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Sept. 1 — A federal judge in Indiana properly dismissed with prejudice the age and sex bias and retaliation claims of a former insurance company employee who allegedly submitted a falsified employment agreement in seeking to compel arbitration, the U.S. Court of Appeals for the Seventh Circuit ruled Sept. 1.
Affirming the dismissal of Neal Secrease's Age Discrimination in Employment Act and Title VII of the 1964 Civil Rights Act claims against Western & Southern Life Insurance Co., the Seventh Circuit found that the lower court judge didn't err in concluding that Secrease acted in bad faith by attempting to defraud the court.
The appeals court said Secrease allegedly submitted another employee's employment contract as his own and later lied about it.
Judge David Hamilton wrote the opinion, joined by Judges Richard D. Cudahy and Michael S. Kanne.
According to the court, Secrease sued Western & Southern for age and sex discrimination and retaliation in June 2014. In response to the company's motion to dismiss, he sought a court order to resolve the dispute in arbitration.
He submitted to the court a signed employment contract that included a mandatory arbitration provision.
Western & Southern, however, argued that the contract presented by Secrease, which he signed in 2006, didn't include an arbitration clause. It further contended that Secrease submitted the first and last pages of his own agreement, which were marked 2-0603 to represent March 2006, but inserted pages from a different contract the company began using after 2008, labeled 2-0901 for January 2009. That later contract required mandatory arbitration.
When asked about the discrepancy, Secrease claimed that another employee helped him with his court filings, that he used that employee's 2009 contract as an example because he couldn't find his own employment agreement, that he intended the contracts to be separate exhibits but that they were accidentally combined and that he tried to call the court to correct the filing.
However, Secrease's phone records revealed no calls to the judge or the court clerk. Although Secrease also maintained that he signed an updated employment contract in 2008, he couldn't produce a copy and insisted that Western & Southern destroyed its copy.
Judge Jane E. Magnus-Stinson of the U.S. District Court for the Southern District of Indiana didn't believe Secrease's contentions and ultimately dismissed his lawsuit with prejudice as a sanction for defrauding the court. Secrease appealed.
Magnus-Stinson “determined that the sanction was appropriate because Secrease had tried, willfully and in bad faith, to deceive the court and then, when questioned about it, gave dishonest and implausible explanations,” the appeals court recounted.
Affirming on appeal, the Seventh Circuit explained that a district court has the power to sanction a party who “has willfully abused the judicial process or otherwise conducted litigation in bad faith.”
It found no error in Magnus-Stinson's conclusion that Secrease attempted to defraud the lower court by falsifying his employment contract and later lying about his actions.
The judge exercised her “sound discretion” in dismissing Secrease's lawsuit with prejudice, the appeals court said.
“First, falsifying evidence to secure a court victory undermines the most basic foundations of our judicial system,” the court said. “Second, courts generally have an interest in both punishing a party’s dishonesty and deterring others who might consider similar misconduct.”
Secrease represented himself. Barnes & Thornburg represented Western & Southern.
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Text of the opinion is available at http://www.bloomberglaw.com/public/document/NEAL_D_SECREASE_JR_Plaintiff_Appellant_v_THE_
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