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July 8, 1986


The opinion of the court was delivered by: SHAPIRO


 This is an action for wrongful discharge in which the court has jurisdiction by reason of the diversity of citizenship of the parties. The court entered judgment in favor of plaintiff Stephen Alexander *fn1" against defendant Red Star Express Lines of Auburn, Inc. for $40,252.00 in accordance with the jury's answers to interrogatories submitted pursuant to Fed.R.Civ.P. 49(b). Defendant timely filed a motion for judgment notwithstanding the verdict, pursuant to Fed.R. Civ.P. 50, or, in the alternative, for a new trial, pursuant to Fed.R.Civ.P. 59. For the reasons which follow the court grants defendant's motion for judgment notwithstanding the verdict and, in the alternative, grants defendant's motion for a new trial. Fed.R.Civ.P. 50 (c)(1).


 Plaintiff Steven Alexander *fn2" was hired by the defendant in 1980 and became a dock foreman. (Stip. 1). He was a management employee receiving wages in the amount of $452 per week in March, 1983. (Stip. 3 and 5). On March 29, 1983, Mr. Alexander injured his right knee at work. (Stip 2; Tr. at 23). He applied for and was awarded workmen's compensation benefits in the amount of $302 per week. (Stip. 2).

 It was defendant's policy, though not its legal obligation, to pay disabled management employees the difference between their workmen's compensation benefits and regular salary for a "reasonable period." (Tr. at 25, 30-32, 47-48, 73-74 and 79-80). However, because of a clerical error, defendant continued to pay plaintiff his full wages after his injury. (Tr. at 23-25). Plaintiff attempted to have defendant correct its mistake (Tr. at 24) but deposited the money to his own account. In June, 1983, plaintiff was contacted by Dick Thomas, a headquarters employee of defendant, regarding the erroneous overpayments. (Tr. at 24-25). Mr. Thomas told plaintiff that defendant only intended to pay plaintiff the difference between his workmen's compensation benefits and his regular salary, that is, $150 per week. (Tr. at 24-25). Mr. Thomas said that the overpayment approximating $2,300 would be repaid by withholding the $150 per week supplement until the amount withheld equalled the overpayment; then the supplement would be paid by defendant again. (Tr. at 25). Plaintiff concedes that defendant was not required to pay the $150 per week supplement. (Tr. at 30-31).

 In early August, 1983, Doug Cox, Hub Manager of defendant, told plaintiff that if he did not return to work he would be replaced. (Tr. at 27-28). Plaintiff returned to work as a dispatcher, supposedly a light duty job, on August 15, 1983 (Tr. at 28), but on August 31, 1983, plaintiff's knee became so swollen he could no longer work. (Tr. at 29-30). He again filed for and received workmen's compensation benefits. (Tr. at 30). Plaintiff received only a partial check from defendant for his August work because the salary overpayment that had not yet been repaid was deducted from his earnings. (Tr. at 30).

 In early September, 1983, Doug Cox called plaintiff and told him that if he did not return to work he would be removed from the payroll and all his benefits would then be terminated in 90 days. (Tr. at 32-33). Shortly after this conversation, plaintiff received from Mr. Cox a letter stating that he could return to work when he was physically qualified. (Tr. at 46-47). In January, 1984, plaintiff received from defendant a letter dated December 22, 1983, which began "Dear Former Employee," and discussed termination of plaintiff's group insurance benefits. (Tr. at 34-35; P. Ex. 1). After receiving this letter, plaintiff and his counsel called defendant's New York headquarters and were told by a representative of defendant that plaintiff had been terminated on December 8, 1983. (Tr. at 34).

 In February, 1984, plaintiff initiated state court proceedings. Shortly thereafter he received a letter from Doug Cox offering him two light duty positions with defendant. (Tr. at 35, 49-51, and 75). Plaintiff did not reply. (Tr. at 50-51).

 On August 6, 1984, plaintiff and his wife filed the original complaint in this action. On October 3, 1984, defendant sent plaintiff a letter offering him a light duty job; plaintiff turned the letter over to his counsel but did not respond. (Tr. at 35-36 and 75; P. Ex. 2). On October 15, 1984, the workmen's compensation carrier sent plaintiff a letter that it would seek termination of his benefits if plaintiff refused work that was consistent with plaintiff's treating physician's assessment of his abilities and physical restrictions when offered by defendant. (Tr. at 55-56 and 57-58). When plaintiff failed to take the work that defendant had offered, the workmen's compensation carrier instituted termination proceedings. (Tr. at 37). Plaintiff's benefits were subsequently reduced to $109 per week (although they were later increased to $134 per week), but his benefits had not been terminated at the time of trial. (Tr. at 37 and 42-43).

 Some weeks prior to trial, plaintiff became physically able to work again as a dock foreman (Tr. at 42-44) but he did not so inform the workmen's compensation carrier or the defendant. (Tr. at 44). Plaintiff refuses to return to work for defendant because he believes he has been fired (Tr. at 44-45); he formed his intention never again to work for defendant after he received the "Dear Former Employee" letter (P. Ex. 1) in January, 1984. (Tr. at 51). Plaintiff is still carried on defendant's corporate records as an inactive employee (Tr. at 72) and he can return to work in his former position at any time. (Tr. at 75). The "Dear Former Employee" letter is a form letter sent by defendant to all employees who are losing group insurance benefits for any reason to inform them that the group policies can be converted to individual policies on which the employees pay the premium. (Tr. at 85-86). Plaintiff understood that he could do this. (Tr. at 51).


 Plaintiff filed the original complaint in this action in the Court of Common Pleas of Philadelphia County, Pennsylvania on August 6, 1984. On September 6, 1984, defendant filed a petition to remove the action to federal court. Plaintiff's original complaint contained four counts presenting the following claims: On behalf of Stephen Alexander: Count I - Wrongful Discharge Counts II and III - Intentional Infliction of Emotional Distress n3 On behalf ...

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