Benham v. Lenox Savings Bank

United States Court of Appeals
For the First Circuit

No. 01-2101

JACQUELINE T. BENHAM,

Plaintiff, Appellant,

v.

LENOX SAVINGS BANK,

Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. William G. Young, U.S. District Judge]

Before

Torruella, Circuit Judge,

Stahl, Senior Circuit Judge,

and Lynch, Circuit Judge.

Roy T. Englert, Jr., with whom Daniel Solin, Arnon D. Siegel and
Robbins, Russell, Englert, Orseck & Untereiner, LLP were on brief, for
appellant.
James E. Wallace, Jr., with whom Renee E. Hackett and Bowditch &
Dewey, LLP were on brief, for appellee.
June 4, 2002

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 TORRUELLA, Circuit Judge. Plaintiff-appellant Jacqueline T.

Benham ("Benham") appeals from the district court’s judgment against

her on her claim of discrimination under the Employment Retirement and

Income Security Act ("ERISA"), 29 U.S.C. §§ 1001-1461. Specifically,

Benham argues that the district court’s judgment is predicated upon a

factual finding that has no support in the record. Because we conclude

that the district court relied upon a clearly erroneous factual finding

in reaching its holding, we reverse and remand this case for a new

trial.

FACTUAL BACKGROUND

From 1976 until 1997, Benham worked full-time at the Lenox

Savings Bank (the "Bank") in Lenox, Massachusetts. During her tenure

at the Bank, Benham held several positions, ranging in importance from

bank teller to senior vice-president in charge of consumer lending. In

1997, the Bank’s president, Michael Christopher, abruptly terminated

Benham’s employment.

On January 15, 1998, Benham filed suit in district court

claiming that the Bank unlawfully discharged her in violation of § 510

of ERISA, 29 U.S.C. § 1140, which prohibits the firing of an employee

for the purpose of depriving her of employee benefits.1 During the

1 Section 510 of ERISA provides in pertinent part:

It shall be unlawful for any person to discharge, fine,
suspend, expel, discipline, or discriminate against a
participant or beneficiary for exercising any right to which

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bench trial, Benham introduced several pieces of circumstantial

evidence to substantiate her claim. First, because of her seniority

and years of experience, Benham’s benefits far exceeded those of any

other bank employee. Second, Christopher’s bonus was directly

proportional to the Bank’s profits, which gave him an incentive to

reduce employee benefits. Finally, Christopher actually reduced

several of the Bank’s employee benefit plans. For Benham, this

evidence led to the inescapable conclusion that she was fired so that

the Bank could avoid paying her costly employee benefits.

In response, the Bank asserted that Benham was discharged

because she made several improper intra-family loans. In particular,

the Bank argued that Benham created multiple conflicts of interest when

she approved and defined the terms of loans given to Paula and Joseph

Czop, her daughter and son-in-law. According to the appellee, then,

Benham was fired for violating the Bank’s Code of Conduct, which

prohibits the authorization of loans to family members and the

extension of credit to them on preferential terms.

Rather than crediting either of the proffered reasons for

Benham’s termination, the district court introduced an alternative

he is entitled under the provisions of an employee benefit
plan . . . or for the purpose of interfering with the
attainment of any right to which such participant may become
entitled under the plan . . . .

29 U.S.C. § 1140.

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explanation. The court found that Christopher fired Benham "to make an

example of her, to demonstrate his power as president of the Lenox

Savings Bank." Believing that the district court erred in reaching

this factual determination, Benham filed the instant appeal.

DISCUSSION

It is well settled in our jurisprudence that a district

court’s factual findings regarding an employer’s intent are reviewed

for clear error. See Foster v. Dalton, 71 F.3d 52, 55 (1st Cir. 1995).

Pursuant to this standard, we will reverse a lower court’s decision

only if "after careful evaluation of the evidence, we are left with an

abiding conviction that . . . [the court's] findings are simply wrong."

State Police Ass'n v. Commissioner, 125 F.3d 1, 5 (1st Cir. 1997);

accord Indus. Gen. Corp. v. Sequoia Pac. Sys. Corp., 44 F.3d 40, 46

(1st Cir. 1995) (ruling that an appellate court must have a "strong,

unyielding conviction that the district court was mistaken" before

reversing on clear error grounds).

Benham argues that the district court clearly erred in

finding that she was fired because Christopher "wanted to make an

example of her, to demonstrate his power as president of the Lenox

Savings Bank." After carefully reviewing the record, we have found no

evidence whatsoever to support the district court’s factual

determination. Our search results are corroborated by the Bank's brief

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to this Court, which does not cite a single piece of evidence in

defense of the district court’s theory.

Instead, the Bank argues that "[t]he [District] Court’s

finding that Christopher wanted 'to make an example of' Benham may be

a comment on his management style, but it is not an 'alternative

explanation' for his decision to terminate her." The Bank’s argument,

however, is directly contradicted by the explicit language of the

district court’s findings. In a colloquy with itself, the district

court asked and answered the critical question:

This leaves us with the key issue. Why at the
time [Christopher] fired [Benham] did he do so?
. . . He did so to make an example of her, to
demonstrate his power as president of the Lenox
Savings Bank.

It is clear from this discussion that the district court was

specifically describing what motivated Christopher to discharge Benham.

Furthermore, this reason was the only one advanced by the district

court to explain what caused the termination of Benham's employment.2

Having found no support for the district court's ultimate

factual finding, we are left with a "strong, unyielding conviction that

the district court was mistaken." Indus. Gen. Corp., 44 F.3d at 46.

2 Though the district court found that Christopher believed that Benham
violated the Bank's Code of Conduct, the court concluded that what
actually caused Christopher to fire Benham was a need to demonstrate
his authority. Notwithstanding the Bank's arguments to the contrary,
the district court never found that Christopher terminated Benham
because he believed that she violated the Code of Conduct.

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We therefore conclude that the district court committed clear error in

its findings of fact.

Not satisfied with a reversal, Benham argues that we should

enter judgment in her favor because all of the district court’s

subsidiary findings of fact compel that conclusion. Though rare, an

appellate court may make findings of fact where the record permits only

one resolution of the factual issue. See Pullman-Standard v. Swint,

456 U.S. 273, 291-92 (1982); Dedham Water Co. v. Cumberland Farms

Dairy, Inc., 972 F.2d 453, 463 (1st Cir. 1992) (stating that "appellate

factfinding is permissible only when no other resolution of a factbound

question would, on the compiled record, be sustainable").

Though the district court made some findings of fact that

clearly support Benham’s claim,3 it cannot be seriously argued that the

court’s subsidiary findings compel the conclusion that judgment should

be entered in her favor. The district court, for instance, found that

Benham directly authorized at least one loan to her family -- an act

which may have violated the Bank's Code of Conduct. Thus, the

subsidiary findings of fact can be used as much to support Benham’s

claim as to defend the Bank’s.

In the end, there remains competent evidence from which a

factfinder could credit either Benham’s or the Bank’s version of

3 For example, the district court found "that it was a particular theme
of Mr. Christopher's management of the bank to reduce . . . the
benefits to be afforded to bank officers and employees."

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events. Rather than usurping the district court's function and

entering judgment in favor of either party, we reverse and remand this

case for a new trial.

CONCLUSION

For the foregoing reasons, we reverse the district court's

judgment and remand the case for a new trial.

Reversed and remanded.

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