Arizona Case Law
WEST v. SALT RIVER AGR. IMP. & POWER, 179 Ariz. 619 (App. 1994)
880 P.2d 1165
Camest L. WEST, Plaintiff-Appellant, Cross Appellee, v. The SALT RIVER
AGRICULTURAL IMPROVEMENT AND POWER DISTRICT, a municipal corporation,
Defendant-Appellee, Cross Appellant.
No. 1 CA-CV 92-0272.
Court of Appeals of Arizona, Division 1, Department A.
September 8, 1994.
Appeal from the Superior Court, Maricopa County, Cause No. CV
91-11680, Susan R. Bolton, J.
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[EDITORS' NOTE: THIS PAGE CONTAINED HEADNOTES AND HEADNOTES ARE
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Francis> <G>. <Fanning>, Mesa, for plaintiff-appellant.
Jennings, Strouss & Salmon, P.L.C. by J. Matthew Powell, Gerald
W. Alston, Phoenix, for defendant-appellee.
OPINION
GERBER, Acting Presiding Judge.
Appellant Camest West (West) sued his former employer, appellee
Salt River Agricultural Improvement and Power District (SRP),
alleging that SRP discriminated against him on the basis of his
age by causing him to retire before he was required to do so.
West appeals from the trial court's grant of summary judgment in
favor of SRP. We conclude that as a matter of law West failed to
show that he was constructively discharged and thus did not
establish a prima facie case of age discrimination. Therefore,
we affirm the trial court.
SRP cross-appeals from the trial court's denial of its
application for an award of attorneys' fees. Because the trial
court acted within its discretion, we affirm the trial court in
the cross-appeal.
FACTS AND PROCEDURAL HISTORY
West worked for SRP for more than twenty-four years. At the
time of his retirement from SRP, he was the internal audit
manager, an executive position, and reported directly to the SRP
president.
West's sixty-fifth birthday was on December 5, 1989. In June
1988, he talked to his human resources representative, Nacho
Orozco, about his retirement benefits. West believed that he
would have to work for about twenty-four months past his
sixty-fifth birthday to have a retirement income that would meet
his projected budget. However, he asked Orozco whether he could
work for only three months after he turned sixty-five.
Orozco told West that he thought West might not be able to work
beyond his sixty-fifth birthday due to SRP's mandatory executive
retirement policy, HR 515. Policy HR 515 provided that an
employee was required to retire by the end of the month in which
the employee's sixty-fifth birthday occurred if:
A. For the two-year period immediately preceding
retirement, the employee is a bona fide executive
or high policymaker; and,
B. The employee is entitled upon retirement to an
immediate nonforfeitable annual retirement benefit
from a pension, profit sharing, savings, or deferred
compensation plan, or any combination of any such
plans of the Project, which equals, in the aggregate,
at least $44,000.
Orozco gave West a copy of HR 515. West admitted that he did not
notice the "and" between paragraphs A and B and thus thought that
if he was a bona fide executive or high policymaker, HR 515
applied to him regardless of the amount of his retirement
benefits.
A few weeks after their first meeting, Orozco told West that he
did not believe HR 515 applied to West. However, he also told
West that Dick Williams, who administered executive compensation
plans, and Williams's supervisor, Nollie Carlier, had said that
West could not work for three months beyond his
Page 622
sixty-fifth birthday. Jane Alfano, the head of SRP's legal
department, told West that she did not believe HR 515 applied to
him because she did not think he was an executive or high
policymaker. West disagreed with Alfano, but he did not tell her
so.
In June 1989, West received a letter from the SRP Retirement
Committee. The letter outlined estimated monthly pensions payable
to him under various alternatives, assuming that he retired on
December 31, 1989. The highest monthly benefit available to him
was $2,265.87, which is $27,190.44 per year. The letter opened
with the statement, "The Retirement Committee is required to
advise you that you are eligible for normal retirement the month
following your 65th birthday." However, he misread the letter and
thought it meant that he was required to retire on December 31,
1989.
Also in June 1989, West again visited with Orozco, at Orozco's
request, regarding West's retirement. Orozco told West that as
far as he knew, West would be able to extend his employment by
three months if he so desired. West did not recall any other
conversations with Orozco about his retirement after June 1989.
Orozco, however, believed he talked to West in October 1989 and
may have suggested to West that he would have to retire at age
sixty-five.
In October 1989, Alfano concluded that West was a bona fide
executive under HR 515, paragraph A. Dick Williams was asked to
determine whether paragraph B of HR 515 applied to West. He
concluded that West's pension would be less than $44,000 a year.
Thus, HR 515 did not apply to West, and he was not required to
retire at age sixty-five. West did not know that SRP officials
were trying to determine whether HR 515 applied to him, and they
did not advise him of their conclusion that HR 515 did not
require his retirement.
Because West felt he had not received a definitive response as
to whether he could continue to work after he reached age
sixty-five, he talked to John Lassen, SRP's president and his
supervisor. West told Lassen that he had checked with Orozco and
the human resources and law departments and they had said it
would probably be all right if he worked three months beyond
December. West asked if that arrangement was acceptable, and
Lassen said it was fine with him.
In February or March 1990, West asked Lassen if he could extend
his retirement date to June 30, 1990 to take advantage of a
gain-sharing plan that would be available to him if he worked
until that date. Although West felt that Lassen's demeanor
indicated that he was not happy with the request, Lassen said
that West could extend his retirement date to June 30.
In late March, Lassen asked West to put his June 30 retirement
date in writing. At that time, official notification of
retirement was to be submitted six months prior to retirement. On
April 2, 1990, West submitted a memorandum to Lassen that
confirmed June 30, 1990 as his retirement date, expressed his
feeling that SRP had been the best company he had worked for
"because of its concern for employees," and thanked SRP executive
management for its understanding and strong support of his
efforts. West also submitted a completed retirement form that
contained the provision that he could not postpone retirement
beyond June 30, 1990, except with the approval of his management
and the employee relations manager.
West has acknowledged that he never asked Lassen if HR 515
applied to him or if he could work for more than three or six
months past his sixty-fifth birthday. Lassen never told West that
he had to retire on a particular date and never discussed West's
retirement with him until West raised the issue. West did not
tell Lassen that he did not want to retire or that he thought he
had to retire. West never asked Lassen if he could leave his
retirement date open or extend it past June 30. West has also
acknowledged that no one at SRP ever told him either orally or in
writing that he had to retire at age sixty-five. However, he felt
that the general atmosphere at SRP created pressure on him to
retire at age sixty-five, so he tried to avoid bringing attention
to the issue of his retirement.
West retired on June 30, 1990. The day after he retired, his
department was reorganized in accordance with a reorganization
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process initiated before he retired. He believed that if he had
been employed on July 1, he would have been eligible for a
severance package. In November 1990, SRP also offered a severance
package to any employee who was over fifty-five and had
sufficient service to be entitled to benefits.
In May 1991, West filed a complaint against SRP. He alleged
that SRP led him to reasonably believe that he was required to
retire on or about his sixty-fifth birthday pursuant to SRP's
policy. He also alleged that SRP demanded his commitment to
retire by June 30, 1990, in order to deprive him of severance
benefits he would have been entitled to had he been employed on
July 1, 1990. He asserted that he was not covered by SRP's
mandatory retirement policy and that to the extent SRP
interpreted the policy to include him, the policy was in
violation of provisions of the Arizona Civil Rights Act, Ariz.
Rev. Stat. Ann. (A.R.S.) section 41-1463, and the Federal Age
Discrimination in Employment Act (ADEA), 29 U.S.C. § 623
and 631. He sought an award of back pay and benefits including
severance pay and enhancement of retirement benefits. He also
alleged that by denying him severance benefits, SRP breached a
contract with him.
SRP moved for summary judgment, arguing that it was entitled to
judgment because evidence from West's deposition established that
he voluntarily retired after he misread the executive retirement
policy and thought it applied to him. SRP pointed out that he
acknowledged that no SRP official told him he had to retire at
age sixty-five.
In response, West argued that it was not incumbent on him to
prove that anyone advised him that he must retire and that the
confusion, innuendo and subtle pressures created by SRP's agents
were enough to make out a claim of age discrimination. He also
argued that the conditions at SRP were so intolerable that his
retirement constituted a constructive discharge.
The trial court found that West had failed to come forward with
any facts supporting his claim for age discrimination or breach
of a severance agreement. It thus granted SRP's motion for
summary judgment but declined to award attorneys' fees to SRP.
West timely appealed from the judgment in favor of SRP, and SRP
cross-appealed from the denial of its application for attorneys'
fees.
DISCUSSION
A. Summary Judgment
Because this is an appeal from summary judgment, this court
views the evidence in the light most favorable to the party who
opposed the motion. World Investments, Inc. v. Harber's Estate,
17 Ariz. App. 107, 109, 495 P.2d 877, 879 (1972). Summary
judgment is properly granted "if the facts produced in support of
the claim or defense have so little probative value, given the
quantum of evidence required, that reasonable people could not
agree with the conclusion advanced by the proponent of the claim
or defense." Orme School v. Reeves, 166 Ariz. 301, 309,
802 P.2d 1000, 1008 (1990).
B. Appeal Issues
West argues on appeal that he need not prove that anyone at SRP
directly advised him that he had to retire at age sixty-five. He
maintains that the confusion, innuendo and subtle pressures that
were created by SRP's agents through the use of HR 515 and their
failure to advise him that HR 515 did not apply to him are enough
to make out a claim of age discrimination.
He further argues that SRP's violation of the ADEA did not have
to be willful and that he may prevail if he shows that SRP
violated the ADEA through misrepresentation and manipulation.
According to West, he established direct evidence that created an
inference that an illegal motivation and a general prejudice
against a particular age class influenced SRP's actions
concerning him such that the burden was shifted to SRP to prove a
legitimate basis for its actions. He also argues that the facts
create a triable issue as to whether he was constructively
discharged.
In response, SRP argues that the evidence shows that West
voluntarily retired more than six months after his sixty-fifth
birthday on a date that he chose. It asserts that because no one
at SRP told him he had to retire, as a matter of law SRP did not
violate
Page 624
the ADEA. According to SRP, the record shows that it did not
cause him to believe he was subject to HR 515 because it made no
attempt to apply or enforce the policy as to him. It points out
that the only two SRP employees (Orozco and Alfano) who made any
representation to him regarding HR 515 told him that the policy
did not apply to him. It further notes that his mistaken belief
that HR 515 required him to retire resulted from his misreading
of the policy and a letter he received from the retirement
committee, not from any representation by an SRP employee.
The ADEA "broadly prohibits arbitrary discrimination in the
workplace based on age." Trans World Airlines, Inc. v.
Thurston, 469 U.S. 111, 120, 105 S.Ct. 613, 621, 83 L.Ed.2d 523
(1985), quoting Lorillard v. Pons, 434 U.S. 575, 577, 98 S.Ct.
866, 868, 55 L.Ed.2d 40 (1978). To establish a violation of the
ADEA where an employee is discharged from employment, the
plaintiff must ultimately prove by the preponderance of the
evidence that age was a determining factor in the employer's
discharge decision. Clark v. Coats & Clark, Inc.,
990 F.2d 1217, 1226 (11th Cir. 1993).
Initially, the plaintiff has the burden of establishing a
prima facie case of age discrimination. Hebert v. Mohawk
Rubber Co., 872 F.2d 1104, 1110 (1st Cir. 1989). A prima facie
case may be made by presenting direct evidence of discriminatory
intent, or by satisfying all elements of the test established in
McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817,
36 L.Ed.2d 668 (1973), or by statistical proof of a pattern of
discrimination. Buckley v. Hospital Corp. of America,
758 F.2d 1525, 1529 (11th Cir. 1985).
West alleges that the facts of his situation provide direct
evidence of discriminatory intent. According to the Clark
court, "evidence of age discrimination is direct when, if
believed, it establishes discriminatory intent without inference
or presumption. Only the most blatant remarks whose intent could
only be to discriminate on the basis of age constitute direct
evidence." Clark, 990 F.2d at 1226 (citation omitted). Taking
West's factual allegations as true, the evidence cannot establish
discriminatory intent on the part of SRP without inference or
presumption. West acknowledges that no one at SRP told him he had
to retire at age sixty-five nor did anyone take any action to
force him to retire by a certain date. He chose the date on which
he would retire. Moreover, West presented no evidence that
Lassen's request that he put his retirement date in writing was
motivated by anything other than SRP's policy that notice of
retirement be given months in advance of the retirement date.
Because West did not produce direct evidence of discriminatory
intent, an alternative method of establishing a prima facie
case must be used if he is to prevail. The method of showing a
pattern of discrimination does not apply because no statistical
evidence of age discrimination at SRP was produced. Under the
McDonnell Douglas test method, West must show that he (1) was
in the protected age group, (2) was qualified for the position
held and was performing the position satisfactorily, (3) was
discharged either actually or constructively, and (4) was
replaced by someone[fn1] with equal or lesser qualifications.
See Hebert, 872 F.2d at 1110, and Cassino v. Reichhold
Chemicals, Inc., 817 F.2d 1338, 1343 (9th Cir. 1987).
At age sixty-five, West clearly was in the protected group. He
was qualified for the position he held, and the implication from
the record is that SRP thought he was doing a satisfactory job.
SRP did not fire West. Therefore, the question becomes whether
SRP forced him to retire and thus constructively discharged him.
Page 625
"To establish a prima facie case of age discrimination by
constructive discharge, an employee must prove that his `employer
by its illegal discriminatory acts has made working conditions so
difficult that a reasonable person in the employee's position
would feel compelled to resign.'" Mitchell v. Mobil Oil Corp.,
896 F.2d 463, 467 (10th Cir. 1990). "The inquiry focuses on the
employee's state of mind, and the employer's intent in creating
the allegedly intolerable conditions is irrelevant at this
stage." Guthrie v. J.C. Penney Co., 803 F.2d 202, 207 (5th Cir.
1986). Nevertheless, the test is objective because it turns on
the reaction of a "reasonable employee" in the plaintiff's
position rather than on the plaintiff's actual reaction. Id.
Determining whether conditions were so intolerable and
discriminatory that a reasonable employee would have been
justified in resigning or retiring is normally a question for the
trier of fact. Thomas v. Douglas, 877 F.2d 1428, 1434 (9th Cir.
1989). To establish constructive discharge, the plaintiff must
show some aggravating factor such as a continuous pattern of
discriminatory intent. Id. Absent such a showing, the court may
find that as a matter of law the plaintiff was not constructively
discharged. See Id. (insufficient evidence of any aggravating
factors of differential, discriminatory or retaliatory treatment
by employer from which trier of fact could conclude that a
reasonable person would have been compelled to quit; appellees
entitled to judgment on wrongful constructive discharge claim as
matter of law).
In Calhoun v. Acme Cleveland Corp., 798 F.2d 559 (1st Cir.
1986), Calhoun contended that his employer entered into a course
of action designed to force him into early retirement at age
sixty-two. Calhoun's supervisor repeatedly asked him whether he
intended to take early retirement, replaced Calhoun with a
younger man and demoted Calhoun with no cut in pay, excluded
Calhoun from training, and told Calhoun that if he continued on
the job he would have to work twelve to fourteen hour days and
Saturdays. Id. at 561-62. The court concluded that the events
taken together compared favorably enough with fact patterns in
successful age discrimination cases that summary judgment would
be improper. Id. at 563. The Calhoun court cited the
following cases as examples of conduct sufficient to establish
constructive discharge: Cockrell v. Boise Cascade Corp.,
781 F.2d 173 (10th Cir. 1986) (choice of transfer to lower paying job
or resignation); Williams v. Caterpillar Tractor Co.,
770 F.2d 47 (6th Cir. 1985) (demotion without warning or reprimand);
Buckley v. Hospital Corp. of America, 758 F.2d 1525 (11th Cir.
1985) (several inquiries about retirement plans along with
humiliating demotion, even with same pay and benefits).
The only occurrences that West cites on appeal as constituting
facts supporting constructive discharge are that he was told that
he might be required by HR 515 to retire at age sixty-five, he
was not informed of this error when discovered by management, and
his supervisor asked him to commit in writing to the retirement
date he requested. These actions by SRP do not constitute
intolerable and discriminatory working conditions necessary to
establish constructive discharge. West may have been
exceptionally sensitive to any suggestion that he might have to
retire at age sixty-five. However, SRP did not alter his working
conditions nor say or do anything to him that would have caused a
reasonable person to feel that he was being forced to retire.
In addition, the facts in the record show that West did not
give SRP any indication that he wished to work indefinitely past
age sixty-five. He asked Orozco for only a three-month extension
past age sixty-five when it appeared that the policy might apply
to him. SRP did not send West any forms to fill out or in any
other way indicate that it expected him to retire in December
1989. The record shows that the impression he gave SRP officials
about his retirement was that he was excited about retiring; for
instance, he had someone take a picture of him as he signed the
notice of retirement. He did not do anything to put SRP on notice
that he thought HR 515 applied to him such that SRP could be said
to have constructively discharged him by failing to tell him that
HR 515 definitely did not apply to him.
Page 626
West argues that he should prevail because he demonstrated that
although SRP may not have committed a willful, direct violation
of the ADEA, it violated the act through misrepresentation and
manipulation. Clearly, a violation of the ADEA need not be
willful for an employee to prevail in an age discrimination
case.[fn2] However, the employee still must be able to establish
a prima facie case of discrimination. As West did not establish
a prima facie case, the question of SRP's willfulness is
irrelevant.
Given the factual allegations and evidence presented by West,
there was no constructive discharge as a matter of law.
Therefore, West cannot satisfy the McDonnell Douglas test nor
any of the other possible methods of establishing a prima facie
case. Accordingly, we affirm the trial court's grant of summary
judgment in favor of SRP.
C. Cross-Appeal
On cross-appeal, SRP argues that the trial court abused its
discretion in denying its request for an award of attorneys' fees
pursuant to A.R.S. sections 41-1481(J) and 12-341.01. The denial
of attorneys' fees is within the discretion of the trial court,
and this court will not overrule such a decision if it is
reasonably supported by the record. Johns v. Dept. of Economic
Sec., 169 Ariz. 75, 81, 817 P.2d 20, 26 (App. 1991).
A prevailing defendant in a civil rights action may be awarded
fees pursuant to A.R.S. section 41-1481(J) only upon a finding
that the plaintiff's action was frivolous, unreasonable, or
without foundation, even if it was not brought in subjective bad
faith. Sees v. KTUC, Inc., 148 Ariz. 366, 369, 714 P.2d 859,
862 (App. 1985). Thus, the fact that a defendant prevails on the
merits does not in itself entitle the defendant to an award of
fees. Id.
The trial court ruled that West's case was not frivolous,
unreasonable or without foundation. The trial court did not abuse
its discretion in denying an award of fees on that basis. After
the initial confusion about whether HR 515 applied to West, the
fact that SRP officials determined that he was not subject to
this policy but did not tell him provides at least an arguable
basis for his allegation of age discrimination. Therefore, we
affirm the denial of the fee request under section 41-1481(J).
SRP also argues that it was entitled to an award of fees under
A.R.S. section 12-341.01 because one of West's claims was for
breach of contract. The trial court has discretion to grant such
an award. Wheel Estate Corp. v. Webb, 139 Ariz. 506, 508,
679 P.2d 529, 531 (App. 1983). The contractual claim involved
Lassen's alleged promise that he would recommend West for a
severance package if he qualified for one, and it played a very
minor part in the litigation below. We find that the trial court
did not abuse its discretion in denying the request for a fee
award.
D. Attorneys' Fees on Appeal
SRP requests an award of its attorneys' fees incurred in this
appeal pursuant to A.R.S. section 41-1481(J) and Rule 21(c),
Arizona Rules of Civil Appellate Procedure. Because West did not
pursue his breach of contract claim on appeal, SRP does not ask
for fees under section 12-341.01. For the reasons that we affirm
the trial court's denial of attorneys' fees, we deny SRP's
request for an award of fees on appeal.
McGREGOR and CONTRERAS, JJ., concur.
[fn1] The Circuit Courts also require the replacement to be
"younger," Guthrie v. J.C. Penney Co., 803 F.2d 202, 206-07
(5th Cir. 1986), Spulak v. K Mart Corp., 894 F.2d 1150, 1153
(10th Cir. 1990); "substantially younger," Cassino v. Reichhold
Chemicals, Inc., 817 F.2d 1338, 1343 (9th Cir. 1987); or
"outside the protected group," Clark v. Coats & Clark, Inc.,
990 F.2d 1217, 1226 (11th Cir. 1993), Burlew v. Eaton Corp.,
869 F.2d 1063, 1066 (7th Cir. 1989); but compare "need not be
younger or outside protected group," Hebert v. Mohawk Rubber
Co., 872 F.2d 1104, 1110 (1st Cir. 1989).
[fn2] The question of willfulness in age discrimination generally
comes into play in two situations. One is on the issue of whether
the two-year statute of limitations for nonwillful violations of
the ADEA or the three-year statute of limitations for willful
violations applies. See McLaughlin v. Richland Shoe Co.,
486 U.S. 128, 108 S.Ct. 1677, 100 L.Ed.2d 115 (1988). The other is to
determine whether liquidated damages may be awarded; double back
pay may be awarded as liquidated damages only if an employer
acted willfully in violating the ADEA. See, e.g., Thurston, 469
U.S. at 126, 105 S.Ct. at 624; Burlew, 869 F.2d at 1064 & n. 2.
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