ALLEN et al v. GARDNER & WHITE CORPORATION et al
Filing
137
ORDER granting 121 Defendants' Motion for Summary Judgment - For the reasons detailed herein, Defendants' Motion for Summary Judgment (Dkt. #121) is GRANTED. The magistrate judge is requested to convene a status conference to address whether Defendants/Counter-plaintiffs intend to proceed on their counterclaims and whether the current case management plan is workable. Signed by Judge Jane Magnus-Stinson on 5/1/2012. (JKS)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
DAVID A. ALLEN and STRATEGIC
BENEFITS CONSULTANTS, INC.,
Plaintiffs/Counter-Defendants,
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vs.
GARDNER & WHITE CORPORATION,
GARDNER & WHITE INC., GW EQUITY,
INC., SHAWN BOGENRIEF, and SCOTT
RINGOLD.
Defendants/Counter-Plaintiffs.
1:10-cv-0591-JMS-MJD
ORDER GRANTING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
This matter is before the Court on Defendants/Counter-plaintiffs’ Motion For Summary
Judgment. (Dkt. #121). Through joint stipulations of dismissal and the abandonment of issues
during the briefing of the motion, Plaintiff/Counter-defendant David Allen’s only claim
remaining for purposes of the summary judgment motion is his claim of discrimination, brought
pursuant to 42 U.S.C. § 1981, against Scott Ringold, individually, and Gardner & White
Corporation, Gardner & White, Inc., and GW Equity Inc. (collectively hereinafter “Gardner &
White”).1 The counterclaims brought by the Defendants/Counter-plaintiffs are not the subject of
the motion for summary judgment. For the reasons expressed herein, the Court grants summary
judgment in favor of the Defendants/Counter-plaintiffs.
I.
Summary Judgment Standard
Summary judgment is appropriate if “the movant shows that there is no genuine dispute
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Specifically, in response to the summary judgment motion, Allen abandoned his breach of
contract claim against the Defendants/Counter-plaintiffs as well as all claims against Shawn
Bogenrief. [Dkt. 130 at 1 n.1.]
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as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.
56(a). The substantive law identifies that facts are material. See Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is genuine only “if the evidence
is such that a reasonable jury could return a verdict for the nonmoving party.” Id. If no
reasonable jury could find for the non-moving party, then there is no “genuine” dispute. Scott v.
Harris, 550 U.S. 372 (2007).
The party seeking summary judgment “bears the initial responsibility of informing the
district court of the basis for its motion, and identifying” those materials which “demonstrate the
absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
The nonmoving party bears the burden of demonstrating that such a genuine issue of material
fact exists. See Harney v. Speedway SuperAmerica, LLC, 526 F.3d 1099, 1104 (7th Cir. 2008).
For purposes of deciding the motion, a court must view the facts in a light most favorable to the
non-moving party. E.E.O.C. v. AutoZone, Inc., 630 F.3d 635, 642 (7th Cir. 2010). However, if a
party “fails to properly address another party’s assertion of fact ... the court may consider the fact
undisputed for purposes of the motion.” Fed. R. Civ. P. 56(e)(2).
II.
Factual Background
Gardner & White is in the business of helping companies with various aspects of
retirement, insurance, and employee benefit plans and services clients nationwide. Allen was
hired by Gardner & White in March 2005 as a Regional Vice President (“RVP”) for its Northern
Illinois Territory. Allen was salaried through the end of that year, but beginning with the 2006
calendar year he became an independent contractor, signing an agreement with Gardner &
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White2 that called for him to be compensated entirely on a commission basis. He was to receive
50% of commissions received by Gardner & White on existing business and 75% of
commissions on new business. He assigned his right to the commissions to Strategic Benefits
Consultants, Inc. (“SBCI”), a company he created along with his wife and father-in-law for the
purpose of receiving the commission income.
Beginning in November 2005, Allen reported to Defendant Scott Ringold, the Managing
Director. Gardner & White’s business had been going through a downturn when it hired Allen
and Ringold in 2005 and, while Allen was hired to salvage and grow the business in his region,
there was an expectation of some business loss from 2005 to 2006. The gross commissions in
2005 for Allen’s district were $1,005,794 and the business plan he presented to Ringold in
November 2005 estimated gross commissions for 2006 to be $981,796.
The actual gross
commissions for 2006 ended up being $837,243.
As the 2006 calendar year progressed, there were more business losses and fewer gains
than either Allen or Ringold expected. Though mindful that Allen was spending much time
rebuilding relationships for Gardner & White, toward the end of 2006 Ringold expressed concern
to Allen about Allen’s region’s lack of progress. On February 9, 2007, Ringold sent Allen an
email advising him that the region’s goal for 2007 should be to increase gross commissions by
10% to $920,967. Allen thought the overall goal given to him was too high, but indicated to
Ringold that he would commit to increasing the recurring business from $700,000 to $845,000
for the year.
In July 2007, Ringold followed up a telephone conference with Allen by writing him a
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The Regional Vice President Agreement entered into by Allen states that it is “by and between
Gardner & White Corporation, an Indiana Corporation, and its affiliates Gardner & White, Inc.
and G & W Equity Sales, Inc. (collectively referred to herein as ‘Gardner & White’) and David
A. Allen (‘RVP’).”
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summary letter discussing the erosion of business in the region subsequent to his takeover. The
July 19, 2007 letter was written by Ringold after consultation with Jim Mandel and Shawn
Bogenrief, who were the owners and directors of Gardner & White, with whom Allen had
interviewed for his position. Ringold regularly reviewed regional sales figures with Mandel and
Bogenrief. In the letter, Ringold recognized the early difficulties Allen faced when he joined the
firm in 2005 and began restructuring the region, but Ringold also emphasized the ongoing
reduction in sales in his region and the need for Gardner & White to see “some immediate
improvement in the production from your office.” He went on to write:
Between now and the end of 2007 the owners and I are looking for significant
improvement in the following areas:
•
•
•
Increased sales of group and individual business
Increased group proposal activity
Increased activity in promoting and quoting HEBA and Group LTCI
David, at this point, I’m not going to specify exact numbers for any of these areas.
Suffice to say that we are looking for significant improvement. We do not wish to
enter 2008 wondering if you will ever turn this office around and achieve the
revenue conservation and production goals that have been mutually agreed upon.
That is why we must see some progress in the next six months.
Ringold closed the letter by indicating that they would review Allen’s progress at the end of the
third quarter.
On August 21, 2007, Allen had dinner with Ringold and Bogenreif. A comment at that
dinner fuels Allen’s claim of discrimination. Allen maintains that Ringold used a racial slur
during the course of dinner, and he described the surrounding circumstances during his
deposition:
Q:
A:
Now, tell me about the alleged discriminatory remark that Scott made at
Weber Grill.
Well, as I said, we were talking about sports and talking about athletes
and, you know, people of minorities and their successes. And something –
he said, well, you know – I believe the reference, as I recall, he said, you
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know, I’m from Kentucky, or my grandfather who’s from Kentucky said
he would have referred to people like that as – and he used the capital N
word. And then I said back to him, you know I’m African American. And
no response.
Q:
A:
So he wasn’t referring to you. He was referring to – he was saying what
his grandfather would have called pro athletes that were African
American?
Correct. Not just pro athletes, I think people of that color.
There is no evidence of any other occasion when Ringold used that particular pejorative term or
any other related to race.
At the close of the third quarter of 2007, Ringold sent Allen an email which summarized
fiscal year results and stated:
David, the last 24 months of gross commissions from your office look like this:
• Oct 05 thru Sept 06: $813,204
• Oct 06 thru Sept 07: $701,343
• That’s a loss of $111,860 or 13.8%
I will be scheduling a time with you this week (along with each RVP) to review
your YTD production and pipeline activity. I am looking for compelling
indicators and activity that will stop the bleeding and turn this around.
During the course of 2007, Ringold learned as well from Bogenrief that SBCI was late
paying bills and had bounced checks to creditors. With concerns mounting, Ringold conferred
with Mandel and Bogenrief regarding the continued problems with the sales numbers from
Allen’s region and whether he was the right person to grow that business. The three of them
agreed that Allen’s service as a RVP for Northern Illinois should be terminated. Though Allen’s
region had the worst performance of any which directly reported to Ringold, Allen was not the
only Gardner & White RVP to be terminated at that time. James Annear, who headed up
Gardner & White’s Iowa region, also had significant sales production and retention problems and
it was determined that he should also be terminated. Mr. Annear is Caucasian.
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Ringold prepared a “talking points” memo to take with him and use at termination
meetings he scheduled at the start of the new year. He met with Allen on January 4, 2008 in Oak
Brook, Illinois and provided him with written notice of the termination of his relationship with
Gardner & White, effective January 31, 2008. Using the same “talking points memo,” he met
with the RVP for Iowa Mr. Annear, the following day and terminated that relationship as well.
III.
Discussion
The same standard of proof applicable to claims made under Title VII of the Civil Rights
Act of 1964 applies to discrimination claims brought pursuant to 42 U.S.C. § 1981. Vakharia v.
Swedish Covenant Hosp., 190 F.3d 799, 806 (7th Cir. 1999). A plaintiff may choose from two
methods of proving a race discrimination claim, direct or indirect. The indirect method invokes
the familiar McDonnell Douglas template of demonstrating a prima facie case by showing that
the plaintiff: (1) is a member of a protected class; (2) was meeting his employer’s expectations;
when he (3) suffered an adverse employment action; which (4) caused him to be treated less
favorably than others similarly situated who were not members of the protected class.
McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973).
Allen, however, has chosen to pursue the direct method, wherein he relies on “either
direct evidence that acknowledges discriminatory animus on the part of the employer or
circumstantial evidence which establishes discriminatory motive through a longer chain of
inferences.” Grigsby v. LaHood, 628 F.3d 354, 358 (7th Cir. 2010) (citing Mach v. Will County
Sheriff, 580 F.3d 495, 499 (7th Cir. 2009)). To survive at the summary judgment stage, a
plaintiff relying on the “direct method” of proof, “must present ‘direct or circumstantial evidence
that creates a convincing mosaic of discrimination on the basis of race’.” Good v. University of
Chicago Medical Center, 673 F.3d 670, 674 (7th Cir. 2012) (quoting Winsley v. Cook County,
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563 F.3d 598, 604 (7th Cir. 2009)).
The Seventh Circuit has recognized three types of circumstantial evidence of intentional
discrimination: (1) suspicious timing, ambiguous statements, oral or written, behavior toward or
comments directed at other employees in the protected groups, and other bits and pieces from
which an inference of discriminatory intent might be drawn; (2) evidence that similarly-situated
employees received better treatment; and (3) the employer’s stated reason for the difference in
treatment is unworthy of belief. Troupe v. May Dept. Stores Co., 20 F.3d 734, 736 (7th Cir.
1994).
Allen argues that there is sufficient circumstantial evidence to allow his claim of
discrimination to be heard by a jury. As his centerpiece of circumstantial evidence, Allen points
to Ringold’s use of the racial slur “n*****” when describing his grandfather’s vernacular during
the course of the August 2007 dinner with Allen and Bogenrief. Allen notes that the comment
was made just five months prior to his actual termination and that one could infer that Ringold’s
decision to terminate him may have actually occurred as early as two months following that
comment. He also argues that, while Mandel and Bogenrief’s concurrence may have been
ultimately necessary for Allen to be terminated, Ringold was the one who provided those two
with all information and the recommendation that Allen be terminated.
Along with Ringold’s use of the racial slur, Allen asks the Court to consider that Ringold
and Gardner & White have provided varying reasons for his termination, including poor sales
results and the financial difficulties of SBCI. He notes as well that Ringold’s “talking points”
memo mentions “lack of production and activity from subordinates, lack of accountability and
failure to build and maintain external and internal relationships” as reasons for the decision. He
suggests these alleged differences are evidence of inconsistency in the basis for his firing. In the
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aggregate, Allen argues that there is sufficient circumstantial evidence to infer a nefarious
discriminatory intent behind his termination.
The evidence Mr. Allen relies on falls far short of weaving a convincing mosaic of
discrimination. Allen agrees that Ringold did not use the racial slur in reference to him or any
specific individual, but was articulating that term as a derogatory reference that his grandfather
would have used. While Ringold’s choice to use such a pejorative word in the course of a dinner
conversation may prove his ignorance to the wounds that its mere mention may open, it does not,
by itself, serve to support a conclusion that Ringold held a discriminatory bias against Allen or
African Americans. The context of his comment, as well as relevant authority, belies such an
automatic inference of discrimination.
Seventh Circuit authority supports the Court’s conclusion that the isolated remark is
insufficient to establish that a decision was motivated by discriminatory animus. See Hemsworth
v. Quotesmith.Com, Inc., 476 F.3d 487, 491 (7th Cir. 2007). In Hemsworth, an employee
claimed he was fired due to his age and relied on three age-related remarks made by various
members of management and the fact that 84% of employees let go in a reduction in force were
over 40 to prove his claim. Id. The comments the plaintiff offered as circumstantial evidence of
age bias included: (1) a comment to the effect that laying off a large number of employees over
40 could be a problem, which was made in a conversation between human resources director and
the company’s general counsel; (2) a comment made after the plaintiff returned to work
following a stroke that he “looked old and tired;” and (3) an age inappropriate remark made by a
manager during an employee evaluation. Id. The Seventh Circuit affirmed the district court’s
grant of summary judgment to the defendant employer and held that “a particular remark can
provide an inference of discrimination when the remark was (1) made by the decision maker, (2)
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around the time of the decision, and (3) in reference to the adverse employment action.” Id.
(citing Merillat v. Metal Spinners, Inc., 470 F.3d 685, 694 (7th Cir. 2006), and Hunt v. City of
Markham, Ill., 219 F.3d 649, 652-53 (7th Cir. 2000)).
While Ringold is certainly a decision maker with regard to the determination that ended
Gardner & White’s relationship with Allen, his insensitive remark at dinner was not made in
reference to an adverse employment action and was not made near the time of the decision to
terminate Allen. The uncontroverted evidence is that Ringold did not meet with Mandel and
Bogenrief to discuss the possibility of terminating Allen until after Ringold’s October 1st email
detailing Allen’s latest review of sales figures.
Of particular note as well is that Allen has not challenged the accuracy of the Gardner &
White sales records for his region or Defendants’ contention that he had the worst performance
against goals of any RVP. Nor can he show that others who were not African American were
treated better, because the day following his termination, Ringold terminated a Caucasian RVP
who also had poor sales performance.
Likewise, Allen’s claim that Gardner & White has given varying reasons for his
termination cannot survive scrutiny. Gardner & White has consistently maintained that Allen
was terminated for his poor performance. The three reasons in the “talking points” memo
prepared by Ringold (“lack of production and activity from subordinates, lack of accountability
and failure to build and maintain external and internal relationships”) are not in conflict with the
fact that Allen was terminated for poor production; rather, they address underlying reasons for
poor performance. None of the three decision makers has said that the concern they had with
SBCI’s check bouncing was the basis for terminating Allen. It was referenced only as an
additional concern, again related to poor sales, but also legitimate with respect to Gardner and
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White’s reputation. In the end, Allen has failed to set forth sufficient evidence for his claim to
survive summary judgment.
IV.
Conclusion
For the reasons detailed herein, Defendants’ Motion for Summary Judgment (Dkt. #121)
is GRANTED. The magistrate judge is requested to convene a status conference to address
whether Defendants/Counter-plaintiffs intend to proceed on their counterclaims and whether the
current case management plan is workable.
05/01/2012
_______________________________
Hon. Jane Magnus-Stinson, Judge
United States District Court
Southern District of Indiana
Copies to:
Amy Joan Adolay
KRIEG DEVAULT LLP
aadolay@kdlegal.com
Deborah Bourne Allen
dballen@strategicbenefitsconsult.com
Andrew Dutkanych III
BIESECKER DUTKANYCH & MACER LLC
ad@bdlegal.com
Elizabeth Gardner Russell
KRIEG DEVAULT LLP
erussell@kdlegal.com
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