Profumo v. Alliance for Community Health, L.L.C.
MEMORANDUM AND ORDER : IT IS HEREBY ORDERED that defendant's motion for summary judgment [Doc. # 46 ] is granted.A judgment in accordance with this Memorandum and Order will be entered. Signed by District Judge Carol E. Jackson on 8/1/13. (KKS)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
ROBERT J. PROFUMO,
ALLIANCE FOR COMMUNITY HEALTH,
d/b/a Molina Healthcare of
Case No. 4:12-CV-132 (CEJ)
MEMORANDUM AND ORDER
This matter is before the Court on defendant’s motion for summary judgment.
Plaintiff has filed a response in opposition to the motion and the issues are fully briefed.
Plaintiff Robert J. Profumo was the chief medical officer (CMO) for defendant
Alliance for Community Health, doing business as Molina Healthcare of Missouri, Inc.
(Molina Missouri), until his termination on July 5, 2011. Plaintiff alleges that defendant
wrongfully denied him severance benefits. He brings a claim for breach of contract.
He asserts in the alternative that the severance benefits constitute an employee
welfare plan covered by the Employee Retirement Income Security Act (ERISA), 29
U.S.C. §§ 1001 et seq. He brings a claim for benefits under § 1132(a)(1)(B) and a
claim for failure to provide plan information upon request under § 1132(c)(1)(B).
As required by the local rules of this district, defendant submitted a statement
of undisputed material facts and plaintiff submitted a response identifying those
material facts “as to which [he] contends a genuine issue exists.” L.R. E.D. Mo.
4.01(E). In response to more than 30 of defendant’s factual statements, plaintiff
states in part:
This is not a material fact because this conduct/incident did not cause
Molina to terminate Dr. Profumo’s employment. Following this conduct
and receiving this warning, in December of 2011 Dr. Profumo received
accolades from Molina for going above and beyond the call of duty and
assuming key duties from the former Chief Operating Officer of Molina’s
Missouri operation. . .
Doc. #58 at ¶¶ 17, 18, 19, et alia (emphasis added).
In most instances, this
paragraph is unresponsive to the fact being asserted and thus fails to assist the Court
in understanding the factual basis of the parties’ dispute.
More troubling, the
underlined language is incorrect: the “accolades” to which plaintiff refers were issued
in December 2010, months before some of the “conduct [or] incident[s].” Id. at ¶¶
42-50. Dec. 13, 2010 Memo [Doc. #56-7]. The Court does not believe that plaintiff
is attempting to manufacture a dispute of material fact for the purposes of defeating
summary judgment, but it is not the Court’s responsibility to check the parties’
statements of fact against the record to determine their accuracy. As a consequence
of the error, the Court has disregarded the entire paragraph where it appears in
plaintiff’s response to defendant’s statement of undisputed material facts.
Defendant Molina Missouri is part of Molina Healthcare, Inc., (Molina Inc.), a
multi-state healthcare organization that delivers government-sponsored healthcare
programs to low-income individuals.
In September 2007, defendant acquired
Community Care Plus. Plaintiff was the CMO for Community Care Plus and remained
in that position after defendant took over.
Plaintiff received written warnings on March 2, 2010, and May 3, 2010. [Docs.
#49-5 and #49-6]. The first warning was issued after an internal audit disclosed that
plaintiff improperly rejected an appeal decision overturning his initial denial of
coverage. Plaintiff’s action violated accreditation requirements and state and federal
regulations. The second warning was issued after plaintiff executed an agreement with
a new consultant without obtaining proper corporate review.
Plaintiff testified at
deposition that he was unaware that defendant’s hiring procedures had changed and
that he had obtained the plan president’s authorization to hire the consultant. Pl. Dep.
at 110-12 [Doc. #49-1].
Kristen Cerf is an associate general counsel for Molina Inc.
She states in
affidavit that she learned in February and March 2011 that at least 11% of Molina
Missouri’s providers were permitted to carry less than the required levels of insurance.
[Doc. #51 at ¶6]. According to Ms. Cerf, plaintiff authorized lower insurance levels for
rural providers without consulting the legal or corporate credentialing departments.
Id. at ¶7. Plaintiff testified that, at Ms. Cerf’s request, he investigated what other
healthcare networks required of rural providers. He informed Ms. Cerf that defendant
was “in line with” other networks, and she ultimately approved the practice. Pl. Dep.
In December 2010, defendant contracted with Comprehensive Behavioral Care
(CompCare) to provide behavioral health services to its Missouri Medicaid members.
Plaintiff was the chair of the oversight committee established to ensure that CompCare
was compliant with its contractual obligations. On June 3, 2011, plaintiff told Ms. Cerf
that CompCare had not adequately developed its provider network, and he asked her
to review a letter he intended to send to CompCare. Cerf. Aff. ¶8. Plaintiff also told
her that state regulators were scheduled to complete an onsite audit of Molina’s
behavioral health services on June 15 and 16, 2011. Id. at ¶9. Ms. Cerf asked plaintiff
whether he had any concerns about the audit in light of CompCare’s inadequate
network. Plaintiff responded that he did not foresee any issues because other health
plans had similar difficulties with rural counties. Id. at ¶10.
At the time of these events, Tina Gallagher was the president of Molina Missouri.
According to Ms. Cerf, Ms. Gallagher wanted to conduct a “mock audit” to identify
areas of concern. Plaintiff objected that there was not enough time to complete this
process and that the results would not be helpful. Id. at ¶12. Ms. Cerf states that it
became apparent in the days before the audit that plaintiff and his department were
“egregiously under-prepared, were not appropriately responsive, and that CompCare
was in breach of its Agreement with Molina Missouri, and Molina Missouri was in turn
in breach of the State Contract.” Id. at ¶13.
Before the audit, Ms. Cerf and Ms. Gallagher informed the staff, in writing, that
Molina Missouri would accept full responsibility for the failure to comply with the State
behavioral-health contract. Id. at ¶14. Despite this instruction, and without prior
notice to Ms. Cerf, plaintiff gave the auditors his own written statement. Stmt. [Doc.
#49-7]. Plaintiff told the auditors that CompCare had performed well on a pre-contract
assessment, with the exception of network adequacy for which a “stringent corrective
action plan” was developed.
He acknowledged that he had recently learned that
CompCare was not adequately performing its case management obligations -- this
failure was “completely unacceptable” and was addressed with “the highest levels of
CompCare.” Otherwise, “CompCare has been found to be compliant with all other
contractual requirements.” Kathie Mancini, Molina Inc.’s Regional Vice President of
Healthplan Operations, testified at deposition that the audit results contradicted
plaintiff’s representations to the auditors. Mancini Dep. Tr. at 35-36 [Doc. #62-2].
See also Notice of Breach of Contract dated June 15, 2011 (identifying material breach
of contract with respect to CompCare’s network adequacy, case management, record
keeping, and staffing) [Doc. #57-4].
The audit team was led by Ian McCaslin, M.D., director of Missouri’s Medicaid
program. Plaintiff acknowledged at deposition that the audit went poorly. Pl. Dep. at
138. For example, plaintiff “lost his temper” and “raised his voice” with the CompCare
representative. Id. at 80-81. Additionally, in an exit interview on June 16, the state
regulators expressed “their extreme dissatisfaction and frustration with Molina
Missouri’s and CompCare’s performance,” for which they held Molina Missouri solely
responsible. Cerf Supp. Aff. at ¶¶ 8-9 [Doc. #69-1]. The state regulators imposed a
corrective action plan that required defendant to complete a weekly manual review of
all cases, files, and clinical guidelines, to begin immediately. Mancini Aff. at ¶11 [Doc.
#50]; Pl. Dep. at 139. Defendant was required to hire additional staff to comply with
these requirements. Mancini Aff. at ¶11. The state also assessed fines of $90,000 per
month over a three-month period. Id. at 12.
In June 2011, Tina Gallagher drafted a “Final Written Warning” designed to
notify plaintiff of alleged performance deficiencies. See e-mail chain dated June 22 and
23, 2011 and attachment
The draft warning focused on events
preceding the audit, including plaintiff’s lack of concern regarding CompCare’s
inadequate network, his resistance to a “mock audit,” and his inability to state when
the audit would occur. The draft warning stated:
The disregard for the basic oversight of [CompCare] and the negligence
in allowing [it] to disregard [its] obligations to both Molina and the State
of Missouri is highly disturbing. We expect to see immediate and
sustained improvement in your performance and ultimately accepting
accountability for the lack of follow up and basic oversight which are
pivotal to being successful in your role.
Id. The draft warning anticipated a final review of plaintiff’s performance 45 days after
it was issued.
The Final Written Warning was never issued. On June 27, 2011, Ms. Gallagher
and Ms. Mancini each contacted employees in Molina Inc.’s human relations
department “to discuss Dr. Profumo.” See email chain dated June 27 and 28, 2011
[Doc. #56-9]. According to an e-mail authored by Abel Saborit, Jr., Molina Missouri’s
human relations manager,
[T]hey were going to do the route of a final warning but new information
came to Tina and Kathie’s attention . . . [T]he head of the State of
Missouri Medicaid [Dr. McCaslin] said that he refuses to work with
On July 5, 2011, plaintiff was called to a meeting with Tina Gallagher and Abel
Kathie Mancini attended by telephone and Kristen Cerf attended by
videoconference. Timeline [Doc. #56-6]; Cerf Aff. at ¶17. A security guard was
present at the meeting as a precaution. Id. at ¶18. Plaintiff was informed that his
employment was terminated for cause as a result of (a) his failure to properly oversee
the CompCare contract; (b) his failure to ensure compliance with policies, procedures,
and contractual obligations; (c) Molina Missouri’s failure to provide appropriate
behavioral health services; (d) the state’s dissatisfaction with his response to the postaudit corrective action plan; (e) his failure to understand the seriousness of the
noncompliance and take timely action; and (f) his inappropriate treatment of
CompCare’s vice president who complained that she felt threatened by plaintiff. Id.
Additional facts will be included as necessary to address the issues.
Rule 56(a) of the Federal Rules of Civil Procedure provides that summary
judgment shall be entered if the moving party shows “that there is no genuine dispute
as to any material fact and the movant is entitled to a judgment as a matter of law.”
In ruling on a motion for summary judgment the court is required to view the facts in
the light most favorable to the non-moving party and must give that party the benefit
of all reasonable inferences to be drawn from the underlying facts. AgriStor Leasing
v. Farrow, 826 F.2d 732, 734 (8th Cir. 1987). The moving party bears the burden of
showing both the absence of a genuine issue of material fact and its entitlement to
judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986);
Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).
Once the moving party has met its burden, the non-moving party may not rest on the
allegations of his pleadings but must set forth specific facts, by affidavit or other
evidence, showing that a genuine issue of material fact exists. United of Omaha Life
Ins. Co. v. Honea, 458 F.3d 788, 791 (8th Cir. 2006) (quoting Fed. R. Civ. P. 56(e)).
Rule 56 “mandates the entry of summary judgment, after adequate time for discovery
and upon motion, against a party who fails to make a showing sufficient to establish
the existence of an element essential to that party’s case, and on which that party will
bear the burden of proof at trial.” Celotex Corporation v. Catrett, 477 U.S. 317, 322
Plaintiff asserts that he is entitled to severance benefits and brings alternative
claims under contract law and ERISA.
Breach of Contract Claim
The parties agree that Missouri law applies to plaintiff’s breach of contract claim.
Summary judgment is appropriate in a contract case “where the language of the
contract is clear and unambiguous, such that the meaning of the portion of the
contract in issue is so apparent that it may be determined from the four corners of the
document.” Missouri Consol. Health Care Plan v. BlueCross BlueShield of Missouri, 985
S.W.2d 903, 908 (Mo. Ct. App. 1999) (internal quotations and citations omitted).
Plaintiff’s claim to severance benefits arises from a provision in an “offer letter”
from Molina Inc. dated September 7, 2007. [Doc. #49-3]. The letter specified that
plaintiff was an “at will” employee and offered severance payments in the event that
his employment was terminated without cause. An amendment on December 22, 2010
reiterated that plaintiff’s employment was “at will” and provided that he would be
entitled to severance benefits “in the event that the Company elects to terminate your
employment without cause . . .” Severance benefits, if applicable, would be paid in 18
monthly installments equal to the sum of plaintiff’s monthly base pay plus 1.5 times
the monthly premium for his medical benefits. Addendum [Doc. #49-4].
Plaintiff first argues that an ambiguity arises because the documents do not
define “termination without cause.” Courts must give words used in the contract “their
plain, ordinary meaning.” Care Ctr. of Kansas City v. Horton, 173 S.W.3d 353, 355
(Mo. Ct. App. 2005). Whether a contract is ambiguous is a question of law. Klonoski
v. Cardiovascular Consultants of Cape Girardeau, Inc., 171 S.W.3d 70, 72 (Mo. Ct.
App. 2005) (citation omitted). A contract is ambiguous only if its terms are reasonably
open to more than one meaning, or the meaning of the language used is uncertain.
Horton, 173 S.W.3d at 355. A contract provision is not ambiguous merely because the
parties disagree over its meaning. Id.
The absence of a definition of “termination without cause” does not render the
parties’ contract ambiguous because it has a “natural, ordinary and common-sense
meaning.” Blase v. City of Neosho, No. 10-003311-CV-S-JTM, 2012 WL 5362249 at
*3 (W.D. Mo. Oct. 30, 2012). “To be fired ‘without cause’ means that an employer
gave no reason or justification for the termination.” Id. (citation omitted); see also
Black’s Law Dictionary (9th ed. 2009) (dismissal “for cause” defined as dismissal “for
a reason that the law or public policy has recognized as sufficient to warrant an
employee’s removal.”). Here, defendant provided plaintiff with several reasons for his
termination, including his failure to ensure CompCare’s compliance with contractual
and regulatory requirements, resulting in the imposition of a corrective action plan and
Plaintiff insists that defendant must show that his termination was based on his
“performance.” See City of Beverly Hills v. Village of Velda, 925 S.W.2d 474, 476 (Mo.
Ct. App. 1996) (in context of services contract, termination “for cause” is a
This is a distinction without a difference -- the
standard that plaintiff advocates requires, “at a minimum, [that] defendant
communicate dissatisfaction with plaintiff’s performance of [his] duties and obligations
prior to or simultaneous with defendant’s notice of termination.”
enumerated to plaintiff several areas in which it determined that plaintiff had failed to
perform his obligations at the time of his termination.
Plaintiff argues that the “real” reason defendant terminated his employment was
to appease an angry state regulator. In support, plaintiff asserts that the only event
that occurred between June 22, 2011, when the draft Final Written Warning was being
discussed, and July 5, 2011, the date of his termination, was Dr. McCaslin’s alleged
refusal to work with plaintiff. Based on this chronology, plaintiff argues that defendant
“decided to throw [him] under the bus in order to appease” Dr. McCaslin “and influence
the results of the audit.”
It must be noted that the plaintiff is not claiming that he was terminated in
violation of public policy. An employer may terminate an at-will employee “for any
reason or for no reason.” Margiotta v. Christian Hospital Northeast Northwest, 315
S.W.3d 342, 345 (Mo. 2010) (en banc). However, the at-will doctrine is limited in
certain respects. Id. at 346.
Under the public-policy exception to at-will employment, an at-will
employee may not be terminated (1) for refusing to violate the law or any
well-established and clear mandate of public policy as expressed in the
constitution, statutes, regulations promulgated pursuant to statute, or
rules created by a governmental body or (2) for reporting wrongdoing or
violations of law to superiors or public authorities.
Fleshner v. Pepose Vision Inst., P.C., 304 S.W.3d 81, 92 (Mo. 2010) (en banc).
Plaintiff does not allege that he was terminated for refusing to violate a law or public
policy or because he reported such violations to superiors or public authorities. Rather,
he contends that defendant’s motive in terminating his employment had nothing to do
with his “performance” but was solely to appease the leader of the state audit team.
Assuming plaintiff could persuade a fact-finder of his version of events, he still cannot
prevail on his claim because a termination based on Dr. McCaslin’s alleged “dislike” of
him is still a termination “for cause.”
Viewing the evidence in the record in the light most favorable to plaintiff and
giving him the benefit of all reasonable inferences from that evidence, the Court finds
that defendant did not terminate plaintiff’s employment “without cause” and thus did
not breach its contractual obligation to pay him severance benefits.
judgment will be entered in favor of defendant on plaintiff’s breach of contract claim.
Plaintiff argues that the December 2010 addendum to the offer letter created
a “written severance plan,” entitling him to certain protections under ERISA.
Defendant states that plaintiff’s employment agreement is not a “plan” within the
meaning of ERISA.
An employer’s decision to extend benefits does not constitute, in and of itself,
the establishment of an ERISA plan. Kulinski v. Medtronic Bio-Medicus, Inc., 21 F.3d
254, 256 (8th Cir. 1994). A plan is established for ERISA purposes when a reasonable
person can ascertain (1) the intended benefits, (2) the class of beneficiaries, (3) a
source of funding, and (4) the procedures for receiving benefits. Petersen v. E.F.
Johnson Co., 366 F.3d 676, 678 (8th Cir. 2004).
It is not possible to discern a “class of beneficiaries” from the terms of the
December 2010 addendum to the 2007 offer letter. Other evidence in this case
establishes that plaintiff’s severance benefits constituted an individual contract with
terms specifically negotiated with him, rather than a uniform plan offered for the
benefit of a class of employees. Kathie Mancini testified that she was “not aware that
anyone else [at Molina] has these same severance benefits.” [Doc. #62-2 at 74]. Ms.
Mancini further testified that “[i]t is not the norm to have a severance benefit at
Molina. Most that I am aware of, at the most, are three months.” Id.
Plaintiff notes that Ms. Mancini also had a severance benefit and argues that this
evidence is sufficient to establish the existence of a plan. However, her severance
benefit was triggered only by a change of control and was limited to twelve months.
Id. at 72.
This evidence establishes only that Ms. Mancini also had a separate,
individually-negotiated contract with defendant, not that defendant established a plan
for a class of employees. “[A]n individual contract providing severance benefits to a
single executive employee is not an ERISA employee welfare benefit plan within the
meaning of 29 U.S.C. § 1002(1).” Dakota, Minnesota & E. R.R. Corp. v. Schieffer, 648
F.3d 935, 938 (8th Cir. 2011).
The severance benefits in the December 2010
addendum do not constitute a “plan” under ERISA and defendant is entitled to
summary judgment on plaintiff’s ERISA claims.
IT IS HEREBY ORDERED that defendant’s motion for summary judgment [Doc.
#46] is granted.
A judgment in accordance with this Memorandum and Order will be entered.
CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 1st day of August, 2013.
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