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MILLER v. BENEFICIAL MGMT. CORP.

June 21, 1994

ELIZABETH MILLER, Plaintiff,
v.
BENEFICIAL MANAGEMENT CORPORATION, BENEFICIAL MANAGEMENT CORPORATION OF AMERICA and BENEFICIAL CORPORATION, Defendants.



The opinion of the court was delivered by: LECHNER

 LECHNER, District Judge

 This is an action by plaintiff Elizabeth G. Miller ("Miller") against defendants Beneficial Management Corporation, Beneficial Management Corporation of America and Beneficial Corporation (collectively, "Beneficial"), alleging gender and age discrimination in employment in violation of Federal and state law. Jurisdiction is alleged pursuant to the Equal Pay Act, as amended, 29 U.S.C. §§ 206(d)(1) and 216(b) ("EPA"), the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C.§§ 626, et seq. ("ADEA"), the Civil Rights Act of 1964, as amended, 42 U.S.C. §§ 2002, et seq. ("Title VII") and 28 U.S.C. §§ 1331 and 1367.

 Currently before the court is the motion by Beneficial for summary judgment dismissing the action pursuant to Fed.R.Civ.P. 56. *fn1" Also before the court is the cross-motion of Miller for partial summary judgment striking certain of Beneficial's affirmative defenses. *fn2" For the reasons set forth below, both motions are denied.

 Miller's claims of gender and age discrimination relate to her transfer from Beneficial's Legal Department to its Government Relations Department. Complaint and Jury Demand ("Complaint"), P 7. In early 1984, Beneficial vice president David Ward ("Ward") informed Miller that Charles Walsh, vice president and Counsel for Government Relations ("Walsh"), and Ken Raatz, an employee in the Government Relations Department ("Raatz"), were to be terminated from their posts; Ward invited Miller to replace them. Id., PP 7-8. Miller alleges she formally began working in the Government Relations Department on 1 July 1984, at which time she took over for both Walsh and Raatz. Id. According to Miller, despite assuming greater responsibilities than those handled by either Walsh or Raatz, her base salary was less than that of either of her predecessors. Id., PP 9-12.

 Miller commenced this action on 20 July 1989. As originally filed, the Complaint alleged violations of the EPA, ADEA, New Jersey Law Against Discrimination, N.J.S.A. §§ 10:5-1 et seq. ("NJLAD"), and the New Jersey Conscientious Employee Protection Act, N.J.S.A. § 34:19-1 et seq. ("CEPA"). Id., P 4. The Complaint requested "backpay, frontpay, compensatory damages, damages for psychological and emotional distress and/or humiliation, double damages, liquidated damages and punitive damages, as may be permitted under Federal and state statute and common law." Id., ad damnum clause, P A. The Complaint further requested that Miller be restored "to the full pension and other benefits to which she would have been entitled and which she would have attained but for defendant's illegal conduct." Id., P B.

 On 29 September 1989, Beneficial filed an answer to the Complaint, asserting six affirmative defenses. On 21 November 1989, Miller amended the Complaint, adding a claim under Title VII (the "Amended Complaint"). On 11 December 1989, Beneficial filed an answer to the Amended Complaint (the "Answer").

 By letter opinion, dated 23 July 1990, Miller's claim under CEPA was dismissed pursuant to Fed.R.Civ.P. 12(b)(1). As a result of the dismissal of her CEPA claim, Miller's claims for prospective relief such as frontpay and reinstatement are no longer at issue. Miller has, in fact, conceded that the Amended Complaint no longer seeks prospective relief. See Miller Moving Brief at 16.

 On 7 August 1991, Beneficial moved for summary judgment on, and/or dismissal of, the remaining claims in the Amended Complaint. By opinion, filed 18 October 1991 (the "18 October 1991 Opinion"), summary judgment was granted to Beneficial and the Amended Complaint was dismissed. See Miller, 776 F. Supp. at 970. On 19 November 1992, the Third Circuit reversed the 18 October 1991 Opinion and remanded the matter, holding that genuine issues of material fact existed as to whether Miller had been subjected to unlawful discrimination. See Miller, 977 F.2d at 847. Miller's claims under the EPA, ADEA, Title VII and the NJLAD were thereby reinstated.

 On 9 July 1993, Beneficial moved before Magistrate Judge Dennis M. Cavanaugh (the "Magistrate Judge") for leave to amend the Answer to assert two additional affirmative defenses. By letter-opinion and order, dated 20 July 1993 (the "20 July 1993 Opinion and Order"), the Magistrate Judge denied Beneficial's request for leave to amend the Answer. By opinion, dated 20 September 1993, the 20 July 1993 Opinion and Order was reversed and Beneficial was granted leave to amend the Answer. See Miller v. Beneficial Management Corp., 844 F. Supp. 990 (D.N.J. 1993).

 On 24 September 1993, Beneficial filed an amended answer (the "Amended Answer"). In the Amended Answer, Beneficial asserted two affirmative defenses in addition to those six asserted in the Answer. The first of these (the "Seventh Affirmative Defense") alleges: "[Miller's] claims are barred by her misrepresentation and fraud as to her resume and applications for health, death and pension benefits related to her employment at Beneficial." *fn4" Amended Answer at 10. The second of the additional affirmative defenses (the "Eighth Affirmative Defense") alleges: "[Miller's] claims are barred as a result of her unauthorized removal of documents from Beneficial." Id.

 By its instant motion, Beneficial seeks summary judgment dismissing the Amended Complaint based on Miller's misconduct as alleged in the Seventh and Eighth Affirmative Defenses. Miller's cross-motion seeks partial summary judgment striking the Seventh and Eighth Affirmative Defenses.

 Facts

 A. Miller's Employment History and the Misconduct Originally Alleged as the Basis for the Seventh and Eighth Affirmative Defenses

 In support of the Seventh and Eighth Affirmative Defenses, Beneficial asserts that pre-trial discovery revealed certain misconduct on Miller's part. Beneficial asserts that had it known of this misconduct at the time of its occurrence, it would have terminated Miller. Beneficial argues this state of facts should bar any recovery by Miller. *fn5"

 Miller contends Beneficial knew of her misconduct before the institution of this action and did not, in fact, terminate her employment. The undisputed facts with regard to Miller's employment history at Beneficial and her alleged misconduct are as follows:

 In the fall of 1979, Miller submitted a resume (the "Resume") to Beneficial, seeking employment as an attorney. *fn6" See Deposition of Miller, dated 20 November 1993 (the "20 Nov. 1993 Miller Dep."), attached as Exhibit S to Anderson Cert., at 5. At that time, Miller was interviewed by Beneficial and was offered employment in Beneficial's Legal Department effective 2 September 1980. Id. at 7; Beneficial Moving 12G, P 7.

 On 27 August 1980, in preparation for her employment, Miller submitted the Resume and an employment application (the "Application") to Beneficial's Personnel Department. On the Application, Miller's signature appears below the following statement:

 
I certify that the answers given by me to all of the questions on this application and any attachments are, to the best of my knowledge and belief, true and correct and that I have not willingly or knowingly withheld any pertinent facts or circumstances. I understand that any omission or misrepresentation of fact in this application may result in refusal of or separation from employment upon discovery thereof. I understand that as part of the employment process the employer has the authority and privilege to investigate and verify the information that I have provided.

 Application, attached as Exhibit A to Anderson Cert., at 3. *fn7"

 On 2 September 1980, Miller signed and submitted to Beneficial an "Employee's Death Benefit Plan Enrollment Card" (the "Death Benefit Card"). On the Death Benefit Card, Miller stated her date of birth as 20 February 1931. See Death Benefit Card, attached as Exhibit C to Anderson Cert. On 22 September 1980, Miller signed and submitted to Beneficial an "Enrollment Card -- Group Health Insurance" (the "Health Insurance Card"). On the Health Insurance Card, Miller represented her date of birth as 20 February 1931. See Health Insurance Card, attached as Exhibit C to Anderson Cert.

 In September 1980, shortly after Miller began work at Beneficial, Beneficial obtained Miller's high school, college and law school transcripts (the "Academic Transcripts"). See Academic Transcripts, attached as Exhibit P-136 to Miller Opp. Transcripts. The Academic Transcripts showed Miller's true date of birth to be 20 February 1928. Id. They also, of course, contained a true listing of Miller's grades and dates of graduation from high school, college and law school. Id. Beneficial employed a person for the specific purpose of "cross-checking transcripts and information like that against what was put down on employment applications." 17 Nov. 1993 Cole Dep. at 45

 Miller began her employment as an attorney with Beneficial on 2 September 1980. At that time, she joined Beneficial's Legal Department as an associate counsel. Beneficial Moving 12G, P 2. Miller's employment at Beneficial was her first since graduation from law school. Id., P 8. In a "job description," Miller's duties were summarized as follows: "Provides legal advice to consumer finance subsidiaries regarding various aspects of operations." Beneficial Job Description, dated October 1982 (the "1982 Job Description"), attached as Exhibit D to Anderson Cert. Miller's duties also involved "working with representatives from various departments on developing and modifying practices and procedures to conform with legal requirements" and "providing legal advice in areas such as Federal regulations, state license examinations, computer and credit bureau contracts . . . [and] compliance with Federal laws and regulations such as the Truth in Lending Act, the Equal Credit Opportunity Act, etc." Id.

 While employed in the Legal Department, Miller's performance was regarded unevenly by her superiors. On 16 November 1983, Charles E. Hance ("Hance"), head of the Legal Department and Miller's immediate supervisor, completed an evaluation form, known as a "Bentrak," regarding Miller's performance (the "1983 Bentrak"). In the 1983 Bentrak, Hance stated Miller exhibited "good planning and organizing skills" and that her "motivation and cooperation," as well as her "initiative, energy and ambition," were "good." 1983 Bentrak, attached as Exhibit G to Anderson Cert., at 2. Hance further reported Miller's "job knowledge regarding bankruptcy" and other areas of law was "developing well." Id. Hance cautioned, however, that "senior field and headquarters personnel were dissatisfied with [Miller's] advice." Id. at 3. In a section marked "summary rating," Hance checked a box marked "Below Expectations." Id.

 Testifying in a deposition in this action, Richard Bate ("Bate"), another of Miller's supervisors in the Legal Department, disagreed with the evaluation of Miller in the 1983 Bentrak. Bate stated Miller "was a very competent, solid, reliable attorney, and [that he] had complete confidence in her work." 23 June 1993 Bate Dep. at 45. Bate stated he did not find Miller to be lacking in any area of her performance. Id.

 Following her receipt of the 1983 Bentrak, Miller "made some efforts towards finding other employment." Miller Opp. 12G, P 17. To this end, she contacted a "headhunter" and transmitted her resume to other employers. See Beneficial Moving 12G, P 17; Miller Opp. 12G, P 17.

 In or about March 1984, Ward, head of Beneficial's Government Relations Department, approached Miller and asked her to join the Government Relations Department. 20 May 1993 Hance Dep. at 51-52. Miller accepted Ward's offer and began work in the Government Relations Department on 1 July 1984. Miller Opp. 12G, P 12. The Government Relations Department "consists of a corporate staff operating out of Beneficial's headquarters and Government Relations Directors ("GRDs"), who function primarily as lobbyists in the field." Beneficial Moving 12G, P 13. "Its functions include developing and presenting Beneficial's positions on issues to legislative and regulatory bodies at the Federal and state levels" and coordinating political contributions. Id. These "lobbying and contribution activities are subject to disclosure and filing requirements, and the [Government Relations] Department must keep informed of, and comply with, these requirements." Id.

 Miller's responsibilities in the Government Relations Department included "the preparation and filing of lobbying and political contribution reports and providing advice to the GRDs regarding compliance with laws governing their activities." Id., P 14; see Beneficial Job Description, dated October 1985 (the "1985 Job Description"), attached as Exhibit F to Anderson Cert. Miller was also responsible for creating and coordinating political action committees ("PACS") and monitoring laws regarding political contributions. See 1985 Job Description.

 Miller was promoted to assistant vice president on 1 July 1985. Id., P 15. Even at this time, Miller's performance within the Government Relations Department was regarded unevenly by her superiors. For example, in a "Bentrak" evaluation form, dated 7 March 1986 (the "1986 Bentrak"), Miller's interpersonal and management skills were rated as "below expectations." 1986 Bentrak, attached as Exhibit H to Anderson Cert., at 2, 4. Similarly, in a "Bentrak" evaluation form, dated 14 October 1988 (the "1988 Bentrak"), Ward evaluated Miller as below expectations in administrative, interpersonal, professional and management skills. See 1988 Bentrak, attached as Exhibit I to Anderson Cert., at 2-7. Other evaluations, however, gave Miller higher marks for her performance. See Miller Opp. 12G, P 16.

 In or about May or June 1988, Miller covertly taped a conversation with Helen Perry ("Perry"), another Beneficial employee (the "Perry Conversation"). Miller Opp. 12G, P 18; Beneficial Moving 12G, P 18. Miller subsequently informed Perry the conversation was recorded. 9 June 1993 Miller Dep. at 461. On the day after the Perry Conversation took place, Miller informed Ward she had taped the Perry Conversation. Id. at 466. According to Miller, Ward did not respond verbally to this disclosure. Id. at 467.

 Ward testified during a deposition in this action that he considered discharging Miller for her covert recording of the Perry Conversation. See Deposition of Ward, dated 30 June 1993 (the "30 June 1993 Ward Dep."), attached as Exhibit E to Anderson Cert., at 171. Hance, according to Ward, advised such action was inappropriate "since there was no company policy on the subject." Id. Ward's dissatisfaction with Miller's taping of the Perry Conversation was reflected in the 1988 Bentrak. See 1988 Bentrak at 4.

 On 3 June 1988, in spite of the mixed evaluations of Miller's performance, Ward discussed with Finn M. W. Caspersen ("Caspersen"), then a member of Beneficial's Executive Committee, the possibility of promoting Miller to vice president. See 6 April 1994 Miller Cert., PP 12-13c, Ex. F; Beneficial Moving 12G, P 21. In February 1988, Miller had approached David Farris ("Farris"), president of Beneficial, regarding a promotion. Beneficial Moving 12G, P 21. During a meeting on 1 September 1988 (the "September 1988 Bentrak Meeting"), Ward informed Miller she would not be promoted because of her evaluation in the 1988 Bentrak. *fn8" 30 June 1993 Ward Dep. at 186.

  By letter, dated 19 September 1988 (the "19 Sept. 1988 Letter"), Miller informed Ward of her opinion that Beneficial's refusal to promote her was motivated by her age, which she stated was sixty. *fn9" See 19 Sept. 1988 Letter, attached as Exhibit M to Anderson Cert. In the 19 September 1988 Letter, Miller also accused other members of the Government Relations Department of engaging in unspecified illegal activities. Id.

 Prompted by the 19 September 1988 Letter, Beneficial commenced an internal investigation of the Government Relations Department (the "Internal Investigation"). *fn10" See Beneficial Moving 12G, P 27. On 20 October 1988, Miller was transferred back to the Legal Department. Id., P 28.

 In or about September 1988, Ward became "puzzled" by Miller's statements, in the 19 September 1988 Letter and at the September 1988 Bentrak Meeting, that she was sixty years old. Id., P 31. Ward thereupon reviewed Beneficial's personnel records regarding Miller. Deposition of Ward, dated 10 December 1993 (the "10 Dec. 1993 Ward Dep."), at 9. Ward discovered Miller's age, according to Beneficial's personnel records, was fifty-seven. *fn11" Id. at 14.

 On 8 September 1988, Ward drafted an addendum to the 1988 Bentrak (the "1988 Addendum"). In the 1988 Addendum, Ward stated:

 
Since you brought up the subject of your age, I looked in the personnel records after you left for home on September 1 [after the September 1988 Bentrak Meeting] to see what they showed. You told the company that you were born in 1931 and would now be 57 years of age. You repeated a number of times in the [September 1988 Bentrak Meeting] that you were 60 years old. A misrepresentation was made on one of those occasions, although I don't know which one.

 1988 Addendum, attached as Exhibit P-132 to Miller Opp. Transcripts, at 2. The 1988 Addendum was circulated to Farris, Hance, Maryann Schneider ("Schneider"), Beneficial's Senior Vice President for Planning and Administration, and Lawrence X. Cole ("Cole"), Beneficial's Vice President for Human Resources. Id. at 1.

 On 18 October 1988, Ward circulated a memorandum to Schneider, Hance and Cole (the "18 Oct. 1988 Memo"). In the 18 October 1988 Memo, Ward complained of several instances of "outright gratuitous fabrication" on Miller's part. 18 Oct. 1988 Memo, attached as Exhibit P-133 to Miller Opp. Transcripts. These included a "blatant lie by [Miller] to cover up her poor judgment in [a] business situation" and "her lying about her age on her employment application." Id.

 On 15 November 1988, Miller submitted to Beneficial's Payroll Department a "Temporary Disability Benefits Claim" (the "1988 Claim"). In the 1988 Claim, Miller listed her date of birth as 20 February 1928. See 1988 Claim, attached as Exhibit P-136 to Miller Opp. Transcripts. Shortly thereafter, Beneficial vice president Marilyn Maher ("Maher") noted the discrepancy between the date of birth listed in the 1988 Claim and that listed on the Health Insurance Card. On 17 November 1988, Maher circulated a memorandum on the subject to Hance and Cole (the "17 Nov. 1988 Memo"). In the 17 November 1988 Memo, Maher informed Hance and Cole:

 
As information, there is a discrepancy on the disability form which [Miller] completed with regard to her age. On our health and life records, she shows her age [sic] as 2/20/31 and on the disability form she shows it as 2/20/28.

 17 Nov. 1988 Memo, attached as Exhibit P-136 to Miller Opp. Transcripts. Beneficial's "upper level managers in charge chose not to pursue the matter with [Miller] at that time Beneficial Moving 12G, P 34.

 Miller does not dispute that she wilfully falsified her date of birth on her Employment Contract, Resume, Death Benefit Card and Health Insurance Card. *fn12" Miller Opp. 12G, P 38. Nor does she dispute that she failed to inform anyone at Beneficial of these misrepresentations during her employment. Id., P 43. She asserts, however, that she did so "because she was afraid she would have a difficult time finding [and keeping] employment due to age discrimination." Id., P 39; see 20 November 1993 Miller Dep. at 27.

 Miller also admits that, throughout her employment at Beneficial, she routinely removed files from the office. 20 Nov. 1993 Miller Dep. at 69. Miller kept some of these files at home and some in her briefcase. Id. at 72. In explanation of this practice, Miller states she "worked a lot at home." Id. at 69. Miller states she did not ask anyone at Beneficial whether it was permitted to bring records home because "everyone did this." Id. at 71. Miller admits, however, that she transmitted some of these documents to her attorney in the instant matter between October 1988 and January 1989. Id. at 231, 235.

 Some of the documents Miller removed were "personnel documents [(the "Personnel Files")] that [she] would want for [her] records." Id. at 70. Some of these Personnel Files related to other employees. Id. at 73; see Anderson Cert., Ex. LL. Miller states she took some of these "to protect herself because of the things . . . that [she was] asked to do that were illegal." 20 Nov. 1993 Miller Dep. at 69. Others, she states, she took home because "they weren't perhaps as secure as they should have been in [her] office." Id. at 73.

 Between about 1984 and 1 September 1988, Miller also routinely brought home several confidential memoranda containing legal advice given to Beneficial by her and by other attorneys (the "Opinion Memos"). Id. at 108-118. Miller states she brought the Opinion Memos home "to protect herself." Id. at 109. Miller elaborated: "If Beneficial got in trouble I wanted to be sure that I could protect myself by showing I was no part of that trouble." Id. at 109-10.

 Between October 1988 and January 1989, Miller removed from Beneficial's offices several "lists of retainers and . . . list[s] of political contributions" made by Beneficial and its employees (the "Contribution Lists"). Deposition of Miller, dated 8 June 1993 (the "8 June 1993 Miller Dep."), attached as Exhibit J to Anderson Cert., at 23-24; see Anderson Cert., Exs. MM, NN. Miller states she removed the Contribution Lists because she thought they might aid her in a lawsuit against Beneficial. See 8 June 1993 Miller Dep. at 24.

 There is at least some evidence in the record that officers of Beneficial knew prior to the institution of this action that Miller was removing documents from Beneficial's offices. In or about September 1988, for example, Ward suggested to Cole that "Miller might have removed company documents." 17 Nov. 1993 Cole Dep. at 32. Cole did not follow up this information with further inquiry. Id. at 33.

 In or about October 1988, while conducting the Internal Investigation, Caulfield learned Miller had been removing documents from Beneficial over an extended period of time. See 13 Dec. 1993 Caulfield Dep. at 25-27. At some point during the Internal Investigation, Caulfield transmitted this information to Ward. See 10 Dec. 1993 Ward Dep. at 49-54. During "the first couple of weeks" of the Internal Investigation, Caulfield was informed by Miller that Miller had retained an attorney. 13 Dec. 1993 Caulfield Dep. at 33.

 On 20 October 1988, Hance took notes of a phone conversation he had with James Gilliam ("Gilliam"), a senior vice president at Beneficial (the "Hance Phone Notes"). The Hance Phone Notes are captioned: "B. Miller . . . Priv & Conf & written in contemp of anticip litigation." Hance Phone Notes, attached as Exhibit P-147 to Miller Moving Transcripts. In the Hance Phone Notes, Hance notes Miller "asked for some time to work on her files (she has at home)." Id. Hance testified that, shortly after he took the Hance Phone Notes, he became aware that Miller was sending Caulfield documents related to the Internal Investigation "from someplace other than the office." 17 Nov. 1993 Hance Dep. at 165.

 On 13 December 1988, Ward addressed a memorandum to Caspersen (the "13 Dec. 1988 Memo"). In the 13 December 1988 Memo, Ward stated, among other complaints about Miller: "Of course, we now know that she has been secretly accumulating files of company documents at home." 13 Dec. 1988 Memo, attached as Exhibit P-151 to Miller Moving Transcripts.

 The next day, 14 December 1988, Hance addressed a memorandum to Miller (the "14 December 1988 Memo"), reporting that the Internal Investigation had been concluded and that there had been no indication of wrongdoing. See 14 Dec. 1988 Memo, attached as Exhibit Gilliam-1 to Miller Moving Transcripts. Hance also wrote:

 
Beneficial . . . believes that much of the information and many of the documents that you have were obtained by you in the course of your acting as an attorney for the company and its affiliated companies. Please be advised that the company and its affiliated companies do not waive any attorney-client rights and privileges in connection with these matters, and we caution you to act accordingly. In this regard, please make sure that you do not breach any obligation owed to the company and its affiliated companies.

 Id.

 On 6 January 1989, Miller left Beneficial's employ. Beneficial contends Miller "voluntarily terminated her employment." Beneficial Moving 12G, P 36. Miller counters she was "constructively discharged." Miller Opp. 12G, P 36.

 In the days following Miller's departure from Beneficial, Hance had discussions with Gilliam regarding offering Miller "the opportunity to continue in the employ of Beneficial." 17 Nov. 1993 Hance Dep. at 142. Hance recommended offering Miller continued employment because Miller "might have acted in leaving the company in a manner that she would subsequently decide was not as constructive as continuing employment with Beneficial." Id. at 143. Hance explained he thought Miller "might decide after a little reflection that it would be better for her to continue with her job at Beneficial and that [Beneficial] ought to make that opportunity available to her." Id. Gilliam agreed with Hance's assessment that an offer of re-employment "was the right thing to do." Id.

 On 10 January 1989, Hance addressed a letter to Miller (the "10 Jan. 1989 Letter"). In the 10 January 1989 Letter, Hance wrote:

 
On January 8, I advised you that we will keep your position for you, for two weeks, to give you the chance to reconsider continuing to work here. As I told you on January 8, we are not trying to get you to leave. We are trying to provide you with the opportunity of continuing to work here in a position that is meaningful and productive.

 10 January Letter, attached as Exhibit P-152 to Miller Moving Exhibits, at 1. Hance then proceeded to address certain concerns Miller had expressed with respect to working conditions at Beneficial. Id. at 1-4. Hance concluded:

 
I hope [this] explains my understanding of the developments and the current situation. I also hope it will serve as a basis for your ...

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