Court Opinion

ID: 2963556
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:11:53.810806+00
Date Added: 2024-06-11T11:42:42.955548
License: Public Domain

USCA1 Opinion

	

                            United States Court of Appeals
                                For the First Circuit
                                 ____________________

        No. 95-1086

                                 MARY DEREN, ET AL.,

                               Plaintiffs, Appellants,

                                          v.

                               DIGITAL EQUIPMENT CORP.,

                                 Defendant, Appellee.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                 [Hon. Frank H. Freedman, Senior U.S. District Judge]
                                          __________________________

                                 ____________________

                                        Before

                                  Cyr, Circuit Judge,
                                       _____________
                      Coffin and Bownes, Senior Circuit Judges.
                                         _____________________

                                 ____________________

            Mark L. Hare for appellants.
            ____________
            Jay  M. Presser  with  whom  Jeffrey C.  Hummel was  on  brief for
            _______________              __________________
        appellee.

                                 ____________________

                                    July 25, 1995
                                 ____________________

               COFFIN,  Senior Circuit  Judge.    As  part of  a  severance
                        _____________________

          agreement, plaintiffs signed releases  waiving all claims against

          their  former  employer.    Three  and  one  half   years  later,

          contending that the  releases had been coerced, they brought this

          ERISA  suit.  The  district court dismissed,  applying the common

          law rule  that a party may  not avoid a contract  based on duress

          without first  returning the consideration received.   We express

          no view  on whether  ERISA plaintiffs must  satisfy this  "tender

          back" requirement.   Instead, we affirm the  court's dismissal on

          the  ground that, by waiting  so long before  attempting to avoid

          the releases,  plaintiffs have ratified them,  thus waiving their

          claims.

                                    I.  Background
                                        __________

               We  take the  facts  as alleged  in  the complaint.    E.g.,
                                                                      ____

          Waterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993).  Plaintiffs were
          ________    ____

          employees   of  a   Digital   Equipment   facility  in   Enfield,

          Connecticut.   In May or June 1990, Digital offered all employees

          at the Enfield  plant a severance package,  called a Transitional

          Financial Support Option  (TFSO), which consisted  of a lump  sum

          cash payment of  at least 40  weeks' pay.   Plaintiffs agreed  to

          accept the TFSO in a timely manner.  Digital, however, apparently

          underestimating  the number  of  employees who  would accept  its

          offer, refused to give plaintiffs the TFSO benefits.  Instead, it

          gave  the TFSO package to  ten other employees.   Plaintiffs then

          requested information  from  Digital concerning  the criteria  by

          which the  ten employees  were selected.   Digital, in  response,

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          offered  plaintiffs an  alternate  severance  package, with  less

          generous benefits than  the TFSO.   In November  and December  of

          1990, plaintiffs  accepted the alternate severance  plan, and, in

          exchange, signed  releases  waiving all  claims against  Digital,

          including claims arising out of its refusal to give them the TFSO

          benefits.

               Plaintiffs filed this suit on June 17, 1994, more than three

          and one half  years later,  claiming that they  had been  coerced

          into accepting the lesser  package and signing the releases.   In

          particular, they  alleged that  Digital had isolated  them, given

          them only four days  to accept or reject the alternate  plan, and

          told  them that they  would likely suffer  a pay reduction  or be

          transferred  or laid  off without  any benefits  if they  did not

          accept.   Digital  moved to  dismiss  the  suit on  a  number  of

          grounds.  The district court held that ERISA left undisturbed the

          common law rule that, as a  precondition to attempting to avoid a

          contract or release, the consideration supporting the contract or

          release  must  be tendered  back to  the  released party.   Since

          plaintiffs concededly have retained the benefits of the alternate

          severance package, the district  court concluded that their suits

          were not viable.

                                    II.  Analysis
                                         ________

               The parties have extensively briefed whether ERISA displaces

          the common  law tender back requirement, a question apparently of

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          first  impression in  any federal  court of  appeals.1   We leave

          this interesting question for another day.

               In  In  re Boston  Shipyard Corp.,  886  F.2d 451  (1st Cir.
                   _____________________________

          1989), we said:

               It  is  well  settled  that "[a]  contract  or  release, the
               execution of which  is induced by  duress, is voidable,  not
               void, and  the person claiming  duress must act  promptly to
               repudiate  the contract or release  or he will  be deemed to
               have waived his right to do so." 

          Id. at  455 (quoting Di Rose v. PK Management Corp. 691 F.2d 628,
          ___                  _______    ___________________

          633-34 (2d Cir. 1982)).  Applying this principle, we found that a

          party had  ratified a release agreement by  accepting payment and

          waiting for  over a year and one half before claiming that it was

          duress-induced.    Id.   We recently  reiterated  the rule.   See
                             ___                                        ___

          Vasapolli v.  Rostoff, 39  F.3d 27,  35 n.5  (1st Cir. 1994)  ("A
          _________     _______

          contract signed  under duress is voidable,  but not automatically

          void.  By accepting the funds  and failing to seek a remedy based

                              
          ____________________

               1 In  Hogue v. Southern  Ry. Co., 390  U.S. 516  (1968), the
                     _____    _________________
          Supreme Court held that the Federal Employer Liability Act (FELA)
          had  displaced   the   tender  back   requirement,  and   allowed
          ___
          plaintiff's suit  to  go forward  despite his  failure to  return
          consideration received  for a release of claims.   Several courts
          of appeals have addressed the applicability of the Hogue decision
                                                             _____
          to a  variety of remedial statutes, such as 42 U.S.C.   1983, the
          ADEA,  Title VII, and the Jones Act, with mixed results.  Compare
                                                                    _______
          Forbus v.  Sears Roebuck  & Co., 958  F.2d 1036, 1041  (11th Cir.
          ______     ____________________
          1992) (no tender  back requirement for ADEA plaintiff)  and Oberg
                                                                  ___ _____
          v. Allied Van Lines, 11 F.3d 679, 684 (7th Cir. 1993) (same) with
             ________________                                          ____
          Wamsley v.  Champlin Refining and  Chemicals, Inc., 11  F.3d 534,
          _______     ______________________________________
          539-40  (5th Cir. 1993)  (contra).  See  also Botefur v.  City of
                                    ______    ___  ____ _______     _______
          Eagle Point,  7 F.3d  152, 156  (9th Cir. 1993)  (no tender  back
          ___________
          requirement for   1983 plaintiff); Smith v. Pinell, 597 F.2d 994,
                                             _____    ______
          996 (5th Cir.  1979) (no  tender back requirement  for Jones  Act
          plaintiff); Flemming v. U.S.  Postal Service AMF O'Hare,  27 F.3d
                      ________    _______________________________
          259, 260-62  (7th Cir.  1994) (enforcing tender  back requirement
          for  Title VII plaintiff).   None, apparently, has  been asked to
          determine whether Hogue applies to ERISA.
                            _____

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          on  duress  within a  reasonable  period  of time  .  .  . ,  the

          plaintiffs forfeited  any entitlement to relief  on this basis.")

          (citations omitted).  See also Abbadessa v. Moore Business Forms,
                                ___ ____ _________    _____________________

          Inc., 987 F.2d 18, 22-24 (1st Cir. 1993) (finding ratification of
          ____

          an allegedly avoidable release under  New Hampshire law).   Other

          courts  agree.    E.g.,  Sutter  Home  Winery,  Inc.  v.  Vintage
                            ____   ___________________________      _______

          Selections,  Ltd.,  971  F.2d 401,  409  (9th  Cir. 1992)  (after
          _________________

          accepting  the benefits of an agreement for four years, party may

          no longer avoid  the agreement based on  claimed duress); Grillet
                                                                    _______

          v.  Sears, Roebuck  & Co.,  927  F.2d 217,  220  (5th Cir.  1991)
              _____________________

          (retaining   benefits  of  release   for  two  years  constitutes

          ratification).

               We  think the instant case  falls squarely within this rule.

          The  undisputed facts  show that,  for three  and one  half years

          after any claimed duress  had passed, the plaintiffs enjoyed  the

          benefits of  the bargain  they now  wish to  avoid.   During this

          time,  they never sought  to repudiate their  agreements based on

          duress.2    Thus, whether  or  not  the releases  initially  were
                              
          ____________________

               2 We think the district court was overly generous in stating
          that plaintiffs claimed they  orally had repudiated the releases.
          The  court  cited only  to a  footnote in  plaintiffs' memorandum
          opposing  the  motion  to   dismiss,  which  asserted  that  they
          "notified  Digital of  their claims  promptly."   To  repudiate a
          contract, however, "a party must unequivocally declare his intent
          not to perform  his obligation."   Taylor v.  Gordon Flesch  Co.,
                                             ______     ___________________
          Inc., 793  F.2d 858, 864 (7th Cir. 1986).  Plaintiffs point to no
          ____
          such unambiguous  statement of intent to  disavow their agreement
          to  forego legal  claims against  Digital before they  filed this
          lawsuit.  The language relied on by the district court is far too
          vague  to be  read  as a  claimed  repudiation of  the  releases.
          Indeed, we  suspect it might  refer to  what plaintiffs'  counsel
          described   at  oral  argument   as  plaintiffs'  post-settlement
          requests  for  information concerning  the  TFSO.   Perhaps  more

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          secured  through  duress,  plaintiffs   ratified  them  by  their

          subsequent  conduct.  See Boston Shipyard, 886 F.2d at 455 (party
                                ___ _______________

          may ratify an agreement entered into under duress by, inter alia,
                                                                _____ ____

          "`remaining silent or acquiescing in the contract for a period of

          time  after he has the opportunity to avoid it'") (quoting United
                                                                     ______

          States v.  McBride, 571 F.  Supp. 596, 613 (S.D.Tex.  1988)).  By
          ______     _______

          ratifying  the releases,  plaintiffs waived  the claims  they now

          attempt to assert.  Their complaint was properly dismissed.

               Affirmed.
               ________

                              
          ____________________

          importantly, the  essential document  for evaluating a  motion to
          dismiss,  the  amended  complaint,  contains  no  allegation that
          plaintiffs repudiated the releases  before bringing suit.

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