Mercado Garcia v. Ponce Federal Bank

• Court: Court of Appeals for the First Circuit
• Decided: November 19, 1992
• Docket: 91-2296
• Status: Published

Opinion

USCA1 Opinion

November 19, 1992
                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

No. 91-2296

                              JULIO A . MERCADO-GARCIA,
                            MARIA DEL CARMEN AVILA MUGICA,
                           AND THEIR MARITAL CONJUGALSHIP,

                               Plaintiffs, Appellants,

                                          v.

                             PONCE FEDERAL BANK, ET AL.,

                                Defendants, Appellees.

____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                           FOR THE DISTRICT OF PUERTO RICO

                    [Hon. Raymond L. Acosta, U.S. District Judge]
                                             ___________________

                                 ____________________

                                        Before

                                 Breyer, Chief Judge,
                                         ___________
                        O'Scannlain,* and Cyr, Circuit Judges.
                                               ______________

                                 ____________________

            Pia  Gallegos with  whom Harry  Anduze  Montano  was on  brief for
            _____________            ______________________
        appellants.
            Gregory  T.  Usera  with  whom  Goldman  Antonetti  Ferraiuoli   &
            __________________              __________________________________
        Axtmayer was on brief for appellees.
        ________

                                 ____________________

____________________

        _____________________

        *Of the Ninth Circuit, sitting by designation.

O'SCANNLAIN, Circuit Judge:  In this case involving 
                    O'SCANNLAIN  _____________

           claims  of age and employment discrimination we must resolve 

           several issues of first impression.

I

                    Julio Mercado-Garcia ("Mercado")  was  fifty  years 

           old  and  had  been  in the employ of the Ponce Federal Bank 

           ("the Bank") for eleven years when he  was  discharged  from 

           his  position as Vice President for Human Resources in 1988.  

           The final  year  of  his  tenure  had  not  apparently  been 

           pleasant.   Mercado says that his problems began in November 

           1987 when he refused to accede to his  supervisor's  request 

           that  he  falsify certain personnel records.  By his refusal 

           to act in a  manner  he  believed  to  be  illegal,  Mercado 

           allegedly    precipitated    a   campaign   of   harassment, 

           intimidation, and discrimination against himself.

                    Eventually Mercado was asked, and asked  again,  to 

           submit   his   resignation.    When  he  refused,  the  Bank 

           terminated his employment.  A letter from the  Bank  reached 

           Mercado  on  October  13,  1988,  confirming  his  discharge 

           effective September 30, 1988.  He alleges, however, that his 

           ill  treatment  at  the hands of the Bank did not end there, 

           for the Bank, assertedly without cause,  promptly  cancelled 

           his VISA card and prematurely called a loan he had taken out 

           from the Bank.  In addition, says Mercado, the  Bank  failed 

           to provide him timely notice of his rights to continue under 

2

the Bank's  health  and  life  insurance  policies,  thereby 

           causing him to lose coverage.

                    Mercado  filed  his  complaint in this case in July 

           1989  alleging  violations  of  the  Age  Discrimination  in 

           Employment  Act, 29 U.S.C.    621-634 ("ADEA"), the Employee 

           Retirement Income  Security  Act,  29  U.S.C.      1001-1461 

           ("ERISA"),1  the  Equal Credit Opportunity Act, 15 U.S.C.      

           1691-1691f ("ECOA"), and  the  Consolidated  Omnibus  Budget 

           Reconciliation  Act,  29  U.S.C.    1161-1168, ("COBRA"), as 

           well as a federal breach  of  contract  claim2  and  pendent 

           state law causes of action.  In the district court, the Bank 

           prevailed on all claims, some  by  dismissal  under  Federal 

           Rule  of  Civil  Procedure  12(b)(6)  and others by grant of 

           summary judgment.  Mercado timely appealed.  

II

                    We turn first to Mercado's claim  under  the  ECOA.  

           Section 701 thereof provides as follows:

                    (a)  It  shall be unlawful for any creditor to 
               discriminate against any applicant, with respect to 
               any aspect of a credit transaction --  

______________________
          1    On appeal, Mercado has asserted no error  in  connection 
          with  the  district  court's dismissal of his ERISA claim for 
          interference with retirement  benefits  in  violation  of  29 
          U.S.C.   1140.  We therefore deem any such argument waived. 

          2    The district court had original  jurisdiction  over  the 
          federal  questions  presented  in  this  case  pursuant to 28 
          U.S.C.   1331.  See  also  12  U.S.C.     632;  15  U.S.C.   
                          _________
          1691e(f);  29  U.S.C.   1132(e).  This court has jurisdiction 
          over the final decision of the district court pursuant to  28 
          U.S.C.   1291.
          
                                          3

(1)   on  the  basis of race, color, religion, 
               national origin, sex  or  marital  status,  or  age 
               (provided   the   applicant  has  the  capacity  to 
               contract) . . . .
           
           15 U.S.C.     1691(a)(1).   Mercado  contends  that  summary 

           judgment  was  erroneously entered against him on his claims 

           under this section.  Before  reaching  the  merits  of  this 

           contention,  we  must  first analyze how the commands of the 

           ECOA are to be applied, a matter we consider for  the  first 

           time.

                    It  is  apparent  that  the  plain  language of the 

           statute itself does not resolve a number of  questions  that 

           are  fundamental  to  its  enforcement  by  the  courts.  In 

           particular, the statute does not reveal what it is  an  ECOA 

           plaintiff like Mercado must establish in order to make out a 

           prima facie case of  unlawful  discrimination  in  a  credit 

           decision  and  to  withstand a creditor's motion for summary 

           judgment.

                    When faced with a matter of statutory  construction 

           that  is  of first impression we have looked for guidance to 

           our construction of other, similar enactments.  See De Jesus 
                                                           ___ ________

           v. Banco Popular de Puerto Rico, 918 F.2d 232, 234 (1st Cir. 
           _______________________________

           1990) (looking to precedent regarding  grant  of  attorney's 

           fees  under  42  U.S.C.     1988  in  interpreting "similar" 

           attorney's fees provisions of Truth in Lending Act).   Doing 

           so  in  this  instance,  we  find  in  the  Equal Employment 

           Opportunity  Act,  42  U.S.C.       2000e-2   ("EEOA"),   an 

4

appropriate  model,  and  cases  interpreting  that  statute 

           instructive.  The EEOA seeks to prohibit  discrimination  in 

           the  employment  arena much as does the ECOA in the realm of 

           credit decisions.   Indeed,  the  two  statutes  use  nearly 

           identical language in seeking to achieve their purposes.  We 

           therefore approve the district court's  decision  to  follow 

           the  lead  of other circuits and analyze the ECOA as we have 

           analyzed the parallel provisions of the EEOA.  See  Bhandari 
                                                          ___  ________

           v. First Nat'l Bank of Commerce, 808 F.2d 1082, 1100-01 (5th 
           _______________________________

           Cir. 1987) (language of ECOA is "closely related" to that of 

           EEOA  and  "was  intended  to  be  interpreted  similarly"); 

           Williams v. First Fed. Sav. & Loan Ass'n, 554 F. Supp.  447, 
           ________________________________________

           448-49  (N.D.N.Y.  1981)  ("protections afforded by the ECOA 

           should be applied in the same manner as  those  created  by" 

           the EEOA), aff'd, 697 F.2d 302 (2d Cir. 1982).
                      _____

                    Applying  the  settled law regarding discrimination 

           in employment to Mercado's claim of  age  discrimination  in 

           the  Bank's  credit  decisions,  it is apparent that Mercado 

           bore the burden of  pleading  a  prima  facie  case  of  age 

           discrimination.   See  Texas  Dep't  of Community Affairs v. 
                             ___  _____________________________________

           Burdine, 450 U.S. 248,  252-56  (1981);  Olivera  v.  Nestle 
           _______                                  ___________________

           Puerto  Rico,  Inc.,  922  F.2d  43,  46-47 (1st Cir. 1990).  
           ___________________

           Assuming arguendo that he succeeded in doing so, the  burden 
                    ________

           then  shifted  to  the  Bank "to articulate some legitimate, 

           nondiscriminatory reason" for the actions of  which  Mercado 

           complains.  Burdine, 450 U.S. at 253.  
                       _______

5

We  think  the  Bank carried this burden.  The Bank 

           explained  that  the  cancelled  VISA  card  was  a  special 

           employee  credit  card,  to  which  Mercado  was  no  longer 

           entitled after his termination.   A  new  non-employee  VISA 

           card  was  made  available  to  Mercado just two weeks after 

           cancellation of the employee card.   Similarly,  the  called 

           loan  had  been  offered to Mercado on favorable terms, as a 

           special benefit incident to  his  employment  by  the  Bank.  

           Mercado,  the  Bank  argued,  could not reasonably expect to 

           continue to be afforded the preferential treatment  reserved 

           for  Bank employees once he was one no longer.  Furthermore, 

           it  appears  that  Mercado  had,  upon  learning  that   his 

           discharge  was imminent, run up substantial checking account 

           overdrafts and withdrawn large amounts of cash  through  his 

           employee  VISA  card,  suggesting  that he might be a credit 

           risk.    

                    The  Bank  having  come  forward  with   apparently 

           legitimate,   nondiscriminatory  reasons  for  its  actions, 

           Mercado, in order to defeat the Bank's  motion  for  summary 

           judgment,  was  required  to  offer  evidence  sufficient to 

           demonstrate by a preponderance that these  reasons  were  in 

           reality a pretext for age discrimination.  Id.; Olivera, 922 
                                                      ___  _______

           F.2d at 47-48.  This he was unable to do.  Mercado failed to 

           plead  any  verifiable  facts showing that the Bank's credit 

           decisions were based on his age.  While he  recited  alleged 

           incidents  of age discrimination by the Bank against himself 

6

and others, he  did  not  present  any  facts  showing  such 

           discrimination  in the calling of his loan and the temporary 

           invalidation of his VISA  card.   Conclusory  assertions  or 

           mere  allegations,  in  lieu  of  documented  facts,  cannot 

           withstand a summary judgment motion.   Sheinkopf  v.  Stone, 
                                                  ____________________

           927 F.2d 1259, 1262 (1st Cir. 1991).  

                    Mercado's  showing  raised  no  genuine issue as to 

           whether the Bank's  articulated  reasons  for  limiting  his 

           credit were merely pretextual.  The district court therefore 

           correctly granted summary judgment against Mercado  on  this 

           claim.   See  Ramos v. Roche Products, Inc., 936 F.2d 43, 47 
                    ___  _____________________________

           (1st Cir.) (where there is no direct evidence that  unlawful 

           discrimination   was   a  motivating  factor  in  employer's 

           decision,  defendant  need  only  articulate   a   plausible 

           nondiscriminatory  reason  therefor  to  meet  its burden in 

           showing the absence of discriminatory intent), cert. denied, 
                                                          ____________

           112  S. Ct. 379 (1991); Villanueva v. Wellesley College, 930 
                                   _______________________________

           F.2d  124,  127-28  (1st  Cir.)  (plaintiff  must  introduce 

           evidence  sufficient  to  raise  a  reasonable  inference of 

           discriminatory intent to  defeat  summary  judgment),  cert. 
                                                                  _____

           denied, 112 S. Ct. 181 (1991).  
           ______

III

                    Mercado  next  attempts  to establish that the Bank 

           breached  his   loan   agreement   by   calling   his   loan 

7

prematurely.3   His  task  is  complicated  by the fact that 

           there is a written document evidencing the loan agreement -- 

           a  promissory  note  signed by Mercado -- that provides that 

           the loan is due on demand.  In the district  court,  Mercado 

           sought to introduce parol evidence to show an oral agreement 

           that the loan term  was  in  fact  five  years.   The  Bank, 

           perhaps  contrary  to  its interest, responded by presenting 

           extrinsic evidence that the loan was for a one year term.  

                    In any event, we are convinced that the demand note 

           is   conclusive  of  this  issue.   The  extrinsic  evidence 

           presented by the parties is of no relevance  because  Puerto 

           Rico's  parol evidence rule, P.R. Laws Ann. tit. 32, App. IV 

           R. 69 (1983), requires us to ignore such evidence "when  the 

           agreement  .  .  .  is  clear  and unambiguous."  Catullo v. 
                                                             __________

           Metzner, 834 F.2d 1075, 1079 (1st Cir.  1987).   Rule  69(B) 
           _______

           reads in pertinent part:  

                    When  in an oral or written agreement . . . 
                    all the terms and  conditions  constituting 
                    the true and final intention of the parties 
                    have been included, such agreement shall be 
                    deemed  as  complete,  and therefore, there 
                    can  be  between  the  parties  .  .  .  no 
                    evidence  extrinsic  to the contents of the 
                    same, except in the following cases:  

______________________
          3    Civil claims involving a United States corporation  that 
          arise  out of a banking transaction in a dependent or insular 
          possession  of  the  United  States  are  placed  within  the 
          original  jurisdiction  of the district courts by 12 U.S.C.   
          632.  Puerto Rico is a dependent possession for  purposes  of 
          this  statute.   Conjugal  Soc'y  Composed of Juvenal Rosa v. 
                           ____________________________________________
          Chicago Title Ins. Co., 646 F.2d 688,  689  (1st  Cir.  1981) 
          ______________________
          (per curiam).
          
                                          8

(1) Where a mistake or imperfection of 
                    the  agreement  is  put  in  issue  by  the 
                    pleadings; 
                    
                         (2)  Where   the   validity   of   the 
                    agreement is the fact in dispute.
                    
                    This  rule  does not exclude other evidence 
                    of  the  circumstances  under   which   the 
                    agreement  was  made or to which is related 
                    such as the situation of the subject matter 
                    of  the  instrument or that of the parties, 
                    or to establish illegality or fraud. 
                    
          P.R. Laws Ann. tit. 32, App. IV R. 69(B).

                    Mercado does not allege in his  pleadings  that  the 

          demand  note  contained  any mistakes or imperfections, and he 

          admits  signing  the  note.   He  argues,  however,  that  his 

          proffered   evidence  as  to  the  actual  term  of  the  note 

          constitutes "other evidence of the circumstances  under  which 

          the  agreement  was made," and is, as such, admissible.  We do 

          not agree.   Consideration  of  "other  evidence"  is  neither 

          necessary  nor  permissible  if  it is offered to contradict a 

          clear term of a written agreement.  In this case,  as  to  the 

          term  of  the  loan, the promissory note can "be understood in 

          one  sense  alone,  without  leaving  any  room   for   doubt, 

          controversies  or  difference of interpretation, . . . without 

          necessitating  for  [its]  understanding  any   reasoning   or 

          illustration  susceptible to challenge."  Catullo, 834 F.2d at 
                                                    _______

          1079 (quoting Heirs of Ramirez v. Superior  Court,  81  P.R.R. 
                        ___________________________________

          347,  351  (1959)).  We are therefore bound to look no further 

          than the note itself.  Its repayment provisions  could  hardly 

          be clearer or less ambiguous:  the loan is due upon the demand 

9

of  the  Bank.   The  plain  terms  of  the  parties'  written 

          agreement  cannot  be  contradicted  with parol evidence.  The 

          district court thus properly entered summary judgment for  the 

          Bank  on this issue, since the agreement itself was conclusive 

          as to all material questions of fact.

IV

                    Mercado contends that the district  court  erred  in 

          granting  summary  judgment  against  him  on his COBRA claim.  

          Under the COBRA amendments to ERISA,  a  plan  participant  or 

          beneficiary  must,  on leaving his employer, be advised by the 

          plan administrator that he may continue his ERISA  health  and 

          life  insurance  coverage  if  he  is  willing  to  assume the 

          payments.  29 U.S.C.   1166.  Mercado alleged  that  the  Bank 

          failed  to inform him timely of his right to elect to continue 

          his benefits and that because of this failure  he  missed  the 

          deadline for electing continued insurance coverage.  

                    The  district  court  correctly  found  that Mercado 

          raised no genuine issue of fact as to  whether  the  Bank  had 

          caused  his failure to make the necessary election.  The Bank, 

          as the ERISA plan administrator,  asserted  that  it  notified 

          Mercado on two separate occasions of his election rights.  The 

          first notice was sent by first class mail within fourteen days 

          of  Mercado's  termination  in  compliance  with  29  U.S.C.   

10

1166(c).  Mercado denies ever receiving the letter.4   In  any 

          case,  after Mercado complained to the Bank, the Bank sent him 

          the relevant forms  and  a  copy  of  its  earlier  letter  by 

          certified mail.  Mercado admits that he received this letter.

                    Under COBRA, Mercado had sixty days from the date he 

          received the notice conveyed by this certified letter to elect 

          continued  insurance  coverage.   29  U.S.C.   1165(1)(C)(ii).  

          See Communications Workers of America, Dist. One,  AFL-CIO  v. 
          ______________________________________________________________

          NYNEX  Corp.,  898  F.2d  887, 888-89 (2d Cir. 1990).  Mercado 
          ____________

          admits failing to make the necessary election within this time 

          period,  and does not explain how the Bank's conduct prevented 

          him from doing so.  The Bank was  therefore  properly  granted 

          summary judgment on this claim.

V

                    Finally,  Mercado  asserts  that  the district court 

          erred in dismissing his ADEA claim.  

                    A statutory prerequisite to a civil action  alleging 

          age  discrimination  in  employment  is the filing of a timely 

          complaint with the  Equal  Employment  Opportunity  Commission 

          ("EEOC").    29   U.S.C.     626(d).   A  charge  of  unlawful 

          discrimination must be filed with the EEOC within 300 days  of 

______________________
          4    Because we decide this issue on other grounds,  we  need 
          not  address  the  widely  accepted  presumption that Mercado 
          would have received  the  properly  addressed,  stamped,  and 
          mailed  letter  in a timely fashion.  See, e.g., Federal Ins. 
                                                ___  ____  ____________
          Co. v. Summers, 403 F.2d 971, 975 (1st Cir.  1968)  (applying 
          ______________
          Massachusetts law).
          
                                          11

the  allegedly  discriminatory act in states that have enacted 

          employment discrimination laws, and within 180 days in  states 

          having  no  such  laws.  29 U.S.C.    626(d)(1) & (2), 633(b).  

          See Kale v. Combined Ins. Co., 861 F.2d  746,  750  (1st  Cir. 
          ___ _________________________

          1988).  While Puerto Rico appears to have laws of the required 

          type, we do not here decide whether for purposes of 29  U.S.C. 

             633(b)  Puerto  Rico  is  a  "state"  such that the 300-day 

          limitations period applies.  In this case, whichever  deadline 

          controls,  Mercado failed to file a timely complaint.  Mercado 

          was terminated no later than October 13,  1988,  the  date  he 

          received  the  Bank's letter confirming his discharge.  He did 

          not file a claim with the Puerto Rico Anti-Discrimination Unit 

          and  the  EEOC until November 8, 1989, well beyond the maximum 

          limitations period on ADEA claims.  

                    Mercado nonetheless argues that  equitable  estoppel 

          or  equitable  tolling  should  save  his  claim.   We are not 

          persuaded.  "Equitable estoppel occurs where  an  employee  is 

          aware of his ADEA rights but does not make a timely filing due 

          to his reasonable reliance on  his  employer's  misleading  or 

          confusing  conduct."  Kale, 861 F.2d at 752.  Mercado suggests 
                                ____

          that the Bank's offer to consider settlement, or  its  alleged 

          requests  that  he  refrain  from filing an age discrimination 

          complaint,  constituted  misleading  conduct  that  adequately 

          excuses  his  failure to meet the statutory deadlines.  We are 

          constrained to believe, however, that  it  is  something  less 

          than  "reasonable"  for  a  party  contemplating litigation to 

12

allow itself to miss filing deadlines in "reliance" upon  such 

          cajolery  from  the opposing party.  See Dillman v. Combustion 
                                               ___ _____________________

          Eng'g, Inc., 784 F.2d 57, 61 (2d  Cir.  1986)  (employer  must 
          ___________

          misrepresent the limitations period or lull the plaintiff into 

          believing commencing litigation is not  necessary);  Naton  v. 
                                                               _________

          Bank  of  California,  649  F.2d  691,  696  (9th  Cir.  1981) 
          ____________________

          (defendant must have improper purpose or actual  knowledge  of 

          its   deceptive   conduct   before  estoppel  will  toll  time 

          limitations).  

                    "Equitable tolling . . . casts a wider net."   Kale, 
                                                                   ____

          861  F.2d at 752.  Tolling is appropriate where a plaintiff is 

          "excusably ignorant" of his  rights.   Ignorance  of  an  ADEA 

          filing  deadline may be "excusable" where it "is caused either 

          by misconduct of an employer or by failure of that employer to 

          conspicuously  post the informational EEOC notices required by 

          the ADEA . . . ."  Id.; see Torres v. Superintendent of Police 
                             ___  ___ __________________________________

          of  Puerto  Rico,  893 F.2d 404, 407-08 (1st Cir. 1990).  Even 
          ________________

          then, however, tolling ends once "the employee receives actual 

          notice of his statutory rights or retains an attorney."  Kale, 
                                                                   ____

          861 F.2d at 752.  

                    Here, Mercado had actual knowledge of his  right  to 

          file  with  the  EEOC during the entire period in which filing 

          might have been sufficient to permit a later ADEA action.   In 

          his  position  as  human  resources  manager,  he  himself had 

          counseled the Bank in matters relating to age  discrimination.  

13

In  addition, he was represented by counsel from November 1988 

          on regarding this very suit. 

                    We are satisfied that neither equitable tolling  nor 

          equitable estoppel is implicated on these facts.  The district 

          court therefore correctly dismissed Mercado's ADEA claim.5 

VI

                    Once the court dismissed some of the federal  claims 

          and  resolved  the others before trial by summary judgment, it 

          had the discretion also to dismiss the pendent  state  claims.  

          28  U.S.C.    1367(c)(3).  Mercado's arguments to the contrary 

          are without merit.

                    Affirmed.
                    ________

______________________
          5    Mercado further argues that the district court erred  in 
          disposing  of his claimed entitlement to equitable tolling or 
          estoppel under Federal  Rule  of  Civil  Procedure  12(b)(6).  
          According  to  Mercado, the court considered evidence outside 
          the pleadings, and thus should have treated the Bank's motion 
          to  dismiss  as a motion for summary judgment.  We affirm the 
          district court's dismissal because Mercado wholly  failed  to 
          plead  facts showing actively misleading or deceptive conduct 
          by the Bank that  might  permit  him  to  rely  on  equitable 
          tolling  or  estoppel.  A fortiori, Mercado failed "to make a 
          showing sufficient  to  establish  the  existence"  of  facts 
          entitling  him  to relief under either of these doctrines, so 
          that summary judgment would have been granted against him  in 
          any  case.   Celotex  Corp.  v.  Catrett,  477  U.S. 317, 322 
                       ___________________________
          (1986). 
          
                                          14