Opinion
Case No. 96 C 3326
March 30, 2001
TO: THE HONORABLE WILLIAM T. HART UNITED STATES DISTRICT COURT JUDGE
REPORT AND RECOMMENDATION
Pending before the court is Plaintiff's motion to seek enforcement of the court's order entered against Defendant on July 30, 1998. For the reasons set forth below, the court recommends that the motion be denied.
BACKGROUND FACTS
Plaintiff Zia Hasham (the "Plaintiff") sued his employer the California State Board of Equalization (the "Board") alleging national origin, religious, and age discrimination. The court granted the Board's motion for summary judgment on the age and religious discrimination claims, but allowed the national origin discrimination claim to proceed to trial. The jury found in favor of Plaintiff on his claim of national origin discrimination and awarded him back pay and compensatory damages. On post-trial motions, the court upheld the jury's liability verdict but vacated the compensatory damage award of $350,000, while awarding Plaintiff $15,548 pay, $4,188.48 in interest, a promotion to a Supervising Tax Auditor I ("Supervisor I") position in Houston, Texas with seniority retroactive to August, 1993, and attorney's fees and costs.
On September 3, 1998, the district court granted the Board's motion to stay the monetary judgment and order of promotion. Three months later on December 10, 1998, the court lifted the stay on Plaintiffs promotion and ordered the Board to promote him to a Supervisor I position in Houston, Texas within fourteen (14) days. As ordered by the district court, the Board promoted Plaintiff to a Supervisor I position on December 24, 1998. The Board also paid Plaintiff his back pay, interest, attorney's fees, and costs.
In October, 1999, Plaintiff requested a transfer back to the Chicago office. The Board agreed to Plaintiff's request and the parties entered into a General Release and Settlement Agreement (the "Release") on November 22, 1999. Pursuant to the Release, Plaintiff was reassigned to the Chicago office, in exchange for which he released and discharged the Board from any and all claims of retaliation and/or discrimination during the period of December 24, 1998 (the date he began working in the Houston office) to the date of his transfer and commencement of employment in the Chicago office.
Plaintiff claims, inter alia, that the Release was signed under duress. Plaintiff, thus, seeks an order declaring the Release to be void and unenforceable. Plaintiff's instant motion, accordingly, requests the court to order the Board (a) to promote Plaintiff to a permanent Supervisor I position in Houston with retroactive seniority to August, 1993, and (b) to pay Plaintiff any accumulated back pay as well as certain attorneys fees and costs.
ANALYSIS
I. THE BOARD COMPLIED WITH THE COURT ORDER.
Plaintiff initially argues that the Board willfully deprived him of the relief he won at trial by not awarding him an August, 1993 seniority date when he was promoted to a Supervisor I position in Houston, Texas pursuant to the court's order of July 30, 1998. Pl.'s Mem. at 1. Instead, Plaintiff alleges that when he was promoted he was classified as if he were a new employee and placed in a probationary employment status where he was subject to a one year probationary period. Id. at 2. The Board, on the other hand, argues that it did follow the court's order by promoting Plaintiff retroactively to a Supervisor I position with an August, 1993 seniority date, but, that in accordance with state law, Plaintiff was still required to fulfill a probationary period. Def.'s Supp. Resp. at 2.
The court order promoting Plaintiff provided, in pertinent part, that his "seniority status as a Supervisor I shall be retroactive to August 1993." See Pl.'s Reply, Ex. 1, Court Order of July 30, 1998. The court order, however, was silent with respect to whether a probationary period would be required to be served by Plaintiff once he was promoted to the Supervisor I position.
California state law provides that a probationary period "is required . . . after any other type of appointment situation not specifically excepted from the probationary period requirement by statute or by board rule." Cal. Govt. Code § 19171(c) (emphasis added). Plaintiff has not cited to any state laws, rules or regulations, indicating that retroactive appointments are not subject to the state's mandated probationary period. Thus, state law does not provide an exception to the probationary period for retroactive appointments similar to Plaintiff's appointment.
The parties do not dispute that the California Code applies herein.
Plaintiffs affidavit statement that he was told by the "personnel office that a probationary period is not required" here cannot be considered, as it is wholly conclusory and does not set forth facts admissible in evidence. See, e.g., First Commodity Traders, Inc. v. Heinold Commodities, Inc., 766 F.2d 1007, 1011 (7th Cir. 1985); Box v. A P Tea Co., 772 F.2d 1372, 1378 (7th Cir. 1985).
Plaintiff further contends that if the Board had truly promoted him retroactively here to August, 1993, that his probationary period would have been considered to have commenced in August, 1993, and would have ended in July, 1994. Pl.'s Reply at 6. The Board, on the other hand, correctly points out that Plaintiff did not begin employment as a Supervisor I until after his court ordered promotion on December 24, 1998. Therefore, according to state law, his probationary did not commence until that time. In addition, based on the record, the Board's Notices of Personnel Action ("NOPA") do not indicate that Plaintiffs probationary period should have ended in July, 1994. The first NOPA was issued on January 5, 1999 and had an effective date of December 24, 1998, the date the stay was lifted and Plaintiff was promoted to the position of Supervisor I in Houston, Texas. The NOPA provided for a twelve month probationary period to December 23, 1999 and was signed off on by Plaintiff.
Plaintiff did not object to his probationary status until approximately nine months later in October, 1999. As stated, Plaintiff signed off on his January 5, 1999 NOPA. That NOPA expressly states: "[t]his appointment reflects the . . . court decision . . . [and] your signature certifies . . . that you intend to serve in this class, tenure, location and other elements of this appointment as reflected on this document; and you will make a reasonable attempt to seek correction of any aspect of this appointment that you know is illegal" Def.'s Supp. Resp., Ex. 3. The NOPA also provides that "[t]he information as shown on this document is assumed correct unless you notify your departmental personnel office in writing of errors within 30 calendar days from issue date." Id. Plaintiff failed to notify the Board of his objection to his probationary status within the required 30 day period.
Plaintiff first complained of his probationary status in a letter dated October 29, 1999. In this letter, however, Plaintiff primarily complains about his second performance review as a Supervisor I and not about his status.
Plaintiff further asserts that one of two later NOPAs issued on February 3, 2000 indicates a 1993-94 probationary period. Pl.'s Reply at 6. This NOPA, however, was issued after Plaintiff had requested and been granted his transfer back to the Chicago office position. In any event, considering the discussion, supra (pp. 3-5), this NOPA, alone in isolation, cannot sustain the Plaintiff's position herein.
In view of the record, the court finds that the Board complied with the court's July 30, 1998 order promoting Plaintiff to a Supervisor I position with retroactive seniority status to August, 1993. Because the court's order was silent regarding the applicable probationary period and did not provide that Plaintiff was entitled to bypass state law mandating a probationary period for appointments, the court finds that the Board by complying with applicable state law did not violate the provisions of the court's order. II. THE SETTLEMENT AND RELEASE AGREEMENT SHOULD BE ENFORCED.
Too, even assuming, arguendo, that Plaintiff is correct that his probationary period covered the period from 1993-94, any error by the Board requiring that Plaintiff serve a new probationary period beginning in 1999 does not rise to the level of "overcoming the exercise of free will" necessary for a finding of duress, discussed, infra, in Section II of this opinion.
INTRUDUCTION
Plaintiff contends that the Board used the threat of dismissal to force him into signing an unconscionable Release under duress which ultimately forced him to return to his previous position in the Chicago office. Pl.'s Mem. at 3. Plaintiff asserts that by placing him in a probationary position, he was subject to demotion for negative performance evaluations with no adequate procedure to rebut adverse claims. Id. Moreover, Plaintiff alleges that if he had been given the correct seniority date, he would have had been protected against retaliation and demotion because he would have been entitled to notice and a hearing before any adverse employment action could be taken. Id. Furthermore, Plaintiff argues that the Board did evaluate him negatively and he feared that the evaluation would be used to terminate him. Id.
The Board, on the other hand, argues, inter alia, that Plaintiff decided that he wanted a transfer from the Houston office to the Chicago office. Def.'s Supp. Resp. at 5. The Board maintains that Plaintiff initiated and requested the transfer because his wife had become seriously ill and wanted to be near her family. The Board granted Plaintiff's request to be transferred back to the Chicago office and entered into a written Release with Plaintiff. Def.'s Supp. Resp. at 5. The Release expressly states that "Defendant wishes to accommodate Plaintiffs request to be transferred back to the Chicago office because Plaintiffs wife has become seriously ill and wishes to be near her family." General Release and Settlement Agreement at 1. The Board further asserts that based on prior litigation with Plaintiff, it entered into the Release to establish that the transfer was at Plaintiffs request and of his own free will. Def.'s Supp. Resp. at 5. The Board also specifically responds to Plaintiffs other allegations (ex: that Plaintiff was vulnerable to demotion as a probationary employee).
Plaintiffs prior counsel made the same representation in open court to your honor on October 20, 1999. Pl.'s Reply, Ex. A, p. 7.
A. THE RELEASE WAS NOT SIGNED UNDER DURESS.
Both parties cite to Illinois law on this issue, relying on the Release's provision (¶ 16) that the release agreement will be construed and interpreted under Illinois law.
In Kaplan v. Kaplan, 25 Ill.2d 181, 185-86, 182 N.E.2d 706 (1962), the Illinois Supreme Court expressed that:
Duress has been defined as a condition where one is induced by a wrongful act or threat of another to make a contract under circumstances which deprive him of the exercise of free will, and it may be conceded that a contract executed under duress is voidable. Acts or threats cannot constitute duress unless they are wrongful; however, the rule is not limited to acts that are criminal, tortious or in violation of a contractual duty, but extends to acts that are wrongful in a moral sense. Moreover, the threat must be of such nature and made under such circumstances as to constitute a reasonable and adequate cause to control the will of the threatened person, and must have that effect and the act sought to be avoided must be performed by the person while in that condition . . . (internal citations omitted).
Thus, in order to invalidate an agreement on the basis of duress, a party must demonstrate inducement by a wrongful act or threat of another in executing an agreement under circumstances depriving him of the exercise of free will. Willcutts v. Galesburg Clinic Ass'n, 201 Ill. App.3d 847, 853, 560 N.E.2d 1, 147 Ill Dec. 853 (3rd Dist. 1990), citing Kaplan, 25 Ill.2d at 182, 182 N.E.2d 706. Moreover, a plaintiff attempting to invalidate a release based on duress has the burden of showing with clear and convincing evidence that the release was entered into because of duress. Wallenius v. Sison, 243 Ill. App.3d 495, 503, 183 Ill.Dec. 448, 611 N.E.2d 1096 (1st Dist. 1993).
Plaintiff has not met his burden on the duress issue. Based on the evidence in the case at bar, it was Plaintiff, himself, that initiated his transfer back to the Chicago office. For example, the subject Release and Settlement Agreement, which Plaintiff read and signed, expressly states that: "Defendant wishes to accommodate Plaintiff's request to be transferred back to the Chicago office because Plaintiff's wife has become seriously ill and wishes to be near her family." (italics added). Too, in order to facilitate this request, Plaintiff voluntarily agreed to enter into the Release with the Board. Paragraph 14 of the Release expressly states: " Plaintiff has read and understands this Release, has had an opportunity to consult with his attorney regarding its terms, and voluntarily enters into same with full knowledge of its terms and conditions. He understands and agrees that he has a period of seven (7) calendar days following his execution of this Agreement within which he may revoke his acceptance of this Agreement and that it is not effective until this evocation period has expired." (italics added.) General Release and Agreement at 4. Thus, the court finds that it is clear from the terms of the Release that Plaintiff not only requested the transfer back to Chicago, but that he was represented by counsel and he entered into the Release voluntarily and freely, with a full and complete understanding of its terms and conditions.
See also Pl.'s Reply, Ex. A, p. 7.
Plaintiff claims that his probationary status subjected him to unfair performance reviews and that he entered into the Release because he feared that the Board's negative evaluations would be used to terminate or demote him. Pl.'s Mem. at 3. The Board, on the other hand, argues that it had a legal right to evaluate Plaintiff negatively and/or terminate or demote him if he did not perform satisfactorily as a supervisor, even if he was on permanent not probationary status. Def.'s Supp. Resp. at 7. Given the Board's argument, it bears noting that under Illinois law, when deciding whether a party's threats provide the basis for invalidating a contract based upon duress, it is not wrongful for a party to threaten to do that which he has a legal right to do. That is, duress cannot be the basis for invalidating an agreement if the complained of conduct was lawful. Hurd v. Wildman, 303 Ill. App.3d 84, 91, 236 Ill.Dec. 482, 707 N.E.2d 609 (1st Dist. 1999); RIV VIL, Inc. v. Tucker, 979 F. Supp. 645 (N.D. Ill. 1997).
In any event, given the facts of this case ( see, e.g. Release and related discussion (pp. 7-8, supra), this asserted negative evaluation concern of Plaintiffs, respectfully, cannot realistically be regarded as depriving Plaintiff of the exercise of his free will.
To recapitulate, Plaintiff has not set forth any facts or shown that he was deprived of the exercise of his free will and that he entered into the subject Release under duress.
B. THE RELEASE WAS SUPPORTED BY CONSIDERATION.
Plaintiff argues that the Release should be stricken because it lacks consideration. Plaintiff asserts that he gave up his right to a Supervisor I position and received nothing in return because he would have been entitled to return to his former position if the Board had demoted him. Pl.'s Mem. at 5. The Board, on the other hand, argues that Plaintiff was granted a requested transfer back to the Chicago office, which he was not entitled to, plus Plaintiff was reimbursed for certain transportation costs associated with his move back to Chicago.
Consideration consists of some detriment to the offeror, some benefit to the offeree, or some bargained-for exchange between them. Doyle v. Holy Cross Hosp., 186 Ill.2d 104, 105, 237 Ill.Dec. 100, 708 N.E.2d 1140 (1999), citing Lipkin v. Koren, 392 Ill. 400, 406, 64 N.E.2d 890 (1946). "Any act or promise which is of benefit to one party or disadvantage to the other is a sufficient consideration to support a contract." Id. citing Steinberg v. Chicago Med Sch., 69 Ill.2d 320, 330, 13 Ill.Dec. 699, 371 N.E.2d 634 (1977). Moreover, the traditional rule in Illinois is that the law does not inquire into the adequacy of the consideration, only its existence. Curtis 1000, Inc. v. Suess, 24 F.3d 941, 945 (7th Cir. 1994), citing White v. Village of Homewood, 256 Ill. App.3d 354, 358, 195 Ill.Dec. 152, 628 N.E.2d 616 (1993).
The court finds that the Release was supported by consideration because there was a bargained-for exchange between Plaintiff and the Board. Plaintiff was granted his request to return to Chicago which he would not have been entitled to in exchange for which he released and discharged the Board from any and all claims of retaliation and/or discrimination from the period of December 24, 1998 (the date he began working in Houston) to the date of his transfer to the Chicago office.
C. THE RELEASE WAS NOT UNCONSCIONABLE.
Without citation of authority, Plaintiff argues that the Release is unconscionable. To the extent the argument is premised on the charge of duress, the argument must fail for the reasons previously set forth in this opinion (Section II A.) The court, respectfully, finds Plaintiffs other averments hereunder equally unavailing. For example, as the Board points out, Plaintiff applied for and was given the same consideration all other applicants were for the position of Supervisor I in the Chicago office subsequent to the execution of the Release, thus rendering moot Plaintiffs claim that the paragraph in the Release providing that he would not seek promotion was unconscionable.
III. THE BOARD'S ATTORNEY'S FEES AND COSTS REQUEST.
The Board requests attorney's fees and costs, as provided for in certain circumstances under the subject Release agreement (¶ 12). This request is denied. The action here seeks to invalidate the very Release agreement relied on by the Board hereunder. As such, the court finds that the instant action does not clearly and unambiguously fall within the Release agreement reimbursement provision in question.
CONCLUSION
At the last status hearing, Plaintiffs counsel orally requested an evidentiary hearing. This court, however, finds that no genuine issue of material fact exists in this motion that would necessitate an evidentiary hearing.
Based on the foregoing, it is hereby recommended that Plaintiff's motion to seek enforcement of the court's July 30, 1998 order be denied.
In view of this court's holding, this court does not find it necessary to address the Board's affirmative defense arguments relating to ratification, res judicata and laches.