Sellsted v. Washington Mut. Sav. Bank

• Decision Date: 19 April 1993
• Docket Number: No. 30359-7-I,30359-7-I
• Court: Washington Court of Appeals
• Parties: , 66 Fair Empl.Prac.Cas. (BNA) 267 Thomas O. SELLSTED, Appellant, v. WASHINGTON MUTUAL SAVINGS BANK, Respondent. Division 1

Page 852

69 Wn.App. 852

851 P.2d 716, 66 Fair Empl.Prac.Cas. (BNA) 267

Thomas O. SELLSTED, Appellant, v. WASHINGTON MUTUAL SAVINGS BANK, Respondent.

No. 30359-7-I.

Court of Appeals of Washington,

Division 1.

April 19, 1993.

Publication Ordered May 17, 1993.

Jane Goodman, Los Angeles, CA, Jon Rosen, Seattle, for appellant.

Steven Winterbauer, Robert Riley, Seattle, for respondent.

AGID, Judge.

Thomas O. Sellsted appeals from a summary judgment order entered against him on his age discrimination claim. He contends that summary judgment was improper because genuine issues of material fact exist as to his job performance and the circumstances surrounding his discharge. We reverse and remand for trial.

Thomas O. Sellsted was hired by Washington Mutual Savings Bank ("Washington Mutual") as Vice President in charge of its Small Business Administration loan program at the Preston Ridge subsidiary in 1981. At the time, he had 26 years' experience in the banking industry. In 1983, Sellsted was transferred to Washington Mutual's Commercial Real Estate Lending Department ("CRE") at its main branch in Seattle where he worked as a loan officer until his discharge on August 21, 1989. At the time of his discharge, Sellsted was 57 years old. All Sellsted's annual written performance evaluations from 1983 through 1988 indicate that his work consistently exceeded the standards set for his position. ¹

In early 1988, Sellsted prepared a loan summary for a loan to purchase a nursing home. It was approved by the loan committee to which such summaries were submitted. The borrower thereafter modified the property and sought a new loan based on the expanded facility. In August 1988, Sellsted outlined that proposal to the loan committee, which approved the preparation of a second loan summary. In February 1989, the CRE department reviewed and endorsed the loan summary prepared by Sellsted for the expanded nursing facility. At the loan committee meeting on February 27, however, the committee requested that Sellsted obtain additional information and resubmit the loan request after those revisions had been incorporated into the loan summary. This was in part due to new departmental standards and expectations implemented by Lee Lannoye. ² Sellsted met with Lannoye to discuss those revisions on March 1, 1989. The revised nursing home loan summary was presented to the loan committee on March 20, and was approved. Other bank employees testified that the loan has since performed trouble free. ³

On March 13, 1989, Sellsted was one of three CRE employees, all over 40, who were issued 90-day probation notices. ⁴ At Sellsted's request, he again met with Lannoye on or about March 30. Sellsted testified that Lannoye simply reiterated at that meeting what he had said at their March 1 meeting. According to Lannoye's own testimony, other than indicating to Flowers that he was still not persuaded that Sellsted was meeting his standards, Lannoye took no further steps after the March 30 meeting to meet with Sellsted or otherwise inform him of his ongoing concerns about the quality of his work.

After the March 30 meeting, Sellsted completed a writing course, and all of his loan summaries submitted after February 27 were approved. In May 1989, Sellsted's immediate supervisor, Robert Flowers, complimented him on a loan summary presentation, telling him it was excellent. ⁵ Lannoye confirmed that Flowers had approached him at the time, suggesting that Sellsted's probation period end. He also acknowledged that Sellsted made an effort to improve and that subsequent loan summaries submitted by Sellsted were satisfactory. Sellsted's probation expired of its own terms in June 1989. Thereafter, Sellsted was selected to participate in a management training program, and his attendance at the Western Regional Mortgage Banker's Conference in Sun Valley in July 1989 was paid for by Washington Mutual.

On August 21, 1989, Lannoye informed Sellsted that he was terminated as of that date. Sellsted testified that Lannoye explained the termination as part of a work force reduction. However, the written termination notice listed "redefinition of job responsibilities requires greater knowledge and experience" as the reason for termination. In response to the concern of another loan officer, Marvin Leach, that Sellsted had been terminated because of his age, Lannoye responded that the issue was not one of age but of competence. ⁶ Lannoye states in his declaration that his lack of confidence in Sellsted's abilities stemmed largely from his "poor performance" on the February nursing home loan submission.

After Sellsted's discharge, Washington Mutual hired Neil Maris, age 33, as a CRE loan officer to perform the same duties that Sellsted had performed. When Maris was rehired by a previous employer 10 months later, the vacancy was filled by Jeff Morgan, age 37, a trainee who had no previous CRE lending experience.

Sellsted thereafter filed this action alleging that his discharge violated RCW Ch. 49.60, which prohibits discrimination based on age. After discovery was completed, Washington Mutual moved for summary judgment on the ground that Sellsted's allegations were nothing more than unsupported speculation. Included among the documents submitted in Sellsted's response to that motion was the affidavit of a third-party witness, Ronald L. Bozarth. ⁷ The trial court granted Washington Mutual's motion to strike both Bozarth's affidavit and one sentence of Sellsted's affidavit. It then granted Washington Mutual's motion for summary judgment. In support of his motion for reconsideration, Sellsted submitted an additional excerpt from his deposition testimony and additional documents to substantiate his earlier affidavit, some of which Washington Mutual moved to strike on the ground that they did not constitute "newly discovered evidence." The trial court granted the motion to strike most of the documents and denied Sellsted's motion for reconsideration. This appeal followed.

On an appeal from summary judgment, the appellate court engages in the same inquiry as the trial court, construing the facts and reasonable inferences therefrom in the manner most favorable to the nonmoving party to ascertain whether there is a genuine issue of material fact. deLisle v. FMC Corp., 57 Wash.App. 79, 82, 786 P.2d 839, review denied, 114 Wash.2d 1026, 793 P.2d 974 (1990). In an action brought under RCW 49.60.180, which prohibits age discrimination in employment, the employee has the initial burden of presenting a prima facie case of age discrimination. Roberts v. ARCO, 88 Wash.2d 887, 892, 568 P.2d 764 (1977); Hatfield v. Columbia Fed. Sav. Bank, 57 Wash.App. 876, 880, 790 P.2d 1258 (1990). To make out a prima facie case of age discrimination, an employee must show that: (1) he or she was within the statutorily protected age group; (2) was discharged; (3) was doing satisfactory work; and (4) was replaced by a younger person. Grimwood v. University of Puget Sound, Inc., 110 Wash.2d 355, 362, 753 P.2d 517 (1988) (citing McDonnell Douglas Corp. v. Green, 411 U.S. 792, 804, 93 S.Ct. 1817, 1825, 36 L.Ed.2d 668 (1973)). ⁸

Sellsted met this burden. At 57, he was within the protected age group. ⁹ He was discharged and replaced by a younger person. ¹⁰ Sellsted's claim that he was doing satisfactory work at the time he was discharged, ¹¹ while disputed by Washington Mutual, is supported by the evidence he produced at the summary judgment hearing. This includes his laudatory annual written performance evaluations for the years 1983 through 1988; loan committee approval under the new standards of all loan summaries he submitted after February 27; the lack of any criticism, warnings or counselling between March 31 and August 21 when he was discharged; his immediate supervisor's statement that he did an excellent job in May and suggestion that the probationary period be terminated early; the automatic expiration of his probationary period; and Lannoye's own testimony that he considered the loan summaries Sellsted prepared after the nursing home loan summary satisfactory. This evidence was sufficient to enable Sellsted to meet his initial burden of establishing a prima facie case. ¹²

The burden then shifts to the employer to articulate a legitimate, non-discriminatory reason for the discharge, i.e., to produce evidence to show that the employee was discharged for reasons other than his age. Grimwood, 110 Wash.2d at 364, 753 P.2d 517; Roberts, 88 Wash.2d at 892, 568 P.2d 764. Washington Mutual relies on the problems with the February nursing home loan summary and Sellsted's asserted inability to meet the new, more exacting standards as the reason for his termination. It asserts that, based on the deficiencies in the nursing home loan summary, Sellsted's superiors lost confidence in his ability to perform, and that confidence was never regained. The bank also relies on its assertion that Flowers told Sellsted in May that Lannoye still had concerns about his work, ¹³ concerns which apparently remained until his termination. Sellsted testified that Washington Mutual also told him at different times that his termination was a result of a reduction in force and his inability to discharge his redefined job responsibilities. If not rebutted, any of these reasons standing alone could meet Washington Mutual's burden of articulating a legitimate nondiscriminatory reason for Sellsted's termination.

Once the employer meets its burden, the employee resisting summary judgment must produce evidence that raises a genuine issue of material fact on the question of whether the reasons given by the employer for discharging the employee are unworthy of belief ¹⁴ or that they are a mere pretext for what is in fact a discriminatory purpose. Texas Dep't of Comm'ty Affairs v. Burdine, 450 U.S. 248, 252, 256, 101 S.Ct. 1089, 1093, 1095, 67 L.Ed.2d 207 (1981); Grimwood, 110 Wash.2d at 364, 753 P.2d 517; Hatfield, 57...