Mahoney v. Crocker National Bank

571 F. Supp. 287, 114 L.R.R.M. (BNA) 2590, 1983 U.S. Dist. LEXIS 14071, 33 Empl. Prac. Dec. (CCH) 34,179, 32 Fair Empl. Prac. Cas. (BNA) 1482
CourtDistrict Court, N.D. California
DecidedSeptember 2, 1983
DocketC-82-4178 RPA
StatusPublished
Cited by34 cases

This text of 571 F. Supp. 287 (Mahoney v. Crocker National Bank) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mahoney v. Crocker National Bank, 571 F. Supp. 287, 114 L.R.R.M. (BNA) 2590, 1983 U.S. Dist. LEXIS 14071, 33 Empl. Prac. Dec. (CCH) 34,179, 32 Fair Empl. Prac. Cas. (BNA) 1482 (N.D. Cal. 1983).

Opinion

OPINION AND ORDER

AGUILAR, District Judge.

This action is before the Court on motions for partial summary judgment brought by both parties.

Background

Plaintiffs, Valdean Mahoney and Philip S. Culcasi, brought this action on behalf of themselves and a class of all other persons similarly situated pursuant to the Age Discrimination in Employment Act, 29 U.S.C. §§ 621 et seq. Plaintiffs seek damages and injunctive relief on account of defendant Crocker National Bank’s alleged acts of age discrimination.

Named plaintiffs claim that each were discharged from their positions with Crock-er solely on account of their age. Mahoney was fifty-three years old when she was discharged from her position as assistant branch manager at Crocker’s Ukiah branch. Culcasi was forty-eight when he was discharged from his position as branch lending manager, a position to which he had recently been demoted, at Crocker’s Vallejo branch. Culcasi had previously been the senior commercial lending officer at the Vallejo branch, and prior to that had been vice president and manager of Crocker’s Fruitvale branch. For both of his positions at the Vallejo branch Culcasi retained his vice president status. Each contend that they were performing their duties in a competent and loyal fashion before they were discharged and that they were each replaced by persons under the age of forty.

Named plaintiffs represent a class defined as:

All Crocker branch management personnel in Crocker District II who were demoted, discharged, forced into retirement, or otherwise discriminated against with respect to the terms, conditions, or privileges of their employment because of their age, and who were over 40 years of age at the time of the discrimination. Such branch management personnel include, without limitation, branch managers, assistant branch managers, branch commercial lending managers, branch operations managers, business banking center managers, and commercial lenders and employees with similar duties in Crocker District II.

Named plaintiffs also bring pendent state law claims against Crocker for the alleged acts of discrimination taken against them. Specifically, Mahoney and Culcasi bring claims for relief for: breach of implied obligations of their employment contracts; breach of the covenant of good faith and fair dealing; wrongful discharge; and, age discrimination in violation of California Government Code section 12941. Culcasi also asserts claims for illegal retaliation in violation of federal and state law, and negligent infliction of emotional distress.

The Current Motions Before the Court

Mahoney as assistant manager and Culcasi as vice president and manager and then *289 lending manager, were considered by Crocker to be “officers” of Crocker. Accordingly, in its answer to plaintiffs’ complaints, Crocker asserted as its Tenth Affirmative Defense that named plaintiffs’ state law claims for breach of the employment contracts, breach of the covenant of good faith and fair dealing, and wrongful discharge, were barred by that portion of the National Bank Act which permits banks to dismiss its officers “at pleasure.” 12 U.S.C. § 24, Fifth.

Crocker now moves for summary partial judgment as to these three claims for relief based upon the National Bank Act defense. Plaintiffs bring a cross motion for summary judgment with respect to defendant’s affirmative defense, contending that the National Bank Act does not bar these state law claims.

By its motion for partial summary judgment Crocker also asserts that plaintiffs’ pendent claim for wrongful discharge is preempted by the California Fair Employment and Housing Act, which constitutes the exclusive remedy in California for age discrimination.

The National Bank Act Defense

12 U.S.C. section 24, Fifth of the National Bank Act provides:

... a national banking association ... shall have power — to elect or appoint directors, and by its board of directors to appoint a president, vice president, cashier, and other officers, define their duties, require bonds of them and fix the penalty therefor, dismiss such officers or any of them at pleasure, and appoint others to fill their places.

(Emphasis supplied.)

By virtue of this provision of the National Bank Act, a board of directors may dismiss an officer prior to the expiration of his or her term of employment without incurring liability for breach of contract or wrongful discharge. See, e.g., Kozlowsky v. Westminster Nat’l. Bank, 6 Cal.App.3d 593, 596, 86 Cal.Rptr. 52 (1970); Kemper v. Worcester, 106 Ill.App.3d 121, 62 Ill.Dec. 29, 31,435 N.E.2d 827, 829 (1982).

Plaintiffs contend that the National Bank Act does not preclude any of their claims because the phrase “other officers” as used in section 24, Fifth must be construed to apply only to senior officers, and not to the lower echelon officers, such as Mahoney and Culcasi, that now exist in modern branch banking. Plaintiffs further contend that even if the phrase “other officers” is interpreted to include officers such as plaintiffs, defendants cannot invoke the dismissal at pleasure defense of the National Bank Act because plaintiffs were not appointed and discharged in the manner required to gain the protection from liability afforded by the Act for wrongful terminations.

If plaintiffs’ assertions are correct that they were not hired and fired as required for the National Bank Act to preclude their claims, the Court need not resolve the more difficult issue, involving a significant question of policy, of whether the dismissal at pleasure provision of the Act should be applied to the types of officers present in modern day branch banking. Therefore, the question of the procedure used in appointing and dismissing plaintiffs, and the effect of the procedures used on Crocker’s ability to invoke the dismissal at pleasure defense, will be discussed first by the Court.

The Appointments

Plaintiffs contend that they were not appointed to their positions as officers in the manner required by the National Bank Act. Therefore, plaintiffs cannot be considered officers and therefore are not subject to the dismissal at pleasure provision of the Act applicable to the dismissal of officers.

Crocker’s procedure for appointing officers is set forth in Article VI, § 1 of its bylaws: 1

Senior officers shall be appointed by the Board of Directors and other officers may be appointed by the Board of Directors or the Chairman of the Board or by such *290 person or persons as the Board may designate. 2

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Bluebook (online)
571 F. Supp. 287, 114 L.R.R.M. (BNA) 2590, 1983 U.S. Dist. LEXIS 14071, 33 Empl. Prac. Dec. (CCH) 34,179, 32 Fair Empl. Prac. Cas. (BNA) 1482, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mahoney-v-crocker-national-bank-cand-1983.