Dugal v. FortuneBank
Filing
19
MEMORANDUM AND ORDER (See Full Order) IT IS HEREBY ORDERED that Defendant's motion to dismiss Count II of Plaintiff's complaint (ECF No. 6 ) is DENIED. Signed by Magistrate Judge Patricia L. Cohen on 12/11/17. (EAB)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
AMANDA DUGAL,
)
)
)
)
)
)
)
)
)
Plaintiff,
vs.
FORTUNEBANK,
Defendant.
Case No. 4:17-CV-2318 PLC
MEMORANDUM AND ORDER
This matter is before the Court on Defendant FortuneBank’s motion to dismiss Count II
of Plaintiff Amanda Dugal’s complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). 1
(ECF No. 6). Plaintiff opposes the motion. (ECF No. 11). For the reasons that follow, the Court
denies Defendant’s motion to dismiss.
I.
Factual and Procedural Background
The facts, as alleged in the complaint, are as follows: Plaintiff worked for Defendant as a
loan coordinator from January 2015 until the date of her termination.2 (ECF No. 1 at ¶ 9). From
January 2015 until September 30, 2016, Plaintiff reported directly to Defendant’s chief lending
officer and regional president, Darren Gosling. (Id. at ¶ 12).
Gosling had developed an over-the-road truck-loan portfolio (“Gosling Portfolio”) that
was “underperforming and experiencing deepening losses.” (Id. at ¶¶ 14-15). In 2013 or 2014,
investigators from the Federal Deposit Insurance Corporation (“FDIC”) reviewed the Gosling
Portfolio and advised bank management that they “should take losses and shut down the
1
Plaintiff Amanda Dugal and Defendant FortuneBank consented to the jurisdiction of the
undersigned pursuant to 28 U.S.C. § 636(c).
2
Plaintiff’s complaint does not allege her termination date.
1
portfolio.” (Id. at ¶ 16). Instead of heeding that advice, Defendant’s chairman, Dan Jones,
directed Gosling to “turn the [Gosling P]ortfolio around and make a profit so that the bank would
not take a loss.” (Id. at ¶¶17-18).
Gosling left Defendant’s employment on September 30, 2016. (Id. at ¶ 19). Shortly
thereafter, Jones invited Plaintiff to a private meeting and “asked [her] for a commitment of
loyalty to the bank.” (Id. at ¶ 20).
In February 2017, the FDIC again inspected the Gosling Portfolio, and an FDIC
investigator interviewed Plaintiff. (Id. at ¶¶ 21-22). After providing the FDIC investigator
“truthful responses and information,” Plaintiff recounted her interview to “her superiors at the
bank[.]” (Id. at ¶¶ 22-23).
A short time later, Defendant placed Plaintiff on “administrative leave.” (Id. at ¶ 27).
Defendant assured Plaintiff that “she [was] not being fired,”3 and Defendant’s attorney informed
Plaintiff that “[Plaintiff and Defendant] needed to separate during the [FDIC] investigation.” (Id.
at ¶¶ 27-28). Defendant presented Plaintiff with a separation agreement that was “non-standard”
and “seemed designed to protect [Defendant] against a possible FDIC investigation.” (Id. at ¶¶
30-32). Plaintiff refused to sign the agreement, and Defendant terminated her employment. (Id.
at ¶ 33).
On April 7, 2017, Defendant sued Plaintiff and Gosling in state court for breach of
fiduciary duty and civil conspiracy.4 (Id. at ¶¶ 34-35). Plaintiff states that Defendant filed the
state-court action “in order for insurance coverage to apply so that the bank would not have to
3
Plaintiff alleged neither the name nor title of the individual who made this assurance.
The court takes judicial notice of the pending state-court docket of FortuneBank v. Gosling, et
al., Cause No. 17JE-CC00281, (Circuit Court of Jefferson County, filed April 7, 2017). See e.g.,
Matter of Phillips, 593 F.2d 356, 358 (8th Cir. 1979) (per curiam) (a federal court may properly
take judicial notice of state-court proceedings).
4
2
take a loss on the [Gosling] Portfolio.” (Id. at ¶ 37). Plaintiff filed her two-count complaint in
this Court on August 28, 2017. (Id.). In Count I, Plaintiff alleges that Defendant terminated her,
in violation of the FDIC’s prohibition on retaliation, 12 U.S.C. § 1831j, because she provided
information to the FDIC “regarding a possible violation of law or regulation, and/or gross
mismanagement, and/or an abuse of authority by the Bank and certain directors, officers, and
other employees of the institution.” (Id. at ¶¶ 39-44).
In Count II, Plaintiff alleges that Defendant terminated her employment in violation of
public policy. (Id. at ¶¶ 45-54). Citing the False Statements Act, 18 U.S.C. § 1001, et seq., and
specifically referencing 18 U.S.C. § 1007,5 Plaintiff claims that “[f]ederal law requires people to
be truthful with federal investigators.” (Id. at ¶ 45). Additionally, Plaintiff asserts that her
termination contravened the Missouri public policy “encourag[ing] employees to communicate
with government investigators about their employer’s actions without fear of retaliation.” (Id. at
¶ 46). According to Plaintiff, Defendant violated federal and Missouri public policy because it
terminated her (1) for “cooperating with the F.D.I.C. investigation into the [Gosling Portfolio]”
and in an effort to (2) make her unavailable to FDIC investigators and (3) “utilize her in filing a
fraudulent insurance claim.” (Id. at ¶ 47).
Defendant moved to dismiss Plaintiff’s Count II for failure to state a claim. (ECF No. 6).
Defendant argues that Plaintiff’s claim fails because “it is not based on a well-established or
clear mandate of public policy.” (Id. at ¶ 2).
In regard to Plaintiff’s reliance on 18 U.S.C. §
5
Section 1001 imposes criminal liability for making false statements to federal investigators. 18
U.S.C. § 1001(a). Section 1007, which applies specifically to statements to the FDIC, provides:
“Whoever, for the purpose of influencing in any way the action of the Federal Deposit Insurance
Corporation, knowingly makes or invites reliance on a false, forged, or counterfeit statement,
document, or thing shall be fined not more than $1,000,000 or imprisoned not more than 30
years, or both.” 18 U.S.C. § 1007.
3
1007, Defendant contends that the statute “merely sets forth the criminal penalties for individuals
who provide untruthful information to the FDIC” and Plaintiff does not allege that Defendant
asked her to violate that statute. (ECF No. 7 at 7). As to Plaintiff’s claim that her termination
violated Missouri public policy, Defendant notes that Plaintiff failed to cite any Missouri statute
or regulation to support her claim. (Id. at 6).
Defendant states: “[Plaintiff’s] blanket claim
about Missouri public policy is insufficient to establish a clear mandate of public policy
sufficient to support a claim for wrongful discharge.” (Id.).
In her memorandum in opposition to Defendant’s motion to dismiss, Plaintiff asserts,
without citation to authority, that “Missouri law provides a cause of action for wrongful
termination for retribution against an employee for participating in an investigation and refusing
to participate in an illegal scheme.”6
Plaintiff reiterates that Defendant terminated her
employment “because of the FDIC investigation” and her “refusal to participate in a fraudulent
insurance claim made by [Defendant] to cover their losses on bad loans.” (ECF No. 11 at 4).
In reply, Defendant asserts that, because Plaintiff failed to identify “a clearly mandated
public policy as codified in a statute, a regulation, or similar source with respect to her claim that
‘Missouri public policy encourages employees to communicate with government investigators,’
[Plaintiff] has not stated a claim.” (ECF No. 13 at 2). As to 18 U.S.C. § 1007, the statute
Plaintiff referenced in her complaint, Defendant argues that it is “a general and broad criminal
statute” that “does not even remotely address the claims [Plaintiff] makes in her Complaint[.]”
6
The only case Plaintiff cites in support of this proposition is Hughes v. Bodine Aluminum, Inc.,
328 S.W.3d 353 (Mo.App.E.D. 2010). However, that case does not involve an employee’s
participation in an investigation. In Hughes, the defendant employer terminated the plaintiff, a
temporary employee, because the plaintiff refused his supervisors’ requests for commercial
bribes in exchange for job security. Id. at 355. Under Missouri law, commercial bribery is a
misdemeanor. Id. at 354 (citing Mo. Rev. Stat. § 570.150). The Court of Appeals reversed the
trial court’s summary judgment in favor of the defendant because the facts alleged by the
plaintiff “violate a strong mandate of public policy against bribery.” Id. at 356.
4
(Id. at 3).
II.
Legal Standard
Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of the
claim showing that the pleader is entitled to relief.” Erickson v. Pardus, 551 U.S. 89, 93 (2007)
(per curiam) (quoting Fed. R. Civ. P. 8(a)(2)). A viable complaint must include “enough facts to
state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570 (2007). “A claim has facial plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the misconduct
alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). When considering a motion to dismiss,
the reviewing court must accept the plaintiff’s factual allegations as true and construe them in the
plaintiff’s favor. Id.
III.
Discussion
Defendant asserts that Plaintiff failed to state a claim for wrongful discharge because she
did not identify a well-established or clear mandate of public policy. (ECF No. 6). Plaintiff
counters that she pleaded sufficient facts to state a claim that Defendant terminated her
employment in violation of a “clear, not vague [public] policy of truthfully participating in
federal investigations.” (ECF No. 11 at 2).
Plaintiff’s employment relationship with Defendant is governed by Missouri law. See,
e.g., Callantine v. Staff Builders, Inc., 271 F.3d 1124, 1130 (8th Cir. 2001). Under Missouri law,
“[e]mployers may terminate the employment of at-will employees at any time ‘for any reason or
for no reason.’”7
Ballard v. Siwak, 521 S.W.3d 296, 300 (Mo.App.E.D. 2017) (quoting
Margiotta v. Christian Hosp. Ne. Nw., 315 S.W.3d 342, 346 (Mo. banc 2010)).
7
It is undisputed that Plaintiff was an at-will employee of Defendant.
5
“However, an
employer’s rights are not unfettered, and Missouri has recognized that an employer may not
terminate an at-will employee where the termination would violate a clear mandate of public
policy.” Id.
The public-policy exception prevents employers from terminating at-will employees “for
doing that which is beneficial to society.” Fleshner v. Pepose Vision Inst., 304 S.W.3d 81, 92
(Mo. banc 2010). Under this “narrowly drawn” exception, an employer may not terminate an atwill employee for:
(1) refusing to perform an illegal act or an act contrary to a strong mandate of
public policy; (2) reporting the employer or fellow employees to superiors or
third parties for their violations of law or public policy; (3) acting in a manner
that public policy would encourage; or (4) filing a claim for workers’
compensation.
Ballard, 521 S.W.3d at 300 (citing Delaney v. Signature Health Care Found., 376 S.W.3d 55, 57
(Mo.App.E.D. 2012)).
To prevail in an action for wrongful discharge, a plaintiff must identify a “specific
statute, regulation or constitutional provision that makes ‘a clear statement of public policy.’”
Ballard, 521 S.W.3d at 300 (quoting Hedrick v. Jay Wolfe Imports I, LLC, 404 S.W.3d 454, 459
(Mo.App.W.D. 2013)). However, “a plaintiff need not rely on an employer’s direct violation of
a statute or regulation.” Fleshner, 304 S.W.3d at 96 (citing Kirk v. Mercy Hosp. Tri-County, 851
S.W.2d 617, 621 (Mo.App.S.D. 1993)). “Instead, the public policy must be reflected by a
constitutional provision, statute, regulation promulgated pursuant to statute, or a rule created by a
governmental body.” Id. (emphasis in original).
Here, Plaintiff claims wrongful termination under the third public-policy exception to the
at-will employment doctrine: acting in a manner that public policy would encourage. More
specifically, Plaintiff alleges that her termination violated “Missouri public policy encouraging
6
employees to communicate with government investigators about their employers’ actions
without fear of retaliation.” (ECF No. 1 at ¶ 46). In support of her claim, Plaintiff cites the False
Statements Act, 18 U.S.C. Sections 1001, et seq., and specifically points to Section 1007. (ECF
No. 1 at ¶¶ 45, 46).
The False Statements Act broadly proscribes false statements made directly or indirectly
to the federal government. See United States v. Garfinkel, 29 F.3d 1253, 1255 (8th Cir. 1994).
Section 1007 specifically prohibits “false, forged, or counterfeit” statements or documents made
“for the purpose of influencing in any way the action of the [FDIC.]” 18 U.S.C. § 1007. In
criminalizing such false statements, the statute clearly espouses a public policy encouraging
truthfulness in all communications with FDIC agents. See, e.g., Bryan v. Cmty. Bank & Tr., No.
3:14-CV-05111 MDH, 2014 WL 5320867, at *4 (W.D.Mo. Oct. 17, 2014) (in citing the DoddFrank Mortgage Reform Act, which clearly reflected a “public policy to eliminate fraud in the
context of mortgage loan applications,” the plaintiff sufficiently identified the public policy
allegedly violated).
In support of its position that the statutes cited by Plaintiff do not constitute clear
mandates of public policy, Defendant cites Margiotta, 315 S.W.3d at 346-48. (ECF No. 7 at 5).
That case is inapposite. There, the plaintiff employee, a medical image technician, alleged that
the defendant hospital terminated him because he reported incidents of patient-care safety
violations to his supervisors. Id. at 345. In his petition alleging wrongful discharge in violation
of public policy, the plaintiff cited: (1) a federal regulation empowering patients to assert their
right “to receive care in a safe setting”; and (2) a state regulation relating to building safety, not
patient care. Id. at 348. The Missouri Supreme Court affirmed summary judgment for the
defendant because it found that the regulations “cited by the [plaintiff] were so vague and
7
generalized that they were inapplicable to the conduct he reported to his supervisors[.]” Farrow
v. Saint Francis Med. Ctr., 407 S.W.3d 579, 596 (Mo. banc 2013) (discussing Margiotta, 315
S.W.3d at 347-48).
Unlike the federal and state regulations cited by the plaintiff in Margiotta, the statute at
issue here, which specifically prohibits false statements to FDIC agents, is neither vague nor
general. To the contrary, 18 U.S.C. Section 1007 reflects a clear mandate of public policy
encouraging honest communications with FDIC agents.
The cited statutes, coupled with
Plaintiff’s allegations that Defendant terminated her employment because she participated in an
FDIC investigation, sufficiently identify the public policy allegedly violated to withstand
dismissal for failure to state a claim.
See, e.g., Fleshner, 304 S.W.3d at 96-97 (because
Missouri’s minimum wage law reflected a public policy encouraging employees to cooperate
with government labor investigators, the plaintiff employee made a submissible case for
wrongful discharge when she alleged that the defendant terminated her employment because she
spoke with investigators from the United States Department of Labor).
IV.
Conclusion
For the above reasons, the Court finds that Plaintiff’s complaint states a claim for
wrongful discharge that is plausible on its face. Accordingly, after careful consideration,
IT IS HEREBY ORDERED that Defendant’s motion to dismiss Count II of Plaintiff’s
complaint (ECF No. 6) is DENIED.
PATRICIA L. COHEN
UNITED STATES MAGISTRATE JUDGE
Dated this 11th day of December, 2017
8
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?