Dillon Auto Sales, Inc v. Troutner

Filing 149

MEMORANDUM AND ORDER - Defendant's partial motion for summary judgment 129 is denied in all respects. Plaintiff's motion for summary judgment 133 is granted in part and denied in part, as follows: a. Defendant's counterclaims invo lving payments allegedly owing under an extended warranty program are dismissed with prejudice; b. Defendant's counterclaims involving payments allegedly owing as "deferred compensation" are dismissed with prejudice; c. Defendant' s "Nebraska public policy" counterclaim involving retaliation for allegedly opposing race-based discrimination is dismissed with prejudice; and c. In all other respects, Plaintiff's motion is denied. Ordered by Senior Judge Richard G. Kopf. (CS)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
DILLON AUTO SALES, INC.,
Plaintiff,
v.
TERRY L. TROUTNER,
Defendant.

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8:14CV104

MEMORANDUM
AND ORDER

Plaintiff, Dillon Auto Sales, Inc. (“Dillon”), claims it is owned money by its
former general manager, Defendant, Terry L. Troutner (“Troutner”), because he: (1)
retained $4,500.00 in cash deposits; (2) used a company-issued credit card for
personal purchases and failed to certain repay loans, totaling at least $99,174.99 (as
of March 31, 2015); (3) took two vehicles valued at $12,394.00; and (4) received
bonuses and other compensation to which he was not entitled. Five theories of
recovery are pleaded: (1) unjust enrichment; (2) constructive trust; (3) fraud; (4)
constructive fraud; and (5) conversion. (Amended Complaint, Filing No. 55.)1
Troutner counterclaims that Dillon: (1) owes him unpaid wages for January
2014 and a bonus of approximately $80,000.00 for calendar year 2013 under the
Nebraska Wage Payment Collection Act, Neb. Rev. Stat. §§ 48-1228 to 48-1234; (2)
must make an accounting under Neb. Rev. Stat. § 48-1230.1 for bonuses earned
during previous years and his one-half share of profits derived from an extended
warranty program; (3) breached his employment agreement by failing to (a) provide
30 days notice before terminating the agreement without cause, (b) pay severance
benefits: (c) pay bonuses; and (d) pay his share of profits from the extended warranty

1

The action was filed in the District Court of Lancaster County, Nebraska, but
Troutner removed it to federal court based on diversity jurisdiction.

program; (4) terminated his employment in violation of Nebraska public policy after
Troutner raised concerns about Dillon’s fraudulent tax practices and its termination
of African-American employees; (5) terminated his employment in violation of 42
U.S.C. § 1981 because he hired the African-American employees and opposed their
termination; (6) terminated his employment in violation of Title VII, 42 U.S.C.
§ 2000e-2, because he hired the African-American employees and opposed their
termination; (7) terminated his employment in violation of the Nebraska Fair
Employment Practice Act (NFEPA), Neb. Rev. Stat. § 48-1114,2 because he hired the
African-American employees and opposed their termination; and (8) was unjustly
enriched by failing to account for profits generated by the extended warranty program.
(Third Amended Answer and Counterclaim, Filing No. 56.)
The parties have filed cross-motions for summary judgment (Filing Nos. 129,
133). Dillon’s motion is made with respect to all claims and counterclaims, whereas
Troutner’s motion only concerns the first three counterclaims listed above.
With respect to Dillon’s claims, the court finds there are genuine issues of
material fact that preclude the entry of summary judgment. See Fed. R. Civ. P. 56(a).
The court concludes that Troutner’s counterclaims involving the extended
warranty program fail as a matter of law because of the applicable statute of frauds,
Neb. Rev. Stat. § 36-202 (“In the following cases every agreement shall be void,
unless such agreement, or some note or memorandum thereof, be in writing, and
subscribed by the party to be charged therewith: (1) Every agreement that, by its
terms, is not to be performed within one year from the making thereof ....”). Troutner
argues that the statute of frauds does not apply to the alleged profit-sharing agreement
because of promissory estoppel, but there is no legal merit to this argument.
“Promissory estoppel is not an exception to the statute of frauds.” Fast Ball Sports,
LLC v. Metro. Entm’t & Convention Auth., 835 N.W.2d 782, 794 (Neb. App. 2013)
2

Troutner’s pleading incorrectly cites Neb. Rev. Stat. § 48-1004.
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(citing Farmland Service Coop, Inc. v. Klein, 244 N.W.2d 86 (Neb. 1976); see also
Rosnick v. Dinsmore, 457 N.W.2d 793, 800 (Neb. 1990) (promissory estoppel cannot
be used to circumvent protection provided by statute of frauds).
To the extent Troutner is basing his claim for bonuses on the employment
agreement’s provision for “deferred compensation,” the court also concludes as a
matter of law that he is not entitled to any payment. The provision reads in part:
7. Consideration for Restrictive Covenants. As consideration for
the Restrictive Covenants, Employee shall be entitled to receive a funded
deferred compensation payment calculated as a percentage of the net
profits derived from the Employer’s business which he manages (the
“Deferred Compensation”).
(a) Percentage Amount. Effective as of January 1, 2007 ... the total
percentage of net profits of the Employer’s business to be deposited with
respect to the Deferred Compensation plan shall be ten (10) percent.
(b) Profits Calculated Annually. ... The Deferred Compensation,
if any, shall be payable on the earlier of the date that Employee (i) dies
or (ii) attains age sixty-five (65), provided that he is employed by
Employer on such date and provided that Employee has not violated the
terms of the Restricted (sic) Covenants....
(Filing No. 134-1 at CM/ECF pp. 3-4 (emphasis supplied)). By its express terms, this
provision does not apply because Troutner is less than 65 years old. Any claimed oral
agreement for the payment of an annual bonus equal to ten percent of Dillon’s profits
is unenforceable because of the statute of frauds.
The court concludes as a matter of law that Troutner cannot rely on “Nebraska
public policy” to support his claim that he was terminated for raising concerns about
Dillon’s termination of African-American employees. The clearest statement of
Nebraska public policy on this subject is found in NFEPA, which declares that “[i]t
shall be an unlawful employment practice for an employer ... to discharge ... any
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individual .... because of such individual’s race” or “to discriminate against any of his
or her employees ... because he or she ... has opposed any practice made an unlawful
employment practice by the Nebraska Fair Employment Practice Act, ....” Neb. Rev.
Stat. §§ 48-1104(1) and 48-1114(1). Because Troutner has an adequate statutory
remedy under NFEPA,3 his alleged “Nebraska public policy” claim will be dismissed
insofar as he contends he was discharged for opposing racial discrimination. See
McClure v. Am. Family Mut. Ins. Co., 223 F.3d 845, 856 (8th Cir. 2000) (“Courts
have authorized judicial remedies based on public policy only when statutory
remedies were lacking.”).
Troutner also claims he was discharged in violation of “Nebraska public policy”
for raising concerns about Dillon’s fraudulent tax practices. With respect to this claim,
NFEPA’s “whistleblower retaliation” provision broadly declares that “[i]t shall be an
unlawful employment practice for an employer to discriminate against any of his or
her employees ... because he or she ... has opposed any practice or refused to carry out
any action unlawful under federal law or the laws of this state.” Neb. Rev. Stat. §
48-1114(3). Tax evasion is a felony under state and federal law. See Neb. Rev. Stat.
§ 77-27,113; 26 U.S.C. § 7201. Thus, although alleged as a “Nebraska public policy”
claim, the court concludes that Troutner may be entitled to relief under NFEPA, and
the claim will be treated as having been alleged under the Act.4 See, e.g., Ludlow v.
BNSF Ry. Co., 788 F.3d 794 (8th Cir. 2015) (employee engaged in protected activity
under NFEPA by cooperating with federal forgery investigation). Troutner argues in
his brief that he also was discharged for opposing drug and alcohol use on the
dealership property, but his pleadings contain no such allegations.

3

Troutner’s race-based retaliation claim under NFEPA is essentially the same
as his Title VII claim. See City of Fort Calhoun v. Collins, 500 N.W.2d 822, 825
(Neb. 1993) (NFEPA is patterned after Title VII).
4

The court notes that the Nebraska Supreme Court has held that a NFEPA
violation is cognizable under Neb. Rev. Stat. § 20-148 without first exhausting
administrative remedies. See Goolsby v. Anderson, 549 N.W.2d 153, 157 (Neb. 1996).
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As to all other counterclaims, the court finds there are genuine issues of
material fact that preclude the entry of summary judgment.
Accordingly,
IT IS ORDERED:
1.

Defendant’s partial motion for summary judgment (Filing No. 129) is
denied in all respects.

2.

Plaintiff’s motion for summary judgment (Filing No. 133) is granted in
part and denied in part, as follows:
a.

Defendant’s counterclaims involving payments allegedly owing
under an extended warranty program are dismissed with prejudice;

b.

Defendant’s counterclaims involving payments allegedly owing
as “deferred compensation” are dismissed with prejudice;

c.

Defendant’s “Nebraska public policy” counterclaim involving
retaliation for allegedly opposing race-based discrimination is
dismissed with prejudice; and

c.

In all other respects, Plaintiff’s motion is denied.

DATED this 30th day of August, 2016.
BY THE COURT:
s/ Richard G. Kopf
Senior United States District Judge

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