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JACKSON & COKER, INC. v. LYNAM

December 30, 1993

JACKSON AND COKER, INC., Plaintiff,
v.
A.J. LYNAM and CONNIE M. LYNAM, Defendants. A.J. LYNAM and CONNIE M. LYNAM, Plaintiffs, v. JACKSON AND COKER, INC., Defendant.



The opinion of the court was delivered by: EDUARDO C. ROBRENO

 EDUARDO C. ROBRENO, J.

 This case involves claims of religious discrimination and retaliation by A.J. Lynam ("Lynam") against his former employer, Jackson & Coker, Inc. ("Jackson & Coker" or "the Company"). In turn, Jackson & Coker seeks immediate repayment of a $ 65,000 loan it made to Lynam to assist him with employment relocation expenses. The jury found no discrimination in employment, but determined that Jackson & Coker had retaliated against Lynam as a result of Lynam filing a claim of discrimination with the Pennsylvania Human Relations Commission (the "PHRC"). The jury also found that the loan was not due for repayment until Lynam sold the house he vacated after he was transferred by the Company.

 Before the Court are motions by the parties for judgment as a matter of law and for relief from the judgment. For the reasons set forth herein, the motion for judgment as a matter of law by Jackson & Coker will be granted, and the remaining motions by Jackson & Coker, A.J. Lynam, as well as those of Lynam and his wife, Connie (together with A.J. Lynam, hereinafter referred to as "the Lynams"), will be denied.

 Defendant *fn1" Jackson & Coker is a physician recruiting firm headquartered in Atlanta, Georgia, with operations throughout the country. Its clients consist generally of hospitals, clinics, or communities that are seeking to employ physicians. Plaintiff A.J. Lynam was hired by Jackson & Coker in February of 1988 as a marketing consultant in its Atlanta office, to solicit business from prospective employers. Lynam proved to be adept at his work, swiftly rising through the ranks of the Company's marketing department. In February of 1989, he was appointed director of marketing for the Northeast Region, effective March of that year. This was quickly followed by his appointment to the position of Vice-President of Marketing for the Northeast Region in August of 1989.

 This promotion to the vice-president level required Lynam's relocation from Atlanta to Philadelphia. To assist him financially in the move, Jackson & Coker loaned the Lynams $ 65,000 towards the purchase of a new home in the Philadelphia area. *fn2" See Pl.'s ex. 12, 14. At trial, the evidence as to the terms of the loan conflicted. Lynam testified that the loan was intended to be interest free, with an indefinite date of repayment tied to the sale of his Georgia home. This testimony, however, directly contradicted the language of a promissory note that the Lynams had signed, which stated that interest would accrue at an annual rate of 12% and that the loan was due in six months or when the plaintiff's Georgia residence was sold. See Pl.'s ex. 16. Lynam testified that the additional terms were explained by Jackson & Coker executives to him as being technicalities, necessary to "get this thing registered," Tr. of 2/1/93 at 141, but not an alteration of the previously negotiated deal. The note in evidence was dated January 12, 1990, a date that Lynam claimed was added after he signed the note. The Lynams also signed a deed to secure debt, *fn3" conveying their Georgia home to Jackson & Coker as collateral for the loan. Lynam testified that this deed was also altered without his consent after he signed it to include a representation that the underlying note had a due-date of June 12, 1990.

 Lynam testified that throughout the course of his employment with Jackson & Coker, the subject of religion was repeatedly raised by Company executives. Indeed, the evidence at trial showed that a substantial number of the employees of Jackson & Coker belonged to the Church of Christ, a Christian denomination (the "Church"), and that many senior executives where members of the Church. Lynam also testified that at his second job interview, he was told by Charles Harris, vice-president for recruiting in Jackson & Coker's Southeast office, that, at one time, almost all of the Company's employees had been members of the Church, and that even now 80% of the employees were members. Harris also questioned Lynam about his religious beliefs, and his opinion about the Church. Lynam was advised that he was competing with two candidates who were members of the Church, and that he had "to be a better salesman than they are by more than just a little to get [the] job." Tr. of 2/1/1993 at 77. Lynam also testified that after his move to the Philadelphia office in early 1990, Kerry Lowrey, the vice-president of recruiting for the northeast, suggested that Lynam and his wife join the local congregation of the Church, and that Bill Dismuke, the president of Jackson & Coker, suggested the same. The Lynams resisted these entreaties, and during A.J.'s tenure with the Company they did not join the Church.

 In August of 1990, Lynam was asked by Company senior management to step down from his position as vice-president of marketing for the Northeast region. According to Lynam, the reason advanced by the Company for the demotion was that he did not have "the proper image of a Jackson & Coker vice-president." Tr. of 12/1/1993 at 183. However, he was offered his former position as Marketing Manager in the Northeast region, a position that paid substantially less. Faced with a major reduction in salary, Lynam resigned on October 31, 1990. At that point, Jackson & Coker ceased to reimburse Lynam for the mortgage payments on Lynam's Pennsylvania home.

 Prior to resigning from Jackson & Coker, Lynam retained the services of Leslie Hayes, Esq., a Philadelphia attorney. Lynam believed that his demotion was motivated by religious discrimination. After Lynam's resignation, Ms. Hayes attempted to amicably resolve Lynam's discrimination claim with the Company. On January 16, 1991, after negotiations with the Company failed to resolve Lynam's grievance to his satisfaction, Lynam filed a complaint with the PHRC, dual-filed with the Equal Employment Opportunity Commission (the "EEOC"), *fn4" claiming a constructive discharge on the grounds of religious discrimination. Lynam also applied for unemployment benefits on January 5, 1991, which were awarded on March 4, 1991.

 Jackson & Coker did not initially contest the application for unemployment benefits. However, after the benefits were awarded, and after Lynam had filed his claim with the PHRC, Jackson & Coker appealed Lynam's award of unemployment benefits. The Company also made a demand on the Lynams that they repay the promissory note pursuant to its terms, i.e., with 12% interest, shortly after a PHRC fact-finding conference. See Tr. of 2/2/1993 at 6-8. This demand was followed in August 1991 by the institution of the first of the instant actions, Jackson and Coker, Inc. v. A.J. Lynam and Connie M. Lynam, Civ. A. No. 91-5127, 840 F. Supp. 1040 seeking repayment of the note. Lynam, in turn, counterclaimed, alleging malicious prosecution, fraud, defamation, and breach of contract.

 Jackson & Coker's actions led Ms. Hayes to believe she could become a potential witness as to any retaliation claim by Lynam against Jackson & Coker, and, therefore, she withdrew from the representation of Lynam. Lynam then retained a new lawyer, and through his new counsel, he amended the complaint with the PHRC to include a retaliation claim. After receiving a Notice of Right to Sue, see Pl.'s ex. 47, Lynam instituted the second instant action, A.J. Lynam and Connie M. Lynam v. Jackson and Coker, Inc., Civ. A. No. 92-2311, 812 F. Supp. 54 in April of 1992, claiming religious discrimination and retaliation for the filing of a complaint with the PHRC and the EEOC. The cases were consolidated and tried jointly to the same jury.

 After five days of conflicting testimony, the jury was asked to determine, upon written interrogatories, see Fed. R. Civ. P. 49(b), Lynam's claims for discrimination and retaliation, *fn5" Jackson & Coker's claim on the promissory note, and Lynam's counterclaim for breach of contract, i.e., Jackson & Coker's failure to continue paying the mortgage on the Pennsylvania home. *fn6" The jury returned a verdict in Jackson & Coker's favor on the discrimination claim, but found that the Company had retaliated against Lynam for his filing of a claim with the PHRC, awarding Lynam $ 62,440 in damages for monetary losses and nothing for emotional distress. In regards to the contract claims, the jury found that Jackson & Coker's obligation to pay the Lynams' mortgage ended when Lynam left the employment of the Company, that the Lynams had not failed to act reasonably in attempting to sell their Georgia home, that Lynam's obligation to repay the promissory note was not due upon ending his employment with Jackson & Coker, and that the terms of the note did not include interest.

 As a result of the verdict, Jackson & Coker was directed to pay Lynam $ 62,440 in damages, but the Lynams were not obligated to repay Jackson & Coker the $ 65,000 they had borrowed until they sold their Georgia home.

 II. DISCUSSION

 A. Lynam's arguments

 Lynam raises various points in his motion for judgment as a matter of law and for a new trial. For the following reasons, all of them are without merit, and his motion will be denied.

 1. Jackson & Coker's obligation to continue to pay the Lynams' mortgage after Lynam's termination of his employment relationship with Jackson & Coker

 As part of the compensation package offered to Lynam by Jackson & Coker when he was transferred to the Philadelphia office, Jackson & Coker promised to make the payments on the Lynams' Philadelphia mortgage until the Lynams were able to sell their home in Georgia. Lynam maintains that this duty survived his resignation from the Company in October of 1990, and that the only condition on the payments was that the Lynams engage in reasonable efforts to sell their Georgia property. This claim was contested by Jackson & Coker at trial. The Company pointed to a letter dated August 3, 1990, from Jackson & Coker to Lynam, stating that the payments would be made "as long as serious effort is made to dispose of [the Georgia] house and you remain with Jackson and Coker." Pl.'s ex. 31 at 2 (emphasis added). At the close of evidence, Lynam moved for judgment as a matter of law on this issue. The motion was denied, and the issue was submitted to the jury. The jury found that Jackson & Coker was not obligated to make the mortgage payments, and that the obligation to make mortgage payments had ended when Lynam resigned. Lynam now renews the motion. See Fed. R. Civ. P. 50(b).

 In examining a motion for judgment as a matter of law, the court "must view the evidence in the light most favorable to the non-moving party and determine whether 'the record contains the minimum quantum of evidence from which a jury might reasonably afford relief.'" Keith v. Truck Stops Corp. of Am., 909 F.2d 743, 745 (3d Cir. 1990) (citations omitted) (quoting Smollett v. Skayting Dev. Corp., 793 F.2d 547, 548 (3d Cir. 1986)). The evidence must be reviewed in the light most favorable to the prevailing party, and all inferences must be drawn in its favor. See In re Air Crash Disaster at Mannheim, Germany, 769 F.2d 115, 123 (3d Cir. 1985), cert. denied sub nom. Schoenborn v. Boeing Co., 474 U.S. 1082, 106 S. Ct. 851, 88 L. Ed. 2d 891(1986).

 Applying these standards to the conflicting evidence, the Court finds that a reasonable jury could have found that the letter correctly stated the terms of the agreement, i.e., that the payments were conditioned on Lynam's continued employment, and that the Company's obligations ceased when Lynam resigned his position. Given the employment relationship between the two parties and the circumstances surrounding the formation of the agreement (Lynam was being transferred to another city), a reasonable jury could have inferred that the contract was made to encourage Lynam to accept the transfer and remain with the Company. The jury was entitled to reject Lynam's interpretation of the contract, i.e., one guaranteeing indefinite payments from Jackson & Coker notwithstanding the end of Lynam's employment with the Company.

 In the alternative, Lynam requests a new trial on the issue of the mortgage payments, on the grounds that the jury's verdict was against the "overwhelming" weight of the evidence. A new trial on the grounds that a verdict is against the weight of the evidence will only be granted to prevent a miscarriage of justice. See Dunn v. HOVIC, 1 F.3d 1362, 1364 (3d Cir. 1993), modified on other grounds, 13 F.3d 58, 1993 U.S. Dist LEXIS 18355, 1993 WL 492289 (3d Cir. Nov. 26, 1993), cert. denied, 126 L. Ed. 2d 608, 114 S. Ct. 650, 62 U.S.L.W. 3409 (U.S. Dec. 13, 1993); Klein v. Hollings, 992 F.2d 1285, 1290 (3d Cir. 1993). Given the evidence in the record concerning the transfer of Lynam to the Philadelphia area and the letter of August 3, 1990, the Court finds that allowing the verdict to stand in the instant case would not be a miscarriage of justice. *fn7"

 2. The jury's verdict on the religious discrimination claim

 The jury returned a verdict against Lynam on the issue of religious discrimination, finding that (1) he failed to establish by a preponderance of the evidence that his religion was a motivating factor in Jackson & Coker's decision to demote him and (2) he failed to establish that the proffered reasons were pretextual. Lynam now requests a new trial on these issues, claiming again that the evidence of discrimination was "overwhelming." *fn8" In support of this claim, Lynam relies almost totally on his testimony during direct examination. However, his own contention that he was discriminated against by the Company because he was not a member of the Church of Christ was effectively rebutted by the testimony of various current and former employees of Jackson & Coker who testified that Lynam received the fastest promotion in the Company's history, and that, in fact, he was promoted ahead of people who were members of the Church. Lynam's own testimony established that he received an interest-free loan to purchase a new home, *fn9" and that he was hired by the Company even though the Company knew he was not a member of the Church.

 Moreover, there was ample testimony that the Company was entirely justified in demoting Lynam because his performance was not up to par with that of other regional vice presidents. Phil Hoggard, Jackson & Coker's executive vice-president for recruiting during Lynam's tenure at the Company, testified that the marketing department in the Northeast region ranked last in production among the Company's seven regions during the period Lynam headed the department as vice-president. Given this evidence, the Court finds that a reasonable jury could have concluded that Lynam was not discriminated against because of his religion, but rather, was demoted when he failed to perform satisfactorily in his new job. *fn10" See Klein, 992 F.2d at 1295 ("Where evidence is in conflict and subject to two interpretations, the trial judge should be reluctant to grant a new trial.").

 3. The charge on mixed-motive analysis and pretext analysis

 During the course of the trial, the Court on a number of occasions sought the input of counsel as to whether the jury should be charged under the mixed-motive, see Price Waterhouse v. Hopkins, 490 U.S. 228, 104 L. Ed. 2d 268, 109 S. Ct. 1775 (1989), or the pretext form of analysis, see Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 67 L. Ed. 2d 207, 101 S. Ct. 1089 (1981); McDonnell Douglas Corp. v. Green, 411 U.S. 792, 36 L. Ed. 2d 668, 93 S. Ct. 1817 (1973), or both. See Tr. of 2/4/1993 at 93-100; Tr. of 2/5/1993 at 165-78; Tr. of 2/8/1993 at 10-13. After several colloquies with counsel, the Court concluded that the charge would include instructions on both methods of proving a Title VII claim. In doing so, the Court relied on the Eighth Circuit's Pattern Jury Instructions, which contemplate submitting to the jury the issue of discrimination on both methods in borderline cases, see Manual of Model Civil Jury Instructions for the Eighth Circuit 5.92, the decision by the Second Circuit in Ostrowski v. Atlantic Mutual Insurance Cos., 968 F.2d 171, 181 (2d Cir. 1992) (suggesting that the jury must examine both pretext and mixed-motive), and the Supreme Court's decision in Price Waterhouse itself, which counseled that the determination of which theory was appropriate was a matter to be left to the fact-finder, see Price Waterhouse, 490 U.S. at 247 n.12 ("If the plaintiff fails to satisfy the fact-finder that it is more likely than not that a forbidden characteristic played a part in the employment decision, then she may prevail only if she proves, following Burdine, that the employer's stated reason for its decision is pretextual."). See also Foster v. University of Arkansas, 938 F.2d 111, 113 (8th Cir. 1991) (affirming, without discussion, a lower court's charge to a ...


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