fallon, Paisley & Howley, Cleveland, Ohio, for defendant.

MEMORANDUM OF OPINION AND DECISION

WILLIAM J. O'NEILL, Bankruptcy Judge.

This matter is before the Court on Count I of the Amended Complaint filed by Plaintiff-Debtor, James G. Sweeney, and the answer of Ameritrust Company, N.A. Count I alleges discriminatory treatment under Section 525(b) of the United States Bankruptcy Code for Ameritrust's terminating Sweeney's employment. 11 U.S.C. § 525(b). Defendant's motion to dismiss Count I is also in issue. Motion and Counter-motion for summary judgment were denied, and Individual Defendants, Carolyn Weber and Stephen Hogan, were dismissed by order of June 14, 1989. Remaining Counts II through VIII of the complaint were withdrawn to the United States District Court for the Northern District of Ohio on June 29, 1989. Count I is a core proceeding under Section 157(b)(2) of Title 28 of the United States Code.

In addition to submitting joint trial exhibits, the parties stipulated as follows: —

"1. Plaintiff, James G. Sweeney, was hired by Ameritrust on October 9, 1989 (sic 1986) at an annual salary of $28,750.00 plus benefits.

2. Plaintiff commenced service with Ameritrust as a Trust Tax Officer I on October 27, 1986.

3. Plaintiff was not disciplined or informed of any problems with his job performance while employed at Ameritrust.

4. Plaintiff's employment was suspended without pay on November 28, 1986.

5. On December 3, 1986, Ameritrust was informed by Plaintiff that he had filed a Petition for relief under Chapter 7 of the Bankruptcy laws.

6. On December 4, 1986, Plaintiff's employment with Ameritrust was terminated.

7. The parties have agreed that certain exhibits shall be submitted to the court as joint exhibits which may be admitted into evidence without further authentication or proof. The parties will provide the court with these exhibits prior to trial."

The Court adopts the stipulations, and upon the evidence presented finds as follows and references accordingly: —

J EXH — Joint Exhibits 1-14;

P EXH — Plaintiff Exhibits 1-15;

D EXH — Defendant Exhibits A-K;

TRANS 1 — Trial transcript for February 5, 1990;

TRANS 2 — Trial transcript for February 6, 1990;

VD W — Video deposition transcript of Carolyn Weber Fleig for December 6, 1989;

VD H — Video deposition transcript of Stephen Hogan for February 3, 1990.

On October 9, 1986, Ameritrust hired Sweeney in the tax department as a Tax Officer — 1, a specific bank title. The position involved preparing tax returns for a specified set of accounts. It entailed no supervisory duties, no handling of cash or valuables and no authority to write checks. (TRANS 1, 28-32; TRANS 2, 37-38). Moreover, Sweeney's duties and production were monitored and reviewed. (TRANS 1, 31). He was hired, however, with prospects for advancement. (TRANS 1, 42-43; TRANS 2, 37). The first 90 days of employment were probationary. A letter of employment informed him the offer was subject to routine review of his character and professional references. (J EXH, 1). A review was conducted and yielded satisfactory results. (J EXH, 4-6, 7; VD W, 44-48).

A bank personnel manual defines the probationary period as follows: —

"The first 90 days of employment are an Introductory Period during which the employee can learn about the job and the Company can evaluate the employee\'s ability to perform the job. It is a time of mutual adjustment and assessment. If at any time during such period it is felt that an employee is not adapted to his/her work, such employee or the Company may terminate employment . . .

CREDIT BUREAU RIGHTS

The Company reserves the right to obtain a satisfactory background and credit report from a credit bureau as a term and condition of initial and continuing employment. The Company further reserves the right to discharge or transfer any employee who does not have a satisfactory report or refuses to allow the Company access to such a report." (D EXH — K, Section 2.04 p. 1)

This manual was neither distributed to employees nor given to Sweeney, and was apparently not referred to by bank officials when terminating his employment. (VD W, 51; TRANS 2, 133-136).

Sweeney has a law degree and passed portions of the examination for Certified Public Accountants. (TRANS 2, 27-28). Prior employment included positions with various accounting firms. (TRANS 2, 29-31). Ameritrust was satisfied with his qualifications and had no cause to question performance during his short tenure. (TRANS 1, 28, 32-33; VD H, 27-28; VD W, 41-46).

Impetus for the Bank's investigating Sweeney's finances and ultimately terminating employment was receipt of a "skip trace" on November 12, 1986. (J EXH, 10; VD W, 13-14, 48-49). This inquiry by another bank attempting to collect an account with Sweeney indicated he moved leaving no forwarding address. Regarding change of address, the "skip trace" was inaccurate. (TRANS 2, 87). Ameritrust discovered Sweeney was in their employ. The Human Resource department commenced investigating his finances and ordered an in-house and trade credit report. (J EXH, 9, 11; VD W, 16-17). These reports disclosed substantial debt of approximately $24,000.00, including $2,277.00 owed Ameritrust. A meeting was called on November 28, 1986 to obtain Sweeney's explanation and reasons for his financial condition. (VD W, 18, 54-55; VD H, 25-30).

The November 28th meeting was called without prior notice of purpose. (TRANS 2, 40). Sweeney was questioned concerning the extent of and reasons for his debt and possible solutions. (VD W, 19-21; VD H, 12-13). He was not provided access to reports and information to which the Bank referred in its questioning. (TRANS 2, 43, 106; VD H, 32; VD W, 56-57). At the conclusion of the meeting he was suspended without pay, and a subsequent meeting was scheduled for December 3, 1986. He was instructed to obtain counseling through REACT, the Bank's employee assistance program, and to prepare a financial plan for the next meeting. (VD W, 21-22, 57-58).

In the interim, Sweeney contacted REACT, but was unable to arrange a recommended appointment with a financial counselor in time to obtain assistance to prepare a financial plan. (TRANS 2, 50-57). His attempt to schedule appointment with a consumer credit counseling service was also unsuccessful. (TRANS 2, 53-54). He filed a petition under Chapter 7 of the United States Bankruptcy Code on December 1, 1986, and prepared a financial plan reflecting this fact. (J EXH, 13, TRANS 2, 56-57).

At the December 3rd meeting, Sweeney presented his plan disclosing the bankruptcy. He was questioned regarding reasons for filing, impact on his unsecured debt, intentions for reaffirmation or payment of debts, and whether he would conduct his affairs differently if he were able to do it again. (J EXH, 14; TRANS 2, 58-62; VD W, 26-28, 61-66; VD H, 16, 36-40). No disposition was effected at this meeting, and Sweeney was told to return to the Bank for its decision. On December 4th, during the probationary period, he was informed his employment was terminated due to imprudent financial conduct and failure to indicate the problem would not recur. (J EXH, 14; VD W, 30-34; VD H, 16-17, 40; TRANS 1, 39-40).

The decision to terminate employment was predicated solely on Sweeney's financial condition. The Bank's interest in his finances emanated not from its routine reference check, but from the "skip trace". Officers who made the decision were unfamiliar with Sweeney's specific job responsibilities. (VD W, 39-40; VD H, 25). His department head was consulted, however, but offered no criticism. (TRANS 1, 32). In making their decision, the officers did not review Sweeney's references from former employers who expressed satisfaction with his performance and no belief he would be a poor risk in custody of funds. (J EXH, 4-6; VD W, 45-46). They focused on the magnitude of debt, reasons therefor, and his ability to handle it. He was suspended without pay because his debt exceeded the ability to pay. (TRANS 1, 14; VD W, 42, 51; VD H, 33). The November 28th meeting was to verify the bank's credit information. Were there additional assets or income of which the Bank was unaware? (VD W, 54-57). Sweeney revealed his bankruptcy filing at the December 3rd meeting and the decision to terminate ensued; he was so informed the following day.

Since termination, Sweeney conducted a comprehensive search for employment coincident with his education and experience. He engaged services of an employment search firm and submitted numerous resumes. (P EXH, 6, 13; TRANS 2, 4-25, 66-70, 112-114). To date he is unable to find employment comparable to the Ameritrust position. He obtained various positions incompatible with his training and expertise. Initially he accepted temporary and night-time employment to insure his availability for interviews. (TRANS 2, 70-73). Ultimately he accepted full-time employment in an unrelated job. (TRANS 2, 71-73). His interim earnings and benefits from this employment excluding overtime, total $47,159.00. (P EXH, 11, 14, 15; TRANS 2, 78-84, 122-125). During this period, Sweeney has not remained current with tax interpretation, research and compliance. Consequently, absence from the field has eroded his skills. (TRANS 2, 115).

Ameritrust provides employees an extensive list of benefits in addition to salary. The list includes health and medical insurance, free checking, pension plan, savings plan, tuition reimbursement, vacation and sick time. (P EXH, 7; VD H, 21-23). Testimony reflects these benefits total "about 30%" of salary. (VD H, 23-24). In addition, employee annual...