RUFFIN v. ALLSTATE INSURANCE COMPANY
Filing
39
OPINION. Signed by Judge Noel L. Hillman on 9/30/2016. (tf, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
MURIANDA RUFFIN,
Civil No. 15-501 (NLH/AMD)
Plaintiff,
OPINION
v.
ALLSTATE INSURANCE COMPANY,
Defendant.
APPEARANCES:
KATIE ANN PILGREN
ARI R. KARPF
KARPF, KARPF & CERUTTI, P.C.
3331 STREET ROAD, SUITE 128
TWO GREENWOOD SQUARE
BENSALEM, PA 19020
On behalf of plaintiff
KERRIE RESTIERI HESLIN
NUKK-FREEMAN & CERRA, P.C.
26 MAIN STREET
SUITE 301
CHATHAM, NJ 07928
On behalf of defendant
HILLMAN, District Judge
Presently before the Court is defendant’s motion for summary
judgment.
Plaintiff asserts employment discrimination claims.
For the reasons expressed below, defendant’s motion will be
granted.
BACKGROUND
Plaintiff, Murianda Ruffin, a black (African-American)
female, was hired on June 2, 2008 by defendant Allstate Insurance
Company as a trial attorney.
Plaintiff claims that during her
employment she was subjected to discrimination and retaliation due
to her race, including the denial of authorization to take certain
continuing legal education courses, the selective enforcement of
leave policies, the denial of a promotion because she complained
about racial inequality.
She also asserts she was forced to
resign on August 6, 2014 while on medical leave when Allstate
learned she had filed a complaint with the New Jersey Division on
Civil Rights.
Plaintiff filed a three-count complaint against Allstate,
claiming wrongful termination, failure to promote, and race
discrimination and retaliation in violation of 42 U.S.C. § 1981
(Counts I and II), and violations of the Family Medical Leave Act,
29 U.S.C. § 2611, et seq. (“FMLA”) (Count III).
Plaintiff
subsequently amended her complaint by leave of Court to add counts
for violations of Title VII of the Civil Rights Act of 1964
(“Title VII”) and the Americans with Disabilities Act (“ADA”).
Previously, Allstate moved to dismiss plaintiff’s complaint
because it contended that plaintiff settled all of her claims
against Allstate during a New Jersey Division of Civil Rights
(“DCR”) mediation.
Allstate argued that plaintiff’s entire case
is barred by that settlement agreement, which Allstate attached as
an exhibit to its motion.
The Court denied Allstate’s motion,
determining that the settlement agreement could not be considered
2
on a Rule 12(b)(6) motion.
The Court also declined to convert
Allstate’s motion into one for summary judgment.
The Court,
however, directed the parties to meet with the Magistrate Judge to
develop an expedited discovery plan to address Allstate’s
contention that a settlement agreement barred plaintiff’s entire
complaint.
(Docket No. 16.)
The expedited discovery has now been completed, and Allstate,
by way of a motion for summary judgment, has renewed its argument
that plaintiff’s entire case is barred by the settlement
agreement.
Plaintiff has opposed Allstate’s motion, essentially
arguing that the settlement is invalid, but that even if it were
valid, it does not bar her other discrimination claims that were
not the subject of her DCR complaint, which only concerned a
failure to promote claim. 1
DISCUSSION
A.
Jurisdiction
This Court has jurisdiction over plaintiff’s claims under 28
U.S.C. § 1331.
B.
Summary Judgment Standard
Summary judgment is appropriate where the Court is satisfied
1
As discussed below, even though plaintiff repeatedly
characterizes her DCR complaint as limited to her failure to
promote claim, plaintiff’s complaint to the DCR also contains
claims related to differential treatment in being denied
authorization for continuing legal education (CLE) courses and
paid time off (PTO).
3
that the materials in the record, including depositions,
documents, electronically stored information, affidavits or
declarations, stipulations, admissions, or interrogatory answers,
demonstrate that there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a matter of
law.
Celotex Corp. v. Catrett, 477 U.S. 317, 330 (1986); Fed. R.
Civ. P. 56(a).
An issue is “genuine” if it is supported by evidence such
that a reasonable jury could return a verdict in the nonmoving
party’s favor.
(1986).
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
A fact is “material” if, under the governing substantive
law, a dispute about the fact might affect the outcome of the
suit.
Id.
In considering a motion for summary judgment, a
district court may not make credibility determinations or engage
in any weighing of the evidence; instead, the non-moving party's
evidence “is to be believed and all justifiable inferences are to
be drawn in his favor.”
Marino v. Industrial Crating Co., 358
F.3d 241, 247 (3d Cir. 2004)(quoting Anderson, 477 U.S. at 255).
Initially, the moving party has the burden of demonstrating
the absence of a genuine issue of material fact.
Catrett, 477 U.S. 317, 323 (1986).
Celotex Corp. v.
Once the moving party has met
this burden, the nonmoving party must identify, by affidavits or
otherwise, specific facts showing that there is a genuine issue
for trial.
Id.
Thus, to withstand a properly supported motion
4
for summary judgment, the nonmoving party must identify specific
facts and affirmative evidence that contradict those offered by
the moving party.
Anderson, 477 U.S. at 256-57.
A party opposing
summary judgment must do more than just rest upon mere
allegations, general denials, or vague statements.
Saldana v.
Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001).
C.
Analysis
Plaintiff filed a verified complaint with the New Jersey
Division of Civil Rights (DCR) against Allstate on April 7, 2014,
claiming that Allstate discriminated and retaliated against her in
violation of the New Jersey Law Against Discrimination, N.J.S.A.
10:5-1, et seq., and Title VII of the Civil Rights Act of 1964, 42
U.S.C. § 2000e, et seq.
Plaintiff contended that she experienced
“differential treatment” and was “denied promotion” because of her
“race/black,” because Allstate did not approve all of her requests
for Continuing Legal Education (“CLE”) and Paid Time Off (“PTO”),
and because Allstate denied her a promotion to a Trial Attorney II
position.
(Docket No. 29-5 at 70-72.)
DCR mediator, Darrell Booker, held a mediation with plaintiff
and Allstate on August 5, 2014.
Plaintiff represented herself,
and David Schaffer, in-house counsel for Allstate, represented
Allstate.
After negotiating from Allstate’s initial offer of
$10,000, plaintiff accepted $20,000.
Before the parties left the
mediation, plaintiff wrote in her own handwriting the following:
5
email: mlruffin@juno.com
Agreement of $20K gross ½ half per 1099, health insurance
continued through 8/31/2014, no contesting unemployment
compensation via release, no expectation to return to office.
(Docket No. 33-3.)
Plaintiff and Mr. Schaffer both signed the
written document.
Plaintiff returned her corporate credit card, I.D. card, and
building entry card to Mr. Schaffer.
At that point, because
plaintiff had a doctor’s appointment, the parties left the
building.
Later that evening, plaintiff and Mr. Schaffer
exchanged text messages to arrange for plaintiff to upload her
personal photos and information from Allstate’s mobile telephone
and company laptop to a .zip drive before returning the devices to
the company.
The next day, August 6, 2014, plaintiff returned her
company-issued laptop to Allstate, and Mr. Schaffer followed up
with an email to plaintiff, informing her that he was in the
process of preparing a formal version of their agreement.
On August 7, 2014, Mr. Schaffer sent the formalized version
of the settlement to plaintiff. 2
On August 8, 2014, plaintiff
returned her company-issued iPhone to Allstate.
Plaintiff also
deposited the first settlement payment into her bank account.
2
Plaintiff never signed the “Confidential Settlement Agreement and
General Release” prepared by Allstate and emailed to plaintiff on
August 7, 2014. (Docket No. 29-4 at 143-151.) Plaintiff objects
to various portions of the agreement, and argues that the parties
do not have an enforceable settlement agreement because the terms
in the agreement were not discussed at the mediation. Plaintiff’s
position on this issue is addressed below.
6
Also on August 8, 2014, plaintiff retained a lawyer, who
wrote Allstate a letter that stated that plaintiff still
considered herself to be an employee of Allstate and that she
would like to return to work as soon as possible.
Allstate communicated with plaintiff’s counsel.
After this,
On August 22,
2014, Allstate deposited the second settlement payment into
plaintiff’s account, and on August 29, 2014, Allstate made the
third settlement payment into plaintiff’s account.
On August 31,
2014, plaintiff filed for unemployment benefits, noting that
Allstate would not contest her unemployment benefits application
because of the August 5, 2014 settlement.
On October 3, 2014,
Allstate deposited the final settlement payment of $10,000 into
plaintiff’s account. 3
On October 8, 2014, a new law firm, and plaintiff’s current
counsel, wrote to Allstate on plaintiff’s behalf.
Counsel stated
that plaintiff “adamantly disagrees that she settled her claims
and resigned from her position with Allstate,” and that it is
plaintiff’s “position that no settlement has been reached in the
case and that Ms. Ruffin did not resign from her employment; but
rather, was forced out of Allstate and coerced into signing a
3
Even though plaintiff’s counsel offered the return of the $20,000
to Allstate, plaintiff has not returned the money. On February
28, 2015, plaintiff filed her 2014 taxes. On her Form-1040, under
“other income,” Plaintiff identified $10,000 from the “Allstate
Wrongful Termination Settlement.” There is no reference to the
other $10,000.
7
document stating that she would accept $20,000 in exchange for her
resignation.”
(Docket No. 29-5.)
The letter also informs
Allstate that plaintiff never intended to relinquish other claims
she had against Allstate, separate from the failure to promote
claim, which was the only subject of her DCR complaint. 4
The basis for plaintiff’s forced-resignation argument is
Allstate’s Outside Practice of Law Policy.
The policy states, in
relevant part:
The Allstate Code of Ethics states that, “[f]or
employees who are attorneys, regardless of the position they
hold with the Company, the practice of law is restricted to
Company business, except with permission of the General
Counsel or her designee.”
. . .
[F]or each specific instance permission must be obtained
from the General Counsel or her designee in accordance with
the process set forth below: . . .
--Representing oneself in a legal matter.
(Docket No. 29-5 at 33.)
During the mediation, Mediator Booker met with Schaffer and
plaintiff separately.
Schaffer informed Booker that an
investigation was being conducted to determine whether plaintiff
had violated the policy when she represented herself in a
landlord/tenant matter without first receiving permission from
Allstate.
According to plaintiff, Booker told plaintiff that if
she returned to work the next day, she would be terminated for a
violation of Allstate’s outside practice of law policy.
4
But see note 1, and infra at page 19.
8
Plaintiff
contends that even though she did not want to resign from her
$79,000/year job for $10,000 or $20,000, he stated that if she did
not accept the money and resign, she risked going into work,
getting fired, and not receiving anything.
29-30.)
(Docket No. 29-5 at
Plaintiff claims that because she was effectively
terminated already, she felt like she was under duress and had no
choice but to accept the deal.
(Id.)
Allstate argues that the settlement agreement written by
plaintiff - a seasoned attorney – is valid and enforceable.
Allstate argues that plaintiff voluntarily resigned and
relinquished not only her failure to promote claim, but all claims
she thought she had against Allstate at the time, when confronted
with the reality that she was facing immediate termination for her
violation of the outside practice of law policy.
In response, plaintiff argues that her forced resignation
invalidates whatever settlement the parties came to at the
mediation.
She also argues that settlement agreements which arise
during mediation must specifically memorialize in writing all the
elements of the settlement prior to the conclusion of the
mediation session, or such a settlement is not enforceable.
Plaintiff further argues that because the subject of her complaint
before the DCR related solely to her failure to promote claim, and
because the parties never discussed other claims she might have
against Allstate, including Allstate’s alleged violation of her
9
FMLA rights for her forced-resignation a day after she returned
from FMLA leave, her other claims against Allstate are not barred.
The basic principles of settlement agreements are not
disputed by the parties:
State law governs the construction and enforcement of
settlement agreements in federal court. [New Jersey law]
holds that “an agreement to settle a lawsuit is a contract
which, like all other contracts, may be freely entered into,
and which a court, absent a demonstration of ‘fraud or other
compelling circumstance’ shall honor and enforce as it does
other contracts.” Pascarella v. Bruck, 190 N.J.Super. 118,
124–25, 462 A.2d 186 (App. Div. 1983).
Traditional contract law rules provide that a contract arises
from the manifest intentions of the parties to engage in an
offer and acceptance of sufficiently definite essential
terms. Weichert Co. Realtors v. Ryan, 128 N.J. 427, 435, 608
A.2d 280 (1992) (citations omitted). To be enforceable, a
contract must also be accompanied by consideration. In
bilateral contracts or agreements . . . where the parties
make mutual promises to do some future act, “the
consideration of the promise of one party is a promise on the
part of the other.”
Despite these strict requirements, parties may bind
themselves by an informal memorandum, even though they
contemplate the execution of a more formal document. “[I]f
the negotiations are finished and the contract between the
parties is complete in all its terms and the parties intend
that it shall be binding, then it is enforceable, although
lacking in formality and although the parties contemplate
that a formal agreement shall be drawn and signed.” Thus, so
long as the parties agree upon the essential terms of a
settlement, leaving the details to be “fleshed out” in a
writing thereafter, courts will enforce settlement agreements
notwithstanding the absence of a future writing.
Excelsior Ins. Co. v. Pennsbury Pain Ctr., 975 F. Supp. 342, 348–
49 (D.N.J. 1996) (some internal citations omitted).
A settlement agreement obtained through mediation has a
separate set of conditions in order to be enforceable.
10
“[I]f the
parties to mediation reach an agreement to resolve their dispute,
the terms of that settlement must be reduced to writing and signed
by the parties before the mediation comes to a close. In those
cases in which the complexity of the settlement terms cannot be
drafted by the time the mediation session was expected to have
ended, the mediation session should be continued for a brief but
reasonable period of time to allow for the signing of the
settlement.”
Willingboro Mall, Ltd. v. 240/242 Franklin Ave.,
L.L.C., 71 A.3d 888, 900 (N.J. 2013).
This rule “is intended to
ensure, to the extent humanly possible, that the parties have
voluntarily and knowingly entered into the settlement and to
protect the settlement against a later collateral attack.
A
settlement in mediation should not be the prelude to a new round
of litigation over whether the parties reached a settlement.
The
signed, written agreement requirement--we expect--will greatly
minimize the potential for litigation.”
Id.
Plaintiff argues that the settlement agreement reached at
mediation is invalid because it was not fully reduced to writing
at the mediation session.
To support her argument, plaintiff
points to the “Confidential Settlement Agreement and General
Release” prepared by Allstate and emailed to plaintiff on August
7, 2014.
Because Allstate wanted plaintiff to agree to terms
other than those discussed and memorialized at the mediation,
plaintiff contends that the entire settlement is unenforceable.
11
In response, Allstate argues that it is only seeking to enforce
the written agreement plaintiff wrote with her own hand at the
mediation session, and not the extra paperwork sent to plaintiff
afterward.
Heeding the wisdom of the New Jersey Supreme Court that
“[o]ne of the main purposes of mediation is the expeditious
resolution of disputes,” and that “it should not spawn more
litigation,” the Court finds the following:
The Scope of the Parties’ Settlement
Plaintiff’s memorialization of the parties’ settlement at the
mediation satisfies the Willingboro Mall requirement that terms of
that settlement must be reduced to writing and signed by the
parties before the mediation comes to a close.
The “Confidential
Settlement Agreement and General Release” Allstate sent to
plaintiff after the mediation session is not part of the
settlement, because the majority of the terms therein were not
discussed at the mediation, and were not contained in the written
agreement drafted and signed at the mediation.
Even though
Allstate sent plaintiff the “Confidential Settlement Agreement and
General Release” after the mediation, that action does not
invalidate the written and signed agreement that was completed at
the session.
12
The Settlement Agreement Resolved the Claims in the
DCR Complaint and Only Those Claims
The settlement agreement only pertains to the resolution of
plaintiff’s claims contained in her DCR complaint.
Even though
Schaffer testified that the parties discussed a “full release” of
all claims during the mediation (Docket No. 36-3 at 6), Schaffer
never directly spoke with plaintiff regarding the settlement
terms, including the scope of the release.
Moreover, the written
agreement, which states, “no contesting unemployment compensation
via release,” does not contain the word “full,” and it cannot be
interpreted to encompass all claims that plaintiff could lodge
against Allstate.
If the settlement was conditioned upon
plaintiff’s release of her pending DCR claims and all other
potential claims she might have against Allstate, Mr. Schaffer
should have directed plaintiff to specifically indicate that
requirement in the written settlement document.
Per Willingboro
Mall, such a material condition is required to be included in the
written document at the conclusion of the mediation in order to be
enforceable.
The provision is clear enough, however, to indicate
plaintiff’s agreement that she was releasing the subject of her
pending claims before the DCR.
As we have noted, although
plaintiff repeatedly characterizes her DCR complaint as limited to
her failure to promote claim, plaintiff’s complaint to the DCR
also contains claims related to differential treatment in being
13
denied authorization for continuing legal education (CLE) courses
and paid time off (PTO).
Indeed, plaintiff testified that the settlement was intended
to resolve only her DCR complaint.
She released such claims in
exchange for $20,000, continued health insurance, uncontested
unemployment compensation, and “no expectation to return to
office.”
To hold otherwise would render the phrase “no contesting
unemployment compensation via release” superfluous.
Accordingly,
absent duress which we discuss below, Defendant is entitled to
summary judgment on Counts II and V of the First Amended
Complaint.
Plaintiff Was Not Under Duress and Resigned Voluntarily
Pursuant to the Terms of the Settlement
The settlement agreement is not voidable due to duress.
Plaintiff claims that she was forced into resigning because she
was informed by the mediator that she was either (a) about to be
fired due to an investigation into her violation of the outside
practice of law policy, or (b) was already terminated.
Putting
aside the conflicting premises, and even accepting plaintiff’s
feeling that she had “no choice” but to resign, the evidence in
the record does not support a finding that plaintiff was under
“duress” when she agreed to, and wrote down, the terms of the
settlement of her DCR complaint.
Under New Jersey law, a contract is voidable based on duress
if a contracting party is deprived of the exercise of free will
14
because of wrongful pressure or threats.
Mac Naughton v.
Harmelech, 2016 WL 3771276, at *7–8 (D.N.J. July 13, 2016) (citing
Rubenstein v. Rubenstein, 120 A.2d 11, 13–15 (N.J. 1956)).
“‘The
act or conduct complained of need not be unlawful in the technical
sense of the term; it suffices if it is wrongful in the sense that
it is so oppressive under given circum[s]tances as to constrain
one to do what his free will would refuse.’”
Rebenstein, 120 A.2d at 15).
Id. at 15 (quoting
In defining “economic duress,” the
Supreme Court of New Jersey has stated “‘that the decisive factor
is the wrongfulness of the pressure exerted.’”
Id. (quoting
Cont'l Bank of Pa. v. Barclay Riding Acad., Inc., 459 A.2d 1163,
1175 (1983)).
“‘Where there is adequacy of consideration, there
is generally no duress . . . .
Whenever a party to a contract
seeks the best possible terms, there can be no rescission merely
upon the grounds of ‘driving a hard bargain.’
Merely taking
advantage of another's financial difficulty is not duress.
Rather, the person alleging financial difficulty must allege that
it was contributed to or caused by the one accused of coercion . .
. .
Under this rule, the party exerting pressure is scored only
for that for which he alone is responsible.’”
Id. (quoting Cont'l
Bank, 459 A.2d at 1175–76 (quoting 13 Williston, Contracts § 1617
at 708 (3d ed. 1970)).
Simply stated, “it is black-letter law that there is no
duress when a party simply threatens to do what it has a legal
15
right to do,” and “threatening an employee’s position, as a matter
of law, cannot meet the stringent ‘duress’ standard.”
Shine v.
TD Bank Fin. Grp., 2011 WL 3328490, *6 (D.N.J. Aug. 2, 2011)
(citing Warner-Lambert Pharmaceutical Co. v. Sylk, 471 F.2d 1137,
1144 n. 24 (3d Cir. 1972)); see also Harsco Corp. v. Zlotnicki,
779 F.2d 906, 911 (3d Cir. 1985) (no economic duress when employee
ordered to sign employment contract under threat of termination);
Mosley v. Bay Ship Mgmt., Inc., 174 F. Supp. 2d 192, 199 (D.N.J.
2000) (citations omitted) (“Both the Court of Appeals for the
Third Circuit and the New Jersey Appellate Division have held that
‘economic pressure alone is not enough to constitute duress
rendering an otherwise valid release void.’”).
In this case, plaintiff was informed at mediation that
Allstate was conducting an investigation into whether plaintiff
violated the outside practice of law policy, and that if it was
determined that she had violated the policy, she was subject to
termination.
According to either of plaintiff’s premises, the
mediator informed plaintiff that Allstate had concluded that she
violated the policy and was effectively already fired, about which
she would learn the next day when she came into work, or Allstate
was likely to soon come to that conclusion and terminate her
shortly thereafter.
Neither premise, however, supports a threat,
let alone the repression of plaintiff’s free will.
Allstate did not say, “release your claims before the DCR or
16
you will be fired.” 5
Instead, plaintiff was informed of her
termination, or impending termination, and had two choices:
(1)
plaintiff could release her DCR claims, accept $20,000, continued
health benefits, and uncontested unemployment insurance, and not
return to the office; or (2) plaintiff could maintain the status
quo: continue to prosecute her DCR claims, return to the office
the next day, and face the results of the investigation.
Having
the ability to make a choice between the status quo and another
option is not duress.
Moreover, that the mediator recognized and
informed plaintiff of her two choices does not amount to a threat
to accept one outcome over the other.
Plaintiff’s Other Claims are Barred Because
She Suffered No Adverse Employment Action
Defendant argues that even if plaintiff did not release her
claims other than her DCR claims, those claims are barred because
she cannot demonstrate that she suffered an adverse employment
action, which is a required element of all her claims, because she
voluntarily resigned from her job.
We agree.
The Court has already found that plaintiff cannot void the
settlement agreement due to duress, and that one of the elements
of the settlement agreement was her voluntary decision not to
return to work.
5
It follows, therefore, that any claim predicated
Even if Allstate had made such a “threat,” because plaintiff
accepted consideration in the form of $20,000, continued health
benefits, and uncontested unemployment insurance, it would not be
considered “duress” sufficient to void the settlement.
17
on termination as the adverse employment action fails as a matter
of law.
Jones v. McCormick & Schmick’s Seafood Restaurants, Inc.,
2014 WL 1669808, *5 (D.N.J. Apr. 28, 2014)(Bumb, J.).
Each of the
remaining counts allege termination as the adverse action.
(Count
1, par. 30; Count III, para. 45; Count IV, para. 50; and Count VI,
para. 64).
In light of our determination that Plaintiff
voluntarily resigned her position with the defendant as
contemplated by the settlement agreement, Defendant is entitled to
summary judgment on those counts as well.
CONCLUSION
For the reasons expressed above, Allstate’s motion for
summary judgment shall be granted on all counts of the First
Amended Complaint.
An appropriate Order will be entered.
Date: September 30, 2016
At Camden, New Jersey
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
18
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?