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May 23, 1991


The opinion of the court was delivered by: Mihm, District Judge.


Pending before the Court is Defendant's Motion for Partial Summary Judgment. For the reasons stated below, said Motion is denied, but the Court certifies this issue for interlocutory appeal pursuant to 28 U.S.C. § 1292 (b).


A. Proceedings to Date in the Litigation

1. This lawsuit is brought by certain former management employees of Defendant Caterpillar, Inc. Plaintiffs are persons who retired or were separated from Caterpillar at various times between July 1985 and May 1987. The Plaintiffs allege that Caterpillar engaged in a pattern or practice of coercing older management employees into retiring or separating from employment on account of their age, in violation of the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq. ("ADEA"). The Defendant denies any wrongdoing. The complaint discloses that each Plaintiff, at the time of retirement or separation, signed a "Statement" that listed certain benefits to be paid to the Plaintiffs and including, among other provisions, language purporting to be a release. The complaint affirmatively alleges a number of legal and factual grounds why these "Statements" were insufficient to act as a release of Plaintiffs' ADEA claims.

2. The lawsuit was filed May 9, 1988, by 32 Plaintiffs. Over Caterpillar's objection, Plaintiffs sent a Court-approved notice to the class defined in the complaint, informing class members of the lawsuit and their right to join in by filing consents pursuant to the opt-in mechanism of ADEA class actions. In response to this notice, a number of additional Plaintiffs joined this suit. Two such Plaintiffs subsequently voluntarily dismissed their claims. The present total of Plaintiffs in the case is 70.

3. On May 31, 1988, Caterpillar filed its answer and counterclaim. The counterclaim, asserted against all Plaintiffs, asserted that the release language in the "Statements" constituted a contract not to file an ADEA lawsuit challenging those terminations. The counterclaim asserted that the filing of this lawsuit constituted a breach of that contract. As damages for this alleged breach, this counterclaim sought (a) the return of the benefits listed in the "Statements," (b) a declaration that Caterpillar was not required to make further payments called for by the "Statements," and (c) the attorney's fees and costs spent by Caterpillar to defend against this litigation.

4. On motion by the Plaintiffs, this Court dismissed the counterclaims on September 3, 1988 for failure to state a claim on which relief could be granted. Isaacs v. Caterpillar, 702 F. Supp. 711 (C.D.Ill. 1988).

5. Following the dismissal of the counterclaims, and upon completion of the process of allowing class members to join the lawsuit, the parties engaged in intensive discovery.

6. In September of 1989, Plaintiffs moved the Court to hold a "test case" trial. This motion contemplated trial of a selected group of Plaintiffs' cases as a means to promote the expeditious resolution of the entire litigation. The Court granted this motion and held further proceedings to determine the number and identities of the "test case" Plaintiffs. The Court determined that the test case would consist of trying twelve Plaintiffs' claims. The Court designated the organizational areas from which the Plaintiffs would be chosen, and ordered the parties to make alternating selections. The parties chose the test-case Plaintiffs on May 31, 1990, and the Court set a trial date of January 14, 1991.

7. On August 27, 1990, the Equal Employment Opportunity Commission (EEOC) was granted leave to intervene as an additional party Plaintiff. Caterpillar answered the EEOC's complaint on September 10, 1990.

8. A series of discovery disputes during the summer of 1990, including the production by Caterpillar in August 1990 of a large number of important documents that should have been produced at the start of the lawsuit, led to a motion by Plaintiffs for sanctions and to continue the trial date. The Court granted Plaintiffs' motion on October 1, 1990. The Court continued generally the proceedings to quantify the sanctions award, and reset the trial date to May 6, 1991.

9. Following this ruling of October 1, 1990, the parties prepared intensively for trial. Document production continued, and more than 60 depositions were taken, including several depositions in Florida, Mississippi, and Missouri. The parties prepared a voluminous pretrial order, and a final pretrial conference was held on April 24, 1991.

10. On April 23, 1991, one day before the scheduled final pretrial conference and 13 days before the scheduled trial date, Caterpillar filed a motion for summary judgment. The motion asserted that Plaintiffs' claims are barred as a matter of law because they had "ratified" the release language contained in the "Statements" they had signed by failing to tender to Caterpillar, at the outset of this litigation, the consideration listed in the "Statements." This matter will be henceforth referred to as the "tender/ratification argument."

11. Until it filed this motion for summary judgment, Caterpillar had never specifically raised the tender/ratification argument, whether formally or informally, in any motion, Court hearing, or other paper filed with the Court.

12. Caterpillar's answers in this litigation contain affirmative defenses based on the release language in the "Statements." In its answer of May 31, 1988, to the private Plaintiffs' complaint, Caterpillar's third affirmative defense reads, in its entirety:

  The claims of each of the Plaintiffs are barred by
  full and complete releases knowingly and voluntarily
  executed by each Plaintiff in exchange for valid

Caterpillar's answer to the EEOC's complaint contains a first affirmative defense reading, in its entirety:

  Defendant states that Plaintiffs have released and
  forever waived the claims which are raised in the

13. Caterpillar bases its summary judgment motion on two very recent decisions from the Fourth and Fifth Circuit Courts of Appeal, O'Shea v. Commercial Credit Corp., 930 F.2d 358 (4th Cir. 1991) and Grillet v. Sears, Roebuck & Co., 927 F.2d 217 (5th Cir. 1991).

14. Plaintiffs filed their response to Caterpillar's motion on April 29, 1991. Caterpillar replied on May 2, 1991, and Plaintiffs filed a surreply on May 2, 1991. On May 3, 1991, this Court heard extensive oral argument from both parties.

15. After argument by both parties, this Court orally ruled that it would deny Caterpillar's motion for summary judgment, but that such ruling would not be final until a written order was entered.

16. At the time of the cessation of their active employment with Caterpillar, Inc., each of the test case Plaintiffs, except Plaintiffs Chester and Levenick, executed the following release:

  In consideration of receiving the especial arrangement
  as described above, I release and forever discharge
  Caterpillar Tractor Co., and its subsidiaries, of and
  from any and all claims, causes of action, damages and
  liabilities whether or not known, suspected or claimed
  by me which I may have relating to my retirement from
  active employment, or which are related to any act,
  course, or thing which could have been alleged in any
  action based on such retirement. I have read the above
  and understand the items described in this statement,
  including the releases.

This particular language was set forth immediately above the signature line on a two-page form.

17. The language of the release signed by Plaintiffs Chester and Levenick contains an immaterial difference from the above language. The Chester and Levenick releases do not contain the last phrase in the first paragraph which reads, "or which are related to . . ."

18. In exchange for execution of the release, the test case Plaintiffs received substantial consideration beyond that to which they were entitled under the normal retirement plan. These benefits included the following:

  (a) An additional payment of $400 per month for a
  specified period of time, or the equivalent in a lump
  sum payment.

  To date, Plaintiffs have received the following amounts
  pursuant to this provision of the agreements they executed.

1. Barlow: $26,457 2. Stone: $12,800 3. Foss: $9,600 4. W. LeDocq: $32,922 5. G. LeDocq: $32,922 6. Chester: $9,600 7. Kessell: $30,143 8. Dill: $19,600 9. Gosbin: $24,400 10. Levenick: $22,400 11. Fraley: $28,000

  (b) In addition, those Plaintiffs who were part of the
  Marketing reorganization received additional payments
  equal to three times their monthly base salary less
  applicable tax withholding amounts and amounts owed to
  the Company. These payments were:

1. Dill: $12,987 2. Foss: $16,503 3. Fraley: $12,987 4. Gosbin: $8,529 5. Stone: $14,802

  (c) A continuation of full life insurance coverage
  during the period the retiree is entitled to the $400
  payment, a benefit which would otherwise be reduced
  upon retirement;
  (d) Increased pension payments by virtue of a reduction in the penalty
  for taking early retirement under the normal plan for all Plaintiffs
  except Plaintiffs Chester and Foss.

Plaintiffs Fraley and Gosbin are still receiving monthly $400 checks from the Company.

19. At no time have any of the Plaintiffs returned or attempted to return the consideration received for the release.

20. Plaintiffs' complaint attacks the validity of the "Statements" for purposes of releasing claims under the ADEA. Among other things, the complaint alleges that releases were not given on a knowing and voluntary basis; that they are invalid for want of consideration; and that they were obtained through the use of bad faith, oppression, and overreaching.

21. Prior to April 23, 1991, Caterpillar had never moved for dismissal or summary judgment on the basis of these "Statements." Moreover, the present motion does not deal with the merits of Plaintiffs' attack on the "Statements" as releases of ADEA claims. For purposes of the present summary judgment motion, counsel for Caterpillar asked the Court during oral argument to assume that the "Statements" would not be valid releases of ADEA claims were it not for their having been "ratified" by Plaintiffs' failure to tender the consideration purportedly received in exchange for signing the "Statements."

22. At no time prior to the recent filing of its motion for summary judgment did Caterpillar specifically argue or imply (1) that any Plaintiff was required to tender to Caterpillar the benefits listed in his or her "Statement on the Special Retirement Supplement" as a condition of pursuing this lawsuit, or (2) that any Plaintiff, through failure to make such a tender or through any other conduct whatsoever, had "ratified" the release language contained in the "Statements."

23. Two Plaintiffs have died since this suit began: John Mellie and Russell Bovee. 43 of the 70 Plaintiffs are over 60, including 6 of the 11 test-case Plaintiffs (Chester, 66; Dill, 64; Foss, 66; Fraley, 62; Levenick, 63; Stone, 65). 13 of the 70 Plaintiffs are over 65, including two of the test-case Plaintiffs (Chester and Stone).


1. Caterpillar's motion takes the date of filing of the lawsuit as the date by which Plaintiffs undisputably had notice of the grounds they had for seeking to void the purported releases. Caterpillar contends that once they had such notice, Plaintiffs were then required to tender to Caterpillar the monetary benefits listed on the "Statements." Caterpillar asserts that by failing to make such a tender, and instead retaining those benefits during the three years of this litigation, Plaintiffs have "ratified" these releases as a matter of law and are therefore precluded from raising any legal challenge to the releases' underlying validity.

2. This motion raises no issue of validity of Plaintiffs' various grounds for asserting that the "Statements" themselves did not constitute valid releases of their ADEA claims. At oral argument, Caterpillar confined its argument to the tender/ratification issue, and asked this Court to assume for the sake of this motion that "the releases were entered into either as a result of duress, fraud, or mistake because the Plaintiffs did not know what they were signing." Transcript of proceedings of May 3, 1991, p. 3. For the purposes of this motion, the Court makes such an assumption. Because Caterpillar has explicitly limited the issue on this motion in this fashion, Plaintiffs have not been required or ...

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