Waterman v. Nationwide Mut. Ins. Co., 33883.

• Decision Date: 22 January 2009
• Docket Number: No. 33883.,33883.
• Citation: 201 P.3d 640,146 Idaho 667
• Parties: Joe C. WATERMAN, Plaintiff-Appellant, v. NATIONWIDE MUTUAL INSURANCE COMPANY and Allied Insurance Company, Defendants-Respondents.
• Court: Idaho Supreme Court

201 P.3d 640

146 Idaho 667

Joe C. WATERMAN, Plaintiff-Appellant, v. NATIONWIDE MUTUAL INSURANCE COMPANY and Allied Insurance Company, Defendants-Respondents.

No. 33883.

Supreme Court of Idaho, Boise, December 2008 Term.

January 22, 2009.

Kirkendall Law Office and Law Offices of Peter Desler, PC, Boise, for appellant. Peter Desler argued.

Moffatt, Thomas, Barrett, Rock & Fields, Chartered, Boise, for respondent. Patricia M. Olsson argued.

W. JONES, Justice.

NATURE OF CASE

Joe Waterman (Appellant) brought an action against his former employer, Nationwide Mutual Insurance Company and Allied Insurance Company (collectively Respondent). Although Appellant initially filed several causes of action, the case proceeded to trial only on Respondent's alleged violation of the Age Discrimination in Employment Act of 1967 (ADEA). After the jury returned a verdict in favor of Appellant, awarding him $700,000.00 in damages, the district court granted Respondent's motion for directed verdict. Appellant brings this appeal requesting this Court to reverse the district court's directed verdict ruling and to reinstate the jury verdict in his favor.

FACTUAL AND PROCEDURAL BACKGROUND

Nationwide hired Appellant in 1979 as an insurance claims adjustor and gave him "pretty intense" training during his first six months on the job. Appellant was the sole Nationwide adjustor in the Boise area until approximately 1993, at which time the number of claims in the Boise area increased and Nationwide hired a second adjustor. Until that time, Appellant handled multiline claims, including homeowner, auto, property damage, and bodily injury and liability investigations. After the second adjustor was hired, Appellant's responsibility was limited to property damage claims. In 2000, the second adjustor left the Boise office, but Appellant continued to handle property damage claims exclusively until 2001, which is when the alleged adverse employment actions commenced.

Nationwide purchased Allied Group Inc. in October 1998. The two companies began integrating in 2000. Prior to the merger, Nationwide used the Class software system to handle claims and Allied used the Passport software system. Mike Lex (Mr. Lex), Allied's Regional Vice-President, testified that he was in charge of transitioning the companies to one common claims handling software system. He testified that the company chose to convert all claims handling processes to the Allied Passport model to achieve the goal of a lower loss expense ratio.

Mr. Lex also testified he was part of the team that determined which adjustors would be retained after the merger. To accomplish this task, all employees were required to fill out a Technical Background Update explaining their technical competency and prior performance. In July of 2000, Appellant filled out a Technical Background Update wherein he listed 21.5 years experience in auto and property damage claims and 15 years experience in med pay, bodily injury, litigation, general liability and personal injury protection.

From June through October 2000, Appellant received a weekly company publication entitled "Up to Date: An Integration Update for Nationwide's Western States Claims Associates," which answered in-depth questions about the merger. Appellant first learned in early October of 2000 that he would have a position with the company after the merger as a multiline adjustor. Appellant testified that his supervisor never physically handed him a job description, but he also admitted that such materials were available online for review.

Prior to the merger, Appellant worked out of an office, but in December 2000, he was required to move his office into his house. Appellant was expected to settle the Nationwide claims that existed prior to the merger on the Nationwide software system while simultaneously transitioning to the new Allied software system. This required Appellant to set up two separate computers in his home office because the Allied and Nationwide software systems could not run on the same computer. DSL¹ was not available at Appellant's home office at that time, so he had to use a dial-up line and completely shut down one computer and boot up the other computer any time that he needed to change between the two software systems. Appellant mentioned that the company gave another adjustor a switch that allowed her to go quickly and easily from one program to another. Appellant requested such a switch but was denied. Appellant testified that the company indicated "it's only a matter of time before you are done with the pending claims on Class and it's not within our affordability to do that."

The parties dispute when Appellant began processing Allied claims. Appellant argues it was on January 1, 2001; Respondent claims it was not until February 2001. Either way, Appellant testified that the increased number of claims overwhelmed him and his requests for help went unanswered. However, Respondent put on evidence that Appellant was not meeting the company's expectations for workload or timeliness. On February 4, 2001, Appellant was given a verbal warning for failure to comply with claims handling criteria. In March 2001, Respondent attempted to help Appellant by creating an action plan to improve his performance.

Appellant argues that he did not receive proper training on the Allied Passport system. He testified that he attended two meetings in Denver, his boss visited him once in Boise, and he spent a few days job shadowing an adjustor in Colorado. Appellant stated that Respondent failed in each situation to provide him even the most basic training that would be required for him to perform the job adequately. However, on May 2, 2001, during a conference call between Appellant and his supervisors that was set up to discuss Appellant's performance issues, Appellant indicated to Nita Dunn, Respondent's human resources consultant, that a lack of training was not the reason for his poor performance:

Dunn: And it is not because, if I understand you correctly it is not because you feel that uh you haven't received enough training or that you don't have the proper tools to do your job. But simply that the workload is too heavy.

Waterman: Correct.

On May 22, 2001, Appellant agreed to a work improvement plan that called for Appellant to become compliant with Respondent's claims handling standards by 50% within one month and 75% within three months. Around this time Appellant requested a severance package from Respondent, which Respondent denied, stating "your request for consideration of a severance option was unusual, as your position with Allied has not been eliminated."

From June 4, 2001 through June 14, 2001, Appellant went on a preplanned vacation. Immediately following his vacation, Appellant took leave under the Family and Medical Leave Act (FMLA) due to depression and his doctor's advice not to work for four to six months. Appellant received a letter dated September 5, 2001 stating that his FMLA leave was exhausted and "based on business needs, a decision has been made to restaff your position. This decision does not reflect on your ability to do your job, but rather the company's need to ensure the job gets done despite your absence." On September 6, 2001, Respondent posted a position for a Boise area claims adjustor. On September 17, 2001, Appellant was specifically told that his position had not yet been restaffed and that he should try a gradual return to work, but he refused, stating he did not believe he could ever return to a normal workload. On September 24, 2001, Respondent filled the position with Tamyra Gent, age 41.

As of the date Appellant's FMLA leave expired, Respondent placed him on long-term disability and he received approximately 60% of his salary. Appellant was subsequently found not to be disabled after an independent medical examination was conducted. On April 27, 2002, Respondent reinstated Appellant's full salary for two months and advised Appellant to search for a new job within the company, but there were no positions available in Boise and Appellant was not willing to relocate. Appellant was 51 years old as of his last day of employment with Respondent.

On July 24, 2004, Appellant filed a Complaint and Demand for Jury Trial against Respondent asserting various causes of action that primarily focused on age discrimination. Respondent filed an Answer, essentially denying the allegations made by Appellant and raising the following affirmative defenses, among others: defendant's actions were taken for legitimate, non-discriminatory reasons and without regard to plaintiff's age, plaintiff failed to take advantage of preventative or corrective opportunities provided by defendant or to otherwise avoid harm, and defendant acted in good faith in applying policies of which plaintiff was aware when he was hired and during his employment. The jury trial commenced on December 13, 2006, and lasted four days.

During trial, Appellant presented testimony by a claims director that he was aware of "some statements made in group meetings where Allied was referred to as a young company." However, the claims director did not know what the statements meant. Appellant also presented testimony of a district claims manager that, in reference to a conversation with his supervisor about a job applicant who was in his sixties, his supervisor stated to him, "Well, you know, Allied is a young company." The inference was that the job applicant was too old for the position, but he was ultimately hired.

After Appellant rested his case, Respondent moved for directed verdict, alleging Appellant failed to establish a prima facie case of age discrimination because a reasonable person could not find the second, third, or fourth elements of an ADEA claim. The district court denied Respondent's motion for directed verdict, but noted that Respondent could renew its motion at the end of trial. Respondent then presented its defense...