Vichare v. AMBAC Inc.

• Decision Date: 27 November 1996
• Docket Number: No. 2014,D,2014
• Citation: 106 F.3d 457
• Parties: 72 Fair Empl.Prac.Cas. (BNA) 1008, 70 Empl. Prac. Dec. P 44,722, 65 USLW 2471, 46 Fed. R. Evid. Serv. 362 P.K. VICHARE, Plaintiff-Appellant, v. AMBAC INC. and AMBAC Indemnity Corp., Defendants-Appellees. ocket 96-7201.
• Court: U.S. Court of Appeals — Second Circuit

Page 457

106 F.3d 457

72 Fair Empl.Prac.Cas. (BNA) 1008,

70 Empl. Prac. Dec. P 44,722, 65 USLW 2471,

46 Fed. R. Evid. Serv. 362

P.K. VICHARE, Plaintiff-Appellant, v. AMBAC INC. and AMBAC Indemnity Corp., Defendants-Appellees.

No. 2014, Docket 96-7201.

United States Court of Appeals Second Circuit.

Argued Aug. 7, 1996.

Decided Nov. 27, 1996.

Lawrence R. Sandak, New York City (Sive, Paget & Riesel, P.C., New York City, of counsel), for Plaintiff-Appellant.

Bettina B. Plevan, New York City (Aliza F. Herzberg, John F. Fullerton, III, Proskauer Rose Goetz & Mendelsohn LLP, New York City, of counsel), for Defendants-Appellees.

Before: MESKILL, CALABRESI, and PARKER, Circuit Judges.

PARKER, Circuit Judge:

P.K. Vichare, plaintiff-appellant, brought suit in the Southern District of New York (Sidney H. Stein, Judge ), alleging that defendant AMBAC Indemnity Corp. and its parent AMBAC Inc. (collectively, "AMBAC") discriminated against him on the basis of race or national origin (Vichare is Indian) in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. The case was tried to a jury, which returned a verdict for AMBAC. The jury also delivered a statement concurrent with its verdict. Judge Stein entered judgment for AMBAC. Vichare appeals, arguing (1) that the jury's statement should not have been permitted, and, in the event, impermissibly qualified and compromised the verdict, and (2) that the district court incorrectly instructed the jury regarding the admissibility of after-acquired evidence and burden of proof. We affirm.

I. BACKGROUND.

In 1989, P.K. Vichare, a naturalized citizen of Indian origin, began working at AMBAC as a First Vice President and AMBAC's Director of Technology. AMBAC's principal business is insuring municipal bonds. Shortly after his arrival at AMBAC, Vichare retained the services of a computer consulting firm called Computer Software Services ("CSS"), which in turn retained many programmers of Indian origin. Vichare was promoted to Senior Vice President in July of 1989. The day-to-day operations of AMBAC were, at the time Vichare arrived at AMBAC, run by a Management Committee. Vichare was never put on this committee, although there were non-Indian Senior Vice Presidents on the committee. AMBAC terminated its relationship with CSS midway through 1990 because the project for which CSS had been hired was completed. In 1992, the Management Committee was reorganized as the Operating Committee; Vichare was not put on this either. Vichare's uncorroborated testimony was that several members of the Management Committee made racial remarks about Indians and that he received "disappointing" bonuses despite good performance reviews. In March 1993, Vichare was told that he was to begin reporting directly to the President of AMBAC, Phillip Lassiter. This relationship was short-lived. On May 11, 1993, Lassiter replaced Vichare as Director of Technology; Vichare was given the title of Chief Technologist, and his salary was reduced. He was fired August 30, 1993.

II. PROCEEDINGS BELOW.

Vichare sued AMBAC under Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq., in federal district court, alleging that the adverse employment decisions made against him were the result of illegal discrimination based on his race and national origin. Specifically, Vichare claimed that he had been denied membership on the Management Committee, denied membership on the Operating Committee, paid less than comparable AMBAC employees, demoted, and finally fired due to his race and national origin. AMBAC, on the other hand, claimed that Vichare had been demoted and dismissed because of his performance, personality, poor rapport with the users of the computer systems he supervised, and lack of familiarity with the business side of AMBAC's work.

During the discovery phase of the litigation, AMBAC uncovered evidence that, it alleged, showed that Vichare had received secret kickback payments from the subcontractor CSS. AMBAC filed a counterclaim against Vichare based on this evidence, on the theory that Vichare had breached a fiduciary duty to AMBAC. Vichare moved prior to trial to bifurcate the counterclaim from his Title VII claim, arguing that any after-acquired evidence of impropriety on Vichare's part was irrelevant to the question of whether AMBAC had illegally discriminated against Vichare and would be unfairly prejudicial to Vichare at trial. The court denied this motion.

Near the end of trial, the court decided to deliver a special verdict form to the jury. At the charging conference, Vichare proposed a special verdict form that itemized each of the alleged discriminatory or retaliatory actions taken by AMBAC. The judge rejected this proposal, and gave the jury a special verdict form that lumped the discrimination and retaliation claims together.

The jury then deliberated for two days, October 11 and 12. During that time, it asked several questions of the court, and indicated that it was having trouble reaching unanimity.

On October 13, the jury again indicated that it had not reached unanimity and that it seemed unlikely to do so. The court then entertained proposals from counsel on ways to revise the special verdict form. The judge delivered a civil Allen charge to the jury, urging it to continue deliberations and attempt to reach a verdict. The court then received a note from the jury asking whether it could be informed of Vichare's approximate legal costs. While the court was determining how to react to this request, the jury sent another note. This note asked, "May we preface our decision with a statement from the jury?" The court, construing this to mean that it had reached a verdict, told the marshal to ask the jury whether it had in fact done so. The jury responded, by note, "Your answer may help us reach a decision." Counsel for Vichare then renewed his motion to have the special verdict form that was in front of the jury substituted with his proposed form. Counsel for AMBAC stated that her understanding of the jury's most recent note was that it might reach unanimity if allowed to make a statement. The judge told the marshal to tell the jury that it would be permitted to make a statement. Vichare objected to this instruction being given by the marshal; the judge therefore brought the jurors in and told them himself. The court then said, "Please retire to the jury room and reach your verdict, write your statement out, and you can come out here and deliver both to the Court." Approximately two hours later, the jury sent a note to the judge that stated, "The jury requests that our statement be read prior to the verdict. We have reached a verdict." The jury then returned to the courtroom. The judge stated that "We will allow you to read your statement prior to the reading of the verdict. You are the foreperson of the jury, do you wish to read a statement on behalf of the jury?" The foreperson then stated the following:

After arduous deliberation, the jury wishes to state the following:

It is the consensus of this jury that AMBAC allowed overt discrimination within its ranks to be directed towards P.K. Vichare. We would like to emphasize that this type of behavior is unacceptable and should not be tolerated.

Unfortunately, due to the very narrow constraints of the law as presented to the jury, we feel Mr. Vichare was unable to adequately meet his burden of proof.

The clerk then asked the foreperson how they had found on the first question posed on the special verdict form, the one regarding Vichare's claims. The foreperson stated, "We had to say no." The clerk then asked how they had found as to the second special verdict, the one regarding AMBAC's counterclaim. The foreperson responded, "We state no." Vichare moved that the jury be returned to deliberation, as the jury had reached an inconsistent verdict. The court denied this motion and dismissed the jury. The court entered judgment for defendant on the main claim and judgment for plaintiff on the counterclaim.

III. DISCUSSION.

Vichare makes the following arguments on this appeal: (A) the judge, by permitting the jury to make its statement, improperly induced unanimity among the jurors; (B) the jury's statement rendered the resulting verdict an impermissible qualified verdict; (C) the jury's statement rendered the resulting verdict an impermissible compromise verdict; (D) the content of the jury's statement entitles Vichare to a judgment in his favor; (E) several statements made by Judge Stein impermissibly coerced the jury into reaching a verdict; (F) the judge's formulation of the special verdict questions misled the jury; (G) the judge's instructions to the jury regarding the admissibility of AMBAC's after-acquired evidence misstated the law; and (H) the judge's instructions to the jury regarding Vichare's burden of proof misstated the law. We address these assertions in order.

A. Allowing the Jury to Make a Pre-Verdict Statement.

Vichare raises several issues on appeal based on the statement that the jury delivered with its verdict. ¹ The first of these is that the trial court, by permitting the statement in order to break a deadlock, improperly induced unanimity among the jury.

The parties dispute whether Vichare has preserved this issue for appeal. They also dispute what our standard of review should be if we find that Vichare waived this argument: Vichare claims that this Circuit applies the "plain error" standard of review to waived claims, see, e.g., Metromedia Co. v. Fugazy, 983 F.2d 350, 362 (2d Cir.1992); Air Et Chaleur, S.A. v. Janeway, 757 F.2d 489, 493-94 (2d Cir.1985), while AMBAC claims that we apply the "fundamental error" standard, see, e.g., Travelers Indem. Co. v. Scor Reinsurance Co., 62 F.3d 74, 79 (2d Cir.1995); Mondave v. Long Island Jewish Med. Ctr., 501 F.2d 1065, 1072 (2d Cir.1974). We need not, however, address either of these issues, because even assuming arguendo that...