Ott v. Midland-Ross Corp.

• Decision Date: 04 June 1979
• Docket Number: No. 77-3118,MIDLAND-ROSS,77-3118
• Citation: 600 F.2d 24
• Parties: 19 Fair Empl.Prac.Cas. 1465, 19 Empl. Prac. Dec. P 9269 Arthur D. OTT, Plaintiff-Appellant, v.CORPORATION, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 24

600 F.2d 24

19 Fair Empl.Prac.Cas. 1465, 19 Empl. Prac.

Dec. P 9269

Arthur D. OTT, Plaintiff-Appellant, v. MIDLAND-ROSS CORPORATION, Defendant-Appellee.

No. 77-3118.

United States Court of Appeals Sixth Circuit.

Submitted Oct. 3, 1978.

Decided June 4, 1979.

William E. Armstrong, Hesser, McGraw & Armstrong Co., Cleveland, Ohio, Lester H. Needham, Jr., Mentor, Ohio, for plaintiff-appellant.

George J. Moscarino, Jones, Day, Reavis & Pogue, Bruce J. Havighurst, Cleveland, Ohio, for defendant-appellee.

Before WEICK, ENGEL and MERRITT, Circuit Judges.

ENGEL, Circuit Judge.

This case, arising under the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-34 (1976), as amended by Pub.L.No.95-256, 92 Stat. 189 (1978), is once more before us following an earlier remand by our court. In Ott v. Midland-Ross Corp., 523 F.2d 1367 (6th Cir. 1975), we reinstated Ott's complaint after the district court had ordered it dismissed pursuant to Rule 12(b)(6), Fed.R.Civ.P. The underlying facts in Ott I remain applicable here:

Count I of the complaint alleged that on January 4, 1971, when Ott was age 60, his employer, Midland-Ross Corporation, willfully and intentionally discharged him without cause, solely because of his age. On April 27, 1971 he filed a notice with the Secretary of Labor of his intent to file a civil action against Midland-Ross for violation of his rights under the Act, as required by 29 U.S.C. § 626(d). Thereafter, he was advised that the Department of Labor had obtained Midland-Ross' voluntary compliance with the Act and that he would be reinstated. Ott alleged that while he was awaiting a job assignment the corporation willfully, maliciously and falsely represented that if he would forego his rights under the Act, it would hire him as a consultant at least ten days each month and that he would make more money under such an arrangement. Relying on the representations, and believing them to be true, Ott accepted early retirement and entered into the consulting agreement on October 7, 1971.

Count II stated an alternative claim for breach of contract.

Id. at 1368.

As noted by Judge Weick in Ott I, the plaintiff was terminated from his employment with Midland-Ross on January 4, 1971, and his cause of action under the Age Discrimination in Employment Act accrued on that date. Because he alleged a willful violation of the Act, he had three years thereafter within which to commence his action, the Age Discrimination Act having adopted by reference Section 6 of the Portal-to-Portal Act, 29 U.S.C. § 255 (1976), and that Act's three-year statutory period for willful violations. Ott I, 523 F.2d at 1369 n. 1. Ott did not commence his action in the district court until August 22, 1974, approximately seven and one-half months after the three-year period of limitations would normally have expired.

In the order which was the subject of the first appeal, the district court had held that Ott, by his own admission, waived his rights under the Act when he entered into the consultation agreement with Midland-Ross after his termination. Disagreeing, we held in Ott I that the allegations of his complaint, if proved, would be sufficient to create an estoppel against Midland-Ross' assertion of either the consultation agreement or the statute of limitations as a bar to the action. Relying upon the principle that "no man may take advantage of his own wrong," we held that an employer whose actions induced its employee to delay filing a suit would be estopped from asserting that the employee's subsequent conduct waived his rights under the Act, citing Glus v. Brooklyn Eastern District Terminal, 359 U.S. 231, 79 S.Ct. 760, 3 L.Ed.2d 770 (1959), and related cases. We further held, however, that even if Ott had, in fact, been wrongfully induced by the defendant to delay filing suit until after the running of the limitation period, he was nonetheless obligated to "bring suit within a reasonable time after discovery, or within a reasonable time after he should have discovered the actions of the defendant that induced him to delay filing suit." 523 F.2d at 1370.

Upon remand by our court, Midland-Ross again moved for summary judgment, this time on the basis that upon the undisputed facts, Ott's cause of action was barred by his unreasonable delay in filing suit after he should have discovered the wrongful inducement. Acknowledging that, as we held in Ott I, the normal three-year period of limitation might be tolled or suspended by the conduct of the employer in having fraudulently induced Ott to delay filing his suit until after the statutory limitation had expired, the district judge nonetheless held that the undisputed facts, construed as he conceived them in a light most favorable to the plaintiff, showed that Ott, after discovering the employer's fraud, had nonetheless waited an unreasonable length of time within which thereafter to commence his suit, and that he was, therefore, no longer entitled to enjoy the benefits of the estoppel.

A mass of material was adduced by both parties in support of and in opposition to Midland-Ross' motion for summary judgment on the statute of limitations issue. The district judge placed exclusive reliance upon a letter of July 25, 1972, from G. L. Winger, vice-president of a division of Midland-Ross, to Ott, in which Winger informed Ott that he was not presently needed as a consultant but that if a need did arise, Ott's services would be considered. ¹ This letter, according to the district court's opinion, "placed the plaintiff on notice that the October 7, 1971 agreement was not going to be carried out. If this be the fraud about which plaintiff complains he had the responsibility to file his suit within a reasonable time thereafter. He did not. He waited until August 22, 1974, more than two years, to file his complaint. Beyond two years is not a 'reasonable' period within which to file a complaint in the context of this case." ²

The letter of July 25 is but a portion of the extensive evidence submitted for the court's consideration. It is apparent that the district judge conceived the question on summary judgment to be whether Ott knew or should have known that his consultation contract would not be honored by Midland-Ross. We cannot agree. While that question may be pertinent to his pendent contract claim, a matter we do not address, the issue before the court on summary judgment in his age discrimination case is somewhat different. It may well be that by July 25, 1972, Ott should have known that the company was not going to furnish him substantial employment opportunities under the consultation agreement; it by no means follows as a matter of law that Ott would inevitably have been led by that time to the conclusion that the contract itself had been procured by material misrepresentations of fact, or that Midland-Ross had entered into the agreement without intent to perform it and for the purpose of inducing him to forego suit until the statute of limitations had expired.

Upon an examination of the record, we conclude that the district court improvidently granted summary judgment in favor of the employer upon the facts available to him. Instead, we hold that the evidence on the issue was conflicting and that reasonable persons, applying a proper construction of the law of estoppel, as hereinafter set forth, would differ as to whether Ott slept upon his rights for an unreasonable time after he should have discovered the deception and before commencing his age discrimination action. ³

Midland-Ross also urges us to affirm the judgment of the district court on the ground that, as a matter of law, Ott has failed to sustain his claim that an estoppel was created by the conduct of Midland-Ross. We reject this argument. ⁴ Viewed in the light most favorable to Ott, the record discloses that on April 27, 1971, shortly after his discharge, Ott filed with the Secretary of Labor a timely notice of intent to sue Midland-Ross under the ADEA, as required by 29 U.S.C. § 626(d). The Labor Department, acting through one Brushaber, attempted conciliation of the dispute by contacting Philip Canepa, general counsel of defendant, and another of its attorneys. On June 23 Brushaber informed Ott that he had convinced Midland-Ross to rehire him and suggested that, because its officials had spoken highly of him, Ott might have more success negotiating the details of the re-employment directly with the company rather than through the Department of Labor.

During the course of negotiations which ultimately led to the consultation agreement, Canepa told Ott that the consultation agreement would be financially more advantageous than his prior employment with Midland-Ross, that there was "a great deal of consulting work . . . within the corporation," and that "as a minimum" he would receive consultation assignments for an average of ten days per month. While the consultation agreement does not mention a guarantee or minimum, Ott's offer of proof would support a finding that this understanding was omitted "on Mr. Canepa's expressed concern that the minimum days might be construed as a limitation on Mr. Ott's time."

Canepa identified Midland-Ross' need for Ott's services as follows: "an average of four days work per month in the corporate office, three days per month from National Castings Division and three days per month from the Midrex Division."

Despite Canepa's representations as to the prospective requirements of National Castings and Midrex, the record indicates that officials of those divisions of defendant never stated to Canepa that they could use his services for an average of three days a month. One Midland-Ross official stated that "he had no idea where Mr. Canepa . . . got the idea there was any traffic consulting work available at the National Castings Division." In fact, Ott never worked a single day for either division under the consultation agreement.

Canepa gave assurances that he would...