Daniels et al v U.S. Bank National Association
Filing
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MEMORANDUM Opinion and Order written by the Honorable Matthew F. Kennelly on 9/7/2018: For the foregoing reasons, the Court grants the defendants' motion for summary judgment [dkt. no. 37] and directs the Clerk to enter judgment in favor of defendants and against plaintiff. Mailed notice. (pjg, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
JEROME C. DANIELS,
Plaintiff,
vs.
U.S. BANK NATIONAL ASSOCIATION
and GREG FIORESI,
Defendants.
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Case No. 17 C 1389
MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge:
U.S. Bank National Association employed Jerome Daniels as a Small Business
Specialist. After receiving a customer complaint, U.S. Bank, through Daniels'
supervisor, Greg Fioresi, investigated a loan Daniels approved for that customer. The
Bank concluded Daniels violated Bank policy by extending the loan and it terminated
Daniels' employment. Daniels is an African-American man older than 40 who alleges
he suffers from depression. He sued the Bank under the Age Discrimination in
Employment Act, 29 U.S.C. § 626(c), Title VII of the Civil Rights Act of 1964, 42 U.S.C.
§ 2000e-5, and the Americans with Disabilities Act, 42 U.S.C. § 12117(a), and both the
Bank and Fioresi under 42 U.S.C. § 1981. The defendants have moved for summary
judgment.
Background
As a Small Business Specialist, Daniels sold U.S. Bank products and services to
small businesses, including various types of loans. Daniels was trained to learn his
customers' needs in order to recommend the proper financial products. The Bank
promulgated a policy for lending to small businesses, which stated that "[t]he
underwriting and approval of loans under this policy shall be for business purposes
only" and "[c]redit requests for the purpose of debt consolidation may not be
underwritten and approved per this policy."
In the second quarter of 2016, Daniels contacted a customer who operated a
Montessori school out of her personal residence. The customer told Daniels she
needed to access credit to meet short-term costs, including a looming $35,000 payment
on a balloon mortgage loan, a type of loan that features a large payment at the end of
the mortgage term. Daniels helped the customer complete an application for a Cash
Flow Manager Line of Credit for $30,000. The customer used the line of credit to make
her mortgage payment, which Daniels learned of in June or July 2016.
On October 4, 2016, the customer contacted U.S. Bank to complain about
Daniels' assistance. She stated that Daniels rushed her through the application
process, failed to explain the terms of the agreement, and falsified her income level to
ensure she would qualify for credit. Fioresi, along with human resources employees
Andrea Corso and Rene Shepherd, investigated the line of credit. They interviewed the
customer and Daniels. They ultimately concluded that Daniels had provided the
customer with a small business loan intended for personal expenses, which as indicated
earlier is against Bank policy. Daniels was aware of this policy. He contends, however,
that he did not believe that the line of credit violated the policy, as the customer's home
also housed her Montessori business. Fioresi, Corso, and Shepherd agreed that
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Daniels should be terminated, citing the allegedly improper loan and possible
dishonesty in completing the loan application.
Daniels' case was forwarded to the Sales Misconduct Disciplinary Oversight
Committee, which makes final decisions on employee discipline. The committee
reviewed the recommendation, concluded that Daniels helped a customer obtain a
small business loan for personal purposes, and terminated his employment. The
committee did not do its own research. Committee members never met Daniels, and
there is no evidence that they were aware of his race, age, or disability status at the
time he was terminated.
Because the treatment of other comparable employees outside the plaintiff's
class(es) is an issue in employment cases, the Court also reviews the evidence
presented regarding the treatment of several other employees accused of violating U.S.
Bank policy. Mike Traversa, a white 34-year-old man with no known disabilities, was
also employed as a Small Business Specialist. In September 2016, prior to the
complaint about Daniels, Corso identified several loans that Traversa made to small
businesses that were all for similar amounts, which indicated to her that Traversa was
not tailoring the loans to the individual business's needs. Fioresi and Shepherd
commenced an investigation, which revealed that Traversa had recommended small
business loans for customers who used the loans for personal purposes. See D.E. 39,
Defs.' Ex. 8 at USB000004 (Shepherd Dep. Ex. 101) (written report describing concern
that "loan proceeds [were] being used for different purpose than disclosed in loan
application process, and for purposes outside SBDLC Lending Policy."). They
concluded that Traversa extended small business loans to customers for non-business
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purposes and recommended his dismissal. Traversa's case was forwarded to the same
committee, which adopted the recommendation of Fioresi and Shepherd and terminated
Traversa's employment.
Daniels contends the treatment of several other U.S. Bank employees is also
relevant. A fraud ring operating in the Chicagoland area in 2015 and early 2016 created
false businesses and requested business loans. 1 Several U.S. Bank employees—white
men under the age of 40 without any known disabilities—extended loans in reliance on
the fraudulent applications. Daniels alleges the employees failed to conduct adequate
due diligence into the fraudulent applications. Unlike Daniels or Traversa, U.S. Bank
did not terminate any of these employees.
Discussion
A party is entitled to summary judgment when "the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(a). Summary judgment is
not warranted if "the evidence is such that a reasonable jury could return a verdict for
the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). On a
motion for summary judgment in an employment discrimination case, the "sole
question" is "whether a reasonable juror could conclude that [the plaintiff] could have
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Daniels attempts to dispute the existence of the fraud ring. See Pl.'s Resp. to Defs.'
LR 56.1 Stmt. ¶ 45. But the only evidence he presents is deposition testimony of U.S.
Bank employees who were unfamiliar with the ring—which is not evidence that no fraud
ring existed. Daniels has not identified a genuinely disputed issue of fact through this
evidence.
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kept his job if he [was not a member of a protected class], and everything else had
remained the same." Ortiz v. Werner Enters., Inc., 834 F.3d 760, 765 (7th Cir. 2016).
The defendants have moved for summary judgment on all of Daniels' claims.
The Court follows the parties' lead in considering the claims together, as the same facts
underpin each. Daniels argues his claims under the McDonnell Douglas burden-shifting
framework. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973). This
framework consists of three steps. The plaintiff first establishes a prima facie case that
an adverse employment action was the result of discrimination based on a protected
characteristic such as race. This requires the plaintiff to show that "(1) he is a member
of a protected class; (2) he was performing his job satisfactorily; (3) he suffered adverse
employment action; and (4) the employer treated similarly situated employees outside of
the protected class more favorably." Lucas v. Chi. Transit Auth., 367 F.3d 714, 728 (7th
Cir. 2004). If the plaintiff meets these requirements, the employer "articulate[s] some
legitimate, nondiscriminatory reason" for the adverse action. If the employer can do so,
the plaintiff must present evidence that this reason is a mere pretext for discrimination.
McDonnell Douglas Corp., 411 U.S. at 802-04.
Daniels' prima facie case founders, perhaps among other places, on the
requirement of evidence of differential treatment. He contends that other employees
engaged in similar misconduct but were not terminated. "When a plaintiff claims to have
been disciplined more harshly than other, similarly situated employees based on a
prohibited reason, the plaintiff must demonstrate that the other employees 'engaged in
similar conduct without such differentiating or mitigating circumstances as would
distinguish their conduct or the employer's treatment of them.'" Everroad v. Scott Truck
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Systems, Inc., 604 F.3d 471, 479 (7th Cir. 2010) (quoting Antonetti v. Abbott Labs., 563
F.3d 587, 592 (7th Cir. 2009)). Specifically, the plaintiff must show the other employees
"(1) dealt with the same supervisor, (2) were subject to the same standards, and (3)
engaged in similar conduct without such differentiating or mitigating circumstances as
would distinguish their conduct or the employer's treatment of them." Skiba v. Ill. Cent.
R.R. Co., 884 F.3d 708, 723 (7th Cir. 2018) (quoting Coleman v. Donahue, 667 F.3d
835, 847 (7th Cir. 2012)) (internal punctuation omitted).
The defendants, pointing to their decision to terminate Traversa for a similar
violation of U.S. Bank policy, contend that they treated similarly-situated employees
alike. Daniels argues that the proper comparison is not to Traversa but rather to the
employees who extended loans to individuals who were part of a fraud ring. These
comparators were white males under 40 without any known disabilities. Daniels
contends that they violated U.S. Bank policy by failing to conduct adequate due
diligence that could have caught the fraud but that they were not terminated.
No reasonable jury could find that these employees were subject to the same
standards as Daniels or that they were engaged in the same or similar conduct. Skiba,
884 F.3d at 723. First, no reasonable jury could find that the other employees' conduct
was regulated by the same U.S. Bank policies as the conduct of Daniels at issue in this
case. The two policies that the Bank cited when it terminated Daniels' employment
were: "[t]he underwriting and approval of loans under this policy shall be for business
purposes only" and "[c]redit requests for the purpose of debt consolidation may not be
underwritten and approved per this policy." The Bank concluded that Daniels knowingly
extended a loan in violation of these policies. Daniels has not presented any evidence
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by which a reasonable jury could find that these policies—or, for that matter, similar
policies—were implicated by the other employees' failure to conduct due diligence.
Second, no reasonable jury could find Daniels' conduct comparable to that of the
other employees. U.S. Bank concluded that Daniels knowingly extended a business
loan for a non-business purpose. By contrast, Daniels alleges that the other employees
failed to conduct due diligence to prevent fraud. Among other distinctions, Daniels
offers no evidence from which a reasonable inference could be drawn that they acted
knowingly.
For these reasons, Daniels' evidence is insufficient to permit a reasonable
factfinder to determine that U.S. Bank engaged in differential treatment of similarlysituated employees outside his protected class. He therefore fails to make out a prima
facie case of discrimination.
Even if Daniels could establish a prima facie case, he has not offered evidence
from which a reasonable factfinder could find U.S. Bank's proffered reason for his
termination to be pretextual. For pretext, Daniels relies primarily on the same evidence
just cited, but that evidence does not get him there for the reasons just discussed.
Daniels also contends that the evidence shows the Bank knew that he did not actually
violate its policy. It is difficult to see how that conclusion follows from the evidence he
cites, specifically, an e-mail between two other U.S. Bank managers which states, in
relevant part, "[t]he game plan was to use Jerome's loan to [pay off the home equity line
of credit] and Kim would refi after into a lower rate, longer term loan." D.E. 46, Pl.'s Ex.
2 at USB0000524-25. This seems to support U.S. Bank's position, not refute it. No
reasonable jury could infer from this evidence that the Bank knew that Daniels had not
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violated policy. Nor is this evidence that would permit a reasonable inference that the
Bank's stated reason was pretextual.
In sum, under the McDonnell Douglas standard, no reasonable jury could find in
Daniels' favor.
The Seventh Circuit has made clear that McDonnell Douglas is not the only way
to assess evidence of discrimination. A court should also determine whether all the
evidence, taken together, "would permit a reasonable factfinder to conclude that the
plaintiff's race, ethnicity, sex, religion, or other proscribed factor caused the discharge or
other adverse employment action." Ortiz, 834 F.3d at 765. See David v. Bd. of Trs. of
Comm. Coll. Dist. No. 508, 846 F.3d 216, 224 (7th Cir. 2017) (analyzing a plaintiff's
claim separately under McDonnell Douglas and Ortiz).
In addition to the evidence discussed earlier, Daniels cites the deposition
testimony of his immediate supervisor, Jim Kettleson. Kettleson's deposition describes
the purportedly discriminatory intent of Fioresi, a U.S. Bank employee senior to both
Kettleson and Daniels.
First, Daniels argues that Kettleson's deposition testimony shows that Fioresi had
animus toward African-American employees that led him to scrutinize them more
closely. But the cited evidence would not permit a reasonable jury to draw such an
inference. Kettleson testified that Fioresi scrutinized the employees of Charter Bank, a
bank that U.S. Bank acquired, more heavily than other employees. Id. at 155. Of these
employees, at least two were African-American, and Kettleson claimed that Fioresi
scrutinized them closely. Id. at 128-29, 218. But Kettleson's testimony does not draw a
connection, aside from pure speculation, between these particular employees' race and
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Fioresi's supposedly enhanced scrutiny of not just them but also other former Charter
Bank employees. Indeed, Kettleson's testimony is likely inadmissible as speculative
and/or lacking the requisite foundation.
Next, Daniels cites Kettleson's testimony that Fioresi once said "Oh, people have
accused me of [discrimination] before. But I just do whatever I want." Id. at 86. See
also id. at 222. The defendants contend that this is impermissible hearsay, but this
statement is excepted from the rule against hearsay as a statement by a person who is
an opposing party and an agent of the other opposing party. Fed. R. Evid. 801(d)(2)(A),
(D). But the testimony would not permit a reasonable jury to conclude that Fioresi
harbored discriminatory animus. When Fioresi's statement is placed into context, it is
evident that he was not acknowledging that he was discriminatory, but that he was
addressing how he faced allegations of discrimination:
Q. And [Fioresi], out of the blue, said something about discrimination or
what? How does that come –
A. We were kind of talking about it as a management team.
Q. About what?
A. The retirement of Luke.
Q. Oh, okay.
A. And kind of, you know—because [Fioresi] was really concerned about,
'Hey, you know, I don't want to look like we're pushing anybody out the
door,' you know, that kind of thing.
Id. at 88, 90. Kettleson's testimony reflects that Fioresi, while discussing his concern
that a discussion could be perceived as discriminatory, he described how he responded
to allegations of discrimination. Id. No reasonable jury could construe this testimony,
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placed into context, as evidence that Fioresi harbored animus against employees based
on any protected characteristic.
In sum, for the reasons discussed above, Daniels failed to present evidence
sufficient to sustain his claims. Daniels cites evidence of other employees who were not
terminated for their failure to employ due diligence while dealing with a fraud ring, but
this evidence does not support an inference that he was treated differently because of a
protected characteristic, as the other employees were not similarly situated to him.
Likewise, Daniels' e-mail evidence indicated that U.S. Bank employees believed that he
had extended a small business loan to pay off a residential loan—in other words, that
he had violated a Bank policy—which does not support his position. Finally, Daniels'
reliance on Kettleson's deposition testimony is misplaced, as no reasonable jury could
rely upon that evidence to conclude Fioresi acted with discriminatory intent in
recommending Daniels' termination. The evidence Daniels cites would not permit a
reasonable jury to conclude that any of his protected characteristics caused his
termination.
Conclusion
For the foregoing reasons, the Court grants the defendants' motion for summary
judgment [dkt. no. 37] and directs the Clerk to enter judgment in favor of defendants and
against plaintiff.
________________________________
MATTHEW F. KENNELLY
United States District Judge
Date: September 7, 2018
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