Jones v. The Continental Corporation Brief

    IN THE UNITED STATES COURT OF APPEALS FOR THE SIXTH

CIRCUIT

 ̂GWENDOLYN E. JONES,

Plaint iff-Appellant
VS.

THE CONTINENTAL CORPORATION, 
ET AL.,

Defendants-Appellees

)

)
) CASE NO. 85-5489

DIST. CT. NO. 82-3572
)

)

)

On Appeal From The United States District Court 
For The Middle District Of Tennessee 

Nashville Division

BRIEF

WILLIAMS AND DINKINS 
AVON N. WILLIAMS, JR. 
RICHARD H. DINKINS 
203 Second Avenue, North 
Nashville, Tennessee 37201

Attorneys for Plaintiff-Appellant



with defendant s theory and advise of any disagreement as to 
the issues. The parties shall make diligent, good faith efforts 
to reconcile any differences promptly and without the necessity 
of the Trial Judge’s intercession. If the parties cannot agree on 
a pretrial order, each attorney shall notify the Clerk at least 
twenty-one (21) days before trial and file a certificate twenty (20) 
days before trial that the parties have, in a face-to-face con­
ference, been unsuccessful, after a good faith effort, to agree on 
a pretrial order. Thereafter, the Trial Judge may enter a pretrial 
order or hold a pretrial conference. Amendments to the pretrial 
order entered ex parte by the Trial Judge may be sought by 
motion filed three (3) days after the entry of the order.

(b) Pretrial briefs shall be filed with the Clerk at least ten (10) 
days before trial. Such briefs shall contain the following:

(1) a concise statement of the case;

(2) a statement of the propositions of law upon which counsel 
expects to rely, together with citations of authorities (in con­
ference with Rule 8(c)) in support thereof, quoting pertinent ex­
cerpts from such authorities and stating the source by volume 
and page.

(c) Stipulations. In all civil actions, prior to the trial of the case 
counsel shall stipulate all undisputed facts. In all damage suits, 
prior to the trial of the case counsel shall attempt to stipulate 
all facts desired to be proved by either party concerning the 
physical surroundings of the place of injury at the time in ques­
tion, including, among other things, width, grade, curves, and 
descriptions of railroads, highways, and other roads, objects con­
stituting obstructions to view, including all measurements relied 
upon, also all plats, diagrams and photographs showing the 
same. On failure of counsel to do so, the Court may appoint a 
civil engineer or photographer or both for that purpose, or make 
other appropriate order, the costs thereof to be assessed pursuant 
to the Court s determination. The stipulations shall be reduced 
to w’riting and filed with the Clerk ten (10) days prior to trial. 
At least fifteen (15) days before trial counsel shall meet and con­
fer. If they cannot agree on stipulations they must notify the 
court ten (10) days before trial.

(d) All exhibits shall be submitted to the Clerk for marking 
before 9:00 a.m., the date of trial.

(e) Criminal Cases. Reference is hereby made to the Pretrial 
Services Plan, adopted pursuant to the Pretrial Services Act of 
1982, a copy of which may be obtained from the Clerk.



(f) Subpoena in Aid of Discovery. Whenever a party in a civil 
action seeks to obtain a subpoena for purposes other than to re­
quire attendance at a hearing or a trial, then the party seeking 
issuance of the subpoena shall file and serve a notice to take 
the deposition of the person or entity to the subpoenaed before 
the subpoena is issued by the Clerk.

RULE 10
DISCOVERY IN CRIMINAL CASES

Discovery matters in criminal cases shall be governed by the 
procedures set forth in the plan adopted in this District pursuant 
to the Speedy Trial Act of 1974, a copy of which may be secured 
from the Clerk’s Office.

RULE 11
PRETRIAL ORDERS AND CONFERENCES

Each District Judge sitting in the Middle District of Tennessee 
may establish individual pretrial procedures for his Court. 
However, in the absence of such procedures, the following shall 
govern the conduct of cases in this District:
(a) Twenty (20) days before trial, unless excused by the Trial 
Judge, an agreed pretrial order shall be filed with the Clerk. 
The order shall contain the following recitals:

(1) Jurisdiction.
(2) That the pleadings are amended to conform to the 

pretrial order.
(3) Short summary of plaintiffs theory.
(4) Short summary of defendant’s theory.
(5) The issues to be submitted to the Trial Judge or jury.
(6) That all exhibits will be shown to opposing counsel five 

(5) days before trial.
(7) That the names of all witnesses will be exchanged in 

writing ten (10) days before trial.
Plaintiff s counsel shall serve the opposing counsel thirty-five 

(35) days (if service by mail thirty-seven (37) days) before trial 
date with a proposed pretrial order containing the above items 
except for the theory of defendant. Within ten (10) days after 
receipt thereof, opposing counsel shall furnish plaintiff s counsel

22

' ' v ' . . . .



APPENDIX



CONCLUSION

For all the foregoing reasons, plaintiff and her counsel 

submit that the Orders appealed from are erroneous and should be 

reversed. Of particular importance is the chilling effect that 

same will have on the willingness of counsel for plaintiffs to accep- 

similar cases, the effective lack of access to redress that litigants 

will suffer and the encouragement of dilatory submission on the part 

of well-healed defendants. Such a result should be soundly re­
jected by this Court.

Respectfully submitted,

203 Second Avenue, North 
Nashville, Tennessee 37201

Attorneys for Plaintiff

CERTIFICATE

The undersigned certifies that copy of the foregoing Brief 

was mailed to Cornelia Clark, Esquire, Farris, Warfield and Kanaday, 

17th Floor, Third National Bank Building, Nashville, Tennessee 37219 

and to Lloyd Sutter, Esquire, King and Spaulding, 2500 Trust Company 

Tower, Atlanta, Georgia 30303, this the < ^ ^ day of August, 1985.

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medial purposes of Title VII, see generally, Christiansburg Garment 

Co. vs. E.E.O.C., supra. The Court's later Opinion was not only 

contrary to the Affidavit relied upon but also again failed to con­

sider the ability of plaintiff to pay the judgments, merely positing 

its ruling on a belief that plaintiff could borrow the money "with­

out being rendered destitute". (R. 175 at 2). Plaintiff would sub­

mit that the clear effect of the ruling of the Court in this regard 

is to discourage the bringing of civil rights claims, a result which 

has been routinely rejected by courts.

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F •2d. 98 (6th Cir., 1982), wherein this Court held that even a 

plaintiff guilty of perjury was not disqualified from recovering 

an award of fees for her successful prosecution of a suit, noting 

that same policy should apply in the case of an unsuccessful

plaintiff where misconduct would not affect the ultimate issue of 

defendant’s liability or the plaintiff's basis believing that dis­

crimination has occurred." Id_. at 185, noting Carrion vs. Yeshiva 

University, 535 F.2d. 722 (2nd Cir., 1976). At no place in its 

decision did the District Court find that plaintiff did not believe 

that she was the victim of discrimination and retaliation in con­

nection with her termination and, as stated above, there was a 

plethora of facts upon which plaintiff could (and did) base her 

belief. The decision of the Court below rejected the claim of 

plaintiff and adopted that of the defendants and there was no basis 

for the Court’s determination that plaintiff did not believe she 

was the yictim of unlawful acts or that her claim was frivolous, 
groundless or unreasonable.

H I . THE DISTRICT COURT ERRED IN ASSESSING COSTS AGAINST PLAINTIFF 

The District Court also assessed costs against plaintiff in 

the amount of $6,540.15. In her Motion For A New Trial And/Or To 

Alter Or Amend, plaintiff set forth her inability to satisfy the 

judgment for costs and fees, primarily because of the reduction in 

her income brought about as a result of her termination. The Court 

rejected plaintiff's plea, noting that it was of opinion, after re­

viewing her Affidavit, that she had "sufficient assets to take out 

a loan...". In his initial Opinion, it is clear that the Court dis­

regarded the ability of plaintiff to pay such an award, although 

such consideration would be important and consistent with the re-

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clear that the Court’s holding that the claim was frivolous is 

grounded in the same post hoc reasoning rejected in Christiansburg 

Garment Co. vs. E.E.O.C., supra. The totality of all facts, in­

cluding, but not limited to, the closeness in time of plaintiff's

termination to the adjournment of trial, the specious nature of
4/

the justification for the termination offered by defendants, the 

escalation of plaintiff's job duties immediately prior to her 

termination and the conclusion that the conduct of plaintiff in the 

premises did not disquality her for unemployment benefits under 

Tennessee law, (See R. 170 ), militate against a finding that

plaintiff's claim was frivolous, such as to justify an award of 
counsel fees to defendants.

In Smith vs. Smythe-Cramer Co,, 754 F.2d. 180 (6th Cir.,

1985), this Court not only rejected a District Court conclusion that 

plaintiffs in that fair housing case were guilty of misconduct, 

but, further, stated that, even if there had been misconduct, it 

would not have affected the validity of plaintiffs' claim. The 

Court found that "any misconduct would not affect the plaintiff's 

belief that her or she was a victim of discrimination", 754 F.2d. 

at 185 and that consequently "it is improper to assess fees on that 

basis". Id.. The Court went further and cited Price vs. Pelka, 690

17 ---
The Court noted that the Brandon Agency merely requested the 

reassignment of plaintiff rather than her termination. (R. 145 at

-22-



Par. 33,837 (7th Cir., 1983), 717 p.2d. 1160; Burris vs. Davidson 

Transfer and Storage Company, 32 E.P.D. Par. 33,740 (D.C. Del., 

1982); contra, see Beard vs. Annis, 34 E.P.D. Par. 34,318 (11th 

Cir., 1984); Lewis vs. Brown $ Root, Inc., 32 E.P.D. Par. 33,761 

(5th Cir., 1983), 711 F.2d. 1287. This Court in Smith vs. Smythe- 

Cramer Co., supra, noted that "courts have awarded attorneys fees 

to prevailing defendants where no evidence supports the plaintiff’s 

position or the defects in the suit are of such magnitude that the 

plaintiff’s ultimate failure is clearly apparent from the beginning 

or at some significant point in the proceedings after which the 

plaintiff continues to litigate." 754 F.2d. at 183.

In the present case the Court assessed fees against the plain­

tiff for time spent by defendants' counsel in defending her "fri­

volous termination claim". (R. 161 at 5). In its Opinion on the 

merits of plaintiff’s claim, the Court found against the plaintiff 

"because of her lack of credibility" (R. 145 at 4) after noting that 

" f \ j  s is true with most cases of this type, credibility is the 

deciding factor ." (id_., emphasis added). Specifically with regard

to her temination, the Court concluded, again after discussing the 

evidence on point, held that "plaintiff's termination was the pro­

duct of sound business judgment, not racial discrimination or re­

taliation for pressing her civil rights claims." Id., at 6. At the 

time of her termination, the trial on plaintiff’s original complaint 

was in recess, with the Court having determined that plaintiff had 

established a prima facie case of discrimination. (Tr. 464-467). 

While the merits of her termination claim are not the subject of 

another appeal (see Statement Of The Case, supra at 1 ), it is



under 42 U.S.C., Sec. 1981 is 42 U.S.C., Sec. 1988; the standard 

for awarding fees under Sec. 1988 is the same as that under Title 

VII. See Smith vs. Smythe-Cramer Co., 754 F.2d. 180 (6th Cir., 

1985), citing the legislative history of Sec. 1988. Under Title 

VII an award of fees against a plaintiff is proper only where "a 

court finds that his claim was frivolous, unreasonable or ground­

less, or that the plaintiff continued to litigate after it clearly 

became so." Christiansburg Garment Co., supra, 98 S.Ct. at 701.
The Christiansburg Court also noted:

"In applying these criteria, it is important 
that a district court resist the under­
standable temptation to engage in post hoc 
reasoning by concluding that, because a 
plaintiff did not ultimately prevail, his 
action must have been unreasonable or with­
out foundation. This kind of hindsight 
logic could discourage all but the most air­
tight claims, for seldom can a prospective 
plaintiff be sure of ultimate success. No 
matter how honest one's belief that he has 
been the victim of discrimination, no matter 
how meritorious one's claim may appear at the 
outset, the course of litigation is rarely 
predictable. Decisive facts may not emerge 
until discovery or trial. The law may change 
or clarify in the midst of litigation. Even 
when the law or the facts appear questionable 
or favorable at the outset, a party may have 
an entirely reasonable ground for bringing 
suit." 98 S.Ct. at 700-701.

Subsequent cases have followed this standard and refused to award 

fees to defendants except in the most egregious cases. See, Dee vs. 

Institutional Newworks Corp. , 33 E.P.D. Par. 34,029 (S.D. N.Y., 

1982), 559 F.Supp. 1282; E.E.O.C. vs. Safeway Stores, Inc., 32

E. P.D. Par. 33,185 (5th Cir., 1983), 714 F.2d. 567; E.E.O.C. vs.

Pet, Incorporated, 32 E.P.D. Par. 33,902 (11th Cir., 1983), 719

F. 2d. 383; Badillo vs. Central Steel and Wire Company, 32 E.P.D.

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is left with the conclusion that counsel has engaged in a "serious 

and studied disregard for the orderly processes of justice". United 

States vs. Ross, supra., at 351. Plaintiff and her counsel re­

spectfully submit that such a conclusion cannot be reached in this 

case and the Court erred in assessing fees pursuant to 28 U.S.C.,
Sec. 1927.

11• the d i s t r i c t court e r r e d in a w a r d i n g fees a g a i n s t the p l a i n t i f f

Title VII of the Civil Rights Act of 1964, 42 U.S.C., Sec. 

2000e, et. seq., embodies a national commitment against discrimina­

tion in employment opportunities, rooted in moral, political and 

economic considerations. See Belton, "Harnessing Disretionary 

Justice In The Employment Discrimination Cases: The Moody and

Franks Standards", 44 Ohio State L.J. 571 (1983). 42 U.S.C., Sec.

1981 is a separate and distinct prohibition of racial discrimination 

in employment opportunities. Johnson Vs. Railway Express Agency,

Inc, , 421 U.S. 454, 95 S.Ct. 1716,44, L.Ed.2d. 295 (1975 ).

Title VII is usually enforced by private litigation, with Congress 

having chosen the plaintiff as the instrument to "vindicate 'a 

policy that Congress considered of the highest priority'". 

Christiansburg Garment Co. vs. E.E.O.C., 434 U.S. 412 at 419, 98 

S.Ct. 694 at 699, 54 L.Ed.2d. 648 (1978), citing Newman vs. Piggie 

Park Enterprises, 390 U.S. 400, 88 S.Ct. 964, 19 L.Ed.2d. 1263 (19- 
68 ) .

Title VII allows an award of counsel fees to the "prevailing 

party", with the standards governing an award to plaintiffs and 

defendants radically different. Christiansburg Garment Co., supra.

A companion statute with respect to fees for actions brought under

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in acts against the plaintiff which she claimed to be discriminatory. 

The inclusion of various statutory claims did not unreasonably and/or 

vexatiously multiply proceedings and no complaint was ever made that 

the statutory bases of plaintiff's action were improper. Defen­

dants' counsel was, presumably, well aware of the relief available 

under the separate statutes and the potential for liability on the 

part of the various individual defendants and counsel for plain­

tiff should not be held to a requirement that they accede to every 

demand of defendants’ counsel. This case lacks what was set by the 

Court in United States vs. Ross, supra, as the standard under 28 
U.S.C., Sec. 1927:

"Personal responsibility should,..., flow 
only from an intentional departure from 
proper conduct, or, at a minimum, from 
a reckless disregard of the duty owed by 
counsel to the court." 535 F.2d. at 349 
(Emphasis Added).

Indeed, Ross also adopted the requirement of a "clear showing of 

bad faith" in order to predicate an award under Sec. 1927 . Id. , 

at 349, citing West Virginia vs. Charles Pfizer and Co., 440 F .2d. 

1079 (2nd Cir.), cert. den., 404 U.S. 871, 92 S.Ct. 81, 30 L.Ed.2d.
115 (1971).

Counsel for plaintiff would submit that the adversarial nature 

of litigation will perforce result in disagreements between counsel 
on matters of substance and procedure, but that well-intentioned 

efforts to resolve or reduce these conflicts should not be used to 

justify an award of fees under Sec. 1927; consistent with the penal 

nature of the statute and the case law interpreting same, fees 

under Sec. 1927 should be assessed only after the Court, after a 

hearing and an opportunity for counsel to explain or justiy actions,

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prudence to name the Continental Corporation as a defendant...

Thus, the fees incurred challenging the Continental Corporation's 

status as a defendant will not be assessed either against the 

opposing party or counsel." (R. 161 at 3). However, the Court did 

just that when it assessed fees against counsel for plaintiff for 

action relative to the Pre-trial Order. The Court erred when it 

held that plaintiff's counsel refused to sign the agreed Pre-trial 

Order unless the defendants waived any right they might have to

attorney's fees", in characterizing the conduct of counsel as
3/

"pressure tactics" and opining that counsel's conduct in the pre­

mises was motivated by "£ajdesire to escape liability". Counsel 

merely reiterated that the Continental Corporation was a proper 

party to the suit, by virtue of the 1980 E.E.O.C. agreement and 

otherwise, and requested that defendants acknowledge same and, 

further, to have the Continental Insurance Company assume all re­

sponsibility which would be attributable to the Corporation; this, 

defendants’ counsel failed to do. The failure of defendants to 

substitute the Company for the Corporation in this regard was con­

trary to Rule 17, Federal Rules of Civil Procedure, and cannot be 

laid at the feet of plaintiff or her counsel.

Similarly the inclusion of the various individual defendants 
was proper insofar as said individual defendants had participated

Counsel for plaintiff submits that this characterization is further 
erroneous and unsubstantiated particularly in light of the absence 
of a factual record in support of same.

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B . Plaintiff's Counsel Did Not Unreasonably And 
Vexatiously Multiply The Proceedings

The assessment of fees against plaintiff's counsel was 

predicated upon matters connected with defendant's motion to dismiss 

and the pre-trial Order entered in the case. Defendants' Motion 

To Dismiss (R. 6) was filed and plaintiff filed her response there­

to (R. 15); the Motion was reserved pending discovery (R. 18). Ul­

timately, the claims against the Continental Corporation were dis­

missed. (R. 145). Similarly, the disagreement between counsel over 

the pretrial Order related to the joinder of Continental Corporation. 

Pursuant to Rule 11, Local Rules of Court, counsel for plaintiff 

certified to the Court the efforts made to enter an Agreed Order 

(R. 58) and, further, moved the Court to enter the Order tendered 

by plaintiff's counsel (R. 59); the Court again reserved entry of 

the Order (R. 62) . Despite the disagreement with the pre-trial 

Order, counsel for the parties were able to file Stipulations with 
the Court. (R. 72, 74).

As set forth in the Affidavit of Richard H. Dinkins, one of 

plaintiff's counsel, filed in support of plaintiff's (and her counsel's) 

Motion For A New Trial And/Or To Alter Or Amend, (R. 169 ), the

negotiations relative to the pre-trial Order were carried out on 

behalf of plaintiff in an effort to respond to the concerns raised 

by defendants, while, at the same time, representing the interests 

of plaintiff. As the District Court noted in its January Memorandum 

(R. 161), "  C TJ  he Court agrees that the manner in which the 1980 

E.E.O.C. settlement agreement was executed, coupled with other cir­

cumstances in this case, would have led counsel of reasonable

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States, have recognized the necessity of notice and opportunity 

to be heard prior to the assessment. In Roadway Express, Inc, vs

_PiPes» 447 U -S. 752 , 100 S.Ct. 2455, 65 L.Ed.2d. 488 (1980), the 
Court noted:

"...attorney’s fees certainly should not be 
assessed lightly or without fair notice 
and an opportunity for hearing on the 
record." 10 S.Ct. at 2464 (footnote omitted).

Similarly, the Court in Miles vs. Dickson, 387 F.2d. 716 (5th

Cir., 1967), held at p. 717 that " £ t } o assess the costs against

the attorney without notice and a hearing was, of course, wrong",

and the Court in Glass vs. Pfeffer, 657 F.2d. 252 (10th Cir., 1981)
held:

"Although it is apparent from the Orders in 
this case that the District Court found the 
conduct of plaintiff's counsel constituted 
bad faith and abuse of process, the safeguards 
of notice and opportunity for hearing were not 
afforded before the assessment was made against 
him." 657 F.2d. at 258 (footnote omitted).

Indeed, the Sixth Circuit in United States vs. Ross, 535 F.2d. 346

(1976) adopted the "serious and studied disregard for the orderly

process of justice" standard set forth in Kiefel, supra., and,

further, held that " M  ecause Sec. 1927 is penal in nature, we

believe that it should be strictly construed...". 535 F.2d. at
350.

The failure of the District Court to hold a hearing on the 

issues raised under 28 U.S.C., Sec. 1927 constitutes clear error 

and, as more fully set forth infra., was prejudicial to plaintiff's 

counsel. The assessment, therefore, should be reversed. See also, 

Textor vs. Board of Regents, 32 E.P.D. Par. 33,729 (7th Cir., 1983), 
711 F .2d. 1387.

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BRIEF AND ARGUMENT

I. THE DISTRICT COURT ERRED IN ASSESSING FEES AGAINST COUNSEL FOR 
PLAINTIFF PURSUANT TO 28 U.S.C., SEC."1^27.--------------------

A. The District Court Erred In Not Holding An 
Evidentiary Hearing Prior i'o The Assessment

28 U.S.C., Sec. 1927 as well as its predecessor statutes

have traditionally given the Federal Courts a statutory recourse

to penalize attorneys who have engaged in a "serious and studied

disregard for the orderly process of justice," Kiefel vs. Los

Vegas Hacienda, Inc., 404 F.2d. 1163, 1167 (7th Cir., 1968), by

taxing them with the excess costs occasioned by such misconduct.

Since 1980, the Courts have been expressly empowered to award

excess attorneys fees under this provision as well.

Section 1927 currently reads as follows:

"Any attorney or other person admitted to 
conduct cases in any court of the United 
States or any Territory thereof who so 
multiplies the proceedings in any case 
unreasonably and vexatiously may be re­
quired by the court to satisfy personally 
the excess costs, expenses, and attorney's 
fees reasonably incurred because of such 
conduct. ('Emphasis Added).

The statute, at the very least, appears to require two threshhold 

findings before any fees or costs whatsoever can be assessed:

1. The attorney has multiplied the proceedings, and

2. The attorney has done so unreasonably and vexatiously. 

Then, after this threshhold has been crossed, the Court must de­

termine the "excess" costs and attorney's fees resulting from the 
attorney's conduct.

In determining the propriety of an assessment under 28 U.S.C., 

Sec. 1927, courts, beginning with the Supreme Court of the United

-14-



U.S.C., Sec. 1927 (id. at 4), finding that the alleged failure of 

counsel to separate the Title VII and 42 U.S.C., Sec. 1981 claims 

to the satisfaction of counsel for defendants was a vexatious 

multiplication of proceedings. The Court further assessed fees 

against plaintiff for time spent by counsel for defendants in de­

fending the termination claim, although it denied fees for retali­

ation claims other than her termination, finding that said claim 

was not frivolous. (id. at 4-5). No reference was made in either 

the January or March, 1985, Memoranda of the Court to either of the 

Affidavits of independent counsel who reviewed the pleadings at the 
request of plaintiff's counsel.

-13-



textual in light of the following facts, in addition to the aforesaid 

refusal of defendants to respond to plaintiff's request for reassign­
ment :

(a) The testimony of Price that neither she nor anyone 

at the Brandon Agency ever requested or demanded the termination of 

plaintiff, only that they desired to be assigned another Underwriter; 
(T. 831, 382)

(b) The acknowledgement of Price in her testimony that 
she and Mr. Lyell used profane and hateful language in the course 

of business and that same was objected to by various persons, in­
cluding the plaintiff; (T. 835)

(c) The fact that plaintiff was not afforded an oppor­

tunity to explain said statement prior to the determination having 
been made to terminate her; (T. 752)

(d) The fact that for the proceeding four years, the 

Brandon Agency business with defendants had consistently declined;
(T. 821-816)

(e) The fact that defendants' alleged excuse at trial 
that said letter would cause loss of the client's business was un­

supported by substantial evidence of any other kind.

As aforesaid, the determination of defendants' Petition for 

Fees was made and done without an evidentiary hearing or argument 

and solely on the basis of Affidavits of counsel. Defendants sought 

fees for time spent in connection with defendants’ motion to dismiss 

the original Complaint, certain incidents of retaliation prior to 

plaintiff's termination and the termination itself. (R. 161 at 2). 

The Court assessed fees against plaintiffs' counsel pursuant to 28

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said problems or to move plaintiff to an available, and more con­
ducive, location. (T. 716-721)

(d) The assignment of plaintiff to the Jack Brandon

Agency and the Crump Agency Accounts, the two most troublesome agencies 

in the office and the failure and refusal of defendants, Farmer, Winsett 

and Brown, to reassign plaintiff as a result of racially oriented dis­

courtesy and mistreatment by personnel in said agencies, including 

the reference to plaintiff as a "God Damn Nigger" by Raymond Lyell, 

an official of the Jack Brandon Agency. (T. 741)

(e) Condoning and encouraging the bypassing of plaintiff 

in her contacts with agents and agencies on matters relative to 

policies being written by plaintiff, in preference to white Company 
personnel. (T. 819-830, 850, 851)

Due to said conduct of defendants in the premises, plaintiff 

was constrained to write a letter to Ms. Beth Price, an official 

of the Brandon Agency, which letter, inter alia, suggested that plain­

tiff and Price work together without the "hate and prejudices" 

which characterized said Agency's contacts with plaintiff and about 

which she had complained, without result, to defendants. (Ex. D-AL) 

Following the writing of this letter, plaintiff was summarily termi­

nated by defendants upon the false allegations that plaintiff's action 

in the premises might result in the loss of approximately one and one
yhalf million dollars of business. Said allegation was clearly pre-

u
No official of the Company ever actually testified as to the reason 

for Mrs. Jones termination by them but Price testified that the Brandon 
Agency did "about a million and a half dollars" with Continental.
(T. 804)

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of plaintiff's prosecution of this case and in a manner which was in­

consistent with the treatment afforded white employees. Specific 

examples of said pattern of harassment were as follows:

(a) The false and malicious accusation by defendants 

Taylor and Brown that plaintiff was soliciting, on Company time, the 

sale of Amway Products, while the evidence showed that a co-worker of 

plaintiff had requested to see a catalog of products and was advised 

by plaintiff to wait until a break to review same. There was further 

proof that numerous white employees, including Helen Starnes, Teresa 

McKee and Phyllis Scroggs, had engaged in the actual sale of goods 

(including but not limited to "anatomically correct" dolls) on 

Company time and Company property, with knowledge of supervisors and 
without discipline. (T. 653-655)

(b) Plaintiff being called to the office of defendant 

Winsett and falsely accused of violating a prior directive not to 

assist in the training of Carolyn Hatcher, a black employee. Plaintiff 

had never been given such a directive. (T. 704-713) Moreover, de­

fendant, Danny Reed, who likewise participated in said meeting with 

plaintiff, had refused to comply with a directive to train Ms. Hatcher 

without punishment or other adverse action taken by defendants, there­

by also reflecting defendants' prejudicial attitudes and policies 

towards the training of black employees. (T. 704-713)

(c) After an April 1983 physical reorganization and con­

solidation of the Casualty and Multi-Peril Departments, plaintiff’s 

desk being placed in a corner beside a post with her back to all 

white workers and facing a cubicle wall, with insufficient lighting 

to perform her responsibilities; and defendants' failure and refusal, 

despite repeated requests by plaintiff and her counsel, to correct

-10-



- same. As a result of the transfer of Brown, plaintiff was effectively

cut off from advancement at the Company. The placement of Brown as 

Supervising Underwriter in preference to plaintiff is substantially 

similar to the treatment of Jackie Humphreys, a black employee, who 

was employed as Accounting Clerk at Company, and denied the opportunity 
for promotion to the position of Supervisor in favor of Barbara 

Johns, a white person, who transferred to the Nashville Office in 

the supervisory position. (T. 500-504) The District Court found that 

plaintiff had established a prima facie case of discrimination in the 

failure to be promoted into the supervisory position awarded to Brown.

The placement of Brown into said Nashville position was 

carried out through defendants’ Regional Office in Dallas, Texas, 

by and through Barsanti. Brown, likewise, did not interview with 

any of the defendants' personnel in Dallas for the Nashville position. 
(Tr. 503)

Throughout her employment as Underwriter Trainee, Associ­

ate Underwriter and Underwriter, plaintiff was denied opportunities 

for training and other experience, including, but not limited to, 

training at the Continental’s New York Training facility and the 

exclusion of plaintiff from contact with various insurance agents in 

meetings and social functions sponsored by defendant. (T. 288-304) 

Throughout her employment as Underwriter Trainee and Under­

writer, plaintiff not only handled the problem accounts and agents, 

but also consistently assisted her colleagues in the performance of 

their job responsibilities. (T. 1-228)

Following the recess in the trial of this case in February 

1983, plaintiff was subjected to what can only be described as a 

pattern of harassment by the original defendants, acting by and through 
certain added defendants, said harassment being carried out on account

- 9-



Underwriter following his return to Nashville from his initial 

training at the Continental New York facility. (T. 149) Similarly, 

Donna Manning, a white person hired after plaintiff, was made Under­

writer Trainee in May of 1979, and Senior Underwriter in May of 1981. 

(Ex. P-147) Plaintiff was promoted to Associate Underwriter in the 

Commercial Casualty Department effective 3 November 1980, and Under­

writer effective 4 May 1981, a position which she held until her 

termination in May of 1983. (T. 230)

Prior to July 1981, work of Underwriters in Continental 

Casualty Department was divided into two geographical territories, 

one covering Middle Tennessee, and the other covering East and West 

Tennessee; each territory had a Supervising Underwriter. Reed 

was the Supervising Underwriter of Territory 1 (Middle Tennessee); 

Raymond Barlow, hereafter Barlow, was the other Supervising Under­

writer. Farmer was the Department Manager. (Ex. P-153) Due to the 

increased volume of business which had to be completed in specific 

time periods (10 days for a new business and 90 days ahead of time 

for renewals), plaintiff consulted with Reed about the possibility 

of adding additional personnel, including a Supervising Underwriter, 

in the department. (T. 305) Approximately two months later the 

Department was reorganized and an additional territory and concornitent 

Supervising Underwriter position was added. Although plaintiff was 

fully qualified for a promotion into the Supervising Underwriter 

position, Carol Brown, hereafter Brown, a white person who had resigned 

from her employment in Company's San Francisco Office to move to 

Kentucky to be with her family, was offered said position. Brown never 

applied nor was interviewed for said position and had tendered her 

resignation to her Supervisor in San Francisco prior to being offered

-8 -



Ms. Bessie Henderson, the white former Supervisor of plaintiff when 

plaintiff was a Rater, recommended to Mr. Glenn Everson, Manager 

of Office Services, that Mrs. Jones be promoted to an Underwriting 

position. (T. 160) Further, at Mr. Everson's behest, plaintiff 

attended a Training Seminar which Mr. Everson represented would be 

beneficial to plaintiff in respect to promotional opportunities and 

salary increases; upon return from the Seminar, plaintiff made a 

presentation of information received at the Seminar to Raters and 

Underwriters in the Nashville Office. (T. 246-247)

As a result of being consistently passed over for a promotion 

into an Underwriting position, plaintiff complained to Ms. Paulette 

Winsett, Human Resources Representative, around July of 1979. Plain­

tiff specifically complained of racial discrimination in the failure 

and refusal of defendant to promote not only herself, but other black 

employees to Underwriting positions on an equal basis with white 

persons. (T. 235) While white persons were hired or promoted into 

said positions without college degrees, Ms. Zenobia Wade, a black 

person with a BA Degree in Mathmatics, was hired by Continental as 

a Rater and promoted to Underwriter, a position she held for six 

years before resigning because of lack of promotional opportunities. 

Indeed, the passing over of Ms. Wade in connection with the planned 

promotion of a less qualified white person, Kellar Chapman, to the 

Supervising Underwriter position, caused her to abandon her interest 

in the position and, ultimately defendants employ. (T. 62-70)

Plaintiff consistently made application for the Underwriting 

position, both oral and written, and was made Underwriter Trainee 

finally in August, 1979. (T. 230) However, Larry Sullivan, the

white employee hired out of college after plaintiff, was made full

-7-



Despite plaintiff’s expressed interest in and qualifications 

for promotion to the position of Underwriter at Continental Insurance 

Company, she was consistently passed over for promotion to an Under­

writing position, in favor of less qualified white persons. Larry 

Sullivan, a white employee, was hired upon his graduation from college, 

with no prior insurance experience or any job experience other than 

summer employment, into the position of Underwriter Trainee, the entry 

level Underwriter position at Continental. (T. 148-150) Donna 

Manning, a white female with no prior experience, was hired as Under­

writer Trainee. Holly Hartung, a white person, was promoted into the 

Underwriter position from Rater; Ms. Hartung was hired after plaintiff, 

initially into the File Department. Jan Brown, a white person, was 

initially employed at Continental as a Rater and was trained in the 

position by plaintiff; Ms. Brown, however, was promoted to Underwriter 

Trainee, while plaintiff was retained in the Rater position. Michael 

Martin, a white person hired as Rater after plaintiff, likewise was 

promoted to Underwriter Trainee before plaintiff. Pat Phipps, a 

white person employed approximately one month prior to plaintiff with 

prior experience as Insurance Clerk at hospitals in Knoxville and 

Memphis, Tennessee, was hired as a Rater with Continental and took 

maternity leave approximately one year after her employment. Upon her 

return from maternity leave, she was placed in the position of Under­

writer Trainee. (T. 32-40, 100-109, 237-240)

In connection with the performance of her responsibilities 

throughout her employment at Continental, plaintiff trained other 

employees and enjoyed the unanimous opinion of her co-workers as being 

helpful, capable, knowledgeable and efficient. (T. 1-228) Indeed,

-6-



Defendants, Bud Meulemans, hereafter Meulemans, Paulette 

Winsett, hereafter Winsett, Tommy Farmer, hereafter Farmer, Carol 

Brown, hereafter Brown, Danny Reed, hereafter Reed, and Peggy Taylor, 

hereafter Taylor, are respectively District Manager, Human Resources 

Director, Commerical Casualty Lines Manager, Commercial Casualty 

Lines Supervising Underwriter, Commercial Casualty Lines Senior 

Underwriter, and Underwriter in Company's Nashville Office. Defendant,

R. R. Barsanti, hereafter Barsanti, is Company's Regional Manager in 

Dallas, Texas. All of said individually named defendants are white 
persons.

On or about 3 June 1980, plaintiff filed a Charge of racial 

discrimination in employment opportunities against the defendants, Cor­
poration and Company, with the Equal Employment Opportunity Commission.

(T. 277, Ex. D-L) As a result of said Charge, the parties entered 

into a settlement which provided, inter alia, that plaintiff would 

receive a $1,000.00 raise in pay. Said agreement also stated that plain­

tiff would not be the object of retaliation as a result of the pro­

secution of said Charge of Discrimination. (T. 287, Ex. D-L)

Prior to her employment at Company's, Nashville Office, 

plaintiff had been employed as a Rate and Code Clerk at the Nashville 

Office of the Travelers for approximately six years. While Rate and 

Code Clerks (hereinafter "Raters") at Company only rate and code 

policies and set them up for writing, Raters at Travelers had 

significantly more responsibility, particularly checking, reviewing 

and approving certificates of insurance, reviewing flat cancellation 

of policies, cancelling policies, corresponding with agents and 

experience rating. Said additional responsibilities of Traveler's 

Raters were performed by Underwriters at Company. (T. 231-233)

-5 -



June 1966 until April 1977 and held the position of Rate and Code 
Clerk with Travelers. (T. 229-231).

Company is a subsidary of defendant, Continental Corporation, 

hereafter Corporation. (Ex. D-AJ) The negotiated settlement agree­

ment entered into as a result of plaintiff's 1980 EEOC Charge was 

executed on behalf of respondent therein by "Melvin Katzman, The Con­

tinental Corporation" (Ex. D-L) Said Corporation exercises extensive 

control over each of its subsidiaries and treats all their employees
t • yas being employees of "Continental Corporation."

T7 *-------------
The annual report of said Corporation (Ex. D-AJ) states, inter 

alia: -----
~Tl) "At December 31, 1981, Continental Corporation had 21,142 

employees world wide," (page 8);
(<-) Management information data relating to human resources are 

available promptly and in greater detail through increased computer 
capability." (Id.); F

(3) "Job posting is being phased in, and we continue to enlarge 
the application of the "flextime" option." (Id.);

(4) The result will be greater coordination among applications 
programming, computed operation and corporate staff as we move into a new 
era of "on-line" communication between agents and broker/branch/field 
sales and supervisory offices." (Id.);

(5) There is no segment of the public or the business community 
for which we do not have insurance products or services or both, and 
usually in a number of combinations or forms." - John B. Ricker, Jr. 
(Chief Executive Officer, page 17);

(6) "The consolidated financial statements are presented in accord­
ance with generally accepted accounting principles and include the 
accounts^of Continental and all its subsidiaries." (page 24);

(7) "The company has a noncontributory retirement plan for qualified 
officers and employees of Continental and certain of its affiliated com­
panies . ” (Id .) ;

(8) "The company provides property and casualty insurance, rein­
surance, life and health insurance, title insurance and insurance re­
lated in other types of financial services. The property and casualty 
subsidiaries form the largest segment of operations and contributed 
approximately 79-6 of the company's consolidated revenues for the past 
three years." (page 29).

-4-



STATEMENT OF THE FACTS

The instant case is an action pursuant to Title VII of the 

Civil Rights Act of 1964, 42 U.S.C., Sec. 2000e et seq., and 42 

U.S.C., Sec. 1981, originally to recover for alleged discrimination 

in employment opportunities on the basis of race and subsequently 

amended to complain of the action of defendants in terminating the 

plaintiff following a recess in the trial of the case.

On 29 June 1984, the Court entered its Memorandum Opinion and 

Order, entering judgment for the defendants and dismissing the case. 

Thereafter, defendants petitioned the Court for an award of counsel 

fees and costs in the total sum of $25,371.50, to which Petition 

plaintiff filed her response, including the Affidavits of two ex­

perienced and reputable members of the Tennessee Bar, experienced in 

civil rights litigation, as well as the Affidavits of plaintiff's 

counsel. The Memorandum and Order of 23 January assessed counsel fees 

and costs against plaintiff and counsel fees against plaintiff's 

counsel; the Memorandum and Order of the Court entered on 22 March 

1985 overruled and denied plaintiff and her counsel's Motion For A 

New Trial And/Or To Alter Or Amend said January Judgment. No hearing 

or argument was held on said application for counsel fee or response 
thereto.

Gwendolyn Jones, plaintiff, is a black woman and a resident 

of Antioch, Davidson County, Tennessee. She was employed initially 

by defendant, Continental Insurance Company, hereafter Company, at 

its Nashville, Tennessee, Branch Office on or about 5 May 1977 in 

the position of Rate and Code Clerk at starting salary of $160.00 

per week. She previously had been employed by the Travelers Insurance 

Company, hereafter Travelers, Nashville, Tennessee, Office, from

I I  . _______________________

-3 -



I . STATEMENT OF THE CASE

The instant case is an appeal from certain Orders of the 

Honorable L. Clure Morton, United States District Judge for the 

Middle District of Tennessee, entered 23 January 1985 and 22 March 

1985 assessing counsel fees incurred by defendants against counsel 

for plaintiff in the amount of $5,414.50, assessing defendants 

attorneys fees against the plaintiff in the amount of $4,740.25 

and assessing costs against the plaintiff in the amount of $6,540.15 

There is presently pending before this Honorable Court plaintiff's 

appeal from the decision on the merits in this action pursuant to 

42 U.S.C., Sec. 2000e et seq. and Section 1981, and said case bears
No. 84-5658.

-2-



STATEMENT OF THE ISSUES

1. Did the District Court err in awarding defendants counsel fees 
in the total sum of $10,154.75?

2. Did the District Court err in assessing a portion of the counsel 

fees awarded to defendants against plaintiff's counsel?

3. Did the District Court err in denying plaintiff’s request for 

a hearing on defendants' application for counsel fees?

4. Did the District Court err in assessing costs in the amount 
of $6,540.15 against plaintiff?

-1-



Cont.

Cases Pages
West Virginia vs. Charles Pfizer and Co. 440 F.2d. 1079 

(2nd Cir.j, certTden. 404 U.S. 871 , 92 S.Ct. 81, 30 
L . Ed. 2d . 115“TT97lTrr.................................  18

STATUTES

28 U.S.C., Section 1927 .................................... 13,14,1 5,18,1 9

42 U.S.C., Section 1981....................................  2,3,13,19,20

42 U.S.C., Section 1988 ....................................  20

42 U.S.C., Section 2000e et seq...........................  2,3,19,

OTHER AUTHORITIES:

Rule 17, Federal Rules of Civil Procedure................  17

Rule 11, Local rules of Court.............................  16



TABLE OF AUTHORITIES

Cases Pages

Badillo vs. Central Steel and Wire Company, 32 E.P.D.
Par. 33,837 (7th Cir., 1983) 717 F.2d. 1160.......  21

Beard vs. Annis, 34 E.P.D. Par. 34,318 filth Cir.
~T984)'....... .................................... 21

Burris vs. Davidson Transfer and Storage Company. 32 
“ E.P.D. Par". 33,74 O' TD 7 C . Del .“ 98 2) ? .... .........  21

Carrion vs. Yeshiva University, 535 F.2d. 722 f2nd
Cir., 1976)................ .........................  23

Christiansburg Garmet Co. vs. E.E.O.C., 434 U.S. 412
at 419, 98 S.Ct. 694 at 699, 54 L.Ed.2d. 648 (1978) 19,20,22,24

Dee vs. Institutional Networks Corp., 33 E.P.D. Par.
"34,029 (S.D. N.Y. 1982) 559 F . Supp. 1282 ........... 20

E.E.O.C. vs. Pet, Incorporated, 32 E.P.D. Par. 33,902 
(11th Cir., 1983) 719 F.2d. 383 ....................  20

E.E.O.C. vs. Safeway Stores, Inc., 32 E.P.D. Par.
33,1 85 (5th Cir., 1 983) 714 F.2d. 567 ..............  20

Glass vs. Pfeffer, 657 F.2d. 252 (10th Cir., 1981)... 15

Johnson vs. Railway Express Agency, Inc., 421 U.S.
454 , STCtT L . Ed . 2d . (T9“— JT7.............. 19

Kiefel vs. Los Vegas Hacienda, Inc., 404 F.2d. 1163,
1167 (7th Cir . , 1968)...............................  14,15

Lewis vs. Brown $ Root, Inc., 32 E.P.D. Par. 33,761
(5th Cir. , 1983) 7ll F.2d. 1 287)....................  21

Miles vs. Dickson, 387 F.2d. 716 (5th Cir., 1967).... 15

Newman vs. Piggie Park Enterprises, 390 U.S. 400, 88
S.Ct. 964 , 19 L . Ed . 2d . 1 263 (19 ) ................  19

Price vs. Pelka, 690 F.2d. 98 (6th Cir., 1982)......  23

Roadway Express, Inc. vs. Pipes, 447 U.S. 752, 100 S.Ct.
2455, 65 L.Ed.2d. 488 (1980)........................ 15

Smith vs. Smythe-Cramer Co. 754 F.2d. 180 (6th Cir.,
1985).... ............................................. 20,21,23

Textor vs. Board of Regents, 32 E.P.D. Par. 33,729 
' (7th Cir. , 1983) 711 F.2d. 1387 ......................  15

United States vs. Ross, 535 F.2d. 346 (1976)..........  15,18,19



DISCLOSURE OF CORPORATE AFFILIATIONS 
AND FINANCIAL INTEREST

s

Pursuant to Sixth Circuit Rule 25, Gwendolyn Jones and 

Williams and Dinkins make the following disclosure:

1. They are not subsidiaries or affiliates of a 
publicly owned corporation.

2. No publicly owned corporation, not a party to 
this appeal, has a substantial financial in­
terest in the outcome that should be disclosed.

t
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INDEX>
TABLE OF AUTHORITIES......................................... i-ii*
STATEMENT OF THE ISSUES...................................... 1

I. STATEMENT OF THE CASE.................................... 2
II. STATEMENT OF THE FACTS.................................. 3

BRIEF AND ARGUMENT........................................... 14
I. THE DISTRICT COURT ERRED IN ASSESSING FEES AGAINST 

COUNSEL FOR PLAINTIFF PURSUANT TO 2B U.S.C.. SEC. 
l~P27.............'....... .~TT.'...... •.......... ....... 14
A. The District Court Erred In Not Holding An

Evidentiary Hearing Prior To The Assessment........  14
B- Plaintiff's Counsel Did Not Unreasonably And

Vexatiously Multiply The Proceedings................  16
II. THE DISTRICT COURT ERRED IN AWARDING FEES AGAINST THE

plaintiff ............................... TTTT....... '............. ;t .T7. ___ 19
III. THE DISTRICT COURT ERRED IN ASSESSING COSTS AGAINST

v  plaintiff........................................ ....  2s
1

>  CONCLUSION................................................... 25
CERTIFICATE OF SERVICE....................................... 25
APPENDIX....................................................  A

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