Smith v. Montgomery Ward & Co., Inc.

• Decision Date: 15 July 1983
• Docket Number: Civ. A. No. 83-JM-113.
• Citation: 567 F. Supp. 1331
• Parties: Varick M. SMITH, a/k/a Pete Smith, Plaintiff, v. MONTGOMERY WARD & CO., INCORPORATED, an Illinois corporation, et al., Defendants.
• Court: U.S. District Court — District of Colorado

567 F. Supp. 1331

Varick M. SMITH, a/k/a Pete Smith, Plaintiff, v. MONTGOMERY WARD & CO., INCORPORATED, an Illinois corporation, et al., Defendants.

Civ. A. No. 83-JM-113.

United States District Court, D. Colorado.

July 15, 1983.

Steven F. Biskup, Andrew A. Brodkey, Gorsuch, Kirgis, Campbell, Walker & Grover, Denver, Colo., for plaintiff.

Michael D. Nosler, Laura Ann Wing, Rothgerber, Appel & Powers, Denver, Colo., for defendant.

MEMORANDUM OPINION AND ORDER

JOHN P. MOORE, District Judge.

THIS MATTER comes before the Court on two separate motions to dismiss. The first is a motion to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6) filed on behalf of defendants Montgomery Ward & Co., Inc. ("Montgomery Ward") and Montgomery Ward & Co., Inc. Retirement Security Plan ("the Plan"). The second is a motion to dismiss for lack of personal jurisdiction and for failure to state a claim filed on behalf of defendant Gordon R. Worley ("Worley"). Worley also joins in the 12(b)(6) motion filed by the other defendants.

Defendants' 12(b)(6) motion is addressed to five of plaintiff's seven claims. For the reasons stated below, this motion shall be granted in part and denied in part.

This is an action for damages brought under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621, et seq., and the Employment Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001, et seq. In addition to the federal causes of action, plaintiff has alleged state law claims for breach of contract and outrageous conduct. Plaintiff seeks damages for loss of income, loss of employee benefits, including diminution of retirement benefits, unpaid wages based upon accumulated vacation time and earned time off, relocation costs, and pain and suffering.

The first issue raised in defendants' motion to dismiss is whether plaintiff may state a claim for punitive damages and damages for pain and suffering for alleged violations of the ADEA. Defendants assert that the language of the ADEA precludes recovery of general compensatory and exemplary damages.

Initially it should be noted that all of the circuit courts which have examined this question have held that punitive damages and pain and suffering damages are not available for violations of the ADEA. Pfeiffer v. Essex Wire Corp., 682 F.2d 684 (7th Cir.1982), cert. denied, ___ U.S. ___, 103 S.Ct. 453, 74 L.Ed.2d 606 (1982); Naton v. Bank of California, 649 F.2d 691 (9th Cir.1981); Slatin v. Stanford Research Institute, 590 F.2d 1292 (4th Cir.1979); Walker v. Pettit Construction Co., Inc., 605 F.2d 128 (4th Cir.1979); Vazquez v. Eastern Air Lines, Inc., 579 F.2d 107 (1st Cir.1978); Dean v. American Security Insurance Co., 559 F.2d 1036 (5th Cir.1977), cert. denied, 434 U.S. 1066, 98 S.Ct. 1243, 55 L.Ed.2d 767 (1978); Rogers v. Exxon Research & Engineering Co., 550 F.2d 834 (3rd Cir.1977), cert. denied, 434 U.S. 1022, 98 S.Ct. 749, 54 L.Ed.2d 770 (1978). However, the decisions in this area are not uniform. Indeed, there are differing outcomes even among the decisions in this district. Wise v. Olan Mills Incorporated of Texas, 485 F.Supp. 542 (D.Colo.1980) (Carrigan, J.) (punitive damages and compensatory damages for pain and suffering available under the ADEA); Kennedy v. Mountain States Tel. & Tel. Co., 449 F.Supp. 1008 (D.Colo.1978) (Kane, J.) (punitive damages available under the ADEA); Hannon v. Continental National Bank, 427 F.Supp. 215 (D.Colo.1977) (Finesilver, J.) (punitive damages not available under the ADEA). The United States Court of Appeals for the Tenth Circuit has not spoken on the issue at this time.

This issue is purely one of statutory construction. The remedies provisions of the ADEA are found in 29 U.S.C. § 626(b) and (c). The language at issue is as follows:

(b) ... Amounts owing to a person as a result of a violation of this chapter shall be deemed to be unpaid minimum wages or unpaid overtime compensation for purposes of sections 216 and 217 of this title: Provided, That liquidated damages shall be payable only in cases of willful violations of this chapter. In any action brought to enforce this chapter the court shall have jurisdiction to grant such legal or equitable relief as may be appropriate to effectuate the purposes of this chapter, including without limitation judgments compelling employment, reinstatement or promotion, or enforcing the liability for amounts deemed to be unpaid minimum wages or unpaid overtime compensation under this section....

(c) Any person aggrieved may bring a civil action in any court of competent jurisdiction for such legal or equitable relief as will effectuate the purposes of this chapter ....

The issue is whether the language in § 626(b) and (c) which allows for "legal and equitable relief" means that plaintiff is entitled to the full panoply of legal relief or whether that language is limited by the definition of "amounts owing" and the provision for liquidated damages.

As a matter of statutory construction and policy, it is my opinion that the decisions which hold that exemplary damages and pain and suffering damages are unavailable under the ADEA represent the correct result. The legislative history of the ADEA has been thoroughly reviewed elsewhere, see, e.g., Pfeiffer v. Essex Wire Corp., supra at 687, and need not be repeated here. Suffice to say that if Congress had wanted to provide such remedies, it could have done so, and the legislative history indicates it chose instead to provide for liquidated damages to compensate plaintiffs for losses over and above those for unpaid wages. Where Congress has chosen not to speak, the court should not substitute its judgment for that of the legislature. Moreover, those courts which have held that exemplary and general compensatory damages are unavailable have done so on the basis that to allow such remedies would interfere with the conciliation process provided for under the ADEA.¹ That reasoning appears to be sound as a matter of policy.

Defendants' motion to dismiss next addresses plaintiff's third claim for relief, in which plaintiff asserts that the alleged wrongful discharge constituted a breach of his employment contract. Defendants argue that the law in both Colorado and Florida² is clear that an employment contract for an indefinite term is terminable at will and that there can be no breach of contract for terminating an employment contract for an indefinite term. Lampe v. Presbyterian Medical Center, 41 Colo.App. 465, 590 P.2d 513 (1978); Justice v. Stanley Aviation Corp., 35 Colo.App. 1, 530 P.2d 984 (1974); Forde v. Royal's Inc., 537 F.Supp. 1173 (S.D. Fla.1982). Defendants' statement of the law is correct. The general rule is that in the absence of special consideration or an express stipulation as to the duration of employment, an indefinite general hiring is terminable at will by either party. Lampe v. Presbyterian Medical Center, supra, 590 P.2d at 514. Some states have created exceptions to this general rule for situations where a termination is alleged to be in bad faith or in violation of a stated public policy. See Savodnik v. Korvettes, Inc., 488 F.Supp. 822 (E.D.N.Y.1980). However, it appears at the present time that neither Colorado nor Florida has recognized these exceptions.³ Under current state law, plaintiff's allegations here are insufficient to state a claim for breach of employment contract or wrongful discharge.

The next issue raised by the motion is whether plaintiff has stated a claim for outrageous conduct. The question of whether a certain defendant has caused intentional or reckless infliction of emotional distress is generally one for the jury to determine. Enright v. Groves, 39 Colo.App. 39, 560 P.2d 851 (1977). However, there is a certain threshold level of conduct that must be established for plaintiff to state a cause of action, Rawson v. Sears, Roebuck & Co., 530 F.Supp. 776 (D.Colo.1982); and the initial determination of whether the facts alleged state a cause of action is a question of law. Meiter v. Cavanaugh, 40 Colo.App. 454, 580 P.2d 399 (1978); First National Bank in Lamar v. Collins, 44 Colo.App. 228, 616 P.2d 154 (1980).

In Rawson v. Sears, Roebuck & Co., supra, Judge Kane reviewed the Colorado cases involving outrageous conduct and concluded that in most cases such a claim would be cognizable only where the defendant has engaged in a pattern of conduct that either has intended to cause or recklessly did cause severe emotional distress.⁴ He also stated that "in many, if not most, civil lawsuits the plaintiff believes that the defendant's conduct has been outrageous .... Yet very few give rise to a cognizable claim for intentional infliction of emotional distress." Id. at 780.

In the present case, it is questionable whether plaintiff has alleged a sufficient pattern of conduct on the part of defendants to state a claim for outrageous conduct. The conduct alleged is that defendants discharged plaintiff from his job; that defendants caused plaintiff's job performance rating to be lowered, thereby disqualifying him from certain benefits; that defendants withheld information regarding plaintiff's benefits; and that defendants failed to make timely payments to plaintiff under the retirement plan. In my opinion, these acts barely rise to the level of "outrageous conduct."⁵ However, these issues are mainly factual, and the conscience of the community — the jury — must be brought to bear, and the issue should not be resolved by the court. Thus, it is my conclusion that defendants' motion to dismiss plaintiff's claim for breach of contract and plaintiff's claim for outrageous conduct be denied.

Finally, defendant has moved to dismiss plaintiff's sixth and seventh claims for relief. These are claims for unjust enrichment on the grounds that plaintiff is entitled to compensation for accrued vacation pay and "earned time off." Whether plaintiff has a right of compensation for these amounts depends upon the...