DeLapaz v. Magnifique Parfumes and Cosmetics Inc
Filing
58
OPINION AND ORDER granting in part and denying in part 49 Motion for Summary Judgment. Summary judgment is GRANTED with respect to Count 1. Counts 2 and 3 are DISMISSED WITHOUT PREJUDICE. Signed by Judge Jon E DeGuilio on 09/26/12. (ksp) Modified on 9/28/2012 to edit doc type (mlc).
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION AT LAFAYETTE
BRIAN DELAPAZ and,
MICHELLE DELAPAZ,
)
)
)
Plaintiffs,
)
)
v.
)
)
MAGNIFIQUE PARFUMES and
)
COSMETICS, INC., d/b/a PERFUMANIA, and
)
VICTORIA BURTON, in her individual capacity, )
)
Defendants.
)
Cause No. 4:09-CV-026-JD
OPINION AND ORDER
Plaintiffs Brian DeLapaz (“DeLapaz”) and Michelle DeLapaz sued defendants Magnifique
Parfumes and Cosmetics, Inc, d/b/a Perfumania (“Magnifique”) and Victoria Burton (“Burton”) in
a three-count complaint. [DE 29]. In Count 1, DeLapaz alleges that Magnifique unlawfully
terminated his employment for the purpose of preventing him from receiving ERISA benefits, in
violation of 29 U.S.C. § 1140, a provision of the Employee Retirement Income Security Act
(ERISA). [DE 29 ¶¶ 17-21]. In Count 2, DeLapaz sues Burton for defamation per se under Indiana
common law. [DE 29 ¶¶ 22-25]. In Count 3, Michelle DeLapaz levies a derivative claim against both
defendants for loss of consortium. [DE 29 ¶¶ 26-27]. On October 26, 2011, the defendants filed a
motion for summary judgment against all claims. [DE 49; DE 50]. On January 3, 2012, the plaintiffs
responded [DE 54], and on January 20, 2012, the defendants replied. Having taken the motion under
advisement, the court now grants summary judgment on the plaintiff’s ERISA claim, Count 1. That
leaves only a state law dispute between two Indiana state residents, and so the court declines to
exercise its supplemental jurisdiction over Counts 2 and 3. Each is dismissed without prejudice.
1
BACKGROUND1
Magnifique hired DeLapaz to serve as the manager of its Lafayette, Indiana, retail store in
August, 2008. [DE 29 ¶ 9]. As manager of the store, DeLapaz was ultimately responsible for
overseeing all activities at the store. [DE 50-1 at 5]. DeLapaz reported to Burton, who served as the
acting district manager for the region that contained the Lafayette store from November, 2008,
(shortly after DeLapaz was hired) until March, 2009. [DE 50-1 at 4; DE 50-2 at 5].
The chain of events that led to DeLapaz’s separation from Magnifique began on December
24, 2008. DeLapaz was scheduled to manage the Lafayette store from open to close, but he did not
work all of his scheduled hours. Instead, he took a two-hour break without approval to watch Santa
Claus lift off in a helicopter. [DE 50-1 at 8]. The next day DeLapaz was scheduled to work was
December 26, 2008, but he never made it to the store. Instead, that afternoon, DeLapaz sent an
e-mail message to Burton stating that he had injured his foot and would be seeing his physician on
Monday or Tuesday of the following week. [DE 50-3 at 5]. DeLapaz informed Burton that he had
slipped while leaving his home for work. The slip re-aggravated a foot injury DeLapaz had
originally sustained nine years earlier, and which had required extensive medical attention. [DE 50-1
at 6].
DeLapaz’s e-mail to Burton began a series of misunderstandings between the two. DeLapaz
asked Burton to put in sick hours for him to cover his shifts until he was able to see a doctor. [DE
50-3 at 5]. Burton responded that she could not do that; putting in sick days had to be done at
DeLapaz’s store on his payroll, and Burton was off-site. She told DeLapaz he needed to get his sick
1
This summary of the facts is not meant to be exhaustive, to construe the facts in any particular light, or to
frame the case in a certain way. It is simply meant to provide some background to the case. Particular material facts
are addressed where appropriate in the “discussion” section of this order.
2
days in to the payroll department to cover Friday, December 26, 2008, as well as Saturday, Monday
and Tuesday. [DE 50-3 at 5]. Inexplicably, and contrary to everything in Burton’s e-mail, DeLapaz
replied on Monday that he had sixteen sick hours remaining and asked Burton to put them in for him
on Tuesday. [DE 50-3 at 7]. Some context comes from the parties’ depositions; over the course of
the weekend in question, Burton and DeLapaz also communicated occasionally by phone, although
DeLapaz only responded to some of Burton’s messages. [DE 50-1 at 10-11]. The two arranged to
meet at the store on Tuesday, December 30, 2008, to discuss DeLapaz’s injury and how to proceed.
[DE 50-1 at 7]. At no time following the injury did anybody tell DeLapaz that he was on leave, nor
did he ever request medical leave from Magnifique. [DE 50-1 at 8]. Nonetheless, despite the fact that
he had no doctor’s note, had not even seen a doctor, and had not requested or been given leave,
DeLapaz considered himself “absolved” of all responsibilities relative to the Lafayette store the
moment he told his superior he had an injury. [DE 50-1 at 10].
Despite committing to meeting with Burton at the store on Tuesday, December 30, 2008,
DeLapaz went straight to the store from his doctor’s appointment on Monday, December 29, 2008.
[DE 50-1 at 8]. While there, he dropped off his keys to the store, and he carried out his personal
belongings, which included some medications and medical equipment as well as more casual items
like a microwave. [DE 50-1 at 8; DE 54-5 at 2]. He told the employee on duty at the store that he
would need an operation on his foot, and he left her with a doctor’s note. [DE 50-1 at 8]. With that,
he left. He did not meet with Burton on Tuesday. He did not speak to Burton at any time thereafter.
On Wednesday, December 31, 2008, Burton sent an e-mail to Wendy Mahle, Magnifique’s
human resources director, asking how to proceed with respect to DeLapaz. She asked whether his
conduct constituted a voluntary resignation. [DE 50-2 at 16, 18; DE 54-5 at 2-3]. Mahle told Burton
3
DeLapaz had resigned. [DE 54-5 at 1]. Thereafter, DeLapaz and Magnifique never had any contact
beyond a telephone call by DeLapaz to the benefits department at some later date, and an email to
Mahle on January 9, 2009, arguing that he had never meant to resign. [DE 50-1 at 11]. Burton no
longer works at Magnifique. DeLapaz, for his part, is now permanently disabled and unable to work.
[DE 50-1 at 12]. He currently receives social security benefits for himself and his children. On
March 25, 2009, DeLapaz initiated this lawsuit by filing his first complaint. [DE 1]. He amended
that complaint twice, leading to the current live document. [DE 29]. The defendants now move for
summary judgment against all claims.
STANDARD OF REVIEW
Summary judgment is proper where 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 the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(c); Lawson v. CSX Transp., Inc., 245 F.3d 916, 922 (7th Cir. 2001). A material fact is one
identified by the substantive law as affecting the outcome of the suit. Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). A genuine issue exists with respect to any such material fact, and
summary judgment is therefore inappropriate, when “the evidence is such that a reasonable jury
could return a verdict for the non-moving party.” Id. On the other hand, where a factual record taken
as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine
issue for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citing
Bank of Ariz. v. Cities Servs. Co., 391 U.S. 253, 289 (1968)).
In determining whether a genuine issue of material fact exists, this court must construe all
facts in the light most favorable to the non-moving party, as well as draw all reasonable and
4
justifiable inferences in her favor. Anderson, 477 U.S. at 255; King v. Preferred Technical Grp., 166
F.3d 887, 890 (7th Cir. 1999). Still, the non-moving party cannot simply rest on the allegations or
denials contained in its pleadings. It must present sufficient evidence to show the existence of each
element of its case on which it will bear the burden at trial. Celotex Corp. v. Catrett, 477 U.S. 317,
322-323 (1986); Robin v. Espo Eng’g Corp., 200 F.3d 1081, 1088 (7th Cir. 2000). Furthermore, the
non-moving party may rely only on admissible evidence. Lewis v. CITGO Petroleum Corp., 561
F.3d 698, 704 (7th Cir. 2009).
DISCUSSION
Count 1: Unlawful Termination under ERISA
The defendants have argued two grounds for summary judgment on Count 1, alleging
unlawful termination under ERISA. First, they argue that the relief sought by the plaintiffs is
unavailable under the statute, and that the claim must be dismissed as a result. Second, they argue
that the claim fails because DeLapaz cannot show that the stated reason for his separation from the
company was a pretext. The court disagrees with the former argument, but agrees with the latter. The
defendants are entitled to summary judgment on Count 1.
A.
Requested Relief Issue
The first argument Magnifique raises in support of summary judgment on Count 1 pertains
to justiciability, rather than to the merits. In Count 1, DeLapaz alleges that Magnifique discharged
him from his employment for the purpose of preventing him from receiving ERISA benefits, in
violation of 29 U.S.C. § 1140. [DE 29 ¶¶ 17-21]. Under the ERISA statutory scheme, a civil action
may be brought by a person aggrieved under § 1140 “to enjoin any act or practice which violates
any provision of this subchapter or the terms of the plan,” or “to obtain other appropriate equitable
5
relief to redress such violations or to enforce any provisions of this subchapter or the terms of the
plan[.]” 29 U.S.C. § 1132(a)(3). Absent from the list of available remedies is any right to legal
damages, and as a result the courts have consistently noted that the statute provides only for
equitable, and not legal, relief. See, e.g., Great-West Life & Annuity Ins. Co. v. Knudson, 534 U.S.
204 (2002).
In this case, DeLapaz laid out the relief he seeks in both specific and general terms:
As a result of DeLapaz’s termination of employment in violation of Section 510 of
ERISA, Plaintiff is entitled to “appropriate equitable relief[”] pursuant to [§
1132(a)(3)]. Such “appropriate equitable relief” includes an entitlement to lost
benefits, back pay, reinstatement or front pay in lieu of reinstatement and such other
equitable restitution, injunctive and remedial relief available pursuant to ERISA.
[DE 29 at 3]. Magnifique argues that DeLapaz seeks only legal damages which he cannot recover,
and that his claim must therefore be dismissed. Magnifique’s theory is that a claim for relief not
available under the statute is outside the court’s jurisdiction. That theory does find some historical
support in the case law. See, e.g., Crosby v. Bowater Inc. Ret. Plan for Salaried Emps. of Great N.
Paper, Inc., 382 F.3d 587 (6th Cir. 2004) (finding a lack of subject matter jurisdiction where §
1132(a)(3) plaintiffs sought “essentially legal relief,” and collecting cases to that effect); OliverPullins v. Associated Material Handling Indus., Inc., 2003 WL 21696207 (S.D. Ind. May 20, 2003)
(noting that “[a] federal court lacks jurisdiction over a claim under [§ 1132(a)(3)] seeking legal
relief.”). But it has fallen out of favor in the Seventh Circuit. In Newpage Wisconsin System, Inc. v.
United Steel, 651 F.3d 775 (7th Cir. 2011), Judge Easterbrook concluded that the availability of
remedies has no effect on the court’s jurisdiction to hear the case; it simply creates an issue as to
what remedies the plaintiff may obtain.
After Newpage, the best way of looking at the issue may be as one of justiciability. “Even
6
where a court possesses jurisdiction to hear a claim, it may not do so in cases where the claim
presents a non-justiciable controversy (i.e., the claim is such that the court lacks ‘ability to supply
relief.’)” Thomas v. United States, 217 F.3d 854 (Fed. Cir. 1999) (table) (quoting Murphy v. United
States, 993 F.2d 871, 872 (Fed. Cir. 1993)). A case is moot if “there is no possible relief which the
court could order that would benefit the party seeking it.” McKinney v. Indiana Michigan Power
Co., 113 F.3d 770, 772 (7th Cir. 1997) (citing In re Envirodyne Indus., Inc., 29 F.3d 301, 303 (7th
Cir. 1994)). So, in short, the mere fact that a party has sought some relief which is unavailable is not
necessarily fatal to his case. But if he seeks only legal damages which he cannot recover and
“appropriate equitable relief” where the facts of the case show that no equitable relief is appropriate,
with the result that he is entirely without remedy under the statute, then the case is simply moot.
Fortunately for DeLapaz, this case falls into the former category.
The initial question is whether the remedies DeLapaz seeks are considered legal or equitable
relief. In Sereboff v. Mid. Atl. Med. Servs., 547 U.S. 356 (2006), and Great-West, 534 U.S. 204, the
Supreme Court made clear that the court’s primary consideration should be whether the category
of relief requested was historically available in equity. Other cases, from the Supreme Court and
elsewhere, have answered that question with respect to particular forms of damages. Compensatory
damages, for example, are quintessential legal relief, and they are not available under § 1132(a)(3).
See Mertens v. Hewitt Assocs., 508 U.S. 248 (1993). Drawing the line between what constitutes
compensatory damages and what constitutes equitable relief, however, can be difficult. The Seventh
Circuit sometimes considers back pay a compensatory remedy and sometimes considers it an
equitable remedy, depending on the circumstances. Contrast, e.g., United Elec., Radio and Mach.
Workers of America (UE) v. N.L.R.B., 580 F.3d 560, 563 (7th Cir. 2009) (characterizing back pay
7
as “compensatory” in an N.L.R.A. case) with Doe v. Oberweis Dairy, 456 F.3d 704, 714 (7th Cir.
2006) (holding, in a Title VII context, that back pay is equitable in nature). These differences in
treatment tend to turn on the language of the statute at issue, and the Seventh Circuit has not yet
answered the question with respect to § 1132(a)(3). But when deciding how to classify back pay
under a given statute as a matter of first impression, the Seventh Circuit has generally been
deferential to its sister courts. See, e.g., Franzen v. Ellis Corp., 543 F.3d 420, 425 (7th Cir. 2008)
(acknowledging Sixth Circuit and Tenth Circuit decisions holding that back pay is “legal” relief
under the FMLA). In this case, such deference would lead to the conclusion that back pay is a form
of compensatory damages and is unavailable. See, e.g., Millsap v. McDonnell Douglas Corp., 368
F.3d 1246, 1253 (10th Cir. 2004) (“Backpay is compensatory because the award is measured by an
employee's loss rather than an employer's gain.”). The same goes for lost benefits. Id.; see also
Chauffeurs, Teamsters & Helpers, Local No. 391 v. Terry, 494 U.S. 558, 563 (1990) (where the
Supreme Court characterized a claim for “lost wages and health benefits” as one for “compensatory
damages”). Moreover, regardless of which technical terms are used, the Seventh Circuit has made
clear that a plaintiff proceeding under § 1132(a)(3) “cannot be compensated monetarily” for his
injury, which in this case is the alleged discriminatory termination. Smith v. Med. Benefit Adm’rs
Grp., Inc., 639 F.3d 277, 283 (7th Cir. 2011). That general rule reinforces the court’s conclusion that
back pay and lost benefits are unavailable under the terms of this statute.
Of course, that still leaves the plaintiff’s request for “reinstatement or front pay in lieu of
reinstatement,” as well as his generic request for all equitable relief available under the statute.
Reinstatement is clearly a form of equitable, injunctive relief. See Lorillard v. Pons, 434 U.S. 575,
583 n. 11 (1978) (noting that it is “clear that judgments compelling employment, reinstatement, or
8
promotion are equitable”). Front pay, too, is usually considered equitable in nature: “A front pay .
. . award is the monetary equivalent of the equitable remedy of reinstatement.” See Pollard v. E.I.
du Pont de Nemours & Co., 532 U.S. 843, 854 n. 3 (2001) (quoting Blum v. Witco Chem. Corp., 829
F.2d 367, 383 (3d Cir. 1987)). But, even leaving aside for the moment any potential conflict between
these rules and the Seventh Circuit’s ban on monetary compensation for a § 1132(a)(3) plaintiff,
there is still a looming problem for DeLapaz: “[A] plaintiff may not collect damages for periods of
time in which he otherwise would have been unable to work for the company[,]” Franzen, 543 F.3d
at 426 (citing Flowers v. Komatsu Mining Sys., Inc., 165 F.3d 554, 557-58 (7th Cir. 1999)), nor does
he have any right to reinstatement if he is unwilling or unable to return to work. Id. (citing Colburn
v. Parker Hannifin/Nichols Portland Div., 429 F.3d 325, 332 (1st Cir. 2005)). It is undisputed that
shortly after separating from Magnifique, DeLapaz became permanently disabled and unable to
work. [DE 50-1 at 12]. Reinstatement and front pay in lieu of reinstatement are, by definition, things
that would have to happen sometime in the future. Pollard, 532 U.S. at 846 (“front pay is simply
money awarded for lost compensation during the period between judgment and reinstatement or in
lieu of reinstatement”). Because of his disability, the court cannot order DeLapaz reinstated, nor can
it order him compensated as though he was being reinstated. Reinstatement or front pay in lieu of
reinstatement is therefore unavailable.2
Thus, neither “lost benefits, back pay, reinstatement or front pay in lieu of reinstatement”
2
Since reinstatement and front pay are forms of equitable relief, this is generally a decision for the court to
make, not the jury. See Germain v. Connecticut Nat’l Bank, 988 F.2d 1323 (2d Cir. 1993) (“The Seventh
Amendment preserves the right to trial by jury for suits at common law, not in equity.”) (citing Parsons v. Bedford,
28 U.S. 433, 446-47 (1830)); cf. Pals v. Schepel Buick & GMC Truck, Inc., 220 F.3d 495 (7th Cir. 2000) (confirming
that equitable relief is determined by the judge (e.g., “juries don't draft injunctions”), and holding that even the more
concretely ascertainable equitable issues, like the amount of front pay, can only be determined by a jury with the
consent of both parties and the judge).
9
is recoverable in this case, the first two because they are not permitted by the statute and the last two
because they are unavailable on the undisputed facts as a matter of law. But that does not force a
conclusion that the controversy is moot, or otherwise non-justiciable. See McKinney, 113 F.3d at 772
(7th Cir. 1997) (a case is moot if “there is no possible relief which the court could order that would
benefit the party seeking it”). DeLapaz also claimed “such other equitable restitution, injunctive and
remedial relief [as is] available pursuant to ERISA[.]” The court need not attempt to list every form
of relief which may still be available; all it takes is one to keep the case alive. One possibility is a
declaratory judgment. It is not uncommon for aggrieved parties to seek a declaratory judgment under
§ 1132(a)(3) stating that ERISA has been violated. See, e.g., Newell Operating Co. v. Int’l Union
of Auto., Aerospace, and Agric. Implement Workers of America, UAW, 532 F.3d 583, 588 (7th Cir.
2008) (noting that § 1132(a)(3) allows for a suit for a declaratory judgment), overruled on other
grounds, Envision Healthcare, Inc. v. PreferredOne Ins. Co., 604 F.3d 983 (7th Cir. 2010); Trs. of
AFTRA Health Fund v. Biondi, 303 F.3d 765, 770 (7th Cir. 2002); Byrd v. Unum Life Ins. Co. of
America, 421 Fed. Appx. 397 (5th Cir. 2011) (per curiam). A declaratory judgment in his favor
would certainly be “of benefit” to DeLapaz; Count 3, for example, is a derivative claim, and even
if he is unable to recover monetarily on Count 1, a declaratory judgment in his favor could maintain
the possibility of a monetary recovery against Magnifique on Count 3.
In short, Magnifique’s argument with respect to the relief requested does not entitle it to
summary judgment, or to a dismissal of Count 1. While it is true that DeLapaz cannot recover any
compensatory damages or obtain an order for reinstatement or its financial equivalent, other
appropriate equitable relief may be available. That is enough to keep his claim alive. The court
therefore moves on to the merits.
10
B.
The Merits
DeLapaz has elected to try to make a prima facie case for unlawful termination under the
indirect, burden-shifting method. [DE 54 at 8]. The plaintiff bears the burden of showing “that the
reason he was terminated was to interfere with his rights under ERISA.” Fairchild v. Forma
Scientific, Inc., 147 F.3d 567, 576 (7th Cir. 1998). He must begin by making his prima facie case.
He must show “‘that he (1) belongs to the protected class; (2) was qualified for his job position; and
(3) was discharged or denied employment under circumstances that provide some basis for believing
that the prohibited intent to retaliate’ or to prevent the use of benefits was present.” Isbell v. Allstate
Ins. Co., 418 F.3d 788, 796 (quoting Grottkau v. Sky Climber, Inc., 79 F.3d 70, 73 (7th Cir. 1996)).
In a § 1140 case like this one, however, the court can skip ahead in the analysis. It “need not
‘determine whether a plaintiff has established a prima facie case where a defendant has advanced
a legitimate, nondiscriminatory reason for its action.’” Id. “Where the defendant has done everything
that would be required of him if the plaintiff had properly made out a prima facie case, whether the
plaintiff really did so is no longer relevant.” Lindemann v. Mobil Oil Corp., 141 F.3d 290, 296 (7th
Cir. 1988) (internal citations omitted). Magnifique has produced a legitimate, non-discriminatory
reason for its “termination” of the plaintiff (if it can even be called that, given the evident confusion
surrounding the whole affair): it thought DeLapaz quit. Accordingly, the court skips over the prima
facie case to consider whether or not DeLapaz has carried his burden of showing that Magnifique’s
stated reason for their separation is a pretext.
When an employer meets their burden of producing a legitimate, non-discriminatory reason
for its action, the burden shifts back to the employee to show that the stated reason is pretextual.
Gates v. Caterpillar, Inc., 513 F.3d 680, 690 (7th Cir. 2008). Pretext is not established when the
11
plaintiff merely demonstrates the employer's reason was mistaken. Ptasznik v. St. Joseph Hosp., 464
F.3d 691, 696 (7th Cir. 2006) (citations omitted). "An employer's mistaken belief . . . is not
unlawful, so long as the belief was honestly held." Id. (citing Wade v. Lerner N.Y. Inc., 243 F.3d
319, 323 (7th Cir. 2001)). A pretext is a deliberate falsehood; a lie, and not an oddity or error. Id.
“[T]o meet [his] burden, [the plaintiff] ‘must identify such weaknesses, implausibilities,
inconsistencies, or contradictions’ in [Magnifique’s] stated reason ‘that a reasonable person could
find [it] unworthy of credence.’” Harper v. C.R. England, Inc., 687 F.3d 297, 313 (7th Cir. 2012)
(quoting Boumehdi v. Plastag Holdings, LLC, 489 F.3d 781, 792 (7th Cir. 2007)). And, the plaintiff
must do so by a preponderance of the evidence. See Rudin v. Lincoln Land Cmty. Coll., 420 F.3d
712, 725 (7th Cir. 2005) (“We next turn to the question of whether [plaintiff] can show, by a
preponderance of the evidence, that LLCC's proffered reason is pretext for . . . discrimination.”).
Moreover, the employee must show more than that the stated reason was a lie. He must show that
the stated reason was a lie covering for discrimination, or, in this case, a lie covering for
Magnifique’s alleged true motive: terminating DeLapaz with the specific intent to deprive him of
ERISA benefits. See Serednyj v. Beverly Healthcare, LLC, 656 F.3d 540, 549 (7th Cir. 2011)
(“pretext for discrimination”); Nauman v. Abbott Labs., 669 F.3d 854, 857 (7th Cir. 2012) (plaintiffs
claiming violation of § 1140 “must demonstrate that their employers [acted] with the specific intent
of preventing or retaliating for the use of benefits.”).
DeLapaz has failed to carry his burden. The court notes that he has successfully created an
issue of material fact as to whether he actually did quit, or intended to quit, when he stopped
appearing at work, removed his belongings (microwave and medical devices), and returned his key
to the store. But the question at the pretext stage is not whether he has created a genuine issue of
12
material fact with respect to whether he quit or not. It is whether he has created a genuine issue of
material fact with respect to whether the decision-makers at Magnifique believed he quit or not.
DeLapaz has produced only four pieces of evidence in that regard.
First, he points to “suspicious timing.” Magnifique and DeLapaz parted ways shortly after
DeLapaz informed Burton that he re-injured his foot and would need to see a doctor. That is
circumstantial evidence, DeLapaz argues, that Magnifique concocted the resignation story as a
cover-up for terminating him before his benefits might have come due. But suspicious timing,
without more, is insufficient to show pretext. Harper, 687 F.3d at 313.
Second, DeLapaz emphasizes a chain of emails between human resources employees. In it,
a junior human resources employee named Gail Vick notified Wendy Mahle, Perfumania’s human
resources director, that DeLapaz was applying for his STD (short-term disability), and asked if she
had to give it to him. Mahle responded, “He quit. He doesn’t [have] STD.” Vick replied, “[C]ool
happy new year to us!!” DeLapaz argues that this email chain amounts to a “celebration,” but does
not explain how it tends to show pretext. There are two speakers in the email chain. No reasonable
person could conclude, based on her email, that Wendy Mahle was lying when she said DeLapaz
quit. She may have been wrong, but there simply is no evidence here that she did not honestly hold
that belief. On the other hand, it is true that Gail Vick’s remark could be seen as “celebratory,” when
the court draws all inferences in favor of DeLapaz as the nonmovant. But not every stray remark by
every employee is relevant to the pretext analysis. See Hemsworth v. Quotesmith.com, Inc., 476 F.3d
487, 491 (7th Cir. 2007). For a particular remark to provide an inference of discrimination – and
therefore pretext – it must be “(1) made by the decision maker, (2) around the time of the decision,
and (3) in reference to the adverse employment action.” Id. (citing Merillat v. Metal Spinners, 470
13
F.3d 685, 694 (7th Cir. 2006)). The “celebratory” remark here was made by Gail Vick, and no
evidence has been introduced that shows her playing any role, however minute, in the decision to
separate DeLapaz from his employment. In fact, the email chain shows indisputably that DeLapaz
leaving the company was news to her. Moreover, her remark pertained to a benefits decision, not
to the decision to separate DeLapaz from the company, which had already been made. Accordingly,
Vick’s stray remark – and her level of delight at the news, however tactless – has no real bearing on
the matter.
Third, Delapaz produced a “separation form” filled out by a Magnifique employee on
January 2, 2009, shortly after he was separated from the company. [DE 54-2]. There is no signature
line, but whoever completed the form was not careful about following instructions. The form
instructs the individual completing it to “select one reason for separation” from any of three
categories: resignation; discharge; or lay off. The individual completing the form nonetheless
selected six reasons for DeLapaz’s separation, including “job abandonment” and “other” from the
resignation category, and “unsatisfactory performance,” “insubordination,” “violation of company
policy” and “failure to work scheduled hours” from the discharge category. This is certainly
indicative of some confusion, or laziness, on the part of a Magnifique employee, but even drawing
all inferences in DeLapaz’s favor it is difficult to see how it could prove that Magnifique did not
actually believe he abandoned his job, let alone prove that Magnifique’s statement to that effect is
a cover for an illegal motive. At most, it could be seen as evidence that DeLapaz was “discharged”
for job abandonment, as opposed to “quitting” through job abandonment, but neither of those paths
leads to recovery for DeLapaz. His burden is to show that Magnifique’s stated reason for discharge
was a pretext for terminating him with the specific intent to deprive him of ERISA benefits, not that
14
he was fired for job abandonment as opposed to being separated by resignation.
Fourth, DeLapaz alleges that Burton made a statement at an unemployment compensation
proceeding subsequent to his separation from Magnifique claiming that he took a substantial sum
of money from Magnifique. [DE 54-4 ¶ 5]. It is undisputed that Burton’s statement was inaccurate.
But, like Gail Vick’s “celebratory” email, it was a “stray remark” not material to the pretext
analysis. See Hemsworth, 476 F.3d at 491. Burton was not the decision maker, and she made the
remark some time (roughly thirteen weeks) after the decision was made. [DE 50-1 at 5]. Beyond a
single affidavit sentence confirming that Burton made the remark, no context has been presented to
the court, either. [DE 54-4 ¶ 5]. As a result, the court cannot say at all whether the remark was made
in reference to DeLapaz’s separation from the company or in reference to something else, such as
his financial situation. It is DeLapaz’s burden to make those connections – to show how these stray
remarks can support a finding of pretext. That burden is not discharged simply by showing that at
some point, some time after the decision was made, an actor who was not the decision maker said
something false.
In short, DeLapaz has failed to carry his burden of showing pretext by a preponderance of
the evidence. His evidence that Magnifique’s explanation of the separation – that he quit – is a lie
amounts to suspicious timing, a separation report that shows confusion but in no way supports a
finding that a lie was told, and a pair of immaterial remarks by employees who did not make the
decision to terminate him. Burton’s remark, in particular, pertained only to missing money. But the
reason Magnifique has put forth for its separation from DeLapaz is that he quit, not that he took
money from the company. Burton’s allegation that DeLapaz took money from the company, made
thirteen weeks after his separation from the company in an unrelated proceeding, simply is not
15
evidence that the company is lying when it says it believed DeLapaz quit. The issues are totally
distinct. The scant evidence DeLapaz has brought forward – none of which actually suggests pretext,
let alone pretext for an illegal motive – is not enough. Summary judgment must be GRANTED on
Count 1.
Counts 2 and 3: Defamation and Loss of Consortium
This case came to the court under its federal question jurisdiction, and the parties are not
completely diverse. [DE 29 ¶ 8]. At this point, Count 1, the only claim over which this court had
original jurisdiction, has been resolved. Count 1 was also the only independent claim against
Magnifique; Count 2 alleges defamation against Burton, and Count 3 is a derivative claim against
both defendants. Without Count 1 as a hook against Magnifique, the Count 3 derivative claim
against Magnifique cannot stand. Accordingly, the case has been reduced to Count 2, alleging
defamation against Burton, and Count 3, a derivative loss of consortium claim against Burton. To
summarize, that means this case now consists of an Indiana plaintiff suing an Indiana defendant for
defamation and loss of consortium, both quintessential state law claims. According to § 1367(c), a
district court may decline to exercise supplemental jurisdiction over a state law claim if:
(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over which the
district court has original jurisdiction,
(3) the district court has dismissed all claims over which it has original jurisdiction,
or
(4) in exceptional circumstances, there are other compelling reasons for declining
jurisdiction.
28 U.S.C. § 1367(c). “When all federal claims have been dismissed prior to trial, the principle of
comity encourages federal courts to relinquish supplemental jurisdiction pursuant to § 1367(c)(3).”
16
Hansen v. Bd. of Tr. of Hamilton Se. Sch. Corp., 551 F.3d 599, 607 (7th Cir. 2008) (internal citations
omitted). The outcome of the defamation and loss of consortium counts is not so clear that the court
can dispose of them as a matter of course, and for this court to continue to preside over what is now
solely a state law action would offend the principle of comity. The court has disposed of the claim
over which it had federal jurisdiction, and the case now presents only issues of state law, which
therefore clearly predominate over the now non-existent federal issues. Under these circumstances,
the court DECLINES to exercise its supplemental jurisdiction. Count 2 and Count 3 are
DISMISSED WITHOUT PREJUDICE, and DeLapaz is free to pursue them in state court without
any preclusive effect resulting from this decision.3
CONCLUSION
In conclusion, summary judgment is GRANTED with respect to Count 1. Counts 2 and 3
are DISMISSED WITHOUT PREJUDICE. The clerk is instructed to close the case.
SO ORDERED.
ENTERED: September 26, 2012
/s/ JON E. DEGUILIO
Judge
United States District Court
3
The court also notes that this decision will not prejudice the plaintiffs with respect to any state statutes of
limitation for their claims. Pursuant to 28 U.S.C. § 1367(d), the “period of limitations” with respect to any claim
brought under a federal court’s supplemental jurisdiction “shall be tolled while the claim is pending and for a period
of 30 days after it is dismissed unless State law provides for a longer tolling period.” State courts are obligated to
follow the statute, and in any case, Indiana has a corresponding savings statute that is even more generous. See, e.g.,
McGill v. Ling, 801 N.E.2d 678 (Ind. App. 2004) (explaining how the Indiana “Journey’s Account Statute,” I.C. §
34-11-8-1, renders claims like these timely when re-filed in state court); see also AMJUR LIMITATION § 276 (for
more general information).
17
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?