Opinion
8:00CV78
October, 2000
MEMORANDUM AND ORDER
This matter comes before the Court on the pro se plaintiff's objection (filing 16) to the report and recommendation of the magistrate judge (filing 15) recommending that the defendant's motion for summary judgment (filing 9) be granted. In support of her objection, the plaintiff has submitted a brief and additional evidence (filing 17). The defendant has elected not to submit a responsive brief. Following my de novo review of the evidence and arguments, the Court will overrule the plaintiff's objection and grant the defendant's motion for summary judgment. Because the Court's decision to grant summary judgment rests on independent grounds, the Court will not adopt the report and recommendation filed by the magistrate judge.
I. Standard of Review
Pursuant to 28 U.S.C. § 636(b)(1)(C), the Court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objections are made. The Court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate. The Court may also receive further evidence or remand the matter to the magistrate with instructions.
II. Factual Summary
From May 31, 1996, through February 15, 1999, the pro se plaintiff was employed with Sergeant's Pet Products, Inc., as an Executive Administrative Assistant. During her employment, she provided administrative assistance to the General Manager, Controller, and three vice presidents. The defendant terminated the plaintiff on February 15, 1999. On March 1, 1999, the plaintiff signed a general release waiving her right to file any claim relating to her employment or separation from ConAgra (filing 10, Ex. 1). In consideration for signing the general release, the plaintiff received two months of severance pay and was provided with two months of medical and dental benefits. Id.
On February 4, 2000, the plaintiff filed a civil complaint alleging four claims under Title VII (wrongful termination, retaliation, sex discrimination, and age discrimination), a claim under the Equal Pay Act, and a claim for unpaid overtime under the Fair Labor and Standards Act (filing 1). The defendant filed an answer raising as an affirmative defense that the signed release barred the plaintiff from bringing this lawsuit (filing 3). The defendant also filed a counterclaim alleging breach of a written separation agreement and damages flowing therefrom (Ex. A attached to filing 3).
On May 18, 2000, the defendant filed a motion for summary judgment (filing 9), arguing that the release barred her claims as a matter of law. The pro se plaintiff opposed the motion and submitted an affidavit challenging the validity of the release. Exhibit I, plt. index of evidence in opposition to motion for summary judgment (filing ____).
On July 26, 2000, the magistrate judge issued a report and recommendation (filing 15). In the report and recommendation the magistrate judge ruled that the plaintiff had filed her complaint within the 90-day limitations period based on the date she received the right to sue letter and ruled that she would not recommend granting summary judgment on this basis. Id. However, the magistrate judge agreed with the defendant that the voluntary release signed by the plaintiff on March 1, 1999, barred her claims, and recommended that the district court grant summary judgment on this basis. Id.
III. Discussion
In recommending summary judgment, the magistrate judge concluded that the plaintiff knowingly and voluntarily waived her right to file a private action against the defendant (filing 15 at p. 13). Although the magistrate judge determined that a dispute existed whether the release was signed voluntarily, he found that the plaintiff had "presented no evidence of duress." Id. at 14. He also found that the plaintiff's letter dated February 4, 1999, addressed to the President and Chief Executive Officer of ConAgra, Inc., "does not support her assertion that she was suffering from depression and diminished mental capacity during the period." Id. at p. 13.
The Court has carefully reviewed the plaintiff's evidence, in particular her affidavit, and finds that she has come forward with some proof, in the form of a sworn affidavit, attesting that she signed the release because she "feared retaliation by ConAgra . . . in . . . seeking new employment or possible unemployment benefits." Musgrave Affid. at § 8. The plaintiff further attested that at the time she was terminated and signed the release she was "being treated for clinical depression with the prescription drug Zoloft," and that her treatment was "covered under employee benefits [she] received in the HMO plan [she] participated in through ConAgra, Inc." Id. at ¶ 9.
Additional independent evidence in the form of a patient insurance report and a prescription drug receipt collaborate the plaintiff's sworn statement that the defendant was on notice that she was under medical treatment when it terminated her, and prepared the separation agreement and release for her to sign. Because of the existence of this evidence, the Court does not adopt the magistrate judge's report and recommendation.
Although the Court may receive additional information on an issue, the present case involving the validity and enforceablity of a release is controlled by principles of state contract law. Lancaster v. Buerkle Buick Honda Co., 809 F.2d 539, 541 (8th Cir. 1987). A general principle of contract law is that a release can be rescinded only upon a tender of any consideration received. Fleming v. United States Postal Service AMF O'Hare, 27 F.3d 259, 260 (7th Cir. 1994) ( citing Samuel Williston, 12 Williston on Contracts § 1460 (Walter H. E. Jaeger ed.3d ed. 1970)). In 1996, the Nebraska Supreme Court adopted the so-called "tender rule" in Doe v. Golnick, 251 Neb. 184, 556 N.W.2d 20 (1996). In Golnick, the Nebraska Supreme Court ruled:
When a person seeks to avoid the effect of a release because it is either void or voidable, he or she must first restore or offer to restore whatever he or she has received for executing the release (citations omitted). In other words, the person must place the parties in the positions they were prior to the execution of the release.
This rule is not absolute. Restoration is a condition precedent in a case where rescission is by act of the party or a legal recission. Restoration is not a condition precedent, however, in a case involving equitable recission; that is, an action to obtain a decree of recission. Kracl v. Loseke, 236 Neb. 290, 461 N.W.2d 67 (1990).
In the instant case, plaintiff brought an action at law for damages incurred as a result of defendants' alleged negligence. Plaintiff's equitable claim, namely that the release must be rescinded because it is void, did not arise until after defendants had alleged in their answer that the plaintiff's action was barred by the release. . . .
The Michigan Supreme Court held that "the tender rule . . . requires that whenever a legal claim is raised in contravention of a settlement agreement, even if joined with an equitable claim, tender is a precondition" ( citing Stefanac v. Cranbrook Ed. Comm., 435 Mich. 155, 170, 458 N.W.2d 56, 63 (1990)). . . .
We adopt the rule as set out in Stefanac and hold that in the instant case, prior to filing her action, plaintiff was required to tender to the defendant the $75,000 she received for signing the release. . . . Thus, as a matter of law, plaintiff is barred from maintaining a negligence claim against defendants.Golnick, 251 Neb. at 187, 556 N.W.2d at 23.
While Golnick involved a medical malpractice plaintiff seeking to rescind an executed mutual release on the grounds that genuine issues of material fact existed as to her mental capacity to contract and the existence of duress at time the release was executed, the Stefanac case on which the Nebraska Supreme Court relied in adopting the tender rule involved a former employee who had received a check in the amount of $2,090.65 in exchange for signing a document entitled "Release of Claims." Stefanac, 435 Mich. at 160, 458 N.W.2d at 58. Pursuant to the release, Stefanac, in consideration for four weeks' accrued vacation and two weeks' severance pay, released and discharged her employer from any claims arising out of or in connection with her employment and resignation. Id. Approximately ten months after signing the release, Stefanac filed suit against her former employer alleging wrongful discharge, sex discrimination, and termination in violation of public policy. Id. at 161, 458 N.W.2d at 58. The Michigan Supreme Court reinstated the district court's dismissal of the case with prejudice based on its holding that "when a plaintiff has entered into a settlement agreement, tender of consideration recited in the agreement must occur . . . prior to or simultaneously with the commencement of any proceeding raising a legal claim in contravention of the agreement. Id. at 159, 458 N.W.2d at 58.
In the instant case, the plaintiff brought an action at law for damages for alleged violations under Title VII, the Equal Pay Act, and the Fair Labor and Standards Act (filing 1). She did not raise an equitable claim — that the general release she signed is void or voidable due to duress and mental incapacity — until after the defendant alleged in its answer an affirmative defense that her lawsuit was barred by operation of the release (filing 3). Because she filed an action at law seeking damages as opposed to an equitable claim seeking recission of the release, tender is a precondition under Nebraska law. Golnick, 251 Neb. at 188, 556 N.W.2d at 23. The tender rule requires the plaintiff to tender the consideration recited in the separation agreement (i.e., the value of two months of severance payments and continued medical and dental coverage) as a condition precedent to filing suit. Id. As there is no evidence before the Court that the plaintiff has tendered or has offered to tender the consideration recited in the separation agreement, she is barred from maintaining this action at law for damages. Accordingly, the Court must grant the defendant's motion for summary judgment.
IT IS HEREBY ORDERED:
The plaintiff's objection to the magistrate judge's report and recommendation (filing 16) is overruled;
The report and recommendation (filing 15) is not adopted;
The defendant's motion for summary judgment (filing 9) is granted; and
The Clerk of the District Court shall file the plaintiff's index of evidence (Ex. A-M) in opposition to defendant's motion for summary judgment.