Applegate v. Kiawah Development Partners Inc
ORDER adopting Report and Recommendations of Magistrate Judge Bristow Marchant and denying 53 Defendant's Motion for Summary Judgment. Signed by Honorable Richard M Gergel on 6/24/2013.(cwhi, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF SOUTH CAROLINA
Kiawah Development Partners, Inc.,
This matter is before the Court on the Report and Recommendation of the Magistrate
Judge ("R&R") recommending that this Court deny Defendant's motion for summary judgment.
(Dkt. No. 61). For the reasons set forth below, the Court agrees with and adopts the R&R as the
order of the Court.
Cara Applegate ("Plaintiff') filed this civil action against her former employer, Kiawah
Development Partners, Inc. ("Defendant"), alleging breach of contract and violation of her rights
under the Family and Medical Leave Act ("FMLA"), 29 U.S.C. §§ 2601 et seq. Pursuant to the
provisions of 28 U.S.c. § 636(b)(l)(A) and (B) and Local Civil Rule 73.02(B)(2)(g) DSC, this
matter was automatically referred to a United States Magistrate Judge for all pretrial
proceedings. On July 25, 2012, the Court adopted an R&R of the Magistrate Judge dismissing
Plaintiff's breach of contract claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil
Procedure. (Dkt. No. 23). Subsequently, on February 1, 2013, Defendant filed a motion for
summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure as to Plaintiff's
remaining FMLA claims. (Dkt. No. 53). On May 20, 2013, the Magistrate Judge issued an
R&R recommending that the Court deny Defendant's motion for summary judgment. (Dkt. No.
61). Defendant then filed timely objections to the R&R (Dkt. No. 64) and Plaintiff filed a reply
(Dkt. No. 65).
The Magistrate Judge makes only a recommendation to this Court. The recommendation
has no presumptive weight, and the responsibility for making a final determination remains with
this Court. Mathews v. Weber, 423 U.S. 261,270-71 (1976). This Court is charged with making
a de novo determination of those portions of the R&R to which specific objection is made.
Additionally, the Court may "accept, reject, or modify, in whole or in part, the findings or
recommendations made by the magistrate judge." 28 U.S.C. § 636(b)(1). This Court may also
"receive further evidence or recommit the matter to the magistrate judge with instructions." ld.
Summary judgment is appropriate if a party "shows that there is no genuine dispute as to
any material fact" and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(a). In other words, summary judgment should be granted "only when it is clear that there is
no dispute concerning either the facts of the controversy or the inferences to be drawn from those
facts." Pulliam lnv. Co. v. Cameo Props., 810 F.2d 1282, 1286 (4th Cir. 1987). "In determining
whether a genuine issue has been raised, the court must construe all inferences and ambiguities
in favor of the nonmoving party." HealthSouth Rehab. Hosp. v. Am. Nat'l Red Cross, 101 F.3d
1005, 1008 (4th Cir. 1996). The party seeking summary judgment shoulders the initial burden of
demonstrating to the court that there is no genuine issue of material fact.
Celotex Corp. v.
Catrett, 477 U.S. 317,323 (1986).
Once the moving party has made this threshold demonstration, the non-moving party, to
survive the motion for summary judgment, may not rest on the allegations averred in his
pleadings. ld. at 324. Rather, the non-moving party must demonstrate that specific, material
facts exist that give rise to a genuine issue. Id Under this standard, "[c]onclusory or speculative
allegations do not suffice, nor does a 'mere scintilla of evidence'" in support of the non-moving
party's case. Thompson v. Potomac Elec. Power Co., 312 F.3d 645,649 (4th Cir. 2002) (quoting
Phillips v. CSX Transp., Inc., 190 F.3d 285, 287 (4th Cir. 1999)).
After review of the record, the R&R, and Defendant's objections, the Court finds the
Magistrate Judge accurately portrayed the facts and legal principles in this case and therefore
adopts the R&R as the order of the Court. The Court therefore incorporates by reference the
R&R, and will address Defendant's objections below.
Defendant first objects that the Magistrate Judge erred when he determined that there was
an issue of fact whether Plaintiff was entitled to be paid a monthly Incentive Service Fee ("ISF")
while she was on FMLA leave. Defendant argues that Plaintiffs Employment Agreement (Dkt.
No. 55-6) clearly establishes that Plaintiff was not entitled to ISF while she was on FMLA leave.
The Court, however, agrees with the Magistrate Judge's finding that nothing in the record
conclusively establishes that Plaintiff was not entitled to ISF while on FMLA leave and that
Plaintiff's Employment Agreement is far from clear on this issue. The Employment Agreement
describes the ISF in a separate section as compensation in addition to her base salary which is
contingent upon "satisfactory performance and Ms. Applegate ... [being] actively employed in
good standing at the time of payment(s)."
Defendant argues that the ISF must be
considered subject to the terms of a separate section of her Employment Agreement titled
"Miscellaneous Benefits" which incorporates the terms of Defendant's paid vacation and sick
leave policies. Nothing in the contract mandates this interpretation. Further, there is evidence
that the contract was not interpreted this way by the parties because Defendant never asked
Plaintiff to return portions of the ISF she was paid while out on leave in August 2010 or while
she was out sick or on vacation earlier in the year. I Viewing the evidence in the light most
favorable to Plaintiff, as it must, the Court agrees with the Magistrate Judge that an issue of fact
exists as to whether Plaintiff was entitled to receive the ISF payments while out on FMLA leave.
Defendant next objects that the Magistrate Judge erred by applying outdated FMLA
regulations in his R&R to conclude the ISF was akin to an attendance bonus which could not be
denied while an employee was on FMLA leave.
Defendant argues that, under the current
regulations, an employer may deny an attendance bonus "so long as the employer also
disqualifies employees from such attendance bonuses while on other 'equivalent leave.'" (Dkt.
No. 64 at 12) (quoting 29 C.F.R. § 825.215(c)(2)). In this portion of the R&R, the Magistrate
Judge addresses an alternative argument and it is not essential to the order denying summary
(Dkt. No. 61 at 19) ("Even if, as Defendant contends, this payment should be
classified as a bonus ...."). Further, there is an issue of fact whether the ISF is in fact a "bonus"
or some other type of compensation not subject to that regulation. (See Dkt. No. 55-4 at 25).
Defendant also argues the Magistrate Judge erred by considering Plaintiff's time off from
work in 2010 prior to taking FMLA leave because Plaintiff was never "officially" on vacation or
sick leave from Defendant's perspective. (Dkt. No. 64 at 14-18). Defendant argues that since
Plaintiff was never officially on vacation or sick leave earlier in 2010, she cannot have been
treated more favorably during this period than when later on FMLA leave. Even assuming
Defendant is correct, there is still a genuine issue of fact whether Plaintiff was entitled to ISF
while on leave. As discussed above, the terms of her Employment Agreement do not clearly
1 Defendant disputes that Plaintiff was ever officially on "sick leave" or "on vacation" prior to taking her FMLA
leave in August 2010. As discussed below, the Court finds this argument does not eliminate genuine disputes of
indicate she should not receive ISF while on leave, and the evidence shows she did receive it in
August 2010 after taking FMLA leave.
Finally, Defendant argues that the Magistrate Judge erred by ignoring multiple
independent reasons for terminating Plaintiff separate from her writing and cashing ISF checks
while out on FMLA leave. (Dkt. No. 64 at 20-33). Analyzing the case under the McDonnell
Douglas framework, the Magistrate Judge found that Defendant presented legitimate, non
retaliatory reasons for terminating Plaintiff. However, the Magistrate Judge also found that
Plaintiff had carried her burden of showing these independent reasons were pretext, and that the
real reason for her termination was for exercising her rights under FMLA. Taken in a light most
favorable to Plaintiff, the evidence shows that Defendant was alerted that Plaintiff had written
checks to herself for the ISF fee 2 and then waited for her to cash one of the checks before
immediately firing her. (Dkt. No. 61 at 25). Thus, there is evidence that the real reason she was
terminated was for cashing the checks, and not the other legitimate reasons cited by Defendant.
See Price v. Thompson, 380 F.3d 209, 212 (4th Cir. 2004) ("[T]he plaintiff can prove pretext by
showing that the explanation is unworthy of credence or by offering other forms of
circumstantial evidence sufficiently probative of retaliation.") (quotations omitted); Fink v.
Richmond, c.A. No. DKC 2007-0714, 2009 WL 3216117, at *11 (D. Md. Sept. 29,2009) ("The
strength of the plaintiff's prima facie case, especially the existence of a causal connection, can be
a significant factor in her attempt to rebut the defendant's legitimate non-retaliatory reason for
the adverse action"). The Court agrees with the Magistrate Judge that there is an issue of fact
whether the other reasons cited by Defendant were pretext.
Plaintiff was authorized to write checks payable to herself.
For the reasons set forth above, the Court agrees with and completely adopts the R&R as
the order of the Court. (Dkt. No. 61). Accordingly, the Court DENIES Defendant's motion for
summary judgment. (Dkt. No. 53).
AND IT IS SO ORDERED.
United States DistrIct Court Judge
June)., LI, 2013
Charleston, South Carolina
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