Crowley v. St. Rita's Medical Center et al
Memorandum Opinion and Order. Defendants' Objection regarding the Affidavit of Lisa Plant 38 , 39 denied. Defendants' Motion for Summary Judgment 32 is granted as to Count I of the Complaint. Count II is not a separate claim, but rather a request for punitive damages inextricably tied to Count I, and therefore it too is dismissed. No other claims remaining, this Court enters final judgment for Defendants. Judge Jack Zouhary on 3/20/2013. (D,L)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
Case No. 3:12 CV 369
-vsJUDGE JACK ZOUHARY
St. Rita’s Medical Center, et al.,
Plaintiff Christine Crowley filed this action alleging Defendant St. Rita’s Medical Center (“St.
Rita”) terminated her employment because she raised concerns about Defendant John Renner,
St. Rita’s chief financial officer, intentionally falsifying corporate financial documents. She asks this
Court to recognize a new public policy exception to Ohio’s employment at-will doctrine in R.C.
§ 1702.54, and to find that St. Rita unlawfully terminated her employment. Defendants moved for
summary judgment (Doc. 32), arguing that R.C. § 1702.54 does not evince a sufficiently clear public
policy to create an exception to the employment at-will doctrine and, even if it does, Plaintiff was
fired for permissible performance reasons. What Plaintiff views as intentional falsification of
corporate documents, Defendants characterize as merely an accounting dispute between Plaintiff and
Renner. Plaintiff opposes the Motion (Doc. 35), attaching a signed but unnotarized affidavit.
Defendants move to strike or in the alternative object to this affidavit (Docs. 38 & 39). Both Motions
are fully briefed and pending before this Court, which held a record hearing on the matter on February
21, 2013. This Court has diversity jurisdiction.
St. Rita is an Ohio not-for-profit corporation operating medical treatment facilities throughout
Ohio, including an acute care hospital in Lima, and is owned by Catholic Health Partners (“CHP”),
which operates regional health systems in Ohio and Kentucky (Doc. 1). In December 2008, St. Rita
hired Plaintiff as its Administrative Director of Revenue Cycle with responsibility for collecting
revenue from patient accounts, developing managers, and cultivating high morale (Doc. 1-1; Crowley
Dep. 46–47). From August 2009 until her termination, Plaintiff reported to Renner (Renner Dep. 5).
During her employment, Plaintiff exercised certain responsibilities over patient accounts: she
submitted certain financial information to corporate headquarters, attended monthly revenue meetings,
and met regularly with Renner to discuss the department and her performance. One area to which
Plaintiff was exposed was accounts receivable (“AR”), which represents the money owed to St. Rita
by patients, insurers, and the federal government (Crowley Dep. 141). The AR’s value is reflected
in St. Rita’s monthly financial statements, which can be used by bondholders, banks, and other
interested parties to assess St. Rita’s financial position and performance (Rieger Dep. 70; Platzke Dep.
29). Some quantity of the AR is comprised of “bad debts” which are considered unlikely to be
collected based on the amount of time the debts have been outstanding.
To collect revenues, St. Rita’s policy is to send debts outstanding for 45 days to collection
agencies, which are then paid a contingency fee for any amounts collected (Youngblood Dep. 45).
If, after 120 days payment is not received, the accounts are treated as “bad debts” -- a designation
determined by St. Rita’s chief financial officer. This is an informal guideline and typically St. Rita
is able to recover approximately twelve to fourteen percent of these delinquent accounts (Crowley
Dep. 63, 107, 123–24). During Plaintiff’s employment, St. Rita shifted from using one collection
agency to five different agencies handling various aspects of the collection process (id. at 61). This
changeover delayed the timely collection of revenue, which in turn increased the amount of “bad
debts” during 2009–10 (id. at 63–64).
St. Rita uses software known as Crowe Analytics to ensure sufficient reserves are assigned
to cover bad debts based on past collection history (Rieger Dep. 49; Renner Dep. 63). Depending on
this history, bad debts are automatically and fully reserved if they have been outstanding between 180
and 365 days (Crowley Dep. 84–85; Rieger Dep 81; Youngblood Dep. 63), and the reserves
automatically reconcile with the amount of bad debt at some point in the fiscal year (Rieger Dep. 81).
This reserve methodology and its valuation of AR is audited twice annually by an outside firm, and
the auditors reported no issues in 2009 or 2010 (Rieger Dep. 65, 107, 111).
Variances arise over the course of a fiscal year between revenue and bad debts such that
reserves may require adjusting (Youngblood Dep. 53–54). St. Rita’s financial team held monthly “net
revenue calls” during which all financials were discussed, including the amounts and impacts of AR,
bad debts, and reserves (Rieger Dep. 37–38; Crowley Dep. 65–68). It was during these calls, and
other interactions with Renner and others, that Crowley expressed concern regarding the amount of
cash reserves relative to bad debts. She claimed that the numbers published in the financial statements
did not match up with “dashboard” data, a document she submitted monthly (Crowley Dep. 70–71).
Because the numbers did not match up, Plaintiff believed Defendants were publishing inaccurate
monthly financial statements.
Unlike the financial statements, though, the dashboard is an unpublished internal document
that does not include information related to net revenues or reserves -- it is useful in assessing the
performance of patient accounting (for which Plaintiff was responsible), but not useful in determining
Defendants’ financial strength (Rieger Dep. 55, 59, 64). St. Rita’s director of finance, Tim Rieger,
who prepares the financial statements and is a certified public accountant, attempted to explain the
distinctions to Crowley, but was unsuccessful (Rieger Dep. 71–74). Plaintiff alleges she began
receiving bad performance reviews once she disagreed with Renner on how St. Rita calculated its
reserves. She also alleges, and Defendants deny, that Renner at least once asked Plaintiff to modify
the information in her dashboard document to match up with the data on the financial statements
prepared by Rieger (Crowley Dep. 78–80). The simmering dispute between Plaintiff and Renner over
reserves came to a head following a June 6, 2010 report to the executive team where Defendants wrote
off approximately $10 million (Crowley Dep. 43). Plaintiff blamed the loss on Renner’s decisions
regarding reserve amount, and reported her impression to Renner, as well as Deborah Youngblood,
a corporate vice president (id. at 42–43, 140–41).
Separate from the dispute over AR, Plaintiff’s employment with St. Rita was relatively
tumultuous. Several St. Rita employees testified they found Plaintiff to be an ineffective manager
from early in her tenure (Youngblood Dep. 24). Some found Plaintiff to be unreliable (Cason Dep.
41–42), or unwilling to make changes regarding her management of accounts (Renner Dep. 47;
Youngblood Dep. 29–30, 64–66). Further, Rieger questioned her ability to understand financial
reporting (Rieger Dep. 40–41) and differed with her regarding reporting of financial information (id.
at 38). Her performance reviews reflected these issues, and her overall performance grade for 2009
was noted as “needs improvement” (Ex. 7 at 1). Defendants alleged, and Plaintiff does not appear to
dispute, that she walked out in the middle of a performance review in which Renner discussed the
reasons for the “needs improvement” grade (Renner Dep. at 153); and walked out again at a June 2010
meeting, during which her employment was terminated. Plaintiff filed this lawsuit in February 2012.
SUMMARY JUDGMENT STANDARD
Pursuant to Federal Civil Rule 56(a), summary judgment is appropriate where there is “no
genuine issue as to any material fact” and “the moving party is entitled to judgment as a matter of
law.” This burden “may be discharged by ‘showing’—that is, pointing out to the district court—that
there is an absence of evidence to support the nonmoving party’s case.” Celotex Corp. v. Catrett, 477
U.S. 317, 323 (1986). When considering a motion for summary judgment, the court must draw all
inferences from the record in the light most favorable to the non-moving party. See Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The court is not permitted to weigh the
evidence or determine the truth of any matter in dispute; rather, the court determines only whether the
case contains sufficient evidence from which a jury could reasonably find for the non-moving party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–49 (1986).
Because this Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332 over this state law
claim for wrongful termination, it must apply Ohio law “in accordance with the then controlling
decision of the highest state court.” Grantham & Mann, Inc. v. Am. Safety Prods., Inc., 831 F.2d 596,
608 (6th Cir. 1987). In the absence of an Ohio Supreme Court decision addressing the issue raised
here, this Court must decide the case using “all relevant data,” including decisions of the state
appellate courts. Allstate Ins. Co. v. Thrifty Rent-A-Car Sys., Inc., 249 F.3d 450, 454 (6th Cir. 2001).
The Greeley Claim
Employment in Ohio is governed, with some exceptions, by the employment at-will doctrine.
Leininger v. Pioneer Nat’l Latex, 115 Ohio St. 3d 311, 312 (2007). This generally means that either
the employee or employer may terminate employment for any reason at any time and that an
employee may not sue the employer for wrongful discharge. Avery v. Joint Twp. Dist. Mem. Hosp.,
286 F. App’x 256, 260 (6th Cir. 2008). However, Ohio recognizes a tort for wrongful discharge,
known as a Greeley claim, where the discharge violates a clear public policy. Pytlinski v. Brocar
Prod., Inc., 94 Ohio St. 3d 77, 78 (2002) (citing Greeley v. Miami Valley Maint. Contrs., Inc., 49 Ohio
St. 3d 228 (1990)). To fall within this exception, Plaintiff must establish:
Clear public policy existed and was manifested in a state or federal
constitution, statute or administrative regulation, or in the common law (the
Dismissing employees under circumstances like those involved in her
dismissal would jeopardize the public policy (the jeopardy element);
Her dismissal was motivated by conduct related to the public policy (the
causation element); and
Defendants lacked an overriding legitimate business justification for the
dismissal (the overriding justification element).
Painter v. Graley, 70 Ohio St. 3d 377, 384 n.8 (1994). While the clarity and jeopardy elements are
questions of law for the court to decide, the causation and overriding justification elements are for the
fact-finder. Collins v. Rizkana, 73 Ohio St. 3d 65, 70 (1995).
Plaintiff alleges Defendants’ decision to terminate her employment violates Ohio public policy
enshrined in R.C. § 1702.54, which provides in part:
No officer, director, employee, or agent of a corporation shall . . . with intent to
Make, issue, deliver, transmit by mail, or publish any prospectus, report, circular
statement, balance sheet, exhibit, or document, respecting . . . assets, liabilities,
earnings, or accounts of, a corporation, that is false in any material respect,
knowing the same to be false;
Having charge of any books, minutes, records, or accounts of a corporation,
make therein any entry that is false in any material respect, knowing such entry
to be false, or remove, erase, alter, or cancel any entry therein, knowing that the
entries resulting therefrom will be false.
Because the Ohio Supreme Court has not ruled whether R.C. § 1702.54 gives rise to a Greeley claim,
this Court looks to all relevant data in making its decision.
The Clarity Element
Clear public policy justifying an exception to the employment at-will doctrine may be found
in federal or state constitutions, statutes, administrative rules and regulations, and the common law.
Sutton v. Tomco Machining, Inc., 129 Ohio St. 3d 153, 157 (2011). Where the clear public policy is
based on statute, the Ohio Supreme Court looks to the legislature’s “intent in enacting it” by first
looking to the statutory language and the purpose it seeks to accomplish. Id.
As noted above, R.C. § 1702.54 prohibits the falsification of corporate documents when done
with the intent to deceive. The statute does not impose a duty on employees to report violations of
the statute, nor does it expressly provide protection for employees against retaliatory actions by the
employer if the employee does report, either to management or to an outside agency, a good faith
belief that the statute is being violated. In the abstract, this general prohibition manifests the public
policy of Ohio not to condone deliberate, deceitful corporate fraud -- surely an important policy. But
the inquiry does not end just because this Court does or does not agree with the policy in
R.C. § 1702.54. Indeed, courts must take care not to allow their own policy preferences to override
Courts in Ohio, including federal courts interpreting Ohio laws, have not spoken with
unanimity regarding the types of statutes that may give rise to a Greeley claim. Several courts have
specifically required a statute underlying a Greeley claim to parallel the public policy set forth in
Ohio’s whistleblower statute, R.C. § 4113.52. See, e.g., Hale v. Volunteers of Am., 158 Ohio App.
3d 415, 427 (Ohio Ct. App. 2004). In order to parallel the whistleblower policy, courts have found
that the statute must be one that “imposes an affirmative duty on the employee to report a violation,
[or] specifically prohibit[s] employers from retaliating against employees who had filed complaints,
or that protect[s] the public’s health and safety.” Dean v. Consol. Equities Realty #3, L.L.C., 182
Ohio App. 3d 725, 729 (Ohio Ct. App. 2009).
For example, the plaintiff in Dean was terminated two days after reporting to his boss potential
fraud in an application for credit to buy a car. Id. at 726–27. Plaintiff argued that Ohio has a clear
public policy against fraud, and had enacted many antifraud statutes, such as R.C. § 2921.13(A)(8),
which criminalizes “knowingly mak[ing] a false statement . . . to induce another to extend credit to
. . . the offender . . . when the person to whom the statement is directed relies upon it to that person’s
detriment.” While acknowledging Ohio’s general policy against fraud, the court granted summary
judgment to the defendant, finding the clarity element had not been met because the statute neither
required the plaintiff to report the allegedly fraudulent conduct, nor prohibited defendant from
retaliating against plaintiff. Dean, 182 Ohio App. 3d at 729. Similarly, the court in Hale found no
Greeley claim, in part because the underlying administrative regulations governing the operation of
residential drug treatment centers did not require reporting or provide protection against retaliation.
158 Ohio App. 3d at 428.
Others courts, including the Ohio Supreme Court, while not expressly limiting statute-based
Greeley claims to those paralleling the whistleblower statute, have in effect permitted such claims
only where the statute includes a duty to report, retaliation protection, or conduct affecting the public
or employee health and safety. For example, a recent decision of the Ohio Supreme Court, Sutton v.
Tomco Machining Co., 129 Ohio St. 3d 153 (2011), found the clarity element satisfied where the
underlying statute prohibited retaliation against employees who pursued workers’ compensation
claims. Id. at 160 (expanding the protections of the statute to include injured employees who
experienced a retaliatory employment action between the time of injury and the time of filing for
benefits). Similarly, in Dolan v. St. Mary’s Mem’l Home, 153 Ohio App. 3d 441 (Ohio Ct. App.
2003), the court found a clear public policy embodied in Ohio’s nursing home patients’ bill of rights,
codified in R.C. § 3721.10–17, which protects the health and safety of patients and also prevents
retaliation against employees who report violations of patients’ rights. Id. at 445–46. Finally, in
Kulch v. Structural Fibers, Inc., 76 Ohio St. 3d 134 (1997), the court found the clarity element
satisfied where the public policy at issue was employee safety and the plaintiff invoked the federal
OSHA statute, 29 U.S.C. § 660(c), as well as related Ohio laws. 76 Ohio St. 3d at 152–53.
Still other courts have taken a more expansive view of the clarity element. For example,
Plaintiff points to a decision, from this federal district, finding a clear public policy under the Federal
Corrupt Practices Act (FCPA) against bribery of foreign officials. Kirk v. Shaw Envtl., Inc., 2010 WL
1387887, at *5 (N.D. Ohio 2010). The court in Kirk did not address, and it does not appear the
defendant raised, the question of whether the underlying policy needs to parallel the whistleblower
policies or protect employee or public safety. Instead, the court found the FCPA itself fully and
independently supported a Greeley claim, and cited several decisions from state courts ruling
similarly. In addition, other Ohio appellate courts have found the clarity element satisfied where:
an employee was fired for refusing to ship nonconforming products to a customer in violation of
public policy embodied by the Uniform Commercial Code, Zajc v. Hycomp, Inc., 172 Ohio App. 3d
117, 123 (Ohio Ct. App. 2007), or for consulting with an attorney, in violation of the right to consult
an attorney, a fundamental right of our justice system, Simonelli v. Anderson Concrete Co., 99 Ohio
App. 3d 254, 259 (Ohio Ct. App. 1994). The policies in Zajc and Simonelli neither required reporting
nor expressly protected against retaliation.
Plaintiff also points to Avery v. Joint Twp. Dist. Mem’l Hosp., 286 F. App’x 256 (6th Cir.
2008), which found the clarity element satisfied where the asserted public policy prohibited
falsification of medical records. Id. at 264. While it is true that the administrative regulations
underlying that claim did not require reporting or prohibit retaliation, they are aimed at protecting
public safety, namely by requiring medical personnel to document patient information accurately.
In addition, defendant argued the claim should fail because plaintiff did not comply with the
procedural requirements in the whistleblower statute. The court rejected this position, finding that
plaintiff’s noncompliance with these procedural requirements is not an absolute bar to bringing a
Greeley claim, but it did so in the context of a public policy aimed at protecting public safety. Id.
Thus, Avery does not conflict with decisions such as Dean and Hale, which also do not hold that a
plaintiff must adhere to the procedures in the whistleblower statute; rather, they hold the underlying
policy must either require reporting, protect against retaliation, or protect employee or public safety.
Similarly, an Ohio appellate court found the clarity element satisfied where an employee was
fired after reporting that her boss imminently was going to drive under the influence of alcohol in
violation of Ohio’s policy against drunk driving. Stephenson v. Litton Sys., Inc., 97 Ohio App. 3d
125, 129 (Ohio Ct. App. 1994). Here again, although there was no reporting requirement or
retaliation protection, the policy at issue was aimed at protecting public safety and as such does not
conflict with cases such as Dean and Hale.
This Court finds more persuasive the reasoning of the Ohio courts that require the public
policy invoked in a Greeley claim to parallel the policies underlying the whistleblower statute or
protect employee or public safety. The courts of Ohio generally have found that Greeley claims
cannot lie with every public policy, even “good” ones, and appropriately so. Without these
limitations, Greeley claims could evolve from exceptions to the employment at-will doctrine to the
rule itself. Here, R.C. § 1702.54 neither requires reporting, nor protects against retaliation, nor
protects employee or public health and safety. This statute represents a general prohibition against
deliberate and deceitful falsification of corporate documents -- undoubtedly an important public
policy, but not one that gives rise to a Greeley claim given the full weight of Ohio case law discussed
The Jeopardy Element
Because this Court has rejected Plaintiff’s clarity argument, summary judgment can be granted
on that ground alone; however, even if Plaintiff had shown that R.C. § 1702.54 evinces a sufficiently
clear public policy to allow a Greeley claim, Plaintiff here does not satisfy the jeopardy element.
A jeopardy analysis requires a court to determine whether dismissal of an employee
jeopardizes a clear public policy. See Sutton, 129 Ohio St. 3d at 160–61. To satisfy the jeopardy
element, a plaintiff’s conduct need not be based on a correct belief the defendant is violating a public
policy; rather, a plaintiff needs only a good faith belief his complaint is valid. See Kulch, 78 Ohio St.
3d at 324. Further, courts inquire whether there exists “any alternative means of promoting the
particular public policy to be vindicated by a common-law wrongful-discharge claim.” Wiles v.
Medina Auto Parts, 96 Ohio St. 3d 240, 244 (2002). Although Ohio state courts have not done so,
the Sixth Circuit has applied a three-part analysis in which the court (1) determines the kind of
conduct necessary to further the clear public policy; (2) decides whether plaintiff’s conduct is within
the scope of what the policy protects; and (3) considers whether employees would be discouraged
from engaging in similar conduct by the threat of dismissal. Avery, 286 F. App’x at 264; Himmel v.
Ford Motor Co., 342 F.3d 593, 599 (6th Cir. 2003).
Plaintiff argues she satisfies the jeopardy element because (1) reporting the intentional
falsification of corporate financial documents is necessary to vindicate the policy against such
falsification; (2) her conduct -- raising her concerns with Renner, Youngblood, and others -- is the
kind of conduct necessary to vindicate the policy; and (3) the dismissal of corporate insiders like
herself would dissuade other employees from reporting such falsifications in the future. While her
first point is well taken, but ultimately unavailing because R.C. § 1702.54 does not give rise to
Greeley claims, this Court disagrees with her assessment of points two and three.
If R.C. § 1702.54 evinced a clear public policy for Greeley purposes, dismissal of Plaintiff
would not jeopardize that policy. The crux of the issue here is that Plaintiff, who is not an accountant,
disagreed with numbers included in published financial statements based on data in her personal
dashboard documents. Because the numbers did not match up, she believed Defendants were willfully
misleading the public by publishing inaccurate financial data. However, there is no dispute that,
among other things: (1) Plaintiff knew there would be some added variance in the AR regarding bad
debts during the period Defendants began sending its delinquent accounts to five different collections
agencies rather than one; (2) Plaintiff’s dashboard numbers were raw, unpublished, and had not gone
through the Crowe system for calculating reserves; (3) Plaintiff was not directly involved in the
preparation of financial statements; (4) the accounting department prepared financial statements in
accordance with generally accepted accounting principles (Rieger Dep. 13); (5) the financial
statements and their method of preparation were audited regularly; and (6) the published financial
statement for May 2010, the period in which Plaintiff alleges she had a good faith belief Defendants
were intentionally falsifying corporate documents, acknowledged an 800% variance in bad debt over
May 2009 (Ex. 14). These undisputed facts cast sufficient doubt on Plaintiff’s asserted good faith
belief that Defendants were purposefully, and with the intent to deceive, falsifying corporate financial
documents. Without a good faith belief Defendant was violating a clear public policy, Plaintiff cannot
satisfy the jeopardy element. If anything, Plaintiff’s conduct here demonstrates her dispute with
Renner and Rieger was over accounting principles in which she had no expertise. It cannot be that
the jeopardy element would be satisfied any time an employee disagrees with her employer and
invokes public policy, especially in a technical area in which she lacks expertise.
Similarly, Plaintiff’s reference to corporate insiders does not help her case. She argues that
insiders play a critical role in exposing corruption or fraudulent behavior -- this is true. However, she
was not the kind of insider who would be protected if R.C. § 1702.54 gave rise to Greeley claims.
Although she attended monthly revenue meetings and was involved to some extent with those who
did prepare the financial reports, she was unaware of how the raw data to which she was exposed
related to the ultimate financial statements which were in turn produced in accordance with generally
accepted accounting principles. As such, she was not an insider regarding Defendants’ publication
of financial information. This is not a failing on Plaintiff’s part -- it illustrates only that she lacked
the status of one who would be protected for reporting alleged violations. Dismissal given her
particular circumstances could not be said to dissuade employees from reporting suspected violations
in the future.
Finally, although the law is clear that Greeley claims may be brought under public policies
wholly separate from the whistleblower statute, here, that statute would have been an alternate means
of attempting to vindicate the purpose of R.C. § 1702.54. As both parties note, Plaintiff did not
pursue a whistleblower claim.
Causation and Overriding Justification Not Reached
Because this Court finds, as a matter of law, Plaintiff does not satisfy either the first or second
Greeley elements, there is no need to discuss the third and fourth elements of this claim. This Court
notes, however, that although Defendants have put forward significant evidence in support of the
overriding business justification for terminating Plaintiff’s employment, remaining questions of
material fact likely would preclude summary judgment if Plaintiff had a valid Greeley claim. For
example, the closeness in time between Plaintiff’s termination on June 10 and the June 6 report of a
$10 million loss she attributed to Renner’s calculation of reserves leaves open whether Plaintiff could
establish the causation element, or whether Defendants could persuade that her insubordination was
the overriding reason for termination. These questions need not be answered now.
Objection to Plant Affidavit
Defendants move to strike or in the alternative object to the affidavit of Lisa Plant (Docs. 38
& 39) filed by Plaintiff along with her opposition to the summary judgment Motion because it was
not notarized (see Doc. 35-1). In response, Plaintiff filed a notarized version of the affidavit which
does not differ in substance from the original filing (Doc. 40-1). This Court views the minor technical
deficiency with the initial unnotarized affidavit curable by the subsequent filing, and finds Defendants
are not prejudiced by this Court’s consideration of the notarized version. Accordingly, Defendants’
Objection is denied.
Because Plaintiff’s firing did not violate a clear public policy, Defendants’ Motion for
Summary Judgment (Doc. 32) is granted as to Count I of the Complaint. Count II is not a separate
claim, but rather a request for punitive damages inextricably tied to Count I, and therefore it too is
dismissed. No other claims remaining, this Court enters final judgment for Defendants.
IT IS SO ORDERED.
s/ Jack Zouhary
U. S. DISTRICT JUDGE
March 20, 2013
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