Marchant v. Schenley Industries, Inc.

• Decision Date: 29 September 1983
• Docket Number: No. 82-3667.,82-3667.
• Parties: Howard M. MARCHANT, Plaintiff, v. SCHENLEY INDUSTRIES, INC. and Schenley Affiliated Brands Corp., Defendants.
• Court: U.S. District Court — Middle District of Tennessee

572 F. Supp. 155

Howard M. MARCHANT, Plaintiff, v. SCHENLEY INDUSTRIES, INC. and Schenley Affiliated Brands Corp., Defendants.

No. 82-3667.

United States District Court, M.D. Tennessee, Nashville Division.

September 29, 1983.

Thomas W. Steele, Nashville, Tenn., for plaintiff.

John M. McCord, Tullahoma, Tenn., for defendants.

MEMORANDUM

WISEMAN, District Judge.

This action is before this Court on plaintiff's motions to amend the complaint and on defendants' motion to dismiss and for summary judgment. Plaintiff Howard M. Marchant alleges in his original complaint that defendants Schenley Industries, Inc., and Schenley Affiliated Brands Corp.¹ discharged him because of his age² in violation of the Age Discrimination in Employment Act of 1967 ADEA, 29 U.S.C. § 621 et seq.³ Plaintiff in the complaint requests liquidated damages, costs including attorney's fees, and damages for pain and suffering.

Plaintiff, in addition to asserting new jurisdictional grounds,⁴ now moves the Court to amend his complaint in three significant respects:⁵ (1) Plaintiff requests that the Court exercise pendent jurisdiction over a state breach of contract claim he alleges against defendant; (2) plaintiff requests that the Court exercise pendent jurisdiction over a state tortious discharge claim he alleges against defendant; and (3) plaintiff requests the additional relief of reinstatement or, in the alternative, damages in lieu of reinstatement.⁶ Defendants oppose these amendments and also move the Court to dismiss plaintiff's claims and this action, and to grant defendants partial summary judgment on the issue of damages for pain and suffering and emotional distress.⁷

This Court grants plaintiff's requests to amend his complaint pursuant to Rule 15(a), Fed.R.Civ.P. Applying Tennessee law, however, the Court sua sponte dismisses plaintiff's tortious discharge claim for failure to state a cause of action and grants defendants partial summary judgment as a matter of law on plaintiff's breach of contract claim. In addition, the Court denies defendants' motion to dismiss plaintiff's original complaint, but grants defendants' motion for partial summary judgment on the issue of damages for pain and suffering and emotional distress.

I. Plaintiff's Motions to Amend Complaint

A. State Claims

1. Jurisdiction

Plaintiff in his motion to amend the complaint and defendants in their reply brief argue whether the Court should exercise pendent jurisdiction of plaintiff's state claims. Yet, plaintiff in his motion to amend asserts conclusively that the Court has diversity jurisdiction over this action. Pendent federal jurisdiction over state law claims is discretionary with the Court, United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966), but if the parties are diverse the jurisdiction is original and this Court is obligated to accept all claims arising out of a single alleged wrong, Cemer v. Marathon Oil Co., 583 F.2d 830, 832 n. 2 (6th Cir.1978).

For purposes of diversity jurisdiction, a corporation is deemed a citizen of "any State by which it has been incorporated and of the State where it has its principal place of business." 28 U.S.C. § 1332(c). The Court can find no statement of citizenship for defendant in the pleadings or briefs in this action. The plaintiff states in his complaint that he is a resident of Davidson County, Tennessee, and that defendant "does business" in Middle Tennessee. Defendants' corporate mailing address as listed in the pleadings is in New York, but no evidence exists for its state of incorporation or its principal place of business. This Court has no basis from which to conclude diversity jurisdiction other than plaintiff's unopposed assertion of diversity in his motion to amend.

Nevertheless, a discussion of the pros and cons of exercising pendent jurisdiction over state law claims in an ADEA cause of action aside,⁸ this Court grants plaintiff leave to amend his complaint and assumes for the purposes of these motions that diversity jurisdiction exists and that Tennessee law applies to plaintiff's state law claims. Grant v. Atlas Powder Co., 241 F.2d 715 (6th Cir.1957).⁹ In this action, whether the Court exercises pendent or original jurisdiction is not outcome determinative because plaintiff's state claims lack merit as a matter of law.

2. Merits

(a) Breach of Contract

Although no formal employment contract between the parties exists, plaintiff asserts that defendants promised orally that if plaintiff performed satisfactorily he would have job security. Plaintiff cites Delzell v. Pope, 200 Tenn. 641, 294 S.W.2d 690 (1956), to support his breach of contract claim against defendants. The Tennessee Supreme Court in Delzell held that under certain circumstances a hiring at a fixed salary is a contract for that pay period. Delzell, supra, 294 S.W.2d at 693-94. For example, a hiring at a monthly salary can be a contract for a month and a hiring at a yearly salary can be a contract for a year. Plaintiff in this case, however, argues for a perpetual contract based not on pay period but on good behavior.¹⁰ The facts of Savage v. Spur Distributing Co., 33 Tenn.App. 27, 228 S.W.2d 122 (1950) (permission to appeal denied by Tennessee Supreme Court March 17, 1950), more closely approximate plaintiff's claims. The plaintiff in Savage sued for breach of contract, alleging that his employer promised to employ him as long as he worked satisfactorily. The court concluded that although a conflict of authority exists whether compensation for one week, one month, or one year is employment for that period, the employee-at-will rule generally is still the law in Tennessee, and unless plaintiff made a counter-promise to work for a specified period, the employment contract was for an "indefinite hiring." Savage, supra, 228 S.W.2d at 124. See also Garrison v. Lannom Manufacturing Co., 55 Tenn.App. 419, 402 S.W.2d 462 (1965); Whittaker, infra.

Plaintiff in this case alleges no promise by him to work for defendants until retirement, nor does he allege an implied contract corresponding to any compensation period. Thus, no material issue of fact exists on plaintiff's breach of contract claim and this Court grants partial summary judgment to defendants on that claim as a matter of law.

(b) Tortious Discharge

Plaintiff cites California cases to support his alleged action for tortious discharge. These cases recognize a tort cause of action for wrongful discharge in situations in which the discharge violates public policy. See, e.g., Tameny v. Atlantic Richfield Co., 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330 (1980). Tennessee courts, however, do not recognize a cause of action for tortious discharge. The court in Whittaker v. Care-More, Inc., 621 S.W.2d 395 (Tenn.App.1981) (appeal to Tennessee Supreme Court denied September 14, 1981), discusses specifically the tortious discharge theory and rejects this theory as a cause of action under Tennessee law.¹¹ Upholding the employee-at-will rule that a contract for employment for an indefinite term is a contract at will and can be terminated by either party at any time without cause, the court in Whittaker states that it is "aware that the doctrine employee-at-will is and has been attacked under both contract and tort theories," but that the doctrine "is still viable in Tennessee, except where modified by statute." Whittaker, supra, at 396. Accordingly, this Court dismisses plaintiff's tortious discharge allegation for failure to state a claim under Tennessee law.

B. Additional Relief

Plaintiff's motion to amend his complaint to request the additional relief of reinstatement or, in the alternative, damages in lieu thereof, is granted.¹² Reinstatement clearly is a proper remedy under ADEA § 626(b).¹³ Defendants contend that damages including future bonuses, raises, and advancements are improper elements of relief under the ADEA. The ADEA, however, provides in section 626(b) that the court may award "such legal or equitable relief as may be appropriate to effectuate the purposes of this chapter." In addition, section 626(b) also authorizes an award of liquidated damages in the case of a willful violation, and these damages are left to the court's discretion. Whether the damages requested by plaintiff are recoverable under this section depends on the factual circumstances of his case and thus is inappropriate for summary judgment at this time. Accordingly, any motion by defendants for summary judgment on the issue of reinstatement and future damages is denied.

II. Defendants' Motion to Dismiss and for Partial Summary Judgment

A. Motion to Dismiss Complaint or for Judgment on the Pleadings

Plaintiff states in his complaint that he is within the protected age category, that he was discharged and replaced by a younger person, and that he was able to do the work required of the position from which he was discharged. Thus, plaintiff's complaint states a cause of action under the ADEA. Carpenter v. Continental Trailways, 446 F.Supp. 70 (E.D.Tenn.1978). In addition, material issues of fact remain undecided, including but not limited to whether plaintiff's age was a determining factor in his discharge, whether the reason defendants give for discharging plaintiff is legitimate, and whether defendants acted with discriminatory intent. Accordingly, this Court denies defendants' motion to dismiss the complaint or for judgment on the pleadings.

B. Motion for Partial Summary Judgment on Damages for Pain and Suffering

Plaintiff requests damages for pain and suffering and emotional distress under two theories. First, he urges the Court to find that damages for pain and suffering are recoverable under the ADEA; and second, he requests these damages under his tortious discharge claim. However, plaintiff's tortious discharge claim has been dismissed, and this Court now holds in accordance with Hill v. Spiegel, Inc., 708 F.2d 233 (6th Cir.1983)¹⁴ that damages for...